The Arizona Court of Appeals unanimously upheld the Tax Court's dismissal of a case brought by Arizona Attorney General Mark Brnovich against the Board of Regents, and ordered the state to pay more than $1 Million in legal costs incurred in the dispute. Brnovich's office tells Arizona's Law tonight that they will appeal.
ASU and the City of Tempe cut a deal to put an Omni hotel and conference center on ASU land along Mill Avenue. The Attorney General sued within one year claiming that the deal violated law because it did not serve a public purpose, among other claims. Later, the AG's Office claimed that the proposed deal also violated the Gift Clause of the Arizona Constitution.
The Tax Court found that the AG did not have the authority to bring the first set of claims and that the Gift Clause count was filed too late. Judge Christopher Whitten awarded nearly $1M in attorneys' fees to be transferred from one arm of the state (AG's Office) to another (Board of Regents) to pay their private counsel (Snell & Wilmer and Perkins Coie).
The 3 judge panel of the Court of Appeals today found that Judge Whitten properly decided the case down the line. Judge Jennifer Perkins wrote that the Attorney General's Office definitely had known enough when the deal was announced in 2018 to file the Gift Clause count within the one year statute of limitations:
To be sure, the AGO did not obtain all documents related to the transaction contemplated between Omni and ABOR until after April 3, 2018. But the AGO undisputedly knew about the transaction and could have asked for copies of the agreements before that date. Indeed, the AGO affirmatively opted against requesting copies of the documents out of a desire—as one AGO attorney put it—not to “poke the bear.” The tax court thus appropriately determined Count IV’s accrual date as a matter of law.
(On the day in January 2018 when the deal was announced, the AG's Office told the Arizona Republic the arrangement sounded "pretty suspicious.")
The appellate panel awarded attorneys' fees for the appeal, too, which will bring the total to more than $1,000,000. Ryan Anderson, the Communications Director for the Attorney General's Office, tells Arizona's Law that they will appeal today's decision to the Arizona Supreme Court.
"This lawsuit was dismissed on procedural grounds. Our office will appeal. The Attorney General will always fight against crony capitalism and sweetheart real estate deals that are unfair to hardworking Arizona taxpayers.”
We have an equally clear response from Arizona attorney Tom Ryan:
"First, Arizonans should ask: why is the Arizona Attorney General suing its own client, the Arizona Board of Regents instead of providing advice to it, at the outset of the issue. To be clear, this case was nothing more than political grandstanding by Brnovich. Second, the Attorney General's office was well aware of what ABOR, Tempe and Omni Hotels were doing long before it filed the suit against ABOR. There is a clear cut 1 year statute of limitations claim that ALL litigation lawyers are aware of that applies to any governmental entity being sued. Brnovich's office violated that rule. The rest of the decision can be summed up this way: the Attorney General has no statutory authority to tell ABOR how to do its job. The Court of Appeals was not impressed with how Brnovich's office handled this case and affirmed an award of nearly $1,000,000 in attorneys' fees to the victors. On behalf of all Arizonans I'd like to say thanks for nothing. But I can't. Because it wasn't "nothing." It's a million dollars of taxpayer money wasted on this litigation boondoggle. Off my soap box now."
Here is today's Opinion:
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