SIMMS v. ARIZONA RACING COMMISSION

IN THE

SUPREME COURT OF THE STATE OF ARIZONA

RONALD A. SIMMS,
Plaintiff/Appellant, Cross-Appellee,

v.

ARIZONA RACING COMMISSION,
Defendant/Appellee, Cross-Appellant,

and

JEREMY E. SIMMS, ET AL.,
Defendants/Appellees, Cross-Appellants.

No. CV-25-0079-PR
Filed May 14, 2026

Appeal from the Superior Court in Maricopa County
The Honorable Timothy J. Thomason, Judge, Retired
No. LC2016-000505-001
REVERSED AND REMANDED

Opinion of the Court of Appeals, Division One
259 Ariz. 415 (App. 2025)
VACATED

COUNSEL:

Nathan J. Novak, Cole Pedroza LLP, San Marino, CA; and Dominic E.
Draye (argued), Matthew P. Hoxsie, Greenberg Traurig LLP, Phoenix,
Attorneys for Ronald A. Simms

Michael C. Manning, Michael C Manning PLLC, Phoenix; and James M.
Torre (argued), Zwillinger Wulkan PLC, Phoenix, Attorneys for Jeremy E.
Simms, TP Racing LLLP, and Bell Racing LLC
 SIMMS V. ARIZONA RACING COMMISSION
Opinion of the Court

Christopher L. Hering (argued), Cameron C. Artigue, Gammage &
Burnham, P.L.C., Phoenix, Attorneys for Arizona Racing Commission

Kristin K. Mayes, Arizona Attorney General, Joshua D. Bendor, Solicitor
General, Luci D. Davis, Kathryn E. Boughton, Assistant Attorneys General,
Phoenix, Attorneys for Amicus Curiae Arizona Attorney General's Office

Ilan Wurman, In Propria Persona, Minneapolis, MN, Amicus Curiae Ilan
Wurman

Aditya Dynar, Pacific Legal Foundation, Arlington, VA, Attorney for
Amicus Curiae Pacific Legal Foundation

VICE CHIEF JUSTICE LOPEZ authored the Opinion of the Court, in which
CHIEF JUSTICE TIMMER, and JUSTICES BOLICK, BEENE, KING, CRUZ,
and JUDGE KELLY * joined.

VICE CHIEF JUSTICE LOPEZ, Opinion of the Court:

¶1 We consider three questions arising from the 2021
amendments to A.R.S. § 12-910(F), a provision concerning the scope of
judicial review of administrative decisions: (1) whether the Legislature
eliminated substantial-evidence review; (2) what standard a reviewing
court applies to an administrative agency’s factual findings in a proceeding
brought by or against a regulated party (“Regulated-Party Proceeding”);
and (3) whether appellate courts must independently review an agency’s
factual findings de novo.

¶2 We hold that the 2021 amendments did not eliminate
substantial-evidence review. In a Regulated-Party Proceeding, the
reviewing court—a superior court—independently determines all
questions of fact without deference to the agency and then asks whether the

*
Justice William G. Montgomery has recused himself from this case.
Pursuant to article 6, section 3 of the Arizona Constitution, Judge Michael
F. Kelly of the Arizona Court of Appeals, Division Two, was designated to
sit in this matter.

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agency’s action is supported by substantial evidence based on those
independently determined facts. Appellate courts, however, do not repeat
that independent factual inquiry; they review the superior court’s factual
findings under ordinary appellate standards while independently
reviewing the legal question of whether the agency’s action is supported by
substantial evidence.

BACKGROUND

¶3 This case arises from competing claims to a horse-racing
license at a racetrack in Phoenix, Arizona. While this case has an extensive
factual and procedural history spanning twenty-five years, see Simms v.
Simms, 259 Ariz. 415, 421–24 ¶¶ 3–24 (2025), because the questions before
us are purely ones of statutory construction, we confine our background
discussion to the procedural posture necessary to frame those questions.

