Judges don’t often tell defendants that their actions were wrong and permissible at the same time. But the Arizona Supreme Court lately has tended to say, “You can do that this time, but never again.”
Twice in the past year, Supreme Court justices have let unconstitutional actions slide while sending a message that those same actions won’t be tolerated in the future. Such rulings, given the label “prospective” rather than “retroactive,” are rarely used – especially in high-profile cases.
Last month, the state’s highest court allowed Phoenix to give a $97 million tax break to a shopping mall developer, while also ruling that government subsidies of that nature violate the state Constitution’s gift clause.
In June, the court let the Legislature off the hook after lawmakers had withheld budget bills from the governor during a political dispute. The court decided the Legislature in the future must send bills to the governor immediately after passing them, but didn’t force the Legislature to do so in the situation that led to the court battle.
Arizona State University professor Paul Bender, an expert in state constitutional law, said the court used a prospective-only ruling in the case between the Legislature and the governor as a way to dodge a politically charged decision.
“They ended up pretending to decide something, not really deciding anything that’s going to change anything,” Bender said. “To me … that is sort of dodging responsibilities, in a way.”
Andy Hessick, also a professor at ASU’s Sandra Day O’Connor College of Law, said the argument against prospective rulings is that they allow courts to essentially create new laws, as opposed to simply interpreting old ones.
“When you have a prospective-only ruling, what you’re doing is saying … we’re not going to apply it to this case. And what this means is the court is deciding a case not based on the rule of law that it’s announcing,” Hessick said.
Though the U.S. Supreme Court mostly abandoned the practice in 1987, most state constitutions do not include the same strict judicial guidelines as the ones included in the U.S. Constitution, Hessick said.
It’s odd, legal experts said, for prospective rulings to be handed down in two major cases that occurred within a short period. Arizona Supreme Court research staff provided records of two cases that were decided by prospective rulings, one in 1988 and the other in 1990, but could not find any others. Interviews with more than a dozen attorneys, legal experts and law professors turned up memories of only five prospective rulings by the Arizona Supreme Court during the past
Former Arizona Chief Justice Stanley Feldman said such decisions are so rare because most cases simply apply the law to the facts of a case. A prospective ruling requires a case in which a new interpretation of a law is required while also meeting the handful of criteria that give courts discretion to avoid a retroactive ruling.
“When you announce a new interpretation or a new rule of law, or clarify an old rule of law, then you are doing something different and new. And that’s the kind of situation in which opinions are sometimes made prospective only,” he said. “They could have three cases like that in one month and they could wait five more years for another one. It just depends upon what the facts of the particular case are.”
Attorneys who focus on constitutional law said the more frequent use of prospective rulings is less about a change in philosophy among the Supreme Court justices and more about the unique circumstances that led to the recent two cases. Yet such rulings might be used more frequently in the future because of the nature of some of the cases now pending before the court.
Attorney Lee Miller said a combination of creative budget solutions by the state and more public policy-based lawsuits filed by organizations such as the Goldwater Institute might lead the Arizona Supreme Court to establish new precedents, but in a way that will avoid harming people who relied on the old one.
“Goldwater is a different type of plaintiff. Goldwater is a plaintiff … whose goal is to get cases before the Supreme Court and create case law that will extend far,” Miller said. “The state is broke, and when government is broke, it makes it much harder to reach decisions and it makes it much harder to find the resources to try and satisfy all the aggrieved parties.
Several cases have been filed to challenge the state’s decision to raid money from funds that were established for a specific purpose.
The Arizona Supreme Court in December refused to hear a case challenging the state’s authority to take $5.4 million from an account held by the Central Arizona Water Conservation District. The district later re-filed the suit in Maricopa County Superior Court, and could eventually end up back on the Supreme Court’s docket.
If the Supreme Court rules that action – or other fund sweeps – unconstitutional, Miller said the ruling would almost certainly be prospective because the money will have already been spent.
A similar situation could occur in regard to the Arizona Constitution’s $350,000 debt limit. The state essentially mortgaged its Capitol and other government buildings for $735 million to raise cash, and is proposing another sale-leaseback agreement worth $300 million. The Legislature also has decided to issue $500 million in bonds that will be repaid using future Arizona Lottery revenue.
Clint Bolick, executive director of the Scharf-Norton Center and one of the plaintiffs in the CityNorth case, said the Goldwater Institute might sue the state for violating the debt limit. If the Supreme Court agrees that those actions violated the debt clause, it would likely have to issue a prospective ruling because it would be difficult for the state to return money it already has spent.
“The state is obviously in the middle of a debt crisis, and it may be difficult for the court to make decisions that would destabilize the situation further,” Bolick said. “But they may want to take on the core issues.”
Tim Berg, an attorney with the law firm Fennemore Craig, said the strategy of using the courts to bring about changes to public policy has gained strength since the U.S. Supreme Court’s landmark 1954 ruling in Brown v. Board of Education. During the past 15 to 20 years, he said, more public-interest law groups have been established, which has led to a more concerted effort to challenge the mechanics of government.
The Goldwater Institute, for example, has filed 12 cases in Arizona since it opened its litigation center in 2007.
“You see people fighting over whether referendum petitions can get on the ballot. You see people fighting over things like can the Legislature refuse to send the budget to the governor. You see people fighting about (questions like) can the governor have a line-item veto,” Berg said. “The thing about courts is they’re reactive bodies. A court can’t reach out and change anything until someone brings a case.”
One of the predominant factors courts consider when they issue prospective-only rulings is the harm that may come from applying a ruling retroactively.
In CityNorth, the court ruled that a previous ruling on the gift clause had been confusing and had led the city of Phoenix to believe its agreement with the Klutznick Co., which built the development, was legal. Therefore, the justices ruled, applying the new rule retroactively would be unfair to all government entities and business interests that had entered into agreements based on their prior understanding of the gift clause. Applying the ruling retroactively would have likely cost those entities millions of dollars.
Kim Demarchi, an appellate lawyer with the firm Lewis & Roca, said, “(The court is) setting up a system for everybody, including the people who never get all the way to that level to present their dispute. So they have to be worried about how the rules apply to everybody, and I think people forget that about the justice system sometimes.”
Bolick said he would have preferred to see the court strike down the Phoenix’s agreement with the Klutznick Co., but was willing to sacrifice that for the purpose of establishing a binding new case law.
The issues that led the prospective-only ruling in the CityNorth could apply to future cases on fund sweeps and the state debt limit as well.
But the situation was different in Brewer’s case against the Legislature.
Some experts say the Arizona Supreme Court’s decision to issue a prospective ruling in that case was based on a desire to not interfere with its co-branches of government.
“The court, I’m sure, really would have preferred not to have been drug into the middle of the legislative branch and the executive branch,” Miller said.
Attorney Paul Eckstein of Perkins, Coie, Brown & Bain said he doesn’t really even consider that ruling prospective because the court’s justification for not forcing the Legislature to transmit the disputed budget bills was their argument that it was mostly irrelevant – the bills were to be transmitted in a matter of days, regardless of the ruling.