AZAPP Blog

Lake v. City of Phoenix (1/13/2009):  Arizona Court of Appeals Division One Holds That Metadata Is Not a Public Record for Purposes of Arizona’s Public Records Law.     

Plaintiff David Lake, a Phoenix Police Officer, submitted a series of public records requests to Defendant City of Phoenix, including a request for metadata for documents he believed had been back-dated.  In December 2006, Lake filed a statutory special action to compel the City to produce certain records, including the metadata, and alleging that the City intentionally delayed production of other records.  Lake requested attorneys’ fees incurred in bringing the special action and for double damages pursuant to A.R.S. § 12-349.  The trial court denied special action jurisdiction and determined that Lake was not entitled to relief.  Lake appealed. 

The Arizona Appeals Court affirmed in part and reversed in part.  It first addressed whether metadata is a public record, explaining that the presumption of disclosure in Arizona only applies after a determination has been made that a record is a public record.  Citing Salt River Pima-Maricopa Indian Cmty. v. Rogers, 168 Ariz. 531, 815 P.2d 900 (1991), and Matthews v. Pyle, 75 Ariz.76, 251 P.2d 893 (1952), the Court held that metadata is not a public record because it is not:  (1) a record made by a public officer pursuant to a duty, the purpose of which is to disseminate information to the public or to serve as a memorial of official transactions; (2) a record required or necessary to be kept in the discharge of a duty imposed by law or directed by law to serve as a memorial of something written, said, or done; or (3) a record of transactions of a public officer in his office, whether required by law or not. 

The Court rejected Lake’s argument that metadata is a public record because it is electronic evidence that would be discoverable in litigation, noting that there is no authority or legislative history suggesting that Arizona’s public records law is co-extensive with evidentiary rules.  Moreover, the Court explained that the plain language of the public records statutes foreclosed a finding that all records maintained by public entities are public records. 

The Court then turned to three other public record requests Lake had made that had been denied by the City.  It first ruled that the City had improperly withheld a police report located on the PACE computer management system.  The Court rejected the City’s argument that state law prohibited searches of the PACE system for public records requests, explaining that a public record does not become immune from production simply by virtue of the method the City employed to catalogue it, and it also held that A.R.S. § 41-1750(Q) did not support the City’s argument.  The Court next held that the City improperly withheld certain e-mails for which it was the custodian of records.  Finally, the Court held that the City improperly withheld documents concerning a shooting investigation, rejecting the City’s contention that a draft of a report concerning an ongoing investigation is not a public record.             

The Court remanded the matter to the trial court to determine whether Lake was entitled to attorneys fees for the wrongful denial of the three records requests.  The Court, however, also held that the trial court did not abuse its discretion when it rejected Lake’s request for attorneys’ fees for the City’s failure to promptly produce other records, finding that the evidence suggested that the records were promptly produced.

Judge Norris concurred in part and dissented in part.  She disagreed with the majority’s holding that metadata is not a public record, arguing that metadata is an essential component of a public record created on a computer, and also that metadata should be considered a public record because it would serve the interests of the public records law.

Judge Brown authored the opinion; Presiding Judge Timmer concurred; Judge Norris concurred in part and dissented in part.

Hudgins v. Southwest Airlines, Co. ( 1/13/2009):  Arizona Court of Appeals Division One Reduces Punitive Damages Award as Violative of Due Process.

Two bail-enforcement agents requested and received permission from Southwest Airlines to carry their weapons onto a flight.  However, during the flight the captain suspected the agents’ possession of weapons violated federal law, so Southwest contacted the authorities, and the agents were arrested when the plane landed.   Because Southwest gave the agents permission to carry their weapons onto the plane, the federal prosecutor informed Southwest that it would drop the criminal charges if Southwest cooperated and provided the prosecutor with the results of its own internal investigation of the matter.  That investigation showed that the agents did not mislead the airline in order to carry their weapons onto the plane.   Southwest, however, refused to cooperate unless the agents would release it from any potential civil liability.  The prosecutor eventually nevertheless dropped the charges without Southwest’s cooperation, and the agents sued Southwest for negligence and punitive damages.  The jury awarded the agents $500,000 each in compensatory damages, and $4 million each in punitive damages.  Southwest appealed, alleging, among other issues, that the size of the punitive damages award was excessive and therefore violated due process.

