ARIZONA CENTER FOR LAW v. HASSELL No. 1 CA-CV 89-134.
172 Ariz. 356 (1991)
837 P.2d 158
ARIZONA CENTER FOR LAW IN the PUBLIC INTEREST, a nonprofit corporation; Defenders of Wildlife, a nonprofit corporation; Michael Gregory; Thomas Wright, and James Vaaler, Plaintiffs-Appellants, v. Milo J. HASSELL, in his capacity as State Land Commissioner; Arizona State Land Department, an agency of the State of Arizona, and State of Arizona, Defendants-Appellees, Calmat Co. of Arizona, an Arizona corporation; Tanner Land Company, Inc., an Arizona corporation; Thomas M. and Frances K. Valente, husband and wife; First American Title Insurance Company of Arizona, an Arizona corporation; Maricopa County, a political subdivision of Arizona; Salt River Project Agricultural Improvement District, a political subdivision of Arizona, Defendants Intervenors-Appellees.
Court of Appeals of Arizona, Division 1, Department B.
Joint Motion for Dismissal Granted; Review Dismissed October 6, 1992.
Arizona Center for Law in Public Interest by David S. Baron, Tucson, and Arizona State University College of Law by Douglas A. Blaze, Tempe, for plaintiffs-appellants.
Perry, Pierson & Kolsrud by Russell A. Kolsrud and Renee B. Gerstman, Phoenix, for defendants-appellees.
Snell & Wilmer by Robert B. Hoffman and Bruce P. White, Phoenix, for defendants intervenors-appellees Calmat, Tanner, and Valente.
Helm & Kyle, Ltd. by John D. Helm, Tempe, for defendant intervenor-appellee Maricopa County.
Mariscal, Weeks, McIntyre & Friedlander by James T. Braselton and Donald McIntyre, Phoenix, for defendant intervenor-appellee First American Title.
Jennings, Strouss & Salmon by James Ackerman and M. Byron Lewis, Phoenix, for defendant intervenor-appellee Salt River Project.
Douglas B. Baily, Atty. Gen., State of Alaska, Jim Jones, Atty. Gen., State of Idaho, Brian McKay, Atty. Gen., State of Nev., Hal Stratton, Atty. Gen., State of N.M., Nicholas Spaeth, Atty. Gen., State of N.D., R. Paul Van Dam, Atty. Gen., State of Utah, Kenneth O. Eikenberry, Atty. Gen., State of Wash., John Hough, Sr. Asst. Atty. Gen., State of Wash., John K. Van de Kamp, Atty. Gen., State of Cal., and Jan Stevens, Supervising Deputy Atty. Gen., State of Cal., Sacramento, Cal., for amici curiae States of Alaska, California, Idaho, Nevada, New Mexico, North Dakota, Utah and Washington.
FIDEL, Presiding Judge.
In 1985, Arizona officials upset long-standing assumptions about title to riverbed lands by asserting that the state owned all lands in the beds of Arizona watercourses that were navigable when Arizona was admitted to the Union. The 38th Arizona Legislature responded by enacting 1987 Ariz. Sess. Laws, ch. 127 (H.B. 2017) (codified at Ariz. Rev. Stat. Ann. §§ 37-1101 to 37-1108, 12-510, and 12-529 (Supp. 1990)), substantially relinquishing the state's interest in such lands. The validity of that statute is the subject of this appeal.
A. The Equal Footing Doctrine
The state's claims originate in a common-law doctrine, dating back at least as far as Magna Charta, vesting title in the sovereign to lands affected by the ebb and flow of tides. See Martin v. Waddell, 41 U.S. (16 Pet.) 367, 412-13, 10 L.Ed. 997 (1842). The sovereign did not hold these lands for private usage, but as a "high prerogative trust ..., a public trust for the benefit of the whole community." Id. at 413. In the American Revolution, "when the people ... took into their own hands the powers of sovereignty, the prerogatives and regalities which before belonged either to the crown or the Parliament, became immediately and rightfully vested in the state." Id. at 416.
