Republic Inv. Fund I v. Town of Surprise

• Decision Date: 31 July 1990
• Docket Number: CV-89-0172-PR,Nos. CV-89-0048-P,s. CV-89-0048-P
• Citation: 166 Ariz. 143,800 P.2d 1251
• Parties: REPUBLIC INVESTMENT FUND I, an Arizona general partnership, Petitioner/Appellee, v. The TOWN OF SURPRISE, a body politic; and Maricopa County, a political subdivision of the State of Arizona, Respondents/Appellants. PETITIONERS FOR DEANNEXATION in re Petition for Deannexation From the City of Goodyear, Petitioners-Appellees, v. CITY OF GOODYEAR, a municipal corporation; Maricopa County, a political subdivision of the State of Arizona; Max McCully, an individual; Wanda Sanders, an individual; and Gail Piggett, an individual, Respondents-Appellants.
• Court: Arizona Supreme Court

Page 1251

800 P.2d 1251

166 Ariz. 143

REPUBLIC INVESTMENT FUND I, an Arizona general partnership, Petitioner/Appellee, v. The TOWN OF SURPRISE, a body politic; and Maricopa County, a political subdivision of the State of Arizona, Respondents/Appellants.

PETITIONERS FOR DEANNEXATION in re Petition for Deannexation From the City of Goodyear, Petitioners-Appellees, v. CITY OF GOODYEAR, a municipal corporation; Maricopa County, a political subdivision of the State of Arizona; Max McCully, an individual; Wanda Sanders, an individual; and Gail Piggett, an individual, Respondents-Appellants.

Nos. CV-89-0048-PR, CV-89-0172-PR.

Supreme Court of Arizona, In Banc.

July 31, 1990.

[166 Ariz. 145] Earl, Baird & Williams by Daryl M. Williams, Phoenix, for Republic Inv. Fund I.

Head & McCoy by Robert D. McCoy, Phoenix, for Town of Surprise and Maricopa County.

Shelley & Behea by J. LaMar Shelley, Mesa, for League of Ariz. Cities and Towns.

Snell & Wilmer by Lonnie J. Williams, Jr., Jeffrey Messing, Phoenix, Sidley & Austin, by Rex E. Lee, Joseph R. Guerra,

[166 Ariz. 146] Washington, D.C., for petitioners for Deannexation

Richard M. Romley, Maricopa County Atty., John W. Paulsen, Maricopa Deputy County Atty., Phoenix, for Maricopa County.

Bill Stephens & Associates by David P. Matheson, Richard A. Alcorn, Phoenix, for City of Goodyear, Max McCully, Wanda Sanders and Gail Piggett.

OPINION

GORDON, Chief Justice.

These two cases, consolidated for our review, raise the issue of the constitutionality of the Arizona deannexation law, former version A.R.S. § 9-471 (Laws 1986 Ch. 45, § 4, as amended by Laws 1986 Ch. 414, § 1). The municipalities involved in both cases claim the statute is unconstitutional as a prohibited special or local law under Ariz. Const. art. 4, pt. 2, § 19(20), which provides:

No local or special laws shall be enacted in any of the following cases, that is to say:

* * * * * *

20. When a general law can be made applicable.

The two divisions of the court of appeals reached opposite results, reflecting the confusion in this area. We granted review to resolve the conflict. See Rule 23(f), Ariz.R.Civ.App.P., 17B A.R.S. We have jurisdiction under Ariz. Const. art. 6, § 5(3) and A.R.S. § 12-120.24. We approve the Division One opinion in Petitioners for Deannexation v. Goodyear, 160 Ariz. 467, 773 P.2d 1026 (App.1989), adopt much of its reasoning, and refer to that opinion where possible to avoid duplication. We vacate the Division Two memorandum decision in Republic Investment Fund I v. Surprise (2 CA-CV 88-0216, Nov. 15, 1988) and the Superior Court's order of deannexation.

FACTUAL AND PROCEDURAL HISTORY

In 1978 the Town of Surprise (Surprise) annexed territory, pursuant to the then existing version of A.R.S. § 9-471, consisting of a ten-foot wide strip of land surrounding an area of approximately 21 square miles. The annexation effectively created an island of unincorporated land within the town's border. Part of the annexed property was acquired by Republic Investment Fund I in April 1987. Republic Investment subsequently petitioned the superior court to deannex its property from Surprise. Surprise challenged the deannexation statute's constitutionality and the sufficiency of Republic Investment's petition. The superior court entered a deannexation order. Surprise appealed and the court of appeals, Division Two, affirmed, holding that the deannexation statute did not violate Ariz. Const. art. 4, pt. 2, § 19. The court cited its earlier decision in Picture Rocks Fire Dist. v. Pima County, 152 Ariz. 442, 733 P.2d 639 (App.1987), to support its finding.

In the second case before us, Petitioners for Deannexation sought statutory deannexation from the City of Goodyear. Goodyear moved to dismiss the petition to deannex, claiming the law was unconstitutional because, among other reasons, it violated the local or special law prohibition of Ariz. Const. art. 4, pt. 2, § 19. The trial judge denied Goodyear's motion to dismiss and the court of appeals denied jurisdiction of Goodyear's petition for special action relief. This Court denied Goodyear's petition for review. The trial court then upheld the constitutionality of the deannexation statute, based on Picture Rocks. Goodyear appealed and the Court of Appeals, Division One, reversed. Petitioners for Deannexation, 160 Ariz. 467, 773 P.2d 1026 (App.1989).

