Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-3_11-cv-08070/USCOURTS-azd-3_11-cv-08070-2/pdf.json

Nature of Suit Code: 555
Nature of Suit: Prisoner - Prison Condition
Cause of Action: 42:1983 Prisoner Civil Rights

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1 After PHS’ parent corporation was acquired, PHS was renamed to Corizon.

Def.’s Opp’n (Doc. 22) at 1:26, n. 1. 

WO

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

James Jackson Ellsworth, )

)

Plaintiff, ) No. CV-11-8070-PCT-RCB-MEA

)

vs. ) O R D E R

)

Prison Health Services, Inc., )

 et al., )

Defendants. ) )

Background

Plaintiff pro se James Jackson Ellsworth is housed at the

Mohave County Jail (“the facility”), where defendant Prison Health

Services, Inc. (“PHS”), now known as Corizon Health, Inc.

(“Corizon”),1

 provides health care services. See Defendant’s

Partial Opposition to Plaintiff’s Motion to Enjoin Defendants

(“Def.’s Opp’n”) (Doc. 22) at 2:10. Basically, plaintiff is

alleging a violation of his Eighth Amendment right to be free from

cruel and unusual punishment. More specifically, plaintiff alleges

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2 After this motion was fully briefed, on August 31, 2011, the Honorable

Mark E. Aspey, United States Magistrate Judge (“the Magistrate Judge”), advised

that the reference was ready to be withdrawn as to this motion. On January 24,

2012, during the pendency of this motion, plaintiff Ellsworth filed a “Renew[ed]

Motion to Enjoin[.]” Mot. (Doc. 49) at 1:10-11. After the filing of defendant’s

opposition to that renewed motion, on February 23, 2012, the Magistrate Judge

denied the renewed motion, along with three other motions plaintiff also filed.

Ord. (Doc. 56) at 1. The renewed motion was denied because “the relief requested

was previously denied by the Court.” Id. at 1:25 (emphasis added).

That denial was improper. The Magistrate Judge did have jurisdiction to

consider whether the joinder of unserved defendants was proper because such

defendants “are not considered ‘parties’ under 28 U.S.C. § 636(c).” See Hard Drive

Productions, Inc. v. Does 1-188, 809 F.Supp.2d 1150, 1155 (N.D.Cal. 2011).

Nevertheless, that denial was improper because the relief – joinder - had not

previously been denied. That relief is the subject of the pending motion, which was

pending when the Magistrate Judge denied the renewal motion. 

3 Plaintiff inadvertently misidentified both Rules. The court will

disregard that fact though because plaintiff’s intent is obvious to the court, as

it was to Corizon.

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that he was denied certain medical treatment relating to his

diagnosis of multiple sclerosis, allegedly because the facility’s

protocol did not allow it. See Co. (Doc. 1) at 3, ¶ 3. 

Currently pending before the court is plaintiff’s “Motion to

Enjoin Defendants[.]”2 Mot. (Doc. 17) (emphasis added). Although

styled as a motion to enjoin, it is obvious from the substance that

plaintiff is moving to join – not “enjoin” – three separate

entities as parties to this action. The impetus for this motion

was a corporate disclosure statement filed by PHS, now named

Corizon. American Service Group, Inc., (“ASG”) is Corizon’s parent

corporation. Corp. Disclo. Stmt. (Doc. 14) at 2:10-11. ASG, in

turn, is “solely owned by Valitas Health Services, Inc.”

(“Valitas”). Id. Plaintiff is seeking to join Corizon, ASG, and

Valitas as parties to this action pursuant Fed.R.Civ.P.

19(a)(1)(B)(ii) and 20(a)(2)(A)(B).3

Defendant PHS, now known as Corizon, does not object to this

motion to the extent it can be construed as a motion to correct the

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name of the defendant from PHS to Corizon. Def.’s Opp’n (Doc. 22)

at 2:1-3; 4:2-4. With that correction, Corizon concedes that it

“is a proper defendant to this action.” Id. at 22:11. 

Corizon opposes this motion, however, insofar as plaintiff is

seeking to join ASG and Valitas as parties hereto. The primary

basis for this opposition is the presumption of corporate

separateness under Arizona law, and plaintiff’s failure to offer

any facts to overcome that presumption. Defendant further argues

that plaintiff has not satisfied Rule 19 standards for mandatory

joinder, nor Rule 20's standards for permissive joinder. 

Defendant’s position is well-taken on all three grounds, as will be

seen. 

