Santa Cruz County, Alma Schultz v. Audit USA, John Brakey

IN THE
ARIZONA COURT OF APPEALS
DIVISION TWO

SANTA CRUZ COUNTY, A PUBLIC BODY; AND
ALMA SCHULTZ, IN HER OFFICIAL CAPACITY AS SANTA CRUZ COUNTY
ELECTIONS DIRECTOR,
Plaintiffs/Appellants/Cross-Appellees,

v.

AUDIT USA, A 501(C)(3) ORGANIZATION; AND JOHN R. BRAKEY,
A NATURAL PERSON, IN HIS OFFICIAL CAPACITY AS DIRECTOR AND
CO-FOUNDER OF AUDIT USA,
Defendants/Appellees/Cross-Appellants.

No. 2 CA-CV 2024-0328
Filed October 20, 2025

Appeal from the Superior Court in Pima County
No. C20223426
The Honorable Casey F. McGinley, Judge

AFFIRMED

COUNSEL

Pierce Coleman PLLC, Scottsdale
By Justin S. Pierce and Christina Estes-Werther
Counsel for Plaintiffs/Appellants/Cross-Appellees

Risner & Graham, Tucson
By William J. Risner
Counsel for Defendants/Appellees/Cross-Appellants

SANTA CRUZ COUNTY v. AUDIT USA
Opinion of the Court

OPINION

Judge Eckerstrom authored the opinion of the Court, in which Presiding
Judge Brearcliffe and Chief Judge Staring concurred.

E C K E R S T R O M, Judge:

¶1 Santa Cruz County and Alma Schultz (collectively “the
County”) appeal from the superior court’s judgment denying their motion
for reconsideration of the court’s grant of the motion to dismiss filed by
AUDIT USA and John R. Brakey (collectively “AUDIT USA”). AUDIT USA
cross-appeals, contending the superior court erred in only awarding limited
attorney fees. For the following reasons, we affirm.

Factual and Procedural Background

¶2 “On appeal from a motion to dismiss, this court ‘assume[s]
the truth of [all] well-pled factual allegations’” in the complaint “‘and
indulge[s] all reasonable inferences therefrom.’” Swift Transp. Co. of Ariz. v.
Ariz. Dep’t of Revenue, 249 Ariz. 382, ¶ 3 (App. 2020) (alterations in Swift)
(quoting Cullen v. Auto-Owners Ins. Co., 218 Ariz. 417, ¶ 7 (2008)). Further,
we view those factual allegations in the light most favorable to the
non-moving party, Mirchandani v. BMO Harris Bank, 235 Ariz. 68, ¶ 2 (App.
2014), here the County.

¶3 In 2022, AUDIT USA submitted a public records request for
“ballots Images, the Cast Vote Record and the Cast Vote Record Database,”
as well as three official reports from the August 2022 primary election in
Santa Cruz County. A Cast Vote Record (“CVR”) “is an electronic record
of a voter’s selections” from ballot images processed by an election
management system that aggregates and tabulates votes.1

¶4 The County replied that the CVR, CVR database, and official
reports would be transmitted to AUDIT USA. However, the County denied
AUDIT USA’s request for ballot images on the ground that “they are

1John Wack et al., Nat’l Inst. of Studs. & Tech., Dep’t of Com., NIST

Special Publication 1500-103, Cast Vote Records Common Data Format
Specification, at iii (2020), https://doi.org/10.6028/NIST.NP.1500-103.

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confidential by law and therefore, not subject to disclosure under the public
records law, A.R.S. § 39-121 et seq.” Shortly thereafter, the County
provided two of the requested official reports. It was unable to provide the
third, as that report did not exist and could not be produced. As to the
remaining requested records, the County identified them as protected from
disclosure under A.R.S. § 16-625. AUDIT USA did not formally challenge
that conclusion with any court filing.

