Case Title: Pelikan/Tauman v. Myers

Citation: 

Docket Number: 

State: oregon

Court: Oregon Supreme Court

Date: 2007-02-23T00:00:00Z

Document:
FILED: February 23, 2007
IN THE SUPREME COURT OF THE STATE OF OREGON
GLENN PELIKAN,
Petitioner,
v.
HARDY MYERS,
Attorney General,
State of Oregon,
Respondent.
(SC S54203 (Control))
CHARLES TAUMAN,
Petitioner,
v.
HARDY MYERS,
Attorney General,
State of Oregon,
Respondent.
(SC S54288)
(Cases Consolidated)
En Banc
On petition to review ballot title.
Submitted on the record January 8, 2007.
Kevin L. Mannix, of Kevin Mannix, PC, Salem, filed the petition for petitioner
Pelikan.
Steven C. Berman, of Stoll, Stoll, Berne, Lokting & Shlachter, PC, Portland, filed
the petition and reply to respondent's answering memorandum for petitioner Tauman.
Paul L. Smith, Assistant Attorney General, Salem, filed the answering memoranda
for respondent.  With him on the memoranda were Hardy Myers, Attorney General, and
Mary H. Williams, Solicitor General.
KISTLER, J.
Ballot title referred to Attorney General for modification.
KISTLER, J.
These consolidated ballot title review proceedings brought under ORS
250.085(2) concern the Attorney General's certified ballot title for Initiative Petition 51
(2008).  Because petitioners submitted timely written comments to the Secretary of State
concerning the Attorney General's draft ballot title, they may seek judicial review of the
certified ballot title.  See ORS 250.085(2) (stating that requirement).  We review the
certified ballot title for substantial compliance with the requirements of ORS 250.035(2). 
See ORS 250.085(5) (stating standard of review).  For the reasons explained below, we
refer the ballot title to the Attorney General for modification.
This case arises in an unusual procedural posture.  After receiving
comments on the draft ballot title for Initiative Petition 51, the Attorney General wrote a
letter to the Secretary of State describing the draft ballot title, the comments that he had
received, and the modified ballot title that he intended to certify.  However, instead of
certifying the modified ballot title for Initiative Petition 51, the Attorney General
mistakenly certified a ballot title for a different initiative petition.  On review, all the
parties agree, and so do we, that the ballot title that the Attorney General certified must be
modified.  See ORS 250.085(8) (requiring modification of ballot title that fails to
substantially comply with ORS 250.035).
The dispute in this case concerns the ballot title that the Attorney General
intended to certify.  Petitioner Pelikan and the Attorney General urge us to certify that
ballot title.  Petitioner Tauman argues that the intended ballot title does not substantially
comply with the requirements of ORS 250.035.  Although ORS 250.085 generally
contemplates review of certified ballot titles, this court has considered challenges to the
ballot title that the Attorney General intended to certify.  See Carley/Towers v. Myers, 340
Or 222, 132 P3d 651 (2006) (so doing).  Following Carley/Towers, we turn to Tauman's
objections to the intended ballot title.
The proposed measure, if adopted, would add the following text to the
Oregon Revised Statutes:
"(1) In any civil action, no lawyer may charge a client a contingent
fee in excess of the following:
"(a) 25% of the first $25,000 recovered, and
"(b) 10% of any recovery above $25,000[.]
"(2) A contingent fee means a fee where the lawyer is paid a fee as a
percentage of any money which is awarded in a legal case.
"(3) This contingent fee limitation does not apply to costs and
expenses, which may be fully reimbursed to the lawyer.
"(4) This Act takes effect upon passage and applies to all contingent
fee agreements made on or after the effective date of this act."
The Attorney General intended to certify the following ballot title for
Initiative Petition 51:
"LIMITS AMOUNT OF CONTINGENT FEES THAT LAWYERS MAY
CHARGE CLIENTS FOR REPRESENTATION IN CIVIL CASE
"RESULT OF 'YES' VOTE:  'Yes' vote limits contingent fee lawyer may
charge in civil case:  25% of first $25,000 recovered, 10% of recovery
above $25,000.
"RESULT OF 'NO' VOTE:  'No' vote retains current law, placing no
limitations on percentage of recovery in civil case that a lawyer can charge
under a contingent fee agreement.
"SUMMARY:  Current law does not define the phrase 'contingent fee' in
lawyer-client context.  Current law places no limitations on the percentage
of recovery or award that a lawyer can charge a client as part of a
contingency fee.  Measure defines 'contingent fee' as a fee where lawyer is
paid a percentage of money awarded to the client in a legal case.  Measure
limits the contingent fee that a lawyer may charge to a client in a civil case
