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For 15 years, until 2013, the Arizona Board of Regents collected fees from university students in the state on behalf of the Arizona Students' Association, funds that supported the group's work. But that year, the board -- aggravated by the association's active lobbying for a ballot initiative that would have boosted education funding -- first suspended collection of the student fees, and then (in response to criticism that it had acted politically) said it would collect fees only from students who opted to pay them.

In so doing, members of the Arizona board seemingly violated the student association's First Amendment rights, the U.S. Court of Appeals for the Ninth Circuit ruled Wednesday.

"The collection and remittance of funds is a valuable government benefit, and a change in policy undertaken for retaliatory purposes that results in the deprivation of those funds implicates the First Amendment," the appeals court said in its opinion.

The panel's decision partially overturns a lower court ruling dismissing the students' claims, and directs the lower court to reconsider the case based on the appeals court's findings.

The lower court dismissed the student group's claims citing government immunity, and it wasn't entirely wrong to conclude that the 11th Amendment protects state agencies like the Arizona Board of Regents from such lawsuits, the appeals panel found. But the lower court should have let the student association amend its complaint to name as defendants individual regents, who are not shielded from such suits.

The lower court also erred in failing to view the board's actions as potentially resulting from retaliation, the appeals court found.

The Arizona Board of Regents did not have any obligation to collect fees on behalf of the student group (which it began doing in 1998 after the board stopped funding the association directly with state funds, and students voted to impose a small fee on themselves). But "having done so for 15 years at no cost, ABOR could not deprive the ASA of the benefit of its fee collection and remittance services in retaliation for the ASA’s exercise of its First Amendment rights," the appeals panel wrote.

The board did so -- encouraged by then-Governor Janice Brewer, an ex officio regent -- because its members were unhappy that the student association lobbied for Proposition 204, which would have made permanent an earlier tax increase that supported education. The measure was defeated in November 2012.

The federal district court failed to recognize that the board's decision to stop collecting the fees deprived the student association of a valuable government benefit, the deprivation of which can trigger a First Amendment claim. (The board also refused to distribute to the student association fees from spring 2013 that it had collected before stopping that practice.)

"The ASA and ABOR’s dispute is more than a disagreement between similarly situated political rivals," the appeals panel wrote. "ABOR represents the state’s most powerful authority in determining the policies, delivery, governance, management and accessibility of Arizona’s public higher education. The ASA is composed entirely of public university students, and it represents the collective voice of those students. The disparity in power between ABOR and Arizona’s public university students is vast."

A spokeswoman for the Arizona board said the regents would discuss their options with lawyers at a meeting next week.

A lawyer for the student association, Stephen Montoya, said via email: "We are gratified by the Ninth Circuit's unanimous opinion vindicating the free speech rights of students against government retaliation. This is a big victory for free speech against encroachment by big government that will reverberate throughout public education. It's already been a long fight, but we look forward to presenting the facts establishing retaliation to a jury."

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