¶4 Ronald A. Simms (“Ron”) applied for a horse-racing license,
which the Arizona Department of Racing denied. Ron appealed to the
Office of Administrative Hearings, and an Administrative Law Judge
(“ALJ”) recommended that his application be granted. After the
Legislature transitioned the Department of Racing into the Division of
Racing within the Arizona Department of Gaming, 2015 Ariz. Sess. Laws,
ch. 19, § 2 (1st Reg. Sess.), the Division of Racing’s director inherited the
ALJ’s recommendation. Because the Division of Racing took no action
within thirty days, the recommendation became the final agency decision
by operation of law. See A.R.S. § 5-104(D). As persons aggrieved by that
decision, Jeremy Simms, Bell Racing, LLC, and TP Racing, L.L.L.P.
(collectively “TP Racing”) appealed to the Arizona Racing Commission
(“Commission”). See Ariz. Admin. Code R19-2-124. The Commission
subsequently rejected the ALJ’s recommendation and denied Ron a license
in November of 2016. Ron, as a “regulated party,” appealed to the superior
court. Without holding an evidentiary hearing, the superior court affirmed
the Commission’s decision, concluding it was supported by substantial
evidence. Ron appealed, and the Commission and TP Racing
cross-appealed. The court of appeals vacated the superior court’s judgment
and remanded, directing entry of judgment for Ron.

¶5 We granted review to address three recurring questions of
statewide importance concerning the proper framework for judicial review

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under § 12-910(F) as amended in 2021. We have jurisdiction under article 6,
section 5(3) of the Arizona Constitution and A.R.S. § 12-913.

DISCUSSION

¶6 The questions before us involve issues of statutory
interpretation, which we review de novo. See Planned Parenthood Ariz., Inc.
v. Mayes, 257 Ariz. 137, 142 ¶ 13 (2024). “When interpreting statutes, we
begin with the text.” Franklin v. CSAA Gen. Ins. Co., 255 Ariz. 409, 411 ¶ 8
(2023). “We interpret statutory language in view of the entire text,
considering the context and related statutes on the same subject.” Nicaise v.
Sundaram, 245 Ariz. 566, 568 ¶ 11 (2019). The primary aim of statutory
interpretation is “to give effect to legislative intent.” Premier Physicians Grp.,
PLLC v. Navarro, 240 Ariz. 193, 195 ¶ 9 (2016) (quoting Parrot v.
DaimlerChrysler Corp., 212 Ariz. 255, 257 ¶ 7 (2013)). The plain language of
a statute, as the law, is the best indication of that intent, which we apply
“unless an absurd or unconstitutional result would follow.” Id.

I.

¶7 The proper interpretation of § 12-910(F) resolves both the first
and second questions presented in this case—whether the Legislature
eliminated substantial-evidence review, and what standard a reviewing
court applies to an administrative agency’s factual findings in a
Regulated-Party Proceeding.

¶8 We begin with § 12-910(F)’s text, which is the default
framework for judicial review of agency actions:

After reviewing the administrative record and
supplementing evidence presented at the evidentiary
hearing, the court may affirm, reverse, modify or vacate and
remand the agency action. The court shall affirm the agency
action unless the court concludes that the agency’s action is
contrary to law, is not supported by substantial evidence, is
arbitrary and capricious or is an abuse of discretion. In a
proceeding brought by or against the regulated party, the
court shall decide all questions of law, including the
interpretation of a constitutional or statutory provision or a
rule adopted by an agency, without deference to any previous

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determination that may have been made on the question by
the agency. In a proceeding brought by or against the regulated
party, the court shall decide all questions of fact without deference
to any previous determination that may have been made on the
question by the agency. Notwithstanding any other law, this
subsection applies in any action for judicial review of any
agency action that is authorized by law.

(Emphasis added.) Prior to 2021, subsection (F) did not include the fourth
(italicized) sentence. See 2021 Ariz. Sess. Laws ch. 281 § 1 (1st Reg. Sess.).
The parties here dispute what effect the Legislature’s 2021 amendment had
on the proper application of § 12-910(F).

A.

1.

