Baier v. Mayer Unified School District – 5/18/2010

May 26, 2010

Arizona Court of Appeals Division One Holds That School Districts are Barred From Challenging the Constitutionality of the State Land Commissioner’s Decision to Honor an Easement Granted Without Compensation.

In September 2006, the State Land Commissioner (“Commissioner”) and the Flood Control District of Maricopa County (“FCD”) entered into a settlement agreement through which they resolved a dispute concerning an easement over state trust land granted without compensation to FCD in 1964.  Pursuant to the settlement, the FCD returned 13,000 acres of land subject to the original easement and retained 6,000 acres for the operation and maintenance of dams.  When FCD and the Commissioner sought court approval of the settlement, several school districts intervened to object.  The school districts argued that the settlement violated the Enabling Act because the settlement granted land to FCD in the absence of compensation and a public auction.  The school districts also claimed that the settlement was imprudent.  The trial court overruled the school districts’ objections and this appeal followed.

The Arizona Appeals Court affirmed the trial court’s rejection of the school districts’ objections.  The Court concluded that the Arizona Supreme Court’s decision in Mayer Unified School District v. Winkelman, 219 Ariz. 562, 201 P.3d 523 (2009) precluded the school districts from challenging the constitutionality of the settlement agreement.  In that case, the Arizona Supreme Court concluded that the school districts were time barred from challenging pre-1967 easements made without compensation because those claims accrued when the State Land Department originally granted the easements.  The Appeals Court reasoned that the school districts’ arguments here were essentially the same as those rejected in Mayer – that the settlement agreement is unconstitutional because of the Commissioner’s failure to obtain compensation for the easement – and thus were precluded.  The Appeals Court also concluded that the settlement agreement was not imprudent because, although the Commissioner failed to appraise the state trust land, he determined that the 13,000 acres to be returned had substantial value, considered the pros and cons of trying to establish the easements and took into account the potential effect of litigation on the Land Department’s business relationships.

Judge Norris authored the opinion; Judges Barker and Swann concurred.