The Court reversed the amount of the punitive damages award and remanded the issue to the trial court.  , The Court used the three factors set forth in BMW of North America, Inc. v. Gore,  517 U.S. 559, 575 (1996)to analyze whether the size of the punitive damages award violated due process: (1) the degree of reprehensibility  of the defendant’s misconduct; (2) the ratio between compensatory and punitive damages; and (3) how the award compares with other penalties.  Noting that the degree of reprehensibility of defendant’s conduct is the most important factor, the Court held Southwest’s conduct fell in the low-to-middle range of reprehensibility, because Southwest acted in reckless disregard for the agents’ health by refusing to cooperate with the federal prosecutor without obtaining a release from civil liability, and that malice motivated Southwest’s failure to cooperate.  However, the Court held Southwest’s reprehensibility was mitigated because it had notified the federal authorities that it gave the agents permission to board the plane with weapons.  In light of the lower reprehensibility, the Court invoked State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408, 416 (2003)’s statement that a ratio of 1:1 may be appropriate if, like here, the jury has already awarded substantial compensatory damages.

Finally, the Court noted that there were no similar civil penalties with which to compare the award of punitive damages, but that the most similar penalty was a criminal fine for obstruction of a criminal investigation, which carries a maximum fine of $1 million.  The Court noted this was far below the punitive damages  award of $4 million to each agent.

Based on the above factors, the Court found the award was excessive and therefore violated due process.  Because the jury already awarded the agents the “substantial sum” of $500,000 in compensatory damages and the case involved less reprehensible conduct, the Court instructed the trial court to award an equal amount in punitive damages.

Presiding Judge Timmer authored the opinion, with Judges Norris and Brown concurring. 

City of Phoenix v. Fields (1/22/2009): Supreme Court of Arizona Holds that the Notice of Claim Statute, A.R.S. 12-821.01(A), Requires a Putative Class Representative to Include in His Notice of Claim (1) a “Specific Amount” for Which His Individual Claim Can Be Settled and (2) a Statement that, If Litigation Ensues, The Representative Intends to Seek Certification of a Plaintiff Class.  

 Eight Head Start workers filed a notice of claim with the City of Phoenix and the City of Phoenix Employees’ Retirement System Board on behalf of themselves and others similarly situated (the “Class”).  Their notice alleged that Head Start workers were improperly denied various benefits generally available to City employees.  An amended notice of claim was later filed naming eight additional representatives.  Neither the City nor the Board responded to the claim within sixty days; the claim was thus denied by inaction.  See A.R.S. § 12-821.01(E).  The workers, as putative class representatives, filed a complaint against the City in Maricopa County Superior Court and sought certification of a plaintiff class.  After the Superior Court granted certification, the City moved for summary judgment on the ground that the representatives’ notices of claim failed to comply with A.R.S. § 12-821.01(A) by not setting forth a “specific amount” for which the claims of the Class could be settled.  The Superior Court denied the motion for summary judgment, holding that the settlement demand requirement of § 12-821.01(A) did not apply to class actions.  In response, the City sought special action relief in the Arizona Court of Appeals.  

The Court of Appeals accepted jurisdiction and vacated the Superior Court’s order.  See City of Phoenix v. Fields, 219 Ariz. 88, 193 P.3d 782 (App. 2008).  The Court of Appeals held that § 12-821.01(A) applies to class actions, and that the notices filed by the Class were deficient for failure to specify an amount for which the class claim could be settled.  The Class then petitioned for review by the Supreme Court of Arizona.