¶9 We begin our interpretation of subsection (F) by examining it
within the broader structure of § 12-910 to understand its requirements and
operation. Subsection (E) defines the superior court’s record: “[t]he record
in the superior court shall consist of the record of the administrative
proceeding, and the record of any evidentiary hearing, or the record of the
trial de novo.” § 12-910(E). Subsection (F)’s introductory phrase—“[a]fter
reviewing the administrative record and supplementing evidence
presented at the evidentiary hearing”—tracks that definition precisely.
§ 12-910(F). Together, subsections (E) and (F) confirm that the default
proceeding involves review of an existing record—the record created
during the administrative process as supplemented by the superior court’s
evidentiary hearing—not the creation of a new one. This default
proceeding is the proceeding subsection (F) governs.

¶10 The Legislature authorized a different proceeding in limited
circumstances. Subsection (C) entitles qualifying parties to demand a trial
de novo when the agency did not hold a hearing or create a record.
§ 12-910(C). Subsection (D) extends that option to parties in proceedings
before certain agencies that regulate a profession or occupation.
§ 12-910(D). In those subsection (D) proceedings, the reviewing court hears
the case “as though it were an original proceeding” in a court of original
jurisdiction, creating its own record from scratch. Duncan v. Mack, 59 Ariz.
36, 40–42 (1942); see also Horne v. Superior Court, 89 Ariz. 289, 291 (1961).

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Notably, the Legislature used “trial de novo” in subsections (C) and (D) but
not in subsection (F). Where the Legislature uses different language in
different provisions, we presume a different meaning is intended. Burns v.
Ariz. Pub. Serv. Co., 254 Ariz. 24, 31 ¶ 28 (2022). Although subsection (F)
authorizes the superior court to conduct an evidentiary hearing to
supplement the administrative record, it does not authorize a full trial de
novo. It requires the reviewing court to independently determine questions
of fact and law from within the existing administrative record with
supplemental factfinding—a different process than a trial de novo, yet one
that still embodies independent review.

¶11 Importantly, each sentence of subsection (F) carries a distinct
function. The first identifies available dispositions. § 12-910(F). The second
imposes a limiting principle: the court must affirm the agency action unless
one of four defects is present—“the action is contrary to law, is not
supported by substantial evidence, is arbitrary and capricious or is an abuse
of discretion.” Id. The third and fourth sentences prescribe how the court
handles legal and factual questions in Regulated-Party Proceedings: it must
decide them “without deference to any previous determination that may
have been made on the question by the agency.” Id. And the fifth makes
subsection (F) the default for all authorized judicial review. Id. A cardinal
principle of statutory construction requires that every clause and word be
given independent effect. Premier Physicians Grp., 240 Ariz. at 196 ¶ 16.
Applying that principle, the second sentence governs the standard for
evaluating whether the agency’s action may stand. The fourth sentence
governs the method by which the court determines the facts that inform that
standard. These provisions operate at different levels of analysis. The 2021
amendment altered the latter (method) without disturbing the former
(standard).

2.

¶12 With the proper construction of subsection (F) in mind, we
turn to the parties’ arguments concerning whether the Legislature
eliminated substantial-evidence review, and the standard a reviewing court
applies to an administrative agency’s factual findings in a Regulated-Party
Proceeding.

¶13 The Commission and TP Racing argue that the
substantial-evidence clause survived the 2021 amendment unchanged and

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continues to require deference to the agency’s factual findings. In his
supplemental briefing, Ron argues the opposite—that non-deferential
factfinding is incompatible with substantial-evidence review, so the
amendment must have eliminated substantial-evidence review altogether
in Regulated-Party Proceedings. Both miss the mark.

¶14 Both parties’ positions rest on the same mistaken premise that
the Legislature could not retain the substantial-evidence standard while
simultaneously eliminating deference to agency factfinding.
Section 12-910(F)’s text demonstrates that the Legislature accomplished
precisely that result when it amended the statute in 2021. As explained,
subsection (F) provides that a reviewing court “shall affirm the agency
action unless” it is “not supported by substantial evidence.” § 12-910(F).
That clause is categorical, mandatory, and the 2021 amendment left it intact.
See 2021 Ariz. Sess. Laws ch. 281 § 1 (1st Reg. Sess.). Thus, we conclude that
the Legislature did not eliminate substantial-evidence review.

