Court Opinion

ID: 859222
Source: CourtListenerOpinion
Date Created: 2013-04-26 19:45:44.518975+00
Date Added: 2024-06-11T13:22:10.374792
License: Public Domain

SUPREME COURT OF ARIZONA
                             En Banc

JAMES C. SELL, Trustee of the     )   Arizona Supreme Court
Participating Trust established   )   No. CV-12-0211-PR
under Debtors’ First Amended      )
Joint Plan of Reorganization      )   Court of Appeals
dated 7-7-06 in U.S. Bankruptcy   )   Division One
Case No. 05-27993-PHX-GBN, on     )   No. 1 CA-SA 12-0105
behalf of the Trust’s             )
Participating Investors,          )   Maricopa County
                                  )   Superior Court
                      Petitioner, )   No. CV2007-005734
                                  )
                  v.              )
                                  )
THE HONORABLE J. RICHARD GAMA,    )   O P I N I O N
JUDGE OF THE SUPERIOR COURT OF    )
THE STATE OF ARIZONA, in and for )
the County of Maricopa,           )
                                  )
                Respondent Judge, )
                                  )
SQUIRE & COMPANY, PC, a           )
Utah professional corporation;    )
LYNN G. HILLSTEAD and JANE DOE    )
HILLSTEAD, husband and wife;      )
DWAYNE ASAY and JANE DOE ASAY,    )
husband and wife; LEWIS AND ROCA, )
LLP, an Arizona limited           )
liability partnership; KEITH      )
BEAUCHAMP and JULIET LIM,         )
husband and wife,                 )
                                  )
       Real Parties in Interest. )
__________________________________)

        Appeal from the Superior Court in Maricopa County
               The Honorable J. Richard Gama, Judge

                            AFFIRMED
________________________________________________________________

           Order of the Court of Appeals Division One
                       Filed May 10, 2012
________________________________________________________________
SHERMAN & HOWARD LLC                                               Phoenix
     By   Robert C. Hackett
          Thomas M. Quigley
          David W. Garbarino
          Jamey G. Anderson
Attorneys for James C. Sell

PERKINS COIE LLP                                                   Phoenix
     By   H. Michael Clyde
          Todd R. Kerr
          Tony Caliendo
Attorneys for Squire & Company, PC, Lynn G. Hillstead,
Jane Doe Hillstead, Dwayne Asay, and Jane Doe Asay

OSBORN MALEDON PA                                                  Phoenix
     By    William J. Maledon
           Geoffrey M. T. Sturr
           Thomas L. Hudson
           James K. Rogers
Attorneys for Lewis and Roca LLP, Keith Beauchamp, and
Juliet Lim

ARIZONA CORPORATION COMMISSION                           Phoenix
     By   Matthew J. Neubert
          Julie A. Coleman
Attorneys for Amicus Curiae Arizona Corporation Commission

BEGAM & MARKS PA                                                   Phoenix
     By   Stanley J. Marks
Attorney for Amicus Curiae Public Justice, PC

MITCHELL & ASSOCIATES                                              Phoenix
     By   Sarah K. Deutsch

And

TIFFANY & BOSCO PA                                       Phoenix
     By   Richard G. Himelrick
Attorneys for Amicus Curiae Mortgages Ltd. Investors
________________________________________________________________

P E L A N D E R, Justice

¶1        We   granted   review   to   determine   whether   the   Arizona

Securities Act (“ASA”), A.R.S. §§ 44-1801 to -2126, authorizes a

                                   2
cause    of   action     for       secondary         liability    based    on    aiding   and

abetting      others’    primary         securities       fraud.         More   than    three

decades ago, based on federal case law that has since changed,

we    recognized       such    aiding         and     abetting     claims.        State    v.

Superior      Court    (Davis),         123 Ariz. 324,     599 P.2d 777   (1979),

overruled in part on other grounds by State v. Gunnison, 127
Ariz. 110, 618 P.2d 604 (1980).                      But in light of Central Bank of

Denver v. First Interstate Bank of Denver, 511 U.S. 164 (1994),

and finding no compelling reason to depart from that case, we

hold that a separate claim for aiding and abetting does not

exist under the ASA, overruling Davis’s contrary holding.

                                               I.

