Opinion ID: 2607650
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Heading Rank: 4

Heading: The City and Immunity

Text: We turn to a consideration of the plaintiff's rights (if any) against the City. In Oregon, cities have never enjoyed full immunity equivalent to the state's sovereign immunity. At common law, the state's immunity from suit extended to municipal corporations only when they were engaged in so-called governmental functions. Noonan v. City of Portland, supra, 161 Or. at 221, 88 P.2d 808. Immunity did not extend to torts municipal corporations committed while performing proprietary acts, or to municipal employees. Id.; see also Blue v. City of Union, 159 Or. 5, 11-12, 75 P.2d 977 (1938) (it is established law that when a [municipal] corporation exercises a purely corporate and proprietary or private function    it is subject to suit without statutory authority, the same as any individual similarly engaged). [7] The maintenance of roads and streets was somewhat arbitrarily classified as this second, proprietary type of activity. Noonan v. City of Portland, supra, 161 Or. at 237, 88 P.2d 808. By contrast, negligent operation of a city park was treated as governmental, with concomitant immunity from suit. See Etter v. City of Eugene, 157 Or. 68, 71, 69 P.2d 1061 (1937). The exception of streets from the governmental umbrella was illogical, as this court recognized in Noonan v. City of Portland, supra, 161 Or. at 247, 88 P.2d 808, but the proprietary label stuck. [8] The governmental/proprietary dichotomy has received sustained and withering criticism. See Northwest Natural Gas Co. v. City of Portland, 300 Or. 291, 297-301, 711 P.2d 119 (1985) (citing various texts). We mention the dichotomy here not as an endorsement, but as an historical description. From early on, the legislature let cities avoid that liability, even for proprietary functions, through legislatively-enacted charter provisions absolving the cities of liability. See, e.g., Mattson v. Astoria, 39 Or. 577, 65 P. 1066 (1901). Through a convoluted series of decisions by this court, the rule evolved that these charter provisions did not violate Article 1, section 10, so long as they did not wholly eliminate the injured party's remedies. For example, charter provisions absolving both the municipality and its officers from liability were invalidated, while those that did not eliminate the injured party's right to recover from the municipal corporation's officers were upheld. [9] Our struggle with the issue of sovereign immunity and cities came to an end (it might be too much to call it a conclusion) in Noonan v. City of Portland, supra . In that case, the plaintiff had been injured when the high heel of her shoe became stuck in an allegedly defective angle iron that formed the outer edge of the curb of a Portland street. The trial court granted an involuntary nonsuit at the end of the plaintiff's case. Plaintiff appealed. The City of Portland relied principally on a section of its charter providing that a person injured by a defective street or sidewalk could sue those persons on whom the law may have imposed the obligation to repair such defect    and also the officer or officers through whose official negligence such defect remains unrepaired, but could not sue the city itself. Id. at 216, 88 P.2d 808 (citing Section 281 of the Portland City Charter). Plaintiff claimed that the charter section was contrary to Article I, section 10. This court, after an exhaustive examination of the authorities which we need not repeat here, affirmed the trial court. We synthesized our previous jurisprudence as follows: We believe that all of our previous decisions were correctly decided and that their reasons were sound, with the exception of those that deemed the maintenance of streets a governmental function.         But the plaintiff contends that Art. I, § 10, Oregon Constitution, prevents the lawmakers from abolishing any common law rights, and that since the charter exemption clause deprives those injured, through the negligent failure of cities to maintain their streets, of their common law right of action against the cities, the clause is invalid. Plaintiff seems to believe that that point of view escaped attention in the consideration of our previous cases.    [It has been] said that it was unnecessary to `elaborate the rule that the Constitution does not forbid the creation of new rights, or the abolition of old ones recognized by the common law, to attain a permissible legislative object.' [Citation omitted.] We held to similar effect in sustaining the validity of a statute which was attacked under Art. I, § 10, Oregon Constitution: Perozzi v. Ganiere, 149 Or 330, 40 P2d 1009 [(1935)]. Article I, § 10, Oregon Constitution, was not intended to give anyone a vested right in the law either statutory or common; nor was it intended to render the law static. Notwithstanding similar constitutional provisions in other states, the courts have sustained statutes which eliminated the husband's common law liability for the torts of his wife and which placed the wife upon an economic level with her husband. They have likewise sustained statutes which have abolished actions for alienation of affections, actions for breach of promise, etc. The legislature cannot, however, abolish a remedy and at the same time recognize the existence of a right: Stewart v. Houk, 127 Or 589, 271 P 998, 272 P 893, 61 ALR 1236 [(1928)]. We, therefore, conclude that this contention reveals no infirmity in the charter exemption clause. Id. at 244, 248-250, 88 P.2d 808. Although it was not even mentioned by the court in Noonan, the court, when it said, Article I, § 10, Oregon Constitution, was not intended to give anyone a vested right in this law    nor was it intended to render the law static[;]    [the only limitation on the] legislature [is that it] cannot    abolish a remedy and at the same time recognize