Opinion ID: 835357
Heading Depth: 2
Heading Rank: 3

Heading: Plaintiff's claim against OHSU

Text: Under Smothers, the first issue we must address is whether the common law would have recognized plaintiff's negligence claim against OHSU. OHSU contends that plaintiff would not have had a claim against it, because OHSU would have been entitled to sovereign immunity under the common law of Oregon. If OHSU would have been entitled to sovereign immunity at common law, then the OTCA's limitation of a claim against OHSU would not violate Article I, section 10, because the common law would not have recognized a cause of action against OHSU for the injury alleged. See Hale v. Port of Portland, 308 Or. 508, 518, 783 P.2d 506 (1989) (holding that a statute that abolishes or limits a claim against a public entity does not violate Article I, section 10). We conclude that OHSU would have been entitled to sovereign immunity at common law because, among other reasons, OHSU is a state-created entity that performs functions traditionally performed by the state. As previously noted, the Court of Appeals concluded that OHSU would have been immune from liability at common law and therefore rejected plaintiff's Article I, section 10, argument regarding OHSU. Clarke, 206 Or.App. at 622, 138 P.3d 900. The court reasoned that a plaintiff's remedies against a public body created by the state to perform functions on behalf of the state would have been understood by the drafters [of the Oregon Constitution] to have been entirely dependent on the will of the legislature. Id. at 618, 138 P.3d 900. The Court of Appeals concluded that OHSU was such a public body because, according to the text of the statute creating it, OHSU is a state-created public corporation, which performs governmental functions. Id. at 621-22, 138 P.3d 900. The court therefore held that, because plaintiff would have had no absolute right to a common-law action against OHSU, plaintiff's claim against OHSU was not protected by Article I, section 10. Id. at 622, 138 P.3d 900. We now address plaintiff's challenge to that conclusion. Our Constitution is framed on the premise that the state is immune from suit   . Vendrell v. School District No. 26C et al, 226 Or. 263, 278, 360 P.2d 282 (1961). That premise is embodied in Article IV, section 24, of the Oregon Constitution, which provides in relevant part, Provision may be made by general law, for bringing suit against the State, as to all liabilities originating after, or existing at the time of the adoption of this Constitution[.] Because the doctrine of sovereign immunity is implicit in the constitution, this court may not abolish the doctrine; instead, the doctrine may only be waived or altered by the legislature pursuant to a general law. Vendrell, 226 Or. at 278-79, 360 P.2d 282. Although the doctrine is constitutionally protected, this court interprets the doctrine of sovereign immunity within the narrowest possible bounds consistent with the constitutional provision. State v. Shinkle, 231 Or. 528, 539, 373 P.2d 674 (1962). With those principles in mind, we now analyze whether OHSU would have enjoyed sovereign immunity at common law. Article IV, section 24, presumes that the State is immune from liability, but does not specify what entities are encompassed by that term. This court has said that, in addition to the state itself and its agencies, entities that are instrumentalities of the state enjoy full immunity from suit. Hale, 308 Or. at 518, 783 P.2d 506. An instrumentality of the state perform[s] state functions, id. at 518, 783 P.2d 506. See also James & Yost v. Board of Higher Edu., 216 Or. 598, 600, 340 P.2d 577 (1959) (an instrument of the state is charged with carrying out one of the functions of government). [6] Additionally, an instrumentality of the state has such powers and duties only as the state entrusts to [it] and these powers and duties are set forth by statutory enactment. James & Yost, 216 Or. at 600-01, 340 P.2d 577. Our previous cases provide some guidance as to what constitutes an instrumentality of the state. In Hale, this court concluded that the Port of Portland was an instrumentality of the state entitled to immunity from civil liability. Hale, 308 Or. at 517-518, 783 P.2d 506. The court noted that the Port was created by the legislature to have full control of [the Willamette and Columbia Rivers] at [Portland, East Portland and Albina], and between said cities and the sea, so far and to the full extent that this State can grant the same. Id. at 517, 783 P.2d 506 (internal quotation marks and citation omitted). Although the Port's functions had expanded since its creation to include serving the greater Pacific Northwest, the court concluded that the Port remained an instrumentality of the state because the Port continued to promote the shipping and maritime interests of the