Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_07-cv-01071/USCOURTS-azd-2_07-cv-01071-0/pdf.json

Nature of Suit Code: 442
Nature of Suit: Civil Rights Employment
Cause of Action: 42:1981 Civil Rights

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The requests for oral argument are denied because the parties have thoroughly briefed

the issues and oral argument will not aid the Court’s decision. See Mahon v. Credit Bur. of

Placer County, Inc., 171 F.3d 1197, 1200 (9th Cir. 1999).

WO

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

Frank Estrada and Carman Estrada,

husband and wife; and Othon Luna and

Estella Luna, husband and wife, 

Plaintiffs, 

vs.

City of San Luis, an Arizona municipal

corporation; Rural/Metro Fire

Department Inc., an Arizona corporation;

CT Corporate System, an Arizona

corporation; Rural/Metro Protection

Services, Inc., an Arizona corporation;

Rural Metro (Delaware) Corporation

(FN), a Delaware corporation; and Rafael

Torres and Jane Doe Torres, in their

personal capacities,

Defendants.

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No. CV-07-1071-PHX-DGC

ORDER

Defendants have filed motions to dismiss pursuant to Rule 12(b)(6) of the Federal

Rules of Civil Procedure. Dkt. ##19, 22. Responses and replies have been filed. Dkt. ##40-

41, 43-44. The Court will grant the motions.1

I. Background.

Plaintiffs Frank Estrada and Othon Luna worked for the City of San Luis fire

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department. Estrada was a Battalion Chief and Luna was the Fire Chief. Plaintiffs were

terminated in 2006.

Plaintiffs commenced this action by filing a complaint against Rural/Metro Fire

Department Inc., Rural/Metro Protection Services, Inc. and Rural Metro (Delaware)

Corporation (FN) (collectively, “Rural/Metro”), the City of San Luis (“City”), Rafael and

Jane Doe Torres, and CT Corporate System. Dkt. #1. Plaintiffs’ amended complaint asserts

seventeen claims: wrongful termination, retaliation, negligence per se, intentional

interference with contract, breach of the covenant of good faith and fair dealing, intentional

and negligent infliction of emotional distress, invasion of privacy, defamation, negligent

supervision and retention, false light invasion of privacy, violation of federal civil rights,

violation of state civil rights, violation of A.R.S. § 38-431, breach of contract, punitive

damages under federal law, punitive damages under state law, and loss of consortium. 

II. Rule 12(b)(6) Standard.

Dismissal under Rule 12(b)(6) “can be based on the lack of a cognizable legal theory

or the absence of sufficient facts alleged under a cognizable legal theory.” Balistreri v.

Pacifica Police Dept., 901 F.2d 696, 699 (9th Cir. 1988). Dismissal also is appropriate when

the plaintiff has included allegations disclosing some absolute defense or bar to recovery.

Weisbuch v. County of L.A., 119 F.3d 778, 783 & n.1 (9th Cir. 1997). When analyzing a

complaint under Rule 12(b)(6), “[a]ll allegations of material fact are taken as true and

construed in the light most favorable to the non-moving party.” Smith v. Jackson, 84 F.3d

1213, 1217 (9th Cir. 1996). The court may not assume, however, that the plaintiff can prove

facts different from those alleged in the complaint. Jack Russell Terrier Network of N. Cal.

v. Am. Kennel Club, Inc., 407 F.3d 1027, 1035 (9th Cir. 2005).

III. Plaintiffs’ Allegations.

Plaintiffs allege the following facts, which the Court will accept as true for purposes

of these motions:

In May 1998, Plaintiffs terminated Rafael Torres from his job in the City’s fire

department. Torres subsequently was elected to the City Council. Rural/Metro has a

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contract with the City to provide ambulance services. Torres instructed Rural/Metro to file

a complaint with the City falsely accusing Plaintiffs of violating the terms of the contract.

The filing of the complaint was to be a quid pro quo for the City’s renewal of the

Rural/Metro contract. Rural/Metro accordingly sent a letter to the City asserting that the fire

department, under Plaintiffs’ supervision, was violating the terms of the contract between

Rural/Metro and the City. Dkt. #6 ¶¶ 24-29. In response to the letter, the City began a

“results-oriented” investigation that ultimately led to Plaintiffs’ terminations. The City also

referred the matter to the Arizona Attorney General for criminal investigation. No criminal

conduct was found. Id. ¶¶ 30-31.

IV. Rural/Metro’s Motion to Dismiss.

Plaintiffs concede that the following seven claims may not be brought against

Rural/Metro: wrongful termination, retaliation, breach of the implied covenant of good faith

and fair dealing, violation of federal civil rights, violation of state civil rights, violation of

A.R.S. § 38-431, and breach of contract (Counts I-II, V, XI-XIV). Dkt. #40 at 3-4. The

Court will grant Rural/Metro’s motion with respect to these claims.

