Marsh v. Atkins

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

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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.

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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).

I. SECTION 27-251(B) AND SECTION 37-231(E)(2) MUST BE
READ TOGETHER.

¶11 The Legislature delegated to the ASLD the authority and
responsibility to “administer all laws relating to lands owned by, belonging
to and under the control of this state.” A.R.S. § 37-102(A). As a trustee, the
Commissioner of the ASLD has a fiduciary obligation to manage the
portfolio to the benefit of the state land trust established by Arizona’s
enabling clause. See Forest Guardians v. Wells, 201 Ariz. 255, 260, ¶¶ 2, 13
(2001). With this responsibility, the Legislature outlined specific processes
and procedures that dictate and limit the Commissioner’s and the
Department’s authority. Much of the delegated authority and responsibility
can be found in Title 37, Public Lands, but other titles also define the ASLD’s
and the Commissioner’s authority. (See A.R.S. Title 27, Chapter 2, Mining
Rights in Land; Title 38, Public Officers and Employees; Title 39, Public Records,
Printing and Notices; and Title 41, State Government.)

¶12 As part of its duties to administer state land, the ASLD is
tasked with issuing MEPs, which allow individuals to survey state-owned
land for potential mineral deposits that, if found, can then be mined under

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Opinion of the Court

a mineral lease. The process for obtaining an MEP is outlined in section 27-
251 of the Arizona Revised Statutes. It allows for any person to seek an
MEP—even if they are not the property owner. A.R.S. § 27-251(A). The
statute also states, “The application shall have priority over any other
application for a mineral exploration permit involving the same state land
which may be filed with the department subsequent to such time and date,
and such land shall be deemed withdrawn as long as the application is
pending.” A.R.S. § 27-251(A).

¶13 Correspondingly, the ASLD is tasked with disposing of state
land. When state land is sold to a purchaser, that purchaser is entitled to a
patent demonstrating ownership of that parcel. A.R.S. § 37-251(A). A patent
is the highest evidence of title and cannot be attacked in a collateral
proceeding. See State v. Crawford, 7 Ariz. App. 551, 554-55 (1968). Land
patents, though, are subject to reservations of subsurface materials that are
retained by the state and provide a first right of refusal for MEPs. A.R.S.
§ 37-231(E). Specifically, section 37-231(E)(2) states in part that the ASLD
“may issue” MEPs “provided that the surface owner or owners shall have
the first right of refusal to acquire such mineral exploration permits.”
(Emphasis added.)

¶14 “When construing two statutes, this Court will read them in
such a way as to harmonize and give effect to all of the provisions
involved.” State v. Bowsher, 225 Ariz. 586, 589, ¶ 14 (2010) (citiations
omitted). “[I]f statutes relate[d] to the same subject and are thus in pari
materia [upon the same matter], they should be construed together with
other related statutes as though they constituted one law.” Pima County by
City of Tucson v. Maya Constr. Co., 158 Ariz. 151, 155 (1988). Statutes should
be construed to give effect to their objects. A.R.S. § 1-211(B). “In construing
the meaning of the several statutes they should be read together to give
effect to all if possible.” Ordway v. Pickrell, 112 Ariz. 456, 459 (1975) (citations
omitted).

¶15 Both sections 27-251(B) and 37-231(E)(2) relate to mineral
exploration permits for state land, and both provide bases for the ASLD to
deny an application for an MEP. Section 27-251(B) provides five specific
reasons for denying an application for an MEP but also requires that the
ASLD Commissioner “find[] that issuing the permit is in the best interest of
the trust” before issuance. Similar language is present in section 37-
231(E)(2) which states, “the department may issue…[MEP]s…when such
issuance is deemed in the best interest of the state….”

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¶16 Marsh contends that the right conferred by section 37-
231(E)(2) should not be considered in relation to his MEP applications
because section 27-251 allows the Commissioner to deny applications only
for five statutorily provided reasons. His reading, though, fails to consider
the entire statutory scheme.

