Abc v. Flood Control ( 2017 )

NOTICE: NOT FOR OFFICIAL PUBLICATION.
UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL
AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.
IN THE
ARIZONA COURT OF APPEALS
DIVISION ONE
ABC SAND AND ROCK COMPANY INC., Plaintiff/Appellant,
v.
FLOOD CONTROL DISTRICT OF MARICOPA COUNTY,
Defendant/Appellee.
No. 1 CA-CV 16-0294
FILED 12-21-2017
Appeal from the Superior Court in Maricopa County
No. LC 2015-000096-001
The Honorable Crane McClennen, Judge, Retired
AFFIRMED
COUNSEL
Osborn Maledon PA, Phoenix
By Colin F. Campbell, Meghan Grabel, Jana Lynn Sutton
Counsel for Plaintiff/Appellant
Hinshaw & Culbertson LLP, Phoenix
By Stephen W. Tully, Bradley L. Dunn
Counsel for Defendant/Appellee
ABC v. FLOOD CONTROL
Decision of the Court
MEMORANDUM DECISION
Judge Jennifer B. Campbell delivered the decision of the Court, in which
Presiding Judge Michael J. Brown and Judge Margaret H. Downie (retired)
joined.
C A M P B E L L, Judge:
¶1 ABC Sand and Rock Company, Inc. (“ABC”) appeals the
superior court’s order affirming an administrative decision that ABC failed
to obtain a renewed permit for its sand and gravel operations. For the
following reasons, we affirm the decision of the superior court.
FACTS AND PROCEDURAL BACKGROUND
¶2 This is the second appeal in the same dispute between ABC
and the Maricopa County Flood Control District (“the District”) concerning
ABC’s mining permit.1 The District is a political taxing subdivision of the
State of Arizona and is responsible for regulating floodplains. Ariz. Rev.
Stat. (“A.R.S.”) § 48-3603(A), (C). Pursuant to A.R.S. § 48-3613(A), a person
must obtain written authorization from the District before engaging in
development in a floodplain.
¶3 In February 2011, ABC attempted to renew its operating
permit to remove gravel in the Aqua Fria River floodway. ABC sent the
District a $6,400 permit renewal fee, as well as a letter emphasizing that it
was only seeking to summarily renew its current permit. The District, in
turn, notified ABC that its application for renewal was deficient and
requested additional information, including a current topographic survey,
an “updated” development plan, a mining plan, and other documentation.
In May 2011, the District issued ABC a notice of violation and cease and
desist letter stating it had not received the required additional information
and that ABC was now operating without a permit in violation of the
regulations. The notice warned that if ABC continued to operate in violation
of floodplain regulations, it could be subject to civil fines.
1 This case was previously before this court in Flood Control Dist. of
Maricopa Cty. v. ABC Sand and Rock Co., Inc., 1 CA-CV 13-0450, 2014 WL
2599928 (Ariz. App. June 10, 2014) (mem. decision).
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ABC v. FLOOD CONTROL
Decision of the Court
¶4 After a hearing in September 2011, a District hearing officer
issued his report and recommendation, concluding ABC had been
operating without a permit since May 2011. The hearing officer
recommended the District both order ABC to cease operations until it
obtained a permit and impose a financial penalty for the time it had been
operating unpermitted. After reviewing the hearing officer’s
recommendation, the District’s chief engineer issued his final order in
November 2011 concluding ABC had never successfully renewed its permit
and imposing a fine of $169,000.
¶5 ABC appealed the chief engineer’s final order to the District’s
board of hearing review (“the Board”), which is tasked with reviewing the
District’s final orders. A.R.S. § 48-3603(C)(25), -3615.01(H).2 In March 2012,
the Board held a hearing, heard oral argument, met in executive session,
and voted unanimously in open session to deny the chief engineer’s final
order. The Board provided no factual or legal bases for its decision, and in
its final written order issued in June 2012, summarily denied the order of
the chief engineer.
