Facilitec, Inc., v J. Elliott Hibbs

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SUPREME COURT OF ARIZONA En Banc FACILITEC, INC., ) ) Plaintiff-Appellee, ) ) v. ) ) J. ELLIOTT HIBBS, in his capacity ) as Director of the Department of ) Administration for the State of ) Arizona, ) ) Defendant-Appellant. ) ) __________________________________) Arizona Supreme Court No. CV-02-0412-PR Court of Appeals Division One No. 1 CA-CV 01-0139 Maricopa County Superior Court No. CV 99-22372 O P I N I O N Appeal from Superior Court of Maricopa County No. CV 99-22372 The Honorable Susan R. Bolton The Honorable Kenneth L. Fields The Honorable Edward O. Burke REVERSED AND REMANDED Opinion of Court of Appeals Division One 204 Ariz. 39, 59 P.3d 803 (App. 2003) VACATED ________________________________________________________________ Fennemore by and and and Attorneys Craig Timothy Berg Keith L. Hendricks Theresa Dwyer Emily Chang for Facilitec, Inc. Terry Goddard, Attorney General by Charles A. Grube, Assistant Attorney General Attorneys for J. Elliott Hibbs, in his capacity as Director of the Arizona Department of Administration Phoenix Phoenix M c G R E G O R, Vice Chief Justice ¶1 We granted review to determine whether the Director of the Arizona Department of Administration (ADOA) may delegate to the Deputy Director authority to make the final decision on the appeal of a procurement protest. affirmative. We answer this question in the We exercise jurisdiction pursuant to Article VI, Section 5.3 of the Arizona Constitution, Rule 23 of the Arizona Rules of Civil Appellate Procedure, and Arizona Revised Statutes (A.R.S.) section 12-120.24 (2003). I. ¶2 ADOA solicited bids on a contract to provide office furniture to the state and awarded the contract to a bidder other than the appellee, Facilitec, Inc. (Facilitec). Facilitec filed a protest, demanding that the contract be rescinded and that a new one be awarded. When the state procurement officer denied the protest, Facilitec appealed to the ADOA Director, J. Elliott Hibbs (the ADOA Director or Hibbs). Hibbs delegated the matter to the ADOA Deputy Director, William Bell (the Deputy Director or Bell). and then referred Administrative entered the Hearings identified issues. judge Bell issued a Preliminary Decision and Order a matter (OAH) to for the a Arizona hearing Office on of certain After the hearing, the administrative law recommended decision 2 (the Decision). The Decision did not suggest that the original contract be rescinded, but it did recommend that Facilitec be awarded an additional non-exclusive contract to provide office furniture to the state. Bell rejected the administrative law judge s recommendation and issued an agency decision denying Facilitec s protest. ¶3 Facilitec filed a motion for review with Hibbs. Hibbs himself took no action, but Bell issued an order denying the motion for review. ¶4 Because Hibbs took no action within thirty days, Facilitec requested the OAH to certify the Decision as the final decision. In making that request, Facilitec relied upon A.R.S. section 41-1092.08.D, which provides: [I]f the head of the agency . . . does not accept, reject or modify the administrative law judge s decision within thirty days after the date the [OAH] sends a copy of the administrative law judge s decision to the head of the agency . . . the [OAH] shall certify the administrative law judge s decision as the final administrative decision. A.R.S. § 41-1092.08.D Facilitec s request, (Supp. Facilitec 2003). filed a After complaint OAH in denied superior court. ¶5 the In superior court, Facilitec again argued that because head of the ADOA did not review the administrative law judge s Decision, the trial court should deem the Decision to be the ADOA s final decision under 3 the terms of section 41- 1092.08.D. In addition, Facilitec argued that the Deputy Director lacked authority to review the Decision. ¶6 The trial court granted partial summary judgment to Facilitec, finding that [i]n order for the [ADOA] Director to have the power to delegate legislative or judicial functions the legislature must expressly grant the power. Facilitec, Inc. v. Hibbs, 204 Ariz. 39, 40 ¶ 5, 59 P.3d 803, 804 (App. 2002) (quoting the superior court). ¶7 The court of appeals reversed, concluding that the Deputy Director decided Facilitec s procurement protest pursuant to a proper grant of authority from both the Arizona Legislature and the ADOA Director. We granted Facilitec s Id. at 41-42 ¶ 14, 59 P.3d at 805-06. petition for review to consider this recurring issue of statewide importance. II. ¶8 charged Administrative with legislation. Because the agencies administering Black s legislature Law is are and implementing Dictionary often governmental unable 45 (6th to bodies particular ed. specify 1990). detailed rules of conduct, especially in highly technical and rapidly changing fields, it frequently entrusts agencies with the responsibility for developing and implementing regulatory policy for a limited subject matter. 