State Ex Rel Brnovich v. City of Phoenix

IN THE
SUPREME COURT OF THE STATE OF ARIZONA
____________________________________________
STATE OF ARIZONA, EX REL. MARK BRNOVICH, ATTORNEY GENERAL,
Petitioner,
v.
CITY OF PHOENIX,
Respondent.
______________________________________________
No. CV-20-0019-SA
Filed August 3, 2020
______________________________________________
SPECIAL ACTION
JURISDICTION ACCEPTED; RELIEF DENIED
DECLARING STATUTORY BOND PROVISION UNENFORCEABLE
COUNSEL:
Mark Brnovich, Arizona Attorney General, O. H. Skinner, Solicitor General,
Brunn W. Roysden III, Linley Wilson, Keena Patel, Assistant Attorneys
General, Phoenix, Attorneys for State of Arizona
Jean-Jacques Cabou, Alexis E. Danneman, Matthew R. Koerner, Margo R.
Casselman, Perkins Coie LLP, Phoenix, Attorneys for City of Phoenix
Mary R. O’Grady, Joseph N. Roth, Osborn Maledon, P.A., Phoenix,
Attorneys for Amicus Curiae League of Arizona Cities and Towns
Patrick Irvine, Fennemore Craig, P.C., Phoenix, Attorneys for Amicus
Curiae Arizona Association of Realtors
Grady Gammage Jr., Cameron C. Artigue, Gammage & Burnham, P.L.C.,
Phoenix; Daniel Reimer, Daniel S. Reimer LLC, Denver, CO, Attorneys for
Amici Curiae Airports Council International-North America, American
STATE EX REL. BRNOVICH V. CITY OF PHOENIX
Opinion of the Court
Association of Airport Executives, Airlines for America
Erin Adele Scharff, Phoenix, Attorney for Amici Curiae Law Professors
Timothy Sandefur, Matthew R. Miller, Scharf-Norton Center for
Constitutional Litigation at the Goldwater Institute, Phoenix, Attorneys for
Amicus Curiae Ride-Sharing Drivers and Passengers
W. Eric Pilsk, Kaplan Kirsch & Rockwell LLP, Washington, D.C.; Susan M.
Freeman, Lewis Roca Rothgerber Christie LLP, Phoenix, Attorneys for
Amicus Curiae Phoenix-Mesa Gateway Airport Authority, The Arizona
Airports Association
Ian Heath Gershengorn, Devi M. Rao, Noah B. Bokat-Lindell, Jenner &
Block LLP, Washington, D.C.; Mark Ogden, Littler Mendelson, Phoenix;
Joshua Wilkenfeld, Uber Technologies, Inc., Washington, D.C., Attorneys
for Amicus Curiae Rasier, LLC
Mark S. Kokanovich, Daniel A. Arellano, Ian O. Bucon, Ballard Spahr LLP,
Phoenix, Attorneys for Amici Curiae Cities of Mesa, Scottsdale, Tempe,
Flagstaff, and Sedona
Andrew J. McGuire, Trish Stuhan, Samantha Winter McAlpin, Gust
Rosenfeld P.L.C., Phoenix, Attorneys for Amicus Curiae Tucson Airport
Authority, Inc.
John “Jack” D. Wilenchik, Joshua C. Offentartz, Wilenchik & Bartness, P.C.,
Phoenix, Attorneys for Amicus Curiae Phoenix City Councilman Sal
Diccicio
____________________
VICE CHIEF JUSTICE TIMMER authored the Opinion of the Court, in
which CHIEF JUSTICE BRUTINEL, JUSTICES BOLICK, GOULD, LOPEZ,
BEENE, and MONTGOMERY joined.
____________________
2
STATE EX REL. BRNOVICH V. CITY OF PHOENIX
Opinion of the Court
VICE CHIEF JUSTICE TIMMER, Opinion of the Court:
¶1 Article 9, section 25 of the Arizona Constitution prohibits the
state and local governments from imposing or increasing taxes or other
“transaction-based” fees on services. We are asked here to decide whether
this prohibition extends to “trip fees” imposed by the City of Phoenix
(“City”) on commercial ground transportation providers who transport
passengers to and from Phoenix Sky Harbor International Airport
(“Airport”). We hold that because these fees are not “transaction-based,”
they are not constitutionally prohibited.
