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`Case 2:21-cv-00294-DWL Document 20 Filed 10/20/21 Page 1 of 10
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`IN THE UNITED STATES DISTRICT COURT
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`FOR THE DISTRICT OF ARIZONA
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`Cynthia Sagers,
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`Plaintiff,
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`v.
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`Arizona State University, et al.,
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`Defendants.
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`No. CV-21-00294-PHX-DWL
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`ORDER
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`INTRODUCTION
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`In July 2018, Dr. Cynthia Sagers (“Dr. Sagers”) was hired by Arizona State
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`University (“ASU”) as a vice president of research, at an annual salary of $275,000. (Doc.
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`17 ¶ 10.) Her direct supervisor was Dr. Sethuraman Panchanathan (“Dr. Panchanathan”).
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`(Id. ¶ 11.)
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`In this action, Dr. Sagers alleges that she raised a grievance with ASU’s human
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`resources department in August 2019 about the environment of fear and intimidation that
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`Dr. Panchanathan had created. (Id. ¶¶ 11-15.) Dr. Sagers further alleges that, after she
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`raised this grievance, Dr. Panchanathan “assign[ed] her tasks that were outside the scope
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`of her employment (and frankly below her qualifications), while the same tasks were not
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`assigned to [her] male colleagues,” and then subjected her to a “retaliatory demotion” that
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`was later ratified by ASU. (Id. ¶¶ 16-42.) Dr. Sagers contends this demotion has stunted
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`her career, significantly reduced her pay, and caused her to miss out on promotion
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`opportunities that have instead been made available to “a less experienced, less qualified
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`Case 2:21-cv-00294-DWL Document 20 Filed 10/20/21 Page 2 of 10
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`male colleague.” (Id.) Based on these allegations, Dr. Sagers asserts four claims in her
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`operative pleading:
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`(1) A claim under 42 U.S.C. § 1983 against Dr. Panchanathan in his individual
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`capacity, premised on the allegation that Dr. Panchanathan violated her First
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`and Fourteenth Amendment rights (id. ¶¶ 43-52);
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`(2) A state-law claim against Dr. Panchanathan under A.R.S. § 38-532, an
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`Arizona whistleblowing statute (id. ¶¶ 53-61);
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`(3) A Title VII gender discrimination claim against both Dr. Panchanathan and
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`the Arizona Board of Regents (“ABOR”) (id. ¶¶ 62-86); and
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`(4) A Title IX gender discrimination claim against both Dr. Panchanathan and
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`ABOR (id. ¶¶ 87-111).
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`Now pending before the Court is a partial motion to dismiss filed by Dr.
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`Panchanathan and ABOR (together, “Defendants”). In a nutshell, Defendants argue that
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`Dr. Panchanathan should be dismissed as a defendant in Counts Two, Three, and Four.
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`(Doc. 17.) In response, Dr. Sagers acknowledges that Dr. Panchanathan should be
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`dismissed from Counts Three and Four but contends he is a proper defendant as to Count
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`Two. (Doc. 18.) For the reasons that follow, the Court agrees with Defendants and thus
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`grants the partial motion to dismiss in its entirety.
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`BACKGROUND
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`On February 17, 2021, Dr. Sagers initiated this action by filing a complaint. (Doc.
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`1.) This iteration of the complaint differed from the current version in that it named ASU
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`(rather than ABOR) as the entity defendant, did not include a § 1983 claim, and included
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`an array of additional state-law claims. (Id.)
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`On June 17, 2021, the parties filed a stipulated motion to extend the time to respond
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`to the complaint, explaining that additional time was needed because Dr. Sagers “currently
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`is evaluating Defendants’ contentions pertaining to certain alleged deficiencies in
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`Plaintiff’s Complaint, and whether amendment may be necessary to address those alleged
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`deficiencies in an effort to potentially avoid unnecessary motion practice and the costs
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`Case 2:21-cv-00294-DWL Document 20 Filed 10/20/21 Page 3 of 10
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`attendant thereto.” (Doc. 12.) This request was granted and the response deadline was
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`extended to July 2, 2021. (Doc. 14.)
