Fox v. Arizona, State of

• Court: District Court, D. Arizona
• Decided: July 3, 2023
• Docket: 2:21-cv-01089
• Status: Unknown

Opinion

1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA

9 Marcella Fox, No. CV-21-01089-PHX-MTL

10 Plaintiff, ORDER

11 v.

12 State of Arizona, et al.,

13 Defendants. 14 15 Pending before the Court is Defendant State of Arizona’s Motion to Dismiss 16 Plaintiff’s First Amended Complaint for lack of subject-matter jurisdiction pursuant to 17 Federal Rule of Civil Procedure 12(b)(1) (Doc. 70). In the alternative, Defendant State of 18 Arizona seeks summary judgment on this issue. (Id. at 1.) 19 I. BACKGROUND 20 The following facts derive from the Amended Complaint. (Doc. 33.) Plaintiff 21 Marcella Fox filed this action asserting claims for assault, battery, false imprisonment, 22 intentional infliction of emotional distress, negligence, and violation of equal protection 23 under Section 1983, based on allegations that Defendant McClelland sexually assaulted 24 her while both were working at an Arizona Department of Corrections, Rehabilitation, 25 and Reentry (“ADC”) prison facility. (Id., ¶¶ 107-52.) At the time of the alleged assault, 26 Plaintiff was employed as a nurse by Centurion of Arizona (“Centurion”), a private 27 healthcare company. (Id., ¶¶ 2, 58.) Centurion contracted with ADC to provide healthcare 28 services to inmates at Arizona State Prison Complex (ASPC)-Florence. (Id.) Plaintiff 1 alleges that Defendant McClelland habitually made sexual advances toward his female 2 coworkers in front of others, but ADC took no action against him. (Id., ¶¶ 17, 18, 22.) For 3 example, Plaintiff alleges that Defendant McClelland sexually assaulted two female 4 correctional officers and sexually harassed a nurse on multiple occasions throughout 5 2019 and 2020. (Id., ¶¶ 40-44, 47, 48.) Plaintiff further alleges that Defendant 6 McClelland sexually assaulted her at work on July 15, 2020. (Id., ¶¶ 64, 71-78.) Plaintiff 7 alleges that she escaped from Defendant McClelland’s control and immediately told her 8 supervisor about the incident. (Id., ¶ 80.) Plaintiff further alleges that Defendant was 9 arrested and indicted on several sexual assault, sexual abuse, and kidnapping charges 10 related to four victims, including Plaintiff. (Id., ¶¶ 97, 104-05.) The charges against 11 Defendant McClelland have been dismissed. (See Doc. 79-1 at 36.) 12 Plaintiff’s Amended Complaint asserts claims of (1) assault and battery, (2) false 13 imprisonment, (3) intentional infliction of emotional distress (“IIED”), and 14 (4) negligence/gross negligence against Defendant State of Arizona. (Doc. 33, 15 ¶¶ 107-36.) Plaintiff seeks to hold the State liable for her first three claims under a 16 vicarious liability theory, while her allegations of negligence relate to the State’s own 17 actions in failing to train and supervise ADC staff, including Defendant McClelland. (Id.) 18 II. DISCUSSION 19 A. Applicable Legal Standard 20 At the outset, the Court must determine whether to evaluate the State’s motion as a 21 jurisdictional challenge under Federal Rule of Civil Procedure 12(b)(1) or as a motion for 22 summary judgment under Rule 56. Federal courts are courts of limited jurisdiction: 23 “[t]hey possess only that power authorized by Constitution and statute. . . .” Kokkonen v. 24 Guard. Life Ins. Co. of Am., 511 U.S. 375, 377 (1994). “Congress has conferred on the 25 district courts original jurisdiction in federal-question cases—civil actions that arise 26 under the Constitution, laws, or treaties of the United States.” Exxon Mobil Corp. v. 27 Allapattah Servs., Inc., 545 U.S. 546, 552 (2005) (citing 28 U.S.C. § 1331). Where a 28 court has original jurisdiction over at least one claim, the court also has “supplemental 1 jurisdiction over all other claims that are so related to claims in the action within such 2 original jurisdiction that they form part of the same case or controversy. . . .” 28 U.S.C. 3 § 1367(a). Here, the Court has original jurisdiction over Plaintiff’s Section 1983 claims 4 against Defendants McClelland and Van Winkle. The Court can exercise supplemental 5 jurisdiction over Plaintiff’s state law claims against the State of Arizona absent 6 circumstances that would preclude subject-matter jurisdiction over those claims, as 7 discussed herein. 