¶2            James C. Sell is the trustee of a trust created to

recover losses suffered by investors in an allegedly fraudulent

investment scheme known as Mathon Fund, LLC.                              Sell filed this

action under the ASA against various persons and entities that

directly      participated         in    the     scheme,    as    well     as   others     who

allegedly      assisted       by    rendering         professional       services.        This

latter    category       of    defendants            included     an    accounting      firm,

Squire and Company (“Squire”), the law firm of Lewis and Roca,

and   several     of    those       firms’       employees.            Sell’s   multi-count

complaint      alleged        that       those        professional       defendants       were

primarily liable for securities fraud under A.R.S. §§ 44-1991

and -2003 (Count One), and secondarily liable for aiding and

                                                 3
abetting others’ statutory violations (Count Two). 1

¶3         In 2008, Superior Court Judge Janet Barton dismissed

Count One against the Lewis and Roca defendants and both counts

against Squire, finding no legal basis for the Count Two claim

because the ASA does not expressly “create aiding and abetting

liability”   for     securities      fraud,     and    because      Central    Bank

overturned   the   federal    case     law    on   which    Davis    had    relied.

After Judge Barton rotated off the case and Superior Court Judge

Douglas   Rayes    was    assigned,    Sell    moved    for    reconsideration.

Judge Rayes granted that motion as to Count Two, ruling that our

decision in Davis was still controlling law, even if Central

Bank called its reasoning into question.

¶4         In 2011, Squire, joined by Lewis and Roca, moved for

summary judgment on the aiding and abetting claim, arguing that

the ASA did not create such secondary liability. 2               Superior Court

Judge Richard Gama, who then presided over the case, granted the

motion.      The   judge    acknowledged        that   Davis     had    not    been

overruled, but found “nothing to suggest [that this Court] will

deviate from Central Bank when it does confront the issue.”

¶5         Without       comment,     the     court    of     appeals      declined

1
     We refer throughout this opinion to Sell’s third-amended
complaint.
2
     Squire has since settled with Sell and is no longer a party
to this action.   Only the Lewis and Roca defendants remain in
the proceedings before us.

                                        4
jurisdiction over Sell’s special action petition.                            Although the

case is in an interlocutory posture, we granted review because

whether aiding and abetting liability exists under the ASA is a

recurring legal question of statewide importance on which lower

courts    are   divided.       We     have       jurisdiction        under    Article   6,

Section 5(3) of the Arizona Constitution and A.R.S. § 12-120.24.

                                         II.

¶6          Enacted    in   1951,      the       ASA    makes   it    illegal     for   any

person, “directly or indirectly,” to commit any of the following

securities-related acts or omissions:

     1.     Employ any device, scheme or artifice to defraud.

     2.   Make any untrue statement of material fact, or
     omit to state any material fact necessary in order to
     make the statements made, in the light of the
     circumstances  under   which  they  were   made,  not
     misleading.

     3.   Engage in any transaction, practice or course of
     business which operates or would operate as a fraud or
     deceit.

A.R.S. § 44-1991(A).

¶7          That     statute    is    “almost          identical     to    the   antifraud

provisions      of    the      1933     Securities          Act       [§     17(a)],     15

U.S.C. § 77q.”       Davis, 123 Ariz. at 331, 599 P.2d at 784.                          But

unlike the 1933 Act, which “contains no express private cause of

action,” “the ASA explicitly provides for a private cause of

action for violations of § 44-1991 in [A.R.S.] § 44-2001(A).”

Grand v. Nacchio, 225 Ariz. 171, 174 ¶ 12, 236 P.3d 398, 401

                                             5
(2010).    And Arizona’s private cause of action “may be pursued

against ‘any person, including any dealer, salesman or agent,

who   made,    participated          in   or       induced      the     unlawful     sale   or

purchase.’”          Id.    ¶   13   (quoting          A.R.S.    §    44-2003(A)). 3        The

federal act contains no such language.

¶8            “The    legislature         intended        the     ASA    ‘as    a    remedial

measure’      for    the     ‘protection       of       the     public’       and   therefore

specified that the act be ‘liberally construed.’”                                   Id. ¶ 16

(quoting 1951 Ariz. Sess. Laws, ch. 18, § 20 (1st Reg. Sess.)).

The   ASA’s     language        “confirms          a    broad        intent    to    sanction

wrongdoing      in        connection      with         the      purchase       or   sale    of

securities.”        Id.

