Arizona Court of Appeals Division One holds a party cannot collaterally attack an agency’s jurisdiction where the party previously challenged jurisdiction in an administrative proceeding but failed to timely appeal the agency’s decision.

In 2014, the Citizens Clean Election Commission assessed a civil penalty against Legacy Foundation Action Fund, a non-profit political advertiser, for violating the Citizens Clean Elections Act.  Legacy sought administrative review of the Commission’s subject-matter jurisdiction to impose the penalty but was unsuccessful.  Legacy then sought judicial review.  The trial court dismissed Legacy’s action as untimely, citing the statutory fourteen-day window to appeal an agency decision.  The trial court’s decision was affirmed by both the Arizona Court of Appeals and the Arizona Supreme Court.

Legacy then sought special action in the trial court to collaterally attack the Commission’s jurisdiction.  The trial court dismissed the action.  The Court of Appeals affirmed, holding that a party cannot collaterally attack an agency’s jurisdiction where the party previously challenged jurisdiction in an administrative proceeding but failed to timely appeal the agency’s decision.

The Court explained that although an agency’s jurisdiction is generally vulnerable to challenge in a collateral proceeding, such an attack is precluded under the doctrine of res judicata where the complaining party forfeited its right to timely appeal.  Because Legacy litigated subject-matter jurisdiction in the administrative proceeding, and because Legacy failed to timely appeal the final merits ruling, it could not raise the issue again in a new proceeding.

The Court explained that neither of the exceptions to claim preclusion applied here, because the Commission’s jurisdiction over this class of case was not a “manifest abuse of authority” nor did it “infringe the authority” of any other tribunal or agency.  The Court further found that infringement upon free speech rights was not a recognized exception to claim preclusion.

The dissent disagreed with the majority’s analytical approach and reliance on the Restatement of Law.  The dissent framed the issue as one of “finality” versus “validity,” arguing jurisdictional challenges—which cannot be waived or stipulated to—should not be barred by claim preclusion.

Judge Howe authored the opinion of the Court, in which Chief Judge Cattani joined.  Judge Bailey dissented.