¶17 Section 37-231(E)(2) requires the ASLD to provide the first
right of refusal of the surface owner, particularly given the use of the word
“shall,” which typically indicates that the statutory right is “required.” Cf.
Verma v. Stuhr, 223 Ariz. 144, 157, ¶ 68 (App. 2009) (“[A] statutory right may
not be waived where waiver is expressly or impliedly prohibited by the
plain language of the statute.”). When the plain language of the statute “is
clear and unambiguous, we give effect to it and do not use other methods
of statutory interpretation.” Mathews ex rel. Mathews v. Life Care Ctrs. of Am.,
Inc., 217 Ariz. 606, 608, ¶ 6 (App. 2008).

¶18 Although section 27-251(B) prioritizes MEP applications
based on the date of submission, such language cannot be read without also
considering the first right of refusal provided in section 37-231(E)(2). The
Court notes that the best interest determination language was present in
section 37-231(E)(2) before it was present in section 27-251(B). See 1978 Ariz.
Sess. Laws, ch. 129, § 2 as compared to 1989 Ariz. Sess. Laws, ch. 288, § 7,
suggesting that section 27-251(B) was amended to harmonize the language
in section 37-231(E)(2). The language of the two statutes must be read
together and, in doing so, can be harmonized. Marsh’s argument ignores
the plain language of the statutes.

II. THE FIRST RIGHT OF REFUSAL IN SECTION 37-
231(E)(2) SUPERCEDES ANY EXPECTATION THAT SECTION 27-251
MAY PROVIDE.

¶19 At common law, a first right of refusal is a “pre-emptive
right” giving the owner of that right the option to acquire property. Phipps
v. CW Leasing, Inc., 186 Ariz. 397, 400 (App. 1996); see also ABCDW LLC v.
Banning, 241 Ariz. 427, 438, ¶ 47 (App. 2016). In this instance, the first right
of refusal is a statutory right, legally obligating the ASLD to provide a
property owner the opportunity for an MEP before the ASLD provides it to
another person. A.R.S. § 37-231(E). Marsh contends that the first right of
refusal is not relevant to section 27-251(B) and “no more than a priority rule
governing whose application gets processed first.” Marsh relies on Saguaro
Healing LLC v. State, 249 Ariz. 362 (2020), stating that an agency’s
application of its rule as interpreted cannot conflict with a statute. But
Saguaro addressed at length the meaning of the word “may” and whether

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it was permissive or mandatory. Saguaro Healing, 249 Ariz. at 364-65, ¶¶ 11-
15. Its reasoning supports the ASLD’s position that section 27-251(B)
conditions the issuance of an MEP on a best interest finding because the
“shall issue” provision follows the predicate condition of “if the
commissioner finds…[it] is in the best interest of the trust.” A.R.S. § 27-
251(B).

¶20 The superior court correctly noted that Marsh “downplays
the significance of the rights that A.R.S. § 37-231(E) confers on surface
owners.” The language of section 27-251(B) means that the ASLD has a duty
to grant the application, but only after the ASLD determined it to be in the
“best interest” of the trust. The superior court’s finding that section 37-
231(E) triggers the first right of refusal only after a best interest
determination is made and is favorable to the applicant is well reasoned.
The “best interest” provision gives the commissioner great discretion in
determining whether to grant an application for an MEP. This discretion is
expressly contained throughout the ASLD’s enabling statutes. See Campana
v. Ariz. State Land Dep’t, 176 Ariz. 288, 291 (App. 1993) (noting the ASLD
“Commissioner has great discretion concerning the disposition of trust
lands and has authority to devise detailed plans for the sale, lease, and use
of state land”); A.R.S. § 37-132(A)(5) and (11). When interpreting the
language “we use the common meanings of terms that are not defined by
statute.” Melendez v. Hallmark Ins. Co., 232 Ariz. 327, 330, ¶ 10 (App. 2013).
The statutory language in section 37-231(E)(2) is clear and unambiguous.