¶9            In Davis, 123 Ariz. at 331–32, 334, 599 P.2d at 784–

85, 787, we found actionable the plaintiffs’ claims that certain

defendants aided and abetted securities fraud under the ASA,

3
     In 1996, the Arizona Legislature amended several sections
of the ASA and added to § 44-2003(A) the following exception,
which has no federal counterpart: “No person shall be deemed to
have participated in any sale or purchase solely by reason of
having   acted  in   the  ordinary   course  of   that  person’s
professional capacity in connection with that sale or purchase.”
A.R.S. § 44-2003(A); see 1996 Ariz. Sess. Laws, ch. 197, § 3
(2nd Reg. Sess.).    The Lewis and Roca defendants suggest that
this exception applies to shield them from liability.    We need
not address that argument, however, because we find not
actionable the aiding and abetting allegation in Count Two, the
only claim at issue here.

                                               6
§ 44-1991. 4   We relied exclusively on two federal district court

decisions that had interpreted § 17(a) of the 1933 Securities

Act, 15 U.S.C. § 77q(a), and § 10(b) of the 1934 Securities

Exchange Act, 15 U.S.C. § 78j(b), to recognize some form of

aiding and abetting liability for securities fraud.      Davis, 123

Ariz. at 331-32, 599 P.2d at 784-85 (citing SEC v. Nat’l Student

Mktg. Corp., 402 F. Supp. 641 (D.D.C. 1975); SEC v. Scott Taylor

& Co., 183 F. Supp. 904 (S.D.N.Y. 1959)).

¶10        Davis neither analyzed the federal cases it cited nor

evaluated whether § 44-1991 or any other section of the ASA

independently authorized aiding and abetting liability.     Rather,

because the federal and state statutory schemes were “almost

identical,” and federal cases held that “[a] defendant who aids

and abets another’s violation respecting the use of manipulative

or deceptive devices in the sale of stock . . . [was] liable as

a principal,” we saw “no reason why one who aids and abets

another in violating A.R.S. § 44-1991 should not also be held

liable as a principal.”   Id. at 331, 599 P.2d at 784.

¶11        A year later, we revisited and overruled Davis to the

extent it required scienter in an action under what is now § 44-

1991(A)(2).    See Gunnison, 127 Ariz. at 112-13, 618 P.2d at 606-

07.   We did so because, after Davis, the United States Supreme

4
     In Davis, this Court referred to provisions now codified in
§ 44-1991(A).

                                 7
Court held in Aaron v. SEC, 446 U.S. 680, 701-02 (1980), that

scienter is not an element for an action under § 17(a)(2) of the

1933 Act.      Gunnison, 127 Ariz. at 113, 618 P.2d at 607.

¶12           In   support      of     our    holding    in     Gunnison,        this    Court

noted that “[u]nless there is a good reason for deviating from

the United States Supreme Court’s interpretation, we will follow

the    reasoning     of    that      court    in    interpreting      sections          of   our

statutes which are identical or similar to federal securities

statutes.”         Id. at 112–13, 618 P.2d at 606–07.                           Although not

required      to    do    so,     we   nonetheless       found       it    “helpful,         for

consistency in the application of the law, to be harmonious with

the United States Supreme Court.”                   Id. at 112, 618 P.2d at 606.

¶13           Fifteen years after Davis, the United States Supreme

Court held in Central Bank that “a private plaintiff may not

maintain an aiding and abetting suit under § 10(b)” of the 1934

Act.    511 U.S. at 191.             The Court found no express authorization

for    such   claims       in   the     act    itself     and    no       good    reason      to

judicially     imply      potential         liability    for     aiding      and      abetting

when    Congress     had    not      seen     fit   to   do    so.        Id.    at   175-90.

Rejecting the notion that “the phrase ‘directly or indirectly’

in the text of § 10(b) covers aiding and abetting,” the Court

pointed out that “aiding and abetting liability extends beyond

persons who engage, even indirectly, in a proscribed activity;

aiding and abetting liability reaches persons who do not engage

                                               8
in the proscribed activities at all, but who give a degree of

aid to those who do.”              Id. at 175-76.

¶14           In Central Bank, the Court found its “role limited

when    the    issue       is    the       scope         of   conduct        prohibited       by     the

statute,”     and     therefore            “adhere[d]           to    the    statutory       text     in

resolving it.”         Id. at 187-88.                    And, the Court noted, the issue

“is not whether imposing private civil liability on aiders and

abettors      is    good    policy         but       whether         aiding     and    abetting       is

covered by the statute.”                   Id. at 177.           The statutory scheme, the

Court said, cannot be judicially amended “to create liability

for    acts   that     are       not       themselves           manipulative          or    deceptive

within the meaning of the statute,” and “[p]olicy considerations

cannot override” the statute’s text and structure.                                     Id. at 177-

78, 188.