Although watercourse sovereignty ran with the tidewaters in England, an island country, in America the doctrine was extended to navigable inland watercourses as well. See Barney v. Keokuk,
The Supreme Court has grounded the states' watercourse sovereignty in the Constitution, observing that "[t]he shores of navigable waters, and the soils under them, were not granted by the Constitution to the United States, but were reserved to the states respectively." Pollard's Lessee, 44 U.S. (3 How.) at 230; see also Oregon ex rel. State Land Board v. Corvallis Sand & Gravel Co.,
B. H.B. 2017
Thus, on February 14, 1912, at the instant it achieved the constitutional status of a state, Arizona acquired title to the lands below high-water mark in all navigable watercourses within its boundaries. Until 1985, however, the Colorado River was the only watercourse in which the state asserted an equal footing claim. See O'Toole, 154 Ariz. at 46, 739 P.2d at 1363.
This changed in 1985, when state officials began, in lawsuits and in public comments, to assert state equal footing rights. Id. at 44, 739 P.2d at 1361. Existing title assumptions were threatened by these developments, and in 1987 the Arizona Legislature responded by enacting H.B. 2017, relinquishing the state's claims in large degree.
H.B. 2017 § 1(B).
Only certain parts of H.B. 2017 are challenged in this lawsuit.
Another challenged part establishes a quitclaim fee of $25 per acre, for which any record titleholder of lands in or near the beds of the Gila, Salt, or Verde Rivers can obtain a quitclaim deed from the state land commissioner for all of the state's equal footing interest in such lands. See § 37-1103.
The legislature declared the provisions of H.B. 2017 severable and enacted it as an emergency measure, effective immediately upon signing. Ariz.Const. art. IV, pt. 1, § 1(3). The bill was signed into law by Governor Evan Mecham on April 21, 1987.
C. Trial Court Proceedings
Appellants Arizona Center for Law in the Public Interest, Michael Gregory, Thomas Wright, and James Vaaler commenced this lawsuit on July 28, 1987.
Appellants, representing Arizona taxpayers and recreational users of Arizona riverbeds, claimed that H.B. 2017 violated the gift clause of the Arizona Constitution, Ariz.Const. art. IX, § 7; the special law clause of the Arizona Constitution, Ariz. Const. art. IV, pt. 2, §§ 19(6), 19(13), and 19(18); and the state's sovereign duty to protect the public trust. Appellants sought a declaratory judgment invalidating certain portions of the act, a declaratory judgment invalidating quitclaim deeds already issued pursuant to the act, and an injunction against issuance of further quitclaim deeds.
These issues were submitted by cross-motions for summary judgment, and the trial court denied appellants' motion and granted summary judgment for the defendants and intervenor-defendants (collectively "appellees"). The trial court identified an issue of disputed fact — "whether the Salt, Gila and Verde Rivers were navigable on February 14, 1912" — but found no need to resolve that issue to decide the validity of H.B. 2017. Even if the rivers were navigable at statehood, the court reasoned, the state could legally relinquish its claims to the riverbeds for the purpose of "unclouding title."
The trial court awarded appellees their costs, denied their requests for attorneys' fees, and entered formal judgment in accordance with its rulings. During this appeal we accepted a brief amicus curiae filed by the Attorneys General of California, Nevada, Idaho, Washington, North Dakota, Utah, New Mexico, and Alaska, supporting the position of appellants, and we permitted appellees to file responding briefs.
A. Public Purpose, Rational Classification, and Special Law Analysis
We first dispose of appellants' claim that H.B. 2017 violates the Arizona Constitution's prohibition against special laws. Article IV, pt. 2, § 19, of the Arizona Constitution provides in part:
H.B. 2017 benefits the class of present and future record titleholders of land within Arizona riverbeds and streambeds other than the Colorado River. Although its benefits do not extend to other landholders within the state, that alone does not make H.B. 2017 an invalid special law. "To be general, a law need not operate on every person, place, or thing within the state...." Republic Investment Fund I v. Town of Surprise,
We reject appellants' argument that H.B. 2017 serves no valid public purpose. The legislature was concerned, at least in part, with reliability and marketability of record title to substantial real property holdings throughout the state. The parties agree that over 40,000 parcels of land were potentially affected by the state's equal footing claims. So extensive an unsettling of record title is a valid subject of legislative concern. See Opinion of the Justices,
We also reject appellants' argument that the beneficiary class of H.B. 2017 was arbitrarily defined. It is useful to compare the statute invalidated in Republic Investment Fund I v. Town of Surprise. There, the legislature was motivated by a legitimate concern with the abusive municipal practice of "strip annexation." However, instead of extending the remedial option of deannexation to all areas where such abuses had occurred, the legislature restricted deannexation to a closed class of twelve cities within Maricopa County. Because this remedy lacked the requisite generality and elasticity, the statute was invalidated under Ariz. Const. art. IV, pt. 2, § 19. 166 Ariz. at 151, 800 P.2d at 1259. Here, by contrast, the requisite generality and elasticity are achieved; the beneficiary class encompasses not only all present but all future landholders within the affected watercourse areas. We find that the statute was tailored with sufficient generality and elasticity to rationally meet the legislature's concern.