Because the issue presented was one “of first impression and statewide importance,” the Supreme Court granted review, vacated the Court of Appeals’ opinion, and remanded.  The Supreme Court began by noting that “[a]pplying A.R.S. § 12-821.01(A) to class claims is complicated by the nature of class actions.”  For example, “it is simply not possible for those filing a purported class claim under the notice of claim statute to set forth a ‘specific amount’ for which the claim of the entire class ‘can be settled,’ as required by § 12-821.01(A)[:] Not only do those filing the claim lack any such authority, they also have no assurance that a class will ever be certified, how many members of the class will opt out, or whether the superior court will eventually approve a proposed settlement.”  The Court acknowledged, however, that A.R.S. § 12-821.01 by its terms “applies to ‘all causes of action’; there is no exemption for putative class claims.”  A.R.S. § 12-821.01(F) (emphasis added).  In balancing these competing concerns, the Court ultimately concluded that “[a]lthough the putative class representatives cannot make a claim on behalf of the class, nothing prevents them from including in their notice the specific amounts for which they would settle their individual claims.”  In other words, “[a] class claim meets the settlement demand requirement of § 12-821.01(A) if it identifies the amount for which an individual putative class representative would settle his own claim and puts the governmental entity on notice of the claimant’s intention to pursue a class action if his claim does not settle.”  Because the representatives’ notices of claim contained no “specific amount” for which they would settle their individual claims, their notices did not comply with A.R.S. § 12-821.01(A).  

The Court agreed with the representatives, however, that the City’s notice of claim statute defense had been waived by the City’s conduct in the litigation below.  Although the Court assumed for purposes of analysis that the City had initially preserved the affirmative defense by properly asserting it in its answer, the City subsequently waived the defense by failing to assert it in the ensuing litigation.  Indeed, the City’s motion “raising the absence of a settlement demand was filed more than four years after the date of the original complaint and more than three years after class certification.”  Therefore, even though the representatives had failed to comply with the notice of claim statute, the City waived this defense.                                

Justice Hurwitz authored the unanimous opinion. 

Green v. Lisa Frank, Inc. (1/20/2009): Arizona Court of Appeals Division Two Holds that a Trial Court May Enter Default Judgment as a Sanction for Civil Contempt Not Involving a Discovery Violation, and Such an Order May Be Appealable Under A.R.S. § 12-2101.

In litigation between corporate directors, the trial court entered stipulated orders providing for the temporary protection of the corporation’s intellectual property.  The court later found one director, James Green, in civil contempt for having taken and retained property in violation of court orders.  Following a hearing on a motion for sanctions, the court issued an order dismissing Green’s cross-complaint against the corporation and striking Green’s reply to the corporation’s counterclaim against him.  The sanctions order granted judgment to the corporation on all claims, except with respect to an allegation of fraud against Green.  The court terminated Green’s status as a director and awarded attorneys’ fees and costs to the corporation.  Green appealed.

The Court of Appeals first considered whether it had jurisdiction to consider the civil contempt order.  The Arizona Supreme Court has held that a civil contempt order is not appealable, e.g., Ex parte Wright, 36 Ariz. 8, 16 (1929), but has not considered the question in the context of a contempt order that is otherwise appealable under A.R.S. § 12-2101.  In this case, because the trial court’s order disposed of all issues other than damages, and included findings pursuant to Rule 54(b), Ariz. R. Civ. P., the order was an appealable interlocutory order under A.R.S. § 12-2101(G).  Wright and other cases rejecting appeals of civil contempt sanctions are therefore inapplicable.

On the merits, the Court of Appeals concluded that the dismissal/default was not an excessive sanction and did not violate due process rights despite that Green’s contempt did not involve a discovery violation.  Due process is satisfied, and dismissal constitutionally permissible, if there is a sufficient nexus between the misconduct and the merits of the case to permit an inference that the sanctioned party’s position lacked merit.

To determine the propriety of a trial court contempt sanction, the Court of Appeals considered a non-exhaustive list of factors, including: (1) prejudice to the other party, both in terms of its ability to litigate its claims and other harms caused by the disobedient party’s actions; (2) whether the violations were committed by the party or by counsel; (3) whether the conduct was willful or in bad faith and whether the violations were repeated or continuous; (4) the public interest in the integrity of the judicial system and compliance with court orders; (5) prejudice to the judicial system, including delays and the burden placed on the trial court; (6) efficacy of lesser sanctions; (7) whether the party was warned that violations would be sanctioned; and (8) public policy favoring the resolution of claims on their merits.  A finding of prejudice is not required to support a dismissal or default judgment as a proper contempt sanction. 

Under the findings of facts on the record, the trial court did not abuse its discretion by the sanction imposed for Green’s civil contempt.