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`On July 2, 2021, Dr. Sagers filed her operative pleading, the first amended
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`complaint (“FAC”). (Doc. 16.)
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`On July 16, 2021, Defendants filed the pending partial motion to dismiss the FAC.
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`(Doc. 17.)
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`On July 30, 2021, Dr. Sagers filed a response. (Doc. 18.)1
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`On August 6, 2021, Defendants filed a reply. (Doc. 19.)
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`DISCUSSION
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`I.
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`Legal Standard
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`“A motion to dismiss for lack of subject matter jurisdiction under Rule 12(b)(1) may
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`attack either the allegations of the complaint as insufficient to confer upon the court subject
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`matter jurisdiction, or the existence of subject matter jurisdiction in fact.” Ader v.
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`SimonMed Imaging Inc., 324 F. Supp. 3d 1045, 1048 (D. Ariz. 2018) (internal quotation
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`marks omitted). “Where the jurisdictional issue is separable from the merits of the case,
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`the judge may consider the evidence presented with respect to the jurisdictional issue and
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`rule on that issue, resolving factual disputes if necessary.” Thornhill Publ’g Co. v. Gen.
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`Tel. & Elecs. Corp., 594 F.2d 730, 733 (9th Cir. 1979). “The party asserting jurisdiction
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`has the burden of proving all jurisdictional facts.” Indus. Tectonics, Inc. v. Aero Alloy, 912
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`F.2d 1090, 1092 (9th Cir. 1990).
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`II.
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`The Parties’ Arguments
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`Defendants move under Rule 12(b)(1) of the Federal Rules of Civil Procedure to
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`dismiss Dr. Panchanathan as a defendant from Counts Two, Three, and Four. (Doc. 17.)
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`As for Counts Three and Four (which are claims under Title VII and Title IX), Defendants
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`contend that dismissal is warranted because “neither statute authorizes suit against
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`individuals.” (Id. at 1, 3.) As for Count Two, Defendants contend that dismissal is
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`1
`Dr. Sagers has requested oral argument, but the request is denied because argument
`will not aid the decisional process.
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`Case 2:21-cv-00294-DWL Document 20 Filed 10/20/21 Page 4 of 10
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`warranted for two independent reasons: (1) it is barred by the Eleventh Amendment,
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`because Dr. Panchanathan is being sued in his capacity as a state official; and (2) it is barred
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`by A.R.S. § 38-533, which provides that Dr. Panchanathan is “[e]xempt” from suit because
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`he “is an ASU employee.” (Id. at 2-3.)
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`In response, Dr. Sagers concedes that “[a]s to Counts III and IV . . . these claims
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`may be dismissed as to Dr. Panchanathan.” (Doc. 18 at 1.) However, Dr. Sagers argues
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`that Defendants’ challenges to Count Two lack merit. As for the Eleventh Amendment,
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`Dr. Sagers contends that “Dr. Panchanathan is not afforded immunity under the Ex Parte
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`Young Doctrine, where as here, the suit is targeting the acts of an individual who happens
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`to be a state employee for acts beyond the scope of his official authority.” (Id. at 6-8.) Dr.
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`Sagers also clarifies that “the claim [in Count Two] is being made against Dr. Panchanathan
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`in both his official and individual capacity.” (Id. at 8.) As for A.R.S. § 38-533, Dr. Sagers
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`argues as an initial matter that “it does not apply to Dr. Panchanathan at all,” but “rather
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`relates to the victim of the retaliation related to the disclosure, which is Dr. Sagers.” (Id.
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`at 9.) On the merits, Dr. Sagers argues that A.R.S. § 38-533 is facially inapplicable here
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`because it “is intended to protect whistleblowers from retaliation by the state officials they
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`report against, and not . . . as a shield for the state tort-feasor to hide behind after willfully
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`or negligently acting outside of their official authority.” (Id. at 9-10.) At a minimum, Dr.
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`Sagers argues that even though ASU had a whistleblowing policy in place at the time of
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`the events in question,2 resolution of any claim of immunity “would require resolution of
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`factual issues going directly to the merits,” and because Defendants failed to submit any
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`evidence in support of their motion, “summary adjudication of the claim is not appropriate
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`at this juncture.” (Id. at 10-12.)