8 A party may move under Rule 12(b)(1) of the Federal Rules of Civil Procedure to 9 dismiss claims in which the court lacks subject-matter jurisdiction. Fed. R. Civ. P. 10 12(b)(1). A Rule 12(b)(1) challenge may be either facial or factual. White v. Lee, 227 11 F.3d 1214, 1242 (9th Cir. 2000). When a defendant argues that the claims in the 12 complaint, even if true, are insufficient to establish subject-matter jurisdiction, the 13 challenge is a facial one. Safe Air for Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir. 14 2004). In a facial challenge to subject-matter jurisdiction under Rule 12(b)(1), courts 15 must accept all material allegations in the complaint as true and construe the complaint in 16 favor of the plaintiff. White, 227 F.3d at 1242; Maya v. Centex Corp., 658 F.3d 1060, 17 1068 (9th Cir. 2011). “By contrast, in a factual attack [to subject-matter jurisdiction], the 18 challenger disputes the truth of the allegations that, by themselves, would otherwise 19 invoke federal jurisdiction.” Safe Air for Everyone, 373 F.3d at 1039. Courts may look 20 beyond the complaint only when a defendant brings a factual attack against jurisdiction. 21 White, 227 F.3d at 1242. The court “also need not presume the truthfulness of the 22 plaintiffs’ allegations.” Id. Further, when evaluating a Rule 12(b)(1) motion, the plaintiff 23 bears “the burden of proof that jurisdiction does in fact exist.” Thornhill Publ’g Co., Inc. 24 v. Gen. Tel. & Elec. Corp., 594 F.2d 730, 733 (9th Cir. 1979) (quotations omitted). 25 “[W]hen ‘ruling on a jurisdictional motion involving factual issues which also go 26 to the merits, [however,] the trial court should employ the standard applicable to a motion 27 for summary judgment.’” Trentacosta v. Frontier Pacific Aircraft Industries, Inc., 813 28 F.2d 1553, 1558 (9th Cir. 1987) (quoting Augustine v. United States, 704 F.2d 1074, 1 1077 (9th Cir.1983)). “Under this standard, the moving party should prevail only if the 2 material jurisdictional facts are not in dispute and the moving party is entitled to prevail 3 as a matter of law.” Id. (citations omitted). 4 Here, the State brings a factual attack against Plaintiff’s Complaint and directs the 5 Court to extra-pleading evidence. (Doc. 70 at 3-4.) The State argues that Plaintiff’s 6 Complaint omits “material facts relevant to the jurisdictional inquiry,” namely, that 7 Plaintiff filed for workers’ compensation benefits for injuries stemming from the alleged 8 assault and received benefits prior to filing this lawsuit. (Id.) In her response, Plaintiff 9 concedes that she did apply for and receive workers’ compensation benefits, arguing 10 instead that she did not waive her claims against the State because she was employed by 11 Centurion. (Doc. 82 at 7; Doc. 154 at 3.) 12 The Court finds that it can decide this motion under Rule 12(b)(1) without 13 converting it to a motion for summary judgment or applying the summary judgment 14 standard articulated in Trentacosta. The question presented by the State’s motion is not a 15 traditional jurisdictional one. Instead, “[t]he question here is whether the plaintiff’s 16 workplace injury and acceptance of workers’ compensation benefits for that injury 17 deprive a court—federal or state—of subject-matter jurisdiction over her tort claims 18 against her statutory employer.” (Doc. 70 at 4.) At bottom, the Court’s inquiry here 19 centers on whether the State of Arizona meets the definition of “statutory employer” 20 under the workers’ compensation statute. None of Plaintiff’s claims turn on whether the 21 State is properly considered Plaintiff’s employer, and none of the underlying facts related 22 to that determination affect the merits of Plaintiff’s claims.1 And because this is a factual 23 attack under Rule 12(b)(1), “extrinsic evidence outside of the complaint may be 24 considered without converting [this] motion to dismiss into a motion for summary 25 judgment.” City of Tombstone v. United States, No. CV 11-845-TUC-FRZ, 2012 WL 26 12841240, at *1 (D. Ariz. Sept. 21, 2012); see also Trentacosta, 813 F.2d at 1558–59. 27 1 Instead, at least some of Plaintiff’s claims turn on whether the State of Arizona can 28 properly be considered Defendant McClelland’s employer such that vicarious liability attaches for his actions. 1 The burden of proof ultimately falls on Plaintiff to establish jurisdiction. Thornhill, 594 2 F.2d at 733. 3 B. Statutory Employer 4 In Arizona, workers’ compensation is an employee’s exclusive remedy against his 5 or her employer for work-related injuries, unless an exception applies. McKee v. State of 6 Arizona, 388 P.3d 14, 18 (Ariz. Ct. App. 2016); A.R.S. § 23-1022(A). The workers’ 7 compensation statute applies to “every person who employs any workers or operatives 8 regularly employed in the same business or establishment under contract of hire,” 9 including the State of Arizona and its contractors. A.R.S. § 23-902(A). 10 When an employer procures work to be done for the 11 employer by a contractor over whose work the employer retains supervision or control, and the work is a part or 12 process in the trade or business of the employer, then the 13 contractor[] and the contractor’s employees . . . are, within the meaning of this section, employees of the original 14 employer. 