For several years now, Arizona government entities have been actively trying to use the notice-of-claim statute to defeat claims. Having pushed this issue to the court, they now get the result they deserve – but that doesn’t mean that the court should have given it to them.

This action consolidates two wrongful-death claims against the Department of Corrections. The State had claimed that the notice-of-claim letters for both were insufficient. The Supreme Court accepted the matter to “address the standard that applies to determine whether a claim adequately states the ‘facts supporting’ the amount claimed.”

The statute in question (which, perhaps tellingly, the opinion quotes only in a footnote) says:

The claim shall contain facts sufficient to permit the public entity or public employee to understand the basis upon which liability is claimed. The claim shall also contain a specific amount for which the claim can be settled and the facts supporting that amount.

The State argued that this requires facts that, viewed objectively, allow the government to evaluate the claim and the amount demanded. The Court of Appeals, though, ruled in favor of both plaintiffs, concluding that any supporting facts, “regardless of how meager,” satisfy the statute.

The Supreme Court began its analysis by insisting that its goal was to fulfill the intent of the Legislature. But, it said, the statutory language is not “clear and unequivocal,” requiring the courts to construe it. As it happens, the Supreme Court had already done that, in Deer Valley Unified School District v. Hauser, 214 Ariz. 293, 152 P.3d 490 (2007). It said then that a claimant must “[provide] the government entity with a factual foundation to permit the entity to evaluate the amount claimed.” The holding of that case, though, had arguably been on a slightly different issue. Moreover, the court said, Deer Valley didn’t address what to do when a claimant and a public entity disagree about whether the facts are sufficient.

Normally, of course, when parties disagree on whether a statute has been obeyed a court resolves the disagreement. Naively, we thought that that’s what courts were for. But the Chief Justice, writing for a unanimous court, decided that that wouldn’t do in this situation.

Why not? Well, for one thing, the opinion worried that a claimant only has 180 days after an incident to present the demand letter and “by the time a trial judge could decide whether a particular claim satisfied the supporting-facts requirement, the time to file a claim letter will have expired.”

Can you figure that out? By the time the court rules on whether the demand served by a claimant was sufficient, the time for serving the demand will have expired. Does the court mean to imply that a claimant could serve a second demand if the first were found insufficient? Where does the statute say that? And if it did, why couldn’t the claimant serve the new/amended demand within the 180 days, whether the trial court had ruled yet or not, making the whole issue moot?

The court said that if the 180 days had expired, “the trial judge would have no option but to dismiss the civil action if the judge found the factual statement insufficient.” But how can that be a reason not to do it? Dismissing cases for insufficient factual statements is what this whole issue is about. This paragraph (no. 20) gives the game away: the court considers the notice-of-claims statute a “significant and unpredictable obstacle” to claims and doesn’t want them dismissed on that basis.

The other reason given by the opinion not to allow the trial court to judge the sufficiency of the notice is that it would cost too much. Frankly, we’re tired of hearing time and expense used as an excuse whenever it fits a litigant’s or court’s position and ignored when it doesn’t.

The court decided that “The approach that best furthers legislative intent is to allow a claimant to decide what facts support the amount claimed and to disclose those facts as part of the notice of claim.” “(C)ourts should not scrutinize the claimant’s description of facts to determine the ‘sufficiency’ of the factual disclosure.” In other words, claimants can say as much or as little as they like so long as they make at least a slight show of abiding by the statute. This is, of course, not what Deer Valley said but it is consistent with the Court of Appeals’ “however meager” approach – except that the trial court can’t even rule on meagerness.

Given this “standard” – which is of course no standard at all — what, the court more-or-less asked, is to prevent claimants from hiding facts?

First, claimants must want to settle their cases and they therefore have “no valid reason to withhold facts.” Before we read that sentence we would have bet that at least one of the Justices had at least a little experience defending state agencies. Apparently, we would have been wrong.

Second, “the professional obligations of claimants’ lawyers will deter them from submitting incomplete or inaccurate information in claim letters. Any deliberate attempt to misrepresent facts supporting a claimed amount could violate a lawyer’s obligation of truthfulness under the Arizona Rules of Professional Conduct.” But the issue isn’t about misrepresentation. And since when is “incompleteness” in making a claim an ethical violation? 

