Two Phoenix alternative newspaper executives have won a crucial appeal in their lawsuit claiming that Maricopa County, Ariz., Sheriff Joseph Arpaio unlawfully arrested them in retaliation for articles criticizing his activities.

An en banc panel of U.S. Court of Appeals for the Ninth Circuit ruled on August 29 that Arpaio and attorney Dennis Wilenchik could not use governmental immunity to shield themselves from a lawsuit brought by the owners of the Phoenix New Times.

In a 72-page decision, the 11-judge panel held that Arpaio and Wilenchik must face trial for allegedly violating the constitutional rights of Michael Lacey and Jim Larkin. Judge Jay Bybee, who’d been on the losing end of a three-judge panel ruling that tossed publishers’ claims in 2010, wrote for the majority this time. The August 29 ruling followed a decision to rehear the case en banc.

Lacey and Larkin alleged that in 2007 they were hauled into jail in retaliation for reporting that Arpaio’s allies in the Maricopa County attorney’s office had unlawfully obtained grand jury subpoenas. The subpoenas demanded that the paper identify sources for articles critical of the sheriff, according to the complaint. Some of the articles questioned Arpaio’s real estate transactions.

Arpaio, sheriff of Maricopa County since 1993, has gained national attention for his harsh treatment of prisoners, including requiring them to wear pink underwear and reducing their meals to two per day. He is also known for his strict enforcement of laws targeting undocumental immigrants.

The Phoenix New Times, owned by Village Voice Media, published the subpoenas in 2007. Later, the plaintiffs alleged, Wilenchik sent unmarked police vehicles to their homes to arrest them. They were booked and held in county jail overnight. A judge later declared the subpoenas invalid.

The Ninth Circuit’s en banc ruling reversed a lower court holding that Arpaio and Wilenchik, a private-practice attorney appointed in 2007 as a special county prosecutor to investigate the newspaper’s activities, were entitled to qualified immunity from the plaintiffs’ constitutional claims. The appeals court reasoned that the lawsuit sufficiently pleaded claims of free-speech violations, false arrest and selective enforcement. Judge Richard Tallman, joined by Sandra Ikuta and Carlos Bea, dissented with regard to selective enforcement.

The court affirmed the lower court’s finding that the defendants were entitled to absolute immunity from Lacey’s and Larkin’s claims of malicious prosecution.

“Although Lacey and Larkin were arrested, they have not alleged that any process resulting in the initiation of criminal proceedings followed this arrest,” the court wrote.

At the same time, the appeals court affirmed the lower court ruling that then-County Attorney Andrew Thomas, who removed himself from involvement in the New Times matter and appointed Wilenchik to handle it, was entitled to absolute immunity on the constitutional claims. Chief Judge Alex Kozinski dissented on that point.

The court dismissed conspiracy claims against Thomas, but permitted the plaintiffs to replead them with more specificity. In addition, it dismissed claims of racketeering.

A spokeswoman for Maricopa County said officials were reviewing the decision. Wilenchik did not immediately respond to a phone call seeking comment.

Contact Leigh Jones at ljones@alm.com.