¶15           When the Arizona Legislature amended the ASA in 1996,

after both         Davis    and       Central        Bank,       it    expressly       declined       to

specify whether aiding and abetting liability exists under the

ASA.    1996 Ariz. Sess. Laws, ch. 197, § 11(B) (2nd Reg. Sess.)

(“Nothing     in     this       act    .    .    .       determines         whether    or    in     what

circumstances aiding and abetting liability exists under Title

44,    chapter       12,        Arizona         Revised         Statutes.”).               Thus,    the

legislature         neither           approved            nor        rejected     either           case,

apparently deferring to the judiciary the question of whether a

cause of action for aiding and abetting a violation of the ASA

                                                     9
exists.     This Court recently acknowledged, but did not decide,

that issue in Grand, 225 Ariz. at 177 ¶ 31, 236 P.3d at 404.                        It

is squarely before us now.

                                        III.

¶16           “Our goal in interpreting statutes is to give effect

to the intent of the legislature.”                   Estate of Braden ex rel.

Gabaldon v. State, 228 Ariz. 323, 325 ¶ 8, 266 P.3d 349, 351

(2011) (internal quotation marks omitted).                  “When the plain text

of a statute is clear and unambiguous,” it controls unless an

absurdity      or     constitutional        violation   results.          State    v.

Christian, 205 Ariz. 64, 66 ¶ 6, 66 P.3d 1241, 1243 (2003).                        But

when, as here, the “text alone does not resolve the parties’

dispute,”     we     must   “attempt   to    glean   and    give    effect    to   the

legislature’s intent, considering the statute’s context, effects

and consequences, and spirit and purpose.”                  Am. Family Mut. Ins.

Co. v. Sharp, 229 Ariz. 487, 490-91 ¶ 10, 277 P.3d 192, 195-96

(2012).

¶17           As noted above, the legislature expressly intended to

omit from the ASA any mention of aiding and abetting liability.

Thus,   the    ASA     does    not   expressly    authorize        such   claims   or

liability.          Although   the   issue    here   does    not    require   us    to

delineate the precise boundaries of securities fraud under § 44-

1991(A), that statute’s text tracks the language of SEC Rule

10b-5, 17 C.F.R. § 240.10b-5, and of § 17(a) of the 1933 Act, 15

                                         10
U.S.C. § 77q(a).        See Grand, 225 Ariz. at 173–74 ¶ 11, 236 P.3d

at 400–01.        Sell has not established any meaningful difference

between a claim under § 44-1991(A) and one under those federal

laws or under § 10(b) of the 1934 Act, the provision at issue in

Central Bank.

¶18          In interpreting a state statutory scheme such as the

ASA, this Court will give less weight and not necessarily defer

to federal case law that construes a parallel federal statute

when   the    state     and    federal     statutory     provisions        or      their

underlying policies materially differ.                 See Bunker’s Glass Co.

v. Pilkington PLC, 206 Ariz. 9, 12-13 ¶¶ 8, 13, 75 P.3d 99, 102-

03 (2003) (declining “to rigidly follow federal precedent on

every issue of antitrust law regardless of whether differing

concerns and interests exist in the state and federal systems,”

and because doing so would “thwart[] the [Arizona] legislative

intent”     and     would    not   necessarily       achieve    uniformity);         cf.

Gunnison, 127 Ariz. at 112–13, 618 P.2d at 606–07.                      Because we

find   no    such    substantial    differences       here,     however,      we    will

interpret the ASA by following settled federal securities law

unless there is a good reason to depart from that authority.

Gunnison,     127    Ariz.    at   112–13,     618    P.2d     at   606–07.         This

approach     is     consistent     with    the   legislature’s         intent,       as

expressed in 1996, regarding judicial interpretation of the ASA.

1996 Ariz. Sess. Laws, ch. 197, § 11(C) (2nd Reg. Sess.) (“It is

                                          11
the intent of the legislature that in construing the [ASA], the

courts may use as a guide the interpretations given by the . . .

federal   or      other      courts    in    construing         substantially           similar

provisions        in   the     federal      securities          laws       of    the     United

States.”).