In his reply, plaintiff seeks a stay to conduct discovery

because he is uncertain as to which entity was the parent

corporation during the relevant time frame. Plaintiff believes

that unknown entity wrote the protocol, which he is challenging in

this lawsuit, pertaining to inmate medical treatment at the Mohave

County Jail. See Reply (Doc. 23) at 1:25 - 2:4. Thus, plaintiff

is seeking a stay of this pending motion until he can conduct

discovery to “obtain the identify” of PHS’s “[p]arent [c]orporation

during” the relevant time frame. Id. at 2:7-9. On that same

basis, plaintiff is seeking an extension of the deadline for filing

a motion to amend his complaint “until such time that [he] has

enough evidence to prove who the Parent Corporation was during the

timeframes[sic] setout [sic] in the complaint, and file a Motion to

Join the Parent Corporation to this litigation. See id. at 2:9-13. 

Before addressing the parties’ respective arguments, it is

necessary to examine the entire record on this issue. That 

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includes plaintiff’s renewed motion (Doc. 49), and defendant’s

response thereto (Doc. 49). It is particularly important to

consider that renewal motion because, as will be seen, it somewhat

alters the complexion of the current motion. The court, therefore,

is taking judicial notice of those two filings. See Fidelity Nat.

Financial, Inc. v. Friedman, 2012 WL 682376, at *4 (D.Ariz. Mar. 2,

2012) (“Pleadings and orders in this action, or others, are matters

of public record and hence properly the subject of judicial

notice.”) (citing, inter alia, Reyn’s Pasta Bella, LLC v. Visa USA,

Inc., 442 F.3d 741, 746 n. 6 (9th Cir. 2006) (taking judicial

notice, as a matter of public record, of “pleadings, memoranda,

expert reports, etc., from [earlier] litigation[,]” which were thus

“readily verifiable”)). The court is taking judicial notice of

those subsequent filings “to show . . . that a certain argument or

position was asserted therein.” Id. (citations omitted). 

Insofar as he has been able to discern the “facts,” plaintiff

claims in his renewal motion that after an “apparent merger of

Whiskey Acquisition Corp. into” ASG, the latter “is a surviving

entity and wholly owned subsidiary of the other surviving entity,

Valitas[.]” Renewed Mot. (Doc. 49) at 2:4-7. Plaintiff further

states that “[d]uring this merger[,]” PHS “was renamed Corizon.” 

Id. at 2:7-8. Noting his earlier request for a stay to “obtain 

. . . evidence” in connection with the pending motion, in his

renewal motion plaintiff states that he has such “evidence[]” and,

“is ready to proceed with” the pending joinder motion. Id. at 2:1-

2. Based upon the foregoing, the court denies as moot plaintiff’s

request for a stay.

With that clarification, the court will address the merits of

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the pending motion. In so doing, the court will take into account

plaintiff’s claimed facts, and his argument that based upon such

facts, he has overcome the presumption against corporate

separateness.

Discussion

I. Joinder

A. Corizon

Construing this motion as one to correct the name of the

defendant from PHS to Corizon, and given the latter’s

acknowledgment that it “is a proper defendant to this action[,]”

and because “[d]efendant has no objection[,]” the court grants this

part of plaintiff’s motion. See Resp. (Doc. 22) at 2:11; and 2:3. 

B. ASG and Valitas

1. Fed.R.Civ.P. 19 Joinder

Rule 19(a)(1)(B)(ii) is one of the bases for plaintiff’s

motion to join. Assuming for the sake of argument that that Rule

is the proper procedural vehicle for this motion, there is nothing

in this record showing that either ASG or Valitas are necessary

parties to this action. 

Rule 19(a)(1)(B)(ii) provides: 

(a) Persons Required to Be Joined if Feasible.

(1) Required Party. A person who is subject to 

service of process and whose joinder will not 

deprive the court of subject-matter jurisdiction 

must be joined as a party if: . . . 

(B) that person claims an interest 

relating to the subject of the action 

and is so situated that disposing of the 

action in the person’s absence may: . . . 

(ii) leave an existing party subject to 

a substantial risk of incurring double, 

multiple, or otherwise inconsistent 

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obligations because of the interest. 

Fed.R.Civ.P. 19(a)(1)(B)(ii). There is nothing before the court

showing, for example, that either ASG or Valitas “claims an

interest relating to the subject of th[is] action and is so

situated that disposing of th[is] action in th[eir] absence may 

. . . leave an existing party[,]” such as Corizon, “subject to a

substantial risk of incurring double, multiple or otherwise

inconsistent obligation[s] because of the interest.” See id. 

