Retaliation Claims by Arizona Students|Hit a Nerve in the Ninth Circuit

SAN FRANCISCO (CN) - The Arizona Students' Association's challenge to a federal judge's dismissal of its retaliation claim against the Arizona Board of Regents over students' support of a sales tax increase for education appeared to find favor with the Ninth Circuit on Tuesday.

The association sued the board of regents in Federal Court in 2013, claiming the regents retaliated against students at Arizona's three public universities for supporting Proposition 204, a ballot initiative to raise sales tax by a penny for education.

According to the association's complaint, the regents retaliated by voting to suspend its collection of a refundable ASA student fee, then voting to collect the fee only from students who "opted in."

The regents began collecting the fee at issue in 1998 when students voted to directly fund the ASA by paying the $1 non-mandatory fee at the beginning of each semester with their tuition payments. Students voted to increase the fee to $2 in 2008.

A federal judge dismissed the case for failure to state a claim, but - as the Circuit's three-judge panel pointed out during the hearing - the judge did not consider the case as a retaliation claim.

"This is a classic retaliation case," Circuit Judge Richard Paez said. "You can't convert it to something else."

Joseph Kanefield, who argued for the board, contended that the case was instead one of subsidized speech.

"I don't find that argument relevant at all here," Paez said, and Circuit Judge Kim McLane Wardlaw agreed.

The panel asked the assocation's counsel, Stephen Montoya, whether the regents had deprived the association of a "substantial benefit" under the First Amendment.

"The board was under no obligation in the collection of these fees," Paez pointed out. "They were just being a generous governing body trying to make nice to the students."

In reply, Montoya compared the case to a government who builds housing projects, then takes the housing away when the residents vote for a different party - while the government did not have to create the facility, it constitutes retaliation under the First Amendment when it takes the facility away, he said.

Paez then asked Montoya how his clients would amend their complaint if they prevailed, and Montoya said that they would amend the complaint to name individual regents as defendants in their official capacities.

"The district court erred fundamentally in concluding that the issue of retaliation was alien to this case," Montoya said. "The motive for initial suspension and substantial revocation is material, and the most important element in a First Amendment retaliation claim is motive."

Although Kanefield doggedly argued against this assertion, the panel repeatedly struck his arguments down.

"What really is troubling about this case - and why you, your clients and the district court don't understand that this is a retaliation case - is that we are talking about a public university context in which freedom of speech and openness is highly prioritized," Wardlaw said. "And these students lost something valuable because of their political activity."

Montoya capitalized on Wardlaw's comments in his rebuttal.

"Three weeks after the ASA supported Proposition 204, the funding it had enjoyed for years was stripped away, in contravention of its First Amendment rights," he said.

The panel did not indicate when it expects to rule.

Montoya's office is in Phoenix. Kanefield is with Ballard Spahr, also in Phoenix.

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