Meyer v. State

IN THE
ARIZONA COURT OF APPEALS
DIVISION ONE
ERIC MEYER, LELA ALSTON, RICHARD C. ANDRADE, REGINALD
BOLDING JR., MARK A. CARDENAS, KEN CLARK, DIEGO ESPINOZA,
CHARLENE R. FERNANDEZ, RANDALL FRIES, ROSANNA
GABALDON, SALLY ANN GONZALES, ALBERT HALE, MATTHEW A.
KOPEC, JOHNATHAN R. LARKIN, STEFANIE MACH, JUAN JOSE
MENDEZ, LISA A. OTONDO, CELESTE PLUMLEE, REBECCA RIOS,
MACARIO SALDATE, CECI VELASQEZ, AND BRUCE WHEELER,
members of the Arizona State House of Representatives; KATIE HOBBS,
DAVID BRADLEY, OLIVIA CAJERO BEDFORD, LUPE CONTRERAS,
ANDREA DALESSANDRO, STEVE FARLEY, BARBARA MCGUIRE,
ROBERT MEZA, CATHERINE MIRANDA, and MARTIN QUEZADA,
members of the Arizona State Senate, Plaintiffs/Appellees,
v.
STATE OF ARIZONA, a body politic, Defendant/Appellant.
No. 1 CA-CV 18-0031
FILED 2-5-2019
Appeal from the Superior Court in Maricopa County
No. CV 2016-092409
The Honorable Joshua D. Rogers, Judge
AFFIRMED IN PART; VACATED AND REMANDED IN PART
COUNSEL
Arizona Attorney General’s Office, Phoenix
By Rusty D. Crandell
Counsel for Defendant/Appellant
Torres Law Group, Tempe
By Israel G. Torres; James E. Barton, II; Sama John Golestan
Counsel for Plaintiffs/Appellees
OPINION
Presiding Judge Jennifer B. Campbell delivered the opinion of the Court, in
which Judge Paul J. McMurdie and Judge Kent E. Cattani joined.
C A M P B E L L, Judge:
¶1 The State appeals the superior court’s grant of summary
judgment in favor of Appellees, members of the Arizona House of
Representatives and Senate who voted against passage of House Bill
(“H.B.”) 2579 (collectively, the “Legislators”), finding Arizona Revised
Statutes (“A.R.S.”) section 23-204, as amended by H.B. 2579,
unconstitutional because it violates the Voter Protection Act (“VPA”). For
the following reasons, we affirm.
BACKGROUND
¶2 In 2006, Arizona voters passed Proposition 202, an initiative
measure commonly referred to as the “Raise the Minimum Wage for
Working Arizonans Act” (“Minimum Wage Act” or “Act”). The Minimum
Wage Act is codified at A.R.S. §§ 23-362, -363, and -364. The central
provision at issue in this appeal falls under the enforcement provision,
A.R.S. § 23-364, which empowers a county, city, or town to “regulate
minimum wages and benefits within its geographic boundaries” as long as
it does “not provide for a minimum wage lower than that prescribed in this
article.” A.R.S. § 23-364(I) (emphasis added). It goes on to state, “[t]his
article . . . shall not limit the authority of the legislature or any other body
to adopt any law or policy that requires payment of higher or supplemental
wages or benefits, or that extends such protections to employers or
employees not covered by this article.” Id. (emphasis added).
¶3 In May 2016, the legislature adopted H.B. 2579, which
amended A.R.S. § 23-204 and preempted the field of nonwage benefits,
removing from cities and towns the power to regulate nonwage benefits.
H.B. 2579 passed with majority votes in both the House and Senate, but
neither chamber received a three-fourths’ majority vote. The relevant
language of the bill provides:
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Opinion of the Court
The regulation of employee benefits, including nonwage
compensation, paid and unpaid leave and other absences,
meal breaks and rest periods, is of statewide concern. The
regulation of nonwage employee benefits pursuant to this
chapter and federal law is not subject to further regulation by
a city, town or other political subdivision of this state.
A.R.S. § 23-204(A).