¶15 Instead, what the 2021 amendment changed is who
determines the facts on which the substantial-evidence inquiry operates.
Before the amendment, courts “defer[red] to the agency’s factual findings
and affirm[ed] them if supported by substantial evidence” because no
statutory provision set forth a specific standard of review for issues of fact.
Gaveck v. Ariz. State Bd. of Podiatry Exam’rs, 222 Ariz. 433, 436 ¶ 11 (App.
2009); see Webster v. State Bd. of Regents, 123 Ariz. 363, 365–66 (App. 1979).
That practice meant reviewing courts would affirm an agency’s factual
findings if, viewing the evidence favorably to the agency, a reasonable
person could reach the agency’s result—even if two inconsistent factual
conclusions were supported by the record. Gaveck, 222 Ariz. at 436 ¶ 11.
The fourth sentence of subsection (F) eliminated that practice. See
§ 12-910(F). Courts must now independently determine all questions of fact
without deference to any agency determination. Id. That change does not
eliminate substantial-evidence review for an agency action; it changes the
inputs to that standard. The court independently determines the facts and
then asks whether the agency’s action is supported by substantial evidence
based on those facts. The agency’s own factfinding plays no controlling
role.

¶16 This reading gives the substantial-evidence clause and the
“no deference” directive independent effect without rendering either
superfluous. The substantial-evidence clause continues to define when a

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reviewing court must affirm or set aside agency action. The “no deference”
directive defines how the court establishes the facts. The two operate in
sequence: the court independently determines the facts, then applies the
governing standard to the agency’s action based on those facts.

¶17 The Commission and TP Racing cannot reconcile their
position with subsection (F)’s text. They contend the substantial-evidence
standard survived and continues to require courts to defer to the agency’s
factual findings. However, when construing statutes, courts should “give
meaning to ‘each word, phrase, clause, and sentence so that no part will be
void, inert, redundant, or trivial.’” Mussi v. Hobbs, 255 Ariz. 395, 398 ¶ 13
(2023) (quoting City of Phoenix v. Yates, 69 Ariz. 68, 72 (1949)). Here, the
Commission and TP Racing’s reading would effectively nullify the fourth
sentence of subsection (F) in Regulated-Party Proceedings because it would
require reviewing courts to defer on factual determinations, even though
the Legislature directed, without qualification, that courts “shall decide all
questions of fact without deference to any previous determination that may
have been made on the question by the agency.” § 12-910(F).

¶18 The Commission separately argues that the fourth sentence
does not apply here because Ron is not a “regulated party” within the
meaning of subsection (F). The Commission contends that “the regulated
party” in subsection (F) refers only to parties regulated by agencies
enumerated in subsection (D), reasoning that the fourth sentence of
subsection (F) must be read together with subsection (D) because they were
both added by the Legislature in the same amendment. See 2021 Ariz. Sess.
Laws ch. 281 § 1 (1st Reg. Sess.). Although the parties waived the argument
that Ron is not a regulated party because they did not dispute whether he
was a regulated party below, Simms, 259 Ariz. at 432 ¶ 64, we address the
merits of the argument to prevent any lingering confusion. Kamma v. Gaun,
584 P.3d 534, 536–37 ¶ 7 (Ariz. App. 2025) (explaining that courts may
exercise discretion on whether to address waived arguments on appeal
because waiver is procedural, not jurisdictional); see also City of Tempe v.
Fleming, 168 Ariz. 454, 456 (App. 1991).

¶19 Fundamentally, the Commission’s reading misconstrues the
statute because subsection (F) asks only whether the proceeding involves
the party regulated by the agency whose action is under review, not
whether that agency appears on subsection (D)’s list. § 12-910(F). The fifth
sentence of subsection (F) confirms its broad scope: “Notwithstanding any

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other law, this subsection applies in any action for judicial review of any
agency action that is authorized by law.” Id. (emphasis added). That
language forecloses limiting the provision to a particular category of
agencies. Moreover, the Commission’s own enabling legislation subjects its
decisions to judicial review under title 12, chapter 7, article 6—Judicial
Review of Administrative Decisions—the very provision that includes
§ 12-910. See A.R.S. § 5-108.01(B).

