Doe ex rel. Doe v. State

Decision Date30 May 2001
Docket NumberNo. CV-00-0252-PR.,CV-00-0252-PR.
Citation24 P.3d 1269,200 Ariz. 174
PartiesJane DOE, on behalf of and for the benefit of John DOE, her minor child, Plaintiff-Appellant, and Gilbert Unified School District, a governmental entity, Defendant-Appellant. v. STATE of Arizona, Defendant-Appellee.
CourtArizona Supreme Court

Rhees, Hopkins & Kreamer, by Michael L. Rhees, Joseph C. Kreamer and Kelly Brown, Phoenix, Attorneys for Doe.

Jones, Skelton & Hochuli, by Georgia A. Staton and Eileen J. Dennis GilBride, Phoenix, Attorneys for Gilbert Unified School District.

Janet A. Napolitano, The Attorney General, by Richard F. Albrecht, Assistant Attorney General and Michael T. O'Toole, Assistant Attorney General and Paula S. Bickett, Assistant Attorney General, Phoenix, Attorneys for State of Arizona.

OPINION

McGREGOR, Justice.

¶ 1 Doe, on behalf of her minor son, filed suit against the Gilbert Unified School District (GUSD) and the Arizona Department of Education (ADOE). The suit alleged that GUSD teacher Kenneth R. Graham had repeatedly molested Doe's son, that ADOE negligently processed and approved Graham's application for a teaching certificate, and that GUSD negligently failed to protect Doe's son from Graham. After Doe amended her complaint to substitute the State for ADOE, the trial court granted the State's motion to dismiss on the grounds that Arizona Revised Statutes (A.R.S.) section 12-820.01 absolutely immunized its certification decision. Doe and GUSD appealed, and the court of appeals affirmed the trial court's dismissal of Doe's claims against the State. We granted review to determine whether the State is entitled to absolute immunity. We exercise jurisdiction pursuant to Arizona Constitution Article 6, Section 5.3, and now reverse.

I.

¶ 2 In reviewing the trial court's decision to dismiss for failure to state a claim, we assume as true the facts alleged in the complaint and affirm the dismissal only if, as a matter of law, the plaintiff would not be entitled to relief on any interpretation of those facts. Fidelity Sec. Life Ins. Co. v. State, 191 Ariz. 222, 224 ¶ 4, 954 P.2d 580, 582 ¶ 4 (1998). Here, the plaintiff asserts that the State acted in a grossly negligent manner in granting Graham a teaching certificate.1 The plaintiff points in particular to Graham's application for a substitute teaching certificate, which asked whether he had been convicted of a crime.2 Graham reported a conviction for disorderly conduct at Arizona State University. According to the complaint, Graham pled to this lower charge after an undercover police officer arrested him for public sexual indecency. However, on Graham's later application for a teaching certificate, he answered "no" to the same question.

II.
A.

¶ 3 In Ryan v. State, 134 Ariz. 308, 656 P.2d 597 (1982), we held that, as a matter of common law, governmental tort liability is coextensive with the liability of private actors. Ryan, 134 Ariz. at 310, 656 P.2d at 599. We noted that some special governmental immunities for judicial, legislative, and high-level executive functions would continue to be necessary, and invited the legislature to participate in developing this area of the law. Id. Following that decision, Governor Bruce Babbitt established the Governor's Commission on Governmental Tort Liability (Commission) to propose a recommended course of legislative action. After the Commission issued its report, the legislature defined the boundaries of governmental absolute and qualified immunity in A.R.S. sections 12-820 to 12-826, "Actions Against Public Entities or Public Employees" (the act). See S. 1225, 36th Leg., 2nd Sess. (1983); see also generally James L. Conlogue, Note, A Separation of Powers Analysis of the Absolute Immunity of Public Entities, 28 Ariz. L.Rev. 49 (1986) (describing the legislative proposals and Commission work that preceded enactment).

¶ 4 The legislative statement of purpose and intent in the act declares that it is "the public policy of this state that public entities are liable for acts and omissions of employees in accordance with the statutes and common law of this state." 1984 Ariz. Sess. Laws ch. 285, § 1. The act decrees that all its provisions "be construed with a view to carry out the above legislative purpose." Id. Accordingly, as this court has emphasized, governmental liability is the rule in Arizona and immunity is the exception. E.g., Fidelity Sec. Life Ins. Co., 191 Ariz. at 225 ¶ 7, 954 P.2d at 583 ¶ 7. We therefore construe immunity provisions narrowly. Id.