¶2 This is a special action filed pursuant to A.R.S.
§ 41-194.01(B)(2), which provides that this Court must require the local
government whose law is challenged to file a substantial bond. We declare
this bond provision unenforceable.
BACKGROUND
¶3 Cities in Arizona are empowered by the Arizona Constitution
to engage in business to the same extent as private parties. See Ariz. Const.
art. 13, § 5. Exercising that authority, and as permitted by state law, the City
owns and operates the Airport. See A.R.S. § 28-8411(A) (authorizing cities
to own and operate airports).
¶4 The City authorizes third-party commercial use of Airport
property by lease, permit, or license agreement. See Phx., Ariz., Code ch. 4,
art. 1, § 4-4; see also A.R.S. § 28-8419(B) (authorizing cities to “establish fees
and charges” for use of airport facilities). All monies paid to the City for
commercial activity must be used exclusively to maintain or operate the
Airport. See 49 U.S.C. § 47107(a)(13)(A), (k)(3), (requiring revenue
reinvestment to make an airport “as self-sustaining as possible” as a
condition for receiving federal funding); id. § 47133(a) (restricting
expenditure of “revenues generated by an airport that is the subject of
Federal assistance” to “capital or operating costs” related to the airport); see
also id. § 40116(d)(2)(A)(iv) (requiring all taxes, fees, and charges on
businesses operating as permittees at an airport be “wholly utilized for
airport or aeronautical purposes”). According to the City, more than one
thousand businesses pay fees to use the Airport.
¶5 Commercial ground transportation providers operating at the
Airport must obtain authorization permits from the City’s aviation director.
See Phx., Ariz., Code ch. 4, art. 4 § 4-68(A). “Transportation network
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STATE EX REL. BRNOVICH V. CITY OF PHOENIX
Opinion of the Court
companies” (“TNCs”) are a type of commercial ground transportation
provider. TNCs, such as Uber and Lyft, use “a digital network or software
application” that permits passengers to arrange rides with TNC drivers. See
id. § 4-67 (defining “transportation network company”). The City maintains
that TNCs started operating at the Airport in 2016, quickly expanded, and
now provide more than two-thirds of all ground transportation passenger
pick-ups at the Airport.
¶6 In 2016, the Phoenix City Council amended the Phoenix City
Code to require most commercial ground transportation providers,
including TNCs, to pay a “trip fee” each time a driver picked up one or
more passengers from the Airport. See id. § 4-78 (rev. 2016). The trip fee
varied from $2.25 to $9.00, depending on when the provider was authorized
to operate at the Airport and the vehicle’s passenger capacity, and it
automatically increased annually through January 1, 2019. See id. The
Council simultaneously directed the City’s aviation department to
complete a study of trip fees imposed at comparable airports by January 1,
2020. For ease of reference, we collectively refer to TNCs and non-TNCs
subject to trip fees, like taxis and limousines, as “providers.”
¶7 In 2018, Arizona voters passed Proposition 126, ”The Protect
Arizona Taxpayers Act” initiative, amending the Arizona Constitution to
prohibit the state, cities, and other political subdivisions from imposing
new taxes on services. Ariz. Const. art. 9, § 25 (“Section 25”). Proposition
126 also amended other constitutional provisions to remove any conflicts
with Section 25. See id. art. 13, § 2 (providing that a city charter cannot grant
authority that violates Section 25); id. art 9, § 6 (vesting cities with power to
impose special assessments or special taxes to make improvements
“[e]xcept as provided by section 25”). The proposition’s stated purpose was
to prevent governmental entities from following other states’ leads and
“taxing these vital everyday services,” ranging from medical treatments
and child care to haircuts “and much more,” thereby increasing expenses
for these services for both consumers and small businesses. See The Protect
Arizona Taxpayers Act, Proposition 126, § 2 (2018).
¶8 Section 25’s prohibition applies only to taxes, fees, and other
assessments imposed on or after January 1, 2018. See Ariz. Const. art. 9,
§ 25. Because the City’s imposition of a pick-up trip fee with annual
increases was in place before that date, Section 25 does not affect that fee, at
least as to the fee schedule established in 2016.
