SABAN RENT-A CAR LLC, et al., Plaintiffs/Appellees/Cross-Appellants,
ARIZONA DEPARTMENT OF REVENUE, Defendant/Appellant/Appellee/Cross-Appellee, TOURISM AND SPORTS AUTHORITY, Defendant-in-Intervention/Appellant/Cross-Appellee.
from the Arizona Tax Court No. TX2010-001089 The Honorable
Dean M. Fink, Judge The Honorable Christopher T. Whitten,
Young, PLC, Phoenix By Taylor C. Young, Robert A. Mandel
Co-Counsel for Plaintiffs/Appellees/Cross-Appellants Saban et
Kickham, Hanley, PLLC, Royal Oak, MI By Gregory D. Hanley,
pro hac vice Co-Counsel for
Plaintiffs/Appellees/Cross-Appellants Saban et al.
Schenk, Hawkins & Ricciardi, PC, Phoenix By Shawn K.
Aiken Co-Counsel for Plaintiffs/Appellees/Cross-Appellants
Saban et al.
Arizona Attorney General's Office, Phoenix By Kimberly J.
Cygan, Jerry A. Fries Co-Counsel for
Maledon, PA, Phoenix By Thomas L. Hudson, Eric M. Fraser
Co-Counsel for Defendant/Appellant/Appellee/Cross-Appellee
Fennemore Craig, PC, Phoenix By Timothy J. Berg, Theresa
Dwyer, Emily Ayn Ward Co-Counsel for
Dickinson Wright, PLLC, Phoenix By Scot L. Claus, Vail C.
Cloar Co-Counsel for
Roca, Rothgerber, Christie, LLP, Phoenix By Robert G.
Schaffer Counsel for amici curiae Halikowski and ADOT
Gammage & Burnham, PLC, Phoenix By Michael R. King,
Cameron C. Artigue, Christopher L. Hering Counsel for amici
curiae Convention and Visitors Bureaus
County Attorney's Office, Tucson By Regina L. Nassen
Counsel for amicus curiae Pima County
Gallagher & Kennedy, PA, Phoenix By Michael K. Kennedy,
Mark C. Dangerfield Counsel for amicus curiae Arizona Chamber
Perkins Coie, LLP, Phoenix By Paul F. Eckstein, Thomas D.
Ryerson Counsel for amicus curiae City of Phoenix
Diane M. Johnsen delivered the opinion of the Court, in which
Presiding Judge Lawrence F. Winthrop and Judge Maria Elena
A class of car-rental companies sued to invalidate a
surcharge enacted to build sports facilities to be owned by
the Arizona Tourism and Sports Authority ("AzSTA").
The car-rental companies argued the surcharge is invalid both
under Article IX, Section 14 of the Arizona Constitution and
under the Dormant Commerce Clause implied by the United
States Constitution. The tax court ruled the surcharge was
invalid under the Arizona Constitution (but not under the
Dormant Commerce Clause) and ordered a refund.
For reasons explained below, we reverse the tax court's
order granting summary judgment to the car-rental companies
under the Arizona Constitution and direct entry of judgment
in favor of the Arizona Department of Revenue
("ADOR") and AzSTA on that claim. We affirm the
judgment in favor of ADOR and AzSTA under the Dormant
Commerce Clause. Because we conclude the surcharge is not
invalid under either constitutional provision, we reverse the
tax court's refund order.
AND PROCEDURAL BACKGROUND
AzSTA is a "corporate and political body" the
legislature created in 2000. Ariz. Rev. Stat.
("A.R.S.") § 5-802 (2018). By statute,
AzSTA's "boundaries" are those "of any
county that has a population of more than two million
persons, " meaning (then and now) Maricopa County.
