Arizona Court of Appeals Division One Holds That A Court Reviewing Agency Action Was Insufficiently Deferential When It Concluded That an Agency’s Decision Was “Shocking to One’s Sense of Fairness."

In a license disciplinary matter, the Arizona State Board of Appraisal (“Board”) sanctioned Coplan for various violations of state law and certain standards licensed appraisers are supposed to meet.  After a series of administrative hearings and appeals, the Board put Coplan on probation, requiring Coplan to satisfy fifteen continuing education hours and forcing Coplan to complete a certain number of appraisals under the supervision of a certified mentor.  Coplan appealed to the superior court.  Although the superior court agreed that Coplan violated appraiser standards, the court reduced the sanctions, finding that the Board’s sanctions were “shocking to one’s sense of fairness.”  The Board appealed.

A unanimous Court of Appeals reversed, holding that the superior court’s “shocking” standard was an improper standard to apply to the Board’s sanctions.  The Court noted that the Administrative Review Act imposes a deferential standard: a reviewing court should affirm agency action unless “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.”  A.R.S. § 12-910(E).  Relying on Maricopa County Sheriff’s Office v. Maricopa County Employee Merit System Commission, 211 Ariz. 219, 119 P.3d 1022 (2005), the Court explained that the “shocking” standard did not accurately define the standard outlined in A.R.S. § 12-910(E).  The Court reasoned that the standard was insufficiently deferential to the Board.

Applying the correct standard of review, the Court upheld the Board’s sanctions.  First, the Court concluded that the Board correctly found Coplan had committed errors warranting sanctions.  Second, because the sanctions the Board imposed were “consistent with those that are recommended” for violations of the type Coplan committed, the Court saw no reason to second guess the Board’s decision.

Judge Hall authored the opinion; Judges Thompson and Barker concurred.

Practice Note:

The superior court awarded Coplan attorneys’ fees for the Board’s administrative hearing and the appeal to the superior court.  The Court vacated the award of fees because Coplan was no longer the prevailing party under A.R.S. § 41-1007(A) and A.R.S. § 12-348(A)(2).