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STATE EX REL. BRNOVICH V. CITY OF PHOENIX
Opinion of the Court
¶9 In December 2019, the City Council adopted Ordinance G-
6650 (“Ordinance”), which is the subject of the dispute before us. The
Ordinance revised several Phoenix City Code provisions addressing
commercial ground transportation at the Airport. Pertinent here, the
Ordinance adjusted passenger pick-up fees and imposed new trip fees for
dropping off departing passengers at the Airport. See Phx., Ariz., Code
§ 4-78. Adoption of the Ordinance followed the aviation department’s
study, which concluded that comparable airports consistently collected
more revenue from ground transportation providers than the City. See
Phx., Ariz., City Council Report, Item No. 42, at 1 (Agenda Date:
12/18/2019). The new fees were reportedly intended to recoup the City’s
costs for the providers’ “proportionate share of existing and future ground-
transportation infrastructure, improvements, and operation/maintenance
of this infrastructure, including maintenance of the PHX Sky Train, and to
comply with federal law requiring [the Airport] to achieve and maintain
economic self-sufficiency.” Id.
¶10 The new fee structure imposed by the Ordinance, which was
scheduled to commence on February 1, 2020, treats TNCs differently from
non-TNCs. The pick-up and drop-off trip fees for TNCs now start at $4.00,
increase annually to $5.00 by 2024, and automatically increase each
subsequent year by at least 3%. Phx., Ariz., Code § 4-78(A)(1). The trip fees
for non-TNCs decrease initially, ranging from $1.75 to $5.00, depending on
passenger capacity, until 2021, when they automatically increase each
subsequent year by at least 3%. Id. § 4-78(A)(2). Trip fees for both TNCs
and non-TNCs are discounted when drivers use alternative-fuel-powered
or zero-emission vehicles or pick-up/drop-off passengers at PHX Sky Train
stations located away from terminals. Id. § 4-78(A)(6).
¶11 Trip fees apply one of two ways, depending on the trip-
tracking technology used by providers at the Airport. See id. § 4-72
(requiring such technology). Providers using GPS technology track trips
themselves and report the number of trips monthly. See id. 4-78(A)(5). Trip
fees apply each time a driver enters a “geofence,” makes one or more stops,
and picks up or drops off a passenger. Id. § 4-78(A)(3); see also id. § 4-67
(defining a “geofence” as marking “an electronic perimeter” or “sub-
perimeter” on Airport property). If the GPS system fails, the City assesses
fees based on historical usage. See § 4-78(A)(4). The City invoices providers
monthly for outstanding trip fees. See id. § 4-78(A)(7).
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 STATE EX REL. BRNOVICH V. CITY OF PHOENIX
Opinion of the Court
¶12 Providers using the Airport’s system of radio frequency
readers, which identify and track a vehicle’s physical location in the Airport
by “reading” an affixed tag, are tracked automatically. See id. §§ 4-67,
4-78(A)(3). Fees apply each time a driver enters or exits the Airport and
stops at one or more sites dedicated to picking up or dropping off
passengers. Id. § 4-78(A)(3), (5). If providers use designated pick-up or
drop-off locations without radio frequency readers, they must report trips
to the City. Id. § 4-78(A)(5). The City also invoices these providers monthly
for outstanding trip fees. See id. § 4-78(A)(7).
¶13 The Ordinance dedicates specified linear feet of Airport
terminal curb space to TNCs for picking up and dropping off passengers.
TNCs were given 30% of available curb space starting January 1, 2020,
which annually increases to 50% in 2022. Id. § 4-78(A)(10). Thereafter, curb
sharing adjusts proportionately with TNCs’ usage. Id. The City’s aviation
department also dedicates curb space for non-TNC pick-ups and drop-offs.
See City of Phoenix Aviation Dep’t, No. 8-01, Rules & Regulations, at 12–
12.2, Exhibits A, C–E (2016).