15 A.R.S. § 23-902(B). “[A]n employer covered by this provision is known as a ‘statutory 16 employer,’ defined as ‘one compelled by law to pay workmen’s compensation benefits to 17 remote employees – i.e., employees of another.’” Alsadi v. Intel Corp., 519 F. Supp. 3d 18 611, 633 (D. Ariz. 2021) (quoting Young v. Envtl. Air Prod., Inc., 665 P.2d 40, 42 n.1 19 (Ariz. 1983)). 20 To qualify as a statutory employer, (1) the State must retain supervision or control 21 over the work done by its contractor, and (2) the contractor and its employees must be 22 engaged in work that is “a part or process” in the State’s regular business. Id. If both 23 prongs of the test are met, the State is immune from tort liability arising from a 24 contractor’s employee’s injuries at work. Id. Importantly, courts must “look to the 25 substance of the contract, [] recognizing that we should strictly construe the statute when 26 the loss of the worker’s common law rights is the object for which the statute is invoked.” 27 Wagner v. State of Arizona, 393 P.3d 156, 158 (Ariz. Ct. App. 2017). 28 The Arizona Court of Appeals recently analyzed whether the State of Arizona was 1 the “statutory employer” of its prison healthcare contractor’s employee such that the 2 workers’ compensation statute barred that employee’s tort claims arising from on-the-job 3 injuries. Wagner, 393 P.3d 156. The Wagner case is sufficiently analogous to this case to 4 merit discussion.2 Ms. Wagner was working as a clinical social worker at an ADC prison 5 facility when she slipped and fell on an unmarked wet floor. Id. at 157. At the time, she 6 was employed by Wexford Health Services, Inc. (“Wexford”), a company under contract 7 with ADC to provide healthcare services to Arizona state prison inmates. Id. Ms. Wagner 8 filed a workers’ compensation claim based on her fall and received compensation for her 9 injuries. Id. She also filed suit against the State of Arizona for its negligent failure to 10 maintain safe conditions at the prison. Id. The superior court granted summary judgment 11 in favor of the State, finding that the State retained sufficient supervision and control over 12 Wexford to be Ms. Wagner’s statutory employer under Section 23-902(B). Id. 13 Applying the Home Insurance Co. v. Industrial Commission, 599 P.2d 801 (1979), 14 factors, the Arizona Court of Appeals affirmed the grant of summary judgment and 15 barred Ms. Wagner’s negligence claim against the State. Id. at 158–59. The appeals court 16 found that Wexford’s contract with ADC allowed ADC significant monitoring over 17 Wexford’s provision of healthcare to the inmates to satisfy the “supervision or control” 18 element of Section 23-902(B). Id. Regarding the “part or process” element, the court 19 found that “ADC has an ongoing duty to ensure that inmates receive adequate health 20 services” and “ADC’s use of a contractor does not relieve it of this duty.” Id. at 159. 21 Here, Centurion sits in the exact position of Wexford in the Wagner 22 case. Centurion is under contract with ADC to provide healthcare services to inmates in 23 Arizona state prisons.3 And Plaintiff was employed as a healthcare worker at Centurion at 24 2 Plaintiff argues that this Court should not apply Wagner because it was wrongly 25 decided. (Doc. 154 at 3.) Instead, Plaintiff asks this Court to certify this question to the Arizona Supreme Court. (Id.) The Court declines to do so because Ms. Wagner petitioned 26 the Arizona Supreme Court to review the Arizona Court of Appeals decision, and the Arizona Supreme Court denied review. The Court has no occasion to second guess the 27 Arizona Supreme Court’s decision not to review Wagner at the time that petition for review was filed. 28 3 Indeed, after Wexford’s contract term lapsed in 2013, Corizon Healthcare took over. (Doc. 70 at 2.) In 2019, Centurion took over Corizon’s contract. (Id.) 1 the time of her injury. Because the contract between Centurion and ADC controls their 2 relationship, the Court will evaluate it using the two-part test outlined above. 3 1. Supervision or Control 4 “A hiring entity, such as ADC here, exercises supervision or control over the 5 contractor if the entity retains ‘the right to control or supervise the methods of obtaining a 6 specific result.’” Wagner, 393 P.3d at 158 (quoting Hunt Bldg. Corp. v. Indus. Comm’n, 7 713 P.2d 303 (Ariz. 1986)). “To consider whether an employer is a statutory employer of 8 an independent contractor’s employee, we consider the control exercised by the employer 9 over the contractor, not the employee.” Id. (citations omitted). In assessing supervision 10 and control, courts consider the totality of the circumstances, including the following 11 factors: 12 The duration of the employment; the method of payment; 13 who furnishes necessary equipment; the right to hire and fire; who bears responsibility for work[ers’] compensation 14 insurance; the extent to which the employer may exercise 15 control over the details of the work[;] and whether the work was performed in the usual and regular course of the 16 employer’s business.