¶19        Although          we    are      not     bound       by     Central        Bank    in

determining an issue of state statutory law, we find that case

persuasive support for rejecting aiding and abetting liability

under the ASA.         Much of the Supreme Court’s reasoning in Central

Bank   regarding       the     federal      statute       and    congressional           intent

applies   with         equal      force      to     the     ASA      and        the     Arizona

Legislature’s intent.

¶20          As    noted      above,     the      legislature        did    not       expressly

authorize secondary liability for aiding and abetting in either

the sections setting forth the types of actionable fraudulent

practices under the Act, A.R.S. §§ 44-1991 to -2000, or the

sections prescribing the civil remedies and potential parties

who may be sued for securities fraud, id. §§ 44-2001 to -2005. 5

No ASA provision mentions the terms “aiding” or “abetting.”                                  See

Cent. Bank, 511 U.S. at 177 (“If . . . Congress intended to

impose aiding and abetting liability, we presume it would have

5
     As    amicus   curiae    Arizona   Corporation  Commission
acknowledges: “The [ASA] does not expressly provide for a cause
of action against a secondary actor for aiding and abetting the
primary violation of the Act by another person.”

                                             12
used the words ‘aid’ and ‘abet’ in the statutory text.                        But it

did not.”).

¶21         In contrast, the legislature has expressly recognized

aiding and abetting liability in other statutes.                        See, e.g.,

A.R.S. § 12-812 (aiding and abetting liability for violating

public     nuisance    obscenity        statutes);        id.    §     20-463(A)(5)

(assisting and abetting insurance fraud); id. § 32-1055(D)(5)

(aiding    and   abetting     liability      for   collection     agencies);       id.

§ 46-215(A)(3)     (aiding     and   abetting      welfare      fraud).       As   the

Court in Central Bank remarked, Congress “has taken a statute-

by-statute approach to civil aiding and abetting liability” and

“has been quite explicit in imposing [such] liability in other

instances.”      511 U.S. at 182-83.           The same can be said of the

Arizona Legislature which, like Congress, surely knows “how to

impose aiding and abetting liability when it [chooses] to do

so.”     Id. at 176.    As did the Court in Central Bank, we find it

“not plausible to interpret the statutory silence as tantamount

to an implicit [legislative] intent to impose . . . aiding and

abetting liability.”          Id. at 185; cf. Estate of Braden, 228

Ariz. at 327-28 ¶ 16, 266 P.3d at 353-54 (explaining that when a

statute specifically limits those who may be held liable for the

statutorily      proscribed    conduct,      liability     cannot      be    extended

beyond the statutory categories).

¶22         Despite    the    notable     absence    in    the   ASA    of    express

                                        13
authorization for aiding and abetting claims, Sell argues that

we should reject Central Bank’s reasoning and conclusion because

different      policy         objectives         underlie     the     ASA     and     federal

securities laws.              He correctly notes that, from its inception,

the ASA was intended to be remedial, protective of the public,

and liberally construed.                   See supra ¶ 8.            In contrast, some

authority suggests that, although Congress crafted the 1933 and

1934 Acts to protect investors, the central purpose of those

acts is to ensure full disclosure and honest markets.                                Reves v.

Ernst    &   Young,       494 U.S. 56,    60    (1990);      Ernst    &     Ernst     v.

Hochfelder, 425 U.S. 185, 194–95 (1976).

¶23           But   even        if    we    accept      Sell’s     assertion        that     the

primary purposes of the ASA and the federal securities acts are

somehow      different,         his   argument         that   we    should    depart        from

Central Bank is unpersuasive.                     “A liberal construction is not

synonymous     with       a    generous      interpretation,          and     we    will    not

impose a burden or liability not within the terms or spirit of

the law.”      Estate of Braden, 228 Ariz. at 325 ¶ 9, 266 P.3d at

351     (internal     quotation            marks,      citations,       and       alterations

omitted).      Because § 44-2001(A), unlike federal securities law,

expressly provides a private cause of action for violations of

§ 44-1991(A), Grand, 225 Ariz. at 174 ¶ 12, 236 P.3d at 401, the

legislature,        not       the     courts,      should      define       the     scope     of

liability under that statutory scheme.                        In short, we decline to

                                              14
judicially      recognize    potential     securities-related        claims    that

are not clearly established or necessarily implied by the ASA.