It is nice to know, though, that the court trusts us all of a sudden. “We  . . .  expect . . .  lawyers to act honorably.” So why do we need to prove by paperwork – time-consuming and therefore expensive paperwork – that we’re meeting our ethical obligations to counsel clients about ADR?  Why are there CLE audits?

Well, what the court actually said was “We . . . expect claimant’s lawyers to act honorably” [emphasis added]. Perhaps the lawyers the courts are to trust are only those representing plaintiffs.

The notice of claim still has to include an amount for which the case can be settled; that’s Deer Valley. Otherwise, the lesson of Backus is that in enacting the statute the Legislature intended that the people it regulates be the sole judges of whether they had satisfied its regulation. In the guise of construing the statute, the opinion largely nullifies it.

Government agencies had been overreaching on this issue, using hypertechnical interpretations of the statute to try to dismiss claims regardless of their merit. They deserved to get their hands slapped. But the answer was to set reasonable guidelines, not to throw out the Legislature’s baby with the bathwater just because the Supreme Court didn’t like the looks of the poor thing.

On the heels of Phoenix v. Johnson, a simple analysis of a rule-statute conflict, here is a definitive and complete one. This is a must-read.

Seisinger sued an anesthesiologist for malpractice.  A statute — 12-604(A) — requires that a med-mal expert have certain qualifications; hers didn’t meet them. She argued that he qualified as an expert under Rule 702 and that the statute, because it has the effect of narrowing the Rule, is unconstitutional. The trial court disagreed and dismissed her case; the Court of Appeals reversed.

The Supreme Court started by saying that the power to make procedural rules is not — despite what some of the Court’s earlier opinions had said — exclusive to the Court. “Rather, it is more accurate to say that the legislature and this Court both have rulemaking power, but that in the event of irreconcilable conflict between a procedural statute and a rule, the rule prevails.” Such conflicts are to be avoided by construing the statute so as to be consistent with the rule, if possible.

The Supreme Court agreed with the Court of Appeals, though, that the rule and the statute conflict. The statute expressly adds to the qualifications required by Rule 702.

If there is a conflict, the next step is to determine whether the statute is substantive or procedural. With substantive matters, the roles are reversed: although both the court and the legislature can make substantive law (the court’s is called “common law”) in case of conflict the legislature prevails. Here, again, the duty of the courts is to try to uphold the constitutionality of the statute.

The Court of Appeals had decided that the statute was not substantive, based on its legislative history. But the Supreme Court indicated that this is a question of law, not of fact, and therefore does not rely on the legislative record. The legal issue is whether the statute is one that “creates, defines, and regulates rights.”  That the statute affects evidence does not necessarily mean that it is procedural.

The requirement of expert medical testimony in a malpractice case, said the Court, is a substantive component of the common law governing the tort. The requirement had been developed long before Rule 702.  12-604 (A) modfies this substantive rule by adding to a plaintiff’s “burden of production” (whatever that is).  It “regulates rights” and is therefore substantive.

This was too much for Judge Eckerstrom (called up from the Second Division because the Chief Justice had recused herself). His concurring opinion insists that the leglisature has no power to interfere with anything the courts have the constitutional power to do. For him, it is enough the the statute and the rule conflict; that makes the statute unconstitutional. Deciding between “substantive” and “procedural” is in his view an unnecessary “secondary analysis.”

Justice Hurwitz’ comments on Eckerstrom’s opinion were tactful and restrained.

In the end, though, the defendant lost. The substance that he argued for was his undoing. The statute was enacted in 2005; the case was filed in 2004 and arose out of events in 2002. It is black-letter law in Arizona that only procedural statues have retroactive effect. Having held that the statute was substantive, the majority ruled that it did not apply to Seisinger’s claim. (Eckerstrom’s opinion therefore concurs in the result.)

This is a very important opinion. Regardless of what you  may think about Judge Eckerstrom’s grasp of civil or constitutional law, his approach is probably closer to what we would have seen from a majority of the Court a couple of Chief Justices ago. For the last twenty-five years or so, our Supreme Court has threatened to go the absolutist route favored by Judge Eckerstrom. Seisinger is closer to what we thought was the law before then.