17 Id. (quoting Home Ins. Co., 599 P.2d at 803) (alterations in original). No single factor is 18 conclusive, however. Central Management Co. v. Indus. Comm’n, 781 P.2d 1374, 1377 19 (Ariz. Ct. App. 1989). 20 a. Contract Duration 21 The original Centurion contract was for two years, and it was subsequently 22 renewed for 15 months. (Doc. 70-4 at 2.) Similarly, in Wagner, the contract had an 23 exclusive, three-year term but the court there did not make any explicit judgment on 24 whether the contract length supported its findings. See 393 P.3d at 158. Plaintiff argues 25 that “a contractual relationship of slightly more than three years is by no means a 26 long-term working relationship.” (Doc. 154 at 4.) The fact that the contract was 27 renewable, and was renewed at least once, however, indicates that ADC had the option to 28 1 continue the contract potentially indefinitely if it wanted to do so.4 (Doc. 70-4 at 2 2 (“Please be advised that this office is exercising the option to renew this contract[] for 3 . . . a total of 15 months.”).) 4 Additionally, this renewable contractual relationship between ADC and Centurion 5 supports a finding that the State retained more control over Centurion’s provision of 6 healthcare services than it would if the contract was for a longer term. ADC did not 7 delegate the provision of inmate healthcare services for a length of time that might lessen 8 its ability to control how those services are provided for future years. Should ADC be 9 unhappy with Centurion’s work, ADC is free to contract with a different healthcare 10 provider or provide the healthcare services to inmates directly.5 See Home Ins. Co., 599 11 P.2d at 803 (“[T]he evidence shows that Fischer intended to continue to employ Conway 12 as his driver as long as his performance remained satisfactory. . . .”). 13 b. Method of Payment 14 Regarding the method of payment for Centurion’s services, the State does not 15 address this factor. Plaintiff contends that Centurion set the price of its services based on 16 its own liabilities and expectations, suggesting that this factor lessens ADC’s retention of 17 supervision or control. (Doc. 154 at 4-5.) The Court notes, however, that this factor is 18 more applicable to whether an employee is properly considered an independent 19 contractor, which was the issue evaluated in Home Insurance Co. Indeed, the Wagner 20 court did not rely on this factor in its analysis. See 393 P.3d at 158–59. Thus, the Court 21 finds that this factor is neutral. Home Ins. Co., 599 P.2d at 803 (“In undertaking an 22 analysis none of the indicia is, in itself, conclusive.”). 23

24 4 Neither party attaches the contractual provisions related to ADC’s option to renew the contract for additional terms. 25 5 Significantly, near the end of the renewed contract term, another Court in this district found that ADC’s provision of healthcare, through Centurion, systematically violated 26 inmates’ constitutional right to adequate health care. Jensen v. Shinn, 609 F. Supp. 3d 789, 841 (D. Ariz. 2022). ADC did not seek additional renewal of Centurion’s contract, 27 instead contracting with another company to provide inmate healthcare services on its behalf. ADCRR Moves Forward with New Partnership, Arizona Department of 28 Corrections Rehabilitation & Reentry (May 27, 2022), https://corrections.az.gov/news/adcrr-moves-forward-new-partnership. 1 c. Necessary Equipment 2 Like the contract in Wagner, the contract here required that “ADC provid[e] and 3 maintain[] facilities and fixtures for health services.” 393 P.3d at 158. Specifically, the 4 contract required that Centurion provide inmate healthcare “in State owned and operated 5 [ADC] Complexes.” (Doc. 70-1 at 2.) The contract further required ADC to provide and 6 maintain office space for Centurion’s health service units, including supplying and 7 maintaining utilities, furniture, non-healthcare equipment such as telephones, and any 8 healthcare equipment already in place within the office space. (Doc. 152-1 at 2-3, 4-6.) 9 ADC was responsible for maintenance expenses for office space and fixture repairs. (Id. 10 at 2.) 11 On the other hand, the contract required Centurion to provide all “healthcare and 12 pharmaceutical supplies required to provide correctional healthcare services.” (Id. at 6.) 