¶20 Similarly, the argument that the fourth sentence applies only
in a trial de novo under subsection (D) fails because subsection (F) and trial
de novo proceedings are mutually exclusive tracks. See § 12-910(D)–(F).
Applying the fourth sentence only in trial de novo proceedings would
render it superfluous because a trial de novo creates an entirely new record,
leaving no prior agency factual determination to defer to in the first place.
See Duncan, 59 Ariz. at 40–42. The instruction to decide facts “without
deference” to “any previous determination” by “the agency” has operative
meaning only outside the trial de novo context—which is precisely where
subsection (F) applies.

¶21 The Commission and TP Racing further argue that the “no
deference” directive does not reach the substantial-evidence inquiry
because whether substantial evidence exists is a question of law, not a
question of fact, and the fourth sentence applies only to “questions of fact.”
They rely on Batty v. Arizona Med. Bd., 253 Ariz. 151, 157 ¶ 23 (App. 2022),
which observed that whether substantial evidence supports an agency
decision is a question of law. While the premise is sound, the conclusion is
not. Whether substantial evidence supports the agency’s action is indeed a
legal question—but one that necessarily depends on what facts the
reviewing court adopts. Under the amended statute, those facts must be
determined by the court, not the agency. § 12-910(F). Accepting the
Commission and TP Racing’s framing would allow courts to continue
deferring to agency factfinding through a legal-question classification,
directly contrary to the Legislature’s express command.

¶22 Importantly, although Batty was decided after the 2021
amendment, the case involved no genuine factual dispute. See Batty,
253 Ariz. at 154 ¶ 11 n.2 (noting that the court need not determine “the
effect, if any, of the [2021] amendment” on the case because “the essential
facts [were] undisputed”). Thus, the court’s observation that the
substantial-evidence inquiry is a legal question was made in a context that

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did not require it to address how the fourth sentence of subsection (F)
applies to that inquiry. Id. To the extent Batty could be read to suggest the
fourth sentence has no bearing on the substantial-evidence inquiry in
Regulated-Party Proceedings, we disapprove it.

¶23 Section 12-910(G) confirms our interpretation. When the
Legislature eliminated deference to agency legal interpretations in 2018, it
simultaneously added subsection (G), which provides that in certain health
care appeals, courts affirm unless the agency action is not supported by
substantial evidence, contrary to law, arbitrary and capricious, or an abuse
of discretion—the deferential framework that existed under the
pre-amendment version of subsection (F). § 12-910(G); 2018 Ariz. Sess.
Laws ch. 180 § 1 (2d Reg. Sess.). Subsection (G) preserved the old
framework for a specific category of regulated-party cases. If the
Commission and TP Racing were correct in arguing that the old framework
also survived in all other regulated-party cases, it is difficult to discern
subsection (G)’s function. See Nicaise, 245 Ariz. at 568 ¶ 11 (explaining that
courts interpret statutes to give effect to every provision and avoid readings
that render any part superfluous). Subsection (G) makes sense only if
subsection (F), as amended, operates differently in Regulated-Party
Proceedings—which is precisely our interpretation here.

¶24 Ron’s reading is equally inconsistent with the text. He argues
that because the fourth sentence eliminates deference to agency factfinding,
and because substantial-evidence review is a form of deference, the two are
in conflict, and, therefore, the amendment must have eliminated the
substantial-evidence standard in Regulated-Party Proceedings. But a
substantial-evidence review does not itself require a court to defer to what
facts the agency found; it requires the court to ask whether the agency’s
action is supported by sufficient evidence. See supra ¶ 15. Under the
amended statute, that question is answered based on the facts the court
independently determines. Accepting Ron’s position would require
reading the substantial-evidence clause out of subsection (F) in
Regulated-Party Proceedings—contrary to the statute’s plain text.

B.

¶25 In addition to explaining the interplay between
subsection (F)’s second and fourth sentences, we clarify four additional

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points implicated by the parties or the court of appeals to ensure this
framework’s proper application.