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`In reply, Defendants argue that Dr. Sagers cannot rely on Ex Parte Young to avoid
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`their Eleventh Amendment claim because Ex Parte Young “does not apply to claims against
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`state officials based on state law.” (Doc. 19 at 2-3.) As for A.R.S. § 38-533, Defendants
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`2
`Dr. Sagers concedes in her response that “[t]here was a policy in place” (Doc. 18
`at 10) and attaches a copy of the relevant policy (Policy 6-914) as an exhibit (Doc. 18-1).
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`Case 2:21-cv-00294-DWL Document 20 Filed 10/20/21 Page 5 of 10
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`contend there are no outstanding factual disputes that might preclude relief because Dr.
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`Sagers has now filed a copy of the ASU whistleblowing policy that was in place at relevant
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`times (id. at 3) and argue that, under § 38-533, Dr. Sagers’s sole remedy is to exhaust her
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`administrative remedies and then seek review in the Superior Court of Arizona under
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`Arizona’s Administrative Procedures Review Act (id. at 4).
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`III. Analysis
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`The Court agrees with Defendants that Dr. Sagers’s claim in Count Two is barred
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`by A.R.S. § 38-533.3 Given this conclusion, it is unnecessary to resolve whether that claim
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`is also barred by the Eleventh Amendment.4
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`3
`Although Defendants seek relief under Rule 12(b)(1), which authorizes dismissal
`based on a lack of subject-matter jurisdiction, Defendants’ challenge to Count Two based
`on A.R.S. § 38-533 is arguably better characterized as a Rule 12(b)(6) challenge because
`it goes to the validity of the underlying cause of action. Cf. Steel Co. v. Citizens for a Better
`Env’t, 523 U.S. 83, 89 (1998) (“It is firmly established in our cases that the absence of a
`valid (as opposed to arguable) cause of action does not implicate subject-matter
`jurisdiction, i.e., the courts’ statutory or constitutional power to adjudicate the case. . . .
`Dismissal for lack of subject-matter jurisdiction because of the inadequacy of the federal
`claim is proper only when the claim is ‘so insubstantial, implausible, foreclosed by prior
`decisions of this Court, or otherwise completely devoid of merit as not to involve a federal
`controversy.’) (citations omitted). Nevertheless, the Ninth Circuit would discourage
`denying a Rule 12(b)(1) motion if it could be granted under Rule 12(b)(6). Cf. Al-Qarqani
`v. Chevron Corp., 8 F.4th 1018, 1027 (9th Cir. 2021) (“The Supreme Court has held that
`we may affirm a district court’s judgment if the court mistakenly dismisses a claim for lack
`of subject-matter jurisdiction rather than for failure to state a claim—remand in those
`circumstances is unnecessary because it would only require a new Rule 12(b)(6) label for
`the same Rule 12(b)(1) conclusion. . . . Because there is no reason to remand to the district
`court simply to direct it to affix a new label to its order, we affirm the judgment.”) (citations
`and quotations omitted). Thus, even if Defendants’ challenge to Count Two under A.R.S.
`§ 38-533 were treated as a Rule 12(b)(6) challenge, Defendants would be entitled to relief.
`Mollett v. Netflix, Inc., 795 F.3d 1062, 1065 (9th Cir. 2015) (court may dismiss under Rule
`12(b)(b) based on “a lack of a cognizable legal theory”).
`4
`Although their briefing is not a model of clarity on the issue, Defendants appear to
`argue that the Eleventh Amendment would bar the state-law claim in Count Two even if it
`were asserted against Dr. Panchanathan in his individual capacity (which, Dr. Sagers
`argues in her response, it partly is). If this is Defendants’ position, the Court is skeptical.
