BREAKING: AZ Supreme Court Breathes New Life In Brnovich Battle Against the ASU/Omni Hotel Deal (READ Opinion)

The Arizona Supreme Court today breathed new life into the Attorney General's long-running battle against ASU's deal to build an Omni Hotel & Conference Center on campus land. In so doing, they vacated an award for $1M in lower court legal fees.

The unanimous opinion (below) was written by Justice John Lopez. It disagreed with the lower-court decisions finding that the AG could not bring an action finding the lease illegal and that another count alleging the deal violated the Constitution's Gift Clause was not added past the statute of limitations.

(Here is the article Arizona's Law filed on the now-vacated Court of Appeals' decision.)

However, the Supreme Court did agree with the dismissal of the first two counts of the lawsuit brought by the AG's Office against the hotel and conference center deal. 

Notwithstanding the Attorney General’s inability to identify an applicable tax law under title 42 or 43 that he is authorized to enforce here, he argues that because the purpose of the Omni Deal is to evade taxes, the property leased is subject to taxation. He relies on the Arizona Constitution, which provides that “[n]o property shall be exempt which has been conveyed to evade taxation.” But again, for a conveyance to be made to evade taxation, there must be a tax to evade in the first place, and here there is none. Thus, we affirm the dismissal of Count I.

Both the Tax Court and the Court of Appeals had found that the fourth count - added three months later - violated the one-year statute of limitations for bringing the Gift Clause allegations. The Supreme Court disagreed in two different ways - finding that a FIVE year statute of limitations was more appropriate and that the addition of the Gift Clause count does relate back to the original complaint because it arose out of the same deal (as the earlier counts)

The case will now go back to the Tax Court. Judge Christopher Whitten was the then-presiding Tax Court judge who issued the opinion. Because of rotations, the case will have a new judge - either Judge Danielle Viola or Sara Agne.

This article was reported by AZ Law founder Paul Weich. Paul is currently running for a seat in Arizona's House of Representatives.

"AZ Law" includes articles, commentaries and updates about opinions from the Arizona Supreme Court, U.S. Supreme Court, as well as trial and appellate courts, etc. AZ Law is founded by Phoenix attorney Paul Weich, and joins Arizona's Politics on the internet. 

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