State: Oregon
Volume: 360
Term: 2016-2017
Jurisdiction(s): Oregon
Source: https://static.case.law/or/360.pdf

1

Argued and submitted May 10; decision of Court of Appeals affirmed; judgment
of circuit court reversed, and case remanded to the circuit court for entry of
judgment awarding reasonable attorney fees to plaintiff July 14, 2016

Roman KIRYUTA,
Respondent on Review,
v.
COUNTRY PREFERRED INSURANCE COMPANY,
Petitioner on Review.
(CC 130101380; CA A156351; SC S063707)
376 P3d 284

John R. Bachofner, Jordan Ramis PC, Vancouver,
Washington, argued the cause and filed the brief for peti-
tioner on review.

Willard E. Merkel, Merkel and Associates, Portland,
argued the cause and filed the brief for respondent on review.

Lisa T. Hunt, Law Office of Lisa T. Hunt, LLC, Lake
Oswego, filed the brief for amicus curiae Oregon Trial
Lawyers Association.

2 EE
WALTERS, J.

The decision of the Court of Appeals is affirmed. The
judgment of the circuit court is reversed, and the case is
remanded to the circuit court for entry of judgment award-
ing reasonable attorney fees to plaintiff.

Po 3
WALTERS, J.

Plaintiff was injured in an automobile accident
and filed a claim for underinsured motorist (UIM) benefits
with Country Preferred Insurance (defendant). Under ORS
742.061(1), a plaintiff seeking UIM benefits is entitled to
recover reasonable attorney fees if timely settlement is not
made and the plaintiff's recovery exceeds the defendant’s
tender. However, ORS 742.061(8) provides a “safe har-
bor” from such an award when the insurer, in writing, has
accepted coverage; the only issues are “the liability of the
uninsured or underinsured motorist” and “the damages due
the insured;” and the insurer has consented to submit the
case to binding arbitration.

In this case, the insurer submitted a letter that
satisfied the attorney fee safe harbor requirements of ORS
742.061(3). The case was arbitrated, and plaintiff prevailed
and was awarded attorney fees. Defendant filed exceptions
to the fee award in the circuit court, and the court concluded
that defendant’s safe harbor letter precluded the award of
fees. Plaintiff appealed to the Court of Appeals, and that
court reversed, holding that defendant was ineligible for
the protection of the attorney fee safe harbor because, in
arbitration, in its answer to plaintiffs complaint, defendant
had raised issues in addition to the liability of the underin-
sured motorist and the damages due to plaintiff. Kiryuta v.
Country Preferred Ins. Co., 273 Or App 469, 473, 359 P3d 480

2 ORS 742.061 provides, in part:

“(1) Except as otherwise provided in subsections (2) and (8) of this sec-
tion, if settlement is not made within six months from the date proof of loss is
filed with an insurer and an action is brought in any court of this state upon
any policy of insurance of any kind or nature, and the plaintiff's recovery
exceeds the amount of any tender made by the defendant in such action, a
reasonable amount to be fixed by the court as attorney fees shall be taxed as
part of the costs of the action and any appeal thereon, ***

oer

“() Subsection (1) of this section does not apply to actions to recover
uninsured or underinsured motorist benefits if, in writing, not later than six
months from the date proof of loss is filed with the insurer:

“(a) The insurer has accepted coverage and the only issues are the lia-
bility of the uninsured or underinsured motorist and the damages due the
insured; and

“(b) The insurer has consented to submit the case to binding arbitration”

4 po

(2015). On review, we agree with the Court of Appeals that
defendant is not entitled to the protection of ORS 742.061(3).
We affirm the decision of the Court of Appeals, reverse the
decision of the trial court, and remand for entry of judgment
awarding plaintiff reasonable attorney fees.

In this case, the parties do not dispute that defen-
dant issued a timely letter accepting coverage, agreeing to
limit the issues for arbitration to “the liability of the unin-
sured or underinsured motorist” and “the damages due the
insured,” and consenting to submit the claim to arbitration.”
ORS 742.061(3). What is disputed is whether, as pleaded,
the issues for arbitration actually were so limited.

In arbitration, defendant filed an answer to plain-
tiffs complaint. In that answer, defendant admitted or
denied various allegations in plaintiffs complaint and, in
addition, alleged two affirmative defenses. In its first affir-
mative defense, labeled “Offset,” defendant alleged:

“To the extent that any UIM/UM benefits are found
owingl[,] the UIM/UM benefits are subject to offsets set
forth in the policy of insurance and Oregon statutes,
including offsets for all sums paid or payable for anyone
who is legally responsible for plaintiffs injuries, if any.
[Defendant] is further entitled to offset the amount of any
UIM/UM benefits for any amount of PIP payments made
by [defendant].”

In its second affirmative defense, labeled “Contractual
Compliance,” defendant alleged:

“To the extent any UIM/UM benefits are found owling],
the UIM/UM benefits are subject to all terms and condi-
tions of the policy of insurance, including UIM/UM limits

and ‘other clauses.’

Plaintiff contends that, because defendant pleaded those
two affirmative defenses, the requirement that the issues be

2 The parties also do not dispute that plaintiff is entitled to attorney fees
if defendant failed to satisfy the requirements of ORS 742.061(3). Defendant
argued before the trial court that, because plaintiff ultimately recovered less
than what defendant had offered in an ORCP 54 E Offer to Allow Judgment,
plaintiff was not entitled to attorney fees. However, defendant did not renew that
argument in the Court of Appeals and does not raise it here, except to note its
trial court argument that ORCP 54 E provides a distinct basis for denial of fees.
We do not address that argument here.

|__| 5

limited to motorist liability and damages, ORS 742.061(3)(a),
was not met.

In responding to that contention, defendant appears
to accept that a defendant-insurer that sends a letter invok-
ing the attorney fee safe harbor protection of ORS 742.061(8)
may lose that protection if it files an answer in arbitration
that is inconsistent with the terms of the letter and ORS
742.061(3). Defendant’s position is reasonable. When, as
framed by the pleadings, the “issues” for arbitration are not
limited to “the liability of the uninsured or underinsured
motorist” and “the damages due the insured,” the insurer
is not entitled to the protection of ORS 742.061(3). ORS
742.061(3)(a); see Cardenas v. Farmers Ins. Co., 230 Or App
403, 215 P3d 919 (2009) (defendant sent compliant safe
harbor letter but was ineligible for safe harbor because, at
arbitration, defendant also raised issue inconsistent with
requirements of ORS 742.061(3)).

What defendant argues instead is that its answer was
not inconsistent with the requirements of ORS 742.061(3).
Defendant contends that, in its answer, it did not dispute
plaintiff's entitlement to UM/UIM coverage and that its
affirmative defenses related to only the amount of the dam-
ages, if any, to which plaintiff was entitled. The “offset”
defense, defendant argues, served to put the arbitrator on
notice that plaintiff's ultimate recovery would be subject
to legislatively authorized offsets and reductions. And the
“contractual compliance” defense asserted only that plain-
tiff’s recovery could not exceed the UM/UIM limits in the
policy agreement.

Plaintiffresponds that any defense that a defendant-
insurer raises that could result in plaintiff receiving no
recovery at all vitiates the protection of ORS 742.061(3). For
that argument, plaintiff cites this court’s decision in Grisby
v. Progressive Preferred Ins. Co., 343 Or 175, 166 P3d 519,
adhid to as modified on recons, 343 Or 394, 171 P3d 352
(2007).

In Grisby, this court considered a different safe har-
bor provision than that at issue here—the safe harbor provi-
sion applicable to claims for personal injury protection (PIP)
benefits, ORS 742.061(2). 343 Or at 179. That safe harbor

‘COE

provision is applicable when “the only issue is the amount of
benefits due the insured.”® ORS 742.061(2)(a). In Grisby, the
insurer had disputed not only the amount of benefits due,
but also whether the insured could recover benefits for cer-
tain chiropractic treatment. 343 Or at 182. The court con-
cluded that the insurer was not entitled to the safe harbor
protection of the statute because a dispute about a claim for
particular benefits was not a dispute about the “amount of
benefits.” Id. at 183.

Plaintiff argues that the reasoning in Grisby prop-
erly extends to the safe harbor provision applicable in UM/
UIM cases. Plaintiff reasons that, like the word “amount”
in ORS 742.061(2)(a), the word “due” in ORS 742.061(8)(a)
evinces a legislative intent to deny safe harbor to insurers
that do not limit the issues in arbitration to the amount of
the damages that an insured should receive, but instead
contest whether they owe the insured any damages at all.
Plaintiff concedes that an insurer does not expose itself to
attorney fees by contesting the liability of an uninsured or
underinsured motorist, but contends that the insurer may
be required to pay attorney fees if it raises an affirmative
defense that, for some other reason, could result in a deter-
mination that the insurer owes no damages at all to the
insured.

Defendant disagrees that this court’s ruling in Grisby
may be extended to UM/UIM proceedings. Defendant con-
tends that the Court of Appeals erroneously has equated the
phrase “the damages due the insured” in ORS 742.061(3)(a)
with the phrase “the amount of benefits due the insured” in
ORS 742.061(2)(a). See Cardenas, 230 Or App at 412 (hold-
ing defendant insurance company ineligible for safe harbor
in UM case, because defendant asserted that release agree-
ment barred further recovery by plaintiff). PIP benefits,

* The attorney fee safe harbor provision that applies in the context of PIP
benefits, ORS 742.061(2), provides:

“Subsection (1) of this section does not apply to actions to recover per-
sonal injury protection benefits if, in writing, not later than six months from.
the date proof of loss is filed with the insurer:

“(a) The insurer has accepted coverage and the only issue is the amount
of benefits due the insured; and

“(b) The insurer has consented to submit the case to binding arbitration.”

po 7

defendant asserts, are different in nature from UM/UIM
benefits.

Defendant argues that, in calculating PIP benefits,
the only questions are the reasonableness of the charges
and whether they are related to the accident. In contrast,
defendant contends, the purpose of UM/UIM insurance is
to “put the person injured by an uninsured [or underin-
sured] motorist in the same position he would be in had
he been injured by an insured motorist.” Vega v. Farmers
Ins. Co., 323 Or 291, 306 n 13, 918 P2d 95 (1996) (internal
quotation marks omitted). Consequently, defendant contin-
ues, the insurance statutes in ORS chapter 742 require the
insurer to pay all sums that the insured is legally entitled to
recover from the uninsured or underinsured motorist. ORS
742.504(1)(a). Those sums include the amount of damages
that “[a] claimant could have recovered in a civil action from
the owner or operator at the time of the injury after deter-
mination of fault or comparative fault and resolution of any
applicable defenses,” and which “[a]re no larger than benefits
payable under the terms of the policy.” ORS 742.504(2)(j).

Therefore, defendant asserts, defendant-insurers must be
permitted to raise affirmative defenses in UM/UIM cases,
including defenses that may result in no recovery by the
insured.

The parties are correct that this court’s decision in
Grisby concerned ORS 742.061(2), the attorney fee safe har-
bor provision applicable to PIP benefits, and that we have not
decided whether an insurer remains eligible for safe harbor
protection in UM/UIM cases, under ORS 742.061(3), when
the insurer raises a defense that could result in no recov-
ery by the insured. Given the circumstances presented here,
however, that is an issue for another day. The only ques-
tion that we need to resolve to decide this case is whether
one or more of defendant’s affirmative defenses raised an
issue beyond “the liability of the uninsured or underin-
sured motorist” and “the damages due the insured.” ORS
742.061(3)(a).

We conclude that, in alleging, in its “contractual
compliance” defense, that plaintiffs UIM benefits were sub-
ject to “all terms and conditions” of the policy of insurance,

V—EOeO Ee EE EEE

8 PO

defendant necessarily opened the arbitration to issues
beyond motorist liability and damages due. Defendant’s
affirmative defense did not rest solely on the UIM/UM pol-
icy limits; it alleged that plaintiff's UIM benefits were sub-
ject to “other clauses” of the policy as well. Thus, defendant’s
answer extended the boundaries of relevancy in the arbi-
tration proceeding to any “terms and conditions” of the pol-
icy that could defeat plaintiff's claim for benefits, including
those that could potentially result in denial of coverage for
plaintiff's losses.

At oral argument before this court, defendant con-
tended that, in the part of its answer in which it admitted or
denied plaintiff's allegations, it had conceded coverage. It is
true that, in one paragraph of that part of its answer, defen-
dant admitted that plaintiff had conformed to all policy con-
ditions and requirements and had performed all precondi-
tions to the recovery of benefits.* However, the admissions in
that paragraph do not address other provisions of the insur-
ance policy that potentially could preclude coverage of plain-
tiff’s losses and therefore do not demonstrate that defendant
accepted coverage. Moreover, defendant’s “contractual com-
pliance” affirmative defense is broadly worded and permits
defendant to invoke any of the “terms and conditions” of
the insurance policy to defeat plaintiff's claim. As pleaded,®
the issues in the arbitration were not sufficiently limited to
entitle defendant to the protection of ORS 742.061(3). See
ORS 742.061(3)(a) (limiting safe harbor protection to cases
where insurer has accepted coverage and only issues are lia-
bility of uninsured or underinsured motorist and damages
due).

« Paragraph six of defendant’s answer provides: “Country admits the allega-
tions in paragraph eight of plaintiff's complaint.” In plaintiff's paragraph eight,
plaintiff had alleged:

“hat Plaintiff has in all things conformed to and observed all of the arti-
cles, stipulations and conditions which, on Plaintiff's part, were required to
be observed and performed according to the policy thereto annexed, includ-
ing the requirements of the policy and ORS 742.504 et seq. Plaintiff has duly
performed all preconditions to the recovery of benefits under the policy of
insurance.”

5 Because defendant did not do so here, we do not address whether defen-
dant would have been eligible for the protection of the safe harbor provision had
defendant, before the arbitration proceeding began, timely amended its answer
to delete the problematic allegations.

pT 9

Having determined that defendant’s allegation that
plaintiff's UIM benefits are subject to all “terms and con-
ditions” of its policy of insurance precludes defendant from
obtaining the protection of ORS 742.061(3), we need not
decide whether another aspect of defendant’s “contractual
compliance” defense (defendant’s allegation that plaintiff's
UIM benefits are subject to UIM/UM limits) or its “offset”
affirmative defense also precludes defendant from relying
on that attorney fee safe harbor provision. In the circum-
stances presented here, we conclude that the trial court
erred in failing to award plaintiff reasonable attorney fees.

The decision of the Court of Appeals is affirmed.
The judgment of the circuit court is reversed, and the case is
remanded to the circuit court for entry of judgment award-
ing reasonable attorney fees to plaintiff.

10

Submitted on the briefs June 9, decision of Court of Appeals reversed, and case
remanded to Court of Appeals for further proceedings July 14, 016

EASTERN OREGON MINING ASSOCIATION;
Guy Michael; and Charles Chase,
Petitioners on Review,

Uz

DEPARTMENT OF ENVIRONMENTAL QUALITY;
Dick Pederson, in his capacity as Director of
the Department of Environmental Quality; and
Neil Mullane, in his capacity as Administrator of
the Water Quality Division of
the Department of Environmental Quality,
. Respondents on Review.

(CC 10024263)
WALDO MINING DISTRICT,
an unincorporated Association;

Thomas A. Kitchar; and Donald R. Young,
Petitioners on Review,
v.

DEPARTMENT OF ENVIRONMENTAL QUALITY;
Dick Pederson, in his capacity as Director of
the Department of Environmental Quality; and
Neil Mullane, in his capacity as Administrator of
the Water Quality Division of
the Department of Environmental Quality,
Respondents on Review.

(CC 11019071)

(CA A156161; SC S063549)

376 P3d 288

James L. Buchal, Murphy & Buchal LLP, Portland, filed
‘the briefs for petitioners on review. With him on the briefs
was William P. Ferranti, Portland.

Michael A. Casper, Assistant Attorney General, Salem,
filed the briefs for respondents on review. With him on the
briefs were Ellen F. Rosenblum, Attorney General, Benjamin
Gutman, Solicitor General, and Carson Whitehead, Assistant
Attorney General.

Before Balmer, Chief Justice, and Kistler, Walters,
Landau, Baldwin, and Brewer, Justices, and Lagesen,
Justice pro tempore.**

LANDAU, J.

The decision of the Court of Appeals is reversed, and
the case is remanded to the Court of Appeals for further
proceedings.

** Nakamoto, J., did not participate in the consideration or decision of this
case.

I

LANDAU, J.

Petitioners are a group of miners who operate small
suction dredges in Oregon waterways. In this case, they
challenge the lawfulness of an order of the Department of
Environmental Quality (DEQ) adopting a general five-year
permit that regulates that type of mining. By the time the
challenge reached the Court of Appeals, however, the permit
had expired. The agency then moved to dismiss petitioners’
challenge on the ground that it had become moot. The Court
of Appeals agreed and dismissed. Petitioners now seek
review of the dismissal arguing that their case is not moot.
In the alternative, they argue that, if it is moot, their chal-
lenge nevertheless is justiciable under ORS 14.175 because
it is the sort of action that is capable of repetition and likely
to evade judicial review.

We conclude that the petitioners’ challenge to the
now-expired permit is moot. But we agree with petitioners
that it is justiciable under ORS 14.175. We therefore reverse
the decision of the Court of Appeals and remand for further
proceedings.

The relevant facts are not in dispute. Petitioners are
an association of miners, a mining district, and a number
of individual suction dredge miners. Suction dredge mining
entails vacuuming up streambed material through a hose,
passing the material through a sluice box that separates
out any gold, and returning the remaining material back to
the waterway. DEQ asserts that it has authority to regulate
suction dredge mining under state and federal law. Among
other things, DEQ asserts that suction dredge miners must
obtain a National Pollutant Discharge Elimination System
(NPDES) permit, pursuant to section 402 of the federal
Clean Water Act. 833 USC § 1342 (2012).

In 2005, DEQ adopted an administrative rule set-
ting out its authority to regulate suction dredge mining and
the requirements for engaging in that activity. The order
was denominated as a “general permit” and is known as
the “2005 permit.” Both environmentalists and miners—
including petitioners—challenged the lawfulness of the
2005 permit. The miners’ principal contention was that
suction dredge mining is subject to the exclusive regulatory

Po 13

authority of the Army Corps of Engineers, pursuant to sec-
tion 404 of the Clean Water Act. 33 USC § 1344 (2012).

The Court of Appeals agreed with the miners in
part, concluding that a portion of the discharge from suc-
tion dredge mining is subject to the exclusive authority of
the Corps, but also concluding that another part of that dis-
charge remains subject to DEQ’s authority under section
402 of the federal statute. Northwest Environmental Defense
Center v. EQC, 232 Or App 619, 223 P3d 1071 (2009). This
court granted review. Northwest Environmental Defense
Center v. EQC, 349 Or 56, 240 P3d 1097 (2010).

Before briefing could be completed, however, the
five-year 2005 permit expired in 2010. DEQ moved to dis-
miss the review as moot. This court allowed the motion and
dismissed. Northwest Environmental Defense Center v. EQC,
349 Or 246, 245 P3d 130 (2010). Meanwhile, DEQ issued a
new five-year general permit in 2010, known as the “2010
permit.” This time, however, DEQ issued the permit as an
order in other than a contested case, not as an adminis-
trative rule. See generally ORS 468B.050(2) (authorizing
department to issue general permits either as an adminis-
trative rule or as an order in other than a contested case).
The 2010 permit contained the same provisions requiring
compliance with section 402 of the federal Clean Water Act.

Petitioners challenged the validity of the 2010 per-
mit. Because the permit had been issued as an order in other
than a contested case, they were required to do so by first
bringing an action in circuit court. ORS 183.484 (confer-
ring “[jlurisdiction for judicial review of orders other than
contested cases” on Marion County Circuit Court and the
circuit court for the county in which the petitioner resides
or maintains a principal business office). The petition
advanced three claims: (1) DEQ lacks authority under the
federal Clean Water Act to regulate suction dredge mining;
(2) DEQ lacks authority under state law to regulate such
mining; and (3) DEQ’s 2010 permit was not supported by
substantial evidence in the record.

The Northwest Environmental Defense Center
(NEDC) also filed a petition for review in circuit court. In
2012, however, NEDC and DEQ settled their differences. At

Os

that point, petitioners amended their petition to add a claim
for relief under the Uniform Declaratory Judgment Act
seeking a declaration that DEQ lacked authority to enter
into such a settlement agreement.

In 2018, the parties filed cross-motions for sum-
mary judgment. The trial court concluded that, with respect
to petitioners’ contention that the 2010 permit violated fed-
eral law, there remained issues of fact. With respect to all
other issues, though, the court granted DEQ’s motion. After
that, the parties stipulated to entry of judgment in favor of
DEQ on all claims to facilitate appellate review. The trial
court entered judgment in January 2014.

In February 2014, petitioners appealed. They asked
for expedited consideration of their appeal, but the request
was denied. The appeal proceeded through briefing and oral
argument and was taken under advisement. While still
under advisement, the five-year 2010 permit expired. DEQ
issued a new five-year permit, effective through January 1,
2020. The department then moved to dismiss the appeal as
moot. Petitioners argued that the appeal was not moot and
that, in any event, it was capable of repetition and likely to
evade review and so still justiciable under ORS 14.175.

The Court of Appeals concluded that, in light of the
expiration of the 2010 permit, petitioners’ challenge to the
validity of that permit had become moot. Eastern Oregon
Mining Assoc. v. DEQ, 273 Or App 259, 262, 361 P3d 38
(2015). The court further concluded that petitioners’ chal-
lenge was not likely to evade review. The court explained
that, because petitioners could “easily use their work” in
challenging the prior permits, they could “challenge the
2015 permit in the circuit court in more streamlined litiga-
tion.” Id.

In the meantime, the legislature enacted a mora-
torium on suction dredge mining for five years, beginning
January 2, 2016. Or Laws 2013, ch 783. The moratorium,
however, does not apply to all waterways in the state in
which suction dredge mining may occur.’ The precise extent

! ‘The moratorium applies to “any river and tributary thereof” that contains
essential anadromous salmonid habitat or naturally reproducing populations of

Po 15

to which the moratorium would prohibit suction dredge min-
ing in Oregon is not clear. But DEQ and petitioners agree
that the moratorium does not appear to apply to all suction
dredge mining in the state.

Petitioners sought review in this court. This court
allowed review, limiting the issues on review to three ques-
tions: (1) whether the case is now moot; (2) whether, if moot,
the case is nevertheless justiciable under ORS 14.175; and
(3) whether, even if justiciable under ORS 14.175, the case
should be dismissed because of the legislative moratorium.
We address each of those questions in turn.

1. Is the case moot?

In Couey v. Atkins, 357 Or 460, 520, 355 P3d 866
(2015), we explained that Article VII (Amended) of the
Oregon Constitution does not require the court to dismiss
moot cases, at least not in “public actions or cases involv-
ing matters of public interest.” But we cautioned that merely
because the constitution does not require dismissal in such
cases does not mean that the court will not continue to dis-
miss moot cases as a prudential matter. Jd. Existing case
law on the subject of mootness offers guidance concerning
the circumstances under which the court will continue to
dismiss moot claims. Id. at 469.

In Brumnett v. PSRB, 315 Or 402, 848 P2d 1194
(1993), the court explained that cases “in which a court’s
decision no longer will have a practical effect on or concern-
ing the rights of the parties [] will be dismissed as moot.”
See also Dept. of Human Services v. G. D. W., 353 Or 25, 32,
292 P3d 548 (2012) (An appeal is moot when a court deci-
sion will no longer have a “practical effect on the rights of
the parties.”). The rule applies to judicial review proceed-
ings involving challenges to administrative agency action.

bull trout, except where populations do not exist because of “a naturally occurring
or lawfally placed physical barrier.” Or Laws 2018, ch 788, § 2(1). DEQ estimates
that up to 30 percent of all stream miles fall within the scope of the moratorium.
It acknowledges that the “percentage of those stream miles that are suitable
for suction dredge mining, however, is unclear” A group of miners challenged
the constitutionality of the moratorium in federal court, but the court concluded
that the law amounts to a reasonable environmental regulation that, precisely
because it does not appear to ban mining completely, is not preempted by federal
law. Bohmker v. State, 2016 WL 1248729, ___ F Supp 8d___ (D Or 2016).

16 Pe

Homestyle Direct, LLC v. DHS, 354 Or 253, 260-61, 311 P3d
491 (2013). In this case, petitioners’ principal challenge is to
the validity of the 2010 permit. That permit has expired. A
judicial declaration as to the validity of the 2010 permit can
have no possible practical effect on the rights of the parties
in relation to that permit.

Petitioners contend that, notwithstanding the expi-
ration of the 2010 permit, a ruling on their underlying legal
contentions will affect them. In their view, in issuing the
2010 permit, DEQ adopted an erroneous legal position that
continues to adversely affect them, given that it is the basis
for the more recently adopted 2015 permit. The problem
with the argument is that it ignores the fact that theirs is
a claim for judicial review of a specific agency order—the
2010 permit—not some abstract legal position that DEQ has
taken. Under the Administrative Procedure Act, a challenge
to an order in other than a contested case entitles a court
to “affirm, reverse, or remand the order” that is the subject
of the challenge. ORS 183.484(5)(a) (emphasis added). In
this case, there is no longer any order in effect for a court to
affirm, reverse, or remand.

The same result and reasoning apply to petitioners’
claim under the Uniform Declaratory Judgment Act. Claims
under that statute also are subject to dismissal if a judicial
decision will not have a practical effect on the rights of the
parties. Couey, 357 Or at 470; see also Barcik v. Kubiaczyk,
821 Or 174, 188, 895 P2d 765 (1995) (relief under the
Uniform Declaratory Judgment Act is available “only when
it can affect in the present some rights between the parties”)
(emphasis in original). In this case, petitioners rely on that
statute to challenge the validity of a settlement agreement
concerning the implementation of the 2010 permit. Any judi-
cial decision as to that challenge would not affect the rights
of any of the parties. The permit to which the settlement
agreement otherwise would have applied has expired.

2. Is the action nevertheless justiciable under ORS
14.175?

ORS 14.175 provides:

“In any action in which a party alleges that an act, pol-
icy or practice of a public body *** is unconstitutional or is

Po Ww

otherwise contrary to law, the party may continue to pros-
ecute the action and the court may issue a judgment on
the validity of the challenged act, policy or practice even
though the specific act, policy or practice giving rise to the
action no longer has a practical effect on the party if the
court determines that:

“() The party has standing to commence the action;

“(2) The act challenged by the party is capable of repe-
tition, or the policy or practice challenged by the party con-
tinues in effect; and

“(83) The challenged policy or practice, or similar acts,
are likely to evade judicial review in the future.”

The statute thus provides that, even when a judicial deci-
sion would no longer have a practical effect on the rights of
the parties, a court may issue the decision if the parties can
satisfy each of the three stated requirements. Couey, 357 Or
at 477.

DEQ does not contest the first two of the three stat-
utory requirements. The only issue is whether petitioners’
challenge to the five-year 2010 permit is of a sort that is
likely to evade review before the permit expires. The Court
of Appeals concluded that petitioners’ challenge is not likely
to evade review because petitioners could “easily use their
work” in challenging the prior permits and, as a result,
could “challenge the 2015 permit in the circuit court in more
streamlined litigation.” Eastern Oregon Mining Assoc., 273
Or App at 262.

In so concluding, the court erred. As we explained in
Couey, the focus of ORS 14.175(3) is whether the general type
or category of challenge at issue is likely to evade being fully
litigated—including by appellate courts—in the future, not
whether a specific case might avoid becoming moot through
expedited consideration or some other mechanism:

“The fact that there is a possibility that a particular case
could obtain expedited consideration is beside the point.
ORS 14.175 applies to types or categories of cases in
which it is ‘likely’ that such challenges will avoid judicial
review.”

357 Or at 482.

18 Pe

DEQ argues that, in any event, the type or cate-
gory of case at issue is not the sort that is likely to evade
review. DEQ begins by observing that some federal courts
have adopted a “rule of thumb” that two years is an ade-
quate time to obtain a final judicial decision on a challenge
to a federal administrative agency order. See, e.g., Fund for
Animals, Inc., v. Hogan, 428 F3d 1059, 1064 (DC Cir 2005).
The time it takes to fully litigate a challenge to a federal
administrative agency order or rule, however, may be dif-
ferent from the time it would take to challenge an Oregon
agency’s order or rule under the Oregon Administrative
Procedure Act. Moreover, the “rule of thumb” that DEQ
identifies does not appear to have been uniformly followed
by federal courts, particularly in cases involving challenges
to NPDES permits. See, e.g., Trustees for Alaska v. EPA,
749 F2d 549, 555 (9th Cir 1984) (holding that challenge to
expired five-year NPDES permits originally issued eight
years earlier was capable of repetition, yet evading review);
Montgomery Environmental Coalition v. Costle, 646 F2d 568,
582-83 (DC Cir 1980) (holding that “we have no difficulty”
concluding that challenge to expired five-year NPDES per-
mit was capable of repetition, yet evading review).

DEQ asserts that “a review of this court’s admin-
istrative law cases supports the conclusion that five years
is sufficient time to fully litigate such a case” as this one.
In support, the department cites Broadway Cab LLC
v. Employment Dept., 358 Or 431, 364 P3d 338 (2015);
OR-OSHA v. CBI Services, Inc., 356 Or 577, 341 P3d 701
(2014); and Noble v. Dept. of Fish and Wildlife, 355 Or 435,
326 P3d 589 (2014), each of which took approximately four
years to fully litigate a challenge to an administrative
agency decision.

None of those cases involved a challenge to an order
in other than a contested case, however. In cases involving
challenges to orders in other than a contested case, an addi-
tional layer of judicial review is required over and above
what is ordinarily required for challenges to administra-
tive agency rules or orders. See generally Norden v. Water
Resources Dept., 329 Or 641, 645-46, 996 P2d 958 (2000)
(describing procedure for challenging orders in other than
contested cases). That extra layer of judicial review makes

Po 19

a difference. Even a cursory review of cases involving that
process reveals that it is (perhaps unfortunately) quite com-
mon for them to take five years or substantially longer to
fully litigate?

Moreover, although the particular circumstances of
the case before the court do not determine whether it is the
sort of claim that is likely to evade review, the difficulty of
obtaining timely judicial review of orders in other than a
contested case is nowhere better illustrated than this very
case, which now has become moot not once, but twice, and
even then after the parties requested—and were denied—
expedited consideration. We conclude that petitioners’ chal-
lenge is of the sort that is likely to evade review within the
meaning of ORS 14.175(3).

The fact that the parties may have established
the three requirements for review under ORS 14.175 does
not end the matter. As we explained in Couey, the statute
permits a court to issue a judgment on the validity of the
challenged act or policy, but it does not require a court to
do so. 357 Or at 522. The statute “leaves it to the court to
determine whether it is appropriate to adjudicate an other-
wise moot case under the circumstances of each case.” Id. In
this instance, the Court of Appeals did not reach that issue,
having determined that this is not the sort of case to which
ORS 14.175 even applies. We therefore remand the case for
the appropriate exercise of the discretion that the statute
affords.

DEQ argues that, if we determine that petitioners’
challenge qualifies for judicial review under ORS 14.175,
we should exercise our discretion to limit the scope of that

® See, e.g., Noble v. Oregon Water Resources Dept., 356 Or 516, 340 P3d 47
(2014) (five years); Gearhart v. PUC, 356 Or 216, 839 P3d 904 (2014) (six years);
Powell v. Bunn, 341 Or 306, 142 P3d 1054 (2006) (six years); Norden, 329 Or at
644 (six years); Mendieta v. Division of State Lands/McKay, 328 Or 381, 987 P24
510 (1999) (five years); Coalition for Safe Power v. Oregon Public Utility Com'n,
325 Or 447, 939 P2d 1167 (1997) (eight years); Teel Irrigation Dist. v. Water
Resources Dept., 323 Or 663, 919 P2d 1172 (1996) (five years); Pacific Northwest
Bell Telephone Co. v. Eachus, 320 Or 557, 888 P2d 562 (1988) (seven years); Hardy
v. Land Board, 274 Or App 262, 360 P3d 647 (2016) (seven years); Bridgeview
Vineyards, Ine. v. State Land Board, 258 Or App 351, 309 P3d 1108 (2013) (14
years); G.A.S.P. v. Environmental Quality Commission, 198 Or App 182, 108 P3d
95 (2005) (eight years).

20

review to the issue whether the issuance of the 2010 permit
violates the federal Clean Water Act. But whether to limit
judicial review is, as DEQ itself notes, a matter of discretion
under ORS 14.175. As in Couey, that discretion is not for a
reviewing court to exercise in the first instance. 357 Or at
522.

8. Should the case be dismissed because of the enact-
ment of a moratorium?

There remains the issue whether we should even
allow for the exercise of discretion under ORS 14.175
because of the enactment of the legislative moratorium on
suction dredge mining until 2021. As we have noted, how-
ever, the extent of the moratorium is not clear. The parties
agree that, whatever that extent may be, it does not apply
to all waterways in the state where suction dredge mining
may take place. Under the circumstances, we see no reason
to conclude that the enactment of the moratorium precludes
the exercise of discretion to issue a judgment on the claims
at issue in this case.

The decision of the Court of Appeals is reversed,
and the case is remanded to the Court of Appeals for further
proceedings.

21

Submitted May 17, decision of Tax Court reversed, and case remanded to Tax
Court for further proceedings July 14, 2016

DIRECTV, INC.,
Respondent,

v.
DEPARTMENT OF REVENUE,
State of Oregon,
Appellant.

(TC 4939 (Control); SC S061294)
377 Psd 568

Marilyn J. Harbur, Assistant Attorney General, Salem,
filed the brief and motion for entry of decision and appellate

22 Po
judgment for appellant. With her on the brief was Ellen F.

Rosenblum, Attorney General.

Scott G. Seidman, Portland, filed the response to appel-
lant’s motion for respondent.

BREWER, J.

The decision of the Tax Court is reversed, and the case is
remanded to the Tax Court for further proceedings.

Po 23

BREWER, J.

This is a direct appeal from a decision of the Oregon
Tax Court setting aside a determination by the Department
of Revenue (the department) that taxpayer DIRECTV’s prop-
erty in Oregon is subject to central assessment under ORS
308.505 to 308.665. The department argues that, contrary
to the Tax Court’s opinion, DIRECTV is a “communications”
business whose property is subject to central assessment
under ORS 308.515(1). We agree and, therefore, reverse and
remand.

DIRECTV is a satellite television provider; it trans-
mits video and audio data obtained under licenses from con-
tent providers to its subscribers via satellite. ORS 308.515(1)
provides for central assessment of any property in Oregon
used in certain kinds of businesses, including “communi-
cations.” For purposes of the statute, “communications”
includes “data transmission services.” ORS 308.505(3). The
department began to centrally assess DIRECTV’s property
in 2009, on the theory that DIRECTV was in the business of
providing “data transmission services” and therefore was a
“communications” business.

DIRECTV contested that decision, arguing, among
other things, that it did not provide “data transmission ser-
vices” as the term is used in ORS 308.505(3). The Tax Court
agreed, primarily based on a decision that it had issued ear-
lier, Comcast Corp. v. Dept. of Rev., 20 OTR 319 (2011). That
case involved a cable TV and internet service provider’s
challenge to the central assessment of its property under
ORS 308.515(1). The Tax Court held that, for purposes of
the definition of “communications” in ORS 308.505(3), “data
transmission services” means the transmission, for a fee, of
data or content owned by one party to another party, and
does not apply when a company sells the data or content—as
a commodity—to the customer, in addition to providing the
conduit for it. 20 OTR at 328-29.

Applying that definition from its Comcast deci-
sion in the present case, the Tax Court held that, because
DIRECTV had purchased licenses to transmit the audio
and video data at issue to its customers, it was not merely
acting as a conduit for data owned by other entities and,

24 Po

therefore, was not a “communications” business that is sub-
ject to central assessment under ORS 308.515(1). DIRECTV,
Ine. v. Dept. of Rev., 21 OTR 90, 92-93 (2013). The Tax Court
granted summary judgment to DIRECTV on that issue, set
aside the department’s central assessment of DIRECTV’s
property for the 2009-2010 through 2012-2018 tax years,
and ordered corrected assessments and tax refunds.

At the time of the Tax Court’s decision in this case,
the department’s direct appeal of the Comcast decision was
pending before this court. Since then, we have issued a
decision in the case. In Comcast Corp. v. Dept. of Rev., 356
Or 282, 337 P3d 768 (2014), we rejected the definition of
“data transmission services” that the Tax Court announced
in that case. We held that, for purposes of ORS 308.505(3),
“data transmission services” means “services that provide
the means to send data from one computer or computer-
like device to another across a transmission network.” Id.
at 315. We further held that that meaning applies “whether
the data that the customer receives is data directed to it
by the service provider itself or by some third party.” Id.
at 332. Applying that definition to the taxpayer's claims
in that case, we held that the internet and cable transmis-
sion services that the taxpayer provided were, indeed, “data
transmission services,” and that the taxpayer therefore was
a “communications” business whose property was subject to
central assessment under ORS 308.515(1). Id. at 284.

Our decision in Comcast controls the present case.
Like the taxpayer in Comcast, DIRECTV undisputedly is
in the business of transmitting electronically coded data
between computer-like devices, including set top boxes.
See id. at 323 (“([iln effect, a set top box is a computer or
computer-like device with a microchip in it that gives it
its functionality”). It is of no consequence that DIRECTV
licenses or owns the data it transmits; neither is it import-
ant that DIRECTV transmits data via satellite rather than
via cable. Id. at 314-15. DIRECTV provides “data transmis-
sion services” within the meaning of ORS 308.505(3), and
therefore it is a “communications” business that is subject
to central assessment under ORS 308.515(1). The Tax Court
was mistaken in concluding otherwise and in granting sum-
mary judgment to DIRECTV on that ground.

Pe 25

Anticipating a decision in its favor, the department
has moved for entry of a decision and appellate judgment
that reverse the Tax Court’s decision without remanding to
the Tax Court for further proceedings. We deny that motion.

The decision of the Tax Court is reversed, and the
case is remanded to the Tax Court for further proceedings.

3 ‘The department argues that remand is not warranted because DIRECTV
has no arguments or claims that remain for consideration on remand, It argues
that, to the extent that DIRECTV raised claims and arguments before the Tax
Court other than the one expressly addressed in the Tax Court's general judg-
ment, the effect of the judgment was to dismiss those claims with prejudice. The
department relies on ORS 18.082(3), which provides: “Upon entry of a general
judgment, any request for relief in the action that is not decided by the general
judgment *** is dismissed with prejudice unless the judgment provides that the
dismissal is without prejudice”

‘The department misunderstands how the cited statute operates in circum-
stances like these. When the Tax Court decided the threshold summary judg-
ment issue regarding the applicability of ORS 308.515(1) in DIRECTV's favor
and entered a general judgment based on that decision, it implicitly determined
that DIRECTV’s remaining arguments were moot. The reversal of the Tax
Court’s general judgment reopens those arguments for further consideration.
Our decision in Comcast to remand for consideration of the taxpayer's Measure
50 argument, after reversing the general judgment for the taxpayer based on the
meaning of “data transmission services,” is a case in point. 356 Or at 334 (“That
argument presents an issue that was moot under the Tax Court’s resolution of the
case, but is not moot under ours.”)

28

Argued and submitted November 12, 2015, decision of Court of Appeals
reversed, judgment of circuit court affirmed in part and reversed in part, and
case remanded to circuit court for further proceedings July 21, 2016

STATE OF OREGON,
Respondent on Review,
v

CARYN ALINE NASCIMENTO,
Petitioner on Review.

(CC 09FE0092, CA A147290, SC S063197)
879 P3d 484

Daniel C. Bennett, Deputy Public Defender, Salem,
argued the cause and submitted the brief for the petitioner.

pT 29

With him on the brief was Ernest G. Lannet, Chief Defender,
Office of Public Defense Services.

Patrick M. Ebbett, Assistant Attorney General, Salem,
argued the cause and filed the brief for the respondent. With
him on the brief were Ellen F. Rosenblum, Attorney General,
and Anna Joyce, Solicitor General.

J. Ashlee Albies, Creighton & Rose PC, Portland, filed
the brief for amicus curiae Electronic Frontier Foundation.
With her on the brief was Jamie L. Williams, Electronic
Frontier Foundation, San Francisco, California.

Before Balmer, C.J., and Kistler, Walters, Landau,
Baldwin, Brewer, JJ.**

BALMER, C. J.

The decision of the Court of Appeals is reversed. The judg-
ment of the circuit court is affirmed in part and reversed in
part, and the case is remanded to the circuit court for fur-
ther proceedings.

** Linder, J., retired December 31, 2015, and did not participate in the deci-
sion. Nakamoto, J., did not participate in the consideration or decision of this
case.

30 Ld

BALMER, C. J.

The narrow but potentially far-reaching issue in
this case is the scope of ORS 164.377(4), which makes it
a crime to use, access, or attempt to access a computer or
computer network “without authorization.” The state argues
that, although defendant’s employer authorized her to use
the computer terminal at issue here, defendant did so for
a purpose not permitted by her employer and thus was
guilty of computer crime. Defendant contends that, because
her access to and use of the computer terminal was autho-
rized by her employer, she cannot be guilty of violating ORS
164.377(4), even if she used the computer for an impermis-
sible purpose. She concedes, however, that her use may have
violated her employer’s policies or other provisions of ORS
164.377. For the reasons explained below, we agree that
defendant’s conduct did not violate subsection (4) of the stat-
ute, and, accordingly, that the trial court erred in denying
her motion for judgment of acquittal. We therefore reverse
defendant’s computer crime conviction.

Defendant was convicted of theft and computer
crime for using a computer terminal at work, which was
linked to the Oregon State Lottery, to print and steal lot-
tery tickets. She appealed the conviction for computer crime,
arguing that the trial court erred in denying her motion for
judgment of acquittal on that count because, she argued,
she was “authorized” to use the computer terminal and
therefore had not violated ORS 164.377(4).1 In reviewing the
denial of a motion for judgment of acquittal, we describe the
facts and all reasonable inferences that may be drawn from
those facts in the light most favorable to the state. State v.
Walker, 356 Or 4, 6, 333 P3d 316 (2014).

Defendant was employed as a deli clerk at Tiger
Mart, a convenience store in Madras, beginning in 2007.
In February 2009, Masood, the vice-president of the store’s
parent company, investigated issues relating to the sale of
lottery tickets at the Tiger Mart. He found that, between
November 2008 and February 2009, there were unexplained

* Defendant did not challenge the theft conviction on appeal.

Pp 31

cash shortages well beyond the amount expected in the oper-
ation of such a store, sometimes exceeding $1,000 a day. He
soon determined that the store also showed a surprisingly
large number of sales of Keno lottery tickets, including sales
of an unusual number of high-priced tickets. The total short-
ages between November 2008 and February 2009 exceeded
$16,000. After examining cash register receipts and lottery
reports, he concluded that the shortages related to the sale
of Keno tickets and that they occurred on days when defen-
dant was working. Masood also reviewed video recordings
and observed occasions when defendant would move from
the deli area to the cash register area and print out and
pocket Keno tickets from the lottery terminal. Masood sus-
pected that defendant was printing and taking—but not
paying for—those Keno tickets. Although Masood did not
work in the store himself and did not train defendant, he
testified at one point that defendant was not authorized
to use the lottery terminal to dispense Keno tickets, and
at another point, in response to a question about whether
defendant was supposed to be operating the lottery ter-
minal, stated “Not as far as I know.” He further indicated
that, to the best of his knowledge, defendant had not been.
trained to operate the lottery terminal that dispensed Keno
tickets.

Donelly, the manager of the Tiger Mart and defen-
dant’s direct supervisor, testified that she had trained defen-
dant and other deli employees to use the cash register and
the lottery terminal, and that they routinely were required to
use them when other employees were busy or taking breaks.
She testified that she had authorized defendant to use the
lottery terminal and the cash register. She indicated that
that practice had been in place before the current owners
took over the convenience store and that she did not recall
there being any policy prohibiting deli clerks from operat-
ing the cash register or the lottery terminal. Another deli
employee confirmed Donelly’s testimony about deli workers’
regular use of the cash register and lottery terminal. Both
Masood and Donelly, as well as the other employee, testified
that the store had a policy that employees were not to pur-
chase or redeem lottery tickets on their own behalf while on

duty.

32 LC

The state presented evidence about the lottery ter-
minal itself and how defendant was trained to use it. The
lottery terminal is a touchscreen machine that is networked
to the Oregon State Lottery. The terminal has only three
functions: It can print lottery tickets, it can scan lottery
tickets to validate whether they are winning tickets, and
it can produce reports. It is not networked with the store’s
cash register. A manager needed to sign in once a day to
activate the terminal, but the terminal did not otherwise
require any sort of password to operate. Tiger Mart employ-
ees received training that, when they sold lottery tickets,
they were to collect payment from customers and put the
payment in the cash register before using the touchscreen
on the lottery terminal to dispense the ticket or tickets.

The state also presented video evidence that, when
no one else was around, defendant used the lottery termi-
nal at the Tiger Mart to print Keno tickets, which she then
pocketed. There also was evidence that defendant failed
to pay for those Keno tickets. Other evidence showed that
defendant had redeemed at least one winning ticket through
the mail and had redeemed other tickets at a local store.
Further evidence was presented correlating some of those
tickets to video evidence of defendant using the lottery
terminal at the Tiger Mart. Thus, evidence supported the
state’s theory that defendant used the lottery terminal to
print lottery tickets that she took without paying for and
that she later redeemed those tickets.

Defendant was charged with one count of aggra-
vated first-degree theft, as well as computer crime. The com-
puter crime statute, ORS 164.377, provides, in part:

“(2) Any person commits computer crime who know-
ingly accesses, attempts to access or uses, or attempts to
use, any computer, computer system, computer network or
any part thereof for the purpose of:

“(a) Devising or executing any scheme or artifice to
defraud;

“(b) Obtaining money, property or services by means
of false or fraudulent pretenses, representations or prom-
ises; or

“(c) Committing theft, including, but not limited to,
theft of proprietary information or theft of an intimate
image.

fe ae ae

“(4) Any person who knowingly and without authori-
zation uses, accesses or attempts to access any computer,
computer system, computer network, or any computer soft-
ware, program, documentation or data contained in such
computer, computer system or computer network, commits
computer crime.”

It is of particular significance in this case how
the computer crime count was charged. The caption of the
indictment cited ORS 164.377(2), but the body of the indict-
ment charged conduct that instead tracked ORS 164.377(4),
including the “without authorization” wording that does not
appear in subsection (2):

“The defendant, on or between November 11, 2008 and
February 6, 2009, in Jefferson County, Oregon, did know-
ingly and without authorization use and access a computer
system operated by Tiger Mart Convenience Store, an
entity, under contract to and at the direction of the Oregon
State Lottery Commission; contrary to statute and against
the peace and dignity of the State of Oregon.”

(Emphasis added.)

After the state’s evidence was presented, defen-
dant moved for a judgment of acquittal, arguing that the
state had not presented sufficient evidence to create a jury
question as to whether defendant used the lottery terminal
“without authorization,” noting the evidence that deli clerks
were, in fact, authorized to use the lottery terminal. The
prosecutor did not dispute that point, but argued instead
that

“the access alone is not what makes this criminal. It’s that
the access is for the purpose of under three different cate-
gories, devising or executing a scheme or artifice to defraud
obtaining money, property, or services through fraudulent
pretenses or committing theft—

eae oe ee ae

34 Le

“That’s under—from the statute itself, ORS 164.377, and
under State v. Schwartz, 173 Or App 301 [21 P3d 1128
(2001) (discussing subsections (2) and (3) of the statute)].

fe ae ea

“So therefore, Your Honor, the fact that she did have
some apparent authority to operate the machine to sell
tickets and to conduct business of Tiger Mart [does not
affect] the fact that she then also used the terminal to
print out tickets for which she did not pay. That is the
unauthorized—the knowing unauthorized use of the ter-
minal. Such that she committed theft while she was doing
that and therefore the State has met its elements on that
crime.”

The trial court denied defendant’s motion for judg-
ment of acquittal without explanation. In her closing argu-
ment, the prosecutor described the case as involving “a
simple issue of did someone steal lottery tickets from the
Tiger Mart—Tiger Mart here in town and the Oregon State
Lottery.” When discussing the computer crime count, the
prosecutor stated:

“(Defendant] went onto the computer, the computer was
part of the Oregon State Lottery System, she printed out
those tickets, and she did so with the purpose of steal-
ing those tickets. So the theft of the tickets counts as the
purpose that is that she is authorized [sic], that she was
accessing a computer. We’re not talking about the time
when she was acting as an employee and actually selling
tickets to customers who were paying for them. That’s not
the kind of behavior we’re talking about. We're talking
about her printing those tickets out for herself so that she
could [indiscernible].”

In instructing the jury on computer crime, the trial
court followed the wording in the indictment. That is, it
instructed that the jury needed to find that defendant used
or accessed a computer “without authorization.”

As noted, the jury found defendant guilty of com-
puter crime, as well as aggravated first-degree theft, and
defendant appealed the computer crime conviction, arguing
that the trial court erred in denying her motion for judgment
of acquittal. In particular, she argued that ORS 164.377(4)

Po 35

does not criminalize theft by means of a computer—rather,
subsection (2) of the statute criminalizes that conduct.
Defendant contended that subsection (4) relates only to
using or accessing a computer without authorization, and
the evidence in this case, while it could have supported a
conviction under subsection (2), did not support a conviction
under subsection (4). The Court of Appeals rejected that
argument, concluding that “[t]here was evidence from which
the jury could conclude that [defendant] was authorized to
access the physical device itself—the lottery terminal—only
to serve paying customers.” State v. Nascimento, 268 Or App
718, 722, 343 P3d 654 (2015). It therefore concluded that the
record was sufficient for the jury to have found that defen-
dant used the computer “without authorization.” Id.

In this court, defendant maintains that she did not
use the lottery terminal “without authorization.” She again
acknowledges that the evidence could have been sufficient
to establish a violation of subsection (2) of ORS 164.377—
which prohibits, among other things, using or accessing a
computer for the purpose of “obtaining money *** by means
of false or fraudulent pretenses” and “committing theft”—
but reiterates that she was not charged under that subsec-
tion. See, e.g., State v. Briggen, 112 Or 681, 683, 231 P 125
(1924) (court looks to the body of the indictment, not the
caption, to determine what crime is charged). Defendant
does not dispute that there was evidence that she accessed
the lottery terminal to print tickets without having received
payment—or having made payment herself—for the tickets.
However, she argues that that act does not constitute access-
ing or using a computer “without authorization.” Defendant
also suggests that the Court of Appeals’ interpretation of
subsection (4) is so broad as to raise constitutional vague-
ness concerns.

The state makes two arguments in response. First,
it asserts that defendant used the lottery terminal for a pur-
pose not permitted by her employer. Specifically, the state
introduced evidence that Tiger Mart’s policy was that deli
clerks like defendant were authorized to use the terminal
only when a customer wanted to buy or validate a ticket and
the cashier was unavailable, and that defendant’s use of the
terminal to print tickets for herself therefore was “without

36 Le

authorization,” as that term is used in ORS 164.377(4).
The state contends that the statute is not unconstitution-
ally vague because it unambiguously prohibits a person
from doing anything with a computer without permission.
Second, apparently as an alternative basis for affirmance,
the state argues that, even under defendant’s definition of
“authorization” as related to physical access or use of the
computer, rather than access or use only in compliance with
an employer’s policies, evidence in the record supported the
guilty verdict. Specifically, the state points to Masood’s tes-
timony that defendant was not authorized to use the termi-
nal at all. As noted, at trial the prosecutor conceded, for pur-
poses of defendant’s motion for judgment of acquittal, that
defendant did have authorization from her supervisor to use
the lottery terminal. The state, however, now asserts that
it may disavow that concession and argues that, although
Masood’s testimony on authorization was contradicted by all
of the other evidence on that point, it nonetheless was suf
ficient to defeat defendant’s motion. See generally Outdoor
Media Dimensions Inc. v. State of Oregon, 331 Or 634,
659-60, 20 P3d 180 (2001) (reviewing court has discretion
to affirm ruling of lower court on an alternative basis if
facts support alternative basis, alternative view of evidence
is consistent with trial court’s ruling, and record would not
have developed in materially different way had prevailing
party raised alternative basis below).

We first address—and reject—the state’s proffered
alternative basis for affirmance. As the narrative above
demonstrates, the prosecutor apparently was confused
about how the computer crime offense had been charged
in the indictment. That is, her argument in opposition to
defendant’s motion for judgment of acquittal focused on
whether the state had provided adequate evidence to sat-
isfy the requirements of ORS 164.377(2)(a), (b), or (c),
rather than ORS 164.377(4). To the extent that the prose-
cutor addressed the concept of “authorization,” she agreed
that defendant had been given “authority [to] operate the
machine to sell tickets and conduct the business of Tiger
Mart,” but argued that what made defendant’s use of the lot-
tery terminal “unauthorized” was that she used the lottery
terminal for the purpose of committing theft, a use that is

Po 37

expressly prohibited by ORS 164.377(2)(c). In making those
arguments, the prosecutor conceded that defendant was, in
fact, authorized by her supervisor as part of her employment
to use the lottery terminal to print lottery tickets.

We agree with the state’s general proposition that,
at least in the abstract, a prosecutor in that circumstance
could have argued that Masood’s equivocal evidence about
whether or not defendant was authorized to use the lottery
terminal at all was sufficient to defeat a motion for judgment
of acquittal on that point, given that the court was required
to view all of the evidence in the light most favorable to the
state, and not to weigh the evidence. But the prosecutor did
not make that argument, and in fact conceded the point.”
As noted, one of the criteria for our discretionary review of
alternative bases for affirmance is whether, had an argu-
ment been made in the trial court, the record could have
developed in a materially different way. Outdoor Media, 331
Or at 659-60. In this case, we have no doubt that, had the
prosecutor made the argument that the state now makes,
the record might well have developed differently.

The evidence on which the state now relies for affir-
mance on that ground was equivocal and weak, at best. Had
the state relied on it in opposition to a motion for judgment
of acquittal rather than disavowing it as the basis for its
legal argument, defendant easily could have countered that
evidence in her own case-in-chief, as there appears to have
been no shortage of witnesses who would have confirmed
that defendant was, in fact, trained by her supervisor to use
the lottery terminal to print lottery tickets and was expected
to do so as part of her job. See, e.g., State v. Dickerson, 356 Or
822, 826-27, 345 P3d 477 (2015) (rejecting state’s alterna-
tive basis for affirmance of denial of motion for judgment of
acquittal on different factual theory than pursued by state

2 We do not fault the prosecutor for failing to pursue that theory of the case.
As noted, Masood’s own testimony indicated that he did not have personal knowl-
edge of whether defendant was authorized to use the lottery terminal, and the
state presented extensive evidence that defendant had, in fact, been authorized
by her supervisor to use the lottery terminal and had been trained to do so. Thus,
while that theory of the case might have been viable as a technical matter, as
a practical matter it is not surprising that the prosecutor would not ultimately
want to rely on it in trying to secure a conviction.

38 Le

at trial, in part because record might have developed differ-
ently had state raised theory below). As we observed in State
v. Burgess, 352 Or 499, 504, 287 P3d 1093 (2012), based on
the circumstances of that case, “it would be fundamentally
unfair to defendant to sustain defendant’s conviction on a
separate factual and legal theory that has been proffered by
the state for the first time on appeal.” That is even more so
in a circumstance such as this, where the state conceded in
the trial court the factual and legal theory that it advances
for the first time on appeal.

We thus return to the issue that was litigated in
the lower courts: Whether defendant’s use of the lottery
terminal to print Keno tickets for herself—tickets that she
did not pay for—constituted “computer crime” under ORS
164.377(4), because she printed those tickets “without
authorization.” Our goal is to determine the intent of the
legislature in enacting that statutory provision, which we
do by examining the text, context, and legislative history of
the statute. State v. Gaines, 346 Or 160, 171, 206 P3d 1042
(2009). We again set out subsection (4):

“Any person who knowingly and without authorization
‘uses, accesses or attempts to access any computer, computer
system, computer network, or any computer software, pro-
gram, documentation or data contained in such computer,
computer system or computer network, commits computer
crime.”

Although ORS 164.377(1) provides definitions of
numerous terms used in the computer crime statute, it does
not define “authorization” or “without authorization.” It does
define “computer” and “computer system,” and the latter
term specifically includes lottery terminals. ORS 164.377
(Db), (f). Subsection (1) also defines the verb “access,” as
“to instruct, communicate with, store data in, retrieve data
from or otherwise make use of any resource on a computer,

8 A violation of ORS 164.377(4) generally is a misdemeanor. In this case, it
was treated as a class C felony, because ORS 164.377(5)(b) provides:

“Any violation of this section relating to a computer, computer network,
computer program, computer software, computer system or data owned
or operated by the Oregon State Lottery or rented, owned or operated by
another person or entity under contract to or at the direction of the Oregon
State Lottery Commission shall be a Class C felony.”

Po 39

computer system or printer.” ORS 164.377(1)(a). It is undis-
puted that, when defendant used the lottery terminal to dis-
pense Keno tickets, she “used” and “accessed” a “computer
system,” as those terms are used in ORS 164.377.

As to the meaning of “without authorization,” the
state proposes an extremely broad definition, arguing that
any time a person uses or accesses a computer for a purpose
not permitted by the computer’s owner, the person does so
“without authorization” and commits computer crime. For
that reason, the state contends, even though defendant was
authorized to physically use the terminal to print Keno tick-
ets, because she violated her employer’s policy by using it to
print Keno tickets for her own use (and also by not paying
for them), her use was “without authorization,” in violation
of ORS 164.377(4). In short, the state’s argument is that an
employee’s otherwise authorized use of an employer’s com-
puter is “without authorization’—and therefore a computer
crime under ORS 164.377(4)—-whenever the employee’s access
or use violates the employer’s personnel or computer use
policies.

Defendant, on the other hand, notes that the 1985
Legislative Assembly that enacted subsection (4) was con-
cerned with remote “hacking” of computers by persons with
no right to access those computers. Defendant suggests that
the statute therefore was not meant to reach conduct such
as hers, which she characterizes as “authorized use for an
impermissible purpose.” Rather, she argues, when a person
is permitted to use an employer’s computer system, and
when the person uses the computer as permitted—here, to
print lottery tickets—the person’s use is “authorized,” even
if the use is for an impermissible purpose. She asserts that
ORS 164.377(4) addresses authorization to use or access a
computer, not the particular purpose for or circumstances of
that use.

Amicus curiae Electronic Frontier Foundation
contends that the Court of Appeals and the state’s reading
of the statute—which arguably criminalizes any computer
use in violation of an employer’s personnel or computer use
policies—is unworkably broad because it gives private

40 Le

entities the power to decide what conduct in the workplace
is criminal and what is not. Amicus argues that “with-
out authorization” should be construed narrowly, as fed-
eral courts have construed somewhat similar provisions
in the Computer Fraud and Abuse Act, 18 USC § 1030, as
accessing a computer by circumventing security measures,
rather than simply violating an employer’s use restriction
policies.

As noted, the parties agree that defendant “accessed”
and “used” a “computer network.” The question is whether
she did so “without authorization.” The meanings of “autho-
rization” and “authorize” are not obscure. “Authorization” is
simply “the state of being authorized.” Webster’s Third New
Int'l Dictionary 146 (unabridged ed 2002). “Authorize,” in
turn, means “to endorse, empower, justify, or permit by or as
if by some recognized or proper authority.” Id. We agree with
defendant that her employer “empowered” and “permitted”
her to use the lottery terminal. The actual use that she
made of the lottery terminal—to print lottery tickets—was
a use “authorized” by her employer.

The state does not disagree that defendant was
authorized to use the lottery terminal to print lottery tick-
ets, but contends that her use of the terminal became “unau-
thorized” when she used it to print tickets for herself with-
out paying for them. That use was “unauthorized” within
the meaning of ORS 164.377(4), the state contends, because
it was for a purpose that was prohibited by her employer’s
policies. For her part, defendant concedes that she may have
violated her employer’s computer use or personnel policies by
printing lottery tickets for herself and failing to pay for them.
She also concedes that she may have violated provisions of
the computer crime statute other than ORS 164.377(4), in
addition to the theft statute under which she also was con-
victed. However, she maintains that ORS 164.377(4) does
not criminalize her conduct here. She points out that she was
trained and authorized to use the computer to print lottery
tickets and, moreover, that she did not bypass any security
measures or access any protected data. For those reasons,
she asserts, her use of the computer to print lottery tickets
was authorized, and it did not become “unauthorized,” even
though her purpose in printing tickets for her own use (and.

po 41

not paying for them) violated her employer’s personnel or
computer use policies.

It is difficult to square the state’s position with the
text of ORS 164.377(4). The text establishes a binary divi-
sion between those who are “authorized” to access or use a
computer and those who are not. The text does not distin-
guish between use that is authorized for certain purposes
(such as those permitted by employer policies) and use that
otherwise would be authorized but that is inconsistent with
those policies. Indeed, subsection (4) of the statute does not
focus on the purpose or manner of use at all, but only on
whether the access or use is “authorized.”

As noted, “access” is defined in the computer crime
statute as “retriev[ing] data” or “makling] use of any resource
on acomputer.” ORS 164.377(1)(a). Ifa person is “empowered”
or “permitted”—the dictionary synonyms of “authorized”’—
by the appropriate authority to “retrieve data” or “make
use” of the computer, then that use is “authorized.” Applying
those words in their ordinary senses, it is a stretch to sug-
gest that an employee who uses her work computer to send
a private email during the work day—or check Facebook
or buy a movie ticket—contrary to her employer's policy
against personal use, has “accessed” or “used” the computer
“without authorization,” although she may have violated her
employer’s policy. Nothing in the text of the statute suggests
that the legislature intended such a result. As defendant
argues, the state’s interpretation would criminalize not
only “unauthorized” use of a computer, but also “authorized
use for an impermissible purpose.” Such an interpretation
would require adding words to the text of the statute that
the legislature did not use. See ORS 174.010 (court may not
add words to statute).

Viewed in that light, the text supports defendant’s
assertion that her use of the lottery terminal to print Keno
tickets—as she was trained and permitted by her employer
to do—was “authorized” use. The fact that she printed the
tickets for her own use and did not pay for them may have
violated company policies and other parts of the computer
crime statute (in addition to the theft statute), but her use
was not “without authorization” as that term is used in ORS

42 Le

164.377(4).4 That conclusion is supported by the evidence
that, once a store manager had signed into the terminal
and activated it at the beginning of the work day, employ-
ees such as defendant could use the terminal to print Keno
tickets without additional authentication or permission.
When defendant physically accessed and used the terminal
to print Keno tickets, that access and use was authorized by
her employer. Moreover, there was, for example, no evidence
that defendant circumvented any computer security mea-
sures, misused another employee’s password, or accessed.
any protected data. The sole basis for the state’s claim that
defendant’s printing of Keno tickets was “unauthorized” was
the employer’s policy that employees were not supposed to
print tickets for their own use and were supposed to obtain
payment for tickets before printing them.

The legislative history of ORS 167.377(4) supports
defendant’s argument that the statute was intended to crim-
inalize access or use of a computer by someone who had no
authority to do so, the kind of intrusion or access to a com-
puter by unauthorized third parties commonly referred to
as “hacking.” HB 2795, as introduced during the 1985 legis-
lative session, was concerned with the theft of cable televi-
sion services. See Bill File, HB 2795 (1985). Representatives
of General Telephone Company urged the adoption of an.
amendment to that bill that would deal with a related prob-
lem, “computer crime, or computer hackers if you will.” Tape
Recording, House Judiciary Committee, Subcommittee 1,
May 6, 1985, Tape 576 (testimony of Dave Overstreet, General
Telephone Company). The head of General Telephone’s secu-
rity department noted that many businesses now used com-
puters, stating that, “what we’re trying to get into the stat-
ute is a part of the law that will prevent people from calling
into someone’s computer.” Id. He gave, as examples, people

+ We do not rely on federal court interpretations of the Computer Fraud and
Abuse Act, 18 USC § 1080, because the text of the federal and state statutes have
some differences and because ORS 164.377 was passed a decade before the fed-
eral law. However, we note that the federal courts have interpreted that statute,
which prohibits computer access “without authorization’—and also, arguably
broader than the Oregon statute, use that “exceeds authorized access”—not to
prohibit use that is otherwise authorized but that violates employer use restric-
tions. See, eg, United States v, Nosal, 676 F3d 854 (9th Cir 2012) (en bane) (so

olding).

Po 43

who had obtained access to business computers that lacked
security systems and had altered business documents, as
well as individuals who had made their way remotely into
telephone company computers and obtained and then pub-
licly posted confidential telephone billing codes. Id.

In response to a legislator’s concern that the amend-
ment might restrict computer hobbyists who used telephone
modems to connect with other computers, Marion County
District Attorney Dale Penn emphasized that the law would
apply to only third parties who had no authority to access
the remote computer:

“There we get into the definition of ‘access. I think ***
if you call up to a computer system and you're not autho-
rized you're probably not even going to be able to get the
menu up. If you're calling to a bulletin board you’re going
to see the menu. And that’s not what we're addressing here.
We're addressing a computer system in which you're not
authorized to dial. You won’t know the codes.”

Id. (Emphasis added.) Testimony before the Senate Judiciary

Committee was to the same effect. General Telephone’s rep-
resentative, Overstreet, again testified in support of the com-
puter crime provisions, which he described as addressing
“computer hackers—persons who use computers to defraud.”
Tape Recording, Senate Judiciary Committee, June 7, 1985,
Tape 180, Side A; Minutes, Senate Judiciary Committee,
HB 2795, June 7, 1985, 18.

The legislative history thus shows that the com-
puter crime provisions were intended to address the unau-
thorized access of a computer by “hackers” or by others who
had no authority whatsoever to use the computer—who, in
the context of the technology of the time, were “not autho-
rized to dial.” There is no indication at all that the bill would
reach the conduct of a person, such as defendant here, who
was authorized by a computer owner to use the computer,
but did so in violation of the owner’s policy or for a purpose
not permitted by the owner.

The state acknowledges that legislative history
and the concerns that animated the legislature’s enactment
of ORS 164.377. It argues, however, that the text that the

ee _—______|

legislature adopted “is not so limited,” and that it prohib-
its all “access” that is “without authorization.” As both par-
ties recognize, “[t]he legislature may and often does choose
broader language that applies to a wider range of circum-
stances than the precise problem that triggered legislative
attention.” South Beach Marina, Inc. v. Dept. of Rev., 301 Or
524, 531, 724 P2d 788 (1986). But that important teaching
does not mean that we necessarily interpret statutes in the
broadest possible sense that the text might permit. Indeed,
as we recently noted in Walker, 356 Or at 17, “lif, in fact, the
legislative history reveals that the legislature had a nar-
rower understanding of the term in mind, and if that nar-
rower meaning is consistent with the text, even if not com-
pelled by it, the legislative history would be a basis on which
we appropriately may construe the text more narrowly.”

Here, the legislative history supports defendant’s
view that the legislature intended ORS 164.377(4) to pro-
hibit computer access or use by a person who accessed or
used a computer without permission or authorization from
the owner. Nothing in the legislative history suggests that
the statute was intended to reach a person who was trained
and authorized to use a particular computer, but did so for
an unpermitted purpose. As discussed above, the text and
context of the statute provide a sufficient basis for deciding
this case: ORS 164.377(4) does not distinguish between a
person’s “authorization” to access or use a computer for some
purposes and not for others; the access or use is authorized,
or it is not. The legislative history simply reinforces that
interpretation.

In summary, we conclude that the phrase “without
authorization” applies to the “use” or “access” of the com-
puter. A person’s “authorization” to access or use a com-
puter may be restricted by a password or other authentica-
tion or security procedures—but defendant’s employer here
did not so restrict her use. Nor was defendant’s use of the
computer—to print lottery tickets—inconsistent with the
scope of her authorized use. We disagree with the state’s posi-
tion that an employee’s authorized use of an employer’s com-
puter becomes “without authorization” for purposes of ORS
164.377(4) simply because the employee used the computer
for a purpose not permitted by the employer’s personnel or

pT 45

computer use policies.’ Such impermissible use, of course,
may lead to personnel actions or other private discipline or
to possible proceedings under other statutes, but it does not
violate ORS 164.377(4).

Applying that interpretation of ORS 164.377(4) to
the facts here, we conclude that no reasonable juror could
find that defendant accessed or used the lottery terminal
“without authorization” when she printed Keno tickets for
herself without paying for them. She was authorized to use
the computer to print Keno tickets, and the fact that her
conduct violated her employer’s policy did not make her com-
puter use “unauthorized.” The trial court erred in denying
defendant’s motion for judgment of acquittal on the com-
puter crime count.

The decision of the Court of Appeals is reversed.
The judgment of the circuit court is affirmed in part and
reversed in part, and the case is remanded to the circuit
court for further proceedings.

5 In interpreting the term “authorization” for purposes of this case, we do
not mean to suggest that an employer or other computer owner may not devise
means to restrict the scope of access that it authorizes for particular users. This
case involves a computer terminal that printed Keno tickets and an employee
who was trained and permitted to use the computer to perform that function.
As discussed above, after a store manager “signed in” to the computer at the
beginning of the day, trained employees, including defendant, were authorized to
use the computer to print Keno tickets without further authentication, password
use, or other identity verification, 360 Or at 32. A different analysis of “authoriza-
tion” would be called for if an employer, through use of security codes, password-
protected data, or encryption, blocks an employee from access to certain com-
puter functions or data. In a similar vein, Orin Kerr suggests that the policy
issues involving “unauthorized” use should be resolved by using authentication
requirements—as many websites and computer networks already do—and con-
sidering access to be “unauthorized” when “a user bypasses an authentication
requirement, either by using stolen credentials or bypassing security flaws to cir-
cumvent authentication.” Orin Kerr, Norms of Computer Trespass, 116 Columbia
L Rev 1143, 1171 (2016).

46
Argued and submitted March 8, judgment of Tax Court affirmed July 21, 2016

Stuart ETTER,
Appellant,
v.

DEPARTMENT OF REVENUE,
State of Oregon,
Respondent.

(TC 5027; SC 063061)
377 P3d 561

Gregory P. Bessert, The Bessert Law Firm, Battle
Ground, Washington, argued the cause and filed the briefs
for appellant.

Keith L. Kutler, Assistant Attorney General, Salem,
argued the cause and filed the brief for respondent. With
him on the brief were Ellen F. Rosenblum, Attorney General,
and Paul L. Smith, Deputy Solicitor General.

BALDWIN, J.
The judgment of the Tax Court is affirmed.

48 po

BALDWIN, J.

This direct tax appeal involves whether a Washington
state resident who works in Oregon is exempt from individ-
ual Oregon income tax. Taxpayer is an aircraft dispatcher
for Horizon Air Industries, Inc. (Horizon Air), who works
almost entirely in Portland. To work as a dispatcher, how-
ever, he must spend five hours each year riding along in
the cockpit for each aircraft group that he dispatches.
Taxpayer argues that, pursuant to a federal statute—49
USC § 40116(f)—that flight time exempted him from pay-
ing Oregon income tax in the tax year 2000. The Tax Court
concluded that taxpayer did not meet the requirements of
the federal statute and denied his exemption. On appeal,
taxpayer renews his arguments. We affirm.

The Tax Court ruled on the parties’ cross-motions
for summary judgment. The motions were based on stipu-
lated facts, and taxpayer submitted a declaration in support
of his motion. We present the facts and the inferences to be
drawn from them in the light most favorable to taxpayer, the
nonmoving party.’ See TCR 47 C?

Taxpayer is a Washington resident employed by
Horizon Air as an aircraft dispatcher at Horizon Air’s Portland
operations center. His “primary and regular duties were to
plan and monitor flights from Horizon Air’s Portland opera-
tions center.” Taxpayer's listed job duties did not involve any

1 The facts in the declaration may not be entirely consistent with the facts
in the stipulation. For purposes of this opinion, we will not attempt to determine
whether they are truly consistent, but will simply construe the facts in favor of
taxpayer, regardless of their source.

2 TCR 47 C provides, in part:
“The court shall grant the motion [for summary judgment] if the pleadings,
depositions, affidavits, declarations, and admissions on file show that there is
no genuine issue as to any material fact and that the moving party is entitled
to prevail as a matter of law. No genuine issue as to a material fact exists if,
based upon the record before the court viewed in a manner most favorable to
the adverse party, no objectively reasonable juror could return a verdict for
the adverse party on the matter that is the subject of the motion for summary
judgment.”

Unless otherwise noted, all references to statutes and administrative rules
refer to the versions in effect for the year 2000, when taxpayer earned the income
at issue. With regard to TCR 47, we refer to the version in effect for 2015 when the
Tax Court granted summary judgment.

Po 49

flight time. He asserts, however, that Horizon Air would
assign him other duties when they were necessary to comply
with applicable law.

The Federal Aviation Administration (FAA) has
promulgated an administrative rule that prohibits an air
carrier from using a person as an aircraft dispatcher unless
that person has met certain requirements. 14 CFR § 121.463.
That rule requires (among other things) that dispatchers
must familiarize themselves with flight deck operations on
the planes that they dispatch by spending “at least 5 hours
observing operations *** in one of the types of airplanes in
each group to be dispatched.”

Taxpayer could choose the particular flight that
would serve as his observational flight, and he did so in
the tax year 2000. The parties stipulated that taxpayer did
two observational flights that year, one for each of the two
aircraft groups that he monitors. At least one of the flights
that taxpayer chose flew over Oregon, Washington, Idaho,
and Montana. Horizon Air paid taxpayer for his time in the

alr.

Taxpayer does not rely on any other out-of-state
duties to support his claim to be exempt from taxation. Given
the terms of the relevant federal regulation, taxpayer’s total
flight time would have been approximately 10 hours—five
hours for each of the two aircraft groups. The parties stip-
ulated that taxpayer’s Oregon earnings were “greater than
50 [percent] of [his] total pay” during 2000. Ten hours would
be 0.5 percent of the approximately 2,000 hours per year
worked by a full-time employee.

Oregon taxes not only the income of residents, see
ORS 316.037(1), but also the income of nonresidents that
“is derived from sources within the state.” ORS 316.037(3).?
A nonresident’s income is derived from sources within this

* ORS 316.037(1) imposes income taxes on residents. Subsection (3) applies
those taxes to Oregon income paid to nonresidents:

“(3) A tax is imposed for each taxable year on the taxable income of
every full-year nonresident that is derived from sources within this state.
The amount of the tax shall be determined in accordance with the table set
forth in subsection (1) of this section.”

50 |

state if it is attributable to the nonresident carrying on an
occupation here. See ORS 316.127(2)(b).*

Federal law limits the extent to which states may
tax the income of certain employees of air carriers, however.
49 USC § 40116(f)(2) broadly provides that employees with
“regularly assigned duties on aircraft in at least 2 States”
may be taxed only by the state where they reside or a state
in which they earn more than 50 percent of their pay from
the air carrier.®

+ ORS 816,127 provides, in part:

“(2) Items of income, gain, loss and deduction derived from or connected
with sources within this state are those items attributable to:

ese

“(b) A business, trade, profession or occupation carried on in this state[.]”
5 Specifically, that subsection provides:

“(f) Pay of Air Carrier Employees.—

“() In this subsection—

“(A) ‘pay’ means money received by an employee for services.

“(B) ‘State’ means a State of the United States, the District of Columbia,
and a territory or possession of the United States.

“(C) an employee is deemed to have earned 50 percent of the employee's
pay in a State or political subdivision of a State in which the scheduled flight
time of the employee in the State or subdivision is more than 50 percent of
the total scheduled flight time of the employee when employed during the
calendar year.

“(2) The pay of an employee of an air carrier having regularly assigned
duties on aircraft in at least 2 States is subject to the income tax laws of only
the following:

“(A) the State or political subdivision of the State that is the residence of
the employee.

“(B) the State or political subdivision of the State in which the employee
earns more than 50 percent of the pay received by the employee from the
carrier.

(8) Compensation paid by an air carrier to an employee described in
subsection (a) in connection with such employee’s authorized leave or other
authorized absence from regular duties on the carrier’s aircraft in order to
perform services on behalf of the employee’s airline union shall be subject to
the income tax laws of only the following:

“(A) The State or political subdivision of the State that is the residence of
the employee.

“(B) The State or political subdivision of the State in which the employ-
ee’s scheduled flight time would have been more than 50 percent of the
employee's total scheduled flight time for the calendar year had the employee
been engaged full time in the performance of regularly assigned duties on the
carrier's aircraft.”

po 5

As mentioned, FAA regulations require an airline
dispatcher to spend at least five hours every year observing
flight deck operations on the planes that they dispatch. The
relevant regulation, 14 CFR § 121.463(c), provides, in part:

“No certificate holder conducting domestic or flag opera-
tions may use any person, nor may any person serve, as an.
aircraft dispatcher unless within the preceding 12 calendar
months the aircraft dispatcher has satisfactorily completed
operating familiarization consisting of at least 5 hours
observing operations under this part, in one of the types of
airplanes in each group to be dispatched. This observation
shall be made from the flight deck or, for airplanes without
an observer seat on the flight deck, from a forward passen-
ger seat with headset or speaker. *** The requirement of
this paragraph may be satisfied by observation of 5 hours
of simulator training for each airplane group in one of the
simulators approved under § 121.407 for the group.”

In 2004, taxpayer sought (among other things)
a refund for his 2000 taxes in the amount of $2,459.43.
The department denied the claim for a refund, and tax-

payer appealed to the Magistrate Division. The Magistrate
Division ruled for the department. Taxpayer, the magistrate
concluded, did not have regularly assigned duties on air-
craft, and so he did not qualify under the statute.

Taxpayer appealed to the Regular Division of the Tax
Court. Both parties moved for summary judgment, and the
Tax Court granted the department’s motion and denied tax-
payer’s motion. Etter v. Dept. of Rev., 22 OTR 18, 22, 27 (2015).
The court concluded that the general provision at issue—49
USC § 40116(f)(2)—had to be interpreted in context. Id.
at 22. Part of that context was 49 USC § 40116(£)(8)(B),
which identifies the states allowed to tax when employees
were on authorized leave to engage in union duties. See Etter,
22 OTR at 23. For those employees, the statute framed the
governing principle in terms of scheduled flight time across
the entire year, allowing taxation by:

“(B) The State or political subdivision of the State in
which the employee’s scheduled flight time would have been
more than 50 percent of the employee’s total scheduled
flight time for the calendar year had the employee been

52 pF

engaged full time in the performance of regularly assigned
duties on the carrier’s aircraft.”

The union duties provision applies to only those
employees who would ordinarily have scheduled flying over
a full year, so the court concluded that the rest of the stat-
ute must also be so limited. See Etter, 22 OTR at 23-24.
Therefore, the court held, the statute “only applies to mem-
bers of an airplane crew of an air carrier who fly on a sched-
uled basis.” Id. at 27. By contrast, taxpayer’s schedule was
to be on the ground in Portland, and his regular duties were
to perform dispatching functions there. Id. at 24-25.

The Tax Court subsequently entered judgment
against taxpayer. Taxpayer timely appealed to this court
under ORS 305.445 (2013).

We review a decision of the Tax Court for “errors or
questions of law or lack of substantial evidence in the record
to support the tax court’s decision or order.” Jd. In this case,
the Tax Court ruled on the parties’ summary judgment
motions. The issue, therefore, is whether there was a genu-
ine issue of material fact and whether one of the parties was
entitled to judgment as a matter of law. See TCR 47 C.

In general, we consider whether actions are consis-
tent with state law before examining consistency with fed-
eral law. See State v. Sarich, 352 Or 601, 617, 291 P3d 647
(2012) (so noting). Taxpayer makes no argument under state
law that he is not liable for the tax owed, and none appears
to be available. Therefore, the matter at issue here turns on
the meaning of a federal statute. Accordingly, federal law
governs its interpretation. See, eg., Julian v. Dept. of Rev.,
339 Or 232, 235, 118 P3d 798 (2005) (“In construing and
applying a federal tax statute, federal law, rather than state
law, governs.” (Citations omitted.)). In interpreting a statute,
the federal courts may examine the statute’s text, its struc-
ture, and its legislative history. See, e.g., Dept. of Revenue
of Or. v. ACF Industries, 510 US 332, 339-46, 114 S Ct 843,
127 L Ed 2d 165 (1994) (examining text, structure, and leg-
islative history of federal statute).

In this case, the parties dispute two provisions of
the federal statute. The first issue involves whether the

Po 53

statute applies to taxpayer at all: that is, whether taxpayer
is an “employee of an air carrier having regularly assigned
duties on aircraft in at least 2 States.” 49 USC § 40116(f)(2).
The second issue involves whether, if the statute applies,
Oregon nevertheless may tax taxpayer’s income: that is,
whether Oregon is a state in which taxpayer “earns more
than 50 percent of the pay received by [him] from the car-
rier” and so may tax taxpayer (who contends that the 50
percent rule counts income only from scheduled flight time).
49 USC § 40116(£)(2)(B). As we will explain, we conclude
that taxpayer does not have “regularly assigned duties on
aircraft.” Therefore, we do not need to decide whether tax-
payer earned more than “50 percent of the pay received by
him” in Oregon.

With regard to the first issue, the parties agree that
taxpayer is the employee of an air carrier. The dispositive
issue is whether the observation flights required by FAA
regulation qualify as “regularly assigned duties on aircraft
in at least 2 States.” 49 USC § 40116(f)(2).

We will assume for purposes of argument that

observation flights qualify as “assigned duties.” Even with
that assumption, however, we must determine whether those
duties are “regularly” assigned duties. Taxpayer asserts
that “regularly” implies only that the duty occurs at regular
but flexible intervals, and he contends that his two required
flights each year qualify. The department maintains that
there is no evidence that the observation flights have to be
taken “in any uniform manner” except as needed to comply
with the observation flight regulation.

We now turn to the text of the federal statute pro-
viding protection to a taxpayer who is an “employee of an
air carrier having regularly assigned duties on aircraft in
at least 2 States.” 49 USC § 40116(f)(2). “Regularly” is an
adverb meaning “in a regular, orderly, lawful, or methodi-
cal way : SYMMETRICALLY, CORRECTLY, PROPERLY.”
Webster’s Third New Int'l Dictionary 1913 (unabridged ed
2002). The base word “regular” has a number of meanings,
the following of which might apply in context:

“3 a: steady or uniform in course, practice, or occurr-
ence : not subject to unexplained or irrational variation

54 pF

: steadily pursued : ORDERLY, METHODICAL <~ habits>
b (1): returning, recurring, or received at stated, fixed,
or uniform intervals <a ~ income> <in the ~ course of
events>[.]”

Id. “Regular” has as synonyms “normal,” “typical,” and “nat-
ural.” Id.

Another source characterizes “regularly” as being
“nearly synonymous” with “routinely.” Bryan A. Garner, A
Dictionary of Modern American Usage 565 (1998). Neverthe-
less,

“regularly implies a more orderly sequence at predictable
intervals. <Karl regularly eats cereal for breakfast.>
<Gillian routinely checks her car’s oil and tires before tak-
ing a trip out of town.>”

Id. (emphasis in original).

“Regularly” thus has two aspects. One is quantita-
tive and relates to the frequency that something happens.
The other is qualitative and relates to the routine nature
of the event. See Kohring v. Ballard, 355 Or 297, 304, 325
P3d 717 (2014) (noting that word “regular” has “two distinct
senses, one connoting a particular quality of activity and
the other connoting the frequency with which an activity
occurs”). As the Court of Appeals has noted:

“The words ‘regular’ and ‘regularly’ have at least two dif-
ferent and distinct uses. An example of the first is Joe is a
regular guy who behaves in a regular manner’ An exam-
ple of the second is Joe is a regular consumer of American

products.’

Burkhart v. Farmers Ins. Co., 144 Or App 594, 599, 927 P2d
1111 (1996).

As we stated in Kohring, “we examine word usage
in context to determine which among competing defini-
tions is the one that the legislature more likely intended.”
355 Or at 304. In this case, “regularly” modifies “assigned
duties.” In context, that does not seem to focus on the time
intervals between the duties being assigned. Instead, the
focus appears to be on whether the assigned duties are nor-
mal, typical, or routine. The frequency with which a duty is
assigned would affect whether the duty may be considered

Po 55

normal, typical, or routine. An infrequent duty of short
duration assigned twice in a year does not suggest a normal,
typical, or routine assignment.

Here, as previously noted, taxpayer’s “assigned
duty” of flight time was approximately 10 hours for the sub-
ject tax year—five hours for each of the two aircraft groups.
That duty represented 0.5 percent of taxpayer’s annual work
hours as a full-time employee. We do not regard such an
infrequent and incidental requirement of short duration as
normal, typical, or routine. Indeed, such a short amount of
flight time could only reasonably be viewed as de minimis.

In support of taxpayer’s contention that “regularly”
means only that the duty occurs at regular but flexible
intervals, he cites three cases: Dept. of Rev. v. Hughes, 15
OTR 316 (2001); Butler v. Dept. of Rev., 14 OTR 195 (1997);
and Fink v. Commissioner of Revenue, 71 Mass App Ct 677,
885 NE2d 859 (2008). Although those cases do not bind us
and are not themselves evidence of congressional intent,
we have considered them and do not find them persuasive.
Butler and Hughes both involved 49 USC § 11504(b)(), a
parallel provision to the statute at issue here that limits the
states that may tax employees of motor carriers who “per-
form[] regularly assigned duties in 2 or more States.” Fink
involved 49 USC § 11502, a similar provision for railroad
employees. However, none of those cases provide a detailed
explanation of the source or meaning of the term “regularly
assigned duties” and, therefore, are not particularly helpful
to our inquiry.

Taxpayer contends that the purpose of the federal
statute was to protect ail employees of air carriers against
taxation. That contention, however, is directly inconsistent
with the statutory text limiting the exemption to those
employees with “regularly assigned duties” in two or more
states. Simply by omitting “regularly assigned” from the
statute, Congress could have extended the exemption to
apply to all air carrier employees with any duties on air-
craft in two or more states. Nevertheless, we turn to the
legislative history to see whether it suggests a different
conclusion.

56 po

The phrase “regularly assigned duties” was origi-
nally enacted into law by the Act of December 23, 1970, Pub
L 91-569, § 4, 84 Stat 1499, 1502.6 Senate Report 91-1261
explained that the purpose of that act was to relieve inter-
state carriers and some of their employees from burdens cre-
ated by multiple state taxation. The report explained:

“The problem addressed by this legislation is peculiar
to those employees who are required by the nature of their
employment to work in more than one State on a regular
basis. Tax policies in some States have created great hard-
ships both for interstate carriers and interstate carrier
employees. Certain States have insisted upon withhold-
ing from employees an amount based upon the employ-
ee’s entire annual income even though the portion of the
employee’s income derived from performance of duties
within the State in question may have represented a very
small proportion of his total income. *** It is no answer
that at the end of the year a good portion of that money
might be returned to the employee.

“The employer is also confronted with serious problems.
State withholding provisions typically require that the
employer determine the amount of income earned by an
employee in a particular State and that the employer take
care of all other administrative details that are related
to withholding. *** Where several States and numerous
employees are involved, the administrative load can be
extremely onerous for the employer.

“However, withholding and the requirement of filing
information returns with all of the jurisdictions asserting a
right to tax any portion of the compensation of the employee
are not the only problems. For the employee multiple State
tax liability is itself a burden.”

S Rep No 91-1261, 91st Cong, 2d Sess, reprinted in 1970
USCCAN 5039, 5039-40.

In the legislative history for Public Law 91-569, the
only discussion that we have been able to locate regarding
“regularly assigned duties” is the first sentence quoted above:
The statement that the act was intended to address a problem

° The statute at issue here was later recodified without substantive change
as 49 USC § 40116 by the Act of July 5, 1994, Pub L 103-272, § 1(e), 108 Stat 745,
1111. See id. §§ 1(a), 6(a) (both so noting).

Po 87

“peculiar to those employees who are required by the nature
of their employment to work in more than one State on a reg-
ular basis.” While Congress was thus aware of the problems
created for employees of interstate carriers such as air car-
riers, it apparently intended to protect only those employees
who work “on a regular basis” in more than one state.

Thus, Congress may well have intended the statute
to apply only to a very limited set of employees. “Regularly
assigned duties,” in that light, might mean only those per-
sons who perform “some regularly assigned function on the
vehicle.” That could support the Tax Court’s ultimate conclu-
sion that the statutory exemption applied only to air crews.

However, we need not resolve that question in this
case. While the legislative history indicates that Congress
intended to protect some employees of interstate carriers
against state income tax liability, that history also confirms
that Congress did not intend to provide that protection to
all employees of interstate carriers. It is not sufficient for
the employee to perform some work in different states to be
protected. The only employees who are protected are those
whose regularly assigned duties require them to work in
more than one state.

As we have already concluded, the term “regularly”
indicates that the assigned duties must be normal, typical,
or routine. The parties stipulated that taxpayer’s “primary
and regular duties” were on the ground in Oregon. His duty
to complete the observation flight requirement was not a
normal, typical, or routine duty. Taxpayer was not “required
by the nature of [his] employment to work in more than one
State on a regular basis.” S Rep No 91-1261, 91st Cong, 2d
Sess, reprinted in 1970 USCCAN 5039, 5039.

Thus, taxpayer did not qualify under 49 USC
§ 40116(f)(2) as an employee “having regularly assigned
duties on aircraft in at least 2 States.” There was no gen-
uine issue of material fact, and the department was enti-
tled to summary judgment against taxpayer as a matter of
law. The Tax Court did not err in granting judgment for the
department.

The judgment of the Tax Court is affirmed.

58

Argued and submitted March 7, at Lewis & Clark Law School, Portland,
Oregon; decision of Court of Appeals affirmed, judgment of circuit court
reversed, and case remanded to circuit court for further proceedings
July 21, 2016

Patricia PIAZZA,
acting on behalf of Farley Piazza and Associates
and as Personal Representative of the
Estate of Martha Paz De Noboa Delgado, deceased,
Respondent on Review,
v.

Bryan KELLIM,

dba 99 Pawn & Guns,
Defendant,
and

FIVE STARS, INC.,
dba The Zone;

Concept Real Estate, LLC; and
Concept Entertainment Group, Ltd.,
Defendants-Respondents,
and

ROTARY INTERNATIONAL
and Rotary International District 5100,
Petitioners on Review.

$063442 (Control)

Patricia PIAZZA,
acting on behalf of Farley Piazza and Associates
and as Personal Representative of the
Estate of Martha Paz De Noboa Delgado, deceased,
Respondent on Review,
v.

Bryan KELLIM,
dba 99 Pawn & Guns,
Defendant,
and

FIVE STARS, INC.,
dba The Zone;
Concept Real Estate, LLC;

Po 59

and Concept Entertainment Group, Ltd.,
Petitioners on Review,
and
ROTARY INTERNATIONAL
and Rotary International District 5100,
Defendants-Respondents.

8063451

(CC 1201-00270; CA A153286;
SC 8063442 (Control), SC S063451)

877 Pd 492

60 Ld

Jonathan Henderson, Davis Rothwell Earle & Xéchihua,
PC., Portland, argued the cause and filed the brief for
petitioners on review Rotary International and Rotary
International District 5100. With him on the brief were
William Davis and Christopher M. Parker.

James L. Hiller, Hitt Hiller Monfils Williams LLP,
Portland, argued the cause and filed the brief for petitioners
on review Five Stars, Inc., dba The Zone; Concept Real
Estate, LLC, and Concept Entertainment Group, Ltd.

J. Randolph Pickett, Pickett Dummigan LLP, Portland,
argued the cause and filed the brief for respondent on review.
With him on the brief were R. Brendan Dummigan, Kristen
West McCall, Kimberly O. Weingart, Ron K. Cheng, and
Benjamin B. Grandy, Law Office of Benjamin B. Grandy,
P.C., Beaverton.

Kathryn H. Clarke, Portland, filed the brief for amicus
curiae Oregon Trial Lawyers Association.

BREWER, J.

The decision of the Court of Appeals is affirmed. The
judgment of the circuit court is reversed, and the case is
remanded to the circuit court for further proceedings.

Balmer, C. J., dissented and filed an opinion, in which
Landau, J., joined.

BREWER, J.

In this negligence action, plaintiff, the personal
representative of the estate of Martha Delgado, alleged in
her complaint! that Delgado—a foreign exchange student
staying in this country under the supervision of defendants
Rotary International and Rotary International District
5100 (the Rotary defendants)—was shot and killed by an
assailant while standing in line on a public sidewalk outside
the Zone, a teenage nightclub in Portland owned by several
business entities (the Zone defendants).?

On defendants’ motion, the trial court dismissed
plaintiffs complaint on the ground that plaintiff had failed
to state facts sufficient to constitute a claim for relief with
respect to the issue whether Delgado’s death was a foresee-
able result of defendants’ conduct. See ORCP 21 A(8) (pro-
viding for dismissal for “failure to state ultimate facts suf-
ficient to constitute a claim”). A divided panel of the Court
of Appeals reversed the ensuing judgment dismissing this
action. Piazza v. Kellim, 271 Or App 490, 354 P3d 698 (2015).
On review, we conclude that plaintiff alleged facts that—if
proved—were sufficient to permit a reasonable juror to find
that Delgado’s death was a reasonably foreseeable result of
defendants’ conduct. Accordingly, we affirm the decision of
the Court of Appeals, and we reverse the judgment dismiss-
ing this action and remand to the trial court.

I. FACTS AND PROCEDURAL HISTORY
A. The Complaint

Because this is an appeal from a trial court judg-
ment dismissing a complaint under ORCP 21 A(8), we
assume that all well-pleaded facts are true and give plaintiff
the benefit of all favorable inferences that reasonably may
be drawn from those factual allegations. See, eg. Caba v.
Barker, 341 Or 534, 536, 145 P3d 174 (2006) (stating stan-
dard of review). Plaintiff alleged that Delgado, age 17, was
staying with a host family in White Salmon, Washington, as

? Plaintiff's operative pleading was a second amended complaint; for ease of
reference, we refer to that pleading as the complaint.

2 The Zone defendants are Five Stars, Inc., Concept Real Estate, LLC, and
Concept Entertainment Group, Ltd.

62 Le

part of an international exchange program sponsored and
managed by the Rotary defendants. On January 24, 2009,
a group of approximately 14 Rotary exchange students,
including Delgado, gathered at the home of the host parents
of one of the students for a birthday celebration. Later in the
evening, the host parents drove the group to the Zone. The
Zone was an underage nightclub that admitted people ages
16 to 21 and featured dancing. The Zone was located in the
“Old Town/Chinatown neighborhood” bordering downtown
Portland; it also was part of what is referred to by police
as the “downtown entertainment district,” which consists of
several streets where nightclubs and bars are located. The
Zone frequently had a “cordoned-off line of customers on the
sidewalk outside the club waiting to get in.” The host par-
ents dropped the students off near the Zone without a chap-
erone and planned to pick them up at 1:00 a.m.

Delgado and the other exchange students were
waiting on the sidewalk to get into the Zone when an assail-
ant, Ayala, shot Delgado twice. Delgado died as a result
of her injuries. Ayala, who previously had been diagnosed
with schizophrenia and had exhibited obvious signs of
mental illness and depression to coworkers, “went to the
Zone nightclub looking to shoot ‘preppies’ or ‘pop tweens,’
against who[m] he may have held a grudge.” Before shooting
Delgado, Ayala had stood in front of the Zone and loaded his
pistol.

Delgado’s shooting was not the first at that particu-
lar location. In July 2002, a shooter fired into a crowd of peo-
ple standing outside the nightclub, striking three people. At
that time, the club had a different name, but it was owned.
and operated by the Zone defendants. There also had been a
“history of fights and assaults in the line outside the night-
club.” In addition, the area surrounding the Zone had expe-
rienced violent crimes before the 2009 shooting. In the years
preceding the 2009 shooting, the downtown entertainment
district was “plagued by recurrent incidents of violence,”
which were “linked by police to gang activity and to clubs
in the district exceeding capacity and serving too much
alcohol.” In 2005, a series of shootings left two people dead
and four injured. “It was known by Portland police and club
owners alike that there was a high probability that more

Po 63

shootings would take place in the downtown entertainment
district.” As a consequence, police “blanketed the downtown
entertainment district with police officers to ease fear.” The
effort, which was called “Operation Safe Streets,” included
at least two dozen police officers patrolling on foot and horse-
back on Friday and Saturday nights through early morn-
ing, and gang enforcement officers, traffic safety officers,
parole officers, and liquor control investigators were also on
patrol. Owners of area nightclubs were asked to close early
on weekend nights and were advised to have adequate secu-
rity, cut off all intoxicated customers, and respond swiftly to
problems or notify police.

After violence continued in the downtown entertain-
ment district, in August 2006, Portland police called a “bar
summit” with owners and managers of downtown bars and
nightclubs to help them adopt policies to reduce violence. At
the meeting, which included a representative of one of the
Zone defendants, businesses and police addressed, among
other issues, the shootings in the Old Town/Chinatown
neighborhood. At the summit, police and businesses also
addressed whether the violence on downtown sidewalks
and in parking lots was related to intoxicated club-goers (as
police believed) or drug dealers (as clubs contended).?

By January 2009, the Old Town/Chinatown neigh-
borhood “had approximately fourteen agencies serving
addicted, mentally ill, and homeless people, more than any
other neighborhood in the city, with thousands of clients com-
ing to the area every day. Many of those clients bought drugs.”
“Drug dealers, drug users and gang members, all of whom
frequented the area where the Zone nightclub was located,
frequently carried weapons ***” “[S]ome club owners,
realizing that their clients were in danger of violent assault,
increased security at their bars and nightclubs.” In 2006,
a principal of one of the Zone defendants “acknowledged
downtown safety problems, but said they were created by

® The Zone was located in what used to be one of Portland's “Drug Free
Zones,” in which anyone convicted of a drug offense could be barred from return-
ing. The drug-free-zone program expired in 2007, and “drug dealers and addicts
took over Portland’s Chinatown/Old Town neighborhood,” which police officers
came to refer to as “crack alley.” “Residents complained of being terrorized by an
increasingly aggressive and confrontational breed of drug users and sellers.”

64 Le

‘a few bad apples, and that police, liquor control, and others
should “work together for the benefit of club-goers.”

Before the shooting, the Zone had undertaken some
measures to provide security for customers inside and out-
side the club. Those measures included:

“(a) The Zone had an employee whose primary responsi-
bility was monitoring customers as they come and go from
the club. The employee was to assist in line control; to dis-
tance ‘undesirables, i.e. intoxicated persons, harassers,
transients, known trouble makers, or gang affiliated per-
sons from guests; and to monitor the parking lot and deter
potential guests from loitering in or around their cars;

“(b) The Zone nightclub had a security camera that mon-
itored the outside of their establishment;

“c) The Zone nightclub had a security guard or door-
person at the door outside of the premises who frisked
everyone before entry, checking for drugs, alcohol, fire-
arms, or other weapons;

“(d) Inthe past, the Zone had hired off-duty police officers
to provide security for their customers; [and]

“e) On or about 2006, [t]he Zone nightclub remodeled its
facilities in the hopes of attracting a better clientele and
reducing problems at the club including violence.”

Thus, plaintiff alleged, the Zone defendants “knew about
the risk of violence that its customers faced.”

Plaintiff further alleged that underage nightclubs
generally are understood to pose “inherent” risks of violence
because of the high proportion of young male patrons, high
noise levels, crowding, competitive environment, and under-
age drinking. “A metropolitan nightclub may see as many as
three or four assaults on staff each night and are often con-
fronted with armed patrons. Shootings, stabbings, felonious
assaults, drug violations, and/or murders are commonplace
in metropolitan nightclubs across the country.” In fact,
several cities around the country “have banned or heavily
regulated teen dance clubs.” According to plaintiff's alle-
gations, the instances of violence that “occurred nationally
at underage nightclubs and locally in the area around the
Zone nightclub were all publicized in local and/or national

pT 65

media, and [the Rotary defendants] knew, or in the exercise
of reasonable care, should have known, about the dangers of
leaving [Delgado] at the Zone nightclub on the date and at
the time in question.”

Plaintiff alleged that the Zone defendants owed a
duty to Delgado, who was their business invitee, to exercise
reasonable care to make the premises safe for her, including
protection from criminal acts by third parties. Plaintiff fur-
ther alleged that the Zone defendants breached that duty:

“(a) In failing to take reasonable measures to protect
their customers from the criminal acts of third parties;

“(b) In making their customers stand in line in front of
the club;

“(e) In failing to have sufficient security personnel to pro-
tect their customers;

“d) In failing to properly train their staff to identify
threats to their customers;

“(e) In failing to identify *** Ayala as a threat while he
was in front of [t]he Zone;

“@) In failing to have adequate emergency response pro-
cedures in place to protect customers once a threat was
identified; [and]

“(g) In failing to warn their customers or the parents of
their customers about the risk of being assaulted while
patronizing [t]he Zone nightclub.”

With regard to the Rotary defendants, plaintiff
alleged that Delgado lived with a host family under the
“auspices, sponsorship, and control” of the Rotary defen-
dants and that the host parents were the Rotary defen-
dants’ agents. Plaintiff alleged that the Rotary defendants
were authorized to exercise “independent supervisory and
parental responsibility to safeguard [Delgado’s] physical
and mental well-being,” and, thus, that a special relation-
ship between Delgado and the Rotary defendants “gave
rise to a heightened duty of care beyond the general duty to
avoid foreseeable risk of harm.” According to plaintiff, the
Rotary defendants, directly or acting through their agents,
breached that duty:

66 Ld

“a) In failing to provide host parents with sufficient
training so as to reasonably ensure the safety of the
students;

“(b) In leaving the students unsupervised, late at night in
a high crime area;

“(c) In failing to adopt and enforce reasonable rules and
regulations to ensure the safety of the students;

“@)_In failing to adopt reasonable rules and regulations
regarding travel to prevent the students from being left
alone in dangerous areas; [and]

“(e) In failing to properly and adequately warn all the stu-
dents and their parents of the dangers of being left unsu-
pervised in a high crime area.™

B. The Motions to Dismiss

The Zone defendants and Rotary defendants each
moved under ORCP 21 A(8) to dismiss plaintiff's claims
against them on the ground that plaintiff had failed to allege
a foreseeable risk of harm to Delgado. Defendants argued
that plaintiffs negligence claims reduced to the following
theory: (1) criminals were more likely to commit crimes
in the area in which the Zone was located; (2) defendants
knew or should have known of that fact; and (3) Delgado
was killed in that “high crime area.” Those allegations,
defendants argued, failed to establish a foreseeable risk of
the particular crime that killed Delgado, which defendants
characterized as a “random spree shooting” against a par-
ticular class of person (“preppies”). According to defendants,
such a shooting was just as likely to occur at a mall, a movie
theater, or an ice cream parlor; thus, “the occurrence of a
random spree shooting in a high crime area does not make it
any more foreseeable than if it occurred in a place one would
normally deem safe, such as a movie theater or a school.”
Indeed, the “randomness” of shootings like the one that
killed Delgado, defendants argued, “means that when and

* The Rotary defendants ask this court to take judicial notice, pursuant
to ORC 201, of certain facts relating to the shooting incident in this case that
are not alleged in plaintiff's complaint. In light of the procedural posture of our
review of the judgment dismissing this action based on a motion to dismiss under
ORCP 21 A(8), we decline that request, which was made for the first time before
this court.

Po 67

where they occur are not foreseeable, as that term is used in
Oregon. tort law.”

Plaintiff, meanwhile, argued that defendants’ argu-
ments misapprehended what it means for a risk of harm to
be reasonably foreseeable under Oregon case law. In plain-
tiffs view, “[floreseeability in this case does not turn on
being able to foresee ‘random spree shootings,’ but rather on
foreseeing the risk of a violent criminal assault” to Delgado.
“(The dangerous character of the nightclub, its location and
its violent history,” plaintiff asserted, “would allow a jury to
conclude that the harm in this case was foreseeable.” She
explained that “[t]here are many foreseeable ways in which
the assault might have taken place[.] *** Even if an assault
by a mentally ill person is somehow unusual or unexpected,
the resulting harm was legally foreseeable because it was
within the class of reasonably foreseeable hazards” at the
Zone.

The trial court ultimately agreed with defendants,
ruling that the shooting that killed Delgado was unfore-
seeable as a matter of law. The court subsequently entered
limited judgments that dismissed all claims against both
the Zone defendants and the Rotary defendants. Plaintiff
appealed those limited judgments and argued before the
Court of Appeals, as she did before the trial court, that her
complaint alleged facts that, if proved, were sufficient to
establish a reasonably foreseeable risk of the type of harm
that befell Delgado.

C. The Court of Appeals Decision

As noted, the Court of Appeals reversed. As to the
Zone defendants, relying on several of this court’s previous
decisions, the Court of Appeals concluded that plaintiff had
alleged sufficient facts that, if proved, would permit a trier
of fact to find that (1) it was reasonably foreseeable to the
Zone defendants that people standing in line outside the Zone
late at night were at risk of harm from violent assault; and
(2) Delgado’s death was within that general class of harm.
Piazza, 271 Or App at 509, 510-11. The court further concluded
that the circumstances alleged in the complaint were not “so
highly unusual, or the sequence of events so attenuated, that

68 Le

no reasonable person in the Zone defendants’ position could
have anticipated the harm to Delgado.” Id. at 512. Indeed, the
court opined, “[a] jury could find, based on the facts alleged
in the complaint, that the link between Ayala’s crime, the
Zone defendants’ conduct, and Delgado’s death was relatively
straightforward”; defendants exposed Delgado to a risk of
harm from violent assault when they left her to line up and
wait on the street in a high-crime area, where a criminal
could approach the line and shoot at the Zone’s business invi-
tees. Id. Therefore, the Court of Appeals reasoned, plaintiff
had satisfied her pleading burden with respect to the issue of
foreseeability as to the Zone defendants.

For similar reasons, as to the Rotary defendants,
the Court of Appeals concluded that the complaint suffi-
ciently alleged foreseeability of the risk of harm in at least
one of plaintiff's specifications of negligence—leaving the
students in a high-crime area—to withstand a motion to
dismiss plaintiffs claim under ORCP 21 A(8).° Piazza, 271
Or App at 513-14. Plaintiff alleged that prior crimes in and
around the Zone were “publicized in local and/or national
media, and [the Rotary defendants] knew, or in the exercise
of reasonable care, should have known, about the dangers of
leaving [plaintiff] at [the Zone] on the date and at the time
in question.” Id. The court concluded, from those facts, that
a reasonable juror could find that the host parents’ conduct
had exposed Delgado to a reasonably foreseeable risk of vio-
lent assault and that the type of harm that actually befell
her was within that general class. Id. at 514.

Judge Edmonds dissented. As he saw the case,

“the very tragic specific harm that befell plaintiff’s dece-
dent was the result of a random shooter who was mentally
ill and who undertook to shoot ‘preppies.’ The randomness
of his criminal target demonstrates that it could have just
as well have been committed at a soccer or football game,
an outside youth church or synagogue gathering, a mall,
a public or private school event, or any place where young
people typically gather. Giving plaintiff the benefit of all
reasonable inferences, it was a mere happenstance that

5 ‘The parties do not discuss plaintiff's remaining specifications of negligence
as to the Rotary defendants. Accordingly, we do not consider them further.

the shooter chose the line of young people outside the Zone
defendant’s club as his target. For purposes of reasonable
foreseeability, a specific risk of harm is only within the
scope of a general risk of harm if the specific risk of harm
resulting in the injury is qualitatively similar to other fore-
seeable specific risks of harm that fall within a general
risk of harm. That test is not satisfied by plaintiff's allega-
tions. The circumstances of the random shooting spree in
this case are unrelated to plaintiff's ‘high crime area’ alle-
gations. For these reasons, the specific risk of harm from
a random shooting spree like the one in this case is not
within the general risk of harm alleged by plaintiff.”

Piazza, 271 Or App at 522-23 (Edmonds, S. J., dissenting).

Echoing Judge Edmonds’ dissent, all defendants
assert on review that the type of crime that occurred—
which they describe as a “random spree shooting”—was
unforeseeable as a matter of law. They argue that the Court
of Appeals majority erred by describing the scope of the
risk of harm too generally and by relying on the occurrence
of prior crimes that were dissimilar to the circumstances
of the crime at issue. In short, they assert that the Court

of Appeals expanded the concept of general risk of harm
beyond the practical realities of what business operators,
parents, and adult supervisors should reasonably anticipate
as risks of harm. Defendants also assert that courts in other
jurisdictions have limited liability in circumstances such as
those present here.

Plaintiff responds that this court’s prior decisions
have held that a plaintiff need not allege and prove the pre-
dictability of the actual sequence of events that caused the
harm in question, but rather, must plead and prove facts
showing a generalized risk of the types of incidents and inju-
ries that occurred. Plaintiff urges that, under that frame-
work—where all reasonably foreseeable risks of harm are
relevant, not merely the particular harm that actually befell
Delgado—plaintiff’s factual allegations were sufficient to
state a claim with respect to foreseeability.

II. ANALYSIS

The concept of foreseeability embodies a prospective
judgment about a course of events; it “therefore ordinarily

70 Ld

depends on the facts of a concrete situation” and, if dis-
puted, is a jury question. Fazzolari v. Portland School Dist.
No. 1J, 8303 Or 1, 4, 734 P2d 1326 (1987).° Foreseeability
plays a role in at least two overlapping common-law negli-
gence determinations: (1) whether the defendant’s conduct.
unreasonably created a foreseeable risk of harm to a pro-
tected interest of the plaintiff such that the defendant may
be held liable for that conduct—formerly described in terms
of “duty” and “breach” as measures of negligent conduct;
and (2) whether, because the risk of harm was reasonably
foreseeable, the defendant may be held liable to the plaintiff
for the particular harm that befell the plaintiff—a concept
that traditionally was referred to as “proximate” cause and
which, in our current analytical framework, operates as a
legal limit on the scope of a defendant’s liability for negligent
conduct. See generally Fazzolari, 303 Or at 11-18 (describing
role of foreseeability in negligence determinations formerly
described in terms of duty-breach and proximate cause); see
also Deckard v. Bunch, 358 Or 754, 761, 370 P3d 478 (2016).
In synthesis,

© Although often described as an “issue of fact,” id., it is more precise to
describe the foreseeability determination as a blended factual and normative—
that is, value-laden—inquiry that ordinarily is committed to juries. As one com-
mentator has explained,

“[Wlhen ‘foreseeable’ is used in what seems to be a kind of factual sense, as a
prediction or anticipation, there is no implicit degree of likelihood in the ref-
erence. It may run from possible through likely and probable and even on up
to certainty. *#* When foreseeable’ is used in the context of determining if
a defendant acted unreasonably, not in the fashion of the reasonable person,
then the degree of likelihood can be factored in among all the variables enter-
ing into the calculus of harm, thus giving it a pragmatic use. In this context
‘foreseeable’ is modified explicitly or implicitly by ‘reasonably?
poeeees

“More subtle is the use of ‘foreseeable’ in a mode that is not purely fac-
tual or predictive. To say that something is or was foreseeable can trigger an
interpretation that it is being used in the purely predictive mode because the
verb ‘to be’ is so often used as if information is being provided, although often
opinion or value judgments are involved. Comparison with a lay use of ‘fore-
seeable’ may be instructive. If a passenger in an automobile were to say to
the driver, ‘If you keep driving like this, it’s foreseeable we'll have a wreck, or
just, ‘You're risking our lives, it is not likely he is only conveying information.
It is a warning and a call for different behavior. Likewise, after the wreck, for
someone to say, ‘Well, it sure was foreseeable, is to imply that it could have
been prevented and likely that it should have been.”

Walter Probert, Torts and Language, 48 Fla L Rev 841, 854-55 (1996) (footnotes
omitted).

Pp 71

“unless the parties invoke a status, a relationship, or a par-
ticular standard of conduct that creates, defines, or limits
the defendant’s duty, the issue of liability for harm actually
resulting from defendant’s conduct properly depends on
whether that conduct unreasonably created a foreseeable
risk to a protected interest of the kind of harm that befell
the plaintiff. The role of the court is what it ordinarily
is in cases involving the evaluation of particular situa-
tions under broad and imprecise standards: to determine
whether upon the facts alleged or the evidence presented
no reasonable factfinder could decide one or more elements
of liability for one or the other party.”

Fazzolari, 303 Or at 17.

Under that framework, in effect, the more traditional
duty-breach and proximate-cause analyses in a common-law
negligence claim are subsumed in the question whether the
defendant’s conduct resulted in a reasonably foreseeable and
unreasonable risk of harm to a protected interest of the kind
that the plaintiff suffered. Towe v. Sacagawea, Inc., 357 Or
74, 86, 346 P3d 1207 (2015).’ But, as the passage quoted
above from Fazzolari observes, the duty-breach analysis is
not always subsumed in a foreseeability analysis. Rather,
the nature and scope of the duty owed by the defendant to
the plaintiff can be created, defined, or limited based on,
among other things, the relationship between or status of

Although uniform jury instructions are not sources of law, it often is usefal
to consider how sometimes elusive legal principles are understood and applied in
practice by the trial judges and lawyers who are charged with following them. To
that end, Oregon’s Uniform Civil Jury Instructions describe the overlapping roles
of foreseeability in the following way. Under UCJI 20.01, the jury is instructed
to determine whether (1) “[t]he defendant’s conduct was negligent”; (2) the defen-
dant’s negligence “was a cause of harm to the plaintiff”; and (8) “[tJhe harm was
reasonably foreseeable.” UCI 20.02 provides that a “person’s conduct is negligent
if that person fails to use reasonable care.” That instruction further provides:

“In deciding whether a person used reasonable care, consider the dangers
apparent or reasonably foreseeable when the events occurred.”

A separate uniform jury instruction based on Fazzolari, UCJI 20.03, addresses

the issue of foreseeability as a mit on liability:
“A person is liable only for the reasonably foreseeable consequences of his or
her actions. There are two things that must be foreseeable. First, the plain-
tiff must be within the general class of persons that one reasonably would
anticipate might be threatened by the defendant’s conduct. Second, the harm
suffered must be within the general class of harms that one reasonably would
anticipate might result from the defendant’s conduct.”

72 Ld

the parties. Towe, 357 Or at 86. So understood, our thresh-
old inquiry is whether plaintiff has invoked a particular sta-
tus or relationship that affects our analysis.

In her complaint, plaintiff invoked two special
relationships that informed defendants’ obligations toward
Delgado, which defendants have not challenged at this point
in the litigation. The first, which plaintiff invoked as to the
Zone defendants, is the relationship between possessors of
land and persons whom they invite onto their premises. As
possessors of premises, the Zone defendants had an obliga-
tion to take reasonable steps to protect the nightclub’s visi-
tors from reasonably foreseeable criminal acts by third per-
sons. See, e.g., Uihlein v. Albertson's, Inc., 282 Or 631, 639,
580 P2d 1014 (1978) (noting that this court previously had
adopted standard set out in Restatement (Second) of Torts
section 344 comment f (1965) “as being a part of the law of
this state”). The second special relationship, which plain-
tiff invoked with respect to the Rotary defendants, is the
relationship between a child and a person entrusted with
that child’s care. For example, schools have a special duty to
students “apart from any general responsibility not unrea-
sonably to expose people to a foreseeable risk of harm,” and
the “scope of th[at] obligation does not exclude precautions
against risks of crime or torts merely because a third person
inflicts the injury.” Fazzolari, 303 Or at 19, 20.

In both special relationships asserted by plaintiff,
the obligation to protect against risks of harm—including
the risk of harm from third-party criminal acts—is broader
than that which might apply in the absence of such a

® Restatement section 344 comment f states:

“ince the possessor is not an insurer of the visitor's safety, he is ordi-
narily under no duty to exercise any care until he knows or has reason to
know that the acts of the third person are occurring, or are about to occur.
He may, however, know or have reason to know, from past experience, that
there isa likelihood of conduct on the part of third persons in general which
is likely to endanger the safety of the visitor, even though he has no reason to
expect it on the part of any particular individual. If the place or character of
his business, or his past experience, is such that he should reasonably antic-
ipate careless or criminal conduct on the part of third persons, either gener-
ally or at some particular time, he may be under a duty to take precautions
against it, and to provide a reasonably sufficient number of servants to afford
a reasonable protection.”

Po 73

relationship, but, because those relationships do not pre-
scribe a particular scope of duty, that obligation does not
extend to risks that are not reasonably foreseeable. Id. at
16-17, 20.° Thus, although each defendant is alleged to have
had a special relationship with Delgado and a corresponding
duty to take reasonable precautions to protect her against
criminal conduct by third parties, those duties extended to
only reasonably foreseeable criminal conduct. See id.

In this case, defendants do not dispute, based on
the facts alleged in plaintiff's complaint, that they held the
asserted special relationships toward Delgado, under which
they had obligations to take reasonable precautions to pro-
tect Delgado against foreseeable risks of harm. Nor have
defendants asserted that plaintiffs’ allegations are insuffi-
cient, if proved, and if the risk of harm to Delgado otherwise
was foreseeable, to establish that defendants failed to use
reasonable care to protect Delgado from harm. Stated dif-
ferently, apart from their general foreseeability challenge,
defendants do not separately assert that plaintiffs’ alle-
gations were insufficient to establish, if proved, that their
conduct was negligent.!? Instead, as framed by defendants’
motions, the only question before us is whether plaintiff's
complaint alleged sufficient facts to withstand an ORCP 21
A(8) motion with respect to the issue of foreseeability as a
legal limit on the scope of defendants’ liability.

The question is whether plaintiff has alleged facts
sufficient, if proved, to permit a jury determination that
reasonable persons in defendants’ positions would have

® Even when a special relationship is the basis for the duty of care owed
by one person to another, this court has held that, if the special relationship (or
status or standard of conduct) does not prescribe a particular scope of duty, then
“[c]ommon law principles of reasonable care and foreseeability of harm are rele-
vant.” Cain v. Rijken, 300 Or 706, 717, 717 P2d 140 (1986) (quoted with approval in
Fazzolari, 303 Or at 16-17); see also Oregon Steel Mills, Inc. v. Coopers & Lybrand,
LLP, 336 Or 329, 342, 83 P3d 322 (2004).

1 Tt follows that issues pertaining to whether defendants were negligent,
such as “the feasibility and cost of avoiding the risk,” which “bear on the rea-
sonableness of defendant’s conduct,” are not before us. See Donaca v. Curry Co.,
303 Or 30, 38-39, 734 P2d 1339 (1987) (explaining difference between general
foreseeability and duty/breach issues; whether county was negligent for failing
to maintain right-of-way depended on whether county’s action was reasonable
in light of risk, including feasibility and cost of avoiding risk); see also Hughes v.
Wilson, 845 Or 491, 502, 199 P8d 805 (2008) (applying principle).

14 Ld

foreseen a risk to Delgado’s safety “of the kind of harm that
befell” her. See Fazzolari, 303 Or at 17. “The community’s
judgment, usually given voice by a jury, determines whether
the defendant’s conduct met that threshold in the factual
circumstances of any particular case.” Chapman v. Mayfield,
358 Or 196, 206, 361 P3d 566 (2015). “The court intervenes
only when it can say that the actor’s conduct clearly meets
the standard or clearly falls below it.” Fazzolari, 303 Or at
18 (quoting Stewart v. Jefferson Plywood Co., 255 Or 603,
607, 469 P2d 783 (1970)).

In Stewart, this court elaborated on the nature of a
court’s role in the foreseeability determination. In that case,
the plaintiff volunteered to assist in putting out a fire that
the defendant had started at one plant and that then had
spread to an adjacent warehouse. The plaintiff and others
were hoisted to the roof of the warehouse by a forklift. In
attempting to put out the fire, plaintiff fell through a cov-
ered skylight—covered by corrugated plastic and a film of
dust so that it was indistinguishable from the rest of the
roof—to the warehouse floor, suffering injuries. The ques-
tion, the court said, was “whether plaintiff's injury and the
manner of its occurrence was so highly unusual that we can
say as a matter of law that a reasonable man *** would not
have reasonably expected the injury to occur.” Stewart, 255
Or at 609.

The answer required identification of a court’s proper
gate-keeping role:

“The temptation here is to leave the question to the jury
where the problem can be solved by an intuitive process,
thus relieving us from the judicial task of reaching a rea-
soned conclusion. Unfortunately, however, we have inher-
ited the duty to exercise control over the jury and to keep it
within the bounds set for it, vague as they may be.”

Id. at 607. On the facts presented, the court held:

“A reasonable man could foresee that a fire started by
him might spread to his neighbor’s building and that in the
effort to extinguish the fire his neighbor or a third person
coming to his aid might be injured as a result of a variety
of possible circumstances—by being burned, by falling off
a ladder, by falling off a roof, by falling through a burned

pT 7

portion of the roof, or by other similar risks normally asso-
ciated with fighting fires.

“It is less likely that an injury would occur as a result
of falling through a skylight and even less likely that one
would fall through a skylight because it was covered in a
manner that made it appear to be a solid part of the roof.
But, although such conditions may not be a common cause
of injury, on the other hand it cannot be said that this set-
ting for possible injury is so uncommon that a jury could
not reasonably describe as foreseeable the risk of harm
which it creates.”

Id. at 610. In short, the circumstances, although unusual,
were not “out of the range within which a jury could deter-
mine that the injury was reasonably foreseeable.” Id. at
609-10.

In a later case involving third-party criminal con-
duct, this court recognized a limit on how generally the
type of harm at risk can be described. In Buchler v. Oregon
Corrections Div., 316 Or 499, 853 P2d 798 (1993)—a case on.
which defendants here heavily rely—this court considered
whether the state could be held liable in negligence for the
death and serious injury of victims of violence inflicted by an
escaped prisoner. The prisoner was a member of a work crew
in a remote location. The crew supervisor had left a state
van’s keys in the ignition. The prisoner escaped in the van,
drove 50 miles to his mother’s house, stole a gun, and, two
days after the escape, shot two people, killing one of them.
The trial court granted the state’s summary judgment
motion, and, on review, the plaintiffs’ claims raised several
issues concerning foreseeability relating to the plaintiffs’
various theories of negligence.

One foreseeability issue in Buchler concerned the
plaintiffs’ claim that the state had facilitated the harm to
the victims by leaving the van’s keys in the ignition. Id. at
507. The court explained that describing the type of harm
at risk too generally—such as stating that criminals com-
mit crimes or that escaped prisoners may commit crimes
while at large—makes criminal acts the legal responsibility
of everyone who may have contributed in some way to the
criminal opportunity. Id. at 511. Such a conception would

16 Ld

sweep too broadly because “mere ‘facilitation’ of an unin-
tended adverse result, where intervening intentional crim-
inality of another person is the harm-producing force, does
not cause the harm so as to support liability for it.” Id. at
511-12. The court in Buchler ultimately concluded as a mat-
ter of law that the harm that the plaintiffs suffered was not
a reasonably foreseeable consequence of the risk created by
leaving the keys in the van. Id. at 514. In doing so, the court
clarified that, for a jury question to arise with respect to
foreseeability, the relevant risk of harm must be reasonably
foreseeable. Id.

In keeping with its focus in Stewart, Fazzolari, and
Buchler, this court recently has emphasized the centrality—
in determining whether a triable issue has been established.
with respect to foreseeability—of the plaintiff's description
of the injury-producing factual circumstances in the context
of her theory of liability:

[Als part of determining whether the defendant’s conduct
was unreasonable, there is nothing surprising about a con-
ception of foreseeability that assesses the overall ‘setting
for possible injury’ under the plaintiff's theory of liability.
Drawing on the plaintiff's theory of liability, the court in
Stewart determined that it was not unlikely that an ‘injury
would occur in this manner in the course of fighting a fire.”

Chapman, 358 Or at 208 (citations omitted); see also
Fazzolari, 303 Or at 22 (stating that, where school knew of
assaults at specific locations on school property, trier of fact
could find that school should have warned students of that
general risk, which included risk of rape).

In Chapman, this court held, in reviewing a grant
of summary judgment, that the trial court had properly dis-
missed the plaintiff's action against a tavern that allegedly
had over-served a visibly intoxicated patron who, in turn, left
the tavern on foot, walked down the street to another busi-
ness establishment, and unintentionally fired a concealed
handgun through the door, injuring two people inside. 358
Or at 198. To establish foreseeability, the plaintiff primarily
relied on (1) expert opinion evidence that intoxicated persons
frequently become violent and that medical, scientific, and
lay journals have documented a connection between violence

Po 1

and alcohol for decades; and (2) experiential observations by
a bartender at another tavern in the vicinity about the link
between alcohol and violence. Id. at 220. We concluded that
the plaintiff's pleading and evidence did not create a triable
issue of fact with respect to foreseeability. We explained:

“[E]ven though the precise mechanism of harm need not
be foreseeable, it is necessary to describe the type of harm
at risk and the class of plaintiffs at risk with reference to
the particular factual circumstances of the case, as gleaned
from the pleadings and evidence in the record. Based on
the circumstances of this case, we conclude that the appro-
priate characterization of the type of harm at issue is an
unintentional attack by a visibly intoxicated patron after
he had left defendant’s premises. Cf Fazzolari, 303 Or at
21-22 (characterizing type of harm from failing to pro-
vide adequate warning or security as an assault on stu-
dents at school); Stewart, 255 Or at 610 (describing type
of harm from negligently setting fire as injuries that may
occur while attempting to extinguish fire). We further con-
clude that plaintiffs’ evidence was insufficient because it
described the risk of harm too generally.

“As explained, evidence that it is common knowledge
that intoxicated people have impaired judgment and may,
therefore, behave improperly is too general to establish
that a person who serves a visibly intoxicated person rea-
sonably should expect that that person will commit an
assault. Evidence making the bare assertion that it is com-
mon knowledge that visibly intoxicated persons frequently
become violent is no more sufficient. Such evidence does not
create a permissible inference that a particular defendant
should have been aware of an unreasonable risk of violent
harm or that a particular plaintiff was within the class of
persons at risk of such harm.”

Chapman, 358 Or at 220-21.

Other, more specific evidence—such as evidence
showing the rate of incidence of violence among intoxicated
drinkers, the types of intoxicated drinkers who become vio-
lent, or the class of persons at risk of violent harm from a
visibly intoxicated person—could have been adduced in
Chapman that may have permitted different inferences so
as to preclude summary judgment. The omission of such evi-
dence, we held, distinguished the circumstances in Chapman

78 Ld

from those in Stewart, where this court was willing, in the
absence of more direct evidence, to use general knowledge
to supply an inference that the risk of harm was reasonably
foreseeable. Id. at 221; see Stewart, 255 Or at 611 (although
record did not contain statistics on frequency of injuries
resulting from falling through concealed skylights, “general
knowledge” of manner in which injuries occur supported
foreseeability of how injury could occur in such manner). The
plaintiffs evidentiary proffer in Chapman did not include
facts that would support an inference—based on general
knowledge—that it was reasonably foreseeable to the defen-
dant that the visibly intoxicated patron would unintention-
ally attack the plaintiffs at a different location. Chapman,
358 Or at 222; see Buchler, 316 Or at 511 (disavowing broad
conception of foreseeability based on purported “common
knowledge” connecting thieves, guns, and crimes).

Before summing up the principles that govern our
analysis, we briefly turn to one of defendants’ primary points
of emphasis. There is an understandable thirst in this area
of the law for bright-line rules that—at least in theory—can.
produce predictable results from case to case in negligence
claims. In urging this court to require a high degree of sim-
ilarity between the nature and circumstances of prior crim-
inal acts and the criminal act at issue here, defendants note
that some courts have analyzed whether a particular crim-
inal act was reasonably foreseeable based on prior similar
acts, and others have looked to the place and character of
the location of the act. See, e.g., McKown v. Simon Property
Group, Inc., 182 Wash 2d 752, 768-74, 344 P3d 661, 667-70
(2015) (discussing the two approaches). Courts following the
“prior similar acts” approach have held that prior acts must
be sufficiently similar in character to the act at issue before
the latter can be deemed to have been foreseeable.”

4 This court has “cautioned against turning fact-specific decisions on fore-
seeability into rules of law.” Chapman, 858 Or at 222 (quoting Bailey v. Lewis
Farm, Inc,, 343 Or 276, 289, 171 P3d 36 (2007) (citing Fazzolari, 303 Or at 16)).
In Chapman, we concluded:

“We do not depart from that precept here; rather, our decision turns on the

specific facts in the record before us”
Id.

2 See, e.g., Romero v. Giant Stop-N-Go of New Mexico, Inc., 146 NM 520,
212 P3d 408 (2009) (holding that evidence of prior robberies, theft, physical

Po 79

Under the “place and character” test, courts have
tended to focus on whether the place and character of a loca-
tion or business “invited” the criminal behavior. See, e.g.,
Early v. N.L.V. Casino Corp., 100 Nev 200, 204, 678 P2d 683,
685 (1984), partially overruled on other grounds by Moody
v. Manny’s Auto Repair, 110 Nev 320, 871 P2d 935 (1994).
In response to a claim that an unprovoked attack at a large
music festival was foreseeable based on incidents at previ-
ous festivals, and because crime is foreseeable when large
groups of people gather, the New York Court of Appeals
held that “[a] random criminal attack of this nature is not
a predictable result of the gathering of a large group of peo-
ple.” Maheshwari v. City of New York, 2 NY3d 288, 294, 810
NE2d 894 (2004). In the same vein, the California courts
have emphasized that “it is difficult if not impossible in
today’s society to predict when a criminal might strike,” and
“if a criminal decides on a particular goal or victim, it is
extremely difficult to remove his every means for achieving
that goal.” Wiener v. Southcoast Childcare Centers, 32 Cal
4th 1138, 1147, 1150, 88 P3d 517, 524 (2004).

The concerns expressed in the cited cases are rea-
sonable; in fact, they animated in part this court’s rejec-
tion of the facilitation rationale that the plaintiff in Buchler
presented. We also recognize the relevance of the fac-
tors that other courts have identified in the foreseeability
analysis. In many sets of factual circumstances, multiple
considerations—including the place and character of the
location of a criminal act, and the occurrence of prior sim-
ilar acts—are relevant. However, as we repeatedly have

altercations, domestic violence, harassment, narcotics and suspicious persons at
same location did not make targeted and deliberate shooting of plaintiff's dece-
dents foreseeable). Under that approach, courts also have held that the prior acts
must have happened in the vicinity of the location where the act at issue occurred
before that act can be deemed foreseeable. See Sigmund v. Starwood Urban Inv.,
416 F Supp 2d 36, 46 (D DC 2007), affd, 617 F3d 512 (DC Cir 2010) (looking at
a five-block radius around area of the attack and concluding that sudden and
unexpected attack was not foreseeable). In addition, courts using that formula
have held that the prior acts must have happened relatively recently, Dwiggins
v. Morgan Jewelers, 811 P2d 182, 183 (Utah 1991) (one robbery five years earlier
insufficient to make subsequent robbery foreseeable), and with some degree of
frequency. See Dudas v, Glenwood Golf Club, Inc., 261 Va 138, 140, 540 SE2d 129
(2001) (two robberies within the month preceding the attack on plaintiff was not
enough for foreseeability because there was no imminent danger).

80 Le

stated, our preference for giving voice to the community’s
judgment through a jury determination prevails, except in
extreme cases, where no reasonable person could find that
the harm that befell the plaintiff was reasonably foreseeable.
Fazzolari, 303 Or at 17-18; Stewart, 255 Or at 607. Under
that framework, a narrow focus on the actual sequence of
events that led to a particular injury to a particular person
“misunderstands foreseeable risk.” Towe, 357 Or at 106 n 17.
A defendant need not have been able to precisely forecast a
specific harm to a particular person to be held liable. See id.
This court punctuated that point in Fazzolari when it made
the following observations about Stewart:

“(T]he Stewart opinion acknowledged that ‘[wlhether the
harm in a particular case is deemed foreseeable may
depend upon the manner in which we describe “harm.” This
is even more true of “risk.” Stewart itself made clear that
the court meant generalized risk of the types of incidents
and injuries that occurred rather than the predictability
of the actual sequence of events. One reasonably might
foresee that a fire might place others seeking to protect a
neighboring building in danger of injury by falling as well
as by being burned, even though one might not foresee that
the fall would be through an insecurely covered and hidden
skylight. So, at least, a jury might find.”

Fazzolari, 303 Or at 13 (citations omitted).

Nor is it necessary that a particular quantifiable
mass of similar types of incidents involving a narrow class of
victims have occurred at a precise location for a triable issue
of fact with respect to foreseeability to arise. In Fazzolari,
for example, a jury question was created by generalized
and somewhat limited evidence concerning the defendant
school’s prior experience with criminal activity:

“Here there was evidence that a woman reportedly had
been sexually assaulted on the school grounds 15 days
before the attack on plaintiff, and plaintiff attempted
to introduce evidence of various other kinds of attacks.
Obviously a school’s responsibility for students’ safety
against assault is not limited to the risk of rape, and evi-
dence of foreseeability will differ depending on whether the
risk of injury is claimed to be specific to a school, or schools

pT 81

generally, or a neighborhood, or a class of potential victims
such as women or particular ethnic groups.”

Id. at 21 (citation omitted).

But that does not mean that the foreseeability
determination is untethered to principle. As our previous
decisions show, negligence claims arising from third-party
criminal acts often involve the defendant's failure to moni-
tor or screen a dangerous third person or the placement of
another person at unreasonable risk of criminal harm at a
location and in circumstances that are unsafe. In either sit-
uation, there is a common requirement: a trier of fact must
be able to find from concrete facts that a reasonable person
in the position of the defendant reasonably would have fore-
seen that the person or location and circumstances posed a
risk of criminal harm to persons such as the plaintiff. See
generally Towe, 357 Or at 86; Oregon Steel Mills, 336 Or at
340; Fazzolari, 3038 Or at 17. Facts pertaining to the similar-
ity, frequency, and recency of prior criminal acts, committed
under the same or similar circumstances, or at or near the
same location, and involving the same or similar types of
victims, as well as the place and character of the location
of the current criminal act, are all relevant to the determi-
nation. See Chapman, 358 Or at 220-22; see also Buchler,
316 Or at 511-12; compare Uihlein, 282 Or at 640-41 (store
not liable for shopper assaulted in supermarket when little
evidence of unsafe location), with Brown v. J.C. Penney Co.,
297 Or 695, 710, 688 P2d 811 (1984) (store liable for shopper
attacked in parking lot where there was ample evidence of
criminal activity in area). Defendants have not persuaded
us that those principles require further refinement or that
the circumstances of this case present a compelling reason
to do so.

Til. APPLICATION

As discussed, defendants repeatedly recount the
details of this particular shooting, emphasizing the mental
illness of the shooter, his grudge against teens, and char-
acterizing the attack as a “random spree,” and the shooting
as “indiscriminate.” Defendants then fault plaintiff's allega-
tions of foreseeability because they involve different facts.
To the extent that their challenge focuses on the precise

82 Ld

sequence of events that occurred in this case, defendants
invite a taxing level of comparison that this court consis-
tently has rejected. As noted, contrary to defendant’s focus,
foreseeability has reference to the “generalized risk of the
types of incidents and injuries that occurred|[,] rather than
the predictability of the actual sequence of events.” Fazzolari,
8038 Or at 13 (discussing Stewart). Moreover, plaintiff's alle-
gations support an inference that the attack in this case was
not random in the sense of being indiscriminate or lacking a
plan or purpose. The complaint alleged that the shooter spe-
cifically targeted the Zone because it was a teenage night-
club that attracted young people like Delgado. Although the
shooter could have chosen other locations to carry out his
plan, that fact does not make the shooting any less foresee-
able to defendants.

We agree with defendants that, among the numer-
ous facts alleged in plaintiff’s complaint, some, viewed in
isolation, would be too general to sustain her threshold
pleading burden with respect to foreseeability. For example,
the allegations that violent crimes have occurred in down-
town Portland over a period of several decades, and in some
instances, many blocks away from the Zone, and a recita-
tion of general crime statistics for “these neighborhoods,”
alone add little to the analysis."* Defendants are right to
observe that such generalized allegations—substantially
separated in time and distance from the pertinent events

% For example, plaintiff listed the crime statistics of “these neighborhoods”
in her opening brief before the Court of Appeals:

“From September 2006 through December 2006—1 homicide, 282 assaults,
8 rapes, 67 robberies, 15 sex crimes and 2 kidnappings;

“From January 2007 through December 2007—3 homicides, 16 rapes,
716 assaults, 187 robberies, 34 sex crimes and 7 kidnappings;

“Brom January 2008 through December 2008—13 rapes, 709 assaults,
145 robberies, 45 sex crimes, and 5 kidnappings;

“From January 4, 2009 through January 18, 2009 (the two weeks preceding
the incident at issue here)—31 assaults, 7 robberies and 2 sex crimes.”

Plaintiff does not, however, specify exactly what she means by “these neigh-
borhoods,” beyond the fact that she is referring to the Chinatown/Old Town and
downtown neighborhoods. Plaintiff also fails to provide information regarding
the proximity of those crimes to the Zone. The “neighborhood” in question spans
52 square blocks, and the “downtown entertainment district” comprises nine
blocks.

Po 83

here—closely resemble the sort of attenuated circumstances
that this court eschewed in Buchler.

However, at the pleading stage of this case, the dis-
positive issue is whether the allegations of foreseeability in
plaintiffs complaint can withstand a motion to dismiss. In
making that determination, we conclude that the proper
level of generality at which to compare the criminal history
on which plaintiff relies and the shooting in this case is to
treat both as falling within the category of violent assaults.
This court’s previous decisions generally prescribe a rela-
tively broad level of generality in assessing the reasonable
foreseeability of criminal conduct as a limit on liability. See,
e.g., Fazzolari, 303 Or at 21 (treating sexual assault and
other types of assaults at a school as falling in same cate-
gory for purposes of foreseeability). That is especially true
where, as here, the risk of harm at a particular location is
at issue. See, e.g., Uihlein, 282 Or at 641 (“[T]here must be
something to alert the storekeeper to the likelihood of harm
of some kind from a criminal agency.”). That only makes
sense. When a business owner is on notice that—in the
absence of reasonable precautions—assaultive conduct can
be anticipated where people are waiting in line to enter its
premises, it rings hollow to suggest that a specific crime pat-
tern triggers the owner’s duty to protect patrons only with
regard to those specific crimes (such as gang-related homi-
cide) that have occurred. Only if we can say that the types of
historical crimes are so dissimilar, or so remote in time and
location from the current crime that no reasonable person
could determine that the current crime was foreseeable, will
a court intervene to remove the matter from the jury as a
matter of law. Fazzolari, 303 Or at 18, 17-18, 21.

Here, plaintiff alleged a repeated—if somewhat
unevenly spaced—history of violent assaults, including gun
violence, at and in the neighboring vicinity of the Zone, and
a known. risk of such violence in the future. In the years
preceding the 2009 shooting, the downtown entertainment
district—a nine block area that included the Zone—had
been “plagued by recurrent incidents of violence,” which
were “linked by police to gang activity and to clubs in the
district exceeding capacity and serving too much alcohol.”

84 Le

In 2005, a series of shootings in that district left two peo-
ple dead and four injured. “It was known by Portland police
and club owners alike that there was a high probability that
more shootings would take place in the downtown entertain-
ment district.” Pertinent to the foreseeability of that risk
are plaintiff's allegations asserting, in effect, that the Zone
defendants knew that teenage nightclubs such as the Zone
are especially susceptible to incidents of violent assault.
Plaintiff alleged that the Zone defendants had in the past
acknowledged the risks of harm posed by that history at the
Zone and in the downtown entertainment district. Plaintiff
also alleged that a gunman stood and loaded his gun on
that sidewalk, a gunman who was attracted to that location.
because he could find young people standing where he found
and shot Delgado.

Those allegations would permit a reasonable trier of
fact to determine that a reasonable person in the position of
the Zone defendants reasonably would have foreseen a risk
of violent assault on the public sidewalk outside the night-
club, where underage patrons were queued up to enter. They
also are sufficient to permit a reasonable trier of fact to find
that the harm that befell Delgado was within the class of
harms at risk.“

The foregoing allegations would not, by themselves,
permit a finding that the risk of harm to Delgado was rea-
sonably foreseeable to the Rotary defendants. However,
plaintiff further alleged, with respect to those defendants,
that the prior violent assaults in and around the Zone were
“publicized in local and/or national media, and [the Rotary
defendants] knew, or in the exercise of reasonable care,
should have known, about the dangers of leaving [Delgado]
at the Zone nightclub on the date and at the time in ques-
tion.” Assuming, as we must at this stage of the proceedings,
the truth of those allegations, we cannot say that no trier of
fact reasonably could determine that a reasonable person

¥ We deliberately do not assign a particular degree of significance or lack of
significance in the foreseeability determination to many of the facts alleged in
plaintiff's complaint, in terms of tipping the scales in favor of the overall suffi-
ciency of plaintiff's pleading. By emphasizing the core facts summarized above,
we simply note what, in our view, fundamentally surmounts the sufficiency
rurdle.

Po 85

in the position of the host parents would have foreseen a
risk of violent assault on the public sidewalk where they
left Delgado. The question whether plaintiff can adduce evi-
dence sufficient to create a triable issue of fact with respect
to those allegations, of course, is not presently before us.!5

Moreover, on the facts alleged, we are unable to say
that a reasonable trier of fact would have to find that the
criminal harm that befell Delgado was categorically differ-
ent from the criminal harms of which the Rotary defendants
had notice, and that no reasonable factfinder could find that
the harm to Delgado fell within the class of harms of which
the Rotary defendants are alleged to have been aware. The
link between defendants’ allegedly negligent conduct and
the actual harm that befell Delgado was direct: Plaintiff
alleged that the Rotary defendants knew that there had
been a significant history of violent assault late at night at
or near the Zone, they took Delgado to the Zone and left her
there, and she was the victim of a violent assault. That chain
of events is not the sort of “concatenation of highly unusual
circumstances” that compels the conclusion that Delgado’s
death was not reasonably foreseeable as a matter of law. See
Stewart, 255 Or at 609.

IV. CONCLUSION

It bears repeating that, as framed by defendants’
motions, the issue before us is not whether plaintiffs’ alle-
gations were sufficient, if proved, to show that defendants’
conduct was unreasonable in light of a reasonably foresee-
able risk of harm to Delgado. Thus, we are not concerned—
for example—with whether any precautions that defen-
dants took or failed to take were reasonable in relation to

% The Court of Appeals correctly understood that:

“Plaintiff's complaint does not rest on allegations that crime is generally
foreseeable, or on a conclusory allegation that [t]he Zone is located in a high-
crime area. Rather, plaintiff alleged specific facts that, if proved at trial,
would establish that [t]he Zone nightclub had experienced violent crime,
including homicidal violence. Assuming, as we must at this stage of the pro-
ceedings, the trath of those allegations, and that the host parents were aware
of those facts and nevertheless left Delgado there, a reasonable juror could
conclude that the host parents’ conduct exposed her to a foreseeable risk of
violent assault.”

Piazza, 271 Or App at 514.

86 Ld

the nature or degree of foreseeable risk of harm to persons
in Delgado’s circumstances. Instead, our exclusive focus is
on reasonable foreseeability as a legal limit on the scope of
defendants’ liability.

In Fazzolari, this court stated:

“Another person’s crime was once thought to lie beyond a
defendant’s responsibility on grounds of ‘proximate cause,’
Aune v. Oregon Trunk Railway, 151 Or 622, 630-31, 51 P2d
663 (1935), but more recent decisions have dealt with the
behavior of others, lawful or otherwise, as part of the gen-
eral analysis of foreseeable risks.”

303 Or at 20. The court’s separation of foreseeability from
causation arose from a concern that proximate cause not be
invoked to improperly cut off claims by substituting a judi-
cial veto for what ordinarily is a jury determination. As this
court previously had stated:

“[Wle cannot lose sight of the fact that we are simply mak-
ing an allocation of the appropriate functions of the court
and jury. The sole function of a rule of limitation in these
cases is to tell the court that it must not let the case go to
the jury. The jury should be given wide latitude in setting
these limits of liability, whether it be done under a formula
of negligence or causation.”

Dewey v. A.F. Klaveness & Co., 238 Or 515, 535, 379 P2d 560
(1963) Gnternal quotation marks and citation omitted).

In this case, plaintiff's allegations accomplished—at
the pleading stage—what the evidentiary proffers in cases
such as Buchler and Chapman did not. Plaintiff alleged
concrete facts showing a history of violent assault at and
in the vicinity of the Zone nightclub and related facts that,
if proved, would support a determination that reasonable
persons in defendants’ positions would have foreseen a risk
of violent assault against patrons lined up on the sidewalk
outside the nightclub. Cf Buchler, 316 Or at 511 (evidence
of generic fact that criminals commit crimes insufficient to
establish foreseeability).

Moreover, the type of harm that befell Delgado gen-
erally corresponded to the risk of violent assault to patrons
of the Zone in Delgado’s position that was reasonably

Po 87

foreseeable to defendants. Cf Chapman, 358 Or at 219-22
(evidence involving violence by or among visibly intoxicated
patrons on premises at other bars did not support inference
that it was reasonably foreseeable that defendant tavern’s
well-behaved but visibly intoxicated patron would leave tav-
ern premises and unintentionally shoot victims at differ-
ent location). As our prior decisions teach, it is the general
nature of the harm at risk, not the precise nature of the
harm suffered by a particular victim, that controls the analy-
sis.° Plaintiffs allegations were sufficient to withstand
defendants’ motion to dismiss.

The dissent’s disagreement with our conclusion
requires some discussion but, in the end, it presents similar
arguments to those of the dissent in the Court of Appeals.

The dissent’s most insistent disagreement with our
ultimate conclusion is grounded in our characterization of
the risk of harm in this case as violent assault. The dissent
would describe the relevant risk more narrowly as “gang-,
drug-, and alcohol-related violence.” 360 Or at 105 (Balmer,

C. J., dissenting). According to the dissent, the relevant risk
in this case is defined in plaintiff's complaint “by the type of
criminal,” not “the type of crime.” Id. But, such narrow con-
ceptions of the relevant risk are not supported by our previ-
ous decisions, including those on which the dissent relies.

It is true that, in determining the appropriate level
of generality with which to characterize the risk of harm,
we “[d]raw[] on the plaintiff's theory of liability” and “view[]
the defendant’s conduct through the lens of the particular
factual circumstances of the case.” Chapman, 358 Or at 208.
However, as we also reiterated in Chapman, in the context
of the pertinent factual setting, we “describfe] the type of
harm at risk more generally, rather than predicting an
actual sequence of events.” Id. at 208-09. The problem with
the plaintiffs evidentiary proffer on summary judgment in

¥ Again, that is not to say that differences between past criminal acts com-
mitted at or near the Zone and the shooting in this case would not be relevant
to the issue of foreseeability as it relates to whether defendants’ conduct was
unreasonable in light of the risk of harm to patrons such as Delgado. That, as
previously noted, is a different matter.

88 1

Chapman was that it relied on “common knowledge” that
intoxicated tavern patrons engage in violence, an assertion
for which there was no factual support in the record and
which did not square up with the plaintiff's pleaded theory
that the patron in that case unintentionally shot the plain-
tiffs. Id. at 220-21. In short, there was a failure of proof that
might have been remedied by the presentation of concrete
evidence that applied to the circumstances of the case. Id.
at 221. Although the dissent acknowledges, as it must, that
in assessing foreseeability, “we focus on generalized risks
of harm,” 360 Or at 100 (Balmer, C. J., dissenting), it never
fully comes to grips with that standard in appraising the
allegations of plaintiff's pleading: A “generalized” risk of
harm inherently connotes an assessment at a relatively
broad level of generality.

The dissent also disagrees with our characteriza-
tion of the relevant risk of harm at issue in Fazzolari. As the
dissent sees it, Fazzolari’s discussion of the foreseeability of
different kinds of assaults, in particular, its statement that
“a school’s responsibility for students’ safety against assault
is not limited to the risk of rape,” 303 Or at 21, must be
understood as focused on “the reasonableness of the school’s
precautions,” 360 Or at 107 (Balmer, C.J., dissenting),
rather than on foreseeabilty as a limit on a defendant's lia-
bility. We do not share the dissent’s reading of Fazzolari.
When the quoted statement from Fazzolari is read in con-
text, it is apparent that the court was discussing foresee-
ability as it relates to the risk of harm. Before making that
statement, the court discussed the “issue of foreseeability
*** [and whether] no reasonable factfinder could find the
attack on [the] plaintiff to have been a foreseeable risk.” 303
Or at 21. The court then referred to the “generalized risks
of the types of incidents and injuries” discussed in Stewart.
Fazzolari, 303 Or at 21. Applying that concept to the facts of
the case, the court noted the evidence of the sexual assault
on school grounds 15 days before the attack on plaintiff and
that the plaintiff had attempted to introduce evidence of
various other kinds of attacks. Jd. The court then stated:

“Obviously a school’s responsibility for students’ safety

against assault is not limited to the risk of rape, and evi-
dence of foreseeability will differ depending on whether the

Po 89

risk of injury is claimed to be specific to a school, or schools
generally, or a neighborhood, or a class of potential victims
such as women or particular ethnic groups.”

Id. Only after discussing the foreseeability of the risk of harm
did the court refer, as an additional point, to foreseeability
as a measure of the defendant’s unreasonable conduct:

“Also, the character and probability of the risk that is
claimed to be foreseeable bears on the steps administrators
reasonably should take to avert it.”

Id. at 21-22. In any event, that reference does nothing to
diminish the fact that, as the court held, the proper level
of generality with which to view the risk of harm under
the plaintiff's theory of liability in Fazzolari was the risk of
assault in general, not a particular type of assault. Id.

And, that was no aberration. As early as Danner v.
Arnsberg et al, 227 Or 420, 362 P2d 758 (1961), this court
held that, if a plaintiff's injury was “of the same general
character” as an injury that could be anticipated, the injury
was not necessarily unforeseeable. Id. at 427-28. In Stewart,
we noted that “liability is confined to harms *** that are
of the general kind to be anticipated from the [allegedly
tortious] conduct.” 255 Or at 608-09 (quoting Harper &
James, The Law of Torts Introduction xl (1956) (emphasis
and brackets added)). Fazzolari adopted the same stan-
dard. 303 Or at 21. In short, the question is whether, in
the factual setting of the case, the harm suffered by the
plaintiff is of the same general kind to be anticipated from
the defendants’ allegedly negligent conduct. Nothing that
we have said since Fazzolari has altered that fundamental
construct.

As that principle applies here, the fact that the
history of violent assaults at and in the neighborhood
surrounding the Zone included gang-, alcohol-, and drug-
related conduct, and shootings, as well as other forms of
physical violence, is not dispositive of the foreseeability
inquiry.” The facts that plaintiff alleged, if proved, would

* We note that, rather than give plaintiff's pleading the benefit of all reason-
able inferences in its foreseeability analysis, the dissent has failed to give appro-
priate weight to several relevant historical facts alleged in plaintiff's pleading,
including the 2005 series of shootings in the Downtown Entertainment District,

90 Le

permit a determination that the location at which Delgado
was attacked—because it attracted party-going young peo-
ple at night—attracted violent assault in various forms. As
plaintiff alleged, the shooter was drawn to that location
precisely because he expected to find partying teens at that
location and time. To call the attack random, senseless, or
mass does not advance the analysis very far. The shooting
in this case was random in the sense that the shooter could
have picked other locations to find teen victims, but it was
no more random than attacks in the area that were the
product of gang-related violence, to the extent that gang vio-
lence involves members of one gang targeting another gang
at a location where that gang might be found.* Reasonable
minds can and do differ as to whether, in light of the history
of violent assaults at the Zone and in the surrounding neigh-
borhood, the attack on Delgado was reasonably foreseeable.”

In a different argument, the dissent asserts that,
in concluding that plaintiff has sufficiently stated a claim
with respect to foreseeability, we have mistakenly failed

the “history of fights and assaults in the line outside” the Zone, and the more
general allegation that “shooting, stabbings, felonious assaults, drug violations,
and/or murders are commonplace” in underage nightclubs. See 360 Or at 103-05
(Balmer, C. J., dissenting). Moreover, contrary to the dissent’s apparent assump-
tion, id. at 105, and, giving, as we must, plaintiff's pleading the requisite benefit
of all reasonable inferences, there is no indication that all those incidents involved
drug-, alcohol-, and/or gang-related violence, nor is there an indication that the
2002 shooting at the crowd outside the predecessor of the Zone was related to
gangs, drugs, or alcohol.
¥ Here, the shooting was intentional—just like a gang- or drug-related
shooting would be—and it occurred in a high-crime area with a history and rep-
utation for violence. The risk of violent assault that those circumstances created
included an intentional shooting that may leave incidental, unintended victims.
Gang members and drug dealers do not always aim with precision. In that sense,
the type of shooting in this case is not too different from the “mass murder” sce-
nario that the dissent implies.
© The Court of Appeals put the matter well when it stated:
“Whether the circumstances of a particular assault—such as the shoot-
er’s motive or mental state, the intended victim, or the weapon used—are
‘details, or instead serve to make the crime qualitatively different from other
foreseeable harms, will vary from case to case. Based on the facts alleged
in plaintiff's complaint, a reasonable juror could conclude that this type of
assault—a gunman firing at patrons waiting in line to enter [t]he Zone—fell
within the category of risks that the Zone defendants should have antici-
pated, regardless of the shooter's particular motive, mental state, intended
targets, or weapon used.”

Piazza, 271 Or App at 511-12.

Po 91

to distinguish between “the manner of harm” and the
“end result.” 360 Or at 108-13 (Balmer, C. J., dissenting).
According to the dissent, our characterization of the harm
risked as “violent assault,” is an “end result,’ upon which
we focus to a fault, while “ignoring the manner in which
the harm occurred.” Id. at 108. In making that argument,
the dissent relies on several decisions of this court, but that
reliance is misplaced.”

Hefty v. Comprehensive Care Corporation, 307 Or
247, 766 P2d 1026 (1988), illustrates the type of “extreme
case” that is beyond the general rule of foreseeable harm.
In that case, K, a teenager, was voluntarily admitted to
the defendant’s Adolescent Care Unit for the treatment of
alcoholism. Jd. at 250. Six days after she was admitted, she

% The dissent also relies on cases from other jurisdictions. As the dis-
sent notes, 360 Or at 111-12 (Balmer, C. J., dissenting), the Seventh Circuit in
Shadday v. Omni Hotels Management Corp., 477 F3d 611, 517 (7th Cix 2007),
limited the defendant's liability for criminal conduct in that case under District
of Columbia law to circumstances “when it has some reason to think such crime
likely.” Similarly, in Commonwealth v. Peterson, 286 Va 349, 749 SE2d 307 (2013),
relied on by the dissent, 360 Or at 102 n 2 (Balmer, C. J., dissenting), the court
followed the Virginia rule providing, unlike Oregon law, that

“qwhere the special relationship was that of business owner/invitee or landlord/
tenant, we have imposed a duty to warn of third party criminal acts only
where there was an imminent probability of injury from a third party crim-
inal act.” :

Peterson, 286 Va at 357, 749 SE2d at 812 (internal quotation marks and citation
omitted; emphasis added). Because this court has never required that an injury
be probable, let alone imminently probable, in order to satisfy the foreseeability
requirement, those authorities are simply inapplicable here. Moreover, although
itis unnecessary to pursue the matter in detail, as two commentators have noted,
there is much room to question the reasoning of Shadday, in particular:

“The idea that a hotel owes no duty to its guests to take steps to protect them
from other guests is quite untenable. Imagine that a hotel installed low-
grade electronic locks that enabled guests easily to use their own room keys
to open other guest’s rooms. If a guest were to take advantage of this inad-
equate security system to break into the room of another guest and attack
the other, the victim’s claim that the hotel failed in a basic responsibility to
provide security would be quite compelling. This would be a failure to provide
the security that a guest reasonably expects from a hotel and that a hotel
implicitly promises to its guests. The duty Shadday was owed was a duty
to take ordinary care against her being attacked on the premises. Parsing
that risk into the risk of attack by intruders versus guests is arbitrary and
unmotivated.”

John C. P, Goldberg & Benjamin C. Zipursky, Civil Recourse Defended: A Reply

to Posner Calabresi, Rustad, Chamallas, and Robinette, 88 Ind LJ 569, 588-89
(2013).

92 Ld

left the facility against the medical advice of the unit. Id.
Neither K nor the hospital notified her parents that she had
left. Id. While riding as a passenger on a friend’s motorcy-
cle, she sustained severe head injuries in an accident with
an automobile. Jd. at 251. Neither drugs nor alcohol was a
factor in the collision. Id.

Importantly, the court stated:

“The risk to be foreseen was not that [K] would ride on
the back of a motorcycle and be injured in a collision with
an automobile. *** The risk to be foreseen was more
general—it encompassed those generalized incidents and
injuries created by discharging [K], an impaired minor
addicted to alcohol, without notice to parents or police,
without the permission of her doctor, without providing
alternative care, and with the knowledge that [K] could
not care for herself.”

Id. at 252 (citation omitted).

As pertinent here, Hefty stands for the proposition
that the risk of harm to be foreseen must be described more
generally than the dissent would describe it. Instead of
describing the risk of harm to be foreseen narrowly as the
risk that the daughter “would ride on a motorcycle and be
injured in a collision with an automobile,” the court carefully
tied the risk to be foreseen to the more general risk encom-
passed by the “generalized incidents and injuries created
by” the defendant’s unreasonable conduct. Id. Ultimately,
the court held that, because neither alcohol nor drugs had
been involved in the accident—that is, because the con-
nection between the defendant’s negligent conduct and the
harm that the plaintiff suffered was too attenuated—no
reasonable trier of fact could find that K’s injuries fell within
the scope of the foreseeable risk posed by the discharge. Id.
at 252-53.

The dissent also relies on Oregon Steel Mills. In
that case, there was no causal relationship between the
defendant’s conduct (negligently preparing an accounting
report) and the “force” that inflicted harm on the plaintiff
(a declining stock market); the stock market did not take
notice of the defendant’s negligence and use the opportunity
to decline. Oregon Steel Mills, 336 Or at 345. The two events

pT 93

occurred in a temporal relationship to each other that were
completely coincidental.

This court in Oregon Steel Mills took pains to
describe the problem for the plaintiff as lack of foreseeabil-
ity, not causation in fact. See id. at 344. However, the court
focused on the lack of a causal nexus between the defen-
dants’ conduct and the market forces that led to the price
decline that harmed the plaintiff, when it ultimately con-
cluded that “the intervening action of market forces on the
price of plaintiff's stock was the ‘harm-producing force, and
defendant’s actions did not ‘cause’ the decline in the stock
price so as to support liability for that decline.” Id. at 345
(emphasis added). That is another way of saying, as in
Buchler, that the defendant’s conduct merely facilitated the
harm ultimately suffered by the plaintiff. See Buchler, 316
Or at 511-12 (“[Mlere ‘facilitation’ of an unintended adverse
result, where intervening intentional criminality of another
person is the harm-producing force, does not cause the harm
so as to support liability for it.”).

But, here, the relationship between defendants’
conduct and the harm inflicted on Delgado is qualitatively
different from the relationships in Hefty and Oregon Steel
Mills that this court deemed to be too attenuated." Here, in
contrast to the circumstances in those cases, as alleged in
plaintiff's complaint, the assailant’s access to Delgado and
the other teens outside the Zone was directly connected to
the Zone defendants’ asserted negligence in failing to provide
adequate security against violent assault for patrons lined
up on the sidewalk. To the extent that the dissent’s “man-
ner of harm/end result” argument more narrowly describes
the pertinent risks of harm as “gang-, drug-, and alcohol-
related violence,” 360 Or at 108 (Balmer, C. J., dissenting),
it is bound up in the dissent’s conception of the appropriate
level of generality with which to describe the presenting risk
of harm, a conception that we do not share.

Finally, the dissent argues that we have not ade-
quately explained our conclusion that plaintiff’s complaint

* As we later explained, Oregon Steel Mills “turned on the specific facts
before the court.” Bailey, 343 Or at 289-90.

94 Ld

sufficiently alleged foreseeability. Although the dissent may
not be satisfied, the analysis cannot be reduced to the appli-
cation of Euclidean-like postulates. That is because, as pre-
viously explained, foreseeability in the pertinent sense ulti-
mately is a blended factual and normative inquiry. Because
reasonable foreseeability invokes a community’s application.
of its own values, whether a particular outcome of conduct
is foreseeable is most appropriately decided by the commu-
nity’s closest proxy in our civil justice system, that is, by a
jury. Exceptions exist only for harm resulting from “the con-
catenation of highly unusual circumstances.” Stewart, 255
Or at 609. Fazzolari reiterated that standard: “[T]he issue
ordinarily can be left to the jury,” except for conduct “at the
outer margins.” 303 Or at 12.” In an earlier case, Justice
O’Connell put it this way:

“In any case where there might be reasonable difference of
opinion as to the foreseeability of a particular risk, the rea-
sonableness of the defendant’s conduct with respect to it,
or the normal character of an intervening cause, the ques-
tion is for the jury, subject of course to suitable instructions
from the court as to the legal conclusion to be drawn as the
issue is determined either way.”

Dewey, 233 Or at 536 (O’Connell, J., concurring) (quoting
William L. Prosser, Handbook of the Law of Torts 282 (2d
ed 1955)).

Precisely because it is driven by community values,
judges have no upper hand over juries in the inquiry, except
to act as gatekeepers at the outer margins.”? With that

% The dissent misunderstands our reasoning in asserting that, “[iJn effect,
the majority concludes that an assailant’s methods and motivations are irrel-
evant to the foreseeability analysis.” 360 Or at 108 (Balmer, C. J., dissenting).
To the contrary, those factors are relevant to the analysis, but we do not share
the dissent’s view that they are so conclusive in this case as to preclude a jury
determination that the harm that befell Delgado was reasonably foreseeable to
defendants.

25 Ina thoughtful discussion of the underpinnings of the allocation of respon-
sibility between judge and jury in foreseeability determinations, one commenta-
tor has stated:

“The genius of the jury is that it brings to each case multiple perspectives,

both shared and diverse experiences, and (with the exception of the occa-

sional attorney-juror) a legal tabula rasa. To put it simply—especially
when considering a question like foreseeability that is part-analysis,

Pe 95

limited role in view, what we have here is not a suburban
mall in daylight hours or some other workaday public place
where people ordinarily go about their routines with only a
remote consciousness of the risk of a violent attack. Instead,
as alleged in plaintiffs complaint, the scene of this shooting
was an inadequately secured sidewalk queue where teen-
agers were waiting to enter a nightclub, late in the evening,
in a high-crime urban neighborhood that, based on publi-
cized past experience, posed a risk of violent harm to persons
present. The harm that befell Delgado, although thankfully
uncommon, was within the range of risks of harms that a
reasonable factfinder could find was reasonably foreseeable
in the circumstances alleged in plaintiffs complaint.

The decision of the Court of Appeals is affirmed.
The judgment of the circuit court is reversed, and the case
is remanded to the circuit court for further proceedings.

BALMER, C. J., dissenting.

A reader of the majority opinion would be forgiven
for thinking that the death of plaintiff's decedent was the
tragic result of the kind of gang-, drug-, or alcohol-related
violence that plaintiff alleges to be common in the neighbor-
hood around the Zone nightclub. But that is not what hap-
pened here, and plaintiff does not allege otherwise. Instead,
decedent was shot during an attempted mass murder by a
violent schizophrenic assailant, Ayala, who opened fire sim-
ply because he was intent on killing teenagers. Plaintiff does
not allege that Ayala was a gang member, a drug dealer, or
a club-goer or had any other foreseeable connection to the
Zone or the Zone’s neighborhood.

The majority opinion, nevertheless, concludes that
plaintiff's allegations of gang-, drug-, or alcohol-related vio-
lence could establish that the shooting incident in this case
was foreseeable because both the alleged neighborhood vio-
lence and the shooting at issue here are types of “violent

part-community experience, and part-gestalt—perhaps twelve heads are
better than one.”
W. Jonathan Cardi, Purging Foreseeability: The New Vision of Duty and Judicial
Power in the Proposed Restatement (Third) of Torts, 58 Vand L Rev 739, 800
(2005) (footnote omitted).

96 Ld

assaults.” 360 Or at 83. But the majority fails to explain why
that similarity matters. Contrary to the majority’s analy-
sis, it does not follow as a matter of law or as a matter of
logic that, simply because some types of violent assault are
foreseeable, therefore all types of violent assault are fore-
seeable. I would limit the types of foreseeable risks in this
case to those that plaintiff has alleged to be present at the
time and place of the shooting—namely, gang-, drug-, and
alcohol-related violence, which might include some shooting
incidents but would exclude the shooting incident in this
case. Defining the foreseeable risks any more broadly than
that, as the majority does, goes beyond the risks that the
complaint alleges. For those reasons, I dissent.

The principal issue on review is whether plaintiff
has alleged facts that would allow a reasonable jury to con-
clude that the shooting incident underlying this negligence
case was a type of foreseeable risk created by defendants’
conduct. According to plaintiff, the Zone nightclub had a
history of violence, because a shooting happened there in
2002—seven years before the shooting incident here—and
because underage nightclubs are inherently dangerous, due
to the high proportion of young male patrons, high noise lev-
els, crowding, and “competitive situations.” Further, plaintiff
alleges that “assaults” occur regularly in the area around the
Zone because of gangs, drug dealing, and over-consumption
of alcohol. Those facts, plaintiff alleges, were known, or
should have been known, to defendants. As a result, plain-
tiff contends that a risk of violent assault was foreseeable.
Plaintiff concludes, therefore, that the Rotary defendants
were negligent for leaving the group of teenagers, including
decedent, at the Zone, and that the Zone defendants were
negligent for asking patrons to form a line outside the club
and failing to provide more and better security.

Plaintiff's allegations are unquestionably thin and.
bear little relationship to the unprovoked shooting in this
case. That is particularly true with regard to the Rotary
defendants. Plaintiff alleges only that the Rotary defen-
dants “knew, or in the exercise of reasonable care, should
have known, about the dangers of leaving plaintiff's dece-
dent in the Zone nightclub on the date and time in ques-
tion.” Although “the fact that the defendant was aware of a

Po 97

particular risk” is usually a factual allegation rather than
a legal conclusion, Moore v. Willis, 307 Or 254, 259, 767 P2d
62 (1988), it is not clear to me that plaintiff's allegation of
“danger” is an allegation of a particular risk. And although
plaintiff alleges that “instances of violence that occurred
nationally at underage nightclubs and locally in the area
around the Zone nightclub were all publicized in local and/or
national media,” plaintiff does not allege that the Rotary
defendants were aware of those “local and/or national” news
reports, nor any reason why the Rotary defendants—or their
alleged agents, decedent’s host family in White Salmon,
Washington—should have been aware of those reports.
Reports of violence are commonplace. Local and national
media are so saturated with crime stories that an ordinary
person cannot be expected to take note of all violent acts
wherever they might travel and account for them in assess-
ing the risks of engaging in daily life. Foresight of that kind
would demand “a paranoid view of the universe,” and that
is not what the legal standard of foreseeability requires.
Fazzolari v. Portland School Dist. No. 1J, 303 Or 1, 21, 734
P2d 1326 (1987).

Nevertheless, I do not believe that that issue needs
to be resolved because, even assuming that the Rotary
defendants had the same knowledge as the Zone defendants,
those allegations are insufficient to establish that the shoot-
ing incident underlying this case was foreseeable. We gener-
ally make that determination by comparing the harm that
a plaintiff suffered to the general types of risks foreseeably
created by a defendant’s conduct. Jd. at 17 (describing the
standards of foreseeability). The trial court ruled that plain-
tiff’s allegations, even if true, could not establish that the
shooting incident was foreseeable and therefore dismissed
plaintiffs second amended complaint under ORCP 21 A(8)
for failing to state ultimate facts supporting her negligence
claim against both the Zone defendants and the Rotary
defendants.

When reviewing a trial court’s ruling dismissing a
plaintiffs complaint under ORCP 21 A(8), we assume, like
the trial court, that the facts alleged in the complaint are
true, and we draw all reasonable inferences in the plaintiff's
favor. Bailey v. Lewis Farm, Inc., 343 Or 276, 278, 171 P3d

98 Ld

336 (2007). The majority agrees that, when assessing the
sufficiency of a plaintiff's allegations to state a claim, it is
the court’s role to “determine whether upon the facts alleged
*** no reasonable factfinder could decide one or more ele-
ments of liability?” Chapman v. Mayfield, 358 Or 196, 205,
361 P3d 566 (2015) (quoting Fazzolari, 303 Or at 17).

Foreseeability is central to establishing the elements
of a negligence claim. A defendant may be subject to liability
for negligence only if the defendant’s conduct “unreasonably
created a foreseeable risk *** of the kind of harm that befell
the plaintiff.” Fazzolari, 303 Or at 17. Therefore, a plain-
tiff fails to state a negligence claim if the plaintiff fails to
allege facts that would allow a reasonable jury to find that
the plaintiff was harmed by a foreseeable risk created by
the defendant’s unreasonable conduct. Solberg v. Johnson,
806 Or 484, 490-91, 760 P2d 867 (1988) (stating that the
elements of a negligence claim include “that defendant’s con-
duct caused a foreseeable risk of harm, *** that defendant’s
conduct was unreasonable in light of the risk, [and] *** that
plaintiff was within the class of persons and plaintiff’s injury

was within the general type of potential incidents and inju-
ries that made defendant’s conduct negligent”).

As a result, defining the scope of foreseeable risks
has important implications for tort law generally and par-
ticularly when liability will be imposed for negligent con-
duct. A risk is foreseeable if a reasonable person would
have “reasonably expected the injury to occur.” Stewart v.
Jefferson Plywood Co., 255 Or 603, 609, 469 P2d 783 (1970).
If the scope of foreseeable risks is described more broadly,
then that necessarily means that an actor should expect his
or her conduct to lead to more or greater harms. A more
broadly defined risk makes it easier to establish both that a
defendant’s conduct is unreasonable (because the probability
and severity of foreseeable harms are factors in determin-
ing reasonableness) and that a plaintiffs harm falls within
the risks created by the defendant’s unreasonable conduct
(because the risk encompasses more harms). The opposite is
true when the foreseeable risks are defined narrowly.

Although foreseeability is a component of both the
reasonableness determination and the harm-within-the-risk

Po 99

determination, defendants do not challenge the sufficiency
of plaintiffs allegations to establish that defendants’ con-
duct was unreasonable. Thus, for the sake of reviewing the
trial court’s dismissal order, we assume that the Rotary
defendants should not have taken the teenagers to the Zone.
And we assume that the Zone defendants should not have
required patrons to form a line and should have provided
more and better security.

Instead of challenging the reasonable-conduct ele-
ment of plaintiffs negligence claims, defendants challenge
plaintiffs pleading of the element requiring that decedent’s
harm was within the foreseeable risks created or increased
by defendants’ conduct. See, e.g., Chapman, 358 Or at 206
(considering “whether plaintiffs’ injuries were within the
type of potential harms that made defendant’s conduct
unreasonable”; affirming summary judgment for defendant);
Bailey, 343 Or at 281 (reversing dismissal where “[t]he type
of harm that plaintiff suffered fell squarely within the scope
of the risk that defendant’s negligence created”). That ele-
ment identifies the legal limit of liability for negligently
caused harms—that is, the point at which we will not hold
a defendant liable for harms, even if the defendant acted
unreasonably and even if the defendant’s conduct was a
but-for (or substantial-factor) cause of the injury. See, eg.,
Stewart, 255 Or at 607 (noting defendant’s negligence and
causation but attempting to “draw[] the line at which the
defendant's liability ends”).

As it relates to that element, overly broad and overly
narrow categories of risk distort the limits of liability:

“It has been observed that ‘if we use a very generalized
description of the type of harm that was foreseeable and of
the type of harm that occurred, an answer that the result
was within the risk is inevitable’ And on the other hand,
‘@f we use a detailed, mechanism-of-harm description of
the result and the risks, the answer will be negative.”

¥ See Restatement (Third) of Torts: Phys. & Emot. Harm § 29 (2010) (“An actor
is not liable for harm different from the harms whose risks made the actor’s con-
duct tortious.”); id. § 80 (“An actor is not liable for harm when the tortious aspect
of the actor’s conduct was of a type that does not generally increase the risk of
that harm.”),

100 Ld

Id. at 610 (quoting Robert E. Keeton, Legal Cause in the Law
of Torts, 51 (1963)) (footnotes omitted); see also Chapman,
358 Or at 208 (same) (citing Stewart, 255 Or at 610). Risks
should not be defined so narrowly as to require the defendant
to foresee the precise sequence of events, as they unfolded,
that lead to the particular plaintiff’s particular injury. See
Fazzolari, 303 Or at 21 (so stating). Instead, we focus on gen-
eralized risks of harm. Id. at 13 (citing Stewart, 255 Or at
610-11). My disagreement with the majority, therefore, is not
whether courts should use “generalized” descriptions of risk;
our cases correctly require us to do so. My disagreement,
rather, is over how broadly to define the generalized risks
that we use in this case. As Stewart itself recognized, a gen-
eralized risk of harm may be defined in terms that are too
general. Stewart, 255 Or at 610. Because liability is intended
to track community standards for blameworthiness, risks
must be characterized with sufficient particularity to dis-
tinguish between conduct that is blameworthy and conduct
that is not. Id. at 608-09 (so stating). Risks that are defined
too broadly—where a finding of foreseeability is “inevitable,”
id. at 610 (internal quotation marks and citation omitted) —
cannot serve as a meaningful limit on the scope of liability.
See Fazzolari, 303 Or at 21 (so stating).

There is no single standard for determining the
appropriate level of generality for defining risks. Last
year, in Chapman, this court emphasized the importance
of appropriately identifying how generally to define risks.
858 Or at 208. To do so, “this court’s practice in cases that
address foreseeability as a limit on liability” has been to
“[d]raw[] on the plaintiff's theory of liability” and to “view[]
the defendant’s conduct through the lens of the particular
factual circumstances of the case—with emphasis on what
the defendant knew or should have known about the risk of
harm.” Id.

For example, in Stewart, the court addressed the
appropriate level of generality for defining the foreseeable
risks created by negligent welding operations. In that case,
there was no question that the defendant’s unreasonable con-
duct started a fire that spread to a neighboring warehouse.
Stewart, 255 Or at 605. While attempting to prevent further
fire damage on the roof of that warehouse, the plaintiff fell

Po 101

through a covered skylight, hit the floor, and suffered vari-
ous injuries. Id. Thus, there was also no question that defen-
dant’s conduct was a factual cause of the plaintiff’s injury.
But the court noted that establishing that the defendant’s
unreasonable conduct caused the plaintiff's injury is not suf-
ficient to establish liability, because a defendant is not liable
for all injuries caused by his or her unreasonable conduct.
Id. at 606. Instead, a defendant is subject to liability only for
injuries that can be “anticipated.” Id. at 609.

The court concluded that the plaintiff's injury could
be anticipated because a reasonable person would know that
firefighters “might be injured as a result of a variety of possi-
ble cireumstances—by being burned, by falling off a ladder,
by falling off a roof, by falling through a burned portion of
the roof, or by other similar risks normally associated with
fighting fires.” Id. at 610. Although falling through a covered
skylight might not immediately come to mind as a potential
harm, it was foreseeable because it was within the types of
risks that a reasonable person would reasonably expect a
firefighter to encounter. Id.

The plaintiff's theory and supporting evidence were
related to firefighting, so the risk of harm was defined in
reference to firefighting. Based on that theory and that evi-
dence, it would have been inappropriate, for example, to
define the risk as being “falling through covered skylights.”
That risk would have been too narrow because it would
have required the plaintiff to establish that defendant had
specific knowledge that the skylight was covered. That risk
would have also been too broad because it would encompass
risks outside the plaintiff’s theory of liability and the evi-
dence offered. Hypothetically, bystanders might have gone
to the roof of a warehouse upwind from the fire simply to
watch the activity. If a bystander on that warehouse fell
through a covered skylight, the defendant’s negligent con-
duct still might have been a factual cause of the resulting
injuries. But the foreseeability of that injury could not have
been established through evidence of the risks encountered.
by firefighters.

In this case, plaintiff attempts to establish that
the shooting incident was foreseeable based on defendants’

102 Ld

knowledge of prior criminal acts at or around the Zone.
As noted above, we assume that defendants’ conduct was
unreasonable, and, therefore, we assume that they had
knowledge of prior criminal acts at or around the Zone that
would cause them to be aware of some continuing risk of
further criminal acts. The question is whether the shooting
incident in this case was among the criminal acts that a rea-
sonable person would foresee based on those prior criminal
acts allegedly known to defendants.

Answering that question requires comparing those
prior criminal acts to the shooting incident in this case.
The majority identifies a number of factors relevant to that
comparison—namely, the degree of similarity, frequency,
recency, and geographic proximity between the plaintiff's
harm and the prior criminal acts alleged by the plaintiff.
860 Or at 81. And, as the majority notes, similarity may be
based on the nature of the criminal act itself, or it may be
based on other considerations, such as the circumstances of
the offense or the specific types of victims.

Thus, a generalized risk does not need to be defined
so broadly as to capture all of the prior criminal acts that a
plaintiff has alleged. Instead, the risk is based only on those
prior criminal acts that indicate a continuing risk of injury
at the time and place of a defendant’s allegedly negligent
conduct and a plaintiffs resulting harm. In other words,
the foreseeability of a plaintiffs injury cannot be based on
prior criminal acts that are too dissimilar, are too remote
in time or place, or otherwise fail to indicate a continuing
risk at the relevant time and place.” Prior criminal acts that
are dissimilar to the criminal act that caused the plaintiff's
injury might have signaled a continuing risk of some other
type of harm, but not the risk of harm that the plaintiff suf-
fered. And prior criminal acts that are too remote in time

2 In certain circumstances, prior criminal acts may no longer indicate a con-
tinuing risk, even if the prior criminal acts are close in time and place to the
plaintiff's injury. In Commonwealth v. Peterson, 286 Va 349, 749 SE2d 307 (2018),
for example, the Virginia Supreme Court held that knowledge that two university
students were shot and killed on campus did not establish the foreseeability of
amass shooting by the same assailant hours later, which lead to the deaths of
32 people. At the time the mass shooting began, defendants reasonably believed
that the earlier shooting was a domestic incident and that “the shooter had fled
the area and posed no danger to others. Id. at 359.

p___| 103

and place might have signaled a continuing risk of harm at
some other time or some other place, but not at the time and
place of the plaintiff's injury. What counts as dissimilar or
too remote will depend on the plaintiff's theory of liability
and factual allegations.

For example, in Fazzolari, a female student was
sexually assaulted on school grounds. 303 Or at 3. In assess-
ing the foreseeability of the sexual assault, the court noted
that there was evidence of a prior sexual assault on another
female at the same school only 15 days earlier. Id. at 21.
Although the court in Fazzolari did not expressly apply the
factors that the majority now identifies, that single prior
criminal act established recency, geographic proximity, and
similarity of the criminal act sufficient to allow the issue
to go to the jury. In considering evidence of “various other
kinds of attacks,” the court noted that “evidence of foresee-
ability will differ depending on whether the risk of injury is
claimed to be specific to a school, or schools generally, or a
neighborhood, or a class of potential victims such as women
or particular ethnic groups.” Id.

Similarly, we start by assessing decedent’s injury
in this case and then compare it to the prior criminal acts
allegedly known by defendants. According to plaintiff,
the shooting incident in this case occurred when Ayala
approached a group of teenagers waiting in line at night out-
side the Zone and opened fire with a semiautomatic handgun
with the intent to kill them. As pleaded, Ayala was a para-
noid schizophrenic who was motivated to commit the shoot-
ing by an irrational and hostile fixation with teenagers.*

The prior criminal acts alleged by plaintiff to be
known by defendants relate to the Zone itself and to the neigh-
borhood around the Zone. As it relates to the Zone, plaintiff
alleges that underage nightclubs are inherently danger-
ous because many patrons are young males in “competitive

® Defendants ask this court to take judicial notice of the fact that Ayala shot
a total of nine people, killing two—decedent and one other victim—and that
Ayala then fatally shot himself at the scene. It would have been more appropri-
ate for defendants to raise that issue in the first instance with the trial court.
Regardless, that issue is beyond the scope of this case because, for the reasons
described in the text, this court should affirm the trial court’s dismissal order
even if we do not take judicial notice of the facts that defendants offered.

104 Le

situations” and clubs are often noisy and crowded. But prior
incidents of teenage fights are plainly insufficient to cre-
ate a reasonable expectation of an unprovoked shooting.
Further, plaintiff relies on a shooting in 2002 that injured
three people outside the location later occupied by the Zone.
Although that shooting is a similar criminal act in some
ways, it happened seven years before the shooting in this
case—nothing like the 15 days that separated the crimes in
Fazzolari. Because of that lack of recency, we cannot simply
assume that the causes of the 2002 shooting persisted and
continued to pose a risk of another shooting there in 2009.
And plaintiff alleges no additional facts that could establish
that the 2002 shooting created a reasonable expectation of a
shooting seven years later.

As it relates to the area around the Zone, plain-
tiff alleges that violent assaults occur regularly because of
gangs, drug dealing, and over-consumption of alcohol. To
substantiate that, plaintiff provides crime statistics from an
expansively drawn area, covering the entire Downtown and
Old Town/Chinatown neighborhoods. Plaintiff, however,
makes no allegations addressing the extent to which those
crimes actually happened near the Zone, affected Zone
patrons, or otherwise resembled the unprovoked shooting in
this case. In other words, in an attempt to establish recency
and frequency, plaintiff has stretched the bounds of similar-
ity and geographic proximity.