¶14 Before the Ordinance took effect, an Arizona legislator asked
the Attorney General to investigate whether it violates Section 25. The
request triggered § 41-194.01(A), which requires the Attorney General, “[a]t
the request of one or more members of the legislature,” to “investigate any
ordinance, regulation, order or other official action adopted or taken by the
governing body of a county, city or town that the member alleges violates
state law or the Constitution of Arizona.” Within thirty days, the Attorney
General must make a written report finding either that the challenged
action violates, may violate, or does not violate state law or the Arizona
Constitution. § 41-194.01(B). Consequences flow from each finding. Id.
¶15 The Attorney General found that the Ordinance may violate
Section 25. Thus, he filed a special action asking this Court to resolve the
issue. See § 41-194.01(B)(2) (providing that upon a finding that a challenged
action “may violate” state law or the constitution, “the attorney general
shall file a special action in [the] supreme court to resolve the issue”).
Pursuant to the parties’ stipulation, we stayed enforcement of the
Ordinance pending a decision.
¶16 We have jurisdiction pursuant to article 6, section 5(6) of the
Arizona Constitution and § 41-194.01(B)(2). After considering briefs filed
by the parties and amici, this Court previously issued an order holding the
Ordinance constitutional. We therefore denied relief and lifted the stay,
6
STATE EX REL. BRNOVICH V. CITY OF PHOENIX
Opinion of the Court
stating that an Opinion explaining our reasoning would follow. This is that
Opinion.
DISCUSSION
I. Does the Ordinance violate Section 25?
¶17 We review the constitutionality of the Ordinance de novo as
an issue of law. See Saban Rent-a-Car LLC v. Ariz. Dep’t of Revenue, 246 Ariz.
89, 92 ¶ 8 (2019). Because the challenge does not involve fundamental
constitutional rights or suspect-classification distinctions, we presume the
Ordinance complies with Section 25 “unless it clearly [does] not.” Id.
(quoting Cave Creek Unified Sch. Dist. v. Ducey, 233 Ariz. 1, 5 ¶ 11 (2013)).
¶18 Section 25 provides, in relevant part, as follows:
[1] The state, any county, city, town, municipal
corporation, or other political subdivision of the
state, or any district created by law with
authority to impose any tax, fee, stamp
requirement, or other assessment, shall not [2]
impose or increase [3] any sales tax, transaction
privilege tax, luxury tax, excise tax, use tax, or
any other transaction-based tax, fee, stamp
requirement or assessment [4] on the privilege
to engage in, or the gross receipts of sales or
gross income derived from, [5] any service
performed in this state.
No language makes these elements disjunctive. Therefore, Section 25 is
violated only if all five identified elements exist.
¶19 The parties agree that if the Ordinance violates Section 25 it
does so by imposing or increasing a “transaction-based . . . fee” on the
privilege of engaging in a service. Deciding whether the trip fees imposed
by the Ordinance are “transaction-based,” as that term is used in Section 25,
depends on the meaning of “transaction,” which our constitution does not
define. The Attorney General argues “transaction” means “any activity
involving two or more persons.” He asserts that entering and exiting the
Airport is “any activity” engaged in by two or more persons (drivers and
7
STATE EX REL. BRNOVICH V. CITY OF PHOENIX
Opinion of the Court
passengers), making the trip fees based on entry and exit “transaction-
based.”
¶20 The City counters that, read in context, “transaction” refers to
“a commercial agreement or an exchange of consideration.” By contrast,
because trip fees are not based on the fare paid by passengers to providers,
and they apply whether or not a fare is paid, the City argues those fees are
not “transaction-based.” The City instead characterizes the trip fees as
“user fees” for Airport property, which are not encompassed by Section 25.
¶21 In interpreting Section 25, our primary goal is to effectuate the
electorate’s intent in adopting it. See Saban Rent-a-Car LLC, 246 Ariz. at 95
¶ 21. To determine that intent, we give the words their ordinary meaning,
unless the context suggests a different one. See Am. Fed’n of State Cty. &
Mun. Emps. AFL-CIO Local 2384 v. City of Phoenix. (AFL-CIO Local 2384), ___
Ariz. ___, ___ ¶ 13 (2020). We will not apply “fine semantic or grammatical
distinctions” or “parse sentences,” however, as doing so “may lead us to
results quite different from the objectives which the framers intended to
accomplish.” See Saban Rent-a-Car LLC, 246 Ariz. at 95 ¶ 21 (quoting United
States v. Superior Court, 144 Ariz. 265, 275–76 (1985)). If the provision has
only one reasonable interpretation, we apply it. See AFL-CIO Local 2384, ___
Ariz. at ___ ¶ 13. But if more than one reasonable interpretation exists, we
will examine secondary principles to identify the correct interpretation. See
id.