Because H.B. 2017 meets the public purpose, generality, and elasticity requirement of Ariz.Const. art. IV, pt. 2, § 19, we find that it is not a special law.
B. Substantiality of Navigability Claim
We have rejected appellants' argument that the legislature acted without public purpose when it attempted to cede to private owners the state's claims to watercourses other than the Colorado River. But we also reject appellees' effort to minimize the magnitude of this cession.
Throughout their briefs, appellees repeatedly dismiss the state's claims that rivers other than the Colorado were navigable at statehood as "uncertain," "doubtful," and "weak." They do so to establish for purposes of gift clause and public trust analysis that the legislature gave up nothing of substantial value.
We approach this argument, at this stage of proceedings, by examining whether appellants introduced substantial evidence to support their navigability claims. The standard of navigability for equal footing claims is established by federal law. Utah v. United States,
In The Daniel Ball, 77 U.S. (10 Wall.) 557, 19 L.Ed. 999 (1870), the Supreme Court stated:
Id. at 563.
In The Montello, 87 U.S. (20 Wall.) 430, 22 L.Ed. 391 (1874), the Supreme Court emphasized that susceptibility to travel and trade would establish navigability, "no matter in what mode the commerce may be conducted." Id. at 441-42.
Id. at 443; accord United States v. Holt State Bank,
The Court has also indicated that the test of susceptibility to useful commerce does not require susceptibility to commercial activity on a large scale. In Utah v. United States,
Mindful of this standard of navigability, we have examined the evidence that the parties submitted to the trial court. Although we need not detail this evidence in this opinion, it includes expert testimony, historical surveys, and news clippings from the relevant time. It is not our purpose to adjudicate on appeal the navigability at statehood of any particular Arizona river or stream. We conclude, however, that appellants submitted substantial evidence from which a factfinder might conclude that portions of rivers and streams other than the Colorado met the applicable standard of navigability at the time that Arizona became a state.
It is true that Arizona has not yet proven that any parcel within the scope of H.B. 2017 lies within a watercourse that was navigable at statehood. Yet this does not mean that Arizona lacks an adjudicable interest in the lands that the legislature attempted to convey; nor does it mean that H.B. 2017 ceded nothing of public value. Arizona courts have recognized that even a contingent claim has value. See In re Estate of Sullivan, 51 Ariz. 483, 488, 78 P.2d 132, 134 (1938) (contingent indebtedness claim of bank had value); Garrett v. Garrett,
GIFT CLAUSE ANALYSIS AND THE PUBLIC TRUST
We now reach the dispositive gift clause and public trust issues. Although the parties have briefed these issues separately, we take them up together. Because the gift clause of the Arizona Constitution explicitly limits governmental freedom to dispose of public resources, it provides an appropriate framework for judicial review of an attempt by the legislative and executive branches to divest the state of a portion of its public trust.
A. The Public Trust Doctrine
An ancient doctrine of common law restricts the sovereign's ability to dispose of resources held in public trust.
Id. at 452, 13 S.Ct. at 118; see also Martin v. Waddell, 41 U.S. (16 Pet.) at 413 (describing watercourse sovereignty as "a public trust for the benefit of the whole community, to be freely used by all for navigation and fishery, as well for shellfish as floating fish").