The trial court did err, however, by removing Green as a director of the corporation.  Entry of a default judgment establishes as proven all well-pleaded facts, but does not hold the party in default to have admitted conclusions of law.  Accordingly, if a complaint fails to state facts legally entitling a plaintiff to a recovery, a default judgment rendered thereon is void.  Because the allegations of fraud supporting the request for Green’s removal pursuant to A.R.S. § 10-809(A) were not pleaded with particularity, the trial court’s entry of default on that claim did not satisfy the factual showing required for his removal under the statute.  The trial court also erred by entering judgment on the corporation’s copyright infringement claim.  Because federal district courts have exclusive original jurisdiction to consider such infringement civil actions, the trial court lacked subject matter jurisdiction over that claim.       

Judge Brammer wrote the opinion, in which Judge Pelander concurred.  Judge Howard dissented, concluding that the Arizona Supreme Court’s decision in Wright applied, and that the Court of Appeals therefore did not have jurisdiction to consider the appeal of the contempt order.

Arpaio v. Citizen Publishing Co.  (12/18/2008):  Arizona Court of Appeals Division Two Holds That A.R.S. § 39-121.02(B) Permits a Trial Court to Award Attorneys’ Fees to a Party Requesting Public Records Against An Objecting Party Other Than the Custodian of Records.

Citizen Publishing Co. (“Citizen”) submitted a public records request to Pima County Attorney Barbara LaWall for documents related to the Arizona Attorney General’s transfer of a civil forfeiture case to the Pima County Attorney’s Office (“PCAO”).  Maricopa County Sheriff Joe Arpaio (“Arpaio”), whose office had originally investigated the case, objected to the production of correspondence between his office and the PCAO on attorney-client privilege grounds.  LaWall then filed a declaratory judgment action naming Citizen and Arpaio as defendants and asking the trial court to determine whether the records were protected by the attorney-client privilege or whether they should be released to Citizen.  The trial court found that the correspondence in question was a public record and must be provided to Citizen.  In addition, the trial court ordered Arpaio to pay Citizen’s attorneys’ fees pursuant to A.R.S. § 39-121.02(B).  Arpaio timely appealed.

A.R.S. § 39-121.02(B) provides that “[t]he court may award attorney fees and other legal costs that are reasonably incurred in any action under this article if the person seeking public records has substantially prevailed.”  Arpaio argued that because section 39-121.02(B) is contained in Article 2, Chapter 1, of Title 39, and all the other provisions in Article 2 deal solely with the duty of the officer or custodian responsible for maintaining and providing access to the requested records, it follows that section 39-121.02(B) permits an award of attorney fees only against that officer.  

The Court of Appeals rejected Arpaio’s argument and affirmed the trial court’s award of attorney fees, finding that the language of the statute, the context, and the legislative history all support the conclusion that the legislature intended to allow a prevailing party on a public records request action to recover attorney fees against any adverse party in that action.  With respect to the statute’s language, the Court found the legislature’s use of the term “prevailing” party contemplates that attorney fees should be awarded against the “non-prevailing” or adverse party.  Here, Arpaio, not the PCAO, was clearly the party adverse to Citizen’s efforts to gain access to the public records it had requested.  Moreover, the Court noted that the legislature’s specific reference in surrounding provisions to the officer or public body responsible for the requested records, and the lack of such a reference in section 39-121.02(B) suggests that the legislature did not intend for the responsibility for attorney fees to fall solely on the custodian of records.  Finally, the Court noted that prior versions of section 39-121.02 specifically limited the responsibility for an attorney fees award to the custodian of records, but that the limiting language had been removed by the legislature in 2006, further suggesting that the legislature intended that a party other than the custodian of records could be liable for attorney fees under the amended statute.

Judge Brammer authored the opinion; Chief Judge Pelander concurred.

Presiding Judge Howard specially concurred arguing that the focus of the Court’s analysis should have been on A.R.S. § 39-121.02(A), which provides that an action under the public records statutes may be brought “pursuant to the rules of procedure for special actions.”  Rule 2(a)(1), Ariz. R. P. Spec. Actions provides that in a special action against a public body or officer, a real party or parties in interest shall be joined as defendants.  Thus, the legislature expressed a clear desire in subsection (A) that parties other than the custodian of records be brought into public records actions, and it expressed no limitation in subsection (B) on the court’s ability to award attorney fees against any party to such an action.