¶22 As the parties note, “transaction,” in isolation, has alternate
meanings. It may refer to “an exchange or transfer or goods, services, or
funds,” or “a communicative action or activity involving two parties or
things that reciprocally affect or influence each other.” Transaction,
Merriam-Webster, https://www.merriam-webster.com/dictionary/transaction
(last visited July 28, 2020); see also Transaction, Black’s Law Dictionary (10th
ed. 2014) (defining the term variously as “[t]he act or an instance of
conducting business or other dealings,” “the formation, performance, or
discharge of a contract,” or “[a]ny activity involving two or more persons”).
¶23 The context in which “transaction-based” is used in Section
25 reveals the meaning intended by voters. “Transaction-based” appears
in Section 25’s “catch-all” provision after a list of enumerated taxes. See
Ariz. Const. art. 9, § 25 (prohibiting imposing or increasing specific
categories of taxes and extending that prohibition to “any other transaction-
8
STATE EX REL. BRNOVICH V. CITY OF PHOENIX
Opinion of the Court
based tax, fee, stamp requirement or assessment” (emphasis added)).
Under the ejusdem generis canon, the term “transaction-based” should be
interpreted as referring to the same type of taxes as those specifically
enumerated. See City of Phoenix v. Glenayre Elecs., Inc., 242 Ariz. 139, 146–47
¶ 30 (2017) (“[E]jusdem generis applies ‘where general words follow the
enumeration of particular classes of things.’” (quoting Bilke v. State, 206 Ariz.
462, 465 ¶ 13 (2003))); see also Williams v. Pipe Trades Indus. Program of Ariz.,
100 Ariz. 14, 20 (1966) (applying ejusdem generis canon to a constitutional
provision and concluding that “[t]he phrase ‘other public purposes’ must,
accordingly, have been intended to restrict the purpose in some manner
similar to those enumerated”). Application of the closely related canon
noscitur a sociis, which “holds that words grouped in a list should be given
related meanings,” leads to the same result. See Normandin v. Encanto
Adventures, LLC, 246 Ariz. 458, 460–61 ¶¶ 11–12 (2019) (quoting Antonin
Scalia & Bryan A. Garner, Reading Law: The Interpretation of Legal Texts 195–
96 (2012)) (applying noscitur a sociis canon in interpreting “manager” as
including characteristics shared with other entities listed in statute).
¶24 Section 25 prohibits governmental entities from imposing or
increasing “any sales tax, transaction privilege tax, luxury tax, excise tax,
[or] use tax” on the privilege to engage in services or on the sales or income
generated by those services. These taxes are all calculated based on
consumer spending in commercial dealings with persons engaged in a
business or occupation. See A.R.S. § 42-3052 (imposing luxury taxes at rates
tied to quantities of luxury items sold to consumers); id. § 42-5008(A)
(measuring transaction privilege taxes, which include sales and excise
taxes, “by the amount or volume of business transacted” and in amounts
determined by applying “rates against values, gross proceeds of sales or
gross income”); id. § 42-5155(A) (levying a use tax on tangible personal
property purchased from out-of-state vendor “as a percentage of the sales
price”). The exchange of consideration between a consumer and a business,
e.g., money for shoes, is the “transaction” on which these taxes are “based.”
See Base, Merriam-Webster, https://www.merriam-webster.com/dictionary/base
(last visited Jul. 12, 2020) (defining the verb “base” as “to find a foundation
or basis for” or “to make, form, or serve as a base for”). Consequently,
applying the ejusdem generis and noscitur a sociis canons, “any other
transaction-based” fee, as provided in Section 25, can only reasonably mean
a fee based on consumer spending for delivered goods or services.
