Home Builders Ass’n v. Kard – 7/8/2008

July 10, 2008

Arizona Court ofAppeals Division One Holds That A.R.S. § 49-497 Confers Standing on an Organization Acting in a Representative Capacity Seeking Declaratory Relief Concerning the Validity or Construction of a County Rule, Even If the Organization Fails to Satisfy a Traditional Standing Analysis.

Home Builders, an association comprised of businesses involved in the home building industry, brought multiple claims against the Maricopa County Air Quality Control Department and other defendants (collectively “Defendants”) related to the issuance of permits for dust-generating operations.  The claims were for damages, injunctive relief, and declaratory relief.  Defendants moved to dismiss for, among other reasons, Home Builders’ lack of standing.  The trial court dismissed the complaint solely for lack of standing, and Home Builders appealed.

The ArizonaAppeals Court affirmed in part and reversed in part.  It first held that Home Builders did not have standing to assert its members’ claims for damages.  The Court explained that Arizona courts’ policy against issuing advisory opinions required it to determine whether the association had a “legitimate interest in an actual controversy involving its members and whether judicial economy and administration will be promoted by allowing representational appearance.”  The Court looked to factors enumerated by United States Supreme Court cases concerning the standing of a representational entity.  Citing Warth v. Seldin, 422 U.S. 490, 515-16 (1975), it explained that Home Builders lacked standing on its damages claim because the damage suffered was neither “common to the entire membership nor shared by all in equal degree.” 

The Court also held that Home Builders failed to satisfy the factors governing standing for injunctive and declaratory relief claims, citing Warth, as well Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992), and Fernandez v. Takata Seat Belts, Inc., 210Ariz. 138, 108 P.3d 917 (2005).  It found that Home Builders failed to refer to any particular project or identify any particular member affected by Defendants’ conduct, and thus did not demonstrate a present and continuing injury sufficient to confer standing.  The Court also explained that Home Builders could not rely on a “vocational or special interest in home-building costs to justify standing,” because it was too speculative to assume that particular members were affected by Defendants’ conduct.  To further support its conclusion, the Court explicitly distinguished Division Two’s recent decision in Home Builders Ass’n of Central Arizona v. City of Maricopa, 215Ariz. 146, 158 P.3d 869 (app. 2007), explaining that specific members, in that case, suffered injuries.

Despite Home Builders’ failure to satisfy the general standard regarding standing in injunctive and declaratory relief claims, the Court held that Home Builders had standing for its declaratory relief claim because such standing was explicitly conferred by A.R.S. § 49-497.  Under the broad language of that statute, Home Builders was a “person” who “maybe” affected by a county rule and therefore was entitled to seek a declaration of a rule’s validity.  The Court noted some tension between § 49-497 and A.R.S. § 12-823, a section of the Uniform Declaratory Judgments Act that has been interpreted to require the existence a justiciable controversy, but concluded that the more specific language of § 49-497 controlled.

The Court rejected Home Builders argument that the standing requirement should be waived because important issues of policy were involved, finding that the issues did not rise to the level of being issues of great importance.  The Court also rejected Defendants contention that the notice of claim statute A.R.S. § 12-821.01 applied, as well as their argument that the trial court should never have accepted special action jurisdiction in the first place. 

Judge Weisberg authored the opinion; Presiding Judge Winthrop and Judge Thompson concurred.