## Facts

- Plaintiffs were employees of the Arizona Department of Health Services (ADHS) who served as the internal audit staff for the Arizona Health Care Cost Containment System (AHCCCS).
- AHCCCS was administered by McAuto Systems Group, Inc. under a state contract.
- Plaintiffs conducted an audit of the administrator contract and submitted a draft audit report to ADHS Director Donald B. Mathis on May 4, 1983.
- Plaintiffs alleged the audit was performed under generally accepted auditing standards and that recommendations were made in good faith.
- Mathis refused public access to the audit report, but made statements in the presence of others (including a reporter) criticizing the audit and auditors, including characterizing them as “incompetent and unqualified,” alleging they had a “rich fantasy life,” and describing them as “uninformed dissidents.”
- The statements were reported in the press.
- Plaintiffs sued Mathis for defamation based on the statements.

## Issues

1. Whether a high-level state executive official is absolutely immune from defamation liability for statements made in the course of official duties.
2. If absolute immunity does not apply, whether the official is protected by qualified immunity and what standard governs loss of that protection.
3. Whether dismissal on the pleadings was proper where the complaint alleged defamatory statements made by an agency director about subordinate employees.

## Decision

- The Arizona Supreme Court held that Mathis was not entitled to absolute immunity for the allegedly defamatory statements.
- The Court held that Mathis was entitled to qualified immunity for statements made within the general scope of his executive duties.
- The qualified immunity is defeated if the official acted with “malice,” meaning knowledge of falsity or reckless disregard for truth.
- Because the case had been dismissed based on absolute immunity, dismissal was improper under the qualified-immunity framework.
- The case was remanded for further proceedings to determine whether Mathis’s statements fell outside qualified immunity under the malice standard.

## Legal Principles

- High-level state executive officials do not receive blanket absolute immunity from defamation suits for public statements made in connection with their duties.
- Executive-official protection in defamation actions is generally a qualified immunity that applies when the official acts within the outer perimeter of official duties and in good faith.
- Qualified immunity is lost if the plaintiff proves the official made defamatory statements with knowledge of falsity or reckless disregard for their truth or falsity.
- Absolute immunity is reserved for narrow contexts where the nature of the function requires complete protection (e.g., certain legislative, judicial, and closely related prosecutorial functions), and does not extend broadly to executive administrators’ public comments about employees.

## Conclusion

The Arizona Supreme Court rejected absolute executive immunity for an agency director’s allegedly defamatory statements about subordinate auditors and held that only qualified immunity applies, permitting liability upon proof that the director spoke with knowing or reckless falsity, and remanded for further proceedings under that standard.


Chamberlain v. Mathis, 729 P.2d 905 (Ariz. 1986)