the existence of a right, id. at 249, 88 P.2d 808, could have cited Evanhoff v. State Industrial Acc. Com., 78 Or. 503, 154 P. 106 (1915), as illustrative of its point. Evanhoff brought to this court the issue of the constitutionality, under Article I, section 10, of Oregon's then two-year-old workers' compensation scheme. By that scheme, the Oregon legislature had eliminated the haphazard system of liability of employers to some employees for some injuries occurring under a limited number of circumstances, and replaced it with a system that made employers liable for the medical expenses of their injured workers without regard to fault. The scheme penalized some members of both camps  those plaintiffs who could prove actionable negligence of their employers, and so obtain damages beyond their medical expenses, and those employers who could defeat liability either because they had not been negligent or because they could show the worker was guilty of contributory negligence or assumption of the risk. A recent law review article describes the outcome of Evanhoff: [T]he court for the first time had to deal with a law that denied a well-established cause of action  a tort action for personal injury based on negligence  uncomplicated by a traditional common-law immunity. The court side-stepped the issue by noting that the compensation law allowed both the worker and the employer to elect not to be covered. Therefore, it was the parties themselves, not the law, that took away the remedy as in a mutual waiver. [ Id. at 518, 154 P. 106.] Again, the analytical rationale was bolstered by, if not a mere pretext for, public policy balancing. In an uncharacteristic burst of enthusiasm, the court noted: `Upon the whole case we are of the opinion that the act violates no prescription of the Constitution of this state or of the United States, and that it was properly passed and is in every respect a valid law.    Before its enactment one workman out of three received a large compensation for his injuries by an action at law, while the remaining two were defeated and got nothing. Now every workman accepting its provisions receives some compensation if injured; and, taken as a whole, it will be found that more money in the way of compensation is received by the whole body of injured workmen than by the inadequate remedies afforded in the courts. It has been a boon to the employers, the employed, and the community, which latter [ sic ] could formerly only offer to the injured laborer the charity of the almshouse instead of that just compensation which he may now receive without the humiliation of pauperism or the loss of self-respect.' [ Id. at 523-24, 154 P. 106.] Surprisingly, the issue never resurfaced in Oregon courts, although some other states have had to amend their constitutions to accommodate compensation schemes. [Footnote omitted.] The courts have, however, confronted other legislatively created schemes that substitute non-judicial remedies for traditionally judicial ones. The same rationale prevailed.    [ See, e.g., ] Rueda v. Union Pacific Railroad Co., [180 Or. 133, 175 P.2d 778 (1946) [(Article I, section 10, notwithstanding, parties are free to negotiate agreements that have the effect of conferring immunity on one of them from action by the other  to hold otherwise would invalidate many arbitration agreements)]. Schuman, Oregon's Remedy Guarantee: Article I, Section 10 of the Oregon Constitution, 65 OrLRev 35, 51-52 (1986). Noonan and Evanhoff held only that Article I, section 10, is not violated when the legislature alters (or even abolishes) a cause of action, so long as the party injured is not left entirely without a remedy. Under those cases, the remedy need not be precisely of the same type or extent; it is enough that the remedy is a substantial one. See, e.g., Noonan v. City of Portland, supra (torts of cities); Evanhoff v. State Industrial Acc. Com., supra (workers' compensation); Perozzi v. Ganiere, supra (guest passenger); Davidson v. Rogers, 281 Or. 219, 574 P.2d 624 (1978) (defamation); see also Schuman, supra. It is clear from the language of ORS 30.265(1) itself that the legislature intended to meet fully the requirements of Article I, section 10, when it enacted the statute. The statute specifically identifies the new balance it strikes between municipal corporations and those to whom certain of those corporations could, under limited circumstances, formerly have been liable: Subject to the limitations of ORS 30.260 to 30.300, every public body is subject to action or suit for its torts and those of its officers, employees and agents acting within the scope of their employment or duties, whether arising out of a governmental or proprietary function   . (Emphasis added.) The class of plaintiffs has been widened by the legislature by removing the requirement that an injured party show that the municipal corporation's activity that led to the injury was a proprietary one. At the same time, however, a limit has been placed on the size of the award that may be recovered. A benefit has been conferred, but a counterbalancing burden has been imposed. This may work to the disadvantage of some, while it will work to the advantage of others. But all who had a remedy continue to have one. This may not be what plaintiff wants. It may not even be what this court, if it were in the business of making substantive law on this subject, would choose to enact. But it is within the legislature's authority to enact in spite of the limitations of Oregon Constitution, Article I, section 10. See, e.g., Noonan v. City of Portland, supra . We hold that the limitations of ORS 30.270(1)(b) do not deny plaintiff any right of action against the City guaranteed by Oregon Constitution, Article I, section 10. See Davidson v. Rogers, supra, 281 Or. at 222, 574 P.2d 624. We turn next to plaintiff's arguments under Oregon Constitution, Article I, section 20.