`See, e.g., Pena v. Gardner, 976 F.2d 469, 473-74 (9th Cir. 1992) (“A state law claim
`pendent to a federal claim that survives eleventh amendment analysis must itself be
`subjected to eleventh amendment scrutiny. The defendants, apparently conceding they
`were sued in their individual capacities, argue that Pennhurst II stands for the proposition
`that individual capacity claims against officials who are alleged to have violated state law
`are barred by the eleventh amendment. We disagree. In Pennhurst II, the Supreme Court
`held that the eleventh amendment bars suits in federal court, for both retrospective and
`prospective relief, brought against state officials acting in their official capacities alleging
`a violation of state law. The court distinguished the situation where a plaintiff brings suit
`against a state official acting in his individual capacity. . . . We conclude that the eleventh
`amendment will not bar pendent state claims by Pena against state officials acting in their
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`As background, Count Two is a claim under A.R.S. § 38-532. (Doc. 17 ¶¶ 53-61.)
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`This whistleblowing statute is part of Title 38 of the Arizona Revised Statutes, which
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`applies to “Public Officers and Employees.” Under § 38-352(A), “[i]t is a prohibited
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`personnel practice for an employee who has control over personnel actions to take reprisal
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`against an employee for a disclosure of information of a matter of public concern by the
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`employee to a public body that the employee reasonably believes evidences . . . [a] violation
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`of any law . . . [or] [m]ismanagement, a gross waste or monies or an abuse of authority.”
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`Notably, although § 38-352 identifies various administrative remedies that are available to
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`public employees who are subjected to this sort of prohibited personnel practice,5 it also
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`identifies certain remedies that an aggrieved public employee may recover in a court
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`action.6 For this and other reasons, Division One of the Arizona Court of Appeals has
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`concluded that § 38-352 should be construed as creating “an alternative, permissive
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`administrative remedy that leaves open the opportunity for an employee to file an original
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`action in the superior court.” Walters v. Maricopa Cnty., 990 P.2d 677, 682 (Ariz. Ct. App.
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`1999). Division Two of the Arizona Court of Appeals has reached a different conclusion,
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`individual capacities.”) (citations omitted); Ashker v. Cal. Dep’t of Corr., 112 F.3d 392,
`393, 395 n.3 (9th Cir. 1997) (holding that “the Eleventh Amendment does not bar Ashker’s
`state law claims” because “Ashker sued Brodeur and Astorga in their individual capacities”
`but clarifying that “[t]o the extent that an alternative claim was asserted against the
`defendants in their official capacities, that claim is, of course, barred”).
`5
`See, e.g., id. § 38-532(H) (“If an employee or former employee believes that a
`personnel action taken against him is the result of his disclosure of information under this
`section, he may make a complaint to an appropriate independent personnel board, if one is
`established or authorized pursuant to § 38-534, or to a community college district
`governing board, school district governing board or city or town council. If an independent
`personnel board has not been established or authorized, or if a school district governing
`board, a community college district governing board or a city or town council does not hear
`and decide personnel matters brought pursuant to this section, the employee or former
`employee may make a complaint to the state personnel board. A complaint made pursuant
`to this subsection shall be made within ten working days after the effective date of the
`action taken against him.”).
`6
`See, e.g., id. § 38-352(D) (“An employee or former employee against whom a
`prohibited personnel practice is committed may recover attorney fees, costs, back pay,
`general and special damages and full reinstatement for any reprisal resulting from the
`prohibited personnel practice as determined by the court.”); id. § 38-352(K) (“An
`employee or former employee may also seek injunctive relief as is otherwise available in
`civil actions. A court may award reasonable attorney fees to an employee or former
`employee who prevails in an action pursuant to this section, but the award of attorney fees
`shall not exceed $10,000.”).
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`holding “a classified public employee must exhaust his or her administrative remedies
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`available under the system provided by §§ 11-351 through 11-356 before filing an action
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`in superior court under . . . § 38-532.” Mullenaux v. Graham Cnty., 82 P.3d 362, 368 (Ariz.
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`Ct. App. 2004).
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`Although this split of authority might appear to raise unsettled questions about
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`whether a public employee (such as Dr. Sagers) may pursue a claim under § 38-532 in a
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`court action despite not exhausting her available administrative remedies, it is unnecessary
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`to attempt to reconcile Walters and Mullenaux here due to Dr. Sagers’s status as a particular
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`type of public employee—an employee of a state university. This status, in turn, implicates
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`A.R.S. § 38-533, which is entitled “Exemptions” and provides as follows:
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`This article does not apply to an employee or former employee of a state
`university or the board of regents which has in effect at the time a personnel
`action is taken against the employee a rule or provision for the protection of
`its employees from reprisal for the disclosure of information to a public body,
`except that the employee or former employee may appeal the final
`administrative decision to the superior court as provided in title 12, chapter
`7, article 6. Notwithstanding section 12-910, an employee or former
`employee who has been dismissed is entitled to a trial de novo in superior
`court.
