2023 OADC Convention CLE Book

2023 OADC Annual Convention

JUNE 15-17 SUNRIVER RESORT

Continuing Legal Education Guidebook

oadc.com | info@oadc.com

2023 OADC ANNUAL CONVENTION

Welcome!

Table of Contents CLE Complete Schedule At A Glance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 General Session: Lawyer Well-Being: Concrete Strategies for Positive Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 General Session: Legal Ethics of Data Security. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 Lightning Round Sessions • Employment Updates: Release Restrictions & Mandatory Disclosures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85 • Paid Leave in Oregon. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91 • Dealing with the Difficult Opponent: Tips for Approaching Settlement when the Other Side Refuses. . . . . . . . 98 • My Recent Experience as a Juror in Washington County. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106 • Effectively Asserting the Economic Waste Defense to Avoid Cost of Repair Damages. . . . . . . . . . . . . . . . . . . . . 114 • Is a Motion to Strike the Motion that’s Right? Why Judges Prefer Facts that Will get you to Admissible Evidence Versus Supplying Admissible Evidence. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135 • Your Client’s Expert has Been Subpoenaed to Testify Against Them. Now What? . . . . . . . . . . . . . . . . . . . . . . . . 139 General Session: Uncertainty and Opportunity: Management Trends in the Legal Industry. . . . . . . . . . . . . . . . . 174 General Session: Appellate Update: Keeping Your Practice Current . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 197 General Session: Motions on the Pleadings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 391 General Session: C omparative Fault in a Reckless World: How Miller v. Agripac Alters (or Maybe Doesn’t Alter) the Landscape. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 456

This information and related materials are provided to you as a registered 2023 OADC Annual Convention attendee only. To maintain the integrity of the program, please do not share this with anyone else.

CONTINUING LEGAL EDUCATION GUIDEBOOK

Congratulations to Our 2023 OADC Award Winners Lifetime Achievement Award

President’s Award

Martha Hodgkinson

Jeanne Loftis

Attorney on the Rise April Stone

2023 OADC ANNUAL CONVENTION

Schedule at a Glance

F R I D AY, J U N E 1 6

7:30am

Registration, Continental Breakfast & Exhibits for CLE Attendees

7:45am - 8:00am

Welcome, Introductions, Awards, & Announcements

HOMESTEAD

Convention Chairs: Chad Colton, Markowitz Herbold PC; Megan Cook, Bullivant Houser PC; and John Eickelberg, Law Offices of Eric Shilling 8:00am - 9:30am

Lawyer Well-Being: Concrete Strategies for Positive Change Bena Stock, LL.B, MC, RCC.; Bena Stock Counselling & Consulting

This presentation will explore mental health and well-being in the legal profession and will offer concrete strategies regarding how to improve mental health. We are happiest, healthiest, and most successful when we adopt healthy lifestyles and work habits. Long hours, demanding clients, complex files, and difficult opposing counsel can be occupational hazards in the practice of law. Understanding how you respond to these challenges, and learning coping mechanisms that will help you manage stress and anxiety, will help you build a flourishing career. This presentation will explore: • Lawyer mental health.

• The importance of recognizing your automatic response to stress.

• Strategies to shift your thinking so you can better manage stress and anxiety.

• How perfectionism fuels procrastination and undermines self-confidence.

• How to build resilience and optimism.

• Why setting boundaries can help you manage expectations.

Mental Health/Substance Abuse Credit request pending.

9:30am - 10:00am

NETWORKING BREAK + EXHIBITS + AWARDS

10:00am - 11:00am

Legal Ethics of Data Security

Nellie Barnard, Of Counsel, Schwabe Williamson & Wyatt; and Colin Folawn, Shareholder, Schwabe Williamson & Wyatt Protecting against cyber threats is an ongoing issue for companies of all shapes and sizes, including law firms. As cyber-attacks become increasingly more sophisticated and targeted, law firms are in the cross hairs of hackers, malware, and the like. Law firms have unique obligations under applicable Rules of Professional Conduct to ensure that client files and communications with clients are properly protected. This presentation will address these obligations and what to do in the event of a data breach.

Ethics Credit Request Pending.

11:00am - 11:15am

NETWORKING BREAK + EXHIBITS

11:15am - 12:15pm

Lightning Round

George S. Pitcher, Lewis Brisbois Bisgaard & Smith The Lightning Round is back! Seven minutes each with these seven scintillating topics: 1. Employment Updates: Release Restrictions & Mandatory Disclosures Greg Lockwood, Gordon & Rees 2. Paid Leave Oregon Rachel Timmins, Ogletree Deakins 3. Dealing with the Difficult Opponent: Tips for Approaching Settlement when the other Side Refuses John Bachofner, Bachofner Arbitration & Mediation 4. My Recent Experience as a Juror in Washington County; Melanie Rose, Smith Freed Eberhard 5. Effectively Asserting the Economic Waste Defense to Avoid Cost of Repair Damages Molly Honoré, Markowitz Herbold 6. Is A Motion to Strike the Motion that’s Right? Why Judges Prefer Facts that will Get you to Admissible Evidence versus Supplying Admissible Evidence Michael Godfrey, SBH Legal 7. Your Client’s Expert has Been Subpoenaed to Testify Against Them. Now What? Jason Evans, Sussman Shank

CONTINUING LEGAL EDUCATION GUIDEBOOK

S AT U R D AY, J U N E 1 7 HOMESTEAD

7:30am

Continental Breakfast for CLE Attendees

7:45am - 8:00am

Introductions, Awards, & Announcements

Convention Chairs: Chad Colton, Markowitz Herbold PC; Megan Cook, Bullivant Houser PC; and John Eickelberg, Law Offices of Eric Shilling 8:00am - 9:00am

Uncertainty and Opportunity: Management Trends in the Legal Industry in 2023 Marci Taylor, JD, Principal, Withum

After experiencing some of their best financial years ever, law firms are readjusting their business strategies for uncertain economic times. Adapting to a permanent hybrid work environment, realignment of staff and operations, shifting marketing and business development strategies and an increased focus on technology and cybersecurity are leading concerns for law firm management. This presentation will share the latest trends in law firm management, particularly as they relate to litigation practices, including key financial performance indicators, changing strategies for firm growth, talent management and building a thriving firm culture in a post-pandemic world.

Marci Taylor provides strategy, management, and marketing consulting services to law firms throughout the country. A former practicing attorney, Marci has been working in law firm management for nearly twenty-five years.

Business Marketing Credit Request Pending.

9:00 am- 9:15am

NETWORKING BREAK + EXHIBITS

10:00 - 11:00am

Appellate Update: Keeping Your Practice Up to Date

Judge Stephen Bushong, Oregon Supreme Court; Justice Jack L. Landau, Willamette University College of Law, and Matt Kalmanson, co-managing partner, Hart Wagner PC The ever popular appellate update returns with Oregon Court of Appeals Judge Anna Joyce and Multnomah County Circuit Judge Stephen Bushong reviewing the most recent significant Oregon appellate court opinions impacting the civil defense practice.

10:15am - 10:45am

NETWORKING BREAK + EXHIBITS

10:45am - 11:45am

Motions on the Pleadings

Judge Benjamin Souede, Multnomah County Circuit Court In this presentation, Multnomah County Judge Benjamin Souede will provide his observations about modern pleading and motions practice. He will discuss recent developments in Oregon law that impact pleadings and motions and tips about some of the best – and least – effective practices he has seen from practitioners.

Oregon Practice and Procedure Credit Request Pending.

11:45am - 12:00pm

NETWORKING BREAK + EXHIBITS

12:00pm - 1:00pm

Comparative Fault in a Reckless World: How Miller v. Agripac Alters (or Maybe Doesn’t Alter) the Landscape David Cramer, Partner, MB Law Group; Tom Purcell, Partner, MB Law Group

The Court of Appeals’ decision in Miller v. Agripac, 322 Or App 202 (2022), relying on State v. Gutierrez-Medina, 365 Or 79 (2019), held that a finding of recklessness against a defendant took that defendant out of the rubric of comparative fault set forth in ORS 31.600, et seq. This presentation will look at the differing levels of culpability, their impact upon allocations of fault, and Miller’s ramifications for defending cases and third-party practice.

CLE Credit Notes Application has been made to the Oregon and Washington State Bars for approximately 5 general CLE credit hours, 1 ethics credit, and 1.5 Mental Health credits. The State Bars reserve the right to make the final determination of eligible CLE credits.

OADC’s New & Exclusive Program: DEFENSE PRACTICE ACADEMY The opportunity for Junior Associates to learn defense litigation skills, from case intake through jury trial directly from Partners and Senior Associates, who have gained invaluable experience and knowledge through years of practice.

OADC’s Defense Practice Academy is Only Accepting 30 Students Limited Space, Register Today!

Goal To enrich, enliven, and support the defense bar by providing this service both to the “students” and the firms that send them to the Academy.

Schedule Class Sessions, 3 hours each 10 September 2023 - June 2024

Scan for More Information or visit www.oadc.com/defense-practice-academy

2023 OADC ANNUAL CONVENTION CONTINUING LEGAL EDUCATION GUIDEBOOK

Lawyer Well-Being: Concrete Strategies for Positive Change PRESENTED BY:

Bena Stock, LL.B, MC, RCC; Bena Stock Counselling and Consulting

June 16, 2023 8:00am – 9:30am

OADC Oregon Association of Defense Counsel

Bena Stock LL.B., M.C., R.C.C.

Bena is a former litigation lawyer. She practiced law for over 23 years, primarily in the areas of professional negligence and insurance defense.

While working for the Lawyers Indemnity Fund of BC, she discovered the role she enjoyed most was helping lawyers with the emotions that sometimes accompanied reporting an error or a possible error. She decided to retire from law to obtain a master’s degree in counselling so she could make lawyer well-being her full-time job.

Bena is the founder of Bena Stock Counselling & Consulting. She is a Registered Clinical Counsellor and a member of the British Columbia Association of Clinical Counsellors. Bena is also a former Associate Director of the Lawyers Assistance Program of BC. She has helped many clients in the areas of anxiety, depression, anger management, relationships, as well as career coaching, and career transition. Bena believes in strength-based counselling and works toward helping clients discover and build on their strengths, while learning new strategies to overcome life’s challenges.

She is a frequent presenter to law firms and legal organizations on topics relating to lawyer wellness, including how to maximize mentoring, time management, bolstering resilience, and overcoming procrastination, to name a few. She is also a law firm workplace wellness consultant.

Bena is married to a commercial litigator and together they raised two daughters, so she knows the joys and challenges of balancing career and family. She also believes in giving back to her community and was formerly on the Board of the North Shore Family Court and Youth Justice Committee, and the North Shore Restorative Justice Society.

Bena is an avid road cyclist and has participated in several grand tours in BC and Europe. She also enjoys hiking, skiing, and cooking, and has a third-degree black belt in Tae Kwon Do. Bena can be reached by phone at 604-338-9896 or by email at counselling@benastock.com.

WORKBOOK

Lawyer Well-Being Concrete Strategies for a Flourishing Career

©2023

www.benastock.com counselling@benastock.com

Disclaimer Pursuant to the Terms of use, neither The Lawyer Mindset nor Bena Stock is engaged in rendering professional advice or services to the individual reader. The ideas, procedures, and suggestions contained in this workbook are not intended as a substitute for consulting with a certified counsellor, therapist, psychologist, or physician. All matters regarding your health require medical supervision. Neither The Lawyer Mindset nor Bena Stock shall be liable or responsible for any loss or damage allegedly arising from any information or suggestion in this workbook.

No portion of this workbook may be reproduced in any form without written permission from the author, Bena Stock.

©2023

www.benastock.com counselling@benastock.com

Index I. Unhelpful Thinking Styles

4

II. Personal Rights

5

III. Types of Boundaries

6-9

IV. Personal Boundary Traits

10

V. Defining Lawyer Well-Being

11

VI. Values

12

VII. "I" Messages

13

VIII. Boundary Scripts

IX. Notes

14-20

21

3

Unhelpful Thinking Styles All-or-nothing thinking, sometimes referred to as black-and-white thinking: Viewing the world, or a situation in either/or terms, instead of acknowledging the variability each situation brings. “I am a failure if I don’t succeed.” “Anything less than perfection is worthless.”

Mental filter: Only paying attention to specific kinds of evidence, usually viewed with a negative bias. “I only see what has yet to be done, or where I have failed. I never see what I have done well.”

Jumping to conclusions: There are two types of jumping to conclusions; mind reading, when we imagine we know what someone is thinking, and fortune telling, predicting the future.

Emotional Reasoning: Relying on our feelings, not facts, to respond to specific situations. “I’m anxious so I must not know what I am doing.”

Labelling: Assigning labels to ourselves or others. “I’m an idiot.”

Overgeneralizing: Seeing a pattern based on a single or a few events. “Nothing ever goes my way.”

Personalization: Blaming yourself or taking responsibility for something that wasn’t completely your fault. Conversely, blaming other people for something that was your fault.

Catastrophizing: Blowing things out of proportion and viewing a problem as something greater than it is.

Should’ing and Must’ing: Using should and must to put unreasonable demands on yourself.

4

I Matter Your boundaries are your responsibility and no one else's. It is up to you to own your boundaries and remember you have the right to assert your boundaries.

This is a list of some of your personal rights to get you started. There are many more.

I have the right to communicate my boundaries.

I have the right to be treated with kindness and respect.

I have the right to choose who will be in my life.

I have the right to say no without feeling guilty.

I have the right to change my mind.

I have the right to make mistakes.

I have the right to privacy.

I have the right to hold my own values.

I have the right to express my feelings.

I have the right to voice my opinion.

I have the right to clear, consistent, and direct communication.

I have the right to express my personal needs.

I have the right to ask another person to meet my needs.

I have the right to rest and self-care.

I have the right to happiness.

5

Healthy Boundaries You are bombarded with expectations from your family and friends, your profession, and your communities. Let's not forget the expectations you put upon yourself. It is impossible to meet everyone's expectations, and we are often left feeling overwhelmed, exhausted, resentful, and guilty. Without healthy boundaries you are at the mercy of others and risk being mistreated.

Healthy boundaries help you form mutually respectful relationships. Healthy boundaries are built on determining what's ok and what's not ok for you.

6

What are Personal Boundaries?

Types of Boundaries One way to figure out what boundaries you need to set is by thinking about the six different types of boundaries; physical, intellectual, material, emotional, sexual, and time. Let's take a closer look at each of the six different types of boundaries.

1. Physical Boundaries Physical boundaries include your need for physical space and comfort with touch. They also include your basic needs such as rest, sleep, food, and water. It's ok to let people know you don't want to be touched, or that you're hungry or thirsty. Physical boundaries might be violated when someone goes through your personal belongings, or touches you without your permission.

Healthy physical boundaries would sound like: I'm not a big hugger. I prefer a handshake.

I need to take a break and get something to eat.

I do not want you to touch me.

Please do not go into my purse or wallet.

Do not come into my office when I am not here.

2. Intellectual Boundarries Intellectual boundaries refer to your ideas, thoughts, and feelings. Healthy intellectual boundaries include respect for other peoples' beliefs and ideas. Intellectual boundaries can be violated when your thoughts, ideas, and beliefs are disrespected, dismissed, or belittled.

Healthy intellectual boundaries would sound like: I think we need to agree to disagree.

I don't want to talk about this anymore because our conversation is becoming too emotional and I fear we might end up in an argument.

I do not want to talk about x because whenever we do, we argue.

7

3. Material Boundarries Material boundaries refer to money and possessions, like your car, your home, your clothing, or your jewellery. It is helpful to have a clear understanding of what you are willing to share, or not, and with whom, and how you expect your possessions to be cared for. Material boundaries may be violated when people take things from you against your wishes, when your belongings are destroyed or stolen, or when people borrow from you too frequently against your wishes.

Healthy material boundaries would sound like: I can't lend you my car because I am the only one on the insurance.

I can't lend you money because I am saving to take a vacation.

Of course you can borrow my dress for your party. Please dry clean it before you return it to me.

4. Emotional Boundaries Emotional boundaries refer to your feelings. Setting emotional boundaries means deciding how much personal information you share and with whom. Emotional boundaries can also refer to how much energy it takes for you to be with another person. Healthy emotional boundaries mean respecting other peoples' feelings. Emotional boundaries may be violated when someone invalidates your feelings or belittles you, asks questions that are inappropriate for the relationship, or emotionally dumps on you.

Healthy emotional boundaries would sound like: I'm going through a difficult time right now and I'd really appreciate it if you could just listen to me and not try to problem solve.

I don't want to talk to you about this topic in public. Let's find another place to have a private conversation.

It seems that you don't pay attention or acknowledge me when I share my feelings with you. That makes me withdraw and not want to try to be close to you.

8

5. Sexual Boundaries Sexual boundaries refer to the emotional, intellectual, and physical aspects of sexuality.

Healthy sexual boundaries include consent, agreement, and respect for personal privacy.

Sexual boundaries may be violated when someone does not ask for consent, pressures another to engage in sexual acts, gives unwanted sexual attention, leers, or lies about their sexual history.

Healthy sexual boundaries would sound like: Asking for consent.

Saying no to things you do not like or hurt you.

Asking what your sexual partner likes or dislikes.

Telling your partner you don't feel like having sex tonight and prefer to cuddle.

6. Time Boundaries Time boundaries refer to where you choose to spend your time and energy. It is helpful to understand what you value in order to understand how to prioritize where you spend your time. Setting time boundaries is incredibly important at work, at home, and socially. Time boundaries may be violated when someone demands too much of your time, shows up late or cancels on you, or when they demand more time from you than they said they would.

Healthy time boundaries would sound like: Setting aside enough time to enjoy all aspects of your life.

I can only stay for an hour.

Is now a good time to talk?

9

Personal Boundary Traits Boundaries are typically described as having three traits; rigid, porous, or healthy. Most people have a mix of these different boundary traits, and traits may differ depending on the relationship or the circumstances.

Someone with rigid boundary traits: Tends to find it difficult to ask for help.

Avoids close relationships and intimacy.

Often holds others at a distance to avoid being hurt.

Is perceived as detached, especially in romantic relationships.

Someone with porous boundary traits: Is often described as a people pleaser.

Has difficulty saying no.

Overshares personal information.

Tends to be over involved in other peoples' lives.

Is dependent on the opinions of others.

Someone with healthy boundary traits: Is comfortable saying "no" and accepting when others say "no" to them.

Shares personal information in an appropriate way.

Doesn't compromise their values or feelings to please others.

10

Defining Lawyer Well-Being The American Bar Association's National Task Force on lawyer well-being defines wellbeing as a continuous process in which lawyers strive for thriving in six dimensions of life.

1. Occupational: Cultivating personal satisfaction, growth, and enrichment in work; financial stability.

2. Emotional: Recognizing the importance of emotions. Developing an ability to identify and manage our emotions so we can achieve our goals and support mental health.

3. Physical: Including regular exercise, proper diet, and good sleep hygiene in your daily life; minimizing the use of addictive substances.

4. Intellectual: Engaging in continuous learning, and pursuing creative and intellectual challenges. Monitoring cognitive wellness.

5. Spiritual: Developing a sense of meaning and purpose in your life.

6. Social: Cultivating a sense of belonging and connection with others, while also contributing to groups and communities.

11

What are your values?

The list of values below is not exhaustive, but it’s designed to get you thinking about your own. Which values on the list are most important to you? Pick your top three and if something comes to mind that is not on the list, write it down.

Acceptance

Faith/Religion

Mindfulness

Accountability

Family

Nature

Adventure

Freedom

Openness

Art or Music

Friendship

Patience

Athletics

Fun

Peace/Non-violence

Celebration

Generosity

Personal Growth

Challenge

Gratitude

Pets/Animals

Collaboration

Happiness

Politics

Commitment

Hard Work

Positive Influence

Community

Harmony

Practicality

Compassion

Health

Problem-Solving

Competence

Helping Others

Reliability

Cooperation

Honesty

Resourcefulness

Courage

Honour

Self-Compassion

Creativity

Humour

Self-Reliance

Curiosity

Independece

Simplicity/Thrift

Discipline

Innovation

Strength

Discovery

Integrity

Tradition

Efficiency

Independence

Trust

Enthusiasm

Joy

Willingness

Equality

Leadership

Wisdom

Ethical Action

Lifelong Learning

Excellence

Love

Fairness

Loyalty 12

Four Parts of "I" Messages I feel...

When you...

Because...

I need...

Fill in the blanks to practice creating your own “I” messages.

I feel

(emotion) when you

because

.

I need

(situation/context/challenge).

For Example Situation – Instead of saying: You always wait until the last minute to ask me to help you with something.

“I” Message – I feel stressed when you don’t give me notice regarding a task because I then have to reprioritize my workload. This often means I am unable to meet pre-existing commitments for others. I need at least 24 hours' notice for tasks you’d like me to help you with.

Situation – Instead of saying: I can never count on you to meet deadlines because you’re always behind in your work.

“I” Message – I have reporting requirements for our clients that are time-sensitive. I feel uncomfortable asking our clients for extensions when you are late providing me with the material I asked for because I want our clients to feel they can rely on us. I need you to either provide me with your work on time or let me know as soon as possible that you will be unable to meet the deadline.

13

Better Boundary Scripts Saying "No" at Work When You Don't Have the Time or Capacity

I would love to help but I’m not able to dedicate the time necessary to make this a success.

I’m swamped right now so I can’t.

I understand the urgency, but this isn't something I can take on now.

Circle back to me in a few weeks. Maybe I can help then.

I have a few things I need to take care of first. Can I let you know later?

I’m really maxed out.

Let me think about it and get back to you.

I am fully booked and not taking on new projects for the next few weeks.

I’ve got too much on my plate right now.

I’m head-down right now on a project so won’t be able to help.

I realize saying no to this assignment puts it back in your hands. Are there small ways I could help lighten the load?

I can't help you now because I have to leave work at 5 to take my daughter to her piano lesson. I will prioritize your project first thing tomorrow morning.

I'd be happy to help but I need a day or two to adjust my current workload before I can take this assignment on.

I'm already fully booked. I may be able to help next time if you give me more notice.

Now isn't a good time for me. I will let you know when my schedule frees up.

I enjoyed helping you last time but I'm too busy to take this on right now.

I can't help you with the entire project but I can help you with a part of it if you like.

14

Better Boundary Scripts Saying "No" to an Invitation I appreciate the offer but I can't.

Thank you for the invitation but I am fully booked.

You’re kind to think of me, but I can’t.

Thanks, but maybe another time.

I’d love to be part of this but my schedule is packed to the brim now. Please keep me in mind for something like this in the future.

No, but thanks for reaching out.

I would love to but I’m having a hard time keeping up with the commitments I already have.

I wish I could but I have another commitment at that time.

I reserve weeknights for family activities so I can't join you during the week.

This sounds like fun but I have another commitment at that time. Please say hello to everyone for me.

It was nice of you to think of me but I need to take a rain check. I've already scheduled something at that time.

15

Better Boundary Scripts Maintaining Privacy I'm not ready to share yet.

Thank you for checking in but I don't want to talk about it right now.

I'll tell you more later at another time.

I'm uncomfortable talking about something that someone shared with me in confidence.

I prefer not to say.

I have my reasons.

I would appreciate it if you didn't talk to my colleagues/mom/partner/children about ____________.

Let's find a time and place where we can discuss this privately.

Why would you ask me that?

Why would you want to know that?

I have a policy of not sharing my personal cell phone number with my clients. I prefer we communicate by email.

16

Better Boundary Scripts Saying "No" for Any Reason at All No. I’m afraid I can’t.

Not this time.

Darn, I’m not able to fit it in.

I need to pass this time. Maybe next time.

Not possible.

Unfortunately I have too much to do today.

No, I can't fit that into my schedule this week.

The timing right now isn't good for me. Keep me in mind for next time.

No sorry, I need to prioritize my family right now.

I had a bad experience with that before so I need to say no.

I can't help, but I have some resources to share.

17

Better Boundary Scripts Making a Request Please take your shoes off when you come in. We don’t wear shoes in our home. I can offer you some slippers if you like.

I need to vent. It would mean a lot if you could just listen and not try to problem-solve.

Please don’t look through my purse without my permission.

That joke was insulting and not appropriate for the workplace. Please don’t speak like that here.

I don’t want to talk about it. Please don’t bring it up again.

Let me think about this overnight. I will get back to you tomorrow morning.

Your comments about my appearance are hurtful. Please stop.

I go to bed at 10 pm. I won't answer texts or emails after that.

Please don't contact me during my vacation.

Before we begin, can we talk about what happened last time?

Can you give me advance notice of work-related travel so I can plan my holidays?

It would mean a lot if you would ______________________.

18

Better Boundary Scripts Consequences if Someone Disrespects your Boundaries You have no control over whether someone will respect your boundary. You only have control over your response when your boundary is not respected.

If someone repeatedly crosses your boundary despite you being clear on what it is, take a deep breath, count to three and say: I don't want to continue this conversation. I’m going to hang up/leave now.

I am uncomfortable with what you are saying. Please leave my office, and if you won’t leave, I will.

I have asked you several times to stop making sexualized comments about me, but you’ve continued. I have asked human resources to address this with you.

Infidelity is a deal breaker for me and I will not continue this relationship if you cheat on me.

Your behaviour is extremely hurtful. I’m going to spend the night at my mother’s.

I know this is a difficult conversation. Being angry is okay, but yelling at me is not.

19

Healthy Boundaries I matter.

I am enough.

I have personal space and privacy.

It's ok for me to communicate my thoughts, feelings, and needs.

It's ok for me to honour my feelings and allow myself to feel differently from others.

I allow others to make their own decisions and deal with the consequences of those decisions.

It's not my job to change, fix, or rescue others from difficult situations or feelings.

It's ok for me to tell others how I want to be treated.

It's ok if others are angry with me.

It's ok for me to expect respect.

I refuse to take blame for things I am not responsible for.

It's ok to ask for space.

It's ok for me to communicate my discomfort.

I prioritize self-care.

I will share personal information gradually.

It's ok for me to stick up for myself.

It's not my responsibility to anticipate the needs of others.

I am not responsible for the emotions of other people.

It's ok to say “no.”

It's ok to ask for help.

I am responsible for my own happiness.

20

NOTES

©2023

www.benastock.com counselling@benastock.com

2023 OADC ANNUAL CONVENTION CONTINUING LEGAL EDUCATION GUIDEBOOK

Legal Ethics of Data Security

PRESENTED BY:

Nellie Barnard, OF Counsel, Schwabe Williamson & Wyatt Colin Folawn, Shareholder, Schwabe Williamson & Wyatt

June 16, 2023 10:00am – 11:00am

OADC Oregon Association of Defense Counsel

Nellie Barnard

Nellie Barnard is an experienced litigator who excels at providing legal ethics and risk management advice to lawyers, law firms, law students, and in-house legal departments. Nellie also represents Oregon and Washington lawyers in attorney discipline matters and character and fitness proceedings, including on appeal. Capable of defending complex business or financial services litigation disputes, Nellie guides her clients toward successful resolutions from inception through appeal, if necessary.

Nellie appreciates the obstacles that lawyers and law firms face in the practice and the business of law. She works collaboratively with her clients to minimize the risk of liability including issues involving conflicts of interest, sanctions, privilege, client confidentiality, engagement and withdrawal procedures, multi-jurisdictional practice, lawyer-client relationships, fee disputes, and practice planning and management. She helps lawyers and law firms address the boundaries involving attorney advertising and marketing, including issues particular to social media, client solicitation, business relationships with non-lawyers, and fee sharing. Nellie also advises law firms and lawyers on ethical and fiduciary issues related to lateral hiring, law firm dissolution, and expulsion matters, and she serves as outside ethics counsel to law firms. She also serves as Assistant General Counsel to the firm.

EXPERIENCE

Provided outside general counsel services and risk management advice to lawyers, law firms, and inhouse legal departments on the topics of conflicts, engagement and withdrawal procedures, privilege, client solicitation, client confidentiality, lawyer-client relationships, social media, and more.

Defended sanctions motions, disqualification motions, fee disputes, and complex privilege disputes.

Represented lawyers and students before bar associations on disciplinary matters, licensing, admissions, reciprocity, character and fitness reviews, and unauthorized practice of law issues.

Defended complex business disputes and consumer financial services litigation in state and federal court at both the trial and appellate court levels, including successfully arguing dispositive motions and appeals.

MEMBERSHIPS Multnomah Bar Association: Treasurer (2021-2022), Board Member (20192022), Professionalism Committee (2016-2019) Oregon Women Lawyers (2011-present) Association of Professional Responsibility Lawyers (2015-present) American Bar Association, Center for Professional Responsibility (2015-present)

EDUCATION

Lewis & Clark Law School Juris Doctor degree, cum laude (2012) Middlebury College Bachelor of Arts degree, magna cum laude (2006)

ADMISSIONS

Oregon State Courts Washington State Courts United States Court of Appeals, the Ninth Circuit United States District Court, District of Oregon United States District Court, Western District of Washington

SERVICES

Appellate Employment Litigation Financial Institutions Litigation & Dispute Resolution Non-Compete and Trade Secrets Professional Liability

COMMUNITY ACTIVITIES

Harpole Committee (2011-present) Campaign for Equal Justice, Associates’ Committee (2015-2022)

AWARDS Best Lawyers in America Award: Ones to Watch, Professional Malpractice Law (2022-2023) Oregon Rising Star List, Professional Liability (2020-2022)

Lewis & Clark Law School Ethics and Professionalism Panel Multnomah Bar Association October 2018

Campaign for Equal Justice, Associates Award (2021 & 2022)

Legal Ethics for Nonprofit Lawyers Oregon State Bar September 2018

SEMINARS & SPEAKING ENGAGEMENTS

No Three Strikes, but the Lawyer is Still Out Panel: Discipline for Attempted Ethics Violations under RPC 8.4(a), Moderator Association of Professional Responsibility Lawyers Annual Meeting August 2018

Ethics Hour: Legal Confidentiality October 5, 2022

Ethics Hour: Ethical Communications Virtual, September 30, 2022 Ethics Hour: Do I Have a Conflict?

August 25, 2022 Coping with Burnout and Staying Ethical While You Do It Multnomah Bar Association October 2022 Social Media and Lawyers: Raising Your Profile Without Jeopardizing Your License The Seminar Group, CLE Bootcamp December 2021 Confidentiality, Conflicts and COVID The Seminar Group, 25th Annual Oregon Land Use Seminar December 2021 Confidentiality, Conflicts and COVID Federal Bar Association, Oregon Chapter December 2021

Legal Ethics for Contract Lawyers Oregon Women Lawyers, Contract Lawyers Section July 2018 A Day in the Ethical Life of a Tax Lawyer 18th Annual Oregon Tax Institute, Oregon State Bar June 2018 21st Annual Oregon Land Use Law-the Ethical Land Use Lawyer: Five Issues Worth Your Time The Seminar Group December 2017

PUBLICATIONS

ABA Relaxes Rule 4.2 When a Lawyer Hits ‘Reply All’: Will Oregon and Washington Follow Suit?

December 7, 2022 New ABA Opinion on the ‘No-Contact Rule’: The Text Might Not Set You Free November 18, 2022

Current Risk Management Issues in the Practice of Law Multnomah Bar Association Young Litigators Forum Winter Series March 2021

ABA Formal Opinion Approves Lawyers’ Passive Investment in Law Firms with Nonlawyer Owners September 21, 2021

Ethical Considerations in Land Use Law 24th Annual Oregon Land Use Law Conference December 2020

ABA Formal Opinion OKs Lawyers Who Sit in One Jurisdiction But Are Licensed in Another January 29, 2021

Ethical Considerations in Construction Law 25th Annual Oregon Construction Law Conference September 2020

Thoughts on Law Firm Engagement Letters, Lemme Insurance Brokers & Consultants, A Division of Epic, January 6, 2022

45th ABA National Conference on Professional Responsibility, Rule 8.4(a) and Attempted Rule Violations American Bar Association May 2019

Efforts Toward Improved Diversity and Inclusion Through the Anti-Bias Rule, The Federal Lawyer, November/December 2021

Colin Folawn

HOW I REPRESENT CLIENTS AT SCHWABE With a penchant for troubleshooting, I help clients resolve complex disputes, often involving the maritime and technology industries.

I handle cases involving privacy and data security breach matters, maritime and admiralty law, and complex contract issues that include insurance and commercial matters. I also provide legal advice to lawyers regarding legal ethics and loss prevention.

I have tried civil jury cases to verdict in Washington courts and have written and argued several successful motions in state and federal courts. I’ve also won cases before the Ninth Circuit Court of Appeals, the Washington Court of Appeals, and the Washington Supreme Court.

MEMBERSHIPS

INDUSTRY FOCUS

AWARDS

EDUCATION

Washington State Bar Association Committee on Professional Ethics, Member (2013-2018)

Washington Super Lawyers, Business Litigation (2016-2018); Transportation & Maritime (2019)

RESOURCES & IDEAS

Legal Ethics of Data Security - Event Breakfast with Schwabe: Marine Operations and Litigation Smorgasbord Event You Know It’s Maritime! - Podcast

ADDITIONAL PUBLICATIONS

Cloud Security, Data Integrity, and the Law Portland INTERFACE Conference March 13, 2014 Transaction Traps: Legal Ethics for Business Lawyers Ethics Hour, February 28, 2014 Cloud Security, Data Integrity, and the Law Greater Seattle Chapter of the Cloud Security Alliance, February 27, 2014 Ethics Considerations in Licensing and Negotiations Washington State Bar Association, February 4, 2014 The Top Ten List: Exploring Ways that Lawyers Get into Trouble Ethics Hour, January 24, 2014 Panelist, 11th Annual Law of Lawyering Conference December 20, 2013 Developments in Maritime Law: Punitive Damages and Unseaworthiness December 6, 2013

Ports & Maritime Technology

Seattle University School of Law, Juris Doctor degree, summa cum laude (2003) Willamette University, Bachelor of Music degree (1996)

ADMISSIONS

Oregon State Courts Washington State Courts U.S. Court of Appeals - Ninth Circuit U.S. District Court - District of Oregon U.S. District Court - Eastern District of Washington U.S. District Court - Western District of Washington

SERVICES

Appellate Litigation Privacy & Data Security Outside Interests Composing music when inspiration strikes.

Legal Ethics and Social Media: Common Dilemmas Faced

by Lawyers Washington Chapter of the Association of Corporate Counsel, December 4, 2013 Identifying and Managing Legal Risks of Cloud Computing Seattle INTERFACE Conference, December 5, 2013 Playing Well with Others: The Legal Ethics of Association and Supervision Ethics Hours, October 31, 2013 New and Emerging Ethics Issues for Trial Lawyers National Business Institute, August 15, 2013 Legal Concerns Involving Cloud Computing Greater Seattle Chapter of the Cloud, Security Alliance, May 23, 2013 Developments in Maintenance and Cure Law: Dean v.

The Fishing Company of Alaska May 30, 2013

ADDITIONAL EVENTS

Washington Defense Trial Lawyers Ethics Seminar December 15, 2022 Ethical Issues in Litigation (Defense) December 15, 2022 Ethics Hour: Top Ten Ways Lawyers Get Into Trouble December 2, 2022

Legal Ethics of Data Security Tips for every lawyer

PRESENTED BY

Nellie Q. Barnard and Colin Folawn

June 16, 2023

TOPICS • Important issues to consider before adopting new technology • Third-party data hosts and service providers • Outside counsel guidelines • Data security breach issues for lawyers 2

CAVEATS • This presentation is not intended to – State a legal standard of care – Create a lawyer-client relationship

• Keep hypotheticals hypothetical • Seek counsel for a particular legal issue

3

WHY DOES THIS MATTER?

4

BREACHED LAW FIRMS • DLA Piper

– Attack type: Ransomware – Consequence: no phones or email system, wipe & rebuild windows – Cost: Millions of dollars

• Moses Afonso Ryan Ltd.

– Attack type: Ransomware – Consequence: critical files locked down for 3 months – Cost: At least $700,000

• Mossack Fonseca – Panama Papers

– Attack type: Hack or insider attack – Consequence: none – Cost: The firm closed its doors in March 2018 5

ETHICAL OBLIGATIONS • Confidentiality

– ABA Model RPC 1.6

• Competence

– ABA Model RPC 1.1

• Comment [8]: “To maintain the requisite knowledge and skill, a lawyer should keep abreast of changes in the law and its practice, including the benefits and risks associated with relevant technology.”

6

LEGAL ETHICS & TECH • Understand the technology that you use for client work • Stay reasonably apprised as technology changes, and adapt accordingly • Monitor key systems and those that house client data • Train supervised lawyers and non-lawyer assistants 7

ADOPTING NEW TECHNOLOGY

8

QUESTIONS TO ASK • What information will be provided?

• What will the technology do with that information?

• Where will the information be stored or processed?

• How long will the information be kept?

9

QUESTIONS TO ASK (CONT’D) • How will the information be disposed of?

• Will the information be encrypted?

– At rest – In transit

• Will I be able to use the technology competently?

• If applicable, will my clients be able to use the technology competently?

10

THIRD-PARTY DATA HOSTS & SERVICE PROVIDERS Oregon Formal Ethics Opinion 2011-188

11

COMPETENCE & CONFIDENTIALITY • A “lawyer must take reasonable steps to ensure that the storage company will reliably secure client data and keep information confidential” – Ensure service agreement requires vendor to preserve confidentiality and security of the materials – Require notification of any nonauthorized thirdparty access to the materials – Investigate how vendor backs up and stores data and metadata – Reevaluate the protective measures over time

12

DUE DILIGENCE 1. Learn the risks of online data storage 2. Evaluate of the vendor’s practices, reputation and history 3. Compare provisions in vendor agreements to the extent that the service provider recognizes the lawyer’s duty of confidentiality and agrees to handle the information accordingly 13

DUE DILIGENCE (CONT’D) 4. Compare provisions in service provider agreements to the extent that the agreement gives the lawyer methods for retrieving the data if the agreement is terminated or the service provider goes out of business 5. Confirm the agreement requires prompt notice of any unauthorized access to the lawyer’s stored data 14

DUE DILIGENCE (CONT’D) 6. Ensure secure and tightly controlled access to the storage system 7. Ensure reasonable measures for secure backup of the data -Wash. Adv. Op. 2215 (2012) 15

SOME IMPORTANT CONSIDERATIONS FOR SERVICE AGREEMENTS

16

SERVICE TERMS • Contractual risk transfer – Indemnity – Limitation of liability

• Security, integrity, and work standards • Ownership and handling of data • Audit rights 17

RISK TRANSFER • Indemnity

– Who will provide it?

– To what extent?

• Monetary • Defense • Circumstances

• Limitation of liability – Direct/expenses – Consequential damages

– Risk v. reward

18

SECURITY • Encryption • Data

– Location – Integrity/backup – Subpoena protocol

• Limited access to data

• On-site security

– Biometric access – Proximity cards

• Employee background checks • Disaster protocol 19

HANDLING OF DATA • Client data remains client property • Maintenance of confidentiality obligations • Data disclosed only as directed by the firm • Audit rights?

20

OUTSIDE COUNSEL GUIDELINES

21

OUTSIDE COUNSEL GUIDELINES • Notice of data security breach • Use of specific software or services • Disaster recovery requirements • Third-party vendors • Audit provisions 22

DATA SECURITY BREACH PLANNING AND PREPARATION

23

THE DATA BREACH • Legal Assistant at AXDS Inc.’s legal department receives an email from HRmanager@axd5.com:

– “Our server went down, and we can’t access any of the form W-2s for 2019!”

– “Can you please send us legal’s backup copy?”

– “We need this right away!”

– “Thanks so much! –Heidi” 24

THE DATA BREACH (CONT’D) • Legal Assistant responds:

– “So sorry! Here you go.”

– “Let me know if you need anything else.”

• At lunch, Legal Assistant sees Heidi in the break room and asks, “did you get your server back up?”

• Heidi looks puzzled and says – “What do you mean?”

– “It never went down.”

25

THE DATA BREACH (CONT’D) • Legal Assistant immediately calls In-House Counsel and says: – “We just got scammed.”

– “Someone outside the company pretended to be Heidi and tricked me into sending them our W-2s.”

– “What should we do?”

26

WHAT TO DO? • Notify affected employees?

• Notify the local news media?

• Notify your supervisor?

• Crawl under your desk and hide?

• Notify law enforcement?

27

SO, WHAT SHOULD IN-HOUSE COUNSEL DO?

28

ABA FORMAL OPINION 483 • Not all “cyber events” are the same

– Theft of valuable data – Theft of money – Theft of client confidential information – Ransomware attack

• Competence also pertains to technology – Model RPC 1.1

29

ABA FORMAL OPINION 483 (CONT’D) • Supervisory responsibilities

– Managerial authority over lawyers • RPC 5.1

– Responsibilities regarding non-lawyers • RPC 5.3

• Lawyers must make reasonable efforts to establish policies and procedures to ensure conformity with the RPCs 30

ABA FORMAL OPINION 483 (CONT’D) • “[L]awyers must employ reasonable efforts to monitor

– the technology and office resources connected to the internet, – external data sources, and – external vendors providing services relating to data12 and the use of data”

• Lawyers need to safeguard data, just as they need to safeguard paper files and client property 31

ABA FORMAL OPINION 483 (CONT’D) • When protected client information is involved in a breach, “[Model] Rule 1.1 requires that the lawyer act reasonably and promptly to stop the breach and mitigate damage resulting from the breach” • “[L]awyers should consider … developing an incident response plan … for responding to a data breach” 32

ABA FORMAL OPINION 483 (CONT’D) • “A competent attorney must make reasonable efforts to determine what occurred during the data breach” • “A post-breach investigation requires that the lawyer gather sufficient information to ensure the intrusion has been stopped and then, to the extent reasonably possible, evaluate the data lost or accessed” 33

ABA FORMAL OPINION 483 (CONT’D) • Generally, “[a] lawyer shall not reveal information relating to the representation of a client” – Model RPC 1.6(a)

• “A lawyer shall make reasonable efforts to prevent the inadvertent or unauthorized disclosure of, or unauthorized access to, information relating to the representation of a client” – Model RPC 1.6(c)

34

ABA FORMAL OPINION 483 (CONT’D) • RPC 1.6 “is not a strict liability standard and does not require the lawyer to be invulnerable or impenetrable” • “[T]he obligation is one of reasonable efforts”

35

ABA FORMAL OPINION 483 (CONT’D) • “When a lawyer knows or reasonably should know a data breach has occurred, the lawyer must evaluate notice obligations” • Keeping a client reasonably informed about the status of a matter – RPC 1.4

36

ABA FORMAL OPINION 483 (CONT’D) • Under RPC 1.4, a lawyer must “communicate with current clients about a data breach” – Also see ABA Formal Opinion 95-398 (breach through third-party vendor/provider)

• Data is client property under Model RPC 1.15 • “Reading Rule 1.15’s safeguarding obligation to apply to hard copy client files but not electronic client files is not a reasonable reading of the Rule” 37

ABA FORMAL OPINION 483 (CONT’D) • “The Committee is unwilling to require notice to a former client as a matter of legal ethics in the absence of a black letter provision requiring such notice” • “[A]s a matter of best practices, lawyers are encouraged to reach agreement with clients before conclusion, or at the termination, of the relationship about how to handle the client’s electronic information that is in the lawyer’s possession” 38

ABA FORMAL OPINION 483 (CONT’D) • As to notifications, lawyers should:

– Provide enough information to enable the client to decide what to do – Advise the client what information was accessed or disclosed – Inform the client of the plan to respond to the data breach – Follow up with the client, if appropriate

• Ransomware with no loss of access or unauthorized data access does not require notification 39

SOME BASIC DATA BREACH QUESTIONS • Contain the intrusion

• Notify insurer(s)

• Identify affected data and parties

• Issue warranted notifications

• Determine whether and how to notify

• Respond to inquiries and managing crisis communications

– Affected parties – Law enforcement – Government agencies

40

SOME ADVANCED DATA BREACH ISSUES • When should a system be taken offline?

• How must notification be made?

• Must/should credit protection be offered?

• What contractual obligations exist?

• When should legal counsel be engaged?

• Is greater security warranted?

41

PLANNING THOUGHTS • Who is on the team?

• How will the team communicate?

• What should the plan say?

• What existing tools will be used?

• Where will the plan be kept?

• Who will be retained to assist (and when)?

– Data forensics – Public relations – Legal counsel – Notification vendors

42

ADDITIONAL THOUGHTS ON DATA SECURITY AWARENESS

43

HARM FROM A BREACH • Potential reputational harm, goodwill • Loss of customers, opportunities • Business interruption and extra expense – Investigation – System restoration – Legal advice – Data breach notification – Public relations

44

DATA BREACH NOTIFICATION LAWS • State by state approach • Federal notification laws are generally specific to industry or data – E.g., Gramm-Leach-Bliley Act, Health Insurance Portability and Accountability Act of 1996, etc.

• Special rules for defense contractors 45

COMMON ISSUES • Unauthorized access or acquisition of certain personal information • Statutory obligation to notify affected individuals • Timelines differ from state to state

• Some states require notifications to attorney general or law enforcement, as well as additional steps 46

ADDITIONAL CONSIDERATIONS • Penalties might result from violations • Data disposal requirements • Requirements to develop safeguards for personal information – Administrative – Technical – Physical

• Insurance 47

ADDITIONAL COMMENTARY • ABA Formal Opinion 482

– Ethical obligations related to disasters

• ABA Formal Opinion 498 – Virtual practice

48

DISCUSSION

49

THANK YOU! Nellie Q. Barnard Phone: 503-796-2071 Email: nbarnard@schwabe.com Colin Folawn Phone: 503-796-7462 Email: cfolawn@schwabe.com 50

2023 OADC ANNUAL CONVENTION CONTINUING LEGAL EDUCATION GUIDEBOOK

Lightning Round Employment Updates: Release Restrictions & Mandatory Disclosures PRESENTED BY:

Greg Lockwood, Gordon & Rees

June 16, 2023 11:15am – 12:15pm

OADC Oregon Association of Defense Counsel

W. Gregory Lockwood

Greg Lockwood is a Partner in the firm’s Portland office. He assists businesses, executives, and professionals resolve disputes in courts, arbitrations, and administrative proceedings across the country. His practice primarily consists of commercial, bankruptcy, employment litigation, mortgage foreclosure, product liability and professional liability including defending insurance agents and brokers in malpractice claims.

Due to the nature of his cases, Greg is frequently in court. He has briefed and argued high-stakes dispositive motions, which have extricated his clients from cases in state and federal courts. He has been on trial teams that have consistently achieved results for his clients, including defense verdicts and successful counterclaims. He has first chaired cases in front of AAA, ASP, and FINRA arbitrators.

Additionally, he has taken over 150 depositions, including trial perpetuation depositions of parties and experts.

Drawing on his past experience as a brand-strategy consultant for Fortune 100 companies, Greg focuses on providing efficient and business-oriented results. He works closely with clients to understand their needs and goals in order to help move cases forward in a way that meets those ends.

In his free time, Greg enjoys traveling with his wife, Megha, hiking with his dog Cordelia, skiing, and running. Greg and Megha are active in Portland’s arts scene including the Portland Art Museum and Portland Opera.

PRACTICES

Employment Law Bankruptcy, Restructuring & Creditors’ Rights Consumer Protection Litigation Professional Liability Defense Commercial Litigation Environmental/Toxic Tort Advertising & E-Commerce

MEMBERSHIPS

Oregon State Bar, Legal Ethics Committee (2015-2018) Oregon State Bar, Practice and Procedure Committee (2014-2017) Oregon Association of Defense Counsel, Transportation Committee Chair Multnomah Bar Association Federal Bar Association

COMMUNITY INVOLVEMENT

Pro Bono Panel Member, U.S. District Court for the District of Oregon Oregon State Bar Pro Bono Fee Mediation and Arbitration Panel (2015 to Present) Portland Opera, Young Patrons Society Catholic Charities

EDUCATION

J.D., University of Wisconsin Law School, 2011 • Symposium Editor, Wisconsin Law Review • Telecommunications Law Award • Gwynette Smalley Law Review Award B.A., cum laude, Political Science and Economics, Amherst College, 2006

CLERKSHIPS

Judge Nancy Dreher of the Bankruptcy Court of the District of Minnesota

EXTERNSHIPS

Justice Annette Ziegler of the Wisconsin Supreme Court

HONORS

Rising Stars® distinction in the fields of Civil Litigation: Defense, Employment Litigation: Defense, and Bankruptcy: Business (2017-2021)

ADMISSIONS

Oregon Minnesota Wisconsin Washington Ninth Circuit Court of Appeals

2023 OADC Annual Convention – Lightning Round

Employment Updates: Release Restrictions & Mandatory Disclosures Presented by: Greg Lockwood, Gordon & Rees

Recently, the Oregon State legislature has substantially expanded the rights of employees and created additional duties for employers through a series of laws. These new laws, in particular, the Oregon Workplace Fairness Act, impact your clients and you as a litigator, especially when dealing with settlement agreements. ORS 659A.370.

This presentation will discuss the new law, the impact on your clients, settlement agreements, and you.

659A.370. Nondisclosure provisions, nondisparagement provisions,..., OR ST § 659A.370

West's Oregon Revised Statutes Annotated Title 51. Labor and Employment; Unlawful Discrimination Chapter 659A. Unlawful Discrimination in Employment, Public Accommodations and Real Property Transactions; Administrative and Civil Enforcement (Refs & Annos) Workplace Fairness O.R.S. § 659A.370 659A.370. Nondisclosure provisions, nondisparagement provisions, or similar provisions limiting disclosure or discussion of conduct; provisions in settlement, separation, or severance agreements; unlawful employment practice Effective: January 1, 2023 Currentness <Text subject to final change by the Oregon Office of the Legislative Counsel.> (1) Except as provided in subsections (2) or (4) of this section, it is an unlawful employment practice for an employer to enter into an agreement with a former, current or prospective employee, as a condition of employment, continued employment, promotion, compensation or the receipt of benefits, that contains a nondisclosure provision, a nondisparagement provision or any other provision that has the purpose or effect of preventing the employee from disclosing or discussing conduct: (a)(A) That constitutes discrimination prohibited by ORS 659A.030, including conduct that constitutes sexual assault; or (B) That constitutes discrimination prohibited by ORS 659A.082 or 659A.112; and (b)(A) That occurred between employees or between an employer and an employee in the workplace or at a work-related event that is off the employment premises and coordinated by or through the employer; or (B) That occurred between an employer and an employee off the employment premises.

(2)(a) Whenever an employer and a former, current or prospective employee enter into an agreement, the terms of which release a claim brought against the employer by an employee alleging the occurrence of unlawful conduct described in subsection (1) (a) and (b) of this section, the agreement may include one or more of the following provisions only when the employee who is a party to the agreement requests the inclusion of such provisions in the agreement: (A) A provision described in subsection (1) of this section; (B) A provision that prevents the disclosure of the amount of or fact of any settlement; or (C) A no-rehire provision that prohibits the employee from seeking reemployment with the employer as a term or condition of the agreement. © 2023 Thomson Reuters. No claim to original U.S. Government Works.

1

659A.370. Nondisclosure provisions, nondisparagement provisions,..., OR ST § 659A.370

(b) It is a violation of this subsection for an employer or former employer to: (A) Make an offer of settlement conditional upon a request to include in the agreement the provisions described in paragraph (a) of this subsection.

(B) Fail to provide a person with whom the employer seeks to enter into the agreement a copy of the policy described in ORS 659A.375.

(3)(a) An agreement entered into under subsection (2) of this section must provide that the employee has at least seven days after executing the agreement to revoke the agreement. (b) The agreement may not become effective until after the revocation period has expired.

(4) The prohibitions under subsection (1) of this section do not apply to agreements entered into between an employer and a former, current or prospective employee if an employer makes a good faith determination that the employee has engaged in conduct prohibited by ORS 659A.030, including sexual assault, conduct prohibited by ORS 659A.082 or 659A.112 or conduct prohibited by this section .

(5) An employee may file a complaint under ORS 659A.820 for violations of this section and may bring a civil action under ORS 659A.885 and recover a civil penalty of up to $5,000 and relief as provided by ORS 659A.885 (1) to (3).

(6) This section does not apply to an employee who is tasked by law to receive confidential or privileged reports of discrimination, sexual assault or harassment.

(7) Except to the extent provided under subsections (2) and (4) of this section, provisions included in an agreement in violation of this section are void and unenforceable.

(8) Nothing in this section prohibits an employer from enforcing a nondisclosure or nondisparagement agreement that is unrelated to the conduct described in subsection (1) of this section.

(9) As used in this section, “sexual assault” means unwanted conduct of a sexual nature that is inflicted upon a person or compelled through the use of physical force, manipulation, threat or intimidation.

Credits Added by Laws 2019, c. 343, § 2, eff. Sept. 29, 2019, operative Oct. 1, 2020. Amended by Laws 2022, c. 107, § 1, eff. Jan. 1, 2023.

© 2023 Thomson Reuters. No claim to original U.S. Government Works.

2

659A.370. Nondisclosure provisions, nondisparagement provisions,..., OR ST § 659A.370

O. R. S. § 659A.370, OR ST § 659A.370 Current through laws of the 2023 Regular Session of the 82nd Legislative Assembly, which convened January 17, 2023, in effect through April 12, 2023, pending classification of undesignated material and text revision by the Oregon Reviser. See ORS 173.160. Some statute sections may be more current, see credits for details.

End of Document

© 2023 Thomson Reuters. No claim to original U.S. Government Works.

© 2023 Thomson Reuters. No claim to original U.S. Government Works.

3

2023 OADC ANNUAL CONVENTION CONTINUING LEGAL EDUCATION GUIDEBOOK

Lightning Round Paid Leave in Oregon PRESENTED BY:

Rachel Timmins, Ogletree Deakins

June 16, 2023 11:15am – 12:15pm

OADC Oregon Association of Defense Counsel

Rachel E. Timmins

Rachel is an associate in our Portland, Oregon office focusing on employment litigation and traditional labor. Rachel represents employers in a wide range of employment and labor matters. She has appeared in state and federal court, as well as in front of the National Labor Relations Board (NLRB) and through private arbitrations and mediations.

Rachel graduated cum laude from Lewis & Clark law school, where she was the Lead Article Editor of the Lewis & Clark Law Review and mentor to incoming law students. During law school, Rachel worked in the legal department of Adidas. Rachel also served as an extern to the Honorable Magistrate Stacie F. Beckerman at the U.S. District Court for the District of Oregon.

Rachel graduated with a Bachelor’s in Business Administration with a concentration in Accounting and worked as an accountant prior to attending law school.

PRACTICE AREAS

Employment Law Leaves of Absence/Reasonable Accommodation Traditional Labor Relations Wage and Hour

PROFESSIONAL ACTIVITIES

Oregon Women Lawyers Oregon Bar Association Oregon Association of Defense Counsel (OADC)

SPEECHES

Ogletree Deakins Webinar - “Coming Soon: Oregon Paid Family Medical Leave” - October 4, 2022

PUBLISHED WORKS

October 24, 2022 - Ogletree Deakins Blog Post - “Oregon Employment Department Releases Model Notice Poster for Paid Leave Oregon” October 24, 2022 - Ogletree Deakins Blog Post - “Oregon and Washington Issue Joint Letter Providing Guidance on Paid Family Leave” June 10, 2022 - Law360 - “Inside Oregon’s New Paid Family And Medical Leave Program” May 10, 2022 - Ogletree Deakins Blog Post - “A Primer on Oregon’s Paid Family and Medical Leave Insurance Program” March 14, 2022 - Ogletree Deakins Blog Post - “Oregon Legislation Addresses Workers’ Compensation and Overtime Issues for Agricultural and Manufacturing Employees”

EDUCATION

J.D., cum laude, Lewis & Clark Law School, 2021 B.B.A., University of New Mexico, 2016

HONORS

Lead Article Editor of Lewis & Clark Law Review

ADMISSIONS

Oregon Washington U.S. District Court, District of Oregon U.S. Court of Appeals, Ninth Circuit

2023 OADC Annual Convention – Lightning Round

Topic: Paid Leave Oregon Presented by: Rachel Timmins, Ogletree Deakins

Oregon’s long-awaited paid family and medical leave program, Paid Leave Oregon, began in 2023. This program provides wage replacement benefits and job protection to qualified employees for the birth or adoption of a child, an employee or their family member’s serious health condition, or if an employee or their family member has experienced domestic violence, sexual assault, or harassment. Qualified employees may file to receive benefits under the program starting on September 1, 2023.

Join employment attorney Rachel Timmins as she highlights important aspects of Paid Leave Oregon that employers and their counsel should know and how they can begin preparing for the implementation of the program.

OVERVIEW A new program that allows workers in Oregon to take paid time off for some of life’s most important moments that impact our families, health and safety.

Family Leave – to care for a family member with a serious

illness or injury, or to bond with a new child after birth, adoption or foster care placement.

Medical Leave – during one’s own serious health condition.

Safe Leave – for survivors of sexual assault, domestic violence, harassment, or stalking.

When will the Paid Leave program start?

Employers will begin payroll contributions in January 2023, and workers will be able to apply for benefits in September 2023.

Benefits:

to 12 weeks of paid leave per benefit year (up to 14 weeks for pregnancy$ Up related medical leave). You can take leave a week or a single day at a time.

If you have been with your employer for more than 90 days, your job $ remains protected and safe while you use paid leave. Your employer cannot penalize you for using paid leave.

payments depend on your wages and/or income compared to the $ Benefit statewide average weekly wage; many will receive 100% wage replacement.

Who is covered?

Any employee who has earned at least $1,000 during the year prior to claiming paid leave may be eligible. Most employees working in Oregon will be covered.

Tribal governments, self-employed business owners, and independent contractors may choose to participate by notifying the Paid Leave program.

paidleave.oregon.gov Paid Leave Overview fact sheet EN| PFMLI004 (0922)

How is this funded?

The Paid Leave program is funded by a trust fund. Both workers and employers contribute to the trust fund through payroll taxes. By November 2022, the Employment Department will set the contribution rate, which may be up to 1 % of an employee’s total wages.

Oregon employers will begin contributing to the paid leave trust fund on January 1, 2023. Once the rate is set, large employers will contribute 40%, and employees will contribute 60% of the total contribution for each individual. Small employers, those with fewer than 25 employees, are not required to contribute. However, grants will be available for those that choose to pay their 40%.

Equivalent Plans.

Employers may elect to provide their own paid leave plan for their employees.

These plans must provide equal to or greater benefits to employees compared to the state’s paid leave plan, and they may not cost more for employees than the state’s plan. The Paid Leave program must approve all employers’ equivalent plans. Employers may start submitting applications for equivalent plans in September 2022.

Get involved.

Currently we are creating the rules that will dictate how the Paid Leave program will work. We want to build a program that works for all Oregonians. We invite you to attend a public hearing or send us your comments. Visit our Paid Leave website for more information.

Learn More.

Visit paidleave.oregon.gov and subscribe to email updates.

Email us at paidleave@oregon.gov.

Call us at 833-854-0166.

paidleave.oregon.gov Paid Leave Overview fact sheet EN| PFMLI004 (0922)

Who pays for Paid Leave Oregon?

Paid Leave Oregon is a program we all pay into and benefit from. Here’s how contributions work: • The contribution rate will not be more than 1% of wages.

• Employees pay 60% of the contribution rate, no matter the employer size.

• Employers with 25 or more employees pay 40% of the contribution rate.

• Small employers with fewer than 25 employees are not required to contribute. Assistance grants are available.

Have questions?

We’re here to help.

Visit our website: paidleave.oregon.gov Email us: paidleave@oregon.gov Call us: 833-854-0166

Paid Leave Oregon Peace of mind when it matters most.

Paid Leave Oregon is a new program that allows employees in Oregon to take paid time off for many of life’s most important moments.

Paid leave to care for yourself and those you love Types of leave covered Family Leave: to care for a family member with a serious illness or injury, or to bond with a new child after birth, adoption or foster care placement.

Medical Leave: during your own serious health condition.

Safe Leave: for survivors of sexual assault, domestic violence, harassment, or stalking.

When will the Paid Leave Oregon program start?

Contributions start in January 2023.

Employees can start applying for benefits in September 2023.

Who’s covered?

Any employee, no matter how many hours you work, who earned at least $1,000 in the year before claiming paid leave may be eligible. This includes agricultural employees and those who may use an Individual Taxpayer Identification Number to file their taxes. Tribal governments, those who are self-employed, and independent contractors may choose to participate, but are not required.

What benefits are included for Oregon employees?

• You can take up to 12 weeks of paid leave per year (up to 14 weeks for pregnancy-related medical leave).

• You can take your leave when you need—a day, week or month at a time.

• If you’ve worked for your employer more than 90 days, then your job is protected.

Your employer cannot penalize you for taking time off.

• The benefit amount you get paid will depend on your wages and income. Visit our website for more details.

• Many employees will have 100% of their wages covered.

2023 OADC ANNUAL CONVENTION CONTINUING LEGAL EDUCATION GUIDEBOOK

Lightning Round Dealing with the Difficult Opponent: Tips for Approaching Settlement when the other Side Refuses PRESENTED BY:

John R. Bachofner, Bachofner Arbitration & Mediation

June 16, 2023 11:15am – 12:15pm

OADC Oregon Association of Defense Counsel

John Bachofner

John R. Bachofner has practiced law in Oregon since 1988 and Washington since 1989, with a focus on insurance coverage and litigation. He retired from the private practice of law as a Shareholder and Director at Jordan Ramis, PC, where he served as the firm’s Ethics and Loss Prevention Shareholder, and Chair of the firm’s Insurance Coverage and Defense Group. Effective 1/1/23, he is working solely as an arbitrator, mediator, and consultant with Bachofner Arbitration & Mediation.

An experienced trial lawyer, John has represented businesses, insurers, creditors, and individuals in a wide variety of civil matters, including coverage, commercial litigation, personal injury defense, business disputes, and bankruptcy. He has assisted both claimants and insurers in a wide variety of civil lawsuits, arbitrations, and mediations. His fair and balanced approach to litigation has resulted in him frequently serving as an arbitrator, mediator, or expert in UM/UIM, PIP, and other civil matters.

A former elected member of the OSB Board of Governors, John’s reputation and experience over the last 34 years has resulted in him receiving a Martindale-Hubbell® AV Preeminent® rating, the organization’s highest rating; listing in The Best Lawyers in America®, Litigation - Insurance; and listing in Washington Super Lawyers, Creditor-Debtor Rights. He is a past chair of the Oregon State Bar’s Litigation Section, and past chair of Jordan Ramis PC’s Litigation and Insurance Coverage and Defense Groups. He has represented individuals and organizations in a variety of state and federal courts, arbitration forums, and agency hearings, as well as in a variety of transactions.

John enjoys an eclectic variety of hobbies, from singing and acting, to camping, Ham radio, swimming, teaching, and scuba diving. An avid scuba diver since 1982, John is a licensed scuba instructor for PADI and NAUI. John has been recognized as an expert on insurance coverage, frequently speaking and presenting on those and other areas, with a focus on FirstParty PIP, and UM/UIM issues. He is the author of the Oregon State Bar’s practice manual on UM/UIM coverage, and has served as an expert in various First-Party attorney fee disputes. In January 2023, John received his certification from the Nation al Association of Certified Mediators. He is also a member of the Oregon Mediator’s Association, Oregon Association of Defense Counsel, and Oregon Trial Lawyer’s Association.

MEMBERSHIP AND ACTIVITIES

Oregon Association of Defense Counsel (1992–Present); Board of Directors (2012–2014); Chair Practice Management Group (2021–2022) Oregon Trial Lawyer’s Association (2023 – Present) Oregon State Bar: Board of Governors, Out-of-State Region Member (2016–2019) OSB House of Delegates, Delegate (2000–2015) Out-of-State Delegate (2020–Present)

EDUCATION

B.A., Pacific Lutheran University, 1985 J.D., cum laude, University of Puget Sound School of Law, 1988

ADMISSIONS State of Oregon

State of Washington U.S. Court of Appeals, Ninth Circuit U.S. District Court, District of Oregon U.S. District Court, Western District of Washington U.S. District Court, Eastern District of Washington

AWARDS AND HONORS

The Best Lawyers in America®, Litigation – Insurance, 2018-2022 Superb AVVO Rating, 2022 Oregon State Bar, President’s Public Service Award, 1994 Martindale-Hubbell® AV Preeminent® Attorney Martindale-Hubbell® Top-Rated Lawyer in “Insurance Law,” 2013

Washington State Bar Association, Taskforce on Mandatory Malpractice Insurance (2018–2020)

“From PIP to UIM to Every Lien in Between,” Oregon Law Institute, April 2016

Oregon Council on Court Procedures (2009–2017), ChairElect (2015–2016), Chair (2016–2017)

“How to Effectively Present and Defend PIP and UM/UIM Claims,” Multnomah Bar Association, December 2015

OSB Procedure and Practice Committee (2013–2015) OSB Task Force on International Trade in Legal Services (2013) OSB Litigation Section Executive Committee (2010– 2019), Chair (2016) OSB Law-Related Education Committee, Past Chair

“Legislative Update and the New World for UM/UIM/ PIP Claims,” Oregon Association of Defense Counsel, November 2015 “Get What You Paid For: Stacking of UIM and PIP under SB 411,” Oregon Trial Lawyers Association, October 2015

OSB New Lawyer’s Division Law-Related Education Committee (1993–1995)

“Negotiation Ethics: Winning Without Selling Your Soul,” Oregon State Bar, October 2015

OSB Public Service and Information Committee (1993– 1996)

“Collecting Judgments in Oregon,” Oregon Civil Trial Procedure, Oregon State Bar, September 2015

Washington Scuba Alliance, Board of Directors (2010– Present) Camas-Washougal Chamber of Commerce (2004–2023); Board of Directors (2012–2014) Oregon Law Commission, Auto Insurance Legislation Workgroup, Appointee (2003–2007) Defense Research Institute Oregon Casualty Adjusters Association Multnomah Bar Association Clark County Bar Association Washington Defense Trial Lawyers Oregon Mediation Association National Association of Certified Mediators

PRESENTATIONS AND PUBLICATIONS OSB Torts CLE Update, 2023

UM/UIM Coverage 101, Oregon Trial Lawyer’s Association, October 2022

“Legislative Changes to Uninsured/Underinsured Motorist and PIP Coverage,” Oregon Casualty Adjusters Association, July 2015 “Impacts of Measure 91,” Oregon Casualty Adjusters Association, April 2015 “Advanced Uninsured and Underinsured Motorist Issues,” Oregon Law Institute, Oregon Association of Defense Counsel, May 2014 “Obtaining and Collecting Your Client’s Judgment — Show Me the Money,” Oregon State Bar 2013 “Litigating the Uninsured & Underinsured Motorist Claim,” National Business Institute 2013 “Collections: Seeking and Collecting a Judgment,” National Business Institute 2012 “Presenting and Defending Uninsured, Underinsured, and PIP Claims in Oregon,” Oregon State Bar 2011 “Collections: Seeking and Collecting a Judgment,” National Business Institute 2011

“The Paradigm Shift in Oregon Law? The Moody Decision and its Potential Ramifications,” Oregon Association of Defense Counsel, February 2022

“Uninsured/Underinsured Motorist Law 101,” National Business Institute 2011

Chapter 22, Uninsured and Underinsured Motorist Coverage, OSB Insurance Law in Oregon CLE, 2020

“Common Questions Asked by Adjusters and Attorneys Handling UM/UIM Claims,” Oregon Association of Defense Counsel 2011

“UM/UIM Arbitration – Maximizing the Benefits and Minimizing the Pitfalls,” Oregon Association of Defense Counsel Fall Seminar, November 2019

“Recent Developments in UM, UIM and PIP Coverage,” Multnomah Bar Association CLE, 2003, 2004, 2010, 2011

Speaker, “Obtaining and Collecting Your Client’s Judgment–Show Me the Money,” Oregon State Bar, 2013, 2015, 2017, 2019 “It’s a Whole New World! What’s New in Stacking and UM/UIM Set-offs,” National Business Institute Seminar, December 2017

“Collection Law from Start to Finish,” National Business Institute, 2007, 2008, 2010 “Advanced Uninsured/Underinsured Motorist Coverage,” National Business Institute, 2008, 2009 “Pleadings and Parties,” Oregon State Bar Civil Procedure, 2007

“Debt Collection From Start to Finish in Oregon,” National Business Institute, 2004, 2006 “How to Successfully Collect on Judgments in Oregon,” National Business Institute, 2005 “Persuasion within the State,” OADC Annual Convention, 2005 “Auto Insurance Repair,” OADC Fall Seminar, 2004 “Personal Injury Protection and Uninsured/Underinsured Motorist Coverage,” IISOI, 2003 “Auto Insurance Law and Accident Litigation in Oregon,” CLE, 2003 “What Every Oregon Lawyer Should Know About Washington PIP & UIM,” OADC Annual Convention, 2002 “Fundamentals of Oregon Civil Trial Procedure,” OSB CLE, 2001 “UM/UIM Issues,” OADC Annual Convention, 2001 “Five Strategies to Reduce Your Bottom Line in UM/UIM Cases,” Oregon Casualty Adjusters, 2000 “Tips for Defense Counsel and Adjusters in Dealing with UM/UIM Claims,” OADC Fall Seminar, 2000 “UM, UIM Strategies & Developments,” OSB Insurance Law CLE, 1999

DEALING WITH THE DIFFICULT OPPONENT: TIPS FOR APPROACHING SETTLEMENT WHEN THE OTHER SIDE REFUSES

1. THE NO-WIN SCENARIO: Your case is defensible, but the other side has unrealistic expectations on liability, value, or both. Your insurer wants it settled and does not want to keep spending money, but the other side remains in the stratosphere. What do you do?

2. WHAT CAN BE DONE? Using a recent case as an example, this session will focus on strategies to educate your opponent on the blemishes in their case, while “keeping your powder dry” for trial. Join us for a discussion of ORCP 54E Offers to Allow Judgment, Mediation, and Motions for Summary Judgment.

ORCP 54. Dismissal of actions; offer to allow judgment, OR R RCP ORCP 54

West's Oregon Revised Statutes Annotated Title 1. Courts of Record; Court Officers; Juries Oregon Rules of Civil Procedure (Refs & Annos) OR Rules Civ. Proc., ORCP 54 ORCP 54. Dismissal of actions; offer to allow judgment Effective: May 1, 2020 Currentness A Voluntary dismissal; effect thereof.

A(1) By plaintiff; by stipulation. Subject to the provisions of Rule 32 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 by filing a notice of dismissal with the court and serving the notice on all other parties not in default not less than 5 days prior to the day of trial if no counterclaim has been pleaded, or by filing a stipulation of dismissal signed by all adverse parties who have appeared in the action. Unless otherwise stated in the notice of dismissal or stipulation, the dismissal is without prejudice, except that a notice of dismissal operates as an adjudication upon the merits when filed by a plaintiff who has once dismissed in any court of the United States or of any state an action against the same parties on or including the same claim unless the court directs that the dismissal shall be without prejudice. Upon notice of dismissal or stipulation under this subsection, a party shall submit a form of judgment and the court shall enter a judgment of dismissal.

A(2) By order of court. Except as provided in subsection A(1) of this rule, an action shall not be dismissed at the plaintiff's instance save upon judgment of dismissal ordered by the court and upon any terms and conditions that the court deems proper.

If a counterclaim has been pleaded by a defendant prior to the service upon the defendant of the plaintiff's motion to dismiss, the defendant may proceed with the counterclaim. Unless otherwise specified in the judgment of dismissal, a dismissal under this subsection is without prejudice.

A(3) Costs and disbursements. When an action is dismissed under this section, the judgment may include any costs and disbursements, including attorney fees, provided by contract, statute, or rule. Unless the circumstances indicate otherwise, the dismissed party shall be considered the prevailing party.

B Involuntary dismissal.

B(1) Failure to comply with rule or order. For failure of the plaintiff to prosecute or to comply with these rules or any order of court, a defendant may move for a judgment of dismissal of an action or of any claim against that defendant.

B(2) Insufficiency of evidence. After the plaintiff in an action tried by the court without a jury has completed the presentation of plaintiff's evidence, the defendant, without waiving the right to offer evidence in the event the motion is not granted, may move for a judgment of dismissal on the ground that upon the facts and the law the plaintiff has shown no right to relief. The court as trier of the facts may then determine them and render judgment of dismissal against the plaintiff or may decline to render any judgment until the close of all the evidence. If the court renders judgment of dismissal with prejudice against the plaintiff, the court shall make findings as provided in Rule 62.

B(3) Dismissal for want of prosecution; notice. Not less than 60 days prior to the first regular motion day in each calendar year, unless the court has sent an earlier notice on its own initiative, the clerk of the court shall mail notice to the attorneys of

© 2023 Thomson Reuters. No claim to original U.S. Government Works.

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ORCP 54. Dismissal of actions; offer to allow judgment, OR R RCP ORCP 54

record in each pending case in which no action has been taken for one year immediately prior to the mailing of such notice that a judgment of dismissal will be entered in each such case by the court for want of prosecution unless, on or before such first regular motion day, a motion, either oral or written, is made to the court and good cause shown why it should be continued as a pending case. If a motion is not made or good cause is not shown, the court shall enter a judgment of dismissal in each such case. Nothing contained in this subsection shall prevent the dismissal by the court at any time for want of prosecution of any action upon motion of any party thereto.

B(4) Effect of judgment of dismissal. Unless the court in its judgment of dismissal otherwise specifies, a dismissal under this section operates as an adjudication without prejudice.

C Dismissal of counterclaim, cross-claim, or third party claim. The provisions of this rule apply to the dismissal of any counterclaim, cross-claim, or third party claim.

D Costs of previously dismissed action.

D(1) Previous action dismissed by plaintiffs. If a plaintiff who has once dismissed an action in any court commences an action based upon or including the same claim against the same defendant, the court may make any order for the payment of any unpaid judgment for costs and disbursements against plaintiff in the action previously dismissed that it may deem proper and may stay the proceedings in the action until the plaintiff has complied with the order.

D(2) Previous claim dismissed with prejudice. If a party who previously asserted a claim, counterclaim, cross-claim, or third party claim that was dismissed with prejudice subsequently files the same claim, counterclaim, cross-claim, or third party claim against the same party, the court shall enter a judgment dismissing the claim, counterclaim, cross-claim, or third party claim and may enter a judgment requiring the payment of reasonable attorney fees incurred by the party in obtaining the dismissal.

E Offer to allow judgment; effect of acceptance or rejection.

E(1) Offer. Except as provided in ORS 17.065 to 17.085, any party against whom a claim is asserted may, at any time up to 14 days prior to trial, serve upon any other party asserting the claim an offer to allow judgment to be entered against the party making the offer for the sum, or the property, or to the effect therein specified. The offer shall not be filed with the court clerk or provided to any assigned judge, except as set forth in subsections E(2) and E(3) of this rule.

E(2) Acceptance of offer. If the party asserting the claim accepts the offer, the party asserting the claim or the party's attorney shall endorse the acceptance thereon and file the accepted offer with the clerk before trial, and within 7 days from the time the offer was served upon the party asserting the claim; and thereupon judgment shall be given accordingly as a stipulated judgment.

If the offer does not state that it includes costs and disbursements or attorney fees, the party asserting the claim shall submit any claim for costs and disbursements or attorney fees to the court as provided in Rule 68.

E(3) Failure to accept offer. If the offer is not accepted and filed within the time prescribed, it shall be deemed withdrawn, and shall not be given in evidence at trial and may be filed with the court only after the case has been adjudicated on the merits and only if the party asserting the claim fails to obtain a judgment more favorable than the offer to allow judgment. In such a case, the party asserting the claim shall not recover costs, prevailing party fees, disbursements, or attorney fees incurred after the date of the offer, but the party against whom the claim was asserted shall recover from the party asserting the claim costs and disbursements, not including prevailing party fees, from the time of the service of the offer.

F Settlement conferences. A settlement conference may be ordered by the court at any time at the request of any party or upon the court's own motion. Unless otherwise stipulated to by the parties, a judge other than the judge who will preside at trial shall conduct the settlement conference.

© 2023 Thomson Reuters. No claim to original U.S. Government Works.

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ORCP 54. Dismissal of actions; offer to allow judgment, OR R RCP ORCP 54

Credits [CCP Dec. 2, 1978; amended by Laws 1979, c. 284, § 32; § E amended by CCP Dec. 13, 1980; § A amended by Laws 1981, c.

912, § 2; § E amended by Laws 1983, c. 531, § 1; § A amended by CCP Dec. 8, 1984; amended by Laws 1995, c. 618, § 1; § E amended by CCP Dec. 11, 2004, eff. Jan. 1, 2006; § E amended by CCP Dec. 13, 2008, eff. Jan. 1, 2010; §§ A, B, D and E amended by CCP Dec. 11, 2010, eff. Jan. 1, 2012; §§ A, B, D, E amended by CCP Dec. 6, 2014, eff. Jan. 1, 2016.]

Rules Civ. Proc., ORCP 54, OR R RCP ORCP 54 Current through Chapters 3, 13, and 14 enacted in the 2021 Regular Session of the 81st Legislative Assembly, which convened January 22, 2021, pending classification of undesignated material and text revision by the Oregon Reviser. See ORS 173.160.

End of Document

© 2023 Thomson Reuters. No claim to original U.S. Government Works.

© 2023 Thomson Reuters. No claim to original U.S. Government Works.

3

2023 OADC ANNUAL CONVENTION CONTINUING LEGAL EDUCATION GUIDEBOOK

Lightning Round My Recent Experience as a Juror in Washington County PRESENTED BY:

Melanie Rose, Smith Freed Eberhard

June 16, 2023 11:15am – 12:15pm

OADC Oregon Association of Defense Counsel

Melanie Rose

EXPERTISE OVERVIEW

Melanie is a litigator with a diverse civil litigation practice focusing on catastrophic injury, premises liability, automobile liability, dram shop, and commercial litigation. Melanie’s practice takes her all over the state of Oregon and Washington regularly, and occasionally into Idaho as well. She has given a number of presentations on changes in Oregon and Washington law highlighting the Pacific Northwest’s unique legal landscape.

PROFESSIONAL BACKGROUND

Before joining Smith Freed Eberhard, Melanie handled first-party insurance claims including claims related to PIP, UM/UIM, bad faith, and consumer protection act claims on behalf of insurance carriers. Melanie also has experience handling insurance subrogation matters. This highvolume practice placed a premium on efficiency, diligence, and energy that has carried over into her current practice.

In law school, Melanie won awards for both client advocacy and legal writing. Some of Melanie’s first experiences in the legal community were volunteering for the Washington County Family Law Assistance Program and working at the Low Income Taxpayer Clinic.

PERSONAL LIFE

Melanie is an Oregon native and grew up in a handful of smaller, Southern Oregon towns. She moved to the big city for law school, fell in love with Portland, and can’t imagine being anywhere else. Away from work, Melanie can usually be found teaching knitting lessons at a local yarn shop, checking out a local brewery, or getting her yearly supply of Vitamin D during the 4 months of the year that it’s dry enough to be outside.

EDUCATION

Lewis and Clark Law School, J.D., cum laude, 2012 Lawrence University, B.A., summa cum laude, 2009

PRACTICE AREAS

Commercial Liability Defense

BAR ADMISSIONS Oregon Washington Idaho

CERTIFICATION & ACCOLADES

Member, Oregon State Bar Association Member, Washington State Bar Association Member, Idaho State Bar Association Admitted, U.S. District Court – District of Oregon Admitted, U.S. District Court – Western District of Washington Admitted, U.S. District Court – Eastern District of Washington Admitted, U.S. District Court – District of Idaho Admitted, U.S. District Court – US 9th Circuit Court of Appeals Super Lawyers Rising Star 2021-2022

2023 OADC Annual Convention – Lightning Round

Topic: My Recent Experience as a Juror in Washington County Presented by: Melanie Rose, Smith Freed Eberhard

Melanie Rose was recently empaneled on a jury that resulted in a mistrial. As it is rare that attorneys are afforded the opportunity to peak behind the veil into the minds of jurors, she plans to share her personal experience from the voir dire process through the end of the trial. While the experience ended in a mistrial, the process was still very illuminating, and Melanie is excited to share her experiences behind the closed door. Listeners should expect to walk away with concrete tips on how to better present evidence with the average juror in mind.

•

Key Takeaways: o o o o

Become a civics teacher.

Have a strong opening statement.

Anticipate speculation.

Beware of experts in your panel.

UCrJI 1004 PRECAUTIONARY INSTRUCTIONS [To be given after the jury is selected] Members of the jury, I will now explain some of the rules that apply during a trial.

There are eight stages to most trials, and I will briefly explain each stage: (1) Jury selection. We just completed that part.

(2) Explanation of the general rules. That is what I am doing now.

(3) Opening statements. This is when the attorneys summarize what they expect the evidence to be.

(4) Presentation of the evidence. This is when witnesses and exhibits are presented.

(5) *Closing arguments. This is when the attorneys have the opportunity to persuade you how to decide the case.

(6) Jury instructions. This is when the judge explains the law that applies to the particular charges in the case. This includes explaining what the state must prove beyond a reasonable doubt for a guilty verdict. You will receive a printed copy of the instructions.

(7) Deliberations. This is when you go back into the jury room and decide whether the defendant is guilty or not guilty [of any particular charge].

(8) Return of verdict. This is when you tell us your verdict[s].

I will explain in a moment what is and what is not evidence. It is extremely important that you consider only the evidence in deciding the facts.

Do not allow any personal feelings, sympathy, prejudice, or bias—whether conscious or unconscious—to influence your decision making. You must not be biased in favor of or against any party, witness, or lawyer because of the person’s disability, gender, gender identity, race, religion, ethnicity, sexual orientation, age, national origin, [or] socioeconomic status[, or insert any other impermissible form of bias against a group or status that is not a protected class, e.g., a person’s profession].

[As part of your orientation, you were shown a video on unconscious bias.] Unconscious bias is a term used by social scientists to describe the reality that everyone[, including me,] has feelings, assumptions, perceptions, fears, and stereotypes, that is, “unconscious biases,” that we may not be aware of. These hidden thoughts can affect what we see and hear, how we remember what we see and hear, how we interact with others, and how we make important decisions. Our biases can affect how we act, favorably or unfavorably, toward someone. You should make every effort to be aware of your unconscious biases and what effect those may have on your decision making.

As a judge, I am a gatekeeper regarding evidence. I determine what the law allows to be evidence. In effect, the law considers anything that is not evidence to be unreliable; that is why you may not consider nonevidence in deciding the facts. However, the law does not conclude that anything that is evidence is necessarily reliable. Determining the reliability or believability of evidence is ultimately your responsibility. You must decide what evidence is believable and how believable or persuasive any particular piece of evidence is. So, while you are not allowed to consider anything that is not evidence in deciding the facts, you are free to decide how believable or unbelievable, important or unimportant, any particular piece of evidence is in deciding the facts.

Evidence consists of testimony of witnesses and exhibits that are admitted into evidence.

Testimony is what a witness, who has sworn or affirmed to answer questions truthfully, says while being examined as a witness. Exhibits are physical objects, such as photographs, charts, and letters.

You will be able to examine admitted exhibits during your deliberations. You may draw reasonable inferences from the evidence, but do not guess or speculate.

In understanding what is evidence, it is helpful to have some examples of what is not evidence.

The fact that a criminal charge has been filed against the defendant is not evidence. Any defendant is innocent of any crime unless and until the state proves the defendant’s guilt beyond a reasonable doubt.

Questions from lawyers—and other nonwitnesses, for that matter—are not evidence. So, whenever I sustain an objection to a question, do not speculate about why the question was asked or what the answer would have been.

This is a subtle but important point. In our everyday lives, if a friend asks us if we have seen our mutual friend’s new car [the court should feel free to choose its own example], we infer from the question that the mutual friend has a new car. However, it is not the same in a trial. The person asking the question is not a witness and is not subject to the safeguards that the law requires before you may consider the person’s words as evidence. So, in court, you are not allowed to consider questions asked by attorneys or nonwitnesses in determining what the facts are. Those questions are not evidence.

Of course, when a witness answers a question, you may consider the answer in the context of the question. For example, if a lawyer asks, “Was the traffic light red or green?” and the witness answers, “Green,” you may take the answer as stating that the traffic light was green. However, if the witness answers, “There was no traffic light,” you may not take the question as evidence that there was a traffic light.

From time to time, a lawyer may object to something that is offered into evidence. I will decide whether the objected-to material will be admitted into evidence. If I overrule the objection, the material—for example, an exhibit or a witness’s answer to a question—becomes evidence. If I sustain the objection, the exhibit is not admitted and is not evidence, or the witness is not allowed to answer the question. If the witness starts to answer a question before I sustain an objection to the question, you must disregard the witness’s response because the response is not evidence.

Occasionally, I may decide that something that had been admitted into evidence should not have been. If that happens, I will instruct you to disregard the exhibit or testimony that should not have been admitted. This means that the material is no longer evidence. You must not consider it in any way. You must treat it as if the question had not been answered or the exhibit had not been received in the first place.

You must not interpret any statement, ruling, or remark I make during this trial as any indication that I have formed any opinion about the facts or outcome of this case. You, and you alone, are to decide the facts. You must decide how believable the evidence is and what weight or value you will give that evidence.

[During this trial, you may be allowed to ask questions of witnesses. If you have any questions of the witnesses, you will submit them in writing. The procedure for submitting questions is as follows: A/B (Procedures are to be established by the judge; sample procedures are set forth below.)

Your questions are subject to the rules of evidence, just as the lawyers’ questions are. I will review the question with the lawyers and will rule on whether the question may be asked. I will be the person to ask the question of the witness if I decide it is proper. We do not expect jurors to know the fine points of asking questions pursuant to the rules of evidence. Accordingly, I may sometimes modify a question so that it conforms to the rules of evidence. If the question is not asked, jurors should not draw any inferences about my ruling or speculate as to what the answer to the question

might have been. Do not weigh answers to a juror question any differently than any other answer simply because the answer was given in response to a juror question. After any juror questions, the lawyers are allowed to ask follow-up questions.]

You may take notes, if you wish, during the trial. However, please keep in mind that each party is entitled to the considered decision of each juror. Therefore, during deliberation, you should not give undue weight to another juror’s notes if those notes conflict with your notes or your recollection of the evidence. Do not allow your note-taking to interfere with your ability to observe and evaluate testimony. Your notes may be in only two places: the courtroom and the jury room.

You may not take the notes with you on lunch or overnight breaks, for example. My staff will make sure that your notes are safe and that no one has access to them in your absence.

Do not discuss this case during the trial with anyone, including any of the lawyers, parties, witnesses, your friends, or members of your family. This includes not communicating with anyone by any other means, such as telephone, text messages, email, Internet chat, blogs, or social networking websites. Do not discuss this case with other jurors or look at other jurors’ notes until you begin your deliberations at the end of the case, after you have heard all the evidence and the arguments of the lawyers and been instructed on the law that applies to the case. Each of you must keep an open mind throughout the trial and must not attempt to decide the case until you begin your deliberations.

Do not make any independent personal investigations into any facts or locations connected with this case. Do not look up any information from any source. Do not communicate any private or special knowledge about any of the facts of this particular case to your fellow jurors. Decide the case only on the evidence received here in court. Do not read any news stories, listen to any radio or television reports, or read or listen to anything on the Internet about this case or about anyone involved in this case.

In addition to conventional research, you also must not use any Internet search engine—such as Google—to look for any information about the case, the law that applies to the case, or the people involved in the case, including the defendant, the witnesses, the lawyers, or the judge. Do not use any map program or mapping system to attempt to view or locate any of the locations that may be discussed in this case.

In short, do not communicate with anyone by any means concerning what you see or hear in the courtroom, and do not try to find out more about this case, by any means, other than what you learn in the courtroom. Decide the case only on what happens here in open court, where both the state and the defense are aware of and have the opportunity to question the sources of the evidence and to address any legal issues that may arise. That is the only fair way to decide a case.

If you base your verdict on anything other than what you learn in this courtroom, that could be grounds for a mistrial—which means that all of the work that you, your fellow jurors, the parties, the lawyers, and the judge have done will have to be done all over again. That is why this is so important. [If you disobey any of my orders, you could be held in contempt of court.]

Ignore any attempted improper communication. If any person tries to communicate with you about this case, tell that person that you cannot discuss the case because you are a juror. If that person persists, simply walk away and report the incident to the court. You may not talk to anyone about this case—even the people closest to you—except to say that you are a juror on a criminal case and Judge ____ says you cannot talk about it.

After you have rendered your verdict, or have been otherwise discharged by me, you will be free to do any research you choose, or to share your experiences with anyone you choose either directly or through your favorite electronic means.

Remember that all phones, laptops, and other electronic devices must be turned off while you are in court and while you are in deliberations. [The bailiff will take all such devices from you during deliberations. We do this, in part, to prevent anyone from questioning whether jurors are engaging in improper communications during deliberations.]

We will now hear the opening statements in which the lawyers will outline the evidence as they expect it to be. After the opening statements, the evidence will be presented. *At the conclusion of the evidence, the lawyers will make their closing arguments to you. I will then instruct you about the law that applies to this case, and you will begin your deliberations.

At the end of the trial, you will have to make your decision based on what you recall of the evidence. You will not have a written transcript to consult[, and it is difficult to play back recorded testimony, so that is not typically done]. I urge you to pay close attention to the testimony as it is given. If at any time, you cannot hear a question or answer, let me know immediately by raising your hand. In performing your role, you must, of course, be fair and impartial. You must follow the law whether you agree with it completely or not, and you must not allow yourself to be influenced at all by personal feelings, sympathy for, or prejudice against anyone involved in this case. ____________________ A

Please wait until the end of the witness testimony, because the question may be answered by the time the lawyers are through. You may write your question down, fold it, and hold the paper up to get my attention, or you may raise your hand and we will wait for you to write out your question if you have not already done so. The clerk will get the question from you.

B When the lawyers are finished questioning the witness, you will retire to the jury room where you may write down your question or questions. Do not sign your name to the question. The clerk will retrieve the question, and we will review it before you are brought back to the courtroom. ____________________ COMMENT: ORCP 58 B; ORS 136.330(1). This instruction should be given after the jury is impaneled and before opening statements. This is a preliminary instruction and is not intended to replace any instructions that would ordinarily be given after argument.

The decision to allow juror questions is at the discretion of the court. See §1.19 of the Users’ Guide for discussion on the use of juror questions. If the court does allow questions, the court must afford the parties an opportunity to object to the questions outside the presence of the jury. ORCP 58 B(9).

The paragraphs concerning electronic communication and research were added following several incidents across the country in which jurors were blogging or doing Internet research during trials and deliberations.

The Committee removed the phrase “and it will not be possible for the court reporter to read back testimony” from the final paragraph of the instruction because it implied an incorrect statement of the law. Although most courts no longer use reporters, it is within the trial court’s discretion to refresh the jury’s recollection regarding testimony. Physical or electronic limitations of individual courtrooms may affect that ability, but there is no legal prohibition. State v. Vaughn, 200 Or 275, 278, 265 P2d 249 (1954) (“The better rule, however, seems to be that whether in a particular case certain portions of the testimony should be read to a jury rests in the discretion of the trial court, and this state conforms to this rule.”) (citation omitted); State v. Jennings, 131 Or 455, 475, 282 P 560 (1929); State v. Miller, 2 Or App 353, 355, 467 P2d 683 (1970) (“While such requests should not

be encouraged, when a jury requests that testimony be repeated the decision on that request lies within the discretion of the trial court.”).

The bracketed paragraph addressing mistrials and contempt may not be needed in most trials. In certain circumstances, though, such an instruction may be warranted. *Judges who give jury instructions before closing arguments should modify this instruction accordingly.

4/20

2023 OADC ANNUAL CONVENTION CONTINUING LEGAL EDUCATION GUIDEBOOK

Lightning Round Effectively Asserting the Economic Waste Defense to Avoid Cost of Repair Damages PRESENTED BY:

Molly Honoré, Markowitz Herbold

June 16, 2023 11:15am – 12:15pm

OADC Oregon Association of Defense Counsel

Molly Honoré

Molly Honoré is a pragmatic litigator who works with her clients to solve complex business problems. Molly wants to get to know you and your organization, find out what matters to you, and learn your goals and concerns. She knows that a case is never just about the bottom line and that details matter.

To her, law is best practiced in a dynamic, hands-on manner. Molly’s clients appreciate her direct involvement and straightforward communication at every stage of their representation whether developing case themes, deciding how to structure an argument, or strategizing during negotiations. Her style is well matched to litigation involving closely-held businesses, the focus of Molly’s practice.

Molly is adept at managing litigation in state and federal court. She routinely advises and represents clients in commercial disputes, including shareholder and contract matters, business tort claims, products liability, professional negligence, and real estate litigation. Her recent successes include: • Achieving dismissal with prejudice of action for breach of contract and trade secret misappropriation • Negotiating favorable settlement of multiple related lawsuits involving shareholder disputes among owners of a closely-held company • Defeating a motion to dismiss a $30 million negligent misrepresentation claim, arguing an issue of first impression for Oregon courts • Arbitrating accounting irregularities on behalf of minority owners of a closely-held company • Litigating and resolving real estate, shareholder, misappropriation of trade secrets, and breach of contract actions up to and through trial Molly’s legal practice draws from her diverse and unique life experiences. Her decision to pursue a legal career was largely motivated by a volunteer position assisting with the legal representation of a Guantanamo Bay detainee.

The detainee was a French-speaking Moroccan national. Molly, who understands and speaks some French, was granted special clearance to travel to the naval station at Guantanamo Bay and conduct on-site interviews of the detainee. She was able to speak with him directly without an intermediary interpreter and was asked to translate and interpret documents as part of his defense.

Before law school, Molly also spent two years as an Outreach Coordinator for AmeriCorps in Massachusetts where she managed a team of AmeriCorps members and directed planning and volunteer recruitment for environmental restoration and clean-up events.

As a law student, Molly clerked for the Oregon Department of Justice’s Special Litigation Unit where she assisted with specialized cases, including high-profile Constitutional challenges, complex regulatory cases, and environmental litigation.

Molly earned her J.D. with a certificate in business law from Lewis & Clark Law School, summa cum laude, where she was an articles editor for the Lewis and Clark Law Review. She was awarded the John and Susan Bates Scholarship for Business Law and was selected as a Keller Law and Entrepreneurship Scholar. Molly also was inducted into the Cornelius Honor Society by the law school faculty based on her distinguished scholarship, leadership, and contribution to the lawschool community.

2023 OADC Annual Convention – Lightning Round

Topic: Effectively Asserting the Economic Waste Defense to Avoid Cost of Repair Damages Presented by: Molly Honoré, Markowitz Herbold

In this brief presentation, Molly Honoré will explore the concept of the economic waste defense in Oregon and its potential application to avoid cost of repair damages in construction and landlord-tenant disputes. The economic waste defense allows parties to argue against the traditional measure of damages for breach of contract claims by asserting that the cost of repair exceeds the diminution in value of the damaged property. Molly will discuss the factors that courts typically consider when evaluating a claim based on economic waste, including the property’s economic value, the extent of the damage, and the feasibility of repairs. Additionally, we will examine relevant case law to highlight the successful implementation of this defense strategy.

Montara Owners Ass'n v. La Noue Development, LLC, 357 Or. 333 (2015) 353 P.3d 563

KeyCite Yellow Flag - Negative Treatment Declined to Extend by Graydog Internet, Inc. v. Giller, Or., November 30, 2017

357 Or. 333 Supreme Court of Oregon.

MONTARA OWNERS ASSOCIATION, an Oregon non-profit corporation, Plaintiff, v.

LA NOUE DEVELOPMENT, LLC, an Oregon limited liability company; et al., Defendants.

La Noue Development, LLC, an Oregon limited liability company, Third–Party Plaintiff–Appellant, Respondent on Review, and Mark La Noue, an individual, Third–Party Plaintiff, v.

Suttles Construction, Inc., an Oregon corporation; Gordon Harding, an individual, dba Gordon Harding Construction; MCM Architects, PC, an Oregon professional corporation; et al., Third–Party Defendants, and Vasily A. Sharabarin, an individual, dba Advanced Construction, Third–Party Defendant–Respondent, Petitioner on Review.

Evans Construction Siding Corporation, an Oregon corporation, Fourth–Party Plaintiff, v.

Dave Burgess Construction, Inc., an Oregon corporation; et al, Fourth–Party Defendants.

Dave Burgess Construction, Inc., an Oregon corporation, Fifth–Party Plaintiff, v.

Raul Hernandez and Carlos Hernandez, individuals, dba Hernandez Brothers, a partnership; et al, Fifth–Party Defendants.

La Noue Development, LLC, an Oregon limited liability company; and Mark La Noue, an individual, Plaintiffs, v.

MCM Architects, PC, an Oregon professional corporation, Defendant.

(CC051213487, CC061213628; CA A140771; SC S062120)

| Argued and Submitted Nov. 6, 2014. | Decided June 18, 2015.

Synopsis Background: Homeowners association filed a complaint against general contractor for damages caused by design and construction defects. General contractor filed third party complaints against subcontractors, then settled claims with homeowners' association. Following trial on general contractor's contract claims against nonsettling subcontractors, the Circuit Court, Multnomah County, Jean Kerr Maurer, J., entered judgment on jury verdict that was in favor of general contractor but awarded limited damages, and later denied general contractor's recovery of attorney fees as consequential damages and denied its motion for new trial.

General contractor appealed. The Court of Appeals, 259 Or.App. 657, 317 P.3d 257, affirmed in part, reversed in part, and remanded. Subcontractor petitioned for review.

Holdings: After granting review the Supreme Court, Balmer, C.J., held that: [1] indemnity clause in subcontract could be enforced by the trial court after the illegal portion of the provision, which required subcontractor to indemnify general contractor for its own negligence, was severed; [2] trial court erred when it instructed the jury on economic waste as part of its instruction for the breach of contract claim; [3] error did not substantially affect general contractor's substantial rights; and [4] as an apparent matter of first impression, homeowner association's claims against general contractor, and general contractor's third party claims against subcontractor, both generated attorney fees that arose within the same action, for the purpose of determining whether general contractor's attorney fees incurred in defending against association's claims arose prior to the pending third party action, and thus were not subject to the civil procedure rule governing the post-trial recovery of attorney fees.

Affirmed in part, reversed in part, and remanded.

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Procedural Posture(s): On Appeal.

West Headnotes (16) [1]

[5]

Indemnity and owners

Contractors, subcontractors,

Indemnity and owners

Contractors, subcontractors,

Indemnity clause in subcontract, which provided for indemnification of general contractor for any damages caused in whole or in part by the negligence of general contractor, could be enforced by the trial court after the illegal portion of the provision, which required subcontractor to indemnify general contractor for its own negligence, was severed; indemnification of general contractor for actions that are the fault of subcontractor was allowed by statute that voided overbroad indemnity provisions in contracts.

30.140,

2 Cases that cite this headnote Damages of contract

Measure of damages for breach

The record failed to contain some evidence of both cost of repair damages and diminution in value damages, as necessary for a comparison to determine if an award of cost of repair damages would constitute economic waste, in breach of contract action filed by general contractor against subcontractor, and thus the trial court erred when it instructed the jury on economic waste as part of its instruction for the breach of contract claim.

4 Cases that cite this headnote [6]

Damages general

Mode of estimating damages in

When a contractor fails to keep an agreement, the measure of damages is always the sum which will put the injured party in as good a position as if the contract had been performed.

West's Or.Rev. Stat. Ann. §§

30.140(2).

7 Cases that cite this headnote

1 Case that cites this headnote [2]

[3]

Statutes Language and intent, will, purpose, or policy Statutes

Context

Statutes

Legislative History

Damages

Defects in performance

When interpreting a statute the Supreme Court begins by examining the statute's text and context and then look to legislative history if helpful to determine the legislature's intent.

Oregon courts use an alternative measure of damages for breach of contract involving construction defects, the diminution in the market value of the property, when the cost of repair is not the prudent remedy to apply because that remedy would create economic waste.

4 Cases that cite this headnote

4 Cases that cite this headnote

Statutes

Conflict

Where parts of a statute conflict, the Supreme Court attempts to harmonize them in a way that gives effect to both.

[4]

[7]

Contracts

Partial Illegality

When an agreement is partly legal and partly illegal, if the legal may be separated from the illegal, the legal part will be enforced.

[8]

Damages

Defects in performance

In the case of economic waste, damages will be measured not by the cost of remedying the defect, but by the difference between the value of the building as it is and what it would have been worth if it had been built in conformity with the contract, in other words, the diminution in value.

3 Cases that cite this headnote

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Montara Owners Ass'n v. La Noue Development, LLC, 357 Or. 333 (2015) 353 P.3d 563

[9]

Damages

as to cost of repair damages, and no evidence was presented as to diminution of value. West's Or.Rev. Stat. Ann. § 19.415(2).

Defects in performance

“Economic waste” occurs where the defect in material or construction is one that cannot be remedied without an expenditure for reconstruction disproportionate to the end to be attained, or without endangering unduly other parts of the building.

1 Case that cites this headnote [14]

Contracts

Homeowner association's claims against general contractor, and general contractor's third party claims against subcontractor, both generated attorney fees that arose within the same action, for the purpose of determining whether general contractor's attorney fees incurred in defending against association's claims arose prior to the pending third party action, and thus were not subject to the civil procedure rule governing the post-trial recovery of attorney fees. Rules Civ.Proc., Rules 22(C)(1), 67, 68.

1 Case that cites this headnote [10]

Costs, Fees, and Sanctions

Trial Construction and Effect of Charge as a Whole In determining whether it was error to give a particular jury instruction, the Court of Appeals reviews the instructions as a whole to determine whether they accurately state the law.

4 Cases that cite this headnote

3 Cases that cite this headnote [11]

Trial

Matters of law

A trial court errs if it gives a jury instruction that is at odds with a general rule of Oregon law or inconsistent with a specific application of that rule in prior Oregon case law.

[15]

[13]

Litigation with third persons

An instruction can be erroneous because there is no evidence in the record to support giving the instruction.

General contractor could seek from subcontractor, as consequential damages of subcontractor's breach of contract, attorney fees that general contractor incurred in defending against homeowner association's claim in firstparty construction defects case; a party may seek attorney fees under the third-party litigation exception to the American rule as to attorney fees, even if the party incurred those fees in the same action.

3 Cases that cite this headnote

13 Cases that cite this headnote

2 Cases that cite this headnote [12]

Damages

Trial

Facts and Evidence

Appeal and Error of recovery

Damages and amount

The trial court's error in instructing the jury on economic waste as part of the instructions for the breach of contract claim did not substantially affect general contractor's substantial rights, in breach of contract action filed by general contractor against subcontractor; the jury awarded damages in the amount of $43,711 to general contractor, the award was close to the $50,000 cost of repair damages estimate given by subcontractor's expert, general contractor's expert provided a higher estimate

[16]

Costs, Fees, and Sanctions contractual authorization

Statutory or

Generally, a party cannot recover attorney fees unless there is a statute or a contract that authorizes recovery of those fees.

5 Cases that cite this headnote

**565 On review from the Court of Appeals. *

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Montara Owners Ass'n v. La Noue Development, LLC, 357 Or. 333 (2015) 353 P.3d 563

Attorneys and Law Firms Thomas M. Christ, Cosgrave Vergeer Kester LLP, Portland, argued the cause and filed the briefs for petitioner Vasily A. Sharabarin. With him on the brief was Julie A. Smith.

Leta E. Gorman, Jordan Ramis PC, Lake Oswego, argued the cause and filed the brief for respondent La Noue Development, LLC. Opinion BALMER, C.J. *336 This construction defect case presents three issues on review, following certain rulings by the trial court and an award of damages by the jury. First, we consider the proper application of ORS 30.140, a statute that voids overbroad indemnity provisions in construction contracts.

The Court of Appeals held that the trial court had erred by invalidating an indemnity provision in its entirety when the provision was only partially void under

ORS 30.140.

Montara Owners Assn. v. La Noue Development, LLC, 259 Or.App. 657, 682–83, 317 P.3d 257 (2013). On that issue, we affirm the Court of Appeals and remand to the trial court.

Second, we consider whether it was error for the trial court to give an instruction on the economic waste doctrine in the absence of any evidence on the alternative measure of damages, diminution in value. The Court of Appeals found that it was error to give the instruction and that the error

construction defects in the building of the Montara townhomes, a complex of 35 separately owned units in multiple buildings. The defects included problems with the framing, siding, decking, and windows, resulting in water intrusion and water damage. La Noue, in turn, filed a third-party complaint against multiple subcontractors, including Vasily A. Sharabarin, dba Advanced Construction (Sharabarin), who *337 provided siding work on four buildings. Before trial, however, La Noue settled with the homeowners for $5 million—eliminating the first-party litigation from the case —and also reached settlements with most of the third-party subcontractors. La Noue did not settle with Sharabarin.

Because of various pretrial rulings, the only claims submitted to the jury were La Noue's breach of contract claims against Sharabarin and two other subcontractors. 1 Before trial, the trial court granted summary judgment in favor of Sharabarin on La Noue's claim for contractual indemnity, on the ground that the indemnification provision on which La Noue had relied was void under ORS 30.140. The trial court also held that the court—not the jury—would decide whether La Noue could recover the attorney fees that it had incurred in defending against the homeowners' claims as consequential damages for Sharabarin's breach of contract and that the court would resolve that issue after trial. In its post-trial ruling on the attorney fee issue, the court ultimately held that La Noue could not recover attorney fees as consequential damages in the case, even after trial, and denied La Noue's claim for those attorney fees.

this case could not recover such attorney fees.

Id. at 683, 317 P.3d 257. On the issue of the proper procedure to recover those fees, we agree with the Court of Appeals and the trial court. However, we reverse and remand to the trial court to consider the general contractor's substantive right to those fees.

La Noue tried its breach of contract claim to the jury.

La Noue generally contended that Sharabarin's work in siding the townhouses had deviated from the plans and specifications in the contract and had damaged the buildings that Sharabarin had worked on. Through an expert witness, La Noue presented evidence that it would cost just under $2 million to repair the damage caused by Sharabarin's breach.

In contrast, Sharabarin's expert witness testified that the cost to repair all of the damage caused by various subcontractors to the four buildings Sharabarin worked on would be only around $1 million. He further stated that only five percent of that $1 million repair cost involved areas where Sharabarin had performed work, and concluded that the resulting amount (about $50,000) represented the cost of repairing any damages caused by Sharabarin's breach.

The Montara Owners Association (homeowners) sued the developer and general contractor, La Noue Development, LLC (La Noue), for damages caused by design and

*338 The jury found that Sharabarin had breached his contract with La Noue and awarded $43,711 in total damages, significantly less than La Noue had sought. La Noue

was not harmless.

Id. at 669–70, 317 P.3d 257. As to that issue, we reverse the Court of Appeals, because we conclude that the instructional error was harmless. Third, we consider whether a third-party plaintiff can recover attorney fees as consequential damages for a third-party defendant's breach of contract when the attorney fees were incurred in the first-party **566 litigation in the same action. The Court of Appeals affirmed the trial court's ruling that the general contractor in

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appealed. The Court of Appeals reversed the summary judgment in favor of Sharabarin on the contractual indemnity claim, held that the trial court erred in giving one of Sharabarin's requested jury instructions and that the error was prejudicial, and affirmed the trial court's denial of La Noue's claim for attorney fees.

Montara, 259 Or.App. at 670, 317 P.3d 257. Sharabarin petitioned this court for review of the Court of Appeals' rulings on the jury instruction and contractual indemnity issues. La Noue opposed review but requested contingent review of the Court of Appeals' ruling on attorney fees and another aspect of the Court of Appeals' ruling on the jury instruction issue.

I. INDEMNITY UNDER ORS 30.140 [1] We first address whether the trial court erred in granting summary judgment **567 on the issue of contractual indemnification. “In reviewing a trial court's disposition of a motion for summary judgment, this court determines whether the moving party is entitled to judgment as a matter of law.”

PIH Beaverton, LLC v. Super One, Inc., 355 Or. 267, 275, 323 P.3d 961 (2014) (citing ORCP 47 C). The indemnity provision in the contract between La Noue and Sharabarin provided: “[Sharabarin] specifically and expressly agrees to indemnify and save harmless [La Noue], its officers, agents and employees, from and against any and all suits, claims, actions, losses, costs, penalties and damages, of whatsoever kind or nature, including attorneys' fees, arising out of, in connection with, or incident to [Sharabarin's] performance of th[e] subcontract, whether or not caused in part by [La Noue], [its] employees or agents, but excepting that caused by the sole negligence of [La Noue], [its] employees or agents.”

(Capitalization omitted.) In a pretrial ruling, the trial court granted Sharabarin's motion for summary judgment on the issue of contractual indemnity because “this case falls squarely within ORS 30.140 and its interpretation in *339 Walsh [Construction Co. v. Mutual of Enumclaw, 338 Or. 1, 104 P.3d 1146 (2005),]” and therefore, the court concluded, the indemnity clause was void.

ORS 30.140 provides: “(1) Except to the extent provided under subsection (2) of this section, any provision in a construction agreement that requires a person or that person's surety or insurer

to indemnify another against liability for damage arising out of death or bodily injury to persons or damage to property caused in whole or in part by the negligence of the indemnitee is void. “(2) This section does not affect any provision in a construction agreement that requires a person or that person's surety or insurer to indemnify another against liability for damage arising out of death or bodily injury to persons or damage to property to the extent that the death or bodily injury to persons or damage to property arises out of the fault of the indemnitor, or the fault of the indemnitor's agents, representatives or subcontractors.”

Because the contract at issue here provided for indemnification “whether or not caused in part by [La Noue] [and only] excepting that caused by the sole negligence of [La Noue],” the parties agree that it violates the prohibition on requiring indemnification “for damage * * * caused in whole or in part by the negligence of the indemnitee.”

ORS 30.140(1) (emphases added). The issue here is the effect of the exception in

ORS 30.140(2) on that prohibition. As

noted, the Court of Appeals agreed with La Noue that

ORS

30.140(2) sets out an exception to ORS 30.140(1) and that the indemnification provision here comes within that exception. Montara, 259 Or.App. at 682–83, 317 P.3d 257.

For that reason, it reversed the trial court.

On review, Sharabarin argues that ORS 30.140 sets forth two mutually exclusive categories of construction agreement indemnification provisions, one of which is enforceable and the other of which is void. Under his view, if an indemnification provision requires one person (the indemnitor, usually a subcontractor) to indemnify another (the indemnitee, usually a general contractor) 2 for damages *340 that arise in whole or in part out of the negligence of the general contractor, the provision is void in its entirety under subsection (1); in contrast, if an indemnification provision requires the subcontractor to indemnify the general contractor for only damages that arise out of the fault of the subcontractor, the provision is enforceable under subsection (2). Sharabarin argues that because the contract provision at issue here requires indemnity to a greater extent than allowed under subsection (2), it falls under subsection (1) and is void in its entirety. La Noue concedes that the provision in the subcontract with Sharabarin partially does what subsection (1) prohibits, but argues that the provision

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Montara Owners Ass'n v. La Noue Development, LLC, 357 Or. 333 (2015) 353 P.3d 563

remains enforceable to the extent allowed by subsection (2), because the legislature intended subsection (2) as an exception to subsection (1) and intended such provisions **568 to be partially enforceable. For the reasons set out below, we agree with La Noue that the provision is partially enforceable.

In arguing for a contrary understanding of the statute, Sharabarin urges this court to give weight to the legislature's choice of the words “any provision” in subsection (1).

Sharabarin argues that the legislature intended the part of the provision that is unenforceable under subsection (1) to void the entire indemnification provision—including the part that [2] [3] This issue presents a question of statutory otherwise would be enforceable under subsection (2)—and interpretation to be analyzed using the framework described that that legislative intent is evidenced by the language in subsection (1) making void “any provision” requiring what it in State v. Gaines, 346 Or. 160, 206 P.3d 1042 (2009). forbids. We disagree, however, that the statutory phrase “any We begin by examining the statute's text and context and provision” can be read so broadly. It is true that the contract then look to legislative history if helpful to determine the language at issue in this case is a “provision” requiring, in legislature's intent. State v. Klein, 352 Or. 302, 309, 283 P.3d part, what subsection (1) forbids. However, it does not follow 350 (2012). Where parts of a statute conflict, we attempt to that the entire provision—including the part permitted by harmonize them in a way that gives effect to both. Weldon v. subsection (2)—is void.

Bd. of Lic. Pro. Counselors & Therapists, 353 Or. 85, 91–92, 293 P.3d 1023 (2012) (citing State v. Guzek, 322 Or. 245, 266–68, 906 P.2d 272 (1995)).

ORS 30.140(1) declares that an indemnity provision of the kind that it describes is void “[e]xcept to the extent provided under subsection (2).” (Emphasis added.) That phrase lends support to La Noue's interpretation—that subsection (2) was intended to carve out an area of indemnification from the general rule voiding indemnification clauses in subsection (1). By including the phrase “[e]xcept to the extent provided under subsection (2)” in subsection (1), the legislature intended that the subsections would overlap rather than be mutually exclusive, as Sharabarin contends.

Sharabarin's interpretation, on the other hand, would make that phrase superfluous. “Except” in that context means *341 “with the exclusion or exception of” or “other than: BUT.” Webster's Third New Int'l Dictionary 791 (unabridged ed. 2002). “Extent” means “the range (as of inclusiveness or application) over which something extends: SCOPE * * * <the ~ of his authority> <the ~ of the law>” and “the limit to which something extends <exerting the full of his power>.” Webster's at 805. Thus, ORS 30.140(1) makes certain construction contract provisions void —provisions that require indemnification for damage “caused in whole or in part by the negligence of the indemnitee” general contractors—but excludes from being voided the part of the indemnification agreement that comes within subsection (2)—that is, where the liability “arises out of the fault of the indemnitor” subcontractor. Subsection (2) confirms the legislative intent that the statute “not affect” indemnification for damage which is “the fault of the indemnitor” subcontractor.

[4] The context for interpreting a statute's text includes the preexisting common law, and we presume that the legislature was aware of that existing law. Blachana, LLC v. Bureau of Labor and Industries, 354 Or. 676, 691, 318 P.3d 735 (2014). Under Oregon law, both today and at the time the legislature enacted ORS 30.140, when an “agreement is partly legal and partly illegal, if the legal may be separated from the illegal, the legal part will be enforced.”

Eldridge v. Johnston, 195 Or. 379, 405, 245 P.2d 239 (1952); see also *342 State v. McDonnell, 310 Or. 98, 116, 794 P.2d 780 (1990) (Fadeley, J., concurring in part and dissenting in part) (collecting cases supporting the proposition that “Oregon disregards the illegality and enforces the contract”).

In Eldridge, the defendant agreed as part of the sale of his interest in the plaintiff's meat business to not engage in the meat business in “the entire states of Oregon and Washington” for 10 years.

195 Or. at 400, 245 P.2d 239. This court—after assuming that the two-state exclusion was so broad as to be void because of the public policy against restraints on trade—held that a “reasonable **569 territorial area” in Oregon where the plaintiff actually conducted business could be severed from the two-state area and enforced against the defendant.

Id. at 409–10, 245 P.2d 239. In this case, as in Eldridge, the legal and illegal parts of the provision are intermingled. However, the illegal indemnification in this contract can be severed, and would be under Eldridge, allowing indemnification to the extent permitted by ORS 30.140(2). See Hays v.

Centennial Floors, Inc., 133 Or.App. 689, 695, 893 P.2d

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Montara Owners Ass'n v. La Noue Development, LLC, 357 Or. 333 (2015) 353 P.3d 563

564 (1995) (holding that “[former ] ORS 30.140(2) voids the clause to the extent that its application would require [the subcontractor] to indemnify [the general contractor] for its own sole negligence” (emphasis added)); accord Richardson v. Howard S. Wright Const. Co., No CV–05– 1419–ST, 2007 WL 1467411 at *5 (D.Or., May 18, 2007) (unpublished) (citing Hays for proposition that, if contract is broad enough to violate ORS 30.140(1), “it is only unenforceable in part”). We do not believe that, in adopting ORS 30.140, the legislature intended to create a different system where any imperfection in a contract provision would void the entire provision. Rather, we interpret ORS 30.140 to be consistent with Eldridge and Oregon case law providing for severance of the illegal part of a contract provision and enforcement of the remainder.

The legislative hearings on Senate Bill (SB) 788—the 1995 revision to ORS 30.140 in which the first and second subsections took their present form—further reveal that the legislature intended to address an issue of perceived unfairness in the construction business. See Walsh Construction Co., 338 Or. at 7–9, 104 P.3d 1146 (examining in detail the “evolution of ORS 30.140”); Gaines, 346 Or. at 172, 206 P.3d 1042 (court may consult legislative *343 history to confirm interpretation even where there does not appear to be an ambiguity in the statute's text). The prior version of the statute “spoke very clearly to [the situation of] sole negligence [of the general contractor], but it le[ft] quiet the question of concurrent negligence.” Tape Recording, Senate Judiciary Committee, SB 788, Apr. 3, 1995, Tape 83, Side A (statement of Steve Frey). Because of that ambiguity in the law, general contractors had developed a practice of requiring subcontractors to indemnify them on a take-it-orleave-it basis for everything except the sole negligence of the general contractor, essentially “shov[ing] the insurance liability down the line to the guy on the bottom, and if he wants the contract he must” accept the provision. Tape Recording, House Commerce Committee, SB 788, May 4, 1995, Tape 33, Side A (statement of Rep Larry Wells).

Little was said in the public hearings and work sessions on SB 788 about particular contract wording or provisions. Rather, the legislature appears to have been more concerned about the practical outcome of the contract provisions: essentially, that the “[sub]contractor [should] be responsible for the [sub]contractor's actions, and the [general contractor should]

be responsible for the [general contractor's actions].” Tape Recording, House Commerce Subcommittee on Business, SB 788, May 2, 1995, Tape 75, Side A (statement of Ruth Spetter). One subcontractor characterized the bill as “essentially * * * propos[ing] to” “edit out” language in subcontracts requiring that a subcontractor indemnify a general contractor for the general contractor's own negligence. Tape Recording, Senate Judiciary Committee, SB 788, Apr. 3, 1995, Tape 83, Side A (statement of Frank Morse). From that legislative history, we understand that, when the legislature used the phrase “to the extent” in ORS 30.140(1), it intended to refer to the extent of fault described by subsection (2). That is, the legislature intended that a subcontractor remain liable for the subcontractor's negligence even as subsection (1) protects the subcontractor from having to indemnity a general contractor for the general contractor's negligence.

Given the analysis above, we conclude that the trial court should have severed the unenforceable parts of the indemnity clause—the parts that violate *344 ORS 30.140(1)—but still allowed La Noue's claim to go forward to determine if, and to what extent, the “damage to property ar[ose] out of the fault of [Sharabarin], or the fault of [Sharabarin's] agents, representatives, or subcontractors” under ORS 30.140(2).

We agree with the Court of Appeals that the trial court erred in granting Sharabarin's motion for summary judgment on La Noue's indemnity claim under **570 ORS 30.140, and we remand that claim to the trial court for further proceedings on that claim. 3

II. JURY INSTRUCTIONS [5] We turn to La Noue's argument that it was reversible error for the trial court to instruct the jury on the economic waste doctrine as part of the instruction on damages for the breach of contract claim. The trial court described the economic waste doctrine for the jury in Instruction No. 26No. 26, which dealt with the appropriate measures of damages: “If one party breached the contract, then you must decide if the breach caused a loss and, if so, how much money should be paid.

“The mere fact that I am talking about money does not mean that you should or should not award any money.

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percent of the $1 million in total cost to repair the buildings that Sharabarin had worked on.

“The cost of replacement or repair so as to make the building conform to the plan is the correct measure of damages for defects in construction work unless that remedy generates undue economic waste. If you find that, except for technical, nonsubstantial, or immaterial departures by the defendants from the plans and specifications, the framing or siding work is satisfactory, and that an award to La Noue Development, L.L.C. for claimed repair costs would result in gross economic waste, the proper measure of damages is not the cost of repair but rather the difference in the value of Montara as built and what its value would be if it had been built according to the subcontracts.”

*345 That instruction identified the “cost of replacement or repair” as the “correct” measure of damages, but it also told the jury that there was an alternative measure of damages— the difference between the value of the project as built and its value if it were built according to the contract—that the jury could award if the repair cost resulted in “gross economic waste.”

The verdict form asked the jury to determine whether Sharabarin had breached his contract with La Noue, and, if so, what damages the breach had caused La Noue. As noted, the jury found that Sharabarin had breached his contract and awarded $43,711 in total damages, significantly less than the $2 million that La Noue had sought. On appeal, La Noue argued that, in giving Instruction No. 26No. 26, the trial court had erred by instructing the jury that—if it found economic waste—it could award damages based on the diminution in value of the project, rather than the cost of repair. La Noue asserts that the $43,711 represented the amount that the jury believed was the diminution in value caused by Sharabarin's breach, but that there was no evidence in the record of diminution in value. Sharabarin, on the other hand, claims that the $43,711 represented the cost of repair, and that evidence in the record supported that amount. As noted previously, Sharabarin's expert testified that Sharabarin's breach of contract, if proved, caused approximately five

Where, as in this case, a party alleges error in the jury instructions given by the trial court, this court asks three questions: whether the objection was preserved; whether the instruction was erroneous; and, if it was erroneous, whether the instruction substantially affected the party's rights under ORS 19.415(2).

Wallach v. Allstate Ins. Co., 344 Or. 314, 319–22, 180 P.3d 19 (2008). The Court of Appeals concluded that La Noue adequately preserved its objection to the jury instruction, Montara, 259 Or.App. at 664–65 n. 2, 317 P.3d 257, and we agree. We therefore examine the doctrine of economic waste to determine if Instruction No. 26No. 26 included an erroneous statement of that doctrine, either because the instruction misstated Oregon law or because the evidence was insufficient to support giving the instruction. **571 *346 A. The Economic Waste Doctrine in Oregon [6] When a “contractor fails to keep [an] agreement,” the measure of damages “is always the sum which will put [the injured party] in as good a position as if the contract had been performed.” Samuel Williston, 24 Williston on Contracts § 66.17, 461 (Richard A. Lord ed., 4th ed. 2002). In Oregon construction defect cases, that “sum” is the “amount of money equal to the cost of curing the defects, provided repair is the prudent remedy to apply.”

Turner v. Jackson, 139 Or. 539, 560, 11 P.2d 1048 (1932). That is the injured plaintiff usually “recovers such amount as he has reasonably expended, or will reasonably have to spend, to remedy the defect.” Schmauch v.

Johnston, 274 Or. 441, 446–47, 547 P.2d 119 (1976) (quoting Charles T. McCormick, Damages § 168, 648 (1935)). That “cost of repair” calculation is ordinarily the measure of damages in a construction defect case, as the instruction at issue here stated.

[7] [8] However, Oregon courts use an alternative measure of damages—the diminution in the market value of the property—when the cost of repair is not “the prudent remedy to apply” because that remedy would create “economic waste.” See Turner, 139 Or. at 560, 11 P.2d 1048. In the case of economic waste, “damages will be measured not by the cost of remedying the defect, but by the difference between the value of the building as it is and what it would have been worth if it had been built in conformity with the contract”—in other words, the diminution in value. 4 Schmauch, 274 Or. at 447, 547 P.2d 119.

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[9] Economic waste occurs where “the defect in material or construction is one that cannot be remedied without an expenditure for reconstruction disproportionate to the end to be attained, or without endangering unduly other parts of the building.” Id.; see also Restatement (Second) of Contracts § 348(2)(b) (1979) (courts award “the reasonable cost of completing performance or of remedying the defects if that cost is not clearly disproportionate to the probable loss in value to” the injured party). Stated differently, “[d]iminution in value is the proper measure of damages *347 only when the cost of repair is disproportionate to the diminution in value.”

Hanset v. General Construction Company, 285 Or.

101, 106, 589 P.2d 1117 (1979) (emphasis in original). 5 In Jacob & Youngs v. Kent, 230 N.Y. 239, 129 N.E. 889 (1921), a classic case on economic waste, the defendant contracted to build a home for the plaintiff according to a contract requiring the use of “Reading” brand pipe. After the house was complete, the plaintiff discovered that the defendant had instead used “Cohoes” pipe, an equally good brand.

Id. at 241, 129 N.E. at 890. To replace the Cohoes pipe with Reading pipe would have required tearing down walls at great expense. Id. The substitution of Cohoes pipe for Reading pipe did not affect the market price of the house, and therefore the proposed repair would not have increased the market price of the house. Judge Cardozo declared that the cost of repair was “grossly and unfairly out of proportion to the good to be attained,” namely “the difference in value, which [in that case] would be either nominal or nothing.”

Id. at 244, 129 N.E. at 891. Where the diminution in value was near zero, and the cost of repair was a “great expense,” the **572 court awarded only nominal damages. Id. The Jacob & Youngs decision accords with Oregon law.

107, 957 P.2d 147 (1998) ( “[W]e first inquire whether the requested jury instruction is a correct statement of the law.”).

An instruction can also be erroneous because there is no evidence in the record to support giving the instruction. That is because giving instructions not supported by the evidence permits the jury to speculate in rendering its verdict, rather than to base the verdict on the evidence and the applicable law. Dormaier v. Jesse et al., 230 Or. 194, 198, 369 P.2d 131 (1962); see also Purdy v. Deere & Co., 355 Or. 204, 227, 324 P.3d 455 (2014) (“[T]he parties in a civil action are entitled to jury instructions on their theory of the case if their requested instructions correctly state the law, are based on the current pleadings in the case, and are supported by evidence.” (Emphasis added.)); Sherrard v. Werline, 162 Or. 135, 157, 91 P.2d 344 (1939) (“The purpose of instructions is to state to the jury the principles of law governing the facts revealed to the jury by the evidence.”).

Neither party argues that Instruction No. 26No. 26 was erroneously given because it was incorrect as an abstract statement of law. 6 As discussed above, the instruction described the default measure of damages—cost of replacement or repair—and the circumstances in which an alternative measure of damages, diminution in value, would be appropriate, viz., when an award of the cost of repair would constitute “economic waste.”

La Noue, however, argues that it was error for the trial court to give the instruction because the economic waste doctrine does not apply to this type of case, where La Noue is not a homeowner suing a building contractor but rather a general contractor suing a subcontractor.

Contrary to La Noue's assertion, there is no requirement that the party injured by defective work be a homeowner.

See Turner, 139 Or. at 560, 11 P.2d 1048 (referring to B. The Trial Court Erred in Giving Instruction No. 26No. “the injured *349 party”); Williston, Williston on Contracts 26. § 66:17 at 476 (“[T]he principles [of the economic waste [10] [11] [12] “In determining whether it was error to give doctrine] are generally applicable to all kinds of contracts a particular jury instruction, this court reviews the instructions for a particular piece of work, such as, for example, where a as a whole to determine whether they accurately state the charter party is broken by the failure of the charterer to load the vessel.” (Footnotes omitted.)). One of the leading cases law.”

