A recent Ninth Circuit decision highlights the importance of considering whether a plaintiff’s failure to comply with a state-law pre-suit notice requirement can be used to quickly defeat a class action. The court rejected plaintiff’s argument that such pre-suit notice rules do not apply to putative class actions.

In Ellis v. Salt River Project Agricultural Improvement and Power District, ___ F.4th ___, 2022 WL 276031 (9th Cir. Jan. 31, 2022), plaintiff asserted a series of federal and state-law claims against a Phoenix-area power and water utility, challenging a new price plan for certain customers with solar energy systems. The district court dismissed plaintiff’s state-law claims, holding that they were barred because he failed to comply with Arizona’s notice-of-claim requirement for claims against a public entity. See Ariz. Rev. Stat. Ann. § 12-821.01(A).

The Ninth Circuit upheld the dismissal, rejecting plaintiff’s argument that the notice statute conflicts with Rule 23 by imposing an extra barrier to class certification. The court noted that the statute does not even mention class actions and requires any plaintiff, not just a potential class representative, to file a notice of claim before filing suit. The court also distinguished Campbell-Ewald Co. v. Gomez, 577 U.S. 153 (2016), where the Supreme Court held that an unaccepted offer of judgment under Rule 68 does not moot a putative class representative’s claims. Unlike a Rule 68 offer of judgment, which seeks to extinguish an existing claim, “a claim under Arizona law asserted against a public entity does not become ‘live’ until the notice of claim is filed.” The court also held that the notice statute was a substantive rule that applies in federal court under the Erie doctrine.

The court then held that plaintiff’s attempted notice was deficient. The notice statute “instructs claimants to include a particular and certain amount of money that, if agreed to by the government entity, will settle the claim.” Rather than complying, the Ellis plaintiff conditioned settlement on a demand for class-wide injunctive relief and monetary relief based on a formula that depended on the unknown number of class members and the unknown date on which injunctive relief might be awarded. Because the notice did not state the “specific amount” for which the claim could be settled, the Ninth Circuit held that plaintiff failed to comply with the state-law pre-suit notice requirement.

Ellis reaffirms that state-law pre-suit notice requirements apply fully to class actions. While there is considerable variation in the pre-suit notice laws of different states, such laws, where they exist and apply to an asserted claim, may offer a viable strategy for defeating a class action at the threshold.