Barnett v. Jedynak (01/08/09): Arizona Court of Appeals Division One Reverses Trial Court’s Calculation of Marital Community’s Interest in the Appreciation of Separate Property Occurring During the Marriage.

Husband and Appellant Wife contested the trial court’s calculation of the marital community’s interest in a home Husband owned as his separate property.  Before the marriage, Husband and Wife lived in the home and Wife made payments toward the mortgage during that time as well as during the marriage.  The dissolution decree stated that the community had a lien against the separate property.  To calculate the community’s interest, the court ordered that the mortgage amount and other liens be deducted from the current fair market value and that the remaining equity be divided equally.  The trial court granted Husband’s subsequent Motion to Amend Judgment and applied a new formula.  The new formula first measured the proportion of community contribution divided by Husband’s separate contribution, the community’s contributions, and the value of the home on the date of marriage, less the mortgage balance.  The community’s interest, in turn, was determined by multiplying that proportion by the amount the home appreciated during the marriage.  Wife timely appealed.

In a unanimous opinion, Judge Orozco reversed and remanded.  At the outset, the Court rejected Wife’s contention that her pre-marriage contributions entitled the community to an interest in the home’s appreciation prior to the marriage.  The Court noted that, although Husband and Wife cohabitated, there was no evidence of an express or implied agreement to acquire the home jointly.

Turning to the issue of calculating community interest, the Court noted that under Arizona law, the community is entitled to both reimbursement for contributions to principal and an amount of the appreciation during marriage.  First, the Court held that the trial court’s formula wrongly excluded reimbursement to the community for contributions to principal.  Second, the Court held that the formula incorrectly measured the percentage of the community’s contributions because it divided the community’s contribution by both Husband’s separate contributions and the community’s contributions.  This method reduced the value of the percentage by increasing the size of the denominator in the equation, but there was no basis for such a reduction.  Finally, the Court approved a modification of calculations in prior cases, holding that when separate property appreciates both prior to and after the marriage date, the community interest in the appreciation is proportional to the community’s contributions to principal divided by the value at the time of marriage, not the purchase price.

Judge Orozco authored the opinion; Judges Johnsen and Weisberg concurred.

In re Williams (12/31/2008):  Arizona Court of Appeals Division Two Holds that A.R.S. § 25-324 Requires Trial Courts to Assess the Reasonableness of a Litigant’s Position by an Objective Standard and to Take Into Account the Financial Resources of Both Parties When Deciding Whether to Award Attorney’s Fees in a Dissolution Action.

In 2007, Jeanette Williams filed a petition to dissolve her marriage to Clarence Williams.  Clarence retained legal counsel, Jeanette did not.  Jeanette rejected a proposed consent decree and proceeded to trial on two issues – spousal maintenance and reimbursement.  The trial court found that Clarence did not need to pay spousal maintenance, but it also found that Jeannette, in seeking maintenance, acted reasonably for someone untrained in the law and thus did not award Clarence attorney’s fees.  The trial court also refused to take into account Clarence’s financial need for attorney’s fees because he was the party requesting them.  This appeal followed.

Section 25-324 allows the trial court in a dissolution action to award attorney’s fees and costs after the trial court “consider[s] the financial resources of both parties and the reasonableness of the positions each party has taken during the proceedings.”  The Appeals Court explained that because the term “reasonable” has been used in Arizona law to connote an objective standard, the reasonableness of each party’s position in a dissolution action should be judged by an objective standard and the trial court erred when it took into account that Jeannette is untrained in the law.  The Court also held that the trial court erred when it disregarded the plain language of § 25-324 and only took into account the financial resources of one party, rather than both. 

Judge Eckerstrom authored the opinion; Judges Espinosa and Vasquez concurred.

Valerie M. v. Arizona Department of Economic Security (1/12/09): The Arizona Supreme Court Holds That the Indian Child Welfare Act Does Not Require State Law Findings for the Termination of Parental Rights to be Made by a Higher Standard of Proof in Cases Involving Indian Children.