¶24            Sell also contends that § 44-2003’s language is broad

enough to include aiding and abetting liability, even though not

expressly stated.       As he points out, that statute has no federal

counterpart and permits an action to be brought under § 44-2001

against “any person . . . who made, participated in or induced

the unlawful sale or purchase [of securities].”                  A.R.S. § 44-

2003(A) (emphasis added).

¶25            That language, however, supports a claim for primary

liability under § 44-1991; it does not create a separate cause

of    action    for,   or   secondary     liability   based    on,    aiding    and

abetting.        According   to   Sell,    the   Lewis   and   Roca   defendants

“participated in” the alleged securities violations within the

meaning of § 44-2003(A).          See Grand, 225 Ariz. at 175 ¶ 21, 236

P.3d at 402 (citing Standard Chartered PLC v. Price Waterhouse,

190 Ariz. 6, 21–22, 945 P.2d 317, 332–33 (App. 1996)).                    If so,

Sell’s claim is for primary liability under § 44-1991, 6 arguably

rendering his aiding and abetting claim superfluous — a point

Sell conceded at oral argument but which we need not decide.

¶26            Sell also argues that even though the ASA does not

6
     Although the superior court dismissed Sell’s Count One
claim for primary liability, that ruling apparently has not been
reduced to a final judgment and is not at issue before us.

                                        15
expressly    authorize    an    aiding       and   abetting   claim,      we   should

apply   common    law   principles      to    recognize   one.      Although      the

ASA’s remedy provisions do not limit “any statutory or common

law right of any person in any court for any act involved in the

sale    of   securities,”      A.R.S.    §    44-2005,    Sell    would    have   us

superimpose a common law aiding and abetting claim on the ASA’s

purely statutory provisions.            We decline to do so.

¶27          Aiding and abetting liability perhaps is most commonly

applied under Arizona’s criminal code.                See A.R.S. §§ 13-301 to

-304.    Our courts have also recognized certain forms of civil

liability for aiding and abetting in torts.                      For example, we

have    noted    that   “Arizona   recognizes        aiding   and   abetting      as

embodied in Restatement [(Second) of Torts] § 876(b),” and “a

person who aids and abets a tortfeasor is himself liable for the

resulting harm to a third person.”                 Wells Fargo Bank v. Ariz.

Laborers, Teamsters & Cement Masons Local No. 395 Pension Trust

Fund, 201 Ariz. 474, 485 ¶ 31, 38 P.3d 12, 23 (2002).                      Thus, as

a matter of common law, our courts have recognized aiding and

abetting liability in various tort-related contexts.                   Chalpin v.

Snyder, 220 Ariz. 413, 417 ¶¶ 13-14, 424 ¶ 45, 207 P.3d 666,

670, 677 (App. 2008) (multiple tort claims against an attorney);

Sec. Title Agency, Inc. v. Pope, 219 Ariz. 480, 491 ¶¶ 44–46,

200 P.3d 977, 988 (App. 2008) (breach of fiduciary duty); Dawson

v. Withycombe, 216 Ariz. 84, 102 ¶¶ 49-50, 163 P.3d 1034, 1052

                                         16
(App. 2007) (fraud).

¶28          But those decisions do not persuade, let alone compel,

us to extend common law aiding and abetting liability to the

ASA.    As discussed above, unlike § 17(a) and § 10(b) of the

federal    securities   acts,     the        ASA,      §   44-2001(A),    expressly

authorizes a private cause of action for violations of § 44-

1991(A).     Grand, 225 Ariz. at 174 ¶ 12, 236 P.3d at 401; cf.

Cent. Bank, 511 U.S. at 179 (“From the fact that Congress did

not attach private aiding and abetting liability to any of the

express causes of action in the securities Acts, we can infer

that Congress likely would not have attached aiding and abetting

liability to § 10(b) had it provided a private § 10(b) cause of

action.”).      In   addition,    the        ASA       prescribes   the   available

remedies and categories of potential defendants, and articulates

the “elements of securities fraud.”                 Aaron v. Fromkin, 196 Ariz.
224, 227 ¶ 13, 994 P.2d 1039, 1042 (App. 2000) (citing A.R.S.

§ 44-1991(A)(2)).

¶29        Accordingly,    it    would       be     inappropriate    to   anchor    a

finding of aiding and abetting liability under the ASA on common

law tort principles.      See Cent. Bank, 511 U.S. at 177, 184; cf.

Mann v. GTCR Golder Rauner, L.L.C., 483 F. Supp. 2d 884, 919 (D.