¶26 First, “agency action” in § 12-910 refers to the final
administrative decision—the determination that concludes the
administrative review process and from which judicial review is sought.
See A.R.S. §§ 12-902(A)(2), -904(A), -910(A). Since the Legislature codified
§ 12-910(F)’s standards of review in 1996, Arizona courts have understood
the statute’s reference to “agency action” to mean the reviewable final
decision. See 1996 Ariz. Sess. Laws ch. 102 § 16 (2d Reg. Sess.); see, e.g., Sw.
Paint & Varnish Co. v. Ariz. Dep’t of Env’t Quality, 194 Ariz. 22, 25 ¶ 15 (1999).
Nothing in the 2021 amendment altered that understanding. See 2021 Ariz.
Sess. Laws ch. 281 § 1 (1st Reg. Sess.). Courts reviewing agency action
under subsection (F) assess whether the final administrative decision—and
the justifications it contains—provides sufficient support for the challenged
agency action. The administrative decision is the document courts consult
to understand the agency’s reasoning; it does not become a separate object
of substantial-evidence review divorced from the underlying action.

¶27 Second, a “regulated party” seeking to invoke § 12-910(F)’s
independent factual review must identify the specific factual findings it
contests and explain why the record does not support them. See A.R.S.
§ 12-909(A) (“The notice of appeal shall contain a statement of the findings
and decision or part of the findings and decision sought to be reviewed.”).
That identification creates the “question of fact” that the reviewing court
resolves without deference. See § 12-910(F). The reviewing court then
independently evaluates the contested findings against the administrative
record—including the ALJ’s written findings, A.R.S. § 41-1092.08(A), and
any written justification the agency provided for modifying or rejecting
those findings, A.R.S. § 41-1092.08(B)—and, after supplementing the
evidence at an evidentiary hearing, reaches its own determination.
Uncontested agency findings are not independently reviewed as a matter
of course; the court addresses only what the regulated party has placed in
dispute. See A.R.S. § 12-909(A).

¶28 Third, beyond pure questions of fact and law, § 12-910(F) also
addresses mixed questions—those requiring a court to apply a legal
standard to established facts. Arizona courts have long decided mixed
questions independently. See, e.g., Sanders v. Novick, 151 Ariz. 606, 608
(App. 1986) (noting that courts may “substitute our judgment for agency

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conclusions regarding the legal effect of [the agency’s] factual findings”).
The third sentence of subsection (F) confirms that independent review of
legal questions—including the application of a legal standard to
determined facts—remains the rule. § 12-910(F); see also Guerrero-Lasprilla
v. Barr, 589 U.S. 221, 227 (2020) (explaining that the “phrase ‘questions of
law’ includes the application of a legal standard to undisputed or
established facts”). The 2021 amendment reinforces that conclusion: by
requiring non-deferential review of both factual and legal questions,
subsection (F) necessarily also requires non-deferential review of mixed
questions of fact and law.

¶29 Last, the “no deference” command under subsection (F)’s
third and fourth sentences is absolute as to questions of law and
fact—including those involving agency expertise. A reviewing court
independently determines all such questions without deferring to the
agency’s conclusions, even where the agency possesses specialized
knowledge. What the amended statute does not do, however, is authorize
a court to substitute its own policy judgment for the agency’s on matters
the Legislature has committed to the agency’s discretion. See DeGroot v.
Ariz. Racing Comm’n, 141 Ariz. 331, 336 (App. 1984) (explaining that a
reviewing court may not substitute its own judgment for the agency’s on
matters committed to agency discretion). We note that the court of appeals
relied on DeGroot for the proposition that reviewing courts may not
substitute their judgment for the agency’s “where . . . agency expertise [is]
involved,” and concluded that deference to agency discretion and expertise
survives the 2021 amendment in Regulated-Party Proceedings. Simms, 259
Ariz. at 431 ¶¶ 57–58 (alteration in original) (quoting 141 Ariz. at 336). To
the extent DeGroot supports deference to the agency’s factual
determinations or legal interpretations on grounds of expertise, that
reading does not survive the 2021 amendment to § 12-910(F). The
Legislature directed courts to decide all questions of law and fact without
deference and created no expertise exception. We cite DeGroot here solely
for the narrow proposition that a reviewing court may not substitute its
own policy judgment for the agency’s on matters the Legislature has
committed to the agency’s discretion—a constraint that is distinct from, and
does not restore, deference to agency factfinding or legal interpretation.