Rural/Metro argues that the remaining claims are barred by Noerr-Pennington

immunity on the ground that the filing of the letter with the City constitutes direct petitioning

activity protected by the First Amendment right to petition the government for redress of

grievances. Dkt. #19 at 3-4. The Court agrees.

“The Supreme Court has described the right to petition as ‘among the most precious

of the liberties safeguarded by the Bill of Rights’ and ‘intimately connected, both in origin

and in purpose, with the other First Amendment rights of free speech and free press.’” White

v. Lee, 227 F.3d 1214, 1231 (9th Cir. 2000) (quoting United Mine Workers of Am., Dist. 12

v. Ill. State Bar Ass’n, 389 U.S. 217, 222 (1967)). “The Court has further established that the

right to petition extends to all departments of the government, including the executive

department, the legislature, agencies, and the courts.” Id. (citing Cal. Motor Transp. Co. v.

Trucking Unlimited, 404 U.S. 508, 510 (1972)). “Under the Noerr-Pennington doctrine,

those who petition all departments of government for redress are generally immune from

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liability.” Empress LLC v. City & County of S.F., 419 F.3d 1052,1056 (9th Cir. 2005); see

E. R.R. Presidents Conference v. Noerr Motor Freight, Inc., 365 U.S. 127 (1961); United

Mine Workers of Am. v. Pennington, 381 U.S. 657 (1965).

Plaintiffs argue that immunity is not available in this case because “the NoerrPennington doctrine is expressly limited to the application of the federal anti-trust statutes[.]”

Dkt. #40 at 2 (citing Noerr and Pennington). The Ninth Circuit has rejected this argument.

Westlands Water Dist. v. Nat. Resources Defense Council, 276 F. Supp. 2d 1046, 1053 (E.D.

Cal. 2003) (citing Manistee Town Ctr. v. City of Glendale, 227 F.3d 1090, 1092 (9th Cir.

2000)). “[T]he Noerr-Pennington doctrine is not merely a narrow interpretation of the

Sherman Act in order to avoid a statutory clash with First Amendment ‘values.’ Rather, the

doctrine is a direct application of the Petition Clause[.]” Kottle v. N.W. Kidney Ctrs., 146

F.3d 1056, 1059 (9th Cir. 1998). Numerous courts, including this Circuit, have expanded the

doctrine to apply beyond the antitrust laws. See Or. Natural Res. Council v. Mohla, 944 F.2d

531, 533-34 (9th Cir. 1991); Sosa v. DIRECTV, Inc., 437 F.3d 923, 930 (9th Cir. 2006).

In short, “[w]hile the Noerr-Pennington doctrine originally arose in the antitrust context, it

is based on and implements the First Amendment right to petition and therefore, with [the]

exception [of ‘sham’ petitions], applies equally in all contexts.” White, 227 F.3d at 1231; see

also Boulware v. Nev. Dep’t of Human Res., 960 F.2d 793, 800 (9th Cir. 1992) (“[T]he First

Amendment rationale of the Noerr-Pennington doctrine extends beyond antitrust suits to

civil rights actions as well.”). In short, “Noerr immunity bars any claim, federal or state,

common law or statutory, that has as its gravamen constitutionally-protected petitioning

activity.” Gen-Probe, Inc. v. Amoco Corp., 926 F. Supp. 948, 956 (S.D. Cal. 1996).

Noerr recognized what has come to be known as the “sham” exception: situations

where petitioning activity, “ostensibly directed toward influencing governmental action, is

a mere sham to cover what is actually nothing more than an attempt to interfere with the

business relationships of a competitor[.]” 365 U.S. at 144. The scope of the sham exception

depends on the type of government entity involved. See Kottle, 146 F.3d at 1060. Where,

as here, the entity is a non-judicial political body, “the sham exception is extraordinarily

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Plaintiffs’ reliance on Venetian Casino Resort, L.L.C. v. NLRB, 484 F.3d 601 (D.C.

Cir. 2007), is misplaced. See Dkt. #40 at 2. Venetian denied Noerr-Pennington immunity

because the conduct at issue was not even “incidental” to petitioning activity. 484 F.3d at

613 (distinguishing Sosa, 437 F.3d at 935-37). In this case, Rural/Metro’s letter to the City

constitutes direct petitioning of government. See Empress, 419 F.3d at 1057.

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narrow.” Id. at 1061.

 Rural/Metro filed a letter with the City regarding the policies and procedures of its

fire department. The Court concludes that this petitioning activity was no sham. “The

‘sham’ exception to Noerr encompasses situations in which persons use the governmental

process – as opposed to the outcome of that process – as an anticompetitive weapon.” City

of Columbia v. Omni Outdoor Adver., Inc., 499 U.S. 365, 380 (1991) (emphasis in original).

