Court Opinion

ID: 867508
Source: CourtListenerOpinion
Date Created: 2013-05-11 22:48:55.526073+00
Date Added: 2024-06-11T09:06:49.691619
License: Public Domain

SUPREME COURT OF ARIZONA
                               En Banc

FACILITEC, INC.,                  )    Arizona Supreme Court
                                  )    No. CV-02-0412-PR
              Plaintiff-Appellee, )
                                  )    Court of Appeals
                 v.               )    Division One
                                  )    No. 1 CA-CV 01-0139
J. ELLIOTT HIBBS, in his capacity )
as Director of the Department of )     Maricopa County
Administration for the State of   )    Superior Court
Arizona,                          )    No. CV 99-22372
                                  )
             Defendant-Appellant. )
                                  )     O P I N I O N
__________________________________)

            Appeal from Superior Court of Maricopa County
                           No. CV 99-22372
                    The Honorable Susan R. Bolton
                   The Honorable Kenneth L. Fields
                    The Honorable Edward O. Burke
                        REVERSED AND REMANDED

            Opinion of Court of Appeals Division One
              204 Ariz. 39, 59 P.3d 803 (App. 2003)
                             VACATED
________________________________________________________________

Fennemore   Craig                                              Phoenix
     by     Timothy Berg
     and    Keith L. Hendricks
     and    Theresa Dwyer
     and    Emily Chang
Attorneys   for Facilitec, Inc.

Terry Goddard, Attorney General                              Phoenix
     by   Charles A. Grube, Assistant Attorney General
Attorneys for J. Elliott Hibbs, in his capacity as
Director of the Arizona Department of Administration
M c G R E G O R, Vice Chief Justice

¶1             We granted review to determine whether the Director of

the Arizona Department of Administration (ADOA) may delegate to

the Deputy Director authority to make the final decision on the

appeal of a procurement protest.           We answer this question in the

affirmative.       We exercise jurisdiction pursuant to Article VI,

Section 5.3 of the Arizona Constitution, Rule 23 of the Arizona

Rules of Civil Appellate Procedure, and Arizona Revised Statutes

(A.R.S.) section 12-120.24 (2003).

                                      I.

¶2             ADOA solicited bids on a contract to provide office

furniture to the state and awarded the contract to a bidder

other than the appellee, Facilitec, Inc. (Facilitec).                  Facilitec

filed a protest, demanding that the contract be rescinded and

that a new one be awarded.          When the state procurement officer

denied the protest, Facilitec appealed to the ADOA Director, J.

Elliott Hibbs (the ADOA Director or Hibbs).             Hibbs delegated the

matter to the ADOA Deputy Director, William Bell (the Deputy

Director or Bell).         Bell issued a Preliminary Decision and Order

and     then    referred    the   matter    to   the    Arizona    Office     of

Administrative       Hearings     (OAH)    for   a     hearing    on     certain

identified issues.          After the hearing, the administrative law

judge    entered    a   recommended   decision       (the   Decision).       The

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Decision       did     not     suggest       that    the      original      contract    be

rescinded, but it did recommend that Facilitec be awarded an

additional non-exclusive contract to provide office furniture to

the   state.          Bell     rejected       the    administrative         law    judge’s

recommendation and issued an agency decision denying Facilitec’s

protest.

¶3             Facilitec filed a motion for review with Hibbs.                        Hibbs

himself took no action, but Bell issued an order denying the

motion for review.

¶4             Because       Hibbs    took    no     action     within      thirty    days,

Facilitec requested the OAH to certify the Decision as the final

decision.       In making that request, Facilitec relied upon A.R.S.

section 41-1092.08.D, which provides:

      [I]f the head of the agency . . . does not accept,
      reject or modify the administrative law judge’s
      decision within thirty days after the date the [OAH]
      sends a copy of the administrative law judge’s
      decision to the head of the agency . . . the [OAH]
      shall certify the administrative law judge’s decision
      as the final administrative decision.

A.R.S.     §    41-1092.08.D          (Supp.        2003).          After    OAH     denied

Facilitec’s         request,    Facilitec         filed   a   complaint      in    superior

court.

¶5             In superior court, Facilitec again argued that because

the   head     of    the     ADOA    did   not    review      the   administrative      law

judge’s Decision, the trial court should deem the Decision to be

the   ADOA’s        final     decision     under     the      terms   of    section    41-

                                              3
1092.08.D.        In   addition,       Facilitec       argued     that     the    Deputy

Director lacked authority to review the Decision.