to no more than:  (1) 25% of the first $25,000 recovered by the client; and
(2) 10% of any recovery by the client above $25,000.  Measure does not
limit ability of lawyer to be reimbursed for all costs and expenses incurred. 
Other provisions."
Tauman challenges the caption, the "yes" vote result statement, the "no" vote result
statement, and the summary.
A ballot title caption must contain "not more than 15 words that reasonably
identif[y] the subject matter of the state measure."  ORS 250.035(2)(a).  Tauman argues
that the caption fails to comply with that standard because its use of the word "limits" is
misleading.  Specifically, Tauman argues that the word "limits" implies that there is
currently no limit on the amount of fees that a lawyer can charge a client in a civil case. 
He contends that such limits do exist.
We agree with Tauman that existing legal rules impose limits on the amount
of fees that a lawyer can charge.  See ORPC 1.5(a) (lawyer may not charge illegal or
clearly excessive fee); ORPC 1.5(c)(1) (lawyer may not charge certain contingent fees in
domestic relations cases).  We disagree, however, that the use of the word "limits" in the
caption implies that no limit currently exists.
To "limit" is "to set bounds or limits to:  confine."  Webster's Third New
Int'l Dictionary 1312 (unabridged ed 2002).  A "limit," in turn, is "something that bounds,
restrains, or confines[;] * * * a prescribed maximum or minimum amount, quantity, or
number."  Id.  The use of the word "limits" accurately describes what the proposed
measure would do; the measure, if enacted, would limit the amount of the contingent fee
that a lawyer may charge a client in a civil case.  The fact that other laws impose different
limits does not mean that the proposed measure would not limit contingent fees.
Tauman relies on Sizemore/Novick v. Myers, 332 Or 352, 29 P3d 1108
(2001), for a contrary view; however, that decision does not support his position.  The
summary in Sizemore/Novick stated that "[c]urrent law * * * limits political activity on
government time" and that the proposed measure "would prohibit" public employees from
collecting money for political purposes while at work.  Id. at 357.  In the context of that
ballot title, the words "limits" and "would prohibit" implied that public employees
currently enjoyed a limited right to collect political contributions on the job -- a
proposition that was not accurate.  Id. at 359-60.  Unlike the use of the word "limits" in
the ballot title at issue in Sizemore/Novick, the caption's use of "limits" in this ballot title
is accurate.
Tauman also objects to the caption because it fails to state that the proposed
measure's restrictions would apply only to lawyers for plaintiffs.  Tauman recognizes that,
by its terms, the measure applies to all lawyers.  He argues, however, that the measure
will affect only plaintiffs' lawyers and that the caption should reflect that effect.  The
Attorney General agrees that the proposed measure "would likely apply only to attorneys
for plaintiffs."  However, he argues that, because the measure is facially neutral, any
reference to its effect on plaintiffs' lawyers would be an incomplete description of its
terms.  Alternatively, the Attorney General argues that, even if he could refer to the
proposed measure's effect on plaintiffs' lawyers, he need not do so to substantially comply
with ORS 250.035(2)(a).
The parties' dispute raises two separate issues.  The first is whether the
Attorney General may go beyond the terms of a measure to describe its effect.  If he may,
the second issue is whether that effect -- that the measure will fall only on plaintiffs'
lawyers -- is part of the subject matter of the measure that the Attorney General must set
out in the caption.
On the first issue, this court has explained that it will not speculate about
the possible effects of a proposed measure.  See Nesbitt v. Myers, 335 Or 567, 571-72, 73
P3d 925 (2003) (so stating); Kain v. Myers, 333 Or 446, 450-51, 41 P3d 416 (2002)
(ballot title need not mention "conditional and conjectural" effects of proposed measure). 
The court has also recognized, however, that, when the effects of a measure are not
reasonably subject to dispute, the Attorney General may (and sometimes must) go beyond
the terms of the measure and mention those effects in the ballot title.  See Kain v. Myers,
335 Or 228, 233-34, 64 P3d 1129 (2003) (requiring Attorney General to explain that
general prohibition on payroll deductions for political purposes would affect unions).
In this case, the Attorney General does not dispute, and we agree, that a
limitation on contingent fees will fall only on plaintiffs' lawyers, not on defense lawyers. 