¶4 In June 2016, the plaintiffs sued the State in the superior court
seeking declaratory relief, asking H.B. 2579 be found unconstitutional
because it violated the VPA and the home-rule provision of the Arizona
Constitution. The plaintiffs were comprised of three groups: (1) a labor
union, United Food and Commercial Workers, Local 99 (“UFCW”); (2) five
individual city councilmembers from three Arizona cities
(“Councilmembers”); and (3) the Legislators who voted against H.B. 2579.
The State moved to dismiss the home-rule claims by all three groups of
plaintiffs and moved to dismiss the VPA claims by UFCW and the
Councilmembers only. The superior court granted the State’s motion to
dismiss in full, leaving only the Legislators’ VPA claim.
¶5 The State and Legislators filed cross-motions for summary
judgment on the VPA claim. After briefing and oral argument, the court
granted the Legislators’ motion for summary judgment, ruling that H.B.
2579 impliedly repealed a portion of the Minimum Wage Act and therefore
violated the VPA. The court also awarded the Legislators all attorney fees
requested, including fees for opposing the motion to dismiss. This timely
appeal from the State followed.
DISCUSSION
¶6 We review grants of summary judgment and questions of
statutory interpretation de novo. BMO Harris Bank, N.A. v. Wildwood Creek
Ranch, LLC, 236 Ariz. 363, 365, ¶ 7 (2015). “Our primary objective in
construing statutes adopted by initiative is to give effect to the intent of the
electorate.” State v. Gomez, 212 Ariz. 55, 57, ¶ 11 (2006). If the statute’s
language is unambiguous and is subject to only one reasonable meaning,
we apply that meaning without resorting to other statutory interpretation
methods. Id.; see also J.D. v. Hegyi, 236 Ariz. 39, 40-41, ¶ 6 (2014). Only if the
language is ambiguous do we discern the electorate’s intent by resorting to
secondary interpretation methods, such as consideration of the statute’s
subject matter, historical background, effects and consequences, and spirit
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and purpose. BSI Holdings, LLC v. Ariz. Dep’t of Transp., 244 Ariz. 17, 19, ¶ 9
(2018) (citation omitted).
I. Applicability of the VPA
¶7 The electorate shares lawmaking power with the legislature
under Arizona’s system of government. See Cave Creek Unified Sch. Dist. v.
Ducey, 233 Ariz. 1, 4, ¶ 8 (2013) (citation omitted). “[T]he people reserve[d]
the power to propose laws and amendments to the constitution and to enact
or reject such laws and amendments at the polls, independently of the
legislature” through the initiative and referendum processes. Ariz. Const.
art. 4, pt. 1, § 1(1).
¶8 In 1998, Arizona voters adopted the VPA as a constitutional
amendment, limiting the legislature’s power to amend, repeal, or supersede
voter-approved laws. See Ariz. Const. art. 4, pt. 1, § 1(6)(B)-(C), (14). When
the legislature addresses the subject of a voter-approved initiative, the
constitutional limitations of the VPA apply and limit the legislature’s
otherwise plenary authority. See id. The VPA prohibits legislative repeal of
initiative measures approved by the voters and permits a legislative
amendment to an initiative only when the amendment “furthers the
purposes” of the initiative and is passed by “at least three-fourths of the
members of each house of the legislature.” Id.
¶9 The VPA’s constitutional limitations apply to the Minimum
Wage Act because it was passed by voter initiative. Consequently, the
legislature cannot repeal or supersede the Minimum Wage Act, and any
amendment would have to further its purpose and be passed by three-
fourths’ vote in both chambers of the legislature. The parties do not dispute
that H.B. 2579 was passed without the requisite three-fourths’ vote. The
dispositive question, therefore, is whether the legislature impermissibly
amended or superseded a portion of the Minimum Wage Act in violation
of the VPA when enacting H.B. 2579.
II. Constitutionality of H.B. 2579
¶10 H.B. 2579 did not explicitly repeal or supersede the Minimum
Wage Act, cf. State Land Dep’t v. Tucson Rock & Sand Co., 107 Ariz. 74, 77
(1971) (a statute expressly repeals another when it “nam[es] . . . those
[provisions] to be superseded”), but the parties disagree about whether
H.B. 2579 impliedly amends or repeals provisions contained within the Act.