The harm to Plaintiffs in this case – unjustified investigations and wrongful termination –

was caused by the outcome of the petitioning process, not by any abuse of that process by

Rural/Metro. See Dkt. #6 ¶¶ 29-31. Plaintiffs therefore have “failed to allege direct injury

from the process, rather than the outcome, as required by Noerr and Omni.” Manistee, 227

F.3d at 1095.

Because Plaintiffs’ allegations do not place Rural/Metro’s action within the sham

exception, the action is protected by Noerr-Pennington “no matter what [Rural/Metro’s]

motives were.” Empress, 419 F.3d at 1057. The Court will grant Rural/Metro’s motion with

respect to the remaining claims (Counts III-IV, VI-X, XV-XVII). See id. (filing of letter

requesting city officials to make a zoning determination regarding the plaintiffs’ hotel was

protected petitioning activity); Affordable Housing Dev. Corp. v. City of Fresno, 433 F.3d

1182 (9th Cir. 2006) (defendant was immune from suit where his public opposition to the

plaintiffs’ planned housing project “amounted to petitioning the city counsel”); Evers v.

County of Custer, 745 F.2d 1196, 1204 (9th Cir. 1984) (complaints to county commissioners

about the closing of a road fell “within the first amendment’s protection”). Given this ruling,

the Court need not address Rural/Metro’s alternative argument that the Court should decline

to exercise supplemental jurisdiction over the state law claims. See Dkt. #19 at 4-5.2

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V. The City’s and the Torres’s Motion to Dismiss.

Prior to commencing this action, Plaintiffs submitted a notice of claim to the City

pursuant to A.R.S. § 12-821.01. Dkt. #1 ¶ 7, at 26-29. This statute requires anyone with a

claim against a public entity or public employee to file a notice of the claim with the entity

or employee prior to initiating suit. See Deer Valley Unified Sch. Dist. v. Houser, 152 P.3d

490, 491 ¶ 1 (Ariz. 2007) (en banc). The statute provides that the notice “shall contain facts

sufficient to permit the public entity or public employee to understand the basis upon which

liability is claimed.” A.R.S. § 12-821.01(A). The statute further provides that the notice

shall “contain a specific amount for which the claim can be settled and the facts supporting

that amount.” Id. “The purpose of [the] statute is to give [the public entity or public

employee] notice of a claim, an opportunity to assess the claim and the potential for liability,

and a chance to settle the claim before an action is filed in court.” Barth v. Cochise County,

138 P.3d 1186, 1189 ¶ 9 (Ariz. Ct. App. 2006); see Houser, 152 P.3d at 492 ¶ 6.

The City and the Torres Defendants argue that Plaintiffs’ state law claims are barred

because their notice of claim does not comply with A.R.S. § 12-821.01(A). Dkt. #22.

Plaintiffs contend that the statute is unconstitutional and that their notice complied with the

statute. Dkt. #43.

A. Is the Notice of Claim Statute Unconstitutional?

The anti-abrogation clause of the Arizona Constitution provides that “[t]he right of

action to recover damages for injuries shall never be abrogated, and the amount recovered

shall not be subject to any statutory limitation.” Ariz. Const. art. XVIII, § 6. Plaintiffs argue

that the notice of claim statute operates as an unconstitutional abrogation “in so far as it bars

Plaintiffs’ right to recover damages.” Dkt. #43 at 4. But the statute itself neither abrogates

the right to recover damages nor limits the amount of recovery. Rather, the statute merely

requires the claimant to provide the factual basis of the claim to “ensure that government

entities will be able to realistically consider [the] claim [prior to suit].” Houser, 152 P.3d at

493 ¶ 9. 

Moreover, Plaintiffs’ argument fails to consider that “the Arizona Constitution

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specifically empowers the legislature to enact statutes of limitations and procedures that may

treat lawsuits against the state differently from other lawsuits.” Stulce v. SRP Agric.

Improvement & Power Dist., 3 P.3d 1007, 1013 ¶ 22 (Ariz. Ct. App. 1999). The Arizona

Constitution states that the legislature shall “‘direct by law in what manner and in what courts

suits may be brought against the state.’” Id. (quoting Ariz. Const. art. IV, pt. 2, § 18). “This

provision applies to suits against [the City], a municipal corporation, as a ‘subdivision of the

State.’” Id. (citation omitted). Plaintiff has not shown that the legislature “exceed[ed] the

authority granted it by article IV, part 2, section 18 when it adopted [the notice of claim

statute].” Clouse v. State, 16 P.3d 757, 764 ¶ 24 (Ariz. 2001) (en banc); see Stulce, 3 P.3d

at 1012 ¶ 18 (“[S]tatutes are presumed to be constitutional and the party making the

constitutional challenge bears the burden of demonstrating that it is unconstitutional.”).