¶21 Common law indicates that a first right of refusal is triggered
“when and if [the landowner] desires to sell the premises” or, in this case,
when the possessor of the right implicated seeks to assert it. Phipps, 186
Ariz. at 400. Likewise, section 37-231(E) triggers the surface owners’ right
of first refusal once the ASLD finds issuing the MEP is in the trust’s “best
interest.” As noted by the superior court, it would not be sensible to have
surface owners assert their first rights of refusal when the ASLD has not
even made a best interest determination. Here, even though the surface
owners’ land is closed to entry according to section 27-251(A), the “best
interest” determination triggers the first right of refusal. The ASLD’s
interpretation of the application process does not violate section 27-251(A).

¶22 Marsh’s assertion that the ASLD’s “sixth” basis for denial—
that the owner has exercised its first right of refusal—improperly expands
section 27-251(B) is misplaced. See Roberts v. State, 253 Ariz. 259, 266, ¶ 20
(2022). Reading the statutes, both separately and together, the text provides
the ASLD discretion to determine if an MEP should be issued. Section 27-
251(B) provides specific reasons authorizing the ASLD to deny a permit,

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but the plain language of the statute does not make those reasons exclusive.
Also, section 37-231(E)(2) expressly gives surface owners the first right of
refusal and gives the ASLD discretion on when an MEP should be issued.
The superior court’s reading of sections 27-251(B) and 37-231(E)(2) does not
“expand” section 27-251(B).

¶23 In addition to the statutory scheme that supports the
harmonization of sections 27-251 and 37-231, the ASLD’s adopted
regulations in the Administrative Code clarify the lack of rights an MEP
applicant holds compared to that of a property owner. Section R12-5-1903(I)
states, “The filing of an application for a mineral exploration permit shall
not confer upon the applicant any greater right to use of the land under
application than that held before such filing.” Here, Marsh’s interest in
seeking the MEP did not, somehow, trump the first right of refusal held by
the landholders and, instead, was subservient to the landholders’ rights.
The record shows that the first right of refusal was exercised by Elim
Mining and LKY Copper Mountain Investment once they were informed
that the land was open for exploration. They did not waive their rights such
that they could pass on to another.

¶24 Marsh also argues that section 27-251(B) contemplates a two-
step process rather than the ASLD’s assertion of a three-step process that
unnecessarily expands the statute. Marsh contends that the ASLD should
determine (1) if the land is open to application, which includes seeing if the
surface owners have the first right of refusal, and then (2) whether an MEP
would be in the best interest of the trust. Marsh states that the ASLD creates
a three-step process where it determines (1) if the land is open to
application, (2) whether an MEP would be in the best interest determination
of the trust, and (3) only when it is in the state’s best interest, then the first
right of refusal is triggered. Although Marsh’s reading is plausible, it is not
the only reading of how to apply the law. As the executive branch is tasked
with implementing laws, the judiciary will not dictate a procedure that is
within the law. Marsh has shown no error.

III. SECTION 37-231(E)(2) REQUIRED THE ASLD TO GIVE
THE SURFACE OWNERS NOTICE OF THE MEP APPLICATIONS.

¶25 Marsh also argues that section 37-231(E)(2) does not require
the ASLD to give notice to the surface owners that an MEP application is
pending. Instead, Marsh contends that the surface owners are responsible
to check whether applications have been made on their land and notify the
ASLD if they intend to exercise their first right of refusal. The superior court
found that, although the statute does not expressly require the ASLD to

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provide notice to the surface owners, the only reasonable interpretation of
the statutory scheme was to require notice.

¶26 Section 37-231(E)(2) expressly gives surface owners “the first
right of refusal to acquire” MEPs. There is no ambiguity. The first right of
refusal is a statutory grant of an interest in the property. See A.R.S. § 37-
231(E)(2). Marsh has not shown how failing to provide notice to the owner
of that right would comply with due process requirements under Arizona
law. See Ariz. Const. art. II, § 4. To avoid such constitutional issues, the
ASLD provides notice to the property owner regarding the first right of
refusal before issuing an MEP based on an application by another. Marsh’s
argument that surface owners are required to continually check for permit
applications fails. Along with these due process concerns, Marsh does not
show, as a practical matter, how a surface owner could obtain that
information before the issuance of an MEP. Therefore, this Court agrees
with the superior court that “[i]t would hardly make sense to impose an
independent obligation on every surface owner to continually monitor
public records to learn if any MEP applications have been filed that relate
to his or her land;” first rights of refusal are not activated by an MEP
application. No such obligation is legally defensible.

