Rodgers v. Huckelberry

• Decision Date: 21 October 2019
• Docket Number: No. 2 CA-CV 2018-0161,2 CA-CV 2018-0161
• Citation: Rodgers v. Huckelberry, 247 Ariz. 426, 450 P.3d 1279 (Ariz. App. 2019)
• Parties: Richard RODGERS, Shelby Magnuson-Hawkins, and David Preston, Plaintiffs/Appellants/Cross-Appellees, v. Charles H. HUCKELBERRY, in his official capacity as County Administrator of Pima County; Sharon Bronson, Ray Carroll, Richard Elias, Allyson Miller, and Ramón Valadez, in their official capacities as members of the Pima County Board of Supervisors; and Pima County, a political subdivision of the State of Arizona, Defendants/Appellees/Cross-Appellants.
• Court: Arizona Court of Appeals

247 Ariz. 426

450 P.3d 1279

Richard RODGERS, Shelby Magnuson-Hawkins, and David Preston, Plaintiffs/Appellants/Cross-Appellees,

v.Charles H. HUCKELBERRY, in his official capacity as County Administrator of Pima County; Sharon Bronson, Ray Carroll, Richard Elias, Allyson Miller, and Ramón Valadez, in their official capacities as members of the Pima County Board of Supervisors; and Pima County, a political subdivision of the State of Arizona, Defendants/Appellees/Cross-Appellants.

No. 2 CA-CV 2018-0161

Court of Appeals of Arizona, Division 2.

Filed October 21, 2019

Scharf-Norton Center for Constitutional Litigation at the Goldwater Institute, Phoenix, By Timothy Sandefur and Veronica Thorson, Counsel for Plaintiffs/Appellants/Cross-Appellees

Barbara LaWall, Pima County Attorney, By Regina L. Nassen and Andrew L. Flagg, Deputy County Attorneys, Tucson, Counsel for Defendants/Appellees/Cross-Appellants

Presiding Judge Eppich authored the opinion of the Court, in which Judge Espinosa and Judge Eckerstrom concurred.

EPPICH, Presiding Judge:

¶1 Pima County resident-taxpayers Richard Rodgers, Shelby Magnuson-Hawkins, and David Preston ("the taxpayers") appeal from the trial court’s grant of partial summary judgment in favor of Pima County, Pima County Administrator Charles Huckelberry, and the members of the Pima County Board of Supervisors ("the county"). The taxpayers argue the court erred in ruling that the county had not violated state law and county ordinances in procuring services to construct a launch pad for high-altitude balloons and related facilities.¹ The county cross-appeals, contending the taxpayers lack standing to pursue their claims and the issue is moot. We conclude that the taxpayers have standing but dismiss their appeal as moot.

Factual and Procedural Background

¶2 Beginning in September 2014, World View Enterprises Inc., a near-space exploration company that manufactures high-altitude balloons for scientific research and tourism, approached Pima County staff about locating its headquarters, manufacturing facility, and launch pad in the county. An initial plan for World View to use an existing facility at the Tucson International Airport did not come to fruition. But in the summer of 2015, World View and the county discussed the possibility of a new facility, which led to a proposal that the county would build a facility that it would own and lease to World View.

¶3 In August 2015, County Administrator Huckelberry told World View that preliminary design and cost information for the facility was needed. Later that month, Swaim Associates Ltd., an architectural firm, was chosen to provide preliminary design services. Swaim, in turn, employed Barker-Morrissey Contracting Inc., for preliminary cost estimates. Neither Swaim nor Barker-Morrissey were paid for the preliminary services they provided over the next few months with the hope that they would be awarded paid contracts if the project materialized.

¶4 By September or October 2015, World View informed the county that its facility had to be operational by the end of 2016. In October, Huckelberry submitted to World View a written proposal to provide it a facility that it could occupy in 2017, but it remained unclear for the next several weeks whether World View would agree to the proposal. Finally, on December 23, 2015, World View agreed to move into a building leased from Pima County "by approximately November 2016," a completion date that required the facility to be built much sooner than the usual eighteen to twenty-four months to complete such a facility.

¶5 In January 2016, the Pima County Board of Supervisors, on Huckelberry’s recommendation, voted to approve the World View project. At the same time, the board approved Swaim as the architect and Barker-Morrissey as the contractor without a competitive procurement process, following Huckelberry’s advice that the board should invoke its emergency procurement authority under A.R.S. § 34-606 and Pima County Code § 11.12.060 to select those firms to build the facility. The facility was substantially completed and certified for occupancy by December 2016. For completing the project, Swaim was paid $667,709; Barker-Morrissey, $12,334,531.

¶6 Meanwhile, in April 2016, the taxpayers filed this lawsuit, claiming, among other things, that the selection of Swaim and Barker-Morrissey was "predetermined" and violated competitive procurement requirements in A.R.S. §§ 34-603 and 34-604 and Pima County Code §§ 11.04.010 and 11.16.010. In their complaint, the taxpayers requested injunctive and declaratory relief.