¶6 In July 2012, the District sought judicial review of the Board’s
June 2012 order in superior court. In May 2013, the superior court
concluded it could not meaningfully review the Board’s June 2012 order
because of the Board’s failure to provide any factual findings or legal
conclusions. The superior court vacated the Board’s June 2012 order and
remanded with instructions that the Board “state conclusions of law of
what an entity in the position of ABC must do to renew its permit,” and
further “make findings of fact of what ABC did in this matter to comply
with the legal requirements for the renewal of its permit.” ABC appealed
the superior court’s remand order, which this court affirmed in June 2014.
¶7 Meanwhile, ABC had filed suit against both the District and
the Board in federal district court under 42 U.S.C. § 1983. See ABC Sand and
Rock Co., Inc. v. Maricopa Cty., 2013 WL 6059296 (D. Ariz. Nov. 18, 2013). The
district court concluded that the Board had “ruled in favor of [ABC] and
found that the February 2011 renewal of the . . . permit was valid and in
effect[,]” and that the superior court’s remand was merely for the Board to
“explain its decision and make factual findings.” Id. at *4. The district court
therefore held that ABC had not yet suffered any concrete and
2At the time of that action, the current version of A.R.S. § 48-
3615.01(H) was located under A.R.S. § 48-3615.01(G). That provision was
renumbered by the Legislature, without material change, to A.R.S. § 48-
3615.01(H).
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ABC v. FLOOD CONTROL
Decision of the Court
particularized injury and the case was not ripe for review. Id. The Ninth
Circuit affirmed the district court’s decision in December 2015. ABC Sand
and Rock Co., Inc. v. Cty. of Maricopa, 627 F. App’x 626 (9th Cir. 2015).
¶8 In accordance with the remand instructions from the superior
court, the Board held a public vote in January 2015 and issued a more
thorough order concerning the District chief engineer’s final order of
November 2011. The Board maintained it was bound by its governing
procedures to either “uphold or deny” the District’s final order, and
reiterated its original denial. However, while dismissing the $169,000 fine
the District had levied against ABC as arbitrary, the Board explained ABC
had not successfully renewed its operating permit and a complete permit
application was still needed.
¶9 ABC appealed the Board’s January 2015 order to the superior
court. In March 2016, the superior court upheld the Board’s January 2015
order, holding that: (1) the Board did not exceed the scope of its discretion
on remand; (2) substantial evidence supported the Board’s decision, which
was not contrary to law, arbitrary or capricious, or an abuse of discretion;
(3) the District was not judicially estopped from contending ABC had no
valid permit because of its arguments in the federal court action; (4) the
Board did not violate Arizona’s open meeting law; and (5) the Board’s order
was internally consistent. ABC appealed from the superior court’s decision.
STANDARD OF REVIEW
¶10 When reviewing an agency’s decision, the superior court
determines whether the agency action was arbitrary, capricious, or an abuse
of discretion. Gaveck v. Ariz. St. Bd. Of Podiatry Exam’rs, 222 Ariz. 433, 436, ¶
11 (App. 2009). In doing so, the superior court is not bound by the agency’s
legal conclusions but “must defer to the agency’s factual findings and
affirm them if supported by substantial evidence.” Id. at ¶¶ 11-12 (citations
omitted). When we review a superior court’s ruling affirming an
administrative decision, we engage in the same process and are bound by
neither the agency’s nor the superior court’s legal conclusions. Id. at ¶ 12. If
the administrative decision was based on an interpretation of law, we
review it de novo. Forest Guardians v. Wells, 201 Ariz. 255, 259, ¶ 9 (2001).
DISCUSSION
¶11 ABC contends the Board erred in three ways in its January
2015 order: (1) the Board abused its discretion by relying on regulations not
yet in place when ABC attempted to renew its permit in 2011, and ABC
properly renewed its operating permit in compliance with the regulations
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ABC v. FLOOD CONTROL
Decision of the Court
effective at the time; (2) the Board is judicially estopped from contending
that ABC failed to obtain a valid permit because of the District’s successful
legal arguments in federal court; and (3) the Board did not abide by
Arizona’s open meetings law, rendering its decision void.
I. ABC’s 2011 Permit Renewal Application
¶12 ABC argues that “[t]he heart of the superior court’s decision”
was its summary approval of the Board’s January 2015 order; specifically,
ABC objects to the superior court’s approval of the Board’s conclusion that
ABC had not successfully renewed its permit because it still needed to
submit a complete permit application meeting all applicable regulations.
