Hopi Tribe v. City of Flagstaff, 1 CA-CV 12-0370

CourtCourt of Appeals of Arizona
PartiesTHE HOPI TRIBE, a federally recognized Indian Tribe, Plaintiff/Appellant, v. CITY OF FLAGSTAFF, ARIZONA, Defendant/Appellee.
Docket Number1 CA-CV 12-0370
Decision Date25 April 2013

THE HOPI TRIBE, a federally recognized Indian Tribe, Plaintiff/Appellant,

1 CA-CV 12-0370


April 25, 2013

See Ariz. R. Supreme Court 111(c); ARCAP 28(c);
Ariz. R. Crim. P. 31.24

(Not for Publication -
Rule 28, Arizona Rules of
Civil Appellate Procedure)

Appeal from the Superior Court in Coconino County

Cause No. S0300CV201100701

The Honorable Joseph J. Lodge, Judge


Robert J. Lyttle, P.C.
By Robert J. Lyttle
Hunsucker Goodstein & Nelson PC
By Michael D. Goodstein
Stacey H. Myers
Kathleen J. Trinward
Attorneys for Plaintiff/Appellant

Washington, DC

Ballard Spahr LLP
By John G. Kerkorian
Brunn W. Roysden III
Colleen M. Reider
Attorneys for Defendant/Appellee


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¶1 The Hopi Tribe appeals from the superior court's judgment dismissing the Tribe's complaint against the City of Flagstaff (the City) on various grounds and awarding the City attorneys' fees. The Tribe argues the court erred by dismissing the public nuisance claim and by awarding attorneys' fees to the City. For the reasons that follow, the judgment is affirmed in part, reversed in part and remanded.


¶2 This case involves the Tribe's challenge to the City's agreement to supply reclaimed wastewater to the Arizona Snowbowl Resort for use in making artificial snow on ski runs in the San Francisco Peaks (the Peaks). This case is the latest iteration of a long-standing dispute -- tracing back decades -- regarding the use of the Peaks.

¶3 In March 2002, the City and Snowbowl executed a "Reclaimed Wastewater Agreement" (the Contract) under which Snowbowl would purchase reclaimed wastewater from the City to make snow. Reclaimed wastewater is "treated sewage effluent" that has been processed through the City's wastewater treatment

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plants and that meets certain standards defined by the Arizona Department of Environmental Quality (ADEQ). According to the Tribe's verified complaint, reclaimed wastewater retains certain "recalcitrant chemical components that are not degraded or removed in the wastewater treatment process," some of which are harmful to animals.

¶4 The Contract was contingent on Snowbowl "obtaining all necessary federal and state environmental approvals to proceed with snowmaking with Reclaimed Wastewater." In September 2002, Snowbowl submitted a proposal -- including a request for snowmaking with reclaimed wastewater -- to the United States Forest Service, which then began the complex administrative investigation necessary to authorize upgrades to Snowbowl's operations. As particularly relevant here, the Forest Service's key undertaking was a years-long study of Snowbowl's proposed upgrades and a Final Environmental Impact Statement pursuant to the National Environmental Policy Act (NEPA).

¶5 In March 2004, while this investigation was ongoing, the Tribe contacted the City's Water Commission to express opposition to the Contract and request a hearing. The City denied the Tribe's request for a hearing, but "indicated it would take no action" until the Forest Service made a final decision after completing the NEPA process.

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¶6 In June 2005, the Forest Service reached a final administrative decision approving Snowbowl's requested upgrades, including snowmaking with reclaimed wastewater. See Navajo Nation v. U.S. Forest Service (Navajo Nation I), 408 F. Supp. 2d 866, 870-71 (D. Ariz. 2006). The Tribe and several other plaintiffs promptly filed suit in federal court challenging the Forest Service's decision. Id. at 869-70. In that litigation, the Tribe alleged, pursuant to the Federal Administrative Procedure Act, that the Forest Service's investigation and administrative decision process failed to comply with the requirements of NEPA, the National Historic Preservation Act (NHPA), the Endangered Species Act (ESA), the Grand Canyon National Park Enlargement Act (GCEA), the National Forest Management Act (NFMA), the Religious Freedom Restoration Act (RFRA) and the Forest Service's trust responsibility to the Tribes. Id. at 871. Although Snowbowl intervened in that litigation, the City was not a party. See id. at 869-70.