Nevertheless, the majority insists that a reasonable
jury would be allowed to conclude that defendants should
have foreseen a risk of “violent assault.” 360 Or at 83. The
majority does not further limit its characterization of that
foreseeable risk, which, therefore, covers all types of violent
assault. But the expansiveness of that risk proves that it
is untenably broad. A risk of “violent assault” would cover
nearly all types of violence, including the shooting incident
in this case, but also including sexual assaults, armed rob-
beries, bombings, and even acts of terrorism—each of which
is a type of violence that would not have been foreseeable
based on plaintiff’s allegations. If plaintiff had pleaded that
the shooting incident occurred in a war zone, then we might
expect a reasonable person to anticipate the wide range of
harms that fall within the category of “violent assaults.”

Po 105

But plaintiff's allegations are far more limited than that.
Consequently, the foreseeable risk that may be established
by plaintiff's allegations requires some limitation.

That limitation separates the types of violence
that could have been reasonably expected from the types
of violence that could not have been reasonably expected.
As explained above, many of plaintiffs allegations are too
remote to indicate a continuing risk at the time and place
of the shooting.’ Focusing only on plaintiff’s allegations that
indicated a continuing risk of injury at the time and place of
the shooting, plaintiff's allegations could support, at most, a
conclusion that defendants should have foreseen some types
of violent assaults—namely, those types of violent assaults
that plaintiff alleged to be common in the neighborhood at
the time of the shooting: gang-, drug-, and alcohol-related
violence. Plaintiff's allegations of prior gang-, drug-, and
alcohol-related crimes indicated a foreseeable risk of harm
at the time of the shooting because, as alleged by plaintiff,
gang-, drug-, and alcohol-related activity continued to per-
sist in the area around the Zone at that time.

The foreseeable risk in this case is defined by the
type of criminal—i.e., whether the criminals whose activi-
ties posed the allegedly foreseeable risks of harm are con-
nected to gang-, drug-, or alcohol-related activities—rather
than the type of crime, because plaintiff’s allegations pro-
vide no other grounds for defining the risk. There will likely
be many cases where the type of criminal will carry less
weight in the foreseeability analysis, such as cases where
the prior criminal conduct is more similar, recent, frequent,
and geographically proximate than those alleged by plain-
tiff. In those cases, it may be reasonable to infer that the
cause of the prior crimes persisted at the time and place of
the later crime. But, given the lack of similarity, recency, fre-
quency, and geographic proximity, that inference is not rea-
sonable based on plaintiff's factual allegations. See Delgado
v. Souders, 334 Or 122, 135, 46 P3d 729 (2002) (whether an
inference is reasonable is a question of law). Further, plain-
tiff makes no allegation that the Zone specifically attracted

4 The majority appropriately declines to give weight to all of plaintiff's alle-
gations. 360 Or at 82; id. at 82n 13.

106 Lt

people wanting to commit unprovoked shootings or people
directing violence at teenage victims. Although the majority
notes that Ayala targeted the Zone because he sought out
teenage victims, 360 Or at 82, 89-90, plaintiff does not allege
that Ayala’s intention to shoot teenage victims was known
to defendants prior to the shooting incident and, therefore,
cannot provide grounds for establishing foreseeability.

Once the risk posed by the alleged prior criminal
acts is properly defined as gang-, drug-, and alcohol-related
violence, it is apparent that decedent’s harm was not within
the foreseeable risk: Plaintiff makes no allegation that
Ayala was involved in gang-, drug-, or alcohol-related activ-
ities or had any connection to gang members, drug dealers,
or club-goers in the neighborhood. Further, eliminating
the risk of gang-, drug-, and alcohol-related activity in the
area around the Zone would have had no effect on the like-
lihood of the shooting incident in this case, plainly estab-
lishing that the risks are distinct. To be sure, gang-, drug-,
and alcohol-related violence are themselves broadly defined
and generalized risks of harm. But to define the foreseeable
risks more broadly than that would improperly divorce the
risk of harm from plaintiff’s theory of liability and from the
factual circumstances alleged by plaintiff to be known to
defendants.

In reaching its conclusion that all violent assaults
in the geographic area that plaintiff identified were foresee-
able, the majority fails to consider the similarity, recency,
frequency, and geographic proximity of the prior criminal
acts. Instead, the majority’s analysis appears to first go off
track by reading more into our prior cases than those cases
can support. According to the majority, “This court’s pre-
vious decisions generally prescribe a relatively broad level
of generality in assessing the reasonable foreseeability of
criminal conduct as a limit on liability.” 360 Or at 83 (citing
Fazzolari, 303 Or at 21).

The problem is that, as noted above, when this
court most recently addressed the process for defining the
foreseeable risks, that process did not “prescribe a rela-
tively broad level of generality,” as the majority now asserts.
360 Or at 83. Instead, after reviewing the same case law

Po 107

that the majority reviews in this case, we concluded that
the process for appropriately identifying how generally to
define the risks requires critically assessing the connection
between plaintiff’s theory of liability and the facts alleged to
be within defendants’ knowledge. Chapman, 358 Or at 208.
As a result, our prior cases in fact do not exhibit a prefer-
ence for either a broad or narrow level of generality. Rather,
the appropriate level of generality turns on plaintiffs the-
ory of liability and the facts alleged to be within defendants’
knowledge. Whether‘a different theory of liability and dif.
ferent facts alleged in a different case supported a broad
level of generality is immaterial.

_ In any event, I do not share the majority’s read-
ing of Fazzolari as prescribing that all types of assaults be
treated as one category of foreseeable risks. That decision
never defines an appropriate level of generality. Although
Fazzolari states that “a school’s responsibility for students’
safety against assault is not limited to the risk of rape,”
308 Or at 21, that statement goes to assessing the reason-
ableness of the school’s precautions. The more foreseeable
assaults that might be prevented through a particular
safety precaution, the more likely that it was unreasonable
for the school not to take that precaution. As the court noted
earlier in its opinion in Fazzolari, “[I]t is important that all
foreseeable risks of harm to other classes of persons be con-
sidered in evaluating the reasonableness or unreasonable-
ness of defendant’s conduct.” Id. at 14. But simply because
all foreseeable assaults should be considered when determin-
ing whether conduct is reasonable does not mean that all
assaults are foreseeable.

The majority attempts to justify the broad level
of generality by explaining that location-based risks are
uniquely suited to broadly defined foreseeable risks. The
majority insists that it is appropriate to use a broad level of
generality

“where, as here, the risk of harm at a particular location
is at issue. See, e.g., Uihlein, 282 Or at 641 (‘[T]here must
be something to alert the storekeeper to the likelihood of
harm of some kind from a criminal agency.’). That only
makes sense. When a business owner is on notice that—in

108 Le

the absence of reasonable precautions—assaultive conduct
can be anticipated where people are waiting in line to enter
its premises, it rings hollow to suggest that a specific crime
pattern triggers the owner’s duty to protect patrons only
with regard to those specific crimes (such as gang-related.
homicide) that have occurred.”

360 Or at 83. But there is no question that a business owner
must take reasonable precautions to protect invitees from
assaultive conduct reasonably expected to occur. The ques-
tion is whether the harm that decedent suffered was among
those types of assaultive conduct that defendants should
have reasonably expected to occur.

In answering that question, the majority refuses to
distinguish between criminal conduct based on the charac-
teristics of the shooter:

“To the extent that [defendants’] challenge focuses on the
precise sequence of events that occurred in this case, defen-
dants invite a taxing level of comparison that this court
consistently has rejected. As noted, contrary to defendant’s
focus, foreseeability has reference to ‘the generalized risk
of the types of incidents and injuries that occurred rather
than the predictability of the actual sequence of events.’
See Fazzolari, 303 Or at 18 (discussing Stewart).”

360 Or at 81-82. In effect, the majority concludes that an
assailant’s methods and motivations are irrelevant to the
foreseeability analysis. But, as described above, plaintiff's
allegations make them relevant here because only gang-,
drug-, and alcohol-related crimes could have given rise to a
reasonable expectation of injury at the time and place of the
shooting.

From the majority's perspective, that does not matter
because gang-, drug-, and alcohol-related violence entailed a
risk of a violent assault and a violent assault happened. But,
although we do not require plaintiffs to allege or adduce
facts establishing that the precise sequence of events was
foreseeable, we also do not focus only on the end result—e.g.,
a violent assault—while ignoring the manner in which the
harm occurred. A foreseeable risk cannot be defined without
connecting the end result to the reasons that the risk was
foreseeable in the first place. Therefore, “identical injuries,

Po 109

if they occur in different ways or at different times, may be
treated differently.” Restatement (Third) of Torts: Phys. &
Emot. Harm § 29 comment d (2010).°

That principle is well-established in our case law.
For example, in Hefty v. Comprehensive Care Corporation,
307 Or 247, 766 P2d 1026 (1988), the plaintiffs were a minor
who had been a patient at the defendant’s alcohol treatment
center as well as her parents. Jd. at 250. The defendant pre-
maturely discharged the minor, who was still suffering from
alcoholism, without notifying her parents or doctor or other-
wise providing alternative arrangements for her care. Id.
The day after the discharge, the minor was involved, as a
passenger, in a traffic accident that did not involve drugs or
alcohol. Id. at 251.

Plaintiffs sued the defendant for negligently dis-
charging the minor. The court resolved the case on foresee-
ability, asking whether the plaintiffs “injuries fell within
the scope of the ‘generalized risk of the types of incidents
and injuries’ created when defendant discharged [the plain-
tiff].” Id. The court appropriately identified two generalized
types of foreseeable risks created by the defendant’s con-
duct: (1) that the minor would “resume abusing alcohol and
drugs”; and (2) that the minor “would engage in activities
consistent with her impaired judgment and inability to con-
trol her behavior.” Id. at 252.

Notably, the court did not define the risk by the end
result—a traffic accident—even though it was at least plau-
sible that either of those risks could lead to a traffic acci-
dent. If, for example, the minor had been driving and was
under the influence of alcohol, then the accident might have

5 In Legal Cause in the Law of Torts, which this court relied on in Stewart,
255 Or at 610, Keeton expressly warned against ignoring the manner in which
the harm occurred:

“[Elxtreme freakishness of the sequence of events that produces a final state
of affairs that might have been expected to come about in some other way
commends itself as a relevant consideration and stands against a practice
of description of the harm in a way that wholly disregards the mechanism of
injury. The choice of description involves a degree of orientation toward type
of harm on the one hand or toward mechanism of harm on the other hand,
with neither point of view wholly rejected.”

Legal Cause in the Law of Torts at 52.

110 Ld

fallen within the scope of the risk that she would resume
abusing alcohol. But the fact that defendant’s conduct cre-
ated a risk that could lead to a traffic accident and the fact
that a traffic accident occurred was insufficient, because the
traffic accident that was risked was a different type of traf-
fic accident than the one that occurred. The issue was not
whether the defendant’s unreasonable conduct contributed
to the traffic accident—that would merely establish factual
causation. The issue was whether the reasons that made
the defendant’s conduct unreasonable were related to the
traffic accident that occurred. The court denied liability as
a matter of law because the plaintiffs adduced no evidence
establishing that the minor’s substance abuse or impaired
judgment were related to the traffic accident. The court
held, “‘In an extreme case a court can decide that no rea-
sonable factfinder could find the risk foreseeable’ This is an
‘extreme case.’” Id. at 253 (quoting Donaca v. Curry Co., 303
Or 30, 38, 734 P2d 1339 (1987)).

Similarly, in Oregon Steel Mills, Inc. v. Coopers &
Lybrand, LLP, 336 Or 329, 83 P3d 322 (2004), we considered
the liability of an accountant who negligently misstated a
steel company’s earnings, delaying the company’s stock
offering, through which the company intended to raise capi-
tal. Id. at 333. By the time the company’s stock was offered,
the market for steel company stocks had declined. As a
result, the company’s stock sold for less than it would have if
it had not been delayed by the accountant’s negligence, and
the company was unable to raise as much capital as it would
have otherwise. Id.

As in Hefty, the issue in Oregon Steel Mills was not
factual causation; instead, the issue was foreseeability. Id.
at 344 (“There is sufficient evidence of factual causation
***, Rather, the critical issue is whether plaintiff's market
losses were a reasonably foreseeable result of defendant’s
wrongful conduct.”).6 Again, the court did not define the
risk as the end result—stock-price reduction and resulting

® See, e.g., Solberg, 306 Or at 490 (distinguishing between whether “defen-
dant’s conduct caused a foreseeable risk of harm,” which is an issue of foreseeabil-
ity, and whether “the conduct was a cause of plaintiff's harm,” which is an issue
of factual causation).

Po iit

decrease in the capital raised—even though an accountant’s
negligence entailed such a risk. For example, negligently
misstating earnings might understate a company’s prior
earnings, making the company’s stock less desirable and
impairing the ability to raise capital. Then, there would be
a connection between the accountant’s negligence and the
stock-price reduction that impaired the company’s ability to
raise capital.

But the fact that the accountant created a risk of
a lower stock price and the fact that a lower stock price
occurred was not sufficient, because the stock-price reduction
that was risked was a different type of stock-price reduction
than the one that occurred. Instead, liability required estab-
lishing that the lower stock price occurred in the manner
that was reasonably anticipated. This court denied liability
as a matter of law because the company’s stock price was
not lowered by the accountant’s negligence; it was lowered
by market fluctuations that affected the entire steel indus-
try and had nothing to do with the accountant’s negligence.
Id. (“[Pllaintiff seeks damages based solely on a decline in
the price of plaintiff’s stock during the delay that defendant
caused in getting the offering to market, yet plaintiff admits
that the price decline affected all steel stocks and was unre-
lated to defendant’s misconduct.”).”

Other courts have likewise distinguished between
the manner of the harm and the end result under facts
similar to this case. For example, Shadday v. Omni Hotels
Mgmt. Corp., 477 F3d 511 (7th Cir 2007), involved a negli-
gence claim against a hotel for failing to prevent the sexual
assault of the plaintiff, who was a hotel guest. Id. at 511. The
sexual assault was committed by another hotel guest. Jd. In

1 The majority attempts to distinguish Hefty and Oregon Steel Mills by assert-
ing that, “in contrast to the circumstances in those cases, as alleged in plaintiff's
complaint, the assailant’s access to Delgado and the other teens outside the Zone
was directly connected to the Zone defendants’ asserted negligencel.]” 360 Or
at 98. But foresecability does not turn on whether the connection between the
defendant’s conduct and the plaintiff's injury is direct rather than indirect—both
of which may establish liability. Instead, foreseeability turns on whether the con-
nection should have been reasonably expected. Stewart, 255 Or at 609. In any
event, it is unclear why the connection is more direct in this case than in Hefty
and Oregon Steel Mills. In all three cases, the harm-inducing force is extrinsic to
the defendant's conduct.

112 Ld

denying liability as a matter of law, Judge Posner explained
that, based on the evidence adduced, the risk of crime was
from intruders and not from hotel staff or guests. Id. at 516.
Although “the precautions against guest-on-guest crime
are not dramatically different from the precautions against
intruder crime” such that the hotel’s failure to take those
precautions might have been a but-for cause of the guest’s
injury, that fact did not establish liability. Id. at 517. Instead,
regardless of the risk of sexual assault presented by intrud-
ers, “[t]he hotel becomes liable for guest-on-guest crime only
when it has some reason to think such crime likely,” and the
plaintiff presented no such evidence in that case. Id.

It may be worth asking why the manner of harm
matters when a defendant’s conduct is unreasonable and the
end result is the same, regardless of the manner in which it
occurs. Judge Posner addressed that question in Shadday:
“(T]he puzzle of the line of cases that [require the harm to
be within the foreseeable risk] is why the defendant, hav-
ing been negligent, should get off scot-free just because the
harm that would have been averted had he been careful was
not foreseeable.” Id. at 518. He notes that, without requiring
the harm to be within the risk, “negligence liability is poten-
tially too encompassing.” Id.

Our case law reflects those concerns as well.
Liability is intended to turn on fault, and fault is predicated.
on blameworthiness. Stewart, 255 Or at 608. “[T]he com-
munity deems a person to be at fault only when the injury
caused by him is one which could have been anticipated
because there was a reasonable likelihood that it could hap-
pen.” Id. at 609. Defining the risk of harm in this case by the
end result—all violent assaults—would allow defendants to
be subject to liability for those violent assaults that could
be reasonably anticipated (gang-, drug-, and alcohol-related
violence) but also allows defendants to be subject to liability
for those violent assaults that could not have been reason-
ably anticipated (such as the shooting incident in this case).

Focusing on the end result, while ignoring the man-
ner in which that end result was reached, is like crediting a
broken clock because it happens to be right twice a day. The
correctness of a broken clock turns on the coincidence that it

Po 118

was viewed at the same time of day that it previously stopped
-working. But in that case, whether the clock is correct has
nothing to do with whether the clock is functioning properly.
Likewise, whether the end result was foreseeable has noth-
ing to do with a defendant’s blameworthiness unless the end
result occurred in a foreseeable manner. Focusing only on
the end result allows liability to turn on coincidence rather
than blameworthiness.

Finally, the majority opinion emphasizes the notion
that questions of foreseeability should be decided by the
jury. 360 Or at 86, 94. Although it is true that foreseeability
is a fact issue, simply identifying an issue as factual does
not entitle a party to a jury trial or even to proceed to sum-
mary judgment. Rather, it depends on the relevant facts
alleged in the complaint or established by the summary
judgment record. Only when those facts are reasonably dis-
puted does the issue go to the jury. The jury’s role, of course,
properly can be an expansive one, particularly in deciding
fact-intensive issues like foreseeability. But even as to fore-
seeability, the court retains its role as gatekeeper, allowing
cases to proceed to the jury only if reasonable minds could
reach different conclusions on whether the facts alleged or
adduced could prove a plaintiffs case. Stewart, 255 Or at
607.8

The majority defines the foreseeable risk in this
case broadly as “violent assaults” and leaves it to the jury to
decide whether the foreseeable risk should be defined more
narrowly. But the majority fails to explain how a reason-
able jury could define the risk that broadly, based on the
narrow facts alleged. How broadly or narrowly a reasonable
jury may define the generalized risks foreseeably created by
defendants’ conduct is a question of law appropriately and
necessarily resolved by the courts. See Fazzolari, 303 Or at
17 (defining the role of courts).

Negligence liability is intended to reflect commu-
nity standards of fairness and proportionality. Our system

® In Buchler v. Oregon Corrections Div., 316 Or 499, 858 P2d 798 (1993), this
court rejected a common misreading of Fazzolari as standing for the proposition
that “all negligence claims based on general foreseeability of a plaintiff's harm
would reach the jury.” Id. at 511 n 8.

114 Ld

operates on the “assumption that judges as well as juries
know something about the kind of conduct that is deemed
acceptable or not acceptable in the community and that, at
least at the higher and lower ends of the continuum of that
standard, the court can say that the conduct does or does
not meet the standard.” Stewart, 255 Or at 607-08. When.
liability is clearly inappropriate, as it is in this case, “we are
charged with the duty of withdrawing the issue from the
jury.” Id. at 609. Although allowing too few cases to proceed
to trial intrudes on the role of the jury, allowing too many
cases to proceed to trial abdicates the role of the courts.
Consequently, I would affirm the trial court’s dismissal and,
therefore, dissent.

Landau, J., joins in this dissenting opinion.

115

Argued and submitted November 10, 2015, decision of Court of Appeals
reversed, final order of Land Use Board of Appeals affirmed August 4, 2016

LAKE OSWEGO PRESERVATION SOCIETY,
Marylou Colver,

and Erin O’Rurke-Meadors,

Petitioners on Review,
ve

CITY OF LAKE OSWEGO,

Respondent on Review,
and
Marjorie HANSON,
trustee for the Mary Cadwell Wilmot Trust.
Respondent on Review.
(LUBA No. 2014-009; CA A157619; SC S063048)

879 P3d 462

rr
Cs

Daniel Kearns, Reeve Kearns PC, Portland, argued the
cause and filed the briefs for the petitioners on review.

Christopher P. Koback, Hathaway Koback Connors LLP,
Portland, argued the cause and filed the brief for the respon-
dent on review, Marjorie Hanson.

No appearance on behalf of respondent on review City of
Lake Oswego.

Carrie A. Richter, Garvey Schubert Barer, Portland, filed
the brief for amici curiae Restore Oregon and Architectural
Heritage Center, The National Trust for Historic Preser-
vation, Preservation Action, Preservation Works, The
City of Portland, The City of Pendleton, and The City
of the Dalles. With her on the brief was Jennifer Bragar,
Portland; Kathryn Beaumont, Portland Office of City
Attorney, Portland for City of Portland; Gene E. Parker,
Attorney for the City of The Dalles, The Dalles; and Nancy
E. Kerns, Attorney for the City of Pendleton, Pendleton.

Inge D. Wells, Assistant Attorney General, Salem, filed
the brief for amici curiae State Historic Preservation Office
and Department of Land Conservation and Development.
With her on the brief were Ellen F. Rosenblum, Attorney
General, and Anna M. Joyce, Solicitor General.

With her on the brief were Ellen F. Rosenblum, Attorney
General, and Anna M. Joyce, Solicitor General.

Before Balmer, Chief Justice, Kistler, Walters, Landau,
Baldwin, and Brewer, Justices.**

BALMER, C. J.

The decision of the Court of Appeals is reversed. The final
order of the Land Use Board of Appeals is affirmed.

** Linder, J., retired December 31, 2015, and did not participate in the deci-
sion of this case. Nakamoto, J., did not participate in the consideration or decision
of this case.

pT iT
BALMER, C. J.

This case concerns the interpretation of Oregon's
historic property designation consent statute, ORS 197.772.
That statute provides that the owners of properties slated
for local historic designation have the right to refuse to con-
sent to that designation. It also requires a local government
to “allow a property owner to remove from the property a
historic property designation that was imposed on the prop-
erty by the local government.” ORS 197.772(8). The owners
of the property at issue here sought to remove it from the
local government’s list of historic landmarks, citing the
removal provision in ORS 197.772(8). The local government
concluded that it was required to grant the owners’ request,
but on appeal the Land Use Board of Appeals (LUBA) dis-
agreed, concluding that the right to remove imposed des-
ignations does not apply to successors-in-interest like the
owners in this case. Lake Oswego Preservation Society v.
City of Lake Oswego, 70 Or LUBA 108, 121 (2014). The prop-
erty owners sought judicial review and the Court of Appeals
reversed, concluding that the legislature intended ORS
197.772 to confer on all property owners the right to remove
Jocal historic designations that were imposed on the prop-
erty without the owner’s consent. Lake Oswego Preservation
Society v. City of Lake Oswego, 268 Or App 811, 820-21, 344
P3d 26 (2015).

The issue presented on review is thus a narrow one:
If a local historic designation is imposed on a property and
that property is then conveyed to another owner, may the
successor remove that designation under ORS 197.772(3)?
For the reasons explained below, we conclude that, although
the legislature intended ORS 197.772(3) to provide a stat-
utory remedy for certain owners whose property was des-
ignated as historic against their wishes, the legislature
also intended that owners who acquired property after it
had been designated would be bound by that designation
and by any resulting restrictions on the use and develop-
ment of that property. Accordingly, we agree with LUBA
that the right to remove an historic designation under ORS
197.772(3) applies only to those persons who owned their
properties at the time that the designation was imposed and

Sr

not to those who acquired them later, with the designation
already in place. We therefore reverse the decision of the
Court of Appeals and affirm LUBA’s final order.

I. FACTUAL AND PROCEDURAL BACKGROUND

Since 1973, with the passage of Senate Bill (SB) 100,
the system of land use planning and development in Oregon
has been governed by a comprehensive statutory scheme.
See generally Edward Sullivan, Remarks to University of
Oregon Symposium Marking the Twenty-Fifth Anniversary of
S.B. 100, 77 Or L Rev 818, 817-21 (1998) (describing devel-
opment of Oregon’s land use planning system under frame-
work established by SB 100); see also Jennifer Johnson and
Laurie Bennett, Introduction: Oregon Land Use Symposium,
14 Envitl L v, v-vi (1984) (describing SB 100 and its goal of
replacing ad hoc local planning with “a unified statewide
system”). Pursuant to that scheme, codified in ORS chap-
ter 197, individual cities and counties across the state are
responsible for adopting local comprehensive plans, zon-
ing land, administering land use regulations, and han-
dling land use permits, all in accordance with mandatory
Statewide Planning Goals and Guidelines set by the Oregon
Land Conservation and Development Commission (LCDC).
See ORS 197.030-197.798 (setting out framework for devel-
opment of Statewide Planning Goals and Guidelines, and
obligations of local governments for implementation of those
goals). Statewide Planning Goal 5 requires local govern-
ments to identify and designate historically significant prop-
erties, and where appropriate, protect those properties long-
term by regulating their use and development. See OAR
660-015-0000, OAR 660-023-0000 - 660-023-0060, and
OAR 660-023-0200 (setting out administrative rules under
Goal 5 that govern identification and protection of historic
properties).

The 1995 passage of the statute at issue in this case,
ORS 197.772, created an anomaly in one part of that com-
prehensive system. Whereas the statewide scheme for land
use planning and development under SB 100 requires local
governments to utilize a holistic approach that balances a
variety of considerations when making land use planning

decisions, ORS 197.772 specifically requires that with
respect to local historic designations, property owners have
the right to refuse a request to designate their property as
historic, and in some cases, to remove historic designations
already in place. Noting that fundamental inconsistency,
petitioner, the Lake Oswego Preservation Society (LOPS),
contends that the designation removal provision in that
statute, set out in ORS 197.772(8), was intended to provide
a specific remedy to a limited group of property owners and.
that in light of its broader statutory and regulatory context,
we should interpret that provision narrowly in a way that
preserves Oregon’s well-established system under Goal 5
of designating and regulating historic properties in order to
protect them from alteration or demolition. Respondent, the
Mary Cadwell Wilmot Trust (the Trust)'—the owner of the
property whose designation is at issue here—argues that
the effect of ORS 197.772(3) was intended to be more funda-
mental and that, as a result of that provision, any owner of
a property upon which an historic designation was imposed.
may remove that designation, and any accompanying land
use restrictions, at any time, regardless of whether that
owner acquired the property decades later and with the des-
ignation already in place.

119

A. The Designation of the Carman House

To determine what the legislature intended when
it enacted ORS 197.772(3), we begin with the background
of the property at issue. We take the facts from the record
before the City of Lake Oswego, which made the designa-
tion here. Located in Lake Oswego, the property was orig-
inally part of a pioneer homestead, created by one of the
first Donation Land Claim grants in the state. The main
structure on the property, the Carman House, was built
circa 1856. Because the Carman House and the lot on which
it sits have been subject to relatively few modifications, the
property is considered a rare and valuable example of a ter-
ritorial Oregon residence.

1 Marjorie‘Hanson, as trustee for the Mary Cadwell Wilmot Trust, is the
named party in this case. For current purposes of clarity, we refer throughout
this opinion to her and the trust that owns the Carman House collectively as “the
Trust”

2

The issue of the property’s status as an historic
landmark first arose in the late 1980s, when the city of Lake
Oswego began developing its inventory of local historic prop-
erties as required by Goal 5 of Oregon’s land use planning
scheme. See Terence Thatcher and Nancy Duhnkrack, Goal
Five: The Orphan Child of Oregon Land Use Planning, 14
Envtl L 718, 715-20 (1984) (describing requirement under
Goal 5 that local governments inventory resources, identify
conflicting uses, and implement appropriate protective mea-
sures). As a result of that inventory review, the city deter-
mined that the Carman House and the property immediately
surrounding it constituted an historic “farm complex” under
the city’s Historic Resource Protection Plan (1989) and that
it should be designated as a landmark under the city’s munic-
ipal code. In 1990, as a result of that determination, both the
lot containing the Carman House and an adjoining parcel
of land were added to the city’s Landmark Designation List
and, as a consequence, became subject to certain restrictions
on their use and development pursuant to the city’s local his-
toric preservation ordinance.? See Lake Oswego Municipal
Code (LOC) 58.020 - 58.135 (1990) (setting out limitations
on demolition, moving, or exterior alteration of properties on
Landmark Designation List).

At the time, the city could designate a property as
historic, and subject it to special land use requirements,
without the property owner’s consent. See LOC 58.025
(1990) (describing authority and process for designating
properties); see also DLCD v. Yamhill County, 99 Or App
441, 445-47, 783 P2d 16 (1989) (holding that local historic
designations could not be contingent on owner preference).
A property owner did have the right to be notified of the
city’s decision to designate a property, however, and could
challenge that decision through a quasi-judicial post-
designation process. LOC 58.025 (1990). Using that mech-
anism, in 1990, Richard Wilmot,’ one of the owners of the

2 Although the Carman House is not listed on the National Register of
Historic Places, the city of Lake Oswego has previously determined that it is
eligible to be listed, given its age, integrity, and historic significance.

8 Wilmot, the great-grandson of Waters Carman, the original settler who
established the homestead, acquired the Carman House with his wife, Mary
Wilmot, in 1978.

po 121

Carman House at that time, objected to the historic farm
complex designation. Wilmot argued that the designation
was improper for several reasons, including that the city
had failed to account adequately for the economic impact
of designation and that it should have considered the
Carman House separately from the adjoining parcel that it
had included as part of the historic farm complex.‘ In the
alternative, Wilmot argued that because only the Carman
House had historic value, any landmark designation should
be limited to the house and a smaller parcel of land imme-
diately surrounding it.

In 1991, while litigation regarding the farm com-
plex designation was still ongoing, an old barn situated on
the adjoining parcel burned down. Because of that change
in the property, the site no longer qualified as an historic
farm complex as defined in the city’s Resource Protection
Plan. The city withdrew its prior decision and, in 1992, ini-
tiated a new hearing process to reconsider whether there
were grounds for listing either property as an historic
landmark on its own. Following the recommendations of
its Historic Resource Advisory Board, the city concluded
that the adjoining parcel lacked sufficient historic value
on its own to warrant designation and removed it from the
Landmark Designation List. The city determined, however,
that the Carman House remained a valuable resource wor-
thy of preservation. As a result, it ordered in July 1992 that
the historic designation be retained on the Carman House.
Despite his earlier objections, Wilmot did not challenge the
city’s decision on reconsideration. Rather, as noted by the
city in its final account of the proceedings, no party con-
tested the historic significance of the Carman House nor

* The Wilmots originally acquired the Carman House as part of a larger
10-acre parcel, which, at the time, made up the remainder of the family home-
stead. The Wilmots sold off most of that property in 1979, but retained the 1.25-
acre plot on which the Carman House is situated. In 1990, when the Carman
House was first designated as historic, the city designated the whole of the
original 10-acre parcel—including both the Wilmots’ property with the Carman
House and the portion that they had sold—together as a single historic “farm
complex.” At that time, Wilmot objected to the historic designation of his property
in concert with the purchaser of the property he had sold. It appears that their
joint objection was motivated by the purchaser's desire to develop an assisted
living facility on that land.

el

argued that the Wilmots’ property should be removed from
the Landmark Designation List.

Not long after the city decided to retain the Carman
House on its historic landmark list, the Oregon legislature
passed a variety of measures relating to the protection of
historic properties under the state’s comprehensive plan-
ning scheme. One of those measures, enacted in 1995, estab-
lished the owner consent requirements for local historic des-
ignations that are at issue here. See Or Laws 1995, ch 693,
§ 21, codified as ORS 197.772. That law provided that local
governments must allow “a property owner” whose property
is under consideration for local historic designation to refuse
the designation. ORS 197.772(1). It also included a removal
provision for properties already designated, which provided.
that “a property owner” may “remove from the property a
historic property designation that was imposed on the prop-
erty by the local government.” ORS 197.772(3). Despite
objecting to the city’s designation of his property in 1990,
Wilmot never sought the removal of the historic farmhouse
designation under ORS 197.772(3) or by any other mech-
anism. As a result, the Carman House was still on Lake
Oswego’s Landmark Designation List when, in 2001, Mary
Wilmot conveyed the property by warranty deed to Richard
Wilmot II (Richard and Mary Wilmot’s son), as trustee of
the Mary Cadwell Wilmot Trust.

B. The Trust Seeks the Removal of the Historic Designation

In 2018, the Trust began its effort to remove the his-
toric designation from the Carman House property in order
to facilitate its subdivision and redevelopment. Although
the city’s Historic Resource Advisory Board initially denied
that request, the City Council, following a public hearing on
the issue, overturned that decision. In its written opinion,
the City Council concluded that the right to remove a local
historic designation under ORS 197.772(3) applies to any
owner of a property on which an historic designation was
“imposed.” The City Council stated its view that because the
designation was “imposed” on the Carman House in 1990,
its present owners were entitled by law to remove it from
the city’s Landmark Designation List. Accordingly, the city
approved the Trust’s request.

Po 128

LOPS appealed the city’s decision to LUBA. Con-
sidering the text, context and legislative history of ORS
197.772(3), LUBA concluded that the City Council had erro-
neously interpreted that provision. Focusing on the mean-
ing of the phrase “a property owner,” LUBA concluded that
that term as used in ORS 197.772(3) was not intended to
include persons who become owners of a property after it
is designated as historic. Lake Oswego Preservation Society,
70 Or LUBA at 121. Accordingly, because the Trust did not
acquire the Carman House property until years after it had
been designated as historic by the city, LUBA reversed the
city’s decision to remove the historic designation from the
Carman House under ORS 197.772(3) and remanded the
case to allow the city to determine whether the Trust could
seek its removal under an alternative provision of the city’s
historic preservation law. Id. at 124-25.

C. The Court of Appeals Decision

The Trust sought judicial review of LUBA’s order,
and the Court of Appeals reversed. Lake Oswego Preservation
Society, 268 Or App at 821. The Court of Appeals agreed with
LUBA that the decisive issue was the meaning of the phrase
“a property owner” in ORS 197.772(3) and whether it encom-
passes all owners of historic properties or only those who
owned the property at the time the designation was imposed.
As to that issue, however, the court disagreed with LUBA’s
interpretation of the statute. Looking first to the text, the
court noted that the indefinite article “a” ordinarily refers
to an “unidentified, undetermined or unspecified” object. Id.
at 817-18. Next, considering the legislative history of ORS
197.772(8), the court found nothing expressly indicating that
the legislature intended to exclude successors-in-interest
from utilizing the removal provision in ORS 197.772(3), and
some evidence that the legislature was aware that allow-
ing owners to remove designations might undermine local
historic districts. Id. at 818-21. Based on that history, the
court concluded that the legislature was “focused on correct-
ing impositions of unwanted designations, and not on the
identity of the property owner that might be stuck with that
designation.” Jd. at 821. Accordingly, the court held that the
best reading of that provision was the broadest one: that

124

any owner of a property on which a local historic designa-
tion was, or had been, “imposed” has a right to remove it,
regardless of whether that designation was already in place
when the owner took title. Jd. We granted LOPS’s petition
for review to address the meaning and application of ORS
197.772(8).

Il. ANALYSIS

Our goal in interpreting statutes is to discern, to the
extent possible, what the legislature intended a provision to
mean. State v. Gaines, 346 Or 160, 171-72, 206 P3d 1042
(2009). We examine the statutory text in context, along with
its legislative history, applying as needed relevant rules and
canons of construction. Jd. For the reasons described below,
we conclude that the legislature most likely intended the
phrase “a property owner” in ORS 197.772(8) to refer only
to persons who owned a property at the time a local historic
designation was imposed on that property.

A. Statutory Text
ORS 197.772 provides:

“(1) Notwithstanding any other provision of law, a
local government shall allow a property owner to refuse to
consent to any form of historic property designation at any
point during the designation process. Such refusal to con-
sent shall remove the property from any form of consider-
ation for historic property designation under ORS 358.480
to 358.545 or other law except for consideration or nomi-
nation to the National Register of Historic Places pursu-
ant to the National Historic Preservation Act of 1966, as
amended (16 U.S.C. 470 et seq.).

“(2) No permit for the demolition or modification of
property removed from consideration for historic property
designation under subsection (1) of this section shall be
issued during the 120-day period following the date of the
property owner's refusal to consent.

“(3) A local government shall allow a property owner
to remove from the property a historic property desig-
nation that was imposed on the property by the local
government.”

Po 125

ORS 197.772.° The statutory text thus has two substantive
components. The first part, in subsections (1) and (2), relates
to a property owner’s right to refuse a local historic designa-
tion during the initial designation process, and the effects
of such a refusal. The second part, in subsection (3), relates
to the status of properties already designated as historic
and requires a local government to allow the removal of a
designation from a property when two conditions are met.
First, the party seeking removal must be “a property owner”
within the meaning of the statute. Second, the property
must have had the historic property designation “imposed”
on it by the local government.®

The issue, as noted, is whether the phrase “a prop-
erty owner” in ORS 197.772(3) refers only to the owner of
the property at the time that an historic designation was
imposed, or whether any owner, such that a successor-in-
interest, like the Trust, may utilize it also.”

Because none of the terms in ORS 197.772 are
defined in the statute, we look first to their ordinary mean-
ings to determine what the legislature meant. State v.

5 ORS 197.772 has been amended since it was first enacted in 1995. See Or
Laws 2001, ch 540, § 19 (updating cross-reference to renumbered statute in sub-
section (1)). Because that amendment is not pertinent to any of the issues before
us on review, we quote the current version of the text.

® The meaning of the word “imposed” in ORS 197.772(3) is also a matter
of first impression before this court. LUBA has interpreted it to mean that the
historic designation was put in place over the objections of the property owner at
the time of designation, See Demlow v. City of Hillsboro, 39 Or LUBA 307, 314-17
(2001) (interpreting and defining term). Because the only question on review is
whether the term “a property owner” in ORS 197.772(8) includes a successor-in-
interest, and because the resolution of that question is dispositive in this case, we
leave for another day the issue of what the legislature meant in requiring that a
designation be “imposed” for it to be subject to removal under ORS 197.772(8).

’ The Trust has suggested that it should not be considered a successor-in-
interest to the Wilmots because it was created by them as an estate planning
vehicle. Because the Court of Appeals resolved this case on other grounds, it did
not reach that issue. A trust is a distinct legal entity, and a settlor’s transfer
of property to a trust divests the settlor of its legal interest in that property.
Restatement (Third) of Trusts § 2 comment a, and § 3 comment b (2008). In this
case, the record shows that Mary Wilmot conveyed the property in 2001 by war-
ranty deed to Richard Wilmot IJ, as trustee of the Mary Cadwell Wilmot Trust.
On those facts, we treat Mary Wilmot’s transfer of the property the same as any
conveyance of real property, We express no opinion, however, on whether under
other circumstances an original owner's right to remove a designation under
ORS 197.772(3) may be exercised by a different person or entity.

TT

Dickerson, 356 Or 822, 829, 345 P3d 447 (2015). The words
“property” and “owner” are relatively straightforward, refer-
ring, in context, to the individual or entity that has legal
title to a piece of real estate. See Webster’s Third New Int'l
Dictionary 1818, 1612 (unabridged ed 2002) (defining “prop-
erty” and “owner”). However, those definitions do not tell us
which property owners the text refers to.

Urging us to interpret the term “a property owner”
in its broadest possible sense, the Trust emphasizes the fact
that the legislature chose to use the indefinite article “a” as
a determiner rather than the definite article “the” in that
phrase. That word choice, the Trust suggests, unambigu-
ously shows that the legislature intended ORS 197.772(8)
to apply to all property owners, including successors-in-
interest like the Trust.

We do not find the legislature’s word choice to be so
conclusive. In some cases, statutory text that appears clear
on its face turns out, upon closer analysis, to be entirely
uncertain. See Gaines, 346 Or at 172 (legislative history
may establish that “superficially clear language actually is
not so plain at all—that is, that there is a kind of latent
ambiguity in the statute”). For the reasons discussed below,
the text in this case is susceptible to at least two plausible
interpretations.

The Trust argues that the phrase “a property owner”
in ORS 197.772(3) means any property owner at any point
in time, including those who acquired the property after the
designation was imposed. However, as a basic principle of
grammar, that is not necessarily the case. On one hand, it is
true that the indefinite article “a” is often used as a function
word before a singular noun when that noun is “undeter-
mined, unidentified, or unspecified, esp. when the individual
is being first mentioned or called to notice.” Webster’s at 1;
see also Randolph Quirk et al, A Comprehensive Grammar
of the English Language at 272 (1985) (indefinite articles
normally used when referenced noun is not uniquely iden-
tifiable in shared knowledge of speaker and hearer). When
used in that context, the word “a” is sometimes synonymous
with “any.” See, e.g., State v. Hankins, 342 Or 258, 263, 151
P83d 149 (2007) (use of indefinite article “an” in statute could

Po 127

mean defendant is permitted to demur to indictment when
facts alleged do not constitute any offense); see also, e.g.,
Carroll and Murphy, 186 Or App 59, 68, 61 P3d 964 (2003)
(distinguishing definite article “the” from indefinite article
“a”; the latter could indicate any future payment as opposed
to a specific one).

On the other hand, the use of the article “a” as a
determiner does not always mean that the referenced noun
is unspecified in the most generic sense. For example, “a”
may also be used quantitatively. See Webster’s at 1 (“a” may
be used “to suggest a limitation in number”). As a result, “a”
may simply signal that the specified noun is one of a par-
ticular class, whether that class is defined by a subsequent
restrictive clause or other modifier, id., or is implied more
generally by the context in which the phrase appears. See
Rodney Huddleston et al, The Cambridge Grammar of the
English Language 371-72 (2002) (describing uses of indefi-
nite article “a” and difference between quantitative and non-
quantitative indefiniteness). When used in that manner, the
determiner “a” indicates that the noun that follows is one
unspecified member of a limited group. See, e.g., Hankins,
342 Or at 263 (legislature’s use of indefinite article in stat-
ute permits two interpretations: that demurrer is permitted
only when the facts stated do not constitute “any” offense,
or when indictment simply fails to state the offense that it
purports to charge). Read in that way, the phrase “a prop-
erty owner” in ORS 197.772(3) could also be interpreted as
referring to one of an otherwise limited group of property
owners.

Viewing the text of ORS 197.772(3) in context, the
latter interpretation is entirely plausible. See Gaines, 346 Or
at 171 (to make sense of what a particular provision means,
we must consider the text in light of the context in which it
appears). One important source of context is other parts of
the same statute. Dept. of Transportation v. Stallcup, 341 Or
93, 99, 138 P3d 9 (2006). In this case, the legislature used
the same term—‘“a property owner”—in both subsections
(1) and (3) of ORS 197.772. “When the legislature uses the
identical phrase in related statutory provisions that were
enacted as part of the same law, we interpret the phrase to

2 ee

have the same meaning in both sections.” Tharp v. PSRB,
338 Or 413, 422, 110 P3d 103 (2005).

Here, the legislature’s use of the same phrase
in subsection (1) supports LOPS’s interpretation of ORS
197.772(3). Unlike subsection (3), the text of subsection (1)
contains several indications of whom the phrase “a property
owner” refers to. ORS 197.772(1) provides, in part:

“Notwithstanding any other provision of law, a local
government shall allow a property owner to refuse to con-
sent to any form of historic property designation at any
point during the designation process.”

(Emphasis added.) Because the word “designation” refers
in that sense to an event—the action of designating—the
class of property owners referred to in subsection (1) is lim-
ited temporally to those at that particular point in time.
That limitation is confirmed by the restrictive clause in the
same sentence, specifying that “a property owner” may only
exercise its refusal right under subsection (1) “during the
designation process.” The phrase “a property owner” in sub-
section (1), therefore, refers to a specific and relatively nar-
row class of owners: those who own a property at the time
that the government designates that property as historic.
If the same meaning is applied to the phrase “a property
owner” in subsection (3), that provision becomes similarly
targeted, referring to an owner at the time a property is
first designated, whenever that occurs. Thus, although the
legislature’s use of the same term in ORS 197.772(1) does
not foreclose the Trust’s interpretation of ORS 197.772(3), it
highlights the fact that when read in context, the meaning
of the phrase “a property owner” is ambiguous.®

The Trust contends, nonetheless, that the text of
ORS 197.772(3), taken as a whole, requires us to adopt a
more expansive reading of the term “a property owner.”

® The Trust argues that the term “a property owner” cannot have the same
meaning in both subsections of ORS 197.772, noting that subsection (1) and
subsection (2) may refer to designations occurring at different points in time—
before and after the enactment of ORS 197.772. That argument is not well taken.
Although ORS 197.772(1), like most statutes, is written to apply prospectively
and ORS 197.772(8) is remedial, both provisions can be readily interpreted as
applying to the same group of owners: those who own a property at the time it is
designated.

po 129

To reach that result, the Trust draws a negative inference
from the legislature’s failure to more specifically describe
or explain what it intended the term “a property owner”
to mean in ORS 197.772(8). For, the Trust argues, had the
legislature intended that provision to apply to only certain
property owners, it would have included additional lan-
guage clarifying that point, stating, for example, “that the
owner who owned the property at the time a designation
was imposed may seek removal.”

We do not find that argument persuasive. As we
have previously recognized, the fact that a statutory pro-
vision describes something in relatively broad terms does
not always mean that the legislature intended the most
expansive meaning possible. See State v. Walker, 356 Or 4,
17, 333 P3d 316 (2014) (where there is evidence legislature
had a more specific meaning in mind and that meaning is
consistent with the text, court may appropriately construe
text as such even if it also permits more expansive inter-
pretation); see, e.g., Alfieri v. Solomon, 358 Or 383, 401-02,
365 P3d 99 (2015) (concluding that legislature, despite use
of passive voice in statute, did not intend it to apply to any
person, but only to determinate class). Moreover, because
legislative inaction can stem from a variety of causes, which
may or may not relate to the legislature’s intent as to a
particular issue, negative inferences based on legislative
silence are often unhelpful in statutory interpretation. See,
eg., Farmers Ins. Co. v. Mowry, 350 Or 686, 696, 261 P3d
1 (2011) (oting that legislative silence is a “legal fiction”
and that the legislature “may decline to address a judicial
decision for any number of reasons, none of which necessar-
ily constitutes an endorsement of the decision’s reasoning or
result”); see also State Bar v. Security Escrows, Inc., 233 Or
80, 84-85, 377 P2d 334 (1962) (finding “no authority for the
proposition that legislative silence *** is the equivalent of a
legislative definition”).

Whereas the absence of narrowing language in
ORS 197.772(3) could mean that the legislature intended
that provision to be read in an expansive sense, an equally
plausible inference is that the omission means nothing at
all, except that the legislature did not perceive the need to

130

clarify its intent. See State v. Rainoldi, 351 Or 486, 492, 268
P3d 568 (2011) (noting that because fact of legislative silence
can give rise to competing inferences—that legislature did
not intend anything in particular, or that the omission was
purposeful—it is generally not a dispositive indicator of
intent). Thus, although “t]he legislature knows how to
include qualifying language in a statute when it wants to do
so,” PGE v. Bureau of Labor and Industries, 317 Or 606, 614,
859 P2d 1143 (1993), the fact that the legislature failed to do
so in a particular case is far from definitive proof of its intent.

In sum, the text of ORS 197.772(3) does not, on
its own, compel any particular interpretation of the term
“a property owner.” Although the use of the indefinite arti-
cle “a” in that provision could be read as synonymous with
“any,” there is at least one other plausible way in which to
read the same words. That variation highlights the fact that,
while grammatical “rules” are helpful in statutory interpre-
tation, they are often subject to qualification and should not
be applied mechanically in seeking to discern the meaning
of a provision. Rather, because the legislature sometimes
expresses itself in unusual ways, the best reading of a stat-
ute is not necessarily the most obvious one, grammatically
speaking. See, e.g., Burke v. DLCD, 352 Or 428, 435-37, 290
P3d_ 790 (2012) (describing variations in use of disjunctive
“or” and concluding that while it often indicates an exclusive
relationship, legislature may also use “or” inclusively). That
is particularly true when, as discussed below, the broader
context of a provision points to a different meaning than the
text, read in isolation, might otherwise suggest.

B. Legislative and Regulatory Context

ORS 197.772(3) was drafted against the backdrop
of a well-developed set of related statutes and rules con-
cerning the preservation of historic properties and was
intended to change one aspect of that regulatory scheme.
See Stallcup, 341 Or at 99 (relevant context includes other
related statutes, preexisting common law, as well as regu-
latory framework); Blachana, LLC v. Bureau of Labor and
Industries, 354 Or 676, 691, 318 P3d 735 (2014) (for purposes
of statutory interpretation, “[wle presume that the legisla-
ture was aware of existing law”). See also Tape Recording,

Po 131

Senate Committee on Water and Land Use, SB 588, Mar 22,
1995, Tape 66, Side A (discussion between Sen Johnson
and Sen Dwyer and various witnesses regarding exist-
ing historic preservation programs and effect of proposed
consent provision on those programs); Tape Recording,
House Committee on General Government and Regulatory
Reform, SB 588, May 2, 1995, Tape 126, Side A (statement
of Rep Leslie Lewis that consent provision was specifically
intended to address designation of properties by local gov-
ernments pursuant to Goal 5). For the reasons discussed
below, we conclude that legislative and regulatory context
supports the interpretation of ORS 197.772(3) as being lim-
ited to the relatively small group of property owners whose
property was designated as historic against their wishes,
rather than to all owners of designated properties, including
subsequent purchasers.

A central aspect of that context, and one particu-
larly pertinent here, was the requirement, as part of Oregon’s
comprehensive land use planning process, that local govern-
ments create and implement comprehensive development
plans and local land use regulations to protect historically
significant properties. See 1000 Friends v. LCDC, 292 Or
735, 744-50, 642 P2d 1158 (1982) (describing development
and organization of statewide land use planning frame-
work under ORS chapter 197); see also Land Conservation
and Development Commission (LCDC), Oregon’s Statewide
Planning Goals: Goal 5 (1990) (describing basic content of
goal relating to historic preservation).°

As noted above, pursuant to Statewide Planning
Goal 5, local governments were required to inventory all
historic properties, analyze the potential uses and conflicts

® Although the Goal 5 framework is largely made up of agency guidelines and
administrative rules, and therefore is not a direct expression of legislative intent,
it nonetheless informs the legal background against which the legislature acted
when it created ORS 197.772. See State v. Lane, 357 Or 619, 624-81, 355 P3d 914
(2015) (considering administrative rules in form of sentencing guidelines as part
of legal context for constitutional amendment relating to judicial power to modify
criminal sentences). The administrative rules that govern the application of Goal
5 today, OAR 660-015-0000 and OAR 660-023-0000 to 660-023-0250, were not
created until 1996. Therefore, for purposes of examining the regulatory context
that existed when ORS 197.772(3) was enacted, we look to the guidelines and
rules in effect at that time, those promulgated in 1990.

132

as to the use of those properties, and adopt measures, usu-
ally in the form of local land use ordinances, to ensure that
those properties were appropriately protected in light of
economic, social, environmental, and energy considerations.
See Statewide Planning Goals at 6-7 (establishing proce-
dures and criteria for inventorying and evaluating Goal 5
resources and for developing local land use programs to con-
serve and protect those resources); see also Collins v. LCDC,
75 Or App 517, 520-24, 707 P2d 599 (1985) (describing pro-
cess for developing and implementing appropriate land use
restrictions pursuant to Goal 5). Thus, in implementing
Goal 5, local governments were obligated to not only identify
historically significant properties, but also to ensure that
those properties would be preserved for future generations.
See, e.g., Statewide Planning Goals at 6 (describing goal that
historic areas, sites and structures shall be managed so as
to preserve their original character). It was pursuant to that
process that the Carman House was identified, added to
the city of Lake Oswego’s Landmark Designation List, and
made subject to certain land use restrictions.

One of the defining features of the Goal 5 program,
and the feature of greatest concern to legislators when they
revisited the issue in 1995, was that the process for desig-
nating properties was largely involuntary from the property
owner's standpoint. Tape Recording, Senate Committee on
Water and Land Use, SB 588, Mar 22, 1995, Tape 66, Side A
(testimony of James Hamrick, State Preservation Office,
describing program). At that time, the determinative con-
sideration for whether a property would be included on a
local inventory was not whether the owner consented, but
whether it qualified as an historic resource according to a
set of specified criteria. Yamhill County, 99 Or App at 446-
AT; see also, e.g., LOC 58.095 - 58.105 (1990) (setting out cri-
teria for historic designations). Although owners ordinarily
had some opportunity to provide input in the designation
process, the ultimate decision as to whether a property
would be designated was up to the local government, fol-
lowing the process set at the state level under Goal 5. See
Yamhill County, 99 Or App at 446-47 (holding that state law
requires local governments to consider a variety of speci-
fied factors in determining whether to designate an historic

Po 1383

property and that county ordinance that made owner con-
sent a prerequisite to designation was invalid under Goal 5
because it “categorically subordinate[d]” those many factors
to the owner’s preference).

As in other states, Oregon’s approach to historic
preservation included proactively identifying and designat-
ing properties as a precursor to the application of general
restrictions on use and development.” That approach was
considered beneficial to historic preservation goals because
it allowed local governments to create more comprehensive
inventories and avoid the inadvertent loss of important
resources, as sometimes happens when preservation takes
place in a piece-meal fashion. See David Listokin, Growth
Management and Historic Preservation: Best Practices for
Synthesis, 29 Urb Law 199, 204-06 (1997) (describing value
of addressing historic preservation as part of comprehensive
planning approach and importance of identifying historic
resources); see also Paul Wilson and James Winkler II, The
Response of State Legislation to Historic Preservation, 36
Law & Contemp Probs 329, 333-35, 337-39 (1971) (identify-
ing features and benefits of historic designation in various
jurisdictions).

That approach to historic preservation also had
the benefit of ensuring long-term stability. Once a prop-
erty was designated as historic, it ordinarily remained so,
regardless of any future owner’s preference, as long as it
continued to meet the specified criteria for designation.
See Julia Miller, Owner Consent Provisions in Historical
Preservation Ordinances: Are They Legal?, 10 Preservation
L Rep 1019, 1023-24 (1991) (describing how local historic
designation should work and noting that once a designa-
tion attaches, it will typically run with the property, and
apply to subsequent owners); see also, e.g., LOC 58.110

¥ Oregon’s system for historic preservation at the local level pursuant to
Goal 5 is not unique, but typical of programs found in jurisdictions across the
country. See David Listokin, Growth Management and Historic Preservation, 29
Urb Law 199, 202-03 (1997) (describing Oregon system for historic preservation
and comparing to others elsewhere in United States); see, e.g., Penn Cent. Transp.
Co. v. City of New York, 438 US 104, 109-14, 98 S Ct 2646, 57 L Ed 2d 631 (1978)
(describing comparable program in New York City and noting that it is typical of
many urban landmark laws).

3

(1990) (stating that for designation to be removed, city
must determine that it is no longer justified pursuant to
same criteria that governs designation); Portland City
Code (PCC) 33.845.070 (1991), repealed and renumbered
by Portland City Ordinance No. 169987 (Apr 10, 1996)
(specifying that historic landmark designation will only
be removed if reasons for designating property no longer
apply). And because the designation of a property would
trigger the application of legal protections restricting its
use and development—typically in the form of local land use
ordinances and zoning plans—designated historic proper-
ties had the benefit of long-term protection from alteration
or demolition. See Julian Juergensmeyer and Thomas
Roberts, Land Use Development Regulation Law § 12:8
(3d ed 2013) (describing how local historic designation pro-
grams, like that under Goal 5, use regulations to protect
historic properties); see, e.g., LOC 58.020, LOC 58.120 -
58.145 (1990) (setting out land use restrictions applica-
ble to all designated properties); Eugene City Code (ECC)
9.206 - 9.208 (1992) (providing that designated historic
landmarks shall be subject to special zoning overlay and
restrictions on alteration and development of property).

The downside of that approach, however, was that
the imposition of an historic designation could interfere
with the investment-based expectations of the owner who
suddenly became subject to restrictions on the use and
enjoyment of its property. See Sara Bronin and J. Peter
Byrne, Historic Preservation Law 78-79 (2012) (local his-
toric designations typically trigger restrictions on owner’s
rights as to use of property); cf Penn Cent. Transp. Co. v.
City of New York, 438 US 104, 124-25, 98 S Ct 2646, 57
L Ed 2d 631 (1978) (owner’s investment-based expectations
are relevant to whether restriction on property’s use under
local historic preservation ordinance impinged on property
owner’s rights). Although historic preservation might bol-
ster property values at an aggregate level over time, historic
designation could diminish an individual property’s fair
market value. See Paul Asabere et al, The Adverse Impacts
of Local Historic Designation: The Case of Small Apartment
Buildings in Philadelphia, 8 J Real Estate Finance and
Economics 225, 227, 232 (1994) (describing effect). And

pe __135

even when that was not the case, designation could present
a financial burden in other ways, by, for example, prohibit-
ing the most profitable use of a property or creating onerous
maintenance requirements. See Penn Cent. Transp. Co., 438
US at 130 (oting that in that case, ordinance prohibited
most beneficial use of property to owner by limiting owner’s
ability to develop 55-story building on site); see also, e.g.,
ECC 9.208 - 9.210 (1992) (restricting alterations to build-
ing exteriors; requiring repair rather than replacement of
existing architectural features and that repairs accurately
duplicate original designs).

Thus, while Oregon’s system of designating and
regulating historic properties under Goal 5 was similar to
other land use planning in that it elevated certain public
interests over individual landowner preferences, it tended to
impose the costs of those benefits to an even greater extent
on specific landowners. Cf. Penn Cent. Transp. Co., 438 US
at 139 (Rehnquist, J., dissenting) (arguing that same type
of preservation program “imposes *** a substantial cost,
with little or no offsetting benefit except for the honor of the
designation” and questioning whether that cost ought to be
borne by all taxpayers instead of by individual owners). As
one author aptly described the problem:

“Since landmark designation usually imposes restrictions
on the owner’s alterations of the property, an owner may
be forced to bear the burden of diminished property value
and in effect to pay for the community’s preservation pref-
erences through an assessment not placed on the owners
of ordinary properties. To be sure, landmark designation
may provide some benefits to some landmark owners ***,
But for the owner who resists landmark designation and
control, the burden probably outweighs the benefits.”

Carol Rose, Preservation and Community: New Directions
in the Law of Historic Preservation, 33 Stan L Rev 473,
497-98 (1981). See also Joseph Sax, Some Thoughts on
the Decline of Private Property, 58 Wash L Rev 481, 483
(1983) (discussing criticism that designation and regula-
tion of historic properties forces owners to bestow ame-
nities on their neighbors without any reciprocal obliga-
tion); Andrew Gold, The Welfare Economics of Historic

136

Preservation, 8 Conn L Rev 348, 363-67 (1976) (describing
economic cost of individual landmark designation and how
it is distributed).

For those reasons, some viewed the imposition of an
historic designation over a property owner's objections as a
violation of that owner’s property rights. See Tape Recording,
House Committee on General Government and Regulatory
Reform, SB 588, May 2, 1995, Tape 127, Side A (statement
of Larry George, Oregonians in Action, explaining rea-
sons for supporting owner consent provision under Oregon
law). Indeed, Congress amended the National Historic
Preservation Act in 1980 to require owner consent for indi-
vidual properties to be designated and listed as landmarks
on the National Register of Historic Places in part to address
similar concerns. See W. Hartford Initiative to Save Historic
Prop. v. Town of W. Hartford, No. 3:06-CV-739 (RNC), 2006
WL 2401441 at *6 (D Conn Aug 18, 2006) (describing leg-
islative history of National Historic Preservation Act and
creation of owner consent requirement).

That background helps frame several of the parties’
arguments over the proper interpretation of the removal
provision in ORS 197.772(3). Pointing to the comprehensive
nature of Oregon's statewide historic preservation program
under Goal 5 and the many benefits of that system, LOPS.
and amici argue that that context strongly undercuts any
interpretation of ORS 197.772(3) that would allow subse-
quent owners to use that provision to unilaterally opt out
of designation decades later. They contend that because
the overwhelming majority of historically significant prop-
erties in Oregon were designated before ORS 197.772 was
enacted in 1995, and therefore likely had designations put

1 Although the listing of a property on the National Register is primarily
honorific and does not directly result in any restriction on the owner’s control
and use of the property, the federal listing of a property often triggers a variety
of restrictions under state and local law. Bronin, Historic Preservation Law at
68-69. It was partly for that reason, and to alleviate due process concerns that
might result, that Congress added the owner consent requirement for individ-
ual landmark listings. W. Hartford Initiative to Save Historie Prop. v. Town of
W. Hartford, No. 3:06-CV-739 (RNC), 2006 WL 2401441 at *6 (D Conn Aug 18,
2006); see also Juergensmeyer and Roberts, Land Use Planning and Development
Regulation Law at 12:8 (describing issue of owner consent and addition of owner
consent provision to National Historic Preservation Act).

Po 137

in place regardless of their owners’ desires at the time,
creating a removal right that would run to successors-in-
interest would fundamentally and permanently destabilize
the entire system of historic preservation in Oregon. Most of
the state’s historic properties would be perpetually at risk of
being de-listed and, thus, subject to modification or demoli-
tion with little warning and no consideration of the broader
impact of that decision.

Acknowledging that impact, the Trust responds
that because the text of ORS 197.772(8) is inherently at
odds with Goal 5, the only way to interpret that provision
is as a substantial abrogation of that program. The Trust
is certainly correct that the owner consent provisions in
ORS 197.772 were intended to modify the existing pro-
cess for historic designation and regulation under Goal 5.
Giving property owners the power to refuse designation
not only makes it more difficult for local governments to
designate properties, it also gives an owner—at least the
owner at the time of designation—rights that would ele-
vate the owner’s preference above other factors that would
otherwise inform the Goal 5 process. See Yamhill County,
99 Or App at 447 (concluding that owner consent require-
ment “categorically subordinate[d] all historic resources,
or at least all otherwise qualified landmarks, to any own-
er’s preference for non-regulation”). Likewise, allowing
individual owners to refuse designation makes historic
inventories less comprehensive and the preservation of
historic properties less complete, reducing the value of
such programs. See Miller, Owner Consent Provisions at
1020-21, 1035-36 (describing how owner consent provi-
sions “seriously limit the ability of local governments to
fulfill the mandate to protect historic property and the
heritage of their citizenry” and “undermine the general
principle that regulation should be rationally and uni-
formly applied”).

The mere fact that ORS 197.772 is in tension with
Goal 5, however, does not answer the question of how far the
legislature intended to go in cutting back the scope of exist-
ing local preservation programs created pursuant to that
goal, or the extent to which the legislature intended to limit

TT

the effect of historic designations that were already in place.
Rather, even if the right to refuse consent in ORS 197.772(1)
decreases the number of new designations, the impact of the
removal right in ORS 197.772(8) on existing designations
and preservation programs depends in substantial part on
how one reads that provision. If one interprets the right to
remove an historic designation as applying to any owner
of a property on which a designation was ever “imposed,”
the result could be, as LOPS contends, that most, if not all,
of Oregon’s historic properties are at risk of having their
designations, and the protections that accompany that sta-
tus, removed at any time. If, however, the right to remove a
designation applies only to those owners who owned their
properties at the time of designation, the long-term impact
of ORS 197.772(3) is more limited. Although some of those
owners may still opt out, the number of properties eligible
for de-listing is smaller and would tend to decrease over
time as historic properties change hands.

Contrary to the Trust’s assertions, nothing about
the context of ORS 197.772(8) suggests that the legislature
intended to eliminate local governments’ use of historic des-
ignations to protect and preserve historic properties long-
term and therefore meet their obligations under Goal 5.
Rather, what that context shows is that the legislature
sought to adjust that existing framework to strike a more
equitable balance between the countervailing interests of
historic preservation and property rights. For example, even.
as the legislature sought to provide an additional right to
some owners, it tempered that objective by including within
the same statute a provision aimed at ensuring local com-
munities every opportunity to save historically important
properties prior to their demolition or alteration. See ORS
197.772(2) (establishing mandatory delay period following
refusal to consent to designation during which demolition
or significant alternation is prohibited, in order to facilitate
alternative means of preservation); see also Tape Recording,
House Committee on General Government and Regulatory
Reform, SB 588, May 4, 1995, Tape 130, Side B (statements
of Sen Dwyer describing purpose of delay provision and Rep
Patricia Milne criticizing its effect as undermining owner
right to refuse designation).

Po 139

Similarly weighing against the Trust’s argument is
the fact that the legislature, presented with the opportunity
to modify the existing statutory and regulatory framework
that governed local historic preservation programs under
Goal 5, chose to leave that framework intact. For example,
although other legislation passed around the same time as
the bill that created ORS 197.772 directed LCDC—the state
agency tasked with developing and administering Oregon’s
statewide planning goals, including Goal 5—to amend its
statewide planning goals and regulations in accordance with
other specific changes to the same statutory scheme, the leg-
islature did not provide any such direction to LCDC with
respect to modifying its Goal 5 program in light of the new
owner consent provisions enacted in ORS 197.772. Compare
Or Laws 1995, ch 521, §§ 1-4 (bill passed earlier in the same
month as SB 588 amending ORS chapter 197 and directing
LCDC to “amend and adopt rules and guidelines, as neces-
sary, to implement the provisions of this Act”) and Or Laws
1995, ch 299, §§ 1-3 (bill passed six weeks before SB 588
directing LCDC to modify its approach to statewide land
use planning in specific ways, for example, by requiring it
to “allow for the diverse administrative and planning capa-
bilities of local governments” and to “assess what economic
and property interests will be, or are likely to be, affected by
[a] proposed rule”) with Or Laws 1995, ch 595, §§ 23-26 (bill
passed two days before SB 588 modifying statute relating to
LCDC’s amendment of existing land use planning goals but
neither addressing owner consent provisions to be enacted
in ORS 197.772 nor modifying existing process for historic
preservation under Goal 5). That the legislature did not
modify that existing framework at all, nor direct LCDC to
revise its regulatory approach to Goal 5, suggests that the
legislature intended ORS 197.772(3) to operate in a way that
would not significantly impact the overall scheme for his-
toric preservation pursuant to Oregon’s statewide planning
goals and process as it existed at that time.

Tn light of that context, and the absence of any evi-
dence suggesting that the legislature intended to dismantle
the established statutory and regulatory framework for the
protection of historic properties under Goal 5, we are hes-
itant to construe ORS 197.772(3) in a manner that would

140

lead to such a result. Cf Baker v. City of Lakeside, 343 Or
70, 76, 164 P3d 259 (2007) (court is “hesitant” to read stat-
ute in manner inconsistent with well-established principles
of law absent clear indication of intent); see also, e.g., State
v. Miller, 309 Or 362, 368-69, 788 P2d 974 (1990) (conclud-
ing that in light of legislature’s long-standing preference for
making offense of driving under the influence easier to pros-
ecute, it was “preposterous” to infer that it revised statute
to add requirement that driver have culpable mental state).
Rather, considering the legislature’s expression of support
for both the use of local land use regulations to preserve his-
toric properties and for the protection of property owners’
economic interests, the most plausible interpretation of ORS
197.772(8) is one that furthers both of those objectives.

Finally, additional context supporting LOPS’s inter-
pretation of ORS 197.772(3) can be found in the dramati-
cally different way that historic designation affects property
owners, depending on when they acquired their property. As
noted, when an historic designation is placed on a property
for the first time, that action ordinarily triggers the applica-
tion of legal restrictions—often in the form of local land use
and zoning ordinances—on the owner's ability to use and
develop that property. Rose, Preservation and Community
at 497. That designation may have a significant, and some-
times negative, impact on the value of the property. Id. at
497-98; Asabere, Adverse Impacts at 232. It is for that rea-
son that some see the imposition of an historic designation
against the owner’s wishes as a violation of that owner’s
property rights.

Such concerns are muted, however, when historic
designation is enforced against an owner who acquired its
property with the designation already in place, and who
therefore had actual or constructive notice of such restric-
tions from the outset.!2 See Dodd v. Hood River County, 317
Or 172, 185, 855 P2d 608 (1993) (noting that when a prop-
erty owner takes title with a land use regulation in place,

2 Even if a local historic designation is not disclosed by a property title
search, that information is public and readily ascertainable from planning
authorities, See, e.g., LOC 50.06.009 (2036) (provision of Lake Oswego city code
listing all properties on Landmark Designation List and describing zoning
restrictions applicable to listed properties).

po 141

owner has at least constructive notice that property’s use
is subject to those restrictions). At that point, to the extent
that a previous designation may have diminished the prop-
erty’s value, that diminution is reflected at the time of trans-
fer, and therefore, informs not only the reasonable expec-
tations of the successor, see id. (regulations existing when
owner takes property inform reasonable investment-based
expectations as to its use), but the actual contents of the
bundle of property rights that the successor obtains at that
time. 73 CJS Property §§ 3-4, 6 (2016) (property interest in
land includes right to use and develop land, subject to lim-
its imposed by lawful land use regulations); see also ORS
93.040(1) (1995) (providing that any instrument transfer-
ring or contracting to transfer fee title to real property must
include statement it does not convey right to use property in
violation of applicable land use laws and that before accept-
ing, party acquiring property should check with appropriate
local government body to verify approved uses).

As a result, whatever harm an owner may suffer
as a result of the imposition of an historic designation, that
harm does not flow to its successor-in-interest, who acquires
the property with notice of the designation and, most likely,
at a price or valuation that reflects that designation. Under
those circumstances, the ability to remove a previously-
imposed designation at will would constitute a windfall for
the successor. Cf Dodd, 317 Or at 185 (having taken title
with regulation in place and therefore with at least con-
structive notice of it, owner has no reasonable expectation
of using property in manner inconsistent with that regula-
tion). Considering that difference in the way that original
and subsequent property owners are affected by an historic
designation, it is more likely that the legislature intended
the term “a property owner” in ORS 197.772(3) to mean
the property owner at the time a property was designated,
rather than an owner who acquired the property later.

The text of ORS 197.772, and the remedies that
subsections (1) and (3) provide, ‘is consistent with distin-
guishing between owners at the time of designation—
whose economic interests may be adversely affected by the
designation—and those who, because they acquired their
property with the designation in place, have no reasonable

1 ee

expectation of using their property in a manner inconsis-
tent with any regulations that accompany that designation.
If we interpret the phrase “a property owner” as apply-
ing only to owners at the time of designation in both ORS
197.772(1) and (3), all owners whose property interests may
be harmed as a result of the imposition of an unwanted his-
toric designation are protected in a similar manner from
that harm. Subsection (1) addresses that potential harm by
providing that owners who object to the designation of their
properties may avoid designation during the designation
process by refusing to consent in the first place. See ORS
197.772(1) (“Notwithstanding any other provision of law, a
local government shall allow a property owner to refuse to
consent to any form of historic property designation at any
point during the designation process.” (Emphasis added.)).
Subsection (3) provides an opportunity to the same group of
owners to address the harm they have already experienced,
by allowing them to refuse consent retroactively and remove
those designations that were previously imposed on them.
See ORS 197.772(8) (allowing “a property owner” to remove
“a historic property designation that was imposed on the
property by the local government”). On the other hand, all
subsequent owners—who suffer no harm to their property
interests—are bound by those historic designations that
existed when they acquired the property.

As the foregoing analysis demonstrates, while the
text of ORS 197.772(3) is ambiguous, the most plausible
reading of that provision, when read in context, is one that
furthers both the objective of historic preservation generally
and the goal of ensuring that historic designations are not
placed on properties against an owner’s wishes. Considering
the text against that background, we conclude that the leg-
islature most likely did not intend ORS 197.772(3) to apply
to all owners of designated properties, but instead to mem-
bers of a more specific class: those who owned their property
at the time that the designation was placed on the property.

C. Legislative History

Because the legislative history is also helpful in this
case, we consider whether it is consistent with the meaning
that the text and context suggest. See Gaines, 346 Or at 172

Po 143

(court may consider legislative history to the extent useful for
statutory interpretation). As discussed below, there is noth-
ing in the legislative history of ORS 197.772 that definitively
answers the question of whether the removal provision in
ORS 197.772(3) was intended to apply to successive owners
of designated properties. That said, there is some evidence
that bears on what the legislature expected to achieve in
enacting that provision. Overall, that history weighs in
favor of interpreting the phrase “a property owner” as refer-
ring only to owners at the time of designation.

One relevant aspect of a provision’s legislative his-
tory is the particular purpose for which it was created. See,
e.g, SAIF v. Drews, 318 Or 1, 6-7, 860 P2d 254 (1993) (look
ing to legislative history of worker’s compensation statute
and considering purpose for which new language was added
to discern legislature’s intent). In this case, that background
is both extensive and probative. Senate Bill 588—the bill
that created ORS 197.772—originated in response to citi-
zen agitation on the issue of property rights and local con-
trol, particularly by property owners in Yamhill County. See
Tape Recording, Senate Committee on Water and Land Use,
SB 588, Mar 30, 1995, Tape 78, Side A (statement of Sen.
Rod Johnson, Committee Chair, describing history of owner
consent provisions in SB 588 and their 1993 predecessors
in HB 2124); Exhibit 10, Senate Revenue & School Finance
Committee, HB 2124, July 20, 1993 (statement of Yamhill
County Commissioner Dennis Goecks, explaining impetus
for legislation creating statutory right to refuse consent to
local historic designation). In 1989, the Yamhill County
Board of Commissioners had passed a local law, Ordinance
479, which made owner consent a condition precedent to any
historic landmark designation. Yamhill County, 99 Or App
at 444. That ordinance was created in response to specific
concerns about property rights which had arisen from the
application of Yamhill County’s historic preservation law,
enacted just the year before. Id.; see also Yamhill County
Ordinance No. 479, p. 1 (Apr 19, 1989) (describing reasons
for adopting ordinance).

Ordinance 479 contained two key provisions. First,
it mandated that the local government “shall not designate

144

a landmark without the consent of the owner of the land-
mark.” Ordinance 479, Exhibit A § 4(6). Second, it included
a mechanism for the removal of those designations that had
already been imposed under the county’s preservation ordi-
nance, providing a period of 60 days after the ordinance
went into effect during which owners of previously desig-
nated properties could request to have those designations
removed. Id. § 4(8)(a). That removal right was not open-
ended, however. The ordinance also provided that after that
initial remedial period, all existing historic designations,
whether they were imposed on the property with the own-
er’s consent or not, would remain on the property so long as
it continued to qualify for landmark status. See id. § 4(8)(b)
(providing that after 60-day remedial period ended, “con-
sent of the owner shall not be required to continue the desig-
nation” (emphasis added)).

Ultimately, Yamhill County’s attempt to condition
the designation of historic properties on the owner’s consent
was short-lived. Opponents challenged Ordinance 479 and
the Court of Appeals struck it down as inconsistent with
the requirements of LCDC’s implementing regulations for
Goal 5. Yamhill County, 99 Or App at 446-47. The owner
consent provisions enacted in ORS 197.772 were intended to
override that decision and to afford property owners across
the state the same right that Ordinance 479 had attempted
to provide constituents in Yamhill County: the right to refuse
the imposition of an unwanted historic designation on their
property. See Tape Recording, House Committee on General
Government and Regulatory Reform, SB 588, May 2, 1995,
Tape 126, Side A (statement of Rep Leslie Lewis explain-
ing purpose of consent provisions); Tape Recording, Senate
Revenue & School Finance Committee, HB 2124, July 20,
1993, Tape 270, Side B (statement of Dennis Goecks, asking
legislature to override decision in Yamhill County case and

18 Representatives Patricia Milne and Leslie Lewis, co-sponsors of the
removal provision enacted in ORS 197.772(3), both represented districts that
included Yamhill County. Representative Milne was involved in earlier versions
of the legislation that created ORS 197.772. See Minutes, Senate Committee on
Revenue and School Finance, HB 2124, July 20, 1998 (testimony of Rep Patricia
Milne urging passage of owner consent provision in 1993 version of historic prop-
erty preservation bill).

po 145

give owners of historic properties right to refuse historic
designation).

By the time that SB 588—the bill that created
ORS 197.772—was passed and signed into law, nearly five
years had passed since the Court of Appeals had over-
turned Ordinance 479. The removal provision, codified in
ORS 197.772(8), was added to SB 588 for the express pur-
pose of addressing that long delay and ensuring that the bill
achieved its proponents’ original intent. Tape Recording,
House Committee on General Government and Regulatory
Reform, SB 588, May 2, 1995, Tape 126, Side A (statement
of Rep Leslie Lewis). As explained by one of the legislators
who co-sponsored the amendment:

“In [Yamhill] county, many people have been coerced into
the historic property designation and I believe that some
of those people are waiting for [this legislation] to become
law so that they can petition to be removed from historic
property designation.”

Id, By allowing owners to remove historic designations that
were previously imposed over their objections, the sponsors
of the removal provision in subsection (3) aimed to bring the
language of SB 588 closer to what its proponents in Yamhill
County had been seeking all along. See Tape Recording,
House Committee on General Government and Regulatory
Reform, SB 588, May 2, 1995, Tape 126, Side A (statement
of Rep Patricia Milne).

Given that history, it is unsurprising that the pro-
visions in ORS 197.772 and Yamhill County Ordinance 479
are very similar. Both laws aimed to ensure that historic
property designations were not placed on properties unless
the owners consented, and both achieved that aim in two
ways: first by providing that owners of properties that had
not yet been designated had the right to refuse to consent
during the designation process, and second by allowing
owners whose property was already designated to request
its removal. Compare Ordinance 479, Exhibit A §§ 5(6) - (8)
with ORS 197.772(1), (3). As already discussed, however,
Ordinance 479 did not make all historic designations per-
manently subject to the wishes of their owners, especially
when the owner did not acquire the property until many

6

years later. It allowed only a limited time after its enact-
ment during which owners could remove designations and
specifically provided that, after that point, the owner’s
preferences would no longer be relevant to whether a pre-
viously designated property would remain designated. See
Ordinance 479, Exhibit A § (5)(8).

The fact that the provisions codified in ORS 197.772
were created to achieve the same result as Ordinance 479
suggests that the state lawmakers who drafted and passed
them did not intend the right to remove an historic des-
ignation under ORS 197.772(3) to be entirely open-ended,
either. Rather, the narrowness of the removal provision in
Ordinance 479 suggests that the legislature intended the
removal provision in ORS 197.772(3) to provide a simi-
larly limited removal right to only certain property owners.
Likewise, the fact that Ordinance 479 provided that his-
toric designations that were left in place would thereafter
remain, so as long as the property continued to meet objec-
tive criteria, confirms that such designations were viewed
as a long-term mechanism that would, and was intended to
be, binding on subsequent owners.

The Trust contends that the facts that ORS
197.772(3) was created to override the Court of Appeals’
decision in the Yamhill County case and that it was meant
to aid a particular group of property owners does not mean
that it cannot apply to other owners as well. As we have
previously recognized, the legislature, in creating a stat-
utory remedy, sometimes uses language that applies to a
wider range of circumstances than the precise problem that
triggered legislative attention. Hamilton v. Paynter, 342 Or
48, 55, 149 P3d 131 (2006). Nonetheless, that the legislature
had a particular aim in mind is persuasive evidence of what
it intended a provision to mean. See, e.g., State v. Partain,
349 Or 10, 20, 239 P3d 232 (2010) (considering history of
amendment, including that it was adopted in response to
Court of Appeals decision, as relevant background inform-
ing analysis of what legislature likely intended).

Unlike cases where we have adopted the more
expansive interpretation of an ambiguous statute, the legis-
lative history of ORS 197.772(8) reveals that the legislators

es 147

who created that provision did intend something more spe-
cific. See Walker, 356 Or at 21 (describing and discussing
prior cases where legislature has adopted broad solutions to
specific problems and concluding that in that case, nothing
in legislative history suggested legislature intended statu-
tory term to be narrower than its ordinary meaning).“ In
fact, when SB 588 was still in committee, one legislator
posed the very question now before this court:

“[Wlould that mean that if somebody bought a piece of
property that had been designated, *** that was clear
when they bought it and then they move in and the minute
they got there they could say, ‘Well, we’re sorry, we don’t
want to be historic anymore?’”

Tape Recording, House Committee on General Government.
and Regulatory Reform, SB 588, May 2, 1995, Tape 126,
Side A (question by Rep Ross). Although no one answered
that question directly, one of the removal provision’s co-spon-
sors explained that they had created that provision to help
those property owners, particularly in Yamhill county, who
had, since the implementation of Goal 5, “been coerced into
the historic property designation” and who had been wait-
ing for the passage of a statutory remedy “so that they can
petition to be removed from historic property designation.”
Tape Recording, House Committee on General Government.
and Regulatory Reform, SB 588, May 2, 1995, Tape 126,
Side A (statement of Rep Leslie Lewis) (emphasis added).
As to whether that provision could also apply to a subse-
quent purchaser, she noted that that was a situation that
they “frankly hadn’t thought about.” Id.

As the above-quoted exchange illustrates, this is
not a case where the legislative history demonstrates that
the legislators who enacted a provision were aware that it
was likely to be read in a particularly broad way, and yet
consciously declined to narrow it. Cf Walker, 356 Or at 22
(more expansive interpretation of statutory text is particu-
larly appropriate “where the legislative history demonstrates

¥ Given that the text in this case is reasonably susceptible to more than one
interpretation, this is not a case where “the express terms of a statute indicate
such broader coverage” such that “it is not necessary to show that [it] was [the
legislature's] conscious purpose.” South Beach Marina, Inc. v. Dept. of Rev., 301
Or 524, 531, 724 P2d 788 (1986).

148

that the legislature was aware of the expansive nature of an
enactment’s text, yet chose not to narrow it”). The Court
of Appeals found it significant that one legislator suggested.
that if the amendment to SB 588 that created the right to
remove existing historic designations was passed, it could
lead to the dismantling of local historic districts and that the
legislature voted for it anyway. Lake Oswego Preservation
Society, 268 Or App at 821. It appears that the court was
referring to a comment by Representative Bryan Johnston
during one committee hearing that the removal provision
would “wreak havoc on the historic districts.” See Tape
Recording, House Committee on General Government and
Regulatory Reform, SB 588, May 4, 1995, Tape 130, Side B
(statement of Rep Bryan Johnston). The Trust argues that
that comment shows that the legislature was aware that
allowing the removal of designations could undermine exist-
ing programs under Goal 5 and, therefore, that the legisla-
ture intended the removal right in ORS 197.772(3) to apply
more broadly.

What was meant by Representative Johnston’s
comment, however, is unclear. Although he was clearly con-
cerned that the removal provision might negatively impact
historic preservation efforts generally, he said nothing
about the issue of whether subsequent owners of desig-
nated properties may invoke that right. To the extent that
Representative Johnston was worried that allowing some
owners to remove designations could undermine existing
historic districts or make new ones less comprehensive, it
does not follow that he and others anticipated, or expected,
the long-term destabilization of the entire system of historic
designation that would tend to result if any future owner
could exercise the removal right in ORS 197.772(3). As a
result, Representative Johnston’s statement—made in isola-
tion and without any follow-up explanation or discussion—is
insufficient to support any inference about whether the leg-
islature anticipated, or intended, that the removal right in
ORS 197.772(3) would apply to subsequent property owners
like the Trust.

Although the question was posed, no one asserted
that the removal provision in ORS 197.772(8) would apply

Po 149

to owners who acquired their properties post-designation
or that it would allow such owners to remove those desig-
nations—and any accompanying land use restrictions—
that were in place at the time of acquisition. To the con-
trary, the legislators who created ORS 197.772(3) expressed
the view that owners who acquired historic properties that
were already subject to such restrictions would be bound
by those restrictions. For example, when asked later in the
same hearing whether the proposed removal right would
affect the ability of local governments to protect previously
identified historic properties through existing land use ordi-
nances and regulations, one of the co-sponsors of that provi-
sion responded:

“[Rep. Lewis:] My intent *** is that those local ordi-
nances are not disturbed because some of them might even
be attached, too, as you purchase the property—You know
that you are buying into [a downtown historic district], for
example, and there are certain ordinances that you have
to abide by.

«|

(Rep. Ross:] So this would not affect areas that are pro-
tected by local ordinance?

«|

Rep. Lewis:] That’s my intent, yes.”

Tape Recording, House Committee on General Government
and Regulatory Reform, SB 588, May 2, 1995, Tape 126,
Side A (statement of Rep Leslie Lewis). As Representative
Lewis's explanation clarifies, the legislators who created the
designation removal provision in ORS 197.772(8) believed
and anticipated that owners who acquired historic proper-
ties that were already subject to protection under local land
use ordinances—and who, therefore, were not “coerced” into
the historic property designation at all—would be required
to abide by those ordinances.

That understanding also makes sense in light of the
legislature’s apparent concern with ensuring that Oregon’s
owner consent law was consistent with the National Historic
Preservation Act, an issue to which substantial time was
devoted in both houses during the 1995 session. See, e.g.,
Tape Recording, Senate Water and Land Use Committee,
SB 588, Mar 22, 1995, Tape 66, Side A (discussion between.
witnesses and legislators regarding operation of National

150

Historic Preservation Act and how proposed owner con-
sent provisions related to that law); Tape Recording,
House Committee on General Government and Regulatory
Reform, SB 588, May 4, 1995, Tape 131, Side A (discus-
sion between Bob Meinen, Director Oregon Parks and
Recreation Department and Rep Markham regarding
National Register and whether proposed owner consent
provision was consistent with it) and Side B (statement of
Rep Patricia Milne that purpose of SB 588 was to address
potential conflict with National Registry program that
arose with previous version of legislation passed during
1993 session).

As those discussions reveal, the legislators who sup-
ported the owner consent and removal provisions codified
in ORS 197.772 were aware that while federal law requires
the owner’s consent for an individual property to be desig-
nated and added to the National Register of Historic Places,
an owner who acquires a property that is already on the
Register does not have the right to remove it. See, e.g., Tape
Recording, House Committee on General Government and
Regulatory Reform, SB 588, May 2, 1995, Tape 126, Side A
(statement of Rep Leslie Lewis, explaining National Register
of Historic Places procedures, including that “[t]he person
initially would have had some rights not to be on the list-
ing, but if you buy a house already listed, you cannot get off
the listing”); see also generally Bronin, Historic Preservation
Law at 64-73 (describing how National Register of Historic
Places works). By focusing on owner consent at the time of
designation, rather than on the preferences of those who
might later acquire a property, the legislature would have
made Oregon’s system of local historic designation consis-
tent with that which was already in place under federal
law.

That the legislature’s overriding concern was pro-
tecting the interests of property owners at the time of des-
ignation, and that the removal provision in ORS 197.772(3)
was intended as a limited remedy for those owners whose
property interests had been negatively affected by the
imposition of an historic designation against their will, is
confirmed by other statements made while SB 588 was in

Po 151

committee. For example, when another legislator asked a
question about how the various subsections of the owner
consent statute would work together, one of the removal pro-
vision’s co-sponsors reiterated that it was intended to help
those owners who had designations imposed on “them”:

“[Rep. Johnston:] I’m just trying to understand how these
things merge. *** [W]e are granting a property owner
the right to refuse consent to any form of historic property
([designation]—if they choose to. They could choose to agree.
You know, I have a piece of property in downtown Ashland,
and I decide to agree. Could I then, under [the removal pro-
vision], then decide, two years later to take it out?

“[Rep. Milne:] Representative Johnston, my intent in
this amendment, where it says on line 3, that the ‘historic
designation that was imposed on the property, my feeling
there is that what we are trying to say—what my intent
was—was that when property owners were not allowed to
consent and the government imposed it on them, that now
they would have an opportunity to remove their property
from that designation.

“[Rep. Johnston:] Okay let’s call that Class A, so I under-
stand those. So now I’m talking about Class B, a person
who does it under [subsection (1)]—had the opportunity to
not do it, went ahead and did it—can they, two years later,
under [subsection (2)] take their property out?

“{Rep. Milne:] That was not my intent Representative
Johnston.”

Tape Recording, House Committee on General Government
and Regulatory Reform, SB 588, May 4, 1995, Tape 130,
Side B (exchange between Rep Bryan Johnston and Rep
Patricia Milne) (emphasis added). As Representative Milne’s
explanation suggests, the drafters’ intent was not to make
local historic designations permanently contingent on the
desires of the persons who own that property at any point
in time, but to provide a remedy for those particular owners
who, at the time of designation, “were not allowed to consent”
and who, therefore, had historic designations imposed “on
them.” Id.¥*

% The Court of Appeals relied on this exchange in concluding that the
removal provision of ORS 197.772(8) was not intended to be limited to the prop-
erty owner at the time of designation. 268 Or App at 821. As discussed in the

152

The Trust complains that the legislative history
bearing on what the legislature intended the text of ORS
197.772(3) to mean is limited in nature and does not exclude
the possibility that that provision applies to successive
owners of involuntarily designated properties. Were there
little else to aid us in discerning what the legislature
intended, we might be reluctant to rely on the sort of legis-
lative history that is available here. However, as our discus-
sion in the foregoing sections demonstrates, that history is
consistent not only with the text of ORS 197.772(3), but with
the extensive legislative and regulatory background against
which the legislature acted when it created that provision.’

That background shows that the legislature’s inter-
est in enacting the owner consent provisions set out in ORS
197.772 was not to make all local historic designations per-
manently contingent on an owner’s wishes, nor to simply
unburden properties from existing designations that are
now unwanted. Rather, the legislature sought to create a
system where, to the extent possible, historic designations
are not placed on properties unless the owner at that point
in time agrees. Even as the legislature sought to make the
process of designating properties as historic voluntary, how-
ever, it understood the value of local historic preservation
programs under the Goal 5 framework and wished to con-
tinue to foster the long-term protection of historic properties
through such programs.

With the creation of ORS 197.772, the legislature
adjusted what some saw as an unfair system and struck

text, however, the focus of the exchange was on the meaning of the requirement
in the statute that the designation be “imposed” on the property. Although it is
true that Representative Milne’s response does not exclude the possibility that
the term “a property owner” includes successors-in-interest, it offers no support
for the conclusion that it does except by negative inference.

% Furthermore, the legislative history to which the Trust points in sup-
port of its reading of ORS 197.772(3) is thin and far less persuasive than that
which supports LOPS’s reading of that statute. For example, the Trust relies
heavily on the fact that one particular amendment to the owner consent statute,
which would have specified that consensual designations run with the land to
subsequent owners, was stripped from the bill by the conference committee. In
so doing, the Trust asks us once again to draw several negative inferences from
legislative silence and inaction. For the reasons already discussed, however, that
aspect of the legislative history is not helpful, especially given that the legislative
record offers no indication as to why that amendment was ultimately rejected.

Po 158

a new and careful balance between those two objectives.
Although local governments continued to be required, pur-
suant to Goal 5, to identify, designate and regulate historic
resources in order to protect them long-term, those owners
whose property interests were adversely affected by local
historic designation were guaranteed a role in determin-
ing whether their property became subject to that regula-
tory regime. But later owners, who acquired properties that
already had been designated as historic, acquired those
properties subject to that designation and the restrictions
that accompanied it.

Il. APPLICATION

We now turn to the question of whether the Trust
may utilize ORS 197.772(3) to remove the historic designa-
tion from the Carman House. As discussed above, a property
owner must satisfy two requirements to use the statutory
remedy in ORS 197.772(3) to remove an historic designation
that was previously placed on its property. First, the owner
must establish that it was the owner of the property at the
time that it was designated. Second, it must establish that
the designation was “imposed” on the property by the local
government.

Although the record is not complete as to the his-
tory of conveyances for the Carman House, the salient
points are clear. The property was acquired in 1978 by
Richard Wilmot, a descendant of the original settlers who
established the homestead and built the Carman House,
together with his wife, Mary Wilmot. In 1990, the city of
Lake Oswego included the property on its inventory of his-
toric properties, designating it as a landmark because it was
part of an historic “farm complex.” At that time, Richard
‘Wilmot objected to the designation and sought, unsuccess-
fully, to have it removed. Two years later, the city reconsid-
ered its decision and, in 1992, after assessing the value of the
Carman House as a stand-alone landmark, determined that
the historic designation on that property should be retained.
That designation remains in place today. Eventually, the
property changed hands when, in 2001, Mary Wilmot trans-
ferred it by warranty deed to her son Richard Wilmot II, as
the trustee of the Mary Cadwell Wilmot Trust. In order to

rT

facilitate the development of the property, the Trust began
its effort to have the historic designation removed in 2013.

For the reasons discussed, we agree with LUBA
that the right to remove an historic designation under ORS
197.772(8) applies only to those owners who held title when a
local historic designation was first imposed and not to those
whose property was already designated at the time they
acquired it. Because the Trust acquired the Carman House
property after it was designated, it does not qualify as “a
property owner” within the meaning of ORS 197.772(3). As
aresult, the Trust cannot use ORS 197.772(3) to remove the
historic designation from the Carman House now.”

The decision of the Court of Appeals is reversed. The
final order of the Land Use Board of Appeals is affirmed.

1” Because we conclude that the Trust does not qualify as “a property owner”
within the meaning of ORS 197.772(3), we do not reach the question of whether
the designation at issue in this case was “imposed” by the city.

155

Argued and submitted November 12, 2015, decision of Court of Appeals
reversed, order of Workers’ Compensation Board affirmed August 4, 2016

In the Matter of the Compensation of
Roger J. Thompson, Claimant.
SAIF CORPORATION
and Clackamas County Fire District #1,
Respondents on Review,
ve
Roger J. THOMPSON,
Petitioner on Review.
(WCB 10-06391; CA A152618; SC S063020)
379 P3d 494

Nelson R. Hall, Bennett Hartman Morris and Kaplan,
Portland, argued the cause for petitioner on review.

156 Po

Julie Masters, Appellate Counsel, SAIF Corporation,
Salem, argued the cause and filed the brief for respondents
on review.

Sara Ghafouri, Haglund Kelley, LLP, Portland, filed the
brief for amicus curiae Oregon Trial Lawyers Association.

Sarah K. Drescher, Tedesco Law Group, Portland, filed
the brief for amicus curiae International Association of Fire
Fighters. With her on the brief were Thomas A. Woodley, David
Ricksecker, and Sara A. Conrath, Woodley & McGillivary,
Washington, D.C.

Before Balmer, Chief Justice, and Kistler, Walters,
Landau, Baldwin, Brewer, and Nakamoto, Justices.**

KISTLER, J.

The decision of the Court of Appeals is reversed. The
order of the Workers’ Compensation Board is affirmed.

** Linder, J., retired December 31, 2015, and did not participate in the deci-
sion of this case.

pe 157
KISTLER, J.

The question in this workers’ compensation case
is how a statutory presumption, colloquially known as the
“firefighters’ presumption,” applies. See ORS 656.802(4)
(stating that presumption). In this case, no one disputes
that claimant proved the predicate facts, which gave rise
to a presumption that his heart attack “result[ed] from” his
work as a firefighter and thus was an occupational disease.
See id. No one also appears to dispute that the effect of the
presumption was to shift the burden of persuasion to SAIF
to prove by clear and convincing evidence that “the cause
of {claimant’s] condition [wa]s unrelated” to his work as a
firefighter. See id. (stating that requirement).

After considering SAIF’s medical evidence, the
Workers’ Compensation Board (board) found that the evi-
dence did not satisfy SAIF’s burden of persuasion and
entered an order finding that claimant’s heart attack was
a compensable occupational disease. The Court of Appeals
reversed. SAIF v. Thompson, 267 Or App 356, 340 P3d 163
(2014). It reasoned that the board had implicitly and incor-
rectly concluded that only one type of medical evidence (evi-
dence of risk factors unique to the claimant and unrelated.
to his work) would rebut the presumption. Id. at 364-65.
Having determined that the board applied an incorrect legal
rule, the Court of Appeals reversed its order. Id. at 367. We
allowed claimant’s petition for review and now conclude that
the Court of Appeals misperceived the basis for the board’s
order. We also conclude that the board reasonably found, on
the evidence before it, that SAIF had failed to satisfy its

1 ORS 656.802(4) provides:

“Death, disability, or impairment of health of firefighters of any polit-
ical division who have completed five or more years of employment as fire-
fighters, caused by any disease of the lungs or respiratory tract, hypertension
or cardiovascular-renal disease, and resulting from their employment as fire-
fighters is an ‘occupational disease.’ Any condition or impairment of health
arising under this subsection shall be presumed to result from a firefighter’s
employment, However, any such firefighter must have taken a physical exam-
ination upon becoming a firefighter, or subsequently thereto, which failed
to reveal any evidence of such condition or impairment of health which pre-
existed employment. Denial of a claim for any condition or impairment of
health arising under this subsection must be on the basis of clear and con-
vineing medical evidence that the cause of the condition or impairment is
unrelated to the firefighter’s employment.”

158 P|

burden of persuasion. We accordingly reverse the Court of
Appeals decision and affirm the board’s order.

Before setting out the facts in this case, we first
describe the statutory context in which the case arises.
Ordinarily, workers seeking compensation for an “occupational
disease” must “prove that employment conditions were the
major contributing cause of the disease.” ORS 656.802(2)(a);
see also ORS 656.802(1) (defining “occupational disease”).
However, in 1961, the Oregon legislature adopted a statu-
tory presumption that, if the claimant established certain
predicate facts, the claimant’s condition resulted from his
or her employment and was an occupational disease. See Or
Laws 1961, ch 583, § 1. Proponents of the bill explained that,
according to statistical studies, firefighters are more likely
than other occupations to develop heart and lung diseases,
due to smoke and gas exposure in strenuous conditions, and
that firefighters should not bear the burden of demonstrat-
ing that a disease or condition was caused by firefighting.
See Minutes, Senate Labor and Industries Committee, HB
1018, Mar 8, 1961. The legislature accordingly established
a “disputable presumption” that firefighting causes certain.
types of occupational diseases. See Minutes, House Labor
and Industries Committee, Feb 2, 1961, p 2. The legislature
amended the statute in 1977 by clarifying that a claim could
be denied “on the basis of medical or other evidence that
the cause of the fireman’s condition or impairment [was]
unrelated” to firefighting. See Or Laws 1977, ch 734, § 1 (so
providing).

In Wright v. SAIF, 289 Or 323, 613 P2d 755 (1980),
this court explained that the statute, as amended in 1977,
created a disputable presumption, that the effect of the
presumption was to shift the burden of production to the
employer, and that, if an employer met its burden of produc-
tion, then the trier of fact had to determine which way the
evidence preponderated. Id. at 331-32.? The court did not
decide whether the presumption also shifted the burden of
persuasion to the employer; rather, the court left open the

2 As we read Wright, the court used the phrase “disputable presumption” as
a synonym for “rebuttable presumption.” See Wright, 289 Or at 331-32; of State v.
Dahl, 336 Or 481, 486, 87 P3d 650 (2004) (discussing rebuttable presumptions).

Po 159

question of what effect the presumption would have if the
evidence were in equipoise. Id. at 331 n 5. It noted that the
members of what was in that case a four-person court were
equally divided on that question. Id.

In 1983, the legislature addressed the question
that the court had left open in Wright. At the request of
the Oregon State Fire Fighters Council, Representatives
Whallon and Gold introduced House Bill (HB) 2700 (1983).
As originally introduced, HB 2700 would have made the
firefighters’ presumption conclusive; that is, if a firefighter
suffered from a heart or lung condition, established that he
or she had served as a firefighter for at least five years, and
proved that a physical examination failed to reveal that the
condition preexisted the firefighter’s employment, then it
would be conclusively presumed that the condition resulted
from employment. Bill File, HB 2700, Mar 30, 1983.

A representative of the Oregon State Fire Fighters
Council explained that the presumption should be conclusive
because some “medical practitioners *** do not believe that
physical and mental stress causes heart disease.” Testimony,
House Committee on Labor, HB 2700, Mar 30, 1983, Ex E
(statement of Tom Whelan). In the Council’s view, employers
could defeat the current presumption by simply finding “one
or more physicians to say that in their opinion the condition
did not result from the workplace.” Id.

Representatives from local governments opposed
making the presumption conclusive. The personnel director
for the City of Salem testified that a conclusive presump-
tion would increase the number of compensable claims
because cities and other employers would be unable to show
that a firefighter’s cardiovascular or pulmonary disease
was “primarily the result of non-firefighting employment
related risk factors such as outside employment, smoking,
hypertension, heredity, [gender], obesity, sedentary life-
style and age.” Testimony, House Committee on Labor, HB
2700, Apr 18, 1983, Ex E (statement of Darrell Dearborn).
He explained that “[olur princip[al] concern with this bill
is that it removes in total any possibility that medical evi-
dence can be introduced to challenge compensability.” Id.
Similarly, the Assistant City Attorney for the City of Salem

PO
160 P|

argued that a conclusive presumption would establish “a
rule of law, not a factual presumption[,] *** [meaning that
an] employer can submit no evidence of any other contribut-
ing factors to the firefighter’s condition, such as heredity, or
a lifetime of heavy smoking to support a denial of the claim.”
Testimony, House Committee on Labor, HB 2700, Apr 13,
1983, Ex F (statement of Jeannette Launer).

In response to those concerns, the Oregon State
Fire Fighters Council offered an amendment to “clarify the
bill and deal with the concerns of the opponents.” Minutes,
House Committee on Labor, Subcommittee on Workers’
Compensation Benefits, HB 2700, Apr 20, 1983, p 2. The
amended bill no longer made the presumption conclusive. It
provided that, if the claimant proved certain predicate facts,
it would be presumed that the claimant’s condition resulted
from his or her employment as a firefighter. Employers could
deny a claim only “on the basis of clear and convincing med-
ical evidence that the cause of the condition or impairment
is unrelated to the [firefighter’s] employment.” Bill File, HB
2700, A-Engrossed Bill, Apr 19, 1983. The bill, as amended,
passed both houses and was signed by the governor.

The 1983 amendment made two propositions clear.
First, if a claimant proved the predicate facts, then the
presumption shifted both the burden of production and
the burden of persuasion to the employer to prove that the
claimant's “condition or impairment is unrelated to the fire-
fighter’s employment.” Second, the employer must prove that
fact by clear and convincing evidence.’ The text and the leg-
islative history, however, do not provide as clear an answer
to the question that the Court of Appeals addressed in this
case—whether only evidence of individual risk factors that
are unrelated to employment may be offered to meet the
employer’s burden.*

5 In increasing the standard of proof to clear and convincing evidence, the
1983 amendment did not change the type of the evidence necessary to satisfy the
burden of persuasion. For a cogent explanation of how standards of proof allocate
risk and the public policies underlying those choices, see In re Winship, 397 US
358, 368-372, 90 S Ct 1068, 25 L Ed 2d 368 (1970) (Harlan, J., concurring).

4 ‘The usual sources of legislative intent look in different directions on that
issue. On one hand, the text of the amended statute refers to “medical evidence”
without limitation. On the other hand, the employers’ testimony that persuaded

po 161

In summary, ORS 656.802(4), as amended in 1983,
provides that a claimant must prove three predicate facts to
establish the firefighters’ presumption: (1) the claimant was
employed for five or more years as a firefighter for a political
division; (2) the claimant’s death, disability, or impairment
of health was caused by one of the listed diseases; and (3) a
physical exam failed to reveal that the condition or impair-
ment preexisted employment. If a claimant proves those
predicate facts, then the statute establishes a rebuttable
presumption that the condition or impairment “result[ed]
from [the] firefighter’s employment” and is an “occupational
disease.” ORS 656.802(4). The burden of both production
and persuasion then shifts to the employer to prove by “clear
and convincing medical evidence that the cause of the condi-
tion or impairment is unrelated to the firefighter’s employ-
ment.” Id.

With that background in mind, we turn to the facts
in this case. Claimant began working as a firefighter in
1991. In 2010, at the age of 44, claimant felt chest discom-
fort while using a treadmill and an elliptical machine at the
fire station. Two days later, while off duty, he experienced
muscular discomfort in his chest and neck, which prompted
him to seek medical treatment. Claimant’s cardiologists
concluded that he had had a heart attack, and they deter-
mined that the heart attack was caused by atherosclerosis—
essentially, a blocked artery due to coronary artery disease.
The cardiologists successfully treated claimant with angio-
plasty and stenting of the artery.

Claimant had no prior indication of cardiovascular
disease. He had had a physical examination before his employ-
ment as a firefighter and also periodic physical examina-
tions after he began working as a firefighter. None of those
examinations revealed evidence of cardiovascular disease.
Furthermore, claimant’s cardiologists determined that he
had no known family history of cardiovascular disease or
common risk factors for cardiovascular disease, such as

the 1983 Legislature to make the presumption rebuttable focused on the need to
present one type of medical evidence—individual risk factors unrelated to work—
to rebut the presumption, However, no witness expressly addressed whether that
type of medical evidence was the only medical evidence that an employer could
use to rebut the presumption.

162 P|

diabetes, obesity, high cholesterol, hypertension, or tobacco
use.

Following his heart attack, claimant filed a work-
ers’ compensation claim on the ground that his underlying
cardiovascular condition—atherosclerosis—resulted from
his employment as a firefighter and was a compensable
occupational disease. Claimant did not offer any medical
evidence to prove that his work caused his atherosclerosis.
Rather, he relied on the firefighters’ presumption. See ORS
656.802(4). Claimant contended, and SAIF did not dispute,
that claimant had established the predicate facts: he had
been employed for at least five years as a firefighter; he had
a cardiovascular disease; and his physical examinations
failed to reveal that his condition preexisted his employment.

After receiving his claim, SAIF asked claimant to
undergo an independent medical examination by Dr. Semler.
Semler examined claimant and also reviewed his medical
records. Semler issued a report that began by setting out
the question that Semler understood he had been asked to
address:

“Because this worker is filing a claim for an occupational
disease, he must establish that his life long work exposure
is the most significant factor in the development of his con-
dition. In other words, work by itself must outweigh the
significance of all other pertinent factors combined. We are
asking you to determine the major cause of the condition[.]”

In answering that question, Semler explained that “[t]he
exact etiology for atherosclerosis is not definitely known.”
He noted that, in reviewing the medical literature, he had
“not found any scientific evidence that firefighting per se
leads to atherosclerosis or hardening of the arteries.” He
identified certain “theories” as to why a person’s arteries
might become blocked but found that none applied in claim-
ant’s case. After observing that “[altherosclerosis is more
in keeping with the aging process in [claimant’s] case,” he
concluded that “it is highly probable that [claimant’s] work
as a firefighter is not the major contributing cause of his
cardiac condition.”

5 Semler’s report appears to be paraphrasing a legal standard supplied to
him by the entity that had requested the report.

po 163

Based on Semler’s report, SAIF denied the claim.
Claimant requested a hearing before the Hearings Division
of the Workers’ Compensation Board. Semler testified at
that hearing.’ Much of his testimony was devoted to pro-
viding background information regarding atherosclerosis
and heart attacks. Beyond that, his testimony reduced to
three propositions. First, Semler explained that atheroscle-
rosis starts as “a fatty deposit called a ‘fatty streak’” The
appearance of a fatty streak indicates the existence of a dis-
ease process or an injury to the inner lining of the artery.
However, what causes the injury to the artery or the disease
process to begin is not known.’ Once the streak appears
plaque attaches to it and builds up over time. The plaque
can cause a heart attack either because it builds up to such
an extent that it obstructs the artery (as in claimant’s case)
or because a piece of the plaque breaks off and blocks the
artery that way.

Second, Semler testified that there are risk factors
that contribute to the development of atherosclerosis. They
include obesity, smoking, high blood pressure, high choles-
terol, diabetes, and family history. Claimant did not exhibit
any of those risk factors. Rather, Semler concluded in his
report that “[a]therosclerosis is more in keeping with the
aging process in [claimant’s] case.” As noted, claimant was
44 years old when he suffered a heart attack.

Third, Semler testified that he could not say, based
on the medical evidence, that firefighting caused atheroscle-
rosis. Alternatively, he testified that firefighting “did not
play any role in [claimant’s] development of atherosclerosis.”
He explained the basis for that opinion:

“T’'ve never seen a paper that said firefighting caused ath-
erosclerosis. It’s not one of the things that doctors or cardi-
ologists would list. I just listed all of the potential causes;

* Claimant’s treating cardiologist, Dr. Dawley, also testified at the hearing.
The board reasonably found that Dawley’s testimony was equivocal regarding the
cause of claimant’s atherosclerosis and thus insufficient to rebut the presump-
tion. Accordingly, we summarize only Semler’s testimony, which was the focus of
the Court of Appeals’ reasoning.

1 In addition to stating in his report that the exact etiology of atherosclerosis
is not definitely known, Semler agreed on cross-examination that “the cause of
laying down of the fatty streaks *** [is] still unknown.”

164 Po

diabetes, obesity, hypertension, high cholesterol, family
history. But firefighting, I’ve never seen a paper that said
firefighting caused atherosclerosis.”

Given the foregoing reasoning, Semler agreed on direct
examination that claimant’s condition was “unrelated to his

employment as a firefighter.”

The administrative law judge (ALJ) found that
SAIF had “presented sufficient evidence to overcome the
presumption by clear and convincing evidence” and upheld
SAIF’s denial of the claim. The board reversed. We quote
the board’s reasoning in full because the Court of Appeals
concluded that, in finding that SAIF had not met its burden
of persuasion, the board applied an incorrect legal standard.

The board reasoned:

“Dr. Semler was unaware of ‘any scientific evidence that
firefighting per se leads to atherosclerosis ***? Dr. Semler
conceded that the ‘cause [of] atherosclerosis is still debat-
able? but asserted that the ‘current consensus’ related
atherosclerosis to ‘a multitude of factors[,] such as choles-
terol disorder, diabetes, smoking, hypertension, family his-
tory and other factors *** [,] including being sedentary’
Dr. Semler ultimately opined that claimant’s employment
as a firefighter played ‘no role whatsoever’ in his athero-
sclerosis and heart attack.

“We are not persuaded, however, that Dr. Semler’s opin-
ion satisfies SAIF’s ‘clear and convincing’ burden to over-
come the statutory presumption. Dr. Semler conceded that
the cause of atherosclerosis is unknown. Despite that con-
cession, Dr. Semler ruled out any contribution from claim-
ant’s employment as a firefighter. Dr. Semler did not per-
suasively explain, however, how he was able to make such
a categorical exclusion, given that the causes of that condi-
tion were unknown. The lack of such a persuasive explana-
tion is particularly significant, given that the record does
not establish that claimant had any identified ‘risk factors’
for atherosclerosis.

“In sum, after weighing the evidence, we find that SAIF
has not established, by clear and convincing medical evi-
dence, that the cause of claimant’s heart attack is unre-
lated to his employment.”

(Ellipses and brackets in original; citations omitted.)

pT 165

The Court of Appeals reversed. It recognized that
the board had stated that SAIF had failed to meet its bur-
den of persuasion. Thompson, 267 Or App at 363. The court
concluded, however, that the board implicitly had applied
an incorrect legal rule. The court reasoned that, “because
[Semler’s] explanation was not met with contrary evidence
or criticized by the board,” the board must have “viewed
Semler’s opinion as inadequate to overcome the presumption
because it lacked proof of the ultimate cause of claimant’s
atherosclerosis.” Id. at 364. That is, the Court of Appeals
read the board’s order as requiring proof of individual risk
factors unrelated to the claimant’s work, such as diabetes,
tobacco use, or high cholesterol, to rebut the presumption.
That legal rule, the Court of Appeals reasoned, was at odds
with its decision in Long v. Tualatin Valley Fire, 163 Or App
397, 987 P2d 1267 (1999).° The court accordingly reversed.
the board’s order. Thompson, 267 Or App at 367.9

On review, the parties raise two related but sepa-
rate issues. Relying primarily on cases from other states,
claimant and his amici argue that SAIF may not rely on
medical evidence that, as a general matter, atherosclerosis
is unrelated to firefighting to rebut the firefighters’ pre-
sumption. They contend that SAIF may rebut the presump-
tion only with evidence that claimant’s atherosclerosis was
caused by individual risk factors unrelated to his work, such
as diabetes, high cholesterol, or obesity. Under that stan-
dard, claimant contends, we should affirm the board’s order.
Alternatively, claimant argues that, even if SAIF may rely
on testimony that atherosclerosis generally is unrelated to

® In Long, three doctors had testified that the cause of the firefighter’s
heart condition was not known but that the condition was not related to his
work, 163 Or App at 399, 401. The board found that that evidence rebutted the
presumption, and the Court of Appeals upheld its order. Id. Because the board
upheld the employer’s denial, the only question before the court in Long was
whether the employer's evidence was sufficient to meet the employer's burden
of production. The Court of Appeals limited its holding to that question. See id.
at 401.

® Ordinarily, if the board applied an incorrect legal standard, the appropri-
ate disposition would be to reverse the board’s order and remand the case to the
board to apply the correct standard. The Court of Appeals, however, concluded
that Semler’s unrebutted testimony necessarily established by clear and convine-
ing evidence that claimant’s condition was unrelated to his work. See Thompson,
267 Or App at 367.

166 P|

firefighting, the board reasonably found that Semler’s testi-
mony did not meet SAIF’s burden of persuasion.

We read the board’s order differently from the Court
of Appeals. As we read its order, the board did not rule that
only evidence of individual risk factors unrelated to claim-
ant’s employment may be used to rebut the firefighters’ pre-
sumption. Rather, the board recognized that Semler’s tes-
timony was sufficient to meet SAIF’s burden of production;
however, it found that Semler’s testimony was internally
inconsistent and, for that reason, failed to meet SAIF’s bur-
den of persuasion. It follows that this case does not pres-
ent the first issue that claimant and his amici raise. It only
presents the second.”

In explaining why we read the board’s order differ-
ently from the Court of Appeals, we begin by identifying the
legal standard that the board applied. In its order, the board
started its analysis by explaining, “We are not persuaded
*** that Dr. Semler’s opinion satisfies SAIF’s ‘clear and con-
vincing’ burden.” The board explained why it was not per-
suaded and then concluded by stating, “In sum, after weigh-
ing the evidence, we find that SAIF has not established, by
clear and convincing evidence, that the cause of claimant’s
heart attack is unrelated to his employment.”

Taking the board at its word, we find it difficult
to say that the board did anything other than what ORS
656.802(4) directed it to do once claimant established, by
means of the firefighters’ presumption, that his atheroscle-
rosis “result[ed]” from his employment as a firefighter: The
board asked whether SAIF had persuaded it by clear and
convincing medical evidence that claimant’s atherosclerosis
was “unrelated” to his employment. The board neither said
nor intimated that only evidence of individual risk factors
unrelated to claimant’s work could be considered in finding
whether SAIF had met its burden of persuasion.

* Even though this case does not require us to reach the first issue that
claimant raises, we note that the answer to that issue turns primarily on the
text, context, and legislative history of ORS 656.802(4). That is, whether ORS
656.802(4) limits the type of medical evidence that employers may use to rebut
the presumed fact is first and foremost a question of legislative intent. Cf State v.
Stockfleth /Lassen, 311 Or 40, 50, 804 P2d 471 (1991) (explaining when cases from
other jurisdictions will be context that bears on a statute's meaning).

pT 167

The Court of Appeals, however, reasoned that, given
Semler’s unrebutted testimony, the board must have rejected
that testimony because Semler had not identified any indi-
vidual risk factor (hypertension, diabetes, etc.) as the cause
of claimant’s condition. In our view, the Court of Appeals
gave too much credit to Semler and too little credit to the
board. Put differently, the board reasonably could (and did)
find that Semler’s report and his testimony were not per-
suasive, without resorting to the legal rule that the Court of
Appeals attributed to it.

In explaining why we reach that conclusion, we
begin with Semler’s report. As discussed above, Semler
issued a written report in which he opined that firefighting
was not the major contributing cause of claimant’s athero-
sclerosis. The primary difficulty with Semler’s report is that
he asked and answered the wrong question. Because claim-
ant proved the predicate facts necessary to establish the
firefighter’s presumption, ORS 656.802(4) presumed that
his atherosclerosis “resulted from” his employment and was
an occupational disease. The question accordingly was not
whether claimant’s employment was the major contribut-
ing cause of his condition; it was whether his condition was
“anrelated to [his] employment.” ORS 656.802(4). Those are
two separate questions. The fact that claimant’s employ-
ment was not the major contributing cause of his condition,
as Semler concluded in his report, does not mean that his
condition was unrelated to his employment." For that rea-
son alone, the board reasonably could have discounted the
persuasive value of Semler’s report.

The board also had Semler’s testimony before it. As
noted, that testimony reduced to three propositions. The first
proposition that Semler identified—that the causes of ath-
erosclerosis are unknown—provides no persuasive evidence

11 The same problem filtered through Semler’s testimony. Not only did Semler
repeat once in his testimony before the ALJ that the medical literature did not
establish that firefighting was the major contributing cause of atherosclerosis,
but even his more carefully articulated conclusions suffered from a similar logi-
cal flaw. The fact that, as Semler repeatedly stated, the medical literature did not
prove that firefighting causes atherosclerosis does not necessarily mean that it
proves that firefighting is “unrelated” to atherosclerosis. The former proposition
may give rise to a weak: inference of the latter, but Semler repeatedly appeared to
equate the two.

168 pT

that claimant’s condition was unrelated to his employment,
or so the board could find. As this court explained in Wright,
a diagnosis that a “claimant’s condition is ‘idiopathic, or of
unknown origin” is “simply a confession of an inability to
identify a cause of [the] claimant’s impairments rather than
evidence that [the] claimant’s condition or impairment is
unrelated to his [or her] employment.” 289 Or at 332 (empha-
sis in original).

The second proposition that Semler identified is
equally unavailing. As noted, Semler explained that cardiol-
ogists had identified some risk factors that are related to the
development of atherosclerosis.” Semler testified, however,
that claimant did not exhibit those risk factors, which sim-
ply ruled out the possibility that those risk factors (rather
than claimant’s work) were the cause of his atherosclerosis.
The board reasonably could find that the second proposition
that Semler identified provided no persuasive evidence that
claimant’s condition was unrelated to his work. Contrary
to the Court of Appeals’ reasoning, we do not understand
the board, in ruling out those factors, to have held that only
those factors could be used to rebut the presumption that
claimant’s atherosclerosis resulted from his work.

Finally, Semler opined that atherosclerosis is unre-
lated to firefighting. In large part, Semler based that opinion
on the fact that he could not find in the medical literature a
proven connection between firefighting and atherosclerosis.
Even if we assume that Semler’s opinion was sufficient to
meet SAIF’s burden of production, the board was not per-
suaded by his opinion. As the board explained, Semler also
testified that the causes of atherosclerosis are not known.
The board reasoned that, if cardiologists cannot identify the
causes of atherosclerosis, as Semler testified, and if claim-
ant had no apparent risk factors that were unrelated to his
work, as Semler also testified, then the basis for Semler’s
opinion that claimant’s atherosclerosis was unrelated to his
work was not apparent and, for that reason, was not suffi-
ciently persuasive to meet SAIF’s burden of persuasion.

® Sometimes, Semler referred to the factors as risk factors. Other times, he
referred to them as causes of atherosclerosis. Given his testimony that the etiol-
ogy of atherosclerosis is unknown, we refer to them as risk factors.

po 169

As we read the board’s opinion, the board evaluated
the persuasive value of Semler’s opinion and found it lack-
ing. As the board explained, Semler’s opinion that athero-
sclerosis is unrelated to firefighting was at odds with his
testimony that the causes of atherosclerosis are unknown.
The latter testimony undercut the former, or so the board
reasonably could find. As a result, the board permissibly
concluded that SAIF had not met its burden of persuasion
by clear and convincing evidence. Contrary to the Court of
Appeals conclusion, we do not understand the board to have
sub silentio faulted SAIF for failing to prove that claimant’s
atherosclerosis was caused by individual risk factors (such
as diabetes, high blood pressure, and the like) unrelated to
his work.

SAIF, however, argues on review that Semler offered
a cogent and clear opinion, which “was legally sufficient to
rebut the presumption.” We assume that Semler’s opinion
met SAIF’s burden of production. However, we cannot say
that the board was required to conclude that Semler’s opin-
ion met SAIF’s burden of persuasion. There is a difference
between saying that there is sufficient evidence to permit
the board to find that SAIF met its burden of persuasion
and saying that the board was required to make that find-
ing. To put the point in a familiar context, there is a differ-
ence between saying that a party has put on sufficient evi-
dence to submit a claim to the jury and directing a verdict in
a party’s favor on that claim. In this case, even if we assume
that Semler’s testimony was sufficient to meet SAIF’s bur-
den of production, the board reasonably could find, for the
reasons the board stated, that Semler’s testimony did not
meet SAIF’s burden of persuasion. The Court of Appeals
erred in concluding otherwise.

The decision of the Court of Appeals is reversed.
The order of the Workers’ Compensation Board is affirmed.

8 Tf follows that we need not decide the first issue that claimant raises—
whether SAIF may rebut the firefighters’ presumption only with medical evidence
of individual risk factors unrelated to work—to resolve this case. We express no
opinion on that issue.

170

Argued and submitted November 9, 2015, decision of Court of Appeals affirmed
in part and reversed in part, decision of circuit court affirmed in part and
reversed in part, and case remanded to circuit court for further proceedings
August 4, 2016

Arthur YEATTS;
and Nancy Doty, Inc.,
Special Fiduciary for Arthur Yeatts,
Petitioners on Review,
and
Matthew WHITMAN,
Plaintiff,
v.
POLYGON NORTHWEST COMPANY,
a foreign corporation,
Respondent on Review.
(CC CV08020124; CA A150199; SC S062977)

379 P3d 445

171

Po
—“‘:iSCSCis
J. Randolph Pickett, Pickett Dummigan LLP, Portland,
argued the cause for petitioners on review. Jeffrey A.
Bowersox, Bowersox Law Firm PC, Portland, filed the
brief for petitioners on review. With him on the brief were
J. Randolph Pickett, R. Brendan Dummigan, Kimberly O.
Weingart, Ron K. Cheng, Pickett Dummigan LLP, Portland,

and Scott M. Supperstein, Law Office of Scott Supperstein,
PC., Portland.

Bruce H. Cahn, Ball Janik LLP, Portland, argued the
cause and filed the brief for respondent on review. With him
on the brief was Amy Heverly.

W. Eugene Hallman, Pendleton, filed a brief on behalf of
amicus curiae Oregon Trial Lawyers Association.

Before Balmer, Chief Justice, Kistler, Walters, Landau,
Baldwin, and Brewer, Justices.**

BREWER, J.

The decision of the Court of Appeals is affirmed in part
and reversed in part. The decision of the circuit court
is affirmed in part and reversed in part, and the case is
remanded to the circuit court for further proceedings.

Walters, J., concurred and filed an opinion.

** Linder, J., retired December 31, 2015, and did not participate in the deci-
sion of this case. Nakamoto, J., did not participate in the consideration or decision
of this case.

172 po

BREWER, J.

Plaintiff, the direct employee of a subcontractor
working on a construction jobsite, fell while framing the
third floor of a townhome that was under construction. In
this action, plaintiff brought claims for relief against the
general contractor under Oregon’s Employer Liability Law
(ELL), ORS 654.305 to 654.336, and for common-law negli-
gence, in which he sought damages for injuries that he suf-
fered in the fall.

The trial court granted summary judgment in
favor of the general contractor, Polygon Northwest Company
(Polygon), on both of plaintiffs claims, after concluding
that there were no genuine issues of material fact and that
Polygon was entitled to prevail as a matter of law. On appeal,
the Court of Appeals affirmed. Yeatts v. Polygon Northwest
Co., 268 Or App 256, 341 P3d 864 (2014). On review, we
conclude that plaintiff presented sufficient evidence to with-
stand a motion for summary judgment on the specification
of his ELL claim that Polygon retained a right to control the
method or manner in which the risk-producing activity was
performed. Accordingly, we reverse the Court of Appeals
decision affirming the dismissal of the retained right of con-
trol specification of plaintiff's ELL claim, reverse the trial
court’s judgment regarding that specification, and remand
that claim to the trial court for further proceedings. We
affirm the decisions of the Court of Appeals and the trial
court with respect to plaintiffs negligence claim and the
remaining specifications of his HLL claim.

I. STANDARD OF REVIEW

When reviewing a trial court’s grant of summary
judgment, we view the evidence and all reasonable infer-
ences that may be drawn from the evidence in the light most
favorable to the nonmoving party. Jones v. General Motors
Corp., 325 Or 404, 420, 939 P2d 608 (1997). We therefore
view the facts in the summary judgment record in the light
most favorable to plaintiff.

Il. FACTS

Polygon was the general contractor for a residential
townhome development project. On behalf of the developer,

Po 173

Polygon signed a contract with plaintiff's employer, Wood
Mechanix, LLC (Wood Mechanix) to perform framing work
on the project.! The contract contained numerous provisions
that addressed the relationship between Wood Mechanix and
Polygon. Under the heading of general terms and conditions,
the contract provided that Wood Mechanix “has the status
of an employer” for unemployment compensation and social
security purposes. The contract required Wood Mechanix,
at its own expense, to procure and maintain general liabil-
ity insurance coverage and Oregon Worker’s Compensation
insurance for accidental bodily injury on the worksite. The
contract further required Wood Mechanix to name Polygon
as an additional insured under its liability insurance policy
and to procure liability insurance coverage that would pro-
vide that,

“[t]o the fullest extent permitted by law, the insurer shall
defend and indemnify [Polygon] for all claims and suits aris-
ing out of, related to, or connected with [Wood Mechanix’s]
performance of the work, regardless of whether said claim
or suit alleges, or any other entity contends, that [Polygon]
was independently or concurrently negligent. Said defense
and indemnity obligations shall arise specifically but not
exclusively, with respect to any claim or suit arising out
of circumstances where any employee or agent of [Wood
Mechanix] suffers personal injuries during the perfor-
mance of the work by [Wood Mechanix] or [Polygon].”

The contract also contained specific provisions that
addressed safety requirements for work on the project. In
particular, the contract provided:

“4.3 Safety Requirements.

“[Polygon] is committed to maintaining a safe work place.
[Wood Mechanix] agrees to take necessary safety and
other precautions, at all times, to prepare for and perform
the work in a safe manner and to protect persons from ill-
ness or injury and property from damage arising out of the
performance of the work. [Wood Mechanix] agrees and is
responsible to ensure that all sub-tier subcontractors and
suppliers adhere to the requirements of this [provision].

1 ‘The contract provided that the developer, Tanasbourne Place Townhomes,
LLG, was the “Contractor,” but plaintiff asserts, and Polygon does not contest,
that Polygon had the same rights under the contract as the developer.

PE
174 Po

“Wood Mechanix] shall take all necessary safety precau-
tions pertaining to its work and the conduct thereof, includ-
ing but not limited to, compliance with all applicable laws,
ordinances, rules[,] regulations and orders issued by a pub-
lic authority, whether federal, state, local or other, the fed-
eral Occupational Safety and Health Act, the Oregon Safe
Employment Act, and any safety measures requested by
[Polygon]. [Wood Mechanix] shall, at all times, be respon-
sible for providing a safe work site and be responsible
for the safety of all personnel, equipment, and materials
within [Wood Mechanix’s] care, custody or control. [Wood
Mechanix] shall promptly provide [Polygon] with written
notice of any safety hazard or violation found anywhere on
or adjacent to the construction site.”

The contract further provided that, “[tlo the full-
est extent permitted by law, [Wood Mechanix] agrees to
defend, indemnify and hold [Polygon] harmless from all
OSHA claims, demands, proceedings, violations, penalties,
assessments, or fines that arise out of or relate to [Wood
Mechanix’s] failure to comply with any safety related laws,
ordinances, rules, regulations, orders, or its obligations
hereunder.” In addition, the contract contained an exhibit
that addressed specific scope of work requirements for the
framing work that Wood Mechanix was to perform. The
contract provided that “[Wood Mechanix] is required to
promptly and diligently provide temporary railings, braces
and fall protection as may be required by the ongoing fram-
ing of the buildings [p]er OSHA requirements.” The contract
also required Wood Mechanix’s owner to attend a meeting
with Polygon’s superintendent before beginning work on the
project.

Also as a term of the contract, Wood Mechanix was
required to develop a site-specific safety plan that identi-
fied the anticipated hazards of the framing work and the
specific means that Wood Mechanix would use to address
those hazards. Although the summary judgment record
does not include the plan developed by Wood Mechanix, it
does contain a checklist completed by Trytko, the owner of
Wood Mechanix. On the checklist, Trytko confirmed that
Wood Mechanix had provided its “Fall Protection Program”
to Polygon and had “Fall Protection Work Plan” forms

Po 175
available for each building on which it would work. Trytko
confirmed that the plan:

“—Jdentif[ied] all fall hazards[.]

“—Describe[d] the method of fall arrest or fall restraint to
be used for these hazards[.]

“—Describe[d] the correct procedures for assembly, main-
tenance, inspection and disassembly of the fall protection
system|[.]”

In his deposition testimony, Trytko stated that Wood
Mechanix’s employees were trained and instructed in the fall
protection plan and that Wood Mechanix had a “competent
and qualified person” inspect the fall-protection equipment
daily. He also testified that Wood Mechanix alone made the
decision to use guardrails as the form of fall protection for
framing work on the project.

While the contract between Polygon and Wood
Mechanix explicitly called for Wood Mechanix to assemble,
maintain, and inspect the fall protection system, Polygon
also established its own site-specific Accident Prevention
Plan. Among other provisions, Polygon’s plan provided that
the fall protection restraint for second-floor and higher floors
should be guardrails. That plan placed primary responsi-
bility for assembly, maintenance and inspection of the fall
protection system on its subcontractors, including Wood
Mechanix. The plan stated:

“Procedures for Assembly

“The proper procedure for assembly of fall arrest/restraint
equipment will be found in the related TANASBOURNE
PLACE TOWNHOMES L.L.C Subcontractor’s Fall Protec-
tion Work Plan and according to manufacturer’s recom-
mended procedures.”

In addition, the plan required that the Fall Protection Work
Plans of Polygon’s subcontractors, including Wood Mechanix,
must “[i]dentify all fall hazards,” “[d]escribe the method of
fall arrest or fall restraint to be used for these hazards,”
and “[dlescribe the correct procedures for assembly, main-
tenance, inspection and disassembly of the fall protection
system.”

176 po

Polygon’s plan also assigned responsibility for
safety protection to its own construction superintendents.
Specifically, the plan provided that “[a]ll superintendents
will inspect their construction sites daily for safety hazards
and issue ‘Safety Hazard Observed’ notices to any subcon-
tractor in violation.” And the plan further provided that
each “site Superintendent must advise each Subcontractor”
of the requirements for the subcontractor’s fall protection
work plan.

Although Polygon’s Accident Prevention Plan is
included in the summary judgment record, the record also
shows without dispute that it was disseminated only inter-
nally to Polygon employees and not to the subcontractors who
worked on the project. Landshulz, Polygon’s Risk Manager,
testified that Polygon did not provide its plan to subcontrac-
tors, and Trytko testified that he could not state that he had
ever seen Polygon’s plan before this action was commenced.

The evidence also shows that Polygon relied on

Wood Mechanix’s expertise with respect to fall protection
for the framing work. Walther, who was Polygon’s first proj-
ect manager, testified:

“Once again, it goes back to the—to the site contractor to—

to—for this case would be to install those railings. That’s

why we hired them, to put them up—or that’s why we hire

them, to frame the building. They’re taking their own

safety program and critiquing it to the building or a project

specific. And that’s why we hire them, for the experts.”

Marsh, another Polygon superintendent, also testified that
Polygon relied on Wood Mechanix to properly design and
construct the guardrails:

“Q. You have no idea how a guardrail should be built?
“A. It wasn’t my job to know. I was relying on the exper-
tise of somebody who did know.”
As Marsh further explained, “[w]e were instructed that the
framing subcontractor would put all the safety measures in
place.”
The Court of Appeals accurately summarized

Polygon’s role in the project—based on the summary judg-
ment record—as follows:

PT 171

“Polygon’s role on the project was to manage the con-
struction of the townhouses, which included managing
the site, budget, schedule, and general safety of the proj-
ect. Polygon’s employees were at the site every day, and its
superintendents would perform daily site walks. Ifthey saw
a safety violation, such as a worker without a hard hat or a
missing guardrail, Polygon’s superintendents would direct
the person to stop the dangerous activity or tell the subcon-
tractor to fix the problem. In addition, and pursuant to the
contract, Polygon held weekly meetings with subcontrac-
tors on the project. *** Taylor, one of Polygon’s superinten-
dents, testified that the purpose of those weekly meetings
was to ‘[glo over a schedule, any issues amongst *** the
plans and *** on different subcontractors. If somebody was
caught without a hard hat, it would be brought up, “You
must wear your hard hat, must”—but it was more—it was
scheduling and day-to-day activities’ Wood Mechanix held
a separate safety meeting for its employees each week.”

Yeatts, 268 Or App at 260-61.

It was in that contractual and operational setting
that plaintiff was injured while working for Wood Mechanix
as a framer on the project, when he fell from the third floor of
one of the townhomes. Earlier that day, a Polygon employee
had told plaintiff to put his hard hat on and “go up there
and finish something,” in reference to the building. Plaintiff
went to the third floor and began framing an exterior wall.
Plaintiff finished placing sheetrock on a section of the wall
that was going to be raised and attached. He was kneeling
down, facing a guardrail. In an effort to push himself up to
a standing position, plaintiff leaned against the guardrail,
and it gave way, causing him to fall 19 feet to the concrete
surface below. When plaintiff fell, no Polygon employees
were on the third floor of the townhome.

After his injury, plaintiff brought this action against
Polygon, asserting in separate claims that Polygon was lia-
ble for plaintiff's injuries under the ELL as plaintiff's “indi-
rect employer” and that Polygon also was liable based on
common-law negligence. Plaintiff alleged in his ELL claim
that Polygon was negligent:

“a. In failing to require and utilize a guardrail system
that was effective in preventing falls;

178 Po

“b. In failing to have a guardrail system that was
effectively anchored on both ends;

“c. In failing to have a guardrail system that could
withstand 200 pounds of pressure;

“d. In failing to warn plaintiff that he was working in
an area where the guardrail system was inadequate; and

“e. In failing to use every device, care and precaution
that was practicable to use for the protection and safety of
life and limb, in violation of Oregon’s Employer Liability
Law pursuant to ORS 654.305.”

In his common-law negligence claim, plaintiff alleged that
Polygon “was negligent in failing to adequately control and
supervise the work” for the same reasons that he asserted
in his ELL claim.

Polygon moved for summary judgment on both
claims. Polygon argued that it was not subject to the ELL
because it did not control the guardrails and that it was not
liable in negligence because it did not occupy a legal relation-
ship toward plaintiff under which it owed a duty to ensure his
personal safety. In particular, Polygon argued that it owed
no duty to plaintiff because any dangerous condition associ-
ated with the guardrails fell “within the special expertise or
knowledge of” Wood Mechanix. Plaintiff submitted evidence
of the terms of the contract between the parties, as well as
how the parties operated, that, in his view, created material
issues of fact with respect to whether the ELL applied to
Polygon and whether Polygon owed a safety-related duty to
plaintiff as alleged in his common-law negligence claim. The
trial court granted Polygon’s summary judgment motion on
both claims.

Plaintiff appealed the ensuing general judgment in
favor of Polygon. The Court of Appeals concluded that plain-
tiff failed to present evidence from which a jury could find
that Polygon was liable under the ELL or that Polygon was
negligent. With respect to the negligence claim, the Court of
Appeals relied on this court’s decision in Yowell v. General
Tire & Rubber, 260 Or 319, 490 P2d 145 (1971), in conclud-
ing, based on the summary judgment record, that Polygon
was entitled to rely on Wood Mechanix’s expertise in per-
forming framing work at heights and did not owe plaintiff a

Po 179

duty. Yeatts, 268 Or App at 283. The Court of Appeals there-
fore affirmed the general judgment in favor of Polygon.

III. ANALYSIS
A. Claims Under the ELL

Oregon’s ELL imposes liability on “all owners, con-
tractors or subcontractors and other persons having charge
of, or responsibility for” work involving a risk or danger. ORS
654.305. This court has held that, in addition to a worker’s
direct employer, liability under the ELL can be imposed on
an indirect employer

“who (1) is engaged with the plaintiff's direct employer in
a ‘common enterprise’; (2) retains the right to control the
manner or method in which the risk-producing activity was
performed; or (3) actually controls the manner or method in
which the risk[-]producing activity is performed.”

Woodbury v. CH2M Hill, Inc., 335 Or 154, 160, 61 P3d 918
(2008) (summarizing Wilson v. P.G.E. Company, 252 Or 385,
391-92, 448 P2d 562 (1968)) (footnote omitted).?

At the outset, we note that the parties agree that
the Court of Appeals correctly identified the risk-producing
activity as “plaintiffs framing work at a dangerous height
above a concrete surface.” Based on our review of the record,
we agree with that characterization. Cf: Woodbury, 335 Or at
162 (describing risk-producing activity in that case as “work
at height”). With that understanding in mind, we consider
whether plaintiff presented sufficient evidence to create a
triable issue of fact as to whether Polygon could be found
liable under one or more of the categories under the ELL.

1. “Common enterprise”

In Wilson, this court stated that an indirect
employer may be held liable under the common enterprise
category

2 In Camenzind v. Freeland Furniture Co., 89 Or 158, 180, 174 P 139 (1918),
this court stated that “[tJhe duty imposed upon the master by the [ELL] is a
nondelegable duty.” However, the nondelegable nature of a duty imposed by the
ELL does not affect the determination of whether such a duty exists in the first
instance. See Boothby v. D.R. Johnson Lumber Co., 341 Or 35, 45, 187 P3d 699
(2006) (“If, as we hold, [the defendant] did not fall into any of those categories,
then the ELL imposed no duty on it, nondelegable or otherwisel.]”).

180 po

“where [the] defendant and [the] plaintiffs employers are
simultaneously engaged in carrying out work on a common
enterprise. When, as the result of the activities of [the]
defendant’s employees or use of his equipment, a risk of
danger is created which contributes to an injury to [the]
plaintiff who is the employee of another engaged in work
on the same project, [the] defendant has been considered
to have sufficient control over the work to be subject to the
duties imposed by the [ELL]. This is so even though he
might not have had actual control over the specific activ-
ity in which [the] plaintiff was engaged at the time of his
Wilson, 252 Or at 391 (citing Thomas v. Foglio, 225 Or 540,
549, 385 P2d 1066 (1961)).

In Sacher v. Bohemia, Inc., 302 Or 477, 485-86, 731
P2d 434 (1987), this court noted that “[t]he ‘common enter-
prise’ [category] was drawn from Thomas, where this court
held that the [ELL] could be invoked against a third-party
employer [defendant] when the third-party employer defen-
dant and the plaintiffs employer participated in a common
enterprise involving an ‘intermingling of duties and respon-
sibility’ of the employees of both employers.” The court stated
that the participation must consist of more than a common
interest in the economic benefit from the enterprise; rather,

“an employer can be regarded as ‘having charge of’ work
where the component part of the general undertaking for
which he is responsible involves any risk-creating activity
on the part of his employees or calls for the use of equipment
over which he has control and which, if not maintained with
proper safeguards, necessarily exposes the employees of the
other employer to an unreasonable risk in the course of car-
rying on the common enterprise.”

Id. at 486 (emphasis added). In short, the common enter-
prise category applies in circumstances where both employ-
ees of the defendant and employees of the direct employer
of the plaintiff have intermingled duties and responsibili-
ties in performing the risk-creating activity or where equip-
ment that the defendant controls is used in performing that
activity.

In Sacher, the plaintiff was a direct employee
of Cascade, a manufacturer of broom handles. Id. at 479.

Po 181

Cascade contracted with the defendant, Bohemia, Inc., a
lumber producer, to install and operate a broom handle pro-
duction line at one of Bohemia’s mills. Jd. at 480. The plain-
tiff was injured when he tried to remove a piece of wood
that had lodged in the saw blades of Cascade’s production
line. Id. at 481. Bohemia’s employees assisted in the oper-
ation by producing the scrap wood that Cascade used for
making the broom handles, supplying the conveyors used
to bring the waste wood to the Cascade operation, forklift-
ing completed bins of broom handles to the yard for loading,
occasionally sharpening Cascade’s saws, and having the
contractual right to approve all hiring of employees to work
in Cascade’s broom handle operation. Id. at 487. Despite
those connections, though, this court concluded that there
was no evidence that Bohemia was engaged in a common
enterprise with Cascade with respect to the broom handle
production unit that caused plaintiff’s injury. Id. The court
noted that “Cascade alone designed, built, installed and
operated the saw unit” and the “[p]laintiff was not injured
because of a failure on Bohemia’s part to take proper pre-
cautions regarding its own equipment *** or employees.” Id.
(footnote omitted).

In this case, there was even less intermingling of
work activity between the employees of Polygon and Wood
Mechanix than was the case in Sacher. Although Polygon’s
employees engaged in general oversight of the construction
project, employees of Wood Mechanix performed the fram-
ing work for the project on their own. The undisputed evi-
dence shows that Wood Mechanix made its own determi-
nation to use guardrails as the form of fall protection for
framing work on the upper levels of the building and that
‘Wood Mechanix designed, assembled, and maintained the
guardrail system. In addition, there is no evidence in the
record that Polygon’s employees were regularly present on
the third floor of the building, nor were any Polygon employ-
ees or equipment present on that floor when plaintiff's injury
occurred.

In short, there is no evidence that Polygon’s employees
or equipment were engaged or used in framing work on the
project or in the design, assembly, or maintenance of the
guardrail that failed. It follows that the evidence does not

182 po

give rise to a reasonable inference that Polygon and Wood
Mechanix were engaged in a common enterprise with regard
to the risk-producing activity that led to plaintiff's injury.
We therefore affirm the decisions of the trial court and the
Court of Appeals on that issue.

2. Actual control

In Woodbury, this court held, in the context of a
summary judgment ruling, that there was sufficient evi-
dence to create a triable issue of fact as to whether the defen-
dant was liable under the ELL because it actually controlled
the manner or method in which the risk-producing activity
was performed. In that case, the plaintiff sought recovery
for personal injuries suffered in a fall from a construction
platform. Although the plaintiff worked for a subcontractor,
he filed the action against the general contractor, alleging
liability under the ELL and common-law negligence. The
defendant’s representative provided detailed on-site instruc-
tions as to how a pipeline should be constructed, and that
representative addressed jointly with the plaintiff's direct
employer what was required to facilitate work on the part
of the pipeline that spanned an underground concrete cor-
ridor. In particular, the defendant and the plaintiff's direct
employer “jointly decided to use a fixed wooden platform
consisting of boards and plywood sheets.” Woodbury, 335 Or
at 162.

Based upon that active, on-site participation by the
defendant’s representative, this court determined that

“there was evidence from which the jury reasonably could
conclude that [the] defendant exercised actual control both
over the decision to use a wooden platform and over the
choice of how that platform was constructed. In particular,
the jury could have concluded that the platform was con-
structed without fall protection that might have protected
(the] plaintiff from injury.”

Id. at 162-63. The court concluded that that evidence was
sufficient to support a jury determination that the defen-
dant “exercised actual control over the manner or method
in which the risk-producing activity (working at height) was
performed.” Id. at 163.

pT 183

Although plaintiff contends otherwise, the record in
this case does not disclose the kind of active, on-site partic-
ipation by Polygon that created a jury issue in Woodbury
as to whether the defendant there actually controlled the
risk-producing activity.’ The contract between Polygon and
Wood Mechanix assigned responsibility for assembling and
maintaining the fall protection system to Wood Mechanix,
whose employees did in fact assemble and maintain the
guardrail that failed. Although Polygon’s accident preven-
tion plan called for guardrails to be used for fall protection,
Trytko’s undisputed testimony indicated that the decision
to use guardrails for fall protection was made by Wood
Mechanix itself and not mandated by Polygon. In addition,
the record shows that Polygon’s site superintendents only
inspected for obvious safety violations—such as failures of
workers to wear hard hats or missing guardrails—on their
daily site rounds; they did not actually physically inspect
the guardrails to determine whether they were properly
assembled and maintained, nor is there any evidence that
Polygon otherwise actually controlled the method or manner
of Wood Mechanix’s framing work.‘

Accordingly, we conclude that plaintiff did not pres-
ent sufficient evidence that Polygon actually controlled the
framing work at a dangerous height above the concrete
surface to withstand defendant’s motion for summary judg-
ment. We therefore affirm the decisions of the trial court

3 We agree with the Court of Appeals that the fact that a Polygon employee
directed plaintiff on the day of his injury to work on one of the buildings is
insufficient to establish actual control. Yeatts, 268 Or App at 278. Liability
under the actual control test is only triggered if the defendant actually controls
the manner or method—that is, how—the plaintiff or the plaintiff's employer
performs the risk-producing activity. See Wilson, 252 Or at 398 (concluding
that defendant had not exercised actual control over work involving risk or
danger because defendant’s “only exercise of control was for the purpose of
securing the ultimate result for which defendant had contracted,” and there
was “no evidence of an attempt by defendant to control the method and manner
of the work”),

4 The fact that Polygon contractually required Wood Mechanix to comply
with OSHA fall protection requirements does not amount to the sort of active,
on-site activity that would support a determination that Polygon actually con-
trolled the risk-producing activity at issue. See Boothby, 341 Or at 43-44 (con-
tractual provision requiring subcontractor to comply with all applicable statutes,
regulations, and laws not sufficient to establish actual control or retained right of
control for purposes of ELL).

184

and the Court of Appeals based on the actual control speci-
fication of plaintiff's ELL claim.

8. Retained right to control

To establish that Polygon “retained the right to con-
trol” the pertinent risk-producing activity, plaintiff must
“identify some source of legal authority for that perceived
right” or present evidence from which a retained right of
control can be inferred. Boothby v. D.R. Johnson Lumber
Co., 341 Or 35, 41, 137 P3d 699 (2006). In Boothby, this
court focused its analysis of that issue on the terms of the
contract between the defendant and its independent contrac-
tor, who was the direct employer of the plaintiff. Id. We also
do so here, as well as considering evidence about the manner
in which the contract was performed.

As discussed, several provisions of the contract
between Polygon and Wood Mechanix assigned primary
responsibility to Wood Mechanix for the framing work—
including related fall protection—on the project. In par-
ticular, the contract required Wood Mechanix to provide

railings, braces, and fall protection for the framing work
in accordance with OSHA requirements. The contract
also required Wood Mechanix to develop and implement a
site-specific safety plan that identified and anticipated haz-
ards and provided specific means to address those hazards,
including fall protection. Also as discussed, Wood Mechanix
made its own decision to use guardrails as the form of fall
protection on the upper floors of the buildings, and Wood
Mechanix was responsible for assembling and maintain-
ing the guardrails. In addition, the contract required Wood.
Mechanix to defend, indemnify, and provide liability insur-
ance coverage to protect Polygon from liability for injuries to
‘Wood Mechanix employees working on the project. In short,
the contract made Wood Mechanix primarily responsible
for safety measures for the framing work and required it to
protect Polygon from liability for injuries that might befall
Wood Mechanix employees doing that work.

However, the contract also included provisions
under which Polygon retained some right to control the
framing work, including related safety matters. In particu-
lar, the contract provided that

rr
Po 185

“[Wood Mechanix] shall take all necessary safety precau-
tions pertaining to its work and the conduct thereof, includ-
ing but not limited to, compliance with all applicable laws,
ordinances, rules[,] regulations and orders issued by a
public authority, whether federal, state, local or other, the
federal Occupational Safety and Health Act, the Oregon
Safe Employment Act, and any safety measures requested
by [Polygon].”

(Emphasis added.) That provision permitted Polygon to
require safety measures that it deemed appropriate beyond
those necessary to comply with applicable state and federal
laws; it correspondingly conferred discretion on Polygon to
determine for itself whether any additional safety measures
should be taken.

In addition, Polygon’s Accident Prevention Plan pro-
vided that Polygon’s superintendents would inspect the con-
struction site daily for safety hazards and issue safety haz-
ard notices to any subcontractor in violation. Although that
plan was not disseminated to Wood Mechanix, consistently
with the contract itself, it reinforces the point that Polygon
retained the right to inspect and ensure the integrity of the
guardrails as adequate fall protection measures, if it chose
to do so.

Against that evidentiary backdrop, we return to
the governing legal principles. In Wilson, a property owner
hired a general contractor to build an electric transmission
line; the general contractor, in turn, hired an independent
contractor to construct the towers supporting the line. 252
Or at 389. Under the subcontract, the independent contrac-
tor was responsible for the method and manner in which the
risk-producing activity was performed. Id. at 392-94. The
owner, however, retained the contractual right to “increase
thle] safety, efficiency, and adequacy” of the independent con-
tractor’s methods “[i]f at any time the Contractor’s methods
*** appear to the [owner] to be unsafe.” Id. at 394 (quoting
the contract) (emphasis omitted).

As this court explained in Cortez v. Nacco Materials
Handling Group, 356 Or 254, 337 P3d 111 (2014):

“The contractual right that the owner retained in
Wilson, as the court characterized it, was limited to

186

requiring greater safety procedures than those that the
contractor had put in place, and the question in Wilson
was whether the owner’s retention of that right was suf-
ficient to make it liable under the ELL. The court held
that it was not, for three related reasons. First, the court
explained that, in order for an owner's retained right to
give rise to liability under the ELL, the right had to ‘bear
some relation to the creation of a risk of danger to work{ers]
resulting from dangerous working conditions.’ Under the
terms of the parties’ contract, however, the independent
contractor was responsible for the manner or methods in
which the risk-producing activity was performed. Second,
although the owner retained the right to require greater
safety procedures, the court explained that the retention
of that right ‘created no risk of danger to [the] plaintiff’
The court reasoned that the retention of that right would
create a risk of danger to the plaintiff only if it caused the
independent contractor to be less diligent regarding safety,
a possibility that the court discounted because ‘the duty to
maintain safety remained the primary duty of the contrac-
tor. Finally, the court reasoned that imposing liability on
owners for retaining a contractual right to require greater
safety measures would serve as a disincentive to including
such clauses in future contracts and thus would be contrary
to the purposes underlying the ELL.”

Cortez, 356 Or at 275-76 (emphasis in original; citations
omitted).

In Cortez, an injured worker brought negligence
and ELL claims against the sole member of a limited liabil-
ity company (LLC). In that case—also decided on summary
judgment—the LLC was the plaintiff's direct employer. Id.
at 256. An officer of the sole member of the LLC acknowl-
edged that the member “could have made all of thle safety]
changes” that it later made after the plaintiff's accident at
the point at which it had first acquired the LLC. Id. at 274.
Similarly, the officer agreed “that|,] if the [member] wanted.
to change either the design or the equipment used in the
yard at [the LLC operation], they could do that.” Id. at 275.
This court concluded that

“[a] reasonable juror could infer from that evidence that, as
the LLC statutes state, [the member] retained the right to
manage the day-to-day operations of [the LLC], including

pT 187

the operation of the forklifts and attendant safety proce-
dures. Put differently, a reasonable juror could infer that
[the member] retain[ed] the right to control the man-
ner or method in which the risk-producing activity was
performed.”

Id. at 275 (internal quotation marks omitted; citation omit-
ted). The defendant in Cortez remonstrated that Wilson
was controlling and required a contrary conclusion. Id.
The court disagreed; the court distinguished the circum-
stances involved, because Wilson arose in the context of an
owner/independent contractor relationship, whereas Cortez
involved a sole member-manager of an LLC that delegated
day-to-day decisions to a mill manager and human resources
director. Id. at 276.5

Here, Wilson also is distinguishable in part.
Although this case, like Wilson, involves an independent con-
tractor relationship, the contractual relationship and terms
here differ from those in Wilson. First, Wilson involved an
owner/independent contractor relationship in which the
parties’ expectations and roles differ from those ordinarily
at play in a general/subcontractor relationship. In Wilson,
the court stated:

“An owner who reserves the right to impose or require
safety precautions for the benefit of his contractor’s work-
men derives no possible pecuniary benefit from the reser-
vation because he has contracted for a finished product.”

252 Or at 396. Presumably reasoning from that premise,
the court also said: “[Blefore the retained right of control
by an owner should give rise to liability, that retained right
of control should bear some relation to the creation of a risk
of danger to workmen resulting from dangerous working
conditions.” Id. at 395-96. The circumstances arguably are
somewhat different where a general contractor is responsi-
ble to the owner for the performance of its own contractual
obligations, which includes the work performed by the sub-
contractor. In that situation, it is still the owner who has
“contracted for a finished product.” The general contractor

® This court noted in Cortez that the plaintiff had not “argue[d] that Wilson
was wrongly decided, and we assume[d] that the court’s decision was correct in
light of the particular contractual relationship in that case.” Id. at 276 n 23.

|

188 po

remains bound to perform the work and therefore has an
ongoing pecuniary incentive to avoid a risk of injury to
workers on the jobsite.

Second, although the owner in Wilson could request
greater safety measures than the contract expressly imposed
on the independent contractor, the contract in that case fur-
ther provided that

“[t]he failure of the [owner] to make such demands shall
not relieve the Contractor of his obligation to secure the
quality, the safe conducting of the work, and the rate of
progress required by the Contract; and the Contractor
alone shall be and remain liable and responsible for the
safety, efficiency, and adequacy of his methods, materials,
working force, and equipment, irrespective of whether or
not he makes any change as a result of any order or orders
received from the [owner].”

Wilson, 252 Or at 394 (quoting the contract) (emphasis
omitted). Thus, the parties expressly left ultimate respon-
sibility for safety measures in the hands of the independent
contractor. Although the owner could ask for additional
safety measures, the contract provided that the indepen-
dent contractor “alone” was responsible for the safety of its
employees and the adequacy of its methods of work. Here, in
contrast, Polygon was in overall charge of the construction
project. Unlike the owner in Wilson, Polygon retained the
right for its own construction superintendents to inspect the
work site in its entirety. It also had the contractual right
to impose additional safety measures, and, although the
safety of its own work force was primarily the responsibility
of Wood Mechanix in this case, unlike in Wilson, there was
no express provision in the contract that purported to make
Wood Mechanix alone responsible for the safety of its direct
employees. Thus, unlike in Wilson, contractual responsibil-
ity for the safety of the subcontractor’s employees was not
fully shifted from the general contractor to the subcontrac-
tor in this case.

Those distinctions notwithstanding, plaintiff cor-
rectly notes that the “risk-creation” concept that this court
applied in Wilson was not derived from a statutory construc-
tion analysis of ORS 654.305 that accords with our accepted

pT 189

methodology, under which we interpret the statutory text in
context, PGE v. Bureau of Labor and Industries, 317 Or 606,
610-11, 859 P2d 1143 (1993), and then, to the extent we find
it helpful, we consider the legislative history proffered by
the parties, ORS 174.020(3). See also State v. Gaines, 346 Or
160, 171-72, 206 P3d 1042 (2009) (after considering text and
context, court considers any pertinent legislative history,
giving it appropriate weight).

In particular, one aspect of the analysis in Wilson
is sufficiently problematic to require correction. As noted,
this court in Wilson stated that, before the retention of a
right of control would give rise to liability, that retained
right must bear some relation to the creation of a risk of
danger to workers. 252 Or at 395-96. The court then deter-
mined that the owner’s retained right to require greater
safety measures than those provided by the plaintiff's direct
employer would not create a risk of danger to the plaintiff.
Id. at 396. The court further stated that such a retained
right would create a risk of danger to the plaintiff only if
it caused the plaintiff's direct employer to be less diligent
regarding safety, a possibility that the court discounted in
that case because “the duty to maintain safety remained the
primary duty of the contractor.” Id. That “risk-creation” con-
cept arose from the court’s concern that imposing liability
under the ELL in that situation would lead to less work-
place safety by inducing complacency, which would be in
direct opposition to the purpose of the ELL—the protection
of workers. Id. (“[I]f duties not otherwise required of owners
are imposed because of the reservation of a right to require
safety precautions, it is obvious that owners will not actively
concern themselves with the workmen’s safety. As a result,
the imposition of liability *** would defeat the very purpose
the [ELL] was designed to accomplish.”).

On further reflection, we conclude that there simply
is no support in the text, context, or legislative history of the
ELL for the proposition that the retained right to inspect
work and require greater safety measures would only give
rise to liability under the ELL if such retention created a
risk of danger to the plaintiff by causing the plaintiff's direct
employer to be less diligent. There is no reason to conclude

190 Po

that a general contractor’s right to inspect work for safety
hazards is insufficient to amount to a retained right of con-
trol even where the reservation of that right does not cause
the subcontractor who is primarily responsible for the work
to be less diligent. To the contrary, such an inspection right
creates an additional opportunity to avoid jobsite injury,
even if the subcontractor has an undiminished incentive to
diligently inspect its own work.

Under the principle of stare decisis, we assume that
all fully considered decisions of this court were correctly
decided. Farmers Ins. Co. v. Mowry, 350 Or 686, 692, 261 P3d
1 (2011). It is incumbent upon the party wishing to change
a precedent to affirmatively persuade this court to abandon.
that precedent. Id. Various considerations may be weighed
in deciding to depart from precedent, including a need to
correct a past error, particularly where “an earlier case was
inadequately considered or wrong when it was decided.” Id.
at 692-93 (quoting G.L. v. Kaiser Foundation Hospitals, Inc.,
306 Or 54, 59, 757 P2d 1347 (1988)).

In this case, we are persuaded that the above-
discussed aspect of the holding in Wilson was incorrect
when it was decided. As noted, the court in Wilson derived
the risk-creation requirement from its concern with uphold-
ing the purpose of the ELL, but proper consideration was
not given to the text, context, and history of the ELL in cre-
ating that requirement. See Gaines, 346 Or at 171-72. First,
considering the text of the ELL, it applies to “persons hav-
ing charge of, or responsibility for, any work involving a risk
or danger to the employees,” and it requires such persons to
“use every device, care and precaution that is practicable to
use for the protection and safety of life and limb, limited only
by the necessity for preserving the efficiency of the struc-
ture, machine or other apparatus or device, and without
regard to the additional cost of suitable material or safety
appliance and devices.” ORS 654.305. That statute does not
require that the act of having charge of or responsibility for
that work create, by itself, an additional risk of danger to
workers by causing their direct employers to be less diligent.
Nor does anything in the context of ORS 654.305 or any
other provision of the ELL support the existence of such a
requirement.

po 191

Finally, that requirement does not comport with
the enactment history of the ELL. In Saylor v. Enterprise
Electric Co., 106 Or 421, 212 P 477 (1923), this court con-
sidered that enactment history and the purpose of the ELL,
which originally was proposed by initiative and enacted by
a vote of the people in 1910.° 106 Or at 425. See also Or
Laws 1911, ch 3. The original ballot title described “A bill for
a law requiring protection for persons engaged in hazard-
ous employments ***” Official Voters’ Pamphlet, General
Election, Nov 8, 1910, 81. The argument in favor of the mea-
sure set out in the voter’s pamphlet described the lack of
protections for the safety and lives of workers under the
common law and asked voters to pass the ELL so that “the
employer [would] be compelled to use diligence in protecting
the laborer as to his life and limb.” Id. at 85. The purpose
of the ELL, therefore, was to protect employees engaged in
lines of work “involving risk or danger” by imposing higher
standards of care upon employers than did the common law.
See Saylor, 106 Or at 427-28; Or Laws 1911, ch 3, § 1.

This court in Wilson correctly recognized that
broad purpose; however, nothing in the history of the ELL—
either in its enactment or in this court’s decisions preceding
Wilson—indicates that, in the case of the retained right to
control workplace safety, liability will arise under the ELL
only where the retained right creates an additional risk of
danger to workers by causing their direct employers to be
less diligent. Wilson incorrectly imposed that requirement,
which is not grounded in the text, context, or history of the
ELL. See ORS 174.010 (courts not to insert “what has been
omitted”).

This court has not often relied on that aspect of
Wilson;’ most recently, in Cortez, the court expressly dis-

° Part of section 1 of the enacted law became ORS 654.305, and the current
text has not changed substantively from the original. See Or Laws 1911, ch 8, § 1.

7 Only one other case relied upon the reasoning in Wilson. In Wienke v.
Ochoco Lumber Co., 276 Or 1159, 588 P2d 319 (1976), after determining that
liability did not arise under the ELL because the defendant lumber company did
not have the right to directly control the injury-creating activity, this court stated
“another reason for holding that the [ELL] should not apply.” 276 Or at 1167.
Relying on the reasoning in Wilson, the court stated: “In addition, by no stretch
of the imagination can it be argued that any risk was created that the contrac-
tor would fail in his duties of safety to his employees upon the expectation that

192 PO

tinguished it, noting that the parties had not asked us to
revisit the holding in that case. Rather than continue to
limit the holding in Wilson to the facts of that case, for the
foregoing reasons, we disavow that holding to the extent
that it requires a plaintiff to show that a defendant's right to
control a risk-producing activity created an additional risk
of danger to the plaintiff by causing the plaintiff's direct
employer to be less diligent.

We conclude that Polygon’s retention of the rights
to require additional safety measures, and to inspect the
work site in its entirety, particularly in the absence of a con-
tractual provision that placed sole responsibility for safety
measures on Wood Mechanix, constituted sufficient evi-
dence that Polygon retained the right to control the risk-
producing activity so as to preclude summary judgment in
favor of Polygon with respect to that specification of plain-
tiff’s ELL claim. Accordingly, we reverse the decisions of the
trial court and the Court of Appeals on the retained right of
control specification of plaintiff's ELL claim and remand to
the trial court for further proceedings on that specification.

B. Common-Law Negligence Claim

Plaintiff also asserts that the trial court and the
Court of Appeals erred in concluding that plaintiff failed to
adduce evidence sufficient to create a triable issue of fact
with respect to his common-law negligence claim. As noted,
plaintiff relies on essentially the same factual circumstances
to support his negligence claim as he does for his claim
under the ELL. Polygon contends that plaintiff’s negligence
claim fails because, under common-law principles, a general
contractor does not owe a duty of care to the employees of a

[the] defendant would take care of such duties, because [the] defendant itself had
no right to supervise the employees of the contractor.” Id. at 1167-68. However,
as the dissent in that case noted, the reliance on Wilson was dictum and not
necessary to support the court's decision that the BLL did not apply. Id. at 1175
(Tongue, J., dissenting). Justice Tongue further accurately observed:

“It is of interest that this proposition, as set forth in Wilson by the writer
of this majority opinion, not only interjected a completely new theory of ‘non-
liability’ under the [ELL], but one not supported by the citation of any deci-
sions by this or any other court and one which was completely different from
the reasons urged by the defendant upon the appeal of that case.”

Po 198

subcontractor when the subcontractor is hired for its exper-
tise in performing work in a dangerous field.

In Fazzolari v. Portland School Dist. No. 1J, 303 Or
1, 734 P2d 1326 (1987), this court explained that,

“unless the parties invoke a status, a relationship, or a par-
ticular standard of conduct that creates, defines, or limits
the defendant’s duty, the issue of liability for harm actually
resulting from [a] defendant’s conduct properly depends on
whether that conduct unreasonably created a foreseeable
risk to a protected interest of the kind of harm that befell
the plaintiff”

Id. at 17. This court in Fazzolari observed that liability in
negligence does not extend to every failure to prevent a
foreseeable injury, noting that “a status, a relationship, or
a particular standard of conduct” may impose “limits” on a
defendant's duty to act. Id.

In Yowell, this court set out what has been described
as the “special expertise or knowledge” principle, which
limits the duty of care that otherwise might be owed by an
owner or general contractor where a subcontractor is hired to
perform work. 260 Or at 325. In Yowell, the defendant owned
a tire business and hired the plaintiff's employer to repair a
sign located on its property. The court stated that the follow-
ing principle governed the circumstances of that case:

“A person who orders repairs or work to be done by a third
party owes no duty to such third party or his workman to
discover and warn of any unknown dangerous conditions
surrounding the work which fall within a special expertise
or knowledge, not shown to have been had by the person
ordering the work, and which the third party impliedly rep-
resents to the public that he possesses.”

Id. As that principle applied in Yowell, the court held:

“Plaintiff's employer, the independent contractor, held
itself out to the public as being engaged in the business of
manufacturing, installing and repairing all kinds of signs.
Defendant was therefore entitled to assume, until notice
to the contrary, that plaintiff's employer and its employees
who were sent to work on defendant’s signs were proficient
and expert in detecting any defects in signs which formed a
danger to those working in or around them. Defendant was

194 po

not shown to have known of the defect in the sign. Nor was
it shown to have had any expertise concerning signs.”

Id. at 324-25 (footnote omitted).

Unlike in this case, the defendant hirer in Yowell
owned the premises on which the plaintiff was injured. Id.
at 320. In reaching its conclusion, the court in Yowell relied
on principles involving the duty that a possessor of land
owes to the employees of independent contractors hired to
perform work on the premises. Id. at 323-24. However, the
court did not rest its holding on that ground alone. Instead,
the court stated:

“Regardless of whether defendant is to be viewed in its
relation to plaintiff primarily as a possessor of land or as
one who contracts for services, we believe the result in this
case should be the same.”

Id. at 324.8

In this case, plaintiff did not assert in the trial
court or the Court of Appeals, nor has he asserted before
this court, that the “special expertise or knowledge” prin-
ciple does not apply in the context of general contractor-
subcontractor relationships. Instead, plaintiff has chal-
lenged the Court of Appeals’ determination, based on the
summary judgment record, that Polygon relied on the exper-
tise of Wood Mechanix. We determine whether there is suf-
ficient evidence that Polygon owed and breached a duty of
care to plaintiff to create a triable issue of fact in accordance
with the parties’ framing of that issue on review. We con-
clude that the evidence is insufficient in that regard.

® The court further stated:

“We prefer to hold that the property owner or the contractee (as the case may

be) owes no duty, rather than to hold that the independent contractor or his

employees assume the risk. We also believe that the rule should be stated
more broadly so that it covers not only the dangers of which the independent
contractor and his employees knew but also those dangers of which they, in
the exercise of their expertise, should have known.”

Id. at, 825-26 (emphasis added).

° ‘The concurring opinion asserts that the “special expertise or knowledge”
principle should not apply in this case because of differences that she perceives
between the liability of possessors of land and general contractors for injuries
suffered by an employee of an independent contractor while performing con-
tracted work. 360 Or at 198-200 (Walters, J., concurring). Because plaintiff does
not make that argument, we do not address its merits.

Po 195

Here, Polygon hired plaintiff's employer as an inde-
pendent subcontractor to undertake framing work, includ-
ing fall protection for that work, because of its expertise in
framing buildings. There is no evidence in the summary
judgment record that Polygon knew or had reason to know
of any defect in the design, installation, or maintenance of
the guardrail that failed or that it had special expertise in
fall protection for framing work done at dangerous heights.”

Plaintiff remonstrates that Polygon provided safety
oversight over the entire construction site on a daily basis,
that the contract between Polygon and Wood Mechanix con-
tained specific framing requirements, that Polygon had the
right to approve Wood Mechanix’s fall protection plan, and
that Polygon required Wood Mechanix’s employees to attend
weekly safety meetings.

That evidence notwithstanding, there is no evi-
dence from which a jury could find that Polygon required
Wood Mechanix to use guardrails as opposed to any other
method of fall protection, or that the Polygon plan was pro-
duced independently of Wood Mechanix’s decision to use
guardrails. To the contrary, there is uncontroverted evi-
dence that Polygon bargained for and relied on the exper-
tise of Wood Mechanix in providing safety measures for the
framing work and that Wood Mechanix alone decided to
use guardrails as its form of fall protection on the project.
The subcontract expressly required Wood Mechanix to pre-
pare a safety plan for its work, which specifically included
a fall protection plan for Wood Mechanix workers. In addi-
tion, the “Subcontractor Precon Safety Orientation” check-
list required Wood Mechanix (not Polygon) to “[i]dentify all
fall hazards” and “[d]escribe the method of fall arrest or fall
restraint to be used for these hazards.” Moreover, Trytko
verified that Wood Mechanix’s employees were trained
and instructed in fall protection protocols and that Wood
Mechanix would have a “competent and qualified person”
inspect the fall-protection equipment daily.

® As noted, Polygon’s managers testified that (1) Wood Mechanix was “tak-
ing their own safety program and critiquing it to the building or a project specific.
And that’s why we hire them, for the experts”; and (2) with respect to how a
guardrail should be built: “It wasn’t my job to know. I was relying on the exper-
tise of somebody who did know”

196 Po

Consistently with that allocation of responsibility
and expertise, the uncontroverted evidence also showed
that Polygon employees did not go into the Wood Mechanix
work space generally and did not go onto the upper floors
of any building being framed by Wood Mechanix until the
floor was complete. In sum, although the evidence supports
an inference that Polygon had a general understanding that
fall protection should be in place while framing work is
performed at heights, it does not support an inference that
Polygon had special expertise or knowledge regarding how
to design, construct, and maintain guardrails for that pur-
pose. Instead, both contractually and operationally, Polygon
relied on the expertise and knowledge of Wood Mechanix
and its employees for the performance of those responsibil-
ities. Under those circumstances, Polygon did not have a
common-law duty to Wood Mechanix’s employees, including
plaintiff, to discover, warn against, or avoid unknown dan-
gerous conditions relating to fall protection for the framing
work."

We recognize that, unlike in Boothby, we have con-
cluded in this case that plaintiff's evidence was sufficient
to survive summary judgment with respect to the right of
control specification of his ELL claim. In Boothby, this court
concluded that the defendant’s lack of control over its inde-
pendent contractor negated any duty under the ELL and
also precluded the plaintiff from holding the defendant lia-
ble for the contractor’s negligence. 341 Or at 46. That does
not, however, alter our conclusion with respect to plaintiff's
negligence claim in this case. Because the ELL was intended

41 ‘The decisions that the concurrence cites emphasize the significance of the
hirers’ control over the operative detail of the work in those cases. Cf; Woodbury,
335 Or at 163 (evidence permitted jury to find that defendant exercised actual
control over safety aspects of project and, in particular, exercised actual control
over that part of project that required plaintiff to work at dangerous height);
Kuhns v. Standard Oil Co., 257 Or 482, 488, 493, 478 P2d 396 (1970) (evidence
showed that general contractor was obligated to “see that the job was done
according to the plans and specifications,” ensure that “job was done right,” and
“check{] after the equipment [was] installed to see that there [were] no leaks and
that the equipment [was] operating properly,” such that jury could find it Hable
for injuries resulting from oil leak “based on its own independent negligence in
failing to test or inspect the oiling equipment to determine if it was functioning
properly after the subcontractors had completed their work and the equipment
was operational”).

Po 197

to impose higher standards of care upon employers than did
the common law, circumstances giving rise to ELL liability
may exist without liability in negligence also arising. See
Saylor, 106 Or at 426-28; Or Laws 1911, ch 3, § 1.

This court addressed a similar issue in Cortez,
where the court concluded that the defendant retained a
sufficient right to control the manner or method of the risk-
producing activity to create a triable issue with respect to
the plaintiff's ELL claim, but nevertheless determined that
the trial court properly had granted summary judgment to
the defendant on a companion negligence claim. 356 Or at
277. In so concluding, the court recognized that

“some tension may exist between our resolution of plain-
tiff’s negligence and ELL claims. Any tension results, how-
ever, from the differences between the common-law tort
standards *** and the broader statutory standards that
the legislature adopted in the ELL.”

Id. See also Howard v. Foster & Kleiser Co., 217 Or 516,
533, 332 P2d 621 (1958), rehg den, 217 Or 516, 342 P2d 780
(1959) (“The [ELL] exacts of employers measures for the
safety of employees which are more stringent than those of
the common-law rule of due care.” (Citations omitted.)).?

We conclude, based on the record before us, that the
trial court properly granted Polygon’s motion for summary
judgment on plaintiff’s negligence claim.

IV. CONCLUSION

In summary, we conclude that plaintiff submitted
sufficient evidence that Polygon retained a right to control
the risk-producing activity at issue in this case to withstand

1 In addition to expanding the categories of persons responsible for main-
taining a safe work place beyond a worker’s direct employer, as this court
explained in interpreting an earlier version of what is now ORS 654.305:

“This statute *** imposes a higher standard of care than that imposed under
the rules of the common law. It requires that{,] in the operation of dangerous
machinery[,] the employer shall use ‘every device, care and precaution which
it is practicable to use for the protection and safety of life and limb, limited
only by the necessity for preserving the efficiency of the structure, machine
or other apparatus or device, and without regard to the additional cost of
suitable material or safety appliance(s) and devices.”

Fromme v. Lang & Co., 181 Or 601, 505, 281 P 120 (1929).

198 Po

Polygon’s motion for summary judgment with respect to that
specification of plaintiff's ELL claim. Accordingly, we reverse
the decisions of the trial court and the Court of Appeals on
that specification and remand it to the trial court for further
proceedings. We affirm the decisions of the trial court and
the Court of Appeals with respect to the other specifications
of plaintiffs ELL claim and his common-law negligence
claim.

The decision of the Court of Appeals is affirmed in
part and reversed in part. The decision of the circuit court
is affirmed in part and reversed in part, and the case is
remanded to the circuit court for further proceedings.

WALTERS, J., concurring.

I concur and write only to press an argument that
plaintiff failed to make about the “special expertise or knowl-
edge” principle. In my view, that principle is particular to
claims against landowners and should not be extended to
preclude a claim against a general contractor for its own
common-law negligence.

This court previously has recognized that a general
contractor can be held liable for its own negligence, even
when the injured party is the employee of an independent
contractor. In Kuhns v. Standard Oil Co., 257 Or 482, 485-
86, 478 P2d 396 (1971), the plaintiff, an employee of an inde-
pendent contractor, sued both the general contractor and
a different independent contractor for negligently causing
his injury. This court upheld the jury’s verdict against the
general contractor, concluding that there was evidence from
which the jury could have found that the general contractor
was negligent in failing to test, inspect, or repair the facility.
Id. at 494. The court explained that, “apart from the ques-
tion of vicarious responsibility on the part of an employer of
an independent contractor, the employer may be liable for
any negligence of his own in connection with the work to be
performed.” Id. at 490. Accord Woodbury v. CH2M Hill, Inc.,
835 Or 154, 163, 61 P3d 918 (2003) (concluding that defen-
dant general contractor could be liable to employee of inde-
pendent subcontractor where there was evidence permitting
jury to find defendant exercised control over safety aspects

Po 199

of project and failed to provide plaintiff with fall protection
training or supervision).

This court also has recognized that, when a plain-
tiff seeks to hold a general contractor vicariously liable for
the negligence of an independent subcontractor, the “spe-
cial expertise or knowledge” principle does not apply. In
Macomber v. Cox, 249 Or 61, 65, 485 P2d 462 (1968), the
court acknowledged the general principle that “the employer
of an independent contractor is not subject to liability for
bodily harm caused to another by a tortious act or omission
of the contractor or his servants.” (Internal quotation marks
omitted.) However, the court also cited the Restatement
(Second) of Torts section 409 (1965), for the proposition that
there are a variety of exceptions to that rule of immunity.
Macomber, 249 Or at 65 n 3. The Restatement provides that
that general principle does not apply when the general con-
tractor fails to exercise reasonable care in the following cir-
cumstances: (1) in giving orders or directions; (2) in employ-
ing competent independent contractors; (3) in inspecting the
work while it is in progress or after it is done; (4) in taking
precautions necessary to enable the work to be done safely;
(5) in performing the work that he retains to himself; and
(6) in supervising the equipment and methods of the inde-
pendent contractor. Restatement (Second) of Torts §§ 410-
415. Thus, under both Kuhns and Macomber, a general con-
tractor can be held liable for its own negligence when its
negligence causes bodily harm to an employee of an inde-
pendent contractor.

Historically, the “special expertise or knowledge”
principle has been applied only to shield possessors of prop-
erty from liability for the negligence of independent con-
tractors hired to perform work in their areas of expertise.
In Yowell v. General Tire & Rubber, 260 Or 319, 490 P2d
145 (1971), the case on which defendant in this case relies,
the defendant was a landowner who was not engaged in the
business that he had hired an independent contractor to
perform. Similarly, in the two cases cited by the court in
Yowell—Feldewerth v. Great Eastern Oil Co., 149 SW2d 410,
413 (Mo Ct App 1941), and Palenscar v. Michael J. Bobb, Inc.,
439 Pa 101, 105, 266 A2d 478 (1970)—the courts treated

200

the defendants as possessors of land and the plaintiffs as
invitees on the land on which they were injured. In both of
those cases, the courts discussed the principle outlined in
section 348 of the Restatement (Second) of Torts defining the
liability of a possessor of land to an invitee. Feldewerth, 149
SW2d at 413; Palenscar, 439 Pa at 105. In contrast, general
contractors are in the construction business and must per-
form their work safely. They should not be able to escape
liability because their subcontractors are required to do
likewise.

I disagree with this court’s statement in Yowell,
in dicta, that, “[rlegardless of whether defendant is to be
viewed in its relation to plaintiff primarily as a possessor of
land or as one who contracts for services,” the result should
be the same. 260 Or at 324. If a general contractor is itself
negligent, the “special expertise or knowledge” principle
should not apply to absolve that contractor of liability.

201

Argued and submitted November 13, 2015, decision of Court of Appeals
reversed, judgment of circuit court reversed, and case remanded to circuit court
for further proceedings August 11, 2016

STATE OF OREGON,
Respondent on Review,
v.

ROBERT GORDON DAVIS,
Petitioner on Review.

(CC 181084; CA A154382; SC S063216)
877 P3d 583

Rond Chananudech, Deputy Public Defender, Salem,
argued the cause and filed the brief for petitioner on review.
With him on the brief was Ernest G. Lannet, Chief Defender,
Office of Public Defense Services.

Shannon T. Reel, Assistant Attorney General, Salem,
argued the cause and filed the brief for respondent on review.
With her on the brief were Ellen F. Rosenblum, Attorney
General, and Paul L. Smith, Deputy Solicitor General.

202 Ld

Before Balmer, Chief Justice, and Kistler, Walters,
Landau, Baldwin, Brewer, and Nakamoto, Justices.**

LANDAU, J.

The decision of the Court of Appeals is reversed. The
judgment of the circuit court is reversed, and the case is
remanded to the circuit court for further proceedings.

 J., retired December 31, 2015, and did not participate in the deci-
sion of this case.

Po 203

LANDAU, J.

Two police officers approached defendant, suspect-
ing that he had been involved in an assault. Defendant
bolted. The police ran after him, yelling, “Stop, police!”
Defendant kept running away. The issue in this case is
whether, in running from the police, defendant committed
the criminal offense of third-degree escape. The statute that
defines the offense requires proof that the defendant was in
custody at the time of the escape. ORS 162.145(1). The trial
court concluded that the police, in shouting for defendant to
stop, had effectively placed him in “constructive custody.”
The Court of Appeals agreed, affirming without a writ-
ten opinion. State v. Davis, 270 Or App 351, 350 P3d 234
(2015). We conclude that police merely shouting for another
person to stop does not place that person in custody for the
purposes of establishing third-degree escape. We therefore
reverse.

The relevant facts are not in dispute. Defendant
threatened and assaulted two people outside of a store, and
two uniformed officers were dispatched to the area. When
the officers arrived, one of them saw defendant walking
away from a group of people. Believing that defendant was
the perpetrator, the officer got out of his patrol car and iden-
tified himself as a police officer. Defendant ran away. The
officer chased him and repeatedly yelled “Stop, police!” The
other officer pursued defendant in his patrol car, activating
its overhead emergency lights and siren. Defendant kept
running and continued to run from the officers until they
apprehended him. The state ultimately charged him with
third-degree escape for fleeing from police after the officer
commanded him to stop.

At trial, defendant moved for a judgment of acquit-
tal, arguing that the state failed to prove that he had been
in custody for purposes of the third-degree escape statute.
Specifically, he argued that the police did not constructively
place him in custody merely by shouting “Stop police!” and
following him with the police siren on. In response, the state
argued that “with the police yelling—telling [defendant]
they were police, telling him to stop, being in clear uniform
*** would count as the escape from custody.”

204 Ld

The trial court denied defendant’s motion, conclud-
ing that defendant had been constructively restrained:

“Well, I think on that one, where you have ‘stop’ and
then ‘stop, police, at least—while we were waiting for your
last witness, it would have been nice if it had said, ‘stop,
you're under arrest, stop police? but I think saying, ‘stop,
stop, police’ is sufficient to establish a person is in *** con-
structive custody.”

Defendant was convicted. He appealed, assigning error to
the trial court’s denial of his motion for judgment of acquit-
tal. The Court of Appeals affirmed without a written opinion.

Before this court, defendant argues that there was
no evidence that, when he ran from police, he was escaping
from “custody” as required by ORS 162.145(1), the statute
that defines the elements of third-degree escape. Defendant
notes that ORS 162.135(4) defines “custody” as the impo-
sition of “actual or constructive restraint *** pursuant to
an arrest or court order.” As defendant sees it, the stat-
ute’s wording is significant in two respects. First, it refers
to an escape from restraint that was imposed pursuant to
an “arrest.” Defendant argues that the term “arrest” is one
of art and refers to “formally taking a person into custody
or actually restraining a person.” Second, defendant notes
that the statute refers to the escape from restraint “pursu-
ant to” such an act of formally taking a person into cus-
tody or actually restraining the person. Thus, defendant
concludes, third-degree escape occurs only when a person
escapes from restraint “after a formal arrest,’ which he
insists necessarily involves being taken into physical cus-
tody. (Emphasis added.) Said another way, defendant sees
the statute as requiring a specific sequence of events: First,
the police must formally arrest a person by taking him or
her into physical custody. Second, thereafter, a person may
commit third-degree escape if he or she escapes from actual
or constructive restraint. In this case, defendant argues, the
police had not yet placed him in physical custody before he
escaped. They merely yelled, “Stop, police!”