Portland area. Id. at 518, 783 P.2d 506. This court also has used the term instrument[s]    of the state in a case which determined that the State Board of Higher Education enjoyed sovereign immunity. James & Yost, 216 Or. at 600-01, 340 P.2d 577. Noting that the State Board of Education was not a separate and distinct entity from the state, the court also described it as an instrument or arm of the state, charged with carrying out one of the functions of government, to-wit, the education of the peoples of the state. Id. at 600, 340 P.2d 577 (emphasis added). The court explained that the State Board of Higher Education had only those powers and duties as outlined by the legislature. Id. at 600-01, 340 P.2d 577. The court concluded that [t]here can be little question but that the action is one against the state. Id. at 600, 340 P.2d 577. This court has also illuminated the concept of an instrument of state government in the context of a challenge to the creation of public corporations under Article XI, section 2, of the Oregon Constitution, which provides that [c]orporations may be formed under general laws, but shall not be created by the Legislative Assembly by special laws. In State ex rel Eckles v. Woolley, 302 Or. 37, 726 P.2d 918 (1986), the court evaluated whether the legislature's creation of the State Accident Insurance Fund Corporation violated Article XI, section 2. The court explained that Article XI, section 2, allows the creation of a corporation for a public purpose, `whose members are citizens, not stockholders; an instrument of the government with certain delegated powers, subject to the control of the legislature, and its members officers or agents of the government for the administration or discharge of public duties.' Woolley, 302 Or. at 47, 726 P.2d 918 (quoting Cook v. The Port of Portland, 20 Or. 580, 583, 27 P. 264 (1891) (emphasis added)). The court concluded that SAIF Corporation's exclusively governmental management and the absence of private investment or objective to operate for private profit excluded it from the prohibition of Article XI, section 2. Woolley, 302 Or. at 49, 726 P.2d 918. [7] From those cases, we glean certain attributes generally possessed by instrumentalities of the state. An instrumentality of the state performs a function traditionally performed by the state. Additionally, the state generally outlines the powers and duties of its instrumentalities, either via statutory enactment or some other method. An instrumentality of the state is subject, at least in part, to the control of the state in some way. We now examine whether OHSU is an instrumentality of the state and would have, therefore, been immune at common law. Plaintiff concedes that, prior to 1995, OHSU was an instrumentality of the state, but asserts that since 1995, when the legislature recreated OHSU as a public corporation, OHSU no longer is an instrumentality of the state. On the limited record before us in this proceeding we disagree with plaintiff's contention. Prior to 1995, OHSU was part of the Oregon State System of Higher Education. Since 1995, OHSU has been a public corporation under ORS 353.020; that term is defined as an entity that is created by the state to carry out public missions and services. In order to carry out these public missions and services, a public corporation participates in activities or provides services that are also provided by private enterprise. A public corporation is granted increased operating flexibility in order to best ensure its success, while retaining principles of public accountability and fundamental public policy. The board of directors of a public corporation is appointed by the Governor and confirmed by the Senate but is otherwise delegated the authority to set policy and manage the operations of the public corporation. ORS 353.010(2). The legislature also decreed that OHSU shall be a governmental entity performing governmental functions and exercising governmental powers and shall be an independent public corporation with statewide purposes and missions. ORS 353.020. Thus, the statute explicitly states that OHSU shares the first attribute of an instrumentality of the state  performing functions or providing services that the government has traditionally performed or provided. The legislature also stated, however, that OHSU shall not be considered a unit of local or municipal government or a state agency for purposes of state statutes or constitutional provisions. ORS 353.020. In our view, this statement does not alter our conclusion that OHSU would have been considered immune at common law. Whether OHSU is to be considered a unit of local or municipal government or a state agency is not the end of inquiry for determining if OHSU would have enjoyed immunity at common law. An entity can be an instrumentality of the state even if it is