Ariz. Chapter Associated Gen. Contractors of Am. v. City of Phoenix (7/24/2019)

August 7, 2019

Arizona Supreme Court holds that petition circulators for local ballot initiatives may be paid on a per-signature basis.

A political action committee proposed a ballot initiative to amend the Phoenix City Charter to discontinue light rail extensions and redirect the local sales tax funding to infrastructure improvements.  The committee hired petition circulators and paid them on a per-signature basis to obtain the qualifying number of signatures to place the initiative on the ballot.  An association of contractors filed suit to enjoin the initiative.  The contractors argued that the per-signature payments violated A.R.S. § 19-118.01(A) and that the description circulated with the initiative petition created a significant danger of confusion or unfairness.  The superior court denied relief and the Court of Appeals affirmed.  On expedited review, the Supreme Court affirmed through an order on June 12, 2019 followed by this opinion on July 24, 2019.

On the first issue, A.R.S. § 19-118.01(A) prohibits paying petition circulators “based on the number of signatures collected on a statewide initiative or referendum petition” (emphasis added).  But another statute in the same chapter provides that the chapter’s regulations on initiatives, referenda, and recalls also apply “to the legislation of cities, towns and counties, except as specifically provided to the contrary in [article 4 of that chapter].”  A.R.S. § 19-141(A).  Although nothing in article 4 expressly exempts § 19-118.01(A), the Supreme Court held that the payment restriction does not apply to local measures.  The word “statewide” in § 19-118(A) should be given independent meaning.  Applying § 19-141(A) would make the word “statewide” superfluous.  The legislature is presumed to have known about the existence of § 19-141(A) when it later enacted § 19-118.01(A) with a “statewide” restriction.  The two statutes can be harmonized so that § 19-141(A) only applies to statutes without such a “statewide” limitation.  Although one similar statute with a “statewide” restriction also expressly provides that it does not apply to local measures, that may only reflect an abundance of caution.  In another instance, the legislature removed the phrase “statewide ballot measures only” in order to make that statute apply to local measures.  Based on the entire text of § 19-118.01(A), and considering the context of these related statutes, the Court held that the prohibition on per-signature payments to petition circulators does not apply to local initiatives for a city, town, or county.

On the second issue, the Supreme Court explained that the description included on an initiative petition need not be impartial nor detail every provision or potential effect.  The description is only invalid if it is fraudulent or creates a significant danger of confusion or unfairness.  Courts use an objective standard based on the meaning a reasonable person would ascribe to the description.  Here, the contractors raised three issues with the language of the description.  They argued that the word “revenues” in the description incorrectly suggested that the initiative would generate income, but the description’s context shows that the “revenues” are redirected funds from terminating light rail extensions.  Also, the description did not need to mention the purported loss of regional and federal funds because the potential consequences of an initiative are properly left for debate in the political arena.  Finally, the Supreme Court found that the description did not mislead about the alleged termination of funding for repairs to the light rail because the funds diverted are currently dedicated only to light rail extensions, not upkeep.

Justice Timmer authored the opinion, joined by Chief Justice Bales, Justice Bolick, and Justice Gould.