City of Surprise, an Arizona Municipal Corporation, Petitioner,
Arizona Corporation Commission; Tom Forese, in His Official Capacity As a Member of the Arizona Corporation Commission; Bob Burns, in His Official Capacity As a Member of the Arizona Corporation Commission; Andy Tobin, in His Official Capacity As a Member of the Arizona Corporation Commission; Boyd W. Dunn, in His Official Capacity As a Member of the Arizona Corporation Commission; and Justin Olson, in His Official Capacity As a Member of the Arizona Corporation Commission, Respondents, and Lake Pleasant 5000, L.L.C., an Arizona Limited Liability Company; Harvard Investments, Inc., a Nevada Corporation; and Circle City Water Company, L.L.C., an Arizona Limited Liability Company, Real Parties in Interest.
Special Action from the Arizona Corporation Commission No.
M. Jacobs (argued), Timothy J. Sabo, Snell & Wilmer
L.L.P., Phoenix; and Robert Wingo, Surprise City Attorney,
Surprise, Attorneys for City of Surprise.
M. Kvesic (argued), Robin R. Mitchell, P. Robyn Poole,
Arizona Corporation Commission Legal Division, Phoenix,
Attorneys for Arizona Corporation Commission, Commissioner
Tom Forese, Commissioner Bob Burns, Commissioner Andy Tobin,
Commissioner Boyd W. Dunn, and Commissioner Justin Olson.
S. Zeitlin (argued), Zeitlin & Zeitlin, P.C., Phoenix;
and Garry D. Hays, Law Offices of Garry Hays, Phoenix,
Attorneys for Lake Pleasant 5000, L.L.C. and Harvard
H. Grabel (argued), Osborn Maledon, P.A., Phoenix, Attorney
for Circle City Water Company, L.L.C.
Christina Estes-Werther, General Counsel, League of Arizona
Cities and Towns, Phoenix, Attorney for Amicus Curiae League
of Arizona Cities and Towns.
CHIEF JUSTICE BRUTINEL authored the opinion of the Court, in
which CHIEF JUSTICE BALES and JUSTICES TIMMER, GOULD, LOPEZ
and PELANDER (Retired) joined. JUSTICE BOLICK filed an
opinion concurring in part and dissenting in part.
BRUTINEL VICE, CHIEF JUSTICE
The Arizona Corporation Commission ("Commission")
has broad authority under A.R.S. § 40-285(A) to approve
the sale or disposition of a public service corporation's
assets. In this special action, we hold that § 40-285(A)
does not give the Commission power over a city's exercise
of eminent domain. Accordingly, we vacate the portion of the
Commission's March 30, 2018 order requiring the public
utility to apply for Commission approval of the proposed
In October 2017, the City of Surprise ("City")
entered into a letter of intent with Circle City Water
Company, L.L.C. ("Circle City"), documenting the
City's intent to condemn substantially all the assets of
Circle City, including the right to almost four thousand
acre-feet of water per year from the Central Arizona Project
("CAP"). Pursuant to statute, Surprise voters
authorized the condemnation and the Surprise City Council
approved the filing of a condemnation action. A residential
developer contends that Circle City is obliged under an
existing contract to allocate its CAP water for a planned
development. Upon inquiry by the developer, the City advised
that it has no obligation to provide water under the existing
contract. The developer then asked the Commission to enter an
order preventing the sale of Circle City's CAP allocation
to the City.
The Commission opened an investigation. On March 30, 2018,
the Commission ordered Circle City to file an application
under § 40-285 and Arizona Administrative Code
("A.A.C.") R14-2-402(D), seeking Commission
authorization "to abandon, sell, lease, transfer, or
otherwise dispose of its utility." At the time of the
order, the Commission was aware that the negotiations between
the City and Circle City were intended to result in
condemnation, not a sale. Circle City filed the application
under protest. Commission staff determined that Circle City
did not fully comply with the March 30 order by failing to
include a copy of the draft condemnation agreement between
Circle City and the City. At the Commission's direction,
Circle City provided a copy of the draft agreement under
seal. The Commission then required Circle City to confirm in
writing whether the City would assume Circle City's water
contract with the developer.
Shortly thereafter, the City filed this special action,
alleging the Commission acted without jurisdiction in
entering the March 30 order. This Court stayed further
administrative proceedings pending resolution of this case.
We accepted jurisdiction over this special action to clarify
the scope of the Commission's authority over eminent
domain proceedings pursuant to A.R.S. § 40-285(A). We
have jurisdiction pursuant to article 6, section 5(1) of the
Arizona Constitution and A.R.S. §§ 12-2001 and
This Court has original jurisdiction to issue "mandamus,
injunction and other extraordinary writs to state
officers." Ariz. Const. art. 6, § 5(1); see
also A.R.S. §§ 12-2001, -2021. Such
jurisdiction is discretionary and is requested through a
special action petition. Dobson v. State ex rel.
Comm'n on Appellate Court Appointments, 233 Ariz.
119, 121 ¶ 6 (2013). Special action jurisdiction is
appropriate in cases that involve "purely legal
questions of statewide importance" or that require an
"immediate and final resolution," id. at
121 ¶¶ 7-8, and particularly appropriate when a
defendant "has proceeded or is threatening to proceed
without or in excess of jurisdiction or legal
authority," Ariz. R.P. Spec. Act. 3(b). But special
action jurisdiction is not appropriate when parties have an
"equally plain, speedy, and adequate remedy by
appeal." Id. 1(a).
Here, the scope of Commission authority involves a purely
legal question of statutory interpretation: whether the
Commission has exceeded its statutory authority. The City
cannot presently appeal the Commission's order because it
is not a party to the administrative proceedings, and the
City has no other means to challenge the Commission's
actions. For those reasons, special action review is
appropriate. See Ariz. Corp. Comm'n v. State ex rel.
Woods,171 Ariz. 286, 288 (1992) (granting special
action review because "this court can best serve the