                               IN THE

    SUPREME COURT OF THE STATE OF ARIZONA

                  LEGACY FOUNDATION ACTION FUND,
                          Plaintiff/Appellant,

                                  v.

               CITIZENS CLEAN ELECTIONS COMMISSION,
                         Defendant/Appellee.



                         No. CV-16-0306-PR
                        Filed January 25, 2018


          Appeal from the Superior Court in Maricopa County
              The Honorable Crane McClennen, Judge
                          No. LC2015-000172
                             AFFIRMED

     Memorandum Decision of the Court of Appeals, Division One
                       1 CA-CV 15-0455
                      Filed Nov. 15, 2016
                          VACATED

COUNSEL:

Brian M. Bergin, Bergin, Frakes, Smalley & Oberholtzer, PLLC, Phoenix;
Jason B. Torchinsky (argued), Holtzman Vogel Josefiak Torchinsky, PLLC,
Warrenton, VA, Attorneys for Legacy Foundation Action Fund

Mary R. O’Grady, Joseph N. Roth (argued), Nathan T. Arrowsmith, Osborn
Maledon, P.A., Phoenix, Attorneys for Citizens Clean Elections
Commission
       LEGACY V. CITIZENS CLEAN ELECTIONS COMMISSION
                       Opinion of the Court



JUSTICE BOLICK authored the opinion of the Court, in which CHIEF
JUSTICE BALES, VICE CHIEF JUSTICE PELANDER, JUSTICES
BRUTINEL, TIMMER, and GOULD, and JUDGE PHILIP G. ESPINOSA
joined. *


JUSTICE BOLICK, opinion of the Court:

¶1            This case presents the question whether the fourteen-day time
limit for an appeal of a Citizens Clean Elections Commission (the
“Commission”) decision under A.R.S. § 16-957(B) applies when the party
challenges the Commission’s personal and subject-matter jurisdiction. We
hold that it does.

                             BACKGROUND

¶2            Legacy Foundation Action Fund (“Legacy”) is a nonprofit
organization that seeks to educate the public on governmental policy
issues. In March and April of 2014, Legacy funded a television
advertisement that aired on multiple occasions criticizing then-Mesa Mayor
Scott Smith’s record as President of the U.S. Conference of Mayors. Smith
had previously announced his candidacy for governor.

¶3            A complaint was filed with the Commission alleging that the
ads constituted “express advocacy” against Smith’s campaign for governor
and that Legacy failed to file certain disclosure reports in violation of the
Citizens Clean Elections Act, A.R.S. §§ 16-940 to -961 (“CCEA”). The
Commission found probable cause to believe that Legacy had violated the
CCEA and assessed a civil penalty, and Legacy requested an administrative
hearing. The administrative law judge (“ALJ”) concluded that the ads did
not constitute express advocacy and, therefore, the Commission lacked

*Justice John R. Lopez IV has recused himself from this case. Pursuant to
article 6, section 3 of the Arizona Constitution, the Honorable Philip G.
Espinosa, Judge of the Arizona Court of Appeals, Division Two, was
designated to sit in this matter.



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       LEGACY V. CITIZENS CLEAN ELECTIONS COMMISSION
                       Opinion of the Court

statutory authority to assess the penalty. The Commission rejected the
ALJ’s recommendation, affirmed its earlier order and penalty, and entered
a final administrative decision against Legacy on March 27, 2015.

¶4            Eighteen days after the Commission’s final decision, Legacy
filed an appeal in superior court. Legacy argued that the Commission
lacked personal and subject-matter jurisdiction because the ads did not
constitute direct advocacy. The court dismissed the appeal because it was
not filed within fourteen days of a final Commission penalty decision as
required by A.R.S. § 16-957(B). The court of appeals affirmed. Legacy Found.
Action Fund v. Citizens Clean Elections Comm’n, 1 CA-CV 15-0455, 2016 WL
6699308, at *1 ¶ 1 (Ariz. App. Nov. 15, 2016) (mem. decision).