The state responds that defendant’s proposed inter-
pretation is contrary to the wording of the relevant statutes,
which refer to escape from actual or constructive restraint

es 205

during the course of an arrest, not necessarily after formal,
physical custody has been achieved. In the state’s view, the
evidence shows that police placed defendant in constructive
custody by yelling, “Stop, police,” in the course of trying to
arrest him. When defendant ran away, the state concludes,
he committed third-degree escape.

The parties’ arguments thus require two things of
us. First, we must determine what is required to establish
the elements of the offense of third-degree escape. That pres-
ents a question of statutory construction, which necessitates
an examination of the text of relevant statutes in context,
along with any pertinent legislative history and other aids
to construction. State v. Gaines, 346 Or 160, 171-73, 206 P3d
1042 (2009). Second, we must determine whether the state
offered sufficient evidence to survive defendant’s motion for
a judgment of acquittal. That requires us to view the facts
and all reasonable inferences that can be drawn from them
in the light most favorable to the state, to assess whether
a reasonable finder of fact could find proof of each of the
elements of the offense beyond a reasonable doubt. State v.
Waterhouse, 359 Or 351, 353, 373 P3d 131 (2016).

We begin with the elements of the offense of third-
degree escape. ORS 162.145(1) provides that “[a] person
commits the crime of escape in the third degree if the person
escapes from custody.” An “escape” is the “unlawful depar-
ture of a person from custody.” ORS 162.135(4). It includes
running away. See State v. Lonergan, 344 Or 15, 21, 176 P3d
874 (2008) (defendant committed third-degree escape when.
he “stood up and ran” from custody). “Custody,” in turn,
means the “imposition of actual or constructive restraint by
a peace officer pursuant to an arrest or court order, but does
not include detention in a correctional facility, youth correc-
tion facility, or a state hospital.” ORS 162.135(5).

The legislature has not defined the key terms of the
statutory definition of “custody”—“constructive restraint”
or “pursuant to an arrest”—-and this court has not yet
had occasion to interpret them. “Constructive” ordinarily
means “[i]nferred—often used in law of an act or condition
assumed from other acts or conditions which are considered.
by inference or by public policy as amounting to or involving

206 Ld

the act or condition assumed.” Webster’s Third New Int'l
Dictionary 489 (unabridged ed 2002); see also Black’s Law
Dictionary 333 (4th ed 1968) (defining “constructive” as
“[t]hat which has not the character assigned to it in its
own essential nature, but acquires such character in conse-
quence of the way in which it is regarded by a rule or policy
of law”). “Restraint” usually refers to “the condition of being
restrained, checked, or controlled : deprivation of liberty :
confinement.” Websier’s at 1937. Taken together, those defi-
nitions suggest that a person is subject to “constructive
restraint” when an officer lawfully asserts authority to con-
trol a person’s actions or freedom of movement, even if the
officer does not have physical control of the person.

That leaves the requirement that the act of placing
another person in actual or constructive restraint have been
taken “pursuant to” an “arrest.” The former term generally
refers to “in the course of carrying out” or “in conformance
to or agreement with : according to.” Webster’s at 1848; see
also Black’s at 1401 (“in accordance with or by reason of
something; conformable; in accordance; agreeably; conform-
ably; a carrying out or with the effect, the act of executing”).
Thus, in State v. McVay, 313 Or 292, 833 P2d 297 (1992), this
court held that a defendant had not committed third-degree
escape when he ran from police officers who had lacked
authority to arrest him at that time. The court explained
that, although the officers had restrained him before he had
escaped, that restraint was not “pursuant to an arrest.” Id.
at 295-961 .

The term “arrest” itself is not defined in the statute
setting out the elements of the offense. At the time of the
enactment of ORS 162.135(4), however, there did exist two
other statutory definitions of “arrest.” See generally State v.

1 The state emphasizes the first of the quoted definitions—‘in the course of
carrying out”—observing that defendant does not argue that any of the other
definitions applies. In construing a statute, however, our task is not merely to
pick among interpretations that the parties choose to advance. Rather, it is to
determine the interpretation that the legislature most likely intended, regard-
less of the parties’ arguments. Engweiler v. Persson / Dept. of Corrections, 354
Or 549, 559, 316 P3d 264 (2013) (“[T]his court has an obligation to reach what
we regard as a correct interpretation of statutes and rules. Indeed, we are so
obliged whether or not the correct interpretation has even been advanced by the
parties.”).

po 207

McClure, 355 Or 704, 708, 335 P3d 1260 (2014) (describing
history of statutory definitions of “arrest”). One defined the
term to mean “the taking of a person into custody so that
he may be held to answer for a crime.” Former ORS 133.210
(1969), repealed by Or Laws 1973, ch 836, § 358. The other
provided that “[aJn arrest is made by an actual restraint
of the person of the defendant or by his submission to the
custody of the officer.” Former ORS 133.250, repealed by Or
Laws 1978, ch 836, § 358.” Both of those are consistent with
the ordinary meaning of the term as “[t]aking, under real
or assumed authority, custody of another for the purpose
of holding or detaining him to answer a criminal charge
or civil demand.” Black’s at 140. They are also consistent
with the way that this court has generally referred to the
term “arrest” in discussing police encounters that are sub-
ject to the constraints of Article I, section 9, of the Oregon
Constitution, which protects against unreasonable searches
and seizures. See, e.g., State v. Ashbaugh, 349 Or 297, 308-
09, 244 P3d 365 (2010) (“arrests” are “restraints on an indi-
vidual’s liberty that are steps toward charging individuals
with a crime”).

With those definitions in mind, then, third-degree
escape occurs when a person runs away from a police offi-
cer who has lawfully asserted authority to control a person’s
freedom in the course of carrying out an arrest, that is, in
the course of taking a person into custody to answer for a
crime. Contrary to defendant’s argument, the relevant stat-
utes do not provide that third-degree escape may occur only
after a person has been taken into physical custody; ORS
162.135(4) specifies that the offense occurs when a person
escapes custody during the course of an arrest or when police
attempt to restrain that person pursuant to their authority
to make such an arrest.

That much, at least, is evident from an examination
of the text of ORS 162.135(4) and ORS 162.145(1). There is
little in the legislative history that touches on the intended

2 Both statutes were repealed and replaced with what is now ORS 133.005(1),
which defines “arrest” as “to place a person under actual or constructive restraint
or to take a person into custody for the purpose of charging that person with an
offense.” That definition, unlike the ones that it replaced, is limited in its applica-
tion to ORS chapter 183 and so had no direct application to this case.

208 Ld

meaning of those statutes. But a review of the little history
that does exist appears to confirm what our analysis of the
text suggests.

Both ORS 162.135(4) and ORS 162.145(1) were
enacted as part of the revision of the Oregon Criminal
Code based on the recommendations of the Criminal Law
Revision Commission in 1970. Or Laws 1971, ch 743, §§ 189-
90. During a meeting of the commission, members discussed
the offense of third-degree escape, as well as the related
offense of resisting arrest. At one point during the discus-
sion of resisting arrest, one of the members, Judge Burns,
raised the question whether flight from arrest was “covered
elsewhere.” A representative of the Office of Legislative
Counsel, Wallingford, replied that, “if an arrest had been
made, flight would be escape in the third degree in that the
person would be in constructive custody.” Minutes, Criminal
Law Revision Commission, Jan 23, 1970, 20. Another com-
mission member, Knight, then asked precisely when an
arrest would be made, and Wallingford replied that “it was
made at the moment the officer verbally or physically made
it known that the individual was under arrest.” Id.

Defendant seizes on Wallingford’s reference to an
arrest having been “made” as evidence that the legislature
intended a completed, physical arrest to have been accom-
plished before the escape could take place. But that is con-
tradicted by Wallingford’s immediately following qualifica-
tion, in which he said that the escape could occur any time
after the officer “made it known that the individual was
under arrest,” which he said would constitute “constructive
custody.” As we have suggested, the statute applies when
a person escapes from constructive restraint that occurs
during the course of an arrest or pursuant to the authority
to make an arrest, not solely after police have taken the
person into physical custody. Thus, for example, if an officer
were to say, “Stop, police! You are under arrest,” the statute
would apply if a defendant were to continue running from
the officer. The defendant would have been subject to con-
structive restraint “pursuant to” an arrest; indeed, as the
foregoing legislative history suggests, the defendant in that
example would effectively be escaping from an arrest, albeit
not one that involved actual, physical custody.

Po 209

The commission's official commentary to the pro-
posed revisions sheds little additional light. It does say that
the proposed revision

“defines ‘custody’ as the imposition of actual or construc-
tive restraint by a peace officer pursuant to either (a) an
arrest, or (b) a court order. *** ‘Custody’ is intended to
apply to custodial situations other than correctional facil-
ity confinement, i.e., while the actor is under actual or con-
structive restraint but not yet committed to a correctional
facility.”

Commentary to Criminal Law Revision Commission Proposed
Oregon Criminal Code, Final Draft and Report § 189, 193
(July 1970). That particular comment confirms our interpre-
tation of the phase “pursuant to” as referring to imposing
actual or constructive restraint not after a completed, physi-
cal arrest, but in the course of or under the officer’s authority
to make an arrest. In emphasizing that the term “custody”
is intended to apply to circumstances in which confinement
has not yet actually occurred, the comment also appears to
confirm that the statute applies to an escape that occurs
before physical restraint has been imposed; rather, it applies
when escape occurs while the person was under construc-
tive restraint in the course of an arrest or in carrying out
authority to arrest.

With that in mind, we turn to our second task, that
is, to determine whether the trial court erred in denying
defendant’s motion for a judgment of acquittal. The evidence
in this case shows that, when officers located defendant, one
of them got out of his patrol car and identified himself as a
police officer. Defendant ran away. The officer chased him
and yelled “Stop, police!” The other officer pursued defen-
dant in his patrol car, activating its overhead emergency
lights and siren. Defendant kept running and continued to
run from the officers until they apprehended him.

A reasonable trier of fact certainly could conclude
from that evidence that the officer had, by yelling “Stop,
police!,” placed defendant in constructive restraint. The
officer asserted authority to restrict defendant’s freedom to
move about. What is missing, however, is any evidence that
the officer did so “pursuant to an arrest” in any of the senses

210 Ld

that we have identified. There is no evidence that the offi-
cer yelled for defendant to stop as part of an effort to place
him under arrest. There is no evidence that the officer told
defendant to stop in accordance with the officer’s authority
to arrest him. The evidence, taken in the light most favor-
able to the verdict, shows only that, at the time defendant
ran away, the officer had told him to stop. An order to stop is
not necessarily equivalent to placing a person under arrest.
The former entails a “temporary restraint on a person’s lib-
erty,” while, as we have noted above, the latter involves a
more significant “restraint[] on an individual’s liberty that
lis a] step[] toward charging that individual with a crime.”
Ashbaugh, 349 Or at 308-09; see also State v. Rodgers/
Kirkeby, 347 Or 610, 621-22, 227 P3d 695 (2010) (explaining
distinctions between different police encounters, including
“stops” and “arrests”).

The state insists that defendant does not dispute
the fact that the officer intended to arrest him. Cited in sup-
port of that assertion is a page from defendant’s brief before
this court. What defendant said at that point in his brief,
however, is that “the officer did not actually restrain defen-
dant as part of a formal arrest.” Defendant acknowledged
that, by yelling “Stop, police!,” the officer “intended to or
attempted to restrain defendant.” Thus, defendant conceded
that the officer intended to restrain him. But nowhere in
his brief do we see a concession that the officer intended to
arrest him.

Given a complete absence of evidence that the offi-
cer commanded defendant to stop in the course of making
an arrest or pursuant to the officer’s authority to arrest him,
the state failed to establish all the required elements of the
offense of third-degree escape. It necessarily follows that the
trial court erred in denying his motion for a judgment of
acquittal on that charge.

The decision of the Court of Appeals is reversed.
The judgment of the circuit court is reversed, and the case
is remanded to the circuit court for further proceedings.

211

Argued and submitted November 9, 2015, decision of Court of Appeals affirmed,
judgment of circuit court reversed, and case remanded to circuit court for
further proceedings August 11, 2016

Jan WYERS,
as Personal Representative of the Estate of
Dianne Terpening, Deceased,
Respondent on Review,
v.
AMERICAN MEDICAL RESPONSE NORTHWEST, INC.,

an Oregon corporation,

; Petitioner on Review.

091014750; CA A149258 (Control)

Hazel CORNING,
Respondent on Review,
v.
AMERICAN MEDICAL RESPONSE NORTHWEST, INC.,
an Oregon corporation,
Petitioner on Review.
091116570; A149259

Violet ASBURY,
Respondent on Review,
v.
AMERICAN MEDICAL RESPONSE NORTHWEST, INC.,
an Oregon corporation,
Petitioner on Review.
091116571; CA A149260

Stacey WEBB,
Respondent on Review,
v.
AMERICAN MEDICAL RESPONSE NORTHWEST, INC.,
an Oregon corporation,
Petitioner on Review.

091116572; CA A149261

212

Michele SHAFTEL,
Respondent on Review,
v.
AMERICAN MEDICAL RESPONSE NORTHWEST, INC.,
an Oregon corporation,
Petitioner on Review.
091216650; CA A149262

Natsue AKRE,
Respondent on Review,
v.
AMERICAN MEDICAL RESPONSE NORTHWEST, INC.,
an Oregon corporation,
Petitioner on Review.
100202934; CA A149263
(SC S063000)

377 P3d 570

ee
Michael J. Estok, Lindsay Hart, LLP, Portland, argued
the cause and filed the briefs for petitioner on review. With

him on the briefs was James L. Dumas, Lindsay Hart, LLP,
Portland.

po 2138

Mark McDougal and Gregory Kafoury, Kafoury &
McDougal, Portland, argued the cause and filed the briefs
for respondents on review.

Lindsey H. Hughes, Keating Jones Hughes, PC.,
Portland, filed the brief for amicus curiae Oregon Association
of Defense Counsel.

Erin K. Olson, Law Office of Erin Olson, P.C., Portland,
filed the brief for amicus curiae Oregon Trial Lawyers
Association.

Before Balmer, Chief Justice, and Kistler, Walters,
Landau, Baldwin, and Brewer, Justices.**

LANDAU, J.

The decision of the Court of Appeals is affirmed. The
judgment of the circuit court is reversed, and the case is
remanded to the circuit court for further proceedings.

Linder, J., retired December 31, 2015, and did not participate in the deci-
sion of this case. Nakamoto, J., did not participate in the consideration or decision
of this case.

rT

LANDAU, J.

This consolidated appeal concerns six civil actions
against an ambulance company for permitting a paramedic
in its employ to sexually abuse women while they were
patients. The claims are alleged under ORS 124.100(5),
which authorizes a vulnerable person to bring an action
against a person who “permit[s]” another person to engage
in physical or financial abuse “if the person knowingly acts
or fails to act under circumstances in which a reasonable
person should have known” of the abuse. The ambulance
company moved for summary judgment on the ground that
there was no evidence that it actually knew of its para-
medic’s abuse against plaintiffs and then acted in a way
that permitted that abuse to occur. The trial court agreed.
and granted the motion. The Court of Appeals reversed, con-
cluding that the statute does not require actual knowledge
of a plaintiffs abuse. Wyers v. American Medical Response
Northwest, Inc., 268 Or App 232, 342 P3d 129 (2014). For
the reasons that follow, we affirm the decision of the Court
of Appeals and reverse the judgment of the trial court.

I. BACKGROUND

Because the trial court granted a defense motion for
summary judgment, we state the facts in the light most favor-
able to plaintiffs. Shell v. Schollander Companies, Inc., 358
Or 552, 554 n 1, 369 P3d 1101 (2016). Defendant American
Medical Response Northwest, Inc., (AMR) provides ambu-
Jance and other medical transportation services. AMR
employed Haszard as a paramedic. This case arises out of
multiple allegations of sexual abuse by Haszard of patients
while they were being transported in AMR ambulances.

A. The Herring Litigation

In late 2007, AMR transported a female patient,
Herring, to a hospital. During Herring’s transport, Haszard
placed his hand on Herring’s hand and shoved their hands
down inside the front of her pants. Later at the hospi-
tal, Herring screamed to staff about the incident, which
prompted a call to AMR. An employee of AMR’s spoke with
Herring at the hospital and later called police to report that
Herring wanted to make a complaint about ambulance staff.

pT 215

Police responded and, as part of their investigation, discov-
ered in their database a prior complaint about Haszard.

Three days later, police arrested Haszard. The
arrest resulted in publicity, which prompted other women to
come forward and report similar incidents to the authorities.
Haszard was eventually charged with various crimes and
pled guilty to attempted first-degree sexual abuse as to four
women. Not long after the Herring incident, Herring and a
number of other former patients filed individual common-
law battery and negligence actions against both Haszard
and AMR. Herring eventually obtained a jury verdict in her
favor. See Herring v. American Medical Response Northwest,
255 Or App 315, 327, 297 P3d 9 (2018) (affirming judgment),
and the other former patients settled.

B. Discovery of Earlier Incidents of Abuse

As part of pretrial discovery in the Herring litiga-
tion, other former patients were contacted and interviewed
about their ambulance transport experiences with AMR
in general and with Haszard in particular. That process
revealed that additional women—including the six plaintiffs
in this case—had been inappropriately touched by Haszard
during ambulance transport.

1. Spain

The first incident occurred in February 2006 and
involved Spain, who awoke from unconsciousness in the back
of an AMR ambulance to find Haszard pressing her hand on
his crotch and rocking back and forth. She later called a
business number for AMR and told the receptionist that the
paramedic was a “freak” who had inappropriately touched
her, that it was unsafe for that paramedic to transport little
girls, and that he should be taken off ambulance duty. When
asked, the receptionist declined to provide Spain with the
paramedic’s name. Spain’s sister witnessed the phone call
and later recalled that Spain had told her that the recep-
tionist had hung up on Spain.

AMR, which had in place a regular process for han-
dling ambulance staff complaints, had no record of the tele-
phone call from Spain.

26

2. Whalen

A month later, in March 2006, AMR sent customers
a survey. One of those customers, Whalen, reported in her
survey that Haszard had failed to respect her privacy at
the hospital by not looking away while a nursing assistant
helped her into a gown, despite her obvious discomfort. One
of AMR’s supervisors investigated the complaint by inter-
viewing both Whalen and Haszard. During that interview,
Whalen told the supervisor that Haszard had stared at her
and acted sexually aroused, but she made no complaint
about any unwanted touching. She later recalled that the
supervisor had “dismissed everything that [she had] said,”
telling her that she “must have been imagining things.” The
supervisor, however, did write an internal report recounting
Whalen’s complaint that Haszard had not shown sufficient
consideration for her privacy and concluding that Whalen’s
complaint had been “substantiated.”

3. Plaintiff Akre

In April 2006, Akre was transported by an AMR
ambulance attended by Haszard. She had trouble breath-
ing, was choking, and feared for her life. During her trans-
port, Haszard repeatedly brushed her bare chest while
placing leads on her. She was afraid to tell Haszard to stop,
because she thought that Haszard would harm her. She did
not report the incident to AMR or to anyone else.

4. Rotting

In December 2006, Rotting was transported by
AMR ambulance with Haszard attending. During the trans-
port, Haszard touched Rotting in a manner similar to the
sexual touching that plaintiff Akre had described. He also
slowly stroked Rotting’s thigh. Rotting reported the incident
to a nurse and to family members. Her son called AMR and
spoke with the same supervisor who had investigated the
Whalen complaint. The supervisor then called Rotting and
told her that there would be an investigation. The inves-
tigation, however, was limited to interviewing Haszard,
who denied having engaged in any inappropriate conduct.
Rotting’s son later called AMR again, this time stating that
the police should be involved. AMR took no further action,

po 217

although its risk management department was internally
notified that Rotting might file a complaint.

5. Plaintiffs Shaftel, Asbury, and Terpening

In January 2007, plaintiff Shaftel was transported
by AMR ambulance, attended by Haszard. While Shaftel
went in and out of consciousness in the ambulance, Haszard
repeatedly touched her bare chest. About three weeks
later, plaintiff Asbury, age 73, also was sexually touched by
Haszard during an ambulance transport. And three weeks
after that, plaintiff Terpening, who was hearing impaired,
was also.' None of those three women reported Haszard’s
conduct to AMR, the police, or hospital staff.

6. Pries

In March 2007, Pries reported to police that Haszard
had sexually abused her during an ambulance transport by
taking her hand, placing it inside her pants, and manipulat-
ing it. Police spoke with an AMR supervisor about the inci-
dent. Several AMR employees, including Haszard, then met
with a company risk-management official. AMR ultimately
determined that it could not substantiate Pries’s allegations,
but it warned Haszard in writing that either that incident or
the earlier Rotting incident would be reopened if more infor-
mation came to light. AMR did not make any effort to con-
tact Pries, did not request any further information from the
police, and did not tell police about the Rotting complaint
from the previous year.

1. Plaintiffs Webb and Corning

In April 2007, Haszard sexually touched plaintiff
‘Webb during an ambulance transport, while she went in and
out of consciousness. Four months after that, Haszard also
sexually touched plaintiff Corning, then 86, during a trans-
port. Neither plaintiff Webb nor plaintiff Corning reported
the incidents to AMR, and the company did not learn about
them until discovery in the Herring litigation.

C. Initiation and Disposition Below of Plaintiffs’ Claims

Plaintiffs Akre, Shaftel, Asbury, Terpening, Webb,
and Corning individually brought civil actions against AMR

1 Terpening is now deceased. Plaintiff Wyers serves as the personal repre-
sentative of her estate.

218

for permitting another person—Haszard—to sexually abuse
them, in violation of ORS 124.100. Each of their complaints
alleged that AMR knew or had reason to know that Haszard.
had physically abused ill or injured female patients in the
past and that he was likely to do so in the future if allowed
to be alone with them in the back of an ambulance. Their
complaints further alleged that AMR nonetheless directed.
Haszard to continue to work in those circumstances, result-
ing in their abuse. The six cases were consolidated for trial.

AMR moved for summary judgment, arguing that,
to establish liability under ORS 124.100(5), plaintiffs must
produce evidence that it either participated in or knowingly
permitted Haszard to commit the specific acts of abuse
that were the bases for plaintiffs’ claims. In this case, AMR
argued, it is undisputed that it had no knowledge of any of
those acts of abuse before they occurred. Plaintiffs responded
that ORS 124.100(5) does not require proof of actual know]-
edge of their abuse. They argued that, instead, the statute
requires only that AMR acted or failed to act when it should
have known that such abuse was likely to occur and that, in
light of earlier complaints about Haszard, AMR should have
known that he was likely to abuse them.

The trial court agreed with AMR, concluding that
the statute requires proof that AMR “had knowledge of the
specific abuse that *** Haszard allegedly committed on each
{pllaintiff.” Finding an absence of evidence that AMR had
been aware of Haszard’s abuse of plaintiffs until long after
that abuse had occurred, the court granted AMR’s motion
for summary judgment and dismissed plaintiffs’ claims.

Plaintiffs appealed, and the Court of Appeals
reversed. Wyers, 268 Or App at 255. That court reasoned
that ORS 124.100(5) did not require plaintiffs to establish
that AMR subjectively knew that Haszard was engaging in
misconduct with plaintiffs at the time that that misconduct
was occurring. Id. at 246-47. Rather, that statute required
only that AMR “have knowledge of facts establishing that it
knew of the substantial risk of the abuse actually suffered.”
Id. at 247. The court ultimately concluded that a defendant
“permit[s]” the abuse at issue if the defendant either “acted
or failed to act with knowledge that would lead a reasonable

pT 219

person to conclude that the plaintiff was being abused or
would likely be abused in the manner alleged by the plain-
tiff.” Id. Applying that standard to this case, the court deter-
mined that plaintiffs had presented “sufficient evidence
from which a reasonable juror could find that [AMR had]
‘permitted’ Haszard to sexually abuse plaintiffs.” Id. at 255.
We allowed review to address the parties’ arguments about
the meaning of the requirements set out in ORS 124.100(5).

TI. ANALYSIS
A. Interpretation of ORS 124.100(5)

ORS 124.100 through ORS 124.140 set out a frame-
work that creates a civil action for abuse of a vulnerable
person. ORS 124.100(2) provides:

“A vulnerable person who suffers injury, damage or
death by reason of physical abuse or financial abuse may
bring an action against any person who has caused the
physical or financial abuse or who has permitted another
person to engage in physical or financial abuse.”

A “vulnerable person” is a person who is elderly, financially
incapable, or incapacitated, or, in certain circumstances,
has a disability.2 ORS 124.100(1)(e). “Physical abuse,” for
the purpose of the statute, includes sexual abuse. ORS
124.105 (1)(e)-(h).

ORS 124.100(5) identifies the particular require-
ments for bringing an action for permitting another to
engage in physical or financial abuse:

“An action may be brought under this section against
a person for permitting another person to engage in phys-
ical or financial abuse if the person knowingly acts or fails
to act under circumstances in which a reasonable person
should have known of the physical or financial abuse.”

By its terms, that statute refers both to a requirement that
the defendant “knowingly” act and that the defendant do so
under circumstances in which a reasonable person “should
have known” of the abuse. Not surprisingly, the parties seize

> AMR does not dispute that plaintiffs were “vulnerable persons” within the
meaning of the statute.

220

on one of those two references to the virtual exclusion of the
other.

AMR highlights the reference to “knowing[]” action
or inaction, and argues that “ORS 124.100(5) requires proof
that the defendant engaged in ‘knowing’ and ‘intentional’
misconduct.” AMR briefly acknowledges the subsequent
statutory reference to what a reasonable defendant “should
have known,” but asserts that it “cannot undo the actual
knowledge requirement stated earlier.” (Emphasis in orig-
inal.) AMR attempts to reconcile the apparent conflict by
reading the statute to require actual knowledge of the con-
duct that constitutes the abuse while perhaps not actually
knowing—but in circumstances in which it should have
known—that the conduct constituted a crime qualifying as
abuse within the meaning of the statute.

Plaintiffs highlight the reference to what a defen-
dant “should have known” in ORS 124.100(5), arguing that
liability depends on proof that a reasonable person merely
“should have known” of the abuse. In plaintiffs’ view, AMR’s
reading of that phrase is nonsensical—citing by way of exam-
ple evidence that a defendant permitted another to commit
such abusive acts as rape and sodomy under circumstances
in which the defendant, while perhaps not actually knowing
that those acts are prohibited forms of abuse, nevertheless
should have known that fact. At the same time, plaintiffs
not once in their brief explain the significance of the stat-
ute’s reference to “knowingly act[] or fail[] to act.”

We are thus confronted with an issue of statutory
construction, requiring us to determine the meaning of the
statute that the legislature most likely intended, based on
an examination of its text in context, legislative history, and
pertinent rules of construction. State v. Gaines, 346 Or 160,
171-72, 206 P3d 1042 (2009). We begin with the text of the
statute, which as we have noted authorizes an action against
a defendant who has permitted abuse of a vulnerable per-
son if the defendant “knowingly acts or fails to act under
circumstances in which a reasonable person should have
known of the *** abuse.” ORS 124.100(5). The statute sets
out two different mental states—one that appears to refer to
actual knowledge and the other that refers to constructive

Ce

Po 221

knowledge. It is an awkwardly phrased bit of drafting, to
say the least. And the parties’ difficulty in reconciling the
two is understandable. We cannot, however, pick one mental
state and ignore the other, as the parties effectively propose.
We are obligated to take a statute as we find it and give
effect to all of it, if possible. See, e.g., Force v. Dept. of Rev.,
350 Or 179, 190, 350 P3d 189 (2011) (“Statutory provisions,
however, must be construed, if possible, in a manner that
will give effect to all of them.” (Internal quotation marks
omitted.)); see also ORS 174.010 (“[WJhere there are several
provisions or particulars such construction is, if possible, to
be adopted as will give effect to all.”).

In this case, the key to complying with that obli-
gation lies in recognizing that statutory references to cul-
pable mental states always refer to an object; said another
way, a mental state is always “directed toward something.”
State v. Crosby, 342 Or 419, 428, 154 P3d 97 (2007). That
“something” to which a mental state is directed may be
particular conduct, or it may be the circumstances in which
conduct occurs, or it may be a particular result. Id. at 428-
29. Knowledge as to conduct, for example, can refer to an
awareness of a bodily movement or knowledge of the essen-
tial character of an act, as when a criminal statute requires
proof of knowledge of the “assaultive nature” of a defendant’s
conduct. State v. Barnes, 329 Or 327, 337-38, 986 P2d 1160
(1999). In contrast, knowledge as to circumstances can refer
to awareness of particular facts while prohibited conduct is
being committed, as, for example, a criminal statute requir-
ing proof of knowledge of the age of the person to whom a
defendant has sold drugs. State v. Blanton, 284 Or 591, 593,
588 P2d 28 (1978).

ORS 124.100(5) does refer to two different mental
states. But the object of each of those references to a men-
tal state is significantly different. First, the statute requires
proof that a defendant “knowingly act[ed] or fail[ed] to act.”
In that phrase, the adverb “knowingly” modifies conduct,
namely, acting or failing to act. It does not refer to knowl-
edge of particular circumstances. Nor does it refer to knowl-
edge of any particular result. It refers to the quality of the
defendant’s conduct—“knowing[],” as opposed to accidental,
reckless, or something else.

222

To be sure, the particular “act[]” or “fail[ure] to act”
that the defendant must “knowingly” commit is conduct that
“permit[s]” another person to engage in prohibited abuse.
ORS 124.100(5). AMR argues that the use of the term “per-
mit” necessarily implies that the one doing the permitting
must have actual knowledge of the conduct that has been
permitted. It is not an unreasonable argument. In ordi-
nary usage, the word “permit” can be used to connote active
authorization. Webster's, for example, lists among its defini-
tions of the verb “to consent to expressly or formally *** to
give (a person) leave,” Webster’s Third New Int'l Dictionary
1683 (unabridged ed 2002), suggesting that the actor has
full knowledge of what is being permitted.

But AMR’s reliance on that definition of the word
“permit” is unavailing for several reasons. First, ORS
124.100(5) itself does not say that a defendant must “know-
ingly permit” abuse to occur. Rather, the word “knowingly”
modifies “acts or fails to act.” Second, the ordinary meaning
of the word “permit” is not necessarily as narrow as AMR
suggests. In common usage, the word “permit” is also used
to refer to an act or failure to act that has the effect of mak-
ing something possible, without mention of intention as to
the result. Webster's, for example, also provides that “permit”
can mean “to make possible[;] *** to give an opportunity.”
Id.; see also American Heritage Dictionary of the English
Language 1315 (5th ed 2011) (“[tlo afford opportunity or
possibility”). Third, the effect of AMR’s reading is to create
the sort of conflict between mental state requirements that
we have just noted that we are obligated to avoid, if possible.
If the statute requires a defendant to have knowledge of the
facts or circumstances of the abuse, then the later reference
to a requirement that a reasonable defendant “should have
known” of those very facts or circumstances makes no sense.
See also generally Moore v. Willis, 307 Or 254, 259, 767 P2d
62 (1988) (allegation that person knew something is differ-
ent from allegation that person “should have known” some-
thing; former amounts to ultimate fact, but latter requires
judgment about particular set of circumstances from which
conclusions must be drawn).

Taking ORS 124.100(5) as it is written, it states
that what a defendant must know is the character or nature

po 223

of the defendant's act or failure to act. That act or failure to
act must have the effect of permitting abuse to occur. But
the effect of that act or failure to act of permitting abuse
is a result, actual knowledge of which the statute does not
require.

We turn, then, to the requirement that the defen-
dant have acted or failed to act “under circumstances in
which a reasonable person should have known of the phys-
ical or financial abuse.” ORS 124.100(5). The wording of
that requirement leads to several observations. First, the
reference to circumstances in which “a reasonable person
should have known” unambiguously sets out a constructive
knowledge requirement. That is, ORS 124.100(5) applies
under circumstances in which a reasonable person should
have known of another’s abuse, regardless of whether the
defendant actually knew of the abuse. Cf, Gaston v. Parsons,
318 Or 247, 266, 864 P2d 1319 (1994) (Peterson, J., dissent-
ing) (“constructive knowledge” of harm refers to when, “in
the exercise of reasonable care,” it should have been discov-
ered even if not actually discovered); Forest Grove Brick v.
Strickland, 277 Or 81, 86, 559 P2d 502 (1977) (“construc-
tive knowledge” refers to a person “charged with knowledge
that a reasonably diligent inquiry would disclose” (internal
quotation marks omitted)). Second, the statute appears to
assume that the “circumstances” themselves are known or
available to the reasonable person. Thus, ORS 124.100(5)
provides that, based on circumstances that are known to a
reasonable person, certain other facts perhaps not actually
known will nevertheless be imputed, because a reasonable
person aware of those circumstances should have known
of the abuse. Third, what a reasonable person should have
known is “the physical or financial abuse.” In contrast to the
first mental state requirement, then, the second one clearly
refers to constructive awareness of a particular fact—
another person’s physical or financial abuse—not awareness
of the defendant’s own conduct.

There remains an issue concerning what ORS
124.100(5) means when it refers to “the physical or financial
abuse” that a reasonable person should have known. On the
one hand, the use of the definite article “the” in reference
to “physical or financial abuse” could refer to the specific

22 ee

incident or incidents of abuse that the defendant allegedly
has permitted another to commit against the plaintiff or
plaintiffs. On the other hand, it could refer more generally to
the type of abuse that the defendant has permitted another
to commit, whether against the plaintiff or against another
vulnerable person.

AMR argues for the former interpretation. In its
view, ORS 124.100(5) applies only under circumstances in
which it can be demonstrated that it should have known of
“the very same incident of abuse that injured the plaintiff.”
In fact, AMR goes even further and contends that the ref-
erence to “the” abuse in ORS 124.100(5) has the effect of
transforming a statute requiring constructive knowledge of
abuse to one requiring actual knowledge of that abuse. In
AMR’s view,

“the constructive knowledge requirement in ORS 124.100(5)
is necessarily limited to knowledge of the abuse that
occurred on the particular plaintiff. In other words, the
defendant must have some degree of actual knowledge of
the abuse on the plaintiff.”

(Emphasis in original.)

AMR’s contention that the requirement that a defen-
dant reasonably should have known of “the” abuse amounts
to a requirement that the defendant have actually known of
that abuse is squarely contradicted by the statute’s explicit
reference to constructive—not actual—knowledge. But that
does not completely resolve the matter. ORS 124.100(5) does
refer to constructive knowledge of “the” abuse, and AMR’s
broader suggestion that the phrasing could be taken to refer
to constructive knowledge of a specific instance or instances
of abuse against the plaintiff or plaintiffs is not unreason-
able. This court, after all, has not infrequently declared that
the use of the definite article can signify a narrowing intent.
See, e.g., State v. Lykins, 357 Or 145, 159, 348 P3d 231 (2015)
(“As a grammatical matter, the definite article, ‘the, indi-
cates something specific, either known to the reader or lis-
tener or uniquely specified.”).

The court, however, has also cautioned that the use
of the definite article is not always, so to speak, definitive.
See, e.g., SAIF v. DeLeon, 352 Or 130, 138, 282 P3d 800 (2012)

Po 225

(“[T}he definite article ‘the’ is not dispositive.”). Its use in
context may reveal an intention to encompass less categor-
ically specific referents. See, e.g., State v. Stark, 354 Or 1,
7-8, 307 P3d 418 (2018) (statutory reference to “the judg-
ment” applies not only to original judgment but also to sub-
sequently entered judgments). This is such a case for several
reasons.

To begin with, the statutory context suggests that
it is not likely that the legislature intended its use of the
definite article in ORS 124.100(5) to be dispositive. In fact,
ORS 124.100 refers to “physical or financial abuse” a num-
ber of times, only sometimes using the definite article. ORS
124.100(2), for example, provides that a vulnerable person
who has been abused may bring an action against a person
“who has permitted another person to engage in physical
or financial abuse”—without specifying “the” abuse against
that particular vulnerable person. Presumably, the abuse
mentioned in subsection (2) is the same as the abuse men-
tioned in subsection (5) of the same statute. Subsection (5)
in fact specifically states that it refers to an action “brought
under this section,” namely, ORS 124.100(2). Yet subsection
(2) is phrased more generally, not referring solely to the
particular abuse that another person may commit against
a particular vulnerable person.’ At the very least, the incon-
sistency in phrasing between subsections (2) and (5) in this
regard cautions against placing too much emphasis on the
use of the definite article in the latter subsection.

Aside from that, the consequences of adopting
AMR’s proposed reading of the statute give us pause. If
AMR is correct that ORS 124.100(5) applies only under
circumstances in which a reasonable person should have
known of the very abuse that its actions permitted, then,
logically, the statute would practically never apply. It would
come into play only when a defendant participated in or was
present during an instance of abuse, or when the defendant

® The wording of ORS 124.100(2) itself appears internally inconsistent on
this very point. It states that a vulnerable person who was the victim of physical
or financial abuse may bring an action against “any person who has caused the
physical or financial abuse” (using the definite article) and any person “who has
permitted another person to engage in physical or financial abuse” (omitting any
article).

226 ee

had reason to know in advance of a perpetrator’s plan to
abuse a particular vulnerable person. Under AMR’s reading
of ORS 124.100(5), then, an employer that has received con-
firmed reports of an employee’s repeated abuse of multiple
vulnerable patients would face no liability under that stat-
ute for allowing that employee to abuse a vulnerable patient,
so long as the employer had no reason to know of the employ-
ee’s abuse of that specific patient.

AMR insists that the legislative history demon-
strates that ORS 124.100(5) was intended to have precisely
that limited effect. According to AMR, that history shows
that the statute was “directed toward ‘abusers’ and toward
no one else. Individuals who ‘permitted’ abuse by third par-
ties were just a sub-category of ‘abusers.”” AMR argues that
the legislative history demonstrates that to be the case in
two ways. First, AMR relies on the absence of legislative his-
tory suggesting a broader intended meaning of the statute.
It reasons that

“there was no discussion about standards of negligence or
recklessness fitting into this statute, or about potentially
applying this statute against negligent employers with
wayward employees. Had such standards been intended,
one might expect some discussion[,] given that such a law
would have far-reaching implications ***.”

Second, AMR argues that the focus of the legislature in
passing what eventually became ORS 124.100 was on abus-
ers and that the law was not intended to target “institu-
tional providers of care or services.” For the reasons that
follow, AMR’s reliance on that “history” is unavailing.

We begin with AMR’s reliance on an absence of
any comment on the constructive knowledge requirement
during the legislature’s deliberations on what became ORS
124.100(5). As this court has stated on a number of occa-
sions, silence in the legislative history of a statute, by itself,
is not often reliable evidence that the legislature intended
anything. Lake Oswego Preservation Society v. City of Lake
Oswego, 360 Or 115, 129, 379 P3d 462 (2016) (“[Nlegative
inferences based on legislative silence are often unhelpful
in statutory interpretation.”); Weldon v. Bd. of Lic. Pro.
Counselors and Therapists, 353 Or 85, 100, 293 P3d 1023

PT 227

(2012) (stating reluctance to infer legislative intent from
silence); State v. Rutley, 343 Or 368, 375, 171 P8d 361 (2007)
(“statutory silence alone is not a sufficiently clear indica-
tion of legislative intent to dispense with a culpable mental
state”). Inferring legislative intent on the basis of a lack of
comment in the legislative history is problematic for several
reasons.

At the outset, it relies on unrealistic assumptions
about the legislative process and the omniscience of legis-
lators. That is, it assumes that legislators are in a position
to predict all the potential consequences of legislation and
that they will always address them. Such an assumption
ignores the fact that legislators often cannot be aware of
every potential consequence of enacting the bills before
them, as well as the fact that the press of time in legislative
sessions of limited duration often does not provide legisla-
tors the opportunity to comment on all of a bill’s potential
consequences. Moreover, drawing conclusions from silence
in legislative history misapprehends the nature of legisla-
tive history itself, which often is designed not to explain
to future courts the intended meaning of a statute, but
rather to persuade legislative colleagues to vote in a partic-
ular way. Thus, for example, a proposed legislative change
to the status quo might not prompt comment precisely
because everyone understands that the law will have that
effect or because supporters do not wish to draw attention
to it. See generally Anita S. Krishnakumar, The Sherlock
Holmes Canon, 84 Geo Wash L Rev 1, 21-35 (2016) (detail-
ing problems with drawing inference from silence in legis-
lative history);* John C. Grabow, Congressional Silence and
the Search for Legislative Intent: A Venture Into “Speculative
Unrealities,” 64 BUL Rev 787, 765 (1984) (“necessarily fre-
quent silences of Congress provide a wholly unreliable and
unprincipled basis for inferring legislative intent”).

As for the legislative history that does exist, we
find little support for the conclusions that AMR draws from
it. What is now ORS 124.100 was introduced in 1995 as

* The name of the article is taken from the Sherlock Holmes story Silver
Blaze, in which a watchdog failed to bark while a racehorse was stolen, leading
Holmes to infer that the dog knew the thief, its trainer. Sir Arthur Conan Doyle,
Silver Blaze, in The Complete Sherlock Holmes 349 (1930).

225

Senate Bill (SB) 943. It was drafted by an elder-law practi-
tioner, Bertalan, with input from an elder-abuse task force.
Bertalan testified before the Senate Judiciary Committee
following the introduction of the bill and its referral to that
committee. Tape Recording, Senate Committee on Judiciary,
SB 948, Mar 23, 1995, Tape 69, Side A (statement of Lisa
Bertalan). She explained that the focus of the bill was not
the nursing home industry because that industry already is
heavily regulated; rather, her focus in drafting the bill was
less-regulated entities and individual abusers of the elderly
and the vulnerable. Tape Recording, Senate Committee on.
Judiciary, SB 943, Apr 12, 1995, Tape 102, Side B (state-
ment of Bertalan). Her written testimony explained:

“The purpose of [the bill] is to protect elders and incapac-
itated adults from physical and financial abuse ***. The
aim of Senate Bill 943 is to prevent and provide a specific
remedy for physical abuse and financial exploitation from
relatives, the new ‘friend’ who suddenly cuts the elderly
person off from family and the rest of the world, phony con-
tractors who sell the elderly person substandard services
or unnecessary goods, and the acquaintance who suddenly
becomes the elderly person’s live-in caregiver in exchange
for the deed to the family home or other property.”

Testimony, Senate Committee on Judiciary, SB 943, Mar 23,
1995, Ex R (statement of Bertalan); see also Testimony,
House Committee on Judiciary, SB 943, May 12, 1995, Ex D
(statement of Bertalan) (to similar effect; purpose of bill is
to provide specific remedy for “physical abuse and financial
exploitation” of elderly and incapacitated persons, against
relatives, acquaintances, businesspeople, and live-in-care-
givers who perpetrate abuses).

Following introduction of the bill, representatives
of the Oregon Health Care Association proposed exclusions
for nursing facilities, residential care facilities, and assisted
living facilities. In response, an amendment was introduced
to do just that. The committee approved the bill with that
amendment. The Senate then passed the bill unanimously,
as did the House of Representatives.

Nothing in the foregoing history suggests that the
part of SB 943 that became ORS 124.100(5) was intended

po 229

to apply only to individual abusers and not to employers
or other institutions. To be sure, it does reflect a concern
that the provisions of the bill not apply to particular insti-
tutions, namely, nursing facilities, residential care facilities,
and assisted living facilities. And, consistently with that
concern, the final version of the legislation contained an
exemption for those institutions. See ORS 124.115 (setting
out persons not subject to action under ORS 124.100). But
no other institutions or entities—businesses such as AMR,
for example—were included in that limited list. The express
exclusion of such a list of certain entities strongly suggests
that the legislature intended not to exclude any others not
listed. See Crimson Trace Corp. v. Davis Wright Tremaine
LLP, 355 Or 476, 497, 232 P3d 980 (2014) (when a stat-
ute lists specific exemptions, “the legislature fairly may be
understood to have intended to imply that no others are to
be recognized”).

Ifthe reference to “circumstances in which a reason-
able person should have known of the physical or financial
abuse” in ORS 124.100(5) does not bear the narrow inter-
pretation for which AMR contends, there remains the ques-
tion of what it does mean. As we noted earlier, that wording
is reasonably capable of referring not just to circumstances
in which a reasonable person should have known of a partic-
ular instance of abuse against a particular plaintiff; rather,
it could also refer to circumstances in which a reasonable
person should have known of the same or similar abuse of
a vulnerable person. Said another way, the statute could be
read to apply when, in light of information known or avail-
able to a reasonable person, that person should have known
of the kind of abuse that in fact occurred. That interpre-
tation is the better of the reasonable possibilities. It gives
effect to all the statute’s terms, in particular, to both of its
different mental state requirements. It results in no redun-
dancy or conflict between statutory terms. It inserts noth-
ing into the statute that the legislature did not include. At
the same time, it omits nothing from the statute that the
legislature enacted. And it ensures that the statute applies
beyond the very narrow circumstances in which a defendant
either participated in or was present during abuse, or had
reason to know in advance of a plan to abuse a particular

20

vulnerable person, consistently with the apparent purpose
of the statute as reflected in its wording and its enactment
history.

To summarize: ORS 124.100(5) refers to two dif-
ferent mental states, one referring to actual knowledge and
the other to constructive knowledge. The former refers to
a defendant’s act or failure to act. The latter refers to the
circumstances in which that act or failure to act occurs.
The statute thus provides that there must be evidence
that a defendant knowingly acted or failed to act under
circumstances in which a reasonable person should have
known that the same sort of abuse of a vulnerable person
that occurred would, in fact, occur.® So, for example, ORS
124.100(5) applies if an employer such as AMR knowingly
(as opposed to, say, inadvertently) schedules an employee to
work on an ambulance run under circumstances in which a
reasonable person should have known that the sort of abuse
inflicted on the plaintiff would occur.

B. Application

With the foregoing interpretation in mind, we turn
to the question whether the trial court erred in granting
AMR’s summary judgment motion as to all six plaintiffs.
Summary judgment is appropriate if, viewing the evidence
in the light most favorable to the nonmoving party, no gen-
uine issue of material fact exists “and the moving party is
entitled to judgment as a matter of law.” See Chapman v.
Mayfield, 358 Or 196, 204, 361 P3d 566 (2015) (so stating
and citing ORCP 47 C).

As explained in our earlier factual summary, the
incidents at issue in this case involved instances of abuse
inflicted on six different vulnerable persons—plaintiffs—by
AMR’s employee, Haszard. AMR does not dispute that each
of the six plaintiffs qualified as a “vulnerable person” within
the meaning of ORS 124.100(1)(e).

5 As we note later in this opinion, the evidence in the record is sufficient
to permit a reasonable juror to find that a reasonable person in AMR’s position
should have known that the sort of abuse that did occur would, in fact, occur. We
need not address whether the statute also contemplates liability under circum-
stances in which a reasonable person should have known that such abuse as did
occur was merely foreseeable.

Po 231

None of the six plaintiffs reported her interaction
with Haszard to AMR, to other medical staff, or to the
police. It thus is undisputed that, until discovery during the
Herring litigation several years later, AMR had no actual
knowledge of Haszard’s physical abuse of any of the six
plaintiffs in this case. The question, however, is not whether
AMR actually knew about that abuse. Instead, the question
is whether plaintiffs established genuine issues of material
fact as to whether AMR knowingly scheduled Haszard to
work as a paramedic under circumstances in which a rea-
sonable person should have known that the sort of abuse
that the plaintiffs suffered would occur. AMR does not sug-
gest that it had not knowingly assigned Haszard to work
as a paramedic during each of the six alleged incidents of
abuse. That leaves, then, the question whether a genuine
issue of material fact exists about whether AMR did so under
circumstances in which a reasonable person should have
known that the same type of abuse that occurred would in
fact occur.

1. Plaintiff Akre

The earliest incident involving a plaintiffin this case
concerned plaintiff Akre. Viewed in the light most favorable
to plaintiffs, evidence in the record shows that, by the time
of plaintiff Akre’s abuse, AMR knew that other similarly sit-
uated vulnerable persons had reported that Haszard had
abused them. Specifically, in February 2006, Spain had
called AMR and reported to its receptionist that one of the
company’s paramedics was a “freak” who had inappropri-
ately touched her, that it was unsafe for that paramedic to
transport little girls, and that he should be taken off ambu-
lance duty. Additionally, there is evidence that complaints,
such as those alleging sexual misconduct, were entered
into a database and forwarded to AMR’s county operations
manager.

There is also evidence that, one month after the
Spain incident, Whalen reported in an AMR customer sur-
vey that Haszard had failed to respect her privacy at the hos-
pital by not looking away while a nursing assistant helped
Whalen into a gown, despite her obvious discomfort. AMR
followed up with an interview of Whalen, during which she

22

complained that Haszard had stared at her and acted sexu-
ally aroused. Whalen later recounted that the AMR inves-
tigator had “dismissed everything that [she had] said,” tell-
ing her that she “must have been imagining things.” The
investigator, however, did write an internal report describ-
ing Whalen’s complaint and concluding that it had been
“substantiated.” Plaintiff Akre’s abuse occurred about three
weeks after that.

There is thus evidence that, at the time of plaintiff
Akre’s abuse, AMR had already received at least two com-
plaints of sexually inappropriate conduct on the part of its
paramedic, Haszard. Indeed, one of those reports had been
investigated and confirmed as having been “substantiated.”
Under those circumstances, there is at least a genuine issue
of fact about whether AMR should have known of the sort
of abuse that plaintiff Akre suffered. To be sure, AMR dis-
putes the Spain report, noting that it has no record of such
a complaint call having been placed or, if it had been placed,
that the receptionist ever reported the call to anyone else.
But AMR’s dispute establishes no more than that there is
a genuine issue of material fact about what transpired. At
this stage, we are constrained to view the evidence in the
light most favorable to plaintiff. In that light, there is at
least a genuine issue of material fact about whether AMR
should have known when it assigned Haszard to ambulance
duty that the same sort of abuse inflicted on plaintiff Akre
would occur. See Towe v. Sacagawea, Inc., 357 Or 74, 109-
10, 346 P3d 1207 (2015) (evidence mixed as to factual issue
in dispute, reasonable juror could find facts either way, and.
so case presented factual issues for jury to resolve; trial
court therefore erred in granting summary judgment). The
trial court therefore erred in granting summary judgment
against plaintiff Akre.

2. Plaintiffs Shaftel, Asbury, and Terpening

By the time of the alleged abuse against plaintiffs
Shaftel, Asbury, and Terpening, there is evidence that AMR
had received even further reports of Haszard’s abusive con-
duct toward vulnerable persons. In December 2006, Rotting
was transported by ambulance with Haszard attend-
ing. During that transport, Haszard touched Rotting in a

po 233

manner similar to the sexual touching that plaintiff Akre
had alleged; he also slowly stroked Rotting’s thigh. Rotting
reported the incident to a nurse and to family members, and
her son called AMR. Her son spoke with the same super-
visor who had investigated the Whalen complaint, and the
supervisor stated that there would be an investigation. The
investigation, however, was limited to interviewing Haszard,
who denied having engaged in any inappropriate conduct.
Rotting’s son called AMR again and stated that the police
should be involved. AMR took no further action, although
its risk management department was notified that Rotting
might file a complaint.

A month later, Haszard sexually abused plaintiff
Shaftel. And three weeks after that, he sexually abused
plaintiff Asbury. Three weeks later, he also sexually abused
plaintiff Terpening. Thus, by the time of Haszard’s abuse
of those three plaintiffs, there is evidence that AMR had
received three reports of its employee’s abuse of vulnerable
persons under circumstances similar to those later incidents
of abuse that actually occurred. Again, AMR disputes some
of the foregoing evidence, but that is not the point at this
stage in the proceedings. On the record before us, viewed in
the light most favorable to plaintiffs Shaftel, Asbury, and
Terpening, there is at least a genuine issue of material fact
about whether AMR should have known that the sort of
abuse that plaintiffs Shaftel, Asbury, and Terpening suf-
fered would occur. The trial court therefore erred in grant-
ing summary judgment against those three plaintiffs.

8. Plaintiffs Webb and Corning

Haszard’s abuse of plaintiffs Webb and Corning
occurred not long after the abuse of plaintiffs Shaftel,
Asbury, and Terpening. By that time, AMR had received.
yet another report of abuse. In March 2007, Pries reported
to police that Haszard had sexually abused her during an
AMR ambulance transport by taking her hand, placing it
inside her pants, and manipulating it. Police spoke with an
AMR supervisor, and several AMR employees, including
Haszard, then met with a company risk-management offi-
cial. AMR ultimately determined that it could not substan-
tiate Pries’s allegations, but it warned Haszard in writing

234

that either that incident or Rotting’s would be reopened if
more information came to light. AMR did not make any
effort to contact Pries, did not request further information
from police, and did not tell police about the Rotting com-
plaint. A month later, Haszard abused plaintiff Webb during
an ambulance transport. Four months after that, he abused
plaintiff Corning.

Thus, by the time of Haszard’s abuse of plaintiffs
Webb and Corning, AMR had received four reports of abuse
of vulnerable persons by its employee Haszard, including
one report involving the police. Indeed, there is evidence
that AMR warned Haszard not to engage in such conduct in
the future. That evidence is sufficient to establish a genuine
issue of material fact about whether a reasonable person in
AMR’s position should have known that the sort of abuse
that plaintiffs Webb and Corning suffered would occur. As a
result, the trial court erred in granting summary judgment
for AMR against plaintiffs Webb and Corning.

The decision of the Court of Appeals is affirmed.
The judgment of the circuit court is reversed, and the case
is remanded to the circuit court for further proceedings.

238

Argued and submitted March 7, decision of Court of Appeals affirmed in part
and reversed in part, judgment of circuit court affirmed in part and reversed in |
part, and case remanded to circuit court for further proceedings |
September 15, 2016

STATE OF OREGON,
Respondent on Review,
v.

ROBERT CLATE MAKIN,
Petitioner on Review.

(CC C100549CR; CA A153309; SC S063440)
381 P3d 799

Rankin Johnson IV, Portland, argued the cause and filed
the briefs for petitioner on review.

Jeff J. Payne, Assistant Attorney General, Salem, argued
the cause and filed the brief for respondent on review. With

Po 239

him on the brief were Ellen F. Rosenblum, Attorney General,
and Paul L. Smith, Deputy Solicitor General.

Before Balmer, Chief Justice, and Kistler, Walters,
Landau, Baldwin, and Brewer, Justices, and Armstrong,
Justice pro tempore.**

KISTLER, J.

The decision of the Court of Appeals is affirmed in part
and reversed in part. The judgment of the circuit court
is affirmed in part and reversed in part, and the case is
remanded to the circuit court for further proceedings.

** Nakamoto, J., did not participate in the consideration or decision of this
case.

240 Lt

KISTLER, J.

The question in this case is whether a reasonable
trier of fact could find defendant guilty of first-degree child
neglect for knowingly allowing his children to stay “[i]n a
vehicle where controlled substances are being criminally
delivered ***” See ORS 163.547(1)(a)(A) (defining that
offense). The evidence at trial showed that defendant’s three
children were in his car when a police officer stopped him
for a traffic violation. Also in the car were methamphet-
amine and implements for selling it. There was no evidence,
however, that defendant had sold or was delivering meth-
amphetamine to an identified buyer while his children were
with him in the car. Rather, all that the evidence showed
was that, while his children were in the car, defendant pos-
sessed methamphetamine with the intent to sell it at some
undefined point in the future.

The trial court found defendant guilty of first-
degree child neglect, as well as other offenses. On appeal,
the Court of Appeals affirmed defendant’s first-degree child
neglect convictions without discussion. See State v. Makin,
271 Or App 374, 348 P3d 1197 (2015) (per curiam) (address-
ing other convictions). Having allowed defendant’s petition
for review, we now reverse his convictions for first-degree
child neglect. We accordingly affirm in part and reverse
in part the Court of Appeals decision and the trial court’s
judgment.

Because this case arises on defendant’s motion
for judgment of acquittal, we state the facts in the light
most favorable to the state. For several weeks, defendant
had been selling methamphetamine out of his car. He did
so because he did not want his fiancée to discover what he

1 The trial court found defendant guilty of one count of delivering metham-
phetamine, one count of manufacturing methamphetamine, one count of possess-
ing methamphetamine, and three counts of first-degree child neglect. The Court
of Appeals affirmed defendant's convictions for possession, delivery, and child
neglect but reversed and remanded his conviction for manufacturing to allow
defendant to contest venue. Makin, 271 Or App at 375. Neither party challenges
the latter ruling on review. As a result of our opinion and the Court of Appeals
decision, defendant's convictions for delivery and possession are affirmed, his
convictions for child neglect are reversed, and his conviction for manufacturing is
reversed and remanded.

es

was doing. One day, a police officer stopped defendant for
a traffic violation. Defendant’s three children were in the
car with him.’ In response to routine questioning, defendant
admitted that his driver’s license had been suspended for
driving under the influence of intoxicants. He also admitted
that he had drugs on him. A search revealed that defendant
had approximately 27.5 grams of methamphetamine on his
person. In his car, he had scales, baggies, and drug records,
as well as syringes and cotton balls for his customers’ use.
Defendant told the officers that a week earlier he had pur-
chased approximately three-quarters of an ounce of meth-
amphetamine for resale.

At the close of the evidence, defendant moved for
a judgment of acquittal on the first-degree child neglect
charges. Defendant did not dispute that the trial court rea-
sonably could find that he possessed methamphetamine
with the intent to sell it and that his three children were
with him in the car while he possessed the methamphet-
amine. He argued, however, that there was no evidence that
he had actually delivered or was in the process of delivering
any methamphetamine while his children were in the car.
Defendant’s motion accordingly reduced to a question of stat-
utory interpretation: Does the phrase “a vehicle where con-
trolled substances are being criminally delivered” include
a vehicle in which a person possesses methamphetamine
with the intent to deliver it at some undefined point in the
future? The trial court ruled that it did, and the Court of
Appeals upheld that ruling without discussion. We allowed
defendant’s petition for review to consider that question.

In analyzing that question, we employ our familiar
methodology. We look to the text, context, and legislative
history of ORS 163.547(1)(a)(A) to determine the legisla-
ture’s intent. See State v. Gaines, 346 Or 160, 170-71, 206
P3d 1042 (2009). As we understand the parties’ arguments,
defendant’s argument rests primarily on what he views as
the plain text of ORS 163.547(1)(a)(A) while the state relies
primarily on what it views as the statute’s context. As we
explain below, the dispositive answer to the parties’ dispute
lies in the statute’s legislative history.

2 All three children were under 16 years of age.

242 Le

I. TEXT
ORS 163.547(1)(a) provides, in part:

“A person having custody or control of a child under 16
years of age commits the crime of child neglect in the first
degree if the person knowingly leaves the child, or allows
the child to stay:

“(A) Ina vehicle where controlled substances are being
criminally delivered or manufactured[.]”

Defendant argues that the ordinary meaning of the verb
“deliver” supports his position that he was not delivering
controlled substances while his children were in the car. As
defendant notes, in this context, “deliver” ordinarily means
“GIVE, TRANSFER : yield possession or control of : make
or hand over[.]” Webster’s Third New Intl Dictionary 597
(unabridged ed 2002). As used in ORS 163.547(1)(a)(A), the
ordinary meaning of deliver implies a transfer of controlled
substances, which did not occur in this case while defen-
dant’s children were in the car.

Defendant also notes that the legislature used the
present progressive form of the verb “deliver.” See The Oxford
Companion to the English Language 809 (McArthur ed
1992) (discussing present progressive verb form). Generally,
the progressive aspect of a verb “indicates a happening in
progress at a given time.” Quirk et al, A Comprehensive
Grammar of the English Language 197 (1985). When used
with an event, “the progressive conveys the idea that an
event has duration, and has not yet come to an end.” Jd. at
199. Defendant infers from the use of the present progres-
sive form of deliver that the legislature intended to prohibit
controlled substances from being delivered while children
were in a vehicle. Defendant notes that he was not in the
process of delivering methamphetamine while his children
were in his car. In his view, the only inference that the
evidence permits is that he possessed methamphetamine

* The legislature also used the passive voice. In this context, the use of the
passive voice implies that the legislature was not concerned with who was deliv-
ering controlled substances but whether children were present when controlled
substances were being delivered.

Pe 248

with the intent to deliver it at some unspecified point in the
future.t

Il. CONTEXT

The state does not dispute that the text of the
statute, viewed in isolation, supports defendant’s posi-
tion. Its argument focuses instead on the statute’s context.
Specifically, the state reasons that ORS 163.547(1)(a)(A)
refers to and incorporates the definition of “deliver” in the
Controlled Substances Act, ORS 475.005 to 475.285 and
ORS 475.752 to 475.980. The Controlled Substances Act
defines “deliver” as the “actual, constructive or attempted
transfer *** from one person to another of a controlled sub-
stance.” ORS 475.005(8). It follows, the state contends, that
it need not prove an actual delivery. An attempted delivery
will suffice.

The state also contends that the context for the
child-neglect statute includes the Court of Appeals decision
in State v. Boyd, 92 Or App 51, 756 P2d 1276, rev den, 307 Or
77 (1988). In that case, the Court of Appeals held that, under
the Controlled Substances Act, “the possession of a large
amount of [a controlled substance], not for personal use but
for sale” was evidence from which the trier of fact reasonably
could find an attempted delivery and thus a “delivery” for the
purposes of the Controlled Substances Act. See Boyd, 92 Or
App at 53-54. It follows, the state reasons, that defendant’s

4 This case does not require us to decide whether first-degree child neglect
only prohibits allowing underage children to stay in a vehicle where an actual
transfer of controlled substances is occurring or whether the prohibition extends
to allowing children to stay vehicles in which controlled substances are in the
process of being delivered—i.e., are being driven—to an identified buyer. In this
case, there is no evidence that such a delivery was in progress. See Quirk et al, A
Comprehensive Grammar of the English Language 199 (when used with an event,
“the progressive conveys the idea that an event has duration, and has not yet
come to an end”). Rather, defendant merely possessed methamphetamine with
the intent to deliver it at some undefined point in the future.

5 Boyd explained that attempted delivery requires intentionally engaging
in conduct that constitutes a substantial step toward the delivery of controlled
substances. See 92 Or App at 53-54, The dispute in Boyd was not whether a rea-
sonable trier of fact could infer an intent to deliver in Boyd: the defendant in Boyd
admitted that she possessed bindles of heroin with the intent to sell them. Id. at
53. Rather, the dispute was whether a reasonable trier of fact could find that the
possession of a substantial amount of heroin “not for personal use but for sale”
constituted a substantial step. Id. at 54, Relying on legislative commentary, the
Court of Appeals held that a reasonable trier of fact could draw that inference. Id.

244 Lt

possession of a large amount of methamphetamine for sale
constituted an ongoing attempted delivery, which permitted
the trial court to find that controlled substances “were being
delivered” while his children were in the car.

Defendant, for his part, does not question Boyd’s
interpretation of “delivery” for the purposes of the Controlled
Substances Act. Rather, he argues that the Controlled
Substances Act and Boyd do not constitute context for
the purposes of the child-neglect statute. The parties’ dis-
agreement over the sources of law that serve as context for
a statute presents an interesting question in the abstract.
We need not resolve that question, however, to decide this
case. In this case, the legislative history of the child-neglect
statute reveals that, in enacting that statute, the legisla-
ture specifically discussed both the Controlled Substances
Act and Boyd in determining the effect, if any, that those
two sources of law would have on the meaning of the child-
neglect statute. That legislative history shows that the leg-
islature was aware of those issues and, in our view, provides
a surer guide to determining the legislature’s intent than
an abstract discussion of which context matters. We accord-
ingly turn to the legislative history.

Ill. LEGISLATIVE HISTORY

In describing the legislative history, we discuss the
ways in which the bill that became the child-neglect stat-
ute changed as it progressed through the two chambers of
the legislature and the differing issues on which the House
and the Senate judiciary committees focused when each
chamber considered the bill. Essentially, we draw the fol-
lowing conclusions from that history. First, the comments
of one of the bill’s sponsors and the members of the House
Judiciary Committee make clear that the word “delivered”
in what became ORS 163.547(1)(a)(A) did not include “pos-
session with intent to deliver.”® More to the point, the text
of the bill that emerged from the House made that point
expressly. Second, the discussion of the changes that the
Senate Judiciary Committee made to the bill point in more

* As noted, under Boyd, possession with intent to deliver is sufficient evi-
dence from which a trier of fact can find an attempted delivery and, under the
Controlled Substances Act, a delivery.

Po 245

than one direction. The discussion that is most helpful to the
state occurred between the counsel for the committee and a
witness. However, given the other discussions that occurred
among the members of the committee and the legislative
history from the House, we do not find a sufficiently clear
intent in the Senate to depart from the House’s understand-
ing of the bill. Finally, the House’s decision to concur in the
Senate amendments does not provide a basis for reaching a
different conclusion.

A. House Judiciary Committee

In 1990, Representatives Courtney and Mannix
introduced House Bill (HB) 2545, which created a new crime
of child neglect. Bill File, HB 2545, Nov 29, 1990. Section 1
of the bill created the crime of first-degree child neglect. As
initially introduced, section 1 made it a crime for a person
having custody or control of a child under 16 years of age to
“knowingly leav[e] the child, or allo[w] the child to stay in a
structure or vehicle and in the immediate proximity where
controlled substances are criminally delivered or man-
ufactured.” Id. § 1. Section 3 of the bill created the crime
of second-degree child neglect. It differed from section 1 in
that it applied to consumption and possession rather than
delivery and manufacture. See id. § 3. Specifically, section 3
made it a crime to knowingly leave or allow a child under
16 years of age to stay “in a structure or vehicle and in the
immediate proximity where controlled substances are crim-
inally possessed or consumed.” Id.

On February 19, 1991, the House Subcommittee
on Crime and Corrections held a public hearing and work
session on the bill. Much of the discussion focused on
whether section 1 of the bill was broader than necessary
to serve its purpose.’ The proponents of the bill explained
that the purpose of section 1 was to impose greater pen-
alties on people who expose their children to the dangers
associated with distributing and manufacturing controlled
substances. In describing those dangers, the proponents
emphasized the risk of exposing children to the chemicals

1 No one discussed section 3 of the bill, which created the crime of second-
degree child neglect.

246 Le

used in manufacturing methamphetamine and to the dan-
gers of violence arising from the distribution of controlled
substances.

Members of the subcommittee pressed the bill’s pro-
ponents on essentially three points. First, they asked whether
the dangers of growing—i.e., manufacturing—marijuana
were the same as the dangers of manufacturing metham-
phetamine. Tape Recording, House Committee on Judiciary,
Subcommittee on Crime and Corrections, HB 2545, Feb 19,
1991, Tape 27, Side A (remarks of Representative Mason).
Second, they questioned whether the effect of the bill
would be to separate children from parents whose criminal
acts were essentially a consequence of their addiction. Id.
(remarks of Representatives Mason and Bauman). Finally,
they considered whether section 1 of the bill would apply
only to actual deliveries of controlled substances or would
also apply to attempted deliveries, as defined in Boyd. Tape
Recording, House Committee on Judiciary, Subcommittee
on Crime and Corrections, HB 2545, Feb 19, 1991, Tape 28,
Side A (remarks of Representatives Mason and Mannix).

The last point arose when the chair of the subcom-
mittee asked what the phrase “criminally delivered,” as used
in section 1 of the bill, meant. Jd. (remarks of Representative
Miller). Jim McIntyre, on behalf of the Oregon Sheriff's
Association, explained that the bill would apply to the
delivery and manufacture of controlled substances, as set
out in ORS 495.005. Id. The chair also asked how section 1
of the bill differed from a section of the existing child-
endangerment statute, which made it a misdemeanor to
“[plermi[t] a person under 18 years of age to enter or remain.
in a place where unlawful activity involving controlled sub-
stances is maintained or conducted.” See id. (remarks of
Representative Miller) (referring to ORS 163.575(1)(b)).

After a brief colloquy, Representative Mannix
explained that section 1 of the child-neglect bill applied to
younger children (children under 16 years of age) and car-
ried a greater penalty than the child-endangerment stat-
ute. Id. He also noted that the child-endangerment statute
prohibits permitting a child to enter or remain in a place
where controlled substances are possessed. Id. He explained

Po 247

that, by contrast, first-degree child neglect would apply only
to allowing children to remain where controlled substances
are manufactured or delivered. Id. He reasoned that man-
ufacturing and delivery pose greater risks to children than
possession. Id.

In response, one of the witnesses testifying in sup-
port of the bill stated that the phrase “criminally delivered”
was intended to incorporate the definition of “delivery”
from the Controlled Substances Act. Jd. (testimony of Jim
McIntyre). In his view, the phrase included, as the statutory
definition in the Controlled Substances Act does, attempted
deliveries as defined in Boyd; that is, “criminally delivered”
in the child-neglect act included possession with intent to
deliver. Id. At that point, Representative Mason expressed
his concern that Boyd had interpreted attempted delivery in
the Controlled Substances Act too broadly. Id. Representative
Mannix explained that “Boyd involves attempt to deliver
and trying to determine whether or not there’s an intent to
deliver by looking at the quantity [of drugs possessed].” Id.
He then added, “We are not talking attempted delivery here
[in the child-neglect bill], we’re talking about actual deliv-
ery.” Id. Representative Mannix also explained, in response
to the witness's reliance on the definition of delivery in the
Controlled Substances Act and the interpretation of that
term in Boyd, that the legislature had the power to define
“delivery” for the purposes of the child-neglect statute differ-
ently from the Court of Appeals’ interpretation of that term
in the Controlled Substances Act. Id.*

After considering the testimony at the public hear-
ing, the subcommittee went into a work session, in which it
agreed to reduce the crime seriousness level of first-degree
child neglect to mitigate the prospect that children would
be separated from their parents as a result of the parents’
addiction, and it agreed to delete the phrase “in the imme-
diate proximity.” Id. A member of the subcommittee moved
to send the bill, as amended, to the full committee with a

5 As Representative Mannix put it, “Boyd is as ethereal as the next panel
sitting in the Court of Appeals, whereas this is hard law.” Tape Recording, House
Committee on Judiciary, Subcommittee on Crime and Corrections, HB 2545,
Feb 19, 1991, Tape 28, Side A.

248 Lt

“do pass” recommendation. That motion failed. The subcom-
mittee then voted to reconsider the bill, and various sub-
committee members suggested ways in which future work
sessions could narrow the bill, none of which touched on the
issue that this case presents. Jd.

On March 12, the subcommittee held a second work
session on HB 2545, at which it considered amendments
proposed by Representative Mason.° Of relevance here,
those amendments changed the definition of second-degree
child neglect. As initially proposed, the bill had defined
second-degree child neglect as knowingly leaving or allow-
ing a child under 16 years of age to stay “in a structure
or vehicle *** where controlled substances are criminally
possessed or consumed.” Bill File, HB 2545, Nov 29, 1990.
Representative Mason proposed amending the definition of
second-degree child neglect to apply to knowingly leaving or
allowing a child under 16 years of age to stay “in a vehicle
or on premises where controlled substances are consumed
in the presence of the child or are criminally possessed with
the intent to distribute in the presence of the child.” Bill File,
HB 2545, Mar 19, 1990 (proposed amendments) (emphasis
added).

In discussing the proposed amendments, Repre-
sentative Mason stated the changes that the amendments
would make to the wording of the bill. However, he did
not explain why he was proposing those changes or dis-
cuss how those changes would work. See Tape Recording,
House Committee on Judiciary, Subcommittee on Crime
and Corrections, HB 2545, Mar 12, 1991, Tape 51, Side A
(discussing proposed amendments). The subcommittee
then voted to accept the amendments, approved the bill, as
amended, and sent it to the full committee with a “do pass”
recommendation. Jd. The House subsequently voted in favor
of the bill, as amended.

Section 1 of the bill, as approved by the House,
defined the crime of first-degree child neglect as knowingly
leaving or allowing a child under 16 years of age to stay

® Representative Mannix was a sponsor of the bill, but he was not a member
of the subcommittee. Accordingly, he neither voted on the bill in the subcommit-
tee nor moved to amend it.

Po 249

“in a vehicle or on premises where controlled substances are
criminally delivered or manufactured for consideration or
profit.” Bill File, HB 2545, Mar 28, 1991 (A-Engrossed Bill).
Section 3 of the bill defined the crime of second-degree child
neglect as knowingly leaving or allowing a child under 16
years of age to stay “in a vehicle or on premises where con-
trolled substances are consumed in the presence of the child
or are criminally possessed with the intent to distribute in
the presence of the child.” Id.

Although the subcommittee did not explain why it
approved the March 12 amendments that Representative
Mason had proposed, the textual change that the subcom-
mittee made and that the House later approved makes one
proposition clear: “Delivered,” as that term was used in sec-
tion 1 of the bill, did not include “possessed with intent to dis-
tribute.” Rather, if a defendant knowingly left a child under
16 years of age in a vehicle where controlled substances
were possessed with an intent to distribute them, then that
defendant would not be guilty of first-degree child neglect.
Rather, the defendant would be guilty of second-degree child
neglect.

While Representative Mason did not make that
point explicitly in proposing the March 12 amendments to
the bill, the change that he proposed is consistent with both
his and Representative Mannix’s earlier comments during
the February 19 public hearing on the bill. Representative
Mason had expressed his disagreement with the extent to
which Boyd had expanded the concept of attempted deliv-
ery in the Controlled Substances Act, and Representative
Mannix had explained that “delivery” for the purposes of
the child-neglect bill referred only to actual deliveries. By
excepting “possessed with intent to distribute” out of the
term “delivered,” as used in section 1 of the child-neglect bill,
the March 12 amendments effectively removed attempted
deliveries, as defined in Boyd, from the scope of “delivered”
as used in section 1 of HB 2545.

B. Senate Judiciary Committee

When HB 2545 went to the Senate Judiciary
Committee, that committee did not express any concern
about section 1 of the bill. See Tape Recording, Senate

250 Lt

Committee on Judiciary, HB 2545, May 29, 1991, Tape 197,
Side A and Tape 198, Side A. Rather, it focused on the first
part of section 3 of the bill, which provided that a person
commits the crime of second-degree child neglect if the per-
son knowingly leaves or allows a child under 16 years of age
to stay “on premises where controlled substances are con-
sumed in the presence of the child.” See id. at Tape 198,
Side A. Senator Brockman asked whether the bill, if enacted,
would require a parent who brought his or her child to a
public event to leave if someone at the event began smoking
marijuana. Id. As part of that discussion, Senator Cohen
asked whether section 3 of the bill was essential. Id. In
asking that question, Senator Cohen focused on excising
the part of section 3 that prohibited knowingly allowing a
child to stay on premises where controlled substances are
consumed. Id. A witness who supported the bill responded
that, while “life would continue” if that part of section 3
were removed, “possessing with intent to distribute in the
presence of a child *** is an entirely different area.” Id. (tes-
timony of John Bradley).

At that point, the counsel for the committee asked
the witness “if you could prove possession with intent to
deliver don’t you basically have a delivery?” Id. (remarks
of Ingrid Swenson). The witness replied that “currently in
Oregon law you do.” Jd. (testimony of John Bradley). The
witness noted, however, that “Representative Mason has
from time to time talked about doing away with it.” Id. The
counsel responded, “So, that behavior is actually covered
in subsection (1) is what I’m saying.” Jd. (remarks of Ingrid
Swenson). The witness replied that it was, and the issue
received no further discussion.

Approximately two weeks later, the Senate Judi-
ciary Committee held a work session on the bill. At that
session, the committee considered amendments that limited
the reach of the bill. Of relevance here, the committee con-
sidered an amendment that deleted section 8 of the bill in its
entirety. Bill File, HB 2545, June 18, 1991 (proposed amend-
ments to A-Engrossed HB 2545). Under that amendment,
HB 2545 would no longer prohibit what had been second-
degree child neglect—knowingly leaving or allowing a child
under 16 years of age to stay in a vehicle or on premises

Po 251

“where controlled substances are consumed in the presence
of the child or are criminally possessed with the intent to
distribute in the presence of the child.””° In explaining that
proposed amendment, the counsel for the committee stated:

“[S]ection (3) would have basically required a person who
was in the presence of even the criminal possession of a
controlled substance to leave or remove the child. Under
those circumstances, it would have been a C felony. That
provision has been deleted.”

Tape Recording, Senate Committee on Judiciary, HB 2545,
June 11, 1991, Tape 226, Side A (remarks of Ingrid Swenson).
No further discussion of the proposed amendment occurred,
and the committee voted at the end of the work session to
approve it.

The committee made a separate but related change
to section 1 of the bill. During the work session, Senator
Shoemaker observed that, as he understood the purpose
of section 1 of the bill, it was to prohibit “criminal delivery
or manufacture [that] occur[red] while the child is on the
premises and in the proximity” of that activity. Id. (emarks
of Senator Shoemaker). He noted that, as currently writ-
ten, section 1 prohibited leaving or allowing a child to be in
a vehicle or on premises where controlled substances “are
criminally delivered or manufactured.” Jd. He reasoned
that, by using the verb “are delivered or manufactured,”
“[ylou could have a place where that does happen but isn’t
happening then. It’s still a place where substances are deliv-
ered or manufactured. I don’t think that was intended.” Id.
He added that using “‘are being, I think, would do it.” Id.
That is, he suggested that using the present progressive form
of the verb would better capture the legislature’s intent. Id.

In response to Senator Shoemaker’s observation,
two witnesses explained that, for premises, the risks to chil-
dren were substantial even if controlled substances were
not in the process of being delivered or manufactured. They
noted that the presence of precursor chemicals used to man-
ufacture methamphetamine posed grave risks to children.

2 ‘The amendments also narrowed section 1 of the bill, which defined first-
degree child neglect. They provided that “‘vehicle’ and ‘premises’ do not include
public places.”

252 Ld

even if methamphetamine was not currently being manufac-
tured. See id. (testimony of Russ Spencer). They also noted
the possibility of “booby traps and shoot outs” on premises
on which controlled substances are sold, even though con-
trolled substances were not in the process of being sold. Id.
Those witnesses explained that the knowledge within a
community that drugs are present in a house “makes the
house a target,” with the prospect of “violent drug rip-offs
[and] drive-by shootings.” Id.

Senator Shoemaker recognized that those concerns
applied to premises where controlled substances “are manu-
factured or delivered.” Id. He questioned, however, whether
those concerns also applied to automobiles. He asked:

“Assume an automobile is used for delivery without the
child. The child is not there. The next day, the mother
drives the car with the child in it. Is that neglect?”

Id. The witness explained that that was not his intent, and
counsel for the committee suggested distinguishing vehicles
from premises. Adopting Senator Shoemaker’s proposal to
use the progressive form of the verb, the committee coun-
sel suggested referring to “a vehicle where controlled sub-
stances are being criminally delivered or manufactured.”
Id. (remarks of Ingrid Swenson). The Chair concurred and
suggested that the bill be amended “to accommodate the dif
ferences between a vehicle and a premise.” Id. (remarks of
Senator Cohen). The committee agreed conceptually to that
amendment. The committee also agreed to send the bill,
as amended, to the Senate with a “do pass” recommenda-
tion, which voted for it. The House concurred in the Senate
amendments, and the Governor signed the bill."

4 Because the version of HB 2545 that came out of the Senate differed from
the version of the bill that came out of the House, the bill, as amended by the
Senate, went back to the House. Initially, the House voted not to concur in the bill
and appointed representatives to be part of a conference committee. Four days
later, the House voted to reconsider its earlier decision and then voted to concur
in the Senate version of the bill. Senate and House Journal, Regular Session,
1991, H-102. Although there are tape recordings of the discussion on the House
floor, the tapes are almost completely inaudible. It appears from the tapes and the
House logs that Representative Mannix spoke in favor of reconsidering the bill
and concurring in the Senate version of the bill. However, what any speaker said
cannot be determined. Perhaps because of that difficulty, neither party has relied
on any statement made on the House floor after the amended bill came back from
the Senate.

Po 253

With that history in mind, we turn to the parties’
arguments. The state notes that the witness who testified
before the House subcommittee in support of HB 2545 took
the position that “delivered,” as that term was used in sec-
tion 1 of the bill, included attempted deliveries as defined in
Boyd; that is, the witness reasoned that possession of con-
trolled substances with the intent to deliver them constituted
an attempted delivery and thus a “delivery” for the purposes
of section 1 of HB 2545. The difficulty with the state’s reli-
ance on that witness’s testimony is that the House subcom-
mittee did not accept it. As noted, Representative Mason,
who was a member of the subcommittee, expressed his view
that Boyd’s interpretation of “delivery” in the Controlled
Substances Act was too broad. Moreover, Representative
Mannix, who was one of the bill’s sponsors, explained that
“delivery,” as that term was used in section 1 of the child-
neglect statute, referred to actual delivery, not attempted
delivery.

Of greater significance, after that hearing, the
House subcommittee amended the bill to make “possession
with intent to distribute” a ground for second-degree child
neglect. While knowingly leaving a child in a vehicle where
controlled substances “are criminally delivered” would con-
stitute first-degree child neglect, knowingly leaving a child
in a vehicle where controlled substances “are criminally
possessed with the intent to distribute” would constitute
second-degree child neglect. That textual change necessar-
ily implies that, as the bill came out of the House, “delivered”
did not include “possessed with the intent to distribute.” Put
differently, first-degree child neglect, as the bill emerged.
from the House, excluded “Boyd deliveries” from the concept
of delivery.

The legislative history in the Senate does not provide
a basis for departing from that understanding. As noted, the
Senate voted to delete section 3 of the bill, which had defined
second-degree child neglect as knowingly leaving or allowing
a child to stay in a vehicle or on premises where controlled
substances were consumed in the presence of the child or pos-
sessed with intent to distribute in the presence of the child.
Two different inferences can be drawn from that decision.
First, the Senate could have intended that the child-neglect

254 Ld

statute would not apply to either of the acts identified in
section 3 and instead could have chosen to leave those acts
subject only to the existing child-endangerment law. Second,
the Senate could have intended to eliminate the first part
of section 8 (prohibiting leaving a child in a place or vehicle
where controlled substances are consumed), but it could have
intended that the second part of section 3 (addressing pos-
session of controlled substances with the intent to distribute)
would be subsumed in the term “delivered” in section 1 of the
bill, which defined first-degree child neglect.

As discussed above, the colloquy between the com-
mittee counsel and one of the witnesses on May 29 supports
the latter inference. However, no member of the commit-
tee ever endorsed (or even commented on) the interpreta-
tion that the committee counsel suggested. Moreover, when
the committee actually considered an amendment to delete
section 3 in its entirety, the only explanation for doing so
focused on something else. Counsel explained that section
3 “would have basically required a person who was in the
presence of even the criminal possession of a controlled sub-
stance to leave or remove the child.” Tape Recording, Senate
Committee on Judiciary, HB 2545, June 11, 1991, Tape 226,
Side A. Specifically, after hearing an explanation that sec-
tion 8 would apply to possession, the committee voted to
delete that section. Ordinarily, the effect of deleting section
8 of the bill in its entirety would be that the bill would not
prohibit either of the acts (consumption or possession with
intent to distribute) that section 3 previously had covered.

The Senate Judiciary Committee made one last
change that bears on this issue. As noted, Senator Shoemaker
proposed changing the verb form from “are delivered” to “are
being delivered.” After considering the witnesses’ concerns
regarding the risks to children present on premises where
controlled substances are manufactured or delivered, the
committee distinguished between vehicles and premises. It
made it a crime to knowingly leave or allow a child under
16 years of age to stay in a vehicle where controlled sub-
stances “are being criminally delivered or manufactured”
while making it crime to leave the child on premises where
controlled substances “are criminally delivered or manufac-
tured.” Bill File, HB 2545, June 20, 1991 (B-Engrossed Bill).

Po 255

For the most part, the use of the progressive form
of the verb answers the question of when the child must
be present in a vehicle—when a delivery is occurring. It
does not address what acts constitute a delivery within the
meaning of the child-neglect statute. However, in discuss-
ing the problem regarding vehicles that the bill sought to
address, one of the witnesses explained that there had been
a well-documented case where the defendant made three
controlled buys in his car while two of his children were in
the car. Tape Recording, Senate Committee on Judiciary,
HB 2545, June 11, 1991, Tape 226, Side A (testimony of
Russ Spencer). He observed, “As to whether it would consti-
tute neglect under the bill if the next day they were driving
down the road, I don’t know but that’s not our intent.” Id.
The witness did not express a concern that vehicles where
deliveries customarily are made would become targets for
people attempting to steal drugs in the same way that drug
houses would. Rather, the focus was on the dangers that
ongoing deliveries posed to children inside the cars. While
not dispositive, the committee’s decision to require that a
delivery of controlled substances in a vehicle be contempo-
raneous with the children’s presence is consistent with the
notion that the committee was concerned with something
more than possessing drugs in a vehicle with an intent to
deliver those drugs at some undefined point in the future.

On balance, we are not persuaded that the Senate’s
decision to delete section 3 of the bill defining second-degree
child neglect reflects an intent to depart from the House's
understanding of the bill. Three considerations lead us to
that conclusion. First, the legislative history in the House
clearly demonstrates an intent to distinguish “delivered”
from “possessed with intent to distribute.” Second, ordi-
narily, the effect of deleting section 3 of the bill (prohibiting
second-degree child neglect) would be to eliminate the prohi-
bition against all the conduct that that section covered, leav-
ing any criminal prosecution of that conduct to the child-
endangerment statute. Third, the stated reason for deleting
second-degree child neglect in its entirety was to eliminate
the part of that section that referred to possession, not just
the part of section 3 that referred to consumption. Arrayed
against those considerations is an earlier colloquy between

256 Lt

the Senate committee counsel and a witness, which no mem-
ber of the Senate ever endorsed. In our view, that colloquy is
far too thin a reed on which to rest the conclusion that the
state asks us to draw from the legislative history.

We accordingly hold that first-degree child neglect,
as defined in ORS 163.547, does not include knowingly leav-
ing or allowing a child under 16 years of age to stay in a
vehicle where controlled substances are possessed with an
intent to deliver them.” Because the state does not argue
that the evidence in this case gives rise to any inference other
than possession with intent to deliver, we reverse the Court
of Appeals decision to the extent it upheld defendant’s con-
victions for first-degree child neglect. On review, defendant
does not challenge his convictions for delivery and posses-
sion, and the state does not challenge the Court of Appeals
decision reversing defendant’s conviction for manufacturing
and remanding that charge for further proceedings. Those
parts of the Court of Appeals decision are affirmed.

The decision of the Court of Appeals is affirmed in
part and reversed in part. The judgment of the circuit court
is affirmed in part and reversed in part, and the case is
remanded to the circuit court for further proceedings.

® The state did not charge defendant with child endangerment for allow-
ing his children to “remain in a place where unlawful activity involving con-
trolled substances is maintained or conducted[.]” See ORS 163.575(1)(b); State v.
Gonzalez-Valenzuela, 358 Or 451, 473-74, 365 P3d 116 (2015) (discussing factors
that would give rise to such a charge). We accordingly have no occasion to con-
sider whether the facts in this case would be sufficient for a reasonable trier of
fact to find defendant guilty of that offense.

257

Argued and submitted June 14, judgment of Tax Court reversed, case remanded
to Tax Court for further proceedings September 15, 2016

HABITAT FOR HUMANITY OF
THE MID-WILLAMETTE VALLEY,
Plaintiff-Appellant,

v.
DEPARTMENT OF REVENUE,
State of Oregon,
Defendant-Respondent,
and
MARION COUNTY ASSESSOR,
Intervenor-Respondent.

(TC 5234, SC 063542)

881 P3d 809

Gina Anne Johnnie, Sherman, Sherman, Johnnie &
Hoyt, LLP, Salem, argued the cause and filed the brief for
appellant.

Robert M. Wilsey, Assistant Attorney General, Salem,
argued the cause and filed the brief for respondent
Department of Revenue. With him on the brief were Ellen F.
Rosenblum, Attorney General, and Paul L. Smith, Deputy
Solicitor General.

258 Ce
No appearance on behalf of respondent Marion County
Assessor.
WALTERS, J.

The judgment of the Tax Court is reversed. The case is
remanded to the Tax Court for further proceedings.

Po 259

WALTERS, J.

In this direct appeal from the Regular Division
of the Tax Court (Tax Court), we consider whether tax-
payer, Habitat for Humanity of the Mid-Willamette Valley
(Habitat), is entitled to an exemption from property taxes
assessed on a vacant lot that it owned. During the relevant
time, Habitat intended to build a home on the lot but had
not yet started construction. The Marion County Assessor
(the county) denied Habitat’s application for a tax exemp-
tion under ORS 307.130(2)(a), which provides nonprofit
institutions with a tax exemption on “such real or personal
property, or proportion thereof, as is actually and exclu-
sively occupied or used in the literary, benevolent, charita-
ble or scientific work carried on by such institutions.” The
Tax Court affirmed, holding that Habitat was not using the
vacant lot to carry out its charitable work at the time of the
assessment. For the reasons stated below, we disagree and
reverse the Tax Court’s ruling.

The parties do not dispute the relevant facts.
Habitat is a nonprofit corporation. According to the stipu-
lated facts, Habitat’s articles of incorporation state that one
of its purposes is to acquire vacant lots and build affordable
housing on those lots. Consistent with that, in September
2012, Habitat acquired a residentially zoned vacant lot in
Marion County for “the sole purpose of later building a res-
idential home on it using volunteer labor and selling it to a
low-income family at a price below market.” In August 2013,
Habitat applied to the county for an exemption from 2013-14
property taxes under ORS 307.130(2)(a), which provides,

“[T]he following property owned or being purchased by
art museums, volunteer fire departments, or incorporated
literary, benevolent, charitable and scientific institutions
shall be exempt from taxation:

“(a) *** [O]nly such real or personal property, or pro-
portion thereof, as is actually and exclusively occupied or
used in the literary, benevolent, charitable or scientific
work carried on by such institutions.”

Later that month, the county denied Habitat’s exemption
application, stating that the lot was not being “‘actually and
exclusively occupied or used’ for the charitable purpose of

260 po

providing homes to the needy.” In September 2013, Habitat
applied for a building permit. Upon receiving the building
permit in October 2013, Habitat began constructing a home
on the property.

Habitat appealed the denial ofthe exemption request
to the Magistrate Division of the Tax Court. “The burden of
establishing entitlement to an exemption is on the taxpayer
claiming the exemption.” Dove Lewis Mem Emergency
Veterinary Clinic, Inc. v. Dept. of Rev., 301 Or 423, 426-27,
723 P2d 320 (1986). The magistrate held that, as a mat-
ter of law, Habitat failed to establish its entitlement to an
exemption; accordingly, it denied Habitat’s motion for sum-
mary judgment and granted the cross-motion for summary
judgment filed by the county and intervenor Department of
Revenue (the department). Habitat for Humanity of the Mid-
Willamette Valley v. Marion Cty. Assessor, TC-MD 130518C,
2014 WL 3890325 (Or Tax M Div, Aug 8, 2014). Habitat then
appealed to the Regular Division of the Tax Court, which
also denied Habitat’s motion for summary judgment and
granted the department’s cross-motion for summary judg-
ment. Habitat for Humanity v. Dept. of Rev., 22 OTR 102
(2015).

In reaching that result, the Tax Court relied on this
court’s case law interpreting ORS 307.180(2)(a), which the
Tax Court read as precluding an exemption for vacant land.
Id. at 104 (citing Emanuel Lutheran Charity Bd. v. Dept. of
Rev., 263 Or 287, 502 P2d 251 (1972)). Further, the Tax Court
contrasted the statutory language in ORS 307.130(2)(a),
which refers to real property being “occupied or used,” with
other exemption statutes that distinguish between “using”
property and “holding” property. Id. at 104-05. Based on
that analysis, the Tax Court entered a general judgment
in favor of the department, reasoning that Habitat did not
qualify for an exemption under ORS 307.130(2)(a) because
Habitat was merely holding its land rather than using it.

Habitat directly appealed that decision to this
court. See ORS 305.445 (authorizing such appeals). This
court’s review of a Tax Court decision is “limited to errors or
questions of law or lack of substantial evidence in the record
to support the tax court’s decision or order.” ORS 305.445.

ip 261

Because this is an appeal from a grant of summary judg-
ment, the issue presented is a question of law: whether the
Tax Court erred in concluding that there was no genuine
issue of material fact and that the department was enti-
tled to judgment as a matter of law. TCR 47 C (standard
for granting summary judgment); see also Tektronix, Inc. v.
Dept. of Rev., 354 Or 531, 533, 316 P3d 276 (2018) (applying
standard). As noted above, the parties do not dispute the rel-
evant facts. The question before us is whether, under those
undisputed facts, the Tax Court correctly interpreted and
applied the relevant exemption provision, ORS 307.130(2)(a),
in determining that the department was entitled to judg-
ment as a matter of law.

On that question, the parties dispute whether, the
lot at issue was “actually and exclusively occupied or used”
by Habitat in carrying on its charitable works. ORS 307.130
(2)(a). That is a question of statutory interpretation. In
attempting to resolve questions of statutory interpretation,
our goal is to discern what the legislature intended a pro-
vision to mean by reviewing the text in context as well as
any pertinent legislative history. Comcast Corp. v. Dept. of
Rev., 356 Or 282, 295, 337 P3d 768 (2014). If the legislature’s
intent remains unclear, then we resolve any ambiguity by
applying appropriate canons of statutory construction. State
v. Gaines, 346 Or 160, 172, 206 P3d 1042 (2009).

However, “[wle also consider this court’s prior con-
struction of the statutes at issue.” State v. McAnulty, 356 Or
432, 441, 338 P3d 653 (2014), cert den, 136 S Ct 34, 193 LEd
2d 48 (2015); see also Liberty Northwest Ins. Corp., Inc. v.
Watkins, 347 Or 687, 692, 227 P3d 1134 (2010) (“As part of
the first level of analysis, this court considers its prior inter-
pretations of the statute.”). This court has construed the rel-
evant exemption provision in numerous previous decisions.
See YMCA v. Dept. of Rev., 308 Or 644, 651, 784 P2d 1086
(1989) (so stating and examining history of the tax exemp-
tion statute). When a prior construction implicates the

1 In reaching those prior constructions, the court has frequently stated that
tax exemption statutes are subject to the rule of “strict but reasonable construc-
tion.” See, e.g., Emanuel Lutheran, 263 Or at 291 (applying rule); Willamette Univ.
v, Tax Com., 245 Or 342, 344, 422 P2d 260 (1966) (same); Multnomah School of
Bible v. Multnomah Co., 218 Or 19, 28, 343 P2d 893 (1959) (same). The rule of

—— Soo EE EEO Oa |

262 PO

interpretative question before us, “the court may consider
itself bound to follow a prior construction as a matter of stare
decisis.” Halperin v. Pitts, 352 Or 482, 492, 287 P3d 1069
(2012); see also Farmers Ins. Co. v. Mowry, 350 Or 686, 695-
96, 261 P3d 1 (2011) (discussing common considerations that
arise when determining the weight of a previous decision).

According to the department, the Tax Court cor-
rectly concluded that our case law resolves the dispute pre-
sented by this case. Like the Tax Court, the department
maintains that this court’s decision in Emanuel Lutheran,
268 Or 287, establishes a bright-line rule precluding a prop-
erty tax exemption, under ORS 307.130(2)(a), for vacant lots
and requiring at least that the taxpayer have a building
under construction on the property before the taxpayer may
be eligible for the exemption.

In Emanuel Lutheran, the taxpayer operated a non-
profit hospital and had purchased lots around the hospital
for future expansion of the existing hospital. 263 Or at 288-
89. There was no dispute that once those new buildings
were completed, the hospital could receive a tax exemption
for those properties. Nevertheless, the department argued
that the hospital was not yet entitled to an exemption on the
surrounding lots because the lots were vacant at the time of
the assessment.

The hospital countered that the tax exemption
provision extended to property being prepared to serve a
charitable purpose. The hospital based that argument on
Willamette Univ. v. Tax Com., 245 Or 342, 422 P2d 260
(1966), in which the court held that a university was enti-
tled to a property tax exemption for four parcels of land

strict but reasonable construction is generally in accord with the methodology
noted above. “Strict but reasonable means merely that the statute will be con-
strued reasonably to ascertain the legislative intent, but in case of doubt will
be construed against the taxpayer.” Emanuel Lutheran, 263 Or at 291. In other
words, the court starts by attempting to ascertain legislative intent because “the
intention of the legislature must be the primary objective sought.” Willamette
Univ., 245 Or at 844, But if the court cannot discern the legislative intent, then
the court resolves any ambiguity by applying appropriate canons of statutory
construction. One canon available in tax exemption cases is the canon “that stai-
utes providing exemption from taxation are to be strictly construed” against the
taxpayer and in favor of the state. Id.

pT 268

upon which the university had begun constructing student
housing buildings.? Id. at 344. In doing so, the court deter-
mined that the phrase “actually occupied and used,” as
it appears in the tax exemption statute, is not limited to
property that directly carries out the taxpayer’s charitable
purposes but also includes property “then being prepared
to carry out the purposes of the exempt charity.” Id. at 349.
Because the university was in the process of constructing
buildings intended to advance its educational purposes,
there was no dispute that the property met that standard—
i.e., that the property was “being prepared to carry out the
purposes of the exempt charity.” Id. As a result, the court
held that the property at issue was “being occupied and
used” to carry on the university’s educational purposes. Id.
at 346.

Like the taxpayer in Willamette Univ., the hospital
in Emanuel Lutheran sought a tax exemption for property
that it was not yet occupying or using to directly carry out
its charitable purposes—namely, providing medical ser-
vices to patients as well as teaching and research services.
Emanuel Lutheran, 263 Or at 288-89. Nevertheless, the hos-
pital argued that, like the taxpayer in Willamette Univ., it
was entitled to an exemption because it was preparing the
property to serve those purposes. However, unlike the tax-
payer in Willamette Univ., the hospital in Emanuel Lutheran
had not yet begun construction of the new buildings that
would serve its charitable purposes. Instead, the hospital
was “preparing” the property to serve its charitable pur-
poses only “in the sense that it was taking steps under its
master plan to procure detailed plans and financing.” Id. at
291. Thus, at the time of the assessment, the hospital's lots
remained “vacant awaiting future use.” Id. at 289.

This court rejected the hospital’s argument and
refused to extend the holding of Willamette Univ. to prepa-
rations so far removed from a taxpayer's charitable purpose:

2 There was also in dispute a fifth parcel of land that provided parking to
those working on the construction project. Whether the parking lot justified
tax exemption depended on whether the buildings under construction justified
a tax exemption, because the tax exemption statute provided a separate para-
graph exempting parking lots used in conjunction with charitable works. ORS
307.130(1)(b) (1955), renumbered as ORS 307.130(2)(b).

264 po

“By requiring that exempt property be actually occupied for
charitable or other exempt purposes the legislature must
have meant something more than mere ownership or even.
ownership with an intent to put the land to an exempt use
in the future. Actual occupancy must mean as a minimum
that the land be occupied by a building under construction.”

Id. at 291-92. According to the court, “land merely being
held for future use is not being actually occupied or used
for the benevolent or charitable work carried on by [the hos-
pital].” Id. at 292. The court therefore concluded that the
hospital was not entitled to tax exemption on the vacant lots
at issue in that case.

Tn this case, as noted above, the department reads
Emanuel Lutheran as creating a bright-line rule: To be eligi-
ple for the exemption, property must at least have a building
under construction. The department concludes that, because
Habitat had not yet started construction at the time of the
assessment at issue in this case, Habitat’s property is like
the nonexempt lots in Emanuel Lutheran rather than the
exempt lots in Willamette Univ., thus preventing Habitat
from establishing its eligibility for exemption.

Habitat does not ask us to overrule Emanuel Lutheran.
Instead, it contends that the department misreads Emanuel
Lutheran as turning entirely on the fact that the property
in that case was vacant, rather than considering how the
vacant property fit within the hospital’s charitable works.
Habitat insists that the scope of the exemption statute
should be defined by the specific works carried on by a spe-
cific taxpayer. Thus, according to Habitat, whether property
is “actually and exclusively occupied or used in the literary,
benevolent, charitable or scientific work carried on by such
institutions” will differ depending on the nature of the work
that a taxpayer carries on and the relationship between that
work and the property at issue. ORS 307.130(2)(a).

On that point, Habitat is correct. As this court said
in Multnomah School of Bible v. Multnomah Co., 218 Or 19,
28, 343 P2d 893 (1959), the scope of the exemption statute is
defined by

“the primary purpose for which the institution was orga-
nized and includes any property of the institution used

pi 265

exclusively for any facility which is incidental to and rea-
sonably necessary for the accomplishment and fulfillment
of the generally recognized functions of such a charitable
institution.”

Id. at 36-37.

In Multnomah School of Bible, a county refused to
exempt two properties that a college was using as residences
for its dining hall supervisor and superintendent of build-
ings. Id. at 37. The court held that, although the school did
not use the property to directly provide educational instruc-
tion, the school was entitled to an exemption. Id. In reaching
that result, the court avoided broad categorical rules and,
instead, attempted to follow “a road distinguished for its
appreciation of common sense and reason.” Id. at 33. The
court reasoned that because the taxpayer was a college, the
exemption extended to “‘any facilities which are reason-
ably necessary for the fulfillment of a generally recognized
function of a complete modern college’” Id. at 30 (quoting
Church Divinity Sch. of Pac. v. Alameda Cty., 152 Cal App
2d 496, 502, 314 P2d 209 (1957)). One reasonably necessary
function of a college, the court said, is “the continuance of
the health, safety and comfort of its students while under
its domain and to the extent reasonably necessary to afford
such protection by the proper maintenance of its plant and
without interruption or delay in the use of its institutional
facilities.” Id. at 37. And, according to the court, that func-
tion was advanced by having staff live near the facilities
that they served. Id. (“[I]t [is] highly expedient that they
should reside where they do and not elsewhere.”).

Thus, the court’s decision in Multnomah School of
Bible turned on the specific charitable purposes of the tax-
payer and the function of the property to serve those pur-
poses. Similarly, in Emanuel Lutheran, the court defined the
scope of the exemption with reference to the hospital's chari-
table works. 263 Or at 289 (“The simple issue is whether the
property on the assessment date was ‘actually and exclu-
sively occupied or used’ by Emanuel in the benevolent and
charitable work carried on by it.” (Emphasis added.)); id. at
292 (“[Lland merely being held for future use is not being
actually occupied or used for the benevolent or charitable

266 Po

work carried on by [the hospital].” (Emphasis added.)). Just
as a taxpayer's entitlement to an exemption for staff resi-
dences turns on the taxpayer’s charitable purposes, so too
does a taxpayer’s entitlement to an exemption for vacant
land. A different taxpayer having charitable purposes dif-
ferent from those of the college in Multnomah School of
Bible, would not necessarily be entitled to an exemption
for staff residences. And, similarly, just because the court
determined in Emanuel Lutheran that a hospital was not
occupying or using vacant land in carrying on its charitable
works does not mean that a different taxpayer with different
charitable purposes also must be denied an exemption for its
vacant land.

In Emanuel Lutheran, the court held that the hos-
pital’s primary charitable purposes were medical, research,
and teaching services. The hospital’s charitable work was
not building a hospital facility, but operating a hospital. The
purpose of the hospital facility was to provide a location for
the hospital’s future charitable works. Thus, developing land
to add more hospital space might allow a hospital to do more
charitable work, but the development of the land was not
itself the hospital’s charitable work. Nevertheless, the court
did not require that the hospital actually complete develop-
ment of the land and conduct medical, research, and teach-
ing services on the land in order to obtain the exemption
it sought. Rather, the court required only that the hospital
take a preparatory step toward completing the development
of its land and toward conducting its charitable activities;
the court required that the hospital demonstrate that the
facility be under construction.

In contrast, here, Habitat’s charitable work is
the acquisition and development of land. As noted above,
Habitat’s primary charitable purpose is to acquire vacant
lots and to build housing on those lots for sale to low-income
families at below market prices. Habitat does not use build-
ings that it constructs to house its charitable operations.
Instead, the land that Habitat acquires and the buildings
that it constructs are Habitat’s charitable works. Thus,
unlike the hospital in Emanuel Lutheran, Habitat directly
performs its charitable works when it acquires and develops

Po 267

property. Once the development is completed, Habitat sells
homes to individuals, who then pay property taxes on them.
Said another way, Habitat does not acquire land as a pre-
paratory step in completing a facility that it will use in the
future for its charitable activities; when Habitat acquires
and develops land it is presently using that land to conduct
its charitable activities.

To a property developer, like Habitat, vacant lots
are its stock in trade. It maintains a stock of vacant lots
to be developed as resources become available. To continue
the comparison with a hospital, Habitat uses vacant lots
the same way that a hospital uses medications. A hospital
makes present use of medications not only when its physi-
cians or nurses administer them to specific patients, but
also when the hospital acquires and maintains them as part
of its inventory. Similarly, Habitat makes present use of its
vacant lots not only when it sells homes to low-income fam-
ilies, but also when it acquires and maintains those lots,
even if it cannot immediately begin construction on each of
them.

Although each lot is assessed individually, the court
determines exemption eligibility—that is, whether the prop-
erty is being occupied or used to carry on a taxpayer's chari-
table works—by considering how each lot fits within the tax-
payer’s entire charitable enterprise. In Multnomah School of
Bible, this court instructed that “‘[t]he integrated activities
[of an institution] as a whole must be examined?” 218 Or
at 30 (quoting Serra Retreat v. Los Angeles Cty., 35 Cal 2d
755, 757, 221 P2d 59 (1950)). The charitable use of the staff
residences in that case could only be established by looking
at the role of those residences in the overall operations of the
college.

When we correctly consider Habitat’s integrated
activities as a property developer, as well as its primary
charitable purpose, it is apparent that the real property
at issue was actually and exclusively “used in the liter-
ary, benevolent, charitable or scientific work carried on” by
Habitat. ORS 307.130(2)(a). As a result, we hold that, at the
time of the assessment, Habitat was entitled to receive the
tax exemption that the county denied.

2

The Tax Court, therefore, erred by denying Habitat’s
motion for summary judgment and by granting the depart-
ment’s cross-motion for summary judgment.

The judgment of the Tax Court is reversed. The
case is remanded to the Tax Court for further proceedings.

269

Argued and submitted March 10, decision of Court of Appeals reversed,
judgment of circuit court reversed, and case remanded to circuit court for
further proceedings September 15, 2016

AMERICAN CIVIL LIBERTIES
UNION OF OREGON, INC.,
an Oregon non-profit public
benefit corporation,
Petitioner on Review,
v.
CITY OF EUGENE, OREGON,
a municipal corporation,
Respondent on Review,

and
CIVILIAN REVIEW BOARD
OF THE CITY OF EUGENE, OREGON,
Defendant.
(CC 161024398, CA A150403, SC S063430)
380 P3d 281

20

Steven M. Wilker, Tonkon Torp LLP, Portland, argued
the cause and filed the brief for petitioner on review. With
him on the brief was Sarah M. Einowski.

Jerome Lidz, City Attorney’s Office, City of Eugene,
argued the cause and filed the brief for respondent on review.
With him on the brief was Glenn Klein.

Before Balmer, Chief Justice, Kistler, Walters, Landau,
Baldwin, and Brewer, Justices, and Roger DeHoog, Justice
Pro Tempore.**

WALTERS, J.
The decision of the Court of Appeals is reversed. The

judgment of the circuit court is reversed, and the case is
remanded to the circuit court for further proceedings.

** Nakamoto, J., did not participate in the consideration or decision of this
case.

Po 271

WALTERS, J.

At issue in this case is a conditional exemption from
the “right to inspect any public record of a public body in
this state.” ORS 192.420(1). Former ORS 181.854(3) (2013),
renumbered as ORS 181A.830(3) (2015), exempts from
inspection information about a personnel investigation of a
public safety officer if the investigation does not result in
discipline of the officer! That exemption is, however, condi-
tional. It does not apply when “the public interest requires
disclosure of the information.” ORS 181.854(4)(a).? As we
will explain, when that exemption applies, a trial court must
determine, as a matter of both law and fact, the nature and
significance of two competing interests—the public’s interest
in disclosure and the public body’s interest in confidentiality.
Then, the court must balance those competing interests and
determine, as a matter of law, which interest predominates.
In this case, after considering the nature and significance of
the competing interests, we conclude that the public inter-
est in disclosure of the requested records predominates, and
the trial court erred in declining to order their disclosure.
We reverse the contrary decision of the Court of Appeals,
American Civil Liberties Union v. City of Eugene, 271 Or App
276, 350 P3d 507 (2015), and the judgment of the trial court
and remand for further proceedings.’

1 In 2015, the legislature renumbered ORS 181.854 as ORS 181A.830, but
the text of the statute did not change. For simplicity, we will refer to that statute
throughout this opinion as ORS 181.854 because that was its numbering at the
time that this case was decided in the trial court and the Court of Appeals.

2 As relevant here, ORS 181.854 provides, in part:

“(8) A public body may not disclose information about a personnel inves-
tigation of a public safety employee of the public body if the investigation does
not result in discipline of the employee.

“(4) Subsection (3) of this section does not apply:

“(a) When the public interest requires disclosure of the information.

“(b) When the employee consents to disclosure in writing.

“(¢) When disclosure is necessary for an investigation by the public body,
the Department of Public Safety Standards and Training or a citizen review
body designated by the public body.

“(@) When the public body determines that nondisclosure of the informa-
tion would adversely affect the confidence of the public in the public body.”

2 Because we reverse for the reasons stated, we do not reach ACLU’s argu-

ment that the exemption set out in ORS 181.854(3) does not apply when records
are disclosed to a civilian review board pursuant to ORS 181.854(4)(c).

272

PO
I. FACTUAL AND PROCEDURAL BACKGROUND
A. Stipulated Facts

This case was tried to the circuit court on the fol-

lowing stipulated facts:

4,
«9

“6g,

The City of Eugene (the City) is a public body.

The Civilian Review Board (‘CRB’) of the City of
Eugene is a citizen review body established by Eugene
City Code § 2.240.

The CRB was ‘established *** to increase the trans-
parency of, and public confidence in, the police com-
plaint process. In general, the civilian review board
shall evaluate the work of the independent police audi-
tor, and may review completed complaint investiga-
tions involving sworn police employees to provide com-
ment, from a civilian perspective, about whether the
complaint was handled fairly and with due diligence’
Eugene City Code § 2.240(1).

The CRB was ‘intended [to] provide a system of inde-
pendent oversight of the police complaint process and
implement section 15-A of the Eugene Charter of 2002
as adopted by the city electorate on November 8, 2005
[and to] serve as an advisory body to the city council’
Eugene City Code § 2.240(2) and (4).

On May 80, 2008, police officers employed by the City of
Eugene used Taser stun guns in the process of arrest-
ing [Mr.] Van Ornum* and others during a protest in
downtown Eugene against the use of pesticides (the
‘Van Ornum Case’).

In June 2008, the [CRB] designated the Van Ornum
Case as a ‘Community Impact Case’ The Van Ornum
Case was the first case designated as a ‘Community
Impact Case’ in the CRB’s then three[-lyear history[,]
and no other case has been so designated since that
time.

“In this proceeding and in the criminal trial court, Mr. Van Ornum’s sur-
name is shown as “Van Ornum.” In the appellate and Supreme Court proceedings
following his conviction, however, his surname is shown as “Vanornum.” State
v. Vanornum, 354 Or 614, 317 P3d 889 (2013). We will refer to him as Mr. Van
Ornum throughout this opinion.

Po 278

“7,

«gy.

«9,

“10.

“U1.

Following the incident, the Internal Affairs division of
the Eugene Police Department investigated the Van
Ornum Case and the officers involved in the case.

The Internal Affairs investigation of the Van Ornum
Case was a personnel investigation of the public safety
officers employed by the City of Eugene involved in the
incident.

The Internal Affairs investigation file of the Van
Ornum Case was transmitted to the Police Chief, the
Police Auditor and, later, to the [CRB].

Police Chief [] Kerns made preliminary findings
regarding the conduct of the officers involved in the
Van Ornum Case as follows:

“1. Policy Manual (POM) 901.1. Use of Force

“a. The force used by the three officers involved
in the arrest of Mr. Van Ornum and the arrest
of [Mr.] Farley—within policy.

“b. The arresting officer repeatedly pounded
Mr. Van Ornum’s head into the pavement—
unfounded.

“2. POM 309.4. Use of the Taser

“a. The use or actual application of the Taser
by the arresting officer while affecting the
arrest of Mr. Van Ornum and defending him-
self against Mr. Farley—within policy.

“b. The use of the Taser not fired by a second
officer to defend the arresting officer from
Mr. Farley—within policy.

“3. POM 901.1 Use of Force—The force used by
the officer in pushing Mr. Owen and striking
Mr. Farley—within policy.

“4. POM 1101.1(6) a—Constitutional Rights—That
the officer had probable cause to arrest Mr. Owen
for the crimes for which he was charged—within
policy.

On October 1, 2009, the [CRB] held a public meeting
to consider and vote on the preliminary findings made

by Chief Kerns. The [CRB] concurred unanimously in
all but one of Chief Kerns’ preliminary findings. The

274

“12.

“13.

“14.

“15.

“16.

“V7.

“18.

CRB concurred by a 4-2 vote in preliminary finding
2.a: ‘The use or actual application of the Taser by the
arresting officer while affecting the arrest of Mr. Van
Ornum and defending himself against Mr. Farley—
within policy.

Chief Kerns subsequently confirmed his preliminary
findings, making a final adjudication that the officers’
conduct was within policy and that the complaints
were unfounded. The Internal Affairs investigation
did not result in discipline.

On December 15, 2009, plaintiff American Civil
Liberties Union of Oregon, Inc. ACLU’), made a
request under the Oregon Public Records law to
inspect and copy ‘all documents used by the Civilian
Review Board in reviewing and deciding the May 30,
2008, [] Van Ornum Community Impact Case.

The City of Eugene denied ACLU the opportunity to
inspect and copy the requested records because ‘the
subsequent investigation did not result in discipline
of any police officer’ and ‘pursuant to ORS 181.854(3),
and the City’s determination that no exception to the
statutory prohibition exist in this instance, the City
is prohibited from releasing information related to
the personnel investigation arising from the May 30,
2008, incident.

On July 9, 2010, ACLU petitioned the Lane County
District Attorney to review the City of Eugene’s denial
of the public records request.

In response to the petition, the City of Eugene released
some of the records that had been withheld, but con-
tinued to assert that the portions of the Internal
Affairs investigative file that had not been released
were confidential and not subject to disclosure.

The Lane County District Attorney declined to order
disclosure of the requested documents.

ACLU filed this action to compel the City of Eugene to
disclose the requested documents.”

B. Trial and the Trial Court Decision

At the outset of trial, the court took judicial notice

of the documents in its file and received plaintiff's exhibits

Po 275

1-38, some of which were designated as joint exhibits. The
admitted exhibits included ACLU’s request for documents
and a letter from the city attorney explaining, as stipulated,
that the City had declined to produce the requested docu-
ments because “the subsequent investigation did not result
in discipline of any police officer” and “pursuant to ORS
181.854(3), and the City’s determination that no exception
to the statutory prohibition exists in this instance, the City
is prohibited from releasing information related to the per-
sonnel investigation arising from the May 30, 2008[,] inci-
dent.” The admitted exhibits also included printouts from
Van Ornum’s criminal trial; minutes of CRB meetings; the
2009 Annual Report of the City’s police auditor; numerous
newspaper articles that discussed the use of Tasers and
the CRB review; and the deposition testimony of the police
chief. After receiving that evidence, the court ruled that the
City had the burden to establish the existence of an exemp-
tion to disclosure. However, the court explained, once the
City met that burden, the burden “[shifted] to the request-
ing party to establish that an exception to that exemption
applies.”

ACLU then called its executive director, David
Fidanque, to the stand. In his declaration on summary
judgment (judicially noticed by the court) and in his testi-
mony at trial, Fidanque testified that the CRB was created
because there were “issues of concern regarding allegations
of police misconduct” and that the CRB “was given unique
authority to oversee and make recommendations concerning
allegations of police misconduct in dealings with the public.”
Fidanque explained that ACLU was interested in review-
ing the records in the Van Ornum case because of its ongo-
ing concern “about the interaction between the operation of
the independent police auditor and [the CRB] vis-a-vis the
police department and the Internal Affairs office, and the
chief as well.” In particular, Fidanque said, ACLU was con-
cerned that some members of the CRB had indicated that
they had discounted certain witness statements from people
who were participating in the protest in favor of other wit-
ness accounts, despite the fact that the discounted witnesses
were closer in proximity to the scene of the arrest. Fidanque
testified that ACLU was interested in reviewing the witness

6 Ie

statements to determine whether the CRB was performing
its expected role:

“[T]he public interest is to help the public understand
whether the system they created in order to provide inde-
pendent oversight of the police department in police mis-
conduct allegation cases is operating as intended ***.

“So that, just to put that in plain English, is the review
board acting in the way that the voters intended when they
created it?”

ACLU rested after Fidanque’s testimony, and the
court considered the City’s motion to dismiss. In that motion,
the City asserted that ACLU had no right to disclosure for
the following reasons:

“On the law and the facts presented in this case, including
the evidence of the comprehensive public disclosure during :
the trial of State v. Van Ornum of the facts of the May 30, |
2008, incident that is the subject of the records which
[pllaintiff seeks to be publicly disclosed, the disclosure of
those records to a public investigatory body—the Civilian
Review Board (CRB)—and the public disclosure of the min-
utes of the CRB’s October 1, 2010, meeting at which the
CRB reviewed those records, [p]laintiff has shown no right
to the relief it seeks.”

(Internal footnote omitted.) The court denied the City’s
motion, and, at the City’s request, then admitted, and took
a brief recess to review in camera, the only exhibit proffered
by the City—a sealed envelope containing the disputed
records. The City did not call any witnesses. However, as
noted, one of the exhibits that ACLU proffered and that the
court received was the deposition testimony of the police
chief. In his deposition, the chief testified that he had made
the determination not to disclose the records because he had
“conferred with the City’s attorneys and asked for their legal
advice on whether or not to release [them],” and made his
decision “based on the advice of [his] counsel.”

After the City rested, the court announced its deci-
sion. The court began by explaining that the evidence sug-
gested that there were two competing public interests. The
first was the public interest in “ensuring appropriate use of

|

277

force and, in particular, Tasers by law enforcement.” The
second was the “public interest in having a safe, high qual-
ity police department *** that can effectively review its own
actions and provide discipline, evaluation, and training for
its officers.” The court found that the existence of the CRB
was evidence of the second of those two competing interests
and that the CRB had been created to balance and safe-
guard “the public interest in competition here.” The court
noted that the exception in ORS 181.854(4)(c), which allows
public bodies to release the kind of information involved in
this case to a citizen review body, such as the CRB, fur-
ther indicated that the CRB’s role was to balance those
interests:

“ORS [181].854(4)(c) carves out a narrow exception that
allows disclosure to the [CRB] of records they need to do
just that. That provision was created to act as a waiver of
confidentiality when a [CRB] is involved. It was created
to extend that confidentiality so as to allow the review
or the oversight that that body provides, so to allow over-
sight while protecting confidentiality and therein lies the
balance.”

Thus, with regard to the public interest in appropriate use of
force by police, the court determined that disclosure was not
required because the CRB provided public oversight while
maintaining the confidentiality that the statute anticipated.

Assuming that ACLU had the burden to prove that
the public interest required disclosure, the court then said
that

“[tlhe ACLU was instrumental in, according to
Mr. Fidanque’s testimony, and likely should be applauded
for its role in creating[,] the [CRB] in order to have that
oversight here in Eugene, but I don’t think the evidence has
shown in this case that the public interest now requires
disclosure of the internal review records that the [CRB]
reviewed in order to now oversee what the [CRB] did.

“So sort of that riddle of finality, how much is enough?
When is enough enough? So do we keep—do we set up
review boards and then seek review of their work and then
keep going on? Sort of like the Cat in the Hat stories. Every
time the cat takes his hat off, another cat pops out. And
when does—when does it end?

I

“Disclosure at this juncture to review the review board,
*** T find is not required based upon the evidence pre-
sented, and, thus, the ACLU, as plaintiff in this case, has
failed to meet its burden of establishing that the exception
applies.”

However, the court went on to explain, even if the
City had the burden of establishing an exemption to disclo-
sure, the court would have found that the evidence supported
nondisclosure. The court indicated that, given its findings
regarding the CRB’s function and the statutory scheme, it
would have reached the same result. Furthermore, the court
said, it had reviewed the requested records in camera and
noted that “there was nothing in those records that caused
{him] to conclude that the public interest would require
*** disclosure of those records in this case.” The court then
entered a general judgment in favor of the City, consistent
with its ruling.

C. Court of Appeals Decision

The Court of Appeals affirmed. American Civil
Liberties Union, 271 Or App at 278. The court began by stat-
ing the standard of review that it intended to apply:

“[Wle accept the trial court’s findings of historical fact
if those findings are supported by any evidence in the
record, and we review the trial court’s conclusions for legal
error.”

Id. at 279. The court also stated the legal standard for deter-
mining whether an exemption under ORS 181.854 applies:

“Thus, as in the cases involving the applicability of the
public-interest exception in ORS 192.501, we conclude that,
when a trial court is analyzing whether the public-interest
exception in ORS 181.854(4)(a) applies, the court must bal-
ance the public interest in disclosure against the public
body’s interest in nondisclosure, with the presumption in
favor of disclosure.”

Id. at 288.

The court then explained its understanding of the
trial court’s decision. Jd. at 288-89. The Court of Appeals said

Po 279

that the trial court had (1) identified the public interest in
disclosure as an interest in “ensuring that police officers are
using appropriate force in their interactions with the pub-
lic”; (2) identified the public body’s interest in confidentiality
-as an interest in “having a police force that can effectively
review its own actions and provide discipline and training
for its officers”; (8) determined that “the CRB was created
to balance those interests—to allow for oversight of police
misconduct while maintaining confidentiality of the police’s
internal investigation of complaints against its officers”; and
(4) determined, “based on the evidence presented,” that the
public interest in transparency of the CRB’s work did not
require disclosure. Id.

Finally, the Court of Appeals concluded that none
of the trial court’s conclusions were erroneous. Id. at 289-
90. The court reasoned that the trial court had not erred
in deciding that the “mere existence of a public interest in
government transparency is insufficient to warrant release”
of the departmental investigation and that the trial court
“could reasonably determine that ACLU failed to demon-
strate that the public’s interest in transparency required
release of the records.” Id. at 290-91. Further, the Court of
Appeals explained, the record showed that the CRB had
extensively reviewed the departmental investigation in a
public forum; the trial court had reviewed the investigative
records in camera; and the trial court had concluded that
the public interest did not require disclosure of those records
so that the public could reach its own conclusions about the
sufficiency of those reviews. Id. at 291. Thus, the Court of
Appeals concluded, “[gliven the evidence presented,” the
trial court had not erred. Id.

Il. APPLICABLE LEGAL STANDARDS

It now falls to us to make our own determination
about whether the trial court erred in declining to order
disclosure. To do so, we must first consider the applicable
legal standards—both the legal standard that a trial court
is required to apply in deciding whether to require disclo-
sure of public records and the legal standard that an appel-
late court is required to apply in reviewing a trial court’s
decision.

200

A. The Legal Standards That a Trial Court is Required to
Apply

Before this court, the parties seem to agree with
the Court of Appeals that, to determine whether the public
interest requires disclosure under ORS 181.854, a trial court
must balance the public’s interest in disclosure against the
public body’s interest in confidentiality, with the presump-
tion in favor of disclosure. In confirming that that is the
applicable legal standard, we proceed as follows. First, we
briefly summarize the history of the Public Records Law and
its underlying principles. Second, we outline a case decided.
by the Court of Appeals in 1988, a year before the enactment
of ORS 181.854, and reason from those underlying princi-
ples and that enactment history. Third, we explain that, in
determining the nature and significance of the competing
interests that a trial court must balance, a trial court must
consider both law and fact. Fourth, we conclude that a trial
court’s conclusion about which of the competing interests
predominates is a question of law.

1. History of Public Records Law and underlying
principles

The right to inspect public records is set forth in
ORS 192.420(1):

“Every person has a right to inspect any public record.
of a public body in this state, except as otherwise expressly
provided by ORS 192.501 to 192.505.”

Some version of that right to inspection has been part of
Oregon law since 1862. Jordan v. MVD, 308 Or 433, 437,
781 P2d 1203 (1989). That right was included in the original
Deady Code, and, in 1961, the legislature reaffirmed it and
deleted a provision that had limited it to those with a “law-
ful purpose.” Id.

In 1961, in an opinion authored by Chief Justice
O’Connell, this court decided MacEwan v. Holm et al, 226
Or 27, 359 P2d 413 (1961). The question presented was
whether the plaintiff had a right to inspect data collected
by the State Board of Heath relating to nuclear radiation
sources. Id. at 29. At that time, ORS 192.010 provided that

Po 281

“lelvery citizen of this state has a right to inspect any public
writing of this state, except as otherwise expressly provided
by statute.” Id. at 34-35. The court determined that the data
that the plaintiff sought constituted a “public writing” as
that term was used in ORS 192.010 and that no other stat-
ute expressly provided an exemption. Jd. at 39. In making
that determination, the court described the principles that
underlie the public’s right to inspect public records:

“Writings coming into the hands of public officers in
connection with their official functions should generally
be accessible to members of the public so that there will
be an opportunity to determine whether those who have
been entrusted with the affairs of government are hon-
estly, faithfully and competently performing their function
as public servants. Nowack v. Auditor General, [243 Mich
200, 219 NW 749 (1928)]. ‘Public business is the public’s
business. The people have the right to know. Freedom of
information [about public records and proceedings] is their
just heritage. *** Citizens *** must have the legal right
to *** investigate the conduct of [their] affairs’ Cross, The
People’s Right to Know, p xiii (1953).”

Id. at 38 (emphasis in original). But the court also observed
that “[t]he public’s right of inspection is not without qualifi-
cation.” Id. at 44. As a result, the court explained, in deter-
mining whether the records should be made available for
public inspection in any particular instance, a court must
balance the interest of the citizen in knowing what the ser-
vants of government are doing and the citizen’s proprietary
interest in public property, against the interest of the public
in having the business of government carried on efficiently
and without undue interference. Id. at 45.

In conducting that balancing, the court said that

“the scales must reflect the fundamental right of a citizen
to have access to the public records as contrasted with the
incidental right of the agency to be free from unreason-
able interference. Note: Access to Official Information: A
Neglected Constitutional Right, 27 Ind LJ. 209 (1951).”

Id. at 46. And, significantly, the court described the public’s
fundamental interest as placing the “burden of proof” on the
public entity opposing disclosure:

282 ee

“The citizen’s predominant interest may be expressed in
terms of the burden of proof which is applicable in this class
of cases; the burden is cast upon the agency to explain why
the records sought should not be furnished.”

Id. (emphasis added). “Ultimately,” however, the court explained
that it falls to the courts to determine whether disclosure is
required:
“[It] is for the courts to decide whether the explanation
is reasonable and to weigh the benefits accruing to the
agency from nondisclosure against the harm which may
result to the public if such records are not made available
for inspection.”

Id.

In 1978, the legislature adopted a more detailed
Public Records Law. Or Laws 1973, ch 794. That law “con-
tinued the general rule mandating disclosure of public
records unless an exemption expressly applies.” Jordan, 308
Or at 437. And it also incorporated a number of the concepts
that the court had discussed in MacEwan. The new Public
Records Law provided that “the burden is on the public body
to sustain its action,” ORS 192.490(1), and made certain
categories of documents exempt from inspection “unless
the public interest requires disclosure in the particular
instance,” ORS 192.501.

2. The Court of Appeals decision in 1998 and the enact-
ment of ORS 181.854

In 1998, just one year prior to the enactment of the
statute at issue in this case, the Court of Appeals decided
Oregonian Publishing v. Portland School Dist. No. lJ, 144
Or App 180, 182, 925 P2d 591 (1996), modified and adhd
to on recons, 152 Or App 185, 952 P2d 66 (1998). In that
case, The Oregonian sought disclosure of an investigative
report that had resulted in the discipline of public school
teachers. Id. at 182-83. One of the questions presented was
whether the report was exempt from disclosure under ORS
192.501(12). Id. at 187. That statute provided (and continues
to provide) an exemption for “a personnel discipline action,
or materials or documents supporting that action,” ORS
192.501(12), unless “the public interest requires disclosure

PF 283

in the particular instance,” ORS 192.501. The court began
by explaining the exemption provided by ORS 192.501(12)
as a conditional exemption that requires a court to “balance
the private interest in confidentiality against the public
interest in disclosure.” Oregonian Publishing, 144 Or App at
187. The court then described the public interest in disclo-
sure. The court quoted Guard Publishing Co. v. Lane County
School Dist. No. 4J, 96 Or App 463, 469, 774 P2d 494 (1989),
revd, 310 Or 32, 791 P2d 854 (1990), for the proposition that
“the Public Records [inspection law] expresses the legisla-
ture’s view that members of the public are entitled to infor-
mation that will facilitate their understanding of how pub-
lic business is conducted,” and also cited the fact that the
teachers had been investigated for misuse and theft of pub-
lic property as indicating that the public’s interest in disclo-
sure was significant. Oregonian Publishing, 144 Or App at
187. In describing the competing “private” interest in confi-
dentiality, the court cited the fact that the matter already
had received substantial publicity and concluded that “it is
not clear that disclosure of the documents will intrude into
any privacy that [the employees] enjoy with respect to it.”
Id. Then, weighing those interests, “with the presumption
always being in favor of disclosure,” the court concluded that
the documents were not exempt under ORS 192.501(12).° Id.
(internal quotation marks omitted).

A year later, the legislature adopted the similarly
worded conditional exemption at issue in this case. Or
Laws 1999, ch 855, § 3. While ORS 192.501(12) provides an
exemption to disclosure when a public employee is subjected
to discipline, ORS 181.854(3) provides an exemption to dis-
closure when a public safety employee is not subjected to dis-
cipline.* Both exemptions are similar, however, in that they
are conditional. Like ORS 192.501(12), ORS 181.854(3) does
not apply “when the public interest requires disclosure of

5 This court affirmed. Oregonian Publishing v. Portland School Dist. No. 1J,
829 Or 398, 987 P2d 480 (1999). However, the only issue on review was the appli-
cability of another exemption provided by ORS 342.850(8); this court did not
discuss the conditional exemption provided by ORS 192.501(12).

© ORS 181.854 is incorporated into the Public Records Act by ORS 192.502(9)(a).
That statute provides a catch-all exemption for all records “the disclosure of
which is prohibited or restricted or otherwise made confidential or privileged
under Oregon law.” ORS 192.502(9)(a).

28

the information.” ORS 181.854(4)(a). As relevant here, ORS
181.854 provides:
“(8) A public body may not disclose information about
a personnel investigation of a public safety employee of the
public body if the investigation does not result in discipline
of the employee.

“(4) Subsection (3) of this section does not apply:

“(a) When the public interest requires disclosure of
the information.

“(b) When the employee consents to disclosure in
writing.

“c) When disclosure is necessary for an investiga-
tion by the public body, the Department of Public Safety
Standards and Training or a citizen review body desig-
nated by the public body.

“(d) When the public body determines that nondisclo-
sure of the information would adversely affect the confi-
dence of the public in the public body.”

When it enacted ORS 181.854 in 1999, the legis-
lature had the benefit of the Court of Appeals decision in
Oregonian Publishing, and we presume that the legislature
was aware of that decision. See Johnson v. Gibson, 358 Or
624, 635, 369 P3d 1151 (2016) (presuming that legislature
was aware of existing case law). We think it likely that the
legislature intended to require a similar balancing test to
determine the applicability of the conditional exemption
that it provided in that statute.’ The balancing of competing

7 Throughout its brief in this court, the City acknowledges that, in consider-
ing the exemption in ORS 181.854(3), a trial court must determine whether the
public interest in disclosure outweighs the competing interest in confidentiality,
with the presumption in favor of disclosure. That said, the City also asserts that
because ORS 181.854(3) affirmatively prohibits disclosure of the records of a per-
sonnel investigation of a public safety employee that does not result in discipline,
the interest in confidentiality is greater than the interest afforded to records
that are “merely” exempt from disclosure. That means, the City argues, that “the
balancing of interests starts from a different point.” The City is correct that this
court has interpreted exemptions from disclosure to permit but not to require
a public body to withhald requested documents. Guard Publishing Co. v. Lane
County School Dist. No. 4J, 310 Or 32, 37-38, 791 P2d 854 (1990). However, if a
public body withholds documents for any reason, whether it chooses to do so or
believes it is required to do so, a court must decide whether the public interest
nevertheless requires disclosure. We agree with the Court of Appeals that the

fF 285

interests has been a feature of the Public Records Law since
this court’s decision in MacEwan, and, like the parties and
Court of Appeals, we conclude that, to decide the applicabil-
ity of the conditional exemption provided by ORS 181.854(8),
the appropriate question for a trial court is whether the pub-
lic interest in disclosure outweighs the competing interest in
confidentiality, with the presumption in favor of disclosure.

3. Determination of the nature and significance of com-
peting interests

We also think it evident from the Court of Appeals
decision in Oregonian Publishing that a trial court’s deter-
mination of the nature and significance of the interests that
it must balance in deciding whether to order disclosure of
public documents may entail consideration of both law and
fact. In that case, as noted, the Court of Appeals discussed
as relevant both the applicable legal principles and the facts
that had been proffered by the parties to conclude that, in
the particular circumstances presented, there were compet-
ing interests in disclosure and confidentiality, and that the
interest in disclosure was particularly significant and the
interest in privacy was somewhat diminished. Oregonian
Publishing, 144 Or App at 187.

This court has taken that same approach. It has
explained that a plaintiffis entitled to rely on the statute that
grants the public a right to inspect public documents—ORS
192.420(1)—and the “strong and enduring policy that public
records and governmental activities be open to the public”
to establish the public’s interest in disclosure. Jordan, 308
Or at 438. In addition, this court has recognized that other
aspects of the law may be of assistance in determining the
nature of the competing interests. For instance, in Jordan,
the court considered the legislature’s reasons for the com-
pilation and dissemination of certain motor vehicle infor-
mation in determining the nature of the public interest in
the disclosure of that information. Jd. at 439. The court also
looked to the text of the statute exempting such information

legal standard used to analyze the public-interest exception in ORS 181.854(4)(a)
should not differ from that used to analyze the public-interest exception in ORS
192.501, and we note that the parties did not argue otherwise in the Court of
Appeals. American Civil Liberties Union, 271 Or App at 287.

286

from disclosure to determine the nature of the interest in
maintaining the confidentiality of the records. Id. at 441-42.

This court has not, however, limited its analysis to
legal arguments alone. This court also has discussed the
evidence presented by the parties in assessing the nature
and significance of the competing interests. Thus, in Jordan,
the court considered an affidavit describing the harm that.
could result if the requested motor vehicle information were
disclosed. Id. at 436. And in Sadler v. Oregon State Bar, 275
Or 279, 283-84, 550 P2d 1218 (1976), the court declined to
accept the defendant’s argument that individuals would not
be willing to criticize attorneys if they knew that their com-
plaints could become public knowledge because the defen-
dant had not presented evidence to establish that point.
Similarly, the Court of Appeals has considered factual evi-
dence, or the lack of such evidence, in assessing the compet-
ing interests of the public and the public body. See, e.g., City
of Portland v. Oregonian Publishing Co., 200 Or App 120,
124-25, 112 P3d 457 (2005) (court considered affidavits and
documents); In Defense of Animals v. OHSU, 199 Or App
160, 171, 178-79, 112 P3d 336 (2005) (court considered con-
tractual provisions and lack of evidence).

As the Court of Appeals observed in Turner v. Reed,
22 Or App 177, 187, 588 P2d 373 (1975), for certain cate-
gories of documents, the nature of the competing interests
may be determined as a matter of law. For others, the par-
ties may be required to identify and prove the interests at
stake. Id. at 193. Whether a party is required to introduce
facts establishing the nature and significance of an inter-
est that favors disclosure or confidentiality will depend on
whether the interest on which the party relies is evident as a
matter of law or is dependent on the production of evidence.

When a party can establish the interest in disclo-
sure or confidentiality as a matter of law, the party is not
required to adduce additional evidence of that interest.
When, however, a party cannot establish such an interest
as a matter of law, the party must adduce evidence of the
interest in disclosure or confidentiality before that interest
can be weighed against a competing interest. And a party is
not limited to available legal arguments. A party is entitled

287

to adduce facts to establish an interest in disclosure or con-
fidentiality, or, if a party wishes to claim that the interest
propounded is of greater or lesser import given the partic-
ular circumstances that the case presents, the party again
may rely on legal arguments or evidence that it proffers. A
statute or its context may indicate that a party’s interest
is more or less weighty in the relevant circumstances, and
facts adduced by a party may demonstrate that a claimed
interest is more or less weighty than it might appear in the
abstract.

4. Determination of which interest predominates is a
question of law

Once a trial court has determined the nature
and significance of the competing interests, the court, as
indicated, must balance the public's interest in disclosure
against the public body’s interest in confidentiality. In this
case, the City describes that balancing as a fact-finding pro-
cess and asserts that an appellate court must affirm the
trial court’s conclusion if there are any facts to support it. In
support of that position, the City relies on a Court of Appeals
case—In Defense of Animals, 199 Or App at 169, 176. In
that case, however, the Court of Appeals did not describe
the balancing process as a fact-finding process, nor did it
defer to the trial court’s conclusions. Instead, the Court of
Appeals reviewed the trial court record de novo, pursuant
to former ORS 19.415(8). Id. at 162. That statute has since
been amended to permit but not require de novo appellate
review. Or Laws 2009, ch 231, § 2. In this case, the Court of
Appeals conducted its review under the current version of
ORS 19.415 and declined to exercise its authority to conduct
de novo review. American Civil Liberties Union, 271 Or App
at 278. Thus, In Defense of Animals does not aid us in decid-
ing whether the City is correct that the balancing required
by ORS 181.854(4)(a) is a fact-finding process, and we look
instead to relevant provisions of the Public Records Law and
our cases interpreting that law.

ORS 192.490(1) provides that, in a suit to order the
production of records improperly withheld, the “burden” is
on the public body to sustain its action. That reference to
“burden” is often used to describe the “burden” of producing

8 I

factual evidence or persuading a factfinder of the truth of
that evidence. But, in our view, the Public Records Law does
not use the term “burden” in either of those senses.

When this court said, in MacEwan, that the “citi-
zen’s predominant interest may be expressed in terms of the
burden of proof,’ what it meant was not that a court must
decide as a factual matter whether a particular fact has been
established, but that a court must “weigh the benefits accru-
ing to the agency from its nondisclosure against the harm
which may result to the public if such records are not made
available for inspection.” 226 Or at 46 (emphasis added). By
placing the “burden” on the public entity opposing disclo-
sure, the court, in MacEwan, meant to indicate not that a
court must engage in a fact-finding process, but that, if the
interests are in equipoise, the people’s interest in disclosure
must prevail. In our view, when the legislature provided, in
ORS 192.490(1), that, in a public records action, the “burden
is on the public body to sustain its action,” it intended to use
the term “burden” in the same sense that this court used it
in MacEwan—not to indicate that, in weighing competing
interests, a court should decide a factual question, but to
indicate that, when the parties’ interests are of equal value,
the public’s interest in disclosure predominates.

The scale that a court uses to measure the rela-
tive weight of competing interests is not a scale that mea-
sures whether a fact is or is not true; it is a scale that deter-
mines which of two legal interests predominates. When a
trial court uses such a scale to answer a question that has
only one legally correct answer, it decides that question as
a matter of law. See, e.g., Horton v. OHSU, 359 Or 168, 376
P3d 998 (2016) (weighing state’s constitutionally recognized
interest in sovereign immunity against plaintiff's right to
a remedy as a matter of law); Wallulis v. Dymowski, 8323 Or
337, 348, 918 P2d 755 (1996) (weighing competing interests
in determining whether defamatory statement is privileged
as a matter of law); State v. Tourtillott, 289 Or 845, 618 P2d
423 (1980) (weighing governmental interest in enforcement
of laws against intrusion on rights of people stopped at road-
block as a matter of law). In contrast, when there is more
than one legally correct answer to a legal question, a trial

Pp 289

court exercises its discretion to determine the answer that it
deems correct. State v. Rogers, 330 Or 282, 312, 4 P3d 1261
(2000); see, e.g., State v. Sparks, 336 Or 298, 308-09, 83 P3d
304 (2004) (appellate court reviews trial court’s decision
under OKC 403 as to whether probative value is outweighed
by other factors for abuse of discretion).

In Jordan, when this court reviewed the trial court’s
balancing of competing interests, it assumed, correctly, that
there was only one legally correct answer to the question
of which of two competing interests predominated. 308 Or
at 443. That understanding reflects not only the nature of
the decision, but also the need to accord the same weight
to the same interests. See Guard Publishing Co., 310 Or at
37 (legislature intended that Public Records Law be applied
“with a large measure of uniformity”). Although particu-
lar facts may augment or diminish the weight that a court
accords to competing interests, and a trial court’s decision
about which interest predominates may be affected by its
factual findings, that does not mean that the balancing pro-
cess itself constitutes a factual determination or an exer-
cise of discretion. It does not. When a trial court determines
which competing interest predominates, it arrives at a legal
conclusion.

B. Appellate Standard of Review

The standard by which an appellate court reviews a
trial court’s decisions is determined by their nature. As the
Court of Appeals said at the outset of its opinion in this case,
appellate courts, “accept the trial court’s findings of histor-
ical fact if those findings are supported by any evidence in
the record, and we review the trial court’s conclusions for
legal error.” American Civil Liberties Union, 271 Or App at
279.8 When an appellate court reviews a trial court’s con-
clusions about the nature and significance of the relevant

® The Court of Appeals opinion may not be entirely consistent in its applica-
tion of that standard of review. In affirming the decision of the trial court, the
Court of Appeals stated that the trial court “could reasonably determine that
ACLU failed to demonstrate that the public's interest in transparency required
release of the records,” seeming to defer to the trial court’s finding as though
it were a factual finding. American Civil Liberties Union, 271 Or App at 291.
However, in other parts of its opinion, the Court of Appeals also seemed to reach
its own conclusion about whether the trial court’s reasoning was correct, and, in

20

competing interests, it reviews the trial court’s factual find-
ings to determine if there is evidence in the record to sup-
port them; it reviews the trial court’s legal conclusions for
legal error. When an appellate court reviews a trial court’s
conclusion about which of the competing interests that it has
identified is predominant, and, therefore, whether disclosure
is required, it reviews that legal conclusion for legal error.

Ill. APPLICATION OF LEGAL STANDARDS

Having identified the applicable legal standards,
we now proceed to an analysis of whether the trial court
erred in concluding that the records at issue in this case
are exempt from disclosure under ORS 181.854(3). The
records at issue can be described, generally, as portions of
the Internal Affairs investigative file used by the CRB to
review and decide the Van Ornum case.

As step one in deciding whether to order disclosure
of those records, the trial court was required to determine
the nature and significance of the competing interests in
disclosure and confidentiality. The court was required to
consider the text and context of the Public Records Law,
the text and context of ORS 181.854, and other legal argu-
ments pressed by the parties. The court also was required
to consider evidence, if any, that the parties adduced that
was relevant to the nature or significance of the competing
interests. Then, as step two in the process, the court was
required to weigh those interests and decide, as a matter of
law, which interest predominated. If the trial court consid-
ered the interests to be in equipoise or to weigh in favor of
disclosure, the trial court was required to order disclosure.

In conducting our review of the trial court’s analy-
sis, we too begin at step one with the trial court’s legal
conclusions and factual findings regarding the nature and
significance of the competing interests. As noted, we accept
the trial court’s findings of fact if they are supported by evi-
dence in the record, and we review the trial court’s legal
conclusions for legal error. At step two, we examine, for legal

closing, stated that, “[gliven the evidence presented, the [trial] court did not err
in concluding that the public interest did not require disclosure.” Id.

Pp 291

correctness, whether the trial court erred in weighing those
interests and in determining that the documents at issue
were exempt from disclosure.

A. Nature and Significance of Competing Interests
1. The public’s interest in disclosure

We begin with the nature and significance of the
public interest in disclosure. The only aspect of the public
interest in disclosure that the trial court identified was
the public interest in disclosure of information about police
department operations. The trial court explained that the
evidence suggested that the public had an interest in “ensur-
ing the appropriate use of force and, in particular, Tasers
by law enforcement.” However, the trial court decided, that
interest was met by the creation of the CRB. The trial court
reasoned that the CRB had been established to provide pub-
lic oversight of police operations while, at the same time,
protecting confidentiality.

In so limiting its description of the public interest
in disclosure, the trial court erred. As the City acknowl-
edges, the public has a significant interest in acquiring
“information about how public business is conducted”
and in monitoring “public officials’ performance of their
duties.” That interest extends not only to the business
of the police department, but also to the business of the
entity established to monitor the performance of the police
department—the CRB. The stipulated facts established
that (1) the CRB was intended to provide a system of “inde-
pendent” oversight of the police complaint process; (2) the
CRB had designated the Van Ornum case as a “Community
Impact Case”; (3) the Van Ornum case was the first such
case in the three year history of the CRB, and no other case
had been so designated since that time; and (4) the CRB
had concurred unanimously in all but one of the police
chief’s preliminary findings, and the chief had subsequently
confirmed his preliminary findings. The uncontested facts
established that (1) members of the public had an ongoing
concern about “the interaction between the operation of the
independent police auditor and [the CRB] vis-a-vis the police
department and the Internal Affairs office, and the chief as

9

well”; (2) members of the public were interested in reviewing
witness statements to determine whether the CRB was per-
forming its expected role; and (3) the public had an interest
in determining whether the CRB was acting in the way that
the voters intended when they created it.

Rather than considering the public’s interest in
reviewing the effectiveness of the CRB, the trial court
apparently discounted that interest, reasoning, from ORS
181.854(4) and the creation of the CRB, that the CRB was
intended to provide the public with the only oversight it
needed. That legal conclusion is incorrect. As noted, ORS
181.854 provides:

“(8) A public body may not disclose information about
a personnel investigation of a public safety employee of the
public body if the investigation does not result in discipline
of the employee.

“(4) Subsection (3) of this section does not apply:

“(a) When the public interest requires disclosure of
the information.

“(b) When the employee consents to disclosure in
writing.

“(c) When disclosure is necessary for an investiga-
tion by the public body, the Department of Public Safety
Standards and Training or a citizen review body desig-
nated by the public body.

“d) When the public body determines that nondisclo-
sure of the information would adversely affect the confi-
dence of the public in the public body.”

Thus, ORS 181.854(4)(c) anticipates the formation of citizen
review bodies and provides that a public body does not violate
the prohibitions of ORS 181.854(3) by providing information
about the discipline of police officers to a citizen review body
designated by the public body. Nevertheless, ORS 181.854
(4)(a) also permits disclosure of such records to the general
public in instances in which the public interest requires
such disclosure. ORS 181.854 does not provide that, when a
public body creates a citizen review board, only the board is
entitled to information about the discipline of police officers
or that the public is not entitled to information about how

Po 298

the board itself conducts its business. The trial court erred
in determining, as a matter of law, that ORS 181.854(4) and
the creation of the CRB indicate that the public had no cog-
nizable interest in disclosure of the requested CRB records.

‘With regard to the significance of the public’s inter-
est in disclosure, ACLU contends that the Public Records
Law has long been interpreted as protecting the public’s
interest in transparency, and that the evidence it presented
established that that interest was particularly great in this
case. ACLU argues that the evidence demonstrates that
the case was one of high profile that required public over-
sight, both because it involved the police use of force and
because it was the first case that the CRB had designated
as a “Community Impact Case.”

The City responds that the evidence demonstrates
that the records and information available to the public
included a vast amount of information about the Van Ornum
arrest, the departmental investigation, the CRB’s review of
that investigation and the police chief’s adjudication, as well
as the reasons that the CRB concurred with the police chief’s

adjudication. According to the City, because that informa-
tion provided ample insight into how the City conducts its
business, the public’s interest in the disclosure of additional
information is diminished and disclosure is not required.

We agree with the City that the fact that the pub-
lic already had substantial information about police depart-
mental and CRB operations was a proper consideration in
the trial court’s analysis, but we do not agree that it nec-
essarily cuts in favor of confidentiality. On the one hand,
the public’s knowledge of many aspects of those operations
may reduce its need for additional information. On the other
hand, when information is withheld, the public may suspect
that the City has something to hide. Full disclosure may not
be as necessary when substantial disclosure has occurred,
or full disclosure may serve the public’s interest in promot-
ing public trust in governmental action.

2. The public body’s interest in confidentiality

‘We turn now to the City’s competing interest in
confidentiality. On review, the City contends that there

26

are three aspects of that interest that favor confidentiality:
(1) an interest in protecting the privacy of officers whose
alleged misconduct is not substantiated; (2) an interest in
effectively reviewing its own actions and providing disci-
pline, evaluation, and training for its officers; and (3) an
interest in encouraging witness candor and protecting wit-
ness concerns about potential retaliation. We will consider
each in turn, but before we do, we take up ACLU’s thresh-
old argument that the trial court committed legal error in
considering any aspect of the City’s interest in confidenti-
ality because the City did not offer any evidence of any such
interest. We reject that argument. As we have explained,
to establish an interest in disclosure or confidentiality a
party may rely solely on legal arguments. Thus, the City
was permitted to argue from ORS 181.854(8) alone that
public bodies have an interest in maintaining the confi-
dentiality of information about a personnel investigation
of a public safety officer when the investigation does not
result in discipline of the employee. Although the City also
was permitted to make other legal arguments about the
nature of its interest in confidentiality and to adduce evi-
dence of its interests given the particular factual circum-
stances presented, it was not required to do so. The City
was entitled to rest its argument for nondisclosure on that
statute alone, and ACLU’s argument that the trial court
erred in recognizing an interest in confidentiality because
the City did not adduce evidence of that interest is without
merit.

We also reject ACLU’s second argument that
the only interest in confidentiality that ORS 181.854(3)
permits a court to consider is an interest in protecting
the privacy of officers who are not disciplined for alleged
wrongdoing. ACLU contends that that limitation arises
from the fact that the exemption is an exemption for
records of personnel investigations of public safety officers
who are not subjected to discipline. ACLU also observes
that ORS 181.854(6) requires that a public body notify a
public safety officer when requested records include cer-
tain private information such as that kept in a personal
or medical file or certain personal identifying information
such as date of birth, and social security and telephone

Po 295

numbers.® Accordingly, ACLU contends, the sole purpose
of ORS 181.854(3) is to preserve an officer’s privacy.

We agree with both the City and ACLU that ORS
181.854(3) evidences a legislative intent to protect the pri-
vacy of officers whose alleged misconduct is not substan-
tiated. However, we do not agree with ACLU that that is
the only interest that the statute is intended to protect.
Although the statute requires that the public body inform
an employee of a request for certain private and personal
identifying information, it does not prohibit disclosure with-
out the consent of the affected employee. In that regard,
ORS 181.854(3) differs from ORS 181.854(2), which makes
disclosure of an officer’s photograph dependent on the offi-
cer’s consent. ORS 181.854(8) appears to anticipate that the
public body may have an interest in confidentiality that is
separate from the interest of the public employee.

We do agree, however, with another argument that
ACLU makes about the nature of the City’s interest in pro-
tecting its officers’ privacy. ACLU contends that the evi-
dence at trial indicated that that interest was diminished
in this case because the identity of the officers whose con-
duct was in question already had been disclosed. The evi-
dence indeed demonstrates that when the City charged and.
tried Van Ornum for criminal conduct, the identity of the
officers who arrested him and used Tasers in the process
was revealed and extensively discussed. In the public CRB
meetings during which the CRB reviewed the police chief’s
recommendation to dismiss the charges of officer miscon-
duct, the conduct of the officers also was publicly discussed.
The City concedes as much, but contends that an officer’s
interest in privacy “would not evaporate simply because the
officer’s name has been publicized. The report may well con-
tain personal information, beyond the officer’s identity, that
the public has no legitimate interest in knowing.” The City’s
caution is a legitimate one that may affect a court’s analysis

® ORS 181.854(6) requires that a public body notify a public safety officer of
a request for information about the officer that is exempt from disclosure under
ORS 192.501 or ORS 192.502(2) or (3). ORS 192.502(2) provides an exemption for
certain private information such as that kept in a personal or medical file. ORS
192.502(3) provides an exemption to certain personal identifying information
such as dates of birth, and social security and telephone numbers.

6 ee

depending on the facts in a particular case, but, unless such
personal information is implicated, the fact that an officer’s
identity and alleged conduct is already a matter of public
record demonstrates that a public body has a significantly
diminished interest in protecting the officer’s privacy. See
Oregonian Publishing, 144 Or App at 187 (court consid-
ered fact of prior publicity in holding that records must be
disclosed).

The second aspect of its interest in confidentiality on
which the City relies in this court is an interest in having a
“safe, high quality police department, one that can effectively
review its own actions and provide discipline, evaluation,
and training for its officers.” At trial, to establish that inter-
est, the City relied solely on the existence of the CRB and
the fact that the Eugene Code provisions and the protocols
governing the CRB require that internal affairs investiga-
tion files be provided to the CRB “for its confidential review.”
The City was entitled to rely on the legal arguments and evi-
dence and was not required to present, and did not present,
additional evidence about the nature and significance of that
interest as it applied to the requested records. For instance,
the City did not present evidence that the requested records
would reveal information that would compromise the City’s
efforts to discipline, evaluate, or train its employees, that the
existence of confidential CRB review made those tasks more
effective than they would be if disclosure were required, or
that it would be more difficult for the City to engage in those
tasks in the absence of confidentiality. The City’s failure to
present such evidence does not mean that the City did not
meet its burden of production or persuasion, but it does mean
that the trial court could not consider evidence that the City
did not present.’ Thus, although the trial court was correct
to consider the City’s abstract interest in effective discipline,
evaluation, and training, as shown by its creation of the
CRB, it was that abstract interest alone that the trial court
was entitled to weigh.

¥ Ifa party wishes to argue that the disclosure of particular information will
cause harm, but is hesitant to identify that information because its identification
will itself result in harm, the party is entitled to describe the nature of the infor-
mation and harm generally and ask the trial court to examine the information
in camera.

po 297

The trial court was not, however, required to weigh,
and apparently did not weigh, a third aspect of an interest
in confidentiality. On review in this court, the City describes
its interest in confidentiality as including encouraging wit-
ness candor and protecting witness concerns about potential
retaliation. The City contends that the requested records
include numerous interviews of witnesses and demonstrate
that some witnesses were concerned about participating in
the investigation. The immediate problem with the City’s
contention, however, is that the City did not advance a sim-
ilar contention ‘at trial.!! The City did ask the trial court to
conduct an in camera review of the requested records, but it
did not ask the trial court to determine from those records
that the public body has an interest in encouraging witness
candor and addressing potential witness retaliation, and
the trial court’s findings and conclusions do not indicate
that the trial court reviewed the records for that purpose.
When a party fails to inform a trial court of an argument,
we generally will not address it for the first time in this
court. ORAP 5.45(2); see State v. Lotches, 331 Or 455, 492-
93, 17 P3d 1045 (2000) (court refused to consider argument.
that defendant failed to make before trial court). The trial
court therefore did not err in failing to take witness candor
and potential retaliation into consideration in weighing the
competing interests.

B. Balancing the Competing Interests

In summary, the competing interests presented to
the trial court and that the trial court was required to bal-
ance were, on one side, the public’s interest in transparency
of police department and CRB operations, and, on the other
side, the City’s interest in protecting the privacy of its police
officers and in effectively disciplining, evaluating, and train-
ing those officers. As we have indicated, the trial court made
a number of legal errors in identifying and determining the
significance of those interests and we could remand this
case to that court to conduct the balancing in accordance
with this decision. However, because the historical facts are

4 The City also did not assert that the requested records included informa-
tion subject to exemption under ORS 192.502(4), an exemption for certain infor-
mation submitted to a public body in confidence.

|

undisputed and balancing requires only legal analysis, we
are as equipped as is the trial court to take on that task.
Given the evidence presented, we conclude for the following
reasons that, in this instance, the public interest in disclo-
sure predominates.

We begin with the public interest in disclosure and
conclude that the public interest in the transparency of gov-
ernment operations is particularly significant when it comes
to the operation of its police departments and the review of
allegations of officer misconduct. Every day we, the public,
ask police officers to patrol our streets and sidewalks to pro-
tect us and to enforce our laws. Those officers carry weapons
and have immense power. Some members of the public fear
the abuse of that power. By the same token, police officers
are themselves vulnerable. Many of those who drive our
streets and walk our sidewalks also carry weapons. Some
officers fear their use of those weapons and their resistance
to legal authority. When our system of justice works as we
expect it to, officers use their authority legitimately, mem-
bers of the public comply with their instructions, and the
dangers of escalating violence are avoided. But for our sys-
tem to work as we expect it to, the public must trust that
officers are using their authority legitimately, and officers
must trust that the people they stop will respond appropri-
ately. Without mutual trust, the police cannot do their work
effectively and the public cannot feel safe.

One way to promote that necessary mutual trust is
to make police practices and procedures transparent and to
make complaints about police misconduct and the discipline
that is or is not meted out open to public inspection. It is
important for the public to know when the police overstep;
it is important for the public to know when they do not. And
it is important that the basis for differing results be known
and understood. Some members of the public are suspicious.
Tragic wrongs have not been addressed. Some members
of the police force feel unfairly accused. Too few members
of the public really appreciate what it takes to do the jobs
that police officers do and the everyday dangers that they
bravely face. As the trial court in this case said, it is laud-
able that the City created the CRB to review police depart-
ment operations and to give the public a role in overseeing

Po 299

its disciplinary processes. But, when it comes to complaints
about the use of force and the review of those complaints,
the public interest in oversight is particularly strong. See
Oregonian Publishing, 144 Or App at 187 (concluding that
public interest particularly strong where public employees
accused of misuse and theft of public property).

The evidence in this case established that the pub-
lic had a particular interest in whether the police engaged
in excessive force, and this case was the first case that the
CRB denominated as a “Community Impact Case.” Whether
the police use of force was within city policy and whether the
CRB fulfilled its responsibility to review the police chief’s
recommendations with rigor and without bias were import-
ant matters to the public. The people’s right to inspect public
records is “fundamental,” MacEwan, 226 Or at 46, and in
the circumstances present here, the public interest in trans-
parency carries significant weight.

In contrast, the interests in confidentiality estab-
lished at trial in this case were not equally fundamental.
The public body’s interest in protecting the privacy of offi-
cers whose conduct was questioned was substantially dimin-
ished because the identity of those officers and their alleged
misconduct had already been made a matter of public record.
The City established that it had created the CRB to enable
it to confidentially review allegations of officer misconduct,
but it did not proffer evidence that public inspection of docu-
ments considered by the CRB would affect its ability to effec-
tively discipline, evaluate, or train its officers. We consider
it significant that, when asked for his reasons for declining
to disclose the requested information, the police chief did
not identify any harm that would accrue to city officers or
the City if it were required to disclose the requested infor-
mation. Instead, the police chief testified only that he had
declined to disclose the information on the advice of counsel.
The City made no showing that disclosure posed a risk of
harm to its employees or operations, and it is not our role to
decide whether the public’s interest in monitoring the pub-
lic’s business may be satisfied with some quantum of infor-
mation less than full disclosure. “Our decisions reflect the
preference for a policy of governmental openness in Oregon.”

200

Jordan, 308 Or at 438. On this record, we conclude that the
public interest in transparency requires disclosure of the
requested documents.

We do, however, harbor a remaining concern about
whether immediate release of the requested documents
could violate individual rights to privacy. In this case, the
City took the position at trial that the requested records
were exempt from disclosure in their entirety, and the trial
court agreed. Perhaps for that reason, the City asserted
only generally that its officers had an interest in privacy; it
did not assert more particularly that disclosure of certain
specific material in those records would violate a particular
individual’s right to privacy or be exempt under another pro-
vision of the Public Records Law intended to protect individ-
ual privacy rights. For instance, ORS 192.502(2) exempts
from disclosure “[i]nformation of a personal nature such as
but not limited to that kept in a personal, medical or similar
file, if public disclosure would constitute an unreasonable
invasion of privacy, unless the public interest *** requires
disclosure.” And ORS 192.502(3) exempts certain personal
identifying information such as date of birth, and social
security and telephone numbers unless the “public interest
requires disclosure in a particular instance.”

We are cognizant that disclosure of requested records
is not an all-or-nothing proposition. Gray v. Salem-Keizer
School District, 189 Or App 556, 566, 912 P2d 938 (1996).
See ORS 192.505 (requiring public body to separate material
that is exempt from disclosure from that that is not exempt
and make the nonexempt material available for inspection).
Where there are discrete parts of requested documents that
reveal private or personal identifying information unrelated
to the allegations of misconduct at issue, a court may order
that those discrete parts remain confidential. See Jordan, 308
Or at 442-43 (party seeking disclosure failed to meet burden
to overcome entitlement to exemption where information was
of a personal nature and disclosure would constitute unrea-
sonable invasion of privacy). For that reason, we remand this
case to the circuit court to give the City an opportunity to
identify any private or personal identifying information and
request that the court maintain its confidentiality.

po 301

If the City finds that the requested documents
include such information, we expect that the City will file a
request for redaction in the trial court describing the gen-
eral nature of the information that the City seeks to have
redacted and serve that request on ACLU. We also expect
that the City will provide the trial court with a copy of the
requested documents specifically indicating its requested
redactions for the court’s in camera review. After afford-
ing ACLU an opportunity to object to the City’s request to
redact the specified information, and, on request of either
party, holding a hearing, the trial court may order redac-
tion.” Except as so ordered, the trial court shall then enter
an order requiring the City to disclose the requested docu-
ments in their entirety.

The decision of the Court of Appeals is reversed.
The judgment of the circuit court is reversed, and the case
is remanded to the circuit court for further proceedings.

» The trial court is not required to order redaction. On request, the court
must weigh competing interests that the parties identify. We note in that regard
that the exemptions provided by ORS 192.502(2) and (3) are conditional and may
not apply if the public interest requires disclosure.

302

Argued and submitted January 12, decision of Court of Appeals reversed,
judgment of circuit court reversed, and case remanded to circuit court for
further proceedings September 22, 2016

STATE OF OREGON,
Respondent on Review,
v.

ROBERT DARNELL BOYD,
Petitioner on Review.

(CC 201026332; CA A151157; SC S063260)
380 P3d 941

Laura A. Frikert, Deputy Public Defender, Salem, argued
the cause and filed the brief for petitioner on review. With

Po 303

her on the brief was Ernest G. Lannet, Chief Defender, Office
of Public Defense Services.

Rebecca M. Auten, Assistant Attorney General, Salem,
argued the cause and filed the brief for respondent on review.
With her on the brief were Ellen F. Rosenblum, Attorney
General, and Paul L. Smith, Deputy Solicitor General.

Before Balmer, Chief Justice, and Kistler, Walters,
Landau, Baldwin, and Brewer, Justices, and Garrett, Justice
pro tempore.**

LANDAU, J.

The decision of the Court of Appeals is reversed. The
judgment of the circuit court is reversed, and the case is
remanded to the circuit court for further proceedings.

** Nakamoto, J., did not participate in the consideration or decision of this
case.

304 |_|

LANDAU, J.

The issue in this case is whether police unlawfully
interrogated a criminal defendant after he invoked his rights
to counsel and against compelled self-incrimination, guar-
anteed by Article I, section 12, of the Oregon Constitution
and the Fifth Amendment to the United States Constitution.
The state argues that defendant had asked a “confusing”
question and that police responded by seeking “clarifica-
tion,” which did not amount to unconstitutional interroga-
tion. Defendant argues that he had merely asked why he had
been taken into custody and whether he could make a phone
call, that there was nothing particularly confusing about
the requests, and that police responded with questions that
were reasonably likely to—and in fact did—elicit incrimi-
nating evidence. As a result, he contends, that incriminat-
ing evidence should have been suppressed. The trial court
agreed with the state and denied defendant’s motion to sup-
press. The Court of Appeals affirmed. State v. Boyd, 270 Or
App 41, 346 P3d 626 (2015). For the reasons that follow, we
conclude that defendant is correct that the police unconsti-
tutionally interrogated him, in violation of Article I, section
12.

The relevant facts are not in dispute. Defendant’s
girlfriend, Archibald, was found dead on the street, the vic-
tim of a severe beating. Witnesses saw her on the ground
and saw defendant running away from the scene. A few min-
utes later, police arrested defendant, who had Archibald’s
blood on his hands, shoes, and pants. The arresting officers
advised defendant of his constitutional rights and ques-
tioned him. Defendant told the police that he was not sure
what happened. He saw that his hand was bleeding and
“figured” that he had been in a fight or had punched a car
window. He said that he recalled that Archibald had become
angry with him because she thought he had pushed her and
that she had hit him several times. But he denied hitting
her, insisting that he would never hit a woman. He repeat-
edly asked about Archibald’s welfare.

The officers took defendant to the police station.
There, Detective Myers questioned him while Sergeant
Lewis observed. Defendant again said that he could not

pe 305

remember what had happened and that, given the injury
to his hand, he must have “either punched somebody’s car
or punched somebody.” He said that he knew that he “was
pissed off, because I was arguing with my girl.” He then
stated that “I don’t know why I’m here, so—please don’t talk
to me anymore on that aspect until you bring me a lawyer.”

Myers told defendant to change into jail clothes.
As defendant did that, he asked Myers why he had been
arrested. Myers told him that Archibald was dead and that
he was being arrested for her murder. Defendant became
agitated, expressing disbelief:

“A: Whoa, whoa, whoa, what the fuck you mean, my
girlfriend is dead, man?

“Q: She’s dead.

“A: No, no, no, no—Ally’s at home.
“Q: Change your clothes. Let’s go.
“A: Ally’s at home.

Have a seat and change your clothes. That’s all
you've } got to do. Relax and change your clothes.

“A: What you mean, my girlfriend’s dead, man? That’s
not, no, no, no, we just had an argument. I left her—my
girl ain’t dead. My girl is drunk at home with the baby. I
don’t—fuck what y’all is saying, and why the fuck are all of
you mother-fuckers gathering up on me?

“Q: We are not gathering up on you. We'd just like you
to change your clothes, sit down and we'll get through the
process.

“A: All right, but my girl ain’t dead. My baby is at
home, peaceful. No, I refuse to even entertain that thought.
Fuck you, you can kiss my ass. My baby’s at home with the
baby. She’s at home where she ought to. No, hell no, fuck
you, you can kiss my ass. No, my baby is fine. I don’t give a
fuck what y’all—my baby is at home with Elija. I wouldn’t
give a fuck what y’all talking about. Fuck that shit.

“Q: You want to slide your pants over here?

“A: Man, listen. Fuck that, my baby ain’t dead. My
baby is at home with the baby. [inaudible] No, no, no—

PL

306 je

“Q: ‘You just sit here until officers come to take pos-
session of your things. Can someone transport him? Put
your hands behind your back. I'll try hard not to finaudi-
ble] them too hard. I know you got a bum finger.

“A: Tm not about to fight you because my baby ain’t
dead [inaudible] I don’t know what the fuck happened.
tonight, but my baby ain’t dead.”

Lewis observed the foregoing interchange between defen-
dant and Myers.

About seven hours later, Lewis learned that defen-
dant had been transferred to a holding cell with a sink
and running water. Concerned that defendant could have
washed his hands and destroyed potential evidence, he
went to defendant’s cell. He checked defendant’s hands and,
apparently satisfied that defendant had not washed them,
turned to leave. Defendant spoke to Lewis, asking, “Is any-
body going to tell me why I’m here? I need to call my baby
girl because she’s going to wonder where I’m at.” As Lewis
later recalled in testimony at a suppression hearing, the fol-
lowing exchange then occurred:

“A: Lasked him if he didn’t remember Detective Myers
telling him why he was here, and he replied, ‘no, I don’t
remember nothing about that or talking to nobody.’

“Q: Then what?

“A: I asked him, when he was talking about his baby
girl, if he was referring to *** Archibald and he said that
he was, and then I just told him that I was present when
Detective Myers told him that she was dead and he was
under arrest for killing her, and he got real agitated and
started breathing heavy and clenching his fists and told
me, ‘no, no, she ain’t dead, you’re lying’ and then he tells
me ‘I want to talk to the detective that you said I talked
to’”

Lewis went to get Myers, who arrived at defendant’s
holding cell within minutes. Once there, Myers reminded
defendant that he had earlier asked to speak with a law-
yer and asked him if he still wanted one. Defendant said
that he did not want a lawyer but wanted to talk to Myers
about what had happened. Myers advised defendant of his
Miranda rights and again asked if defendant wished to

Po 307

speak to him without a lawyer present. Defendant said, yes.
In the ensuing interview, defendant described an altercation
with Archibald during which she had hit him repeatedly,
making him angry so that “he felt like bashing her fucking
head.” He recalled that he had pinned Archibald against a
van and then hit her once, causing her to fall and hit her
head on the ground. Defendant asserted that, after hitting
Archibald, he had “blacked out and just took off walking.”
When Myers told defendant that Archibald’s injuries were
inconsistent with a single punch, defendant requested an
attorney, and the interview ended.

The state charged defendant with Archibald’s mur-
der. Before trial, defendant moved to suppress his state-
ments to Myers, arguing that they were obtained in viola-
tion of his right against compelled selfincrimination under
Article I, section 12, of the Oregon Constitution and the
Fifth Amendment to the United States Constitution. He
argued that the police had “either circumvented or coerced”
him into making those statements in spite of his explicit
invocation of his right to speak to an attorney. The trial
court denied the motion, holding that defendant had know-
ingly and voluntarily waived his right to counsel. The trial
court explained that the interview with Myers had occurred
“only upon defendant’s request to have further contact with
*** Myers” and only after Myers readministered Miranda
warnings.

During the trial to the court, the state introduced
evidence of defendant’s statements to Myers, in particular,
defendant’s statement about being angry with Archibald
and that he “felt like bashing her fucking head.” Defendant
did not dispute that he had killed Archibald. His defense
was that he lacked the requisite culpable mental state.
In support of that defense, he took the stand and testified
that he had never intended to hurt Archibald, that he had
been unaware of punching her at the time, and that he did
not remember doing so after the fact. In rebuttal, the state
presented the testimony of a psychological expert who had
relied in part on defendant’s statements to Myers to reach
his conclusion that defendant was malingering. The trial
court convicted defendant of murder, ORS 163.115, and sen-
tenced. him to imprisonment for life.

308 ji

On appeal, defendant argued that the trial court
erred in denying his motion to suppress his statements to
Myers after he invoked his right to counsel, and that the
error was prejudicial. He also asserted an unpreserved.
argument that the trial court should have suppressed the
statements that he made to the police before he invoked his
right to counsel, on the ground that the advice of his rights
when he initially was contacted by the police was defective.

The Court of Appeals affirmed. The court concluded
that, because Lewis’s responses to defendant’s questions
were not of a sort that the officer should have known would
be likely to produce an incriminating statement from defen-
dant, it was not a reinitiation of interrogation. Boyd, 270 Or
App at 47. The court explained that defendant himself had
reinitiated interrogation, by “request [ing] to speak to Myers,
indicating his desire for a generalized discussion about the
investigation.” Id. at 48. The court concluded that, in light
of Myers’s readministration of Miranda rights, the passage
of time between defendant’s invocation and his profession of
a wish to speak to Myers without a lawyer, and the absence
of any evidence of mental impairment, the trial court had
not erred in finding that defendant had knowingly and vol-
untarily waived his right to be questioned only in the pres-
ence of counsel. Jd. Finally, the court rejected defendant’s
unpreserved contention that the initial advice of rights was
inadequate without discussion. Id. at 43.

On review before this court, defendant argues that
he did not reinitiate interrogation; rather, he asked rou-
tine questions associated with being taken into custody. In
defendant’s view, it was the police that reinitiated interro-
gation, when Lewis questioned him about his lack of mem-
ory about the earlier conversation concerning the assault
on Archibald. Defendant asserts that, once he asserted his
right to refrain from speaking with police without counsel
present, police were prohibited by Article I, section 12, and
the Fifth Amendment from asking any direct questions in
the absence of a waiver of that right. At the least, defendant
contends, police were forbidden to ask questions that were
likely to elicit incriminating information. In this case, he
argues, the questions that Lewis posed to him were likely

pi 309

to do just that, given the fact that defendant already had
denied remembering the assault. Defendant also reprises his
unpreserved contention that, at all events, the initial advice
of rights that he received was constitutionally inadequate.

The state argues that defendant is wrong in assert-
ing that Article I, section 12, forecloses questioning of any
sort once a defendant has invoked a right to counsel. In the
state’s view, all that is prohibited is asking questions that
are likely to elicit incriminating information from the defen-
dant. In this case, the state contends, defendant’s questions
about why he was in custody were “confusing,” given that
defendant had been told several hours earlier why he had
been arrested. In light of the confusing nature of defen-
dant’s questions, the state argues, it was lawful for Lewis to
ask “clarifying” questions that were not reasonably likely to
elicit an incriminating response. In any event, the state con-
tends, the incriminating information at issue—defendant’s
statement that he intended to beat Archibald—derived from
Myers’s questioning, not Lewis’s. And that occurred only
after defendant expressly waived his constitutional rights
and demanded to speak to the officer.

Defendant replies that, although he did demand to
speak with Myers, that demand was a direct result of Lewis’s
interrogation, before any waiver of constitutional rights.

At the outset, we reject without discussion defen-
dant’s contention that the initial advice of rights was con-
stitutionally inadequate. The parties’ remaining conten-
tions are rooted both in Article I, section 12, of the Oregon.
Constitution and in the Fifth Amendment. We begin with
defendant’s arguments under Article I, section 12. State v.
Kennedy, 295 Or 260, 262, 666 P2d 1316 (1983) (court gen-
erally considers state law questions before reaching federal
constitutional claims). But, because this court’s case law
under that section of the state constitution has relied heavily
on federal Fifth Amendment doctrine, we precede our state
constitutional analysis with a brief summary of federal law
to provide some context.

The Fifth Amendment to the United States Consti-
tution provides that, “[n]o person shall *** be compelled

310 |__|

in any criminal case to be a witness against himself.” In
Edwards v. Arizona, 451 US 477, 484-85, 101 S Ct 1880, 68
L Ed 2d 378 (1981), the United States Supreme Court held
that, once a suspect invokes his or her Fifth Amendment
rights, there can be no “further interrogation by the author-
ities until counsel has been made available *** unless the
accused *** initiates further communication, exchanges, or
conversations with the police.” Left undefined in Edwards
were what the Court meant by an accused “initiat[ing]” fur-
ther communication, as well as the nature of the “interroga-
tion” that must cease until the accused does so.

The Court addressed the first issue in Oregon v.
Bradshaw, 462 US 1039, 103 S Ct 2830, 77 L Ed 2d 405
(1988). In that case, the defendant asked a police officer on
the way to jail, “Well, what is going to happen to me now?”
A plurality of the Court concluded that the defendant, in
posing that question, had “initiated” further communication
with the police for Fifth Amendment purposes. In reaching
that conclusion, the Court distinguished the defendant’s
questions from what it described as “routine inquiries”:

“There are some inquiries, such as a request for a drink of
water or a request to use a telephone, that are so routine
that they cannot be fairly said to represent a desire on the
part of an accused to open a more generalized discussion
relating directly or indirectly to the investigation. Such
inquiries or statements, by either an accused or a police
officer, relating to routine incidents of the custodial rela-
tionship, will not generally ‘initiate’ a conversation in the
sense in which that word was used in Edwards.”

Id. at 1045. The four justices who dissented did not take
issue with the plurality’s definition of what amounted to
“initiating” a conversation; rather they disputed the plural-
ity’s application of that test to the particular facts, conclud-
ing that the defendant’s question did not indicate a desire
for a generalized discussion about the investigation. Id. at
1055-56 (Marshall, J., dissenting).

The Court addressed the second issue in Rhode
Island v. Innis, 446 US 291, 100 S Ct 1682, 64 L Ed 2d 297
(1980). In that case, the defendant was arrested for murder

Po 311

and advised of his Miranda rights, after which he asked
to speak with a lawyer. On the way to the police station,
two police officers who accompanied the defendant did not
question him. They did talk among themselves, noting that
(among other things) a child from a school for handicapped
children near where the murder had occurred might find
the gun with which the murder victim had been shot and
accidentally shoot someone. Hearing the conversation, the
defendant told the police to return to the scene of his arrest,
so that he could show them where he had left the gun. Jd. at
293-95. Following the defendant’s arrest for the murder, he
moved to suppress the gun and his statements to the police,
on the ground that the evidence had been obtained in viola-
tion of his Fifth Amendment rights. The trial court denied
the motion, but the Rhode Island Supreme Court reversed.
Id. at 295-97.

The United States Supreme Court vacated the
decision of the Rhode Island Supreme Court. A majority of
the Court concluded that, for Fifth Amendment purposes,
“interrogation” refers “not only to express questioning, but
also to any words or actions on the part of the police ***
that [they] should know are reasonably likely to elicit an
incriminating response.” Jd. at 301. That test, the majority
said, “focuses primarily upon the perceptions of the suspect,
rather than the intent of the police.” Id. Applying that test,
the majority concluded that the police conversation was not
of a sort that the officers should have known was likely to
elicit an incriminating response. Id. at 303. The majority
noted that there was no evidence that the officers knew that
defendant was “peculiarly susceptible to an appeal to his
conscience concerning the safety of handicapped children.”
Id. Three justices dissented, two of whom agreed with the
majority’s definition of what constituted “interrogation,” but
disputed its application of the test to the facts of that case.
Id. at 305-06 (Marshall, J., dissenting).

The Innis test was ambiguous, to say the least.
In particular, it was not clear whether “interrogation”
included any and all direct questioning on the part of
police or only questioning that police should have known
was likely to elicit an incriminating response. Portions of

312 |__|

the Court’s opinion in Innis appeared to support either
interpretation.*

In Pennsylvania v. Muniz, 496 US 582, 110 S Ct
2638, 110 L Ed 2d 528 (1990), the court returned to the
issue of what constitutes Fifth Amendment “interrogation.”
The Court was confronted with an argument that certain
questions—those that are routine in the booking process—
do not constitute interrogation because they are not intended
to elicit information for investigative purposes. A plurality
of the Court rejected that argument, but held that replies
to such questions are admissible under a “routine book-
ing exception” to the Miranda rule. Id. at 600-02. But the
same plurality suggested that certain other questions—
specifically, questions about whether a suspect in custody
understood the instructions he had been given about a
breathalyzer test and was willing to submit to the test—did
not constitute interrogation within the meaning of Miranda
at least in part because those questions were “not likely to
be perceived as calling for any incriminating response.” Id.
at 605. The Court thus appeared to adopt the view—without
expressly addressing the issue, to be sure—that “interroga-
tion” does not include all forms of direct questioning.

Not surprisingly, federal circuit courts have split
on the issue of what constitutes “interrogation.” A few
have held that, for Fifth Amendment purposes, “interro-
gation” includes any form of direct or express police ques-
tioning, regardless of content. See, e.g., Smiley v. Thurmer,
542 F3d 574, 582 (7th Cir 2008) (“Innis does nothing more
than define when police practices, other than express ques-
tioning, constitute interrogation.”) (Emphasis in original.);
United States v. Montgomery, 714 F2d 201, 202 (1st Cir

1 ‘The ambiguities of Innis go much further than that. It is not entirely clear,
for example, whether the Innis test imposes an objective or a subjective test, or
whether it focuses on perceptions of the suspect or the officer. Once again, the
opinion itself provides something for everyone, leading to splits among lower
courts in every imaginable direction. See generally Kyle C. Welch, Asking the
Scary Question: What Is the Correct Understanding of “Interrogation” Under
Rhode Island v. Innis?, 50 Cal W L Rev 238, 256 (2014) (describing “chaotic
outcomes in cases where interrogation was the principal issue”); Alexander S.
Helderman, Revisiting Rhode Island v. Innis: Offering a New Interpretation of the
Interrogation Test, 33 Creighton L Rey 729, 788 (2000) (“There is little consis-
tency among the federal circuit courts’ interpretation of the Innis test.”).

Po 318

1983) (“Since the questioning here was express, we have no
occasion to go farther. This was custodial interrogation.”).
Most hold that direct questioning, by itself, is not enough to
amount to “interrogation” for Fifth Amendment purposes.
See, e.g., United States v. Booth, 669 F2d 1231, 1237 (9th Cir
1981) (“We hold, therefore, that custodial questioning consti-
tutes interrogation whenever, under all the circumstances
involved in a given case, the questions are reasonably likely
to elicit an incriminating response from the subject.”).

Article I, section 12, of the Oregon Constitution
is phrased nearly identically to the Fifth Amendment in
providing that, “[nlo person shall *** be compelled in any
criminal prosecution to testify against himself.” In conse-
quence, this court has found case law applying the Fifth
Amendment guarantee to be useful in construing the simi-
larly worded guarantee of Article I, section 12.

In State v. Kell, 303 Or 89, 95-100, 734 P2d 334
(1987), this court concluded that the rule in Edwards
that police must cease interrogation once a defendant has
invoked his Fifth Amendment rights is “equally applicable”
to Article I, section 12. See also State v. Isom, 306 Or 587,
598, 761 P2d 524 (1988) (“Upon request for counsel, ques-
tioning not only ‘should’ but must cease.”).