13 Centurion was responsible for “all costs associated with leased/contracted services or 14 items,” including x-ray machines and telehealth service technologies. (Id. at 5.) And, 15 although provided by ADC, Centurion also bore responsibility for maintenance and repair 16 expenses for “all inventoried furniture, nonhealthcare equipment, and Department-owned 17 healthcare equipment.” (Id.) If Centurion wanted any new furniture or non-healthcare 18 equipment, Centurion was responsible for all associated costs of its installation and 19 maintenance. (Id.) Finally, if there were any healthcare supplies left over from the prior 20 healthcare contractor, Centurion was required to purchase those from the outgoing 21 contractor before using them. (Id. at 6.) Given that Centurion was required to provide and 22 maintain much of the necessary equipment, the Court finds that this factor weighs in 23 favor of Plaintiff’s position that the State was not her statutory employer. 24 d. Employee Retention 25 The Wagner court relied on the fact that that “ADC retained the power to approve 26 Wexford’s hires, and Wexford was required to notify and consult with ADC officials 27 before ‘discharging, removing or failing to renew the Contracts of professional staff.’” 28 Wagner, 393 P.3d at 158. Here, too, the contract gave ADC an active role in Centurion’s 1 selection and retention of its employees. For example, Centurion was required to 2 collaborate with ADC officials on information contained in job postings, to obtain ADC 3 approval prior to filling any open positions, and to use ADC’s pre-employment 4 background investigations prior to offering anyone employment. (Doc. 70-1 at 4, 20, 23.) 5 Importantly, ADC retained final approval for all persons that Centurion sought to hire. 6 (Id. at 23 (“The final selection of all Contractor staff shall be subject to approval by the 7 Department.”).) As another example, Centurion was not able to fire any of its employees 8 without simultaneously providing ADC with the details of the termination. (Id. at 23.) 9 Considering ADC’s extensive role in monitoring and approving Centurion’s employment 10 decisions, the Court finds that this factor supports the State’s exercise of control and 11 supervision over Centurion’s work. 12 e. Workers’ Compensation Insurance 13 Centurion bore the responsibility to carry workers’ compensation insurance for its 14 employees, but did so at the ADC’s behest.6 (Doc. 152-2 at 5; Doc. 152-3 at 2.) “[T]here 15 is a split of authority on the question of statutory employer immunity when the alleged 16 statutory employer is not subject to liability for benefits because the direct employer 17 carries insurance.” Young v. Envtl. Air Prod., Inc., 665 P.2d 40, 44 n.6 (Ariz. 1983). 18 “Young expressly declined to decide whether statutory employer immunity could apply [] 19 in such a situation.” Alsadi, 519 F. Supp. 3d at 635. The Wagner court did not address 20 this open question but appeared to credit ADC’s requirement that Centurion provide the 21 insurance to support its finding of control and supervision. See 393 P.3d at 158 22 (“Although Wexford carried workers’ compensation insurance for its employees, it did so 23 pursuant to ADC’s requirements.”) Because the Court must strictly construe the statute 24 and neither party addressed the open question identified in Young, the Court finds that 25 this factor is a neutral one. 26 f. Control Over Work Details 27 The contract here dictated that the Health Services Contract Monitoring Bureau

28 6 It appears that Plaintiff sought and obtained workers’ compensation benefits through Centurion’s parent company’s insurance carrier, not through ADC. (See Doc. 70-7 at 2.) 1 (“HSCMB”) monitor Centurion’s work “on a random and routine basis” and evaluate its 2 performance in delivering adequate healthcare services to inmates. (Doc. 70-1 at 36-37.) 3 Specifically, “HSCMB shall review inmate access to care, compliance with [National 4 Commission on Correctional Health Care] standards, and adherence to Department 5 policies, procedures and regulatory directives to assure that correctional health service 6 needs of the inmate population are adequately met.” (Id. at 36.) ADC reserved the right to 7 add, revise, and update contractual performance measures for Centurion to follow. (Id.) 8 Additionally, HSCMB had free and “full access to areas within the healthcare spaces as 9 well as . . . full access to patient records and other information as requested in order to 10 ensure that inmates have access to care. . . .” (Doc. 70-1 at 39.) Centurion agreed to 11 “provide full visibility into the healthcare” delivered to inmates and collaborate with 12 ADC if any issues were identified. (Id. at 40.) 