4 ¶9 each Agencies often exercise powers that are peculiar to of the three principal branches of government. For example, agencies frequently operate under statutes that grant them legislative investigate power possible to issue violations rules, of rules executive or power statutes to and to prosecute offenders for these violations, and judicial power to adjudicate relevant particular governing disputes regarding standards. See, compliance e.g., State with ex rel. Schneider v. Bennett, 547 P.2d 786, 791 (Kan. 1976) (stating that administrative including legislative, agencies exercise executive, and many types judicial of power powers often blended together in the same administrative agency ); Kenneth Culp Davis, Administrative Law Text 24 (3d ed. 1972) (stating that a typical administrative agency exercises many types of power, including executive, legislative, and judicial power ). ¶10 to Because agencies are creatures of statute, the degree which they can exercise any power depends legislature s grant of authority to the agency. upon the An agency . . . has no powers other than those the legislature has delegated to it. . . . the Any excursion by an administrative body beyond legislative constitutional government. guidelines powers is vested treated only in as the an usurpation major branch of of Cochise County v. Kirschner, 171 Ariz. 258, 261- 62, 830 P.2d 470, 473-74 (App. 1992) (citing Swift & Co. v. 5 State Tax Comm n, 105 Ariz. 226, 230, 462 P.2d 775, 779 (1969), overruled on other grounds by Pittsburgh & Midway Coal Mining Co. v. Arizona Dep t of Revenue, 161 Ariz. 135, 776 P.2d 1061 (1989)); see also Arizona Health Care Cost Containment Sys. v. Bentley, 187 Ariz. 229, 232, 928 P.2d 653, 656 (App. 1996) (stating that [t]he scope of an agency s power is measured by statute and may not be expanded by agency fiat ) (citing Cochise County v. Arizona Health Care Cost Containment Sys., 170 Ariz. 443, 445, 825 P.2d 968, 970 (App. 1991)). Thus, in deciding whether the ADOA Director may delegate to the Deputy Director authority to make the final decision on the appeal of a procurement protest, we look to the statutes defining the ADOA Director s authority. ¶11 The starting point of our analysis is A.R.S. section 38-462, the general statute governing agency deputies. That section states: Unless otherwise provided, each deputy of a state or county officer possesses the powers and may perform the duties prescribed by law A.R.S. § 38-462.A (2001). for the office of the principal. This broad statutory language imposes no limits upon the ability of a deputy director to perform any duty prescribed for the principal, including those set forth in section 41-1092.08.D, unless otherwise provided. Facilitec asserts that because some statutes otherwise provide, the ADOA 6 Director improperly delegated his quasi-judicial responsibilities to the Deputy Director. ¶12 The statutes upon which Facilitec relies appear as part of A.R.S. sections 41-701 to -806 (2001 & Supp. 2003), through which the legislature created the ADOA. Section 41- 703.11 addresses the ADOA Director s authority to delegate and provides that administrative the ADOA functions, Director duties shall powers and [d]elegate as the the director deems necessary to carry out the efficient operation of the department. Section A.R.S. 41-702.A, provides: § 41-703.11 which deals (2001) with the (emphasis Deputy added). Director, appoint The director with the approval of the governor shall a deputy director of the department. The deputy director serves at the pleasure of the director and shall assist the director in administering the department by performing the duties and responsibilities that the director prescribes. A.R.S. § 41-702.A (2001) (emphasis added). ¶13 Facilitec argues that sections 41-702.A and 41-703.11 permit the ADOA Director to delegate administrative functions only and that nothing in Title 41 authorizes the ADOA Director to delegate his quasi-judicial functions to the Deputy Director. According to Facilitec, the specific language of prevails over the general language of section 38-462. 7 Title 41 ¶14 Facilitec s argument that sections 41-702.A and 41- 703.11 prevent the ADOA Director from delegating quasi-judicial duties because the statutes refer to delegating administrative functions, powers and duties and permit the Deputy Director to assist the ADOA relies upon too duties. Director narrow an administering interpretation the of department administrative As noted above, an administrative agency can exercise executive, legislative together. Therefore, reference in to and we do administrative judicial not power, construe duties in often the blended legislature s these statutes as excluding decision-making responsibilities. ¶15 Moreover, even if we were to read sections 41-702.A and 41-703.11 narrowly, we would not regard the statutes as inconsistent with section 38-462. a construction of a statute [W]henever possible we adopt that reconciles it with statutes and gives force to all statutes involved. other Achen- Gardener, Inc. v. Super. Ct., 173 Ariz. 48, 54, 839 P.2d 1093, 1099 (1992); see also Pima County v. Maya Constr. Co., 158 Ariz. 151, 155, 761 P.2d 1055, 1059 (1988) ( [W]hen reconciling two or more statutes, courts should construe and interpret them, whenever possible, in such a way so as to give effect to all the statutes involved. ). We see no conflict between section 38-462 and the statutes on which Facilitec relies. 