Plaintiffs further argue that the statute is unconstitutionally ambiguous because the

use of the word “facts” makes it difficult for a person to know what information must be

provided to a government entity for a claim to be valid. Dkt. #43 at 4-5. The Court finds this

argument unpersuasive. “Compliance with the [notice of claim] statute is not difficult[.]”

Houser, 152 P.3d at 493 ¶ 9. The “facts” supporting a claim are simply “the actual or alleged

event[s] or circumstance[s]” giving rise to the claim. Black’s Law Dictionary 610 (7th ed.

1999); see Stulce, 3 P.3d at 1010 ¶ 9 (undefined terms are generally given their commonly

accepted meaning). The notice of claim statute is not unconstitutionally ambiguous. See id.

at 1013 ¶ 20.

B. Does Plaintiffs’ Notice of Claim Comply with the Statute?

Defendants argue that Plaintiffs’ notice of claim contains insufficient facts supporting

Plaintiffs’ theories of liability and amount claimed. Dkt. #22. Plaintiffs disagree, contending

that the notice provides a sufficient factual basis under A.R.S.§ 12-821.01(A). Dkt. #43.

The Court concludes that the notice does not comply with the statute because it omitted facts

supporting the amount of the proposed settlement. The Court therefore will not address

Defendants’ argument that the notice contains insufficient facts supporting Plaintiffs’

theories of liability.

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A notice of claim “shall . . . contain a specific amount for which the claim can be

settled and the facts supporting that amount.” A.R.S. § 12-821.01(A) (emphasis added).

This statutory obligation “requires that claimants explain the amounts identified in the claim

by providing the government entity with a factual foundation to permit the entity to evaluate

the amount claimed.” Houser, 152 P.3d at 493 ¶ 9. Requiring claimants to state the facts

in this fashion “ensures that claimants will not demand unfounded amounts that constitute

‘quick unrealistic exaggerated demands.’” Id. (citation omitted).

The notice of claim in this case provides a summary of Plaintiffs’ claims and the

following settlement demand:

In consideration of the foregoing, [Plaintiffs’] are willing to settle this matter

with the City by the City paying [Plaintiffs] a lump sum of $100,000.00 paid

to each for all damages and $20,000.00 paid to each in a lump sum for

attorney’s fees and costs. Therefore, the total settlement [Plaintiffs] will

accept for their claims against the City is $120,000.00 paid to each [Plaintiff],

making the grand total of $240,000.00.

Dkt. #1 at 29. The notice contains no indication of how Plaintiffs reached the “lump sum”

figures of $100,000 and $20,000, as opposed to an other conceivable settlement values. See

Bamonte v. City of Mesa, No. CV-06-01860-PHX-NVW, 2007 WL 2022011, at *6 (D. Ariz.

July 10, 2007). Moreover, the notice makes clear that the $100,000 amount is for “all

damages” sustained by each Plaintiff. Plaintiffs have asserted fifteen state law claims against

Defendants. See Dkt. #6. Absent some factual basis for the settlement amounts, Defendants

could not properly evaluate these claims. Defendants had no way of knowing whether the

amounts were realistic demands or “quick exaggerated demands.” See Houser, 152 P.3d at

493-94 & n.3 (noting that “the claim letter [did] not provide any facts supporting the claimed

amounts for emotional distress and for damages to [the plaintiff’s] reputation”). Because

Plaintiffs’ notice does not comply with A.R.S. § 12-821.01(A), the Court will grant the City’s

and Torres’s motion and dismiss the state law claims against them. See Bamonte, 2007 WL

2022011, at *6-7 (dismissing state law claim where the notice provided no facts supporting

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Plaintiffs reliance on Castaneda v. City of Williams, No. CV-07-00129-PCT-NVW,

2007 WL 1713328 (D. Ariz. June 12, 2007), is misplaced. The plaintiffs in Castaneda,

unlike Plaintiffs in this case, provided some factual support for the settlement amount.

2007 WL 1713328, at *4.

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the settlement amount).3

VI. Defendant CT Corporate System.

CT Corporation System is the statutory agent for Rural/Metro in Arizona. See Dkt.

##6 ¶¶ 11-14, 19 at 7. The Court will dismiss CT Corporation System from this action

because the amended complaint asserts no claim for relief against it. See Dkt. ##6, 40 at 4.

IT IS ORDERED:

1. The Rural/Metro Defendants’ motion to dismiss (Dkt. #19) is granted.

2. The City’s and the Torres’s motion to dismiss (Dkt. #22) is granted.

3. Defendant CT Corporate System is dismissed.

DATED this 15th day of November, 2007.

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