Title: Kerr v. Bradbury

State: oregon

Issuer: Oregon Supreme Court

Document:

FILED:  March 23, 2006
IN THE SUPREME COURT OF THE STATE OF OREGON
JEFFREY B. KERR,
MICHAEL KELLEY, and JANN CARSON,
Respondents on Review,
v.
BILL BRADBURY,
Secretary of State
for the State of Oregon,
Petitioner on Review.
(CC 02C-21814; CA A121744; SC S51503)
On review from the Court of Appeals.*
Argued and submitted January 11, 2005.
Jas. Jeffrey Adams, Assistant Attorney General, Salem,
argued the cause for petitioner on review.  With him on the
briefs were Hardy Myers, Attorney General, and Mary H. Williams,
Solicitor General.
Charles F. Hinkle, ACLU Foundation of Oregon, Inc., argued
the cause and filed the briefs for respondents on review. 
Before Carson, Chief Justice,**, and Gillette, Durham,
Riggs, De Muniz,*** Balmer, and Kistler, Justices.
DE MUNIZ, C. J.
The petition for review is dismissed as moot.
*Appeal from Marion County Circuit Court, Don A. Dickey, Judge. 193 Or App 304, 89 P3d 1227 (2004).
**Chief Justice when case was argued.
***Chief Justice when decision was rendered.
DE MUNIZ, C. J.
This case concerns a challenge to the Secretary of
State's decision to approve an initiative petition for
circulation.  After both the trial court and the Court of Appeals
ruled on the Secretary of State's action, the initiative petition
ultimately was not certified to the ballot.  As we shall explain,
we conclude that the case is not justiciable, and we therefore
dismiss the petition for review as moot.
Oregon Citizens Alliance (OCA) submitted a proposed
initiative petition to the Secretary of State for placement on
the November 2004 ballot.  That petition sought to amend two
existing statutes, but included only the amendatory text.  The
Secretary of State approved the petition for circulation and
designated it Initiative Petition 16 (2004).  Plaintiffs
subsequently sought declaratory and injunctive relief against the
Secretary of State on the ground that Initiative Petition 16
violated the "full-text" provision of Article IV, section
1(2)(d), of the Oregon Constitution. (1)  Plaintiffs also moved
for an award of attorney fees.  The trial court granted the
Secretary of State's motion for summary judgment, but on review,
the Court of Appeals reversed, concluding that Article IV,
section 1(2)(d), requires initiative petitions to include the
entire text of the statute to be amended, not just the amendatory
text.  Kerr v. Bradbury, 193 Or App 304, 89 P3d 1227 (2004). 
Later, in a separate opinion, the Court of Appeals awarded
plaintiffs attorney fees.  Kerr v. Bradbury, 194 Or App 133, 93
P3d 841 (2004).  Ultimately, OCA failed to submit the requisite
number of signatures from registered voters, and Initiative
Petition 16 consequently was neither certified nor placed on the
November 2004 ballot.  
For separate reasons, both parties assert that this
case nonetheless remains justiciable, and they both ask this
court to interpret the full-text provision of Article IV.  The
Secretary of State asserts that the case is not moot because he
now must comply with the Court of Appeals' decision, which will
continue to have a practical effect on his responsibilities.  He
argues, therefore, that this court's review is necessary to
ensure a proper interpretation of the full-text provision of
Article IV, section 1(2)(d), in the future.  Plaintiffs, on the
other hand, assert that the Court of Appeals' decision to award
attorney fees prevents application of the mootness doctrine.  For
that proposition, plaintiffs rely on 2606 Building v. MICA OR I
Inc., 334 Or 175, 47 P3d 12 (2002).  In 2606 Building, this court
observed that, although the lease at issue in that case had
expired prior to its decision, the case itself was not moot
because the propriety of the attorney fees awarded below depended
on the correctness of the underlying trial court judgment
respecting the meaning of certain terms of that lease.  Id. at
179 n 2.