To begin, we analyze the two statutes in light of the VPA. See Cave Creek
Unified Sch. Dist., 233 Ariz. at 7, ¶ 23 (“Although [the house bill] did not
expressly state that it repealed, amended, or otherwise changed [the
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initiative], we must consider its effect on the fundamental purposes
underlying the VPA.” (citation omitted)). “The intent of the VPA, construed
from its text and structure, was to limit changes to voter-approved laws.”
Id.
¶11 A statute can be impliedly amended or repealed through
“repugnancy” or “inconsistency” with a more recent and apparently
conflicting statute. UNUM Life Ins. Co. of Am. v. Craig, 200 Ariz. 327, 333,
¶ 29 (2001) (implied repeal); Ariz. State Tax Comm’n v. Reiser, 109 Ariz. 473,
479 (1973) (implied amendment). “An implied amendment is an act which
purports to be independent, but which in substance alters, modifies, or
adds to a prior act.” Cave Creek Unified Sch. Dist., 233 Ariz. at 7, ¶ 24 (quoting
1A Sutherland Statutory Construction § 22:13 (7th ed. 2012)).
¶12 The Minimum Wage Act empowered counties, cities, and
towns to “regulate minimum wages and benefits,” and authorized “the
legislature or any other body to adopt any law or policy that requires
payment of higher or supplemental wages or benefits, or that extends such
protections to employers or employees not covered by this article.” A.R.S.
§ 23-364(I) (emphasis added). H.B. 2579 explicitly removed from cities,
towns, and other political subdivisions the authority to regulate “employee
benefits, including nonwage compensation.” A.R.S. § 23-204(A). H.B. 2579
defines nonwage compensation to include:
[F]ringe benefits, welfare benefits, child or adult care plans,
sick pay, vacation pay, severance pay, commissions, bonuses,
retirement plan or pension contributions, other employment
benefits provided in 29 United States Code § 2611 and other
amounts promised to the employee that are more than the
minimum compensation due an employee by reason of
employment.
A.R.S. § 23-204(C). Therefore, if A.R.S. § 23-204, as amended by H.B. 2579,
amends or repeals the Minimum Wage Act, it will have done so in violation
of the VPA.
¶13 The State argues the Minimum Wage Act does not apply to
nonwage employee benefits and accordingly does not grant counties, cities,
and towns the power to regulate them. The Legislators, on the other hand,
argue that by its terms, the Minimum Wage Act demonstrably grants
counties, cities, and towns the power to regulate nonwage benefits.
Therefore, to discern the constitutionality of H.B. 2579, we must determine
whether H.B. 2579 and the Minimum Wage Act can be harmonized. This
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analysis hinges on the meaning of the word “benefits” as used in the
Minimum Wage Act.
¶14 The State contends that H.B. 2579 and the Minimum Wage
Act can be read harmoniously because the term “benefits” has a different
meaning in both statutes. H.B. 2579 defines “benefits” to include nonwage
employee compensation. See A.R.S. § 23-204(A). Benefits is not defined in
the Minimum Wage Act. See A.R.S. §§ 23-362, -363, -364; see also State v.
Dann, 220 Ariz. 351, 368 (2009) (“When a word in a statute is undefined,
courts apply the ordinary meaning of the term.”). The State argues
“benefits” means “the advantage or privilege something gives” and in the
context of the Minimum Wage Act, “benefits” means only the benefits
provided under the Minimum Wage Act—namely, the enforcement rights
provided in A.R.S. § 23-364. The Legislators conversely argue “benefits”
includes any “non-wage compensation.” The superior court found that “the
meaning proposed by the State may be a permissible meaning of ‘benefits’
according to a dictionary definition of the word, [but] it is not a reasonable
meaning in light of the context of the word.” We agree.
¶15 In statutory interpretation, associated words bear on one
another’s meaning. “[A] statutory term is interpreted in context of the
accompanying words.” Estate of Braden ex rel. Gabaldon v. State, 228 Ariz.