HISTORICAL BACKGROUND

The court of appeals' opinion in Petitioners for Deannexation, 160 Ariz. 467, 773 P.2d 1026 (App.1989), accurately sets out the historical background of the deannexation law. We review that history only briefly, as background for our decision.

In the 1970s and 1980s, a large number of Arizona cities and towns engaged in "strip" annexation. Many municipalities artificially extended their boundaries by annexing long strips of property, sometimes only 10 feet wide. Such annexations had two general purposes: (1) to encompass, without actually incorporating, areas with potentially high tax values; and (2) to thwart neighboring municipalities from encroaching through similar actions. The legislature, in 1985, placed a statewide moratorium on all annexations and revised the annexation laws, making the statutory requirements for annexation more stringent. See A.R.S. § 9-471 (effective April 10, 1986). In recognition of past abuses, the legislature also enacted a provision permitting deannexation if certain conditions were met.

The original proposal for deannexation applied statewide. See H.B. 2189, 37th Legis., 2d Reg. Sess. (1986). As subsequently passed, however, the deannexation provisions were significantly narrower in scope:

A. The superior court shall order the deannexation of territory from a city or town having a population of less than ten thousand persons according to the 1980 United States decennial census within a county having a population in excess of one million two hundred thousand persons according to the 1980 United States decennial census and return the territory to the jurisdiction of the county if all of the following conditions are satisfied:

* * * * * *

(Emphasis added). See Senate Committee Amendments to H.B. 2189, Mar. 21, 1986, at 3. As enacted, the bill only affected thirteen cities within Maricopa County. ¹

After the Governor signed the bill, it was further amended to provide that deannexation applied only to cities and towns having a population less than eleven thousand according to the last special United States census and required that petitions for deannexation pursuant to the act be filed before September 1, 1987. See Conference Committee Amendments to H.B. 2217, May 5, 1986, at 1. This resulted in the exclusion of Gilbert from the original list of cities affected and limited the application period to thirteen months.

DISCUSSION

Both petitions for review ask us to determine whether the deannexation statute is a special or local law in violation of Ariz. Const. art. 4, pt. 2, § 19(20). Because this issue is dispositive, we do not reach the other issues raised in either petition for review.

A. Propriety of Review

Deannexation proponents ² assert that, for purposes of challenges under the Arizona Constitution, art. 4, pt. 2, § 19(20), the legislature, not the courts, is the sole judge of whether a general law can be made applicable, citing Valley Nat'l Bank v. Glover, 62 Ariz. 538, 159 P.2d 292 (1945); Prescott v. O'Sullivan, 46 Ariz. 551, 53 P.2d 69 (1935). They argue that the legislature is the appropriate governmental branch to decide which form economic regulation will take, especially where policy decisions involving compromise and line-drawing are involved. Accordingly, deannexation proponents claim, courts must not arrogate to themselves such a legislative function.

Goodyear counters that the court's enforcement of the special/local law prohibitions does not equate with the court's sitting as a "superlegislature." Judicial scrutiny and control are clearly appropriate where legislative favoritism might impair rights guaranteed to municipalities.

In this case, the court may properly review the constitutionality of the deannexation statute. Although we recognize the legislature's role and generally will defer to the legislature on decisions regarding whether a general law will apply, the court's role is to evaluate whether a statute has a valid legislative purpose, is arbitrary, or whether the legislature abused its discretion. See, e.g., Hernandez v. Frohmiller, 68 Ariz. 242, 257-58, 204 P.2d 854, 864-65 (1949); Glover, 62 Ariz. at 560, 159 P.2d at 301.

A strong presumption in favor of a statute's constitutionality exists. Eastin v. Broomfield, 116 Ariz. 576, 570 P.2d 744 (1977). In doubtful cases, courts generally defer to legislative determinations of policy. 2 N. Singer, Sutherland Statutes & Statutory Construction § 40.09, at 233 (4th ed. 1986) (hereafter Sutherland's ). Nonetheless, courts will not refrain from declaring a legislative act an unconstitutional special or local law when the facts so require. See Petitioners for Deannexation v. City of Goodyear, 160 Ariz. at 472, 773 P.2d at 1031, and citations therein. An act, even though general in form, will be treated as a special act if that is its effect. Sutherland's § 40.02; see also 2 E. McQuillan, The Law of Municipal Corporations § 4.50, at 125 (3rd ed. 1988) ("Whether a statute is general or special depends on its substance and practical operation, rather than on its title, form or phraseology.").

The deannexation statute, as amended, affected a limited class for a limited period of time. This calls into question the constitutionality of the statute and review by this court is therefore proper.

B. Equal Protection vs. Special/Local Law Challenges

Goodyear Petitioners for Deannexation claim that the municipalities' complaint is properly characterized as an equal protection, not a special/local law, challenge. They argue that the statute discriminates in favor of other...