In Yancy v. Shatzer, 337 Or 345, 97 P3d 1161 (2004),
this court explained that, under the Oregon Constitution,
application of judicial power is limited to the resolution of
justiciable controversies.  Id. at 349.  A controversy is
justiciable when "'there is an actual and substantial controversy
between parties having adverse legal interests.'"  Id. (quoting
Brown v. Oregon State Bar, 293 Or 446, 449, 648 P2d 1289 (1982)). 
The absence of such a controversy means that a decision from this
court in such a case would be moot because it would no longer 
"'have some practical effect on the rights of the parties to the
controversy.'"  Id. (quoting Brumnett v. PSRB, 315 Or 402, 405,
848 P2d 1194 (1993)).   
We do not agree with the Secretary of State that a
decision from this court is necessary in this case because of the
practical effect that the Court of Appeals' decision will have on
his duties.  Rather, we deem that argument to be a request for an
advisory opinion.  As this court explained in Yancy, the judicial
power extends to only "the adjudication of an existing
controversy."  Yancy, 337 Or at 362. 
Likewise, we do not agree with plaintiffs that the
Court of Appeals' award of attorney fees maintains the
justiciability of this case.  Plaintiffs' rely on the following
excerpt from 2606 Building:
"Plaintiffs assert that this case is moot because the
lease expired after the Court of Appeals issued its
decision.  We disagree.  The trial court awarded
attorney fees as provided in the lease, and that award
depends on the correctness of the trial court judgment. 
Because the attorney fees award is still in controversy
and a decision from this court will have a 'practical
effect on the rights of the parties,' the case is not
moot." 
334 Or at 179 n 2 (internal citations omitted).  Plaintiffs are
correct that, in cases such as 2606 Building, this court has
concluded that, although an underlying dispute between the
parties has dissolved due to the passage of time, a trial court's
award of attorney fees set forth in a final judgment nevertheless
preserves justiciability of the underlying controversy. 
Generally, however, such cases are ones in which the trial court
automatically awarded attorney fees to the prevailing party in
accordance with a statute or the terms of a contract, and the
appellant subsequently asserted its liability for those fees as a
basis for the court to reach the merits.  This case, however, is
distinguishable from that scenario.  
Here, the only award of attorney fees occurred at the
Court of Appeals.  The Court of Appeals made that award of
attorney fees by separate order, and the Secretary of State has
not sought review of that order in this court.  Neither has the
Secretary of State asserted the state's liability for attorney
fees as a basis for this court to reach the merits of a
complicated constitutional question that has dissolved for
purposes of this case.  Because the Court of Appeals' award of
attorney fees is not before this court, plaintiff is in no
position to assert that the award of attorney fees is a basis for
this court to reach the merits of the case.
Because Initiative Petition 16 was not placed on the
ballot for the 2004 election, the underlying legal dispute
between the parties in this case became moot.  We cannot reach
the legal issue that the parties wish to have decided because
Article III (Amended), section 1, of the Oregon Constitution
constrains this court from deciding a matter that is no longer a
controversy between the parties.  See Yancy, 337 Or 363 (so
stating).
We turn next to an issue that plaintiffs have raised
regarding the appropriate disposition in this case.  Plaintiffs
recognize that this court has vacated previous judgments when a
case has become moot on appeal or on review.  See First Commerce
of America, Inc. v. Nimbus Center Assoc., 329 Or 199, 209, 986
P2d 556 (1999) (court determined matter became moot in trial
court, vacated Court of Appeals' decision, and remanded to
circuit court to vacate judgment disposing of third-party claims
and to dismiss third-party claims).  Nevertheless, plaintiffs
argue that, if this court refuses to render a decision on the
merits because we conclude that this case is moot, we should
choose not to vacate the Court of Appeals decision because this
case involves a recurring issue of public importance.  