13 If Centurion was at any time deemed noncompliant with any contractual term or 14 applicable standards and policies, HSCMB had the authority to issue cure notices to 15 Centurion “regarding the details of the non-compliance, the required corrective action, 16 and the period of time allowed to bring performance back into compliance. . . .” (Doc. 17 70-1 at 37, 41.) If Centurion failed to cure or HSCMB deemed its non-compliance 18 uncurable, HSCMB had authority to refer it to the Chief Procurement Officer for 19 remedial action, including “monetary sanctions, suspension, refusal to renew, or 20 termination of the contract.” (Id.) 21 Relatedly, the Wagner court found that “ADC had the right to control the methods 22 of Wexford’s work” based on the following facts: 23 [T]he contract required Wexford to give ADC monitoring 24 personnel free access to all Contract areas at any time and free access to staff and work products, and to any 25 correspondence, records, reports, or other written and/or 26 electronic materials dealing with the Contract. These monitors were tasked with reviewing Wexford’s compliance 27 with ADC-mandated procedures on a random and routine 28 basis to assure that correctional health service needs of the inmate population are adequately met. 1 393 P.3d at 158–59. ADC’s exercise of control in Wagner is sufficiently analogous to the 2 control exercised here to warrant this Court to reach the same conclusion regarding 3 Centurion’s work. 4 Plaintiff argues that ADC did not control Centurion’s work because Centurion had 5 direct oversight over its own employees, developed its own training materials, and 6 maintained its own credentialing process. (Doc. 154 at 4.) Plaintiff further avers that 7 “[n]o corrections employees directed or supervised Centurion’s nursing staff in any way.” 8 (Doc. 154 at 4.) But ADC retained authority to review all licenses and credentials of 9 Centurion’s employees “to ensure that the individual[s] [have] the requisite training, 10 experience, and licensure or certification necessary to perform the duties assigned.” (Doc. 11 70-1 at 8.) And although Centurion provided its own training materials, it did so based on 12 the ADC’s contractual requirements. (Doc. 70-1 at 24.) The contract also required that 13 Centurion employees complied with Department policies on grooming, dress code, and 14 professionalism. (Doc. 70-1 at 17.) 15 Although ADC required Centurion to “have direct oversight, be responsible for, 16 and monitor the performance of” it own staff, ADC reserved the right to employ 17 additional oversight measures of Centurion’s work if an evaluation revealed that it fell 18 short of “desired outcomes or maintain[ing] compliance with contractual obligations.” 19 (Doc. 70-1 at 7.) And ADC, not Centurion, defined “reasonable medical and health 20 service fees” provided to inmates. Id. § 31-201.01(G)-(J). Reviewing the contractual 21 requirements as a whole, the Court finds that ADC maintained sufficient control over the 22 details of Centurion’s provision of healthcare services to support a finding for the State 23 on this factor. Central Management Co., 781 P.2d at 1378 (holding that an employer who 24 set fees to be charged, dictated where work was conducted, maintained an employee 25 dress code, and had authority to sanction employees for failure to follow its policies 26 exercised control over the details of the contractor’s work). 27 In sum, the Court finds that the duration of the contract, ADC’s role in employee 28 retention and oversight, and ADC’s monitoring requirements over Centurion’s provision 1 of healthcare support the State’s position that ADC sufficiently controlled and supervised 2 Centurion’s work. And although Centurion furnished and maintained much of the 3 necessary equipment to perform its services, it did so based on ADC’s express 4 contractual requirements. Accordingly, the Court finds that, under the totality of the 5 circumstances, the State, through ADC, retained sufficient control and supervision over 6 Centurion to satisfy the first prong of Section 23-902(B).7 See Wagner, 393 P.3d at 158 7 (“ADC retained the right to control Wexford’s provision of healthcare to inmates in the 8 state prison system, regardless of the label used in the contract.”). 9 2. Part or Process of the State’s Business 10 The work procured by the State’s contractors must also be a “part or process” of 11 the State’s business for immunity to attach. Alsadi, 519 F. Supp. 3d at 634. Under Section 12 23-902(B), “‘part or process in the trade or business of the employer’ means a particular 13 work activity that in the context of an ongoing and integral business process is regular, 14 ordinary or routine in the operation of the business or is routinely done through the 15 business’ own employees.” A.R.S. § 23-902(B). “Young makes clear that even work that 16 is ‘a necessary and expected part’ of a business may not be ‘a part of the regular, ordinary 17 and routine operations’ of that business within the meaning of the statute.” Alsadi, 519 F. 18 Supp. 3d at 634 (quoting Young, 665 P.2d at 47). Instead, the statute only covers work 19 that the employer, or those in a similar business, would ordinarily do through its own 20 employees. Id. 21 ADC is a state agency responsible for managing Arizona-owned prison facilities 22 and the inmates housed therein. ADC, through its director, has a nondelegable duty to 23 provide adequate healthcare services for its prisoners. A.R.S. § 31-201.01(D); Wagner, 24 393 P.3d at 159. ADC “may contract for professional services to assist . . . in carrying out 25 this responsibility on behalf of the state.” A.R.S. § 31-201.01(D). But “ADC’s use of a 26 contractor to provide health services does not relieve it of this duty.” Wagner, 393 P.3d at