neither a unit of municipal government or a state agency. To make the determination of whether OHSU is an instrumentality of the state, we must examine the entire context of the statutes creating OHSU as a public corporation. That statutory context, as examined below, demonstrates that OHSU is an instrumentality of the state that would have been entitled to immunity at common law. [8] In those statutes, the legislature specified some of OHSU's public services and functions, in describing the missions and purposes of OHSU. Specifically: (1) It shall be the public policy of the Oregon Health and Science University in carrying out its missions as a public corporation: (a) To serve the people of the State of Oregon by providing education in health, science, engineering and their management for students of the state and region.      (3) The university is designated to carry out the following public purposes and missions on behalf of the State of Oregon: (a) Provide high quality educational programs appropriate for a health and science university; (b) Conduct research in health care, engineering, biomedical sciences and general sciences; (c) Engage in the provision of inpatient and outpatient clinical care and health care delivery systems throughout the state; (d) Provide outreach programs in education, research and health care; (e) Serve as a local, regional and statewide resource for health care providers; and (f) Continue a commitment to provide health care to the underserved patient population of Oregon. (4) The university shall carry out the public purposes and missions of this section in the manner that, in the determination of the Oregon Health and Science University Board of Directors, best promotes the public welfare of the people of the State of Oregon. ORS 353.030. OHSU's purposes, therefore, include promot[ing] the public welfare of the people of the State of Oregon[,] in part through providing education and health care to the people of the State. ORS 353.030(4). Without question, the particular combination of education and health care in the form of a research and teaching hospital is traditionally a function performed by the state, at least for the last century. See, e.g., James & Yost, 216 Or. at 600, 340 P.2d 577 (one of the functions of the state government is the education of the peoples of the state). OHSU's functions, as outlined by statute, demonstrate that it possesses the first attribute of an instrumentality of the state. OHSU also possesses the second attribute of an instrumentality of the state. In James & Yost, this court described an instrument of the state as possessing those powers as the state entrusts to [it]. Id. at 600, 340 P.2d 577. In ORS 353.050, the legislature outlined more than 20 [p]owers and duties of board and university officials, including setting policies for the university, entering into contracts, including partnerships and joint ventures, entering into real estate transactions, suing and being sued in its own name, investing funds, borrowing funds, and developing academic programs. The legislature also granted to the board or OHSU the power to [p]erform any other acts that in the judgment of the board or university are requisite, necessary or appropriate in accomplishing the purposes described in or carrying out the powers granted by this chapter. ORS 353.050(25). This list of powers outlined by the legislature, though broad, suggests that OHSU is an instrumentality of the state. The governance structure of OHSU also is an important indicator that OHSU is an instrumentality of the state. OHSU's board of directors consists of 10 members who, except for OHSU's president, are appointed by the Governor and confirmed by the Senate. ORS 353.040(1). Except for OHSU's president and a student member of the board of directors, each member serves a four-year term. ORS 353.040(2). The Governor has the authority to remove any board member for cause, after notice and public hearing. ORS 353.040(7). The board is charged with exercis[ing] all the powers of the Oregon Health and Sciences University and govern[ing] the university. ORS 353.050. In carrying out those powers, the university shall be a governmental entity performing governmental functions and exercising governmental powers. Id. Based on the entirety of the statutes discussed above, we conclude that OHSU is an instrumentality of the state performing state functions. We therefore agree with the Court of Appeals' conclusion that OHSU would have been entitled to immunity at common law. When an entity would have been immune from liability at common law, the legislature's choice to limit that entity's liability does not violate Article I, section 10. Hale, 308 Or. at 518, 783 P.2d 506. Therefore, the OTCA's damages limitation, as applied to plaintiff's claim against OHSU, does not violate Article I, section 10. [9]