Thus, plaintiff has not shown that either ASG or Valitas must be

joined as necessary parties pursuant to Rule 19.

2. Fed.R.Civ.P. 20 Joinder

Plaintiff’s motion suffers from the same lack of proof insofar

as he is relying upon Rule 20. The part of Rule 20 upon which

plaintiff Ellsworth cites reads as follows:

(a) Person Who May Join or Be Joined. 

. . . 

(2) Defendants. Persons--as well as a vessel, 

cargo, or other property subject to admiralty 

process in rem--may be joined in one action as 

defendants if: 

(A) any right to relief is asserted 

against them jointly, severally, or in 

the alternative with respect to or arising

out of the same transaction, occurrence, 

or series of transactions or occurrences; 

and

(B) any question of law or fact common to 

all defendants will arise in the action. 

Fed.R.Civ.P. 20(a)(2)(A)(B) (italicized emphasis added). 

Taking into account plaintiff’s pro se status, the court

generously construes his motion as one to amend pursuant to

Fed.R.Civ.P. 15(a) to join ASG and Valitas as defendants. See 4

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James Wm. Moore et al., Moore’s Federal Practice § 20.02 (3d ed.

1999) (a plaintiff, in seeking to join additional parties, “must

seek leave to amend [and] Plaintiff has the burden of demonstrating

that the proposed restructuring of the litigation satisfies both

requirements of [Rule 20's] permissive party joinder rule”). 

Plaintiff Ellsworth has not, however, as he must, satisfied the

requirements of Rule 20(a)(2)(A)(B) allowing for permissive

joinder. See U.S. v. Undetermined quantities of an article of

food, cheese, labeled in part, Estrella Family Creamery (Red

Darla), 2011 WL 6012501, at *1 (W.D.Wash. Dec. 1, 2011) (citation

omitted) (“[W]hen a party files a motion to amend to join a party,

the joinder must also satisfy the requirements of Rule 20(a)(2) of

the Federal Rules of Civil Procedure.”) 

The record is silent on the conditions precedent for

permissive joinder. Based upon the plain language of Rule

20(a)(2)(A)(B), plaintiff must make a two-prong showing, which he

has not done. Plaintiff has not established the first element,

because he has not demonstrated any right to relief against ASG or

Valitas as to the occurrences which are the subject of this action. 

Likewise, plaintiff has not established the second element; he has

not shown “any question of law or fact common to all defendants

will arise in th[is] action.” See Fed.R.Civ.P. 20(a)(2)(B). Thus,

plaintiff is not entitled to permissively join either ASG or

Valitas as defendants under Rule 20. 

3. Corporate Separateness

Although not relying upon this theory of liability by name,

apparently plaintiff is seeking joinder of ASG and Valitas on an

alter ego theory of liability. That theory “allows a parent

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corporation to be held liable for the acts of its subsidiary when

the individuality or separateness of the subsidiary corporation has

ceased.” Pimal Property, Inc. v. Capital Ins. Group, Inc., 2012 WL

608392, at *4 (citing Gatecliff v. Great Rep. Life Ins. Co., 170

Ariz. 34, 821 P.2d 725, 728 (Ariz. 1991)). However, “Arizona law

recognizes a presumption of corporate separateness under which a

parent corporation is not liable for the actions of a subsidiary.” 

Loza v. American Heritage Life Ins. Co., 2009 WL 4824756, at *1

(D.Ariz. 2009) (citing Deutsche Credit Corp. v. Case Power & Equip.

Co., 179 Ariz. 155, 876 P.2d 1190, 1195 (Ariz.App.1994)). And, as

earlier stated, defendant is relying upon that presumption of

corporate separateness to defeat plaintiff’s motion to join ASG and

Valitas as defendants.

To overcome that presumption of corporate separateness, “a

plaintiff must show (1) unity of control and (2) that observance of

the corporate form would promote injustice or fraud.” Id. (citing

Gatecliff, 170 Ariz. 34, 821 P.2d at 728) (emphasis added). 

“[U]nity of control is shown when a parent exercises ‘substantially

total control over the management and activities’ of its

subsidiary.” Id. (quoting Gatecliff, 170 Ariz. 34, 821 P.2d at 728

(citations and internal quotations omitted)). “A plaintiff may

prove substantially total control ‘by showing, among other things:

stock ownership by the parent; common officers or directors;

financing of subsidiary by the parent; payment of salaries and

other expenses of subsidiary by the parent; failure of subsidiary

to maintain formalities of separate corporate existence; similarity

of logo; and plaintiff’s lack of knowledge of subsidiary’s separate

corporate existence.” Id.

