Arizona’s Corporation Commission is Not a “Fourth Branch” of Government

October 1, 2021
By Timothy Sandefur

The Arizona Supreme Court this morning ruled unanimously in favor of the state’s Corporation Commission in a lawsuit involving the Commission’s decision setting rates for wastewater treatment in some communities in Arizona. But the case has significance far beyond the Commission’s ratemaking power. Over the years, it has become common to refer to the Commission as a “fourth branch of government,” with powers equal to those of the legislature or the judiciary—the theory being that since the state Constitution devotes an article to the Commission, it can’t be subordinate to the three traditional branches of government. And that’s troubling, because the Commission has recently become especially aggressive in its effort to dictate to businesses how they can operate, and pursued investigations of businesses that have turned out to be witch hunts.

The Goldwater Institute filed a friend of the court brief in the case arguing that the Commission is note entitled to such extreme authority—and today, the court agreed. Its decision makes clear that whatever powers the Commission enjoys, they must be exercised within constitutional limits. It is “erroneous,” the court said, to call the Commission a “fourth branch of government.” However powerful the Commission may be, “all governmental bodies remain subject to constitutional constraints and requirements, both general (such as due process) and those specific to the entity. And the courts bear ultimate responsibility for interpreting [constitutional] provisions.”

In fact, the court noted, the entire idea of the Commission being a fourth branch of government is “a bit of a red herring,” because while courts traditionally defer to the factual findings of administrative agencies—which are supposed to be staffed by experts in their field—they’ve never deferred to the legal judgment of bureaucracies.

That’s a welcome reminder, given that bureaucratic agencies like the Corporation Commission exercise an outsize authority over our lives today. Most of the rules that govern us, in fact, are written not by elected legislators but by bureaucrats in government agencies who typically operate without meaningful accountability to the public. And although the members of Arizona’s Corporation Commission are elected, they have begun asserting authority far beyond their actual legal bounds—most notably in recent proposals to dictate the environmental policies of energy companies throughout the state. That’s something that the people’s representatives should decide, not the Corporation Commission—an agency trusted with the day-to-day regulation of public utilities. Today’s Supreme Court decision helpfully underlines the importance of ensuring that government remains within its legal limits.

Timothy Sandefur is the Vice President for Litigation at the Goldwater Institute.