¶30 Where a statute grants the agency discretionary authority, the
reviewing court independently determines whether the agency acted
within the legal bounds of that authority—a legal question decided without

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deference. See Lewis v. Ariz. Dep’t of Econ. Sec., 186 Ariz. 610, 615 (App.
1996). If the agency acted within those bounds, the court cannot then
impose a different result merely because it would have exercised the
discretion differently. See DeGroot, 141 Ariz. at 336. That prohibition on
judicial substitution of judgment is not deference—it is the boundary
inherent in judicial review. Whether the agency’s discretionary action was
nonetheless arbitrary, capricious, an abuse of discretion, or unsupported by
substantial evidence is a separate legal question the court answers
independently under the second sentence of subsection (F), based on the
facts the court has independently determined.

C.

¶31 Accordingly, we hold that § 12-910(F) did not eliminate
substantial-evidence review, and the statute operates as follows: In a
Regulated-Party Proceeding, the reviewing court independently
determines all questions of law, fact, and their application, without
deferring to any agency determination on those questions. The court then
must affirm the agency’s final action unless it concludes the action is
contrary to law, is not supported by substantial evidence—judged against
the facts the court independently determines—is arbitrary and capricious,
or is an abuse of discretion. § 12-910(F). Where the agency acted within its
delegated discretion, the reviewing court must defer to the proper exercise
of that discretion after independently determining the underlying facts and
law.

II.

¶32 We now turn to the third question presented in this
case—whether appellate courts must independently review an agency’s
factual findings de novo. Section 12-910(F) only speaks to “the court”
reviewing agency action—language situated in the superior court’s role as
the initial judicial forum, which receives the administrative record under
subsection (E), holds any evidentiary hearing, and independently
determines questions of fact and law without deferring to the agency.
§ 12-910(A)–(B), (E)–(F). Thus, the statute does not contemplate the
appellate courts’ review of an agency’s factual findings de novo, nor does
it address appellate review of the superior court’s ruling. Appellate review
of administrative proceedings is separately addressed. A.R.S. § 12-913
(“The final decision, order, judgment or decree of the superior court entered

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in an action to review a decision of an administrative agency may be
appealed to the supreme court.”). Consequently, nothing in § 12-910(F)
displaces the traditional division of responsibility between trial courts and
appellate courts.

¶33 The standard for appellate review of a trial court’s factual
findings is well established. Appellate courts defer to a trial court’s factual
findings if they are reasonably supported by the record, but they
independently review the ultimate legal question. State v. Adair, 241 Ariz.
58, 60 ¶ 9 (2016). We reaffirmed that standard in State v. Alvarez-Soto, where
we rejected the argument that appellate courts may engage in de novo
factual review. 579 P.3d 1227, 1234–35 ¶¶ 31–34 (Ariz. 2025). There, we
observed that the trial court is uniquely situated to evaluate evidence in
context and that designating any category of evidence as being subject to
independent appellate review erases the distinction between deferential
review of factual findings and de novo review of legal conclusions. Id.
at 1234 ¶ 32. That principle applies equally here. The superior court,
having either (1) reviewed the administrative record, supplemented the
evidence by evidentiary hearing, and exercised its independent judgment
on disputed factual questions, or (2) conducted a trial de novo, then stands
in the same position as any trial court whose findings an appellate court
reviews under Adair. Section 12-910(F) requires the superior court to
independently determine any challenged facts. It does not convert
appellate courts into original factfinding tribunals.

