Arizona Passes New Law Limiting Deference to Agencies

On April 11, Arizona Governor Doug Ducey (R) signed HB 2238. The bill amended Arizona revised Statutes §12-910, which discusses the scope of judicial review of administrative decisions. The bill added in language to subsection E and created subsections F and G. The new statute reads as follows:

E. . . . In a proceeding brought by or against the regulated party, the court shall decide all questions of law, including the interpretation of a constitutional or statutory provision or a rule adopted by an agency, without deference to any previous determination that may have been made on the question by the agency. Notwithstanding any other law, this subsection applies in any action for judicial review of any agency action that is authorized by law.

F. Notwithstanding subsection E of this section, if the action arises out of Title 20, Chapter 15, Article 2, the court shall affirm the agency action unless after reviewing the administrative record and supplementing evidence presented at the evidentiary hearing the court concludes that the action is not supported by substantial evidence, is contrary to law, is arbitrary and capricious or is an abuse of discretion.

G. This section does not apply to any agency action by an agency that is created pursuant to Article XV, Constitution of Arizona.

Actions described in subsection F are health care appeals. Subsection G is describing agencies created pursuant to the Corporation Commission.

The bill was first proposed on January 17, 2018 in the House and assigned to the Judiciary and Public Safety (JPS) Committee and the Rules Committee.  The JPS decided Do Pass (DP) by a vote of 6 to 3. The Rules Committee unanimously voted that the bill was constitutional and in proper form (C&P). On February 14 the bill passed the House by a vote of 38 ayes, 21 nays, and 1 member did not vote. The Senate referred the bill to the Judiciary Committee and the Rules Committee. The Judiciary Committee voted DP by a vote of 4-3. The Rules Committee did not vote but deemed it proper for consideration (PFC). On April 5, the Senate passed the bill by a vote of 18 ayes, 10 nays, and 2 members did not vote.

Although this is only the law in one state, it does join in with the current federal trend of limiting regulation. It makes for an interesting juxtaposition to the Supreme Court decision in Chevron and could be the beginning of a move to limit the power of agencies.

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