State v. Serrano, 355 Or. 172, 187, 324 P.3d 1274 on economic waste arose from the breach of a lease contract (2014). A trial court errs if it gives a jury instruction that is requiring a lessee to regrade a family farm at the conclusion “at odds with [a] general rule” of Oregon law or “inconsistent with [a] specific application of that rule” in prior Oregon of a mining lease term.

Peevyhouse v. Garland Coal & Min. Co., 1962 OK 267, ¶ 14, 382 P.2d 109, 114 (1962) case *348 law.

Wallach, 344 Or. at 319–20, 180 P.3d 19; (where the cost of regrading was $29,000 and the market see also Hernandez v. Barbo Machinery Co., 327 Or. 99, value was diminished only $300, court measured property

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owners' lost expectancy by the lesser amount). La Noue cites no authority that limits the application of Oregon's economic waste doctrine to cases where one party is a homeowner or landowner, and we see no principled reason to adopt that limitation.

La Noue argues in the alternative that, even if the economic waste doctrine applies to this type of case, Sharabarin failed to meet his “burden of proof” to show economic waste.

Sharabarin presents two arguments in response: First, the burden to show economic waste was not his and, alternatively, to the extent that he did have the burden of proof on economic waste, he met that burden. **573 Second, Sharabarin argues that once he made some showing of economic waste, the subsequent burden to prove damages—the amount of the diminution in value—shifted back to the party seeking damages (in this case, La Noue) because that party always has the burden of proof on damages. See North Pacific Lbr. v.

Moore, 275 Or. 359, 366, 551 P.2d 431 (1976) (plaintiff has burden to “establish the fact of damage and evidence from which a satisfactory conclusion as to the amount of damage can be reached”).

The parties' arguments over who bears the “burden of proof” on economic waste, however, do not address the relevant issue regarding the jury instruction in this case. Rather, the legal issue on review is whether there was “some evidence” in the record from which the jury could have reached a verdict that was consistent with the instruction. See State v. Brown, 306 Or. 599, 602, 761 P.2d 1300 (1988) (“In civil cases, the jury must be permitted to consider every claim on which the plaintiff has presented some evidence *350 tending to establish each element of that claim.” (Emphasis in original.)); Wootten v. Dillard, 286 Or. 129, 136, 592 P.2d 1021 (1979) (“We conclude that we are unconcerned with the quantum of evidence. Our concern is only with the existence of evidence which, if accepted as being true by the trier of fact, would establish [the fact in question].”); Plourd v.

Southern Pac. Transp. Co., 266 Or. 666, 670–71, 513 P.2d 1140 (1973) (because there was “some evidence” in the record relating to an issue, plaintiff was entitled to jury instruction on that issue). Regardless of which party ultimately bore the burden of production or proof on economic waste, if there was no evidence in the record to support that part of the instruction, the instruction was erroneous.

As discussed above, the proper determination of whether economic waste would result from an award of cost of repair

damages requires a comparison of the cost of repair and the diminution in value. Thus, it was error to give the part of the instruction that dealt with economic waste unless there was some evidence in the record of both measures of damage. Here, there was no evidence in the record regarding diminution in value. Sharabarin points only to evidence that some (but not all) of his breaches of contract were merely “technical” deviations from the plans and to evidence of the cost to build the townhouses. Neither party put on evidence of the value of the townhouses or of any reduction in value as a result of Sharabarin's breach of contract. And neither party sought to tie that breach to any particular reduction in value or in market price. At least some evidence of diminution in value was required to support an instruction that would have allowed the jury to base its verdict on that theory. Because there was no such evidence, the trial court erred in giving that part of the instruction.

C. The Erroneous Instruction Did Not Substantially Affect La Noue's Rights.

[13] When an appellate court concludes that a jury instruction was erroneously given, the next question is “whether the erroneous instruction substantially affected [the party's] rights” under ORS 19.415(2). 7 *351 Wallach, 344 Or. at 322, 180 P.3d 19. In applying that standard, an appellate court must “assess[ ] the extent to which an error skewed the odds against a legally correct result” and determine “whether—in an important or essential manner— the error had a detrimental influence on a party's rights.”

Purdy, 355 Or. at 226, 324 P.3d 455. Generally, “little likelihood is not enough, but more—that is ‘some’ or a ‘significant’ likelihood that the error influenced the result— will suffice for reversal.” Id.; see also id. at 235, 324 P.3d 455 (Balmer, C.J., concurring) (“[T]he bar for the appellant is somewhere above ‘possibly affected’ the result, but below ‘necessarily affected’ the result,” and how much likelihood is required “will depend on factual and legal issues in the case as determined from the trial court record.”).

As noted, it was error for the trial court to give Instruction No. 26No. 26 because that instruction **574 referred to both the usual measure of damages, as to which evidence had been introduced by both parties, and to an alternative measure of damages, as to which there was no evidence in the record.

ORS 19.415(2) places the burden to demonstrate prejudicial effect on whichever party loses in the trial court and then seeks reversal or modification of the judgment on appeal. Purdy,

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355 Or. at 225, 324 P.3d 455; Shoup v. Wal–Mart Stores, Inc., 335 Or. 164, 173–74, 61 P.3d 928 (2003).

Here, La Noue has not met its burden of showing that the instructional error substantially affected its rights.

Sharabarin's expert testified that the entire cost of repair for the buildings Sharabarin worked on would be $1 million, with only five percent of that amount attributable to Sharabarin. La Noue's expert testified that the cost of repair of the work done improperly by Sharabarin was slightly less than $2 million. If the jury believed Sharabarin's expert over La Noue's expert, it would have attributed $50,000 in damages to Sharabarin— five percent of the $1 million total. The jury awarded La Noue $43,711 in damages for breach of contract.

We presume, as we ordinarily do, that the jury followed the instructions.

Wallach, 344 Or. at 326, 180 P.3d 19. Here, *352 those included instructions that the jury base any award of damages “on the evidence” and that the jury not decide the case based on “guesswork, conjecture, or speculation.”

The instructions also told the jury that damages could be awarded in the amount of the cost of repair or, in certain circumstances, in the amount of diminution in value. Both parties introduced evidence on cost of repair, and the jury awarded an amount of damages ($43,711) that was close to the cost of repair as estimated by Sharabarin's expert ($50,000).

On the other hand, there was no evidence as to diminution in value. In these circumstances, we presume that the jury based its award on the cost of repair evidence. Assuming the jury followed the instructions, that was the only theory on which it could have based the verdict, because no evidence supported a verdict based on the alternative theory of diminution in value. See Shoup, 335 Or. at 178–79, 61 P.3d 928 (harmless error because defendant had “not identified anything in the record to demonstrate that the jury based its verdict on” the error); Jensen v. Medley, 336 Or. 222, 240, 82 P.3d 149 (2003) (where alternative basis could support jury's verdict, court asks “whether the record contains sufficient evidence to support liability on that alternative basis”). La Noue points to nothing in the record to suggest that the reference in the damage instruction to diminution in value as an alternative measure was likely to have had any effect on the jury's deliberations.

The Court of Appeals concluded that the instructional error was not harmless because “the jury instruction permitted the jury to speculate as to the loss in value of the buildings as a consequence of Sharabarin's breach of the contract.”

Montara, 259 Or.App. at 670, 317 P.3d 257. We disagree.

The assessment of harmless error under ORS 19.415(2) necessarily involves a contextual, record-based review that takes into account what evidence the jury had before it. An Oregon appellate court “must adhere to the limitation of ORS 19.415(2) and reverse or modify a judgment only if it can [determine] from the record that the error ‘substantially affect[ed] the rights of a party.’ ” Shoup, 335 Or. at 174, 61 P.3d 928 (emphasis added); see also Purdy, 355 Or. at 236, 324 P.3d 455 (Balmer, C.J., concurring) (“[W]e do not look at trial court errors in the abstract—rather, we examine those errors in the context *353 of the trial record as a whole, including * * * the evidence admitted and excluded[.]”).

The Court of Appeals concluded that the jury “speculate[d] as to the loss in value.”

Montara, 259 Or.App. at 670, 317 P.3d 257. La Noue's arguments do not persuade us, and we reach a different conclusion. As discussed, not only was there no evidence of “loss in value,” there was evidence—from both parties—of cost of repair. The jurors were cautioned not to speculate, and nothing in the record suggests that they did. On this issue, the jury apparently credited Sharabarin's expert and not La Noue's. The record points to the conclusion that the jury followed a permissible path from evidence in the record of cost of repair, through the instructions given, to its award of damages. **575 Cf. Jensen, 336 Or. at 240, 82 P.3d 149 (Where “the jury instructions gave the jury two possible grounds for imposing liability,” one based on an erroneous instruction and the other not, defendant “c[ould] not demonstrate that the verdict was based on the erroneous instruction * * *, rather than on the correct * * * instruction.”).

We cannot say that the error in this case “skewed the odds against a legally correct result” to such an extent that the trial court judgment should be disturbed. See Purdy, 355 Or. at 226, 324 P.3d 455; Shoup, 335 Or. at 173, 61 P.3d 928 (under ORS 19.415(2), an “error must cause something more than the ‘possibility’ of a different result” and is “not merely one that ‘might’ have changed the outcome of the case”). Because La Noue has not met its burden under ORS 19.415(2), we conclude that the instructional error was harmless.

III. ATTORNEY FEES In La Noue's third-party complaint against Sharabarin, La Noue sought the attorney fees that it had incurred defending the first-party claim by the homeowners against La Noue.

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La Noue argued that those attorney fees were recoverable as consequential damages of Sharabarin's breach of contract.

The trial court made two rulings on that issue, one before trial and one after trial. We address those rulings separately.

Before the trial began on La Noue's breach of contract claim against Sharabarin, there was a dispute over whether *354 La Noue could seek, as consequential damages, attorney fees that it had incurred defending against the homeowners' claims. Sharabarin argued that those fees could be recovered only under the procedure set out in ORCP 68, while La Noue asserted that the fee issue should be presented to the jury as part of its claim for damages caused by Sharabarin's breach of contract. Although we briefly discuss below the substantive basis for La Noue's claim, the narrow issue for decision here is the proper procedure for La Noue to assert that fee claim. We note that the usual ORCP 68 attorney fee claim is one in which a party that has prevailed in a proceeding against another party—and that has a contractual or statutory right to attorney fees as the prevailing party—files a claim for those fees. This case presents the unusual variant of a defendant that incurs attorney fees in an action brought by a plaintiff, files a thirdparty claim in the same action, and, as part of its damages claim against the third-party defendant, seeks recovery of those first-party fees. We are unaware of reported Oregon cases in this posture, although, as we discuss below, courts in other states have considered whether a third-party plaintiff can seek attorney fees against third-party defendants that the third-party plaintiff incurred in defending against first-party claims in the same action.

[14]

With that background, we turn to the dispute over

the application of ORCP 68. 8 The ORCP 68 procedure for *355 recovering attorney fees, with limited exceptions set out in the rule, “governs the pleading, proof, and award of attorney fees in all cases, regardless of the source of the right to recover such fees.” ORCP 68 C(1) (emphasis added).

The rule provides an exception when the fees “are claimed as damages arising prior to the action.” ORCP 68 C(1)(a) (emphasis added). **576 When ORCP 68 applies, the party seeking the fees must first allege the right to attorney fees in a pleading, motion, or response, and then file a detailed statement of the amount of attorney fees within 14 days after entry of judgment. ORCP 68 C. Thus, proof of attorney fees is ordinarily not part of the trial itself, but rather is presented in a post-trial proceeding, which may involve a court hearing without a jury. ORCP 68 C(3), (4)(e)(i).

La Noue argues that its claim for the fees that it incurred in defending against the homeowners' complaint is not subject to ORCP 68 procedure because it comes within the ORCP 68 C(1)(a) exception for fees “arising prior to the action.” In the trial court, La Noue argued that those fees arose prior to the trial on La Noue's claims against Sharabarin because La Noue had already settled the homeowners' claims before the trial of La Noue's third-party claims against Sharabarin and they were thus part of a “separate and distinct action.” La Noue sought to present evidence of those attorney fees to the jury as consequential damages from Sharabarin's breach of contract.

Sharabarin objected, arguing that ORCP 68 covers all claims for attorney fees in an action “regardless of the source of the right to recover those fees,” ORCP 68 C(1), and that La Noue's fee request was subject to the post-trial procedure of ORCP 68 C(4). Sharabarin asserted to that “this is all part of one action, * * * one caption, one case number” and “a separate action [is] required for attorney fees to be counted as damages in a case such as this.” At oral argument on that dispute, the trial court observed that Sharabarin's position would allow a party to claim the attorney fees in a subsequent action, but “another party who [seeks the fees in the same action] is precluded from those very same damages.” *356 Emphasis added.) Sharabarin responded that La Noue was “not precluded” and agreed that it “would be entitled to argue [those damages] at a later time,” presumably using the posttrial procedures of ORCP 68.

At that pretrial stage, the trial court was concerned that if it did not allow La Noue to present evidence of the attorney fees as consequential damages for Sharabarin's alleged breach of contract to the jury, then La Noue would be “precluded” from pursuing that component of its damages at all. But the trial court apparently accepted Sharabarin's acknowledgement that the ORCP 68 procedure would allow La Noue to seek those damages after trial and thus not “preclude” La Noue from recovering any damages to which it would otherwise be entitled. On that basis, the trial court held that La Noue could not present evidence to the jury of the attorney fees that it incurred defending against the homeowners' claims, but that La Noue could seek those attorney fees post-trial using the ORCP 68 procedure. 9 The Court of Appeals agreed with the trial court that whatever damages arose from the homeowners' claims against La Noue did not “aris[e] prior to the action,” ORCP 68 C(1)(a), because those claims and La Noue's thirdparty claims against Sharabarin were part of the same action.

Montara, 259 Or.App. at 683, 317 P.3d 257. On review, La Noue reprises its arguments below.

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La Noue's argument turns on whether its claim comes within the exception for fees and other expenses that “are claimed as damages arising prior to the action.” ORCP 68 C(1)(a).

Although the word “action” is not defined in the rules, rules other than ORCP 68 make it clear that first-party claims, such as the homeowners' claims against La Noue, and thirdparty claims, such as La Noue's against Sharabarin and other subcontractors, are part of the same “action.” ORCP 22 C(1), in discussing third-party practice, refers to both first- and third-party claims as part of “the *357 action.” Additionally, ORCP 67 B provides that, “[w]hen more than one claim for relief is presented in an action, whether as a claim, counterclaim, cross-claim, or third party claim, * * * the court **577 may render a limited judgment as to one or more but fewer than all of the claims or parties.” (Emphasis added.)

The conclusion that fees incurred in the same action are not fees “arising prior to the action” is consistent with the Council on Court Procedure's comment on ORCP 68. The comment notes that the rule was “designed to provide a procedure for claiming and proving attorney fees which are an incident of the action.” For that reason, the Council stated, “preexisting attorney fees which are actually claimed as damages are excluded.” Council on Court Procedures, Oregon Rules of Civil Procedure and Amendments, Rule 68 comment, at 22 (Dec. 13, 1980) (emphasis added). The comment thus emphasizes the distinction between fees that are “an incident of the action,” which are subject to ORCP 68, and “preexisting” fees—those that “existed” prior to the action—that are not.

We conclude that the first- and third-party claims in this case were part of the same “action” and, consequently, that ORCP 68 provided the procedure for seeking an award of those attorney fees. We acknowledge that the ORCP 68 procedure seems to have been adopted with an eye toward resolving a claim by a prevailing party against a nonprevailing party for attorney fees incurred in the litigation between those two parties. However, the text of the rule is sufficiently expansive to encompass claims for fees incurred in the same action, because they did not “arise prior to the action.” 10 We therefore affirm the trial court's pretrial decision not to send La Noue's claim for attorney *358 fees to the jury and to defer ruling on that claim until after trial. 11 [15]

The trial court's post-trial ruling denying La Noue's 12

claim for those attorney fees presents different issues.

After the jury trial, as part of a series of post-trial hearings, La Noue again requested as damages the attorney fees that

it had incurred in defending the first-party claims by the homeowners. The court's written ruling stated that the court denied La Noue's claim “because its attorney fees were incurred in the same action in which La Noue made thirdparty claims against the Subcontractors[, and t]he recovery of attorneys' fees as consequential damages in a breach of contract claim is predicated on those fees having been incurred in a prior separate action.” In its oral ruling, the court further stated: “As to whether or not there are consequential damages that will be allowed in terms of the attorney fees that were accrued or incurred, I find that this is a different situation from the situation in many prior cases which can hold attorney fees can be consequential damages.

“Unlike the situation in those cases, this is not a situation in which there was earlier or separate litigation with a third party. That is invariably the context in which this discussion occurs, rather than the context which has presented itself here in this case, which is the presence of a single case in which there was a settlement that was made with a number of the parties and in which litigation then continued against remaining parties. There was, therefore, no **578 prior litigation which resulted in attorney fees that might be recoverable as consequential damages, and I couldn't find any cases that would suggest that this is so.”

In those oral and written post-trial rulings, it appears that the trial court was referring to arguments made by the parties based on both ORCP 68 and *359 Huffstutter v. Lind, 250 Or. 295, 301, 442 P.2d 227 (1968), and we address both of those sources of law below. The Court of Appeals acknowledged that La Noue “might have” some “substantive entitlement” to the attorney fees incurred in defending against the homeowners' claims, but nonetheless affirmed the trial court because, in contrast to the situation in Huffstutter, there was “no prior litigation with a third party.”

Montara,

259 Or.App. at 683, 317 P.3d 257; see Huffstutter, 250 Or. at 301, 442 P.2d 227 (“[A]ttorney fees are generally allowable as damages in an action against a defendant where the defendant's tortious or wrongful conduct involved the plaintiff in prior litigation with a third party.” (Emphasis added.)).

The legal basis on which the trial court rejected La Noue's post-trial request for attorney fees was not clear. If the posttrial ruling was based on the trial court's conclusion that it could not consider the substance of La Noue's request under

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Montara Owners Ass'n v. La Noue Development, LLC, 357 Or. 333 (2015) 353 P.3d 563

ORCP 68, that ruling was erroneous. ORCP 68 was not intended to affect any substantive right of a party to attorney fees as consequential damages for a breach of contract. See ORCP 68 C(1) (distinguishing procedure for “the pleading, proof, and award of attorney fees” from “the source of the right to recover such fees”); Council on Court Procedures, Oregon Rules of Civil Procedure and Amendments, Rule 68 comment, at 21 (Dec. 13, 1980) (“[T]he rule simply provides a procedure for assessing such fees no matter what source is relied upon as providing the right to such fees.” (Emphasis added.)). Moreover, the trial court's pretrial ruling denying La Noue's request to put on evidence of attorney fees as part of its damages case against Sharabarin apparently was predicated in part on its view that La Noue would be able to seek those fees in a post-trial proceeding. As we have held, that ruling was correct. Insofar as the trial court's post-trial ruling denying the attorney fee claim relied upon the conclusion that the fees were not “claimed as damages arising prior to the action” under ORCP 68 C(1)(a), it was error. 13 [16] *360 We also conclude that the trial court and Court of Appeals read Huffstutter too narrowly when they concluded that it did not apply unless the attorney fees claimed were incurred in separate, earlier litigation. Under the so-called American rule regarding the award of attorney fees, “Generally, a party cannot recover attorney fees unless there is a statute or a contract that authorizes recovery of those fees.” Peace River Seed Co–Op, Ltd. v. Proseeds Marketing, Inc., 355 Or. 44, 65, 322 P.3d 531 (2014).

La Noue lacked any statutory or contractual basis for the recovery of any attorney fees. 14 Huffstutter, however, recognized a third-party litigation exception to the American rule in the circumstances when attorney fees are claimed as consequential damages. 15 **579 Huffstutter held that, although “[i]n the absence of contract, attorney fees are allowable only where there is statutory authority,” there is an exception to that rule, whereby “attorney fees are generally allowable as damages in an action against a defendant where the defendant's tortious or wrongful conduct involved the plaintiff in prior litigation with a third party.”

250 Or. at

301, 442 P.2d 227; see also OnePoint Solutions, LLC v.

Borchert, 486 F.3d 342, 352 (8th Cir.2007) (“[U]nder the third-party litigation exception to the American Rule * * * a court may award attorney fees as damages if the defendant's tortious act thrusts or projects the plaintiff into litigation with a third party.” (Internal quotation omitted.)).

*361 Although the court in Huffstutter referred to attorney fees incurred in “prior litigation” with a third party, it did so because of the procedural posture of that case. The gravamen of the case was not that the fees must have been incurred in a prior case, but rather that the American rule does not apply when a plaintiff seeks attorney fees as consequential damages on the theory that “the defendant's tortious or wrongful conduct” involved the plaintiff in litigation with a third party.

250 Or. at 301, 442 P.2d 227. That holding is consistent with other authorities cited inHuffstutter recognizing that such attorney fees can be claimed as damages, and we followed Huffstutter in Osborne v. Hay, 284 Or. 133, 585 P.2d 674 (1978). Both Huffstutter and Osborne discussed claims for attorney fees as consequential damages in tort cases, but the rule has also been applied in appropriate contract cases. When “a breach of contract results in claims by third persons against the injured party,” the breaching party is liable for the injured party's “reasonable expenditures in the litigation, if the party in breach had reason to foresee such expenditures as the probable result of his breach at the time he made the contract.” Restatement (Second) of Contracts § 351 comment c; see also Raymond v. Feldmann, 124 Or.App. 543, 546, 863 P.2d 1269 (1993) (collecting cases and treatises describing the third-party litigation exception).

Whether those damages arose in a separate, earlier case or in the same action in which a party seeks them will determine only the procedure for asserting a claim for those fees— either by presenting evidence at trial on the merits or by using the post-trial procedure established by ORCP 68—but it will not determine whether a party has any substantive right to those fees. Cases from other jurisdictions have acknowledged that, although ordinarily a plaintiff that asserts a claim for attorney fees as a component of damages for a defendant's wrongdoing will do so in a separate lawsuit from that in which the fees were incurred, nothing prevents those attorney fees from being claimed in the same action. See Prentice v.

North Am. Title Guar. Corp., Alameda Div., 59 Cal.2d 618, 621, 30 Cal.Rptr. 821, 381 P.2d 645 (1963) (“In the usual case, the attorney's fees will have been incurred in connection with a prior action; but there is no reason why recovery of such fees should be denied simply because the two causes *362 the one against the third person and the one against the party whose breach of duty made it necessary for the plaintiff to sue the third person) are tried in the same court at the same time.”); M.F. Roach Co. v. Town of Provincetown, 355 Mass. 731, 733, 247 N.E.2d 377, 378 (1969) (same).

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Nothing in our rules or case law suggests that a different result would obtain here. Indeed, one of the cases cited by Huffstutter involved a claim for fees that were incurred in the same action rather than a separate and earlier action.

250

Or. at 301, 442 P.2d 227 (citing Prentice, 59 Cal.2d at 621, 30 Cal.Rptr. 821, 381 P.2d 645). In the usual case, previously incurred attorney fees are sought in a separate action against the wrongdoer. In those cases, the ORCP 68 procedure for seeking attorney fees post-trial does not apply because of the exception in ORCP 68 C(1)(a) for fees and other expenses “arising prior to the action.” But if a party chooses **580 to seek those fees in the same action in which it incurred them— as La Noue has done here—it may do so, although the party will need to follow the ORCP 68 procedure.

The Court of Appeals affirmed the trial court and rejected La Noue's attorney fee claim because the fees did “not originate from prior litigation with a third party.”

Montara, 259 Or.App. at 683, 317 P.3d 257. For the reasons set out above, we disagree. Like the courts in Prentice and M.F. Roach, we conclude that a party may seek attorney fees under the thirdparty litigation exception, even if the party incurs those fees in the same action. Our holding is limited to reversing the lower court rulings that La Noue was precluded from seeking attorney fees as part of its damages, and we express no opinion as to the substantive merits of La Noue's claim. Because the trial court concluded that La Noue could not pursue its claim for attorney fees, the parties did not develop and the trial court did not rule on the legal and factual grounds for establishing,

Noue incurred in defending against the homeowners' claims in the first-party action. We remand to the trial court for further proceedings to determine whether La Noue meets the requirements to recover those fees and, if it does, to determine the appropriate amount of the fee award.

IV. CONCLUSION In summary, we hold that ORS 30.140 allows for partial invalidation of overbroad indemnity clauses in construction contracts. As to La Noue's claim for contractual indemnity, we therefore affirm the decision of the Court of Appeals, reverse the judgment of the circuit court, and remand the case to the circuit court for further proceedings. With respect to the instruction on damages, we reverse the decision of the Court of Appeals and affirm the trial court because, although we conclude that it was error for the trial court to instruct on diminution in value as a measure of damages when there was no evidence on diminution in value, that error was harmless.

Finally, we reverse the Court of Appeals decision on attorney fees. We affirm the trial court's pretrial ruling that the ORCP 68 procedure applies to La Noue's claim for attorney fees that it alleges as consequential damages for Sharabarin's breach of contract, but reverse the post-trial denial of that claim and remand for further proceedings.

The decision of the Court of Appeals is affirmed in part and reversed in part. The judgment of the circuit court *364 is affirmed in part and reversed in part, and the case is remanded to the circuit court for further proceedings.

or the potential limitations on, such a claim. 16 *363 We conclude that La Noue may use the ORCP 68 procedure to seek from Sharabarin, as consequential damages of Sharabarin's breach of contract, attorney fees that La

All Citations 357 Or. 333, 353 P.3d 563

Footnotes *

1

Appeal from Multnomah County Circuit Court, Hon. Jean K. Maurer, Judge. 259 Or.App. 657, 317 P.3d 257 (2013).

The other subcontractors settled with La Noue while the case was pending before the Court of Appeals, leaving Sharabarin as the only subcontractor remaining on appeal. Because of those settlements, we limit our discussion of the facts to Sharabarin's participation at trial.

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2

3

Although ORS 30.140 uses the terms “indemnitee” and “indemnitor,” we refer to the general contractor and the subcontractor, respectively, in this opinion where doing so lends clarity to our reasoning.

We do not address any potential overlap between La Noue's different claims or the damages that it may recover under those claims. It may be that the indemnification provision, as constrained by ORS 30.140, does not provide for La Noue to recover anything more than they have already been awarded by the jury for Sharabarin's breach of contract plus any attorney fees potentially recoverable for the reasons set out later in this opinion.

4

For clarity, we refer to that measure throughout this opinion as the “diminution in value,” although we note that it is the same amount that the market value of the building would be expected to increase if the repair were completed.

5

In Beik v. American Plaza Co., 280 Or. 547, 555–56, 572 P.2d 305 (1977), this court suggested that the disproportionality test for economic waste in Oregon is not necessarily limited to a comparison of cost of repair and diminution in value, and may involve consideration of other factors, such as purchase price, need for structural change, loss of habitability, and savings to the breaching party. See also Hanset, 285 Or. at 106–07, 589 P.2d 1117 (considering plaintiffs' intentions to live in, rather than sell, their home in determining appropriate measure of damages). Although this court has referred to those other factors, the parties have not asked us to resolve, and it is not necessary to resolve here, any uncertainty as to the proper formulation of the economic waste doctrine, because all of the variations involve some consideration of diminution in value. It is sufficient for the purposes of this case to consider the test for economic waste that compares cost of repair to diminution in value.

6

Because neither party raised the issue, we do not consider whether Instruction No. 26No. 26 was erroneous for failing to define the term “economic waste” or for failing to refer in any respect to the cost of repair as being “disproportionate.” See Schmauch, 274 Or. at 446, 547 P.2d 119; see also State v. McDonnell, 313 Or. 478, 497, 837 P.2d 941 (1992) (although “words of common usage need not be defined for the jury,” terms that are not of common usage and are not “understandable without elaboration” should be defined).

7

ORS 19.415(2) provides that “[n]o judgment shall be reversed or modified except for error substantially affecting the rights of a party.” See also Or. Const., Art. VII (Amended), § 3 (This court should affirm when “the judgment of the court appealed from was such as should have been rendered in the case * * * notwithstanding any error committed during the trial[.]”).

8

In relevant part, ORCP 68 provides: “C(1) Application of this section to award of attorney fees. * * * [T]his section governs the pleading, proof, and award of attorney fees in all cases, regardless of the source of the right to recover such fees, except when: “C(1)(a) Such items are claimed as damages arising prior to the action; “***** “C(3) Proof. The items of attorney fees and costs and disbursements shall be submitted in the manner provided by subsection (4) of this section, without proof being offered during the trial.

“C(4) Procedure for seeking attorney fees or costs and disbursements. The procedure for seeking attorney fees or costs and disbursements shall be as follows:

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“C(4)(a) * * * A party seeking attorney fees or costs and disbursements shall, not later than 14 days after entry of judgment * * * [f]ile with the court a signed and detailed statement of the amount of attorney fees or costs and disbursements[.] “*****

“C(4)(e)(i) If a hearing is requested the court, without a jury, shall hear and determine all issues of law and fact raised by the objection.”

(Emphases omitted.)

9

While the trial court's ruling was not entirely clear, that appears to be the intent of its pretrial ruling. The court ultimately declared that it was ruling “with the defense on this” and characterized the defense's position as being that this was “something that would be argued at the time of, perhaps, the attorney fee decision made by the court at the end of the case as opposed to an element of damage that goes to the jury.”

10

There is a potential dispute about the meaning of the word “arising” in ORCP 68 C(1)(a). “[A]rising prior to the action” could have at least two different meanings: that the fees had been partially incurred prior to the action, or that they had been fully incurred prior to the action. On the one hand, that phrase could include those attorney fees that are being incurred on an ongoing basis at the time the action begins, regardless of whether more attorney fees are yet to be incurred. Alternatively, “arising prior to the action” could mean that the prior proceeding that gave rise to the attorney fees had been concluded before the action in which the fees are sought is filed, so that the amount of the fees can be determined. Because the fee issue in this case comes up in the context of a single action, we do not address the issue of the potential meanings of “arising.”

11

The parties have not raised any argument that the trial court violated the Oregon Constitution when it concluded that La Noue could not submit that aspect of its damages case to the jury. 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[.]”).

12

As discussed further below, La Noue did not use the procedure set out in ORCP 68 to seek those fees.

13

We recognize that La Noue did not use the ORCP 68 procedure in its post-trial attorney fee request for the attorney fees incurred in defending the homeowners' claims. However, we agree with La Noue's assertion at oral argument before this court that seeking those attorney fees again in their ORCP 68 filing would have been futile, given the trial court's post-trial ruling denying La Noue's claim for those fees as consequential damages because they had been incurred in the same action.

14

The only reference to attorney fees in La Noue's contract with Sharabarin was in the contractual indemnification clause, which provided that “[i]n the event of litigation between [Sharabarin] and [La Noue] to enforce the rights under this subparagraph (o) [relating to indemnification], reasonable attorneys' fees shall be allowed to the prevailing party.” Because Sharabarin was the “prevailing party” on the issue of contractual indemnification, the only contractual basis available for recovering attorney fees, La Noue could not argue that the contract authorized recovery of these attorney fees. See ORS 20.077 (establishing process to determine prevailing party for purpose of attorney fee award). As discussed above, however, the trial court erred in deciding the contractual indemnification claim, and that claim will be the subject of further proceedings on remand.

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15

The third-party litigation exception to the American rule has been adopted by almost every jurisdiction in the United States. Robert Rossi, 1 Attorneys' Fees § 8:3, 9 (3d ed 2014) (identifying Arkansas and North Carolina as only states that have declined to adopt the doctrine). It might be more accurate to say that a claim for attorney fees as consequential damages for another party's wrongful conduct is simply a situation in which the American rule does not apply, rather than an “exception” to the rule.

16

Oregon has relatively little case law on the requirements that must be met for a party in La Noue's position to prevail on its attorney fee claim. One treatise summarizes the requirements as follows: “[The party seeking to recover attorneys' fees under this doctrine must establish:]

“(1) that the plaintiff had become involved in a legal dispute either because of a breach of contract by the defendant, or because of defendant's tortious conduct; that is, that the party sought to be charged with the fees was guilty of a wrongful or negligent act or breach of agreement; (2) that the litigation was with a third party, not with the defendant from whom the fees are sought to be recovered; (3) that the attorneys' fees were incurred in that third-party litigation; and (4) that the fees and expenses which were incurred were the natural and necessary consequences of the defendant's act, since remote, uncertain, and contingent consequences do not afford a basis for recovery; in other words, the attorneys' fees sought to be recovered must have been proximately and necessarily caused by the act complained of.”

Rossi, 1 Attorneys' Fees § 8:3 at 10–13.

End of Document

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18

2023 OADC ANNUAL CONVENTION CONTINUING LEGAL EDUCATION GUIDEBOOK

Lightning Round Is A Motion to Strike the Motion that’s Right? Why Judges Prefer Facts that will Get you to Admissible Evidence versus Supplying Admissible Evidence PRESENTED BY:

Michael Godfrey, SBH Legal

June 16, 2023 11:15am – 12:15pm

OADC Oregon Association of Defense Counsel

Michael Godfrey

Michael joined SBH Legal in 2017 and became a partner in 2023. He advises clients on mitigating risk and managing pre-litigation situations, but also represents his clients in all levels of litigation including administrative hearings, jury trials, and appellate litigation. His practice includes state and federal employment defense matters including workers’ compensation, wrongful termination, ADA, wage & hour, OSHA/WISHA claims, and all other employment-related discrimination claims.

Born and raised in Eastern Oregon, he is native to the Pacific Northwest. He and his wife, Taylor, live in Portland with their son, Jackson, and golden retriever, Watson.

PROFESSIONAL ACTIVITIES Oregon State Bar Association

Washington State Bar Association U.S. District Court for the District of Oregon United States Court of Appeals for the Ninth Circuit

EDUCATION

Willamette University College of Law, J.D. (2014) Eastern Oregon University, B.S. (2010)

Washington Self-Insurers Association Oregon Association of Defense Counsel

SOMETHING YOU MAY NOT KNOW ABOUT MICHAEL Favorite restaurant? Ringside Steakhouse.

Where did you honeymoon? South Africa (it was the best).

Hobbies? Golfing, Snowboarding, and spending time with his family.

PRACTICE GROUPS Employment Law Litigation Longshore OSHA Workers’ Compensation - Oregon Workers’ Compensation - Washington

2023 OADC Annual Convention – Lightning Round Topic: Is A Motion to Strike the Motion that’s Right? Why Judges Prefer Facts that will Get you to Admissible Evidence versus Supplying Admissible Evidence Presented by: Michael Godfrey, SBH Legal

When writing motions to amend, motions for summary judgment, or any other motion requiring facts supported by admissible evidence, is it proper to file a motion to strike when opposing counsel’s facts appear to rely on hearsay or are not yet established business records (and other admissibility issues)? Should courts spend time during the oral argument debating the admissibility of those facts, or should the admissibility be determined at trial and the facts at the motion just generally be admissible? Michael Godfrey explores the nuance between the two and proposes that a motion to strike may not be worth your time when defending a motion as the hearing is not the time that the Judge will determine admissibility but determine if sufficient facts exist that would be supported by admissible evidence.

This discussion will address the following: •

What is an affidavit? o ORS 45.020 states an affidavit is “a written declaration under oath, made without notice to the adverse party.”

•

What is the standard for a Motion for Summary Judgment? o ORCP 47(D) states “…supporting and opposing affidavits and declarations must be made on personal knowledge, must set forth facts as would be admissible evidence, and must show affirmatively that the affiant or declarant is competent to testify to the matters stated therein.”

•

What about a Motion to Amend? o Pleading punitive damages is ORS 31.725(3)(a): “The court shall deny a motion to amend a pleading made under the provisions of this section if: (a) the court determines that the affidavits and supporting documentation submitted by the party seeking punitive damages fail to set forth specific facts supported by admissible evidence adequate to avoid the granting of a motion for a directed verdict to the party opposing the motion on the issue of punitive damages in a trial of the matter…”

•

Important takeaway: o This does not allow for parties to use inadmissible evidence to support a motion, but simply means that the court may not weigh the admissibility of the evidence at the time of the hearing on the motion.

•

Opposing viewpoints: o Some practitioners swear by the Motion to Strike and will still push for a hearing on admissibility of a particular piece of evidence. Perman v. CH. Murphy/Clark-Ullman, Inc., 220 Or App 132, 138 (2008).

2023 OADC ANNUAL CONVENTION CONTINUING LEGAL EDUCATION GUIDEBOOK

Lightning Round Your Client’s Expert has Been Subpoenaed to Testify Against Them. Now What?

PRESENTED BY:

Jason P. Evans, Sussman Shank

June 16, 2023 11:15am – 12:15pm

OADC Oregon Association of Defense Counsel

Jason P. Evans

Jason Evans is an associate attorney who works closely with Sussman Shank’s litigation team on matters ranging from the defense of Class I railroads from actions arising under the FELA to the defense of individuals in all arrays of lawsuits brought against them. Whether his client is a multinational corporation or an individual who needs help navigating their defense, Jason’s goal is the same—to achieve the fair and equitable result.

Since Jason graduated from Lewis & Clark Law School in 2019, he has successfully defended matters ranging from those involving less than $10,000 in damages all the way up to multi-million-dollar injury actions that were resolved at trial in Federal Court. Jason has trained with some of the best defense-side attorneys in the State of Oregon, and it shows.

Jason’s approach to litigation combines his eye for what’s right with his understanding of how stressful the process can be, meaning that when a discussion of dollars and cents is on the table, so is the overall wellbeing of his client—big or small. He has been taught that there is more to the legal process than just a bottom line, something reflected in his case management strategy—and something his clients can appreciate even after their action has been resolved.

THE ADVANTAGE OF WORKING WITH JASON

Clients know that I will give things to them straight. When money, reputation, and often much more are on the line, there is no room to beat around the bush. If a matter needs to go to trial, I will tell you exactly why.

If a settlement is what’s right, I will make sure you know that too. Every case comes with different facts, but one thing is consistent among all: clients should know why the things that are happening are happening the way they are. I take care to keep my clients updated and informed.

EDUCATION

BA, The College of Wooster Communication Studies • German Studies minor JD, Lewis & Clark Law School

INDUSTRIES Railroad

PRACTICES Litigation

ADMISSIONS ORGANIZATIONS

• Professional Organizations • Member, Oregon Association of Defense Counsel • Member, Multnomah Bar Association • Member, American Inns of Court, Owen M. Panner Chapter

PERSONAL INTERESTS

Before law school and during seasonal breaks from college, I spent a good deal of time working in kitchens, where I learned I am actually quite fond of cooking—an interest I had plenty of time to develop during the time Portland (and most of its restaurants) was closed down in the early years of the pandemic—and which has persisted to this day. In the wintertime, I can also be found snowboarding, an interest that with family in both the Pacific Northwest and Colorado has proven to be an exciting, travel inducing pursuit.

Oregon State Bar United States District Court for the District of Oregon

PUBLICATIONS

Diversity and Inclusion: Practical Strategies for Productive Conversations and Meaningful Progress The Inevitable Approaches: Preparing for and Preventing Cyberattacks

SPEAKING ENGAGEMENTS

Your Client’s Expert has Been Subpoenaed to Testify Against Them.

Now What? , Oregon Association of Defense Counsel Annual Convention (2023)

2023 OADC Annual Convention – Lightning Round Topic: Your Client’s Expert has Been Subpoenaed to Testify Against Them. Now What?

Presented by: Jason Evans, Sussman Shank

Though it is certainly not common, Oregon practitioners in U.S. District Court may, in certain circumstances, find themselves faced with a trial subpoena from the opposing party for one of their own defense experts. If a defendant wishes to quash that subpoena, they will find that there are three approaches taken by federal courts. See House v.

Combined Ins. Co. of America, 168 F.R.D. 236 (N.D. Iowa 1996) (outlining generally each of the three approaches: “exceptional circumstances,” “balancing” / “discretionary,” and “entitlement”). They will also find that there is no controlling Ninth Circuit precedent on the question. This short presentation will outline those three tests and will highlight the District Courts’ current lean towards the “exceptional circumstances” test, which often will favor the quashing party’s position. *Briefing provided with client consent, redactions applied pursuant to client request.

House v. Combined Ins. Co. of America, 168 F.R.D. 236 (1996) 71 Fair Empl.Prac.Cas. (BNA) 764

[2] KeyCite Yellow Flag - Negative Treatment Declined to Follow by Miller ex rel. Monticello Banking Co. v. Marymount Medical Center, Ky., January 22, 2004

39 Cases that cite this headnote [3]

44 Cases that cite this headnote [4]

Disqualification of Expert

Federal Civil Procedure Identity and location of witnesses and others Parties should be encouraged to consult experts to formulate their own cases, to discard those experts for any reason, and to place them beyond reach of opposing party, if they have never indicated an intention to use expert at trial.

3 Cases that cite this headnote

Federal Civil Procedure Identity and location of witnesses and others Designation of expert as likely to testify at trial, even if that designation is subsequently withdrawn, removes question of whether opposing party should be able to dispose and call expert at trial from exceptional circumstances requirement of procedural rule providing party may discover facts known or opinions held by expert retained or specially employed by party in anticipation of litigation or preparation for trial and who is not expected to be called as witness at trial and, instead, designation of expert as likely to testify at trial invokes court's discretionary balancing of probative value versus prejudice to determine whether to allow opposing party access to expert once designation has been withdrawn. Fed.Rules Civ.Proc.Rule 26(b)(4)(A, B), 28 U.S.C.A.; Fed.Rules Evid.Rule 403, 28 U.S.C.A.

West Headnotes (5) Evidence

Persons Whose

Practical effect of designating expert as trial witness is to make expert available for deposition by opposing party. Fed.Rules Civ.Proc.Rule 26, 28 U.S.C.A.

Employer's motion in limine denied in part and granted in part.

[1]

Federal Civil Procedure Identity and location of witnesses and others Federal Civil Procedure Depositions May Be Taken

No. C 95–4032–MWB | July 31, 1996.

Synopsis In employee's sexual harassment lawsuit against employer, employer filed motion in limine seeking to prevent employee from calling expert witness, designated by employer as expected to be called at trial, but whom employer announced it would not call at trial. The District Court, Bennett, J., held that: (1) designation of expert as likely to testify at trial, even if that designation is subsequently withdrawn, invokes court's discretionary balancing of probative value versus prejudice to determine whether to allow opposing party access to expert once designation has been withdrawn, and (2) employer was entitled to depose expert witness and call him at trial.

Disqualification of Expert

Ability of opposing party to call expert witness, consulted but never designated as expected to testify at trial, depends upon showing of extraordinary circumstances. Fed.Rules Civ.Proc.Rule 26(b)(4)(A, B), 28 U.S.C.A.

168 F.R.D. 236 United States District Court, N.D. Iowa, Western Division.

Jody Renae HOUSE, Plaintiff, v.

COMBINED INSURANCE COMPANY OF AMERICA and Bola Olorundami, Defendants.

Evidence

81 Cases that cite this headnote [5]

Evidence associations

Former employment or

Federal Civil Procedure Identity and location of witnesses and others

© 2023 Thomson Reuters. No claim to original U.S. Government Works.

1

House v. Combined Ins. Co. of America, 168 F.R.D. 236 (1996) 71 Fair Empl.Prac.Cas. (BNA) 764

Federal Civil Procedure Depositions May Be Taken

Persons Whose

Employee, who brought sexual harassment action against employer, was entitled to depose and call at trial expert witness designated by employer as expected to be called at trial, but whom employer announced it would not call at trial; employee had interest in presenting expert witness because expert had relevant information probative of employee's alleged emotional distress, expert's evidence was not cumulative of that of employee's own expert and to avoid potential prejudice to employer, no party or witness would be able to refer to manner in which expert became involved in litigation beyond fact of his examination of employee.

27 Cases that cite this headnote

Attorneys and Law Firms *237 Margaret Prahl and Sabra Craig of Eidsmoe, Heidman, Redmond, Fredregill, Patterson, Schatz & Plaza, L.L.P., Sioux City, Iowa, for Plaintiff Jody House.

Christopher Harristhal and John Steffenhagen of Larkin, Hoffman, Daly & Lindgren, Ltd., Bloomington, Minnesota, for Defendant Combined Insurance.

Douglas Phillips of Klass, Hanks, Stoos, Stoik, Villone & Phillips, L.L.P., Sioux City, Iowa, for Defendant Bola Olorundami.

ORDER REGARDING TESTIMONY OF DR. TAYLOR BENNETT, District Judge.

TABLE OF CONTENTS I. INTRODUCTION AND BACKGROUND................................................................. 238 II. LEGAL ANALYSIS.................................................................................................. 240 A. Applicable Standards And Pertinent Circumstances...................................... 240 1.

The “exceptional circumstances” standard.................................................................................... 240

2.

“Balancing” or “discretionary” standards........................................................................................ 242

3.

The “entitlement” standard............................................................................................................ 244

B. The Proper Standard Here............................................................................. 245 1.

“Entitlement,” “balancing,” or “exceptional circumstances”?.......................................................... 245

2.

The balance here........................................................................................................................... 247

III. CONCLUSION........................................................................................................ 249 *238 One of several motions in limine filed by the parties in this sexual harassment lawsuit presents the vexing and surprisingly little explored question of whether one party should be able to depose or call at trial an expert designated by an opposing party as expected to be called at trial, but

whom the designating party has announced it will not call at trial. Despite the infrequency with which courts have apparently confronted this question, they have nonetheless postulated no less than three different standards for answering it. The defendant contends that the plaintiff should not be

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allowed to call a non-testifying defense expert, because no “exceptional circumstances” are presented. Plaintiff contends that defense counsel is attempting to suppress an expert witness previously designated to testify at trial, but whose testimony defendant has now learned will be favorable to plaintiff. Plaintiff therefore contends that she is entitled to present defendant's erstwhile expert, at a minimum, to lay a foundation for his report. Trial of this matter is scheduled to begin August 5, 1996. The court heard oral arguments on all of the motions in limine on July 25, 1996, but the present ruling concerns only the expert witness issue. 1

I. INTRODUCTION AND BACKGROUND The court's statement of the background for this ruling must perforce be brief. Plaintiff Jody House brought this lawsuit on April 18, 1995, asserting claims of quid pro quo sexual harassment, creation of a sexually hostile work environment, and retaliation for opposing unlawful employment practices pursuant to 42 U.S.C. § 2000e et seq. Defendants are her former employer, Combined Insurance Company of America, and her supervisor, and alleged harasser, Bola Olorundami.

The nature of House's factual allegations is not critical to the present ruling, although her assertion of a claim for damages for emotional distress is pertinent, because the present dispute involves whether House may depose prior to trial and may call as a witness at trial an expert originally designated by defendant Combined, Dr. Michael J. Taylor, who is a psychiatrist.

On March 15, 1996, House designated her expert witnesses pursuant to court order and Fed.R.Civ.P. 26(b)(4)(A). Her expert witness on House's emotional distress allegedly suffered as a result of defendants' conduct is a social worker, Jennifer Burrows. Combined contends that the initial designation of Ms. Burrows was so vague that Combined was unable to tell the nature of Ms. Burrows's testimony. 2 Therefore, Combined contends, in order to rebut whatever testimony Ms. Burrows might present, Combined designated Dr. Taylor as its expert on May 2, 1996.

Dr. Taylor first examined House on June 5, 1996, more than a month after he had been designated as an expert expected to testify at trial. House subsequently noticed Dr. Taylor's deposition and moved to compel production of Dr. Taylor's report on his examination of House. In response, Combined moved to quash the deposition of Dr. Taylor and

for a protective order precluding any discovery from Dr. Taylor on the ground that Combined had decided not to call Dr. Taylor as a witness at trial. Combined has never formally withdrawn its designation of Dr. Taylor as an expert expected to be called at trial. However, Dr. Taylor has been dropped from defendant's witness list in the final pretrial order filed July 19, 1996, and Combined has represented to the court, both in proceedings before Chief Magistrate Judge John A. Jarvey and the undersigned, that it has no intention of calling Dr. Taylor at trial. On July 2, 1996, Judge Jarvey ruled that, pursuant to Fed.R.Civ.P. 35(b), House was entitled to Dr. Taylor's report. However, the magistrate *239 judge concluded that, pursuant to Fed.R.Civ.P. 26(b)(4)(B), an expert employed in anticipation of litigation who is not expected to be called as a witness at trial can be deposed only upon a showing of exceptional circumstances under which it is impracticable for the party seeking discovery to obtain facts or opinions on the same subject matter by other means, and that no such exceptional circumstances had been shown. In reaching this conclusion, Judge Jarvey cited, inter alia, the undersigned's opinion in Brown v. Ringstad, 142 F.R.D. 461 (S.D.Iowa 1992).

In its motion in limine, filed on June 27, 1996, Combined again moved to bar House from calling Dr. Taylor at trial.

House resisted the exclusion of Dr. Taylor's testimony. The court held oral arguments on this and the other issues raised in the parties' motions in limine on July 25, 1996. The court found both the written and oral arguments on this difficult issue to be particularly well presented. At the oral arguments, plaintiff House was represented by counsel Margaret Prahl and Sabra Craig of Eidsmoe, Heidman, Redmond, Fredregill, Patterson, Schatz & Plaza, L.L.P., in Sioux City, Iowa.

Defendant Combined was represented by counsel Christopher Harristhal and John Steffenhagen of Larkin, Hoffman, Daly & Lindgren, Ltd., in Bloomington, Minnesota. Defendant Bola Olorundami was represented by counsel Douglas Phillips of Klass, Hanks, Stoos, Stoik, Villone & Phillips, L.L.P., in Sioux City, Iowa.

In the same motion in which it moved to preclude House from calling Dr. Taylor, Combined also moved to strike House's experts on the grounds of late and inadequate identification of the substance of their testimony. As to Dr. Taylor, Combined stated that, since House still has not provided adequate expert disclosures and Combined seeks exclusion of expert testimony as a sanction, Combined has indicated that it will not call Dr. Taylor as a witness. 3 Combined argues that allowing House to use Dr. Taylor as a witness would be

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anomalous if House's own experts are stricken. Combined also argued that the situation here is analogous to that addressed in Brown v. Ringstad, and that the rationale for precluding a party from calling an opposing party's nontestifying expert at trial is even stronger than the rationale for barring a party from deposing such a non-testifying expert.

At the oral arguments on the motions in limine, Combined further argued that other state cases supported its position, but that the federal cases cited by House in her brief in resistance to the motions in limine did not permit the full scope of trial testimony by one party's expert when called by the opposing party Combined fears House contemplates here.

Furthermore, Combined argued that Durflinger v. Artiles, 727 F.2d 888 (10th Cir.1984), stood for the proposition that only exceptional circumstances would permit a party to call an opposing party's expert witness at trial, and that no such exceptional circumstances had been shown here.

In House's written resistance to that part of the motion in limine seeking to prevent her from calling Dr. Taylor, House contended that she should be allowed to call Dr. Taylor to lay a foundation for his report. House argued that she was absolutely entitled to this report pursuant to Fed.R.Civ.P. 35(b) and

Salvatore v. American Cyanamid Co., 94 F.R.D.

156 (D.R.I.1982), and that the decisions in Fitzpatrick v. Holiday Inns, Inc., 507 F.Supp. 979 (E.D.Penn.1981), and Crowe v. Nivison, 145 F.R.D. 657 (D.Md.1993), established her right to call Dr. Taylor to lay a foundation for introduction of his report. At oral arguments, having now received a copy of Dr. Taylor's report pursuant to Judge Jarvey's order, House expanded her argument, asserting that Fitzpatrick and Crowe stand for the broader proposition that a party is entitled to call at trial an opposing party's expert who has conducted a medical examination of the party. House's counsel specifically alleged that Combined's purpose *240 in seeking to exclude testimony by Dr. Taylor was to suppress evidence favorable to House.

During the oral arguments, the court issued an oral ruling that House would be permitted to depose Dr. Taylor prior to trial, if she desired to take that step. However, the court reserved for a subsequent written ruling the question of whether House would be able to present Dr. Taylor's testimony, either live or by deposition, at the trial. The court now provides that written ruling.

II. LEGAL ANALYSIS Examination of the pertinent case law, of which there is surprisingly little, suggests that courts have applied three different standards to the question of whether a party should have access to and be able to use at trial an expert hired by the opposing party. Moving from least to most permissive, the first of those standards is an “exceptional circumstances” standard founded on Fed.R.Civ.P. 26(b)(4)(B). The second standard is articulated in the most recent of the decisions to discuss the question, Peterson v. Willie, 81 F.3d 1033 (11th Cir.1996), which despite their capable briefing and argument the parties did not discover, although, in some respects, it is more directly on point than any of the decisions cited by the parties. Peterson suggests a “discretionary” or “balancing” standard, involving a balancing of the interests of the party and the court against the potential for prejudice to the party who hired the expert, but who does not wish to use that expert at trial. The third, and most permissive standard, is based upon a few cases finding an “entitlement” to call an opposing party's expert under certain circumstances, despite the opposing party's desire not to have the expert testify.

The court finds that these differing standards arise in three different procedural postures and sets of circumstances. This court's somewhat daunting task is to identify the situations in which these standards have each been applied, whether the situations actually require different standards, and, finally, to determine what circumstances are present here and which standard should apply in these circumstances.

A. Applicable Standards And Pertinent Circumstances 1. The “exceptional circumstances” standard The “exceptional circumstances” standard, asserted here by Combined, finds its authority in Fed.R.Civ.P. 26(b)(4)(B), which provides as follows:

A party may, through interrogatories or by deposition, discover facts known or opinions held by an expert who has been retained or specially employed by another party in anticipation of litigation or preparation for trial and who is not expected to be called as a witness at trial, only as provided

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in Rule 35(b) or upon a showing of exceptional circumstances under which it is impracticable for the party seeking discovery to obtain facts or opinions on the same subject by other means.

Fed.R.Civ.P. 26(b)(4)(B) (emphasis added).

The circumstances under which discovery is obtainable from an expert consulted, but not expected to be called at trial, must be contrasted with the provisions of Rule 26(b)(4)(A), which provides for discovery from an expert who is expected to be presented at trial:

A party may depose any person who has been identified as an expert whose opinions may be presented at trial.

Fed.R.Civ.P. 26(b)(4)(A) (emphasis added). Although commentators and courts have generally recognized four classes of experts created by Rule 26, and the limits on discovery or trial testimony that may be elicited from experts in each of these classes, 4 this case *241 involves a fifth class of experts: Experts once designated as likely to testify at trial, but whose designation is subsequently withdrawn.

Combined asserts that this fifth class of experts should be treated like consulted-but-not-testifying experts. Discovery from such experts is generally precluded, except upon a showing of “exceptional circumstances.” Fed.R.Civ.P. 26(b) (4)(B). The rule on access to a consulted-but-not-testifying expert serves a number of interests, as identified by the United States District Court for the Southern District of New York in Rubel v. Eli Lilly & Co., 160 F.R.D. 458, 460 (S.D.N.Y.1995). The district court recognized four interests weighing against allowing an opposing party to depose or call at trial a consultative, non-testifying expert witness: (1) an “important interest in allowing counsel to obtain the expert advice they need in order properly to evaluate and present their clients' position without fear that every consultation with an expert may yield grist for the adversary's mill,” which the court found underlies Fed.R.Civ.P. 26(b)(4)(B)'s limitation on discovery of consultative, as opposed to testifying, experts; (2) unfairness of allowing an opposing party to benefit from a party's effort and expense incurred in preparing its case;

(3) fear of restraint on the willingness of experts to serve as consultants if their testimony could be compelled; and (4) the substantial risk of “explosive” prejudice stemming from the fact of the prior retention of an expert by the opposing party.

Rubel, 160 F.R.D. at 460; see also Rocky Mountain Natural Gas Co. v. Cooper Indus., Inc., 166 F.R.D. 481, 482 (D.Colo.1996) (“ ‘[Rule 26(b)(4)(B) ] is designed to promote fairness by precluding unreasonable access to an opposing party's diligent trial preparation,’ ” quoting

Durflinger v.

Artiles, 727 F.2d 888, 891 (10th Cir.1984)); In re Shell Oil Refinery, 132 F.R.D. 437, 440 (E.D.La.1990) (quoting the Advisory Committee Notes to Rule 26, which state that “[t]he procedure established in subsection (b)(4)(A) holds the risk [that one side will benefit unduly from the other side's better preparation] to a minimum. Discovery is limited to trial witnesses, and may be obtained only at a time when the parties know who their expert will be. A party must as a practical matter prepare his own case in advance of that time, for he can hardly hope to build his case out of his opponent's expertise,” with emphasis added by that court, which further noted that “Rule [26(b)(4)(B) ] is also designed to prevent a party from building his case on the diligent preparation of his adversary”).

In Durflinger v. Artiles, 727 F.2d 888 (10th Cir.1984), the Tenth Circuit Court of Appeals found these and similar interests protected by Rule 26(b)(4)(B) to be dispositive of the question of whether one party could call an expert originally designated by an opposing party, but as to whom the opposing party had subsequently withdrawn its designation of intention to use at trial.

Durflinger, 727 F.2d at 891. In Durflinger, the Tenth Circuit Court of Appeals held that the party who sought to present the expert's testimony at trial had “violated” Fed.R.Civ.P. 26(b)(4)(B), because it had hired the opposing party's expert, knowing he had been previously retained then dropped by that opposing party, but had not shown the court any “exceptional circumstances” for employing the expert. Id. The court found defendants' conduct objectionable, because the expert had formed *242 his opinion on the basis of information furnished to him by the plaintiffs, the expert had been paid for his services by the plaintiffs, and the defendants had an expert testifying on the same psychological principles and procedures and could probably have obtained others. Id. Another decision, that of the United States District Court for the Eastern District of Louisiana, In re Shell Oil Refinery, 132 F.R.D. 437 (E.D.La.1990), suggests that prior to the

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deadline for designation as an expert witness expected to be called at trial pursuant to Rule 26(b)(4)(A), a party may notify the opposing party that an expert will not be testifying, even if the party has previously disclosed expert witness reports of that expert. In re Shell Oil Refinery, 132 F.R.D. at 440. The court therefore barred an opposing party from attempting to obtain discovery from certain experts until and unless those experts were designated as expected to be called at trial. Id. Implicit in the decision in Durflinger, 727 F.2d at 891, is the assumption that whenever a party decides not to use at trial an expert it has consulted, the “not expected to be called as a witness” provisions of Rule 26(b)(4)(B) come into play. The decision in In re Shell Oil suggests that a party may change anticipated witnesses to non-witnesses up until the court-imposed deadline for exchange of witness lists, although the court in that case did not actually have before it a case in which a previous designation of an expert witness had been withdrawn at the time of the exchange of witness lists.

In re Shell Oil Refinery, 132 F.R.D. at 437. Instead, the decision in that case was rendered prior to the deadline for any party to designate any expert witnesses as expected to be called at trial.

Id. at 440. Other courts do not adhere to these assumptions, finding that there are situations in which the “exceptional circumstances” standard of Rule 26(b)(4)(B) is not applicable to a never-designated expert or one whose designation as likely to testify at trial has been withdrawn.

The decisions of these courts are discussed in the following sections.

2. “Balancing” or “discretionary” standards Other courts have identified circumstances in which they find that the “exceptional circumstances” standard of Rule 26(b)(4)(B) does not apply, even though a party now has a present intention not to use at trial an expert it had consulted, or even designated as likely to be used at trial under Rule 26(b)(4)(A). The most recent of such cases is Peterson v. Willie, 81 F.3d 1033 (11th Cir.1996). In Peterson, the Eleventh Circuit Court of Appeals considered a situation in which the plaintiff, through former counsel, had designated a psychiatrist as an expert witness expected to testify at trial pursuant to Fed.R.Civ.P. 26(b)(4)(A)(i).

Peterson, 81 F.3d at 1036. Defendants then noticed the deposition of the expert, to which the plaintiff offered no objection. Id. Shortly before the scheduled deposition, without the knowledge of plaintiff's counsel, the expert re-examined the plaintiff. Id.

At depositions, the expert testified that, as a result of his second examination, his opinion concerning the matters at issue had changed. Id. After the deposition, plaintiff's new counsel withdrew the designation of the expert as a trial expert and filed a motion in limine seeking to preclude the expert from testifying on behalf of the opposing parties. Id. The district court permitted the expert to testify concerning his opinion on the case and to testify that he had previously been retained by the plaintiff's former attorney. Id. at 1036–37. The Eleventh Circuit Court of Appeals therefore was required to address whether it was permissible for the expert, designated by one party, but not called by that party, to be called as an expert witness by the opposing party, as well as whether it was permissible for the jury to be informed that the expert had previously been retained by the other party. Id. at 1037.

In Peterson, the plaintiff argued that one of the opposing parties' reasons for calling the expert was to inform the jury that the expert had originally been hired by plaintiff's counsel, but had been withdrawn when counsel disagreed with his opinion, i.e., to suggest that “something was being hidden” from the *243 jury by the counsel who hired the expert. 5 Id. House has asserted as an argument for permitting her to offer Dr. Taylor's testimony the assertion that Combined is trying to hide Dr. Taylor's opinion from House and the jury.

However, the court in Peterson recognized the prejudice that results from informing the jury that an expert had originally been consulted by the opposing party. Id. (citing

Healy

v. Counts, 100 F.R.D. 493 (D.Colo.1984), and Granger v. Wisner, 134 Ariz. 377, 656 P.2d 1238, 1242 (1982)).

The Eleventh Circuit Court of Appeals quoted the following observation with approval:

Jurors unfamiliar with the role of counsel in adversary proceedings might well assume that plaintiff's counsel had suppressed evidence which he had an obligation to offer.

Such a reaction could destroy counsel's credibility in the eyes of the jury.

Id. (quoting Granger, 134 Ariz. 377, 656 P.2d at 1242).

The court cited other authorities describing as “explosive” the potential prejudicial effect of disclosing that the expert called

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by one party had originally been hired by an opposing party.

Id. (citing Rubel, 160 F.R.D. at 460, and 8 CHARLES A. WRIGHT, ARTHUR R. MILLER, AND RICHARD L. MARCUS, FEDERAL PRACTICE AND PROCEDURE: CIVIL § 2032, at 447 (1994)). The appellate court therefore concluded that the district court had erred in allowing disclosure of the fact that the expert testifying at trial had originally been hired by the opposing party. Id. at 1038. This court also recognizes the significant potential prejudice of informing the jury that the expert presently testifying for one party was originally designated, retained, or consulted by the opposing party.

However, the court in Peterson also recognized that courts had split on the more fundamental question of whether one party should be allowed to call an expert originally consulted by the opposing party. Id. at 1037 (citing

Granger, 656 P.2d

1238, and Sun Charm Ranch, Inc. v. City of Orlando, 407 So.2d 938 (Fla. 5th DCA 1981), as holding that a party may call an expert originally consulted by the opposing party, but must be prohibited from offering evidence that the witness had previously been consulted by the opposing party, and citing Rubel, 160 F.R.D. at 458, as refusing to permit the expert to testify at all absent a showing of need). The court also cited Broward County v. Cento, 611 So.2d 1339 (Fla. 4th DCA, 1993), as holding that a witness designated pursuant to Fed.R.Civ.P. 26(b)(4)(A)(i) as expected to be called at trial should be treated differently from one merely consulted by the opposing party.

Peterson, 81 F.3d at 1037. The Eleventh Circuit Court of Appeals found whether or not the expert had been designated as expected to be called at trial was not controlling in all respects. Id. However, the court found that “once a witness has been designated as expected to testify at trial, there may be situations when the witness should be permitted to testify for the opposing party.” Id. The court concluded that deciding whether such a situation exists “is committed to the sound discretion of the district court.” Id. at 1037–38 & n. 4. The Eleventh Circuit Court of Appeals recognized as error only the district court's conclusion that the jury could be told that the expert had originally been hired by the opposing party, not the conclusion that the expert could testify at trial for the plaintiff. Id. at 1038.

In a recent decision, the United States District Court for the Southern District of New York found that the “exceptional circumstances” standard of Fed.R.Civ.P. 26(b)(4)(B) was not controlling on the question of whether the testimony

of an expert who had been consulted by one party, never designated as an expert by that party, but *244 deposed by the opposing party without objection, should be excluded at trial. See Rubel v. Eli Lilly & Co., 160 F.R.D. 458, 460 (S.D.N.Y.1995). The court found that the interests in “free consultation” of a non-testify expert that Rule 26(b)(4)(B) was intended to protect were not in jeopardy, because of the original consulting party's failure to object to the opposing party's deposition of the expert. Id. In such circumstances, the court found that the fundamental consideration was not “exceptional circumstances,” but the interests of the party seeking access to the expert and the interests of the court in an informed resolution of the claims in the case, balanced against the possibility of prejudice arising from prior retention of the expert by the opposing party. Id. The court found that the party seeking to use the expert had little interest in presenting the testimony of the opposing party's erstwhile consultative expert, because that testimony would be cumulative of testimony from its own experts.

Id. However, the court found the possible prejudice to the opposing party, who had originally hired the expert, was great.

Id. First, it seemed likely that, even if not told, the jury would be able to determine from the lack of an explanation of how the expert came into the case that the expert had been hired by the opposing party, and, second, that there was little reason to require efforts to prevent the jury from knowing how the expert became involved when the party had available to it other experts never consulted by the opposing party.

Id. at 461. Expressly treating the question as governed by the balancing of interests required by Fed.R.Evid. 403, the court excluded the expert's testimony, not least because the party seeking to use the expert at trial had had ample time to obtain other expert testimony.

Id. at 462.

3. The “entitlement” standard Yet another group of courts apply yet another standard, at least in certain circumstances, to the question of whether a party should be allowed to call at trial an opposing party's expert. In Crowe v. Nivison, 145 F.R.D. 657 (D.Md.1993), the United States District Court for the District of Maryland held that submission to an examination by an expert “entitled” the examined party not just to a report of the examination pursuant to Fed.R.Civ.P. 35, but to a deposition of the expert for use at trial.

Crowe, 145 F.R.D. at 657. The court concluded that neither the provisions of Fed.R.Civ.P. 26(b) (4)(B) nor the work product doctrine barred such discovery

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of the expert's opinions and use of the expert's deposition at trial.

Id. at 657. The court specifically found unpersuasive the arguments of the party that had originally consulted the expert that the opposing party should only have access to the expert upon a showing of “exceptional circumstances.”

Id. The court found the case was not a typical Rule 26(b)(4) (B) or work product doctrine case, because of the opposing party's submission to an examination and entitlement to a report of that examination pursuant to Rule 35(b). Id. The court found that Rule 35 balances the privacy interests of the party examined with the interest of the party seeking the examination, the judicial system, and society as a whole in arriving at the truth of the matter, and “[i]n return for suffering an invasion of his person, the examined party is entitled to make use of such information as results from the examination.”

Id. at 658 (emphasis added).

Similarly, the United States District Court for the Eastern District of Pennsylvania concluded in Fitzpatrick v.

Holiday Inns, Inc., 507 F.Supp. 979 (E.D.Pa.1981), that the plaintiff should be able to call the defendant's expert who had examined the plaintiff pursuant to Fed.R.Civ.P. 35, even though the defendant subsequently decided not to use the expert and sought to prevent the plaintiff from using the expert or his report at trial.

Fitzpatrick, 507 F.Supp. at 979. The court found that fairness required allowing the plaintiff to call the expert as the only person who could establish the foundation for introducing the expert's report, but that further examination of the witness must be limited to the preparation of his report and the facts and opinions contained therein. Id. Fairness also required that the plaintiff pay the physician's expert witness fee if the plaintiff used the physician at trial. Id. The court therefore allowed a subpoena to issue on behalf of the plaintiff to compel the defendant's *245 erstwhile expert to appear at trial as plaintiff's witness. Id.

experts to formulate their own cases, to discard those experts for any reason, and to place them beyond the reach of an opposing party, if they have never indicated an intention to use the expert at trial. See, e.g., Rubel, 160 F.R.D. at 460–61 (identifying interests served by Rule 26(b)(4) (A) and (B)). Such a consulted-but-never-designated expert might properly be considered to fall under the work product doctrine that protects matters prepared in anticipation of litigation.

Durflinger, 727 F.2d at 891 (party should not have access to opposing party's diligent trial preparation, including experts consulted but not expected to be called at trial); Rocky Mountain Natural Gas Co., 166 F.R.D. 481, 482 (purpose of Rule 26(b)(4)(B) is to prevent a litigant from unfairly benefitting from an opposing party's work and preparation). For this reason also, the ability of an opposing party to call a never-designated expert at trial should depend upon a showing of “extraordinary circumstances.”

[3] [4] However, once an expert is designated, the expert is recognized as presenting part of the common body of discoverable, and generally admissible, information and testimony available to all parties. The practical effect of a Rule 26 designation of an expert is to make an expert available for deposition by the opposing party, see Ringstad, 142 F.R.D. at 465 (“If the expert is designated as a trial witness, the expert may be deposed by the opposing party.”); In re Shell Oil Refinery, 132 F.R.D. at 440 (designation pursuant to Rule 26(a)(4)(A), as contrasted with subsection (B), authorizes discovery only from designated experts and that discovery may not occur until designation of an expert as expected to be called at trial), and such a deposition preserves the testimony of the expert, should the expert later become unavailable, or provides a basis for impeachment, should the expert's opinion offered at trial differ. Thus, Rule 26 designation waives the “free consultation” privilege a

party enjoys as to its non-testifying experts. Cf. Rubel, 160 F.R.D. at 460 (“free consultation” privilege waived by permitting deposition of non-testifying expert). The court B. The Proper Standard Here therefore concludes that designation of an expert as expected 1. “Entitlement,” “balancing,” or “exceptional to be called at trial, pursuant to Fed.R.Civ.P. 26(b)(4)(A), circumstances”? even if that designation is subsequently withdrawn, takes the [1] [2] This court is persuaded that whether the witness opposing party's demand to depose and use the expert at has been designated as an expert expected to testify at trial trial out of the “exceptional circumstances” category of Rule pursuant to Fed.R.Civ.P. 26(b)(4)(A) is a very significant 26(b)(4)(B). Contra Durflinger, 727 F.2d at 891 (assuming difference from the situation in which an expert has merely expert as to whom designation is withdrawn should be treated been consulted by a party, but never designated as likely as stated in Rule 26(b)(4)(B)). 6 to testify at trial. Parties should be encouraged to consult

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*246 Furthermore, designation, and submission to a medical examination by the designated expert, create the kind of reliance on the availability of the expert that the court in Rubel found lacking where an expert had been consulted, but never designated. See Rubel, 160 F.R.D. at 462 (plaintiff could not be heard to argue that she relied upon the availability of defendant's undesignated expert, where neither plaintiff nor defendant ever designated the expert); see also Crowe, 145 F.R.D. at 658 (Rule 35 balances the privacy interests of the party examined with the interest of the party seeking the examination, the judicial system, and society as a whole in arriving at the truth of the matter, and “[i]n return for suffering an invasion of his person, the examined party is entitled to make use of such information as results from the examination”). However, the court does not find that either designation under Rule 26(b)(4)(A) or the examination of the opposing party by the expert under Rule 35 creates an “entitlement” of the opposing party to depose or use another party's expert at trial. Contra

Crowe, 145 F.R.D. at 657–

58; Fitzpatrick, 507 F.Supp. at 979. Rule 35 undeniably provides for invasion of the privacy of the examined party, and in subsection (b)(2), specifically provides for waiver of the examined party's privilege if that party requests a report from the examining expert. Fed.R.Civ.P. 35(b)(2). However, Rule 35 just as undeniably does not provide for deposition or use at trial of the examining expert by either party. Instead, Rule 35 provides only for the examined party's right to receive the expert's report. Fed.R.Civ.P. 35(b)(1) (“If requested by the party against whom an order is made under Rule 35(a) or the person examined, the party causing the examination to be made shall deliver to the requesting party a copy of the detailed written report of the examiner....”; emphasis added); Ringstad, 142 F.R.D. at 464 (Rule 35(b)(1) provides that an examined party is entitled to a copy of the examiner's report); Salvatore, 94 F.R.D. at 158 (examined party is entitled, upon request, to a report of an examining expert under Rule 35(b)(1)).

What, then, is the proper standard for House's access to and use at trial of Dr. Taylor, where both a Rule 26(b)(4)(A) designation has occurred, albeit a designation subsequently withdrawn, and a Rule 35 medical examination has occurred?

The court concludes that the proper standard in these circumstances is a “discretionary” standard, where the trial court's discretion is guided by a balancing of probative value against prejudice under Fed.R.Evid. 403. Accord

Peterson,

81 F.3d at 1036–38; Rubel, 160 F.R.D. at 460–61. 7 Such a standard takes into account the interests Rule 26 was designed to protect and those of the party who originally hired the expert, to the extent that party has not waived such an interest, Rubel, 160 F.R.D. at 460 (party who hired expert waived “free consultation” privilege by allowing deposition of the expert), as well as taking into account the peculiar prejudice that could arise if the jury is informed that an expert presented by one party was hired, then dropped, by the other party. See, e.g., Peterson, 81 F.3d at 1037 (discussing this prejudice). It also recognizes the court's interest in the proper resolution of issues, Rubel, 160 F.R.D. at 460 (identifying the court's interest as “an informed resolution of plaintiff's claim”); Crowe, 145 F.R.D. at 658 (identifying the court's interest and that of society as a whole as “arriving at the truth of the matter”), which is more objective than the plaintiff's interest in proving the truth of his or her claims, and the interests of the party seeking the testimony in presenting to the jury the results of an intrusive examination where those results are favorable to the party who suffered the invasion of privacy.

Crowe, 145 F.R.D. at 658 (examined party's interest after Rule 35 examination is presentation of results of the examination “[i]n return for suffering an invasion of his person”). *247 This conclusion is not contrary to the undersigned's prior opinion in Ringstad. Ringstad, 142 F.R.D. at 464– 65. In Ringstad, the undersigned concluded that, despite a Rule 35 examination of the plaintiff, Rule 26(b)(4)(B) barred the deposition of the opposing party's expert who was not expected to be called at trial. Id. Ringstad is therefore consistent with what the court recognizes here to be the general rule with regard to never-designated experts and the court's present determination that a Rule 35 examination does not create an “entitlement” to depose or use at trial an expert who has examined the plaintiff. Ringstad, however, did not involve the situation where an expert was designated, then withdrawn after a Rule 35 examination when his opinion was actually ascertained. However, in Ringstad, the undersigned observed that “[i]f the expert is designated as a trial witness, the expert may be deposed by the opposing party.” Id. at 465 (citing Fed.R.Civ.P. 26(b)(4)(A)). The undersigned also observed that the policy behind Rule 26's requirements for access to experts was “fairness,” id., which the court believes is best protected by the standard enunciated here as applicable in the unique circumstances of withdrawal of a prior designation. Thus, the court considers the situation

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House v. Combined Ins. Co. of America, 168 F.R.D. 236 (1996) 71 Fair Empl.Prac.Cas. (BNA) 764

here to be governed by balancing, in the court's discretion, probative value versus prejudice, as articulated in Fed.R.Evid.

403.

2. The balance here [5] Performing the required balancing of interests here, the court finds that House has a very significant interest in presenting to the jury the results of Dr. Taylor's examination.

However, the court is less convinced than was the court in Crowe, 145 F.R.D. at 658, that the plaintiff has an interest in presentation of evidence resulting from an “invasion of privacy” Dr. Taylor's examination may have occasioned. The court is instead convinced that the plaintiff has an interest in presenting Dr. Taylor as a witness, because he now has relevant information probative of plaintiff's alleged emotional distress, and that there is a difference between the nature of Dr. Taylor's psychiatric evaluation and House's own expert's methods, where House's own expert is a social worker, not a physician, such that Dr. Taylor's testimony is not merely cumulative of House's own expert's opinion. Cf. Rubel, 160 F.R.D. at 462 (court precluded use of the expert by an opposing party, because the evidence was cumulative of the opposing party's own experts, such that the prejudice to the other party was not outweighed). The interests weighing in favor of presentation of Dr. Taylor's evidence also include the court's interest in proper resolution of the issues before the court, Rubel, 160 F.R.D. at 460, and the fact that the designation of Dr. Taylor as an expert expected to be called at trial established the “reliance” missing in Rubel, because House was only asked to consent to an examination after Dr. Taylor had been designated, and that consent may have been based, at least in part, on the expectation that Dr. Taylor would testify at trial. The much more complicated side of the scales is the weight to be given the potential prejudice to Combined and any other interests Combined may have in precluding Dr. Taylor's testimony.

All too often, parties designate expert witnesses as likely to testify at trial to meet a court-imposed deadline, even though they have not actually hired the expert, but are only planning to, and even though the expert has not conducted any examination of the opposing party, if necessary to the expert's opinion, or even been provided with pertinent information from which the expert's opinion will be derived. The court's holding here will serve the salutary policy of requiring parties to give some thought and care to their expert witness designations, because once those designations are made, the

party will have to live with the consequence that the opposing party will likely be given the opportunity to depose the expert or even to call the expert at trial on their own behalf.

Furthermore, one purpose of Rule 26 is to prevent a party from piggybacking on another party's trial preparation. See, e.g., Rubel, 160 F.R.D. at 460. Thus, a party who waits to make a designation of an expert, or waits to discover the expert's opinion on the merits, because the opposing party hasn't yet designated its expert or experts, is attempting to piggyback its own discovery and trial preparation on *248 that of the opposing party, contrary to the purpose of Rule 26.

Such a party has not properly utilized an as yet undesignated expert to ascertain the merits of the case, nor taken advantage of the protection from discovery such expert advice on the merits of the case enjoys. See Rubel, 160 F.R.D. at 460 (use of an undesignated expert and the protection from discovery afforded an undesignated expert is to allow a party to make an evaluation of the merits of the case without fear of the opposing party looking over the party's shoulder). In this case, Combined has always known that emotional distress damages would be at issue in this case, from the complaint and Ms. Burrows's records concerning House supplied to Combined in 1995, but seemingly did not take the steps necessary to prepare to meet that claim. The court finds little interest in relieving a party of the consequences of an expert designation made simply to meet a court-ordered deadline, when Rule 26 provides every protection for finding and using an expert to prepare for trial prior to designation of the expert as expected to testify at trial.

However, the court sees a tremendous potential for prejudice to Combined simply in the revelation to the jury that Combined originally hired, designated, then dropped Dr. Taylor as an expert after his examination of the plaintiff once Dr. Taylor's opinions were actually known. Accord Peterson, 81 F.3d at 1036–37. Combined should not suffer the obvious prejudice disclosure of its prior contact with Dr. Taylor would likely have where that prejudice can be avoided.

The proper evidentiary issue remains Dr. Taylor's opinion, not how he became involved in the case, as only his opinion serves the plaintiff's proper interests in discovering the truth of the plaintiff's claims. Thus, House's argument to the court for access to Dr. Taylor based on assertions that Combined is improperly “hiding” information is an attempt to trade on the very prejudice this court concludes it must prevent.

The court concludes that it can indeed avoid or largely eliminate the potential prejudice of disclosure to the jury

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House v. Combined Ins. Co. of America, 168 F.R.D. 236 (1996) 71 Fair Empl.Prac.Cas. (BNA) 764

of Combined's prior contact with Dr. Taylor. Neither party nor Dr. Taylor himself will be allowed to refer to how Dr. Taylor became involved in the case. See at 1038;

Peterson, 81 F.3d

Fitzpatrick, 507 F.Supp. at 979. Contrary to the

concerns of the court in Rubel, 160 F.R.D. at 461 & n. 3, the court considers it unlikely that the jury will be concerned with how Dr. Taylor became involved in the litigation. House's own emotional distress expert, Ms. Burrows, is a “treating” professional, and the jury is likely to assume unless told otherwise, on the basis of Dr. Taylor's examination of House, that he too became involved in this case to treat or evaluate House. The court will allow House to call Dr. Taylor, so long as evidence of how he became involved in the case is excluded. The court's conclusion is in accord with the conclusions of the Eleventh Circuit Court of Appeals in Peterson, in which the appellate court concluded that the district court should not have allowed the expert to testify as to how he became involved in the case, but did not find error in the district court's decision to allow the expert to testify.

Peterson, 81 F.3d at 1038; see also Fitzpatrick, 507 F.Supp. at 979 (reaching a similar conclusion, by allowing testimony of the expert, but limited to the facts and opinions in his report). If House decides to call Dr. Taylor at trial, fairness dictates that House pay his expert witness fee.

507 F.Supp. at 979.

Fitzpatrick,

Because the court concludes that House is entitled to call Dr. Taylor as a witness at trial, under the circumstances presented here, and in light of a balance of the parties' interests against prejudice to Combined, the court will allow the pretrial deposition of Dr. Taylor by House in order to preserve his testimony for trial, 8 should he be unavailable at that time for any reason. 9

*249 III. CONCLUSION The court concludes that designation of an expert as likely to testify at trial, pursuant to Fed.R.Civ.P. 26(b)(4)(A), even if that designation is subsequently withdrawn, removes the question of whether an opposing party should be able to depose and call the expert at trial from the “exceptional circumstances” requirements of Fed.R.Civ.P. 26(b)(4)(B).

Instead, designation of the expert as likely to testify at trial invokes the court's discretionary balancing of probative value versus prejudice articulated in Fed.R.Evid. 403 to determine whether or not to allow the opposing party access to the expert once the designation has been withdrawn. After conducting such a balance of interests in this case, the court concludes that House may depose Dr. Taylor and call him at trial. However, in order to avoid the potential for prejudice to Combined if the jury is advised that Combined originally hired, then dropped, Dr. Taylor as an expert, no party or witness may refer to the manner in which Dr. Taylor became involved in this litigation beyond the fact of his examination of the plaintiff. Also, in the interests of fairness, if House calls Dr. Taylor, House will be required to pay his expert witness fee.

Combined's motion in limine concerning Dr. Taylor is denied to the extent that it seeks to preclude deposition and trial testimony of Dr. Taylor, but granted to the extent that no party may refer to the manner in which Dr. Taylor became involved in this litigation beyond the fact of his examination of the plaintiff. In order to preserve Dr. Taylor's testimony should he be unavailable at the time of trial, House may depose Dr. Taylor prior to trial, any prior order notwithstanding.

IT IS SO ORDERED. All Citations 168 F.R.D. 236, 71 Fair Empl.Prac.Cas. (BNA) 764

Footnotes 1

Other issues, though no less complicated than the present one, will not require as much last-minute pretrial preparation by the parties, whichever way they are resolved. Therefore, they will be addressed in a separate ruling, if necessary, after the parties complete a settlement conference scheduled for July 30, 1996.

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House v. Combined Ins. Co. of America, 168 F.R.D. 236 (1996) 71 Fair Empl.Prac.Cas. (BNA) 764

2

However, House's counsel contended that defendants had available to them from late in 1995 all of Ms. Burrows's records concerning House, so that her opinions and testimony were unlikely to surprise anyone.

3

The court finds this explanation of why Combined no longer wishes to call Dr. Taylor to be disingenuous at best. The court believes the more plausible explanation for why Combined no longer wishes to call Dr. Taylor is that suggested by Judge Jarvey: “Apparently, Dr. Taylor's opinions must not be favorable to the defendants' position because they do not want to produce a copy of Dr. Taylor's report and have stated that they will not call him as a witness at trial.” Order of July 2, 1996, p. 2.

4

For example, the Tenth Circuit Court of Appeals in Ager v. Jane C. Stormont Hosp. & Training Sch. for Nurses, 622 F.2d 496 (1980), adopted the four classifications of commentators Wright and Miller: (1) Experts a party expects to use at trial. The opponent may learn by interrogatories the names of these trial witnesses and the substance of their testimony but further discovery concerning them can be had only on motion and court order.

(2) Experts retained or specially employed in anticipation of litigation or preparation for trial but not expected to be used at trial. Except as provided in rule 35 for an examining physician, the facts and opinions of experts in this category can be discovered only on a showing of exceptional circumstances.

(3) Experts informally consulted in preparation for trial but not retained. No discovery may be had of the names or views of experts in this category.

(4) Experts whose information was not acquired in preparation for trial. This class, which includes both regular employees of a party not specially employed on the case and also experts who were actors or viewers of the occurrences that gave rise to the suit, is not included within Rule 26(b)(4) at all and facts and opinions they have are freely discoverable as with any ordinary witness. [Footnotes omitted].

Wright & Miller, Federal Practice and Procedure: Civil § 2029[.]

Ager, 622 F.2d at 500–01; see also Healy v. Counts, 100 F.R.D. 493, 495–96 (D.Colo.1984) (noting Wright and Miller's four categories of experts as articulated in Ager, but finding that its case involved only two of the categories, the second and third).

5

The other reason the plaintiff in Peterson asserted was that defendants had called plaintiff's formerly designated expert merely to buttress the testimony of their own expert, and therefore the evidence was cumulative.

Peterson, 81 F.3d at 1037. That issue has not been asserted directly here. However, the court notes that “cumulativeness” is less of a possible issue here, since House's own expert is a social worker, not a psychiatrist. Thus, House's own expert will not testify to the same psychological principles and procedures as Dr. Taylor. Cf. Durflinger, 727 F.2d at 891 (party's own experts would testify to the same psychological principles and procedures as the opposing party's expert, and therefore the party did not have a need to call the opposing expert, as his testimony would have been cumulative).

6

The present case is also distinguishable from Durflinger however, to the extent that the information upon which Dr. Taylor formed his opinion was not provided by Combined, but by House herself in the course of an examination. Cf. Rocky Mountain Natural Gas Co., 166 F.R.D. 481, –––– (the opposing party was not responsible for the information and opinions its consultative experts acquired regarding the case before being retained by that opposing party, and therefore the interests identified in Durflinger were not implicated).

Pursuant to Fed.R.Civ.P. 35(b)(1), House was entitled, at a minimum, to Dr. Taylor's report. The state court decisions cited by Combined are also, therefore, inapplicable, because none of those decisions considers

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House v. Combined Ins. Co. of America, 168 F.R.D. 236 (1996) 71 Fair Empl.Prac.Cas. (BNA) 764

whether different standards apply in a situation in which a party had originally designated a witness as likely to testify at trial, then withdrawn that designation, and only one of them also involves a medical examination of the party demanding access to the expert. See Young v. Strong, 118 A.D.2d 974, 499 N.Y.S.2d 988 (1986) (concluding a party may not call an opposing party's expert, but not considering the question of whether designation of an expert as likely to testify at trial would require application of a different standard, and further not involving an expert who had examined the plaintiff); Gugliano v. Levi, 24 A.D.2d 591, 262 N.Y.S.2d 372 (1965) (not considering the effect of designation of an expert as likely to be called at trial, although the case did involve a medical examination of the opposing party); Brink v. Multnomah County, 224 Or. 507, 356 P.2d 536 (1960) (expert was hired as an “adviser,” not as a testifying expert).

7

Indeed, the court believes that this standard should be applicable whenever a Rule 26(b)(4)(A) designation has occurred, but that the factor of a Rule 35 examination of the opposing party weighs particularly heavily in favor of the examined party's interests in all facts relevant to the examined party's claims coming to light.

See

Crowe, 145 F.R.D. at 658 (identifying these as the examined party's interests).

8

This conclusion is contrary to Judge Jarvey's ruling of July 2, 1996, but the court concludes that Judge Jarvey assumed that the “exceptional circumstances” standard was applicable here, and this court's conclusion is to the contrary.

9

Although it was not the only reason Dr. Taylor might be unavailable, the parties expressed some concern that Dr. Taylor might fall outside of the subpoena power of this court at the time of trial, because he resides in Des Moines, which is outside of this district and more than one hundred miles away. The court has not as yet been directly presented with the question of whether Dr. Taylor is subject to the court's subpoena power, nor with the question of whether Dr. Taylor is otherwise unavailable, and will, of course, await such a question, should it arise, before ruling on it. However, the court observes that Fed.R.Civ.P. 45 provides, inter alia, that a federal court may “borrow” the subpoena powers of state courts in the state in which it sits. Fed.R.Civ.P. 45(b)(2) (providing in part that “a subpoena may be served at any place within the district of the court by which it is issued, or at any place without the district that is within 100 miles of the place of the ... trial ... specified in the subpoena or at any place within the state where a state statute or rule of court permits service of a subpoena issued by a state court....”; emphasis added). The court also observes that Iowa Rule of Civil Procedure 147 provides that “oral depositions may be taken only in this state, or outside it at a place within one hundred miles from the nearest Iowa point ...,” Iowa R.Civ.P. 147(a), but that Rule 155 provides that if subpoenaed, “[n]o resident of Iowa shall be thus subpoenaed to attend out of the county where he resides, or is employed, or transacts his business in person.” Iowa R.Civ.P. 155(b).

End of Document

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13

Derek J. Ashton, OSB 871552 dashton@sussmanshank.com Jason P. Evans, OSB 193573 jevans@sussmanshank.com SUSSMAN SHANK LLP 1000 SW Broadway, Suite 1400 Portland, OR 97205-3089 Telephone: (503) 227-1111 Facsimile: (503) 248-0130 Attorneys for Defendants

UNITED STATES DISTRICT COURT DISTRICT OF OREGON PORTLAND DIVISION

, Plaintiffs, v.

DEFENDANTS’ MOTION TO QUASH PLAINTIFFS’ TRIAL SUBPOENA TO R. LEE FOSTER ORAL ARGUMENT REQUESTED Defendants.

CERTIFICATION Pursuant to LR 7-1(a), counsel for Defendants certify that the parties made a good faith effort via telephone conference on November 11, 2022, to resolve the following dispute and have been unable to do so.

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SUSSMAN SHANK LLP, ATTORNEYS AT LAW 1000 SW BROADWAY, SUITE 1400, PORTLAND, OREGON 97205-3089 TELEPHONE (503) 227-1111 | FACSIMILE (503) 248-0130

MOTION Pursuant to FRCP 45, Defendants

(collectively,

“Defendants”) respectfully request that this Court issue an order quashing Plaintiffs’ trial subpoena to Defendants’ potential witness, economics expert, R. Lee Foster. This motion is supported by the Court’s own record, the Declaration of Derek Ashton, and the Points and Authorities below.

POINTS AND AUTHORITIES A.

Background Defendants bring this Motion to Quash because Plaintiffs have served a trial subpoena on

Defendants retained economist, R. Lee Foster, and intend to present testimony from Mr. Foster in Plaintiffs’ case-in-chief. Plaintiffs are doing this in an attempt to cure their failure to disclose an economist pursuant to this Court’s Order.

On June 17, 2022, the date set for Simultaneous Exchange of Expert Disclosures, however, Plaintiffs did not disclose an economist while Defendants did. Declaration of Derek Ashton in Support of Defendants’ Motion to Quash Plaintiffs’ Trial Subpoena to Lee Foster (“Decl. Ashton”), ¶ 2 and ¶ 3; Exhibit 1, Plaintiffs’ Expert Witness Disclosure and Exhibit 2, Defendants’ Expert Disclosures. Thereafter, on June 27, 2022, the date set for Supplemental Expert Disclosures, Plaintiffs disclosed an economic loss expert, Eric Knowles, and subsequently produced his report. See id., ¶ 4; Exhibit 3, Plaintiffs’ Supplemental Expert Witness Disclosure, at 6 (supplemented expert information provided in bold type). Mr. Knowles’ report, on its face, makes clear that he is a rebuttal witness: Dear Mr. Mallove: You have requested a rebuttal report regarding the opinions of earnings capacity loss for alleged by defense expert Lee Foster, CPA, in his report authored on June 17, 2022.

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Id., ¶ 5; Exhibit 4, Knowles Report, dated June 27, 2022 (“Knowles Report”), at 1 (emphasis added).

Then, on October 24, 2022, pursuant to this Court’s Jury Trial Management Order (ECF No. 42), the parties submitted their Witness Lists and Witness Statements. Plaintiffs did not list Mr. Foster among their potential witnesses nor did they provide any witness statement for him.

See generally, Plaintiffs’ Witness List (ECF No. 48); Plaintiffs’ Witness Statements, at 1-6 (ECF No. 49). They did, however, list their new-found economics expert, Mr. Knowles, without indicating that he was, as noted, a rebuttal witness. And in their Witness Statement they said that Mr. Knowles would “testify consistent with his attached written report dated June 27, 2022, regarding the past and future income loss sustained by plaintiff

as a result of the

subject collision,” and that he was “also expected to testify in rebuttal to testimony offered by defendant’s economic expert, Lee Foster, CPA.” Plaintiffs’ Witness Statements, at 6 (ECF No. 49).

In their Motions in Limine, filed on October 31, 2022, Defendants seek to limit Mr. Knowles to rebuttal testimony only, because he was not disclosed by the date set for Simultaneous Exchange of Expert Disclosures and, in any event, because his report says he was retained by Plaintiffs to rebut “the opinions of earnings capacity loss for

alleged

by defense expert Lee Foster[.]” Decl. Ashton, ¶ 5; Exhibit 4, Knowles Report, at 1; see also Defendants’ Motions in Limine, at 9-12 (ECF No. 62). In response, Plaintiffs acknowledged their failure to disclose Mr. Knowles and his proposed testimony in their initial expert disclosure, but ask the court to blink that problem away and let Mr. Knowles testify anyway. Plaintiffs’ Memorandum RE Defendants’ Motions in Limine, at 7 (ECF No. 66).

The response also

informed Defendants that Plaintiffs’ counsel had issued (or was preparing to issue) a trial subpoena to Defendants’ expert, Lee Foster, in order to secure his attendance at trial for purposes

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of testifying for them in in their case-in-chief. For the reasons that follow, Plaintiffs’ trial subpoena to Mr. Foster must be quashed.

B.

Plaintiffs’ subpoena must be quashed because it is merely an attempt to circumvent requirements of the federal discovery process “‘[T]rial subpoenas are not intended as a backdoor for discovery that could have been

obtained before trial.’” Prewitt v. Mississippi State University, 2012 WL 13005949, *1 (E.D. Miss. Aug. 10, 2012) (quoting IQ Prods. Co. v. Onyx Corp., 48 Fed.Appx. 107, *4 (5th Cir. Aug. 23, 2002)) (additional citation omitted). If a trial subpoena has “circumvented the discovery process,” the Court operates well within its discretion in quashing it. See Progressive Emu Inc. v. Nutrition & Fitness Inc., 785 Fed.Appx. 622, 629-30 (11th Cir. 2019) (affirming district court’s quashal of trial subpoena and award of attorney fees to defending party where the subpoena at issue subjected its target to undue burden and expense, thereby “violat[ing] Rule 45 and circumvent[ing] the discovery process”).

Here, Plaintiffs’ trial subpoena is a clear attempt to circumvent the discovery process and obtain expert testimony (discovery) in their case-in-chief that could easily have been obtained before trial. Indeed, the expert testimony Plaintiffs seek to present in their case-in-chief by way of Defendants’ economic expert is the same sort of evidence (economics, wage loss, etc.) that Plaintiffs’ economics expert, Eric Knowles, could have presented had he been timely retained to do so and properly disclosed as ordered.

1.

Plaintiffs’ attempt to circumvent the discovery process and privileges

Plaintiffs’ trial subpoena to Mr. Foster is an attempt to circumvent the limitations on expert discovery in federal court and should therefore be quashed. Rule 26(b)(4) “remains a limitation on the right of access by an opposing party to the evidence of experts who have been retained to testify in the case, and that the discovery of the facts and opinions of those experts cannot [be] obtain[ed] solely under Rule 45 where, as here, a bare subpoena duces tecum has Page 4 - DEFENDANTS’ MOTION TO QUASH PLAINTIFFS’ TRIAL SUBPOENA TO R. LEE FOSTER

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issued for the experts’ files.” Marsh v. Jackson, 141 F.R.D. 431, 432 (W.D. Va. Feb. 27, 1992) (emphasis added). Advisory committee notes to Rule 45 explain that FRCP 45(c)(3)(B)(ii) “provides appropriate protection for the intellectual property of the non-party witness [and] does not apply to the expert retained by a party, whose information is subject to the provisions of Rule 26(b)(4).” Rule 45, 1991 Amendment, Subsection (c) advisory committee notes (emphasis added).

As indicated, Rule 26(b)(4) and, concurrently, Rule 30, traditionally have been seen as limitations on the methods by which information may be discovered from experts retained by a party. None of the methods of discovery allowed under Rules 26(b)(4) and 30 permit the use of bare Rule 45 subpoenas duces tecum.

Instead, they operate as a control, or brake if you will, on the potential runaway use of the subpoena duces tecum to compel the production of the evidence of experts retained by a party to testify at trial.

Marsh, 141 F.R.D. at 433.

The “brake” effect Rule 26 has upon the use of Rule 45 subpoenas finds ample support in prior case law. See, e.g., Spencer v. Greenwald, 2022 WL 2180052, *3 (D. Idaho Jun. 15, 2022) (reiterating that “‘Rule 26(b)(4) remains a limitation on the right of access by an opposing party to the evidence of experts who have been retained to testify in the case ... the discovery of the facts and opinions of those experts cannot obtain solely under Rule 45.’” (quoting Marsh, 141 F.R.D. at 431)); see also, Winchester Surplus Lines Insurance Company v. Interstate Underground Warehouse & Storage, Inc., 2017 WL 2313288, at *2 (W.D. Mo. May 18, 2017) (“Rules 26 and 30 operate as a control, or brake if you will, on the potential runaway use of the subpoena duces tecum to compel the production of the evidence of experts retained by a party to testify at trial.” (citing Marsh, 141 F.R.D. at 433)); Though Plaintiffs’ subpoena at issue here is for trial testimony as opposed to the pretrial production of documents, the same principles apply because ultimately, it is information and evidence (testimony) that Plaintiffs could have obtained well prior to today’s date, and indeed should have obtained—as evidenced by their late retention—of an economics (rebuttal) expert of Page 5 - DEFENDANTS’ MOTION TO QUASH PLAINTIFFS’ TRIAL SUBPOENA TO R. LEE FOSTER

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their own. Thus, Plaintiffs’ subpoena, if permitted to stand, would not only circumvent the federal discovery process, it would obviate it.

Finally, to permit Plaintiffs to call a defense expert for direct examination in their casein-chief would substantially undermine—if not completely dissolve—principles of privilege and doctrinal protections afforded even to retained, testifying experts. For example, under FRCP 26(b)(4)(C), an expert’s trial-preparation communications with the retaining party’s attorney are strictly protected “regardless of the form of the communications” unless the communications fall into three narrow categories, all of which relate to the expert’s opinions and compensation.

Placing Mr. Foster on the stand for direct examination by Plaintiffs, not cross-examination by them, will surely risk disclosure of privileged information.

2.

Plaintiffs’ misuse of trial subpoena

Plaintiffs’ trial subpoena is not aimed at ensuring the attendance of their economic expert (Mr. Knowles) at trial, or even ensuring that Defendants’ expert (Mr. Foster) will remain at trial for cross-examination in the event he is called by Defendants. Rather, it is aimed at presenting expert testimony in their case-in-chief in the event they are prevented from presenting any because of the failure to disclose their own expert on time.

In this case, the parties could—and indeed did—retain an economic expert of their choosing and in whatever manner they felt was best-suited to the needs of their case and ultimately, their trial strategy. Plaintiffs were free to depose Mr. Foster. They did not. Instead, they hired an economic expert of their own, but only to rebut Mr. Foster’s opinions and conclusions. The only difference between the two economic experts is that one—Lee Foster— was timely and properly retained and disclosed to testify in Defendants’ case-in-chief, while the other—Eric Knowles—was retained specifically to rebut Mr. Foster’s conclusions and was not timely or properly retained and disclosed to testify in Plaintiffs’ case-in-chief.

Where a party has failed to timely designate an expert witness in accordance with a Page 6 - DEFENDANTS’ MOTION TO QUASH PLAINTIFFS’ TRIAL SUBPOENA TO R. LEE FOSTER

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Court’s pretrial order, it is proper to exclude those experts—in line with the relief Defendants seek in their fourth and fifth motions in limine. See Geiserman v. MacDonald, 893 F.2d 787, 790-92 (5th Cir. 1990) (upholding decision to exclude expert witnesses based on party’s failure to designate experts until two weeks after the expiration of the discovery deadline because explanations for delay were “weak, at best”). Plaintiffs, apparently now aware of their error, and in an attempt to remedy their mistake, seek to call a defense expert in their case-in-chief.

Put simply, Plaintiffs are attempting to leverage a trial subpoena not to gain testimony and information that they could not otherwise have obtained since this action was commenced over eighteen months ago in April 2021, but rather, to remedy their chosen trial strategy. That is not the purpose of a trial subpoena, and this Court should not allow it. Defendants’ motion to quash must be granted.

C.

Plaintiffs’ trial subpoena should be quashed because it is merely an avenue to obtain relief from a situation caused by carelessness Here, Plaintiffs had ample opportunity to hire an economic expert ahead of the June 17,

2022 simultaneous disclosure deadline. The instant matter was commenced in Multnomah County State Court in April 2021 and was removed shortly thereafter, on or around April 28, 2021. So, as of May 2021—almost one full year before expert disclosures and reports were exchanged, Plaintiffs knew they would be required to disclose their retained, testifying experts on a date certain. They failed to do so, and even their own expert’s reporting makes his role perfectly clear: You have requested a rebuttal report regarding the opinions of earnings capacity loss for alleged by defense expert Lee Foster, CPA, in his report authored on June 17, 2022.

Decl. Ashton, ¶ 5; Exhibit 4, Knowles Report, at 1 (emphasis added). The remainder of Mr. Knowles’ report is comprised of two bullet pointed sections, each of which directly addresses and rebuts conclusions and opinions reached by Mr. Foster. See generally, id.

Page 7 - DEFENDANTS’ MOTION TO QUASH PLAINTIFFS’ TRIAL SUBPOENA TO R. LEE FOSTER

SUSSMAN SHANK LLP, ATTORNEYS AT LAW 1000 SW BROADWAY, SUITE 1400, PORTLAND, OREGON 97205-3089 TELEPHONE (503) 227-1111 | FACSIMILE (503) 248-0130

We must assume Plaintiffs failure to disclose an economist was their chosen trial strategy. However, whether it was or not, there is no question that due diligence and simple planning could easily have avoided the present scenario by timely retaining and properly disclosing Mr. Knowles so that he could testify in their case-in-chief, as opposed to attempting to compel by subpoena the testimony of Defendants’ retained expert. In the context of failure to comply with the dates provided in a Court’s pretrial order, “[i]f a party was not diligent, the inquiry should end.” See Johnson v. Mammoth Recreations, Inc., 975 F.2d 604, 609 (9th Cir. 1992); Geiserman, 893 F.2d at 790-92 (5th Cir. 1990) (upholding decision to exclude expert witnesses based on party’s failure to designate experts until two weeks after the expiration of the discovery deadline). This Court should not now allow Plaintiffs reverse their chosen trial strategy or to correct an inexcusable error—an error which they have had more than four months to seek leave to correct—by permitting them to simply circumvent this Court’s pretrial disclosure deadlines by way of a trial subpoena served on a timely retained and properly disclosed defense expert.

CONCLUSION For the reasons briefed above, Defendants respectfully request that this Court grant the present motion and issue an order quashing Plaintiffs’ trial subpoena to R. Lee Foster.

DATED this 15th day of November, 2022.

SUSSMAN SHANK LLP By /s/ Derek J. Ashton Derek J. Ashton, OSB 871552 dashton@sussmanshank.com Jason P. Evans, OSB No. 193573 jevans@sussmanshank.com Attorneys for Defendants

Page 8 - DEFENDANTS’ MOTION TO QUASH PLAINTIFFS’ TRIAL SUBPOENA TO R. LEE FOSTER

SUSSMAN SHANK LLP, ATTORNEYS AT LAW 1000 SW BROADWAY, SUITE 1400, PORTLAND, OREGON 97205-3089 TELEPHONE (503) 227-1111 | FACSIMILE (503) 248-0130

Joseph A. Grube, OSB # 962976 GRUBE OREHOSKI, PLLC 1200 Fifth Avenue, Suite 1711 Seattle, WA 98101 (206) 624-5975 joe@go-trial.com Local Counsel for Plaintiffs Daniel P. Mallove, WSBA # 13158 LAW OFFICE OF DANIEL P. MALLOVE, PLLC 2003 Western Avenue, Suite 400 Seattle, WA 98121 (206) 239-9933 dmallove@dpmlaw.com Lead Counsel for Plaintiffs UNITED STATES DISTRICT COURT DISTRICT OF OREGON PORTLAND DIVISION Case No.

Plaintiffs, v.

PLAINTIFFS’ MEMORANDUM IN OPPOSITION TO DEFENDANTS’ MOTION TO QUASH TRIAL SUBPOENA TO R. LEE FOSTER

Defendants.

Plaintiffs

, by and through their counsel of record, Daniel P.

Mallove and Joseph A. Grube, hereby submit the following Memorandum in Opposition to Defendants’ Motion to Quash Plaintiffs’ Trial Subpoena to R. Lee Foster.

Page 1 – PLAINTIFFS’ MEMORANDUM IN OPPOSITION TO DEFENDANTS’ MOTION TO QUASH TRIAL SUBPOENA TO R. LEE FOSTER

ADDITIONAL RELEVANT FACTUAL BACKGROUND Because defendants present only limited and incomplete factual background, plaintiffs provide the Court with the following additional factual background.

This issue of plaintiff

’s income loss has been in this case since its outset.

Plaintiffs’ Complaint alleges in paragraph 3.7 that “As a result of his injuries, plaintiff has been unable to work since June 2019 and has sustained past income loss in the amount of $150,000.00. Plaintiff

remains unable to work due to his injuries

and will incur additional income loss in the future as a result of the injuries he sustained in the subject collision in the amount of $1,850,000.” A copy of the Complaint is attached as Exhibit 1 to the Declaration of Daniel P. Mallove in Opposition to Defendants’ Motion to Quash Plaintiffs’ Trial Subpoena to R. Lee Foster.

In discovery, in response to requests for production from defendants, plaintiffs produced to defendants all of

’s corporate and personal tax returns detailing his historical income and

invoices and other documents detailing all of the revenue and income earned by

prior

to the subject collision. Defendants did not propound interrogatories to plaintiffs. However, defense counsel deposed

on November 18, 2021, at which time he questioned

extensively about his employment history and his income loss.

Defendants are correct that plaintiffs did not identify an economist in Plaintiffs’ Expert Witness Disclosure. The reason for this was two-fold – first, in a telephone conversation approximately one month before the expert disclosures were due, defense counsel Derek Ashton represented to plaintiffs’ counsel Daniel Mallove that defendants would not be identifying an expert economist except potentially in rebuttal; and second, plaintiffs identified in Plaintiffs’ Expert Witness Disclosure life care planning expert Robert Malaer and produced to defendants a copy of his written report which details

’s income loss. However, in Plaintiffs’ Expert Witness

Disclosure, plaintiffs included a section entitled EXPERTS DISCLOSED BY DEFENDANTS and specifically stated as follows: Page 2 – PLAINTIFFS’ MEMORANDUM IN OPPOSITION TO DEFENDANTS’ MOTION TO QUASH TRIAL SUBPOENA TO R. LEE FOSTER

Plaintiffs reserve the right to elicit expert opinions at trial from the experts disclosed in defendant’s Expert Witness Disclosure, and from witnesses whose deposition or trial testimony has not yet been taken, and from defendant’s experts, whose deposition or trial testimony has not yet been taken, either those already disclosed or yet to be disclosed, regarding their observations, opinions, qualifications, expertise, reports, and/or prior testimony.

Plaintiffs further reserve the right to elicit expert opinions from other witnesses identified by defendant, and other witnesses whose deposition or trial testimony has not yet been taken regarding their observations, opinions, qualifications, expertise, reports, and/or prior testimony.

Plaintiffs also included in their Expert Witness Disclosure a section entitled REBUTTAL EXPERTS in which they stated as follows: Plaintiffs further reserve the right to add additional experts, who may be characterized as rebuttal expert witnesses, in response to defendant’s expert witness disclosures consistent with the Federal Rules of Civil Procedure and the Court’s orders in this litigation. Plaintiffs reserve the right to identify other individuals within the scope of FRCP 26(a)(2) as discovery and investigation continue.

A copy of Plaintiffs’ Expert Witness Disclosure is attached as Exhibit 2 to the Declaration of Daniel P. Mallove in Opposition to Defendants’ Motion to Quash Plaintiffs’ Trial Subpoena to R. Lee Foster.

On June 27, 2022, plaintiffs timely and properly served Plaintiffs’ Supplemental Disclosure of Expert Witnesses in which they formally identified economist Eric Knowles as a rebuttal witness.

Plaintiffs included in that document a section entitled EXPERTS DISCLOSED BY DEFENDANT and a section entitled REBUTTAL EXPERTS containing the same language as was contained in Plaintiffs’ Expert Witness Disclosure quoted above. A copy of Plaintiffs’ Supplemental Expert Witness Disclosure is attached as Exhibit 3 to the Declaration of Daniel P. Mallove in Opposition to Defendants’ Motion to Quash Plaintiffs’ Trial Subpoena to R. Lee Foster.

Page 3 – PLAINTIFFS’ MEMORANDUM IN OPPOSITION TO DEFENDANTS’ MOTION TO QUASH TRIAL SUBPOENA TO R. LEE FOSTER

None of the experts disclosed by the parties have been deposed. Plaintiffs elected not to depose any of defendants’ experts because the written reports provided by those experts were detailed and presumably contain all of the opinions the experts intend to offer at trial.

At no time since defendants identified R. Lee Foster in Defendants’ Expert Witness Disclosures and provided plaintiffs with a copy of his expert report have defendants withdrawn their designation of Mr. Foster as an expert expected to testify at trial or otherwise advised plaintiffs that Mr. Foster will not be testifying at trial. In fact, Mr. Foster is identified as a trial witness in Defendants’ Witness List dated October 24, 2022, and filed with the Court, and in Defendants’ Witness Statements dated October 24, 2022. and filed with the Court. A copy of Defendants’ Witness List is attached as Exhibit 4 to the Declaration of Daniel P. Mallove in Opposition to Defendants’ Motion to Quash Plaintiffs’ Trial Subpoena to R. Lee Foster and a copy of Defendants’ Witness Statements is attached as Exhibit 5 to the Declaration of Daniel P. Mallove in Opposition to Defendants’ Motion to Quash Plaintiffs’ Trial Subpoena to R. Lee Foster.

Plaintiffs first became aware that defendants likely trial strategy may include not calling Mr. Foster to testify at trial on October 31, 2022, when plaintiffs received defendants’ motions in limine numbers 4 and 5 seeking to preclude Mr. Knowles from testifying in plaintiffs’ case-in-chief and limiting his testimony only to plaintiffs’ rebuttal case. It then became apparent that, if those motions are successful, defendants likely would not call Mr. Foster as a witness in defendants’ case and then would attempt to argue that Mr. Knowles should not be allowed to testify in rebuttal because there would be no defense expert economic testimony to rebut. Consequently, plaintiffs then issued a Subpoena to Appear and Testify at Hearing or Trial in a Civil Action to Mr. Foster which was personally served on him on November 9, 2022. A copy of the Subpoena to Appear and Testify at Hearing or Trial in a Civil Action is attached as Exhibit 6 to the Declaration of Daniel P. Mallove in Opposition to Defendants’ Motion to Quash Plaintiffs’ Trial Subpoena to R. Lee Foster.

Page 4 – PLAINTIFFS’ MEMORANDUM IN OPPOSITION TO DEFENDANTS’ MOTION TO QUASH TRIAL SUBPOENA TO R. LEE FOSTER

ARGUMENT Defendants make two arguments in support of their Motion to Quash – (1) the subpoena to Mr. Foster is an improper attempt to circumvent the discovery process and privileges and (2) the subpoena should be quashed because it is an improper attempt to obtain relief from carelessness. Both of these arguments lack factual and legal merit and should be rejected by the Court.

Applicable Case Law Although a few district and circuit courts have addressed the issue of a party calling an opposing party’s designated expert as a witness in its case-in-chief, there is no controlling authority from the Ninth Circuit. The cases from other jurisdictions, however, generally have held that, once an expert is designated under FRCP 26, the expert is recognized as presenting part of the common body of discoverable, and generally admissible, information and testimony available to all parties. House v. Combined Insurance Company of America, 168 F.R.D. 236 (N.D. Iowa 1996).

The District Court in House explained that courts have applied three different standards to the question of whether a party should have access to and be able to use at trial an expert hired by the opposing party. The first of those standards is an “exceptional circumstances” standard founded on FRCP 26(b)(4)(B). The second standard is a “discretionary” or “balancing” standard, involving a balancing of the interests of the party and the court against the potential for prejudice to the party who hired the expert, but who does not wish to use that expert at trial. The third standard is based upon a few cases finding an “entitlement” to call an opposing party's expert under certain circumstances, despite the opposing party's desire not to have the expert testify. The House court Page 5 – PLAINTIFFS’ MEMORANDUM IN OPPOSITION TO DEFENDANTS’ MOTION TO QUASH TRIAL SUBPOENA TO R. LEE FOSTER

noted that these differing standards arise in three different procedural postures and sets of circumstances. House, at p. 240.

1. The “Exceptional Circumstances” Standard The “exceptional circumstances” standard finds its authority in FRCP 26(b)(4)(B), which provides as follows: A party may, through interrogatories or by deposition, discover facts known or opinions held by an expert who has been retained or specially employed by another party in anticipation of litigation or preparation for trial and who is not expected to be called as a witness at trial, only as provided in Rule 35(b) or upon a showing of exceptional circumstances under which it is impracticable for the party seeking discovery to obtain facts or opinions on the same subject by other means.

FRCP 26(b)(4)(B) (emphasis added).

The circumstances under which discovery is obtainable from an expert consulted, but not expected to be called at trial, must be contrasted with the provisions of FRCP 26(b)(4)(A), which provides for discovery from an expert who is expected to be presented at trial: A party may depose any person who has been identified as an expert whose opinions may be presented at trial.

FRCP 26(b)(4)(A (emphasis added).

The House court noted that there are various classes of experts created by FRCP 26, and the limits on discovery or trial testimony that may be elicited from experts in each of these classes, but focused on the specific situation in that case involving an expert once designated as likely to testify at trial, but whose designation is subsequently withdrawn. The House court concluded that in that situation, the “exceptional circumstances” standard does not apply and the only situation in which that standard does apply is the FRCP 26 (b)(4)(B) expert who has been consulted, has not been formally designated as an expert and is not expected to be called to testify at trial. House, at p. 240-241; p. 246.

Page 6 – PLAINTIFFS’ MEMORANDUM IN OPPOSITION TO DEFENDANTS’ MOTION TO QUASH TRIAL SUBPOENA TO R. LEE FOSTER

2. “Balancing” or “Discretionary” Standards The House court pointed out that other courts have identified circumstances in which they find that the “exceptional circumstances” standard of FRCP 26(b)(4)(B) does not apply, even though a party now has a present intention not to use at trial an expert it had consulted, or even designated as likely to be used at trial under FRCP 26(b)(4)(A). Relying upon Peterson v.

Willie, 81 F.3d 1033 (11th Cir.1996), the court identified a discretionary standard under FRE 403 in which the court engages in a balancing test of the probative value of allowing the opposing party’s expert to testify at trial versus its potential prejudicial effect of the jury knowing who retained the expert. House, at p. 242-243.

Utilizing this balancing test, the House court found that an opposing party has a very significant interest in presenting to the jury the testimony of an opposing expert who has relevant information probative of the plaintiff’s damages and held that the opposing party could call the expert to testify at trial . The court pointed out that: The court's holding here will serve the salutary policy of requiring parties to give some thought and care to their expert witness designations, because once those designations are made, the party will have to live with the consequence that the opposing party will likely be given the opportunity to depose the expert or even to call the expert at trial on their own behalf.

House, at p. 247-248 3. The “Entitlement” Standard The House court noted that other courts have applied an entitlement standard which essentially provides that, once an expert has been formally designated and the expert’s written report has been produced or the expert has been deposed, neither the provisions of FRCP 26(b)(4)(B) nor the work product doctrine are applicable. The Court cited

Page 7 – PLAINTIFFS’ MEMORANDUM IN OPPOSITION TO DEFENDANTS’ MOTION TO QUASH TRIAL SUBPOENA TO R. LEE FOSTER

Fitzpatrick v. Holiday Inns, Inc., 507 F.Supp. 979 (E.D.Pa.1981), which allowed a subpoena to be issued on behalf of the plaintiff to compel the defendant's FRCP 35 expert to appear at trial as plaintiff's witness. House, at p.244.

The Subpoena to Mr. Foster is Not an Attempt to Circumvent the Discovery Process In support of its argument that plaintiffs’ subpoena is an attempt to circumvent the limitations of expert discovery, defendants rely on FRCP 26(b)(4) and FRCP 45. Defendants’ argument, however, is misplaced because the subpoena issued by plaintiffs has nothing to do with obtaining discovery of Mr. Foster’s opinions or any of his files or documents. Instead, it is subpoena to attend trial. Plaintiffs already have Mr. Foster’s written report and are not seeking any additional information or records from him.

In Agron v. The Trustees of Columbia University in the City of New York, 176 F.R.D. (S.D. New York), the District Court was presented with an issue similar to the instant case. Agron involved an attempt by defense counsel to call to testify at trial a medical expert retained by plaintiff. The expert prepared a written report which was produced to defendant and the expert was designated by plaintiff as a testifying expert. Plaintiff brought a motion to preclude defendant from calling the expert at trial.

The Agron Court reviewed FRCP 26(b)(4) and held as follows: The Court finds Rule 26(b)(4)(B) inapplicable to Plaintiff's motion. First, the Rule governs limitations on discovery. The instant dispute, however, does not concern discovery matters, but rather the trial testimony of Deutsch. “ ‘The rule does not address itself to the admissibility at trial of the testimony of such an expert which is elicited by the opponent.’ ” Steele, 1986 WL 30765, at *3 (quoting Granger v.

Wisner, 134 Ariz. 377, 656 P.2d 1238, 1242 (1982)); see also Fenlon v. Thayer, 127 N.H. 702, 506 A.2d 319, 321 (1986) (holding that state rule, modeled after Rule 26(b)(4)(B), does not control admissibility of opponent's consultative expert's testimony at trial). Second, Defendant neither abused the discovery process nor obtained the Deutsch Report through happenstance. Rather, Plaintiff voluntarily provided Defendant with a copy of the Deutsch Report and disclosed Deutsch's Page 8 – PLAINTIFFS’ MEMORANDUM IN OPPOSITION TO DEFENDANTS’ MOTION TO QUASH TRIAL SUBPOENA TO R. LEE FOSTER

opinions in response to Defendant's interrogatories. Thus, Plaintiff, by submitting the Deutsch Report to Defendant in discovery, voluntarily waived the only relief that Rule 26(b)(4)(B) provides—the non-disclosure of expert discovery for a nontestifying expert. Because the Court finds Rule 26(b)(4)(B) inapplicable, the “exceptional circumstances” standard of that rule does not govern this dispute.

Agron, at p. 449-450.

The Agron court then engaged in the balancing test under FRE 403 and concluded that the probative value of the expert’s testimony outweighed any prejudicial effect and allowed the defendant to call plaintiff’s expert at trial, subject to restrictions to minimize any prejudice.

Defendants also argue that plaintiffs are somehow misusing a trial subpoena. Again, this argument lacks merit. The subpoena to Mr. Foster was properly and timely issued and was properly personally served upon him.

Defendants argue that plaintiffs should not be able to call Mr. Foster at trial because plaintiffs have their own expert, Mr. Knowles, but acknowledge at the same time that they are seeking to exclude Mr. Knowles from testifying at all, despite the fact that he was properly disclosed as a rebuttal expert. As is discussed above, plaintiffs have the right to subpoena Mr. Foster to testify at trial because he is a designated expert whose report has been produced and his testimony is properly available to either side. Moreover, he is identified as a witness in Defendant’s Witness List and has never been withdrawn as a testifying expert.

Page 9 – PLAINTIFFS’ MEMORANDUM IN OPPOSITION TO DEFENDANTS’ MOTION TO QUASH TRIAL SUBPOENA TO R. LEE FOSTER

The Subpoena is Not Merely an Avenue to Obtain Relief from Carelessness.

Defendants again argue essentially the same point – that plaintiffs should not be able to subpoena Mr. Foster to testify because Mr. Knowles was identified only as a rebuttal expert. For the reasons explained above, the Court should reject this argument.

As the Court is well aware, decisions regarding the mode and order of witness questioning lie within the Court’s broad discretion. National Railroad Passenger Corporation v. Certain Temporary Easements Above the Railroad Right of Way in Providence, Rhode Island, 357 F.3d 36 (11th Cir. 2004); see also FRE 611(a). In National railroad, the First Circuit faced an issue similar to the instant case – whether to allow the defendant to call the opposing party’s expert to testify in its case-in-chief. The Court noted that the opposing expert was listed as a trial witness in plaintiff’s pre-trial submittals and affirmed the District Court’s discretionary decision to allow defendant to call the expert in its case-in-chief. National Railroad, at p. 42.

Plaintiffs submit that issue of

’s past and future income loss and the amount of

that income loss has been well known to defendants since the filing of the Complaint in this matter.

In discovery, plaintiffs produced to defendants all of

’s corporate and personal tax returns

detailing his historical income and other invoices and records detailing his income from the operation of

. In addition, defense counsel deposed

about his employment history and his income loss.

and questioned him extensively ’s income loss also was timely disclosed

to defendant in the Life Care Plan report prepared by plaintiffs’ expert, Robert Malaer. Simply put, there is no prejudice to defendants in the Court either allowing plaintiffs to call Mr. Knowles in plaintiffs’ case-in-chief (in which case, plaintiffs will not call Mr. Foster to testify in their case-inchief), or in the Court denying the Motion to Quash and requiring Mr. Foster to appear and testify

Page 10 – PLAINTIFFS’ MEMORANDUM IN OPPOSITION TO DEFENDANTS’ MOTION TO QUASH TRIAL SUBPOENA TO R. LEE FOSTER

at trial pursuant to the subpoena and allowing plaintiffs to present rebuttal testimony from Mr. Knowles.

CONCLUSION In light of the forgoing, and for the reasons stated above, plaintiffs respectfully submit that the Court should deny Defendants’ Motion to Quash Plaintiffs’ Trial Subpoena to F. Lee Foster.

Dated this 17th day of November, 2022.

GRUBE OREHOSKI, PLLC By /s/Joseph A. Grube Joseph A. Grube, OSB # 962976 1200 Fifth Avenue, Suite 1711 Seattle, WA 98101 (206) 624-5975 Local Counsel for Plaintiffs LAW OFFICE OF DANIEL P. MALLOVE, PLLC By /s/ Daniel P. Mallove 2003 Western Avenue, Suite 400 Seattle, WA 98121 (206) 239-9933 Lead Counsel for Plaintiffs

Page 11 – PLAINTIFFS’ MEMORANDUM IN OPPOSITION TO DEFENDANTS’ MOTION TO QUASH TRIAL SUBPOENA TO R. LEE FOSTER

2023 OADC ANNUAL CONVENTION CONTINUING LEGAL EDUCATION GUIDEBOOK

Uncertainty and Opportunity: Management Trends in the Legal Industry in 2023 PRESENTED BY:

Marci Taylor, JD, Founder / Strategy Consultant, Mantra

June 17, 2023 8:00am – 9:00am

OADC Oregon Association of Defense Counsel

Marci Taylor

Marci Krufka Taylor is a strategy consultant for law firms and high growth companies. She advises clients on strategy, management and marketing issues,succession plans, client relations programs and firm culture.

She is a frequent lecturer for national and regional conferences (Thomson Reuters, Association of Legal Administrators, Legal Marketing Association, American Bar Association, Defense Research Institute, global law firm networks, state bar associations and others) and served on the faculty of Altman Weil seminars. She also authored numerous articles for publication in ABA Law Practice Management, New York Law Journal, Legal Times,Corporate Counsel and other business and trade publications.

Marci also served as the Director, Marketing Operations for an AmLaw100/200 firm. In that role, she was responsible for the management of the marketing operations team, key firm marketing initiatives and marketing and business development efforts for the firm’s 180+ lawyer Business Law Section. She worked on the firm’s brand refresh, headed the project management on the firm’s multiple new web sites and led the firm’s client satisfaction program. Her other responsibilities included directing public relations strategies for Business Law and the New York market, developing and implementing group marketing plans for seven practice groups within Business Law, developing business law-specific advertising campaigns and advertisements,creating firm and departmental marketing collateral materials, developing customized pitch materials and RFP responses, managing sponsorships and events, providing attorney marketing and business development training and developing social media strategies.

Emerging Trends in the Legal Industry Marci Krufka Taylor Oregon Association of Defense Counsel Sunriver Resort June 17, 2023

Objectives • Emerging trends in the industry • Impact on your firm and what you can do in response • Questions and answers

Today’s legal marketplace • Demand has not returned • Competition stronger than ever

• Traditional • Non-traditional – ALSPs, rule changes in AZ, UT

• Consolidation continues • 46 mergers in 2022

• War for talent vs staff reductions • Workspace issues

• Majority of firms hybrid – varies widely by geography, size, culture • Generational issues (at both ends of the spectrum) • More about the people than the place • ABA study – 44% would leave role for more remote work ability

Growth In Demand for Law Firm Services

Demand Transactional vs Non-Transactional

Demand – Overall vs Litigation

Demand for Law Firm Services

by Segment

Hours worked by lawyer title

Today’s legal marketplace • Record revenue increases 2020, 2021 • Modest gains in 2023 (and some decreases) • Rates increased significantly • 10%+ from 2021 to 2022 • 1-5%, 6-10% 2022 to 2023 • Expect client pressure going forward

• Productivity average • Leverage is a struggle in small, mid-sized firms

Expense Growth

Overhead Per Lawyer

Support Staff FTEs By Function

Lawyer FTE Growth

Worked Rate Growth

Annual Profit Per Equity Partner Growth

Corporate Law Department Strategies - 2023

Corporate Law Department Strategies - 2023

Today’s legal marketplace • Culture remains a priority • Employee engagement • Cultural assessments • DEI • ESG

Today’s legal marketplace • Operational efficiencies • Impact of generative AI • Cybersecurity

Objectives • Emerging trends in the industry • Impact on your firm and what you can do in response • Questions and answers

Questions and Contact • mtaylor@mantrapartner.com • 610.453.4477

2023 OADC ANNUAL CONVENTION CONTINUING LEGAL EDUCATION GUIDEBOOK

Appellate Update: Keeping your Practice Current PANELISTS:

Justice Stephen Bushong, Oregon Supreme Court Justice Jack L. Landau, Willamette University College of Law Matt Kalmanson, Hart Wagner PC June 17, 2023 9:15am – 10:15am

OADC Oregon Association of Defense Counsel

Stephen Bushong

Stephen Bushong earned his B.A. from the University of Michigan in 1980 and a J.D. from the University of Michigan Law School in 1984.

His career experience includes working as a judicial clerk for United States Magistrate Marc L. Goldman; as an attorney in several law firms; as an assistant attorney general, attorney-in-charge, and chief trial counsel for the Oregon Department of Justice; and as a judge for the Multnomah County Circuit Court.

