Court finds evidence of illegal retaliation by Arizona regents

PHOENIX — Saying there’s evidence of illegal retaliation, a federal appeals court gave the go-ahead Wednesday for the Arizona Students Association to sue the Board of Regents to get back money the group says was illegally withheld.

In a unanimous ruling Wednesday, the 9th U.S. Circuit Court of Appeals said there was enough evidence to support the claim that the regents financially undermined the student group because of its support of a 2012 initiative to raise taxes for education. That initiative was opposed by then-Gov. Jan Brewer, Republican lawmakers and several regents.

It was after the initiative was defeated that the Arizona Board of Regents voted to suspend fee collection for the student association. The board later agreed to collect the fee — but only from students who first agreed to pay it. Finding itself with no funding, the student association filed suit.

Appellate Judge Richard Paez, writing for the court, acknowledged no law required the regents to collect a fee from students to run the Arizona Students Association and support its political activities.

“But having done so for 15 years at no cost, ABOR could not deprive ASA of the benefit of its fee collection and remittance services in retaliation for the ASA’s exercise of its First Amendment rights,” Paez wrote. He said the sudden change by the governmental agency in depriving the association of the benefits of the fee collection is “sufficiently valuable to give rise to a retaliation claim.”

Wednesday’s ruling does not mean money will again start flowing to the student association, however. All it means is the trial judge who initially threw out the case will have to consider it.

But ASA attorney Stephen Montoya said the decision also paves the way to challenge a subsequent vote by the Legislature, also aimed at the student association, to make it illegal for the Board of Regents to use its billing system to collect any fee for any organization not under the board’s jurisdiction. He said that could force the state to reinstate the $2-a-semester fee on students, which raised more than $500,000 a year to fund the association’s political and other activities.

Regents’ spokeswoman Sarah Harper said the regents will discuss the ruling with lawyers at their next meeting to decide what action to take.

According to court records, the regents directly funded the association from 1974 through 1988.

That year students voted to impose a one-dollar-per-student fee each semester; it was increased, also by student vote, to $2 in 2008. Under the policy, students who objected could request a refund.

All that changed in 2012 during the debate over Proposition 204, a measure that would have made permanent a temporary 1-cent sales tax increase approved by voters two years earlier. A large portion of that money was earmarked for education, including some for the state’s universities.

Paez, the appellate judge, said the student association was involved in drafting the initiative, collected more than 20,000 signatures to get the measure on the ballot, campaigned for it and used $120,000 of its student fee income to promote its support.

Brewer, who as governor also sat on the Board of Regents, opposed the measure. Some regents criticized the association for its support.

The initiative ultimately failed.

Just weeks after the election, Paez wrote, the regents called a special meeting specifically to discuss the student fee. At that meeting the board voted to suspend collection of the fee and withhold the income it already had collected for the spring 2013 semester.

“Several regents commented that the suspension was ‘political’ in nature and was undertaken in response to the ASA’s Proposition 204 advocacy,” Paez wrote.

Several weeks later the board had another special meeting, changing its policy to collect the fee only from students who “opted in,” turning the “opt-out” policy on its head. The regents also voted to require the student association to reimburse the universities for the administrative cost of collecting the fees.

The association sued, charging that the regents’ action violates its constitutional free-speech rights, “causing a chilling effect on ASA’s political speech” and depriving it of its only source of income.

After implementing the opt-in policy, the regents never remitted the fees already paid by students for the spring 2013 semester.

“It’s several hundred thousand dollars that was never returned,” Montoya said. “But that is ASA’s money and we want it.”

The student group now functions without student fees, said Shayna Stevens, the association’s executive director. She said it makes some money through grants for things like registering students to vote.

Stevens said that while the association wants the funding restored, it was “never about the money.” She hopes the case will set a precedent that regents — and lawmakers — cannot use the threat of undermining funds to silence a student group for political reasons.

“ASA is not the first student association that something like this has happened to,” Stevens said.

When the case goes back to federal court it will take on a new tenor.

Montoya said the original lawsuit focused solely on the regents’ decision to change how it would collect the fee. But he said the 9th Circuit ruling also allows him to attack the 2013 state law forbidding the regents from collecting the fee at all.

“So we’ll just amend our complaint to include a First Amendment retaliation challenge to the new statute,” he said.