In State v. Meade, 327 Or 335, 963 P2d 656 (1998),
the court concluded that police could engage in further
interrogation if a defendant “initiated” further discussion.
about the investigation into whether the defendant had com-
mitted a criminal offense. Id. at 340. The court concluded
that whether a defendant “initiated” such further discussion
depended on whether the defendant had shown that he or
she “was willing to enter into a generalized discussion of
the substance of the charges without the assistance of coun-
sel.” Id. That particular formulation of the test borrowed
directly from the United States Supreme Court’s decisions
in Bradshaw and Edwards, although the court did not men-
tion those cases by name.” See also State v. McAnulty, 356
Or 432, 456, 338 P3d 653 (2014), cert den,___ US __, 186

2 In fact, the majority’s borrowing from Fifth Amendment doctrine was one
of the issues on which it and the dissent parted company. Id. at 351-52 (Durham,
J, dissenting).

314 |

S Ct 34, 193 L Ed 2d 48 (2015) (Defendant “re-initiated”
further conversation with authorities because her comments
“expressed a willingness to continue a discussion about the
investigation.”).

This court likewise borrowed from federal case law
in determining what constitutes “interrogation” for Article I,
section 12, purposes. In State v. Scott, 343 Or 195, 166 P3d
528 (2007), the defendant was arrested on suspicion of mur-
der, advised of his Miranda rights, and transported to the
police station, where he was placed in an interview room.
When two officers entered the room, the defendant said,
“I would appreciate a lawyer present before I say anymore
to you guys.” As one of the officers turned on a recording
device, defendant said two more times that he wanted to see
a lawyer. The officer replied that he wanted to review the
defendant’s rights with him first and proceeded to reiter-
ate his Miranda rights. The officer then asked whether the
defendant had any questions about those rights, to which
the defendant replied that he did not and that, because of
what he had “seen on TV,” he thought he needed a lawyer.
The officer responded with a question: “You saw something
on TV?” The defendant explained that he had seen a report
that he had “killed somebody.” The officer then replied,
“Saying that you killed somebody, huh?,” after which he
waited eight to 10 seconds before asking whether defendant
wanted a particular lawyer. The defendant said that he “just
want[ed] one here.” The officer asked whether there was a
particular lawyer that the defendant had worked with in the
past, at which point the defendant stated that he no longer
cared about a lawyer and that he was ready to speak with
the officers. Id. at 198.

The defendant then made incriminating statements
to the officers, which he later sought to suppress on the
ground that the police did not cease interrogating him after
he had invoked his right to counsel under Article I, section
12. The trial court agreed and suppressed the statements,
and this court affirmed. At the heart of the parties’ argu-
ments on appeal was the meaning of the term “interroga-
tion” for Article I, section 12, purposes. Both the defendant
and the state tailored those arguments to the United States

Po 315

Supreme Court's decision in Innis. This court responded by
explicitly relying on that Fifth Amendment decision:

“This court has emphasized that the constitutional pro-
tections afforded to suspects and criminal defendants set
out in the Oregon Constitution require an analysis inde-
pendent of similar protections set out in the United States
Constitution. Here, however, the question does not concern
the construction of any term set out in Article I, section
12; instead, our task involves defining a familiar term—
‘nterrogation’—that both this court and the United States
Supreme Court repeatedly have used to delineate situa-
tions in which Miranda-type warnings are required or
Miranda-type rights are implicated under either the state
or federal constitutions. Additionally, neither party con-
tends, in the context of each one’s arguments in this case,
that the concept of interrogation carries any meaning dif-
ferent from the one that the United States Supreme Court
articulated in Innis. In view of those considerations, we
shall apply the Court’s definition of the term interrogation,
for purposes of Miranda’s Fifth Amendment requirements,
to our analysis of defendant’s Article I, section 12, rights
at issue here.”

Id. at 203. This court noted that whether that questioning
amounted to “interrogation” for Article I, section 12, pur-
poses depended on whether that questioning was of a sort
that “the police should know is likely to elicit an incriminat-
ing response,” taking into account “both the substance of the
questions posed to [the] defendant and the manner in which
those questions were asked.” Id.

Turning to the particular police questions at issue,
the court noted that the officer’s questioning about what the
defendant had seen on television was aimed at the very rea-
son for the defendant’s arrest for murder and that “any fur-
ther discussion of that broadcast would serve only to prolong
a discussion that [the] defendant had tried to terminate
and, indeed would be reasonably likely to elicit some type of
incriminating response.” Id. at 203-04. The court observed
that the officer’s long pause after asking about the televi-
sion broadcast—“Saying that you killed somebody, huh?”—
provided the defendant “an invitation, and an opportunity,
to provide an incriminating response.” Id. at 204.

316 |__|

The court’s analysis in Scott appears to dispose
of defendant’s argument in this case that any direct ques-
tioning by police after an invocation of Article I, section
12, rights amounts to “interrogation,” as a matter of law.
The court concluded that the officer’s questioning in that
case amounted to “interrogation” for Article I, section 12,
purposes not merely because it was direct questioning, but
because of “the substance of the questions posed to [the]
defendant and the manner in which those questions were
asked.” Id. at 203. Moreover, the court read Innis to require
the application of an essentially objective test—namely,
whether the nature of the police questioning was such that it
was reasonably “likely to elicit an incriminating response.”

Defendant insists that, although the court in Scott
did apply the “likely to elicit incriminating evidence” test
to direct questioning, the case “does not control the resolu-
tion of this case” because no one in Scott made the precise
argument that he is making and because failing to con-
clude that direct questioning of any sort is “interrogation”
is inconsistent with Innis. We are not persuaded by either
argument.

It is true that the court qualified its decision in Scott
ith the observation that no one in that case had suggested
hat a different test should be applied. In subsequent cases,
hough, this court has cited Scott for the same test, without
ny such qualifications. See, eg., State v. Vondehn, 348 Or
62, 466 n 3, 236 P3d 691 (2010) (noting that whether police
juestions constitute “interrogation” for Article I, section 12,
urposes depends on whether they are of a kind that “police
hould know [is] reasonably likely to elicit an incriminating
response”).

aad

ay QspPp

To the extent that any ambiguity remains about the
test for determining whether “interrogation” has occurred
we conclude in this case that Scott correctly stated the test
for the following reasons. First, whether Scott was cor-
rectly decided is not necessarily determined by reference to
whether it properly applied Innis. As this court often has
observed, while it may from time to time borrow a doctrine
or concept from federal court decisions when it interprets or

Po 317

applies the state constitution, the court is doing so “because
it finds the views there expressed persuasive, not because it
considers itself bound to do so by its understanding of fed-
eral doctrines.” Kennedy, 295 Or at 267.

Second, in any event, Scott is not inconsistent
with Innis or later United States Supreme Court case law.
We noted earlier that Innis itself is not a model of doctri-
nal clarity; the Court left notoriously unclear whether its
“likely to elicit an incriminating response” test applied
to direct questioning. The Court’s later opinion in Muniz,
however, strongly suggests that the Innis test does apply to
direct questioning. The Court held that some forms of direct
questioning—for example, questions about whether a per-
son being asked to undergo sobriety testing understands the
instructions and is willing to submit to the testing—do not
constitute “interrogation” for Fifth Amendment purposes at
least in part because such questions are not likely to elicit
incriminating responses. 496 US at 605.

Third and finally, aside from the fact that Scott
appears consistent with post-Innis federal case law, its
holding makes sense on its own terms. The notion that
all forms of direct questioning constitute “interrogation”
for constitutional purposes is unrealistic. Some types of
questions—“Would you like a glass of water?”—are often
innocuous and do not implicate the constitutional con-
cerns that form the underpinnings of Article I, section 12,
and Fifth Amendment rights. See generally LaFave et al,
2 Criminal Procedure 854-55 (4th ed 2015) (cases holding
that some “innocuous” questions do not implicate Miranda
are “certainly correct”). The heart of both state and federal
constitutional guarantees, after all, is protecting against
compelled incrimination. See generally State v. Davis, 350
Or 440, 455-57, 256 P3d 1075 (2011) (reviewing history and
prior case law regarding constitutional guarantees of “com-
pelled self-incrimination”). In that regard, we find persua-
sive the discussion of the issue by the Court of Appeals for
the Ninth Circuit in Booth. Holding that “interrogation” con-
sists of not all police questioning, but only questioning that
is reasonably likely to produce an incriminating response,
the court explained:

318 |

“[Wle believe that the reasoning supporting the Court’s
decision [in Innis], indeed, the very purpose behind Miranda
itself, compels the conclusion that not every question posed
in a custodial setting is equivalent to ‘interrogation’

(ee a a

««** Certainly not every question is an interrogation.
Many sorts of questions do not, by their very nature, involve
the psychological intimidation that Miranda is designed
to prevent. A definition of interrogation that included any
question posed by a police officer would be broader than
that required to implement the policy of Miranda itself.”

Booth, 669 F2d at 1237.

With the foregoing legal principles in mind, we turn
to the issues in this case. As we noted, once a suspect has
invoked the rights to remain silent and to counsel under
Article I, section 12, police must immediately cease interro-
gation unless the suspect initiates further conversation with
the police. Isom, 306 Or at 593. In this case, then, the ques-
tions are (1) whether defendant himself initiated further
conversation with the police and, if not, (2) whether police
continued unlawfully to interrogate him.

The Court of Appeals answered the first question in
the negative. Boyd, 270 Or App at 47. On review before this
court, defendant contends that the Court of Appeals was
correct in that respect. The state contends that “defendant
initiated a conversation” with Lewis by asking, “Is anybody
going to tell me why I’m here, I need to call my baby girl
because she’s going to wonder where I’m at?”

We conclude that the Court of Appeals was correct.
In arguing that defendant “initiated” further conversation
with the police, the state focuses on whether any police
interrogation that occurred was in any way prompted by
something that defendant said first. That, however, is not
the test. The test is whether a defendant’s questions or
statements indicate that he or she “was willing to enter into
a generalized discussion of the substance of the charges
without the assistance of counsel.” Meade, 327 Or at 340. A
defendant merely asking why he or she has been taken into
custody does not satisfy that test, and the state does not
appear to contend otherwise.

pT 319

The Court of Appeals also answered the second
question in the negative. The court explained that, when
Lewis asked defendant whether he recalled having a con-
versation with Myers about defendant having killed his
girlfriend and whether defendant had referred to his girl-
’ friend as his “baby girl,” those questions were not of such
a nature that Lewis should have known they would likely
elicit an incriminating response from defendant. Boyd, 270
Or App at 47-48. On review, defendant argues that the court
erred in so concluding. The state, meanwhile, argues that
the court correctly determined that Lewis’s questions were
merely “follow-up” questions intended to clarify the nature
of defendant’s inquiries.

We conclude that defendant is correct that the Court
of Appeals erred. As this court explained in Scott, whether
police questioning constitutes unlawful “interrogation” for
Article I, section 12, purposes depends on whether “the sub-
stance of the questions posed to [the] defendant and the
manner in which those questions were asked” demonstrated
that they were “likely to elicit some type of incriminating
response.” 343 Or at 203-04. In this case, when defendant
asked why he had been taken into custody, Lewis responded
with questions of his own about whether defendant was refer-
ring to his girlfriend Archibald and whether he recalled the
earlier conversation with Myers, when Myers told defendant
that Archibald was dead. It should be recalled that Lewis
was present when defendant had that prior conversation
with Myers, and he was aware of defendant’s response to
that conversation. Specifically, Lewis knew that defendant
had become agitated when told that his girlfriend had been
killed, that he had disclaimed any memory of an altercation
with his girlfriend, and that he had claimed not to remem-
ber how his hand had been hurt. Lewis knew that defendant
had denied knowing that his girlfriend was dead and that, in
fact, defendant had asserted at least six times that he did not
believe that his girlfriend was dead. In other words, Lewis
was well aware that defendant’s memory of the assault was
very much in issue and that posing the questions that he
did was likely to agitate him. In that context, Lewis should.
have known that any further questioning about defendant’s
memory concerning the assault or the investigation into the

320 a

assault was reasonably likely to elicit from defendant an
incriminating response, either in cornering defendant into
a possibly far-fetched theory of the defense or in provoking
him to make potentially inconsistent statements about his
memory of the events that later could be used to impeach
him.

The state argues in the alternative that, even if
Lewis’s questions constituted unlawful interrogation, those
questions did not produce any incriminating information.
According to the state, the incriminating statements that
defendant sought to suppress occurred only after defendant
told Lewis that he wanted to talk to Myers. Citing State v.
Acremant, 338 Or 302, 108 P3d 1189, cert den, 546 US 864
(2005), the state argues that, even when an officer disre-
gards a suspect’s invocation of Article I, section 12, rights,
the suspect may later validly waive his or her rights and
speak with police so long as the defendant’s later renewal of
contact with police was not a product of the earlier unlawful
interrogation.

We are not persuaded by the state’s alternative argu-
ment. In Acremant, the defendant was arrested in Stockton,
California, on suspicion of having committed two murders in
Oregon. He was transported to the local police station. Two
Oregon police detectives met with the defendant, informed
him of his Miranda rights, and confirmed that the defen-
dant understood those rights. Id. at 317-18. The defendant
spoke with the detectives for a short time, but then invoked
his right to counsel. The Oregon detectives said that they
were “disappointed” that the defendant had elected to end
the interview, that they were interested in hearing his side
of the story, and that they were curious about his motive for
the murders. There followed an approximately 13-minute
conversation about the investigation, including the detec-
tives’ theory of his motive for the crimes. The two Oregon
detectives ultimately left, saying to the defendant that they
would be in Stockton for a few more days and that, if he
decided that he wanted to talk to them, he should let the jail
staff know. Id. at 318-19.

About an hour later, the defendant knocked on
the door of the interview room and asked to speak to the

detectives from Oregon. Shortly after that, two different
Oregon detectives met with him, readvised him of his con-
stitutional rights, and interviewed him. During that inter-
view, the defendant made inculpatory statements about
the two murders. Id. at 319. The defendant later moved to
suppress those statements, but the trial court denied the
motion. Id. at 320-21.

On review of the denial of the motion, this court
affirmed. The court began by concluding that the first two
Oregon detectives had indeed violated the defendant’s rights
under Article I, section 12, when they continued to probe
him about the murders after he had invoked his right to
counsel. Jd. at 322. But the court concluded that the inculpa-
tory statements that the defendant later made to the police
need not be suppressed, because the prior unlawful interro-
gation had not “induced” the defendant to make them. Id. at
322-23. The court noted that the first two detectives had left
the defendant alone for an hour, after which time he reiniti-
ated contact with them on his own. Id. at 323.

This case is distinguishable. In Acrement, there was
a clear break of approximately one hour between the unlaw-
ful interrogation and the defendant’s later unprompted
reinitiation of contact with the police. In this case, there
was no break at all. In this case, unlike Acremant, there
was a causal connection between Lewis’s interrogation of
defendant and defendant’s request to talk with Myers. After
defendant asked why he had been taken into custody, Lewis
asked defendant if he remembered Myers telling him why
he had been arrested and stated further that, in fact, Lewis
remembered Myers telling defendant that he had been
arrested for killing his girlfriend. Defendant immediately
became “agitated” and responded that, “no, no, she ain't
dead, you're lying and *** I want to talk to the detective
that you said I talked to.” Defendant’s request to speak with
Myers thus was hardly unprompted. It was a direct response
to Lewis's interrogation of defendant in violation of Article I,
section 12.

We conclude that police interrogated defendant in
violation of his state constitutional right to counsel and that
the incriminating statements to Myers that resulted from

322 P|

that violation should have been suppressed. The state con-
cedes that, if the trial court erred in failing to grant defen-
dant’s motion to suppress, the admission of his statements
was not harmless. The case therefore must be reversed and
remanded for a new trial. Because of our decision on state
constitutional grounds, we need not address the parties’
arguments under the Fifth Amendment.

The decision of the Court of Appeals is reversed.
The judgment of the circuit court is reversed, and the case
is remanded to the circuit court for further proceedings.

323

Argued and submitted November 18, 2015, decision of Court of Appeals and
judgment of circuit court affirmed September 22, 2016

STATE OF OREGON,
Respondent on Review,
ve.
BRIAN JAMES CHANDLER,
Petitioner on Review.
(CC CR1101757; CA A152098; SC S063096)
380 P3d 932

Eric Johansen, Deputy Public Defender, Salem, argued
the cause and filed the brief for petitioner on review. With
him on the brief was Ernest G. Lannet, Chief Defender,
Office of Public Defense Services.

Michael A. Casper, Assistant Attorney General, Salem,
argued the cause and filed the brief for respondent on review.
With him on the brief were Ellen F. Rosenblum, Attorney
General, and Paul L. Smith, Deputy Solicitor General.

Before Balmer, Chief Justice, and Kistler, Walters,
Landau, Baldwin, Brewer, and Nakamoto, Justices.**

** Linder, J., retired December 31, 2015, and did not participate in the deci-
sion of this case.

324 Le

BALDWIN, J.

The decision of the Court of Appeals and the judgment of
the circuit court are affirmed.

Po 825

BALDWIN, J.

In this criminal case, defendant was convicted of two
counts of first-degree sexual abuse. ORS 163.427. Defendant
assigns error to the trial court’s admission of a videotaped
pretrial interrogation of defendant by Detective Gates. The
videotape, which was played for the jury, included state-
ments by Gates indicating her belief that defendant was
lying and that the victims were telling the truth. On appeal,
defendant argued that the trial court erroneously denied his
motion to redact Gates’s statements, because, under OEC.
403, the prejudicial impact of those statements outweighed
their probative value. The Court of Appeals concluded that
defendant had failed to preserve his argument under OEC
403. The court rejected defendant’s remaining argument
that Gates’s statements constituted impermissible vouch-
ing testimony. We allowed review and, for the reasons we
explain below, affirm.

I. BACKGROUND

The Court of Appeals summarized the undisputed
facts as follows:

“The conduct at issue occurred at the home of D, the
12-year-old victim. She lived there with her mother, father,
and two brothers. A, the seven-year-old victim, is related to
the family and stayed at the home one night. Defendant was
a close friend of the family and also stayed that night. Both
D and A later reported to family members that defendant
had touched them. D said that she awoke to find defendant
rubbing her thigh near her genital area. A said that defen-
dant had touched her under her clothes. She later told a
CARES interviewer that defendant had touched her on her
‘pee’ with his hand.

“Gates received a report of suspected abuse from the
Department of Human Services and attended A’s CARES
interview. Gates later interviewed defendant; at the end
of that approximately two-hour interview, she arrested
defendant. That videotaped interview is the subject of this
appeal. In the interview, defendant repeatedly denied the
allegations. Gates made numerous comments indicating
that she believed the victims and that defendant was not
being truthful.”

326 Ld

State v. Chandler, 269 Or App 388, 389-90, 344 P3d 543
(2015).

Before trial, defendant moved to redact portions of
the videotaped interview, arguing that those portions were
inadmissible for various reasons. As relevant to this appeal,
defendant contended that certain of Gates’s statements
constituted impermissible comments on the credibility of
other witnesses that are categorically inadmissible. We do
not quote all of the challenged excerpts; however, the fol-
lowing excerpts are representative of the type of statements
that Gates made throughout the interview to the effect that
she believed the victims to be truthful and defendant to be
untruthful:

“[GATES]: [B]ut if I have someone saying a completely
different story than everyone else—I have a little kid say-
ing you did something and she’s crying and scared, doesn’t
want to go back to grandma and grandpa’s, has no reason
to lie about this, has no reason to pin it on you. She doesn’t
know you.

eee ae ae

“T have a little girl that’s saying what she’s saying and
T’ve got video of it and it’s extremely telling ‘cause it’s heart
breaking. The girl had no history of, you know, lying, mak-
ing accusations against people that have turned out to be
lies.

ce seek a

“[GATES]: *** So here’s how I work. When I talk to
people[,] usually the suspect is the very last person I talk
to ‘cause I want to know as much about you as I can. I want
to know *** as much about that incident, what people saw
and what people heard, you know, what you talked to peo-
ple about since that happened.

“I want to know everything. I want to know about your
past. I want to know what youre doing now. And I want to
talk to you and talk to you like I don’t know any of it and
see if you’re going to lie to me about stuff you don’t even
have to lie about.

“And that’s exactly what you’ve done. And so some of
[the] stuff I know you've been honest about. And I can see

po 327

you act a certain way when you say something that’s truth-
ful and I see you act a different way when you're saying
something that I already know is a lie.

“So it’s kind of nice because you're lying|,] thinking
yowre helping yourself, but it’s showing me what you look
like and how your body reacts when you lie.

fe He eae

“[GATES]: And that’s what I’m saying. If you’re just
going to say, ‘Oh, everybody’s a liar. All these people that I
trust that are family to me that consider me an uncle, and,
you know, I’m like a son to them, they’re all suddenly lying
to me. They all lied about me and they have no reason to be
lying about me because they just are.

“Believe me, I didn’t do it. I wasn’t there. I suddenly
have amnesia on these parts. *** But trust me[,] I’m not
a bad guy. *** Why should I trust you if you lied to me?
You're telling me to go against logic.

“Now, if you just told me, ‘Yeah, I did it. This is why

and this is who [I am], then maybe I could believe who you

. are. But right now you're already lying to me, so why would

I believe who you're saying you are? It goes against what
you’re showing me that you are.”

The trial court denied defendant’s motion to redact,

concluding that the rule prohibiting one witness from com-
menting on the credibility of another witness did not apply
to the challenged statements. The court explained:

“The rest of the thing *** falls into two categories: ***
number one, *** this is not a rule where *** one witness
is testifying, giving his opinion as to another witness's
credibility.

“It’s [a] fair comment when the officer during [her]
interrogation says, ‘Well, somebody else told me this and
somebody else told me that.” And so I don’t think that’s a
violation of the rule and so [s]he’ll be allowed to do that.

“As far as the officer[’ls making statements that some
witnesses said this and some witnesses said that, which
is, of course, somewhat hearsay, but I think[,] *** taken in

1 The court granted defendant’s motion to redact as to other portions of the

videotaped interview not relevant to this appeal.

328 Ld

the context of the interrogation[,] the intent is to try to get
the defendant’s response.

“And, therefore, I don’t think there’s any violation of any
rules.”

Defendant appealed, assigning error to the trial
court’s denial of his motion to redact. Defendant argued that
Gates’s statements indicating her belief that defendant was
untruthful and that the victims were truthful constituted
impermissible vouching evidence, and that they should have
been excluded under OEC 403.? The state responded that
defendant failed to preserve his argument under OEC 403
and that, even assuming his argument was preserved, the
trial court did not abuse its discretion by admitting the chal-
lenged evidence.

The Court of Appeals agreed with the state that
defendant had failed to preserve his argument and affirmed.
Chandler, 269 Or App at 389. The court noted that defen-
dant had not developed any argument under OEC 403 in his
motion to redact, nor cited the primary case on which his
appellate argument relied—State v. Southard, 347 Or 127,
140-41, 218 P3d 104 (2009) (holding that medical diagnosis
of child sex abuse is inadmissible under OEC 403 in absence
of physical evidence, because it poses risk that “the jury will
not make its own credibility determination, which it is fully
capable of doing, but will instead defer to the expert’s implicit
conclusion that the victim’s reports of abuse are credible”).
Instead, defendant had argued in the trial court only that
Gates’s comments were inadmissible under the rule that one
witness may not opine on the credibility of another witness.
The Court of Appeals noted that those two principles—the
principle that a witness may not opine on another witness's
credibility and the OEC 403/Southard unfair prejudice
principle—are distinct. Chandler, 269 Or App at 393. In the
court’s view, had defendant made an OEC 403 argument,

2 ORC 408 provides:

“Although relevant, evidence may be excluded if its probative value is
substantially outweighed by the danger of unfair prejudice, confusion of the
issues, or misleading the jury, or by considerations of undue delay or needless
presentation of cumulative evidence.”

Po 329

“the trial court would have had occasion to weigh the proba-
tive value against the asserted prejudice, make a record of
its findings, and give an appropriate limiting instruction if
the court deemed it necessary.” Jd. The court thus concluded
that defendant failed to preserve his argument under OEC
403, and, because he had not requested plain-error review of
that argument, the court did not address it further. Id.

The Court of Appeals rejected defendant’s remain-
ing argument that the trial court erred in admitting Gates’s
statements because those statements impermissibly com-
mented on the credibility of other witnesses. Id. at 394. In
synthesizing this court’s case law on the rule prohibiting
one witness from commenting on the credibility of another
witness—also known as the rule against “vouching”
testimony—the court appeared to draw a hard line between
credibility opinions that are rendered in court versus out-
side of court. The court noted that this court’s line of vouch-
ing cases “has involved in-court testimony, not (as in this
case) out-of-court statements admitted as evidence.” Id. In
particular, the Court of Appeals cited this court’s decision
in State v. Odoms, 313 Or 76, 829 P2d 690 (1992), in support
of its conclusion that the rule against vouching testimony
does not encompass out-of-court statements commenting on
a witness's credibility. Chandler, 269 Or App at 394 (citing
Odoms, 313 Or at 83-84). Because the challenged state-
ments in this case were made outside of court, the Court
of Appeals concluded that defendant’s argument under the
vouching rule failed. Id.

On review, defendant reprises his contention that
the trial court erred in admitting the portions of the video-
taped interview in which Gates indicated her belief that
defendant was lying and that the victims were telling the
truth. Defendant argues that those statements, which were
admitted into evidence as an exhibit, directly and improp-
erly commented on his credibility and the credibility of the
victims. Even if those statements did not constitute direct
vouching testimony, defendant contends that they were
tantamount to direct vouching, because they invaded the
jury’s role of determining witness credibility. Defendant
also reprises his contention that the trial court erred by not

330 Ld

excluding Gates’s statements as unfairly prejudicial under
OEC 403.

The state, in response, argues that the categorical
rule against vouching testimony should not be applied to
out-of-court statements about a witness's credibility that
are not offered for the truth of the matter asserted—i.e.,
that are not offered to prove the witness’s credibility or
lack of credibility. The state contends that applying the
vouching rule to such statements would sweep too broadly
and exclude relevant, important evidence. In this case, the
state argues that the trial court did not err in admitting
Gates’s statements, because those statements were not
offered for their truth. The state also argues that defen-
dant failed to preserve his alternative argument under
OEC 403.

Il. ANALYSIS
A. Comments on Witness Credibility

This court has long held that one witness may
not comment on the credibility of another witness. State v.
Lupoli, 348 Or 346, 357, 234 P3d 117 (2010); see also State
v. Middleton, 294 Or 427, 488, 657 P2d 1215 (1983) (“We
expressly hold that in Oregon a witness, expert or otherwise,
may not give an opinion on whether he believes a witness is
telling the truth.”). That rule developed largely in response
to the use of expert psychiatric testimony to attack a wit-
ness’s character. As this court observed in State v. Walgraeve,
243 Or 328, 333, 413 P2d 609 (1966) (denying rehearing),
the use of expert testimony in that manner “would create a
class of cases in which opinion evidence would, in fact, deter-
mine the credibility of witnesses. Unless the function of a
jury is to find the truth, its role is devoid of substance.” The
rule prohibiting vouching testimony thus serves the policy
goals of ensuring that the jury remains the sole arbiter of
witness credibility and that the jury’s role in assessing wit-
ness credibility is not usurped by another witness’s opinion
testimony. See State v. Snider, 296 Or 168, 172, 674 P2d 585
(1988) (noting that “vice” of vouching testimony is that jury
might give “special credence” to such testimony, “implying a
guarantee of the witness’s veracity”).

po 331

Although the vouching rule’ is an evidentiary rule,
it is not codified in the Oregon Evidence Code. Rather, is
a judicially created rule. See Middleton, 294 Or at 438
(expressly adopting rule); State v. Brown, 297 Or 404, 443,
687 P2d 751 (1984) G@oting that rule prohibiting witness
from passing upon credibility of another witness is “the
long-standing position of this court”). Perhaps as a result,
the exact contours of the rule may be difficult to trace. Since
its inception, however, this court has had a number of oppor-
tunities to clarify the rule. For example, this court has held
that the rule applies to direct comments on the credibility
of another witness, as well as to statements that are “tanta-
mount” to stating that another witness is credible. See State
v, Beauvais, 357 Or 524, 543, 354 P3d 680 (2015) (“A direct
comment on the credibility of a witness or a statement that
is ‘tantamount’ to stating that another witness is truthful is
not admissible[.]”). This court also has made clear that the
rule applies to credibility opinions about statements that
a witness made either at trial or on some other occasion.
See State v. Keller, 315 Or 273, 284-85, 844 P2d 195 (1993)
(“[T]his rule applies whether the witness is testifying about
the credibility of the other witness in relation to the latter’s
testimony at trial or is testifying about the credibility of the
other witness in relation to statements made by the latter on
some other occasion or for some reason unrelated to the cur-
rent litigation.”). Additionally, the rule applies to comments
about the credibility of either a witness or a nonwitness com-
plainant. See Lupoli, 348 Or at 364-65 (holding that expert
testimony improperly vouched for credibility of nonwitness
complainant).

This case requires us to consider another facet of
the vouching rule—namely, whether, and how, the rule may
be applied to one witness’s unsworn, out-of-court statements
about the credibility of another witness. Two prior decisions
of this court are relevant to that assessment: Odoms, 313
Or 76, and State v. Charboneau, 323 Or 38, 913 P2d 308
(1996).

® The rule that one witness may not comment on the credibility of another
witness applies both to comments that bolster and to comments that undermine
a witness's credibility. In this opinion, we use the phrase “vouching rule” to refer
to the general prohibition against both types of credibility commentary.

332 Ld

In Odoms, a detective testified at the defendant’s
trial and recounted statements that the detective had made
while interrogating the defendant indicating his belief
that the victim was truthful. 313 Or at 79-80. On review,
the defendant argued that the detective’s testimony was
an impermissible comment on the victim’s credibility and
should have been excluded. Jd. at 81. This court recited the
general rule from Middleton—i.e., that one witness may not
give an opinion as to whether he or she believes that another
witness is telling the truth—and observed that “the point
of Middleton was only to preclude testimony by one trial
witness about whether another trial witness is telling the
truth[.]” Id. at 82 (emphases in original). This court then
noted that “a relevant out-of-court statement, recounted at
trial, generally may not be excluded merely because it is
phrased in the form of an opinion.” Odoms, 313 Or at 83.
From those observations, this court concluded that the trial
court had not erred in overruling the defendant’s “improper
opinion evidence” objection to the detective’s statements. Id.
at 84,

Justice Unis specially concurred, offering a differ-
ent explanation for this court’s holding. In his view, an out-
of-court opinion rendered as to another witness's credibility
is susceptible to an improper opinion objection “only if it is
offered as opinion testimony, i.e., for the truth of the judg-
ment or belief it expresses.” Id. at 85 (Unis, J., specially con-
curring). Applying that rule to the facts of Odoms, Justice
Unis concluded that the detective’s testimony had not been
offered for its truth; instead, it had been offered to show
its effect on the defendant’s state of mind—specifically,
how and why the defendant had changed the story he had
given the detective over the course of three interviews. Id.
Because the detective’s testimony had not been offered for
its truth, Justice Unis concluded that it was not susceptible
to an improper opinion objection. Id.

In Charboneau, a witness entered into a plea agree-
ment with the state in exchange for his testimony at the
defendant’s trial. At trial, the court admitted portions of
the plea agreement that contained the state’s opinion that
it found the witness to be credible and a provision that the

Po 333

agreement would be “null and void” if the witness did not
testify truthfully. 323 Or at 42-43. The defendant appealed
the trial court’s admission of those portions of the plea
agreement, arguing that they contained improper com-
ments on the credibility of the state’s witness. On review,
this court noted that the case did not present the usual sit-
uation in which one trial witness offers an opinion about
the truthfulness of another witness. Id. at 47. Nevertheless,
the court determined that the trial court’s admission of the
state’s credibility opinion by means of the plea agreement
presented an analogous risk. Id. The court noted that the
state could not have called the investigating detective to
testify directly about whether he believed the witness to be
truthful. For the same reasons, the court concluded that the
state could not introduce a credibility opinion by means of
an exhibit. Accordingly, this court held that “[a] witness’s
testimony or an exhibit may not, explicitly and directly, con-
tain an opinion as to a trial witness’s credibility.” Id. at 48
(emphasis added).

We recognize that this court’s holdings in Odoms
and Charboneau appear to be in conflict. Whereas
Charboneau stands for the proposition that a comment on
a witness's credibility may not be introduced through either
trial testimony or a trial exhibit, Odoms indicates that the
vouching rule does not apply to credibility opinions rendered.
outside of court. See 313 Or at 82-83 (holding that trial
court did not err in overruling defendant’s vouching objec-
tion to detective’s out-of-court statements; noting that “the
point of Middleton was only to preclude testimony by one
trial witness about whether another trial witness is telling
the truth”). Indeed, the Court of Appeals relied on Odoms
to draw such a categorical distinction between in-court and
out-of-court credibility opinions, holding that the vouching
rule does not apply to the latter. That principle is not an
accurate statement of Oregon law, however. Rather, as this
court has previously recognized, an out-of-court statement
about the credibility of a trial witness may become the func-
tional equivalent of trial testimony once that statement is
admitted into evidence at trial. See, e.g., Charboneau, 323
Or at 47-48 (portion of plea agreement containing prose-
cutor’s opinion that state’s witness was credible, admitted

334 Ld

into evidence, constituted improper comment on. credibility
of state’s witness); Snider, 296 Or at 172 (provision of plea
agreement requiring state’s witness to take and pass poly-
graph examination to verify the witness's trial testimony,
admitted into evidence, constituted improper credibility
comment).

We therefore disavow the reasoning of the major-
ity in Odoms and expressly recognize that the bounds of
the vouching rule are not defined by the setting in which
the credibility comment was uttered. Instead, we adopt the
following rule, originally articulated by Justice Unis in his
concurrence in Odoms: When a person makes an out-of
court statement about the credibility of a witness or non-
witness complainant, that statement is subject to the cat-
egorical prohibition against vouching evidence only if the
statement is offered for the truth of the credibility opinion
that it expresses. Put another way, a court does not err in
admitting an out-of-court statement as to the credibility
of a witness or nonwitness complainant if the statement is
offered for a relevant, non-opinion purpose.*

As the state acknowledges, and as we will explain,
that does not mean that such a statement is admissible.
Even if an out-of-court statement is not subject to a vouch-
ing objection, the evidence still must be relevant under OEC
401, and it cannot be unduly prejudicial under OEC 403.
In addition, under appropriate circumstances, a defendant
may request a limiting instruction under OEC 105.

Proceeding to the facts of this case, we conclude
that the challenged portions of the interview between
Gates and defendant were not admitted for the truth of
the credibility opinions that they contained and therefore
were not categorically inadmissible. We note, initially, that
the record is somewhat sparse as to the purpose for which

+ The principle articulated by Justice Unis also harmonizes any apparent
conflict between the holdings in Odoms and Charboneau. Whereas the challenged
evidence in Charboneau was admitted to bolster the credibility of a witness, the
challenged evidence in Odoms was admitted to show its effect on the defendant’s
state of mind. See Charboneau, 323 Or at 42 (plea agreement offered to rehabili-
tate state’s witness after his credibility had been attacked on cross-examination);
Odoms, 318 Or at 85 (Unis, J., specially concurring) (detective’s statement offered
to show how and why the defendant had changed his story).

Po 385

the challenged portions of the interview were offered. For
example, neither defendant’s motion to redact nor the pros-
ecutor’s response thereto addressed the purpose for which
Gates’s statements would be offered at trial. We find signif-
icant, however, defendant’s arguments and the trial court’s
ruling on a related issue. In defendant’s motion to redact,
he argued, in addition to his argument under the vouching
rule, that Gates’s unsworn, out-of-court statements during
the videotaped interview should be excluded as inadmissible
hearsay. The trial court disagreed, ruling: “As far as [Gates]
making statements that some witnesses said this and some
witnesses said that, which is, of course, somewhat hearsay,
but I think[,] *** taken in the context of the interrogation|[,]
the intent is to try to get the defendant’s response.” In other
words, the trial court concluded that the probative value of
Gates’s statements lay not in their truth, but rather in the
context that they provided for defendant’s responses.

The record at trial supports that conclusion. At
trial, the prosecutor did not use Gates’s statements from
the videotaped interview to bolster the victims’ credibility
or to undermine defendant’s. Indeed, when the prosecutor
questioned Gates on the stand, he did not mention any of
the credibility assessments that she had made during the
interview. We therefore agree with the trial court’s assess-
ment that Gates’s credibility statements made during the
interview were admitted not to prove that defendant was
untruthful or that the victims were truthful, but rather as
context for the responses that those statements elicited from
defendant.

In summary, we conclude that a person's out-of-
court statement about the credibility of a witness or nonwit-
ness complainant is not categorically inadmissible at trial
if it is offered for a relevant, non-opinion purpose. In this
case, Gates’s out-of-court comments indicating her belief
that defendant was lying and that the victims were telling
the truth were not offered to prove the truth of those beliefs.
Rather, the trial court understood that they were going to
be offered to provide relevant context for the statements
that defendant made throughout the interview, a viewpoint
that defendant did not challenge. We therefore conclude that

336 Ld

the trial court did not err in denying defendant’s motion to
redact on the ground that Gates’s statements constituted
prohibited vouching.

B. OEC 403

As explained, the fact that statements are not cate-
gorically prohibited under the vouching rule does not mean
that they are necessarily admissible. In appropriate circum-
stances, such statements may be excluded because they do
not meet the requirements of OEC 401 or OEC 403 or other
evidentiary rules. Accordingly, we must determine whether
defendant made a preserved objection to the admissibility of
the contested statements in addition to his argument that
the statements were categorically inadmissible under the
vouching rule.

In defendant’s motion to redact, he argued that cer-
tain portions of the videotaped interview with Gates should
be redacted, for a variety of reasons. The entirety of his
argument under the vouching rule was as follows:

“Throughout the interview, Detective Gates invites
the defendant to offer his opinion about the character or
credibility of other witnesses. She baits the defendant to
label other witnesses as ‘liars’. The detective also offers her
own frequent assessment of whether a particular witness’
story is credible. In at least one exchange, she improperly
vouched for the credibility of [A] and [D] by referencing the
out-of-court statements of unidentified third persons who
believe the children are ‘not liars’ who ‘make up false accu-
sations about people’ and who have no allegations of abuse
of any kind in the past. These exchanges and comments are
inadmissible.

“The law applicable to this issue is well understood.
This court has long held that one witness may not give an
opinion on whether he or she believes another witness is
telling the truth.’ State v. Lupoli, 348 Or 346 (2010). The
Oregon Supreme Court has repeatedly condemned the use
of even isolated incidents of vouching testimony. State v.
Milbradt, 305 Or 621, 629, 632, 756 P2d 620, at 624, 626
(1988)[ (Jo witness ‘may render an opinion on whether
a witness is credible in any trial conducted in this state[’)
(italics in original]).”

Po 337

Defendant also attached an addendum to his motion that
identified the specific portions of the interview to which he
objected and the bases for his objections. In that addendum,
defendant included citations to OEC 403, among other evi-
dentiary rules. Defendant did not, however, develop any
argument in the addendum. As noted, the Court of Appeals
concluded that defendant’s bare citation to OEC 403, absent
any developed argument under that rule, was insufficient to
preserve his argument under the rule. We agree with that
conclusion.

On review, however, defendant contends that, even
if his citation to OEC 403 in the addendum to his motion
to redact was insufficient to preserve an OEC 403 argu-
ment, he nevertheless preserved that argument by virtue
of the objection that he raised under the vouching rule. In
his view, this court’s prior cases—in particular, Brown and
Southard—support the proposition that the vouching rule
encompasses a requirement that a trial court engage in
OEC 4038 balancing.®

We are not persuaded that a party’s vouching objec-
tion is sufficient to alert a trial court that the party also
seeks a balancing of the probative value of the challenged evi-
dence against the prejudicial effect of that evidence. The two
cases that defendant cites for that proposition, Brown and
Southard, were not, as defendant characterizes them, cases
in which this court engaged in OEC 403 balancing as part of
a vouching analysis. Rather, those cases involved the admis-
sibility of scientific evidence—an analysis that includes, as
one component, a requirement that the prejudicial effect of
the evidence not outweigh its probative value under OEC
403. See Southard, 347 Or at 133 (to be admissible, scien-
tific evidence must (1) be relevant under OEC 401; (2) pos-
sess sufficient indicia of scientific validity and be helpful to

5 'The state contends that defendant failed to renew his argument under OFC
403 on review and that he therefore abandoned that argument. During oral argu-
ment before this court, however, defendant clearly renewed his contention that
Gates’s statements should have been excluded under OHC 403. He also argued
generally in his brief on the merits that Gates’s statements should have been
excluded based on the risk that the jury would place undue weight on those state-
ments and abdicate its role in assessing witness credibility. Although it is a close
call, under the circumstances, we conclude that defendant did not abandon his
argument under that rule.

338 i

jury under OEC 702; and (3) be more probative than prej-
udicial under OEC 403). In conducting that balancing test,
this court concluded that the scientific evidence at issue in
each case posed a risk that jurors might be prejudiced by
a misplaced “aura of reliability” surrounding the evidence,
thereby leading the jurors to abdicate their traditional role
of assessing the credibility of witnesses. See Brown, 297 Or
at 438-41 (admissibility of polygraph evidence); Southard,
347 Or at 141 (admissibility of medical diagnosis of sexual
abuse). Accordingly, this court concluded in each case that
the prejudicial effect of the evidence at issue outweighed
its probative value under OEC 403. Brown, 297 Or at 442;
Southard, 347 Or at 141. Contrary to defendant’s contention,
this court’s OEC 403 balancing in those cases did not arise
out of a vouching analysis.

In addition to the lack of support in this court’s case
law for the proposition that OEC 403 balancing is encom-
passed within the vouching rule, there are prudential rea-
sons to not conflate those two evidentiary rules. From a
preservation perspective, a vouching objection and an OEC
403 objection request different actions from the trial court.
When a party objects to evidence as an improper comment
on the credibility of a witness, the trial court must deter-
mine only whether the vouching rule applies to the chal-
lenged evidence; if it does, then the evidence is categorically
inadmissible. See, e.g., Middleton, 294 Or at 438 (reversible
error to admit opinion testimony from one witness on cred-
ibility of another witness). In contrast, when a party raises
an objection under OEC 403, the trial court must engage in
the balancing test described above to determine whether the
otherwise admissible evidence should be excluded due to its
prejudicial effect. Given the different nature of the actions
that those two evidentiary objections require of a trial court,
we conclude that a party’s objection under the vouching rule
is insufficient, by itself, to alert a trial court that the party
also seeks OEC 403 balancing. Rather, a party must spe-
cifically raise an objection under OEC 403 to preserve an
argument under that rule.

In this case, defendant failed to raise a specific
argument that Gates’s statements about the credibility of
defendant and the victims should have been excluded as

Po 339

unfairly prejudicial under OEC 403. We therefore conclude
that his argument under that rule is unpreserved.® Had
defendant specifically requested that the trial court weigh
the probative value of Gates’s statements against their prej-
udicial effect, the court’s ruling as to the admissibility of
those statements might well have been different. We do not
disagree that such statements are troubling. Indeed, Gates’s
claim of expertise in determining truthfulness posed the
risk that this court identified in Brown—i.e., that jurors
might place undue weight on the “aura of reliability” created
by such a claim. See Brown, 297 Or at 439 (in determin-
ing risk of unfair prejudice under OEC 403, courts in some
cases must “evaluate the degree to which the trier of fact
may be overly impressed or prejudiced by a perhaps mis-
placed aura of reliability or validity of the evidence, thereby
leading the trier of fact to abdicate its role of critical assess-
ment”). The proper procedure for seeking the exclusion of
such statements, however, is to raise an objection under
OEC 403, thereby triggering the trial court’s duty to weigh
those statements’ prejudicial effect against their probative
value.”

Til. CONCLUSION

We conclude that the general rule that one witness
may not comment on the credibility of another witness does
not apply to Gates’s statements, because those statements
were not offered for the truth of the credibility opinions that
they expressed. Rather, Gates’s statements were offered for
the relevant, non-opinion purpose of providing context for
the statements that defendant made during the interview.
Accordingly, the trial court did not err in denying defendant's
motion to redact on the ground that Gates’s statements con-
stituted impermissible vouching. We further conclude that
defendant failed to preserve his remaining argument that

6 Defendant has not requested plain-error review in this court or the Court
of Appeals; we therefore do not address whether such review is warranted.

7 As noted, a criminal defendant may have other evidentiary rules at bis or
her disposal for challenging this type of evidence. For example, a defendant could
raise an objection under OEC 401 to the logical relevancy of statements such as
the ones that Gates made during the interview. A defendant also may seek a lim-
iting instruction under OEC 105.

340 Ld

Gates’s statements should have been excluded as unfairly
prejudicial under OEC 403.

The decision of the Court of Appeals and the judg-
ment of the circuit court are affirmed.

341

Argued and submitted September 10, 2015; decision of Court of Appeals
affirmed; supplemental judgment for garnishment affirmed; supplemental
judgment awarding attorney fees, costs, and disbursements reversed as to

attorney fee award and otherwise affirmed September 22, 2016

FOUNTAINCOURT HOMEOWNERS’ ASSOCIATION
and FountainCourt Condominium Owners’ Association,
Plaintiffs,

v.

FOUNTAINCOURT DEVELOPMENT, LLC;
etal.,

Defendants.

FOUNTAINCOURT DEVELOPMENT, LLC;

et al.,
Third-Party Plaintiffs,
ve
ADVANCED SURFACE INNOVATIONS, INC.,

an Oregon corporation; et al.,
Third-Party Defendants.

VOSS FRAMING, INC.,
assignee for FountainCourt Homeowners’ Association,
assignee for FountainCourt Condominium Owners’ Association,
on behalf of FountainCourt Development, LLC,
on behalf of Matrix Development Corporation,
and on behalf of Legend Homes Corporation,
Fourth-Party Plaintiff,
ve
Dana CHRISTOPHER
and Red Hills Construction, Inc.,
Fourth-Party Defendants.

FOUNTAINCOURT HOMEOWNERS’ ASSOCIATION
and FountainCourt Condominium Owners’ Association,
Respondents on Review,

vD
AMERICAN FAMILY MUTUAL
INSURANCE COMPANY,

Petitioner on Review.

(CC C075333CV; CA A147420; SC S062691)

842 ee

380 P3d 916

L. Kathleen Chaney, Lambdin & Chaney LLP, Denver,
Colorado, argued the cause and filed the briefs for petitioner
on review.

Anthony L. Rafel, Rafel Law Group PLLC, Portland,
argued the cause and filed the brief for respondents on
review. With him on the brief was Katie Jo Johnson, McEwan
Gisvold LLP, Portland.

Michael E. Farnell, Parsons Farnell & Grien LLP,
Portland, argued the cause and filed the brief for amici
curiae Associated General Contractors - Oregon Columbia
Chapter, Central Oregon Builders Association, Home
Builders Association of Marion and Polk County, Home
Builders Association of Metropolitan Portland, Independent
Electrical Contractors of Oregon Inc, National Association of
Home Builders, Northwest Utility Contractors Association,
Oregon Home Builders Association, Pacific Northwest
Chapter of the Associated Builders and Contractors Inc,
and Professional Remodelers Organization of the HBA of
Metropolitan Portland. With him on the brief was Steven
R. Powers.

Po 343

Bronson James, Bronson James LLC, Portland, filed the
brief for amicus curiae Oregon Trial Lawyers Association.

Thomas M. Christ, Cosgrave Vergeer Kester LLP,
Portland, filed the brief for amicus curiae Oregon Association
of Defense Counsel.

Before Balmer, Chief Justice, and Kistler, Walters,
Landau, Baldwin, and Nakamoto, Justices.**

BALDWIN, J.

The decision of the Court of Appeals is affirmed. The
supplemental judgment for garnishment is affirmed. The
supplemental judgment awarding attorney fees, costs, and
disbursements is reversed as to the attorney fee award and
is otherwise affirmed.

sion of this case. Brewer, J., did not participate in the consideration or decision of
this case.

ee

BALDWIN, J.

American Family Mutual Insurance Company
(AFM) seeks review of a decision of the Court of Appeals
that upheld a trial court judgment in a garnishment pro-
ceeding requiring AFM to pay a judgment that plaintiffs
FountainCourt Homeowners’ Association and FountainCourt
Condominium Owners’ Association (FountainCourt) had
obtained against AFM’s insured, Sideco, Inc. (Sideco).
FountainCourt Homeowners v. FountainCourt Develop., 264
Or App 468, 334 P3d 973 (2014). FountainCourt responds
that the Court of Appeals correctly upheld that supple-
mental judgment, but argues that that court erroneously
reversed a subsequent supplemental judgment that awarded
attorney fees. We reject without discussion FountainCourt’s
arguments concerning the subsequent supplemental judg-
ment. With respect to AFM’s arguments, we conclude that.
the Court of Appeals correctly rejected them, and we affirm
the trial court’s judgment.

The underlying dispute concerns a housing devel-
opment that was constructed between 2002 and 2004 in
Beaverton. FountainCourt brought an action against the
developers and contractors seeking damages for defects in
the construction of the buildings in the development. Sideco,
a subcontractor, was brought in as a third-party defendant,
and a jury eventually determined that Sideco’s negligence
caused property damage to FountainCourt’s buildings.
Based on that jury verdict, the trial court entered judgment
against Sideco in the amount of $485,877.84. FountainCourt
then served a writ of garnishment on AFM in the amount
owed by Sideco, and, in response, AFM denied that the loss
was covered by its policies. FountainCourt moved for an order
to show cause in the trial court why judgment should not be
entered against AFM on the writ of garnishment. The trial
court ultimately agreed with FountainCourt and entered
judgment against AFM, after deducting the amounts that
had been paid by other garnishees. AFM appealed the judg-
ment, and the Court of Appeals affirmed.

On review, AFM raises numerous issues, some of
which, as we explain below, were not properly raised in the
lower courts, and others of which we reframe for purposes

Po 345

of organizing our discussion. We have reframed the issues
before us as follows: (1) Did the trial court properly resolve
the issues raised in the garnishment proceeding in a man-
ner that comported with this court’s case law concerning an
insurer’s duty to defend and right to litigate coverage issues,
and did not implicate AFM’s right to a jury trial; and (2) did
the trial court correctly interpret the insurance policies to
conclude that coverage had been triggered under the poli-
cies and that AFM was liable to FountainCourt in light of
FountainCourt’s verdict against Sideco in the underlying
negligence case? We conclude that the trial court correctly
resolved those legal issues, and we affirm the trial court and
the Court of Appeals.

I. FACTS AND PROCEDURAL POSTURE
A. The Negligence Trial

Between 2002 and 2004, FountainCourt, a planned
community, was developed by defendant FountainCourt
Development and built by defendant Legend Homes
Corporation, and much of the work on the project was carried
out by subcontractors. The planned community consisted of
34 condominiums and 63 townhouses. The owners of the con-
dominiums and townhouses (represented in this litigation by
the plaintiff homeowners associations) experienced damage
to their properties caused by water intrusion into the build-
ings. In 2007, FountainCourt initiated the underlying action
against the developers and contractor, who, in turn, brought
in subcontractors as third-party defendants. In an amended
pleading, FountainCourt alleged direct claims of negligence
against some of the subcontractors, including Sideco. In par-
ticular, FountainCourt alleged that Sideco had installed sid-
ing and windows, among other things, in such a manner as
to cause water intrusion into the buildings, which resulted in
physical damage to those structures.

Sideco tendered defense of the action to its insurers,
including AFM. Sideco had general-liability insurance pol-
icies issued by AFM covering the period of May 1, 2004 to
May 1, 2006, and a general-liability insurance policy issued

1 Defendant Matrix Development Corporation is the parent company of both
FountainCourt Development and Legend Homes Corporation.

6

by Clarendon National Insurance Company covering the
period of April 15, 2003 to May 15, 2004. Clarendon and
AFM accepted the tender of defense with a full reservation
of rights.

At trial, FountainCourt presented evidence in sup-
port of its claims. Ultimately, the only theory of the case that
went to the jury with respect to all defendants concerned
property damage, and the jury was instructed as follows:

“If you find that the plaintiffs are entitled to prevail,
then you must decide whether the plaintiffs have been
damaged and, if so, the amount of their damages.

“Plaintiffs must allege and prove physical damage to
their property. *** The amount of damages may not exceed.
the sum of $3,831,635. The plaintiffs must prove damages
by a preponderance of the evidence.

“If you find the plaintiffs are entitled to damages, you
should—or shall determine the amount of physical damage
to plaintiffs’ real property, if any, that was caused by the
defendants’ fault or negligence. The measure of damages for
partial destruction of real property is the reasonable cost of
repairing the damaged property.”

(Emphasis added.)

The jury returned a verdict in FountainCourt’s
favor and allocated percentages of fault to various defen-
dants. While the main fault (66 percent) was found to be
with the developer/primary contractor group, various sub-
contractors also were determined to have been negligent.
The jury’s verdict indicated that plaintiffs’ total damages
were $2,145,156, and that 22.65 percent of the damages
were caused by Sideco’s negligence. The trial court accord-
ingly entered a judgment against Sideco in the amount of
$485,877.84.

B. The Garnishment Proceeding

FountainCourt then mailed a writ of garnishment,
to Sideco’s insurers for the amount of its judgment against
Sideco.? AFM filed an answer asserting that FountainCourt

2 In the garnishment context, FountainCourt was, in essence, standing
in the shoes of Sideco, which was insolvent at that point in time, See generally

Po 347

had failed to state a claim. It argued that it was not obli-
gated to pay the Sideco judgment either because some or all
of the damages did not arise from “property damage” or an
“occurrence,” or because some or all of the property damage
resulted before or after the policy periods, or because one
or more exclusions applied to some or all of the losses. AFM
also asserted a counterclaim for declaratory judgment con-
cerning its liability under the policies. FountainCourt then
moved for a show-cause order as to why judgment should
not be entered against the insurers on the writ of garnish-
ment, seeking a hearing pursuant to ORS 18.775.2 AFM
and Clarendon objected to resolving the issues by way of a
hearing pursuant to ORS 18.775, arguing that they needed
additional time to prepare, that factual issues concerning
coverage that could not be resolved through such a hearing,
and that they were entitled to a jury trial on those factual
issues. The insurers identified as potential factual issues
pertinent to coverage “the timing and cause of the alleged
property damage, and the nature of the money damages
awarded in the underlying action, among other things.” The
insurers also argued that they had raised “various coverage
defenses, based upon policy endorsements and exclusions,
which also will be fact-sensitive and entitle the parties to a
jury trial.”

The trial court held a hearing at which the parties
argued their respective positions concerning how the cover-
age disputes should be resolved. The court indicated that it
would not conduct a jury trial, as the meaning of the insur-
ance policies presented a question of law. AMF’s counsel
suggested that the court should resolve some preliminary
questions of law such as “who has the burden of proof” and
“whether or not it’s even possible at this juncture, based on
the trial court record that was created, to establish when
damage occurred, whether it was under one insurer’s pol-
icy or another.” AMF’s counsel acknowledged that Sideco’s

State Farm Fire & Cas. v. Reuter, 299 Or 155, 167, 700 P2d 236 (1985) (garnishor
stands in the shoes of the judgment debtor).

® Another insurer, Maryland Casualty Company, which insured Sideco
from April 2002 through April 2003 and had also been served with a writ of
garnishment, settled with FountainCourt during the course of the garnishment
proceeding.

58

liability was determined in the underlying action, but argued.
that additional factual issues needed to be determined:

“One is when did damage occur. We've got three insurers.
They do not have co-extensive policies. One ends. The next
one begins. And each policy says it only applies to damage
that occurs during the policy term. It was never an issue in
the underlying case when damage occurred.”

Counsel also argued that there were potential issues con-
cerning the policy exclusions for certain multi-unit struc-
tures,‘ adding that “[wle’re going to have to assess what
damages were awarded, if possible in the—by the jury for
which buildings to determine the applicability of that exclu-
sion in this particular context.”

With the issues thus framed by the parties, the trial
court construed the pertinent provisions of the insurance
contracts. The AFM insurance policies at issue in this case
provided that AFM “will pay those sums that the insured
becomes legally obligated to pay as damages because of ***
‘property damage’ to which this insurance applies.” The
policies define property damages as “[plhysical injury to
tangible property, including all resulting loss of use of that
property. All such loss of use shall be deemed to occur at
the time of the physical injury that caused it.” The policies
also provide that an “occurrence” is “an accident, including
continuous or repeated exposure to substantially the same
general harmful conditions.” In addition, the policies con-
tain the following provisions relating to “property damage”:

“b. This insurance applies to *** ‘property damage’
only if
eae oe a a

“(2) The *** ‘property damage’ occurs during the pol-
icy period; and

4 Both the AFM policies and the Clarendon policy had exclusions for certain
types of multi-unit structures, but the provisions of those policies differed signifi-
cantly. The trial court ultimately concluded that Clarendon had met its burden
of proof with respect to the multi-unit exclusion in its policy. That aspect of the
court’s decision is not at issue in this appeal.

Several other policy exclusions were raised at the garnishment hearing, but,
as we explain below, AFM did not raise any issues concerning the trial court’s
resolution of issues pertaining to exclusions in its assignments of error on appeal,
and thus we do not address any issues relating to policy exclusions.

Po 349

“(3) Prior to the policy period, no insured *** knew
that the *** ‘property damage’ had occurred, in whole or in
part.

Co eK
“ce. ‘[Plroperty damage’ which occurs during the policy
period and was not, prior to the policy period, known to
have occurred by any insured *** includes any continua-
tion, change or resumption of that *** ‘property damage’
after the end of the policy period.”

At the garnishment hearing, FountainCourt main-
tained that the insurers had the burden of proof to show
what portion of the jury’s verdict in the underlying case was
for damages that fell within policy exclusions and that the
insurers could not meet that burden. It further argued that,
in situations such as this where there are multiple insur-
ers on this type of loss, the burden in on the insurers to
work it out among themselves as to how much each insurer
pays, and it is not the burden of the insured to show how
that should be allocated. AFM, in contrast, argued that
FountainCourt had the burden to establish that the dam-
ages that were awarded by the jury in the underlying trial
were for the type of property damage covered by the policy
and to show how much property damage occurred during
which policy periods, but that FountainCourt could not meet
its burden of proof on those issues because the jury’s ver-
dict was not segregated in a way that allowed such determi-
nations to be made. In short, both parties argued that the
other had the burden of proof as to dispositive coverage or
exclusion issues, and could not meet that burden as a matter
of law, because it was not possible to get behind the jury’s
verdict to determine the precise basis on which the jury had
arrived at its decision concerning the extent of Sideco’s lia-
bility, when property damage occurred, and the amount of
property damage.

The record from the underlying trial was admitted
into evidence. FountainCourt also put on expert testimony
from the inspector who prepared the damage repair esti-
mates that were admitted in the underlying trial. He tes-
tified, based on trial exhibits, about the completion dates
and composition of each of the buildings, as well as the

0

general nature of the damage, some of which occurred when.
the products were installed, and some which involved water
damage and that began in the fall or winter after the work
was done and occurred continuously thereafter. He further
testified that there was damage to underlying materials due
to defects in Sideco’s work during the time that the AFM
policies were in effect. He opined that it was not possible
to quantify how much of the consequential water damage
occurred during which insurance policy period. He further
testified that water damage of this type increases exponen-
tially the longer it goes unrepaired. The witness testified
that his firm’s damage estimate allocated approximately
$1.5 million in damages caused by Sideco’s negligence.
When asked if the $485,000 awarded by the jury against
Sideco could all have been awarded to cover consequential
water damages rather than Sideco’s own work,® he replied
that it could have. AFM presented testimony by a forensic
architect who opined that the water damage to the build-
ings could not be precisely defined in terms of when it began
or ended, and that this type of damage is cumulative.

The court concluded that FountainCourt had “met
its prima facie burden of proving coverage under the poli-
cies,” that the burden was on AFM “to prove what portions,
if any, of the judgments entered against Sideco, Inc., are
excluded by the policies,” and that AFM had not met that
burden. The court noted specifically that AFM was “unable
to show whether or how the jury apportioned damages
among the FountainCourt buildings; accordingly, its multi-
unit exclusion is inapplicable.” The court entered judgment,
and AFM appealed.

C. The Appeal

In the Court of Appeals, AFM raised four assign-
ments of error. It first argued that the court erred in deter-
mining that FountainCourt had met its initial burden
because “FountainCourt failed to prove that any, let alone
all, of the damages awarded against Sideco fell within the
insuring agreement of its policy.” That argument focused

5 One of the policy exclusions that AFM raised concerned excusions of the
policyholder’s own work.

pi 351

primarily on whether the damage shown by the evidence
in the underlying negligence case constituted “property
damage” within the meaning of the AFM policies. Second,
AFM argued that, because FountainCourt’s own expert at
the garnishment hearing testified that it was not possible
“to segregate the [jury’s] verdict after-the-fact” in the gar-
nishment proceeding, there was no evidence to support a
conclusion that “the awarded damages were within Sideco’s
insuring agreement.” Third, AFM argued that the trial
court had erred in denying it a jury trial on the issue of what
part of the damage to the FountainCourt buildings occurred
during its policy periods. Fourth, it argued that the trial
court erred in awarding FountainCourt attorney fees.

The Court of Appeals rejected all but the fourth
assignment of error. FountainCourt Homeowners, 264 Or
App at 471. The court first addressed AFM’s argument that
FountainCourt had failed to meet its burden of proving that
the jury awarded damages for “property damage” as that
term was used in its policies. The court noted that AFM’s
primary argument in that regard was that the jury’s verdict
could have included costs not only for repairing consequential
water damage caused by Sideco’s negligence, but also “the
cost of repairing Sideco’s own faulty work.” Id. at 481. The
court recognized, however, that the policy provision on which
AFM relied was not, in fact, a limitation within the policy’s
definition of “property damage,” but rather was an exclusion
on which AFM had the burden of proof. Id. at 483-85.

The court then rejected AFM’s argument that
FountainCourt was required, and failed, to prove that all
of the damages awarded in the underlying negligence case
were for property damage that occurred during its policy
periods. Id. at 487. It also rejected AFM’s argument that
the trial court’s conclusion that FountainCourt had met its
initial burden to show coverage under the Clarendon pol-
icy as well necessarily meant that some of the damage had
occurred during the Clarendon policy period instead of the
AFM policy period, stating that “the award of damages is
not tied to discrete instances of property damages along a
time continuum; instead the liability for property damage
may be the same in every triggered policy period.” Id. On
the jury question, the court rejected AFM’s argument that

32

a factual issue had been raised because “there was evidence
presented during the garnishment proceeding that would
have permitted a jury to find that consequential water
damage did not occur while American Family was on the
risk.” Id. at 491. The court explained that the issue in the
garnishment proceeding was one of law rather than fact:
“[Blecause the entry of the judgment triggered American
Family’s obligation to pay a covered debt, the court was
called upon to determine the import of that judgment under
the parties’ contract as a legal matter.” Id. (emphasis in
original). Therefore, the Court of Appeals affirmed the trial
court’s judgment on the merits, although it reversed on the
attorney fee award. Id. at 495. AFM sought review, which
we allowed.

D. Limitations on Review

Under ORAP 9.20(2), “the questions before the
Supreme Court include all questions properly before the
Court of Appeals that the petition or response claims were
erroneously decided by that court.” After we accepted review
in this case, we determined that several of the issues argued
by AFM on review were neither raised in its Court of Appeals
briefs nor adequately developed in the trial court. In partic-
ular, AFM did not raise any issue in the Court of Appeals as
to whether there were genuine issues of material fact con-
cerning the exclusions on which it bore the burden of proof,
or whether the trial court erred in concluding that AFM
failed to satisfy its burden of proof regarding exclusions.
Accordingly, we do not address arguments that AFM makes
on review concerning policy exclusions. AFM also makes a
very brief argument that it was denied both discovery and
due process by the manner in which the garnishment pro-
ceeding was conducted. Because AFM failed to raise, assign
error to the pertinent rulings, and adequately develop those
arguments, we do not address them.

In addition, we note that, although the parties and
amici curiae have discussed to some extent the “all sums”
and “pro rata” rules of allocation of damages among mul-
tiple insurers, AFM’s arguments in this case, both in the
trial court and in the Court of Appeals, have never been
about how, if damage occurred over multiple policy periods

po 353

involving different insurers, such damages should be appor-
tioned. Rather, AFM maintained that FountainCourt failed
to meet its burden of proof and that, as a result, AFM was
not liable at all.6 Thus, although we briefly discuss the “all
sums” rule below, see 360 Or at 366 n 11, this case does not
present the opportunity to decide whether the “all sums” or
“pro rata” approach should be used in this context.

Accordingly, as previously stated, we reframe the
issues before us on review as follows: (1) Did the trial court
properly resolve the issues raised in the garnishment pro-
ceeding in a manner that comported with this court’s case
law concerning an insurer’s duty to defend and right to lit-
igate coverage issues, and did not implicate AFM’s right to
a jury trial; and (2) did the trial court correctly interpret
the insurance policies to conclude that coverage had been
triggered under the policies and that AFM was liable to
FountainCourt in light of FountainCourt’s verdict against
Sideco in the underlying negligence case?

To answer those questions, we first examine some of
the basic principles of insurance law and garnishment law,
and then, we turn to the question whether the trial court
properly concluded that AF'M was liable under the policies
at issue.

II. ANALYSIS
A. Preliminary Issues

We begin with several preliminary issues regard-
ing how this insurance dispute came to be litigated in a
garnishment proceeding separate from, but in conjunction
with, a negligence action. We first discuss, as an initial mat-
ter, why insurance coverage issues generally are litigated
separately from the liability of the insured, and then turn to
issues related to garnishment proceedings.

® We further note that AFM, in its questions presented on review, referred
to the present case as a “mixed coverage” case, which it described as “involving
some damage that is payable by an insurer and some damage that is not.” That
framing of the issue implicitly assumes that an “all sums” approach is imper-
missible under Oregon law. See 360 Or at 366 n 11, Because, as explained below,
AFM did not raise or litigate the applicability of the “all sums” approach below,
we do not reach it.

54

1. Duty to defend and right to separately litigate cover-
age issues

An insurer has a duty to defend its insured in an
action against the insured if the action involves any claim
stated against the insured that could impose liability for
conduct covered by the policy. Ledford v. Gutoski, 319 Or
397, 399, 877 P2d 80 (1994). That duty remains even if the
complaint also alleges conduct or damages that would not
fall within the policy’s coverage. Id. at 399-40. Thus, an
insurer’s duty to defend its insured in an action is not nec-
essarily co-extensive with its duty to indemnify its insured
when the insured does not prevail in that action. For that
reason, insurers defend under a reservation of rights, in
order to separately litigate coverage issues, as explained
below. That is, situations may arise in which the insured’s
liability in the underlying action, despite being potentially
covered under the policy in light of the pleadings, may not
ultimately be covered by the policy. The insurer’s and the
insured’s interests may align perfectly in the underlying
proceeding in which the insurer has a duty to defend, in
that both share the interest in establishing that the insured
is not liable to the plaintiff. Beyond that point, however,
the interests may diverge, particularly in cases in which
the insured’s liability may be based on conduct that is not
covered, on occurrences outside of the scope of the policy,
or on specifics embodied in policy exclusions, among other
reasons. Of course, the insured would prefer that, if found
liable, the damages be covered by insurance, whereas the
insurer would prefer that if its insured is found liable, the
liability is for something that is not within the policy’s cov-
erage. Thus, the potential for a conflict of interest often is
present in situations in which an insurer is obligated to
defend its insured.

When an insured is represented by attorneys pro-
vided by the insurer, the insured relinquishes control over
the defense of the claim, and a fiduciary relationship is
created between the insured and insurer that exists inde-
pendent of the insurance contract. Georgetown Realty v.
The Home Ins. Co., 313 Or 97, 111, 831 P2d 7 (1992). In
this situation, insurers are required “to exercise due dil-
igence in the defense of claims against insureds.” Maine

pi 355

Bonding v. Centennial Ins. Co., 298 Or 514, 518, 693 P2d
1296 (1985). As a practical matter, this means that an
insurer that defends its insured in an underlying action in
a way that is detrimental to the insured in order to favor
the insurer may become liable to the insured in tort. See,
e.g., Goddard v. Farmers Ins. Co., 344 Or 232, 179 P3d 645
(2008) (upholding punitive damage award against insurer
based on insurer’s bad faith in litigating underlying action
against insured).

Thetension created by situations wherethe insureds’
and insurers’ interests are not perfectly aligned has been
the subject of much litigation over the years, culminating
in the rule of law announced in Ferguson v. Birmingham
Fire Ins., 254 Or 496, 460 P2d 342 (1969). In Ferguson, the
insured was sued for timber trespass and tendered defense
to the insurer. The insurer offered to defend under a res-
ervation of rights, but the insured declined. At trial in the
underlying action, the jury found that the trespass had
occurred, but that it was not intentional. The insured then
brought an action against the insurer seeking to recover the
damages as well as the costs of defending the underlying
action. Jd. at 500-01. The insurer maintained that it had no
duty to defend because a policy exclusion applied. This court
explained that the insurer did have a duty to defend under
these circumstances, and discussed the potential difficulties
faced by an insurer in such a situation:

“Tf the insurer assumes the defense in the face of the
insured’s refusal to accede to insurer’s request for a res-
ervation of rights, it is said that the insurer ‘waives’ or is
‘estopped’ to assert the defense of noncoverage. And if the
insurer, in order to avoid the loss of its right to question
coverage, rejects the tender of the defense, it loses the ben-
efits that accrue from being represented by its own counsel
who ordinarily is experienced in the defense of such actions.
And if it guesses wrong on the question of coverage, it will
be required to pay the judgment and the costs of defense.
Thus the insurer is forced to choose between two alterna-
tives either of which exposes it to a possible detriment or
loss.

“What is the justification for imposing this dilemma
upon the insurer? Where there is a conflict of interest
between the insurer and insured and the judgment in the

56 ee

action against the insured can be relied upon as an estoppel
by judgment in a subsequent action on the issue of cover-
age, the control of the action by the insurer could adversely
affect the insured if the judgment was based upon conduct
of the insured not falling within the coverage of the policy.
Likewise, the insurer could be adversely affected by a judg-
ment based upon conduct for which there is coverage. But we
see no reason for applying the rule of estoppel by judgment
in such cases. The judgment should operate as an estop-
pel only where the interests of the insurer and insured
in defending the original action are identical—not where
there is a conflict of interests. If the judgment in the orig-
inal action is not binding upon the insurer or insured in a
subsequent action on the issue of coverage, there would be
no conflict of interests between the insurer and the insured.
in the sense that the insurer could gain any advantage in
the original action which would accrue to it in a subsequent
action in which coverage is in issue.”

Id. at 509-11 (emphasis added; footnotes omitted). In sum,
an insurer is not precluded (collaterally estopped) by the
judgment in the underlying action from taking a position
in a later coverage proceeding that the damages awarded
in the underlying action are not covered by the insurance
policy. See Paxton-Mitchell Co. v. Royal Indemnity Co., 279
Or 607, 613 n 2, 569 P2d 581 (1977) (so noting).

Relying on Ferguson, AFM argues that its interests
and Sideco’s interests were in conflict with respect to cov-
erage, and therefore it was “not bound by the facts of the
underlying lawsuit,” and “not bound by the factual findings
assumed within the judgment.” It argues therefore that “the
nature of Sideco’s liability” was a genuine issue of material
fact that could not be decided based on the verdict in the
underlying case, but was subject to being litigated anew in
the subsequent proceeding. AFM contends that the trial
court, in effect, precluded it from litigating Sideco’s liability
as a factual issue at the garnishment proceeding and thus
collaterally estopped AFM, in a manner inconsistent with
the holding of Ferguson. Although we agree with AFM’s ini-
tial proposition—that there were potential conflicts between.
AFM and Sideco and that the rule from Ferguson does have
application here—AFM misapprehends how the rule from
Ferguson applies in this case.

Po 387

At the center of this dispute is a provision in the
insurance contract stating that AFM “will pay those sums
that the insured becomes legally obligated to pay as damages
because of *** ‘property damage’ to which this insurance
applies.” (Emphasis added.) What the insured is legally
obligated to pay as damages can be determined only by
reference to the underlying action, which determined the
insured’s legal obligation to pay damages. Thus, in the sub-
sequent proceeding, the insurer is not, as AFM contends,
entitled to second-guess or retry “the nature of Sideco’s lia-
bility.” (Emphasis added.) That is not, however, because it is
“collaterally estopped” from doing so. Rather, that is because
the subsequent proceeding requires the court to evaluate—
as a matter of contract law—what, precisely, the insured
has become legally obligated to pay as damages in the prior
proceeding, in order to determine whether the policy covers
those damages. In other words, an insurer cannot, in a sub-
sequent proceeding, retry its insured’s liability, or alter the
nature of the damages awarded in that proceeding.

Ferguson does not suggest otherwise. Ferguson
indicates that an insurer is not obligated to pay a judgment
entered against its insured if it has not had an opportunity
to litigate, on its own behalf and not as a part of its duty
to defend the insured in the underlying proceeding, cover-
age issues such as whether an exclusion applies or whether
the damages awarded are otherwise covered by the policy.”

7 As the parties recognize, an attorney attempting to do both at the same
time in the same proceeding faces not only practical but potential ethical dilem-
mas. See, e.g., Oregon Formal Ethies Opinion No. 2005-121 (opining that attorney
hired by insurer to defend insured under reservation of rights could not ethically
move for dismissal of only claim covered by insurance); of, Eastham v. Oregon
Auto. Ins. Co., 273 Or 600, 607, 540 P2d 364 (1975) (in settlement negotiations in
this context, insurer must give equal consideration to the conflicting interests of
itself and its insured).

AFM argues on review that both the trial court and Court of Appeals deci-
sion in the present case impermissibly gave preclusive effect to the verdict in the
underlying case and, in essence, would require an attorney defending an insured
to try coverage issues in the underlying proceeding in a manner that is ethically
problematic. We disagree, The coverage issues were not, and could not have been,
tried in the underlying negligence proceeding. That the damages awarded in the
underlying proceeding needed to be considered in determining coverage in the
later proceeding does not in any way suggest that the coverage issues could or
should have been litigated in the underlying proceeding, or that AFM was pre-
cluded from making any legal argument or presenting any evidence on a genuine
issue of material fact in the garnishment proceeding.

58 ee

Those matters may be litigated in a subsequent proceed-
ing, but what is subsequently litigated is constrained by the
nature of the contractual obligations between the insurer
and the insured which, as noted above, here involves evalua-
tion of what “the insured [became] legally obligated to pay as
damages” in the underlying proceeding. Contrary to AFM’s
suggestions, what the insured became legally obligated to
pay as damages in the underlying proceeding did not pres-
ent a “genuine issue of material fact” for a jury to decide in
the later proceeding. Rather, what the insured had become
obligated to pay as damages and whether the insurer ulti-
mately was liable under its policy presented questions of law
for the court to determine by reference to (a) the contract and.
(b) the judgment and record in the underlying proceeding.

That is not to say, however, that the judgment in
the underlying case had any preclusive effect as to factual
issues and legal issues relating to insurance coverage, which
brings us to our next topic of discussion—how such determi-
nations are to be made in subsequent proceedings concern-
ing insurance coverage.

2. Garnishment as a method for determining insurance
obligations

There are numerous ways that insurance litigation
after an insured has become liable for damages may come
before the courts. Often either the insurer or the insured
seeks a declaratory judgment. See, eg., ZRZ Realty v.
Beneficial Fire and Casualty Ins., 349 Or 117, 241 P3d 710
(2010), on recons, 349 Or 657, 249 P3d 111 (2011). Sometimes
such issues are raised by way of equitable claims for contri-
bution. See, e.g., Firemen’s Ins. v. St. Paul Fire Ins., 243 Or
10, 411 P2d 271 (1966). Sometimes, as in this case, the issue
is raised by way of garnishment. See, e.g., A&T Siding, Inc. v.
Capitol Specialty Ins. Corp., 358 Or 32, 359 P3d 1178 (2015).

ORS 18.352 provides:

“Whenever a judgment debtor has a policy of insurance
covering liability, or indemnity for any injury or damage
to person or property, which injury or damage constituted
the cause of action in which the judgment was rendered,
the amount covered by the policy of insurance shall be

po 359

subject to attachment upon the execution issued upon the
judgment.”

ORS 18.710(1) provides that “[a] debtor’s challenge to a gar-
nishment shall be adjudicated in a summary manner at a
hearing before the court with authority over the writ of gar-
nishment.” ORS 18.782 allows for the calling of witnesses at
the hearing, and provides that “[t]he proceedings against a
garnishee shall be tried by the court as upon the trial of an
issue of law between a plaintiff and defendant.” (Emphasis
added.)

Thus, the garnishment statutes contemplate that
issues such as those presented here will be resolved by a
trial to the court. AFM argues that because a garnishment
proceeding is an action at law rather than in equity, a party
is entitled to a jury trial on fact issues. See Or Const, Art I,
§ 17 (“In all civil cases the right of Trial by Jury shall remain
inviolate.”); Or Const, Art VII (Amended), § 3 (“In actions
at law, where the value in controversy shall exceed $750,
the right of trial by jury shall be preserved|[.]”); Horton v.
OHSU, 359 Or 168, 173, 376 P3d 998 (2016) (“Article I, sec-
tion 17, guarantees a jury trial in those cases in which the
right to a jury trial was customary at the time the Oregon
Constitution was adopted and in cases of like nature.”).

On review, AFM makes a sweeping argument
that there were triable issues of fact relating to (1) what
damages were caused by an “occurrence” under the poli-
cies and occurred during the policy periods; (2) whether the
damages in the underlying case were “property damage”
under the policies; and (3) whether various exclusions, such
as the multi-unit exclusion and “one or more of the busi-
ness risk exclusions,” barred coverage. The first two issues,
as litigated in this case, involve questions of law concern-
ing the interpretation of the insurance policies in light of
undisputed facts; we discuss them below. As for the third,
concerning the applicability of various exclusions, although
we agree in general that the determination of matters per-
taining to exclusions often will require trying issues of
fact, we need not resolve in the present case whether the
trial court erroneously failed to submit any such issues to
ajury. As noted above, AFM failed to assign error or make

0

any arguments in the Court of Appeals concerning factual
issues relating to any policy exclusions, see 360 Or at 352,
so no questions concerning policy exclusions were “properly
before the Court of Appeals,” ORAP 9.20, and therefore
they are not properly before this court. Thus, in light of our
discussions below concerning the meaning of various pol-
icy provisions and triggers of coverage, and in light of the
limitation of the issue before us on review, we have no need
to address whether the trial court erred in denying AFM’s
motion for a jury trial.

B. Coverage Issues

As noted, AFM raises issues concerning whether
the trial court properly allocated the burden of proof,
whether FountainCourt proved that the underlying judg-
ment against Sideco was “property damage,” whether
FountainCourt proved an “occurrence” that triggered cov-
erage, and whether the damages were properly allocated to
AFM. We turn first to burdens of proof.

1. Burdens of proof

With respect to burdens of proof, the law is settled.
As we noted in ZRZ:

“{T]he insured *** has the burden to prove coverage while
the insurer *** has the burden to prove an exclusion from
coverage. Compare Stanford v. American Guaranty Life Ins.
Co., 280 Or 525, 527, 571 P2d 909 (1977) Gnsurer has the
burden to prove an exclusion), with Lewis v. Aetna Insurance
Co., 264 Or 314, 316, 505 P2d 914 (1973) (insured has the
burden to prove coverage).”

349 Or at 127. There is no ambiguity in how that rule
applies in the present case. Both “property damage” and
“occurrence,” as used in the policy, relate to coverage, and
thus AFM is correct that FountainCourt, standing in the
shoes of the insured, had the burden of demonstrating both
that Sideco had become “legally obligated to pay as dam-
ages because of *** ‘property damage,” and that there
had been an “occurrence,” defined by the policy. AFM, by
contrast, had the burden as to issues relating to its policy
exclusions.

Po 361
2. Property damage

AFM contends that FountainCourt failed to estab-
lish that Sideco had become obliged to pay damages because
of “property damage.” The gist of AFM’s argument seems to
be that, under Ferguson, 254 Or at 510-11, the parties were
not bound by the facts found by the jury in the underlying
trial, and at most, FountainCourt established a mere possi-
bility that the damages found by the jury were for “property
damage” as defined in the insurance policies. In particu-
lar, AFM argues that the damages found by the jury in the
underlying proceeding are not “property damage” as defined
in the insurance policy, because the damages in the under-
lying proceeding could have included the costs of repairing
“defective work” by Sideco, and “defective work” does not
constitute property damage (citing Wyoming Sawmills v.
Transportation Ins. Co., 282 Or 401, 578 P2d 1253 (1978)).

As explained above, Ferguson does not require a
court resolving an insurance coverage issue to disregard
the nature of the damage award in the underlying action.
Indeed, given that the coverage generally is based on the
“sums the insured becomes legally obligated to pay as dam-
ages” because of property damage, the damage award in the
underlying proceeding is a key to resolution of the coverage
issue. 360 Or at 357. The policies at issue here define prop-
erty damage as “[p]hysical injury to tangible property.” In
this case, as noted, the only claim that went to the jury with
respect to Sideco concerned property damage, and the jury
was instructed that FountainCourt was required to “prove
physical damage to their property,” and that the “measure of
damages for partial destruction of real property is the rea-
sonable cost of repairing damaged property.” 360 Or at 346
(emphasis added). The jury was not instructed that it could
award damages for “defective work”—it was instructed it
could award damages for “physical damage.” Contrary to
AFM’s urging, Wyoming Sawmills does not stand for the
proposition that actual physical damage to property is not
covered under an insurance policy merely because it may
be associated with defective workmanship by an insured.
Rather, that case addressed whether “intangible” damage
such as “depreciation in value” fell within the meaning of

6.

“physical damage” as used in an insurance policy. 282 Or at
406. This court held that “in the absence of a showing that
any physical damage was caused to the rest of the building
by the defective studs and that the labor cost was for the rec-
tification of any such damage, plaintiff cannot recover.” Id.
at 406-07. Here, in contrast to Wyoming Sawmills, the jury
awarded damages based on Sideco’s negligence that caused.
physical damage to the FountainCourt buildings. See id. at
407 (“We do not hold that if damage was occasioned to any
part of the building [other than the defective studs] such
damage is not covered.”). This case was tried to the jury
on the theory that Sideco’s negligence had caused physical
damage to property. We find no significant legal distinction
between physical damage to property as awarded in the
underlying case and “physical injury to tangible property”
as used in the insurance contracts.® The trial court did not
err in determining, as a matter of law based on interpre-
tation of the insurance contracts, that the sum that Sideco
became legally obligated to pay as damages in the underly-
ing action were for “property damage.”

8. Trigger of coverage

That brings us to AFM’s argument that Fountain-
Court was obligated to, but could not, establish that the
damage was caused by an “occurrence” within the periods
covered by the AFM policies. As noted, both parties took the
position at the garnishment hearing that the water damage
at issue here is cumulative, and that it was not possible to
determine how much of it had occurred during what pol-
icy periods. We do not understand AFM to be contending
otherwise on appeal. Rather, it argues that Oregon follows
an injury-in-fact rule for the triggering of coverage, that
FountainCourt failed to prove “based on facts in evidence
at the trial” the amount of damages that occurred between
May 1, 2004 and May 1, 2006, when the AFM policies were
in effect, and that therefore coverage was not triggered. As

® Much of AFM’s argument in regard to “property damage” appears to be
based more on what is in the exclusions found in its policies, rather than the defi-
nitions. However, as noted, the insurer bears the burden of establishing that an
exclusion applies, and AFM neither assigned error nor argued on appeal that the
trial court had erred in concluding that it failed to meet its burden with respect
to exclusions.

Po 363

explained below, AFM is incorrect about how trigger-of-
coverage issues are analyzed in cases such as this involving
continuous damage that occurs over the course of multiple
policy periods.

In St. Paul Fire v. McCormick & Baxter Creosoting,
324 Or 184, 923 P2d 1200 (1996), this court addressed
trigger-of-coverage issues concerning a number of general
comprehensive liability insurance policies, in the context of
deciding an insurance dispute about environmental dam-
age to real property that occurred over the course of several
decades. Several of those policies used the terms “occur” and
“occurrence” in a manner similar to the policy at issue here.
Id, at 194-95, 197-99, 200. The damage in that case had
been discovered in the 1970s, and the question presented
was whether coverage was triggered under any or all of the
pre-1970 insurance policies. The insurers argued that cov-
erage was not triggered until the damage was discovered.
This court rejected that argument:

“The operative phrase in the trigger clauses contained
in the caused-by-accident policies is ‘during the policy
period.’ The common meaning of ‘during’ is ‘at some point
in the course of” Webster’s Third New Int'l Dictionary 703
(unabridged ed 1993). The trigger clause states that, if an
insurable event—i.e., an accident—happens at some point
in the course of the policy period, then that event is cov-
ered. There is no wording in the pertinent policies that
would support the insurers’ reading, and the insurers that
issued the caused-by-accident policies point to none.

fe ef ae

“(Various policies from the 1960s] contain definitions
of ‘occurrence’ that provide that an occurrence has taken
place if there is ‘direct injury to or destruction of tangible
property during the policy period.’ (Emphasis added.) Those
words are unambiguous. If property is injured during the
policy period, there has been an ‘occurrence, and coverage
under the policy is triggered.”

324 Or at 201 (emphasis in original). The court stated that
“[tlhe policies do not make an ‘occurrence’ depend on the
fixing of financial responsibility, or damages.” Id. The court
therefore concluded that those insurers were not entitled to

56 ee

summary judgment on the ground that their policies had
not been “triggered.” Id. at 202. Implicit in this court’s hold-
ing was that, although the damage at issue there had begun.
to occur before the policies were in effect, and continued to
occur after the policies were no longer in effect, coverage
under those policies was nonetheless “triggered” because
the damage was ongoing during the policy periods.

That conclusion comports not only with the policy
language at issue in St. Paul Fire,® but also with the deci-
sions of most other courts that have considered the issue,
as well as treatises discussing this topic. See, e.g., Allan D.
Windt, Insurance Claims and Disputes § 11.4, 11-102 (6th ed
2013) (“The correct answer, and the rule in the vast majority
of the courts to have addressed the issue, is that coverage
is triggered from the date of the first latent injury/damage
and continues to be triggered at least until the date the
injury/damage first becomes manifest.”); id. § 11.4 at 11-107
(“{W]hen there is an ongoing process of property damage or
bodily injury, every policy period in effect during the ongoing
damage/injury process provides coverage.”); cf Lee R. Russ
and Thomas F. Segalla, 15 Couch on Insurance § 220:26 (3d
ed 2005) (“in continuous trigger cases, insurers face liabil-
ity up to their respective per-occurrence limits for separate
occurrence for each triggered policy year in which they were
on the risk”).

AFM does not seriously dispute that there was proof
that some property damage did occur during the time its
policies were in effect. Indeed, both parties provided expert
opinion that supported that conclusion. Rather, AFM’s posi-
tion has been that, because FountainCourt had the burden
of demonstrating an “occurrence” during the policy period,
it necessarily was required to demonstrate the amount of
damage that occurred during the policy period. That posi-
tion is inconsistent with our holding in St. Paul Fire, and
it appears to be at odds with the provision in the policies
indicating that property damage not known to the insured

® The policies at issue here similarly support such an interpretation. See, e.g.,
360 Or at 349 (““[Plroperty damage’ which occurs during the policy period and
was not, prior to the policy period, known to have occurred by any insured ***
includes any continuation, change or resumption of that ‘bodily injury’ or ‘prop-
erty damage’ after the end of the policy period.”).

Po 365

prior to the policy period “includes any continuation, change
or resumption of that ‘bodily injury’ or ‘property damage’
after the end of the policy period.” 360 Or at 349 (emphasis
added).!° In sum, no genuine issue of material fact needed
to be resolved at the garnishment proceeding concerning
whether at least some property damage occurred when the
AFM policies were in effect. The court correctly rejected,
as a matter of law, AFM’s arguments that FountainCourt
was required to prove the precise amount of damages that
occurred during the policy period in order to demonstrate
that there had been an “occurrence” that triggered coverage
under the policies.

4, Allocation of liability among multiple insurers

Inherent in many of AF'M’s arguments in this court
is an assumption that, because it insured Sideco for only
a portion of the time that the damage was occurring, it
cannot be held liable for the entire amount that Sideco is
legally obliged to pay to FountainCourt. As described above,
AFM’s primary position throughout this litigation has
been that it has no liability at all. However, AFM also sug-
gests at least implicitly in its arguments to this court that
any liability that it has should not be for the full amount
of damages that Sideco owes to FountainCourt. Whatever
the abstract merits of AFM’s assumption might be, the fact
is that AFM did not argue at the garnishment proceeding
about how, if it were found to be liable for damages awarded
to FountainCourt against Sideco, such damages should be
allocated among policy periods and/or multiple potentially
responsible parties. It did not argue in the trial court, or
in the Court of Appeals, that it might be liable for some but
not all of the damages. In this court, as noted above, see

® AFM’s position also is inconsistent with the following observation from
Windt 3 Insurance Claims and Disputes § 11.4 at 11-107-08, that
“when there is an ongoing process of property damage or bodily injury, every
policy period in effect during the ongoing injury process provides coverage.
The burden should be on the insured to prove that there was, in fact, such
injury/damage during the policy period. ‘The insured should also have the
burden of quantifying such injury/damage, unless (i) the issue is how to allo-
cate the injury/damage among policies covering consecutive policy periods, or
(i) quantification is impossible.”
(Emphasis added; citations omitted.)

360 Or at 353 n 6, AFM described this case as “involving
some damage that is payable by an insurer and some dam-
age that is not.” That framing of the issue led to the parties
and various amici raising questions and making arguments
about how liability should be allocated in situations where
multiple insurers may be potentially liable.

In situations such as this, where it is not possible,
as a matter of proof, to quantify how much continuous dam-
age took place during specific policy periods, courts have
resolved the question by reference to policy provisions, or
when a policy does not contain specific provisions about
allocation among insurers, by adopting a judicially created
method of allocation. “Because in these types of cases it is
virtually impossible to allocate to each policy the liability for
injuries occurring only within its policy period, the courts
are left with the nettlesome problem of how to allocate dam-
ages among the policies.” Russ and Segalla, 15 Couch on
Insurance § 220:25. Most of the courts that have addressed
this problem have taken one of two possible approaches:
One is often referred to as the “all sums” approach, and
the other is often called the “pro rata” approach." AFM has

1 The “all sums” approach is exemplified by Keene Corp. v. Insurance Co. of
North America, 667 F2d 1034, 1047 (DC Cir 1981), which involved asbestos expo-
sure over a long period of time:

“The policies at issue in this case provide that the insurance company
will pay on behalf of [its insured] ‘all sums’ that [the insured] becomes legally
obligated to pay as damages because of bodily injury during the policy period.
*«* [When the insured was] held liable for an asbestos-related disease, only
part of the disease will have developed during any single policy period. The
rest of the development may have occurred during another policy period or
during a period in which [the insured] had no insurance. The issue that
arises is whether an insurer is liable in full, or in part, for [the insured’s]
liability once coverage is triggered. We conclude that the insurer is liable in
fall, subject to [policy provisions relating to other insurance].”

‘The court in that case further noted: “There is nothing in the policies that pro-
vides for a reduction of the insured’s liability if an injury occurs only in part
during a policy period.” Id. at 1048. The court observed that the policies “do
not distinguish between injury that is caused by occurrences that continue to
transpire over a long period of time and more common types of injury. Nor do
the policies provide that ‘injury’ must occur entirely during the policy period for
full indemnity to be provided.” Id, at 1049 (footnote omitted). See also Russ and
Segalla, 15 Couch on Insurance § 220.27 (citing cases following the “all sums”
approach).

The “pro rata” approach, by contrast, takes into account the span of time
over which the damage occurred, then allocates to each insurer a portion of the
Liability based on how much of that time that insurer’s policy was in effect. This

Po 367

never taken the position in this litigation that Oregon courts
should eschew the “all sums” approach in favor of a “pro rata”
approach, or vice versa. Rather, it has taken the position
that neither approach is consistent with Oregon law because
in this circumstance, an insured is unable to demonstrate
that there is coverage at all. That is, AFM’s position has
been that, in cases in which damage occurs over a number
of years, and spans different insurance policies, and no way
exists to pinpoint what amount of damage occurred at what
point in time, the insured cannot establish that coverage
has been triggered. As we explained above, 360 Or at 364-
65, we disagree with the premise of that argument, i.ec., that
coverage was not triggered if it is impossible for an insured
to demonstrate how much damage occurred during a policy
period.

It appears that the trial court implicitly did apply
some variation of the “all sums” approach in this case. That
is, the trial court concluded that FountainCourt had estab-
lished that the AFM policies had been triggered—property
damage had occurred during the AFM policy periods. It also
concluded that the Clarendon policy had been triggered, but
that Clarendon had met its burden to establish that it none-
theless was not liable because the damages fell within a pol-
icy exclusion. By entering judgment against AFM for the
entire unpaid amount of the underlying judgment against
Sideco, the court implicitly concluded that AFM was respon-
sible for the entire amount and not a prorated amount,
although some of the damage necessarily had occurred
when the Clarendon policy was in effect, given the court’s
conclusion that that policy was triggered. The trial court’s
conclusion appears to be consistent with Cascade Corp. v.

approach was explained in Boston Gas Co. v. Century Indem. Co., 454 Mass 337,
361, 910 NE2d 290 (2009), as consistent with the “occurrence” definitions in the
policies at issue in that case, and superior, to the “all sums” approach as a matter
of policy, because the “all sums” approach does not solve the problem of allocation
among insurers, but merely postpones it, leaving it to be decided in a subsequent
action for contribution. The “pro rata” approach is premised on the notion that an
insurer should be responsible for the amount of damage that took place during
its policy period. See generally Windt, 2 Insurance Claims and Disputes § 6.47
(“If *** the covered damages cannot, as a practical matter, be allocated to one
particular policy period as opposed to another, the damages should ultimately be
allocated among the solvent insurers based upon the period of time each insurer
covered the ongoing damage.”).

68 ee

American Home Assurance Co., 206 Or App 1, 8-10, 185 P3d
450 (2006), rev dismissed, 342 Or 645 (2007). In that case,
the Court of Appeals, in a somewhat analogous context con-
cerning liability of multiple excess insurers, indicated that,
while a pro rata approach was suitable in determining allo-
cation among insurers in contribution actions, it did not pro-
vide a basis for reducing the insurer’s liability to its insured.

AF™M did not raise any issue in the Court of Appeals
in the present case that the trial court erred in taking that
approach. Nor did the Court of Appeals decide any such
issue, but in fact, specifically determined that it “need not
reach that question.” FountainCourt, 264 Or App at 488
n. 12. Thus, while the “all sums” rule was implicated here
in that the trial court’s judgment appears to have embodied
that approach, the propriety of the trial court doing so was
not preserved for our review, and we decline to address it.”

III. CONCLUSION

To summarize, no genuine issue of material fact was
presented by the parties at the garnishment hearing about
whether some property damage to FountainCourt’s build-
ings occurred during the AFM’s policy periods due to Sideco’s
negligence. The “genuine issues of material fact” that AFM
urged in the trial court concerned (1) what damage occurred.
during the policy periods, and (2) whether “property dam-
age” under the policies differed in some legally significant
way from the property damage for which Sideco had been
held liable in the underlying proceeding. As to the first ques-
tion, AFM’s casting of the timing-of-damage issue as a gen-
uine issue of material fact on which FountainCourt bore the
burden of proof was based on AFM’s mischaracterization of
the policy as barring coverage of any damages that fell out-
side of the policy periods, and on its erroneous assumption
that an insured in this situation is required to demonstrate

12 We emphasize that the application of an “all sums” or “pro rata” approach
to determining liability is not simply an abstract question of insurance law, but
often is a matter that must be determined based on the language of the insurance
policies at issue, when such issues are properly raised by the parties. Neither
party in the present case has made any argument about how specific policy pro-
visions, such as the provision quoted above concerning “continuation” of property
damage “after the end of the policy period,” might affect such an analysis. 360 Or
at 349.

Po 369

the precise amount of damage that occurred at a given time
in order to establish that there has been an “occurrence”
that triggered coverage. As explained above, the legal prem-
ises of both of those arguments are flawed. As to the second
question, the trial court properly addressed it as a question
of law, requiring it to interpret the policies’ provisions in
light of the judgment and record from the underlying pro-
ceeding. Given the manner in which AFM chose to litigate
this case at the garnishment proceeding and in the Court of
Appeals, and given the limited scope of the issues before us
on review, we conclude that the trial court and the Court of

Appeals correctly rejected AFM’s arguments as a matter of
law.

The decision of the Court of Appeals is affirmed.
The supplemental judgment for garnishment is affirmed.
The supplemental judgment awarding attorney fees, costs,
and disbursements is reversed as to the attorney fee award
and is otherwise affirmed.

370

Argued and submitted May 9; decision of Court of Appeals affirmed; judgment
of circuit court affirmed in part and reversed in part, and case remanded to
circuit court for resentencing September 22, 2016

STATE OF OREGON,
Petitioner on Review,
v.

DENNIS JAMES DAVIDSON,
Respondent on Review.
(8063387) (Control)
STATE OF OREGON,
Respondent on Review,
vw
DENNIS JAMES DAVIDSON,
Petitioner on Review.
($063480)

(CC 11043121; CA A150292;
SC S063387 (Control), SC S063480)
380 P3d 968

Rolf C. Moan, Assistant Attorney General, Salem,
argued the cause and filed the brief for petitioner on review/
respondent on review State of Oregon. With him on the brief

Po 371

were Ellen F. Rosenblum, Attorney General, and Paul L.
Smith, Solicitor General.

Ernest G. Lannet, Chief Defender, Salem, argued the
cause and filed the brief for respondent on review/petitioner
on review Dennis James Davidson.

Jordan R. Silk, Portland, filed the brief on behalf of amici
curiae Oregon Justice Center. With him on the brief was
Alexander A. Wheatley.

BREWER, J.

The decision of the Court of Appeals is affirmed. The judg-
ment of the circuit court is affirmed in part and reversed
in part, and the case is remanded to the circuit court for
resentencing.

372 Le

BREWER, J.

Defendant was convicted of two counts of public
indecency under ORS 163.465 for exposing himself at a
public park; because he had two prior felony convictions for
public indecency, and the trial court found no ground for
downward departure, defendant was sentenced consecu-
tively on each count to life imprisonment without the possi-
bility of parole under ORS 137.719(1).! The Court of Appeals
affirmed defendant’s convictions but held that the sentences
violated Article I, section 16, of the Oregon Constitution,
which provides that all penalties shall be proportioned to
the offense.” State v. Davidson, 271 Or App 719, 353 P3d 2
(2015). Defendant sought review in this court, arguing that
the Court of Appeals erred in upholding his convictions. The
state also sought review, asserting, first, that defendant’s
sentences are unreviewable because they are “presumptive”
sentences and, second, that the sentences were not unconsti-
tutionally disproportionate in light of the facts of this case
and the circumstances of defendant’s previous crimes. We
allowed both petitions. As explained below, we affirm defen-
dant’s convictions, but we conclude that the sentences are
unconstitutionally disproportionate as applied to defendant.
Accordingly, we affirm the decision of the Court of Appeals,
and we reverse defendant’s sentences and remand to the cir-
cuit court for resentencing.

This case presents some of the same issues that we
recently addressed in State v. Althouse, 359 Or 668, 375 P3d
475 (2016). Althouse, in fact, forecloses the state’s review-
ability argument, and we therefore reject that argument
without further discussion. See id. at 678 (holding that
ORS 138.222(2)(a) does not preclude review of sentence
of life imprisonment without possibility of parole imposed
pursuant to ORS 187.719). In addition to its reviewability

1 ORS 187.719(1) provides:
“The presumptive sentence for a sex crime that is a felony is life impris-

onment without the possibility of release or parole if the defendant has been

sentenced for sex crimes that are felonies at least two times prior to the cur-

rent sentence.”

2 Article I, section 16, provides, in part:

“Cruel and unusual punishments shall not be inflicted, but all penalties shall

be proportioned to the offense.”

pT 373

holding, Althouse set out a framework for the consideration of
as-applied constitutional challenges to sentences imposed
pursuant to ORS 137.719. Accordingly, we first address
defendant’s challenge to his underlying convictions under
ORS 163.465 and then evaluate the constitutionality of
the life sentences imposed for those convictions under the
framework set out in Althouse.

I. FACTS AND PROCEDURAL HISTORY
A. Current Convictions

Because the jury found defendant guilty of the cur-
rent charges, we view the evidence presented at trial in
the light most favorable to the state. State v. Agee, 358 Or
325, 327, 364 P3d 971 (2015). A group of women and chil-
dren were having lunch in a park in Salem when defendant
walked by and waved at them. After the older children left
the group to play on a nearby play structure, a man came by
and told the group that defendant was behind a nearby tree.
One of the women, Davis, looked over her shoulder and could
see defendant peeking out at her from behind the tree.

When Davis stood up and turned, she was able to
see that defendant was exposing his genitals and mastur-
bating. Davis called 9-1-1 and gathered her group together
to return to their car. As they left, defendant approached
and told Davis several times that he was leaving; he then
left through the south end of the park. Responding offi-
cers searched the area to the south of the park and found
defendant standing at a fence bordering the park, looking
into the park. As the officers approached defendant, they
could see that he had his pants open and was masturbat-
ing. Defendant was then arrested and subsequently charged
with and convicted by a jury of two counts of public inde-
cency, one count for the incident near Davis’s group and the
other count for the incident at the border of the park shortly
before he was apprehended.

B. Prior Public Indecency Convictions

Defendant’s prior convictions for public indecency
were relevant to his sentencing on his current convic-
tions, because the prior convictions elevated those offenses

374 Le

from misdemeanors to felony public indecency. See ORS
163.465(2).? In the guilt phase of the trial in this case, for
the purpose of establishing that the current offenses were
properly charged as Class C felony offenses, defendant
stipulated to the existence of three prior public indecency
convictions. The details of defendant’s prior convictions, as
described below, were presented in a presentence investiga-
tion report in the course of the sentencing proceeding.*

In 2006, defendant was convicted of the crime of
misdemeanor public indecency and placed on probation.
That offense occurred when defendant was observed by a
neighbor while defendant was standing on the porch of a
house and masturbating. When defendant saw the neighbor,
he called out to her, “you want some of this?” as he continued
to masturbate. The neighbor called the police. Nobody was
home at the house when the incident occurred, but, when
questioned by the police, defendant claimed to have been
visiting “Amy” at the house and suggested that he had some
sort of intimate relationship with “Amy.” Defendant even
described some items inside the house. The police later con-
tacted the homeowner, who was not named “Amy,” and she
denied knowing defendant. The police also discovered that
defendant’s grandmother lived near the house where the
offense occurred, that defendant had stayed with his grand-
mother at some point in time, and that his grandmother
had entered his bedroom and discovered him masturbating
while looking out the window toward the house where the
offense later occurred. Finally, the police located a letter in
defendant’s backpack written by defendant to another per-
son, stating that he had a crush on her and had watched her
mow her lawn. The woman who owned the house where the
offense occurred acknowledged that she regularly mowed the

® ORS 163.465(2) provides:
“(a) Public indecency is a Class A misdemeanor.
“(b) Notwithstanding paragraph (a) of this subsection, public indecency
is a Class C felony if the person has a prior conviction for public indecency or
a crime described in ORS 163.355 to 163.445 or for a crime in another juris-
diction that, if committed in this state, would constitute public indecency or
a crime described in ORS 163.355 to 163.445
4 At sentencing, defendant also made a personal statement to the court, but
neither party presented additional evidence beyond what was contained in the
presentence investigation report.

| 35

lawn around her house. The woman subsequently obtained
a stalking protective order against defendant.

Defendant was convicted of misdemeanor public
indecency arising out of the incident on the porch, and he
was sentenced to probation for that offense. Several months
later, while defendant was on probation for that offense,
a number of school staff members reported that they had
observed defendant expose his genitals while masturbating
near an elementary school playground. One of those staff
members indicated that, when defendant saw her looking at
him through a window, he turned to face her as if he wanted
her to observe him. Three children also saw defendant near
the school, although the record did not indicate whether
they saw him expose his genitals. Defendant was convicted
of public indecency for that conduct, and, because he had a
prior misdemeanor public indecency conviction, his convic-
tion for the school incident was elevated to a felony under
ORS 163.465(2). Defendant served a 28-month prison sen-
tence for that conviction.

Shortly after defendant was released from prison on
his sentence for the school incident, defendant again was
arrested for and convicted of felony public indecency. In that
incident, a group of women (who had a child with them) were
near their car in a store parking lot when they observed
defendant looking at them while he exposed his genitals
and masturbated. When the police arrived, an officer also
observed defendant masturbating in the parking lot. After
defendant was apprehended, he told the police that he had
been masturbating inside a nearby pornography shop and
that he had masturbated in front of the women after he left
the store because he thought that it would make the women
“hot” and that he would be able to get a “date.”

C. Other Prior Convictions and Misconduct

In evaluating disproportionality challenges to crim-
inal sentences, it is appropriate for a court to consider any
prior conviction, as well as misconduct that did not result
in convictions. Althouse, 359 Or at 679; State v. Rodriguez/
Buck, 347 Or 46, 78, 217 P3d 659 (2009). In the present case,
the presentence investigation report indicated that defen-
dant first came into contact with police at age 10, when he

376 Le

was accused of shoplifting a toy.5 He was first referred to
the juvenile court at age 14 based on a fighting incident at
his junior high school; that referral was disposed of infor-
mally. When he was in his late teens and early twenties,
defendant had numerous contacts with law enforcement,
primarily involving possession of controlled substances. He
also was arrested twice for battery based on fights with his
girlfriend, but those charges were dismissed. He was con-
victed on one occasion of trespass and investigated for tres-
pass based on several other incidents, some of which arose
in conjunction with the public indecency incidents described.
above. Defendant also had a single prior conviction for driv-
ing while suspended.

Most of defendant’s convictions for offenses other
than public indecency resulted in probationary sentences.
The record shows that defendant consistently performed
poorly on probation and post-prison supervision, regularly
committing new offenses while under supervision, as well
as failing to appear at various hearings concerning proba-
tion violations. While incarcerated, defendant received sanc-
tions for misconduct (generally for disobedience) on numer-
ous occasions. Defendant has been diagnosed with various
substance dependence disorders, as well as with a cognitive
disorder due to a traumatic brain injury that occurred when
he was a teenager.

D. Sentencing

At defendant’s sentencing, the state argued that
a sentence of life imprisonment without the possibility of
parole was appropriate, noting in particular that defen-
dant’s first two public indecency offenses were committed in
a brief time interval, that the third offense occurred within
days after he was released from prison on the prior offenses,
and that the current crimes also occurred within days of his
release from prison for the third offense. For the most part,
the state’s focus at sentencing was not on the specifics of
any of the public indecency offenses themselves (other than

5 Defendant does not challenge the trial court’s consideration of evidence of
his prior misconduct and other criminal offenses contained in the presentence
investigation report.

po 377

noting that they caused harm to the victims), but rather on
defendant's recidivism.

In response, defense counsel emphasized the fact
that none of defendant’s offenses involved violence or physi-
cal contact with anyone; he argued that a life sentence with-
out the possibility of parole is simply too harsh a punishment
for masturbating in public, even for a repeat offender. In his
own statement at sentencing, defendant showed little or no
understanding that society views his public sexual behavior
as unacceptable.®

The circuit court noted that, under ORS 187.719, the
presumptive sentences for defendant’s current convictions
were life imprisonment without the possibility of parole and
concluded that it could not identify any mitigating factor that
would justify downward departures from those presumptive
sentences.” Accordingly, the court sentenced defendant to
consecutive life sentences without the possibility of parole
on. the current convictions.

E. Appeal

Defendant appealed, arguing that (1) his convic-
tions should be reversed because the trial court had erred
in failing to give a requested jury instruction on attempted
public indecency; and (2) his sentences should be reversed
because the life sentences without the possibility of parole
that the court imposed were unconstitutionally dispropor-
tionate under Article I, section 16. Defendant did not argue
that ORS 187.719 is facially unconstitutional. Rather, he
asserted that the application of that statute in the present
circumstances was unconstitutional under Article I, sec-
tion 16, because the penalty was disproportionate to the

® Defendant’s statements were consistent with the opinions of several mental
health professionals who had evaluated him over the years. For example, the
report of defendant’s 2009 mental health evaluation states:

“He has obviously distorted sexual attitudes and opinions, believing that

women might be attracted to him by masturbating in publicin their presence.”

7 Defendant did not assert before the circuit court, nor has he asserted on
appeal or review, that his mental health circumstances, including his apparent
lack of appreciation for the criminality of his conduct, amount to a mitigating fac-
tor in assessing the proportionality of his sentences. We therefore do not consider
that issue here.

378 LL

offense. Defendant emphasized that public indecency his-
torically has been a misdemeanor offense under Oregon law,
see ORS 161.615(1) (maximum term of imprisonment for
highest-level misdemeanor offense is one year), and he urged
that the penalties imposed in this case were disproportion-
ate in comparison to sentences for other offenses of similar
or greater gravity.

The Court of Appeals rejected defendant’s jury
instruction argument without discussion, but it agreed with
defendant that, as applied to his circumstances, the life sen-
tences imposed on the two convictions for public indecency
were unconstitutionally disproportionate and, therefore,
reversed those sentences and remanded to the circuit court
for resentencing. Davidson, 271 Or App at 721 n 4, 745.

The state sought review of the Court of Appeals’
decision with respect to defendant’s sentences, and defen-
dant sought review of the Court of Appeals’ disposition of
his assignment of error relating to the jury instruction.
We granted both petitions for review, and, for the reasons
explained below, we affirm the decision of the Court of
Appeals with respect to both issues.

Il. CHALLENGE TO DEFENDANT'S
CONVICTIONS
We first consider defendant’s challenge to his con-
victions. ORS 163.465(1) provides:

“A person commits the crime of public indecency if while
in, or in view of, a public place the person performs:

“(a) An act of sexual intercourse;

“(b) An act of deviate sexual intercourse; or

“(c) An act of exposing the genitals of the person with

the intent of arousing the sexual desire of the person or
another person.”

Defendant was charged under paragraph (c) of that statute.

At trial, defendant moved for a judgment of acquit-
tal, arguing that the state was required to prove that, when
he exposed himself, he intended other people to see what he
was doing, and asserting that a person who surreptitiously

po 379

masturbates in a public place but does not intend to be
viewed by others does not violate that statute. That is, defen-
dant argued, the state was required to prove that defendant
exposed his genitals with the intent to arouse sexual desire
by being seen exposing himself in public, not simply that he
exposed his genitals intending to arouse sexual desire and
that that act occurred in, or view of, a public place. The trial
court denied defendant’s motion for judgment of acquittal.

Subsequently, in a colloquy regarding jury instruc-
tions, defense counsel requested an instruction on attempted
public indecency, arguing: “[I]n this case, because especially
in count two, or the second time [defendant] encountered
someone else, no one else was around to see him and when
he was seen, he fled. It could be seen as an attempt[.]” When
the trial court asked for further clarification about how the
evidence could support an attempt conviction, counsel indi-
cated that the instruction could potentially apply to both
counts, adding: “Well, because ‘exposed,’ your Honor, can be
a couple of things. The fact that [Davis] had to get up and
adjust her viewpoint to see what was going on, [defendant]
was not putting himself on display.” Defense counsel did not
specify precisely how he wanted the jury to be instructed
on attempted public indecency, but it is apparent from the
quoted colloquy that he sought the “attempt” instruction
as a basis for arguing to the jury that the state’s evidence
was insufficient to prove that defendant was trying to be
observed when he committed the “act of exposing the gen-
itals” described in ORS 163.465(1)(c), an argument similar
to the one that he had made in support of the motion for
judgment of acquittal.

“A party is generally entitled to a jury instruction
based on its theory of the case if the instruction is war-
ranted by the particular facts and correctly states the law.”
State v. Washington, 355 Or 612, 653, 330 P3d 596 (2014).
We presume that defendant wanted a standard instruction
on “attempt” that followed the text of the attempt statute
and thus would have been a correct statement of the law.
Under ORS 161.405(1), an attempt crime occurs when a per-
son “intentionally engages in conduct that constitutes a sub-
stantial step toward commission of the crime.” The conduct

380 Ld

that constitutes the substantial step must “(1) advance the
criminal purpose charged and (2) provide some verification
of the existence of that purpose.” State v. Walters, 311 Or 80,
85, 804 P2d 1164 (1991). In sum, an attempt instruction is
appropriate when the evidence could support a finding that
the defendant specifically intended to commit a crime and
took a substantial step toward doing so, but did not complete
the crime.

Defendant’s argument in this case, by contrast, was
not that the evidence permitted an inference that he intended
to carry out the charged offenses of public indecency but did
not complete them. Rather, his argument was that the state
was required to prove that he intended to arouse himself
by being observed exposing himself in public, and the state
failed to prove that he had the requisite intent to commit the
crimes at all. Stated differently, defendant’s theory was that
no public indecency crime was committed because he lacked
the requisite intent to commit that offense.

So understood, an attempt instruction based on
ORS 161.405 would not have advanced defendant’s theory
of the case. If defendant’s theory were correct, he would not
have been guilty of either an attempt—in that he would
have lacked the requisite specific intent to carry out that
offense—or the completed offense. Accordingly, even assum-
ing that defendant’s theory of the case was sound—an issue
that we do not reach in this case—an attempt instruction
would not have been an appropriate vehicle for advancing the
argument that defendant lacked the requisite intent to com-
mit the charged crime.’ It follows that the trial court did not
err in declining to give the requested attempt instruction.

II. AS-APPLIED CHALLENGE
TO DEFENDANT’S SENTENCES

We now turn to the state’s argument that the Court
of Appeals erred in concluding that defendant’s sentences
were unconstitutionally disproportionate under Article I,
section 16. As discussed, defendant had been convicted of

® As noted, defendant advanced the same theory of the case in his motion for
judgment of acquittal. He did not, however, assign error on appeal to the denial of
that motion.

Po 381

felony sex crimes as defined in ORS 163A.005 twice before
being sentenced for the present offenses, and, thus, he pre-
sumptively was subject to the sentences of life imprisonment
without the possibility of parole that the trial court imposed
pursuant to ORS 187.719. In its full text, that latter statute
provides:

“(1) The presumptive sentence for a sex crime that
is a felony is life imprisonment without the possibility of
release or parole if the defendant has been sentenced for
sex crimes that are felonies at least two times prior to the
current sentence.

“(2) The court may impose a sentence other than the
presumptive sentence provided by subsection (1) of this sec-
tion if the court imposes a departure sentence authorized
by the rules of the Oregon Criminal Justice Commission
based upon findings of substantial and compelling reasons.

“(8) For purposes of this section:

“(a)_ Sentences for two or more convictions that are
imposed in the same sentencing proceeding are considered
to be one sentence; and

“(b) A prior sentence includes:

“(A) Sentences imposed before, on or after July 31,
2001; and

“(B) Sentences imposed by any other state or federal
court for comparable offenses.

“(4) As used in this section, ‘sex crime’ has the mean-
ing given that term in ORS 163A.005.”

After the Court of Appeals issued its decision in
this case, we decided Althouse, 359 Or 668. In that case, we
considered a challenge to the application of ORS 137.719 to
convictions for felony public indecency offenses under ORS
163.465. The defendant in Althouse, like defendant here,
had been convicted of felony public indecency after already
having been convicted of prior sexual offenses, thus trigger-
ing the application of ORS 187.719. We observed in that case
that the framework for the analysis of an as-applied dis-
proportionality challenge to a true-life sentence under ORS
137.719 requires consideration of the following factors:

382 Le

“(1) a comparison of the severity of the penalty and the
gravity of the crime; (2) a comparison of the penalties
imposed for other, related crimes; and (3) the criminal his-
tory of the defendant.’”

Althouse, 359 Or at 684 (quoting Rodriguez/Buck, 347 Or
at 58). We further held in Althouse that, when a sentence
is enhanced based on the defendant’s repeat-offender sta-
tus, additional considerations come into play. For example, if
the defendant “‘is a menace to the community, his sentence
should be aimed at offering the most protection to the com-
munity, regardless of the relative innocuousness of the par-
ticular crime for which he is now convicted.” Althouse, 359
Or at 684 (quoting Tuel v. Gladden, 234 Or 1, 6, 379 P2d 553
(1963)). We stated that the constitutionality of an enhanced
sentence for repeated sexual offenses would “‘depend on the
seriousness of repetitive sexual conduct of th[e] kind [pun-
ished by the statute] and the danger that it forecasts for
others unless the defendant is segregated from society.”
Althouse, 359 Or at 685 (quoting Jensen v. Gladden, 231
Or 141, 144-45, 372 P2d 183 (1962) (brackets in Althouse)).
We concluded that, in the context of enhanced sentences for
repeat offenders, “the first and third of [the factors identi-
fied in Rodriguez/Buck] overlap in comparing the severity
of the penalty and the gravity of the crimes that gave rise to
the repeat offender sentence.” Althouse, 359 Or at 685.

In considering the first and third Rodriguez/Buck
factors in Althouse, we stated:

“We may agree with defendant that public indecency,
considered in isolation, is not as serious as some other sex
crimes. That much follows from the legislature's classifi-
cation of that offense. The legislature has classified public
indecency as a misdemeanor unless the defendant previ-
ously has been convicted of public indecency or another
specified sex crime, in which case the offense is classified
as a Class C felony. ORS 163.465(2). This is not a case,
however, in which defendant’s criminal history consists of
a single conviction for public indecency, nor is it a case in
which the three convictions that resulted in a presumptive
life sentence under ORS 137.719(1) are three felony public
indecency convictions. Rather, this is a case in which defen-
dant, over a 30-year period, has been convicted of sexual
abuse and sodomy of his own and other people’s children,

Po 383

as well as public indecency. And many of the charged and
uncharged instances in which defendant has engaged in
public indecency during that 30-year period have been
directed at or related to children.”

359 Or at 687. We noted in Althouse that the defendant’s
criminal history “reflect[ed] a deeply ingrained pattern of
predatory behavior” and concluded that, “[gliven the seri-
ousness of [the] defendant’s repeated sexual misconduct and
the danger that it forecasts for others, we cannot say that
imposing a presumptive life sentence in response to [the]
defendant’s pattern of criminal behavior violated Article I,
section 16.” Jd. We further concluded that “an inability to
reform one’s conduct despite repeated opportunities to do so
*** can justify the legislature’s decision to impose a life sen-
tence without the possibility of parole.” Id. (citing Tuel, 234
Or at 7).

We then examined the second Rodriguez/Buck fac-
tor. With respect to that factor, the defendant in Althouse
had argued that ORS 137.719 covers numerous offenses,
some of which are much more serious than others, and thus
“that three relatively low-level sex crimes can give rise to
the same presumptive life sentence under ORS 137.719(1)
as three far more serious sex crimes.” In addressing that
argument, we noted that the legislature, not the court, is
primarily responsible for ranking the severity of offenses,
subject to the caveat that, if the penalties for similar, yet
more “serious” crimes result in less severe sentences, the
challenged penalty may be unconstitutionally disproportion-
ate. Althouse, 359 Or at 689. We nevertheless rejected the
defendant’s comparative arguments that his sentence was
more severe than the sentence for other, related crimes. We
observed that (1) ORS 137.719 “does not require the same life
sentence no matter how disparate the combination of convic-
tions that give rise to a repeat-offender sentence under that
statute”; and (2) “[a] trial court may impose a downward
departure sentence under ORS 137.719(2) for less egregious
combinations of offenses.” Id. at 690 (emphasis added). We
ultimately concluded in Althouse that, because the defen-
dant’s “sentence appears proportionate to his particular
criminal history, the comparisons that he invites us to make
provide no reason to hold that a life sentence, as applied to

Tn

384 —

him, is disproportionate in violation of Article I, section 16.”
Id. at 692.

We now turn to the application of the factors iden-
tified in Rodriguez/Buck, as expanded on in Althouse, to
the present case. Under the first and third factors set out
in Rodriguez/Buck, we examine the gravity of the current
offenses and the severity of the penalty imposed for it, in
light of defendant’s criminal history. As noted, defendant
first was convicted of misdemeanor public indecency in
2006, based on an incident in which he masturbated on the
porch of a woman in whom he had taken a sexual interest
but did not know. A neighbor observed his conduct, and the
woman on whose porch he committed the offense ultimately
obtained a stalking protective order against him. Because
defendant did not have prior convictions for sexual offenses,
that public indecency crime was a Class A misdemeanor
under ORS 163.465(2).

Defendant’s other two public indecency convictions—
the ones that subjected him to enhanced sentences under
ORS 137.319(1) in this case—were not misdemeanors.
Rather, as noted, those convictions were classified as felo-
nies under ORS 163.465(2)(b) because of his previous misde-
meanor conviction for public indecency. Defendant’s second
conviction, as described above, involved indecent exposure in
view of several adults on a school playground where children
were present. His third offense involved exposing himself in
a public parking lot in view of a number of people, and where
a child was present. All the prior offenses were observed
by private citizens who were disturbed by defendant’s con-
duct. Moreover, the first prior offense caused a significant
amount of fear to a person who did not directly witness
defendant exposing himself; as noted, the woman on whose
porch defendant masturbated was concerned enough about
his behavior to obtain a stalking protective order. Thus, the
circumstances of defendant’s past public indecency offenses
demonstrated that they caused harm to others, and that
they often had at least the potential to cause even greater
harm due to the presence of children nearby.

The two current public indecency convictions obvi-
ously are of greater concern in light of defendant’s significant

es 385

history of committing similar offenses. The first of the two
current offenses involved conduct in a public park where—
despite defendant’s intimations to the contrary—numerous
people had the ability to see what he was doing. The second
incident involved masturbation near the same public park,
shortly after defendant had fled and presumably was aware
that he was being pursued. That he resumed his mastur-
bation activities under those circumstances is consistent
with what his criminal history implies—that he has little
control over his behavior or understanding of the socially
unacceptable nature of his conduct. In addition, defendant’s
lengthy history of committing other minor crimes, his lack
of success while under supervision, and his other nonsexual
misconduct all indicate that he is highly resistive to reform.

That said, the issue before us is the proportionality
of a life sentence without the possibility of parole for a series
of offenses that, if viewed in isolation and without consider-
ation of criminal history, would be misdemeanors that each
would merit, at most, incarceration for a period not to exceed
one year. As we stated in Althouse, the constitutionality of
the sentence will “‘depend on the seriousness of the repeti-
tive sexual conduct’” as well as the “‘danger that it forecasts
for others[.]’” 359 Or at 685 (quoting Jensen, 231 Or at 144-
45). The primary danger identified here is that defendant’s
repeated behavior will continue to cause upset and possi-
ble harm to people who observe him exposing himself and
masturbating.

The state asserts that that danger is very serious,
citing a study that indicates that nearly 29 percent of the peo-
ple who witness acts of public exhibitionism have increased
fear of sexual crime. See Sharon Riordan, Indecent Exposure:
The Impact Upon the Victim’s Fear of Sexual Crime, Journal
of Forensic Psych, vol 10, No 2, 309, 318, 315 (1999). The state
asserts that defendant’s history supports a conclusion that
he deliberately targets others, noting that, when he commit-
ted his first offense, he called out, “You want some of this?”
to the neighbor who observed him; that one of the school
employees who observed his second offense thought that he
wanted her to see him masturbate; and that when he was
apprehended after his third offense, he indicated that he

386 Ld

thought that women who observed him masturbating might
become sexually attracted to him. The state describes that
cited conduct as “aggressive” behavior toward “vulnerable”
members of the public.

Although we do not take such harm lightly, that
type of harm stands in contrast to the harms at issue in
Althouse. In that case, the defendant, who had a significant
history of exposing himself in public, also had a lengthy his-
tory of sexually abusing children, including attempting to
establish contact with children at or near the time he was
exposing himself. 359 Or at 679-81. Unlike the defendant in
Althouse, nothing in defendant’s criminal history or history
of other misconduct indicates that he specifically preys on
children or that he has sexually abused a child. Cf Jensen,
231 Or at 144-45 (upholding life-with-possibility-of-parole
sentence for public indecency, where defendant previously
had committed felony sex offense against a child). Although
the state is correct that defendant apparently has no inhi-
bitions about committing the crime of public indecency in
the presence of children, and such behavior clearly puts chil-
dren at risk of harm if they observe it, the record does not
suggest that he has specifically targeted children to observe
his acts, or that he has committed such acts in the course
of or in furtherance of other crimes that target children, as
was the circumstance in Althouse.

More generally, unwillingly observing sexual behav-
ior by another person is not a harm of the same magnitude
as being specifically and personally subjected to unwanted
physical sexual contact or sexual violence. Defendant’s
behavior, while not passive and certainly reprehensible to
those witnessing it, was not aggressive in the sense that he
actively pursued victims or attempted to have physical con-
tact with them; instead, he generally showed sexual interest
in whomever happened to observe him.®

® Although there was evidence that defendant did, in fact, have a specific
sexual interest in the woman on whose porch he masturbated when he committed
his first public indecency offense, that person did not witness the crime. Rather,
a neighbor of that woman witnessed the crime. There was no evidence that defen-
dant either intended to expose himself to the woman on whose porch he stood or
that defendant’s exposure of himself to the neighbor was anything other than
opportunistic.

Po 387

To recapitulate with respect to the first and third
Rodriguez/Buck factors (gravity of the offense compared to
the severity of the penalty, and defendant’s criminal history),
public indecency generally can be considered either a high-
level misdemeanor or a low-level felony, depending on the
perpetrator’s criminal history. ORS 163.465(2). It involves
the exposure of a defendant’s genitals in a public place or
in view thereof, with the intent to arouse sexual desire, but
it does not require that there be any physical contact with
another person. ORS 163.465(1)(c). In terms of gravity, it is
not as serious as a sexual offense that involves nonconsen-
sual sexual contact or sexual behaviors targeting children,
which, as discussed below in our evaluation of the second
Rodriguez/Buck factor, generally carry greater sentences.
The penalty involved—life imprisonment without the possi-
bility of parole—is the most severe penalty available under
Oregon law, other than the death penalty, which is available
only in certain cases of aggravated murder.” Defendant’s
criminal history, although lengthy and varied, almost exclu-
sively consisted of low-level offenses; it did not include sex-
ual offenses that entailed physical contact with victims or
that appeared to specifically target child victims. Those con-
siderations all tend to support defendant’s argument that
his sentences of life imprisonment without the possibility of
parole are disproportionate under Article I, section 16.

On the other side of the scale, the state accurately
observes that defendant’s criminal history demonstrates
that lesser criminal sanctions have not deterred him from
re-offending. As this court stated in Tuel, one of the pur-
poses of statutes that provide enhanced penalties for repeat
offenders is to recognize that some offenders simply are not
deterred by criminal sanctions and such people likely will
continue to re-offend if released from confinement. 234 Or
at 6-7; see also Althouse, 359 Or at 685 (same). Nonetheless,
that consideration is only one among others, and, as indicated

© In Kennedy v. Louisiana, 554 US 407, 128 S Ct 2641, 171 L Ed 2d 525, mod-
ified on denial of reh’g, 554 US 945, 129 S Ct 1, 171 L Ed 2d 932 (2008), the United
States Supreme Court held that imposition of the death penalty for the rape of
a child was unconstitutional under the Eighth Amendment to the United States
Constitution. The Court stated: “As it relates to crimes against individuals, ***
the death penalty should not be expanded to instances where the victim’s life was
not taken? Id, at 438.

388 Ld

above, the other considerations under the first and third
Rodriguez/Buck factors that are at issue here suggest that
imposing a sentence of life imprisonment without the possi-
bility of parole on a defendant who commits crimes such as
these, and whose criminal history does not reflect that he
poses a significant physical danger to the public, does not
comport with Article I, section 16.

Our consideration of the second Rodriguez/Buck
factor reinforces that assessment. In applying that factor,
we consider the penalties imposed for other crimes that have
similar characteristics to the crime at issue in this case. 347
Or at 65. It is useful to compare the seriousness of similar
crimes that may result in the same penalty as defendant’s
sentence, as well as to examine similar yet more serious
crimes that may result in a lesser sentence than the one
imposed on defendant. Id. at 74-76. Looking at the serious-
ness of similar crimes that may result in the same penalty
as defendant’s sentence, we note that, unlike felony public
indecency, most of the other felony sex crimes that may result
in the imposition of a true-life sentence under ORS 137.719
involve nonconsensual sexual contact or sexual exploitation
of child victims." A considerable number of those felonies
(including first- and second-degree rape, first-degree sexual
abuse, unlawful sexual penetration, sodomy, and kidnap-
ping) carry mandatory minimum sentences of at least 70
months imprisonment. ORS 137.700(2). The remaining fel-
onies are ranked under the Oregon Sentencing Guidelines
between categories 5 and 10, with the majority being in
the higher ranges. Presumptive sentences in those ranges
can vary from between probation and 60 months’ imprison-
ment for offenders with no criminal history, to between 15
and 130 months’ imprisonment for offenders with extensive
criminal histories. Most of the listed offenses are ranked
higher (more seriously) in the Sentencing Guidelines than is
felony public indecency. Felony public indecency also is one
of the few crimes on the list that does not require—although

2 ORS 163A.005(6), is partially incorporated by reference in ORS 137.719(1),
lists both felony and non-felony sex crimes. ORS 137-719(1) applies only if the
prior sex crimes were felonies, so the entire compendium of offenses contained in
ORS 163A.005(5) are not necessarily “related crimes” for purposes of our dispro-
portionality analysis.

pT 389

it certainly may have—an identifiable victim. In light of
those considerations, we conclude that the gravity of the
offense of public indecency is relatively minor in comparison
with the majority of the other sex offenses identified in ORS
163A.005(5) that may result in a true-life sentence under
ORS 187.719. Cf Rodriguez/Buck, 347 Or at 61 (where a
statute criminalizes “broad range of activity” and defen-
dant “is convicted for engaging in only more minor conduct
encompassed within the statute, the defendant may plau-
sibly argue that the mandatory sentence, as applied to the
particular facts of his or her case, is unconstitutionally
disproportionate”).

Turning to similar yet more serious crimes that
may result in a lesser sentence than the one imposed on
defendant, we note that, in Rodriguez/Buck, this court
discouraged “roam[ing] freely through the criminal code,
deciding which crimes are more or less serious than others.”
Id. at 64. In that case, which involved convictions for first-
degree sexual abuse, the court concluded that the pertinent
related offenses were sexual offenses set out in ORS 163.305
to 163.479. We reach the same conclusion here, given that
public indecency is one of the statutes in that range.

Most of the sexual offenses described in ORS
163.305 to 163.479 are felonies that are “sex crimes”
under ORS 163A.005(5) and, thus, are subject—in some
circumstances—to the same type of sentence that defen-
dant received here. Some, however, are not. For example,
purchasing sex with a minor, a felony, is only considered a
“sex crime” under some circumstances. ORS 163.4138; ORS
163A.005(5)(v). As another example, third-degree sexual
abuse is a Class A misdemeanor and may involve (1) non-
consensual sexual contact; (2) sexual contact with a person
under the age of 18; or (3) propelling blood, urine, semen or
feces at a nonconsenting person with the intent of arous-
ing sexual desire. ORS 163.415. In addition, contributing
to the sexual delinquency of a minor, which involves sex-
ual intercourse with a person under the age of 18, also is
a Class A misdemeanor. ORS 163.435. Sexual misconduct
with a person under the age of 18 is a Class C misdemeanor.
ORS 163.445. Second-degree custodial sexual misconduct,
which involves sexual contact with a person in custody or

390 L_

on supervision by a supervisor, is a Class A misdemeanor.
ORS 163.454. Private indecency, which is similar to public
indecency, except that it involves exposure of genitals at a
location where the victim has a “reasonable expectation of
privacy,” similarly is a Class A misdemeanor. ORS 163.467.
Unlawful dissemination of an intimate image, which can
be either a Class A misdemeanor or a felony, and involves
disclosure of intimate images on the internet for the pur-
pose of harassing, humiliating, or injuring another, is not
a “sex crime” for purposes of ORS 187.719(1). ORS 163.472.
Unlawfully being in a location where children regularly
congregate, an offense that applies only to those previously
designated as sexual offenders, is a Class A misdemeanor.
ORS 163.476. And finally, unlawful contact with a child,
ORS 163.479, another offense that applies only to offenders
who previously have committed sexual offenses, and which
involves contact with a child “with the intent to commit a
crime or for the purpose of arousing or satisfying the sexual
desires of the person or another person,” is a Class C felony
that is not listed under ORS 163A.005(5) and therefore not
subject to ORS 137.719(1).

We have no difficulty in concluding that most of,
if not all, the sexual offenses described above that are not
within the purview of ORS 137.719(1)—and, thus, not subject
to a presumptive true-life sentence—can be viewed as being
at least as serious as public indecency. Indeed, the two that
are arguably the most similar (because they involve noncon-
sensual conduct for the purpose of arousing sexual desire)
are private indecency, which involves intrusion into a place
where a victim has a reasonable expectation of privacy, and
the type of sexual abuse that involves flinging blood, urine,
semen or feces at another person. Both those offenses are
classified as misdemeanors. In sum, in light of the other sex-
ual offenses set out in ORS chapter 163 and their respective
penalties, we conclude that a life sentence without the pos-
sibility of parole for public indecency is among the harshest.
sentences available under Oregon law when the gravity of
the offense is compared to the severity of the penalty.

We do not mean to suggest that the inclusion of pub-
lic indecency in ORS 137.719(1) is facially unconstitutional.
Indeed, we upheld the facial constitutionality of that statute

PY 391

in State v. Wheeler, 343 Or 652, 175 P3d 488 (2007). And,
as noted, we rejected an as-applied challenge to a life sen-
tence under that statute for public indecency most recently
in Althouse, 359 Or 668. But where, as here, a criminal
defendant—even an incorrigible one—has a criminal his-
tory that includes no offenses more serious than public inde-
cency (and no other misconduct that otherwise supports a
conclusion that he poses a significant physical danger to
society), a sentence of life imprisonment without the possi-
bility of parole for public indecency is unconstitutionally dis-
proportionate under Article I, section 16.

The decision of the Court of Appeals is affirmed.
The judgment of the circuit court is affirmed in part and
reversed in part, and the case is remanded to the circuit
court for resentencing.

392

Argued and submitted May 9, decision of Court of Appeals and judgment of
circuit court affirmed September 22, 2016

STATE OF OREGON,
Respondent on Review,
Uv.

DOUGLAS WAYNE SOKELL,
Petitioner on Review.

(CC C181532CR; CA A156133; SC S063607)
380 P3d 975

John J. Tyner, Hillsboro, argued the cause and filed the
brief for petitioner on review.

Rolf C. Moan, Assistant Attorney General, Salem, argued
the cause and filed the brief for respondent on review. With
him on the brief were Ellen F. Rosenblum, Attorney General,
and Paul L. Smith, Deputy Solicitor General.

BREWER, J.

The decision of the Court of Appeals and the judgment of
the circuit court are affirmed.

Po 398
BREWER, J.

Defendant seeks review of a sentence of life impris-
onment without the possibility of parole, imposed pursuant
to ORS 137.719(1), for a conviction for first-degree sexual
abuse. Defendant argues that, as applied to his circum-
stances, the sentence is unconstitutionally disproportionate
under Article I, section 16, of the Oregon Constitution, which
provides in part that “all penalties shall be proportioned to
the offense.” The Court of Appeals rejected that challenge,
State v. Sokell, 273 Or App 654, 362 P3d 251 (2015), and
defendant petitioned for review, which we allowed.! For the
reasons explained below, we affirm the judgment of the cir-
cuit court and the decision of the Court of Appeals that the
sentence did not violate Article I, section 16.?

I. FACTS AND PROCEDURAL HISTORY

A. Current Conviction

The crime for which defendant stands convicted in
the present case is first-degree sexual abuse, ORS 163.427,
based on a charge that defendant subjected a child under
the age of 14 to sexual contact by touching her buttocks and
hips. The offense took place at a public library in Hillsboro
in 2011. The victim, an eight-year-old girl, was looking
at books when defendant, a stranger, approached her and.
talked to her about books. He then stroked the victim on the
buttocks and hips for several minutes, over her clothing, and
fled when her mother approached. Police obtained a video
from the library that showed the suspect, but they were
unable to determine his identity at that time. The following
summer, defendant returned to the children’s section of the

1 Defendant also argues that the trial court erred in admitting into evidence
parts of a presentence investigation report that contained hearsay and that the
sentence violates the Highth Amendment to the United States Constitution.
However, defendant did not raise those arguments in the Court of Appeals; we
therefore do not consider them. See ORAP 9.20(2) (questions before the Supreme
Court include all questions that were properly before the Court of Appeals that
the petition or response claim were incorrectly decided).

2 As an initial matter, we note that the disproportionality challenge raised
by defendant is reviewable. See State v. Althouse, 359 Or 668, 678, 375 P3d 475
(2016) (holding that ORS 138.222(2)(a) does not preclude review of sentence of life
imprisonment without possibility of parole imposed pursuant to ORS 137.719);
State v. Davidson, 360 Or 370, 380 P3d 963 (2016) (same).

394 Le

same library, and an employee recognized him as the sus-
pect and was able to photograph his vehicle’s license plate,
after which the police identified defendant as the suspect.
Based on that evidence, a jury convicted defendant of the
charged offense.

The state presented evidence at sentencing that
the victim was traumatized by the crime, was unwilling to
be out of the presence of her parents, needed to be home
schooled for a significant period of time after the crime was
committed, and was unable to sleep in her own bed alone for
approximately two years after the crime.

B. Other Convictions

At defendant’s sentencing in this case, the following
evidence was adduced concerning his criminal history. In
1996, defendant was convicted of first-degree sexual abuse.
In that case, defendant approached a 12-year-old child in
a store and asked her to try on a backpack that he said he
was considering purchasing for his niece. As the child tried
on the backpack, defendant adjusted the shoulder straps
and then stroked and squeezed the child’s breasts. He was
apprehended at the store and admitted that he had deliber-
ately touched the child’s breasts. That conviction resulted in
a 75-month prison sentence.

While defendant was on supervision after serving
his prison sentence for the 1996 offense, he failed several
polygraph examinations and served a jail sanction for having
contact with a minor. The Board of Parole and Post-Prison.
Supervision designated him as a predatory sex offender in
2003. While on supervision, defendant told his parole officer
that he had committed similar offenses in another state, tar-
geting victims who were between seven and 12 years of age.
He admitted during a polygraph examination that he had
forcibly raped a 10-year-old girl in 1980. He told his therapist
that he had had more than 120 underage victims and that
he had sodomized a female hitchhiker at knifepoint in the
1970s. He told another mental health professional during
an evaluation that, in the 1990s, he had approached young
girls in stores with the pretense of having them try some-
thing on, so that he could touch them. Defendant received
sex offender treatment three times between 1983 and 2005,

Po 395

when he most recently completed treatment. Despite his
completion of a program in 2005, he was still considered to
be at high risk of re-offending, given his history.

In June 2012, before he was apprehended for the
crime at issue here, defendant committed a similar offense
in a public library in Newport. He approached a seven-year-
old girl and asked her to help him find a book. He then put
his hand under her dress and rubbed his hands on her sides
and crotch area, and told her that rubbing her was a “good
feeling.” A librarian saw defendant with his hand up the
girl’s dress and, as defendant was leaving, alerted other peo-
ple in the library to stop him. Defendant was apprehended
and convicted of attempted first-degree sexual abuse based
on that incident, for which he was sentenced to 18 months’
imprisonment.

C. Sentence and Appeal

Based on the foregoing evidence and his conviction
for the current offense, the trial court sentenced defendant to
the presumptive sentence established by ORS 187.719(1)—
life imprisonment without the possibility of parole. On
appeal, defendant argued that, in light of asserted mitigat-
ing circumstances, the trial court should have imposed a
downward departure sentence pursuant to ORS 137.719(2)
and that the imposition of the presumptive sentence under
ORS 137.719(1) violated Article I, section 16. As noted, the
Court of Appeals rejected those arguments, and defendant
petitioned for review, which we allowed.

Il. ANALYSIS
ORS 137.719 provides:

“(1) The presumptive sentence for a sex crime that
is a felony is life imprisonment without the possibility of
release or parole if the defendant has been sentenced for
sex crimes that are felonies at least two times prior to the
current sentence.

“(2) The court may impose a sentence other than the
presumptive sentence provided by subsection (1) of this sec-
tion if the court imposes a departure sentence authorized
by the rules of the Oregon Criminal Justice Commission
based upon findings of substantial and compelling reasons.

396 LY

“(8) For purposes of this section:

“(a) Sentences for two or more convictions that are
imposed in the same sentencing proceeding are considered
to be one sentence; and.

“(b) A prior sentence includes:

“(A) Sentences imposed before, on or after July 31,
2001; and

“(B) Sentences imposed by any other state or federal
court for comparable offenses.

“(4) As used in this section, ‘sex crime’ has the mean-
ing given that term in ORS 163A.005.”

In Althouse, 359 Or 668, we set out a framework
for the evaluation of as-applied proportionality challenges
to sentences imposed pursuant to ORS 137.719(1). We
explained that the factors identified by this court in State
v. Rodriguez/Buck, 347 Or 46, 217 P3d 659 (2009), are to be
considered:

“(1) a comparison of the severity of the penalty and the
gravity of the crime; (2) a comparison of the penalties
imposed for other, related crimes; and (3) the criminal his-
tory of the defendant.”

Althouse, 359 Or at 684 (quoting Rodriguez/Buck, 347 Or at
58). We went on to observe that, where a challenged sentence
was imposed pursuant to a recidivist statute such as ORS
187.719, the first and third Rodriguez/Buck factors are con-
sidered together. Althouse, 359 Or at 685. We thus initially
examine the gravity of defendant’s crime as compared to the
severity of the penalty, and defendant’s criminal history.

Considering those initial factors, defendant argues
that a life sentence without the possibility of parole for his
current offense is unconstitutionally disproportionate.
Relying on Rodriguez/Buck, defendant asserts that the
degree of harm caused by first-degree sexual abuse is less
than the typical harm caused by other sex offenses that
are subject to ORS 187.719(1), such as forcible first-degree
rape. He also argues that three mitigating factors—
somewhat related to his criminal history—indicate that
his sentence is disproportionate. First, he asserts that

Po 397

his status as a Vietnam-era military veteran is a mitigat-
ing factor.’ He further argues that the fact that his three
sexual abuse convictions occurred over a span of 17 years
should be regarded as a mitigating factor, as should his
advanced age (he was 69 years old when he committed the
two most recent offenses). Finally, defendant notes, as we
recognized today in State v. Davidson, 360 Or 370, 387,
380 P3d 963 (2016), that the penalty under ORS 187.719(1)—
life imprisonment without the possibility of parole—is
the second most severe criminal penalty available under
Oregon law.

Initially, we disagree with defendant’s assessment
of the gravity of his current offense. Although Rodriguez/
Buck, like this case, involved convictions for first-degree
sexual abuse, and this court held that mandatory minimum
sentences imposed pursuant to ORS 137.700 were unconsti-
tutionally disproportionate under the circumstances there,
that case does not stand for the proposition that first-degree
sexual abuse should be regarded as a minor sex offense. The
convictions in those cases involved fleeting touching—not
including fondling—of young teens over their clothing. 347
Or at 50-52, 70. The court noted that the offense of first-
degree sexual abuse encompasses a “wide swath of conduct”
that can result in varying degrees of harm. Id. at 69-70.
The court contrasted the defendants’ conduct in those cases
to circumstances in which there was touching of a younger
child or where there was deliberate or persistent rubbing or
fondling. Id. at 72.

Defendant’s conduct in this case bears little resem-
blance to the conduct at issue in Rodriguez/Buck. While it is
possible that, under some circumstances, first-degree sexual
abuse might not cause extremely serious harm to a victim,
that is not the circumstance here. Defendant’s victim was
a young child whom he targeted while she was in a public
library, then fondled on the buttocks and hips for several
minutes. The state presented evidence that the victim suf-
fered from severe trauma that affected her school and home
life for years after the abuse occurred. In short, we disagree
with defendant’s assertion that the gravity-of-the-offense

® Defendant does not elaborate on the relevance of that circumstance.

398 Ld

factor identified in Rodriguez/Buck weighs in his favor in a
disproportionality analysis.

Because defendant was sentenced under a recidi-
vist statute, we also attach considerable significance to his
criminal history. See Davidson, 360 Or at 382. That is so
because the constitutionality of an enhanced sentence based
on recidivism depends, in part, on the “‘seriousness of repet-
itive sexual conduct’” and “‘the danger that it forecasts for
others unless the defendant is segregated from society.”
Althouse, 359 Or at 586 (quoting Jensen v. Gladden, 231 Or
141, 144-45, 372 P2d 183 (1962)). In Althouse, we rejected
a proportionality challenge by a defendant who was sen-
tenced under ORS 137.719(1) for public indecency, which we
acknowledged could be viewed as “not as serious as some
other sex crimes.” 359 Or at 687. We nevertheless upheld
the presumptive true-life sentence imposed in that case, in
light of the defendant’s significant history of sexual abuse,
sodomy, and public indecency, much of which involved and
targeted child victims. Id.

This case, like Althouse, features a defendant who
has an extensive history of committing sexual abuse offenses
against young children, and each of his offenses included
fondling of the victim’s private parts. Despite the consid-
erable sex offender treatment that defendant has received
over the course of several decades, he has continued to
re-offend. Rather than mitigate the circumstances of his
current offense, the passage of time and defendant’s advanc-
ing age have failed to diminish the danger that he poses
to children; as noted, defendant was 69 years old when he
committed each of his last two felony sex crimes. Contrary
to defendant’s view, we conclude that his criminal history
and the circumstances of his current crime indicate that he
would pose a significant danger to children in the commu-
nity if he is not segregated from society.

The remaining Rodriguez/Buck factor involves
comparison of the penalty here with penalties imposed for
other, related crimes. 347 Or at 58. Crimes that are rele-
vant to our analysis include other offenses designated as
“sex crimes” that are subject to enhanced sentences under
ORS 137.719(1), as well as the offenses identified as sexual

Po 399

offenses in ORS chapter 163. See Davidson, 360 Or at 388-
90; Rodriguez/Buck, 347 Or at 64-65. An extensive reitera-
tion of the penalties for other sex offenses under Oregon law
is not required here, in light of our previous decisions that
have discussed those penalties at length. See, e.g., Davidson,
360 Or at 388-90; Althouse, 359 Or at 690-91; Rodriguez/
Buck, 347 Or at 74-76. Suffice it to say that the penalties
for committing physical sexual offenses against young child
victims are uniformly significant under Oregon law, gener-
ally carrying mandatory minimum sentences under ORS
137.700 and being ranked in the highest three crime catego-
ries under the Oregon Sentencing Guidelines. See, e.g., OAR
213-017-002 - 213-017-0011.

As defendant observes, and as was the circumstance
in Althouse, the sentence imposed in this case is the sec-
ond harshest criminal penalty under Oregon law. However,
in light of the circumstances of defendant’s current offense
and his history of committing similar offenses against other
young children, we conclude that the sentence of life impris-
onment without the possibility of parole that the trial court
imposed pursuant to ORS 137.719(1) is not disproportionate
under Article I, section 16.

The decision of the Court of Appeals and the judg-
ment of the circuit court are affirmed.

403

Argued and submitted March 10, decision of Court of Appeals and judgment of
circuit court affirmed October 6, 2016

STATE OF OREGON,
Petitioner on Review,
v.
MAX BARNTHOUSE,
aka Max Davis Barnthouse,
Respondent on Review.
(CC 120431515; CA A153361; SC S063426)
380 P8d 952

David B. Thompson, Assistant Attorney General, Salem,
argued the cause and filed the briefs for petitioner on review.
With him on the briefs were Ellen F. Rosenblum, Attorney
General, and Paul L. Smith, Deputy Solicitor General.

Stephen A. Houze, Portland, argued the cause and filed
the brief for respondent on review.

404 Le

Before Balmer, Chief Justice, and Kistler, Walters, Landau,
Baldwin, and Brewer, Justices, and DeHoog, Justice pro
tempore.**

BREWER, J.

The decision of the Court of Appeals and the judgment of
the circuit court are affirmed.

%** Nakamoto, J., did not participate in the consideration or decision of this
case.

po 405

BREWER, J.

The issue on review in this case is whether police offi-
cers’ handling of an express mail package violated the rights
of defendant—the package’s addressee—to be free from an
unreasonable seizure of the package under Article I, section 9,
of the Oregon Constitution, and the Fourth Amendment to
the United Sates Constitution. As explained below, we con-
clude that the officers’ actions violated Article I, section 9,
and that defendant is entitled to suppression of the evidence
discovered as a result of the seizure.

I. FACTS AND PROCEDURAL HISTORY

The pertinent facts are undisputed. Inter-agency
drug interdiction teams comprising United States Postal
Service (USPS) inspectors and local police officers rou-
tinely examine in-transit mail at USPS mail sorting cen-
ters, looking for packages that might contain contraband.
One such team, made up of Postal Inspector Helton and
Portland Police Bureau officers Castaneda and Groshong,
was deployed to examine packages at a USPS air cargo
center near the Portland International Airport early in the
morning of February 22, 2012.

The sorting process for mail arriving at that facility
began, as in the normal course, sometime before 6:00 a.m.
Officer Castaneda oversaw the routine sorting of mail into
bins. Castaneda noticed an Express Mail package addressed
to “Maxi-pad Barnt” at defendant’s Portland residence,
which had a guaranteed delivery time of noon that day; he
picked it up to examine it. Several aspects of the package
drew his attention. In addition to the addressee’s appar-
ently fictitious name, the package showed that it had been
mailed from the 19711 zip code (Newark, Delaware), but had
a return address of 19810 (Wilmington, Delaware). Further,
the package was sent from a state where the use and sale
of marijuana are illegal, the sender had paid cash for the
postage, a box for waiving signature upon delivery had been
checked, no phone number had been listed for either the
sender or the recipient, and the addresses were handwrit-
ten rather than typed. Together, those factors indicated to
Castaneda that the package might contain contraband.

406 Le

Castaneda showed the package to Inspector Helton,
who agreed that the package looked suspicious. Helton then
placed the package a few feet away, on a dog deployment line,
in preparation for a dog sniff. The package was placed in the
line with six other parcels of approximately the same size
and shape, separated from one another by a couple of feet.
Officer Groshong, the narcotics K-9 handler for the interdic-
tion team, then came from around a corner with a dog, who
alerted to the presence of contraband in the package.

After the dog alerted to the package, Castaneda, as
he later testified, “took custody of the parcel,” taking it from
Groshong’s hands and giving it to Helton for further inves-
tigation. Helton placed the package on a cart designated
for mail that the dog had identified and conducted com-
puter searches on the sender and addressee. Those searches
did not disclose that either the sender’s or the recipient's
address was associated with criminal activity. Nonetheless,
the interdiction team decided to contact the addressee and
try to obtain consent to search the package. They did not
attempt to obtain a search warrant.' Castaneda testified
that, even if the dog had not alerted to the package, the team
would have segregated the package in an identical manner
for further investigation and, ultimately, would have taken
the package to the addressee to attempt to obtain consent to
open it and examine its contents. That is, Castaneda clari-
fied, if the dog had not alerted to the package, nothing about
the investigation would have changed.

At about 9:30 that morning, Helton, Castaneda, and
another Portland police officer, Francas, took the package to
defendant’s residence. When they arrived, they knocked on.
the front door. Two people answered. Castaneda identified
himself as a Portland police officer and asked if either person
was expecting a package. When they responded that they
were not, Castaneda showed them the package addressed to
“Maxi-pad Barnt.” They laughed and said that the package
must be for defendant, their housemate, who was not there.
Castaneda obtained defendant’s full name and phone num-
ber from them and called him. When defendant answered,

1 When defense counsel asked Castaneda why he did not apply for a warrant,
he responded: “[T]here’s other ways of opening the package.”

p__ 407

Castaneda told defendant that he was a police officer and
asked to whom he was speaking. Defendant identified him-
self. Castaneda explained to defendant that he was not
under arrest but that Castaneda was investigating a suspi-
cious package addressed to a person with a similar name at
defendant’s residence. Defendant told Castaneda that he was
not expecting a package and that he did not recognize the
sender’s name. Castaneda then asked defendant for consent
to open the package and examine its contents. Castaneda
explained that defendant could refuse consent, but that, if
he refused, the officers would apply for a search warrant.
Defendant hesitated but ultimately gave Castaneda consent.

While Castaneda remained on the phone with defen-
dant, Francas opened the package and found a yellow shirt
wrapped around several stacks of United States currency.
When Castaneda told defendant that there was currency
in the package, defendant responded that it was not his,
that he was not expecting any money, and that there was
no reason for anyone to send him money through the mail.
Castaneda then informed defendant that he was continuing
his investigation.? Castaneda asked defendant for consent
to search his bedroom for evidence of narcotics distribution
or money laundering. When defendant hesitated, Castaneda
again explained that defendant had the right to refuse but,
if he did, the officers would apply for a warrant to search
the residence. Castaneda reassured defendant that he was
not under arrest. Defendant seemed to Castaneda to become
very nervous, but he consented to a search of his room.
Castaneda gave defendant his contact information and then
terminated the phone call.

The search of defendant’s room revealed, among
other things, a large quantity of marijuana, as well as pack-
aging materials, a vacuum sealer, unused postal boxes,
packaging tape, and wrappers designed to hold bundles of
money. Following those discoveries, defendant was charged
with unlawful possession of marijuana and delivery of mar-
ijuana for consideration.

2 At the suppression hearing, the parties stipulated, in addition to the evi-
dence summarized above, that the package “did not leave the officers’ physical
possession during the time that they were at the house, and that it eventually
came back to the property room, without transferring physical possession.”

408 LC

Before trial, defendant moved to suppress the evi-
dence discovered in the searches of the package and his
bedroom. Defendant argued that, under both Article I, sec-
tion 9, and the Fourth Amendment, the officers had unlaw-
fully seized the package without probable cause or having
obtained a warrant, and that the officers had exploited that
illegality in obtaining his consent to the searches. In partic-
ular, defendant asserted that he had a constitutionally pro-
tected possessory interest in the package while it was in the
stream of mail. Defendant further argued that the officers
significantly interfered with that interest, and therefore ini-
tially seized the package, when they removed it from the
sorting bin and set it aside for a dog sniff. Moreover, defen-
dant argued:

“And the further they go, the more it is clear as can be that
indeed we do have a seizure from a constitutional perspec-
tive. So if it is not immediately at the moment it’s taken out
of the first bin, it is certainly at some moment in time along
this chain of events that they continue to exercise exclusive
control and dominion of it, and indeed, will not permit it to
go back into the stream of mail for its intended delivery to
the recipient.”

The trial court granted the motion to suppress. The
court ruled that

“the seizure happened at the time that the officer took
the package and set it aside, and already had determined,
according to his testimony, that regardless of the dog sniff
test results, regardless whether the dog alerted or didn’t
alert, that this package was set aside for a delivery by the
police officer and the postal employee, and that the plan
was already set in place that that’s what was going to hap-
pen with this package.

«*** [By the time of the dog sniff,] a seizure had hap-
pened. Because it didn’t matter what the results of the dog
sniff test, according to the officer himself. And so we have
to look at that that’s a seizure right there at that time, that
the plan is already that the delivery is not going to happen
in the regular course.

“And so it’s more than a mere setting it aside or putting
it on a different conveyor belt, or putting it in a different
bin. This is really a special delivery that’s going to happen.

Po 409

And then we saw what that delivery plan was. So there is
the seizure happening.”

The court also determined that there was neither reason-
able suspicion nor probable cause to seize the package when
it was removed from the bin and segregated for later police
operations and, therefore, the seizure was unreasonable:

“So the court is going to find under the totality of the cir-
cumstances here, that at that moment in time [before the
dog sniff], that the officers did not have probable cause, or
didn’t have reasonable suspicion under either of those stan-
dards, and we have to look at all of those circumstances
that we had there.

“I think the record is pretty clear about what factors
they would be relying on and the officers went through
themselves and talked about the particulars of the pack-
age. The waiver of the signature upon delivery being high-
lighted|[;] *** the sending post office was in a different zip-
code [than the sender’s residence zipcode;] that there was a
handwritten label; [the postage] was paid in cash; and the
name of the addressee not appearing to be a real name, and
those were the items that they could see on it.

“So that was fine to look at all of that, and fine, you
know, to do some further inquiry as to the package. But at
the moment it is set aside for this special delivery, under
the facts of this case, that’s when we've got a seizure, and it
just not supported by reasonable suspicion at this point.”

The trial court further concluded that a seizure occurred,
at the latest, while Castaneda was on the telephone with
defendant after the officers had taken the package to defen-
dant’s residence:

“[T]here was a seizure for sure at the time that the officer
is on the telephone with the defendant and the officer is
trying to get consent for a search, and the officer tells the
defendant that if he denied consent then the officer would
apply for a search warrant.”

The state then urged the court to rule that
Castaneda did not exploit any illegality in the seizure of
the package when he obtained defendant’s consent to the
searches of the package and his bedroom and, therefore,
that the searches were lawful. The trial court nevertheless

410 Ld

determined that the officer did exploit the illegality in seek-
ing defendant’s consent to the searches and thus implicitly
ruled that defendant’s consent did not satisfy an exception
to the warrant requirement. Based on those determinations,
the court granted defendant’s motion to suppress the chal-
lenged evidence.

The state appealed the suppression order. Before
the Court of Appeals, the state argued that, until the guar-
anteed time for delivery of the package had passed, defen-
dant had no protected possessory interest in it either under
the Fourth Amendment or Article I, section 9, because he
had no right or ability to control the package during its tran-
sit. It followed, the state reasoned, that defendant had no
protected possessory interest in the package at any point
during the police operation. According to the state, the
package therefore was not seized for constitutional purposes
before defendant consented to the search. Alternatively, the
state argued that defendant’s possessory interest in the
package, if any, was limited to the minimal right to receive
the package at its guaranteed delivery time, and no seizure
occurred because the police did not significantly interfere
with that interest, inasmuch as their actions did not delay
the timely delivery of the package. Finally, the state argued.
that, even if the package had been seized illegally, the police
did not exploit that illegality in obtaining defendant’s con-
sent to search the package and his room. However, in the
Court of Appeals, the state did not renew its argument
before the trial court that any seizure of the package was
justified by reasonable suspicion that the package contained
contraband.

The Court of Appeals affirmed the trial court’s sup-
pression ruling. State v. Barnthouse, 271 Or App 312, 350
P3d 536 (2015). The court first held that, as its addressee,
defendant had a constitutionally protected possessory inter-
est in the package while it was in transit in the stream of
mail. That was so, according to the court, for two reasons:
First, as Helton had testified, “a customer could go to their
local post office and say I’m expecting an express mail pack-
age, if you could hold it out and let me pick it up early in the
morning, I know that postal employees will provide that ser-
vice to customers.” Id. at 330. Second, the court noted that

Po 411

the USPS Domestic Mail Manual provides that, between the
time an item of mail is deposited into the mail stream by
the sender and the time it is placed on a truck for delivery,
“addressees may control delivery of their mail” by directing
the item to be “held at a designated Post Office location for
pickup by a specified addressee or designee.” Id. (quoting
USPS Domestic Mail Manual, §§ 508.1.1.1 and 508.7.2.1). It
followed, the court stated, that the addressee of an express
mail package “has something akin to a legal right to
control—i.e., to exercise restraining or directing influence
over—a package (addressed to the addressee) while that
package is in transit. *** [T]hat evidence is sufficient to
establish *** the addressee’s constitutionally protected pos-
sessory interest in that package.” Id. The Court of Appeals
further concluded that

“defendant had a possessory interest in the package at the
time that Castaneda and Helton removed it from the stream
of mail and that he retained that right throughout the
period during which the police investigated the package,
including at the time that the police brought the package
to his residence and obtained his consent to the searches of
the package and his bedroom. As to the nature and scope of
that possessory interest, we conclude that, for an in-transit
USPS express mail package, the police may not detain such
a package without probable cause and a warrant or without
the existence of one of the carefully delineated exceptions
to the warrant requirement.”

Id. at 334.

Having concluded that defendant had a possessory
interest in the package, and that the police lacked authority
to detain the package without probable cause and a war-
rant, the Court of Appeals turned to the question whether
the “government’s conduct, beginning with the removal of
defendant’s package from the mail stream,” significantly
interfered with that possessory interest. Id. at 337. The
court held that once the officers took possession of the pack-
age and decided to seek defendant’s consent to search it, and
thereafter, while maintaining physical control of the pack-
age during the “knock and talk” operation, “the interdiction
team quite literally dispossessed defendant of the package.”
Id. at 338. That is, the officers “deprived defendant of his

412 Lt

package as well as his right to control its course through the
mail.” Id. at 339. The Court of Appeals concluded that it was
reasonable to infer that the officers would maintain posses-
sion of the package while a warrant was sought if defendant
refused consent to search. Id. at 338-39.3 As a consequence,
the court held, “the government significantly interfered
with defendant’s constitutionally protected possessory inter-
est in the package, beginning with the initial removal of it
from the stream of mail and continuing through their entire
interaction with defendant.” Id. at 339.

Finally, the court held that defendant’s voluntary
consent to the search of the package and his bedroom did
not justify the seizure, because the officers impermissibly
had exploited the seizure to obtain that consent. Id. at 341-
46. Accordingly, the Court of Appeals affirmed the trial
court’s suppression order. This court granted review of that
decision. As explained below, we affirm the trial court’s sup-
pression ruling and the decision of the Court of Appeals,
albeit based on somewhat different reasoning.

On review, the state presents three challenges to
the Court of Appeals’ decision. First, the state argues that
defendant lacked a constitutionally protected possessory
interest in the package when the police removed it from the
sorting bin at the USPS facility. Second, the state asserts
that the officers did not meaningfully interfere with any pos-
sessory interest that defendant had (assuming one existed)
so as to effect a seizure under either Article I, section 9, or
the Fourth Amendment. Third, the state makes the argu-
ment that it failed to present to the Court of Appeals: it
asserts that, even if the officers significantly interfered with
a possessory interest that defendant had in the package, the
seizure was not unreasonable in the absence of a warrant
because the officers reasonably suspected that the package
contained contraband. The state does not renew its argu-
ment before the Court of Appeals that, if a seizure occurred,
defendant’s eventual consent to the searches of the package

® Inso concluding, the Court of Appeals specifically referred to the trial court’s
finding, set out above, that there was a seizure at the latest when Castaneda told
defendant that, if he refused consent, the officers would apply for a warrant. Id.
at 339 n 9.

413

and his bedroom satisfied the consent exception to the war-
rant requirement.

I. ANALYSIS

In keeping with our customary practice, we first
address the state’s arguments under Article I, section 9; we
turn to the Fourth Amendment only if we conclude that no
state constitutional violation occurred. State v. Newcomb,
359 Or 756, 764, 375 P3d 434 (2016). Article I, section 9,
provides, in part: “No law shall violate the right of the peo-
ple to be secure in their persons, houses, papers, and effects,
against unreasonable search, or seizure[.]™* As its terms
suggest, Article I, section 9, applies only when government
officials engage in a “search” or effect a “seizure.” State v.
Howard/Dawson, 342 Or 635, 689-40, 157 P8d 1189 (2007).
Somewhat different, albeit interrelated, interests are impli-
cated in a search than in a seizure. A search occurs when the
government invades an individual's privacy interest, State v.
Owens, 302 Or 196, 206, 729 P2d 524 (1986), whereas a sei-
zure occurs when there is a “significant interference, even
a temporary one, with a person’s possessory or ownership
interests in the property.” State v. Juarez-Godinez, 326 Or 1,
6, 942 P2d 722 (1997); Owens, 302 Or at 207. See Newcomb,
859 Or at 764 (“Although the two interests—privacy and
ownership/possession—are not necessarily coextensive,
property law concepts of ownership and possessory rights
can bear significantly on the existence or nonexistence of a
protected privacy interest in the property.”). The state’s first
two arguments are directed at establishing that the offi-
cers did not effect a seizure because, according to the state,
defendant did not have a constitutionally protected posses-
sory interest in the package and, even if he did, there was no
significant interference with that interest.

Article I, section 9, does not protect against every
search or seizure by the government, but only against those
that are arbitrary, oppressive, or otherwise “unreason-
able.” State v. Fair, 353 Or 588, 602, 302 P3d 417 (2018).
Subject to certain limited exceptions, a search or seizure is

4 The Fourth Amendment to the United States Constitution states:

“The right of the people to be secure in their persons, houses, papers, and
effects, against unreasonable searches and seizures, shall not be violated)”

414 Le

unreasonable and, therefore, unlawful under Article I, sec-
tion 9, unless it is supported by probable cause and a war-
rant. State v. Rodgers /Kirkeby, 347 Or 610, 624, 227 P3d 695
(2010). The state’s third argument is directed at establish-
ing the reasonableness of any seizure in this case because,
according to the state, the officer’s reasonable suspicion sat-
isfied an exception to the warrant requirement allowing for
the temporary detention of the package.

A. Defendant’s Interest in the Package

We begin our analysis with the state’s argument
that defendant lacked a constitutionally protected interest
in the package when it was removed from the sorting bin
at the USPS facility. Initially, we note that defendant has
asserted that he had a constitutionally protected interest
in the package throughout its transit in the stream of mail,
and the trial court so concluded. Viewed in that broader
context, then, the threshold question is whether—as the
addressee of the package—defendant had a constitution-
ally protected interest in it while it was in the stream of
mail. The state does not dispute that an addressee has a
constitutionally protected privacy interest that precludes an
unreasonable search of a package in the stream of mail. See
Ex parte Jackson, 96 US 727, 733, 24 L Ed 2d 877 (1877)
(letters and sealed packages, when in the mail, may only be
opened and examined under a warrant, as would be required
when papers are subjected to a search in one’s household).
But, as the state correctly observes, defendant’s challenge
in this case is to an asserted unreasonable seizure—not a
search—of the package.® Accordingly, the precise threshold
question is whether defendant, as the package’s addressee,
had a protected possessory interest in the package while it
was in the stream of mail.

The term “possessory interest” does not appear in.
the text of Article I, section 9; rather, it is a term that this
court and other courts (usually interpreting the Fourth
Amendment) have used to determine whether an item of
property has been seized for constitutional purposes. See,

5 See Barnthouse, 271 Or App at 825 n 3 (“Defendant does not argue that he
had any ownership interest in the package”).

Po 415

e.g., Newcomb, 359 Or at 773 (describing “seizure,” whether
under Article I, section 9, or under Fourth Amendment, as
significant interference with “possessory interest” in prop-
erty). The concept of a possessory interest, as it is pertinent
to Article I, section 9, is grounded in property law. Id. at
764; Howard /Dawson, 342 Or at 642-43.

This court has not previously considered whether
an addressee has a possessory interest in mailed packages
under Article I, section 9, nor has it identified the contours
of such an interest.® However, at minimum, as a third-party
beneficiary of the agreement between the sender and USPS,
defendant had the right—a property-based right—to have
the package delivered to him by its guaranteed delivery
time. See USPS Domestic Mail Manual § 118 (setting out
guaranteed delivery standards for priority mail express); see
also United States v. LaFrance, 879 F2d 1, 7 (1st Cir 1989)
(addressee’s possessory interest in FedEx package while in
transit derives from contract; possessory interest at stake
was contract-based expectancy that package would be deliv-
ered to designated address by guaranteed day and time).

The fact that Article I, section 9, emphasizes prop-
erty law concepts in determining what qualifies as a pro-
tected possessory interest supports the conclusion that
that possessory interest was protected under the Oregon

° In State v. Kosta, 304 Or 549, 748 P2d 72 (1987), police officers stopped a
Federal Express truck and exposed a package inside to a dog sniff. In rejecting
the defendant's challenge to the trial court’s denial of his motion to suppress
evidence found in a search of the package after the dog had alerted, this court
alluded to, but did not reach, the issue before us:

“In the present case, we need not determine the bounds of an individual's
Article I, section 9, interests to conclude that defendant lacked any privacy or
possessory interest in the package at the time when the police intercepted the
Federal Express truck and subsequently exposed the package to the trained
narcotics detection dog. Although defendant argues that he ‘was injured by
the challenged police conduct, he fails to articulate any basis for his alleged
privacy interest to be free from governmental intrusion into the package,
given that he did not cause the package to be transported and that he was
not the addressee, the intended recipient or an individual with an otherwise
identifiable interest at the time of the detention of the package. Consequently,
there is no basis for defendant to assert a possessory or ownership interest
in the package during transit. We hold that defendant's Article I, section 9,
interests were not violated by the police conduct involving the stop of the
truck and the exposure of the package to the police dog.”

Id. at, 553-34 (footnote omitted).

416 Le

Constitution. See Newcomb, 359 Or at 764. So, too, does the
existence of defendant’s accompanying constitutionally pro-
tected privacy interest in the package while it was in the
stream of mail. See Jackson, 96 US at 733; see also Newcomb,
859 Or at 764 (explaining interrelatedness of privacy and
possessory interests in property); State v. Cook, 332 Or 601,
609, 34 P3d 156 (2001) (referring, for purposes of Article I,
section 9, to “the privacy interests that accompanied the
right to possess [items]”). In fact, Castaneda arguably
acknowledged defendant’s possessory interest in the pack-
age when he sought defendant’s consent to open and search
it. See Juarez-Godinez, 326 Or at 7-8 (officer’s “request that
defendant consent to the search at least arguably was a rec-
ognition of defendant's possessory interest”).

The state remonstrates that defendant had no right
to demand that the package be held or redirected while it
was in the stream of mail and that he therefore lacked suffi-
cient dominion or control over the package to have construc-
tive possession of it before its guaranteed delivery time.”
In support of that argument, the state relies on decisions
involving the question whether a defendant possessed an
item under a particular criminal statute criminalizing the
possession of that item. See, e.g., State v. Barger, 349 Or 553,
247 P3d 309, adhd to as modified on recons, 350 Or 233,
P3d 1030 (2011), (holding that, in accessing Internet web-
page and intentionally calling digital images of child sex-
ual abuse onto computer screen, defendant did not “possess”
images within meaning of statute criminalizing possession
of digital images of sexually explicit conduct involving chil-
dren); State v. Casey, 346 Or 54, 203 P3d 202 (2009) (hold-
ing that defendant charged with being felon in possession of
firearm did not possess a firearm that he did not know was
concealed on a guest’s person).

But the issue here is not whether defendant pos-
sessed the package; rather it is whether defendant had a
protected possessory interest in it. The difference matters

7 See State v. Oare, 249 Or 597, 599, 439 P2d 885 (1968) (“Evidence of the
control or the right to control is necessary to constructive possession.”). The state
focuses on constructive possession because defendant concedes that he did not
actually possess the package while it was in the stream of mail.

pt 417

because not all constitutionally protected possessory inter-
ests in property are necessarily accompanied by possession,
whether actual or constructive. On that point, other author-
ity from this court is more instructive than the decisions
that the state cites.

In Juarez-Godinez, the defendant, who was stopped
for speeding, could not produce a driver license but gave
the officer a temporary registration for the car. 326 Or at
8. The person named on the registration was not the defen-
dant and was not present. The officer learned that the reg-
istered owner was on probation for delivery of a controlled
substance. The officer summoned a drug-sniffing dog to the
scene. Id. at 4. About 15 minutes after the initial stop, the
officer arrested the defendant for failure to display a valid
driver license and placed him in the back of a police vehicle.
The officer then asked the defendant and his passengers for
consent to search the car. They refused. Another police offi-
cer arrived later with a dog, which alerted to the presence of
drugs in the car. Jd. The officer had the car impounded and
obtained a search warrant. The ensuing search revealed a
substantial quantity of drugs, which led to the defendant
being charged with delivery of a controlled substance. The
defendant moved to suppress the evidence found in the
search, arguing that it was the product of an unlawful sei-
zure of the car. The trial court granted the motion, and the
Court of Appeals affirmed. Id. at 5.

On review, this court also affirmed, concluding that
the police had seized the car for purposes of Article I, section 9,
even though the defendant did not own the car and was pro-
hibited from driving it on account of the arrest. As the court
explained,

“Indisputably, defendant had been placed under arrest. As
a consequence of that arrest, defendant was unable to drive
the car away himself. Still, he retained a possessory inter-
est in the car and, in normal circumstances, could have
transferred possession of it to one of his passengers and
directed that it be driven away.”

326 Or at 7. In short, at the point when the police arguably
seized the defendant’s car, the defendant had neither actual
possession nor control-based constructive possession of the

418 Ls

car. Nevertheless, this court held that he had a possessory
interest in it under Article I, section 9. Juarez-Godinez thus
shows that a person may have a protected possessory inter-
est in property under Article I, section 9, notwithstanding
being unable to assert dominion or control over it—that is,
even though the person is not in actual or constructive pos-
session of it.

Here, defendant had a contract-based possessory
interest in the package while it was in transit that, at a
minimum, included the right to receive delivery of it by its
guaranteed delivery time.’ The state’s remonstrance not-
withstanding, we conclude that that possessory interest was
protected under Article I, section 9.

B. Did the State Significantly Interfere with Defendant’s
Possessory Interest?

The next question is whether the actions of the offi-
cers significantly interfered with defendant’s possessory
interest in the package. See Juarez-Godinez, 326 Or at 6
(seizure occurs when there is significant interference with
possessory interest in property). Although defendant’s main
argument is that the officers seized the package when it was
removed from the sorting bin at the USPS facility, as noted,
he has consistently asserted that, “beginning with the ini-
tial detention of the package, the police made a series of
warrantless seizures in violation of both Article I, section 9,
of the Oregon Constitution and the Fourth Amendment to
the United States Constitution.” Barnthouse, 271 Or App at
321. In keeping with the progressive nature of that argu-
ment, the trial court concluded that, at the latest, a seizure
occurred when Castaneda told defendant that, if he were

® The parties, as did the Court of Appeals in its analysis, primarily focus their
arguments concerning the existence and scope of defendant's possessory interest
in the package on various provisions of the Domestic Mail Manual published by
the United States Postal Service. Specifically, they point to the provisions that
make clear that addressees “may control delivery of their mail” by requesting
that it be held for pickup or delivered to a different address. See Barnthouse, 271
Or App at 330 (quoting USPS Domestic Mail Manual, §§ 508.1.1.1 and 508.7.2.1).
We need not address those arguments, or the merits of the Court of Appeals’
analysis of defendant's possessory interest based on those provisions, because, as
we explain below, we conclude that, irrespective of those provisions, the police in
this case significantly interfered with defendant’s right to receive delivery of the
package.

Po 419

to withhold consent to a search of the package, the officers
would apply for a warrant. Because, as we now explain, evi-
dence in the record supports that conclusion, we need not
determine whether a seizure occurred earlier in the course
of the law enforcement operation.

As discussed, in observing the sorting of mail at the
postal facility, Castaneda noticed the package, considered it
suspicious, and set it aside for further investigation. He then
subjected the package to a dog-sniff, and the dog alerted
to the presence of contraband. At the suppression hearing,
Castaneda testified that, even if the dog had not alerted to
the package, nothing about the investigation would have
changed; the package would have been taken by authorities
to defendant’s residence in an attempt to obtain his consent
to a search of its contents. It is true, as the state points out,
that the officers brought the package to defendant’s res-
idence before its guaranteed delivery time. However, that
does not mean that they did not significantly interfere with
defendant’s possessory interest in it. According to the trial
court’s unchallenged finding: “This is really a special deliv-
ery that’s going to happen. And then we saw what that deliv-
ery plan was.” In accordance with that plan, as Castaneda
explained to defendant, if defendant had not consented to a
search, the officers would have sought a warrant.

Consistent with the trial court’s finding, a reason-
able inference to be drawn from Castaneda’s testimony is
that, if defendant had chosen not to consent to the search
and instead required the officers to apply for a warrant, the
officers would not have delivered the unopened package to
defendant while they sought a warrant, nor would they have
permitted anyone else to deliver it to him, irrespective of its
guaranteed delivery time. See Juarez-Godinez, 326 Or at 7
(appellate court is bound by trial court’s factual findings in
suppression hearing, as long as those findings are supported.
by evidence in record). Under those circumstances—that is,
where, having physical control of the package, the officers
curtailed its guaranteed delivery to defendant—the trial
court did not err in concluding that the officers significantly
interfered with defendant’s possessory interest in the pack-
age and, therefore, seized it. See id. at 8 (describing seizure

- effected by curtailment of defendant’s possessory interest).

420 Lt

C. Was the Seizure Unreasonable? — the State’s Unpreserved
Reasonable Suspicion Argument

Our conclusion that the package was seized ordi-
narily would not end our inquiry, because, as discussed
above, only seizures that are “unreasonable” violate Article I,
section 9. The trial court ruled that the officers’ seizure of
the package in this case was unreasonable, because it was
not supported either by reasonable suspicion or by proba-
ble cause and a warrant. The state contends on review that
any seizure in this case was justified on the ground that
a brief warrantless investigative detention of property is
lawful if police officers have reasonable suspicion that the
property is associated with criminal activity. According to
the state, because a police officer lawfully may stop—i.e.,
seize—a person without a warrant based on reasonable sus-
picion of criminal activity without violating Article I, sec-
tion 9, Rodgers/Kirkeby, 347 Or at 621, a brief investigative
seizure of property should not be subject to a more stringent
standard.®

We conclude that the state’s reasonable suspicion
argument is not properly before us. The state’s argument
hinges on the premise that the trial court erred in ruling
that the seizure of the package was not supported by rea-
sonable suspicion, but the state did not challenge that ruling
before the Court of Appeals. Accordingly, it is not preserved,
and we do not consider it further. See ORAP 9.20(2) (ques-
tions before the Supreme Court include all questions that
were properly before the Court of Appeals that the petition
or response claim were incorrectly decided); see also State
v. Sokell, 360 Or 392, 393 n 1, 380 P3d 975 (2016) (applying
rule and declining to consider arguments not raised in Court
of Appeals). Because the state has not advanced any other
argument supporting a different outcome,” we conclude that

° See United States v. Place, 462 US 696, 103 S Ct 2687, 7 L Ed 2d 110
(1988) (applying principles of Terry v. Ohio, 392 US 1, 88 S Ct 1868, 20 L Ed 2d
889 (1968), which permits warrantless investigative seizure of person based on
reasonable suspicion, to hold that government may temporarily seize property
without warrant and without violating Fourth Amendment based on reasonable
suspicion that it is associated with criminal activity).

© As noted, the state argued in the Court of Appeals that the trial court also
erred in ruling that defendant's consents to the searches of the package and his
bedroom were invalid insofar as the officers exploited the seizure of the package

Po 421

the seizure of the package violated Article I, section 9.1
Because the package was unlawfully seized, the trial court
correctly suppressed the evidence discovered as a result of
that seizure.

The decision of the Court of Appeals and the judg-
ment of the circuit court are affirmed.

to obtain those consents, but it has not advanced that argument in this court.
Accordingly, we do not consider it here.

4 Having concluded that the seizure of the package was unlawful under
Article], section 9, we donot consider its lawfulness under the Fourth Amendment.

A425

Argued and submitted November 10, 2015, decision of Court of Appeals and
judgment of circuit court affirmed October 13, 2016

STATE OF OREGON,
Respondent on Review,
ve
DENNY D. GHIM,
Petitioner on Review.
(CC C111491CR; CA A152065; SC S063021)
381 P3d 789

ee
Morgen E. Daniels, Salem, argued the cause and filed
the briefs for petitioner on review. Also on the briefs was

Ernest G. Lannet, Chief Defender, Office of Public Defense
Services.

Rolf C. Moan, Assistant Attorney General, Salem, argued
the cause and filed the brief for respondent on review. Also on
the brief were Ellen F. Rosenblum, Attorney General, Paul
L. Smith, Deputy Solicitor General, and Robert M. Wilsey,
Assistant Attorney General.

Julia E. Markley, Perkins Coie LLP, Portland, filed the
brief for amicus curiae American Civil Liberties Union of
Oregon, Inc. Also on the brief was Kristina J. Holm.

426 Ld

Before Balmer, Chief Justice, and Kistler, Walters, Landau,
Baldwin, Brewer, and Nakamoto, Justices.**

KISTLER, J.

The decision of the Court of Appeals and the judgment of
the circuit court are affirmed.

** Linder, J., retired December 31, 2015, and did not participate in the deci-
sion of this case.

Po 421

KISTLER, J.

The question in this case is whether an agency’s use
of an administrative subpoena to obtain defendant’s wife’s
bank records violated Article I, section 9, of the Oregon
Constitution. The trial court denied defendant’s motion to
suppress evidence that the agency uncovered as a result of its
subpoena, and the Court of Appeals affirmed. State v. Ghim,
267 Or App 435, 340 P3d 753 (2014). Relying on State v.
Johnson, 340 Or 319, 131 P3d 173 (2006), the Court of Appeals
held that defendant had no constitutionally protected privacy
interest in the bank records. It followed that the agency’s use
of an administrative subpoena to obtain those records did not
violate Article I, section 9. We allowed defendant’s petition for
review and now affirm, on different grounds, the trial court’s
judgment and the Court of Appeals decision.

I. FACTS

The state charged defendant and his wife with 17
counts of criminal mistreatment, first-degree theft, and
aggravated first-degree theft. Midway through trial, defen-
dant’s wife filed a motion in limine to exclude copies of her
bank records, which the Department of Consumer and
Business Services (DCBS) had obtained by administrative
subpoena, from being admitted into evidence. Defendant
joined in that motion and, throughout the trial, adopted his
wife’s arguments on that issue.’ In summarizing the facts,
we first describe the evidence brought out at the hearing on
that motion—essentially, the circumstances that prompted
DCBS to subpoena the wife’s bank records and how the infor-
mation that DCBS discovered as a result of its investigation
became part of the criminal proceeding against defendant
and his wife. We then describe the motion in limine, the
arguments that the parties made regarding the motion, the
trial court’s rulings, and the Court of Appeals decision.