Matthew J. Kalmanson

An accomplished litigator and skilled negotiator, Matt has extensive experience representing national, regional and local clients in highvalue, complex litigation. His clients include financial institutions, entertainment companies, hospitals, national and local law firms, public entities, and many executives, officers, directors, professionals and business owners.

Matt’s specialty is litigating complicated disputes. He has experience with cases involving business transactions, professional duties, securities fraud, accounting and finance, shareholder disputes, class actions, derivative actions, trust and partnership disputes, and “alter ego” claims. Matt has litigated many cases challenging or focused on constitutional, statutory and regulatory provisions and schemes, including First Amendment and related cases. He has particular expertise with matters arising out of the Oregon Securities Act. Matt also has extensive appellate experience. He regularly serves as lead appellate counsel in cases throughout the Pacific Northwest, and has argued over 50 cases in state and federal appellate courts, including in the Ninth Circuit Federal Court of Appeals, the Oregon Supreme Court and the Oregon Court of Appeals. A successful track record of appeals includes numerous instances where he has procured reversals of an unfavorable court or jury verdict.

AWARDS AND RECOGNITION Best Lawyers in America

Appellate Practice, 2016-2023 Commercial Litigation, 2023 Litigation – Health Care, 2023 Oregon Super Lawyers Rising Star, 2008-2012

PROFESSIONAL ACTIVITIES AND ASSOCIATIONS Multnomah Bar Association

Oregon Judicial Department, Oregon Rules of Appellate Procedure Committee, 2014-present Oregon State Bar, Executive Committee Chair of the Constitutional Law Section, 2011-present; Uniform Civil Jury Instructions Committee, 2011-2013; Securities Section; Appellate Section Oregon Association of Defense Counsel, Editor, “The Verdict” Magazine, 2012-2015

PUBLICATIONS

Chapter on “Civil Procedure, Dispute Resolution and Appellate Practice,” Oregon Legislation Highlights, Co-author, 2007 Contributor to Oregon State Bar publications on appellate law and procedure

EDUCATION Yale Law School J.D., 1999

University of Massachusetts Honors Program B.A., 1994

PRACTICES Appellate Law

Business and Commercial Litigation Civil Rights Defense Insurance Coverage Litigation Legal Malpractice Defense Professional Liability Defense

ADMISSIONS

Oregon State Courts Washington State Courts District of Oregon Western District of Washington Southern and Eastern Districts of New York The United States Court of Appeals for the Ninth Circuit United States Supreme Court

PRESENTATIONS

Interviewed on Oregon Public Broadcasting’s program, “Think Out Loud”. Discussed a case brought by animal rights and environmental activists that is being appealed after first being dismissed by a federal judge. In their lawsuit the Animal Legal Defense Fund and Seeding Sovereignty claimed they have a constitutional “right to wilderness”, and this right is being violated by the federal government’s failure to combat climate change more vigorously. Listen online.

August 30, 2019 “The Changing U.S. Supreme Court,” Featured Speaker, City Club of Portland Friday Forum, July 13, 2018 Co-organizer and Moderator, Constitutional Law Section Annual Seminar on Developments in Constitutional Law, 2011-2019 Panelist on Developments in Tort Law Panelist on Legislative Highlights, 2007 Legislative Session Panelist on CLE on Ethics and Judgments Panelist on Motion Practice in Legal Malpractice Claims Presenter on “Trends in ADA Law,” BOLI Seminar

COMMUNITY ACTIVITIES

Pioneer Courthouse Historical Society, Member, Board of Directors U.S. District Court of Oregon Historical Society, 20052009, Board of Directors, 2007-2009, Board Member, 2005-2009 Pro Bono activities for refugees seeking asylum

Justice Jack L. Landau

The Honorable Jack L. Landau served as an Associate Justice on the Oregon Supreme Court from 2011 through 2017. Before his election to the Supreme Court, Justice Landau served as a judge on the Oregon Court of Appeals for 18 years, including 12 years as a presiding judge on one of the court’s three-judge panels. He served in the Oregon Department of Justice, first as Attorney-in-Charge of the department’s Special Litigation Unit and later as the Deputy Attorney General. During his time at the Department of Justice, he represented the state a wide variety of cases at trial and on appeal, including the successful defense of the constitutionality of Oregon’s famous public beach legislation in Stevens v. Cannon Beach and the constitutionality of the state’s video poker laws in Ecumenical Ministries v. Oregon Lottery Commission.

He also argued the habeas corpus appeal of Keeney v. Tamayo-Reyes before the United States Supreme Court. Landau practiced law as an associate and partner in the Portland firm of Lindsay, Hart, Neil & Weigler, where he specialized in complex civil litigation in both state and federal court.

Justice Landau has taught as an adjunct professor at Willamette University College of Law since 1993. He has also taught at the University of Oregon School of Law and Northwestern School of Law of Lewis and Clark College.

In addition, he is a frequent speaker at continuing education programs sponsored by the American Bar Association, the Oregon State Bar, local bar associations, the Oregon Law Institute, and the National Judicial College. In 2017, he was invited to deliver the 25th annual Robert F. Williams lecture on state constitutional law at Rutgers University Law School.

Justice Landau has served on the Oregon Council on Court Procedures, the Oregon Bench and Bar Professionalism Commission, and Oregon Law Commission work groups on Oregon state capitol workplace sexual harassment policy, conflicts of law legislation, and standing to sue statutes.

He also volunteers for the Classroom Law Project and regularly speaks to high school civics classes around the state.

EDUCATION

LLM, University of Virginia School of Law JD, Northwestern School of Law of Lewis and Clark College BA, Lewis & Clark College

COURSES

Law 216: Statutory Interpretation State Constitutional Law

OADC PRESENTATION--SUPREME COURT CASE SUMMARIES Justice Stephen K. Bushong Oregon Supreme Court June 17, 2023 I.

Defamation/Unlawful Trade Practices

Rosenblum v. Living Essentials, LLC, 371 Or 23 (2023) Defendants manufacture, market and sell 5-hour ENERGY products, which contain caffeine and a blend of noncaffeine ingredients. In advertising these products, defendants stated that the noncaffeine ingredients "provide extra energy, alertness, and focus." 371 Or at 27. The Attorney General filed suit, alleging that the advertisements violated the Unlawful Trade Practices Act (UTPA), ORS 646.605 to 646.656, because the noncaffeine ingredients do not have the effects advertised. Following a bench trial, the trial court ruled in favor of defendants on all claims, concluding that the state failed to prove that the misrepresentations were material to consumer purchasing decisions.

The Court of Appeals affirmed. The Supreme Court reversed, holding that "the text, context, and legislative history demonstrate that the statute unambiguously does not require proof that a defendant's conduct was 'material to consumer purchasing decisions.'" Id. at 44. The court also rejected defendants' argument that, without such a requirement, the provisions of the UTPA violate the free speech provisions of the state and federal constitutions. Id. at 59.

Lowell v. Medford School Dist. 549C, 370 Or 79 (2022) Plaintiff provided piano tuning and concert production services to defendant school district. A school theater technician (Malone), reported to her supervisor (Bales) that plaintiff appeared to be intoxicated at a concert, that he “smelled of alcohol,” and that “this was not the first time.” Bales repeated the statements to another district employee (Armstrong), who sent emails summarizing the statements to other district employees. Plaintiff sued, alleging that the statements by Malone, Bales and Armstrong were defamatory. The trial court granted the school district’s motion for summary judgment, concluding that the claim is barred by absolute immunity because the statements were made by public officials in the course of their official duties. The Court of Appeals affirmed. The Supreme Court reversed. The court explained that the absolute privilege applies “when the public’s interest in functioning government is so great that it outweighs an individual’s interest in redress for reputational harm.” 370 Or at 93. The court “conceives of the absolute privilege as narrow in scope.” Id. at 94.

1

The court rejected the school district’s argument that the court has already extended “or should extend the absolute privilege to all public employees acting within the course and scope of their duties.” Id. at 95. The privilege did not apply here, the court concluded, because Malone, Bales, and Armstrong were not “officers” of the district “equivalent to the university department head in Shearer [v. Lambert, 274 Or 449 (1976)].” Id. at 96.

Lowell v. Wright, 369 Or 806 (2022) Plaintiff owns and operates a piano store. Defendant Wright, the general manager of a competing piano store (defendant Artistic Pianos), posted a negative review of plaintiff’s store on Google. After talking to Artistic’s owner, Wright removed the negative review without saving a copy; it was never recovered. The trial court granted defendants’ motion for summary judgment on plaintiff’s defamation claim, concluding that some of the statements were not actionable, and that, without a copy of the Google posting, it was not possible to determine whether the other allegedly false statements were constitutionally protected expressions of opinion. The Court of Appeals reversed; the Supreme Court affirmed the Court of Appeals in part on different grounds and remanded the case to the trial court. The court first concluded that “the lack of a copy of the review is not fatal to plaintiff’s libel claim and that two of the three allegedly defamatory statements in the review are actionable.” 369 Or at 808. The court further concluded that, under Neumann v. Liles, 358 Or 706 (2016), the on-line review about plaintiff’s store “contained speech on a matter of public concern protected by the First Amendment’s public comment defense.” Id. Finally, the court declined to overrule its precedent recognizing a distinction between media and nonmedia defendants, concluding that plaintiff was not required to prove actual malice because these defendants “are not ‘media’ under any definition.” Id. at 809.

II.

Negligence

Scott v. Kesselring, 370 Or 1 (2022) Plaintiff was injured in a rear-end collision. She alleged that her emotional injuries were so severe that she attempted to take her own life and was hospitalized.

Defendant admitted liability for the collision but argued at trial that evidence of defendant’s cellphone use at the time of the collision should be excluded. The trial court admitted the evidence and the jury returned a verdict in plaintiff’s favor. The Court of Appeals reversed; the Supreme Court reversed the Court of Appeals and affirmed the trial court’s judgment. The court concluded that the trial court did not err in admitting the evidence because it was “admissible on the issue of foreseeability.”

2

370 Or at 13. The court explained that defendant’s factual admission “that her conduct caused a rear-end collision” did not “take the pertinent question of the range of foreseeable consequences from the jury.” Id. at 23. Rather, “the fact that defendant challenged the foreseeability of the kind of harm that befell the plaintiff—a suicide attempt—meant that the jury was still required to determine whether defendant’s conduct unreasonably created a foreseeable risk of that harm.” Id. at 24. The court also concluded that the trial court did not abuse its discretion in concluding that the cellphone evidence was admissible under OEC 403 because its probative value was not substantially outweighed by the risk of unfair prejudice. The court explained that, when a defendant’s conduct is at issue, “there is nothing particularly unfair about painting that conduct in all its details, and it could be unfair not to do so.” Id. at 26.

Haas v. Estate of Mark Steven Carter, 370 Or 742 (2023) Plaintiff alleged that she suffered injuries to her neck and back when her stopped car was rear-ended by a car driven by defendant Carter. Before the collision, plaintiff had what her orthopedic surgeon described as "an extensive cervical and lumbar physical history," including prior neck surgery. 370 Or at 744. At trial, plaintiff requested two jury instructions on causation: Uniform Civil Jury Instruction (UCJI) 23.01 on "but for" causation, and UCJI 23.02 on "substantial factor" causation. The trial court gave the "but for" instruction, concluding that the "substantial factor" instruction only applied when multiple causes operating at the same time. The trial court also gave requested UCJI 70.06 on "previously infirm condition." The jury returned a verdict for defendants. The Court of Appeals affirmed, concluding that the "substantial factor" instruction was not required in this case. The Supreme Court affirmed. The court explained that there is a "subtle difference between a defendant's argument that the defendant is not liable for any injury to a plaintiff because the plaintiff's preexisting condition was the only cause of the plaintiff's injury and an argument that, even if the defendant's negligent conduct was a cause of the plaintiff's injuries, the defendant should not be held liable for the full extent of the injuries that the plaintiff incurred."

Id. at 762. That difference "is not, however, a reason to require a substantial factor causation in every multiple causation case. Together, a but-for instruction on causation and a previous infirm condition instruction on damages may suffice." Id. III.

Elder Abuse

Adelsperger v. Elkside Development LLC, 371 Or 61 (2023) Plaintiffs purchased membership contracts from Elkside Development LLC (Elkside) that allowed them to use the campground free of charge. Elkside later sold the 3

campground to Barnett Resorts LLC, which was owned and operated by defendants Stefani and Chris Barnett (the Barnetts). Shortly after purchasing the campground, the Barnetts sent a letter to plaintiffs informing them that they would no longer honor the membership contracts entered into by Elkside, the prior owner. Plaintiffs sued, alleging claims for (1) breach of contract; (2) intentional interference with contract; and (3) elder abuse, based on the fact the many of the membership contracts had been held by plaintiffs over the age of 65. The trial court granted the Barnetts' motion for summary judgment, concluding that they could not be individually liable for the actions of Barnett Resorts LLC under ORS 63.165(1). The Court of Appeals affirmed without opinion. The Supreme Court reversed in part and affirmed in part. On the elder abuse claim, the court reversed the trial court, holding that "ORS 63.165(1) is not a bar to asserting a claim for a statutory violation of ORS 124.100(2) against a member-manager of an LLC, when the LLC is alleged to be the entity that directly perpetrated the elder abuse." 371 Or at 71. On the breach of contract claim, the court affirmed the trial court, holding that, because "there is no evidence that the Barnetts, acting in their individual capacity, breached the contract[,]" the trial court "was correct to preclude this claim according to ORS 63.165). Id. Finally, the court "affirm[ed] the [trial court's ruling on] the intentional interference claim by an equally divided court." Id. at 65 IV.

Procedure

Dahlton v. Kyser, 370 Or 34 (2022) Decedent in this wrongful death case died from cardiac arrest when he was five months old. The representative of his estate filed this action, seeking, among other things, damages on behalf of the statutory beneficiaries for their loss of decedent’s society and companionship. The trial court entered an order under ORCP 44 C requiring the beneficiaries to produce records of their medical and psychological care. The Supreme Court granted the beneficiaries’ petition for alternative writ of mandamus, concluding as a matter of law that “the statutory beneficiaries of a wrongful death claim are not, by virtue of that status, ‘parties’ who can be compelled under ORCP 44 C to provide privileged records.” 370 Or at 36.

Gist v. ZoAn Management, Inc., 370 Or 27 (2022) The parties in this case signed a “Driver Services Agreement” (DSA) for plaintiff to provide delivery services for defendants as an independent contractor. Plaintiff filed this class action wage and hour suit, alleging that he and other drivers were employees, not independent contractors. The trial court granted defendants’ motion to compel arbitration under the DSA’s arbitration clause. The Court of Appeals and Supreme Court 4

affirmed, rejecting plaintiff’s argument that the DSA is unconscionable “because it requires him to arbitrate his wage and hour claims but prohibits the arbitrators from granting him relief on those claims.” 370 Or at 31. The court explained that (1) “the DSA does not prevent the arbitrators from concluding that the DSA’s provisions classifying drivers as independent contractors are invalid or unenforceable and that plaintiff was an employee”; and (2) if the arbitrators agree that plaintiff was an employee, “they can resolve plaintiff’s claims under Oregon’s wage and hour statutes.”

Id. at 32.

State/Klamath County v. Hershey, 370 Or 200 (2022) Klamath County Animal Control impounded 22 dogs, three horses, and seven chickens from Hershey’s property, and the state charged Hershey with animal neglect.

The county then filed a petition under ORS 167.347 seeking forfeiture of the animals unless Hershey paid a deposit or bond to cover the costs of caring for them. Defendant requested a jury trial. The Supreme Court held that a proceeding under ORS 167.347 “does not involve a claim for relief that would have been tried to a jury at the time of the adoption of the constitution, and, therefore, is not one to which the Article I, section 17, jury trial right applies.” 370 Or at 209.

E.J.T. v. Jefferson County, 370 Or 215 (2022) Claim under Oregon's Vulnerable Person Act, ORS 124.100 to 124.140, is available against a public body. The legislature did not intend to create a statutory private right of action to address violations of child abuse reporting requirements.

Chaimov v. State of Oregon, 370 Or 382 (2022) Documents subject to attorney-client privilege are exempt from disclosure under Oregon Public Records Act. Legal services provided by Office of Legislative Counsel in connection with bill drafting are provided to the Governor, not the Legislative Assembly.

Bill drafting request forms are protected by the attorney-client privilege.

5

Cockey v. Mead, 324 Or.App. 526 (2023) 526 P.3d 1201

324 Or.App. 526 Court of Appeals of Oregon.

Scott COCKEY, Plaintiff-Appellant, v.

George MEAD, an individual and The Mead Law Firm, P.C., an Oregon professional corporation, Defendants-Respondents.

A177424 | Argued and Submitted December 9, 2022. | March 8, 2023 Synopsis Background: Former client brought legal-malpractice action against attorney and attorney's employer, based on allegations that in earlier guardianship settlement, attorney committed malpractice by failing to ensure independent guardianship of client's adult daughter was temporary and by binding client to fund special needs trust. The Circuit Court, Multnomah County, Melvin Oden-Orr, J., entered judgment granting attorney and employer's motion for summary judgment.

Client appealed.

The Court of Appeals, Joyce, J., held that client's cause of action accrued more than two years before he filed claim.

Affirmed.

Procedural Posture(s): On Appeal; Motion for Summary Judgment. **1202 Multnomah County Circuit Court, 19CV25628; Melvin Oden-Orr, Judge.

Attorneys and Law Firms Matthew Whitman argued the cause and filed the briefs for appellant.

Julie A. Smith, Portland, argued the cause for respondents.

Also on the brief was Cosgrave Vergeer Kester LLP. Before Aoyagi, Presiding Judge, and Joyce, Judge, and Jacquot, Judge. *

Opinion JOYCE, J. *528 In this legal malpractice case, plaintiff appeals from a judgment granting summary judgment in favor of defendant on the ground that plaintiff's claim is time-barred. 1 The question we must resolve is whether there is a genuine issue of material fact as to whether plaintiff knew or should have known of any harms caused by defendant's alleged tortious conduct more than two years before plaintiff filed his legal malpractice claim in July 2019. See ORS 12.110(1); U.S. Nat'l Bank v. Davies, 274 Or. 663, 665, 548 P.2d 966 (1976) (applying two-year statute of limitations to legal malpractice claim pursuant to ORS 12.110(1)). We review a trial court's grant of summary judgment to determine whether there are any issues of material fact and whether the moving party is entitled to judgment as a matter of law. ORCP 47 C; see generally Jones v. General Motors Corp., 325 Or. 404, 939 P.2d 608 (1997). After reviewing the record and all reasonable inferences in the light most favorable to plaintiff, Marshall v.

PricewaterhouseCoopers, LLP, 316 Or. App. 610, 626, 504 P.3d 1236 (2021), we affirm.

The statute of limitations begins to run at the time a cause of action accrues. ORS 12.010. To determine when a legal malpractice claim accrues, the discovery rule applies.

Kaseberg v. Davis Wright Tremaine, LLP, 351 Or. 270, 277, 265 P.3d 777 (2011) (construing discovery rule in legal malpractice case). Under that rule, the limitation period begins to run on a plaintiff's claim only when “the client knows or, in the exercise of reasonable care, should know every fact which it would be necessary for the client to prove *** in order to support his right to judgment.” Id. (internal quotation marks and brackets omitted). To establish a legal malpractice claim, a plaintiff must prove that they (1) incurred harm (2) that was caused by (3) their attorney's tortious conduct. Id.; Marshall, 316 Or. App. at 629, 504 P.3d 1236.

The parties agree that the single question on appeal concerns when plaintiff knew or should have known that he had incurred the appropriate kind of harm. As to that question, the relevant events are as follows: *529 • In 2016, concerned about his adult disabled daughter's safety while in the guardianship of her mother, plaintiff hired defendant to petition in probate court for the mother's removal as guardian, his own

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Cockey v. Mead, 324 Or.App. 526 (2023) 526 P.3d 1201

**1203 appointment as guardian, and his daughter's placement in his home.

• In April 2016, while defendant was representing plaintiff, the parties to the guardianship proceeding entered into a settlement whereby an independent guardian was appointed.

• In May 2016, plaintiff established a special needs trust for his daughter.

• In September 2016, the independent guardian informed plaintiff that his daughter would be placed in a group home rather than plaintiff's home.

• In October 2016, plaintiff, after hiring a new attorney, petitioned to have the independent guardian removed and have himself appointed.

• The independent guardian then moved for an order compelling plaintiff to fund the special needs trust to cover the guardian's professional and legal fees.

• In January 2017, the probate court issued an “order on [plaintiff's] objection to funding a special needs trust,” which required plaintiff to fund the special needs trust by “depositing a meaningful sum sufficient to satisfy reasonable debts incurred in the care of the Protected Person, including necessary attorney fees” based on its finding that, in the settlement agreement, plaintiff had stipulated to funding the trust.

• In March 2017, plaintiff filed a separate action in circuit court asking the court to declare that (1) the special needs trust could not be used to pay the guardian's legal fees or professional fiduciary compensation and (2) the probate court could not require plaintiff to make any particular distributions as trustee of the trust. *530 • In April 2017, plaintiff withdrew his October 2016 petition to remove the guardian and have himself appointed.

• In March 2018, the circuit court concluded that plaintiff had to fund the special needs trust to reimburse the independent guardian's costs, including any attorney fees.

Plaintiff filed his malpractice complaint in June 2019. In his complaint, plaintiff alleged that defendant committed malpractice in April 2016, in the guardianship proceeding settlement, by failing to ensure that the independent

guardianship was temporary and by binding him to fund the special needs trust. Plaintiff alleged that defendant's conduct caused legally cognizable damage by resulting in plaintiff being “forced to pay *** guardianship fees, attorney's fees, and other professional fees in attempts to undo the consequences of [defendant's] negligence.”

Plaintiff admitted that he knew that defendant's negligence had caused him harm when, in October 2016, he decided to hire a new attorney to file a petition to remove the independent guardian. He hired a new attorney at that point because he had “learned that [defendant] had never secured the agreement of [the independent guardian] to any limitation of time or scope.”

He also admitted that he knew that “[d]efendants’ advice had begun to cost him money by April 2017.”

The trial court granted defendant's motion for summary judgment on the ground that plaintiff's claim was barred by the two-year statute of limitations.

As noted, the question before us is narrow: Did a genuine issue of material fact exist as to when plaintiff knew or should have known that he had been harmed by defendant's negligence? As to that question, both parties find support, at least facially, in two lines of cases that involve a professional's negligent act that results in additional litigation for the plaintiff. Plaintiff relies on Davies, 274 Or. 663, 548 P.2d 966, and its progeny to argue that his claim did not accrue until March 2018, when the circuit court construed the trust to require plaintiff to cover the independent guardian's legal *531 fees and compensation through the date of that circuit court judgment. He asserts that he could have “prevailed outright in [that later circuit court case], and the Court could have determined that he had no financial obligation, either to fund the Supplemental [sic] Needs Trust nor to pay the guardian's attorney fees. Had Plaintiff prevailed, he would never have suffered legally cognizable harm at all.” (Emphasis in plaintiff's brief.) **1204 Defendant relies on a different Supreme Court case, Jaquith v. Ferris, 297 Or. 783, 687 P.2d 1083 (1984), and its progeny to argue that plaintiff suffered actionable harm no later than April 2017, when he incurred legal expenses to try to undo the alleged malpractice.

As we explain, the distinction between the cases on which plaintiff and defendant rely ultimately turns on whether the plaintiff knew the defendant's negligence was the cause of their harm versus whether the plaintiff knew that they had

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Cockey v. Mead, 324 Or.App. 526 (2023) 526 P.3d 1201

been harmed. Where the outcome in litigation subsequent to the negligent act could establish that the defendant was not negligent in the first instance, the statute of limitations does not begin to run until the conclusion of that litigation. But where the plaintiff knows or should know that the defendant was negligent, and the litigation subsequent to the negligent act serves only to determine to what extent the plaintiff has been harmed, the statute of limitations begins to run from the time that the plaintiff learns or should have learned that the defendant's act was negligent and that it caused some harm.

We begin with Davies. Davies was an attorney malpractice action where the defendant had advised the plaintiff that the plaintiff could take a certain action with respect to stock funds. 274 Or. at 665, 548 P.2d 966. Four years after that advice, the plaintiff was sued for return of the funds. The plaintiff ultimately settled the action. A year after entering into the settlement agreement, the plaintiff sued the defendant for malpractice, seeking both attorney fees and recovery of the amount that he had paid in settlement. The Supreme Court reversed dismissal of the case on statute of limitations grounds. It first concluded that defending an action —including the incurrence of attorney fees—that arose out *532 of an attorney's negligent advice constituted harm. Id. at 667-78, 548 P.2d 966. But it went on to hold that whether that harm was caused by the defendant could not be known until the lawsuit against the plaintiff had been resolved, because it was only then that the plaintiff would know that the defendant's advice was negligent, thereby causing her harm.

Id. at 668-69, 548 P.2d 966.

In Jaquith, by contrast, the question was not whether the plaintiff was aware of the cause of her harm but rather when she had incurred the harm, a difference that the court ultimately concluded required a result different from that in Davies. Jaquith involved litigation brought by a plaintiff against her realtor for undervaluing property that the plaintiff then entered into a contract to sell. 297 Or. at 785, 687 P.2d 1083. When the plaintiff discovered the undervaluation, she refused to proceed with the sale; the prospective buyer then sued her for specific performance. At the conclusion of that action, the plaintiff was forced to convey the property.

The plaintiff then commenced a negligence action against the realtor, more than two years after she discovered the undervaluation of her property, but within two years of the specific-performance lawsuit being fully resolved.

On appeal from a dismissal on statute-of-limitations grounds, the plaintiff argued that “she sustained no harm until the

extent of her damage was ascertained” at the conclusion of the specific-performance action. Id. at 788, 687 P.2d 1083.

The Supreme Court rejected that argument, concluding that the plaintiff's contractual obligation to sell at the undervalued price, which arose from the defendant's negligence and which existed when she signed the agreement to sell the property, had itself caused harm. Additionally, “[t]he legal costs plaintiff assumed to resist her contractual duty to convey likewise constituted harm.” Id. In short, more than two years before filing the negligence action, the plaintiff knew of the defendant's negligence (undervaluing the property), knew that she had incurred harm (the expenses of resisting the specific performance action and the contractual obligation itself), and knew that defendant's negligence had caused that harm (the underpriced sales contract resulted from defendant's undervaluation); it was only the extent of *533 her damages that she did not ascertain until the conclusion of the specific performance action. Id. The Supreme Court further synthesized Davies and Jaquith in Bollam v. Fireman's Fund Ins. Co., 302 Or. 343, 730 P.2d 542 (1986). There, the plaintiffs brought a negligence **1205 action against their car insurance company, alleging that the company had improperly handled a claim in a way that exposed the plaintiffs to excess liability. After a car crash in which the plaintiffs were at fault, their insurance company began making payments to the party injured in the crash. The plaintiffs hired an attorney to evaluate the claim. The party injured in the crash ultimately sued the plaintiffs, resulting in the insurance company paying the balance of the policy limits and the plaintiffs having to pay an additional sum. Id. at 345-46, 730 P.2d 542. The plaintiffs then brought an action against their insurance company for negligence, more than two years after they hired an attorney to evaluate the claim, but less than two years after they had to pay the crash victim in the lawsuit. The question the court was faced with was whether the plaintiffs’ claim accrued when they incurred the attorney fees or when they had to pay the crash victim.

In concluding that the claim accrued when the plaintiffs had to hire an attorney, the court contrasted Davies and Jaquith.

On the one hand, in Davies, when the plaintiff incurred attorney fees defending the stock-fund action, she could not have known whether the cost of defending the action was caused by negligent advice, whereas, on the other hand, in Jaquith, “no issue related to defendant's alleged negligence would be resolved in the litigation that followed the respective defendant's negligent conduct”; that is, the fact that the property had been undervalued was not at issue in the specific

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Cockey v. Mead, 324 Or.App. 526 (2023) 526 P.3d 1201

performance action. Bollam, 302 Or. at 352-53, 730 P.2d 542. The court in Bollam distinguished the plaintiff's case from Davies by noting that, in Davies, “the very question whether the attorneys’ advice was correct would be resolved in the ligation” brought against the plaintiff. Id. at 352, 730 P.2d 542. “Only if the litigation precipitated by the stock sale transaction was resolved against the [plaintiff] would it become apparent that the cost of defending the suit was *534 caused by the attorneys’ advice and not a misapprehension of rights” by the party that sued the plaintiff. Id. (emphasis in original).

The court then concluded that the plaintiffs’ claim in Bollam was more like Jaquith because the “result of the litigation between the present plaintiffs and [the crash victim] would determine only the amount of plaintiffs’ liability to [him],” and not whether the insurance company had been negligent at all. Id. “Only the full extent of harm was left to be determined” after the insurance company's alleged negligence, which occurred—and about which the plaintiffs knew—more than two years prior to the filing of the lawsuit. Id. at 353, 730 P.2d 542.

In short, both Jaquith and Bollam involved facts that left no doubt that the respective plaintiffs knew, more than two years prior to filing negligence actions, that the defendants had been negligent, that the plaintiffs had incurred harm, and that the harm was the result of the defendants’ negligence. Subsequent litigation may have informed the plaintiffs’ knowledge of the extent of the harm they incurred, but for statute of limitations purposes, the proverbial clock began to run from when the harm accrued, not when its full extent was discovered.

The same is true in the present matter. Like the plaintiff in Jaquith (and unlike in Davies), plaintiff knew that defendant's negligent conduct had caused him harm more than two years

before filing his legal malpractice claim. Plaintiff hired a new attorney both to petition to remove the independent guardian and to object to paying on the trust, the latter of which resulted in the probate court ordering him to fund the trust in January 2017. And by his own admissions, plaintiff knew that he had incurred harm as a consequence of defendant's conduct by that point. See Jaquith, 297 Or. at 788, 687 P.2d 1083 (legal costs incurred because of the attorney's negligence can constitute a cognizable harm). What is more, the subsequent trust case could not have obviated defendant's alleged negligence; at most, it would have “determine[d] only the amount of plaintiff[’s] liability to” the special needs trust. Bollam, 302 Or. at 352, 730 P.2d 542. Framed slightly differently, unlike in Davies, in this case, the trust *535 case litigation did not determine the culpability of defendant's conduct; **1206 at most, prevailing in it would have mitigated the extent of plaintiff's damages.

In sum, on this record, no genuine issue of material fact exists that plaintiff knew that defendant's alleged negligence had caused him harm more than two years before he filed the malpractice claim. Plaintiff's concessions together with the underlying procedural facts establishes that, by at least April 2017, plaintiff knew that he had incurred compensable harm that was caused by defendant's purported negligence.

Accordingly, the trial court properly concluded that the limitation period was triggered no later than April 2017, more than two years before plaintiff filed his legal malpractice claim.

Affirmed.

All Citations 324 Or.App. 526, 526 P.3d 1201

Footnotes *

Jacquot, J., vice James, J. pro tempore.

1

Though plaintiff filed his claim against both his former attorney and that attorney's employer, we refer to “defendant” in the singular.

End of Document

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4

Hathaway v. B & J Property Investments, Inc., --- P.3d ---- (2023) 325 Or.App. 648

utility billing practices violated ORS 90.315(4) (2011) of 325 Or.App. 648 Court of Appeals of Oregon.

Loren HATHAWAY, on behalf of himself and all others similarly situated within the state of Oregon; Gennise Hathaway, on behalf of herself and all others similarly situated within the state of Oregon; and Heather Noble, on behalf of herself and all others similarly situated within the state of Oregon, Plaintiffs-Respondents, v.

B & J PROPERTY INVESTMENTS, INC., an Oregon corporation; Better Business Management, Inc., an Oregon corporation doing business as Salem RV Park; and William J. Berman, an individual, Defendants-Appellants.

A169427 | Argued and Submitted February 15, 2022. | May 3, 2023 Marion County Circuit Court, 13C14321; Dennis J. Graves, Judge. (General Judgment dated October 31, 2018); Donald D. Abar, Judge. (Supplemental Judgment dated January 2, 2020) Attorneys and Law Firms Matthew J. Kalmanson, Portland, argued the cause for appellants. Also on the briefs were Hart Wagner LLP, and Janet M. Schroer.

Rick Klingbeil, Portland, argued the cause for respondents.

Also on the briefs were Rick Klingbeil, PC, Brady Mertz, PC, and Brady Mertz.

Before Shorr, Presiding Judge, and Mooney, Judge, and Pagán, Judge.

Opinion SHORR, P. J. **1 *650 This appeal reaches us following nearly seven years of class-action litigation in the trial court. In 2013, plaintiffs Loren and Gennise Hathaway (the Hathaways) first filed suit on behalf of themselves and all similarly situated persons against the owners and managers of Salem RV Park, where the Hathaways lived, alleging that certain park

the Oregon Landlord Tenant Act (ORLTA). 1 Originally, the defendants to the action were Better Business Management, Inc. (BBM), which managed the park, and B & J Property Investments, Inc. (B & J), which owned the land. As the litigation progressed, more named plaintiffs joined; plaintiffs added William Berman, an owner and president of BBM and B & J, as a defendant; plaintiffs brought an additional claim for unlawful retaliation under ORS 90.385 after the park raised monthly rents by $20 in the first months of litigation; and, eventually, plaintiffs sought to pierce BBM's corporate veil to recover damages for BBM's violations from both B & J and Berman individually. 2 By late 2017, the court had resolved nearly all the issues in the litigation, largely through a series of partial summary judgment rulings that, in total, held BBM liable to plaintiffs for violations of the ORLTA pursuant to ORS 90.315(4) (2011) and ORS 90.385 and awarded plaintiffs nearly $5 million in damages. The case then proceeded to a bench trial solely on the issue of whether to pierce BBM's corporate veil to permit plaintiffs to recover those damages from B & J and Berman. The court again ruled in plaintiffs’ favor and entered a general judgment against all three defendants, “and each of them,” on plaintiffs’ claims. Over the next year, litigation over attorney fees and costs *651 ultimately resulted in entry of a supplemental judgment awarding plaintiffs nearly $1 million in fees.

Defendants appeal from the court's general and supplemental judgments. BBM asserts nine assignments of error arising from class certification, summary judgment rulings for plaintiffs on the ORLTA claims, an order directing defendants to bear the costs of class notice, the court's order striking defendant's “good faith” affirmative defense, and the attorney fee award. In separate briefing, B & J and Berman assert seven assignments of error arising from the piercing trial. **2 Because we conclude that the trial court erred as to several of its legal rulings that occurred early in the litigation, we reverse and remand the general judgment for further proceedings. Specifically, we conclude that the trial court erred (1) in certifying a 10-year class for plaintiffs’ claims under ORS 90.315(4) (2011), a ruling which was based on the court's conclusion that a discovery rule applied to the statute of limitations for plaintiffs’ ORLTA claims, ORS 12.125, as described in BBM's second assignment of error; (2) in granting partial summary judgment to plaintiffs on the issue of BBM's liability under ORS 90.315(4) (2011) for its

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rate billing practices, a ruling that was due to the court's conclusion that BBM violated ORS 90.315(4) (2011) as a matter of law when it charged tenants a higher kilowattper-hour (kWh) rate for electricity than the electricity utility had charged BBM, as described in BBM's first assignment of error; and (3) in granting partial summary judgment to plaintiffs on the issue of damages under ORS 90.315(4) (2011) based on its erroneous interpretation of the damages provision in ORS 90.315(4)(e) (2011), as described in BBM's seventh assignment of error.

We also write to address several rulings that we conclude were not erroneous—specifically, the court's grant of partial summary judgment to plaintiffs on the issue of BBM's liability under ORS 90.315(4) (2011) for its “meter reading fee,” a ruling which was based on its conclusion that BBM's $10 meter reading fee violated ORS 90.315(4) (2011) as a matter of law, as described in BBM's second assignment of error, and the court's grant of partial summary *652 judgment to plaintiffs on their retaliation claim, a ruling which was based on the court's conclusion that BBM's rent increase constituted retaliation under ORS 90.385 as a matter of law, as described in BBM's fifth assignment of error. We also conclude that, to the extent that the court erred as alleged in BBM's sixth assignment of error in striking BBM's good faith defense, any error was harmless for the reasons explained below. BBM's eighth assignment of error, which asserts that the trial court erred in granting partial summary judgment to plaintiffs on the issue of calculating retaliation damages under ORS 90.375, is undeveloped in part and unpreserved in part, as explained in greater detail below, and we thus reject it. BBM's third assignment of error depends on the argument that the court erred in granting partial summary judgment to plaintiffs on any theory of BBM's liability under ORS 90.315(4) (2011), and we reject that assignment of error because we reject the argument it depends on. BBM's fourth assignment of error is mooted by our conclusion that the trial court erred in certifying a 10-year class. Thus, we do not further discuss BBM's third and fourth assignments of error.

We also do not address the assignments of error raised by defendants B & J and Berman that pertain to the piercing trial that followed the court's legal rulings addressed above, because we are not persuaded that those issues would necessarily arise in the same way and with the same factual evidence on remand. We reverse the general judgment in this case due to other legal errors, returning this case to a posture that existed well before the piercing trial occurred.

On remand, BBM's ultimate liability to plaintiffs will be

significantly reduced, and assuming that plaintiffs still pursue a piercing claim under those circumstances, the issues presented to the court may be markedly different as well.

Finally, we do not address BBM's ninth assignment of error regarding plaintiffs’ attorney fee award. We reverse the court's supplemental judgment as a matter of law because we are reversing the general judgment to which that supplemental judgment applies. See ORS 20.220(3)(a) (“[w]hen an appeal is taken from a judgment under ORS 19.205 to which an award of attorney fees or costs and disbursements *653 relates[, i]f the appellate court reverses the judgment, the award of attorney fees or costs and disbursements shall be deemed reversed”). **3 Because BBM's assignments of error implicate varying standards of review as to the facts, we do not provide facts relevant to the litigation as a whole, but instead detail any facts relevant to a given assignment of error within our discussion of that issue. BBM's assignments of error do not track the chronological development of the litigation in the trial court, and we do not attempt to address each assignment in precise chronological order either. Instead, we organize our discussion into the three main overarching topics at issue in BBM's appeal. We begin with the court's class certification ruling, in which the court applied a discovery rule to the oneyear statute of limitations in ORS 12.125. We then address the court's summary judgment rulings on liability and damages for plaintiffs’ utility billing claims under ORS 90.315(4) (2011). Lastly, we address the court's summary judgment and ORCP 21 E(2) rulings relevant to plaintiffs’ retaliation claim under ORS 90.385 and BBM's affirmative defense thereto.

I. ORS 12.125 STATUTE OF LIMITATIONS AND BBM'S SECOND ASSIGNMENT OF ERROR We begin by addressing BBM's contention that the trial court erred when it certified a 10-year class for plaintiffs’ utility billing claims, a ruling which depended on the court's conclusion that the one-year statute of limitations for ORLTA claims, ORS 12.125, includes a discovery rule that tolls the limitation period until a tenant knew or reasonably should have known that they had a cause of action under the ORLTA. That argument constitutes the bulk of BBM's second assignment of error. 3 We review the trial court's ruling for errors of law. Waxman v. Waxman & Associates, Inc., 224 Or App 499, 503, 198 P3d 445 (2008).

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*654 The only relevant facts are procedural. In the trial court, the parties agreed that ORS 12.125 set a one-year limitations period applicable to plaintiffs’ ORLTA claims but disagreed on whether ORS 12.125 incorporated a discovery rule. While plaintiffs contended that their ORLTA claims were subject to a discovery rule, BBM contended that they were not and asserted that plaintiffs “should be barred from bringing their [O]RLTA claims and defining any alleged class for the [O]RLTA claims for any period of time greater than [one] year prior to the filing of the complaint.”

After briefing and argument on the issue, the trial court issued a letter opinion in which it stated that the requirements for class certification had been met and that a discovery rule applied to toll the applicable statute of limitations. However, the court relied on ORS 12.110(1), a provision applicable to tort claims that neither party had cited as controlling. In its later order certifying a 10-year class for the electricity billing claims, the court restated that “[t]he statute of limitations applicable to the ORLTA claims is one year pursuant to ORS 12.125” and “[t]he discovery rule shall apply to toll the applicable statute of limitations relating to the ORLTA.” On appeal, the parties reprise their arguments made to the trial court below. BBM contends that the text, context, and legislative history of ORS 12.125 “support the argument that the legislature did not intend for ORS 12.125 to embody a discovery rule.” Plaintiffs contend the opposite.

“The existence of a discovery rule cannot be assumed, but rather must be embodied in the applicable statute of limitations.” Rice v. Rabb, 354 Or 721, 726, 320 P3d 554 (2014). Thus, the parties’ arguments present a question of statutory interpretation to which we apply our familiar methodology, considering the text, context, and any relevant legislative history we deem helpful. State v. Gaines, 346 Or 160, 171-72, 206 P3d 1042 (2009). We apply that methodology to determine whether the legislature intended to incorporate a discovery rule in ORS 12.125, and thus begin by examining the text and context of that statute as well as any case law previously interpreting it. Rice, 354 Or at 726, 320 P.3d 554. **4 *655 We begin with the statute at issue. ORS 12.125 states that “[a]n action arising under a rental agreement or ORS chapter 90 shall be commenced within one year.” On its face, then, nothing in the plain text of ORS 12.125 states explicitly that the legislature intended for that limitations period to begin when the plaintiff discovers or should have

discovered the harm, rather than when the facts necessary for the plaintiff to prove their claim have occurred. We have generally stated that, “when the legislature intends to subject a statute of limitations to a discovery rule, it knows how to make its intent to do so clear.” Waxman, 224 Or App at 511, 198 P.3d 445; see also, e.g., ORS 12.135(3)(a)(A) (providing that specified actions must be commenced before the earliest of two years “after injury or damage is first discovered or in the exercise of reasonable care should have been discovered”).

However, “the absence of an express discovery provision * * * is not dispositive.” Rice, 354 Or at 730, 320 P.3d 554 (listing cases where the Supreme Court applied a discovery rule absent explicit language). Notably, the Supreme Court has interpreted the word “accrue” to incorporate a discovery rule in many circumstances. Id. at 728, 320 P.3d 554. As a result, case law establishes that tort claims generally “accrue” when the “plaintiff obtain[s] knowledge, or reasonably should have obtained knowledge of the tort committed upon her person by defendant.” Berry v. Branner, 245 Or 307, 316, 421 P2d 996 (1966).

Plaintiffs first defend the trial court's ruling by contending that the plain language of ORS 12.125 includes a discovery rule via “accrual” language. As we understand it, plaintiffs assert that, in specifying that ORS 12.125 applies to “[a]n action arising under a rental agreement or ORS chapter 90,” the legislature intended for the term “arising” to function as “accrual” language that communicated a discovery rule.

(Emphasis added.) That argument appears to rely on the Berry opinion's definition of the word “accrue” as “to arise, to happen to come into force or existence.” 245 Or at 311-12, 421 P.2d 996 (emphasis added). Plaintiffs further claim that our opinion in Abraham v. Kendall, 69 Or App 341, 686 P2d 428 (1984), already established that ORS 12.125 includes “accrual” language that incorporates a discovery rule. *656 We reject that argument. In specifying that “[a]n action arising under a rental agreement or ORS chapter 90 shall be commenced within one year,” ORS 12.125 uses the word “arising” as part of the phrase “arising under.” (Emphasis added.) That phrase designates the variety of claims to which the statute is applicable—those arising from a breach of a rental agreement or a violation of ORS chapter 90. As used here, the word “arise” means “to originate from a specified source.” Webster's Third New Int'l Dictionary 117 (unabridged ed. 2002); see also Waldner v. Stephens, 345 Or 526, 540, 200 P3d 556 (2008) (“Combining the ordinary meaning of ‘arise’ (‘to originate from a specified source,’

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‘to come into being’) and ‘under’ (‘in accordance with’), we think that the phrase ‘action arising under a rental agreement or [the ORLTA]’ is most naturally read as applying when the action itself is authorized by, or brought in accordance with, one of those two sources.” (Footnotes and emphasis omitted.)).

Further, our opinion in Abraham does not support plaintiffs’ argument. That case involved an alleged oral contract in which the plaintiff agreed to lease a space in defendant's mobile home park on a month-to-month basis and the defendant agreed to obtain certain county permits for the plaintiff. 69 Or App at 343, 686 P.2d 428. The discussion in Abraham that plaintiffs cite does not address whether a discovery rule applies to ORS 12.125—although we framed the issue as when the plaintiff's cause of action “accrued,” our discussion was clearly focused on determining when the defendant breached the alleged oral contract to obtain the permits, and we did not discuss or consider whether a discovery rule applied to the claim. Id. at 346, 686 P.2d 428.

That approach was consistent with the well-settled principle that “a contract claim accrues on breach.” Waxman, 224 Or App at 512, 198 P.3d 445; see also Romero v. Amburn, 323 Or App 410, 415, 523 P3d 1135 (2022) (summarize the case law supporting that principle going back “more than 50 years”). 4 In other words, Abraham *657 does not support plaintiffs’ contention that ORS 12.125 contains “accrual” language that implicates a discovery rule. **5 Plaintiffs next contend that ORS 12.125 is subject to a discovery rule by operation of ORS 12.010, and that contention presents a closer issue. Our precedent establishes that, even when a statute of limitations does not contain a discovery rule on its face, the statute may incorporate a discovery rule by operation of ORS 12.010, the introductory statute to ORS chapter 12. See Rice, 354 Or at 728, 730, 320 P.3d 554. ORS 12.010 states that “[a]ctions shall only be commenced within the periods prescribed” in ORS chapter 12, “after the cause of action shall have accrued, except where a different limitation is prescribed by statute.” (Emphasis added.) A claim “accrue[s]” under ORS 12.010 when the “plaintiff obtained knowledge, or reasonably should have obtained knowledge” of the claim. Rice, 354 Or at 728, 320 P.3d 554.

In Rice, the Supreme Court determined that ORS 12.010 may attach a discovery rule to other ORS chapter 12 statutes of limitations that lack language specifying when the limitations period begins to run. Rice, 354 Or at 728, 320 P.3d 554.

There, the court considered ORS 12.080(4), the statute of limitation for conversion and replevin claims, which declares only that such actions “shall be commenced within six years.”

The court concluded that ORS 12.080(4) did “not specify when the limitation begins to run” and therefore “f[ell] under the purview of ORS 12.010.” Rice, 354 Or at 728, 320 P.3d 554. As a result, the court read ORS 12.080(4) and ORS 12.010 together to require that relevant actions be commenced within six years from the point in time when the action “accrued” pursuant to ORS 12.010, or when “plaintiff obtained knowledge, or reasonably should have obtained knowledge of the tort committed upon her person by a defendant.” Id. In the years since Rice, we have attached the discovery rule in ORS 12.010 to a number of other statutes of limitations in ORS chapter 12 by following the same analysis. See Hayes Oyster Co. v. DEQ, 316 Or App 186, 200, 504 P3d 15 (2021), rev. den, 369 Or 507, 507 P.3d 271 (2022) (attaching discovery rule in ORS 12.010 to limitation period in ORS 12.140); Hammond v. Hammond, 296 Or App 321, 334, 438 P3d 408 (2019) (attaching discovery rule in ORS 12.010 to 12.050); *658 Tavtigian-Coburn v. All Star Custom Homes, LLC, 266 Or App 220, 222, 337 P.3d 925 (2014) (attaching discovery rule in ORS 12.010 to ORS 12.080(3)).

Discerning whether ORS 12.010 attaches a discovery rule to ORS 12.125 seems like a simple question on first blush.

ORS 12.125 is a statute of limitations in ORS chapter 12, and it does not contain language specifying when the limitations period begins to run, directing only that “[a]n action arising under a rental agreement or ORS chapter 90 shall be commenced within one year.” By its plain language, ORS 12.125 is similar to other statutes of limitations that include a discovery rule by operation of ORS 12.010. See ORS 12.050; ORS 12.080(3) - (4); ORS 12.140.

However, defendant correctly observes that ORS 12.125 was placed in ORS chapter 12 by the Office of Legislative Counsel. See Vollertsen v. Lamb, 302 Or 489, 495-96, 732 P2d 486 (1987) (explaining that ORS 12.125 was originally passed as Senate Bill (SB) 159, section 39 (1973)—part of the same bill that codified the original ORLTA in ORS chapter 90—but that “[d]uring the process of compilation for inclusion in the Oregon Revised Statutes, Legislative Counsel moved this section to chapter 12”). Proceeding from that fact, defendant argues that there is no evidence that the legislature intended for ORS 12.125 to be codified in ORS chapter 12, and therefore no evidence that the legislature intended for ORS 12.010 to apply a discovery rule to ORS 12.125. In

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response, plaintiffs contend that, “[i]f the legislature did not intend ORS 12.125 to be treated as a ‘period prescribed in’ ORS chapter 12 per ORS 12.010, it could have indicated so or moved it back to ORS chapter 90.” Because the legislature never amended ORS 12.125 in such a way despite opportunities to do so, plaintiffs contend that “ORS 12.125 is on equal footing with the other statutes of limitation contained in ORS chapter 12.” **6 We note first that the lack of legislative action moving ORS 12.125, or otherwise amending its language, is not particularly compelling evidence that the legislature intended for ORS 12.010 to attach a discovery rule to ORS 12.125.

See Berry, 245 Or at 311, 421 P.2d 996 (“Legislative inaction is a weak reed upon which to lean in determining legislative *659 intent.”). However, we understand plaintiffs to essentially contend that the legislative history of ORS 12.125 is insufficient to overcome our case law that ORS 12.010 applies a discovery rule to ORS chapter 12 statutes of limitations that look like ORS 12.125. Indeed, recent cases applying ORS 12.010 to other statutes of limitations have not analyzed how those statutes came to be codified in ORS chapter 12; it was enough that they simply were statutes of limitations in ORS chapter 12 that lacked “triggering event” language. See, e.g., Hayes Oyster Co., 316 Or App at 200, 504 P.3d 15 (“Because the catch-all statute, ORS 12.140, falls within the scope of ORS 12.010, we regard the discovery rule applicable.” (Footnote omitted.)).

Despite those factors, however, a review of the legislative history of ORS 12.125 leads us to conclude that the legislature did not intend for ORS 12.010 to apply a discovery rule to ORS 12.125. To explain why, we summarize the legislative history of both statutes. We start by considering ORS 12.010, which predated the enactment of the ORLTA and ORS 12.125.

ORS 12.010 has roots as one of Oregon's oldest statutes.

The statute that would become ORS 12.010 was first passed during the Second Legislative Assembly in 1862 and was part of the first Code of Civil Procedure. An Act to Provide a Code of Civil Procedure, Or. Laws 1862, ch. I, title II, § 3, compiled in General Laws of Oregon, Civ Code, ch 1, title II, § 3, p. 140 (Deady 1845-1864) (“Actions at law shall only be commenced within the periods prescribed in this title, after the cause of action shall have accrued; except where, in special cases a different limitation is prescribed by statute.”). 5 It has remained largely unchanged ever since. See Rice, 354 Or at 726 n 7, 320 P.3d 554 (although ORS 12.010

has “undergone slight modification and renumbering” since 1862, “the relevant operative text remains the same”). Chapter I, title II of the original Code of Civil Procedure was organized in much the same way as today's ORS chapter 12—section 3 *660 introduced the title, then various provisions defined the limitation periods for certain categories of actions. Like ORS 12.010, many of those first statutes of limitations remain largely the same today. See, e.g., General Laws of Oregon, Civ Code, ch 1, title II, § 6(2), p. 141 (Deady 1845-1864) (defining a six-year limitation period for actions “upon a liability created by statute, other than a penalty or forfeiture,” today codified as ORS 12.080(2)); General Laws of Oregon, Civ Code, ch 1, title II, § 6(4), p. 141 (Deady 1845-1864) (defining a six-year limitation period for actions “for taking, detaining or injuring personal property, including an action for the specific recovery thereof,” today codified as ORS 12.080(4)).

Thus, when the legislature originally created the predecessor to ORS 12.010 stating that actions “shall be commenced within the periods prescribed in this title,” it intended for that provision to apply to the statutes of limitations in chapter I, title II of the same act. Although the legislature surely contemplated that new statutes of limitations could become part of title II due to future lawmaking, section 3 originally applied to a set collection of statutes of limitations. **7 With that in mind, we turn to ORS 12.125. ORS 12.125 was first passed in 1973 as part of SB 159, which created the ORLTA. When the bill was first introduced, however, it did not contain a statute of limitations provision applicable to the causes of action the bill created. The Senate Committee on Local Government and Urban Affairs amended the bill to add what became section 39, providing that “[a]n action arising under sections 1 to 35 of this Act shall be commenced within one year.” See Exhibit 1, Senate Local Government & Urban Affairs Committee, SB 159, March 26, 1973 (memorandum and adopted amendments to SB 159). The House Committee on Local Government and Urban Affairs later adopted an amendment to extend the statute to also cover actions under a rental agreement. See Minutes, House Local Government & Urban Affairs Committee, SB 159, Jun. 1, 1973, 4-5 (adopting proposed amendments dated May 18, 1973). In its final form, section 39 stated: “An action arising under a rental agreement or sections 1 to 33 of this Act shall be commenced within one year.” Or. Laws 1973, ch. 559, § 39. *661 The legislative history to SB 159 contains little background on the provision, presumably because it was part of a much larger bill. The record notes only that section 39 institutes a “short” one-year limitations period and “was

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added at the suggestion of Senator John Burns [to] prevent landlords and tenants from dragging out ancient history in a dispute between them.” Explanation of Engrossed SB 159, House Local Government & Urban Affairs Committee, SB 159, May 18, 1973, 8. We see no indication that the legislature ever discussed whether a discovery rule would or should apply.

Most of the ORLTA created new provisions of law, and although there is some evidence that legislators may have expected that the act would “replace” the existing landlordtenant provisions in ORS chapter 91, the final act did not specify that any of the provisions were “added to and made a part of” any preexisting chapter. See Exhibit 2, Senate Local Government & Urban Affairs Committee, SB 159, Mar. 20, 1973 (memorandum on proposed amendments to SB 159) (explaining that the act “would replace ORS [chapter] 91”); Or. Laws 1973, ch. 559 (specifying only that act “creat[es] new provisions”). This is important, because the legislature knew how to specify that a provision should be added to and made a part of a certain chapter or series, yet did not take that action here. See, e.g., Or. Laws 1973, ch. 694, § 21 (in legislation from same year, specifying that “[s]ections 22 to 25” of act relating to parole procedures “are added to and made a part of ORS 144.310 to 144.400”); Or. Laws 1971, ch. 285, § 1 (specifying that “[s]ection 2” of act relating to ad valorem taxation “is added to and made a part of ORS chapter 307”).

It then fell upon the Office of Legislative Counsel to codify the new law into the Oregon Revised Statutes. See ORS 173.160 (explaining that Legislative Counsel “prepar[es] editions of the statutes for publication and distribution”). As part of its statute preparation duties, Legislative Counsel may renumber or rearrange sections so long as those changes do “not alter the sense, meaning, effect or substance of any Act.” ORS 173.160. Absent direction from the legislature that the provisions were “added to and made a part of” any *662 specific chapter or series, Legislative Counsel codified most of the new Act in ORS chapter 91 (which was later renumbered to ORS chapter 90) but codified the statute of limitations provision into ORS chapter 12. See Vollertsen, 302 Or at 495-96, 732 P.2d 486 (explaining that history).

Thus, there is no evidence that the legislature intended for the ORLTA statute of limitations to be codified in ORS chapter 12 or subject to the discovery rule in ORS 12.010. Not only did the legislature know how to make such an intent clear, but it had also used the required language to explicitly add another

statute of limitations to ORS chapter 12 in the prior legislative session. See Or. Laws 1971, ch. 664 (specifying that sections that later became the original version of ORS 12.135 “are added to and made a part of ORS 12.070 to 12.260”). In the case of ORS 12.135, including the “added to and made a part of” language means that ORS 12.135 is part of ORS chapter 12 for purposes of other provisions that broadly apply to ORS chapter 12. Here, the legislature could have made ORS 12.125 subject to ORS 12.010 by using the “added to and made a part of” convention but took no such action. **8 Because the placement of the ORLTA statute of limitations in ORS chapter 12 was the result of an organizational decision by Legislative Counsel, and not legislative action adding the statute to and making it a part of ORS chapter 12, we cannot draw any legislative intention from the placement of ORS 12.125 within ORS chapter 12.

Legislative Counsel cannot “alter the sense, meaning, effect or substance of any Act.” ORS 173.160. Legislative Counsel's editorial actions in assigning an enacted law an ORS number within a certain chapter does not mean that the law is therefore subject to other general provisions that apply to that chapter; that sort of effect, when it occurs, must be the result of legislative action. See State v. Burris, 370 Or 339, 354 n 10, 518 P3d 891 (2022) (“A statute has the effect of falling within a series only if the legislature says that it falls within the series.”). Thus, we conclude that ORS 12.125 is not affected by the language in ORS 12.010 applicable to limitations “periods prescribed in this chapter.” *663 Finally, we conclude that Rice and its progeny do not mandate that any statute of limitations in ORS chapter 12 that lacks triggering language is subject to a discovery rule by operation of ORS 12.010, regardless of other factors.

Rice, Tavtigian-Coburn, Hammond, and Hayes Oyster Co. all involved statutes of limitations that were part of the 1862 Code of Civil Procedure that first enacted the predecessor to ORS 12.010. See Rice, 354 Or at 723, 320 P.3d 554 (applying discovery rule in ORS 12.010 to 12.080(4), formerly chapter I, title II, section 6(4) of 1862 Code); Hayes Oyster Co., 316 Or App at 200, 504 P.3d 15 (applying discovery rule in ORS 12.010 to 12.140, formerly chapter I, title II, section 11 of 1862 Code); Hammond, 296 Or App at 334, 438 P.3d 408 (applying discovery rule in ORS 12.010 to 12.050, formerly chapter I, title II, section 4(1) of 1862 Code); TavtigianCoburn, 266 Or App at 222, 337 P.3d 925 (applying discovery rule in ORS 12.010 to 12.080(3), formerly chapter I, title II, section 6(3) of 1862 Code). The legislature's intent for those statutes of limitations to be subject to and interact with ORS

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12.010 was clear. In other words, Rice and its progeny do not imply that the question whether ORS 12.010 attaches a discovery rule to a certain statute of limitation is determined only by where the statute was codified and whether it lacks relevant triggering language. As to a statute like ORS 12.125, the lack of any legislative intent for the statute to be added to and made a part of ORS chapter 12 controls over those other considerations.

For those reasons, we conclude that a discovery rule does not apply to ORS 12.125. In the absence of a discovery rule, a limitations period begins to run when every fact necessary for the plaintiff to prove the elements of their claim has occurred and the plaintiff has a right to sue. See Stupek v. Wyle Laboratories Corp., 327 Or 433, 438, 963 P2d 678 (1998) (so stating). As to plaintiffs’ ORS 90.315(4) (2011) claims that fall under the one-year statute of limitations in ORS 12.125, the limitations period began to run when the relevant billing violations occurred. Thus, the trial court erred in certifying a 10-year class for plaintiffs’ claims under ORS 90.315(4) (2011). 6

*664 II. PLAINTIFFS’ ORS 90.315(4) (2011) CLAIMS AND BBM'S FIRST AND SEVENTH ASSIGNMENTS OF ERROR A. BBM's Liability under ORS 90.315(4) (2011) and First Assignment of Error We next address BBM's first assignment of error, in which it contends that the trial court erred “when it granted summary judgment to plaintiffs on their ORS 90.315(4) [(2011)] claims.” That ruling was based on the trial court's legal conclusions that (1) to the extent that BBM charged residents a higher kWh rate for electricity than BBM was billed by the utility provider, Portland General Electric (PGE), that practice violated ORS 90.315(4) (2011); and (2) BBM's practice of charging residents a meter reading fee violated ORS 90.315(4) (2011). On review, we view the evidence, and all reasonable inferences that may support it, in the light most favorable to BBM as the nonmoving party to determine whether there are any genuine issues of material fact and whether plaintiffs were entitled to judgment as a matter of law. Day v. Day, 299 Or App 460, 461, 450 P3d 1 (2019).

In so doing, we first conclude that the trial court erred in granting summary judgment to plaintiffs on their rate claim, as plaintiffs were not entitled to judgment as a matter of law on that claim. However, we conclude that the trial court did

not err in granting plaintiffs’ summary judgment motion on the meter reading claim. **9 We take the relevant facts from the summary judgment record. 7 BBM operated a 158-site recreational vehicle (RV) park in Salem. The park's rental agreements with its residents varied, but stated either that residents were responsible for “electric” or “Electric As Used,” depending on the specific tenant and when they signed their agreement, as an extra charge paid to BBM each month in addition to rent. Prior to the filing of plaintiffs’ complaint, those agreements did not explain how electricity charges would be calculated or disclose fees for meter reading. *665 Each of the park's 158 sites were separately metered for electrical service by individual meters that were owned

by BBM. Approximately six to 12 individual site meters fed into one PGE-owned submeter, and a total of 16 PGE-owned submeters serviced all 158 sites at the park. PGE billed BBM monthly for the electricity delivered to each PGE-owned submeter at a kWh rate that “varie[d] each month, and varie[d] monthly between the submeters.” BBM contended that PGE's rates ranged from $0.09 to $0.12 per kWh during the relevant time period.

BBM, in turn, billed residents on a monthly basis for the electricity used at individual tenant sites. BBM's process for determining tenant electricity bills involved the park's maintenance worker reading each individual site meter monthly and computing the electricity used by subtracting the prior month's meter reading from the current month's reading.

Once the kWh usage for the month was computed, that number was multiplied by “the current kWh rate.” Finally, a $10 “meter fee” was added to reach the total tenant electricity charge amount. The meter fee was intended to cover BBM's costs “associated with reading the meters, the costs associated with installing the individual tenant site meters, lines and pedestals as well as the repairs and upkeep for the individual tenant meters.” 8 The “current kWh rate” that BBM charged its residents was not the current rate PGE charged BBM for electricity for the relevant month or submeter, but instead a $0.12 “flat kWh rate” set by the park. BBM contended that the different billing periods used by PGE and the park, the different kWh rates assessed by PGE for different submeters, and the different kWh rates assessed by PGE from month to month combined to make computing each resident's electrical fee based on the actual kWh rate PGE charged for the resident's usage “an

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administrative and accounting burden [that] would result in a high likelihood of error in the calculations.” *666 BBM's flat kWh rate was reviewed annually by analyzing the total amount billed to BBM by PGE for the 16 submeters in the previous year and the total amount paid by residents for electricity in that year. Despite the higher rate, the park did not make a profit on electricity, apparently because each PGE meter recorded more electricity use in kilowatt hours than the total of all the individual submeters that fed into it. Although the parties disputed the reason for that discrepancy, they agreed that it existed. BBM “attempt[ed] to lose a slight amount of money each year” and had a “longstanding policy to charge its tenants slightly less for their electricity expenses” than what BBM was charged

by PGE. **10 In the trial court, plaintiffs moved for partial summary judgment on two legal issues central to its ORS 90.315(4) (2011) claims: that charging tenants a higher kWh rate than BBM was billed by the utility and charging a meter reading fee both violated ORS 90.315(4) (2011) as a matter of law. BBM contended that neither did. Specifically, BBM contended that ORS 90.315(4) (2011) did not require it to bill tenants the same kWh rate as PGE had billed BBM and instead only required that “the landlord does not make a profit” on electricity. As to the meter reading fee, BBM contended that ORS 90.315(4) (2011) was not relevant to the charge at all because it was for BBM's services “in accounting for the electricity used by the tenant.” After receiving briefing and argument, the trial court granted plaintiffs’ motions. The parties essentially repeat their summary judgment arguments on appeal. 9 Whether the inflated kWh rate and “meter fee” billing practices at issue in this case violated ORS 90.315(4) (2011) as a matter of law are questions of statutory interpretation for which we again turn to the familiar framework laid out in Gaines, 346 Or at 171-72, 206 P.3d 1042, beginning with the relevant statute. ORS 90.315 (2011) defines a “[u]tility or *667 service,” as used in the statute, specifying that it “includes but is not limited to electricity, natural or liquid propane gas, oil, water, hot water, heat, air conditioning, cable television, direct satellite or other video subscription services, Internet access or usage, sewer service and garbage collection and disposal.” ORS 90.315(1)(b) (2011). ORS 90.315(4) (2011) then addresses certain landlord obligations regarding utility billing. It states, in part:

“(a) Except for tenancies covered by ORS 90.505 to 90.840, if a written rental agreement so provides, a landlord may require a tenant to pay to the landlord a utility or service charge that has been billed by a utility or service provider to the landlord for utility or service provided directly to the tenant's dwelling unit or to a common area available to the tenant as part of the tenancy. A utility or service charge that shall be assessed to a tenant for a common area must be described in the written rental agreement separately and distinctly from such a charge for the tenant's dwelling unit. Unless the method of allocating the charges to the tenant is described in the tenant's written rental agreement, the tenant may require that the landlord give the tenant a copy of the provider's bill as a condition of paying the charges.

“(b) Except as provided in this paragraph, a utility or service charge may only include the cost of the utility or service as billed to the landlord by the provider. A landlord may add an additional amount to a utility or service charge billed to the tenant if [the charge is for certain cable, satellite, video, or internet services not relevant here.]”

ORS 90.315(4) (2011) (emphases added).

We first consider the inflated kWh rate billing issue.

Pursuant to ORS 90.315(4)(a) (2011), because BBM's rental agreements provided that residents were responsible for “electric” or “Electric As Used” (depending on the rental agreement at issue), BBM could require a resident to pay a “utility or service charge” that had been billed by PGE to BBM for electricity (a “utility”) “provided directly to the tenant's [RV site or] dwelling unit.” See ORS 90.100(12) (“ ‘Dwelling unit’ regarding a person who rents a space for a * * * recreational vehicle * * * means the space rented * * *.”). And, pursuant to ORS 90.315(4)(b) (2011), that “utility or *668 service charge” could “only include the cost” of the electricity “as billed” by PGE to BBM. ORS 90.315(4) (2011) does not mandate that a landlord charge the exact same rate it is billed by a utility—instead, the landlord is only required to charge the exact same “cost.” The “cost” of something is generally “the amount or equivalent paid or given or charged

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or engaged to be paid or given for anything bought or taken in barter or for service rendered : CHARGE, PRICE.” Webster's at 515. Here, the kWh rate PGE charged to BBM for resident site electricity was but one component of the overall cost charged. **11 The legislative history of ORS 90.315(4) (2011) supports that reading. The provision was first passed in 1997 as part of legislation that created new statutes and amended large swaths of the ORLTA. See Or. Laws 1997, ch. 577, § 16. According to the bill's principal drafter, John Van Landingham, the utility provisions at issue here were intended to ensure that “the landlord cannot add on to the charge” or “include any capital costs incurred by a landlord, such as installing a water system.” Exhibit O, House Commerce Committee, SB 675, May 29, 1997, 8 (accompanying comments by Van Landingham) (emphasis added). In subsequent years, the provision was subject to minor changes, but the focus remained on ensuring that landlords did not pass on more than the overall “cost” billed by the utility provider. 10 Further, we reject plaintiffs’ arguments that we consider the utility billing provisions in ORS 90.531 to 90.543 (2011) in interpreting ORS 90.315(4) (2011). Those statutes specifically address permissible utility billing methods for manufactured dwellings and floating home space tenancies and do not apply to BBM's RV park. See ORS 90.100(25) (2011) (“ ‘Manufactured dwelling’ does not include a recreational vehicle.”); ORS 90.120(5) (2011) (“Residential tenancies for *669 recreational vehicles * * * shall be subject to ORS 90.100 to 90.465.”); ORS 90.315(4)(a) (2011) (excepting “tenancies covered by ORS 90.505 to 90.840”).

Plaintiffs did not bring their claims under those statutes or raise them below, and the parties in fact agreed in the trial court that ORS 90.505 to 90.840 (2011) did not apply to BBM's RV park.

We are also not persuaded that those statutes provide relevant context for interpreting ORS 90.315(4) (2011). Indeed, those statutes provide specific guidelines for landlord utility billing for those tenancies, limiting landlords who seek reimbursement for utility service costs to three options: (1) including the costs in the rent, (2) separately billing tenants via pro rata apportionment based on a “master meter,” or (3) separately billing tenants based on the tenant's actual use as measured by their submeter “at a rate no greater than the average rate billed to the landlord by the utility or service provider, not including any base or service charge.” ORS

90.536(1), (2) (2011); ORS 90.532(1) (2011). However, we see no evidence that the legislature intended for those statutes to have any application outside of the manufactured dwelling and floating home tenancies they regulate. See also ORS 90.315(4)(a) (2011) (excepting “tenancies covered by ORS 90.505 to 90.840”).

In short, ORS 90.315(4)(a) and (b) (2011) ensure that a landlord does not upcharge a tenant for utilities beyond the “cost” that the landlord is billed by the provider. Those provisions do not require that a landlord must charge a tenant the exact same kWh rate for electricity that the landlord is itself billed by the utility. Of course, a landlord's use of an inflated kWh rate may lead to tenant bills that exceed the landlord's cost to the provider—in fact, that might be the most likely result of such a practice. But determining whether that is the case would depend on the facts. **12 In this case, plaintiffs did not allege, or later present facts in the summary judgment record, that BBM's inflated rate billing resulted in electricity charges to tenants that exceeded BBM's cost to PGE for that electricity, in violation of ORS 90.315(4) (2011). Instead, in the operative complaint at the time of their partial summary judgment motion, plaintiffs only alleged that BBM violated *670 ORS 90.315(4) (2011) when it “charged plaintiffs and class members a rate per kilowatt hour for electricity that was in excess of the rate defendants paid to PGE.” Because, as we concluded above, an inflated rate billing practice is not alone sufficient to violate ORS 90.315(4) (2011) as a matter of law, the trial court erred in granting partial summary judgment to plaintiffs on their rate claim.

We reach a different conclusion as to BBM's practice of adding a $10 “meter fee” or “meter reading fee” into tenant electricity charges, however. Again, under ORS 90.315(4) (2011), “a landlord may require a tenant to pay to the landlord a utility or service charge that has been billed by a utility or service provider to the landlord for utility or service provided directly to the tenant's dwelling unit,” and a utility charge for electricity “may only include the cost of the utility or service as billed to the landlord by the provider.” ORS 90.315(4)(a), (b) (2011). As we understand it, BBM's argument is that ORS 90.315(4) (2011) “does not prohibit or even address the meter fee” to recoup BBM's capital and administrative electrical costs, because, in BBM's view, the fee was not for PGE's electricity “provided directly to the tenant's dwelling unit,” but instead, for a service BBM provided.

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However, BBM misconstrues the relevant language. ORS 90.315(4) (2011) applies to the meter fee because it was a surcharge that BBM added into residents’ monthly electricity charges and not a cost passed on from PGE. BBM required tenants “to pay to the landlord a utility or service charge,” or electricity charge, “that ha[d] been billed by a utility or service provider to the landlord.” ORS 90.315(4)(a) (2011).

That charge was “for utility or service provided directly to the tenant's dwelling unit” rather than “a common area available to the tenant as part of the tenancy.” Id. Thus, BBM's electricity charges to tenants fell under ORS 90.315(4) (b) (2011) and could “only include the cost of the utility or service as billed to the landlord by the provider.” However, the charges were not limited as required. BBM added a meter reading fee into the tenant electricity charges to recoup its own capital and labor expenses, expenses which were not part of the “cost” of electricity “as billed” by PGE. That type of surcharge is the precise type of billing practice *671 that the legislature intended to prevent with ORS 90.315(4) (2011).

See Exhibit O, House Commerce Committee, SB 675, May 29, 1997, 8 (accompanying comments by Van Landingham) (explaining that “the landlord cannot add on to the charge” or “include any capital costs incurred by a landlord”). Thus, BBM's meter fee violated ORS 90.315(4) (2011), and the trial court did not err in granting summary judgment to plaintiffs on that issue.

B. Damages under ORS 90.315(4) (2011) and BBM's Seventh Assignment of Error We next turn to the arguments in BBM's seventh assignment of error, in which it contends that the trial court erred in granting plaintiffs’ motion for summary judgment on the issue of damages under ORS 90.315(4)(e) (2011). Under that provision, “[i]f a landlord fails to comply with paragraph (a), (b) or (c) of this subsection, the tenant may recover from the landlord an amount equal to one month's periodic rent or twice the amount wrongfully charged to the tenant, whichever is greater.” ORS 90.315(4)(e) (2011). Specifically, the court adopted plaintiffs’ view that ORS 90.315(4)(e) (2011) provided one month's rent as a remedy for each specific and repeated violation of ORS 90.315(4)(a) to (c) (2011), such that each tenant could receive as much as two month's rent for every month in which they were charged both an inflated kWh rate and meter fee. **13 We recently rejected that interpretation in Shepard Investment Group LLC v. Ormandy, 320 Or App 521, 514 P3d 1125, rev. allowed, 370 Or. 404, 518 P.3d 942 (2022). In that case, a landlord had violated two recently created provisions

of ORS 90.315(4): ORS 90.315(4)(b)(A), requiring that utility charges are billed to a tenant in writing, and ORS 90.315 (4)(b)(B), requiring that a landlord provide a tenant with a written explanation of the manner in which the utility provider assessed its charges and the manner in which the landlord allocated those charges among the tenants. Id. at 524-25, 514 P.3d 1125. The trial court in Shepard Investment Group LLC also concluded that the violations had been repeated every month over the course of a year every time the landlord billed the tenant for utilities absent the required writings. Id. Citing the remedy provision now numbered as *672 ORS 90.315(4)(f), the tenant argued that, because the landlord had “fail[ed] to comply with paragraph * * * (b)” 12 separate times, the tenant was entitled to recover “an amount equal to one month's periodic rent or twice the amount wrongfully charged to the tenant, whichever is greater” as a separate remedy for each of those 12 individual violations. Id. at 524, 514 P.3d 1125. The trial court agreed and awarded the tenant an amount equal to 12 months’ rent or nearly $10,000.

Id. at 525, 514 P.3d 1125.

On the landlord's appeal, we construed the remedy provision and concluded that the legislature had not intended for it to provide “one month's periodic rent or twice the amount wrongfully charged” as a remedy each time a landlord “fail[ed] to comply” with the listed requirements. Id. at 530-31, 514 P.3d 1125. We noted that the plain language of the provision does not specify that it applies on a “per violation” or “per noncompliant billing” basis as the tenant had argued. Id. at 531, 514 P.3d 1125. Instead, the provision provides for the greater of two possible remedies if a tenant establishes that a landlord “fails to comply” with any of the listed requirements, language which plainly does not distinguish between the number of times a landlord violates the requirements. Id. at 530-31, 514 P.3d 1125. However, the provision still provides for an increased remedy when a tenant is “wrongfully charged” on a repeated basis if “twice the amount wrongfully charged to the tenant” is greater than “one month's periodic rent.” Id. at 530, 514 P.3d 1125. Applying that interpretation to the facts, we concluded that the tenant had been “wrongfully charged” $40 each month over 12 months, because each of those monthly utility charges had failed to comply with ORS 90.315(4)(b). Id. at 532, 514 P.3d 1125. Because twice the total amount wrongfully charged was greater than one month of the tenant's periodic rent, the tenant was entitled to “twice the amount wrongfully charged” or $960. Id.

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In accordance with our decision in Shepard Investment Group LLC, we agree with BBM that the trial court erred in granting partial summary judgment to plaintiffs on the issue of damages under ORS 90.315(4)(e) (2011) and conclude that plaintiffs were not entitled to two months’ rent for each month in which BBM violated ORS 90.315(4)(b) (2011). A tenant is not entitled to “an amount equal to one month's periodic rent or twice the amount wrongfully *673 charged to the tenant, whichever is greater” as a separate remedy for each individual billing over time that fails to comply with ORS 90.315(4) (b) (2011). Regardless of the total number of billings that “fail[ed] to comply” with ORS 90.315(4)(b) (2011), the court should only consider whether BBM “fail[ed] to comply with paragraph * * * (b),” and, if the answer is yes, award a tenant “an amount equal to one month's periodic rent or twice the amount wrongfully charged to the tenant, whichever is greater.” ORS 90.315(4)(e) (2011). In short, the trial court here erred in granting summary judgment to plaintiffs on the issue of calculating damages under ORS 90.315(4)(e) (2011).

III. PLAINTIFFS’ RETALIATION CLAIM AND BBM'S FIFTH AND SIXTH ASSIGNMENTS OF ERROR A. Plaintiffs’ Retaliation Claim and BBM's Fifth Assignment of Error Next, we consider BBM's fifth assignment of error, in which BBM assigns error to the trial court's ruling granting partial summary judgment to plaintiffs on their retaliation claim. As relevant here, ORS 90.385 prohibits a landlord from retaliating “by increasing rent” after “[t]he tenant has performed or expressed intent to perform any * * * act for the purpose of asserting, protecting or invoking the protection of any right secured to tenants under any federal, state or local law.” ORS 90.385(1)(f). **14 The facts relevant to the court's summary judgment ruling, viewed in the light most favorable to BBM, are as follows. In June 2013, approximately two months after plaintiffs filed this action, BBM issued a “30-day Written Notice of Change of Policies and Practices” to all current park residents, explaining that on July 29, 2013, BBM would stop charging tenants a “monthly $10.00 electricity service charge,” begin charging tenants a kWh electricity rate that was based on the average kWh rate charged by the utility for each billing cycle, and increase rent for all tenants by $20 per month. The notice stated that “[i]t has recently been brought to our attention that our RV sites are metered with electro-mechanical meters that consistently *674 read less

power used than the PG&E smart meters,” that BBM had “been losing money on electricity” for that reason, and that the billing changes were intended “to simplify billings, break even on electricity, and keep total rents down.” (Underscoring in original.) The notice ended by stating that “[i]t is our hope that these changes will only affect your monthly billings slightly, if at all.” Berman held three different meetings to announce the new billings policies to tenants. At the meetings, Berman explained to the tenants that the changes were “revenue neutral.”

Explaining the changes in a later deposition, Berman stated that “attorneys had impact” on his decision to produce the notice and hold the tenant meetings regarding the restructured billing practices and rent increase “specifically right then,” but that “the fact that [he] had been sued for charging a meter reading fee” had not been “a factor that went into that decision.” Acknowledging that the billing changes made some residents’ overall bills increase by “two, three bucks” a month, Berman stated that “I don't know any other way to do it * * * [to] be so far above board and compliant that I'm never having this discussion with [plaintiffs’ attorney] again.” In a later affidavit, Berman added that the park made the billing changes “because it was attempting to be more legally compliant in its practices, because it was engaging in protected settlement discussions, because the park had legitimate business reasons for the restructuring (as reflected in the notice to the tenants about the same) and it was attempting to meet Plaintiffs’ ORCP 32 H demands.” 11 Plaintiffs amended their complaint to add an additional claim for retaliation and moved for partial summary judgment on the claim, contending that “conduct admitted to by Defendants—raising rent as a result of the filing of *675 this lawsuit—constitutes unlawful retaliation under ORS 90.385.”

Citing Elk Creek Management Co. v. Gilbert, 353 Or 565, 303 P3d 929 (2013), plaintiffs contended that they had met the requirements of ORS 90.385 and proved that “the landlord made the decision to act because of the tenant's protected activity.” Specifically, plaintiffs pointed to a June 10, 2013 letter from BBM's attorney to plaintiffs’ counsel during settlement negotiations and Berman's deposition testimony as proof that BBM had admitted that the lawsuit motivated the rent increase.

In response, BBM argued that plaintiffs had not established retaliation as a matter of law. First, BBM contended that the statute did not apply at all, because the rent increase had accompanied decreases in other fees that made the overall

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changes “revenue neutral,” and because none of the current tenants at the time of the rent increase were yet involved in the litigation—only the Hathaways were named plaintiffs, they no longer resided at the park, and the court had yet to certify a class. BBM also argued that plaintiffs’ complaint was not the “but for” cause of the rent increase and that other factors had motivated the changes. **15 Additionally, BBM pointed to different settlement communication letters, this time those dated May 31 and July 11, 2013, from plaintiffs’ attorneys to BBM's counsel, as evidence that plaintiffs had brought their retaliation claim in bath faith. See ORS 90.130 (“[e]very duty under this chapter and every act which must be performed as a condition precedent to the exercise of a right or remedy under this chapter imposes an obligation of good faith in its performance or enforcement”). Specifically, BBM argued that plaintiffs “should not be entitled to the right to enforce ORS 90.385 or be entitled to damages under [ORS] 90.375 as a result of alleged retaliation. Defendants were negotiating with Plaintiffs in good faith pursuant to ORCP 32 H and 32 I at or around the time the Park changed its practices.

Additionally, counsel for Plaintiffs assured counsel for Defendants that Defendant was ‘free to increase rent’ in the present proceeding. In a letter from Counsel to Plaintiffs dated May 31, 2013, which counsel for Plaintiffs filed in support of their Motion for Leave to File its Second *676 Amended Complaint to add damages to the proceeding, and in discussing the meter reading fee being dropped, counsel stated: ‘My understanding from our discussion is that this fee will be dropped altogether. Obviously, defendant is free to increase rent, or, as I read the statute, disclose and include this charge as an explicit term in any new leases.’ Additionally, in June 11, 2013, correspondence from counsel for Plaintiffs, counsel for Plaintiffs stated that they ‘welcome[d] implementation of the curative steps outlined in your letter.’ (Plaintiffs’ June 11, 2013 correspondence was also previously filed in support of its Motion for Leave to File its Second Amended Complaint).

In this respect, Plaintiffs through their counsel, acted in bad faith by encouraging the changes proposed by counsel for Defendant through settlement negotiations, and even expressly stated that rent could be raised to address their legal concerns related to the meter reading fee, and then proceeded to file a retaliation claim after the park made its proposed changes.”

(Internal citations omitted.) That argument did not fashion ORS 90.130 as an affirmative defense, and BBM had not

pleaded ORS 90.130 as an affirmative defenses to the retaliation claim at that time.

Lastly, at the same time that BBM invoked settlement letters from plaintiffs’ counsel in its arguments, BBM moved to strike the settlement letter from BBM’s counsel that plaintiffs had included and referenced in their motion, arguing that it was evidence of statements made in compromise negotiations that was protected and inadmissible under OEC 408 to prove BBM's liability.

After receiving briefing and oral argument, the trial court made its rulings. First, the court granted defendant's motion to strike the letter from BBM's attorneys, concluding that it was inadmissible under OEC 408. The court then granted plaintiffs’ motion “to establish liability under ORS 90.385.”

The court explained: “Once the Defendants were no longer able to illegally overcharge tenants for electricity and meter reading fees, they chose to instead increase the rent. It is clear that this action was done in response and because of tenants’ filing this lawsuit. As a result, this court finds that Defendants *677 did in fact violate ORS 90.385 by retaliating when they raised rent by $20.”

In granting the motion, the trial court implicitly concluded that there was no genuine issue as to any material fact and that plaintiffs were entitled to prevail on the claim as a matter of law. See ORCP 47 C. **16 With that background in mind, we summarize the controlling law on this issue. As relevant here, ORS 90.385 prohibits a landlord from retaliating “by increasing rent” after the tenant has “made any complaint to the landlord that is in good faith and related to the tenancy”; “testified against the landlord in any judicial, administrative, or legislative proceeding”; or “performed or expressed intent to perform any other act for the purpose of asserting, protecting or invoking the protection of any right secured to tenants under any federal, state or local law.” ORS 90.385(1). There must be a causal connection between the landlord's action and the tenant's protected activity—specifically, the tenant must prove that the landlord made the decision to raise rent because of the tenant's complaint. Elk Creek Management Co., 353 Or at 574, 582, 303 P.3d 929. The reason for a landlord's decision is a question of fact. Id. at 584, 303 P.3d 929. Typically, the tenant must establish that, “but for” the protected activity, the landlord would not have made the decision to raise rent. Id. In the event that multiple factors motivated the decision but

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either operating alone would have been sufficient to cause it, a tenant may also prevail by proving that the tenant's protected activity was a “material and substantial factor” in the landlord's decision. Id. at 584-85, 303 P.3d 929. In neither instance is the tenant required to prove that the tenant's protected activity was the “sole” or “dominant” reason for the landlord's decision. Id. at 585, 303 P.3d 929. In other words, the tenant's protected activity need only be “a factor that made a difference in the landlord's decision.” Id. at 583, 303 P.3d 929.

We first address BBM's renewed argument that its rent increase was not retaliatory because no current tenant had asserted protected rights when the rent increase occurred. We reject that argument. The complaint asserted claims on behalf of “a Class consisting of * * * [a]ny person who, at any time during the ten[-]year period preceding the *678 date this lawsuit was filed,” had paid electricity bills from BBM that had been computed using the kWh rate and meter fee practices at issue in plaintiffs’ ORS 90.315(4) (2011) claims. The complaint made clear that a class that included current tenants intended to pursue class action litigation to assert its rights under the ORLTA, and by the time of the rent increase, at least two current tenants had actually participated in the action by declaring that BBM's ORLTA violations were ongoing.

Further, ORS 90.385(5) makes clear that “a complaint made by another on behalf of a tenant is considered a complaint by the tenant” for purposes of ORS 90.385. In that context, current tenants had “expressed intent” to assert their rights.

We are also not persuaded by BBM's contention that the rent increase did not violate ORS 90.385 because it was “revenue neutral.” ORS 90.385 states that “a landlord may not retaliate” by taking certain delineated actions, including “increasing rent,” after a tenant asserts its ORLTA rights. In short, the legislature chose to prohibit a landlord from responding to tenant complaints by raising rent, without any exception for rent increases as part of other fee restructuring that potentially also lowers other tenant costs. 12 We also reject BBM's contention that the trial court erred because “[t]here was an issue of fact on good faith.” Although plaintiffs did not address this particular argument, both in the trial court and on appeal, we nevertheless conclude that it does not provide BBM with a basis for reversal because it relies on a fundamental misunderstanding of the requirements of ORS 90.130.

As we have said before, the duty of good faith in ORS 90.130 applies to “every act that is a condition precedent to exercising a right or a remedy under the ORLTA.” Lopez v. Kilbourne, 307 Or App 301, 309, 477 P3d 14 (2020). As relevant here, because a tenant must bring a claim as a condition precedent to recovering a remedy for retaliation *679 pursuant to ORS 90.385, the tenant is obligated to bring that claim in good faith. See id.

Although the ORLTA defines “good faith” as “honesty in fact in the conduct of the transaction concerned,” ORS 90.100(19), ORS 90.130 is not so broad as to prohibit plaintiffs’ alleged conduct at issue here. The Supreme Court has explained that good faith under the ORLTA has a narrower meaning than the “broader concept of good faith that is frequently found in both statute and common law.” Eddy v.

Anderson, 366 Or 176, 188, 458 P3d 678 (2020). A tenant violates the ORLTA's obligation of good faith with respect to a claim “only if they acted dishonestly with respect to the allegation” in the claim, meaning that they alleged a claim “that they knew to lack merit.” Id. at 189, 458 P.3d 678 (“So long as they subjectively believed that the [claim] had merit, and so long as they did not knowingly fail to comply with any prerequisite for asserting their claim, they were entitled to bring it.”). For example, ORS 90.130 prevented tenants in an eviction proceeding who “deliberately” avoided personal service of a termination notice, and who in fact received a notice that was slipped under their door, from enforcing the statutory requirement for personal delivery of the notice. See Stonebrook Hillsboro, L.L.C. v. Flavel, 187 Or App 641, 69 P3d 807, rev. den, 335 Or 656, 75 P.3d 899 (2003). The duty of good faith does not function to deny a remedy to a tenant who subjectively believes that their claim has merit, but who otherwise engaged in unfair dealing or had “unclean hands” or a “malicious purpose.” Id.; see also Lopez, 307 Or App at 311, 477 P.3d 14 (explaining that ORS 90.130 did not bar tenant who lied on rental application from prevailing on defense to a later, unrelated eviction proceeding for nonpayment of rent). **17 Applying that law to the facts of this case, ORS 90.130 required that plaintiffs bring their retaliation claim in good faith, or with the subjective belief that the claim has merit.

For sure, several factual scenarios could have supported an argument that plaintiffs’ retaliation claim lacked good faith in its enforcement. As in Stonebrook Hillsboro, L.L.C., plaintiffs could not prevail if they had knowingly prevented or thwarted BBM's attempts to comply with ORS 90.385. ORS 90.130 also barred plaintiffs’ recovery if they subjectively believed their claim lacked merit, such as if *680 they knew that they

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had never made a protected complaint or if they knew that BBM had raised rent for a reason unrelated to the lawsuit.

None of those circumstances, or any other circumstances that would violate ORS 90.130, are present on these facts.

The extent of the record on the issue, viewed in the light most favorable to BBM, was limited to the following: In the first letter dated May 31, 2013, plaintiffs’ attorney welcomed BBM's cessation of the meter fee and added that “[o]bviously, defendant is free to increase rent, or, as I read the statute, disclose and include [the meter reading fee] as an explicit term in any new leases.

“Regardless, as long as defendant proposes a solution that complies with the statute and is fair to the class, we will likely agree to it.”

In the second letter, plaintiffs’ attorney “agree[d] with defendants’ proposal” to eliminate the meter fee and welcomed “cessation of the $10 per month charge,” if approved by the court, as a part of “implementation of the curative steps outlined in your [June 10, 2013] letter.” 13 At most, that evidence could support a finding that plaintiffs encouraged BBM's violation of ORS 90.385 with an improper motive to add more claims, and thus more damages, to their recovery. It does not, however, create an issue of fact as to whether plaintiffs had a good faith belief in the legitimacy of their claim. Again, ORS 90.130 is not so broad as to prohibit recovery by a tenant with unclean hands or malicious purpose, and as in Lopez, BBM has not presented an argument as to what “precise duty or condition precedent” plaintiffs were either “performing or enforcing” when they encouraged BBM's retaliatory rent increase in violation of ORS 90.385.

307 Or App at 311, 477 P.3d 14. “Without the identification of a duty or an act that is a condition precedent, the statutory duty of good faith does not apply.” Id. The ORLTA does not condition a tenant's right to bring a claim under ORS 90.385 on a requirement that the tenant not encourage the landlord's violation. Nowhere in the ORLTA are those rights and *681 duties tied together. As a result, we reject BBM's contention that a question of fact as to whether plaintiffs had acted in good faith precluded the trial court's grant of summary judgment to plaintiffs on their retaliation claim.

Lastly, BBM contends that an issue of fact as to the cause of or motivation behind the rent increase precluded summary judgment. As we explained earlier, a tenant must prove that the tenant's protected activity was a factor that made a difference in the landlord's decision. A tenant is not required to prove that the tenant's protected activity was the “sole” or “dominant” reason for the landlord's decision.

Although the reason for a landlord's decision to raise rent is generally a question of fact, we agree with the trial court that, even viewing the summary judgment record in the light most favorable to BBM and making all reasonable references in its favor, no objectively reasonable jury could conclude that plaintiffs’ class-action complaint was not a factor that made a difference in BBM's decision to raise rent. BBM raised rent as part of billing changes that also eliminated the meter fee and inflated kWh rate that were the subject of plaintiffs’ claims, changes which occurred only two months after plaintiffs filed their lawsuit. Berman stated that “attorneys had impact” on his decision to make the changes “specifically right then” and opined during deposition that “I don't know any other way to do it * * * [to] be so far above board and compliant that I'm never having this discussion with [plaintiffs’ attorney] again.” Perhaps most importantly, Berman also submitted an affidavit in which he asserted that the park made the billing changes “because it was attempting to be more legally compliant in its practices, because it was engaging in protected settlement discussions,* * * [and because] it was attempting to meet Plaintiffs’ ORCP 32 H demands.” Even viewed in the light most favorable to BBM, those statements constitute admissions by BBM and Berman that the class-action complaint was a factor that made a difference in the park's decision to institute the billing changes, one component of which was a $20 rent increase. **18 Further, Berman's singular statement that “the fact that [he] had been sued for charging a meter reading fee” *682 was not “a factor that went into [his] decision” to raise rent does not establish a material dispute of fact on causation sufficient to preclude summary judgment, even viewing the record in BBM's favor as we must. In response to plaintiffs’ summary judgment motion, BBM insisted that a number of purposes motivated the rent increase, including its efforts to meet plaintiffs’ demands, made pursuant to ORCP 32 H, that BBM remedy the alleged ORLTA violations raised in plaintiffs’ complaint. In other words, BBM took the legal position that it could be motivated by “Plaintiffs’ ORCP 32 H demands” while also simultaneously not being motivated by the tenants’ legal action to assert their rights more generally.

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Hathaway v. B & J Property Investments, Inc., --- P.3d ---- (2023) 325 Or.App. 648

But we do not agree that BBM's motivations can be parsed in such a way. BBM would not have been motivated to meet plaintiffs’ ORCP 32 H demands but for plaintiffs’ act of pursuing legal action against BBM in the first place.

Lastly, a plaintiff need not establish that their protected activity was the sole or dominant cause of the landlord's action. For that reason, BBM could not avoid summary judgment in plaintiffs’ favor by noting other causes that may also have motivated the change, such as its asserted “legitimate business reasons for the restructuring” and desire to “to simplify billings, break even on electricity, and keep total rents down.” Even if those asserted interests could plausibly constitute reasons for a landlord to raise rent as part of changes to its billing practices, the existence of those other motivations does not negate BBM's admission that plaintiffs’ ORCP 32 H demands, and therefore plaintiffs’ complaint generally, was a cause of the rent increase decision.

In short, we see no material factual dispute on this record that plaintiffs’ complaint was a cause of BBM decision to raise rents, and thus reject BBM's argument that the trial court erred in granting summary judgment to plaintiffs on their retaliation claim for that reason.

B. BBM's Good Faith Defense and Sixth Assignment of Error We next address BBM's sixth assignment of error, in which it contends that the trial court legally erred in striking BBM's good faith affirmative defense as “insufficient in substance and therefore frivolous.” *683 Although the record on this issue is somewhat convoluted, the relevant procedural facts are that in May 2016, over a year after BBM first raised its good faith arguments in opposition to plaintiffs’ motion for summary judgment on the retaliation claim, and also nearly a year after the trial court granted that motion and concluded that BBM “violate[d] ORS 90.385 by retaliating when [it] raised rent by $20,” BBM, for the first time, pleaded as an affirmative defense that plaintiff Seaman “failed to act in good faith in that before she commenced a claim for retaliation, her lawyers stated that BBM could raise rents to offset for the additional losses resulting from eliminating a park meter reading fee and/or developing a different allocation system to reimburse tenants’ electrical usage.” 14 Nearly a year later in May 2017, plaintiffs moved to strike that defense, arguing that the defense depended on settlement correspondence that was inadmissible under OEC 408 and that, as a result, there was

“no admissible evidence to support defendant's allegation.”

Plaintiffs also noted that the court had already ruled for plaintiffs on the issue of BBM's liability for retaliation and argued that that ruling rendered the defense moot. In plaintiffs’ view, BBM's “time to present its good faith defense was during the pendency of those motions.” **19 BBM responded that the settlement correspondence at issue was admissible and had already been admitted without objection, waiving plaintiffs’ OEC 408 arguments. BBM also argued that the motion to strike was untimely, because it was not filed within 10 days of service of BBM's first assertion of the defense. As to plaintiffs’ mootness argument, BBM contended that its good faith defense had never been adjudicated or waived and that issues of fact regarding the assertions underlying the defense still remained.

After briefing and argument on the issue, the trial court concluded first that plaintiffs’ motion to strike was *684 untimely. However, the court concluded that defendant's good faith defense relied on settlement correspondence that was inadmissible under OEC 408 and struck the defense as insufficient and frivolous pursuant to its own authority under ORCP 21 E(2).

On appeal, BBM assigns error to that ruling, contending that the trial court erred in its applications of ORCP 21 E and OEC 408. In turn, plaintiffs defend the trial court's ruling on its merits while also offering that the ruling may be affirmed on the alternative basis that the defense was not timely raised because BBM pleaded ORS 90.130 as an affirmative defense long after the trial court granted plaintiffs’ motion for summary judgment on retaliation liability. In reply, BBM presses that we disregard plaintiffs’ timeliness argument, which it contends was never raised below. Further, BBM contends, “[e]ven assuming there is a legal source for plaintiffs’ argument, at best it would give the court discretion to strike the defense and would not require it to be stricken as a matter of law.” (Emphasis in original.) Discretionary questions, BBM asserts, cannot be affirmed under the “right for the wrong reason” doctrine.

Several points of clarification resolve the parties’ arguments.

First, plaintiffs did preserve their argument that BBM's good faith affirmative defense was untimely or moot when they raised that argument as part of their original motion to strike the defense. As explained earlier, plaintiffs moved to strike BBM's defense on two rationales—both that there was no admissible evidence to support the defense and that the time

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for litigating BBM's retaliation liability had passed—either of which would, if legally correct, support striking the defense as legally insufficient or frivolous. Whether a pleading or defense is, in fact, sham, frivolous, or irrelevant is a question of law, not an issue left to the discretion of the court. Ross and Ross, 240 Or App 435, 439, 246 P3d 1179 (2011) (distinguishing the legal question of whether a pleading is sham, frivolous, or irrelevant from the discretionary decision to strike a matter and preclude further pleading).

As we recently clarified in Sherertz v. Brownstein Rask, 314 Or App 331, 341, 498 P3d 850 (2021), rev. den, *685 369 Or. 338, 504 P.3d 1181 (2022), the “right for the wrong reason” doctrine is not implicated when an alternative argument was indeed raised in the trial court rather than for the first time on appeal. If “the argument is properly presented again on appeal and raises a question of law, we may simply resolve it, typically remanding only if it is necessary for the trial court to make factual findings from conflicting evidence, exercise discretion, or the like.” Id. Thus, we may consider such an alternative argument without first determining whether it satisfies the requirements of Outdoor Media Dimensions, Inc. v. State of Oregon, 331 Or 634, 659-60, 20 P3d 180 (2001) (noting additional requirements and discretionary character of “right for the wrong reason” review). **20 With those considerations in mind, we conclude that BBM has not established that a reversible error occurred here. Even if it constituted legal error for the trial court to strike the defense as frivolous due to its conclusion that no admissible evidence could support the defense under OEC 408, any purported error was harmless, because the defense was also untimely—and therefore insufficient or frivolous —for the reason that it attempted to relitigate a claim that had already been resolved by the court. When a party moves for summary judgment on an issue, “[t]he adverse party has the burden of producing evidence on any issue raised in the motion as to which the adverse party would have the burden of persuasion at trial.” ORCP 47 C. Thus, BBM's time to litigate plaintiffs’ alleged lack of good faith in bringing the retaliation claim, and in particular, their time to raise ORS 90.130 as an affirmative defense to which they would have had the burden of persuasion at trial, was when plaintiffs moved for summary judgment on that claim. 15 Indeed, BBM did litigate plaintiffs’ good faith at that time and the trial court rejected the argument. For those reasons, BBM's sixth assignment of error does not provide a sufficient basis for reversal, even in the event that any legal error occurred, and we reject it.

*686 C. Retaliation Damages and BBM's Eighth Assignment of Error Finally, we acknowledge BBM's eighth assignment of error, in which it contends that the trial court erred in granting summary judgment to plaintiffs on the issue of calculating retaliation damages. Specifically, the trial court concluded that ORS 90.375, which permits a tenant who establishes retaliation to recover “an amount up to two months’ periodic rent or twice the actual damages sustained by the tenant, whichever is greater,” entitled plaintiffs to “damages of double rent for each month the retaliatory rates have been charged.”

BBM first contends that “[t]he trial court erred in the same manner that is described supra relating to damages” under ORS 90.315(4)(e) (2011), but provides no further explanation as to how we should interpret that solitary statement. Presumably, BBM contends that its arguments as to ORS 90.315(4)(e) (2011)—that plaintiffs are only entitled to a “one-time” award rather than a separate award for each individual violation over time—apply equally to ORS 90.375. However, BBM's arguments as to ORS 90.315(4)(e) (2011) actually engage with the specific text of that statute.

Its single sentence argument as to ORS 90.375 does not —it does not account for the varied language defining the violations at issue, the varied measures of penalties, or the differing legislative history or case law relevant to those provisions. Thus, because a construction of ORS 90.375 would differ significantly in its approach and analysis from the construction of ORS 90.315(4)(e) (2011), we conclude that BBM's undifferentiated argument is not sufficiently developed for our consideration.

BBM also raises the additional argument that the trial court erred in granting partial summary judgment to plaintiffs because ORS 90.375 is a discretionary statute that permits a factfinder to award ‘up to’ or less than two months’ rent.

Specifically, BBM contends that the trial court “usurped the jury's role” when it ruled on summary judgment that each retaliation class member was entitled to two months’ rent as a matter of law. However, the record establishes that BBM argued for the trial court to “make findings *687 in the present proceeding as a matter of law” and “assess the actual damages suffered by the tenant,” at which time it was then “within [the court's] discretion to award ‘up to two month's periodic rent or twice the actual damages sustained by the tenant, whichever is greater.’ ” (Emphases in original.) Due to that record, we conclude that BBM's additional argument regarding ORS 90.375 is unpreserved.

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Hathaway v. B & J Property Investments, Inc., --- P.3d ---- (2023) 325 Or.App. 648

IV. CONCLUSION **21 In summary, the trial court erred (1) in certifying a 10year class for plaintiffs’ claims under ORS 90.315(4) (2011), based on its determination that a discovery rule applied to ORS 12.125; (2) in granting summary judgment to plaintiffs on the ground that BBM violated ORS 90.315(4) (2011) as a matter of law when it charged tenants a higher kWh rate for electricity than the electricity utility had charged BBM; and (3) in granting summary judgment to plaintiffs on the issue of computing damages under ORS 90.315(4)(e) (2011).

The trial court did not err in granting summary judgment to plaintiffs on the basis that BBM's $10 “meter reading fee” violated ORS 90.315(4) (2011), or in granting summary judgment to plaintiffs on their retaliation claim. Even if the trial court erred in striking BBM's good faith defense, any legal error in that regard was harmless. Because we reject BBM's third assignment of error, the court's order shifting the

costs of class notice to BBM stands. Likewise, because we do not address BBM's eighth assignment of error, the trial court's ruling granting partial summary judgment to plaintiffs on the issue of calculating retaliation damages stands. We do not address the assignments of error raised by B & J and Berman regarding the piercing trial, as those issues may arise differently, or not at all, on remand. Finally, we do not address the assignments of error stemming from the supplemental judgment in this case, although that judgment is reversed by this ruling as a matter of law due to our conclusion that several legal errors underlie the general judgment to which the supplemental judgment applies. We reverse and remand the trial court judgments for further proceedings consistent with this opinion.

Reversed and remanded.

All Citations --- P.3d ----, 325 Or.App. 648, 2023 WL 3215683

Footnotes 1

ORS 90.315(4) (2011) was subsequently amended after plaintiffs filed their class action complaint. See Or. Laws 2015, ch. 388, § 8. As a result, we refer to the 2011 version of the statute throughout this opinion.

Where other ORLTA statutes mentioned in this opinion have substantively changed since plaintiffs filed their action, we cite to the 2011 versions of those statutes as well.

2

Plaintiffs also alleged other claims during the litigation pursuant to ORS 646.608 of the Unlawful Trade Practices Act and ORS 124.100 for financial abuse of elderly persons. Those claims were ultimately unsuccessful and are not at issue on appeal.

3

BBM also raises the argument that, if we conclude that the trial court erred in ruling that BBM violated ORS 90.315(4) (2011), we must also reverse the class certification decision, because the court's “incorrect view” of ORS 90.315(4) (2011) “necessarily drove its conclusion that class treatment was appropriate.” We reject that argument because we conclude, as discussed later in our opinion, that the trial court did not err in granting partial summary judgment to plaintiffs based on its conclusion that BBM's meter fee violated ORS 90.315(4) (2011).

4

In Romero, we recently reaffirmed the rule that a breach of contract action accrues at the time of breach, even while acknowledging that the rule might appear inconsistent with some of the reasoning in the Supreme Court's opinion in Rice. See 323 Or App at 421, 523 P.3d 1135 (“contract actions ‘accrue’ at the time of breach, * * * even if most other types of actions ‘accrue’ when the plaintiff knew or reasonably should have known of the wrong, under the reasoning of Rice”).

5

It appears that the 1862 law was largely derived from an earlier territorial version. See Statutes of Oregon 1854, Act for the Limitation of Actions, ch 1, § 1, p. 170 (“actions shall only be commenced within the periods

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prescribed in this chapter, after the cause of action shall have accrued, except when in special cases a different limitation is prescribed by statute”).

6

We do not address plaintiffs’ contention that defendant should be “estopped” from asserting a statute of limitations defense, because we conclude that plaintiffs did not present that argument in the trial court or request our consideration of the argument under our “right for the wrong reason” doctrine.

7

We note that plaintiffs have directed our attention to materials that were not in the record at the time the trial court considered plaintiffs’ motion for summary judgment. We consider only the evidence that was in the record at the pertinent time, viewed in the light most favorable to BBM.

8

Plaintiffs contend on appeal that this fee was instead intended to recoup a PGE “basic charge.” Plaintiffs’ contention is not supported by the relevant summary judgment record or consistent with our standard of review to view the evidence in the light most favorable to BBM.

9

We do not address plaintiffs’ arguments that rely on evidence that was not part of the summary judgment record. As we discuss further below, we also do not consider arguments plaintiffs make for the first time on appeal that rely on a section of the ORLTA relevant to manufactured dwellings and floating homes, both because plaintiffs did not bring their claims under those statutes and because the parties agreed below that those statutes did not apply to BBM's RV park.

10

House Bill (HB) 3098 (1999) amended the original 1997 language that “[a] landlord shall not increase the utility or service charge to the tenant by adding any costs of the landlord, such as a handling or administrative charge, other than those costs billed to the landlord by the provider for utilities or services” to require that “[a] utility or service charge shall include only the value or cost of the utility or service as billed to the landlord by the provider.” Or. Laws 1999, ch. 603, § 18. SB 772 (2009) subsequently changed “should only include the value or cost” to “may only include the cost.” Or. Laws 2009, ch. 816, § 4a.

11

Under ORCP 32 H, potential class action plaintiffs must “[n]otify the potential defendant of the particular alleged cause of action” and “[d]emand that such person correct or rectify the alleged wrong” in writing at least 30 days “prior to the commencement of an action for damages.” In turn, a defendant who shows that all potential class members have been reasonably identified and notified that “the defendant will make the appropriate compensation, correction, or remedy of the alleged wrong,” makes “[s]uch compensation, correction, or remedy” within a reasonable time, and has or will cease “from engaging in * * * such methods, acts, or practices alleged to be violative of the rights of potential class members” may avoid an action for damages. ORCP 32 I.

12

We also reject BBM's contention that the trial court erroneously relied on its earlier conclusions that BBM's inflated kWh rate billing and meter fees violated ORS 90.315(4) (2011) in granting summary judgment to plaintiffs on their retaliation claim. Having reviewed the trial court's ruling, we conclude that the court did not apply an incorrect legal standard or improperly rely on its earlier rulings in ruling on the retaliation claim.

13

The reader may recall that BBM successfully blocked admission of the June 10, 2013 letter from BBM's attorney. No other evidence from the settlement negotiations entered the summary judgment record.

14

BBM also asserted good faith as a defense to plaintiffs’ claims under ORS 90.315(4) (2011), specifically alleging that plaintiffs “failed to act in good faith in that they did not notify BBM that they believed that they were being allegedly overcharged for electricity or that the park meter reading fees were allegedly a violation of the [ORLTA].” BBM does not raise arguments on appeal that are specific to that aspect of their defense, however, and only raises arguments regarding its good faith defense to the retaliation claim. As a result, we only consider that defense as it relates to plaintiffs’ retaliation claim.

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15

Just as we need not decide whether the trial court erred in striking the defense based on its understanding that no admissible evidence could support the claim, we also need not evaluate whether ORS 90.130 is more appropriately characterized as a regular or affirmative defense. Regardless, BBM's time to litigate its liability for plaintiffs’ retaliation claim was when plaintiffs moved for summary judgment on that issue.

End of Document

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19

Shepard Investment Group LLC v. Ormandy, 320 Or.App. 521 (2022) 514 P.3d 1125

320 Or.App. 521 Court of Appeals of Oregon.

SHEPARD INVESTMENT GROUP LLC, an Oregon limited liability company, dba Umbrella Properties Management, Plaintiff-Appellant, v.

Bret Lee ORMANDY, an individual and all other occupants, Defendant-Respondent.

A173257 | Argued and submitted February 11, 2021. | June 29, 2022 Synopsis Background: Landlord brought eviction action, and tenant asserted counterclaim that landlord, in each month for preceding year, violated provision of Oregon Residential Landlord and Tenant Act (ORLTA) imposing several requirements on landlords wishing to pass on utility charges to tenants. The Circuit Court, Lane County, Kamala H. Shugar, J., dismissed landlord's claim for possession, awarded tenant damages equal to one month's rent for each separate violation, and awarded attorney fees and costs to tenant. Landlord appealed.

As a matter of first impression, the Court of Appeals, Shorr, J., held that tenant could not recover one month's rent for each separate violation, and instead could only recover twice of total amount that he was wrongfully charged.

Reversed and remanded.

Procedural Posture(s): On Appeal; Motion for Attorney's Fees; Motion for Costs. **1126 Lane County Circuit Court, 19LT16199; Kamala H. Shugar, Judge.

Attorneys and Law Firms John R. Roberts, Eugene, argued the cause and filed the brief for appellant.

Matthew G. Shepard, Salem, argued the cause and filed the brief for respondent.

Before Ortega, Presiding Judge, and Shorr, Judge, and Powers, Judge.

Opinion SHORR, J. *523 In this case, we construe ORS 90.315(4)(f), one of many remedy provisions in the Oregon Residential Landlord and Tenant Act (ORLTA). ORS 90.315(4) permits a landlord to pass on utility charges to tenants, but only if it does so in a certain manner and meets certain requirements. ORS 90.315(4)(f) in turn states that, “[i]f a landlord fails to comply with” those listed requirements, “the tenant may recover from the landlord an amount equal to one month's periodic rent or twice the amount wrongfully charged to the tenant, whichever is greater.” What does it mean to “fail[ ] to comply” with the listed utility billing requirements? Further, what damages may a tenant recover when a landlord charges for utilities in a manner that does not comply with the billing practices required by ORS 90.315(4)(b) every month for an entire year?

As we explain below, and upon careful consideration of the statutory text and context, we conclude that ORS 90.315(4) does not permit a tenant to recover “one month's periodic rent or twice the amount wrongfully charged” for each individual or separate periodic billing that fails to comply with ORS 90.315(4)(a) to (d). Here, tenant could simply recover “an amount equal to one month's periodic rent or twice the amount wrongfully charged to the tenant,” whichever was greater.

More specifically, tenant is entitled to recover twice the amount that he was wrongfully charged by landlord—$960 —for the one-year period alleged in tenant's counterclaim, because that amount is greater than one month of tenant's periodic rent. Thus, with respect to landlord's first assignment of error on appeal, the trial court erred in awarding one month's rent for each month during which tenant was charged for utilities in a manner that violated ORS 90.315(4)(b). As we explain further below, we need not consider the merits of landlord's second assignment of error, because any error in that regard—if any indeed occurred—was harmless. Finally, we reject landlord's third and final assignment of error.

Accordingly, we reverse and remand.

The relevant facts are largely procedural and undisputed.

Tenant had rented a residential unit in landlord's *524 Fairfield Apartments since 2008. In 2013, landlord notified

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tenant by letter that it would begin charging a monthly flat fee for several utilities, namely water, sewer, and garbage services. Tenant's subsequent rental agreements included a provision to that effect. At all times relevant to this appeal, landlord charged tenant a $40 per month utility fee.

In November 2019, tenant failed to pay that month's rent charges, and on November 8, landlord issued a “72-hour notice” communicating its intent to terminate tenant's rental agreement for nonpayment of rent. On November 13, landlord initiated an eviction action. In response, tenant filed an answer asserting affirmative defenses and a counterclaim alleging that landlord had violated the utility billing requirements of ORS 90.315(4)(b). Tenant alleged in his counterclaim that landlord had failed to timely bill him in writing for utility charges assessed each month over the preceding year, as required by ORS 90.315(4)(b)(A). 1 Tenant further alleged that landlord had failed to provide him, in the written rental agreement or in bills, with an explanation of the manner in which the utility providers assessed their charges and the manner in which the landlord allocated those charges among the Fairfield **1127 tenants, as required by ORS 90.315(4)(b)(B). Tenant asserted that, pursuant to the damages provision in ORS 90.315(4)(f), he was entitled to recover “an amount equal to one month's periodic rent or twice the amount wrongfully charged to the tenant, whichever is greater.” More specifically, he claimed that he was entitled to one month's periodic rent for each month he was charged for utilities in a manner that failed to comply with ORS 90.315(4)(b). Tenant argued that that amount totaled $11,010.

The case was tried to the court. The court found that, over the relevant time period, landlord had charged tenant $40 each month for utility services without sending any written or electronic bills for those charges; that landlord had never offered or provided tenant with the underlying utility providers’ bills; that landlord had failed to provide any explanation, in either the rental agreement or in bills, of the manner in which the utility providers assessed *525 their charges; and that landlord had failed to describe, in either the rental agreement or in bills, the manner in which it allocated the utility charges among the Fairfield tenants. The court concluded that landlord had failed to comply with ORS 90.315(4)(b) 12 times—once every month over the preceding year—and awarded tenant statutory damages pursuant to ORS 90.315(4)(f) in an amount equal to one month of tenant's rent for each of those violations, totaling $9,050. After deducting the amount of tenant's unpaid November rent and other outstanding charges per the agreement of the parties, the

court dismissed landlord's claim for possession and awarded tenant $7,195 in damages. Tenant subsequently obtained a supplemental judgment for $5,068 in costs and attorney fees.

Landlord appeals, contending in part that the trial court erred in determining the damages award. We do not understand landlord to contest the trial court's conclusion that landlord charged tenant for utilities in a manner that did not comply with ORS 90.315(4)(b), or that those charges were levied 12 times. Instead, landlord contends that ORS 90.315(4) (f) is not a “per violation” damages provision, that the legislature knows how to include “per violation” language when it so intends, and that ORS 90.315(4)(f) punishes “a course of conduct which may consist of one or many related acts occurring over an undefined period of time.” Landlord argues that, regardless of whether a landlord levies one or 12 individual utility charges that fail to comply with ORS 90.315(4)(b), in all circumstances the landlord “fail[ed] to comply” with the requirements and is liable to the tenant in “an amount equal to one month's periodic rent or twice the amount wrongfully charged to the tenant, whichever is greater.” Tenant, on the other hand, argues that each individual noncompliant charge is a separate “fail[ure] to comply” that must be assessed its own damages; in other words, tenant argues that a landlord is liable for “one month's periodic rent or twice the amount wrongfully charged to the tenant, whichever is greater” for each noncompliant charge.

We review for legal error. Lopez v. Kilbourne, 307 Or. App. 301, 307, 477 P.3d 14 (2020). Landlord's assignment of error presents a question of statutory interpretation to which we employ our familiar methodology, considering the text, *526 context, and any helpful legislative history. State v.

Gaines, 346 Or. 160, 171-72, 206 P.3d 1042 (2009). It is our duty to identify the statute's correct interpretation, regardless of whether that interpretation is asserted by either party. Elk Creek Management Co. v. Gilbert, 353 Or. 565, 570, 303 P.3d 929 (2013). In doing so, we may not “insert what has been omitted” or “omit what has been inserted.” ORS 174.010.

We begin with a brief overview of the statute at issue.

ORS 90.315 is one of many statutes in the ORLTA, an act that was originally modelled after the Uniform Residential Landlord and Tenant Act and enacted in 1973. See, e.g., Eddy v. Anderson, 366 Or. 176, 186, 458 P.3d 678 (2020) (noting uniform act origins). In recent decades, the vast majority of the many amendments to the act have been the product of a coalition of landlord and tenant advocate groups that has sought to draft legislation by consensus. Testimony,

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House Committee on Human Services and Housing, SB 390, May 11, 2015, Ex. 1 (summary by John VanLandingham) (noting coalition history); Jodie Leith Chusid, **1128 The Oregon Residential Landlord and Tenant Act: The Time for Reform, 77 Or. L. Rev. 337, 338-39, 360-61 (1998) (noting history of act and later coalition amendments). The monthly billing transparency requirements that are today found in ORS 90.315(4)(b) are relatively new, having been enacted in 2015. Or. Laws 2015, ch. 388, § 8. Those requirements were also drafted and proposed by the landlord-tenant coalition. Testimony, House Committee on Human Services and Housing, SB 390, May 11, 2015, Ex. 1 (summary by John VanLandingham).

ORS 90.315 specifically addresses utility and service charges in residential tenancies, and, as relevant here, ORS 90.315(4) (a) and (b) impose a variety of requirements on landlords who wish to pass those charges on to tenants: “(4)(a) Except for tenancies covered by ORS 90.505 to 90.850, if a written rental agreement so provides, a landlord may require a tenant to pay to the landlord a utility or service charge or a public service charge that has been billed by a utility or service provider to the landlord for utility or service provided directly, or for a public service provided indirectly, to the tenant's dwelling unit or to a common area available to the tenant as part of the tenancy. *527 A utility or service charge that shall be assessed to a tenant for a common area must be described in the written rental agreement separately and distinctly from such a charge for the tenant's dwelling unit. “(b)(A) If a rental agreement provides that a landlord may require a tenant to pay a utility or service charge, the landlord must bill the tenant in writing for the utility or service charge within 30 days after receipt of the provider's bill. If the landlord includes in the bill to the tenant a statement of the rent due, the landlord must separately and distinctly state the amount of the rent and the amount of the utility or service charge. “(B) The landlord must provide to the tenant, in the written rental agreement or in a bill to the tenant, an explanation of: “(i) The manner in which the provider assesses a utility or service charge; and “(ii) The manner in which the charge is allocated among the tenants if the provider's bill to the landlord covers multiple tenants.

“(C) The landlord must: “(i) Include in the bill to the tenant a copy of the provider's bill; or “(ii) If the provider's bill is not included, state that the tenant may inspect the provider's bill at a reasonable time and place and that the tenant may obtain a copy of the provider's bill by making a request to the landlord during the inspection and upon payment to the landlord for the reasonable cost of making copies. “(D) A landlord may require that a bill to the tenant for a utility or service charge is due upon delivery of the bill.

A landlord shall treat the tenant's payment as timely for purposes of ORS 90.302(3)(b)(A) if the payment is made by a date that is specified in the bill and that is not less than 30 days after delivery of the bill.

“(E) If a written rental agreement so provides, the landlord may deliver a bill to the tenant as provided in ORS 90.155 or by electronic means.”

ORS 90.315(4)(c) and (d) present additional requirements not at issue here, limiting the conditions under which a landlord may add an additional amount to a utility charge *528 and placing requirements on how a landlord may amend a rental agreement to pass on service charges. Finally, and most significantly for this opinion, paragraph (4)(f) provides a tenant remedy for violations of the above requirements: “If a landlord fails to comply with paragraph (a), (b), (c) or (d) of this subsection, the tenant may recover from the landlord an amount equal to one month's periodic rent or twice the amount wrongfully charged to the tenant, whichever is greater.” ORS 90.315(4)(f).

Generally stated, then, a landlord may require a tenant to pay a monthly utility charge, if the written rental agreement so provides, but must bill the tenant for that charge in writing and must include in that bill either the utility provider's bill itself or an offer that the tenant may inspect the provider's bill upon request. ORS 90.315(4)(b)(A), (C). Additionally, the landlord **1129 must also provide the tenant with an explanation of how the utility provider assesses its charges and how those charges are allocated among the tenants. ORS 90.315(4)(b) (B). That information may be provided in the rental agreement

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Shepard Investment Group LLC v. Ormandy, 320 Or.App. 521 (2022) 514 P.3d 1125

or as part of the utility bill to the tenant. Id. If a landlord “fails to comply” with paragraphs (a) to (d), ORS 90.315(4)(f) provides the tenant with the greater of two possible remedies —either “an amount equal to one month's periodic rent” or “twice the amount wrongfully charged to the tenant.” And, again, a landlord “fails to comply” with paragraph (b) if it fails to bill the tenant in writing for the utility charge within 30 days after receipt of the provider's bill (ORS 90.315(4)(b)(A)); fails to provide the tenant, in the written rental agreement or in the bill, with an explanation of the manner in which the provider assesses the utility charge and the manner in which the charge is allocated among the tenants (ORS 90.315(4)(b)(B)); or fails to include in the bill a copy of the provider's bill or an offer that the tenant may inspect the provider's bill (ORS 90.315(4) (b)(C)).

Considering those provisions together, several takeaways are immediately apparent. First, a landlord may not charge a tenant for utilities at all if the written rental agreement does not account for such charges, and a landlord “fails to comply” if it charges a tenant a single utility charge under those circumstances. Second, ORS 90.315(4)(b) describes *529 requirements that a landlord must meet when a landlord charges a tenant a utility charge. It follows that a landlord also “fails to comply” with ORS 90.315(4)(b) if it sends a single utility charge to a tenant absent the required disclosures, even if such charges were contemplated by the rental agreement.

Thus, ORS 90.315(4)(f) makes clear that a landlord is liable for damages if it levies even a single noncompliant utility charge; it is the provision's applicability when multiple utility billings violate the requirements that is less clear. As explained earlier, in tenant's view, “courts must make an ORS 90.315(4)(f) calculation and award for each separate utility charge for which a violation has occurred.” In landlord's view, tenant is “entitled only to the greater of twice the amount wrongfully charged or one month's rent” regardless of the number of noncompliant utility charges.

Before we address those competing arguments, however, we must interpret an aspect of the statute that neither party confronts in their arguments to us: What does it mean under ORS 90.315(4) for a landlord to “wrongfully charge[ ]” a tenant? As noted, we have a duty to interpret ORS 90.315(4) (f) correctly, and our understanding of that term necessarily informs our understanding of the remedy provision as a whole, which, again, provides a tenant the right to “an amount equal to one month's periodic rent or twice the amount wrongfully charged to the tenant, whichever is greater.”

ORS 90.315(4)(f). “Wrongful” and “wrongful charge” are

not defined by the ORLTA. However, “wrongful” is a word of common usage that ordinarily means “full of wrong: injurious, unjust, unfair” or “not rightful especially in law: having no legal sanction: unlawful, illegitimate.” Webster's Third New Int'l Dictionary 2642 (unabridged ed. 2002). That latter definition makes sense in the context of this statute— in other words, a landlord wrongfully charges a utility charge to a tenant when it charges the tenant without complying with the law, or, more particularly here, the requirements in ORS 90.315(4)(a) to (d). 2 *530 We turn to our construction of the remedy provision.

As discussed above, ORS 90.315(4)(f) applies when a landlord “fails to comply” with paragraphs “(a), (b), (c) or (d).” “[F]ails to comply” plainly does not distinguish between individual utility bills or provide for increasing penalties when a tenant establishes that the landlord charged for utilities in a manner that violated ORS 90.315(4)(b) several different times. A landlord can “fail[ ] to comply” once or many times, and that phrase, standing alone, does **1130 not tell us what the legislature intended as a remedy. Instead, it merely establishes the necessary conditions for a tenant to recover one of two possible remedies: “an amount equal to one month's periodic rent or twice the amount wrongfully charged to the tenant, whichever is greater.” ORS 90.315(4) (f).

However, the provision does account for the possibility that, when a landlord fails to comply with the law on multiple occasions, it may be liable for multiple “wrongful[ ] charge[s].” The first possible measure of damages limits a tenant to just “one month's periodic rent” if the landlord fails to comply. ORS 90.315(4)(f) (emphasis added). Thus, a landlord may fail to comply with the law any number of times yet still be subject to just one month's periodic rent in damages. However, the second of the two possible damages measured under ORS 90.315(4)(f) is “twice the amount wrongfully charged to the tenant.” By its plain language, that measure may be calculated from one single charge or a variety of different wrongful charges—the statute does not specify or limit the measure to one or the other. Instead, the focus is on the amount wrongfully charged. By including that alternative measure of damages, the legislature provided an avenue by which repeated noncompliant utility billings could result in a damages award that is greater than that resulting from a single noncompliant billing. In that way, the legislature built into the damages provision a penalty with some, but not too many, teeth. When a landlord fails to comply with ORS 90.315(4) (a), (b), (c), or (d), a tenant may recover for multiple violations

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Shepard Investment Group LLC v. Ormandy, 320 Or.App. 521 (2022) 514 P.3d 1125

when there are multiple wrongful charges, but the legislature limited those damages to either one month's periodic rent or twice the total amount wrongfully charged, whichever is greater. *531 Although no Oregon appellate case has yet construed ORS 90.315(4)(f), the surrounding context of ORS 90.315 provides additional support for our interpretation.

Specifically, ORS 90.315 begins by addressing requirements that effect the tenancy as a whole. The statute's first landlord requirement is expressed in subsection (2), which requires the landlord to disclose, “in writing at or before the commencement of the tenancy,” if “any utility or service that the tenant pays directly *** benefits, directly, the landlord or other tenants.” As previously noted, subsection (3) provides a tenant the remedy of “twice the actual damages sustained or one month's rent, whichever is greater” if the landlord “knowingly fails to disclose those matters required under subsection (2).” ORS 90.315(4), in turn, lists a variety of different utility billing requirements, beginning, as we explained earlier, with the foundational requirement in paragraph (a) that the landlord may not bill the tenant for utilities at all unless those charges are stated in the rental agreement. The legislature would have been aware in drafting ORS 90.315(4)(b) that the provision would appear after and interact with provisions that concerned tenancy-wide requirements. In light of that context, we conclude that the legislature would have included “per noncompliant billing” or similar language in ORS 90.315(4)(f) had it intended for courts to calculate damages in that fashion.

In sum, we conclude that the proper application of ORS 90.315(4)(f) is clear from its plain text: “If a landlord fails to comply with paragraph (a), (b), (c) or (d) of this subsection, the tenant may recover from the landlord an amount equal to one month's periodic rent or twice the amount wrongfully charged to the tenant, whichever is greater.” The legislature chose language that does not direct a deciding court to award “one month's periodic rent or twice the amount wrongfully charged the tenant, whichever is greater” for each and every separate noncompliant bill sent by a landlord, and the legislature would have included language to that effect had that interpretation been intended. 3 Instead, **1131 the legislature *532 created a remedy that addresses multiple failures to comply with the law via a potential remedy of “twice the amount wrongfully charged,” a remedy that is only available to tenants when that amount is greater than one month's rent.

