Marsh v. Atkins

536 P.3d 811, 104 Arizona Cases Digest 14
CourtCourt of Appeals of Arizona
DecidedAugust 31, 2023
Docket1 CA-CV 22-0555
StatusPublished

This text of 536 P.3d 811 (Marsh v. Atkins) is published on Counsel Stack Legal Research, covering Court of Appeals of Arizona primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Marsh v. Atkins, 536 P.3d 811, 104 Arizona Cases Digest 14 (Ark. Ct. App. 2023).

Opinion

IN THE ARIZONA COURT OF APPEALS DIVISION ONE

TIMOTHY MARSH, Appellant,

v.

LISA ATKINS, et al., Appellees.

No. 1 CA-CV 22-0555 FILED 8-31-2023

Appeal from the Superior Court in Maricopa County No. LC2021-000137-001 The Honorable Daniel J. Kiley, Judge, (Retired)

AFFIRMED

COUNSEL

Fennemore Craig, P.C., Phoenix By Norman D. James, Tyler D. Carlton Counsel for Appellant

Arizona Attorney General’s Office, Phoenix By Paul Katz, David F. Jacobs Counsel for Appellees

Rose Law Group, PC, Scottsdale By Andrew B. Turk, Logan V. Elia Counsel for Amicus Curiae Arizona Sonoran Copper Company USA MARSH v. ATKINS, et al. Opinion of the Court

OPINION

Judge Anni Hill Foster delivered the opinion of the Court, in which Presiding Judge Samuel A. Thumma and Judge Randall M. Howe joined.

F O S T E R, Judge:

¶1 Dr. Timothy Marsh appeals the superior court’s order affirming the Arizona State Land Department’s (“Department” or “ASLD”) decision to deny two of Marsh’s mineral exploration permit (“MEP”) applications. For the following reasons, the order is affirmed.

FACTS AND PROCEDURAL HISTORY

¶2 In September 2019, Marsh applied for eighteen MEPs with the ASLD. Two of those applications are the subject of this appeal (the “applications”). As part of the application process, the ASLD was required to give Marsh written notice by late-October 2019 of “the state land that is described in the application,” the rental price, and whether a bond would be required. A.R.S. § 27-251(B). The ASLD, however, did not issue the written notices until July 2020. Those notices denied the applications.

¶3 Elim Mining and LKY Copper Mountain Investment owned the land subject to the MEPs sought in the applications. The ownership rights of Elim Mining and LKY Copper Mountain Investment were derived from a state patent that the ASLD issued in 1995. That patent reserved all mineral rights for the state but, pursuant to A.R.S. § 37-231, the surface owner of the land “shall have the first right of refusal to acquire” MEPs for the land. Given the first right of refusal provision, the ASLD informed Elim Mining and LKY Copper Mountain Investment about Marsh’s pending MEP applications.

¶4 Following the July 2020 denial, Marsh timely appealed, seeking an administrative hearing. See A.R.S. § 41-1092.03(B). On or about March 1, 2021, the parties entered settlement discussions during which the ASLD determined that its reasons for denying the applications were insufficient. However, the ASLD provided no new written notice of denial to Marsh. A few days later, on March 5, 2021, Elim Mining sent a letter to the ASLD exercising its first right of refusal. Three days later, LKY Copper Mountain Investment sent a letter to the ASLD asserting its first right of

2 MARSH v. ATKINS, et al. Opinion of the Court

refusal. Around this time, the ASLD orally informed Marsh that they had a new basis to deny the applications: the surface owner’s exercise of their first rights of refusal, as described in A.R.S. § 37-231(E)(2).

¶5 About two weeks later, an Administrative Law Judge (“ALJ”) from the Office of Administrative Hearings held a hearing on Marsh’s appeal of the application denials. Based on the evidence presented at that hearing, the ALJ determined that the ASLD erred by not giving Marsh written notice about its new reasoning for denying the applications, relying on Carlson v. Ariz. State Personnel Bd., 214 Ariz. 426 (App. 2007). The ALJ stated that “[b]ecause the Department has rescinded its stated reasons for denying Dr. Marsh’s applications and has acknowledged that MEPs can be issued for the land at issue, there is no basis in this record on which the applications may be denied.” The ALJ recommended that Marsh’s MEP applications be granted.

¶6 Pursuant to the Administrative Procedure Act (“APA”), the ALJ’s recommendations went to the ASLD for final disposition. A.R.S. § 41- 1092.08(B).1 In May 2021, the ASLD rejected the ALJ’s decision with the justification that Elim Mining and LKY Copper Mountain Investment properly exercised their first rights of refusal. The ASLD modified the ALJ’s findings, noting the right of first refusal communications with Elim Mining and LKY Copper Mountain Investment. Marsh timely appealed the ASLD’s decision to the superior court. See A.R.S. § 12-904(A).

¶7 In July 2022, after full briefing and oral argument, the superior court affirmed the ASLD’s decision to deny the applications because the surface owners exercised their statutory first rights of refusal. Marsh appeals, and this Court has jurisdiction under A.R.S. § 12-913 and Arizona Rule of Procedure for Judicial Review of Administrative Decisions 13.

DISCUSSION

¶8 At issue here is the denial of MEPs and the interplay of the APA with the rights of owners of land held under a state land patent. Though Marsh seemingly raises only one issue on appeal—whether the ASLD wrongfully relied on section 37-231(E)(2) rather than section 27- 251(B) in denying his MEP applications—he also challenges the procedures

1 Arizona Revised Statutes section 41-1092.08 was amended during the 2021

Legislative session. This opinion applies the 2017 version of the statute, which was in effect at the time of the ALJ’s and Department’s decisions.

3 MARSH v. ATKINS, et al. Opinion of the Court

followed by the ASLD by alleging that the ASLD’s “post hoc justification” for denial was in error.

¶9 In a challenge to an agency action, a court’s role is to review the record to determine if the agency’s final “action is contrary to law, is not supported by substantial evidence, is arbitrary and capricious or is an abuse of discretion.” A.R.S. § 12-910(F). See also Ariz. Comm’n of Agric. and Horticulture v. Jones, 91 Ariz. 183, 187 (1962). A court is limited to affirming, reversing, modifying or vacating and remanding the agency action. A.R.S. § 12-910(F).

¶10 For factual determinations “[this Court must] review the record to determine whether substantial evidence supports the agency’s decision and whether the agency exercised its discretion reasonably and with due consideration,” see State ex rel. Winkleman v. Ariz. Navigable Stream Adjudication Comm’n, 224 Ariz. 230, 238, ¶ 14 (App. 2010). But in reviewing the evidence, no deference can be given to the agency’s factual findings. see A.R.S. § 12-910(F). “Any legal issues addressed by the agency or the superior court” are reviewed de novo or without deference to the agency’s interpretation of the law. A.R.S. § 12-910(F); Holcomb v. Ariz. Dep’t of Real Estate, 247 Ariz. 439, 443, ¶ 9 (App. 2019); accord. Cooke v. Ariz. Dep’t of Econ. Sec., 232 Ariz. 141, 144, ¶ 13 (App. 2013).

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Bluebook (online)
536 P.3d 811, 104 Arizona Cases Digest 14, Counsel Stack Legal Research, https://law.counselstack.com/opinion/marsh-v-atkins-arizctapp-2023.