8 ¶16 Nothing in section 41-702.A or 41-703.11 prohibits the ADOA Director from delegating any duties prescribed by law, including Instead, quasi-judicial sections duties, 41-702.A and to the 41-703.11 Deputy Director. provide additional instruction pertaining to the Deputy Director s responsibilities and the ADOA Director s general power to delegate duties to subordinates. authority Hibbs, under therefore, section acted 38-462 in within his delegating statutory review of procurement protests to Bell. ¶17 Another indication that the legislature intended to permit the ADOA Director to delegate to the Deputy Director authority to make the final decision on the appeal of a procurement protest is that the legislature did not prohibit him from doing expressly A.R.S. so. In restricted section other the instances, exercise 41-1604 of the legislature powers. enumerates the For has example, duties and responsibilities of the Director of the Arizona Department of Corrections. Section 41-1604.B.2.d states that the director shall not delegate the responsibilities set forth in A.R.S. section 41-1604.A.1-5. 2003). A.R.S. § 41-1604.B.2.d (1999 & Supp. The legislature has not included such a prohibition in the ADOA statutes, which indicates that the legislature intended to permit the ADOA Director to delegate his powers, as permitted by section 38-462. 9 ¶18 In provides, addition Facilitec delegate to contends quasi-judicial approval. arguing that that duties Title the ADOA absent 41 otherwise Director express cannot legislative In support of this argument, Facilitec relies on two court of appeals opinions, Godbey v. Roosevelt School District No. 66 of Maricopa County, 131 Ariz. 13, 638 P.2d 235 (App. 1981), and Building 1993). & Cactus Fire Wren Partners Safety, 177 v. Ariz. Arizona 559, 869 Department P.2d 1212 of (App. Facilitec s reliance on these cases is misplaced. ¶19 In Godbey, the acting school superintendent, without prior formal approval from the Board of Trustees, issued an administrative order requiring every teacher requesting paid sick leave to provide a doctor s certificate stating that the teacher was ill. 131 Ariz. at 15, 638 P.2d at 237. The teachers sued, claiming that the superintendent lacked power to issue the administrative order without either prior Board delegation of authority or express legislative authorization in the absence of prior Board approval. 241. Id. at 19, 638 P.2d at The court of appeals found in favor of the teachers, stating: If the action of the superintendent is characterized as ministerial or administrative , then the power was delegable without express legislative authorization. If the action is characterized as legislative or judicial , then the power was not so delegable. Id. at 19-20, 638 P.2d at 242. 10 ¶20 Facilitec proposition that argues a that quasi-judicial Godbey function unless explicitly permitted by statute. broad interpretation of stands Godbey. for is delegable not the We disagree with this In Godbey, no statute authorized the delegation of authority to the superintendent. Here, A.R.S. section 38-462 expressly gives the Deputy Director power to exercise all authority possessed by the ADOA Director. ¶21 Cactus Wren is similarly inapposite. In that case, tenants of the Desert Skies Mobile Home Park filed a petition with the Arizona Department of Building and Fire Safety (the Department) challenging Cactus Wren Partners (Cactus Wren) charges for trash removal and sewage services as violative of the Arizona Mobile Home Parks Residential Landlord and Tenant Act (the Act). 177 Ariz. at 561, 869 P.2d at 1214. A mobile home parks hearing officer of the Department determined that the sewage disposal and trash collection fees violated the Act and required the refund of or rental credit for these overcharges. Id. Cactus Wren sought judicial review, claiming that the consideration and resolution of conflicts regarding the Act by the Department s hearing officer upon the powers of the judiciary. unconstitutionally Id. infringed The court of appeals recognized a difference between the operation or administration of an agency and an agency s quasi-judicial responsibilities and found that the Department s hearing 11 officer did perform a function judicial in nature, but concluded that no separation of powers violation occurred. Id. at 562-63, 869 P.2d at 1215- 16. ¶22 Cactus Wren provides little assistance in this case. There, the issue was whether the legislature had power to permit the Department s hearing officer to consider and resolve conflicts regarding the Act, or whether this remedy was reserved to the judicial branch of government. presents no separation of powers issue. The case before us All parties acknowledge that the legislature has the power to create the administrative remedy provided to Facilitec. ¶23 Like Godbey, Cactus Wren does not support Facilitec s argument that, despite the broad language of section 38-462, the Deputy Director could exercise the ADOA Director s quasi- judicial power only if the legislature expressly granted the ADOA Director authority to delegate that power to the Deputy Director. In crafting section 38-462, the legislature intended to upon confer the ADOA Director authority to delegate his powers, including quasi-judicial powers, to the Deputy Director, and no additional legislative delegation of authority is needed. III. ¶24 the For the foregoing reasons, we vacate the decision of court of appeals, reverse the judgment of the superior court, and remand to the superior court for further proceedings 12 consistent with this opinion. _______________________________________ Ruth V. McGregor, Vice Chief Justice CONCURRING: __________________________________ Charles E. Jones, Chief Justice __________________________________ Rebecca White Berch, Justice __________________________________ Michael D. Ryan, Justice __________________________________ Andrew D. Hurwitz, Justice 13

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