In a case involving the termination of parental rights where one parent is a member of an Indian Nation, the proceedings are subject to the Indian Child Welfare Act (“ICWA”).  The ICWA requires that when terminating the parental rights of an Indian child, the state court must find that efforts have been made to provide remedial services and rehabilitative programs designed to prevent the break up of the Indian family and that these efforts have been unsuccessful.  The state court must also find that the continued custody of the child by the parent is likely to result in serious emotional or physical damages to the child; this finding must be supported by evidence beyond a reasonable doubt, including expert witness testimony.

The children’s mother in this case  was a member of the Cherokee Nation.  The state juvenile court terminated the father’s parental rights after making all required findings, both state law and ICWA findings, beyond a reasonable doubt.  The mother sought a jury trial and the jury was instructed to apply the clear and convincing evidence standard to the state law grounds for termination, the preponderance of the evidence to the best interests of the child determination, and the reasonable doubt standard to the findings under the ICWA.  The jury terminated the mother’s parental rights and the mother timely appealed. 

On appeal, the mother argued that the reasonable doubt standard was required for the state law findings as well as the ICWA findings.  The Arizona Appeals Court disagreed and affirmed the jury’s verdict.  That Court held that a dual burden of proof applies in cases involving Indian children: reasonable doubt applies to ICWA findings and a lesser burden applies to state law findings. The Appeals Court further held that Arizona Rule of Procedure for the Juvenile Court 66(C), which provides that all allegations in a termination proceeding involving an Indian child must be proven beyond a reasonable doubt, is invalid because it sets forth a standard higher than that in Arizona statutes governing termination proceedings.  The mother timely appealed to the Arizona Supreme Court.

The Arizona Supreme Court affirmed the Court of Appeals opinion, holding that the reasonable doubt standard does not apply to the state law findings in a parental termination proceeding involving an Indian child.  Rather, the standards set forth in Arizona statutes regarding the burden of proof apply.  The Court reasoned that the ICWA only requires that the reasonable doubt standard apply to the determination that continued custody is likely to result in serious emotional or physical harm to the child; it makes no other directive regarding the burden of proof. The Court rejected the mother’s argument that applying the reasonable doubt standard to all necessary findings would promote uniform standards in termination proceedings involving Indian children, noting that Congress did not displace state law with federal law; instead, it left to the states to determine the grounds for termination and only added the two ICWA requirements.  The Court further held that Rule 66(C) impermissibly requires a higher standard of proof for state law findings that is required under Arizona’s statutes.  The legislature can set burdens of proof as a matter of substantive law, thus, a court rule cannot supplant that statutory determination. 

Justice Bales wrote for a unanimous Court.             

Harper v. Canyon Land Development, LLC.  (12/23/2008):  Arizona Court of Appeals Division One Holds that Motion to Set Aside Entry of Default and a Default Judgment Based on Excusable Neglect May Be Filed Within Six Months of the Entry of Judgment. 

Harper filed a complaint against Canyon Land Development (“CLD”) and served the complaint on CLD’s statutory agent.  The agent forwarded the documents as required, CLD failed to answer, Harper moved for entry of default, CLD failed to plead in response, and the default thus became effective 10 days after the application for entry of default.  The trial court eventually entered judgment in late December of 2006.

Months later, more than 6 months from the application for entry of default but less than 6 months from the entry of judgment, CLD moved to set aside the judgment under Rules 55(c) and 60 (c)(1) and (c)(6).  The Superior Court denied relief, explaining that the motion was not timely filed because more than 6 months had passed since the entry of default.

After canvassing decisions from other states and the federal courts, the Court of Appeals reversed.  The Court first explained that an entry of default by the Clerk of Court in accordance with Rule 55(a) is merely an “interlocutory step” toward default judgment.  Thus, the 6-month limit of Rule 60(c) does not run from that action by the clerk.  Rather, Rule 60(c)(1) requires that relief be sought “not more than six months after the judgment or order was entered or proceeding was taken.”  Within the context of setting aside a default judgment, the six-month limitation in Rule 60(c) commences when the judgment is filed, not when the default is entered. 

Judge Hall authored the opinion in which Judges Winthrop and Irvine concurred.