Protecting the Right to Challenge Bureaucratic Overreach

Arizona businessman Greg Mills worked as an electronics engineer for years before state bureaucrats sent him a warning claiming that he’s required to get permission from the Arizona Board of Technical Registration before he can run his business. Mills responded that the Board lacks any legal authority over his business, and went to court to ask state judges to determine whether he falls within the Board’s jurisdiction. But the Arizona Court of Appeals threw out his lawsuit, holding that he was required go through a hearing before the Board before he could file his case.

That holding ignores the difference between cases that concede an agency’s jurisdiction—which do require a person to submit to a hearing first—and those in which a person argues that the agency is overstepping its bounds. In the latter situation, no such hearing requirement applies, because it would make no sense to force a person to concede the bureaucracy’s authority when he thinks the it has no such authority.

In this friend of the court brief, we point out that federal courts have allowed people to challenge the “jurisdictional determinations” of agencies without first submitting to an administrative hearing. What’s more, we point out that recent changes to Arizona state law make it senseless to force a person in Mills’s situation to first submit to an agency hearing. In the Spring of 2021, the state legislation amended the rules governing agency hearings, to hold that if a person appeals from such a hearing, a judge must decide all legal and factual questions all over again—and that the person is entitled to submit new evidence in court. With such rules in place, it makes no sense to force a person to submit to a hearing, only to argue everything all over again on appeal. And to hold otherwise—imposing a costly and time-consuming hearing requirement on lawsuits that challenge agency authority—is likely to deter most people from even trying. That outcome would be bad not only for business owners like Greg Mills, but for all Arizonans.