ABC claims that it not only renewed its permit successfully in 2011 as a
matter of law, but also that the Board relied on the wrong regulations in
finding otherwise.
¶13 According to the version of the Floodplain Regulations for
Maricopa County (“FRMC”) enacted in 2006, the District requires all
mining operators to obtain a permit before operating in a floodplain: “A
Floodplain Use Permit shall be obtained in all delineated floodplains prior
to commencing Development. . . .” FRMC § 501 (2006). The regulations
mandate that a Floodplain Use Permit “for the extraction of sand and gravel
or other materials within the Floodway shall be granted if the applicant
shows that excavations will not have a cumulative adverse impact[,]” in
addition to a number of other conditions. FRMC § 801(B) (2006). A
Floodplain Use Permit “shall not exceed a five (5) year duration and may
be issued for a lesser duration of time as determined by the Floodplain
Administrator.” FRMC § 801(B)(12) (2006).
¶14 To apply for a permit, the regulations require an applicant to
“submit any information that the Floodplain Administrator considers
necessary in making determinations required by these Regulations. The
applicant may also be required to provide certification that all requirements
of the Floodplain Use Permit have been met.” FRMC § 502 (2006). The
regulations make no distinction between first-time permit applications and
renewal permit applications, except in the proposed fee schedule. In the
2008 revision to the fee schedule, an “Initial Permit Application” for sand
and gravel operations requires a fee of $12,800, while a “Sand and Gravel
Renewal (Five Year)” requires a fee of $6,400.
¶15 Because the 2006 regulations make no other distinction
between the procedure for acquiring an initial permit versus acquiring a
renewed permit, it was within the District’s authority to demand additional
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ABC v. FLOOD CONTROL
Decision of the Court
information from ABC before granting it another five-year permit.
Although the disparity in fees suggests that the District may have, as a
matter of practice, typically required less of an entity to renew its permit
compared to the initial application, nothing in the regulations limited what
the District could require from an applicant at the renewal stage. Given that
the regulations further provide that, “[i]f the provisions of these
Regulations conflict with or overlap with other regulations . . . the more
stringent requirement or restriction shall prevail,” and that regulations
shall be “[l]iberally construed in favor of the governing body,” FRMC § 203
(2006), it was within the District’s power to deny ABC another five-year
permit until it submitted the requested materials.
¶16 Therefore, the Board did not abuse its discretion nor act
contrary to law in concluding that ABC did not successfully renew its
permit. See Blake v. City of Phx., 157 Ariz. 93, 96 (App. 1988) (“We will not
substitute our judgment for that of the agency if it was persuaded by the
probative force of the evidence before it. We will not substitute our
judgment for that of the board, even where the question is faulty or
debatable and one in which we would have reached a different conclusion
had we been the original arbiter of the issues raised by the application.”)
(citations omitted).
¶17 ABC further argues that the Board abused its discretion by
applying the wrong regulations (the 2011 regulations instead of the 2006
regulations) to support its conclusions on remand. The Board’s January
2015 order states:
The submission of application fees alone does not constitute
a sufficient application and therefore there is no effective
permit currently in place. See . . . Maricopa County Floodplain
Regulations, Section 401, 403.
This provision does appear to cite to the FRMC enacted in late 2011. 3 It is
unclear why the Board cited a version of the regulations not yet in place
(the 2011 regulations) when ABC first attempted to renew its permit;
however, the issue of whether the Board actually relied on the 2011
regulations or if the citation was a clerical error could have been raised in
3 Although the 2006 regulations also contain a § 401 and § 403, those
sections pertain to the allowable uses for which a Floodplain Use Permit
may be granted and do not obviously relate to the Board’s above conclusion
of law. Sections 401 and 403 of the 2011 regulations, however, relate directly
to the procedures required for obtaining and renewing permits.
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ABC v. FLOOD CONTROL
Decision of the Court
the superior court. As ABC acknowledges in its reply brief, ABC did not
specifically argue below that the Board relied on the wrong regulations.
