Brush & Nib Studio, LC v. City of Phoenix

          Appeal from the Superior Court in Maricopa County No. CV2016-052251 The Honorable Karen A. Mullins, Judge

          Alliance Defending Freedom, Scottsdale By Jeremy D. Tedesco, Jonathan A. Scruggs, Samuel D. Green Co-Counsel for Plaintiffs/Appellants/Cross-Appellees

          Helm, Livesay & Worthington, Tempe By Roberta S. Livesay Co-Counsel for Plaintiffs/Appellants/Cross-Appellees

          Osborn Maledon, P.A., Phoenix By Colin F. Campbell, Eric M. Fraser, Joshua David Rothenberg Bendor Co-Counsel for Defendant/Appellee/Cross-Appellant

          Phoenix City Attorney's Office, Phoenix By Brad Holm, Heidi E. Gilbert Co-Counsel for Defendant/Appellee/Cross-Appellant

          Margrave Celmins, P.C., Scottsdale By Michael Kitchen Counsel for Amici Curiae Constitutional Jurisprudence

          Law Offices of Kevin L. Beckwith, P.C., Phoenix By Kevin Beckwith Counsel for Amici Curiae Law and Economics Scholars

          Center for Arizona Policy, Phoenix By William M. Clark Co-counsel for Amici Curiae Center for Religious Expression and Center for Arizona Policy Center for Religious Expression, Memphis, Tennessee By Nathan W. Kellum, appearing pro hac vice Co-counsel for Amici Curiae Center for Religious Expression and Center for

          Arizona Policy Joshua Carden Law Firm, P.C., Scottsdale By Joshua Carden Co-counsel for Amici Curiae Coalition for Jewish Values, Ethics and Religious Liberty Commission, Jews for Religious Liberty, and The Rabbinical Alliance of America, Inc. Perkins Coie LLP, Phoenix By Daniel C. Barr, Barry Grant Stratford, Katherine Elizabeth May Counsel for Amicus Curiae Arizona Businesses Mayes Telles PLLC, Phoenix By Jessica Hernandez Co-counsel for Amicus Curiae Lambda Legal Defense and Education Fund, Inc.

          Lambda Legal Defense and Education Fund, Inc., Los Angeles, California By Jennifer C. Pizer, Nancy C. Marcus, both appearing pro hac vice Co-counsel for Amicus Curiae Lambda Legal Defense and Education Fund, Inc.

          American Civil Liberties Union, Phoenix By Kathleen E. Brody Co-counsel for Amici Curiae American Civil Liberties Union, American Civil Liberties Union of Arizona, Arizona Trans Youth & Parent Organization, Equality Arizona, GLSEN Phoenix, Human Rights Campaign, One n Ten, Phoenix Pride, Southern Arizona AIDS Foundation, Southern Arizona Gender Alliance, Southern Arizona Senior Pride, Trans Queer Pueblo, Trans Spectrum of Arizona

          American Civil Liberties Union, New York, New York By Brian Hauss, appearing pro hac vice Co-counsel for Amicus Curiae American Civil Liberties Union, American Civil Liberties Union of Arizona, Arizona Trans Youth & Parent Organization, Equality Arizona, GLSEN Phoenix, Human Rights Campaign, One n Ten, Phoenix Pride, Southern Arizona AIDS Foundation, Southern Arizona Gender Alliance, Southern Arizona Senior Pride, Trans Queer Pueblo, Trans Spectrum of Arizona

          Presiding Judge Lawrence F. Winthrop delivered the opinion of the Court, in which Judge Jennifer B. Campbell and Judge Paul J. McMurdie joined.

          OPINION

          WINTHROP, PRESIDING JUDGE

         ¶1 Joanna Duka and Breanna Koski ("Appellants") are the owners of Brush & Nib Studio, LC ("Brush & Nib"). Appellants filed a pre-enforcement action against the City of Phoenix ("Phoenix") challenging the constitutionality of Phoenix City Code 18-4(B) ("Section 18-4(B)") and seeking a preliminary injunction to bar enforcement of the ordinance. Appellants appeal the superior court's denial of their preliminary injunction and grant of summary judgment in favor of Phoenix. For the following reasons, we affirm as modified.