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`(Id.) Put simply, § 38-533 provides that although a public employee who is subjected to
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`an adverse personnel action based on whistleblowing activity is ordinarily entitled to
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`pursue the remedies set forth in § 38-532 (which, as discussed, may potentially be pursued
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`in a court action), a different set of procedures applies if two conditions are satisfied: first,
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`the employee was employed by “a state university or the board of regents”; and second,
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`that employer had “in effect at the time [the] personnel action [was] taken . . . a rule or
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`provision for the protection of its employees from reprisal for the disclosure of information
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`to a public body.” If both conditions are satisfied, § 38-532 “does not apply” and the
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`employee’s only recourse is to follow the procedures set forth in the employer’s internal
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`policy, with an eventual right to appeal any adverse administrative decision to the state
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`superior court.
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`Arizona courts, as well as federal courts applying Arizona law, have construed
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`§ 38-533 in this manner. In Arizona State Board of Regents v. Arizona State Personnel
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`Board, 953 P.2d 904 (Ariz. Ct. App. 1996), an ASU employee who believed she had been
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`subjected to whistleblower retaliation filed both an administrative complaint with the
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`Arizona State Personnel Board, in which she alleged a violation of § 38-352, and an
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`internal grievance with ASU. Id. at 905-06. ASU, in turn, moved to dismiss the
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`administrative complaint on jurisdictional grounds, arguing that it was barred by § 38-533.
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`The Arizona Court of Appeals agreed with ASU, holding that “ASU [was] exempt from
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`the Whistleblower Act” under § 38-533 because the employee was employed by ASU and
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`“ASU had a whistleblower protection policy in effect at the time [the] allegedly retaliatory
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`personnel actions were taken . . . .” Id. at 907. The court also rejected the plaintiff’s
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`argument that § 38-533 should be deemed inapplicable because ASU’s internal policy was
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`less protective and comprehensive than § 38-532, holding that “[t]he legislature has
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`nowhere indicated that universities must protect whistleblowers from every type of adverse
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`personnel action possible. ASU has adopted a policy that protects employees from the
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`most severe adverse actions as well as most other unfavorable actions that could be taken
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`in retaliation against a whistleblower. These protections are clearly sufficient to entitle
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`ASU to be exempt from the statutory whistleblower provisions . . . .” Id. at 908.7
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`In McCormick v. Arizona Board of Regents, 2007 WL 2948981 (D. Ariz. 2007), the
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`court dismissed a § 38-532 claim under similar circumstances. There, an employee of
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`Northern Arizona University (“NAU”) filed a lawsuit in federal court in which he asserted,
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`among other things, that he had engaged in “a protected act of whistle blowing and that
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`7
`In Arizona Board of Regents, the Arizona Court of Appeals answered two questions:
`(1) whether Ҥ 3-533 expressly exempts Arizona State University from whistleblower
`complaints” and (2) whether “§41-1062 allows an agency to exempt itself from the right
`to counsel and subpoena provisions of the statute . . . .” Arizona State Bd. of Regents v.
`Arizona State Pers. Bd., 985 P.2d 1032, 1033 (Ariz. 1999). The Arizona Supreme Court
`granted review as to the second issue and reversed. Id. In the course of doing so, the
`Supreme Court clarified that it would preserve the Court of Appeals’ analysis as to § 38-
`533: “Because we agreed with the court of appeals that § 38-533 expressly exempts
`Arizona State University from whistleblower complaints brought before the State
`Personnel Board, we denied review on that issue.” Id. at 1032. Thus, the Court views the
`Court of Appeals’ interpretation of § 38-533 as controlling under Arizona law.