323, 326, ¶ 13 (2011). In the context of the Minimum Wage Act, “benefits” is
used twice—both times in conjunction with the word “wages,” forming the
phrases “minimum wages and benefits” and “minimum wages or
benefits,” respectively. Therefore, the word “benefits” has an associated,
but separate meaning from the word “wages.”
¶16 When used together, the only reasonable interpretation is that
“wages” and “benefits” are complementary parts of employee
compensation as a whole. See Black’s Law Dictionary 343 (10th ed. 2014)
(“Compensation consists of wages and benefits in return for services” and
“includes wages, stock option plans, profit-sharing, commissions, bonuses,
golden parachutes, vacation, sick pay, medical benefits, disability, leaves of
absence, and expense reimbursement.” (citation omitted)); see generally State
v. Pena, 235 Ariz. 277, 279, ¶ 6 (2014) (“Absent statutory definitions, courts
. . . may look to dictionaries.”). “[T]he words of a statute are to be given
their ordinary meaning unless it appears from the context or otherwise that
a different meaning is intended.” Ariz. ex rel. Brnovich v. Maricopa Cty. Cmty.
Coll. Dist. Bd., 243 Ariz. 539, 541, ¶ 7 (2018) (citation omitted). At oral
argument in the superior court, the State conceded that “non-wage benefits
received by an employee from an employer is the consistent historical
meaning of the word ‘benefits’ when used in the syntactic setting of either
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‘minimum wages and benefits’ or ‘wages and benefits.’” It is clear from the
text that by granting a county, city, or town the ability to “regulate
minimum wages and benefits,” the intent of the electorate was to grant
these bodies the ability to regulate wages and nonwage benefits. The State’s
interpretation ignores the plain text of the statute and the association
between the words “benefits” and “wages.”
¶17 The State emphasizes that the other provisions of the
Minimum Wage Act make no mention of benefits, including the substantive
provision that sets the minimum wage. See A.R.S. § 23-363. Because the only
provision that mentions benefits is the enforcement provision, § 23-364, the
State argues “benefits” can only mean those benefits—i.e., enforcement
rights—that are provided under that provision. However, even considering
the word “benefit” in the context of the Act—while not explicitly requiring
the regulation of benefits in the substantive provision—it is reasonable that
the electorate granted counties, cities, and towns the ability to further
regulate minimum wages and benefits in the enforcement provision, as
long as they do “not provide for a minimum wage lower than that
prescribed in [the] article.” A.R.S. § 23-363 sets a mandatory minimum
wage, whereas the enforcement provision gives these bodies the option to
further increase wages and benefits, rather than requiring them to do so.
¶18 The State further argues that the Minimum Wage Act uses
“benefits” and “protections” interchangeably when it authorizes “the
legislature or any other body to adopt any law or policy that requires
payment of higher or supplemental wages or benefits, or that extends such
protections to employers or employees not covered by this article.” A.R.S.
§ 23-364(I) (emphasis added). First, the plain grammatical reading of this
sentence is that “higher or supplemental wages” and “higher or
supplemental . . . benefits” both are protections that the legislature or other
body can extend to employers or employees not covered by the Minimum
Wage Act.
¶19 Second, the State’s argument that this provision uses
“benefits” and “protections” interchangeably—and “benefits”
encompasses only the minimum wage protections provided in this
section—is not well taken. The State proposes only one definition of
“benefits” and does not argue that “benefits” has a different meaning each
time it is used in the statute. See Obregon v. Indus. Comm’n, 217 Ariz. 612,
616, ¶ 21 (App. 2008) (“It is a normal rule of statutory construction that
identical words used in different parts of the same Act are intended to have
the same meaning.” (internal quotation and citation omitted)). Equating
benefit to mean protections under the statute would lead to an impossible
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grammatical difficulty. It is not logical for the statute to read: “A county,
city, or town may by ordinance regulate minimum wages and protections
within its geographic boundaries.” It makes even less sense to say that the
statute “shall not limit the authority of the legislature or any other body to
adopt any law or policy that requires payment of higher or supplemental
wages or protections,” because protections are not paid in the sense that
wages and benefits can be paid.