A. DCBS Investigation

Ruth Johnson is an investigator for DCBS. In
January 2009, Johnson received a call from Von Renchler,

+ Only defendant is a party to this appeal. Because he joined in his wife's
motion and arguments on this issue, we refer in this opinion to defendant's wife's
motion and related arguments as defendant’s motion and arguments.

428 Le

who had purchased investment properties from defendant
and his wife. Von Renchler told Johnson that he and his wife
were supposed to be receiving payments on their invest-
ment. However, they had received no payments. According
to Von Renchler, defendant’s wife had said that payments
were being sent to the Von Renchlers’ bank account by wire
transfer, but no funds were transferred to the account.
Afterwards, defendant’s wife gave the Von Renchlers a
check, which her bank refused to honor. Von Renchler told
Johnson that he and his wife felt as if defendant and his wife
were giving them “the runaround.”

After speaking with Von Renchler, Johnson became
concerned that defendant and his wife were selling unreg-
istered securities, which DCBS is charged with regulat-
ing. Johnson arranged to meet with the Von Renchlers
and asked them to bring their records, including copies of
checks that they had written to or received from defendant’s
wife, so that Johnson could begin her investigation. At the
meeting, the Von Renchlers discussed their investment
with defendant and his wife and gave Johnson copies of the
checks that defendant’s wife had sent them. Johnson told
the Von Renchlers that she would “subpoena [defendant’s
wife’s] bank records to take a look to see what happened to
their money, to see if their money had gone where they were
told it was going to go.” She explained that, if the money had
gone where it was supposed to go, then she would speak with
defendant and his wife, talk to them about what they were
doing, and deal with any issues administratively.

Pursuant to ORS 59.315 and ORS 192.596, Johnson
issued three subpoenas to the banks on which defendant’s
wife had written checks to the Von Renchlers.” Johnson sent
copies of the subpoenas by certified mail to defendant’s wife.
In examining the records that she received in response to
the subpoenas, Johnson saw “large deposits coming into
[defendant’s wife’s bank] account,” which allowed Johnson

2 As discussed below, ORS 59.315(1) authorizes DCBS to subpoena wit-
nesses and to require the production of books, papers, and other documents
“[£lor the purpose of an investigation *** under the Oregon Securities Law.” ORS
192.596(1) authorizes financial institutions to disclose their customers’ finan-
cial records to state agencies pursuant to a statutorily authorized administrative
subpoena.

pT 429

“to identify [other] individuals that [she] believed were pos-
sibly making investments with [defendant and his wife].”
Johnson then spoke with the persons whom she had iden-
tified from the bank records. She also spoke to property
owners in Washington, where the investment properties
were supposedly located, and she collected information from
government agencies to determine whether the investment
properties existed. Finally, in reviewing the bank records
that she received, Johnson came across questionable finan-
cial transactions involving defendant’s mother, who was the
subject of a guardianship.

During the year in which Johnson pursued her inves-
tigation for DCBS, she did not contact the Von Renchlers’
attorney. When asked why she had not done so, she explained
that the Von Renchlers’ attorney was “dealing with a bad
check [from defendant’s wife], with trying to get payment.”
In her view, that matter “had nothing to do with what [she]
was looking at,” which was “whether we were having a sale of
an unlicensed, unregistered security in the State of Oregon.”

In March 2010, more than a year after Johnson
began her investigation, the Von Renchlers asked Johnson if
telling the police about the bad check they had received from
defendant’s wife would impede her investigation. Johnson
said that it would not, and she added that the Von Renchlers
could mention her name if they filed a police report. They
did, and an officer contacted Johnson regarding her investi-
gation. Before then, Johnson had not had any contact with
any law enforcement agency.

B. Defendant’s Motion In Limine

As noted, the state charged defendant and his wife
with 17 counts of criminal mistreatment, first-degree theft, and
aggravated first-degree theft.? The first day of trial, the state
called 11 witnesses. Most of those witnesses were persons to

® Before trial, the Von Renchlers recovered their investment from defendant
and his wife. Although the Von Renchlers testified at trial, their transactions with
defendant and his wife did not give rise to any criminal charge. Rather, defen-
dant and his wife's transactions with other investors gave rise to the theft and
aggravated theft charges, and defendant and his wife’s handling of his mother’s
finances gave rise to the criminal mistreatment charges. As noted below, the
trial court found defendant guilty of two of the 17 counts. The trial court found
defendant's wife guilty of all 17 counts. Only defendant’s appeal is before us.

430 Ld

whom defendant and his wife had sold investment properties.
We assume, as the parties do, that, except for the Von Renchlers,
those witnesses were persons whom Johnson had identified as a
result of reviewing the subpoenaed bank records.

The second day of trial, defendant filed a document
captioned “motion in limine,” in which he asked the court “to
exclude from evidence bank records of defendant|’s wife] as
having been seized without proper court process.” Defendant
contended that, “[e]lven if properly obtained under state
administrative process, *** that information [may not] be
admitted against defendant [in] the criminal proceeding
given privacy protections under Oregon statutory and con-
stitutional provisions.” Although defendant asked the court
to keep the bank records from being admitted, he did not
ask the court to strike the testimony of the 11 witnesses
who had testified the day before, nor did he ask the court to
strike any exhibit offered in connection with that testimony.

The parties addressed defendant’s motion in limine
at three separate points during the trial, and the issues
evolved as the trial progressed. The parties first discussed
the motion shortly after it was filed. That discussion was
fairly cursory. The prosecutor explained that the records
had been obtained pursuant to statutorily authorized
administrative subpoenas and that he was not aware of
any limitation on obtaining bank records that way. Relying
on Canadian authority, defendant responded that he had
a constitutionally protected privacy interest in his wife’s
bank records. He reasoned that an administrative subpoena
lacked the procedural and substantive protections asso-
ciated with a search warrant. He acknowledged, however,
that the victims could choose to disclose their bank records
and that he and his wife “los[t] any privacy protection when
they send a check out to somebody.”

The trial court did not find defendant’s Canadian
authority persuasive, and it reasoned that, even if DCBS
could not issue an administrative subpoena for the banks’
records, the prosecutor could subpoena the custodians of the
records to appear as witnesses at trial and bring the records
with them. Based on that reasoning, the court tentatively
denied defendant’s motion in limine, and the trial continued.

Pp 431

At the end of the second day of trial, the parties
returned to the motion in limine. The prosecutor advised.
the court that, on examining the subpoenas that DCBS had
issued, he realized that Johnson had served the subpoenas
on defendant’s wife by certified mail rather than personally,
as the bank records statutes require. See ORS 192.596(2)
(authoring banks to disclose a customer’s records in response
to administrative subpoenas but requiring personal service
on the customer). The prosecutor also noted that the motion
in limine was, in effect, a motion to suppress. He argued
that, if defendant had filed a motion to suppress before trial,
as other statutes required, the state could have reissued
the subpoenas and served them properly. The prosecutor
argued that the court could simply deny defendant’s motion
in limine as untimely. In lieu of doing so, however, the pros-
ecutor suggested continuing the trial and allowing the state
to issue a second set of subpoenas for the bank records.

The trial court agreed that defendant’s motion in
limine was effectively an untimely motion to suppress. It also
agreed that, if defendant had filed a timely pretrial suppres-
sion motion, the state could have cured any service error.
Rather than deny defendant’s motion as untimely, the court
continued the trial for a month and gave the state the oppor-
tunity to subpoena the records a second time. The prosecu-
tor noted that he expected that defendant would argue that
the second set of subpoenas was the fruit of the poisonous
tree, but he asserted that the state inevitably would have
discovered the records if the service error had been identi-
fied earlier. The trial court agreed.

Defense counsel suggested that the state could get
the custodians of the bank records to recertify the banks
records, “but [proposed that the state should] do it through
a court subpoena so they [the custodians] don’t have to
recopy everything.” After suggesting a second time that
the prosecutor could issue a subpoena duces tecum for the
records that DCBS previously had obtained, defense counsel
explained, “I’m not really concerned about the form of this
subpoena here because my argument is going to be that it
really doesn’t matter, it’s already been tainted.”

The court continued the case for approximately a
month, and the prosecutor issued subpoenas duces tecum

432 Ld

pursuant to ORS 136.583 on the banks in which defendant
and his wife held accounts.* The subpoenas were personally
served on defendant and his wife, and the custodians pro-
duced the requested bank records. Those records consisted of
account applications, monthly account statements, notices of
overdrafts, copies of checks written to third parties, deposit
slips, and copies of certified checks deposited in defendant
and his wife’s bank accounts.®

When the trial resumed, the parties returned to
defendant’s motion a third time. By this time, defendant
had filed a memorandum in support of the motion in limine,
which he now characterized as a motion to suppress. The
memorandum argued that, under the Oregon Constitution,
defendant and his wife had a constitutionally protected pri-
vacy interest in her bank records and that “[t]hese subpoe-
nas from the State amounted to search warrants without
probable cause.” In arguing that motion, defendant con-
trasted health care records with bank records. He contended
that, even though medical patients lack a constitutionally
protected privacy interest in their health care records, bank
records are different. In defendant’s view, the account holder
owns the bank records, which by tradition, policy, and stat-
ute have been kept “secret, protected.” The state responded.
that, as a matter of property law, a customer has no own-
ership interest in bank records. Rather, the bank creates
and maintains the records so that it can administer its cus-
tomers’ accounts accurately. The trial court agreed with
the state, although it noted that the parties appeared to
acknowledge that Johnson had not followed the statutorily
required procedure for subpoenaing the bank records and
that the state had sought to cure that error by subpoenaing
the records a second time.

The state called Johnson, who confirmed that she had.
not served the initial administrative subpoenas personally

* Both the district attorney and the defense counsel may subpoena witnesses
to appear at a criminal trial. See ORS 136.565 (district attorney); ORS 136.567
(defense counsel). Those subpoenas may require the witness either to bring
books, papers and documents with them to trial or to produce those documents
before trial. ORS 136.580; see also ORS 136.583 (authorizing production of out-
of-state documents if certain requirements are met).

® Defendant does not contend that the bank records that the custodians
produced differed in any material way from the records that they produced in
response to DCBS's administrative subpoenas.

Po 433

on defendant’s wife but had sent them instead by certified
mail. Johnson also testified, however, that defendant’s wife
had acknowledged receipt of the subpoenas. Finally, Johnson
testified that, if she had been aware of the service error, she
would have cured the problem by reissuing the subpoenas.
The prosecutor, for his part, represented that, in the course
of pursuing the report that the Von Renchlers had filed with
the police, the district attorney’s office would have subpoe-
naed the bank records if Johnson had not already done so.

The trial court recognized that, under ORS 192.606(5),
“[elvidence obtained in violation of ORS 192.583 to 192.607
[the bank records statutes] is inadmissible in any proceed-
ing.” The court reasoned that, even though DCBS had not
served the administrative subpoenas personally on defen-
dant’s wife as ORS 192.596(2) requires and even though
ORS 192.606(5) prohibits the admission of bank records
obtained in violation of the bank records statutes, ORS
192.606(5) did not prohibit DCBS or the state from serving
a second set of subpoenas on the banks to obtain the same
records. Regarding defendant’s fruit-of-the-poisonous-tree
argument, the trial court agreed with the state that the
‘Von Renchlers’ complaints to both DCBS and the police had
led to those agencies’ efforts to investigate defendant and his
wife’s sales of investment properties, that the Von Renchlers’
complaints were independent of any information that was
later learned as a result of Johnson’s administrative subpoe-
nas, and that the bank records inevitably would have been
discovered. The court accordingly admitted the records.
After considering all the evidence, the trial court found
defendant guilty of two of the 17 counts and not guilty of the
remaining 15 counts.”

® In reaching that conclusion, the trial court assumed that, even if the bank
records were inadmissible under ORS 192.606(5), that statute did not preclude
admitting the testimony of the witnesses who had been discovered as a result of
the subpoenaed bank records. Cf: United States v. Ceccolini, 435 US 268, 98 S Ct
1054, 55 L Ed 2d 268 (1978) (holding that, for Fourth Amendment purposes, tes-
timony offered by witnesses discovered as result of illegal search may be attenu-
ated from that illegality). Defendant has not specifically challenged that assump-
tion, although the second memorandum that he filed in support of the motion
in limine asserted generally that all evidence derived from Johnson’s subpoena
should be excluded.

7 The trial court found defendant guilty of first-degree theft from the
Woos (count 16) and aggravated first-degree theft from Kang (count 17). Both

434 Le

C. Defendant’s Appeal

Before the Court of Appeals, defendant argued two
propositions. First, he contended that, under Article I, sec-
tion 9, he had a protected privacy interest in his wife’s bank
records. Second, he argued that, even though the legisla-
ture had authorized government agencies to obtain bank
records, the resulting statute was unconstitutional “without
either a warrant or probable cause and a warrant excep-
tion.” In arguing the latter point, defendant urged the Court
of Appeals to follow a Washington Supreme Court decision,
which had held that the Washington Constitution prohibited
an agency with both regulatory and criminal investigative
authority from issuing a subpoena that was not subject to
review by a neutral magistrate. See State v. Miles, 160 Wash
2d 236, 247-49, 156 P3d 864 (2007).® It followed, defendant
contended, that DCBS’s use of an administrative subpoena
to obtain his wife’s bank records violated Article I, section 9,
of the Oregon Constitution.®

In the Court of Appeals, defendant did not raise
three issues regarding the second set of subpoenas. First,
he did not argue that the trial court erred in ruling that
the state could issue a second set of subpoenas to cure the

the Woos and Kang testified the first day of trial, before defendant filed the
motion in limine to exclude his wife's bank records. As noted, defendant did
not move to strike either the Woos’ or Kang’s testimony. The state, however,
has not argued that, in light of those victims’ unchallenged testimony, any
error in admitting the bank records was harmless, and we do not consider that
issue.

8 In Miles, a state agency investigating a securities violation subpoenaed a
bank for its customer's records. The agency did not notify the customer of the
subpoena, and it directed the bank not to tell the customer that it had subpoe-
naed the records. 160 Wash 2d at 241. The agency also asked the bank to respond
quickly to the subpoena because the statute of limitations for prosecuting theft
was about to expire. Jd. The court held that the Washington Constitution required
the intervention of a neutral magistrate, especially when an agency is investigat-
ing criminal charges. Id. at 247-49.

® At one point in his brief, defendant recognized that the bank records stat-
utes “correlate with the bounds of legal and social norms relating to bank records
in Oregon” and thus mark the extent of the privacy that Article I, section 9, pro-
tects. And he acknowledged that “an administrative agency may gain access to
such records in the course of enforcing the rules that the agency is charged with
enforcing” Although defendant’s argument was not completely clear, he appears
to have concluded, in reliance on the Washington decision in Miles, that an
administrative subpoena issued without the supervision of a neutral magistrate
violated Article I, section 9.

es

statutory service problem with the first set of subpoenas.
See Ghim, 267 Or App at 438 n 3 (so noting). Specifically,
defendant did not argue that either the statutory exclusion
provision in ORS 192.606(5) or Article I, section 9, prohib-
ited the state from serving a second set of subpoenas on the
banks once it learned that DCBS had failed to serve the first
set of subpoenas in compliance with ORS 192.596. Second,
defendant did not argue that the second set of subpoenas
would be valid only if DCBS reissued them; that is, he did
not argue that the second set of subpoenas violated Article I,
section 9, because the prosecutor issued them under ORS
136.583 rather than DCBS reissuing them under ORS
59.315(1). Finally, he did not challenge the trial court’s rul-
ing that the second set of subpoenas was not the product of
the first set of subpoenas. Rather, he took the position in the
Court of Appeals that the use of anything less than a war-
rant or an exception to the warrant requirement to obtain
his wife’s bank records violated Article I, section 9.

As noted, the Court of Appeals resolved defendant’s
argument by holding that a customer has no constitutionally
protected privacy interest in his or her bank records. 267 Or
App at 440-41. It recognized, as defendant argued, that the
legislature has required financial institutions to keep their
customers’ information private, subject to certain excep-
tions. Id. at 441-42 (discussing ORS chapter 192). The court
explained, however, that the administrative subpoenas that
DCBS issued came within one of those exceptions, and it
declined to find in Article I, section 9, a greater degree of
privacy than the legislature had granted in the bank record
statutes. Id. We allowed defendant’s petition for review to
consider whether DCBS’s use of administrative subpoenas
to obtain his wife’s bank records violated Article I, section 9.

Il. ARTICLE I, SECTION 9

On review, defendant raises two related but sepa-
rate issues. The first is whether he has a constitutionally
protected privacy interest in records that the bank created
and maintained for its own use. The second is whether, if he
has a protected privacy interest in those records, the admin-
istrative subpoenas that DCBS issued were an unreasonable

436 Le

search within the meaning of Article I, section 9. We begin
with the first issue.

A. Protected Privacy Interest

Defendant argues that the fact that the bank cre-
ated and maintained its records for its own use does not
necessarily mean he has no protected privacy interest in
those records. In his view, both the existence and the extent
of his privacy interest turn on three factors: the nature of
the information that the bank collected; “the context of the
disclosure of the information—including the relationship
between the person claiming the privacy interest and the
third party that receives the information”; and “the context
of the conduct by which the state accessed the information.”
Put differently, defendant contends that a person can have a
protected privacy interest in information held by third par-
ties, the extent of which will vary depending on the contex-
tual factors he identifies.

On that issue, the state does not argue on review
that the mere fact that the bank created and maintained
its records for its own use necessarily means that defendant
has no protected privacy interest in those records. Rather,
it recognizes that the question is a contextual one, although
it argues that, in this case, context and history lead to only
one conclusion: customers have no constitutionally protected
privacy interest in their bank records. It necessarily follows,
the state concludes, that any required disclosure of those
records did not constitute a search and that, as a result, the
subpoenas issued by DCBS and the prosecutor did not vio-
late Article I, section 9.

The question whether a person has a constitution-
ally protected privacy interest in information that a third
party collects and maintains for its own use has arisen with
increasing frequency, driven in large part by the ability that
computers provide to store, aggregate, and analyze vast
amounts of data. See, e.g., United States v. Jones, 565 US ___,
132 S Ct 945, 181 L Ed 2d 911 (2012) (Sotomayor, J., concur-
ring) (questioning whether, in light of those technological
changes, the Court should revisit its Fourth Amendment
cases and recognize a constitutionally protected privacy
interest in bank and phone records); Jane Bambauer, Other

Po 487

People’s Papers, 94 Tex L Rev 205 (2015) (reasoning that
the type of information and the use that government makes
of it bear on the constitutionality of government action);
Christopher Slobogin, Making the Most of United States v.
Jones in a Surveillance Society: A Statutory Implementation
of Mosaic Theory, 8 Duke J Const L & Pub Pol’y 1 (2012)
(reasoning that justification for searches of third-party data
should be roughly proportional to the intrusiveness of the
search and recognizing the potential legitimacy of legisla-
tive justification).

In this case, the issue arises in the context of records
that a bank maintains of its customers’ transactions with
third parties. Similar issues can arise regarding the phone
numbers a person called, cell phone location, and Internet
search histories, to name only a few. And the answer to the
question whether a person has a constitutionally protected
privacy interest in information held by third parties can
vary, according to the parties’ arguments, depending on
contractual and other restrictions that apply to the third
party’s use and dissemination of the information, gen-
eral societal norms, and the level of generality with which
the government analyzes the data. See State v. Howard/
Dawson, 342 Or 635, 640-41, 157 P3d 1189 (2007) (relying
on the absence of any property interest or subconstitutional
right or relationship that restricted a garbage company’s
handling of trash once the company collected it in holding
that the defendants had no protected privacy interest under
Article I, section 9).

The record in this case sheds little light on those
issues. For example, although the state and defendant ask
us to look to the Internet to find the terms of the agreements
that governed the banks’ obligation to keep his wife’s finan-
cial records confidential, those agreements are not part of
the record. The record does not disclose the extent, if any,
to which defendant’s wife agreed to permit the disclosure of
her financial information to third parties for various pur-
poses and thus may have diminished any right to privacy
she might claim. Similarly, there is no testimony regard-
ing the customary use of the information held by the bank
or the extent to which the bank must disclose financial

438 Ld

transactions to federal and state regulators charged with
ensuring the solvency of the bank, tax collection, or compli-
ance with limitations on monetary transfers. Accordingly,
to the extent that the state argues that defendant had no
protected privacy interest in the bank records because those
records were subject to state and federal regulatory review,
this record does not disclose the extent, if any, to which reg-
ulatory review might diminish any right to privacy that
defendant had in his wife’s records.

If the right to privacy under Article I, section 9,
presents a contextual question, as the parties argue, this
record contains little evidence that bears on that issue. All
that we can tell from this record is that the Oregon legis-
lature has required financial institutions to keep custom-
ers’ financial transactions confidential, subject to certain
exceptions. See ORS 192.583 to 192.607. One of those excep-
tions is the disclosure of customers’ financial information in
response to administrative subpoenas. ORS 192.596. Given
the limited record before us, we conclude that this case pro-
vides a poor vehicle for deciding whether defendant had a
protected privacy interest in his wife’s bank records.” We
accordingly assume that defendant has a protected privacy
interest and turn to the second issue that defendant has
raised, whether the administrative subpoenas that DCBS
issued to obtain those records for its civil investigation com-
plied with Article I, section 9.

B. Administrative Subpoenas

In the trial court, defendant argued that DCBS’s
use of an administrative subpoena to obtain his wife’s bank
records violated his Article I, section 9, rights. In his view,
only a warrant or an exception to the warrant requirement,
coupled with probable cause, would justify requiring the
bank to produce his wife’s records. He took the same position
in the Court of Appeals. In this court, defendant has shifted
his position. He now argues that, because the subpoena was
a search, “it was subject to the reasonableness requirement

*© We accordingly do not reach defendant's claim that our decision in Johnson,
340 Or at 336, either has no application in the context of bank records or should
be reconsidered. We express no opinion on that issue.

po 439

of Article I, section 9.” He contends that “[a] search is rea-
sonable if it is supported by a warrant, justified by an excep-
tion to the warrant requirement, or conducted pursuant to
a properly authorized administrative scheme.” Defendant
notes that DCBS neither obtained a warrant nor sought
to come within an exception to the warrant requirement.
He also contends that DCBS’s subpoenas were not issued.
pursuant to a properly authorized administrative scheme,
apparently on the ground that DCBS failed to “comply with
the statute that sets forth the subpoena process required to
access bank records.”

To the extent that defendant argues on review that
only a warrant or an exception to a warrant requirement
will justify requiring a third party to turn over another
person’s records, that argument is difficult to square with
this court’s cases. This court has long recognized that an
administrative subpoena issued as part of a civil investiga-
tion will comply with Article I, section 9, as long as the sub-
poena is “relevant to a lawful investigatory purpose and ***
no broader than the needs of the particular investigation.”
Pope & Talbot, Inc. v. State Tax Com., 216 Or 605, 614-15,
840 P2d 960 (1959); see Dept. of Rev. v. Universal Foods
Corp., 311 Or 587, 545-46 n 6, 815 P2d 1237 (1991) (reaffirm-
ing that, “where certain limits on breadth and relevancy are
satisfied, neither the Fourth Amendment nor Article I, sec-
tion 9, of the Oregon Constitution [is] offended” by a statuto-
rily authorized administrative subpoena); Southern Oregon
Broadcasting Co. v. Dept. of Revenue, 287 Or 35, 40, 597
P2d 795 (1979) (upholding subpoena for taxpayer’s records

4 In Pope & Talbot, the court quoted the following passage to describe the
limits that the state and federal constitutions place on an agency’s use of an
investigatory subpoena:

“Of course a governmental investigation into corporate matters may be
of such a sweeping nature and so unrelated to the matter properly under
inquiry as to exceed the investigatory power. But it is sufficient if the inquiry
is within the authority of the agency, the demand not too indefinite and the
information sought is reasonably relevant. The gist of the protection is in
the requirement, expressed in terms, that the disclosure sought shall not be
unreasonable.”

Pope & Talbot, Inc., 216 Or at 616 (quoting United States v. Morton Salt Co., 338

US 632, 652-53, 70 S Ct 357, 94 L Ed 401 (1950)) (citations and internal quotation.

marks omitted).

440 Le

to determine whether income method for valuing its worth
applied).

Justice Linde explained, in a related context, the
premise that underlies those decisions:

“Besides the historic objection to general warrants, the
function of the guarantee [found in Article I, section 9,] is
to subordinate the power of executive officers over the peo-
ple and their houses, papers, and effects to legal controls
beyond the executive branch itself. One measure of control
is found in a carefully limited judicial warrant; another is
found in legislative enactments defining and limiting offi-
cial authority. Without these controls, executive officers
could define and exert their own authority to search and to
seize however widely they thought necessary.”

State v. Weist, 302 Or 370, 376-77, 730 P2d 26 (1986). As
Weist teaches and Pope & Talbot holds, “legislative enact-
ments defining and limiting official authority” can authorize
an administrative subpoena to obtain evidence for a civil
investigation that otherwise might infringe a constitution-
ally protected privacy interest.’ Indeed, if defendant were
correct that customers have a protected privacy interest
in their bank records that only a search warrant based on
probable cause can reach, the common practice of using a
legislatively authorized subpoena in civil cases to obtain a
party’s bank records would be called into question.

1 Some courts have reasoned that a subpoena duces tecum is less intru-
sive than a search warrant. As the district court explained in Stanford Daily v.
Zurcher, 358 F Supp 124 (ND Cal 1972):

“[a] subpoena duces tecum *** is much less intrusive than a search warrant:

the police do not go rummaging through one’s home, office, or desk if armed

only with a subpoena. And, perhaps equally important, there is no opportunity
to challenge the search warrant [before it is executed], whereas one can always
move to quash the subpoena before producing the sought-after materials.”
Id. at 180. The district court accordingly held that the state needed to use a sub-
poena rather than a warrant to obtain a third party’s papers. Jd. The Supreme
Court reversed, reasoning that the Fourth Amendment does not prefer a sub-
poena over a warrant, Zurcher v. Stanford Daily, 436 US 547, 98 S Ct 1970, 56
L Ed 2d 525 (1978).

* The courts have recognized that subpoenas constitute sufficient state
action to implicate any Article I, section 9, and Fourth Amendment interests
that a party may have in the requested records. See Wayne R. LaFave, 2 Search
and Seizure § 4.13 (5th ed 2012) (discussing government use of subpoenas in a
criminal context). And, as the court explained in Weist, Article I, section 9, is not
limited to criminal prosecutions but applies to civil actions as well. 302 Or at 376.

fe 441

On review, defendant appears to recognize that the
position that he took below is too broad. He now acknowledges
that a warrant or an exception to the warrant requirement is
not the only permissible means to obtain bank records. That
is, he recognizes that a subpoena will also be “reasonable”
for the purposes of Article I, section 9, if it is issued pursuant
to a properly authorized administrative scheme. However, he
asserts that DCBS did not issue its subpoenas pursuant to
such a scheme. Additionally and perhaps alternatively, he
argues that both sets of subpoenas failed to comply with the
bank records statutes or that the second set of subpoenas
was the fruit of the first set, which was tainted.

We begin with defendant’s assertion that DCBS
did not issue its subpoenas pursuant to a properly autho-
rized statutory scheme. On that point, the legislature has
prohibited the sale of unregistered securities in Oregon,
ORS 59.055, and it has given DCBS authority to regulate
the offering and sale of securities within this state, ORS
59.235.4 Among other things, DCBS may investigate
“whether a person has violated or is about to violate any
provision of the Oregon Securities Law or any rule or order
of the director” of DCBS. ORS 59.245(1). DCBS may file suit
to enjoin a violation of the Oregon securities laws and may
seek restitution or damages on behalf of persons injured by
a violation of those laws. ORS 59.255(), (4). Finally, ORS
59.315(1) provides that, “[flor the purpose of an investiga-
tion *** under the Oregon Securities Law, the Director of
[DCBS] may *** subpoena witnesses *** and require the
production of books, papers, correspondence, memoranda,
agreements or other documents or records which the direc-
tor deems relevant or material to the inquiry.”

The administrative subpoenas that DCBS issued
in this case fell squarely within its statutory authority to
investigate the sale of unregistered securities in Oregon.
Defendant has not explained why DCBS’s subpoenas were
not issued pursuant to a properly authorized administrative

¥ In using the phrase “securities,” we refer only to those securities that are
subject to registration in Oregon. Some securities are exempt from registration
in Oregon. See ORS 59.025 (listing exempt securities); ORS 59.049 (defining
when “[flederal covered securities” may be offered and sold in Oregon without
registration).

442 Ld

scheme, nor has he explained why the information that
DCBS sought was not relevant to its investigation into the
sale of unregistered securities. See Pope & Talbot, Inc., 216
Or at 616 (stating that standard). We accordingly disagree
with his assertion that DCBS’s subpoenas were not issued
pursuant to a properly authorized statutory scheme.

Defendant advances a related but separate set
of arguments. He contends that the subpoenas that were
issued in this case were constitutionally “unreasonable”
because “the state did not comply with the statute that sets
forth the subpoena process required to access bank records.”
On that issue, defendant advances three arguments.

Defendant argues initially that the first set of sub-
poenas issued by DCBS failed to comply with the require-
ment in ORS 192.596(2) that the subpoenas be personally
served on his wife. As noted above, however, defendant never
argued in the Court of Appeals that the first set of subpoe-
nas was deficient for that reason. Rather, he argued only
that anything less than a warrant was insufficient. When a
party has lost in the Court of Appeals, that party cannot ask
us to reverse the Court of Appeals decision on a ground that
the party did not raise in that court. See Tarwater v. Cupp,
304 Or 639, 644-45, 748 P2d 125 (1988) (having argued and
lost in the Court of Appeals on the ground that an instruc-
tion was correct, the state could not shift position in the
Supreme Court and argue that the instruction was harm-
less); cf State v. Suppah, 358 Or 565, 572-73, 369 P3d 1108
(2016) (having won in the Court of Appeals, defendant could
raise an issue on review to uphold the Court of Appeals deci-
sion that he had not raised in the intermediate court).

Defendant advances a second argument under the
bank records statute. He contends that the second set of
subpoenas, which the prosecutor issued pursuant to ORS

18 We also note that defendant has not argued on review that DCBS issued its
administrative subpoenas to obtain evidence for a criminal prosecution, nor has
he explained on review why evidence uncovered in the course of a civil investiga-
tion into the sale of unregistered securities may not be used in a criminal trial for
theft, aggravated theft, and criminal mistreatment. Cf Nelson v. Lane County,
304 Or 97, 104 n 5, 743 Pad 692 (1987) (plurality) (Article I, section 9, does not
prevent evidence of “another crime” discovered during “a legally authorized and
properly administered administrative inspection” from being used in a criminal
prosecution).

Po 443

138.563, sought information for a longer period of time than
ORS 192.603(1) authorizes.!* That argument faces two pro-
cedural hurdles. Defendant failed to argue in either the trial
court or the Court of Appeals that the subpoenas the pros-
ecutor issued sought more information (information over a
longer time period) than ORS 192.603(1) permitted. Beyond
that, in the trial court, defendant expressly invited the pros-
ecutor to use a court subpoena to obtain that information.
As set out above, in the trial court, defendant invited the
prosecutor to issue subpoenas pursuant to ORS 136.565 to
obtain all the records that DCBS had obtained pursuant
to its administrative subpoenas. We decline to reverse the
Court of Appeals and the trial court on the basis of a per-
ceived error that defendant did not raise below and in fact
invited. See State ex rel Juv. Dept. v. S. P., 346 Or 592, 215
P3d 847 (2009) (upholding Court of Appeals decision not to
overturn trial court ruling in similar situation).

Defendant appears to raise a final issue on review
regarding the second set of subpoenas. Defendant argued in
the trial court that the second set of subpoenas was the fruit
of the poisonous tree and appears to pursue that argument
on review. As we understand defendant’s argument, he con-
tends that the state based its decision to issue a second set
of subpoenas on information that DCBS learned as a result
of its issuance of the first set of subpoenas. The initial diffi-
culty with defendant’s fruit-of-the-poisonous-tree argument
is that the state put on evidence, which the trial court cred-
ited, that the second set of subpoenas would have been issued.
based on the Von Renchlers’ complaints to DCBS, which were
independent of any information that DCBS learned after
issuing its first set of subpoenas. Beyond that, defendant did
not raise this issue in the Court of Appeals and thus failed
to preserve it. See Tarwater, 304 Or at 644-45 (party cannot
seek to reverse the Court of Appeals decision on a ground
not raised in that court), In these circumstances, we decline
to reach defendant’s fruit-of-the-poisonous-tree argument.

¥% ORS 192.603 provides that, when a law enforcement agency requests
account information from a financial institution to assist in a criminal investiga-
tion, the institution shall supply information limited to three months before and
three months after the “date of occurrence of the account transaction giving rise
to the criminal investigation.” ORS 192.603(1).

444 Ld

Given the factual and legal posture in which this
issue arises, we resolve this case on the following ground:
Even if defendant has a protected privacy interest in his
wife’s bank records, our decisions lead to the conclusion
that the administrative subpoenas issued by DCBS did
not violate defendant’s Article I, section 9, rights. We leave
for another day the question whether and in what circum-
stances a defendant will have a protected privacy interest
in information that a third party maintains, a question that
can arise in differing factual circumstances which can have
a bearing on its resolution. On that basis, we affirm the
Court of Appeals decision and the trial court’s judgment.

The decision of the Court of Appeals and the judg-
ment of the circuit court are affirmed.

445

Argued and submitted June 14, decisions of Court of Appeals affirmed,
judgments of cireuit court reversed, and cases remanded to circuit court for
further proceedings October 20, 2016

JACOB HENRY BARRETT,
Respondent on Review,
v.
Colette PETERS,
Director,
Oregon Department of Corrections,
Petitioner on Review.

(CC 18C20437; CA A155789; SC S063748 (Control))
JACOB HENRY BARRETT,
Respondent on Review,

v.

Colette PETERS,
Director,

Oregon Department of Corrections,
Petitioner on Review,
and
Greg JONES,

Karin Potts, and Jana Russell,
Defendants.

(CC 18023141; CA A156271; SC S063744)
388 P8d 813

446 Lt

Jona J. Maukonen, Assistant Attorney General, Salem,
argued the cause and filed the brief for petitioner on review.
Also on the brief were Ellen F. Rosenblum, Attorney General,
and Paul L. Smith, Deputy Solicitor General.

Nadia H. Dahab, Stoll Stoll Berne Lokting & Shlachter,
P.C., Portland, argued the cause and filed the brief for
respondent on review.

WALTERS, J.

The decisions of the Court of Appeals are affirmed. The
judgments of the circuit court are reversed, and the cases
are remanded to the circuit court for further proceedings.

Po 447

WALTERS, J.

Petitioner is an inmate who committed aggravated
murder in Oregon and who was convicted, sentenced, and
incarcerated in Oregon; however, pursuant to the Interstate
Corrections Compact (ICC), ORS 421.245, Oregon trans-
ferred petitioner to an institution in the state of Florida.
Thereafter, petitioner filed, in Oregon, two separate petitions
for writ of habeas corpus alleging, among other things, that
the terms of his confinement in Florida violate his rights
under the state and federal constitutions. We conclude, as
did the Court of Appeals, that petitioner’s transfer to and
confinement in Florida do not prohibit him from bringing
those constitutional claims. We affirm the decisions of the
Court of Appeals. Barrett v. Peters, 274 Or App 237, 250, 360
P3d 638 (2015); Barrett v. Peters, 274 Or App 251, 254, 360
P3d 646 (2015). We reverse the contrary judgments of the
circuit court.

I. BACKGROUND

Petitioner committed aggravated murder in Oregon
and was convicted and sentenced to life in prison. Oregon
transferred petitioner to the state of Florida pursuant to
the ICC, ORS 421.245, and petitioner later filed two peti-
tions for writ of habeas corpus in Oregon pursuant to ORS
34.310 and ORS 34.362, naming the Director of the Oregon
Department of Corrections (ODOC) as defendant. In his
first habeas petition, petitioner alleged that the terms and
conditions of his confinement in Florida violate his rights
under the Oregon Constitution, specifically, his rights under
Article I, sections 2, 3, and 18, to the free exercise of reli-
gion and to be free from “unnecessary rigor.” Petitioner also
alleged that he had “made defendant aware of the denial of
the right of free exercise” and had filed a formal grievance
with ODOC, which it had denied. In addition, petitioner
alleged that the conditions of his confinement violate the
Due Process Clause of the Fourteenth Amendment to the
United States Constitution

} Petitioner also alleged other violations that we do not address. First, peti-
tioner alleged that the lack of pretransfer notice and a hearing before ODOC vio-
lated his right to due process of law under the federal constitution. The trial court
concluded that that claim was meritless, and petitioner did not assign that ruling
as error in the Court of Appeals or raise it on review. We therefore do not address

448

In his second habeas petition, petitioner alleged
that, by transferring him to and confining him in the State
of Florida, defendant had denied him “timely and meaning-
ful rehabilitative treatment and programming” in violation
of the Eighth and Fourteenth Amendments to the United
States Constitution, as well as his Oregon constitutional
right to be free from “unnecessary rigor.” Petitioner asserted
that defendant “was in a position of authority,” “opted to take
no action” in response to his requests to transfer, and “knew
or should have known” that petitioner was being confined in
violation of his constitutional rights.

Before the trial court, defendant? moved to “deny”
petitioner’s first habeas petition for failure to state a claim.
ORS 34.370. The state argued that the director was not a
proper defendant because she did not have physical custody
of petitioner and because she did not control the conditions
of confinement in Florida. The trial court agreed with the
state and dismissed petitioner's first habeas petition with
prejudice. Subsequently, the trial court, acting sua sponte,
dismissed petitioner’s second petition for the same reasons
that it had dismissed petitioner’s first petition.

Petitioner appealed to the Court of Appeals, and
that court reversed both trial court decisions. Barrett v.
Peters, 274 Or App 237 at 250; Barrett v. Peters, 274 Or App
251 at 254. In its decision as to petitioner’s first petition, the
Court of Appeals held that an Oregon inmate incarcerated
out of state pursuant to the ICC retains the right to peti-
tion for a writ of habeas corpus in Oregon to remedy alleged
unconstitutional conditions of confinement and that peti-
tioner had properly named the Director of ODOC as defen-
dant. Barrett v. Peters, 274 Or App 237 at 247. In reaching
that conclusion, the court relied on this court’s decision in
Barrett v. Belleque, 344 Or 91, 100, 176 P3d 1272 (2008),? that

it. Second, petitioner alleged that the terms and conditions of his confinement
violate the Religious Land Use and Institutionalized Persons Act (RLUIPA), 42
USC sections 2000cc to 2000ce-5, We do not address that violation, because the
state did not separately challenge it in the trial court or the Court of Appeals.

2 Throughout the remainder of this opinion, we will refer to defendant, the
Director of the ODOC, as “the state.”

8 The petitioner in this case was also the petitioner in Barrett v. Belleque, but
the cases are not related. We will refer to that case as Barrett v. Belleque through-
out this opinion.

449

“Tt]he terms of the ICC *** supplement the ordinary habeas
jurisdictional analysis.” Barrett v. Peters, 274 Or App 237 at
244. In the case involving petitioner’s second petition, the
Court of Appeals relied on its decision involving petitioner’s
first petition and again reversed the trial court judgment.
Barrett v. Peters, 274 Or App 251 at 254.

The state sought review of both cases in this court,
raising three issues: (1) whether Oregon law permits an
inmate confined outside of Oregon pursuant to the ICC to file
a petition for a writ of habeas corpus in Oregon; (2) whether
petitioner alleged cognizable habeas corpus claims in con-
testing the conditions of his confinement in Florida; and
(3) whether petitioner properly named the Director of ODOC
as defendant in these cases. This court granted review and
consolidated the two cases.

Il. ANALYSIS

We begin with the first question on review, which is,
as noted, whether inmates incarcerated outside of Oregon
as the result of transfer under the ICC, ORS 421.245, are
entitled to seek a writ of habeas corpus under ORS 34.310.
For the reasons that follow, we conclude that they are.

A. Oregon law permits petitioner to bring a claim for habeas
relief.

Under the habeas statutes, when an inmate alleges
deprivations of state or federal constitutional rights that are
of the type that “would require immediate judicial scrutiny,”
and “it also appears to the court that no other timely rem-
edy is available to the prisoner,” the inmate has the right to
petition for a writ of habeas corpus to remedy the alleged
deprivations. Penrod/Brown v. Cupp, 283 Or 21, 28, 581 P2d
934 (1978); ORS 34.310; ORS 34.362. ORS 34.310 provides,
in part:

“Every person imprisoned or otherwise restrained of lib-
erty, within this state, *** may prosecute a writ of habeas
corpus to inquire into the cause of such imprisonment or
restraint, and if illegal, to be delivered therefrom.”

The state argues from the text of that statute that,
to qualify for habeas relief, a person must be confined within

450 Ld

Oregon’s geographic boundaries. The state contends that
the phrase “within this state” is a reference to Oregon's geo-
graphic boundaries. The “within this state” requirement for
habeas relief was part of the Oregon session laws enacted
in 1862, General Statutes of Oregon, chapter VII, title III,
section 597, page 152 (1862), and was later included in the
Deady Code, General Laws of Oregon, Civil Code, chap-
ter VII, title III, section 597, page 300 (Deady 1945-1864).
The state contends that, when the legislature enacted those
laws, “within” was defined as “[i]n the inner part, as the
space within the walls of a house,” and as “[iJn the limits
or compass of; not beyond; used of place and time.” Noah
Webster, 2 An American Dictionary of the English Language
114 (1828). Therefore, the state argues, when the legisla-
ture originally drafted the “within this state” requirement,
it would have understood that phrase to mean inside the
geographic boundaries of the State of Oregon.

Petitioner does not contend otherwise. Rather, peti-
tioner contends that he is entitled to seek habeas relief for
two alternative reasons: First, because the “restraint” to
which ORS 34.310 refers includes constructive restraint;
and second, because the ICC supplements the habeas stat-
utes and preserves petitioner’s right to participate in any
proceedings in which he could have participated if he were
incarcerated in Oregon, including habeas proceedings. We
find petitioner’s second, alternative argument persuasive for
the following reasons. :

The ICC permits the transfer of Oregon inmates
to states and territories that are parties to that compact
and specifically addresses the rights of transferred inmates.
Article IV, section 5, of the ICC provides that “[tlhe fact of
confinement in a receiving state shall not deprive any inmate
so confined of any legal rights” that the inmate would have
had if confined within the sending state.* Article IV, section
8, grants a transferred inmate the right to participate in
any action or proceeding in which the inmate could have
participated if confined in the sending state. It provides that

4 The “[rleceiving state” is the “state party to [the ICC] to which an inmate
is sent for confinement other than a state in which conviction *** was had.” ORS
421.245, Art II, § 8. The “[s]ending state” is the “state party to [the ICC] in which
conviction *** was had.” Id. at § 2.

Po 451

“{alny inmate confined pursuant to the terms of this
compact shall have any and all rights to participate in and
derive any benefits or incur or be relieved of any obliga-
tions or have such obligations modified or the status of the
inmate changed on account of any action or proceeding in
which the inmate could have participated if confined in any
appropriate institution of the sending state located within.
such state.”

ORS 421.245, Art IV, § 8. In Barrett v. Belleque, this court
construed those two provisions of the ICC as “supple-
mentling] the ordinary habeas jurisdictional analysis.” 344
Or at 100.

The petitioner in Barrett v. Belleque was impris-
oned in Oregon when he filed his claim for habeas relief. Id.
at 93. The trial court reached the merits of the petitioner's
claim and denied it. Id. The Court of Appeals affirmed. Id.
The petitioner then sought review in this court, but, before
the court could act, the state transferred the petitioner to
an Oklahoma prison under the ICC. Id. The state moved to
dismiss review on the grounds that the matter had become
moot. The state argued that neither the petitioner nor his
custodian was “within this state,” as ORS 34.310 requires;
they were, the state asserted, “in Oklahoma.” Id. at 100.
This court concluded that the case was not moot and reached
the merits of the petitioner’s claims, “to the extent that they
*** affect[ed] his current incarceration in Oklahoma.” Id. at
101. The court reasoned as follows:

“The terms of the ICC, however, supplement the ordi-
nary habeas jurisdictional analysis. Petitioner commit-
ted his crimes in Oregon, was convicted and sentenced in
Oregon, and is serving an ‘Oregon’ sentence. Under the
ICC, petitioner cannot be deprived of any legal rights that
he would have enjoyed in Oregon. See ORS 421.24[5], Art
IV(5) (so stating).”

Id. at 100.

The state argues that our decision in Barrett v.
Belleque turned not on an interpretation of the habeas
statute, ORS 34.310, or on an interpretation of the ICC,
ORS 421.245, but on the well-settled principle, articulated
in Anderson v. Britton, that “the function of habeas corpus

452 Le

cannot be defeated by a transfer of custody after a rul-
ing in the trial court and pending appeal to [the supreme
court].” 212 Or 1, 5, 318 P2d 291 (1957), superseded by stat-
ute on other grounds as explained in Delaney v. Gladden,
232 Or 806, 374 P2d 746 (1962). But this court did not cite
Anderson in Barrett v. Belleque, and for good reason. In
Anderson, the petitioner had been transferred, not out of
state, but from the county jail to the state penitentiary.
Thus, the court in Anderson was not required to confront
the issue presented in Barrett v. Belleque and the state’s
very different argument there that petitioner’s claim was
moot because he was not longer “within the state,” as ORS
34.310 requires. In Barrett v. Belleque, this court held, as
a necessary response to that argument, that the ICC sup-
plements ORS 34.310 and permits out of state prisoners
to challenge the terms of their confinement by means of a
habeas corpus proceeding.

Barrett v. Belleque is precedent that we are required
to follow, and we therefore conclude that petitioner is per-
mitted to challenge the terms and conditions of his confine-
ment in Florida in this action.

B. Petitioner alleged cognizable violations of the Oregon
Constitution.

The next question that the state poses is whether
petitioner brings a cognizable habeas claim for violation
of his rights under the state and federal constitutions by
alleging that the terms and conditions of his confinement
in Florida are unconstitutional. To state a claim for habeas
corpus, a petitioner must plead

“facts in support of a claim that the person is deprived of a
constitutional right that requires immediate judicial atten-
tion and for which no other timely remedy is practicably
available to the plaintiff.”

ORS 34.362. The state argues that petitioner’s allega-
tions are legally insufficient for three interrelated reasons:
(1) Even if the ICC supplements habeas corpus jurisdic-
tion and permits inmates who are not confined “within
this state” to bring a habeas claim, the ICC does not grant
inmates the right to challenge conditions of confinement

Po 453

in a receiving state because those conditions do not meet
the standards of sending states—instead, the ICC grants
receiving states the right to set conditions of confinement
that they determine are appropriate and requires that all
inmates be treated equally according to those conditions;
(2) éven if the ICC grants inmates the right to challenge
the conditions of confinement imposed by receiving states,
that right is a statutory right and not a constitutional right;
and (3) the Oregon Constitution does not apply in receiving
states, and conditions of confinement imposed by receiving
states are not the result of Oregon state action.

The state draws its arguments from the ICC, par-
ticularly ORS 421.245, Article IV, section 5. The first sen-
tence of section 5 provides:

“All inmates who may be confined in an institution pur-
suant to the provisions of this compact shall be treated in
a reasonable and humane manner and shall be treated
equally with such similar inmates of the receiving state as
may be confined in the same institution.”

The second sentence provides:

“The fact of confinement in a receiving state shall not
deprive any inmate so confined of any legal rights which
said inmate would have had if confined in an appropriate
institution of the sending state.”

According to the state, the first sentence of section 5 makes
inmates transferred under the ICC subject to the rules and
disciplinary authority of the receiving state; the second gov-
erns other rights that an inmate may have—for example,
rights related to the validity of the inmate’s conviction, the
length of a sentence, good-time credits, and parole. In sup-
port of that interpretation, the state cites cases in which
courts have held that the ICC does not grant inmates the
right to application of the sending state’s disciplinary, vis-
itation, classification, and grooming policies. See Vigue v.
Underwood, 139 SW3d 168, 171-72 (Ky Ct App 2004) (con-
cluding that ICC does not require application of disciplinary
rules of sending state); Daye v. State, 171 Vt 475, 481-82, 769
A2d 630 (2000) (same); Glick v. Holden, 889 P2d 1389, 1392-
93 (Utah Ct App 1995) (same).

454 Le

We need not decide, in this case, whether we agree
with those holdings. In this case, petitioner does not allege
that he is entitled to have the state of Florida apply Oregon
disciplinary rules or policies; rather, he alleges that the
conditions under which he is confined in Florida violate
his rights under the state and federal constitutions. As the
Court of Appeals correctly explained in its opinion regard-
ing petitioner's first petition, “the issue in this case is not
whether the ICC require[s] [the receiving state] to adhere
to Oregon’s policies or to comply with Oregon’s constitutional
standards; the issue is whether [petitioner] lost the right to
be incarcerated under conditions that comply with Oregon
constitutional standards, by virtue of his transfer to [the
receiving state].” Barrett v. Peters, 274 Or App 237 at 244
(emphasis in original). The answer to that question is “no.”
The second sentence of ORS 421.245, Article IV, section 5,
specifically provides that the fact of confinement in a receiv-
ing state “shall not deprive any inmate so confined of any
legal rights which said inmate would have had if confined in
an appropriate institution of the sending state.” Even if that
sentence does not grant an inmate the right to have partic-
ular administrative rules of the sending state apply in the
receiving state, it at least guarantees that the transferred
inmate will retain, and not lose, constitutional rights. See
Johnson v. State, 442 A2d 1362, 1867 (Del 1982) (“a legiti-
mate and reasonable basis for transferring an inmate does
not justify the denial to him of an opportunity to exercise a
constitutional right”); In re Sheryl S., 1991 WL 61396, at *2
(Conn Super Ct Apr 12, 1991) (transferred inmate retains
constitutional right to be present at hearings on petition of
juvenile neglect).

That the Oregon legislature did not intend the ICC
to deprive transferred inmates of their constitutional rights
is a proposition supported not only by the text of that stat-
ute, but also by its legislative history. See State v. Gaines,
346 Or 160, 171, 206 P3d 1042 (2009) (holding legisla-
tive intent is interpreted by examining text, context, and
any helpful legislative history). When the ICC was before
the House Judiciary Committee in 1979, Representative
Lombard asked Committee Counsel whether, in the event
that the sending state had a provision or legal right that

Ps 455

the receiving state did not have, the receiving state would
be required to provide those rights to transferred inmates.
Tape Recording, House Committee on Judiciary, HB 2070,
Feb 2, 1979, Tape 6, Side 1 (comments of Rep Kip Lombard).
Committee Counsel responded that the “bill states that
they maintain their legal rights.” Id. (comments of Dennis
Bromka). Later, Chairman Gardner asked a representative
of the Oregon Corrections Division whether correctional
facilities would scrutinize the prisoners to be exchanged to
avoid conflicts between the rules of the sending and receiv-
ing states. Id. (comments of Chairman James Gardner).
The Corrections representative responded that they would
and added that “the key thing to remember” was that “most
of these transfers are voluntary in nature and most of the
prisoners want to be closer to their families.” Id. (comments
of Thomas Toombs). It does not appear that the legislature
intended that inmates transferred under the ICC would
be required to endure treatment that violated the Oregon
Constitution.

Thus, even if the ICC does not grant a transferred
inmate the right to conditions of confinement that accord
with Oregon statutory or administrative standards, a ques-
tion that we do not decide, the ICC does not deprive a trans-
ferred inmate of the right to conditions of confinement that
accord with constitutional requirements. Relatedly, the fact
that the ICC permits a transferred inmate to challenge the
violation of constitutional rights does not make an inmate’s
constitutional challenge a statutory claim.’ We conclude
that a transferred inmate retains the right to challenge
unconstitutional conditions in a habeas proceeding, and we
reject the state’s argument that such a right is a statutory
right.

We turn next to the state’s arguments that the
Oregon Constitution does not apply outside of Oregon and
that the conditions of confinement imposed by Florida offi-
cials do not constitute Oregon state action. Those arguments
indicate a misunderstanding of the nature of petitioner’s

5 Although, as the Court of Appeals noted, petitioner's claim that the terms
and conditions of his confinement violate RLUIPA may be a statutory claim,
Barrett v. Peters, 274 Or App 237 at 242 n 8, we do not address that question. The
state did not raise it in the trial court or in the Court of Appeals. Id.

456 Ld

claims. Petitioner alleges state action by Oregon officials in
Oregon; he alleges that the state continues to confine peti-
tioner in Florida with knowledge of the terms and conditions
of his confinement there. Even if the Oregon Constitution
does not apply in Florida, and even if Oregon has no direct
control over the conditions of petitioner’s confinement in
Florida, the Oregon Constitution does apply in Oregon and
Oregon has direct control over petitioner’s placement in a
Florida facility.6 ORS 421.245, Article IV, section 3, pro-
vides that inmates transferred under ICC “shall at all time
be subject to the jurisdiction of the sending state and may
at any time be removed therefrom.” If Oregon officials are
knowingly confining petitioner in a facility where his state
or federal constitutional rights are being violated, those offi-
cials are engaging in state action that is subject to challenge
in a habeas proceeding in Oregon.

® Petitioner also argues that the Oregon Constitution applies to Florida offi-
cials who act as agents of the State of Oregon in Florida in setting the terms and
conditions of petitioner's confinement. Petitioner first notes that Oregon constitu-
tional rights are individual rights vis-a-vis the government that may be violated
no matter where the violation occurs. See State v. Davis, 318 Or 246, 253-54, 834
P2d 1008 (1992) (acts of Mississippi officers and Oregon officers in arresting and
questioning defendant in Mississippi subject to Oregon constitutional challenge).
Secondly, petitioner argues that the acts of Oregon employees or agents can con-
stitute Oregon state action. See State v. Tucker, 330 Or 85, 90, 997 P2d 182 (2000)
(private tow truck operator acting at request of officer must act within bounds of
Oregon Constitution); State v. Sines, 359 Or 41, 51-52, 379 P3d 502 (2016) (private
individuals acting as agents of the state engage in state action for purposes of
Article I, section 9).

‘The problem with petitioner's argument in this case, however, is that the par-
ties dispute whether Florida officials are acting as Oregon’s agents in setting the
terms and conditions of petitioner's confinement. Petitioner argues that the ICC
makes receiving states the agents of sending states for all purposes and points
to the provisions of the ICC that provide that when Oregon officials transfer an
inmate to another state, the receiving state acts “solely as agent for the sending
state” ORS 421.245, Art IV, § 1. In addition, petitioner contends that the ICC
grants Oregon officials, among other things, “access, at all reasonable times,”
to the out-of-state institution, id. at § 2; the right, “at any time,” to remove the
inmate from the receiving state, id. at § 3; the authority to authorize and conduct
hearings to which the inmate is entitled by the laws of Oregon, id. at § 6; and the
authority to receive regular reports from the receiving state in order to review
the inmate’s records, id. at § 4. In contrast, the state contends that, under the
ICG, the receiving state controls day-to-day conditions of confinement, including
discipline, and cites ORS 421.425, Article IV, section 5, for that proposition. ORS
421,425, Art IV, § 5 (receiving state will treat inmate in “reasonable and humane
manner” and “equally with” other inmates); Daye, 171 Vt at 481; Glick, 889 P2d at
1893. Because we decide this case on an alternative ground, we need not resolve
that dispute.

Po 457

C. The Director of ODOC is a proper defendant.

The final question on review is whether the Director
of ODOC is a proper defendant in a petition for a writ of
habeas corpus by an inmate held out of state pursuant to
the ICC. The state contends that the director is not a proper
defendant because she is not petitioner’s physical custodian,
and because she does not control the day-to-day conditions
of petitioner’s confinement in Florida. Petitioner argues that
the director is the “officer or person by whom [petitioner]
is imprisoned or restrained,” and that she is therefore an
appropriate defendant under the habeas statutes. ORS
34.360. For the following reasons, we agree with petitioner.

ORS 34.362 provides that a petition for a writ of
habeas corpus must “[c]omply with [the] requirements of
ORS 34.360(1), (8), (4), and (5)[.]” ORS 34.360(1) specifies
that the petition must state the “officer or person by whom
the party is imprisoned or restrained.” That individual is the
appropriate defendant in a habeas proceeding, whether he
or she has physical, or only constructive, custody of the peti-
tioner. That interpretation of the habeas statute is consis-
tent with our holding in Anderson. 212 Or at 6. In that case,
we acknowledged that “ordinarily,” a habeas claim “must
be against the one having physical custody of the plaintiff.”
Id. at 5. Even so, we concluded that, despite the plaintiff's
transfer from the jail to the penitentiary, the plaintiff had
appropriately named the sheriff as the defendant in his peti-
tion because, “for the purpose of [the] proceedingl[,] plaintiff
remain[ed] constructively in the custody of the sheriff pend-
ing determination of the appeal.” Id. at 6.

Transfer out of state pursuant to the ICC is another
circumstance in which the legal or constructive custodian
is the proper defendant in a petition for habeas relief. The
transferred inmate remains “subject to the jurisdiction of
the sending state.” ORS 421.245, Art IV, § 3. At any time,
the sending state may remove the transferred inmate from
the receiving state. Id. Thus, although a transferred inmate
is in the physical custody of the receiving state, the sending
state retains sole authority to remove petitioner from the
conditions about which he complains. As Church explains in
his Treatise on the Writ of Habeas Corpus, the writ of habeas

458 Lt

corpus “is directed to a person detaining another, command-
ing him to produce the body of the person detained.” William
S. Church, A Treatise on the Writ of Habeas Corpus § 87, 137
(2d ed 1898). Historically, the person physically detaining
the inmate was the proper defendant, because that person
alone had the authority to “bring [the detainee] before the
judge to explain and justify, if he could, the fact of impris-
onment.” Id. § 88 at 140. In this case, that person is the
Director of ODOC, despite the fact that she does not have
physical custody of petitioner, and we conclude that peti-
tioner properly named her as the defendant in his petitions.

Lastly, we address the state’s argument that the
director is not the proper defendant because she lacks con-
trol over the conditions about which petitioner complains.
Just as it did in making its argument that petitioner failed to
allege a cognizable violation of his constitutional rights, the
state misses the thrust of petitioner’s argument. Petitioner’s
argument is not that he is entitled to habeas relief because
the Florida prison has different policies and programming
than Oregon prisons. His argument, instead, is that the
rules and institutional policies in place in the Florida prison
give rise to violations of the state and federal constitutional
rights to which he remains entitled. Although the state may
be correct that the director has no authority to control the
conditions of confinement in out-of-state prisons, a question
that we do not decide, we do not agree that the director lacks
the ability to remedy petitioner’s constitutional complaints.
The director retains the right to remove petitioner from the
receiving state and return him to Oregon, or, alternatively,
to transfer petitioner to a state that is also party to the ICC
but whose institutional rules and policies will not give rise
to constitutional violations. In that respect, the director
does control the conditions of petitioner’s confinement. But,
regardless, the defendant in a habeas proceeding need not
have direct control over the immediate, allegedly uncon-
stitutional, conditions of confinement; the defendant need
only have a custodial relationship with the petitioner. ORS
34.360(1).

In summary, we conclude that (1) inmates incarcer-
ated outside of Oregon as the result of transfer under the
ICC, ORS 421.245, are permitted to file claims for habeas

Po 459

corpus in Oregon; (2) petitioner alleged cognizable violations
of the state and federal constitutions; and (3) the Director of
ODOC is the proper defendant in petitioner’s habeas peti-
tions. Those conclusions require that we remand to the cir-
cuit court for further proceedings.

The decisions of the Court of Appeals are affirmed.
Thejudgments of the circuit court are reversed, and the cases
are remanded to the circuit court for further proceedings.

460

Argued and submitted June 14, decision of Court of Appeals affirmed, judgment
of circuit court reversed, and case remanded to circuit court for further
proceedings October 20, 2016

MARVIN LEE TAYLOR,
Respondent on Review,
Uv.
Colette PETERS,
Director,
Oregon Department of Corrections,
Petitioner on Review.
(CC 18021251; CA A155794; SC S063763)

383 P3d 279

Jona J. Maukonen, Assistant Attorney General, Salem,
argued the cause and filed the briefs for petitioner on review.
Also on the briefs were Ellen F. Rosenblum, Attorney
General, and Paul L. Smith, Deputy Solicitor General.

Jed Peterson, O’Connor Weber LLP, Portland, argued the
cause and filed the brief for respondent on review.

po 461

WALTERS, J.

The decision of the Court of Appeals is affirmed. The
judgment of the circuit court is reversed, and the case is
remanded to the circuit court for further proceedings.

WALTERS, J.

Petitioner is an Oregon inmate who was convicted,
sentenced, and incarcerated in Oregon, but who is now
confined in Colorado pursuant to the Western Interstate
Corrections Compact (WICC), ORS 421.284. Petitioner
appeals from a judgment dismissing with prejudice his peti-
tion for a writ of habeas corpus under ORS 34.310. As in
Barrett v. Peters, 360 Or 445, 383 P3d 813 (2016), decided
today, this case presents the question whether petitioner’s
transfer and confinement out of state prohibits him from
bringing a habeas claim in Oregon. We conclude, as we did
in Barrett v. Peters, that it does not. Id. at 445. We affirm
the decision of the Court of Appeals, Taylor v. Peters, 274 Or
App 477, 480, 361 P3d 54 (2015), and reverse the contrary
judgment of the circuit court.

Petitioner filed a petition for habeas corpus under
ORS 34.310 and ORS 34.362, naming the Director of the
Oregon Department of Corrections (ODOC) as the defen-
dant. Petitioner alleged that defendant had violated and is
violating his constitutional rights by transferring him to and
knowingly continuing to confine him in Colorado under con-
ditions in which other prisoners are “continually” throwing
feces and urine into his cell. Specifically, petitioner alleged
that those dangerous living conditions violate his rights
under the Eighth and Fifth Amendments to the United
States Constitution, as well as Article I, sections 18 and 10,
of the Oregon Constitution. Before the trial court, defendant
moved to “deny” petitioner’s petition. The state argued that
the director was not a proper defendant because she did not
have physical custody of petitioner and because she did not
control the conditions of confinement in Colorado. The state
also argued that petitioner had not adequately alleged a con-
stitutional deprivation requiring immediate judicial atten-
tion. The trial court agreed with the state on both grounds
and dismissed the petition with prejudice.

Petitioner appealed to the Court of Appeals, and

that court reversed the decision of the trial court. Taylor,
274 Or App at 480. The court concluded that petitioner

2 Throughout the remainder of this opinion, we will refer to defendant, the
Director of ODOC, as “the state”

Po 463
had sufficiently alleged the deprivation of a constitutional
right requiring immediate judicial attention because he had
alleged that he was confined in an environment that sub-
jected him to serious health hazards. Id. at 481. The court
further concluded that the state’s contention that petitioner
has no right to an Oregon state habeas action by virtue of
his physical incarceration in Colorado was foreclosed by the
court’s decision in Barrett v. Peters, 274 Or App 237, 242, 360
P3d 638 (2015). The court reasoned that, although that case
had involved an inmate transferred under the Interstate
Corrections Compact (ICC), and not the WICC, those com-
pacts are, “for all practical purposes, identical.” Taylor, 274
Or App at 482. The state sought review in this court, raising
essentially the same three issues that it raised on review
in Barrett v. Peters, also decided today: (1) whether Oregon
law permits an inmate confined outside of Oregon pursuant
to the WICC to file a petition for a writ of habeas corpus
in Oregon; (2) whether petitioner alleged cognizable habeas
corpus claims when he contested the conditions of confine-
ment in Colorado; and (3) whether petitioner properly named
the director as the defendant in this case. 360 Or 445. The
state did not seek review of the Court of Appeals’ determina~
tion that petitioner had sufficiently alleged the deprivation
of a constitutional right requiring immediate judicial atten-
tion. This court allowed review.

The only material difference between this case and
Barrett v. Peters is that petitioner in this case was trans-
ferred to Colorado pursuant to the WICC, ORS 421.284,
instead of the ICC, ORS 421.245. Id. at 445. Those compacts
are identical, with the exception of the provisions address-
ing the states and territories that are parties to the com-
pacts. The Oregon Legislative Assembly enacted the WICC
in 1959, Or Laws 1959, ch 290, and the WICC later became
the model for the ICC, which was enacted in 1979, Or Laws
1979, ch 486. Because the ICC and WICC are identical, for
the purposes of the issues raised in this case, we conclude,
applying Barrett v. Peters, that (1) inmates incarcerated
outside of Oregon as the result of transfer under the WICC
are permitted to file claims for habeas corpus in Oregon;
(2) petitioner alleged cognizable constitutional violations;
and (8) the Director of the ODOC is the proper defendant

464 P|

in petitioner’s habeas petitions. Those conclusions require
that we remand this case to the circuit court for further
proceedings.

The decision of the Court of Appeals is affirmed.
The judgment of the circuit court is reversed, and the case
is remanded to the circuit court for further proceedings.

467

Petitions submitted on or before June 11, attorney fees and costs awarded
October 27, 2016

Everice MORO;
Terri Domenigoni; Charles Custer;
John Hawkins; Michael Arken; Eugene Ditter;
John O’Kief; Michael Smith; Lane Johnson;
Greg Clouser; Brandon Silence;
Alison Vickery; and Jin Voek,
Petitioners,
v

STATE OF OREGON;
State of Oregon, by and through
the Department of Corrections;

Linn County; City of Portland; City of Salem;
Tualatin Valley Fire & Rescue; Estacada School District;
Oregon City School District; Ontario School District;
Beaverton School District; West Linn School District;
Bend School District; and
Public Employees Retirement Board,
Respondents,
and
LEAGUE OF OREGON CITIES;

Oregon School Boards Association;
and Association of Oregon Counties,
Intervenors,
and

CENTRAL OREGON IRRIGATION DISTRICT,
Intervenor below.

(S061452 (Control))

Wayne Stanley JONES,
Petitioner,
v.
PUBLIC EMPLOYEES RETIREMENT BOARD;
Ellen Rosenblum, Attorney General;
and Kate Brown, Governor,
Respondents.
(S061431)

468 P|

Michael D. REYNOLDS,
Petitioner,
v.
PUBLIC EMPLOYEES RETIREMENT BOARD,
State of Oregon; and
Kate Brown, Governor,
State of Oregon,
Respondents.

(S061454)

George A. RIEMER,
Petitioner,
v
STATE OF OREGON;
Oregon Governor Kate Brown;

Oregon Attorney General Ellen Rosenblum;
Oregon Public Employees Retirement Board;
and Oregon Public Employees Retirement System,
Respondents.

($061475)

George A. RIEMER,
Petitioner,
v.
STATE OF OREGON,

Oregon Governor Kate Brown,
Oregon Attorney General Ellen Rosenblum,
Public Employees Retirement Board,
and Public Employees Retirement System,
Respondents.

(S061860)

384 P3d 504

|__| 469
Se
|

Gregory A. Hartman, Bennett, Hartman, Morris &
Kaplan, LLP, Portland, filed the petition for attorney fees
and costs on behalf of Everice Moro, Terri Domenigoni,
Charles Custer, John Hawkins, Michael Arken, Eugene
Ditter, John O’Kief, Michael Smith, Lane Johnson, Greg
Clouser, Brandon Silence, Alison Vickery, and Jin Voek.
Also on the petition was Aruna A. Masih.

George A. Riemer, Sun City West, Arizona, filed the peti-
tion for attorney fees and costs on behalf of himself.

Michael D. Reynolds, Seattle, Washington, filed the peti-
tion for attorney fees and costs on behalf of himself.

Wayne Stanley Jones, North Salt Lake City, Utah, filed
the petition for costs on behalf of himself.

Keith L. Kutler, Assistant Attorney General, Salem,
filed the objections to petitions for attorney fees and costs
on behalf of the State of Oregon, Kate Brown, Public
Employees Retirement Board, Public Employees Retirement
System, and Ellen Rosenblum. Also on the objections were
Anna M. Joyce, Solicitor General, and Michael A. Casper
and Matthew J. Merritt, Assistant Attorneys General.

William F. Gary, Harrang Long Gary Rudnick P.C.,
Portland, filed the objections to petitions for attorney fees
and costs on behalf of Linn County, Estacada School District,
Oregon City School District, Ontario School District, West
Linn School District, Beaverton School District, and Bend
School District and intervenors Oregon School Boards
Association and Association of Oregon Counties. Also on the
objections was Sharon A. Rudnick.

470 Po

Robert F. Blackmore, Innova Legal Advisors PC, Lake
Oswego, filed the objections to petitions for attorney fees and
costs on behalf of Tualatin Valley Fire and Rescue. Also on
the objections was Heidi W. Mason.

Before Balmer, Chief Justice, and Kistler, Walters,
Brewer, Baldwin, and Nakamoto Justices.*

BALMER, C. J.
Attorney fees and costs awarded.

* Landau, J., did not participate in the consideration or decision of this case.

Pe 471
BALMER, C. J.

This matter is before us on petitions for attorney
fees and costs brought by a law firm and three individuals
(claimants) who participated in the underlying litigation.
In that litigation, claimants were petitioners or represented
petitioners who challenged legislation passed in 2013 that
changed the pension benefits paid to certain members of the
Public Employee Retirement System (PERS) by limiting the
statutory cost-of-living adjustment (COLA) and eliminating
a PERS income-tax offset for out-of-state retirees. In Moro
v. State of Oregon, 357 Or 167, 351 P3d 1 (2015) (Moro J),
this court largely agreed with petitioners’ argument that
modifications to the COLA formula impaired petitioners’
contractual rights, thus violating Article I, section 21, of the
Oregon Constitution. But the court rejected petitioners’ sim-
ilar challenge to the elimination of the income-tax offset.
Petitioners, who were active and retired members of PERS,
were the prevailing parties.

Following the decision in Moro I, claimants peti-
tioned for attorney fees and costs. State respondents and
county/school district respondents filed objections.1 We
referred those petitions to a special master for recommended
findings of fact and conclusions of law. Moro v. State of
Oregon, 358 Or 375, 381, 364 P3d 325 (2015) (Moro II). The
special master reported his recommendations to this court,
and the parties subsequently filed objections and responses
to those recommendations. The issues raised in those filings
include which legal doctrines justify an award of attorney
fees in this case; whether self-represented attorneys are eli-
gible to receive an award of attorney fees; whether the fees
sought by claimants are reasonable; and how to pay for an
award of fees and costs.

1 “State respondents” are the State of Oregon, Governor Kate Brown,
Attorney General Ellen Rosenblum, the Public Employees Retirement Board, and
the Public Employees Retirement System. “County/school district respondents”
are Linn County, Estacada School District, Oregon City School District, Ontario
School District, West Lian School District, Beaverton School District, and Bend
School District as well as intervenors Oregon School Boards Association and
Association of Oregon Counties. Further, respondent Tualatin Valley Fire and
Rescue joined in the objections filed by state respondents and county/school dis-
trict respondents.

472 pF

After reviewing those filings, and for the reasons
described below, we conclude that fees should be awarded
based on the common-fund and substantial-benefit doc-
trines; that the self-represented attorneys are eligible to
receive a fee award under those doctrines; that a reasonable
fee award under the lodestar approach must be based on
reasonable hourly rates and reflect reductions to account for
duplicative work and work on unsuccessful claims; and that
an award in this case should be paid for as determined by
the Public Employees Retirement Board (PERB) in a man-
ner that is consistent with its statutory authority and fidu-
ciary obligations.

Four claimants seek compensation here. One claim-
ant is the law firm Bennett, Hartman, Morris & Kaplan, LLP
(“Bennett Hartman”), which represented the Moro group
of petitioners. The three additional claimants—Reynolds,
Riemer, and Jones—are PERS members who acted as pro
se petitioners in the underlying litigation. Reynolds and
Riemer, although pro se petitioners, also are attorneys and
seek both attorney fees and costs. Jones seeks only his costs.

Claimants who seek attorney fees have calculated
their fees using the lodestar method. Under the lodestar
method, a court determines a reasonable attorney fee award
by multiplying the reasonable hours expended by a reason-
able hourly rate and, when appropriate, enhancing the lode-
star amount with a fee multiplier. See Strawn v. Farmers
Ins. Co., 353 Or 210, 217, 297 P3d 439 (2013) (describing
the lodestar method). Bennett Hartman seeks $1,401,040
in fees, based on 1,693.8 hours of attorney time at between
$150 and $500 per hour and a fee multiplier of 2.0. Reynolds
seeks $562,000 in fees, based on 562 hours of attorney time
at $500 per hour and a fee multiplier of 2.0. And Riemer
seeks $397,500 in fees, based on 265 hours of attorney time
at $500 per hour and a fee multiplier of 3.0.

As it relates to costs, Bennett Hartman seeks
$62,066.18; Reynolds seeks $1,214.48; Riemer seeks
$1,159.15; and Jones seeks $1,479.24. Bennett Hartman's
cost request is substantially higher because it includes the
costs of an expert witness who testified in support of peti-
tioners in the underlying litigation.

pe 473

State respondents and county/school district respon-
dents filed objections with this court asserting various rea-
sons to deny or reduce the fees claimed. As an initial matter,
respondents dispute what legal grounds are available to jus-
tify attorney fees. Bennett Hartman and Reynolds rely on
the common-fund doctrine, while Riemer relies on both the
common-fund doctrine and on this court’s decision in Deras
v. Myers, 272 Or 47, 585 P2d 541 (1975). Although respon-
dents agree that a fee award may be justified under the
common-fund doctrine, they dispute the applicability of
Deras, and county/school district respondents additionally
argue that a portion of the fee award should be justified
under the substantial-benefit doctrine. Respondents also con-
tend that, regardless of which doctrine justifies a fee award,
no fees should be awarded to Reynolds and Riemer because
of their status as pro se petitioners, rather than attorneys
serving in a representative capacity.

If fees are awarded, the parties agree that any fee
award allowed in this case must be reasonable. Respon-
dents object to the reasonableness of the fees sought—
specifically, whether claimants are using appropriate hourly
rates and fee multipliers and whether fees should be reduced
to account for duplicative work and work on the unsuccess-
ful tax-offset claim.

Finally, the parties dispute how to pay for any award
of costs and fees, namely, how to collect the money from the
beneficiaries of the litigation. Those beneficiaries consist of
active, inactive, and retired PERS members falling within
different tiers of membership. The assets of those beneficia-
ries are therefore spread out among different accounts held
within the Public Employees Retirement Fund (PERF). That
raises the question of whether the money for any awards
should come from, for example, payments being made to
retirees, PERS’s contingency reserve account, or individual
PERS accounts.

All those disputes were presented to the special
master, whose report contained recommended findings of
fact and conclusions of law. The special master concluded
that the common-fund and substantial-benefit doctrines

414 PF

applied, but that Deras fees should not be allowed. The spe-
cial master further concluded that the common-fund and
substantial-benefit doctrines largely justified the fees sought
by Bennett Hartman, although he recommended using a 1.5
fee multiplier rather than the 2.0 fee multiplier that Bennett
Hartman requested.

The special master recommended no award of attor-
ney fees to Reynolds and Riemer, because they were acting
as pro se litigants rather than as attorneys. He also made
the alternative recommendation that, if this court were to
determine that Reynolds and Riemer were entitled to attor-
ney fees despite their status as pro se litigants, any fee
award should be adjusted based on his determination that
only 20 percent of their work contributed to the success of
the litigation. According to the special master, 80 percent
of their work either went to the losing tax-offset claim or
was duplicative of that performed by Bennett Hartman. The
special master did not recommend that any multiplier be
applied to fees awarded to Reynolds and Riemer.

Separate from attorney fees, Reynolds and Jones
seek their costs under ORAP 13.05; Bennett Hartman seeks
its litigation expenses as costs that should be awarded under
the common-fund doctrine; and Riemer seeks his costs
under both. The special master recommended an award of
costs to Bennett Hartman under the common-fund doctrine
in the amount of $62,066.18, to be paid in the same manner
as the fee award—that is, out of PERS funds held on behalf
of the PERS members who had benefitted from the litiga-
tion. And, based on ORAP 13.05, the special master recom-
mended granting the costs sought by Reynolds and recom-
mended small downward adjustments to the costs sought by
Riemer and Jones—leading to a total cost award of $548.05
for Riemer and $1,379.24 for Jones. With the exception of the
deduction applied to Riemer, we accept the special master’s
recommendations on costs.”

2 Riemer is the only party disputing the special master’s recommendation
with regard to costs. He argues that he is entitled to costs under the common-
fund doctrine, rather than the more limited costs available under ORAP 13.05,
as applied by the special master. For the reasons explained below, 360 Or at
478-83, we agree that Riemer is entitled to costs under the common-fund and
substantial-benefit doctrines and, therefore, award him the costs that he requested:
$1,159.15.

Pe 475

The parties dispute numerous issues regarding
the special master’s recommended attorney-fee awards. We
address each of those issues below.

A. Grounds for Attorney-Fee Recovery

The parties assert three grounds for attorney-fee
recovery: the common-fund doctrine, the substantial-benefit
doctrine, and this court’s decision in Deras. We address
that issue first because the rationales underlying different
grounds for recovering fees may influence how we resolve
other issues related to the determination of fee amounts.

Riemer is the only claimant seeking fees based on
Deras. Under Deras, a court has the discretion to award fees
if “the parties who request attorney fees prevailed [and]
those prevailing parties vindicated an important constitu-
tional right applying to all citizens” rather than “gain[ing]
something peculiar to themselves.” Lehman v. Bradbury,
334 Or 579, 583, 54 P3d 591 (2002).

In previous PERS litigation, we denied a claimant’s
request for Deras fees. Strunk v. PERB, 341 Or 175, 181,
139 P3d 956 (2006) (Strunk I). The special master in this
case recommends following that precedent. We agree. The
litigants in this case, including Riemer, were attempting
to gain something peculiar to themselves and other PERS
members. Although the number of people affected is large, it
is, nevertheless, a discrete group of people and a group that
is easily distinguished from the public as a whole. For that
reason, we deny Riemer’s request to award attorney fees
under Deras.

The remaining grounds offered by the parties are
the common-fund and substantial-benefit doctrines. Both
doctrines rest on the same equitable and restitutionary
grounds: to avoid unjust enrichment by spreading the liti-
gation costs among those who benefited from a legal action
brought by a plaintiff. Crandon Capital Partners v. Shelk,
842 Or 555, 566, 157 P3d 176 (2007). The common-fund
doctrine applies when a plaintiff's “legal efforts create, dis-
cover, increase, or preserve a fund of money to which others
also have a claim.” Strunk II, 341 Or at 181. A party who liti-
gates such a case may recover the costs of those legal efforts,

416 Po

including attorney fees, from the created or preserved fund.
Id. The substantial-benefit doctrine, on the other hand, ordi-
narily applies when a party’s legal efforts create nonliqui-
dated benefits—whether or not pecuniary—that are held in
common with others, such as when a union member’s lawsuit
benefits other union members, Gilbert v. Hoisting & Port.
Engrs., 237 Or 130, 137, 384 P2d 136 (1963), or ashareholder’s
lawsuit benefits the corporation and thus other share-
holders, Crandon Capital Partners, 342 Or at 562-63.

In common-fund and substantial-benefit cases, a
party pursuing its litigation objectives necessarily confers
benefits on nonparties, because the litigation implicates inter-
ests that they share. See Restatement (Third) of Restitution
and Unjust Enrichment § 29 comment a (2011) (“The under-
lying premise of all such claims in restitution is that—by
reason of the parties’ interconnected interests—the claimant
cannot pursue justifiable, self-interested objectives without
benefiting the [nonparties] as well.”). In Strunk II, this court
observed that the common-fund doctrine is “used to spread
litigation expenses among all beneficiaries of a preserved
fund so that litigant-beneficiaries are not required to bear
the entire financial burden of the litigation while Inonparty-]
beneficiaries receive the benefits at no cost.” 341 Or at 181.
Similarly, in Crandon Capital, we linked the common-fund
and the substantial-benefit doctrines, noting that, for both,
“fees are awarded not, as in a ‘prevailing party’ case, to make
the plaintiff whole by shifting all costs to the wrongdoer, but
instead to spread the costs among those on whose behalf
the case was brought and who benefitted from the plaintiff's
efforts.” 342 Or at 566.

Thus, under both doctrines, nonparty beneficiaries
of the litigation may be required to contribute to the legal
expenses of the litigation that secured the benefits. A claim
for a contribution to those legal expenses may be brought
by the party who incurred the expenses or by the attorney
who provided the legal work. Strunk II, 341 Or at 183-843

5 In this case, as in the Strunk litigation, the Bennett Hartman firm’s con-
tract with the union that paid its fees provided that the firm would, on its own
behalf, seek an award of attorney fees if the petitioners prevailed. Thus, the
award that the firm seeks here is on its own behalf, not on behalf of the individual
clients or the union that paid its bills. Under the contract, the firm is obligated

pT 477

Requiring nonparties to pay the fee award is in contrast to
fee-shifting provisions, which generally require an adverse
party to pay the legal expenses of the prevailing party. See
Restatement § 29 comment c (“[T]here can be no common-
fund recovery against an adverse party.”).

We agree with the special master that both the
substantial-benefit and common-fund doctrines provide a
basis for attorney fees here. It is beyond dispute that the
litigation undertaken by petitioners conferred very sub-
stantial benefits on other PERS members. Some of those
members are retirees who, following enactment of the 2013
amendments, received smaller COLAs than they were enti-
tled to and, as a result of that litigation, are now recover-
ing that shortfall. Other PERS members, including retired
and active members, will benefit substantially over many
years from our decision that PERB cannot reduce the COLA
rights applied to PERS benefits earned before the legisla-
ture modified those COLA rights in 2013. See Moro I, 357 Or
at 184-87 (describing pre-amendment and post-amendment
COLA benefits).

According to the special master, the present com-
bined value of benefits of the COLA holding to all nonparty
beneficiaries is about $4.5 billion, and no party seriously dis-
putes that figure. As to the application of the common-fund
theory, there is disagreement over the size of the common
fund established by the litigation. Claimants assert that
the litigation created a “fund” in the amount of the bene-
fit that the nonparty beneficiaries will receive over time—
essentially, the entire $4.5 billion of benefits identified by
the special master. County/school district respondents, how-
ever, argue that the only common fund created by the liti-
gation is the $66 million in restored COLA adjustments for
retired PERS members who had received lesser amounts
between the effective date of the 2013 COLA amendment
and this court’s decision invalidating those changes. The
remainder of the $4.5 billion, they argue, relates to amounts
that PERS members will receive over time, but is not a liqui-
dated “fund” of money subject to the common-fund doctrine.

to repay from any fee award the amount that it was paid by the union, but it is
entitled to retain any additional fees that are awarded.

478 Po

We need not resolve that dispute over the size of
the common fund in order to determine attorney fees in this
case, however. As discussed, both the substantial-benefit
and common-fund doctrines provide a basis for an award of
fees here, and the difference between them is primarily in
the nature of the benefits created by the litigation. Under
both theories, the amount of the fee award is based on the
same equitable and restitutionary considerations. Indeed,
the Restatement treats the substantial-benefit doctrine as
an application of the common-fund doctrine, where the com-
mon fund is an entity in which the party and other benefi-
ciaries have interconnected interests. See id. at § 29 com-
ment f (“The standard example of a fund of this second type
involves corporate stock: in the terminology of Section 29,
the corporation itself is then the ‘fund’ and its sharehold-
ers the beneficiaries.”). Accordingly, we turn to a consider-
ation of the appropriate fee awards in this case, based on the
common-fund and substantial-benefit doctrines.

B. Fees for Self-Represented Attorneys

The next question is whether self-represented
attorneys may receive an attorney-fee award under the
common-fund and substantial-benefit doctrines. Claimants
Reynolds and Riemer contend that they are each entitled
to an attorney-fee award because they are both attor-
neys licensed to practice law in other states—Reynolds in
Washington and Riemer in Arizona—and they performed
legal work in this litigation. Respondents object, arguing
that neither has the authority to practice law in Oregon and.
that the equitable and restitutionary grounds for an award
under the common-fund and substantial-benefit doctrines
do not justify an award for self-represented attorneys. The
special master agreed with respondents and recommended
awarding Reynolds and Riemer no attorney fees.

The special master reached that conclusion based
on both narrow technical grounds and broad policy grounds.
The narrow technical grounds are statutes and rules set-
ting out requirements for out-of-state attorneys to practice
law in Oregon courts, such as being admitted pro hac vice.*

4 See ORS 9.160(1) (providing that, with exceptions, only active members of
the Oregon bar may “practice law” in Oregon); ORS 9.241(1) (allowing out-of-state

Po 479

Neither Reynolds nor Riemer complied with those require-
ments. The special master therefore reasoned that neither
Reynolds nor Riemer was “practicing law” when they partic-
ipated in the litigation. Instead, both were allowed to partic-
ipate only because a statute, ORS 9.320, allows all parties to
a lawsuit, whether or not they are attorneys, to “prosecute[]
and defend[]” an action without violating the prohibition on
unauthorized practice of law. See also ORS 9.160(2) (estab-
lishing that self-represented parties do not violate ban on
the unauthorized practice of law).

For support, the special master contrasted the facts
presented by Reynolds and Riemer with the facts of Colby
v. Gunson, 349 Or 1, 238 P3d 374 (2010), a case in which
this court held that a self-represented attorney could obtain
fees under a statutory fee-shifting provision. In Colby, this
court noted that the self-represented attorney in that case
“4s an attorney, in the ordinary sense of the word. He grad-
uated from law school, is a member of the Oregon State Bar,
and is authorized to practice law in this state. Throughout
the proceedings below, he was subject to the Oregon Rules
of Professional Conduct, along with other statutory provi-
sions that govern the conduct of attorneys.” Id. at 8. Because
Reynolds and Riemer were pro se litigants who had not com-
plied with the rules on pro hac vice admission, the special
master concluded that they were not authorized to practice
law in Oregon and, therefore, were not eligible for a fee
award.

The problem with relying on those narrow techni-
cal grounds is that they do not correspond to the equitable
goal served by a restitutionary attorney-fee award under the
common-fund and substantial-benefit doctrines—namely,
avoiding the unjust enrichment that would result from
allowing nonparties to enjoy the benefits of the litigation
without contributing to the costs of the litigation. A restitu-
tionary award for the services of another is generally lim-
ited to professional services. See Matter of Cont’l Illinois Sec.

attorney to practice in Oregon courts only if “the attorney is associated with an
active member of the Oregon State Bar”); ORAP 8.10(4) (allowing out-of-state
attorney to “appear by brief and argue the cause in a proceeding before an appel-
late court” if the attorney complies with UTCR 3.170); UTCR 3.170 (requiring
out-of-state attorney to be admitted pro hac vice).

480 {|

Litig., 962 F2d 566, 571 (7th Cir 1992), as amended on denial
of rehig (May 22, 1992) (Posner, J.) (“The basis for an award
of fees in a common-fund case is, as we said, restitutionary,
and the law of restitution (excepting salvage in admiralty)
generally confines the right to restitution to professionals,
such as doctors and lawyers.”) (citing 2 George E. Palmer,
The Law of Restitution, ch 10 (1978)). Therefore, the under-
lying question in deciding on a restitutionary fee award is
whether Reynolds and Riemer were lawyers who performed
work normally performed by a lawyer.

The rules on pro hac vice admission and the unau-
thorized practice of law do not answer that question and are
not directed at unjust enrichment. Instead, those rules are
directed at consumer protection and prohibit a nonlawyer, or
an out-of-state lawyer who has not complied with the appli-
cable rules, from representing or advising another person as
a lawyer in Oregon. See Johnson v. Premo, 355 Or 866, 872,
333 P3d 288 (2014) (“The prohibition against nonlawyer
legal practice serves the dual purpose of protecting the pub-
lic interest and the rights of individual litigants.”). Those
rules do not apply to individuals representing themselves,
because, as noted above, parties to a lawsuit may generally
prosecute or defend themselves under ORS 9.320, regard-
less of whether they are lawyers.

Reynolds and Riemer failed to comply with the rules
of pro hac vice admission not because they could not satisfy
those standards, but because, as self-represented parties,
they were not required to comply with those rules. Their fail-
ure to comply with those rules means only that they did not
represent or advise others as lawyers; it does not answer the
question of whether they are lawyers and whether the work
that they performed was legal work, such that they may
be entitled to attorney fees under the substantial-benefit
and common-fund doctrines.

Further, our statement in Colby noting that the
attorney in that case was authorized to practice law in
Oregon, 349 Or at 8, should not be read as creating a stan-
dard for determining whether someone is a lawyer who per-
formed legal work. Instead, we stated only that someone
who is authorized to practice law in Oregon is an attorney,

Pp 481

not that an attorney is only someone who is authorized to
practice law in Oregon.

Rather, like the attorney in Colby, Reynolds and
Riemer are lawyers. They went to law school and are active
members of bars in other states. And the work that they
performed in this case was legal work—namely, researching
the law, developing legal arguments, and presenting those
arguments in briefs to this court. Therefore, Reynolds and
Riemer were lawyers who performed legal work in this case.

The special master also denied Reynolds and Riemer
attorney fees based on broad policy grounds, which would
preclude fee awards even to self-represented attorneys who
were authorized to represent or advise others as a lawyer,
either as active members of the Oregon bar or as attorneys
admitted pro hac vice. The policy grounds that the special
master relied on are set out in Zucker v. Westinghouse Elec.,
874 F3d 221 (3d Cir 2004), where the court refused to award
fees under the common-fund doctrine to a self-represented
attorney who successfully raised objections to a proposed
class-action settlement. The court reasoned that “awarding
[a selfrepresented attorney] attorney’s fees potentially could
‘tempt’ other lawyer-shareholders to ‘advance garden vari-
ety objections because of the prospect of an award of attor-
ney fees for their personal service.” Id. at 226. According to
the court,

“We note that [the self-represented attorney] did not incur
any financial liabilities for his work on this case. Failure
to award [the self-represented attorney] fees should not
discourage other shareholders from raising meritorious
objections in the future; it will only ensure that they pur-
sue objections with the assistance of third-party counsel.”

Id.®

There are two difficulties with applying those grounds
in this case. First, as to the concern that allowing fees would

® Those broad policy grounds have been applied in other federal cases to
deny fees to self-represented attorneys. See, e,g., In re Currency Conversion Fee
Antitrust Litig., 263 FRD 110, 182 (SDNY 2009), aff'd sub nom Priceline.com,
Inc. v. Silberman, 405 Fed Appx 582 (2d Cir 2010); In re Texaco Inc. S*holder
Derivative Litig., 123 F Supp 2d 169, 173 (SDNY 2000), affd, 28 Fed Appx 83 (2d
Cir 2002).

482 P|

tempt self-represented attorneys to bring specious claims,
this court rejected a similar concern raised in Colby:

“Although not necessary to our decision here, we note that
the legislature has addressed that concern by permitting
attorney fees only to parties who ‘prevail[] in the suit’ and
by requiring that the attorney fee award be ‘reasonable.’
ORS 192.490(8). Further, the legislature has provided a
list of factors that a court must consider in determining the
amount of any attorney fee award, several of which protect
against the abusive fee generation potential that the Court
of Appeals feared. See ORS 20.075(1), (2) (listing factors to
be considered in determining amount of any attorney fee
award).”

349 Or at 8-9. Like the statutory fees at issue in Colby,
common-fund and substantial-benefit fees are allowed only
to prevailing parties and must be reasonable. Further,
common-fund and substantial-benefit fees include additional
protections, because the fees cannot exceed the value of the
benefit conferred by the litigation. See Restatement § 29(3)(b)
(permitting an attorney-fee award from a common fund only
if “the measurable value added to the beneficiary’s interest
in the common fund by the claimant’s intervention exceeds
the beneficiary’s liability to the claimant”).

Second, as noted above, the purpose of a fee award
under the common-fund and substantial-benefit doctrines is
to avoid unjust enrichment. Whether the nonparty beneficia-
ries are enriched by the litigation, and whether that enrich-
ment is unjust, does not turn on whether that litigation was
brought by an attorney in a representative capacity or a
nonrepresentative capacity. The California Supreme Court
has allowed fees to self-represented attorneys in common-
fund cases on that rationale:

“It would be inconsistent with the common fund theory to
deny [the self-represented attorney] compensation for his
services in these circumstances. The rationale of that the-
ory is that fees should be awarded to the person who cre-
ates such a fund because all who will benefit from it should
bear equally the burdens of its creation or preservation,
and this result is best achieved by taxing the fund itself.”

Consumers Lobby Against Monopolies v. Pub. Utilities Com.,
25 Cal 3d 891, 914-15, 603 P2d 41 (1979), overruled on other

pe 483

grounds by Kowis v. Howard, 3 Cal 4th 888, 838 P2d 250
(1992).

In this case, the litigation benefited nonparty PERS
members by invalidating COLA reductions, and both
Reynolds and Riemer participated in the litigation by per-
forming legal work as lawyers. That remains true even
though Reynolds and Riemer performed that work in a
self-represented capacity. As a result, Reynolds and Riemer
are entitled to an attorney-fee award necessary to avoid
unjust enrichment.

C. Reasonableness of the Fees Requested

Determining the amount needed to avoid unjust
enrichment requires assessing the reasonableness of the
fees that claimants have requested. Under the common-fund
and substantial-benefit doctrines, an attorney-fee award is
limited to a reasonable fee. Claimants have the burden of
establishing the reasonableness of the fees that they are
requesting. Strawn, 353 Or at 225. There are three issues in
this case related to the reasonableness of the fees requested:
the hourly rates; the extent to which the legal work bene-
fitted the nonparty PERS members, including whether the
fees requested are duplicative of work by other claimants or
related to unsuccessful claims; and the fee multiplier, if any.

The special master found that the hourly rates
sought by Bennett Hartman were appropriate and that
all of Bennett Hartman’s work benefitted nonparty PERS
members. But the special master determined that Bennett
Hartman was entitled to a fee multiplier of 1.5, rather than
the 2.0 fee multiplier that Bennett Hartman sought. The
special master also recommended reasonable attorney fees
for Reynolds and Riemer—if this court determines, as we
have, that their status as pro se litigants does not prevent
them from receiving a fee award. In those alternative rec-
ommendations, the special master calculated the fee award
using the hourly rates sought by Reynolds and Riemer, but
he excluded work that went to the losing tax-offset claim and
work that was duplicative of that performed by Bennett and
Hartman. He concluded that only 20 percent of the work that
Reynolds and Riemer performed benefitted the nonparty

484 P|

PERS members. Further, the special master recommended
that Reynolds and Riemer receive no fee multiplier.

1. Hourly rates

Bennett Hartman seeks different hourly rates for
different attorneys, with the maximum rate of $500 per
hour for its lead counsel, Greg Hartman. Reynolds and
Riemer also seek fees based on an hourly rate of $500 per
hour. The special master concluded that Bennett Hartman’s
rates were reasonable. He did not address the reasonable-
ness of those rates for Reynolds and Riemer, but his alterna-
tive recommendations were based on the $500-per-hour rate
sought by Reynolds and Riemer.

The $500-per-hour rate exceeds Hartman’s normal
labor/employment rate of $315 per hour for work that is not
contracted to unions, which receive a lower rate because
they are long-standing clients. But the market for PERS-
related work is not the same as the market for normal labor/
employment work. Reynolds and Riemer offer no evidence
of their normal market rate. Reynolds appears to be retired
without an active legal practice. And Riemer is the staff
director of the Arizona Judicial Ethics Advisory Committee
without an active private practice.

A court should not rubberstamp hourly rates, par-
ticularly when an attorney seeks rates beyond what he or
she ordinarily would receive from paying clients and when
the rates sought are at the very top of the market, such as
those in this case. For context, in the 2012 Oregon State Bar
Economic Survey, which is the last one available, the hourly
billing rate for the 95th percentile of private practice attor-
neys in Portland was $450, and the 95th percentile for the
entire state was $405.

Nevertheless, the rates charged by Hartman and
Reynolds are justified, because they have substantial expe-
rience in appellate matters and both played a substantial
role in earlier PERS litigation.* Hartman has represented
petitioners in each of the major PERS cases discussed in the
Moro I opinion. And Reynolds, while working as Assistant

6 The rates attributed to other attorneys at Bennett Hartman were all within
normal ranges for their experience levels.

Pe 485

Attorney General, briefed and argued one of those cases,
Oregon State Police Officers’ Assn. v. State of Oregon, 323 Or
356, 918 P2d 765 (1996), and participated in other PERS-
related litigation. As a result, they are uniquely knowledge-
able about the mechanics of PERS benefits and the relevant
legal arguments. And PERS cases are generally high stakes
and are both factually and legally complicated. So a rate at
the top of the market is not unreasonable for those skills.

- We therefore conclude that the hourly rates requested by
Bennett Hartman and Reynolds are reasonable.

Tt is difficult, however, to justify Riemer’s work at
that same rate. Although he has appellate experience brief-
ing and arguing attorney disciplinary cases before this
court in his previous role as General Counsel of the Oregon.
State Bar, he has no particular expertise in PERS litiga-
tion. Based on his appellate experience but his lack of PERS
experience, we conclude that a reasonable hourly rate for
Riemer’s work is at the 75th percentile from the 2012 report,
which was $350 for Portland.

2. Extent of the benefit provided by the work

“The cases are unanimous that simply doing work
on behalf of the class does not create a right to compensa-
tion; the focus is on whether that work provided a benefit to
the class.” In re Cendant Corp. Sec. Litig., 404 F3d 173, 191
(8d Cir 2005) (emphasis in original). For example, this court
has previously refused to award substantial-benefit fees to
parties that “gave no attention in their briefing and argu-
ment to the statute and rule on which the court’s ultimate
disposition turned.” Leo v. Keisling, 329 Or 273, 280, 986
P2d 562 (1999) (refusing equitable fees where the parties
made constitutional arguments but the court relied on stat-
utory grounds to reach its result).

The principle that compensable legal work must
benefit the nonparty beneficiaries has been applied by other
courts to deny or reduce fees to account for work on unsuc-
cessful claims. See, e.g., In re Enron Corp. Sec., Derivative &
ERISA Litig., 586 F Supp 2d 732, 822 (SD Tex 2008) (consid-
ering work on unsuccessful claims). It has also been applied
to account for duplication of effort. See, e.g., Reynolds v.
Beneficial Nat. Bank, 288 F3d 277, 288-89 (7th Cir 2002)

486 |

(denying fees to settlement objectors who “added nothing”
because lead counsel made same objections). The parties
dispute the extent to which the requested fees should be
reduced to account for work on unsuccessful claims or for
duplicative work. We address those issues separately.

In this case, petitioners presented numerous argu-
ments related to two broad categories of PERS benefits: the
COLA and the income-tax offsets for out-of-state retirees.
Petitioners prevailed on the COLA claim but not on the
tax-offset claim. To determine any reasonable amount of
fees, we must consider whether a fee award should include
fees for work advancing the unsuccessful claim for tax off-
sets. The special master did not reduce Bennett Hartman's
fees to account for unsuccessful claims, but, in his alterna-
tive fee award for Reynolds and Riemer, the special mas-
ter reduced the award to account for work on unsuccessful
claims. Reynolds and Riemer object to that reduction. And
state respondents object to the special master’s failure to
similarly reduce Bennett Hartman’s fees to account for work
on the tax-offset claim.

In Strunk v. PERB, 343 Or 226, 169 P3d 1242 (2007)
(Strunk IID), this court did not reduce attorney-fee awards to
account for work on unsuccessful claims, but it is unclear
to what extent that issue was considered by the court or
previously presented to the special master in that case.
Nevertheless, while considering other proposed reductions,
the court announced the applicable standard for determin-
ing whether work contributed to the benefits in that case:

“[Alfter examining respondents’ other billing-related objec-
tions and carefully scrutinizing petitioners’ billing records,
we conclude that the requisite nexus between the benefits
provided in this case and the fees sought as a result is miss-
ing for some items that petitioners’ seek compensation for.”

Id. at 240. As a result, the court applied a standard requir-
ing a “nexus between the benefits provided *** and the fees
sought.” Id.

That standard is similar to a frequently used stan-
dard in other courts: “whether the successful and unsuccess-
ful claims are based upon the same facts and legal theories,
i.e., whether the claims are related.” In re Enron Corp. Sec.,

ip 487

Derivative & ERISA Litig., 586 F Supp 2d at 822 (quotations
omitted). Under that standard, “[w]hen the successful and
unsuccessful claims involve a ‘common core of facts’ or ‘are
based on related legal theories, then attorney fees incurred
in the presentation of unsuccessful claims are recoverable
on the theory that they contributed to the plaintiff's ulti-
mate success.” Id.

In this case, claimants argue that there was a
sufficient nexus between the successful COLA claim and
the unsuccessful tax-offset claim because the two claims
overlapped—that is, both were premised on constitutional
rights against the impairment of contracts, and the fac-
tual record largely addressed the respondent’s public policy
defenses related to economic necessity.

That overlap fails to establish a sufficient nexus,
however. To the extent that there is overlapping work, that
work would be treated as if it went solely to the fee-generating
COLA claim, because fees for that work would have been
incurred regardless of the non-fee-generating claim. See
Estate of Smith v. Ware, 307 Or 478, 481-82, 769 P2d 773
(1989) (holding, in a statutory fee case, that overlapping
work is treated as going to the fee-generating claim). So the
question is the extent to which nonoverlapping work on the
tax-offset claim contributed to the benefits.

On that question, claimants—including Bennett
Hartman—fail to present grounds for concluding that non-
overlapping work on the tax-offset claim benefitted the non-
party PERS members. The lack of such grounds is acute in
this case, because the COLA claim and the tax-offset claim,
if successful, would have benefitted two different classes
of potential nonparty beneficiaries. The COLA claim ben-
efits all PERS members who earned PERS benefits before
the 2013 legislative modifications. And the tax-offset claim
would have benefitted only those PERS members who
earned PERS benefits before October 1991—and only those
who now or in the future will reside outside of Oregon. It
is inconsistent with the restitutionary rationale justifying
the common-fund and substantial-benefit awards to require
PERS members who did not earn benefits before October
1991 to pay for legal work on the tax-offset claim, because

488 PF

that work was never going to benefit them in the first place.
As a result, all fees awarded to Reynolds, Riemer, and
Bennett Hartman must be reduced to exclude work on the
tax-offset claim.

Respondents further argue that claimants’ fees
should be reduced to account for duplication of effort. When.
two attorneys duplicate their efforts, they are generally
not both benefiting the nonparty beneficiaries of the liti-
gation, because the same benefit would result even if one
of the attorneys had not performed the duplicative work.
The special master recommended finding that, in this case,
Reynolds, Riemer, and Bennett Hartman duplicated their
efforts because each presented substantially similar legal
arguments with regards to the prevailing claim—namely,
that the COLA adjustments violated the right against
impairment of contract. The special master recommended
accounting for that duplication by reducing the fees awarded
to Reynolds and Riemer, but not the fees awarded to Bennett
Hartman.

Reynolds and Riemer object to the reductions rec-
ommended by the special master. They argue that there
are no grounds in this case to determine that their work
duplicated Bennett Hartman instead of determining that
Bennett Hartman duplicated their work. In Strunk III, for
example, the court stated that “the fact that petitioners’ law-
yers briefed some of the same issues in the course of bring-
ing their cases to this court *** without more, is insufficient
to support” reducing the awards for duplication of effort.
343 Or at 239. The court went on to say that the record in
that case did not allow the court to determine which attor-
neys duplicated the efforts of which other attorneys. Id.
(“[Tlhat argument assumes that the efforts of the Strunk
petitioners’ and their lawyers was the sine qua non of the
fund preserved here, while the work product of the other
parties named as petitioners in this case derived solely from
that effort.”).

This case, however, is distinguishable from Strunk
IIT. In that case, the special master made no findings rel-
evant to the issue of duplication. Moro II, 358 Or at 381
(“In Strunk III, the record created by the parties before the

Po 489

special master did not allow this court to determine the
extent to which those attorneys had duplicated their efforts
or directed their efforts toward unsuccessful claims.”).
In this case, however, by recommending that we reduce
Reynolds’ and Riemer’s fees to account for duplication of
Bennett Hartman, the special master found, in effect, that
Bennett Hartman acted as the lead counsel. That conclu-
sion is in accord with the apparent role of the attorneys in
the case, with Bennett Hartman taking the lead role in lit-
igating each stage of the case, from the factfinding proceed-
ings before the special master to oral arguments before this
court.

Because Bennett Hartman clearly acted as lead
counsel, Reynolds and Riemer had the burden to demon-
strate that the contributions of their work went beyond that
performed by Bennett Hartman. See, e.g., In re Cendant
Corp. Sec. Litig., 404 F3d at 191 (“In the ordinary case,
most work that lead counsel does will typically advance
the class’s interests, but the inquiry into non-lead counsel’s
work must be more detailed. Non-lead counsel will have to
demonstrate that their work conferred a benefit on the class
beyond that conferred by lead counsel.” (Emphasis in origi-
nal.)). Reynolds and Riemer have not satisfied that burden
beyond the fact that their duplicative work likely added some
marginal persuasive force to the argument. As a result, we
conclude that Reynolds’ and Riemer’s fee awards should be
reduced to account for their duplication of effort.

Having established that claimants should not receive
fees for work on the unsuccessful tax-offset claim and that
Reynolds and Riemer should not receive fees for work that
duplicated Bennett Hartman’s work on the COLA claim, we
must determine how much that work amounts to. The diffi-
culty with making that determination is that claimants pro-
vided this court with billing records that largely omit any
reference to which claim they were working on. That omis-
sion weighs against claimants, because it is their burden to
establish the reasonableness of the fees they are requesting.
Strawn, 353 Or at 225. Claimants chose not to update their
billing records even after this court instructed the special
master to make findings of fact on those issues and even
after the special master allowed claimants the opportunity

490 Pp

to do so. See Moro IT, 358 Or at 381 (“[Wle instruct the spe-
cial master to make findings of fact, if possible, on the extent
to which the attorneys duplicated their efforts or directed
their efforts toward unsuccessful claims.”).

Without updated billing records, the special mas-
ter determined that Reynolds and Riemer should receive
20 percent of their requested fees and made no findings
with regard to Bennett Hartman’s work on the tax-offset
claim. As noted, Reynolds and Riemer object to the special
master’s reduction, and state respondents again argue that
those individuals should receive no fees and that Bennett
Hartman’s award should be reduced to account for duplica-
tion, as well as for work on the tax-offset claim.

We agree with some of respondents’ arguments
regarding the special master’s determinations. Moreover,
because claimants have the burden of establishing their
entitlement to fees and the reasonableness of their request,
the lack of more specific billing records weighs against them.
Although we have some, often nonspecific, time-keeping
records, as well as the transcript of the special master’s
hearing on the merits and the briefing before the special
master and in this court, adjustments to the fee requests to
account for duplication and work on the unsuccessful claims
are admittedly rough. Nevertheless, we agree with the spe-
cial master that adjustments are appropriate for time spent
on the unsuccessful tax-offset claim and for duplication of
work. We also agree with the special master’s implicit find-
ing that Bennett Hartman acted as lead counsel throughout
the proceeding.

Our review of the record and the proceedings in
the litigation suggests substantial duplication by Reynolds
and Riemer of the arguments of lead counsel concerning
the COLA and substantial time spent on the tax-offset
issue. The latter, of course, is not surprising, as Reynolds
and Riemer, PERS retirees now living outside the state, are
directly affected by that change in PERS benefits. As to the
duplication of effort on the COLA, Reynolds’ and Riemer’s
submissions do not identify any specific value that their
work added to petitioners’ case or any novel legal or factual
argument that Bennett Hartman did not make and that

Po + 491

this court relied on in its decision. Respondents assert that
Reynolds and Riemer should receive no fee award because all
their work essentially duplicated Bennett Hartman’s work.
In our view, as noted, their work likely added some marginal
persuasive force to petitioners’ arguments. In these circum-
stances, we conclude that probably 90 percent of the time
incurred by Reynolds and Riemer essentially duplicated
Bennett Hartman's work on the COLA issue or was spent
on the tax-offset issue. Therefore, Reynolds and Riemer are
entitled to 10 percent of their requested time. That entitles
Reynolds to compensation for 56.2 hours, which, at $500 per
hour, results in a lodestar amount of $28,100. Riemer is enti-
tled to compensation for 26.5 hours, which, at $350 per hour,
results in a lodestar of $9,275.

As noted, the special master made no adjustment
to the Bennett Hartman request for work on the tax-offset
claim. Based on our review of the record, and again con-
sidering the burden on the claimants to prove their claim
for fees, we find that 20 percent of the time submitted by
Bennett Hartman went to work on the tax-offset claim that
did not overlap with the COLA claim. Therefore, Bennett
Hartman is entitled to 80 percent of its requested time. That
entitles Bennett Hartman to compensation for 1,355 hours,
which results in a lodestar of $560,399.46.

3. Fee multiplier

The final component in determining a reasonable
fee award is the multiplier. The special master recom-
mended awarding Bennett Hartman a 1.5 fee multiplier for
the exceptional success of the litigation and, in his alter-
native recommendations, recommended no fee multiplier for
Reynolds and Riemer. Bennett Hartman does not object to
the recommended fee multiplier of 1.5. Reynolds and Riemer
argue that they are entitled to the same fee multiplier as
Bennett Hartman because they shared in the same excep-
tional success of the litigation.

The grounds for a fee multiplier have been stated
differently in different cases. In Strawn, this court noted
that a fee multiplier may be justified to account for the risk
of nonpayment in a contingency fee case. 353 Or at 226. In

492 pe

Strunk III, the court justified a fee multiplier based on the
“exceptional success” of the litigation, securing over $1 bil-
lion in benefits for PERS members. 343 Or at 246. The court
then stated that “factors such as the difficulty and complex-
ity of the issues involved in this case, the value of the inter-
ests at stake, as well as the skill and professional standing
of lawyers involved also support an enhancement of fees.” Id.

In this case, we place greater weight on the risk
of nonpayment, because the additional factors discussed in
Strunk III were already considered when determining rea-
sonable hourly rates for claimants’ work. As noted, none of
the claimants rely on a market rate that reflects a negoti-
ated rate with a client. So the hourly rates are a construc-
tion based on the same type of factors noted in Strunk III to
calculate a fee multiplier. That is particularly true because,
as noted above, the stakes of the litigation are a factor in
determining the attorneys’ hourly rates. Although the mon-
etary impact of this case will, over time, be larger than
the monetary impact of the Strunk litigation, that impact
reflects the higher dollar value of the COLA change that the
court invalidated, rather than a more exceptional success
by the attorneys as compared to the attorneys in the Strunk
litigation.’ The justification for a higher hourly rate is that
we would have expected another attorney who could also
command that rate to reach a similar result in this case.

Nevertheless, a fee multiplier may be justified
when the attorney’s payment is based on a contingency-fee
arrangement or there is otherwise a delay in getting paid.
Bennett Hartman was on a quasi-contingency-fee arrange-
ment, because, although it was paid its normal union rates,
it retained the right to seek to recover and keep market
rates in a fee request, if it prevailed. We therefore find that
Bennett Hartman is entitled to the fee multiplier of 1.5 rec-
ommended by the special master.

Reynolds and Riemer, however, were not working
based on a contingency-fee or even quasi-contingency-fee
arrangement. Instead, as self-represented parties, they did

7 In Strunk IT, the court awarded the fee multipliers sought by the claim-
ants. 348 Or at 246. For some, that was a 2.0 fee multiplier; and for others (includ-
ing Bennett Hartman), that was a 1.5 fee multiplier. Id. at 233.

Po 493

not have a fee arrangement at all. Therefore, the grounds
that entitle Bennett Hartman to a 1.5 fee multiplier do not
apply to Reynolds and Riemer. And the other factors justify-
ing a fee multiplier in Strunk were already used to calculate
their reasonable hourly rates. Therefore, consistent with the
special master’s recommendation, we find that Reynolds
and Riemer are not entitled to a fee multiplier.

Based on those findings, and our findings above
establishing the reasonable rates and reasonable time for
claimants, we conclude that Bennett Hartman is entitled
to $840,599.19 in attorney fees, Reynolds is entitled to
$28,100 in attorney fees, and Riemer is entitled to $9,275 in
attorney fees. When combined with the cost awards noted
above, we conclude that each claimant is entitled to the fol-
lowing awards: Bennett Hartman, $902,665.32; Reynolds,
$29,314.48; Riemer, $10,434.15; Jones, $1,379.24.

D. Funding the Fee Award

Having calculated the amounts to which claimants
are entitled, we turn to the issue of the appropriate source
of payment. The restitutionary principles underlying an
award of fees from a common fund suggest that the award
be paid from the PERF in a manner that affects only the
PERS members who benefit from the litigation—and not
PERS members who do not benefit from the litigation or
PERS employers. And, ideally, PERS members would con-
tribute to the fee award in proportion to the benefits that
they receive. See Restatement § 29(2) (beneficiaries may be
required to pay from the “common fund for their benefit, in
proportion to their respective interests therein”).

But there are administrative obstacles to reaching
those ideals—namely, there is no segregated fund consist-
ing of the increased COLAs that PERS members who will
benefit from the litigation will receive over time. (Indeed,
because of the different terms of service and retirement
status of those members, there could not be such a fund.)
Instead, the PERF is made up of numerous accounts that
are designated for different purposes. According to a decla-
ration submitted by PERS Assistant Chief Administrative
Officer Mary Dunn, there are three accounts (or categories
of accounts) containing money belonging to PERS members.

494 Po

Retired members have money in the “benefits-in-force”
reserve. Nonretired Tier One and Tier Two members have
money in their “member accounts.” And all PERS members
who earned benefits after the 2001 creation of the Oregon
Public Service Retirement Plan (OPSRP), which includes
Tier One, Tier Two, and OPSRP members, have money in
the Individual Account Program.

Money in those accounts is invested, and the invest-
ment income is credited back into the accounts. According to
Dunn, PERB can take money out of the investment income
before it is credited back into the specific accounts and use
that money to pay for the award of fees and costs. And,
because the credits are made proportional to each member’s
interest, withdrawing money from the investment income is
automatically ratable (in the same way that requiring a cor-
poration to pay a fee award in a common-fund or substantial-
benefit case is automatically ratable to each shareholder’s
interest in ownership).

The problem with that approach is that the fee
award must be paid now, while the actual value of the COLA
benefits to specific PERS members will depend on which tier
the member is in, as well as on future events. Tier One and
Tier Two members, but not OPSRP members, are entitled to
their COLA “bank” established prior to the amendments at
issue, which increases the value of the benefits. Moro I, 357
Or at 186-87 (describing COLA bank). Further, the earlier
a member retires and begins to receive benefits, the more
years he or she will receive COLA adjustments. As a result,
the COLA benefits will comprise a larger portion of those
members’ expected PERS benefits.

As an alternative, Bennett Hartman suggests
that at least some of the money for the fee award could be
drawn from the PERS contingency reserve. The contingency
reserve is funded through money that PERB sets aside from
investment income in certain years. ORS 238.670(1)(a).
One of the statutory purposes for the contingency reserve is
“[tlo pay any legal expenses or judgments that do not arise
in the ordinary course of adjudicating an individual mem-
ber’s benefits or an individual employer's liabilities.” ORS
238.670(1)(b). This fee award fits that statutory description.

Po 495

Respondents object, however, noting that the contingency
reserve is funded through investment income from the
entire PERF, which includes funds containing employer con-
tributions that have not yet been allocated to other accounts.
If the fee award is paid from the contingency reserve, they
point out, then PERB may have to make larger future pay-
ments into the contingency reserve, which will be taken in
part from employer contributions. The effect of that would
be to marginally increase the amount that employers will
need to contribute in the future.

The special master did not make any finding as to
which PERF accounts would be appropriate to use and how
much money should be used from each account. Instead,
he recommended ordering PERB to pay the award and to
resolve later disputes that arise, if any, about the manner in
which it had paid for the award.

We agree that the better course is to allow PERB
to determine, consistent with its statutory authority and
fiduciary obligations, how best to allocate the burdens of the
fee award among the accounts, including the contingency
reserve, held within the PERF. Our cases recognize that trust
law principles and applicable statutes give PERB discretion
to make reasonable decisions in operating PERS. See White
v. Public Employees Retirement Board, 351 Or 426, 440-41,
268 P3d 600 (2011) (discussing PERB’s duties and author-
ity). That authority to operate the system includes making
decisions related to litigation, and, as long as PERB acts
reasonably and consistently with statutory requirements
and its fiduciary duty to members, such decisions ordinarily
will be upheld, unless PERB has abused its discretion. Id. at
442-45 (discussing PERB’s authority to conduct and settle
litigation). We direct PERB to pay the amounts ordered from
such PERF accounts as it deems appropriate, in the exercise
of its discretion and subject to its statutory and fiduciary
obligations and the principles discussed in this opinion.

To summarize: We conclude that Bennett Hartman
is entitled to $902,665.32 in costs and attorney fees;
Reynolds is entitled to $29,314.48 in costs and attorney
fees; Riemer is entitled to $10,434.15 in costs and attorney
fees; and Jones is entitled to $1,379.24 in costs. PERB shall

——Xeermrereere RT

496 P|

determine, consistently with this opinion, how to pay the
award from the accounts held in PERF and shall pay the
amounts awarded.

Attorney fees and costs awarded.

497

Argued and submitted on the record on June 15, accused is disbarred, effective
60 days from date of this decision October 27, 2016

In re Complaint as to the Conduct of

FREDRIC SANAI,
OSB #981372,
Accused.

(OSB 13100; SC S063514)
383 P3d 821

Fredric Sanai, Lake Oswego, argued the cause and filed
the briefs for the accused.

498 i

Kellie F. Johnson, Assistant Disciplinary Counsel, Tigard,
argued the cause and Susan Roedl Cournoyer, Assistant
Disciplinary Counsel, filed the brief on behalf of the Oregon
State Bar.

PER CURIAM

The accused is disbarred, effective 60 days from the date
of this decision.

Po 499
PER CURIAM

This is a reciprocal discipline review proceeding
conducted under Oregon State Bar Rules of Procedure (BR)
Title 10 and BR 3.5. Fredric Sanai (the accused) was dis-
barred by the Washington Supreme Court in June 2013 for
misconduct in a variety of matters arising from the dissolu-
tion of his parents’ marriage in Washington State.t Shortly
thereafter, the Oregon State Bar (Bar) notified this court
regarding the accused’s disbarment in Washington State
and filed a recommendation for reciprocal disbarment in
Oregon as well. Following the accused’s response to that rec-
ommendation, the court exercised its discretion under BR
3.5(e) to refer this matter to the Bar’s Disciplinary Board for
the purpose of taking testimony and receiving evidence con-
cerning: (1) whether the Washington disciplinary processes
that were provided to the accused had been lacking in notice
or opportunity to be heard and (2) whether the accused
should now be disciplined by this court. A trial panel con-
vened by the Disciplinary Board subsequently issued a writ-
ten decision, concluding that the accused should be recipro-
cally disbarred in Oregon as the result of his misconduct in
Washington. The accused now appeals that decision, which
we review de novo. ORS 9.536(2); BR 10.6. For the reasons
set out below, we agree with the trial panel’s decision that
the accused should now be disbarred in Oregon.

1 The accused was disbarred for violating the following Washington Rules of
Professional Conduct (WRPC):

° WRPC 3.1 (filing frivolous claims);

© WRPC 3.2 (delaying litigation);

* WRPC 8.4(c) (knowingly disobeying an obligation under rules of a tribu-
nal);

© WRPC 4.4(a) (embarrassing, delaying or burdening third person);

+ WRPC 8.4(a) (violating/attempting to violate Rules of Professional
Conduct);

* WRPC 8.4(d) (engaging in conduct prejudicial to the administration of
justice);

© WRPC 8.4(j) (willfully disobeying court ordex);

+ WRPC 8.4() (violating duty or sanction imposed under rules for enforce-
ment of lawyer conduct in connection with disciplinary matter); and

* WRPC 8.4(n) engaging in conduct demonstrating unfitness to practice
law).

500 Ld

I. REGULATORY CONTEXT

We begin with a brief description of the rules gov-
erning reciprocal discipline matters. The Bar’s Disciplinary
Counsel is required to notify this court and the State
Professional Responsibility Board (SPRB) upon receiving
notice from another jurisdiction that an Oregon attorney
has been disciplined in that jurisdiction for misconduct. BR
8.5(a). The SPRB is then required to recommend to this
court an appropriate sanction to be applied in Oregon based
on the discipline imposed by the other jurisdiction. Id. The
accused attorney is given an opportunity to respond to the
SPRB’s recommendation, and the Bar is permitted to reply.
BR 3.5(c), (d).

This court then must determine “whether the
attorney should be disciplined in Oregon for misconduct in
another jurisdiction and if so, in what manner.” BR 3.5(e).
Our choice of sanction is aimed at vindicating the “judicial
authority of this jurisdiction, not of the one in which the ear-
lier discipline occurred|[,]” In re Devers, 317 Or 261, 265, 855
P2d 617 (1993). As a result, in reciprocal discipline cases, we
have an independent obligation to determine an appropri-
ate sanction based upon this state’s disciplinary rules. In re
Lopez, 350 Or 192, 198, 252 P3d 312 (2011).

A decision on whether to impose discipline turns on.
the answers to two questions. The first is, “[w]as the pro-
cedure in the jurisdiction which disciplined the attorney
lacking in notice or opportunity to be heard?” BR 3.5(c)(1).
The second is, “[s]hould the attorney be disciplined by the
court?” BR 3.5(c)(2). The court may—as it did in this case—
refer the matter to the Disciplinary Board for the purpose of
taking testimony on those two questions. BR 3.5(e).

The reciprocal disciplinary rule, in effect, codifies a
basic principle of issue preclusion: an attorney who has had
a full and fair opportunity to litigate the charges leading to
discipline meted out in another jurisdiction may not relitigate
the fact issues already decided. Thus, the accused lawyer
may not use a reciprocal disciplinary hearing in Oregon to
challenge the accuracy of particular underlying factual find-
ings of the other jurisdiction. See Devers, 317 Or at 264-65

Pp 501

(determining whether the accused lawyer received consti-
tutionally sufficient notice and opportunity to be heard in
the other jurisdiction); BR 3.5(b) (the order imposing dis-
cipline in the other jurisdiction is “sufficient evidence that
the attorney committed the misconduct described therein”).
Instead, to the extent that the attorney seeks to avoid the
factual findings of the other jurisdiction, the attorney bears
the burden of proving at the hearing “that due process of
law was not afforded the attorney in the other jurisdiction.”
BR 3.5(f).

Il. FACTS

The facts are taken from the record generated
below, the parties’ briefs, and the Washington Supreme
Court’s decision in In re Disciplinary Proceeding Against
Fredric Sanai, 177 Wash 2d 748, 302 P3d 864 (2013). The
accused was admitted to the Oregon Bar in 1998 and to the
Washington State Bar in 2002. He had, it appears, specif-
ically sought admission to the Washington State Bar for
the purpose of aiding his mother in matters related to her
divorce in Washington from the accused’s father.

In April 2002, the accused’s parents had finalized
their divorce, with the resulting divorce decree requiring,
among other things, that the family home and a vacant lot
be sold, with the proceeds to be distributed equally between
the accused’s mother and his father, a Seattle-based cardi-
ologist and internal medicine specialist. The accused and
his older brother—Cyrus Sanai, a California attorney—
maintained, however, that their father had concealed sig-
nificant assets from both their mother and the court. Con-
sequently, the two siblings began representing their mother
in proceedings designed to contest the court-ordered prop-
erty sale and distribution of proceeds.

What followed were years of acrimonious litigation
in which the accused and his brother filed a virtual tsu-
nami of motions, subpoenas, petitions, appeals, and new
actions in Washington’s state and federal courts. Many, if
not most, of those undertakings were filed solely to delay the
court-ordered sale of the family property noted above or to
harass the opposing parties and their lawyers. Because of
the large number of those filings, the many different forums

502 i

in which they were initiated, and the fact that they often
overlapped chronologically, we set out those activities and
their respective outcomes by loosely grouping them—as did
the Washington Supreme Court—according to the various
contexts in which they arose.

A. The Vacant Lot Dispute

In April 2002, shortly after the Sanais’ divorce
decree was finalized, the accused’s mother filed a pro se
appeal and notice of supersedeas without bond, effectively
staying the then-pending sale of the vacant lot property. In
June 2002, Washington Superior Court Judge Thibodeau
ruled that that conduct had been intended solely to delay
and frustrate the court’s rulings. He subsequently imposed
a $10,000 sanction in attorney fees against mother, dis-
qualified the accused’s brother from representing her, and
ordered the posting of cash or commercial bonds to stay any
future sale of the house, vacant lot, or personal property.

Later that month, the accused made his first
appearance as his mother’s legal counsel at a hearing in
Snohomish County Superior Court. At that hearing, Judge
Thibodeau ordered that the stay concerning the sale of the
vacant lot be lifted by July 2002, absent the posting of a
$50,000 bond. Instead of posting the required bond, how-
ever, the accused filed a lis pendens notice on the vacant lot,
effectively clouding title to that property.

In response, Judge Thibodeau issued three orders
in September 2002. First, he disqualified the accused from
representing his mother. Second, he (1) ordered the accused’s
lis pendens notice stricken unless stayed by the Washington
Court of Appeals; (2) barred the parties from filing any fur-
ther lis pendens notices; and (3) barred any further action to
delay the sale of the vacant lot. Finally, the judge imposed
a $1,000 sanction against the accused’s mother, because the
accused had brought, on her behalf, a frivolous motion for a
protective order and sanctions.

The accused then filed an appeal of those orders on
mother’s behalf, although mother appeared to continue as
a pro se litigant. Subsequently, defying the previous order
prohibiting him from further representing his mother, the

Po . 503

accused then filed at least seven accompanying motions to
either block the sale of the vacant lot or to challenge his
disqualification from representation. All were denied by the
Washington Court of Appeals, prompting the accused to file
either a “reapplication,” a motion to reconsider, or a motion
to modify in each case, all of which were similarly unavail-
ing. Due in large part to those appeals, Judge Thibodeau
imposed an additional $2,500 sanction against mother in
December 2002, citing the “‘continuing appeals of every rul-
ing of this court [that are] greatly prolonging the matter and
costing substantial attorney fees.”” Sanai, 177 Wash 2d at
747 (internal citation omitted). Moreover, the judge opined,
“‘It}he continuing appeals border on the frivolous, and must
stop for the benefit of both parties.” Id.

In November 2002, as those matters were develop-
ing, a Washington Court of Appeals commissioner denied a
motion filed by the accused to overturn the September 2002
order striking the previous lis pendens notices filed against
the marital property. In February 2003, the Washington
Court of Appeals denied the accused’s motion to modify that
ruling and, shortly thereafter, Judge Thibodeau released
the accused’s July 2002 lis pendens notice.

The accused’s brother, however, filed a new lis pen-
dens notice that same day, based on a federal action in the
Western District of Washington—discussed in greater detail
below—that he and the accused had initiated as plaintiffs in
December 2002. When that action was transferred to United
States District Court Judge Zilly—who was already presid-
ing over another federal matter brought by the accused and
others involving the Sanais’ divorce—Judge Zilly promptly
ordered the release of the February lis pendens notice.
Approximately three days later, the accused’s brother filed
yet another, albeit amended, lis pendens notice, which Judge
Zilly released as well in April 2003. Judge Zilly also ordered
the parties “to cease and desist from any further action to
delay or obstruct the sale of either [the house or the vacant
lot] or filing any further lis pendens.” Id. at 748.

In May 2003, the accused filed a new claim on his
mother’s behalf, this time in King County Superior Court.
In that action, mother sought partition of the same family

504 Le

property that had previously been adjudicated as part of the
Sanais’ divorce. Based on the new case that he had just initi-
ated, the accused filed yet another lis pendens notice against
the property, which he subsequently amended with a new
notice in July 2003.

That amended lis pendens notice did not escape the
attention of the other state and federal entities addressing
the Sanais’ litigation. In August 2003, Judge Thibodeau held.
the accused’s mother in contempt, imposing $5,000 in sanc-
tions for continuing to obstruct the sale of the vacant lot.”
Approximately one month later, federal district court Judge
Zilly similarly concluded that the new lis pendens notice vio-
lated his previous order to abstain from such filings, and
he imposed contempt sanctions of $3,400 in attorney fees
against both the accused and his mother, as well as a $2,500
sanction to be paid directly to the court. Judge Zilly again
ordered that no further lis pendens notices be filed.>

B. The Family Home Dispute

Selling the family home appears to have proved just
as contentious as selling the vacant lot. In August 2002, the
accused filed a lis pendens notice on the house; his brother
filed another in March 2003. Shortly thereafter, Judge
Thibodeau ordered mother to vacate the home by May 10,
20083, or face sanctions.

As discussed above, in May 2003, the accused then
filed the property partition action in King County Superior
Court seeking, among other things, to quiet title to the house
and lot in mother’s favor alone. In September 2003, however,
the King County Superior Court ordered a venue change to
Snohomish County, noting that the Snohomish County court
was still engaged in effectuating the parties’ divorce decree.

In November 2003, Judge Thibodeau ordered mother
to release all lis pendens notices filed against the family
home and to use her best efforts to obtain releases of all

2 The Washington Court of Appeals would later affirm that sanction in 2005
and award attorney fees to the accused's father as well, citing frivolousness and
intransigence as contributing factors.

3 ‘The Ninth Circuit Court of Appeals affirmed that contempt order in an
unpublished 2005 opinion, Sanai v. Sanai, 141 Fed Appx 677 (9th Cir 2005).

Po 505

the other lis pendens notices filed by her children. Mother
subsequently complied with that order “under protest,’ but
in May 2005, when the state court authorized acceptance of
a pending offer on the family home, the accused’s brother
filed yet another lis pendens notice against the residence.
Upon learning that fact, Judge Thibodeau recused himself,
explaining that he was no longer capable of impartiality in
the matters being litigated by the Sanais. Before doing so,
however, he pointedly noted that

“ander no circumstances would I give [mother] any relief
in this courtroom. She doesn’t deserve it. [The accused and
his brother] don’t deserve any relief. You can take it all the
way to the Ninth Circuit if you want to read that, after I’ve
made this record, that they’ve acted in bad faith. They’ve
frustrated the entire process of this Court, and under any
circumstances, any relief that [mother] would get from any
court in my opinion is a windfall. You can quote that to the
next judge that’s going to hear it.”

See Sanai v. Sanai, 2005 WL 1593488, 1 n 2 (WD Wash)
(unpublished) (quoting transcript from state trial court pro-
ceeding).

C. Post-Dissolution Motions and Marriage Dissolution Appeal

While stalling the sale of the house and lot with
the filing of lis pendens notices, the accused pursued his
mother’s appeal of the dissolution decree and filed a series of
motions in both the trial court and the Washington Court of
Appeals. In the home and vacant lot disputes set out above,
the accused had initially filed multiple “emergency motions”
related to the dissolution decree. Those motions included
various requests for relief, including stays, but all were
found to be either frivolous or otherwise without merit.

The accused also filed multiple motions with the
trial court seeking sanctions and protective orders, based on
an allegation that his father had revealed confidential health
information about mother. In August 2002, the accused
renewed those allegations in a similar motion tendered
to the Washington Court of Appeals. The appellate court
denied that motion on the grounds that the matter had to be
pursued in the trial court. The accused quickly filed another
motion and scheduled a hearing in the trial court. As with

506 L

his previous motions, the accused sought a protective order
and sanctions based on an allegedly improper disclosure of
confidential patient information. This time, however, he tar-
geted his father’s former attorney. At the appointed time in
September 2002, that attorney appeared, but the accused
did not. As a result, the trial court ordered $500 in sanc-
tions against the accused and his mother.

In October 2002, the accused filed additional motions
with the Washington Court of Appeals, including a renewed
request for a protective order against his father. The result-
ing court order not only denied the accused’s motion but also
expressly warned that “counsel is on notice that frivolous
motion practice in this court could lead to sanctions.” The
accused moved to modify that ruling, albeit without success.

Despite that warning—and the previous sanctions
that had already been imposed against the accused and
his mother—in January 2003, the accused moved in the
Washington Court of Appeals for discretionary review of,
among other things, the orders (1) disqualifying him from
representing his mother and (2) holding his mother in con-
tempt. In referring those motions to an appellate panel for
its consideration, one appellate commissioner noted that “the
ongoing appellate litigation is spawning inordinate manage-
ment problems for the trial court, not to mention expenses
for the respondent.” In March 2003, the Washington Court
of Appeals dismissed the accused’s motions and, in the pro-
cess, made its sanctions warning more concrete: “We caution
that any future frivolous motions will result in sanctions.”

In April 2003, the accused filed the opening brief in
mother’s appeal from the trial court’s marriage dissolution
decree. The Washington Court of Appeals denied leave to
argue the matter and, in an unpublished December 2003
decision, held the appeal to be frivolous and filed for pur-
poses of delay. The court imposed a $10,000 sanction against
his mother.

Mother sought review of that decision in the
Washington Supreme Court, and, in March 2004, the
accused’s brother began inundating the court with a flurry
of review-related motions. The court went on to deny review
of that matter, as well as all of the accompanying motions,

pe 507

in November 2004. At the same time, the court imposed a
$4,000 sanction against the accused’s mother, again for friv-
olous filings and causing delay.

D. Washington Supreme Court Filings and Related Motions

In April 2003—at about the same time as he was
filing the opening brief in mother’s dissolution appeal—the
accused also filed a motion with the Washington Supreme
Court for discretionary review of the rulings concerning
the alleged improper disclosure of his mother’s confidential
health information. One week later, he followed that motion
with another seeking to stay the original trial court order
requiring mother to vacate the family home. Shortly there-
after, he filed a similar motion with the Washington Court
of Appeals, requesting review of the same trial court order.
A Washington Court of Appeals commissioner ruled, how-
ever, that the court would not act, absent a showing that
the second motion was somehow different from the motion
pending before the Washington Supreme Court.

Despite the fact that his motion to stay the order
to vacate was still pending with the Washington Supreme
Court, the accused filed yet another motion with that body,
this time seeking to revise the trial court’s order. The
accused’s motions, however, were uniformly denied, as was
his subsequent request for clarification. In the weeks that
followed, the accused continued filing multiple motions with
the Washington Supreme Court, among them yet another
request for a protective order based on the alleged disclosure
of mother’s health information—the same claim that had
been rejected multiple times by various Washington courts
and for which the accused had previously been sanctioned.

In June 2003, a Washington Supreme Court com-
missioner ruled that the accused’s filings would not be con-
sidered by the court, denied the accused’s original motion
for discretionary review, and dismissed the proceedings.
Nevertheless, the accused spent the next several months
continuing to file a barrage of motions with the Washington
Supreme Court. Finally, in September 2003, the court’s
chief justice denied all the accused’s pending requests—
including a motion to modify the ruling denying review—
and imposed sanctions of $1,000 jointly and severally on the

508 Le

accused and his mother. All told, the dissolution case had
taken eight years to be resolved in the Washington courts.
The Snohomish County dissolution proceedings alone had
generated more than 800 docket entries.* At about the same
time as the dissolution case ended, the Washington Supreme
Court forwarded the matter of the accused’s conduct to the
Washington State Bar Association (WSBA).

E. Actions Against Judicial Officers

Following the Washington Supreme Court’s adverse
rulings in the matters described above, the accused and his
mother filed suit in federal court against the various judicial
officers who had ruled against them at both the appellate
and trial court levels. In December 2003, the federal dis-
trict court dismissed the pair’s action for lack of subject mat-
ter jurisdiction, characterizing it as an “attempt to obtain
review of unfavorable decisions of the Washington state
courts by wrapping their state law-based challenges in the
fabric of federal constitutional claims.” The Ninth Circuit
Court of Appeals affirmed that judgment in an unpublished
2005 opinion.

The accused also filed an action against the chief
justice of the Washington Supreme Court, alleging that the
accused's civil rights had been violated in connection with
the disciplinary proceedings in Washington. In 2008, the
Ninth Circuit remanded that suit for dismissal.

F. State and Federal Wiretap Actions, Miscellaneous Claims,
and Subpoenas

Approximately one year before the Snohomish
County court’s 2002 finalization of the Sanais’ divorce, the
accused, along with his mother, brother, and two other sib-
lings, began what would become a protracted series of state
and federal actions filed against the accused’s father, father’s
Internal Medicine and Cardiology (IMC) practice, and IMC
employee McCullough. Those actions alleged, among other
things, that father had unlawfully intercepted and recorded
various family communications from the IMC Seattle
offices. The first such action—filed in Los Angeles County

4 The Washington Supreme Court denied review of the final appellate matter
arising from those divorce proceedings in 2010.

Po 509

Superior Court—was dismissed for lack of jurisdiction. In
the second—filed in August 2002 in King County Superior
Court—the trial court would eventually conclude that there
was no evidence to support the wiretapping claims that the
accused had leveled against his father.

In October 2002—despite having recently initiated
their King County wiretap action—the accused and his
co-plaintiffs sued the defendants in federal court as well,
proffering claims of, among other things, illegal wiretap-
ping. In addition to seeking more than $9,000,000 in dam-
ages, the accused and his co-plaintiffs also moved for an
injunction and attempted to attach the family’s vacant lot
in an effort to enjoin disposition of that property pending
resolution of their federal claims. After district court Judge
Zilly denied injunctive relief, however, the accused and his
brother filed a second federal wiretapping complaint in
December 2002. As already noted above, based on that sec-
ond action, the accused’s brother filed another lis pendens
notice, violating state court Judge Thibodeau’s earlier order
to the contrary.

In March 2003, the accused’s second wiretapping
action was reassigned to Judge Zilly given its similarity to
the first action brought by the accused and his co-plaintiff
family members. When the lis pendens notice arising from
that second action came to Judge Zilly’s attention, it resulted
in the previously noted federal contempt sanction—$2,500
to the court and $3,400 in attorney fees—levied against the
accused and his mother.

By June 2003, the accused and his co-plaintiffs
had filed a third amended complaint in their federal action.
Shortly thereafter, the accused issued a subpoena to the
Whatcom Educational Credit Union, signing it as the attor-
ney for plaintiff Ingrid Buron Sanai, the accused’s sister.
That subpoena sought account statements from 1990 onward
for IMC employee McCullough, one of the defendants named
in the accused’s federal lawsuit. In issuing the subpoena,
however, the accused violated the Federal Rules of Civil
Procedure by failing to provide prior notice of the subpoena
to McCullough’s attorney. See FRCP 45(a)(4) (requiring sub-
poenas for the production of documents to be preceded by

510 i

notice to the parties before they are issued and served). As
aresult, Judge Zilly quashed the accused’s subpoena in July
2003.

The accused had nevertheless procured a host of
other discovery materials by using similar subpoenas in
other state and federal courts, a fact that had placed the
subpoenas beyond Judge Zilly’s jurisdiction to quash. In
response, the defendants filed motions for protective orders,
which Judge Zilly referred to a federal magistrate.

In October 2003, the magistrate found that a large
number of the subpoenas signed and used by the accused
had been calculated to harass the opposing parties, rather
than to lead to the discovery of relevant evidence. The mag-
istrate then ordered the accused to (1) refrain from issuing
any further subpoenas of the kind described in the mag-
istrate’s order without prior court approval; (2) return all
previously acquired documents to the defendants; and
(8) retain no copies of those materials.

The accused proceeded to violate that protective
order in several ways. First, he failed to return—and con-
tinued to use—documents that he had acquired through
improperly issued subpoenas. He explained his actions in
that regard by arguing that, “[o]nce Plaintiffs received the
discovery, Plaintiffs were free to use it. Magistrate Judge
Theiler’s order to return the discovery was too late. The cat
is out of the bag.” Second, despite the order barring him from
issuing similar subpoenas without prior court approval, in
October 2004, the accused signed another subpoena as the
attorney for his sister. In issuing that subpoena to an insur-
ance company for, among other things, documents contain-
ing the names of his father or McCullough, the accused once
again violated FRCP 45(a)(4) by failing to provide notice to
McCullough’s attorney before serving the subpoena.

In January 2005, Judge Zilly granted the defen-
dants’ motion for sanctions related to the insurance com-
pany subpoena and awarded defendants $1,740 in attor-
ney fees. In doing so, Judge Zilly expressly categorized the
accused’s failure to provide opposing counsel with advance
notice of the subpoena as “misconduct.” In addition, Judge

po BLL

Zilly disqualified the accused from further participating as
counsel in the matter.

As noted above, the accused’s third amended federal
complaint had been filed in June 2003. Like its predecessors,
that complaint contained a variety of claims in addition to
the wiretapping allegations discussed above, including:

« Libel claims based on bar complaints that the accused’s
father and his lawyer had filed with the WSBA regard-
ing the accused’s conduct as a lawyer. The accused had
included a similar claim as part of the wiretapping
action filed earlier in King County Superior Court, but
the WSBA had subsequently informed the accused that
Washington State’s Rules for Enforcement of Lawyer
Conduct (ELC) barred such claims. See ELC 2.12 (pro-
viding that communications to the WSBA are “abso-
lutely privileged and no lawsuit predicated thereon may
be instituted against any grievant, witness, or other
person providing information.”) Despite notice of that
fact, the accused nevertheless raised the same libel
claim again as part of his federal action.

e Claims based on alleged disclosures of mother’s con-
fidential health information. As discussed above, the
accused’s pursuit of those claims at the state level had
already resulted in sanctions from both the trial court
and the Washington Court of Appeals. The accused
nevertheless asserted the same allegations as part of
his federal complaint.

e¢ Claims brought under the Employee Retirement Income
Security Act (ERISA). The accused originally alleged
that IMC had committed ERISA violations against his
mother as a beneficiary of IMC’s retirement plan and
against himself as a “derivative beneficiary.” Although
Judge Zilly ruled that the accused had no standing to
make such a claim for himself, the accused neverthe-
less continued to assert ERISA-related allegations in
his own name.

In November 2003, Judge Zilly granted summary
judgment to the defendants on the libel claims noted above
citing, in part, the privilege contained in the ELC against
lawsuits based on communications to the bar. Nine months

512 iL

later—in July 2004—Judge Zilly denied the accused and his
co-plaintiffs leave to file a fourth amended complaint.

The accused, his brother, and mother responded
by filing yet another federal action in the District Court for
the Western District of Washington. Their new action was
quickly reassigned to Judge Zilly, who dismissed their first
two claims as substantially identical to the libel claims that
had been previously disposed of on summary judgment in
2008.

For refiling the libel claims, Judge Zilly subse-
quently imposed sanctions under FRCP 11 of $5,000 each
against the accused, his brother, and his mother. See FRCP
11(b) and (c) (providing that (1) by presenting pleadings in
federal court, attorneys certify that pleadings are not made
for improper purpose and (2) sanctions are authorized when
rule is violated). In doing so, Judge Zilly stated that the
new federal complaint “re-alleges frivolous causes of action
that were previously dismissed by the Court. Plaintiffs were
aware that this Court had previously rejected their legal
and factual arguments, and had the benefit of this Court’s
prior Orders when drafting [their] new Complaint.”

In January 2005, Judge Zilly ordered the accused
and his co-plaintiffs to show cause why their continued
misconduct should not warrant dismissal of their fed-
eral complaints with prejudice. In July 2005, Judge Zilly
rejected their arguments and dismissed with prejudice all
their remaining federal claims. Noting that the plaintiffs
had already been collectively sanctioned around $130,000
in both federal and state courts, Judge Zilly observed that
they had nonetheless opted to “persist in their misconduct.
Plaintiffs’ conduct shows that they will not respond to sanc-
tions. Clearly, no other sanction the Court might impose,
except for dismissal itself, would be effective in remedying
this misconduct.”

In addition to dismissal of those federal claims,
in November 2005, Judge Zilly imposed monetary sanc-
tions on the accused, his brother, and his mother totaling
$273,437.00. In March 2007, the trio garnered a further
sanction: $14,041.50 in attorney fees for the ERISA claims
contained in their third amended complaint. Judge Zilly

Po 518

found that the ERISA claim had been brought in bad faith
without any reasonable basis in law or fact.

As in the state-based dissolution case, the volume of
filings in the federal court cases was enormous. According
to the Bar, the first of the federal cases that the accused
and his co-plaintiffs filed compromised by itself 790 docket
entries. Judge Zilly described the litigation techniques
employed by the accused, his brother, and his mother in
their federal court actions as follows:

“Plaintiffs’ conduct in this litigation has been an indescrib-
able abuse of the legal process, unlike anything this Judge
has experienced in more than 17 years on the bench and 26
years in private practice: outrageous, disrespectful, and in
bad faith. Plaintiffs have employed the most abusive and
obstructive litigation tactics this Court has ever encoun-
tered, all of which are directed at events and persons sur-
rounding the divorce of [the] Sanai[s], including parties,
lawyers, and even judges. Plaintiffs have filed scores of
frivolous pleadings, forcing baseless and expensive litiga-
tion. ***

“Plaintiffs have flatly refused to obey Orders of this
Court, to cooperate with discovery, and to comply with
their obligations under the Federal Rules. They have
refused to appear for depositions and respond to discovery.
When deposing opposing parties, their conduct has been
abusive and disrespectful. They have intercepted and wire-
tapped the phone calls of other represented parties in this
litigation. They have actively and improperly interfered
with discovery, and required this Court to intervene all too
frequently.”

See Sanai v. Sanai, 2005 WL 1593488, 1 (WD Wash)
(unpublished).

In July 2010, the Ninth Circuit issued an unpub-
lished decision affirming dismissal of the plaintiffs’ federal
claims. Sanai v. Sanai, 408 Fed Appx 1 (9th Cir 2010).

G. Washington Disciplinary Proceedings

The Washington State Bar initiated disciplinary
proceedings against the accused in 2004, two years after
having admitted him to practice in Washington. Following

514 Ld

a series of delays, a hearing was finally scheduled for April
2007. Several days before the hearing, however, the accused
sought a continuance on the ground that he was suffering
from dangerously high blood pressure. Although that condi-
tion appeared to have been confirmed in a signed statement.
from the accused’s physician, the hearing officer neverthe-
less denied the continuance and conducted a full hearing
in the accused’s absence. The hearing officer would later
recommend disbarment for the accused, a recommendation
that was unanimously adopted by the Washington State
Bar’s disciplinary board.

But in 2009, a five-member majority of the
Washington Supreme Court reversed that outcome, hold-
ing that the hearing officer had abused his discretion in
failing to grant the accused’s requested continuance. In re
Disciplinary Proceeding Against Sanai, 167 Wash 2d 740, 225
P3d 203 (2009) (Sanai I). Four members of that court, how-
ever, joined in a dissenting opinion authored by then-Justice
Chambers. In the dissent’s view, the hearing officer

“was fully justified in denying another frivolous motion
brought only for the purpose of delay. This was [the
accused’s] third request for a continuance on a hearing
that had already been delayed two years. [The accused’s]
attempt to delay was not limited to his own discipline case;
the record (which the hearing examiner was well aware of
when he denied the motion for a continuance) establishes
a long standing pattern of delay through myriad tactics,
including the filing of frivolous motions for reconsideration
and appeal, failing to properly serve documents, refusing
to appear for depositions, refusing to produce documents
pursuant to orders, and numerous other excuses for his or
his client’s failure to comply with rules and orders of the
courts. These excuses have included automobile collisions,
office moves, press of existing motions, a sick mother, and
the birth of a child.”

Id. at 755-756 (Chambers, J. dissenting). The accused’s
excuses, the dissent continued, might normally warrant
judicial sympathy, save for the fact that the accused had
already established “an unprecedented record of engaging
in abusive and vexatious practices by filing baseless lawsuits
and endless motions and appeals (often in direct violation of

Po 515

court orders) in courts up and down the West Coast.” Id. at
756.

At the new disciplinary hearing, the accused
appeared and testified, and a second disbarment recommen-
dation followed. On appeal, the Washington Supreme Court
upheld that recommendation in a written opinion disbarring
the accused. In re Disciplinary Proceeding Against Sanai,
177 Wash 2d 743, 302 P3d 864 (2013) (Sanai II). That opin-
ion set out in detail the various undertakings that, in the
court’s view, had warranted revoking the accused’s license
to practice law and offered the following concise summation
of the accused’s misconduct:

“Sanai filed multiple frivolous motions and claims for pur-
poses of harassment and delay, repeatedly and willfully
disobeyed court orders and rules, brought frivolous suits
against judges who ruled against him, and filed similar
claims multiple times in multiple jurisdictions for purposes
of delay. *** The hearing officer found many of these viola-
tions occurred multiple times, were intentional, and caused
actual harm.”

Id. at 746. The accused sought reconsideration, raising
essentially the same due process concerns that he now pres-
ents to this court. The Washington Supreme Court denied
reconsideration in August 2013.

H. Oregon Disciplinary Proceedings

In September 2013, the Oregon State Bar filed
notice with this court regarding the accused’s disbarment in
Washington, and with it, a recommendation for reciprocal
discipline—disbarment—in Oregon. The accused’s response
followed. In the interim, the accused unsuccessfully peti-
tioned the United States Supreme Court for a writ of certio-
rari in Sanai II. Sanai v. Washington State Bar Association
Disciplinary Board. US ___ 184 Ct 1324, 188 L Ed 307
(2014).

After considering the disciplinary recommendation
and the accused’s response, in May 2014, this court referred
the matter to the Disciplinary Board for the purpose of tak-
ing testimony on two issues: (1) whether the disciplinary
procedures afforded the accused in Washington had been

—

516 Ld

lacking in notice or opportunity to be heard, BR 3.5(c)(1),
and (2) whether this court should now reciprocally discipline
the accused, BR 3.5(c)(2). The hearing before an Oregon dis-
ciplinary trial panel took place in February 2015, and, in
July 2015, the trial panel issued its opinion and order, The
trial panel determined that the accused (1) had received ade-
quate notice and opportunity to be heard in the Washington
disciplinary proceedings and (2) should receive the same
sanction in Oregon: disbarment.

Ill. ARGUMENTS ON REVIEW

On review, the accused presents seven assignments
of error, arguing that he should not be reciprocally disci-
plined, by disbarment, in Oregon. Some of his challenges
address the propriety of the Washington disciplinary pro-
ceedings, including the appeal in Sanai IT, and some address
the Disciplinary Board hearing in Oregon.

The accused notes that, under BR 3.5(1), an attor-
ney responding to a notice of discipline for misconduct in
another jurisdiction and a recommendation for reciprocal
discipline in Oregon must address whether “the procedure”
in the other jurisdiction was “lacking in notice or opportu-
nity to be heard.” Judging by the nature of his challenges
to the disciplinary proceedings in both Washington and
Oregon, and his reliance on Goldberg v. Kelly, 397 US 254,
90 S Ct 1011, 252 L Ed 2d 287 (1970), the accused appar-
ently assumes that BR 3.5(1) broadly permits him to make
a variety of process-based arguments concerning all the
disciplinary proceedings related to this matter. As to the
Washington disciplinary proceedings, the accused contends
that (1) he was denied a right to confront certain witnesses at
his hearing; (2) his appeal did not comport with due process
because the Washington Supreme Court denied his motion
to file a brief longer than permitted by the appellate rules;
and (8) the Washington Supreme Court was not impartial,
arguments that are all part of his overarching position that
he was not afforded “an opportunity to be meaningfully
heard.” Further, the accused asserts that the hearing before
the Disciplinary Board in Oregon was fatally defective in
numerous aspects, from evidentiary rulings to the composi-
tion of the Disciplinary Board’s panel.

pe 517

The accused concludes that this court should
(1) dismiss this matter altogether and impose no disciplinary
sanction in his case; (2) sanction him with something less
than disbarment; or (3) order a new hearing before a differ-
ent trial panel. Not surprisingly, the Bar takes a decidedly
different view. It writes:

“Tn finding that the Accused should be disbarred here,
the Oregon panel noted that the Accused’s ‘misconduct
continued for years unabated, despite numerous admoni-
tions and instructions by a number of judges, and extended
even into the reciprocal discipline proceeding, in which
the Accused still tried to ‘game the system’ The Accused’s
discipline by the Washington court resulted from fair pro-
ceedings that afforded notice and ample opportunity to be
heard. Disbarment is clearly warranted by the Accused’s
record of large scale vexatious conduct, relentless abuse,
obstruction, and bad faith.”

A. The Oregon Reciprocal Disciplinary Hearing

‘We begin with the accused’s challenges to the suffi-
ciency of the hearing that he received in Oregon. We begin
here because, if, as the accused contends, the proceedings
against him in Oregon were fundamentally flawed, then our
consideration of his arguments regarding the proceedings
against him in Washington would be premature. However,
as we explain below, we reject the accused’s argument that
he is entitled to a rehearing in Oregon.

1. Improper appointment of trial panel

The accused contends that he is entitled to a new
hearing because the trial panel was improperly constituted.
According to the accused, that issue concerns who selected
the trial panel and the Bar region from which the members
of the trial panel were selected.

As part of the preparations for the accused’s dis-
ciplinary proceeding, in July 2014, the disciplinary chair-
person for Region 4 appointed a trial panel drawn from
among Region 4 lawyers to hear arguments in that mat-
ter. In reciprocal discipline cases, however, the Bar Rules of
Procedure appear to anticipate trial panels appointed by the
state chairperson, not a regional chairperson. See BR 3.5(g)

518 Ld

(noting that, in reciprocal discipline matters, “[a] trial panel
appointed by the state chairperson shall make a decision
concerning the issues submitted to it”) (emphasis added).

In April 2015, several months after the accused’s
hearing was completed, but before the trial panel issued its
decision, the State Disciplinary Board Chair sent a letter
to the parties ratifying the appointment of the trial panel
members. The letter explained:

“Tt has come to my attention that a Trial Panel was
appointed for the above captioned matter by the Regional
Chair, as is standard with Trial Panels. The Bar Rules of
Procedure are not clear as to whether the Regional Chair
has the right to make such an appointment in a reciprocal
discipline case. To the extent there is any concern about a
possible procedural error in the appointment of the Trial
Panel, I find there was no prejudice to either party by the
potential procedural error. Both sides still had the opportu-
nity to exercise any challenges to the Trial Panel in accor-
dance with the Bar Rules.”

Shortly thereafter, the accused responded with his own let-
ter objecting to what he described as a “late, post-hearing
ratification of the Trial Panel improperly appointed by the
Regional Chair.”

On review, the accused contends that, under BR
3.5(g), only the state chair was authorized to appoint the
trial panel that would hear his reciprocal discipline case.
The failure to do so, the accused argues, constituted “struc-
tural error,” a problem, he maintains, that was compounded
by the fact that the trial panel that heard his case was drawn
entirely from Region 4 (Washington and Yamhill counties).
According to the accused, the panel should have been drawn
from Region 7 (Clackamas County), the region where he had
lived and worked during this matter.

That procedural misstep, the accused asserts, auto-
matically requires a new trial, even without any demon-
stration of prejudice to him. He draws that proposition from
an observation taken from this court’s decision in In re
Hendrick, 346 Or 98, 107, 208 P3d 488 (2009): ,

“(IIf the trial panel was not properly constituted, there is
no way to know whether a properly constituted trial panel

Po 519

would have created the same record, made the same rul-
ings, or construed the evidence in the same way, much less
reached the same conclusions that this one did.”

Alternatively, the accused continues, he was prejudiced
by the improperly constituted trial panel because, in his
view, the actions of its members “demonstrated its bias and
unwillingness to give the Accused a full and fair hearing.”

We begin here by noting that, when the trial panel
that heard his case was formed, the accused did not peremp-
torily challenge, nor challenge for cause, any member's
appointment. Neither did the accused object to or otherwise
express concerns regarding the make-up of the panel before,
during, or at the close of trial. He did not raise concerns
in his written closing arguments or in the course of rais-
ing objections to the transcript. Indeed, there is no evidence
that the accused perceived or believed that the appointed
panel members could not or would not conduct a fair hearing
of his case. And, on the first day of the hearing, two panel
members disclosed on the record that they were personally
acquainted or “fairly good” friends with six of the accused’s
character witnesses. :

That scenario stands in stark contrast to the facts
underlying In re Hendrick, the case on which the accused
relies. In Hendrick, the disciplinary board chair had denied
an accused lawyer’s peremptory challenge to a panel mem-
ber when, after the case’s first trial panel had been dis-
missed due to the equivalent of a mistrial, the disciplinary
board chair appointed a new three-person panel. Because
the lawyer had already exercised a peremptory challenge
when the first panel was appointed, the chairperson refused
to allow him a second such challenge with regard to the
new panel. On appeal, this court held that the disciplinary
chair had erred in doing so because that action had effec-
tively rendered the lawyer powerless to remove any member
from the new panel in the absence of cause. Because the
lawyer’s case was not heard by a properly constituted trial
panel, the court reasoned, a new trial before a new panel
was warranted.

In this case, to the extent that the trial panel was
not properly constituted, any impropriety stemmed solely

520 Ld

from a procedural error, rather than an error—like the error
in Hendrick—that effectively prevented the accused from
removing a panel member that he otherwise had a right to
remove. Consequently, we conclude that the appointment of
the trial panel here could not have constituted “structural
error,” because it did not deny the accused any procedural
right or otherwise restrict his ability to actively partici-
pate in composing a trial panel whose impartiality he could
trust.>

2. The accused’s right to counsel

The accused contends that the Oregon trial panel
violated his right to counsel when it did not permit his
brother to represent him. According to the accused, the
attorney he had retained to represent him in this matter
unexpectedly withdrew several weeks before the accused’s
February 2, 2015, trial panel hearing. Several days before
the hearing was to begin, the accused filed a motion and
completed application for the pro hac vice admission of his
brother, Cyrus Sanai, to represent him in Oregon.

In opposing that motion, the Bar noted, among other
things, that (1) the accused knew that the Bar intended to
call Cyrus Sanai as a witness if he appeared in Oregon, a
fact that would necessitate his withdrawal as counsel and
raise the likelihood of a lengthy set-over request if Cyrus
was allowed to represent the accused, and (2) the California
State Bar had filed its own set of nine disciplinary charges
against Cyrus Sanai in January 2014. Those charges
remained pending up to and through the accused’s 2015
Oregon trial panel proceedings.® Of those charges, five

5 We note, furthermore, that Region 4 was, in fact, the region in which the
accused practiced law and served as Yamhill County legal counsel from 1999
through 2018. As a result, had the state chair appointed the trial panel in this
matter, it is likely that the panel would have still been selected from Region 4,
given the accused's long-standing professional ties to the area.

® On March 20, 2015—more than a month after the disciplinary proceedings
against the accused were completed—the California State Bar dismissed all but
one of the charges against Cyrus Sanai. That remaining charge, encouraging the
continuance of an action from a corrupt motive of passion or interest, was held in
abeyance pending resolution of the action out of which it arose. At the time of this
writing, that disciplinary charge remained pending before the California State
Bar.

Po 521

alleged a failure to report the imposition of judicial sanc-
tions to the California Bar; three alleged conduct involving
moral turpitude—interfering with the sale of property out
of a corrupt motive, bringing or maintaining frivolous judi-
cial complaints, and altering the service list on a filed plead-
ing; and one alleged that Cyrus Sanai had encouraged the
continuance of an action from a corrupt motive, passion, or
interest.

The trial panel denied the accused’s motion to have
Cyrus Sanai admitted pro hac vice to represent him. The
accused represented himself at his hearing.

The accused now argues that, under the Fifth and
Fourteenth Amendments, he possessed a constitutional right
to be represented by the attorney of his choice. According to
the accused, the United States Supreme Court’s decision in
United States v. Gonzalez-Lopez, 548 US 140, 126 S Ct 2557,
165 L Ed 2d 409 (2006), stands for the proposition that the
right to counsel includes the right to have counsel pro hac
vice. He also relies on McCuin v. Tex. Power & Light Co., 714
F2d 1255 (5th Cir 1983), for the proposition that the Fifth
Amendment guarantees civil litigants the right to retained
counsel, which ordinarily includes the right to be repre-
sented by the counsel of their choosing. Those rights, the
accused argues, are particularly salient in this situation,
where (1) he had limited time to secure alternative counsel;
(2) his brother possessed a unique knowledge of this case;
and (3) no good reason existed to deny Cyrus Sanai pro hac
vice admission in Oregon.

The accused’s right to have his brother represent
him in this matter was not absolute, as the cases on which
he relies note. In Gonzalez-Lopez—a criminal case—the
Supreme Court did, indeed, hold that the erroneous depriva-
tion of the defendant's right to retain counsel of his choosing
qualified as structural error requiring reversal of his crimi-
nal conviction. Yet the Court then pointedly observed that

“{njothing we have said today casts any doubt or places
any qualification upon our previous holdings that limit the
right to counsel of choice and recognize the authority of trial
courts to establish criteria for admitting lawyers to argue
before them.”

522 Ld

Gonzalez-Lopez, 548 US at 151 (emphasis added). The Court
recognized that trial courts have wide latitude in balancing
a defendant’s right to his or her choice of counsel with, among
other things, (1) the needs of fairness; (2) the demands of the
trial court’s calendar; and (8) the need to ensure that trials
are “conducted within the ethical standards of the profes-
sion[.]” Id. at 152.

The Fifth Circuit Court of Appeals adopted a simi-
lar stance in McCuin. That court noted, among other things,
that civil litigants have a right to be represented by counsel
and that that right ordinarily implies a right to retain the
lawyers of their choice. McCuin, 714 F2d at 1262. The Fifth
Circuit added, however, that the right to counsel does not
“entail absolute freedom of choice,” given, for example, the
basic requirement that chosen counsel must be a member of
the bar in the forum state. Furthermore, the court contin-
ued, compelling interests could override that right:

“The right to counsel of one’s choice may be overridden
when ‘compelling reasons exist. The right should be bal-
anced in cases in which it is challenged against the right
to ‘untainted prosecution of the lawsuit’ and society’s need
to maintain the highest ethical standards of professional
responsibility. It cannot be exercised without thought also to
the needs of effective administration of justice.”

Id. at 1263 (footnotes omitted; emphasis added).

As the explanations set out above make clear, the
tenets recognized in Gonzalez-Lopez and McCuin do not, as
the accused suggests, militate for an unrestricted right to
out-of-state counsel of one’s choice. Instead, those tenets—
specifically, the broad authority of tribunals to establish
criteria for admitting the lawyers who will argue before
them and the need to maintain high ethical standards and
effective administration of justice—establish that the right
to choose counsel may be overridden when chosen counsel
is not admitted to the bar of the forum state and has not
been admitted pro hac vice in accordance with the tribunal’s
criteria.

In Oregon, this court expressly adopted Uniform
Trial Court Rule (UTCR) 3.170 for the purpose of regulating

a 52

the appearance of pro hac vice counsel in this jurisdiction.
See ORS 9.241 (authorizing Oregon Supreme Court to adopt
such rules). Under that rule, courts or administrative bodies
faced with requests for pro hac vice admission

“shall grant the application by order if the application sat-
isfies the requirements of this rule, unless the court or
administrative body determines for good cause shown that
granting the application would not be in the best interest of
the court or administrative body or the parties.”

UTCR 3.170(8) (emphasis added).

Here, the trial panel was faced with (1) a last-minute
application for pro hac vice admission of the accused’s
brother in Oregon; (2) the serious nature of the California
disciplinary charges facing the accused’s brother at the
time of that application; and (3) the likelihood that, even
if allowed to represent the accused, the accused’s brother
could nevertheless be required to withdraw after being sub-
poenaed as a witness once within this jurisdiction. Given all
those factors, we conclude that there was “good cause shown”
from which the trial panel could reasonably conclude that,
because of the likelihood of undue disruption and delay, it
was not “in the best interests” of the tribunal to allow the
accused’s brother to represent him. According to Oregon’s
Bar Rules of Procedure, those chairing disciplinary trial
panels are broadly authorized to facilitate an efficient and
orderly hearing. See BR 2.4(h) (describing duties of a trial
panel chairperson). Under the circumstances noted above,
by denying the accused’s motion for the pro hac vice admis-
sion of Cyrus Sanai, the trial panel chair did nothing more
than fulfill that obligation.

3. Mass admission of exhibits offered by the Bar

The accused argues that some of the trial panel rul-
ings regarding the conduct of the hearing were incorrect.
One of those challenged rulings concerns the admission of
the Bar's exhibits.

At the accused’s disciplinary hearing, the Bar sub-
mitted multiple exhibits drawn from the evidentiary record.
that had been generated in the accused’s Washington State

524 Ld

Bar proceedings. Those exhibits—totaling some 4,000 pages—
were submitted to the trial panel on a single CD ROM. The
accused proffered a blanket objection to the exhibits, argu-
ing that he had a right to individually examine and con-
test the admissibility of those documents as necessary. As
grounds for his omnibus objection, the accused cited rele-
vance, reliability, lack of foundation, lack of authentication,
violation of his right to confront the witnesses against him,
lack of opportunity to raise individualized objections, and
prejudice to his ability to present a full and fair defense.
The trial panel nevertheless admitted those materials into
evidence, inviting both the accused and the Bar to tender
written objections in post-hearing memoranda to any indi-
vidual exhibits. The accused, however, opted instead to sim-
ply reiterate his blanket objections.

The accused now notes that BR 5.1(a) provides that
“[ilncompetent, irrelevant, immaterial, and unduly repeti-
tious evidence should be excluded at any hearing conducted
pursuant to these rules.” Building on that foundation, he
argues that, by (1) admitting the Bar’s exhibits without
any preliminary demonstration of relevance, materiality,
and the like, and (2) denying him the opportunity to indi-
vidually object to those exhibits at the time that they were
offered, the trial panel erred and, in the process, prejudiced
his ability to present a full and fair defense at his hearing.
According to the accused, the trial panel's offer of a post hoc
opportunity to challenge those materials was insufficient to
rectify the legal error that occurred at the actual hearing,
and it now requires that he receive a new trial.

Several considerations, however, lead us to con-
clude that that position is not well taken. First, the exhibits
were taken from the evidentiary record established in his
‘Washington disciplinary proceedings, and, at the very least,
many—if not all—of the Washington exhibits were relevant
to whether the accused was afforded due process in those
proceedings and whether the accused should be disciplined
in Oregon. The accused cites no authority for the notion that
the exhibits in question required some additional demon-
stration of relevance or materiality, and we are unaware of
any that would apply to the particular facts of this case.

po 525

Second, the accused was not ambushed by those
exhibits when they arrived in Oregon, and it is not beyond
the pale to suggest that the accused had more than a pass-
ing familiarity with each of them. The accused, moreover,
was in a position to object to individual exhibits as needed
after the hearing.

Third, as a matter of Oregon law, when parties raise
objections in the course of a proceeding, they are obliged
to accompany those objections with explanations specific
enough and clear enough to ensure that a decision maker
can immediately identify, consider, and correct the alleged
error if warranted. State v. Wyatt, 331 Or 335, 343, 15 P3d 22
(2000). Failure to adequately do so leaves such arguments
insufficiently preserved for consideration on appeal. State v.
Clemente-Perez, 357 Or 745, 752, 359 P3d 232 (2015).

Here, the accused asserted multiple grounds to
underpin his objection to the exhibits proffered by the Bar,
but he failed to establish even a cursory nexus between
those grounds and any actual exhibit or exhibits. That lack
of clarity made it virtually impossible for the trial panel to
identify specific errors committed in admitting those exhib-
its, much less correct them. Because the accused did not
attempt to segregate admissible exhibits from inadmissible
ones by making specific objections when given the opportu-
nity to do so, the accused’s argument below regarding the
Bar’s exhibits was too vague to render it sufficiently pre-
served for our consideration on review. See, e.g., Sproul v.
Fossi, 274 Or 749, 755, 548 P2d 970 (1976) (“when evidence
is offered as a whole and an objection is made to the evi-
dence as a whole and is overruled, the trial court will ordi-
narily not be reversed on appeal if any portion of the offered
evidence was properly admissible, despite the fact that other
portions would not have been admissible had proper objec-
tions been made to such portions of the offered evidence”).

4. The right to confront witnesses

Much as he had done in his Washington disci-
plinary proceedings, the accused attempted to subpoena
the authors of the opinions and orders that had been sub-
mitted as evidentiary exhibits in his Oregon disciplinary

526 Ld

proceedings. That effort was unsuccessful. The accused now
contends that he was improperly prevented from confront-
ing those witnesses and thereby deprived of a fair hearing
in Oregon. His arguments in that regard essentially mirror
the confrontation-related arguments that he presents con-
cerning his Washington disciplinary proceedings. As dis-
cussed in greater detail later within this opinion, we reject
those arguments as they apply to Oregon’s disciplinary pro-
ceedings for the same reason that we reject the accused’s
confrontation arguments regarding his Washington disci-
plinary proceedings.

Before turning to those Washington proceedings,
however, we briefly address a confrontation argument pre-
sented by the accused that relies on an early 20th century
Oregon bar admission case. In In re Crum, 103 Or 296, 301,
204 P 948 (1922), this court stated:

“In a proceeding of this kind, the applicant is enti-
tled to confront the witnesses, to subject them to cross-
examination, and to invoke the protection of the tried,
wise, and well-settled rules of evidence.

“It has been written that—

“Tt is essential to the administration of justice accord-
ing to law, that the recognized rules of evidence should be
observed in this class of cases as well as in all others.”

According to the accused, Crum stands for the proposition
that, in Oregon bar disciplinary proceedings, due process
requires the opportunity to cross-examine witnesses whose
written statements are used in the course of a disciplinary
proceeding.

We note that there was a time when this court’s
case law embraced the notion that all rules of evidence were
applicable in lawyer discipline proceedings. That, however,
was more than 90 years ago. Since then, this court has held
that, in lawyer discipline proceedings, the essential ele-
ments of due process are notice and an opportunity to be
heard and to defend “in an orderly proceeding adapted to
the nature of the case before a tribunal having jurisdiction of
the cause.” In re Devers, 328 Or 230, 232, 974 P2d 191 (1999)
(emphasis added).

Po 527

Over the years, changes to the procedures used in
disciplinary proceedings have effectively moved those pro-
ceedings away from the bright-line proscription against
hearsay evidence set out in the Oregon Evidence Code.
Consequently, with regard to evidentiary matters, BR 5.1(a)
now expressly embraces any probative evidence commonly
accepted by “reasonably prudent persons in the conduct of
their affairs.” As a result, this court has concluded that
hearsay evidence meeting that standard is admissible in
disciplinary proceedings. In re Gildea, 325 Or 281, 296 n 18,
936 P2d 975 (1997); In re Taylor, 319 Or 595, 602 n 6, 878
P2d 1103 (1994). Thus, even assuming that, as the accused
views it, the judicial orders and opinions would constitute
inadmissible hearsay under the Oregon Evidence Code, the
notion that, under Crum, the accused possessed a right to
exclude them or, alternatively, to subpoena the judicial offi-
cers who had authored them, is simply counter to the other-
wise clear rules relied on today by this court in disciplinary
proceedings. We reject the accused’s contrary argument.’

B. The Washington Disciplinary Hearing: The Right to
Confront Witnesses

In accordance with BR 3.5(c)(1), the accused chal-
lenges discipline based on his conduct in Washington by
arguing that he was not afforded due process of law in the
Washington disciplinary proceedings. In the accused’s view,
those proceedings did not provide him with a meaningful
opportunity to be heard. We begin with his argument that
due process was lacking because he was not permitted to
confront witnesses as required by the Confrontation Clause
of the Sixth Amendment to the United States Constitution.

At the onset of the accused’s second disciplinary
hearing in Washington, the hearing officer indicated to the
parties that, in resolving evidentiary and other procedural
questions, he would make his rulings “based upon the legal

7 The accused takes issue with several other rulings of the trial panel regard-
ing prehearing motions, witness lists, and the like; we reject those additional
grounds for a new hearing without written discussion. See BR 5.1(b) (“No error
in procedure, in admitting or excluding evidence, or in ruling on evidentiary or
discovery questions shall invalidate a finding or decision unless upon a review of
the record as a whole, a determination is made that a denial of a fair hearing to
either the Bar or the accused has occurred.” (Emphasis added.)).

528 Ld

principles that disciplinary proceedings are neither civil nor
criminal but are sui generis hearings intended to determine
whether a lawyer’s conduct should have an impact upon his
or her license to practice law.” The hearing officer then went
on to instruct the parties that

“[e]vidence, including hearsay, is admissible if in my
judgment this is the kind of evidence on which reasonably
prudent persons are accustomed to rely in the conduct of
their affairs. I may exclude evidence that is irrelevant,
immaterial, or unduly repetitious. Where not inconsistent
with these principles I shall use the Washington Rules of
Evidence and the Washington Administrative Procedures
Act.”

The Washington State Bar would eventually intro-
duce into evidence a plethora of judicial orders and opin-
ions related to the accused’s conduct, almost all of which
were admitted over the accused’s hearsay objections to the
use of each order as substantive evidence. At one point, the
accused appeared to broadly argue that he was also entitled
either (1) to have the authors of those documents present
themselves and explain the decisions contained therein or
(2) to have the orders in question excluded from evidence.
The accused, however, raised specific confrontation clause
objections to only four of those orders, three of which were
overruled and one of which was sustained.

The accused also attempted to subpoena several
of the judicial officials who had been involved in differ-
ent aspects of his parents’ divorce, among them, a special
master in the dissolution case, Washington Superior Court
Judge Thibodeau, and federal district court Judge Zilly.
Those efforts, too, proved unavailing.

On appeal, the Washington Supreme Court held
that the accused had failed to preserve the vast majority of
his confrontation clause objections and, where those objec-
tions had been preserved, the evidence at issue was either
not offered for the truth of the matter asserted or the mat-
ter in question was so clearly established by other evidence
that it rendered any supposed error harmless. Sanai II, 177
Wash 2d at 764-65. The Washington Supreme Court also
held that, according to the accused’s own concessions, the

pi 529

testimony sought from the subpoenaed judges was irrele-
vant. The court wrote:

“In his posthearing motion to reopen the disciplinary pro-
ceedings, [the accused] stated that he wanted to cross-
examine the judges so that they would ‘acknowledge that
the new facts create doubt about the correctness of their
rulings’ But the correctness of the judicial rulings in the
cases upon which these proceedings are based is irrelevant
to whether [the accused’s] actions violated RPC 3.1, RPC
8.2, RPC 3.4(c), RPC 4.4, RPC 8.4(a), RPC 8.4(d), RPC
8.4G), RPC 8.4(2), and RPC 8.4(n). The hearing officer’s
decision to quash the subpoenas was not error.”

Sanai I, 177 Wash 2d at 768.

On review, the accused first asserts that his right
to confront witnesses was violated in the Washington hear-
ing when he was denied the opportunity to subpoena and
cross-examine the judicial officers whose written orders and
opinions were admitted into evidence at his disciplinary pro-
ceeding. Absent that right of confrontation, the accused con-
tinues, that evidence should have been excluded altogether.
The accused contends that that is so for several reasons.

First, the accused argues that, under the Washington
Supreme Court’s decision in In re Discipline of Deming, 108
Wash 2d 82, 736 P2d 639 (1987), attorneys who face disbar-
ment must be afforded the same due process rights as crim-
inal defendants, including the right to confront witnesses
afforded by the Confrontation Clause. In Deming—a judicial
misconduct case—the Washington Supreme Court wrote
that judges accused of misconduct are entitled to no less
procedural due process than individuals accused of crimes
and that judges and lawyers facing disbarment are entitled
to the same procedural due process protections. Id. at 103.
The accused contends that, had he been allowed to cross-
examine the authors of the adverse orders and opinions
addressing his conduct, he could have shown that (1) his
father had perpetrated a fraud on the court in the course
of the divorce proceedings below; (2) the judges in question
were aware of that fraud; and (3) those judges were unwill-
ing to allow the accused to reopen his parents’ dissolution
proceeding to expose it.

530 Le

Ultimately, however, the accused’s reliance on
Deming to support his argument regarding confrontation is
misplaced. As a threshold matter, it is important to under-
stand that many of the rights that inure to criminal defen-
dants are largely inapplicable in proceedings such as these,
because attorney discipline matters are not criminal prose-
cutions. In both Oregon and Washington, bar discipline pro-
ceedings are sui generis—expressly recognized as neither
civil nor criminal in nature. See BR 1.3; ORS 9.529; ELC
10.14(a) (so stating).

Moreover, the accused overlooks that, seven years
after Deming, the Washington Supreme Court retreated
from its comment that a judge accused of misconduct is
“entitled to no less procedural due process than one accused
of crime.” Writing in a 1994 judicial discipline case—In re
Discipline of Ritchie, 123 Wash 2d 725, 730, 870 P2d 967
(1994)—the Washington Supreme Court stated:

“The judge’s constitutional arguments are not well-
taken, insofar as they are premised on the notion judges
in disciplinary proceedings are entitled to the same rights
as criminal defendants. The applicable standard is civil
in nature. Previous suggestions to the contrary in In re
Deming were unnecessary to its holding.”

(Internal citations omitted.) In short, more than 20 years
ago, the Washington Supreme Court disavowed the tenet for
which the accused now cites Deming.

Next, the accused argues that we should conclude
that his confrontation rights were violated in Washington
under that jurisdiction’s “appearance of fairness” doctrine,
which provides that

“proceedings before a quasi-judicial tribunal are valid only
if a reasonably prudent and disinterested observer would
conclude that all parties obtained a fair, impartial, and
neutral hearing.”

Matter of Johnston, 99 Wash 2d 466, 478, 663 P2d 457
(1983). According to the accused, his disciplinary hearing
in Washington did not meet the standard because, under
Weyerhaeuser v. Pierce County, 124 Wash 2d 26, 873 P2d
498 (1994), the “appearance of fairness” doctrine requires

531

that, with regard to any document containing facts or con-
clusions of law used as evidence in a proceeding, the author
of that document may be called to testify concerning its
contents—an opportunity that, according to the accused, he
was denied.

Like the accused’s reliance on Deming, however,
his reliance on Weyerhaeuser is based on a misreading of
Washington law. In Weyerhaeuser, the plaintiffs had chal-
lenged an environmental impact statement prepared by
county employees regarding a proposed sanitary landfill. In
the course of public hearings on the proposed project, the
county hearing examiner had ruled that the plaintiffs were
prohibited from calling the authors of the environmental
study to testify. The Washington Supreme Court reversed
that ruling, citing provisions of the county code. In doing so,
Washington's high court made clear that its decision was not
predicated on the state’s “appearance of fairness” doctrine:

“Because we decide this issue on the basis that oral cross
examination of the county staff is required under Pierce
County Code 2.36.090, we do not address the due process
and appearance of fairness doctrine arguments.”

Weyerhaeuser 124 Wash 2d at 31-32. As aresult, Weyerhaeuser
provides no support for the accused’s “appearance of fair-
ness” argument.

Accordingly, we reject the accused’s argument that
the Washington disciplinary hearing did not afford him due
process because he was not allowed to subpoena judicial offi-
cers and to subject them to cross-examination.

C. Appeal in Sanai II
1. The right to be meaningfully heard

The accused also contends that his appeal before the
Washington Supreme Court lacked due process. Specifically,
the accused first argues that the Washington Supreme
Court denied his due process right to be meaningfully heard
when it denied his motion to file an over-length brief.

In his second Washington disciplinary proceeding,
the accused filed—with the disciplinary board’s permission—
an extended 115-page brief. In preparing his appeal to the

532 Ld

Washington Supreme Court from the disbarment recom-
mendation that followed, the accused moved for leave to
file a 182-page opening brief and submitted a draft copy of
the proposed brief. The court, however, denied that motion,
effectively requiring the accused’s appellate brief to meet
the 50-page limit imposed by Washington Rules of Appellate
Procedure (WRAP) 10.4(b).

In the brief that he filed, the accused challenged
180 of the 229 findings and conclusions of the hearing offi-
cer, but he provided the required arguments and citation to
the record for only one. Sanai I, 177 Wash 2d at 760. The
Washington Supreme Court declined to consider the other
179 fact-related assignments of error, citing its own case law
for the proposition that attorneys challenging such findings
in disciplinary proceedings “must argue why the findings
are not supported by the evidence and cite to the record in
support of the argument.” Id. at 761. The court noted that
“the record of this 14-day proceeding, containing more than
2,300 pages of transcript and nearly 500 exhibits, fully sup-
ports the hearing officer’s findings and conclusions.” Id.

According to the accused, it was physically impos-
sible for him to challenge 56 pages of findings while main-
taining the 50-page brief limit imposed by WRAP 10.4(b).

- He contends that he possessed a due process right to present
all his arguments on appeal and that the court’s refusal to
allow him adequate space to do that constitutes structural
error, as described in Arizona v. Fulminante 499 US 279,
310, 111 S Ct 1246, 113 L Ed 2d 302 (1991) (Rehnquist, C. J.
dissenting) (noting that structural error is error affecting
the framework from within which a trial proceeds, and
without which a criminal trial cannot function as a vehicle
to determine guilt or innocence).

We note, however, that even the United States
Supreme Court routinely rejects requests to extend or waive
the page limitations that it has set for documents being filed
with the Court. See, e.g., Michigan v. Clifford 460 US 1033,
103 S Ct 1421, 75 L Ed 2d 784 (1983) (denying party’s request
to extend page limits for opening briefs). In the Court’s view,
such rules do not restrict a party’s access to due process but
instead help to apportion limited judicial resources and

pT 533

foster more useful and effective advocacy. As the Court has
recognized on numerous occasions, the “process of ‘winnow-
ing out weaker arguments on appeal and focusing on’ those
more likely to prevail . . . is the hallmark of effective appel-
late advocacy’” Smith v. Murray, 477 US 527, 536, 106 S Ct
2661, 91 L Ed 2d 434 (1986) (quoting Jones v. Barnes, 463 US
745, 751-52, 103 S Ct 3308, 77 L Ed 2d 987 (1983)).