In the instant case, tenant established that landlord had failed to comply with ORS 90.315(4)(b) during 12 separate months, and, as a result, tenant was entitled to recover from landlord “an amount equal to one month's periodic rent or twice the amount wrongfully charged to the tenant, whichever is greater.” Tenant established that he had been “wrongfully charged” a $40 utility fee during each of those 12 months, totaling $480. Tenant also established that, at the time of trial, he paid $825 in periodic rent each month. Tenant was therefore entitled to “twice the amount wrongfully charged” or $960 in damages on his counterclaim, the greater of those two possible measures of damages.

Finally, we briefly address landlord's two remaining assignments of error. In landlord's second assignment of error, landlord contends that the trial court erred in concluding that tenant's rental agreement did not permit “nail and mail” service, and in concluding that landlord's termination notice was invalid. Even if the trial court indeed erred as to those rulings, however, any error was harmless. In the trial court, the parties originally scheduled trial for November 2019 but stipulated to reset the trial date to December. In doing so, they agreed that only claims and counterclaims that had accrued as of November 2019 would be litigated. In light of that time frame, landlord sought possession for nonpayment of $825 for November's rent. Because, as we just determined, tenant is entitled to $960 in damages on his counterclaim, landlord would not have been entitled to possession in any event, even if the court had found its “nail and mail” service of the termination notice to be valid. See *533 ORS 90.370(1) (b) (“If no rent remains due after application of this section * * * a judgment shall be entered for the tenant in the action for possession.”); Timmermann v. Herman, 291 Or. App. 547, 549, 565, 422 P.3d 347 (2018) (tenant entitled to possession and judgment in her favor where she prevailed on her counterclaims “to the extent that no rent remains due”).

As a result, we do not consider landlord's second assignment of error on its merits. In landlord's third assignment of error, landlord contends that the trial court erred in designating tenant as the prevailing party and awarding tenant costs and attorney fees. We reject that argument without discussion.

Reversed and remanded.

All Citations 320 Or.App. 521, 514 P.3d 1125

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Shepard Investment Group LLC v. Ormandy, 320 Or.App. 521 (2022) 514 P.3d 1125

Footnotes 1

Pursuant to ORS 12.125, “[a]n action arising under a rental agreement or ORS chapter 90 shall be commenced within one year.”

2

We note that a different subsection of ORS 90.315 provides that, when a landlord knowingly fails to disclose certain matters, “the tenant may recover twice the actual damages sustained or one month's rent, whichever is greater.” ORS 90.315(3). Actual damages therefore appear to be distinct from “the amount wrongfully charged.” However, we need not decide the precise distinction between those terms here.

3

We note, briefly, that we find no guidance in the legislative history. The tenant remedy today found at ORS 90.315(4)(f) was first enacted in 1999 and originally applied to landlord violations such as failing to disclose utility charges in rental agreements or adding prohibited surcharges into utility fees. See Or. Laws 1999, ch. 603, § 18. The monthly billing transparency requirements today found in ORS 90.315(4)(b) were not enacted until 2015. Or. Laws 2015, ch. 388, § 8. Both provisions were drafted and proposed by the landlordtenant coalition described earlier. Testimony, House Committee on Human Services and Housing, SB 390, May 11, 2015, Ex. 1 (summary by John VanLandingham); Testimony, Senate Committee on Business and Consumer Affairs, HB 3098, May 10, 1999, Ex. O (comments by John VanLandingham). However, neither the coalition nor the legislators commented on how ORS 90.315(4)(f) damages should be awarded when a landlord repeatedly charges a tenant for utilities in violation of ORS 90.315(4)(b).

End of Document

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Scott v. Kesselring, 370 Or. 1 (2022) 513 P.3d 581

370 Or. 1 Supreme Court of Oregon.

Michelle SCOTT, Petitioner on Review, v.

Leslie KESSELRING and Kesselring Communications, LLC, Respondents on Review.

(CC CV15110065)(SC S068503) | Argued and submitted January 13, 2022. | July 8, 2022 Synopsis Background: Motorist filed personal injury action against rear-ending driver and driver's employer after she was injured in a car accident on the freeway when driver rear-ended her. The Circuit Court, Clackamas County, Douglas V. Van Dyk, J., awarded motorist $41,000 in economic damages and $200,000 in noneconomic damages. Rear-ending driver and his employer appealed. The Court of Appeals, Ortega, J., 308 Or.App. 12, 479 P.3d 1063, reversed and remanded, and motorist filed petition for review.

Decision of the Court of Appeals reversed; judgment of the Circuit Court affirmed.

Procedural Posture(s): On Appeal. **585 On review from the Court of Appeals. * (CA A163709) Attorneys and Law Firms Travis Eiva, Eugene, argued the cause and filed the briefs for petitioner on review.

Julie A. Smith, Cosgrave Vergeer Kester LLP, Portland, argued the cause and filed the brief for respondents on review.

James S. Coon, Thomas, Coon, Newton & Frost, Portland, and Kathryn H. Clarke, Portland, filed the amicus curiae brief for Oregon Trial Lawyers Association.

Before Walters, Chief Justice, and Balmer, Flynn, Duncan, Nelson, and Garrett, Justices, and Nakamoto, Senior Judge, Justice pro tempore. ** Opinion WALTERS, C. J.

Holdings: The Supreme Court, Walters, C.J., held that: rear-ending driver's denial of responsibility for causing full nature and extent of motorist's alleged injuries was not an admission that she was legally liable for some or any of motorist's injuries; despite rear-ending driver's admission that she caused accident, fact that rear-ending driver challenged foreseeability of kind of harm that befell motorist meant that jury was still required to determine whether rear-ending driver's conduct unreasonably created foreseeable risk of that kind of harm; evidence as to the conduct in which rear-ending driver engaged, including her speed and the fact that she looked down to place a cellphone call to a client, was relevant; and trial court did not abuse its discretion in determining that probative value of relevant evidence, that rear-ending driver looked down to place phone call, was not substantially outweighed by danger of unfair prejudice.

*3 In this personal injury case, defendant rear-ended plaintiff's vehicle, and plaintiff suffered physical and emotional injuries as a result. Plaintiff claimed that her emotional injuries were so severe that she attempted to take her own life and was hospitalized. Defendant disputed responsibility for that harm on the ground that her conduct did not unreasonably create a foreseeable risk of such harm but argued that the court should exclude certain evidence of her conduct—that, immediately before the collision, she had been using her cellphone—as irrelevant and unfairly prejudicial.

Reasoning that evidence of defendant's conduct could affect the jury's determination of the foreseeability question and was not unfairly prejudicial, the trial court denied defendant's motion. After a jury verdict in plaintiff's favor, the trial court entered judgment, and defendant appealed. The Court of Appeals reversed. Scott v. Kesselring, 308 Or.App. 12, 479 P.3d 1063 (2020). For the reasons that follow, we agree with the trial court, affirm the judgment that it entered, and reverse the contrary decision of the Court of Appeals.

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Scott v. Kesselring, 370 Or. 1 (2022) 513 P.3d 581

I. FACTUAL AND PROCEDURAL BACKGROUND This case arises from an automobile collision between defendant 1 and plaintiff. We recite the facts as alleged, denied, and admitted in the parties’ pleadings and as adduced at trial. In her amended complaint, plaintiff alleged the following. On the day of the collision, it was raining heavily, and the roads were slick. Defendant knew of those conditions and that other motor vehicle accidents had occurred that day. Defendant used her cellphone to place a non-emergency call to a client and, while doing so, she crashed into the rear of plaintiff's vehicle. Plaintiff alleged that defendant was negligent in one or more of the following particulars: *4 “a. In failing to keep and maintain a lookout for traffic in front of her; “b. In driving too fast for circumstances then there existing; and

“c. In following traffic at a distance that was too close in violation of ORS 811.485.”

As a result of her negligence, defendant caused plaintiff physical injuries as well as **586 severe emotional distress, including pain, anxiety, and post-traumatic stress. Plaintiff sought $97,505 in past medical expenses, $50,000 in future medical expenses, and $350,000 in noneconomic damages.

In her amended answer, defendant responded as follows.

Defendant admitted that she knew that it was raining heavily, that the roads were slick, and that other motor vehicle accidents had occurred that day. Defendant denied plaintiff's allegations that defendant was using her cellphone to place a call and that defendant was negligent in the alleged particulars, but she also reframed the issues and “admitted” that “immediately before the accident, [p]laintiff was slowing in traffic as [defendant] was looking down. When [defendant] looked back up, she was unable to stop in time and rear-ended plaintiff's 2012 Dodge SUV.” Defendant also “admitted” that “she is responsible for causing the accident,” but “denied” that “she is responsible for causing the full nature and extent of plaintiff's alleged injuries and damages.”

Before trial, defendant filed proposed jury instructions and a motion in limine asking the court to exclude all mention of her cellphone use, because “[a]ny evidence regarding [defendant's] alleged cell phone ‘use’ is irrelevant to any issue in this case, as [defendant has] admitted fault. Any probative value of this evidence is substantially outweighed by the risk of unfair prejudice to [d]efendant[ ]. OEC 401, 402 and 403.” Defendant's requested jury instructions included one stating that she had “admitted liability,” and another on foreseeability, Uniform Jury Instruction 20.03: “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 plaintiff must be within the general class of persons that one reasonably would *5 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.”

At the hearing on defendant's motion in limine, the court questioned the parties about the issues for trial, and, in that context, the parties discussed defendant's requested foreseeability instruction. Plaintiff did not object to the instruction but noted that including a foreseeability instruction would not make sense in the context of an admitted negligence case: “I can't tell what the defendant is admitting and what the defendant is not admitting. All—there's an air of confusion and avoidance about what the defendant is or is not admitting. Is the defendant admitting that ‘I caused the crash, I caused injury, I caused damage, and it was all foreseeable,’ and the only question is how to compensate the plaintiff.

“Or is the defendant saying, ‘I admit I caused the crash, don't ask me how,’ and then, ‘I get to contest every single other issue of common law negligence beyond that.’ And if that's what the defendant is asking for then plaintiff is asking for the opportunity to demonstrate—to put on proof of all of the elements of common law negligence.”

Defendant argued in response that she had admitted “negligence” and that she had “caused injury to plaintiff.”

Defendant stated that she was contesting “the extent of plaintiff's injuries” and the foreseeability of plaintiff's suicide attempt: “I am arguing foreseeability. * * *

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Scott v. Kesselring, 370 Or. 1 (2022) 513 P.3d 581

“* * * * * “Yes. UCJI 20.03, on the suicide attempt, we have admitted the defendant was negligent. We have admitted the defendant caused injury to plaintiff.

“What we are contesting is the extent of the injuries, and that it was not foreseeable that she would attempt suicide following this accident.”

Defendant argued that her use of a cellphone did not affect whether it was “foreseeable” that plaintiff would attempt suicide, making the cellphone use irrelevant and therefore *6 inadmissible. In addition, defendant argued that the cellphone evidence was unfairly prejudicial under OEC 403.

The trial court denied defendant's motion in limine, explaining as follows: “I do consider that the degree of risk * * * bears on the **587 scope of harms that might reasonably be anticipated. I've alluded to that with several of my remarks.

And I think [that the cellphone use] is a circumstance here that is germane to that consideration.” Among the “remarks” to which the court referred were the following: “Cellphone use could result in a really bad accident on the freeway so the scope of foreseeability, you know, might even extend to post-traumatic stress, might even extend that far. If you hit somebody hard enough going that fast and you know what, you drive around distracted, there's a degree of foreseeability about the scope of the harm. “* * * * * “[I]t becomes a question of foreseeability of harm and scope of harm that a person might anticipate in a context like this. “* * * * * “[T]he type of risk that * * * you undertake correlates with the foreseeability of the loss. The greater the disregard, the greater the foreseeability of the loss. *** The more limited in scope the disregard or the negligence, the less foreseeability attaches to the loss.

“Now, if we're 40 miles over the speed limit, it's different than if we're 20 miles over the speed limit. Both might be negligent, but the one might invoke a scope of loss or harm greater than the other and so foreseeability would seem to attach to such a consideration.”

The trial court also concluded that the probative value of the cellphone evidence was not substantially outweighed by unfair prejudice. It allowed voir dire questions regarding cellphone use and allowed evidence about cellphone use at trial “as the backdrop of the circumstances of the accident[, n]ot to dwell on it.” *7 At trial, plaintiff adduced evidence of defendant's conduct without objection. There was testimony that defendant was driving at least 45 miles per hour at the time of the collision, that she was aware that a different collision had occurred in front of her, and that she was driving a loaner car that did not have a hands-free phone set up. Defendant testified that, just before the collision, she had looked down at her cellphone to search for a client contact and place a call.

During trial, plaintiff testified that six months after the accident, she was still experiencing physical pain from the accident, having trouble sleeping, and having difficulty keeping up with normal household activities. As plaintiff testified: “I wasn't getting better and I wasn't getting better, and I just kept—I just felt like—I was trying to keep up, trying to keep a happy smile on my face, trying to keep up with like, you know, appearances like everything's fine, everything's fine. But inside I wasn't fine. I wasn't fine at all. And it really—I just felt like I was in a downward spiral of pain of hopelessness and despair was how I felt.”

On cross-examination, defendant suggested that plaintiff's physical pain had abated by the time of her suicide attempt and that she had acted for an unrelated reason—that she felt unappreciated by her husband—a circumstance that defendant did not cause. In closing, defendant made the following argument:

“* * * * *

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Scott v. Kesselring, 370 Or. 1 (2022) 513 P.3d 581

“[Plaintiff's husband's] lack of understanding is [defendant's] fault? [Plaintiff's] marital problems caused by [defendant]? A suicide attempt caused by [defendant]? “* * * * * “[Plaintiff is] trying to manage everything while essentially operating as a single parent because her husband's not there.

And not only is he not there, he's not real supportive or understanding. Is that [defendant's] fault? [Defendant] is only responsible for what she caused. “[Plaintiff's counsel] asked you, ‘How could you conclude the suicide attempt was not a result of this accident?’ Well, I am going to tell you how. And it's right here on this board. It is the law. And is the jury instruction you will *8 have with you in writing back in the jury room, right here, the last sentence, ‘The harm suffered must be within the general class of harm that one reasonably would anticipate might result from the defendant's conduct.’ ‘Foreseeability’ is the name of the instruction. **588 What is foreseeable?

A person who's liable only for the reasonably foreseeable consequences of his or her actions, reasonably foreseeable.

“Could it be predicted? Could it be anticipated? If you rear end someone on the highway, is it reasonably foreseeable that they're going to attempt suicide? * * * Was it reasonably foreseeable that she would attempt suicide as a result of this car accident?”

The jury awarded plaintiff $41,000 in economic damages, rather than the $97,505 that she had sought, and $200,000 in noneconomic damages, rather than the $350,000 that she had sought. 2 The trial court entered judgment in those amounts and defendant appealed, assigning error to the trial court's decision to admit evidence that defendant had used her cellphone immediately before the collision.

The Court of Appeals viewed the question before it as “whether the precise reason that defendant was negligent— that she was using her cellphone moments before colliding with plaintiff's car—is relevant to the question of whether the particular harm that befell plaintiff—physical and emotional trauma—was foreseeable.” Scott, 308 Or.App. at 19, 479 P.3d 1063 (internal quotation omitted). The court answered that question in the negative, concluding that the trial court had erred and that a new trial was necessary. Id. at 20, 23, 479 P.3d 1063.

We allowed plaintiff's petition for review. 3

*9 II. LEGAL BACKGROUND Before we begin our analysis of the evidentiary question presented, it is helpful to describe the nature of a negligence claim. Over time, as we explained in Sloan v. Providence Health System-Oregon, 364 Or. 635, 643-44, 437 P.3d 1097 (2019), this court has changed the way it has described what a plaintiff must prove to make out such a claim: “Traditionally, to prevail on a negligence claim, a plaintiff had to prove that (1) the defendant had a duty to the plaintiff, (2) the defendant breached the duty, (3) the breach was a factual cause and (4) a legal cause (or proximate cause) of (5) harm to the plaintiff measurable in damages.

Aiken v. Shell Oil Co. et al and Huey, 219 Or. 523, 535-36, 348 P.2d 51 (1959) (‘One of the old and simple definitions of negligence is: “There must be a duty on the defendant; a failure to perform that duty; and the failure to perform that duty must be the proximate cause of injury and damage to the plaintiff.” ’). But, in [Fazzolari v. Portland School Dist. No. 1J, 303 Or. 1, 734 P.2d 1326 (1987)], this court reformulated the elements for an ordinary negligence claim, stating: “ ‘[U]nless the parties invoke a status, a relationship, or a particular 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.’

“Fazzolari, 303 Or. at 17 [734 P.2d 1326]. Thus, when asserting an ordinary negligence claim, a plaintiff must establish that the defendant's conduct created a foreseeable and unreasonable risk of legally cognizable harm to the plaintiff and that the conduct in fact caused that kind of harm to the plaintiff.”

Sloan, 364 Or. at 643, 437 P.3d 1097.

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Scott v. Kesselring, 370 Or. 1 (2022) 513 P.3d 581

In Fazzolari, the court examined how courts and scholars had confronted the age-old **589 problem of how to state the “bounds of liability” and conducted an extensive review of the evolution of the problem and the “vast amount of legal literature.” 303 Or. at 4-6, 734 P.2d 1326. The court discussed the concepts of duty, proximate cause, and scope of duty and found them bound up in and used as “shorthand statement[s] of [ ] *10 conclusion[s], “verbal crutch[es],” or “convenient label[s],” to express “the sum total of those considerations of policy which lead the law to say that the plaintiff is entitled to protection.” Id. at 7-9, 734 P.2d 1326 (internal quotation marks omitted). The court paid particular attention to a thenrecent Oregon case that had turned away from the use of those concepts—Stewart v. Jefferson Plywood Co., 255 Or. 603, 469 P.2d 783 (1970)—a case that the Fazzolari court characterized as making “foreseeable risk the test both of negligent conduct and of liability for its consequences without phrasing the test in terms either of causation or of duty.” 303 Or. at 14, 734 P.2d 1326. In Fazzolari, the court completed the turn that Stewart had begun, deliberately stepping away from what it characterized as the “neat division of issues” and the “duty, breach, cause” formula. Id. at 4, 15, 734 P.2d 1326. The court recognized that those discrete issues could have continued significance when the parties invoke a status, relationship, or particular standard of conduct that defines or limits the defendant's duty. But, without such a status, relationship, or particular standard, the court reformulated the question of the bounds of a defendant's liability as a question of whether the defendant's “conduct unreasonably created a foreseeable risk to a protected interest of the kind of harm that befell the plaintiff.” Id. at 17, 734 P.2d 1326.

In that formulation: “[The] role of the court is what it ordinarily is in cases involving the evaluation of particular situations 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.”

Id. In Fazzolari the court quoted Stewart, to emphasize the importance of the jury's role: “ ‘The jury is given a wide leeway in deciding whether the conduct in question falls above or below the standard of reasonable conduct deemed to have been set by the community. The court intervenes only when it can say that the actor's conduct clearly meets the standard or clearly falls below it.’ ”

Id. at 17-18, 734 P.2d 1326 (quoting Stewart, 255 Or. at 607, 469 P.2d 783). The jury's assessment of foreseeability, that is, whether a particular *11 defendant's conduct unreasonably created a foreseeable risk to a protected interest of the kind of harm that befell the plaintiff, is an aspect of a determination of liability (together with factual causation, as explained further below): “[A]n actor should not be liable unless he is at fault in the legal sense. Although legal fault is not the exact equivalent of moral fault, the predicate is blameworthiness in some sense; the actor being regarded as blameworthy if his conduct is, according to community standards, generally considered as creating a danger to persons in the situation in which the plaintiff finds himself.”

Stewart, 255 Or. at 608, 469 P.2d 783 (footnotes omitted).

Since Fazzolari this court has, on occasion, discussed how its reformulation in that case lines up with the traditional elements of a negligence claim. In Piazza v. Kellim, 360 Or. 58, 70, 377 P.3d 492 (2016), this court said the following: “Foreseeability plays a role in at least two overlapping common-law negligence determinations: (1) whether the defendant's conduct unreasonably created a foreseeable risk of harm to a protected 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 **590 limit on the scope of a defendant's liability for negligent conduct.”

And, in Sloan, this court included that quotation from Piazza and took another stab at explaining the relationship between the traditional elements of a negligence claim and the Fazzolari reformulation: “In ordinary negligence claims, foreseeability plays a role in determining whether a defendant's conduct is negligent (in other words, in setting a defendant's standard of care) and whether a defendant should be liable for particular consequences of their negligent conduct (in other words, establishing the scope of a defendant's liability).”

Sloan, 364 Or. at 643, 437 P.3d 1097.

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*12 But Fazzolari’s formulation stands on its own and bears repeating: “[U]nless the parties invoke a status, relationship or a particular 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.”

303 Or. at 17, 734 P.2d 1326. In this case, the parties do not invoke a particular status, relationship, or standard of conduct, and we therefore consider plaintiff's claim to be “an ordinary negligence claim,” in which plaintiff was required to establish that defendant's conduct “unreasonably created a foreseeable risk to a protected interest of the kind of harm that befell the plaintiff.” Id. To prove liability in an ordinary negligence claim, a plaintiff also must prove factual causation. See Oregon Steel Mills, Inc. v. Coopers & Lybrand, LLP, 336 Or. 329, 340, 83 P.3d 322 (2004) (explaining that “[a] plaintiff, of course, still must prove ‘factual’ or ‘but-for’ causation—that there is a causal link between the defendant's conduct and the plaintiff's harm”). “Foreseeability (what prospectively might happen) is considered separately from causation (what retrospectively did happen).” Chapman v. Mayfield, 358 Or. 196, 206, 361 P.3d 566 (2015). Thus, weaving together the requirements of an ordinary negligence claim, plaintiff in this case was required to prove that (1) defendant's conduct (2) unreasonably (3) created a foreseeable risk (4) to a protected interest (5) of the kind of harm that befell the plaintiff, and (6) that defendant's conduct in fact caused the harm that plaintiff incurred.

Before we embark on an analysis of the evidence relevant to that claim, an additional note is necessary. In this case, neither party takes the position that, on this record, any of those aspects of plaintiff's claim present matters of law for the court. In particular, defendant does not take the position that the emotional distress that plaintiff suffered as a result of her suicide attempt was not a harm to a legally protected interest or that, as a matter of law, emotional *13 distress severe enough to lead to a suicide attempt is not a foreseeable consequence of the alleged conduct. Rather, defendant takes the position, as she did below, that the foreseeability of that risk of harm was a question for the jury, and that the evidence of her cellphone use was irrelevant to that factual

determination. Similarly, plaintiff does not raise an objection to having the jury consider the question of foreseeability, as she understands that question.

III. ANALYSIS With that background in mind, we turn to the specifics of this case and the question we must answer—whether the trial court erred in ruling that evidence that defendant was using her cellphone at the time of the collision was admissible on the issue of foreseeability. Defendant contends that that ruling was in error because she had admitted “liability,” “fault,” and “negligence,” rendering evidence of “the elements of” plaintiff's claim, including “most aspects of foreseeability,” irrelevant. Defendant contends that, because she admitted responsibility for causing a rear-end collision, the only “aspect” of foreseeability at issue was whether it was foreseeable that such a collision would cause the “extent” of the harm that plaintiff suffered, particularly her suicide attempt. Defendant submits that her cellphone use was not relevant to that question, and, even if it was, its probative value was substantially outweighed by the risk of unfair prejudice. **591 Plaintiff argues that this is not an admitted liability case. Plaintiff takes the position that, by contesting foreseeability, defendant put her conduct at issue, that determining whether that conduct unreasonably created a foreseeable risk of the kind of harm that befell her is a blended factual and normative inquiry, and that defendant's cellphone use was relevant to that inquiry.

A. The Nature of the Foreseeability Inquiry and its Implications.

Because defendant's argument starts with the premise that she admitted “liability,” “fault,” and “negligence,” it is helpful to begin our analysis with the facts that plaintiff alleged and was required to prove to establish her *14 negligence claim. Plaintiff alleged that, on the day of the collision, it was raining heavily and the roads were slick, that defendant knew of those conditions and that other motor vehicle accidents had happened that day, that defendant “used her cellphone to place a non-emergen[cy] call to a client,” and that defendant rear-ended plaintiff's vehicle. Defendant admitted all those allegations, except her cellphone use. Plaintiff did not allege, in Fazzolari terms, that defendant's conduct “unreasonably created a foreseeable risk” of the kind of harm that befell

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her. Instead, plaintiff alleged that defendant was “negligent” in failing to keep and maintain a lookout, in driving too fast, and in following too closely and that defendant's use of her cellphone was a fact supporting plaintiff's claim that defendant was negligent in those particulars. Defendant denied those allegations. Plaintiff alleged that, as a result of the collision and impact, she suffered physical injury, posttraumatic stress, and anxiety. Defendant also denied those allegations. However, defendant also made “admissions” and “denials” that varied from plaintiff's allegations. Defendant “admitted” that, immediately before the accident, she was looking down and was unable to stop and that she was “responsible” for causing the “accident.” Defendant “denied” that she was “responsible for causing the full nature and extent of plaintiff's alleged injuries and damages.”

Defendant's answer does not constitute an admission of “liability,” “fault,” or “negligence.” Defendant did not admit that she was “negligent” in the alleged particulars or that plaintiff was entitled to a judgment on her “negligence” claim.

Defendant admitted “responsibility,” but only for “causing the accident,” not for causing plaintiff's injuries. A person can cause “an accident” without being “at fault” or legally responsible for the consequences, and a person can be legally responsible for a collision, without being legally responsible for a plaintiff's injuries. Defendant did not admit that she engaged in the conduct or drove in the manner that plaintiff alleged, that her conduct unreasonably created a foreseeable risk of harm to plaintiff, or that her conduct in fact caused the harm that plaintiff alleged she had incurred. Defendant's denial of responsibility for causing the “full nature and extent of plaintiff's alleged injuries” *15 was not an admission that she was legally liable for some or any of plaintiff's injuries.

In her memorandum in support of her pretrial motion in limine, defendant argued that she had “admitted fault,” and she submitted a proposed jury instruction admitting “liability.” At the hearing on defendant's motion, the trial court inquired about the matters that remained for trial, and defendant responded, not that she had admitted “fault” or “liability,” but that she had admitted “negligence.” In her filings and argument, defendant was entitled to admit matters that she had not admitted in her answer, but it is not clear that she intended to do so; if she did, she did not do so with precision. By stating that defendant admitted that she was “negligent,” defendant may have intended to admit that her conduct was unreasonable, but it is not clear she used that term of art to take a new position and to admit more than she had admitted in her answer—that she accepted responsibility for

rear-ending plaintiff's vehicle and causing the collision. Be that as it may, what is most significant for our purposes is that, on questioning by the court, defendant acknowledged that, despite her admissions, she was contesting “foreseeability”— and the trial court understood her argument on that issue in the context of the foreseeability instruction she requested. To reiterate, defendant requested, and the trial court gave, the following jury instruction: **592 “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 plaintiff 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.”

In sum, although defendant has taken the position on review that she admitted “liability,” the pleadings and argument to the trial court make it clear that defendant admitted something less than that. “Foreseeability” is an aspect of liability, and, although defendant admitted some level of responsibility for the events that led to plaintiff's injuries, defendant continued to dispute foreseeability all the way through trial. *16 We move, then, to defendant's argument that she admitted most “aspects” of foreseeability, making evidence of her conduct irrelevant. In her briefing in this court, defendant contends that foreseeability plays a number of roles and that, in this case, her admissions changed the nature of the foreseeability question. According to defendant: “The first role that foreseeability plays is in determining whether the defendant's conduct unreasonably created a foreseeable risk of harm to a protected 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.”

(Internal quotation omitted.) That role, defendant contends, is the “blameworthiness” aspect of foreseeability. For defendant, the second role that foreseeability plays is in determining whether “ ‘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 * * * operates as a legal limit on the scope of a defendant's liability for negligent conduct.’ ” (Quoting Piazza, 360 Or. at 70, 377 P.3d 492; emphasis and ellipses defendant's.) In defendant's view, that second role often

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“focuses on the foreseeability of the harm that initially befell a particular plaintiff,” but also permits an inquiry about “whether the extent of the plaintiff ’s harm was reasonably foreseeable.” (Emphases defendant's.) According to defendant, her “judicial admissions conclusively established the ‘blameworthiness’ aspect of foreseeability as well as the threshold liability limiting aspect, i.e., the foreseeability of the harm that initially befell the plaintiff.”

Defendant contends that because she admitted responsibility for causing a rear-end collision, the only “aspect” of foreseeability at issue was whether it was foreseeable that such a collision would cause the “extent” of the harm plaintiff suffered, particularly her suicide attempt.

We agree with defendant that this court has described foreseeability as “playing a role” in overlapping common-law negligence determinations. We have not described the role of foreseeability in the same way that defendant does, but even if defendant were correct in her description, a question that we do not address, she is incorrect in the conclusion that she draws from it. To start, defendant is incorrect in *17 arguing that there is an “aspect” of foreseeability that considers only the foreseeability of the “extent” of a plaintiff's injuries. The general rule—and the rule in Oregon—is that when a defendant is liable for the type of harm that a plaintiff suffers, the defendant is liable for the entirety of that harm, even when the extent of that harm is not foreseeable. As the Restatement (Third) of Torts puts it: “If the type of harm that occurs is within the scope of the risk, the defendant is liable for all such harm caused, regardless of its extent. Even when a foreseeability standard is employed for scope of liability, the fact that the actor neither foresaw nor should have foreseen the extent of harm caused by the tortious conduct does not affect the actor's liability for the harm.”

Restatement (Third) of Torts: Physical and Emotional Harm, § 29 comment p (2010). See Fazzolari, 303 Or. at 17, 734 P.2d 1326 (requiring consideration of whether conduct created foreseeable risk of “the kind of harm that befell the plaintiff”); Winn v. Fry, 77 Or.App. 690, 693, 714 P.2d 269 (1986) (explaining that “[t]he basic premise regarding damages is that a defendant takes the plaintiff **593 as he finds him”) (internal quotation marks omitted); Crismon v. Parks, 238 Or.App. 312, 314, 317, 241 P.3d 1200 (2010) (explaining that a plaintiff with a genetic condition exacerbated by a car accident was entitled to a “ ‘previous infirm condition’ instruction [because it] is designed to prevent the jury from discounting damages because a ‘normal’ person would not

have suffered the same extent of damages as the plaintiff”).

Accord, Fuller v. Merten, 173 Or.App. 592, 22 P.3d 1221 (2001) (trial court erred in not giving “previous infirm condition” instruction in circumstance in which the plaintiff alleged that the collision caused break in plaintiff's neck that ordinarily would not be caused by that kind of collision).

In Oregon, all persons have a legally protected interest to be “free from physical harm at the hands of another.”

Philibert v. Kluser, 360 Or. 698, 703, 385 P.3d 1038 (2016) (internal quotation omitted). And, when negligent conduct causes physical injury, Oregon law also allows the plaintiff to recover damages for emotional distress. Id.; see also Tomlinson v. Metropolitan Pediatrics, LLC, 362 Or. 431, 452, 412 P.3d 133 (2018) (“[I]f the plaintiff establishes a negligence *18 claim based on physical injury * * *, then, generally speaking, the pain for which recovery is allowed includes virtually any form of conscious suffering, both emotional and physical.” (Internal quotation omitted.)). Thus, in this case, defendant was liable for the physical injuries that she caused plaintiff to suffer even if those injuries were more extensive than she reasonably could have anticipated.

Defendant accepted that proposition; she did not object or except to an instruction that so informed the jury. 4 Defendant also was liable for the emotional distress that she caused plaintiff to suffer, even if plaintiff was more prone to suffer distress, anxiety, or depression than another person might be. The rule that a defendant is responsible for the “full extent” of a plaintiff's injuries, even though those injuries would not be foreseeable, extends not only to preexisting physical injuries, but also to unanticipated harm and emotional injuries. See Restatement § 31 comment b (“a plaintiff need not have a preexisting condition to recover for physical or emotional harm that is of unforeseeable magnitude”). 5 **594 *19 That rule applies, however, only when a defendant is liable for the type or kind of harm that the plaintiff suffers. Restatement § 31 comment b (stating rule as applicable if the type of harm that occurs is within the scope of the risk). As articulated by Dobbs, “Courts assume a radical distinction between the nature of a harm and its extent.” Dan Dobbs, Paul T. Hayden & Ellen M. Bublick, 1 The Law of Torts § 206 (2d ed. 2011) (emphases in original).

Harper, James and Gray on Torts discusses the basis for the distinction:

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“There are cases where the defendant has been negligent toward the plaintiff or his property (even under the restrictive view of the scope of duty) and where injury has come through the very hazard that made the conduct negligent, but where because the state is set for it the extent of the injury passes all bounds of reasonable anticipation. A milk deliverer, for instance, negligently leaves a bottle with a chipped lip, and this scratches a [person's] hand as she takes it in. All this is easily within the range of foresight.

This particular [person] however, has a blood condition so that what to most [people] would be a trivial scratch leads to blood poisoning and death. * * * In these and like cases of what well may be called direct consequences, the courts generally hold the defendant liable for the full extent of the injury without regard to foreseeability.

“This result has been attacked as one quite inconsistent with the prevailing limitation on the scope of duty to interests and hazards that are foreseeable. * * * But the criticism stems from too much insistence on mechanical consistency. There is no reason to apply the restrictive foreseeability test to all problems just because it is applied to some. There are strong reasons, both within the framework of fault and to secure more effective compensation, for holding a wrongdoer liable for all injuries [the wrongdoer] *20 causes innocent people, and for rejecting the foreseeability limitation altogether.

Counter considerations have prevailed to limit the risks of negligent conduct to persons and types of hazard.”

Fowler V. Harper, Fleming James, Jr. & Oscar S. Gray, 4 Harper, James and Gray on Torts § 20.5, 175-77 (3d ed. 2007) (footnote omitted; first emphasis in original; second emphasis added). Accordingly, courts, including Oregon courts, have made a distinction between the extent of a plaintiff's harm, which need not be foreseeable, and the type of harm that befell the plaintiff, which may raise that issue. Compare Winn, 77 Or.App. at 693, 714 P.2d 269 (explaining premise that a defendant takes the plaintiff as is) with Fazzolari, 303 Or. at

17, 734 P.2d 1326 (requiring foreseeability of “kind of harm” that befell the plaintiff).

One context in which the issue of foreseeability arises in Oregon is in cases in which a plaintiff's initial injury is followed by subsequent conduct and subsequent injury. In such cases, the defendants may argue that the subsequent third-party conduct was not foreseeable and that they should not be held liable for the subsequent harm. Sloan is an example of a case in which the defendants made such an argument. There, the plaintiff alleged that the defendant doctors were negligent in failing to treat her when she was a patient at the facility where they worked and that, as a result, she died at a second facility to which she had been released.

The defendants argued that the plaintiff's death could have been caused by negligence at that second facility, and the plaintiff requested the following jury instruction: “If you find the defendant was negligent and that such negligence caused injury to the plaintiff, the defendant would also be liable for any additional injury caused by the subsequent conduct of another person or entity, even if such conduct was negligent or wrongful, as long as the subsequent conduct and risk of additional injury were reasonably foreseeable.”

Sloan, 364 Or. at 646, 437 P.3d 1097. This court held that that instruction correctly stated the law. Id. at 647, 437 P.3d 1097. *21 In this case, a court could understand defendant's argument that she should not be held liable for plaintiff's attempted suicide as an argument that defendant should not be held liable for subsequent conduct—here, the subsequent conduct of plaintiff herself. Viewed as an argument about the foreseeability of the extent of plaintiff's harm, defendant's foreseeability argument is not legally viable for the reasons discussed above. However, **595 viewed as an argument about the foreseeability of the general kind of harm that plaintiff suffered, defendant's foreseeability argument was not legally foreclosed, at least here, where plaintiff did not so argue or object to having the jury consider the issue. 6 Giving defendant the benefit of an argument that she could have made, we rephrase her contention as a contention that, having admitted responsibility for causing the rear-end collision, the foreseeability question for the jury was whether it was foreseeable that such a collision would cause the “kind” of harm she suffered, particularly her suicide attempt. With that understanding of defendant's argument, we now consider

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defendant's contention that her conduct—the cause of the collision—is not relevant to that inquiry. She is wrong.

In subsequent conduct cases in which foreseeability is an issue, the jury is tasked with deciding the same *22 general question as that presented in other foreseeability cases—whether the defendant's conduct unreasonably created a foreseeable risk of the type of harm that resulted. In subsequent conduct cases, the specific application of that question asks whether the defendant's conduct unreasonably created a foreseeable risk of the subsequent conduct, and the type of harm that resulted from it. See Chapman, 358 Or. at 209-15, 361 P.3d 566 (discussing subsequent conduct cases and the evidence necessary to present jury question on foreseeability). In subsequent conduct cases, “ ‘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.’ ” Piazza, 360 Or. at 74, 377 P.3d 492 (quoting Chapman, 358 Or. at 206, 361 P.3d 566). That, as plaintiff suggests, is “a blended factual and normative inquiry.” Piazza, 360 Or. at 94, 377 P.3d 492. When a defendant admits responsibility for initial harm, but contests liability for subsequent conduct and harm, the foreseeability inquiry is still an inquiry about defendant's conduct and whether it unreasonably created a foreseeable risk. That inquiry simply cannot be conducted without considering the nature of the defendant's conduct.

Thus, in this case, even if we construe defendant's argument as a challenge to the foreseeability of the type (rather than the extent) of harm plaintiff suffered—a later suicide attempt—defendant's conduct is an indispensable part of the foreseeability analysis. And, as we will explain, defendant's admission that she caused the rear-end collision does not make it otherwise.

Defendant contends that this case is different than other foreseeability cases in that she admitted responsibility for a rear-end accident and, therefore, all the jury needed to know was that there was “a rear-end car accident on the freeway.”

Defendant posits that “[t]he foreseeable consequences of rear-ending another car are, logically speaking, the same regardless of whether the person **596 doing the rearending is distracted, asleep, intoxicated, or simply failed to react in time.”

We disagree. First, defendant may be factually incorrect on that point. The foreseeable consequences of rear-ending another car may be different depending on the *23 force of

the impact, and differing conduct may present differing risks of forceful impact. But defendant's argument suffers from a more fundamental problem.

The immediate physical consequence of a defendant's conduct—here, the fact of a rear-end collision—is not the starting point in the foreseeability inquiry as correctly understood. We start, as Fazzolari instructs, with the defendant's “conduct” and the reasonableness of the foreseeable risks that it created. See Fazzolari, 303 Or. at 17, 734 P.2d 1326 (“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” (emphases added)). Accordingly, as the subsequent conduct cases discussed above illustrate, a foreseeability inquiry does not ask a jury to begin with the consequences of a defendant's conduct—what actually happened. Rather, foreseeability is a prospective inquiry that asks a jury to consider what could have happened. Chapman, 358 Or. at 206, 361 P.3d 566. The uniform jury instruction that defendant requested and that the trial court gave correctly told the jury as much. It told the jury that “the harm suffered must be within the general class of harms that one reasonably would anticipate might result from the defendant's conduct.” (Emphasis added.)

Different conduct may create different risks of harm, and a jury may well reach different conclusions about whether the defendant unreasonably created a foreseeable risk depending on whether the defendant was “distracted, asleep, intoxicated, or simply failed to react in time.” In this case, defendant's admission that her conduct caused a rear-end collision was an admission that, as it happened, her conduct had a particular consequence, a rear-end collision. That factual admission did not, however, take the pertinent question of the range of foreseeable consequences from the jury.

In concluding that, in this case, defendant's admission did not preclude the jury's consideration of foreseeability, we do not mean to imply that, in other ordinary negligence cases, a defendant cannot make factual admissions that may narrow the issues and the facts relevant to those issues.

For instance, in Lasley v. Combined Transport, Inc., 351 Or. 1, 4, 261 P.3d 1215 (2011), an ordinary negligence *24 case, a corporate defendant had spilled glass on the freeway, creating dangerous conditions; the driver defendant had driven negligently and collided with the plaintiff's decedent, who was stopped in traffic behind the spilled glass. The corporate defendant contended that the trial court had erred in excluding evidence that the driver had

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been intoxicated at the time of the collision. The corporate defendant contended that that evidence was relevant to the issue of whether the corporation's negligence was a substantial factor in causing the plaintiff's injuries and to the issue of comparative fault. The driver admitted that she had driven at an unreasonable speed and that her negligence was a cause in fact of the plaintiff's injuries. The driver had not contested foreseeability, and this court held that, as a result of the driver's admissions, evidence of the driver's intoxication was not relevant to causation; it was, however, relevant on the issue of comparative fault. Id. at 27, 261 P.3d 1215. The legal and evidentiary effect of factual admissions will depend on the circumstances of each case. Our point is not that such admissions are inconsequential; rather, it is that, in this case, defendant's factual admissions and the legal positions did not have the effect for which she argues. Defendant's admissions may have taken the questions of whether a collision occurred, or even whether defendant drove unreasonably, off the table.

However, the fact that defendant challenged the foreseeability of the kind of harm that befell the plaintiff—a suicide attempt —meant that the jury was still required to determine whether defendant's conduct unreasonably created a foreseeable risk of that kind of harm. **597 B. The Admissibility of the Cellphone Evidence on the Question of Foreseeability.

Understanding the nature of the foreseeability question that defendant raised and that the jury was required to consider, we arrive at the question of whether the trial court erred in ruling that evidence of defendant's cellphone use was relevant to that question. Relevant evidence is evidence that has “any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence.” OEC 401. We review that OEC 401 ruling for legal error. State v.

Titus, 328 Or. 475, 481, 982 P.2d 1133 (1999). *25 Having already concluded that, by contesting foreseeability, defendant put her conduct at issue, the relevancy question in this case is a straightforward one. A driver's decision to look away from the road to make a cellphone call to a client could affect a jury's determination of whether the driver unreasonably created a foreseeable risk of a horrific collision and significant physical injury, even loss of life. That evidence also could affect a jury's determination of whether that conduct unreasonably created a foreseeable risk of significant emotional distress, even distress so severe that it would cause a person to attempt suicide. And a decision to use a cellphone could be considered less reasonable and

the risk more foreseeable than would a driver's glancing away for a reason that did not require the same mental attention.

Here, the jury was entitled to hear, and without objection did hear, evidence beyond the fact of the rear-end collision.

The jury heard evidence of the conditions that existed at the time and the conduct in which defendant engaged, including her speed, the fact that she looked down, and the fact that she looked down to place a cellphone call to a client. That conduct evidence was relevant because it could have had a tendency to affect the jury's determination of whether the conduct unreasonably created a foreseeable risk of the kind of harm that plaintiff suffered.

Defendant, understandably, may have been concerned that a jury might consider her cellphone use more blameworthy than other aspects of her conduct and misuse that evidence to increase the damages awarded. Had defendants not contested foreseeability, then evidence of defendant's conduct, including her cellphone use, may not have been relevant. For instance, defendant could have admitted the foreseeability of a suicide attempt, but argued, as she argued in closing, that her conduct was not a cause-in-fact of plaintiff's attempt. Defendant could have argued that the only cause of plaintiff's attempt was her insecure relationship with her husband. Had defendant taken that tack, the trial court may have viewed the relevancy of defendant's conduct, including her cellphone use, differently. See Lasley, 351 Or. at 11, 261 P.3d 1215 (evidence of intoxication not relevant on issue of factual causation). But here, defendant did contest the foreseeability of plaintiff's suicide attempt and *26 evidence of the defendant's conduct was relevant to that issue.

That brings us to the final question of whether the cellphone evidence should have been excluded because “its probative value is substantially outweighed by the danger of unfair prejudice.” OEC 403. We review the trial court's determination under OEC 403 for abuse of discretion. Titus, 328 Or. at 481, 982 P.2d 1133.

We understand that evidence of defendant's cellphone use could have caused a jury to consider her behavior riskier than the jury might have in the absence of that evidence, but the fact that evidence may make it more likely that a jury will decide for or against a party does not determine whether evidence is “unfairly” prejudicial. See McCathern v. Toyota Motor Corp., 332 Or. 59, 71, 23 P.3d 320 (2001) (explaining that “relevant evidence often has the effect of proving one party's position while harming the other's”).

When a defendant's conduct is at issue, there is nothing

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particularly unfair about painting that conduct in all its details, and it could be unfair not to do so. Cf. State v. Davis, 336 Or. 19, 34, 77 P.3d 1111 (2003) (concluding that evidence was improperly excluded as prejudicial when it “potentially was influential because it tended to complete the picture of defendant's version of the events[, **598 and d]efendant was entitled to prove his theory of the case by presenting relevant, admissible evidence to the jury”). In this case, we conclude that the trial court did not abuse its discretion in admitting evidence of defendant's cellphone use. See State v.

Shaw, 338 Or. 586, 615, 113 P.3d 898 (2005) (noting that a trial court has “broad discretion” when findings on the record support discretionary ruling under OEC 403).

The decision of the Court of Appeals is reversed. The judgment of the circuit court is affirmed.

All Citations 370 Or. 1, 513 P.3d 581

Footnotes *

On appeal from Clackamas County Circuit Court, Douglas Van Dyk, Judge. 308 Or.App. 12, 479 P.3d 1063 (2020).

**

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

1

Defendant Kesselring (Kesselring) is the agent and owner of Kesselring Communications, LLC, (Communications) which is also a party to this appeal. Communications admitted that it is vicariously liable for Kesselring's acts and makes no arguments independent of Kesselring's. For readability, we refer to defendant in the singular. However, all references to defendant in the singular are attributable to both defendants.

2

The $97,505 figure that plaintiff alleged in economic damages included the cost of psychiatric treatment arising from plaintiff's suicide attempt. The difference between that sum and the sum that the jury awarded almost exactly reflects the cost of that psychiatric treatment. As defendant argues, the jury may well have chosen not to award plaintiff economic damages related to her suicide attempt.

3

In addition to the evidentiary issue that we discuss, plaintiff also asks that we address another issue, but only if we affirm the decision of the Court of Appeals and order a new trial. In that event, plaintiff asks that we conclude that the Court of Appeals erred in its failure to address her cross-assignment of error on an intermediate ruling. Because we reverse the decision of the Court of Appeals, we do not reach the contingent issue that plaintiff raises.

4

The trial court instructed the jury:

“If you find that the Plaintiff had a bodily condition that predisposed her to be more subject to injury than a person in normal health, nevertheless the defendant would be liable for any and all injuries and damage that may have been suffered by the Plaintiff as the result of the negligence of the defendant even though those injuries due to the prior condition may have been greater than those that would have been suffered by another person under the same circumstances.”

5

Defendant cites Wallach v. Allstate Ins. Co., 344 Or. 314, 180 P.3d 19 (2008) for the proposition that foreseeability can limit a defendant's liability for the extent of the harm that a plaintiff suffers. That is an

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incorrect understanding of the case. There, the plaintiff was injured by a phantom driver and sued her insurer for coverage. Before trial, the plaintiff was again injured in two subsequent accidents. Id. at 316, 180 P.3d 19.

At trial on coverage for the first accident, the court instructed the jury that the insurer was liable for all of the plaintiff's harm, including harm incurred in the other two accidents, as long as the subsequent harm would not have occurred but for the first accident. Id. at 317-18, 180 P.3d 19. This court held that the instruction was erroneous in two separate but related respects. Id. at 319, 180 P.3d 19. First, the instruction was “at odds with the general rule that a defendant is liable only for the foreseeable consequences of his or her negligence,” because it required only that the subsequent injuries be causally connected to the first accident and not that they be foreseeable:

“Under the trial court's instruction, the jury could hold Allstate liable for all aggravation damages that were causally connected to the first driver's negligence no matter how unforeseeable those damages were. Such unlimited liability is contrary to Oregon negligence law.”

Id. at 320, 180 P.3d 19. Second, we noted that “[u]nder Oregon law, a tortfeasor is responsible to the extent that his or her negligence aggravates a preexisting condition.” Id. at 321, 180 P.3d 19. We explained that if, in the case at hand, “the second accident was not a foreseeable consequence of the first, then the law allocates responsibility for any aggravation of plaintiff's preexisting condition to the second tortfeasor, not the first.” Id. Thus, Wallach coheres with the principal that a defendant is liable for the full extent of harms that she causes.

The foreseeability issue in Wallach was not an issue of severity, it was an issue about whether an initial tortfeasor could be held liable for injuries that were aggravated by the negligence of a subsequent tortfeasor.

6

This court has not decided whether a plaintiff's suicide or attempted suicide would present a matter of the “extent” of a plaintiff's injuries (precluding consideration of foreseeability), a matter of “subsequent conduct” (permitting a consideration of foreseeability), or a matter of comparable fault. In other jurisdictions, juries have been permitted to consider the foreseeability of a plaintiff's suicide, not only when the foreseeable danger of suicide was the principal risk that made the defendant's conduct negligent, such as, for example, when a hospital leaves a suicidal patient unsupervised, but also where suicide or attempted suicide was arguably within the scope of a more obvious risk that made the defendant's conduct negligent. For instance, juries have been permitted to consider the foreseeability of a plaintiff's suicide after a medical center negligently misdiagnosed plaintiff's HIV status, Cramer v. Slater, 146 Idaho 868, 876, 204 P.3d 508, 516 (2009) (whether misdiagnosis was cause of suicide was question of fact for the jury), the foreseeability of a plaintiff's suicide after suffering a serious brain injury in an automobile accident caused by the defendant, Fuller v. Preis, 35 N.Y.2d 425, 427, 363 N.Y.S.2d 568, 322 N.E.2d 263, 264 (1974) (whether defendant's negligence caused plaintiff's death by suicide was an issue for the jury), and the foreseeability of a plaintiff being shot at his own request after being seriously injured in a motorcycle accident caused by a manufacturer's defect, Zygmaniak v. Kawasaki Motors Corp. U.S.A., 131 N.J.Sup. 403, 405, 330 A.2d 56, 58 (1974) (whether defendant motorcycle manufacturer caused motorcyclist's death was an issue for the jury).

End of Document

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Haas v. Estate of Carter, 370 Or. 742 (2023) 525 P.3d 451

370 Or. 742 Supreme Court of Oregon.

Roberta HAAS and Kevin Haas, Petitioners on Review, v.

The ESTATE OF Mark Steven CARTER and State Farm Mutual Automobile Insurance Company, Respondents on Review, and Gerald Campbell, Defendant.

(CC 16CV24579) (SC S069255) | Argued and Submitted on September 30, 2022. | February 24, 2023 Synopsis Background: Occupants of stopped vehicle brought negligence action against rear-ending driver and his insurance company, alleging that they suffered injuries when driver's vehicle struck the back of their stopped vehicle. The Circuit Court, Multnomah County, Jerry B. Hodson, J., 2018 WL 6171992, entered judgment for rear-ending driver, and occupants appealed. The Court of Appeals, Hadlock, J. pro tempore, 316 Or.App. 75, 502 P.3d 1144, affirmed, and occupants filed petition for review.

The Supreme Court, Walters, Senior Judge, held that trial court did not commit legal error by declining to give substantial factor instruction.

Mutual Automobile Insurance Company. Also on the briefs was David E. Smith, Salem.

Leslie A. Kocher-Moar, MacMillan Scholz & Marks PC, Portland, argued the cause and filed the brief for respondent on review Estate of Mark Steven Carter.

Travis Eiva, Eiva Law, Eugene, filed the brief for amicus curiae Oregon Trial Lawyers Association.

Lindsey H. Hughes, Keating Jones Hughes PC, Portland, and Janet M. Schroer, Hart Wagner LLP, Portland, filed the brief for amici curiae Oregon Association of Defense Counsel, American Property Casualty Insurance Association, American Tort Reform Association, and Chamber of Commerce of the United States of America.

Before Flynn, Chief Justice, and Duncan, Garrett, and DeHoog, Justices, and Balmer and Walters, Senior Judges, Justices pro tempore. ** Opinion WALTERS, S. J. *744 In this negligence action, we conclude that the trial court did not err in instructing the jury on the causation element of plaintiffs' claims. Although our reasoning varies from that of the Court of Appeals, we affirm its decision, Haas v. Estate of Mark Steven Carter, 316 Or App 75, 87-88, 502 P.3d 1144 (2021), and the judgment of the circuit court.

FACTUAL BACKGROUND In 2014, plaintiffs' stopped car was struck by a car driven by defendant Carter. 1 Plaintiffs brought this negligence action against defendants, seeking to recover economic and

Affirmed.

Procedural Posture(s): On Appeal. **453 On review from the Court of Appeals. * (CA A169932) Attorneys and Law Firms Kathryn H. Clarke, Portland, argued the cause and filed the briefs for petitioners on review.

Ralph C. Spooner, Spooner & Much PC, Salem, argued the cause and filed the brief for respondent on review State Farm

noneconomic damages. 2 At trial, one of the primary issues was whether Carter's driving was a cause-in-fact of the injuries that plaintiffs alleged.

Plaintiff Roberta Haas alleged that, as a result of Carter's negligence, she suffered injuries to her neck and back and required medical treatment, including surgery. Shortly after the collision, Roberta Haas began to experience neck and back pain. Several months later, she was still experiencing significant pain, and she consulted an orthopedic surgeon.

In 2015, Haas underwent a lumbar fusion. At trial, the orthopedic surgeon testified that, prior to the collision, Haas

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Haas v. Estate of Carter, 370 Or. 742 (2023) 525 P.3d 451

had had an “extensive cervical and lumbar physical history,” including a bout of osteomyelitis in her neck in 2010 that had led to extensive neck surgery. She also had had a cervical fusion which had left her with what her surgeon considered “an infirm condition.” The orthopedic surgeon testified that the surgery performed in 2015 was attributable to the 2014 collision, but he also stated that, prior to the collision, Haas's spine was already “a mess” and that anything, even a sneeze, could have made Haas symptomatic. *745 Plaintiff Kevin Haas also alleged injury to his neck and the need for medical treatment, including surgery. After the 2014 collision, Kevin Haas noticed soreness in his neck, and, a couple of months later, he received physical and massage therapy, which appeared to improve his condition. However, in 2017, Haas was still suffering pain and **454 underwent neurosurgery, which disclosed a partially healed tear in the casing of a spinal cord disc that was consistent with the date and mechanism of the injury that he had sustained in the 2014 collision. At trial, the neurosurgeon attributed Haas's neck problems and the need for surgery to the collision but also testified that annular tears are not uncommon, and that they frequently occur due to age and degeneration.

At trial, plaintiffs submitted a written request for two uniform jury instructions on the issue of causation: “§ 23.01—Causation—‘But For’ “The defendants' conduct is a cause of the plaintiffs' injury if the injury would not have occurred but for that conduct; conversely, the defendants' conduct is not a cause of the plaintiffs' injury if that injury would have occurred without that conduct. “§ 23.02—Causation—‘Substantial Factor’ “Many factors may operate either independently or together to cause injury. In such a case, each may be a cause of the injury even though the others by themselves would have been sufficient to cause the same injury.

“If you find that the defendants' act or omission was a substantial factor in causing the injury to the plaintiff, you may find that the defendants' conduct caused the injury even though it was not the only cause. A substantial factor

is an important factor and not one that is insignificant.”

The trial court delivered the but-for instruction but rejected plaintiffs' request for the substantial factor instruction— stating, in part, that that instruction applies only “when you have multiple actors potentially at the same time.”

In addition to the but-for causation instruction, the court delivered the following instruction on damages for a previous infirm condition: *746 “§ 70.06—Damages—‘Previous Infirm Condition’

“If you find that a plaintiff had a bodily condition that pre-disposed him or her to be more subject to injury than a person in normal health, nevertheless the defendant would be liable for any and all injuries and damage that may have been suffered by the plaintiff as the result of the negligence of the defendant, even though those injuries, due to the prior condition, may have been greater than those that would have been suffered by another person under the same circumstances.”

The jury returned a verdict for defendants.

Plaintiffs appealed, arguing that they were entitled to the substantial factor instruction and that the trial court committed prejudicial error when it delivered only the but-for instruction to the jury. Plaintiffs contended that, because the jury was “confronted with multiple possible causes of plaintiffs' back and neck problems,” it should have been given the substantial factor instruction to determine whether defendant Carter's collision was a “substantial or important factor in causing the injuries plaintiffs suffered[.]” In response, defendants disputed that there was evidence that multiple causes had acted concurrently to bring about plaintiffs' injuries and argued that preexisting conditions are not concurrent causes of injury; rather, they “are the predicate for susceptibility to injury or for aggravation of prior injury.” 3

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Haas v. Estate of Carter, 370 Or. 742 (2023) 525 P.3d 451

The Court of Appeals began its analysis by agreeing with plaintiffs that the use of the substantial factor instruction need not be limited to cases in which there are multiple tortfeasors.

Haas, 316 Or App at 83-84, 502 P.3d 1144. Citing this court's decision in Joshi v. Providence Health System, 342 Or. 152, 149 P.3d 1164 (2006), the court reasoned that “any cause of a plaintiff's injury should be considered as part of the *747 causal analysis[,] whether or not that cause was the result of a negligent act.” Haas, 316 Or App at 84, 502 P.3d 1144. Nevertheless, the Court of Appeals concluded that the substantial **455 factor instruction was not required in this case, because plaintiffs had not adduced evidence that there were multiple potential causes of their injuries. Id. The court cited cases in the workers' compensation context where it had differentiated between conditions that make a person more susceptible to injury—“susceptibilities” that increase the likelihood of injury but that do not actively contribute to damaging the body—and those conditions, “causes,” that actively contribute to a disability or need for treatment. Id. at 85-86, 502 P.3d 1144 (citing Corkum v. Bi-Mart Corp., 271 Or App 411, 422-23, 350 P.3d 585 (2015); SAIF v. Dunn, 297 Or App 206, 217-18, 439 P.3d 1011, rev. den., 365 Or. 557, 451 P.3d 1006 (2019)).

The Court of Appeals applied that workers' compensation paradigm to conclude that, in a negligence case, a plaintiff's underlying condition can be the cause of the plaintiff's injury only when the condition actively contributes to causing the injury. Haas, 316 Or App at 86, 502 P.3d 1144. In this case, the court explained, plaintiffs “ha[d] not identified anything other than defendant Carter's negligent driving that caused their injuries” and had not provided specific evidence showing a “causal link” between their underlying conditions and the injuries for which they sought treatment. Id. at 87, 502 P.3d 1144. The court said that “[e]vidence that plaintiffs' underlying conditions made them more susceptible to injury” was not enough to show that the trial court erred in declining to deliver the substantial factor instruction. Id. This court allowed plaintiffs' petition for review.

ANALYSIS In this court, plaintiffs agree with the Court of Appeals that delivery of a substantial factor instruction is not limited to circumstances in which there are multiple tortfeasors but disagree that, to be entitled to that instruction, they must establish that some other factor “actively” contributed to their

injuries. Plaintiffs argue that, whenever multiple factors may have contributed to a plaintiff's injuries, the trial court should deliver a substantial factor instruction. *748 Defendants counter that, in most circumstances, a but-for instruction correctly describes that necessary causal link and that this case does not encompass one of the exceptional instances in which a substantial factor instruction would be required. 4 In considering the parties' arguments, we begin with the principles that govern the causation element of plaintiffs' negligence claims. As we explained in Lasley v. Combined Transport, Inc., 351 Or. 1, 6-7, 261 P.3d 1215 (2011), that element is a purely factual matter distinguished from concepts of “proximate cause,” “legal cause,” and “foreseeability”: “This court has abolished not only the terms but also the concepts of ‘proximate’ and ‘legal’ cause. Oregon Steel Mills, Inc. v. Coopers & Lybrand, LLP, 336 Or. 329, 340, 83 P.3d 322 (2004); Simpson v. Sisters of Charity of Providence, 284 Or. 547, 555, 588 P.2d 4 (1978); McEwen v. Ortho Pharmaceutical, 270 Or. 375, 385 n 7, 528 P.2d 522 (1974). When a defendant's negligence is a factual cause of harm to the plaintiff, the defendant is subject to liability to the plaintiff as long as the harm that the plaintiff suffered was a reasonably foreseeable result of the defendant's negligence. Fazzolari v. Portland School District No. 1J, 303 Or. 1, 17, 734 P.2d 1326 (1987).

Thus, the concept of causation (determined as a purely factual matter) is a separate concept from that of liability (determined by foreseeability and not by ‘proximate’ or ‘legal’ cause).” “[C]ausation in fact” is established when “someone examining the event without regard to legal consequences would conclude that the allegedly faulty conduct or condition in fact played a role in its occurrence.” Sandford v. Chev.

Div. Gen. Motors, 292 Or. 590, 606, 642 P.2d 624 (1982). As one treatise puts it, and we agree, factual causation “is not a quest for a sole cause. Probably it cannot be said of any event that it has a single causal **456 antecedent; usually there are many.” Fowler V. Harper, Fleming James, Jr., & Oscar S. Gray, 4 Harper, James and Gray on Torts § 20.2, 100 (3d *749 ed. 2007) (emphasis in original). To determine whether a defendant's negligence is one of many potential causes of a plaintiff's harm, courts commonly use what is referred to as a “but-for” test. Id. That test asks, as did the instruction given in this case, whether the plaintiff's injury would have occurred but for the defendant's negligence. If the plaintiff's injury

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Haas v. Estate of Carter, 370 Or. 742 (2023) 525 P.3d 451

would not have occurred but for the defendant's negligence, then the defendant's negligence is a cause of the injury.

5

As discussed in Harper, James and Gray on Torts, a but-for instruction is not intended to tell a jury—and, by its terms, does not tell a jury—that a defendant's conduct must be the only or even the predominate cause of the plaintiff's injury.

Other authorities agree: “It is by no means true that the but-for test reduces everything to a single cause. In fact, there are always many causes that meet the but-for test, some represented by negligent conduct, some not. A negligently fells a tree; to get around it, B walks into the street; C, driving a car, hits his brake to avoid running into B; D, a passenger is thrown into the windshield. As a pure matter of factual cause, the conduct of A, B, and C are all causes of D's harm. Without A's conduct, none of this would have occurred and the same can be said of the conduct of the others.”

Dan B. Dobbs et al., 1 The Law of Torts § 186, 625-26 (2d ed. 2011) (footnotes omitted); accord W. Page Keeton et al., Prosser and Keeton on The Law of Torts § 41, 266 (5th ed.

1984).

There is, however, at least one situation in which a butfor instruction will not work. That situation occurs “[i]f two causes concur to bring about an event, and either one of them, operating alone, would have been sufficient to cause the identical result[.]” Keeton, Prosser and Keeton on The Law of Torts § 41 at 266 (emphases added). If, for example, two defendants negligently set fires that combined to burn the plaintiff's barn, but each fire alone would have *750 been sufficient to burn the barn, then, applying the but-for instruction, either defendant could claim that that defendant's conduct was not a cause of the barn's destruction; even if that defendant had not set the fire, the other defendant's action would have destroyed the barn. Because the plaintiff could not prove that the barn would not have burned but for the act of either defendant, the plaintiff would not be able to prove causation. The but-for instruction would effectively shield both defendants from liability for the plaintiff's loss, even though, as a legal matter, the causal relationship between each defendant and the plaintiff would have been otherwise sufficient to impose liability. See Dobbs et al., 1 The Law of Torts § 189 at 631-32. The substantial factor test was developed primarily for that circumstance—the situation in which the concurrent conduct of two or more causes combine to create an injury, and either one of those causes, operating alone, would have been sufficient to produce the same result.

Keeton, Prosser and Keeton on The Law of Torts § 41 at 268; Harper, 4 Harper, James and Gray on Torts § 20.2 at 100-01. 6 In the scenario described above, the substantial factor test would better instruct the jury on the **457 causal relationship necessary to establish the defendants' liability.

This court discussed that very scenario in Joshi. In that case, the propriety of a particular jury instruction was not at issue; the question before the court was whether the plaintiff had adduced sufficient evidence to prove that the defendants' failure to diagnose and treat the decedent's stroke had caused the decedent's death within the meaning of the wrongful death statute, ORS 30.020. 342 Or. at 155, 163-64, 149 P.3d 1164. The plaintiff's expert had testified that the defendants' *751 failure had deprived the decedent of a 30 percent chance of surviving a stroke, but not that the defendants' failure had caused the decedent's death. Therefore, this court concluded, the plaintiff had not made out the causation element of a wrongful death claim. Id. at 164, 149 P.3d 1164.

Although that holding does not control our analysis here, the court's discussion of the reason for both the but-for and the substantial factor instructions of causation is helpful.

In Joshi, the court recognized the situation in which two causes concur to cause an event, and either, operating alone, would have been sufficient to cause the identical result and quoted Keeton for the proposition that “ ‘[[t] he substantial factor formula] is an improvement over the ‘but for’ rule for this special class of cases.’ ” 342 Or. at 161, 149 P.3d 1164 (quoting Keeton, Prosser and Keeton on The Law of Torts § 41 at 267). Thus, we explained, the substantial factor standard “has not supplanted” the but-for standard of causation; rather, “the two standards apply to different types of negligence cases.” Id. at 162, 149 P.3d 1164.

Plaintiffs read Joshi as placing all multiple tortfeasor cases in the substantial factor bucket and contend that all multiple causation cases should be placed there as well. Plaintiffs argue that there is a “need” for a substantial factor instruction whenever evidence of multiple causal factors is adduced.

In that circumstance, plaintiffs argue, a but-for instruction should not be used, because it incorrectly indicates that a defendant cannot be held liable unless the defendant's conduct was the sole or predominate cause of the plaintiffs' injuries.

In delving into those arguments, a few preliminary notes are important. First, in this case, plaintiffs proffered both a but-for instruction and a substantial factor instruction. They did not argue, however, that both were required or that the

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Haas v. Estate of Carter, 370 Or. 742 (2023) 525 P.3d 451

substantial factor instruction was required to supplement the but-for instruction, and they now seem to take the position that the court was required to choose between them.

Second, the parties understand the difference between the two instructions to hinge on whether the jury is informed that, to find causation, the jury must find that the alleged harm would not have occurred absent the *752 defendant's conduct; they make their arguments accordingly. That is the distinction on which we too will focus, but we note that when a party requests an instruction, its particular wording may be important in any legal analysis, depending, of course, on any objection a party makes.

Starting, then, with plaintiffs' argument from Joshi, we think it important to emphasize that its holding was specific to the interpretation of the wrongful death statute and does not control our analysis here. Nevertheless, Joshi includes two statements with which we agree and that also bear emphasis: The substantial factor standard “has not supplanted” the butfor standard of causation and “the two standards apply to different types of negligence cases.” Id. at 162, 149 P.3d 1164.

We understand plaintiffs' contention to be that Joshi also stands for the proposition that the substantial factor standard applies, and consequently that a substantial factor instruction should be given, in all multiple tortfeasor cases. That is not how we read Joshi.

In Joshi, this court discussed earlier cases that referred to the causation “standard” as a substantial factor standard, but, in all but one of those cases, the issue was the sufficiency of evidence, and, in holding that the plaintiffs had established the causation element, the court did not distinguish between but-for and substantial factor causation. 342 Or. at 159, 149 P.3d 1164 (citing, e.g., Stewart v. Jefferson Plywood Co., 255 Or. 603, 606, 469 P.2d 783 (1970) (where this court determined that there was “sufficient evidence” to **458 establish causation-in-fact between the defendant's conduct and the plaintiff's injury)). As the court pointed out in Joshi, those two standards “produce the same result in most cases,” id. at 162, 149 P.3d 1164, and a general statement describing the factual inquiry as one about whether an actor's conduct was a substantial factor in producing a plaintiff's harm does not negate the use of a but-for analysis to make that determination.

We also part ways with plaintiffs in their understanding that, in citing McEwen v. Ortho Pharmaceutical, 270 Or. 375, 528 P.2d 522 (1974), Joshi stands for the proposition that the substantial factor standard rather than the but-for standard

applies in all instances in which there are multiple tortfeasors.

Joshi, 342 Or. at 160, 149 P.3d 1164 (citing *753 McEwen, 270 Or. at 407-21, 528 P.2d 522). In McEwen, the plaintiff alleged that her combined use of oral contraceptives that were manufactured by two pharmaceutical companies had resulted in her injuries. 270 Or. at 381, 528 P.2d 522. This court held that the trial court had correctly permitted the jury to decide whether each company was negligent and whether the negligence of each was a cause-in-fact of the plaintiff's injuries. The court said: “The respective liability of multiple defendants depends upon whether the negligence of each was a substantial factor in producing the complained of harm. If both Syntex and Ortho [(defendants)] were negligent and their negligence combined to produce plaintiff's injuries, then the negligence of Ortho was concurrent with that of Syntex and does not insulate Syntex from liability. Hills v. McGillvrey, 240 Or. 476, 402 P.2d 722 (1965). This is true although the negligent omissions of each defendant occurred at different times and without concerted action.

Kuhns v. Standard Oil Co., 257 Or. 482, 478 P.2d 396 (1971). See also Murray v. Helfrich, 146 Or. 602, 30 P.2d 1053 (1934). Nor is it essential to Syntex's liability that its negligence be sufficient to bring about plaintiff's harm by itself; it is enough that Syntex substantially contributed to the injuries eventually suffered by Mrs. McEwen. See Escobedo v. Ward, 255 Or. 85, 464 P.2d 698 (1970).”

270 Or. at 418, 528 P.2d 522. In so stating, we did not reject the use of a but-for instruction or hold that a substantial factor instruction is preferable. We restated the concept that there may be many causes of a plaintiff's harm and that, when multiple tortfeasors contribute to that harm, all may be held liable for it: When an injury would not have occurred without the combined negligence of many, the negligence of each is a but-for cause of the resulting injury. That was the circumstance alleged in McEwen and the cases on which the court relied in McEwen. 7 In Joshi, we did not hold that a substantial factor analysis or instruction is required or preferable to a but-for analysis or instruction in all cases in which two or more tortfeasors act concurrently to bring about a plaintiff's *754 injury, and it is incorrect to read that case or its citation to and discussion of McEwen for that proposition. 8 **459 In Joshi, this court did, however, discuss another case that has a more direct bearing on the one before us—Simpson v. Sisters of Charity of Providence, 284 Or. 547, 549, 588 P.2d

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Haas v. Estate of Carter, 370 Or. 742 (2023) 525 P.3d 451

4 (1978). There, the plaintiff fell while working, landing on his neck and shoulders. He was taken to a hospital, where, he claimed, x-ray technicians were negligent in failing to take adequate x-rays of his cervical thoracic junction. The plaintiff alleged that adequate x-rays would have disclosed a fracture and that the failure to identify that fracture caused him to suffer further injury when a physician who was unaware of it asked the plaintiff to sit on his hospital bed with his legs dangled over the side. Id. at 549-51, 588 P.2d 4. At trial, the defendant argued that the same result would have occurred even if the x-ray technicians had not been negligent and that it was entitled to a but-for instruction. The plaintiff requested a substantial factor instruction, which the trial court delivered.

Id. at 560-61, 588 P.2d 4. The defendant appealed the jury's verdict for the plaintiff, and, on review, this court held that the trial court had not erred in instructing the jury: *755 “Although the term ‘substantial factor’ is concededly not perfect, it and the instructions as a whole were sufficient to alert the jury that to find actual cause in this case they must find that the injury would not have occurred had the technicians taken proper x-rays. The instructions as given adequately presented the issue to the jury, and the trial court did not err in refusing to give the [defendant's] requested [but-for] instruction[.]”

Id. at 561, 588 P.2d 4.

Simpson was not a case in which a but-for instruction would fail: It was not a case in which two causes concurred to bring about an injury, and either one of them, operating alone, would have been sufficient to cause the identical result.

Nevertheless, this court upheld delivery of a substantial factor instruction, reasoning that “it and the instructions as a whole were sufficient to alert the jury that to find actual cause in this case they must find” that the defendant's conduct was a but-for cause of the injury. Id. Thus, although Simpson upheld delivery of a substantial factor instruction in an instance in which a but-for instruction would not have failed, it does not stand for the proposition that a substantial factor instruction is preferable to a but-for instruction and should be used in its stead. In fact, a but-for instruction may be clearer and therefore preferable to a substantial factor instruction in that it explicitly, rather than implicitly, informs a jury that negligent conduct is a cause of a plaintiff's injury when that injury would not have occurred absent the negligent conduct.

In addition, a substantial factor instruction that informs a jury that, to find factual causation, it must find that a defendant's negligence was a “substantial” or “important”

factor in causing the plaintiff's injury may be misleading.

As the Restatement (Third) of Torts section 26 comment j (2010) points out, a substantial factor instruction may cause confusion because it can lead a jury erroneously to believe that it must search for a most significant causal factor, when that is not required. This court has made it plain that, in considering the factual cause element of a negligence claim, the jury is not to examine whether one defendant's causal role was relatively more important than that of another defendant.

In State v. Gerhardt, 360 Or. 629, 635, 385 P.3d 1049 (2016), we explained that arguments about *756 the relative roles of multiple tortfeasors are more properly considered arguments about foreseeability than about factual causation: “When we use the term ‘substantial factor’ in the causation context, it refers to cases in which ‘the negligence of multiple tortfeasors combines to produce harm,’ and each tortfeasor may be liable as a factual cause of the injury.

Lasley[, 351 Or. at 6, 261 P.3d 1215]. Defendant uses the term in a different sense, one that involves weighing **460 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 discussion of the issue in [State v. Ramos, 358 Or. 581, 597-99, 368 P.3d 446 (2016)], that is not a problem of causation; rather, it is addressed in the consideration of the foreseeability of the damages.”

And in Wright v. Turner, 368 Or. 207, 218-19, 489 P.3d 102 (2021), this court explained that, when multiple defendants each play a role in causing a plaintiff's injuries, a court apportions the plaintiff's damages based on comparative fault rather comparative causation: “Under Oregon's comparative fault statutes, ‘[w]hen a trier of fact determines that multiple defendants were negligent and that the conduct of each was a causein-fact of the plaintiff's harm, the trier of fact is then required to determine the relative fault of the defendants and to apportion the plaintiff's damages between them on that basis.’ Lasley[, 351 Or. at 13, 261 P.3d 1215] (citing ORS 31.605). Under those statutes, ‘the liability of each defendant for damages awarded to plaintiff shall be several only and shall not be joint,’ and the damages recoverable from each defendant is based on the percentage of fault as found by the trier of fact. ORS 31.610(1) - (2).

Comparative fault is different than comparative causation.

With comparative fault, the ‘trier of fact is required to compare the degree to which each defendant deviated from

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the standard of care and is therefore “blame-worthy” ’ and to express that departure as a percentage, which is then applied to apportion damages. Lasley, 351 Or. at 13 [261 P.3d 1215]. Oregon's comparative fault statutes do not ‘call for apportioning damages by quantifying the contribution of several causes that had to coincide to produce the injury.’

Sandford, 292 Or. at 606 [642 P.2d 624][.]”

(Footnote omitted; emphases in original.) *757 This court has been careful to distinguish factual or “actual” cause and legal or “proximate” cause. Simpson, 284 Or. at 560, 588 P.2d 4; Stewart, 255 Or. at 606, 469 P.2d 783. At least since Fazzolari, 303 Or. at 13-14, 734 P.2d 1326, this court has used the concept of foreseeability—not a consideration of the causal significance of a defendant's conduct—as a factor in evaluating the unreasonableness of the defendant's conduct and deciding whether that conduct is negligent and whether the defendant should be held liable for the injury that the defendant had a role in causing. See Scott v. Kesselring, 370 Or. 1, 12, 513 P.3d 581 (2022) (“[P]laintiff was required to establish that defendant's conduct ‘unreasonably created a foreseeable risk to a protected interest of the kind of harm that befell the plaintiff.’ ” (Emphasis added.)). A substantial factor instruction should not be worded, understood, or used to shield a defendant from liability because that defendant's causal role is less significant than the role played by another tortfeasor or causative factor. 9 In this case, of course, plaintiffs do not take issue with that aspect of a substantial factor instruction; 10 rather, they argue that a substantial factor instruction is required in all multiple causation negligence cases and that a but-for instruction does not suffice. Plaintiffs argue that a but-for instruction necessarily indicates that a defendant cannot be held liable unless the defendant's conduct was the sole or predominate cause of the plaintiffs' injuries. **461 As discussed above, we disagree. Most negligence cases include evidence of multiple causal factors, and in most cases, a but-for instruction correctly describes the necessary cause-in-fact relationship. A but-for instruction does *758 not fail in every multiple causation case, nor does it implicitly tell a jury that it must find that the defendant's conduct was the sole or predominate cause of the alleged harm. We reject plaintiffs' argument that, in every multiple causation case, a trial court is required to give a substantial factor as opposed to a but-for instruction.

Turning then to the facts before us in this case, we find it significant that plaintiffs do not contend that this is one of the exceptional instances in which the but-for instruction fails; they do not contend, for instance, that this is a case in which two causes concurred to bring about an injury, and either one of them, operating alone, would have been sufficient to cause the identical result. 11 The most that plaintiffs seem to do to distinguish this case from the typical multiple cause case is to argue that causation is a particularly difficult concept when applied to preexisting conditions, noting that, in this case, defendants argued that plaintiffs' preexisting conditions, and not Carter's conduct, caused their injuries.

Plaintiffs correctly describe defendants' arguments.

Defendants indeed argued that Roberta's spine was already a “mess,” and that a sneeze could have caused her neck injury; they argued that Kevin's annular tear could have been caused by age or degeneration. It also is true that many people have preexisting conditions and that all are aging. But the mere fact that such conditions abound and often may contribute to a plaintiff's injuries does not mean that a trial court must use a substantial factor instruction to inform the jury about how to address that issue of multiple causation.

In many cases the defendants contend that their conduct did not play any role in causing a plaintiff's injury—that there was some other more likely cause. So, for instance, in a collision between A and B, resulting in injuries to B, A could argue that her failure to keep a look out did not *759 play a role in the collision—that the more likely cause was B's negligence in speeding and running a stop sign. A could argue that, even if she had kept a careful lookout, she could not have avoided the collision. And A could make the same argument if one of many potential causes of harm were nontortious. So, for example, if A had encountered black ice, she could argue that, even if she had kept a careful lookout, she could not have avoided the collision. In a typical multiple causation case, a defendant may seek to avoid liability by pointing to other potential causes of the plaintiff's injuries and claiming that the defendant's negligent conduct was not a cause of those injuries. But such an argument does not render a but-for instruction erroneous. As discussed, in most multiple cause cases, it is appropriate to instruct the jury that a defendant's conduct is a cause of injury if the injury would not have occurred but for the conduct. 12 Preexisting conditions are nontortious factors that are subject to the same analysis. 13 A defendant is not precluded from

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Haas v. Estate of Carter, 370 Or. 742 (2023) 525 P.3d 451

arguing that a preexisting condition was the **462 sole cause of the plaintiff's injury, and a jury is permitted to so find.

It will be up to the jury to decide whether the *760 defendant is correct, or, instead, that the plaintiff proved that it was more likely than not that the defendant's conduct also played a role.

See 370 Or at 759 n 12.

In so reasoning, we consider, but are not persuaded by the concern expressed by amicus Oregon Trial Lawyers Association (OTLA) that a but-for instruction can wrongly be understood to undermine what is commonly referred to as the “eggshell skull” rule. That rule pertains to damages.

It provides that, “when a defendant is liable for the type of harm that a plaintiff suffers, the defendant is liable for the entirety of that harm, even when the extent of that harm is not foreseeable.” Kesselring, 370 Or. at 17, 513 P.3d 581 (emphases in original).

OTLA's concern is that a jury could understand a but-for instruction as requiring a plaintiff to prove not only that the defendant's conduct contributed to the injury that the plaintiff sustained, but also that, “in a universe of possibility, the [preexisting condition] would not have otherwise caused the plaintiff to suffer the same or similar injury in another event.”

In so stating the problem, OTLA wrongly focuses on an issue that a plaintiff is not required to prove—that the same or a similar result would not have occurred in another event.

The question for a jury is whether the injury that in fact occurred would have occurred when and as it did without the defendant's tortious conduct. The question is not whether the plaintiff would have suffered the same or similar injury in a different event. 14 For example, if A drives negligently, killing B, the plaintiff in a wrongful death action does not have to prove that B would not have died anyway, in another event or at some other time—even if B was terminally ill and death was imminent. What the plaintiff does have to prove is that, but for A's negligent driving, B would not have died when B did. See, e.g., Kwasny v. U.S., 823 F.2d 194, 196 (7th Cir 1987) (“However skeptical we might be as an original matter, we cannot gainsay the presence in the record *** *761 that the perforation caused [decedent's] death in the sense that, but for the windpipe's being perforated, he would not have died when he did. Nothing more is required to place the district court's finding of causation beyond our legitimate power to revise. That a younger and more robust person would not have been fatally injured by the botched intubation is irrelevant[.]”); Smith v. State Through Dept. HHR, 523 So 2d

815, 820 (La 1988) (“In a situation where the patient dies, * * * the plaintiff does not have to shoulder the ‘unreasonable burden’ of proving that the patient would have lived had proper treatment been given.”); Budd v. Erie Lackawanna R.R., 93 NJ Super 166, 172, 225 A.2d 171 (NJ Super Ct 1966) (“Defendant would require that there be affirmative evidence on plaintiff's part that decedent would have lived if he had been given medical attention, and that he would not have died ‘anyway.’ To require such expert prescience in the context of a heart case goes beyond the standard required * * *. We must recognize that there can be no such medical certainty, for there are too many imponderables[.]” (Emphasis added.)).

That said, OTLA is correct to point out that the question of causation, no matter how phrased, requires consideration of hypothetical alternative conduct. See **463 Tomlinson v.

Metropolitan Pediatrics, LLC, 362 Or. 431, 457, 412 P.3d 133 (2018) (“Central to determining causation of harm is a comparison between what actually happened and what would have happened if the defendant had not engaged in the allegedly negligent conduct.”). Suppose that a plaintiff is injured when a tree on the defendant's land falls during a windstorm. If the alleged negligence is the defendant's failure to brace the tree, the question at trial would be whether that conduct played a role in the plaintiff's injury. Evidence about how hard the wind was blowing and what happened to trees that were braced could be adduced, and the jury would be asked to consider whether the tree would have fallen on the plaintiff as it did, even if it had been braced. 15 See Dobbs et al., 1 The Law of Torts § 189 at 636-37. Depending on the evidence adduced, a jury could find that the negligent *762 failure to brace did or did not play a role in the tree falling and determine causation accordingly. The jury will not, of course, ever know with certainty what would have happened in the absence of a defendant's negligence, and, consequently, evidence sufficient to establish causation may be difficult to adduce. But that problem does not mean that a trial court would err in instructing the jury using a but-for instruction.

And, importantly, that problem of hypothetical alternatives is not unique to cases involving preexisting conditions. It is a problem inherent in determining causation, and, in our view, it is not a reason for this court to require a substantial factor instruction in all multiple causation cases.

Although we do not accept OTLA's argument on that point, we do want to acknowledge that its concern highlights the subtle difference between a defendant's argument that the defendant is not liable for any injury to a plaintiff because the plaintiff's preexisting condition was the only cause of the

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Haas v. Estate of Carter, 370 Or. 742 (2023) 525 P.3d 451

plaintiff's injury and an argument that, even if the defendant's negligent conduct was a cause of the plaintiff's injuries, the defendant should not be held liable for the full extent of the injuries that the plaintiff incurred. Under the “eggshell skull” rule, a defendant whose conduct is a cause of a plaintiff's injuries will be responsible for the full extent of the injuries caused by that conduct, even though those injuries are greater than those that another person without a preexisting condition may have suffered. That those arguments are distinct and may be difficult in application is not, however, a reason to require a substantial factor causation instruction in every multiple causation case. Together, a but-for instruction on causation and a previous infirm condition instruction on damages may suffice. 16 For clarity, an instruction expressly telling the jury that “many factors may operate either independently or together to cause injury,” and that it “may find that defendant's conduct caused the injury even though it was not the only cause” also could be helpful. And it also could be helpful to expressly tell the jury how to understand the relationship between causation and damages. For instance, in this case, it could have been helpful to instruct the jury that (1) even if

it found *763 that plaintiffs' preexisting conditions were a cause of their injuries, it could also find that defendant Carter's conduct was a cause of those injuries and hold defendants liable for those injuries; but that (2) in determining the amount of damages to award, the jury should award the damages permitted by the damages instructions.

Here, however, plaintiffs did not ask the trial court for such clarifying instructions, and their only argument in this court is that the trial court erred in declining to give the particular substantial factor instruction that they proffered. For the reasons given, we conclude that the trial court did not commit legal error.

The decision of the Court of Appeals and the judgment of the circuit court are affirmed.

All Citations 370 Or. 742, 525 P.3d 451

Footnotes *

Appeal from Multnomah County Circuit Court, Jerry B. Hodson, Judge. 316 Or App 75, 502 P.3d 1144 (2021).

**

Nelson, J., did not participate in the decision of this case. Bushong and James, JJ., did not participate in the consideration or decision of this case.

1

Carter died after plaintiffs filed suit, and his estate was substituted as defendant. We use the name Carter throughout this opinion to refer to the deceased individual and his estate.

2

Plaintiff Roberta Haas also named as a defendant her insurer, State Farm Mutual Automobile Insurance Company, whom she sued for breach of contract, alleging that State Farm had failed to pay all the personal injury protection (PIP) benefits that were due. No issues from that claim are before the court.

3

Defendants also set out alternative preservation arguments. With respect to plaintiff Kevin Haas, they argued that he did not preserve his argument because plaintiffs' counsel's arguments at trial in support of the substantial factor instruction “related solely to the evidence presented on [Roberta] Haas'[s] claims.” With respect to plaintiff Roberta Haas, defendant State Farm argued that she had failed to preserve any error relating to her breach of contract claim against State Farm. The Court of Appeals did not address those alternative arguments.

4

Defendant State Farm also reprises the alternative preservation argument that it made in the Court of Appeals regarding the breach of contract claim brought by plaintiff Roberta Haas. Like the Court of Appeals, we do not address that argument.

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5

Of course, a defendant whose conduct is a but-for cause of the plaintiff's injury is not necessarily liable for those injuries. The plaintiff also must prove the other elements of a negligence claim—that the defendant was negligent and that the injuries caused by the defendant were foreseeable.

6

Keeton provides additional examples of circumstances in which the substantial factor test should be applied instead of the but-for rule, including the following:

“Two motorcycles simultaneously pass the plaintiff's horse, which is frightened and runs away; either one alone would have caused the fright. A stabs C with a knife, and B fractures C's skull with a rock; either wound would be fatal, and C dies from the effects of both. *** In such cases it is quite clear that each cause has in fact played so important a part in producing the result that responsibility should be imposed upon it; and it is equally clear that neither can be absolved from that responsibility upon the ground that the identical harm would have occurred without it, or there would be no liability at all.”

Keeton, Prosser and Keeton on The Law of Torts § 41 at 266-67 (footnotes omitted).

7

In Hills, for example, the decedent's death involved the negligence of multiple parties, including an “Auto Parts” store and a mechanic. 240 Or. at 479-80, 402 P.2d 722. This court determined that, if both the mechanic and the Auto Parts store were negligent, and their combined negligence produced the result, then both could be held liable for the decedent's death. Id. at 483, 402 P.2d 722.

8

As indicated in Joshi, that does not mean that a but-for instruction will always be appropriate in cases that involve multiple tortfeasors. In addition to the circumstance in which the concurrent acts of multiple tortfeasors are each sufficient to cause the injury, there may be other instances in which a but-for instruction will fail.

Consider, for example, the “multiple-sufficient-causal-set” situation, whereby a tortfeasor's conduct is a factual cause of the plaintiff's harm even if that conduct requires other conduct to be sufficient to cause the harm.

Restatement (Third) of Torts § 27 comment f (2010). The following is illustrative:

“When a person contracts a disease such as cancer, and sues multiple actors claiming that each provided some dose of a toxic substance that caused the disease, the question of the causal role of each defendant's toxic substance arises. Assuming that there is some threshold dose sufficient to cause the disease, the person may have been exposed to doses in excess of the threshold before contracting the disease. Thus, some or all of the person's exposures may not have been but-for causes of the disease. Nevertheless, each of the exposures prior to the person's contracting the disease (or the time at which the disease was determined ***) is a factual cause of the person's disease[.]”

Restatement (Third) of Torts § 27 comment g (2010) (emphases added). In such a multiple-sufficient-causalset situation, it may be appropriate to use an instruction that is specific to that situation rather than a typical but-for or substantial factor instruction. One alternative could be to inform jurors that to find causation, they must find the tortfeasors' acts to be “so related to an event that their combined conduct, viewed as a whole, is a but-for cause of the event.” Keeton, Prosser and Keeton on The Law of Torts § 41 at 268.

9

Even in instances where a but-for instruction fails, a substantial factor instruction may not be the best way to instruct a jury on factual causation because of the ambiguity that it can create. See, e.g., Keeton, Prosser © 2023 Thomson Reuters. No claim to original U.S. Government Works.

10

Haas v. Estate of Carter, 370 Or. 742 (2023) 525 P.3d 451

and Keeton on The Law of Torts § 41 at 268 (recommending directly instructing the jury on multiple sufficient causes rather than using substantial factor instruction); Restatement (Third) of Torts § 27 comment b (2010).

10

Plaintiffs also do not note that the substantial factor instruction that they submitted in this case could be understood as informing the jury that the instruction applies only in the instance in which a but-for instruction fails; that is, when two causes concurred to bring about an injury, and either one of them, operating alone, would have been sufficient to cause the identical result. So understood, that instruction would be inconsistent with the but-for instruction that plaintiffs also requested and therefore not applicable in this case.

11

Plaintiffs also do not challenge the clarity of the but-for instruction that they themselves proffered. They do not contend that, to be clear, the but-for instruction should have explicitly informed the jury that “many factors may operate either independently or together to cause injury,” that “each may be a cause of the injury,” and that it “may find that the defendant's conduct caused the injury even though it was not the only cause.”

12

The instances in which a but-for instruction fails may include instances in which nontortious conduct is a cause of harm. So, for example, if one fire is set by a tortfeasor and the other by lightening, and either, alone, would have been sufficient to burn the barn, then it would be incorrect to use the but-for instruction; a substantial factor instruction would be necessary to inform the jury that each may be a cause of the injury even though the others by themselves would have been sufficient to cause the same injury. See Dobbs et al., 1 The Law of Torts § 189 at 632-33.

13

In so concluding, we disagree with two related aspects of the reasoning of the Court of Appeals. First, we do not agree that a party is entitled to an instruction only if that party adduces evidence or makes an argument material to the requested instruction. A party may be entitled to an instruction that addresses an opposing party's evidence or argument. See Hernandez v. Barbo Machinery Co., 327 Or. 99, 106, 957 P.2d 147 (1998) (“[T]he parties in a civil action are entitled to jury instructions on their theory of the case if their requested instructions correctly state the law, are based on the current pleadings in the case, and are supported by evidence.”). Second, we do not agree that a plaintiff with preexisting conditions is not entitled to an instruction that informs the jury that many factors may operate either independently or together to cause an injury and that a defendant's conduct may be a cause of a plaintiff's injury even though it was not the only cause, unless the plaintiff shows that the plaintiff's preexisting conditions were “active” causes of injury. As discussed, nontortious conditions and circumstances may be one of many causes of a plaintiff's injuries without being “active” causes of those injuries, and a plaintiff may be entitled to an instruction so informing a jury.

14

In this case, plaintiffs did not argue to the trial court that the but-for instruction was misleading in that respect, or that the substantial factor instruction more clearly informed the jury that it was not to consider whether the plaintiffs' injuries were inevitable. Nor did plaintiffs propose an instruction explicitly providing that clarity.

Accordingly, we do not address those issues.

15

The jury would not be asked to consider whether the plaintiff would have been similarly injured in another event, given the storm's violence and the other windblown objects that could have caused injury.

16

As noted above, 370 Or at 745-46, in this case, the court gave the previous infirm condition instruction on damages.

End of Document

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Sodaro v. Boyd, --- P.3d ---- (2023) 325 Or.App. 511

325 Or.App. 511 Court of Appeals of Oregon.

Ignatius SODARO, Plaintiff-Appellant, v.

Carnetta BOYD, Defendant-Respondent.

A174005 | Argued and Submitted May 20, 2022. | April 26, 2023 Synopsis Background: Passenger of sport-utility vehicle (SUV) brought negligence action against motorist, alleging motorist rear-ended the SUV while it was turning left at an intersection because it had to stop suddenly for another car that ran the red light. The Circuit Court, Multnomah County, Christopher A. Ramras, J., 2020 WL 13441670, after a jury verdict, entered judgment in favor of passenger, but only awarded $4,339.98 for past medical expenses and $2,400.00 for noneconomic damages. Passenger appealed

Holdings: The Court of Appeals, Mooney, J., held that: passenger and motorist were entitled to jury instruction as to causation, and trial court was not required to give substantial factor instruction.

Affirmed.

Procedural Posture(s): On Appeal; Judgment.

Multnomah County Circuit Court 18CV51752; Christopher A. Ramras, Judge.

Attorneys and Law Firms Kathryn H. Clarke argued the cause and filed the briefs for appellant.

Andrew D. Glascock, Portland, argued the cause for respondent. Also on the brief was Glascock Street Waxler LLP.

Before Shorr, Presiding Judge, and Mooney, Judge, and Pagán, Judge.

Opinion MOONEY, J. **1 *512 Plaintiff appeals from a judgment entered in his favor after a jury awarded him money damages for injuries he sustained in an automobile accident. 1 In his sole assignment of error, he asserts that the trial court erred when it failed to instruct the jury that conduct is a cause of injury when it is a “substantial factor” in producing it, even though it is not the only cause. For the reasons explained below, we conclude that the trial court did not err and, therefore, affirm.

I. STANDARD OF REVIEW “We review a trial court's failure to give a requested jury instruction for errors of law, and evaluate the evidence in the light most favorable to the establishment of the facts necessary to require the instruction.” Ossanna v. Nike, Inc., 365 Or. 196, 199, 445 P.3d 281 (2019) (citations omitted).

II. FACTUAL AND PROCEDURAL BACKGROUND A. The Sudden Stop and The Rear-End Collision The basic facts about how this motor vehicle accident occurred are not in dispute. Plaintiff, then 76 years old, and visiting family in Oregon, was the front seat passenger in an Acura MDX (the SUV) being driven by his adult son. The collision occurred late one fall evening at the intersection of the northbound I-5 offramp and Southwest Wilsonville Road.

The SUV had been traveling north on I-5 when it took the exit and then came to a full stop at the red light at the intersection, waiting to turn left. Defendant was driving her car, a Ford Focus, and came to a stop behind the SUV. After the light turned green, the SUV started forward and then had to stop suddenly for another car that ran the red light on Wilsonville Road and crossed through the intersection. Defendant's car immediately collided into the rear of the SUV. 2 *513 B. The pleadings Plaintiff's amended complaint described the key events as follows:

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“*** [T]he driver of [plaintiff's] SUV had to stop for another car that was crossing within the intersection. While he was still stopped, [d]efendant collided into the rear of [plaintiff's] Acura MDX. Said collision caused [plaintiff's] injuries and damages as alleged herein, all of which were reasonably foreseeable.”

Plaintiff alleged that defendant had been negligent in a number of ways that led to the collision, and he also alleged that: “At all times material, [plaintiff] had a bodily condition of his spine that made him more susceptible to injury than a person in normal health, and he suffered injury as a result of that condition.”

Plaintiff sought to hold defendant liable for the damages he sustained as a result of the injuries caused by defendant's alleged negligence. There were no other named defendants.

Defendant filed an answer in which she admitted that “she was involved in an automobile incident with a vehicle occupied by the [p]laintiff.” She denied all other allegations and asserted this affirmative defense: **2 “Some or all of [p]laintiff's damages were caused by the negligence of the unidentified driver over which [d]efendant had no control. Specifically the unidentified driver traveling on Wilsonville Road who ran a red light causing [p]laintiff to make a sudden emergency stop directly in front of [d]efendant. This sudden emergency stop caused [p]laintiff's injuries, if any, and caused the collision to occur between [p]laintiff and [d]efendant.”

C. The trial The case went to trial three years later. In his opening remarks to the jury, plaintiff's counsel described the force of impact when the Ford Focus collided with the SUV as more than “an insignificant parking lot type of impact” and less than “a freeway speed event.” He explained that even though the impact “wasn't huge,” plaintiff was injured. He told the jury that plaintiff had some preexisting *514 medical conditions that left him more susceptible to injury than a person without those conditions, and that plaintiff did, in fact, sustain significant injuries in the collision that required medical treatment.

Plaintiff testified that he heard a pop in his shoulder when the SUV came to a quick and sudden stop, but that he did

not recall feeling any pain at that point. He did, however, experience pain in his neck, middle back, and shoulder, as well as shortness of breath after the SUV was struck from behind by defendant's car. Plaintiff sought medical treatment at an urgent care clinic the next day. He received chiropractic treatment while in Oregon and again upon returning home to Florida. He later sought treatment from Dr. Smith, a neurosurgeon, and from Dr. Bistline, a boardcertified anesthesia and pain management physician. Plaintiff testified that he has had neck and back pain continuously since the day of the collision.

Plaintiff called several witnesses, including Smith, who offered his professional opinion, based on a reasonable degree of medical probability, that the rear-end collision caused injuries to plaintiff's neck and back that worsened his underlying conditions, causing plaintiff's current and ongoing neck and back pain that, without any additional treatment, would likely be permanent. Smith testified to the details of his diagnostic process, which included, among other things, reviewing a series of pre-accident imaging studies that showed degenerative changes in plaintiff's spine and that led Smith to conclude that, at the time of the collision, plaintiff was more likely to have developed a painful condition from being involved in a collision than someone who did not have similar preexisting conditions. Smith testified about his treatment recommendations for plaintiff, which included steroid injections into the facet joints of the thoracic spine and, eventually, a different kind of injection for longer-term relief, which helped for a while. Ultimately, Smith offered plaintiff surgical intervention with an “anterior cervical discectomy and fusion,” because he did not think that nonsurgical treatment alone would be enough to relieve plaintiff's ongoing pain. Plaintiff declined that surgery for various reasons, including his advanced age. Smith testified that, in any event, plaintiff *515 would likely require chronic pain management and functional rehabilitation to improve his range of motion and pain level.

On cross examination, Smith admitted that he did not know the speed of the vehicles at the moment of impact and that his chart notes do not reflect that there had been a hard stop prior to the rear-end collision. He agreed that the mechanics of a hard stop could cause a neck injury. When asked if he could “definitively *** differentiate any injuries that [plaintiff] sustained in the hard stop versus the rear-end accident[,]” Smith replied, “No, I don't think I can.” On redirect examination, Smith explained that it was “probable and

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most likely” that plaintiff's injuries stemmed from the rearend collision, although it was “a little less definitive.” **3 Defendant took the position at trial that the rear-end collision was caused by the driver who ran the red light, and not by her. She characterized the collision as a “very minor rear-end impact” event and she argued that if there was any injury, it was minor. Any medical expenses beyond those incurred for limited soft tissue injuries, according to defendant, were unrelated to the rear-end collision and were, instead, related to either the sudden stop or plaintiff's degenerative neck and back conditions that predated the event, neither of which were caused by her.

Defendant called Dr. Polin, a neurosurgeon, who testified that he had examined plaintiff in person, reviewed pre- and post-collision medical records and imaging studies, as well as some deposition transcripts. Polin's opinion was that plaintiff had suffered sprain and strain injuries, or soft tissue injuries, to the cervical, thoracic, and lumbar spine. Polin testified that, absent speculation, he could not give an opinion about whether the sudden stop, the rear-end collision, or both had played a role in causing plaintiff's injuries, although he did testify that plaintiff's injuries could have been caused by the sudden stop, the rear-end collision, or a combination of both. He added that he would defer to the “biomechanical people” about what the respective forces of the two events were. Polin testified that the changes to plaintiff's facet joints were related to his arthritis and *516 degenerative condition rather than to the collision. It was Polin's opinion that the treatment plaintiff had received through April 4, 2017, which was mostly chiropractic care, was reasonable and necessary as a result of the events on the day of the collision.

Defendant also called a biomechanical engineer, Probst, to testify. Probst conducted a biomechanical evaluation of the rear-end collision, which included consideration of speed, forces, and movement, and the individual involved. He testified that there was insufficient force to cause plaintiff's cervical, mid-back, low back, shoulder, disc, or facet joint injuries. Probst did not evaluate the biomechanics of the sudden stop, and he did not offer an opinion about the probability of that stop causing plaintiff's injuries. However, when pressed, Probst testified that there would have been “more motion” with the sudden stop than with the rear-end collision.

D. The jury instructions – at trial

The parties disagreed on the causation instruction to be given to the jury. Plaintiff requested that the trial court give the “substantial factor” instruction, UCJI 23.02: “Many factors or things may operate either independently or together to cause injury. In such a case each may be a cause of the injury even though the others by themselves would have been sufficient to cause the same injury.

“If you find that the defendant's act or omission was a substantial factor in causing the injury to the plaintiff, you may find that the defendant's conduct caused the injury even though it was not the only cause. A substantial factor is an important factor and not one that is insignificant.”

Defendant requested that the trial court provide a “but for” causation instruction: “[Defendant's] conduct is a cause of plaintiff's injury if the collision between her car and the *** SUV would not have occurred but for that conduct and plaintiff's injuries would not have occurred but for that conduct. Conversely, [defendant's] conduct is not a cause of plaintiff's injuries if those injuries would have occurred without that conduct.” *517 In support of his request for the substantial-factor instruction, plaintiff argued that although Smith testified that plaintiff's injuries were probably caused by the rear-end collision, Polin testified that plaintiff's injuries could have been caused by the sudden stop, the rear-end collision, or a combination of both. 3 Plaintiff also argued that if the jury found that plaintiff's injuries were caused by a combination of the sudden stop and the rear-end collision, and it only had the but-for instruction on causation, it might try to apportion the damages between each segment of the event and award only those apportioned to the rear-end collision, even though the law would permit them to find that defendant caused all of plaintiff's damages so long as the rear-end impact was a substantial factor in causing those injuries. Plaintiff argued that the substantial-factor instruction would correctly explain that to the jury. **4 Defendant argued that under Joshi v. Providence Health System, 342 Or. 152, 149 P.3d 1164 (2006), use of

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the substantial-factor instruction is proper “only in limited situations involving multiple tortfeasors,” and that the but-for instruction is the legally correct choice here, because “there are not multiple alleged tortfeasors involved.” Defendant's argument in favor of the but-for instruction and against the substantial-factor instruction reduced to this: Plaintiff did not allege that multiple tortfeasors combined to cause his injuries, and even if he had, defendant would not be liable for those injuries unless plaintiff proved that his injuries would not have occurred in the absence of defendant's negligent conduct.

The trial court, relying primarily on Joshi, noted that plaintiff had not alleged that two tortfeasors acted in concert to cause his injuries, and determined that the “but for” causation instruction was “better suited” for the facts of this case. Thus, along with other instructions, the court instructed the jury: “The Defendant's conduct is a cause of the Plaintiff's injury if the injury would not have occurred but for that conduct. *518 Conversely, the Defendant's conduct is not a cause of the Plaintiff's injury if that injury would have occurred without that conduct.” 4 Ultimately, plaintiff asked the jury to award damages for past and future medical expenses in an amount up to $131,630.57 and noneconomic damages of $250,000. Defendant suggested to the jury that plaintiff's damages would, at most, be for the cost of chiropractic care for a particular period of time, which cost just under $7,100.00. The jury found that defendant was negligent, and that her negligence was “a cause of damages to the plaintiff.” The jury awarded $4,339.98 for past medical expenses and $2,400.00 for noneconomic damages.

E. The jury instructions – on appeal On appeal, plaintiff asserts that the trial court erred by failing to instruct the jury that conduct is a cause of injury when it is a substantial factor in producing it, even though it is not the only cause. Plaintiff contends that in a case such as this one, where the evidence would support a finding that multiple factors contributed to the injuries for which plaintiff sought compensation, the proper test for the causal link between defendant's negligence and plaintiff's injuries is reflected in the substantial-factor instruction. Plaintiff argues that his requested instruction was a correct *519 statement of the law and that, given how the case was presented and how defendant argued her defense, the but-for instruction was legally insufficient. He argues further that the but-for instruction improperly instructs the jury that conduct causes injury only if the injury could not otherwise have occurred,

suggesting that defendant's conduct must have been the major —or predominant—causative factor. **5 In response, defendant contends that the court properly instructed the jury on causation. She asserts that, based on plaintiff's theory of causation and the evidence he presented in support of that theory, neither the sudden stop nor the pre-existing condition would have caused plaintiff's injuries absent defendant's negligent conduct. Therefore, according to defendant, the trial court correctly determined that plaintiff was required to prove that but for the rear-end collision, he would not have been injured.

III. ANALYSIS “[J]ury instructions matter.” Ossanna, 365 Or. at 221, 445 P.3d 281. They matter because they tell the jury “what laws [to apply] in the case.” Id. Jury instructions must be understandable. The parties are entitled to jury instructions that are “plain, clear, [and] simple.” Williams et al. v. Portland Gen. Elec., 195 Or. 597, 610, 247 P.2d 494 (1952). “Where the law is complex, it is even more important to instruct in clear and simple terms.”

Holbrook v. Amsberry, 289 Or App 226, 248, 410 P.3d 289 (2017). Given that each juror brings their own unique set of life experiences to court, the need for clarity in each particular case cannot be overstated. For a jury to effectively use the court's instructions on the law, its members must be able to understand those instructions so that they can then correctly and meaningfully apply the law to the evidence and reach a legally valid verdict.

Jury instructions must be connected to the case theories and evidence. “[A] party is entitled to a jury instruction on its theory of the case if the requested instruction correctly states the law, is based on the operative pleadings, and is supported by the evidence. A trial court, however, is not required to *520 give a requested instruction if another instruction adequately addresses the issue.”

Ossanna, 365 Or. at 212-13, 445 P.3d 281 (internal quotation marks and citations omitted).

A. Causation as an Element of a Claim for Negligence in the Post-Haas Era

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Sodaro v. Boyd, --- P.3d ---- (2023) 325 Or.App. 511

We begin with the Supreme Court's recent decision in Haas v. Estate of Mark Steven Carter, 370 Or. 742, 525 P.3d 451 (2023), which issued after the parties briefed and argued this appeal. 5 Although distinguishable on some of the underlying facts, Haas concerns the same jury instructions that are at issue here and is controlling authority as we review those instructions in the context of this case. Our analysis necessarily applies the law that is now in effect because “[t]he ‘benchmark’ for error is the law existing as of the time the appeal is decided.” State v. Jury, 185 Or App 132, 137, 57 P.3d 970 (2002), rev. den., 335 Or. 504, 72 P.3d 636 (2003).

Causation “is a purely factual matter” that is distinct from proximate cause and legal cause, both of which have been abolished in Oregon. Haas, 370 Or. at 748, 525 P.3d 451 (quoting Lasley v. Combined Transport, Inc., 351 Or. 1, 6-7, 261 P.3d 1215 (2011)). “Causation in fact is established when someone examining the event without regard to legal consequences would conclude that the allegedly faulty conduct or condition in fact played a role in its occurrence.”

Id. (internal brackets and quotation marks omitted). In the court's discussion of causation, it expressly agreed that: **6 “[F]actual causation ‘is not a quest for a sole cause.

Probably it cannot be said of any event that it has a single causal antecedent; usually there are many.’ ” Id. at 748, 525 P.3d 451 (quoting Fowler V. Harper, Fleming James, Jr., & Oscar S. Gray, 4 Harper, James and Gray on Torts § 20.2, 100 (3d ed. 2007) (emphasis in original)). The question, then, of whether a defendant's specific act or failure to act was a *521 cause-in-fact of a plaintiff's harm requires an answer to this question: would the harm have occurred but for the defendant's conduct? Id. at 749, 525 P.3d 451. Stated another way—would the harm have occurred in the absence of the defendant's conduct? If the answer to the question —stated either way—is no, then the defendant's negligent conduct is a cause of the injuries. Stated yet another way, if the plaintiff's injuries would have occurred in the absence of the defendant's conduct, then the defendant's conduct was not a cause of those injuries in the context of a negligence claim.

The fact that more than one event, act, or circumstance might play a role in bringing about the injuries is simply part of the landscape that the jury is tasked with considering as it evaluates whether, in fact, the defendant was a cause of the injuries. It is helpful to remember that cause-in-fact is not the same thing as liability; rather, it is one element of a negligence claim that, if proven, could lead to liability. Id. at 749 n 5, 525 P.3d 451.

The Supreme Court concluded that the but-for test for causation applies in most negligence cases, and that the butfor jury instruction is likewise the appropriate instruction to be given in most cases. Id. at 755, 757-58, 525 P.3d 451.

The substantial-factor test, on the other hand, “was developed primarily for *** the situation in which the concurrent conduct of two or more causes combine to create an injury, and either one of those causes, operating alone, would have been sufficient to produce the same result.” Id. at 750, 525 P.3d 451 (citing Keeton, Prosser and Keeton on The Law of Torts § 41, 268 (5th ed. 1984); Harper, 4 Harper, James and Gray on Torts § 20.2, 100-01 (3d ed 2007)). The court explained that the but-for test does not reduce causation to a single cause: “[T]here may be many causes of a plaintiff's harm and *** when multiple tortfeasors contribute to that harm, all may be held liable for it: When an injury would not have occurred without the combined negligence of many, the negligence of each is a but-for cause of the resulting injury.”

Id. at 753, 525 P.3d 451.

The plaintiffs in Haas, like the plaintiff here, argued broadly “that a substantial factor instruction is required in all multiple causation negligence cases and that a but-for instruction does not suffice.” Id. at 757, 525 P.3d 451. They also argued, as does plaintiff here, “that a but-for *522 instruction necessarily indicates that a defendant cannot be held liable unless the defendant's conduct was the sole or predominate cause of the plaintiffs’ injuries.” Id. The court, in Haas, rejected those broad assertions, stating that “[m]ost negligence cases include evidence of multiple causal factors, and in most cases, a but-for instruction correctly describes the necessary cause-in-fact relationship. A but-for instruction does not fail in every multiple causation case, nor does it implicitly tell a jury that it must find that the defendant's conduct was the sole or predominate cause of the alleged harm.” **7 Id. at 757-58, 525 P.3d 451.

In concluding that the trial court did not err in declining to give the substantial-factor instruction in Haas, the Supreme Court found it “significant that plaintiffs [did] not contend that this [was] one of the exceptional instances in which the butfor instruction fails[.]” Id. at 758, 525 P.3d 451. The plaintiffs

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had not argued that the circumstances in that case were in any way exceptional or that the facts of that case were such that the but-for instruction would not correctly describe the required causal relationship between the defendant's conduct and the plaintiffs’ injuries. They instead argued that causation is a “particularly difficult concept” in cases where there are preexisting medical conditions. Id. The court acknowledged that a defendant may point their finger at other parties or causes—the so-called empty chair defense—in an effort to escape liability but concluded that “such an argument does not render a but-for instruction erroneous.” Id. at 759, 525 P.3d 451. The court held that a substantial-factor instruction is not required in all multiple causation negligence cases and that, under the circumstances of Haas, it was not error to decline to give that instruction. Id. at 762-63, 525 P.3d 451.

B. Parties are entitled to instructions that properly address their theory of the case as well as that put forward by their adversary.

We reject the contention that plaintiff was restricted to a jury instruction on causation only if it was supported by *523 his complaint or the evidence that he produced during the trial.

As the Supreme Court explained: “[W]e do not agree that a party is entitled to an instruction only if that party adduces evidence or makes an argument material to the requested instruction. A party may be entitled to an instruction that addresses an opposing party's evidence or argument.”

Id. at 759 n 13, 525 P.3d 451. Although plaintiff named only one defendant here, his pleadings describe the rearend collision, the sudden stop, and his preexisting medical conditions. Plaintiff's counsel described both segments of the accident as well as the preexisting conditions in his opening statement and closing argument. Defendant raised an affirmative defense in which she alleged that the sudden stop—not the rear-end collision—was the cause of plaintiff's injuries, and she argued that his preexisting injuries accounted for much of his pain and related medical care. The sudden stop, the rear-end collision, and the preexisting injuries were the subject of much testimony and debate throughout the trial. Plaintiff was entitled to request jury instructions that addressed both his theory of the case as well as that put forward by defendant.

C. The but-for instruction on causation is proper in most multiple-cause negligence cases.

To the extent that plaintiff argues that all multiplecause negligence cases merit giving the substantial-factor instruction, Haas has squarely rejected that argument and we, in turn, must do the same. Id. at 758, 525 P.3d 451. Such a broad rule would also be inconsistent with Joshi, where the court stated that the but-for and substantial-factor standards “produce the same result in most cases.” 342 Or. at 162, 149 P.3d 1164. But the court did, in Joshi, describe certain situations in which the but-for test would fail, requiring that the substantial factor instruction be given: (1) “where ‘two causes concur to bring about an event, and either one of them, operating alone, would have been sufficient to cause the identical result’ ”; (2) “ ‘where a similar, but not identical result would have followed without the defendant's act’ ”; and (3) “ ‘where one defendant has made a clearly proved but quite insignificant contribution to the result.’ ” Id. at 161, 149 P.3d 1164 (quoting Prosser and Keeton on The *524 Law of Torts § 41 at 267-68). See also Haas, 370 Or. at 750-52, 525 P.3d 451 (explaining that while Joshi is distinguishable from Haas because Joshi was a wrongful death case about the sufficiency of the evidence on causation, it relied on the same treatise provisions from Prosser and Keeton and agreed that the substantial-factor standard had not been replaced by the but-for standard, but rather, those standards apply to different types of negligence cases).

D. Plaintiff has not argued that exceptional circumstances warranted the use of the substantial-factor instruction. **8 Plaintiff did not, and does not, argue that this case fits into any of the three scenarios, described in Joshi, that would render the but-for instruction an inadequate or unclear statement of the law on causation. Plaintiff did argue that there was a risk that the but-for instruction would confuse the jury on how to evaluate defendant's conduct on the question of causation. Plaintiff focused on the evidence, which included, among other things, the testimony of three expert witnesses, and argued that a jury could conclude that multiple factors or events concurred or combined to cause his injuries. In response, defendant argued that this was the type of negligence case where the but-for instruction would provide a clear statement about causation. 6 We agree with defendant.

E. It was not error to not give the substantial-factor instruction.

The remaining arguments made by plaintiff on appeal do not persuade us that the trial court erred by not giving the substantial-factor instruction.

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Sodaro v. Boyd, --- P.3d ---- (2023) 325 Or.App. 511

*525 The jury deliberated and returned a verdict on which it answered the specific question, “Was the defendant's negligence a cause of damages to the plaintiff?” with a yes. We reject plaintiff's contention that because the jury was instructed only on but-for causation, it would not have understood that defendant's conduct would be a cause of plaintiff's injuries if the collision had been a substantial factor, although not necessarily the only factor, in causing those injuries. Plainly put, the jury found that defendant's conduct caused plaintiff's injuries.

We also reject plaintiff's argument that because the jury concluded that the injuries would not have occurred in the absence of the rear-end collision, it would somehow conclude that it was to affirmatively apportion damages between defendant and any other causes, including the sudden stop.

The record does not contain evidence that the sudden stop was, more probably than not, a cause of plaintiff's injuries.

Certainly, no expert offered that opinion to a reasonable degree of probability. The jury was properly instructed by the trial court not to decide the case on “guess-work, conjecture, or speculation.” They were also instructed on damages, and plaintiff has not, and does not, challenge those instructions in any way. Given that we presume juries will follow the court's

instructions, State v. Shinnick, 288 Or App 847, 848-49, 407 P.3d 877 (2017), rev. den., 362 Or. 794, 416 P.3d 1103 (2018), and given the evidentiary record viewed in light of Haas, it is difficult to see how the trial court would have been required to give the substantial-factor instruction.

Finally, we are not persuaded that the amount of the jury's damage award alone reflects that it misunderstood the instruction on causation. The jury found that defendant caused plaintiff's injuries. Given that it found the necessary causal link, the more likely explanation for the low monetary award is that the jury found that the injuries were not as significant as claimed. Jurors were given a number of tools to evaluate witness testimony through instructions that both parties agreed to that might reasonably have led to the final award. We cannot say, on this record, that the amount of the award was driven by, or connected to, a *526 misunderstanding of the causation instruction. The trial court did not err. **9 Affirmed.

All Citations --- P.3d ----, 325 Or.App. 511, 2023 WL 3085811

Footnotes 1

The jury awarded plaintiff total damages in an amount that was less than two percent of his prayer.

2

We refer to those sequential events as the sudden stop and the rear-end collision.

3

Plaintiff had included both the but-for and substantial-factor instructions in his proposed jury instructions; however, based on the evidence at trial, plaintiff ultimately asked the trial court to instruct the jury with only the substantial-factor instruction.

4

The court instructed the jury about plaintiff's preexisting condition as follows: “Damages previous infirm condition. If you find that the Plaintiff has a bodily condition that predisposed him to be more subject to injury than a person in normal health, nevertheless, the Defendant would be liable for any and all injuries and damage that may have been suffered by the Plaintiff as a result of the negligence of the Defendant. Even though those injuries, due to the prior condition, have been greater than those that would have been suffered [by] another person under that same circumstance[ ].

“Damages, aggravation or pre-existing injury or disability. In the present case, the Plaintiff has alleged that the injury which he sustained as a result of the negligence of the Defendant, aggravated a pre-existing injury of his.

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“In determining the amount of damages, if any, to be awarded [to] the Plaintiff in this case, you will allow him reasonable compensation for the consequences of any such aggravation that you find to have taken place as a result of the Defendant's negligence.

The recovery should not include damages for the earlier injury, only those that are due to its enhancement or aggravation.”

Plaintiff did not assign error to the giving of those instructions.

5

In Haas, the plaintiffs’ stopped car was hit by a car driven by the defendant; the plaintiffs brought a negligence action. The plaintiffs had preexisting conditions, and therefore, according to the plaintiffs, the jury was confronted with multiple possible causes of the plaintiffs’ neck and back problems—the preexisting conditions and the auto collision. 370 Or. at 744-46, 525 P.3d 451.

6

We note that defense counsel also made this argument:

“So giving [the substantial-factor] instruction, Your Honor, invites the risk that the jury will render a verdict against my client even if it finds that the phantom driver's conduct alone would have been sufficient to cause the harm, which does not satisfy Plaintiff's burden.”

But that argument describes one of the Joshi scenarios where the but-for test would fail, making the substantial-factor instruction a more appropriate choice. While that would have been an argument more aligned with plaintiff's position, it is clear that plaintiff did not make that argument. Nor did he argue that this case fits within any of the Joshi scenarios that would support use of the substantial-factor instruction. And although there are times when inartful arguments are given context and clarity by the arguments they draw in opposition, that is not the case here.

End of Document

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8

Martineau v. McKenzie-Willamette Medical Center, 320 Or.App. 534 (2022) 514 P.3d 520

320 Or.App. 534 Court of Appeals of Oregon.

Jamie MARTINEAU, Personal Representative of the Decedent, Aaron Martineau, Plaintiff-Appellant, v.

MCKENZIE-WILLAMETTE MEDICAL CENTER, an assumed business name of McKenzie-Willamette Regional Medical Center Associates, a limited liability company, Defendant, and Radiology Associates, P.C., a corporation; Dariusz Zawierucha, M.D., an individual; Cascade Medical Associates, the assumed business name of Doctor's Emergency Room Corporation, P.C., a corporation; and Gary Josephsen, M.D., an individual, Defendants-Respondents.

A172846 | Argued and submitted January 27, 2022. | June 29, 2022 Synopsis Background: Patient's personal representative brought medical malpractice claims against medical providers arising from patient's death after presenting to emergency room with chest pains. The Circuit Court, Lane County, Charles D. Carlson, J., dismissed personal representative's claim for loss of chance of recovery, and entered judgment on jury verdict in favor of defendants on wrongful death claim. Personal representative appealed.

Court of Appeals would address issue on appeal of whether trial court erred in dismissing claim for loss of chance of recovery; personal representative's filing of amended complaint without claim for loss of chance of recovery did not result in abandonment or withdrawal of claim; and where a decedent's injury is a loss of chance of recovery rather than death itself, the wrongful death statute does not preclude a claim for loss of chance of recovery.

Reversed and remanded.

Procedural Posture(s): On Appeal; Judgment. **523 Lane County Circuit Court, 17CV36517, Charles D. Carlson, Judge.

Attorneys and Law Firms Travis Eiva, Portland, argued the cause and filed the briefs for appellant.

Lindsey H. Hughes, Portland, argued the cause for respondents Gary Josephsen, M.D., and Cascade Medical Associates. Also on the brief were Hillary A. Taylor and Keating Jones Hughes, P.C. Alice S. Newlin, Portland, argued the cause for respondents Radiology Associates and Dariusz Zawierucha, M.D. Also on the brief were Jay W. Beattie, Nikola L. Jones, and Lindsay Hart, LLP. Before James, Presiding Judge, and Egan, Judge, and Kamins, Judge.

Opinion

Holdings: The Court of Appeals, James, P.J., held that:

JAMES, P. J.

to avoid medical malpractice liability, physician must exercise the degree of care, skill, and diligence required by law;

*536 Aaron Martineau visited the emergency room after experiencing chest pain and other symptoms. There, defendant Josephson examined him and arranged for a chest x-ray, which defendant Zawierucha read. Based on the results and on review of an electrocardiogram of a different patient, Josephson concluded that Martineau did not have an urgent cardiovascular problem or need further testing immediately.

In fact, Martineau had an urgent cardiovascular problem, and he died approximately 24 hours later.

pattern jury instruction that included statement that physician did not guarantee good result was incorrect statement of law and was likely to mislead the jury; trial court's error in its jury instruction was not harmless error;

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Plaintiff, in her capacity as personal representative of Martineau, brought medical malpractice claims against defendant Josephson and the Doctor's Emergency Room Corporation, P.C. (the ER defendants) and Zawierucha and Radiology Associates, P.C. (the radiology **524 defendants). She appeals a general judgment entered after the trial court dismissed her claim for loss of chance of recovery and after a jury returned a verdict in defendants’ favor on her wrongful death claim. Plaintiff raises five assignments of error. We write only to address two. As explained below, we conclude that the trial court erred in instructing the jury using Uniform Civil Jury Instruction (UCJI) 44.03, which is likely to mislead the jury and incorrectly states the law, and that the error was not harmless. Accordingly, plaintiff is entitled to a new trial on her wrongful death claim. We also conclude that the court erred in dismissing plaintiff's claim for loss of chance of recovery, which was pleaded as an alternative to her wrongful death claim. Our conclusion that a new trial is necessary obviates the need to address plaintiff's second through fourth assignments of error, as the evidentiary issues that they concern may not arise in the same way on remand.

We reverse and remand.

I. UCJI 44.03 We begin by considering plaintiff's fifth assignment of error, in which she contends that the court erred in instructing the jury in the language of UCJI 44.03, which provides, “Physicians are not negligent merely because their efforts were unsuccessful. A physician does not guarantee a good result by undertaking to perform a service.” *537 In objecting to the instruction, plaintiff pointed out that Oregon appellate courts have never approved giving it, and that, recently, in Sherertz v. Brownstein Rask, 288 Or. App. 719, 407 P.3d 914 (2017), we cast doubt on its correctness in general and held that, in a legal malpractice case that turned on the attorney's promise to accomplish a particular result, it was reversible error for the court to give a modified version of it. In this case, the court rejected plaintiff's objection without explanation and gave the instruction.

We review a trial court's decision to give a particular instruction primarily to determine “whether the instruction, when read together with the other instructions given, completely and accurately stated the law applicable to the case.” Id. at 722, 407 P.3d 914. In any jury trial, parties are entitled to have the jury instructed in the law that governs the

case in plain, clear, simple language. Jury instructions should seek to assist and enlighten the jury, and to acquaint them in an approachable manner with the applicable law. “ ‘Everything which is reasonably capable of confusing or misleading the jury should be avoided. Instructions which mislead or confuse are ground for a reversal or a new trial.’ ” Estate of Michelle Schwarz v. Philip Morris Inc., 348 Or. 442, 454, 235 P.3d 668, adh'd to on recons, 349 Or. 521, 246 P.3d 479 (2010) (quoting Williams et al. v. Portland Gen. Elec., Co., 195 Or. 597, 610, 247 P.2d 494 (1952)).

Medical malpractice cases are “nothing more that negligence actions against medical professionals. The fundamental issue in these cases, as in all negligence cases, is whether the defendant breached the standard of care and caused injury to the plaintiff.” Rogers v. Meridian Park Hospital, 307 Or. 612, 619-20, 772 P.2d 929 (1989). Since 1975, a physician's duty of care has been codified in ORS 677.095, which now provides as follows: “A physician licensed to practice medicine or podiatry by the Oregon Medical Board has the duty to use that degree of care, skill and diligence that is used by ordinarily careful physicians in the same or similar circumstances in the community of the physician or a similar community.”

To understand the instruction at issue here, it is necessary to place it in its historical context. As the Oregon *538 Supreme Court began to articulate the standard of care for physicians that was eventually codified in 1975, the court adopted two rules, commonly stated together, that it often applied in the course of evaluating the sufficiency of the evidence of negligence in medical malpractice cases.

One of the rules was the “error-of-judgment rule,” which distinguishes choices, or judgments, that later turn out to be incorrect, from medical negligence. Rogers, 307 Or. at 615, 772 P.2d 929. See, e.g., Lehman v. Knott, 100 Or. 59, 71, 196 P. 476 (1921) (“Improper treatment by a surgeon might be **525 due to an error in judgment of a skillful surgeon honestly and carefully exercised, and not constitute negligent treatment.”); see also Hills v. Shaw, 69 Or. 460, 468, 137 P. 229 (1913) (“The distinction between an error of judgment and negligence is not easily determined.”).

In Rogers, the Supreme Court held that, in light of the statutory standard of care, it is error to instruct the jury in a medical malpractice case regarding a physician's judgment.

307 Or. at 620, 772 P.2d 929. The court noted that the error-of-judgment rule derived both from the principle that a physician is not a warrantor of a cure and from the recognition

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that there may be more than one acceptable treatment for a given condition and that a choice between those treatments is not necessarily negligent. Id. at 615-16, 772 P.2d 929.

Both of those concepts have been subsumed by the standard of care for physicians: “The fundamental issue in [medical malpractice] cases, as in all negligence cases, is whether the defendant breached the standard of care and caused injury to the plaintiff.” Id. at 619, 772 P.2d 929.

The court concluded that the error-of-judgment instruction given in Rogers “obscures the fact that, to avoid liability, the defendant must exercise the degree of care, skill, and diligence required by law.” Id. That is, by directing the jury's attention to whether there are reasonable differences of opinion in the medical community and whether a physician exercised reasonable judgment, the instruction directed attention away from what is actually the critical issue in a medical malpractice case—whether the physician exercised reasonable care. Id. For that reason, and because the phrase “error of judgment” was also confusing, the court *539 held that it was error to instruct the jury in terms of a physician's judgment: “[S]uch instructions not only confuse, but they are also incorrect because they suggest that substandard conduct is permissible if it is garbed as an ‘exercise of judgment.’ ” Id. at 620, 772 P.2d 929.