¶34 Critically, subsection (F)’s prohibition on deference runs
against an agency’s challenged determinations—not those of an ALJ.
Under Arizona law, the Office of Administrative Hearings and the ALJs
who staff it are separate from the agency involved in the proceeding. See
A.R.S. § 12-901(1) (defining “agency”); A.R.S. § 12-904(B) (differentiating
“the office of administrative hearings [and] the agency” as distinct entities).
An ALJ’s recommended findings are part of the administrative record the
superior court reviews under subsection (E); they are not “previous
determination[s] . . . made on the question by the agency” within the
meaning of the fourth sentence of subsection (F). See § 12-910(F).
Accordingly, subsection (F) neither requires a reviewing court to defer to
ALJ findings, nor forecloses the court from giving those findings weight in
the exercise of its independent judgment.

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¶35 Whether to credit an ALJ’s factual determinations remains a
matter for the reviewing court’s independent evaluation of the record. A
reviewing court conducting proceedings pursuant to subsection (F) may
find an ALJ’s findings persuasive, particularly on credibility questions, for
the same reason appellate courts defer to trial courts that have observed live
testimony: the ALJ may be better positioned than a reviewing court
operating on a cold record to assess witness demeanor and credibility. See
In re Pima Cnty. Juv. Action No. J-63212-2, 129 Ariz. 371, 375 (1981) (“One of
the most important principles in our judicial system is the deference given
to the finder of fact who hears the live testimony of witnesses because of his
opportunity to judge the credibility of those witnesses.” (citation
modified)); cf. Ritland v. Ariz. Bd. of Med. Exam’rs, 213 Ariz. 187, 191 ¶ 13
(App. 2006) (noting that, although the Arizona State Board of Medical
Examiners is not bound by an ALJ’s credibility findings, courts “recognize
the importance of the ALJ’s observation of the demeanor and attitude of the
witnesses when rendering findings of fact as to those witnesses’
credibility”). But this is a matter of evidentiary weight within the reviewing
court’s independent judgment, not a statutory mandate. What the statute
forbids is deference to the agency; it imposes no rule, in either direction,
regarding the weight the reviewing court must assign to an ALJ’s findings.

¶36 The court of appeals’ treatment of ALJ findings in this case
illustrates the error this framework is meant to correct. The court of appeals
relied on Batty for the proposition that appellate courts “engage in the same
process as the superior court” when reviewing an administrative action.
253 Ariz. at 154 ¶ 11. Batty does not require an appellate court to
independently re-determine facts already found by the superior court. The
case involved no genuine factual dispute, and its statement that appellate
courts “engage in the same process” reflects that both courts owe no
deference to the agency in reviewing questions of law decided by the
agency—not that appellate courts must conduct original factfinding. See id.
at 154–55 ¶ 11 & n.2. Reading Batty to require appellate courts to
re-determine the superior court’s factual findings de novo would collapse
the distinction Adair and Alvarez-Soto preserve. We disapprove of that
reading of Batty.

¶37 Thus, an appellate court reviewing a superior court’s ruling
in a Regulated-Party Proceeding under § 12-910(F) defers to the superior
court’s factual findings if they are reasonably supported by the record. See
Adair, 241 Ariz. at 60 ¶ 9. It independently reviews the legal question of

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Opinion of the Court

whether, based on those findings, the agency’s action satisfies the standard
in § 12-910(F). Appellate courts are not permitted to independently
re-determine the superior court’s factfinding. This framework governs ALJ
credibility determinations at the appellate stage as well. An appellate court
reviewing the superior court’s factual findings—including any finding that
credited or discredited an ALJ credibility determination—defers to those
findings if they are reasonably supported by the record. See Adair, 241 Ariz.
at 60 ¶ 9.

CONCLUSION

¶38 For the foregoing reasons, we vacate the court of appeals’
entry of judgment in Ron’s favor, vacate its opinion, and reverse the
superior court’s ruling affirming the Commission’s decision. Because
neither the court of appeals nor the superior court applied the framework
we announce today, the superior court must independently determine all
questions of fact and law without deferring to the Commission’s findings
and then determine whether the Commission’s action is supported by
substantial evidence based on those independently determined facts. We
are not positioned to apply that framework—the superior court’s
independent factual determination is the required first step, which must be
made in the first instance in that court. See § 12-910(A)–(B), (E)–(F).
Accordingly, we remand to the superior court for further proceedings
consistent with this Opinion.

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