¶6          The trial court granted partial summary judgment to

Facilitec, finding that “‘[i]n order for the [ADOA] Director to

have the power to delegate legislative or judicial functions the

legislature must expressly grant the power.’”                         Facilitec, Inc.

v. Hibbs, 204 Ariz. 39, 40 ¶ 5, 59 P.3d 803, 804 (App. 2002)

(quoting the superior court).

¶7          The court of appeals reversed, concluding that “the

Deputy Director decided Facilitec’s procurement protest pursuant

to a proper grant of authority from both the Arizona Legislature

and the ADOA Director.”          Id. at 41-42 ¶ 14, 59 P.3d at 805-06.

We   granted     Facilitec’s     petition      for    review     to    consider     this

recurring issue of statewide importance.

                                         II.

¶8          Administrative        agencies           are   governmental           bodies

“charged       with    administering          and      implementing         particular

legislation.”          Black’s    Law    Dictionary        45     (6th     ed.    1990).

Because    the    legislature     is    often    unable    to     specify        detailed

rules of conduct, especially in highly technical and rapidly

changing     fields,     it   frequently        entrusts        agencies     with     the

responsibility for developing and implementing regulatory policy

for a limited subject matter.

                                          4
¶9             Agencies often exercise powers that are peculiar to

each    of     the   three    principal      branches        of       government.              For

example, agencies frequently operate under statutes that grant

them    legislative      power     to   issue          rules,     executive         power       to

investigate      possible       violations       of     rules    or    statutes          and    to

prosecute offenders for these violations, and judicial power to

adjudicate       particular        disputes           regarding        compliance           with

relevant       governing      standards.           See,      e.g.,         State    ex      rel.

Schneider v. Bennett, 547 P.2d 786, 791 (Kan. 1976) (stating

that    “administrative         agencies     exercise         many         types    of    power

including       legislative,      executive,           and   judicial         powers      often

blended together in the same administrative agency”);                                    Kenneth

Culp Davis, Administrative Law Text 24 (3d ed. 1972) (stating

that “a typical administrative agency exercises many types of

power, including executive, legislative, and judicial power”).

¶10            Because agencies are creatures of statute, the degree

to     which    they    can     exercise         any     power     depends         upon        the

legislature’s grant of authority to the agency.                             “An agency . .

. has no powers other than those the legislature has delegated

to it. . . .           ‘Any excursion by an administrative body beyond

the    legislative      guidelines      is       treated     as       an    usurpation         of

constitutional         powers    vested      only       in   the      major        branch      of

government.’”        Cochise County v. Kirschner, 171 Ariz. 258, 261-

62, 830 P.2d 470, 473-74 (App. 1992) (citing Swift & Co. v.

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State Tax Comm’n, 105 Ariz. 226, 230, 462 P.2d 775, 779 (1969),

overruled on other grounds by Pittsburgh & Midway Coal Mining

Co. v. Arizona Dep’t of Revenue, 161 Ariz. 135, 776 P.2d 1061

(1989)); see also Arizona Health Care Cost Containment Sys. v.

Bentley,   187 Ariz. 229,      232,   928 P.2d 653,    656   (App.   1996)

(stating that “‘[t]he scope of an agency’s power is measured by

statute    and    may   not    be     expanded      by     agency   fiat’”)    (citing

Cochise County v. Arizona Health Care Cost Containment Sys., 170
Ariz. 443,    445,   825 P.2d 968,     970    (App.   1991)).        Thus,   in

deciding whether the ADOA Director may delegate to the Deputy

Director authority to make the final decision on the appeal of a

procurement protest, we look to the statutes defining the ADOA

Director’s authority.

¶11         The starting point of our analysis is A.R.S. section

38-462, the general statute governing agency deputies.                            That

section states: “Unless otherwise provided, each deputy of a

state or county officer possesses the powers and may perform the

duties    prescribed      by   law    for     the     office   of   the   principal.”

A.R.S. § 38-462.A (2001).             This broad statutory language imposes

no limits upon the ability of a deputy director to perform any

duty prescribed for the principal, including those set forth in

section    41-1092.08.D,        unless      otherwise       provided.       Facilitec

asserts that because some statutes “otherwise provide,” the ADOA

                                            6
Director            improperly          delegated             his         quasi-judicial

responsibilities to the Deputy Director.