This court has reached a similar conclusion as a
matter of state law. In Pratt v. Armenakis, 335 Or 35, 40-41,
56 P3d 920 (2002), the court held that, even in a death pen-
alty appeal, a page limit for appellate briefs does not violate
various constitutional rights, including the requirements of
due process. The court stated that an appellate court has
discretion to decide whether the reason offered by the mov-
ing party justifies extending the page limit for a brief and by
how much, id. at 39, and explained:

“Courts depend on counsel to examine the record, study
the applicable law, and analyze the potentially meritorious
claims that should be advanced on appeal. The exercise of
professional skill and judgment often requires a lawyer to
pick and choose among arguments or theories, and a death
penalty appeal is no exception to that requirement. See
Smith v. Robbins, 528 US 259, 288, 120 S Ct 746, 145 L Ed
2d 756 (2000) (appellate counsel need not (and should not)
raise every nonfrivolous claim, but rather may select from
among them in order to maximize the likelihood of success
on appeal). Effective appellate advocacy requires counsel to
make those choices. Counsel's assertions in support of the
motion [for an extended brief] do not demonstrate that he
analyzed those choices before seeking an extended brief of
260 pages.”

Id. at 40.

The accused relies on expert testimony from former
Washington Supreme Court Justice Sanders that he was
prevented from making all of his nonfrivolous arguments in
Sanai IT because of page limits. As explained above, however,
the right to be meaningfully heard does not require appellate
courts to allow litigants to present every nonfrivolous argu-
ment that could potentially be asserted in briefing. We there-
fore reject the accused’s due process argument based on the
page limit for his brief in the Washington Supreme Court.

584 Ld

2. The right to an impartial tribunal

The accused also contends that he was denied
due process during his appeal in Sanai II because the
Washington Supreme Court was not impartial. As previ-
ously noted, four members of that court dissented in 2009
when that court reversed the disciplinary board’s first rec-
ommendation to disbar the accused. Before the court heard
Sanai II, the accused sought, without success, the recusal of
those four dissenters on grounds of actual bias. His theory
at the time appeared to be that the dissenters had prejudged
his new appeal based on their prior receipt of the record gen-
erated in his first disciplinary hearing. Ultimately, however,
only two of the four dissenters went on to hear the accused’s
second appeal after one of their number recused himself and
Justice Chambers—author of the original dissent—retired
in 2012.

Despite the fact that Justice Chambers did not
participate in deciding the merits of the accused’s appeal
in Sanai II, on review, the accused offers a complex theory
in which Justice Chambers is nevertheless largely respon-
sible for tainting the Washington Supreme Court’s decision.
that disbarred him. To support that proposition, the accused.
again draws on the declaration and testimony of his expert,
former Justice Sanders.

According to the former Washington jurist, the
accused’s second appeal had to have been assigned to
Justice Chambers for its preliminary work-up and analy-
sis. Although Sanders acknowledges that the identities of
such “assignment judges” are kept secret, he notes that,
when a Washington justice leaves the bench, his or her case-
load generally falls to the new incoming justice. He reasons
that, because Justice Chambers’s replacement authored the
opinion disbarring the accused, it is a “certainty” that the
matter was initially assigned to Chambers for creation of a
predecision memorandum. That fact is important, Sanders
continues, because

“(t]he function of the assignment justice is critical to the
appellate process. The assignment justice presents the
summary of the record and a discussion of the procedural
background and merits of the appeal (or petition for review

Po 535

in discretionary review cases) to the entire Court. While
members of the Court can independently review the appel-
late record, this is not commonly done and in a case involv-
ing a 10,000 page record would almost certainly not be
done.”

Again drawing on Sanders’s declaration, the accused
also argues that Justice Chambers’s 2009 dissent exhibited
a predisposition toward dealing unfairly with the accused.
According to the accused, evidence of that bias is most clearly
seen in the portion of Justice Chamber’s dissent in which
he quotes a California Superior Court judge whose scath-
ing criticism was supposedly directed at the accused. See In
re Disciplinary Proceeding Against Sanai, 167 Wash 2d 740,
756, 225 P3d 203 (2009) (Sanai I) (Chambers, J. dissenting)
(quoting California trial court judge describing proliferation
of “needless, baseless pleadings,” in action as contributing
to an “outrage” of unwarranted grief and expense). Those
comments, however, were directed at his brother Cyrus
Sanai, not the accused. The accused appears to consider the
misstatement as purposeful and bias-driven, rather than a
mistake. Sanders also expressed the opinion that the other
justices who joined Chambers’s dissent exhibited bias by
voting to uphold the accused’s disbarment based on evidence
presented at a hearing at which the accused did not appear,
which Sanders refers to as “ex parte information.”

According to the accused, Chambers’s participation
in the initial review of the record at the outset of the appeal
would cause an objective observer to believe that there
was a probability of bias in the appeal. And, the accused
adds, two of the dissenters from Sanai I heard his appeal in
Sanai II but should have recused themselves. The accused
contends that the level of bias on the Washington Supreme
Court meets the standard recently set out in Williams v.
Pennsylvania, ___ US ___, 136 S Ct 1899, 195 L Ed 2d 132
(2016).

We are not, however, persuaded, by the accused’s
reliance on Williams. In that case, the United States
Supreme Court concluded that there was an impermis-
sible risk of actual bias when the Chief Justice of the
Pennsylvania Supreme Court,—a former district attorney

536 Le

who had approved the trial prosecutor’s request to seek the
death penalty in the petitioner’s criminal trial—refused to
recuse himself in the petitioner’s post-conviction relief case.
In Williams, the Court held that

“[w]here a judge has had an earlier significant, personal
involvement as a prosecutor in a critical decision in the
defendant's case, the risk of actual bias in the judicial pro-
ceeding rises to an unconstitutional level.”

Williams, ___ US at ___, 186 S Ct at 1910 (emphasis added).
That holding was based in large part on the Court’s concern
that

“an unconstitutional potential for bias exists when the
same person serves as both accuser and adjudicator in a
case. This objective risk of bias is reflected in the due pro-
cess maxim that ‘no man can be a judge in his own case
and no man is permitted to try cases where he has an inter-
est in the outcome.”

Id. at 1905-06 (internal citation omitted).

In this case, there is no evidence in the record
demonstrating that any member of the Washington Supreme
Court had “significant personal involvement” in prosecuting
the disciplinary charges against the accused. The fact that
two members of a four-person dissenting minority in the
accused's first appeal heard his second disciplinary appeal
does not—without more—pose an objective risk of bias
under Williams.

As for Justice Sanders’s expert testimony, which the
accused says “stands unrebutted, and unrebuttable” on the
issue of the Washington Supreme Court’s bias in this mat-
ter, it is worth noting that the trial panel in this case found
the former jurist’s conclusions about bias to be unreliable. It
wrote:

“While this Trial Panel appreciates the insight given by
Justice Sanders as to the inner workings of the Washington
Supreme Court, we cannot rely on his conclusions. Justice
Sanders (who testified by telephone from Hawaii) testified
as a retained expert, paid by [the accused] to give his opin-
ion. His opinions as to the claims of due process denial are

Po 587

purely speculation, carefully couched in terms of probabil-
ity and inference. [The accused] bears a burden of proof by
evidence, not by the speculation of a paid expert witness.
We find that [the accused] has not sustained his burden of
proof on the claim of denial of an impartial tribunal.”

We agree with that observation and, consequently, do not
accord Justice Sanders’s testimony concerning legal conclu-
sions any deference. We also note that, his experience on the
court notwithstanding, Justice Sanders was absent at the
time of the accused’s second appeal; thus, his ruminations
concerning what may have occurred during the appeal in
Sanai II are unhelpful here.

In sum, we conclude that the accused was not
deprived of due process in the proceedings leading to his dis-
barment in Washington. And, for the reasons stated above,
we agree with the Bar and hold that the accused received
full and fair hearings, both in his Washington disciplinary
proceedings and in the hearing conducted in this jurisdic-
tion. We also hold that the evidence amply establishes that
the accused engaged in misconduct in Washington that was
serious and protracted, warranting reciprocal discipline
here. We turn now to the question of the proper sanction
that should be imposed as a result.

IV. SANCTION

“(T]he purpose of a sanction is not to penalize the
accused, but to protect the public and the integrity of the
profession.” In re Stauffer, 327 Or 44, 66, 956 P2d 967 (1998).
The Bar urges that disbarment is required to protect the
public, the courts, and the profession in light of the accused’s
“proven willingness” to resort to abuse and obstruction and
to act in bad faith. The accused, on the other hand, pre-
sented testimony from character witnesses at the hearing
before the Oregon trial panel and, in arguing the appropri-
ate sanction, writes in his brief on review:

“The accused does not believe disbarment is warranted, for
actions taken over a dozen years ago in the course of a fam-
ily dispute where he sought to protect his abused mother
from a vicious, lying husband who is an acknowledged per-
jurer. The Accused is not alone in that opinion; numerous
judges, government officials, police, and attorneys testified

538 Ld

before the Trial Panel to his unblemished professional rep-
utation and record of exemplary public service.”

(Internal citations omitted.)

In reciprocal discipline cases, this court has an
independent obligation to determine an appropriate sanc-
tion based upon this state’s disciplinary rules. Lopez, 350
Or at 198. To do that, we begin by applying the analyti-
cal framework set out in the American Bar Association’s
Standards for Imposing Lawyer Sanctions (ABA Standards).
In re Obert, 352 Or 231, 258, 282 P3d 825 (2012). In accor-
dance with the ABA Standards, we first consider the duty
violated, the accused’s state of mind, and the actual or poten-
tial injury caused by the accused’s conduct. In re Kluge, 332
Or 251, 259, 27 P3d 102 (2001); ABA Standard 3.0. We next
determine the existence of any aggravating or mitigating
circumstances. Kluge, 332 Or at 259. Finally, we consider
the appropriate sanction in light of this court’s case law. Id.
In fashioning a sanction, our purpose is to protect the public
and the administration of justice from lawyers who have not
properly discharged their duties to clients, the public, the
legal system, or the profession.

With regard to the ethical duty violated by the
accused in this matter, the record demonstrates that, by vir-
tue of his conduct in Washington, the accused:

e Violated Oregon Rule of Professional Conduct
(RPC) 3.1 by repeatedly bringing legal proceedings
or taking other actions in which he asserted posi-
tions that lacked a nonfrivolous basis in law or fact.

e Violated RPC 3.4(c) by repeatedly disobeying obli-
gations imposed upon him by the rules of the tribu-
nals before which he appeared.

e Violated RPC 4.4(a) by repeatedly representing his
client using means that had no substantial purpose
other than to embarrass, delay, harass, or burden
third persons.

e Violated RPC 8.4(a)(1) by violating, or know-
ingly assisting another in violating, the Rules of
Professional Conduct.

Po 589

e Violated RPC 8.4(a)(4) by repeatedly engaging in
conduct prejudicial to the administration of justice.

By engaging in the conduct giving rise to those violations,
the accused abused the legal process and violated the duty
he owed to the legal system to refrain from such actions.
ABA Standards 6.2.

With regard to the mental state accompanying
those violations, the ABA Standards provide that a lawyer
(1) acts with intent “when the lawyer acts with the conscious
objective or purpose to accomplish a particular result” and
(2) acts with knowledge when the lawyer acts with “the con-
scious awareness of the nature or attendant circumstances
of the conduct but without the conscious objective or pur-
pose to accomplish a particular result.” ABA Standards at 7.
Here, the accused acted intentionally when he repeatedly
disobeyed court orders and delayed the sale of the real prop-
erty that was ordered as part of his parents’ marriage disso-
lution. He also acted knowingly in repeatedly filing multiple
frivolous claims in both state and federal court without a
reasonable basis in law or fact for doing so.

Turning to the question of the potential or actual
injury caused by the accused, we begin by noting that, under
the ABA Standards, the term “injury” is broadly defined to
encompass “harm to a client, the public, the legal system
or the profession which results from a lawyer’s misconduct.”
ABA Standards at 7. Here, the accused’s misconduct resulted
in serious actual injury to his mother who, as his client,
was forced to pay tens of thousands of dollars in sanctions
and attorney fee awards as a consequence of the accused’s
representation. The accused’s father, forced to incur simi-
larly exorbitant sums in the course of defending against
the unnecessary litigation instigated by the accused, also
suffered serious actual injury. Third parties—including
father’s attorney and employee and the chief justice of
the Washington Supreme Court—became subjects of the
accused’s baseless litigation. The accused’s misconduct also
inflicted serious actual harm upon the legal system, because
it forced courts to waste valuable time and resources deal-
ing with the multitude of frivolous matters generated by the
accused. And, finally, it harmed the legal profession itself,

540 Lt

by undermining the public’s confidence in the integrity of
the law.

Under ABA Standard 7.1, disbarment is the pre-
sumptive sanction “when a lawyer knowingly engages in
conduct that is a violation of a duty owed as a professional
with the intent to obtain a benefit for the lawyer or another,
and causes serious or potentially serious injury to a client,
the public or the legal system.” Under ABA Standard 6.21,
disbarment is also the presumptive sanction “when a lawyer
knowingly violates a court order or rule with the intent to
obtain a benefit for the lawyer or another, and causes seri-
ous injury or potentially serious injury to a party or causes
serious or potentially serious interference with a legal
proceeding.”

‘We next consider whether mitigating or aggravat-
ing factors might affect that determination. We find several
aggravating factors at play here. First, the accused engaged.
in a large-scale pattern of misconduct that included multiple
offenses. ABA Standard 9.22(c) and ABA Standard 9.22(d).
Second, he has refused to acknowledge the wrongful nature
of his conduct in any meaningful way. ABA Standard 9.22(g).
At the end of the day, the accused appears to view his per-
sonal culpability in this disciplinary matter as either neg-
ligible or else justified by his family’s circumstances. And
finally, by pursuing a personal agenda at the expense of his
parents, Washington's state and federal court systems, and
the rule of law, the accused acted with a dishonest or selfish
motive. ABA Standard 9.22(b).

As to mitigating factors, three are applicable here:
(1) the absence of a prior disciplinary record, ABA Standard.
9.32(a); (2) the imposition of other sanctions related to this
matter, i.e., the accused’s disbarment in Washington, ABA
Standard 9.32(k); and (3) the accused’s favorable reputation
among lawyers and civic leaders in his community. As to
the last factor, however, it should be notéd that the accused’s
character witnesses testified that they knew little or nothing
about the Washington litigation until after it had concluded.

Had the scope of the accused’s misconduct been
less extensive and protracted, those factors would have

Po BAL

undoubtedly played a role in mitigating the sanction to be
imposed in this case. But the accused’s misconduct was not
limited in scope. Both pervasive and ongoing, his miscon-
duct stretched out over multiple years and involved mul-
tiple incidents, all despite repeated admonitions from the
bench to cease such actions. The end result, as we have
already noted, was actual harm—serious harm—to almost
all involved, including the courts and the legal profession.
Having considered the aggravating and mitigating factors
together, we are not persuaded that the mitigating elements
set out above are weighty enough to warrant a sanction less
than disbarment. We turn now to examine how that prelim-
inary determination squares with our own precedents.

As we have noted in the past, case-matching in the
context of disciplinary proceedings “is an inexact science.”
Stauffer, 327 Or at 70. That is particularly true where, as
here, this court’s precedents currently lack a perfect ana-
log to the matter before us. That said, our decision in In re
White, 311 Or 573, 815 P2d 1257 (1991), provides a degree of
guidance in fashioning an appropriate sanction in this case.

In White, the accused lawyer had intentionally and
repeatedly violated his duty to the legal system by filing
multiple vexatious actions at his client’s behest against two
defendants who had co-owned a chiropractic practice with
the client. Using the legal system to harass the defendants
rather than resolve any legitimate dispute, the accused law-
yer confided to opposing counsel at one point that the accused
lawyer's client intended to “sue [the defendants] in as many
different courts for as many different claims as they could
think up,” the goal being to cause the defendants “as much
grief and expense *** as was humanly possible.” Id. at 578.
True to his word, over a five-year period, the accused lawyer
filed 15 different actions against the defendants in three dif-
ferent counties. Id. at 583.

This court concluded that the accused lawyer in
White had violated a number of disciplinary rules in force at
the time by conduct that included, in part, (1) filing repeti-
tious claims in different counties where such claims were not
warranted; (2) filing such claims for the purpose of harass-
ment; (3) accepting employment from a client knowing that

542 i

the client intended to use litigation as a means to harass
opposing parties; (4) accepting employment from a client
knowing that the client intended to pursue unwarranted
claims against opposing parties; and (5) making a false
statement to a trial court to obtain a postponement. The
court also concluded that there were four aggravating fac-
tors at work in White: (1) multiple offenses, (2) previous dis-
cipline (for accepting an excessive fee), (3) false testimony
during the disciplinary process, and (4) failure to acknowl-
edge wrongful nature of his conduct. Ultimately, the court
concluded that the accused was

“guilty of numerous violations of the Disciplinary Rules.
He engaged in a pattern of inappropriate conduct over a
period of five years. That pattern of conduct, coupled with
the accused’s lack of candor, suggests that disbarment, or
a substantial period of suspension, is needed in order to
impress on the accused the necessity of complying with the
Disciplinary Rules. The appropriate sanction is a three-
year suspension.”

Id. at 593.

This case has some similarities to White, absent
several of the aggravating factors—prior disciplinary his-
tory and false testimony—that were present in that case.
Like the lawyer disciplined in White, the accused engaged in
a large-scale pattern of vexatious, bad-faith litigation over
a protracted period of time that caused actual and serious
harm, and he acknowledges no wrongdoing whatsoever.

But this case is also unlike White. After the accused
had filed multiple frivolous, duplicative, bad-faith actions,
claims, and motions in multiple jurisdictions, he repeatedly
and deliberately violated court orders. And he used the legal
process to target, embarrass, and harass not only his father
but third parties as well, including individuals associated
with his father and members of tribunals who did not rule in
the accused’s favor. There is no evidence that his acts were
driven by anyone other than himself. The sheer magnitude
of the accused’s repeated misconduct in the Washington and
federal cases, coupled with the accused’s abject disdain for
the rule of law, as exhibited by his actions, are sufficient to
warrant a sanction here greater than that imposed in White.

| CU 543

After considering the ABA Standards and our case law, we
conclude that, to protect the public and the administration
of justice in this jurisdiction, the accused should be dis-
barred in Oregon as a reciprocal sanction for his misconduct
in Washington.

The accused is disbarred, effective 60 days from the
date of this decision.

544

Argued and submitted May 10, judgment of trial court and decision of Court of
Appeals affirmed November 8, 2016

MT & M GAMING, INC.,
a Washington corporation,
Petitioner on Review,
v.
CITY OF PORTLAND,
an Oregon municipal corporation,
Respondent on Review.
(CC 121114443; CA A154206; SC S063648)

383 P3d 800

Thomas R. Rask, III, Kell, Alterman & Runstein, L.L.P.,
Portland, argued the cause and filed the briefs for petitioner
on review.

|
|
|

Po 545

Denis M. Vannier, Deputy City Attorney, Portland, argued
the cause and filed the brief for respondent on review. Also on
the brief was Harry Auerbach, Chief Deputy City Attorney,
Portland.

Thomas M. Christ, Portland, argued the cause and filed
the brief for amicus curiae ACLU Foundation of Oregon Inc.

Carl Sniffen, Salem, filed the brief for amicus curiae
League of Oregon Cities. Also on the brief was Sean E. O’Day.

Before Balmer, Chief Justice, and Kistler, Walters, Landau,
Baldwin, and Brewer, Justices, and Shorr, Justice pro
tempore.**

WALTERS, J.

The judgment of the trial court and the decision of the
Court of Appeals are affirmed.

** Nakamoto, J., did not participate in the consideration or decision of this
case.

546 Pe

WALTERS, J.

This case concerns the standing requirements for
actions brought under the Uniform Declaratory Judgment
Act, ORS 28.010 to 28.160, an action that is available to
“any person *** whose rights, status or other legal rela-
tions are affected by” the law or legal instrument about
which the declaration is sought. ORS 28.020. Plaintiff, a
Washington corporation that operates a casino in that state,
brought an action against the City of Portland under that
act, seeking declarations that certain practices the city had
approved through its “social gaming” permitting system
were contrary to Oregon law. Plaintiff asserted that it was
adversely affected by the city’s issuance of permits to engage
in those gaming practices to establishments in Portland, in
that persons who previously had patronized its casino in
Washington now were choosing to gamble in city-permitted
card rooms in Portland instead. The city moved for sum-
mary judgment on the ground that plaintiff lacked stand-
ing, and the trial court granted the motion, reasoning that,
insofar as plaintiff's Washington casino was not subject to
the “legal system” that was the object of the declaratory
judgment action, plaintiff had no “rights, status [or] other
legal relations” that could be adversely affected. The Court
of Appeals agreed, holding that, to establish standing under
the declaratory judgment act, a plaintiff must be subject to
the laws it asks the court to construe or must, at least, do
business or own property in Oregon. MT & M Gaming, Inc.
v. City of Portland, 274 Or App 100, 106, 360 P3d 611 (2015).
Plaintiff petitioned for review, arguing that the standing
requirement that the Court of Appeals had proposed has no
basis in the law. We allowed the petition.

Before this court, the city acknowledges the Court of
Appeals’ position but argues that plaintiff lacks standing for
a somewhat different reason—that the interest that plain-
tiff claims has been adversely affected by Oregon’s social
gaming statutes is not within the “zone of interests” that
those statutes seek to protect. The city thus argues that this
court should limit standing in a declaratory judgment action
to those persons who can demonstrate that their interests
are within the “zone of interests” that the relevant statute
seeks to protect. The city contends that federal courts and

Po 547

other jurisdictions have imposed that standing requirement
and that, in the interest of uniformity, we should do so as
well.

For the reasons that follow, we conclude that plain-
tiffis correct that the Court of Appeals overstated the stand-
ing requirement under the declaratory judgment act when
it said that a plaintiff must be “subject to” a statute that it
asks the court to construe or must do business in or own
property in Oregon. Instead, to have standing to bring a
declaratory judgment action construing a statute, a plaintiff
need only have a legally recognized interest that is affected
by the statute. We also conclude, however, that the city is
incorrect in suggesting that this court is required to recog-
nize the “zone of interest” test for standing or that the only
legally recognized interest that is cognizable for standing
purposes is an interest that is within the “zone of interests”
that the statute at issue is intended to protect. Although
some affected interests may be legally recognized precisely
because they are the direct object of or at least within
the broad purposes of a statute targeted in a declaratory
judgment action, other affected interests that do not bear
that kind of relationship to the statute also may be legally
recognized—and thus confer standing. Legal recognition
can come from a variety of sources, not only from the statute
under construction or consideration. In this case, we con-
clude that the interest that plaintiff relies on to establish
standing—an interest in requiring Oregon establishments
to abide by social gaming laws to which plaintiff itself is
not subject—is not a legally recognized interest. It is not
an interest that is within the purposes of the social gam-
ing laws, it is not one that has been recognized by the com-
mon law, and plaintiff has not sufficiently developed any
other argument for its legal recognition. Accordingly, we
affirm the decision of the Court of Appeals, albeit under
a different standing analysis than the one that that court
employed.

RELEVANT STATUTES AND ORDINANCES

Before we turn to the factual particulars, we
describe the relevant statutes and ordinances. Gambling is
unlawful in Oregon unless it is specifically authorized by

548 po

law, and it is a crime to engage in or profit from unlaw-
ful gambling. ORS 167.117(24), ORS 167.122, ORS 167.127.
One kind of gambling that is specifically authorized by law
involves so-called “social games.” As relevant to this case, a
“social game” is,

“a game, other than a lottery, between players in a private
business, private club or place of public accommodation
where no house player, house bank or house odds exist and
there is no house income from the operation of the social
game.”

ORS 167.117(21)(b). Social games may be conducted in a pri-
vate business, private club, or place of public accommodation
only if authorized by a local ordinance. ORS 167.121.

The City of Portland has enacted an ordinance that
allows businesses and clubs to offer social games if they
obtain a permit from the city. Portland City Code 14A.70.050.
The city’s ordinance is consistent with the social games stat-
utes, in that it prohibits house players, house banks, house
odds, and house income from games. Portland City Code
§ 14A.70.040. The ordinance also imposes limitations that
are not part of the statutes, including a betting limit of one
dollar per game. Id.

FACTUAL AND PROCEDURAL BACKGROUND

We take the relevant facts, which are generally undis-
puted, from the summary judgment record. For many years,
the only entities that obtained permits under Portland’s
ordinance were private social and athletic clubs, where the
hosting of social games was a relatively insignificant adjunct
to the entities’ primary mission. In recent years, however,
the city has granted social gaming permits to other private
businesses which, at the time of their applications, signaled
an intention to make gaming—in particular, poker—central
to their businesses: Specifically, they intended to host more
or less continuous poker games and tournaments, involving
entry fees and/or “buy-ins,” although they would also sell
food and beverages and offer other activities. In their com-
munications with the city, those businesses explained that
they would return all of the proceeds from players’ buy-ins

549

to players in the form of winnings; however, they would
charge a daily “membership fee” to anyone entering the
establishment, regardless of his or her participation in the
games or tournaments, and would keep that income. The
city seemingly accepted those arrangements as consistent
with the prohibition on “house income from the operation of
the social game,” ORS 167.117(21)(b). It issued permits to
the businesses, but warned them

“that any membership fee or cover charge must be charged
to all who enter the club or business (and not just to those
participating in social games), that the membership fee or
cover charge cannot be imposed for participation in social
games, and that the club or business must offer services or
activities in addition to social games if there is a member-
ship fee or cover charge.”

Plaintiff owns and operates a casino in Washington—
a state that does not have the same legal limitations on
gambling that Oregon has. Historically, plaintiff has drawn
many of its customers from the Portland area. In recent
years, however, plaintiff's casino has experienced a drop
off in business, and plaintiff contends that at least part of
the decrease can be traced to the proliferation, in Portland,
of card rooms operating under city-issued social gaming
permits. Believing that those card rooms violate Oregon’s
statutory prohibition on “house income” from social games
by collecting daily membership fees or cover charges from
patrons, plaintiff filed the present declaratory judgment
action against the city, seeking a number of declarations
about the legality of the activities engaged in by card rooms
under social gaming permits issued by the city. In its com-
plaint, plaintiff alleged that the city had been issuing per-
mits to poker establishments that were violating the social
gaming laws by, among other things, charging daily “mem-
bership fees” and permitting patrons to tip house-provided
dealers. Plaintiff further alleged that the city had taken the
position that those practices did not violate Oregon’s social
gaming laws. Plaintiff sought a declaration that charging
any form of membership fee or cover charge in exchange for
the right to participate in a game of chance disqualifies the
arrangement from the statutory authorization for offering

550 PO

social games and constitutes a felony under Oregon law.!
Finally, relevant to the issue of its standing to bring the
action, plaintiff alleged that it was

“substantially and adversely affected in that a significant
portion of its patrons and customers have stopped attend-
ing plaintiffs lawful operation, and have elected to attend
and participate in the unlawful operations of the estab-
lishments granted permits by the city. Plaintiff cannot
establish a similar operation in Portland—even with a per-
mit from the city—without violating Oregon law and the
Portland City Code.”

In its answer to the complaint, the city raised several affir-
mative defenses, including lack of standing and failure to
join necessary parties (specifically, the businesses that were
operating under social gaming permits from the city).

Plaintiff moved for partial summary judgment,
arguing that there was no genuine issue of material fact
with regard to certain of its allegations. In support of that
motion, plaintiff submitted various affidavits and docu-
ments, including—in apparent support of its allegations
directed at standing, quoted above—a senior executive's
affidavit describing the downturn in business the casino had
recently experienced and explaining how plaintiff had deter-
mined that a portion of the downturn could be attributed
to the proliferation of Portland card rooms under the city’s
interpretation of the social gaming statute.

The city filed a cross-motion for summary judg-
ment on its standing and failure-to-join-necessary-parties
defenses. On the issue of standing, the city asserted that
plaintiff was required, but had failed, to show that it had
a legally cognizable interest under the social gaming stat-
utes that was adversely affected by the city’s interpreta-
tion of that statute. It explained that the statutes reflect a
legislative concern that gambling is detrimental to Oregon
citizens, and that the legislature was not concerned with

? Plaintiff also sought declarations that paying a cover charge for the right to
participate in games constitutes unlawful gambling, that permitting or encour-
aging the tipping of dealers who are provided by the establishment disqualifies
the games from the social game exception, and that promoting games involv-
ing buy-ins in excess of one dollar per game violates the city’s social gaming
ordinance.

Po 551

whether Washington state casinos lose the patronage of
Oregon residents. Plaintiff responded that the premise
underpinning the city’s argument—that, in order to have
standing, a plaintiff must show that its affected interest is
one that the law at issue is specifically designed to protect—
lacks any basis in the law. However, in apparent response
to the state’s arguments on the issue of standing, plaintiff
sought leave to amend its complaint to include a request for
an alternative declaration that plaintiff could lawfully oper-
ate a business in Portland in the same manner as the city’s
other permittees.

Ultimately, the trial court granted summary judg-
ment for the city on the issue of standing,” but it based its
decision on a somewhat different analysis than the one the
city had asserted. It appeared to acknowledge that, in the
declaratory judgment context, standing may be based on
some “practical adverse effect,” whether or not the interest
affected is one that the law at issue seeks to protect. It noted,
in particular, that “this can occur in the context of a govern-
ment regulatory system, *** if one competitor in the system
does not comply with rules with which other competitors
must, at a cost, comply.” The trial court concluded, however,
that standing can exist in those circumstances only when
the plaintiff's activities are conducted in the same “legal
system” as the plaintiff's competitors: “The constitutions,
statutes, charters and ordinances about which this court
can speak do not offer any protection for the ‘rights, status
or other legal relations’ of plaintiff until and unless plaintiff
comes within the operation of those statutes, charters and
ordinances.” Given that there was no dispute that plaintiff's
casino was subject to Washington’s, and not Oregon’s, gam-
bling laws, the trial court concluded that summary judg-
ment was warranted. The trial court also denied plaintiff's
motion to amend its complaint, explaining that the city was
“entitled to an order and judgment on the pleadings that
were operative at the time of the motion, particularly with
respect to the relief requested.” The court thus issued a

2 Initially, the trial court granted summary judgment for the city without
specifying whether its decision was based on lack of standing or failure to join
necessary parties. After plaintiff offered to join the social gaming permittees as
parties, the trial court clarified that its decision was based on lack of standing.

552 Po

judgment denying plaintiffs motion for partial summary
judgment, granting the city’s motion for summary judg-
ment, and dismissing plaintiff's complaint with prejudice.

On plaintiff’s appeal, the Court of Appeals generally
agreed with the trial court’s position on the issue of standing.
It opined that standing to seek a declaration about the appli-
cation of an Oregon law under the declaratory judgment act
can be based on the law’s effect on the plaintiff's economic
interests, but only if the economic effect is or relates to a
legally recognized interest. The Court of Appeals concluded.
that, given that plaintiff “ha[d] not alleged that it does busi-
ness or owns property in Oregon, [was] not subject to the
laws it asks the court to construe and, in fact, ha[d] no legal
interests in the state,” it had failed to show that the alleged
harm to its economic interests was the kind of harm to a
“legally recognized interest” that is necessary to establish
standing under ORS 28.020. MT & M Gaming, 274 Or App
at 106.

ARGUMENTS IN THIS COURT

Before this court, plaintiff argues that the trial
court and Court of Appeals decisions are based on a mis-
understanding of the standing requirements for declar-
atory judgment actions. Plaintiff suggests, in particular,
that those courts wrongly believed that standing to bring
a declaratory judgment action based on real or threatened
economic effects of a law or interpretation thereof only
exists when the plaintiff itself is subject to the law. In its
response to plaintiff's argument, the city distances itself to
some extent from the idea, expressed by the courts below,
that to have standing to challenge a law or its application
under the ORS 28.020, a plaintiff must be a person to whom
the law directly applies. It argues for a somewhat more lib-
eral rule—that the interest of the plaintiff that allegedly is
affected by the statute must fall within the “zone of inter-
ests” that the challenged statute seeks to protect. Applying
that rule, it argues that an out-of-state casino’s interest in
keeping its Portland-based customers—the interest that
plaintiff alleges is affected by the city’s interpretation and
application of the social gaming statutes—is outside of the
zone of interests implicated by those statutes.

Po 553

We thus are confronted with alternative theories
regarding the kind of interest that a plaintiff must assert
in order to have standing to challenge a statute, or a gov-
ernmental entity’s application or interpretation thereof,
under Oregon’s declaratory judgment act. Under the more
stringent theory, a plaintiff would have to be “subject to” the
statute—that is, the plaintiffs affected interests must be
ones that the statute operates on directly and by design.
Under the more expansive theory, the relationship between
the statute and the affected interest can be somewhat looser:
The interest that is affected need only be within the “zone of
interests” that the legislature sought to protect by enacting
the statute—that is, within the statute’s broader objectives.
Both theories thus propose that, when a plaintiff contends
that its interests are affected by a statute about which it
seeks a declaration, the touted interests are only relevant,
for purposes of standing to bring the declaratory judgment
action, if, in either a narrow sense or in a broader one, they
are the statute’s intended objects. The validity of those pro-
posed criteria for standing under the declaratory judgment
statute is the central question in this case.

STANDING UNDER THE DECLARATORY
JUDGMENTS ACT

It is important to emphasize at this point that, in
Oregon, standing is not a generic concept but largely depends
on the statute under which the plaintiff seeks relief.? Morgan
v. Sisters School District #6, 353 Or 189, 194, 301 P3d 419
(2018); Local No. 290 v. Dept. of Environ. Quality, 323 Or
559, 566, 919 P2d 1168 (1996); Eckles v. State of Oregon,
306 Or 380, 384, 760 P2d 846 (1988), appeal dismissed, 490

3 That is one reason for rejecting the idea, suggested by the Court of Appeals,
that standing might depend on whether a plaintiff does business or owns prop-
erty in Oregon. MT & M Gaming, 274 Or App at 106. As we explain below, a
plaintiff's standing under Oregon's declaratory judgment statute depends on he
or she having a legally recognized interest that is affected by the subject matter
of the declaration that is sought. It seems self-evident that a person who does not
own property or do business in Oregon may still have a legally recognized inter-
est in the meaning or application of an Oregon law. For instance, a Washington
resident who does not own property or do business in Oregon may have a legally
recognized interest in avoiding injury from toxic chemicals released by Oregon
polluters, and thus may have standing to seek a declaration, in Oregon, about an
Oregon agency's interpretation of an Oregon environmental law.

5

US 1032 (1989). Accordingly, when considering issues of
standing under a given statute, we do not rely on general
pronouncements about standing drawn from cases involving
different statutes. Neither do we consider federal notions of
standing that do not apply in Oregon. Local No. 290, 323 Or
at 566; Rendler v. Lincoln Co., 302 Or 177, 180, 728 P2d 21
(1986); Benton County v. Friends of Benton County, 294 Or
79, 82, 653 P2d 1249 (1982).

Here, standing under the declaratory judgment act
is at issue. The relevant provision of the act provides:

“Any person *** whose rights, status or other legal rela-
tions are affected by a constitution, statute, municipal char-
ter, ordinance, contract or franchise may have determined
any question of construction or validity arising under any
such instrument, constitution, statute, municipal charter,
ordinance, contract or franchise and obtain a declaration of
rights, status or other legal relations thereunder.”

ORS 28.020. Thus, to bring a declaratory action regarding a
statute, a plaintiff must show that it is a “person” and that
it has some “right[], status or other legal relation[]” that is
“affected by” the statute.*

In Morgan, this court identified three considerations
that determine a plaintiffs standing to bring a declaratory
judgment action, based on the wording of ORS 28.020 and
cases decided under the statute. First, the plaintiff must
establish that the challenged law causes “some injury to or
impact upon a legally recognized interest of the plaintiff's,
beyond an abstract interest in the correct application or
the validity of [the] law.” 353 Or at 195. Although Morgan
does not explicitly make the point, that first requirement
effectively interprets the wording of ORS 28.020, reading
the phrase “rights, status or other legal relations” as refer-
ring to any “legally recognized interest.” That interpreta-
tion is apt, given the phrase’s reference to disparate con-

” &,

cerns (“rights,” “status” and “other *** relations”) and the

+ Those requirements define both what is required for a plaintiff to obtain
an adjudication—standing—and what is required for a plaintiff to have a claim
for relief. See Eckles, 306 Or at 383-84 (explaining that this court uses the term
“standing” to refer to the right to obtain an adjudication of a claim and that
standing is logically considered prior to consideration of the merits of a claim).

Po 555

narrowing implication of the modifier “legal”: Any “interest”
may qualify as long as it is “legally recognized.”

The other two requirements for standing announced
in Morgan are drawn from prior standing cases decided
under the declaratory judgment act and are less closely tied
to the statute’s wording. In addition to showing an injury
or impact on a legally recognized interest, a plaintiff must
show that the claimed injury or impact is real or probable,
not hypothetical or speculative. 353 Or at 195. Finally, the
plaintiff must show that a decision by the court will in some
sense rectify the injury, i.e., that it will have “a practical
effect on the rights that the plaintiff is seeking to vindicate.”
Id. at 197.

Notably, Morgan makes no mention of any addi-
tional requirements—for instance, a requirement that
plaintiffs be the intended beneficiaries, either in a narrow
or broad sense, of any statute or other law about which
they seek a declaration. Neither do any of this court’s other
standing cases under the declaratory judgment act refer to
such a requirement. The city suggests, however, that such
a requirement is implicit in the analysis in certain of our
cases, most notably Doyle v. City of Medford, 356 Or 336, 337
P3d 797 (2014).

In Doyle, persons who had retired from employ-
ment with the City of Medford sought a declaration under
ORS 28.020 about the effect of a statute, ORS 243.303(2),
which requires local governments to extend to their retirees
the same health insurance coverage they provide to their
employees “insofar as and to the extent possible.” The plain-
tiffs argued that Medford had breached its duty under that
statute by refusing to allow them to continue their health
insurance coverage after their retirement. Medford argued
that allowing retirees to continue their coverage was too
costly and therefore not “possible” and, thus, that it had not
violated the statute. The issue of the plaintiffs’ standing to
bring their declaratory judgment claim arose, and this court
analyzed the standing issue—applying the three standing
considerations identified in Morgan—as follows:

“The first consideration is that there must be some injury or
other impact upon a legally recognized interest beyond an

556 Po

abstract interest in the correct application or the validity
of a law. Plaintiffs here satisfy that requirement: They are
members of the class of persons to whom the duty imposed by
ORS 248.303(2) is owed, and they claim injuries based on
the city’s asserted violation of that duty. The second consid-
eration is that the injury must be real or probable, not hypo-
thetical or speculative. Plaintiffs also satisfy that require-
ment: There is a present and actual dispute between the
parties about the existence and scope of plaintiffs’ rights
and the city’s obligations under the statute. The third and
final consideration is that the court’s decision must have a
practical effect on the rights that the plaintiffis seeking to
vindicate. Again, that requirement is satisfied. A judgment
to the effect that plaintiffs are entitled to health insurance
benefits under the statute would afford plaintiffs a judicial
declaration of rights that, at least prospectively, would vin-
dicate their rights under ORS 243.303(2).”

356 Or at 372 (citations omitted; emphasis added).

The city argues that that analysis suggests that, to
have standing to bring a declaratory judgment action with
respect to a given statute, plaintiffs must show that the
statute, directly applies to their asserted interests. It shows,
in the city’s view, that the right or interest plaintiffs seek to
vindicate must be one that arises “under the statute,” and
that plaintiffs must be a “member[] of the class of persons”
at which the statute is directed—either by imposing a duty
or creating a right or “legally recognized interest.”

The city confuses what is sufficient to support stand-
ing to bring a declaratory judgment action with what is nec-
essary. The fact that this court concluded in Doyle that the
requirements for standing were satisfied in those circum-
stances does not mean that those are the only circumstances
that will support standing to challenge a statute under the
declaratory judgment act. Other cases from this court illus-
trate the point; League of Oregon Cities v. State of Oregon,
334 Or 645, 56 P3d 892 (2002), is an example. In the first
of two actions that this court considered in that case, mul-
tiple plaintiffs brought declaratory judgment actions chal-
lenging Ballot Measure 7 (2000), a voter-approved initiative
that required state and local governments to either com-
pensate landowners for regulations that affected the value

Po 557

of their land or waive application of the regulation with
respect to that land. The plaintiffs sought a judicial decla-
ration that the measure was invalid because it had not been
enacted in accordance with the requirements of the Oregon
Constitution. Jd. at 649-51. Of the plaintiffs, only two were
found to have standing—a rancher who had testified that
the measure would cause the county to waive limitations on
development near his ranch, which would lead to increased
development to an extent that would threaten his ability
to continue ranching the land, and a town mayor who said
that his home would decrease in value if, in response to the
measure, the county waived regulations that prevented a
neighbor from developing a mine on her property. Id. at 659-
61. The initiative measure at issue did not apply to those
plaintiffs—at least not directly. They were not state or local
governments; neither were they landowners whose land val-
ues were directly and adversely affected by state and local
regulations. Instead, the plaintiffs alleged that their land
values and other financial interests were affected indirectly,
by the measure’s operation on state and local governments.
Yet, in the absence of any direct application of the measure
to those plaintiffs, this court concluded that the plaintiffs
had demonstrated that the measure would adversely affect
their “legally cognizable interests” and that the plaintiffs
therefore had standing.

Perhaps in recognition of cases like League of Oregon
Cities, the city instead suggests that the standing require-
ment for which it contends is more properly formulated as
a requirement that the right or interest that allegedly is
affected by the statute at issue be within the “zone of inter-
ests” that the statute seeks to protect. And it is true that
the result in League of Oregon Cities could be explained in
those terms: If one allows that Ballot Measure 7 (2000) gen-
erally was concerned with the economic impacts of land use
regulation on landowners, a landowner’s interest in having
neighboring lands regulated in a way that promotes his or
her own economic interests arguably could be viewed as
within the measure’s “zone of interests.” But, again, there
is nothing in League of Oregon Cities that suggests that the
court in that case decided the standing issue on the basis of
a “zone of interest” requirement. The most that can be said

558 es

about the case is that it shows that a plaintiff whose inter-
ests do fall generally within the intended objectives of the
targeted statute has standing to bring a declaratory judg-
ment act with regard to the statute.

The city argues, however, that, because the federal
courts and some other jurisdictions have adopted a “zone of
interest” requirement to establish standing to challenge a
statute or an interpretation thereof through a declaratory
judgment action, this court should do so as well.® It points to
ORS 28.150, which provides that the declaratory judgment
act should “be so interpreted and construed as to effectuate
its general purpose to make uniform the law of those states
which enact it, and to harmonize, as far as possible, with
federal laws and regulations on the subject of declaratory
judgments.” But that argument presumes that the stand-
ing issue here is, at bottom, simply a question of statutory
construction—that is, that there are no relevant principles
of standing beyond the declaratory judgment statutes them-
selves, in either Oregon or the law of other jurisdictions.
The validity of that presumption is questionable, at best,
and given the significant differences between our own gen-
eral approach to standing and that of other jurisdictions, it
behooves us to consider the origins and application of the
“zone of interest” requirement before adopting it as part of
declaratory judgment jurisprudence on the theory that ORS
28.150 requires it.

THE “ZONE OF INTEREST” FORMULATION

The “zone of interest” formulation first arose in
a United States Supreme Court case, in the context of an
action brought under 5 USC section 702, a provision of the
federal Administrative Procedures Act (APA) that grants

5 See, e.g., Lexmark International, Inc. v. Static Control Components, Inc.,
527 US ___, 184 S Ct 1877, 1388-89, 188 L Ed 2d 392 (2014) (describing “zone
of interest” test as generally applicable tool for determining who may invoke a
statutory cause of action); Five Corners Family Farmers v. State of Washington,
173 Wash 2d 296, 302-03, 268 P3d 892 (2011) (“In order to establish that a
party’s ‘rights, status or other legal relations’ are affected by a statute,” the
party’s asserted interest must he “arguably within the zone of interests to be pro-
tected or regulated by the statute *** in question”); Zehner v. Village of Marshall,
288 Wis 2d 660, 668, 709 NW2d 64 (2005) (“To have standing, a party must [have
an] ‘interest [that] is arguably within the zone of interests’ that [the] statute or
constitution provision under which the claim is brought, seeks to protect.”).

Po 559

standing to “any person” who is “aggrieved by agency action
within the meaning of a relevant statute.” A data processing
business had challenged a ruling of the Comptroller of the
Currency that allowed national banks to provide data pro-
cessing services, as an incident to their banking services,
to other banks and to their customers. The district court
dismissed the complaint for lack of standing, and the United
States Court of Appeals for the Eighth Circuit affirmed,
holding that the plaintiff business lacked standing because
it had no “private legal interest” in the ruling. Assn of Data
Processing Service Organizations, Inc. v. Camp, 406 F2d
837, 843 (8th Cir 1969). When the Eighth Circuit thus con-
cluded that the plaintiff's standing depended on it having a
“private legal interest” that was affected, it was looking for
a legal right in a traditional, private rights sense—“one of
property, one arising out of contract, one protected against
tortious invasion, or one founded on a statute which con-
fers a privilege.” 406 F2d at 840 (quoting Tennessee Electric
Power Co. v. TVA, 306 US 118, 137-38, 59 S Ct 366, 83 L Ed
548 (1939)).

On review of the Eighth Circuit’s decision, the
United States Supreme Court rejected that “legal interest”
requirement and the associated private rights model as
appropriate criteria for standing under the APA. Ass’n of
Data Processing Service Organizations, Inc. v. Camp, 397 US
150, 90 S Ct 827, 25 L Ed 2d 184 (1970). It held that, instead,
to satisfy the “case or controversy” requirement of Article ITI
of the United States Constitution, an “injury in fact” was
required. In addition, the question of standing concerned.

“whether the interest sought to be protected by the com-
plainant is arguably within the zone of interests to be pro-
tected or regulated by the statute or constitutional guar-
antee in question. Thus the Administrative Procedure Act
grants standing to a person ‘aggrieved by agency action
within the meaning of a relevant statute.” That interest,
at times, may reflect ‘aesthetic, conservational, and recre-
ational’ as well as economic values.”

397 US at 153 (citations omitted). The court explained why
that broader concept of standing is particularly fitting for
claims that specific governmental actions are contrary to

560 Po

statute: “Where statutes are concerned, the trend is toward
enlargement of the class of people who may protest adminis-
trative action. The whole drive for enlarging the category of
aggrieved ‘persons’ is symptomatic of that trend.” Id. at 154.

Thus, after finding that the plaintiff had satisfied
what the court identified as the “case or controversy” require-
ment of Article III of the United States Constitution—injury
in fact—by showing it had lost revenue because of the activ-
ities that the Comptroller’s ruling allowed, the Supreme
Court in Data Processing applied a “zone of interest” test to
the plaintiff's asserted interests. It concluded that the plain-
tiff’s interest in precluding banks from competing against
it in its business of providing a nonbanking service to both
banks and consumers arguably was within the zone of inter-
ests protected by the Bank Service Corporation Act of 1962,
76 Stat 1132, 12 USC section1864, which limits the services
that bank service corporations can perform. The plaintiff
therefore had standing to bring its action. Id. at 157-58.

After Data Processing, some lower federal courts
began to apply the zone of interests test as a general restric-
tion on standing in all public law cases, identifying it as a
general “prudential” requirement. See, e.g., Idaho v. ICC,
35 F3d 585, 590 (DC Cir 1994) (applying zone of interest
requirement in examining standing to bring claims under
Endangered Species Act); Mount Graham Red Squirrel v.
Espy, 986 F2d 1568, 1581 (9th Cir 1993) (applying zone of
interest test to Arizona-Idaho Conservation Act; Dan Caputo
Co. v. Russian River County Sanitation Dist, 749 F2d 571,
574 (9th Cir 1984) (applying zone of interest test to citizen
suit provision of Clean Water Act).® Notably, when used in
contexts other than the APA, the test often had the effect
of constricting, rather than enlarging, the category of per-
sons who otherwise would have standing under the relevant

° Other courts, including the United States Supreme Court on some occa-
sions, declined to apply the zone of interest test outside of the APA context.
See, e.g., Wyoming v. Oklahoma, 502 US 437, 112 S Ct 789, 117 L Ed 2d 1 (1992)
(in ‘Commerce Clause challenge brought by the State of Wyoming against
Oklahome’s statute requiring coal burning utilities to use 10 percent Oklahoma
coal, Wyoming was found to have standing based on an injury in fact—falling tax
revenues from coal sales—without any consideration of whether that tax effect
was within the zone of interests protected by the Commerce Clause).

Po 561

statute: Statutes by their terms might give unrestricted
access to a cause of action, but application of the zone of
interest test meant that only persons with certain types of
interests would be deemed to have standing. At one point,
the Supreme Court explained that, although the zone of
interest test in fact was a generally applicable prudential
requirement, Congress could legislatively negate its appli-
cation by broadly defining the class of persons who were
entitled to sue under the statute. Bennett v. Spear, 520
US 154, 163-64, 117 S Ct 1154, 1387 L Ed 2d 281 (1997)
(declining to apply zone of interest test to limit standing
under Endangered Species Act to persons alleging ecological
interests, because statute provides for action by “any per-
son”). The Court justified that theory of legislative negation
with a presumption that Congress legislated “against the
background of our prudential standing doctrine.” Id. at 163.

More recently, however, in Lexmark International,
Ine. v. Static Control Components, Inc., 527 US ___, 184 S Ct
1877, 188 L Ed 2d 392 (2014), the Supreme Court rejected
the characterization of the zone of interest requirement as a
prudential doctrine and suggested that it is best understood
as an inquiry into statutory intent—“whether a legislatively
conferred cause of action encompasses a particular plain-
tiffs claim.” 527 US at ___, 184 S Ct at 1387. Although the
Court in Lexmark formally acknowledged the idea of legisla-
tive negation, it ultimately concluded that the zone of inter-
est test would apply even when the statute at issue, when
“read literally,” seemed to allow anyone who was “factually
injured” to sue. 134 S Ct at 1388. Thus, it appears that,
at least in the federal courts, the zone of interest test has
evolved into the presumed test by which a court determines
whether a party has standing and that that presumption
can rarely, if ever, be overcome.

A LEGALLY RECOGNIZED INTEREST IS REQUIRED

Having set out that brief history of the zone of
interest requirement in federal standing law, we turn to the
question of whether and how that requirement might relate
to a question of standing under our declaratory judgment
act. As an initial matter, we can dismiss outright the idea
that the requirement is specifically one of “federal law[] ***

562 po

on the subject of declaratory judgments,’ with which, under
ORS 28.150, we must attempt to harmonize Oregon’s declar-
atory judgment statute. The foregoing history clearly shows
that the requirement is a matter of general federal standing
jurisprudence.

To the extent that the city is suggesting that Oregon
might have a similar general standing rule, applicable to
any statutory cause of action, either as a prudential mat-
ter or based on a presumption that the legislature legislates
against the backdrop of a zone of interest requirement, it
clearly is wrong. This court never has referred to such a
general standing requirement—prudential or otherwise—
in cases where the issue might be expected to arise. And,
in the absence of any statement about the requirement in
our cases, the usual justification for generally applying a
zone of interest requirement also is absent: One cannot pre-
sume that the legislature has been legislating with such a
requirement in mind.

The city suggests that a “zone of interest” require-
ment particular to the declaratory judgment act is implied
by the standing requirement, identified in Morgan, that the
application or interpretation of the law at issue cause “some
injury to or impact upon a legally recognized interest [of the
plaintiff's], beyond an abstract interest in the correct appli-
cation or the validity of [the] law.” 353 Or at 195. The city
thus argues that, when a declaratory judgment claim relies
upon a statute, an interest asserted can only be “legally rec-
ognized” if it is in the zone of interests that the statute seeks
to protect.

The city’s suggestion raises an obvious question:
What did this court mean, in Morgan and other standing
cases under the declaratory judgment act that have used
the term, by a “legally recognized interest?” Id. To begin,
it is evident that the requirement is looking for something
more than a simple “injury in fact”: The injury must be to
an interest that is “legally recognized.” As a general prop-
osition, legal recognition can come from many sources—
statutes, constitutional provisions, regulations, local ordi-
nances, and the historical and evolving common law. Did

| 563

this court in Morgan, as the city suggests, use the phrase
“legally recognized” to refer to something less than that full
range of possibilities when the declaratory judgment action
is directed at a statute? Did we mean that only interests
that are defined or recognized by the self-same statute are
relevant in that context? An examination of our standing
cases under the declaratory judgment act suggests that that
is not the case.

In the two declaratory judgment cases that we have
discussed thus far—Doyle and League of Oregon Cities, the
plaintiffs’ interests that allegedly were affected in fact were
legally recognized by the very statutes about which the
plaintiffs sought declarations. Doyle supports what would
seem to be obvious: that a person whose interests are the
very object of a statute at issue, viz., a person who, in effect,
is the statute’s intended beneficiary, has standing to seek a
declaration as to the statute’s validity, meaning or effects.
League of Oregon Cities shows that a person whose interests
are within the statute’s broader purposes or “zone of inter-
est,” but are not necessarily its direct object, also has stand-
ing to bring a declaratory judgment action with respect to
the statute.

Other cases show, however, that an affected inter-
est may be legally recognized by some source other than
the statute targeted in the declaratory judgment action.
In Eckles, an employer insured by SAIF was found to have
standing to seek declaratory relief with respect to a statute
that transferred SAIF funds to the state’s general fund, on
the theory that he had property rights in the SAIF fund and
that the transfer would impair his insurance contract with
SAIF. 306 Or at 382-86. This court explained that those
property and contract interests, which have their source
in the common law, provided a basis for standing under
the UDJA: “Whatever else may be included in the phrase
‘rights, status or other legal relations’ in ORS 28.020, the
phrase certainly includes property and contract rights.” Id.
at 385. While it might be possible, at this juncture, to craft
an argument that those property and contract rights were
within the broad purposes of the transfer statute at issue
and thus were legally recognized by that statute, the fact

564 po

remains that this court in Eckles expressed no interest in
the question.

And, in Eckles, the court also called attention to
another line of cases in which this court has given legal
recognition to an interest other than an interest within the
broad purposes of the statute at issue—cases in which this
court has declared that a taxpayer’s interest in avoiding
excessive or improper taxes can support standing to seek a
declaration regarding the validity, meaning, or application
of a statute under the declaratory judgment act. Id. at 585.
In one case in that line, Hanson v. Mosser, 247 Or 1, 427
P2d 97 (1967), an unsuccessful bidder on a state contract
sought a declaration that the state’s award of the contract to
another bidder violated a state statute requiring that pub-
lic contracts be awarded to the “lowest responsible bidder.”
The court concluded the unsuccessful bidder had standing
to bring the action as a taxpayer “whose tax burden will be
augmented by unlawful expenditure of public funds.” 247
Or at 11. In another such case, Childs v. Marion County, 163
Or 411, 97 P2d 955 (1940), the court held that a taxpayer
had standing to seek a declaration that defendant govern-
ments were not following a statutorily-required lien foreclo-
sure procedure, because the taxpayer’s tax burden would
be increased by waste arising from improper procedure.
Although this court also has held that a bare allegation of
taxpayer status is insufficient, and that, to have standing,
plaintiffs must allege that they have suffered adverse tax
consequences as a result of the challenged governmental
action,’ this court’s recognition of “taxpayer standing” in
appropriate cases demonstrates the problem with the city’s
argument here. This court has not limited standing to those
instances in which plaintiffs can demonstrate that they are
the direct object of, or in which their asserted interests fall
within the broader purposes of, the statutes that they place
at issue. Rather, this court has recognized both that stand-
ing to challenge a statute under the declaratory judgment
act extends to all who allege and ultimately can demonstrate
a legally recognized interest that is affected by the relevant

7 See Gruber v. Lincoln Hospital District, 285 Or 3, 8-9, 588 P2d 1281 (1970)
(without demonstrating how agreement affected tax liability, taxpayer did not
have standing to seek invalidation of hospital service agreement).

Po 565

statute, and that legal recognition can come from a variety
of sources, not only from the statute under consideration.

PLAINTIFF’S INTEREST IS NOT
LEGALLY RECOGNIZED

With that understanding, we now must consider
whether the interest that plaintiff relied on in this case so
qualifies. Plaintiff essentially alleged and, in response to
the city’s motion for summary judgment offered evidence
of, a competitive injury—that it was adversely affected by
the city’s misapplication of the social gaming statutes “in
that a significant portion of its patrons and customers have
stopped attending plaintiffs lawful operation, and have
elected to attend and participate in the unlawful operations
of the establishments granted permits by the city.”

Plaintiff has not, however, identified any basis for
concluding that that injury affects an interest that is legally
recognized within the meaning of the standing requirements
set out in Morgan. First, Oregon’s social gaming laws do not
seek to protect, or otherwise “recognize,” such an interest.
As the city correctly asserts, “Oregon’s gambling statutes,
and Portland’s social gaming ordinance, are not intended to
protect out-of-state gambling operations *** against compe-
tition from locally-licensed social games.” Second, no prin-
ciple in Oregon’s common-law tradition appears to protect
that particular competitive interest.®

As to other possibilities beyond those traditional
sources for legal recognition of the asserted competitive
interest, plaintiff has failed to sufficiently develop an argu-
ment that we find persuasive. Although this court’s deci-
sion in Hanson and certain Court of Appeals’ decisions may
suggest that some interests in fair competition (i.e., com-
petition on equal terms) might support standing under
the declaratory judgment act,° plaintiffs asserted interest

8 There are common-law principles that might be said to give legal recogni-
tion to certain, more specific competitive interests—those relating to, for exam-
ple, trademark infringement, business defamation, and the like. None of those
are relevant to the present case.

® The Court of Appeals appeared to recognize an interest in fair and equal
competition as sufficient to support standing under the declaratory judgment act

or

here is not such an interest. Instead, plaintiff's asserted
interest is anti-competitive: Plaintiff seeks an interpre-
tation of Oregon’s gambling and social gaming laws that
would allow it to maintain the competitive advantage
that it enjoyed when, under Washington law, it could con-
duct betting games that its competitors, operating under
the constraints of Oregon law, could not obtain permits to
conduct.

For the reasons stated, we agree with the trial
court’s and Court of Appeals’ ultimate conclusion that plain-
tiff lacked standing to bring this action. However, to reit-
erate, we base our conclusion on different reasoning. We
reject the idea that, to establish standing to seek a decla-
ration about a statute’s validity, meaning, or effect, a plain-
tiff must show that it is subject to the statute or that its
alleged interests are within the zone of interests that the
statute seeks to protect. Rather, to have standing to seek a
declaration with respect to a statute, a plaintiff must show
that it has a “legally recognized interest” that is adversely
affected by the statute. Morgan, 353 Or at 372. An affected
interest may be legally recognized by the very statute at
issue in the declaratory judgment action, but it also may be
legally recognized by other sources. In this case, plaintiff
lacked standing to seek a declaration about the meaning of
Oregon's social gaming statutes because it failed to assert
or sufficiently develop an argument that its interest in the

in Associated Reforestation Contractors, Inc v. Workers’ Compensation Bd., 59 Or
App 348, 650 P2d 1068 (1982), and Thunderbird Motel v. City of Portland, 40 Or
App 697, 596 P2d 994 (1979). In Associated Reforestation Contractors, a trade
association of reforestation companies sought a declaratory judgment that the
defendant, a reforestation cooperative, was subject to the same workers’ compen-
sation laws that burdened the trade association's members. The Court of Appeals
concluded that, insofar as the defendant cooperative’s avoidance of workers’ com-
pensation insurance costs had allowed it to underbid the trade association’s mem-
bers on reforestation contracts, the trade association had a “right, status, or other
legal relation” that was affected by the workers’ compensation laws and, thus, it
had standing to bring the declaratory judgment action. 59 Or App at 351-52. In
Thunderbird Motel, the Court of Appeals held that a hotel’s interest in preventing
anewly constructed competitor hotel from enjoying special advantages conveyed
to it in a contract with the City of Portland was one that would support the hotel’s
standing to seek a declaration that the contract with the city violated Article XI,
section 9, of the Oregon Constitution. 40 Or App at 700-03. Those cases do not
assist plaintiff here, because the interest that plaintiff asserts is essentially
anti-competitive.

Po 567

interpretation of those statutes is an interest that is legally
recognized by any source.!?

The judgment of the trial court and the decision of
the Court of Appeals are affirmed.

2 Plaintiff obliquely suggests that, in any event, it has standing to seek a
somewhat different declaration—that plaintiff may apply for and obtain a per-
mit from the city to operate a card room in Portland on the same terms that
city social gaming permittees have been operating. However, as described above,
plaintiff did not include a prayer for that declaration in its original complaint, but
moved for permission to add it in an amended complaint, which motion the trial
court denied. In the absence of any argument that the trial court’s denial of the
motion to amend was an abuse of discretion, we will not consider that issue and,
thus, have no reason to consider whether plaintiff's alternative prayer for relief
provided a basis for standing.

569

Argued and submitted June 15, decision of Court of Appeals reversed, judgment
of circuit court reversed, and case remanded to circuit court for further
proceedings November 17, 2016, petition for reconsideration allowed by opinion
February 2, 2017
See 360 Or 807, 388 P8d 1108 (2017)

John B. WELS, Jr.,

Respondent on Review,
v
Douglas W. HIPPE,
Defendant,
and
Le Roy HIPPE

and Cheryl Hippe,

Petitioners on Review.
(CC 101215E3; CA A150238; SC S063486)

385 P3d 1028

Clayton C. Patrick, Clatskanie, argued the cause and
filed the brief for petitioners on review.

John R. Hanson, Medford, argued the cause and filed the
brief for respondent on review. Also on the brief was Tracey
R. Howell.

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570 a

Before, Balmer, Chief Justice, and Kistler, Walters, Landau,
Baldwin, and Brewer, Justices, and DeHoog, Justice pro
tempore.**

LANDAU, J.

The decision of the Court of Appeals is reversed. The
judgment of the circuit court is reversed, and the case is
remanded to the circuit court for further proceedings.

*t Nakamoto, J., did not participate in the consideration or decision of this
case.

ee

LANDAU, J.

Plaintiff seeks a prescriptive easement over an
existing road that crosses defendants’ property. To estab-
lish a prescriptive easement, the law requires (among other
things) that plaintiffs use of the road was adverse to the
rights of the owners of the property. The dispute in this case
is whether plaintiff satisfied the requirement to prove such
adverse use. The trial court found that plaintiff did establish
adverse use of the road in either of two ways. First, it found
that plaintiff showed that his use of the road interfered with
defendants’ rights, in that defendants could see vehicles
passing in close proximity to their house. Second, and in the
alternative, the court found that plaintiff established adver-
sity through testimony that he believed—although without
communicating that belief to defendants—that he had the
right to use the road without defendants’ permission. The
Court of Appeals affirmed. Wels v. Hippe, 269 Or App 785,
347 P3d 788 (2015).

‘We conclude that the trial court and the Court of
Appeals erred. To establish that the use of an existing road
is adverse, a plaintiff must show that the use of the road
interfered with the owners’ use of the road or that the use of
the road was undertaken under a claim of right of which the
owners were aware. In this case, there is a complete absence
of evidence in the record of either of those things. We there-
fore reverse the decision of the Court of Appeals and the
judgment of the trial court.

The relevant facts are not in dispute. Plaintiff owns
three contiguous parcels of rural property near the Rogue
River. He purchased the parcels in 1998. The nearest state
highway, the Crater Lake Highway, is located some distance
away. In between plaintiff's property and the highway lie
federally owned forest lands and a number of private par-
cels. Defendants own one of those private parcels, a 20-acre
lot, where they have lived since 1973.

A private dirt road, known as “Lewis Creek Road,”
runs from plaintiffs property across the federally owned for-
est land and the intervening private parcels, eventually con-
necting to another private road and, ultimately, the highway.

512 as

Lewis Creek Road crosses defendants’ property and passes
within 60 to 80 feet of their house. No one knows who built
Lewis Creek Road or when it was first constructed, but old
records indicate that it has been in existence since at least
1932. Plaintiff and the other private property owners in the
area have used it to access the Crater Lake Highway.

Private

Federal Land

Po 573

At some point, defendants erected a chain across Lewis
Creek Road where it entered their property. But they left
the chain unlocked and provided keys to neighbors, includ-
ing plaintiff. Plaintiff sometimes performed general main-
tenance of the road, including dragging an iron bar behind
his truck to level the road. On one occasion, he asked defen-
dants for permission to trim the brush alongside the road,
and defendants agreed. Plaintiff’s use of Lewis Creek Road
across defendants’ property caused some dust and vehicle
noise, but defendants did not believe that it interfered with
their use of the road or of their land.

In 2008, plaintiff decided to build a cabin on his
property. The county, however, would not issue the neces-
sary permits unless he obtained written confirmation of
his right to use Lewis Creek Road for access to the Crater
Lake Highway. Plaintiff tried to obtain written easements
from each of the private property owners over whose prop-
erty Lewis Creek Road ran. He succeeded in obtaining
easements from some of the private property owners, but
not from defendants. Plaintiff then initiated this action for a
declaration that he had acquired a prescriptive easement to
use the part of Lewis Creek Road on defendants’ property.
Plaintiff advanced no other theory in support of his right to
use the road.

In his trial memorandum, plaintiff asserted that
he had used Lewis Creek Road for access to his property
openly, notoriously, and continuously from the time he pur-
chased the property in 1998. He further asserted that he
thought he had the right to do so without defendants’ per-
mission and thus had acquired an easement to use the road
by prescription.

In response, defendants’ trial memorandum “con-
cede[d] that plaintiff has used the roadway open and notori-
ously. Defendants dispute[d] that plaintiffs use ha[d] been
adverse.” Defendants argued that, in other words, although
plaintiff's use of the road may have been obvious, it was
permissive. In support, defendants asserted that, when a
prescriptive easement claim involves the nonexclusive use
of an existing road, such use is presumed to have been per-
missive, and anyone claiming otherwise must establish that

574 |

their use of the existing road interfered with the owner's use
of it. In this case, defendants argued, there was no evidence
that plaintiff's use of Lewis Creek Road interfered with
their own use of the same road.

In their opening statement, defendants elaborated
on that line of argument:

“And it’s presumed if he used open and notoriously then
it was adverse. And so we think that he’s got that pre-
sumption going in. If that presumption exists, it’s up to the
defendants to rebut that with—by showing that his use
was of an existing road, did not interfere with defendants’
use of the road and—and it was not exclusive. His use was
not exclusive if others used the road, like the defendants
or others. And if defendants can rebut those three pieces,
[plaintiff] still has to come up with some other way to prove
adversity by clear and convincing evidence. And I don’t
think he’s got that.”

In his opening statement, plaintiff acknowledged
that what was in dispute was whether, in light of his nonex-
clusive use of Lewis Creek Road, his use nevertheless was
“open and notorious and hostile or adverse.” His position
was that he had satisfied all those requirements because,
during the years that he used the road, he “never received
anything like permission,” that he “always assumed that
[Lewis Creek Road] was his access,” and that “[h]e had a
right to use it.”

At trial, two witnesses testified—plaintiff and
defendant Douglas Hippe—establishing the foregoing facts.
Following the trial, the court issued a written opinion ruling
for plaintiff. The court explained that, in cases involving the
use of an existing road, there is a presumption that such use
was not adverse, but instead was permissive. Nevertheless,
the court explained, that presumption could be rebutted
with evidence either that plaintiffs use “interfered with
[d]efendant’s right on his property” or that plaintiff mistak-
enly thought that he had the right to use the road without
defendants’ permission. In this case, the court concluded,
plaintiff established both. As the trial court saw it, evidence
that plaintiff's vehicles passed in “close proximity” to defen-
dants’ house interfered with defendants’ rights to use their

575

property, and, in any event, it was undisputed that plaintiff
mistakenly thought that he had the right to use the road.

Defendants appealed. They argued that the trial
court erred in concluding that plaintiff had rebutted the
presumption of permissive use for two reasons. First, defen-
dants argued that the trial court erred in relying on evi-
dence that plaintiffs vehicles passed in close proximity to
their house, presumably referring to testimony that such
use kicked up dust and made noise. That evidence, defen-
dants argued, was not sufficient, because noise and dust
“did not interfere with defendants’ use” of the road. Second,
defendants argued that the trial court also erred in relying
on plaintiff’s uncommunicated, subjective belief that he had
the right to use Lewis Creek Road without their permission.
As defendants put it, merely “[t]hinking you have a right to
use a road-is not sufficient” to establish adverse use.

The Court of Appeals affirmed. In so doing, the court
did not address whether the trial court erred in concluding
that evidence of dust and noise from plaintiff’s use of the
road was sufficient to rebut the presumption of permissive
use. Rather, it focused on the question whether plaintiff’s
mistaken belief that he had the right to use Lewis Creek
Road was adequate to rebut that presumption. Relying on
the Restatement (First) of Property § 458 (1944), the court
explained that “adverse” use has three elements: (1) it is
not made in subordination to the owner; (2) it is wrongful
as to the owner; and (3) it is open and notorious. Wels, 269
Or App at 795-96. The court noted that there was no dis-
pute that plaintiff’s use was wrongful and defendants had
“conceded” that plaintiff's use was open and notorious. Id.
at 797 n 4. So, the court explained, the only issue in dispute
was whether plaintiff's use was made in subordination to
defendants’. Relying on the unrebutted evidence that plain-
tiff used Lewis Creek Road under the mistaken belief that
he had a right to do so without defendants’ permission, the
court concluded that there was evidence sufficient to support
the trial court’s determination that plaintiff had established
that his use was adverse. Id. at 802-04.

The court’s decision was not unanimous. The dis-
sent took the majority to task for framing the issue as it

516 |__|

did, in terms of the three elements set out in a comment
to the Restatement (First) of Property. According to the dis-
sent, that definition of “adverse” use has never been adopted
by this court, and it cannot be reconciled with subsequent
Supreme Court and Court of Appeals case law. Jd. at 827-31
(DeVore, J., dissenting). In the view of the dissent, the use
of an existing road gives rise to a presumption that the use
was permissive, and an uncommunicated belief in a right
of use cannot suffice td rebut that presumption. Id. at 814-
23 (DeVore, J., dissenting). The dissent contended that the
majority’s reliance on defendants’ “concession” that plain-
tiff’s use was open and notorious in resolving that issue was
unwarranted; defendants conceded only that plaintiff's use
was obvious, not that it was adverse in character. Id. at 824
(DeVore, J., dissenting). That left, the dissent said, the ques-
tion whether plaintiff used Lewis Creek Road in a manner
that interfered with defendants’ own use of the road. As the
dissent saw it, the record was uncontradicted that, at best,
plaintiff's use of the road caused dust and noise, but did not
in any way interfere with defendants’ use of the road. Id. at
841-42 (DeVore, J., dissenting).

A concurring opinion agreed with the dissent that
the trial court erred in concluding that the evidence showed
that plaintiff’s use of the road interfered with defendants’.
The concurrence nevertheless joined the majority on the
ground that defendant’s concession that plaintiffs use was
open and notorious eliminated any concern about whether
plaintiffs mistaken claim of right ever was communicated.
to defendants. Id. at 804-12 (Lagesen, J., concurring).

We allowed review to address the elements of a
claim for a prescriptive easement to use an existing road.
We begin with some familiar legal principles. An easement
is an interest in another’s land, which grants its owner a
right of limited use or enjoyment. ODOT v. Alderwoods
(Oregon), Inc., 358 Or 501, 512, 366 P3d 316 (2015) (An
easement is “‘a nonposessory interest in land because it
generally authorizes limited uses of the burdened property
for a particular purpose.” (Quoting Restatement (Third) of
Property: Servitudes § 1.2 comment d (2000).)); see also ORS
105.170(1) (“Easement means a nonpossessory interest in
the land of another which entitles the holders of an interest

PF 577

in the easement to a private right of way.”). Because it is an
interest in land, an easement ordinarily must be created in
writing. Shaw v. Profitt, 57 Or 192, 214, 110 P 1092 (1910)
(“The rule is that an easement can only be created by writ-
ing.”). There are exceptions to that general rule, however.
One is that easements may be created by prescription; that
is, easements may be created through use over time and the
operation of law.

The origin of prescription is a matter of some debate.
Historically, it has been tied to the idea of a fictional “lost
grant”—that long use must have originated in an early, but
lost, lawful grant of the right—or to an analogy to statutes
of limitations that apply to the related doctrine of adverse
possession. See generally Restatement (Third) of Property:
Servitudes § 2.17 comment b (2000) (discussing historical and
theoretical bases of prescription). Whatever the doctrine’s
origins, its principal justification has been that “established
patterns of land possession and use should be protected and
that a diligent occupant should be rewarded at the expense
of a careless owner.” Jon W. Bruce & James W. Ely, Jr., The
Law of Easements and Licenses in Land § 5:1, 5-5 (2008);
see also Restatement (Third) § 2.17 comment c (“Prescription
doctrine *** penalizes the property owner who sleeps on
his or her rights.”). A critical underpinning of the doctrine
thus is that the owner of land against whom a prescriptive
easement is being claimed must have reason to know of the
adverse use of his or her property before being held respon-
sible for failing diligently to take action to protect it. As the
court explained in Feldman v. Knapp, 196 Or 453, 473, 250
P2d 92 (1952),

“[t]he foundation of the establishment of a right by pre-
scription is the acquiescence on the part of the owner of
the servient tenement in the acts which are relied upon
to establish the easement by prescription. This makes it
necessary that he know of those acts, or be charged with
knowledge of them if he did not in fact know of them.”

Accordingly, this court has held that not just any use
will suffice to establish a prescriptive easement. The plain-
tiff “must establish an open and notorious use of defendants’
land adverse to the rights of defendants for a continuous
and uninterrupted period of ten years**-Phompson v. Scott,

578 je

270 Or 542, 546, 528 P2d 509 (1974). Moreover, prescriptive
easements are not favored by the law. Wood v. Woodcock, 276
Or 49, 56, 554 P2d 151 (1976). After all, the doctrine permits
one person to acquire an interest in land without paying the
owner for it. See Bruce & Ely, The Law of Easements and
Licenses in Land § 5:3 at 5-11 (“Courts carefully scrutinize
claims of easement by prescription because the recognition
of such a servitude is inconsistent with the right of the ser-
vient owner to fully utilize the servient land.”). As a result,
the law requires that the elements of a prescriptive ease-
ment claim be established by clear and convincing evidence.
Williams v. Harrsch, 297 Or 1, 6, 681 P2d 119 (1984).

Whether a plaintiff has established the requisite
open and notorious use of another’s land adverse to the other’s
interest for the requisite period is a question of fact. His-
torically, because of the equitable nature of a prescriptive
easement claim, appellate review of the trial court’s find-
ings concerning the elements of the claim has been de novo.
Boyer v. Abston, 274 Or 161, 163-64, 544 P2d 1031 (1976).
In 2009, however, the legislature amended ORS 19.415(3)
to provide that de novo review in such equity cases is now
discretionary. In this case, the Court of Appeals declined
to exercise discretion to review this case de novo. Wels, 269
Or at 787. Accordingly, assuming the trial court applied the
correct legal standards, its findings of historical fact will be
upheld if there is any evidence to support them. Sea River
Properties, LLC v. Parks, 355 Or 831, 834, 333 P3d 295
(2014).

With those more general principles in mind, we
turn to the particular elements of a prescriptive easement
claim. Use qualifies as “open and notorious” if it provides
the landowner with “a reasonable opportunity to learn of its
existence and nature.” Thompson v. Schuh, 286 Or 201, 211,
593 P2d 1138 (1979). The purpose of that requirement “is
to give the owner of the servient estate ample opportunity
to protect against the establishment of prescriptive rights.”
Restatement (Third) § 2.17 comment h.

Use is “adverse” if it is inconsistent with the owner’s
use of the property or if it is undertaken not in subordina-
tion to the rights of the owner. Cf: Faulconer v. Williams, 327

pe 579

Or 381, 389, 964 P2d 246 (1998) (discussing “adverse” use
in context of extinguishment of easement by adverse pos-
session). Use by permission is not adverse. See, e.g., Baum
v. Denn, 187 Or 401, 406, 211 P2d 478 (1949) (“A prescrip-
tive easement can never ripen out of mere permissive use no
matter how long exercised.”).

It is often stated that open and notorious use for the
prescribed period gives rise to a rebuttable presumption of
adverse use. See, e.g., Coventon v. Seufert, 23 Or 548, 550-
51, 32 P 508 (1898) (“[I]f there has been an uninterrupted
use and enjoyment of an easement in a particular way for
more than ten years, it affords a *** presumption of right
in the party who shall have enjoyed it.”). That rule applies in
ordinary cases, in which the person claiming the easement
by prescription is a stranger to the landowner; under such
circumstances, it makes sense to assume that obvious use
of the owner’s property is adverse to his or her rights. But
the rule does not apply in all cases; in particular, when the
nature of the land or the relationship between the parties is
such that the use of the owner’s property is not likely to put
the owner on notice of the adverse nature of the use.

When, for example, an owner supplies permission
to use a road across the owner's property, use in accordance
with that permission will not give rise to a presumption that
it is adverse; there must be proof that the claimant repudi-
ated the owner's permission and communicated that repudi-
ation to the owner. Hamann v. Brimm, 272 Or 526, 529-30,
587 P2d 1149 (1975). As this court explained in Thompson
v, Scott, “[w]hen the use of the servient owner's land is per-
missive at its inception, the permissive character of the use
is deemed to continue thereafter unless the repudiation of
the license to use is brought to the knowledge of the servient
owner.” 270 Or at 548-49.

Similarly, when a claimant uses a road that the
landowner constructed or that is of unknown origin, the
claimant’s use of the road—no matter how obvious—does
not give rise to a presumption that it is adverse to the owner.
As the court explained in Woods v. Hart, 254 Or 434, 436,
458 P2d 945 (1969), in such cases, “it is more reasonable to
assume that the use was pursuant to a friendly arrangement

580 |

between neighbors rather than to assume that the user was
making an adverse claim.” See also Trewin v. Hunter, 271
Or 245, 248, 5381 P2d 899 (1975) (Gif claimant and servient
owner use an existing way of unknown origin, “it should
be presumed that the servient owner constructed it for his
own use” and that the claimant’s use is permissive). That is
especially the case when the use of the road by the claimant
is nonexclusive. Boyer, 274 Or at 163-64.

When a claimant uses a preexisting road, the
claimant must affirmatively establish that his or her use of
the road is adverse. Thompson v. Scott, 270 Or at 551 (“the
claimant must affirmatively prove the adverse character of
his behavior”). Such adverse use may be demonstrated by
clear and convincing evidence that the claimant’s use of the
road interfered with the owner’s own use of the road. Boyer,
274 Or at 163-64. It bears some emphasis that the focus is
on the extent to which the claimant’s use interfered with the
owner’s own use of the road, not on the extent to which the
claimant’s use of the road somehow interfered with the own-
er’s use or enjoyment of the property generally. It is only by
interfering with the owner's use of the road that the claim-
ant puts the owner on notice of the adverse character of his
or her use. As the court emphasized in Feldman, to establish
that the use of a road is adverse, there must be evidence of
acts “of such nature and frequency as to give notice to the
landowner of the right being claimed against him.” 196 Or
at 473.

The adverse character of the use of a preexisting
road also may be established by evidence that the claimant
used the road under a claim of right. Hay v. Stevens, 262
Or 193, 196, 497 P2d 362 (1972). It is not sufficient, how-
ever, for a claimant merely to believe that he or she has the
right to use a road. There must be evidence that the owner
of the property knew or should have known of that belief.
Davis v. Gassner, 272 Or 166, 169, 535 P2d 760 (1975), pro-
vides an example of use under a claim of right. In that case,
the plaintiffs sought a prescriptive easement of an exist-
ing road. Their use was nonexclusive. The court neverthe-
less concluded that they had demonstrated that their use
was adverse, based on evidence that, when the defendant
had attempted to stop them by stringing a wire across the

pe 581

road, the plaintiffs cut the wire and used the road any-
way. Moreover, they complained to the defendant about his
attempts to interfere with their right to use the road. Id. at
168-69.

Having set out the elements of a prescriptive ease-
ment claim, we turn to the question whether there is evi-
dence to support the trial court’s findings that plaintiff sat-
isfied them. At the outset, we note that it is undisputed that
plaintiff did not construct Lewis Creek Road. The road is of
uncertain origin and existed long before plaintiff acquired
his property. It is likewise undisputed that plaintiff's use of
the road was nonexclusive. In fact, all of the property own-
ers along the road used it for access to and from the Crater
Lake Highway.

Because plaintiff's prescriptive easement claim is
based on his nonexclusive use of a preexisting road, the bur-
den rests with him to establish by clear and convincing evi-
dence that his use of the road was adverse. The trial court
found that plaintiff met his burden by producing evidence
that his use of the road created noise and dust that could be
viewed or heard by defendants from their house some 60 to
80 feet from the road. That evidence is insufficient. It does
not establish that plaintiff's use of Lewis Creek Road in any
way interfered with defendants’ use of the same road. In
fact, there is a complete lack of evidence that anything that
plaintiff did interfered with defendants’ use of the road.

The trial court also found that plaintiff met his
burden through testimony that he believed that he had
the right to use Lewis Creek Road without any permission
from defendant. As we have noted, however, an uncommu-
nicated belief in a right to use property provides no notice
to the owner of such a belief. It therefore cannot satisfy the
essential requirement of adverse use, that is, that it inform
the owner of the servient property that the claimant is
asserting a right of use hostile to the rights of that owner.
If a claimant who is engaging in nonexclusive use of a pre-
existing road fails to communicate his or her belief in a right
to do so, there is no way for the owner to know that the
claimant is asserting a right hostile to the owner’s. As the
court observed in Woods, “‘the fact that [the owner] sees his

582 |

neighbor also making use of it, under circumstances that
in no way injures the road, or interferes with his own use
of it, does not justify the inference that he is yielding to his
neighbor’s claim of right or that his neighbor is asserting
any right’” 254 Or at 487-38 (quoting Anthony v. Kennard
Bldg. Co., 188 Mo 704, 723-24, 87 SW 921 (1905)).

The Court of Appeals concluded that the absence of
any evidence that plaintiff communicated his belief that he
had a right to use the road is no impediment to his prescrip-
tive easement claim, because, according to the Restatement
(First) of Property, an adverse use must be open and notori-
ous, and defendants “conceded” that plaintiff's use of Lewis
Creek Road was open and notorious. The Court of Appeals
erred in reaching that conclusion.

To begin with, it is not entirely clear that the way
that the Restatement (First) of Property sets out the elements
of a prescriptive easement claim is consistent with the way
that this court has set out the elements of the claim. The
Court of Appeals itself noted that point in observing that,
although this court has emphasized that, to support a pre-
scriptive easement claim, use of another’s property must be
open and notorious, the Restatement (First) of Property rel-
egates that consideration to an aspect of the adverse char-
acter of a claimant’s use. Wels, 269 Or App at 795 n 3. The
concurrence similarly noted that the description of what con-
stitutes “adverse” use in the Restatement (First) of Property
appears to be different from the way this court’s cases
describe such use. Wels, 269 Or App at 811 n 6 (Lagesen, J.,
concurring). To the extent that there is any inconsistency
between a restatement of law and this court’s case law, the
latter—not the former—controls.

Aside from that, although this court has referred
to a particular section of the Restatement (First) of Property
or to a particular comment in some of its prior decisions,
e.g., Thompson v. Schuh, 286 Or at 211 (citing Restatement
(First) of Property § 458 comment i); Hay, 262 Or at 196 (cit-
ing Restatement (First) of Property § 458 comment c), that
does not necessarily mean that it has endorsed all of that
particular restatement’s provisions and comments or that
the court is constrained to ignore later developments in the

Po 583

case law. See, e.g., Jones v. Mitchell Bros. Truck Lines, 273
Or 430, 433, 541 P2d 1287 (1975) (declining to follow earlier
version of Restatement of Judgments).

Finally, we do not agree that defendants, by using
the phrase “open and notorious” in reference to plaintiff's
use of the road, effectively conceded that plaintiff's use was
adverse. As we have noted, defendants’ trial memorandum
used that phrase in describing the proper method of analysis
in light of the case law that we have described. The mem-
orandum asserted that, although open and notorious use
ordinarily triggers a presumption that the use is adverse,
this is not such a case. Defendants argued, both in their trial
memorandum and in their opening statement, that because
plaintiff in this case engaged in nonexclusive use of an exist-
ing road, plaintiff “still has to come up with some other way
to prove adversity by clear and convincing evidence. And I
don’t think he’s got that.” Defendants’ entire case at trial, in
fact, was that plaintiff's use of Lewis Creek Road was not
of the sort that would put them on notice as to the adverse
nature of that use. And that, as we have also noted, is pre-
cisely how plaintiff understood defendants’ arguments.

To summarize: The undisputed evidence shows that
plaintiff engaged in nonexclusive use of the existing Lewis
Creek Road. To prevail on his prescriptive easement claim,
therefore, he must supply clear and convincing evidence that
his use of the road was adverse. There is a complete absence
of evidence in the record that plaintiff did so. Evidence that
his use of the road may have caused dust and noise is legally
insufficient; such evidence does not demonstrate any inter-
ference with defendants’ own use of the road. And evidence
that plaintiff believed that he had a right to use the road
without defendants’ permission likewise is legally insuf-
ficient, in the absence of evidence that he communicated
that belief to defendants. The trial court therefore erred
in finding for plaintiff on his prescriptive easement claim,
and the Court of Appeals erred in affirming the trial court’s
judgment.

The decision of the Court of Appeals is reversed.
The judgment of the circuit court is reversed, and the case
is remanded to the circuit court for further proceedings.

584

Argued and submitted September 22, decision of Court of Appeals reversed,
judgment of circuit court affirmed November 17, 2016

STATE OF OREGON,
Petitioner on Review,

v.
LANE EDWARD JESSE,
Respondent on Review.
(CC C110695CR; CA A153759; SC S063856)
385 P3d 1063

Peenesh Shah, Assistant Attorney General, Salem,
argued the cause and filed the brief for petitioner on review.
Also on the brief were Ellen F. Rosenblum, Attorney General,
and Benjamin Gutman, Solicitor General.

Neil F. Byl, Deputy Public Defender, Salem, argued the
cause and filed the brief for respondent on review. Also on
the brief was Ernest G. Lannet, Chief Defender, Office of
Public Defense Services.

BREWER, J.

The decision of the Court of Appeals is reversed. The
judgment of the circuit court is affirmed.

Po 585
BREWER, J.

The issue on review following defendant’s conviction.
for first-degree sexual abuse is whether the trial court erred
in excluding from evidence at trial, on the ground that it
was not helpful to the jury, expert testimony that defendant
proffered in support of his theory that certain statements
that he had made were not, in fact, actual confessions of
guilt. OEC 702.1 Because we conclude that the trial court
did not err in excluding the proffered testimony, we affirm
defendant’s conviction.

I. FACTS AND PROCEDURAL HISTORY

Defendant was indicted in April 2011 on one count
of first-degree sexual abuse, based on an allegation that
he knowingly subjected his daughter M to sexual contact.
Because defendant argues that the excluded expert testi-
mony would have helped explain his own statements that
the state characterized as confessions of guilt, we describe
those statements in detail.

A. Statements that the State Claimed Were Confessions to the
Charged Offense

1. Defendant’s initial disclosure to S

Defendant and his wife, S, were married for eight
years and have two children, M and L. M was four years old
in November 2009, when S returned home from work one
morning and found defendant extremely upset. As S later
described the discussion, defendant told her that she would
never forgive him, handed over his wedding ring, and then
told her that he had touched M over her diaper. S testified
that defendant also said that he had been thinking about
touching the children for some time and that he was worried
about “turning into his [own] family.” According to S, defen-
dant said that “he belonged in prison and to call the police
right now.” S did not call the police, because defendant told

1 ORC 702 provides that,

“[i]f scientific, technical or other specialized knowledge will assist the
trier of fact to understand the evidence or to determine a fact in issue, a
witness qualified as an expert by knowledge, skill, experience, training or
education may testify thereto in the form of an opinion or otherwise”

586 LY

her that M had not awakened and did not know about the
touching, and defendant agreed to leave the house.

2. Signed admission

S agreed to stay married to defendant for a short
time so that he could seek counseling using her health insur-
ance. S testified that she insisted, however, that she “needed
some sort of proof that says that [defendant] did this so that
*+%* he couldn’t come back later and say that he wanted the
kids.” S testified that she wrote the following statement for
defendant to sign:

“I, [defendant], am admitting to touching my oldest daugh-
ter, [M], in an inappropriate way. I went in her room early
in the morning and was tucking her into bed when I ran my
hand over her diaper, over her pubic area. I then walked out
and went to bed. My daughter did not wake up. I have never
done this before. When my wife came home from work, I
told her. She told me to leave and I agreed to that and to
get counseling. I am writing this so my wife, [S,] has proof
for the protection of our children.”

S also testified that she read the document out loud to defen-
dant, and then defendant read and signed it. In his trial tes-
timony, defendant denied that S showed him the document,
and he asserted that his signature was forged.

3. M’s disclosures

S and defendant dissolved their marriage in March
2010. On September 11, 2010, M told S, “Well, one time I
was in bed with daddy and—and he put his hand down my
diaper.” M moved her hand over her pubic area to show S
how defendant had touched her and said that defendant’s
hand was on “her private.” M said that defendant did not
take his hand out, so M pulled his hand out of her diaper. M
told S that she did not tell about the incident sooner because
she was afraid that defendant “would have to go away.” A
few days later, before S called the police, she had M repeat
the story. M’s story was the same except for an added detail
about defendant saying, “I’m sorry.”

M described the incident similarly in a recorded con-
versation during a medical examination on September 20,
2010, and in testimony at trial. The physician did not find any

Po 587

physical signs of abuse, but testified that that was consistent
with an allegation of touching the outside of the vagina.

4. Defendant’s statements to sheriff's deputies

Defendant was arrested on April 3, 2011, and he
was confined in the Washington County Jail. Nearly a year
later, while still in jail and awaiting trial in this case, defen-
dant approached two deputies. According to the deputies,
defendant asked, “What happens if I confess right now?”
The deputies testified that, a few minutes later, defendant
approached them again and said, “I did it. I confess.” A dep-
uty told defendant that the matter was between him and the
courts. Defendant continued to pace the unit, approached the
deputies again, and said (again, as the deputies described
it), “Okay. I touched my daughter. I admit [it]. I’m a jerk.”

B. Dr. Callum’s Pretrial Testimony

Defendant attended 15 counseling sessions with
Dr. Callum, a licensed psychologist, between December
2009 and July 2010, beginning shortly after the date of the
charged offense. Defendant discussed with Callum issues
of anxiety and marital difficulties. According to Callum,
defendant told her that he was concerned about “thoughts”
of touching his children, but assured Callum that he had
“never” acted on the thoughts.

Before trial, the state filed a motion in limine,
based in part on OEC 702, to exclude testimony by Callum
concerning her clinical impressions of defendant. The state
argued that “defendant will not be able [to] establish a
sufficient nexus between [his] actions/behaviors and ***
Callum’s observations, opinions, discussions, recommenda-
tions, or beliefs surrounding her contacts with the defen-
dant.” The state contended that “Callum has not even pro-
vided a formal diagnosis, and if such a diagnosis were to
be provided, *** there is not a satisfactory link that can
be demonstrated between the diagnosis and the material
events that occurred in this case”; thus, her “testimony is
not assistive to the trier of fact and should be excluded.”

The trial court held a pretrial hearing at which
defendant elicited testimony from Callum through an

588 YL

offer of proof. On direct examination, Callum testified that
defendant

“had very low self-esteem. He was also plagued by fears
and many of the cognitions of his childhood, which kept on
just ruminating [in] his head, and those were the fears and
negative thoughts that he was always having. And which
continuously made him wonder if he was okay, what was
wrong with him.”

Based on her clinical observations, Callum testified that
defendant’s “level of rumination” could “definitely lead him
to become obsessive” and, at times, “be unhealthy.” When
Callum was asked whether defendant had “adequate coping
skills and self-esteem to deal with personal issues,” she tes-
tified, “No. No. A lot of the times he—he was very fearful,
and he let *** the rumination of his thoughts plague. He
could not let those things go.”

On cross-examination during the offer of proof,
Callum further explained that she had diagnosed defendant
with an adjustment disorder and related mental health
issues:

“A. [CALLUM]: *** I diagnosed him as adjustment
disorder with depressed mood. And I also diagnosed him
with a trauma related to childhood physical and emotional
abuse. And then the AXIS IV would be (indiscernible) expe-
riencing marital difficulties or extramarital affairs.

“Q. [PROSECUTOR]: What is adjustment disorder?

“A. [CALLUM]: Adjustment disorder is when they
have difficulty in [being] able to cope with the situation or
where they have—just not being able to—to put everything
together and they are letting it affect them. And you—and
there’s several—you can have adjustment disorder not
otherwise specified, you can have adjustment disorder with
anxiety and depression. You can have adjustment disorder
with anxiety alone, you can have it with depression alone.
You can also have it—adjustment disorder with a variety of
emotions. And that is a very typical diagnosis when people
are having difficulty in bringing it all together.”

On further cross-examination, Callum addressed
the relationship between defendant’s mental health diagno-
ses and his statements to the jail deputies:

589

“Q. [PROSECUTOR]: Were you aware that [defen-
dant] confessed in March of 2012 to touching his daughter,
to two jail deputies, without them asking any questions?

“A. [CALLUM]: I heard about that, yes.

ee ee ae

“Q. [PROSECUTOR]: I’m asking you whether you're
factoring that in.

“A. [CALLUM]: And that’s what I’m going to say. In
regards to that confession, I would factor my knowledge
about him, about his adjustment, you know his high degree
of distress and so that—that would be where with my medi-
cal certainty would be he was very distressed. And whether
he’s confessing to something out of distress, that’s within
the realm of possibility.”?

C. The Trial Court’s Ruling

Following the offer of proof, the prosecutor reiter-
ated that “there was no description by *** Callum, as to
how this adjustment disorder would have affected [defen-
dant’s] likelihood of confessing, making false confessions,
writing false confessions, anything.” The prosecutor further
contended that “there’s been no evidence that would connect
his mental health issues, or whatever he’s going through,
his adjustment disorder, to any sort of other behavior, of
how that would affect his behavior throughout the course
of trial—and again, that’s what *** this witness is being
proffered for.”

The trial court then questioned whether defendant’s
adjustment disorder was relevant to an issue of fact in the
case:

2 The prosecutor also clicited the following opinion from Callum on cross-
examination:

“Q. [PROSECUTOR]: And all that [a signed confession, disclosure of
thoughts of sexually touching children, and the jailhouse admissions], even
knowing that, today you're testifying under oath, that you believe to a rea-
sonable degree of medical certainty that he did not abuse his children?

“A. [CALLUM]: That's correct.”

Defense counsel conceded, however, at the conclusion of the hearing, that
such an opinion was inadmissible “vouching” testimony and that the trial court
should not treat it as part of his offer of proof. Accordingly, we do not consider that
testimony in our analysis here.

590 Le

«+ Tm looking at the diagnosis of his adjustment dis-
order with depression, thinking well, what does that have
to do with anything. I’m looking at the—he was there to
be treated by—he was there to be treated by Dr. Callum,
the wife wasn’t there for treatment, the child wasn’t there
for treatment, she had very little contact with either one of
them in a treatment phase. Certainly she is not going to be
able to get—as you said yourself, she can’t give the opinion
of what she—that she believes he didn’t do the act, and all
that kind of stuff.

“But, you know, the fact that he suffers from adjustment.
disorder with depression, has really nothing to do with this
case. *** Tm having a hard time figuring out the rest of
this, because I don’t know what the rest—you were talking
about you wanted to get into his psychological profile, and
Tm thinking well, how is that relevant to his not under-
standing what he signed or—I mean, other than that, I
don’t know what it’s relevant to.”

Defense counsel replied that defendant’s “psycho-
logical profile also applies to the statements of the guards,
because of his poor coping skills and his excessive rumina-
tion and his hallucinatory behavior,” and that “the nexus
*** is that people who have poor coping skills, try differ-
ent strategies, and—and people make false confessions, and
make false statements.” Counsel emphasized that the the-
ory of defense was that the defendant’s hand

“brushed the front of [M’s] diaper, and that what it was
in fact, was an accidental touching, but that [defendant],
because of his excessive rumination, as described by
Dr. Callum, his poor life skills, his poor coping skills, his
poor understanding of the way things work, I believe she
described him as being very simplistic, he began ruminat-
ing over that and wondering because of his familial origin,
if he was turning into the kind of person that would do
something like this to his daughter.”

Counsel added that he was “not just coming up with this”;
when defendant was evaluated by a different psychologist,
Dr. Czar, defendant had denied any sexual motive in the
touching and had insisted that “what he said to Dr. Callum,
which was ‘I had bad thoughts, was something that he and
his wife hatched together to get him services. That he was

Po Ba

concerned, that because of his family origin, that he might
have a subconscious motive that was in play.”

Defense counsel explained that the “thrust of our
case” was that, because of defendant’s “poor coping skills,
excessive ruminating, which is what Dr. Callum described,
adjustment disorders,” he deferred to his wife and signed the
confession when she presented it, “because his overwhelm-
ing concern was, ‘I'll do whatever you guys want me to do,
I just want to see my children again. If you—if you want
me to have treatment, I'll do treatment. I just want to see
my kids again.’” Counsel further explained that, “under our
theory, that he has poor coping skills and makes bad choices
because of poor coping skills, which [Callum] testified to,
that occurs in false confession cases.”

The trial court ultimately agreed with the state and
ruled that Callum “cannot get into his psychological diag-
nosis or profile.” The court concluded that the “diagnosis is
[not] helpful to the jury. There’s no nexus between that diag-
nosis and the defense in this case.”

D. The State’s Evidence at Trial

. At trial, the state offered evidence of defendant's
statements to S about touching M and having sexual
thoughts about his children, the signed document, evidence
of defendant’s statements to the deputies, and testimony
from M that defendant had sexually abused her.

E. Defendant’s Trial Testimony

In his trial testimony, defendant contradicted much
of the testimony by the state’s key witnesses, as well as parts
(detailed below) of Callum’s pretrial testimony. With respect
to S’s testimony about the day that he left the marital home,
defendant acknowledged that he was very emotional when S
came home and that he had thoughts about “my cousin and
my mom being molested as a kid, and I felt that that was
pretty disgusting.” He testified, however, that he told S that
he only accidentally had touched M’s diaper while pulling up
her covers and that S “freaked out.” Defendant insisted that
he “really didn’t think much of it other than the fact it was
an accident” and that he took off his ring and left the house
because of §’s reaction. He described his thoughts as, “[Y]ou

592 Ld

know, you're freaking out at me, I’m done, I’m going to walk
away here.” Defendant further testified that he had not seen
the purported written confession until it was provided to his
attorney during discovery and that his apparent signature
on that document had been forged.

Defendant further testified that he had not been
under stress when he spoke to the deputies while in jail and
that, although he had told them that he had touched his
daughter, he had not said anything about “private parts.”

With respect to his disclosures to Callum during
counseling, defendant testified that he had never had inap-
propriate thoughts about children but that he and S had
agreed that he would tell Callum otherwise to avoid tell-
ing her about the touching incident, which defendant feared.
Callum might have to report to the authorities. Defendant
also denied that sexual abuse was a “hot button” issue for
him in light of his family history.

In sum, defendant testified that he lacked a sex-
ual motive when he accidentally touched M, that he had
not made any incriminating statements to S, that the pur-
ported written confession was a forgery, that he had not
admitted touching M’s private parts to the deputies, and
that he had falsely told Callum that he had inappropriate
thoughts about children. The jury found defendant guilty of
first-degree sexual abuse, and he appealed from the ensuing
judgment of conviction.

F. The Court of Appeals Decision and Arguments on Review

On defendant’s appeal, the Court of Appeals
reversed. In concluding that the trial court had erred in
excluding Callum’s testimony, the Court of Appeals explained
that “the record supplies a nexus between Callum’s testi-
mony about defendant’s adjustment disorder and its effect
on defendant.” State v. Jesse, 275 Or App 1, 16, 362 P3d 1187
(2015). The Court of Appeals explained that defendant’s the-
ory of the case was that he had obsessed over an acciden-
tal touching of his daughter and then was “overwhelmed by
the stress,” causing him to confess falsely. Id. at 15-16. In
the court’s view, Callum’s “testimony was consistent with
and would have bolstered that theory, providing a scientific

Po 593

basis—an adjustment disorder that made defendant sus-
ceptible to rumination and obsessive thinking, and left him
with very poor coping skills—to help explain what would
be a highly unusual reaction to an accidental touching.” Id.
at 16. That is, the Court of Appeals viewed Callum’s testi-
mony as sufficient to support a factfinder’s determination
that defendant’s written and oral statements were not “true
admission[s] of guilt.” Id.

On. review, the state asserts that the trial court
properly excluded Callum’s testimony under OEC 702 on
the ground that it was unhelpful. The state points out that
Callum did not testify that defendant’s disorder was of a sort
that has been observed by experts as likely to cause “false
confessions,” nor did she describe any indicia that a fact-
finder could use to determine whether defendant’s admis-
sions were linked to his disorder. The state reasons that,

“[wlithout that type of testimony, the expert left the [fact-
finder] to speculate as to whether defendant’s disorder
could have caused him to confess falsely—a matter which
requires the application of expertise regarding that disor-
der and its presentation among those afflicted with it. As a
result, the proffered testimony was not helpful under OEC
702 and therefore inadmissible under that rule.”

Defendant responds that the Court of Appeals correctly con-
cluded that the trial court had erred in excluding Callum’s
testimony.

Il. ANALYSIS
A. The Helpfuiness Inquiry Under OEC 702
As noted, OEC 702 provides:

“If scientific, technical or other specialized knowledge
will assist the trier of fact to understand the evidence or to
determine a fact in issue, a witness qualified as an expert
by knowledge, skill, experience, training or education may
testify thereto in the form of an opinion or otherwise.”

In State v. Brown, 297 Or 404, 687 P2d 751 (1984), this court
explained the nature of the requirement in OEC 702 that, to
be admitted, scientific evidence must “assist the trier of fact
to understand the evidence or to determine a fact in issue.”

594 Ld

“Under the Oregon Evidence Code and traditional evi-
dence law, expert testimony is admissible if it is relevant
under OEC 401 and will help the trier of fact in deciding a
disputed issue. To be helpful [under OEC 702], the subject
of the testimony must be within the expert’s field, the wit-
ness must be qualified, and the foundation for the opinion
must intelligibly relate the testimony to the facts. If these
conditions are satisfied, the testimony will be excluded only
if it is unduly prejudicial, repetitive, or falls under some
other exclusionary provision as provided in OEC 403.”

Id. at 409.

To be helpful, expert testimony must assist a trier
of fact to understand the evidence or determine an issue of
fact that it may not be able to understand or determine as
well on its own. See Yundt v. D & D Boul, Inc., 259 Or 247,
258, 486 P2d 553 (1971). As examples, expert testimony can.
be helpful by:

“(1) supplying general propositions which will permit
inferences from data which the trier of fact would other-
wise be forced to find meaningless; (2) applying general
propositions to data so as to generate inferences where the
complexity of the body of propositions applied, the difficulty
of the application, or other factors make the expert’s con-
clusion probably more accurate or precise than that of the
trier of fact; (3) modifying, qualifying, and refining gen-
eral propositions which the trier of fact may reasonably be
expected to use; and (4) adding specialized confirmation
and, thus, confidence to general propositions otherwise
likely to be assumed more tentatively by the trier.”

State v. O’Key, 321 Or 285, 298, 899 P2d 663 (1995) (quot-
ing John William Strong, Language and Logic in Expert

® The parties appear to assume—and we agree with the premise—that
Callum’s testimony amounted to “scientific evidence.” See, e.g., State v. Milbradt,
305 Or 621, 631, 756 P2d 620 (1988) (treating testimony of expert about child vic-
tims’ normal reactions to sexual abuse as “scientific evidence”). Of course, other
requirements for the admission of scientific evidence also exist. Most notably,
“fulnderpinning the entire admissibility analysis ***is the requirement that the
evidence be shown to be scientifically valid” State v. Perry, 347 Or 110, 121, 218
P8d 95 (2009); see also Marcum v. Adventist Health System/West, 345 Or 237, 245,
198 P83d 1 (2008) (so holding); O’Key, 321 Or at 301 n 19 (“[S]cientific validity lis]
the linchpin of admissibility.”). However, because the state’s challenge is narrow,
focusing only on the helpfulness requirement, we do not address the other foun-
dational requirements for the admission of such evidence.

fF 595

Testimony: Limiting Expert Testimony by Restrictions
of Function, Reliability, and Form, 71 Or L Rev 349, 360
(1992)).

In this case, defendant asserts that Callum’s testi-
mony would have helped the jury by having a tendency to
“modify” or “qualify” a “general proposition” that the jury
may reasonably have been expected to use in this case,
namely, that a person who appears to admit guilt of an
offense likely is guilty.* This court has discussed the help-
fulness of expert testimony offered for analogous purposes
in two prior decisions that are instructive here.

State v. Middleton, 294 Or 427, 429-30, 657 P2d
1215 (1983), involved a social worker’s expert testimony
that the victim’s reaction to rape was typical of most victims
of familial sexual abuse. The victim testified at trial that
the defendant—her father—had raped her. The defendant,
who denied that the rape had occurred, introduced state-
ments by the victim that were inconsistent with her claim
of rape. In rebuttal, two social workers testified regarding
the reactions of young victims of family sexual abuse. One
of the social workers testified that the victim’s behavior
was typical of most victims. The defendant challenged the
admission of that testimony at trial on the ground that it
was not helpful to the jury. Id. at 434. This court concluded
that the testimony was admissible because it could help the
jury better assess the victim’s credibility by explaining her
“superficially bizarre behaviorl, i.e, making inconsistent
statements about whether the rape occurred,] by identifying
its emotional antecedents.” Id. at 436.

In State v. Gherasim, 329 Or 188, 190, 985 P2d
1267 (1999), a rape prosecution, the victim had identified
the defendant as her assailant, but the defendant asserted

+ Defendant also briefly asserts, without elaboration, that Callum’s testi-
mony would have provided the jury with evidence that it could use to confirm
defendant's explanation of his behavior, thereby (in the words of O’Key, 321. Or
at 298) “adding specialized confirmation *** to general propositions otherwise
likely to be assumed more tentatively by the trier.” Because defendant has not
developed that argument by identifying, for example, what general proposition
Callum’s testimony would have confirmed that, without that testimony, the jury
was likely to have “assumed more tentatively,” we do not consider that argument
farther.

596 Le

that someone else had assaulted the victim and he merely
arrived at the scene and attempted to help her. The defen-
dant proffered the testimony of a psychiatrist that the vic-
tim experienced dissociative amnesia, which had caused her
to be confused and unable to recall the events of the assault
accurately at trial. Id. at 192. The state objected, and the
trial court allowed an offer of proof, which went into the spe-
cifics of what aspects of the victim’s behavior suggested the
presence of dissociative amnesia. The trial court ultimately
excluded the testimony. Id. at 196. This court reversed, con-
cluding that the expert’s testimony would have been helpful
because the expert “would have testified that, in his opin-
ion, the victim suffered from dissociative amnesia and that
that condition affected her capacity to remember what had
occurred on the night that she was assaulted.” Id. at 198.

In both Middleton and Gherasim, this court con-

cluded that expert testimony that modified inferences that
_the jury otherwise might be expected to draw from the evi-
dence satisfied the helpfulness standard. Implicit in both
holdings were determinations that the testimony intelligi-
bly related to a provable fact. See Brown, 297 Or at 409 (stat-
ing that foundation for expert testimony must intelligibly
relate testimony to provable facts). That aspect of helpful-
ness refers to the relationship—that is, the relevance—that
expert testimony must bear to a fact in issue. See State v.
Guzek, 322 Or 245, 251, 906 P2d 272 (1995), vacd on other
grounds, 336 Or 424, 86 P3d 1106 (2004) (“Relevancy is
not an inherent characteristic of any item of evidence but
exists only as a relation between an item of evidence and a
matter properly provable in the case.’”) (quoting OEC 401
Commentary, reprinted in Laird C. Kirkpatrick, Oregon
Evidence 104 (2d ed 1989)). This court’s separate references
in Brown to the basic relevance requirement of OEC 401 and.
the proposition that, to be helpful, expert testimony must
intelligibly relate to a provable fact, should not be under-
stood to have created a heightened relevance requirement
for expert testimony. Instead, the “intelligibly relate” refer-
ence gives voice to the unsurprising intuition that, to help
a trier of fact understand the evidence or decide a fact in
issue, expert testimony must relate to the fact in an under-
standable way. See State v. Wright, 323 Or 8, 17-18, 918 P2d

Po 597

321 (1996) (stating that helpfulness “subsumes” a relevance
inquiry).®

Some expert testimony, like other forms of evidence,
only conditionally relates to a fact in issue, meaning that
it is relevant only if another fact—the conditional fact—is
first proved. State v. McNeely, 330 Or 457, 462 n 5, 8 P3d
212, cert den, 531 US 1055 (2000).° We mention that wrinkle
here, because defendant proffered Callum’s testimony about
his adjustment disorder to provide an inference that defen-
dant did not touch M with a culpable mental state. Callum’s
testimony would be relevant to that fact in issue only if a
conditional fact was proved, that is, that defendants’ adjust-
ment disorder influenced him to make admissions that were
not actual confessions of guilt. That conditional fact—like
any other fact in issue—could be established by reasonable
inferences, but not through speculation. See State v. Parker,
235 Or 366, 381-82, 384 P2d 986 (1963).”

B. Standard of Review

With that foundation in mind, our first task is to
identify the standard that governs our review of the trial
court’s helpfulness ruling. As discussed, the court concluded

5 This court repeatedly has described relevancy as a component of the help-
fulness analysis. See Brown, 297 Or at 438 (“We have set forth seven factors to be
used in connection with the definition of ‘relevancy’ as defined in OEC 401 and to
be utilized in determining the helpfulness test for expert testimony expressed in
OEC 702.”); see also Marcum, 845 Or at 248 (court must conduct relevancy analy-
sis implicated in OEC 702’s helpfulness standard); Jennings v. Baxter Healthcare
Corp., 381 Or 285, 302, 14 P3d 596 (2000).

© See also OBC 104(2) (if “relevancy of evidence depends upon the fulfillment
ofa condition of fact, the court shall admit it upon, or subject to, the introduction
of evidence sufficient to support a finding of the fulfillment of the condition”).

7 The line between permissible inferences and impermissible speculation is
difficult to articulate with precision. The federal courts usefully have described
that line in these terms:

“The line between a reasonable inference that may permissibly be drawn by
a jury from basic facts in evidence and an impermissible speculation is not
drawn by judicial idiosyncrasies. The line is drawn by the laws of logic. If
there is an experience of logical probability that an ultimate fact will follow
a stated narrative or historical fact, then the jury is given the opportunity to
draw a conclusion because there is a reasonable probability that the conclu-
sion flows from the proven facts.”

Tose v. First Pennsyluania Bank, N.A., 648 F2d 879, 895 (8d Cin), cert den, 454 US
893 (1981), abrogated on other grounds by Griggs v. Provident Consumer Discount
Co., 459 US 56, 103 S Ct 400, 74 L Ed 2d 225 (1982).

598 Ld

that Callum’s testimony was not helpful because it lacked
a sufficient nexus to defendant’s theory of defense that his
apparent admissions to S and the deputies were not actual
confessions of guilt. The state argues that that ruling
involved an exercise of discretion. Defendant disagrees; he
asserts that the ruling was based on an erroneous relevance
determination that is entitled to no deference. As we now
explain, we agree with defendant that, properly understood,
the trial court’s ruling is subject to review for legal error.

The parties’ disagreement about the governing
standard of review is understandable, because this court
has not always clearly and consistently articulated the stan-
dard under which it reviews helpfulness rulings. In State v.
Rogers, 330 Or 282, 312, 4 P38d 1261 (2000), this court stated
that the decision whether to admit evidence under OEC
702 can present a pure question of law (such as whether an
expert is qualified or whether proffered testimony is within
the scope of a witness’s expertise), or it can have discretion-
ary aspects, but the court did not explore the nature of the
helpfulness inquiry. In Gherasim, which did involve review
of a helpfulness ruling, this court stated that, if a correct
application of law allows for more than one choice, we review
the exclusion of expert testimony under OEC 702 for abuse
of discretion; otherwise we review such a ruling for errors
of law. 329 Or at 198. However, the court in Gherasim did
not expressly identify the standard of review that it applied
in holding that the trial court had erred in excluding the
expert testimony that the defendant had proffered.

In Middleton, the court suggested that a helpful-
ness determination can involve an exercise of discretion
where the challenge to expert testimony focuses on a jury’s
assumed level of understanding of the evidence before it. See
Middleton, 294 Or at 437 (“[T]here is no bright line separat-
ing issues within the comprehension of the jurors from those
that are not. Generally the admission of expert testimony is
within the discretion of the trial court.”). In other decisions,
this court has discussed the role that discretion can play
in deciding whether expert testimony would assist the jury
in understanding the evidence. See, e.g., State v. Stringer,
292 Or 388, 394, 639 P2d 1264 (1982) (although discretion
can play a role in helpfulness determination, discretion is

Pe 599

inapplicable where jury lacks expertise to understand evi-
dence without assistance); Yundt, 259 Or at 258. In Yundt,
the court explained:

“There are situations *** where a jury clearly is not
equally well qualified and needs help to find the truth.
There are also situations where a jury clearly is equally
qualified without help from opinion testimony such as
offered here. It is the area between the clearly qualified
and the clearly unqualified where the trial judge should be
granted a certain latitude of decision in excluding or receiv-
ing expert opinion testimony.”

Id. at: 259. In short, this court’s prior decisions discussing a
discretionary standard have involved the question whether
proffered expert testimony would help the jury comprehend
the evidence. And, those decisions have confined the role of
judicial discretion to circumstances involving factual issues
neither clearly within, nor beyond, the jury’s assumed level
of understanding.

‘We conclude that the state’s challenge and the trial
court’s ruling in this case did not implicate such an exercise
of discretion. As noted, at the outset, the trial court ques-
tioned whether Callum’s testimony related to a fact in issue.
As its colloquy with counsel ensued, the court ultimately con-
cluded that the evidence was not helpful because “[t]here’s
no nexus between [the adjustment disorder] diagnosis and
the defense in this case.” We understand that statement, in
the context of the parties’ arguments, to mean that the court
excluded Callum’s testimony because it did not think that
that testimony sufficiently related to the fact issue for which
defendant proffered it; that is, whether defendant’s admis-
sions were actual confessions of guilt. Stated differently, the
court in effect concluded that defendant’s proffer was insuf-
ficient to permit the jury reasonably to infer the conditional
fact that his admissions were not actual confessions and,
therefore, defendant had failed to establish its relationship
to the ultimate factual issue of whether he acted with a cul-
pable mental state.

Because that inquiry—like any other relevance
inquiry—leads to a single correct answer, we review the
court’s ruling for error of law. See Rogers, 330 Or at 312 (“If

600 Le

there is only one legally correct outcome, then ‘discretion’ is
an inapplicable concept.”); see also State v. Barone, 329 Or
210, 237, 986 P2d 5 (1999), cert den, 528 US 1086 (2000)
(court reviews relevance ruling for legal error); Delgado v.
Souders, 334 Or 122, 185, 46 P3d 729 (2002) (reviewing
for legal error ruling that evidence was insufficient to sup-
port inference for which it was proffered).* We now consider
defendant’s proffer in this case through that lens.

Til. APPLICATION

Again, defendant proffered Callum’s testimony to
support an inference that defendant’s adjustment disor-
der contributed to an overreaction to accidentally touch-
ing M that, in turn, contributed to his making admissions
that were not actual confessions of guilt. Defendant cor-
rectly asserts that so-called false (or unreliable) confession.
defenses involve explaining behavior that, for most layper-
sons, might appear to be counterintuitive. Thus, expert tes-
timony, if adequately grounded in specialized knowledge,
can help a jury better understand such behavior. Here,
Callum’s qualifications as an expert witness are not in dis-
pute, and the state does not challenge the foundation for her
testimony that defendant had an adjustment disorder that
caused him to ruminate obsessively, subjected him to a high
level of distress, and limited his coping skills. It is also true
that Callum testified that whether defendant had confessed
out of distress was within the realm of possibility.

The difficulty is that Callum’s testimony demon-
strated only defendant’s premises (that he was distressed,
had poor coping skills, and obsessively ruminated), and
not the inference that he wanted the jury to draw (that dis-
tressed people with poor coping skills who obsessively rumi-
nate may make admissions that are not actual confessions
of guilt). Unlike the expert in Middleton, Callum did not tes-
tify that defendant’s adjustment disorder was of a sort that
has been observed by experts to influence a person to make
admissions that were not confessions of guilt. Cf Middleton,
294 Or at 436 (expert's testimony that victim’s behavior was
typical of most victims could help jury better assess victim’s

® The trial court did not base its ruling on OEC 403, nor, in light of our
ground of decision, do we need to address the application of that rule in this case.

Po 601

credibility by explaining her superficially bizarre behavior).
Nor, analogously to the expert testimony in Gherasim, did
Callum testify that defendant’s disorder actually influenced
his statements. Cf Gherasim, 329 Or at 198 (testimony that
victim suffered from dissociative amnesia, which caused her
to be confused and unable to recall what bad occurred on
night she was assaulted, would have been helpful to jury).
And, defendant did not seek to prove the conditional fact—
that his adjustment disorder influenced his admissions—by
other means. For instance, defendant did not testify that he
admitted the facts he did because he was obsessively rumi-
nating or was unable to cope.

We do not mean to suggest that evidence of the
type that this court concluded was helpful in Middleton
and Gherasim is necessary in every case where psycholog-
ical profile evidence is proffered to support an inference
that the defendant’s admissions were not true confessions.
Otherwise qualified expert testimony that a defendant’s
psychological profile can produce a false confession, when
coupled with evidence of indicia that a fact finder could use
to determine whether the defendant’s mental disorder actu-
ally contributed to his or her making a false confession, also
can be helpful to a jury. See, e.g., People v. Kowalski, 492
Mich 106, 1382, 821 NW2d 14, 31 (2012) (where, in apply-
ing Michigan’s identically worded version of OEC 702, court
held that psychological profile evidence was helpful to jury
because expert proposed to show that “[interaction] between
defendant and [police] ‘was consistent with [coerced] inter-
nalized confession’”).

Here, however, Callum testified only that, because
of his adjustment disorder, it was within the realm of pos-
sibility that defendant confessed out of stress. She did not
testify that defendant’s disorder can produce confessions
that are not genuine, nor did she provide any indicia that
the jury could use to draw a reasonable inference that his
admissions were not actual confessions. And, defendant did
not proffer any other evidence from which the jury could
have drawn that inference. In sum, because defendant did
not connect the facets of his adjustment disorder with the
conditional fact that he wanted the jury to infer, the jury
would have been left to speculate about the existence of a

602 Le

connection between that testimony and the issue of fact
whether defendant touched M with a culpable mental state.
It follows that the court did not err in excluding that testi-
mony on the ground that it would not be helpful to the trier
of fact.®

Although not necessary to our decision, we note
an additional concern with Callum’s pretrial testimony in
relation to the evidence at trial. In particular, key factual
assumptions underlying that testimony were inconsis-
tent with defendant’s own trial testimony. First, Callum’s
testimony, and indeed her diagnosis, hinged on a factual
assumption that defendant testified was false, namely, that
he was plagued by fears that he might inappropriately touch
his children and become a sex offender like certain mem-
bers of his family. As noted, defendant testified that he was
never concerned with that possibility and that he had falsely
told Callum otherwise; he further testified that he did not
tell Callum about the incident that actually precipitated his
seeking therapy—the touching incident—because he was
concerned that she might have to report him to the authori-
ties. Thus, the excluded evidence met defendant’s own testi-
mony coming and going.

Second, Callum’s testimony was based on the
assumption that defendant made admissions to S and the
deputies because of “distress” due to his adjustment disor-
der, but her conclusion that he was “distressed” was based
on his disclosure that he had had thoughts of inappropri-
ately touching his children. That assumption, again, was
inconsistent with defendant’s own testimony. As discussed,
defendant testified that he told S only that he had acciden-
tally touched M and that the signed document that the

° Cases where defendants have challenged the reliability of their confessions
under the identically worded FRE 702 are consistent with our conclusion. In U.S.
v, Hall, 93 F8d 1387 (7th Cir 1996), and U.S. v. Shay, 57 F3d 126 (1st Cir 1995),
for example, experts were prepared to provide specific testimony to the effect
that the respective defendants’ mental disorders made them more likely to falsely
confess. See Hall, 93 F8d at 1341 (experts would have testified regarding the
defendant's propensity to falsely confess due to a personality disorder); Shay, 57
F3d at 133 (expert would have testified that the defendant had a mental disorder
that made him a pathological liar and caused him to make self-aggrandizing con-
fession). In those cases, the expert testimony offered more than just abstract psy-
chological profile information, because, in addition, it suggested “how to decide
whether it fit the facts of the case being tried.” Hall, 93 F3d at 1345,

pC 603

state offered was forged. With respect to his statements to
the deputies two years after the alleged abuse, defendant
denied being under stress, and he testified that, although
he had said that he had touched his daughter, he had not
confessed to any sexual motive. In short, even if Callum’s
testimony otherwise might have assisted the jury to under-
stand why—if he made them—defendant’s admissions to S
and the deputies were not true confessions,” the helpfulness
of such testimony to the jury was significantly undermined
by defendant’s acknowledgement that he had not disclosed
to Callum the real reason why he sought therapy, his testi-
mony that he had falsely told her that he had inappropriate
thoughts about touching his children, and his claims that he
had not, in fact, made any admissions that involved inappro-
priate touching at all. In those circumstances, Callum’s tes-
timony had, at best, a confusingly tangential link to defen-
dant’s evidence at trial."

In sum, we conclude that the trial court did not err
in excluding Callum’s testimony on the ground that it would
not have been helpful to the trier of fact.

The decision of the Court of Appeals is reversed.
The judgment of the circuit court is affirmed.

1 Not to put too fine a point on things, but Callum did not explain how defen-
dant’s psychological profile could cause him to make seeming admissions that.
were not true confessions of guilt and then deny that he had made any admissions
at all.

4 Of course, defendant’s testimony was not available to the trial court when
it made its pretrial ruling. Irrespective, though, of whether the trial court’s rul-
ing is regarded as (even more) correct in light of the evidentiary record at trial or,
alternatively, potentially erroneous when made but ultimately harmless in light
of the record at trial, the point remains the same here. Key assumptions under-
lying Callum’s testimony were inconsistent with defendant’s trial testimony in
ways that supported the trial court’s pretrial ruling excluding it as unhelpful.

605

Argued and submitted June 14, decision of Court of Appeals affirmed in
part and reversed in part, case remanded to Court of Appeals for further
consideration consistent with this decision November 25, 2016

Rob HANDY,
Respondent on Review,
v.
LANE COUNTY,
Jay Bozievich, Sid Leiken
and Faye Stewart,
Petitioners on Review.
(CC 161213685; CA A153507; SC S063725)

385 P3d 1016

Stephen E. Dingle, Office of Lane County Counsel,
Eugene, argued the cause and filed the briefs for petitioners
on review.

Marianne Dugan, Eugene, argued the cause and filed the
brief for respondent on review. Also on the brief was Daniel
Galpern, Eugene.

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606 po

Harry Auerbach, Portland Office of City Attorney, argued
the cause for amici curiae Association of Oregon Counties,
League of Oregon Cities, City of Portland, and Washington
County. Sean O’Day, League of Oregon Cities, Salem, filed
the brief. Also on the brief were Rob Bovett, Association of
Oregon Counties, Katherine Thomas, Office of Multnomah
County Attorney, Harry Auerbach, Portland Office of City
Attorney, and Alan A. Rappleyea, Washington County
Counsel.

Keith M. Garza, Law Office of Keith M. Garza, Oak Grove,
filed the brief for amicus curiae Tri-County Metropolitan
Transit District of Oregon. Also on the brief was Erik Van
Hagen, TriMet.

Alan A. Rappleyea, Washington County Counsel, Hillsboro,
filed the brief for amicus curiae Washington County.

Jack L. Orchard, Ball Janik, LLP, Portland, filed the brief
for amici curiae Oregon Newspaper Publishers Association,
Albany Democrat-Herald, Beaverton Valley-Times, Canby
Herald, Central Oregonian, Corvallis Gazette-Times,
Eugene Register-Guard, Forest Grove News-Times, Gresham
Outlook, Hood River News, Lake Oswego Review, Lebanon
Express, Madras Pioneer, McMinnville News-Register,
The Oregonian, Polk County Itemizer-Observer, Portland
Tribune, The Dalles Chronicle, Tigard and Tualatin Times,
Wilsonville Spokesman, and Woodburn Independent. Also
on the brief was Amy Heverly.

KISTLER, J.

The decision of the Court of Appeals is affirmed in part
and reversed in part. The case is remanded to the Court
of Appeals for further consideration consistent with this
decision.

Pp 607

KISTLER, J.

Oregon’s public meetings law provides that a quo-
rum of a public entity’s governing body “may not meet in
private for the purpose of deciding on or deliberating toward
a decision.” ORS 192.630(2). Plaintiff filed this action claim-
ing, among other things, that a quorum of the Lane County
commissioners had violated that provision by engaging in a
series of private communications to decide whether to com-
ply with a public records request. Plaintiff's claim raises pri-
marily two issues. The first is whether a quorum of a public
body can “meet” in violation of ORS 192.630(2) by means
of seriatim communications or whether a quorum can meet
only if all the members of the quorum are present at the
same time. The second issue is whether, if a quorum can
meet by means of seriatim communications, plaintiff’s evi-
dence was sufficient to establish that a quorum of the com-
missioners met privately.

The trial court assumed that a quorum can meet by
means of seriatim communications, but it ruled that plain-
tiff had not offered sufficient evidence to avoid defendants’
special motion to strike. See ORS 31.150 (providing for spe-
cial motions to strike certain kinds of claims). The court
accordingly dismissed plaintiffs claims without prejudice.
The Court of Appeals reversed. Handy v. Lane County, 274
Or App 644, 362 P3d 867 (2015) (en banc). The majority held
that a quorum can meet by means of seriatim communica-
tions and that plaintiff had presented sufficient evidence
from which a reasonable trier of fact could find that a quo-
rum of the Lane County commissioners had met to decide or
deliberate toward deciding whether to comply with a public
records request. Id. The dissent would have held that a quo-
rum can meet only if all the members of the quorum are
present at the same time, either in person or electronically,
which had not occurred in this case. Id. at 684 (DeVore, J.,
dissenting).

We allowed defendants’ petition for review to con-
sider those issues. We now hold that, even if plaintiff can
rely on a series of communications to establish that a quo-
rum met to decide or deliberate toward a decision, the evi-
dence in this case was not sufficient to establish that a

608 Po

quorum had done so. That is, we agree with the trial court
that, given the evidence that plaintiff offered in response to
defendants’ special motion to strike, no reasonable trier of
fact could find that a quorum met to decide whether to com-
ply with the public records request. We reverse the Court of
Appeals decision in part and affirm it in part.

I. FACTS AND PROCEEDINGS BELOW

In April 2011, the Lane County Circuit Court
entered a $350,000 judgment against the Lane County
Board of Commissioners for violating the public meetings
law. Dumdi v. Handy, Lane County CC No. 16-10-02760
(2011) (general judgment). Additionally, as a result of
those public meetings law violations, the trial court entered
$20,000 judgments individually against the plaintiff in this
case (who was a defendant in Dumdi) and another Lane
County Commissioner (Sorenson). Id.

A year later, plaintiff was running for reelection as
a Lane County Commissioner. On May 1, 2012, the Lane
County District Attorney received a call from a local busi-
nessman, who said that plaintiff “ha[d] been pushing him to
donate money ‘anonymously’ to pay off a debt” that plaintiff
owed Lane County. According to the caller, other persons
may have already made anonymous donations on plaintiff's
behalf to help pay off the debt. Given plaintiff's status as a
county commissioner, the district attorney concluded that
it was inappropriate for his office to investigate that alle-
gation. He accordingly asked the Oregon Department of
Justice to investigate.

The next day, on May 2, an attorney represent-
ing the businessman sent a letter to plaintiff, stating that
plaintiff had asked the businessman to make an anon-
ymous “campaign contribution or a $3,000 payment to
Lane County for [plaintiff's] personal benefit.” The letter
explained why, in the attorney’s view, plaintiff's request
had violated Oregon’s ethics laws, campaign finance laws,
and criminal laws. The attorney also observed that, in his

1 Because the question on review is whether plaintiff's evidence was suffi-
cient to establish a prima facie case, see ORS 31.150(8), we state the facts in the
light most favorable to plaintiff.

Po 609

opinion, plaintiff's actions exposed Lane County to liabil-
ity. Enclosed with the letter were several documents. One
was a copy of a handwritten note that purported to be
from plaintiff to the businessman, asking him to make an
anonymous $3,000 contribution to help pay off the $20,000
debt that plaintiff owed Lane County. Also enclosed was a
list of payments that previously had been made on plain-
tiff’s $20,000 debt to Lane County. In addition to showing
biweekly payroll deductions, the list showed three contri-
butions totaling $3,020 from unnamed citizens. The attor-
ney copied the letter on the Lane County District Attorney,
the Secretary of State, the Elections Director, and the
Oregon Government Ethics Commission. The attorney
also attached a copy of the letter to an email, which he
sent at 2:28 p.m. on May 2 to the Lane County District
Attorney.

Within two hours after the attorney emailed the
letter, the Lane County administrator received a public
records request from Bill Lunden at a local radio station.
Having received that request, the county administrator
asked the district attorney about it. The district attorney
responded by email at 4:04 p.m., “I assume this is the record
Mr. Lunden is seeking. Holy cow . . . this just arrived in my
office at 14:38 [sic]. I haven’t even read the attached letter
yet!” (Ellipses in original.) The county administrator wrote
back eight minutes later and said, “After you read it let me
know what you want me to do.”

Between 4:04 p.m. and 7:30 p.m., the county admin-
istrator spoke to two county commissioners (Commissioners
Bozievich and Stewart). Both asked her about poten-
tial county liability. At 7:38 p.m., the county administra-
tor sent the following email to two county commissioners
(Commissioners Leiken and Bozievich), which she copied on
the district attorney and a senior county counsel:

“Commissioners, I’ve now had a chance to review the let-
ter we received today from [the businessman’s attorney].
Commissioner Stewart asked me about County liability.
Commissioner Bozievich had the same concern when I
spoke to him earlier. I would like to consult with [the dis-
trict attorney] and/or [the senior county counsel], but at

610 P|

the very least it makes me concerned about what else may
be occurring that we aren’t aware of. I’d like to give some
advice to Finance as to what they should do with the mon-
ies we've already received. I’m also concerned that it will
look like we are trying to hide something if we refuse the
public records request. Our practice is to use the excep-
tions if they exist, but it feels wrong in this case. I’ll con-
sult with counsel on all of these issues and get back to you
tomorrow.”

Twelve minutes later, Commissioner Leiken replied
to the county administrator with a copy to Commissioner
Bozievich. Leiken’s email stated, “I just read the letter from
[the businessman’s attorney] and I am very concerned as
well with regards to the county’s potential liability. I will
be in tomorrow morning and look forward to what you find
out”

The next morning, May 3, at 5:56 a.m., Commis-
sioner Bozievich replied to the county administrator and
Commissioner Leiken. His email said:

“I will be available to come in the morning also. Looking
forward to a quick decision on disclosure. Seems like the
actual letter to [plaintiff] putting him on notice is already
putting any investigation at risk and I do not want to be
seen as covering up the receipt of funds from a possible ille-
gitimate source.”

A minute later, Commissioner Bozievich sent a second email
to the county administrator, saying that Lunden, the person
who had made the public records request, was texting him
about getting a copy of the attorney’s letter. Bozievich asked
the county administrator whether there was “[alny news on
this yet?”

Approximately an hour later, at 7:09 a.m., the county
administrator replied to Bozievich by email, “No. Just got
done checking emails and texts. Will call [the district attor-
ney].” The district attorney concluded that the attorney’s let-
ter came within an exception to the public records law and
decided that he would invoke the exception and not release
it. Having made that decision, the district attorney advised
the county administrator (at some point after 7:09 a.m.)
that the commissioners could choose to release the letter
even though the district attorney had made a different

Pe eu

decision.? As Commissioner Bozievich later explained, “we
were waiting for [the district attorney’s] advice as of
7:09 am. It was after [the county administrator] called [the
district attorney] that [the county administrator] contacted
the agenda committee, Chair and vice-Chair [of the County
Commissioners], and it was decided to hold a meeting ASAP
based on [the district attorney’s] response.”

The County Commissioners held a public emergency
meeting at 9:00 a.m., less than two hours after the district
attorney notified the county administrator that, although
he had decided to invoke the public records exception, the
county commissioners could choose to release the letter.
Commissioners Bozievich, Leiken, and Stewart attended the
emergency meeting. Plaintiff and Commissioner Sorenson
did not attend. The meeting lasted 16 minutes, during which
each of the commissioners present explained why he voted
to release the letter. After the meeting ended, the county
administrator sent the attorney’s letter to the members of
the media who had requested it.

Plaintiff brought this action against Lane County
and Commissioners Stewart, Leiken, and Bozievich (defen-
dants). Plaintiff's complaint alleged three claims for relief.
The first claim alleged that defendants had violated the
public meetings law by failing to give either sufficient notice
of the May 3 meeting or a sufficient explanation for holding
an emergency meeting and by not issuing minutes for that

2 The district attorney emailed Lunden at 8:48 a.m. on May 8, explaining that
“[mJost or all of th[e] record [that Lunden was seeking] is protected from public
records disclosure because it provides detail and evidence relating to a potential
criminal investigation.” After advising Lunden that he had turned the matter
over to the Oregon Department of Justice, the district attorney explained that he
had decided to invoke the criminal investigation exception to the public records
law and would not himself release the letter. He noted, however, that the County
Commissioners could choose to release the letter even though he had invoked the
exception. Finally, he noted that Lunden could contact the Department of Justice,
which might take a different position and also release the letter.

3 Six days later, on May 9, the county administrator emailed the Lane County
Counsel's office saying, “Here’s the communications about calling an emergency
session and the reason why. I called Commissioner Stewart to get his input, and
then we scheduled it.” Attached as an email string were the county administra-
tor’s May 2 email to Bozievich and Leiken and their replies to her, all of which
are set out above. It appears from her email that Commissioners Bozievich and
Leiken were the two members of the agenda committee responsible for calling an
emergency meeting of the County Commissioners.

612 Po

meeting. The second claim for relief alleged that the com-
munications among the three commissioners that preceded
the emergency meeting violated ORS 192.630(2) because a
quorum of the commissioners had met privately to decide or
deliberate toward deciding (1) whether to meet on an emer-
gency basis and (2) whether to release the attorney’s letter.
The third claim for relief sought injunctive relief because of
defendants’ repeated violations of the public meetings law.
The third claim for relief did not identify any violation of the
public meetings law other than the violations alleged in the
first two claims for relief.

Defendants responded by filing a special motion
to strike plaintiffs complaint pursuant to Oregon’s anti-
SLAPP statute. See ORS 31.150 (providing for special
motions to strike certain claims). Under the anti-SLAPP
statute, if a defendant establishes a prima facie case that
a claim arises out of protected statements, documents, or
conduct, the burden shifts to the plaintiff “to establish that
there is a probability that the plaintiff will prevail on the
claim by presenting substantial evidence to support a prima
facie case.” ORS 31.150(3). If the plaintiff does not pres-
ent sufficient evidence to meet that burden, then the anti-
SLAPP statute directs the trial court to dismiss the claim
without prejudice. ORS 31.150(1).

After considering the evidence set out above, the
trial court granted defendants’ motion to strike all plain-
tiff’s claims for relief. The court reasoned that the gravamen.
of the first two claims was defendants’ decision to release
the attorney’s letter. The court concluded that those claims
for relief arose out of the statements that the commission-
ers allegedly had made and thus triggered the protections
of the anti-SLAPP statute. As noted, under that statute,
the burden shifted to plaintiff “to establish that there is a
probability that [he] will prevail on the claim by presenting
substantial evidence to support a prima facie case.” ORS
31.150(8).

4 SLAPP is an acronym for strategic lawsuits against public participation.
‘See Neumann v. Liles, 358 Or 706, 722-28, 369 P3d 1117 (2016). Anti-SLAPP stat-
utes seek to minimize the effect of strategic suits intended to deter persons from
expressing their views. Jd. Their goal is to permit defendants who are targeted
for their statements to end such suits quickly and with minimal expense. Id.

fF 613

In seeking to meet that burden, plaintiff relied on
the Lane County Circuit Court decision in Dumdi, which
had held that a quorum of a governing body can “meet” in
violation of ORS 192.630(2) by means of a series of commu-
nications made for the purpose of deciding or deliberating
toward deciding an issue. In resolving defendants’ motion to
strike, the trial court assumed that Dumdi correctly stated
the law. It ruled, however, that even under Dumdi, “plaintiff
has not shown he is likely to prevail.” That is, the trial court
found that plaintiff's evidence was insufficient as a matter
of law to meet the legal standard that Dumdi announced.®
The court dismissed plaintiff's first two claims for relief on
that ground, and it dismissed plaintiff's third claim for relief
because it depended on the first two.

A divided Court of Appeals reversed the trial court’s
judgment and remanded the case for further proceedings.
Handy, 274 Or App at 669. The majority reasoned that plain-
tiff’s first claim for relief was not subject to the anti-SLAPP
statute. Id. at 668-69. That claim alleged that defendants
had violated the public meetings law by failing to give either
sufficient notice of the May 3 meeting or a sufficient expla-
nation for holding an emergency meeting and by not issuing
minutes for that meeting. The court reasoned that, because
that claim did not arise out of any protected conduct listed
in the anti-SLAPP statute, that statute did not provide a
basis for striking plaintiff's first claim. Id.

Regarding plaintiff's second claim for relief, the
majority explained that that claim for relief challenged
two related but separate decisions that a quorum of the
commissioners allegedly had made: the decision to call an.
emergency meeting and the decision to release the attor-
ney’s letter. The majority held that the public meetings law
did not apply to the first decision. Id. at 654. On that issue,
the majority reasoned that the public meetings law applies
only to decisions that require a vote of a quorum of the gov-
erning body. Id.; see ORS 192.610(1) (defining “decision” as

5 The trial court also denied plaintiff's request to allow it to engage in fur-
ther discovery beyond the documents that plaintiff had received as a result of a
public records request. In its written order, the court stated that, “because it does
not believe it is likely plaintiff would prevail on his claims for relief, there is no
reason to allow further discovery.”

614 Po

“any determination, action, vote or final disposition upon a
motion, proposal, resolution, order, ordinance or measure on.
which a vote of a governing body is required, at any meeting
at which a quorum is present”). However, under the Lane
County charter, the decision to hold an emergency meeting
does not require a vote of a quorum of the county commis-
sioners. Handy, 274 Or App at 654. It followed, the majority
reasoned, that even if a quorum of the Lane County com-
missioners had met privately to decide whether to hold an
emergency meeting, doing so would not violate the public
meetings law. Id. The Court of Appeals accordingly upheld,
on a different ground, the trial court’s judgment regarding
the first decision that gave rise to plaintiff's second claim for
relief.

The majority reached a different conclusion regard-
ing the other decision that plaintiff's second claim for relief
challenged—the decision to release the attorney’s letter.
Regarding that decision, the majority held that a quorum
of a governing body can “meet” seriatim if each member
of a quorum communicates with the other members of the
quorum for the purpose of reaching a decision or deliber-
ating toward a decision. Id. at 664-66. The majority also
concluded that plaintiff's evidence was sufficient to state a
prima facie case that each of the three commissioners had
communicated privately with the other two commissioners
for the purpose of deciding whether to release the attorney’s
letter. Id. at 667. The majority accordingly reversed the trial
court’s judgment dismissing that part of plaintiff's second
claim for relief. Id.°

The dissent would have held that the term “meet”
in ORS 192.630(2) should be interpreted the same way as
the defined term “meeting.” See id. at 678-79 (DeVore, J.,
dissenting); ORS 192.610(5) (defining “meeting”). In the

6 Although the majority did not address the trial court’s disposition of plain-
tiff’s third claim for relief, it reversed the trial court’s judgment in its entirety.
The trial court had dismissed the third claim for injunctive relief because it
depended on the first two claims stating actionable violations of the public meet-
ings law. Having concluded that plaintiff's first two claims for relief, in whole or
in part, stated actionable violations of the public meetings law, the majority pre-
sumably concluded that the third claim for relief also had to go back to the trial
court.

as

pe 615

dissent’s view, a quorum of a public body will meet only if
there is a contemporaneous gathering of a quorum, either
in person or electronically. It followed, the dissent reasoned,
that a quorum cannot meet by means of a series of a commu-
nications, even if all those communications were exchanged
for the purpose of reaching or deliberating toward a deci-
sion. Because there was no evidence of a contemporaneous
gathering, the dissent would have affirmed the trial court’s
judgment on that ground.

Il. ISSUES ON REVIEW

On review, the parties’ arguments are limited.
Defendants do not challenge the Court of Appeals’ conclu-
sion that plaintiff's first claim for relief is not subject to a
motion to strike under the anti-SLAPP statute. Rather,
defendants’ argument is focused on the Court of Appeals’
resolution of the second part of plaintiff’s second claim
for relief—that the commissioners’ seriatim communica-
tions established that they decided or deliberated toward
a decision to release the attorney’s letter. On that issue,
defendants adopt, in large part, the dissent’s position that
the public meetings law does not apply to seriatim com-
munications among a quorum of the commissioners. They
also point out the absence of any evidence that the county
administrator was acting as an agent for Commissioner
Stewart, and they question how the absence of any evidence
that three commissioners decided or deliberated toward a
decision whether to release the letter can be converted into
a reasonable inference that they did.”

Plaintiff, for his part, does not challenge the Court
of Appeals’ decision dismissing the first part of his second
claim for relief; that is, he does not challenge the Court of
Appeals’ conclusion that, under the Lane County charter,
the decision whether to call an emergency meeting is not
a “decision” to which the public meetings law applies. He

7 Defendants’ evidentiary discussion on review is directed to showing that
three commissioners (or two commissioners and an agent for a third) did not meet
under the dissent’s interpretation of ORS 192.630(2)—namely, that they did not
communicate simultaneously regarding whether to release the attorney's letter.
However, if defendant's evidentiary point is correct, it also establishes that a
quorum did not meet under plaintiff's interpretation of ORS 192.680(2).

616

also does not dispute that the anti-SLAPP statute applies
to the second part of his second claim for relief.* His argu-
ment focuses on one issue. Adopting the majority’s reason-
ing in the Court of Appeals, plaintiff argues that the second
part of his second claim for relief can go forward because
the seriatim communications that preceded the emergency
meeting established a prima facie case that a quorum of the
commissioners met to decide or deliberate toward a decision
to release the attorney’s letter.

The question that the parties raise on review entails
three issues. The first arises under the anti-SLAPP stat-
ute: What standard must a plaintiffs evidence meet once
the defendant shows that the plaintiff's claim arises out of
a statement to which the anti-SLAPP statute applies? The
second issue arises under the public meetings law: Can a
quorum of a public body “meet” by means of seriatim com-
munications or must all the members of the quorum be pres-
ent at the same time? The third issue is case specific: Was
the evidence that plaintiff offered to support the second part
of his second claim for relief sufficient to defeat a motion to
strike under the anti-SLAPP statute?

The parties’ briefs on review focus on the second
issue noted above. At oral argument, however, the parties
were asked whether plaintiff's evidence was sufficient,
even under the legal standard that the Court of Appeals
announced and that plaintiff urges us to adopt. We conclude
that it is appropriate to begin with that issue. If plaintiff's
evidence is not sufficient to permit a reasonable trier of fact
to infer that defendants “met” in violation of ORS 192.630(2),
even under the Court of Appeals’ interpretation of that stat-
ute, then any decision as to what that statute means could
be viewed as unnecessary and perhaps dicta. Beyond that,
we think it fair to say that the correct interpretation of the
term “meet” in ORS 192.630(2) is far from clear. Both the
majority and the dissenting opinions in the Court of Appeals
offered persuasive and diametrically opposed interpreta-
tions of that term after invoking competing rules of stat-
utory interpretation and seeking to glean the legislature’s

8 The Court of Appeals noted that plaintiff had conceded that issue. Handy,
24 Or App at 652-53.

Pp 617

intent from scraps of legislative history and different views
of the purpose of the public meetings law.

Admittedly, courts are charged with determining
what a statute means even when the sources for making
that determination can only be described as opaque. But we
think the more prudent course in this case is to determine
initially whether we need to undertake that task. That is,
the better course in this case is to ask whether plaintiff's
evidence was sufficient to avoid defendant’s special motion
to strike, even under the interpretation of ORS 192.630(2)
that plaintiff urges us to adopt. If it was, only then would we
need to determine the statutory question that divided the
Court of Appeals—whether a quorum can “meet” by means
of seriatim communications. In considering the sufficiency
of plaintiff's evidence, we first clarify the standard of review
under ORS 31.150. We then turn to the evidence that plain-
tiff offered in response to defendants’ motion.

A. Standard of Review

We begin with the burden that the anti-SLAPP
statute places on a plaintiff once a defendant makes a prima
facie showing that the plaintiff's claim arose out of protected
statements, documents, or conduct under ORS 31.150(2). On
that issue, ORS 31.150(8) provides that, if a defendant

“mak[es] a prima facie showing that the claim against
which the motion [to strike] is made arises out of a state-
ment, document or conduct described in [ORS 31.150(2)],
*** the burden shifts to the plaintiff in the action to estab-
lish that there is a probability that the plaintiff will prevail
on the claim by presenting substantial evidence to support
a prima facie case.”

This court has not addressed what the requirement that a
plaintiff show a “probability” of prevailing “by presenting
substantial evidence to support a prima facie case” means,
and we look to the text, context, and legislative history of
ORS 31.150(3) to resolve that issue.

1. Text

Textually, the description of the plaintiff's burden
divides into two parts. The first part states that a plaintiff
must “establish that there is a probability that the plaintiff

618 po

will prevail on the claim.” ORS 31.150(3). The second part
specifies how a probability may be established—‘by pre-
senting substantial evidence to support a prima facie case.”
Id. We note, as an initial matter, that the two parts of that
description do not fit neatly together. In this context, pre-
senting a prima facie case means that the plaintiff has pre-
sented enough evidence to avoid a directed verdict—namely,
enough evidence to meet the plaintiff’s burden of production.
See State v. Rainey, 298 Or 459, 463, 693 P2d 635 (1985)
(defining “prima facie case”).° Ordinarily, presenting enough
evidence to avoid a directed verdict does not necessarily
equate with establishing a “probability” of prevailing, or at
least there is some tension between those two concepts.

We also note that ORS 31.150(3) requires a plaintiff
to present “substantial evidence” to support a prima facie
case. It is unclear whether the phrase “substantial evidence”
requires more evidence (or more persuasive evidence) than
ordinarily would be required to establish a prima facie case.
Put differently, when used in conjunction with requiring a
plaintiff to establish a “probability” of prevailing, the phrase
“substantial evidence” could suggest an intent to require
something more than the ordinary showing necessary to
meet a party’s burden of production. The text of the statute
does not provide a clear answer.

2. Context

The context does not shed much light on the issue.
There is no dispute that Oregon modeled its anti-SLAPP
statute on California’s. However, the section of Oregon’s
anti-SLAPP statute that gives rise to this issue is unique
to Oregon; California’s anti-SLAPP statute contains no
comparable section. Compare ORS 31.150(3), with Cal Code
Civ Proc § 425.16 (West 2001).” Because the relevant text

® The court observed in Rainey that the phrase “prima facie” can be used in
two senses. A prima facie case “‘may mean evidence that is simply sufficient to
get to the jury, or it may mean evidence that is sufficient to shift the burden of
proof?” 298 Or at 463 (quoting Lampos v. Bazar, Inc., 270 Or 256, 279, 527 P2d
876 (1974)). The context reveals that the legislature used the phrase in the first
sense,

%© When Oregon adopted its anti-SLAPP statute, California's anti-SLAPP
statute provided (and still provides) that, if that statute applies, a plaintiff must
“establis{h] that there is a probability that the plaintiff will prevail.” Cal Code

Po 619

of Oregon’s statute is not found in California’s statute, we
cannot presume, as we ordinarily would, that California
Supreme Court decisions that preceded the adoption of our
statute and that addressed the showing a plaintiff must
make in response to a motion to strike provide context for
interpreting ORS 31.150(3). Cf State v. Stockfleth/Lassen,
311 Or 40, 50, 804 P2d 471 (1991) (explaining that, “when
Oregon adopts the statute of another jurisdiction, the legis-
lature is presumed also to adopt prior constructions of the
statute by the highest court of that jurisdiction”).

8. Legislative history

We also consider the legislative history of Oregon’s
anti-SLAPP statute. As initially introduced, Oregon’s anti-
SLAPP bill was virtually identical to California’s statute.
Compare Bill File, House Bill (HB) 2460, Oct 17, 2000, with
Cal Code Civ Proc § 425.16 (West 2001); Tape Recording,
House Judiciary Subcommittee on Civil Law, HB 2460,
Mar 19, 2001, Tape 41, Side A (remarks of Dave Heynderickx).
Initially, subsection (1) of the bill provided, as California’s
anti-SLAPP statue provided, that a court shall grant a spe-
cial motion to strike “unless the plaintiff establishes that
there is a probability that the plaintiff will prevail on the
claim.” Compare Bill File, HB 2460, Oct 17, 2000, with Cal
Code Civ Proc § 425.16 (West 2001). Like California’s stat-
ute, Oregon’s bill initially did not provide further guidance
on what a plaintiff must show.

At a hearing before the House Judiciary Subcom-
mittee on Civil Law, two members of the Oregon State Bar’s
Practice and Procedure Committee testified that subsec-
tion (1) of the bill was problematic. Tape Recording, House
Judiciary Subcommittee on Civil Law, HB 2460, Mar 19,
2001, Tape 44, Side A and Tape 43, Side B (testimony of Mark
Morrell and Jeff Johnson). They explained that the use of
the word “probability” implied that the plaintiff had to show
a likelihood of prevailing and could require a court to weigh
the plaintiff's evidence. Jd. Not only would such a procedure
be contrary to existing rules of Oregon civil procedure, but

Civ Pro § 425.16(b)(1) (West 2001). The California statute lacks a section com-
parable to ORS 81.150(3), which sets out shifting burdens and specifies how a
plaintiff can establish a probability of prevailing, See id. § 425.16.

620 Po

dismissing a claim based on a trial court’s assessment of the
weight of a plaintiff's evidence could violate the plaintiff's
constitutional right to a jury trial. Id. To avoid those prob-
lems, the witnesses suggested that defendants could bring
summary judgment motions against SLAPP suits. However,
they agreed that summary judgment motions were unlikely
to be an effective way of meeting the legislature’s goal of
bringing a quick end to SLAPP suits. Id.

The House Subcommittee proposed amending the
bill to meet those concerns. Although the subcommittee
retained the requirement in subsection (1) that a plaintiff
faced with a special motion to strike must show a probabil-
ity of prevailing, it proposed two changes. First, it qualified
the statement in subsection (1) that a plaintiff establish a
probability of prevailing by adding the phrase, “in the man-
ner provided by subsection (3) of this section.” Bill File, HB
2460, Apr 20, 2001. Second, the subcommittee added sub-
section (3), which would have provided:

“A defendant making a special motion to strike under
the provisions of this section has the initial burden of mak-
ing a prima facie showing that the claim against which the
motion is made arises out of a statement, document or con-
duct described in subsection (2) of this section. If the defen-
dant meets this burden, the burden shifts to the plaintiff
in the action to make a prima facie showing of facts that
would, if proved at trial, support a judgment in favor of the
plaintiff on the claim. If the plaintiff meets this burden, the
court shall deny the motion.”

Id. Those amendments avoided the constitutional concerns
that the Bar had raised by stating that a plaintiff could
prove a “probability” of prevailing by offering sufficient
facts to make out a prima facie case—i.e., sufficient facts to
meet the plaintiff's burden of production. The subcommittee
approved the bill, as amended, which the House Judiciary
Committee and later the full House approved.

Representative Schrader carried the bill in the
Senate Judiciary Committee. In introducing the bill, he
proposed several amendments to it. Tape Recording, Senate
Committee on Judiciary, HB 2460, May 15, 2001, Tape 142,
Side A. Among other things, Representative Schrader pro-
posed amending the wording of subsection (8) of the bill. Id.

Po 621

The Bar proposed similar but slightly different modifications
to subsection (3). Id. at Tape 142, Side B (testimony of Bob
Olson). Those amendments required the plaintiff “to present
substantial evidence to support a prima facie case.” Senate
Committee on Judiciary, HB 2460, May 15, 2001, Exhibits
Q, U, and V (-8, -4, and -5 amendments to HB 2460).

The use of the phrase “substantial evidence” prompted
substantial discussion. Tape Recording, Senate Committee
on Judiciary, HB 2460, May 15, 2001, Tape 142, Side B
(remarks of Sen Courtney). Senator Courtney observed that
the proposed amendments appeared to place a “dramati-
cally” greater burden on the plaintiff than the defendant. Id.
He noted that, under subsection (8) of the bill, a defendant
had to make a prima facie showing while the plaintiff had
to respond with “substantial evidence.” Id. The representa-
tive from the Bar agreed that the bill required the plain-
tiff to offer “substantial evidence,” but he observed that “the
question is what does that mean.” Id. (Bob Olson). Senator
Courtney replied, “Well, we know what that means. That’s
a whole lot more than a prima facie.” Id. Senator Courtney
added that he was not saying that the proposed wording
was wrong, just that the amendment was “very significant”
because the phrase “substantial evidence” appeared to place
a greater burden on the plaintiff than the defendant. Id.

Dave Heynderickx from the Office of Legislative
Counsel and representatives from the Bar explained that
that had not been their intent. Heynderickx stated that, if
the defendant met its burden:

“then the burden shifts to the plaintiff to come forward at
that point and say I’ve got the goods. I’ve got something
more than just the allegations in my complaint, and I’m not
depending on hopefully finding something during discov-
ery. In essence, you have to come forward and show you've
got something to support, by affidavit or otherwise, your
case.”

Id. At that point, Senator Minnis interjected and explained
that the counsel to the Senate Judiciary Committee had
told him that “substantial evidence” merely required “some
showing of facts to support the prima facie basis of [the

622 P|

plaintiff's] case.” Id. Heynderickx agreed. He clarified that
the plaintiff has “to come forward to make a prima facie
showing. And what that normally means is just some affida-
vit or some showing on the elements of your case that you've
got something to support it.”“ Id.

With that point resolved, the discussion moved to
other issues, and the Senate Judiciary Committee amended
subsection (3) of the bill to provide:

“A defendant making a special motion to strike under the
provisions of this section has the initial burden of making
a prima facie showing that the claim against which the
motion is made arises out of a statement, document or con-
duct described in subsection (2) of this section. If the defen-
dant meets this burden, the burden shifts to the plaintiff
in the action to establish that there is a probability that the
plaintiff will prevail on the claim by presenting substan-
tial evidence to support a prima facie case. If the plaintiff
meets this burden, the court shall deny the motion.”

Bill File, HB 2460, May 30, 2001 (B-Engrossed Bill). The
Senate approved the bill, as amended, and the House
acceded to the Senate amendments. House and Senate
Journal, Regular Session, 2001, H-95.

The legislative history of HB 2460 establishes that,
in amending that bill, the Senate did not intend to depart
from the terms of subsection (3) as it emerged from the
House. Rather, the Senate agreed that, if a defendant makes
a prima. facie showing, then the burden shifts to the plaintiff
to submit sufficient evidence to make its prima facie case;
that is, the plaintiff must submit sufficient evidence from

1 Heynderickx explained that the wording of the amendments had been
taken from the California cases. Tape Recording, Senate Committee on Judiciary,
HB 2460, May 15, 2001, Tape 142, Side B. The California cases that preceded the
adoption of Oregon’s anti-SLAPP statute held that, if the defendant showed that
the anti-SLAPP statute applied, the plaintiff could establish a “probability” of
prevailing by “makting] a prima facie showing of facts which would, if proved at
trial, support a judgment in plaintiff's favor.” ComputerXpress, Inc. v. Jackson,
98 Cal App 4th’ 993, 1010, 113 Cal Rptr 2d 625 (2001); Church of Scientology
v, Wollersheim, 42 Cal App 4th 628, 646, 49 Cal Rptr 2d 620 (1996) (same); see
Matson v. Dvorak, 40 Cal App 4th 539, 548, 46 Cal Rptr 2d 880 (1995) (explaining
that a plaintiff can establish a “probability” of prevailing by demonstrating that
“the complaint is both legally sufficient and supported by a sufficient prima facie
showing of facts to sustain a favorable judgment if the evidence submitted by the
plaintiff is credited”).

Po 623

which a reasonable trier of fact could find that the plaintiff
met its burden of production. In using terms like “proba-
bility” and “substantial evidence,” the legislature did not
intend to require a plaintiff to do more than meet its burden
of production. Conversely, the legislature did not intend that
a plaintiff could avoid a special motion to strike by doing
less than that.”

B. Plaintiffs Evidence

In evaluating the sufficiency of plaintiff's evidence,
we assume without deciding that the Court of Appeals cor-
rectly held that a quorum of a public body can “meet” by
means of seriatim communications if each member of the
quorum communicates with the other members for the pur-
pose of deciding or deliberating toward a decision—in this
case, the decision whether to publicly release the attorney’s
letter. The difficulty with plaintiffs position is that he failed
to meet his burden of production on that issue. No reason-
able trier of fact could find from the evidence that plaintiff
submitted in response to defendants’ special motion to strike
that each of the three commissioners (Stewart, Leiken, and
Bozievich) decided or deliberated toward deciding whether
to release the attorney’s letter.

The relevant time period in this case is relatively
short. At 2:28 p.m. on May 2, the businessman’s attorney
emailed a copy of his letter to the Lane County District
Attorney. Within two hours, Lane County had received a
public records request for the letter. The next morning, at
9:00 am., the Lane County Commissioners held a public
meeting to decide whether to release the attorney's letter.
Within that roughly 18-hour window, two county commis-
sioners (Bozievich and Leiken) and the county administra-
tor exchanged emails. The county administrator also spoke
with a third commissioner (Stewart). Those communications

12 The Court of Appeals has relied on California decisions issued after Oregon
enacted ORS 31.150 to determine how much evidence a plaintiff must offer to
avoid a special motion to strike. However, what our statute means turns on
what the Oregon legislature understood in 2001 when it enacted ORS 31.150(8).
While the legislature intended to follow the California cases that existed in 2001,
California cases decided after 2001 are relevant, at most, only for their persua-
sive value.

624 PF

are insufficient, even when aggregated, to meet plaintiff's
burden of production.

One of the three commissioners (Leiken) said noth-
ing about disclosing the attorney’s letter. Rather, the only
communication from Leiken occurred on May 2 at 7:50 p.m.
when he emailed a reply to the county administrator’s email
with a copy to Bozievich and said, “I just read the letter from
[the attorney] and I am very concerned as well with regards
to the county’s potential liability.” The question whether
Lane County was financially liable as a result of plaintiff's
asking donors to make anonymous political contributions is
different from the question of how the county commission-
ers should respond to the media’s public records request to
release the attorney’s letter. Indeed, it was only a year ear-
lier that plaintiff's actions had resulted in the county’s being
held liable for $350,000, and the attorney’s letter posed the
possibility that plaintiff's more recent actions also could
subject the county to liability. It should come as no surprise
that Leiken was concerned that the county could be held lia-
ble for additional sums. However, no reasonable trier of fact
could find that, in expressing concern that the county could
be subject to liability, Leiken was deciding or deliberating
toward deciding whether to release the attorney’s letter.

To be sure, Leiken had received the county admin-
istrator’s email in which the administrator expressed her
belief that the letter should be released. Even assuming that
the administrator was acting as Commissioner Stewart’s
agent in expressing that belief, Leiken’s reply did not
address that issue. Rather, he addressed a separate issue.
Even if plaintiff can rely on a series of separate communi-
cations to establish that each member of a quorum met to
decide or deliberate towards deciding an issue, he must show
something more than Leiken’s passive receipt of the county
administrator’s email to establish that Leiken deliberated
whether to release the attorney’s letter. Without something
more, Leiken’s mere receipt of the county administrator’s
views on the public records request is not sufficient to per-
mit a reasonable inference that Leiken decided or deliber-
ated toward deciding that issue. Without Leiken, plaintiff
lacks a quorum.

Po 625

Plaintiffs evidence suffers from another problem.
The record does not show that Commissioner Stewart ever
made any statement orally or by email regarding whether
the letter should be released. Rather, all that the record
shows is that the county administrator represented in her
first email to Commissioners Bozievich and Leiken, which
she sent on May 2 at 7:38 p.m., that “Commissioner Stewart
asked me about county liability” and that “Commissioner
Bozievich had the same concern when I spoke to him ear-
lier.” As explained above, the fact that Stewart and Bozievich
expressed concerns about county liability does not imply
that they discussed whether to release the attorney’s letter
in response to the public records request. Those are two sep-
arate issues.

Admittedly, the county administrator expressed
her own view that the attorney’s letter should be released.
After noting the concern about county liability, she added, in
her first email, “I’m also concerned that it will look like we
are trying to hide something if we refuse the public records
request. Our practice is to use the exceptions if they exist,
but it feels wrong in this case. I’ll consult with counsel on
all of those issues and get back to you.” (Emphasis added.)
Although the county administrator expressed her thoughts
regarding releasing the letter, there is nothing in this
record to show what Commissioner Stewart thought about
that issue. Nor is there anything to show that, in expressing
her own thoughts, the county administrator was acting as
Stewart’s agent or seeking to deliberate on his behalf with
Bozievich and Leiken toward a decision whether to comply
with the public records request. Any conclusion that the
county administrator was acting as Stewart’s agent is mere
speculation.

Finally, we note that, as the county has argued,
the district attorney initially made the decision whether to
release the attorney’s letter in response to the public records
request. He either had not made or had not communicated
that decision before 7:09 a.m. on May 3, less than two hours
before the Commission held a public emergency meeting at
9:00 a.m. Because the decision to release the letter was ini-
tially the district attorney’s, it is less likely that any of the

626 Po

commissioners would have sought to decide that issue before
they found out what his decision was. Admittedly, at some
point after 7:09 a.m. on May 3, the county administrator
learned that the district attorney was going to invoke the
exception and not release the letter. At some point between
7:09 a.m. and 9:00 a.m. on May 3, the county administra-
tor conferred with Commissioners Leiken and Bozievich
to decide whether to hold an emergency meeting, and she
spoke with Commissioner Stewart before doing so. It is not
impossible that, in discussing whether to call an emergency
meeting, the county administrator spoke to Stewart, Leikin,
and Bozievich about the merits of the meeting. However, no
evidence in the record points in that direction, and plaintiff
is left with nothing other than speculation to fill in the gaps
in his evidence.

We note one final evidentiary point. It is clear that
the county administrator spoke with Leikin and Bozievich
about whether to hold the emergency meeting, and a trier of
fact reasonably could infer that she spoke to Stewart about
the same issue. However, the Court of Appeals held that the
decision whether to hold an emergency meeting was not sub-
ject to Oregon’s public meetings law, and plaintiff has not
challenged that decision on review. Plaintiff has not met his
burden to produce evidence from which a reasonable trier
of fact could find that a quorum of the commissioners met
privately to decide or deliberate toward deciding whether to
release the attorney’s letter.

One issue remains. As noted above, the trial court
denied a request for further discovery that plaintiff had
included in his response to defendant’s motion to strike. See
ORS 31.152(2).° Plaintiff assigned error to that ruling on
appeal, but the Court of Appeals found it unnecessary to
reach it because it concluded that plaintiff had introduced
sufficient evidence regarding the second part of his second
claim for relief to meet his burden of production. Because we

% Oregon’s anti-SLAPP statute provides that “[alll discovery in the pro-
ceeding shall be stayed upon the filing of a special motion to strike under ORS
81.150” and that “[t]he stay of discovery shall remain in effect until the entry of
judgment.” ORS 31.152(2). However, subsection (2) also provides that the trial
court, “on motion and for good cause shown, may order that specified discovery be
conducted notwithstanding the stay imposed by this subsection,” Id.

FO
Po 627

have reached a different conclusion, we remand the case to
the Court of Appeals so that it can consider whether plain-
tiff showed good cause for conducting further discovery and,
if he did, whether the trial court abused its discretion in
denying his request.

III. CONCLUSION

Plaintiff's first claim for relief challenged defen-
dants’ decisions regarding notice, holding an emergency
meeting, and not providing minutes. The Court of Appeals
held that those decisions were not subject to a special
motion to strike under Oregon’s anti-SLAPP statute and,
for that reason, reversed the trial court’s judgment on that
claim. Defendants do not challenge that part of the Court of
Appeals decision.

Plaintiff's second claim for relief alleged that defen-
dants had violated the public meetings law by deciding or
deliberating toward deciding (1) whether to hold an emer-
gency meeting and (2) whether to release the attorney’s letter.
The Court of Appeals held that the first decision—whether
to hold an emergency meeting—was not subject to the public
meetings law, and plaintiff has not challenged that holding
on review. Regarding the second decision, we have concluded.
that plaintiff failed to offer sufficient evidence from which a
reasonable trier of fact could find that defendants met pri-
vately to decide or deliberate toward deciding whether to
release the letter. We reverse the Court of Appeals decision
regarding that aspect of plaintiff's second claim and remand
so that it can consider whether the trial court abused its dis-
cretion in denying plaintiff's request for further discovery.

The trial court dismissed plaintiff's third claim for
injunctive relief because it depended on the first two claims
for relief. The Court of Appeals reversed the trial court’s
judgment on that claim, presumably so that the trial court
could reevaluate its ruling in light of the Court of Appeals
decision. Neither party has challenged that part of the Court
of Appeals’ ruling.*

4 ‘The trial court also awarded defendant's costs and attorney fees pursuant
to ORS 31.150, The Court of Appeals reversed that award, and neither party has
challenged that ruling on review.

628 Po

The decision of the Court of Appeals is affirmed
in part and reversed in part. The case is remanded to the
Court of Appeals for further consideration consistent with
this decision.

629

Argued and submitted September 20, decision of Court of Appeals reversed,
restitution order of trial court affirmed November 25, 2016

STATE OF OREGON,
Petitioner on Review,
v.
SCOTT B. GERHARDT,
Respondént on Review.
(CC 12P3329; CA A152760; SC S063612)
385 P3d 1049

Keith L. Kutler, Assistant Attorney General, Salem,
argued the cause and filed the brief for petitioner on
review. Also on the brief were Ellen F. Rosenblum, Attorney
General, Paul L. Smith, Deputy Solicitor General, and Cecil
A. Reniche-Smith, Senior Assistant Attorney General.

Morgen E. Daniels, Deputy Public Defender, Salem,
argued the cause and filed the brief for respondent on review.
Also on the brief was Ernest G. Lannet, Chief Defender.

Erin K. Olson, Law Office of Erin K. Olson, P.C., Portland,
filed the brief for amici curiae S.G. (crime victim), National
Crime Victim Law Institute, and Oregon Crime Victims Law
Center. Also on the brief were Margaret Garvin, Portland,
and Rosemary W. Brewer, Portland.

630 Ld

Before, Balmer, Chief Justice, and Kistler, Walters,
Landau, Baldwin, and Brewer, Justices, and Shorr, Justice
pro tempore.**

LANDAU, J.

The decision of the Court of Appeals is reversed. The res-
titution order of the trial court is affirmed.

** Nakamoto, J., did not participate in the consideration or decision of this
case.

pe 631

LANDAU, J.

Defendant was convicted of strangling his wife. At
sentencing, the trial court awarded the victim restitution
for attorney fees that she incurred to enforce a no-contact
order that the court had previously entered while defen-
dant was in jail as well as to obtain a permanent protective
order. The issue in this case is whether those attorney fees
may be awarded as restitution under ORS 187.106(1)(a),
which authorizes restitution when a person is convicted of a
crime “that has resulted in economic damages.” The Court
of Appeals concluded that they may not be awarded and
reversed. State v. Gerhardt, 273 Or App 592, 359 P3d 519
(2015). We conclude that, because defendant concedes that
the attorney fees were caused by his conduct and were a
reasonably foreseeable result of that conduct, the trial court
did not err in awarding restitution for those fees. We there-
fore reverse the Court of Appeals.

The relevant facts are not in dispute. Defendant
was arrested and charged for strangling his wife. The trial
court entered a no-contact order under ORS 135.247(2),
which provides that, when a defendant is charged with a
crime that constitutes domestic violence, the court must
“enter an order prohibiting the defendant from contacting or
attempting to contact the victim, either directly or through
a third party, while the defendant is in custody.”

While in jail, defendant repeatedly violated the
no-contact order. The victim hired an attorney to help her
enforce the no-contact order and to obtain a permanent pro-
tective order under the Family Abuse Prevention Act, ORS
107.700 to 107.735, incurring expenses of $1,880.

Defendant ultimately pleaded guilty to the stran-
gulation charge, and the trial court ordered him to pay
restitution in the amount of $1,880 for the victim’s attor-
ney’s fees. Defendant objected to an award of restitution.
He argued that attorney fees of any sort are not the type of
damages that are contemplated under the statute authoriz-
ing an award of restitution. Defendant reasoned that ORS
137.106(1)(a) authorizes restitution for “economic damages,”
which the relevant statutes provide has the meaning given
in ORS 31.710(2)(a). That statute, in turn, defines “economic

632 Le

damages” as “objectively verifiable monetary losses,” includ-
ing charges necessarily incurred for a number of specified
services. Defendant argued that, because legal services are
not among the list of services that qualify, attorney fees
are not economic damages for which restitution is available
under ORS 187.106(1)(a). The trial court rejected defen-
doe argument and awarded restitution in the amount of
1,880.

Defendant appealed, arguing that the trial court
erred in awarding restitution. He offered two arguments in
support. First, he reprised his contention that attorney fees
are “not the type of damages” that may be recovered under
the statutes. Second, he argued that, even if attorney fees
are the type of damages that may be the subject of a resti-
tution award, the particular attorney fees incurred in this
case were not, because they were not incurred as a “result”
of the criminal charge of strangulation. Rather, defendant
argued, the victim’s attorney fees were incurred as a result
of defendant’s violation of the no-contact order.

The state argued that, although defendant had pre-
served his contention that attorney fees are not the sort of
damages for which restitution may be ordered, he did not
preserve his alternate contention that, even if attorney fees
may sometimes be awarded, they could not be in this case
because of an absence of a causal relationship between his
crime and the fees incurred. In any event, the state argued,
the fees were incurred as a result of defendant’s conduct in
strangling the victim.

The Court of Appeals agreed with defendant’s argu-
ment concerning the causal relationship between a crime
and economic damages that may be awarded as restitution.
The court concluded that, although defendant’s conduct in
strangling the victim “was a necessary predicate” for the
necessity of hiring an attorney, it “was not sufficient to cause
the victim to incur the attorney fees.” Gerhardt, 273 Or App
at 595. In the court’s view, “it was defendant’s conduct after
he committed the crime that led the victim to conclude that
she needed to hire an attorney,” not the crime itself. Id.
(emphasis in original). The court did not address the state’s
contention that defendant had not preserved that argument;

Po 633

nor did it address defendant’s argument that attorney fees
are categorically excluded as “economic damages” under the
restitution statute. Its decision did prompt a dissent, though,
which took issue with the majority’s decision to require a
“sufficient” cause in excess of “but for” causation to justify
an award of restitution. Id. at 600-04 (Flynn, J., dissenting).

The state sought review. In the meantime, this
court decided State v. Ramos, 358 Or 581, 588, 358 P3d 446
(2016). In that case, the court rejected the argument that
attorney fees are categorically excluded from restitution
awards. Id. at 602. It further held that, under ORS 187.106,
whether a crime “result[s] in” economic damage is a function
of two considerations. First, there must be factual causation.
Ramos, 358 Or at 593. Factual causation is established if
the economic damages would not have occurred but for the
defendant’s crime. Id. at 593 n 6. The court noted the possi-
bility that a different type of causation—“substantial factor”
causation—might apply, but the court reserved that question.
for another day, given the nature of the parties’ arguments
in that case. Id. at 586 n 3. Second, any economic damages
awarded as restitution under ORS 137.106 must have been a
reasonably foreseeable consequence of the defendant's crime.
Id. at 603-04. The court rejected the contention that the test
should be more demanding than reasonable foreseeability
and that, instead, the court should require that economic
damages be “direct.” Id. at 597.

Following this court’s decision in Ramos, the par-
ties in this case submitted briefs and arguments in light
of the principles set out in that opinion. For its part, the
state argues that the disposition of this case is straight-
forward. There is no dispute that, but for defendant’s act of
strangling the victim, the attorney fees would not have been
incurred, and it is equally undisputed that the incurring of
those fees was a reasonably foreseeable consequence of his
crime. Under Ramos, the state concludes, the award of res-
titution was proper.

Defendant does not contest that the attorney fees
were incurred, at least in a but-for sense, as a result of his
crime. Nor does he contend that, as a matter of law, the fees
were not a reasonably foreseeable consequence of that crime.

634 iL

Instead, defendant argues that the court should interpret
ORS 187.106 to require more than but-for causation. As
defendant sees it, Ramos “left open” the type of causation
that the statute contemplates. Defendant proposes that
the court address the issue in this case and conclude that
restitution is appropriate only if his crime is “sufficient in
itself to cause the victim’s damages,” that is, only if no other
causal factor may contribute to the damages. In this case,
defendant argues, his crime of strangling the victim was not
the sole cause of her attorney fees; rather, it was his subse-
quent conduct of violating the no-contact order that caused,
at least in part, the victim to incur the fees.

Defendant further argues that, if the court rejects
his sole-cause proposal, it should adopt as an alternative
requirement that the state must prove that, “in addition
to being a ‘but-for’ cause of the damages, the criminal con-
duct was a substantial factor in bringing about the victim’s
harm.” Defendant, however, uses the term “substantial fac-
tor” to suggest what he calls a “‘but-for’-plus” test. As defen-
dant uses the term, “substantial factor” causation would
require that, when a crime is one of multiple causes of eco-
nomic damages, that crime must be a relatively more signif-
icant component in the series of causal events. In this case,
he argues, although his crime may have been a but-for cause
of the victim’s attorney fees, the more significant link in the
chain of causation was his subsequent conduct in violating
the no-contact order.

At the outset, we are confronted by a problem of
preservation. State v. Wyatt, 331 Or 335, 346-47, 15 P3d 22
(2000) (appellate courts always have obligation to address
preservation). In this case, none of the arguments that defen-
dant asserts to us were asserted to the trial court. As we
have noted, the sole argument that defendant offered to the
trial court was that attorney fees of any sort categorically
are not the type of economic damages that may be the sub-
ject of a restitution award. He made no mention of causation
or foreseeability. Had defendant raised those matters, the
state might have made a different record, which could have
obviated the need for any appeal. Only in the most general
sense did defendant put in issue whether the attorney fees

Po 635

in this case were a “result” of his criminal conduct within
the meaning of ORS 137.106.

But we need not determine whether that was suffi-
cient to preserve his claim, however. Even assuming that it
was, defendant’s concessions foreclose the relief he seeks.

As we have explained, under Ramos, whether a crime
has “resulted in” economic damages under ORS 137.106 is a
function of two considerations, namely, causation and fore-
seeability. We begin with causation. Causation is satisfied if
the crime is a but-for cause of the economic damages. Ramos,
358 Or at 593. And defendant has conceded that his crimi-
nal act was a but-for cause of the victim’s attorney fees. To
the extent that defendant argues for a standard requiring a
more direct causal connection, we rejected that argument in
Ramos. Id. at 597.

Defendant’s argument that we should employ a “sub-
stantial factor” test likewise is unavailing. As we under-
stand it, defendant uses the term “substantial factor” in a
way that is foreign to the ordinary use of the term and to
the manner in which we referred to it in Ramos. When we
use the term “substantial factor” in the causation context, it
refers to cases in which “the negligence of multiple tortfea-
sors combines to produce harm,” and each tortfeasor may be
liable as a factual cause of the injury. Lasley v. Combined
Transport, Inc., 351 Or 1, 6, 261 P3d 1215 (2011). Defendant
uses the term in a different sense, one that involves weigh-
ing the relative role of different causes in a chain of events
and evaluating the extent to which the existence of the other
causes attenuates the connection between an initial crime
and resulting economic damages. As shown by our discus-
sion of the issue in Ramos, that is not a problem of causation;
rather, it is addressed in the consideration of the foreseeabil-
ity of the damages. 358 Or at 597-99.

We turn, then, to foreseeability. Foreseeability ordi-
narily poses a question of fact. See Piazza v. Kellim, 360 Or
58, 69-70, 377 P3d 492 (2016) (“The concept of foreseeability
embodies a prospective judgment about a course of events; it
‘therefore ordinarily depends on the facts of a concrete situa-
tion’ and, if disputed, is a jury question.” (Quoting Fazzolari

636 Le

v. Portland School Dist. No. 1J, 303 Or 1, 4, 734 P2d 1326
(1987).)). In this case, as we have noted, defendant does not
argue that, on the record before it, the trial court could not
find that the victim’s attorney fees were a foreseeable conse-
quence of his crime. In light of the concession, we need not
address further that component of the analysis.

In short, Ramos holds that restitution may be
awarded under ORS 137.106 if defendant’s crime was a
factual cause of the victim’s economic damages and those
damages were the reasonably foreseeable consequence of
the crime. In this case, defendant concedes that his crime
was a but-for cause of the victim’s attorney fees and that
those fees were a reasonably foreseeable consequence of that
crime. Consequently, the trial court did not err in awarding
restitution, and the Court of Appeals erred in holding to the
contrary.

The decision of the Court of Appeals is reversed.
The restitution order of the trial court is affirmed.

638

On respondent on review’s petition for attorney fees filed May 26, considered and
under advisement September 27; petition for attorney fees allowed, respondent
on review awarded $30,771 as attorney fees on review, award is effective upon

cirouit court's entry of judgment on remand from Court of Appeals
December 8, 2016

Sohail MASOOD,
Respondent on Review,
vu
i SAFECO INSURANCE
| COMPANY OF OREGON,
an Oregon Insurance Company,
Petitioner on Review,
| and
OVERLAND SOLUTIONS, INC.,
Defendant-Respondent,
and
| A.O. A. WEST, INC.,
an Oregon corporation,
Defendant.
Sohail MASOOD,
Respondent on Review,
v.
SAFECO INSURANCE
COMPANY OF OREGON,
an Oregon Insurance Company,
Petitioner on Review,
and
A. O. A. WEST, INC.,
an Oregon corporation,
Defendant.
(CC CV 09-070-070; CV 10-060-761;
CA A149925 (Control), A149926;
SC 8063921)

386 P3d 646

Sara Kobak, Schwabe, Williamson & Wyatt, P.C.,
Portland, filed the petition for attorney fees and the reply
for respondent on review. Also on the petition and reply were
David Axelrod and Jordan R. Silk.

R. Daniel Lindahl, Bullivant Houser Bailey PC, Portland,
filed the objections to the petition for attorney fees for peti-
tioner on review. Also on the objections was John A. Bennett. -

Before, Balmer, Chief Justice, and Kistler, Walters,
Landau, Baldwin, and Brewer, Justices.*

LANDAU, J.

The petition for attorney fees is allowed. Respondent on
review is awarded $30,771 as attorney fees on review. The
award is effective upon the circuit court’s entry of judgment
on remand from the Court of Appeals.

* Nakamoto, J., did not participate in the consideration or decision of this
case.

640 PO

LANDAU, J.

Plaintiff Masood petitions for an award of $30,771
in attorney fees incurred before this court in responding to
the petition for review filed by defendant Safeco Insurance
Company of Oregon. He claims entitlement to attorney fees
under ORS 742.061(1), which provides for such an award
when a plaintiff brings an action “upon any policy of insur-
ance” and obtains a recovery in excess of any previous tender
by the insurer on the policy. Defendant objects on the ground
that plaintiff has failed to meet the statutory requirements
for such an award. Defendant does not otherwise challenge
the amount or reasonableness of the fees requested. For the
reasons that follow, we award plaintiff the entirety of the
attorney fees that he requests.

The facts relevant to the petition are not in dis-
pute. Plaintiff purchased an insurance policy from defen-
dant that provided coverage for his house, other structures
on his property, personal property, and loss of use for up to
12 months. The policy also included “extended dwelling cov-
erage,” which provided additional coverage of 50 percent to
pay for unexpected repair or rebuilding costs that exceeded
the base amount of coverage for the house.