¶20 Third, the State argues that interpreting benefits to mean
nonwage benefits renders the “higher or supplemental” language of the
Minimum Wage Act superfluous because “it does not make sense to say
that municipalities are free to ‘require[]’ payment of ‘higher or
supplemental’ fringe benefits when the [Minimum Wage Act] does not
require payment of any fringe benefits at all.” A grammatical reading of the
sentence reveals that the phrase “payment of higher or supplemental”
applies to both “wages” and “benefits.” There is nothing inherently
prohibitive of a city passing a new law requiring payment of higher or
supplemental nonwage benefits—where payment of benefits previously
was not required—because payment of some benefits is higher than
payment of no benefits. Further, the payment of nonwage benefits could be
supplemental in reference to the payment of required wages.
¶21 In contrast, the Legislators’ proposed definition of
“benefits”—nonwage benefits received by an employee from an
employer—reflects the ordinary and common meaning of the term when it
is used in conjunction with wages and when looking at its plain meaning
as it is used in the Act. Thus, because the meaning of the word “benefits”
can be discerned from the plain text of the statute, the word “benefits” is
not ambiguous.
¶22 The State next asks us to look beyond the statutory text itself,
urging us to look at the title of the voter initiative and the title of the
substantive provision in the Act, A.R.S. § 23-363, to conclude that the Act’s
purpose is to regulate wages, not nonwage benefits. The title and headings
of statutes are permissible indicators of meaning but cannot override the
text. See State v. Eagle, 196 Ariz. 188, 190, ¶ 7 (2000) (noting that where an
ambiguity exists, the title of a statute may be used to aid in its
interpretation, although headings are not part of the law itself). Because we
determine the text is not ambiguous, we need not turn to the titles of the
initiative or provisions to aid in interpreting the Minimum Wage Act.
¶23 The State argues the superior court erred by not considering
other secondary methods of statutory construction beyond the ordinary
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meaning of “benefits.” When interpreting a statute, courts first look to the
statute’s plain language as “the most reliable indicator of its meaning.”
Harris Corp. v. Ariz. Dep’t of Revenue, 233 Ariz. 377, 381, ¶ 13 (App. 2013)
(citation omitted). When read in that fashion and the meaning of the statute
is clear, our analysis ends. See State ex rel. Romley v. Hauser, 209 Ariz. 539,
541, ¶ 10 (2005) (“When the plain text of a statute is clear and unambiguous
there is no need to resort to other methods of statutory interpretation to
determine the legislature’s intent because its intent is readily discernable
from the face of the statute.” (citation omitted)). The State urges the court
to look at the legislative history of the Minimum Wage Act, to interpret the
Act to avoid ERISA preemption issues and constitutional law difficulties,
and to interpret the Act in a way that will not impermissibly change the
law. Again, we need not address these secondary methods of statutory
interpretation; because the text of the statute is unambiguous, our statutory
interpretation stops at the plain meaning of the words. We look no further
than the language of the statutes to conclude H.B. 2579 impliedly amends
and repeals a portion of the Minimum Wage Act.
¶24 We are aware that the finding of an implied repeal of statutes
is not favored, UNUM Life Ins. Co., 200 Ariz. at 333, ¶ 28, but it is required
when, as here, “conflicting statutes cannot be harmonized to give each
effect and meaning.” Cave Creek Unified Sch. Dist., 233 Ariz. at 7, ¶ 24. H.B.
2579 explicitly stripped the ability of counties, cities, and towns to regulate
nonwage employee benefits. A.R.S. § 23-204(A). The Minimum Wage Act
specifically empowered counties, cities, and towns to regulate benefits,
which we have found to mean nonwage benefits. H.B. 2579 explicitly
prohibits what the Minimum Wage Act permits, and thus, the two statutes
cannot be harmonized. Because H.B. 2579 impliedly amends and repeals a
portion of the Minimum Wage Act, it violates the VPA’s express limitations
on legislative changes to voter-approved laws.