¶5            Whether § 16-957(B)’s time limit applies to a direct appeal of
the Commission’s penalty decision when the appellant challenges the
Commission’s jurisdiction is a recurrent issue of statewide importance. We
have jurisdiction under article 6, section 5(3) of the Arizona Constitution
and A.R.S. § 12-120.24.

                               DISCUSSION

¶6            Ordinarily “[w]e review an order granting a motion to
dismiss for abuse of discretion,” Dressler v. Morrison, 212 Ariz. 279, 281 ¶ 11
(2006), but “[d]etermining the procedure for review of administrative
decisions involves the interpretation of rules and statutes, which we review
de novo.” Smith v. Ariz. Citizens Clean Elections Comm’n, 212 Ariz. 407, 412
¶ 18 (2006).

¶7               An aggrieved party generally has thirty-five days to appeal a
final administrative decision. A.R.S. § 12-904(A). However, the CCEA
provides a fourteen-day time limit for appeals from Commission penalty
orders. § 16-957(B) (“The violator has fourteen days from the date of
issuance of the order assessing the penalty to appeal to the superior
court . . . .”). Legacy failed to file its direct appeal in the superior court
within that limited time frame.




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       LEGACY V. CITIZENS CLEAN ELECTIONS COMMISSION
                       Opinion of the Court

¶8             Failure to file a timely appeal from an agency decision
deprives the court of jurisdiction to hear the appeal, including issues of
agency jurisdiction. Smith, 212 Ariz. at 413 ¶ 25 (stating that “the time for
filing an appeal, . . . following the conclusion of the administrative process,
is jurisdictional”). Thus, we are “not free to ignore the clear statutory
language of A.R.S. § 16-957(B) and create jurisdiction in the superior courts
where the legislature has provided to the contrary.” Id. at 414 ¶ 35.

¶9              Legacy asserts that an exception to this rule exists to challenge
an agency’s subject-matter or personal jurisdiction. Legacy argues that the
secretary of state has exclusive jurisdiction over the matter at issue because
its ad was not express advocacy. See § 16-941(D) (requiring reporting of
certain independent expenditures to the secretary of state).1 An order is
void if it exceeds the jurisdiction of the court or agency rendering it. See,
e.g., Am. Asphalt & Grading Co. v. CMX, LLC, 227 Ariz. 117, 119 ¶ 11 (2011)
(acknowledging that “void judgments are those rendered by a court lacking
jurisdiction over subject matter or parties” (citing Cockerham v. Zikratch, 127
Ariz. 230, 234 (1980))); see also Brumfield v. La. State Bd. of Educ., 806 F.3d 289,
291, 298 (5th Cir. 2015) (challenging jurisdiction under Federal Rule of Civil
Procedure 60(b)(4)); Dallas v. Ariz. Corp. Comm’n, 86 Ariz. 345, 348 (1959)
(“We hold, therefore, that the action of the Commission canceling the
certificate in question was entered without jurisdiction and such orders are
declared to be void and of no effect.”).

¶10           Legacy cites cases in which allegedly void judgments were
challenged through Arizona Rule of Civil Procedure 60 or special action
long after the judgments were issued. See, e.g., Arkules v. Bd. of Adjustment,
151 Ariz. 438, 440 (App. 1986) (concerning a special action challenge to an
allegedly void board of adjustment decision); Nat’l Inv. Co. v. Estate of
Bronner, 146 Ariz. 138, 140 (App. 1985) (concerning a Rule 60 challenge to
an allegedly void judgment). Although Legacy apparently filed two special
actions in superior court that were dismissed for failure to exhaust

1  Legacy also raises First Amendment challenges to the Commission’s
order. We do not consider them because they are beyond the scope of the
question presented to the Court, and because Legacy does not explain how
such substantive arguments can properly be raised in an untimely direct
appeal.