A fire completely destroyed plaintiff's house and
its contents and damaged other structures on the property.
Plaintiff and defendant disagreed about what was owed
under the policy. In particular, the parties disagreed about.
whether plaintiff was entitled to the extended dwelling cov-
erage without having to first actually replace the house.
Plaintiff contended that he had entered into an oral agree-
ment with one of defendant's large-loss adjusters that obli-
gated defendant to pay the full dwelling coverage under the
policy, including the extended dwelling coverage. According
to plaintiff, the oral contract provided that defendant would
pay plaintiff “the full replacement cost of [plaintiffs] Home
up to the express limits of The Policy, including its enhanced
coverage[.]”

Plaintiff brought an action for breach of contract
against defendant, based on its failure to pay the extended.
dwelling coverage. Defendant responded with a counter-
claim for breach of contract, alleging that plaintiff had

Po 641

misrepresented the value of various fixtures that had been
destroyed in the fire. Defendant asserted that, under the
terms of the underlying policy of insurance, the policy is
void if the insured willfully conceals or misrepresents facts
material to the insurance and the insurer relies on those
misrepresentations.

After a lengthy and complicated trial, the jury
returned a special verdict finding for plaintiff on his breach
of contract claim and assessing damages in the amount of
the limits of the extended dwelling coverage. The jury also
found for defendant on the counterclaim, however.

The trial court declined to enter a judgment award-
ing plaintiff any damages. The court concluded that, in light
of the jury’s findings on the counterclaim, the insurance pol-
icy had been voided, and as a result, it was defendant who
was entitled to a judgment for all payments that it had made
under the policy up to that time.

Plaintiff appealed. The Court of Appeals concluded
that the trial court had erred in even sending the counter-
claim to the jury because there was no evidence that defen-
dant had reasonably relied on any misrepresentations by
plaintiff. Masood v. Safeco Ins. Co. of Oregon, 275 Or App 315,
865 P3d 540 (2015). In consequence, the court concluded,
there was no basis for voiding the policy and failing to enter
judgment for plaintiff in the full amount of the extended
dwelling coverage. The court reversed the judgment in
defendant’s favor on the counterclaim and remanded the
case to the trial court with instructions to enter judgment
for plaintiff in the amount of the jury’s award.

Defendant petitioned this court for review, and
plaintiff filed a response to that petition. We ultimately
denied defendant’s petition. Masood v. Safeco Ins. Co. of
Oregon, 359 Or 525, 379 P3d 515 (2016). Plaintiff now seeks
an award of $30,771 in attorney fees incurred before this
court, consisting of $24,501.50 for fees in responding to
defendant’s petition for review and $6,269.50 for fees in pre-
paring the petition for attorney fees. He contends that, given
the Court of Appeals’ decision, he is the prevailing party on
appeal and is entitled to fees under ORS 742.061. He asserts
that he satisfied all the requirements for an award of fees

642 Po

under that statute. Specifically, he contends that he pre-
vailed on his action on the policy and, in addition, prevailed
on defendant’s counterclaim.

Defendant objects to an award of fees under ORS
742.061(1). First, defendant asserts that plaintiff did not
prevail in an action on the policy, as the statute requires.
Defendant argues that plaintiffs action was for breach of
a new, separate oral agreement with its large-loss adjuster,
not on the policy itself. Second, defendant argues that plain-
tiffs “alternate theory” that he is entitled to fees based on
his success in defeating defendant’s counterclaim likewise is
insufficient to justify an award of fees under ORS 742.061(1).
In defendant’s view, in defeating that counterclaim, plaintiff
failed to “recover” anything, as the statute requires.

We begin with the parties’ contentions about whether
plaintiff prevailed in an action “upon [al policy of insur-
ance,” because it is dispositive. ORS 742.061(1) provides
that, subject to exceptions not pertinent to this case, if a
plaintiff files a proof of loss with an insurer and settlement
is not made within six months, the plaintiff is entitled to an
award of attorney fees if the plaintiff brings an action “in
any court of this state upon any policy of insurance of any
kind or nature,” and the plaintiffs recovery in that action
exceeds the amount of any tender that the defendant made
in that action. In this case, there is no dispute that plaintiff
filed a proof of loss, and no settlement occurred within six
months. Likewise, there is no dispute that the total amount
that plaintiff recovered exceeds any amount that defendant
may have tendered in this case. The issue is whether plain-
tiffs subsequent action was one “upon [a] policy of insur-
ance” within the meaning of the statute.

This court’s decision in Travelers Insurance Co. v.
Plummer, 278 Or 387, 563 P2d 1218 (1977), is instructive
on that issue. In that case, the Plummers were involved
in an automobile accident. Travelers, their insurer, paid
them under their policy, in return for a “loan receipt” that
required them to pursue claims against any third persons
liable for their loss and to repay Travelers if they recovered
their damages. The Plummers then initiated a successful
action against the third party who had caused the accident.

Po 643

They tendered their recovery to Travelers, but deducted
from that recovery one-third as the fee for the attorney who
represented them in that action. Travelers objected to the
deduction and initiated an action to require the Plummers
to return the full amount of their recovery from the third
party. The Plummers ultimately prevailed, and the trial
court awarded attorney fees under the predecessor stat-
ute to ORS 742.061(1). Travelers appealed the attorney fee
award, arguing that the Plummers had not recovered in an
action “upon any policy of insurance” within the meaning
of that statute. According to Travelers, the action had been
based on the separate loan receipt, not the policy of insur-
ance. Id. at 389-92.

This court rejected Travelers’ argument. “The deci-
sive question,” the court explained, “is the source of the
insured’s claim.” Id. at 392. In that case, the source of the
insured’s claim was “the insurance policy, as it would be if
the company had never advanced the money and thereafter
demanded its return.” Id.; see also Williams v. Stockman’s
Life Ins., 250 Or 160, 172, 441 P2d 608 (1968) (insured was
entitled to attorney fees under predecessor to ORS 742.061
after prevailing in action with “declaratory judgment over-
tones,” because the “essential nature” of the action was to
recover under the insurance policy).

The determinative question is thus the source of the
insured’s claim. In this case, the source of plaintiff's claim
for extended dwelling coverage unmistakably is the policy
of insurance that plaintiff purchased from defendant. No
doubt, there was a separate oral agreement between plain-
tiff and defendant’s large-loss adjuster. But the very terms
of that oral agreement referred to, incorporated, and were
predicated on the underlying policy. The subject of that
agreement was the policy, and the agreement cannot fairly
be understood without reference to that policy. It was that
defendant would pay to plaintiff “the full replacement cost
of [plaintiffs] Home up to the express limits of The Policy,
including its enhanced coverage.” (Emphasis added.)

That plaintiff's was an action “upon [a] policy of
insurance” is further demonstrated by defendant’s own
counterclaim. As we have noted, defendant asserted that,

644 po

under its policy of insurance, plaintiff could recover noth-
ing because plaintiff had concealed or misrepresented facts
material to determining coverage under that policy. Thus,
defendant invoked the very policy it now contends was not
at issue as the basis for its contention that plaintiff was
not entitled to recover the extended dwelling coverage.
Logically, the defense could apply only to the extent that
an insured otherwise is entitled to coverage under the pol-
icy. See American Federal Savings v. Rice, 76 Or App 635,
641, 711 P2d 150 (1985) (“[A] finding of coverage necessarily
must precede a finding that the coverage is voided [because
of fraud or misrepresentation].”).

Because we conclude that plaintiffs action was
“upon. [a] policy of insurance” within the meaning of ORS
742.061(1), we need not address whether defendant is cor-
rect about the insufficiency of plaintiff's “alternative” the-
ory of recovery under the statute, based on his defeat of the
counterclaim. Defendant advances no other objection to the
requested award of fees.

The petition for attorney fees is allowed. Respondent
on review is awarded $30,771 as attorney fees on review.
The award is effective upon the circuit court’s entry of judg-
ment on remand from the Court of Appeals.

645

On petition to review ballot title filed September 6, considered and under
advisement October 25; ballot title referred to Attorney General for modification
December 8, 2016

Jeff JIMERSON,
Marylin Shannon,
and Suzanne Belatti,
Petitioners,

v.

Ellen F. ROSENBLUM,
Attorney General, State of Oregon,
Respondent.

(SC S064348)

885 P3d 1086

Jill O. Gibson, Gibson Law Firm LLC, Portland, filed the
petition for review and reply memorandum for petitioners.

Shannon T. Reel, Assistant Attorney General, Salem,
filed the answering memorandum for respondent. Also on
the briefs were Ellen F. Rosenblum, Attorney General, and
Benjamin Gutman, Solicitor General.

Margaret S. Olney, Bennett Hartman Morris, Portland,
filed the brief for amici curiae Stacy Cross, Lisa Gardner,
Chantal Downing, Kimberly McCullough, Michele Stranger
Hunter, and Kara Carmosino.

BALDWIN, J.

The ballot title is referred to the Attorney General for
modification.

646 Ld

BALDWIN, J.

Petitioners seek review of the Attorney General’s
certified ballot title for Initiative Petition (IP) 1 (2018), con-
tending that the “yes” and “no” result statements and the
summary do not comply with the requirements set out in
ORS 250.035(2). We review the certified ballot title to deter-
mine whether it substantially complies with those require-
ments. See ORS 250.085(5) (setting out that standard). For
the reasons explained below, we refer the ballot title to the
Attorney General for modification of the summary.

IP 1 is a proposed amendment to the Oregon
Constitution that, if approved, would prohibit public funding
for abortions, “except when medically necessary or as may
be required by federal law.” Section 1 of IP 1 sets out that
general prohibition, and Section 2 sets out several related
definitions. Section 3 sets out two exceptions to the prohibi-
tion in Section 1; the first exception is as follows:

“Public funds may be spent to pay for an abortion when
federal law requires states to provide funding for abor-
tions, such as in circumstances including rape or incest,
in which case this [new constitutional provision] shall be
applied consistent with federal law to the extent the federal
requirement is found to be constitutional.”

IP 1, § 3(1). Section 4 provides that nothing in the proposed
amendment “shall be construed as prohibiting the expendi-
ture of public funds to pay for health insurance,” so long as
“such funds are not spent to pay or reimburse for the costs of
performing abortions.”

The Attorney General drafted a ballot title for IP 1,
ORS 250.065(3), and the Secretary of State circulated that
title for public comment, ORS 250.067(1). After receiving
comments, the Attorney General modified the draft ballot
title, ORS 250.067(2)(a), and certified the following ballot
title to the Secretary of State:

“Amends Constitution: Prohibits spending ‘public
funds’ (defined) directly/indirectly for ‘abortion’
(defined); exceptions; reduces abortion access

“Result of ‘Yes’ Vote: ‘Yes’ vote amends constitution, pro-
hibits spending ‘public funds’ (defined) directly/indirectly

Po 647

for any ‘abortion’ (defined), health plans/insurance cover-
ing ‘abortion’; limited exceptions; reduces abortion access.

“Result of ‘No’ Vote: ‘No’ vote retains current law that
places no restrictions on spending public funds for abortion
or health plans covering abortion when approved by medi-
cal professional.

“Summary: Amends Constitution. Under current law,
abortions may be obtained, when approved by medical
professional, under state-funded health plans or under
health insurance procured by or through a public employer
or other public service. Measure amends constitution to
prohibit spending ‘public funds’ (defined) for ‘abortion’
(defined) or health benefit plans that cover ‘abortion’
Measure defines ‘abortion, in part, as ‘purposeful termi-
nation of a clinically diagnosed pregnancy’ Exception for
ectopic pregnancy and for pregnant women in danger of
death due to her physical condition. Exception for spend-
ing required by federal law, if requirement is ‘found to be
constitutional.’ No exception for pregnancy resulting from
rape or incest. Effect on spending by public entities other
than the state is unclear. Measure reduces access to abor-
tion. Other provisions.”

Petitioners are the chief petitioners for IP 1 and
also are electors who timely submitted comments about the
Attorney General’s draft ballot title for IP 1 and who now are
dissatisfied with the certified ballot title, ORS 250.085(2).
They challenge the “yes” and “no” result statements and
the summary, including aspects that the Attorney General
added after the comment period ended. See ORS 250.085(6)
(permitting consideration of such arguments). We have
considered petitioners’ arguments regarding the “yes” and

no” result statements in the certified title, and conclude
that those statements substantially comply with statutory
requirements. See ORS 250.035(2)(b), (c) (“yes” result state-
ment must set out simple and understandable statement,
within 25-word limit, that describes result if proposed mea-
sure approved; “no” result statement must describe, within
25-word limit, result if proposed measure is rejected). As
explained below, however, we agree with one of petitioners’
arguments challenging the summary, and we therefore refer
the summary to the Attorney General for modification.

648 PL

As noted, IP 1 contains an exception based on “fed-
eral law,” to the effect that public funds may pay for abor-
tions when federal law requires states to provide abortion
funding, “such as in circumstances including rape or incest,”
so long as the federal requirement is constitutional. IP 1,
§ 3(1). The certified summary accurately (but only gener-
ally) refers to that exception in the sentence that states,
“Exception for spending required by federal law, if require-
ment is ‘found to be constitutional.” Petitioners argue, how-
ever, that the following sentence in the summary—[n]o
exception for pregnancy resulting from rape or incest”—is
speculative and misleading. Specifically, in their view, that
sentence is based on the Attorney General's legal interpre-
tation that current federal law does not require state spend-
ing for abortion in instances of rape or incest. Petitioners
contend, however, that current federal law is unclear, and
so the Attorney General may not speculate how that issue
might be resolved and how it will affect the measure. See
ORS 250.035(2)(d) (summary must set out concise and
impartial statement, within 125-word limit, summarizing
measure and major effect); Conroy v. Rosenblum, 358 Or
807, 815, 371 P3d 1180 (2016) (when legal effect of measure
unclear, court will not speculate about it).

The Attorney General responds that the sentence at
issue is accurate. She explains that the “federal law” excep-
tion in IP 1 applies to federal law that “requires” states to
provide abortion funding (emphasis added), “such as in cir-
cumstances including rape or incest.” IP 1, § 3(1). Current
federal law, she continues, “allows” state abortion funding
in circumstances of rape or incest, but does not “require[]”
such funding! Thus, current federal law does not fall within
the exception, and the summary therefore correctly states
that IP 1 does not provide an exception for public funding
of abortions in instances of rape or incest. Amici add that,
regardless of the state of federal law, IP 1 contains no rape
or incest exceptions for purposes of state law; thus, the

? See Pub L 118-76, § 613, 128 Stat 227 (2014) (prohibition on appropriating
public funds to pay for abortions); id. § 614 (exception to appropriations prohibi-
tion for abortions of pregnancies resulting from rape or incest, or when woman’s
life would be endangered if carried to term).

a sia

summary accurately explains that the proposed new state
prohibition contains no such exception.

We agree with petitioners that the sentence, “No
exception for pregnancy resulting from rape or incest|,]” is
misleading and must be modified. That sentence suggests
that IP 1 categorically would prohibit public spending for
abortions in instances of rape or incest. But IP 1 does con-
tain an exception—dependent on federal law—that may pro-
vide for public funding of abortion in those circumstances.
Whether federal law currently “requires” such funding, IP 1,
§ 3()—or, in the future, may (or may not) require it—
is uncertain, but it is inaccurate and misleading to state
that IP 1 contains no such exception at all. See Berman v.
Kroger, 347 Or 581, 584-85, 227 P3d 692 (2010) (aspects of
ballot title, including summary, that focused on only partial
application of proposed measure were impermissibly mis-
leading); Wolf v. Myers, 343 Or 494, 501, 173 P3d 812 (2007)
(although preparing ballot title necessarily requires some
level of interpretation, when specific provision of measure
subject to multiple interpretations, Attorney General may
not choose one interpretation for purposes of ballot title).
The summary therefore does not substantially comply with
ORS 250.035(2)(d) and must be modified.

The ballot title is referred to the Attorney General
for modification.

650

Argued and submitted September 20, decision of Court of Appeals and judgment
of circuit court affirmed December 8, 2016

WEST HILLS
DEVELOPMENT COMPANY,
an Oregon corporation,
Respondent on Review,
ve
| CHARTIS CLAIMS, INC., et al.,
Defendants,
and
OREGON AUTOMOBILE
INSURANCE COMPANY,
an Oregon company,
Petitioner on Review.

OREGON AUTOMOBILE
INSURANCE COMPLANY,
Third-Party Plaintiff,
v.

QUANTA SPECIALTY LINES

INSURANCE COMPANY,

Third-Party Defendant.

(CC C107384CV; CA 4152556; SC S063823)
385 P3d 1053

Pp 651

Thomas M. Christ, Cosgrave Vergeer Kester LLP, Portland,
argued the cause and filed the briefs for petitioner on review.

Michael E. Farnell, Parsons Farnell & Grein, LLP,
Portland, argued the cause and filed the brief for respon-
dent on review. Also on the brief were Steven R. Powers and
W. Blake Mikkelsen.

Linda B. Clapham, Carney Badley Spellman PS, Seattle,
filed the brief for amici curiae Property Casualty Association
of America and National Association of Mutual Insurance
Companies.

Nicholas A. Thede, Ball Janik, LLP, Portland, filed the
brief for amicus curiae Oregon-Columbia Chapter of the
Associated General Contractors. Also on the brief was Kyle
A. Sturm.

Nadia H. Dahab, Stoll Stoll Berne Lokting & Shlachter
PC, Portland, filed the brief for amicus curiae Oregon Trial
Lawyers Association.

BREWER, J.

The decision of the Court of Appeals and the judgment of
the circuit court are affirmed.

s.r

BREWER, J.

This case presents a question about a liability
insurer’s duty to defend an insured against a civil action.
Ordinarily, courts decide whether an insurer had a duty to
defend by comparing the provisions of the insurance pol-
icy to the allegations of the complaint against the insured,
without regard to extrinsic evidence. Bresee Homes, Inc.
v. Farmers Ins. Exchange, 353 Or 112, 116, 293 P3d 1036
(2012). In this case, the trial court and the Court of Appeals
concluded that extrinsic evidence should be considered, and
after considering such evidence, held that the insurer had
a duty to defend. On review, we agree that the insurer had
a duty to defend and therefore affirm. We do not see any
need to resort to extrinsic evidence, however, or to modify
our existing case law regarding when an insurer has a duty
to defend.

I. OVERVIEW OF DUTY TO DEFEND

Before we discuss the facts of this case, it is helpful
to set out the legal principles that govern our analysis.

A. Duty to Defend and Duty to Indemnify

When an insured purchases an insurance policy
that protects against liability, the insurer typically agrees to
assume multiple duties to the insured. Typically the insurer
agrees to pay the insured for any liability that is covered by
the policy (up to the policy limits). That contractual obliga-
tion is known generally as the duty to indemnify. See Bresee
Homes, 353 Or at 114; Ledford v. Gutoski, 319 Or 397, 405,
877 P2d 80 (1994). Another important duty commonly found
in liability policies is an agreement to defend the insured
in legal actions involving claims covered by the policy. That
contractual obligation is known generally as the duty to
defend. See FountainCourt Homeowners v. FountainCourt
Develop., 360 Or 341, 354, 380 P3d 916 (2016).

Although both duties turn on the terms of the pol-
icy, the two duties are independent. See Bresee Homes, 353
Or at 114; City of Burns v. Northwestern Mutual, 248 Or 364,
368, 434 P2d 465 (1967). Thus, there are occasions when an
insurer has a duty to defend, but if trial ends with a ver-
dict that is not covered by the policy, then the insurer has

Po 653

no duty to indemnify. See ZRZ Realty v. Beneficial Fire and
Casualty Ins., 349 Or 117, 150, 241 P3d 710 (2010), on recons,
849 Or 657, 249 P3d 111 (2011). Conversely, there are times
when an insurer does not have a duty to defend, but if the
trial ends with a judgment that is covered by the policy, then
the insurer will have a duty to indemnify. Ledford, 319 Or at
403; City of Burns, 248 Or at 368-69.

As discussed, the issue here involves the duty to
defend under a liability policy. We consider in more detail,
then, the circumstances that trigger an insurer’s duty to
defend.

B. Duty to Defend: Four-Corners Rule

An insurer’s duty to defend, according to the widely
accepted “four-corners” rule, is determined by comparing
the complaint to the insurance policy. See, e.g, Restatement
of Liability Insurance § 13 comment a (tentative draft no. 1,
April 11, 2016) (so noting). The rule refers to the four cor-
ners of the complaint; it also sometimes is referred to as
the eight-corners rule (for the four corners of the complaint
plus the four corners of the policy). Id. However denomi-
nated, under that rule, one compares the allegations in the
complaint to the insurance policy’s terms. See, e.g., Bresee
Homes, 353 Or at 116 (court determines duty to defend using
two documents: insurance policy and complaint); Marleau v.
Truck Insurance Exchange, 333 Or 82, 89, 37 P3d 148 (2001)
(same); Ledford, 319 Or at 399 (same). If the allegations in
the complaint assert a claim covered by the policy, then the
insurer has a duty to defend. E.g., Id. at 399-400. If the alle-
gations do not assert a claim covered by the policy, then the
insurer has no duty to defend. Id. By limiting the analysis
to the complaint and the insurance policy, the four-corners
rule generally prevents consideration of extrinsic evidence.

The four-corners rule originates in the insurance
contract itself. Although the text of liability policies may
vary, an insurer typically includes a provision making its
duty to defend turn on the plaintiff's allegations. See Ellen
S. Pryor, The Tort Liability Regime and the Duty to Defend,
58 Md L Rev 1, 21-22 (1999) (so noting after quoting various
standard contractual provisions); Comment, The Insurer's
Duty to Defend Under A Liability Insurance Policy, 114 U Pa

654 Pe

L Rev 734, 734 (1966) (noting that a four-corners rule “seems
to fall squarely within the ‘alleging such injury’ language
in the policy”). Compare James M. Fischer, Broadening the
Insurer’s Duty to Defend: How Gray v. Zurich Insurance Co.
Transformed Liability Insurance Into Litigation Insurance,
25 UC Davis L Rev 141, 150 (1991) (agreeing that duty
arises from contract, but suggesting that some courts had
delineated duty in a way more suggestive of public-policy
norms). As we will discuss later, the liability policy at issue
here itself incorporates the four-corners rule.

The Court of Appeals has articulated an exception
to the four-corners rule, allowing extrinsic evidence to be
used to show that a putative insured did, in fact, occupy
insured status and therefore was entitled to a defense. In
Fred Shearer & Sons, Inc. v. Gemini Ins. Co., 237 Or App
468, 240 P3d 67 (2010), rev den, 349 Or 602 (2011), the
Court of Appeals concluded that extrinsic evidence could be
used to show that a person who claimed to be an “additional
insured” under a liability policy was in fact an insured
entitled to a defense. In that case, the “additional insured”
policy stated that it applied to “‘all vendors’” of a product
“4n the regular course of the vendor’s business.” Id. at 472.
The complaint against the putative additional insured did
not allege that it was a vendor of the product in the regu-
lar course of business. However, there was no factual issue
regarding whether it was, as to the circumstances alleged in
the complaint, in fact a vendor in the regular course of busi-
ness. Id. at 474, 478 n 9. The Court of Appeals held, under
those circumstances, that it would be appropriate to allow
the use of extrinsic evidence to establish the facts relevant
to whether the person was an “insured”—in that case, facts
that were undisputed, albeit not facts alleged in the com-
plaint. Id. at 476-77. Accordingly, the court upheld judgment
against the insurer even though “the underlying pleadings
did not affirmatively demonstrate” that the defendant met
the conditions to be an additional insured. Id. at 478.

Il. FACTS

With that background, we turn to the facts in
this case. The trial court granted judgment for West Hills
based on the following undisputed facts. West Hills was the

FP 655

general contractor for a townhome development in Sherwood,
Oregon. West Hills hired L&T Enterprises, Inc. (L&T) as a
subcontractor on the project. The terms of the subcontract
between West Hills and L&T are not directly relevant to
the legal issue presented here, but they do serve as useful
context to orient the reader. The subcontract required L&T
to indemnify West Hills against any liability that West Hills
might incur for L&T’s work. The subcontract also required
L&T to obtain a liability insurance policy, and to name West
Hills as an additional insured on that policy.

Construction contracts that combine those obliga-
tions—an agreement by the subcontractor to indemnify,
joined with an agreement to name the general contractor
as an additional insured on the subcontractor’s insurance
policy—are fairly common. Samir B. Mehta, Comment,
Additional Insured Status in Construction Contracts and
Moral Hazard, 3 Conn Ins LJ 169, 169-70 (1996). Parties to
such contracts often agree that the subcontractor will name
the general contractor as an additional insured in order to
“confer upon the additional insured [the general contrac-
tor] direct rights with respect to defense coverage.” Id. at
175. Although the general contractor is entitled to eventual
reimbursement under the indemnity provision, the general
contractor may be listed as an additional insured to gain
the right “to have the insurer pay for the costs of defense/
resolution as they are incurred.” Id. at 176-77 (footnote
omitted).

A. Insurance Policy Provisions

L&T complied with its subcontract by obtaining a
commercial general liability policy from petitioner on review
Oregon Automobile Insurance Company.’ The policy pro-
vided that Oregon Auto would defend its insured against
certain lawsuits, and also provided that Oregon Auto would
pay certain damage awards up to a specified amount.
Regarding the duty to defend, the policy stated:

“We will have the right and duty to defend the insured
against any ‘suit’ seeking those damages [to which this

1 The first policy was issued in 2004, and it was renewed annually for two
more years. Although the three policies cover different time periods, they are
generally identical in their relevant terms.

656 PO

insurance applies]. However, we will have no duty to defend
the insured against any ‘suit’ seeking damages *** to
which this insurance does not apply.”

The policy further defined “suit” as “a civil proceeding in
which damages *** to which this insurance applies are
alleged.”

Oregon Auto’s duty to defend was owed to anyone
who qualified as an insured under the terms of the policy.
L&T, pursuant to its subcontract with West Hills, negoti-
ated with Oregon Auto to have West Hills listed, by name,
as an additional insured on the policy. Oregon Auto did not
agree to provide West Hills with the same range of coverage
that it provided to L&T, however. In addition to other lim-
its on policy coverage, the policy provided that West Hills
was an insured “only with respect to liability arising out of
[L&T’s] ongoing operations performed for [West Hills].”2

B. Complaint Against West Hills

In December 2009, the homeowners association for
the townhome development, Arbor Terrace Homeowners
Association (Arbor Terrace), filed an action against (as
relevant here) West Hills. The complaint alleged that the
townhomes had had defects that led to damage from water
intrusion. The alleged defects included, among other things,
improperly installed siding and trim, improper or insuffi-
cient flashing, insufficient weatherproofing, and improper
sealants.

The complaint alleged that West Hills had been
negligent in a number of respects. As relevant here, the
complaint alleged that West Hills’s subcontractors had been
negligent, and that West Hills was liable because of that

2 The last policy phrased the West Hills limitation somewhat differently.
That policy provided that West Hills was an additional insured
“only with respect to liability for ‘bodily injury? ‘property damage’ or ‘per-
sonal and advertising injury’ caused by [L&T’s] ongoing operations for [West
Hills] at the location(s) designated above and only to the extent that such
‘bodily injury, ‘property damage’ or ‘personal and advertising injury’ is
caused by [L&T’s] negligence or the negligence of those performing opera-
tions on [L&T’s] behalf”
On review, Oregon Auto makes no argument that depends on those additional
terms.

| 6st

negligence. Specifically, the complaint alleged that West
Hills had hired and supervised subcontractors and had
been negligent in “[flailing to properly *** oversee, inspect,
and supervise *** subcontractors” and “[flailing to notify
**** subcontractors *** of improper construction means and
methods.” The complaint contained very little information
regarding the time when the damages allegedly occurred.
The complaint did allege, however, that when the owners
purchased the townhomes, the defects in the townhomes
already “existed and had already started to cause property
damage.”

The parties dispute the degree to which the com-
plaint alleged defects in the specific work that L&T had
performed under its subcontract: installing front porch col-
umns. As we will explain, we can resolve this case without
reference to those allegations.

C. West Hills Tenders Defense to Oregon Auto

After being served with the complaint, West Hills
sent a letter to Oregon Auto invoking Oregon Auto’s duty
to defend West Hills as an additional insured. The letter,
which enclosed a copy of the complaint, added that L&T was
a subcontractor on the project and had installed the front
porch columns. Oregon Auto refused to defend West Hills,
however, on the ground that the damages alleged in the
complaint arose from “completed operations” rather than
“ongoing operations.”*

D. Result of Arbor Terrace’s Action; West Hills’s Action
Against Oregon Auto

In Arbor Terrace’s action, West Hills filed a third-
party complaint against L&T and the other subcontractors.
Eventually, Arbor Terrace’s claims were settled. West Hills
then filed its own action against Oregon Auto (among other
insurers) for Oregon Auto’s proportional share of its defense
costs in the Arbor Terrace action. Ultimately, the case was
tried to the court on stipulated facts.

+ Oregon Auto’s letter offered a different justification for denying coverage
under the third policy, asserting that the townhome development project “was not
scheduled on the policy” as required. Oregon Auto does not renew that argument
on review.

658 ee

Oregon Auto argued to the trial court that West
Hills had failed to show that it qualified as an insured for
purposes of the duty to defend. Oregon Auto observed that,
although West Hills was named as an additional insured,
it was an additional insured only to the extent of liability
based on L&T’s ongoing operations. Oregon Auto contended
that “ongoing operations” required that the damages sought
must have been incurred while L&T was actually working
on the project, not later. Arbor Terrace’s complaint, Oregon
Auto asserted, did not show that damages had been incurred
while L&T was actually working on the project, nor had
West Hills introduced any extrinsic evidence to show that
particular timing for the damages.

West Hills countered, arguing (among other argu-
ments) that Arbor Terrace’s complaint itself was sufficient
to trigger Oregon Auto’s duty to defend. The allegations in
that complaint, it contended, were sufficient to create the
possibility that West Hills would have been subject to lia-
bility for L&T’s ongoing operations. Additionally, West Hills
asserted that the “ongoing operations” provision was not
as limited as Oregon Auto had argued. Because the policy
applied to damages “arising out of ongoing operations,” West.
Hills contended that consequential damages that resulted
from L&T’s work were sufficient to fall within the policy.

E. Trial Court Judgment for West Hills

The trial court granted judgment for West Hills.
In a letter explaining its decision, the court concluded that
Oregon Auto had a duty to defend “unless it is all but crystal
clear that the policy does not impose coverage.” The court
rejected Oregon Auto’s contention that the term “ongoing
operations” was limited to property damage that occurred
only during L&T’s operations. The court agreed that the
provision could be read that way. But the court concluded
that the provision also could be read more broadly, as West
Hills had urged. Because it concluded that the provision
was ambiguous, the court construed the provision against
Oregon Auto.

The court also held that the complaint against

West Hills contained allegations sufficient to trigger Oregon
Auto’s duty to defend. The complaint alleged damage due to

Po 659

improperly constructed porch columns; L&T was the sub-
contractor that worked on the porch columns; and thus, the
court reasoned, West Hills might be held liable for L&T’s
work. In so concluding, it appears that the court relied on
extrinsic evidence to determine that L&T was the subcon-
tractor that had worked on the porch columns.

F. Appeal to Court of Appeals

On appeal, Oregon Auto maintained that the alle-
gations against West Hills in Arbor Terrace’s complaint did
not trigger its duty to defend. The policy only covered West
Hills for L&T’s liability, but the complaint—according to
Oregon Auto—only alleged that West Hills itself had been
negligent. Because, as Oregon Auto saw things, the com-
plaint did not name L&T or allege that West Hills was liable
for L&T’s negligence, the four-corners rule was not satisfied.
Oregon Auto also asserted that extrinsic evidence could not
be considered, arguing that Shearer permitted extrinsic evi-
dence only when the added fact related to coverage but not
to liability. Finally, Oregon Auto renewed its argument that
the policy restriction to “ongoing operations” required that
any covered damages must have occurred while L&T was
working on the project.

The Court of Appeals nevertheless affirmed. West
Hills Development Co. v. Chartis Claims, 273 Or App 155,
359 P3d 339 (2015). The court held that Arbor Terrace’s com-
plaint did not need to identify L&T, because, under Shearer,
West Hills could introduce extrinsic evidence to show that
it qualified as an additional insured. Id. at 163. West Hills
did so, the court opined, when it sent the letter tendering
the defense to Oregon Auto. Id. at 163-64. The court further
held that the complaint alleged damages for which L&T was
responsible, because it specifically referred to the porch col-
umns that L&T had constructed. Id. at 164-65.

The Court of Appeals deemed it unnecessary to
resolve the exact meaning of the “ongoing operations” pro-
vision. Id. at 166-67. Even if Oregon Auto was correct that
it required that the damages occur while L&T was working
on the project, the court stated, the allegations in the com-
plaint satisfied that narrower definition. The Arbor Terrace
complaint alleged that damage had already started to occur

660 po

when the purchasers had bought the townhomes, and that
was sufficient. As the court explained, the allegation “does
not rule out the possibility that damage occurred before
L&T finished.” Jd. at 167 (emphasis in original).

Il. DISCUSSION

On review, Oregon Auto makes two main argu-
ments. First, it asserts that the Court of Appeals should
not have looked beyond the face of the Arbor Terrace com-
plaint to determine whether there was a duty to defend.
Second, Oregon Auto contends that the duty to defend is
not triggered merely because a complaint fails to “rule out”
the possibility of coverage. Instead, it asserts that the duty
to defend applies only if the complaint “rules in” coverage.
Although Oregon Auto focuses its second argument on the
Court of Appeals’ conclusion that that court did not need to
resolve the meaning of “ongoing operations” in the policy,
that argument in fact implicates the applicable legal stan-
dard as a whole.

A. Insurance Policy Here Incorporates Four-Corners Rule

We begin with the four-corners rule generally. As
noted, the four-corners rule derives from the insurance pol-
icy itself. We find that principle in the insurance policy here.
The policy states that Oregon Auto will “defend the insured
against any ‘suit’ seeking those damages” that are covered
by the policy.t (Emphasis added.) As noted, the term “suit” is
defined by the policy as “a civil proceeding in which damages
*** to which this insurance applies are alleged.” (Emphasis
added.) Oregon Auto thus contractually agreed that its
duty to defend turns on a plaintiff’s allegations against its
insured.

B. Four-Corners Rule and Indefinite Complaints

On its face, the four-corners rule seems clear.
Applying that rule to real world complaints, however, can
create more of a challenge. In particular, a complaint may
not definitively allege the facts that ultimately will deter-
mine whether a claim is covered by the policy.

4 See also Pryor, 58 Md L Rev at 22 (quoting almost identical text from a
standard insurance policy as an example that triggers the four-corners rule).

Po 661

Chief Judge Learned Hand addressed that problem
in Lee v. Aetna Casualty & Surety Co., 178 F2d 750 (2d Cir
1949). In Lee, a pet store’s liability policy excluded injuries
arising out of the use of an elevator. The plaintiff had gone
to the store seeking a pet located on the fifth floor. The pres-
ident of the store opened the gate to the elevator and ges-
tured for the plaintiff to step inside—but the elevator was
not there, and the plaintiff fell down the shaft. The plaintiff
sued the store and ultimately obtained a judgment against
it. See Lee v. Aetna Casualty & Surety Co., 81 F Supp 1008,
1009-10 (SD NY 1949). In turn, the store filed an action
against its insurer, contending that the insurer was obli-
gated (1) to pay the judgment, and (2) to reimburse the store
for the costs of its defense. Id.

The trial court had first concluded that the insurer
did not have a duty to indemnify the pet store, because the
judgment against it fell within the exclusion for “use” of the
elevator. On that holding, the Second Circuit affirmed. 178
F2d at 751. The trial court had further held, however, that
the insurer did have a duty to defend the store. The Second
Circuit affirmed that conclusion as well. Judge Hand’s opin-
ion began with the four-corners rule: the duty to defend
depends on a comparison between the policy and the alle-
gations in the complaint. Id. In that case, the policy would
cover liability from the plaintiff falling into an unguarded
shaft, but the policy would not cover liability resulting from
the “use” of the elevator. Id. at 752. The allegations in the
complaint, however, did not clearly indicate whether the
injury would be covered. The allegations were ambiguous as
to whether the injury had been from “use” of the elevator or
from falling down an unguarded shaft.

In the face of a complaint that failed to allege the
determinative facts, the court concluded that “we should
resolve the doubt in favor of the insured.” Jd. The court rea-
soned that the parties had intended for the insurer to defend.
in any case in which the insurer would eventually become
liable to pay. Id. The only exception would be if an injured
plaintiff alleged a claim that “was outside the policy,” but the
plaintiff ultimately received a judgment that was covered by
the policy. Id. Otherwise, “[w]hen *** the complaint com-
prehends an injury which may be within the policy, we hold

862 Po

that the promise to defend includes it.” Id. at 753 (emphasis
added).

Applying that standard to the facts, the Second
Circuit upheld the judgment that the insurer had a duty to
defend. The complaint “did not limit the plaintiff's recovery”
to an injury excluded from the policy (“use” of the elevator).
Id. The complaint’s allegations were “consistent” with the
plaintiff falling into an open.and unguarded elevator shaft,
an event that would have been covered by the policy. Id.

This court follows the same rule. In Blohm et al. v.
Glens Falls Ins. Co., 231 Or 410, 373 P2d 412 (1962), this
court explained that:

««** Where the complaint does not state facts sufficient
to bring the case clearly within or without the coverage,
the general rule is that the insurer is obligated to defend
if there is, potentially, a case under the complaint within
the coverage of the policy. In other words, in case of doubt
as to whether or not the allegations of a complaint against
the insured state a cause of action within the coverage of a
liability policy sufficient to compel the insurer to defend the
action, such doubt will be resolved in the insured’s favor.”

231 Or at 415-16 (internal quotation marks and citation
omitted). See also Bresee Homes, 353 Or at 117 (“Any ambi-
guity concerning potential coverage is resolved in favor of the
insured.”); Marleau, 333 Or at 91 (insurer has duty to defend
if complaint is unclear but could reasonably be interpreted
to allege covered claim); Ledford, 319 Or at 400 (ambiguities
in complaint are resolved in favor of duty to defend).*

5 Various treatises also concur that ambiguous complaints are construed in
favor of the duty to defend. The New Appleman on Insurance Law Library Edition
states:

“If any of the facts pleaded in the complaint establishes the potential for cov-

ered liability the insurer must defend. Any doubt as to whether a defense

obligation exists must be resolved against the insurer and in favor of the

insured[.]”
Jeffrey H. Thomas, 8 New Appleman on Insurance Law Library Edition § 17.012) tal
(2016) (footnotes omitted). See also Lee R. Russ and Thomas F. Segalla, 14 Couch
on Insurance § 200:11 (3d ed 2016) (“When coverage under the duty to defend
depends on an outstanding factual dispute, the disputes must be resolved in favor
of coverage until the insurer conclusively establishes that there is no potential
for coverage.” (Footnote omitted.)); 1 Law and Practice of Insurance Coverage
Litigation § 4:14 (Suly 2016) (“For an insurer to avoid the obligation to defend,
it must be concluded as a matter of law that there is no possible factual or legal

a 863

Applying that approach in Ledford, this court stated
the rule as whether the complaint “could, without amend-
ment, impose liability for conduct covered by the policy.” 319
Or at 399-400 (emphasis added). The court held that the
insurer there had no duty to defend because the complaint
“alleged only conduct that clearly falls outside the cover-
age of the policy.” Id. at 403 (emphasis added). Similarly,
in Marleau, this court summarized the rule as whether
the complaint, “without amendment, may impose liability
for conduct covered by the policy.” 333 Or at 89 (emphasis
added; internal quotation marks and citation omitted).

Most recently, in Bresee Homes, this court described
its interpretive approach this way:

“Regardless of the presence of ambiguity or unclarity
in the complaint, the key question is whether the court can
reasonably interpret the allegations to include an incident
or injury that falls within the coverage of the policy.”

353 Or at 117.

Oregon Auto nevertheless argues that the duty to
defend does not exist merely because the complaint does
not “rule out” coverage. It maintains instead that the com-
plaint must “rule in” coverage. In support of that argument,
Oregon Auto quotes the following statement from Ledford:

“Tf the facts alleged in the complaint against the insured do
not fall within the coverage of the policy, the insurer should
not have the obligation to defend.”

319 Or at 400 (internal quotation marks and citation
omitted).

In context, however, Ledford makes it clear that the
insurer has a duty to defend, even if the complaint is unclear
about whether it alleges a covered injury:

“The insurer has a duty to defend if the complaint pro-
vides any basis for which the insurer provides coverage.

basis on which the insurer might eventually be held obligated to indemnify
the insured under any provision of the insurance policy.” (Footnote omitted.));
Fischer, 25 UC Davis L Rev at 153 n 30 (stating that insurer has duty to defend
unless the insurer shows “that there is no possibility of coverage under any poten-
tial coverage in the policy”).

6

Even if the complaint alleges some conduct outside the
coverage of the policy, the insurer may still have a duty
to defend if certain allegations of the complaint, without
amendment, could impose liability for conduct covered by
the policy. Any ambiguity in the complaint with respect
to whether the allegations could be covered is resolved in
favor of the insured.”

Id. (emphasis in original; citations omitted). Accordingly,
Ledford explained, the question was whether the facts
alleged in the complaint at issue “may reasonably be inter-
preted to include conduct within the coverage of [the insur-
ance] policy.” Id.

Ledford implicitly drew a distinction between the
broad principle that an insurer has no duty to defend unless
the complaint alleges a covered claim and the way in which
that principle applies to particular cases. What Ledford
did implicitly, this court did more expressly in Casey v.
N. W. Security Ins. Co., 260 Or 485, 491 P2d 208 (1971). This
court’s opinion in that case also began with the proposition
that:

“The insurer has a duty to defend only if the claim made
against the insured is one covered by the insurer.”

260 Or at 489 (citation omitted). The court recognized, how-
ever, the problems with applying that principle when it was
not clear whether a particular complaint alleged a covered
claim. The court held that, in case of doubt, the insurer has
a duty to defend; otherwise the insured would lose the bene-
fit of his or her bargain.

“The difficulty [with applying the general principle]
arises when there is doubt as to coverage. This doubt some-
times cannot be resolved until a judgment is entered in lit-
igation between the insured and the insurer. This is too
late; the lawsuit by the injured party has been filed and
probably gone to judgment before this time. The insurer
has contracted with its insured to defend him. This benefit
to the insured would be curtailed if it could be withheld in
the event of a dispute about coverage.”

Id. at 489. See also Bresee Homes, 353 Or at 125 n 1 (quoting
that analysis with approval).

pe 665

We thus reject Oregon Auto’s assertion that there is
no duty to defend unless the complaint “rules in” coverage.
Instead, as this court most recently held in Bresee Homes,
the question is whether, “[rlegardless of the presence of
ambiguity or unclarity in the complaint, *** the court can
reasonably interpret the allegations to include an incident
or injury that falls within the coverage of the policy.” 353 Or
at 117..Having set out the governing legal standard, we turn
to the facts of this case.

C. Applying Four-Corners Rule to Complaint Here

On review, the only issues relate to the require-
ments of the “additional insured” policy provision for West
Hills. The provision at issue states that West Hills is an
additional insured “only with respect to liability arising out
of [L&T’s] ongoing operations performed for [West Hills].”
Oregon Auto’s duty to defend West Hills thus depends on

’ whether the court can reasonably interpret the allegations of
the Arbor Terrace complaint to include an incident or injury
that falls within the coverage of the policy. Bresee Homes,
358 Or at 117; Ledford, 319 Or at 399-400. We answer that
question in the affirmative.

First, the policy here names West Hills as an addi-
tional insured. The complaint asserted claims against West
Hills, and so West Hills might be subject to some liability. In
addition, the policy provides that West Hills is an additional
insured as to “liability arising out of [L&T’s] ongoing oper-
ations performed for [West Hills].” The complaint expressly
alleged that West Hills was liable for subcontractor opera-
tions that had been performed for West Hills: specifically,
that West Hills’s subcontractors used “improper construc-
tion means and methods” in their operations, and West Hills
was liable in negligence for not preventing the subcontrac-
tors from doing so. L&T may not have been be identified by
name in the complaint, but that is not the issue. The alle-
gations of the complaint reasonably could be interpreted to
result in West Hills being held liable for conduct covered by
the policy: L&T’s operations for West Hills.

The only remaining question is whether the allega-
tions could result in West Hills being held liable for L&T’s

oS

“ongoing operations.” As noted, Oregon Auto has argued
that “ongoing operations” requires that any covered dam-
ages must have occurred before L&T completed its work on
the project. The Court of Appeals did not find it necessary
to resolve that question, 273 Or App at 166, and neither do
we. The complaint alleges that damages had occurred by the
time the owners purchased their townhomes. It is possible
that the damages occurred earlier. Reasonably interpreted,
then, the complaint could result in West Hills being held lia-
ble for conduct covered by the policy. See Bresee Homes, 353
Or at 122-23 (concluding insurer had duty to defend even
though complaint made no allegations about when damages
had occurred).

Under the four-corners rule, then, Oregon Auto had
a duty to defend West Hills. The complaint’s allegations,
reasonably interpreted, could result in West Hills being held
liable for damages covered by the policy.

In so concluding, we have treated the “additional
insured” provision here the same as any other factual con-
dition found in the policy. In Shearer, however, the Court
of Appeals treated conditions relating to whether a party
was an “insured” differently from other conditions relating
to coverage. 237 Or App at 476-77. Without deciding whether
Shearer was correctly decided, we conclude that that case is
distinguishable on these facts. Shearer was decided in the
context of a policy that created an open class of “additional
insureds.” The class was defined entirely by the relationship
between the otherwise unidentified class members and the
named insured. An insurer who received a tender of defense
from such a person, unknown to the insurer and unnamed
on the policy, would have had no way to know whether the
alleged insured had any relationship to the insurance con-
tract at all.

That issue is not presented here, however. West
Hills is designated by name in the policy here as an addi-
tional insured. The condition found in the policy—‘only with
respect to liability arising out of [L&T’s] ongoing operations
performed for [West Hills]”—does not relate to whether
West Hills is an additional insured. Instead, any facts perti-
nent to that condition have to do with the particular claims

Po 867

against West Hills that Oregon Auto agreed to cover. By
their nature, such facts are indistinguishable from facts
pertaining to any other limitation on coverage that might
be found in the policy (e.g., whether the claim involved
“property damage,” whether the damages occurred within
the policy period, whether the claim is excluded because the
insured inflicted the injury intentionally). Accordingly, we
resolve the parties’ dispute with respect to those facts based
on the familiar principle that, regardless of ambiguity or
lack of clarity, the duty to defend is triggered if the com-
plaint’s allegations, reasonably interpreted, could result in
the insured being held liable for damages covered by the
policy.

IV. CONCLUSION

In this case, Oregon Auto issued a liability policy
naming West Hills as an additional insured. When Arbor
Terrace filed a complaint against West Hills, West Hills
tendered the defense to Oregon Auto. Oregon Auto contrac-
tually agreed to apply the four-corners rule to its duty to
defend the insureds under the policy. Under that provision,
if a complaint against the insureds alleged a covered claim,
then Oregon Auto had a duty to defend. To give effect to
that contractual obligation, we resolve uncertainty about
the allegations in favor of the duty to defend. The com-
plaint’s allegations here, reasonably interpreted, could have
resulted in West Hills being held liable for damages covered
by the policy.® The trial court and Court of Appeals therefore
correctly held that Oregon Auto had a duty to defend.

The decision of the Court of Appeals and the judg-
ment of the circuit court are affirmed.

© Again, it is important to distinguish between the duty to defend and the
independent duty to indemnify. If the issue had been indemnification, Oregon
Auto could have argued whether any damages actually awarded to Arbor Terrace
were within the contractual terms of the policy.

668

Argued and submitted November 9, 2015; decision of Court of Appeals affirmed
in part and vacated in part, rule amendments to OAR 461-135-0832(10)(b)(B)(viii)
(2010) and OAR 461-135-0835 (1)(e)(B)(iii) (2010) held invalid
December 15, 2016

Tim NAY,
Respondent on Review,
Uv
DEPARTMENT OF HUMAN SERVICES,
Petitioner on Review.
(CA A150722; SC S062978)

385 P3d 1001

Carson L. Whitehead, Assistant Attorney General,
Salem, argued the cause and filed the briefs for petitioner on
review. Also on the briefs were Ellen F. Rosenblum, Attorney
General, and Anna M. Joyce, Solicitor General.

Matthew W. Whitman, Portland, argued the cause and
filed the brief for respondent on review. Also on the brief was

pT 669

Before Balmer, Chief Justice, and Kistler, Walters,
Landau, Baldwin, and Brewer, Justices.**

BALDWIN, J.

The decision of the Court of Appeals is affirmed in part
and vacated in part. The rule amendments to OAR 461-
135-0832(10)(b)(B)(iii) (2010) and OAR 461-135-0835
(1)(€)(B)Gii) (2010) are held invalid.

** Linder, J., retired December 31, 2015, and did not participate in the deci-
sion of this case. Nakamoto, J., did not participate in the consideration or decision
of this case.

670 po

BALDWIN, J.

In general, the Department of Human Services is
required by law to recover Medicaid payments from those
assets in which the Medicaid recipient had an interest at the
time of death. In 2008, the department amended its admin-
istrative rules regarding the scope of that recovery. The
amended rules allow the department to recover the payments
from assets that the recipient had transferred to a spouse up
to five years before a person applies for Medicaid. Pursuant
to ORS 183.400, petitioner Tim Nay sought judicial review of
those rule amendments in the Court of Appeals. The Court
of Appeals agreed with petitioner that the amendments
were invalid, Nay v. Dept. of Human Services, 267 Or App
240, 340 P3d 720 (2014), and the department sought review.
As we will explain, we conclude that the rule amendments
are invalid under ORS 183.400(4)(b) because they exceed
the department’s statutory authority. Accordingly, we affirm
the Court of Appeals.

I, BACKGROUND
A. Medicaid

This case involves the recovery of payments by the
state under Medicaid. Medicaid “is a cooperative endeavor in
which the Federal Government provides financial assistance
to participating States to aid them in furnishing health care
to needy persons.” Harris v. McRae, 448 US 297, 308, 100 S Ct
2671, 65 L Ed 2d 784 (1980). The full scheme is quite complex,
but most of those details are not relevant to our analysis here.
(For a more detailed explanation of the legal framework, see
Nay, 267 Or App at 242-45.) It is sufficient here to note that
(1) a person may be eligible to receive certain benefits under
the program, and (2) those benefits later may be recovered by
the state from certain assets. The latter aspect—the recov-
ery of those benefit payments by the state, known as “estate
recovery”—is the issue on which this case turns.

B. Estate Recovery
1. Current Statutes

We first briefly address the relevant federal and
state statutes regarding the recovery of those Medicaid

pe 671

benefit payments. In doing so, we must consider which ver-
sion of the federal and state statutes we should examine.
The parties and the Court of Appeals all appear to have
quoted the current versions of those statutes. Many of those
statutes, however, have been amended multiple times since
the rule amendments were first promulgated in 2008.1

It is plausible that the validity of the rule amend-
ments should be evaluated against the versions of the stat-
utes in effect when the rules were amended, and not by later
versions. The parties did not address that question in their
briefing. However, we have reviewed the statutory amend-
ments since 2008 and do not find any substantive changes
that would affect our analysis of the issues here. Thus, we
follow the lead of the parties and the Court of Appeals and
quote all relevant statutes as they exist currently.

2. Federal Statutes

Federal law generally prohibits recovery of properly
paid Medicaid benefits, except from the Medicaid recipient’s
estate. The relevant statute provides, in part:

“(b) Adjustment or recovery of medical assis-
tance correctly paid under a State plan

“(1)_ No adjustment or recovery of any medical assis-
tance correctly paid on behalf of an individual under the
State plan may be made, except that the State shall seek
adjustment or recovery of any medical assistance correctly
paid on behalf of an individual under the State plan in the
case of the following individuals:

“(A) In the case of an individual described in subsec-
tion (a)(1)(B) of this section, the State shall seek adjust-
ment or recovery from the individual’s estate ***,

“(B) In the case of an individual who was 55 years
of age or older when the individual received such medical

1 For example, 42 USC § 1396p was amended by Pub L 111-5, div B, title V,
§ 5006(c), Feb 17, 2009, 123 Stat 507; and Pub L 118-67, div A, title IT, § 202(b)(3),
Dec 26, 2013, 127 Stat 1177. ORS 411.620 was amended by Or Laws 2009, ch 595,
§ 262; Or Laws 2011, ch 720, § 115; and Or Laws 2013, ch 688, § 50. ORS 411.630
was amended by Or Laws 2011, ch 720, § 116, and Or Laws 2013, ch 688, § 51.
Additionally, ORS 416.350 was amended by Or Laws 2009, ch 595, § 278 (at that
time the statute had been numbered ORS 414.105); Or Laws 2011, ch 720, § 154;
and Or Laws 2018, ch 688, § 87.

ore Po

assistance, the State shall seek adjustment or recovery
from the individual’s estate, but only for [certain identified
forms of medical assistance.]”

42, USC § 1396p(b)(1) (boldface in original).
Because recovery can be made only from the

Medicaid recipient’s estate, much depends on what “estate”
means. Federal law provides some guidance on that as well.
The federal statute defining “estate,” 42 USC § 13896p(b)(4),
contains two parts. The first part provides that the Medicaid
recipient’s estate includes whatever state probate law defines
as the estate. The statute also gives states the option to
choose to expand that definition, so that it includes not only
the probate estate, but also other property interests that the
Medicaid recipient had at the time of death. Specifically, the
statute provides, in part:

“(4) For purposes of this subsection, the term ‘estate,
with respect to a deceased individual—

“(A) shall include all real and personal property and
other assets included within the individual’s estate, as
defined for purposes of State probate law; and

“(B) may include, at the option of the State ***, any
other real and personal property and other assets in which
the individual had any legal title or interest at the time of
death (to the extent of such interest), including such assets
conveyed to a survivor, heir, or assign of the deceased indi-
vidual through joint tenancy, tenancy in common, survi-
vorship, life estate, living trust, or other arrangement.”

42 USC § 1396p(b)(4).

The permissive definition of “estate” in subpara-
graph (B) applies only to the extent of the interest that the
Medicaid recipient held at the time of death. See 42 USC
§ 1396p(b)(4)(B) (permissive definition includes interest held
at time of death, “to the extent of such interest”). The mere
existence of a Medicaid recipient’s interest thus does not
necessarily entitle a state to recover the full value of the
asset. The state may recover only the value of the Medicaid
recipient’s interest.

Estate recovery can occur only after the Medicaid
recipient’s spouse also has died. 42 USC § 1396p(b)(2) (add-
ing additional conditions).

Lo 673

3. State Statutes

Oregon statutes generally parallel the federal provi-
sions. ORS 416.350(2) authorizes recovery from a Medicaid
recipient’s “estate,” and provides, in relevant part:

“Medical assistance pursuant to ORS chapter 414 paid
to or on behalf of an individual [in certain circumstances
not relevant here] may be recovered from the estate of the
individual or from any recipient of property or other assets
held by the individual at the time of death including the
estate of the surviving spouse.”

The estate recovery may not occur from a spouse until the
spouse has died (and certain other conditions are met). Id.
(medical assistance “may not be *** recovered until after
the death of the surviving spouse, if any”).

In a later subsection, the legislature has directed
that Oregon will use the expanded, permissive definition of
“estate” authorized by 42 USC § 1396p(b)(4)(B).

“(6) As used in this section:

“(a) ‘Estate’ includes all real and personal property
and other assets in which the deceased individual had any
legal title or interest at the time of death including assets
conveyed to a survivor, heir or assign of the deceased indi-
vidual through joint tenancy, tenancy in common, survivor-
ship, life estate, living trust or other similar arrangement.”

ORS 416.350(6).

The department concedes that state law also limits
estate recovery to the value of the Medicaid recipient’s inter-
est in those assets. The existence of some fractional interest
in an asset does not permit estate recovery of the full value
of the asset. See ORS 416.350(4).

In addition, the Oregon legislature has authorized the
setting aside of certain property transfers that otherwise would
be subject to estate recovery. The general authority to set aside
those transfers is found in ORS 411.620(2), which states:

“Except with respect to bona fide purchasers for value,
the department, the authority, the conservator for the
recipient or the personal representative of the estate of a
deceased recipient may prosecute a civil suit or action to set

674 po

aside the transfer, gift or other disposition of any money or
property made in violation of any provisions of ORS 411.630,
411.708 and 416.350 and the department or the authority
may recover out of such money or property, or otherwise, the
amount or value of any public assistance or medical assis-
tance obtained as a result of the violation, with interest,
together with costs and disbursements incurred in recover-
ing the public assistance or medical assistance.”

As relevant here, the legislature has specified that
two different classes of transfer may be avoided for pur-
poses of estate recovery. The first class consists of trans-
fers of property made without adequate consideration. ORS
416.350(2) provides, in part:

“Transfers of real or personal property by recipients of such
aid without adequate consideration are voidable and may
be set aside under ORS 411.620(2).”

The department admits that that statute does not apply to
transfers that were completed before a person could be con-
sidered to be a “recipient[] of such aid.”

The second class of transfers that may be avoided
are those transfers that the Medicaid recipient made
with the intent to hinder or prevent estate recovery. ORS
411.630(2) provides, in part:

“A person may not transfer, conceal or dispose of any
money or property with the intent:

ee ae ae

“(b) Except as to a conveyance by the person to create
a tenancy by the entirety, to hinder or prevent the depart-
ment or the authority from recovering any part of any claim
it may have against the person or the estate of the person.”

C. Rule Amendments

With that statutory background, we turn to the
challenged rule amendments. There are two rules at issue.
The first rule, OAR 461-135-0832, defines the term “estate.”
The second rule, OAR 461-135-0835, addresses the extent to
which the department can recover from the spouse’s estate.”

2 Petitioner does not challenge the rules in their entirety. Instead, he only
challenges the rule amendments that, beginning in 2008, added provisions

Po 675

Prior to 2008, those rules contained a “loophole”
that allowed Medicaid recipients and their spouses to avoid
estate recovery. Before applying for Medicaid benefits, the
department asserts, a future Medicaid recipient could trans-
fer an asset to their spouse—an “interspousal transfer.” By
doing so, the Medicaid recipient “could permanently prevent
[the department] from recovering the recipient’s interest in
marital property.”

In order to close that “loophole,” the department,
amended the two rules at issue. The amended rules them-
selves are the same in substance, if different in operation:
Both of the amended rules now expressly provide that estate
recovery may reach any interspousal transfers made in the
60 months—five years—before the Medicaid recipient first
applies for benefits.

The first amendment expanded the definition of the
word “estate.” As amended through October 1, 2010, OAR
461-135-0832 provided, in part:

“(10) ‘Estate’ means:
Gk ok oh ok oe

“(b) With respect to the collection of payments made
for public assistance provided on or after July 18, 1995:

ee eae eae

“(B) For recipients who die on or after October 1,
2008, all real property, personal property, or other assets,
wherever located, in which a recipient had any legal title
or ownership or beneficial interest at the time of death of
the recipient, including real property, personal property,
or other assets conveyed by the recipient to, subsequently
acquired by, or traceable to, a person, including the recipi-
ent’s spouse and any successor-in-interest to the recipient’s
spouse, through:

allowing the recovery of interspousal transfers within 60 months after the
Medicaid recipient first applied for benefits. The rules have been amended since
that time, but those amendments all retain essentially the same text. Following
the lead of the parties and the Court of Appeals, we quote the versions of the rules
as they existed on October 1, 2010, the last date covered by the limited record
before us. See ORS 183.400(3) (record consists of rule at issue, relevant statutes,
and “[clopies of all documents necessary to demonstrate compliance with appli-
cable rulemaking procedures”).

676 po

“@) Tenancy by the entirety;
“Gi) Joint tenancy;
“Gii) Tenancy in common;

“Gv) Not as tenants in common, but with the right of
survivorship;

“@) Life estate;
“Wi) Living trust;
“(vii) Annuity purchased on or after April 1, 2001; or

“(iii) Other similar arrangement, such as an inter-
spousal transfer"! of assets, including one facilitated by
a court order, which occurred no earlier than 60 months
prior to the first date of request established from the recip-
ient’s and the recipient’s spouse’s applications, or at any
time thereafter, whether approved, withdrawn, or denied,
for the public assistance programs referenced in OAR
461-135-0835(2).”

(Emphases omitted.) The amendment at issue here is OAR
461-135-0832 (10)(b)(B)(viii), which changed “[o]ther similar
arrangement” to include a Medicaid recipient’s transfers to
a spouse within the 60 months before applying for benefits.

The second amendment expanded the list of the
spouse’s assets from which the department could recover
Medicaid payments. As amended through October 1, 2010,
OAR 461-135-0835(1) provided:

“e) For a recipient who died on or after October 1,
2008:

cep oe ee ae

“B) *** [T]he Department has a claim against the
estate of the recipient’s spouse for public assistance paid
to the recipient, but only to the extent that the recipient’s

® As amended, the same rule also defined “interspousal transfer”:

“Interspousal transfer’ means any transfer, or chain of transfers, that
effectively transfers title or control of an asset, or an interest in an asset,
from one spouse to another, including: direct transfers between spouses,
transfers from one or both spouses to a trust, and transfers from one trust to
another trust.”

OAR 461-135-0832(13).

Pp 677

spouse received property or other assets from the recipient
through any of the following:

“G) Probate.
“Gi) Operation of law.

“Gii) An interspousal transfer, including one facili-
tated by a court order, which occurs:

“) Before, on, or after October 1, 2008; and

“(I No earlier than 60 months prior to the first date
of request (see OAR 461-135-0832) established from the
applications of the recipient and the recipient’s spouse, or
at any time thereafter, whether approved, withdrawn, or
denied, for the public assistance programs referenced in
section (2) of this rule.”

(Emphasis omitted.) The change at issue is OAR 461-135-
0835(1)(e)(B)Gii), which allows the department to recover
property transferred up to 60 months before the Medicaid
recipient applied for benefits, in addition to assets trans-
ferred by probate and operation of law.

D. Court of Appeals’ Decision

Petitioner requested judicial review from the Court
of Appeals pursuant to ORS 183.400. He challenged the
amendments to the rules, insofar as they allowed recovery of
transfers to a spouse made within the 60 months before the
Medicaid recipient applying for benefits. He asserted (among
other things) that the department had exceeded its statutory
authority under both state and federal law when it adopted
those amendments, and so the amendments were invalid.
See ORS 183.400(4)(b) (court will declare rule invalid if rule
“[elxceeds the statutory authority of the agency”).

The Court of Appeals agreed with petitioner and
rejected the department’s assertion that the federal and
state statutes allowed it to recover transfers that the
Medicaid recipient had made prior to his or her death. Nay,
267 Or at 259-63. As noted, the federal and state statutes
defining “estate” provide that that term includes assets as
to which the Medicaid recipient had an interest at the time
of death. 42 USC § 1396p(b)(4)(B); ORS 416.350(6). The
court rejected the department’s assertion that either Oregon

678 po

probate law or domestic relations law created an interest at
the time of death in property that the Medicaid recipient
had transferred before death. 267 Or App at 260-62.

The Court of Appeals also considered the depart-
ment’s suggestion that generic terms included in both the
state and federal definitions of “estate” are broad enough to
allow the department to recover “assets that the Medicaid
recipient fully transferred away during his or her life.” 267
Or App at 248. The department noted, in that regard, that
the state statute provides that “estate” additionally includes
“assets conveyed to a survivor, heir or assign of the deceased
individual through joint tenancy, tenancy in common, sur-
vivorship, life estate, living trust or other similar arrange-
ment.” ORS 416.350(6)(a) (emphasis added). The federal
statute, 42 USC § 1396p(b)(4)(B), is almost identical to
the state statute, save that the last term is “other arrange-
ment” rather than “other similar arrangement.” The depart-
ment asserted that the generic concluding terms in both
those statutes—“other similar arrangement” and “other
arrangement”—were broad enough to allow the department
to recover transfers that the Medicaid recipient had made
before death. See 267 Or App at 259.

The court found that argument unpersuasive. In
context, the only assets that fell within either the federal or
state definitions were those in which the Medicaid recipient
had some property interest at the time that the Medicaid
recipient died. The generic terms “other arrangement” and
“other similar arrangement” shared the same qualities as
the examples that preceded it in both statutes, 267 Or App
at 247-48—“assets conveyed *** through joint tenancy, ten-
ancy in common, survivorship, life estate, [and] living trust,”
42 USC § 1396p(b)(4)(B); ORS 416.350(6)(a). All those exam-
ples still involved only interests that the Medicaid recipient
held at the time of death, but that were transferred by oper-
ation of law outside probate when the recipient died. 267 Or
App at 248 (federal statute); id. at 254 (state statute).

The Court of Appeals thus held the rules invalid.
The rule amendments allowed recovery of transfers made
before the recipient’s death, even though the recovery of
“such predeath transfers are antithetical to the definition

679

of estate as provided by federal and state law.” Id. at 263.
Accordingly, the rule amendments exceeded federal and
state statutory authority. Id.
The department sought review, which we allowed.
II. STANDARD OF REVIEW

We begin by focusing our attention on the standard
of judicial review we should apply to determine whether the
rule amendments are valid. As we will explain, the correctly
identified standard of judicial review effectively determines
the result in this case.

As noted, petitioner brought this action pursuant to
ORS 183.400. That statute provides for a limited range of
judicial review. The record before the court is quite limited:

“(8) Judicial review of a rule shall be limited to an
examination of:

“(a) The rule under review;
“(b) The statutory provisions authorizing the rule; and

“(c) Copies of all documents necessary to demonstrate
compliance with applicable rulemaking procedures.”
ORS 183.400(8). Furthermore, the court may hold the rule
invalid only in limited circumstances:

“(4) The court shall declare the rule invalid only if it
finds that the rule:

“(a) Violates constitutional provisions;
“(b) Exceeds the statutory authority of the agency; or

“(¢) Was adopted without compliance with applicable
rulemaking procedures.”

ORS 183.400(4).

Challenges to a rule’s validity under ORS 183.400
are colloquially called “facial challenges,” see, eg., Nay,
267 Or App at 241, although that term is not used in the
statute itself. Apparently because of that terminology, the
department asserts that courts should review the validity of
rules under essentially the standard of judicial review used
to determine a facial challenge to the constitutionality of

co

a statute: that is, we should ask only whether there is any
reasonably likely application of the rule that would comport
with the statutes. See State v. Sutherland, 329 Or 359, 365,
987 P2d 501 (1999) (“For a statute to be facially unconstitu-
tional, it must be unconstitutional in all circumstances, i.e.,
there can be no reasonably likely circumstances in which
application of the statute would pass constitutional mus-
ter.”). Here, the department asserts that the rules are valid
if the department can “show that the interspousal transfer
rules are capable of valid application.”

That is not the correct legal standard when an
administrative rule is challenged, however. This court has
explained that the standard for a facial challenge to the con-
stitutionality of a statute is “foreign to the administrative
law of this state” when the court is reviewing “what at bot-
tom simply are challenges to the validity of an administra-
tive rule.” See Friends of Columbia Gorge v. Columbia River
(S055772), 346 Or 366, 375-76, 213 P3d 1164 (2009) (Court
of Appeals had erred in concluding that a management plan
should be reviewed under federal standard for determin-
ing the constitutionality of statute, which was whether the
statute “cannot be applied consistently with the law under
any circumstance” (internal quotation marks and citation
omitted)). In fact, “this court, so far as we can determine,
has never applied that standard to anything other than a
constitutional challenge to a statute.” Id. at 376.

As this court had previously explained, the correct
sequence and nature for analyzing a challenge under ORS
183.400, is as follows:

“In the proper sequence of analyzing the legality of
action taken by officials under delegated authority, the
first question is whether the action fell within the reach
of their authority, the question which in the case of courts
is described as ‘jurisdiction’ If that is not in issue, as it
is not in this case, the question is whether the action was
taken by procedures prescribed by statute or regulation.
Assuming that proper procedures were followed, the next
question is whether the substance of the action, though
within the scope of the agency’s or official’s general author-
ity, departed from a legal standard expressed or implied
in the particular law being administered, or contravened

pe 681

some other applicable statute. These steps are designed to
assure that the challenged action, particularly an action
challenged for arguably violating constitutional rights, in
fact was authorized by the state’s or local government’s
politically accountable policy makers.”

Planned Parenthood Assn. v. Dept. of Human Res., 297 Or
562, 565, 687 P2d 785 (1984); see also Friends of Columbia
Gorge, 346 Or at 376-77 (applying that standard).

We do not understand petitioner to challenge the
department's “jurisdiction” to promulgate a rule in this area
generally, or to assert that the department failed to follow
the required rulemaking procedures. See Nay, 267 Or App
at 242 (noting that petitioner does not challenge depart-
ment’s compliance with rulemaking procedures). Instead,
the initial question is whether the rules “depart[] from a
legal standard expressed or implied in the particular law
being administered, or contravene[] some other applicable
statute.” Planned Parenthood, 297 Or at 565; see State ex rel
Engweiler v. Felton, 350 Or 592, 620, 260 P8d 448 (2011)
(evaluating whether rules “depart from the legal standard
expressed or implied in the enabling statutes” (internal quo-
tation marks, alterations, and citation omitted)).

Planned Parenthood further explained that that
standard required examining whether the rule “corresponds
to the statutory policy.” 297 Or at 573.

“To the extent that the rule departs from the statu-
tory policy directive, it ‘exceeds the statutory authority
of the agency’ within the meaning of those words in ORS
183.400(4)(b).”

Id. The court added that that understanding was the only
way to give meaning to the statutory direction to consider
whether the rule “[e]xceeds the statutory authority of the
agency”:

“Authority’ in that section cannot be taken to mean only
the overall area of an agency’s authority or ‘jurisdiction,
because that construction would leave rules open to sub-
stantive review only for constitutional violations under
ORS 183.400(4)(a). In effect, such an interpretation would
expand every official’s rulemaking power on matters within

682 po

his general assignment to the limits of constitutional law,
whatever the legislative policy of the statute might be.”

Id.

In Planned Parenthood, this court held the rule at
issue invalid under ORS 183.400(4)(b). The legislature had
provided by statute that the agency could promulgate rules
for medical assistance, taking into account two variables:
medical need and financial need. 297 Or at 572. The agency
had promulgated a rule that provided that women over 18
could be reimbursed for only one elective abortion, while
women. 17 and under could be reimbursed for two. Although
the legislature had authorized the agency to promulgate
rules regarding reimbursement, the court concluded that
the rule at issue departed from the legislature’s statutory
policy directive. The rule rigidly assumed that a second elec-
tive abortion was automatically not medically necessary if
the woman was 18 or older, but that it was medically neces-
sary if the woman was 17 or younger. Id. at 573. Those rigid
and arbitrary limits did not correspond with the legislative
directive:

“We find it difficult to relate these arbitrary numerical rules
either to the variable of medical need or to the variable of
financial need implicit in the legislative program. Nor do
we see how they allow for consideration of ‘[t]he conditions
existing in each case,’ as commanded by ORS 414.042(1)(d)
[the relevant statute].”

Id.

In Leo v. Keisling, 327 Or 556, 964 P2d 1023 (1998),
this court similarly held that a rule did not conform to the
legislature’s statutory policy directive.t The legislature had
directed the Secretary of State to promulgate rules regard-
ing statistical sampling of initiative petition signatures in
order to “‘verify’” that the initiative petition had enough
signatures to qualify to be on the ballot. Id. at 563 (quot-
ing ORS 250.105(4)). The sampling rule promulgated by the

4 Leo did not involve a challenge under ORS 183.400; it was an “as applied”
challenge. However, the court applied the Planned Parenthood standard to con-
clude that the rule was invalid. See 327 Or at 562-63 (citing Planned Parenthood
and focusing on “whether the substance of the action departed from a legal stan-
dard expressed or implied in the law being administered”).

Po 683

Secretary of State, however, allowed initiatives to appear
on the ballot unless there was an 80 percent chance that
the initiative had not met the signature requirements. Id. at
565-66. This court found the rule to be inconsistent with the
statutory policy:

“Thle] policy [in the rule] cannot be reconciled with the pol-
icy in the statutory directive: ‘to verify’ that a petition con-
tains the required number of signatures, i.e., six percent of
the total number of votes cast for all candidates in the last
gubernatorial election.”

Id. at 566.

In Friends of Columbia Gorge, this court also
applied the Planned Parenthood standard to hold invalid
part of a management plan. That case is somewhat more
difficult to analyze, because it involved a commission cre-
ated by interstate compact and governed by federal law. See
346 Or at 369-72, 384. Although this court concluded that
the Planned Parenthood standard applied to the challenge
to the management plan, id. at 376-77, the court also held
that the commission, pursuant to federal law, was entitled
to deference when it resolved ambiguities and filled gaps in
the federal statutory scheme. See id. at 377-84. Even so, the
court concluded that two provisions of the plan violated the
federal act at issue. Id. at 399, 408. In the first case, the fed-
ral act “‘require[d]’” the management plan to insure that
levelopment occurred without causing adverse cumulative
ffects to natural resources. Id. at 393 (quoting relevant fed-
ral statutes). The management plan had made “some effort”
0 prevent certain types of development from having adverse
cumulative effects on natural resources, but “those efforts
are incomplete.” Id. at 398 (emphasis in original). Because
the management plan “fails to require that [certain types of]
development take place without causing adverse cumulative
effects to natural resources,” those portions of the manage-
ment plan were invalid. Id. at 398-99 (emphasis in original).
The second set of plan provisions were similarly defective.
See id. at 405-08 (concluding that provisions of management
plan “do not appear to be directed toward requiring that
commercial, residential, and mineral resource development
not cause adverse cumulative effects to cultural resources”
(emphasis in original).

+0220 &

———E—E—————eeeeEeE=Eel_

684 Po

We note that in Planned Parenthood and Leo, the
issue was whether the rule’s means of implementing the leg-
islature’s statutory directive is consistent with the statute,
not whether the outcome in some cases might correspond.
with the outcome that the legislature had directed. In both
of those cases, it presumably would have been “reasonably
likely” that the rule would sometimes lead to the same
results as the statute. In Planned Parenthood, some of the
women who would have been reimbursed under the rule
would also have been reimbursed under the statute. In Leo,
some of the initiatives that would have been placed on the
ballot under the rule would also have been placed on the bal-
lot under the statute. In neither case, however, did this court
suggest that an agency could defend a rule that led to out-
comes that are not permitted by the statute, by arguing that
the rule sometimes led to outcomes that are permitted by
the statute. See Planned Parenthood, 297 Or at 573 (explain-
ing that review for authority under ORS 183.400(4)(b)
does not allow agency to ignore legislative policy of stat-
ute). Thus, we reject the department’s suggested standard
of review.

Il. DISCUSSION

The department asserts that we should first exam-
ine whether the rules are valid under state law before con-
sidering whether they are valid under federal law. See State
v. Sarich, 352 Or 601, 617, 291 P3d 647 (2012) (noting “this
court’s usual methodology of considering issues of state law
before issues of federal law”). We agree, and begin by exam-
ining whether the rules are valid under state law.

A. Legal Standards Established By Rule Amendments
We must first identify the legal standard estab-

lished by the amended rules. As we will explain, the two
amendments establish the same basic legal standard.

The first amended rule, OAR 461-135-0832, defines
“estate.” Again, the version of the rule at issue provides, in
relevant part:

“(10) ‘Estate’ means:

Po 685

“(b) With respect to the collection of payments made
for public assistance provided on or after July 18, 1995:

ef ee ae

“(B) For recipients who die on or after October 1,
2008, all real property, personal property, or other assets,
wherever located, in which a recipient had any legal title
or ownership or beneficial interest at the time of death of
the recipient, including real property, personal property,
or other assets conveyed by the recipient to, subsequently
acquired by, or traceable to, a person, including the recipi-
ent’s spouse and any successor-in-interest to the recipient’s
spouse, through:

Creer

“(iii) Other similar arrangement, such as an inter-
spousal transfer of assets, including one facilitated by
a court order, which occurred no earlier than 60 months
prior to the first date of request established from the recip-
ient’s and the recipient’s spouse’s applications, or at any
time thereafter, whether approved, withdrawn, or denied,
for the public assistance programs referenced in OAR
461-135-0835(2).”

OAR 461-135-0832(10)(b)(B)(viii).

The second amended rule is OAR 461-135-0835,
which describes the department’s claim against the estate
of a Medicaid recipient. Again, the text of that amended rule
provides:

“e) For a recipient who died on or after October 1,
2008:

Gee ee

“(B) *** [T]he Department has a claim against the
estate of the recipient’s spouse for public assistance paid
to the recipient, but only to the extent that the recipient’s
spouse received property or other assets from the recipient
through any of the following:

ee ae

“Gii) An interspousal transfer, including one facili-
tated by a court order, which occurs:

“(I) Before, on, or after October 1, 2008; and

686 Pe

“QD No earlier than 60 months prior to the first date
of request (see OAR 461-135-0832) established from the
applications of the recipient and the recipient’s spouse, or
at any time thereafter, whether approved, withdrawn, or
denied, for the public assistance programs referenced in
section (2) of this rule.”

OAR 461-135-0835 (1)(e)(B) Gi).

The two amended rules thus establish the same
fundamental legal standard for recovering payments to a
Medicaid recipient from the estate of the recipient’s spouse.
The department must show that (1) an asset was transferred
from the Medicaid recipient to the spouse, and (2) the trans-
fer occurred within five years before the Medicaid recipient
first applied for benefits. If the department so demonstrates,
then the department may recover from the spouse's estate
up to at least the value of the amount transferred by the
Medicaid recipient.

Under ORS 411.060, the department has general
authority to “adopt and enforce rules necessary to ensure
full compliance with federal and state laws relating to pub-
lic assistance programs and functions administered by the
department.” The department does not, however, assert that
that generalized grant of rulemaking authority alone justi-
fies it in adopting these particular rules. Instead, the depart-
ment contends that its authority for the amended rules comes
from the broad manner in which ORS 416.350(6)(a) defines
the term “estate.” As noted, ORS 416.350(2) allows recovery
from the Medicaid recipient's “estate,” while ORS 416.350(6)(a)
defines “estate” to include “all real and personal property
and other assets in which the deceased individual had any
legal title or interest at the time of death.” The department
maintains that, as to any interspousal transfer—even those
made up to five years before the person applied for Medicaid
benefits—the Medicaid recipient retains a “legal title or
interest at the time of death.” The department contends that
the Medicaid recipient has such a title or interest at the time
of death in at least one of four ways: by the presumption
of equal contribution to and common ownership of marital
assets in the event of a marital dissolution (ORS 107.105(1)(£));
by the right of a spouse to an elective share under probate

po 687

law (ORS 114.600 to 114.725); by the statutory ability to
avoid transfers without adequate consideration under ORS
416.350(2); or by the statutory authority to avoid transfers
made with intent to hinder or prevent estate recovery under
ORS 411.630(2).°

We turn to the sources of law identified by the
department, and begin with the presumption of equal con-
tribution and common ownership under Oregon marital dis-
solution law.

B. Marital Dissolution Law

As petitioner notes, Oregon is a separate property
state, meaning that a spouse may hold property solely in his
or her own name. See Or Const, Art XV, § 5. That separate
property is not subject to the debts of the other spouse, ORS
108.050 (specifically adding that that is also true of “real or
personal property acquired by the spouse’s own labor during
the marriage”), and a spouse generally has no interest in
property owned by the other spouse, ORS 108.060 (subject
to exception for family expenses and education of children).

The statutory provision relied on by the department.
relates to property division on a marital dissolution. It pro-
vides, in part:

“(1) Whenever the court renders a judgment of marital
annulment, dissolution or separation, the court may pro-
vide in the judgment:

ook ote ae ae ae

“) For the division or other disposition between the
parties of the real or personal property, or both, of either or
both of the parties as may be just and proper in all the cir-
cumstances. In determining the division of property under
this paragraph, the following apply:

fe ee ae

5 On review, the department does not challenge the Court of Appeals conclu-
sion that “other similar arrangements,” in the definition of “estate,” is not, in and
of itself, broad enough to reach the interspousal transfers at issue. See 267 Or
App at 259-60 (indicating that “other similar arrangements,” in context, refers
only to “property in which the Medicaid recipient held an interest at the time of
death or that was transferred on account of the Medicaid recipient's death,” while
the rule amendments allow recovery of assets transferred before the Medicaid
recipient’s death).

688 Po

“(B) The court shall consider the contribution of a
party as a homemaker as a contribution to the acquisition
of marital assets.

“(C) Except as provided in subparagraph (D) of this
paragraph, there is a rebuttable presumption that both
parties have contributed equally to the acquisition of prop-
erty during the marriage, whether such property is jointly
or separately held.

ee eae

“(E) Subsequent to the filing of a petition for annul-
ment or dissolution of marriage or separation, the rights
of the parties in the marital assets shall be considered a
species of co-ownership, and a transfer of marital assets
under a judgment of annulment or dissolution of marriage
or of separation entered on or after October 4, 1977, shall
be considered a partitioning of jointly owned property.”

ORS 107.105(1)(£).

ORS 107.105 addresses property divisions in mar-
ital dissolution cases. There are two different types of
property involved. “Marital property” is all property held
by either spouse, regardless of whether it is held jointly or
separately and regardless of when it was obtained. “Marital
assets,” by contrast, are a subset of marital property. They
are the assets obtained during the marriage by either
spouse. See Kunze and Kunze, 337 Or 122, 133, 92 P3d
100 (2004) (describing both types of property). For mari-
tal assets, there is a rebuttable presumption that both par-
ties contributed equally to the acquisition of those assets,
and that homemaking constitutes a contribution. ORS
107.105 (1)(£)(B), (C).

In making the property division, the court may
award any marital property. It is not limited to awarding
marital assets. Thus, the court may award to one spouse an
asset that the other spouse obtained prior to the marriage
and has always held separately. The court may also award
to one spouse a marital asset as to which the other spouse
rebutted the presumption of equal contribution. See Kunze,
337 Or at 135 (so noting). The ultimate question is whether
the division is “just and proper in all the circumstances.”
ORS 107.105(1)(f); see Kunze, 337 Or at 133 (to achieve just

Po 689

and proper division, “the statute empowers the court to dis-
tribute any real or personal property that either or both of
the parties hold at the time of dissolution, including prop-
erty that the parties had brought into the marriage”).

If the court awards marital assets obtained during
the marriage, but held in the name of a single spouse, then
ORS 107.105(1)(f)(E) applies: The parties are considered to
hold the asset in a “species of co-ownership,” and the trans-
fer is considered a division of “ jointly owned property.” As
this court explained in Engle and Engle, 293 Or 207, 646
P2d 20 (1982), that text was added to the statute to prevent
adverse tax consequences to a married couple. But for that
amendment, if the court awarded one spouse an asset that
had been held solely in the name of the other spouse—even
if it was a marital asset and even if the other spouse was
presumed to have contributed equally to its acquisition—the
transfer might not be considered a transfer of jointly owned
property, and the transferring spouse would be subject to
tax liability. See id. at 209-10 (noting that Court of Appeals
had so held in that case). In Engle, the court was unwilling
to say anything more about the “species of co-ownership”
than that it prevented adverse tax consequences on a prop-
erty division. 293 Or at 219, 219 n 11.

To summarize: ORS 107.105 deals with the factors
that a court considers in making a just and proper division
of all property held by either spouse on dissolution of mar-
riage. For property acquired during the marriage, there
is a rebuttable presumption that both spouses contributed
equally. If property acquired during the marriage is held
in one spouse’s name and the presumption of equal contri-
bution is not rebutted, and if the trial court awards that
property to the other spouse, then the property is treated
as being held in a species of co-ownership and the award is
considered a division of jointly owned property. The species
of co-ownership thus appears to be a way to give effect to the
presumption of equal contribution by both spouses, recogniz-
ing the different kinds of contributions spouses may make to
marital assets during a marriage. See Engle, 293 Or at 211
n 4 (quoting legislative history indicating that amendment
regarding species of co-ownership was merely to “clarify the

690 Po

effect” of existing statutory provision presuming equal con-
tribution of both spouses and directing that homemaking
constituted a contribution). In short, the statutory provision
relied upon by the state, ORS 107.105(1)(f)(E), addresses
the consequences if the trial court should decide to make a
particular property division. The statute does not otherwise
appear to require the trial court to make any particular
property division.

We do not, however, find it necessary to determine
whether the presumption of equal contribution to the acqui-
sition of marital assets creates a property interest within
the meaning of ORS 416.350(6)(a). Even if the marital
dissolution statute did create the sort of interest in prop-
erty at death described by the definition of “estate” in ORS
416.350(6)(a), that would not resolve the issue before us. To
determine the validity of the rule amendments, we must
compare the legal standards contained in Oregon’s marital
dissolution statute with the legal standards found in the
rule amendments.

In comparing the legal standards, we find major
variations. The presumption of equal contribution on a mar-
ital dissolution applies only to assets obtained during the
marriage (marital assets); the rule amendments at issue
apply to all property, without regard to when that prop-
erty was obtained, as long as the Medicaid recipient trans-
ferred it to the spouse. The marital dissolution presump-
tion is only a presumption, and it can be rebutted; the rule
amendments are absolute on their face. The marital disso-
lution presumption is simply a factor used by the courts to
make a just and proper distribution of all marital property,
whether separately or jointly owned; the rule amendments
directly attach to a particular asset, apparently in a fixed
amount. The rule amendments thus use broader criteria
than the marital dissolution statute, and they would allow
the department to make estate recovery in situations where
ORS 107.105(1)(£)(E) would not. Accordingly, the legal stan-
dards found in the rule amendments depart from the statu-
tory standards found in the marital dissolution statutes.®

6 Engle specifically left open whether the “species of co-ownership” provision
would apply if the marital asset had been a gift to one spouse. See 293 Or at
214, In 2011, the legislature amended ORS 107.105(1)(£) to specifically state that

Ti 691
C. Elective Share Under Probate Law

The department alternatively contends that the
rule amendments are valid because Oregon probate law—
specifically, the statutes relating to the elective share—gives
a Medicaid recipient a “legal title or interest at the time of
death” in the property that the recipient had transferred to
the spouse. We turn now to that contention.

The elective share statutes are found in ORS 114.600
to 114.725. The elective share is a surviving spouse's right to
claim a share of what is called the “augmented estate.” ORS
114.605(1). The amount of that share is a percentage of the
augmented estate. ORS 114.605(2). The percentage is deter-
mined solely by the number of years that the parties were
married, with the highest fractional share being 33 percent.
Id. The augmented estate itself is all of the decedent’s pro-
bate and nonprobate assets (as defined), plus essentially all of
the surviving spouse's assets (called the “surviving spouse’s
estate”). ORS 114.630 (defining augmented estate generally);
see ORS 114.675 (defining surviving spouse’s estate). If the
surviving spouse takes the elective share, the elective share
is first decreased by the amount of the surviving spouse’s
estate. ORS 114.700(1). Only if that calculation still leaves
some portion of the elective share unpaid will the surviving
spouse be paid from the decedent’s estate. ORS 114.700(2).’

property acquired by gift during the marriage, as long as it was always held
separately, is not subject to the presumption of equal contribution. Or Laws 2011,
ch 806, § 1 (adding new ORS 107.105(1)(£)(D)).

If one spouse transfers an asset to another, it is possible that that statutory
amendment could terminate the presumption of equal contribution. We need not,
and do not, decide that question here.

7 There are a number of other limitations on the elective share. One is
obvious: Because the definition of “estate” requires us to consider the interest
at the time of the Medicaid recipient’s death, the elective share requires us to
assume counterfactually that, at that moment, the deceased Medicaid recipi-
ent is in fact alive to claim the elective share from his or her deceased spouse.
‘See ORS 114.600(1) (requiring that the election must be made “before the death
of the surviving spouse”), The elective share is subject to other limitations as
well. H.g., ORS 114.610 (procedurally, election must be made within nine months
after spouse's death); ORS 114.620 (right to elective share may be waived); ORS
114.725 (if couple was “living apart at the time of the decedent’s death, whether
or not there was a judgment of legal separation,” surviving spouse may be denied
elective share, or may be limited to an amount that is “reasonable and proper”).
We do not discuss those limitations in detail here, because they are not necessary
to a determination of the issue before us.

602 Po

Thus, to simplify: On the death of a person, that
person's spouse can seek an elective share. If the spouse
takes an elective share, the value of all of the decedent’s
assets and the spouse’s assets are added together. The
spouse will get a fraction of that sum, based entirely on
how many years the couple had been married. But that
amount is not awarded directly from the decedent’s estate.
Instead, the spouse’s elective share is first “paid out” with
the spouse’s own assets. Only if that does not fully satisfy
the elective share will the spouse receive money from the
decedent’s estate.

We now compare those legal standards to the stan-
dards found in the amended rules. We again assume, for
purposes of argument, that the elective share under pro-
bate law constitutes the sort of interest in property at death
described by the definition of “estate” in ORS 416.350(6)(a).
Even so, we find major differences in the legal standards.
The elective share fraction depends entirely on the num-
ber of years of marriage; the rule amendments focus solely
on the amount transferred during a particular period. The
elective share considers the whole value of the augmented.
estate; the rule amendments ignore anything other than
the transferred asset. In fact, the legal standards are so
different that it is difficult to find any points of correspon-
dence at all. One cannot say that the rule amendments
would lead to the same estate recovery, even in the most
rough way, as the elective share statutes. Furthermore, the
amended rules would allow the department to make estate
recovery in situations where the elective share would not.
The legal standard in the rule amendments thus also
depart from the statutory standards found in the elective
share statutes.

D. Other Avoidable Transfers

Finally, the department asserts that the rule
amendments are valid because the Medicaid recipient
retains an interest at death as to assets that were trans-
ferred with inadequate consideration or with actual intent
to hinder or prevent estate recovery, two statutes mentioned
previously. We will assume for purposes of argument that
both statutes create the sort of interest in property at death

pe 698

described by the definition of “estate” in ORS 416.350(6)(a).
We briefly consider each in turn.

1. Transfers Without Adequate Consideration

By law, transfers for inadequate consideration can
be avoided under ORS 416.350(2), which provides, in part:

“Transfers of real or personal property by recipients of such
aid without adequate consideration are voidable and may
be set aside under ORS 411.620(2).”

The department contends that the rule amendments are
valid under that statute.

Again, we find broad differences between the legal
standards contained in that statute and the amended rules.
As the department concedes, that statute does not apply
to transfers made by someone before they either became a
Medicaid recipient or at least applied for such aid, because
the statute applies only to transfers made “by recipients
of such aid.” The rule amendments, on the other hand,
expressly apply to transfers made before someone applies
for Medicaid—up to five years before that time. The statute
makes voidable only those transfers made without adequate
consideration. The rule amendments on their face apply
without regard to the amount of consideration. Thus, the
amended rules again would allow the department to recover
in situations where the statute would not. The rule amend-
ments depart from the statutory legal standard.

2. Transfers With Intent to Hinder or Prevent Estate
Recovery

In addition, transfers that the Medicaid recipient
made with the intent to hinder or prevent estate recovery
are forbidden by ORS 411.630(2); that in turn permits them
to be recovered under ORS 411.620. ORS 411.630(2) pro-
vides, in part:

“A person may not transfer, conceal or dispose of any
money or property with the intent:
Csi ok oR oR

“(b) Except as to a conveyance by the person to cre-
ate a tenancy by the entirety, to hinder or prevent the

oo

department or the authority from recovering any part of
any claim it may have against the person or the estate of
the person.”

Here again, the rule amendments create a very dif:
ferent legal standard from that found in the statute. The
statute requires a showing that the transfer was made with
avery specific and particular intent: to hinder or prevent the
department from making estate recovery. The rule amend-
ments require no showing of any intent as to the transfer;
textually, an interspousal transfer made within the rele-
vant time period is invalid without any need to consider the
transferor’s intent. The rule amendments thus would allow
the department to make estate recovery in circumstances
where the statute would not.

E. Summary: Rules Are Invalid Under State Law

The legislature did not grant the department gen-
eralized authority to determine what transactions should
be set aside. Instead, the legislature reserved that task to
itself. It defined “estate” to include property interests that
the Medicaid recipient held at the time of death. It also
authorized the department to recover certain transfers—
transfers made without adequate consideration by a
Medicaid recipient, and transfers made with intent to hin-
der or prevent estate recovery.

The rule amendments at issue here show no connec-
tion to those limitations. They do not refer to the sources of
law that they supposedly effectuate (e.g., property division
under marital dissolution law, elective share under probate
law). They do not incorporate the limitations found in those
sources of law (e.g., the presumption of equal contribution on
marital dissolution is rebuttable; the amount of the elective
share is limited by number of years of marriage). The rule
amendments instead allow the department to recover trans-
fers based on an unrelated set of legal criteria. Because the
amended rules “departed from a legal standard expressed or
implied in the particular law being administered,” Planned
Parenthood, 297 Or at 565, the department exceeded its
authority in adopting them, and they are invalid under ORS
183.400(4)(b).

fF 695

F. Court of Appeals’ Consideration of Federal Law

The department nonetheless asks us to reverse the
Court of Appeals insofar as it concluded that the rules are
inconsistent with federal law. In the event that the rules are
held invalid, the department intends to ask the legislature
to amend the state statutes in a way that would allow it to
recover such transfers; it believes that the decision of the
Court of Appeals would preclude that.

In this particular case, we conclude that it is appro-
priate for us to vacate that part of the Court of Appeals’
opinion. Because we agree with petitioner that the amended.
rules are invalid under state law, they are simply invalid. It
is unnecessary for us to decide whether, or to what extent,
the rules might also be invalid under federal law.

IV. CONCLUSION

The department promulgated rule amendments
that allow it to obtain estate recovery from transfers
made to a spouse within the five years before a person
applies for Medicaid. Our standard for judicial review is
whether the department exceeded its statutory authority,
ORS 183.400(4)(b), and more specifically whether the rule
amendments depart from a legal standard expressed or
implied in the particular law being administered, Planned
Parenthood, 297 Or at 565. Because “estate” is defined to
include any property interest that a Medicaid recipient
held at the time of death, the department asserted that
the Medicaid recipient had a property interest that would
reach those transfers. In doing so, it relied on four sources:
the presumption of common ownership in a marital dissolu-
tion, the right of a spouse to claim an elective share under
probate law, the ability to avoid a transfer made without
adequate consideration, and the ability to avoid a transfer
made with intent to hinder or prevent estate recovery. In
all instances, the rule amendments departed from the legal
standards expressed or implied in those sources of law.
Accordingly, the rule amendments exceeded the depart-
ment’s statutory authority under ORS 183.400(4)(b). The
Court of Appeals correctly held the rule amendments to be
invalid.

696

The decision of the Court of Appeals is affirmed in
part and vacated in part. The rule amendments to OAR
461-135-0832(10)(b)(B)(viii) (2010) and OAR 461-135-0835
(1)(e)(B)Gii) (2010) are held invalid.

698

Argued and submitted September 19, decision of Court of Appeals reversed,
judgment of cireuit court reversed, and case remanded to circuit court for
further proceedings December 22, 2016

Stacie PHILIBERT,
in her capacity as guardian ad litem for
Cameron Hollenbeck-Hatch and
Domanick Hollenbeck-Hatch,
Petitioners on Review,
v.
Dennis Dixon KLUSER,
Respondent on Review.

(CC 18CV01410, CA A156192, SC S063738)

385 P3d 1038

SC

Kathryn H. Clarke, Portland, argued the cause and filed
the brief for the petitioners on review. Also on the briefs was
Tim Williams, Bend.

Flavio A. Ortiz, Lachenmeier Enloe Rall & Ortiz,
Portland, argued the cause and filed the brief for the respon-
dent on review. Also on the briefs was Martin M. Rall.

Cody Hoesly, Larkins Vacura LLP, Portland, filed the
brief for amicus curiae Oregon Trial Lawyers Association.

Before Balmer, Chief Justice, and Kistler, Walters,
Landau, Baldwin, and Brewer, Justices, and Rebecca

eee)

A. Duncan, Judge of the Court of Appeals, Justice pro
tempore.**

BALMER, C. J.

The decision of the Court of Appeals is reversed. The
judgment of the circuit court is reversed, and the case is
remanded to the circuit court for further proceedings.

** Nakamoto, J., did not participate in the consideration or decision of this
case.

700 Le

BALMER, C. J.

This case requires us to consider the circumstances,
if any, under which damages may be recovered by a bystander
who suffers serious emotional distress as a result of observ-
ing the negligent physical injury of another person. Plaintiffs
witnessed the death of a family member who was run over
by a truck, but were not themselves physically injured.1 They
sought recovery for their emotional distress. The trial court
dismissed the action and the Court of Appeals affirmed,
both relying on the “impact rule.” Philibert v. Kluser, 274
Or App 195, 361 P3d 610 (2015). The impact rule allows a
plaintiff to seek damages for negligently caused emotional
distress only if the plaintiff can show some physical impact
to himself or herself, thus precluding the claims brought by
plaintiffs in this case. For the reasons that follow, we con-
clude that plaintiffs should be able to pursue their claims
notwithstanding the fact that they did not themselves suf-
fer physical injury. We therefore reverse the decision of the
Court of Appeals and the judgment of the circuit court, and
remand the case to the trial court.

I. FACTS AND PROCEEDINGS BELOW

Because plaintiffs appeal a judgment dismissing
their complaint for failure to state a claim, ORCP 21 A(8), we
take as true the facts alleged in the complaint. Plaintiffs are
two brothers, aged eight and 12, who were crossing a street
in a crosswalk with the walk signal with their seven-year-
old younger brother. Defendant negligently drove his pickup
truck through the crosswalk, running over the youngest boy
and narrowly missing the other two. The brother who was
struck died at the scene. The two surviving brothers wit-
nessed their brother’s death and experienced serious emo-
tional injuries as a result.

Plaintiffs filed this action against the driver, alleg-
ing negligence and seeking compensation for their emotional
injuries. Their injuries include severe emotional distress,
depression, post-traumatic stress disorder, aggression, and.
severe anxiety. Defendant moved to dismiss their complaint

1 For the purposes of this opinion, “plaintiffs” refers to the two minors who
are represented in this litigation by their guardian ad litem.

Po 701

for failure to state a claim upon which relief could be granted,
arguing that, as bystanders who had not been physically
injured by defendant, they could not recover for their emo-
tional distress. The trial court granted that motion, applying
the “impact rule” announced in Saechao v. Matsakoun, 78
Or App 340, 717 P2d 165, rev dismissed, 302 Or 155 (1986),
and plaintiffs appealed. The Court of Appeals affirmed the
trial court’s dismissal, also citing Saechao. Philibert, 274 Or
App 195.

In Saechao, the Court of Appeals confronted a sit-
uation factually similar to the present case. A driver negli-
gently drove a car onto a sidewalk, killing one child, strik-
ing a sibling, and leaving two additional siblings untouched.
Saechao, 78 Or App at 342-43. The three surviving children
sued to recover for the emotional distress caused by wit-
nessing their brother’s death. Id. at 343. The court recog-
nized the case as presenting a question of first impression of
“when a person who witnesses the negligently caused injury
or death of a member of the immediate family may recover
damages for serious emotional distress resulting from wit-
nessing the accident.” Id. at 342. A divided, en banc court
adopted the impact rule, “requiring that there be a direct
accompanying [physical] injury to the person who suffers
the emotional distress as a prerequisite to its compensabil-
ity.” Id. at 346. As a result, the child who was physically
injured was permitted to seek emotional distress damages
caused by witnessing his brother’s death, but the claims by
the two siblings who were not physically injured were dis-
missed. Judge Warren, writing for four judges, dissented.
Id. at 348. The two children who were not injured, and thus
had no claim, petitioned this court for review. We allowed
review, but the case was settled and the petition for review
dismissed. Saechao, 302 Or at 156. The Court of Appeals
has continued to follow the impact rule in subsequent cases,
as it did here. See, e.g., Sherwood v. ODOT, 170 Or App 66,
77-78, 11 P3d 664, rev den, 331 Or 692 (2000). We directly
address the bystander recovery issue here for the first time.

II. ANALYSIS

Plaintiffs urge us to abandon the impact rule and
adopt in its place a rule that allows them to recover damages

702 Lt

for their emotional distress without showing any physical
harm to themselves. They suggest a “zone of danger” rule
or a foreseeability-based rule. Although we agree that the
impact test should not control bystander recovery, we do
not adopt either of their suggested alternatives. Instead,
for the reasons discussed below, we conclude that the rule
articulated in the Restatement (Third) of Torts section 48
(2012) best promotes principled outcomes while avoiding
the prospect of imposing potentially unlimited liability on
defendants for the emotional distress that their negligence
may cause. We begin our discussion by reviewing our exist-
ing case law regarding recovery of damages for negligent
infliction of emotional distress and the role that foreseeabil-
ity has in those claims. We then consider whether a claim for
recovery of those damages in the circumstances presented
here—where the plaintiff witnesses the negligently caused
traumatic injury or death of a close family member—is
consistent with our case law and should be recognized as
a common law tort claim. Answering that question in the
affirmative, we evaluate several tests for recovery in such
circumstances that have been used by other courts, rejecting
the impact rule adopted by the Court of Appeals in Saechao
and plaintiffs’ proposed zone of danger rule and adopting
instead the test set out in section 48 of the Restatement.
Finally, we apply the Restatement test to the facts of this
case.

A. The Norwest Framework

In Norwest v. Presbyterian Intercommunity Hosp.,
293 Or 548, 558-61, 652 P2d 318 (1982), we mapped the
landscape of cases addressing claims for emotional distress
damages and explained the framework that guides recov-
ery for those injuries. Oregon allows plaintiffs to recover
damages for emotional distress when they are physically
injured, see id. at 558, and when the defendant acted inten-
tionally, id. at 559 (citing Hall v. The May Dept. Stores, 292
Or 181, 637 P2d 126 (1981)). At issue here is a third basis
recognized in Norwest for recovery of damages for emo-
tional distress: when a defendant negligently causes fore-
seeable, serious emotional distress and also infringes some
other legally protected interest. Norwest, 293 Or at 559. The
plaintiffs claim in that circumstance partially resembles

Po 708

a common-law negligence claim in that it rests on the con-
cept of foreseeability. Norwest made clear, however, that the
injury’s foreseeability, standing alone, is insufficient to
establish the defendant’s liability: there must also be another
“legal source” of liability for the plaintiff to recover emotional
distress damages. Norwest, 293 Or at 569 (explaining that
liability for emotional distress must have “a legal source
besides its foreseeability”). Those two concepts identified in
Norwest—foreseeability and the source of a legally protected
interest—guide our analysis in this case.

Perhaps the simplest legally protected interest is
to be “free from physical harm at the hands of another.”?
Gaston v. Parsons, 318 Or 247, 255 n 8, 864 P2d 1319 (1994).
In the context of that general interest to be free from phys-
ical harm, a defendant is liable to a plaintiff for damages
resulting from the defendant’s conduct that “unreasonably
created a foreseeable risk *** of the kind of harm that
befell the plaintiff.” Fazzolari v. Portland School Dist. No.
JJ, 303 Or 1, 17, 734 P2d 1326 (1987); see also Piazza v.
Kellim, 360 Or 58, 69-72, 377 P3d 492 (2016) (discussing
elements of negligence claim). In addition to foreseeability’s
role in determining community standards for “blameworthi-
ness” and liability, Fazzolari, 303 Or at 12, foreseeability is
a pragmatic limit on liability for negligently caused physi-
cal harm because of the relative scarcity of physical injury,
compared with emotional harm. See id. at 13 (identifying
foreseeability as “a limit on the scope of liability”).

In contrast to physical harms, emotional harms
occur frequently. Fowler V. Harper, Fleming James, Jr. &
Oscar S. Gray, 3 Harper, James and Gray on Torts § 18.4,
812 (3d ed 2007) (“The zone of psychic danger is more exten-
sive than the zone of the foreseeable hazard of physical
impact.”). Any number of people may suffer emotional dis-
tress as the foreseeable result of a single negligent act. The
Restatement provides an example: “a negligent airline that
causes the death of a beloved celebrity can foresee genuine
emotional harm to the celebrity’s fans, but no court would

2 Labeling freedom from physical harm as a legally protected interest for
purposes of recovering emotional distress damages under the third category out-
lined in Norwest is simply a different way of stating the general rule that emo-
tional distress damages are available to a plaintiff who is physically injured.

704 Ld

permit recovery for emotional harm under these circum-
stances.” Restatement § 48 comment g. For that reason, fore-
seeability, standing alone, is not a useful limit on the scope
of liability for emotional injuries. In Harris v. Suniga, 344
Or 301, 180 P3d 12 (2008), this court explained that allow-
ing recovery for economic loss on the basis of foreseeability,
without requiring more, would invite, in the words of Judge
Cardozo, “liability in an indeterminate amount for an inde-
terminate time to an indeterminate class.” Id. at 308 (quot-
ing Ultramares Corporation v. Touche, 255 NY 170, 179, 174
NE 441, 444 (1931) (emphasis omitted)); see also Ore-Ida
Foods v. Indian Head, 290 Or 909, 917, 627 P2d 469 (1981)
(discussing “practically limitless” claims for consequential
economic injury). Emotional distress, like economic loss, rip-
ples throughout society as a foreseeable result of negligent
conduct. Without some limiting principle in addition to fore-
seeability, permitting recovery for emotional injuries would
create indeterminate and potentially unlimited liability.

As a result, if we were to recognize a legally pro-
tected interest against all negligently caused emotional
harms, then foreseeability would no longer serve as an effec-
tive limit on liability. Nevertheless, even where a plaintiff
has not been physically harmed, recovery for foreseeable
emotional damages is available when the defendant’s con-
duct “infringed some legally protected interest apart from
causing the claimed distress[.]”® Norwest, 293 Or at 559. In
the context of emotional distress, a legally protected inter-
est is “‘an independent basis of liability separate from the
general duty to avoid foreseeable risk of harm.” Lockett v.
Hill, 182 Or App 377, 380, 51 P3d 5 (2002) (quoting Phillips

5 Another way to compare negligence claims for physical and emotional injury
is to contrast the extent of legal protection from physical harm with the extent of
legal protection from emotional harm, A person’s physical well-being is broadly
protected: almost any kind of physical injury or even touching can be actionable.
In contrast, a person's emotional well-being is not subject to general protection
under the law. Courts and legislatures, however, have identified certain circum-
stances in which emotional well-being is legally protected. Examples include
emotional harm resulting from invasion of privacy, Hinish v. Meyer & Frank Co.,
166 Or 482, 113 P2d 438 (1941), or disinterment of the body of a spouse, Hovis v.
City of Burns, 243 Or 607, 415 P2d 29 (1966). As discussed, a plaintiff secking to
recover for negligent infliction of emotional distress must identify the invasion of
an interest that is or should be legally protected, and must also allege the facts
otherwise necessary to support a negligence claim. See Norwest, 293 Or at 569.

pe 705

v. Lincoln County School District, 161 Or App 429, 433, 984
P2d 947 (1999)). The right to recovery for such injuries does
not “arise from infringement of every kind of legally pro-
tected interest, but from only those that are ‘of sufficient
importance as a matter of public policy to merit protection
from emotional impact.” Id. (quoting Hilt v. Bernstein, 75
Or App 502, 515, 707 P2d 88 (1985), rev den, 300 Or 545
(1986)). For example, the invasion of a person's privacy will
not always support a claim for emotional injury, because the
nature and context of the invasion influences the extent to
which privacy is legally protected and can be the basis for
a successful emotional distress claim. Compare Anderson v.
Fisher Broadcasting Co., 300 Or 452, 712 P2d 803 (1986)
(denying claim for emotional distress resulting from televi-
sion station’s use of image of plaintiff as stock footage in
unrelated news story) with Hinish v. Meyer & Frank Co., 166
Or 482, 506, 113 P2d 438 (1941) (allowing claim for emo-
tional distress when plaintiff’s name was signed without his
consent on a telegram to the governor).

Among other circumstances, this court recognizes a
plaintiff's legally protected interest when another party has
a legal duty “designed to protect plaintiff[] against the type
of harm which *** occurred.” Nearing v. Weaver, 295 Or 702,
708, 670 P2d 187 (1983). For example, in McEvoy v. Helikson,
277 Or 781, 562 P2d 540 (1977), the court upheld a father’s
claim for emotional damages against a lawyer who delivered
a passport to the mother that resulted in the mother leaving
the country with the couple’s child. The lawyer had violated
a court order to keep the passport until the father had cus-
tody of the child. Jd. at 784. The reviewing court concluded
that when the judge issued that order, it was “foreseeable
that [the mother] might *** take [the child] with her back
to Switzerland” and that “the primary purpose” of the order
was to “protect plaintiff against the happening of that very
danger.” Id. at 788.

Similarly, in Nearing, the plaintiff stated a claim
for recovery of emotional distress damages when she alleged
that police officers violated a statutory duty to arrest her
ex-spouse, who later threatened her. 295 Or at 707. The
legally protected interest in that case was created by a
statute designed to protect victims of domestic abuse. Id.

ETE —————————————————————_

706 Lt

at 709 (“The widespread refusal or failure of police officers
to remove persons involved in episodes of domestic vio-
lence was *** the main reason *** to require enforcement
of restraining orders by mandatory arrest ***.”), In other
words, “the risk, the harm, and the potential plaintiff were
all foreseen by the lawmaker.” Id. at 708-09. In both McEvoy
and Nearing, the plaintiffs successful claim for emotional
distress damages rested on the defendant’s violation of a
legally protected interest, which in turn originated from a
legal duty designed to protect the plaintiff from the type of
emotional harm that occurred.

In addition to court order and statute, common law
also can be the source of a legally protected interest capable
of supporting a claim for recovery of emotional distress. See,
eg., Macca v. General Telephone Co. of N.W., 262 Or 414,
418, 495 P2d 1193 (1972) (allowing claim for emotional dam-
ages on the basis of infringement of right to be free from
private nuisance); Hovis v. City of Burns, 243 Or 607, 613,
415 P2d 29 (1966) (allowing claim for emotional damages
on the basis of infringement of right of a surviving spouse
to have the remains of a deceased spouse undisturbed); cf.
MT & M Gaming, Inc. v. City of Portland, 360 Or 544, 562,
383 P3d 800 (2016) (noting, in a different context, that “[a]s
a general proposition, legal recognition can come from many
sources—statutes, constitutional provisions, regulations,
local ordinances, and the historical and evolving common
law”).

In contrast, this court has denied recovery to plain-
tiffs for emotional injuries resulting from a defendant’s neg-
ligence when there is no independent legal source of liability.
See, e.g., Norwest, 293 Or at 568-69 (denying child’s claim for
“loss of his mother’s society and companionship” because the
defendant’s liability “had no legal source besides its foresee-
ability”); Hammond v. Central Lane Communications Center,
312 Or 17, 24, 819 P2d 593 (1991) (denying recovery to wife
who claimed emotional injury caused by watching husband
die from heart attack while 9-1-1 system negligently delayed
response because she had not “point[ed] to some legally
protected interest of hers that defendants violated” (inter-
nal quotation omitted)); Anderson, 300 Or at 469 (denying
recovery to plaintiff whose image was used in television

Pe 107

news story because he had not shown that “the manner
or purpose of defendant’s conduct [was] wrongful in some
respect apart from causing the plaintiff's hurt feelings”).

We now turn to the bystander’s claim for negli-
gently inflicted emotional distress. Plaintiffs assert the vio-
lation of two legally protected interests that they contend
are sufficient to support their negligence claims: the right
to avoid emotional injury caused by violations of traffic laws
and the common law right of a bystander to avoid observing
the physical injury of a close family member.‘ This court has
not had occasion to previously consider such a “bystander
claim.” Norwest, 293 Or at 559 n 18 (“We have not had occa-
sion to examine the bystander’s claim for psychic injury
from witnessing a negligent physical injury to a close rela-
tive ***”), Our prior cases, however, have allowed claims for
negligently inflicted emotional distress to proceed when the
court has determined that an asserted common law interest
is sufficiently important to support the imposition of liabil-
ity. The negligent handling of a spouse’s remains in Hovis
and the particular invasion of privacy at issue in Hinish—
an unauthorized telegram to the Governor falsely stating
the plaintiffs support for particular legislation—are exam-
ples. In our view, the interest in avoiding being a witness to
the negligently caused traumatic injury or death of a close
family member is similarly important. Witnessing sudden
physical injury or death is a palpable and distinct harm, dif-
ferent in kind even from the emotional distress that comes
with the inevitable loss of our loved ones. Plaintiffs here
watched as their younger brother was crushed by a pickup
truck—a violation of their interest in not witnessing such a
shocking and tragic event. And the resulting impact on them
might be described as the emotional equivalent of a physical
injury. As Prosser and Keeton observe, following Dillon v.
Legg, 68 Cal 2d 728, 441 P2d 912 (1968) and similar cases,
it is “obvious” and favored by “[alll ordinary human feel-
ings” that the damages for emotional distress of a mother

+ Because we conclude that plaintiffs have alleged a legally protected com-
mon law interest that is sufficient under Norwest to support their claim for emo-
tional distress in these circumstances, we do not address their alternative argu-
ment that Oregon’s traffic laws establish a “legally protected interest” on the part
of persons who suffer emotional injury when another person violates those laws.

708 Le

seeing her child injured should be recoverable in negligence.
W. Page Keeton, Dan B. Dobbs, Robert E. Keeton & David
G. Owen, Prosser and Keeton on the Law of Torts § 54, 366
(5th ed 1984). We have no difficulty concluding that plain-
tiffs have alleged the violation of a legally protected common
law interest to be free from the kind of emotional distress
injury caused by defendant’s negligence here.

Our remaining task is to frame the contours of
that interest and identify the elements that will allow a
bystander to recover for the negligent infliction of emotional
distress, while also providing a limiting principle that will
avoid potentially unlimited claims or damages.® To do so,
we consider three tests that courts commonly have used in
similar cases: the impact test, the zone of danger test, and
the Restatement approach.

B. The Impact Test

The impact rule allows a plaintiff to recover for emo-
tional distress when he or she also has suffered a physical
injury. The Court of Appeals in Saechao applied that gen-
eral rule to bystander cases, ruling that a bystander could
not recover for emotional distress unless there is “direct
accompanying [physical] injury to the person who suffers
the emotional distress.” 78 Or App at 346. Proponents of the
impact rule claim that its merit lies in the bright line test
for liability that it creates, id. at 348 (describing the impact
test as providing a clear line and creating a “clear relation-
ship between compensability and the plaintiff's being a vic-
tim of a breach of duty”); the clean question of proof that
it presents, Keeton et al, Prosser and Keeton on the Law of
Torts § 54, 364 (describing the impact test’s “true value” as
“the opportunity which is afforded to the defendant to testify
that there was in fact no impact”); and as a “guarantee that
the mental disturbance is genuine,” Wilson v. Tobiassen, 97
Or App 527, 532, 777 P2d 1379, rev den, 308 Or 500 (1989)
(internal quotation omitted).

5 The Restatement notes that courts in states that allow recovery on the basis
of foreseeability alone have had to resort to the “artificial manipulation of fore-
seeability” to avoid potentially “excessive and unworkable liability” for emotional
distress claims. Restatement § 48 Reporters Note comment g (citing Colbert v.
Moomba Sports, Inc., 163 Wash 2d 43, 176 P3d 497 (2008) (illustrating strained
application of foresecability)).

pe 709

The impact rule is problematic, however, because it
sets a bar to recovery in bystander cases that can be both too
high and too low. The bar is often too high because there is
no principled reason to deny recovery for negligently caused
emotional injury simply because the physical contact was
with a third person rather than the plaintiff. See Saechao,
78 Or App at 349-50 (Warren, J., dissenting) (“Under the
impact rule there is no causal, logical, or necessary rela-
tionship between the impact and the injury for which recov-
ery is sought.”). The facts of this case illustrate that point.
Plaintiffs witnessed the traumatic death of their brother,
but under the impact rule were denied recovery because the
truck did not touch them. Yet, their distress at witnessing
the death of their brother is likely unrelated to the coin-
cidental fact that the truck did not hit them also. To deny
recovery because a third person, rather than the plaintiffs,
was physically injured—when even a minor physical impact
is sufficient under that test—seems arbitrary and fails to
protect plaintiffs’ interest in avoiding witnessing the negli-
gently caused death of their brother.

At the same time, the impact rule sets the bar too
low in other circumstances, because a minor injury unre-
lated to the emotional distress satisfies the impact require-
ment and permits the claim to proceed. See id. at 343 (hold-
ing impact test satisfied by bruising). A review of the impact
rule as applied across jurisdictions reveals that the required
physical impact

“often play{s] no part in causing the real harm, and in
[itself has] no importance whatever. ‘Impact’ has meant a
slight blow, a trifling burn or electric shock, a trivial jolt
or jar, a forcible seating on the floor, dust in the eye, or the
inhalation of smoke. The requirement has even been satis-
fied by a fall brought about by a faint after a collision, or
the plaintiffs own wrenching of her shoulder in reaction to
the fright. ‘The magic formula ‘impact’ is pronounced; the
door opens to full recovery?”

Keeton et al, Prosser and Keeton on the Law of Torts § 54,
363-64 (internal citations omitted). In Oregon as well, the
application of the impact rule has led to subtle distinctions.
Compare Simons v. Beard, 188 Or App 370, 376-78, 379, 72
P3d_ 96 (2008) (allowing plaintiff to proceed with claim for

710 Le

emotional distress arising from concern about her unborn
child because the impact test was satisfied by her abnormal
delivery) with Chouinard v. Health Ventures, 179 Or App 507,
514, 39 P3d 951 (2002) (denying plaintiff recovery for emo-
tional distress because the presence of a tumor in her brain,
without evidence that it grew during the relevant period,
was insufficient “physical impact to permit plaintiff's claims
**§ to go to the jury”).

The impact rule bars plaintiffs who have suffered
genuine serious emotional distress from recovering and
fails to treat like cases alike. In our view, those criticisms
are persuasive. Moreover, at least some of the purposes the
impact rule is supposed to serve—such as screening out
fraudulent claims and assisting parties, juries, and courts
by providing a bright-line rule—are fulfilled by various
aspects of the Restatement rule, as discussed below. Other
jurisdictions agree: the Restatement identifies Oregon as
one of only four states that continue to apply the impact
rule. Restatement § 48 Reporters Note comment a. Indeed,
the impact test has been disfavored for decades. See Richard
N. Pearson, Liability to Bystanders for Negligently Inflicted
Emotional Harm—A Comment on the Nature of Arbitrary
Rules, 34 U Fla L Rev 477, 488 n 68 (1982) (identifying four
states following the impact rule in 1982). We therefore reject
the impact rule as the test for a bystander’s recovery of emo-
tional distress resulting from injury to another.

C. The Zone of Danger Test

Plaintiffs suggest that we permit their recovery
under the zone of danger test, which is used by some courts
to allow recovery to a plaintiff who experiences “serious
emotional distress due to witnessing a fatal injury to a third
person only if the plaintiff was personally within the zone of
danger of physical impact from the defendant’s negligence.”
Saechao, 78 Or App at 346. Although the zone of danger
test found some favor, see, e.g., Amaya v. Home Ice, Fuel &
Supply Co., 59 Cal 2d 295, 379 P2d 513 (1963) (adopting
test), California notably abandoned the zone of danger test
in Dillon, 68 Cal 2d at 728. In that case, a child’s sister,
standing close by, and her mother, standing down the block,
observed a negligent driver kill the child. Jd. at 731. The

pe 7

court rejected the zone of danger rule and allowed both wit-
nesses to proceed with their claims for emotional distress.
Id. at 747-48. That court explained that rejecting the zone
of danger test logically follows rejecting the impact test
“because the only reason for the requirement of presence in
that zone lies in the fact that one within it will fear the dan-
ger of impact.” Id. at 733 (emphasis in original). Neither test
actually relates to the likelihood or severity of the emotional
distress that can result from seeing a close family member
suffer serious injury.

In practice, the zone of danger test results in
unfairly denying recovery to plaintiffs who are located out-
side the zone of physical danger, but witness the physical
injury to the third person just the same as if they had been
in that zone, as the facts of Dillon demonstrate. See Saechao,
78 Or App at 348 (“[T]he zone of danger rule *** would not
provide rational differentiations between those who may
and those who may not recover.”). We are persuaded by the
reasoning of the California Supreme Court in Dillon and
decline to adopt the zone of danger test.

D. The Restatement Rule

A number of authorities have attempted to articu-
late a test for bystander recovery that avoids the somewhat
arbitrary aspects of the impact and zone of danger tests,
while limiting the potential for indeterminate and exces-
sive liability for emotional distress claims that we discussed
above. Probably the most thoughtful recent formulation is
found in the Restatement section 48, which builds on Dillon
and similar cases. Under that approach, a defendant “who
negligently causes sudden serious bodily injury to a third
person is subject to liability for serious emotional harm
caused thereby to a person who (a) perceives the event con-
temporaneously, and (b) is a close family member of the per-
son suffering the bodily injury.” Restatement § 48 (“Negligent
Infliction of Emotional Harm Resulting from Bodily Harm
to a Third Person”). In our view, that test hews closely to
the interest that should be legally protected—that is, the
circumstances in which recovery for negligently caused emo-
tional distress is favored by “[a]ll ordinary human feelings,”
Keeton et al, Prosser and Keeton on the Law of Torts § 54,

712 Le

366—while also recognizing necessary limits on potential
liability and providing at least some guidance to courts and
juries. Moreover, the Restatement test is generally consis-
tent with this court’s cases dealing with other aspects of
claims for negligently caused serious emotional distress. We
turn to a closer examination of the rule articulated in the
Restatement.

The bystander recovery rule reflects a common
understanding that the injury of another person creates a
risk, that is reasonably likely to be realized, of causing a
reasonable bystander to suffer serious emotional distress
when certain factors are present. Thing v. La Chusa, 48 Cal
8d 644, 666, 771 P2d 814, 828 (1989) (“[I]n common experi-
ence, it is more likely that [persons closely related by blood or
marriage] will suffer a greater degree of emotional distress
than a disinterested witness to negligently caused pain and
suffering or death.”). In other words, the ability “to discrim-
inate between stimuli that would induce serious psychic
consequences in normally constituted people and those that
would do so only in people already peculiarly vulnerable ***
turn[s] on the severity of the stimulus.” Harper et al, Harper,
James & Gray on Torts § 18.4, 812 (emphasis in original).
The elements of the bystander recovery rule reflect the con-
ditions that are likely to present a risk of serious emotional
distress that is reasonably likely to be realized.®

The first element is that the bystander must wit-
ness a sudden, serious physical injury to a third person negli-
gently caused by the defendant. Restatement § 48. Hammond
presented a situation in which that element was not pres-
ent. There, the plaintiff awoke to find her husband lying on
the floor, apparently the victim of heart attack. 312 Or at
20. The plaintiff sought to recover for her severe emotional
distress, alleging that if the defendant 9-1-1 service had
arrived in the “couple of minutes” that the 9-1-1 operator
predicted, rather than after the 45 minutes that actually

° Compare this approach with the impact rule, which looks only to whether
the bystander suffered physical impact and not to the magnitude or significance
of any injury. The zone of danger rule similarly falls short in identifying the
aspects of a bystander experience that predict whether a reasonable person
would react with serious emotional distress. See Harper et al, Harper, James &
Gray on Torts § 18.4, 812 (so arguing).

TE

elapsed, she would not have suffered emotional distress. Id.
at 21. This court did not allow recovery. Id. at 28. Although
the defendant may have contributed to the death by failing
to respond quickly enough, the defendant did not cause the
actual physical injury—the heart attack.

Second, the plaintiff must have suffered serious
emotional distress. It is a truism that emotional distress
is an unavoidable and essential part of life. The California
Supreme Court explained that concept in the context of
bystander emotional injury:

“The emotional distress for which monetary damages may
be recovered, however, ought not to be that form of acute
emotional distress or the transient emotional reaction to
the occasional gruesome or horrible accident to which every
person may potentially be exposed in an industrial and
sometimes violent society. *** The overwhelming majority
of ‘emotional distress’ which we endure, therefore, is not
compensable.”

Thing, 48 Cal 3d at 666-67. For that reason, our cases allow
compensation for only serious emotional distress. See Hall,
292 Or at 135 (noting that compensable emotional distress
is not the “kind of temporary annoyance or injured feelings
that can result from friction and rudeness among people in
day-to-day life”). A bystander who experiences emotional
harm that does not rise to the level of serious emotional dis-
tress, therefore, cannot recover for that harm.

Third, in order to recover, the plaintiff must have
perceived the events that caused injury to the third person
as they occurred. Restatement § 48(a). This contemporane-
ous perception is at the core of the bystander’s action for
damages. Observation of the scene of an accident after it
has happened, or perceiving a recently injured person, does
not meet this requirement. See id. at comment e (“It is not
enough that the person later learned about the events, later
viewed a recording of them, or later observed the resulting
bodily injuries.”). This bright line rule is justified in part
by the fact that the distressing life experience of learning
about the death or injury of a loved one is unavoidable. Its
inevitability means that “in a general way one is prepared”
for it. Ochoa v. Superior Court, 39 Cal 3d 159, 165 n 6, 703
P2d 1, 5 n 6 (1985). In comparison, the visceral experience

714 LP

of witnessing the sudden death or injury of a loved one by
a negligent driver, as here, is not a certain part of life and
therefore presents a stronger basis for allowing recovery
against the tortfeasor.

The final element of the claim is that the physically
injured person be a close family member of the plaintiff.
Restatement § 48(b). Witnessing the injury of a stranger or
acquaintance, while likely distressing, is not sufficient to
recover. As we recognized three decades ago, however, for-
mal legal relationships only imprecisely capture the real-
ity of emotional connections in our society. Norwest, 293 Or
at 561 (recognizing the “difficulties” with linking recovery
to formal relationships “in a society whose practices and
common assumptions about *** relationships are rapidly
changing”); see also Leong v. Takasaki, 55 Haw 398, 410,
520 P2d 758, 766 (1974) (“Neither should the absence of a
blood relationship between victim and plaintiff-witness
foreclose recovery.”). The fraternal relationship of plaintiffs
here to the person killed meets that requirement, but other
cases may present closer questions as to the meaning of
“close family member.” See Restatement § 48 comment f (“[A]
grandparent who lives in the household may have a differ-
ent status from a cousin who does not.”).

We recognize that the bystander recovery rule out-
lined in the Restatement may give rise to the possibility of
false or inflated claims and that aspects of the rule may
seem arbitrary. For as long as courts have awarded dam-
ages for emotional injuries, there have been concerns about
plaintiffs bringing false claims. See Fehely v. Senders, 170
Or 457, 471, 185 P2d 288 (1943) (“[T]he danger that unscru-
pulous persons may impose on juries with fictitious claims
*** is a practical argument to which courts rightly give
attention[.]”). Juries are charged with discerning truth from
self-serving fiction when plaintiffs testify about their own
injuries and are as competent to do this in claims for emo-
tional injuries as they are in other cases. Eisele v. Rood, 275
Or 461, 467, 551 P2d 441 (1976) (“In cases in which plain-
tiffs evidence of injury is merely subjective in nature, the
jury may choose to disbelieve plaintiff's testimony ***.”).
Laws also may be structured to deter false claims by sympa-
thetic plaintiffs whose charisma may evoke inconsistent and

unpredictable jury verdicts. See Libbee v. Permanente Clinic,
268 Or 258, 264; 518 P2d 636, reh’g den, 268 Or 273, 520
P2d 361 (1974) (“[I]f the common law has vitality it should
be elastic enough to provide safeguards against fraudulent
and speculative claims and to adapt itself to the facts of life
in our modern society.” (Citation omitted.)). The Restatement
rule performs this function by including elements that, on
the basis of human experience, are objective indicators of
possibly serious emotional injury. See Thing, 48 Cal 3d at
666 (stating that “in common experience, it is more likely”
that greater emotional distress will result when plaintiff
observes contemporaneous injury to a closely related per-
son). When the elements of the test are met, a plaintiff's
claims of subjective emotional distress are more likely to be
genuine.’

The Restatement rule may have the effect of per-
mitting some claims that would be rejected under other
tests, and vice-versa. In this area of the law in particular,
some arbitrariness cannot be avoided. See Saechao, 78 Or
App at 348 (Warren, J., dissenting) (“The fact that a deci-
sion is arbitrary in some respects does not mean that it can-
not be principled.”); Thing, 48 Cal 3d at 666 (“[A]rbitrary
lines *** limit the class of potential plaintiffs if emotional
injury absent physical harm is to continue to be a recover-
able item of damages in a negligence action.”); Restatement
§ 48 comment e (“There is an unavoidable arbitrariness to
the line-drawing in this area.”). But although the rule may
be arbitrary in some circumstances, it “serve[s] a function
and [is] neither random nor irrational.” Id. at comment g.
The undesirable arbitrary aspect of rules must be balanced

1 Similarly, the bystander recovery rule also works to screen out claims by
plaintiffs who react with serious emotional distress to common upsetting events
of life that would not provoke that response in a reasonable person. See Fehely v.
Senders, 170 Or 457, 475, 185 P2d 283 (1948) (“We adopt as a general rule which
should govern in cases of this sort the following ***: ‘The extent and duration
of emotional distress produced by the tortious conduct depend upon the sensi-
tiveness of the injured person. The court, however, will not permit consideration
of disturbances which, conceding full weight to individuality, are wholly abnor-
mal and unreasonable.” (Quoting Restatement (First) of Torts § 905 comment i
(1939).)). The factual conditions required for a plaintiff to recover provide an
objective basis to believe that the serious emotional distress that the plaintiff
alleges is genuine and a reaction that would be shared by a reasonable person in
the same situation.

716 Lt

against the need to provide ex ante understanding of lia-
bility and assistance in the orderly administration of jus-
tice. See Thing, 48 Cal 3d at 664 (“We also weigh in the
balance the importance to the administration of justice of
clear guidelines under which litigants and trial courts may
resolve disputes.”).°

TI. APPLICATION

We return to the facts of this case. Plaintiffs are
two brothers who watched their third brother die as a result
of being hit by defendant’s negligently driven pickup truck.
They allege emotional injuries, including depression and
severe emotional distress. Examined in the light of the
Restatement test set forth above, plaintiffs here state a neg-
ligence claim for recovery of emotional distress damage.
The complaint alleges that plaintiffs’ brother was killed as
a result of defendant’s negligence, that they saw the colli-
sion and watched their brother die, and that, as a result,
they have suffered severe emotional distress. Based on
those facts, plaintiffs’ complaint states a claim for relief for
bystander recovery under the Restatement test.

The decision of the Court of Appeals is reversed.
The judgment of the circuit court is reversed, and the case
is remanded to the circuit court for further proceedings.

® The Restatement notes that 29 states apply some version of section 48.
Restatement § 48 Reporters Note comment a.

T17

Argued and submitted September 23, decision of Court of Appeals reversed,
judgment of circuit court reversed, and case remanded to that court for further
proceedings December 22, 2016

KARLYN EKLOF,
Petitioner on Review,
ve
Heidi STEWARD,
Superintendent,
Coffee Creek Correctional Facility,
Respondent on Review.
(CC C120242CV; CA A154212; SC S063870)

385 P3d 1074

Jason Weber, O’Connor Weber LLC, Portland, argued the
cause and filed the brief for petitioner on review.

Timothy A. Sylwester, Assistant Attorney General, Salem,
argued the cause and filed the brief for respondent on
review. Also on the brief were Ellen F. Rosenblum, Attorney
General, and Benjamin Gutman, Solicitor General.

718 Ld

Janis C. Puracal, Oregon Innocence Project, Portland,
Mathew W. dos Santos, American Civil Liberties Union
Foundation of Oregon, Portland, and Rankin Johnson IV,
Oregon Criminal Defense Lawyers Association, Portland,
filed the brief for those amici curiae. Also on the brief were
Steven T. Wax, Alice B. Kaplan, and Erik Blumenthal.

BREWER, J.

The decision of the Court of Appeals is reversed. The
judgment of the circuit court is reversed, and the case is
remanded to that court for further proceedings.

po
BREWER, J.

Under Brady v. Maryland, 373 US 83, 87, 83 S Ct
1194, 10 L Ed 2d 215 (1963), a prosecutor’s withholding of
favorable evidence from a criminal defendant “violates due
process where the evidence is material either to guilt or to
punishment, irrespective of the good faith or bad faith of the
prosecution.” Petitioner in this successive action for post-
conviction relief—who is serving a sentence of life impris-
onment without the possibility of parole for aggravated
murder—seeks review of a Court of Appeals decision that
upheld summary judgment for the state on the ground that
petitioner’s Brady violation claim was barred as a matter
of law under ORS 138.510(3) and ORS 138.550(3).! Eklof
v. Steward, 273 Or App 789, 359 P3d 570 (2015). Petitioner
asserts that she is entitled to pursue her Brady violation
claim despite the bars against untimely and successive peti-
tions set out in those statutes, and that the trial court erred
in concluding that her petition was barred as a matter of
law.? As explained below, we conclude that the trial court
erred in granting the state’s motion for summary judgment
on petitioner’s Brady violation claim. Accordingly, we reverse
and remand.

+ ORS 138.510(3) provides, in part:

“A petition pursuant to ORS 138.510 to 138.680 must be filed within two
years of the following, unless the court on hearing a subsequent petition finds
grounds for relief asserted which could not reasonably have been raised in
the original or amended petition:

“(a) If no appeal is taken, the date the judgment or order on the convie-
tion was entered in the register.

“(b) If an appeal is taken, the date the appeal is final in the Oregon
appellate courts.”

ORS 138.550(8) provides:

“All grounds for relief claimed by petitioner in a petition pursuant to ORS
138.510 to 138,680 must be asserted in the original or amended petition, and
any grounds not so asserted are deemed waived unless the court on hearing a
subsequent petition finds grounds for relief asserted therein which could not
reasonably have been raised in the original or amended petition. However,
any prior petition or amended petition which was withdrawn prior to the
entry of judgment by leave of the court, as provided in ORS 188.610, shall
have no effect on petitioner's right to bring a subsequent petition”

2 Petitioner also argues that the trial court erred in granting summary judg-
ment as to an inadequate assistance of counsel claim concerning a jury instruc-
tion; we reject that argument without discussion.

PT
720 Ld
I. FACTS AND PROCEDURAL HISTORY

Petitioner was convicted of aggravated murder
in 1995, based on the theory that she and an accomplice,
Jeffrey Tiner, murdered James Salmu. See generally State
v, Tiner, 340 Or 551, 185 P3d 305 (2006), cert den, 549 US
1169 (2007) (describing evidence underlying Tiner’s aggra-
vated murder conviction). The Court of Appeals affirmed
petitioner’s conviction without opinion. State v. Eklof, 154 Or
App 448, 960 P2d 397 (1998), rev den, 328 Or 331 (1999). In
1999, shortly after her conviction became final, petitioner
filed her first action for post-conviction relief; her petition
in that case, which did not assert a Brady violation claim,
ultimately was dismissed.

In 2012, petitioner again sought post-conviction
relief in the present action. In her second amended petition,
which is at issue here, petitioner alleged, in pertinent part:

“John Distabile and David Tiner were key witnesses
against Petitioner in case no. 109404750 (Lane County) [in
which petitioner was convicted of aggravated murder].

fe eae ae

“On March 1, 201[2], attorney Andy Simrin (Attorney
for Petitioner’s co-defendant Jeffrey Tiner) mailed to coun-
sel for this Petitioner a computer ‘thumb drive’ contain-
ing copies of four exhibits from the post-conviction case of
Jeffrey Tiner, who had also been convicted of murdering
James Salmu. Those exhibits included the prosecution file
for the case against this Petitioner, the prosecution file
for the case against Jeffrey Tiner, California Department
of Justice records relating to David Tiner’s criminal his-
tory (David Tiner is the brother of co-defendant Jeffrey
Tiner) and NCIC records relating to David Tiner’s criminal
history.

“Among the materials in the prosecution file for the
case against Jeffrey Tiner was a set of police reports that
would have been valuable in impeaching John Distabile if
they had been disclosed to Petitioner’s attorneys in case no.
109404750 (Lane County).

“The Distabile impeachment materials described in the
preceding paragraph were never disclosed to any attorney

Po 721

working on behalf of Petitioner until Mr. Simrin caused
them to be delivered to Petitioner’s attorney in this post-
conviction proceeding.

“David Tiner’s criminal history was never disclosed
to any attorney working on behalf of Petitioner until
Mr. Simrin caused them to be delivered to Petitioner’s
attorney in this post-conviction proceeding.

“David Tiner’s criminal history would have had
impeachment value if it had been disclosed to Petitioner’s
attorneys in case no. 109404750.”

Based on those allegations, petitioner claimed that
there had been a substantial denial of her due process rights
under the Fourteenth Amendment to the United States
Constitution. Petitioner further alleged that she previously
had sought post-conviction relief in the 1999 action, that
relief had been denied in that action, and that the Brady
violation claim in this action could not reasonably have been
raised in the 1999 action.

In support of her Brady violation claim in this
case, petitioner submitted the trial transcript and other
materials related to her underlying criminal case, as well
as police reports concerning John Distabile and records of
David Tiner’s criminal history that, she asserted, had been
withheld by the prosecution in her criminal case. The police
reports indicated that, when Distabile initially was inter-
viewed about the murder, he gave a somewhat different
account from his testimony at petitioner’s criminal trial;
thus, the earlier account could have been offered to impeach
Distabile’s trial testimony. In addition, the materials related
to David Tiner’s criminal history could have been offered at
petitioner’s criminal trial to impeach Tiner’s testimony. See
generally Strickler v. Greene, 527 US 263, 281-82, 119 S Ct
1936, 144 L Ed 2d 286 (1999) (holding that Brady applies
not only to exculpatory information withheld from defen-
dant, but also to favorable impeachment information).

The state filed an answer to the petition in which
it alleged as “affirmative defenses” that this action was
barred under the two-year limitations period prescribed by
ORS 188.510(3)(b), and was barred as a successive petition

122 Ld

by ORS 138.550(3).? The state then sought summary judg-
ment, asserting, as pertinent here, that petitioner’s Brady
violation claim was barred: (1) under ORS 138.510(3)(b), on
the ground that she reasonably could have raised that claim
within two years after the criminal judgment was final; and
(2) under ORS 138.550(3), on the ground that she could have

raised the claim in her original post-conviction action. The
state explained that there were no genuine issues of mate-
rial fact and that it was entitled to judgment as a matter of
law, because

“petitioner has not alleged any ultimate facts demonstrat-
ing that she was reasonably unable, when she first sought
post-conviction relief, to discover that impeachment mate-
rial was allegedly withheld by a prosecutor or not made
available to petitioner’s underlying defense counsel in
1995.”

In her response to the motion, petitioner reiter-
ated that the state had withheld materials from her crim-
inal trial counsel that would have been useful in impeach-
ing Distabile and David Tiner. Petitioner pointed out that
she and Jeffrey Tiner had been tried separately and that
different prosecutors had handled their respective cases.*
Petitioner submitted evidence that her criminal trial coun-
sel had not been provided with the Brady materials, and that
information about David Tiner’s criminal history would not
have been reasonably available to her post-conviction coun-
sel from other sources in the 1999 action. Petitioner there-
fore asserted that she could not reasonably have obtained

® Although the state labeled those defenses as affirmative defenses, and, gen-
erally speaking, statute of limitations defenses are affirmative defenses on which
a defendant bears the burden of persuasion, see TR. v. Boy Scouts of America,
344 Or 282, 299, 181 P3d 758 (2008) (so noting), the parties and the trial court
properly treated the question of whether petitioner's claim was barred under
either of those statutes as a matter on which she would ultimately bear that
burden. See generally Verduzco v. State of Oregon, 357 Or 553, 565, 355 P3d 902
(2015) (ORS 138.550 “places the burden on the petitioner to show that an omitted
ground for relief comes within the escape clause”).

* Petitioner has asked this court to take judicial notice of the case registers in
her underlying criminal case, as well as in Jeffrey Tiner’s case, and the state has
not objected. See OBC 201(b)(2) (court may take judicial notice of sources whose
accuracy cannot reasonably be questioned). We therefore take judicial notice of
the fact that petitioner and Jeffrey Tiner were tried separately, and indeed, that
Jeffrey Tiner was not tried until 2000, after petitioner's conviction became final.

Po 728

the Brady materials before Jeffrey Tiner’s counsel informed
her of their existence in 2012.

In a reply memorandum, the state again urged that

“petitioner has not pleaded any ultimate facts showing why
she was supposedly unable, until 2012, to discover what
was in the prosecutor’s Tiner file. Even more importantly,
petitioner has not submitted any evidence proving that she
was unable, until 2012, to discover what was in the prose-
cutor’s file.”

The state asserted that petitioner had had “ample oppor-
tunity” to seek the Tiner file, and that it was “self-evident”
that it would have been possible for petitioner’s first post-
conviction counsel to have subpoenaed the prosecutor's
Tiner file and reviewed it for information that might have
been helpful to petitioner’s first post-conviction action. The
state argued that petitioner had not shown that her counsel
in the first post-conviction action could not have discovered
the materials and asserted a timely Brady claim.

The trial court granted the state’s motion for sum-
mary judgment without elaboration and entered a general
judgment for the state, in which it concluded that there were
no genuine issues of material fact and that the state was
entitled to judgment as a matter of law.

On appeal, petitioner argued that the trial court
had erred in granting the state’s motion for summary judg-
ment, asserting that the Brady materials at issue were not
reasonably available to petitioner until they were provided
to her in 2012. In response, the state pointed out that, in its
answer to the petition, it had not admitted that the Brady
materials had not been provided to petitioner prior to 2012.
However, the state further stated that it had assumed, for
purposes of summary judgment, that “those records were
not properly disclosed to her and that she suffered prejudice,
as she had alleged.”

As it had before the trial court, the state urged
that, under the identically-worded escape clauses in ORS
138.510(3)(b) (setting limitation period as two years after
criminal judgment becomes final) and ORS 138.550(3) (bar-
ring claims that were not asserted in the original or amended

724 Ld

petition for post-conviction relief), petitioner had not shown
that her claim could not reasonably have been raised in her
first post-conviction action. The state noted, in particular,
that petitioner had not presented evidence that the District
Attorney’s office had actively concealed the file, and the
state opined that, if counsel had used “reasonable diligence,”
the Brady materials could have been discovered. Again, con-
sistently with its argument before the trial court, the state
asserted that the escape clauses under ORS 138.510(3)(b)
and ORS 138.550(3) were not available “where the informa-
tion always existed and was readily available to [petitioner]
but her counsel just did not think to inquire about it.”

The Court of Appeals affirmed the grant of sum-
mary judgment on petitioner’s Brady claim, but on a differ-
ent ground than the state had asserted in its motion before
the trial court. The Court of Appeals observed that, under
Verduzco, petitioner bore the burden of proving that her
claim fell within a statutory escape clause. See 360 Or at
722 n 8, above. It therefore opined:

“Consequently, to withstand the state’s motion for sum-
mary judgment petitioner had the burden of coming for-
ward with admissible evidence that would permit a reason-
able factfinder to find that the escape clause applied to the
Brady claim. ***

“Petitioner did not meet that burden here. The sum-
mary judgment record contains a significant evidentiary
gap: Petitioner submitted no evidence regarding what was
known to petitioner and her post-conviction lawyer at the
time of the 1999 post-conviction proceeding.’ Petitioner
did not submit an affidavit from her 1999 post-conviction
lawyer, or any other evidence about what facts that law-
yer knew during the 1999 post-conviction case. Petitioner
also did not submit her own affidavit, or any other evi-
dence about what she herself knew during the 1999 post-
conviction proceeding. ***

“ We note that the petition adequately pleaded that the
Brady ground for relief falls within the escape clause; it
alleged that the facts underlying petitioner’s claim were not
disclosed to any lawyer representing petitioner until 2012.
However, once the state tested those pleadings by moving

Pp 725

for summary judgment, petitioner was required to come
forward with evidence that would permit a reasonable fact-
finder to find that petitioner had proved those allegations.”

273 Or App at 794, 794 n 5.

The Court of Appeals did not address the parties’
arguments before the trial court and on appeal concerning
whether the Brady claim reasonably could have been raised
in the original petition. The court explained:

“In the light of our conclusion that the summary judg-
ment record would not permit a reasonable factfinder to
find that petitioner and her post-conviction lawyer did not
know the facts on which her Brady claim depends, we do not
address the parties’ competing arguments as to whether
and what extent a post-conviction petitioner who does not
discover the facts underlying a Brady claim until after a
first post-conviction proceeding must demonstrate that she
affirmatively investigated whether the prosecution might
have violated its Brady obligations in order to demonstrate
that the Brady claim could not reasonably have been raised
in the original petition, or their competing arguments as to
whether due process would permit a state to impose that
type of investigatory obligation on a petitioner.”

Id. at 795 n 7. Petitioner sought review in this court, which
we allowed.

Il. POST-CONVICTION RELIEF
AND BRADY CLAIMS

Under the Post-Conviction Hearing Act, a peti-
tioner who has been convicted of a crime may obtain collat-
eral relief if the petitioner establishes “[a] substantial denial
in the proceedings resulting in petitioner’s conviction ***
under the Constitution of the United States, or under the
Constitution of the State of Oregon, or both, and which denial
rendered the conviction void.” ORS 138.530(1)(a). However,
“fwlhen a criminal defendant fails to raise an issue at trial
that the defendant reasonably could have been expected to
raise, the defendant cannot obtain post-conviction relief on
that ground unless the defendant alleges and proves that
the failure to raise the issue was due to one (or more) of a
few narrowly drawn exceptions.” Palmer v. State of Oregon,
318 Or 352, 358, 867 P2d 1368 (1994). One such exception

726 Ld

is triggered where a claim was not raised in the petitioner’s
underlying criminal prosecution due to inadequate assis-
tance of counsel. Jd. Other exceptions include “where the
right subsequently sought to be asserted was not generally
recognized to be in existence at the time of trial,” and “where
counsel was excusably unaware of facts that would have dis-
closed a basis for the assertion of the right.” Id. at 357 (quot-
ing North v. Cupp, 254 Or 451, 456-57, 461 P2d 271 (1969)).

‘The gravamen of a Brady violation claim that is first
raised in a post-conviction action is a species of the third
category mentioned above: that trial counsel was excusably
unaware of evidence favorable to the defense because the
state had breached its obligation to disclose such evidence
to the defense. See, e.g., State v. McDonnell, 313 Or 478, 500,
837 P2d 941 (1992) (“if the state has knowledge of evidence
favorable to the defense or exculpatory in nature, the state
is under an affirmative due process obligation to make it
available to the defense”). When Brady materials are not
discovered until more than two years after a criminal defen-
dant’s conviction has become final, or until after the criminal
defendant has already litigated an action for post-conviction
relief, then ORS 138.510(3) and ORS 138.550(3) come into
play.

As noted, ORS 138.510(3) provides:

“A petition pursuant to ORS 138.510 to 138.680 must
be filed within two years of the following, unless the court
on hearing a subsequent petition finds grounds for relief
asserted which could not reasonably have been raised in the
original or amended petition:

“(a) If no appeal is taken, the date the judgment or
order on the conviction was entered in the register.

“(b)_ If an appeal is taken, the date the appeal is final
in the Oregon appellate courts.

“c) If a petition for certiorari to the United States
Supreme Court is filed, the later of:

“(A) The date of denial of certiorari, if the petition is
denied; or

“(B) The date of entry of a final state court judgment
following remand from the United States Supreme Court.”

Po 727

(Emphasis added.) And, as further noted, ORS 138.550(3)
provides:

“All grounds for relief claimed by petitioner in a peti-
tion pursuant to ORS 138.510 to 138.680 must be asserted
in the original or amended petition, and any grounds not
so asserted are deemed waived unless the court on hear-
ing a subsequent petition finds grounds for relief asserted
therein which could not reasonably have been raised in the
original or amended petition. However, any prior petition
or amended petition which was withdrawn prior to the
entry of judgment by leave of the court, as provided in ORS
138.610, shall have no effect on petitioner’s right to bring a
subsequent petition.”

(Emphasis added.)

This court has held that a petitioner who files a late
or successive petition for post-conviction relief that is sub-
ject to ORS 138.510(3) or ORS 138.550(3),° must allege and
ultimately demonstrate that the grounds for relief asserted
in the petition could not reasonably have been raised in a
timely initial action. See Verduzco v. State of Oregon, 857
Or 553, 561, 355 P3d 902 (2015) (“if petitioner could not
reasonably have raised the grounds for relief alleged in his
second petition either in a timely fashion or in the first peti-
tion, then those state procedural bars do not prevent peti-
tioner from pursuing the grounds for relief alleged in his
second post-conviction petition”). Moreover, this court has
interpreted ORS 138.550(8) as “placling] the burden on the
petitioner to show that an omitted ground for relief comes
within the escape clause.” Id. at 565 (citing Cain v. Gladden,
247 Or 462, 464, 430 P2d 1015 (1967)). Cain, in turn, upheld
the dismissal of a petition for post-conviction relief on the
ground that the petitioner had “failed to allege in his peti-
tion facts to demonstrate that the *** grounds for relief
could not reasonably have been asserted in the direct appel-
late review.” 247 Or at 464 (emphasis added).6

5 As a practical matter, successive post-conviction actions often are barred
both under ORS 138.510(8) and ORS 138.550(3).

° Our interpretation of the escape clause in ORS 138.550 drew from the same
line of cases that this court relied on in Palmer.

728 LC

To summarize the governing principles: If a post-
conviction petitioner alleges that, during the course of her
criminal prosecution, the state had knowledge of evidence
favorable to the defense or exculpatory in nature, but failed
to disclose that evidence in violation of the Brady rule, the
petitioner must plead, and ultimately prove, that her crim-
inal trial counsel “‘was excusably unaware of facts that
would have disclosed a basis for the assertion of the right’”
on direct appeal. Palmer, 318 Or at 357 (quoting North 254
Or at 456-57). Stated differently, a Brady violation claim,
like most other post-conviction claims, must have been
raised in the direct criminal proceeding unless counsel was
excusably unaware of it. See, e.g., State v. Longo, 341 Or 580,
599-600, 148 P3d 892 (2006), cert den, 552 US 835 (2007)
(analyzing Brady claim in context of direct criminal appeal).
That is so regardless of whether a post-conviction action is
timely, untimely under ORS 138.510(3), or successive under
ORS 188.550(3). If a post-conviction petition is untimely or
successive, however, the petitioner must further plead and
prove not only that her criminal trial counsel was excusably
unaware of the basis for the Brady claim, but also that the
claim could not reasonably have been raised either within
the two-year period set out in ORS 138.510 or in the original
action for post-conviction relief.

With that framework in mind, we turn to the ques-
tion whether the state was entitled to summary judgment
on petitioner’s Brady violation claim in this case. Initially,
we note that the parties have focused in part on whether
petitioner’s first post-conviction counsel reasonably could
have discovered David Tiner’s prior convictions by searching
for records in other jurisdictions. That focus is misplaced.
As discussed, the gravamen of a Brady claim is that excul-
patory evidence was withheld by the prosecution. The fact
that exculpatory evidence comes to light after a conviction
becomes final does not, in and of itself, give rise to any post-
conviction claim, much less a Brady claim. It might form
the basis for a Brady claim if the evidence was known to
the prosecution; it also might form the basis for a claim of
inadequate assistance of trial counsel if counsel reason-
ably should have discovered it. But the question here is not
whether counsel reasonably should have discovered David

Po 729

Tiner’s prior convictions as of 1999, but whether counsel
reasonably should have discovered that the prosecutor had
withheld information pertaining to those convictions as well
as the police reports concerning Distabile.

With that preface in mind, we turn to the parties’
primary dispute, which concerns whether the trial court
and the Court of Appeals properly applied the summary
judgment standards in ORCP 47 C.

Ill. SUMMARY JUDGMENT STANDARDS
ORCP 47 C provides:

“The court shall grant the motion if the pleadings, depo-
sitions, affidavits, declarations and admissions on file show
that there is no genuine issue as to any material fact and
that the moving party is entitled to prevail as a matter of
law. No genuine issue as to a material fact exists if, based
upon the record before the court viewed in a manner most
favorable to the adverse party, no objectively reasonable
juror could return a verdict for the adverse party on the
matter that is the subject of the motion for summary judg-
ment. The adverse party has the burden of producing evi-
dence on any issue raised in the motion as to which the
adverse party would have the burden of persuasion at trial.
The adverse party may satisfy the burden of producing evi-
dence with an affidavit or a declaration under section E of
this rule.”

When a party seeks summary judgment, a court must view
the pleadings, as well as any “depositions, affidavits, dec-
larations and admissions” that the parties have submitted
in support of or in opposition to the summary judgment
motion, in the light most favorable to the nonmoving party.
ORCP 47 C.

In Two Two v. Fujitec America, Inc., 355 Or 319,
324, 325 P38d 707 (2014), this court observed that, under
ORCP 47 C, “the party opposing summary judgment has
the burden of producing evidence on any issue ‘raised in the
motion as to which [that party] would have the burden of
persuasion at trial.” (Emphasis added.) Because it plays a
prominent role in our analysis, we describe the facts and
holding in that case in some detail.

730 Ld

In Two Two, the plaintiffs had asserted negligence
and strict liability claims concerning a faulty elevator, and
the defendant sought summary judgment on both claims.
Id. at 321. At issue was whether the trial court, and sub-
sequently the Court of Appeals, had correctly disposed of
the negligence claim on the ground that an expert affidavit
submitted in opposition to the summary judgment motion
(although addressing whether the defendant had been neg-
ligent in the manner alleged) had failed to demonstrate that
there was a genuine issue of material fact as to causation.
Id. at 323-24. This court noted that, in its motion, the defen-
dant had raised issues of fact concerning whether it had
properly modernized, inspected, and maintained the eleva-
tor, whether it was in control of the elevator at the time of the
incident giving rise to the claim, and whether the doctrine
of res ipsa loquitur was applicable. Id. at 324. The defendant
did not, however, “raise in the motion” the issue whether its
alleged negligence had been the cause of the plaintiffs’ inju-
ries. Id. at 325. Rather, it “first raised the issue of causation.
as a basis for summary judgment in its reply memorandum.”
Id.

In reversing judgment for the defendant, this court
stated:

“Parties seeking summary judgment must raise by motion
the issues on which they contend they are entitled to pre-
vail as a matter of law. Parties opposing summary judg-
ment have the burden of producing evidence that creates a
material issue of fact as to those issues, but only as to those
issues.”

Id. at 326 (emphasis added).

As explained below, in light of the foregoing author-
ities, we conclude that both the trial court and the Court
of Appeals erred in applying the summary judgment stan-
dards in this case, albeit in different ways. We first examine
the trial court’s rationale for granting summary judgment
in favor of the state.

A. The Trial Court’s Summary Judgment Ruling

The issue that was raised in the state’s summary
judgment motion and decided by the trial court is whether

pT 731

petitioner sufficiently “alleged” that she could not reason-
ably have raised her Brady claim during her first post-
conviction action. We reiterate that point with emphasis:
The state’s summary judgment motion only challenged the
sufficiency of petitioner’s pleadings as to whether her claim
fell within the escape clauses of ORS 138.510(3)(b) and ORS
188.550(3). In its motion, the state did not challenge peti-
tioner’s ability to prove what she had pleaded; instead, it
merely challenged the sufficiency of petitioner’s pleading.
It is true that, in its reply to petitioner’s response to the
motion, the state asserted that “it would have been possible
for petitioner's first post-conviction counsel to have subpoe-
naed the prosecutor’s Tiner file and reviewed it,” and argued
that “petitioner has not submitted any evidence that she
was unable, until 2012, to discover what was in the prosecu-
tor’s file.” However, that issue was not “raised in the motion”
for summary judgment. See Two Two, 355 Or at 325 (issue
raised in movant’s reply memorandum was not “raised in
the motion” for summary judgment). Thus, the only issue
properly before the trial court on summary judgment was
whether petitioner had sufficiently pleaded that her Brady
claim fell within a statutory escape clause.

The allegations that petitioner pleaded in support
of her Brady violation claim were straightforward, and can
be summarized as follows: (1) The District Attorney’s office
had knowledge or possession of evidence that petitioner
could have used in her criminal trial to impeach two of the
state’s witnesses against her; (2) the District Attorney’s
office failed to provide that evidence to petitioner’s crimi-
nal trial counsel in violation of her due process rights;
(3) petitioner’s counsel were unaware of the evidence until it
was disclosed to petitioner’s counsel in 2012 by an attorney
who represented a different petitioner, in a different, albeit
factually related, post-conviction action; and (4) petitioner
could not reasonably have raised her Brady violation claim.
in her first post-conviction action.

As described above, the state’s summary judg-
ment motion rested on two premises: (1) the factual asser-
tion that “it would have been possible for petitioner’s first
post-conviction counsel to have subpoenaed the prosecutor’s

732 Ld

Jeffrey Tiner file and reviewed it for information that might
have been helpful to petitioner's first post-conviction pro-
ceeding”; and (2) the legal proposition that the failure of peti-
tioner’s first post-conviction counsel to request and examine
the Jeffrey Tiner file precluded petitioner from asserting in
a subsequent action that the Brady claim “could not reason-
ably have been raised in the original or amended petition.”

Even though its summary judgment motion was
based solely on the ground that petitioner’s pleadings were
insufficient to bring her Brady violation claim within the
escape clauses of ORS 138.510(3)(b) and ORS 138.550(3),
the state’s first premise rested on the factual assertion that,
if petitioner’s counsel had sought to examine the District
Attorney’s file in the Jeffrey Tiner case in her first post-
conviction action, counsel would have been able to do so
and would have discovered the Brady materials that had
been withheld from petitioner during her criminal case. But
there is no basis in the record for that assertion. Although
it is possible, as a factual matter, that the Brady materials
were located in the Jeffrey Tiner file in 1999 and that, upon
request, the District Attorney's office would have disclosed
them to petitioner’s post-conviction counsel, the state did not
raise those issues as factual matters for resolution on sum-
mary judgment. Rather, the state’s motion (which focused
exclusively on petitioner’s allegations) called for the court to
presume that in 1999, the Brady materials were in the same
location where there were later discovered in 2012, and that
the District Attorney’s office that had failed to disclose them
in 1995 would have disclosed them in 1999 if petitioner’s
counsel specifically had sought to review materials from
the Jeffrey Tiner file. Given the limited basis of the state’s
challenge, it was inappropriate for the court to make that
presumption.

That leads us to the second point. The state’s remain-
ing premise—that, as a matter of law, the failure of peti-
tioner’s first post-conviction counsel to seek access to the
Jeffrey Tiner file precluded petitioner from asserting in this
action that the Brady claim could not reasonably have been.
raised in the first action—also did not provide an appropri-
ate ground for summary judgment on the record before us.

In some post-conviction cases, where the question is
whether a claim reasonably could have been raised in a prior
action, the issue will be a legal one, capable of resolution on
summary judgment. For example, a common issue in succes-
sive post-conviction actions is whether counsel in an earlier
post-conviction action reasonably could have been expected
to raise a claim that later appellate case law demonstrated
would have been viable. See, e.g., Verduzco, 357 Or at 571
(addressing whether ineffective assistance of counsel claim
could have been raised in earlier post-conviction proceed-
ing, based on counsel's alleged failure to provide sufficient
information about immigration consequences of guilty plea).”
Whether such a claim “reasonably could have been raised
earlier will vary with the facts and circumstances of each
claim.” Id. But, because such a question generally will
involve an assessment of the state of the law at a given point
in time, it may lend itself to resolution by summary judg-
ment because there may well be “no genuine issue as to any
material fact and *** the moving party is entitled to prevail
as a matter of law.” ORCP 47 C.

The same is not necessarily true of a Brady viola-
tion claim. As discussed, the gravamen of such a claim is
that the state had an obligation to disclose, but did not dis-
close, evidence that was material either to guilt or to pun-
ishment in a petitioner’s criminal case. Whether a petitioner
reasonably could have been expected to raise a Brady viola-
tion claim in a timely initial post-conviction action often will
depend on who knew what, and when. That is, the resolution
of such an issue can depend on “the facts and circumstances
of each claim.” Verduzco, 357 Or at 571. But, where, as here,
petitioner alleged that no counsel who represented her knew

7 On that issue, this court held:

“The touchstone is not whether a particular question is settled, but
whether it reasonably is to be anticipated so that it can be raised and settled
accordingly. The more settled and familiar a constitutional or other principle
on which a claim is based, the more likely the claim reasonably should have
been anticipated and raised. Conversely, if the constitutional principle is a
new one, or if its extension to a particular statute, circumstance, or setting is
novel, unprecedented, or surprising, then the more likely the conclusion that
the claim reasonably could not have been raised.”

Id. at 871 (quoting Long v. Armenakis, 166 Or App 94, 101, 999 P2d 461, rev den,
330 Or 361 (2000)).

734 Ld

of the Brady materials until 2012, and nothing in the record
indicates that she or her counsel had information that might
have revealed the existence of the materials before then,
the trial court had no basis on which to decide, as a matter
of law, that counsel reasonably should have known of the
claim.

In this case, there is much that is not known (and
that cannot be presumed as a matter of law) about the
nature of the alleged Brady violation that could be perti-
nent to the issue whether petitioner’s first post-conviction
counsel reasonably should have discovered the basis for the
claim. Among those factual questions are: Where were the
allegedly exculpatory materials located when petitioner's
first post-conviction case was pending? Were those materi-
als made available to Jeffrey Tiner’s criminal defense team
in 1999, or were they made public in the course of Jeffrey
Tiner’s trial in 2000? Did petitioner’s first post-conviction
counsel have any information that would have revealed
that the state had the evidence at issue during petitioner’s
criminal prosecution? The answers to those questions—and
others—could have a bearing on whether petitioner’s Brady
violation claim could “reasonably have been raised in the
original or amended petition.” However, again, the state’s
motion did not put those factual matters at issue, and the
trial court therefore had no basis to conclude as a matter
of law that petitioner’s counsel in the first post-conviction
action reasonably could have asserted a Brady violation
claim. It follows that the trial court erred in determining
that there existed no genuine issue of material fact, and
that the state was entitled to judgment as a matter of law.

The Court of Appeals nevertheless affirmed the
trial court’s summary judgment ruling, albeit on a differ-
ent ground. Accordingly, we turn to that court’s rationale for
affirmance.

B. The Court of Appeals’ Rationale

The Court of Appeals, relying on Verduzco for the
proposition that petitioner bore the burden of establishing
that her Brady violation claim fell within a statutory escape
clause, concluded that, “to withstand the state’s summary

pT 735

judgment motion,” petitioner was required, but failed to,
“come forward with admissible evidence that would permit
a reasonable factfinder to find that the escape clause applied
to the Brady claim.” 273 Or App at 794. More particularly,
the Court of Appeals held that petitioner was required to, but
did not, submit evidence in response to the state’s summary
judgment motion regarding “what facts [her post-conviction]
lawyer knew during the 1999 post-conviction proceeding”
and “what she herself knew during the 1999 post-conviction
proceeding.” Id.

In reaching that conclusion, the Court of Appeals
erred in applying the “raised in the motion” provision of
ORCP 47 C. Here, defendant’s summary judgment motion
on the Brady claim asserted only one ground, namely, that
petitioner had not “alleged any ultimate facts demonstrating
that she was reasonably unable, when she first sought post-
conviction relief, to discover that impeachment material was
allegedly withheld by a prosecutor or not made available to
petitioner’s underlying defense counsel in 1995.” That is, the
state’s sole challenge to petitioner’s Brady claim was that,
as alleged, that claim was insufficient to trigger the escape
clause of either ORS 138.510(3) or ORS 138.550(3).

Among petitioner’s allegations were her assertions
that the Brady materials “were never disclosed to any attor-
ney working on behalf of Petitioner until Mr. Simrin caused
them to be delivered to Petitioner’s attorney in this post-
conviction proceeding.” Because the state challenged only
petitioner’s allegations and not her ability to prove those
allegations, the state did not “raise in the motion” the issue
whether petitioner would be able to meet her burden of
proving that none of the attorneys who had represented her
before 2012 had knowledge of the Brady materials.* Nor did
the state’s motion raise the other issue cited by the Court
of Appeals—that petitioner was required to allege, and
submit an affidavit in support of such allegation, that she
personally lacked knowledge of the Brady violation at the

8 In Ogle v. Nooth, 355 Or 570, 330 P3d 572 (2014), this court discussed the
requirement in ORS 138.580 that materials supporting a post-conviction claim
must be attached to the petition. The trial court proceedings in this case occurred
before Ogle was decided, and no issue has been raised as to whether petitioner's
filing complied with ORS 138.580. We therefore do not address that issue.

736 Ld

time of her original post-conviction action. 273 Or App at
794. In short, the state’s argument in the post-conviction
court, which it reiterated before the Court of Appeals, had
nothing to do with what petitioner or her counsel actually
knew about the Brady materials at the time of the first post-
conviction action. Rather, the state’s premise was that peti-
tioner reasonably could have raised the Brady claim in the
first action if her counsel had sought access to the Jeffrey
Tiner file from the District Attorney’s office in 1999.

Under Outdoor Media Dimensions Inc. v. State of
Oregon, 331 Or 634, 659-60, 20 P3d 180 (2001), an appel-
late court may affirm a trial court’s ruling on an alterna-
tive basis if, among other things, it can conclude that the
record is materially “the same one that would have been
developed had the prevailing party raised the alternative
basis for affirmance below.” That criterion is of particular
importance where, as here, the opposing party had no rea-
son to adduce evidence on an issue that was not raised in the
summary judgment motion. See, e.g., Petock v. Asante, 351
Or 408, 425, 268 P3d 579 (2011) (rejecting alternative basis
for affirming summary judgment because the court could
not conclude that the record was materially the same one
that would have been developed had the defendant raised
the alternative basis for affirmance in its summary judg-
ment motion). In opposing the state’s summary judgment
motion, petitioner was required to address issues raised in
the motion, but only those issues. Two Two, 355 Or at 326.
Because it would have been improper for the trial court to
grant summary judgment based on the ground that the
Court of Appeals identified, that ground did not provide an
alternative basis to affirm on appeal. We therefore conclude
that the Court of Appeals’ rationale for upholding the trial
court’s ruling does not withstand scrutiny.®

° ‘That said, we recognize that there may be viable arguments in this type of
case that failure to disclose information to defense attorneys does not constitute
a Brady violation because the criminal defendant or defense counsel knew the
information from other sources. See, e.g., United States v. Agurs, 427 US 97, 108,
96 S Ct 2392, 49 L Bd 2d 342 (1976) Brady applies to “information which had
been known to the prosecution but unknown to the defense”). Similarly, a post-
conviction petitioner's own personal knowledge of the basis for a Brady violation
claim that she failed to communicate to post-conviction counsel may defeat an
argument that she falls within the escape clauses of ORS 138.510(3) or ORS
138.550(8). We cannot conclude, however, that a post-conviction petitioner is

Po 737

The decision of the Court of Appeals is reversed.
The judgment of the circuit court is reversed, and the case
is remanded to that court for further proceedings.

required, in her initial pleading, to rebut every possible defense to a claim, or to
negate such a defense in response to a motion for summary judgment, when the
moving party has not raised the issue.

738

Argued and submitted May 10, order of Tax Court in Village at Main Street
Phase II, LLC II v. Dept. of Rev., 22 OTR 52 (2015), vacated, general judgment
of Tax Court dismissing cases reversed, cases remanded to Tax Court to enter

assessor's amended answers and for further proceedings December 80, 2016

VILLAGE AT MAIN STREET PHASE II, LLC,
Plaintiff-Respondent,
v.
DEPARTMENT OF REVENUE,
State of Oregon,
Defendant-Appellant,
and
CLACKAMAS COUNTY ASSESSOR,
Intervenor-Appellant.

(TC 5054; SC S063163 (Control))

VILLAGE AT MAIN STREET PHASE III, LLC,
Plaintiff-Respondent,
v.
DEPARTMENT OF REVENUE,
State of Oregon,
Defendant-Appellant,
and
CLACKAMAS COUNTY ASSESSOR,
Intervenor-Appellant.

(TC 5055; SC S063164)

VILLAGE RESIDENTIAL, LLC,
Plaintiff-Respondent,
v.
DEPARTMENT OF REVENUE,
State of Oregon,
Defendant-Appellant,
and
CLACKAMAS COUNTY ASSESSOR,
Intervenor-Appellant.

(TC 5056; SC S063165)

pi 739

VILLAGE RESIDENTIAL, LLC,
Plaintiff-Respondent,
v,

DEPARTMENT OF REVENUE,
State of Oregon,
Defendant-Appellant,

and

CLACKAMAS COUNTY ASSESSOR,
Intervenor-Appellant.

(TC 5057; SC S063174)
387 P8d 374

Jona J. Maukonen, Assistant Attorney General, Salem,
argued the cause and filed the briefs for appellant

TAO

Department of Revenue. Also on the briefs were Ellen F.
Rosenblum, Attorney General, and Paul L. Smith, Deputy
Solicitor General.

Kathleen J. Rastetter, Assistant County Counsel, Oregon
City, argued the cause and filed the briefs for appellant
Clackamas County Assessor. Also on the briefs was Stephen.
L. Madkour, Clackamas County Counsel.

Donald H. Grim, Greene & Markley, PC, Portland,
argued the cause and filed the brief for respondents. Also on
the brief was Ridgway K. Foley, Jr.

NAKAMOTO, J.

The order of the Tax Court in Village at Main Street
Phase II, LLC II v. Dept. of Rev., 22 OTR 52 (2015), is
vacated. The general judgment of the Tax Court dismissing
the cases is reversed. The cases are remanded to the Tax
Court to enter the assessor’s amended answers and for fur-
ther proceedings.

Po 741

NAKAMOTO, J.

These four consolidated property tax appeals return
following remand to the Oregon Tax Court in Village at Main
Street Phase II v. Dept. of Rev., 356 Or 164, 339 P3d 428
(2014) (Village I). In Village I, this court addressed whether
the Tax Court had erred by denying defendant-intervenor
Clackamas County Assessor’s (assessor) motion for leave to
file amended answers on the ground that the answers con-
tained impermissible counterclaims challenging the value
of taxpayers’ land. This court determined that the assessor
should have been allowed to challenge the land valuations,
and it reversed and remanded the cases to the Tax Court. Id.
at 166, 185. Before the assessor filed amended answers, tax-
payers served notices of voluntary dismissal of their cases
pursuant to Tax Court Rule (TCR) 54 A(1).! The Tax Court
then entered a judgment of dismissal, over the assessor’s
objection. The court denied the subsequent motions for relief
from the judgment by defendant Department of Revenue
(department) and the assessor.

Under TCR 54 A(1), a plaintiff may, without order of
the court or consent of the other party, dismiss its appeal “if
no counterclaim has been pleaded.” The Tax Court concluded
that Village I did not prohibit dismissal of the cases under
TCR 54 A(1), because neither the assessor nor the depart-
ment had filed counterclaims with the Tax Court. Village
at Main Street Phase II, LLC II v. Dept. of Rev., 22 OTR 52,
60-62, 2015 WL 1810580 (2015) (Village II). On appeal, we
address whether, as defendants argue, the Tax Court erred
by giving effect to taxpayers’ notices of voluntary dismissal
rather than to the decision in Village I concerning the asses-
sor’s counterclaims pending in the motions for leave to file
amended answers. As explained below, we conclude that the
Tax Court erred in dismissing the appeals given the deci-
sion and remand in Village I. Accordingly, we vacate the Tax
Court’s order denying defendants relief from the judgment,
reverse the general judgment of dismissal, and remand for
further proceedings.

+ All references to the Tax Court Rules, the Oregon Rules of Civil Procedure,
and the Uniform Trial Court Rules are to the versions in effect in 2015.

es

I. BACKGROUND

To provide context for the discussion of these
appeals, we first briefly review the property tax appeals
process before the Tax Court before laying out the facts
relevant to these appeals. Finally, we summarize the Tax
Court’s most recent ruling in these cases.”

A. Property Tax Appeals Before the Tax Court

Under Oregon law, a taxpayer may challenge the
assessor’s valuation of its property by filing an appeal before
the local board of property tax appeals (BOPTA). ORS
309.100(1). If either party is unhappy with the outcome
of the BOPTA proceedings, an appeal is permitted to the
Magistrate Division of the Tax Court. ORS 305.275; ORS
309.110(7). Within 60 days after the entry of a magistrate’s
written decision, either party may file an appeal with the
Regular Division. ORS 305.501(5)(a).

Although characterized as an “appeal,” the review
by the Regular Division is de novo, with proceedings there
conducted as “original” and “independent.” ORS 305.425());
see also Reed v. Dept. of Rev., 310 Or 260, 265, 798 P2d 235
(1990) (stating that the court must “consider all properly
admitted evidence and reach its own independent conclu-
sions”). Unlike the Magistrate Division, the Regular Division
is a court of record and follows formal rules of evidence. ORS
305.405(1); TCR Preface. The Regular Division has the pow-
ers and, generally speaking, follows the procedures of a cir-
cuit court. ORS 305.405(2)-(8); ORS 305.425(3).

The Tax Court Rules guide litigants before the
Regular Division. Although the Oregon Rules of Civil
Procedure (ORCP) do not apply to Tax Court proceedings,
many of the TCRs mirror their ORCP counterparts. See
ORS 305.425(3) (“hearings and proceedings” in the Regular
Division “shall be in accordance with the rules of practice and
procedure promulgated by the court, which shall conform,

2 Although we refer to the last appeal as Village I, the parties were before
this court two other times in these cases. See Clackamas Cty Assessor v. Village
at Main St. Phase I, 349 Or 380, 245 P3d 81 (2010) (determining additional
value added to rolls was undervaluation, not omitted property); Clackamas Cty.
Assessor v. Village at Main Street, 352 Or 144, 282 P3d 814 (2012) (attorney fees).

=

as far as practical to the rules of equity practice and proce-
dure in this state”); see also TCR Preface (so stating).

B. Factual and Procedural History

The relevant facts are primarily procedural and
are undisputed. Taxpayers are three limited liability
companies—Village at Main Street Phase II, LLC, Village
at Main Street Phase III, LLC, and Village Residential,
LLC—that own real property located in Clackamas
County. By filing appeals with BOPTA, taxpayers chal-
lenged the real market value of only the improvements
on their real property, not the land, for tax years 2006-07
through 2008-09.

After BOPTA affirmed the values of the improve-
ments set by the assessor, taxpayers appealed first to the
Magistrate Division and then to the Regular Division, where
their appeals were consolidated. In the Regular Division, the
department responded by filing answers, and, after success-
fully moving to intervene in all four cases, the assessor also
filed answers. The department denied the allegations form-
ing taxpayers’ claims and asked the Tax Court to uphold the
assessments. However, in three of the four answers filed by
the assessor, the prayer for relief contained a request for an
increase in the values of the improvements over those deter-
mined by BOPTA or by the magistrate.

Intending to seek a determination of the values of
the related land components, which the assessor also believed
were undervalued, the assessor sought a preliminary rul-
ing from the Tax Court as to whether a then-newly enacted.
statute, ORS 305.287, would permit amended answers put-
ting the land values at issue in the taxpayers’ appeals.’ In
part, ORS 305.287 provides that, when one party appeals
“the real market value of one or more components of a prop-
erty tax account,” then “any other party to the appeal may
seek a determination” of “the real market value of any or
all of the other components of the [tax] account.” Taxpayers
responded with their own motion for a preliminary ruling
on whether ORS 305.287 applied.

3 All references to ORS 305.287 are to the 2011 version in efffect when the
parties sought a preliminary ruling before the Tax Court.

TAA

The Tax Court obliged and addressed the issue. It
concluded that ORS 305.287 applied only to appeals to the
Magistrate Division and, therefore, that defendants could
not use that statute to place the land values at issue for the
first time before the Regular Division.

Nevertheless, within a few weeks, the assessor
filed a motion for leave to amend its original answers, with
appended proposed amended answers, and again asserted
that ORS 305.287 applied to taxpayers’ appeals. Those pro-
posed answers contained counterclaims requesting deter-
minations of the real market value of the entire property
tax accounts, including the land components. The Tax
Court denied the assessor’s motion for leave to file amended
answers and entered limited judgments stating that ORS
305.287 did not apply to the proceedings.

Defendants appealed the Tax Court’s limited judg-
ments, and this court reversed. The only issue before this
court was “whether the Tax Court correctly concluded that
ORS 305.287 does not apply to appeals to the Regular
Division of the Tax Court.” Village I, 356 Or at 166. We dis-
agreed with the Tax Court, concluding that ORS 305.287
applies to appeals to the Regular Division and, more specif-
ically, to these cases. Id. at 185. We stated the following in
the final paragraphs of Village I:

“[Wle conclude that ORS 305.287 applies to appeals filed
after that statute’s effective date. Because we have already
determined that ORS 305.287 applies to appeals to the
Regular Division, and because taxpayers appealed to the
Regular Division after that statute became effective, ORS
305.287 applies to these appeals. The Tax Court erred in
concluding otherwise.

“The limited judgments of the Tax Court are reversed,
and the cases are remanded to the Tax Court for further
proceedings.”

Id. at 185. Thus, this court reversed the Tax Court’s denial
of the assessor’s motion for leave to amend its answers on
the only basis that the Tax Court had for its denial.

On the same day that this court issued its opinion in
Village I, and in anticipation of the remand permitting the

po 745

assessor to pursue its counterclaims concerning the value
of the land components, taxpayers filed in the Tax Court’s
Regular Division a notice of voluntary dismissal of their
property tax appeals pursuant to TCR 54 A(1). Although the
assessor opposed the notice by filing an objection, once the
appellate judgment in Village I was issued, the Tax Court
entered a general judgment dismissing taxpayers’ consoli-
dated appeals.

Defendants promptly moved for relief from the gen-
eral judgment, arguing that, at the time taxpayers had filed
their notices of voluntary dismissal, counterclaims existed
that would bar dismissal of the cases in their entirety.
Defendants justified the requested relief with two separate
theories: First, the assessor’s original answers, which did
not contain anything labeled a counterclaim, did in fact
contain counterclaims. In the alternative, the assessor’s
motion for leave to file amended answers, coupled with this
court’s decision and remand in Village I, produced, in effect,
“pleaded” counterclaims.

The Tax Court denied defendants’ motions for relief
from the judgment by order in Village II. The Tax Court
addressed both of defendants’ theories that counterclaims
barred dismissal of the tax appeals. But because we resolve
the appeal based only on defendants’ argument that Village I
required the Tax Court to give effect to the counterclaims
within the amended answers that the assessor had sought
leave to file, we describe the Tax Court’s ruling addressing
that argument in detail.*

The Tax Court first acknowledged that relief
requested through ORS 305.287 “can be thought of as a

4 One reason that the Tax Court rejected defendants’ first argument—
concerning the assessor's original answers—was the court’s conclusion that
defendants could and should have challenged the magistrate’s decision concern-
ing the values of the improvements by filing their own complaints in the Regular
Division in accordance with ORS 305.501(5)(a) (a party may appeal a magis-
trate's decision “by filing a complaint in the regular division of the tax court
within 60 days after the date of entry of the written decision”), Village II, 22
OTR at 57. Because our decision rests on other grounds and we vacate the Tax
Court's order in Village IZ, we need not and do not accept defendants’ invitation
to address the Tax Court’s interpretation of that statute as set out in that order.
If the matter of ORS 305.501(5)(a) should arise on remand, the parties will have
an opportunity to litigate that issue fully.

ee

counterclaim.” Village II, 22 OTR at 60. In addition, the
court agreed that, if correctly and timely pleaded, a coun-
terclaim under that statute would “most probably” bar a dis-
missal under TCR 54 A(1). Id.

The Tax Court then reviewed TCR 23 and TCR 15
concerning amended pleadings. Village II, 22 OTR at 60-61.
Under TCR 23, a party in the assessor’s position must first
seek and then receive leave to file an amended answer. See
TCR 23 A (“a party may amend the pleading only by leave of
court or by written consent of the adverse party, and leave
shall be freely given when justice so requires”); see also TCR
23 D(2)(a) (“whenever a motion for leave to amend a plead-
ing is submitted to the court, it must include, as an attached
exhibit to the affidavit, the entire text of the proposed
amended pleading”). After obtaining leave, the party then
must actually file the amended pleading. See TCR 23 D(1)
(a pleading is amended “by filing a new pleading”). That
ordinarily must be accomplished within 10 days after an
order granting leave. See TCR 15 B(2) (“If the court grants
a motion and an amended pleading is allowed or required,
such pleading shall be filed within 10 days after service of
the order, unless the order otherwise directs.”).

Based on that review, the Tax Court concluded that
a plaintiff’s notice of dismissal under TCR 54 A(1) is barred
if, and only if, a defendant has actually filed an amended
answer containing counterclaims. Village IJ, 22 OTR at
60-62. And because the assessor had not actually filed
amended answers, the court ruled that no “pleaded” coun-
terclaims precluded taxpayers from serving effective notices
of dismissal under TCR 54 A(1). Id. To conclude otherwise,
the court reasoned, “would effectively render the provisions
of TCR 15 B(2) meaningless.” Id.

The Tax Court also considered this court’s decision
in Village I, but the court concluded that it “did not purport
to address, much less override or set aside, the rules of [the
Tax Court] as to procedure on motions for leave to amend.”
Id. The Tax Court therefore concluded that it had no choice
but to dismiss the cases under settled law. Id. at 61-62 (citing
Maxwell v. Stebbins (A108022), 180 Or App 48, 42 P3d 336
(2002), and Sohn v. Thi, 262 Or App 318, 325 P3d 57 (2014).

po 747

Defendants now appeal the order denying them relief from
the judgment and the general judgment of dismissal.