¶5 Nonetheless, the County filed a declaratory judgment action
pursuant to A.R.S. § 12-1831 asking the superior court to clarify the proper
course of action as to the release of CVRs. AUDIT USA filed a motion to
dismiss the County’s action, contending the issue was not justiciable. The
court granted that motion. The County moved for reconsideration2 and
supplemented that motion when AUDIT USA submitted a new request for
the disputed CVRs. The court denied the motion and reaffirmed its
decision granting AUDIT USA’s dismissal.

¶6 In early 2023, the County appealed that denial to this court.
A panel of this court vacated the dismissal and remanded the case to the
superior court to consider whether AUDIT USA’s renewed request for
disclosure “was material to the issue of the existence of an actual
controversy.” On remand, the superior court considered the renewed
request for CVRs, requested briefing on the issue, and ultimately ruled that
there was still no justiciable issue. It entered final judgment in September
2024, including awarding AUDIT USA partial attorney fees and costs. This
appeal followed. We have jurisdiction pursuant to A.R.S. § 12-2101(A)(1).

Discussion

I. Justiciability

¶7 The County claims the superior court erred when it
concluded on remand that the County’s action seeking declaratory
judgment raises no justiciable issue. An action seeking declaratory relief
must raise one or more “specific adverse claims, based upon present rather
than future or speculative facts, which are ripe for judicial determination.”
Manning v. Reilly, 2 Ariz. App. 310, 314 (1965).

2Later, to preserve the appeal deadline, the County successfully filed

an expedited motion to convert the motion for reconsideration into a
motion for a new trial under Rule 59(a), Ariz. R. Civ. P.

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SANTA CRUZ COUNTY v. AUDIT USA
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¶8 A justiciable adverse claim exists if there is an assertion of
both a right in which the plaintiff has a “definite interest” and a denial of
that right by the opposing party. Ponderosa Fire Dist. v. Coconino County, 235
Ariz. 597, ¶ 16 (App. 2014). For this reason, no justiciable controversy exists
when the defendant has not actually denied the plaintiff’s asserted interest,
Land Department v. O’Toole, 154 Ariz. 43, 47 (App. 1987), or when the
defendant lacks the power to deny it, Yes on 200 v. Napolitano, 215 Ariz. 458,
¶ 29 (App. 2007).

¶9 For a controversy to be ripe, it must presently exist. The
ripeness doctrine prevents courts from rendering premature judgments or
opinions on situations that may never occur. Winkle v. City of Tucson, 190
Ariz. 413, 415 (1997); see also Thomas v. Anchorage Equal Rts. Comm’n, 220
F.3d 1134, 1138 (9th Cir. 2000) (role of courts is not to “issue advisory
opinions nor to declare rights in hypothetical cases, but to adjudicate live
cases or controversies”). Our statute authorizing declaratory judgment
actions, A.R.S. § 12-1832, also requires a presently existing controversy,
rather than a mere potential one. Town of Wickenberg v. State, 115 Ariz. 465,
468 (App. 1977) (plaintiff’s rights “must be presently affected” for
controversy to be justiciable under terms of § 12-1832).

¶10 On the record before us, the County’s claim is neither
sufficiently adverse nor ripe. In essence, the County maintains that its
denial of a request for public records creates an actionable controversy
against the requesting party. It implicitly contends that an “adverse claim”
exists even when, as here, the requesting party is not pursuing any legal
remedy as a result of that denial. But our jurisprudence instructs that no
adverse claim exists when the defendant lacks the power to deny the
plaintiff’s asserted interest in the action. Yes on 200, 215 Ariz. 458, ¶ 29.
And, under our state’s public records regime, AUDIT USA lacks any power
to require the County to disclose the requested records unless it first files a
special action pursuant to A.R.S. § 39-121.02. AUDIT USA has filed no such
action.