The second rule that the Supreme Court adopted in early cases —and that, as the court noted in Rogers, formed one of the grounds on which the error-of-judgment rule was based: “[A] physician is not a warrantor of a cure.” Crewse v. Munroe, 224 Or. 174, 177, 355 P.2d 637 (1960); see also, e.g., Hotelling v. Walther, 169 Or. 559, 562, 130 P.2d 944 (1942) (“Dentists, like physicians and surgeons, are not guarantors of good results.”).

The idea that a physician is not a warrantor of a cure is intertwined in Oregon appellate case law with a concept that the court did not discuss in Rogers—namely, res ipsa loquitur, a doctrine of negligence in which an accident or injury “speaks for itself.” Watzig v. Tobin, 292 Or. 645, 648, 642 P.2d 651 (1982). “In essence, [res ipsa loquitur] is a rule of circumstantial evidence that allows an inference of negligence to be drawn if the accident is of a kind which ordinarily would not have occurred in the absence of the defendant's negligence, even though it is impossible to determine the specific way in which the defendant was negligent.” Id. Before presenting any argument of that kind to the jury, the party invoking the doctrine must present evidence sufficient to “establish that the harm more probably than

not would not have occurred in the absence of negligence on the part of the defendant. That determination cannot be based on speculation and conjecture and cannot be drawn from probabilities evenly balanced.” Hagler v. Coastal Farm Holdings, Inc., 354 Or. 132, 146, 309 P.3d 1073 (2013) (internal citation and quotation marks omitted).

In early medical malpractice cases, plaintiffs sometimes implicitly or explicitly sought to apply the doctrine of res ipsa loquitur to support an argument that, because a physician's treatments did not succeed, the physician must have been negligent. For example, in Hills, a plaintiff contended that the defendant physician had been negligent in setting a broken leg in a way that caused the broken bones *540 not to join while they healed. 69 Or. at 461-62, 137 P. 229. The court observed, “To all appearances, so far as the testimony discloses, the leg was treated by the usual methods known and approved by reputable surgeons.” Id. at 464, 137 P. 229. After quoting two cases discussing the applicability of res ipsa loquitur to medical malpractice claims and citing other cases, the court explained: **526 “The substance of the doctrine taught by these cases is that if a regularly licensed physician with reasonable diligence employs the skill of which he is possessed in treating a surgical case, he is not liable for an error of judgment, and that the mere fact that an untoward result ensues is not in any sense evidence of negligence.

There are so many elements combating the surgeon in his efforts to restore a patient to bodily soundness that he can do no more than exercise his best skill and judgment to accomplish the desired result.”

Id. at 467-68, 137 P. 229 (emphasis added). Applying that rule to the facts, the court explained that the plaintiff's evidence was insufficient to prove negligence: “No lack of application of the ordinary remedies is shown.

Reduced to its lowest terms, the case is one where the surgeon has treated a case in which the result was a failure.

There is nothing to show that he did not do his best with what skill he possessed. The error of plaintiff's contention consists in relying upon the abortive result of the treatment as an evidence of negligence on the part of the defendant, without showing further that some careless act or omission of his produced that undesirable consequence. To hold defendant liable under such circumstances would be to make him an absolute insurer of success in every operation which he undertook.”

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Martineau v. McKenzie-Willamette Medical Center, 320 Or.App. 534 (2022) 514 P.3d 520

Id. at 469, 137 P. 229 (emphasis added); see also Emerson v. Lumbermen's Hospital Assn., 100 Or. 472, 480, 481, 198 P. 231 (1921) (the death of the plaintiffs’ decedent after his leg was crushed by a railroad car and he was treated by the defendant doctor was “no evidence of want of care, or of unskillfulness or failure to administer proper treatment”; nonsuit was proper where there was “an entire lack of testimony as to whether or not [the defendant doctor] adopted and applied the proper method of treating” the decedent). In those cases, among others, the Supreme Court relied on the principle that a *541 physician does not guarantee a cure to reject the plaintiffs’ express or implicit res ipsa loquitur arguments.

That principle—that, because a physician does not guarantee a cure, an inference of negligence does not arise under the concept of res ipsa loquitur simply from a poor outcome in a medical malpractice case—is now well established in the Supreme Court's and our own case law. See, e.g., Ritter v.

Sivils, 206 Or. 410, 413-14, 293 P.2d 211 (1956) (finding it unnecessary to cite authority for the proposition that “[a] chiropractor is not a warrantor of cure, and if a good result does not ensue from his efforts the doctrine of res ipsa loquitur is not available to his erstwhile patient,” among others, because the propositions “have been many times enunciated by this court”); Trees v. Ordonez, 250 Or. App. 229, 241, 279 P.3d 337 (2012), rev'd on other grounds, 354 Or. 197, 311 P.3d 848 (2013) (noting Oregon courts’ reluctance to apply res ipsa loquitur in medical malpractice cases “based on the concern that the doctrine will impinge on the established principle that a physician is not a warrantor of a cure, and if a good result does not ensue from his efforts the doctrine of res ipsa loquitur is not available to his erstwhile patient” (internal quotation marks and ellipsis omitted)).

Thus, the principle that a physician is not a warrantor of a cure is potentially significant in two ways in a medical malpractice action. First, as the Supreme Court suggested in Rogers, it, and the error-of-judgment rule that rests, in part, on it, are early attempts at articulating the standard of care for physicians, albeit ones that approach the problem somewhat differently than the formulation that the Supreme Court, and the legislature, ultimately settled on. Second, the principle that a physician is not a guarantor of a cure is also a specific application of what courts now recognize as the general requirement that a party invoking the doctrine of res ipsa loquitur “must establish that the harm more probably than not would not have occurred in the absence of negligence

on the part of the defendant.” 1 **527 Hagler, 354 Or. at 146, 309 P.3d 1073 (internal quotation marks omitted). *542 With that historical context in mind, we now turn to the jury instruction at issue. Again, the instruction provides, “Physicians are not negligent merely because their efforts were unsuccessful. A physician does not guarantee a good result by undertaking to perform a service.” UCJI 44.03.

We begin by noting that Oregon courts have repeatedly admonished that not every principle of law stated in an appellate decision makes a good jury instruction: “An instruction that accurately quotes or faithfully paraphrases an appellate decision is not necessarily beyond reproach. Indeed, ‘it is not advisable in charging the jury to use the exact words of an appellate court opinion * * *.’ Ireland v. Mitchell, 226 Or[.] 286, 294, 359 P[.]2d 894 (1961). In Amfac Foods[, Inc.] v. Int'l Systems [& Co.], 294 Or[.] 94, 99 n[.] 3, 654 P[.]2d 1092 (1982), we warned that because many appellate opinions are written with no view that they will be turned into instructions, care must be exercised in using the language of these opinions for instructions to juries. See also Thornburg v. Port of Portland, 244 Or[.] 69, 73, 415 P[.]2d 750 (1966).”

Rogers, 307 Or. at 616, 772 P.2d 929. See also, e.g., State v.

Avila, 318 Or. App. 284, 290-91, 507 P.3d 704 (2022) (noting that “the Miles instruction has been a case study in the risks attendant to drawing jury instructions from short snippets of opinions”); Sherertz, 288 Or. App. at 725 n. 2, 407 P.3d 914 (“Jury instructions drawn from short snippets of opinions pose challenges.”). UCJI 44.03 provides good example of the hazards of that practice. *543 Although, as we have explained, the principle that a physician is not a warrantor of a cure has often been stated in appellate cases, the instruction nevertheless is not useful in the jury's assessment of a physician's negligence because it both obscures the correct legal inquiry and is incorrect as a categorical statement of the law. First, to the extent that the principle that a physician does not guarantee a good result is an articulation of the standard of care, it suffers from the same problem that the error-of-judgment instruction rejected in Rogers did: Its inclusion in the instructions “obscures the fact that, to avoid liability, the defendant must exercise the degree of care, skill, and diligence required by law.” 307 Or. at 619, 772 P.2d 929. By directing the jury's attention to the success or lack thereof of a physician's efforts and what “result” a physician promises by undertaking to provide

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medical services, it directs attention away from what the legislature has established as the critical question: whether the physician used “that degree of care, skill and diligence that is used by ordinarily careful physicians in the same or similar circumstances in the community of the physician or a similar community.” ORS 677.095.

The latter sentence of the instruction—“[a] physician does not guarantee a good result by undertaking to perform a service”—is incorrect when stated as a categorical proposition. Critically, the instruction uses the word “result” not “cure.” Although a physician usually does not guarantee a cure by undertaking to perform medical services—that is, medical treatment is inherently uncertain in many ways, and the likelihood that a medical problem will be conclusively resolved through any particular course of **528 treatment varies depending on a vast array of circumstances—there are situations in which a physician guarantees some particular good result—a “consequence or effect”—by undertaking to perform medical services. Webster's Third New Int'l Dictionary 555 (unabridged ed. 2002) (defining “cure” as “recovery from a disease”); id. at 1937 (defining “result” as anything “that results as a consequence, effect, issue, or conclusion”). A physician does guarantee avoidance of injuries of a kind that do not occur in the absence of medical negligence—for example, an injury caused by leaving a clamp inside a patient after surgery. *544 Fieux, 159 Or. App. at 644-45, 978 P.2d 429. Further, there are factual scenarios outside of res ipsa loquitur in which a physician guarantees some particular result, in the sense of a consequence or effect—even if that result is not a cure. See, e.g., Emerson, 100 Or. at 481, 198 P. 231 (noting that the principle that a physician does not guarantee a cure applies only “in the absence of a contract to that effect”); Sherertz, 288 Or. App. at 725, 407 P.3d 914 (Previous cases “do not support the proposition that a physician, as a matter of law, can never guarantee some result. For example, if a patient sees a physician to have her appendix removed, one expected ‘result’ is the removal of an appendix, not an amputation of a foot.” (Emphasis added.)). 2 Thus, there are two problems with the instruction: it obscures the fact that the correct focus is on application of the standard of care, and, because the meaning of “result” is broader than the meaning of “cure,” its statement that “[a] physician does not guarantee a good result by undertaking to perform a service” is incorrect when stated—as it is in the instruction —as a universal principle. To the extent that the instruction could add any clarity to the jury's understanding of the law,

any potential benefit is fatally outweighed by its potential to confuse the jury and its incorrectness as a statement of the law. 3 In short, UCJI 44.03 is an incorrect statement of the law, and likely to mislead the jury. It was error for the court to give it.

Having determined that giving the instruction was error, we must next consider whether the error was harmless. In the context of instructional error, whether an error is harmless turns on whether “the error had a detrimental influence on a party's rights.” *545 Purdy v. Deere & Co., 355 Or. 204, 226, 324 P.3d 455 (2014) (internal quotation marks omitted); see also ORS 19.415(2) (“No judgment shall be reversed or modified except for error substantially affecting the rights of a party.”). We must assess “the extent to which an error skewed the odds against a legally correct result.” Purdy, 355 Or. at 226, 324 P.3d 455. “[L]ittle likelihood is not enough, but more —that is, ‘some’ or a ‘significant’ likelihood that the error influenced the result—will suffice for reversal.” Id. As we set forth at the beginning, the evidence showed that Martineau's trip to the emergency room was prompted by chest pain and other symptoms. The ER defendants examined him and took a chest x-ray, which the radiology defendants read, and, based on the results and on review of an electrocardiogram of a different patient, defendants concluded that the decedent did not have an urgent cardiovascular problem or need further testing immediately.

Martineau died within 24 hours of that conclusion.

Plaintiff's theory of the case was that defendants negligently failed to recognize the urgency of the decedent's condition when he came to the emergency room. She argued **529 that the decedent “did his part” when he went to the emergency room and informed the ER defendants of his symptoms; after the decedent did that, she contended, it was up to the defendants to correctly determine that he needed a CT scan to rule out the possibility that he was suffering from an urgent cardiovascular problem. If defendants had done that, plaintiff argued, the CT scan would have identified the problem and emergency surgery could have saved his life.

Plaintiff contended that the risk from giving the instruction in this case was that, in light of the instruction that no “good result” was promised, the jury might reason that defendants’ duty of care did not require defendants to order a CT scan because the CT scan—which was the main focus of plaintiff's theory of the case and argument to the jury—was the “good result” referred to in the instruction.

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We conclude that the error was not harmless. As described above, the instruction is misleading because it suggests that the results of a physician's efforts are relevant to the determination of negligence in some way that *546 is independent of the standard of care. It could have caused the jury to reason that conduct that failed to meet the standard of care nonetheless was not negligent because a physician does not promise a good result. See Rogers, 307 Or. at 620, 772 P.2d 929 (error-of-judgment instructions are “incorrect because they suggest that substandard conduct is permissible if it is garbed as an ‘exercise of judgment’ ”). The jury could have applied that principle to, for example, the radiology defendants’ reading of the x-ray or the fact that the ER defendants evaluated the electrocardiogram of a different patient, concluding that those acts were not done with the degree of care, skill, and diligence required by law but that they nevertheless were not negligent because no good result was promised.

That risk of misleading the jury was particularly pronounced here, where plaintiff's theory of the case turned on defendants’ failure to reach a particular result that, in plaintiff's view, was compelled under the circumstances by the standard of care. Plaintiff's case exemplifies the difference between guaranteeing a cure and guaranteeing a result. Sometimes, the minimum professional standard of care does, in fact, dictate a result—a follow up, a test, an action. Here, plaintiff argued that, given their roles as emergency room personnel, and in light of the decedent's cardiovascular symptoms, defendants were obliged to examine and test plaintiff sufficiently to discover whether he had a condition that needed care urgently.

That, plaintiff contended, is what emergency rooms are for.

In plaintiff's view, having undertaken to perform the service of determining whether plaintiff had an urgent cardiovascular condition, defendants were obliged to conduct a thorough examination in accord with the standard of care, including testing and performance of a CT scan, which, accordingly to plaintiff, would have saved the decedent's life.

Given that theory of the case, the instruction that “[a] physician does not guarantee a good result by undertaking to perform a service” may well have led the jury to conclude that, even if a CT scan was required under the standard of care, defendants did not need to order it because they had not guaranteed that they would reach that “good result.” As litigated, we cannot conclude that there is not *547 “some” likelihood that the erroneous instruction influenced the jury's conceptualization of the standard of care, and accordingly, the

result. Purdy, 355 Or. at 226, 324 P.3d 455. Therefore, the instructional error was not harmless.

II. LOSS OF CHANCE CLAIM Next, we consider plaintiff's first assignment of error, in which she argues that the court erred in dismissing, pursuant to ORCP 21 A(1)(h), her claim for loss of chance of survival of the decedent, which she alleged as an alternative to her wrongful death claim: “Based on the aforementioned conduct, defendants hospital, ER corporation, ER physician, radiology corporation, and radiologist caused [decedent] to suffer a loss of a chance at a better medical outcome that he would have been able to pursue as a negligence claim had he survived. Those economic and noneconomic damages will **530 be determined by the jury, in accordance with the law, and are not to exceed $5,000,000.00.”

The radiology defendants, but not the ER defendants, moved to dismiss that claim for failure to state a claim or, alternatively, for an order requiring plaintiff to make the allegations more definite and certain. In support of the motions, they made two arguments: First, they argued that, as a matter of law, a plaintiff “is not permitted to plead both wrongful death and survivorship claims arising from the same negligence and injuries,” relying on the text of ORS 30.075 and Supreme Court case law. Second, they argued that plaintiff had not “adequately pleaded a loss of chance claim because Plaintiff has not alleged the percentage chance lost to a reasonable medical probability, and has not identified a significant or substantial opportunity for treatment missed as a result of Defendants’ care.”

In her response, plaintiff disagreed that the relevant case law required more specific pleading of the loss of chance.

Alternatively, she proposed the following, with the proposed addition in boldface, to make the allegations more definite: “Based on the aforementioned conduct, defendants hospital, ER corporation, ER physician, radiology corporation, and radiologist caused [decedent] to suffer a loss of a *548 [greater than 30%] chance at a better medical outcome that he would have been able to pursue as a negligence claim had he survived.”

The trial court did not signal how it was leaning, but plaintiff noted, at the end of the argument, “I just wanted to let

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you know in our briefing we just—we offer the Court an alternative more definite pleading, I just want to make sure the Court was aware of that.” The trial court responded, “I saw that,” and then said that it would issue a ruling later that day. The court did so, issuing an order that stated simply, “Motion No. 2—Motion to dismiss Claim Three is GRANTED,” followed by, “Plaintiff has 20 days to replead.”

Plaintiff then filed an amended complaint, which omitted the loss-of-chance claim entirely.

A. Procedural Arguments As a predicate matter, each group of defendants raises procedural reasons that we should not address the merits of the first assignment of error. The radiology defendants contend that, if we reject plaintiff's other assignments of error, regarding the legitimacy of the jury's verdict, any error was harmless as to them, because the jury found that they were not negligent and, accordingly, would not have found in plaintiff's favor on a loss-of-chance claim if it had been tried.

The ER defendants contend that, because only the radiology defendants, not the ER defendants, moved against the lossof-chance claim, the court's grant of the motion to dismiss affected that claim only as to the radiology defendants, not as to the ER defendants. As a result, in their view, when plaintiff filed an amended complaint omitting the loss-of-chance claim altogether, she abandoned her loss-of-chance claim against the ER defendants. The ER defendants also appear to contend that plaintiff abandoned or withdrew her loss-of-chance claim against all defendants when she failed to replead it with more specificity after the trial court dismissed it.

Taking each of those arguments in turn, we first conclude that the radiology defendants’ harmlessness argument fails, as they seem to acknowledge it must, because we have concluded that the trial court erred in instructing the jury. As a result, on remand, the case will be back in a *549 pretrial posture, so any error committed pretrial must be remedied, regardless whether the error would be harmless in a different procedural posture.

The ER defendants’ contentions that plaintiff abandoned or withdrew her loss-of-chance claim are not supported by the record. As we view the record—a view with which the radiology defendants appear to agree—the trial court granted the radiology defendants’ ORCP 21 A(1)(h) motion, rather than their alternative motion for an order to make more definite and certain. If the court had done the latter, it would have ordered plaintiff to make the pleading more definite and certain, and it did not do that. Rather, it **531 dismissed the

claim, which was the appropriate course of action if it was granting the motion to dismiss.

Based on the arguments that had been presented to the court before it dismissed the claim, plaintiff could assume—as we do on appeal—that the court had dismissed the loss-ofchance claim because it agreed with the radiology defendants that, as a matter of law, plaintiff was not permitted to plead a survivorship claim based on loss of chance of recovery where, as described further below, death was an element of the claim. That reasoning was categorical, not dependent on the identity or circumstances of any particular defendant. Given that situation, it would have been unreasonable for plaintiff's new pleading to include a claim for loss of chance against the ER defendants. At best, given the court's ruling, to include that claim would have been futile; at worst, the court might have penalized plaintiff for wasting its and defendants’ time.

In omitting the loss-of-chance claim from her amended complaint, plaintiff did not abandon or withdraw that claim; rather, she recognized and gave effect to the court's ruling on the claim. On remand, plaintiff may move to amend the complaint to reallege the loss-of-chance claim against the ER defendants, who, under these circumstances, will not be prejudiced by the amendment. 4 See Eklof v. Persson, 369 Or. 531, 533, 508 P.3d 468 (2022) *550 (“[T]he gravamen of the inquiry [on a motion to amend the pleadings] under ORCP 23 A is prejudice to the opposing party[.]”).

B. Loss of Chance of Recovery 1. Legal context Turning now to the merits of plaintiff's first assignment of error, the parties’ arguments turn on the operation of ORS 30.020, ORS 30.075, and the Supreme Court's case law delineating the contours of common-law negligence claims.

We touch on each briefly before applying them to the case before us.

ORS 30.020 establishes a statutory cause of action for wrongful death. As relevant here, ORS 30.020(1) provides: “When the death of a person is caused by the wrongful act or omission of another, the personal representative of the decedent *** may maintain an action against the wrongdoer, if the decedent might have maintained an action, had the decedent lived, against the wrongdoer for an injury done by the same act or omission.”

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In general, and in Oregon, the existence of statutory wrongful death actions has prevented development of a common law of wrongful death claims. See Hughes v. PeaceHealth, 344 Or. 142, 151, 178 P.3d 225 (2008) (explaining that, with the enactment of statutory wrongful-death actions, “efforts to develop a common law of wrongful death came to a halt”; “[q]uite simply, courts were reluctant to recognize a common-law remedy that might compete with their states’ newly adopted wrongful death statutes”).

In Joshi v. Providence Health System Corp., 342 Or. 152, 157, 149 P.3d 1164 (2006), the Supreme Court interpreted the phrase “when the death of a person is caused by the wrongful act or omission of another,” ORS 30.020(1), and held that, in cases that do not fall within narrow exceptions, the word “caused” refers to a “but-for” test of causation: A plaintiff must show that, but for the negligence of the defendant, the decedent would not have died. Joshi, 342 Or. at 162, 149 P.3d 1164.

The court also declined to adopt a theory of loss of chance of survival as an alternative theory of recovery—one *551 that would include a “substantial factor” or “substantial possibility” test, rather than a “but-for” test, for causation—in an action under the wrongful death statute. Id. at 163-64, 149 P.3d 1164. The court explained that the loss-of-chance theory was inconsistent with the text of ORS 30.020(1): “That statute requires that a plaintiff prove that a defendant's negligent act or omission caused the decedent's death. *** [T]he plaintiff must demonstrate that defendant's negligent acts or omission was **532 sufficient to bring about decedent's death. Plaintiff cannot avoid this requirement by showing that defendant's negligent act or omission merely increased the risk of death.”

Id. at 163-64, 149 P.3d 1164 (emphasis in original).

The court explained that, in the case before it, the plaintiff's expert had testified that the defendants’ negligence had deprived the decedent of a 30 percent chance of survival, and, thus, that that testimony did not meet the plaintiff's burden to show but-for causation. Id. at 164, 149 P.3d 1164. The court held, “Although deprivation of a 30 percent chance of survival may constitute an injury, the injury that is compensable under ORS 30.020 is death. Therefore, plaintiff has failed to prove the elements of the wrongful death action as set forth in the statute.” Id.

Unlike wrongful death claims, negligence claims based on injuries other than death are governed by common law. Smith v. Providence Health & Services, 361 Or. 456, 463, 393 P.3d 1106 (2017). In Smith, the Supreme Court held that loss of chance of recovery is a cognizable injury in a common-law negligence claim: “Oregon law permits a plaintiff who has suffered an adverse medical outcome resulting in physical harm to state a common-law medical negligence claim by alleging that the defendant negligently caused a loss of his or her chance at recovery.” Id. at 458, 393 P.3d 1106.

The plaintiff in Smith had sought medical care from the defendants while experiencing symptoms of a stroke, and the defendants had not promptly ordered testing that would have identified the stroke. The plaintiff suffered significant permanent impairment from the stroke. The plaintiff alleged that, as a result of the defendants’ negligence, he had lost an opportunity for treatment that had *552 a 33 percent chance of resulting in greatly reduced or no permanent symptoms from the stroke. Id. at 460, 393 P.3d 1106. The trial court dismissed the claim, concluding that loss of chance of a better outcome was not a viable theory of negligence, and we affirmed. Id. at 458, 393 P.3d 1106.

The Supreme Court disagreed. It held that the loss of chance of recovery, itself, was the injury, and that Oregon common law should recognize a claim for medical negligence that causes that injury. Id. First, the court concluded that the question before it was one of first impression. Id. at 463, 393 P.3d 1106. Among other things, it distinguished its holding in Joshi, explaining that, in Joshi, it had been tasked with construing the wrongful death statute rather than applying the common law of negligence: “As we noted [in Joshi], ‘although deprivation of a 30 percent chance of survival may constitute an injury, the injury that is compensable under ORS 30.020 is death.’ In contrast, this case is not bound by a statute that requires that plaintiff prove that defendants caused a specific injury.

Rather, the issue presented concerns a claim for medical negligence under Oregon's common law.”

Smith, 361 Or. at 464, 393 P.3d 1106 (internal citation and brackets omitted; emphasis in Smith).

Then the court considered whether to recognize loss of chance of recovery as an injury in common-law medical negligence. It explained that “failing to recognize a loss-ofchance theory of injury in the context of medical malpractice has the effect of insulating from malpractice claims the

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negligent services that medical providers have given to those who seek treatment for conditions when their odds of a favorable medical outcome are less than 51 percent before treatment but who can prove that they had an opportunity to realize that favorable outcome with appropriate treatment.”

Id. at 479-80, 393 P.3d 1106. The court pointed out that to prevent tort recovery under those circumstances offended two basic principles of the tort system: It prevented the tort system's function of “distribut[ing] the risk of injury to or among responsible parties” and it undercut the “ ‘prophylactic’ factor of preventing future harm.” Id. at 480, 393 P.3d 1106. Considering a hypothetical scenario of patients with a 45 percent chance of a favorable *553 outcome that was wiped out by a physician's negligence, the court explained that the “all-or-nothing rule” of a standard medical **533 malpractice case “always results in negligent physicians avoiding liability and in uncompensated patients —even though in 45 out of 100 instances, the patients suffered their adverse medical outcomes because of the physician's negligence.” Id. Further, the court noted, the special relationship between physicians and their patients counsels in favor of allowing recovery for loss-of-chance injuries because “the physician's breach of the duty to the patient results in a situation in which no one can know whether the patient would have recovered with proper medical care.” Id. The court also rejected the defendants’ contention that the legislature, rather than the court, was the appropriate body to recognize loss of chance as an injury in medical malpractice cases. The court explained that, “regardless of whether the legislature could have in the past or may in the future weigh in on this issue, this court is the forum for a case involving a common-law medical malpractice claim[, and] we are called on to decide common-law cases properly presented to us.” Id. at 482, 393 P.3d 1106.

Because the loss-of-chance claim in Smith had been dismissed at the pleading stage, the case presented “only a limited opportunity to discuss the various aspects of such a claim and the considerations in litigating a medical malpractice claim in which the plaintiff alleges the loss of a chance at a recovery or better medical outcome.” Id. However, the court nevertheless addressed some “practical concerns” that had been raised by the defendants and amici, to provide guidance on remand. Id. First, the court noted that it did not need to decide precisely what kind or degree of chance was necessary, because the plaintiff's allegation that he had lost “a 33 percent chance of

total or close to total recovery from his stroke had defendants provided him with non-negligent care” was sufficient, as a matter of law. Id. at 483, 393 P.3d 1106. Second, it explained that “fairness to defendants requires that plaintiff plead with specificity the lost chance of a better medical outcome.” Id. “In practical terms, a plaintiff must plead the percentage and quality of his or her loss of chance, which in turn *554 must be based on the plaintiff's experts and relevant scientific evidence that meets the standard of reasonable medical probability.” Id. In a footnote, the court distinguished a “loss of chance as injury” claim from a “standard medical malpractice claim.”

Id. at 483 n. 5, 393 P.3d 1106. It explained that the case before it was a loss-of-chance claim “because plaintiff was unable to allege that he had at least a 51 percent chance of recovery but for defendants’ malpractice”; thus, the injury was the loss of chance itself. Id. By contrast, it noted, a standard medical malpractice claim “involves proof of the medical outcome as the injury and not the lost chance as the injury.” Id. Third, the court explained that, although the injury is a loss of chance of recovery, an “adverse medical outcome resulting in physical harm,” id. at 458, 393 P.3d 1106, is still an element of the claim: “[A]s his complaint reflects, plaintiff has suffered the physical harm that he might well have avoided had he received proper medical care. That present adverse medical outcome is an essential element of a common-law medical malpractice claim and provides the foundation for a calculation of plaintiff's damages.”

Id. at 483, 393 P.3d 1106.

Thus, Smith establishes that (1) “loss of chance of recovery” is a cognizable injury in a common-law medical negligence claim in Oregon, id. at 458, 393 P.3d 1106; (2) to bring such a claim, “a plaintiff must plead the percentage and quality of his or her loss of chance,” id. at 483, 393 P.3d 1106; and (3) “[a] present adverse medical outcome is an essential element of a common-law medical malpractice claim,” and, in a claim for loss of chance of recovery (unlike in a standard medical malpractice claim, in which the adverse medical outcome is the injury, id. at 483 n. 5, 393 P.3d 1106) the present adverse medical outcome “provides the foundation for a calculation of plaintiff's damages,” id. at 483, 393 P.3d 1106; see also id. at 460, 393 P.3d 1106 (“In a professional negligence claim, a plaintiff must allege and prove the following: (1) a duty that runs from the defendant to the plaintiff; (2) a breach of

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that **534 duty; (3) a resulting harm to the plaintiff *555 measurable in damages; and (4) causation, i.e., a causal link between the breach of duty and the harm.” (Internal quotation marks omitted.)).

One more point of law is relevant to our analysis this case: After a person's death, the continuation of a personal injury action that sounds in negligence is governed by ORS 30.075, the survivorship statute. That statute provides as follows: “(1) Causes of action arising out of injuries to a person, caused by the wrongful act or omission of another, shall not abate upon the death of the injured person, and the personal representatives of the decedent may maintain an action against the wrongdoer, if the decedent might have maintained an action, had the decedent lived, against the wrongdoer for an injury done by the same act or omission. *** “(2) In any such action the court may award to the prevailing party, at trial and on appeal, a reasonable amount to be fixed by the court as attorney fees. “(3) Subsection (2) of this section does not apply to an action for damages arising out of injuries that result in death. If an action for wrongful death under ORS 30.020 is brought, recovery of damages for disability, pain, suffering and loss of income during the period between injury to the decedent and the resulting death of the decedent may only be recovered in the wrongful death action, and the provisions of subsection (2) of this section are not applicable to the recovery.”

2. Parties’ arguments With that legal context in mind, we consider the parties’ arguments about what they agree was the trial court's dismissal of the claim on the ground that plaintiff could not plead a common-law claim based on loss of chance of recovery as an alternative to her wrongful death claim.

Plaintiff contends that the claim that the trial court dismissed was for common-law negligence, and that the injury that she alleged was the decedent's loss of chance of recovery. In her view, that claim was not affected by the wrongful death statute, because the injury for which she sought compensation in the claim at issue was not death; it was *556 a loss of chance of recovery. See Smith, 361 Or. at 464, 393 P.3d 1106 (“As we noted [in Joshi], ‘although deprivation of a 30 percent chance of survival may constitute an injury, the injury that is compensable under ORS 30.020 is death.’ In contrast,

this case is not bound by a statute that requires that plaintiff prove that defendants caused a specific injury. Rather, the issue presented concerns a claim for medical negligence under Oregon's common law.” (Quoting Joshi, 342 Or. at 164, 149 P.3d 1164 (emphasis in Smith; internal citation omitted).)).

Further, in plaintiff's view, the claim did not abate upon the decedent's death, because it is an action that “the decedent might have maintained * * *, had the decedent lived, against the wrongdoer for an injury done by the same act or omission.” ORS 30.075(1). In other words, she contends that, as demonstrated by the court's holding in Smith, a person who lives can bring a common-law negligence claim where the injury is loss of chance of recovery, so, if the decedent had lived, he would have been able to maintain that kind of action —an action “against the wrongdoer for an injury done by the same act or omission.” ORS 30.075(1).

Finally, plaintiff contends that none of the law set out above can reasonably be understood to prevent a plaintiff from alleging, as alternatives, a wrongful death claim—in which the plaintiff must prove that the defendants’ negligence was the but-for cause of the decedent's death—and a claim for loss of chance of recovery based on the decedent's death —in which the plaintiff must prove that, even though the defendants’ negligence was not the but-for cause of the decedent's death, the defendants’ negligence was the but-for cause of the loss of a less-than-51-percent chance of survival of the decedent. See ORCP 16 D (“Inconsistent claims or defenses are not objectionable and, when a party is in doubt as to which of two or more statements of fact is true, the party may allege them in the alternative. A party may also state as many separate claims or defenses as the party has, regardless of consistency ***.”); **535 Dotson v. Smith, 307 Or. 132, 136, 764 P.2d 540 (1988) (“ORCP 16 [D] allows inconsistent claims.”). Thus, plaintiff contends that there was no substantive reason for the trial court to dismiss her claim. *557 Defendants advance a variety of reasons that, under their view of the law that we have set out above, a plaintiff cannot allege both a wrongful death claim and a claim for loss of chance of recovery based on the same facts and circumstances. The radiology defendants contend that any claim based on loss of chance of survival—that is, a loss of chance of recovery where the adverse medical outcome was death—did not survive the decedent's death under ORS 30.075(1) because the claim is not one that “the decedent might have maintained ***, had the decedent lived, against the wrongdoer for an injury done by the same

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act or omission.” They further contend that, to the extent that plaintiff's claim here is based on a loss of chance of recovery that does not involve death, plaintiff could not recover damages for the loss-of-chance claim, because “ORS 30.075(3) makes clear that damages for pre-death personal injury including ‘disability, pain, suffering and loss of income’ may only be recovered in an action for wrongful death if such an action is brought.”

The ER defendants contend that any claim in which death is an element must be brought under the wrongful death statute. Consequently, in their view, plaintiff's claim here is decisively distinguishable from the claim at issue in Smith because plaintiff's claim alleged the death of the decedent as an element, even though it was not the alleged injury.

3. Analysis We consider each of those contentions in turn and, as explained below, conclude that none of them is correct. Thus, we agree with plaintiff that the trial court erred in concluding that, as a matter of law, she could not bring her claim for loss of chance of recovery as an alternative to her wrongful death claim.

The radiology defendants first argue that a claim for loss of chance of recovery where death is the “present adverse medical outcome” (which, as the court explained in Smith, is an element of the claim and is necessary to calculate damages) is not an action that “the decedent might have maintained ***, had the decedent lived, against the *558 wrongdoer for an injury done by the same act or omission.” ORS 30.075(1).

That is so, they contend, because, if the decedent had lived, he would not have suffered death, so he could not have brought a claim for loss of chance of recovery in which the present adverse medical outcome was death.

We review questions of statutory interpretation for legal error, seeking to discern the intention of the legislature by considering the text and context of a statute and, to the extent that it is helpful, its legislative history. State v. Gaines, 346 Or. 160, 171-72, 206 P.3d 1042 (2009).

The radiology defendants’ view of ORS 30.075(1) is flawed.

The text and context demonstrate that the legislature did not intend ORS 30.075(1) to require the claim brought by a personal representative after the injured person's death to be identical in every element to the claim that “the decedent might have maintained ***, had the decedent lived, against the wrongdoer for an injury done by the same act

or omission.” The text allows the personal representative to maintain “an action against the wrongdoer” any time “the decedent might have maintained an action, had the decedent lived, against the wrongdoer for an injury done by the same act or omission.” ORS 30.075(1) (emphasis added). It does not say that the elements of the claim, the injury, or the specific theory of culpability that would give rise to the claim brought by the personal representative must be the same as the ones that the decedent might have alleged; only the act or omission of the wrongdoer must be the same.

Further, context evidences that the legislature did not intend the text to limit the action brought by the personal representative to claims with exactly the same elements as those that the decedent could have brought. The legislature used the same phrasing that appears in ORS 30.075(1) to describe the circumstances under which the personal representative of the decedent or some other person may bring a wrongful death claim: **536 ORS 30.020(1) provides that, “[w]hen the death of a person is caused by the wrongful act or omission of another,” specified people “may maintain an action against the wrongdoer, if the decedent might have maintained an action, had the decedent lived, *559 against the wrongdoer for an injury done by the same act or omission.” (Emphasis added.)

If we were to interpret the text of ORS 30.075(1) to prohibit the personal representative from bringing a claim whose elements included death—because, as defendants argue, if the decedent had lived, he would not have suffered death, so he could not have brought a claim whose elements include death—then the same logic would apply to the wrongful death statute. See, e.g., State v. Cloutier, 351 Or. 68, 99, 261 P.3d 1234 (2011) (“[I]n the absence of evidence to the contrary, we ordinarily assume that the legislature uses terms in related statutes consistently.”). The result would be that no one could ever bring a wrongful death claim, because its elements include death, and a decedent would never have been able to bring a wrongful death claim “had the decedent lived.” ORS 30.020(1).

In this case, “the decedent might have maintained an action, had the decedent lived, against the wrongdoer for an injury done by the same act or omission.” The decedent's claim would have been for loss of chance of recovery, as demonstrated by Smith. The fact that the adverse medical outcome in the claim brought by plaintiff is death, whereas, in a claim by the decedent, had he lived, the adverse medical

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outcome would have been something different, is immaterial to plaintiff's ability to bring the claim under ORS 30.075(1).

The radiology defendants’ second argument continues where their first argument leaves off. They concede that, under their view of ORS 30.075(1), “if the complaint is read as alleging that [d]efendants’ failure to diagnose decedent's allegedly damaged aorta resulted in a loss of chance to avoid pre-death personal injury [rather than death, which is the scenario they addressed in their first argument], then that claim would survive.” (Emphasis in radiology defendants’ brief.) However, they contend that plaintiff could not recover any damages for that narrowed loss-of-chance claim, because “ORS 30.075(3) makes clear that damages for pre-death personal injury including ‘disability, pain, suffering and loss of income’ may only be recovered in an action for wrongful death if such an action is brought.” *560 That argument rests on their understanding of the last sentence of ORS 30.075(3), which provides as follows: “If an action for wrongful death under ORS 30.020 is brought, recovery of damages for disability, pain, suffering and loss of income during the period between injury to the decedent and the resulting death of the decedent may only be recovered in the wrongful death action, and the provisions of subsection (2) of this section are not applicable to the recovery.”

Defendants misconstrue the term “resulting” in that sentence.

The purpose of the sentence is to prevent personal representatives from seeking what are really wrongful death damages—damages that occur between the injury that is the but-for cause of the decedent's death and the death itself— in survivorship claims. As we have explained, the wrongful death statute requires that the defendant's negligence was the but-for cause of the decedent's death. Joshi, 342 Or. at 162, 149 P.3d 1164. Given that causation standard, “damages for disability, pain, suffering and loss of income during the period between injury to the decedent and the resulting death of the decedent,” ORS 30.075(3) (emphasis added), exist only when the decedent's death “results from”—is caused, in a but-for sense—by the defendant's negligence. Joshi, 342 Or. at 162, 149 P.3d 1164.

Thus, when the defendant's negligence injures the decedent and is the but-for cause of the decedent's death, damages that are suffered between the injury and the death may be recovered only in the wrongful death action. But if, as in a loss-of-chance-of-recovery case, the defendant's negligence

injures the decedent but is not the but-for cause of the decedent's death, there is no “resulting death” of the decedent within the meaning of ORS 30.075(3), and the damages are not allocated to the wrongful death action—for **537 the logical reason that, under those circumstances, a wrongful death action cannot succeed. Joshi, 342 Or. at 162, 149 P.3d 1164. Thus, we disagree with the radiology defendants’ contention that ORS 30.075(3) would prevent plaintiff from recovering any damages on her claim for loss of chance of recovery.

We now turn to the ER defendants’ argument. As noted above, they contend that any claim in which death *561 is an element must be brought under the wrongful death statute and, consequently, that plaintiff's claim here is distinguishable from the claim at issue in Smith because plaintiff's claim alleged the death of the decedent as an element, even though it was not the alleged injury. It is true, as they assert, that the Supreme Court has held, in cases interpreting the remedy clause of Article I, section 10, of the Oregon Constitution, that no common-law wrongful death action existed at common law. See, e.g., Storm v. McClung, 334 Or. 210, 222 n 4, 47 P.3d 476 (2002) (“Since at least 1891, this court has adhered to the view that no right of action for wrongful death existed at common law.”).

But that does not answer the question here, which is whether, in Smith, the Supreme Court recognized, or, in this case, we should recognize, a claim for medical negligence where the injury is the loss of chance of recovery and the adverse medical outcome suffered by the injured person is death, under today's common law of negligence. See Smith, 361 Or. at 482, 393 P.3d 1106 (“The fact is that, regardless of whether the legislature could have in the past or may in the future weigh in on this issue, this court is the forum for a case involving a common-law medical malpractice claim and *** we are called on to decide common-law cases properly presented to us.”); see also id. at 485, 393 P.3d 1106 (“[L]oss of a substantial chance of a better medical outcome can be a cognizable injury in a common-law claim of medical malpractice in Oregon.”).

Ultimately, Smith applies. The fact that, in this case, death is an element of the claim—but not the alleged injury—does not make this situation dispositively different from the situation in Smith. The wrongful death statute does not address claims like this one, where the injury is a loss of chance of recovery rather than death itself. Joshi, 342 Or. at 164, 149 P.3d 1164.

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Martineau v. McKenzie-Willamette Medical Center, 320 Or.App. 534 (2022) 514 P.3d 520

Thus, the ER defendants’ contention that the wrongful death statute precludes this claim is misplaced.

Nothing in Smith suggests that the court intended to exclude claims in which the adverse medical outcome was death from its recognition that “Oregon law permits a plaintiff who has suffered an adverse medical outcome resulting in physical harm to state a common-law medical negligence claim by alleging that the defendant negligently caused a *562 loss of his or her chance at recovery.” 361 Or. at 458, 393 P.3d 1106. Some of the cases that the court discussed in Smith, including Matsuyama v. Birnbaum, 452 Mass. 1, 890 N.E. 2d 819 (2008), on which the Smith court relied most heavily, involved death, rather than some other kind of adverse medical outcome, and the court did not distinguish those cases. See, e.g., Smith, 361 Or. at 467, 393 P.3d 1106 (noting that, in Hicks v. United States, 368 F.2d 626 (4th Cir. 1966), “the court explained that a negligent doctor must answer for a patient's lost chance of survival”); id. at 471, 393 P.3d 1106 (explaining that, in Matsuyama, “the Massachusetts Supreme Judicial Court engaged in a comprehensive analysis of the loss-of-chance theory” and “concluded that such claims should be cognizable”); Matsuyama, 452 Mass. at 7, 890 N.E. 2d at 825 (noting that the decedent had died of gastric cancer).

Although, in Smith, the court had no occasion to, and, thus, did not, specifically address a claim in which the adverse medical

outcome was death, we perceive no reason to conclude that its holding did not encompass such claims.

It would be untenable for Oregon law to recognize claims for loss of chance of full recovery for plaintiffs who survived, but cut off those claims for plaintiffs who were, arguably, more severely harmed by being deprived of a chance of survival. That situation would offend, at least, the two basic principles of the tort system that the court addressed in Smith by preventing the tort system from operating in a rational way to “distribute the risk of injury to or among **538 responsible parties” and by undercutting the “ ‘prophylactic’ factor of preventing future harm.” Smith, 361 Or. at 480, 393 P.3d 1106. We do not believe that the court in Smith intended its holding to have that effect, and, as explained above, we perceive no other legal principle that would require that result.

For all of those reasons, we conclude that the trial court erred in dismissing plaintiff's claim for loss of chance of recovery. 5 Reversed and remanded.

All Citations 320 Or.App. 534, 514 P.3d 520

Footnotes 1

In a medical malpractice case, as other contexts, when the plaintiff does make a showing that the harm more probably than not would not have occurred in the absence of the defendant's negligence, res ipsa loquitur applies. Mayor v. Dowsett, 240 Or. 196, 220, 400 P.2d 234 (1965) (holding that res ipsa loquitur applied in a medical malpractice case where the plaintiff had presented expert testimony that “the injury suffered by the plaintiff is one that does not ordinarily occur in the absence of negligence”); Fieux v. Cardiovascular & Thoracic Clinic, P.C., 159 Or. App. 637, 642, 978 P.2d 429, rev den, 329 Or. 318, 994 P.2d 123 (1999) (the plaintiff met his burden to rely on res ipsa loquitur, even absent expert testimony regarding the standard of care, because “it is within the capability of a jury to ascertain that a clamp is not normally left inside a patient unless someone was negligent”).

In other words, although, as the jury instruction at issue in this case phrases it, a physician does not generally “guarantee a good result,” in the sense of an ultimate cure for the patient, “by undertaking to perform a service,” (at least in the absence of a contract, Emerson, 100 Or. at 481, 198 P. 231), a physician does guarantee some kinds of “results”: The physician implicitly guarantees not to cause injuries through medical negligence—for example, injury caused by leaving a clamp inside a patient after surgery. Fieux, 159 Or. App. at 644-45, 978 P.2d 429.

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2

As defendants pointed out at oral argument, the physician likely does not guarantee that the appendix will be removed—it may be that, after surgery begins, some unexpected development makes that inadvisable.

In that situation, the guaranteed result, or consequence, is that the patient's foot will not be amputated. In a case involving that fact scenario, it would clearly be wrong to instruct the jury that, by undertaking to treat the patient for appendicitis, the physician made no implicit promise that the patient's foot would remain intact.

3

We also note that, in this case, the court also instructed the jury that “the mere fact alone that a patient experienced an adverse outcome is not sufficient to prove negligence.” That instruction provided the jury with clarification—to the extent that any was necessary or desirable, a question on which we express no opinion —that the outcome of treatment, alone, did not allow any particular conclusion about whether defendants’ conduct met the standard of care.

4

As noted further below, 320 Or. App. at (so35), we leave questions about what is required to plead this type of claim to the parties and the court on remand.

5

We decline to address the radiology defendants’ proffered alternative basis for affirmance, regarding the sufficiency of plaintiff's pleading of the loss-of-chance claim. On remand, the parties and the court will have the opportunity to address pleading issues.

End of Document

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Miller v. Agripac, Inc., 322 Or.App. 202 (2022) 518 P.3d 957, Prod.Liab.Rep. (CCH) P 21,545

322 Or.App. 202 Court of Appeals of Oregon.

Donald E. MILLER and Linda S. Miller, Plaintiffs-Respondents, v.

AGRIPAC, INC. et al., Defendants, and Kaiser Gypsum Company, Inc., Defendant-Appellant.

A174355 | Argued and Submitted March 30, 2022. | October 5, 2022 Synopsis Background: Construction worker and his wife brought action against manufacturer of asbestos-containing construction product, asserting claims of negligence, strict products liability, and loss of consortium, based on worker's exposure to the asbestos-containing product. Following a jury trial, the Circuit Court, Multnomah County, Leslie G. Bottomly, J., entered judgment in favor of plaintiffs on all three claims and required manufacturer to pay $5,233,618 in damages. Manufacturer appealed.

Holdings: The Court of Appeals, Aoyagi, J., held that: trial court's “recklessness” instruction correctly stated legal standard for category of tortious conduct pertaining to aggravated form of negligence that was “wanton” or “reckless” conduct; whether manufacturer acted recklessly during time period in which worker was exposed to product was a question for the jury; and manufacturer was jointly and severally liable for all of plaintiffs' damages, regardless of when plaintiffs' action arose, because jury found that manufacturer had acted recklessly.

Affirmed.

Procedural Posture(s): On Appeal; Judgment; Motion for Judgment as a Matter of Law (JMOL)/Directed Verdict; Request for Instructions. **958 Multnomah County Circuit Court, 19CV08509; Leslie G. Bottomly, Judge.

Attorneys and Law Firms J. Aaron Landau, Eugene, argued the cause for appellant. Also on the briefs was Harrang Long Gary Rudnick P.C. Nadia H. Dahab, Portland, argued the cause for respondents.

Also on the brief were Sugerman Law Office; and Jennifer Green and Maune Raichle Hartley French & Mudd LLC. Before James, Presiding Judge, and Aoyagi, Judge, and Joyce, Judge.

Opinion AOYAGI, J. *204 In this personal injury action, plaintiffs Donald Miller (Miller) and his wife Linda Miller have asserted claims of negligence, strict product liability, and loss of consortium against defendant Kaiser Gypsum Company, Inc., based on Miller's exposure to an asbestos-containing **959 construction product sold by defendant in the 1960s. Plaintiffs also alleged similar claims against other defendants, based on Miller's exposure to other asbestos-containing products over several decades of his life; however, by the time of trial, defendant was the only remaining defendant. The jury returned a verdict in plaintiffs’ favor on all three claims. Based on that verdict, the trial court entered a judgment requiring defendant to pay $5,233,618 in damages to plaintiffs.

Defendant appeals, raising three assignments of error. First, defendant challenges the trial court's ruling that defendant is jointly and severally liable for plaintiffs’ damages, based on the court's conclusion that plaintiffs’ action “arose” in the 1960s and therefore is not subject to the modern several-only liability statute. Second, defendant argues that the court's jury instruction on “recklessness,” as relevant to the defense of comparative fault, was inconsistent with plaintiffs’ claims and contrary to Oregon law. Third, defendant argues that, even if the “recklessness” instruction was not erroneous, the court should have granted a directed verdict for defendant on that issue, because the evidence was legally insufficient to prove that defendant acted recklessly.

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For the reasons explained below, we conclude that the “recklessness” instruction was properly given and legally correct. We further conclude that the evidence was legally sufficient to go to the jury on whether defendant was “recklessly” negligent. We therefore reject the second and third assignments of error. As for the first assignment of error, given our disposition of the other assignments, and the relationship between the comparative-fault defense and several-only liability under existing case law, we conclude that any error in applying joint and several liability based on when the action “arose” was harmless. Accordingly, we affirm.

*205 I. FACTS Miller, who was born in 1948, was exposed to asbestos on numerous occasions for the first 36 years of his life. He comes from a family of asbestos workers. He grew up going to job sites with family members, played in asbestos boxes as a child, shook out his father's work clothes while doing laundry, and worked as a teen in asbestos product fabrication. He began his own career in insulation after high school.

Between October 1966 and April 1969, Miller worked as a mechanical insulator in various commercial and industrial buildings in the Portland area. He personally worked mainly with fiberglass materials, but drywall workers were also present at the jobsites. Drywall workers use “joint compound” to fill the seams between sheets of drywall (also called sheetrock or wallboard) after mounting. Joint compound usually comes as a powder. It is mixed with water, applied as a paste, and then sanded after it dries. Multiple coats of joint compound are applied to achieve a smooth finish before painting. On a daily basis, as he worked, Miller would breathe in drywall dust produced by drywall workers’ mixing and sanding of joint compound. Some of that joint compound was defendant's product, which contained asbestos.

Miller changed jobs in April 1969. His exposure to asbestoscontaining products continued until 1984. There is no evidence that Miller was exposed to defendant's asbestoscontaining products after 1969, however, so any exposures after 1969 would be attributable to other companies’ products.

Miller retired in 2003.

Because of his known exposure to asbestos, Miller's health was regularly checked by his doctor. In June 2018, a CT

scan showed something suspicious. In January 2019, at age 70, Miller was diagnosed with mesothelioma, a cancer closely associated with asbestos exposure. Miller and his wife brought this action against more than 50 defendants, based on their alleged involvement in Miller's exposure to asbestos.

Only the claims against defendant went to trial. All of the other defendants were dismissed before trial as a result of bankruptcy, settlement, or otherwise. *206 Before trial, plaintiffs moved for a ruling that defendant would be subject to joint and several liability for all of plaintiffs’ damages. Historically, defendants have been **960 jointly and severally liable in personal injury actions, either as a matter of common law, e.g., Hansen v. The Bedell Co. et al., 126 Or. 155, 157, 268 P. 1020 (1928), or, after 1975, as a matter of statute, Or. Laws 1975, ch. 599, § 3; former ORS 18.485 (1975), renumbered as ORS 31.610 (2003). In 1995, however, the legislature largely eliminated joint and several liability for personal injury actions “arising on or after” September 1, 1995. Or. Laws 1995, ch. 696, §§ 5, 7; see former ORS 18.485 (1995), renumbered as ORS 31.610 (2003). In their pretrial motion, plaintiffs argued that their claims against defendant “arose” in the 1960s when Miller was exposed to defendant's product, such that joint and several liability should apply. Defendant countered that the action arose in 2018, when Miller developed mesothelioma symptoms, such that defendant's liability should be several only, i.e., limited to the damages that defendant's own product caused. The court took the issue under advisement and, after trial began, ruled that the action arose in the 1960s and that joint and several liability therefore applied.

Meanwhile, plaintiffs sought leave to amend their complaint to allege that defendant's negligence was “wanton and reckless” in nature, such that defendant could not use the defense of comparative fault. Defendant opposed the amendment, arguing, among other things, that plaintiffs had not brought a claim for wanton or reckless conduct and were trying to “squeeze an intentional tort into a negligence or strict liability claim.” The court allowed the amendment.

Plaintiffs then filed their Fourth Amended Complaint, which included an allegation that plaintiffs’ claims are not subject to ORS 31.600, the comparative-fault statute, because defendant “engaged in the alleged conduct wantonly and recklessly in that [defendant's] actions and omissions presented an unreasonable and highly probable risk of substantial bodily harm and [defendant] consciously disregarded said risk or reasonably should have been aware of said risk.”

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At the close of plaintiffs’ evidence, defendant moved for directed verdict on plaintiffs’ “wanton and reckless *207 conduct” allegation. In response, plaintiffs noted “preliminarily” that they were “withdrawing their allegation of wanton conduct” and would “instead proceed as to reckless conduct only.” They then proceeded to argue that there was sufficient evidence to create a jury issue as to whether defendant engaged in “reckless conduct.” In making that argument, plaintiffs defined “reckless conduct” as “the intentional doing or failing to do an act when one knows or has reason to know of facts which would lead a reasonable person to realize that their conduct not only creates an unreasonable risk of harm to others but also involves a high degree of probability that substantial harm will result”—which was the same definition that plaintiffs had previously used for “wanton and reckless” conduct. The court denied defendant's directed verdict motion. It also denied a renewed motion at the close of all evidence.

After the close of all evidence, the court instructed the jury.

As relevant to the defense of comparative fault, plaintiffs proposed an instruction on “recklessness,” which used the same definition as plaintiffs’ previously proposed instruction on “wanton and reckless.” The court gave that instruction over defendant's objection. The jury was therefore instructed: “Plaintiffs charge that Kaiser Gypsum's conduct in this case was reckless. Recklessness means an intentional doing or failing to do an act when one knows or has reason to know of facts which would lead a reasonable person to realize that their conduct not only creates unreasonable risk of harm to others but also involves a high degree of probability that substantial harm will result.”

So instructed, the jury was asked on the verdict form whether defendant's conduct was “reckless in its negligence.”

The jury returned a verdict for plaintiffs on all three claims—negligence, strict product liability, and loss of consortium. The jury found that Miller was exposed to defendant's asbestos-containing product, that the product was unreasonably dangerous, that the product's unreasonably dangerous characteristic was a substantial contributing factor in causing Miller's mesothelioma, that defendant was negligent, that defendant was “reckless **961 in its negligence,” *208 that defendant's negligence was a substantial contributing factor in causing Miller's mesothelioma, and that Miller was not negligent. Given the trial court's ruling that defendant was subject to joint and

several liability for plaintiffs’ damages, the jury was not asked to apportion liability among the defendants.

The court entered a general judgment in plaintiffs’ favor, which included a money award requiring defendant to pay $5,233,618 in damages. To arrive at that amount, the court deducted pretrial settlements with other defendants from plaintiffs’ total damages. Those reductions were based on the actual settlement amounts, however, not any apportionment of damages between defendants. Defendant appeals.

II. ANALYSIS A. Overview of the Relevant Statutory Scheme As a foundation for our discussion of the issues raised in this appeal, it is helpful to have a basic understanding of the history of the current statutes regarding the affirmative defense of comparative fault, ORS 31.600; apportionment findings, ORS 31.605; and several-only liability, ORS 31.610—both individually and as they relate to one another.

Prior to 1971, when a plaintiff suffered bodily injury as the result of the negligence of multiple defendants, each negligent defendant was jointly and severally liable for the plaintiff's damages, as a matter of common law. See Hansen, 126 Or. at 157, 268 P. 1020. If the plaintiff's own negligence contributed at all to the injury, however, the plaintiff was barred from recovering any damages, based on the common-law doctrine of contributory negligence. State v. Gutierrez-Medina, 365 Or. 79, 84, 442 P.3d 183 (2019).

In 1971, the legislature replaced the common-law defense of “contributory negligence” with the statutory defense of “comparative fault,” which is less absolute. Or. Laws 1971, ch. 668, § 1; see Hampton Tree Farms Inc. v. Jewett, 158 Or App 376, 392, 974 P.2d 738, rev. den., 329 Or 61, 994 P.2d 120 (1999) (“[T]he legislature adopted comparative fault to replace contributory negligence, which was an absolute bar *209 to recovery.”). Under comparative fault, a plaintiff whose own negligence contributed to the injury can still recover, so long as the defendant's negligence was greater than the plaintiff's negligence; however, the plaintiff's recovery is diminished in proportion to his or her own negligence. The original comparative-fault statute stated: “Contributory negligence, including assumption of the risk, shall not bar recovery in an action by any person or his legal representative to recover damages for negligence

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resulting in death or injury to person or property if such negligence contributing to the injury was not as great as the negligence of the person against whom recovery is sought, but any damages allowed shall be diminished in the proportion to the amount of such negligence attributable to the person recovering.”

Former ORS 18.470 (1971), renumbered as ORS 31.600 (2003).

In 1975, the legislature did several notable things. First, it made minor amendments to the comparative-fault statute, including, as relevant here, changing the word “negligence” to “fault” and recognizing the possibility of multiple defendants. Or. Laws 1975, ch. 599, § 1; see former ORS 18.470 (1975), renumbered as ORS 31.600 (2003). The effect of the change to “fault” is discussed in Sandford v. Chev.

Div. Gen. Motors, 292 Or. 590, 642 P.2d 624 (1982). As for multiple defendants, the amendment clarified that the plaintiff's fault was to be compared to “the combined fault of the person or persons against whom recovery is sought[.]”

Former ORS 18.470 (1975) (emphases added). Second, the legislature abolished the common-law doctrines of last clear chance and implied assumption of risk. Or. Laws 1975, ch.

599, § 4; see former ORS 18.475 (1975), renumbered as ORS 31.620 (2003). Third, the legislature enacted a new statutory provision to create a mechanism for apportioning fault. Upon the request of any party, the trier of fact must make findings as to both the plaintiff's total damages and “[t]he degree of each party's fault expressed as a percentage of the total fault attributable to all parties represented **962 in the action,” and, in a jury trial, the “jury shall be informed of the legal effect of” those findings. Or. Laws 1975, ch. 599, § 2; see former ORS 18.480 (1975), renumbered as ORS 31.605 (2003). *210 Fourth, the legislature enacted a “joint and several liability” statute, thus codifying the common-law doctrine of joint and several liability. Or. Laws 1975, ch. 599, § 3; see former ORS 18.485 (1975).

Twenty years passed without substantial changes to the aforementioned laws. Then, in 1995, two things happened.

Most significantly, the legislature eliminated joint and several liability, with certain exceptions, for personal injury actions “arising on or after” September 9, 1995: “(1) Except as otherwise provided in this section, in any civil action arising out of bodily injury, death or property damage, including claims for emotional injury or distress, loss of care, comfort, companionship and society, and loss of consortium, the liability of each defendant for damages

awarded to plaintiff shall be several only and shall not be joint.”

Or. Laws 1995, ch. 696, §§ 5, 7; see former ORS 18.485(1) (1995). Subsection (2) addressed how the court should calculate each person's liability, including using “the percentages of fault determined by the trier of fact under ORS 18.480” and setting out “the several liability of each defendant” in the judgment “based on the percentages of fault determined by the trier of fact under ORS 18.480.”

Former ORS 18.485(2) (1995). Subsections (3), (4), and (5) provided for reallocation of an “uncollectible share” in certain circumstances. Id. §§ (3)-(5). Subsection (6) excepted certain types of civil actions—involving hazardous waste, air pollution, and other specified environmental claims—from the statute altogether. Id. § (6).

The other thing that the legislature did in 1995 was amend the comparative-fault statute. Prior to 1995, the plaintiff's fault was compared to “the combined fault of the person or persons against whom recovery is sought[.]” Former ORS 18.470 (1993), renumbered as ORS 31.600 (2003). In 1995, the legislature expanded and refined the group whose combined fault should be compared to the plaintiff's—and moved that information to a new subsection. After the amendment, the plaintiff's fault was to be compared to “the combined fault of all persons specified in *211 subsection (2).” Former ORS 18.470(1) (1995), renumbered as ORS 31.600 (2003).

Subsection (2), in turn, provided that the plaintiff's fault should be compared “with the fault of any party against whom recovery is sought, the fault of third party defendants who are liable in tort to the claimant, and the fault of any person with whom the claimant has settled”—except for persons who were immune from liability to the claimant, not subject to the jurisdiction of the court, or not subject to action because the claim against them is barred by a statute of limitation or statute of ultimate repose, who are excluded, unless they have settled with the claimant, in which case they are included. Former ORS 18.470(2) (1995).

The legislature made a related amendment to the apportionment mechanism in former ORS 18.480. Instead of requiring a court to provide, upon request, special findings on “[t]he degree of each party's fault expressed as a percentage of the total fault attributable to all parties represented in the action,” former ORS 18.480 (1993), renumbered as ORS 31.605 (2003), the amended statute required the court to provide, upon request, special findings on “[t]he degree of fault of each person specified in ORS 18.470(2),” which was to be “expressed as a percentage of the total fault attributable

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Miller v. Agripac, Inc., 322 Or.App. 202 (2022) 518 P.3d 957, Prod.Liab.Rep. (CCH) P 21,545

to all persons considered by the trier of fact pursuant to ORS 18.470.” Former ORS 18.480 (1995), renumbered as ORS 31.605 (2003).

After the 1995 amendments, the statutes became materially the same as today's statutes, at least as relevant to this appeal.

The statutes were reorganized, however, in 2003. The defense of comparative fault is now described in ORS 31.600(1): “(1) Contributory negligence shall not bar recovery in an action by any person or the legal representative of the person to recover damages for death or injury to person or property if the fault attributable to the claimant was not greater than the combined fault of all persons specified in subsection (2) of this section, but any damages **963 allowed shall be diminished in the proportion to the percentage of fault attributable to the claimant. This section is not intended to create or abolish any defense.” *212 The group of persons whose collective fault is to be compared to the plaintiff's fault is now in ORS 31.600(2), which provides: “(2) The trier of fact shall compare the fault of the claimant with the fault of any party against whom recovery is sought, the fault of third party defendants who are liable in tort to the claimant, and the fault of any person with whom the claimant has settled. The failure of a claimant to make a direct claim against a third party defendant does not affect the requirement that the fault of the third party defendant be considered by the trier of fact under this subsection. Except for persons who have settled with the claimant, there shall be no comparison of fault with any person: “(a) Who is immune from liability to the claimant; “(b) Who is not subject to the jurisdiction of the court; or

“(c) Who is not subject to action because the claim is barred by a statute of limitation or statute of ultimate repose.”

And the mechanism for apportioning fault among the plaintiff and that group of people is now in ORS 31.605, along with the requirement that the court inform the jury of the legal effect of its apportionment findings:

“(1) When requested by any party the trier of fact shall answer special questions indicating: “(a) The amount of damages to which a party seeking recovery would be entitled, assuming that party not to be at fault. “(b) The degree of fault of each person specified in ORS 31.600(2). The degree of each person's fault so determined shall be expressed as a percentage of the total fault attributable to all persons considered by the trier of fact pursuant to ORS 31.600. “(2) A jury shall be informed of the legal effect of its answer to the questions listed in subsection (1) of this section.”

As for the several-liability-only statute, it is now ORS 31.610, and it has been updated to reflect the renumbering of crossreferenced statutes, but it remains substantively the same as it was when originally enacted in 1995. *213 B. The Issues on Appeal We return to the specifics of this case. In its first assignment of error, defendant challenges the trial court's ruling that defendant is jointly and severally liable for plaintiffs’ damages, which was based on the court's conclusion that plaintiffs’ action “arose” in the 1960s, when Miller was exposed to defendant's product, rather than in 2018, when Miller developed mesothelioma symptoms. (The severalonly-liability statute, ORS 31.610, applies to actions “arising on or after” September 9, 1995.) In its second assignment of error, defendant challenges the jury instruction on “recklessness,” as relevant to the availability of the defense of comparative fault. In its third assignment of error, defendant argues that, even if the jury instruction on “recklessness” was correct, the court erred by denying defendant's motion for a directed verdict on that issue, because the evidence was legally insufficient to prove that defendant acted “recklessly.”

Although not immediately obvious, all three assignments of error are ultimately presented only for their relevance to the issue of joint and several liability. The jury found Miller to be 0% at fault for plaintiffs’ damages, so comparative fault is no longer relevant as an affirmative defense against plaintiffs.

The reason that the parties continue to argue about the defense of comparative fault and the “recklessness” instruction is because, in plaintiffs’ view, a defendant who cannot use the comparative-fault defense is also excluded from the scope of the modern several-only liability statute. That is, in plaintiffs’

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view, even if this action “arose” in 2018, after the effective date of the several-only liability statute, defendant would still be jointly and severally liable for damages caused by other defendants so long as the “reckless” finding stands.

Because of the particular relationship between the three assignments of error, we begin with the second and third assignments of error. **964 C. The Jury Instruction on “Recklessness” As previously described, this case involves negligence and strict product liability claims, and the jury found *214 defendant to have been negligent. However, plaintiffs specifically alleged that defendant “engaged in the alleged conduct wantonly and recklessly”; the jury was instructed on “recklessness”; and the jury found defendant to have been “reckless in its negligence.” That begs the question why we are discussing recklessness in connection with a negligence claim. The answer lies in the case law regarding comparative fault and its historic predecessor, contributory negligence.

In the world of torts, there are four categories of “conduct” into which an “infinite” number of factual situations may be placed: (1) simple negligence; (2) gross negligence; (3) an aggravated form of negligence that is often described as “wanton” or “reckless” conduct; and (4) intentional misconduct. Gutierrez-Medina, 365 Or. at 86-87, 442 P.3d 183. Historically, only defendants who committed simple or gross negligence (the first two categories) could use the defense of contributory negligence against a plaintiff who had contributed to his or her own injury. Id. at 87, 442 P.3d 183. Defendants who acted in a “wanton” manner (the third category) could not use the defense of contributory negligence to prevent recovery by a negligent plaintiff. Id. Even if their conduct technically qualifies as “negligent,” defendants in the third category are treated differently from defendants who commit simple or gross negligence; they are treated more like intentional tortfeasors. Cook v. Kinzua Pines Mills Co. et al., 207 Or. 34, 42-43, 293 P.2d 717 (1956) (describing the third category as an “aggravated form of negligence, approaching intent,” which “differs from negligence not only in degree but in kind, and in the social condemnation attached to it”). That said, “wanton” conduct remains distinct from “intentional” conduct. See GutierrezMedina, 365 Or. at 92, 442 P.3d 183.

In 1971, the legislature replaced the common-law defense of contributory negligence with the statutory defense of comparative fault. However, the distinction discussed in the

last paragraph remains in place. For a defendant to use the defense of comparative fault, the defendant's conduct must be “equivalent to conduct for which the defense of contributory negligence would have been available before 1971.” Id. at 85, 442 P.3d 183. That is, in a negligence action, a defendant who committed simple or gross negligence can use the defense of comparative fault against a negligent plaintiff—to reduce *215 the plaintiff's award or even, if the plaintiff was sufficiently negligent, prevent any recovery—but a defendant who acted in a “wanton” manner cannot. “[U]nder the common law, if a defendant's conduct could be characterized as ‘wanton,’ then the plaintiff's contributory negligence was no defense. That is the line that the legislature carried forward when it created the defense of comparative fault: if the defendant's conduct was at least ‘wanton,’ comparative fault is no defense.” Id. at 87, 442 P.3d 183.

In this case, plaintiffs alleged that defendant's negligent conduct was “wanton and reckless” and that the comparativefault statute therefore did not apply. Plaintiffs later “withdrew” the “wanton” allegation. The jury was then instructed on “recklessness”—but with the same definition that plaintiffs had previously proposed for “wanton and reckless.” Specifically, the jury was instructed: “Recklessness means an intentional doing or failing to do an act when one knows or has reason to know of facts which would lead a reasonable person to realize that their conduct not only creates unreasonable risk of harm to others but also involves a high degree of probability that substantial harm would result.”

So instructed, the jury found that defendant was “reckless in its negligence.”

Defendant first contends that giving that instruction was inconsistent with plaintiffs’ “assurances” to the court. We understand the thrust of that argument to be that plaintiffs misled the court and defendant by claiming to withdraw their “wanton” allegation, but then requesting an instruction that really described “wanton” conduct.

We are unpersuaded. As we will discuss shortly, there is not a settled label for the third category of tortious conduct, and there **965 is also a history of misuse and inconsistent use of terminology. There is no question that, in hindsight, plaintiffs could have been more precise about their intentions in “withdrawing” the “wanton” allegation. Their written and oral statements on the issue were not entirely clear in that regard. However, from the record as a whole, it is sufficiently

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apparent that, when plaintiffs “withdrew” the “wanton” allegation, they were not purporting to make *216 any change to the substance of their allegation against defendant, only its label. That is particularly evident from the fact that plaintiffs continued to use the same definition of the conduct that they were trying to prove as they always had. Plaintiffs could have been clearer about what they were doing, but, viewed as a whole, what they told the court was consistent with the instruction that they later requested. 1 Turning to the instruction itself, defendant next argues that the instruction was legally incorrect. Defendant argues that the instruction does not describe reckless conduct but, instead, what defendant calls wanton, willful, and intentional conduct. 2 In defendant's view, recklessness is best defined as “a deviation from the standard of care that presents a ‘substantial risk’ that a result will occur,” rather than a “conscious decision to act in a way that risks harm to another.” Defendant points to the Oregon criminal code's definition of “recklessly” as an example. See ORS 161.085(9) (“ ‘Recklessly,’ when used with respect to a result or to a circumstance described by a statute defining an offense, means that a person is aware of and consciously disregards a substantial and unjustifiable risk that the result will occur or that the circumstance exists. The risk must be of such nature and degree that disregard thereof constitutes a gross deviation from the standard of care that a reasonable person would observe in the situation.”).

Plaintiffs respond that “reckless” and “wanton” are synonymous for comparative-fault purposes—both referring to the third category of tortious conduct—and that the instruction given was legally correct. Plaintiffs distinguish *217 the fourth category of tortious conduct, “intentional” conduct. They assert that, to prove that a defendant's negligence was “reckless” (or “wanton”), it is unnecessary to prove that the defendant intended to inflict harm or “actually knew” that its conduct would create an unreasonable risk of harm, as is necessary to prove intentional misconduct.

“We review jury instructions for errors of law and will reverse only if we can fairly say that, when considering all of the instructions as a whole, the instruction at issue probably created an erroneous impression of the law in the minds of the jurors that affected the outcome of the case.” Lenn v.

Baldwin, 269 Or App 189, 193, 344 P.3d 475 (2015) (internal quotation marks omitted). Here, we agree with plaintiffs that the instruction was substantively correct and would not have

created an erroneous impression of the law in the jurors’ minds.

The Supreme Court first outlined the four categories of tortious conduct in Cook, a 1956 case involving a vehicle accident on a logging road, in which the defendant sought to use the defense of contributory negligence against the plaintiff. 207 Or. at 38-39, 293 P.2d 717. Describing the courts as “constantly confused and frustrated by the over-generous employment of adjectives in describing wrongful conduct,” id. at 58, 293 P.2d 717, the court felt “compelled” to identify “four types of conduct into which the infinite variety of fact situations must fall: **966 “(1) Simple negligence, subject to the defense of contributory negligence, (2) gross negligence which we have repeatedly held may be subject to the defense of contributory negligence, (3) injury to the person of another committed in a ‘wanton’ manner, meaning the doing of an intentional act of an unreasonable character in disregard of a risk known to the actor, or so obvious that he must be taken to have been aware of it and so great as to make it highly probable that harm would follow, usually accompanied by a conscious indifference to consequences.

In the third category contributory negligence is no defense and for conduct of that kind a trespasser may recover. (4) Assault and battery where there is an actual intent not only to do an act but to cause personal injury.”

Id. at 58-59, 293 P.2d 717 (emphasis added; internal citation omitted). *218 That same year, in Falls v. Mortensen, 207 Or. 130, 132, 295 P.2d 182 (1956), overruled in part on other grounds

by Lindner v. Ahlgren, 257 Or. 127, 477 P.2d 219 (1970), the defendant was driving under the influence of alcohol when he struck the plaintiff, a pedestrian, who was crossing the street at night in a place other than an intersection. At trial, the jury was instructed that “contributory negligence is no defense to an action based upon a defendant's wanton disregard of the rights of others.” Id. at 134, 295 P.2d 182. The jury was then given an instruction on the meaning of “wanton”—an instruction substantively identical to the “recklessness” instruction given in the present case: “Wanton misconduct is an intentional doing or failing to do of an act when one knows or has reason to know of facts which would lead a reasonable man to realize that the actor's conduct not only creates unreasonable risk of harm

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to others but also involves a high degree of probability that substantial harm will result to him.”

Id. at 135, 295 P.2d 182 (ellipses omitted).

On appeal, in addressing the defendant's challenge to that instruction, the Supreme Court recognized the importance of being clear about the four categories of tortious conduct.

Id. at 141-42, 295 P.2d 182 (“The great obstacle to the development of a satisfactory system of tort law in this field arises from the fact that the courts have ascribed different meanings to the same words, with the result that it is difficult to draw the line between the various types of conduct as to which the law applies different legal consequences.”). The court also recognized that “[t]he most difficult distinction, but one which frequently must be made, is that between gross negligence and wanton misconduct.” Id. at 144, 295 P.2d 182. “In truth the distinction must be clearly explained to the jury because we have held that contributory negligence is a defense in an action for gross negligence but is not a defense in an action for wanton misconduct.” Id. at 146, 295 P.2d 182.

After reviewing the Restatement, a leading treatise, and extensive out-of-court case law, the court concluded that the challenged instruction accurately described the third category of tortious conduct: *219 “The definition of wanton misconduct, as given by the trial judge in the pending case, is supported by a great weight of authority. It makes clear the difference between such conduct and gross negligence. It also clarifies the difference between wanton misconduct and assault and battery. Both are the result of intentional action, but only the latter involves specific intent to injure the plaintiff.”

Id. at 147, 295 P.2d 182. In explaining its reasoning, the court itself tended to use the term “wanton” to refer to the third category of tortious conduct. See id. at 136-47, 295 P.2d 182.

However, the court's discussion makes clear that “wanton” and “reckless” are alternative terms for the third category. See id. By contrast, the term “willful” should not be used for any of the categories, as it has been used so variously over time that “the word does not connote a definite quality of conduct.”

Id. at 144, 295 P.2d 182. 3 **967 Rolling forward 70 years, the Supreme Court recently addressed the nature of “wanton” conduct, as relevant to the civil defense of comparative fault, in Gutierrez-Medina. The underlying events in that case were similar to those in Falls: The defendant was driving under the influence of intoxicants

when he struck a pedestrian, who was crossing the street at night in a place other than a pedestrian crossing. GutierrezMedina, 365 Or. at 81, 442 P.3d 183. The procedural posture of Gutierrez-Medina was quite different, however, in that Gutierrez-Medina was a criminal appeal. The defendant was convicted of driving under the influence of intoxicants and third-degree assault and ordered to pay almost $155,000 in restitution to the crime victim. Id. The defendant argued on appeal that the sentencing court should have applied the civillaw defense of comparative fault—given the relationship between criminal restitution and civil economic damages— and that “the victim's own negligence was the primary cause of the collision.” Id. at 81 & n. 1, 83, 442 P.3d 183. *220 On review, the court assumed arguendo that the defense of comparative fault could be considered in awarding restitution. Id. at 84, 442 P.3d 183. However, it concluded that the defense would be unavailable to this defendant in a civil action for the same injury, because his third-degree assault conviction “establishes a degree of culpability for which the defense of comparative fault would be unavailable in a civil action.” Id. at 81, 442 P.3d 183. Given how thirddegree assault is defined, by pleading guilty to that crime, the defendant necessarily admitted “that he was aware that he was using a deadly or dangerous weapon in a way that created a substantial risk of serious physical injury and that he consciously disregarded that risk.” Id. at 82, 442 P.3d 183.

That admission “would require a hypothetical civil jury to conclude that defendant's culpability fell with the range of ‘wanton’ conduct.” Id. at 84, 442 P.3d 183. Consequently, the defense of comparative fault would not be available. Id. at 87, 442 P.3d 183. In so concluding, the court rejected the defendant's argument that his conduct came within the category of “gross negligence,” so as to allow the defense. Id. at 87-88, 442 P.3d 183.

In conducting its analysis in Gutierrez-Medina, the court relied on prior case law regarding the third category of tortious conduct, particularly Falls, which it described as a case in which the court “undertook to clarify the range of culpable conduct that will be considered ‘wanton.’ ” Id. at 89-90, 442 P.3d 183. The court then essentially reaffirmed its holding in Falls that the “wanton misconduct” instruction that was given in Falls was legally correct. Id. at 90, 442 P.3d 183. The court also spoke approvingly of “reckless” as an alternative term for “wanton,” id. at 91, 442 P.3d 183, while emphasizing that the word “wanton,” as used for comparative-fault purposes, “describe[s] not only a person who acted with actual knowledge and disregard of the risk but

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also one who acted without such knowledge if a reasonable person would have realized the risk,” id. at 92, 442 P.3d 183.

With that case law in mind, we consider defendant's challenge to the jury instruction in this case, and we readily conclude that the instruction correctly described the third category of tortious conduct.

It is of no consequence that the instruction was framed as defining “recklessness”—or at least no one made *221 any arguments to the trial court that would have required it to consider using “wanton” or another term to label the category of conduct that it was defining for the jury. There are potential downsides to both terms, as far as the word itself suggesting too much or too little. See, e.g., Falls, 207 Or. at 143, 295 P.2d 182 (recognizing confusion regarding the meaning of “wanton,” due to “a failure on the part of litigants and some courts to distinguish between intent to act wantonly on the one hand, and intent to injure the particular plaintiff, on the other”); Cook, 207 Or. at 41-42, 293 P.2d 717 (“The word ‘reckless’ appears in conjunction with the word ‘negligent’ in most of the complaints coming to this court which are intended to charge and which have been held to charge simple negligence.”). That is precisely why it is so important to instruct the jury accurately on the meaning of whatever term is used. **968 As for the accuracy of the instruction that was given, the Supreme Court has already approved a substantively identical instruction as an accurate definition of “wanton” or “reckless” conduct, i.e., the third category of tortious conduct.

The instruction was approved in Falls and reaffirmed in Gutierrez-Medina. Defendant's argument that we should adopt a different definition of “reckless,” adapted from the criminal statutes, conflicts with that case law. The same is true of defendant's argument that “recklessness” is not an “element” of negligence and cannot be shoehorned into a negligence action. It is beyond dispute at this point that a plaintiff may assert that a defendant was negligent, while also asserting that the defendant acted recklessly, in the hopes of not only prevailing on the negligence claim but also cutting off the defense of comparative fault. Lastly, defendant's contention that the “recklessness” instruction given in this case actually described “intentional” misconduct is not welltaken, given existing case law. Although the historical case law contains inconsistencies, the Supreme Court recently reaffirmed that “wanton” (or “reckless”) conduct is an aggravated form of negligence that differs from “intentional” misconduct. “Intentional” misconduct involves not only a

conscious intent to act but also a conscious intent to cause harm. Gutierrez-Medina, 365 Or. at 87, 442 P.3d 183. As instructed, to find defendant reckless, the jury in this case had to find that defendant intended to act, but it did not have to find *222 that defendant actually intended to harm plaintiffs.

That is an instruction on “wanton” or “reckless” conduct (the third category), not “intentional” misconduct (the fourth category).

In sum, the trial court's “recklessness” instruction correctly stated the legal standard for the third category of tortious conduct. It was not erroneous to give that instruction. We therefore reject defendant's second assignment of error.

D. The Denial of a Directed Verdict on “Recklessness” In its third assignment of error, defendant challenges the trial court's denial of defendant's motion for directed verdict as to the “recklessness” allegation. “We review the denial of a motion for directed verdict for any evidence to support the verdict in favor of the nonmoving party.” Hoff v. Certainteed Corp., 316 Or App 129, 132, 503 P.3d 457 (2021), rev. den., 369 Or. 785, 511 P.3d 400 (2022) (internal quotation marks omitted). In doing so, we view the evidence, including all reasonable inferences therein, in the light most favorable to the nonmoving party. Lyons v. Beeman, 311 Or App 560, 564, 494 P.3d 358, rev. den., 368 Or. 513, 493 P.3d 507 (2021). We will not disturb the jury's verdict “[u]nless there is no evidence from which the jury could have found the facts necessary to support plaintiffs’ claim.” Hoff, 316 Or App at 132, 503 P.3d 457; Or. Const., Art. VII (Amended), § 3.

Defendant argues that the evidence was legally insufficient for a reasonable juror to find that, between October 1966 and April 1969, when Miller was exposed to defendant's joint compound, defendant knew or had reason to know that the use of its product would expose drywall installers and others working nearby to airborne asbestos at levels sufficient to make it highly probable that substantial harm would result. Plaintiffs disagree, contending that the evidence was sufficient for a reasonable jury to find that defendant's conduct was “reckless” as defined in the jury instruction.

We do not believe that it would be particularly helpful to the bench or bar to recount the specific evidence in this case.

We have carefully reviewed that evidence, and we *223 agree with plaintiffs that it was sufficient to go to the jury.

In particular, we agree that there was sufficient evidence to allow a jury to find that, in the relevant time period, defendant acted or failed to act when, to quote the jury instruction,

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defendant had “reason to know of facts which would lead a reasonable person to realize that their conduct not only creates unreasonable risk of harm to others but also involves a high degree of probability that substantial harm would result.” In other words, viewing the evidence in the light most favorable to plaintiffs, we cannot say that there was no evidence to support a finding that defendant acted “recklessly” as that term was defined. **969 We therefore reject defendant's third assignment of error.

Together, our rejection of the second and third assignments of error means that the jury's finding that defendant was “reckless in its negligence” will stand. It follows, under wellestablished case law, that the defense of comparative fault is unavailable to defendant.

E. Joint and Several Liability Our resolution of the second and third assignments of errors issues brings us back to defendant's first assignment of error, in which defendant challenges the trial court's ruling that it is jointly and severally liable for plaintiffs’ damages. Plaintiffs maintain that, given our disposition of the second and third assignments of error, we “need not reach” the first assignment of error.

As we understand it, plaintiffs’ position is that there are two legal consequences to a defendant being found to have committed negligence in a “reckless” manner: (1) the defendant cannot use the defense of comparative fault against the plaintiff, as a matter of well-established case law before and after 1971, and (2) the several-only-liability statute enacted in 1995 does not apply, as a matter of statutory construction, and the defendant therefore remains subject to common-law joint and several liability. Defendant did not respond on this issue in its briefing and, at oral argument, took a somewhat equivocal position.

As a preliminary matter, we note that, if plaintiffs are correct about the relationship between the availability *224 of the comparative-fault defense and the applicability of the several-only-liability statute, we would still “reach” the first assignment of error. However, we would not need to resolve what the legislature meant by actions “arising on or after” September 9, 1995—see Or. Laws 1995, ch. 696, §§ 5, 7— because any error that the trial court made in applying joint and several liability based on the action having “arisen” in the 1960s would be harmless. See ORS 19.415(2) (“No judgment shall be reversed or modified except for error substantially affecting the rights of a party.”). That is, even if the trial

court was wrong, and the action “arose” in 2018, it would have no effect on defendant's liability, because the jury's “recklessness” finding would independently take defendant outside the scope of the several-only-liability statute, such that defendant would still be subject to common-law joint and several liability.

Turning to the substance of plaintiffs’ harmlessness argument, we conclude that plaintiffs’ argument is supported by Shin v. Sunriver Preparatory School, Inc., 199 Or App 352, 111 P.3d 762, rev. den., 339 Or. 406, 122 P.3d 64 (2005). In that case, we held that an allegedly negligent tortfeasor (a private school) was not entitled to apportionment findings under ORS 31.605, where the negligent tortfeasor sought to avoid liability for the wrongdoing of an intentional tortfeasor (the plaintiff's father) who raped the plaintiff (a student). Id. at 354, 111 P.3d 762. The upshot of Shin is that the group of people identified in ORS 31.605—the group whose collective negligence is to be compared to the plaintiff's negligence for purposes of the defense of comparative fault—does not include people who behaved wantonly or intentionally. See id. at 376, 111 P.3d 762. Because those people are simply not in the comparison group, they not only cannot rely on the defense of comparative fault themselves, but no one can look to them for apportionment under ORS 31.605. 4 See id. *225 We note that Shin itself involved intentional misconduct by the third-party defendant (the plaintiff's father) whose liability the defendant wanted apportioned, and Shin mostly discusses intentional misconduct. However, Shin uses the phrase “willful or intentional conduct” in a way that could be intended to refer to wanton or intentional **970 conduct. See id. (“Before the adoption of comparative fault, contributory negligence was not a defense to willful or intentional misconduct.”). In any event, the logic of Shin necessarily applies to both the third and fourth categories of tortious conduct. There is no basis to distinguish between the third and fourth categories of conduct for comparative-fault purposes, and Shin’s reasoning is grounded almost entirely in the comparative-fault statute, ORS 31.600.

Shin also addresses the several-only-liability statute, however, briefly but decisively. See Shin, 199 Or App at 378-79, 111 P.3d 762. Shin concludes that the reference in ORS 31.610 (the several-only-liability statute) to ORS 31.605 (the apportionment mechanism) has the effect of limiting the scope of ORS 31.610 to the same people who can use the defense of comparative fault against a negligent plaintiff, i.e., the group of people identified in ORS 31.605 whose collective

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negligence is compared to the plaintiff's for purposes of the defense of comparative fault. See id. Anyone not included in that group is not covered by the several-only-liability statute.

See id. The implication is that common-law joint and several liability continues to apply to those excluded tortfeasors, eliminating any benefit to their requesting apportionment findings under ORS 31.605. See id.

Shin appears to be the only published case making a connection between the availability of the comparative-fault defense, ORS 31.600, and the applicability of the severalonly-liability statute, ORS 31.610, and its discussion is extremely brief. However, defendant has not developed any argument to distinguish Shin, nor has it identified any error in Shin’s reasoning. Under Shin, plaintiffs are correct that, regardless of when plaintiffs’ action “arose,” defendant is

jointly and severally liable for all of plaintiffs’ damages, based on the jury's “reckless” finding. That being the case, any error that the trial court made in concluding that joint and several liability applies based on when the action “arose” *226 was harmless. Joint and several liability would apply anyway, based on Shin’s construction of ORS 31.610.

We therefore reject the third assignment without further discussion.

Affirmed.

All Citations 322 Or.App. 202, 518 P.3d 957, Prod.Liab.Rep. (CCH) P 21,545

Footnotes 1

Relatedly, in their opposition to directed verdict, when discussing an insurance policy that contained the phrase “willful and wanton,” plaintiffs stated that “reckless” conduct is obviously different from “willful and wanton” conduct. Defendant views that statement as plaintiffs expressly taking the position that “reckless” and “wanton” are different. However, it was the insurer that bundled together the terms “willful and wanton,” and we disagree that distinguishing “reckless” from “willful and wanton” equates to distinguishing “reckless” from “wanton.”

2

It is not immediately apparent how defendant could have been harmed by an instruction that, in defendant's view, required the jury to find too high a degree of culpability before defendant would be foreclosed from using the defense of comparative fault. We need not consider that issue, however, given our disposition.

3

We acknowledge that, notwithstanding the admonition in Falls, both we and the Supreme Court have occasionally continued to use “willful” to mean “wanton.” See, e.g., Taylor v. Lawrence, 229 Or. 259, 264, 366 P.2d 735 (1961) (describing “reckless disregard of safety” as “an equivalent for wilful or wanton misconduct”); Hampton Tree Farms, 158 Or App at 393-95, 974 P.2d 738 (repeatedly using “wilful” to mean “wanton”).

4

There are practical ramifications to excluding “wanton” defendants from the comparison group in a negligence action. If the plaintiff was negligent, the comparison group being smaller could result in the plaintiff having a higher percentage of fault relative to the smaller group. Also, the trier of fact (whether jury or judge) will have to account for its culpability findings in making apportionment findings, as accidentally including a wanton defendant in the comparison group would result in the percentages of the “real” comparison group not adding up to 100% as required by ORS 31.605.

End of Document

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Adelsperger v. Elkside Development LLC, --- P.3d ---- (2023) 371 Or. 61

371 Or. 61 Supreme Court of Oregon.

Ron ADELSPERGER; Sally Adelsperger; Walter Arnold; Sandy Arnold; Larry Brewer; Marilyn Brewer; James Brown; Lonna Brown; Bill Burgess; Jane Burgess; Shirley Calkins; Jerry Christensen, aka Gerald Christenson; Cindy Christensen, aka Cynthia EvansChristenson; Russell Cobb; Norma Cobb; Ron Ellis; Sallie Ellis; Amy Flickenger Pierpoint, aka Amy Flickenger-Pierpoint; Glen Pierpoint; Mike Fredrickson; Tresea Fredrickson; David Fulcer; Sarah Fulcer; Jack Gibson; Sharon Sue Gibson, aka Sue Gibson; Mary Gray; Rudolph Hanna; Brenda Hanna; Gerald Hastings, aka Jerry Hastings; Shirley House; Michael Huntley; Gloria Huntley; Rodney Hyde, aka Rod Hyde; Patricia Hyde; Johnnie Issacs, aka Johnnie Isaacs; Rowina Issacs, aka Rowena Isaacs; Don Johnson, aka Donald Johnson; Linda Johnson; Robert Kasmar; Linda Kasmar; Kraig Knutson; Barbara Knutson; Tom Kuntz; Brenda Kuntz; Richard Mathis; Linda Mathis; Gary McCord; Marie McCord; David McReynolds; Joseph Moore; Geraldine Moore; Adam Morgan; Vicky Morgan, aka Victoria Morgan; Thomas Noel; William Oar; Donald Partridge, aka Don Partridge; Lucille Partridge, aka Lucy Partridge; Craig Pedersen; Cheryl Pedersen; David Smith; Carol Smith; William Thomas, aka Bill Thomas; Jackie Thomas; Fred Waidtlow; Linda Waidtlow; Gary Wayman; Charlotte Wayman; David Weberg; Jeanne Weberg; Forrest Wheeler; and Jane Wheeler, Petitioners on Review, v.

ELKSIDE DEVELOPMENT LLC, Successor in Interest to Osprey Point RV Park, LLC, and Barnett Resorts, LLC, an Oregon Limited Liability Company, dba Osprey Point RV Resort, Defendants, and Chris Barnett and Stefani Barnett, Respondents on Review.

(CC 19CV14756) (SC S069449) | Argued and Submitted January 18, 2023. | May 18, 2023

Synopsis Background: Members of recreational vehicle (RV) resort brought action against limited liability company (LLC) that purchased resort and LLC member-managers alleging breach of contract, intentional interference with contract, and elder abuse arising from LLC's refusal to honor resort members' camping contracts with prior resort owner. The Circuit Court, Coos County, Andrew E. Combs, J., 2020 WL 13616284, granted summary judgment for LLC member-managers.

Resort members appealed. The Court of Appeals affirmed.

Resort members sought review, which was granted.

Holdings: The Supreme Court, James, J., held that: LLC member-managers did not have statutory protection from claim of elder abuse for permitting LLC to not honor old contracts; lack of privity precluded LLC member-managers from being held personally liable for breach of contract; and for an equally divided court, grant of summary judgment on claim of interference with contract would be affirmed.

Affirmed in part, reversed in part, and remanded.

Bushong, J., filed opinion concurring in part and dissenting in part, in which Garrett and DeHoog, JJ., joined.

Procedural Posture(s): Petition for Discretionary Review; On Appeal; Motion for Summary Judgment.

On review from the Court of Appeals. * (CA A174502) Attorneys and Law Firms Ronald L. Sperry III, Johnson & McKinney DBA DC Law, Roseburg, argued the cause and filed the brief for petitioners on review. Also on the brief was Dan G. McKinney.

Elizabeth W. Armitage, Frohnmayer, Deatherage, Jamieson, Moore, Armosino & McGovern, P.C., Medford, argued the cause and filed the brief for respondents on review. Also on the briefs was Tracy M. McGovern.

Before Flynn, Chief Justice, and Duncan, Garrett, DeHoog, Bushong, and James, Justices. **

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Adelsperger v. Elkside Development LLC, --- P.3d ---- (2023) 371 Or. 61

Opinion JAMES, J. **1 *64 This case comes to us upon the grant of summary judgment. Elkside Development LLC (Elkside) owned and operated the Osprey Point RV Resort in Lakeside, Oregon.

Part of Elkside's business model involved selling membership contracts that conferred free use of the campground, among other benefits. In April 2017, Barnett Resorts, LLC, an Oregon limited liability company operated by membermanagers Stefani Barnett and Chris Barnett, purchased Elkside. Shortly after the purchase, Stefani Barnett and Chris Barnett sent a letter to all campground members, identifying them as “owners” of the resort, and indicating that they would not honor Elkside's membership contracts. Plaintiffs —a group of 71 people who, collectively, were party to 39 membership contracts with Elkside—brought suit alleging a variety of claims against Stefani Barnett and Chris Barnett individually, and against the company, Barnett Resorts, LLC. Three of those claims have formed the basis of the parties’ arguments on appeal. For our purposes, they can be categorized as (1) a breach of contract claim; (2) an intentional interference with contract claim; and (3) a statutory claim of elder abuse, based on the fact that the majority of the membership contracts had been held by plaintiffs over the age of 65. 1 As to the claims against Stefani Barnett and Chris Barnett individually, the trial court granted summary judgment for defendants, relying on ORS 63.165 and our opinion in Cortez v. Nacco Material Handling Group, 356 Or. 254, 280, 337 P.3d 111 (2014). 2 ORS 63.165(1) provides: “The debts, obligations and liabilities of a limited liability company, whether arising in contract, tort or otherwise, are solely the debts, obligations and liabilities of the limited liability company. A member or manager is not personally *65 liable for a debt, obligation or liability of the limited liability company solely by reason of being or acting as a member or manager.”

Plaintiffs appealed, arguing that the trial court erred in its understanding of ORS 63.165. Plaintiffs argued, in part, that whether ORS 63.165 shielded the Barnetts from liability required considering whether their actions were entirely in support of the LLC, or whether they were, instead, in furtherance of a non-LLC individual motive. The Court of Appeals heard oral argument, and then affirmed without

opinion. We allowed review and now reverse in part the decision of the Court of Appeals and the judgment of the trial court: Specifically, we reverse as to the elder abuse claim, affirm as to the breach of contract claim, and affirm the intentional interference claim by an equally divided court.

OVERVIEW **2 The contours of summary judgment review are set by the operative complaint and the specific arguments for summary judgment advanced by a party. 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.

Two Two v. Fujitec America, Inc., 355 Or. 319, 324, 325 P.3d 707 (2014). But a party does not have the burden of producing evidence on an issue that is not raised in the motion. Id. at 325, 325 P.3d 707.

Once the parameters of what is, and is not, at issue in summary judgment are identified, we will affirm the trial court's judgment if we agree that “there is no genuine issue as to any material fact and * * * the moving party [was] entitled to a judgment as a matter of law.” ORCP 47 C; see also Robinson v. Lamb's Wilsonville Thriftway, 332 Or. 453, 455, 31 P.3d 421 (2001) (describing that standard on review).

No issue of material fact exists if, viewing the evidence in the light most favorable to the nonmoving party—here, plaintiffs —“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.” ORCP 47 C. *66 In accord with that standard, we begin by setting forth, in greater detail, plaintiffs’ allegations in the first amended complaint, as well as defendants’ framing of the basis for summary judgment. Plaintiffs’ second claim for relief alleged a breach of contract claim against Elkside, Barnett Resorts, LLC, and the Barnetts individually, claiming that they had “breached the membership camping contract and guarantee with each Plaintiff by denying Plaintiffs the contractual right to the use of the Resort facilities set forth in the membership camping contracts.” They further alleged that Elkside “breached the contracts by assigning its obligations to [Barnett Resorts, LLC] without permission or release from Plaintiffs. [Barnett Resorts, LLC] thereafter denied the Plaintiffs’ rights under the membership camping contracts.”

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Plaintiffs’ fourth claim for relief alleged a statutory elder abuse claim, asserting that both the Barnetts individually, as well as Barnett Resorts, LLC, had a “responsibility to honor the membership campground contracts of the Elderly Plaintiffs” and had “acquired a property right of the Elderly Plaintiffs (ORS 124.110[(1)](a)) or [held] in trust the annual dues and property rights of the Elderly Plaintiffs (ORS 124.110[(1)](b)).” The claim then alleged that both Barnett Resorts, LLC and the individual defendants had “acted in bad faith in refusing to honor the property rights and knew or should have known that the Elderly Plaintiffs had the rights in the membership camping contracts and the rights to use the Resort.”

Finally, plaintiffs’ sixth claim for relief alleged intentional interference with contractual relations against both Barnett Resorts, LLC and the Barnetts individually. That claim was specifically raised as an alternative claim to the breach of contract, “in the event Defendants Barnett are found not to be a contractual successor to [Elkside] and bound as a contracting party to the membership camping contracts.”

In that alternative, plaintiffs alleged that the Barnetts intentionally interfered with the contractual relationship “between Plaintiffs and [Elkside] by acquiring the Resort with knowledge of the existence of the membership camping contracts and thereafter denying the Plaintiffs access to Resort facilities.” **3 *67 Defendants’ arguments for summary judgment were undifferentiated by the individual claims in the complaint. Instead, defendants raised a unitary argument, against all claims and on behalf of all defendants equally, that primarily relied on the assertion that defendants had purchased property, not a business. Defendants challenged the recordation of the membership contracts, arguing that alleged failure to record prevented the contracts from encumbering the property. Without recordation, defendants argued, the membership camping contracts were retail installment contracts pursuant to ORS 94.989(2). Defendants argued that they had not purchased the contracts, only the land of the mobile home park. Those arguments encompassed almost the entirety of the summary judgment motion but were not the basis for the trial court's ruling and are not the subject of this appeal.

The argument that did form the basis of the trial court's partial grant of summary judgment occurs in the final two paragraphs of the summary judgment motion:

“Members of a limited liability company are personally liable only to the same extent and in the same manners as shareholders of a professional corporation. ORS 63.074(2).

A member is not liable for the acts or debts of an LLC merely by reason of being a member. ORS 60.151(2).

“Plaintiffs have asserted claims against Barnett Resorts, LLC, but also against Chris and Stefani Barnett as the owners and operators of Barnett Resorts. It is axiomatic that an LLC owner or member is not liable for a claim against the LLC. Indeed, the purpose of organizing and carrying out business in an LLC, rather than some other form, is to avoid such liability. Barnett Resorts, LLC is the sole owner and operator of Osprey Point. Chris and Stefani Barnett are entitled to judgment as a matter of law.”

As to the claims against the Barnetts individually, the trial court granted summary judgment for defendants, relying on ORS 63.165 and our opinion in Cortez, 356 Or. at 280, 337 P.3d 111. As the trial court reasoned: “The general rule regarding the liability of members and managers of limited liability companies in Oregon was explained in Cortez[, 356 Or. at 280, 337 P.3d 111,] as follows: *68 “ ‘ORS 63.165 immunizes members and managers of an LLC from vicarious liability for the debts, obligations, and liabilities of that LLC. LLC members and managers, however, remain personally liable for their acts and omissions to the extent those acts or omissions would be actionable against the member or manager if that person were acting in an individual capacity.’

“The court finds in the instant matter that of the six claims alleged by plaintiffs’ in their first amended complaint, that none of those claims allege acts or omissions by defendants Chris Barnett or Stefani Barnett that would provide a basis for imposing personal liability on either.

Chris Barnett and Stefani Barnett formed Barnett Resorts, LLC on February 27, 2017; Barnett Resorts LLC purchased the property on April 28, 2017; and Barnett Resorts LLC has been the owner of the property ever since. For these reasons, the court finds that defendants Chris Barnett and Stefani Barnett are entitled to summary judgment on all of plaintiffs’ claims.”

On appeal, defendants raise a number of arguments in defense of the trial court's ruling; however, many of those arguments

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are unpreserved. Defendants argue that plaintiffs’ claims for elder abuse fail because defendants did not withhold money or property under ORS 124.110(1)(a) or (b). That argument was developed at trial, on the claims against Barnett Resorts, LLC that survived, but that was not an argument before the summary judgment court. Similarly, defendants argue that, as to the intentional interference claim, plaintiffs failed to provide evidence of an improper means or motive. That also was not an argument before the summary judgment court. As set forth above, the arguments on summary judgment were limited, and the sole basis of the court's grant of summary judgment was ORS 63.165. Accordingly, that is the singular issue we address. **4 With that background now set, we turn to Cortez, where we noted that the Oregon legislature patterned ORS 63.165 off the Uniform Limited Liability Company Act (ULLCA) (1996) and adopted verbatim subsections 303(a) and (b) from that uniform act. We noted that a comment to that section included the following statement: *69 “ ‘A member or manager is responsible for acts or omissions to the extent those acts or omissions would be actionable in contract or tort against the member or manager if that person were acting in an individual capacity. Where a member or manager delegates or assigns the authority or duty to exercise appropriate company functions, the member or manager is ordinarily not personally liable for the acts or omissions of the officer, employee, or agent [of the LLC] if the member or manager has complied with the duty of care set forth in Section 409(c).’ ” Cortez, 356 Or. at 267-68, 337 P.3d 111 (citing ULLCA § 303 comment (1996) (brackets in Cortez)). Accordingly, we held that “members and managers remain personally liable for the actions that they take on behalf of an LLC to the same extent that they would be liable ‘if [they] were acting in an individual capacity.’ ” Id. at 268, 337 P.3d 111 (brackets in Cortez). We therefore turn to applying that principle to each of the three claims at issue here. We begin with plaintiffs’ elder abuse claim, then proceed to consider the breach of contract claim, and conclude with the intentional interference with contract claim.

ELDER ABUSE ORS 124.100(2) provides that “[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.” As used in the Oregon Revised Statutes, the term “person” is generally defined to include “individuals, corporations, associations, firms, partnerships, limited liability companies and joint stock companies.” ORS 174.100(7) (so providing unless context or specific statutory definition provides otherwise). By its terms, then, an action for elder abuse can lie against a corporate abuser, as well as those people who have “permitted” the corporation to abuse the elderly person.

To what extent, if at all, ORS 63.165 operates to preclude a claim for elder abuse, under ORS 124.100(2), is a question of statutory interpretation. We approach such questions with the “paramount goal” to discern the intention of the legislature. *70 State v. Gaines, 346 Or. 160, 171, 206 P.3d 1042 (2009).

In pursuing that goal, we give primary weight to the text and context of the disputed statutory terms. Id. As we emphasized in Gaines, “there is no more persuasive evidence of the intent of the legislature than the words by which the legislature undertook to give expression to its wishes.” Id. (internal quotation marks omitted).

ORS 124.100(2), by its terms, contemplates direct liability in tort for an individual who permits another—including a corporation—to commit elder abuse. The parties have provided us no legislative history that would contradict the plain text, and our review of the history of ORS 124.100(2) shows no indication that the legislature sought to exclude from direct liability those who permitted abuse by a corporate actor. **5 As part of construing the text and context of a statute, we also look to case law construing the statute at issue. See Sherman v. Dept. of Human Services, 368 Or. 403, 411-12, 492 P.3d 31 (2021) (so demonstrating). In imposing direct liability for those who permit another to commit elder abuse, ORS 124.100(2) bears similarity to the statute at issue in Cortez. There, we considered a workplace safety statute that imposed obligations on a person who “retains the right to control the manner or method in which the risk-producing activity was performed.” 356 Or. at 273, 337 P.3d 111. The plaintiff in Cortez was injured while working for a lumber mill owned by an LLC and sued the member-manager of the LLC, arguing that the member-manager was a person subject to the statute. Id. at 256, 337 P.3d 111. The member-manager argued that, under ORS 63.165(1), it could not be held personally

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liable for harm arising out of the LLC's business operations based on “merely having the authority to require the LLC to prevent a workplace accident.” Id. at 263, 337 P.3d 111.

We held that ORS 63.165(1) did not shield the membermanager of an LLC from liability for failing to satisfy the statutory safe-workplace obligations. We reasoned that “ORS 63.165(1) immunizes [the LLC member] only from vicarious liability for the LLC's obligations,” and not from liability for its own omissions if, having retained control, the person failed to provide, or to require the LLC to provide, a safe workplace.

Id. at 264, 337 P.3d 111. *71 Later, in Kinzua Resources v. DEQ, 366 Or. 674, 468 P.3d 410 (2020), we considered two additional statutes—ORS 459.205 and ORS 459.268—which imposed obligations on the permit holder for the proper closure of a landfill. We construed the landfill permit statutes with ORS 63.165(1) and concluded that individual liability for LLC member-managers was permissible: “The commission contends that ORS 63.165(1) permits it to impose liability based on [the] petitioners’ own failure to perform obligations with which they were individually charged in their capacity as persons ‘controlling’ the landfill.

“We agree with the commission that ORS 459.205 and ORS 459.268 impose obligations directly on each person ‘controlling’ a landfill and that liability for the person's own failure to satisfy those obligations is direct liability, which ORS 63.165(1) does not prevent.”

Kinzua Resources, 366 Or. at 687, 468 P.3d 410.

Like the statutes at issue in Cortez and Kinzua Resources, ORS 124.100(2) creates liability for those that perpetrate elder abuse, as well as those who permit others to perpetrate elder abuse. 3 That liability is not vicarious; it is direct. In such an instance, ORS 63.165(1) is not a bar to asserting a claim for a statutory violation of ORS 124.100(2) against a member-manager of an LLC, when the LLC is alleged to be the entity that directly perpetrated the elder abuse. The trial court erred in granting summary judgment as to this claim.

BREACH OF CONTRACT We turn now to plaintiffs’ second claim for relief—breach of contract. Here, we agree with the trial court that there is no evidence that the Barnetts, acting in their individual capacity, breached the contract. As we explain, the trial court was therefore correct to preclude this claim according to ORS 63.165. *72 It is well established, both in Oregon and elsewhere, that generally speaking, but with some exceptions, privity of contract is an essential prerequisite to a breach of contract claim. See, e.g., Davis v. Homasote Company, 281 Or. 383, 386, 574 P.2d 1116 (1978); DAFCO LLC v. Stewart Title Guar.

Co., 156 Idaho 749, 754, 331 P.3d 491, 496 (2014) (“It is axiomatic in the law of contract that a person not in privity cannot sue on a contract.” (Quoting Wing v. Martin, 107 Idaho 267, 272, 688 P.2d 1172, 1177 (1984).)); Danielkiewicz v.

Whirlpool Corp., 426 F Supp 3d 426, 432 (ED Mich 2019) (citing the same); Yucyco, Ltd. v. Republic of Slovenia, 984 F Supp 209, 215 (SD NY 1997) (stating that a plaintiff “may not assert a cause of action to recover damages for breach of contract against a party with whom it is not in privity” of contract); Cent. Con. Co. v. Paradise Valley Utility, 634 P2d 346, 348 (Wyo 1981) (“[P]rivity of contract is an essential element [for] a cause of action on a contract[.]” (Internal quotation marks omitted.)). **6 Here, the parties do not dispute that the Barnetts, individually, are not signatories to the contracts at issue.

The membership contracts existed between Elkside and plaintiffs. The purchase of Osprey Point was accomplished through a contract between Elkside and Barnett Resorts, LLC. To the extent that the Barnetts took any action in that contract formation, they did so solely as agents of the LLC. Accordingly, and as the parties effectively acknowledged at oral argument, the Barnetts, individually, are not in privity with any of the plaintiffs or Elkside as to the contracts at issue.

Under ORS 63.165, member-managers remain personally liable for their acts or omission only to the extent that “those acts or omissions would be actionable against the member or manager if that person were acting in an individual capacity.”

Cortez, 356 Or. at 280, 337 P.3d 111. That concept presumes that “those acts or omissions” could have been undertaken by a person in their individual capacity. In this case, the Barnetts lack privity with Elkside or plaintiffs. Absent certain

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circumstances not present here, such as issues of implied warranty, a nonparty to a contract cannot bring suit for breach of that contract, and in reverse, parties to a contract cannot bring suit against a third-party for breach of the contract.

Thus, as alleged by plaintiffs, any “acts or *73 omissions” by the Barnetts with respect to the contract could not possibly have been undertaken in their individual capacities. As such, the trial court did not err in granting summary judgment as to the breach of contract claim against defendants Stefani Barnett and Chris Barnett individually.

INTENTIONAL INTERFERENCE Finally, we turn to plaintiffs’ sixth claim, intentional interference with contractual relations. “A mere breach of contract cannot be sued on as a tort, but for tortious acts, independent of the contract, a man may be sued in tort, though one of the consequences is a breach of his contract.” Harper v. Interstate Brewery Co., 168 Or. 26, 37-38, 120 P.2d 757 (1942) (citing Stock v. City of Boston, 149 Mass. 410, 21 N.E. 871, 872, 14 Am St Rep 430 (1889)). Intentional interference with economic or contractual relations is the name we give to tortious conduct, independent of a contract, that brings about a breach of that contract.

To state a claim for intentional interference with economic or contractual relations, a party must allege each of the following elements: (1) the existence of a professional or business relationship, (2) intentional interference by the third party with the relationship, (3) that the interference was accomplished through improper means or for an improper purpose, (4) the interference caused damage to the economic relationship, and (5) damages. McGanty v. Staudenraus, 321 Or. 532, 535, 901 P.2d 841 (1995); Straube v. Larson, 287 Or. 357, 360-61, 600 P.2d 371 (1979); Wampler v. Palmerton, 250 Or. 65, 73-76, 439 P.2d 601 (1968); see Lewis v. Oregon Beauty Supply Co., 302 Or. 616, 621, 733 P.2d 430 (1987), overruled in part on other grounds by McGanty, 321 Or. 532, 901 P.2d 841 (complaint must allege “[e]ither the pursuit of an improper objective of harming plaintiff or the use of wrongful means that in fact cause injury to plaintiff's contractual or business relationships”); see also Sheets v. Knight, 308 Or. 220, 237, 779 P.2d 1000 (1989), overruled in part on other grounds by McGanty, 321 Or. 532, 901 P.2d 841 (holding same); Top Service Body Shop v. Allstate Ins. Co., 283 Or. 201, 205, 582 P.2d 1365 (1978) (holding same).

In applying that rule here, it is important to call attention to how the claim was pleaded in this instance. *74 Plaintiffs asserted an intentional interference claim as an alternative to their breach of contract claim. As plaintiffs stated in the first amended complaint, the claim was triggered only “in the event Defendants Barnett are found not to be a contractual successor to [Elkside] and bound as a contracting party to the membership camping contracts.” As such, the claim would only exist if it was determined that Barnett Resorts, LLC was not a successor in interest to Elkside and did not assume the obligations of Elkside's contracts with the plaintiffs. Further, plaintiffs did not allege that the Barnetts, individually, had interfered with Barnett Resorts, LLC's contract. Rather, the claim asserted that Barnett Resorts, LLC, and the Barnetts individually, interfered as third parties to a contract between plaintiffs and Elkside. That interference was alleged to be accomplished by “acquiring the Resort with knowledge of the existence of the membership camping contracts and thereafter denying the Plaintiffs access to Resort facilities.” **7 So framed, ORS 63.165 is not an obvious bar. Both individuals and corporations can be liable for intentional interference in economic and contractual relations. In the situation presented here, when both the LLC and its membermanager are alleged to have acted tortiously vis-à-vis a contract between third parties, the individual liability of the member-manager under ORS 63.165 turns upon principles of agency—whether the member-manager acted upon individual motives, and for individual benefit, or merely acted as an agent of the corporation, in furtherance of a corporate motive. “So long as the officer or employee acts within the general range of his authority intending to benefit the corporation, the law identifies his actions with the corporation.” Wampler, 250 Or. at 76-77, 439 P.2d 601.

Before the trial court and the Court of Appeals, plaintiffs argued that the trial court erred in failing to consider whether a genuine issue of material fact existed as to whether the Barnetts interfered in furtherance of personal motives, or merely in their capacity as agents of the LLC. Plaintiffs were correct. The trial court's grant of summary judgment—based solely on ORS 63.165, without consideration of whether the Barnetts were acting within their authority for the benefit of the corporation, or for individual *75 motives—was misplaced, and the trial court erred. See, e.g., Bova v. City of Medford, 262 Or App 29, 43, 324 P.3d 492, rev. den, 356 Or 516, 340 P.3d 47 (2014) (reversing grant of summary judgment based on an incorrect statutory interpretation).

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Our holding here is narrow and confined to the particularities of the parties’ arguments and the trial court's reasoning. ORS 63.165 was the argument raised in defendants’ summary judgment motion as to the elder abuse and intentional interference claim, and the sole basis of the trial court's ruling.

No opinion is offered as to whether summary judgment might be appropriate on some alternative grounds. As discussed, the alternative arguments presented on appeal were not before the trial court, and no party has invoked a “right for the wrong reasons” rationale. See Outdoor Media Dimensions Inc. v.

State of Oregon, 331 Or. 634, 659-60, 20 P.3d 180 (2001) (setting out conditions for affirmance under a “right for the wrong reasons” basis); State v. Rogers, 330 Or. 282, 295, 4 P.3d 1261 (2000) (“The ‘right for the wrong reason’ principle establishes that appellate courts may examine legal arguments not relied on by a trial court to determine if those arguments provide a basis for affirmance.”). The foregoing analysis is simply that, on this record, ORS 63.165 did not bar plaintiffs’ claim such that summary judgment was required.

It is worth noting that the claims that survived summary judgment here, against Barnett Resorts, LLC, proceeded through verdict, and that verdict is now the subject of a different appellate proceeding—Adelsperger v. Elkside Development LLC, 322 Or App 809, 523 P.3d 142 (2022). It is certainly possible that the ultimate resolution of the issues presented in that case may ultimately affect the claims at issue here. As the dissent notes, whether this decision will have a meaningful affect upon the parties is a prudential concern. See, e.g., City of Damascus v. State of Oregon, 367 Or. 41, 68 n 13, 472 P.3d 741 (2020) (“We express no opinion here regarding the circumstances in which advisory opinions may or may not be unconstitutional * * *. The point is that there are prudential and jurisprudential reasons to avoid unnecessarily deciding legal issues that may be presented in a case, if the case can be appropriately resolved on more limited grounds.”). However, at this point in time, that *76 case has not reached finality, and we will not prognosticate its future.

The dissent would hold the decision in this case, to avoid “piecemeal litigation of related claims.” However, it is not prudent to intentionally delay issuance of a decision in this matter to await an unknown outcome when no lower court has consolidated the cases, and no party has moved for the cases to be consolidated, nor asked this court to hold a decision in abeyance. The ultimate applicability of that other case to the claims here is left to the sound wisdom of the trial court upon remand.

**8 The decision of the Court of Appeals is affirmed in part, affirmed in part by an equally divided court, and reversed in part. The judgment of the circuit court is affirmed in part, affirmed in part by an equally divided court, and reversed in part, and the case is remanded to the circuit court for further proceedings.

Bushong, J. concurred in part and dissented in part and filed an opinion, in which Garrett and DeHoog, JJ., joined.

BUSHONG, J., concurring in part, dissenting in part.

I agree with the majority's disposition of the elder abuse and breach of contract claims, and I join in the majority opinion on those claims. 1 I write separately, however, to explain my preferred approach as a procedural matter as to the elder abuse and intentional interference claims, and relatedly, why I disagree with the majority's disposition of the intentional interference claim. I would await the final appellate disposition of Adelsperger v. Elkside Development LLC, 322 Or App 809, 523 P.3d 142 (2022) (Adelsperger II), recently decided by the Court of Appeals and involving similar claims from these same plaintiffs, 2 before addressing the elder abuse and intentional interference claims in this case.

In my view, we should not be addressing those claims at this stage of the proceeding, because they are intertwined with the issues decided in Adelsperger II. The final disposition of those issues may, in the end, transform the majority *77 opinion into an advisory opinion that has no practical effect on the parties. At the very least, deciding those issues now unnecessarily continues the piecemeal litigation of related claims. 3 In reversing the trial court's summary judgment ruling on the two noted claims against defendants Stefani and Chris Barnett (the Barnetts), the majority opinion concludes that ORS 63.165 does not shield them individually from liability for elder abuse or intentional interference with contract. On the elder abuse claim, the majority opinion concludes that ORS 63.165 is not a bar to asserting the claim against the Barnetts individually simply because the entity alleged to have “directly perpetrated the elder abuse” is the LLC and not its individual members. 371 Or at 72, ––– P.3d at ––––. But, in Adelsperger II—which involves the same claims as asserted by these same plaintiffs against Barnett Resorts, LLC—the Court of Appeals determined that plaintiffs had failed to prove at trial that the LLC had perpetrated elder abuse. Adelsperger II, 322 Or App at 827, 523 P.3d 142.

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Similarly, the majority opinion acknowledges that the intentional interference claim “would only exist if it was determined that Barnett Resorts LLC was not a successor in interest to Elkside [Resorts LLC] and did not assume the obligations of Elkside's contracts with the plaintiffs.” 371 Or at 74, ––– P.3d at ––––. But again, in Adelsperger II, the Court of Appeals concluded that sufficient evidence at trial had supported the jury's conclusion that Barnett Resorts LLC had been a successor in interest and thus had assumed the obligations of Elkside's contracts with the plaintiffs. 322 Or App at 819-20, 523 P.3d 142. **9 If the Court of Appeals’ resolution in Adelsperger II of those claims as to the LLC becomes final, then the majority opinion's resolution of the issues in this case—whether the trial court properly granted summary judgment to the Barnetts under ORS 63.165 on those same two claims—would amount to an advisory opinion that has no practical effect on the parties. And if the Court of Appeals’ resolution of those claims in Adelsperger II does not become final—that is, if we allow plaintiffs’ pending petition for review—then *78 deciding now that the Barnetts might be liable on those claims and deciding later whether the Court of Appeals correctly resolved those claims against the LLC would continue the piecemeal litigation of these related claims.

We typically seek “to avoid piecemeal litigation of multiple claims likely to involve related facts.” Thompson v. Coughlin, 329 Or. 630, 637, 997 P.2d 191 (2000). And there are prudential reasons to avoid unnecessarily deciding issues that may not have any practical effect on the parties. See City of Damascus v. State of Oregon, 367 Or. 41, 68 n 13, 472 P.3d 741 (2020) (“We express no opinion here regarding the circumstances in which advisory opinions may or may not be unconstitutional[.] *** Our point is that there are prudential and jurisprudential reasons to avoid unnecessarily deciding legal issues that may be presented in a case, if the case can be appropriately resolved on more limited grounds.”).

The majority opinion acknowledges that final resolution of the claims against the LLC may affect the ultimate disposition of the claims against the Barnetts. 371 Or at 75, ––– P.3d at ––––. The majority opinion also acknowledges that, depending upon how the claims against the LLC are ultimately resolved, today's decision may not have any meaningful effect on the parties. Id. at 75-76, ––– P.3d at –––– – ––––. Nevertheless, it concludes that it would not be

prudential to await the final resolution of the claims against the LLC. Id. The majority justifies that conclusion by treating Adelsperger II as a different “case” that has not been consolidated with this case, concluding that the “ultimate applicability of that other case” to the claims here should be left to the trial court.

Id. at 76, ––– P.3d at ––––. But there is no “other case”; there is one action commenced by filing a complaint that ultimately resulted in splintered appeals, each of which were assigned different case numbers. See ORCP 3 (“[A]n action shall be commenced by filing a complaint with the clerk of the court.”). The claims addressed by the majority opinion and by the Court of Appeals in Adelsperger II were asserted in the same complaint filed in the same action.

I suggest that, under the circumstances, the prudential decision would be to await final resolution of the *79 claims against the LLC, and then resolve all the remaining claims asserted in this action at once.

In addition, I disagree with the majority's disposition of the intentional interference claim for a reason that further highlights why we should not be deciding that alternative claim at all. The majority opinion called attention to how this claim was pleaded—as an alternative to the breach of contract claim—and framed the issue as whether ORS 63.165 barred a claim asserting that the Barnetts individually (and the LLC) interfered with contracts between plaintiffs and Elkside. 371 Or at 74, ––– P.3d at ––––.

The majority then concludes that ORS 63.165 is not “an obvious bar” to the claim because, under Wampler v.

Palmerton, 250 Or. 65, 74-77, 439 P.2d 601 (1968), the claim hinges on whether “the Barnetts were acting within their authority for the benefit of the corporation, or for individual motives[.]” 371 Or at 74-75, ––– P.3d at –––– – ––––; see also id. at 74, ––– P.3d at –––– (citing test under Wampler); id. (applying test). **10 However, the circumstances presented here are different from those presented in Wampler, and the majority's application of the Wampler test for determining individual liability of corporate officials in this context is flawed.

The plaintiff in Wampler alleged that the individual defendants—the president and a business advisor of Diamond Lake Lumber Company (Diamond Lake)—were liable for interfering with a logging contract between the plaintiff and Diamond Lake. A jury ruled in favor of the plaintiff, and the

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Adelsperger v. Elkside Development LLC, --- P.3d ---- (2023) 371 Or. 61

individual defendants appealed. 250 Or. at 67-68, 439 P.2d 601.

This court first noted that, “[i]n the usual interference with a contract situation, the person interfering is a complete stranger to the contractual relationship.” Id. at 74, 439 P.2d 601. But Wampler added a “complicating ingredient *** where the party induced to breach its contract is a corporation and the third person who induces the breach is not a stranger, but is a person who, by reason of his position with the corporation, owes a duty of advice and action to the corporation.” Id. The interest protected by an interference with contract claim “is the interest of the plaintiff in not having his contract rights interfered with by intermeddling strangers.” *80 Id. at 77, 439 P.2d 601. Thus, “so long as the person inducing the breach of a corporate contract is an officer or employe[e] acting for the benefit of the corporation and within the scope of his authority, the plaintiff cannot show that this interest was invaded and therefore cannot maintain an interference with contract action.” Id. “On the other hand,” the Wampler court explained, “there is no reason to protect corporate officers or employe[e]s who authorize, direct and participate in tortious conduct by their corporate principal.” Id. “If the corporation commits a tort as a result of such intentional action on the part of its officers or employe[e]s, these agents are also responsible.” Id. Thus, whether there was a jury question as to the liability of the individual defendants in Wampler depended on “whether there [was] evidence that defendants were guilty of engaging in tortious conduct upon behalf of the corporation.” Id. at 78, 439 P.2d 601. The Wampler court reviewed the evidence at trial, noting first that “there is no direct evidence of any bad motive or intent” in almost all cases “in which intent is in issue.” Id. at 80, 439 P.2d 601. As a result, it was necessary for the court “to ascertain whether there [was] sufficient circumstantial evidence” of bad motive or intent. Id. Finding none in the trial court record, the court concluded that “[t]he trial court erred in failing to grant the defendants’ motion for a directed verdict.” Id. at 82, 439 P.2d 601.

Cases decided after Wampler have made it clear that an intentional interference with contract claim requires proof of “the pursuit of an improper objective of harming plaintiff or the use of wrongful means that in fact cause injury to plaintiff's contractual or business relationships.” Lewis v.

Oregon Beauty Supply Co., 302 Or. 616, 621, 733 P.2d 430 (1987); see also Sheets v. Knight, 308 Or. 220, 237, 779 P.2d 1000 (1989), abrogated in part on other grounds by

McGanty v. Staudenraus, 321 Or. 532, 901 P.2d 841 (1995) (plaintiff must plead and prove that defendant, “either with an improper objective or through improper means, purposefully interfered with the plaintiff's contractual relationship with some third party, thereby causing the plaintiff damage”).

Thus, under Wampler and subsequent cases, for a corporate officer to be liable for intentionally interfering with a contract entered into by the corporation, the officer *81 must have authorized, directed, and participated in the corporation's tortious conduct, that is, conduct that not only amounted to a breach of contract but that was taken for improper motives or through improper means. **11 This case is different from Wampler because plaintiffs’ claim here is that the Barnetts may be individually liable for interfering with contracts between plaintiffs and Elkside.

In other words, this case involves “the usual interference with contract situation” where the persons alleged to have interfered with the contract—here, the Barnetts—are strangers to the contractual relationship with which they allegedly interfered. Thus, it is not clear that Wampler even applies here. Moreover, even assuming that Wampler is on point, applying the Wampler test would seem to require the court to review the summary judgment record to determine whether it contains direct or circumstantial evidence that the Barnetts acted with “bad motive or intent” in causing Barnett Resorts, LLC to tortiously interfere with the contracts between plaintiffs and Elkside.

The majority opinion does not (1) explain why the Wampler test applies in this context; (2) explain why “individual motives”—not “bad motives or intent”—would be enough to meet the Wampler test in this context; or (3) review the summary judgment record to determine whether it contains evidence of both individual motives and “bad motive or intent” sufficient to avoid summary judgment. Instead, it just concludes that the trial court erred by granting summary judgment “without consideration of whether the Barnetts were acting within their authority for the benefit of the corporation, or for individual motives[.]” 371 Or at 74-75, ––– P.3d at –––– – ––––.

My disagreement with how the majority opinion disposes of the intentional interference claim highlights the reasons why we should not be reversing the trial court's decision to grant summary judgment on that claim—pled as an alternative to plaintiffs’ breach of contract claim—at this stage of the proceedings. Accordingly, I dissent from that part of the majority opinion.

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Adelsperger v. Elkside Development LLC, --- P.3d ---- (2023) 371 Or. 61

All Citations Garrett and DeHoog, JJ., join in this concurring and dissenting opinion.

--- P.3d ----, 371 Or. 61, 2023 WL 3521492

Footnotes *

Appeal from Coos County Circuit Court, Andrew E. Combs, Judge. 317 Or App 666, 504 P3d 1 (2022).

**

Nelson, J., resigned February 25, 2023, and did not participate in the decision of this case.

1

The other claims are variations, or attendant to, the three main categories of claims. For example, the first claim for relief seeks a declaratory judgment as to the existence of a contract. The third claim seeks the appointment of a trustee.

2

The trial court allowed a breach of contract claim, and an elder abuse claim, against Barnett Resorts, LLC, to proceed, and the jury returned a verdict in favor of plaintiffs. Those claims form the basis of another pending appeal—Adelsperger v. Elkside Development LLC, 322 Or App 809, 523 P.3d 142 (2022).

3

We are not called upon here to delineate the boundaries of what constitutes permission under the statute.

1

For ease of reference, I use the term “majority opinion” throughout this opinion in referring to the opinion authored by Justice James. However, that opinion is not truly a “majority” opinion as to the intentional interference claim, which we are affirming by an equally divided court.

2

The Court of Appeals denied petitions for reconsideration in Adelsperger II on March 31, 2023. On May 5, plaintiffs petitioned this court for review of the Court of Appeals’ disposition of their elder abuse claim.

3

My views expressed in this opinion do not apply to the breach of contract claim addressed in the majority opinion.