¶27 Marsh also argues that requiring the ASLD to notify the
surface owners following a finding that an MEP is in the best interest
obstructs the statutory regime’s purpose. Marsh contends that the Arizona
Legislature established the MEP process to maximize income from the state
lands. But even assuming his argument is correct, Marsh has not shown
how it would comply with due process requirements. The superior court
correctly interpreted section 37-231(E)(2) to require the ASLD to notify
surface owners after making a “best interest” determination for MEP
applications filed on their land.

IV. THE ASLD’S FAILURE TO TIMELY COMPLY WITH THE
PROCEDURAL PROCESS DOES NOT ABROGATE THE SURFACE
OWNERS’ STATUTORY FIRST RIGHT OF REFUSAL.

¶28 Marsh contends that the ASLD erred by not following
statutory timeframes, meaning the ASLD was required to issue Marsh the
MEPs he sought. The ASLD does not dispute that it failed to meet the
statutorily mandated deadline for issuing the notices. A.R.S. § 27-251(B).
Rather, after failing to meet the statutorily mandated deadline, the ASLD at
the eleventh hour and in the middle of Marsh’s appeal changed its
reasoning for denying the permits, only providing a verbal notification.

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Written notification was not provided to Marsh until the ASLD’s rejection
of the ALJ’s recommendation.

¶29 Marsh argues that because he did not receive written notice
of the ASLD’s new reasoning to deny the applications until after the ALJ
hearing, the ASLD’s decision must be vacated. In doing so, Marsh relies on
this Court’s decisions in Univ. Med. Ctr. of S. Nev. v. Health Choice Ariz., 253
Ariz. 524 (App. 2022) and Carlson v. Ariz. State Personnel Bd., 214 Ariz. 426,
432–33 (App. 2007).

¶30 The timing in this case is different than that of University
Medical Center, where the appellants first provided new reasoning for an
administrative decision on appeal to this Court. Univ. Med. Ctr., 253 Ariz.
at 531, ¶ 32 n.3. Similarly, in Carlson, notice was not provided until after the
final determination was made. Carlson, 214 Ariz. at 432-33, ¶ 22. Here,
Marsh was provided with written notice and an opportunity to be heard
regarding the denial based on section 37-231(E)(2) following the ASLD’s
final administrative decision. The cases cited by Marsh are inapposite and
A.R.S. § 41-1092.08 governs here.

¶31 In addition to the procedures outlined in section 27-251 for
obtaining an MEP, the APA, found in A.R.S. Title 41, Chapter 6, outlines the
requirements for agencies to follow when implementing and enforcing
regulations. Arizona’s APA was originally adopted in 1952, standardized
the process state government must follow when adopting and
implementing regulations, 1952 Ariz. Sess. Laws, ch. 97, and has been
amended many times, see 1986 Ariz. Sess. Laws, ch. 232; 1995 Ariz. Sess.
Laws, ch. 251; 1996 Ariz. Sess. Laws, ch. 102; 1998 Ariz. Sess. Laws, ch. 57;
2018 Ariz. Sess. Laws, ch. 178 & 337; 2021 Ariz. Sess. Laws, ch. 161. As part
of the APA, A.R.S. § 41-1001.01, Regulatory Bill of Rights, outlines the specific
guarantees that citizens who are regulated by the government are entitled.
The section includes requirements such as notice, opportunity for hearing
with uniform procedures and that information be transparent. A.R.S. § 41-
1001.01(A).

¶32 Section 41-1001.01(A)(14), cited by Marsh, requires that a
person “receive written notice from [the ASLD] . . . [t]hat justifies the denial
with references to the statutes or rules on which the denial is based as
provided in § 41-1076 . . . .” But other sections of the APA also apply. Title
41, Chapter 6, Article 10 outlines the process for administrative hearings
regarding appealable agency actions. Sections 41-1092.05 through 41-
1092.07 outline the process for review of appealable agency actions for

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which Marsh availed himself. But most importantly, section 41-1092 defines
both “Appealable agency action” and “Final administrative decision.”