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Plaintiff first disputes that Arizona law applies here,

although he does not suggest what other law the court should apply. 

The Ninth Circuit has instructed courts to “apply the law of the

forum state in determining whether a corporation is an alter ego of

an individual.” S.E.C. v. Hickey, 322 F.3d 1123, 1128 (9th Cir.

2003). Obviously, Arizona is the forum state for this particular

federal district court. Therefore, despite plaintiff’s contrary

assertion, Arizona law does apply on the issue of alter ego

liability. 

Despite disagreeing as to the applicable law, plaintiff

contends that he has “proven both prongs of this [Gatecliff]

standard[.]” Renewed Mot. (Doc. 49) at 3:8-10. The record readily

shows that plaintiff is not able to overcome Arizona’s presumption

of corporate separateness because he has not come forth with

sufficient proof to satisfy either prong of the Gatecliff standard. 

As to the seven factors relevant to the “unity of control” prong,

plaintiff only attempts to satisfy one. He states that “Richard

‘Rich’ Hallworth is the Chief Executive Officer [(“CEO”)] of both

ASG and PHS (Now Corizon).” Renewed Mot. (Doc. 49) at 2:25-3:1. 

Plaintiff offers nothing specifically to support this bald

assertion though. 

In making other assertions, plaintiff cites to “Corizon.com,

ASGR.com, [and] LexisNexis.com[.]” Id. at 2:17. Perhaps those

cites were the source of plaintiff’s assertion as to Mr. Hallworth,

but the court declines to speculate. Pursuant to Fed.R.Evid. 201,

the court will, however, take judicial notice of the fact that

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4 See http://www.corizonhealth.com/About-Corizon/Executive-Team (last

visited March 30, 2012).

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“Rich Hallworth” is Corizon’s CEO.4 Even so, plaintiff has not

shown that Corizon has any “common officers or directors” with ASG

or Valitas. Plaintiff makes a couple of broad conclusory

allegations as to ASG’s “operat[ion] . . . of healthcare companies,

and “‘oversee[ing] outpatient testing and care[.]’” Renewed Mot.

(Doc. 49) at 2:13-14; 16 (citations omitted) (emphasis in

original). On the face of it, those snippets do not in any way

assist plaintiff in showing “unity of control” with respect to

Corizon and ASG or Valitas.

Even if plaintiff had satisfied the first Gatecliff prong,

which he has not, he cannot satisfy the second – “that observance

of the corporate form would promote injustice or fraud.” See

Gatecliff, 170 Ariz. 34, 821 P.2d at 728. The court agrees with

defendant that plaintiff’s “unsupported allegation that there have

been a number of suits or complaints against ASG, Valitas and PHS,”

without “nam[ing] any particular suit, and fail[ing] to establish

why an unrelated suit or complaint against these parties is

relevant to his contention that ASG and Valitas should be joined as

parties” herein. Resp. (Doc. 51) at 3:13-16. Moreover, those

wholly unsupported assertions do nothing to prove that “observance

of the corporate form [here] would promote injustice or fraud.” 

See Gatecliff, 170 Ariz. 34, 821 P.2d at 728.

For all of the reasons set forth above, the court hereby

orders that plaintiff’s “Motion to Enjoin Defendants” (Doc. 17) is:

(1) DENIED as moot insofar as plaintiff is seeking a stay

of this motion; 

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(2) GRANTED to the extent he is seeking to correct the 

name of defendant Prison Health Services, Inc., to 

reflect its new name, Corizon Health Services, Inc.; 

(3) DENIED insofar as plaintiff is seeking to join 

American Service Group, Inc. and Valitas Health Services,

Inc. as defendants hereto; and

(4) insofar as plaintiff is seeking “to extend the 

deadlines for any Motion to Amend until such a time that 

[he] has enough evidence to prove who the Parent 

Corporation was during the timeframes [sic] setout [sic] 

in the complaint, and [to] file a Motion to Join the 

Parent Corporation[,]” this aspect of plaintiff’s motion 

is DENIED with leave to seek leave to amend, provided 

such motion seeking leave to amend, if any, shall be 

filed no later than May 4, 2012. 

DATED this 31st day of March, 2012.

Copies to counsel of record and plaintiff pro se

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