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       LEGACY V. CITIZENS CLEAN ELECTIONS COMMISSION
                       Opinion of the Court

administrative remedies, this action does not challenge the Commission’s
jurisdiction through Rule 60, special action, or as a defense to an
enforcement action. Rather, it does so through a direct appeal, the filing
deadline for which is itself jurisdictional.

¶11           Legacy contends any statutory time limit is abrogated by
§ 12-902(B), which provides:

       Unless review is sought of an administrative decision within
       the time and in the manner provided in this article, the parties
       to the proceeding before the administrative agency shall be
       barred from obtaining judicial review of the decision. If
       under the terms of the law governing procedure before an
       agency an administrative decision becomes final because of
       failure to file any document in the nature of an objection,
       protest, petition for hearing or application for administrative
       review within the time allowed by the law, the decision is not
       subject to judicial review under the provisions of this article
       except for the purpose of questioning the jurisdiction of the
       administrative agency over the person or subject matter.

(emphasis added).

¶12           Legacy contends the highlighted language allows aggrieved
parties to challenge the Commission’s jurisdiction through direct appeal
notwithstanding the fourteen-day time limit for appealing Commission
penalties under § 16-957(B). But that argument is unavailing. Section 12-
902 expressly does not apply “if the act creating or conferring power on an
agency . . . provides for judicial review of the agency decisions and
prescribes a definite procedure for the review.” § 12-902(A)(1). The CCEA
provides for judicial review of Commission decisions and prescribes a
definite procedure for the review; thus § 16-957(B), not § 12-902(B), applies.

¶13            Legacy relies upon two appeals court decisions—State ex rel.
Dandoy v. City of Phoenix and Arkules v. Board of Adjustment—for the
proposition that statutes of limitations (such as § 16-957(B)) do not apply to
jurisdictional challenges. In State ex rel. Dandoy v. City of Phoenix, 133 Ariz.
334 (App. 1982), the party challenging an injunction based on an


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       LEGACY V. CITIZENS CLEAN ELECTIONS COMMISSION
                       Opinion of the Court

administrative consent order had failed to timely appeal that order. Id. at
335–36. It nevertheless challenged the agency’s subject-matter jurisdiction
to enter the consent order based on § 12-902(B). Id. at 336. The court rejected
the argument but agreed that § 12-902(B) permits an untimely challenge if
the agency lacked jurisdiction to enter its order. Id. at 336–37.

¶14           Arkules involved a special action in superior court challenging
a local board’s jurisdiction after the plaintiffs learned the board had
approved a variance. 151 Ariz. at 439. The court construed § 12-902(B) to
provide that “an appeal from an administrative agency may be heard even
though untimely to question the agency’s personal or subject matter
jurisdiction.” Id. at 440. From this, the court determined that the statute of
limitations for a direct appeal was inapplicable and concluded that the
special action was filed within a “reasonable time” after the board’s action.
Id. We reject those opinions’ construction of § 12-902(B).

¶15             As explained previously, supra ¶ 12, § 12-902 by its terms does
not apply where a statute creating an agency prescribes its own time limits
for appeals. § 12-902(A)(1). And even if § 12-902(B) applies, its terms do
not create the exception Legacy asserts. Section 12-902(B)’s first sentence
sets forth a definitive rule: “Unless review is sought of an administrative
decision within the time and in the manner provided in this article, the
parties to the proceeding before the administrative agency shall be barred
from obtaining judicial review of the decision.” The second sentence limits
otherwise applicable appeal rights when “an administrative decision
becomes final because of failure to file any document in the nature of an
objection, protest, petition for hearing or application for administrative
review within the time allowed by the law.” § 12-902(B); see Sw. Paint &
Varnish Co. v. Ariz. Dep’t of Envtl. Quality, 194 Ariz. 22, 24 ¶ 10 (1999) (“We
read § 12-902(B) as encompassing the traditional doctrine of exhaustion of
administrative remedies . . . .”). Under those circumstances, “the decision
is not subject to judicial review . . . except for the purpose of questioning the
jurisdiction of the administrative agency over the person or subject matter.”
§ 12-902(B). In other words, when a decision becomes final because of
failure to exhaust administrative remedies, the time limit to appeal applies,
and the party may only contest jurisdiction. Contrary to Legacy’s assertions
and to the court of appeals’ construction of this provision in Arkules and
Dandoy, § 12-902(B) does not create an exception to the time allotted to take