A.R.S. § 5-802(A). The legislature directed AzSTA to
build and operate a "[multipurpose facility" - a
stadium/events center - that could accommodate a professional
football team, a college bowl game, and "other sporting
events and entertainment, cultural, civic, meeting, trade
show or convention events[.]" A.R.S. §§
5-801(4) (2018) (defining "multipurpose facility"),
-804(A) (2018), -807 (2018), -815 (2018) (powers of AzSTA).
The legislature also granted AzSTA the power to contract to
host the Super Bowl and college football national
championship and playoff games and to build Major League
Baseball spring-training facilities and youth and amateur
sports and recreational facilities. A.R.S. §§ 5-808
(2018), -809 (2018).
Although AzSTA may charge for use of its facilities, it
cannot levy taxes or assessments to build those facilities.
A.R.S. § 5-802(C). Instead, the legislature authorized
Maricopa County voters to approve taxes to fund AzSTA's
construction projects. See id. Among the taxes the
legislature authorized voters to impose is the one challenged
here: A surcharge on the gross proceeds of car-rental
businesses. See A.R.S. § 5-839(B) (2018).
Maricopa County voters approved the car-rental surcharge
authorized by § 5-839 in November 2000, just months
after the legislature established AzSTA. As authorized,
the surcharge is the greater of 3.25 percent "of the
gross proceeds or gross income from the business" or
$2.50 per car rental, payable by the car-rental business, not
the customer. A.R.S. § 5-839(B)(1). If a customer rents
a vehicle as a "temporary replacement" for another
vehicle, the surcharge charged the car-rental company is a
flat $2.50. See A.R.S. §
In August 2009, Saban Rent-A-Car, Inc. sought a refund of
amounts it had paid under § 5-839, claiming the
surcharge violated Article IX, Section 14 of the Arizona
Constitution and the Dormant Commerce Clause implied by the
U.S. Constitution. After ADOR denied the refund and that
decision was upheld on administrative review, Saban
challenged the ruling in the tax court, seeking injunctive
relief and a refund on behalf of a class of all similarly
situated car-rental companies. The court granted AzSTA leave
to intervene as a defendant, then certified a class of all
businesses that paid the surcharge from September 2005
through March 2008.
After discovery, the tax court ruled on cross-motions for
summary judgment that although the surcharge did not violate
the Dormant Commerce Clause, it was invalid under Article IX,
Section 14 of the Arizona Constitution. The court ruled that
ADOR would have to refund the tax to class members but could
recoup the amount of the refund, over time, from AzSTA
pursuant to A.R.S. § 42-5029(G) (2018). The court
granted ADOR's motion for entry of judgment pursuant to
Arizona Rule of Civil Procedure 54(b), leaving the amount of
the refund to be determined.
We have jurisdiction of the parties' various appeals and
cross- appeal from the Rule 54(b) judgment pursuant to
Article VI, Section 9 of the Arizona Constitution and A.R.S.
§ 12-2101(A)(6) (2018). See Empress Beauty Supply,
Inc. v. Price, 116 Ariz. 34, 35 (App. 1977) (Rule 54(b)
appropriate when "the only question remaining to be
resolved is the amount of recovery") (quotations
Standard of Review.
We review de novo the grant of a motion for summary
judgment. See Tierra Ranchos Homeowners Ass'n v.
Kitchukov, 216 Ariz. 195, 199, ¶ 15 (App. 2007).
Summary judgment is appropriate when "there is no
genuine dispute as to any material fact and the moving party
is entitled to judgment as a matter of law." Ariz. R.
Civ. P. 56(a). Although a party ordinarily may not appeal an
order denying summary judgment, see, e.g., Fleitz v. Van
Westrienen, 114 Ariz. 246, 248 (App. 1977), the court of
appeals may review the denial of a motion for summary
judgment if the superior court denied the motion on a point
of law, Strojnik v. Gen. Ins. Co. of America, 201
Ariz. 430, 433, ¶ 11 (App. 2001).
Article IX, Section 14 of the Arizona
In relevant part, Article IX, Section 14 of the ...