¶25 Applying this definition, we agree with the City that the trip
fees here are not “transaction-based.” The “transaction” subject to Section
9
STATE EX REL. BRNOVICH V. CITY OF PHOENIX
Opinion of the Court
25 is a passenger’s payment of money to a provider in exchange for a ride
to or from the Airport. Section 25 prohibits the City from taxing or
imposing fees and the like on such transactions. But the Ordinance’s trip
fees are not based on the transaction between providers and passengers.
Neither imposition of the fee nor its amount depends on whether a
passenger takes the ride, cancels it, or even pays for it. Instead, the trip fees
are based on the providers’ use of Airport property in picking up and
dropping off passengers at designated sites as recorded by technology-
based trip-tracking or provider reports. Cf. Jacksonville Port Auth. v. Alamo
Rent-A-Car, Inc., 600 So. 2d 1159, 1162, 1165 (Fla. App. 1992) (concluding that
a 6% gross receipts fee was “tied exclusively” to off-site car rental agency’s
use of airport facilities to conduct its business and was therefore an
“authorized user fee” rather than a tax).
¶26 The Ordinance’s trip fees are best characterized as
“authorized-user fees” paid in exchange for the providers’ privilege to use
Airport property, including dedicated curb space, for conducting business
with Airport travelers. See id.; Ace Rent-A-Car, Inc. v. Indianapolis Airport
Auth., 612 N.E.2d 1104, 1108 (Ind. App. 1993) (characterizing fee imposed
on off-site car rental agency as “authorized user fee” based on use of airport
roadways to pick up customers in courtesy shuttles, even though fee
amount is based on revenues generated by those customers’ rentals). The
fees are not imposed on trips in the City that do not originate or terminate
at the Airport, as would be expected for broadly imposed transaction-based
taxes like those specifically enumerated in Section 25. Instead, the fees are
imposed only when providers access the Airport and stop at Airport
property dedicated to their exclusive use to pick up or drop off passengers.
Also, the fee amount differs depending on how usage affects Airport
property, further demonstrating that trip fees are tied to property use rather
than provider-passenger transactions. Specifically, trips starting or ending
at the less-congested PHX Sky Train stations and those using energy
efficient vehicles pay discounted fees, while large capacity vehicles
operated by non-TNCs pay greater fees. See Phx., Ariz., Code § 4-78(A)(2),
(6).
¶27 We recognize that a fine line may exist between imposing a
fee on a commercial transaction and imposing an authorized-user fee tied
to the number of commercial transactions occurring. But that line exists
here, and the City falls on the constitutional side. Fees paid for the privilege
of using Airport property for commercial purposes must fairly reflect the
value for that use. See Policy and Procedures Concerning the Use of Airport
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STATE EX REL. BRNOVICH V. CITY OF PHOENIX
Opinion of the Court
Revenue, 64 Fed. Reg. 7696, 7721 (Feb. 16, 1999) (“[T]he FAA interprets the
self-sustaining assurance to require that the airport receive fair market
value for the provision of nonaeronautical facilities and services, to the
extent practicable considering the circumstances at the airport.”); see also
Alamo Rent-A-Car, Inc. v. Sarasota-Manatee Airport Auth., 906 F.2d 516, 518
(11th Cir. 1990) (stating that for Commerce Clause purposes, user fee
imposed on off-site rental car agency renting vehicles to airport travelers
must reflect a fair approximation of the agency use of airport facilities and
must not be excessive in relation to the airport’s costs for that use). The
number of trips made by a provider picking up and dropping off
passengers evidences usage. Imposing fees tied to that number rather than
imposing a monthly or yearly flat fee therefore fairly measures usage value.
¶28 Tying trip fees to the number of trips made by providers to
and from the Airport reflects the fair value for accessing and using Airport
property, depending on the amount of the fee, just as a toll collected at an
Airport booth for each trip would. Courts have long recognized tolls as
mechanisms for charging commercial entities for use of government
property. See, e.g., Sands v. Manistee River Imp. Co., 123 U.S. 288, 293–94
(1887) (describing per-log toll for floating logs down improved waterway
as “compensation for benefits conferred” and rejecting analogy to taxes,
which are “levied for the support of government”); Huse v. Glover, 119 U.S.