In Illinois Central, the Supreme Court upheld the Illinois Legislature's repeal of an earlier legislative grant of land beneath Lake Michigan to the Illinois Central Railroad. The Court stated:
146 U.S. at 453, 13 S.Ct. at 118.
The Court did not hold that equal footing lands were entirely inalienable. Rather, it stated:
Id. (emphasis added); see also Appleby v. New York,
Whether an attempted disposition of public trust property meets such criteria is not determined pursuant to federal common law. Rather, as an attribute of federalism, each state must develop its own jurisprudence for the administration of the lands it holds in public trust. Cf. Corvallis, 429 U.S. at 376, 97 S.Ct. at 589 (The equal footing doctrine is not a source of federal common law. Although it operates to vest the state with sovereignty over certain watercourse land upon admission to the Union, thereafter, "the land is subject to the laws of the State.").
Public trust jurisprudence is nascent in Arizona. Our supreme court long ago acknowledged the doctrine. See Maricopa County Municipal Water Conservation Dist. No. 1 v. Southwest Cotton Co., 39 Ariz. 65, 73, 4 P.2d 369, 372 (1931) ("Navigable waters were, under the common law, considered as under the exclusive control of the government, in trust for the general public...."), aff'd as modified, 39 Ariz. 367, 7 P.2d 254 (1932). Yet the doctrine has not yet been applied.
Our first point of reference is Illinois Central, which the Supreme Court of Idaho described as "the seminal case on the scope of the public trust doctrine and [still] the primary authority today." Kootenai Environmental Alliance, Inc. v. Panhandle Yacht Club, Inc.,
From Illinois Central we also derive the core proposition that the state must administer its interest in lands subject to the public trust consistently with trust purposes. Illinois Central, 146 U.S. at 453, 13 S.Ct. at 118; see also Kootenai Envtl. Alliance, 105 Idaho at 632, 671 P.2d at 1095 ("The public trust doctrine at all times forms the outer boundaries of permissible government action with respect to public trust resources.").
The second grounding for an Arizona law of public trust lies in our constitutional commitment to the checks and balances of a government of divided powers.
Judicial review of public trust dispensations complements the concept of a public trust. Our supreme court said in reviewing a disposition of mineral deposits on school trust lands, "The duties imposed
The Supreme Court of Idaho described the interplay of the separate branches in public trust matters as follows:
Kootenai, 105 Idaho at 629, 671 P.2d at 1092; see also Opinion of the Justices,
C. The Gift Clause as a Framework for Public Trust Review
The third point of reference for development of public trust jurisprudence in Arizona is art. IX, § 7, of the Arizona Constitution:
This provision, known as the gift clause, was adopted "to prevent governmental bodies from depleting the public treasury by giving advantages to special interests or by engaging in non-public enterprises." Wistuber v. Paradise Valley Unified School District,
In Wistuber, the supreme court drew on our analysis in Pilot Properties to outline two elements of judicial review under art. IX, § 7: First, the reviewing court must be satisfied that a dispensation of public funds or property serves a public purpose. Second, the reviewing court must be satisfied that the dispensing public entity has received "`consideration' which is not `so inequitable and unreasonable that it amounts to an abuse of discretion,' thus providing a subsidy to the private entity." 141 Ariz. at 349, 687 P.2d at 357 (quoting Pilot Properties, 22 Ariz. App. at 363, 527 P.2d at 522).
In reviewing these questions, the supreme court cautioned, "the courts must not be overly technical and must give appropriate deference to the findings of the governmental body." Id. However, it also made clear that a reviewing court must be independently satisfied that the two elements of a valid dispensation have been shown:
The gift clause offers a well-established constitutional framework for judicial review of an attempted legislative transfer of a portion of the public trust. We hold that when a court reviews a dispensation of public trust property, as when a court reviews the dispensation of any other property, the two Wistuber elements — public purpose and fair consideration — must be shown. The gift clause surely requires no less for public trust property than for other holdings of the state.
Yet public trust land is not like other property. As the Supreme Court said in Illinois Central, a state's title to lands under navigable waters is "different in character from that which the state holds in lands intended for sale." 146 U.S. at 452, 13 S.Ct. at 118. The state might sell ordinary property for fair consideration for the public purpose of enhancing the state fisc. Such a showing, however, would not suffice to validate a dispensation from the public trust. Because the state may not dispose of trust resources except for purposes consistent with the public's right of use and enjoyment of those resources, any public trust dispensation must also satisfy the state's special obligation to maintain the trust for the use and enjoyment of present and future generations.
