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Limiting the Power of Bureaucrats

Sun City Homeowners Association v. Arizona Corporation Commission

Case Status

Date Filed

April 13, 2020

Last Step

Filed amicus brief.

Next Step

Awaiting decision.

Case Overview

For years, courts have used so-called deference doctrines to give regulatory agencies broad power to control sectors of the economy. The theory behind these doctrines is that agencies are made up of experts who can bring technical knowledge to bear on complex issues—and because courts lack that knowledge, it’s right for judges to defer to the decisions these agencies make on such complicated matters. But that deference is supposed to end when it comes to legal questions, because courts, not agencies, are the legal experts. What’s more, courts have an important job to do in enforcing the checks-and-balances system that protects our freedoms against overzealous bureaucracies.

But in this case, the Arizona Court of Appeals took an extreme step in the wrong direction. Rather than exercising its own independent judgment on legal questions, it created a whole new kind of deference for one of Arizona’s most powerful regulatory agencies. The case involved a decision to combine a group of water agencies in a way that many citizens viewed as “arbitrary and discriminatory.” That’s important because the state Constitution forbids the Corporation Commission from making “arbitrary and discriminatory” decisions. Yet when the citizens protested about the Commission’s decision, it ignored them. It failed to make any decision about whether or not what it was doing was “arbitrary or discriminatory.”

That alone was reason for the Arizona courts to overrule the Commission’s actions. But instead, the Arizona Court of Appeals used a “presumption” theory to pretend that the Commission had made a decision about whether its actions were discriminatory, and then deferred to the decision that the Commission had never actually made. It created the legal fiction that the Commission had concluded its actions weren’t discriminatory, and then held that courts must defer to that decision. And when called on this by the dissenting judge, the other two judges held that this decision was necessary because the Commission is the “fourth branch of government” in Arizona.

That’s wrong. The Commission is not on a constitutional par with the state’s legislature or courts. It’s a regulatory agency like any other—subordinate to the three constitutional branches of government that have the duty to enforce our checks-and-balances system. And if courts can first pretend that an agency made a decision, and then defer to that fictitious decision, then it’s hard to see how courts could possibly limit the power of Arizona bureaucrats.

Case Documents

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