In Nimbus, this court acknowledged that it had been
inconsistent in the manner in which it had disposed of appellate
judgments after determining that the cases underlying those
judgments had become moot.  Id. at 208.  Compare, e.g., Oregon
Republican Party v. State of Oregon, 301 Or 437, 722 P2d 1237
(1986) (court determined that electoral matter became moot when
election occurred, reversed Court of Appeals decision on the
merits, and remanded to Court of Appeals with instructions to
dismiss appeal) with Kay v. David Douglas Sch. Dist. No. 40, 303
Or 574, 738 P2d 1389 (1987) (court determined that case became
moot when graduation ceremony took place, reversed Court of
Appeals decision on merits, and remanded to circuit court with
instructions to vacate circuit court judgment).  After
acknowledging that apparent inconsistency, the court stated:
"On reflection, we hold that the better practice
when a case becomes moot on appeal or on review is to
vacate both the decision of the Court of Appeals and
the circuit court judgment.  See Lowe v. Keisling, 320
Or 570, 577, 889 P2d 916 (1995) (Unis, J., dissenting)
(so stating).  Reversal implies that a court
incorrectly decided the case on the merits.  Vacation
of a decision, by contrast, suggests nothing about the
propriety of the decision on the merits, because it
conveys the message that the decision on the merits
ought not to have been rendered at all (if the
controversy was moot when the case was decided) or
ought not have prospective effect (if the controversy
became moot after the case was decided)."
Nimbus, 329 Or at 208-09.
In describing vacatur as "the better practice when a
case becomes moot on appeal or on review," this court 
acknowledged that vacatur is an exercise of the court's equitable
power, the use of which is dependent on the circumstances of a
particular case.  That said, however, we now conclude that, while
that proposition -- together with the principles of vacatur 
identified in Nimbus -- was correct, it appears that this court's
application of vacatur in Nimbus has continued to create some
confusion.  In an effort to provide a more thorough understanding
of this court's use of the equitable power of vacatur, we take
this opportunity to examine the doctrine in greater detail.
Several United States Supreme Court cases, beginning
with United States v. Munsingwear, Inc., 340 US 36, 71 S Ct 104,
95 L Ed 36 (1950), provide a helpful explanation of the equitable
principles that underlie the doctrine of vacatur.  In
Munsingwear, the United States had brought a civil action against
Munsingwear seeking an injunction and damages for the company's
alleged violation of federal price control regulations.  The
government's claim for damages was held in abeyance pending a
decision on its injunction claim.  The injunction claim, however,
ultimately was rejected by the trial court after it concluded
that Munsingwear had not violated the relevant price regulations. 
The United States appealed that judgment, but, while the appeal
was pending, the commodity at issue was decontrolled. 
Consequently, Munsingwear successfully moved to dismiss the
government's appeal as moot, a disposition that the government
did not challenge.  The company then obtained dismissal of the
government's damages action on res judicata grounds.  The United
States appealed that decision, but a divided Court of Appeals for
the Eighth Circuit affirmed, and the United States Supreme Court
subsequently accepted the case on certiorari.
Ultimately, the Supreme Court concluded that, by
acquiescing in dismissal of the appeal without acting to nullify
the consequences of the judgment below, the United States 
essentially had bound itself to the finality of that judgment as
a matter of law.  Id. at 40-41.  In the course of articulating
that proposition, however, the Court took the opportunity to
explain why a request for vacatur would have been the more
appropriate response to Munsingwear's motion to dismiss for
mootness: 
"The established practice of the Court in dealing with
a civil case from a court in the federal system which
has becomes moot while on its way here or pending our
decision on the merits is to reverse or vacate the
judgment below and remand with a direction to dismiss. 
That was said in Duke Power Co. v. Greenwood County,
299 US 259, 267, 57 S Ct 202, 81 L Ed 178, to be 'the
duty of the appellate court.'  That procedure clears
the path for future relitigation of the issues between
the parties and eliminates a judgment, review of which
was prevented through happenstance.  When that
procedure is followed, the rights of all parties are
preserved; none is prejudiced by a decision which in
the statutory scheme was only preliminary." 