The United States Supreme Court recognized in Illinois Central that some trust dispensations may not impair and, indeed, may even enhance public use and enjoyment. Id. at 452-53, 13 S.Ct. at 118. The Supreme Judicial Court of Massachusetts has also recognized that land once invested with the public trust may have undergone such changes over time that it is no longer suitable for public trust purposes. Opinion of the Justices to the Senate, 383 Mass. 895, 910, 424 N.E.2d 1092, 1103 (1981).
We will not attempt in this opinion to define the full range of riparian considerations that bear on the decision whether a given parcel retains public trust validity or whether a given dispensation meets the state's obligation to maintain the trust. However, in Kootenai, the Idaho Supreme Court has provided a useful partial listing of factors pertinent to this point:
105 Idaho at 629-30, 671 P.2d at 1092-93.
We conclude that these factors are additional considerations in gift clause review when the property in question is within the public trust.
D. The Deficiencies of H.B. 2017
We come to our analysis of H.B. 2017. We approach that statute, as our supreme court instructed in Wistuber, with deference to the legislature's findings, yet cognizant that we must not merely rubber-stamp the legislature's decision. See Kootenai, 105 Idaho at 629, 671 P.2d at 1092. We believe that the Supreme Court of Idaho captured in a phrase our constitutional responsibility when it said we must give public trust dispensations "a close look." Id.
We have already addressed the first element of public trust review — the question whether the statute was enacted for a valid public purpose. In the preliminary section of this opinion, while rejecting appellants' challenge under Ariz.Const. art. IV, pt. 2, § 19, we held that H.B. 2017 was enacted in response to a valid legislative concern with the unsettling of record title to extensive landholdings throughout the state.
A public purpose, however, does not alone remove a challenged transaction from the prohibition of the gift clause. There must also be consideration that is not "so inequitable or unreasonable that it amounts to an abuse of discretion." Wistuber, 141 Ariz. at 349, 687 P.2d at 357; Pilot Properties, 22 Ariz. App. at 363, 527 P.2d at 522.
Appellees argue that fair consideration for gift clause purposes is automatically established when, as here, in the course of a settlement or compromise, the legislature relinquishes a disputed claim. The case that appellees rely on, Udall v. State Loan Board, 35 Ariz. 1, 273 P. 721 (1929), does not support this proposition. There, our supreme court sustained an enactment partially forgiving certain debts that private parties owed the state. The court reasoned that the state owed a moral obligation to the obligors because the debts had been unreasonably expanded through the incompetence of state engineers. The court, however, did not place compromises beyond gift clause reach; it merely recognized that moral consideration may support a transfer. Id. at 11, 273 P. at 724-25; see also Fund Manager v. Corbin,
Appellees argue, however, that the challenged provisions of H.B. 2017 are indeed supported by an equitable obligation that the state incurred to record titleholders through its long neglect of equal footing claims. We disagree. The United States Supreme Court has recognized that there is no unfairness or immorality in a state's pursuit of ownership claims based on the equal footing doctrine, even claims that have lain dormant for decades. See Phillips Petroleum Co. v. Mississippi,
Appellees alternatively urge that H.B. 2017 produces adequate consideration for the state by establishing quitclaim fees, assuring ongoing receipt of property taxes, creating statutory public rights of access, and avoiding litigation costs. These are benefits to be sure. Yet we cannot judge their adequacy for a reason that brings us to a central defect of H.B. 2017. Although the act attempts the wholesale relinquishment of Arizona's equal footing claims to riverbed lands, the legislature acted without particularized information, and established no mechanism to provide particularized information, to support even an estimate of the value of those claims.
We turn to what we have identified as an additional question in gift clause review of dispensations from the public trust: whether the dispensation satisfies the state's special obligation to maintain the trust for the use and enjoyment of present and future generations. Here we find the same deficiency identified above. The legislature established no basis to assess the value as a public resource of the parcels that it relinquished wholesale by its act.