¶7 The county moved to dismiss the case, contending, among other things, that the taxpayers lacked standing and the county had acted lawfully under § 34-606, which provides for emergency procurements "if a threat to the public health, welfare or safety exists or if a situation exists that makes compliance with this title impracticable, unnecessary or contrary to the public interest, except that these emergency procurements shall be made with such competition as is practicable under the circumstances." The trial court denied the motion to dismiss. The county then moved for partial summary judgment, arguing that the issue was moot. The court denied this motion as well, finding the county had conceded the facility was not completed at that time and the contractors had not been fully paid, and even if the issue was moot, the "matter present[ed] issues of great public importance and/or issues that are capable of repetition yet evading review."

¶8 The county then filed a second motion for partial summary judgment, again contending its procurement process was lawful. The taxpayers filed a cross-motion for partial summary judgment. This time, the trial court granted the county partial summary judgment. The court concluded that Huckelberry had not violated procurement laws in his pre-award consultation with Swaim and Barker-Morrissey because those laws applied only to an "agent" and Huckelberry as County Administrator did not fit the statutory definition of an agent. The court also concluded the county had lawfully invoked its emergency procurement power in awarding the contracts. It found that the county had determined the World View project was in the public interest as a means of economic development, and that the project would have been put at risk had the county not agreed to the November 2016 deadline. The court further determined the board had acted within its discretion when it concluded that any competitive bidding for the project on that schedule would have been impracticable because had there been any competitive bidding, "it would have left a mere 6-8 months for the design and construction of the building and balloon pad—a time frame that appears unrealistic if not impossible."

¶9 The taxpayers appealed the trial court’s summary-judgment ruling that no illegal procurement had occurred. The county cross-appealed the court’s denial of its motion to dismiss for lack of standing, also arguing that the issue of whether procurement procedures had been violated had become moot and should not be decided. We have jurisdiction pursuant to A.R.S. § 12-2101(A)(1).

Taxpayer Standing

¶10 We first address the county’s contention that the trial court erred in denying its motion to dismiss the taxpayers’ claims for lack of standing. After entry of judgment, a party may challenge the trial court’s earlier denial of a motion to dismiss.

See In re Pima Cty. Mental Health No. MH20130801 , 237 Ariz. 152, ¶ 14, 347 P.3d 598 (App. 2015). We generally review a court’s denial of a motion to dismiss for abuse of discretion, id. , but review application of legal standards de novo , see In re $70,070 in U.S. Currency , 236 Ariz. 23, ¶ 12, 335 P.3d 545 (App. 2014). Here, the facts relevant to taxpayer standing are undisputed; we therefore review that issue de novo .

¶11 "A taxpayer has sufficient standing in an appropriate action to question illegal expenditures made or threatened by a public agency." Smith v. Graham Cty. Cmty. Coll. Dist. , 123 Ariz. 431, 432, 600 P.2d 44, 46 (App. 1979).² Such standing is based on taxpayers’ "equitable ownership of such funds and their liability to replenish the public treasury for the deficiency which would be caused by the misappropriation." Ethington v. Wright , 66 Ariz. 382, 386, 189 P.2d 209 (1948). "Illegal expenditures" include expenditures made without complying with required competitive bidding processes, even if the purpose of the expenditure is proper. See Smith , 123 Ariz. at 432, 600 P.2d at 45 (school roof); Secrist v. Diedrich , 6 Ariz. App. 102, 104, 430 P.2d 448 (1967) (school landscaping).³ Although our supreme court has stated that a taxpayer does not have standing "unless the taxpayer and his class have sustained or will sustain some pecuniary loss" and it "affirmatively appear[s] by the complaint that such loss will occur," Henderson v. McCormick , 70 Ariz. 19, 24-25, 215 P.2d 608 (1950), an allegation of an illegal expenditure has generally been held sufficient to establish standing, see, e.g. , Ethington , 66 Ariz. at 387, 189 P.2d 209 (finding taxpayer standing where harm alleged was that "public moneys [would] be unlawfully expended" if allegedly unconstitutional statute were enforced); Secrist , 6 Ariz. App. at 104, 430 P.2d 448 (finding taxpayer standing where landscaping work at school buildings performed without soliciting public bids; no requirement of allegation that competitive bidding would have resulted in lower cost); Smith , 123 Ariz. at 433-34, 600 P.2d at 46-47 ( Henderson does not require a showing of pecuniary loss to enjoin an illegal expenditure); see also Dail v. City of Phoenix , 128 Ariz. 199, 202, 624 P.2d 877, 880 (App. 1980) (taxpayer standing established by showing either "a pecuniary loss attributable to the challenged transaction of a municipality" or "a direct expenditure of funds that were generated through taxation").

¶12 Here, the taxpayers have...