Id. at 40 (emphasis added; footnote omitted).
At the time, the Supreme Court's categorization of
vacatur as an equitable remedy appropriately employed when
external events render a controversy moot was dicta.  That
changed, however, with the Court's decision in U.S. Bancorp
Mortgage Company v. Bonner Mall Partnership, 513 US 18, 115 S Ct
386, 130 L Ed 2d 233 (1994).  Bonner Mall was a bankruptcy case
in which the debtor, Bonner Mall, had sought to stave off
foreclosure on its property by filing for Chapter 11 bankruptcy. 
A creditor, U.S. Bancorp Mortgage, moved for dismissal of the
Chapter 11 action and relief from the automatic stay of
foreclosure that usually accompanied such cases.  After the
bankruptcy court granted relief from the stay but refused to
dismiss the bankruptcy proceedings outright, the case made its
way through both the federal District Court and Court of Appeals
for the Ninth Circuit.  Eventually, the Supreme Court granted
certiorari, but, after briefs on the merits were submitted, the
parties agreed on a consensual plan of reorganization and settled
their controversy.  Both parties agreed that their settlement
plan effectively mooted the case pending before the Court. 
Creditor U.S. Bancorp Mortgage, however, asked the Court to
vacate the underlying decision of the Court of Appeals; debtor
Bonner Mall opposed that action.
The Supreme Court ultimately agreed with the parties
concerning the mootness of their case; however, it declined to
vacate the Court of Appeals' decision below.  In so ruling, the
Court squarely addressed the application of vacatur on its
merits:
"From the beginning we have disposed of moot cases in
the manner '"most consonant to justice" ... in view of
the nature and character of the conditions which have
caused the case to become moot.' The principal
condition to which we have looked is whether the party
seeking relief from the judgment below caused the
mootness by voluntary action.
"The reference to 'happenstance' in Munsingwear
must be understood as an allusion to this equitable
tradition of vacatur.  A party who seeks review of the
merits of an adverse ruling, but is frustrated by the
vagaries of circumstance, ought not in fairness be
forced to acquiesce in the judgment.  The same is true
when mootness results from unilateral action of the
party who prevailed below.  Where mootness results from
settlement, however, the losing party has voluntarily
forfeited his legal remedy by the ordinary processes of
appeal or certiorari, thereby surrendering his claim to
the equitable remedy of vacatur.  The judgment is not
unreviewable, but simply unreviewed by his own choice."
Id. at 24-25 (emphasis added; internal citations and footnotes
omitted).  The Court went on to acknowledge that, although
mootness by reason of settlement did not justify vacatur in the
case before it, at the end of the day, such determinations were,
ultimately, equitable ones, and therefore possibly subject to
different outcomes in exceptional circumstances.  Id. at 29.  
Together, Munsingwear and Bonner Mall present an analytical
template that is helpful to this court's effort to develop more
fully its own paradigm for addressing cases like the one before
us now.
We now reexamine this court's decision in Nimbus in
light of the principles underlying the equitable remedy of
vacatur enunciated in Munsingwear and Bonner Mall.  In Nimbus, a
mortgage note holder sued the mortgagors for accelerated payment
of their mortgage note, alleging that the mortgagors were in
default on their loan.  In addition to defending against that
claim, the mortgagors initiated their own action against a
third-party defendant, alleging that the third party had breached
an earlier agreement to buy the mortgage note and then sell it to
the mortgagors at a discount.  The mortgagors' third-party claims
and their affirmative defenses were identical; indeed, the third-party claims in mortgagors' prayer for relief were expressly made
dependant on the outcome of the note holder's claims against the
mortgagors.  The third-party defendant, however, successfully
moved for summary judgment, and the trial court dismissed the
claims against it; sometime after that, the mortgagors and the
note holder settled their dispute.