Ariz. 2007) (declining to extend aiding and abetting liability

found   under   Restatement     § 876(b)          to    statutory   violations     of

Arizona’s Uniform Fraudulent Transfer Act).                    Instead, we think

                                        17
it is more appropriate for the legislature, if it chooses, to

expressly provide for any such claim.                       Cf. State ex rel. Horne

v. Autozone, Inc., 229 Ariz. 358, 363 ¶ 22, 273 P.3d 1278, 1283

(2012) (when a statutory scheme includes certain remedies, a

remedy not included “should not be read by the courts into the

existing     statute”).         In     that        regard,     the     various       policy

arguments    advanced     by    Sell    and        certain    amici    for   preserving

aiding and abetting liability under the ASA are better directed

to the legislature.            See Cent. Bank, 511 U.S. at 177, 188-89

(noting competing policy arguments for and against aiding and

abetting     liability    under        the        federal    securities      acts,      but

framing the issue as whether such liability is covered by the

statute, not whether it is good policy).

¶30          We are mindful of the importance of stare decisis, and

how   that    doctrine     demands       caution        in     overruling        a    prior

decision, especially given the high burden of departing from

previous interpretations of a statute.                       State v. Hickman, 205
Ariz. 192, 201 ¶ 38, 68 P.3d 418, 427 (2003).                         But, adhering to

the approach set forth in Gunnison and approved in the 1996

legislation, we find sufficient justification to follow Central

Bank and overrule Davis, which was based solely on federal case

law that has since changed. 7

7
     After Central Bank, the two federal district courts whose
decisions we followed in Davis rejected aiding and abetting

                                             18
¶31          Finally,       we   note    that       the    superior      court      erred    by

anticipating    that    we       would       revisit      and     overrule     Davis   after

Central Bank.        The lower courts are bound by our decisions, and

this Court alone is responsible for modifying that precedent.

State v. Smyers, 207 Ariz. 314, 318 ¶ 15 n.4, 86 P.3d 370, 374

n.4 (2004); see also McKay v. Indus. Comm’n, 103 Ariz. 191, 193,

438 P.2d 757,     759    (1968)      (“Whether             prior   decisions     of     the

highest court in a state are to be disaffirmed is a question for

the court which makes the decisions.                       Any other rule would lead

to chaos in our judicial system.”).                       Trial courts are required

to follow the decisions of a higher court, and the superior

court here failed to abide by that fundamental principle.                                    We

therefore    caution        lower   courts          not    to     depart     from    binding

precedent anticipating that we will overrule existing case law.

                                              IV.

¶32          For the reasons stated above, we overrule Davis to the

extent   that   it    recognizes         a    cause       of    action   for    aiding      and

claims under federal securities laws.      In re Parmalat Sec.
Litig., 383 F. Supp. 2d 616, 624 (S.D.N.Y. 2005); Lindblom v.
Mobile Telecomms. Techs. Corp., 985 F. Supp. 161, 163 (D.D.C.
1997).    Other courts have also refused to judicially imply
aiding and abetting claims under state securities laws when the
relevant statutes do not expressly authorize such liability.
See, e.g., Conn. Nat. Bank v. Giacomi, 659 A.2d 1166, 1177
(Conn. 1995); Atlanta Skin & Cancer Clinic, P.C. v. Hallmark
Gen. Partners, Inc., 463 S.E.2d 600, 604 (S.C. 1995); cf. State
ex rel. Goettsch v. Diacide Distribs., Inc., 561 N.W.2d 369, 374
(Iowa 1997) (recognizing aiding and abetting liability based on
express statutory provisions).

                                              19
abetting   liability   under   the   ASA.   We   therefore   affirm   the

superior court’s summary judgment in favor of the Lewis and Roca

defendants on Count Two of Sell’s complaint.

                           __________________________________
                           A. John Pelander, Justice

CONCURRING:

__________________________________
Rebecca White Berch, Chief Justice

__________________________________
Robert M. Brutinel, Justice

__________________________________
Peter J. Eckerstrom, Judge*

__________________________________
Garye L. Vásquez, Judge *

*
     Pursuant   to  Article   6,  Section   3   of  the   Arizona
Constitution, the Honorable Peter J. Eckerstrom and the
Honorable Garye L. Vásquez, Judges of the Arizona Court of
Appeals, Division Two, were designated to sit in this matter.

                                     20