¶33 Contrary to Marsh’s position, the ASLD’s final administrative
decision, which was subject to judicial review under the APA, was the
modification of the ALJ’s decision that stated the denial was due to the right
of first refusal. See A.R.S. § 41-1092.08 (“final administrative decisions”);
A.R.S. 41-1092(6) (defining “final administrative decision” as “a decision by
an agency that is subject to judicial review” under the APA). Once the ASLD
issued its final administrative decision on this issue, the superior court had
jurisdiction to consider the reasoning provided in that decision. The notice
and the opportunity to be heard in the superior court afforded Marsh the
rights outlined in A.R.S. § 41-1001.01.

V. THE ASLD’S FAILURE TO COMPLY WITH THE
ADMINISTRATIVE PROCEDURES ACT DOES NOT RESULT IN THE
AWARD OF THE PERMITS.

¶34 Citing Shelby Sch. v. Ariz. State Bd. of Educ., Marsh argues that
the best interest denial could not be issued post hoc on the eve of the appeal
hearing. He cites the Regulatory Bill of Rights, specifically A.R.S. § 41-
1001.01(A)(14), to support his position.

¶35 While section 41-1001.01(A)(14) does provide that a person is
“entitled to review written notice,” it does not state when such notice must
be provided. Instead, section 41-1001.01(A)(14) references A.R.S. § 41-1076,
which addresses the requirement that an agency meet specific statutory
time frames for reviewing applications for licenses. The time frame
requirement, though, is tied to either language in the substantive statute (as
it is here) or the procedural time frames that the agency adopted under
A.R.S. § 41-1073.

¶36 Here, section 27-251(B) provides a timeline for the ASLD to
act on an MEP application. With some exceptions, the statute requires that
between 30 and 45 days from the filing of the application, the ASLD must
notify the applicant if the land was open for exploration. A.R.S. § 27-251(B).
The ASLD failed to respond to Marsh’s application within that time frame
and contends instead that it had an infinite amount of time to make a best
interest determination. Likewise, the superior court also concluded that the
ASLD had no timeline to make a best interest determination under section
27-251(B). But this Court fails to see the ASLD’s or the superior court’s logic
or justification when considering other relevant statutes.

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¶37 The language of section 27-251(B) provides a clear directive of
the timeline required for the ASLD to act on an MEP. Even adopting the
ASLD’s argument that it had additional time to make a best interest
determination, such cannot run afoul of the APA. Section 41-1073 requires
an agency to adopt regulations detailing the timelines for review of
regulatory processes. The ASLD failed to adopt any regulations pursuant
to section 41-1073 and therefore cannot now use that as a shield. The ASLD
failed to meet the statutory timeline requirements in section 27-251(B) and
failed to comply with the APA.

¶38 Such a failure, however, does not result in a waiver of the
surface owners’ statutory first rights of refusal. See Ayer v. General Dynamics
Corp., 128 Ariz. 324, 326 (App. 1980) (“[W]here rights are clearly established
and defined by statute, equity has no power to change or upset such
rights.”); see also Verma, 223 Ariz. at 157, ¶ 68. That failure cannot divest
Elim Mining and LKY Copper Mountain Investment of their statutory
rights. For this reason, contrary to the remedy proposed by the ALJ, the
ASLD’s failure to comply with the APA does not automatically result in
Marsh receiving the MEPs.

CONCLUSION

¶39 For the foregoing reasons, the superior court’s order is
affirmed. Marsh asks to be awarded his reasonable attorneys’ fees and costs
as the prevailing party under A.R.S. § 12-348(A)(2). Amicus Arizona
Sonoran Copper Company USA requests to be awarded its reasonable fees
and costs under A.R.S. § 12-348. This Court denies both requests for
attorneys’ fees.

AMY M. WOOD • Clerk of the Court
FILED: AA

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