¶7 In January 2006, the district court granted summary judgment in favor of the Forest Service on all claims except those under RFRA; after a bench trial, the district court found that the Forest Service's decision did not violate RFRA. See generally id. The district court reviewed the Forest Service's NEPA process -- but not the substantive results -- to determine whether "the agency ha[d] taken a hard look at the environmental

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effects of the proposed action" and whether the environmental impact statement "contained a 'reasonably thorough discussion of the significant aspects of the probable environmental consequences.'" Id. at 872 (citations omitted). The court's RFRA analysis, in relevant part, assessed whether the authorized Snowbowl upgrades would result in a "substantial burden" to the Tribe's religious beliefs, requiring "a showing that [the governmental conduct] coerces someone into violating his or her religious beliefs or penalizes his or her religious activity." Id. at 904.

¶8 The Tribe and other plaintiffs appealed to the Ninth Circuit Court of Appeals, which initially reversed in part and affirmed in part, but on later en banc review affirmed the district court's decision on all counts. Navajo Nation v. U.S. Forest Service (Navajo Nation II), 479 F.3d 1024 (9th Cir. 2007), modified in Navajo Nation v. U.S. Forest Service (Navajo Nation III), 535 F.3d 1058, 1063 (9th Cir. 2008) (en banc) (8-3 decision), cert denied, 129 S. Ct. 2763 (2009). The Tribe continued to "actively oppose" use of reclaimed wastewater throughout the federal litigation.

¶9 On July 2, 2010, the Forest Service issued its final authorization to allow the Snowbowl upgrades to move forward. Although the Contract remained in effect, the City Water Commission held a public hearing in late July 2010 -- at which

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the Tribe participated -- to consider providing Snowbowl with potable water, rather than reclaimed wastewater. The City continued to consider alternatives to the Contract through August and into September 2010, including public hearings where the Tribe presented its opposition. The City made a final decision to move forward with the Contract on September 2, 2010, and declined to reconsider that decision on September 7, 2010.

¶10 The Tribe served a notice of claim on the City on February 23, 2011 and filed its complaint in this case on August 19, 2011. The Tribe's complaint asserts three counts against the City: (1) a claim that the Contract violated Arizona law and public policy, (2) a claim for infringement of the Tribe's water rights and (3) a public nuisance claim.

¶11 On deciding the City's motion to dismiss pursuant to Arizona Rule of Civil Procedure 12(b)(6), which the Tribe opposed, the superior court abstained from considering the water rights claim in deference to the ongoing Little Colorado River general stream adjudication pending in the Apache County Superior Court and dismissed the illegal contract and public nuisance claims on the basis of claim and issue preclusion and failure to comply with notice of claim requirements. The court found the Tribe's "Complaint arose from contract" and awarded the City its reasonable attorneys' fees as the successful party

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on all claims pursuant to Arizona Revised Statutes (A.R.S.) section 12-341.01.2

¶12 The Tribe timely appealed from the entry of final judgment. This court has jurisdiction pursuant to Article 6, Section 9, of the Arizona Constitution and A.R.S. § 12-2101(A)(1).


I. General Principles.

¶13 The Tribe appeals from the dismissal of its claim for public nuisance and from the award of attorneys' fees and seeks clarification that the grounds for dismissal do not apply to the court's order abstaining from consideration of the Tribe's water rights claims; the Tribe does not challenge the judgment dismissing the claim that the Contract violated Arizona law and public policy. The Tribe argues dismissal of the public nuisance claim was improper because that claim was timely filed and is not barred by issue or claim preclusion.

¶14 A dismissal for failure to state a claim is reviewed de novo, assuming the truth of all well-pleaded factual allegations and considering all reasonable inferences in the light most favorable to the non-moving party. Coleman v. City of Mesa, 230 Ariz. 352, 355-56, ¶¶ 7, 9, 284 P.3d 863, 866-67

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(2012). Dismissal is proper only if the claim fails "under any interpretation of the facts susceptible of proof." Id. at 356, ¶ 8, 284 P.3d at 866 (citation omitted).

¶15 A public nuisance "encompasses any unreasonable interference with a right common to the general public," and must affect "a considerable number of people." Armory Park Neighborhood Ass'n v. Episcopal Cmty. Servs., 148 Ariz. 1, 4, 712 P.2d 914, 917 (1985); see also Restatement (Second) of Torts (Restatement) § 821B (1979); cf. A.R.S. § 13-2917(A) (defining public nuisance for misdemeanor criminal liability as, in part, something "that interferes with the comfortable enjoyment of life or property by an entire community or neighborhood or by a considerable number of persons."). As both parties acknowledge, the contours of a public nuisance claim are necessarily imprecise. A claim for public nuisance requires showing both a substantial interference with a right held collectively by the public and that the substantial interference is unreasonable under the circumstances. Armory Park, 148 Ariz. at 7-8, 712 P.2d at 920-21. Reasonableness is assessed using a balancing test, considering "the utility and reasonableness of the conduct and balanc[ing] these...

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