Arizona Supreme Court holds that a claim is not made in good faith if the party or attorney knows or should know that it is groundless, or is indifferent to its groundlessness, but pursues it anyway.

Following the 2020 General Election, the Arizona Republican Party filed an action challenging the manner in which Maricopa County elections conducted a mandatory hand count because it was based on sampling from voting centers, rather than precincts. The trial court ultimately dismissed the complaint and awarded fees under A.R.S. § 12-349(A)(1) and (F) because the Party’s claim was groundless and not made in good faith. Specifically, the trial court found the absence of good faith, in part, because the Party brought the claim for ulterior, pollical reasons. Although the court of appeals declined to embrace the trial court’s analysis, it did not offer an alternative. The Arizona Supreme Court granted review. After finding that the Party’s claim was not groundless, the Court turned to the absence of bad faith, which Arizona courts had never defined as it pertains to A.R.S. § 12-349(F).

By statute (A.R.S. § 12-349(A)(2)-(4)), a court may award fees if an attorney or party (1) brings or defends a claim solely or primarily for delay or harassment, (2) unreasonably spends or delays the proceeding, or (3) engages in abuse of discovery. In other words, each of these subsections provides a separate bad faith basis for a fees award. In contrast, a court may award fees under A.R.S § 12-349(A)(1) if a party brings a groundless claim and lacks good faith in doing so. The absence of good faith is not synonymous with the presence of bad faith. Instead, the absence of good faith means that a party or attorney knows or should know that the claim is groundless, or is indifferent to its groundlessness, but pursues it anyway. Therefore, a party’s indifference to a claim’s invalidity may constitute the absence of good faith even without an intent to harass or delay or other evidence of affirmative bad faith. Courts should evaluate good faith under § 12-349(A)(1) objectively. Because the desire to vindicate a legal right—even if in the election context and animated exclusively by political motives—does not constitute an absence of good faith, the trial court erred.

Justice Lopez authored the unanimous Opinion of the Court.

Posted by: Brandon T. Delgado