Cheatham v. DiCiccio – 9/13/2016

October 5, 2016

Arizona Supreme Court holds that release time provision in police union contract does not violate the Gift Clause.

The Gift Clause of the Arizona Constitution prohibits public entities from making any grant or subsidy to private individuals or organizations.  A grant or subsidy does not violate the Gift Clause if it serves a public purpose and the public entity receives adequate consideration in return.

The contract between the City of Phoenix and its Police Department, negotiated by a police union, provides that some officers may be paid to perform certain union duties during “release time.”  Taxpayers sued to enjoin the practice, arguing that it was an improper gift to the police union and violated the Gift Clause.  The trial court issued the injunction, holding that the release time provisions of the contract were a grant or subsidy to the police union and served no public purpose and so violated the Gift Clause.  The Court of Appeals upheld the trial court’s injunction.

The Supreme Court reversed the decision of the Court of Appeals and held that the release time provision did not violate the Gift Clause.  It emphasized that the release time provision must be viewed in light of the entire agreement between the City and the police union.  So viewed, the release time provisions served the public purpose of fostering good labor relations, providing a streamlined negotiation process with officers, and ensuring officers have representation at disciplinary hearings.  The Court could not say, given the small percentage of the overall contract price devoted to release time and the benefits that the City received, that the provision did not provide the City adequate consideration.

The dissent argued that officers’ use of release time was virtually unchecked and that no public purpose was served by diverting police from safeguarding the public in order to do work for the union.  It would have held that when public resources are given to a private entity and could be used for any purpose by that entity, that subsidy cannot be considered compensation and violates the Gift Clause.

Chief Justice Bales delivered the opinion of the Court, joined by Justice Pelander and Judge Howard, sitting by designation from the Court of Appeals, Division Two.  Justice Timmer dissented, joined by Justice Brutinel.  Justice Bolick recused himself.