Federal Court Enforces $975,000 Settlement Agreement in Case Involving Sheriff Arpaio

An agreement to settle a lawsuit filed against Maricopa County and its sheriff, Joe Arpaio, was enforced by the Ninth Circuit Court of Appeals in a ruling dated June 2, 2014.

Plaintiffs Earl and Mary Rose Wilcox filed suit in the U.S. District Court in Arizona, alleging they were wrongfully harassed, investigated, and prosecuted by Sheriff Arpaio and Maricopa County in retaliation for their outspoken criticism of Arpaio.

Because more than a hundred other people were expected to file similar claims against the County and Arpaio, the County passed a resolution setting up an alternative dispute resolution program to streamline the litigation. The resolution authorized County Manager David Smith to take any actions necessary to resolve the complaints, including "entering into binding arbitration/mediation."

Many claims began to quickly settle, including two in the $500,000 range. Key to this case is that these two settlements were confirmed via email from Smith’s office to claimants' attorneys. The Wilcoxes also received a settlement confirmation email from Smith's office, which was identical to the other claimants' emails, except for the amount of the settlement and the added line, "This settlement is subject to any further approvals deemed necessary by the parties."

The County and Arpaio subsequently refused to pay the Wilcoxes the $975,000 settlement amount, arguing that the "further approvals" clause of the email was not met. The Plaintiffs argued that the agreement was binding, and that the "further approvals” clause only referred to Defendants’ possible compliance with an Arizona statute that required the approval of at least one member of the board of supervisors before a settlement is final.

The district court ruled in favor of the Wilcoxes after county lawyers conceded that the Arizona statute in question did not apply to this case. The County and Arpaio appealed the case to the Ninth Circuit, contending that the emails presented as evidence by the Wilcoxes' attorneys were privileged and should have been inadmissible in district court.

The Ninth Circuit first found that federal privilege law, not state privilege law, applied. Where the evidence relates to both state and federal law claims, "we are not bound by Arizona law on privilege," the court wrote.

However, the circuit court then went on to find that the County waived any privilege defense because their briefing assumed Arizona privilege law governed, "and failed to argue that the evidence admitted should be privileged under federal law."

The Ninth Circuit then affirmed the district court's findings that the settlement agreement was binding and enforceable. Noting that Smith was fully authorized by the County (as well as state law) enters into binding agreements, and that the "further approvals" sentence referred only to an inapplicable statute, the $975,000 settlement stood.

The Wilcoxes were represented by attorneys Jeffery Leonard, James Armstrong, and Helen Holden of Sacks Tierney in Scottsdale, Arizona.

See: Wilcox v. Arpaio, 753 F.3d 872 (9^th Cit. 2014).

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