543, 548 (1886) (“The exaction of tolls for passage through the locks is as
compensation for the use of artificial facilities constructed, not as an impost
upon the navigation of the stream.”); Am. Trucking Ass’ns, Inc. v. Alviti, 944
F.3d 45, 47–52 (1st Cir. 2019) (holding that per-trip fees collected for
commercial trucking companies’ use of state-owned bridges were properly
described as tolls, not taxes).
¶29 Other user fees at the Airport are similarly measured. For
example, the City imposes landing fees on commercial aircraft on a per-
landing rate. See Phx., Ariz., Code ch. 4, art. 9, §§ 4-177, 4-179–180. Similar
to the providers here, commercial aircraft operators must report their
number of landings and related information monthly, which the City’s
aviation director uses to invoice those operators for landing fees. See id.
Landing fees, like the trip fees here, are triggered by the use of Airport
property and not the transactions between carriers and their passengers
that gave rise to the trip. Cf. Evansville-Vanderburgh Airport Auth. Dist. v.
Delta Airlines, Inc., 405 U.S. 707, 714 (1972) (stating that regardless whether
per-passenger fee imposed by airport on commercial airlines is passed on
to passengers, “it is the act of enplanement and the consequent use of
11
STATE EX REL. BRNOVICH V. CITY OF PHOENIX
Opinion of the Court
runways and other airport facilities that give rise to the obligation”),
superseded by statute on other grounds as recognized in Nw. Airlines, Inc. v. Cty.
of Kent, Mich., 510 U.S. 355, 363 (1994).
¶30 The Attorney General argues that the trip fees “are not
triggered by one’s use of Airport curb space, given that thousands of
persons daily use curb space in the exact same manner to drop off or pick
up friends or family without having to pay any ‘use’ fee whatsoever.” But
neither he nor amici making the same argument offer authority for their
implicit premise that a user fee only exists if it is imposed on all users.
Reasons exist for not imposing trip fees on non-providers. Friends and
family do not individually use Airport property as frequently as providers,
they do not commercially benefit from that use, and although they use curb
space, it is not dedicated for their exclusive use. The City could impose
access fees on non-providers if it so chooses. But whether or not fees are
imposed on non-providers, it does not change the fact that the trip fees here
are imposed on providers for use of Airport property. Cf. Evansville-
Vanderburgh Airport Auth. Dist., 405 U.S. at 717–18 (concluding that
exempting per-person enplanement fee for certain class of passengers, e.g.
active military members, was not unreasonable and recognizing that
“[c]ertainly passengers as a class may be distinguished from other airport
users”).
¶31 In sum, we hold that “transaction” in Section 25, when read
in context, plainly means consumer spending for goods or services. Paying
fees to use Airport property for commercial purposes is not “transaction-
based,” as that term is used in Section 25. For this reason, the City did not
violate Section 25 by imposing and increasing trip fees as established in the
Ordinance. Because we resolve the constitutional challenge on this basis
alone, we need not address the parties’ other arguments. We also do not
address the reasonableness of the trip fee amounts, as that issue is not
before us.
II. Is the bond provision in § 41-194.01(B)(2) enforceable?
¶32 If the Attorney General petitions this Court to determine
whether a local law violates state law or the constitution, “[t]he court shall
require the [local government] to post a bond equal to the amount of state
shared revenue paid to the [local government] pursuant to § 42-5029 and
43-206 in the preceding six months.” § 41-194.01(B)(2). This provision is
mandatory. State ex rel. Brnovich v. City of Tucson, 242 Ariz. 588, 596 ¶ 32
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STATE EX REL. BRNOVICH V. CITY OF PHOENIX
Opinion of the Court
(2017). Regardless, we have not yet ordered such a bond, and the City did
not post one here.
¶33 In City of Tucson, the only other case involving § 41-194.01, we
expressed “concerns regarding the bond’s purpose, basis, practical
application, and constitutionality” but ultimately did not pass on its
enforceability given that case’s procedural posture. Id. at 596–97 ¶¶ 32–35;
see also id. at 608 ¶ 85 (Gould, J., concurring) (concluding the bond
requirement is “unenforceable because it is incomplete and unintelligible”).