27 7 Because the final Home Insurance factor, “whether the work was performed in the usual and regular course of the employer’s business,” has sufficient overlap to the second prong 28 of Section 23-902(B), “a part or process in the trade or business of the employer,” the Court analyzes them together in Part II.B.2, infra. 1 159 (citing DeMontiney v. Desert Manor Convalescent Ctr. Inc., 695 P.2d 255, 257 2 (Ariz. 1985)). And providing inmates with healthcare services is an integral, if not part of 3 the “essential core” of operating, maintaining and controlling a prison. See Central 4 Management Co., 781 P.2d at 1378. 5 Importantly, at all times prior to Wexford’s contract, ADC provided healthcare 6 directly to inmates using its own employees. (Doc. 70 at 2.); see Wagner, 393 P.3d at 7 157. And while Arizona law authorizes ADC to contract for prison healthcare services, 8 doing so is not mandatory. The language used in the statute indicates that at any time, 9 ADC could again directly provide healthcare to inmates using its own employees. A.R.S. 10 § 31-201.01(D) (“The director may contract for professional services to assist [with the 11 provision of healthcare].”) (emphasis added). Thus, the Court finds that the work 12 performed by Centurion is of the kind “performed in the usual and regular course” and is 13 “a part and process of” the State’s business in maintaining prisons and managing its 14 prison populations. Anton v. Indus. Comm’n, 688 P.2d 192, 199 (Ariz. Ct. App. 1984) 15 (holding that a claimant was an employee for purposes of workers’ compensation because 16 his assigned work was not limited to a “well-defined incidental activity ancillary to the 17 central concerns of [the] business” but was instead “the ongoing basic employment 18 activity” itself). 19 Accordingly, because both prongs of Section 23-902(B) are established, the Court 20 finds that Plaintiff was a statutory employee of ADC at the time of her injury. 21 C. Applicability of Ford v. Revlon 22 Plaintiff argues that even if ADC is her statutory employer, her lawsuit arises from 23 Defendant McClelland’s intentional sexual harassment and may proceed against the State 24 of Arizona under Ford v. Revlon, 734 P.2d 580 (Ariz. 1987). (Doc. 154 at 4.) In Ford, the 25 plaintiff complained about sexual harassment at work to her employer several times over 26 the course of nine months. 734 P.2d at 581–84. Her employer did nothing about the 27 harassment until Ms. Ford attempted suicide. Id. at 583. The employer sought to bar Ms. 28 Ford from suing it under tort law for emotional distress because it contended that her 1 claims were subject to the workers’ compensation scheme. Id. at 586. The trial court 2 found that the employer’s actions and Ms. Ford’s resulting emotional injury were “not 3 ‘unexpected,’ accidental, or physical in nature so as to limit [her] recovery to the 4 workmen’s compensation claim. . . .” Id. The Arizona Supreme Court affirmed, finding 5 that neither the harassing co-employee’s nor the employer’s actions were accidents 6 within the meaning of the workers’ compensation act. Id. The court noted that “[a]n 7 injured employee may enforce common-law liability against his or her employer if not 8 encompassed by statute.” Id. 9 At the outset, the Court understands Plaintiff as arguing that the workers’ 10 compensation statute does not apply to her claims. (See Doc. 154 at 4.) There is no 11 genuine dispute, however, that she applied for workers’ compensation benefits for the 12 same injury underlying her claims in this suit. (Doc. 70-5 at 2.) And after she was 13 approved for benefits, she successfully collected workers’ compensation payments for 14 that injury. (Doc. 70-6; Doc. 70-7.) Now, Plaintiff impliedly asks this Court to find that 15 her benefits were not actually compensable under Arizona’s workers’ compensation 16 scheme. (Doc. 154 at 4.) Plaintiff argues that only injuries caused by “accident[s] arising 17 from or in the course of [] employment” are compensable. (Doc. 82 at 5 (“[A]ssaults or 18 other intentional torts are not compensable, even if occurring on the job.”).) While that 19 may be true in other circumstances, “[h]er successful pursuit of workers’ compensation 20 benefits