City of Phoenix v. Superior Court In and For County of Maricopa
| Decision Date | 27 September 1988 |
| Docket Number | No. 1,CA-SA,1 |
| Citation | 762 P.2d 128,158 Ariz. 214 |
| Court | Arizona Court of Appeals |
| Parties | CITY OF PHOENIX, a municipal corporation, Petitioner, v. SUPERIOR COURT of the State of Arizona, In and For the COUNTY OF MARICOPA, Honorable Joseph D. Howe, a judge thereof, Respondent Judge. LAIDLAW WASTE SYSTEMS, INC., a foreign corporation; Heemstra & Slager, Inc., an Arizona corporation, dba Arizona Waste services; Sunrise Disposal Services, Inc., an Arizona corporation; Harry Thurston and John Steele, Real Parties in Interest. 88-144. |
The City of Phoenix petitions for special action relief from the trial court's preliminary injunction enjoining the City from enforcing or implementing its annexation of an unincorporated area of approximately 10 square miles northeast of Phoenix. The trial court granted the injunction after finding that the City's annexation would result in a "taking" of the business interests of three private garbage collection services without just compensation, in violation of Ariz. Const. art. 2, § 17. The issue presented is whether any legal basis exists for enjoining the City's annexation based upon an alleged unconstitutional "taking." 1
In early 1988 the City gave notice of its intention to annex an area north of Bell Road, to Pinnacle Peak Road, running from 20th Street to Tatum Blvd., known as the Northeast Territory. 2 On March 3, 1988, Laidlaw Waste Systems, Inc., wrote to the Phoenix City Manager, advising that it was currently providing trash removal services to residents of the Northeast Territory and would be harmed by the institution of City services after annexation. The letter stated:
In the event of the annexation ... [Laidlaw] will be immediately put out of business by virtue of the City monopoly which would be put in place through the annexation.... This would constitute a taking, as defined in the Fifth Amendment to the United States Constitution and Article 2, § 17 of the Arizona State Constitution.
Article 2, § 17 of the Arizona State Constitution requires that provision for compensation be made prior to a taking. The purpose of this letter is to advise the City of my clients' interests and request that the City comply with the requirements of the Arizona State Constitution prior to adopting the above described annexations by making provision for compensation.
The City did not respond to this letter.
On May 18, 1988, after receiving petitions approving the annexation signed by 58% of the property owners in the area, the Phoenix City Council enacted Ordinance No. G-3118, annexing the Northeast Territory, effective June 18, 1988. On June 7, 1988, the plaintiffs/real parties in interest (hereinafter referred to as plaintiffs) filed an action in Maricopa County Superior Court to set aside the annexation, alleging that the annexation constituted a taking without just compensation in violation of the Arizona and United States Constitutions. 3 The action sought a preliminary injunction prohibiting the City from implementing or enforcing the annexation and just compensation for plaintiffs' damages and attorneys' fees. The plaintiffs' theory of "a taking without prior just compensation" is based on the assertion that the City, after annexation was effective, would provide exclusive fire protection and trash removal services thereby taking clientele from the business plaintiffs and causing irreparable harm to the individual taxpayers who would be subject to city regulation and taxation. 4
On June 16, 1988, after a hearing on the motion for injunctive relief, the trial court issued its preliminary injunction, finding that the plaintiffs would suffer irreparable injury as a result of the annexation, that the City's conduct in demanding plaintiffs' customer lists and billing status and in demanding that they cease business in the territory "constitutes a taking," and that plaintiffs had shown a reasonable likelihood of success on the merits. The order further stated:
IT IS ORDERED:
That during the pendency of this action, the City of Phoenix, its officers, agents and employees are hereby enjoined from enforcing, implementing or taking any act in reliance upon the validity of the Northeast Annexation, which was enacted by the City's Ordinance No. G-3118.
On July 13, 1988, the City filed this petition for special action, requesting that we vacate the preliminary injunction because the plaintiffs hold no franchise or contractual right to provide exclusive services to the residents of the Northeast Territory, and thus have no constitutional right to be free from the City's competition. The City also argues that the annexation itself does not constitute a taking of the plaintiffs' property. The City also argues that if any conduct by the City harmed the plaintiffs, the proper remedy would be to enjoin that conduct, or to award damages, rather than to enjoin an annexation which complies with all statutory requirements. The League of Arizona Cities and Towns has filed an amicus curiae brief in support of the City's position, as has the association of Citizens for Annexation of the Northeast Valley.
The plaintiffs argue that because the preliminary injunction is appealable, see A.R.S. § 12-2101(F), and because the City filed its notice of appeal from that order a few days after it filed its petition here, we should not accept special action jurisdiction in this matter. We agree with the City, however, that the issue is one of law with statewide significance. See Summerfield v. Superior Court, 144 Ariz. 467, 469, 698 P.2d 712, 714 (1985). The preliminary injunction leaves the annexed territory in a "governmental limbo" pending an appeal that would include the same issue now before us and that would be based on the same undisputed facts. Because of the important public interest served by the annexation process and because of the existence of several pending cases presenting the same potential issue, we exercise our discretion to accept special action jurisdiction.
Plaintiffs sought to set aside the annexation, arguing that the City's conduct in competing with private trash collection services would cause them a loss of business without compensation, constituting a "taking" in violation of Ariz. Const. art. 2, [158 Ariz. 217] *131s 17. 5 The City responded that lawful competition did not result in a "taking," and thus the preliminary injunction could not be sustained on any lawful basis.
We frame the issue more narrowly. We need not decide whether the City's subsequent conduct may constitute a taking. Rather, we merely need to determine whether enjoining the annexation was an appropriate remedy. We therefore address only the appropriateness of injunctive relief.
The scope of appellate review of an order granting an injunction is limited to consideration of whether a clear abuse of judicial discretion has been shown. Financial Associates, Inc. v. Hub Properties, Inc., 143 Ariz. 543, 694 P.2d 831 (App.1984). The trial court clearly abuses its discretionary power to grant an injunction by misapplying the law to undisputed facts. Gillespie Land & Irrigation Co. v. Gonzalez, 93 Ariz. 152, 379 P.2d 135 (1963).
Here, plaintiffs argued that because they will be unable to compete with the City's institution of tax-subsidized trash collection services upon annexation, the direct and natural consequences of annexation will be a loss of their business interest. Based upon this theory, the plaintiffs contend that injunctive relief was appropriate for the following reasons:
An accepted remedy for a city ordinance which constitutes a taking is that the ordinance be voided. This was the relief given in Corrigan v. City of Scottsdale, 149 Ariz. 553, 720 P.2d 528 (App.1985), modified on other grounds 149 Ariz. 538, 720 P.2d 513 (1986) [cert. denied ], where a city zoning ordinance was voided because it constituted an unlawful taking in contravention of Article 2, Section 17 of the Arizona Constitution. Thus, if the Northeast annexation will result in a taking or damaging of the Plaintiffs' properties, the proper remedy is to void the annexation. Thus, a preliminary injunction is an appropriate immediate step that will preserve the status quo.
Although Corrigan stands for the proposition that a zoning ordinance that...
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