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`Case 2:21-cv-00294-DWL Document 20 Filed 10/20/21 Page 9 of 10
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`[his] subsequent termination was therefore improper.” Id. at *2. In response to a motion
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`to dismiss, the plaintiff more specifically argued that his whistleblowing activity “was
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`protected by A.R.S. § 38-532.” Id. Nevertheless, the court concluded that “[b]ecause
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`[NAU] had a protective policy in place at the time of Plaintiff’s termination, as required by
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`§ 38-533, Defendant is exempt from § 38-352, the section on which Plaintiff now bases his
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`whistle blower claim.” Id. at *3. Although NAU did not actually proffer its internal policy
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`during the motion-to-dismiss briefing process, the court held that “the policy can readily
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`be determined from sources whose accuracy cannot reasonably be questioned and therefore
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`is subject to judicial notice.” Id.
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`And again, in Lee v. Arizona, 2011 WL 2580400 (D. Ariz. 2011), the plaintiff was
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`“an Associate Professor at NAU” who filed a federal lawsuit in which she asserted, among
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`other things, a claim “under Arizona’s ‘whistleblower’ statute, A.R.S. § 38–532” premised
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`on the allegation “that as a result of her May 27, 2008 email to Dean Schulz, Defendants
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`have retaliated against Plaintiff by placing her on leave and instigating an investigation of
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`Plaintiff that ultimately led to her dismissal.” Id. at *1-2. Because the plaintiff was “clearly
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`an employee of a state university or the board of regents” and the undisputed evidence
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`showed that NAU “had in effect ‘a rule or provision for the protection of its employees
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`from reprisal’” at the time of the challenged personnel action, the court concluded that the
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`plaintiff’s § 38-532 claim was barred by § 38-533. Id. at *9.
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`Given this backdrop, the Court has little trouble concluding that Dr. Sagers’s claim
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`in Count Two is barred by § 38-533. It is undisputed that Dr. Sagers qualifies as “an
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`employee or former employee of a state university”8 and it is also undisputed that, at the
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`time of the challenged personnel action (i.e., Dr. Sagers’s demotion, which is alleged to
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`have occurred in 2020 or on January 1, 2021), ASU had adopted “a rule or provision for
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`the protection of its employees from reprisal for the disclosure of information to a public
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`body.” Although Defendants somewhat inexplicably failed to provide (or even refer to)
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`this policy in their motion, Dr. Sagers provided a copy with her response (Doc. 18-1), and
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`8
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`Dr. Sagers concedes she was (and is) an employee of ASU. (Doc. 17 ¶ 10.)
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`Case 2:21-cv-00294-DWL Document 20 Filed 10/20/21 Page 10 of 10
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`the policy is, at any rate, subject to judicial notice for the same reasons as the NAU policy
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`in McCormick.
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`Dr. Sagers’s arguments as to why § 38-533 should be deemed inapplicable lack
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`merit. Her primary argument appears to be that, for policy reasons, the Court should refuse
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`to adopt any construction of § 38-533 that might chip away at the protections afforded to
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`whistleblowers. But it is the role of the legislature, not the courts, to make policy choices,
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`and here the Arizona legislature has made such a choice through its enactment of § 38-533.
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`Arizona State Bd. of Regents, 953 P.2d at 907 (“The legislature has nowhere indicated that
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`universities must protect whistleblowers from every type of adverse personnel action
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`possible.”). Dr. Sagers also suggests that unresolved factual issues make it impossible to
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`rule on the applicability of § 38-533 at this juncture, but the Court disagrees. As discussed
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`in Arizona State Board of Regents, McCormick, and Lee, the exemption applies so long as
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`the plaintiff was an employee of a public university and the university had a policy in place
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`at the time of the challenged personnel action. It is undisputed that both conditions are
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`satisfied here.
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`Accordingly,
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`IT IS ORDERED that Defendants’ partial motion to dismiss (Doc. 17) is granted.
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`Dr. Sagers’s only remaining claims are (1) a § 1983 claim in Count One against Dr.
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`Panchanathan; (2) a Title VII claim in Count Three against ABOR; and (3) a Title IX claim
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`in Count Four against ABOR.
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`Dated this 19th day of October, 2021.
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