¶12         The      statutes    upon       which    Facilitec      relies       appear     as

part of A.R.S. sections 41-701 to -806 (2001 & Supp. 2003),

through which the legislature created the ADOA.                              Section 41-

703.11 addresses the ADOA Director’s authority to delegate and

provides       that     the     ADOA     Director          shall     “[d]elegate           the

administrative        functions,       duties       and    powers    as    the       director

deems    necessary      to    carry    out    the       efficient   operation         of   the

department.”           A.R.S.    §     41-703.11          (2001)    (emphasis        added).

Section     41-702.A,         which     deals       with      the   Deputy       Director,

provides:        “The director with the approval of the governor shall

appoint    a     deputy      director    of       the     department.          The     deputy

director serves at the pleasure of the director and shall assist

the director in administering the department by performing the

duties     and      responsibilities         that       the   director     prescribes.”

A.R.S. § 41-702.A (2001) (emphasis added).

¶13         Facilitec argues that sections 41-702.A and 41-703.11

permit the ADOA Director to delegate administrative functions

only and that nothing in Title 41 authorizes the ADOA Director

to delegate his quasi-judicial functions to the Deputy Director.

According      to     Facilitec,      the    specific         language    of     Title     41

prevails over the general language of section 38-462.

                                              7
¶14         Facilitec’s           argument        that    sections       41-702.A       and    41-

703.11 prevent the ADOA Director from delegating quasi-judicial

duties because the statutes refer to delegating “administrative

functions, powers and duties” and permit the Deputy Director to

assist    the     ADOA      Director        “in       administering        the       department”

relies    upon       too    narrow        an    interpretation           of    administrative

duties.     As noted above, an administrative agency can exercise

executive,       legislative          and       judicial         power,        often     blended

together.         Therefore,         we    do     not    construe        the     legislature’s

reference       to    administrative              duties      in    these           statutes    as

excluding decision-making responsibilities.

¶15         Moreover, even if we were to read sections 41-702.A

and    41-703.11      narrowly,       we       would    not   regard      the       statutes    as

inconsistent with section 38-462.                       “[W]henever possible we adopt

a   construction       of     a     statute       that     reconciles          it    with   other

statutes    and      gives    force       to    all     statutes    involved.”              Achen-

Gardener, Inc. v. Super. Ct., 173 Ariz. 48, 54, 839 P.2d 1093,

1099 (1992); see also Pima County v. Maya Constr. Co., 158 Ariz.
151, 155, 761 P.2d 1055, 1059 (1988) (“[W]hen reconciling two or

more     statutes,         courts     should          construe     and    interpret          them,

whenever possible, in such a way so as to give effect to all the

statutes involved.”).               We see no conflict between section 38-462

and the statutes on which Facilitec relies.

                                                  8
¶16           Nothing in section 41-702.A or 41-703.11 prohibits the

ADOA Director from delegating any “duties prescribed by law,”

including        quasi-judicial            duties,        to     the       Deputy       Director.

Instead,      sections        41-702.A          and    41-703.11       provide         additional

instruction pertaining to the Deputy Director’s responsibilities

and    the   ADOA     Director’s          general       power    to    delegate         duties   to

subordinates.              Hibbs,    therefore,          acted       within      his    statutory

authority        under       section        38-462        in     delegating            review     of

procurement protests to Bell.

¶17           Another       indication          that    the     legislature        intended      to

permit    the    ADOA       Director       to     delegate      to    the     Deputy     Director

authority       to    make     the        final       decision    on       the   appeal     of    a

procurement protest is that the legislature did not prohibit him

from     doing       so.      In     other        instances,         the     legislature         has

expressly       restricted          the    exercise       of     powers.         For     example,

A.R.S.        section         41-1604             enumerates           the        duties         and

responsibilities of the Director of the Arizona Department of

Corrections.           Section       41-1604.B.2.d         states       that      the    director

“shall not delegate” the responsibilities set forth in A.R.S.

section 41-1604.A.1-5.                    A.R.S. § 41-1604.B.2.d (1999 & Supp.

2003).       The legislature has not included such a prohibition in

the ADOA statutes, which indicates that the legislature intended

to permit the ADOA Director to delegate his powers, as permitted

by section 38-462.

                                                  9
¶18         In     addition      to     arguing     that       Title     41    “otherwise

provides,”       Facilitec    contends       that    the      ADOA     Director      cannot

delegate        quasi-judicial        duties      absent       express        legislative

approval.        In support of this argument, Facilitec relies on two

court of appeals opinions, Godbey v. Roosevelt School District

No. 66 of Maricopa County, 131 Ariz. 13, 638 P.2d 235 (App.