II. ANALYSIS

On appeal, the issue is whether, in light of this
court’s decision in Village I, filed amended answers con-
taining counterclaims were required to abrogate taxpayers’
right to dismiss their property tax appeals under TCR 54
A(1). We review the Tax Court’s dismissal of the appeals for
legal error. See ORS 305.445 (Supreme Court will review for
“errors or questions of law or lack of substantial evidence in
the record”); Hewlett-Packard Co. v. Benton County Assessor,
357 Or 598, 609, 356 P3d 70 (2015) (stating that the inter-
pretation of relevant statutes and rules is a legal issue).

Many of the Tax Court rules are modeled on por-
tions of the Oregon Rules of Civil Procedure (ORCP), and,
to “the extent that the wording of a TCR is the same as that
of an ORCP, cases interpreting the ORCP may be looked to
as authority for interpreting the TCR.” TCR Preface. The
rule at issue here, TCR 54 A(1), is identical in all relevant
respects to ORCP 54 A(1):

“Subject to the provisions of TCR 32 D and of any stat-
ute of this state, a plaintiff may dismiss an action in its
entirety or as to one or more defendants without order of
court: (a) by filing a notice of dismissal with the court and
serving such notice on all other parties not in default not
less than five days prior to the day of trial if no counter-
claim has been pleaded ***, **** Upon notice of dismissal
*** a party shall submit a form of judgment and the court
shall enter a judgment of dismissal.”

TCR 54 A(1) (emphasis added).*

In construing the emphasized phrase in TCR 54
A(1), taxpayers and the Tax Court understand the term

5 OROP 54 A(1) provides:

“Subject to the provisions of Rule 82 D and of any statute of this state, a
plaintiff may dismiss an action in its entirety or as to one or more defendants
without order of court: (a) by filing a notice of dismissal with the court and
serving such notice on all other parties not in default not less than five days
prior to the day of trial if no counterclaim has been pleaded **#, *#* Upon
notice of dismissal ***, a party shall submit a form of judgment and the court
shall enter a judgment of dismissal.”

1S

“pleaded” to require the filing and service of an amended
answer before the counterclaim in that answer may be
deemed “pleaded.” It is undisputed that the assessor had not
actually filed amended answers containing counterclaims
when this court issued its decision in Village I and when
taxpayers served their notices of dismissal under TCR 54
A(1). Instead, as noted above, the assessor had only sought
leave of the Tax Court to file amended answers and attached
the proposed amended answers to its motions for leave to
file them. TCR 23 D(2)(a).° Defendants, on the other hand,
argue that the Tax Court’s dismissal was inconsistent with
this court’s decision in Village I and that the Tax Court was
obliged by the reversal and remand in Village I to allow the
assessor’s pending counterclaims to prevent dismissal. We
conclude that the Tax Court should have given effect to our
decision in Village I.

When an appellate court directs action on remand,
the tribunal typically may determine how to accomplish the
directed outcome if it does so within the boundaries set by
the remand. See Gearhart v. PUC, 356 Or 216, 234-36, 356
P3d 216 (2014) (discussing the effect and scope of a general
remand to an agency). That flexibility is constrained not
only by the express order of the appellate court’s remand,
but also by its implied directive when considered in the con-
text of the court’s entire opinion. See State v. Bowen, 352 Or
109, 115, 282 P3d 807 (2012) (acknowledging ambiguity in
express remand, but concluding that “[wlhen the relevant
parts of the opinion are considered in their entirety ***
[the] court’s intention in ordering remand *** is clear”);
Ross v. Robinson, 174 Or 25, 42, 45-46, 147 P2d 204 (1944)
(explaining that the court’s prior decision, which sustained
a demurrer to the complaint and remanded for further pro-
ceedings not inconsistent with the decision, implied that
the complaint had substance and that the trial court had
authority to permit an amended complaint); see also Sprague
v. Ticonie Bank, 307 US 161, 169, 59 S Ct 777, 83 L Ed 1184

© Although TCR 23 is substantially the same as ORCP 23, defendants cor-
rectly note that the Tax Court requirement to submit the proposed amended
pleading with a motion for leave to amend is not present in ORCP 23. See TCR
28 D(2). However, UTCR 5.070, which applies to proceedings in Oregon circuit
courts, similarly obligates litigants to attach the entire text of the proposed
amended pleading to a motion for leave to amend. See UTCR 5.070.

749

(1939) (examining whether outcome was impliedly addressed
by appellate court’s decision and subsequent remand). The
scope of remand is established by the appellate court’s opin-
ion in a particular case. See Bowen, 352 Or at 115-16 (exam-
ining the court’s intention in ordering remand).

Although the Tax Court correctly observed that
Village I made no statement about TCR 54 A(1) or the appli-
cation of procedural rules on remand—which were not issues
on appeal—the Tax Court’s dismissal of the cases failed to
implement this court’s decision in Village I. In Village I, this
court reversed the Tax Court’s limited judgments denying
the assessor leave to file amended answers and counter-
claims. 356 Or at 173, 185. The court also remanded to the
Tax Court for “further proceedings.” Id. at 185. That general
remand included an implied directive to enter the assessor’s
amended answers, because the court’s opinion reversed the
Tax Court’s only basis for denying entry of the amended
answers. In fact, the Tax Court noted in its order that,
but for taxpayers’ subsequent notice of dismissal, it would
have allowed the amended answers upon return receipt of
jurisdiction. Village IT, 22 OTR at 61. Thus, we hold that
our remand required the Tax Court to allow the pending
amended answers to be entered before turning to taxpayers’
subsequently filed notices of dismissal.

The case law concerning any application of TCR
54 A(1) is sparse, and no prior Oregon case addresses how
that rule or ORCP 54 A(1) operates when, after this court
reverses the denial of a party’s motion for leave to amend
its pleading to include a counterclaim and remands the
case, the other party seeks to avoid the effect of the appeal
and remand by preemptively filing a notice of voluntary
dismissal. However, we note that a plaintiff's right to vol-
untarily dismiss an action is subject to judicially created
limitations. See Garrison v. Cook, 280 Or 205, 570 P2d 646
(1977).

In Garrison, the plaintiff, to avoid litigating the
issue of attorney fees, sought to terminate his action after
he had lost a summary judgment motion. 280 Or at 208,
211. He filed a motion as provided in former ORS 18.230 (a
predecessor to ORCP 54 A(1)), which allowed such a motion

0 re

“not less than five days prior to the day of trial if no coun-
terclaim has been pleaded.” This court held that, in those
circumstances, the plaintiff could not avail himself of a
judgment of nonsuit as “a matter of right” as provided in the
statute. 280 Or at 211. The court reasoned that to conclude
otherwise would allow the plaintiff to “avoid the effect of
an adverse summary judgment.” Id. Similarly, our holding
in these cases prevents taxpayers from litigating through a
decision on appeal whether defendants were entitled to file
counterclaims putting the land values at issue in the cases,
and then avoiding that decision by claiming that the very
counterclaims at issue on appeal had not yet been pleaded.

In sum, applying principles concerning the effect
and scope of remands, we conclude that the Tax Court was
obliged to give effect to this court’s decision in Village I that
the assessor had a statutory right to pursue the counter-
claims alleged in its proposed amended answers—which the
Tax Court had prevented the assessor from filing through
its rulings that were the subject of Village J—upon remand.
of the cases to the Tax Court for further proceedings.’
Simply put, when this court has remanded to a lower court
to apply our decision, it is implicit in that remand that the
court, upon regaining jurisdiction over the case, will carry
out both express and implied directions. Accordingly, we
reverse and remand to the Tax Court to permit the filing of
the assessor’s amended answers.

The order of the Tax Court in Village at Main
Street Phase II, LLC II v. Dept. of Rev., 22 OTR 52 (2015), is
vacated. The general judgment of the Tax Court dismissing
the cases is reversed. The cases are remanded to the Tax
Court to enter the assessor’s amended answers and for fur-
ther proceedings.

1 Thus, our decision does not affect established case law concerning motions
pending before a trial court, when no remand is at issue. For example, the Court
of Appeals has determined that a plaintiff may file a notice of voluntary dismissal
even in the face of a pending motion for summary judgment. See, e.g., Ramirez
v. Northwest Renal Clinic, 262 Or App 317, 321, 324 P8d 581 (2014) (a pending
motion or anticipated order for summary judgment will not prevent a notice of
voluntary dismissal); see also Sohn v. Thi, 262 Or App 313, 315, 325 P3d 57 (2014)
(stating the same). Nothing in this decision changes that case law.

754

Argued and submitted September 22, 2016, decision of Court of Appeals
affirmed, judgment of circuit court reversed, and case remanded to circuit court
for further proceedings January 20, 2017

STATE OF OREGON,
Petitioner on Review,

ve
VICTOR JAVIER PICHARDO,
Respondent on Review.

(CC 110833156; CA A150488; SC S063885)

388 P3d 320

Leigh A. Salmon, Assistant Attorney General, Salem,
argued and the cause and filed the brief for petitioner on
review. Also on the brief were Ellen F. Rosenblum Attorney
General, and Benjamin Gutman, Solicitor General.

Jed Peterson, O’Connor Weber LLC, Portland, argued
the cause and filed the brief for respondent on review.

KISTLER, J.

The decision of the Court of Appeals is affirmed. The
judgment of the circuit court is reversed, and the case is
remanded to the circuit court for further proceedings.

Po 755

KISTLER, J.

An officer stopped defendant to investigate whether
he was helping another person evade the police. During the
stop, the officer asked defendant for consent to a search for
drugs. The primary question in this case is whether the offi-
cer’s request for consent was reasonably related to the reason
for the stop and thus did not extend it in violation of Article I,
section 9, of the Oregon Constitution. The trial court ruled
that the officer’s request for consent did not unreasonably
extend the stop. The Court of Appeals reversed. It held that
an unrelated request for consent extended the stop in vio-
lation of Article I, section 9, and that defendant’s consent
had not attenuated that illegality. State v. Pichardo, 263
Or App 1, 326 P3d 624 (2014). We allowed the state's peti-
tion for review, vacated the Court of Appeals decision, and
remanded the case to the Court of Appeals, which adhered
on remand to its decision. See State v. Pichardo, 356 Or 574,
842 P8d 87 (2014) (allowing, vacating, and remanding);
State v. Pichardo, 275 Or App 49, 364 P3d 1 (2015) (adhering
to initial decision). We allowed the state’s petition for review
from the decision on remand and now affirm the Court of
Appeals decision.

On August 2, 2011, Officer Long and his partner
were on patrol in Gresham.! They received a report from
the dispatcher that other officers had tried to execute an
arrest warrant on a person named Hamilton, who had fied.
The dispatcher described Hamilton and said that he had
last been seen jumping a fence at 18837 SE Yamhill Street
and running west. The dispatcher added that Hamilton had
discarded a backpack as he fled.

Long and his partner drove to the area near SE
188th Avenue and Yamhill Street. While Long’s patrol
car was traveling eastbound on Yamhill Street, he noticed
defendant’s car stopped in the middle of a traffic lane on
SE 187th Avenue, approximately one block from the area
where Hamilton had fled. Long saw a person who matched
Hamilton’s description (and who turned out to be Hamilton)
running towards defendant’s car. Hamilton opened the

1 We take the facts from the evidence at the hearing on defendant’s motion to
suppress and state them consistently with the trial court’s ruling.

156 Ld

front passenger door of defendant’s car, jumped into the
passenger’s seat, and leaned the seat back. Based on what
he saw, Long was “concerned that [defendant] was assist-
ing [Hamilton] to get out of the area with officers chasing
him” and that Hamilton could have passed contraband to
defendant.

Long and his partner turned on their patrol car’s
overhead lights and, within 10 seconds of seeing Hamilton
get into defendant’s car, pulled their patrol car in front of
defendant’s car, blocking it from going forward. Other offi-
cers arrived with their patrol car’s overhead lights acti-
vated and parked their car behind defendant’s car, blocking
it from backing up. Three officers removed Hamilton from
defendant’s car at gunpoint.

Long went to the driver's side of defendant’s car. He
told defendant “just to keep his hands where we could see
them.” Defendant put his hands on the steering wheel, and
Long “covered” defendant while the other officers were tak-
ing Hamilton into custody. Long asked defendant to step out
of the car, which he did. Long then asked defendant if he had
a driver’s license or insurance. Defendant replied that he had
insurance but no driver’s license. Long later testified that,
“[alt that point, I asked [defendant] if I could have consent
to search him for any drugs,” to which defendant replied,
“Yes, you can.” As Long began to pat defendant down, defen-
dant told Long that he had heroin in his left pants pocket.
After pulling a small plastic bag of heroin out of defendant’s
pocket, Long placed defendant under arrest for possession of
a controlled substance.

The state charged defendant with possession of her-
oin. Before trial, defendant moved to suppress the evidence
resulting from the stop. At the hearing on that motion, Long
testified that he stopped defendant for impeding traffic in
violation of ORS 811.130. Later, he added that he “was con-
cerned that [defendant] was assisting the other person to
get out of the area with officers chasing him.” The trial court
found that the stop of defendant’s car was supported by rea-
sonable suspicion, and it rejected defendant’s argument that
Long unreasonably extended the stop by asking for consent
to search defendant for drugs. After the trial court denied

pT 157

defendant’s suppression motion, defendant entered a condi-
tional guilty plea, which preserved his right to appeal the
trial court’s pretrial ruling. See ORS 135.335 (authorizing
conditional pleas).

On appeal, the state argued that the stop was jus-
tified because the officers reasonably suspected that defen-
dant was attempting to help Hamilton evade the police in
violation of ORS 162.325 or ORS 162.247.? Relying on Court
of Appeals cases, the state argued that “‘no authority sup-
ports the proposition that an officer cannot, during the
course of a [criminal] stop that is supported by reasonable
suspicion ***, inquire whether the stopped person is carry-
ing weapons or contraband.” (Quoting State v. Lamb, 249
Or App 335, 342, 277 P3d 581 (2012).)

The Court of Appeals disagreed. Pichardo, 263 Or
App at 8. It explained that asking an unrelated question
that prolongs a stop beyond the time ordinarily required to
complete it violates Article I, section 9, unless the officer has
independent reasonable suspicion to justify the additional
detention. Id. at 5-6. The court concluded that, in this case,
Officer Long’s request for consent had extended the stop and
that he did not have reasonable suspicion to believe that
defendant possessed drugs. Id.* Accordingly, it held that
Long’s request violated Article I, section 9. Relying on State
v. Hall, 339 Or 7, 115 P3d 908 (2005), the court also held
that defendant’s consent did not attenuate that illegality. Id.
at 8.

The state petitioned for review, arguing that Long’s
request for consent had not impermissibly extended the
stop. It reasoned that the range of permissible questions
in a criminal stop is greater than in a traffic stop, and it
argued that, in the context of this case, Long’s request for
consent was constitutionally reasonable. The state also
argued that defendant’s consent was sufficient to attenuate

2 ORS 162.325 makes it a crime to hinder prosecution, while ORS 162.247
makes it a crime to interfere with a police officer in the performance of his or her
official duties.

5 The state did not argue in the Court of Appeals that Long’s request for con-
sent was reasonably related to the stop, and the Court of Appeals did not address
that issue explicitly. Rather, it appears to have assumed that the request was not
reasonably related.

158 Ld

the taint of any illegality. This court allowed the state’s peti-
tion for review, vacated the Court of Appeals decision, and.
remanded for further consideration in light of recent cases
clarifying the attenuation analysis in Hall. Pichardo, 356
Or 574. On remand, the Court of Appeals adhered to its ini-
tial conclusion that defendant’s consent had not attenuated
the illegality. Pichardo, 275 Or App at 58.

On review, the state raises two issues. It argues
initially that Long’s request for consent did not unlawfully
extend the stop because the request was reasonably related
to the stop. Alternatively, it argues that, if Long’s request
did unlawfully extend the stop, defendant’s consent was suf-
ficient, in the context of this case, to attenuate that illegal-
ity. We begin with the first issue that the state raises.

The state’s argument on that issue is narrow. The
state does not dispute that, as a factual matter, Long’s
request for consent extended the stop. Cf State v. Rodgers,
219 Or App 366, 372, 182 P3d 209 (2008) (recognizing that.
“an officer is free to question a motorist about matters unre-
lated to the traffic infraction during an unavoidable lull in
the investigation”), affd sub nom State v. Rodgers/Kirkeby,
347 Or 610, 227 P3d 695 (2010).* The state also does not
argue that Long developed a reasonable suspicion, during
the course of the stop, that defendant possessed drugs, which
would justify his request for consent even if the request
were unrelated to the initial reasons for which he stopped
defendant. Rather, the state’s first argument focuses on one
issue—whether Long’s request was reasonably related to
the stop.

On that issue, the state starts from the proposition
that most of our cases addressing that issue have arisen
in the context of traffic stops. The state reasons that traf-
fic stops usually present discrete, narrowly focused issues
while criminal stops can entail a far broader range of issues.
It follows, the state contends, that a correspondingly broader
range of inquiries will be reasonably related to criminal

4 Because the state does not dispute that Long’s request extended the stop,
this case does not present the question whether unrelated questions that occur
during an unavoidable lull are permissible under Article I, section 9, and we
express no opinion on that issue.

Po 759

stops than traffic stops. In the state’s view, “in the context of
a criminal investigatory stop, where the very purpose is to
ferret out potential criminal activity, a request for consent
to search, without more, will rarely run afoul of Article I,
section 9.” Building on that proposition, the state notes that

“Long was concerned that Hamilton may have passed drugs
or contraband to defendant when he got into the car.” It fol-
lows, the state concludes, that

“while Officer Long may not have had independent reason-
able suspicion of drug activity, the request for consent was
nonetheless reasonably related to the overall purpose of the
investigative detention: exploring the relationship between
defendant and Hamilton and determining whether defen-
dant had committed a crime.”

We note, as an initial matter, that the premise of
the state’s argument is correct. If Long’s request for con-
sent was “reasonably related” to the purpose of the deten-
tion, then the request did not extend the stop in violation
of Article I, section 9. State v. Watson, 353 Or 768, 779, 305
P3d 94 (2018) (describing the reasoning in State v. Fair, 353
Or 588, 302 P3d 417 (2013)). Moreover, as the court clarified
in State v. Jimenez, 357 Or 417, 427-29, 353 P3d 1227 (2015),
a question may be reasonably related to a stop even though
the question is not supported by reasonable suspicion; that
is, Long did not have to have a reasonable suspicion that
defendant possessed drugs for his request for consent to be
reasonably related to the purpose of the stop. There must,
however, be a “reasonable, circumstance-specific” relation-
ship between the question and the purpose of the stop. See
id. at 429.

As the state also notes, this court has not had occa-
sion to consider when an officer’s inquiries will be “reason-
ably related” to a criminal investigatory stop. Rather, the
question whether an officer’s inquiry was reasonably related
to a stop has arisen, for the most part, in the context of
traffic stops. See Jimenez, 357 Or at 419-20 (traffic offense);
Watson, 353 Or at 769 (same); but cf. Fair, 353 Or at 605
(considering issue in the context of a stop “to question [a] cit-
izen as a potential witness to or victim of a crime”). In this
case, Long reasonably suspected that defendant was helping

760 Le

Hamilton evade the police in violation of ORS 162.247. That
statute prohibits intentionally “prevent[ing] or attempting]
to preven[t] a peace officer *** from performing the lawful
duties of the officer with regards to another person.” ORS
162.247.

We agree with the state that an investigation to
determine whether criminal activity has occurred or is
occurring—in this case, whether defendant intentionally
attempted to prevent law enforcement officers from perform-
ing their duties—can entail a broader range of questions
than an investigation to determine whether a defendant
has committed a traffic violation, such as failing to signal a
lane change. However, we do not agree with the state that
“a request for consent to search, without more, will rarely
run afoul of Article I, section 9.” As Jimenez establishes, the
state must be able to point to a “reasonable, circumstance-
specific” relationship between the inquiry and the purpose
of the detention, even though the circumstance-specific rela-
tionship need not rise to the level of reasonable suspicion of
other criminal activity. Jimenez, 357 Or at 429.

Perhaps to demonstrate a reasonable, circumstance-
specific relationship, the state notes that Hamilton had
dropped a backpack, which could have contained drugs, as
he fled the police, and it argues that Hamilton also could
have passed drugs to defendant once he got in defendant’s
car. It follows, the state contends, that Long’s request for
consent was reasonably related to “exploring the relation-
ship between defendant and Hamilton.”

The relationship that the state perceives between
Long’s request for consent to search for drugs and the rea-
son for the stop—to investigate whether defendant was
helping Hamilton evade the police—seems tenuous for four
cumulative reasons. First, the state’s argument depends on
the assumption that Hamilton fled from the police because

5 The Court of Appeals noted that Long reasonably suspected that defen-
dant also was violating ORS 162.325, which prohibits persons from committing
certain acts “with intent to hinder the apprehension *** of a person who has
committed a crime punishable as a felony.” The record, however, does not reflect
that Hamilton had committed a felony. We accordingly limit our discussion to
ORS 162.247.

ee 761

he possessed drugs—an assumption that the state bases on
the fact that Hamilton discarded his backpack as he fled.
However, if Hamilton discarded his backpack to get rid
of his drugs, then he would have had no drugs to give to
defendant once he got in the car. For the factual predicate
of state’s argument to be valid, it is necessary to assume
that Hamilton did not discard all his drugs as he fled but
kept some drugs on his person, which he gave to defendant.
Without any evidence explaining why Hamilton would have
discarded some but not all his drugs as he fled, the factual
premise on which the state’s argument rests seems suspect.

Second, Long testified that approximately 10 sec-
onds passed between the time that he saw Hamilton get
into defendant’s car and the time that Long and his part-
ner arrived at the car. During that time, Long did not see
Hamilton throw anything into the car or hand anything to
defendant.® Rather, he saw Hamilton get into the car and
lower the passenger seat, presumably to avoid detection.
Other than the abstract possibility that Hamilton could
have given something to defendant, Long had no perceived
basis for thinking that any transfer had occurred. Moreover,
if Long were correct that Hamilton had passed drugs to
defendant, the transfer would had to have occurred within
10 seconds and without being observed by the officers. While
possible, the occurrence of those events in such a brief span
of time seems unlikely.

Third, Long’s request for consent to search defen-
dant for drugs seems an odd way of “exploring the relation-
ship between defendant and Hamilton,” which is the reason
the state advances for saying that Long’s request for consent
was reasonably related to investigating whether defendant
was helping Hamilton escape. A search of defendant’s per-
son for drugs would reveal, at most, that he had drugs on
him. It would say nothing about where or when he got them.
Indeed, Long testified that both the area and the “street in
particular” where he came upon defendant’s car was known
for “[hligh drug activity, *** [b]oth use and dealing.” In light
of that testimony, there may have been a good chance that

5 Because Long was a passenger in the patrol car, he could focus on the inter-
action between defendant and Hamilton.

762 Ld

defendant would have drugs on him, but it was not because
Hamilton had passed them to him.

Finally, we note that, until the state filed its brief
on the merits in this court, the state had not argued that
Long’s request for consent was related to the stop, much
less that the two events were related for the reason that the
state now identifies. Indeed, in its initial brief in the Court of
Appeals, the state suggested that, because the stop was for
criminal purposes, Long’s request need not be related to the
reason for the stop. It may be that the state did not appreci-
ate the need to establish a reasonable relationship between
the request and the stop until this court issued its decisions
in Walton and Jimenez, but the absence of any suggestion
that the request was related to the stop until the state filed
its brief on the merits in this court calls into question the
validity of the rationale that the state now advances.

The reasonable relationship test that the court
articulated in Fair, Watson, and Jimenez is not a demanding
one. For example, the officers in Fair reasonably stopped the
victim of a potential domestic assault to verify her identity.
See 353 Or at 613 (upholding the officer’s authority to stop
the victim as a material witness). In doing so, the officers
checked law enforcement records and asked the victim about
previous arrests to see if her answers corresponded with the
information on file for a person with the victim’s maiden
name. Id. at 614. The court explained that, in the particular
circumstances of that case, those questions “were reason-
ably related *** to the reasons for temporarily detaining
[the victim]”; that is, they permitted the officers to verify
her identity and also to determine whether she was likely to
have initiated the domestic abuse. Id. Given that relation-
ship, the court concluded that, in making those inquiries,
the officers had not unconstitutionally extended the stop. Id.
In this case, by contrast, the link between Long’s request
for consent to search defendant for drugs and the reason
for the stop—to investigate whether defendant was helping
Hamilton evade the police—is too tenuous to establish that
the request was reasonably related to the reason for the
stop. We accordingly agree with the Court of Appeals that
Long’s request for consent extended the stop in violation of
Article I, section 9.

po 763

The state argues alternatively that, even if Long’s
request unconstitutionally extended the stop, defendant’s
consent attenuated the illegality. Before turning to the
state’s argument, it is helpful to put it in context. Hamilton
got into defendant’s car on a residential cross-street in
Gresham. Within 10 seconds, one police car had pulled in
front of defendant’s car with its overhead lights flashing,
effectively blocking defendant from going forward. And
a second police car, also with its overhead lights flashing,
pulled up behind defendant’s car, effectively blocking him
from backing up. Three officers got out of the patrol cars,
went to the passenger’s side of defendant’s car, and took
Hamilton out of defendant’s car at gunpoint. A fourth officer
(Long) went to the driver’s side of the car and told defendant
to put his hands on the steering wheel where Long could see
them.

Once the three officers had taken Hamilton into
custody, Long asked defendant to step out of the car. When
defendant did so, Long asked if defendant had insurance or
a license. Defendant said he had insurance but no license,
and Long “asked him if [he] could have consent to search
him for any drugs.” Defendant replied, “Yes, you can.”

In holding that defendant’s consent was not suffi-
cient to attenuate the illegality, the Court of Appeals noted
the temporal proximity between the illegality and the
request for consent and the absence of any intervening cir-
cumstances. Pichardo, 275 Or App at 54-55. It also noted
that, although the police did not engage in threatening
behavior, their conduct was “moderately flagrant” because
it was well established that unrelated questions that occur
outside of an unavoidable lull violate Article I, section 9. Id.
at 55. Finally, the Court of Appeals found it “decisive” that
“[plrocuring defendant’s consent to an exploratory search
for drugs and obtaining drug-related evidence wlere], nec-
essarily, the purpose and intended consequence of the police
misconduct in this case.” Id. at 56. Given those consider-
ations, the court concluded that defendant’s consent did not
attenuate the taint of the illegality. Id. at 58.

Although we agree with the Court of Appeals that
defendant’s consent did not attenuate the illegality, we

764 Ld

analyze that issue differently than the Court of Appeals did.
In State v. Unger, 356 Or 59, 333 P3d 1009 (2014), this court
clarified its earlier attenuation analysis in Hall. The court
rejected the proposition that consent that follows closely on
an illegality without any intervening circumstances invari-
ably will be a product of the illegality. Id. at 78. The court
also disagreed with Hall that the question whether a defen-
dant’s consent will attenuate the illegality turns on whether
the officer asked for consent or whether the defendant vol-
unteered it.’ Id. at 78-79. The court explained that the ques-
tion turns instead on a fact-specific analysis of whether the
defendant’s consent is “unrelated or only tenuously related
to the prior illegal police conduct.” Id. at 79.

The court noted that the following factors may bear
on that analysis: the temporal proximity between the ille-
gality and the consent; the presence of any intervening cir-
cumstances, such as Miranda warnings; the purpose and
flagrancy of the police conduct; and the nature of the illegal
conduct—i.e., whether it is intrusive, extended, or severe. Id.
at 80-83. As the court explained in Unger, “ignoring the very
different effects that police conduct may have on an individ-
ual’s consent to a search is neither reasonable nor constitu-
tionally required.” Id. at 83.

In this case, defendant’s consent followed immedi-
ately on Long’s request, which unlawfully extended the stop.
Moreover, there were no intervening circumstances, such as
Miranda or other warnings. However, as we held in Unger
and State v. Musser, 356 Or 148, 335 P3d 814 (2014), the
fact that consent follows closely on the illegality does not
necessarily mean that the consent is the product of the ille-
gality. Unger, 356 Or at 77; Musser, 356 Or at 155. Rather,
the nature of the police conduct matters, as does whether
the police traded on information that they obtained as a
result of the illegality to seek or obtain the defendant’s con-
sent. Musser, 356 Or at 155-57 (discussing “nonexclusive

1 After noting the temporal proximity and absence of intervening circum-
stances, the Court of Appeals found it “decisive” that Long had asked for and
received defendant's consent to search. Pichardo, 275 Or App at 58. That reason-
ing is difficult to square with Unger, which held that the fact that an officer asks
for consent to search does not necessarily mean that the defendant’s consent was
insufficient to attenuate the taint of the illegality. See Unger, 356 Or at 78-79.

765

considerations *** in reviewing the totality of the circum-
stances to determine whether the police ‘exploited’ or ‘took
advantage’ of their unlawful conduct”).

In our view, the dispositive factor in this case is the
nature of the officers’ conduct during the stop. This was not
a case like Unger where the officer went to the back of the
defendant’s house, knocked on the door, identified himself
as “Kevin *** with the sheriff's office,” and explained that
there had been a complaint about the house, which he was
investigating. 356 Or at 62. Nor is it a case like State v.
Lorenzo, 356 Or 134, 335 P3d 821 (2014), where the officer
went to the defendant’s apartment to check on the defen-
dant’s welfare, knocked on the defendant’s bedroom door,
and said, “Police, Jeff, are you okay?” Id. at 187. Instead, in
this case, within 10 seconds after Hamilton got into defen-
dant’s car, two police cars with their overhead lights flash-
ing surrounded defendant’s car and blocked it from moving.
Three officers took Hamilton out of defendant’s car at gun-
point, while the fourth officer (Long) approached defendant
and directed him to remain in the car with his hands on the
wheel until Hamilton had been placed under arrest. Long’s
request for consent both extended the stop unconstitution-
ally and followed immediately on the officers’ show of force.

Given that show of force, we are not persuaded that
defendant’s consent, while voluntary, was sufficient to atten-
uate the taint of the illegal extension of the stop. Cf Unger,
356 Or at 73 (distinguishing exploitation from voluntari-
ness). As we explained in Musser,

“Police obviously need reasonable leeway to investigate and
prevent crimes, and monitoring locations where criminal
activity frequently occurs *** is part of good police work.
But police are not authorized to detain and question cit-
izens merely to ‘make sure they are not doing anything
wrong.”

356 Or at 158-59. What occurred here was not substantially
different. In this case, Long extended the stop, not to ask
a question that was reasonably related to the stop but to

8 In Lorenzo, the officer opened the apartment door, put his arm inside the
apartment and knocked on the defendant’s closed bedroom door, but did not
otherwise enter the apartment. 356 Or at 137.

166 Lt

ask an unrelated question about other criminal conduct for
which he had no reasonable suspicion. Given that act and
the officers’ show of force, we conclude, as we did in Musser,
that defendant’s consent was not sufficient to attenuate the
taint of the illegality.

The decision of the Court of Appeals is affirmed.
The judgment of the circuit court is reversed, and the case
is remanded to the circuit court for further proceedings.

767

Argued and submitted September 23, 2016, decision of Court of Appeals
reversed, order of circuit court denying defendants’ motion to set aside general
judgment and supplemental judgment awarding costs and attorney fees to
plaintiff affirmed January 20, 2017

UNION LUMBER CO.,
an Oregon corporation,
dba Bronson Lumber Company,
Petitioner on Review,
v.
Ron R. MILLER
and Linda Miller,
Respondents on Review.
(CC 10-07-46539; CA A152241; SC S062459)

388 P3d 327

768 PO

Jonel K. Ricker, Joseph and Ricker, LLC, filed the brief
for petitioner on review.

Philip Wasley, Wasley Law Office, PC, LaGrande, argued
the cause and filed the brief for respondents on review.

BREWER, J.
The decision of the Court of Appeals is reversed. The
order of the circuit court denying defendants’ motion to set

aside the general judgment and the supplemental judgment
awarding costs and attorney fees to plaintiff are affirmed.

Po 769

BREWER, J.

The question in this case is whether the trial court
erred in denying defendants’ motion under ORCP 71 B(1)
to set aside a general judgment entered against them on
grounds of excusable neglect and mistake. The Court of
Appeals reversed the trial court’s ruling, concluding that
the judgment was entered as a result of mistakes made by
plaintiff and a court-appointed arbitrator with respect to
the service of case-related documents on defendants. Union
Lumber Co. v. Miller, 263 Or App 619, 625, 328 P3d 1284
(2014). Because we conclude that defendants were not enti-
tled to relief from the judgment on the grounds asserted, we
reverse the decision of the Court of Appeals and affirm the
trial court’s order denying defendants’ motion to set aside
the judgment.t

I. FACTS AND PROCEDURAL HISTORY

On review of an order denying a motion to set aside
a judgment, we set out the undisputed facts in the light
most favorable to the moving party. See Wershow v. McVeety
Machinery, 263 Or 97, 108, 500 P2d 696 (1972) (so viewing
facts on review of motion to set aside default judgment).
However, we accept the trial court’s findings of disputed fact,
if there is evidence to support those findings. See Hiatt v.
Congoleum Industries, 279 Or 569, 576, 569 P2d 567 (1977)
(“If grounds are apparent which could cause the trial court
to suspect the uncontradicted statements in the affidavit,
the trial court does not need to accept such statements as
correct.”).

In June 2002, defendant Ron Miller entered into
an open account agreement with plaintiff, the owner and
operator of building supply stores, for the purchase of build-
ing supply materials. In July 2010, plaintiff filed an action
for breach of contract and unjust enrichment against Ron
Miller and his spouse Linda Miller, seeking $17,865 as
the unpaid balance on the account. The complaint alleged
that defendants’ son, Ean Miller, had purchased building

2 Defendants also appealed from a supplemental judgment awarding plain-
tiff the costs and attorney fees that it incurred in resisting the motion to set aside
the general judgment. We reject without discussion defendants’ challenge to the
supplemental judgment.

770 PO

materials from plaintiff, charging those materials to the
Miller account with his father’s authority. The complaint
further alleged that the materials that Ean purchased were
delivered to properties that defendants owned and were
used to improve those properties and that, for several years,
defendants had paid the charges that Ean had made on the
account.

Plaintiff personally served Linda Miller with sum-
mons and complaint at defendants’ residence in Wisconsin,
on August 3, 2010. After Linda was served with the sum-
mons and complaint, defendants each signed powers of
attorney authorizing Ean “to answer the complaint filed in
[this case].” On August 30, 2010, Ean filed an answer for
defendants, attaching the two powers of attorney as exhib-
its. The answer denied that Ean had authority to charge
building materials to his father’s account and denied that
the materials that Ean had purchased were used to improve
defendants’ properties. The answer affirmatively alleged
that Ean had purchased the materials and incurred the
charges for work done on other people’s property. In a coun-
terclaim, the answer further alleged that collection of the
account was stayed by Ean’s voluntary bankruptcy petition.
The answer was signed “Ean Miller P.O.A.” and it desig-
nated defendants’ address as “2816 N 2nd St., La Grande,
OR 97850.” Ean filed the answer in the circuit court, and the
case was assigned to court-annexed arbitration pursuant to
ORS 36.405(1)(a).?

Ron was served with summons and complaint
by substitute service on Linda at their Wisconsin resi-
dence address in November 2010. In April 2011, the court
appointed an arbitrator, copying the notice of appointment
to “Jonel Ricker [plaintiff's attorney], Ron Miller, etal [sic].”
The arbitrator then sent notices of potential hearings dates,

2 ORS 36.405 provides, in part:

“() Except as provided in ORS 30.136, in a civil action in a cireuit court
where all parties have appeared, the court shall refer the action to arbitra-
tion under ORS 36.400 to 36.425 if either of the following applies:

“(a) The only relief claimed is recovery of money or damages, and no
party asserts a claim for money or general and special damages in an amount
exceeding $50,000, exclusive of attorney fees, costs and disbursements and
interest on judgment.”

P| 771

his arbitration rates, and a hearing date and location to
plaintiffs counsel and to “Ean Miller POA” at the La Grande
address. Plaintiffs counsel sent a prehearing statement of
proof to defendants at the La Grande address as well.

Neither defendants nor Ean participated in the arbi-
tration proceeding. At the hearing, plaintiff orally moved to
strike defendants’ answer on the ground that Ean was not
licensed to practice law in the State of Oregon and, there-
fore, lacked authority to represent defendants in the action.
The arbitrator granted that motion, then received plaintiff's
evidence and heard testimony from plaintiff's witnesses.®

The next day, the arbitrator issued a decision and
award, which was mailed to plaintiff's counsel and to defen-
dants at the La Grande address. In the decision and award,
the arbitrator determined that plaintiff was entitled to
recover the amount sought on its claims, and the arbitrator
directed plaintiffs counsel to prepare a general judgment in
accordance with findings of fact and conclusions of law that
the arbitrator made in support of his decision. Plaintiff's
counsel filed a proposed general judgment and money
award, attorney fee statement, and statement of costs and
disbursements with the court on June 16, 2011. Plaintiff's
counsel mailed copies of those documents to defendants at
the La Grande address. The court entered the general judg-
ment and money award on July 14, 2011. On July 18, 2011,
Ean received a notice of entry of judgment that the court
had mailed to the La Grande address.

After receiving the notice of entry of judgment, Ean
contacted defendants, who then obtained counsel and filed
a motion to set aside the judgment under ORCP 71 B(1).4 In

® Defendants do not challenge the arbitrator's decision to strike their answer.
* ORCP 71 B provides, in part:

“(1) By motion. On motion and upon such terms as are just, the court
may relieve a party or such party’s legal representative from a judgment
for the following reasons: (a) mistake, inadvertence, surprise, or excusable
neglect; (b) newly discovered evidence which by due diligence could not have
been discovered in time to move for a new trial under Rule 64 F; (c) fraud
(whether previously called intrinsic or extrinsic), misrepresentation, or other
misconduct of an adverse party; (d) the judgment is void; or (e) the judgment
has been satisfied, released, or discharged, or a prior judgment upon which it,
is based has been reversed or otherwise vacated, or it is no longer equitable

772 CO

the motion, defendants generally asserted that the judgment
should be set aside due to mistake, inadvertence, surprise,
or excusable neglect that resulted in defendants’ failure to
defend the action.’ More particularly, defendants argued.
that they “should be excused from failing to appear” because
(1) case-related documents were mailed to Ean’s address,
not defendants; (2) Ean had moved his residence and had
not received his mail; and (3) Ean was authorized only to file
the answer on defendants’ behalf, not to otherwise defend
them in this action. Because they had given Ean authority
only to file the answer, defendants argued that case-related
documents should have been mailed to them at their resi-
dence address in Wisconsin.

In support of their motion, defendants each filed
declarations stating that they did not know that Ean could
not lawfully file an answer for them. They further averred
that the authority that they had granted to Ean under the
powers of attorney extended only to filing the answer and
that they otherwise had intended to personally defend the
action. Defendants also stated that they had not received
any case-related communications from Ean, plaintiff, or the
court until Ean notified them that the judgment had been
entered. Ron also declared that he and Ean had discussed
the case weekly and that they had wondered why they
had not heard anything about the case. In addition, Ron
described a phone call in which an employee of plaintiff had
told him that she was aware that the allegations against

that the judgment should have prospective application. A motion for reasons

(a), (b), and (©) shall be accompanied by a pleading or motion under Rule 21 A

which contains an assertion of a claim or defense. The motion shall be made

within a reasonable time, and for reasons (a), (b), and (c) not more than one

year after receipt of notice by the moving party of the judgment. A copy of a

motion filed within one year after the entry of the judgment shall be served

on all parties as provided in Rule 9 B, and all other motions filed under this
rule shall be served as provided in Rule 7. A motion under this section does
not affect the finality of a judgment or suspend its operation.”

5 Defendants also generally asserted that the judgment should be set aside
due to (1) fraud, misrepresentation, or other misconduct by plaintiff in failing to
send pleadings and notices to defendants at their Wisconsin address as required
by ORCP 9; or (2) the judgment being void or voidable either because it was a
default judgment taken against defendants without notice to them under ORCP
69, or because the judgment was not supported by a finding of fact that defen-
dants owed plaintiff money, Because defendants have not developed those argu-
ments, we reject them without discussion.

pT 773

him were false. Because of that phone call, Ron stated that
he had assumed that the action would be dropped.

In a separate declaration, Ean stated that, after he
had filed the answer on behalf of his parents, he had moved
but had not notified the court or plaintiffs counsel of his
new address, although he had filed a forwarding address
notice with the post office. Ean further declared that he had
not received any case-related documents from anyone until
he received the notice of entry of judgment on July 18, 2011.
Ean also confirmed Ron’s declaration that the two had dis-
cussed the matter regularly and that they both had won-
dered why they had not received any case-related informa-
tion. According to Ean, he had assumed, like his father, that
the matter had been dropped. In addition, Ean stated that
he had had a separate account with plaintiff, that he had
charged the subject building materials to his own account,
that the materials he had purchased were not used to
improve his parents’ properties, and that his debt had been
discharged in bankruptcy.

At the hearing on their motion to set aside the
judgment, defendants focused on two arguments that were
intertwined. First, defendants argued that the judgment
should be set aside on the ground that they were excusably
unaware of the existence of the arbitration proceeding and
the subsequent general judgment on the arbitrator’s award
because they had not been properly served with case-related
documents beyond the summons and complaint.® Second,

® ORCP 9 provides, in part:

“A Service; when required. Except as otherwise provided in these rules,
every order; every pleading subsequent to the original complaint; every writ-
ten motion other than one that may be heard ex parte; and every written
request, notice, appearance, demand, offer to allow judgment, designation
of record on appeal, and similar document shall be served upon each of the
parties. No service need be made on parties in default for failure to appear
except that pleadings asserting new or additional claims for relief against
them shall be served upon them in the manner provided for service of sum-
mons in Rule 7.

“B Service; how made. Whenever under these rules service is required or
permitted to be made upon a party, and that party is represented by an attor-
ney, the service shall be made upon the attorney unless otherwise ordered
by the court, Service upon the attorney or upon a party shall be made by
delivering a copy to that attorney or party; by mailing it to the attorney’s or
party’s last known address; by electronic service as provided in section H of

174 PC

defendants asserted that the judgment should be set aside
because plaintiff's counsel had not served defendants with
case-related documents, despite knowing that Ean was
not an attorney. According to defendants, because plaintiff
knew that Ean was not an attorney, plaintiff was required
to serve all documents on defendants at their own residence
address pursuant to ORCP 9.

In response, plaintiff argued that defendants were
not entitled to relief because (1) all notices were mailed to
the address designated in the answer that defendants had
authorized Ean to file; (2) no documents that were mailed
to that address were ever returned to plaintiffs counsel,
the court, or the arbitrator, making it implausible to believe
that Ean had not received them; and (3) Ean received the
notice of entry of judgment, which indicated that he likely
had received the other notices mailed to the La Grande
address as well. Plaintiff asserted that, after the answer
was filed, plaintiff had engaged in arbitration as instructed
by the court and had complied with all applicable procedural
requirements in the case.

In denying defendants’ motion, the trial court con-
cluded that defendants had had a reasonable opportunity to
defend the action, but had failed to diligently protect their
interests. The court explained:

“Tm really not very sympathetic to [defendants’] position
*** because [defendants] were served. They chose not to
get an attorney. They chose to rely on their son. And the
matter went all the way through to arbitration. And, now,
they come in and claim a problem when they could have
solved the entire thing by getting an attorney in the first
place and jumping through all the hoops.

“To set this aside will require plaintiff[] to go back
to square one and then file it all over again, incurring
additional expense, which they could have avoided if

this rule; or, if the party is represented by an attorney, by facsimile commu-
nication or by e-mail as provided in section F or G of this rule. *** A party
who has appeared without providing an appropriate address for service may
be served by filing a copy of the pleading or other document with the court.”

po 115

[defendants] had properly got an attorney and filed the
proper response.

ef eae ae

“So, it’s not exactly a default judgment in the strictest,
in the traditional sense here. I mean, they had notice. They
were served. They went to arbitration. I mean, they chose
to have their son do it. Even though it was improper, that’s
what their choice was. So, now, they’re saying they didn’t
know. I guess I just don’t buy that.”

The court reasoned, “I mean, it was their choice not to retain
counsel, correct? Had they retained counsel, they would
have been aware of [the arbitration proceeding], wouldn’t
they, in all likelihood?” As the court saw it, “the reason they
didn’t appear [at the arbitration hearing] was they chose to
go through their son for whatever reason, rightly or wrongly.
But that was their choice.”’

On appeal, defendants argued before the Court of
Appeals that they had been mistaken in believing that Ean
could file an answer for them; that Ean’s failure to receive
notices from the court, plaintiff, and the arbitrator was
inadvertent; and that their failure to appear and defend was
excusable because they had taken steps to answer the com-
plaint, but that process failed due to their mistaken belief
that Ean could file an answer for them.

Plaintiff responded that defendants’ inaction in not
personally appearing and in not following up on the case
after the answer was filed constituted inexcusable neglect.
Further, plaintiff asserted that ORCP 9 B required it to
serve defendants at their last known mailing address—
the La Grande address—that they had designated in the
answer that Ean filed. In plaintiff's view, defendants had
directed all mailings to be sent to the La Grande address,
defendants had never notified plaintiff or the court of any
change in their address, and plaintiff, the arbitrator, and

7 When defendants’ counsel noted that defendants had intended that Ean
would only file the answer and that they would thereafter defend the matter per-
sonally, the trial court asked why defendants did not get an attorney at that
point, Defendants’ counsel answered that defendants had never heard anything
further about the proceedings. The trial court responded that nothing had pre-
vented defendants from coming to the courthouse and asking to see the court file.

T16 P|

the court had complied with defendants’ direction by mail-
ing notices to that address.

The Court of Appeals reversed the trial court’s rul-
ing. The court first concluded that defendants’ decision to
authorize Ean to file an answer to the complaint and their
failure to attend to the case and monitor its progress were
inexcusably rather than excusably neglectful; accordingly,
the Court of Appeals held that the trial court had not erred
in denying relief on the ground of excusable neglect. Union
Lumber Co., 263 Or App at 627.

However, the Court of Appeals ultimately concluded.
that relief was compelled by mistakes that plaintiff and the
arbitrator had made—namely, that, contrary to ORCP 9 B,
they had mailed prescribed notices and other case-related
documents to defendants at the La Grande address, rather
than to defendants’ residence address in Wisconsin. Id. at
629. Although the answer that Ean had filed had listed the
La Grande address as defendants’ address, it was significant
to the Court of Appeals that plaintiff had perfected substi-
tute service on Ron Miller at the Wisconsin address after
the answer had been filed. It followed, the court explained,
that defendants’ last known address was their residence
address in Wisconsin. Id. at 628. According to the Court of
Appeals, defendants’ failures to appear and participate in
the arbitration, to object to the proposed judgment, and to
seek a de novo trial under ORS 36.425(2)(a),8 were prod-
ucts of mistakes plaintiff's counsel and the arbitrator made
in failing to serve defendants with notices and other docu-
ments as required by ORCP 9 B. Id. at 627.

Moreover, the Court of Appeals determined that,
because the action had been conducted in a manner that
was inconsistent with procedural rules that require ade-
quate notice and an opportunity to be heard, setting aside
the judgment would correct significant irregularities in the
proceedings. Id. at 629. Accordingly, the Court of Appeals
concluded that the trial court had erred in failing to set

® ORS 36.425(2)(a) provides that, in a court-annexed arbitration proceeding,
a party against whom relief is granted may file a written notice of appeal and
request a trial de novo.

pT 777

aside the judgment under ORCP 71 B on the ground of mis-
take. Id.

On review, plaintiff asserts that it was appropri-
ate to treat the La Grande address identified in defendants’
answer as their “last known address” for purposes of ORCP 9.
In plaintiffs view, it would be inequitable to set aside the
judgment, inasmuch as defendants did not diligently protect
their interests in the action or provide plaintiff, the arbi-
trator, and the trial court with an updated mailing address
during the course of the litigation.

In response, defendants assert that the Court of
Appeals was correct in concluding that plaintiff's and the
arbitrator’s mistakes in failing to properly serve defendants
with case-related documents under ORCP 9 B required the
trial court to set aside the judgment. In addition, defen-
dants reiterate their core argument before the trial court
and Court of Appeals that excusable neglect justified setting
aside the judgment. We allowed review to consider the appli-
cation, insofar as they are implicated here, of the doctrines
of excusable neglect and mistake as grounds for relief under
ORCP 71 B.

Il. ANALYSIS
A. Standard of Review

As noted and as pertinent here, ORCP 71 B pro-
vides that a trial court may, “upon such terms as are just,”
grant a motion to set aside a judgment that was entered due
to “mistake, inadvertence, surprise, or excusable neglect.”®
A decision under ORCP 71 B can implicate multiple stan-
dards of review. For example, a trial court’s decision can rest
on findings of disputed fact. An appellate court will defer to
a trial court’s express or implied findings of disputed fact
underlying its legal determinations. Hiatt, 279 Or at 575;
see also Coleman v. Meyer, 261 Or 129, 135-36, 493 P2d 48
(1972). Second, the question whether a cognizable ground
for relief has been shown must be decided in accordance
with established legal principles. Rogue Val. Mem. Hosp. v.

® ‘The procedural requirements of ORCP 71 B that the motion be filed timely
and with an accompanying pleading containing a defense are not at issue in this
case. See Union Lumber Co., 268 Or App at 624.

778 PC

Salem Ins., 265 Or 603, 606, 510 P2d 845 (1973).!° Thus,
the question whether a party seeking relief from a judgment
has offered a reasonable excuse for failing—on account of
neglect, surprise, inadvertence, or mistake—to appear or
otherwise defend its interests, is a legal question that we
review for errors of law. See Hiatt, 279 Or at 576-77 (where
trial court’s excusable neglect ruling is reversed, appellate
court has made overriding legal determination as to reason-
ableness of excuse). Finally, where a trial court determines
that a cognizable ground for relief has been shown, the deci-
sion whether to grant relief requires the court to exercise
its discretion and, if it decides to grant relief, to do so on
terms that are just. Stevenson v. U.S. National Bank, 296
Or 495, 498, 677 P2d 696 (1984). In exercising such discre-
tion (again, where a cognizable ground for relief has been
established), this court has stated that “the courts are lib-
eral in granting relief, for the policy of the law is to afford
a trial upon the merits when it can be done without doing
violence to *** established rules of practice that have grown
up promotive of the regular disposition of litigation.” Wagar
v. Prudential Ins. Co., 276 Or 827, 833, 556 P2d 658 (1976)
(quoting McFarlane v. McFarlane, 45 Or 360, 363, 77 P 837
(1904)).

To summarize: Conclusions that a trial court reaches
under ORCP 71 B as to whether a moving party’s neglect,
inadvertence, surprise, or mistake constitute cognizable
grounds for relief, are legal rulings that an appellate court
reviews for errors of law. If, in the course of reaching such a
conclusion, a trial court makes express or implied findings on.
issues of disputed fact, an appellate court will accept those
findings if they are supported by evidence in the record. If
the trial court concludes that a moving party has shown a
cognizable ground for relief from the judgment, the court
must make a further discretionary decision, consistent with
principles promotive of the regular disposition of litigation,
whether and, if so, on what terms, to relieve the party from
the judgment. An appellate court reviews such a ruling for
abuse of discretion.

© Rogue Valley construed former ORS 18.160 (1979), repealed by Or Laws
1981, ch 898, § 53, which was substantially identical to ORCP 71.

Po 179

As noted, defendants in this case argue that the
judgment should be set aside under ORCP 71 B(1) based on
multiple overlapping grounds. In general, defendants’ argu-
ments before the trial court and on appeal and review have
conflated the grounds of mistake, inadvertence, surprise,
and excusable neglect, and have treated those terms inter-
changeably. Cf. Terlyuk v. Krasnogorov, 237 Or App 546, 551
n 3, 240 P3d 740 (2010) (moting that motions to set aside
judgments simply cited “mistake, inadvertence, surprise or
excusable neglect” and conflated that phrase as though it
was one word). That said, reasonably understood, defendants
have essentially argued throughout that any omissions on
their part constituted excusable neglect or were mistakes
and that errors that plaintiff, the arbitrator, and the trial
court made in serving them with case-related documents
required relief from the judgment. Accordingly, for purposes
of our review, we conclude that defendants have adequately
raised and developed arguments based on two grounds for
relief under ORCP 71 B: Excusable neglect and mistake. We
now address those arguments.

B. Excusable Neglect

Defendants assert that their failure to adequately
protect their interests in this action was due to excusable
neglect because, although they took steps to answer the
complaint, that process failed on account of their errone-
ous belief that Ean had legal authority to file an answer
for them, and because they reasonably assumed that notices
and pleadings would be mailed to them or to Ean and that
Ean’s failure to receive his mail was excusable. Although
not precisely on point (because an answer actually was filed
in this action), those arguments are similar to arguments
that other defendants have made in cases where they either
took steps or had procedures in place to respond to service
of a summons and complaint, but the process failed and a
default judgment was taken against the defendants for fail-
ure to appear.

For example, in Wagar, 276 Or 827, the defendant’s
agent for service of process in Oregon was served with sum-
mons and complaint; on the same day, the agent mailed the
summons and complaint to the defendant’s legal department

780 Ld

in Los Angeles for assignment to defense counsel in Oregon.
The summons and complaint never arrived in the defen-
dant’s legal department, however, and the defendant was
unaware that the complaint had been filed until after a
default judgment was entered. At the hearing on the defen-
dant’s motion to set aside the default judgment, an attorney
from its legal department testified that the defendant’s sys-
tem for responding to legal actions had not failed in almost
20 years. The trial court, however, concluded that the mail-
ing by defendant’s agent of the summons and complaint by
ordinary mail, without any follow up procedure, constituted
inexcusable neglect. On review, this court held that the trial
court had erred in denying the motion to set aside the judg-
ment because, although mail service is imperfect, it was the
method on which society relied, and the defendant had pro-
ceeded in a reasonable manner to protect its interests. Id. at
833.

In another case, Lowe v. Institutional Investors
Trust, 270 Or 814, 529 P2d 920 (1974), service was made
on an assistant to the defendant’s executive vice president.
The assistant stated in an affidavit that he routinely for-
warded legal documents served on him to the defendant’s
legal department with an explanatory memorandum, plac-
ing a copy of the memorandum in his files. However, he had
no recollection of receiving service in the action at hand and
had found no record of it in his files. In those circumstances,
this court held that the trial court had not erred in denying
a motion to set aside the default judgment. Id. at 819.

In contrast to Lowe, in Hiatt, 279 Or 569, the defen-
dant’s mailroom employee received the summons and com-
plaint. His instructions were to forward any legal documents
to the legal department, which he usually did. In that case,
however, the legal department did not receive the summons
and complaint, and the mailroom employee had no mem-
ory of receiving process, so he was unable to explain what
had happened. Noting that that explanation was plausible,
this court concluded that those facts amounted to excus-
able neglect as a matter of law and reversed the trial court’s
denial of the motion to set aside the judgment. Id. at 577. In
so concluding, this court distinguished Lowe because that
case involved personal service on a corporate executive

po 781

whose duties included acting as the corporate agent to
receive service of process. Id. at 578.

Wagar, Lowe, and Hiatt illustrate that reasonable
but ineffectual actions taken in response to service of pro-
cess may establish excusable neglect. See McFarlane, 45 Or
at 363 (if moving party presents “reasonable grounds excus-
ing *** default,” courts generally grant relief). It was rea-
sonable in Wagar for the defendant to follow its established
practices and use the mail system, which was the means
of communication generally relied on in broader society.
And, it was reasonable in Hiatt for the defendant to rely
on a mailroom employee to forward legal documents to the
legal department. In Lowe, however, it was not reasonable
for the defendant’s corporate executive who was responsible
for receiving service to lose the summons and complaint and
not retain any record of them.

Although those cases each involved default judg-
ments and corporate defendants, the principle of reason-
ableness that they illustrate also applies in this case, where
defendants’ ultimate failure to appear and defend was analo-
gous to a default. Any actions taken or omitted by defen-
dants must have been reasonable to show that their neglect
was excusable.

As noted, defendants argue that they reasonably
assumed that notices and pleadings would be mailed to
them or to Ean and that Ean’s failure to receive his mail
was excusable. And, as further noted, in affidavits support-

* ing defendants’ motion, Ron and Ean both asserted that
they had discussed the case weekly and had wondered why
they had not received further information. Defendants and
Ean also stated that they had not received any case-related
documents from the court, plaintiff, or the arbitrator before
Ean received the notice of entry of judgment.

The trial court, however, concluded as a matter
of law both that defendants’ choice to rely on their son—a
nonlawyer who had no legal authority to represent them—to
protect their interests was not reasonable and that Ean’s
failure to receive case-related documents by mail was not
excusable. As to the first point, although defendants claimed.
that they had authorized Ean only to file an answer for them

782 PE

but otherwise had intended to defend the action themselves,
the trial court further concluded that defendants had failed
to exercise reasonable diligence by not contacting the court
or plaintiffs attorney to ascertain the status of the action.
Although Ron Miller stated that he had talked to one of
plaintiff's employees and had assumed that the case would
be dropped, the trial court concluded that it was unreason-
able for defendants not to have contacted the court or plain-
tiffs attorney to ascertain the status of the case.

In reaching the legal conclusion that defendants’
choice to rely on their son was unreasonable, the trial court
did not err. Although defendants had a right to proceed
pro se in defending the action, their choice to use Ean to file
an answer on their behalf and to allow him to designate his
own address as theirs, together with their failure to contact
the court or plaintiff's attorney to ascertain the status of the
case after the answer was filed, were particularly unreason-
able in light of the length of time—nearly 11 months—that
transpired between the filing of their answer (August 30,
2010) and Ean’s receipt of the notice of entry of judgment
(July 18, 2011)." See Coleman, 216 Or at 185 (“hardly cred-
ible” that a defendant would not contact attorney for over
four months if the defendant believed that attorney was
handling matter).

As to defendants’ argument that neither they nor
Ean had received any case-related documents from plain-
tiff or the court, evidence in the record supported the trial
court’s finding that “I guess I just don’t buy that.” In view
of the fact that Ean acknowledged having received the
notice of entry of the general judgment that was mailed to
the La Grande address, the trial court reasonably inferred
that, despite their denials, Ean and defendants likely had
in fact received earlier case-related documents sent by mail
to the same address and had ignored them. See id. at 135-
36 (uncontradicted statements in the defendants’ affidavits
that they did not realize default could be taken against them
did not have to be taken at face value where defendants’

™ Moreover, Ron Miller was served with summons and complaint by sub-
stituted service in November 2010, so defendants knew that the matter had not
been dropped at that point in time.

Po 783

interest in litigation may tempt them to testify falsely); see
also Hiatt, 279 Or at 576.

Based on the facts that it found, the trial court did
not err in concluding, as a matter of law, that defendants’
neglect in failing to protect their interests was inexcusable.
It follows that the court did not err in denying defendants’
motion to set aside the general judgment on the ground of
excusable neglect.

C. Mistake.

We turn to defendants’ argument that the judgment
should have been set aside on the ground of mistake because
they erroneously had believed that their son—a layperson—
had legal authority file an answer for them.” This court has
not often addressed mistake as a ground for setting aside
a judgment under ORCP 71 B(1). In cases where this court
has concluded that a judgment should be set aside due to
mistake, however, the moving party invariably had taken
reasonable steps to protect its interests. See, e.g., Newbern v.
Gas-Ice Corporation, 263 Or 250, 254, 501 P2d 1294 (1972)
(holding that trial court did not err in setting aside judgment
where attorney mistakenly but reasonably believed motion
for judgment on pleadings pertained to different action
between same parties when he stated that plaintiff would
not contest motion); Federal Reserve Bank of S.F. v. Weant,
113 Or 1, 4-5, 231 P 134 (1924) (holding that trial court
erred in denying motion to set aside judgment where defen-
dant failed to appear due to mistaken but reasonable belief
that separate bankruptcy proceeding terminated plaintiff's
right to proceed with foreclosure); McFarlane, 45 Or at 363-
65 (holding that trial court erred in denying motion to set
aside default judgment where attorney made mistake of law
by specially appearing to challenge jurisdiction, but did not
file answer, because strategic course that attorney pursued
was only way to present questions vital to defense).

In this case, the trial court concluded as a matter
of law that defendants’ failure to diligently protect their
interests precluded relief from the judgment. We agree. As

2 As elaborated below, the Court of Appeals reversed the trial court’s ruling
on the ground of mistake, albeit based on a somewhat different theory of mistake
than the one that defendants have argued throughout this case.

784 LO

discussed, defendants did not contact the court or plaintiff's
attorney to ascertain the status of the case during the 11
months between the filing of the answer and when they
received notice of entry of judgment. Nor did defendants pro-
vide plaintiff, the trial court, or the arbitrator, with a differ-
ent mailing address from the one that Ean had designated
for them in the answer that he filed. In sum, irrespective of
defendants’ erroneous belief that their son could represent
them, defendants did not take other reasonable steps that
would have protected their interests. Under those circum-
stances, the trial court did not commit legal error in denying
the motion to set aside the judgment based on the purported.
mistake on which defendants have relied.

Nevertheless, the Court of Appeals concluded that
the judgment must be set aside due to a different set of mis-
takes. In the Court of Appeals’ view, the judgment should
have been set aside because notices and other case-related
documents were not mailed to defendants’ “last known
address” as required by ORCP 9 B. Although defendants did
not specifically couch such an argument in terms of mis-
take before the trial court, as noted, defendants did com-
plain about the mailing of case-related documents to the
La Grande address, rather than to their residence address
in Wisconsin.* Because, broadly interpreted, defendants’
arguments before the trial court could be understood as
asserting that mailing errors made by plaintiff and the arbi-
trator qualified as cognizable mistakes under ORCP 71 B,
we address the rationale on which the Court of Appeals
reversed the trial court’s ruling.“

In their brief and at oral argument, defendants stated that plaintiff's
alleged failure to properly serve them under ORCP 9 B should be characterized
as fraud, misrepresentation, or misconduct pursuant to ORCP 71 B(1)(c), rather
than mistake under ORCP 71 B(1)\(a). Nothing in the record suggests any such
intentional misconduct on the part of plaintiff.

¥ This court previously has held that a mistake under ORCP 71 Bneed not be
made by the moving party. State v. Ainsworth, 346 Or 524, 583-84, 213 P3d 1225
(2009) (“Under [former] ORS 18.160[ (1979)], a court could ‘relieve a party from a
judgment *** taken against him through his mistake, inadvertence, surprise or
excusable neglect’ ORCP 71 B, in contrast, permits a trial court to relieve a party
from judgment based on ‘mistake, inadvertence, surprise, or excusable neglect?
without regard to who made the mistake (or other error) and without regard to
whether judgment was taken ‘through’ that mistake (or other error).” (Emphasis
in original.)).

Po

Because the Court of Appeals’ decision depended on
its understanding of the meaning of ORCP 9 B, we review that
court’s construction of the rule as a matter of law. See Russell
v. Sheahan, 324 Or 445, 449, 927 P2d 591 (1996). As noted,
ORCP 9 B requires case-related documents to be mailed to
an unrepresented party’s “last known address.” To deter-
mine the meaning of that phrase in a rule such as ORCP 9
that was promulgated by the Council on Court Procedures,
we examine the text, context, and history of the rule to dis-
cern the intent of the Council on Court Procedures.” A. G.
v. Guitron, 351 Or 465, 479, 268 P3d 589 (2011). Nothing in
the text or context of ORCP 9 specifies how a party serv-
ing case-related documents is to determine the “last known
address” of another party. But the phrase consists of words
of common usage, to which we ascribe their ordinary mean-
ings. PGE v. Bureau of Labor and Industries, 317 Or 606, 611,
859 P2d 1143 (1993). The word “last” means “most recent.”
Webster’s Third New Int'l Dictionary 1274 (unabridged ed
2002) (defining “last” as, inter alia, “most recent”). “Known”
means “that is apprehended or perceived by the mind or
senses.” Id. at 1253. That term is broad enough to encom-
pass knowledge acquired from any source. In the realm of
civil litigation, the most common source of knowledge of a
party’s address ordinarily is notice that the party provides
to the court and other parties. See, e.g., UTCR 2.010(14)
(providing that a “self-represented party whose court con-
tact information changes must immediately provide notice
of that change to the trial court administrator and all other
parties”). Finally, as pertinent here, “address” means “the
designation of a place (as a residence or place of business)
where a person or organization may be found or commu-
nicated with.” Webster’s at 25. Thus, a party’s last known
address under ORCP 9 B must be a particular location, but
that location is not limited—either by the text or context of
the rule—to the party’s residence address. Cf, ORCP 7 D(4)
(a)Gi)(A) (authorizing service by mail in motor vehicle acci-
dent cases at “any residence address provided by that defen-
dant at the scene of the accident” (emphasis added)). In sum,
the last known address of a party for purposes of ORCP 9B

18 We note that neither party has offered a statutory construction analysis of
ORCP 9 to ascertain the meaning of the term “last known address.”

786 LC

is the most recent place at which another party knows that
the party can be found or communicated with.

That common-sense meaning is supported by the
history of ORCP 9. That rule was promulgated by the Council
on Court Procedures in 1978 and modeled after FRCP 5 and
Rhode Island Rule of Civil Procedure 5, which described
the same practice generally followed in Oregon at the time.
Council on Court Procedures, 4 Legislative History Relating
to Promulgation of Oregon Rules of Civil Procedure (1/1/78
through 12/31/78), Jane 28, 1978 Draft and Proposed
Comment to Rule 6, 33 (1979). Oregon’s previous procedural
requirements for service by mail were codified in former
ORS 16.790 (1977), which was replaced by ORCP 9. Council
on Court Procedures, Staff Comment to Rule 9, reprinted
in Frederic R. Merrill, Oregon Rules of Civil Procedure: A
Handbook 28-29 (1981). Former ORS 16.790 (1977) provided
for service by mail to a party’s “regular office address, or
[the party’s] address as last given by [the party] on any doc-
ument which [the party] has filed in the cause and served on
the party making service by mail.” If the party did not main-

tain a regular office or if the party’s filed documents did not
specify an address, service by mail could be accomplished at
the party’s usual place of abode. Former ORS 16.790 (1977).

It is notable that former ORS 16.790 (1977) expressly
provided that a party’s address for purposes of mailing
case-related documents could be the address last given in
the party’s filed submissions. Because the Council on Court
Procedures intended for ORCP 9 to generally follow Oregon’s
then-current procedures for service by mail, the address
that a party includes in pleadings filed with the court
can be the party’s “last known address” under ORCP 9 B.
That is particularly true where, as in this case, pursuant to
court rule, an unrepresented party is required to keep the
trial court advised in writing of the party’s current mailing
address. See UTCR 2.010(14); see also Union and Wallowa
Circuit Court Supplementary Local Rule (SLR) 2.012(2).
In this case, plaintiff, the arbitrator, and the court mailed
pleadings and notices to the La Grande address that was
last provided as “defendants’ address” in the answer that
Ean filed pursuant to the powers of attorney that defendants

Po 787

had executed. That address was the only address that defen-
dants or Ean ever provided to plaintiff, the arbitrator, and
the trial court."

It is true, as the Court of Appeals pointed out,
that Ron Miller was served with summons and complaint
at defendants’ residence in Wisconsin after Ean filed the
answer designating the La Grande address as defendants’
mailing address. However, irrespective of the address pro-
vided in the answer, plaintiff was required to perfect sub-
stituted service of summons and complaint on Ron Miller at
his residence address. See ORCP 7 D(2)(b).!’ ORCP 7 D(2)(b)
permits substituted service of summons and complaint at a
person’s “dwelling house or usual place of abode.” Plaintiff's
compliance with that requirement did not necessarily mean
that defendants’ residence address for purposes of substi-
tuted service of summons and complaint was their “last
known address” for purposes of ORCP 9 B. The comment
to Rule 9 indicates that that rule governs the “serving and
filing of papers subsequent to the summons and original
complaint.” Council on Court Procedures, Staff Comment to
Rule 9, reprinted in Merrill, Oregon Rules of Civil Procedure:
A Handbook at 28-29. In the answer that defendants autho-
rized Ean to file, defendants designated the La Grande
address as their address for purposes of serving them with
post-summons and complaint documents under ORCP 9,
even though their residence address in Wisconsin was the

% Tt bears emphasis that, in their declarations, defendants stated that they
had not heard anything from Ean, the court, or plaintiff, until Ban informed
them that the judgment had been entered. If they had not expected that case-
related documents would be sent to the La Grande address, they would not have
had any reason to expect Ean to receive case-related documents for them.

* ORCP 7 D(2)(b) allows for substituted service and provides:

“Substituted service may be made by delivering true copies of the sum-
mons and the complaint at the dwelling house or uswal place of abode of the
person to be served to any person 14 years of age or older residing in the
dwelling house or usual place of abode of the person to be served. Where
substituted service is used, the plaintiff, as soon as reasonably possible, shall
cause to be mailed by first class mail true copies of the summons and the com-
plaint to the defendant at defendant’s dwelling house or usual place of abode,
together with a statement of the date, time, and place at which substituted
service was made. For the purpose of computing any period of time prescribed
or allowed by these rules or by statute, substituted service shall be complete
upon the mailing.”

(Emphasis added.)

788 LO

proper address for substituted service of summons and com-
plaint. In doing so, defendants designated the La Grande
address as their “last known address” for purposes of ORCP
9B.

Defendants have not drawn our attention to any
principle—and we are aware of none—that prevented them
from designating the La Grande address as such through
their attorney in fact, irrespective of his lack of authority to
represent them as an attorney at law in this action. Under
the presenting circumstances, we conclude as a matter of
law—based on our construction of ORCP 9 B—that plain-
tiff and the arbitrator did not make mistakes within the
contemplation of ORCP 71 B(1) by mailing post-summons
and complaint case-related documents to defendants at the
La Grande address.

Even if that were not so, though, we cannot ignore
the role that defendants played in facilitating the pur-
ported mistakes on which the Court of Appeals relied. If the
La Grande address had not been designated in defendants’
answer, the only address that plaintiff, the arbitrator, and
the court would have had for defendants would have been
the address where service of summons and complaint was
perfected in Wisconsin. However, defendants authorized
and directed Ean to file the answer on their behalf, and
that answer designated the La Grande address as defen-
dants’ address. Defendants do not contend that they were
unaware that Ean made that designation, nor do they con-
tend that they ever took any steps to change that designa-
tion. In short, even if plaintiff, the circuit court, or the arbi-
trator were mistaken in treating the La Grande address as
defendants’ last known address, defendants were complicit
in those mistakes. Therefore, we conclude that, even if the
La Grande address had not been defendants’ last known
address for purposes of ORCP 9 B, the trial court would not
have abused its discretion in denying defendants’ motion
to set aside the judgment based on the theory of mistake
on which the Court of Appeals relied. See King v. Mitchell,
188 Or 434, 441, 214 P2d 993 (1950) (“‘If the moving party
makes a clear and unquestionable showing that he has a
good defense or cause of action on the merits, of the benefit
of which he has been deprived without fault on his part, the

ee)

court has no discretion to deny him relief, and should it do
so, its action will be set aside, and proper relief ordered by
the appellate court.” (Quoting A.C. Freeman, 1 A Treatise
on the Law of Judgments § 291, 578 (5th ed 1925) (emphasis
added)).

In sum, we conclude that (1) the trial court did not
commit legal error in concluding that defendants were not
entitled to relief from the judgment in this action on the
grounds of excusable neglect and mistake on which defen-
dants relied; (2) the Court of Appeals erred in concluding
based on ORCP 9 B that plaintiff and the arbitrator mis-
takenly failed to mail case-related documents to defendants’
last known address; (3) even if case-related documents
mistakenly had not been mailed to defendants’ last known.
address under ORCP 9 B, the trial court would not have
abused its discretion in denying defendants’ motion based
on their complicity in and facilitation of those mistakes; and
(4) the trial court therefore did not err in denying defen-
dants’ motion to set aside the judgment.

The decision of the Court of Appeals is reversed. The
order of the circuit court denying defendants’ motion to set
aside the general judgment and the supplemental judgment
awarding costs and attorney fees to plaintiff are affirmed.

791

Argued and submitted September 19, 2016; decision of Court of Appeals
reversed, judgment of circuit court reversed, and case remanded to circuit court
to award attorney fees in accordance with this opinion February 2, 2017

Cary LONG,
Petitioner on Review,
v

FARMERS INSURANCE
COMPANY OF OREGON,
Respondent on Review.

(CC 12023950; CA A156674; SC S063701)
388 P3d 312

792 Po

Calvin P. Vance, Law Office of Calvin Vance, Spokane,
Washington, argued the cause and filed the brief for peti-
tioner on review. Also on the brief was Kristian Roggendorf,
Roggendorf Law LLC, Lake Oswego.

Francis J. Maloney, Maloney Lauersdorf Reiner PC,
Portland, argued the cause and filed the brief for respondent
on review. Also on the brief was Janis C. Puracal.

Charles Robinowitz, Law Offices of Charles Robinowitz,
Portland, filed the brief on behalf of amicus curiae Oregon
Trial Lawyers Association.

Before Balmer, Chief Justice, and Kistler, Walters, Landau,
Baldwin, and Brewer, Justices, and Sercombe, Judge of the
Court of Appeals, Justice pro tempore.**

WALTERS, J.

The decision of the Court of Appeals is reversed. The
judgment of the circuit court is reversed, and the case is
remanded to the circuit court to award attorney fees in
accordance with this opinion.

** Nakamoto, J., did not participate in the consideration or decision of this
case.

pT
WALTERS, J.

ORS 742.061 requires an insurer to pay its insured’s
attorney fees if, in the insured’s action against the insurer,
the insured obtains a “recovery” that exceeds the amount
of any tender made by the insurer within six months from
the date that the insured first filed proof of a loss. In this
case, we decide that, when an insured files an action against
an insurer to recover sums owing on an insurance policy
and the insurer subsequently pays the insured more than
the amount of any tender made within six months from the
insured’s proof of loss, the insured obtains a “recovery” that
entitles the insured to an award of reasonable attorney fees.

Although the parties dispute many of the facts in
this case, the facts that are essential to our review are not
disputed. On December 20, 2011, plaintiff discovered a leak
under her kitchen sink, which had caused extensive damage
to her home, and filed a claim with her insurer, Farmers
Insurance Company of Oregon (Farmers). On January 17,
2012, Farmers voluntarily paid plaintiff a sum that it deter-
mined constituted the actual cash value of plaintiff's losses
less a deductible—the sum of $3,300.45. At around that
time, it also paid plaintiff $2,169.22 in mitigation expenses.
On January 17 and 31, 2012, plaintiff submitted to Farmers
a proof of loss that included estimates of her mitigation costs
and the actual cash value of her losses that far exceeded
the sum that Farmers had paid her. Because plaintiff had
not yet replaced any of the damaged items, she did not, at
that time, submit a proof of loss that included the replace-
ment cost of her losses. A year later, the parties had not
resolved plaintiff's claim, and in January 2013, plaintiff ini-
tiated this action. In her complaint, plaintiff alleged, among
other things, that Farmers had not paid the sums due
under her policy of insurance and had failed to submit to an
appraisal process that she had demanded. In its answer to
plaintiff's complaint, Farmers admitted that plaintiff was
entitled to appraisal under the terms of the policy, and the
trial court ordered the parties to submit to and complete
the appraisal process by July 22, 2013. After the appraisal
process was completed, Farmers made two additional vol-
untary payments to plaintiff. Farmers paid plaintiff the

794

sum of $2,467.09 on July 11, 2013, and the sum of $4,766.80
on August 14, 2013. Those sums reflected the actual cash
value that appraisers had assigned to certain of plaintiff's
claimed losses—the losses for which Farmers did not dispute
coverage—as well as the appraisers’ assessment of plain-
tiff’s mitigation costs.

Six months later, in February 2014, shortly before
trial, plaintiff submitted proof of loss for the replacement,
cost of her losses. Three days later, Farmers voluntarily paid
plaintiff a sum that it determined constituted the replace-
ment cost of plaintiffs undisputed losses - $4,214.18. The
trial began the next day and was limited to issues that
remained in dispute after Farmers’ payments. In the end,
plaintiff did not recover an amount that was greater than
the amount that Farmers had paid, in total, before the
trial had begun, and the trial court entered judgment for
Farmers. Nevertheless, plaintiff filed a petition for attorney
fees under ORS 742.061. Plaintiff argued that the require-
ments of the statute had been satisfied because she had filed
an action against Farmers and thereafter had obtained a
greater sum from Farmers than it had tendered within six
months after she had submitted her initial proof of loss.
Plaintiff argued that the voluntary payments that Farmers
had made after she filed this action constituted a “recovery”
within the terms of the statute. The trial court denied plain-
tiffs petition: It agreed with Farmers that, to constitute a
“recovery,” an insured must obtain a judgment that exceeds
a timely tender.

Plaintiff appealed, and the Court of Appeals affirmed
without opinion. Long v. Farmers Ins. Co. of Oregon, 273 Or
App 821, 362 P3d 1215 (2015). We allowed plaintiff's peti-
tion for review to consider the attorney fee issue that we
have outlined.! We begin our analysis with the controlling
statute—ORS 742.061(1), which provides, in part:

“Except as otherwise provided in subsections (2) and (3) of
this section, if settlement is not made within six months

1 In her petition for review, plaintiff also sought review of two other trial
court rulings. Although we allowed review of those rulings, we do not discuss
them; plaintiff's arguments lack merit, and a discussion would not benefit bench
or bar.

Po 795

from the date proof of loss is filed with an insurer and an
action is brought in any court of this state upon any policy
of insurance of any kind or nature, and the plaintiffs recov-
ery exceeds the amount of any tender made by the defen-
dant in such action, a reasonable amount to be fixed by the
court as attorney fees shall be taxed as part of the costs of
the action and any appeal thereon.”

(Emphasis added.)

The parties both offer interpretations of the stat-
ute that support their respective positions and that focus
on the meaning of the term “recovery.” Plaintiff argues that
the term “recovery” refers to any kind of restoration of a
loss, including a voluntary payment of a claim made after
an action on an insurance policy has been filed. Under that
interpretation, all that matters is that, after filing an action
on an insurance policy, the insured obtains more from the
insurer—whether through judgment, settlement, voluntary
payment, or some other means—than the insurer tendered
in the first six months after proof of loss. Farmers argues
that, in the context of the statute, “recovery” means a money
judgment in the action in which attorney fees are sought.
Under that interpretation, attorney fees may be had for
an insured’s action on a policy only if the insured obtains
a money judgment that exceeds any tender made by the
insurer within the first six months after the insured offers
proof of loss.

Resolution of the dispute is a matter of statutory
interpretation, a process that involves examination of the
applicable statute’s text and context, along with any useful
legislative history. State v. Gaines, 346 Or 160, 171-72, 206
P3d 1042 (2009). We agree with the parties that the most
germane part of the statutory text is the term “recovery.”
At all times that are relevant to the present discussion, the
word “recovery” has had both a specific, legal meaning and
amore general meaning. When the original version of what
is now ORS 742.061 was first enacted in 1919, “recovery”
could mean “the obtaining in a suit at law of a right to some-
thing by a verdict, decree or judgment of court,” but it could
also refer simply to the “act of recovering: act of regaining
or retaking possession.” Webster’s New Int'l Dictionary of
the English Language 1785 (1910 ed). Although some more

796 Po

modern dictionary definitions of the term “recovery” ignore
the more general meaning, those same dictionaries define
the root term “recover” as, among other things, “to get or
win back,” “to make good the loss, injury or cost of: make up
for.” Webster’s Third New Int'l Dictionary 1898 (unabridged
ed 2002). See also Black’s Law Dictionary 1280 (7th ed 1999)
(defining “recovery” as “1. The regaining or restoration of
something lost or taken away. 2. The obtaining of a right to
something (esp. damages) by a judgment or decree. 3. An
amount awarded or collected from a judgment or decree.”).?
In light of those varying definitions, the legislature’s choice
of the word “recovery,” is not, by itself, determinative.

Farmers argues, however, that other aspects of the
statute support its interpretation. Given that “recovery”
occurs in the context of a statement about a legal action (“and
an action is brought in any court of this state”), Farmers
contends that the legislature used that term in its more spe-
cific legal sense, i.e., an amount awarded by decree or judg-
ment. Supporting that interpretation, Farmers contends, is
the fact that the statute directs that “a reasonable amount
to be fixed by the court as attorney fees shall be taxed as
part of the costs of the action,” if the plaintiff's “recovery”
exceeds any timely tender. The allowance of costs, includ-
ing attorney fees, is and always has been associated with
the issuance of a judgment. See, e.g., Oregon Laws, title I,
ch VI, §§ 561, 562 (1920) (“there may be allowed to the pre-
vailing party in the judgment or decree certain sums ***
for his attorney fees”; “Costs are allowed, of course, to the
plaintiff upon a judgment in his favor”); ORCP 68 B (costs
shall be allowed to the “prevailing party”); ORS 20.080 to
20.096 (various provisions for award of attorney fees to “pre-
vailing party”); ORS 20.077 (identifying prevailing party
as “party who receives a favorable judgment or arbitration
award on. the claim”). We agree that those contextual clues
suggest that the legislature may have had money judgments
in mind when it required the insured’s “recovery” to exceed.
the amount of any timely tender made by the insurer.

2 On the other hand, the 1910 version of Black’s described the term as, “in its
most extensive sense” involving a “restoration or vindication of a right *** by the
formal judgment or decree of a competent court,” Black’s Law Dictionary 1000-
001 (2d ed 1910).

pT 797

That is only the beginning of our contextual analy-
sis, however. We also consider as context the enactment his-
tory of ORS 742.061 and the meaning that this court has
ascribed to it in its earlier cases. See Krieger v. Just, 319
Or 328, 336, 876 P2d 754 (1994) (considering statutory pre-
decessor as context); Liberty Northwest Ins. Corp., Inc. v.
Watkins, 347 Or 687, 692, 227 P3d 1134 (2010) (requiring
consideration of court’s previous cases as statutory context).

We begin with Farmers’ argument that a differ-
ently worded predecessor to ORS 742.061 demonstrates that
the term “recovery” means “judgment.” That version of the
statute provided, in part:

“Whenever any suit or action is brought in any of the courts
of this state upon any policy of insurance of any kind or
nature whatsoever, the plaintiff, in addition to the amount
which he may recover, shall also be allowed and shall
recover as part of said judgment, such sum as the court or
jury may adjudge to be reasonable as attorney’s fees in said
suit or action; *** provided, that settlement is not made
within six months from the date of proof of loss is filed with
the company; provided further, that if a tender be made by
a defendant in any such suit or action and the plaintiff's
recovery shall not exceed the amount thereof, then no sum
shall be recoverable as attorney’s fees.”

Or Laws 1927, ch 184, § 1 (emphasis added).? Farmers
argues that, by referring to the amount that plaintiff may
“recover” and then to “said judgment,” the original statute
suggests some equivalency between the two terms. There
are two problems with that argument. First, the statute
does not appear to contemplate that a plaintiff's “recovery”
necessarily will already exist as a judgment at the time
that an attorney fee decision is made. Rather, it appears to
refer to a money award (or right thereto) that would later be
included in a judgment that also provides for attorney fees.
A range of items might qualify as a “recovery” under that
latter meaning.

® The statute originally was enacted in 1919, in words that are identical to
those quoted above, except that they provided for an eight month, rather than a
six month, period for settlement. Or Laws 1919, ch 110, § 1. The change to the
six-month period for settlement occurred in 1927. Or Laws 1927, ch 184, § 1.

798 Po

Second, it is not clear that the statute’s amendment.
to eliminate reference to “said judgment” cuts in Farmers’
favor. On the one hand, one might argue that the connec-
tion between a plaintiff's “recovery” and “said judgment” in
the earlier version of the statute informs the meaning of the
term “recovery” in the modern version. But one also could
argue that the elimination of the word “judgment” in the
modern version suggests a specific intent by a later legisla-
ture to reject any former connection between the two terms.
Again, the statute remains ambiguous.

We turn next to the parties’ contextual arguments
based on this court’s prior decisions interpreting ORS
742.061. The parties draw our attention to three cases.
Farmers points to McGraw v. Gwinner, 282 Or 393, 400, 578
P2d 1250 (1978)—in particular, to a statement in that case
that “to secure attorney fees pursuant to [ORS 742.061’s
predecessor] the insured must recover a money judgment
against the insurer.” (Emphasis added.) McGraw was a
case in which an insured negligently injured a third party,
who then sued the insured for damages. The insured’s lia-
bility insurance carrier refused to defend the insured in
that action, and the insured filed a declaratory judgment
action, seeking a declaration that the insurer was obligated
to defend the insured and pay a judgment up to the limits
of the policy. The trial court granted the declaratory relief
that the insured sought, but, insofar as the insured had not
sought any monetary relief, there was no money judgment.
The question presented was whether the insured, never-
theless, could obtain an award of attorney fees under the
statutory predecessor to ORS 742.061. Id. at 395. The court
reviewed its prior decisions applying that statute in declar-
atory judgment actions and explained that it had distin-
guished between declaratory judgment proceedings in which
the insured had obtained a declaration of coverage and those
in which the insured had received a monetary “recovery”; it
had held that the statute applied in the latter circumstance,
but not in the former. In McGraw, the plaintiff had neither
sought nor obtained a monetary “recovery”; and the court
therefore held that the statute was inapplicable. Id. at 396-
400. In explaining that decision, the court did state that,
to secure fees under that statute, the insured must recover

po 799

a “money judgment” against the insurer, but it then com-
pleted that sentence by saying that, “it is not sufficient that
the insured establish coverage which may in turn lead to
a subsequent recovery of money.” 282 Or at 400 (emphasis
added). The form of the monetary recovery was not the issue
presented in the case. Thus, although the court’s reference
to a money judgment provides some support for Farmers’
position, its reasoning does not squarely address the issue
before us.

Two cases that plaintiff cites, Dockins v. State
Farm Ins. Co., 329 Or 20, 985 P2d 796 (1999), and Dolan
v. Continental Casualty Co., 133 Or 252, 289 P 1057 (1930),
also are not definitive. In Dockins, the insureds filed a
complaint against their insurer for failure to defend them
in an administrative action brought by DEQ after oil was
discovered leaking from their home oil tank. Six months
after filing their action, the insureds sent a proof of loss to
the insurer that met the formal proof of loss requirements
set out in the insurance policy. About three months after
that, the parties settled for $15,000, reserving the ques-
tion of whether the insured was entitled to attorney fees. A
stipulated order and judgment to that effect followed. The
insureds then petitioned for an award of attorney fees under
“ORS 742.061. When settlement was made, more than six
months had elapsed from the date that the insureds had
filed their complaint, but less than six months had elapsed
from the date that the insureds had filed their formal proof
of loss. The trial court denied the insured’s petition for
fees, but this court reversed. The court reasoned that the
insured’s complaint served the purpose of a proof of loss in
the context of the statute: it permitted the insurer to esti-
mate its obligations. Id. at 28. Thus, the court concluded, the
insurer’s settlement offer, made more than six months after
the filing of the complaint, was not timely, and only a timely
tender could defeat the insured’s claim for attorney fees. Id.
at 26-30.

Plaintiff interprets Dockins to mean that, other
than the insured’s receipt of an amount that exceeds the
amount previously tendered, whether or not the tender
was timely is the only thing that determines an insured’s

800 po

claim for attorney fees. As such, she concludes, there can
be no additional requirement that the insured’s recovery be
in the form of a judgment. But Dockins stands for no such
thing. The form of the insured’s “recovery” was not at issue
in Dockins, and the recovery that the insured obtained in
that case ultimately came in the form of a judgment (albeit
a stipulated judgment entered after the parties entered into
a settlement agreement). Dockins does not resolve the issue
before us.

Dolan, a case decided under the statutory prede-
cessor to ORS 742.061, is much the same. Although plain-
tiff describes that case as one in which attorney fees were
awarded in the absence of a judgment, that description is
not entirely accurate. In the original trial of the case, the
insured obtained a judgment for sums due under an insur-
ance policy and for attorney fees under the predecessor
to ORS 742.061. On appeal, however, that judgment was
reversed, and the case was remanded for retrial. Before the
retrial, the insurer filed an amended answer in which it con-
fessed its liability for the amount of the claim plus costs, but
not for the attorney fees that the insured had been awarded,
and tendered that amount to the court. The insurer then
moved for judgment on the pleadings and, over the plain-
tiff’s objection, the trial court granted the motion. 183 Or
at 253-55. The insured appealed again, and the insurer
argued that its tender to the court precluded an award of
fees; the insured would not recover more than the amount
that the insurer had tendered. This court concluded other-
wise. Considering the statutory definition of “tender” in a
related statute and the legislative intent underpinning the
statute, the court concluded that the insurer’s untimely con-
fession of liability and tender into court did not deprive the
insured of the right to fees. Id. at 254-56. The question of
whether an insured’s recovery must be in the form of a judg-
ment did not figure in the court’s analysis.

Although Dockins and Dolan did not expressly
address, and therefore do not stand for, the proposition for
which plaintiff contends—that an insured need not obtain a
judgment as a precondition to an award of fees under ORS
742.061—they nevertheless provide other helpful statutory
context. First, they demonstrate that, at least factually,

Po 801

this court has not limited the term “recovery” to an award
resulting from a contested trial; rather, the court has inter-
preted it to include voluntary payments made in settlement
or as a result of confession of judgment.

Second, Dockins and Dolan demonstrate that, in
interpreting ORS 742.061 and its substantively similar pre-
decessors, the court has given the terms of the statute a
functional meaning that will advance the well-understood
purposes of the statute.* In Dolan, the court explained:

“Oftentimes insurance companies have contested their
obligation to pay a loss with such persistence and vigor that
the benefit of an insurance policy is either largely dimin-
ished or entirely lost. *** For that reason[,] *** insurance
companies are required to pay reasonable attorneys’ fees,
where they have wrongfully defended an action to recover
or refused to pay the loss within a reasonable time. That
purpose would be largely destroyed if [the insurer’s] posi-
tion in the instant case can be sustained. *** If a judg-
ment be reversed, as occurred in the instant case, upon
some technical error during the progress of the trial and
defendant’s tender will then defeat a recovery of attorneys’
fees, notwithstanding the expensive and prolonged litiga-
tion, the benefit of the statute is largely destroyed. When
plaintiff was compelled to institute an action against defen-
dant in order to recover the amount due on the policy, she
became entitled to an attorney fee.”

133 Or at 255-56. Similarly, in Dockins, the court recog-
nized that the term “proof of loss” should be given a func-
tional meaning, i.e., one that requires a court to determine
whether an insured’s act accomplished the purpose of a
proof of loss under ORS 742.061—to give insurers adequate
information to investigate and form reasonable estimates as
to their obligations. 329 Or at 26-28.

Dockins and Dolan are not the only cases in which
this court has assigned a functional meaning to the terms of

« ‘This court has deemed the differently-worded predecessor to ORS 742.061
quoted above, 360 Or at 797, to be “substantively identical” to ORS 742.061, and
thus has relied on cases decided under that predecessor statute in interpreting
ORS 742.061. See, e.g., Dockins, 329 Or at 27 (relying on State v. Claypool, 145 Or
615, 28 P2d 882 (1934), to interpret ORS 742.061 and noting that that case was
decided under a “substantively identical predecessor of ORS 742.061’).

802

ORS 742.061 (or its predecessors). For example, in Groce v.
Fidelity General Insurance, 252 Or 296, 311-12, 448 P2d 554
(1969), this court considered an argument under an earlier
version of the statute that the actions at issue—brought by
an insured’s creditors against an insurer for wrongful fail-
ure to settle within the policy limits—were not actions “upon
any policy of insurance” within the meaning of the statute.
Id. at 311. This court observed that “the statute no doubt
was drawn in contemplation of the type of claim ordinarily
made by means of a ‘proof of loss’ form and for one reason or
another denied by the insurer” but concluded that “the lan-
guage of the statute *** is broad enough to permit recovery
of attorney fees in [the case before it].” Id. The court read
the statute broadly on the ground that “[i]f attorney fees
were not allowed, the insured, or his assignees, would not be
made whole.” Id. at 312.

In Travelers Insurance Co. v. Plummer, 278 Or 387,
563 P2d 1218 (1977), this court also looked to the attor-
ney fee statute’s purpose to determine the meaning of the
phrase “action upon any policy of insurance.” In Plummer,
the insurer had sued its insured on a loan receipt, which
the insured had signed to memorialize the insurer’s loan
of funds to the insured in return for the insured’s agree-
ment to pursue his claims against a third party and repay
the insurer if he recovered his damages. The insured had
employed an attorney to prosecute the third-party action,
and, after the attorney settled the action, the insured ten-
dered two-thirds of the amount of the loan to the insurer,
holding back the remaining third for his attorney’s fees.
The insurer rejected the tender and sued the insured for
the full amount of the loan receipt. Later, the insurer moved.
to amend its pleadings to accept the tender as full satisfac-
tion of the claim under the loan receipt. However, by that
time, the insured had incurred attorney fees in the action
on the loan receipt. The trial court entered judgment for
the insured for the amount that the insurer had disputed
and also awarded the insured his attorney fees under the
version of ORS 742.061 that was in effect at the time. The
insurer appealed, arguing (among other things) that the
statute was inapplicable, because the statute referred to an
“action upon any policy of insurance” and the action at issue

P| 803

was, instead, an action on a loan receipt. This court rejected
that argument, giving a functional meaning to the specified
phrase and relying on the statute’s underlying purpose:

“What [the insurer] attempted to do by making [its
insured] turn over to it all sums recovered by him at his
own legal expense would in effect have denied its insured
the full repayment of the damages to his car *** contracted
for in [the insurance] policy. As the trial court stated: ‘It
is precisely this type of situation the legislature intended
to remedy in allowing attorney fees in disputes between
insured and insurer where the insurer is wrong’”

Id, at 392.5

With that contextual analysis in mind, we return
to the question presented here—the meaning of the statu-
tory term “recovery.” Purely based on text, the meaning of
that term is ambiguous. The legislature could have used the
term “recovery” to require that an insured obtain a money
“judgment,” or to require only that an insured obtain pay-
ment of an amount in excess of a timely tender. Statutory
context also points in different directions. On one hand,
the legislature used the term “recovery” in the context of
a legal action, suggesting that it intended to use it in its
technical legal sense, and this court seems to have ascribed
that meaning in McGraw. On the other hand, the form that
a recovery takes has not been a meaningful aspect of this
court’s decisions.

But, importantly, this court repeatedly has instructed
that the terms of ORS 742.061 and its predecessors should
be interpreted in light of their function within the statute’s
overall purpose. Dolan, 133 Or at 255-56; Dockins, 329 Or
at 28; Groce, 252 Or at 312; Plummer, 278 Or at 392. If we
heed that instruction here, as we think we must, it becomes
evident that the term “recovery” must be read to include

5 The Plummer court also rejected the insurer’s argument for avoiding appli-
cation of the statute on the ground that, in the particular procedural posture of
the case, the insured was not the designated “plaintiff” The court concluded that,
in the light of the statute’s purpose, the insured was “functionally” the plaintiff
and that the statute applied. 278 Or at 391. See also Hardware Mut. Cas. Co. v.
Farmers Ins, Exchange, 256 Or 599, 611, 474 P2d 316 (1970) (permitting attorney
fees when insured, who was designated as the “defendant” in the insurer's declar-
atory judgment action, sought to recover from insurer in counterclaim).

804 Po

mid-litigation payments such as the ones that Farmers
made in this case.

The purpose of ORS 742.061 is “to discourage expen-
sive and lengthy litigation.” Dolan, 133 Or at 255. Requiring
the insurer to pay the insured’s attorney fees if and only if
the insured obtains more in the litigation than was timely
tendered advances that purpose insofar as it encourages
insurers to make reasonable and timely offers of settlement
and also encourages insureds to accept reasonable offers
and forego litigation. But the statute also serves a compen-
satory purpose. The statute ensures that, when insureds file
suit to obtain what is due to them under their policies, they
do not win the battle but lose the war by expending much or
all of what they obtained in the litigation on attorney fees.
Id. (purpose of attorney fee statute to ensure that the ben-
efit of an insurance policy is not diminished by or entirely
lost to attorney fees when insurance company wrongfully
contests its obligation to pay); Plummer, 278 Or at 392 (full
payment of benefits contracted for in insurance policy is
denied when insured must pay his or her own legal expenses
to obtain benefits, and legislature intended to address that
problem by enacting statute); Groce, 252 Or at 311 (implying
that purpose of statute is to ensure that insured is “ma[dle
whole”).

The function that a “recovery” plays in that overall
framework is to establish that the insured indeed obtained
something in the action—payment of benefits due under the
insurance policy that exceeded any amount that the insurer
timely tendered. In the circumstances presented here, there
is no functional difference between Farmers’ mid-litigation
payments and the payments that were made by the insurers
in settlement in Dockins or pursuant to a confession of lia-
bility in Dolan. Under each of those scenarios, the insured
received a sum from the insurer that exceeded any amount
timely tendered, a result that indicates that, at least in some
practical sense, the insured prevailed in the action. It was
the insurer’s payment, not the form of payment, that enti-
tled the insured to attorney fees.

We conclude that the fact that plaintiff in this case
did not obtain a “judgment” memorializing these payments

Pc 805

does not make ORS 742.061 inapplicable. To the extent that
we implied otherwise in McGraw, we use this opportunity
to clarify its meaning: A declaration of coverage is not suf-
ficient to make ORS 742.061 applicable; an insured must
obtain a monetary recovery after filing an action, although
that recovery need not be memorialized in a judgment.

Before we apply that holding to the present circum-
stances, we turn briefly to an additional argument made
by Farmers about the meaning of ORS 742.061. Farmers
suggests that its payments to plaintiff cannot be consid-
ered a recovery “in the action,” for purposes of ORS 742.061,
because they were made, not in response to the action, but
in response to the decision of appraisers in the appraisal
proceeding that the insured demanded. We are not per-
suaded. Although it is true that Farmers made its payments
to plaintiff after the appraisal process had concluded, both
the appraisal proceeding and the payments came more than
six months after plaintiff’s proof of loss and after plaintiff
had instituted her action. And, at least initially, whether
Farmers had wrongfully failed to engage in the appraisal
process was an issue in the action. In those circumstances,
we conclude that Farmers’ belated payments qualify as a
recovery “in the action.”

The foregoing analysis of the statute resolves plain-
tiffs entitlement to attorney fees for the work performed by
her attorney up until the time that Farmers made volun-
tary payments to plaintiff in July and August of 2013. By
then, plaintiff had brought an action on her insurance policy
and, by virtue of Farmers’ July and August payments, had
“recovered” more in that action than Farmers had tendered
in the first six months after proof of loss. She was entitled to
attorney fees accrued in pursuit of those recoveries.

However, plaintiff is not entitled to an award for
attorney fees that accrued after the July and August 2013
payments, for two different reasons. First, the subsequent
voluntary payments, which Farmers made in February
2014, were payments for the replacement value of plain-
tiffs loss. Farmers made those payments within days after
plaintiff filed proof of her replacement costs—the “proof of
loss” that would justify paying the replacement cost, rather

806 Po

than the actual cash value, of plaintiff's losses. It was that
later proof of loss that triggered the six-month period for
settlement of plaintiff’s claim for the replacement value of
her losses under ORS 742.061. Because Farmers made the
replacement cost payments within the six-month window for
settlement provided in the statute, plaintiff is not entitled to
reimbursement for attorney fees incurred in obtaining that
additional “recovery.”

Second, except for the two replacement cost pay-
ments that Farmers made in February 2014, plaintiff did
not recover, after August 2013, any amount over and above
what Farmers already had paid. At trial, plaintiff sought
but was unsuccessful in obtaining any greater sum. Thus,
because plaintiff's recovery after Farmers’ August 2013
payment did not exceed Farmers’ timely tender, plaintiff is
not entitled to attorney fees under ORS 742.061 for work
performed by her attorney after that date.

The decision of the Court of Appeals is reversed.
The judgment of the circuit court is reversed, and the case
is remanded to the circuit court to award attorney fees in
accordance with this opinion.

807

On petition for reconsideration filed by petitioners on review December 5, 2016,
considered and under advisement January 4, petition for reconsideration
allowed, former opinion modified and adhered to as modified February 2, 2017

John B. WELS, Jr.,
Respondent on Review,
v.

Douglas W. HIPPE,
Defendant,
and
Le Roy HIPPE
and Cheryl Hippe,
Petitioners on Review.
(CC 101215E3; CA A150238; SC S063486)
388 P3d 1103

Clayton C. Patrick, Clatskanie, filed the petition for recon-
sideration for petitioners on review.

No appearance contra.

Before, Balmer, Chief Justice, and Kistler, Walters, Landau,
Baldwin, and Brewer, Justices, and DeHoog, Judge of the
Court of Appeals, Justice pro tempore.**

LANDAU, J.

The petition for reconsideration is allowed. The former
opinion is modified and adhered to as modified.

* 360 Or 569, 385 P3d 1028 (2016); 269 Or App 785, 347 P3d 788 (2015).

** Nakamoto, J., did not participate in the consideration or decision of this
case.

808 |

LANDAU, J.

Defendants have petitioned for reconsideration
of our opinion in Wels v. Hippe, 360 Or 569, 385 P3d 1028
(2016). Defendants prevailed but seek clarification of our
instruction remanding the case to the trial court for fur-
ther proceedings. Defendants assert that this instruction
requires the trial court to vacate its original judgment in.
favor of plaintiff and enter judgment in favor of defendants,
rather than holding a new trial and allowing plaintiff to
present further evidence. We agree that clarification is war-
ranted as follows: The case is remanded to the circuit court
for entry of judgment in defendants’ favor, and the award of
costs is modified accordingly.

The petition for reconsideration is allowed. The for-
mer opinion is modified and adhered to as modified.

809

Argued and submitted June 16, 2015; decision of Court of Appeals reversed,
case remanded to Employment Relations Board for further proceedings
February 2, 2017

AMERICAN FEDERATION OF
STATE COUNTY AND MUNICIPAL EMPLOYEES,
COUNCIL 75, LOCAL 2043,
Petitioner on Review,

v.
CITY OF LEBANON,
Respondent on Review.
(ERB UP1411; CA A152059; SC 062750)
388 P3d 1028

810 PO

Giles Gibson, Legal Counsel, Oregon AFSCME, Council 75,
Portland, argued the cause and filed the brief for petitioner
on review.

John E. Kennedy, The Morely Thomas Law Firm,
Lebanon, argued the cause and filed the brief for respondent
on review.

Elizabeth A. Joffe, McKanna Bishop Joffe, LLP, Portland,
filed the brief on behalf of amici curiae Oregon AFL-CIO,
Oregon Education Association, Oregon Public Employees
Union, Oregon State Firefighters Council, and Service
Employees International Union Local 503.

BALDWIN, J.

The decision of the Court of Appeals is reversed. The case
is remanded to the Employment Relations Board for further
proceedings.

Landau, J., dissented and filed an opinion, in which
Balmer, C. J., and Brewer, J., joined.

po
BALDWIN, J.

This case requires us to consider whether the
City of Lebanon (city) committed an unfair labor practice
under Oregon’s Public Employee Collective Bargaining Act
(PECBA), ORS 243.650 - 243.782, when one ofits council mem-
bers, Campbell, wrote a letter to a local newspaper dispar-
aging labor unions in general and calling for city employees
to decertify their existing union. The Employment Relations
Board (ERB or board) concluded that the city had engaged
in an unfair labor practice based on Campbell’s conduct.
The Court of Appeals reversed, concluding that the city
was not liable because Campbell had not acted as a “public
employer or its designated representative” within the mean-
ing of PECBA. AFSCME Council 75 v. City of Lebanon, 265
Or App 288, 336 P3d 519 (2014). For the reasons explained
below, we reverse the decision of the Court of Appeals, and
remand to ERB for further proceedings.

I. BACKGROUND

The undisputed facts, as summarized by the Court
of Appeals, are:

“According to the City of Lebanon Charter of 2004, the
city is ‘a municipal corporation’ that includes ‘all territory
encompassed by its boundaries ***’ The city is also a pub-
lic employer as defined by ORS 243.650(20). All powers of
the city are vested in the city council, which is composed
of a mayor and six councilors; the council delegates much
of that power to the city administrator (manager), who is
the ‘administrative head of the government of the City’
Specifically, the city administrator (manager) is ‘responsi-
ble for the daily operation of the City’s departments and
implementation of Council policy’

“The council is responsible for holding regular meetings,
adopting ‘rules for the government of its members and pro-
ceedings|[,]’ and appointing certain city officers. The coun-
cil is also responsible for passing ordinances and voting on
questions before it, including whether to approve ‘a bond of
a City officer or a bond for a license, contract or proposal[.]’
Except as the city charter provides, ‘the concurrence of a
majority of the members of the Council present and voting
at a Council meeting shall be necessary to decide any ques-
tion before the Council’ Further, ‘[n]o action by the council

812 po

shall have legal effect unless the motion for the action and
the vote by which it is disposed of take[] place at proceed-
ings open to the public,’

“Campbell was appointed as a city councilor in 2010 and
was a member of the budget committee. As a city councilor,
she would ‘be asked to vote and ratify any collective bar-
gaining agreement with the Union that [was] negotiated
by the City negotiation team.’ However, Campbell was not a
member of the city’s labor negotiation team, and, [o]ver the
last 10 years, no city councilor [had] been a member of the
City’s labor negotiation team.

“At the time of the events giving rise to this case, the
city was experiencing a budget crisis, and the city and the
union were parties to a collective bargaining agreement
that was set to expire. The president of the union, along
with the president of another union that represents city
employees, co-authored a letter to the city. In that letter,
the union presidents stated that the city should consider
eliminating the positions of assistant city manager/human
resources manager and human resources assistant before
cutting essential services or laying off union workers.

“Shortly thereafter, Campbell sent a letter to the
Lebanon Express, a local newspaper. The letter was
addressed to ‘All Citizens of Lebanon|[.]’ Campbell began
the letter by stating:

“T would like to inform all of you about some elements of
my personal background before I get to the basis of my
letter. Further I would like to clarify this letter is being
written by me as an individual and not a reflection of a
majority of the City Council, the City or my employer’

“Campbell then described her and her family’s involve-
ment with unions, defended the city’s human resources
positions, and criticized unions in general. Campbell con-
cluded the letter by stating:

“To employees of the City and other organizations
imprisoned by the dictatorship of a union as a pri-
vate citizen I advise you to seek out the Department of
Labor website where you can find instructions on how
to de-certify your union captors. As an individual and
former union member I believe you can put your union
dues to better use in your own household budget and in
supporting causes that truly express your own values”

Po 818

“Sincerely,

“Margaret A. Campbell’
“City Councilor’

“Ward Ir

“The newspaper published an article that summarized
Campbell’s letter. That article noted that the letter could be
found on the newspaper's website and stated that Campbell
planned to read the letter at a city council meeting. The
parties later stipulated that Campbell did not read the let-
ter at the meeting.”

City of Lebanon, 265 Or App at 289-91 (alterations in
original).

As a result of Campbell’s conduct, AFSCME Council
75 (anion) filed an unfair labor practice complaint against
the city, alleging that Campbell’s comments were made in her
official capacity as a council member. The parties submitted
the case on stipulated facts directly to ERB. The board con-
cluded that the city violated PECBA when Campbell, in her
letter, advised city employees “to seek out the Department
of Labor website where you can find instructions on how to
de-certify your union captors.”! The board issued a cease-
and-desist order and required the city to post an official
notice of its wrongdoing. See ORS 243.676 (authorizing
such remedy when unfair labor practice established). The
board reasoned that a “public employer [under the PECBA]
is liable for the actions of its officials” and that, because
Campbell “spoke as the City’s representative, liability for her
remarks is ascribed to the City.” The board observed that
Campbell was “a member of a six-person Council in which
the City Charter vests all powers. The Council is the public
employer|,] and Campbell shares that status because she is
a member of the Council.” (Emphasis in original.) The board
further noted that Campbell, “as a member of the council

Specifically, the board concluded that the city had violated ORS 243.672(1)(a)
and (b), which provide:

“It is an unfair labor practice for a public employer or its designated rep-
resentative to do any of the following:

“(a) Interfere with, restrain or coerce employees in or because of the
exercise of rights guaranteed in ORS 243.662.

“(b) Dominate, interfere with or assist in the formation, existence or
administration of any employee organization.”

814 PO

that is responsible for formulating all City policies and over-
seeing all City operations, is a public employer”?

In the Court of Appeals, the city assigned error to
ERB’s conclusion that Campbell acted as a public employer
or its designated representative under PECBA when she
submitted her letter to the newspaper.’ The Court of Appeals
agreed with the city and reversed. The court concluded that
Campbell was not the city’s “designated representative”
within the meaning of PECBA, because the record lacked
any evidence that the city had “specifically designated”
Campbell to act as its representative. City of Lebanon,
265 Or App at 295-96. Further, the court concluded that
Campbell could not be a “public employer” under PECBA,
because she was not acting as an agent when she submitted
her letter to the local newspaper:

“The union raises an interesting question by asserting that
we should apply agency principles in this case: whether a
public employer can be liable for an unfair labor practice
committed by an agent other than its designated represen-
tative. However, we need not resolve that question because,
even assuming without deciding that it is appropriate to
apply agency principles in this context, we conclude that
Campbell was not acting as the city’s agent when she wrote
and sent her letter.”

Id. at 297 (footnote omitted).

2 The board relied on its prior decision in OPEU v. Jefferson County, 18
PECBR 310 (1999), in which a county commissioner unlawfully refused to
directly bargain with a union because bargaining unit members picketed his per-
sonal business. The commissioner told the president of the union that “he wanted
to get rid of [the union]” and that he did not want to talk with the union’s staff
members. ERB concluded that the commissioner's statements interfered with the
administration and existence of the union:

“Ahern’s comments, directed to OPEU’s local president and almost certain
to be relayed to other members of the bargaining unit, strike at the core of
the relationship between the employees and OPEU. When one of the three
main decision-makers for the County says he wants the employees to get rid
of OPEU and not let OPEU staff members participate in bargaining, that
directly impacts OPEU by undermining bargaining unit members’ confi-
dence in OPEU as exclusive representative.”
Id. at 318 (footnote omitted).
® The city did not assign error to ERB’s conclusions that Campbell’s conduct
otherwise amounted to an unfair labor practice or that holding the city liable for
her comments did not violate the free speech guarantees of Article I, section 8, of
the Oregon Constitution.

Po 815

We accepted the union’s petition for review to deter-
mine whether Campbell was either a “public employer”
or a “designated representative” of the city under PECBA
when she submitted her letter to the newspaper. On review,
the city does not challenge ERB’s conclusion that the por-
tion of Campbell’s letter urging city employees to decer-
tify their union would constitute an unfair labor practice
under ORS 243.672(1)(a) and (b) if committed by “a public
employer or its designated representative.” The only issue
for us to resolve, therefore, is whether the city may be held
liable for Campbell’s actions because she was either a “pub-
lic employer” or its “designated representative” within the
meaning of PECBA.

II. ANALYSIS
A. Purposes of PECBA and the NLRA

We begin our analysis by briefly examining the
legislature’s purpose in enacting PECBA. This court has
observed that, by enacting PECBA, first passed in 1973,
“the legislature has provided a comprehensive statu-
tory scheme authorizing and regulating collective bar-
gaining between municipal and other public employers
and employees, administered by ERB.” City of Roseburg
v. Roseburg City Firefighters, 292 Or 266, 268, 639 P2d
90 (1981). This court noted that PECBA was designed to
improve relations between public employers and their
employees:

««+k* DECBA is intended to protect [public employees’]
economic welfare during their employment and to provide
a means for them to affect certain negotiable working
conditions. Another policy served by PECBA is to pro-
tect public safety by the substantive device of prohibiting
strikes of public safety employees. The substantive goal of
that ban is prevention of interruption in the provision of
essential government services. The class of persons to be
benefited by this policy extends beyond the population of
any city. PECBA is expressly premised upon a legislative
determination that the people of the state have an inter-
est in public employment relations at both the state and
local levels of government.”

Id. at 276.

816 po

Basically, in enacting PECBA, the legislature
extended to public employees in Oregon the same benefits
and protections that federal law had long afforded to employ-
ees in the private sector under the National Labor Relations
Act (NLRA).* Congress enacted the NLRA, a sweeping piece
of labor legislation, in 1935. The overarching purpose of the
NLRA, also known as the Wagner Act, was to protect employ-
ees against employer interference with their organizational
rights. See John E. Higgins ed., 1 The Developing Labor Law
29 (6th ed 2012) (“The prime function of the Act was to pro-
tect employees against employer tactics designed either to
obstruct organizational efforts or to withhold the fruits of
those efforts.”); see also Radio Officers’ Union of Commercial
Telegraphers Union, A.F.L. v. NLRB, 347 US 17, 40, 74S Ct
323, 98 L Ed 455 (1954) (“The policy of the Act is to insulate
employees’ jobs from their organizational rights.”). Senator
Wagner, the sponsor of the bill, emphasized that purpose in
his statements on the Senate floor. He argued that employ-
ees’ ability to join the labor organizations of their choosing,
free from employer interference, had become a necessity in
the modern industrial era: “Caught in the labyrinth of mod-
ern industrialism and dwarfed by the size of corporate enter-
prise, [the employee] can attain freedom and dignity only
by cooperation with [other employees].” 79 Cong Rec 7565
(May 15, 1935) (statement by Sen Wagner). He insisted that
bills purpose was to ensure employees’ freedom of choice
with regard to their organizational rights: “[The bill] does
not force or even counsel any employee to join any union if
he prefers to deal directly or indirectly with his employers.
It seeks merely to make the worker a free man in the eco-
nomic as well as the political field.” Id.

To accomplish its broad purpose of protecting
against interference with labor rights, the NLRA conferred.
on employees a “triad of rights”: (1) the right to organize;
(2) the right to bargain collectively; and (3) the right to
engage in strikes, picketing, and other concerted activi-
ties. Higgins, The Developing Labor Law at 28. The NLRA

4 The NLRA applies only to private sector employment and expressly excludes
public entities from the definition of “employer.” See 29 USC § 152(2) (noting that
an “employer” under the NLRA “shall not include the United States or *** any
State or political subdivision thereof”).

Po 817

further assured the enjoyment of those rights by declaring
it an unfair labor practice for an employer to, among other
things, interfere with, restrain, or coerce employees in the
exercise of their rights under the Act. 29 USC § 158(1).

In many respects, PECBA was patterned after the
NLRA. See Elvin v. OPEU, 313 Or 165, 175, 832 P2d 36
(1992) (noting that PECBA was “modeled” after federal act);
Donald W. Brodie, Public Sector Collective Bargaining in
Oregon, 54 Or L Rev 337, 337-38 (1975) (same).> Similar to
the protections that the NLRA provides for private employ-
ees, PECBA provides public employees the right to form
and join labor organizations, ORS 243.662; requires good
faith in collective bargaining, ORS 243.672(e); and prohib-
its unfair labor practices, ORS 243.672(c). See Carlton J.
Snow, The Steelworkers Trilogy in Oregon’s Public Sector, 21
Willamette L Rev 445, 455 (1985) (identifying similar provi-
sions in PECBA and NLRA). Indeed, PECBA and the NLRA.
define what constitutes an “unfair labor practice” in nearly
identical ways. The NLRA provides, among other things,
that it is an unfair labor practice for an employer:

“(1)_ to interfere with, restrain, or coerce employees in
the exercise of the rights guaranteed in section 157 of this
title;

“(2) to dominate or interfere with the formation or
administration of any labor organization or contribute
financial or other support to it[.]”

29 USC § 158(a). Likewise, under PECBA, it is an unfair
labor practice for “a public employer or its designated repre-
sentative” to, among other things:

5 The legislative history of PECBA makes little mention of the NLRA. That
history indicates, however, that the legislature drew from other states’ public
sector bargaining acts, which—in turn—had been modeled after the federal
act. See, eg., Tape Recording, Senate Committee on Labor, HB 2263, May 31,
1973, Tape 19, Side 2 (statement of Jim Redden, chairman of Governor's Task
Force on Collective Bargaining in the Public Sector) (noting that PECBA was
based on public bargaining statutes in other states—namely, New York, Hawaii,
and California); Marcus R. Widenor, Public Sector Bargaining in Oregon: The
Enactment of the PECBA, University of Oregon, LERC Monograph Series No. 8
(1989) (other states’ bargaining laws in existence at time of PECBA’s enactment
“drew on the model for labor-management relations outlined for private sector
workers in the National Labor Relations Act”).

si8 Pe

“(a) Interfere with, restrain or coerce employees in
or because of the exercise of rights guaranteed in ORS
243.662.

“(b) Dominate, interfere with or assist in the formation,
existence or administration of any employee organization.”

ORS 243.672(1).

In addition to their nearly identical provisions relat-
ing to unfair labor practices, PECBA and the NLRA both
express policies of promoting collective bargaining and pro-
tecting employees’ organizational rights. The NLRA, for
example, declares that it is the policy of the United States to
reduce the causes of industrial strife by encouraging collec-
tive bargaining and protecting employees’ exercise of “full
freedom of association, self-organization, and designation
of representatives of their own choosing, for the purpose of
negotiating the terms and conditions of their employment
or other mutual aid or protection.” 29 USC § 151. Similarly,
the 1973 Legislative Assembly declared it to be the policy of
Oregon. that “[t]he people of this state have a fundamental
interest in the development of harmonious and cooperative
relationships between government and its employees.” ORS
243.656(1). The Oregon legislature also declared that the
purposes of PECBA are to “obligate public employers, pub-
lic employees and their representatives to enter into collec-
tive negotiations with willingness to resolve grievances and
disputes relating to employment relations” and to promote
improved employer-employee relations “by providing a uni-
form basis for recognizing the right of public employees to
join organizations of their own choice, and to be represented
by such organizations in their employment relations with
public employers.” ORS 243.656(5).

B. Whether Campbell’s Statements May Be Imputed to the
City

Having briefly described the purposes of PECBA
and its similarities to the NLRA, we now turn to the ques-
tion on review: Was Campbell’s conduct that of a “public
employer or its designated representative” within the mean-
ing of PECBA when she submitted her letter to the news-
paper encouraging city employees to decertify their union?

ED

The union argues that Campbell is a “public
employer” by virtue of her membership on the city’s govern-
ing body. The union also reprises the argument it made in the
Court of Appeals that federal cases interpreting and apply-
ing the NLRA support its position that Campbell should be
viewed as a “public employer” under PECBA. For its part,
the city argues that, under its charter, members of the coun-
cil are not authorized to act individually and that a majority
vote of the council is required for the council to take offi-
cial action. As a result, the city contends that an individual
city councilor cannot be a “public employer” for purposes of
PECBA. Further, the city argues that a city councilor is not
a “designated representative” of the city, because city coun-
cilors are not specifically designated by the city to act in its
interests in labor matters. Rather, under the city’s charter,
only the city manager has the authority to hire, fire, or dis-
cipline any city employee.

We review ERB’s order holding the city liable for
an unfair labor practice for legal error. ORS 183.482(8). To
resolve this interpretive dispute as to whether Campbell
acted as a “public employer or its designated representative”
under ORS 243.672(1), we examine the text of the statute
in context together with any relevant legislative history to
determine legislative intent. State v. Gaines, 346 Or 160,
171-72, 206 P3d 1042 (2009).°

As noted, ORS 243.672(1) provides, in part:

“(1) It is an unfair labor practice for a public employer
or its designated representative to do any of the following:

“(a) Interfere with, restrain or coerce employees in
or because of the exercise of rights guaranteed in ORS
243.662.

“(b) Dominate, interfere with or assist in the formation,
existence or administration of any employee organization.”

(Emphasis added.)

® We do not give deference to ERB's interpretation of “public employer”
under the statute, because such deference is not given when a term is inexact.
Blachana, LLC v. Bureau of Labor and Industries, 354 Or 676, 687, 318 P3d 735
(2014) (description of “exact,” “inexact,” and “delegative” terms for purposes of
determining deference to agency when disputed statutory term is part of reg-
ulatory scheme). The term “public employer” is an inexact term, because it is
imprecise, requiring further interpretation. Id.

820 PO

1. “Public employer”

We begin by analyzing whether Campbell acted as

a “public employer” within the meaning of ORS 243.672(1)
when she wrote her letter. PECBA defines a “public employer”
as

“the State of Oregon, and the following political subdivi-

sions: Cities, counties, community colleges, school districts,

special districts, mass transit districts, metropolitan ser-

vice districts, public service corporations or municipal cor-

porations and public and quasi-public corporations.”

ORS 248.650(20) (emphasis added). Thus, under the
plain terms of the statute, the city in this case is a “public
employer.”

As a corporate entity, a city can act in either of two
ways. It can take official action in accordance with its gov-
erning documents, or it can act through its agents. In this
case, we need not decide whether the term “public employer”
extends to the city’s agents, because another provision of
ORS 248.650 specifically prohibits at least some city agents
from engaging in unfair labor practices. As noted, ORS
243.672(1) makes it an unfair labor practice for a public
employer or its designated representative to engage in spec-
ified conduct. Subsection (21) of ORS 243.650 defines the
term “public employer representative” as “includ[ing] any
individual or individuals specifically designated by the pub-
lic employer to act in its interests in all matters dealing with
employee representation, collective bargaining and related
issues.” Thus, if Campbell was acting as the city’s “desig-
nated representative” when she wrote her letter, the city
may be held liable for her conduct.

2. “Designated representative”

Before determining whether Campbell was a “desig-
nated representative” of the city, we first address a somewhat
curious discrepancy in the terminology that the legislature
used to describe the individuals whom a public employer
designates to act in its interests. As noted, ORS 243.672(1)
prohibits a “public employer or its designated representative”
from engaging in an unfair labor practice. The statute does
not define what constitutes a “designated representative” of

PY

Po 821

a public employer, however. Instead, as discussed, the stat-
ute defines the similar term “public employer representa-
tive.” Ordinarily, we presume that different terms in a stat-
ute connote different meanings. See, e.g., State v. Connally,
339 Or 583, 591, 125 P3d 1254 (2005) (so stating). What
makes the use of different terms in this case perplexing,
however, is that the defined term “public employer represen-
tative” does not appear anywhere else in the statute. As a
result, if we were to interpret a “public employer represen-
tative” under ORS 243.650(21) to mean something differ-
ent than a “designated representative” of a public employer
under ORS 248.672(1), then we would relegate the former
term to mere surplusage—a result that this court seeks to
avoid. See Crystal Communications, Inc. v. Dept. of Rev., 353
Or 300, 311, 297 P3d 1256 (2018) (“As a general rule, we
construe a statute in a manner that gives effect, if possible,
to all its provisions.”).

Given the textual similarity between a “public
employer representative,” which is defined as an individual
whom a public employer designates to act in its interests, and
a “designated representative [of a public employer],” we find
it likely that the legislature intended those terms to be used
interchangeably. Indeed, that is a more harmonious reading
of the statute than one that would read ORS 243.650(21)
out of PECBA. See ORS 174.010 (when construing statutes,
court may not omit text that legislature inserted). We there-
fore construe a “public employer representative” and a “des-
ignated representative [of a public employer]” under PECBA
to be synonymous. Accordingly, we use those terms inter-
changeably in this opinion.

We now consider whether Campbell acted as a “des-
ignated representative” of the city in writing her letter, such
that the city may be held liable for her conduct under ORS
243.672(1). As noted, ORS 243.650(21) provides that a public
employer representative “includes any individual or individ-
uals specifically designated by the public employer to act in
its interests in all matters dealing with employee represen-
tation, collective bargaining and related issues.” (Emphasis
added.) The legislature’s use of the term “includes” indi-
cates that a “public employer representative” is not limited
to those individuals whom a public employer specifically

822 po

designates to act in its interests in all labor-related matters.
See Haynes v. Tri-County Metro., 337 Or 659, 664-65, 103
P3d 101 (2004) (when legislature uses term “include,” defini-
tion is nonexclusive); Beaver v. Pelett, 299 Or 664, 668, 705
P2d 1149 (1985) (legislature’s use of verb “includes,” rather
than “means,” indicates that definition is not exhaustive).
Rather, the term “includes” suggests that a “public employer
representative” also encompasses some broader category of
individuals who act on behalf of a public employer.

Our task in determining whether Campbell is
a “public employer representative,” therefore, is twofold.
First, we must determine whether the city “specifically
designated” her to act in its interests in “all” matters deal-
ing with employee representation. Second, if not, we must
determine which other individuals may constitute “public
employer representatives” and whether Campbell was such
an individual.

With regard to the first inquiry, the record does not
show that the city “specifically designated” Campbell “to act
in its interests in all matters dealing with employee rep-
resentation, collective bargaining and related issues.” ORS
243.650(21). Nor does the union offer any evidence or argu-
ment to support such a proposition. We therefore conclude
that Campbell was not the type of representative whom a
public employer “specifically designates” to act in its inter-
ests in all labor matters.

Turning to the second inquiry, we must determine
which other individual representatives of a public employer
the legislature intended the term “public employer represen-
tative” to include. The dictionary defines a “representative” as
“one that represents another as agent, deputy, substitute, or
delegate usu. being invested with the authority of the princi-
pal.” Webster's Third New Int'l Dictionary 1926-27 (unabridged
ed 2002). Similarly, it defines the verb “represent” as

“to supply the place, perform the duties, exercise the rights,
or receive the share of : take the place of in some respect
: fill the place of for some purpose : substitute in some capac-
ity for : act the part of, in the place of, or for (as another per-
son) usu. by legal right.”

| 223

Id. at 1926. Under its plain meaning, then, the term “rep-
resentative” suggests some type of agency relationship
between a public employer and its representative—that is,
that a public employer representative is in some way autho-
rized to act “in the place of, or for” the public employer. As
discussed, however, the text of ORS 243.650(21) does not
exhaustively define which individual agents might be con-
sidered a “representative” of a public employer.

Because ORS 243.650(21) does not exhaustively
define a “public employer representative,” we look to the
statutory context for guidance. One contextual clue is the
legislature’s statement of policy. See US National Bank v.
Boge, 311 Or 550, 560-61, 814 P2d 1082 (1991) (express
purpose statement may be considered as context). As
noted at the beginning of this analysis, the legislature
included a policy statement in PECBA, generally mod-
eled after the policies articulated in the NLRA, expressly
finding and declaring that the people of Oregon “have a
fundamental interest in the development of harmonious
and. cooperative relationships between government and
its employees.” ORS 243.656(1). To that end, the legisla-
ture stated that “[rlecognition by public employers of the
right of public employees to organize and full acceptance
of the principle and procedure of collective negotiation
between public employers and public employee organi-
zations can alleviate various forms of strife and unrest.”
ORS 243.656(2). The legislature further recognized that
“protection by law of the right of employees to organize
and negotiate collectively safeguards employees and the
public from injury, impairment and interruptions of nec-
essary services.” ORS 243.656(3). Ultimately, the legisla-
ture stated that the purpose of PECBA was to “promote
the improvement of employer-employee relations within
the various public employers by providing a uniform basis
for recognizing the right of public employees to join organi-
zations of their own choice, and to be represented by such
organizations in their employment relations with public
employers.” ORS 243.656(5). The legislature’s statement
of policy thus demonstrates an intent for PECBA to apply
broadly in favor of public employees’ rights to organize and
bargain collectively.

824 PO

That intent is borne out by other provisions of
PECBA as well. See Force v. Dept. of Rev., 350 Or 179, 188, 252
P3d 306 (2011) (“‘[Clontext’ includes, among other things,
other parts of the statute at issue.”). For example, PECBA
expressly provides that “[plublic employees have the right
to form, join and participate in the activities of labor orga-
nizations of their own choosing.” ORS 243.662. That right
is protected by ORS 243.672—the provision at issue in this
case—which imposes liability for various unfair labor prac-
tices. As relevant to this case, a public employer or its desig-
nated representative commits an unfair labor practice if the
employer or representative “interfere[s] with, restrain[s]
or coerce[s] employees in or because of the exercise of
rights guaranteed in ORS 243.662.” ORS 243.672(1)(a).
Read together, those provisions further demonstrate the leg-
islature’s intent for PECBA to broadly protect public employ-
ees against employer interference with their organizational
and bargaining rights.

The statutory context thus indicates that the term
“public employer representative” should be construed broadly.
Neither the text of ORS 243.650(21) nor other, related provi-
sions of PECBA, however, conclusively identify which indi-
vidual agents of a public employer are “include[d]” within the
definition of a “public employer representative.” We therefore
seek guidance on that point from relevant federal case law
that has developed under the NLRA. Specifically, we con-
sider federal cases interpreting the NLRA that were in exis-
tence at the time that the legislature enacted PECBA. Those
cases, although not binding on this court, provide persuasive
authority for this court’s interpretation of PECBA, because,
as noted, the legislature largely modeled Oregon's statute
after the federal one. Elvin, 313 Or at 177 (“Because ***
PECBA was adopted to model the NLRA, we look to cases
decided under the NLRA, and particularly to cases decided
prior to 1973—the year in which PECBA was adopted—to
obtain guidance in interpreting PECBA.”).’

7 The dissent argues that there is “no textual connection” between the
PECBA and the NLRA that would provide a basis for concluding that the Oregon
legislature intended the PECBA to incorporate the federal case law that existed
under the NLRA. 360 Or at 842 (Landau, J., dissenting). We disagree. Both the
state and federal statutes prohibit an “employer” from committing an unfair
labor practice. And both statutes provide that it is an unfair labor practice for an

Po 825

As early as 1974—shortly after PECBA was
enacted—the Oregon Court of Appeals acknowledged the
similarities between the state and federal statutes, and
concluded that federal case law interpreting the NLRA
could provide guidance in interpreting related provisions of
PECBA. See Klamath County v. Laborers Int'l Union, Local
915, 21 Or App 281, 288, 534 P2d 1169 (1975) (“[T]he simi-
larity between parts of the two statutes indicates that fed-
eral decisions interpreting the NLRA be given some weight
in interpreting similar sections of the Oregon statute.”).
Since that time, Oregon appellate courts have continued to
consider federal case law for its persuasive value in inter-
preting PECBA. See, e.g., Elvin, 318 Or at 179 (“[Wle inter-
pret PECBA by looking to how the NLRA was interpreted
before 1973[.]”); Assn. of Oregon Corrections Emp. v. State of
Oregon, 267 Or App 4138, 418, 343 P3d 637 (2014) (because
PECBA was modeled after NLRA, “federal case law pro-
vides guidance in interpretation of PECBA”); Portland
Assn. Teachers v. Mult. Sch. Dist. No. 1, 171 Or App 616,
631 n 6, 16 P3d 1189 (2000) (because PECBA adopted to
model NLRA, court looked to “cases decided under the fed-
eral act—and particularly to cases decided before 1973, the
year in which PECBA was adopted—for guidance in inter-
preting PECBA”). We once again seek guidance from federal

employer to “interfere with, restrain or coerce employees” in the exercise of their
organizational rights. ORS 243.672(1); 29 USC § 158(a)(1). Based on that tex-
tual connection—as well as the shared purpose of the two statutes—we conclude
that the relevant federal case law in existence at the time of PECBA’s enactment
provides persuasive authority when interpreting the unfair-labor-practice provi-
sions of PECBA. See State v. Kennedy, 295 Or 260, 267, 666 P2d 1816 (1983) (rec-
ognizing that this court may rely on federal case law in interpreting provision of
Oregon law, not because we are bound to do so, but because we find that case law
persuasive). This court has often looked to relevant federal case law for its per-
suasive value in interpreting an Oregon statute when that statute was modeled
after a federal statute. See, e.g., Redmond Ready-Mix, Inc. v. Coats, 283 Or 101,
110, 582 Pad 1340 (1978) (when Oregon’s Anti-Price Discrimination Law modeled
after federal acts, “federal cases interpreting the federal statutes are persuasive
to us in interpreting the Oregon statute”); Karsun v. Kelley, 258 Or 156, 161, 482
P2d 533 (1971) (when Oregon’s Blue Sky Law amended “to adopt substantially the
same terms as set forth in the Federal Security Actl,] *** the legislative history
of that act, as well as decisions construing its provisions, are of significant inter-
est”). Indeed, this court has found federal law persuasive even when two compa-
rable statutes are not identical. See State v. Walker, 356 Or 4, 23 n 9, 333 P8d 316
(2014) (looking to federal RICO statute, upon which Oregon’s RICO statute was
modeled, even though Oregon provision had been “modified somewhat”; noting
that Oregon’s provision was “not *** inconsistent” with federal one).

826 PO

law in this case in an effort to discern the meaning that the
legislature intended to ascribe to the term “public employer
representative.”®

Federal courts interpreting the NLRA have often
been confronted with the question of which individual
agents’ conduct may be imputed to an employer for pur-
poses of unfair-labor-practice liability. As with a public
employer, an employer in the private sector is capable of act-
ing only through its individual officers and agents. See, e.g.,
Corporations, 18B Am Jur 2d § 1139 at 182 (2015) (“A cor-
poration can act only through the authorized acts of its cor-
porate directors, officers, and other employees and agents.”);
1 Corporations, 8 CJS § 7 at 314 (2007) (“A corporation can
only act through natural persons who are in charge of its
affairs.”). The NLRA takes that reality into account by defin-
ing an “employer” to include the individuals through whom.
a company acts. As originally enacted, the NLRA defined an
“employer” to include “any person acting in the interest of an
employer, directly or indirectly.” National Labor Relations
Act, ch 872, § 2, 49 Stat 450 (1935). As we will discuss,
Congress later amended that definition to include “any per-
son acting as an agent of an employer, directly or indirectly.”
29 USC § 152(2) (emphasis added). Under either version,
however, federal courts have determined an employer’s lia-
bility for an individual agent’s unfair labor practice by con-
sidering the nature of the individual’s position within the
company and whether other employees would reasonably

® The dissent acknowledges that the definition of “public employer repre-
sentative” leaves open “the possibility that others not specifically designated [in
the definition] may also be included” but argues that that definition “reflects an
obvious parallel to common-law principles of agency with which we presume the
legislature was familiar? citing State v. Ramos, 358 Or 581, 368 P3d 446 (2016).
360 Or at 839 (Landau, J., dissenting). In Ramos, this court concluded that “rea-
sonable foreseeability” is a limiting concept that applies to an award of economic
damages under ORS 187.106, a statute requiring that a defendant pay restitution
equal to the full amount of a victim’s economic damages resulting from the defen-
dant’s crime, Id. at 596. Because the legislature “adopted the definition of ‘eco-
nomic damages’ that applies in civil actions,” the court concluded, “it fis] likely
that the legislature intended to apply the traditional civil law concept of rea-
sonable foreseeability to determine whether claimed damages are ‘too remote,”
rather than intending that some other test of ‘remoteness’ apply.” Id. at 596-97.
We do not agree that the legislature—by using the term “representative’—has
clearly adopted common-law principles of agency when “representative” is not a
common-law concept. See also State v. Stark, 354 Or 1, 10, 307 P8d 418 (2013)
(court presumes legislature is aware of existing law).

po 827

perceive that individual to have been authorized to speak
for the employer.

With regard to the conduct of individuals at the
highest levels of authority, federal courts generally have
assumed, without explicit analysis, that an employer may
be held responsible. In particular, federal courts have held
that an employer is responsible for the conduct of its execu-
tive officers—i.e., officers who have the authority to deter-
mine the company’s general business and labor policies.
E. H. Schopfiocher, Annotation, Unfair Labor Practice,
within National Labor Relations Act or Similar State
Statute, Predicated upon Statements or Acts by Employees
Not Expressly Authorized by Employer, 146 ALR 1062
(1943). Indeed, courts have treated the proposition that an
executive officer may bind the company as so obvious as to
not warrant discussion. See, e.g., Morgan Precision Parts v.
NLRB, 444 F2d 1210, 1215 (5th Cir 1971) (company respon-
sible for company owner’s anti-union activity); Madison
Brass Works, Inc. v. NLRB, 381 F2d 854, 857 (7th Cir 1967)
(company president’s remarks threatening economic repri-
sal if employees unionized constituted unfair labor prac-
tice); NLRB v. John & Ollier Engraving Co., 123 F2d 589,
593 (7th Cir 1941) (employer responsible for unfair labor
practices of “executive officers”); NLRB v. Lightner Pub.
Corp. of Illinois, 118 F2d 621, 625 (7th Cir 1940) (holding
corporate employer liable for unfair labor practice commit-
ted by corporation’s president where president wrote letters
to men on strike indicating that he would not negotiate
with representatives of employees); NLRB v. Ed. Friedrich,
Inc., 116 F2d 888, 890 (5th Cir 1940) (holding that, to estab-
lish company domination or support of unaffiliated union,
it was not necessary to prove express acts by stockholders
or executive officers of company—thereby implying that, as
matter of course, company was responsible for acts of those
persons).

The more challenging question for federal courts
has been whether an employer may be held responsible for
the actions of individuals who hold a position of authority
that is less than an executive officer but greater than a
rank-and-file employee. Such an employee generally occupies

828 PO

some type of supervisory position, but is not entrusted with
the duty to determine the employer’s general business and
labor policies. Shortly after the NLRA was enacted, the
United States Supreme Court addressed the question of
an employer’s responsibility for the unfair labor practices
of such individuals in two cases: International Association
of Machinists, Tool and Die Makers Lodge No. 35 v. Labor
Board, 311 US 72, 61 S Ct 83, 85 L Ed 50 (1940), and H. J.
Heinz Co. v. NLRB, 311 US 514, 61 S Ct 320, 85 L Ed 309
(1941).

In International Association of Machinists, the
Court upheld a determination by the National Labor
Relations Board (NLRB) that an employer was responsible
for the organizational efforts of several low-level employees,
despite the fact that the employer had not expressly autho-
rized or ratified the employees’ actions. Rejecting the notion
that strict principles of agency law applied when determin-
ing employer responsibility under the NLRA, the Court con-
cluded that an employer could be held responsible for the
actions of its “so-called agents” even though those acts “were
not expressly authorized or might not be attributable to [the
employer] on strict application of the rules of respondeat
superior.” Id. at 80. The Court explained:

“We are dealing here not with private rights *** nor with
technical concepts pertinent to an employer's legal respon-
sibility to third persons for acts of his servants, but with
a clear legislative policy to free the collective bargaining
process from all taint of an employer’s compulsion, domina-
tion, or influence. The existence of that interference must
be determined by careful scrutiny of all the factors, often
subtle, which restrain the employees’ choice and for which
the employer may fairly be said to be responsible.”

Id. Ultimately, the Court announced the following rule for
determining when an employer “may fairly be said to be
responsible” for an agent’s unfair labor practice: “[W]here
the employees would have just cause to believe that [the
agents] were acting for and on behalf of the management,
the Board would be justified in concluding that they did not
have the complete and unhampered freedom of choice which
the Act contemplates.” Id.

Po 829

In Heinz, the Court addressed a similar claim by an
employer that it could not be held responsible for the unfair
labor practices of several supervisors, because the employer
had not authorized or ratified those employees’ conduct.
Again, the Court held that the supervisors’ conduct was
chargeable to the employer, reiterating that the question of
employer liability under the NLRA did not hinge on strict
principles of agency or respondeat superior:

“The question is not one of legal liability of the employer in
damages or for penalties on principles of agency or respon-
deat superior, but only whether the Act condemns such
activities as unfair labor practices so far as the employer
may gain from them any advantage in the bargaining pro-
cess of a kind which the Act proscribes.”

311 US at 521.

After the Supreme Court decided International
Association of Machinists and Heinz, Congress enacted the
Labor Management Relations Act of 1947, also known as the
Taft-Hartley Act. Labor Management Relation Act of 1647,
ch 120, 61 stat 136 (1947). That Act amended various provi-
sions of the NLRA, including the definition of an “employer.”
The Taft-Hartley amendments changed the definition to its
current text: “any person acting as an agent of an employer,
directly or indirectly.” 29 USC § 152(2). Despite the narrow-
ing of the definition of an employer from any “person” acting
in the interest of an employer to any person acting as an
“agent” of an employer, however, federal courts have repeat-
edly affirmed the liberal principles of employer responsi-
bility originally announced in International Association
of Machinists and Heinz. See, e.g., Ingress-Plastene, Inc. v.
NLRB, 430 F2d 542, 545 n 3 (7th Cir 1970) (whether per-
son who committed unfair labor practice was supervisor “is
irrelevant so long as she gave the appearance of acting on
behalf of management”; citing International Association of
Machinists); Amalgamated Clothing Workers of America,
AFL-CIO v. NLRB, 371 F2d 740, 744 (DC Cir 1966) (employer
responsibility under NLRA “is not controlled by refinements
of the law of agency”); NLRB v. Houston Chronicle Pub. Co.,
300 F2d 273, 280 (5th Cir 1962) (because supervisor was
in position to give his subordinates cause to believe that he

830 pO

was acting for management, his unfair labor practice was
attributable to employer; citing International Association of
Machinists and Heinz); NLRB v. Hart Cotton Mills, 190 F2d
964, 974 (4th Cir 1951) (employer responsibility for acts of
supervisory employees “is not determined by applying prin-
ciples of agency or respondeat superior but by ascertaining
whether the conduct or activity is condemned by the Act”;
citing Heinz).®

Thus, even after the Taft-Hartley amendments, fed-
eral courts have continued to determine employer responsi-
bility for unauthorized actions of an individual by analyzing
whether employees would reasonably believe that the indi-
vidual was acting for and on behalf of the employer. See,
eg., American Door Co., Inc., 181 NLRB 37, 48 (1970) (cru-
cial question in determining whether employer is respon-
sible for acts of “so called agents” is whether, considering
all circumstances, “the employees could reasonably believe
that [the purported agent] was reflecting company policy,
and speaking and acting for management”) (citing NLRB
v. Des Moines Food, Inc., 296 F2d 285, 287 (8th Cir 1961));
Irving Air Chute Co. v. NLRB, 350 F2d 176, 179 (2d Cir
1965) (broad rule under NLRA places responsibility on
employer for acts of supervisor when employees “would have
just cause to believe” that supervisor was acting for and on
behalf of company); NLRB v. Geigy Co., 211 F2d 553, 557
(9th Cir 1954) (whether statements of foreman were attrib-
utable to employer depended on whether employees “might
reasonably have believed” that, in making them, foreman
was acting for and on behalf of management).

In applying that “reasonable belief” standard, fed-
eral courts have considered “all factors, often subtle, which

® ‘That is so despite legislative history indicating an intent for the new defi-
nition of employer to incorporate traditional agency principles. See, e.g., NLRB v.
International Longshoremen’s and Warehousemen’s Union Local 10, 283 F2d 558,
563 (9th Cir 1960) (noting that “Senator Taft, the life-force behind the bill as
enacted, repeatedly remarked on the floor of the Senate that common law rules of
agency were to govern the question of who acted for whom for purposes of deter-
mining culpability under the Act”). Indeed, some federal decisions have applied
strict principles of agency law when determining employer liability under the
NLRA. For the reasons that we explain, however, we find those federal cases that
have applied the broader “reasonable belief” standard to be more consistent with
the statutory purpose of protecting employees’ labor rights and, therefore, more
persuasive.

Po 831

restrain the employees’ choice and for which the employer may
fairly be said to be responsible.” International Association of
Machinists, 311 US at 80. “It is unnecessary that all factors
be present in each case, for one or more may be sufficient to
authorize the inference [that the individual acted on behalf
of the employer.]” NLRB v. Pacific Gas & Electric Co., 118
F2d 780, 787-88 (9th Cir 1941). Among other factors, courts
have considered whether the individual acting on behalf of
the employer occupied a high-ranking position within the
company hierarchy, whether the individual’s responsibilities
put him or her in a position to be identified with management
in the eyes of employees, whether the individual set man-
agement policy, whether the individual was in a strategic
position to translate the policies and desires of management
to other employees, whether the individual had the power
to hire and fire employees, and whether the employer dis-
avowed the actions of the individual. See, e.g., International
Association of Machinists, 311 US at 80-81 (considering indi-
viduals’ position in factory hierarchy, their power to hire or
fire, and whether they exercised “general authority over the
employees and were in a strategic position to translate to
their subordinates the policies and desires of the manage-
ment”); Amalgamated Clothing Workers of America, 371 F2d
at 744 (considering employer's “lack of disavowal” of individ-
ual’s actions); McKinnon Services, Inc., 174 NLRB 1141, 1144
(1969) (whether or not individual was technically considered
“supervisor” under NLRA, “her responsibilities put her in a
position to be identified with management in the eyes of the
employees and to translate to them the policies and desires
of management”).

Having summarized the relevant federal case law,
we now consider what guidance, if any, that case law pro-
vides in determining the limits of a public employer’s lia-
bility under PECBA for the unfair labor practices of its
“designated representative.” We note, initially, that the two
statutes define an employer somewhat differently. That is
understandable, given that one statute defines an employer
in the public sector and the other defines an employer in
the private sector. Despite that difference, however, the
acts are otherwise remarkably similar. PECBA and the
NLRA are driven by the same policy of preventing employer

832 Po

interference with employees’ organizational and bargain-
ing rights. Both statutes protect those rights by proscribing
unfair labor practices, and both statutes define an “unfair
labor practice” in virtually identical terms. Compare, e.g.,
ORS 243.672(1)(a) (unfair labor practice for public employer
or its designated representative to “[i]nterfere with, restrain
or coerce employees in or because of the exercise of rights
guaranteed in ORS 243.662”), with 29 USC § 158(a) (unfair
labor practice for employer to “interfere with, restrain, or
coerce employees in the exercise of the rights guaranteed
in section 157 of this title”). Further, in identifying an
employer’s responsibility for an unfair labor practice, both
statutes provide that an employer may be held liable for the
conduct of the formal entity constituting the “employer,” as
well as for the conduct of at least some individual agents who
act on that entity’s behalf. Given the statutes’ similarities
in both text and purpose, we conclude that the legislature
intended the provisions of PECBA at issue in this case to be
interpreted in line with the preexisting case law under the
NLRA. In addition, we conclude that the “reasonable belief”
standard that federal courts have adopted in interpreting
the NLRA is a well-reasoned one, and one that best effec-
tuates the legislature’s policy goal of protecting employees’
organizational rights from employer interference.

For those reasons, we adopt the “reasonable belief”
standard under PECBA for determining which individuals
constitute a “public employer representative,” such that a
public employer may be held responsible for the unfair labor
practices committed by such individuals. Specifically, when
employees of a public employer would reasonably believe that
a given individual acted on behalf of the public employer
in committing an unfair labor practice, that individual is
a “public employer representative” under ORS 243.650(21),
and the public employer may be held liable for the conduct of
that individual under ORS 243.672(1).

In applying the “reasonable belief” standard, adju-
dicators should consider “all factors, often subtle, which
restrain the employees’ choice and for which the employer may
fairly be said to be responsible.” International Association
of Machinists, 311 US at 80. One key factor will be whether
the individual acting on behalf of the public entity occupied

Po 833

a high-ranking position within the public entity. As the fed-
eral courts have recognized, the potential for interference
with employees’ labor rights is greatest at the highest lev-
els of authority. Moreover, the greater an individual’s gen-
eral policy-making authority, the more likely that employ-
ees would reasonably believe that that individual acted on
behalf of the entity. Other relevant factors include whether
the individual acted in his or her official capacity when he or
she committed the unfair labor practice, whether the indi-
vidual had the power to hire and fire employees of the public
entity, and whether the public entity disavowed the actions
of the individual. One or more of those factors may be suf-
ficient to authorize the inference that the individual acted
on behalf of the public entity and that the entity is therefore
liable for the individual’s actions. Pacific Gas & Electric Co.,
118 F2d at 787-88.

In adopting the “reasonable belief” standard, we
reject the argument of the city and dissent that the state-
ments of an individual city councilor cannot be imputed to
the city. They argue, however, that an action by a city council
member without the concurrence of a majority of the council
has no legal effect and that, therefore, the city cannot be
liable for the unfair labor practices of an individual coun-
cil member. The dissent argues that the acts of individuals
generally do not bind public entities. 360 Or at 840 (Landau,
J., dissenting). However, this case does not involve the scope
of municipal liability under general principles of tort and
contract law. Rather, this case involves the scope of liability
for a public employer for unfair labor practices under the
specific statutory framework of PECBA.

Moreover, under the view of the city and dissent,
voting members of a public employer would be allowed to
violate PECBA with impunity. Indeed, multiple members of
a voting body could interfere with protected union activity
as long as less than a majority of the body acted. That cir-
cumstance would contravene the legislature’s express dec-
laration that “[t]he people of this state have a fundamental
interest in the development of harmonious and cooperative
relationships between government and its employees.” ORS
243.656(1). It would also be at odds with the legislative rec-
ognition that public employees “have the right to form, join

and participate in the activities of labor organizations of
their own choosing,” as stated in ORS 243.662. Indeed, the
city’s narrow interpretation—which would require a major-
ity of the council to commit a violation—does not capture
the many ways in which voting members of the council, act-
ing on behalf of the city, might “[i]nterfere with, restrain or
coerce employees in or because of the exercise of rights guar-
anteed” in PECBA. ORS 243.672(1). Such an interpretation
would therefore undermine the legislature’s intention that
PECBA broadly protect public employees’ rights against
employer interference.”

We now apply the rule that we announce today to
the facts of this case. The ERB did not address whether
Campbell was a “designated representative” of the city within
the meaning of ORS 243.672(1), such that the city neverthe-
less may be held liable for her conduct. We therefore remand
to ERB to make that determination in the first instance.
ORS 183.482(8). On remand, ERB must determine whether
city employees would reasonably believe that Campbell was
acting on behalf of the city when she wrote her letter urg-
ing city employees to decertify the union. In making that
determination, ERB should consider all relevant factors,
including, but not limited to, whether Campbell occupied
a high-ranking position within the city, whether Campbell

© Relatedly, the dissent argues that NLRA decisions imposing liability on
private employers for the acts of executive or management personnel have no
application to the Lebanon City Council because employees in the private sec-
tor have individual authority to act and city council members do not. 360 Or
848 (Landau, J., dissenting). We agree that the comparison of a public body to
executive officers in a private company is not a perfect fit. However, as we have
discussed, the provisions of PECBA evidence an intention by the legislature that
public employees in Oregon receive the same benefits and protections that the
NLRA provide to employees in the private sector. We emphasize that the rule
we adopt today is not based solely on the authority of an individual member of
a public body to act. The rationale for the rule is based instead on whether the
conduct of an individual is such that an employer may gain an advantage from

process. See NLRB v. Hart Cotton Mills, 190 F2d at 974 (employer responsibility
for acts of individuals “is not determined by applying principles of agency or
respondeat superior but by ascertaining whether the conduct is condemned by
the Act”; citing Heinz). Thus, as we have explained, although the authority of
Campbell to act on behalf of the city may—in various ways—be considered as a
relevant factor in applying the “subjective belief” test, her individual authority
does not, as a matter of law, determine whether the city may be held liable for her
conduct.

Po 835

had general policy-making authority for the city, whether
Campbell had the authority to hire and fire city employees,
whether Campbell acted within her official capacity as a city
councilor when she made her statements, and whether the
city disavowed Campbell’s statements.

Because we conclude that Campbell may have been
a “designated representative” of the city, depending on
whether city employees would have reasonably believed that
she acted on behalf of the city in urging those employees to
decertify the union, we reverse the Court of Appeals deci-
sion that Campbell could not be a “designated representa-
tive” under PECBA.

The decision of the Court of Appeals is reversed.
The case is remanded to the Employment Relations Board
for further proceedings.

LANDAU, J., dissenting.

The majority holds that the City of Lebanon may
have committed an unfair labor practice because a single
one of its City Council members, Margaret Campbell, wrote
a letter to the editor of a local newspaper expressing her
personal opinion about labor unions. The majority reaches
that conclusion despite the fact that Campbell wrote the let-
ter “as an individual and not a reflection of a majority of
the City Council, the City or [her] employer.” The majority
ignores the fact that she was not authorized to speak for the
city; that she was not designated as the city’s representa-
tive in collective bargaining negotiations; and that, in fact,
under the terms of the city charter, she had no independent
authority whatsoever.

The majority’s decision is wrong. It cannot be rec-
onciled with the terms of the statute that the city is sup-
posed to have violated. Nor can it be squared with settled
rules of statutory construction. It is justified, not by refer-
ence to what the governing statute actually says, but by the
majority’s views about the overriding policies of that statute,
informed by an extended analysis of case law construing a
federal statute that does not even apply here. Because I can-
not join in that decision, I must respectfully dissent.

836 po

The Public Employees Collective Bargaining Act
(PECBA) provides that it is an unfair labor practice for “a
public employer or its designated representative” to engage
in any of a prohibited list of actions. ORS 243.672(1). The
law thus provides that an unfair labor practice may be com-
mitted on the one hand by a government entity—“a public
employer”—and on the other hand by an individual—‘“its
designated representative.” The question in this case is
whether Campbell is a government entity or a person desig-
nated to represent a government entity.

She is neither. Certainly, Campbell is not a govern-
ment entity. She is a single member of the seven-member
governing body of the City of Lebanon. But in no reason-
able sense of the term can it be said that she is the City of
Lebanon, any more than it can be said that a single one of
the 90 members of the Oregon Legislative Assembly is the
State of Oregon. Moreover, no party claims that she is the
city’s “designated representative.” That should be the end of
the matter.

The majority nevertheless concludes that the City of
Lebanon may have committed an unfair labor practice based
on the unauthorized act of its individual council member.
The majority concludes that, in writing her letter, Campbell
acted as the city’s “designated representative.”

The majority arrives at that conclusion by reason-
ing that, although PECBA does not define the term “desig-
nated representative,” it does define a different term that
at least comes close—‘“public employer representative.” And
the statute defines that term as merely including one who
has been “specifically designated by the public employer to
act in its interests in all matters dealing with employee rep-
resentation” and related matters. ORS 243.650(21). That,
says the majority, means that the term could include other
things as well. To determine what other things the term
could embrace, the majority turns to case law construing
the federal National Labor Relations Act (NLRA), which it
reads as holding that unfair labor practices may be commit-
ted by any person whom an employee “reasonably believes”
speaks on behalf of the employer, regardless of whether the
employer designated the individual to speak on its behalf or

pe 837

took any other action to clothe the individual with apparent
authority.

The majority's reasoning does not withstand scrutiny.

To begin with, it is at odds with the text of the statute.
ORS 243.672(1) plainly provides that the only individual who
may commit an unfair labor practice is a public employer's
“designated representative.” Although the majority refers to
the ordinary meaning of the term “representative,” it curi-
ously omits any reference to the term “designated.” In fact,
it reads the word out of the statute entirely. In the majority’s
view, an individual may commit an unfair labor practice if
an employee reasonably believes the individual speaks for
the employer, regardless of whether the employer designated
the individual to act on its behalf. Longstanding principles
of statutory construction instruct that, whenever possible,
we are to give effect to all of a statute’s terms. See, e.g., State
v. Cloutier, 351 Or 68, 98, 261 P3d 1234 (2011) (“[IIf pos-
sible, we give a statute with multiple parts a construction
that will give effect to all of those parts.” (Internal quotation
marks omitted.)); Owens v. Maass, 323 Or 430, 437, 918 P2d
808 (1996) (“[Wlhenever possible, this court must construe
different provisions of a legislative enactment so as to give
effect to each provision.”). The majority fails to explain why
it is not possible to give effect to the word “designated” as it
is used in ORS 243.672(1).

The fact is that it is entirely possible to give effect
to all statutory terms in ORS 243.672(1). The term “des-
ignated representative” is not defined in the statute. We
generally assume that the legislature intended undefined
statutory phrases to be given their ordinary meaning. See,
e.g., OR-OSHA v. CBI Services, Inc., 356 Or 577, 589, 341
P3d 701 (2014) (“In the absence of evidence to the contrary,
we assume that the legislature intended words of common
usage to be given their ordinary meanings.”). The relevant
dictionary definition of the word “designate” plainly requires
some action by a designating party:

“4a: to decide upon : NOMINATE, DELEGATE, APPOINT; esp : to
assign officially by executive or military authority <the
operating agency last designated by the president> <the

838 Po

tanks had been designated to exploit a breakthrough of the
enemy’s defenses —R. D. Gardner> b : to induct in a rank
or position <the supreme council is designated as the high-
est organ of state power> <the duke had been designated
as king of a puppet state> ¢ : to choose and set apart (as by
public will or in the process of government administration)
<a successful designating petition places the name of the
candidate on the primary ballot —Bk. of Civic Definitions>
<control dams designated for construction> <finally Queen
Victoria was asked to ~ a site —B. K. Sandwell>

cee oe eo ae

“syn NAME, NOMINATE, ELECT, APPOINT: DESIGNATE may
apply to choosing or detailing a person or group for a certain.
post by a person or group having power or right to choose
<the following deputies were designated by the three min-
isters to carry on the council’s work —Americana Annual>
<the vice-chairman is elected from among the commission-
ers, and the president designates the chairman —Current
Biog.>.”

Webster’s Third New Intl Dictionary 612 (unabridged ed
2002).

Thus, as enacted by the legislature, ORS 243.672(1)
provides that an unfair labor practice may be committed
either by a public employer or by a person that has been
named, nominated, elected, appointed, or assigned the posi-
tion of representative of the public employer. By its terms, it
covers no others.

To be sure, reading the statute as actually writ-
ten gives it a narrower scope than the majority appears to
desire. It leaves out individuals who have not been desig-
nated as representatives of a public employer but who might
be perceived to be acting on behalf of a public employer. That
may well be the case. But our job is to take a statute as we
find it, not to rewrite it to conform with the policies that we
suppose the legislature may have had in mind, but did not
actually enact into law. Wyers v. American Medical Response
Northwest, Inc., 360 Or 211, 221, 377 P3d 570 (2016) (“We
are obligated to take a statute as we find it.”).

Even assuming for the sake of argument that we
may ignore the reference to a public employer’s “designated

Po 839

representative” in ORS 243.672(1) and substitute the broader
term “public employer representative” mentioned elsewhere
in PECBA, the majority’s reasoning still fails to conform to
well-established principles of statutory construction.

As the majority notes, ORS 243.650(21) provides
that the term “public employer representative” includes one
who is “specifically designated” to represent the employer.
The statute leaves open the possibility that others not specif-
ically designated may also be included. Its phrasing reflects
an obvious parallel to common-law principles of agency,
with which we presume the legislature was familiar. See,
e.g., State v. Ramos, 358 Or 581, 596, 368 P3d 446 (2016) (we
presume that the legislature is aware of existing common
law); Blachana, LLC v. Bureau of Labor and Industries, 354
Or 676, 691, 318 P3d 735 (2014) (same). And, when common-
law principles would otherwise apply, we do not assume
that the legislature intended to alter them unless there is
statutory text indicating such an intention. See, e.g, ODOT
v, Alderwoods (Oregon), Inc., 358 Or 501, 524, 366 P3d 316
(2015) (“Nothing in the statutory text suggests that, by pro-
viding such a procedure, the legislature intended to alter
the common law.”).

In this case, common-law principles of apparent
authority are well settled. There are essentially two cate-
gories of agents—those whose authority is actual and those
whose authority is “apparent.” See Taylor v. Ramsay-Gerding
Construction Co., 345 Or 408, 409, 196 P3d 532 (2008)
(“Generally speaking, an agent can bind a principal only
when that agent acts with actual or apparent authority.”).
ORS 243.650(21), in referring to those who are “specifically
designated’ to act as the employer’s representative in collec-
tive bargaining and related matters, appears to capture the
former type of agent. That leaves only the latter type, those
whose authority is apparent, but not actual.

Under Oregon law, however, the liability of a
principal for the acts of one with apparent authority is
predicated on a showing that the principal engaged in
some affirmative conduct that created the appearance of
authority—that is, conduct that caused a third party rea-
sonably to believe that the principal had consented to have

840 PO

the apparent agent act on the principal’s behalf. See, e.g.,
Eads v. Borman, 351 Or 729, 736, 277 P3d 503 (2012)
(apparent authority “can be created only by some conduct of
the principal which, when reasonably interpreted, causes a
third party to believe that the principal consents to have
the apparent agent act for him on that matter”). An agent’s
actions, by themselves, are not sufficient. Taylor, 345 Or at
410 (“An agent’s actions, standing alone and without some
action by the principal, cannot create authority to bind the
principal.”).

In this case, it is undisputed that the city took no
action nor engaged in any conduct that created the appear-
ance that Campbell had authority to speak for it on collec-
tive bargaining and related matters. In other words, even
allowing for the majority's substitution of “public employer
representative” for the statutory phrase “designated repre-
sentative,” there is no statutory basis for concluding that
Campbell was such a public employer representative in this
case.

In reaching its contrary conclusion, the majority dis-
penses with those general principles of agency law—in par-
ticular, the requirement that a principal take some action to
clothe an agent with apparent authority—without citing any
statutory wording that suggests the legislature intended to
do so. Rather, it relies on federal court decisions interpret-
ing the provisions of the NLRA setting out who may commit
an unfair labor practice under that federal law. Here, the
majority strays far from well-established principles of statu-
tory construction.

Generally, when the Oregon legislature borrows
statutory wording from another jurisdiction, we assume
that, in the process, the legislature also borrows existing
controlling case law interpreting that legislation. Jones v.
General Motors Corp., 325 Or 404, 418, 939 P2d 608 (1997)
(“If the Oregon legislature adopts a statute or rule from
another jurisdiction’s legislation, we assume that the Oregon
legislature also intended to adopt the construction of the leg-
islation that the highest court of the other jurisdiction had
rendered before adoption of the legislation in Oregon.”). But
it bears some emphasis that the critical prerequisite is that

pe 841

the Oregon legislature borrowed statutory wording from the
other jurisdiction. If the legislature, for example, borrows
only part of the text of an enactment from another jurisdic-
tion, then the rule applies only to the part of the text that
the legislature actually borrowed, and not to other parts of
the other jurisdiction’s law.

Taylor v. Baker, 279 Or 139, 566 P2d 884 (1977),
illustrates the point. At issue in that case was the proper
construction of Oregon’s summary judgment rule, some
of which had been patterned after Rule 56 of the Federal
Rules of Civil Procedure. One subsection of the federal
rule—Rule 56(d)—the legislature had not adopted. This
court concluded that it was obliged to give great weight to
“federal cases interpreting those aspects of Rule 56, other
than subsection (d) thereof, and decided prior to the enact-
ment of the state’s summary judgment statute.” Id. at 142
n 2 (emphasis added); see also Jones, 325 Or at 418 (same).
Thus, the court held that federal cases informed our inter-
pretation of the provisions borrowed from the federal law,
but not of the provisions that departed from the text of the
federal rule.

Here, the majority disregards that settled rule of
construction. The Oregon legislature may well have bor-
rowed parts of PECBA from the NLRA: specifically, the pro-
visions that define what constitutes an unfair labor prac-
tice. But it did not borrow every provision from the NLRA.
See Elvin v. OPEU, 313 Or 165, 175 n 7, 832 P2d 36 (1992)
(although similar in some respects, PECBA “is not identical
to the NLRA”). Significantly, it did not borrow the definition
of who may commit an unfair labor practice.

That comes as no surprise. The NLRA is a private
sector labor statute and prohibits a private “employer” from
engaging in any unfair labor practice. 29 USC § 158(a). As
defined by the NLRA, the term “includes any person act-
ing as an agent of an employer, directly or indirectly.” 29
USC § 152(2). It disclaims ordinary agency requirements
of express authorization or ratification. 29 USC § 152(13).
Moreover, it expressly excludes public employers, such as the
federal government, any state government, or any subdivi-
sion of state government. 29 USC § 152(2).

"842 PO

The Oregon legislature did not adopt those provi-
sions of the NLRA in enacting PECBA, a public sector labor
statute. In particular, in spelling out which individuals may
engage in an unfair labor practice, the Oregon legislature
rejected the phrasing of the NLRA that refers to “any per-
son acting as an agent of an employer, directly or indirectly”
and specified instead that such forbidden practices may only
be committed by a public employer's “designated represen-
tative,” a term that nowhere appears in the federal law.
Moreover, the Oregon legislature declined to include the pro-
vision in the NLRA that disclaims the application of certain
ordinary principles of agency law. In consequence, there is
no textual connection between the state and federal statutes
that would provide the basis for concluding that preexisting
cases interpreting the federal law inform the meaning of the
state law.

The majority nevertheless resorts to federal case law
interpreting the NLRA for four reasons. None is availing.

First, the majority observes that, “[i]n many respects,
PECBA was patterned after the NLRA,” including paral-
lel statements of policy and definitions of what constitutes
an unfair labor practice. AFSCME Council 75 v. City of
Lebanon, 360 Or 809, 817, 388 P3d 1028 (2017). That, how-
ever, is not how the borrowed-statute canon works. The jus-
tification for the canon is the idea that, the legislature hav-
ing borrowed statutory text from another jurisdiction, it is
fair to assume that the legislature was aware of controlling
case law construing that text. See, e.g., Lindell v. Kalugin,
353 Or 338, 355, 297 P3d 1266 (2013) (“As a general rule,
when the Oregon legislature borrows from a statute origi-
nating in another jurisdiction, there is a presumption that
the legislature borrowed controlling case law interpreting
the statute along with it.”). In that light, it makes no sense
to say that, because the Oregon legislature borrowed some
text from a federal statute, we may look to federal case law
construing provisions of the federal statute that the Oregon
legislature chose not to adopt.

Second, the majority observes that this court has
looked to federal case law interpreting the NLRA in a num-
ber of previous PECBA cases. 360 Or at 825-26. True enough.

pe 8438

But the court did so only with respect to case law constru-
ing portions of the NLRA that the Oregon legislature actually
adopted. In Elvin, 318 Or 165, for example, the court addressed
whether the provision of PECBA codified at ORS 243.676(2)(c)
authorized the Employment Relations Board to order refunds
of unlawfully collected fair share payments. The court looked
to federal NLRA cases construing “the provision from which
ORS 243.676(2)(c) is derived.” Id. at 178. Such cases are per-
fectly consistent with the borrowed-statute canon of construc-
tion. The majority’s opinion in this case is not.

Third, in a footnote, 360 Or at 824 n 7, the majority
insists that, in any event, there is the required textual con-
nection between PECBA and the NLRA in that both stat-
utes use the word “employer.” It is certainly true that both
state and federal statutes use the same word. But it is also
beside the point, which is that the state and federal laws
define that word differently. And it is precisely the defini-
tional differences that undercut any reliance on the federal
law to inform the meaning of PECBA.

Fourth, in the same footnote the majority offers
the alternative argument that, under this court’s opinion in
State v. Walker, 356 Or 4, 23 n 9, 333 P3d 316 (2014), tex-
tual differences between state and federal statutes are no
impediment to applying the borrowed-statute canon. With
respect, the majority reads too much into that decision. In
Walker, the court addressed the Oregon racketeering stat-
ute’s definition of the term “enterprise,” which was modeled
after the federal statute’s definition of the same term. The
court noted that the Oregon definition altered “somewhat”
the wording of the federal definition “to clarify the expansive
scope of the term and thereby avoid interpretative issues
that were arising in federal courts.” Jd. The slight textual
differences, in other words, did not alter the substance of
the definition that the Oregon legislature borrowed from the
federal statute. The same cannot be said for the differences
between the ways that PECBA and the NLRA treat the
word “employer.” As I have pointed out, there are significant
differences between the ways that the state and federal law
define the term. The two definitions, in fact, are inconsis-
tent; among other things, the federal law expressly excludes
public employers while the state law applies only to public

844

employers. In short, there is simply no basis for looking to
federal case law construing the NLRA for guidance in inter-
preting the provisions of PECBA at issue in this case.

Even assuming for the sake of argument that it is
appropriate to substitute the phrase “public employer repre-
sentative” for the statutory term “designated representative”
and that it is appropriate to look to federal case law to inter-
pret that substituted phrase, the federal case law does not
provide support for the conclusion that the majority draws
from it. The majority relies on some broad statements in a
number of federal court opinions, which the majority reads as
dispensing with general principles of agency law in determin-
ing who has committed an unfair labor practice. The majori-
ty’s reading of the federal case law, however, is mistaken.

As originally enacted, the NLRA defined an
“employer” who could engage in an unfair labor practice to
include “any person acting in the interest of an employer,
directly or indirectly.” 49 Stat 450 (1935). The question arose
whether the law required express authorization or ratifica-
tion for an employer to be liable for the unfair labor practice
of an individual acting in its interest. The United States
Supreme Court answered that question in the negative
in International Ass’n of Machinists, Tool and Die Makers
Lodge No. 35 v. Labor Board, 311 US 72, 80, 61S Ct 83, 85
L Ed 50 (1940), and H. J. Heinz Co. v. Labor Board, 311 US
514, 521, 61 S Ct 320, 85 L Ed 309 (1941).

In response to those decisions, in 1947 Congress
enacted amendments to the NLRA as part of what is known.
as the Taft-Hartley Act. Among other things, the amend-
ments modified the definition of an “employer” to include “any
person acting as an agent of an employer, directly or indi-
rectly.” 29 USC § 152(2) (emphasis added). It also, as I have
noted earlier, specifically provided that, “{iln determining
whether any person is acting as an ‘agent’ of another person
so as to make such other person responsible for his acts, the
question of whether the specific acts performed were actually
authorized or subsequently ratified shall not be controlling.”
29 USC § 152(13). The latter amendment essentially codified
the Supreme Court’s holdings in International Association of
Machinists and Heinz. Legislative history of the Taft-Hartley

pO 845

Act makes clear that, in providing that actual authorization
or ratification is not required, Congress intended that ordi-
nary common-law agency principles otherwise do apply. See
generally Local 1814, Intern. Longshoremen’s Ass‘n, AFL-CIO
v. NLRB, 735 F2d 1384, 1394 (DC Cir 1984) (“Beyond doubt,
the legislative intent of this provision was to make the ordi-
nary law of agency applicable to the attribution of individual
acts to both employers and unions.”); NLRB v. International
Longshoremen’s and Warehousemen’s Union, Local 10, 283
F2d 558, 563 (9th Cir 1960) (noting that “Senator Taft, the
life-force behind the bill as enacted, repeatedly remarked on
the floor of the Senate that common law rules of agency were
to govern the question of who acted for whom for purposes of
determining culpability under the Act”).

Since the enactment of the Taft-Hartley Act, the
National Labor Relations Board has consistently turned to
common-law agency principles in determining whether an
employer has engaged in an unfair labor practice based on
the actions of one of its employees. In fact, early decisions of
the NLRB relied on the Restatement of Agency in expressly
holding that apparent authority under the NLRA requires
“written or spoken words or any other conduct of the prin-
cipal” that causes a third person reasonably to believe that
the agent has authority to act for that principal. See, e.g.,
Nevada Tank & Casing Co., 144 NLRB 123, 129 (1963) (quot-
ing Restatement of Agency § 27). As the NLRB explained
more recently, “[a]pparent authority is created through a
manifestation by the principal to a third party that supplies
a reasonable basis for the latter to believe that the principal
has authorized the alleged agent to do the acts in question.”
Dentech Corp., 294 NLRB 924, 925 (1989).

1 The NLRB’s reliance on common-law agency prineiples of apparent author-
ity is longstanding and continues down to the present. See, e.g., Pratt (Corrugated
Logistics), LLC, 360 NLRB No. 48 (2014) (labor relations consultant held out by
employer as conduit for transmitting information to and from management held
to be agent of employer); Int'l Union, Security, Police & Fire Profs of America,
360 NLRB No 57 (2014) (union steward held to be union’s agent because he han-
dled grievances, represented employees in disciplinary meetings, and resolved
disputes without union president’s approval); Snelling Personnel Services, Inc.
Bill Mudd Electric Co., 37 NLRB AMR 2 (2002) (holding that “[ulnder the com-
mon law prineiples of agency and general and apparent authority,” agent acted for
employer); Sterling Faucet Co., 203 NLRB 1031, 1038 (1973) (agents had appar-
ent authority because they “were held out to the employees by the employer as
its agents”); Smith’s Transfer Corp. of Staunton, Va., 162 NLRB 143, 157 (1966)

846 Pe

Federal appeals courts have likewise looked to
common-law principles of agency—which require actions on
the part of the employer to clothe an employee with appar-
ent authority—in determining whether a person reasonably
could believe that an individual speaks for, or acts for, the
employer. See, e.g., NLRB v. Georgetown Dress Co., 587 F2d
1239, 1244 (4th Cir 1976) (“Whether an agency relation-
ship exists under the [NLRA] is to be determined under
the general common law of agency.”); NLRB v. Birmingham
Publishing Co., 262 F2d 2, 8 (5th Cir 1958) (employee speaks
for employer “[i]f an employee *** is clothed with the appar-
ent authority to speak for the employer”).?

(“[TJhe respondent employer by acquiescing in, and encouraging, interrogation
and polling of the men *** clothed these employees in the eyes of their fellow
workers with the apparent authority to speak for the employer.”). I am not aware
of a single federal court decision holding that the board has erred in relying on
those principles.

2 The majority acknowledges that “some” courts so hold, but insists that oth-
ers apply a broader test that disregards that restriction of common-law agency.
The majority is mistaken about that. Nearly every federal circuit court has held
that the NLRA incorporates common-law principles of apparent authority. See,
eg., Fleming Companies, Inc. v. NLRB, 349 F3d 968, 973 (7th Cir 2008) (“To
hold an employer liable, the individual who made the statement must act as an
agent of the employer. An agent has apparent authority when an employer takes
steps that would reasonably lead third persons to believe that the designated
employee was authorized to take certain actions on behalf of the employer.”
Internal citations omitted.)); Overnite Transp. Co. v. NLRB, 140 F3d 259, 266
(DC Cir 1998) (“Apparent authority exists when the principal engages in conduct
that, reasonably interpreted, causes the third person to believe that the princi-
pal consents to have the act done on his behalf by the person purporting to act for
him,” (Internal quotation marks omitted.)); BE&K Const. Co. v. NLRB, 23 F3d
1459, 1466 (8th Cir 1994) (“Congress has set out the policy that the usual princi-
ples of agency apply in determining liability for unfair labor practices.”); NLRB
v. Int'l Union of Electrical, Radio & Machine Workers, AFL-CIO, Local 745, 759
F2d 538, 584 (6th Cir 1985) (“Agency may be found to exist on the basis of actual
authority, ratified authority or apparent authority. In this case the union clothed
the stewards with apparent authority”); Laborers and Hod Carriers Local
No. 41 v. NLRB, 564 F2d 834, 839 (9th Cir 1977) (“Common law agency princi-
ples determination of this factual issue; therefore, implied or apparent author-
ity is sufficient.”); NLRB v. Local Union No. 3, Intern. Broth. of Elec. Workers,
AFL-CIO, 467 Fad 1158, 1159 (24 Cir 1972) (“Common law rules of agency govern;
authority may be implied or apparent, as well as express.”); United Steelworkers
of America v. CCI Corp., 395 F2d 529, 532 (10th Cir 1968) (Taft-Hartley Act “pro-
vided that the actual fact of authorization or subsequent ratification would not
be controlling of agency questions. This has been properly construed as opening
the way for application of general rules of agency and particularly the rules of
apparent authority.”); NLRB v. Mississippi Products, 218 F2d 670, 673 (5th Cir
1954) (“[S]ince respondent clothed [an individual] with apparent authority to
speak for it and did actually on one occasion use his voice to make an antiunion
speech, it may fairly said to be responsible for his conduct.” (Internal quotation
marks omitted.)).

pT 847

The cases on which the majority relies are not to
the contrary. The majority does invoke some broadly worded.
phrases in several cases, which it takes to suggest that—
contrary to the wording and legislative history of the Taft-
Hartley Act and the weight of federal case law interpreting
it—common-law agency principles are no longer relevant.
Examined in proper context, however, those statements pro-
vide no support for the conclusion that the majority asserts.

For example, the majority cites NLRB v. Hart Cotton
Mills, 190 F2d 964, 974 (4th Cir 1951), for the proposition
that employer responsibility for acts of supervisory employ-
ees “is not determined by applying principles of agency or
respondeat superior.” 360 Or at 830. That case, however, was
about the significance of an employer's lack of ratification of
certain anti-union statements that had been made by one of
its supervisors. The company argued that it was not respon-
sible for those statements because they were contrary to its
policy and had not been ratified by it. The court agreed with
the employer. It began by noting that, in Heinz, the Supreme
Court had concluded that express authority or ratification
were not required. Id. at 974. It then went on to conclude

that, nevertheless, “isolated statements by supervisors, con-
trary to the proven policy of the employer and neither autho-
rized, encouraged, nor acquiesced in by him, do not consti-
tute substantial evidence of” an unfair labor practice. Id.
The decision thus offers no support for the majority’s view
that ordinary principles of apparent agency are no longer
relevant.

For another example, the majority cites Amalgamated
Clothing Workers of America, AFL-CIO v. NLRB, 371 F2d
740, 744 (1966), for the proposition that employer respon-
sibility for violations of the NLRA “is not controlled by the
refinements of the law of agency.” 360 Or at 829. Again, how-
ever, the statement was made in refutation of an argument
that the employer had not expressly authorized the actions
or statements of certain individuals who had made anti-
union statements. The court rejected the argument, noting
that the individuals were involved directly in the company’s
affairs, spoke with employees about management expecta-
tions and employee grievances, and made hiring recom-
mendations to the management. “In this setting,” the court

848 po

explained, “responsibility under the Act is not controlled by
refinements of the law of agency. The [c]lompany’s silence
may properly be taken by the Board as recognition or rati-
fication” of the actions of the individuals at issue. 371 F2d
at 744, The court said nothing about abandoning general
principles of agency law that govern apparent authority.

The majority also cites a number of decisions hold-
ing that certain executive officers and management person-
nel may be held to speak for their employers in determining
whether the employer committed an unfair labor practice.
360 Or at 828-29. Those decisions, however, are entirely con-
sistent with the common-law agency principles that I have
mentioned. Their rationale is that the companies for which
those persons worked had given the executive officers and
managers individual authority to set company business pol-
icies. See generally Unfair Labor Practice, within National
Labor Relations Act or Similar State Statute, Predicated upon
Statements or Acts by Employees Not Expressly Authorized
by Employer, 146 ALR 1062, § II (1948) (“[I]t is well estab-
lished that an employer is responsible for statements or acts
of those executive officers whose duty it is to determine his
general business policies, including his labor policy.”). That
only makes sense. When executive or management person-
nel have individual authority within a company to set com-
pany policies, an employee may reasonably believe that they
also have authority to speak for the company as to labor
matters.

For example, the majority cites Morgan Precision
Parts v. NLRB, 444 F2d 1210, 1215 (5th Cir 1971), a case
involving anti-union statements of the company’s owner.
Similarly, the majority relies on Madison Brass Works, Inc.
v. NLRB, 381 F2d 854, 857 (7th Cir 1967), and NLRB v.
Lightner Pub. Corp. of Illinois, 118 F2d 621, 625 (7th Cir
1940), both of which involved a company’s president. And
it relies on NLRB v. Jahn & Ollier Engraving Co., 123 F2d
589, 593 (7th Cir 1941), which involved executive officers of
the company, as well as foremen whom the court found “did
exercise some authority over employees and were in a stra-
tegic position to translate to their subordinates the policies
and desires of the management.” Id.

po 849

In this case, Campbell had no such individual
authority to speak for the City of Lebanon. She had no
authority to hire, fire, or discipline any city employee. She
had no authority to participate as a member of the city’s
labor negotiating team.

Certainly, Campbell was a member of the City
Council. In some cases, depending on the terms of the stat-
ute or charter that defines the authority of a member of a ©
governing body, an individual member of a city council may
have certain day-to-day management authority. See, eg.,
Portland City Code 3.06.010 (management of departménts
are assigned to individual members of the City Council).
And, in such cases, an employee might have good reason to
believe that such a council member speaks for the city on
labor matters.

But that is not the case here. Under the terms of the
Lebanon City Charter, Campbell had no individual author-
ity at all. The only authority she possessed was to vote as a
member of the council. Without a majority of the council con-
curring, her views had no force and effect at all, as a matter
of law.

Under the reasoning of the very federal cases on
which the majority relies, then, the conclusion should be
that no reasonable person could believe that Campbell spoke
for the city as to labor matters. The linchpin of those cases—
the individual authority of the executive or management
personnel—has no application to a multi-member governing
body like the Lebanon City Council.

In that regard, it is worth noting that the majority
has cited not one federal court or NLRB decision holding a
company liable under the NLRA based on the actions of a
single member of a multi-member body, such as a board of
directors. I submit that there is a reason for that: Because
individual members of such boards have no individual
authority, there is no basis for an employee to believe that
they speak for the company. Thus, even under the majority’s
test, the claim against the city in this case fails.

In short, the majority’s opinion is contrary to settled
law. It conjures a test not from the text of Oregon law, but

PT
850 es

from a misreading of federal cases construing a provision of
the NLRA that the Oregon legislature chose not to adopt.
Moreover, the majority ignores the fact that, even under
its test, the unauthorized actions of a single member of a
multi-member governing body cannot amount to an unfair
labor practice.

At bottom, the majority’s decision is predicated on
its view that the legislation must be read “expansively” to
“broadly protect public employees’ rights.” 360 Or at 834.
With respect, such appeals to general policy provide no jus-
tification for avoiding the terms of the statute that the legis-
lature enacted into law. As this court cautioned in Halperin
v. Pitts, 352 Or 482, 496, 287 P3d 1069 (2012), “we simply
do not have authority to rewrite the terms of a statute to
accomplish what we may suspect the legislature intended
but did not actually enact into law.” In my view, the statute
should be interpreted and applied as written, without the
gloss borrowed from a mistaken understanding of case law
interpreting a portion of a federal statute that the Oregon
legislature never adopted.

Balmer, C. J., and Brewer, J., join in this dissenting
opinion.