Fogliano v. State (12/6/2011)

December 13, 2011

Arizona Court of Appeals Division One Holds That Whether the Legislature Complied with Proposition 204’s Directive to Provide Supplemental Funding to the AHCCCS From “Any Other Available Sources” Presents a Political Question Not Appropriate for Judicial Resolution.

In 2000, Arizona voters passed Proposition 204, which amended the statutes dealing with Arizona’s Medicaid agency, the Arizona Health Care Cost Containment System (“AHCCCS”), to substantially expand the number of people eligible to receive health care subsidized by state, county, and federal funds.  Proposition 204 specified that funding for this expansion would come from the Arizona tobacco litigation settlement fund (“TLS fund”).  To ensure that sufficient monies would be available to provide benefits to all persons who are eligible, Proposition 204 further stated that the TLS fund “shall be supplemented, as necessary, by any other available sources including legislative appropriations and federal monies.” 

In early 2011, Governor Jan Brewer and the Legislature initiated a series of measures to reduce the explosive growth of AHCCCS spending.  In April, 2011, the Legislature passed Senate Bill 1612, a general appropriations bill that reduced AHCCCS funding by nearly $1.6 billion.  That same day, Governor Brewer also signed Senate Bill 1619, which authorized AHCCCS to adopt rules necessary to implement a program within available appropriations and establish rules for determining eligibility necessary to implement a program within the available appropriation.  On July 1, 2011, consistent with Senate Bill 1619, AHCCCS implemented a new rule freezing new childless adult enrollment.  In response, Petitioners sued the State and AHCCCS in superior court, requesting declaratory and injunctive relief.   The superior court denied Petitioners the requested relief, holding that the Legislature does not have an enforceable duty to fund Proposition 204.  Petitioners then filed a petition for Special Action.

On appeal, the Arizona Court of Appeals affirmed the superior court’s decision.  The Court of Appeals agreed with Petitioners that Proposition 204, construed as a whole, requires the Legislature to provide supplemental funding, if needed, from other available sources, but concluded that whether the legislature has done so presents a nonjusticiable political question.  In Arizona, “a controversy is nonjusticiable – i.e., involves a political question – where there is a textually demonstrable constitutional commitment of the issue to a coordinate political department; or a lack of judicially discoverable and manageable standards for resolving it.”  Nixon v. United States, 506 U.S. 224, 228 (1993) (internal citation omitted).  In this case, the Court of Appeals concluded that the determination whether other sources are available for funding is, under the Arizona Constitution, left to the Legislature, not the Judiciary.  Moreover, because there are no judicial discoverable and manageable standards upon which to draw to ascertain whether the Legislature has supplemented the TLS fund with “any other available sources”, the Court concluded that it was ill-equipped to inquire into and second-guess the complexities of decision-making and priority-setting that go into managing the State’s budget.  The Court, therefore, held that whether the Legislature has correctly determined the amounts appropriated for Proposition 204 services include all available sources of funding presents a nonjusticiable political question.

Judge Norris authored the opinion; Judges Brown and Hall concurred.