¶11 Nor has AUDIT USA otherwise denied the County’s asserted
interest in making determinations about which public records must be
disclosed and which must be withheld under prevailing law. As the
County emphasizes, AUDIT USA renewed its request for the CVRs after
the initial dismissal of the County’s declaratory judgment action. But that
request was neither a lawsuit nor did it expressly threaten one. Because
AUDIT USA took no action that denied the County’s authority to reject its
requests for the CVRs, and because AUDIT USA lacked any power to

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SANTA CRUZ COUNTY v. AUDIT USA
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counter that authority without first filing a special action, the County’s
declaratory judgment action states no “adverse claim” against AUDIT USA.
Yes on 200, 215 Ariz. 458, ¶ 29.

¶12 Even if the County could establish the components of an
adverse claim against AUDIT USA, that claim would still not be justiciable
because it would not be ripe. In explaining its rationale for filing this action,
the County maintains that it faces a “recurring dilemma”: that it either
produce the CVRs and risk violating § 16-625, or “deny the records . . .
potentially running afoul of the Arizona Public Records Law.” But that
reasoning overlooks the actual posture of this case. The County faces no
risk of any sanction under § 16-625 because it has denied the request for the
CVRs. Nor would the County face any risk of an adverse adjudication
under the public records law unless AUDIT USA challenges the denial of
its request in court. See § 39-121.02. In the absence of such a challenge, the
County’s declaratory judgment action asks the court to render “a premature
judgment or opinion on a situation that may never occur.” Winkle, 190 Ariz.
at 415. Thus, the County asserts only the existence of a potential
controversy with AUDIT USA, rather than a presently existing one, and
ultimately seeks an advisory opinion from the courts.3

¶13 Lastly, the County observes that Arizona courts have
previously reached the merits of actions initiated by public bodies to clarify
their duties under Arizona’s public records law. See Scottsdale Unified Sch.
Dist. No. 48 v. KPNX Broad. Co., 191 Ariz. 297, ¶¶ 5-8 (1998); Ariz. Bd. of
Regents v. Phx. Newspapers, Inc., 167 Ariz. 254, 255-59 (1991). But in neither
of those cases did our supreme court address the justiciability of the
underlying action before it. Nor do those cases reflect that the defendants,
both news organizations, ever challenged the lawsuits on that basis.
Therefore, those cases shed little light on the question before us.4 Because

3To the extent the County seeks official advice as to the lawfulness

of its decision to deny the request for disclosure of the CVRs, it may request
an advisory opinion from the Attorney General. See A.R.S. § 41-193(A)(7)
(requiring Attorney General to “render a written opinion on any question
of law” when requested by “any public officer of this state or a county
attorney”).
4A public body’s preemptive lawsuit—triggered by nothing more

than a person or group seeking public records—also arguably runs afoul of
Arizona’s public records laws. Under that scheme, a requesting party is
authorized to seek relief by special action if the public body denies a request

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SANTA CRUZ COUNTY v. AUDIT USA
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the County’s complaint neither states an actual controversy nor a ripe one,
we conclude the superior court did not err in determining that the County’s
declaratory action is non-justiciable.

II. Attorney Fees

¶14 The superior court awarded AUDIT USA approximately
$20,000 in attorney fees and costs. This amount reflects a portion of the fees
AUDIT USA had requested under A.R.S. § 12-348. On cross-appeal, AUDIT
USA contends the court abused its discretion by denying additional fees
under A.R.S. §§ 12-349(A) and 12-350.5 Specifically, AUDIT USA asserts
that the County’s claims lacked substantial justification.