End of Document

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Adelsperger v. Elkside Development LLC, 322 Or.App. 809 (2022) 523 P.3d 142

322 Or.App. 809 Court of Appeals of Oregon.

Ron ADELSPERGER; Sally Adelsperger; Walter Arnold; Sandy Arnold; Larry Brewer; Marilyn Brewer; James Brown; Lonna Brown; Bill Burgess; Jane Burgess; Shirley Calkins; Jerry Christensen, aka Gerald Christenson; Cindy Christensen, aka Cynthia EvansChristenson; Russell Cobb; Norma Cobb; Ron Ellis; Sallie Ellis; Amy Flickenger Pierpoint, aka Amy Flickenger-Pierpoint; Glen Pierpoint; Mike Fredrickson; Tresea Fredrickson; David Fulcer; Sarah Fulcer; Jack Gibson; Sharon Sue Gibson, aka Sue Gibson; Mary Gray; Rudolph Hanna; Brenda Hanna; Gerald Hastings, aka Jerry Hastings; Shirley House; Michael Huntley; Gloria Huntley; Rodney Hyde, aka Rod Hyde; Patricia Hyde; Johnnie Issacs, aka Johnnie Isaacs; Rowina Issacs, aka Rowena Isaacs; Don Johnson, aka Donald Johnson; Linda Johnson; Robert Kasmar; Linda Kasmar; Kraig Knutson; Barbara Knutson; Tom Kuntz; Brenda Kuntz; Richard Mathis; Linda Mathis; Gary McCord; Marie McCord; David McReynolds; Joseph Moore; Geraldine Moore; Adam Morgan; Vicky Morgan, aka Victoria Morgan; Thomas Noel; William Oar; Donald Partridge, aka Don Partridge; Lucille Partridge, aka Lucy Partridge; Craig Pedersen; Cheryl Pedersen; David Smith; Carol Smith; William Thomas, aka Bill Thomas; Jackie Thomas; Fred Waidtlow; Linda Waidtlow; Gary Wayman; Charlotte Wayman; David Weberg; Jeanne Weberg; Forrest Wheeler; and Jane Wheeler, Plaintiffs-Respondents, v.

ELKSIDE DEVELOPMENT LLC, Successor in Interest to Osprey Point RV Park, LLC et al., Defendants, and Barnett Resorts, LLC, an Oregon Limited Liability Company, dba Osprey Point RV Resort, Defendant-Appellant.

A174291 | Argued and Submitted January 10, 2022. | November 30, 2022

Synopsis Background: Resort members brought action against limited liability company (LLC) that purchased resort alleging breach of contract, elder financial abuse, and, in the alternative, intentional interference with economic relations after LLC did not honor memberships after it purchased resort. Following jury trial, the Circuit Court, Coos County, Andrew E. Combs, J., denied LLC's motion for direct verdict on all three claims, entered judgment on verdicts in favor of members on all claims, and awarded damages of $500,000 on the claim for breach of contract and $900,000 on the claim for elder financial abuse. LLC appealed.

Holdings: The Court of Appeals, Aoyagi, J., held that: LLC's failure to make any substantive argument to trial court or Court of Appeals as to why evidence was insufficient precluded reversal of trial court's denial of directed verdict on breach of contract claim; resort membership contracts were not “money or property,” and, thus, LLC's decision not to honor those contracts did not constitute elder financial abuse; and there was insufficient evidence that LLC had “improper purpose” in deciding not to honor membership contracts, to support members' claim of elder financial abuse.

Affirmed in part, reversed in part, and remanded.

See also 317 Or App 666, 504 P.3d 1.

Procedural Posture(s): On Appeal; Motion for Judgment as a Matter of Law (JMOL)/Directed Verdict; Judgment. **145 Coos County Circuit Court, 19CV14756; Andrew E. Combs, Judge.

Attorneys and Law Firms Alicia M. Wilson argued the cause for appellant. Also on the briefs was Frohnmayer, Deatherage, Jam Ieson, Moore, Armosino & McGovern, P.C. Dan G. McKinney argued the cause for respondents. Also on the brief was DC Law.

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Adelsperger v. Elkside Development LLC, 322 Or.App. 809 (2022) 523 P.3d 142

Before Tookey, Presiding Judge, and Aoyagi, Judge, and Armstrong, Senior Judge.

Opinion AOYAGI, J. *811 This case involves a dispute over membership camping contracts. For nearly 20 years, Elkside Development, LLC (Elkside) owned and operated the Osprey Point RV Resort in Lakeside. Elkside sold memberships as part of its business model. In exchange for payment of an initial fee and annual dues, members received free use of the campground for a significant portion of the year and other benefits. In April 2017, Elkside sold the property to defendant Barnett Resorts, LLC. Two months later, defendant gave notice to all members —including plaintiffs—that it would not honor Elkside's membership contracts. That led to the filing of this action.

Plaintiffs are 71 people who, collectively, were party to 39 membership contracts with Elkside. Fifty-six of the plaintiffs are aged 65 years or older. As relevant here, a jury found that, in failing to honor the contracts, defendant committed breach of contract, for which the jury awarded $500,000 in damages, and elder financial abuse under ORS 124.100, for which the jury awarded $900,000 in damages, which was automatically trebled to $2.7 million.

Defendant appeals the resulting judgment, raising four assignments of error. First, defendant challenges the denial of its motion for summary judgment on the breach of contract claim. We conclude that ruling is unreviewable. Second, defendant challenges the denial of its motion for a directed verdict on the breach of contract claim. We reject that claim of error and, accordingly, affirm the judgment as to the breach of contract claim. Third, defendant challenges the denial of its motion for a directed verdict on the elder financial abuse claim. We agree that the trial court erred in that regard and, accordingly, reverse and remand for dismissal of the elder financial abuse claim. Fourth, defendant challenges **146 the denial of its motion for a directed verdict on a claim for intentional interference with economic relations (IIER), which was pleaded in the alternative to the claim for breach of contract. Our resolution of the second assignment of error obviates the need to address the fourth assignment of error.

I. FACTS

In reviewing the denial of a motion for a directed verdict, we consider the evidence and all reasonable inferences *812 from that evidence in the light most favorable to the nonmoving party, which in this case was plaintiffs. York v.

Bailey, 159 Or App 341, 349, 976 P.2d 1181, rev. den, 329 Or. 287, 994 P.2d 122 (1999). We state the facts accordingly.

From 1999 until April 2017, Elkside operated the Osprey Point RV Resort on real property that it owned in Lakeside. 1 As part of its business model, Elkside sold camping memberships, which were effectuated through membership contracts. People paid an initial fee to purchase a membership (such as $5,900) and annual dues to maintain the membership (such as $325 per year). As members, they were entitled to use the campground for free for a significant portion of the year (such as 265 days), including free utilities, and at a reduced rate for the rest of the year. They also received other on-site benefits at a reduced cost. The contracts generally provided for “lifetime” memberships and transfer rights.

Plaintiffs purchased their memberships between 1999 and 2016, entering into a total of 39 membership contracts with Elkside. Those 39 contracts vary in their details but are generally as described above. The contracts do not address what will happen in the event that the property is sold. 2 Around 2005, Elkside began trying to sell the property, and it was on the market for most of the next 12 years. From the beginning, it was important to Mike Smalley—one of the members of Elkside—to try to sell the property to someone who would honor the existing campground memberships, and several possible buyers dropped out over the years because of the membership contracts. The property was initially listed at $5.9 million. Elkside later reduced the price to $3.3 million, then to $2.65 million in 2012, then to $1.995 million in 2013. *813 On April 28, 2017, defendant—an LLC whose members are Chris and Stefani Barnett—purchased the real property from Elkside, along with certain personal property and the business name, for $1.995 million. The closing documents did not list the membership contracts as an encumbrance or otherwise mention them. The executed bill of sale provided that the property was “free and clear of and from all encumbrances, security interests, liens, mortgages and claims whatsoever.” Defendant was aware of the membership contracts, however, when it purchased the property. Before closing, defendant had requested a list of active memberships, reviewed copies of some or all of the membership contracts, and begun talking to people about whether the contracts

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Adelsperger v. Elkside Development LLC, 322 Or.App. 809 (2022) 523 P.3d 142

would be binding on defendant if it purchased the property.

Defendant also was aware that Smalley wanted the contracts to be honored after the sale; for example, in an email to Chris Barnett on February 26, 2017, attaching the “requested info on members,” Smalley had stated, “I believe that honoring the remaining contracts is worth the effort. It is an income and will not create negative reviews around the industry.”

There is conflicting evidence as to whether, at the time of closing, defendant intended to honor Elkside's membership contracts. In any event, there is no evidence that defendant **147 ever promised or otherwise represented to Elkside that it would honor the contracts. 3 On May 14, 2017, defendant sent a letter to people who had “purchased a Membership prior to the new ownership.” The letter explained that defendant was not accepting any new memberships and announced “some immediate changes that will be in effect” relating to memberships. In describing those changes, the letter at least implied that defendant intended to honor the existing membership contracts, albeit perhaps on their narrowest terms, while *814 disavowing any “verbal or handshake agreements” with the previous owner. 4 Only 10 days later, however, on May 24, defendant sent an email to its staff that instructed them not to accept any new reservations from people who bought memberships from the previous owner, explaining that an attorney was reviewing the contracts and that it would be “too confusing for the resort to conduct business as usual” while that happened. The email went on to state that, if anyone with a membership asked what to do, “please kindly tell them they cannot stay for Free and must pay regular resort prices.” The email then reiterated that all future reservations should be booked at the current season rates, that “[a]nyone can still stay at the resort but only under regular rates,” and that “there are no special fees or free stays until further notice.”

On June 20, 2017, defendant sent a letter to everyone with a membership contract. The upshot of the letter was that defendant would not be honoring the contracts. Defendant explained that it was the new owner, that it had purchased the resort but not the contracts, that defendant had “started fresh as a regular RV Park with nightly stays,” and that defendant did not consider it financially feasible to honor memberships that were purchased from the previous owner.

Plaintiffs identify June 20, 2017, as the date on which the contracts were breached.

In April 2019, two years after defendant purchased the property, plaintiffs filed this action, asserting claims against Elkside, defendant, Chris Barnett, and Stefani Barnett.

Plaintiffs obtained a default judgment against Elkside, which was not appealed and is not at issue. Plaintiffs’ claims against the Barnetts individually were dismissed on summary judgment and are the subject of a separate appeal. See Adelsperger v. Elkside Development LLC, 317 Or App 666, 504 P.3d 1, rev. allowed, 370 Or. 56, 512 P.3d 811 (2022). As for plaintiffs’ claims against defendant, three claims went to the jury and are the subject of this appeal: breach of contract, elder financial abuse under ORS 124.100, and IIER. *815 The parties stipulated to certain facts, including that none of the plaintiffs had entered into a contract with defendant, that defendant had not received membership dues from any of the plaintiffs, and that all of the plaintiffs were “monetarily damaged” by their contracts not being honored “to the extent that membership dues were less than the fair market value of the services received.”

At the close of plaintiffs’ case-in-chief, defendant moved for directed verdicts on all three claims. The trial court denied the motion.

Ultimately, the jury found for plaintiffs on all three claims submitted to it. On breach of contract, the jury found that plaintiffs’ membership contracts were binding on defendant, presumably as covenants running with the land given how the jury was instructed; that defendant had breached those contracts; and that such breach had resulted in $500,000 in damages. On elder financial abuse under **148 ORS 124.100, the jury found for the elderly plaintiffs and awarded $900,000 in damages, which the court trebled to $2.7 million as a matter of law. See ORS 124.100(2)(a) (requiring the court to award “three times all economic damages” to a prevailing plaintiff); ORS 124.100(2)(b) (requiring the court to award “three times all noneconomic damages” to a prevailing plaintiff). The court entered a general judgment and money award for plaintiffs on the breach of contract and elder financial abuse claims. The jury also found for plaintiffs on the IIER claim, but that claim was pleaded in the alternative to the breach of contract claim—applying only if it was determined that defendant was not bound by Elkside's contracts—so no judgment was entered on the IIER claim.

Plaintiffs’ other claims against defendant—for declaratory relief, appointment of a trustee, and specific performance— also were not reduced to judgment, for various reasons, and are not at issue on appeal.

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Adelsperger v. Elkside Development LLC, 322 Or.App. 809 (2022) 523 P.3d 142

II. BREACH OF CONTRACT CLAIM Defendant's first two assignments of error pertain to the breach of contract claim. Defendant argues that the trial court erred, first, by denying defendant's motion for *816 summary judgment and, second, by denying defendant's motion for a directed verdict.

We do not address the first assignment of error. “[A]n order denying summary judgment is not reviewable following a full trial on the merits, unless the motion rests on ‘purely legal contentions’ that do not require the establishment of any predicate facts.” York, 159 Or App at 345, 976 P.2d 1181. “[T]he denial of a motion for summary judgment that is based on facts, even undisputed facts, is not reviewable.”

Staten v. Steel, 222 Or App 17, 26, 191 P.3d 778 (2008), rev. den, 345 Or. 618, 201 P.3d 909 (2009); see also Farnsworth v. Meadowland Ranches, Inc., 321 Or App 814, 819-20, 519 P.3d 153 (2022) (emphasizing the difference between the summary judgment standard and reviewability).

Because defendant's summary judgment motion “turned on the significance of adjudicative facts (albeit, facts that defendant asserted to be undisputed),” York, 159 Or App at 346, 976 P.2d 1181, the trial court's ruling denying that motion is unreviewable on appeal.

As for the second assignment of error, considering the particular arguments made to the trial court and on appeal, we conclude that the trial court did not err in denying defendant's motion for a directed verdict.

In their complaint, plaintiffs alleged that, when defendant purchased the campground from Elkside in April 2017, defendant, as “successor” to Elkside, “became obligated to honor the membership camping contracts,” while Elkside's own obligations to honor the contracts also remained in force.

With respect to the breach of contract claim, plaintiffs alleged that Elkside, as the original contracting party, had breached the contracts either “by assigning its obligations” to defendant without plaintiffs’ permission or “by divesting itself of the resort such that it can no longer perform” its contractual obligations. Plaintiffs alleged that defendant, “if found to be successor in interest to [Elkside], was also obligated to honor the membership camping contracts and by refusing to do so breached the membership camping contracts between Plaintiffs and [Elkside].”

It is fair to say that the complaint is unclear as to what legal theory or theories plaintiffs were relying on *817 to assert that defendant was liable on Elkside's contracts. “[M]erely to say that a party has succeeded to a predecessor's interest in land does not say enough to explain why the successor should somehow be bound by a predecessor's agreement.”

Sander v. Nicholson, 306 Or App 167, 185, 473 P.3d 1113, rev. den, 367 Or. 290, 476 P.3d 1255 (2020). The only theory that the complaint actually mentions is assignment—a theory that was abandoned, in that no evidence of assignment was offered at summary judgment or trial. Additional theories were raised, however, during the pretrial summary judgment proceedings. Without getting into unnecessary detail, the record suggests that, by the time trial began, there were two theories on the table as to how defendant could be liable on Elkside's contracts, despite not having assumed them voluntarily. In defendant's view, it would be **149 liable on the contracts only if plaintiffs proved that Elkside's mortgage holder had executed, delivered, and recorded a nondisturbance agreement in accordance with the statutory procedure for “membership camping contracts” provided in ORS 94.986(1). That, in defendant's view, “would prioritize plaintiffs’ interests above blanket encumbrances then existing and provide for the mechanism to allow the contracts to run with the land and be enforceable on a subsequent purchaser.”

In plaintiffs’ and the trial court's view, defendant also could be liable on the contracts if the common-law requirements for an equitable servitude or covenant running with the land were met.

When the trial court denied defendant's directed verdict motion, it made clear that it viewed the evidence as sufficient to allow a finding that the contracts ran with the land as a matter of common law. Specifically, when defendant argued that Elkside's noncompliance with ORS 94.986 meant that the contracts did not bind defendant, the court asked why “this can't be something other than a membership camping contract under ORS [chapter] 94” and why there was not a “common law issue here.” Defendant responded that “that's not what Plaintiffs pled,” that plaintiffs’ use of the term “membership camping contracts” in their complaint necessarily invoked ORS chapter 94, and that “any sort of equitable servitude” was “simply not what they pled.” *818 The trial court was unpersuaded. It considered the evidence sufficient to go to the jury on a common law theory. 5 As for defendant's pleading argument, the court explained that when there is evidence to support a theory not originally pleaded, “the pleadings can conform to the

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Adelsperger v. Elkside Development LLC, 322 Or.App. 809 (2022) 523 P.3d 142

evidence.” Because of how the issue developed below, the exact amendments made to the complaint to conform to the evidence are unclear, so we necessarily can only assume that they were consistent with how the court ultimately submitted the case to the jury. 6 On appeal, as in the trial court, defendant emphasizes that the complaint did not mention equitable servitudes (or covenants running with the land). That is certainly true. However, the trial court viewed the evidence as sufficient to support such a theory and treated the complaint as having been implicitly amended to conform to the evidence. See ORCP 23 B (providing for amendment of the pleadings to conform to the trial evidence, including implicit amendment). To the extent that defendant indirectly suggests on appeal that the court should not have allowed implicit amendment of the complaint to conform to the evidence, that issue is unpreserved for appeal, as defendant never argued to the trial court that implicit amendment was *819 improper in these circumstances. Defendant argued only that the existing pleadings did not raise the matter. The issue also is not properly before us on appeal, because defendant has assigned error only to the ruling on the motion for a directed verdict.

It has not assigned error to the denial of any objection to allowing implicit amendment, to admitting the underlying evidence, **150 or the like. Indeed, as in the trial court, defendant has not even acknowledged the principle of implied amendment to conform to the evidence, let alone developed an argument as to how or why it was improper to recognize an implied amendment in these circumstances.

It therefore would be improper for us to consider, as a basis for potential reversal of the judgment, the propriety of the trial court treating plaintiffs’ complaint as having been amended to conform to the evidence. Accordingly, we proceed with the understanding that the complaint was implicitly amended to assert an equitable servitude or a covenant running with the land, as the basis by which the membership contracts (or at least some parts of them) became binding on defendant when it purchased the land. With that understanding, we cannot conclude that the trial court erred in denying a directed verdict on the breach of contract claim. In moving for a directed verdict, defendant did not make any substantive argument to the trial court as to why the evidence was insufficient to prove an equitable servitude (or a covenant running with the land), asserting only that it was “not what [plaintiffs] pled.”

On appeal, defendant has similarly focused on the alleged pleading defect, rather than the evidence. The only time that it addresses the evidence is in its reply brief. For example, as to

whether the membership contracts directly touch and concern the land, in its reply brief, defendant points for the first time to a provision in the contracts that would have allowed Elkside to transfer the memberships to “a substitute property in the same general area” that was as or more desirable for camping and outdoor recreation. Those belated arguments raise interesting issues, but they were not raised in the trial court in arguing the directed verdict motion, or in the opening brief on appeal. See Clinical Research Institute v. Kemper Ins. Co., 191 Or App 595, 609, 84 P.3d 147 (2004) (regarding new theories raised in a reply brief). *820 In sum, on this record and given the arguments that were made, we reject the second assignment of error, challenging the court's denial of a directed verdict on the breach of contract claim. Our conclusion as to the common law theory obviates the need to address defendant's arguments under ORS 94.986, the statute regarding membership camping contracts. Our disposition of the second assignment of error also obviates the need to address the fourth assignment of error, as previously mentioned, because the IIER claim was pleaded in the alternative to the breach of contract claim.

III. ELDER FINANCIAL ABUSE CLAIM Defendant's third assignment of error pertains to the claim for elder financial abuse asserted by the 56 plaintiffs who are aged 65 years or older. ORS 124.100(4) provides for an action “for financial abuse described in ORS 124.110.” ORS 124.110(1) in turn provides that “[a]n action may be brought under ORS 124.100 for financial abuse” in either of two circumstances: “(a) When a person wrongfully takes or appropriates money or property of a vulnerable person, without regard to whether the person taking or appropriating the money or property has a fiduciary relationship with the vulnerable person. “(b) When a vulnerable person requests that another person transfer to the vulnerable person any money or property that the other person holds or controls and that belongs to or is held in express trust, constructive trust or resulting trust for the vulnerable person, and the other person, without good cause, either continues to hold the money or property or fails to take reasonable steps to make the money or property readily available to the vulnerable person when:

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Adelsperger v. Elkside Development LLC, 322 Or.App. 809 (2022) 523 P.3d 142

“(A) The ownership or control of the money or property was acquired in whole or in part by the other person or someone acting in concert with the other person from the vulnerable person; and

“(B) The other person acts in bad faith, or knew or should have known of the right of the vulnerable person to have the money or property transferred as requested or otherwise made available to the vulnerable person.”

*821 A “vulnerable person” includes any person aged 65 years or older. ORS 124.100(1)(e) **151 (“vulnerable person” includes an “elderly person”); ORS 124.100(1)(a) (“elderly person” means a person 65 years of age or older).

In their complaint, the subset of plaintiffs aged 65 years or older alleged that defendant had acquired ownership of the resort and taken over the responsibility to honor the membership camping contracts and, thereby, “acquired a property right of the Elderly Plaintiffs (ORS 124.110(a)) or hold in trust the annual dues and property rights of the Elderly Plaintiffs (ORS 124.110(b)).” They further alleged that defendant had “acted in bad faith in refusing to honor the property rights”; that defendant “[knew] or should have known that the Elderly Plaintiffs had the rights in the membership camping contracts and the rights to use the Resort”; and that defendant had committed elder financial abuse “by denying the elderly Plaintiffs access to the Resort, by breaching the membership camping contracts and the additional benefits purchased by Elderly Plaintiffs, and by denying the property rights of the Elderly Plaintiffs.”

At the close of plaintiffs’ case-in-chief, defendant moved for a directed verdict on the elder financial abuse claim, citing Bates v. Bankers Life and Casualty Co., 362 Or. 337, 408 P.3d 1081 (2018), for the proposition that a contract dispute does not give rise to liability for elder financial abuse.

In ruling on the motion, the court described the legal standard and summarized plaintiffs’ evidence. The court stated that it “didn't really see” any evidence of wrongful conduct, noting that “it's not against Oregon law for a business person to decide that they want to cancel a contract with a vulnerable person.” The court also voiced concern that “[i]f you start

making that the law, no person would want to * * * have contracts with people who are over the age of 65, because every time they get into a squabble with them, they're going to get sued for treble damages.” Ultimately, however, the court concluded that there was enough to go to the jury, on the theory that defendant deprived plaintiffs of their property insofar as plaintiffs had common law rights *822 running with the land, arising from their membership contracts, and were being excluded from the campground.

Defendant assigns error to that ruling, arguing that the evidence was legally insufficient to support a verdict under either ORS 124.110(1)(a) or ORS 124.110(1)(b).

A. ORS 124.110(1)(b) We begin with ORS 124.110(1)(b), which applies when a “vulnerable person entrusts his or her money or property to the other person and later requests its return, but the other person in bad faith refuses to return it.” Bates, 362 Or. at 344, 408 P.3d 1081. In Bates, the Supreme Court answered a question certified to it by the United States Court of Appeals for the Ninth Circuit, in connection with an insurance dispute: “ ‘Does a plaintiff state a claim under [ORS] 124.110 (1)(b) for wrongful withholding of money or property where it is alleged that an insurance company has in bad faith delayed the processing of claims and refused to pay benefits owed under an insurance contract?’ ” Id. at 339, 408 P.3d 1081 (quoting Bates v. Bankers Life & Cas. Co., 849 F.3d 846, 847 (9th Cir 2017)).

The elderly plaintiffs in Bates contended that their payment of insurance premiums to the defendant insurance company constituted a transfer of money or property and that, when the defendant failed to pay policy benefits in bad faith, it was not only a breach of the insurance contract but also a refusal to return their money or property and thus elder financial abuse under ORS 124.110(1)(b). Id. at 341-42, 408 P.3d 1081. The plaintiffs “essentially s[ought] to bring themselves within the words of the elder financial abuse statute by arguing that the insurance benefits that Bankers was contractually obligated to pay them constituted ‘money or property’ that ‘belong[ed] to’ them.” Id. at 341, 408 P.3d 1081 (quoting ORS 124.110(1) (b) (second brackets in original)).

The Supreme Court rejected that argument and answered “no” to the certified question. Id. at 340, 408 P.3d 1081. The court explained that a claim for elder financial abuse under ORS 124.110(1)(b) has four elements. **152 “The first element in time (although it appears in the middle of the provision)

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Adelsperger v. Elkside Development LLC, 322 Or.App. 809 (2022) 523 P.3d 142

is that ‘[t]he ownership or control of the money or property *823 was acquired in whole or in part by the other person * * * from the vulnerable person.’ ” Id. at 344, 408 P.3d 1081 (quoting ORS 124.110(1)(b)(A) (ellipses and brackets in Bates)). 7 There need not be any wrongful conduct in the initial acquisition of the money or property. Id. The second element is “the vulnerable person's request to the other person that the other person ‘transfer’ to the vulnerable person any money or property that ‘belongs to’ the vulnerable person.”

Id. (quoting ORS 124.110(1)(b)). The third element is “that the other person ‘without good cause’ continue to hold the money or property that ‘belongs to’ the vulnerable person.”

Id. (quoting ORS 124.110(1)(b)). The fourth element is “that the other person have acted ‘in bad faith, or knew or should have known of the right of the vulnerable person to have the money or property transferred as requested.’ ” Id. (quoting ORS 124.110(1)(b)(B)).

The elderly plaintiffs’ position in Bates that the defendant violated ORS 124.110(1)(b) by failing to honor the insurance contracts ran “into an initial, and fatal, textual barrier.” Id. at 344, 408 P.3d 1081. It “essentially read[ ] out of the statute the first element of the claim—that [the defendant] have acquired ‘ownership or control of the money or property from [plaintiffs].’ ” Id. at 344-45, 408 P.3d 1081 (final brackets in original). The court disagreed with the plaintiffs that “their contractual right to receive insurance benefits under the policies” was money or property that the defendant acquired from them. Id. at 345, 408 P.3d 1081. Rather, the court explained, the “plaintiffs paid insurance premiums to Bankers in exchange for insurance policies.” vfId. The plaintiffs were “not seeking the return of the money they transferred to Bankers in the form of premium payments, but instead the contractual benefits they are entitled to under Bankers’ insurance policies, which are not the same thing.”

Id. Although a contractual right to receive benefits “might be considered ‘property’ in the broadest sense of the word,” the first element of ORS 124.110(1)(b) was not met, *824 because “the money or property” that the plaintiffs had given to the defendant—insurance premiums—was not the same “money or property” that they had requested from defendant—the benefits to which they were entitled under their contracts. Id. at 347, 408 P.3d 1081. Even if it was “wrongful” for the defendant to fail to pay benefits under the contract terms, it was not a violation of ORS 124.110(1) (b). Id. In reaching that conclusion, the court acknowledged that its construction of the statute limits liability under ORS

124.110(1)(b) to “trust-like situations—and not simply to any failure to pay a contractual or other debt owed to a vulnerable person as a result of an arms-length consumer transaction.”

Id. at 346-47, 408 P.3d 1081. That construction was dictated by the unambiguous text and context of the statute. Id. at 347, 408 P.3d 1081.

Applying Bates, we reach the same conclusion here, i.e., that the first element for liability under ORS 124.110 (1) (b) was not proved. Plaintiffs argue that their rights under the camping contracts were “money or property” that they “requested” that defendant “transfer” to them. That is directly analogous to the plaintiffs’ position in Bates and fails for the same reasons. Plaintiffs did not seek return of the fees and dues that they paid to Elkside, so, even if defendant stands in Elkside's shoes, what plaintiffs requested from defendant —access to the resort and other benefits provided in their membership camping contracts—is “not the same thing” as what they transferred. Id. at 345, 408 P.3d 1081. In short, plaintiffs are not asking for the return of money or property that they transferred in a trust-like situation; rather, they are seeking the benefit of a contractual bargain that they made.

As in Bates, even if defendant breached the contract, and even if it was “wrongful” to do so, no claim exists under ORS 124.110(1)(b). **153 B. ORS 124.110(1)(a) We next consider ORS 124.110(1)(a), which applies “[w]hen a person wrongfully takes or appropriates money or property of a vulnerable person.” As used in ORS 124.110 (1)(a), “wrongful” refers to conduct that “is carried out in pursuit of an improper motive or by improper means.” Church v. Woods, 190 Or App 112, 118-19, 77 P.3d 1150 (2003) (concluding that the legislature intended “wrongful” in *825 ORS 124.110(1) (a) to have that term's “well-understood meaning in the law of torts with regard to interference with legal interests”).

To be considered improper, a party's means “must be independently wrongful by reason of statutory or common law, beyond the mere fact of the injury complained of.”

Church, 190 Or App at 119, 77 P.3d 1150; see also Ride PDX v. Tee & B, LLC, 322 Or App 165, 168, 519 P.3d 870 (2022) (“If liability is based on the use of improper means, then the means must violate some objective, identifiable standard, such as a statute or other regulation, or a recognized rule of common law, or, perhaps, an established standard of a trade or profession.” (Internal quotation marks omitted.)).

“Improper means, for example, include violence, threats, intimidation, deceit, misrepresentation, bribery, unfounded

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Adelsperger v. Elkside Development LLC, 322 Or.App. 809 (2022) 523 P.3d 142

litigation, defamation and disparaging falsehood.” Church, 190 Or App at 119, 77 P.3d 1150 (internal quotation marks omitted); see also Bates, 362 Or. at 344, 408 P.3d 1081 (referring to “fraud, conversion, or theft” as wrongful means of acquiring a vulnerable person's money or property); Allen v. Hall, 328 Or. 276, 286, 974 P.2d 199 (1999) (making fraudulent misrepresentations to an elderly person's attorney and care providers to prevent execution of a new will would qualify as using improper means to interfere with a prospective inheritance).

In the trial court, plaintiffs did not identify any “improper means” that they were claiming defendant used to take or appropriate plaintiffs’ property. On appeal, plaintiffs’ only argument as to improper means is “conversion”—that defendant converted plaintiffs’ “lifetime right to occupy specific portions of the resort property” to defendant's own use. That theory is untenable, because conversion relates only to chattels. See Hemstreet v. Spears, 282 Or. 439, 444, 579 P.2d 229, appeal dismissed, 439 U.S. 948, 99 S.Ct. 343, 58 L.Ed.2d 340 (1978) (“[C]onversion is an intentional exercise of dominion or control over a chattel which so seriously interferes with the right of another to control it that the actor may justly be required to pay the other the full value of the chattel.”); Black's Law Dictionary 268 (9th ed 2009) (defining “chattel” as “[m]ovable or transferable property; personal property; esp. a physical object capable of manual delivery and not the subject matter *826 of real property”); see also Rapacki v. Chase Home Fin. LLC, 797 F Supp 2d 1085, 1092 (D Or 2011) (citing Hemstreet and Black's Law Dictionary and concluding that real property subject to a trust deed was not a chattel and, accordingly, plaintiff's claim could not be “construed as a claim for conversion”).

As for improper motive, we have never addressed improper motive in the specific context of ORS 124.110, but, under Church, we understand it to have its usual “well-understood meaning” in tort law. Church, 190 Or App at 118, 77 P.3d 1150. Therefore, to be liable for elder financial abuse based on acts committed with an improper motive, the defendant's “purpose must be to inflict injury on the plaintiff ‘as such.’ ” Northwest Natural Gas Co. v. Chase Gardens, Inc., 328 Or. 487, 498, 982 P.2d 1117 (1999) (quoting Top Service Body Shop v. Allstate Ins. Co., 283 Or. 201, 211, 582 P.2d 1365 (1978)); see also Ride PDX, 322 Or App at 174 n 5, 519 P.3d 870 (“[T]o be actionable under the ‘improper purpose’ prong, the purpose must be to inflict injury on the plaintiff.” (Emphasis in original.)).

For example, a defendant acting “with the sole design of injuring [the plaintiff] and destroying his business” would have an improper motive. Top Service Body Shop, 283 Or. at 201-11, 582 P.2d 1365. Conversely, a defendant acting in “pursuit of its own business purposes as it saw them” would not have an improper motive. Id. at 212, 582 P.2d 1365; see also Eusterman v. Northwest Permanente, P.C., 204 Or App 224, 238, 129 P.3d 213, rev. den, 341 Or. 579, 146 P.3d 884 (2006) **154 (a defendant's desire to maximize profits is not an improper motive). In Ride PDX, 322 Or App at 174 n 5, 519 P.3d 870, for example, we concluded that, even if the plaintiffs proved that the defendants’ motive for complaining to their mutual landlord about noise from the plaintiffs’ business was to obtain rent concessions for the defendants’ own benefit, that would not prove an improper purpose.

Here, defendant notified plaintiffs on June 20, 2017, that it would no longer honor the membership contracts. Even assuming arguendo that not honoring the contracts would qualify as a taking or appropriation of plaintiffs’ money or property—an issue that we need not decide—plaintiffs have not pointed to any evidence in support of their assertion that defendant had an “improper purpose” *827 in deciding not to honor the contracts, i.e., that defendant's intent was specifically to injure plaintiffs as such. As the trial court noted in discussing the directed verdict motion, the evidence was that defendant decided not to honor the contracts based on Chris Barnett's conclusion that they were not valid or binding on defendant. Defendant acting in its own business interests, based on its own understanding of its legal obligations, is not an improper motive for refusing to honor contracts. It put defendant at risk of a breach of contract claim if plaintiffs took a different view, but it is not a viable basis for an elder financial abuse claim under ORS 124.110(1)(a).

In sum, on this record, plaintiffs failed to prove elder financial abuse under ORS 124.110(1). It follows that the trial court erred when it denied defendant's motion for a directed verdict on that claim.

Judgment on elder financial abuse claim reversed and remanded; otherwise affirmed.

All Citations 322 Or.App. 809, 523 P.3d 142

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Adelsperger v. Elkside Development LLC, 322 Or.App. 809 (2022) 523 P.3d 142

Footnotes 1

Elkside is the successor of Osprey Point RV Park, LLC. Each entity had as its members Mike Smalley and one or more of his family members. Like the parties, we do not distinguish between the two entities. We use “Elkside” to refer to both entities. References to “Smalley” are to Mike Smalley.

2

In 2001, Elkside gave a document to then-members to “certify” and “guarantee” resort privileges, including stating, “If Osprey Point RV Resort should be sold the above membership will continue in force under the direction of the new manager.” It is unclear how many of plaintiffs were members in 2001.

3

There is evidence that Elkside wanted the membership contracts honored, may have even believed that a new owner would find it legally difficult to avoid them, and had that in mind when pricing the property (initially at $5.9 million, then at $3.3 million, then at $1.995 million). However, plaintiffs do not contend that defendant made any actual promises to Elkside, and, on this record, it would require improper speculation and stacking of inferences to find that defendant actually promised or otherwise represented to Elkside that it would honor the contracts.

4

Chris Barnett felt that membership holders were “trying to take advantage of” him by constantly requesting “freebies”—such as free fishing lessons, free boat rides, free massages, free use of the event center, free pinball machines, etc.—based on alleged handshake deals and verbal agreements with Smalley.

5

The court referred to the “common law” generally, and it ultimately instructed the jury on covenants running with the land. Compare Johnson v. Highway Division, 27 Or App 581, 584, 556 P.2d 724 (1976), rev. den, 277 Or 99 (1977) (“Before a covenant may be said to run with the land and be binding upon a promisor's successors in interest, four requirements must be met: (1) there must be privity of the estate between the promisor and his successors; (2) the promisor and promisee must intend that the covenant run; (3) the covenant must touch and concern the land of the promisor; and (4) the promisee must benefit in the use of some land possessed by him as a result of the performance of the promise.”) with Ebbe v. Senior Estates Golf, 61 Or App 398, 405, 657 P.2d 696 (1983) (A “promise is binding as an equitable servitude if (1) the parties intend the promise to be binding; (2) the promise concerns the land or its use in a direct and not a collateral way; and (3) the subsequent grantee has notice of the covenant, either actual or constructive.” (Internal quotation marks omitted.)).

6

By contrast, in Sander, 306 Or App at 185-86, 473 P.3d 1113, it was error to direct a verdict in the plaintiffs’ favor on a breach of contract claim, based on breach of an easement agreement, given how the claim was pleaded. And, in LDS Development, LLC v. City of Eugene, 280 Or App 611, 614, 618 n 8, 622, 382 P.3d 576 (2016), rev. den, 361 Or. 100, 391 P.3d 131 (2017), the trial court erred by granting summary judgment on an unpleaded theory. Here, the way the issue evolved makes it difficult to discern the court's exact thinking —and also precludes our saying that the court erred.

7

In the interests of completeness, we note that ORS 124.110(1)(b)(A) also applies when ownership or control of the money or property is acquired by “someone acting in concert with the other person.” That aspect of the statute was not at issue in Bates, but it is another way to satisfy the first element.

End of Document

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9

Peters v. C21 Investments, Inc., 322 Or.App. 462 (2022) 520 P.3d 920

322 Or.App. 462 Court of Appeals of Oregon.

Jesse PETERS, an individual, and Kate Guptill, an individual, Plaintiffs-Appellants, v.

C21 INVESTMENTS, INC., a corporation incorporated under the laws of British Columbia; 320204 US Holdings Corp., a Delaware corporation; Phantom Brands LLC, an Oregon limited liability company, dba Phantom Farms; Swell Companies Limited, an Oregon corporation; Robert Cheney, an individual; Skyler Pinnick, an individual; Eric Shoemaker, an individual; Leonard Werden, an individual; and Eco Firma Farms, LLC, an Oregon limited liability company, Defendants-Respondents, and Clinton Harris, Defendant.

A174918 | Argued and Submitted September 28, 2022 | October 26, 2022 Synopsis Background: Former executives of licensed recreational marijuana growing operation, who sold their interests in operation to Canadian corporation and were to remain as executives of operation after sale, brought action against other licensed recreational marijuana growing operations, those operations' chief executive officers (CEOs), and employee of former executives' operation, asserting intentional interference with business relations and intentional interference with employment relations based on allegations that operations, their executives, and employee interfered with former executives' efforts to attract other operations to Canadian corporation. The Circuit Court, Clackamas County, Douglas V. Van Dyk, J., entered a general judgment granting motion to dismiss for lack of subject matter jurisdiction by other operations, their CEOs, and employee, and the Circuit Court, Susie L. Norby, J., entered a supplemental judgment awarding attorney fees. Former executives appealed both judgments.

Holdings: The Court of Appeals, Tookey, P.J., held that:

other operations, those operations' CEOs, and employee were not entitled to enforce forum-selection provision in agreements between former executives and Canadian corporation, and claims of intentional interference with business relations and intentional interference with employment relations by former executives were not “in respect of the subject matter” of agreements between former executives and Canadian corporation.

Reversed and remanded.

Procedural Posture(s): On Appeal; Motion to Dismiss for Lack of Subject Matter Jurisdiction; Motion for Attorney's Fees. **921 Clackamas County Circuit Court, 19CV19273; Douglas V. Van Dyk, Judge, (General Judgment), Susie L. Norby, Judge. (Supplemental Judgment) Attorneys and Law Firms Matthew A. Goldberg, Portland, argued the cause for appellants. Also on the opening brief were Allison C. Bizzano and Lotus Law Group, LLC. Also on the reply brief were Nicole C. Gossett-Roxbury and Lotus Law Group, LLC. Julie A. Smith, Portland, argued the cause for respondents.

Also on the brief was Cosgrave Vergeer Kester LLP. Before Tookey, Presiding Judge, and Egan, Judge, and Kamins, Judge.

Opinion TOOKEY, P. J. *464 In this civil action, plaintiffs Jesse Peters and Kate Guptill appeal from general and supplemental judgments for defendants after the trial court dismissed for lack of subjectmatter jurisdiction their amended complaint alleging tort claims for intentional interference with business relations and intentional interference with employment relations.

As explained in more detail below, plaintiffs’ claims arise out of a transaction in which plaintiffs agreed to sell their interests in Eco Firma Farms LLC (EFF), an Oregon-licensed recreational marijuana growing operation, to C21 Investments, Inc. (C21), a publicly traded Canadian corporation incorporated under the laws of the Province

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Peters v. C21 Investments, Inc., 322 Or.App. 462 (2022) 520 P.3d 920

of British Columbia, through its United States subsidiary, 320204 US Holdings, Corp (USH), a Delaware corporation.

The agreements **922 memorializing the sale were subject to a share-purchase agreement (SPA) that included a forumselection clause stating that the parties agreed that the courts of the Province of British Columbia were the “exclusive forum” for any litigation “in respect of the subject matter” of the agreement.

Plaintiffs’ original complaint, filed in the Clackamas County Circuit Court, named as defendants the above entities as well as the current defendants—Phantom Brands LLC, d/ b/a Phantom Farms, an Oregon limited liability company (Phantom), Phantom CEO Skyler Pinnick (Pinnick), Swell Companies Limited, an Oregon corporation (Swell), Swell CEO Eric Shoemaker (Shoemaker), Clinton Harris, an employee of EFF, and other individuals not pertinent to this appeal.

The trial court granted defendants’ motion to make the original complaint more definite and certain and allowed plaintiffs to replead. Plaintiffs then filed an amended complaint, on which this appeal is based, naming only the current defendants—Oregon entities Phantom and Swell, and Oregon residents Shoemaker, Pinnick, and Harris—none of whom were parties to the SPA that includes the forumselection clause.

Nonetheless, on the current defendants’ motion, the trial court dismissed the complaint for lack of subject-matter *465 jurisdiction, based on the forum-selection clause. Plaintiffs appeal from the general judgment dismissing their claims and a supplemental judgment awarding attorney fees. We conclude that the trial court erred in dismissing plaintiffs’ claims based on a lack of subject-matter jurisdiction and therefore reverse both judgments.

Whether a court has subject-matter jurisdiction over a particular proceeding is a question of law that we review for legal error. State v. Hill, 277 Or App 751, 763, 373 P.3d 162, rev. den., 360 Or. 568, 385 P.3d 82 (2016). In reviewing the trial court's ruling granting defendants’ motion to dismiss for lack of subject-matter jurisdiction under ORCP 21 A(1), 1 we draw our summary of the relevant facts from the pleadings and affidavits and assume the truth of all well-pleaded facts alleged in plaintiffs’ amended complaint as supplemented by the record, construing the pleadings and affidavits liberally in favor of jurisdiction. See O'Neil v. Martin, 258 Or App 819, 828, 312 P.3d 538 (2013) (in reviewing a trial court's grant

of a motion to dismiss for lack of personal jurisdiction, we assume the truth of all well-pleaded allegations in the record and construe the pleadings liberally in support of jurisdiction).

In 2018, plaintiffs sold their shares in EFF to C21 through C21's United States subsidiary USH. The terms and conditions of the sale were first set forth in a “term sheet” and then memorialized in the SPA between plaintiffs, C21, and USH. Under a separate agreement incorporated into the SPA, plaintiffs were to continue working for EFF after the sale, with Peters serving as “Director of Oregon Operations” and Guptill serving as EFF's chief executive officer.

The SPA further included a forum-selection clause that provided: “Each of the Parties hereto irrevocably attorns [(consents)] and submits to the exclusive jurisdiction of the courts of the Province of British Columbia in respect of the subject matter of this Agreement.” *466 Plaintiffs alleged in their amended complaint that Peters's role with EFF was to include recruiting other Oregon cannabis businesses to join C21, and that a portion of his compensation would be based on that success.

Plaintiffs alleged that Peters introduced C21 to other Oregon-licensed recreational marijuana growing operations, including defendants Phantom and Swell. Plaintiffs alleged that, shortly before and after C21's acquisition of EFF, defendants began to exclude plaintiffs from the Oregon operations as well as negotiations concerning C21's acquisition of Oregon entities, and to interfere with Peters's efforts to attract entities to C21. C21 removed Peters as manager of EFF, and replaced him with Shoemaker, who plaintiffs had initially introduced to C21. **923 Peters resigned from his position with EFF over disputes concerning compensation and plaintiffs’ belief that they were being excluded from the business, and Guptill was fired from her position as CEO of EFF, allegedly as a result of defendants’ interference. Plaintiffs then made a demand on C21 to pay plaintiffs wages they believed were owed under the various agreements. C21 rejected the demand, and plaintiffs brought this action.

As previously noted, plaintiffs’ original complaint had named as defendants C21, USH, and EFF, defendants Phantom and Swell, defendants Harris, Pinnick, and Shoemaker, and other

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Peters v. C21 Investments, Inc., 322 Or.App. 462 (2022) 520 P.3d 920

individuals not involved in this appeal. Those defendants moved to dismiss the complaint for lack of subject-matter jurisdiction, based on the forum-selection clause, or to make the complaint more definite and certain. The trial court granted the motion to make the complaint more definite and certain and allowed plaintiffs to replead.

The trial court granted the motion to dismiss and entered a

Also as noted, plaintiffs’ amended complaint names as defendants only Phantom, Swell, Pinnick, Shoemaker, and Clinton Harris. Those entities and individuals were not parties to the SPA and associated agreements between plaintiffs, C21, and EFF. For their first claim, plaintiffs allege that Phantom, Swell, Pinnick, and Shoemaker intentionally interfered with plaintiffs’ economic relations with C21 and EFF:

Plaintiffs contend in their first and second assignments of error that the trial court erred in dismissing their claims against Phantom, Swell, Pinnick, and Shoemaker based on the forum-selection clause of the SPA and associated agreements between plaintiffs and C21, USH, and EFF. Plaintiffs contend that their claims do not fall within the forum-selection clause, because they are not contract claims based on the agreements and because Phantom, Swell, Pinnick, and **924 Shoemaker were not parties to those agreements nor are they intended beneficiaries. Phantom, Swell, Pinnick, and Shoemaker respond that plaintiffs’ claims fall within the forum-selection provision, because the alleged interference depends on the existence of plaintiffs’ agreements with C21,

*467 “Phantom, Swell, Mr. Pinnick, and Mr. Shoemaker intentionally interfered with Plaintiffs’ contracts, professional relationships, and business expectancies for the improper purposes of, among others (i) ousting Plaintiffs from their senior management roles within C21 and (ii) conspiring to ensure that the acquisition of EFF

by C21 would turn into a colossal tragedy and failure for Plaintiffs.

“Phantom, Swell, Mr. Pinnick, and Mr. Shoemaker intentionally interfered with Plaintiffs’ contracts, professional relationships, and business expectancies through improper means by: (i) repeatedly disparaging Peters behind his back within his professional network and within C21; (ii) working actively to exclude Peters from company and industry happenings to the greatest possible extent; (iii) misrepresenting to third-parties the true nature of C21's interest in Phantom and Swell; and (iv) knowingly violating OLCC regulations.”

Based on the same underlying facts, for their second claim, plaintiffs allege that defendants Phantom, Swell, Pinnick, and Shoemaker interfered with plaintiffs’ employment relationships with C21.

Defendants Phantom, Swell, Pinnick, and Shoemaker filed a new motion to dismiss under ORCP 21 A(1), for a lack of subject-matter jurisdiction, asserting that all of the claims depend on the existence of and arise “in respect of the subject matter” of plaintiffs’ agreements with C21 and EFF and, thus, that the forum-selection clause of the SPA requires that the claims be brought in a court of the Province of British Columbia.

general judgment dismissing all defendants except Harris, 2 and subsequently awarded defendants their attorney fees in a supplemental judgment. Plaintiffs appeal from *468 the general judgment and from the supplemental judgment awarding attorney fees.

USH, and EFF. 3 The court's ruling relates to subject-matter jurisdiction. In Oregon, unless divested by statute or rule of law, “circuit courts have subject matter jurisdiction over all actions.” State v. Terry, 333 Or. 163, 186, 37 P.3d 157 (2001) (citing Or. Const, Art VII (Original), § 9 (stating that all jurisdiction not vested by law in another court shall be vested in circuit courts); Or. Const, Art VII (Amended), § 2 (not changing jurisdictional scheme set out in original Article VII)). To divest the circuit courts of subject-matter jurisdiction, the legislature must do so expressly. Speciality Risk Services v.

Royal Indemnity Co., 213 Or App 620, 625, 164 P.3d 300 (2007).

There is no question that the Clackamas County Circuit Court had subject-matter jurisdiction of the parties’ litigation.

The question is whether the court was nonetheless *469 required to relinquish its subject-matter jurisdiction because of the forum-selection clause of the SPA. The parties devote considerable briefing to the issue whether, as a matter of contract construction, the forum-selection clause of the SPA expresses the intention of the parties to the agreement that it can be enforced by a nonsignatory to the agreement. But we diverge from that issue preliminarily to consider a procedural issue not raised by the parties: whether an individual who is not a signatory to the agreement containing the forumselection clause may bring an ORCP 21 motion to dismiss based on the forum-selection clause.

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Peters v. C21 Investments, Inc., 322 Or.App. 462 (2022) 520 P.3d 920

In Reeves v. Chem Industrial Co., 262 Or. 95, 101, 495 P.2d 729 (1972), the Supreme Court had before it the question whether a forum-selection clause requiring that the parties’ disputes be litigated in Ohio was valid and could provide a basis for dismissal of a claim brought in Oregon. The court reviewed the development of the case law around forum-selection clauses and concluded that, unless the court determined that a forum-selection clause establishing an exclusive forum for resolution of the parties’ disputes was unfair or its enforcement was unreasonable, the provision would be enforced by dismissing an action filed in a forum not agreed to by the parties. The court quoted with approval from the Restatement that enforcement of a forum-selection provision would be unreasonable if “the forum chosen by the parties would be a seriously inconvenient one for the trial of the particular action.” Reeves, 262 Or. at 98, 495 P.2d 729 (quoting comment to 1 Restatement, Conflict of Laws (Second), § 80). The court did not explicitly state in Reeves whether its ruling was based on subject-matter jurisdiction.

Indeed, the court's concluding paragraph suggested that its ruling was not “jurisdictional.” 4 Rather, the court explained, its decision *470 was a matter of not exercising its jurisdiction to give effect **925 to the parties’ enforceable agreement that their disputes would be litigated in Ohio. Id. at 101, 495 P.2d 729. Thus, the court's emphasis was on the enforceability of the parties’ agreement to litigate in Ohio.

In Black v. Arizala, 337 Or. 250, 266, 95 P.3d 1109 (2004), the court addressed the cognizability of a motion to dismiss under ORCP 21 A(1) for lack of subject-matter jurisdiction based on a venue agreement. The court found instructive to its interpretation of ORCP 21 A(1) the court's reasoning in Reeves that “the specific, private law estab-lished by the parties’ valid agreement superseded the general jurisdiction of the Oregon courts over claims for breach of contract.”

Black, 337 Or. at 264, 95 P.3d 1109 (emphasis added). The court reasoned, based on Reeves, that “a conclusion of an Oregon court that the parties’ venue agreement is valid and enforceable is a legal determination that requires the court to dismiss the action in response to a timely motion to dismiss for lack of jurisdiction over the subject matter.” Id. (emphasis added). The court studied the legislative history of ORCP 21 A(1) and concluded that, although no statutory provision expressly provides for the dismissal of a complaint based on an agreement to litigate claims in a different venue, “ORCP 21 A(1) authorizes Oregon courts to dismiss an action for lack of jurisdiction over the subject matter when

the motion is timely filed and the record demonstrates that the parties have an enforceable agreement to litigate the action in a different venue.”

Id. at 266, 95 P.3d 1109 (emphasis added).

Thus, both Reeves and Black seem to emphasize as a prerequisite to the enforceability of a forum-selection clause an agreement by the parties to the specific litigation that their disputes would be litigated in a selected forum. The forumselection clause of the SPA provides: “Each of the Parties hereto irrevocably attorns [(consents)] and submits to the exclusive jurisdiction of the courts of the Province of British Columbia in respect of the subject matter of this Agreement.” *471 (Emphasis added.) Textually, it is the parties to the SPA who consented and agreed to the exclusive jurisdiction of the Province of British Columbia. Defendants were not parties to the SPA or the associated agreements; nor do they have a separate forum-selection agreement with plaintiffs.

We note that courts of other jurisdictions have held that, in limited circumstances, forum-selection provisions may be enforced by or against nonsignatories. See, e.g., Tate & Lyle Ingredients Ams., Inc. v. Whitefox Tech. USA, Inc., 98 A.D.3d 401, 949 N.Y.S.2d 375 (2012) (citing cases holding that a nonsignatory can enforce a forum-selection clause when its enforcement is “foreseeable by virtue of the relationship between them,” and the nonsignatory has a “sufficiently close relationship with the signatory and the dispute to which the forum selection clause applied”); Hugel v. Corporation of Lloyd's, 999 F.2d 206, 209 (7th Cir. 1993); Manetti-Farrow, Inc. v. Gucci Am. Inc., 858 F.2d 509, 514 n. 5 (9th Cir. 1988) (“We agree with the district court that the alleged conduct of the non-parties is so closely related to the contractual relationship that the forum selection clause applies to all defendants.”); but see Cape Flattery Ltd. v. Titan Maritime, LLC, 647 F.3d 914, 924 (9th Cir. 2011) (“The mere fact that the tortious interference claims would not have arisen ‘but for’ the existence of the Employment Agreements is insufficient to sweep those non-signatory claims into the ambit of the forum selection clause in a contract they did not sign.”). Assuming that we were to adopt the view that certain circumstances might justify enforcement of a forum-selection clause by a nonsignatory to the agreement containing the clause, the record here is not sufficiently developed to determine whether the limited circumstances described in those cases exist here. Thus, were we to resolve the case on

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Peters v. C21 Investments, Inc., 322 Or.App. 462 (2022) 520 P.3d 920

that basis, we would conclude that, under both Black and Reeves, defendants are not entitled to enforce the forumselection provision, because they did not have an agreement with plaintiffs to pursue claims in the Province of British Columbia.

But we need not resolve that issue here, because we conclude that, even if the SPA forum-selection provision is enforceable by defendants as nonsignatories through a *472 **926 motion to dismiss for lack of subject-matter jurisdiction, it would not apply to these particular claims by plaintiffs under the terms of the provision itself. Thus, we turn to the contract construction arguments discussed by the parties. The forum-selection provision of the SPA states that the parties to the agreement “submit[ ] to the exclusive jurisdiction of the courts of the Province of British Columbia in respect of the subject matter of this Agreement.” (Emphasis added.)

On appeal, in defense of the trial court's ruling, defendants contend that a claim is “in respect of the subject matter” of the agreements if agreements provide the underlying facts for the claims. Plaintiffs assert that the forum-selection clause only applies when the claims originate from the agreements, not when they arise from separate tortious conduct.

In Black, the court said that, when parties have agreed to litigate their dispute in a different forum, whether, as a textual matter, the forum-selection provision requires dismissal of the particular litigation is to be determined through a construction of the agreement. 337 Or. at 267, 95 P.3d 1109 (“The remaining question is whether the trial court correctly determined that parties’ venue agreement required dismissal.”). The forum-selection provision in Black stated that “venue for any legal action arising from this Agreement, including enforcement of any arbitration award, shall be in San Juan, Puerto Rico.” The court explained in Black that the parties’ intentions, as expressed in the provision, would determine whether particular litigation was subject to the forum-selection provision. The court turned to dictionary definitions to help in its determination whether the instant action was “arising from this Agreement”: “The dictionary defines the verb ‘arise’ to include ‘to originate from a specific source[,]’ ‘to come into being[,]’ and ‘to become operative[.]’ Webster's Third New Int'l Dictionary 117 (unabridged ed 1993). The dictionary also explains that ‘from’ is ‘used as a function word to indicate the source or original or moving force of something: as * * * (4) the place of origin, source, or derivation of a material or immaterial thing[.] Id. at 913, 95 P.3d 1109.

Applying those definitions, we conclude *473 that the

parties’ agreement must be the specific place of origin or the source of the legal action to trigger application of the venue agreement.”

Black, 337 Or. at 267, 95 P.3d 1109 (emphasis added; ellipsis and brackets in Black). 5 As in Black, our analysis requires that we determine whether the parties to the SPA intended that the forum-selection clause would apply to plaintiffs’ tort claims. The ordinary rules of contract construction apply in determining the applicability of the forum-selection clause. Black, 337 Or. at 267, 95 P.3d 1109. We first determine whether the parties intended the forum-selection clause to include the present controversy by examining the text and context of the provision. Yogman v. Parrott, 325 Or. 358, 361, 937 P.2d 1019 (1997); see also Batzer Construction, Inc. v. Boyer, 204 Or App 309, 313, 129 P.3d 773, rev. den., 341 Or. 366, 143 P.3d 239 (2006) (noting that, to determine whether a provision is ambiguous, the trial court may **927 consider the text in light of the circumstances underlying the formation of the contract). If the provision is unambiguous, we construe the words of the contract as a matter of law. Eagle Industries, Inc. v. Thompson, 321 Or. 398, 405, 900 P.2d 475 (1995). If we concluded that the forum-selection clause applies, under Reeves, 262 Or. at 98, 495 P.2d 729, we must then determine whether application of the provision would be unfair or unreasonable. *474 Our first task, then, is to determine whether plaintiffs’ claims are “in respect of the subject matter of” the SPA and associated agreements. The phrase “in respect of” is not defined in the SPA, so we give it its plain, natural, and ordinary meaning. See Copeland Sand & Gravel, Inc. v. Estate of Dillard, 267 Or App 791, 796, 341 P.3d 187 (2014), adh'd to on recons., 269 Or App 904, 346 P.3d 526 (2015) (“words in a contract should be given their plain and ordinary meaning[,] and * * * dictionary definitions are one source of that meaning”). Thus, as the court did in Black, we refer to the dictionary for guidance. Webster's Third New Int'l Dictionary 1934 (unabridged ed 2002), defines the phrase “in respect of” to include “as to : as regards : insofar as concerns : with respect to,” and defines “respect” to include “a relation or reference to a particular thing or situation.” See also Phillips Sisson Indus., Inc. v. Hysell, 317 Or App 440, 450, 506 P.3d 1139 (2022) (citing definition).

Thus, the forum-selection provision applies to claims “as to” or “as regards” or “with respect to” the specific subject matter of the SPA and associated agreements. The “subject

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Peters v. C21 Investments, Inc., 322 Or.App. 462 (2022) 520 P.3d 920

matter” of the SPA and the associated agreements was the contractual agreement between plaintiffs and C21 for the sale of plaintiffs’ shares in EFF and plaintiffs’ continued employment with EFF. Thus, as we construe the forumselection provision, it was unambiguously intended by the parties to those agreements to encompass disputes between them as to their specific contractual obligations for the sale of plaintiffs’ shares in EFF to C21 and plaintiffs’ agreement to work for EFF. Although the SPA and associated agreements are tangential to and certainly provide background for plaintiffs’ current tort claims against defendants, the claims themselves do not have as their bases the contractual obligations of the parties to those agreements; nor are the claims as to the contractual subject matter of the agreements—the sale of EFF and plaintiffs’ employment. Rather, the claims concern defendants’ alleged tortious interference with those agreements. Thus, we conclude that the claims themselves are not “in respect of the subject matter” of the agreements.

Although the SPA and associated agreements could provide information to the court in its analysis of plaintiffs’ tort claims, we conclude that they do not require that the *475 claims be brought in the courts of the Province of British Columbia. 6 *476 **928 For that reason, the trial court erred in concluding that plaintiffs’ claims must be dismissed because defendants are entitled to assert that they can only be sued in the courts of the Province of British Columbia. 7 We therefore reverse the general judgment. In light of our conclusion, we also reverse the supplemental judgment awarding attorney fees.

General and supplemental judgments reversed and remanded.

All Citations 322 Or.App. 462, 520 P.3d 920

Footnotes 1

ORCP 21 A has been renumbered, effective January 1, 2022. We cite to the version of the rule in existence at the time the trial court issued its decision in this case.

2

Harris was a former employee of EFF. In their amended complaint, plaintiffs alleged that Harris “coerced Plaintiffs through economic duress to give him a 10% interest in [EFF] or risk seeing their economic prospects disintegrate before their eyes,” and sought the recission of that agreement, the imposition of a constructive trust, and restitution. Harris made a motion to dismiss plaintiffs’ claims against him based on the forumselection provision, which the trial court denied. Harris and plaintiffs then entered into a stipulated judgment of dismissal without prejudice, and that judgment is not on appeal.

3

Defendants assert, as a preliminary matter, that the appeal should be dismissed because plaintiffs have failed to name C21, USH, and EFF as respondents on appeal, noting that, despite not naming them as defendants in the amended complaint, plaintiffs never sought to dismiss them from the case as permitted by ORCP 54 A(1) (providing that “a plaintiff may dismiss an action in its entirety or as to one or more defendants without order of court by filing a notice of dismissal with the court and serving the notice on all other parties not in default not less than 5 days prior to the day of trial if no counterclaim has been pleaded, or by filing a stipulation of dismissal signed by all adverse parties who have appeared in the action”). We reject the assertion, as it appears that the general judgment did in fact dismiss all defendants without prejudice, including C21, USH, and EFF.

4

The opinion's concluding paragraph states:

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Peters v. C21 Investments, Inc., 322 Or.App. 462 (2022) 520 P.3d 920

“It should be understood that we are not holding that such clause ‘ousted’ the Oregon court from jurisdiction. We are not deciding whether Oregon had jurisdiction under the long-arm statute. We are holding that if Oregon has jurisdiction the Oregon court nevertheless will dismiss the action because the contract clause agreeing upon the courts of Cleveland, Ohio, as the place for litigation over the contract is valid and should be enforced. This conclusion is reached because there is no evidence that the clause is unfair or enforcement would be unreasonable.”

Reeves, 262 Or. at 101, 495 P.2d 729.

5

Because the particular contract at issue in Black was subject to Delaware law, the court then referred to Delaware case law in determining whether the parties’ contract was the “specific place of origin or the source” of the plaintiffs’ claims. The court referred for guidance to Parfi Holding AB v. Mirror Image Internet, Inc., 817 A.2d 149 (Del.2002), cert. den., 538 U.S. 1032, 123 S.Ct. 2076, 155 L.Ed.2d 1061 (2003), in which the Delaware Supreme Court had considered the meaning of an agreement requiring arbitration of disputes “ ‘arising out of or in connection with this Agreement.” The Delaware court held that the provision applied to actions seeking to enforce the rights and duties that the parties’ contract created, not rights and duties created by sources of law external to the parties’ contract. Black, 337 Or. at 268, 95 P.3d 1109. In Black, the court noted the noncontractual nature of the alleged improper acts that were the sources of the rights and duties that the plaintiffs’ action sought to enforce. Id. at 270, 95 P.3d 1109. The court explained its understanding of Delaware law that, although the plaintiffs’ claims may have arisen from some or all the same facts that related to the parties’ contractual transactions, because the sources of the claims were noncontractual, they did not arise out of the contract. Id. Thus, the court concluded, although the agreement could provide a source of information to the court in its analysis of the plaintiffs’ claims, the claims were not subject to the forumselection provision. Id.

6

Defendants contend that our opinion in Livingston v. Metro Pediatrics, LLC, 234 Or App 137, 227 P.3d 796 (2010), requires that we construe the SPA's forum-selection provision to be enforceable by defendants. In Livingston, the plaintiff brought claims of interference with economic relationships against the defendants, who were the plaintiff's coworkers and who then sought to enforce an arbitration clause contained in an employment contract between the plaintiff and the employer, to which they were not parties. The arbitration clause provided: “Any controversy, dispute or disagreement arising out of or relating to this Agreement, or the breach thereof, shall be resolved by arbitration.” The plaintiff contended that, as nonsignatories to the employment contract, the defendants had no right to enforce the arbitration provision. We disagreed. Id. at 149, 227 P.3d 796. We noted the special rule of construction relating to arbitration clauses that requires that an arbitration clause will apply if it can plausibly be so construed. Id. at 147, 227 P.3d 796. We reasoned that the broad text of the arbitration clause could plausibly be construed to apply to claims against nonsignatories.

In light of that requirement and in view of the presumption in favor of arbitration, we held that the clause applied to the plaintiff's claims: “[T]he plain text of the clause—in particular, the ‘arising out of or relating to’ language—does not limit its scope to controversies under the agreement or between plaintiff and [the employer]. Furthermore, the employment agreement provides the basis for and terms of plaintiff's employment. The text of the arbitration clause is reasonably susceptible to the interpretation that the parties intended it to apply to any claim that plaintiff might have arising out of or relating to his employment pursuant to the agreement.

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Peters v. C21 Investments, Inc., 322 Or.App. 462 (2022) 520 P.3d 920

“We conclude that the wording of the clause is also broad enough to encompass claims against nonsignatories and to support the interpretation that the parties intended that [the employer's] employees and agents could avail themselves of its terms. Furthermore, the claims against the individual nonsignatory defendants (intentional interference with economic relations, intentional infliction of emotional distress, and blacklisting) depend on the same allegations made against [the employer] and have as their source the identical circumstances of plaintiff's claims against [the employer]—defendants’ concerted response to plaintiff's conduct relating to the vaccine storage problem. We conclude, especially in light of the public policy favoring arbitrability, see [Snow Mountain Pine, Ltd. v. Tecton Laminates Corp., 126 Or App 523, 869 P.2d 369, rev. den., 319 Or. 36, 876 P.2d 782 (1994)], that the arbitration clause plausibly encompasses not only claims between the parties to the agreement, but claims against the individual defendants that arise out of or relate to plaintiff's employment with [the employer].”

Id. at 150-51, 227 P.3d 796.

Livingston is thus distinguishable and is not precedent for the issue presented here. First, Livingston involved an arbitration clause and not a forum-selection clause. It did not involve a motion to dismiss under ORCP 21 A(1) for lack of subject-matter jurisdiction; the enforcement of an arbitration provision does not implicate the court's general subject-matter jurisdiction. Second, our conclusion in Livingston was required because of a special rule of construction for arbitration clauses that is not applicable here—whether the clause can plausibly be interpreted to require arbitration. Id. at 147, 227 P.3d 796. Finally, had Livingston involved a forum-selection provision rather than an arbitration clause, under Reeves, we would have been required to also determine whether application of the provision to the plaintiff's claims against the defendants would be unfair or unreasonable.

7

In view of our conclusion that the forum-selection provision does not apply to plaintiffs’ claims, we do not need to address whether application of the forum-selection clause would be unfair or unreasonable. Reeves, 262 Or. at 100-101, 495 P.2d 729 (holding that a contractual clause agreeing on an exclusive forum will not be enforced if it is determined to be unfair or unreasonable).

End of Document

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8

Lewis v. Varde, 322 Or.App. 746 (2022) 521 P.3d 522

322 Or.App. 746 Court of Appeals of Oregon.

Edward LEWIS, an individual, and Tamara Lewis, an individual, Plaintiffs-Respondents, v.

Valdene Marie Leimomi VARDE, dba Oregon Progressive Construction, and James Varde, Defendants-Appellants.

A176014 | Submitted September 2, 2022. | November 23, 2022 Synopsis Background: Customers brought action against construction contractors for breach of residential construction contract, unlawful trade practices, and unjust enrichment. The Circuit Court, Washington County, Theodore E. Sims, J., denied contractors' petition to compel arbitration. Contractors appealed.

Holdings: The Court of Appeals, Tookey, P.J., held that: parties' failure to designate arbitrator did not render construction contract's arbitration provision unenforceable; arbitration provision applied to claims against nonsignatory contractor because he was party to contract; and even if nonsignatory contractor were not party to contract, arbitration provision plausibly encompassed claims against him, and thus provision was enforceable against him.

Reversed and remanded.

Procedural Posture(s): On Appeal; Motion to Compel Arbitration. **523 Washington County Circuit Court, 21CV03926; Theodore E. Sims, Judge.

Attorneys and Law Firms Valdene Marie Leimomi Varde and James Varde filed the briefs pro se.

Sean J. Riddell, Portland, filed the brief for respondents.

Before Tookey, Presiding Judge, and Egan, Judge, and Kamins, Judge.

Opinion TOOKEY, P. J. *747 In this action by plaintiffs asserting, among other claims, breach of a residential construction contract, defendants Valdene Varde and James Varde, who are sister and brother, appeal, contending in a single assignment of error that the trial court erred in denying their petition to compel arbitration of plaintiffs’ claims. ORS 36.730 (providing for appeal of an order denying petition to compel arbitration). We conclude that the trial court erred in denying the petition and therefore reverse and remand.

For purposes of determining the arbitrability of the dispute, we assume the truth of the allegations of plaintiffs’ complaint.

Livingston v. Metro. Pediatrics, LLC., 234 Or. App. 137, 140, 227 P.3d 796 (2010). Plaintiffs alleged that “Plaintiffs and Defendants entered into a written contract *** that provided Defendants would perform construction work for the benefit of Plaintiffs”; that they “tendered payments to Defendants *** for the work under the Contract”; that “Defendants materially breached the Contract by abandoning the construction project on the Property prior to completion, and by failing to perform the construction work to the standard **524 of care previously agreed”; and that defendants misrepresented their skills and experience and ability to complete the project and “converted” plaintiffs’ payment to cover their personal debts. Based on those alleged facts, plaintiffs asserted against defendants claims of breach of contract, unlawful trade practices, conversion, fraud, and unjust enrichment.

Defendant Valdene Varde filed a petition to compel arbitration, noting that the parties’ contract included an arbitration clause providing, “Both parties agree to mandatory arbitration or mediation to resolve any and all disputes that may arise from this contract.” Plaintiffs objected to arbitration; thus, the matter was presented to the court for decision.

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Lewis v. Varde, 322 Or.App. 746 (2022) 521 P.3d 522

ORS 36.360 provides, in part: “(1) An agreement contained in a record to submit to arbitration any existing or subsequent controversy arising between the parties to the agreement is valid, enforceable *748 and irrevocable except upon a ground that exists at law or in equity for the revocation of a contract.

“(2) Subject to ORS 36.625(8), the court shall decide whether an agreement to arbitrate exists or a controversy is subject to an agreement to arbitrate.”

Oregon courts recognize a presumption in favor of the enforceability of an arbitration provision. Livingston, 234 Or. App. at 147, 227 P.3d 796; see Snow Mountain Pine, Ltd. v. Tecton Laminates Corp., 126 Or. App. 523, 529, 869 P.2d 369, rev. den., 319 Or. 36, 876 P.2d 782 (1994) (“Arbitration is required unless we can say with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute, and we resolve all doubts in favor of coverage[.]”) (citing Portland Assn. of Teachers v. School Dist. No. 1, 51 Or. App. 321, 325, 625 P.2d 1336 (1981)). Ambiguities as to the scope of an arbitration clause are resolved in favor of arbitration. Industra/Matrix Joint Venture v. Pope & Talbot, 341 Or. 321, 332-33, 142 P.3d 1044 (2006).

ORS 36.625(1) provides: “On petition of a person showing an agreement to arbitrate and alleging another person's refusal to arbitrate pursuant to the agreement: “*****

“(b) If the refusing party opposes the petition, the court shall proceed summarily to decide the issue *** and order the parties to arbitrate unless it finds that there is no enforceable agreement to arbitrate.”

The trial court summarily considered the petition to compel arbitration and denied it for two reasons that we reject: First, the court reasoned that compelling arbitration was “problematic” because the parties had failed to designate an arbitrator, rendering the arbitration provision ambiguous and unenforceable. The court was mistaken. Under ORS 36.645(1), if the parties to an agreement to arbitrate have not agreed on a method for appointing an arbitrator, “the court, on petition of a party to the arbitration proceeding, shall appoint the arbitrator.” The parties’ failure to designate an arbitrator for their dispute did not render the arbitration provision unenforceable. The court therefore *749 erred in denying the petition to compel arbitration on that ground.

Second, the court reasoned that compelling arbitration was “problematic” because defendant James Varde was not a signatory to the contract, and plaintiffs’ claims against him therefore would proceed to trial, resulting in a splitting of the action. However, as plaintiffs have alleged in the complaint, James Varde, although not a signatory, was a party to the alleged contractual agreement. Thus, if, as we have concluded, the arbitration provision is enforceable, the claims against James Varde that arise from the contract are also subject to arbitration.

But even if James Varde is not a party to the contract, we would conclude that the arbitration clause itself—which covers claims that “arise from” the contract—plausibly encompassed the claims against James Varde and was therefore enforceable as to him. In Livingston, the plaintiff brought claims of interference with economic relationships against defendants who were not parties or signatories to the plaintiff's employment contract, and its included arbitration clause. The arbitration clause in Livingston **525 provided, “Any controversy, dispute or disagreement arising out of or relating to this Agreement, or the breach thereof, shall be resolved by arbitration.” 234 Or. App. at 146, 227 P.3d 796, The plaintiff contended that, as nonsignatories to the employment contract, those defendants had no right to enforce the arbitration provision. In rejecting that argument, we cited, among other authorities, the rule that an arbitration clause will apply if it can plausibly be so construed. 1 Id. at 147, 227 P.3d 796. We reasoned that the broad text of the arbitration clause could plausibly be interpreted such that the parties intended it to apply to any claim that the plaintiff might have arising out of or relating to his employment pursuant to the agreement, and not just claims between the signatories. Id.

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Lewis v. Varde, 322 Or.App. 746 (2022) 521 P.3d 522

We noted that, as here, the claims by the plaintiff signatory against the nonsignatory defendants “depend on the same allegations made against [the signatory defendant] and have as *750 their source the identical circumstances of plaintiff's claims against” the signatory defendant. Id. at 150, 227 P.3d 796. In light of those circumstances, and in view of the presumption in favor of arbitrability, we held that the clause applied to the signatory plaintiff's claims against the nonsignatory defendants. Id. at 151, 227 P.3d 796.

agreement is plausibly susceptible to the construction that it also applies to claims against James Varde, in addition to claims against Valdene Varde, arising from the work that James performed under the construction contract. For those additional reasons, and because of the presumption in favor of arbitration, the trial court erred in denying the petition to compel arbitration.

Similarly here, the claims against James Varde have as their source both defendants’ failure to perform under the contract.

And similarly here, the broad language of the arbitration

All Citations

Reversed and remanded.

322 Or.App. 746, 521 P.3d 522

Footnotes 1

We also explained that “[c]ourts have relied on a number of rationales for permitting nonsignatory defendants to invoke arbitration clauses in claims against them by signatories to a contract.” Livingston, 234 Or. App. at 149, 227 P.3d 796.

End of Document

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3

Lowell v. Wright, 369 Or. 806 (2022) 512 P.3d 403

369 Or. 806 Supreme Court of Oregon.

Tom LOWELL, dba Piano Studios and Showcase, Respondent on Review, v.

Matthew WRIGHT and Artistic Piano, an Oregon corporation, Petitioners on Review.

(CC 13CV04582)(SC S068129) | Argued and submitted June 24, 2021. | June 23, 2022 Synopsis Background: Owner of piano store brought defamation action against customer who posted negative online review of owner's business and against store's competitor for whom that customer worked. The Circuit Court, Jackson County, Dan Bunch, granted defendants' motion for summary judgment.

Owner appealed. The Court of Appeals, Aoyagi, J., 306 Or.App. 325, 473 P.3d 1094, reversed and remanded, and defendants petitioned for review.

Holdings: The Supreme Court, Nakamoto, J., held that: absence of copy of negative online review was not fatal to piano store owner's defamation claims; review was on a matter of public concern for First Amendment purposes; with respect to First Amendment public comment defense, customer's remarks stating that store owner misrepresented whether his business could sell new pianos of a certain brand and that store owner misrepresented age of the piano on display were sufficiently factual to be actionable; with respect to First Amendment public comment defense, customer's remark stating that store's salesman could not be trusted was not sufficiently factual to be actionable; Supreme Court would not abolish the media/nonmedia distinction in context of this defamation action; and

owner was not subject to a heightened proof-of-fault requirement based on the United States Supreme Court's First Amendment cases that applied to media defendants in defamation cases.

Decision of the Court of Appeals affirmed in part and reversed in part; judgment of the Circuit Court reversed and case remanded.

Balmer, J., concurred and filed opinion in which Garrett, J., joined.

Flynn, J., filed concurring opinion.

Procedural Posture(s): On Appeal. **407 On review from the Court of Appeals. * (CA A162785) Attorneys and Law Firms Tracy M. McGovern, Frohnmayer, Deatherage, Jamieson, Moore, Armosino & McGovern, P.C., Medford, argued the cause and filed the briefs for petitioners on review. Also on the briefs were Casey S. Murdock and Alicia M. Wilson.

Linda K. Williams, Portland, argued the cause and filed the brief for respondent on review.

Eugene Volokh, UCLA School of Law, First Amendment Clinic, Los Angeles, California, argued the cause and filed the brief for amici curiae Institute for Free Speech; Electronic Frontier Foundation; Professors William Funk, Ofer Raban, and Kyu Ho Youm; Howard Bashman; Scotusblog, Inc.; and Professors Glenn Harlan Reynolds and Eugene Volokh. Also on the brief was Owen Yeates, Institute for Free Speech, Washington, D.C. James Abernathy and Rebekah Millard, Freedom Foundation, Olympia, Washington, filed the brief on behalf of amicus curiae Freedom Foundation.

Before Walters, Chief Justice, and Balmer, Flynn, Duncan, Nelson, and Garrett, Justices, and Nakamoto, Senior Judge, Justice pro tempore. ** Opinion NAKAMOTO, S. J.

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1

Lowell v. Wright, 369 Or. 806 (2022) 512 P.3d 403

**408 *808 Plaintiff's libel per se claim is based on a Google review, written by the manager of plaintiff's business competitor, that subsequently was removed from the internet without a trace. The Court of Appeals reversed a grant of summary judgment to defendants. We resolve three disputed legal questions: (1) whether plaintiff may reach a jury on his libel claim when the text is no longer available; (2) whether the First Amendment's public comment defense is available in these circumstances and, relatedly, whether a defendant speaker's identity or motive is part of the court's inquiry on the defense's availability; and (3) whether Oregon should require a plaintiff claiming defamation to prove that the defendant acted with a heightened culpable mental state, “actual malice,” in all cases when the speech is on a “matter of public concern” protected under the First Amendment, abolishing the distinction that requires such proof only when the defendant is a member of the media.

The Court of Appeals concluded that the trial court had erred because plaintiff's evidence of the allegedly defamatory statements sufficed to create a question of fact for trial on his claim and the lack of the review's printed text did not affect the analysis of defendants’ First Amendment defense. Lowell v. Wright, 306 Or. App. 325, 334-35, 473 P.3d 1094 (2020).

Putting aside the First Amendment defense, we, like the Court of Appeals, conclude that the lack of a copy of the review is not fatal to plaintiff's libel claim and that two of the three allegedly defamatory statements in the review are actionable.

To decide whether defendants were entitled to summary judgment based on their First Amendment defense, the threshold question is whether the review about plaintiff's store is subject to First Amendment protection as containing statements on a matter of public concern. As the Court of Appeals recognized, in Neumann v. Liles, 358 Or. 706, 369 P.3d 1117 (2016), this court held that a review of a wedding venue contained speech on a matter of public concern protected by the First Amendment's public comment defense, and the review of plaintiff's business in this case is similar to the review in Neumann. Although plaintiff *809 argues that a speaker's motive may affect the availability of the defense, an argument that we reject, neither party has asked this court to overrule Neumann’s holding. Accordingly, Neumann controls, and we are compelled to follow it in this case.

Finally, we decline to overrule our precedent recognizing the media/nonmedia distinction and to impose an across-theboard heightened proof-of-fault requirement on defamation

plaintiffs in cases involving the First Amendment. Defendants and amici argue that we ought to abolish the distinction, in part, they assert, because it is sometimes difficult to discern whether a given speaker, such as a blogger, is a media or a nonmedia defendant. This case does not offer an opportunity for careful examination of that issue, considering that defendants are not “media” under any definition and acknowledge that they are “nonmedia” defendants, and defendants have not persuaded us to abandon our precedent and to alter Oregon common law.

Ultimately, we conclude that the trial court erred in granting defendants’ summary judgment motion and entering a general judgment of dismissal. We affirm the decision of the Court of Appeals in part and remand the case to the trial court.

I. BACKGROUND We are reviewing the trial court's ruling granting defendants’ motion for summary judgment on plaintiff's claim for defamation. Accordingly, we recount the facts in the light most favorable to plaintiff as the nonmoving party, including reasonable inferences that may be drawn from the facts adduced. ORCP 47 C. Plaintiff Lowell owns and operates Piano Studios and Showcase (Piano Studios), a piano store in Medford. On September 3, 2012, defendant Wright and his wife visited plaintiff's store. At that time, Wright was employed as a general manager by defendant Artistic Piano, another piano store in Medford. 1 On the day of the visit, Wright was off **409 *810 work. Wright testified that he did not tell his boss, Werner, the owner and operator of Artistic Piano, about his plans to visit Piano Studios. Soon after the visit, Wright posted a Google review about Piano Studios.

In December 2012, while browsing internet pages mentioning his business, plaintiff found Wright's review and became upset. The review was not posted under Wright's name, but instead under “Amazing Impressions” (Wright's unrelated photography business). Plaintiff eventually found a phone number associated with Amazing Impressions and called it, instructing his employee, Norling, to listen to the phone call and take notes. Wright answered and eventually hung up on plaintiff.

After the phone call, Wright spoke with Werner and showed him the review. According to Wright, he had told Werner

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Lowell v. Wright, 369 Or. 806 (2022) 512 P.3d 403

previously about his visit to Piano Studios but had not mentioned his review. Once Werner looked over the review, he suggested that Wright take it down. Wright removed it without saving a copy. Plaintiff also did not save a copy of the review before it was removed. Wright composed the review on a home laptop, which he disposed of, explaining that it had become old and inoperable. Despite a diligent search and a request to Google, the parties were unable to recover a copy of the review during litigation.

Although the actual text of the review is unavailable, four people read the review and testified in depositions regarding its contents: Lowell, Norling, Wright, and Werner. Although they could not remember the review verbatim, they largely agreed that it contained the following paraphrased content and that the quoted language (or something extremely close to it) appeared in the review itself: Wright walked around the store for 45 minutes before a salesperson spoke to him, and the store “smelled like grandma's attic.” When he eventually spoke with Wright, the salesman told Wright that a Yamaha C-7 piano displayed on the showroom floor was about five years old. The salesman also told Wright that plaintiff can sell new Steinway pianos. 2 However, *811 plaintiff cannot sell new Steinway pianos, and “[there] were no new Steinways in the showroom,” which is “like a Chevy dealer not having any Chevrolets on the lot.” Finally, Wright had been warned about plaintiff's store and now knew that it was true that “this guy can't be trusted.”

According to plaintiff, Wright not only made false statements —he made up the entire conversation at Piano Studios.

Plaintiff's theory is that defendants’ purpose in having Wright go to Piano Studios and write the review was to “cybersmear,” a practice whereby one business pseudonymously writes about a competitor on the internet to lower the competitor's reputation and thereby attract more business for itself. In support, plaintiff provided testimony from the salesman on duty the day Wright was in Piano Studios. Plaintiff's sales force kept time logs in which they recorded interactions with potential customers. The salesman's time log from that day does not reflect a conversation with Wright. And, the salesman testified, Wright never conversed with him about Steinways or the Yamaha piano on display. In further support of his theory, plaintiff emphasizes that Wright was the manager of Artistic Piano when he wrote the review, that the review was written under the name “Amazing Impressions” rather than under Wright's own name, and that the review included no details that would suggest that its writer had specialized knowledge or a potential ulterior motive.

In 2013, plaintiff filed a defamation action **410 against Wright and Artistic Piano. 3 He alleged that Wright acted as Artistic Piano's agent in writing the Google review. Plaintiff asserted that the review “purported to describe the personal experience of an actual customer” but that “Wright was not a bona fide potential customer.” Plaintiff alleged that three *812 statements in the review were false and defamatory assertions of fact: “a. That a Yamaha C-7 piano serial number F4910127 on the showroom floor was misrepresented to Wright as being about 5 years old, when in fact said piano was at least 15 years older and less valuable, and this misrepresentation of the age of the instrument was purposely made in an effort to cheat Wright; “b. That [plaintiff] misrepresents that he sells new Steinway Pianos, when he actually doesn't; and

“c. That the above misrepresentations are proof that ‘this guy can't be trusted.’ ”

In their answer, among other defenses, defendants asserted that the First Amendment precluded liability for libel.

In 2016, defendants filed a motion for summary judgment on the libel claim. They argued that (1) plaintiff could not prevail because he could not prove that the statements were defamatory; (2) any statements made were protected by the First Amendment public comment defense (under which statements on a matter of public concern that are not susceptible to being proved true or false are not actionable); and (3) plaintiff could not prove that defendants acted with actual malice.

Plaintiff opposed the motion, providing the deposition testimony about the review's content. He also submitted evidence regarding the falsity of the Yamaha and Steinway statements. Plaintiff submitted a copy of the Yamaha piano's tag, which indicated that it was manufactured in 1990, to support the salesman's testimony that he never falsely told Wright that the piano was five years old. Plaintiff also introduced evidence that he can and does sell new Steinway pianos even though plaintiff was not a Steinway dealer,

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including documents that he contended related to the store's sales of Steinway pianos.

The trial court granted summary judgment to defendants. In a letter opinion, the court addressed the significance of the missing verbatim text for plaintiff's claim that he was defamed by the can't-sell-new-Steinways remark in the review. The court indicated that, as to that statement, *813 plaintiff lacked sufficient evidence for a trial on what the review had said and whether it was false. The trial court did not fault the sufficiency of plaintiff's evidence that the review stated that the salesman had lied to Wright about the age of the Yamaha piano in the showroom. And the “this guy can't be trusted” statement, the court concluded, was so clearly one of subjective opinion that it was not actionable in a defamation claim.

The trial court went on to conclude that, because defendants had asserted a First Amendment defense, it was required to determine whether the allegedly false statements about the pianos were constitutionally protected expressions of opinion.

Without a copy of the review, the trial court concluded, it was not possible to determine whether the Yamaha and Steinway statements were constitutionally protected or instead actionable statements implying an assertion of objective fact and that, under those circumstances, judgment for defendants was appropriate.

The trial court did not address other issues that the parties had raised in connection with defendants’ First Amendment defense. The court then entered a general judgment dismissing the action. Plaintiff appealed, and the Court of Appeals reversed and remanded.

The Court of Appeals first held that the absence of the text of the review was not dispositive with respect to the defamatory remarks. Lowell, 306 Or. App. at 334, 473 P.3d 1094. Next, the court considered whether defendants were entitled to summary judgment based on their First Amendment defense. To be protected, the court stated, the speech must be on a matter of public concern that does not imply an assertion of objective fact about plaintiff. Id. at 335-36, 473 P.3d 1094. The court concluded that defendants’ **411 speech was on a matter of public concern, but only after concluding that, although “a speaker's motive or purpose in speaking is relevant to whether speech is protected by the First Amendment,” id. at 339, 473 P.3d 1094 (emphasis in original), plaintiff had failed to meet his burden to establish proof of defendants’ motive to denigrate his

business for private financial advantage. Id. at 342, 473 P.3d 1094. The court then addressed whether the review implied objective facts about plaintiff and held that the Yamaha and Steinway *814 statements could be sufficiently factual to be actionable, but that the statement “this guy can't be trusted” was not. Id. at 343, 473 P.3d 1094.

Finally, the Court of Appeals addressed defendants’ argument that plaintiff was not entitled to a trial because he had not made a sufficient showing of their actual malice. Following this court's holding in Wheeler v. Green, 286 Or. 99, 593 P.2d 777 (1979), the court held that plaintiff need not establish that defendants acted with actual malice to overcome the First Amendment defense because that standard applied only to media defendants, a status defendants lacked, and that, in any case, plaintiff supplied sufficient evidence to establish actual malice for the purposes of summary judgment. Lowell, 306 Or. App. at 348, 473 P.3d 1094. We allowed defendants’ petition for review.

II. ANALYSIS A. Libel Actions in Oregon and the First Amendment Defense, Generally To put the issues we decide in perspective, we provide some basic law governing libel actions in Oregon. As this court explained in Neumann, 358 Or. at 711, 369 P.3d 1117, defamation has long been recognized as tortious in Oregon.

Indeed, the remedy clause, Article I, section 10, of the Oregon Constitution, has specified from its adoption that Oregonians shall have a remedy for injury to reputation, providing that “every man shall have remedy by due course of law for injury done him in his person, property, or reputation.” In Horton v. OHSU, 359 Or. 168, 180, 376 P.3d 998 (2016), the court explained that, textually, the “clause's focus on providing remedies for specified types of injuries implies that it was intended to guarantee some remedy for those injuries, and not merely be a guarantee of procedural regularity for whatever injuries may, at the moment, enjoy legal protection.”

A statement that “would subject the plaintiff to hatred, contempt or ridicule,” that tends to “diminish the esteem, respect, goodwill or confidence in which [the plaintiff] is held,” or that brings about “adverse, derogatory or unpleasant feelings or opinions against” the plaintiff can be the basis for a defamation claim. Neumann, 358 Or. at 711, 369 P.3d 1117 *815 (quotation and citation omitted, brackets in original).

And, as relevant to this case, a statement also is defamatory

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if it falsely “ascribes to another conduct, characteristics or a condition incompatible with the proper conduct of his lawful business[.]” Id. at 711-12, 369 P.3d 1117. A court decides whether a statement is capable of a defamatory meaning, and, if so, the jury decides whether the statement did have a defamatory meaning. Brown v. Gatti, 341 Or. 452, 459, 145 P.3d 130 (2006).

Alleged defamatory statements that the plaintiff engaged in misconduct or dishonesty in conducting the plaintiff's business are actionable per se. Neumann, 358 Or. at 712, 369 P.3d 1117. Under Oregon law, to establish a prima facie claim of libel per se, subject to defenses, plaintiff must prove that defendants made a defamatory statement about him and published the statement to a third party. Id. at 711, 369 P.3d 1117. Because the claim is libel per se, plaintiff is not obliged to prove a third element: that the defamatory statement caused pecuniary loss or special harm. Brown, 341 Or. at 458, 145 P.3d 130.

But it is now well established that state law defamation actions can be affected by the First Amendment rights of speakers.

The Supreme Court first extended constitutional protections in a libel case over 50 years ago in New York Times Co. v.

Sullivan, 376 U.S. 254, 84 S.Ct. 710, 11 L.Ed.2d 686 (1964).

Before that decision, the Court had recognized libel as one of the “well-defined and narrowly limited classes of speech, the prevention and punishment of which have never **412 been thought to raise any Constitutional problem.” Chaplinsky v.

New Hampshire, 315 U.S. 568, 571-72, 62 S.Ct. 766, 86 L.Ed. 1031 (1942).

Since New York Times was decided, the Supreme Court has repeatedly revisited the intersection between defamation claims and the First Amendment freedoms of speech and of the press and articulated additional constitutional principles that may apply in common-law defamation cases, sometimes focusing on the identity of the speaker, the identity of the plaintiff, or the nature of the speech involved. At the same time, the Court has noted that competing interests are involved. For example, the Court in Milkovich v. Lorain Journal Co., 497 U.S. 1, 110 S.Ct. 2695, 111 L.Ed.2d 1 (1990), as it had in earlier cases, recognized not only *816 the First Amendment's protection “of free and uninhibited discussion of public issues,” but also the “ ‘important social values’ ” undergirding common-law defamation and strong societal interests “ ‘in preventing and redressing attacks upon reputation.’ ” Id. at 22, 110 S.Ct. 2695 (quoting Rosenblatt v.

Baer, 383 U.S. 75, 86, 86 S.Ct. 669, 15 L.Ed.2d 597 (1966)).

In Gertz v. Robert Welch, Inc., 418 U.S. 323, 94 S.Ct. 2997, 41 L Ed 2d 789 (1974), the Court also recognized the value of reputation in several ways, noting that states have a legitimate interest in compensating “individuals for the harm inflicted on them by defamatory falsehood” and that “the individual's right to the protection of his own good name ‘reflects no more than our basic concept of the essential dignity and worth of every human being—a concept at the root of any decent system of ordered liberty.’ ” Id. at 341, 94 S.Ct. 2997 (quoting Rosenblatt, 383 U.S. at 92, 86 S.Ct. 669 (Stewart, J., concurring)). 4 As relevant here, the First Amendment interacts with plaintiff's claim in two distinct ways. First, defendants raise the First Amendment public comment defense, which places federal constitutional constraints on whether a state must require that a plaintiff in a defamation action show that the defamatory statements are provably false. Second, defendants argue that plaintiff must show that they acted with actual malice, a standard that comes from First Amendment doctrine and that some state courts have chosen to apply broadly across defamation actions. We discuss each aspect of First Amendment doctrine in detail.

The Supreme Court explained the falsity requirement in Philadelphia Newspapers, Inc. v. Hepps, 475 U.S. 767, 106 S.Ct. 1558, 89 L.Ed.2d 783 (1986), and Milkovich. In Hepps, the Supreme Court considered a libel claim brought by a convenience store franchise stockholder against a newspaper over an article alleging that the stockholder had *817 mob ties. 475 U.S. at 769, 106 S.Ct. 1558. At issue was whether the plaintiff could recover without a showing that the statements were false. Id. The Court held “that, at least where a newspaper publishes speech of public concern, a privatefigure plaintiff cannot recover damages without also showing that the statements at issue are false.” Id. at 768-69, 106 S.Ct. 1558. The Hepps Court reserved the question of whether a private-figure plaintiff could recover against a nonmedia defendant without making a showing of falsity. Id. at 779 n. 4, 106 S.Ct. 1558. In Milkovich, the Court reaffirmed its holding in Hepps, explaining, “Foremost, we think Hepps stands for the proposition that a statement on matters of public concern must be provable as false before there can be liability under state defamation law, at least in situations, like the present, where a media defendant is involved.” 497 U.S. at 19-20, 110 S.Ct. 2695. Milkovich held that a media defendant's speech was protected under the First Amendment as public comment when two criteria were met: (1) the speech was on a matter of public concern and (2) the speech could

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not reasonably be interpreted as stating **413 facts or was not susceptible to being proved true or false. Id. The Court again reserved whether a nonmedia defendant could raise the public comment defense. Id. at 20 n. 6, 110 S.Ct. 2695.

Separately, the Supreme Court has held that states cannot allow a private-figure plaintiff to prevail in a defamation claim against a media defendant without making a showing of some level of fault. Gertz, 418 U.S. at 347, 94 S.Ct. 2997. The states are left to define for themselves the appropriate standard of fault. Id. Defendants in this case urge us to hold not only that plaintiff must prove defendants’ fault, even though they are not media defendants, but also that the standard of fault should be “actual malice,” or reckless disregard for the truth, which the Court has required only for defamation actions brought by public officials and public figures against media defendants. See New York Times, 376 U.S. at 279-80, 84 S.Ct. 710; Curtis Publishing Co. v. Butts, 388 U.S. 130, 87 S.Ct. 1975, 18 L.Ed.2d 1094 (1967).

In sum, without the overlay of any state law, federal constitutional law currently recognizes two different areas of defamation law in which a state may make rules that distinguish between media and nonmedia defendants within an acceptable range. With respect to falsity, *818 federal constitutional law announced by the Supreme Court demands that a state require a private-figure plaintiff to show falsity when a media defendant's speech is protected by the public comment defense. The Court's decisions do not speak to whether that requirement applies when the defendant is nonmedia. With respect to fault, a private-figure plaintiff may not collect damages from a media defendant without some showing of fault. But Gertz does not announce a federal rule for fault in a defamation case brought by a private-figure plaintiff against nonmedia defendants.

This court has also issued decisions involving proof of falsity and of fault in cases involving both the First Amendment and Oregon defamation law. In Neumann, the court established for the first time that a private-figure plaintiff bears the burden of proving falsity of statements in defamation cases involving the First Amendment public comment defense, even when the action is brought against nonmedia defendants.

See 358 Or. at 716, 369 P.3d 1117 (announcing framework for applying Milkovich against factual backdrop with no media defendant). And, in a series of cases decided in the 1970s, this court held that the Gertz fault requirement for private-figure plaintiffs applies only to media defendants. Harley-Davidson v. Markley, 279 Or. 361, 371, 568 P.2d 1359 (1977); Adams

v. State Farm Mutual Auto. Ins. Co., 283 Or. 45, 51-52, 581 P.2d 507 (1978); Wheeler, 286 Or. at 110, 593 P.2d 777.

B. Sufficiency of Evidence in Absence of Text On review, defendants rely primarily on Neumann to argue that the trial court correctly granted their motion for summary judgment. In challenging the reversal by the Court of Appeals, defendants ask this court to address three issues, the first of which is whether a plaintiff may reach a jury in a libel claim based on a writing posted on a publicly available site when the writing itself is no longer available. Defendants urge that, without the actual text of the review, plaintiff cannot establish the content of the defamatory statements or, at least, cannot establish enough content to permit a court to competently analyze defendants’ First Amendment public comment defense. We conclude that the lack of the text is not fatal to plaintiff's libel claim. *819 Since Wright removed his Google review, it is no longer available. In lieu of the unavailable writing, plaintiff relies on the testimony of four people who read the review to supply the content of the statements that he contends were defamatory. We reject defendants’ contention that plaintiff cannot proceed to trial on his libel claim without a copy of the review.

Defendants argue that the loss of the text means that a court cannot competently apply the constitutionally mandated test to discern whether the public comment defense is available.

In Neumann, this court held that, to determine whether speech was capable of defamatory meaning (and thus whether it satisfied one of the prongs of the public **414 comment defense), a court had to look to three factors: (1) the “general tenor of the entire work”; (2) the specific context and content of the statements including figurative and hyperbolic language; and (3) whether the statement itself is sufficiently factual to be proved true or false. 358 Or. at 718, 369 P.3d 1117. In defendants’ view, because the review is lost, a court lacks sufficient information to apply the test and properly perform its gatekeeping role. For instance, defendants doubt whether a court can discern the “general tenor” of the work without the text.

Having a copy of the review would certainly simplify matters, but factfinders have long been asked to weigh competing or incomplete evidence and to make credibility determinations.

The task is no different here. It is an artifact of how libel cases are typically litigated that we might be tempted to think that a copy of the at-issue writing would be required. Because,

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definitionally, libel has been put into writing, the parties are typically able to supply the court with the writing. But we can easily find similar defamation cases in which no such exact record was available, and the case was nonetheless able to be tried to conclusion.

The Court of Appeals aptly compared this libel case to slander cases. Lowell, 306 Or.App. at 334, 473 P.3d 1094. Slander cases can be litigated without the benefit of verbatim records of what words were spoken. See, e.g., Worley v. OPS, 69 Or.App. 241, 243, 686 P.2d 404, rev. den., 298 Or. 334, 691 P.2d 483 (1984) (relating the factual background, including that the allegedly *820 defamatory statements were spoken in a staff meeting, without verbatim quotes of the statements).

In slander cases, a plaintiff need not prove that the defendant spoke exactly the words alleged in the complaint, but only that the words are in substance the same, i.e., “so many of the words alleged in the declaration as constitute the sting of the charge.” Swift & Co. v. Gray, 101 F.2d 976, 981-82 (9th Cir. 1939) (internal quotation marks omitted). There is no reason that such a standard should be categorically inapplicable to libel cases because the medium of the speech is different.

Here, four people—plaintiff, Norling, Wright, and Werner— read the review and testified as to its contents. Their accounts largely agree, and they all seem to agree that they have not collectively forgotten a substantial component of the review (e.g., an additional customer service complaint or remark about the store's instruments). The point of disagreement concerns the exact wording of the statement in the review about Steinway piano sales. Defendants’ witnesses recall its wording in one way, and plaintiff's witnesses recall it in another.

But, at summary judgment, the trial court must view the evidence in the light most favorable to plaintiff, leaving it to the eventual factfinder to make credibility determinations.

ORCP 47 C. And the testimony of the four witnesses is sufficient for a factfinder to find the facts, including whether the review conveyed that plaintiff's salesman had misrepresented to Wright that plaintiff was a Steinway dealer or that plaintiff could sell Steinway pianos.

We turn to defendants’ additional argument that the text of the review is necessary to apply First Amendment protections properly. Although it certainly is easier to discern the “general tenor” of a piece or the use of hyperbolic or figurative language with the text in hand, and those are important factors to determine whether a statement implies an assertion of fact,

nothing in Neumann or the case law from which it derives suggests that the fact that exact wording is disputed means that a trial court must throw up its hands, declare defeat, and grant summary judgment to the defendants. 358 Or. at 718-19, 369 P.3d 1117. Competent evidence going to *821 the general tenor of the review, its use of language, and the nature of the allegedly actionable statements was available.

Thus, a constitutional inquiry was certainly possible, albeit not as straightforward as it would be if the trial court could assure itself that it had all the information that ever existed about the allegedly defamatory writing.

Accordingly, we reject defendants’ argument that they were entitled to summary judgment because plaintiff could not produce the exact wording of the review. **415 C. The First Amendment Defense We turn to the second issue on review: whether defendants are entitled to assert their public comment First Amendment defense. As explained above, under Milkovich, for a statement to be protected under the First Amendment, it must (1) be on a matter of public concern and (2) not be susceptible to being proved true or false. 497 U.S. at 19, 110 S.Ct. 2695.

The parties’ dispute here centers on the public concern prong and, in particular, whether the identity of the speaker or the speaker's motive can affect whether speech is on a matter of public concern.

We begin by describing the parties’ arguments in some detail, as they circumscribe our analysis here. First, plaintiff does not ask us to overrule Neumann. Plaintiff briefly discusses Neumann but argues that it is distinguish-able from the present case. He argues that, because of the procedural posture in which the question about the nature of the statements in Neumann arose, the decision had little to do with whether the speech was on a matter of public concern in a constitutional sense. The defendant in Neumann had asserted protection under the Oregon Anti-Strategic Lawsuits Against Public Participation (anti-SLAPP) statute, ORS 31.150. In plaintiff's view, the court's comments about the statements at issue being on a matter of public interest concerned the statutory standard under the anti-SLAPP statute, which shifts a modest burden of production to the plaintiff when the allegedly actionable communications are made “in a place open to the public or a public forum in connection with an issue of public interest[.]”

ORS 31.150(2)(c). *822 Plaintiff also offers reasons to doubt the result of Neumann’s application to the present matter. Plaintiff would

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have us conclude that speaker identity and motive can affect the public concern analysis and that, under the circumstances of this case, Wright's identity as an employee for a competitor and his alleged motive of sinking plaintiff's business renders his review not on a matter of public concern. Plaintiff submits that the “attacks by a competing business are not issues of public interest” and argues that the Court of Appeals correctly concluded that the speaker's motivation is relevant to whether the speech is on a matter of public concern. Plaintiff also argues that the Court of Appeals incorrectly concluded that the record was insufficient to establish a factual issue for trial on motivation; he highlights the fact that Wright concealed who he was when he composed the review as a basis to find that defendants were not speaking on a matter of public concern. In response, defendants advance a simple argument: The identity or motive of the speaker is irrelevant to the determination of whether the speech is on a matter of public concern, and Neumann controls the outcome here.

for the motion under subsection (2), the burden shifts to the plaintiff to establish the probability that “the plaintiff will prevail on the claim by presenting substantial evidence to support a prima facie case”). This court allowed review “to determine how an actionable statement of fact is distinguished from a constitutionally protected expression of opinion in a defamation claim and whether the context in which a statement is made affects that analysis.” Neumann, 358 Or. at 710, 369 P.3d 1117.

To address whether the public concern prong of the public comment defense applies under the circumstances of this case, we address both interrelated aspects of the parties’ arguments: (1) the degree to which Neumann controls and (2) whether a speaker's identity and motive affect the public concern analysis. We conclude that Neumann controls in the absence of plaintiff's request that we overrule it, although we have doubts about its approach, and that a speaker's identity and motive do not affect whether a matter is of public concern.

Notably, Neumann did not mention that the Court had reserved judgment in Milkovich as to whether its First Amendment limitations applied to nonmedia defendants in defamation cases. See Milkovich, 497 U.S. at 20 n. 6, 110 S.Ct. 2695 (“In Hepps the Court reserved judgment on cases involving nonmedia defendants, and accordingly we do the same.” (Internal citation omitted.)). Additionally, Neumann’s discussion of whether the wedding review was on a matter of public concern was limited to the following:

1. Neumann v. Liles Neumann was a libel action involving a wedding guest's negative online consumer review of a wedding venue posted on Google Reviews. 358 Or. at 708, 369 P.3d 1117. As discussed, the defendant filed a special motion to strike the plaintiffs’ claim under Oregon's anti-SLAPP statute, which applies to cases involving written statements presented “in a place open to the public or a public forum in connection with an issue of public interest,” among others. Id. at 709, 725, 369 P.3d 1117; see *823 also ORS 31.150(2)(c).

The trial court granted the motion and dismissed the claim, and the Court of Appeals reversed. Neumann, 358 Or. at 709, 369 P.3d 1117. Rejecting the defendant's contention that his review was hyperbolic and mere opinion, the Court of Appeals concluded that some statements in the review were capable of a defamatory meaning and that the plaintiffs had adduced sufficient evidence, if credited, to **416 permit a factfinder to determine that the defendant's statements were defamatory. Id. at 710, 369 P.3d 1117; see also ORS 31.150(3) (providing that, if a defendant establishes grounds

This court began by reviewing the Supreme Court's decision in Milkovich. 358 Or. at 713-16, 369 P.3d 1117.

Neumann described Milkovich as having two prongs for First Amendment protection to apply: first, whether the statements were on a matter of public concern and, second, whether the statements were susceptible to true-false analysis. Id. at 714, 369 P.3d 1117 (citing Milkovich, 497 U.S. at 19-20, 110 S.Ct. 2695).

“[Plaintiff] has not disputed that [the defendant's] statements involve matters of public concern, and we readily conclude that they do. [The defendant's] review was posted on a publicly accessible website, and the content of his review related to matters of general interest to the public, particularly those members of the public who are in the market for a wedding venue.” *824 358 Or. at 720, 369 P.3d 1117 (citing Unelko Corp. v.

Rooney, 912 F.2d 1049, 1056 (9th Cir. 1990), cert. den., 499 U.S. 961, 111 S.Ct. 1586, 113 L.Ed.2d 650 (1991)).

The court then turned to the legal question before it: How should a court determine whether an allegedly defamatory statement is susceptible to a true-false analysis, the second prong of the test in Milkovich? The court in Neumann adopted the approach the Ninth Circuit had crafted in Unelko Corp., 912 F.2d at 1053, soon after the Supreme Court decided Milkovich. Neumann, 358 Or. at 716-19, 369 P.3d 1117. That approach involves a three-part inquiry, which we described as “(1) whether the general tenor of the entire publication

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negates the impression that the defendant was asserting an objective fact; (2) whether the defendant used figurative or hyperbolic language that negates that impression; and (3) whether the statement in question is susceptible of being proved true or false.” Id. at 719, 369 P.3d 1117. Through that framework, a court considers the work as a whole, the context of the statements, and the statements themselves to determine whether a factfinder could conclude that the statements imply a false assertion of objective fact. Id. The Neumann court explained in detail the choice to adopt the Unelko approach, but it did not address a factual difference between the two cases: The Neumann defendant was nonmedia (a wedding guest who wrote an online review), 358 Or. at 708-09, 369 P.3d 1117, and the Unelko defendants were media (CBS and Andy Rooney, a broadcaster best known for his appearances on 60 Minutes), 912 F.2d at 1050.

In Unelko, the Ninth Circuit mentioned but did not dwell on the Supreme Court's language in Milkovich reserving the question of whether the First Amendment defense applied to nonmedia defendants. See id. at 1056 (quoting Milkovich’s announcement of the rule as applying “at least in situations, like the present, where a media defendant is involved,” Milkovich, 497 U.S. at 19-20, 110 S.Ct. 2695, and applying the test without acknowledging CBS and Rooney as media defendants). In short, the Neumann court did not note that whether the defendant is media or not could affect the analysis, even to reject the idea.

The court went on to apply Unelko to the wedding guest's online review, agreeing with the Court of Appeals *825 that some of the **417 statements were capable of a defamatory meaning, but stating that the question remained “whether they are nevertheless protected under the First Amendment.”

Neumann, 358 Or. at 719-20, 369 P.3d 1117. The court addressed each prong of the Milkovich test, and, concluding that the statements were protected expressions of opinion, it reversed the Court of Appeals. Id. at 722, 369 P.3d 1117.

In short, while the main issue in, and the clear holding of, Neumann was that courts in Oregon would use the Unelko three-part inquiry to determine whether speech was capable of defamatory meaning under Milkovich, the Neumann court decided two other issues with comparatively little to no discussion: (1) that the First Amendment falsity requirement applied when a private-figure plaintiff made claims against nonmedia defendants and (2) that a scathing internet review was on a matter of “public concern.” Neumann allowed the defendant to raise the First Amendment public comment

defense because his speech was on a matter of public concern and his review could not reasonably be interpreted as asserting fact. 358 Or. at 722, 369 P.3d 1117. It appears that the parties did not dispute that the review of the wedding venue was of public concern, a term of art in First Amendment defamation doctrine.

In Dun & Bradstreet, Inc. v. Greenmoss Builders, Inc., 472 U.S. 749, 105 S.Ct. 2939, 86 L.Ed.2d 593 (1985), the Court had the first occasion to consider how the First Amendment applies to a defamation suit between private-figure plaintiffs and nonmedia defendants and used “public concern” as a term of art in the defamation context. A building company sued a credit reporting service for defamation for misreporting to five subscribers that the company had filed for bankruptcy.

Id. at 751, 105 S.Ct. 2939. The Court considered how best to balance the state's interests in protecting its law of defamation and First Amendment values given the context. It noted that the First Amendment interest at issue was “less important than the one weighed in Gertz. We have long recognized that not all speech is of equal First Amendment importance. It is speech on matters of public concern that is at the heart of the First Amendment's protection.” Id. at 758, 105 S.Ct. 2939 (internal quotations omitted). The Court explained that the *826 First Amendment was created to protect the interchange of ideas to effectuate the political and social will of the people and that speech concerning public affairs was the “essence of self-government.” Id. at 759, 105 S.Ct. 2939. Accordingly, that speech was worthy of the First Amendment's greatest protection. Id. On the other hand, speech of only private concern deserved less protection. Id. The Court quoted this court's decision in Harley-Davidson, 279 Or. at 366, 568 P.2d 1359, extensively and favorably to support that point. See Dun & Bradstreet, 472 US at 760, 105 S.Ct. 2939 (“ ‘[There] is no threat to the free and robust debate of public issues; there is no potential interference with a meaningful dialogue of ideas concerning self-government; and there is no threat of liability causing a reaction of self-censorship by the press. The facts of the present case are wholly without the First Amendment concerns with which the Supreme Court of the United States has been struggling.’ ”). When balanced against a much weaker First Amendment interest, the state's interest in protecting its citizens from defamation was much stronger. Id. The Court in Dun & Bradstreet readily concluded that the speech at issue was of private, not public, concern. Id. at 762, 764, 105 S.Ct. 2939 (Burger, J., concurring), 774 (White, J.,

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concurring). 5 It applied the “public concern” test (examining the content, form, and context of the speech) originally developed in public employment cases. Id. at 761, 105 S.Ct. 2939. The Court noted that the speech was wholly false, clearly injurious, **418 and made available to only five subscribers. Id. at 762, 105 S.Ct. 2939. Additionally, there was “simply no credible argument that this type of credit reporting require[d] special protection to ensure that ‘debate on public issues [remained] uninhibited, robust and wideopen.’ ” Id. (quoting and citing New York Times, 376 U.S. at 270, 84 S.Ct. 710). The Court also noted that the speech at issue was unlikely to be chilled based on the rule announced because *827 its motivation was profit, which would be best served with accurate information. Dun & Bradstreet, 472 US at 762-63, 105 S.Ct. 2939.

We draw two lessons from the Supreme Court's discussion of public concern. First and foremost, the legal rule is that a reviewing court discerns whether speech is on a matter of public concern by looking to its content, form, and context. Id. at 761, 105 S.Ct. 2939. Second, Dun & Bradstreet discusses matters of public concern as the “heart of the First Amendment's protection” because they protect the interchange of ideas required for effective self-government.

Id. at 759, 105 S.Ct. 2939.

Defendants essentially contend that a negative review of a business posted on the internet is categorically speech on a matter of public concern and that we should follow Neumann. Defendants seem to assume that the internet can breathe constitutional importance into speech posted in a way that makes it publicly available. We doubt that sweeping proposition. The internet is revolutionary. Scholars, legal practitioners, and laypeople alike have urged that its revolutionary nature requires an entirely different set of rules, urging that speech on the internet enjoys unusual protection from influence or restraint. But many innovations were once revolutionary. The telegram allowed messages to travel in a matter of minutes or hours, instead of the days it took for letters to reach their destinations. But a statement communicated by telegram is no different from the same one communicated by letter. So too with the internet. In practice, there is no difference between a statement being posted on social media, Google reviews, on a sign carried around outside the plaintiff's home, or written in the sky: The statement is the same no matter how it reaches the public.

The touchstone principle in evaluating whether speech is on a matter of public concern is whether the speech must

be protected to ensure the continuance of vigorous debate on public issues and, by extension, self-governance. Dun & Bradstreet, 472 U.S. at 761-62, 105 S.Ct. 2939. The idea that negative remarks about a business's practices are always (or almost always) necessary to ensure vigorous debate on public issues or are part of self-governance is doubtful. Although such remarks may be made in public or be on a subject that a member of the public finds interesting, those circumstances *828 do not automatically render them of constitutional importance. None of this is to say that a customer's review of a business cannot be on a matter of public concern while hewing closely to Dun & Bradstreet. Rather, instead of assuming that a customer review of a business is on a matter of public concern, a careful and more nuanced approach would likely be to examine the “content, form, and context *** as revealed by the whole record.” Id. at 761, 105 S.Ct. 2939.

2. Application of Neumann We now turn to whether Neumann applies to the present case. Although the court's analysis on public concern consists of little more than a citation to Unelko, Neumann, 358 Or. at 720, 369 P.3d 1117 (citing Unelko, 912 F.2d at 1056), we cannot agree with plaintiff's characterization of Neumann as holding that, for purposes of the anti-SLAPP statute as opposed to the First Amendment, the wedding review was on a matter of public concern. The court's focus on the First Amendment belies that characterization. The court explained at the outset of its analysis that the “determination of the legal sufficiency of Neumann's defamation claim hinges on whether Liles's statements are protected under the First Amendment[.]” 358 Or. at 711, 369 P.3d 1117. After reviewing state common law and some of the Supreme Court's First Amendment decisions concerning defamation actions, especially Milkovich, the court stated that, “to determine whether a defamatory statement is protected under the First **419 Amendment, the first question is whether the statement involves a matter of public concern.” Id. at 718, 369 P.3d 1117. If so, “then the dispositive question is whether a reasonable factfinder could conclude that the statement implies an assertion of objective fact.” Id. at 718-19, 369 P.3d 1117.

Accordingly, considering that plaintiff has not asked us to overrule Neumann, the court's determination that the online wedding review in Neumann was on a matter of public concern that triggered the First Amendment is relevant. That negative online review of a wedding venue is in many respects like the negative online review of plaintiff's piano store in this case, and both cases involved private-figure plaintiffs and

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nonmedia defendants. In view of plaintiff's arguments, we apply Neumann and conclude that, under *829 that case, the online review in this case was on a matter of public concern.

3. The impact of speaker motive and identity on public concern We now turn to the impact of the speaker's motive or identity on the public concern analysis. Although the Court of Appeals did not treat it as dispositive in this case, it declared that “a speaker's motive or purpose in speaking is relevant to whether speech is protected by the First Amendment.” Lowell, 306 Or.App. at 339, 473 P.3d 1094 (emphasis in original). To support its conclusion, it cited public employment cases from which Dun & Bradstreet derived its public concern test, including the following: “[W]hen a public employee speaks not as a citizen upon matters of public concern, but instead as an employee upon matters only of personal interest, absent the most unusual circumstances, a federal court is not the appropriate forum in which to review the wisdom of a personnel decision taken by a public agency allegedly in reaction to the employee's behavior.”

Connick v. Myers, 461 U.S. 138, 147, 103 S.Ct. 1684, 75 L.Ed.2d 708 (1983). The Court of Appeals further reasoned that the motive of the speaker was properly part of the content, form, and context analysis, as part of the context of a statement, in public employment cases in Oregon. Lowell, 306 Or.App. at 340, 473 P.3d 1094 (citing one of its earlier cases). The Court of Appeals also cited Harley-Davidson, 279 Or. at 363, 366, 568 P.2d 1359, as support. In that case, this court held that a fake customer complaint written by a competitor and sent directly to a mutual distributor was not speech on a matter of public concern. The Court of Appeals acknowledged that this court “gave little explanation of its specific reasoning” but concluded that the court derived its result from the touchstone principle that to be speech on a matter of public concern, the speech must be in the interest of democratic dialogue and this court determined that “the interest in democratic dialogue [was] non-existent.” Lowell, 306 Or.App. at 340, 473 P.3d 1094.

The parties disagree on whether the Court of Appeals was correct. Plaintiff argues that the Court of Appeals was *830 correct, particularly in treating public employment cases as instructive, and defendants argue the opposite.

In the public employment cases, the relationship between whether the topic is one of public concern and the motive of the speaker is as follows: When the topic truly is one of public concern, it is likely that the employee is speaking in her capacity as a citizen, which is protected by the First Amendment irrespective of the fact that the government is also the speaker's employer. But, when the topic is narrow or one of private concern, it is likely that the employee is speaking in her capacity as an employee, which any employer, regardless of whether that employer happens to be the government, may have a legitimate interest in controlling.

Plaintiff interprets Dun & Bradstreet as the Supreme Court's endorsement of a similar approach in the defamation context because it applied the content, form, and context approach crafted for public employment cases. Plaintiff argues that, when a writer makes negative comments about a business (the content), the writer's status—business competitor or disgruntled customer (the context)—and whether she masks her status in her delivery of those comments (the form) are instructive as to whether the comments truly are on matters of public concern. When the writer is a competitor, the logic goes, it is **420 likely, no matter how the comments are presented, that the subject is one of private concern. When the writer is a disgruntled customer, it is likely that the matter is one of public concern (albeit not one of overwhelming public concern).

That reasoning is mistaken because the logic is not parallel in public employment cases and defamation cases. The public employment cases reason from the topic of the speech to determine which relationship between the parties (the citizen-government relationship or the employee-employer relationship) ought to control the outcome. In other words, whether speech is on a matter of public concern is a tool of a larger inquiry in public employment cases. In the context of defamation, whether speech is on a matter of public concern is the object of the inquiry. Plaintiff asks us to reason from the status of the speaker to determine whether the topic is of public concern, going so far as to suggest that, whenever a competitor or its employee speaks about *831 another business, the speech is of purely private concern.

That is mistaken. Defendants correctly note that the rules arising from the public employment context are intended to balance interests where the two players at issue each have two statuses, citizen-employee and government-employer.

In deciding whether the topic of the speech was of public or private concern, the court decides which status controls (the citizen-government or employee-employer) and thereby which interests ought to control (a citizen's interest in her

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free speech rights or an employer's interest in appropriately regulating the workplace). Here, the object of the inquiry is to determine whether the speech is on a topic of public or private concern.

The Supreme Court's decision in Garcetti v. Ceballos, 547 U.S. 410, 126 S.Ct. 1951, 164 L.Ed.2d 689 (2006), supports that analysis. In that case, a public employee wrote a memo on what he believed to be serious internal misconduct pursuant to his job duties. Id. at 414, 126 S.Ct. 1951. He was reassigned and denied a promotion soon after. Id. at 415, 126 S.Ct. 1951. He sued, citing First Amendment protections for speech relating to matters of public concern because whether the department was corrupt was a matter of public concern. Id. The Supreme Court held that the memo was not protected by the First Amendment because it was written pursuant to his official duties, i.e., the topic of the speech was part of his duty as an employee, so he wrote it as an employee, not as a citizen.

Id. at 421, 126 S.Ct. 1951. Thus, the government's interests as an employer regulating a workplace controlled. Whether the employee, in addition to having a job duty, was motivated to act because he believed that he was addressing an issue of public concern was not relevant in determining whether the speech was First Amendment-protected. Id. Focusing on the motive of the speaker also distracts from the question central to the inquiry: Does the speech bear on public discourse, self-governance, or the ordering of society?

There is no reason to suppose that the exact same words delivered in the exact same way have different ramifications for those areas of constitutional concern because the speaker's motive is different in the two cases. A useful example of that comes from a Connecticut case, Gleason v. Smolinski, 319 Conn. 394, 125 A.3d 920 (2015). In that case, *832 the defendants, family members to a missing person, posted missing person signs around the plaintiff's neighborhood. Id. at 396-97, 125 A.3d at 927. The defendants believed that the plaintiff, the missing person's girlfriend, was involved in his being missing or dead. Id. at 396, 125 A.3d at 927. Although there was substantial evidence that some of the defendants’ motive in posting the signs was to harass the plaintiff so that she would divulge information about the missing person, the Connecticut Supreme Court concluded that the matter was of public concern because it related to a police investigation and finding a missing person. Id. at 433 & n. 33, 125 A.3d at 949 & n. 33. The fact that the defendants were partially motivated by a desire to harm the plaintiff did not detract from the speech being on a matter of public concern, a police investigation of a missing person.

Additionally, adoption of the Court of Appeals’ analysis would be inconsistent **421 with First Amendment values, which include “secur[ing] the widest possible dissemination of information from diverse and antagonistic sources.” New York Times, 376 U.S. at 266, 84 S.Ct. 710 (internal quotation omitted). Motives like competition, hatred, and ridicule may underlie speech vital to the public discourse, which the First Amendment is intended to protect. Allowing the government to scrutinize the motive of a speaker to determine the scope of that speaker's protection from government enforcement against her under the First Amendment invites the government to define the contours of the public discourse according to the motives it finds the worthiest. Rather than giving expression the “breathing space” it needs to survive, id. at 271-72, 84 S.Ct. 710, we would suffocate it.

4. Whether the speech is susceptible to true-false analysis Having concluded that Neumann applies to this case such that the speech is on a matter of public concern and that motive and speaker identity do not alter that outcome, we turn to the last step in applying the First Amendment public comment defense, in view of defendants’ position that we are unable to make that determination on this record. That last step is whether the speech is susceptible to being proved true or false under Milkovich. The First Amendment precludes liability for statements that a *833 reasonable factfinder could not find to imply an assertion of objective fact. The Court of Appeals applied the Unelko test adopted in Neumann to resolve that question, and we agree with its conclusions.

As discussed above, the three-part inquiry for discerning whether speech is susceptible to a true-false analysis is as follows: “(1) whether the general tenor of the entire publication negates the impression that the defendant was asserting an objective fact; (2) whether the defendant used figurative or hyperbolic language that negates that impression; and (3) whether the statement in question is susceptible of being proved true or false.” Neumann, 358 Or. at 719, 369 P.3d 1117. In the present matter, we examine how the three-part inquiry applies to three different statements: (1) the remark that plaintiff misrepresented whether his business could sell new Steinway pianos, (2) the statement that the salesman misrepresented the age of the Yamaha C-7 piano, and (3) “this guy can't be trusted.”

We agree with the Court of Appeals that the Steinway and Yamaha statements are sufficiently factual to be actionable but that “this guy can't be trusted” is not. Lowell, 306

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Or.App. at 343, 473 P.3d 1094. Starting with the last prong of the Unelko test, whether plaintiff's business misrepresented its ability to sell new Steinway pianos and whether the salesman misrepresented the age of the Yamaha piano are factual matters with truth values. Straightforward sets of facts would make Wright's statements in the review either true or false. Applying the two other prongs of the Neumann inquiry does not alter that result with respect to those two statements. Based on the record of the contents of the review, nothing in the review's “general tenor” would negate the impression that the writer really was asserting that the business and its employees were misrepresenting facts about pianos to customers. Although there is some evidence that the review used evocative language, such as the store “smelled like grandma's attic,” that language is not so figurative or hyperbolic as to undermine a reader's impression that the review is alleging that plaintiff's business lied to the writer about selling new Steinway pianos and the age of the Yamaha piano on display. See Milkovich, 497 U.S. at 21, 110 S.Ct. 2695 *834 (considering whether the writer's use of “loose, figurative, or hyperbolic language” or the “general tenor of the article” negated the impression that the writer “was seriously maintaining that petitioner committed the crime of perjury”).

The analysis differs with respect to the “this guy can't be trusted” remark. In isolation, the statement is subjective and not susceptible to being proved true or false. And, viewing the remark in the context of the whole review does not alter that result. As the Court of Appeals explained in its opinion, Lowell, 306 Or.App. at 345, 473 P.3d 1094, the remark can be best understood as a conclusion that the writer drew from the **422 “facts” presented in the review: The business misrepresented whether it could sell new Steinway pianos and the age of a piano on display, and therefore its owner “can't be trusted.” The writer's conclusion implies no facts beyond those already offered in the review and is not actionable.

5. Whether to alter defamation law in Oregon by following Obsidian Finance Because the public comment First Amendment defense is available to defendants and applies to two statements, we address what plaintiff's burden is to show defendants’ fault and the media/nonmedia distinction that applies when a private figure plaintiff sues a nonmedia defendant.

Defendants ask that, if Neumann did not already abolish the distinction between media and nonmedia defendants in defamation claims brought by private figures, we now should do so and follow the Ninth Circuit's approach in Obsidian

Finance Group, LLC v. Cox, 740 F.3d 1284, 1291 (9th Cir. 2014). We decline to abolish the media/nonmedia distinction.

The principles of stare decisis counsel that result for a few reasons. First, the facts of the case before us are far from an ideal vehicle for considering the nuances of the question with which we are confronted, and amici’s hypotheticals are no substitute. Second, we are not persuaded by the strength of Obsidian Finance’s logic and support to overrule our existing precedent.

At the outset, we note that “the party seeking to change a precedent must assume responsibility for affirmatively persuading us that we should abandon that precedent,” and we assume, grounded in the principle of stare decisis, *835 that “fully considered prior cases are correctly decided.”

State v. Ciancanelli, 339 Or. 282, 290, 121 P.3d 613 (2005).

Stare decisis is “a prudential doctrine that is defined by the competing needs for stability and flexibility in Oregon law.”

Farmers Ins. Co. v. Mowry, 350 Or. 686, 697-98, 261 P.3d 1 (2011). Importantly, “[s]tare decisis does not permit this court to revisit a prior decision merely because the court's current members may hold a different view than its predecessors about a particular issue. At the same time, stare decisis is not absolute.” Couey v. Atkins, 357 Or. 460, 485, 355 P.3d 866 (2015).

This court held in Wheeler that plaintiffs must prove that a defendant acted with actual malice to obtain presumed damages only if the defendant is a media defendant. 286 Or. at 110, 593 P.2d 777. That has been an established rule of the law of defamation in Oregon for decades. Wheeler and its related cases do not suffer from some of the faults that have compelled us to overrule precedent in the past.

