Estate of Jacob Braden v. State – 11/30/2011
Divided Arizona Supreme Court Holds That The State Is Not a Proper Defendant In a Statutory Action for Damages Under the Adult Protective Services Act Because the State Is Not an “Enterprise.”
The Arizona Department of Economic Security contracts with some private companies to provide services. Jacob Braden, an adult with developmental disabilities, received services from one of those companies. Braden died in 2005 after being injured at one of the company’s facilities.
The Adult Protective Services Act provides statutory protections for vulnerable adults and imposes criminal and civil liability for violations of the act. Braden’s estate sued the State under the Act, A.R.S. § 46-455. The State moved for summary judgment, arguing that it was not a proper defendant under the Act. The trial court agreed but a split panel of the Court of Appeals reversed. The Supreme Court granted the State’s petition for Review.
It is a violation of the Act to cause or permit a vulnerable adult to be injured or endangered “by neglect, abuse or exploitation.” Before 1989, the Act imposed criminal liability on certain “persons” for such violations. Under the current version, the Act authorizes a civil claim “against any person or enterprise that has been employed to provide care, that has assumed a legal duty to provide care or that has been appointed by a court to provide care . . . for having caused or permitted such conduct.” A.R.S. § 46-455(B).
In a 3-2 opinion, the Court held that the State is not a proper defendant under the Act. Because the state is not a “person” it could only be a defendant if it was an “enterprise.” The Act defines “enterprise” to mean “any corporation, partnership, association, labor union or other legal entity, or any group of persons associated in fact although not a legal entity, that is involved in providing care to a vulnerable adult.” A.R.S. § 46-455(Q) (emphasis added).
The Court focused on whether the state comes within the term “other legal entity.” Although the state is generally considered a “legal entity,” the Court held that the term “legal entity” had to be interpreted in light of the rest of the definition of “enterprise.” “Legal entity” was not an “independent and isolated” category of the enterprise; the court found it telling that the definition did not separate “labor union or other legal entity” with a serial comma (“labor union, or other legal entity”). Thus, the Court held that the state was not subject to liability as an “enterprise” under the Act because it is not an entity “like a labor union” or other business-type entity.
The Court further noted that various canons of interpretation – esjudem generis and noscitur a sociis – supported its interpretation. Moreover, the fact that the legislature has many times expressly included the governmental bodies in lists of entities further persuaded the Court that the legislature did not intend to include the state as an “enterprise” in this instance. Finally, the Court explained that a contrary result would lead to “tension” in the Act because the Act obligates the state to enforce the statute.
Justices Bales and Hurwitz dissented. The dissent argued that the amendment adding civil liability under the Act “extends broadly” and that the definition of “enterprise” includes expansive terms, including the term “other legal entity.” In the dissent’s view, the fact that the state is unquestionably a “legal entity” combined with Act’s broad language indicated that the state could be an “enterprise” and thus a civil defendant under the Act.
The dissent challenged the Court’s textual interpretation, arguing that the “absence of a serial comma . . . sheds no light on the meaning of ‘legal entity.’” Aside from the fact that there is no controlling rule of usage regarding the use of serial commas before the last item in a series, the dissent explained that the Arizona legislature’s drafting manual recommends against use of the serial comma before “or” at the end of a series. In addition, before a “technical and conforming” amendment in 2009, the Act had always included a comma between “labor union or other legal entity.” In other words, argued the dissent, the absence of the comma is “obviously non-substantive” and the Court should not have concluded that the legislature omitted the comma to limit the meaning of “other legal entities” as somehow related to labor unions.
Likewise, the dissent contended that the majority was wrong to conclude that the Act’s definition of “enterprise” was limited to non-governmental, business-type entities. The definition includes “any corporation or association,” and the term corporation “may embrace both private and public entities” under Arizona law. Furthermore, the Act’s definition tracks the definition of “enterprise” found in the federal RICO statutes, a definition which federal courts have held includes public entities. Finally, the dissent was not persuaded that the possibility of civil liability would cause “tension” with the state’s enforcement obligations under the Act. The state is already subject to liability under statutes which it also enforces, such as the Arizona Disabilities Act.
Justice Brutinel authored the Opinion in which Chief Justice Berch and Justice Pelander concurred.
Justice Bales authored the dissent in which Justice Hurwitz concurred.