The parties here agree that no bond is required because the Ordinance was
stayed, although the bond requirement does not specify such an exception.
Regardless, for future guidance, we asked them to brief whether the bond
requirement is enforceable.
¶34 The City argues the bond requirement is either an
unconstitutional “obstacle to judicial review” or is unenforceable as
“incomplete and unintelligible.” The Attorney General presumes that the
legislature required a bond to “ensure that a municipality or county does
not benefit from receiving state-shared revenue while possibly violating
state law.” He asserts that because staying implementation of the
challenged law fulfills that purpose, we should interpret the bond
requirement as applying only in the absence of a stay. He also contends
this Court may reduce the bond amount in appropriate circumstances.
These interpretations, however, are untethered to any language in
§ 41-194.01 or legislative history and would require us to rewrite the statute.
¶35 When a statute is so incomplete or unintelligible that we
cannot divine its purpose and intent, or how to implement it, it is invalid
and unenforceable. See Sw. Eng’g Co. v. Ernst, 79 Ariz. 403, 414 (1955)
(stating that a statute imposing a duty on a public official “must be
prescribed in terms sufficient and definite to serve as a guide” for
“intelligent execution”); Cohen v. State, 121 Ariz. 6, 9 (1978) (“[S]tatutory
language must be sufficiently definite so that those who are to execute the
law may do so in a rational and reasoned manner.”). Otherwise, it could
violate due process by failing either to provide sufficient notice of what the
law requires or to restrict the discretion of administrative agencies or public
officers charged with applying the statute. See Ernst, 79 Ariz. at 412–13;
CAVCO Indus. v. Indus. Comm’n of Ariz., 129 Ariz. 429, 434 (1981). Or it
might require the Court or agencies to effectively “legislate” by supplying
material and necessary missing terms not suggested, either expressly or
impliedly, by the statutory language, which would violate separation-of-
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STATE EX REL. BRNOVICH V. CITY OF PHOENIX
Opinion of the Court
powers principles. See Ernst, 79 Ariz. at 413–14. Before declaring a statute
invalid as incomplete or unintelligible, however, we must “us[e] every
authorized means to ascertain and give the [statute] an intelligible
meaning.” Coggins v. Ely, 23 Ariz. 155, 161 (1921); see also City of Tucson, 242
Ariz. at 610–11 ¶¶ 97–102 (Gould, J., concurring) (discussing the
“unintelligibility doctrine”).
¶36 The bond requirement in § 41-194.01(B)(2) is so incomplete
that we cannot enforce it. Neither the statutory language nor legislative
history reveals the bond’s purpose or the conditions on which it is based.
Does the local government have to post the bond to defend its challenged
law in this Court? What happens if no bond is posted? We aren’t told. If
the local government posts a bond, what does it have to do or refrain from
doing to avoid forfeiture? The statute doesn’t say. What conditions must
exist to exonerate the bond? Does that occur when we issue our decision
or, assuming we find a violation, when the local government resolves the
violation? We are left guessing. The list of unanswered questions goes on
and on.
¶37 The bond provision in § 41-194.01(B)(2) is incomplete and
unintelligible and therefore unenforceable. To be clear, we are not
declaring the provision unconstitutional. Instead, we simply refrain from
attempting to enforce the bond requirement or pass on its constitutionality
unless and until the legislature completes it. See CAVCO Indus., 129 Ariz.
at 434 n.3 (acknowledging “the simple common law rule that courts will not
apply unintelligible laws”). The defects in the bond provision do not
impact the remaining provisions in § 41-194.01. Cf. State Comp. Fund v.
Symington, 174 Ariz. 188, 195 (1993) (explaining severability doctrine). In
light of our holding, we do not address the City’s additional argument that
the bond provision is an unconstitutional “obstacle to judicial review.”
CONCLUSION
¶38 We accept jurisdiction as required by § 41-194.01(B)(2) and
hold that the Ordinance does not violate Section 25. We therefore deny the
Attorney General’s request to declare the Ordinance null and void. We
additionally hold that the bond provision in § 41-194.01(B)(2) is
unenforceable. Finally, pursuant to A.R.S. § 12-348.01, a mandatory fee
provision, we award the City its reasonable attorney fees as the successful
party.
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