¶ 5 Section 12-820.01, which defines the instances in which absolute immunity applies, distinguishes the exercise of judicial and legislative functions from the exercise of administrative functions. The statute provides absolute immunity to all of the former, but immunizes only those administrative functions that involve "the determination of fundamental governmental policy." A.R.S. § 12-820.01.A.2 (1992). This distinction ensures that courts will not second-guess the policy determinations of a coordinate branch of government, but does not extend immunity any farther than necessary to achieve that end. Cf. Restatement (Second) of Torts § 895B, cmt. d (1979); see also Governor's Commission on Governmental Tort Liability, Arizona Governmental Tort Claims Act, Majority Report at 11 (1983) (explaining that Restatement § 895B provided the inspiration for the Committee's recommended language, which was reflected in the enacted version).

¶ 6 For the actions of an administrative body to receive absolute immunity, "fundamental governmental policy is the element which, first and foremost, must be present in the decision making process." Fidelity Sec. Life Ins. Co., 191 Ariz. at 225 ¶ 10, 954 P.2d at 583 ¶ 10. The statutory scheme recognizes that "[t]hose who promulgate[ ]... rules and regulations ... determine[ ] fundamental governmental policy and exercise[ ] discretion in so doing, but, except perhaps in the most extraordinary circumstances, those who apply the rules and regulations day to day do not." 191 Ariz. at 226 ¶ 14, 954 P.2d at 584 ¶ 14. The statute therefore provides immunity for "such matters as... a decision as to the direction and focus of an entire regulatory scheme," but not for operational actions and decisions within that regulatory scheme. 191 Ariz. at 225 ¶ 11, 954 P.2d at 583 ¶ 11.

¶ 7 The legislative history of the immunity provisions affecting licensing decisions indicates that in this area, as in others, the legislature chose to distinguish between fundamental policy decisions related to licensing activities and operational decisions made within the regulatory scheme. The Commission's majority report recommended qualified immunity for the "issuance of or failure to revoke or suspend any permit, license, certificate, approval, order or other authorization." Governor's Commission on Governmental Tort Liability, Arizona Governmental Tort Claims Act 22 (1983). The minority report urged absolute immunity for these actions. Id. at 29. Legislation subsequently introduced in the Senate followed the minority recommendation and, in a section addressing only permits and licensing, provided absolute immunity for the issuance, denial, and revocation of permits by authorized public entities or employees. S. 1225, 36th Leg., 2nd Sess. at 4 (1984). In the House of Representatives' Government Operations Committee, a strike-everything amendment consolidated the various governmental functions the Senate version had absolutely immunized into one section. The new section granted absolute immunity to a broad range of functions, including the "issuance of or failure to revoke or suspend any permit, license, certificate, approval, order or similar authorization." Minutes of the Comm. on Gov't Ops., Ariz. H.R., 36th Leg., 2nd Sess. at app. 2 (March 28, 1984).

¶ 8 This broad grant of absolute immunity for all licensing functions did not survive. A House floor amendment which generated the language finally adopted on the subject of licensing, divides actions involving licensing and regulation into two groups. See State of Arizona, Journal of the House of Representatives 454 (1984) (floor amendment by Rep. Hull, April 5, 1984). The first provision, which became A.R.S. section 12-820.01,3 accords absolute immunity to "[t]he licensing and regulation of any profession or occupation." The second, which became A.R.S. section 12-820.02, provides qualified immunity for "[t]he issuance of or failure to revoke or suspend any permit, license, certificate, approval, order or similar authorization ...."4 In large part, the legislature adopted the approach proposed in the Commission's majority report, which had recommended a grant of qualified immunity for activities related to licensing. The legislature, however, did not entirely adopt the Commission's approach; it also afforded absolute immunity to certain licensing activities, defined as those involving the licensing and regulation of any profession or occupation.

¶ 9 We conclude that the most reasonable interpretation of the legislative actions that led to the language of sections 12-820.01 and 12-820.02 is that the legislature intended to provide absolute immunity for fundamental governmental policy determinations involving the licensing of professions and occupations, while according only qualified immunity to particular decisions to grant or revoke licenses. Under that interpretation, the State's decision to require that teachers be certificated, as well as decisions related to such matters as establishing certification requirements, developing an application, and establishing procedures for processing applications and investigating applicants receive absolute immunity under section 12-820.01 because they involve the determination of fundamental governmental policy. The processing of a particular application in accordance with established procedures, however, does not involve the determination of fundamental...

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