ABC therefore waived this argument on appeal, and—given that we have
decided the Board’s 2015 order was not contrary to law, supra ¶ 16—we
decline to address it. See, e.g., Harris v. Cochise Health Sys., 215 Ariz. 344, 351,
¶ 23 (noting that our standard practice is to decline to address arguments
raised for the first time on appeal).
II. Judicial Estoppel
¶18 Based on the arguments the Board put forth in federal court,
ABC claims the Board was judicially estopped from concluding that its
permit was not renewed.
¶19 In November 2013, the federal district court granted the
Board’s motion to dismiss ABC’s suit as unripe because it had not yet
suffered an injury. ABC Sand and Rock Co., 2013 WL 6059296 at *3-4. The
district court reasoned:
[I]n March 2012, the Review Board ruled in favor of [ABC]
and found that the February 2011 renewal of the . . . permit
was valid and in effect. Because [ABC’s] . . . permit was found
to have been renewed, and [ABC] continued to operate as
usual, there would have been no deprivation of constitutional
rights at that point. . . . The [superior court’s] remand did not
deprive [ABC] of its permit renewal. If not for [ABC’s] appeal
to the Arizona Court of Appeals, the Review Board likely
would have explained its decision and made factual findings
as ordered, and [ABC’s] permit would not have been affected.
Id. at *4. ABC now points to the Board’s reliance on the district court’s
reasoning on appeal to the Ninth Circuit in 2014. Specifically, ABC contends
that the Board successfully argued before the Ninth Circuit that “ABC
prevailed before the Review Board” and the superior court “did not reverse
or reject the Review Board’s decision.” See ABC Sand and Rock Co., Inc., 627
F. App’x 626 (affirming district court’s dismissal of federal claims). ABC
contends that, after its federal case was dismissed, the Board “turned
around and issued its 2015 order on remand directly contradicting its
arguments in federal court.”
¶20 As a general rule, “a party who has assumed a particular
position in a judicial proceeding is estopped to assume an inconsistent
position in a subsequent proceeding involving the same parties and
questions.” State v. Towery, 186 Ariz. 168, 182 (1996) (citations omitted).
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ABC v. FLOOD CONTROL
Decision of the Court
Further, “[j]udicial estoppel is not intended to protect individual litigants,
but is invoked to protect the integrity of the judicial process by preventing
a litigant from using the courts to gain an unfair advantage.” Id. (citations
omitted).
¶21 Judicial estoppel should be invoked cautiously and only
when three requirements are met: (1) the parties are the same; (2) the
question involved is the same; and (3) the party asserting the inconsistent
position was successful in the prior judicial proceeding. Bank of Am. Nat’l
Trust and Sav. Ass’n v. Maricopa Cty., 196 Ariz. 173, 175, ¶ 7 (App. 1999). In
regard to the third requirement, a party is not considered to have been
successful in a prior judicial proceeding unless “(a) the court in that
proceeding granted the party relief or accepted the party’s earlier
inconsistent position either as a preliminary matter or as part of a final
disposition, and (b) the party’s inconsistent position was a significant factor
in the relief granted.” Id. at 175, ¶¶ 7-8.
¶22 The third requirement of judicial estoppel—that the party
asserting the inconsistent position was successful in the prior proceeding—
has not been met. While the district court did note that the Board’s denial
meant that ABC’s permit was “found to have been renewed,” supra ¶ 19,
which was later proved to be inaccurate by the Board’s issuance of findings
of fact and conclusions of law, the district court ultimately dismissed ABC’s
complaint for lack of ripeness. ABC Sand and Rock Co., 2013 WL 6059296 at
*5. The most significant factor in the district court’s decision was that ABC
continued to operate as normal and had not yet been penalized nor suffered
any deprivation of any constitutional right. Supra ¶ 19. Although the Board
ultimately concluded in January 2015 that ABC had not successfully
renewed its permit, the District enforced neither the civil fine nor further
permitting requirements against ABC in the interim. The district court
dismissed ABC’s § 1983 claims without prejudice, explaining the issues
were not ripe for decision because the validity of the permit was still being
decided at that time: “[D]ismissing the present case for lack of ripeness will
not impose hardship on [ABC] because it can assert its claims if and when
they become ripe.” ABC Sand and Rock Co., 2013 WL 6059296 at *4. Now that
the Board has declared ABC’s permit was never actually renewed, ABC
may presumably renew its federal claims.