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       LEGACY V. CITIZENS CLEAN ELECTIONS COMMISSION
                       Opinion of the Court

an appeal from a final agency decision. We therefore disavow the language
in Arkules and Dandoy that construes § 12-902(B) to provide limitless
entitlement to challenge an administrative agency’s jurisdiction through
direct appeal.

¶16              Quoting Arkules, Legacy also contends that “[s]tatutes of
limitation or rules of court are not applicable to void judgments,” and
therefore statutes stating time limits for appeals do not apply to
jurisdictional challenges. 151 Ariz. at 440. This argument, however,
conflates two distinct issues. The quoted language is based on decisions of
this Court recognizing that a party may seek relief in the trial court from a
void judgment beyond the six-month time limit that generally applies for
seeking Rule 60(c) relief from a judgment. See Wells v. Valley Nat’l Bank of
Ariz., 109 Ariz. 345, 347 (1973) (stating that “the mere lapse of time is no bar
to an attack on a void judgment”); Preston v. Denkins, 94 Ariz. 214, 219 (1963)
(observing that the “right to challenge a judgment on the ground that it is
void for lack of jurisdiction . . . does not depend upon rules of the court or
statute. . . . Statutes of limitations have no application to void judgments”).

¶17           These decisions are inapposite. Although a party may seek
relief from a void judgment beyond the usual time limits, see Ariz. R. Civ.
P. 60(c), that proposition does not suggest a party can belatedly do so
through direct appeal under an applicable statute that contains specific time
limits. Such provisions are not statutes of limitations but rather confer
limited appellate jurisdiction subject to timely action by the appealing
party. Failure to appeal in a timely manner thus deprives the appellate
court (here the superior court) of jurisdiction.

¶18           In Smith, 212 Ariz. at 413 ¶ 25, we cited Arizona Department of
Economic Security v. Holland, 120 Ariz. 371 (App. 1978), which explains this
important distinction. In Holland, a party sought review of an allegedly
void agency determination outside of the thirty-five-day time limit
prescribed by A.R.S. § 12-904. Id. at 372. The appellant argued that the
provision was a statute of limitations that had no effect on a challenge to a
void judgment. Id. The court held that the time limit was not a statute of
limitations but a “jurisdictional prerequisite to judicial review of an
administrative decision.” Id. at 372–73; see also Ariz. Comm’n of Agric. &
Horticulture v. Jones, 91 Ariz. 183, 187 (1962) (stating that a “right of appeal


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       LEGACY V. CITIZENS CLEAN ELECTIONS COMMISSION
                       Opinion of the Court

‘exists only by force of statute, and this right is limited by the terms of the
statute’” (quoting Knape v. Brown, 86 Ariz. 158, 159 (1959))).

¶19            Because Legacy pursued a direct appeal through a statute that
specifies a time limit, the superior court lacked jurisdiction to consider any
questions concerning the Commission’s jurisdiction or any other
substantive matter because the appeal was untimely. Accordingly, the
superior court correctly dismissed the appeal, and the court of appeals
correctly affirmed that ruling. We express no view on whether Legacy may
pursue alternative procedural means to challenge the Commission’s
penalty order as void.

                              CONCLUSION

¶20           We vacate the decision of the court of appeals and affirm the
superior court’s dismissal of the administrative appeal. Legacy’s request
for attorney fees is denied.




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