for records. See § 39-121.02(A). As AUDIT USA observes, the scheme
contains no parallel provision authorizing the public body to challenge the
lawfulness of a request. We acknowledge that granting public bodies such
authority would burden a requestor’s statutory right to seek public records
with the risk of defending a lawsuit. Such a burden could frustrate the
purpose for which our public records laws were enacted: to promote
transparency in government by “allow[ing] the public access to official
records and other government information so that the public may monitor
the performance of government officials and their employees.” Phx.
Newspapers, Inc. v. Keegan, 301 Ariz. 344, ¶ 33 (App. 2001) (quoting 1991 Op.
Ariz. Att’y Gen. I91-004, at 6). But we also acknowledge that the County,
by filing a declaratory judgment action, would avoid improperly denying
a public records request—an action that would arguably promote
transparency in government. Because we have affirmed the dismissal of
the declaratory judgment before us on other grounds, and because the
superior court did not address the question, we do not resolve whether the
terms of our public records laws implicitly preclude public bodies from
initiating such actions.
5AUDIT USA also argues that the superior court abused its
discretion in denying its request for additional attorney fees under A.R.S.
§ 12-349(B) because the court did not hold a “culprit hearing” to allocate
fees between party and counsel. A sanctioned party may request a culprit
hearing to determine who is at fault for the sanction. See Marquez v. Ortega, 231 Ariz. 437, ¶ 26 (App. 2013). However, a prerequisite for a culprit
hearing is that there must first be a sanctioned party. Here, because there
was no sanctioned party, there was no basis for a culprit hearing, and thus
the court did not abuse its discretion in denying AUDIT USA’s request.

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SANTA CRUZ COUNTY v. AUDIT USA
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¶15 Section 12-349(A)(1) provides that a court may award
attorney fees as a sanction if it finds that a claim was brought “without
substantial justification,” meaning that the claim was both groundless and
not made in good faith. See § 12-349(F). As our supreme court explained in
Arizona Republican Party v. Richer, “a claim is ‘not made in good faith’ if (1) it
is groundless and (2) the party or attorney knows or should know that it is
groundless, or is indifferent to its groundlessness, but pursues it anyway.”
257 Ariz. 237, ¶ 38 (2024).

¶16 Under this framework, the superior court did not abuse its
discretion in denying AUDIT USA’s request for additional attorney fees.
While the County’s claim was ultimately unsuccessful, the record does not
support a finding that it was brought “without substantial justification” as
defined by § 12-349(F). That standard requires more than a failed legal
position; it demands a showing that the claim was both groundless and not
made in good faith, such that the claiming party knew or should have
known the claim lacked merit. See Richer, 257 Ariz. 237, ¶ 38.

¶17 Here, the issue raised by the County was not novel in
Arizona. Although the County permitted the disclosure of CVRs following
the 2020 election, legal uncertainty surrounding the release of such records
persisted. The County’s concerns were justified, particularly in light of
subsequent litigation in other counties. See AUDIT-USA v. Maricopa County, 254 Ariz. 536, ¶ 7 (App. 2023) (determining CVRs properly withheld due to
statutory restrictions). Thus, although the County’s filing was procedurally
defective, the concerns underlying it were supported by a plausible reading
of applicable statutes and a genuine effort to clarify legal obligations in the
face of conflicting statutes. The superior court was in the best position to
evaluate whether the County’s conduct in filing a non-justiciable action
crossed the line from mistaken to sanctionable. The court concluded that it
did not. We find no reason to disturb that determination.

¶18 Moreover, our prior decision in this case, in which we granted
a remand on the question of justiciability, supports the superior court’s
conclusion that the County’s belief that it had brought a justiciable claim,
while ultimately mistaken, was not frivolous. Accordingly, given the
two-prong test under § 12-349, the court reasonably determined that the
County’s claim, while legally flawed, was not groundless and was not
pursued in bad faith or with conscious disregard for its merits. Because this
determination rests on a discretionary assessment of the facts and
circumstances, and because the court is afforded broad discretion in making
such determinations, we affirm the denial of additional attorney fees.

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SANTA CRUZ COUNTY v. AUDIT USA
Opinion of the Court

¶19 AUDIT USA requests its attorney fees and costs on appeal
pursuant to § 39-121.02(B). Because AUDIT USA is the “substantially
prevailing party” in a dispute arising from a public records request, we
exercise our discretion to grant those fees and costs. Id.

Disposition

¶20 For the foregoing reasons, we affirm the judgment of the
superior court.

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