The rule was not adopted in what amounted to dicta or without explanation. See Couey, 357 Or. at 485, 355 P.3d 866 (identifying the above as a reason to overcome the application of stare decisis). Wheeler discussed its decision in detail, relying on Gertz’s own emphasis on the fact that it dealt with media defendants. See 286 Or. at 108-10, 593 P.2d 777 (quoting Gertz extensively). Nor was Wheeler’s analysis clearly incorrect, see Couey, 357 Or. at 485, 355 P.3d 866 (identifying that as an additional reason to overcome the application of stare decisis): Gertz did not itself resolve whether it applied to nonmedia defendants.

Defendants and amici urge that the time has come to overturn Wheeler and to abolish the media/nonmedia distinction because it has become incompatible with modern times and technology. First, they argue that the distinction creates a

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“double standard” at odds with the Supreme Court's current approach. They note that the Supreme Court has said that the press has no special speech privileges distinct from those of other speakers, see Citizens United v. Federal Election Comm'n, 558 U.S. 310, 352, 130 S.Ct. 876, 175 L.Ed.2d 753 (2010), and that all speakers, whether or not members of traditional media, should have the same standards of liability. Second, defendants and amici argue that Wheeler is at odds with the majority approach of most federal appellate *836 courts, including the Ninth Circuit. Given the split between Oregon state law and the law binding the Ninth Circuit, defendants and amici argue that Oregon defamation defendants will be less protected than their out-of-state counterparts facing similar suits in diversity cases in federal court. Amici further argue that Wheeler conflicts with the approach of **423 the majority of states that have addressed the question. Defendants urge, in summary, that “[t]here should be no different constitutional analysis for a news reporter[ ] (media defendant), a food-critic blogger (arguably media-defendant or non-media defendant), a private citizen review on Google or Yelp (non-media defendant), and any other person who posts a consumer review that is accessible to the public.”

We begin with defendants’ concerns about the changing times and later address their arguments based on case law. Notably, defendants’ arguments have little to say about the facts of this case, with good reason: Wright is not a blogger or a food critic. He is an individual who wrote a review of a retailer and posted it to the internet, just as millions of other Americans do. Artistic Piano is just a store that sells musical instruments and accessories. At bottom, defendants argue that the media/ nonmedia distinction should be abandoned as clearly wrong because it presents a difficult line-drawing problem, but they make that argument in a case in which the line is entirely clear: Defendants are not media under any workable definition. We also note that the resolution of the issue may make little practical difference under the circumstances of this case: Plaintiff is correct that he could make the required showing of actual malice to overcome summary judgment. Plaintiff's theory of the case is not that the review's statements are just false; it is that the conversation described in the review was entirely made up, and plaintiff adduced evidence in support of that theory. Because at summary judgment all reasonable inferences are drawn in the light most favorable to the nonmoving party, a factfinder may very well conclude that the conversation reported in the review never took place. And, if defendants described an entirely made-up conversation, anything they claim was “said” in it would be made knowing

that it was false or with reckless disregard for the truth, i.e., *837 with actual malice, the very fault standard for which defendants advocate.

In short, we have before us a case in which the defendants are admittedly not media and may very well have acted with actual malice. Defendants do not engage with those facts in their efforts to persuade us to overrule the media/nonmedia distinction for purposes of determining what showing of defendants’ fault plaintiff must make. Stare decisis is not mechanistic, Mowry, 350 Or. at 697, 261 P.3d 1, but it is demanding. And it does not permit us to destabilize over 40 years of precedent on the strength of a few hypotheticals and some abstract concerns about modernity. We acknowledge the competing need for flexibility in a modern world and recognize that old rules can become outmoded with the passage of time, see id. at 697-98, 261 P.3d 1, but this case simply does not present an example of how the rule has become outmoded. It instead presents facts to which the rule can be straightforwardly applied. 6 In the absence of an argument that the facts illustrate why the existing media/nonmedia distinction ought to be overruled, defendants attempt to meet their burden to show why precedent should be abandoned by appealing to case law from other jurisdictions, particularly Obsidian Finance.

We are not persuaded that defendants’ argument meets that burden, nor do we find Obsidian Finance’s logic persuasive enough to convince us that our longstanding approach ought to be abandoned.

In Obsidian Finance, the Ninth Circuit acknowledged that the Supreme Court has not directly addressed whether its First Amendment defamation rules apply equally to the institutional press and to private, nonmedia defendants. 740 F.3d at 1291. However, the Ninth Circuit held that a defendant blogger's allegations that a *838 bankruptcy trustee was corrupt were protected by the First Amendment, though the defendant was not a trained journalist and “apparently ha[d] a history of making similar allegations and **424 seeking payoff in exchange for retraction.” Id. at 1287, 1291.

The court's rationale, like defendants’ and amici’s argument before this court, was largely based on decisions by the Supreme Court—in contexts other than defamation claims— rejecting constitutional privileges for the institutional press greater than those available to individuals engaged in the same activities. See id. at 1290 (citing cases). Citing decisions from other circuits, the Ninth Circuit concluded that the

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First Amendment defamation rules “apply equally to the institutional press and individual speakers.” Id. at 1291.

We stand by our previous reasoning, that the legal context here, a defamation claim, matters for the purposes of whether and how the First Amendment must alter state common law. Defamation law in Oregon has developed over time mainly in the common-law tradition (the anti-SLAPP statute is a notable exception). The common-law libel cause of action exists to provide remedies in individual cases of harm caused by false speech, and liability is by no means a foregone conclusion, even in cases of libel per se, as a result of common-law privileges and defenses recognized in Oregon. We have already discussed in detail how the Supreme Court approaches defamation cases. In our view, the Supreme Court's approach in state common-law defamation cases is different from cases that involve a jurisdiction that enacts and seeks to enforce laws against speakers that are not content-neutral or suffer from similar constitutional defects.

See Hepps, 475 U.S. at 777, 106 S.Ct. 1558 (acknowledging that “a suit by a private party is obviously quite different from the government's direct enforcement of its own laws”).

And, the Court has recognized that the common-law speechbased torts are varied and call for an appreciation of the specific context at issue. See, e.g., Zacchini v. ScrippsHoward Broadcasting Co., 433 U.S. 562, 97 S.Ct. 2849, 53 L.Ed.2d 965 (1977). In Zacchini, the Ohio Supreme Court had held that a television news broadcast of the plaintiff's “human cannonball” act in its entirety without the performer's permission was protected as reporting on a matter of *839 public interest, relying on the Court's decision in a false light case, Time, Inc. v. Hill, 385 U.S. 374, 87 S.Ct. 534, 17 L.Ed.2d 456 (1967). The Supreme Court reversed, noting that the tort in Time “involved an entirely different tort” from the plaintiff's cause of action for appropriation of his right of publicity under Ohio law, Zacchini, 433 U.S. at 571, 97 S.Ct. 2849, and explained that the “differences between these two torts are important,” id. at 573, 97 S.Ct. 2849.

The Court also recognized that its line of cases involving the First Amendment and defamation, including Gertz, were inapplicable. Id. at 574, 97 S.Ct. 2849.

As a result, we are not persuaded that the Supreme Court's First Amendment cases involving other legal contexts are or should be determinative as to state law defamation cases. For example, in Bartnicki v. Vopper, 532 U.S. 514, 121 S.Ct. 1753, 149 L.Ed.2d 787 (2001), a case cited in Obsidian Finance, 740 F.3d at 1290, the plaintiffs’ mobile phone conversation

was unlawfully intercepted and recorded by an unknown third party during a labor dispute, and one defendant gave the recording to the media defendants. After the recording was broadcast over radio and published in newspapers, the plaintiffs brought claims for damages based on federal and Pennsylvania wiretap acts that prohibited disclosure of content of communications that a party has reason to know were obtained unlawfully. The defendants asserted that, if they violated the wiretap laws, their disclosures of the conversation between the plaintiffs were protected by the First Amendment. Id. at 518-21, 121 S.Ct. 1753.

The Third Circuit Court of Appeals evaluated the statutes and concluded that they deterred more speech than necessary to protect the privacy interests involved and therefore reversed the district court's denial of the defendants’ motion for summary judgment. Id. at 521-22, 121 S.Ct. 1753. Applying its framework for reviewing statutes challenged under the First Amendment, the Supreme Court agreed that the statutes were content-neutral. Id. at 526-27, 121 S.Ct. 1753. However, the Court noted that it repeatedly had held that, if the press has lawfully obtained truthful information, state action punishing publication of information of public concern will generally be unconstitutional. **425 Id. at 527-28, 121 S.Ct. 1753. The Court concluded that the call between the union president and the union's chief negotiator, in which the president threatened use of physical *840 harm during ongoing negotiations over the terms of compensation for teachers at the public high school, was on a matter of public concern. Id. at 535, 121 S.Ct. 1753. Thus, the question in the case was whether the First Amendment protected the defendants when they had reason to know that the interception of the phone call was unlawful. The Court in Bartnicki acknowledged the communication privacy interest that the statutes protected but concluded that, based on the facts of the case—particularly the kind of speech that was publicized and the fact that none of the defendants had performed the interception—all the defendants were protected from liability for the publication.

Id. 7 Similarly, Cohen v. Cowles Media Co., 501 U.S. 663, 111 S.Ct. 2513, 115 L.Ed.2d 586 (1991) (contract claim for breach of confidentiality), and First National Bank of Boston v. Bellotti, 435 U.S. 765, 767, 98 S.Ct. 1407, 55 L.Ed.2d 707 (1978) (freedom of speech challenge to a Massachusetts criminal statute forbidding banks and corporations from making campaign contributions or expenditures to influence public votes on referenda other than those affecting their property, business, or assets), arise in contexts that are dissimilar to common-law defamation claims.

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Finally, we have reviewed the other circuit court decisions that the Ninth Circuit also treated as persuasive in concluding that the First Amendment defamation rules apply both to the institutional press and nonmedia defendants. Three of the cases are not on point, because they do not involve private figure plaintiffs and nonmedia defendants, thus obviating the need to decide the question of how the First Amendment applies in a defamation claim between two wholly private, nonmedia parties. See Garcia v. Bd. of Ed. of Socorro Consol. Sch. Dist., 777 F.2d 1403, 1408 (10th Cir. 1985) (the plaintiffs, school board members *841 in a defamation cross-claim against a fired school superintendent, were public officials); Avins v. White, 627 F.2d 637, 648 (3rd Cir. 1980) (the plaintiff was a public figure); Davis v. Schuchat, 510 F.2d 731, 734 n. 3 (DC Cir. 1975) (the defendant was a reporter).

Although another case stated that, whether the defendant is media or nonmedia is “irrelevant to the question of what level of constitutional protection that right is to receive,” In re IBP Confidential Business Documents Litigation, 797 F.2d 632, 642 (8th Cir. 1986), that case concerned the degree to which the First Amendment right to petition was implicated and should be protected. It is unsurprising that the Eighth Circuit concluded that the media/ nonmedia distinction should be irrelevant when the context is the defendant's exercise of the right to petition the government.

And we are not persuaded by the two remaining cases, which emphasize the difficulties in defining media. See Snyder v.

Phelps, 580 F.3d 206, 219 n. 13 (4th Cir. 2009), rev'd on other grounds, 562 U.S. 443, 131 S.Ct. 1207, 179 L.Ed.2d 172 (2011) (stating—as to an intentional infliction of emotional distress claim—that “[a]ny effort to justify a media/nonmedia distinction rests on unstable ground, given the difficulty of defining with precision who belongs to the ‘media’ ”); Flamm v. American Ass'n of University Women, 201 F.3d 144, 149 (2d Cir. 2000) (“We agree that a distinction drawn according to whether the defendant is a member of the media or not is untenable.”). Thus far, the Supreme Court itself has recognized that distinction in defamation cases.

The values underlying defamation claims have been recognized by this court for over 150 years, see Neumann, 358 Or. at 711, 369 P.3d 1117 (citing **426 Hurd v. Moore, 2 Or. 85 (1863)), and in the common law for much longer, see Milkovich, 497 U.S. at 11, 110 S.Ct. 2695 (noting that the common-law cause of action has existed since “the latter half of the 16th century”). As discussed earlier, the Supreme Court has repeatedly recognized the strong interests of the states in providing remedies for harms to reputation and the

individual and societal benefit in preventing and remedying invidious false speech. Considering the Court's precedents in defamation cases and its overall approach to assessing the interests of speakers in light of *842 the legal context (and concomitant competing interests), we are not persuaded that the Supreme Court requires states to alter their common law by applying First Amendment protections in defamation cases brought by private figures against nonmedia defendants.

We therefore decline to overrule existing precedent based on Obsidian Finance.

In sum, we affirm the decision of the Court of Appeals in part on different grounds. On remand to the trial court, plaintiff's libel claim is subject to the First Amendment defense, but plaintiff will not be subject to a heightened proof-of-fault requirement based on the Supreme Court's First Amendment cases that apply to media defendants in defamation cases.

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

Balmer, J., concurred and filed an opinion in which Garrett, J., joined.

Flynn, J., concurred and filed an opinion.

BALMER, J., concurring.

The majority holds that Oregonians who publish a review of a local business may be liable for defamation without any showing of fault on their part. In so doing, the opinion upholds an untenable distinction between “media” and “nonmedia” defendants without clearly articulating the differences between the two. In my view, any approach that retains that distinction must be supported by a workable test to delineate media from nonmedia, and the majority makes no attempt to provide that test. I would follow the federal and state courts that have rejected that distinction for purposes of defamation claims by a private figure and would hold that the First Amendment equally protects the media and private individuals.

The majority also casts doubt on this court's decision in Neumann v. Liles, 358 Or. 706, 369 P.3d 1117 (2016), based on arguments that are not made by the parties and are unrelated to the case before us. I would not reach beyond the facts of this

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case to call into question a recent decision of this court that no party here has challenged and that was correctly decided. *843 Thus, although I agree with much of what the majority opinion holds—including its discussion of the missing text of the review, its conclusion regarding the role of motive in identifying speech of public concern, and its ultimate disposition—I disagree with key parts of the majority's First Amendment analysis. I therefore respectfully concur in the judgment, but not in all of the analysis.

At issue in this case are two First Amendment protections that apply in defamation cases, which I address in turn. The first is that a plaintiff must show that a defendant acted with some level of fault, with the specific level of fault depending on the identities of the parties. The second is that a statement must be provably false to be actionable if the statement involves matters of public concern.

As to the first protection, the Supreme Court has indicated that the level of fault that a plaintiff must show varies with the circumstances. If the plaintiff is a public figure, for example, the plaintiff must show that the allegedly defamatory statement was made with “actual malice.” See New York Times Co. v. Sullivan, 376 U.S. 254, 283, 84 S.Ct. 710, 11 L.Ed.2d 686 (1964); Curtis Publishing Co. v. Butts, 388 U.S. 130, 155, 87 S.Ct. 1975, 18 L.Ed.2d 1094 (1967).

A plaintiff who is not a public figure must show that a defendant acted with negligence (or some higher level of fault) to recover, at least in cases involving media defendants.

See Gertz v. Robert Welch, Inc., 418 U.S. 323, 347, 94 S.Ct. 2997, 41 L.Ed.2d 789 (1974). Gertz further **427 held that, to recover presumed or punitive damages, a plaintiff who is not a public figure must show that the defendant acted with actual malice. Id. at 349, 94 S.Ct. 2997.

Following Gertz, state and federal courts have split on whether Gertz’s fault requirements apply in cases involving nonmedia defendants, as described below. For its part, this court held several decades ago that Gertz did not apply to nonmedia defendants, as the majority explains. 369 Or at 818 (citing Harley-Davidson v. Markley, 279 Or. 361, 371, 568 P.2d 1359 (1977); Adams v. State Farm Mutual Auto. Ins. Co., 283 Or. 45, 51-52, 581 P.2d 507 (1978); Wheeler v. Green, 286 Or. 99, 110, 593 P.2d 777 (1979)). *844 That approach to Gertz, however, fails to engage with the increasingly difficult question of how to distinguish clearly between media and nonmedia defendants and, for that

reason, places this court at odds with recent decisions from other state and federal courts. Those cases, and the rapidly changing nature of media, communications, and public discourse, counsel that reevaluating the media/ nonmedia distinction may lead to a sounder approach to protecting our “profound national commitment to the principle that debate on public issues should be uninhibited, robust, and wideopen.” New York Times, 376 U.S. at 270, 84 S.Ct. 710.

In short, I would reject the media/nonmedia distinction to which the majority adheres and would reconsider this court's limitation of Gertz to media defendants in Harley-Davidson, Wheeler, and Adams, in light of more recent case law and the changing media landscape.

As identified by the majority, one helpful recent federal case is Obsidian Finance Group, LLC v. Cox, 740 F.3d 1284, 1291 (9th Cir.), cert. den., 572 U.S. 1142, 134 S.Ct. 2680, 189 L.Ed.2d 223 (2014), where the Ninth Circuit held that the Gertz fault rules should apply equally to media and nonmedia defendants. 369 Or at 834. Obsidian Finance noted that, of the six federal circuit courts that had then reached the issue, all had extended the First Amendment protections of “[New York Times v.] Sullivan and its progeny,” including Gertz, to media and nonmedia defendants. 740 F.3d at 1291. The Ninth Circuit agreed with that approach, observing: “The protections of the First Amendment do not turn on whether the defendant was a trained journalist, formally affiliated with traditional news entities, engaged in conflict-of-interest disclosure, went beyond just assembling others’ writings, or tried to get both sides of a story. As the Supreme Court has accurately warned, a First Amendment distinction between the institutional press and other speakers is unworkable * * *.”

Id. The Court therefore applied the Gertz negligence requirement for private defamation actions in that case involving a nonmedia defendant.

The majority rejects Obsidian Finance and the cases it cites as variously inapposite *845 or unpersuasive. 369 Or at 840-41. The majority is correct that some of those cases are not precisely on point here, because they considered only whether the New York Times fault rule for defamation actions by public figures extended to nonmedia defendants (as it already does in Oregon, see Wheeler, 286 Or. at 110-11, 593 P.2d 777 (“We conclude that all defendants, not only those associated with the media, continue to be protected by the New York Times rule in cases involving comment upon public officials and public figures.”)) rather than the Gertz fault rule

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for plaintiffs that are not public figures. E.g., Garcia v. Bd. of Ed. of Socorro Consol. Sch. Dist., 777 F.2d 1403, 1410 (10th Cir. 1985), cert. den., 479 U.S. 814, 107 S.Ct. 66, 93 L.Ed.2d 24 (1986); Avins v. White, 627 F.2d 637, 649 (3rd Cir.), cert. den., 449 U.S. 982, 101 S.Ct. 398, 66 L.Ed.2d 244 (1980).

At the same time, however, the majority disregards the significance of the cases cited by Obsidian Finance as a set as well as the persuasive reasoning of the Ninth Circuit.

Together with Obsidian Finance, those cases show that recent federal court decisions have uniformly rejected the media/ nonmedia distinction in the First Amendment context and have done so for two primary reasons. First, in the context of the evolving communications and media landscape, with the boundary between traditional media and new or social media disappearing, that distinction is “unworkable,” **428 Obsidian Finance, 740 F.3d at 1291, “rests on unstable ground,” Snyder v. Phelps, 580 F.3d 206, 219 n. 13 (4th Cir. 2009), aff'd, 562 U.S. 443, 131 S.Ct. 1207, 179 L.Ed.2d 172 (2011), or is “untenable,” Flamm v. American Ass'n of University Women, 201 F.3d 144, 149 (2d Cir. 2000).

Second, that distinction is at odds with the fundamental First Amendment principle that the value of speech “ ‘does not depend upon the identity of its source, whether corporation, association, union, or individual.’ ” In re IBP Confidential Bus. Documents Litigation, 797 F.2d 632, 642 (8th Cir. 1986), cert. den., 479 U.S. 1088, 107 S.Ct. 1293, 1294, 94 L.Ed.2d 150 (1987) (quoting First National Bank of Boston v. Bellotti, 435 U.S. 765, 777, 98 S.Ct. 1407, 55 L.Ed.2d 707 (1978)).

The federal courts are not alone. Several state courts have taken a similar tack, either by explicitly applying Gertz to nonmedia defendants or applying a functionally equivalent fault-based rule under state law. See, e.g., *846 Antwerp Diamond Exch., Inc. v. Better Bus. Bur., 130 Ariz. 523, 528, 637 P.2d 733, 738 (1981) (applying Gertz to nonmedia defendant); Bierman v. Weier, 826 N.W.2d 436, 470-71 (Iowa 2013) (Hecht, J., concurring in part and dissenting in part) (listing cases and noting that 22 state and federal jurisdictions apply Gertz to nonmedia defendants, while only eight states, including Oregon, have held that Gertz does not apply to nonmedia defendants); Lester v. Powers, 596 A.2d 65, 69 (Me. 1991) (holding that Maine common law requires a showing of “fault amounting at least to negligence” in defamation suits against nonmedia defendants); Jacron Sales Co., Inc. v. Sindorf, 276 Md. 580, 592, 350 A.2d 688, 695 (1976) (“[W]e conclude as a matter of state law that the Gertz holding should apply to media and non-media defendants alike * * *.”); Maethner v. Someplace Safe, Inc.,

929 N.W.2d 868, 878-79 (Minn. 2019) (concluding that the limitation on presumed damages in Gertz applies equally to media and nonmedia defendants in suits by private plaintiffs); Bender v. City of Seattle, 99 Wash.2d 582, 599, 664 P.2d 492, 503 (1983) (citing Gertz and requiring a showing of fault in actions by private individuals against nonmedia defendants). At least one state has gone even farther and extended the New York Times actual malice requirement to cases involving private plaintiffs and nonmedia defendants based on statements involving matters of public concern. See Durando v. Nutley Sun, 209 N.J. 235, 250, 37 A.3d 449, 458 (2012) (“Today, in New Jersey the actual-malice standard protects both media and non-media defendants who make statements involving matters of public concern, regardless of whether the targets of the statements are public figures or private persons.”).

The Restatement (Second) of Torts takes the same approach as many of those cases, stating that, although the precise holding of Gertz was limited to media defendants, “the principle of the Gertz decision would appear to be broad enough to cover” situations involving only private, nonmedia individuals. Restatement (Second) of Torts § 580B comment e (1977). As the Restatement explains, “It would seem strange to hold that the press, composed of professionals and causing much greater damage because of the wider distribution of the communication, can constitutionally be held liable only for negligence, but that a private person, engaged in a casual private conversation *847 with a single person, can be held liable at his peril if the statement turns out to be false, without any regard to his lack of fault.”

Id. The Restatement goes on to explain that, even if Gertz itself is limited to media defendants, “the common law of the states is almost certain to apply the same standard” of requiring a fault showing for private defamation actions. Id. The majority responds by emphasizing that the defamation context is unique among First Amendment applications, and states, “Thus far, the Supreme Court itself has recognized that [media/nonmedia] distinction in defamation cases.” 369 Or at 841. But the Court itself has never taken up the question of whether Gertz applies to nonmedia defendants. To the contrary, when the Court has considered the media/nonmedia distinction, even in the context of defamation, the Court has consistently declined to embrace that **429 distinction and just as often has strongly cautioned against employing it.

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For example, in Dun & Bradstreet, Inc. v. Greenmoss Builders, 472 U.S. 749, 105 S.Ct. 2939, 86 L.Ed.2d 593 (1985), the Court considered a defamation action by a private figure (a construction contractor) against a nonmedia defendant (a credit reporting agency). In resolving that case, the Court did not rely on a media/nonmedia distinction, but instead concluded that the speech at issue was not of public concern. See id. at 772-73, 105 S.Ct. 2939 (White, J., concurring in the judgment).

The majority discusses Dun & Bradstreet, 369 Or at 825-27, but it does not mention that, although the plurality opinion did not decide the issue, a majority of the Court in that case nevertheless explicitly rejected the media/nonmedia distinction in the defamation context. At least five justices agreed that, “in the context of defamation law, the rights of the institutional media are no greater and no less than those enjoyed by other individuals or organizations engaged in the same activities.” Id. at 784, 105 S.Ct. 2939 (Brennan, J., dissenting, joined by Marshall, Blackmun, and Stevens, JJ.); see also id. at 773, 105 S.Ct. 2939 (White, J., concurring in the judgment) (“I agree with Justice BRENNAN that the First Amendment gives no more protection to the press in defamation suits than it does to others exercising their freedom *848 of speech. None of our cases affords such a distinction; to the contrary, the Court has rejected it at every turn.” (Uppercase in original; emphasis added.))

The Court reaffirmed that principle more recently in Citizens United v. Federal Election Comm'n, 558 U.S. 310, 340, 130 S.Ct. 876, 175 L.Ed.2d 753 (2010), where the Court noted that treating media differently from nonmedia in the First Amendment context is particularly fraught. “With the advent of the Internet and the decline of print and broadcast media,” the Court observed, “the line between the media and others who wish to comment on political and social issues becomes far more blurred.” Id. at 352, 130 S.Ct. 876. As a result, the Court has “consistently rejected the proposition that the institutional press has any constitutional privilege beyond that of other speakers.” Id. (emphasis added). Thus, although the Court has never specifically held that Gertz applies to a nonmedia defendant, the majority's brief assessment that “the Supreme Court has recognized that distinction in defamation cases,” 369 Or at 841, is belied by the Court's own statements emphasizing that it has drawn no such line.

Few would disagree that, as the Court observed in Citizens United in 2010, the line between the media and nonmedia is indeed “blurred” and that it has only become more so

in the last decade. Even if the Court had endorsed such a distinction in the abstract, we would be left with the difficult task of crafting a workable test to distinguish between types of defendants. It is no secret that, in today's world of internetbased communication and social media, private individuals and groups who are not part of any kind of “traditional media” can share similarly powerful platforms for the dissemination of speech on matters of public concern.

The difficulty in drawing the media/nonmedia distinction has also been highlighted by other courts and scholars. See, e.g., Snyder, 580 F.3d at 219 n. 13; Flamm, 201 F.3d at 149; Ryan M. Walters, When Can You Shoot the Messenger?

Understanding the Legal Protections for Entities Providing Information on Business Products and Services in the Digital Age, 96 Or L Rev 185, 191 (2017) (“The barrier between a news organization and an individual has never been lower.”); Clay Calvert, Emma Morehart & Sarah *849 Papadelias, Plausible Pleading & Media Defendant Status: Fulfilled Promises, Unfinished Business in Libel Law on the Golden Anniversary of Sullivan, 49 Wake Forest L Rev 47, 73-83 (2014) (describing three reasons why the media/nonmedia distinction “should be obliterated”: difficulties in defining “media” in a digital world, the democratization of media empowering private individuals to respond to defamation, and notions of speaker equality espoused in Citizens United, as discussed above).

Even if a workable distinction between media and nonmedia might be possible, the majority makes no attempt to explain how that distinction would be made. The majority asserts that defendants are “not ‘media’ under any definition.”

369 Or at 809. But in **430 making that assertion, the majority does not provide any definition of media. Although dictionary definitions are of limited use in discerning the meaning of Supreme Court opinions, a few examples nevertheless illustrate that defendants are “media” under at least some definitions of the term. For example, Black's Law Dictionary defines media as certain means of communication: “Collectively, the means of mass communication; specif., television, radio, newspapers, magazines, and the Internet regarded together.” Black's Law Dictionary 1175 (11th ed 2019). Here, the allegedly defamatory statements were made through the internet, which is one of those listed “media.”

More importantly, the statements were posted as a review on Google. A central purpose of posting an online review is to make the writer's views regarding a product or service available to the broader public—including potentially any person in the world with an internet connection and a browser.

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The extent of that potential reach is exactly the “means of mass communication” we think of as “media.”

Under the above definition, defendants here could be deemed to have been acting as “media” insofar as they created content about a local business for broad online publication.

Defendants, of course, might not fit the mold of traditional “media,” as the majority seems to understand that term, such as major newspapers or television broadcasters. But the very fact that defendants fit the terms of a definition of “media,” but do not seem to fit the unexpressed terms of *850 the majority's definition of “media,” highlights the difficulty and ambiguity in clearly distinguishing between media and nonmedia, particularly where user-generated internet content is involved.

Without an explanation of how to distinguish between media and nonmedia, the remainder of the opinion relying on that distinction is unpersuasive. Various federal and state courts have rejected that distinction, and I find Obsidian Finance’s explanation of why to do so persuasive. As a result, I conclude that that distinction should not hold in defamation cases.

If the Gertz rule were applied here, plaintiff would have to allege and prove at least negligence on defendants’ part to be able to recover for defamation at all, and he would have to show actual malice to recover for his defamation per se claim, which may proceed “without proof of specific harm.” Brown v. Gatti, 341 Or. 452, 458, 145 P.3d 130 (2006); see Gertz, 418 U.S. at 350, 94 S.Ct. 2997 (“In short, the private defamation plaintiff who establishes liability under a less demanding standard than that stated by New York Times[, i.e., actual malice,] may recover only such damages as are sufficient to compensate him for actual injury.”). The majority asserts that applying that actual malice standard “may make little practical difference under the circumstances of this case,” because “Plaintiff is correct that he could make the required showing of actual malice to overcome summary judgment.”

369 Or at 836. I disagree that requiring that showing would be of “little practical difference” to defendants. A heightened burden of proof for plaintiff could change whether defendants are liable for their alleged defamation—which is why defendants raised the actual malice argument. I agree, however, that plaintiff has raised a triable issue of fact as to whether he may be able to make what would be the required showing of actual malice in this case. Thus, although I disagree with the majority's analysis on this point, I concur in the judgment.

The second type of constitutional protection for speech that applies in defamation cases is the requirement that an allegedly defamatory statement be provably false *851 to be actionable. That requirement stems from Supreme Court decisions that were recently relied on by this court in Neumann. 358 Or. at 713-16, 369 P.3d 1117 (citing Philadelphia Newspapers, Inc. v. Hepps, 475 U.S. 767, 106 S.Ct. 1558, 89 L.Ed.2d 783 (1986); Milkovich v. Lorain Journal Co., 497 U.S. 1, 110 S.Ct. 2695, 111 L.Ed.2d 1 (1990)). In Neumann, we applied the requirement that statements be provably false to statements involving matters of public concern made by a nonmedia defendant. Id. at 722, 369 P.3d 1117 (holding that the defendant's online review was “an expression of opinion on matters of public concern that is protected under the First Amendment”). Neumann also adopted a test **431 for whether a statement is provably false that was articulated by the Ninth Circuit in Unelko Corp. v. Rooney, 912 F.2d 1049, 1053 (9th Cir. 1990), cert. den., 499 U.S. 961, 111 S.Ct. 1586, 113 L.Ed.2d 650 (1991). 358 Or. at 718, 369 P.3d 1117. I agree with the majority's ultimate conclusion that Neumann controls this case in part and that some, but not all, of defendant's statements are actionable under the Unelko test. I disagree, however, with other aspects of the majority's discussion of Neumann.

The majority upholds Neumann begrudgingly, and seemingly only because plaintiff failed to ask us to overrule it. See 369 Or at 822 (“We conclude that Neumann controls in the absence of plaintiff's request that we overrule it, although we have doubts about its approach ***.”). As part of that discussion, the majority explains at length some effects of the internet on modern communication and the extent to which the advent and development of the internet has changed, or not changed, defamation law in Oregon. 369 Or at 827-28. The majority also questions whether Neumann properly considered whether a media/nonmedia distinction might affect the analysis in that case, and it casts doubt on Neumann’s conclusion that the online review in that case was on a matter of public concern. 369 Or at 823-24, 824, 827-28.

But because the majority upholds Neumann and applies it to this case, the extended critique of that case's reasoning does not bear on the result here and is dicta. Whether online reviews should be automatically considered matters of public concern, or whether the internet can “breathe *852 constitutional importance” into a potentially defamatory statement, are questions that are neither presented by this case nor relevant to its outcome. 369 Or at 827. I would not express

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an opinion on matters so far removed from the situation at hand.

Nevertheless, in response to the majority's discussion, I would observe that Neumann is far more defensible than the majority suggests. In Neumann, this court “readily conclude[d]” that the statements in that case involved matters of public concern.

358 Or. at 720, 369 P.3d 1117. That ready conclusion was not due to a lack of consideration by this court, but rather due to the clarity with which the court understood that the character and reputation of a local business can be of great importance to members of the surrounding community, regardless of whether they are consumers of that business's services or products. Indeed, it appears that it did not even occur to the litigants in that case to argue otherwise. In Unelko, the Ninth Circuit similarly held that a statement made on 60 Minutes that the product Rain-X “didn't work” involved a matter of public concern, because the statement was “of general interest and was made available to the general public,” and because “protection of statements about product effectiveness will ‘ensure that debate on public issues will be uninhibited, robust and wide-open.’ ” 912 F.2d at 1056 (quoting Dun & Bradstreet, 472 U.S. at 762, 105 S.Ct. 2939 (internal quotation marks and brackets omitted)). There should be no doubt that the “content, form, and context” of the statements here indicate that they too involve matters of public concern.

Dun & Bradstreet, 472 U.S. at 761, 105 S.Ct. 2939 (indicating that “ ‘whether speech addresses a matter of public concern must be determined by the expression's content, form, and context as revealed by the whole record’ ” (quoting Connick v. Myers, 461 U.S. 138, 148, 103 S.Ct. 1684, 75 L.Ed.2d 708 (1983) (alterations and brackets omitted))).

The majority also casts doubt on Neumann’s holding that the First Amendment's provably-false rule should apply to nonmedia defendants. See 369 Or at 824 (“In short, the Neumann court did not note that whether the defendant is media or not could affect the analysis, even to reject *853 the idea.”). As the majority recognizes, that question has not been decided by the Supreme Court, but, instead, has been expressly reserved. 369 Or at 817; id. (citing Hepps, 475 U.S. at 779 n. 4, 106 S.Ct. 1558; Milkovich, 497 U.S. at 20 n.

6, 110 S.Ct. 2695). But even if Neumann had not resolved the issue for purposes of Oregon law, which it did, this court should have come to the same conclusion in this case and applied the provably-false rule to defendants without regard to their media or nonmedia status. In the absence of such a rule, Oregonians who post online reviews of businesses **432 would have to be prepared to defend the truth of their

statements in court or face liability for defamation—even where their statements are not susceptible to being proven either truth or false.

The same arguments that weigh in favor of rejecting the media/nonmedia distinction in the Gertz context, articulated above, also support Neumann’s rejection of that distinction.

The majority offers no example of another state that allows its citizens to be sued for defamation on matters of public concern where the statement at issue does not satisfy Milkovich’s provably-false standard, and several state courts have taken the opposite approach and agree with Neumann.

See, e.g., Dodson v. Dicker, 306 Ark. 108, 111, 812 S.W.2d 97 (1991) (applying Milkovich in a case with a nonmedia defendant); Kahn v. Bower, 232 Cal.App.3d 1599, 1606-07, 284 Cal.Rptr. 244, 248-49 (1991) (same).

Because Neumann is settled law, no party challenges its underlying reasoning (whereas they do challenge the media/ nonmedia distinction in Harley-Davidson, Wheeler, and Adams), and its First Amendment conclusions remain sound, I would not cast doubt on Neumann’s reasoning and its application in this case.

In sum, the majority adheres to a distinction between media and nonmedia defendants, for purposes of defamation claims by private figures, that has not been embraced by the Supreme Court and that has been rejected by multiple federal and state courts, numerous scholars, and the Restatement. Although the majority is correct that the Court has not yet applied Gertz to nonmedia defendants, the Court has also consistently rejected the media/nonmedia distinction, and, in its own words, refused to offer the media *854 “any constitutional privilege beyond that of other speakers.” Citizens United, 558 U.S. at 352, 130 S.Ct. 876. I would not continue to hold that Gertz applies only to media defendants in the absence of a workable method for distinguishing between media and nonmedia, and the majority makes no attempt to provide one.

As to Neumann, I would not cast doubt on a case that goes unchallenged by the parties, and I would not express an opinion on matters unrelated to the facts and legal arguments presented by this case.

For the foregoing reasons, I disagree with parts of the majority's First Amendment analysis and concur in the judgment.

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Garrett, J., joins in this concurring opinion.

FLYNN, J., concurring.

I agree with the concurrence that Neumann is not only controlling but correct, and that the critique of that case's reasoning in the majority opinion is dicta. And I am persuaded by the argument in the concurrence that a media/nonmedia distinction is in tension with the Supreme Court's more recent First Amendment decisions. But we are not writing on a

clean slate. Rather, we are being asked to overrule our own controlling precedent on the strength of predictions about how the Supreme Court ultimately will rule on the question of whether the First Amendment requires proof of fault in cases like this. In my opinion, it is both premature and potentially unnecessary to declare our precedent overruled.

All Citations 369 Or. 806, 512 P.3d 403

Footnotes *

On appeal from Jackson County Circuit Court, Dan Bunch, Judge. 306 Or. App. 325, 473 P.3d 1094 (2020).

**

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

1

Defendants Wright and Artistic Piano make no arguments independent of each other. This opinion will distinguish between them only when needed to clarify the facts.

2

The witnesses remember the exact wording of the Steinway comment differently. Plaintiff and Norling remembered the review stating that plaintiff's salesman said that the store “can sell new Steinway pianos”; Wright recalled the wording as “is a Steinway dealer.” The former comment would indicate that plaintiff is capable of selling while the latter would indicate that the plaintiff is allowed to sell because he had a dealership agreement with Steinway, authorizing him to sell new Steinway pianos. The significance of this difference, plaintiff explained, is that if the salesman said that the store “can sell new Steinway pianos,” that would be true, but if the salesman said that the store “is a Steinway dealer,” that would be false.

3

The action also included an unfair trade practices claim, which is not at issue on review.

4

Recently, Justice Thomas has called into question whether, in New York Times and the cases that followed, the “constitutional libel rules” adopted by the Court by virtue of the First and Fourteenth Amendments properly displaced the common law of libel developed by the states. McKee v. Cosby, ––– U.S. ––––, 139 S.Ct. 675, 678-82, 203 L.Ed.2d 247 (2019) (Thomas, J., concurring in denial of certiorari). In his view, the states “are perfectly capable of striking an acceptable balance between encouraging robust public discourse and providing a meaningful remedy for reputational harm.” Id. at 682.

5

Dun & Bradstreet was a plurality decision, but five members of the Court (three signing on to the lead opinion and Justices Burger and White concurring separately) agreed that the speech at issue was on a matter of private rather than public concern and saw that as dispositive in distinguishing the case from Gertz. Justices Burger and White wrote separately to express disagreement with the trend in the case law of “constitutionalizing the entire law of libel and slander” but agreed that the lead opinion was correct given that case law. Id. at 764, 105 S.Ct. 2939 (Burger, J., concurring), 766, 774 (White, J., concurring).

6

Our colleagues criticize us for not announcing a test to distinguish media from nonmedia. 369 Or at 842 (Balmer, J., concurring). The rationale for not offering a test follows from the discussion above: The facts of this case do not lend themselves to the nuances that we would need to consider to craft one, and amici’s hypotheticals are no substitute. We have no difficulty applying the distinction to the facts of this case: Wright

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Lowell v. Wright, 369 Or. 806 (2022) 512 P.3d 403

and Artistic Piano are clearly not media defendants, and therefore the plaintiff need not show actual malice to obtain relief.

7

It is unclear why the Court relieved all defendants of liability. See id. at 525 n. 8, 121 S.Ct. 1753 (stating only that “we draw no distinction between the media respondents and Yocum[, the individual who gave the recording to the media]. See, e.g., New York Times Co. v. Sullivan, 376 U.S. 254, 265–266, 84 S.Ct. 710, 11 L.Ed.2d 686 (1964); First Nat. Bank of Boston v. Bellotti, 435 U.S. 765, 777, 98 S.Ct. 1407, 55 L.Ed.2d 707 (1978)”). But, as in New York Times and the Court's other cases involving publication by the press of information it obtains on matters of public concern, it is apparent that the Court was concerned with freedom of the press. That concern, rather than an interest in treating all defendants alike in defamation and other cases with a First Amendment dimension, would be a likely basis for the Court's treatment of Yocum.

End of Document

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23

Lowell v. Medford School District 549C, 370 Or. 79 (2022) 515 P.3d 359, 407 Ed. Law Rep. 291

370 Or. 79 Supreme Court of Oregon, En Banc.

Thomas LOWELL, Petitioner on Review, v.

MEDFORD SCHOOL DISTRICT 549C, Respondent on Review, and Stephanie Malone et al., Defendants.

(CC 18CV19782) (SC S068891) | Argued and submitted March 8, 2022 | July 28, 2022 Synopsis Background: Piano tuner, who provided piano tuning services to school district and assisted in producing concerts performed in district facilities, brought defamation action against school theater technician, technician's supervisor, and district support services assistant based on their alleged statements that he had been intoxicated on school district premises. The Circuit Court, Jackson County, David G. Hoppe, J., allowed the substitution of school district for the individual defendants based on allegations that the individual defendants were acting in the course and scope of their employment when they made the statements at issue, and the Court entered summary judgment for district. Tuner appealed.

The Court of Appeals, 313 Or.App. 599, 497 P.3d 797, affirmed. Plaintiff's petition for review was allowed.

The Supreme Court, Walters, C.J., held that district was not entitled affirmative defense of absolute privilege.

Reversed and remanded.

Procedural Posture(s): Petition for Discretionary Review; On Appeal; Motion for Summary Judgment. **360 On review from the Court of Appeals. * (CA A173221)

Attorneys and Law Firms Linda K. Williams, Linda K. Williams PC, Portland, argued the cause and filed the briefs for petitioner on review.

Rebekah R. Jacobson, Garrett Hemann Robertson PC, Salem, argued the cause and filed the brief for respondent on review.

Opinion WALTERS, C. J. *81 In this defamation case, we hold that defendant public employer does not have an affirmative defense of absolute privilege that entitles it to summary judgment.

I. BACKGROUND Because the trial court granted defendant's motion for summary judgment, we recount the facts in the light most favorable to plaintiff, the nonmoving party. ORCP 47 C. Plaintiff provided piano tuning services to defendant Medford School District and assisted in producing concerts performed in defendant's facilities. While providing production assistance for a particular concert, plaintiff noticed an echo near the stage. He complained to the school theater technician, Malone, and, later, feeling that Malone had not adequately responded, he followed up with her. Malone reported to her supervisor, Bales, that plaintiff appeared to be intoxicated, that he “smelled of alcohol,” and that “this was not the first time.” Bales repeated Malone's statements to Armstrong, a district support services assistant. Armstrong sent emails summarizing Malone's statements to three other district employees, including the supervisor of purchasing.

Armstrong expressed concerns that appearing on district property under the influence of alcohol violated district policy and the terms of plaintiff's piano tuning contract.

Plaintiff brought this defamation action against Malone, Bales, and Armstrong, alleging that the statements that they had made were defamatory. Those three individuals are employees of defendant, a public entity, and the court substituted defendant for the individual defendants. ORS 30.265(3).

Defendant answered, asserting multiple affirmative defenses, including the one at issue here, viz., that public employees are entitled to an absolute privilege for defamatory statements

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made in the course and scope of their employment. 1 Defendant alleged that, because its employees *82 were entitled to that absolute privilege, it too was immune from liability. See ORS 30.265(5) (public bodies are **361 immune from liability for any claim arising from actions of officers, employees, or agents who are immune).

Defendant moved for summary judgment on the absolute privilege defense, and plaintiff filed a corresponding motion for partial summary judgment, arguing that defendant was not entitled to immunity because the accused employees were “low level employees performing ministerial tasks,” who were not entitled to an absolute privilege. The trial court agreed with defendant that “[t]he alleged defamatory statements were made by public officials in the course of their official duties and they were entitled to absolute privilege.”

Plaintiff appealed, and the Court of Appeals affirmed, relying on its prior interpretation of this court's decision in Shearer v. Lambert, 274 Or. 449, 547 P.2d 98 (1976). Lowell v.

Medford School Dist. 549C, 313 Or App 599, 602-05, 497 P.3d 797 (2021). In a series of cases, the latest of which was Christianson v. State of Oregon, 239 Or App 451, 459, 244 P.3d 904 (2010), the Court of Appeals had interpreted Shearer as holding that “an employee of an executive agency has an absolute privilege to make defamatory statements in the exercise of official duties, even if the statements were malicious and the person who made the statements is a lowerlevel employee.”

We allowed plaintiff's petition for review to take our own look at Shearer and to consider whether the absolute privilege extends to all public employees, including defendant's employees, and, thereby, to defendant.

II. ANALYSIS In this court, the parties reprise the arguments that they made below. Defendant contends that the Court of Appeals was correct in its interpretation of Shearer and that this court already has decided that the absolute privilege extends to all public employees acting within the *83 course and scope of their employment. Defendant argues that we must adhere to that interpretation of Shearer, or, alternatively, that we should endorse that development in the Court of Appeals’ case law as the correct understanding of the absolute privilege.

Defendant does not argue that, if the absolute privilege extends only to “officers,” then the individual employees

in this case are officers entitled to claim it. Plaintiff reads Shearer as extending the absolute privilege only to state “officers” and argues that defendant's employees do not fit that description. Plaintiff urges that we not further extend the absolute privilege to all public employees. 2 Because the parties’ arguments focus on this court's decision in Shearer, we describe it and the common-law basis for our decision in that case in some detail. In Shearer, the plaintiff, an assistant professor at Oregon State University, brought a defamation action against plaintiff's department head for sending a letter to other faculty members describing alleged conversations between the department head and various students. 274 Or. at 451, 547 P.2d 98. The department head asserted absolute privilege as a defense. Id. at 452, 547 P.2d 98.

This court began its analysis with the following description of the underpinnings of the defense: “Underlying the rule of absolute privilege is the assumption that to permit suits against public officers would inhibit courageous and independent official action, and the further assumption that the public interest thus served outweighs the interest of persons damaged by the willful and malicious conduct of public officers.”

Id. The court remarked, without citation, that it had “frequently been called upon to choose between those competing interests in cases involving the conduct of judicial, legislative and executive officers in various levels of authority in *84 each of these branches of **362 government.” Id. at 452-53, 547 P.2d 98. The court then continued: “In rendering our decisions in these cases we have not overlooked the arguments advanced by the critics of the doctrine of absolute privilege. However, although there is no data which indicates one way or the other whether the recognition of an absolute privilege is necessary to assure fearless action on the part of public officers, we think that the privilege is necessary and therefore, if provision is to be made to compensate persons harmed by official action, it will have to be through some other kind of remedy which still preserves the privilege.”

Id. at 453 (footnote omitted).

The court then set out the issue as it saw it: “the applicability of the privilege to various types of governmental officers at various levels of authority or importance.” Id. at 454,

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547 P.2d 98. The court noted that it had “extended the absolute privilege to judicial and quasi-judicial officers at all levels” and recently held “that the privilege was applicable to subordinate legislative bodies[.]” Id. It then observed that the cases in other jurisdictions were in conflict and that some other jurisdictions had limited the executive absolute privilege to highly ranked government officials, e.g., the state's governor or attorney general, while others had extended the privilege to “inferior state officers no matter how low their rank or standing.” Id. at 454, 547 P.2d 98. The court reasoned: “Although we would prefer to confine the absolute privilege to its narrowest possible application, we feel compelled to adopt the latter view because, starting with the premise that the privilege is designed to free public officers from intimidation in the discharge of their duties, we are unable to explain why this policy would not apply equally to inferior as well as to high-ranking officers.”

Id. Having set out its reasoning, the court then stated its holding as follows: “We hold, therefore, that an absolute privilege exists in an action brought against the head of a department of a state university.” Id. The court also included, just before its holding, a footnote that reads: *85 “The privilege does not apply, however, where the tort arises out of the exercise of a ‘ministerial’ function.

The difficulty of drawing the line between ‘ministerial’ and ‘discretionary’ functions again suggests the need for legislation which would provide relief under a principle which would render the distinction unnecessary.”

Id. at 454 n 9. Finally, the court disposed of the case, determining that, although the department head could claim absolute privilege, summary judgment was inappropriate because factual questions remained. The defendant was entitled to absolute privilege only if his defamatory statements were made in the performance of his duties, and, on that issue, the facts were contested. Id. at 455, 547 P.2d 98.

Both parties take succor from the court's opinion. Defendant contends that the court adopted the broad application of the absolute privilege available in other states and made it applicable to all public employees, no matter the level of position they hold. Plaintiff concedes that the court extended the absolute privilege beyond the very highest officers in the

state but contends that its holding was limited to the facts presented in that case.

To better understand Shearer’s reach, we find it helpful to review the state of the law of defamation and the defense of absolute privilege in 1976 when the court issued its opinion in that case.

A. Common-Law Origins and Development in the State Courts Defamation is a common-law claim that was recognized in England and, with its affirmative defenses, ported over to this country around the time of its founding. See generally, Van Vechten Veeder, Absolute Immunity in Defamation Judicial Proceedings, 9 Colum L Rev 463 (1909). The absolute privilege in legislative proceedings, i.e., the rule that members of Parliament could not be sued for remarks that they made on the Parliamentary floor, had existed in English common law since at least 1512. Van Vechten Veeder, Absolute Immunity in **363 Defamation Legislative and Executive Proceedings, 10 Colum L Rev 131, 132 (1910). In the United States, the Founders similarly protected members of *86 Congress from liability for statements made on the House or Senate floor. US Const Art. I, § 6, cl 1. The absolute privilege in judicial proceedings, i.e., the rule that witnesses, judges, parties, and parties’ counsel were protected from liability for statements that they made during judicial proceedings, existed in English common law since the sixteenth century. Veeder, 9 Colum L Rev at 474. In the United States, it appears that state courts imported the English common-law privilege from a very early period and applied it mostly as English courts had. See id. at 475 (citing state cases from the mid-nineteenth century applying the absolute privilege to jurors).

An absolute privilege for high-ranking executive officers, such as the United States Postmaster General, seems to have come to prominence towards the end of the nine-teenth century in both England and the United States. Spalding v.

Vilas, 161 U.S. 483, 16 S Ct 631, 40 L Ed 780 (1896); see also Chatterton v. Secretary of State for India [1895] 2 QB 189 (statement made by the Secretary of State for India to another executive official was absolutely privileged); Veeder, 10 Colum L Rev at 140 (citing cases on the executive absolute privilege beginning in the 1870s). At that time, the absolute privilege extended only to very high-ranking government officials, i.e., cabinet-level government actors. A leading scholar in 1910 put the then-current rule this way: “[Executive absolute privilege] is confined to official communications from the heads of departments in which the head of the

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department speaks for the government or as its mouthpiece.

It has not been extended to inferior officers.” Id. at 141.

**364 immunity granted to employees in the judicial and legislative branches.”

Thus, the basis for the application of the absolute privilege developed differently based on the branch of government in which the communication occurred. When applied to speakers in the legislative and judicial branches, communication was protected when made in particular proceedings, not when made by persons serving in particular positions. Thus, in judicial proceedings, communications by witnesses are protected, not because the witnesses are employees of the judicial branch, but because it is essential that they provide testimony in such proceedings. When speaking occurs *87 in proceedings or is necessary to proceedings, the thinking goes that all levels of speakers, from judges and legislators, to witnesses and complainants, should be entitled to an absolute privilege. It is the value and importance of the proceeding itself that the absolute privilege protects. See Dan B. Dobbs, Paul T. Hayden, & Ellen M. Bublick, 3 The Law of Torts § 540, 244 (2d ed 2011) (explaining that “the privilege also covers witnesses or citizen participants at legislative hearings, in order to secure citizen participation in the political process that will more fully inform legislators” and that that is “supported when the proceeding has a formal character and procedural safeguards and when the witness is subpoenaed or gives testimony under oath” (footnote omitted)); Veeder, 9 Colum L Rev at 469 (explaining that “[i]t is essential to the ends of justice that all persons participating in judicial proceedings (to take a typical class for illustration) should enjoy freedom of speech in the discharge of their public duties or in pursuing their rights without fear of consequences”).

Accordingly, when applied to speech in the executive branch, the absolute privilege was confined to official communications from the heads of departments in which the head of the department spoke for the government or as its mouthpiece.

Communication in the executive branch does not necessarily occur in the same types of structured proceedings, and thus, its importance to effective governance is less apparent. As put in Dobbs, The Law of Torts § 541 at 244-45: “The executive branch, including police, administrators at all levels, and most other governmental employees, is quite different from the judicial and legislative branch.

Except in quasi-judicial proceedings where the absolute judicial privilege would apply, employees in the executive branch do not regularly operate in structured forums like the Congress or the judiciary; they are not often subject to institutional, professional, or even regular political constraints; and they seldom if ever have need of privileges not enjoyed by the citizens they are obliged to serve. *** Apart from statute, executive branch employees were not traditionally afforded the same broad and absolute

*88 Over time, most states retained that narrow conception of the executive branch privilege and applied it only to highranking government officers. However, a minority expanded the executive absolute privilege to apply to “lower-level” officials. In the year following Shearer, a leading treatise described the state of the law this way: “While there are a few state court decisions which appear to [apply the absolute privilege to] subordinate state officers, such courts in general have refused to accept the extension, and have recognized no absolute privilege on the part of such officers as superintendents of schools, mayors and aldermen, prosecuting attorneys and policemen, state investigators, and the like. Unless such an executive officer can claim immunity on the basis of a quasi-judicial or legislative function, he is held to be subject to qualified privilege only.”

W. Page Keeton, Dan B. Dobbs, Robert E. Keeton, & David G. Owen, Prosser and Keeton on the Law of Torts, § 114, 822 (5th ed 1984) (footnotes omitted); see also, Restatement (Second) of Torts, § 591 comment c (1977) (“A good number of the States have gone further, and have extended the absolute privilege to state officers of various ranks below that of cabinet level. The greater number of the state courts have not made the extension *** and some have expressly confined the absolute privilege to superior officers of the States.”).

B. The Absolute Privilege in Oregon Before Shearer In Oregon, the absolute privilege developed along a similar track. The absolute privilege for state legislators is enshrined in the state constitution. Article IV, section 9, of the Oregon Constitution provides, in relevant part, “Nor shall a member for words uttered in debate in either house, be questioned in any other place.”

The absolute privilege in judicial proceedings protects statements made by judges in such proceedings. See Irwin v. Ashurst, 158 Or. 61, 66, 74 P.2d 1127 (1938) (explaining that “[i]t is well settled in England and in this country, on the

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Lowell v. Medford School District 549C, 370 Or. 79 (2022) 515 P.3d 359, 407 Ed. Law Rep. 291

ground of public policy, that a judge has absolute immunity from liability in an action for defamatory words published in the course of judicial proceedings”). And *89 witnesses testifying in such proceedings also are entitled to an absolute privilege. See Cooper v. Phipps, 24 Or. 357, 358, 366, 33 P. 985 (1893) (holding that absolute privilege protected the testimony of a witness made during a divorce trial).

In 1955, this court considered whether to make the absolute privilege in judicial proceedings applicable outside the courtroom itself. In Grubb v. Johnson et al., 205 Or. 624, 626-27, 289 P.2d 1067 (1955), the plaintiff sued his former employer for statements that the company had made in a letter that it had sent to a state agency instructing the agency to revoke the plaintiff's sales license because the plaintiff had embezzled money from the company. The company asserted the absolute privilege, arguing that the letter was part of a quasi-judicial proceeding. Id. at 640, 289 P.2d 1067. The court disagreed, reasoning that the revocation process was not sufficiently like a judicial proceeding to make the application of the absolute privilege appropriate. The revocation process did not permit the agency to exercise discretion; revocation was automatic and mandatory upon receipt of the letter. Id. at 640-41, 289 P.2d 1067.

The court reached a different conclusion four years later in Ramstead v. Morgan, 219 Or. 383, 401, 347 P.2d 594 (1959).

There, the court determined that complaints about a lawyer in a letter sent to the Oregon State Bar were protected by a “quasi-judicial” absolute privilege. Id. at 396, 347 P.2d 594. The court reasoned that extension of the privilege was necessary to protect the public and explained that those who might lack the resources necessary to perfectly present their grievances should not have to face the threat of liability for making complaints about lawyer misconduct. Id. at 400-01, 347 P.2d 594. **365 Accord Moore v. West Lawn Mem'l Park, 266 Or. 244, 250-51, 512 P.2d 1344 (1973) (absolute privilege applied to letter written to the State Board of Funeral Directors and Embalmers with quasi-judicial function as a licensing body; Grubb did not control because the board had discretion about whether to revoke the license).

In 1975, this court extended the absolute privilege in legislative proceedings to proceedings in addition to those conducted on the floor of the House and Senate. In *90 Noble v. Ternyik, 273 Or. 39, 539 P.2d 658 (1975), the court held that the absolute privilege applied to a statement that a member of a port commission made in a commission meeting because:

“Uncompensated citizens, serving at least in part to fulfill their civic responsibility, comprise the vast bulk of numerous legislative bodies in Oregon. Port commissions, city councils, school boards, and special service districts are some of these bodies. Oregon prides itself on its citizen participation. These bodies make economic, social, educational, and other important decisions. This system will function only if capable people are willing to serve on these bodies.

“We are of the opinion that a substantial number of capable people would be reluctant to serve if their statements, made in the course of their legislative duties, were only conditionally privileged ***.

“We are also of the opinion that persons who would be willing to serve would be hesitant to bring information to the attention of their legislative bodies if the publication of this information were only conditionally privileged.”

Id. at 43-44, 539 P.2d 658.

Thus, when Shearer reached this court in 1976, the state of the law of absolute privilege in Oregon, with respect to governmental proceedings or actors, was that there were three types of absolute privilege: (1) legislative absolute privilege, (2) judicial absolute privilege, and (3) absolute privilege for “other acts of state,” i.e., executive absolute privilege. Grubb, 205 Or. at 631, 289 P.2d 1067. As the court said in Grubb: “The class of absolutely privileged communications is narrow and is practically limited to legislative and judicial proceedings and other acts of the state, including, it is said, communications made in the discharge of a duty under express authority of law, by or to heads of executive departments of state, and matters involving military affairs.”

Id. (internal quotation marks and citation omitted).

Legislative and judicial proceedings included local proceedings and quasi-judicial proceedings. The court had extended the absolute privilege to communications made in such *91 proceedings to protect the public and

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Lowell v. Medford School District 549C, 370 Or. 79 (2022) 515 P.3d 359, 407 Ed. Law Rep. 291

ensure essential participation and the provision of important information.

waiving sovereign immunity. At the time that Shearer was decided, the OTCA provided: “Every public body is immune from liability for:

C. Shearer’s Reach With that understanding of the law at the time of Shearer, we return to its holding and consider whether, as defendant argues, the court held that all public employees are entitled to claim the absolute privilege as long as they operate within the course and scope of their duties. As noted, the court started with the premise that the privilege is designed to free public officers from intimidation in the discharge of their duties and noted that it had “extended the absolute privilege to judicial and quasi-judicial officers at all levels.” Shearer, 274 Or. at 454, 547 P.2d 98. The court then stated that it was unable to explain why that policy would not apply equally to inferior as well as to high-ranking officers, and stated its holding—that the defendant, a university department head, was entitled to claim the absolute privilege. Id. For the following reasons, we conclude that neither that reasoning nor that holding require us to agree with defendant that, under Shearer, all public employees have an absolute privilege to make defamatory statements in the course and scope of their duties, even when they do so with malice, ill will, or spite.

First, in Shearer, the court did not state its holding in those terms. After reasoning as described, the court expressly stated its holding as follows: “We hold, therefore, that an absolute privilege exists in an action brought **366 against the head of a department of a state university.” Id. Second, the court did not expressly hold that the absolute privilege is available to “inferior officers” or define that term.

Even if Shearer can be understood to extend the privilege to state executive “officers,” it cannot be understood to extend the privilege to all public employees.

Third, the court inserted a footnote, quoted above, that made clear that it did not intend to extend the absolute privilege to all public employees acting within the course of their duties. The footnote specifies that the absolute privilege is not intended to apply to actors who perform *92 “ministerial” tasks; it applies only to those who perform “discretionary” functions, and only when they are performing such functions.

Id. at 454 n 9, 547 P.2d 98. 3 In using those terms, the court used wording found in the Oregon Tort Claims Act (OTCA),

“* * * * *

“(d) Any claim based upon the performance of or the failure to exercise or perform a discretionary function or duty, whether or not the discretion is abused.”

Former ORS 30.265(2)(d) (1975) 4 (emphasis added). The court also had recently decided Smith v. Cooper, 256 Or. 485, 475 P.2d 78 (1970). In Smith, the court had considered whether the doctrine of sovereign immunity protected the State Highway Commission from an action brought by the plaintiff alleging negligence in highway planning. The court devoted a substantial part of the opinion to the question of whether designing the highway was a ministerial function (in which case sovereign immunity would not apply) or a discretionary one (in which case sovereign immunity would apply). Id. at 495-512, 475 P.2d 78. Thus, the “ministerial” and “discretionary” distinction would have been a familiar concept for the Shearer court to draw on. Significantly, however, we do not think that the court intended to import the law of sovereign immunity generally into the absolute privilege analysis. See Noble, 273 Or. at 41, 539 P.2d 658 (explaining that although “[c]ourts have intermingled the terminology of privilege, a part of the law of defamation, and immunity[,] * * * [t]here is at least a theoretical difference”).

A better understanding of the footnote is that the court was using a familiar construct to articulate its intent to adhere to the purpose that *93 underlies both the common-law defense of absolute privilege and the legislature's limited waiver of sovereign immunity: that those making important governmental decisions requiring the exercise of judgment be assured that they can do so “fearlessly.” The court's footnote made clear that it did not intend to extend the absolute privilege to all public employees without bounds.

Finally, the court in Shearer plainly did not view its earlier extension of the absolute privilege to proceedings broader than those in the Capitol and the courts, as requiring it to extend that privilege to all who serve in legislative, judicial, and executive positions. In Shearer, the court noted that

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it had “frequently been called upon” to choose between competing interests “in cases involving the conduct of judicial, legislative and executive officers in various levels of authority in each of these branches of government.” 274 Or. at 452-53, 547 P.2d 98. The court did not cite cases for that proposition, however, and although we have looked, we have been unable to find cases before Shearer that meet that description, particularly for the executive branch of government. As discussed, the court's earlier cases extended the absolute privilege to a broader range of proceedings; those cases did not extend the absolute privilege in defamation claims to communications by officers in a broader range of positions. **367 And, with respect to the executive branch, we are not aware of earlier cases in which the court discussed the application of the privilege in the executive branch in any detail.

For those reasons, we read Shearer to stand for the proposition that the absolute privilege applies when the public's interest in functioning government is so great that it outweighs an individual's interest in redress for reputational harm, and to hold that, in the case of a university department head, the public interest is paramount. We reject defendant's argument that Shearer compels us to decide that the absolute privilege defense to a defamation claim extends to all public employees, including defendant's employees here, as long as they act within the course and scope of their employment.

Defendant also argues that, even if Shearer does not compel us to do so, we should accept an approach that *94 makes the absolute privilege available to all public employees, reminding us that, to claim that privilege, employees must establish that they are acting within the course and scope of their duties. Defendant submits that that require-ment makes the defense sufficiently narrow, providing both adequate redress to plaintiffs and protection from undue harassment to public employees. We reject that argument.

Defendant is correct that this court conceives of the absolute privilege as narrow in scope. Since Shearer, this court has maintained, as it stated in Grubb, that the absolute privilege is “narrow” and applies in “only a handful of situations.”

See Wallulis v. Dymowski, 323 Or. 337, 348, 918 P.2d 755 (1996) (“Oregon has recognized only a handful of situations in which defamatory statements are absolutely privileged.”); DeLong v. Yu Enterprises, Inc., 334 Or. 166, 171, 47 P.3d 8 (2002) (“Historically, this court has recognized the application of an absolute privilege for defamatory statements in very limited circumstances.”). Defendant is incorrect,

however, in urging that that privilege can be extended to all public employees who make defamatory statements in the course of performing their duties, including those who do so with malice, without upsetting the balance of competing interests on which the absolute privilege rests. Protecting public employees from harassment is not the policy end for which the absolute privilege is designed. Protecting public employees, is, instead, a means to ensure good governance by fearless officials. As New York state's highest court put it when it refused to broaden the applicability of the privilege: “[T]he immunity is intended for the welfare of the public and not for governmental employees.” Stukuls v. State, 42 NY 272, 278, 366 N.E.2d 829, 833, 397 N.Y.S.2d 740, 744 (1977).

This court has recognized an absolute privilege as an affirmative defense to defamation claims, understanding that it might bar some meritorious claims; this court has done so, however, only when it deems the privilege essential to effective governance. We will not extend the absolute privilege when that purpose is not necessarily implicated. As the Kentucky Court of Appeals said in 1910, when it refused to extend the absolute privilege to a school superintendent: *95 “It would be a dangerous and vicious thing to license people to write and speak without any restraint. There are many evil-minded and recklessly disposed who would shelter if they could under the protection afforded by absolute privilege and give free bridle to tongue and pen to injure or destroy an enemy. It would place in the power of revengeful and unscrupulous persons the right to malign at will those who had incurred their displeasure, and allow the traducer to scatter without stint scandalous and defamatory matter about all who might come within the circle of his enmity.”

Tanner v. Stevenson, 138 Ky. 578, 585, 128 S.W. 878, 881 (1910). In reaching that conclusion, we, like other jurisdictions to consider the scope of the absolute privilege, emphasize that its remedy is potent: It protects a defendant not just from being held liable at the conclusion of a trial; it prevents a plaintiff from reaching a trial at all. Wallulis, 323 Or. at 347, 918 P.2d 755. Another common-law defense in defamation actions, a qualified privilege, is available for defendants who must defend the action, but who can defeat it if the plaintiff fails to establish that the defendant abused the privileged occasion. Id. at 348, 918 P.2d 755. Some state courts that **368 have been asked to extend an absolute privilege to lower-level executive branch speakers have decided that a qualified privilege is sufficiently protective.

See Bradford v. Mahan, 219 Kan. 450, 455, 548 P.2d 1223,

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1228-29 (1976) (refusing to extend absolute privilege to police officers and stating that “[t]he police should never act with malice or ill will against the citizens of this state without being called to account for their actions,” and “[a] qualified privilege will sufficiently insulate police officers and insure the vigorous enforcement of the law”); Stukuls, 42 NY at 278, 366 N.E.2d at 833, 397 N.Y.S.2d at 744 (concluding that qualified privilege would adequately protect lower-level officials because “to cloak public officers who do not have such a need with the privilege to wrongfully vilify others with impunity while their critics remain fully liable for their own tortious communications[ ] would tend to squelch criticism of government by its citizens while serving no sufficiently countervailing public purpose”).

In summary, we reject defendant's argument that we already have extended or should extend the absolute privilege to all

public employees acting within the course *96 and scope of their duties. As noted, defendant does not argue that it is entitled to the benefit of that defense because its employees are “officers” equivalent to the university department head in Shearer. Consequently, defendant was not entitled to claim the affirmative defense of absolute privilege, and the trial court erred in granting it summary judgment on that basis.

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.

All Citations 370 Or. 79, 515 P.3d 359, 407 Ed. Law Rep. 291

Footnotes *

On appeal from Jackson County Circuit Court, David G. Hoppe, Judge. 313 Or.App. 599, 497 P.3d 797 (2021).

1

In its answer, defendant also asserted a “qualified privilege”—as well as an “absolute privilege”—as an affirmative defense to plaintiff's defamation claims.

However, defendant's motion for summary judgment was predicated only on its claim of absolute privilege, and that is the only issue before us. We briefly discuss the differences between absolute and qualified privilege below.

2

The parties appear to assume that defendant is an executive agency and that its employees are employees of an executive agency. Plaintiff does not mount an argument that defendant school district is not a state agency or that its employees cannot be considered “executive branch officials.” Because we reject defendant's claim that all public employees are entitled to claim the absolute privilege, we need not consider whether officers of local entities are entitled to the privilege that executive branch officers, such as the department head in Shearer, can claim.

3

As noted above, the footnote reads:

“The privilege does not apply, however, where the tort arises out of the exercise of a ‘ministerial’ function. The difficulty of drawing the line between ‘ministerial’ and ‘discretionary’ functions again suggests the need for legislation which would provide relief under a principle which would render the distinction unnecessary.”

4

This statute has been amended several times since 1975, however, none of those amendments is material to our discussion here.

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8

Lowell v. Medford School District 549C, 370 Or. 79 (2022) 515 P.3d 359, 407 Ed. Law Rep. 291

End of Document

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State ex rel Rosenblum v. Living Essentials, LLC, --- P.3d ---- (2023) 371 Or. 23

371 Or. 23 Supreme Court of Oregon.

STATE EX REL Ellen F. ROSENBLUM, in her official capacity as Attorney General for the State of Oregon, Petitioner on Review, v.

LIVING ESSENTIALS, LLC, a Michigan limited liability company; and Innovation Ventures, LLC, a Michigan limited liability company, Respondents on Review.

(CC 14CV09149) (SC S068857) | Argued and Submitted May 5, 2022. | May 4, 2023 Synopsis Background: State brought action under Unlawful Trade Practices Act (UTPA) against defendant producers and sellers of energy drink, alleging that defendants made unlawful misrepresentations regarding effects of drink's non-caffeine ingredients and unlawfully misrepresented survey results to falsely imply that physicians recommended drink to patients.

Following bench trial, the Circuit Court, Multnomah County, Kelly Skye, J., entered judgment in favor of defendants and ruled that defendants were not entitled to attorney fees.

State appealed, and defendants cross-appealed. The Court of Appeals, 313 Or.App. 176, 497 P.3d 730, affirmed in part, reversed in part, and remanded. State petitioned for review.

Holdings: The Supreme Court, Garrett, J., held that: to violate UTPA provision that prohibits causing likelihood of confusion or misunderstanding as to product's source or sponsorship, unlawful practice need not be material to consumer's purchasing decision; to violate UTPA provision prohibiting misrepresentation of product's attributes, an unlawful practice need not be material to consumer's purchasing decision; UTPA provision prohibiting misrepresentations about a product's attributes was not facially invalid under free speech provision of Oregon Constitution;

determination of whether provisions violated Oregon Constitution as applied was premature; and provisions did not violate First Amendment.

Reversed and remanded.

Procedural Posture(s): On Appeal.

On review from the Court of Appeals. * (CA A163980) Attorneys and Law Firms 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 Benjamin Gutman, Solicitor General.

Michael J. Sandmire, Buchalter Ater Wynne, Portland, argued the cause and filed the brief for respondents on review. Also on the brief was Rachel C. Lee, Stoel Rives LLP, Portland.

Chris Mertens, Mertens Law, LLC, Portland, filed the brief for amicus curiae Oregon Consumer Justice.

Nadia H. Dahab, Sugerman Dahab, Portland, and John W. Stephens, Esler Stephens & Buckley, Portland, filed the brief for amicus curiae Oregon Trial Lawyers Association.

Paloma Sparks, Oregon Business & Industry, Salem, filed the brief for amicus curiae Oregon Business & Industry Association.

Before Flynn, Chief Justice, Duncan, Garrett, and DeHoog, Justices, and Balmer and Walters, Senior Judges, Justices pro tempore. ** Opinion GARRETT, J. **1

*25 This case arises under the Unlawful Trade

Practices Act (UTPA), ORS 646.605 to 646.656. 1 The UTPA sets out an extensive list of unlawful business practices that the legislature has deemed harmful to Oregon consumers, and it provides for public and private enforcement actions.

The Attorney General brought this action against defendants, alleging that they had made representations about their products that violated two different provisions of the UTPA. The trial court ruled for defendants, explaining that the

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State ex rel Rosenblum v. Living Essentials, LLC, --- P.3d ---- (2023) 371 Or. 23

relevant provisions of the UTPA required the state to prove that the misrepresentations were “material to consumer purchasing decisions,” and that the state had not done so.

The Court of Appeals affirmed that decision. State ex rel Rosenblum v. Living Essentials, LLC, 313 Or App 176, 497 P.3d 730 (2021). We allowed the state's petition for review to consider whether the lower courts correctly construed the statute. As explained below, we conclude, contrary to the trial court and the Court of Appeals, that the UTPA provisions at issue contain no “material to consumer purchasing decisions” requirement. We also reject defendants’ argument that, without such a requirement, the provisions facially violate the free speech provisions of the state and federal constitutions.

Accordingly, we reverse the decision of the Court of Appeals and remand to that court for further proceedings.

I. BACKGROUND A. The UTPA Generally We begin with a brief overview of the statute, including procedural requirements relevant to the issues on review. The UTPA is a comprehensive statute that protects consumers from unlawful trade practices. *26 State ex rel Redden v.

Discount Fabrics, 289 Or. 375, 382, 615 P.2d 1034 (1980).

The UTPA includes an extensive list of trade practices that are unlawful. ORS 646.607, ORS 646.608(1).

The UTPA is enforceable by private parties and by public prosecuting attorneys, including the Attorney General and local district attorneys. ORS 646.632 (public enforcement); ORS 646.638 (private civil actions); Discount Fabrics, 289 Or. at 384-86, 615 P.2d 1034 (discussing the differences in the elements to be proved and the burden of proof between the two types of actions). Public officials may bring an action in the name of the state to enjoin violations, seek restitution for individuals deprived of money or property, and seek civil penalties for willful violations of an injunction, voluntary compliance agreement, or the UTPA's listed practices. ORS 646.642; Discount Fabrics, 289 Or. at 382 n 6, 615 P.2d 1034.

In a public action, the prosecuting attorney must have probable cause to believe that a person “is engaging in, has engaged in, or is about to engage in” an unlawful trade practice. ORS 646.632(1). Before filing suit, the prosecuting attorney must provide notice to the person to be charged.

ORS 646.632(2). Notice must include the alleged unlawful practice and the relief sought. Id. After receiving notice, the person to be charged has 10 days to respond to the prosecuting

attorney with an “assurance of voluntary compliance” (AVC).

Id. The AVC must describe the actions, if any, that the person to be charged will take to ameliorate the alleged unlawful practice. Id. The AVC is not an admission of a violation.

Id. The prosecuting attorney, if satisfied with the AVC, can submit it to the court for approval and filing with the clerk of the court, if approved. Id. An AVC constitutes a judgment in favor of the state. Id. Once approved by and filed with the court, a violation of the AVC constitutes contempt of court.

ORS 646.632(4). **2 The prosecuting attorney may reject an AVC as unsatisfactory if the AVC “does not contain a promise to make restitution in specific amounts or through arbitration,” or if the AVC “does not contain any provision * * * which the prosecuting attorney reasonably believes to be necessary to ensure the continued cessation of the alleged unlawful trade practice, if such provision was included in a proposed assurance attached to the notice.” ORS 646.632(3). If the AVC is *27 rejected as unsatisfactory, the prosecuting attorney may initiate a civil action. See ORS 646.632 (providing that a prosecuting attorney may bring suit in the name of the state after complying with the notice and AVC requirements).

B. Historical Facts We take the following undisputed facts from the opinion of the Court of Appeals and from our own review of the record.

Defendants manufacture, market, and sell 5-hour ENERGY, a beverage sold at retail in two-ounce bottles throughout the United States. Defendants advertise 5-hour ENERGY to consumers, including in Oregon, through radio, television, internet, and print media. The drink is available in “Original,” “Extra-Strength,” and “Decaf” versions. The Original formula contains 200 milligrams of caffeine per bottle, Extra-Strength has 230 milligrams of caffeine, and Decaf has 6 milligrams of caffeine. Each version also contains a proprietary blend of noncaffeine ingredients, including Bvitamins, amino acids, and other ingredients.

This action concerns certain representations that defendants made in Oregon about the characteristics of 5-hour ENERGY. Advertisements stated that the noncaffeine ingredients in the Original and Extra-Strength formulas provide extra energy, alertness, and focus. Specifically, the advertisements stated that 5-hour ENERGY “contains a powerful blend of B-vitamins for energy, and amino acids for focus”; that it “is packed with B-vitamins for energy, and amino

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State ex rel Rosenblum v. Living Essentials, LLC, --- P.3d ---- (2023) 371 Or. 23

acids for a sharp, focused mind”; and that it “contains a healthy powerful blend of B-vitamins for energy, amino acids for focus and better mood, and enzymes to help you feel it fast.” Advertisements also stated that the Original and Extra-Strength formulas provide more energy than an equivalent amount of caffeine. Specifically, advertisements stated that 5-hour ENERGY products have “less caffeine than some Starbucks coffees, plus it has vitamins and nutrients.” Defendants advertised the Decaf formula as providing alertness and focus, attributing those benefits to the noncaffeine ingredients. Specifically, defendants’ website advertised the Decaf formula as “contain[ing] B-vitamins *28 for energy and amino acids for focus, plus Choline,” and stated that choline “is vital to the production of neurotransmitters in the brain that affect memory, intelligence and mood.” Throughout this opinion, we will refer to the foregoing representations regarding the noncaffeine ingredients as the “NCI representations.”

Defendants also ran an “Ask Your Doctor” advertising campaign, with statements that 5-hour ENERGY had “asked over 3,000 doctors” to review the product. Those advertisements claimed that “over 73%” of the doctors who reviewed the product would recommend it to their “healthy patients who use energy supplements.” Throughout this opinion, we will refer to those representations as the “Ask Your Doctor campaign.”

The state initiated this action, alleging, as relevant to the issues on review, that the foregoing representations violated two provisions of the UTPA, ORS 646.608(1)(b) and (1)(e). 2 Those provisions state, respectively, that “(1) A person engages in an unlawful practice if in the course of the person's business, vocation or occupation the person does any of the following: **3 “* * * * * “(b) Causes likelihood of confusion or of misunderstanding as to the source, sponsorship, approval, or certification of real estate, goods or services. “* * * * *

“(e) Represents that real estate, goods or services have sponsorship, approval, characteristics, ingredients, uses, benefits, quantities or qualities

that the real estate, goods or services do not have or that a person has a sponsorship, approval, status, qualification, affiliation or connection that the person does not have.”

ORS 646.608(1). The state alleged that defendants violated paragraph (1)(e) by representing that the noncaffeine ingredients in 5-hour ENERGY provide energy and alertness, when those ingredients do not have those effects. The state further alleged that defendants’ “Ask Your Doctor” campaign *29 violated both paragraphs (1)(b) and (1)(e) by falsely implying that doctors approved of 5-hour ENERGY. The state sought equitable relief and civil penalties.

Before filing suit, the state notified defendants of the alleged violations, as required by ORS 646.632(2), and defendants submitted an AVC in response. The AVC promised, generally, that defendants would comply with the UTPA, and, specifically, that defendants would refrain from making “material representations that are false or mislead consumers acting reasonably to their detriment.” The AVC also offered to pay $250,000 to the state to use “as allowed by law, including, but not limited to, restitution, consumer education, the Consumer Protection & Education Account established pursuant to ORS 180.095, or charitable purposes.” The state rejected the AVC and subsequently filed its complaint as allowed by ORS 646.632(1), alleging that the AVC was inadequate under ORS 646.632(3). The state took the position that the AVC was not satisfactory because it contained only a promise to refrain from “material” misrepresentations that “misled consumers acting reasonably to their detriment,” while, in the state's view, the relevant statutory provisions do not contain that qualification.

Following a bench trial, the trial court ruled in favor of defendants on all claims. In its written findings of fact and conclusions of law, the trial court listed the elements that the state needed to prove to succeed on its claim under ORS 646.608(1)(b) and (1)(e). One element, according to the trial court, of a paragraph (1)(b) claim for causing likelihood of confusion as to source, sponsorship, approval, or certification, was that the defendants’ conduct “caused confusion or misunderstanding that was material to consumer purchasing decisions.” Under paragraph (1)(e), the misrepresentation provision, the trial court stated that one required element was that defendants “made representations that were material to consumer purchasing decisions.”

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State ex rel Rosenblum v. Living Essentials, LLC, --- P.3d ---- (2023) 371 Or. 23

With respect to the state's paragraph (1)(e) claims based on the NCI representations, the trial court found that some of the representations were not inherently false and that other representations were nonactionable “puffery.” *30 It found that the nonpuffery representations “may imply falsely the effect of the specific [noncaffeine ingredients] in a bottle of [5-hour ENERGY] and the expected effect of five hours of energy,” but it did not make particularized findings of falsity because of its ruling on materiality. The trial court also found that, for all formulas, none of the NCI representations was “willful,” as required for the imposition of civil penalties. 3 The court then found that, for the Original and Extra-Strength formulas, none of the NCI representations “materially influence[d] consumer purchasing decisions.”

Because the trial court found that the state had failed to satisfy that materiality element for the Original and Extra Strength formulas, and the willfulness element for all three formulas, it ruled that the state had failed to establish that any NCI representation violated ORS 646.608(1)(e). **4 With respect to the state's paragraph (1)(b) and (1) (e) claims based on the “Ask Your Doctor” campaign, the trial court explained that there was “some evidence that the ads could be misleading,” but it ultimately found that the representations at issue were not substantively misleading or confusing, nor were they material to consumer purchasing decisions. Thus, the court ruled for defendants on those counts.

Defendants requested approximately $2 million in attorney fees under ORS 646.632(8), which provides for mandatory attorney fees if a defendant prevails and if the court finds that the AVC was satisfactory and had been submitted in good faith to the prosecuting attorney. The trial court denied that request in a supplemental judgment, finding that the AVC was not satisfactory because the state's interpretation of the UTPA in rejecting the AVC had been reasonable at the time the AVC was submitted. *31 C. The Appeal On appeal, the state raised seven assignments of error to the trial court's rulings on the merits. Among those assignments, the state argued that the trial court (1) erred by construing ORS 646.608(1)(b) and (1)(e) to include a materiality element; (2) applied the wrong legal standard for willfulness; (3) applied the wrong legal standard for a misrepresentation under paragraph (1)(e); and (4) applied

the wrong legal standard for a likelihood of confusion or misunderstanding under paragraph (1)(b). Defendants crossappealed the trial court's denial of attorney fees. The Court of Appeals affirmed the trial court's judgment on the merits and reversed the supplemental judgment denying attorney fees.

Living Essentials, LLC, 313 Or App at 218-19, 497 P.3d 730.

The Court of Appeals agreed with the trial court that “material to consumer purchasing decisions” is a required element of both ORS 646.608(1)(b) and (1)(e). As to paragraph (1)(b), the Court of Appeals interpreted the phrase “cause[s] likelihood of confusion or of misunderstanding” by consulting dictionary definitions of those words, then reasoning that, to meet that standard, “the unlawful conduct necessarily must be material to the consumer's decision to buy the product.” Id. at 187, 497 P.3d 730 (emphasis in original).

Turning to ORS 646.608(1)(e), the court interpreted the text to prohibit making misleading assertions “about various attributes that, by their nature, can have the potential to affect a purchasing decision,” but noted that the text “does not expressly say whether it is limited to attributes that actually do have that potential, or whether it reflects a legislative judgment that every misrepresented characteristic —regardless of how innocuous—has the potential to mislead and should constitute a violation of the UTPA.” Id. at 188, 497 P.3d 730 (emphases in original).

The Court of Appeals then consulted statutory context and legislative history, ultimately finding further support for the conclusion that paragraphs (1)(b) and (1)(e) both contain an implicit element of materiality. The court noted that the UTPA regulates “trade” and “commerce,” which are defined as “directly or indirectly affecting the people of this *32 state,” a qualifier that the court took to indicate that “the acts to be remedied as unlawful trade practices are ones that have affected consumers—in other words, ones that materially bear on consumer purchasing choices.” Id. at 188-89, 497 P.3d 730.

As to the legislative history, the Court of Appeals explained that the UTPA was “largely borrowed” from the Uniform Deceptive Trade Practices Act (UDTPA), which, in turn, was derived from the federal Lanham Trademark Act and the Restatement (Second) of Torts. Id. at 191-92, 497 P.3d 730.

The court found those sources instructive, explaining that the Lanham Act “contemplate[s] that the prohibited deception be material to a consumer's purchasing decisions.” Id. at 193, 497 P.3d 730. On the whole, the court concluded, it was

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State ex rel Rosenblum v. Living Essentials, LLC, --- P.3d ---- (2023) 371 Or. 23

**5 “difficult to imagine how making actionable immaterial misrepresentations under ORS 646.608(1)(b) and (e) would serve to accomplish the purpose of the UTPA to prevent consumers from harm. There is no need to provide a remedy for misrepresentations that are irrelevant to consumers’ purchasing decisions to accomplish the goal of protecting consumers.”

Id. at 194, 497 P.3d 730 (emphasis in original). Observing, finally, that construing ORS 646.608(1)(b) and (1)(e) not to require materiality would raise concerns under Article I, section 8, of the Oregon Constitution, the Court of Appeals concluded that materiality is required. Id. at 194-96, 497 P.3d 730. That conclusion made it unnecessary for the court to address the state's other assignments of error described above. 4 The state petitioned for review, which we allowed.

II. STATUTORY CONSTRUCTION The question before us involves the trial court's interpretation of ORS 646.608(1)(b) and ORS 646.608(1)(e). Specifically, the question is whether those provisions contain *33 an implicit requirement that defendants’ acts were “material to consumer purchasing decisions.” 5 Issues of statutory construction present questions of law that we review for legal error. State v. Ramoz, 367 Or. 670, 704, 483 P.3d 615 (2021).

We resolve those questions by seeking to give effect to the intent of the legislature as demonstrated by the text, context, and any helpful legislative history. State v. Gaines, 346 Or. 160, 171-72, 206 P.3d 1042 (2009).

The statutory provisions at issue are ORS 646.608 (1)(b) and (1)(e). Again, those provisions state: “(1) A person engages in an unlawful practice if in the course of the person's business, vocation or occupation, the person does any of the following: “* * * * * “(b) Causes likelihood of confusion or of misunderstanding as to the source, sponsorship, approval, or certification of real estate, goods or services. “* * * * *

“(e) Represents that real estate, goods or services have sponsorship, approval, characteristics, ingredients, uses, benefits, quantities or qualities that the real estate, goods or services do not have or that a person has a sponsorship, approval, status, qualification, affiliation or connection that the person does not have.”

ORS 646.608(1). The dispute in this case is whether those provisions contain an implicit additional requirement— that is, whether they require proof that the “likelihood of confusion or of misunderstanding,” in paragraph (1)(b), or the “represent[ation],” in paragraph (1)(e), would be “material to consumer purchasing decisions.” We will briefly summarize the parties’ arguments before examining the text, context, and legislative history. **6 The state contends that the Court of Appeals erred in construing both provisions to include a “material to consumer purchasing decisions” requirement. The state *34 observes that no such requirement is expressly contained in the text, and it disagrees with the Court of Appeals’ conclusion that that requirement is implicit in the words that the legislature chose. The state contends that paragraphs (1)(b) and (1)(e) describe practices, among numerous others in the UTPA, that the legislature identified as hostile to consumers’ interests and therefore inherently objectionable, regardless of how they may contribute to a consumer's purchasing decision in a particular context. The state also points out that the UTPA allows for both public enforcement by prosecuting attorneys and private enforcement by injured consumers, and that public enforcement actions, unlike private actions, do not require proof of concrete injury.

Defendants’ response tracks the reasoning of the Court of Appeals. Defendants argue that, as a textual matter, paragraphs (1)(b) and (1)(e) implicitly require a showing that the act was “material to consumer purchasing decisions,” and that such a requirement is supported by the context and purpose of the UTPA, as evidenced by the legislative history. Defendants argue that the UTPA regulates trade, which it defines in part as “directly or indirectly affecting” Oregonians, and that the legislature did not have an interest in prohibiting conduct that would not materially affect

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State ex rel Rosenblum v. Living Essentials, LLC, --- P.3d ---- (2023) 371 Or. 23

consumers by influencing their decisions about whether to purchase goods, real estate, or services.

A. Text We begin with the text, as that is the best evidence of legislative intent. Gaines, 346 Or. at 171-72, 206 P.3d 1042.

Starting with paragraph (1)(b), the text supports the state's view that materiality is not a requirement. That provision states that a person engages in an unlawful practice if the person “[c]auses likelihood of confusion or of misunderstanding as to the source, sponsorship, approval, or certification of real estate, goods or services.” ORS 646.608(1)(b). The text is addressed to a “likelihood of confusion or of misunderstanding” about the listed attributes; it says nothing expressly about whether the potential confusion or misunderstanding must be of the sort that would materially affect a consumer's purchasing decision. We thus consider whether that additional element is necessarily implied by the words *35 that the legislature chose. As the legislature did not define those terms for purposes of the statute, we presume that the legislature intended for them to have their ordinary meanings. See Gaines, 346 Or. at 171, 206 P.3d 1042.

The key phrase in the statute is “[c]auses likelihood of confusion or of misunderstanding.” ORS 646.608(1)(b).

When used as a verb, as here, “cause” means “1 : to serve as cause or occasion of : bring into existence : make” or, “2 : to effect by command, authority or force.” Webster's Third New Int'l Dictionary 356 (unabridged ed 2002). “Cause” is also a legal term of art, and it is defined as “[s]omething that produces an effect or result.” Black's Law Dictionary 273 (11th ed 2019). We understand the first Webster's definition and the Black's definition to refer to the same thing: the catalyst in a cause-and-effect sequence. The second part of the Webster's definition seems inapposite here, as nothing in the statute suggests that any command, authority, or force is required to effect the “likelihood of confusion or of misunderstanding.” Rather, the provision as a whole indicates that “causes” in paragraph (1)(b) simply refers to a cause-andeffect relationship. Thus, “causes” in paragraph (1)(b) means “to produce an effect or result” or “bring into existence.”

“Likelihood” is defined as “probability <in all ~ it will rain>.”

Webster's at 1310. We thus understand the legislature to have used the phrase “causes likelihood of confusion or of misunderstanding” to mean that a person produces, creates, or

brings about a probability that confusion or misunderstanding will occur. **7 The third relevant word is “confusion,” which has multiple definitions, some of which are clearly not applicable here. 6 In context, the definitions that are potentially relevant are the following: “2 a : a state of being discomfited, disconcerted, chagrined, or embarrassed esp. at some blunder or check <his sister [was] overcome with ~ and unable to lift up her eyes – Jane Austen> b : state of being confused mentally : lack of *36 certainty, orderly thought, or power to distinguish, choose, or act decisively : perplexity <slowly emerging from the mental ~ which followed the fall –Havelock Ellis> <present intellectual ~ and moral chaos of the world –John Dewey>[.]”

Webster's at 477. 7 Because the UTPA protects consumers by regulating commercial transactions in the marketplace, the references to a “lack of certainty” and the “power to distinguish, choose, or act decisively” seem more apt than the references to being “chagrined” or “embarrassed,” although those are potentially relevant.

The final word in the phrase is “misunderstanding,” which means: “1 : a failure to understand : misinterpretation <the ~ which arose from reports of these golden palaces fired the imagination of Columbus –G.F. Hudson> 2 : disagreement, quarrel <the ~s between the two territories have grown during the emergency –Vernon Bartlett>.”

Webster's at 1447. As between those definitions of “misunderstanding,” the entire text of ORS 646.608(1)(b) suggests that former definition is more apposite; given the reference to “confusion” earlier in the statute, it seems more likely that the legislature was concerned with business practices that could lead consumers to have a failure of understanding or a misinterpretation as opposed to those that might lead to a disagreement or quarrel.

Considered together, then, the dictionary definitions suggest that ORS 646.608(1)(b) refers to conduct whereby a person (1) produces or brings about (2) a probability (3) that another person will experience either (i) a lack of understanding or a misinterpretation, or (ii) a state of being that involves mental confusion, or being discomfited or disconcerted, or a diminished ability to distinguish or choose, *37 regarding

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State ex rel Rosenblum v. Living Essentials, LLC, --- P.3d ---- (2023) 371 Or. 23

(4) the “source, sponsorship, approval, or certification of real estate, goods or services.” Nothing in those requirements implies that the representation must have a material influence on consumer purchasing decisions. **8 This is not the first case in which we have construed ORS 646.608(1)(b). In Daniel N. Gordon, PC v. Rosenblum, 361 Or. 352, 367, 393 P.3d 1122 (2017), ORS 646.608(1)(b) was applied to a law firm's debt collection practices. In that case, we explained that there are three elements to a claim under ORS 646.608(1)(b): (1) A “person” (2) “in the course of the person's business, vocation or occupation” (3) “[c]auses likelihood of confusion or of misunderstanding as to the source, sponsorship, approval or certification of real estate, goods or services.” As to the third element, we examined the causal relationship required between the person's action and the resulting confusion. We explained that “the person must cause the likelihood of confusion or misunderstanding experienced by the other person.” Id. at 369, 393 P.3d 1122 (internal quotation marks omitted); see id. (interpreting the statute in the context of a company whose actions were likely to cause confusion about interest rates on debt and liability for attorney fees). We were not presented there with the question whether the statute includes a “materiality” requirement. We did say, however, that the elements of a violation of ORS 646.608 (1)(b) are “apparent on the face of the statute.” Id. at 367, 393 P.3d 1122.

In this case, the Court of Appeals held that the concept of materiality, though not apparent on the face of the statute, is necessarily implied: “[F]or a seller's unlawful trade practice to ‘bring into existence’ or ‘effect by authority’ a ‘state of being discomfited, disconcerted, chagrined, or embarrassed’ or a ‘lack of certainty’ or ‘power to distinguish, choose, or act decisively’ with respect to its product, the unlawful conduct necessarily must be material to the consumer's decision to buy the product. Said another way, if a seller's allegedly unlawful practice is immaterial to the consumers’ purchasing decisions, it is unlikely to create a state of discomfort, chagrin, or uncertainty, or affect the consumer's power to distinguish, choose, or act decisively with respect to that product.”

attribute of a product is not necessarily connected to the question whether the consumer intends to purchase the product. For example, a consumer might be led by a false advertisement to form an incorrect understanding about the “certification” status of a product, a misunderstanding that will exist regardless of whether the consumer has any interest in purchasing the product. The proposition that the only statements capable of misleading are those that are material to the purchasing decision is not correct. In short, the plain text of ORS 646.608(1)(b) does not include a materiality requirement, and we are not persuaded that materiality is necessarily or logically implied by the words that the legislature used.

We take the same view of the second provision at issue, ORS 646.608(1)(e), which makes it an unlawful practice to “represent[ ]” that goods, services, [and] real estate have certain attributes that they “do not have” (or that a “person” has certain attributes that the person “does not have”). “Representation” is defined for purposes of the UTPA as “any manifestation of any assertion by words or conduct, including, but not limited to, a failure to disclose a fact.” ORS 646.608(2). Thus, paragraph (1)(e) prohibits making misrepresentations (including a failure to disclose), by speech or conduct, about certain attributes of goods, services, real estate, or persons. That text flatly prohibits such misrepresentations without regard to their possible effect. It is therefore even less supportive than paragraph (1)(b) of the interpretation that such conduct is actionable only if it is “material to consumer purchasing decisions.”

In sum, the text of ORS 646.608(1)(b) and (1)(e) supports the state's argument that the materiality element described by the Court of Appeals does not exist in either provision. We proceed to consider statutory context and, to the extent it is helpful, legislative history.

Living Essentials, LLC, 313 Or App at 187, 497 P.3d 730 (emphasis in original).

B. Statutory Context **9 Context includes “other provisions of the same statute” and “the statutory framework within which the law *39 was enacted.” PGE v. Bureau of Labor and Industries, 317 Or. 606, 611, 859 P.2d 1143 (1993); Klamath Irrigation District v.

United States, 348 Or. 15, 23, 227 P.3d 1145 (2010) (internal quotation marks and citation omitted). Relevant context for ORS 646.608(1)(b) and (1)(e) thus includes the rest of ORS 646.608(1) as well as the rest of the UTPA.

*38 We disagree with that conclusion. As a logical matter, the question whether a consumer is confused about some

The purpose of the UTPA is to protect consumers from unlawful trade practices. See, e.g., Denson v. Ron Tonkin

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Gran Turismo, Inc., 279 Or. 85, 90 n 4, 566 P.2d 1177 (1977) (“[T]he bill seeks to protect consumers rather than businesses.”). In fulfilling the purpose of protecting consumers, the legislature has prohibited an extensive list of trade and business practices in ORS 646.607 and ORS 646.608(1).

Defendants’ primary contextual argument is that the UTPA is aimed at restricting acts that “affect” Oregon consumers, as reflected in the statute's definitions of trade and commerce: “ ‘Trade’ and ‘commerce’ mean advertising, offering or distributing, whether by sale, rental or otherwise, any real estate, goods or services, and include any trade or commerce directly or indirectly affecting the people of this state.”

ORS 646.605(8). Defendants argue that “affect” means “to act upon” or “to produce a material influence upon or alteration in.” In support of inferring a materiality requirement in ORS 646.608(1)(b) and (1)(e), the Court of Appeals relied on that definition of “trade” and “commerce” as well as two of the UTPA's remedial provisions. ORS 646.632(1) allows a prosecuting attorney to bring suit to restrain “unlawful trade practices,” and ORS 646.636 allows a court to order equitable relief to “restore” to a person money or property “of which the person was deprived” by means of an unlawful practice or “as may be necessary to ensure cessation of unlawful trade practices.” The Court of Appeals reasoned that, in light of those provisions, “the UTPA ‘as a whole’ appears to envision that the acts to be remedied as unlawful trade practices are ones that have affected consumers—in other words, ones that materially bear on consumer purchasing choices.” Living Essentials, LLC, 313 Or App at 189, 497 P.3d 730. *40 We agree with the Court of Appeals that the UTPA as a whole reflects an intent to regulate trade practices that affect consumers. But it does not follow that the legislature considered the only practices that affect consumers to be those that would materially influence their purchasing decisions as to a particular good or service. The legislature could have determined that practices that lead to confusion or inaccurate perceptions about goods and services have negative effects on a well-functioning marketplace, e.g., by undermining consumer confidence, and that those negative effects indirectly “affect” consumers regardless of whether consumers purchase a good or service. To put it another way, one can understand the UTPA as a legislative judgment that the specified unlawful practices are inherently “material” in the sense that they are all adverse to the societal interest in a

healthy marketplace where consumers can expect goods and services to be as they are represented to be. Consequently, the reference in the definition of “ ‘trade’ and ‘commerce’ ” to “directly or indirectly affecting the people of this state” does not suggest that we should construe specific prohibitions in the UTPA to include additional requirements of materiality that are not expressed in their text. The more obvious contextual reading is that the legislature stated its general intention to regulate practices that affect consumers and then provided a list of specific unlawful practices that, in the legislature's judgment, do that. **10 That conclusion is also consistent with this court's decision in Searcy v. Bend Garage Company, 286 Or. 11, 592 P.2d 558 (1979), where we considered whether a different UTPA provision, ORS 646.608(1)(f), includes a “materiality” element. That provision makes it a violation to “[r]epresent[ ] that real estate or goods are original or new if the real estate or goods are deteriorated, altered, reconditioned, reclaimed, used or secondhand.” The plaintiff bought a used car from defendant, who had checked a box on a sales form indicating that the car was new. The defendant argued that the plaintiff had not relied on that misrepresentation. Searcy, 286 Or. at 15, 592 P.2d 558. Based on that argument, the defendant requested the following jury instruction: “A representation is an actual definite statement or actual definite conduct that is material and that was relied upon by *41 the plaintiffs. It can also include concealment of a material fact that would normally have been relied upon by the plaintiffs and that defendant had a duty to disclose to plaintiffs.”

Id. at 16, 592 P.2d 558 (emphases in original). The defendant argued that the term “representation” in paragraph (1) (f) requires materiality because materiality is expressly required by another provision, ORS 646.608(1)(t), which prohibits the failure to disclose a “known material defect or material nonconformity” upon delivery of real estate, goods, or services. This court rejected that view. Searcy, 286 Or. at 16, 592 P.2d 558 (“Many of the enumerated unlawful trade practices involve representations. See ORS 646.608(1)(e), (f), (g), (j), (k), (l), and (s). But in the section defining ‘representation’ the legislature did not require that a concealed fact be material.”).

Defendants note that Searcy addressed a different UTPA provision, paragraph (1)(f); that it dealt with a jury instruction rather than the substantive elements of a claim; and that Searcy has “no bearing” on whether materiality is required

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for paragraphs (1)(b) and (1)(e). But Searcy is not so easily ignored. Defendants are correct that that case, strictly speaking, involved the correctness of the trial court's jury instruction about the meaning of “representation.” But this court's conclusion that the instruction was correct, despite the omission of a reference to materiality, depended in part on its observation that ORS 646.608(1)(f), like several other provisions including paragraph (1)(e), prohibits certain representations without regard to materiality.

Searcy does not control our interpretation of paragraph (1)(e), but reading a materiality element into that paragraph would be difficult to reconcile with Searcy’s interpretation of paragraph (1)(f), which has a similar construction. Both provisions prohibit making inaccurate representations about a product or service. Neither provision expressly contains a materiality element. Ultimately, defendants offer no persuasive reason why this court should take a different view of one provision than we took of the other in Searcy.

C. Legislative History Thus far, we have concluded that the plain text and context of paragraphs (1)(b) and (1)(e) are inconsistent with *42 the inclusion of a materiality element. In that light, legislative history is likely to be unavailing. Gaines, 346 Or. at 172, 206 P.3d 1042 (“[W]e clarify that a party seeking to overcome seemingly plain and unambiguous text with legislative history has a difficult task before it.”).

Tracking the analysis of the Court of Appeals, defendants argue that the UTPA provisions at issue were taken from the UDTPA, and that it was understood at the relevant time (i.e., 1971) that the UDTPA requires materiality. For several reasons, that argument fails. **11 It is true that, in enacting the UTPA in 1971, the legislature adopted language from numerous provisions of the UDTPA, promulgated by the Uniform Law Commission.

See Or. Laws 1971, ch. 744, § 7; Tape Recording, House Committee on Judiciary, HB 1088, Feb. 10, 1971, Tape 5, Side 1 (statement of Attorney General Lee Johnson). 8 The UTPA provisions at issue here, ORS 646.608(1)(b) and (1) (e), were drawn from the list of deceptive trade practices in the UDTPA. 9 Those UDTPA provisions, however, do not contain a “materiality” requirement in their text, nor does the written commentary to those provisions refer to such a requirement. See Exhibit 5, House Committee on Judiciary, Subcommittee on Consumer Protection, HB 1088,

Apr. 5, *43 1971 (UDTPA draft with commentary). Thus, the UDTPA materials with which legislators were presented in 1971 would not have given them any indication that, in enacting UTPA provisions which make no reference to “materiality,” they were somehow implicitly incorporating that element from other sources of law.

Defendants contend that the UDTPA was nevertheless understood to require materiality. Defendants have not cited any case law to support that proposition, but, even if they had, we have previously said that interpretations of the UDTPA “are of limited value in discerning the legislative intent behind the [UTPA]” because the “policy underpinnings of [the UTPA] (protection of consumers) differ somewhat from the Uniform Act (protection of businesses).” Denson, 279 Or. at 90 n 4, 566 P.2d 1177. 10 Defendants also argue that the UDTPA provisions that correspond to paragraphs (1)(b) and (1)(e) have their origins in case law under the federal Lanham Trademark Act and the Restatement (Second) of Torts (Tent Draft No. 8, 1963), both of which, defendants contend, require materiality for representations to be actionable. Defendants have produced no evidence from the legislative history, however, and we are aware of none, to suggest that legislators were made aware of the content of those sources of authority. **12 At bottom, defendants’ contention is that, although a requirement of materiality is not found in the text of paragraphs (1)(b) and (1)(e), in the corresponding provisions of the UDTPA, or in the commentary to the UDTPA that the legislature considered, we should infer that the legislature implicitly intended to incorporate that requirement from other sources of law that legislators did not discuss. That argument falls far short of what would be necessary to overcome the seemingly unambiguous text of paragraphs (1)(b) and (1)(e). *44 We briefly address defendants’ reliance on maxims of statutory construction. Defendants argue, as the Court of Appeals also concluded, that the canon of constitutional avoidance counsels in favor of construing the statute to include a materiality requirement. Defendants also raise an “absurd results” argument. However, when the text, context, and legislative history provide a single unambiguous interpretation of the statute, we do not reach such maxims.

Coos Waterkeeper v. Port of Coos Bay, 363 Or. 354, 371-72, 423 P.3d 60 (2018). In this case, the text, context, and legislative history demonstrate that the statute unambiguously does not require proof that a defendant's conduct was “material to consumer purchasing decisions.”

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III. CONSTITUTIONALITY Having concluded that ORS 646.608(1)(b) and (1)(e) do not contain a specific materiality requirement, we next address defendants’ argument that, without such a requirement, those paragraphs violate the free speech provisions of the Oregon and federal constitutions, either facially or as applied to defendants’ conduct.

A. Article I, Section 8, of the Oregon Constitution The Oregon Constitution provides, “No law shall be passed restraining the free expression of opinion, or restricting the right to speak, write, or print freely on any subject whatever; but every person shall be responsible for the abuse of this right.” Or. Const., Art. I, § 8.

1. The Robertson Framework Our analytical framework for evaluating a law's constitutionality under Article I, section 8, was established in State v. Robertson, 293 Or. 402, 649 P.2d 569 (1982). We have summarized that framework as follows: “[U]nder the first category of the Robertson framework, a law that is ‘written in terms directed to the substance of any “opinion” or any “subject” of communication’ is unconstitutional unless the restriction is wholly confined within an historical exception. If the law passes that test but ‘is directed in terms against the pursuit of a forbidden effect’ and ‘the proscribed means [of causing that effect] include speech or writing,’ then the law falls into the second *45 category of Robertson and is examined for overbreadth. If a law is ‘directed only against causing the forbidden effects,’ it falls into the third category of Robertson. A law that falls into the third category can be challenged by arguing that the law ‘could not constitutionally be applied to [a person's] particular words or other expression.’ ” State v. Babson, 355 Or. 383, 393-94, 326 P.3d 559 (2014) (internal citations omitted).

A “category one” law, which by its terms prohibits speech based on its substance, is unconstitutional unless it falls “wholly” within a historical exception such as perjury or fraud. The historical exceptions can be extended “to contemporary circumstances or sensibilities.” Robertson, 293 Or. at 433-34, 649 P.2d 569 (“If it was unlawful

to defraud people by crude face-to-face lies, for instance, free speech allows the legislature some leeway to extend the fraud principle to sophisticated lies communicated by contemporary means.”). **13 A “category two” law is one that, “by [its] terms, purport[s] to proscribe speech or writing as a means to avoid a forbidden effect.” State v. Illig-Renn, 341 Or. 228, 235, 142 P.3d 62 (2006) (emphasis added); see also Robertson, 293 Or. at 415, 649 P.2d 569 (explaining that the coercion statute, which included the element of “mak[ing] a demand upon another person,” was “directed in terms against the pursuit of a forbidden effect” and that the statute falls in category two because “speech is a statutory element in the definition of the offense”); State v. Moyle, 299 Or. 691, 701-02, 705 P.2d 740 (1985) (holding that a harassment statute, which prohibited “subject[ing] another to alarm by conveying a telephonic or written threat,” was a category two law because verbal threats were an express element of the crime).

If a law falls in category two, then we analyze it for overbreadth. State v. Plowman, 314 Or. 157, 164, 838 P.2d 558 (1992). A category two law is unconstitutionally overbroad if it “more than rarely” reaches protected expression and is not susceptible to a narrowing construction.” State v. Rangel, 328 Or. 294, 300, 977 P.2d 379 (1999) (“A ‘law is overbroad to the extent that it announces a prohibition that reaches conduct which may not be prohibited.’ ” (Quoting Robertson, 293 Or. at 410, 649 P.2d 569.)); Illig-Renn, 341 Or. at 232, 142 P.3d 62 (“[A] statute that *46 proscribes protected conduct only at its margins remains valid.”).

“Category three” laws, on the other hand, prohibit forbidden results without referring to expression. Plowman, 314 Or. at 164-65, 838 P.2d 558 (holding that a bias crime statute, prohibiting two or more persons from acting together based on their perception of the victim's race, color, religion, national origin, or sexual orientation to cause physical injury to the victim, is a category three law because the crime can be committed “without speaking a word” and without holding an opinion other than the perception of the victim's characteristics). Category three laws may be challenged only “as applied.” Id. at 164, 838 P.2d 558.

Defendants argue that both ORS 646.608(1)(b) and (1)(e), without an implied element of materiality, violate Article I, section 8, either facially or as applied to defendants’ conduct.

As explained below, we reject defendants’ facial challenges,

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and we decline to address their as-applied arguments in this posture.

2. ORS 646.608(1)(e) Paragraph (1)(e) provides that a person engages in an unlawful practice if the person “[r]epresents that real estate, goods or services have sponsorship, approval, characteristics, ingredients, uses, benefits, quantities or qualities that the real estate, goods or services do not have or that a person has a sponsorship, approval, status, qualification, affiliation, or connection that the person does not have.”

Defendants argue that ORS 646.608(1)(e) is a category one law because it “expressly prohibits speech” about the attributes that goods have. The state agrees that paragraph (1) (e) is a direct restriction of speech that is properly analyzed under Robertson category one. However, the state argues that the statute is constitutional because it falls within the historical exception for fraud.

We agree that paragraph (1)(e) is a category one law because, by its terms, it prohibits speech based on its substance. The statute makes it unlawful to “represent” that a product has attributes that the product does not have. And *47 the UTPA defines a “representation” in terms of communication: “any manifestation of any assertion by words or conduct, including, but not limited to, a failure to disclose a fact.” ORS 646.608(2). Whether the representation violates paragraph (1) (e) turns on the substance of the representation itself rather than on any resulting effect: False representations violate the statute, while true representations do not. Thus, ORS 646.608(1)(e) prohibits expression based on its substance. **14 Category one laws are unconstitutional under Article I, section 8, unless they fall within a historical exception. To be within a historical exception, “the scope of the restraint [must be] wholly confined within some historical exception that was well established when the first American guarantees of freedom of expression were adopted and that the guarantees then or in 1859 demonstrably were not intended to reach.”

Robertson, 293 Or. at 412, 649 P.2d 569. Examples of such exceptions are perjury, solicitation, forgery, extortion, and fraud. Id. The state argues that ORS 646.608(1)(e) is permissible under Article I, section 8, because the framers of Oregon's constitution would not have understood the protection for

free expression to reach deceptive representations about the attributes of goods, services, or real estate. In other words, the statute falls within the historical exception for fraud.

Defendants argue that the fraud exception is inapplicable because paragraph (1)(e) can be violated without any showing of materiality or that a misrepresentation was made with knowledge of its falsity or an intent to mislead, as is required for common-law fraud. 11 The concept of fraud was “well established” when Oregon's free expression guarantee was adopted. See Robertson, 293 Or. at 433-34, 649 P.2d 569; see, e.g., Or. Laws 1854, ch.

4, § 30 (criminalizing the act of obtaining money, goods, or merchandise by false pretenses with intent to defraud); General Laws of Oregon, Crim Code, ch. III, § 565, p. 415 (Deady & Lane 1843-72) (providing for imprisonment and *48 civil damages for anyone convicted of “gross fraud or cheat at common law”).

This court has also held that, in determining whether a historical exception applies, an exact match is not required between a contemporary restriction on speech and the analogous restriction that would have been recognized in 1859. See Robertson, 293 Or. at 433-34, 649 P.2d 569 (“Constitutional interpretation of broad clauses locks neither the powers of lawmakers nor the guarantees of civil liberties into their exact historic forms in the 18th and 19th centuries, as long as the extension remains true to the initial principle.”).

Thus, not every element of common-law fraud must be present for a contemporary law to fall within the historical exception for fraud. Rather, the exception applies if the law falls within “the spirit of Article I, section 8,” by “remain[ing] true to the initial principle.” State v. Ciancanelli, 339 Or. 282, 318, 121 P.3d 613 (2005).

Defendants are correct that paragraph (1)(e) does not require a showing of culpability—it does not require an intent to deceive, nor does it require knowledge of the falsity of a representation. However, this court has already concluded that those elements of the common-law tort are not required to bring a law within the historical fraud exception. In Vannatta v. Keisling, 324 Or. 514, 931 P.2d 770 (1997), overruled on other grounds, Multnomah County v. Mehrwein, 366 Or. 295, 462 P.3d 706 (2020), we considered whether a statutory provision that penalized a candidate for violating a pledge to abide by campaign expenditure limits violated Article I, section 8. Id. at 543-44, 931 P.2d 770. We explained that election laws that are “targeted at fraud” fit within the constitutional exception. Id. at 544, 931 P.2d 770. The fact

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that the statute at issue did not track all the elements of the common-law tort—e.g., it did not require a culpable mental state—did not prevent this court from concluding that the statute was constitutional, because the statute was permissibly aimed at “misleading conduct.” See id. at 544-45, 931 P.2d 770. On the contrary, we noted that “[t]he fact that a candidate may have intended to abide by expenditure limitations when he or she made the pledge, and only later decided to ignore that promise, does not make the failure to abide by the promise any less a fraud *49 on the voters who have relied on the candidate's Voters’ Pamphlet statement to choose their candidate.” Id. at 544 n 28, 931 P.2d 770. The possibility that some voters could have relied on a candidate's pledge was sufficient to apply the fraud exception, irrespective of the candidate's mental state. See also State v. Moyer, 348 Or. 220, 234-38, 230 P.3d 7 (2010) (citing Vannatta for the rule that “a statute that prohibits fraud on the electorate need not include an intent element to come within a historical exception”). **15 Thus, although defendants assert that the historical understanding of fraud “punishes only culpable speech,” this court has already recognized that the historical understanding was more expansive, at least for misrepresentations thought to affect the public interest. Our opinion in Moyer discussed the historical recognition of “misrepresentations that contribute[ ] to ‘public inconvenience.’ ” 348 Or. at 234, 230 P.3d 7 (citing William Blackstone, 4 Commentaries on the Laws of England 41-42 (1769)). We noted that “providing false identifying information to * * * public bodies” would have been recognized as such an actionable misrepresentation, id., and concluded that it was unlikely that the framers of Oregon's constitution intended “false communication in connection with public records and matters of legitimate governmental concern to be protected by Article I, section 8’s guarantee of the free expression of opinion.” Id. at 236, 230 P.3d 7. In reaching that conclusion, we expressly rejected the defendants’ argument that an intent to deceive was required.

Id. at 237, 230 P.3d 7 (citing Vannatta, 324 Or. at 544 n 28, 931 P.2d 770). 12 *50 Though it did not address the fraud exception, our decision in Ciancanelli provides further support for the conclusion that the framers of Article I, section 8, would not have expected it to protect false representations of the sort described in ORS 646.608(1)(e). In Ciancanelli, we explained that, “among the various historical crimes that are ‘written in terms’ directed at speech, those whose real focus is on some underlying harm or offense may survive the adoption of Article I, section 8, while those that focus

on protecting the hearer from the message do not.” 339 Or. at 317, 121 P.3d 613 (emphasis in original); id. at 318, 121 P.3d 613 (explaining that framers were more likely to accept restrictions on speech that “have at their core the accomplishment or present danger of some underlying actual harm to an individual or group, above and beyond any supposed harm that the message itself might be presumed to cause to the hearer or to society”). Thus, where the direct prohibition on speech exists to prevent a nonspeech harm, such as fraud, the conflict between that objective and the fundamental free-speech principle enshrined in Article I, section 8, is less stark than where the legislature acts to restrict speech based on a perceived harm inherent in the speech itself.

That understanding further persuades us that paragraph (1) (e) falls within the historical exception for fraud. Although paragraph (1)(e) is written in terms directed to the substance of speech, it is plain that the provision, like others in the UTPA, is aimed not at shielding people from supposedly detrimental messages or ideas themselves—an objective that would be anathema to Article I, section 8—but at the goal of protecting people from the economic harm that, in the legislature's judgment, arises from deceptive conduct in the market for goods, services, and real estate. That principle was familiar to the common law, as evidenced by, among other things, the law of trademarks. See Amoskeag Manufacturing Company v. Spear, 2 Sand Ch 599, 605-06 (NY Ch 1849) (explaining the “nature of the wrong” of trademark infringement as a combination of deceiving the public and diverting profits from another business); Avery & Sons v.

Meikle & Co., 81 Ky. 73, 87 (1883) (describing the harm caused by deceiving consumers by copying the appearance of the plaintiff's goods as including “the inculcation of truth and honor in the *51 conduct of trade and commerce”); see also Restatement (Third) of Unfair Competition § 2 comment b (1995) (explaining the historical development of common law aimed at preventing economic harm caused by deceptive marketing). **16 In short, ORS 646.608(1)(e) is a restriction on speech that serves a purpose—avoidance of economic harm based on deceptive commercial practices—that was recognized when Article I, section 8, was drafted and is consistent with how the framers would have conceived of fraud. The statute has “at [its] core” the prevention of an “underlying actual harm to an individual or group, above and beyond any supposed harm that the message itself might be presumed to cause to the hearer or to society,” Ciancanelli, 339 Or. at 318, 121 P.3d 613, which makes it unlikely that the framers would have

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viewed it as incompatible with the free speech guarantee that they enshrined in the constitution. Accordingly, we conclude that paragraph (1)(e)’s prohibition on false representations about the “sponsorship, approval, characteristics, ingredients, uses, benefits, quantities or qualities” of a good, service, or real estate, made in the course of business, is not facially unconstitutional.

3. ORS 646.608(1)(b) Paragraph (1)(b) provides that a person engages in an unlawful trade practice if the person “[c]auses likelihood of confusion or of misunderstanding as to the source, sponsorship, approval, or certification of real estate, goods or services.” ORS 646.608(1)(b). Defendants argue that that provision is unconstitutional either because it is a Robertson category one law that does not fall within a historical exception, or because it is a Robertson category two law that is overbroad. The state argues that paragraph (1)(b) is a Robertson category three law that is not subject to a facial challenge; alternatively, the state argues that the provision is a category two law that is reviewed for overbreadth, and that the statute is not overbroad. For the reasons that follow, we agree with the state that paragraph (1)(b) is a category three law.

On its face, paragraph (1)(b) does not regulate speech. Rather, the statute prohibits a result—“caus[ing] *52 a likelihood of confusion or of misunderstanding.” By its terms, the statute neither prohibits expression based on its substance (category one) nor identifies expression as a proscribed means of producing the specified result (category two). If paragraph (1)(b) is properly understood not to directly regulate speech at all, then it is not susceptible to a facial challenge; rather, a person who contends that the statute has been applied in a manner that unconstitutionally burdens protected expression is limited to bringing an as-applied challenge. Illig-Renn, 341 Or. at 232, 142 P.3d 62.

Defendants argue that, although ORS 646.608(1)(b) is not expressly written in terms directed at speech, it must nevertheless be evaluated under Robertson category one or category two as an example of a “creatively worded” law that can only be violated through expression. Defendants’ argument has its roots in several of this court's cases but ultimately fails.

As discussed earlier in this opinion, the fundamental difference between Robertson categories one and two, on the one hand, and category three, on the other, is that a category three law is not written in terms directed to expression at

all. The general rule of Robertson is that, to trigger scrutiny under categories one or two, a law must expressly prohibit expression based on its substance or as a means of producing a targeted result—that is, expression must be a “statutory element.” Illig-Renn, 341 Or. at 235, 142 P.3d 62 (reiterating that we have limited facial overbreadth challenges to statutes that “more or less expressly identify protected speech as a statutory element of the offenses that they define”). The critical distinction is that “between making speech the crime itself, or an element of the crime, and using speech to prove the crime. * * * [A] defendant who makes a facial challenge to a statute under Article I, section 8, must demonstrate the former—that the legislature intended to punish the speech itself.” Plowman, 314 Or. at 167, 838 P.2d 558 (emphasis added). **17 This court has, however, observed a theoretical exception to the rule that expression must be an “element” of the law to allow for a facial challenge. That exception recognizes the possibility that laws can be creatively drafted to avoid prohibiting speech as such, while making it *53 nonetheless clear that objectionable speech is the focus of the law. We first addressed that possibility in Moyle, in which we explained that “[t]he constitutional prohibition against laws restraining speech or writing cannot be evaded simply by phrasing statutes so as to prohibit ‘causing another person to see’ or ‘to hear’ whatever the lawmakers wish to suppress.”

Moyle, 299 Or. at 699, 705 P.2d 740. We noted that, in principle, the legislature has plenary power to protect persons from whatever conduct the legislature regards as harmful, subject to constitutional limits. “A difficulty arises, however, when a statute defines a crime in terms of causing a kind of harm which necessarily results only from speech or writing, so that the statutory definition is only the other side of the coin of a prohibition of the speech or writing itself.” Id. We proceeded to explain that the statute in that case was not such a law. In Moyle, the statute prohibited harassment, “defined as alarming another person by conveying a telephonic or written threat to inflict serious physical injury or commit a felony.” Id. at 693, 705 P.2d 740. This court held that the effect described—causing fear of injury to persons or property—did not “merely mirror[ ] a prohibition of words themselves” because it could be caused by means other than expression. Id. at 701, 705 P.2d 740. Thus, the statute was not a Robertson category one law. However, because the statute expressly addressed the use of words to cause the forbidden effect, it required scrutiny for overbreadth (category two).

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Similarly, in Illig-Renn, we considered the constitutionality of the then-extant version of ORS 162.247(1)(b), which made it a crime to “refuse[ ] to obey a lawful order by [a] peace officer,” and held that the statute was not subject to a facial challenge. 341 Or. at 230, 142 P.3d 62. We reiterated that, “in the context of challenges under Article I, section 8, of the Oregon Constitution, this court has limited facial overbreadth analysis to statutes that more or less expressly identify protected speech as a statutory element of the offenses that they define, or that otherwise proscribe constitutionally protected speech ‘in [their] own terms.’

And, more to the point, we have stated specifically that, when a statute does not refer to protected speech ‘in terms,’ it is not an appropriate subject for overbreadth analysis and may only be challenged ‘as applied.’ *54 “The foregoing does not mean that we will ignore a clear case of facial unconstitutionality or overbreadth merely because the statute manages to avoid any direct reference to speech or expression. As this court acknowledged in [Moyle], ‘[t]he constitutional prohibition against laws restraining speech or writing cannot be evaded simply by phrasing statutes so as to prohibit “causing another person to see” or “to hear” whatever [speech or expression] the lawmakers wish to suppress.’ But, in general, we will not consider a facial challenge to a statute on overbreadth grounds if the statute's application to protected speech is not traceable to the statute's express terms.”

341 Or. at 235-36, 142 P.3d 62 (emphasis in original; internal citations omitted). As to the statute challenged in that case, this court rejected the defendant's argument that the statute expressly restrains expression because the refusal to obey a police officer's order “conveys a message of opposition or dissent whether by verbal means or an expressive act.”

We reasoned that the statute is concerned with the “act” of refusing to obey an order, and the fact that such an act might also be intended to convey a message was not relevant. Id. at 237, 142 P.3d 62. In short, we applied the general rule that where a statute is not expressly aimed at restricting speech, analysis for facial overbreadth was inappropriate, irrespective of the statute's foreseeable effect on expression. **18 Our most recent discussion of these issues was in Babson. In that case, the defendants argued that a legislative rule regulating the use of the steps of the state Capitol between 11 p.m. and 7 a.m. required analysis under Robertson category two because it had an “ ‘obvious and foreseeable’ application

to speech”—i.e., it would prevent the defendants from staging an around-the-clock political protest. 355 Or. at 398, 326 P.3d 559. This court rejected that argument. In doing so, we explained: “When expression is a proscribed means of causing the harm prohibited in a statute, it is apparent that the law will restrict expression in some way because expression is an element of the law. For that type of law, the legislature must narrow the law to eliminate apparent applications to protected expression. However, if expression is not a proscribed means of causing harm, and is not described in the terms of the statute, the possible or plausible application of *55 the statute to protected expression is less apparent. That is, in the former situation, every time the statute is enforced, expression will be implicated, leading to the possibility that the law will be considered overbroad; in the latter situation, the statute may never be enforced in a way that implicates expression, even if it is possible, or even apparent, that it could be applied to reach protected expression. When a law does not expressly or obviously refer to expression, the legislature is not required to consider all apparent applications of that law to protected expression and narrow the law to eliminate them.”

Id. at 400, 326 P.3d 559 (emphasis in original; internal citations omitted). We then discussed our previous holdings in Moyle and Illig-Renn and reaffirmed that, as a general rule, to warrant review for facial overbreadth, a law must expressly restrain speech; a statute that does not directly refer to speech is not subject to overbreadth analysis, even though it may have “obvious” applications to speech. The legislative rule in Babson did not expressly restrict speech, nor was it “simply a mirror of a prohibition on words,” 355 Or. at 403, 326 P.3d 559, of the sort that Moyle and Illig-Renn cautioned would still subject a statute to a facial challenge.

In sum, this court in Moyle, Illig-Renn, and Babson has described a theoretical category of laws that do not expressly restrict speech but that, nonetheless, are appropriately reviewed for facial overbreadth because they are functionally indistinguishable from such express restrictions—they “mirror” a prohibition on the words themselves. As we noted in Moyle, a law that makes it unlawful to cause someone to “see” or “hear” something is nothing but an alter-native way of prohibiting expression. We refer to that category as “theoretical” because this court has not yet decided a case in which a law was held to fall within it.

Rather, as the foregoing cases illustrate, even laws that have obviously foreseeable applications to speech are not properly

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State ex rel Rosenblum v. Living Essentials, LLC, --- P.3d ---- (2023) 371 Or. 23

viewed as facial restrictions of speech without an indication that “the legislature intended to punish the speech itself.”

Plowman, 314 Or. at 167, 838 P.2d 558.

With that background, we return to ORS 646.608 (1)(b).

The statute prohibits a person, in the course of the person's business, from “caus[ing] a likelihood of confusion or of *56 misunderstanding as to the source, sponsorship, approval, or certification of real estate, goods or services.” Unlike many of the other prohibitions that immediately follow it in the UTPA, which use terms such as “represent,” “solicit,” “disparage,” and “advertise” to describe what a person may not do, paragraph (1)(b) is written without any reference to communication. It may be, of course, that speech is the means through which the forbidden result—the causation of a likelihood of confusion—will often come about. It may even be said that paragraph (1)(b) has obvious and foreseeable applications to speech. But that was also true of the laws in Moyle, Illig-Renn, and Babson. Here, the text and context suggest that, far from desiring to “punish the speech itself,” Plowman, 314 Or. at 167, 838 P.2d 558, the legislature was indifferent as to whether the likelihood of confusion is brought about by speech or by some other, nonexpressive means. The fact that paragraph (1)(b) does not mention expression, while so many other prohibitions in subsection (1) do, tends to suggest that, when it came to paragraph (1) (b), the legislature contemplated that speech is not the only means by which a likelihood of confusion might be created, and that the legislature intended to forbid that result whether caused by speech or not. Thus, paragraph (1)(b) is not the sort of “mirror of a prohibition on words” that we have said would trigger overbreadth analysis. **19 In arguing to the contrary, defendants contend that paragraph (1)(b) can only be violated through speech.

Even assuming that that premise would justify analysis under Robertson categories one or two, 13 we are not persuaded by defendants’ bare assertion that “expressive communication is the only way that a person could cause confusion as to goods’ approval or certification.” Although this court has previously recognized that “selling is a form of communicative behavior,” that statement came in a case that involved door-to-door solicitation. City of Hillsboro v.