         FACTS AND PROCEDURAL HISTORY

         ¶2 Brush & Nib is a for-profit limited liability company, which sells pre-fabricated and design artwork for home décor, weddings, and special events. Appellants provide retail goods and services to the public and acknowledge they operate a place of public accommodation as defined in Phoenix City Code § 18.^[1]

         ¶3 Appellants are devout Christians and believe their work is inextricably related to their religious beliefs. Appellants' goods and services include both customer-directed projects (work created through a consultation between Appellants and their customer) and pre-fabricated merchandise (work created without Appellants' knowledge of how the items will be used or who will use those products).^[2] Appellants believe their customer-directed and designed wedding products "convey messages about a particular engaged couple, their upcoming marriage, their upcoming marriage ceremony, and the celebration of that marriage." Appellants also strongly believe in an ordained marriage between one man and one woman, and argue that they cannot separate their religious beliefs from their work. As such, they believe being required to create customer-specific merchandise for same-sex weddings will violate their religious beliefs.

         ¶4 Appellants want to be able to legally refuse to create custom- made merchandise for all same-sex weddings. Additionally, Appellants desire to post a public statement explaining their religious beliefs. Appellants' proposed statement, in part, would notify potential customers that "Brush & Nib Studio won't create any artwork that violates [their] vision as defined by [their] religious and artistic beliefs and identity, " which includes "artwork that demeans others, endorses racism, incites violence, contradicts [their] Christian faith, or promotes any marriage except marriage between one man and one woman." Appellants have not posted this statement because they believe it would violate Section 18-4(B). Instead, Appellants sought a preliminary injunction to bar Phoenix from enforcing Section 18-4(B) and a declaration that Section 18-4(B) violates the Arizona Constitution's free speech clause, religious toleration clause, equal protection clause, due process clause, and the Arizona Free Exercise of Religion Act ("FERA").^[3]

         ¶5 Phoenix filed a motion to dismiss and the case proceeded to a bench trial before the superior court. The superior court denied Phoenix's motion to dismiss, finding Appellants had standing and the case was justiciable. The court then denied Appellants' motion for a preliminary injunction, finding Section 18-4(B) did not violate Appellants' freedom of speech nor substantially burden their exercise of religion. Appellants timely appealed the denial of the preliminary injunction to this court and moved to stay proceedings before the superior court. The court denied Appellants' request. Appellants then moved, and Phoenix cross-moved, for summary judgment. The court granted Phoenix's motion for summary judgment on all claims. Appellants filed a timely appeal from the court's summary judgment ruling and moved to consolidate that appeal with the appeal from the denial of the preliminary injunction.^[4] We granted Appellants' request, and have jurisdiction over this consolidated appeal pursuant to Article 6, Section 9, of the Arizona Constitution, and Arizona Revised Statutes ("A.R.S.") sections 12-120.21(A)(1) (2016) and 12-2101(A)(1) (2016).

         ANALYSIS

         ¶6 Arizona courts have long upheld the public's right to participate in society without fear of discrimination. See Phillips v. Phoenix Union High Schs., Maricopa Cty. Super. Ct. No. 72909 (1953) (enjoining Phoenix Union High Schools from segregating pupils based on race); accord, Heard v. Davis, Maricopa Cty. Super. Ct. No. 77497 (1954). The Phillips court expressly found that "democracy rejects any theory of second-class citizenship" and that "[a] half century of intolerance is enough." Id.; see also Paul Rees, A Civil Rights Victory, Pre-Loving, 53 Ariz. Att'y 84 (Aug. 2017) (noting that Arizona repealed its anti-miscegenation law before the United States Supreme Court found such laws unconstitutional).

         ¶7 In 2014, however, the Arizona legislature sought to amend FERA to expand the definition of a protected person from "a religious assembly or institution" to "any individual, association, partnership, corporation, church, religious assembly or institution, estate, trust, foundation or other legal entity." S.B. 1062, 2014 Leg., 51st 2d. Reg. Sess. (Ariz. 2014). Although S.B. 1062 was ultimately vetoed, it was viewed by some as a reaction to the development of antidiscrimination ordinances, which included sexual orientation as a protected class, and the national trend in favor of granting broader rights to same-sex couples. Dinita L. James, Amid SB 1062 Frenzy, Tempe Becomes 4th AZ City to Protect LGBT Status, 20 No. 11 Ariz. Emp. L. Letter 1 (2014).

         ¶8 Currently, nineteen states have enacted public accommodation antidiscrimination laws which include sexual orientation and gender identity as protected classes. See Equality Maps/Non-Discrimination Laws, Movement Advancement Project (2018), http://www.lgbtmap.org/equality-maps/non_discrimination_laws. Arizona's public accommodation antidiscrimination statute, however, does not specifically include sexual orientation as a protected class. See A.R.S. § 41-1442(A) (2017). Accordingly, several Arizona cities have enacted broader ordinances to prohibit discrimination based on sexual orientation in places of public accommodation. See Tempe Code Ch. 2 Art. VIII § 2-601 (2014); Flagstaff Code Ch. 14 § 14-02-001-0001 (2013); Tucson Code Art. II § 17-1 (1999). Like Tempe, Flagstaff, and Tucson, Phoenix's Code, Section 18-4(B), as amended in 2013, prohibits discrimination in places of public accommodation based on sexual orientation. Section 18-4(B) provides that:

No person shall, directly or indirectly, refuse, withhold from, or deny to any person, or aid in or incite such refusal, denial or withholding of, accommodations, advantages, facilities or privileges thereof because of race, color, religion, sex, national origin, marital status, sexual orientation, gender identity or expression, or disability nor shall distinction be made with respect to any person based on race, color, religion, sex, national origin, marital status, sexual orientation, gender identity or expression, or disability in connection with the price or quality of any item, goods or services offered by or at any place of public accommodation.

It is unlawful for any owner, operator, lessee, manager, agent or employee of any place of public accommodation to directly or indirectly display, circulate, publicize or mail any advertisement, notice or communication which states or implies that any facility or service shall be refused or restricted because of race, color, religion, sex, national origin, marital status, sexual orientation, gender identity or expression, or disability or that any person, because of race, color, religion, sex, national origin, marital status, sexual orientation, gender identity or expression, or disability would be unwelcome, objectionable, unacceptable, undesirable or not solicited.

Phoenix City Code § 18-4(B)(2)-(3) (2013).^[5]

         ¶9 On appeal, Appellants raise a myriad of constitutional issues, arguing that Section 18-4(B) is unconstitutional, both on its face and as-applied, and that any enforcement of Section 18-4(B) would violate their First Amendment right to free speech and free exercise of religion under state law. Appellants are not the first to attempt to use their religious beliefs to justify practices others consider overtly discriminatory. See Bob Jones Univ. v. United States, 461 U.S. 574 (1983) (finding a school, which prohibited interracial dating and marriage, could no longer receive tax-exempt status). Although the law has at times recognized religious beliefs as justification for discriminatory practices, ^[6] modern societal trends are to the contrary. See McLaughlin v. Jones, 243 Ariz. 29, 33, ¶ 13 (2017) ("Denying same-sex couples 'the same legal treatment' in marriage . . . and 'all the benefits' afforded opposite-sex couples, 'works a grave and continuing harm' on [same-sex couples] in various ways - demeaning them, humiliating and stigmatizing their children and family units, and teaching society that they are inferior in important respects." (citing Obergefell v. Hodges, 135 S.Ct. 2584, 2600-02, 2604 (2015)); see also Lawrence v. Texas, 539 U.S. 558, 575 (2003) (finding when the state criminalizes same-sex couples' conduct it "is an invitation to subject homosexual persons to discrimination both in the public and in the private spheres").

         ¶10 While this case may be the first of its kind in Arizona, Brush & Nib is only one of numerous national litigants who seek to preserve and define their religious freedoms in the face of ordinances which prohibit places of public accommodation from discriminating based on sexual orientation. See Elane Photography, LLC v. Willock, 309 P.3d 53 (N.M. 2013) (finding a photographer's refusal to take photographs of a same-sex wedding violated New Mexico's antidiscrimination laws), cert. denied, 134 S.Ct. 1787 (2014); Craig v. Masterpiece Cakeshop, Inc., 370 P.3d 272 (Colo.App. 2015) (finding Colorado's antidiscrimination statute, which prohibits places of public accommodation from refusing services on the basis of sexual orientation, did not violate the baker's freedom of speech or freedom of religion), cert. denied, No. 15SC738 (Colo. Apr. 25, 2016), reversed on other grounds, Masterpiece Cakeshop, Ltd. v. Colorado Civil Rights Comm'n, No. 16-111, slip op. (U.S. June 4, 2018); Washington v. Arlene's Flowers, Inc., 389 P.3d 543 (Wash. 2017) (finding a florist's refusal to provide custom arranged flowers for a same-sex wedding constituted sexual orientation discrimination and was unlawful under Washington's antidiscrimination law), cert. docketed, No. 17-108 (U.S. Jul. 17, 2017); Telescope Media Grp. v. Lindsey, 271 F.Supp.3d. 1090 (D. Minn. 2017) (finding the Minnesota Human Rights Act, which prohibits places of public accommodation from discriminating based on sexual orientation, does not infringe a business owner's First and Fourteenth Amendment rights); Gifford v. McCarthy, 137 A.D.3d 30 (N.Y.S. 3d. 2016) (finding venue rental owners could not refuse to rent space for a same-sex wedding).

         ¶11 In light of these cases and consistent with the United States Supreme Court's decisions, we recognize that a law allowing Appellants to refuse service to customers based on sexual orientation would constitute a "grave and continuing harm." Obergefell, ...