Despite the fact that the mortgagors essentially had
tied their third-party claims to the results of the note holder's
action, the mortgagors nevertheless attempted to keep their
third-party action alive by appealing the trial court's summary
judgment dismissal of the mortgagors' third-party claims.  Both
the Court of Appeals and this court concluded that the
mortgagors' third-party action had been mooted by their
settlement with the note holder.  At that juncture, however, 
this court mistakenly decided to vacate the judgment below, even
though the equitable factors that generally justify such action
were absent.  The mortgagors' third-party claims had not become
moot by external events; rather, they had become moot because the
mortgagors had settled their case with the note holder and, with
it, had relinquished the basis for their case against the third-party defendant.  We hold, therefore, that, to the extent that
this court's decision in Nimbus can be read unreservedly to
require vacatur in the face of controversies mooted by
settlement, such a reading is incorrect, and we expressly
repudiate that proposition here. 
From this point forward, this court will be guided by
the principles from Bonner Mall quoted above and the observation
in that case that vacatur is an "extraordinary remedy" to which a
party must show an "equitable entitlement."  Id., 513 US at 26. 
Moreover, as the Supreme Court further observed in Bonner Mall,
any choice regarding the application of vacatur must "take
account of the public interest.  'Judicial precedents are
presumptively correct and valuable to the legal community as a
whole.'"  Id. (citations omitted). 
Here, OCA's failure to submit enough signatures to have
Initiative Petition 16 placed on the ballot dissolved the
underlying constitutional conflict between the parties.  That
event, however, did not occur until after the Court of Appeals
had rendered its decision.  In short, this is not a situation in
which the Court of Appeals ought not to have rendered a decision
on the merits.
Mootness in this case did not result from any
unilateral act by the Secretary of State.  However, the issue
before us is whether we should vacate the decision of the Court
of Appeals to prevent inequity or unfairness to the Secretary of
State.  Several facts militate against requiring vacatur here. 
First, the unreviewed decision of the Court of Appeals does not
preclude the Secretary of State from prospectively executing his
official duties in accordance with the views he espoused here
regarding the "full text" provision of Article IV, section
1(2)(d).  In the future, the Secretary of State may do so and may
elect either to defend that view in response to litigation that
other parties might file, as he did here, or he may initiate a
proceeding, such as a request for a declaratory judgment under
ORS 28.020, seeking clarification of his duties under the
constitution. (2)  A denial of vacatur in this instance  will
neither inhibit the Secretary of State from administering his
office as he sees fit nor require him to acquiesce in a
constitutional interpretation with which he does not agree.
Second, the Secretary of State raised no objection to
the award of attorney fees below and has never contended that
that award preserved the justiciability of the underlying
dispute.  As noted above, we do not address the propriety of the
attorney fee award here, because that issue is not before us. 
Therefore, under the circumstances, the award of attorney fees is
not a factor that renders the denial of vacatur inequitable.
In summary, no unfairness or inequity results from
denying vacatur here.  We acknowledge that mootness has
undermined the Secretary of State's opportunity to obtain review
of the Court of Appeals' decision in this case.  However, the
practical consequences of that decision for the Secretary of
State are negligible, and we have before us no objection or
argument concerning the propriety or legal effect of the 
attorney fees award.  Consequently, the Secretary of State has
not demonstrated an equitable entitlement to the remedy of
vacatur regarding the Court of Appeals' decision.
The petition for review is dismissed as moot.
1. Article IV, section 1(2)(d), provides:
"An initiative petition shall include
the full text of the proposed law or
amendment to the Constitution.  A proposed
law or amendment to the Constitution shall
embrace one subject only and matters properly
connected therewith."
2. ORS 28.020 provides:
"Any person interested under a deed, will, written contract or other writing
constituting a contract, or whose rights, status or other legal relations are affected
by a constitution, statute, municipal charter, 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."