This deficiency is highlighted by a Massachusetts case upon which appellees have relied. Opinion of the Justices to the Senate, 383 Mass. 895, 424 N.E.2d 1092 (1981). There the Supreme Judicial Court of Massachusetts acceded to a legislative determination that certain already-filled tidelands had no further value for public trust purposes and that the relinquishment of those lands would not impair the public trust.
A second deficiency in our statute is also highlighted by review of the opinion of the Massachusetts Supreme Judicial Court. H.B. 2017 proclaims the public right — subject to certain restrictions concerning access — to recreational use of surface waters in any watercourses that were navigable at statehood. See Ariz. Rev. Stat. Ann. §§ 37-1104(A) and 37-1107. Yet it provides for relinquishment of all state "right, title and interest" in the underlying lands without providing means to prevent diversions, obstructions, or uses inconsistent with the public trust. See Sax, The Public Trust Doctrine in Natural Resource Law: Effective Judicial Intervention, 68 Mich. L.Rev. 471, 490 (1972) ("When a state holds a resource which is available for the free use of the general public, a court will look with considerable skepticism upon any governmental conduct which is calculated either to reallocate that resource to more restricted uses or to subject public uses to the self-interest of private parties.") (emphasis in original).
In the Massachusetts statute, by contrast, lands of potential public value were subjected to administrative screening whereunder
Id. at 913, 424 N.E.2d at 1105. The Massachusetts court further noted that the secretary's decisions were subject to judicial review, including "a consideration of the reasonableness of any conditions imposed and the reasonableness of the absence, if any, of any conditions." Id.
Our purpose in elaborating on the Massachusetts statute is not to suggest its adoption
We find for all of these reasons that the challenged portions of H.B. 2017
COSTS AND FEES
Because we reverse, we need not consider whether the trial court erred in awarding, as taxable costs to appellees, the deposition copy charges that they paid.
Appellants request an award of attorneys' fees against appellees for services performed on appeal and in the trial court under the private attorney general doctrine adopted in Arnold v. Arizona Department of Health Services,
In Arnold, our supreme court defined the private attorney general doctrine as "an equitable rule which permits courts in their discretion to award attorney's fees to a party who has vindicated a right that: (1) benefits a large number of people; (2) requires private enforcement; and (3) is of societal importance." 160 Ariz. at 609, 775 P.2d at 537. Each of these criteria is met. The right that appellants have pressed belongs to the state itself. Its vindication benefits large numbers of Arizonans and is of great societal importance. And because its vindication required a direct challenge to a statute adopted by the Arizona Legislature, the right could only have been privately enforced. In our discretion, we award appellants their reasonable attorneys' fees incurred in the trial court and on appeal.
We award these fees not only against the public entities among the appellees but also against the private appellees. Contrary to their argument, we do not find that the exclusive purpose of the private attorney general doctrine is to impose the cost of vindicating public rights on the public itself. Awarding attorneys' fees against private defendants in appropriate cases will promote important public rights to the same extent as awarding fees against governmental defendants. Moreover, we find no unfairness in requiring the intervenor-appellees to share with the state the burden of appellants' partial victory in this case. The intervenor-appellees came to the state's aid to promote interests of their own that were more specific and substantial than those of members of the general public. And as the record makes quite plain, their participation added significantly to the legal effort required to prosecute appellants' claims.
We also reject the assertion that appellants forfeited the right to attorneys' fees against the intervenor-appellees by failing to explicitly seek such fees in the trial court. Appellants' complaint sought a "judgment against the defendants" that encompassed five categories of relief, including attorneys' fees. The intervenor-appellees later sought and were granted intervention as "defendants." It would be hypertechnical and unjust to preclude appellants from recovering attorneys' fees that they have earned, merely for failure to amend their complaint to expressly include
We hold that H.B. 2017 violates the public trust doctrine and Ariz.Const. art. IX, § 7. We award appellants reasonable attorneys' fees against appellees and intervenor-appellees under the private attorney general doctrine for services rendered in the trial court and on appeal.
The trial court's judgment is reversed, and the matter is remanded with directions to enter judgment and an injunction in favor of appellants in accordance with this opinion.
JACOBSON and TAYLOR, JJ., concur.
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