The question that remains, however, is whether that effect is one that the Attorney
General must mention in the caption.  As noted, the caption must reasonably identify the
"subject matter" of a measure.  In this case, the subject matter of the measure is limiting
contingent fees.  It is certainly true that the measure will affect one group of lawyers, and
the Attorney General could have chosen to mention that fact in the caption.  But we
cannot say that the omission of that effect from the caption means that the caption does
not reasonably identify the subject matter of the measure, at least as long as we review for
substantial compliance with statutory standards.  See id. at 233 (recognizing that caption
could but need not refer to effect on unions of general limitation on public payroll
deductions).
Tauman also challenges the "yes" and "no" vote result statements.  ORS
250.035(2)(b) and (c) require two "simple and understandable statement[s] of not more
than 25 words" that describe the result if a state measure is approved and if it is rejected. 
The intended ballot title provides:
"RESULT OF 'YES' VOTE:  'Yes' vote limits contingent fee lawyer may
charge in civil case:  25% of first $25,000 recovered, 10% of recovery
above $25,000.
"RESULT OF 'NO' VOTE:  'No' vote retains current law, placing no
limitations on percentage of recovery in civil case that a lawyer can charge
under a contingent fee agreement."
Tauman argues that the "yes" vote result statement fails to comply with ORS
250.035(2)(b) because its "excessive use of numbers and percentages * * * is extremely
confusing."  We disagree.  The few numbers mentioned in the "yes" vote result statement
are relatively straightforward and understandable.  They convey, in an accurate manner,
important information regarding the effect that the proposed measure, if adopted, would
have.  That suffices to achieve substantial compliance with ORS 250035(2)(b).  See
Novick/Crew v. Myers, 337 Or 568, 574, 100 P3d 1064 (2004) ("yes" vote result
statement should reflect a proposed measure's "most significant and immediate"
consequences).
Tauman also argues that the "yes" vote result statement should refer to the
fact that the measure will affect only plaintiffs' lawyers.  We agree with Tauman that a
significant consequence of this measure will be to limit the percentage of contingent fees
that plaintiffs' lawyers can charge.  See id. at 574 ("yes" vote result statement should
reflect proposed measure's "most significant and immediate" consequences).  Unlike the
caption, the "yes" vote result statement should reflect that consequence.  See Kain, 335 Or
at 233-34 (concluding that "yes" vote result statement should include effect on unions of a
general limitation on public employee payroll deductions).
Tauman argues that the "no" vote result statement inaccurately implies that
current law places no limitation on the amount of contingent fees that a lawyer can
charge.  We agree that the "no" vote result statement conveys that implication.  We also
agree that the statement could mislead a voter.  As noted, current law prohibits lawyers
from charging illegal or clearly excessive fees.  See ORPC 1.5(a) (lawyer may not charge
illegal or clearly excessive fee).  It is true, as the Attorney General argues, that the "no"
vote result statement says that current law "plac[es] no limitations on percentage of
recovery in civil case that a lawyer can charge under a contingent fee agreement" and that
ORCP 1.5(a) does not limit contingent fees in terms of the percentage of any recovery. 
(Emphasis added.)  But we think that the distinction the Attorney General draws is too
fine.  As Tauman argues, the "no" vote result statement implies that no limitation on
contingent fees currently exists when limitations in fact do exist.  See Kain v. Myers, 333 Or 75,
79, 38 P3d 266 (2001) (stating that "misstatements, even by implication, of either existing
law or the law that the proposed measure would enact are not appropriate in a ballot
title").
Finally, Tauman challenges the summary.  ORS 250.035(2)(d) requires "[a]
concise and impartial statement of not more than 125 words summarizing the state
measure and its major effect."  Tauman argues that the summary, like the "yes" vote result
statement, must mention the measure's effect on plaintiffs' lawyers.  Tauman also argues
that the summary, like the "no" vote result statement, incorrectly implies that current law
places no limitation on the amount of a contingency fee that a lawyer can charge.  For the
reasons stated above, both challenges are well taken. (1)
Ballot title referred to Attorney General for modification.
1. We have considered the other challenges that Tauman makes to the ballot
title and reject them without further discussion.