1981),     and    Cactus     Wren     Partners      v.     Arizona       Department     of

Building    &    Fire    Safety,      177 Ariz. 559,       869 P.2d 1212    (App.

1993).    Facilitec’s reliance on these cases is misplaced.

¶19         In Godbey, the acting school superintendent, without

prior    formal    approval      from    the     Board   of    Trustees,       issued   an

administrative       order    requiring         every    teacher       requesting     paid

sick leave to provide a doctor’s certificate stating that the

teacher    was    ill.     131      Ariz.   at    15,    638    P.2d     at   237.      The

teachers sued, claiming that the superintendent lacked power to

issue     the    administrative         order     without       either       prior    Board

delegation of authority or express legislative authorization in

the absence of prior Board approval.                     Id. at 19, 638 P.2d at

241.      The court of appeals found in favor of the teachers,

stating:        “If the action of the superintendent is characterized

as ‘ministerial or administrative’, then the power was delegable

without express legislative authorization.                           If the action is

characterized as ‘legislative or judicial’, then the power was

not so delegable.”         Id. at 19-20, 638 P.2d at 242.

                                            10
¶20        Facilitec          argues      that        Godbey     stands           for     the

proposition      that    a    quasi-judicial      function        is    not       delegable

unless explicitly permitted by statute.                     We disagree with this

broad   interpretation          of     Godbey.         In      Godbey,       no    statute

authorized the delegation of authority to the superintendent.

Here, A.R.S. section 38-462 expressly gives the Deputy Director

power to exercise all authority possessed by the ADOA Director.

¶21        Cactus Wren is similarly inapposite.                         In that case,

tenants of the Desert Skies Mobile Home Park filed a petition

with the Arizona Department of Building and Fire Safety (the

Department)      challenging         Cactus    Wren    Partners’        (Cactus         Wren)

charges for trash removal and sewage services as violative of

the Arizona Mobile Home Parks Residential Landlord and Tenant

Act (the Act).          177 Ariz. at 561, 869 P.2d at 1214.                       A mobile

home parks hearing officer of the Department determined that the

sewage disposal and trash collection fees violated the Act and

required the refund of or rental credit for these overcharges.

Id.     Cactus    Wren       sought   judicial    review,        claiming         that   the

consideration and resolution of conflicts regarding the Act by

the   Department’s       hearing      officer    unconstitutionally               infringed

upon the powers of the judiciary.                 Id.       The court of appeals

recognized a difference between the operation or administration

of an agency and an agency’s quasi-judicial responsibilities and

found   that     the    Department’s       hearing      officer        did    perform      a

                                          11
function “judicial” in nature, but concluded that no separation

of powers violation occurred.               Id. at 562-63, 869 P.2d at 1215-

16.

¶22            Cactus Wren provides little assistance in this case.

There, the issue was whether the legislature had power to permit

the    Department’s      hearing         officer      to    consider     and   resolve

conflicts regarding the Act, or whether this remedy was reserved

to    the   judicial    branch      of    government.         The   case   before    us

presents no separation of powers issue.                     All parties acknowledge

that the legislature has the power to create the administrative

remedy provided to Facilitec.

¶23            Like Godbey, Cactus Wren does not support Facilitec’s

argument that, despite the broad language of section 38-462, the

Deputy      Director   could     exercise        the       ADOA   Director’s     quasi-

judicial power only if the legislature expressly granted the

ADOA Director authority to delegate that power to the Deputy

Director.       In crafting section 38-462, the legislature intended

to    confer    upon   the   ADOA    Director         authority     to   delegate   his

powers, including quasi-judicial powers, to the Deputy Director,

and no additional legislative delegation of authority is needed.

                                          III.

¶24            For the foregoing reasons, we vacate the decision of

the    court    of   appeals,    reverse        the    judgment     of   the   superior

court, and remand to the superior court for further proceedings

                                           12
consistent with this opinion.

                         _______________________________________
                         Ruth V. McGregor, Vice Chief Justice

CONCURRING:

__________________________________
Charles E. Jones, Chief Justice

__________________________________
Rebecca White Berch, Justice

__________________________________
Michael D. Ryan, Justice

__________________________________
Andrew D. Hurwitz, Justice

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