City of Phoenix v. Fields – 4/22/2008

April 29, 2008

Arizona Court of Appeals Division One Holds that a Notice of Claim Setting Forth a Specific Amount for Which a Claim Can Be Settled Must Precede Any Legal Claim Against a Public Entity, Including Class Actions.

In April 2002, as representatives of a class, several individuals submitted a notice of claim to the City of phoenix, alleging that the City failed to permit claimants, as City employees of the Head Start program, to receive the same benefits the City provides to all other City employees.  The notice of claim, however, failed to fix a specific amount for which the claimants’ claims could be settled.  After the City failed to act on the notice of claim (and it was therefore deemed denied), the claimants filed a class-action complaint against the City, seeking declaratory and monetary relief.  More than four years into the litigation, the Arizona Supreme Court held that a notice of claim not containing a specific amount for which the claim could be settled does not meet the requirements of A.R.S. § 12-821.01(A) and must be dismissed if the sixty-day notice of claim period has lapsed.  DeerValley Unified Sch. Dist. No. 97 v. Houser, 214Ariz. 293, 296-97, 152 P.3d 490, 493-94(2007).  Shortly thereafter, the City filed a motion to dismiss based on the fact that the claimants had failed to set forth a specific settlement amount in their notice of claim.  The trial court denied the motion on the ground that class action claims need not set forth a specific settlement amount and the City sought special action relief. 

The Arizona Appeals Court accepted jurisdiction and held that class action claims, like individual claims, cannot be maintained unless the claimants first submit a notice of claim containing a specific settlement amount.  The plain language of A.R.S. § 12-821.01(A) dictates this result because the statute applies without exception to all “[p]ersons who have claims against a public entity.”  The Court explained that even assuming that requiring class-action claimants to include a specific settlement amount would render class actions against public entities impossible, there is no constitutional right to file a class action.  The Court also believed that class actions against public entities will remain viable because all that is required is the inclusion of an amount at which the claimants would be willing to settle their claims, not an amount at which settlement is guaranteed. 

Judge Hall authored the opinion, joined by Judges Brown and Barker.