III. Attorney Fees
¶25 The Legislators requested attorney fees in the amount of
$33,450 under the private attorney general doctrine. The affidavit for
attorney fees included time expended representing the Councilmembers
and UCFW on the VPA claim, representing all three groups of plaintiffs for
the home-rule claim, and opposing the State’s motion to dismiss. The court
ultimately dismissed the entire home-rule claim and the VPA claims
brought by Councilmembers and UCFW.
¶26 We review an award of attorney fees under the private
attorney general doctrine for an abuse of discretion. Arnold v. Ariz. Dep’t of
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Health Services, 160 Ariz. 593, 609 (1989). Attorney fees can be awarded
under the private attorney general doctrine to “a party who has vindicated
a right that: (1) benefits a large number of people; (2) requires private
enforcement; and (3) is of societal importance.” Id. “The purpose of the
doctrine is to promote vindication of important public rights.” Id. (internal
quotation and citation omitted). The superior court awarded the Legislators
all attorney fees they requested.
¶27 The State acknowledges that our supreme court’s adoption of
the private attorney general doctrine is binding authority. The State
contends, however, that the Legislators are not entitled to an award of
attorney fees for work on arguments on which they did not prevail and that
the court should have reduced the attorney fees to exclude fees for work on
opposing the motion to dismiss, which the Legislators lost. We agree.
¶28 When the result sought in the litigation is accomplished, “fees
should be awarded for time spent even on unsuccessful legal theories.
Where a party has achieved only partial or limited success, however, it
would be unreasonable to award compensation for all hours expended,
including time spent on . . . unsuccessful issues or claims.” Schweiger v.
China Doll Rest. Inc., 138 Ariz. 183, 189 (App. 1983).
¶29 Here, the Legislators accomplished the result they sought to
achieve—declaring H.B. 2579 unconstitutional. However, the superior
court awarded fees for time spent representing plaintiffs on unsuccessful
claims that were ultimately dismissed. The Legislators are not entitled to
attorney fees for time spent on the unsuccessful home-rule claim nor for
time spent representing the dismissed plaintiffs, UCFW and the
Councilmembers. However, the Legislators were ultimately successful on
their VPA claim, and that claim meets the criteria to award fees under the
private attorney general doctrine.
¶30 First, the resolution of the litigation benefits a large number
of people in the state, including all employees and employers subject to the
Minimum Wage Act. The right to regulate wages and benefits belongs to
counties, cities, and towns; thus, its vindication benefits large numbers of
Arizonans. The Legislators in this case “sought no recovery for themselves
and achieved no personal gain or advantage; they did not act for their own
benefit or for the benefit of a particular class or group, but instead acted to
vindicate the interests of the entire citizenry of the state.” Kadish v. Ariz.
State Land Dep’t, 177 Ariz. 322, 329 (App. 1993).
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¶31 Second, the vindication of the right the Legislators asserted
required a legal challenge to a statute adopted by the legislature and could
only have been privately enforced. See Ariz. Ctr. for Law in Pub. Int. v. Hassell,
172 Ariz. 356, 371 (App. 1991). Finally, the vindication of the right asserted
by the Legislators is of societal importance. The Legislators established the
right of counties, cities, and towns to regulate nonwage benefits. By
challenging the constitutionality of H.B. 2579, which took away this right,
the Legislators ensured that these bodies could provide for regulation of
nonwage benefits for a large number of employees within the state. The
superior court erred in awarding attorney fees related to the home-rule
claim as to all plaintiffs, the VPA claim as to the Councilmembers and
UCFW, and related to the motion to dismiss. Accordingly, the Legislators
are only entitled to attorney fees for time spent representing the successful
group of plaintiffs on the VPA claim.
CONCLUSION
¶32 We affirm the superior court’s grant of summary judgment in
favor of the Legislators. We vacate the award of attorney fees in favor of the
Legislators and remand for a redetermination of the amount of the award
consistent with this opinion. We award the Legislators their fees on appeal
upon their compliance with Rule 21 of the Arizona Rules of Civil Appellate
Procedure.
AMY M. WOOD • Clerk of the Court
FILED: AA
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