¶23 Furthermore, the second requirement of judicial estoppel is
not satisfied because the question involved in the federal and state court
proceedings is not the same. Although ABC claims “the question of
whether ABC had successfully renewed its permit in 2011 was the exact
same issue at the heart of both the federal and administrative proceedings,”
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Decision of the Court
that was not the issue litigated in federal court. Rather, the federal court
case was premised on an alleged § 1983 violation and was dismissed for
lack of ripeness before the court could evaluate its merits. Id. at *3-5.
¶24 Because the District was not “successful” in the federal action
and because the question involved there was not the same as the question
at issue here, we decline to apply the doctrine of judicial estoppel.
III. Open Meeting Law
¶25 After the superior court remanded the Board’s June 2012
order with instructions to issue explanatory findings of fact and conclusions
of law, the Board issued its new order following a public vote in January
2015. ABC argues the Board’s January 2015 order is void for violating
Arizona’s open meeting law.
¶26 Arizona’s open meeting law demands that “[a]ll meetings of
any public body shall be public meetings and all persons so desiring shall
be permitted to attend and listen to the deliberations and proceedings. All
legal action of public bodies shall occur during a public meeting.” A.R.S. §
38-431.01(A). A public body may hold an executive session—a gathering of
a quorum of the public body’s members from which the public is
excluded—for limited purposes. A.R.S. § 38-431(2). Any legal action
requiring a final vote or decision, however, “shall not be taken at an
executive session” instead “[a] public vote shall be taken before any legal
action binds the public body.” A.R.S. § 38-431.03(D). Generally, any legal
action taken by a public body in violation of these provisions is null and
void. A.R.S. § 38-431.05(A).
¶27 One of the limited purposes for which a public body may
meet in executive session is to discuss or consult for “legal advice” with the
public body’s attorney. A.R.S. § 38-431.03(A)(3). This exception is not
limited to privileged or otherwise inherently confidential lawyer-client
communications, City of Prescott v. Town of Chino Valley, 166 Ariz. 480, 483-
85 (1990), but we must also “take care not to interpret ‘legal advice’ so
broadly as to frustrate the Open Meeting Law by allowing public bodies to
delegate responsibilities to attorneys and then cloak negotiations and
executive sessions in secrecy by having the attorneys present,” Fisher v.
Maricopa Cty. Stadium Dist., 185 Ariz. 116, 124 (App. 1995). The Arizona
Supreme Court has summarized this exception to the open meeting law
thusly:
In short, members of a public body may meet in executive
session for discussion with attorneys regarding the legal
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ABC v. FLOOD CONTROL
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propriety, phrasing, drafting, and validity of the proposed
legislation, including its meanings, legal scope, possible legal
challenges, and counsels’ views regarding constitutionality,
construction, and the like. However, once the members of the
public body commence any discussion regarding the merits
of enacting the legislation or what action to take based upon
the attorney’s advice, the discussion moves beyond the realm
of legal advice and must be open to the public.
City of Prescott, 166 Ariz. at 485.
¶28 Here, the issue is not proposed legislation, but rather a more
thorough explanation of a decision the Board had already made. The Board
issued its original order in 2012 after hearing arguments from both the
District and ABC. Supra ¶ 5. As ABC demanded, the Board did not reopen
the issue for arguments after receiving the superior court’s remand order,
but merely expanded upon the decision made in 2012 by issuing
explanatory findings of fact and conclusions of law. Because the phrasing,
drafting, and validity of the Board’s expanded order—including its
meanings, legal scope, and possible legal challenges—were highly relevant
to the Board’s task, it was permissible to perform that task in executive
session with legal advice from its attorney. Thereafter, the Board held a
public vote before finalizing its January 2015 order and asking for
comments from the public. We therefore conclude the Board did not violate
Arizona’s open meeting law.
CONCLUSION
¶29 For the foregoing reasons, we affirm the decision of the
superior court.
AMY M. WOOD • Clerk of the Court
FILED: AA
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