forecloses this argument.”8 See Abelhady v. George Wash. Univ., No. 21 1:22-cv-01334 (TNM), 2022 WL 17364618, at *10 (D.D.C. Dec. 1, 2022). Given 22 8 The two other cases that Plaintiff relies on offer her no support. In both Estate of Sims v. 23 Industrial Commission of Arizona, 673 P,2d 310 (Ariz. Ct. App. 1983), and Epperson v. Industrial Commission of Arizona, 549 P.2d 247 (Ariz. Ct. App. 1976), the court was 24 tasked with determining whether a claimant’s injuries from a third-party’s intentional misconduct arose in the course of their employment after the Industrial Commission 25 denied their application for benefits. Here, the Commission reviewed Plaintiff’s application and determined that her injuries were compensable. Under Arizona law, 26 “[t]he sole and exclusive jurisdiction to determine all issues of law and fact relating to a claimant’s entitlement to compensation benefits is vested in the Industrial Commission.” 27 Sandoval v. Salt River Project Agric. Improvement & Power Dist., 571 P.2d 706, 710 (Ariz. Ct. App. 1977). Plaintiff did not challenge her benefits determination by requesting 28 a hearing before the Commission and her failure to do so rendered their determination “final and res judicata.” A.R.S. § 23-947. 1 Plaintiff’s election of benefits, the statute provides the exclusive remedy. 2 Indeed, Section 23-1022 includes a willful misconduct exception that reads, in 3 part: 4 If the injury is caused by the employer’s [or the 5 co-employee’s] willful conduct, . . . and the act causing the injury is the personal act of the employer, or . . . the 6 co-employee, . . . and [that] act indicates a wilful [sic] 7 disregard of the life, limb or bodily safety of employees, the injured employee may either claim compensation or maintain 8 an action at law for damages against the person or entity 9 alleged to have engaged in the wilful [sic] misconduct.

10 A.R.S. § 23-1022(A). The exception is clear that the employee can either seek workers’ 11 compensation benefits for injuries sustained from willful misconduct at work or file a 12 damages suit. Here, Plaintiff chose to file a workers’ compensation claim to compensate 13 her for her injuries arising from Defendant McClelland’s alleged sexual misconduct. 14 (Doc. 70-5 at 2.) Importantly, unlike Plaintiff here, the plaintiff in Ford did not attempt to 15 obtain workers’ compensation benefits for her injuries stemming from either her 16 co-employee’s or her employer’s conduct prior to filing suit. See generally Ford, 734 17 P.2d 580. 18 Additionally, Ms. Ford’s claims against her employer were based on the 19 employer’s own intentional actions and omissions that independently gave rise to tort 20 liability outside of the workers’ compensation statute. Ford, 734 P.2d at 586. Here, 21 Plaintiff’s claims against the State requiring proof of intentional conduct, namely assault 22 and battery, IIED, and false imprisonment, attach to the State via vicarious liability. 23 Defendant McClelland’s actions underlying those claims are the same as those 24 underlying Plaintiff’s accepted workers’ compensation claim. (Doc. 70-5 at 2 (“I was 25 sexually assaulted at work by a sergeant on 07/15/20 while working a night shift at ASPC 26 F – Central Unit in the TSU Dorms.”).) As a result, Ford is inapposite and Plaintiff 27 waived her right to file claims against the State arising from Defendant McClelland’s 28 actions. See Abelhady, 2022 WL 17364618 at *11 (“Professor Larson makes clear that □□ ‘the most reliable’ trigger of a workers’ compensation act exclusivity provision ‘is the 2|| actual acceptance of compensation benefits.’”) (quoting 6 Larson’s Workers’ 3 || Compensation Law § 100.012 (1999 ed.)). 4 Finally, regarding Plaintiff's negligent hiring claim, Ford is inapposite. “Ford 5 || considered claims for intentional torts, not claims based on negligence. Ford did not hold 6|| that negligence claims against an employer are not governed by Arizona’s workers’ □□ compensation statute. . . . Because Plaintiff's claim is based on the negligence of her 8 || statutory employer, it is barred by the Arizona workers’ compensation statute.” Learner 9|| v. John Hancock Financial Services, Inc., No. CV-09-01933-PHX-ROS, 2010 WL 10}} 11519170, at *3 (D. Ariz. Sept. 9, 2010). 11} II. CONCLUSION 12 Accordingly, 13 IT IS ORDERED that the State of Arizona’s Motion to Dismiss (Doc. 70) is GRANTED. 15 IT IS FURTHER ORDERED that Counts 1 through 4 of the First Amended 16 || Complaint are dismissed for lack of subject-matter jurisdiction. The State of Arizona is || dismissed from this case. 18 Dated this 3rd day of July, 2023. 19 “0 Wichael T. Fibula 71 Michael T. Liburdi 22 United States District Judge 23 24 25 26 27 28

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