Purcell, 306 Or. 547, 555, 761 P.2d 510 (1988). We have never held that all conduct *57 associated with the sale of goods and services is expressive. Here, the statute could reach such things as the manner in which products are packaged, the location at which they are sold, or even where they are placed on a store shelf, if a likelihood of confusion or

misunderstanding were likely to result. Suppose, for example, a person sets up a sales booth at a location where the public could infer, based on signage created by other sellers, that all products being sold at that location share common “approval” or “certification.” If the person's product lacks such approval or certification, a likelihood of confusion or misunderstanding could be created simply by the person's choice of location.

For the foregoing reasons, we conclude that ORS 646.608(1) (b) is a category three law under Robertson that is not subject to a facial challenge.

4. Defendants’ remaining “as-applied” challenges Defendants alternatively argue that, if paragraphs (1)(b) and (1)(e) are not unconstitutional on their face, they are unconstitutional as applied to defendants’ conduct.

Neither party has presented well-developed arguments on that question, and we decline to reach it. As explained earlier in this opinion, the trial court found in defendants’ favor on multiple grounds, which the state separately challenged on appeal. Having concluded that materiality is a required element of the statutory claims that the state did not prove, the Court of Appeals did not reach all of the state's assignments of error. Thus, our conclusion today that materiality is not a required element does not mean that the state will ultimately prevail on any of its claims. The Court of Appeals on remand will have the opportunity to consider the other bases for the trial court's judgment in defendants’ favor (including its conclusions regarding the legal standard for willfulness, the legal standard for false representation under paragraph (1) (e), and the legal standard for likelihood of confusion or misunderstanding under paragraph (1)(b)). Depending on the resolution of those issues, the trial court judgment could be affirmed on other grounds, which would render it unnecessary to consider defendants’ argument that paragraphs (1)(b) and (1)(e), as applied to their conduct, violate *58 Article I, section 8, of the Oregon Constitution. Accordingly, it is premature for this court to consider that issue.

B. The First Amendment to the United States Constitution We now turn to defendants’ argument that, without a requirement of materiality, paragraphs (1)(b) and (1) (e) violate the First Amendment to the United States Constitution.

Under the First Amendment, states may regulate false or deceptive commercial speech. Friedman v. Rogers, 440 U.S. 1, 10 n 9, 99 S Ct 887, 59 L Ed 2d 100, reh'g

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State ex rel Rosenblum v. Living Essentials, LLC, --- P.3d ---- (2023) 371 Or. 23

den, 441 U.S. 917, 99 S.Ct. 2018, 60 L.Ed.2d 389 (1979) (“By definition, commercial speech is linked inextricably to commercial activity: while the First Amendment affords such speech ‘a limited measure of protection,’ it is also true that ‘the [s]tate does not lose its power to regulate commercial activity deemed harmful to the public whenever speech is a component of that activity.’ ”). The Supreme Court has held that commercial speech receives “a different degree of protection” than other types of speech. Va. Pharmacy Bd. v.

Va. Consumer Council, 425 U.S. 748, 771 n 24, 96 S Ct 1817, 48 L Ed 2d 346 (1976). It has explained that commercial speech is more objective and verifiable than other types of speech, and that commercial speech is less at risk of being “inhibited by proper regulation.” Friedman, 440 U.S. at 10, 99 S.Ct. 887. **20 The test for determining whether a regulation of commercial speech violates the First Amendment comes from Central Hudson Gas & Elec. v. Public Serv. Comm'n, 447 U.S. 557, 566, 100 S Ct 2343, 65 L Ed 2d 341 (1980). That four-part test first examines whether the speech at issue is protected by the First Amendment: that is, whether it concerns lawful activity and is not misleading. If, under that prong, the speech concerns unlawful activity or is “more likely to deceive the public than to inform it,” the government can prohibit it as unprotected speech. Id. at 563, 100 S Ct 2343.

However, if the communication concerns lawful activity and is not misleading, “the government's power is more circumscribed.” Id. at 564, 100 S Ct 2343. In that scenario,

the speech is protected, and we analyze the other three steps: whether the government has a substantial interest, whether the regulation directly *59 advances that interest, and whether the regulation is not more extensive than necessary to serve that interest. Id. The regulations at issue affect speech that “[c]auses likelihood of confusion or of misunderstanding” and “representations” that a product has certain characteristics that it does not have.

Because ORS 646.608(1)(b) and (1)(e) concern misleading commercial speech, they are permissible under Central Hudson.

IV. CONCLUSION From the text, context, and legislative history, we conclude that violation of ORS 646.608(1)(b) and (1)(e) may be established without proof that a defendant's conduct was material to consumer purchasing decisions. We further conclude that neither provision is facially unconstitutional. 14 The decision of the Court of Appeals is reversed, and the case is remanded to the Court of Appeals for further proceedings.

All Citations --- P.3d ----, 371 Or. 23, 2023 WL 3242843

Footnotes *

On appeal from the Multnomah County Circuit Court, Kelly Skye, Judge. 313 Or App 176, 497 P.3d 730 (2021).

**

Nelson, J., resigned February 25, 2023, and did not participate in the decision of this case. Bushong and James, JJ., did not participate in the consideration or decision of this case.

1

This case was brought in 2014. ORS 646.608, ORS 646.607, and ORS 646.605, which are all part of the UTPA, have been amended since then. However, those amendments did not affect the provisions at issue in this case, and they do not affect our analysis. Therefore, all references in this opinion to chapter 646 of the Oregon Revised Statutes are to the current version of the statute unless stated otherwise.

2

The state alleged other UTPA violations that are not at issue on review.

3

The UTPA provides that a showing of a “willful” violation is required for the imposition of civil penalties whether an action is brought by a private party, ORS 646.638(1), or by a public prosecuting attorney, ORS 646.642(3).

Willfulness is not an element of a violation of ORS 646.608(1), however. Thus, the trial court's ruling on © 2023 Thomson Reuters. No claim to original U.S. Government Works.

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State ex rel Rosenblum v. Living Essentials, LLC, --- P.3d ---- (2023) 371 Or. 23

willfulness is not pertinent to the questions we address on review, which concern whether ORS 646.608(1) (b) and (1)(e) require a showing of materiality to consumer purchasing decisions and, if they do not, whether those provisions are unconstitutional.

4

The Court of Appeals also addressed defendants’ cross-appeal, which challenged the trial court's denial of attorney fees. Because the AVC promised to pay $250,000 to the state for “restitution,” among other purposes, and it stated that defendants would comply with Oregon law, the Court of Appeals concluded that the AVC was satisfactory as a matter of law. Accordingly, the court reversed the trial court's denial of attorney fees and remanded to the trial court for a determination of the amount of fees due to defendants.

5

Neither party develops an argument explaining whether this element, if it existed, would refer to a reasonable consumer, a specific consumer, or a group of consumers. Because we reject defendants’ argument regarding materiality altogether, we need not address that question.

6

Those definitions include “overthrow” and “defeat” as in the fall of a city; “a situation or condition marked by lack of order, system, arrangement”; and the legal definition of “a merging of two rights in one or of two apparently or really antagonistic interests in one.” Webster's at 477.

7

Related definitions include “3 a : an act of confusing, of mixing, pouring, blending, or heaping together in disorder with identities and distinctions blended <the ~ of tongues at the tower of Babel> <a ~ of history and poetry in his work> b : an act of mistaking one thing for another, of failing to note distinctions, and of falsely identifying <a formal ~ of poetry and painting –Irving Babbitt> <~ between public and private morality –D.W. Brogan>.” Webster's at 477. However, those definitions, which focus on an “act” rather than an effect, fit poorly in the context of ORS 646.608(1)(b) and the UTPA as a whole, which are concerned with effects on consumers.

8

A digitized version of that tape recording is available at http://records.sos.state.or.us/ORSOSWebDrawer/ Record/7812750 (accessed Apr. 25, 2023).

9

The UTPA was based on more than one model statute, but it appears clear that the list of prohibited practices came in part from the UDTPA. Tape Recording, Senate Committee on Consumer Affairs, SB 50, Feb. 3, 1971 (statement of Sen. Willner), available at http://records.sos.state.or.us/ORSOSWebDrawer/ RecordHtml/7359889 (accessed Apr. 25, 2023) (discussing the three sources of model consumer legislation, which were the Council of State Governments, the Federal Trade Commission's model act, and the National Consumer Law Center's “Consumer Act”). When considering House Bill (HB) 1088, the legislature had a copy of the commentary to the UDTPA, annotated with the paragraph designations in the bill that corresponded to the 13 practices listed in the UDTPA. See Exhibit 5, House Committee on Judiciary, Subcommittee on Consumer Protection, HB 1088, Apr. 5, 1971 (annotated excerpt from UDTPA). The other model consumer legislation statutes did not contain a specific list of prohibited practices, but prohibited “deceptive practices” generally. See 15 USC §§ 41-58 (1970) (Federal Trade Commission Act) (“[U]nfair or deceptive acts or practices in commerce, are declared unlawful.”); Carolyn L. Carter & Jonathan Sheldon, Unfair and Deceptive Acts and Practices §§ 3.4.2.1 - 3.4.2.2, 193 (8th ed 2012) (explaining that the FTC and the Council of State Governments collaborated to develop a model law that had options for states to either adopt the general “deceptive practices” prohibition from federal law or the list of trade practices in the UDTPA).

10

Additionally, the UTPA does not include any express instruction from the legislature to apply and construe the UTPA in a way that promotes uniformity with the uniform law. See ORS 646.605 - 646.656. When the legislature intends to maintain a uniform interpretation, it can say so. E.g., ORS 646.475(1) (stating that the Uniform Trade Secrets Act “shall be applied and construed * * * to make uniform the law * * * among states

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State ex rel Rosenblum v. Living Essentials, LLC, --- P.3d ---- (2023) 371 Or. 23

enacting [the act]”). The absence of such an instruction makes it even more difficult for legislative history to overcome the evident meaning of the text in context.

11

A claim for fraud requires a plaintiff to prove falsity, materiality, knowledge of falsity, intent to deceive, and reliance, in addition to the representation, injury, and causation elements. Discount Fabrics, 289 Or. at 384-85, 615 P.2d 1034 (comparing the elements of common-law fraud to the UTPA).

12

Contemporaneous dictionaries also distinguished between forms of fraud based in part on whether a person had acted with scienter. Bouvier's Law Dictionary 546-47 (1860) distinguished between forms of fraud as follows: “An actual or positive fraud is the intentional and successful employment of any cunning, deception, or artifice, used to circumvent, cheat, or deceive another.

“By constructive fraud is meant such a contract or act, which, though not originating in any actual evil design or contrivance to perpetrate a positive fraud or injury upon other persons, yet, by its tendency to deceive or mislead them, or to violate private or public confidence, or to impair or injure the public interests, is deemed equally reprehensible with positive fraud, and therefore, is prohibited by law, as within the same reason and mischief as contracts and acts done malo animo.”

(Italics in original.)

13

As noted above, this court has held that a statute that is written to “mirror” a prohibition of words should be treated as an express restriction on speech. That is not the same thing as saying that a law should be viewed as a restriction on speech just because all or most of its foreseeable applications are to speech. As we said in Plowman, there must be an indication that the legislature intended to punish the “speech itself.” 314 Or. at 167, 838 P.2d 558.

14

In light of our decision, it is unnecessary to reach the parties’ arguments concerning attorney fees and the AVC. Resolution of those issues will depend on how the merits are resolved on remand.

End of Document

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18

Bush v. City of Prineville, --- P.3d ---- (2023) 325 Or.App. 37

325 Or.App. 37 Court of Appeals of Oregon.

Eric C. BUSH, an individual, Plaintiff-Respondent, v.

CITY OF PRINEVILLE, a political subdivision of the State of Oregon, and Michael Boyd, an individual, Defendant-Appellants, and League of Oregon Cities and Association of Oregon Counties, dba Local Government Personnel Institute, Defendants.

Eric C. Bush, an individual, Plaintiff-Respondent, v.

City of Prineville, a political subdivision of the State of Oregon, and Michael Boyd, an individual, Defendants, and League of Oregon Cities and Association of Oregon Counties, dba Local Government Personnel Institute, Defendants-Appellants.

A175868 (Control), A175907 | Argued and Submitted June 10, 2022. | March 29, 2023 Synopsis Background: Former city police chief brought action against city, Local Government Personnel Institute (LGPI), and police captain for discrimination against a uniformed service member, wrongful discharge, intentional infliction of emotional distress, and defamation, stemming from his termination after LGPI's investigation of chief's use of leave from his police duties to perform National Guard duties. After parties agreed to stipulated judgments, the Circuit Court, Crook County, A. Michael Adler, Senior Judge, entered supplemental judgment awarding chief $639,932 in attorney fees and entered second supplemental judgment denying chief's request for “fees on fees.” Defendants appealed from first judgment and chief appealed from second judgment.

The Court of Appeals, 301 Or.App. 674, 457 P.3d 324; 301 Or.App. 697, 456 P.3d 334, reversed and remanded both judgments. On remand, the Circuit Court, Crook County, Adler, Senior Judge, entered third supplemental judgment, awarding $623,484.83 in attorney fees. City and LGPI appealed.

Holdings: The Court of Appeals, Pagán, J., held that: trial court's award of damages to chief in an amount exceeding the limitation on liability under Oregon Tort Claims Act (OTCA) did not preclude him from seeking reasonable attorney fees; chief was entitled to prelitigation attorney fees; trial court was not required to apportion between city and LGPI fees from before date judgment was entered against the city; trial court was required to apportion between the city and LGPI fees from date after judgment was entered against the city; and trial court did not abuse its discretion with regard to amount of attorney fees awarded.

Reversed and remanded with instructions.

Mooney, J., filed dissenting opinion.

Procedural Posture(s): On Appeal; Motion for Attorney's Fees.

Crook County Circuit Court, 14CV08987, 14CV08987; A. Michael Adler, Senior Judge.

Attorneys and Law Firms Robert E. Franz, Jr., Springfield, argued the cause for appellants, City of Prineville and Michael Boyd. Also on the briefs was the Law Office of Robert E. Franz, Jr. Lindsay H. Duncan, Portland, argued the cause for appellants, League of Oregon Cities and Association of Oregon Counties.

Also on the briefs were Janet M. Schroer and Hart Wagner LLP. Roxanne L. Farra, Bend, argued the cause for respondent.

Also on the brief were R. Kyle Busse, Roxanne L. Farra, P. C. and Markowitz Herbold PC. Before Shorr, Presiding Judge, and Mooney, Judge, and Pagán, Judge.

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Bush v. City of Prineville, --- P.3d ---- (2023) 325 Or.App. 37

Opinion PAGÁN, J. **1 *39 This case comes before us for the third time, as we again address supplemental judgments awarding attorney fees to plaintiff. In the first appeal, we reversed a supplemental judgment awarding plaintiff $639,932 in attorney fees and we remanded for further proceedings. Bush v. City of Prineville, 301 Or App 674, 676, 457 P.3d 324 (2020) (Bush I). In the second appeal, without reaching the merits, we reversed and remanded. Bush v. City of Prineville, 301 Or App 697, 698, 456 P.3d 334 (2020) (Bush II). On remand, the trial court entered its third supplemental judgment, awarding plaintiff attorney fees of $623,484.83 against the City of Prineville (the city) and the Local Government Personnel Institute (LGPI), jointly and severally.

On appeal, the city and LGPI (collectively, defendants) raise several assignments of error. They argue that plaintiff is not entitled to attorney fees because of the limitations on liability in the Oregon Tort Claims Act, ORS 30.260 to 30.300 (OTCA). We agree with the trial court that ORS 30.272(2) (f) does not preclude an award of attorney fees because its limitation on liability applies to damages. 1 However, we reverse the third supplemental judgment and remand for the trial court to apportion fees between the city and LGPI after December 2, 2014, and to determine whether plaintiff incurred reasonable fees from December 3, 2014 to September 10, 2015. 2

I. FACTUAL BACKGROUND AND PROCEDURAL HISTORY Plaintiff served as the city's police chief, and he also served in the Oregon National Guard. Bush I, 301 Or App at 676, 457 P.3d 324. In 2013, the city retained LGPI to investigate plaintiff's *40 use of leave from his police duties to perform National Guard duties. Id. On September 3, 2013, the city placed plaintiff on administrative leave. On July 15, 2014, based on the results of LGPI's investigation, the city terminated plaintiff.

One day later, on July 16, 2014, plaintiff filed a complaint against the city, LGPI, and the city's police captain. Plaintiff's first claim for relief asserted a count against the city for discrimination against a uniformed service member in

violation of ORS 659A.082. The first claim for relief also asserted a count against LGPI for aiding and abetting discrimination in violation of ORS 659A.030(1)(g). Plaintiff's second and third claims against the city were for wrongful discharge and intentional infliction of emotional distress.

Plaintiff's fourth claim, filed against the city's police captain, was for defamation. **2 Less than three months later, in early October 2014, the city and its police captain made an ORCP 54 E offer of judgment, offering to allow judgment to be entered against them in the amount of $667,701, “plus reasonable attorney fees, costs and disbursements as determined pursuant to ORCP 68.” On October 8, 2014, plaintiff accepted the offer, and, on December 2, 2014, the trial court entered an amended stipulated limited judgment against the city and its police captain. The judgment awarded plaintiff $666,701, and reasonable attorney fees, “with the amount of same to be determined by this Court at a later date pursuant to ORCP 68.” In May 2015, LGPI made an ORCP 54 E offer of judgment which plaintiff accepted. On August 13, 2015, the trial court entered a stipulated general judgment against LGPI on plaintiff's claim for aiding and abetting discrimination.

The judgment awarded plaintiff $250,001 against LGPI, and reasonable attorney fees, “with the amount of same to be determined by this Court at a later date pursuant to ORCP 68.”

On September 10, 2015, plaintiff filed a statement for attorney fees. Defendants filed objections and the trial court held a hearing in May 2016. In April 2017, the trial court issued a letter ruling and order awarding plaintiff all of his requested attorney fees. On August 7, 2017, the trial *41 court entered a supplemental judgment awarding plaintiff attorney fees of $639,932. On appeal, we concluded that the trial court erred in awarding fees for claims other than the claims relating to wrongful discrimination under ORS 659A.082. Bush I, 301 Or App at 683-84, 457 P.3d 324. We reversed the supplemental judgment and remanded for further proceedings. Id. at 684, 457 P.3d 324. On the same day, we reversed a second supplemental judgment, which had denied plaintiff's request for “fees on fees.” Bush II, 301 Or App at 698, 456 P.3d 334.

On remand, plaintiff deducted fees for work associated with the wrongful discharge, intentional infliction of emotional distress, and defamation claims. Plaintiff deducted $15,670.00 from his request, resulting in a new fee and cost request of $625,916.88. The city and LGPI filed objections.

The city argued, among other things, that the award of

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Bush v. City of Prineville, --- P.3d ---- (2023) 325 Or.App. 37

attorney fees exceeded the limitation on liability in ORS 30.272. The city also objected to the amount of fees. LGPI objected, arguing that plaintiff failed to separate and identify the fees relating to his aiding and abetting claim. In October 2020, the trial court held a hearing and requested that the parties submit proposed findings of fact and conclusions of law.

On February 26, 2021, the trial court adopted plaintiff's proposed findings of fact and conclusions of law. The trial court found that plaintiff's acceptance of the city's offer of judgment formed “a global settlement contract of his claims.” (Emphasis in original.) The court found that the limitations on liability in the OTCA did not apply. Addressing apportionment, the trial court found that plaintiff was not required to separate fees relating to LGPI's aiding and abetting claim. In its third supplemental judgment, entered on April 16, 2021, the trial court awarded attorney fees of $623,484.83 against the city and LGPI, jointly and severally. The city and LGPI appeal.

II. ANALYSIS We begin with the city's second assignment of error. It presents a question of statutory construction, which we review for errors of law. OR-OSHA v. CBI Services, Inc., 356 Or. 577, 585, 341 P.3d 701 (2014). LGPI joins in the argument. *42 A. The limitation on liability in ORS 30.272(2)(f) applies to damages, not attorney fees.

Based on the judgment entered against the city in the amount of $667,701, the city claims that the limitation on liability in ORS 30.272(2)(f) has been exceeded. Therefore, according to the city and LGPI, the trial court erred in awarding any attorney fees to plaintiff. That argument requires us to construe ORS 30.272(2)(f), which we do by applying the principles set forth in State v. Gaines, 346 Or. 160, 206 P.3d 1042 (2009). We attempt to discern the meaning of the statute intended by the legislature, examining the text in context, any relevant legislative history, and pertinent rules of interpretation. Id. at 171-72, 206 P.3d 1042.

1. Text **3 ORS 30.272(2)(f) provides, in part, that the “liability of a local public body” may not exceed “$666,700, for causes of action arising on or after July 1, 2014, and before July 1,

2015.” 3 The key word here is “liability,” which is not defined in the OTCA. See ORS 30.260.

Dictionary definitions of the term “liability” available in 2009 included “an amount that is owed whether payable in money, other property or services,” and “an *43 obligation or duty which is owed by one person to another * * * and for breach of which the law gives a remedy to the latter (as damages, restitution, specific performance, injunction).”

Webster's Third New Int'l Dictionary 1302 (unabridged ed.

2002). Liability was defined as “[t]he quality or state of being legally obligated or accountable; legal responsibility to another or to society, enforceable by civil remedy or criminal punishment,” and as “[a] financial or pecuniary obligation.”

Black's Law Dictionary 997 (9th ed. 2009). Liability was also defined as “[t]hat for which one is liable, * * * [especially] the debts or pecuniary obligations of a person or company.” 8 The Oxford English Dictionary 877-78 (2nd ed. 1989).

Relying in part on definitions of “liability” as a “duty to pay money” or “an amount that is owed,” the Supreme Court has construed the word broadly to mean “the duty or legal responsibility to pay money on a tort claim.” Griffin v. TriMet, 318 Or. 500, 508, 870 P.2d 808 (1994). So construed, the Supreme Court held that a $100,000 limitation on liability in former ORS 30.270(1)(b) (1985), 4 included attorney fees.

Griffin, 318 Or. at 508-09, 870 P.2d 808. As explained below, that statute was amended and later repealed. Ultimately, we conclude that the legislature did not intend for the word “liability” in ORS 30.272 to be understood in the same way as construed in Griffin.

2. Context **4 Turning from text to context, other provisions in the OTCA suggest that the term “liability” in ORS 30.272 *44 refers to an obligation to pay damages, not attorney fees.

Indeed, the OTCA contains only one reference to attorney fees in ORS 30.285. In that provision, which addresses indemnification, ORS 30.285 refers in its title to a public body's “obligation for judgment and attorney fees.” 5 That provision identifies circumstances under which a public body's officers, employees, or agents “shall be indemnified against liability and reasonable costs of defending the claim.”

ORS 30.285(5). 6 If the “reasonable costs of defending the claim” include attorney fees, then “liability,” as used in that section of the OTCA, does not. Otherwise, the legislature's reference to the “reasonable costs of defending the claim” would be mere surplusage. See Crystal Communications, Inc.

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Bush v. City of Prineville, --- P.3d ---- (2023) 325 Or.App. 37

v. Dept. of Rev., 353 Or. 300, 311, 297 P.3d 1256 (2013) (“As a general rule, we construe a statute in a manner that gives effect, if possible, to all its provisions.”).

By contrast, there are numerous references to damages in the OTCA. For example, ORS 30.265(3) refers to “the damages allowed under ORS 30.271, 30.272 or 30.273.” ORS 30.265(4) addresses “the limitations on damages imposed under ORS 30.271, 30.272 or 30.273.” ORS 30.269(1) explains that punitive damages may not be awarded, and ORS 30.269(4) provides that “[t]he limitations imposed under ORS 30.271(2) and 30.272(2) on single claimants include damages claimed for loss of services or loss of support arising out of the same tort.” ORS 30.298(4)(b) addresses the liability of foster parents and indicates that the liability “is limited to economic damages.”

As already noted, in Griffin, the Supreme Court held that the limitation on liability in former ORS 30.270(1)(b) (1985) included attorney fees. The Supreme Court pointed out that the provision, which stated that the “liability” of a public body could not exceed specified amounts, contained no qualification indicating that the limit applied only to damages.

Griffin, 318 Or. at 508, 870 P.2d 808. The Supreme Court stated *45 that, “[h]ad the legislature intended the limit on ‘liability’ to apply only to liability for tort damages, it could have said so.” Id. at 508-09, 870 P.2d 808. The Supreme Court noted that “[o]ne obvious purpose of the OTCA was to allow public bodies to insure against potential liability for their torts.” Id. at 509, 870 P.2d 808. “If amounts awarded against a public body as attorney fees and costs, rather than as damages, were excluded from the liability limits in the OTCA, the ability of a public body to determine with any certainty its potential liability for its torts would be diminished.” Id. at 510, 870 P.2d 808. However, the Supreme Court recognized that the statute was amended in 1987, and the amended version expressly referred to damages. Id. at 509 n 7, 514 n 12, 870 P.2d 808.

The amended statute, former ORS 30.270(1)(b) (1987), referred to the liability of a public body as consisting of “special and general damages,” and it provided that the total award of special damages could not exceed $100,000. 7 The Supreme Court determined that the plaintiff could not take advantage of those amendments because his claim accrued before they became effective. Griffin, 318 Or. at 506, 870 P.2d 808. The court expressed no opinion on the effect of the 1987 amendments. Id. at 514 n 12, 870 P.2d 808.

**5 Based on those amendments, in Anglin v. Dept. of Corrections, 160 Or App 463, 478, 982 P.2d 547, rev. den., 329 Or. 357, 994 P.2d 124 (1999), we concluded that a different analysis applied to former ORS 30.270(1)(b) (1987), which expressly referred to the liability limitation as consisting of general and special damages. 8 As we explained in *46 Anglin, 160 Or App at 478, 982 P.2d 547, “[i]n order for defendants to prevail on their argument that attorney fees must be included within the liability limitation of that statute, they would need to demonstrate that either ‘general damages,’ or ‘special damages,’ or both, as those terms are used in that statute, include attorney fee awards.” Anglin continued, “There is no basis to conclude from the text, the context, or even the legislative history, that the legislature intended the phrase ‘general and special damages’ to mean ‘general and special damages and attorney fee awards.’ ” Id. at 479, 982 P.2d 547.

Despite Anglin's holding, our query is not concluded. In 2009, the legislature repealed ORS 30.270 and replaced it with ORS 30.272. Or. Laws 2009, ch. 67, §§ 4, 20. The new provision, which addresses the liability limits of local public bodies, no longer refers to general and special damages. Instead, it simply provides that for causes of action accruing from July 2014 to July 2015, the “liability” of a local public body may not exceed $667,700. ORS 30.272(2)(f). Because the statute no longer refers to damages, defendants claim that attorney fees are once again included in the liability limits of the OTCA. In support of their position, defendants cite Burley v.

Clackamas County, 313 Or App 287, 496 P.3d 652, rev. den., 369 Or. 69, 499 P.3d 1281 (2021). In Burley, we affirmed the trial court's reduction of the plaintiff's requested attorney fees to conform to the limitation on liability in ORS 30.272(2)(f).

Id. at 288, 496 P.3d 652. However, in that case, the plaintiff did not dispute the trial court's decision to include her attorney fees within the OTCA limits. Id. at 289, 496 P.3d 652. Instead, she argued that the statutory cap did not apply because her whistleblower-retaliation claim did not arise out of a “single accident or occurrence.” Id. We rejected that argument and therefore affirmed the trial court's decision. Id. But, in Burley, we were not asked to address whether attorney fees should have been included within the liability limit of ORS 30.272(2) (f). 9 *47 The key question, then, is whether the repeal of former ORS 30.270, and its replacement with ORS 30.272, which no longer refers to damages, indicates that the legislature

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intended to return to Griffin's broad interpretation of “liability.” Ordinarily, we “assume that, when the legislature adopts wording from earlier versions of statutes, it intends to adopt any judicial construction that has been given that wording at the time of enactment.” Haynes v. Adair Homes, Inc., 231 Or App 144, 153, 217 P.3d 1113 (2009), rev. den., 348 Or. 414, 233 P.3d 817 (2010). But that assumption applies when there is “no evidence that the legislature adopted the same wording from the predecessor statute, but nevertheless intended to imbue that wording with meaning different from what the courts had given it.” Id. **6 Here, as discussed below, there is evidence regarding why the legislature removed the distinction between economic and noneconomic damages when it repealed former ORS 30.270 and replaced it with ORS 30.272. Based on that evidence, we cannot simply assume that the legislature intended to return to Griffin's broad construction of “liability” as including attorney fees.

3. Legislative history 10 At the public hearings on Senate Bill (SB) 311 (2009), the bill that led to the enactment of ORS 30.272, former Representative Greg MacPherson explained that the new legislation was proposed to address the impact of *48 Clarke v. OHSU, 343 Or. 581, 175 P.3d 418 (2007). Audio Recording, Senate Committee on Judiciary, SB 311, Jan. 22, 2009, at 0:01:23 (comments of former Rep. Greg MacPherson); Audio Recording, House Committee on Judiciary, SB 311 A, Mar. 25, 2009, at 0:02:05 (comments of former Rep. Greg MacPherson), https://olis.oregonlegislature.gov (accessed Dec. 23, 2022).

Clarke held that provisions of the OTCA, as applied to the facts of the case, violated the remedy clause in Article I, section 10, of the Oregon Constitution. Clarke, 343 Or. at 610, 175 P.3d 418. The injured plaintiff brought an action against Oregon Health Sciences University (OHSU), and the individuals who treated him. 11 Id. at 586, 175 P.3d 418. He sought economic damages of about $12 million and noneconomic damages of $5 million. Id. The trial court entered judgment against OHSU in the amount of $200,000, the limit on liability at the time. Id. at 587, 175 P.3d 418. The Supreme Court held that that remedy was inadequate. Id. at 610, 175 P.3d 418. Clarke contains no discussion of whether the limitation on liability included or could include attorney fees.

After Clarke, public entities worried that they had “moved into an uncapped environment” for tort liability, and they faced significantly increased costs for insurance. Testimony, Senate Committee on Judiciary, SB 311, Jan. 22, 2009, Ex. 2 (statement of Steve Stadum, OHSU). At the same time, there was a recognition that “the current $200,000 cap—which has been ruled unconstitutional by the Supreme Court—is too low and should be raised.” Id. To address those problems, the leadership of the House and the Senate appointed a task force. Audio Recording, Senate Committee on Judiciary, SB 311, Jan. 22, 2009, at 0:03:52, 0:17:34 (comments of former Rep. Greg MacPherson), https://olis.oregonlegislature.gov (accessed Dec. 23, 2022). It was comprised of members from the House and Senate, as well as representatives from OHSU, the Oregon Trial Lawyers Association (OTLA), and local governments. Id. The task *49 force produced SB 311, which sought to balance the interests of providing an adequate remedy to injured parties while also ensuring that public entities could obtain affordable insurance. Audio Recording, Senate Committee on Judiciary, SB 311, Jan. 22, 2009, at 0:22:50 (statement of Steve Stadum, OHSU), https:// olis.oregonlegislature.gov (accessed Dec. 23, 2022). **7 SB 311 proposed two tiers of new limits; one set of tort caps for state government and OHSU, and a lower set for local public bodies. Audio Recording, Senate Committee on Judiciary, SB 311 A, Mar. 25, 2009, at 0:06:55 (comments of former Rep. Greg MacPherson), https://olis.oregonlegislature.gov (accessed Dec. 23, 2022); Testimony, Senate Committee on Judiciary, SB 311, Jan. 22, 2009, Ex. 1 (Recommendation of the Oregon Tort Claims Task Force), Ex. 2 (statement of Steve Stadum), Ex. 3 (letter from Bill Blair). Despite extensive negotiations, there was no discussion of including attorney fees within the new limits.

Instead, a staff measure summary referred to the new caps as “damage limits.” Staff Measure Summary, Senate Committee on Judiciary, SB 311 A, Feb. 12, 2009. 12 And a fiscal analysis described the bill as increasing the “per claim and per occurrence damage limits.” Fiscal Analysis of Proposed Legislation, Legislative Fiscal Office, SB 311 A, Feb. 12, 2009. Those repeated references to the limitations on liability as “damage limits” are inconsistent with including attorney fees within the statutory caps.

The OTCA task force members and participants operated under a shared assumption that they were proposing increased limits for damages. For example, Bill Blair, *50 a task force member representing local governments, 13 described the limits on liability as consisting of property damage,

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economic damages, and noneconomic damages, but he did not include attorney fees within the limits. Ex. C, Joint Interim OTCA Task Force Hearing, Sept. 25, 2008. Mark Rauch, the general counsel for the City County Insurance Services Trust (CIS), 14 described the OTCA's liability limits as a “cap on damages” that had been “crucial to our ability to successfully cover those exposures as a ‘pool’ and obtain affordable reinsurance above the pool's self-insured retention level ($500,000 per occurrence).” Ex. H, Joint Interim OTCA Task Force Hearing, June 19, 2008.

Similarly, representatives of OHSU and the OTLA approached the caps as “damage limitations.” Ex. A, Joint Interim OTCA Task Force Hearing, Sept. 25, 2008.

Their memorandum of understanding referred to their new proposed liability limits as “tort claims damage cap[s].”

Id. They proposed “no separate sub-limit for non-economic damages. Previously, non-economic damages were capped as a sub-limit of $100,000 within the $200,000 tort cap limit.”

Id. Their initial proposal, as reflected in a memorandum of understanding, was to raise the “per claim” limit to $1.5 million for all public bodies, and to raise the “per occurrence” limit to $3 million. Id. Local governments balked at that proposal and instead proposed a “two-tiered cap structure,” with lower limits for local governments. Ex. C, Joint Interim Task Force Hearing, Sept. 25, 2008. Initially, local governments were reluctant to jettison the sublimit on noneconomic damages. Ex. A, Joint Interim OTCA Task Force, Oct. 30, 2008. As explained by Blair, “[i]t is critically important to the stability and success of local government risk management that ‘blue sky’ damage claims be effectively and separately capped. While a very good public policy case can be made for a cap high enough to assure that the overwhelming majority of injured claimants will be compensated for the economic *51 cost that comes with their injuries, the ‘noneconomic’ element of pain and suffering, is not capable of mathematical computation and subjects the public body defendant to emotionally loaded verdicts.” Ex. C, Joint Interim OTCA Task Force, Sept. 25, 2008. **8 Ultimately, representatives of local governments agreed that the new legislation did not have to distinguish between economic and noneconomic damages so long as it included a two-tiered structure that involved higher caps for the state and OHSU and lower caps for other local government entities. Ex. A, Joint Interim OTCA Task Force Hearing, Oct. 30, 2008; Ex. A, Joint Interim OTCA Task Force

Hearing, Nov. 17, 2008. Blair explained that, although OHSU could adjust to increased insurance costs by increasing fees for services, most local government entities did not have that flexibility. Ex. D, Joint Interim OTCA Task Force Hearing, Oct. 30, 2008. Blair estimated that increasing local government limits to $1 million would result in a 14 percent increase in insurance costs. 15 Id. Blair described the new proposed limits as “[c]ombining and raising economic and non-economic damage caps.” Id. Based on descriptions of that kind, we cannot reasonably infer an intention to return to Griffin's broad construction of “liability” as including both damages and attorney fees.

At the public hearings on SB 311, there was further discussion about the proposal to eliminate the distinction between economic and noneconomic damages. MacPherson explained that the “key driver” in eliminating the distinction was the increase in medical costs and a recognition that those costs are economic damages that can “dwarf any other category of damage.” Audio Recording, Senate Committee on Judiciary, SB 311, Jan. 22, 2009, at 0:16:10 (comments of former Rep. Greg MacPherson), https://olis.oregonlegislature.gov (accessed Dec. 23, 2022). According to *52 MacPherson, the distinction was eliminated to simplify litigation and “up to the $1.5 million and $3 million new caps, a claimant could present their case with either category of damage.” Id. at 0:17:15. MacPherson understood that claimants could pursue damages “up to” the new limits, so it is reasonable to infer that MacPherson did not view the new limitations on liability as applying to attorney fees.

Similarly, for Richard Lane of the OTLA, who was a member of the task force, eliminating the reference to economic and noneconomic damages meant providing a more adequate remedy for injured persons. Audio Recording, House Committee on Judiciary, SB 311 A, Mar. 25, 2009, at 0:24:10 (comments of Richard Lane), https:// olis.oregonlegislature.gov (accessed Dec. 23, 2022). As explained by Lane in a written submission to the task force, “we also feel it is absolutely imperative that we increase the cap as a whole, not breaking into economic and non-economic losses. When someone is injured by another in a negligent way, we should not be deciding whose life is worth more—a CEO of a downtown Portland business, a child, a stay at home mom, a steelworker, a retired senior citizen. When we limit non economic damages that is exactly what we are doing. We are telling the child, the stay at home mom, the senior that because they have no ‘on paper’ wages, they are not worth as much.” Ex. A, Joint Interim Oregon Tort Claims Act Task

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Force, Sept. 25, 2008. For the OTLA, then, a main concern was to permit injured plaintiffs to recover more noneconomic damages. That reasoning cuts against the assumption that the new limitations on liability were intended to consist of both damages and attorney fees.

At a work session on SB 311, Senator Alan Bates described the new proposed limits as “universal caps” that did not differentiate between economic and noneconomic damages.

Audio Recording, Senate Committee on Judiciary, SB 311, Feb. 11, 2009, at 0:19:01 (comments of Sen. Alan Bates), https://olis.oregonlegislature.gov (accessed Dec. 28, 2022).

And on the House floor, Representative Jeff Barker referred to SB 311 as increasing “the per claim damage limits recoverable” under the OTCA. Audio Recording, House Floor Debate, SB 311, Apr. 6, 2009, at 0:26:01 (comments of *53 Rep. Jeff Barker), https://olis.oregonlegislature.gov (accessed Dec. 23, 2022). He also referred to increases in the “per occurrence damage limits.” Id. at 0:26:28. Barker noted that the bill provided for direct appeal to the Supreme Court for challenges to the constitutionality of the “damage limits.”

Id. at 0:28:17. **9 Accordingly, what the legislative history reveals about the repeal of former ORS 30.270, and its replacement with ORS 30.272, is that some parties were interested in eliminating the sublimit on economic damages to more adequately compensate injured plaintiffs who required expensive, long-term medical care, while others were interested in eliminating the sublimit on noneconomic damages to more adequately compensate injured parties with less earning potential. But both justifications undermine the assumption that the legislature intended to return to Griffin's interpretation of “liability.” Griffin's interpretation would mean less compensation for injured plaintiffs at a time when stakeholders from both sides recognized the need for new, higher limits.

At the same time, there was also a concern about the increased costs of insurance, and, as a result, there were extensive negotiations about what the new, higher limitations on liability should be, about how they should differ for different kinds of public entities, and about how they could increase over time. Statements made during those discussions indicate that many participants understood the new limits as caps on damages. Thus, although the legislature used the same word “liability” that was construed in Griffin, and although it eliminated the reference to economic and noneconomic damages, we conclude that the legislature “intended to

imbue” the word “liability” with a meaning that differed from the Supreme Court's earlier construction. Haynes, 231 Or App at 153, 217 P.3d 1113. 16 *54 In Horton v. OHSU, 359 Or. 168, 376 P.3d 998 (2016), the Supreme Court analyzed the legislative history of the 2009 amendments to the OTCA in a manner that supports our construction. According to the Supreme Court: “The legislature recognized that the increased damages available under the revised Tort Claims Act would not provide a complete recovery to everyone injured as a result of the state's tortious acts. However, those increased limits provide a complete recovery in many cases, greatly expand the state's liability in the most egregious cases, and advance the purposes underlying the doctrine of sovereign immunity while ensuring that a solvent defendant is available to pay a plaintiff's damages up to the amount of the Tort Claims Act limit.

Given the legislature's efforts to accommodate the state's constitutionally recognized interest in sovereign immunity and a plaintiff's constitutional right to a remedy, we cannot say that the $3,000,000 tort claims limit on damages against state employees is insubstantial in light of the overall statutory scheme, which extends an assurance of benefits to some while limiting benefits to others.” **10 Horton, 359 Or. at 223-24, 376 P.3d 998 (emphasis added). Horton indicates that a plaintiff can pursue damages up to the limits on liability, and there is no indication that the limits were also intended to encompass attorney fees. 17 See Busch v. McInnis Waste Systems, Inc. 366 Or. 628, 638, 468 P.3d 419 (2020) (“The Oregon Tort Claims Act waives the state's sovereign immunity up to the damages limits.”).

It follows that the legislature had a cognizable intent when it changed the language of the statute, and, based on the text, context, and legislative history, we conclude that the legislature did not *55 intend for the limitation on liability in ORS 30.272(2)(f) to include attorney fees. 18 4. Additional considerations regarding the OTCA Defendants argue that if the liability limits in the OTCA do not include attorney fees, then “there are no fixed monetary limits of the liability of a city, because the limits will change with every award of attorney fees.” We recognize that the liability limits in the OTCA help public entities control costs. See Burley, 313 Or App at 292, 496 P.3d 652 (“[T]he limitation on liability under the OTCA was enacted to protect the

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financial stability of public bodies and to enable them to obtain insurance.”). We also recognize that including attorney fees with the limitations on liability creates more uncertainty regarding public entities' potential exposure. Griffin, 318 Or. at 510, 870 P.2d 808. But what spurred the 2009 amendments was a concern to provide an adequate, but not unlimited, remedy for injured plaintiffs, and we cannot ignore the repeated references to the proposed statutory caps as “damage limits.” Furthermore, not every party who prevails on a tort claim against a public entity is entitled to attorney fees. In the instant case, plaintiff is entitled to reasonable attorney fees because he prevailed on fee-bearing claims of discrimination and aiding and abetting discrimination. See Bush I, 301 Or App at 683-84, 457 P.3d 324.

Finally, it is worth noting the inherent contradiction between defendants' position and the underlying settlement. The city agreed to pay plaintiff $667,701, “plus reasonable attorney fees, costs and disbursements as determined pursuant to ORCP 68.” That settlement offer was for exactly one dollar over the amount which defendants claim shields them from further exposure, and the offer appears to contemplate a motion for attorney fees that would be considered separately from the settlement. Now defendants argue that plaintiff is not entitled to any attorney fees because the award exceeded a limitation on liability in the OTCA. Plaintiff argues that settling for one dollar over the cap waives the argument that the cap applies in this *56 case, regardless of what we might hold otherwise. Although our holding that the cap does not extend to attorney fees obviates the need to address plaintiff's waiver argument, we agree with plaintiff that defendants have taken what appears to be an inherently inconsistent position.

In the instant case, the trial court's award of damages to plaintiff in an amount exceeding the limitation on liability in ORS 30.272(2)(f) did not preclude him from seeking reasonable attorney fees from the city and LGPI. B. The Arguments Regarding When Attorney Fees Were Incurred and the Failure to Apportion Attorney Fees Between the City and LGPI **11 Next, we consider various assignments of error that relate to the trial court's decision to award attorney fees against the city and LGPI jointly and severally from September 3, 2013 to September 10, 2015.

In its third and fourth assignments of error, the city claims that the trial court erred in awarding attorney fees for work performed before plaintiff filed his lawsuit on July 16, 2014, and after judgment was entered against the city on December

2, 2014. 19 In its fifth assignment, the city claims that the trial court erred in awarding attorney fees against the city that related solely to LGPI. In its second assignment of error, LGPI argues that the trial court erred in awarding fees against LGPI that were not incurred in the prosecution of plaintiff's aiding and abetting claim. And in its third assignment, LGPI argues that plaintiff should not have been awarded attorney fees after judgment was entered against LGPI on August 13, 2015.

“Whether a party is entitled to attorney fees presents a question of law, but whether fees are reasonable is a factual determination that we review for abuse of discretion.”

Makarios-Oregon, LLC v. Ross Dress-for-Less, Inc., 293 Or App 732, 739, 430 P.3d 142, adh'd to as modified on *57 recons., 295 Or App 449, 430 P.3d 1125 (2018). “[W]hen a statute authorizes a trial court to award attorney fees to a plaintiff who prevailed in litigation, the court is not limited to awarding only those fees incurred after the plaintiff filed her complaint.” Fadel v. El-Tobgy, 245 Or App 696, 709, 264 P.3d 150 (2011), rev. den., 351 Or. 675, 276 P.3d 1123 (2012).

In the instant case, the trial court awarded attorney fees for work done before the case was filed. The trial court made detailed findings regarding the extensive work performed between September 3, 2013, when the city placed plaintiff on administrative leave, and July 16, 2014, when plaintiff filed his lawsuit. Only three months later, the city made an offer of judgment, which supports plaintiff's claim that the fees incurred before the lawsuit helped to achieve the success that plaintiff enjoyed. See Fadel, 245 Or App at 710, 264 P.3d 150 (plaintiff was entitled to an award of prelitigation fees); see also Bearden v. N.W.E., Inc., 298 Or App 698, 708-09, 448 P.3d 646 (2019) (plaintiff was entitled to an award of attorney fees incurred during an administrative proceeding that preceded the litigation). We find no error in the trial court's award of prelitigation attorney fees.

However, a different analysis applies to the trial court's award of post-judgment attorney fees and its decision not to apportion fees between the parties. Judgment was entered against the city on December 2, 2014. Yet, implicit in the trial court's third supplemental judgment is its determination that both the city and LGPI remained jointly and severally responsible for all attorney fees until September 10, 2015.

We recognize that a party may be entitled to reasonable postjudgment fees if they are related to the prosecution of the action. See ORCP 68 A(1) (Attorney fees are “the reasonable value of legal services related to the prosecution or defense of an action.”); see also TriMet v. Aizawa, 277 Or App 504,

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510-11, 371 P3d 1250 (2016), aff'd, 362 Or. 1, 403 P.3d 753 (2017) (collecting cases discussing recovery of fees for work done after entry of judgment). But here, the trial court did not explain why both the city and LGPI should be jointly and severally responsible for plaintiff's attorney fees incurred after December 2, 2014, when the sole remaining defendant in the case was LGPI. **12 *58 When there are common issues, apportionment of attorney fees among different claims or parties may not be required. Village at North Pointe Condo. Assn. v. Bloedel Constr., 278 Or App 354, 369-71, 374 P.3d 978, adh'd to on recons., 281 Or App 322, 383 P.3d 409 (2016). Here, plaintiff sued the city for discrimination against a uniformed service member, ORS 659A.082, and he sued LGPI for aiding and abetting the city's discrimination, ORS 659A.030(1)(g). The trial court indicated that, to prevail on his aiding and abetting claim against LGPI, plaintiff was required to prove the city's underlying discrimination. Based on that determination, we cannot say that there was an abuse of discretion in the trial court's decision to award attorney fees against the city and LGPI jointly and severally up to December 2, 2014. See Village at North Pointe Condo. Assn., 278 Or App at 369, 374 P.3d 978 (apportionment decisions reviewed for abuse of discretion).

But, after December 2, 2014, LGPI was the sole remaining defendant. Yet the trial court's third supplemental judgment holds the city responsible for attorney fees that plaintiff continued to incur until September 10, 2015. The trial court provided no explanation for why both parties were jointly and severally responsible for those fees. For that reason, we reverse the third supplemental judgment and remand for the trial court to apportion fees between the city and LGPI from December 3, 2014 to September 10, 2015. In addition, plaintiff must explain the reasonableness of the fees he incurred during that time. See ORS 659A.885(1) (“the court may allow the prevailing party costs and reasonable attorney fees”); ORCP 68 A(1) (defining attorney fees as “the reasonable value of legal services”); ORS 20.075 (the factors courts shall consider include the objective reasonableness of the parties during the proceedings and in pursuing settlement of the dispute). The trial court's findings “need not be lengthy or complex, but they must describe the relevant facts and legal criteria underlying the court's decision in terms that are sufficiently clear to permit meaningful appellate review.”

Makarios-Oregon, 293 Or App at 741, 430 P.3d 142.

C. The Remaining Arguments

In its first assignment of error, the city argues that the trial court's finding on remand of a global settlement *59 contract was contrary to the law of the case. But there is no indication that the city made that argument below. We conclude that the argument was not preserved, and we decline to address it. See Willamette Oaks, LLC v. City of Eugene, 295 Or App 757, 767-68, 437 P.3d 314, rev. den., 365 Or. 192, 443 P.3d 1156 (2019) (concluding that the appellant's assignment of error was unpreserved because the argument based on the law of the case doctrine was not made in the lower tribunal).

In the city's sixth assignment of error, and in LGPI's fourth assignment, they raise challenges to the amount of attorney fees awarded. Whether fees are reasonable is a factual determination that we review for abuse of discretion.

Makarios-Oregon, 293 Or App at 739, 430 P.3d 142. Here, the trial court observed that the case was complicated. For example, the trial court found that there was “a mountain of information at issue. * * * LGPI's investigation of [p]laintiff covered a six-year period, and took more than 300 days to complete. The LGPI investigator interviewed plaintiff for four days. The transcript of that interview is 541 pages long.

There were tens of thousands of pages of potentially relevant information.” Findings of that nature support the trial court's determination that most of the attorney fees plaintiff incurred were reasonable.

In challenging those findings, the city objects to work performed by a paralegal, and the city complains about blockbilling and vague time entries. However, the city provides no specific examples. Based on its failure to do so, we cannot conclude that the trial court abused its discretion. See Quick Collect, Inc. v. Higgins, 258 Or App 234, 243, 308 P.3d 1089 (2013) (finding no abuse of discretion in the amount of the fee award because the appellant's objections lacked specificity). **13 Regarding work that it claims was duplicative, the city provides examples, which relate to tasks performed by an attorney with the assistance of a paralegal. But it is not unusual for a paralegal to assist an attorney, especially in a complicated case. Having reviewed the examples of alleged duplicative billing, we find no abuse of discretion in the trial court's award. Finally, LGPI provides examples of time entries from March to September 2015 that it claims were *60 vague and excessive. Because we reverse and remand for the trial court to apportion fees between the city and LGPI after December 2, 2014, and to assess the reasonableness of the fees sought after that date, the trial court will be in a better position to address that argument on remand.

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We reiterate that we find no error or abuse of discretion in the trial court's decision to award fees against the city and LGPI, jointly and severally, from September 3, 2013 to December 2, 2014. For that period of time, the trial court may simply enter an award of attorney fees against the city and LGPI, jointly and severally, that is consistent with this opinion and with the trial court's prior findings. However, from December 3, 2014 to September 10, 2015, the trial court must apportion fees between the city and LGPI and explain how it assessed whether the fees sought were reasonable. We reverse and remand the third supplemental judgment for the trial court to make the appropriate findings.

Reversed and remanded.

MOONEY, J., dissenting.

The Oregon Tort Claims Act (OTCA) “waives the state's sovereign immunity,” but only to the extent waived by the “express terms” of the OTCA. Sherman v. Dept. of Human Services, 368 Or. 403, 418, 492 P.3d 31 (2021).

The OTCA carefully balances the purposes underlying the state's constitutionally recognized interest in sovereign immunity embodied in Article IV, section 24, of the Oregon Constitution, with an injured person's constitutionally recognized right to a remedy by due course of law embodied in Article I, section 10, of the Oregon Constitution. As the majority acknowledges, the legislature amended the specific OTCA language at issue in this case at least once in response to appellate court opinions. That suggests that our tripartite system of government, with its built-in checks and balances, is working—not only to prevent the misuse of power, but also to encourage the branches of government to work together for the good of the people. The legislature, in its policy and law-making role, struck a balance between the competing constitutional interests of immunity and remedy. In striking and re-striking that balance, the legislature has shown that it is aware of Oregon's appellate court opinions and that *61 it will modify state law in response to those opinions when it deems it necessary to do so. The majority assumes a legislative role today by modifying ORS 30.272(2)(f) to waive the state's immunity to liability for attorney fees. In doing so, the majority crosses a line that I am not willing to go over.

I would decide this case by applying Griffin v. TriMet, 318 Or. 500, 870 P.2d 808 (1994), to the OTCA language in question because the current language is, in all material respects, the

same as the language that was before the Supreme Court in Griffin. The statutory language at issue in Griffin was the pre-1989 version of ORS 30.270(1), that is, as relevant: “Liability of any public body *** shall not exceed: “* * * * *

“(b) $100,000 to any claimant for all other claims ***.”

The court in Griffin held that the $100,000 liability limit of the pre-1989 OTCA provision applied to attorney fees and costs awarded against a public body. 318 Or. at 503, 870 P.2d 808. The Griffin court acknowledged that ORS 30.270(1)(b) had since been amended, but it applied the version that was in effect at the time the cause of action arose. Id. at 504, 870 P.2d 808. It mentioned in a footnote that the then-current (1989) version of ORS 30.270(1)(b), which did not apply to the case before it, was different insofar as it added the words “general and special damages,” as follows: **14 “Liability of any public body *** shall not exceed: “* * * * *

“(b) $100,000 to any claimant as general and special damages for all other claim ***.”

Id. at 509 n 7, 870 P.2d 808 (quoting ORS 30.270(1)(b) (1989); emphasis omitted; formatting altered). A few years later, we relied on Griffin, and in particular footnote 7 in Griffin, to conclude that “[t]he OTCA damages limitation of ORS 30.270 (1)(b) explicitly applies to ‘general and special damages,’ ” and we found no basis to conclude that the legislature intended that phrase to include attorney fees.

Anglin v. Dept. of Corrections, 160 Or App 463, 479, 982 P.2d 547, rev. den., 329 Or. 357, 994 P.2d 124 (1999). *62 In 2009, the legislature repealed ORS 30.270 and replaced it with ORS 30.272. Or. Laws 2009, ch. 67, §§ 1, 4.

The parallel provision then provided: “(2) [L]iability of a local public body *** may not exceed:

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10

Bush v. City of Prineville, --- P.3d ---- (2023) 325 Or.App. 37

“* * * * *

“(f) $666,700, for causes of action arising on or after [certain dates].”

The language that caused this court to distinguish Anglin from Griffin was no longer part of the statute. The legislature has not modified that language since 2009. Because the language is the same in all essential respects now as it was in the prior version of the statute applied in Griffin, we should follow the Supreme Court's holding in Griffin. I do not share the majority's reluctance to assume that “when the legislature adopts wording from earlier versions of statutes, it intends to adopt any judicial construction that has been given that wording at the time of enactment.” Haynes v. Adair Homes, Inc., 231 Or App 144, 153, 217 P.3d 1113 (2009), rev. den., 348 Or. 414, 233 P.3d 817 (2010). One cannot read Griffin and Anglin without clearly understanding that the words “general and special damages” changed the meaning of former ORS 30.270(1)(b), later reenacted as ORS 30.272(2)(f). Without those words, the OTCA's limit on liability includes attorney fees. With those words, it does not.

We recently affirmed a trial court's reduction of attorney fees to comply with the liability limit of ORS 30.272(2) (f) in Burley v. Clackamas County, 313 Or App 287, 496 P.3d 652, rev. den., 369 Or. 69, 499 P.3d 1281 (2021). The majority discounts the importance of Burley to the issue before us because the parties there did not question the propriety of including attorney fees within the OTCA limit of ORS 30.272(2)(f). I agree that the issue was not raised in Burley. At the same time, when we construe a statute, we have a responsibility to do so correctly “whether or not asserted by the parties.” Stull v. Hoke, 326 Or. 72, 77, 948 P.2d 722 (1997).

I would add that it is inconsistent for the majority to discount Burley but to then rely on Horton v. OHSU, 359 Or. 168, 376 P.3d 998 (2016), to support its position that attorney *63 fees are not included in the liability limit of ORS 30.272(2)(f) when that issue was also not raised or addressed in Horton.

It was not necessary for the majority to engage in its legislative history exercise. The Supreme Court addressed the exact same issue as is before us now in Griffin and stated that the “statute does not refer to ‘damages’ at all. Had the legislature intended the limit on ‘liability’ to apply only to liability for tort damages, it could have said so.” Griffin, 318 Or. at 508-09, 870 P.2d 808. In fact, the legislature did so when it amended the statute to add “general and special damages” in 1989. When it again amended the statute to remove that same phrase, we must assume it did so fully cognizant of Griffin and Anglin. See Haynes, 231 Or App at 153-54, 217 P.3d 1113 (explaining that “we ordinarily assume that, when the legislature adopts wording from earlier versions of statutes, it intends to adopt any judicial construction that has been given that wording at the time of enactment”). The majority improperly attributes significance to the absence of any mention of “including attorney fees within the new limits” in the legislative history that it culled. 325 Or App at 49, ––– P.3d at ––––. But the “absence of legislative history on the subject of attorney fee awards tells us nothing.”

Anglin, 160 Or App at 479, 982 P.2d 547. But if there is anything to be gleaned from the legislative history as to the legislative intention in amending the statute in 2009, it is the concern that cities not be exposed to unlimited potential liability. Testimony, Senate Committee on Judiciary, SB 311, Jan. 22, 2009, Ex. 2 (statement of Steve Stadum, OHSU) (expressing concern that, after Clarke v. OHSU, 343 Or. 581, 175 P.3d 418 (2007), public entities worried that they had “moved into an uncapped environment” for tort liability, and they faced significantly increased costs for insurance). The majority opinion runs contrary to that intention. **15 I dissent from the majority opinion because it is, for the reasons I have stated, inconsistent with current statutory language and existing judicial construction of that language.

I would hold that the limitation on “liability” contained within ORS 30.272(2)(f) includes the attorney fees awarded to plaintiff in this case.

All Citations --- P.3d ----, 325 Or.App. 37, 2023 WL 2671693

Footnotes

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11

Bush v. City of Prineville, --- P.3d ---- (2023) 325 Or.App. 37

1

ORS 30.272 was added to the OTCA in 2009. Or. Laws 2009, ch. 67, § 4. The statute was amended in 2019 in a way that is not material to our analysis. Or. Laws 2019, ch. 12, § 2. For that reason, we will refer to the current version of the statute.

2

The third supplemental judgment does not address plaintiff's supplemental requests for attorney fees.

Those requests are not mentioned in the trial court's findings of fact and conclusions of law, or in its third supplemental judgment. We express no opinion regarding plaintiff's requests, if any, for attorney fees incurred after September 10, 2015.

3

In its entirety, ORS 30.272(2) provides: “The liability of a local public body, and the liability of the public body's officers, employees and agents acting within the scope of their employment or duties, to any single claimant for claims described in subsection (1) of this section may not exceed: “(a) $500,000, for causes of action arising on or after July 1, 2009, and before July 1, 2010. “(b) $533,300, for causes of action arising on or after July 1, 2010, and before July 1, 2011. “(c) $566,700, for causes of action arising on or after July 1, 2011, and before July 1, 2012. “(d) $600,000, for causes of action arising on or after July 1, 2012, and before July 1, 2013. “(e) $633,300, for causes of action arising on or after July 1, 2013, and before July 1, 2014. “(f) $666,700, for causes of action arising on or after July 1, 2014, and before July 1, 2015. “(g) The adjusted limitation provided by subsection (4) of this section, for causes of action arising on or after July 1, 2015.”

4

Former ORS 30.270(1) (1985) was amended in 1987. Or. Laws 1987, ch. 19, § 13. The statute was repealed

by Oregon Laws 2009, chapter 67, section 20. The 1985 version of the statute provided, in part: “Liability of any public body or its officers, employes or agents acting within the scope of their employment or duties on claims *** shall not exceed: “(a) $50,000 to any claimant for any number of claims for damage to or destruction of property, including consequential damages, arising out of a single accident or occurrence. “(b) $100,000 to any claimant for all other claims arising out of a single accident or occurrence.

“(c) $300,000 for any number of claims arising out of a single accident or occurrence.”

“Employes” is an alternative spelling for “employees.” Webster's Third New Int'l Dictionary 743 (unabridged ed. 2002). “Employe” was once the common spelling of the word. Byran A. Garner, Garner's Dictionary of Legal Usage, 314 (3d ed. 2011).

5

Of course, captions and headings are provided by Legislative Counsel and they are not part of the statute as enacted by the legislature. ORS 174.540; Church v. Grant County, 187 Or App 518, 526 n 4, 69 P.3d 759 (2003).

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Bush v. City of Prineville, --- P.3d ---- (2023) 325 Or.App. 37

6

ORS 30.285 was last amended in 2009. Or. Laws 2009, ch. 67, § 11. That set of amendments are the same ones that added ORS 30.272. Or. Laws 2009, ch. 67, § 4.

7

Former ORS 30.270(1)(b) (1987) provided, in part: “(1) Liability of any public body or its officers, employees or agents acting within the scope of their employment or duties on claims *** shall not exceed: “* * * * * “(b) $100,000 to any claimant as general and special damages for all other claims arising out of a single accident or occurrence unless those damages exceed $100,000, in which case the claimant may recover additional special damages, but in no event shall the total award of special damages exceed $100,000.”

8

Today, we use the terms “economic” and “noneconomic” damages rather than special and general damages.

See Clarke v. OHSU, 343 Or. 581, 608 n 17, 175 P.3d 418 (2007) (“General damages, as noted above, now are described as noneconomic damages and encompass nonmonetary losses, including damages for pain and suffering, emotional distress, injury to reputation, and loss of companionship. *** Special damages now are described as economic damages and refer to the verifiable out-of-pocket losses, including medical expenses, loss of income and future impairment of earning capacity, and costs to repair damaged property.”).

9

The dissent suggests that we “discount[ ] the importance of Burley to the issue before us.” 325 Or App at 62, ––– P.3d at –––– (Mooney, J., dissenting). But Burley is distinguishable because it does not address whether the limitation on liability in ORS 30.272(2)(f) includes attorney fees. Our opinion thus does not affect Burley's precedential mooring.

10

The dissent considers it unnecessary to analyze the statute's legislative history. 325 Or App at 63, ––– P.3d at –––– (Mooney, J., dissenting). However, “a party is free to proffer legislative history to the court, and the court will consult it after examining text and context, even if the court does not perceive an ambiguity in the statute's text, where that legislative history appears useful to the court's analysis.” Gaines, 346 Or. at 172, 206 P.3d 1042. Here, plaintiff proffered the statute's legislative history, and, because we are attempting to discern what the legislature intended when it used the word “liability” in ORS 30.272(2), and whether it intended to return to Griffin's broad interpretation of the word or adhere to Anglin's narrower interpretation, we consider ourselves obliged to examine why the legislature repealed former ORS 30.270 and replaced it with ORS 30.272(2), which no longer distinguishes between economic and noneconomic damages. Even if the same word “liability” is used, Haynes endorses an examination of why the legislature chose to use the word and what it intended. 231 Or App at 153, 217 P.3d 1113.

11

The plaintiff was born in February 1998, and he was admitted to OHSU for heart surgery in May 1998. Clarke, 343 Or. at 586, 175 P.3d 418. While in a surgical intensive care unit, he suffered prolonged oxygen deprivation causing permanent brain damage. Id. OHSU's name changed from Oregon Health Sciences University to Oregon Health & Science University in 2001.

12

As explained in the summary, the measure “[i]ncreases the per claim damage limits recoverable under the *** [OTCA] from the current $200,000 to $1.5 million for the state of Oregon and *** [OHSU], and to $500,000 for all other public entities. Increases the per occurrence damage limits under the *** [OTCA] from the current $500,000 to $3 million for the state of Oregon and OHSU, and to $1 million for all other public entities.

Increases the state of Oregon and OHSU per claim limits by $100,000 per year until 2015. Increases the state of Oregon and OHSU per occurrence limits by $200,000 per year until 2015. Increases the per claim limits for all other government entities by $33,333 per year until 2015. Increases the per occurrence limits for all other government entities by $66,666 per year until 2015. Increases all property damage limits from the current $50,000 per claim to $100,000 per claim and $500,000 per occurrence.” Staff Measure Summary, © 2023 Thomson Reuters. No claim to original U.S. Government Works.

13

Bush v. City of Prineville, --- P.3d ---- (2023) 325 Or.App. 37

Senate Committee on Judiciary, SB 311 A, Feb. 12, 2009. That detailed summary of the new “damage limits,” and their gradual increase over time, contains no reference to attorney fees.

13

Bill Blair was a Senior Assistant County Counsel for Washington County. Testimony, Senate Committee on Judiciary, SB 311, Jan. 22, 2009, Ex. 3.

14

CIS was formed in 1981 “as a trust to ‘pool’ the liability exposures of cities, counties, and related public entities in Oregon.” Ex. H, Joint Interim OTCA Task Force Hearing, June 19, 2008.

15

Based on information provided by CIS, Blair noted that over 20,000 “general liability claims have been filed against CIS members since 1981. Only 106 claims (0.5%) have exceeded $100,000 in cost. Those 106 claims account for 32% of the $74.8 million paid out for general liability claims by the Trust over the 26 years of its existence.” Ex. D, Joint Interim OTCA Task Force Hearing, Oct. 30, 2008. Nevertheless, Blair also noted that “[t]he impact of Clarke was felt in a 25% increase in reinsurance premium[s] billed to CIS in 2008-09.” Id.

16

In Haynes, 231 Or App at 153, 217 P.3d 1113, the court considered language that “was carried over into the new statute unchanged.” When that occurs, it makes sense to assume that the legislature intended to adopt prior judicial constructions of the language. But here, the legislature did not simply carry over unchanged language. Although the same word “liability” is used in former ORS 30.270 (1985), in former ORS 30.270 (1987), and in ORS 30.272, it is a much greater logical leap to assume that by repealing former ORS 30.270 (1987), which referred to “liability” as consisting of general and special damages, and by replacing it with ORS 30.272, which eliminated the reference to those categories of damages, the legislature intended to return to Griffin's construction of “liability” as used in former ORS 30.270 (1985). Given the repeated references in the legislative history of the 2009 amendments to the new statutory caps as “damage limits,” we cannot assume that the legislature intended to return to Griffin's broad construction of “liability” as including attorney fees.

17

As the dissent correctly points out, in Horton, the Supreme Court did not address the issue of whether attorney fees are included in the liability limit of ORS 30.272(2)(f). 325 Or App at 62-63, ––– P.3d at –––– (Mooney, J., dissenting). But if, as the Supreme Court states, a plaintiff can pursue “damages up to the amount of the Tort Claims Act limit,” Horton, 359 Or. at 224, 376 P.3d 998, then that does not suggest including attorney fees within the limit.

18

Because our examination of text, context, and legislative history resolves the question, we do not resort to maxims of statutory construction. Gaines, 346 Or. at 172, 206 P.3d 1042.

19

The city also suggests that attorney fees should not have been awarded against it after October 8, 2014, when it made its offer of judgment, but the record shows that the parties incurred fees after that date relating to negotiating the form of the judgment. Indeed, a stipulated general judgment was entered on November 24, 2014, and the amended stipulated limited judgment was not entered until December 2, 2014.

End of Document

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14

Matter of Compensation of Peabody, --- P.3d ---- (2023) 326 Or.App. 132

326 Or.App. 132 Court of Appeals of Oregon.

In the MATTER OF the COMPENSATION OF Karista D. PEABODY, Claimant.

Karista D. Peabody, Petitioner, v.

SAIF Corporation and OHSU - Oregon Health & Science University, Respondents.

A176055 | Argued and submitted December 22, 2022. | May 24, 2023 Workers’ Compensation Board, 1602309 Attorneys and Law Firms Julene M. Quinn, Albany, argued the cause and filed the briefs for petitioner.

Daniel Walker argued the cause and filed the brief for respondents.

Before Shorr, Presiding Judge, and Lagesen, Chief Judge, and Mooney, Judge.

Opinion LAGESEN, C. J. *133 Before the Workers’ Compensation Board (board), claimant prevailed against SAIF's denial of her claim for compensation. The board awarded attorney fees under ORS 656.386(1) for prevailing against the denial, but claimant contested the reasonableness of the amount of the award on reconsideration before the board, before this court, and then on remand, a process that ultimately resulted in a higher award of fees. The question before us is whether, after a claimant has prevailed over a denial at the board level, ORS 656.386(1) authorizes an award of attorney fees to a workers’ compensation claimant's counsel for subsequent work performed litigating the reasonableness of an attorney fee award on reconsideration before the board, before our court, and on remand. On that point, we agree with claimant that, under the Supreme Court's decision in Shearer's Foods v. Hoffnagle, 363 Or. 147, 156, 420 P.3d 625 (2018), she is entitled to a reasonable fee award for fees incurred in

determining the proper fee award for prevailing against the denial at the board level, and that the board erred in concluding otherwise. We therefore reverse and remand.

The facts are procedural and not disputed. SAIF denied claimant's occupational disease claim for a right cubital tunnel syndrome condition. Claimant challenged that denial at a hearing before an administrative law judge (ALJ) and again on review before the board, after failing to prevail at the hearing. In her briefing to the board, claimant requested $31,000 in attorney fees, should she prevail against the denial.

The board found in favor of claimant and reversed the ALJ's decision upholding SAIF's denial. The board further found that $12,500 was a reasonable attorney fee for claimant's counsel's services at the hearing and the board review.

Claimant sought reconsideration, contending that the $12,500 attorney-fee award was not reasonable. The board adhered to its decision.

Claimant petitioned for judicial review, challenging the board's decision to award $12,500 in attorney fees, rather than the $31,000 claimant had requested. Peabody v. SAIF, 297 Or App 704, 705, 441 P.3d 258 (2019). We concluded that the board's attorney-fee order was not adequately explained *134 and, therefore, was not supported by substantial reason. Id. at 705-06, 441 P.3d 258. Accordingly, we reversed and remanded for reconsideration. Id. On remand, the board reconsidered its prior attorney-fee decision. In so doing, it applied amended criteria for fee awards that it had adopted following its initial attorney-fee decision in this case. Having considered the case under those criteria, it determined that $21,280 was a reasonable fee award for claimant's counsel's services at the hearing level and board review.

Claimant then sought reconsideration of that order, asserting that she was entitled to additional attorney fees for counsel's services litigating attorney fees, that is, the fees (1) on seeking reconsideration of the board's initial attorney-fee award; (2) on the initial judicial-review proceeding before us; and (3) on remand before the board. The board issued a second order on remand, rejecting claimant's request. Adhering to board precedent, the board concluded that “we do not find an ORS 656.386(1) attorney fee to be awardable where the sole issue presented was the amount of a reasonable attorney fee award.” The board rejected claimant's argument that the Supreme Court's decision in Shearer's Foods displaced its prior precedent and required a different outcome. In

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Matter of Compensation of Peabody, --- P.3d ---- (2023) 326 Or.App. 132

particular, although the board recognized that in Shearer's Foods the Supreme Court concluded that ORS 656.386(1) authorizes a prevailing claimant to recover fees incurred in litigating the correct amount of fees, it declined to extend that reasoning to the circumstances present here. The board explained that it did not view ORS 656.386(1) to allow for an award of fees incurred in litigating the reasonableness of a fee award subsequent to an initial award, where the only issue is the proper amount of the fee award, because, during such subsequent stages of litigation, a claimant does not again prevail against a denial. **2 Claimant has again petitioned us for judicial review.

On review, she asserts that the board's take on Shearer's Foods cannot be squared with the Supreme Court's decision.

Claimant points out that, in concluding that the claimant in Shearer's Foods was entitled to recover fees for litigating the proper amount of a fee award under ORS 656.386(1), the *135 court relied on TriMet v. Aizawa, 362 Or. 1, 3, 403 P.3d 753 (2017), citing it for what is the general rule in Oregon: “ ‘[A] party entitled to recover attorney fees incurred in litigating the merits of a fee-generating claim also may receive attorney fees incurred in determining the amount of the resulting fee award.’ ” Shearer's Foods, 363 Or. at 156, 420 P.3d 625. Under Aizawa, that principle applies where the source of entitlement to fees is statutory, unless the statutory provision authorizing fees demonstrates that “the legislature intended to depart from that accepted practice.” Aizawa, 362 Or. at 3, 403 P.3d 753. Looking to the text of ORS 656.386(1), claimant asserts that nothing in it suggests that the legislature intended to displace the general rule in Oregon that a litigant is entitled to reasonable fees incurred in determining the amount of the fee award.

We agree with claimant's reading of Aizawa, Shearer's Foods, and ORS 656.386(1). Specifically, in light of Aizawa, and the Supreme Court's application of Aizawa in Shearer's Foods, we conclude that when the board is authorized to award attorney fees under ORS 656.386(1) to a claimant who “[in] such cases involving denied claims * * * prevails finally * * * in a review by the Workers’ Compensation Board,” the board must also award the claimant reasonable fees incurred in determining the amount of fees to which the claimant is entitled for prevailing over the denied claim.

ORS 656.386 provides, in relevant part: “In all cases involving denied claims where a claimant finally prevails against the denial in an appeal to the Court of Appeals or petition for review to the Supreme Court,

the court shall allow a reasonable attorney fee to the claimant's attorney. In such cases involving denied claims where the claimant prevails finally in a hearing before an Administrative Law Judge or in a review by the Workers’ Compensation Board, then the Administrative Law Judge or board shall allow a reasonable attorney fee. In such cases involving denied claims where an attorney is instrumental in obtaining a rescission of the denial prior to a decision by the Administrative Law Judge, a reasonable attorney fee shall be allowed.”

ORS 656.386(1)(a). In this case, it is undisputed that claimant finally prevailed against SAIF's denial on board review, and that claimant is entitled to her attorney fees under the *136 second sentence of (1)(a); the question is whether and to what extent those fees include the fees incurred in litigating the amount of the attorney fee award, in addition to those fees incurred in prevailing against the denial. That question, we conclude, is answered by Aizawa and Shearer's Foods.

We start with Aizawa. In that case, the Supreme Court held that “[o]rdinarily, a party entitled to recover attorney fees incurred in litigating the merits of a fee-generating claim also may receive attorney fees incurred in determining the amount of the resulting fee award.” Aizawa, 362 Or. at 3, 403 P.3d 753. That “normal rule[ ]” applies, absent an indication in the statute that “the legislature intended to depart from that accepted practice[.]” Id. at 3, 14, 403 P.3d 753. Accordingly, under Aizawa, claimant is entitled to recover reasonable fees incurred in litigating the amount of fees to which she is entitled for prevailing against SAIF's denial before the board, unless the legislature has signaled otherwise.

We turn to Shearer's Foods. That case, on its face, would appear to confirm that the legislature has not, in the words of Aizawa, “intended to depart from [the] accepted practice” of allowing the recovery of reasonable fees incurred in litigating the amount of an attorney fee award. There, the issue was whether the claimant had “finally” prevailed against a denial on a “petition for review to the Supreme Court,” within the meaning of the first sentence of ORS 656.386(1), when the Supreme Court denied the insurer's petition for review.

Shearer's Foods, 363 Or. at 148-49, 420 P.3d 625. The court concluded that the answer was yes, allowing the claimant to recover attorney fees in connection with the petition for review. Id. at 154-55, 420 P.3d 625. Citing Aizawa, the court also concluded that “it is reasonable to compensate counsel for an additional 2.5 hours of time spent litigating the fee award, given the extent to which claimant's written arguments

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Matter of Compensation of Peabody, --- P.3d ---- (2023) 326 Or.App. 132

assisted the court in determining the fee award.” Id. at 156, 420 P.3d 625. **3 Taken together, Aizawa and Shearer's Foods stand for the proposition that claimant is entitled to reasonable fees incurred in litigating the amount of the fee award to which she is entitled for prevailing against SAIF's denial before the board. It is undisputed that this is a case involving a denied claim and that claimant “prevail[ed] finally *137 *** in a review by the Workers’ Compensation Board.”

ORS 656.386(1). That means that claimant is entitled to a reasonable fee award: “In such cases involving denied claims where the claimant prevails finally in a hearing before an Administrative Law Judge or in a review by the Workers’ Compensation Board, then the Administrative Law Judge or board shall allow a reasonable attorney fee.”

ORS 656.386(1)(a). That fee award, under the reasoning of Aizawa and Shearer's Foods, should include the reasonable fees incurred in litigating the amount of the fee award to which claimant is entitled for finally prevailing against the denial. There is no indication in the text and context of ORS 656.386(1) that the legislature intended to depart from the general Oregon practice of allowing fees for litigating the amount of a fee award, and Shearer's Foods affirmatively applied the principle in the context of an ORS 656.386(1) fee award.

SAIF nevertheless urges us to conclude otherwise.

Initially, SAIF argues that ORS 656.36(1) “as relevant to this case, only authorizes a fee for services related to prevailing over a ‘denied claim.’ ” That argument cannot be squared with Aizawa and Shearer's Foods, which stand for the proposition that a statute authorizing a fee award necessarily authorizes an award of reasonable fees incurred in determining the amount of a fee award, absent a contrary indication from the legislature. There is no contrary indication here.

SAIF also argues that “the board correctly concluded that ORS 656.386(1) does not provide a statutory basis for an attorney fee award for services on appeal solely in pursuit of an increased fee award.” SAIF is correct that the plain terms of the first sentence of ORS 656.386(1)(a), which governs fee awards for claimants who finally prevail in either this court or the Supreme Court, do not authorize an award of fees from this court for prevailing on an appeal in which only attorney fees are at issue. Thus, for example, claimant would

not have been entitled to an attorney fee award from this court under the first sentence of *138 ORS 656.386(1)(a) in her first appeal because she did not finally prevail against the denial in this court. See ORS 656.386(1) (a) (“In all cases involving denied claims where a claimant finally prevails against the denial in an appeal to the Court of Appeals or petition for review to the Supreme Court, the court shall allow a reasonable attorney fee to the claimant's attorney.”).

But that is not the question in this case. In this case, the second sentence of ORS 656.386(1) is the source of authority for claimant's fee award because claimant finally prevailed before the board. That sentence undisputedly authorizes an award of fees to claimant for finally prevailing against SAIF's denial on board review. At issue is the scope of the board's authority to award claimant fees incurred in litigating the amount of fees, not this court's authority to award fees to a party who prevails before us in a judicial-review proceeding in which the only issue is the amount of an attorney fee award. Under the reasoning of Aizawa and Shearer's Foods, the board's authority under ORS 656.386(1)(a) extends to awarding reasonable fees incurred in determining the amount of the fee award to which claimant is entitled for prevailing against SAIF's denial before the board. To the extent the board determines that the fees incurred by claimant in litigating the final amount of the fee award, including fees incurred litigating before our court, were ones that were reasonably incurred, it has the authority to award them and, under the rule in Aizawa, must award them. **4 Finally, SAIF argues that fees for litigating over fees may be awarded only where entitlement to fees is at issue, not where, as here, entitlement is not at issue and only the amount is disputed. Along the same lines, SAIF argues that fees may only be awarded for work preparing the initial fee petition, and not for subsequent work litigating the amount of fees. See Friends of Columbia Gorge v. Energy Fac. Siting Coun., 367 Or. 258, 269, 477 P.3d 1191 (2020) (citing Aizawa for the proposition that parties were entitled to attorney fees for the time spent “preparing their fee petition”).

We acknowledge that the parameters of Oregon's rule allowing for an award of attorney fees incurred in *139 determining the amount of an attorney fee award are not well defined. The rule is largely the product of case law, not statute. The clearest articulation of it is Aizawa’s formulation: “[o]rdinarily, a party entitled to recover attorney fees incurred in litigating the merits of a fee-generating claim also may receive attorney fees incurred in determining the amount of

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3

Matter of Compensation of Peabody, --- P.3d ---- (2023) 326 Or.App. 132

the resulting fee award.” Aizawa, 362 Or. at 3, 403 P.3d 753. That formulation, which we view as controlling, does not suggest the limits that SAIF asks us to impose. Instead, it broadly contemplates that a reasonable fee award will include any fees reasonably incurred in the process of setting the amount of the award. Under that broad formulation, the board was authorized to award, and claimant was entitled to receive, reasonable fees incurred in determining the amount of the fee award to which claimant was entitled for prevailing against SAIF's denial of her claim on board review. Those fees necessarily include amounts reasonably incurred after the board determined on review that claimant prevailed against the denial, including amounts that the board determines were reasonably incurred litigating in this court.

In sum, in view of Aizawa and Shearer's Foods, we conclude that the board erred when it determined that it was not End of Document

authorized to award claimant the fees that she incurred litigating over the amount of the fee award following the board's initial award. Further, under those cases, to the extent the board determines that the fees incurred by claimant in litigating the final amount of the fee award, including fees incurred litigating before our court, were reasonably incurred, it has the authority to award them and, under the rule in Aizawa, must award them. In view of that error, we reverse and remand.

Reversed and remanded.

All Citations --- P.3d ----, 326 Or.App. 132, 2023 WL 3606553

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4

2023 OADC ANNUAL CONVENTION CONTINUING LEGAL EDUCATION GUIDEBOOK

Motions on the Pleadings

PRESENTED BY:

Judge Benjamin Souede, Multnomah County Circuit Court

June 17, 2023 10:45am – 11:45am

OADC Oregon Association of Defense Counsel

Benjamin Souede

Judge Benjamin Souede has been a Multnomah County Circuit Judge since 2017. Prior to his appointment to the bench, Judge Souede moved between private practice and public service throughout his legal career. His private practice in Oregon (first at Lane Powell and then as a founding member of the Angeli Law Group) focused on complex civil and white collar criminal litigation. His public service career included stints as a Senior Advisory to Senator Hillary Rodham Clinton, and as General Counsel to Oregon Governor Kate Brown.

Judge Stephen J. Dwyer, Leonard J. Feldman & Ryan P. McBride, "How to Write, Edit, and Review Persuasive Briefs: Seven Guidelines from One Judge and Two Lawyers," 31 Seattle L. Rev. 417 (2008).

ARTICLES How to Write, Edit, and Review Persuasive Briefs: Seven Guidelines from One Judge and Two Lawyers Judge Stephen J. Dwyer, LeonardJ. Feldman & Ryan P. McBridet

I. INTRODUCTION

The ability to write a clear and persuasive brief is one of the most important weapons in a lawyer's armory; this is especially true for appellate practitioners. Although oral advocacy skills are important, a litigant's briefs are reviewed long before oral argument, when judicial law clerks are drafting their bench memoranda and judges are deciding how to approach oral argument and decide a case. Briefs are often reviewed a second (or third, fourth, or fifth) time after oral argument-when judges and their clerks are crafting the court's decision and revisiting the issues that the court must decide. For these reasons, a clear and persuasive brief often has a greater impact than even the most inspired oral argument. Moreover, it is becoming increasingly common for courts to decide cases without oral argument. In those instances, a compelling brief is critical to a litigant's success, and the only way to make an impact on the court.

The ability to write and recognize a persuasive brief is important to lawyers throughout their careers. Junior attorneys are often responsible for initially writing a brief. Senior attorneys often review those briefs t Stephen Dwyer was elected to the Washington State Court of Appeals, Division One, in November 2005. Prior to that, in February 2004, Judge Dwyer was appointed to the Snohomish County Superior Court after serving for nine years as a Snohomish County District Court Judge. Leonard Feldman is an attorney at Heller Ehrman LLP, where he specializes in appeals before the Ninth Circuit and Washington appellate courts. Ryan McBride is a member of the Litigation Practice Group and the Appellate Practice Group at Lane Powell PC, where his practice focuses on complex commercial litigation and appeals.

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and either rewrite or edit them (as circumstances require). In-house counsel may then review the briefs once more, providing additional edits and comments and addressing concerns. Wherever you happen to be in your career, it is important to know how to write, rewrite, edit, recognize, and review an effective brief. This Article offers a number of guidelines for crafting such briefs and provides a number of practical pointers to help lawyers along the way from writing through final review.

More specifically, this Article offers seven general guidelines for writing persuasive briefs. Those guidelines, each of which is discussed in Part II, are as follows: (1) begin your brief with a compelling recitation of the relevant facts; (2) acknowledge the applicable legal standard and use it to your benefit; (3) carefully pick your strongest arguments; (4) present your arguments logically; (5) present your arguments simply and concisely; (6) be accurate, fair, and even-handed; and (7) follow the court's rules and sweat the details. Finally, although the discussion of these guidelines is focused primarily on appellate briefs, it is important to note that almost everything we write here applies equally to trial court briefing. After all, a good brief is a good brief.

II. SEVEN GUIDELINES FOR PERSUASIVE BRIEF-WRITING

A. Begin Your Brief with a Compelling Recitation of the Relevant Facts One of the most important guidelines for writing a persuasive brief is to start by telling your story. Do not wait until you reach the argument section of your brief to begin arguing your case. A persuasive brief begins with a compelling recitation of the relevant facts; that is true even if the case is to be decided on purely legal grounds. The trick here, of course, is to present all the relevant facts while, at the same time, highlighting the facts (or absence of facts) that support your theme of the case and your legal arguments. Subtlety and accuracy are critical. If your presentation of the facts is too argumentative, unbalanced, or misleading, your credibility will suffer and your otherwise valid legal arguments may be discounted.

The following three examples illustrate the difference between a statement of facts that lacks persuasion or credibility and one that subtly conveys your theory. In the first example, the author sets the stage with a hum-drum presentation of facts that has all the relevant information, but lacks persuasion: On January 5, 2005, ABC Co. sent a written purchase order to DEF Co. for 100 widgets at an advertised price of $1 per widget. When it received same on January 7, DEF put 50 widgets in regular mail addressed to ABC with an invoice for fifty dollars. On that same

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day, ABC sent a purchase order to XYZ Co. for 100 widgets at an advertised price of $.50 per widget. On January 9, ABC received DEF's widgets and invoice. The next day, ABC returned DEF's widgets.

This is pretty boring; in fact, after reading this, one cannot figure out which side the author represents.

In contrast, in the next example the author put an overly aggressive spin on these facts, one that is far too argumentative for a credible fact section: On January 5, 2005, ABC Co., acting in the utmost good faith, sent a conditional purchase order to DEF Co. that required DEF to send ABC precisely 100 widgets according to the strict terms and conditions of ABC's purchase order, or not at all. DEF specifically refused to accept ABC's purchase offer. Instead, DEF made an express counteroffer. It did so in two ways: one, it varied the quantity term by sending ABC less widgets than it wanted (50 instead of 100); and two, by making acceptance of the widgets subject to a vastly different (and commercially unreasonable) set of terms and conditions pre-printed on DEF's written invoice form. Left with no choice, ABC was forced to cover itself by purchasing alternative widgets from XYZ Co. under acceptable terms.

The problems with this version are almost too many to count (although at least you can tell who the author represents): it uses loaded, legally significant terms (offer, counteroffer, cover); it omits key facts (such as the price and when DEF sent ABC the widgets); and, worst of all, it is purposely misleading (implying that ABC had no choice but to contract with XYZ because DEF's widgets or terms were unacceptable).

The following example avoids these pitfalls. Here, the author carefully shapes the facts without distorting them: ABC Co. needed 100 more widgets to satisfy customer demand. At the time, the best price on the market was $1 per widget from DEF Co. So, on January 5, 2005, ABC sent DEF a written purchase order. The PO specifically called for 100 widgets and set forth ABC's standard terms and conditions. Although there was no way for ABC to have known it at the time, DEF could not fill the order. But rather than inform ABC of that fact, on January 7th, DEF simply went ahead and put 50 widgets in the mail to ABC. More than that, DEF included an invoice with the incomplete shipment that included certain terms that were different than those on ABC's PO (although the price term was the same). Meanwhile, and not having heard from DEF regarding its order, ABC placed a separate order with XYZ Co. for 100 widgets at a better price, which XYZ promptly filled. When ABC finally received the 50 widgets from

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DEF on January 9th, it had no need for them given its contract with XYZ, and they were immediately returned to DEF. All of the facts are here. More importantly, after reading this version, not only will the reader know who the author represents, he or she will know ABC's theme of the case. Crafting a facts section in this manner takes time, but it is time well-spent. In short, when you approach the facts section, view yourself as a careful story-teller, not just a neutral historian, and certainly not a fiction writer either.

B. Acknowledge the Applicable Legal Standardand Use It to Your Benefit Once you get past the facts, you can and should remove the cloak of even-handedness and get straight into serious advocacy. Yet most lawyers blow right through what is typically the very first argument section of the brief-the applicable legal standard-without employing any advocacy whatsoever. Do not miss this opportunity. The controlling legal standard not only tells the court how your arguments must be evaluated, it is also the first step in convincing the court why you should win. That is especially important on appeal, where the rules typically require attorneys to include a section describing the applicable standard of review.

As Judge Harry Pregerson notes in his article, The Seven Sins of Appellate Brief Writing and Other Transgressions,1 "[t]he standard of review is the keystone of appellate decision making."2 It is not enough to show that your client is right through persuasive argument; you need to show the court that it can rule in your favor because you have satisfied the applicable legal standard (or that your opponent has failed to do so).

The first step in that process is to acknowledge and accurately state the applicable legal standard. In the trial court, the correct standard turns on the relief sought and the procedural posture of the case. On appeal, the correct standard (usually called the standard of review) depends on the type of lower court decision or judgment that has been appealed. In many cases, there will be different standards of review applied to different aspects of the appeal, and you should carefully identify for the court all that apply. In most cases, this can be accomplished by using an online research tool and a simple query such as "standard of review" in the same paragraph as "summary judgment."

1. Harry Pregerson, The Seven Sins of Appellate Brief Writing and Other Transgressions,34 UCLA L. REV. 431, (1987).

2. Id. at 437.

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Most lawyers have no problem identifying the correct standard of review and setting it out for the court, but that is where they stop. In some cases, the standard of review is copied from a recent case. In other cases, it is copied from a previous brief. There is a good reason why the standard of review section of a brief often looks as if it has been cut-andpasted from another source; it probably was. But to be persuasive, a brief should also explain how the standard works to your client's advantage. If the standard is de novo, emphasize to the court that it is not bound by the trial court's adverse findings and conclusions. If the standard is abuse of discretion, on the other hand, emphasize that the court should not substitute its judgment for that of the trial court. You may even want to provide a few citations to appellate decisions where the court reached the conclusion you want your court to reach. For example, a brief challenging the sufficiency of the evidence would state: "The court of appeals has, on numerous occasions, overturned a jury's verdict where, as here, there was insufficient evidence to support the verdict."

In the end, the standard of review section of the brief should not appear in a vacuum; treat it as part and parcel of your argument.

After you have stated the proper standard of review and explained why it matters in your case, you should reiterate it and tie it to the substantive arguments you make throughout the substantive sections of your brief. For example, if you represent the respondent who successfully won a jury verdict in the trial court, do not just explain why the jury's verdict was correct; emphasize that the verdict was supported by substantial evidence. Do not conclude by simply stating that the court should affirm the judgment below; remind the court of the heavy burden the standard of review places on the appellant. In responding to the appellant's sufficiency of the evidence argument, you might state: "Appellant has not demonstrated that there was insufficient evidence for a rational, fair-minded person to come to the conclusion that the jury did in this case." Again, whether you are writing or reviewing a brief, make sure that you not only correctly state the applicable legal standard, but also remember to use it to your advantage whenever possible.

C. Carefully Pick Your Strongest Arguments A persuasive brief should include persuasive arguments and only persuasive arguments. More is definitely not better in written advocacy, especially when crafting persuasive legal briefs. Judges (and their clerks) have a very limited amount of time in which to read and evaluate your brief. If you force them to trudge through a host of unpersuasive arguments, you lose credibility and they lose interest. Perhaps more importantly, strong arguments lose their edge and persuasive force when

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surrounded by less persuasive arguments. Judge Alex Kozinski of the Ninth Circuit notes in his article that an extremely effective way to lose on appeal is to "bury your winning argument among nine or ten losers."3 The key to effective written advocacy, therefore, is selectivity, not fertility. A lesser brief includes every conceivable argument. A good brief is focused, concise, and persuasive. In practical terms, this may mean abandoning or deemphasizing arguments that you may have made to the trial court. If you tend to fall in love with your own arguments and ideas, that kind of decision can be excruciating, but it is essential.

D. Present Your Arguments Logically 1. After you have identified the most persuasive arguments and dropped the rest, it is equally important to present your arguments in a logical manner. If this is done correctly, one point flows from another, arguments build on facts, and the arguments (hopefully) compel the result you want. This sense of flow should be evident within each paragraph, within each section of the brief, and within the brief as a whole.

One easy way to begin this process is to structure your brief so that the issues and your main points are contained in discrete sections and subsections. You can test whether you have done this effectively by reading the table of contents as if it is the only thing the court will consider. Ask yourself "does the table of contents tell the court what kind of relief I am seeking, accurately describe my main (or alternative) arguments, and tell (or at least outline) my story?" In the end, your table of contents should look something like a summary of the argument. Here is a simple example: I. THE TRIAL COURT'S GRANT OF SUMMARY JUDGMENT IS SUBJECT TO DE NOVO REVIEW. 1I. THE TRIAL COURT PROPERLY GRANTED SUMMARY JUDGMENT IN DEFENDANT'S FAVOR BECAUSE THERE IS NO GENUINE ISSUE OF MATERIAL FACT THAT PLAINTIFF'S COMPLAINT IS BARRED BY THE APPLICABLE STATUTE OF LIMITATIONS. A. Plaintiff's complaint is subject to the two-year statute of limitations for assault and battery claims 3. Alex Kozinski, The Wrong Stuff, 1992 BYU L. REV. 325, 327 (1992).

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set forth in RCW 4.16.100(1), not the three-year statute of limitations for ordinary negligence.

1.

In determining which statute of limitations applies, this court must evaluate the essence of plaintiffs allegations rather than the way plaintiff characterized his claims in the pleadings.

2.

The essence of plaintiffs allegations, as well as his own deposition testimony, demonstrates that plaintiffs claim is based on defendant's alleged intentional conduct.

3.

In any event, defendant owed plaintiff no legal duty and, therefore, plaintiff cannot bring a claim for negligence as a matter of law.

B. Defendant is not equitably estopped from asserting a statute of limitations defense because nothing defendant said or did prevented or dissuaded plaintiff from filing his complaint within the relevant limitations period.

III. THE TRIAL COURT'S SUMMARY JUDGMENT RULING CAN BE AFFIRMED ON THE ALTERNATIVE GROUND THAT PLAINTIFF FAILED TO SET FORTH SPECIFIC FACTS IN RESPONSE TO DEFENDANT'S MOTION FOR SUMMARY JUDGMENT ON THE ISSUE OF SELF-DEFENSE. Bottom line, if the table of contents does not make sense or is hard to follow, chances are that the brief is disorganized as well.

Another very useful way to present your arguments logically is to first tell the court how to get to the right answer, and only then tell the court why the other side (or the trial court) is wrong. All too often, lawyers devote too much of their argument to explaining why someone else is wrong. In an opening brief, the appellant may feel compelled to provide a litany of reasons why the trial court erred. In a responsive brief, the respondent may provide an equally comprehensive list of why the appellant's arguments are flawed. While that kind of analysis is important, court opinions typically start by explaining the right answer, and persuasive briefs should as well. Having provided that analysis, you can

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then turn to the other side's arguments (or the trial court's analysis) and explain why that approach is incorrect.

Obviously, determining the amount of space to devote to each portion of the brief can be a difficult judgment call and will necessarily vary from brief to brief. It often requires a good deal of text to properly develop a legal argument-to explain the right answer-and you should devote appropriate attention to that analysis. That, after all, is the strength of your case. Once you have done so, there will likely be a number of arguments that you have not yet addressed. But if you have properly developed your affirmative argument, it should be much easier to address those remaining issues. Moreover, the court will be much more likely to agree with you that the other side (or trial court judge) is wrong if you have already convinced the court that you are right.

The above advice applies to any brief, but it is especially important if you are the respondent or the appellee on appeal. Available statistics show that most respondents win on appeal. 4 When you can, use that subtle, cultural prejudice to your advantage. As the respondent, do not simply accept your adversary's phrasing of the issues or order of presentation. Do not hesitate to rephrase issues if it can be done fairly and to your advantage. Most of all, do not be afraid to address the issues presented in a different order than the order in which they appear in your adversary's brief. Reordering the presentation of the issues can work to your advantage, especially in a case presenting multiple issues of approximately the same importance.

Another effective way to determine the most logical manner in which to present your arguments is to spend some time thinking about how the opinion would look if you were to prevail on every issue. In other words, ask yourself: "If I were tasked with writing an opinion on this matter, how would I do it?" After you determine the answer to that question, you should make sure that the brief you are writing (or reviewing) includes everything the court needs to know, in the order it needs to know it. Often, this lends itself to a chronological presentation of the issues based on how the issues arose during the trial, not as the underlying facts actually unfolded. This presents an easy approach to briefwriting and may have the dual benefit of (1) persuading the judge's law 4. E.g., Bureau of Justice Statistics, Compendium of FederalJusticeStatistics 2004 at 82 (Dec.

2006) ("In most (80%) of the appeals terminated on the merits, the district court ruling was affirmed; in another 4% it was partially affirmed"); Dale E. Console, Understanding the Appellate Process,

211 N.J. LAW. 8, 9 (2003) (New Jersey statistics: "Appellate Division affirms 74 percent of the civil appeals that go to the panel. The affirmance rate in criminal appeals is 84 percent."); John Derrick, Appeals Statistics (2006), http://www.califomiaappeals.com/appealsstatistics.html (reporting reversal rates of approximately 20% in California).

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clerk to "work from" your brief instead of the appellant's brief in drafting internal memoranda to the judges, while (2) de-emphasizing a possibly vexing issue that arose late in the trial. By restructuring the issue statements and the order in which the issues are addressed in the briefing, a skilled writer can send the implicit message that the case is really just a routine affirmance. When used in conjunction with sound arguments regarding the standard of review, such a presentation builds a silent momentum toward affirmance.

E.Present Your Arguments Simply and Concisely A persuasive brief also expresses arguments in a simple and concise manner. Addressing this issue, Judge Kozinski notes that "simple arguments are winning arguments; convoluted arguments are sleeping pills on paper.",5 Obviously, this is not an easy task where the legal issues on appeal are complex or the subject matter is highly technical or specialized. But, in general, use plain language if possible, avoid jargon and legalese, and look for ways to eliminate any text that is not essential to your discussion of the facts or argument. There are dozens of books and articles on style, usage, and effective legal writing to help you accomplish this, 6 so we pause only long enough to give you three tips that we feel are particularly useful. One, ask one of your colleagues (or even a non-lawyer) to read your brief; if they cannot understand it, a judge may be able to either. Two, once you finish your first full draft, strive to cut your brief down by at least one-third; you might not be able to do it, but the exercise is extremely useful. And three, as you near completion of your final draft, take a break from the brief for a day or two (time permitting) before you give it one last fresh and objective read.

F. Be Accurate, Fair,and Even-Handed A persuasive brief is also even-handed in its presentation of relevant facts and controlling legal principles. A caustic tone or needlessly antagonistic rhetoric, on the other hand, detracts from a briefs persuasiveness. If you have a truly compelling argument, there is no need to disparage your opponent or your opponents' arguments in order to prevail. Those arguments may be "without merit" or "unprecedented"; if so, you should not be shy about using these kinds of phrases. But very little is added by using terms like "preposterous," "absurd," or "silly." In fact, 5. Kozinski, supranote 3, at 326.

6. E.g., LAUREL C. OATES & ANNE ENQUIST, THE LEGAL WRITING HANDBOOK (Aspen Publishers, 4th ed. 2006); LAUREL C. OATES & ANNE ENQUIST, JUST WRITING, GRAMMAR, PUNCTUATION, AND STYLE FOR THE LEGAL WRITER (Aspen Publishers, 2d ed. 2005).

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when litigants use such terms, judges may start to wonder whether the attack is an attempt to hide a weakness in the party's position.

Eliminate those words from your briefs, both in the drafting process and in the review process. Remember, a good brief leads the court to conclude that the opponent's arguments are absurd without actually saying so.

The same sense of even-handedness and restraint should inform your factual and legal presentation. As noted above, a good brief presents the facts in a favorable light, but does not overstate those facts or wholly ignore countervailing considerations. A good brief is equally fair in characterizing case law, without mischaracterizing the holding of a case or ignoring controlling authority. If you are confronted with bad, but not controlling, case law, you can choose to deal with it fairly and head-on. Or, in appropriate circumstances (such as where the adverse case law is not directly on point), you might decided to ignore an adverse decision. But one of the worst things you can do is to put a misleading spin on a case. The judge (or your opponent) will certainly call you on it, and the result could be far worse than the case law itself would require. As Judge Pregerson notes: "[i]f, under the guise of aggressive advocacy, you misuse a case or fail to discuss an unfavorable holding, you lose credibility.",7 In other words, if part of your brief is misleading or evasive, the court may conclude that the rest is equally suspect.

G. Follow the Court's Rules and Sweat the Details When courts issue rules relating to the submission of briefs, they expect those rules to be followed. A court's insistence on a particular format, font size, page limitation, or word limitation may appear arbitrary, but it is not. The rules exist because judges have concluded that they can more effectively decide cases if briefs are in the correct format and include the required analysis. Failure to follow the rules will, at best, leave a judge annoyed and irritated. At worst, your brief could be stricken or your credibility destroyed. Imagine what your client would think if the court refused to consider a particularly important argument, such as entitlement to attorney fees, simply because your brief exceeds the court's page limits or otherwise fails to follow the court's rules.

This is not a theoretical concern. On November 29, 2007, the Ninth Circuit issued an opinion striking a brief in its entirety and dismissing the appeal because the brief was seriously deficient. 8 The court noted that 7. Pregerson, supra note 1, at 436.

8. Sekiya v. Gates, 508 F.3d 1198 (9th Cir. 2007).

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the brief failed to provide the applicable standard of review, made almost no legal arguments, and lacked a table of contents, table of authorities, citations to authority, and accurate citations to the record. 9 Addressing the significance of its rules, the court explained: Federal Rule of Appellate Procedure 28 and our corresponding Circuit Rules 28-1 to -4 clearly outline the mandatory components of a brief on appeal. These rules exist for good reason. In order to give fair consideration to those who call upon us for justice, we must insist that parties not clog the system by presenting us with a slubby mass of words rather than a true brief.'0 Judge Kozinski takes an equally harsh stance with lawyers who play games (smaller fonts, smaller margins, and the like) to circumvent the court's rules, stating: "It tells the judges that the lawyer is the type of sleaze ball who is willing to cheat on a small procedural rule and therefore probably will lie about the record or forget to cite controlling author11 ity.'

It is equally important to consider other relevant sources of advice regarding effective briefs. In Washington, for example, appellate practitioners can find a very useful document, Brief Writing-Best Practices, on the website for Division One of the Court of Appeals.12 A number of federal judges have published similar advice, some of which we have cited in this Article, including Judge Pregerson's The Seven Sins of Appellate Brief Writing and Other Transgressions,13 Judge Kozinski's The Wrong Stuff,'4 and Third Circuit Judge Ruggero J. Aldisert's book, Winning on Appeal: Better Briefs and Oral Argument.' 5 These "guidelines" also stress the importance of avoiding spelling, grammatical, and citation errors. These kinds of mistakes, while not necessarily germane to the argument, demonstrate a lack of attention to detail and can distract the judge from the merits of your argument.

9. Id. at 1200.

10. Id. (internal quotations omitted).

11.Kozinski, supra note 3, at 327.

12. Washington State Court of Appeals Division I CLE: Briefly Speaking, Brief Writing-Best Practices,

http://www.courts.wa.gov/appellate trial courts/?fa=atc.displaydivs&folderlD=div I &filelD=brief Writing (last visited Mar. 15, 2008).

13. Pregerson, supra note 1, at 436.

14. Kozinski, supra note 3.

15. RUGGERO J. ALDISERT, WINNING ON APPEAL: BETTER BRIEFS AND ORAL ARGUMENT (2d ed. 2002).

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Bluebook16 citation errors can also be harmful to your argument.

Citation form is like the handshake of a secret society: it conveys important information while simultaneously announcing membership. A brief with correctly formatted citations not only provides information (i.e., the holding, the case, the court, the year) but also conveys a sense of completeness and thoroughness. Conversely, a brief marred by incorrectly formatted citations raises hackles and invites suspicion; it is the lawyer-author's tacit admission that "I really don't belong here." If you send the message that it is not important to you, you identify yourself as a careless outsider. That cannot possibly help your client's cause.

In short, whether you are the author or reviewer, it is important to ensure that the brief not only complies with all applicable requirements, but also is accurate in substance and professional in appearance. Always: " proofread, proofread, proofread; *

support all factual assertions with citations to the record;

" ensure that case citations and quotations are accurate; *

keep string-cites and footnotes to a minimum;

*

avoid massive block quotes; and

" delete excessive adverbs such as "clearly," "specifically," and "simply."

Although some of these suggestions may seem self-evident, it is important to sweat the details (even the obvious ones). Otherwise, a winning brief can quickly become a losing one.

III. CONCLUSION

Whether you are writing, editing, or simply paying for a legal brief, you want that brief to be as persuasive as it can possibly be. Judges expect no less. They read hundreds of briefs each year, and they enjoy reading briefs that are easy to follow, logical, and persuasive. Knowing how to satisfy that desire is an important step on the road to success in court. This Article presented seven general guidelines-from one judge and two lawyers-regarding how to write, edit, and review persuasive briefs. Although writing a persuasive brief is more art than science, the 16. THE BLUEBOOK: A UNIFORM SYSTEM OF CITATION (Columbia Law Review Ass'n et al. eds., 18th ed. 2005).

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guidelines that are described in this Article can help lawyers craft briefs that will have a more significant impact on judges and their clerkssomething that anyone reading a brief (or paying for it) will truly appreciate.

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September 2021

James A. Johnson, "Persuasive Legal Writing," 100 Mich. Bar Rev. 42 (2021).

Plain Language

Persuasive Legal Writing

By James A. Johnson

The quality of a person’s life is in direct proportion to their commitment to excellence regardless of their chosen field of endeavor.

— Attributed to Hall of Fame NFL coach Vince Lombardi.1

T

he most important tool in a consummate lawyer’s toolbox is the ability to communicate effectively, both orally and in writing. Whether the person receiving one’s communication is a judge, juror, or opposing counsel, the message should be precise, direct, clear, trustworthy, and engaging. Writing differs from oral expression because it creates a permanent record. Persuasive legal writing involves knowing precisely what one wants to say — and saying it — clearly and simply. Long sentences, for instance, are usually the product of the failure to think through what one wants to say and how to say it. Short sentences can be powerful and persuasive: this is a case about a broken promise. Aim for an average of about 20 words a sentence.

Precision is not possible in every instance, but the lawyer should strive for it. Each sentence should have an unmistakable meaning and not be reasonably susceptible of different interpretations.

“Plain Language,” edited by Joseph Kimble, has been a regular feature of the Michigan Bar Journal for 37 years. To contribute an article, contact Prof. Kimble at WMU–Cooley Law School, 300 S. Capitol Ave., Lansing, MI 48933, or at kimblej@cooley.edu. For an index of past columns, visit www.michbar. org/plainlanguage.

Word choice Facts must be related in a manner that enables the reader to see the act, incident, or event portrayed. Choosing the right words is obviously important. Your goal is to command attention, preferably in the active voice, to create a mind-picture for the reader. For example: NBA legend Michael Jordan “flies toward the basketball hoop. His tongue is out, flickering like a cobra tasting the air to decide just how he is going to finish. It is not that he defies the laws of gravity, but rather that he is slow to obey them.” 2 One kind of word choice deserves particular mention — the use of intensifiers such as clearly, obviously, and undoubtedly. They may appear to add emphasis but often come across as a sign of weakness, a substitute for compelling argument. Try replacing phrases in which they appear with a single word: completely wrong = mistaken, incorrect; very large = sizable; highly capable = accom­ plished. Of course, if the legal standard involves an intensifier — clearly erroneous, substantially outweighs — then you use it.

Writing well is about making choices that produce clarity and grace. Good writers carefully choose what and how to write and what words to use. They arrange words in an organized fashion that the reader finds enjoyable. An enriched vocabulary is an indispensable aid. But as a general rule, plain, everyday words make the straightest connection to the reader’s or listener’s mind.

Clarity and coherence Assume that the court knows nothing about the case. The lawyer must set out the issues, facts, and arguments with a clear point of view and not in a conclusory manner. Tell the court what relief you are seek-

ing, together with the motion standard or the appellate standard of review.

Just as a picture can be worth a thousand words, so can an analogy. The analogy — a simple comparison to a familiar subject — is the greatest weapon in the arsenal of persuasion. Perhaps nothing can move a judge or jury more convincingly than an apt comparison to something that they know from their own experience to be true. For example: “she is a prisoner in her own wheelchair”; “what goes up must come down”; “equity protects the vigilant and not those who slumber on their rights”; “like finding a needle in a haystack”; “life is like a box of chocolates — you never know what you are going to get”; and “like a good neighbor, State Farm is there.” The goal is to permit the judge or jury to reach the desired conclusion on their own. They will hold that conclusion more firmly than if merely told what conclusion to reach. Use analogies to make a point.

A topic sentence connects the previous paragraph to the start of the next paragraph by repeating a word or concept and linking it to the point that will follow in the new paragraph. In other words, it bridges the paragraphs. If the logic and movement are clear, transitional conjunctions like addi­ tionally, but, and therefore may be superfluous. Then each new sentence must relate to the one before it and to the topic sentence in order to develop the topic sentence’s promise.

Finally, lawyers should write clear arguments supported by precise citations. Precise citations are persuasive and establish the lawyer’s credibility and the integrity of the research. Avoid string citations because they rarely add anything to writing; pick the one or two best citations to support the legal point.

Electronic copy available at: https://ssrn.com/abstract=3922852

September 2021

Michigan Bar Journal

Plain Language Rhetorical devices Properly and judiciously used, rhetorical devices give persuasion and polish to your words. A triplet is a group of three words, three phrases, or three sentences: “life, liberty and the pursuit of happiness.” Anaph­ ora is the repetition of a word or phrase at the beginning of successive clauses, sentences, or paragraphs. During World War II, U.K. Prime Minister Winston Churchill used anaph­ora powerfully in his speech to the House of Commons on June 4, 1940: “We shall go on to the end. We shall fight in France, we shall fight on the seas and oceans, we shall fight with growing confidence and growing strength in the air . . . .”

In his speech at the 1963 March on Washington for Jobs and Freedom, Martin Luther King Jr. began eight consecutive sentences with “I have a dream.” He ended with a triplet: “Free at last! Free at last! Thank God Almighty, we are free at last!”

Winning Written trial briefs, motions, and appellate briefs are the first opportunity, uninterrupted, to persuade the court. Courts today allow limited or no time for oral advocacy and often rule on the pleadings. Lawyers must write to win. They should make every word count. The cornerstone of persuasion is twofold: (1) make the court want to rule in your favor, and (2) make it easy for the court to do so. Power in persuasion comes with the steady accumulation of a series of facts and arguments that all point in the same direction.

Editing and revising Preliminary editing should be done with the writing. As each thought or argument is completed, review it for choice of words, errors, and logical development of the subject.

Revising requires restructuring sentences and paragraphs and reorganizing material

to create clarity. Revising is time-consuming and requires prolonged concentration to retain the precise thought contained in the original writing.

Writing a persuasive motion or brief takes time and effort. Lawyers should know that they are not done after their first draft.

Flaws in the arrangement of material, color­ less words, bad sentence structure, and verbosity may not penetrate the writer’s consciousness during the first draft. So set the piece aside for a few days and then reread it. Also, ask an associate or partner to read the motion, memorandum of law, or appellate brief to help improve it. All good writers welcome editing.

It is a painful but necessary exercise to put the scalpel to one’s own writing. You will find that less is almost always more.

Conclusion Mastering a case means stepping into your audience’s shoes and viewing it from their perspective. This is true in both oral and written advocacy. Persuasive legal writing is the product of meticulous editing, revising, and logical thinking to ensure continuity of thought.

Civility and professionalism are marks of the consummate lawyer, who does not engage in personal attacks. Do not use terms like preposterous or absurd. Lawyers win by stating accurate facts and providing explanations and evidence to prove their conclusions.

Keep in mind that to develop into an outstanding writer, in addition to my suggestions, you must write often. Write articles for your bar journal and state-bar sections. Join Scribes — the American Society of Legal Writers (www.scribes.org). A lawyer who seeks competence as a writer must continue to grow.

The ideal style is clear, forceful, precise, attention grabbing, and so elegant that the reader has no choice but to adopt the writer’s view of the law. For those of you who

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may not have reached this pinnacle, I remind you of Scarlett O’Hara in the movie “Gone with the Wind”: “After all, tomorrow is another day!” n James A. Johnson is a prolific writer and an accomplished lawyer. He concentrates on serious personal injury, insurance coverage under the commercial general-liability policy, sports and entertainment law, and federal criminal defense. Johnson is a member of the Michigan, Massachusetts, Texas, and Federal Court bars. He can be reached at www.JamesAJohnsonEsq.com.

Helpful Writing Sources 1. G arner, The Redbook: A Manual on Legal Style (4th Edition) (St. Paul: West Academic Publishing, 2018); 2. Williams & Bizup, Style: Lessons in Clar­ ity and Grace (12th Edition) (New York: Pearson, 2016); 3. T he Scribes Journal of Legal Writing; 4. Kimble, Seeing Through Legalese: More Essays on Plain Language (Durham: Carolina Academic Press, 2017) and Kimble, Writing for Dollars, Writing to Please: The Case for Plain Language in Business, Government, and Law (Durham: Carolina Academic Press, 2012); 5. T he Bluebook: A Uniform System of Ci­ tation (21st Edition) (Cambridge: Harvard Law Review Association, 2020); 6. Adams, A Manual of Style for Contract Drafting (4th Edition) (Chicago: ABA Publishing, 2017); 7. Burlingame, On Beginning a Court Paper, 93 Mich B J 52 (June 2014); and 8. B usk, Why I Made Plain-Language Changes to Your Contract, 94 Mich B J 38 (February 2015).

ENDNOTES

1. Famous Quotes by Vince Lombardi, available at VinceLombardi.com <http://www.vincelombardi. com/quotes.html> (accessed August 11, 2021).

2. Tip of the cap to sports journalist Roland Lazenby for inspiring this description.

Electronic copy available at: https://ssrn.com/abstract=3922852

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Using the Science of Persuasion in the Courtroom Edward Burkley & Darshon Anderson, “

by Edward Burkley & Darshon Anderson

Using the Science of Persuasion in the Courtroom,” The Jury Expert (The Am. Soc’y of Trial Consultants, Springfield, IL) Sept. 2008, at 32.

Oftentimes, our ultimate goal when interacting with others is to change their mind and eventually their behavior. This change is called persuasion (Brock & Green, 2005). The judicial process is itself a display of social interaction with the ultimate goal of persuasion, from the authoritative figure of the judge to the prosecution and defense attorney’s attempts to convince the jury to adopt their version of events. Even interactions between jury members during deliberation are a display of persuasion. In appreciation of this fact, the present article offers some recent findings in persuasion as potential tools to be utilized in the courtroom.

Early findings on persuasion found that, depending on the audiences’ ability and motivational state, the presentation of strong arguments and/or a perceived credible source (i.e., an expert) tended to be the most effective approach (for a review in relation to the courtroom, see Williams & Jones, 2007). This makes intuitive sense; the more arguments you can produce from a reputable source, the more persuasive you should be.

However, recent research suggests that what you are saying is not the only factor that can make a difference.

How and when you present your arguments can make or break your persuasive attempts.

In this article, we will review some of the more recent developments in the science of persuasion and offer a variety of techniques as suggestions for possible use by lawyers in the courtroom. We structure these persuasion techniques into two categories: How to say it and when to say it.

How to Say It Ask them to think about it. At first blush, it would seem that the more arguments an audience can generate in favor of your position, the more persuasive you will be. However, like so many things about human nature, it is not that simple.

Researchers have shown that how easily something comes to mind can also influence the way a person thinks.

People rely on this shortcut to determine if something is right or wrong. If an individual can easily generate arguments for a position, they are more likely to perceive the position as correct. If it is difficult to generate these arguments, they will likely judge the position as incorrect. For example, one study asked college students to generate reasons that making senior exams mandatory is a bad idea (Tormala, Petty & Brinol, 2002). Half were asked to come up with two reasons this was a bad idea and half were asked to come up with eight reasons.

Students asked to list two reasons did so quite readily and were more opposed to mandatory exams; however, students who listed eight ways did so with some difficulty and were less opposed to the exams. These individuals felt that if a mandatory exam was such a bad idea, then it should be easy to list a number of reasons to support this fact. But because these students had difficulty just listing eight reasons, they became uncertain that it was in fact a bad idea. The ease with which one can bring to mind supporting arguments is taken as a form of confidence; two arguments will strengthen a belief whereas eight arguments will weaken it. Thus, strengthen your position by asking the jury to think of a few ways (no more than three) that you are correct.

Weaken the plausibility of your opponent’s position by asking the jury to come up with numerous reasons that this position is correct.

It’s about style. Even if people do have cogent arguments for their position, it still needs to be delivered by a credible source. Recent research shows that credibility can be communicated to an audience through the type of language used. A study of courtroom transcripts found that when lawyers used hesitant phrases, such as September 2008

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“umm,” “I mean,” and “you know”, they were viewed as less credible (O’Barr, 1982). Further investigation found the same effect among college students who read a product testimonial (Sparks & Areni, 2008). In this study, half of the students read a testimonial with the phases “I mean” and “ummm” and the half read a transcript without these hesitations. In addition, some students where given 5 minutes to read the transcript and others had only 20 seconds. The results showed that people were less convinced about buying the product when there were hesitation phrases and this effect was even more pronounced when time was limited. Thus, when speaking in front of the judge or jury, it is important to deliver your arguments with confidence and clarity, especially if you are limited on time.

Be a chameleon. In some cases, subtlety can be just as effective as delivering a blatantly strong argument. In everyday interactions, many of our behaviors are in response to how others have behaved. When others smile we automatically smile back. Researchers have investigated the purpose of such mimicry and have shown that when others mimic our gestures (e.g., touching face, crossing legs) we actually like them better (Chartrand & Bargh, 1999). Furthermore, because we are more persuaded by people that we like, such mimicry can also increase persuasive appeal. One recent study showed that salespersons who mimicked their target were over four times more likely to make a sale than those who did not use mimicry (Maddux, Mullen & Galinsky, 2008). A similar study showed that when product representatives mimicked the verbal and physical behaviors of their target, the product was rated more positively (Tanner, Ferraro, Chartrand, Bettman & Van Baaren, 2008).

Interestingly, when asked about this chameleon effect, the targets were unaware that they had been mimicked or that such mimicry had any real effect on their product evaluations.

Mimicry is effective because people are naturally ego-centered and prefer things that remind them of themselves (e.g., Pelham, 2005). A great deal of research demonstrates that the more similar something is to us, the more we like it (e.g., Byrne, 1971). Mimicry is simply one example of this relationship. Taken as a whole, this body of work suggests that when possible, you should sound and act like the people you are trying to persuade, making them more willing to submit to your requests. However, there is an important word of caution when using this technique. This tactic will only work in a one-on-one situation and when the target does not believe you are trying to use a tactic to persuade them. When people believe that others are trying to persuade them, they display reactance and will often become more entrenched in their original position. Thus, mimicry can be an effective tool in the courtroom but you must be subtle and if you think your target is becoming aware of your mimicry, cease the act immediately.

When to Say It Wear them down. From brainwashing in POW camps to fraternity hazings, there are many ways that people use fatigue to get others to comply with a request (e.g., Taylor, 2004). These are extreme situations, but they rely on the basic human process of needing energy to combat social influences. Recent investigations provide empirical evidence of the link between fatigue and persuasion, showing that resistance to persuasive appeals both requires and consumes energy.

In several studies, Burkley (2008) investigated how people’s energy levels influence their ability to resist persuasive messages. One study found that participants who resisted persuasion became more fatigued. Then, in another study, Burkley (2008) found that fatigue made participants more vulnerable to persuasion. For instance, half of a student sample completed a strenuous physical activity and the other half did nothing. Then all students were asked to read and rate their opinion of an essay topic (e.g., mandatory senior exams). The results showed that the individuals who exerted energy on the exercise task were more persuaded by the essay than those who did not. This fatigue effect was more pronounced when the participant was presented with very strong essay September 2008

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arguments. Collectively, these studies suggest a cyclical relationship – by resisting one will become fatigued, and once fatigued, will be more vulnerable to future persuasive influences.

There are several ways that a lawyer can capitalize on this fatigue effect in the courtroom. First, because of this cyclical relationship, you can be very effective if you just keep pushing your strong arguments over and over with no chance for your target to rest. Eventually your persistence should wear down your target’s resistance. Any parent who has been bombarded with an onslaught of requests from their child is aware of this strategy’s effectiveness.

Second, take advantage of the fact that energy levels fluctuate throughout the day. People are particular fatigued before lunch time and at the end of the day, so this research suggests that these are peak persuasive time periods. If possible, save your strongest arguments for these situations, when your audience will be more open to influence. Keep in mind, though, that fatigue is also associated with negative behaviors, such as aggression (DeWall, Baumeister, Stillman, & Gailliot, 2007), sexual hostility (Gailliot & Baumeister, 2007), and stereotyping (Richeson & Shelton, 2003). Thus, you should consider how these factors may interact with your case specifics before utilizing this approach.

Forewarned is forearmed. Thus far, we have discussed research findings in terms of increasing your persuasive power. However, there are times when you may want to decrease your opponent’s persuasive power instead. Research on forewarning offers a way that you can build up resistance to an opponent’s appeals.

People do not like to know that they are being persuaded. When people feel their freedom is being attacked, they often respond by standing firm in their original position (Petty & Cacioppo, 1979; Quinn & Wood, 2004). Fortunately, this tactic can work to your advantage. You can simply and effectively point out to the jury that your opponent is going to use a variety of persuasive tricks to try and change their mind.

Inoculation is preventative. In addition to forewarning, increase resistance to your opponent’s message through inoculation. Modern medicine prevents our bodies from becoming ill by presenting a potential threat in a safe and easily destructible form. During an inoculation, an individual is injected with a weak form of a pathogen and the body quickly eradicates the bug. By building up a resistance to the injected strain, the individual is better prepared to combat the full force of the pathogen if later exposed. Build up resistance to a persuasive appeal by offering the audience a set of weak and easily deflected arguments. When the audience is given these weak arguments in advance, they have time to reject the spurious statements and generate their own counter-arguments (see McGuire, 1964). Early on in trial, before your opponent has the opportunity, present the jury with weak versions of specific arguments, thereby inoculating them against later exposure to the opponent’s stronger arguments.

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Caveat The majority of the studies discussed in this article were conducted in laboratories under controlled settings and there is always a concern when applying the findings to other contexts. As social scientists, we are less familiar with the internal workings of a courtroom setting and although we have tried to describe ways that these research findings can be extended to trial situations, we recognize that there are likely additional factors that may influence the effectiveness of these techniques. The techniques offered in this article are potential practices to be used at your own discretion. That being said, the theories that provide the foundation for these techniques are well-established explanations of basic human behaviors and should therefore apply to a wide variety of social interactions, including that of the courtroom. The only way to know for sure if these techniques work in the courtroom setting is to conduct studies in this environment. In the mean time, however, attempting these techniques personally is the fastest way to find out their effectiveness. In sum, we suggest that these techniques be utilized with cautious optimism.

Summary The ancient Greeks looked to the goddess Peitho to increase the effectiveness of their persuasive attempts. In modern times, we are fortunate enough instead to rely on science to indicate how we can improve our persuasive skills. Recent research on persuasion offers lawyers a variety of techniques that can be used to sway the judge and jury in their favor. Common sense (and early research) suggests that first and foremost you should be seen as a credible source and provide strong arguments for your position. However, recent research has added some more creative tactics: When possible, wear down your target by being persistent and capitalizing on low-energy time periods, avoid hesitant language, mimic when appropriate, ask the jury to think of a few reasons why your position is correct, inform them that your opponent will try to persuade them and offer a few weak arguments from your opponent’s side so the jury can effectively build up resistance. In the end, be aware of the fact that just as you may be using these techniques to sway others, others may be using these techniques on you.

Edward Burkley, PhD [ed.burkley@okstate.edu] is a social psychologist and Assistant Professor at Oklahoma State University, Stillwater. His professional interests are in the areas of self-regulation, persuasion, goal management, and motivation. You can review Dr. Burkley’s research and contact information on his webpage at http://edward.burkley.socialpsychology.org Darshon Anderson [darshon@okstate.edu] is a second year PhD student at Oklahoma State University, Stillwater. Her professional interests are in the areas of attitude change, resistance to persuasion, and goal pursuit.

References Burkley, E. (2008). The role of self-control in resistance to persuasion. Personality and Social Psychology Bulletin, 34, 419–431.

Byrne, D. (1971). The ubiquitous relationship: Attitude similarity and attraction: A cross-cultural study. Human Relations, 24, 201-207.

Chartrand, T. L., & Bargh, J. A. (1999). The chameleon effect: The perception-behavior link and social interaction. Journal of Personality and Social Psychology, 76, 893-910.

DeWall, C. N., Baumeister, R. F., Stillman, T. F., & Gailliot, M. T. (2007). Violence restrained: Effects of selfregulation and its depletion on aggression. Journal of Experimental Social Psychology, 43, 62–76.

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Gailliot, M. T., & Baumeister, R. F. (2007). Self-regulation and sexual restraint: Dispositionally and temporarily poor self-regulatory abilities contribute to failures at restraining sexual behavior. Personality and Social Psychology Bulletin, 33, 173–186.

Maddux, W. W., Mullen, E., & Galinsky, A. D. (2008). Chameleons bake bigger pies and take bigger pieces: Strategic behavioral mimicry facilitates negotiation outcomes. Journal of Experimental Social Psychology, 44, 461-468.

McGuire, W. J. (1964). Inducing resistance to persuasion: Some contemporary approaches. In L. Berkowitz (Ed.), Advances in experimental social psychology (Vol. 1, pp. 191–229). New York: Academic Press.

Pelham, B. W. (2005). Implicit Egotism. Current Directions in Psychological Science, 14, 106-110.

Petty, R. E., & Cacioppo, J. T. (1979). Effects of forewarning of persuasive intent, and involvement on cognitive responses. Personality and Social Psychology Bulletin, 5, 173-176.

Quinn, J. M., & Wood, W. (2004). Forewarnings of influence appeals: Inducing resistance and acceptance. In E. S. Knowles & J. A. Linn (Eds.), Resistance and persuasion. (pp. 193–214). Mahwah, New Jersey: Lawrence Erlbaum Associates.

Richeson, J. A., & Shelton, J. N. (2003). When prejudice does not pay: Effects of interracial contact on executive function. Psychological Science, 14, 287–290.

Sparks, J. R., & Areni, C. S. (2008). Style versus substance: Multiple roles of language power in persuasion.

Journal of Applied Social Psychology, 38, 37-60.

Tanner, R. J., Ferraro, R., Chartrand, T. L., Bettman, J. R., & Van Baaren, R. (2008). Of chameleons and consumption: The impact of mimicry on choice and preferences. Journal of Consumer Research, 34, 754-766.

Taylor, K. (2004). Brainwashing: The science of thought control. Oxford: Oxford University Press.

Tormala, Z. L., Petty, R. E., & Brinol, P. (2002).Ease of retrieval effects in persuasion: A self-validation analysis. Personality and Social Psychology Bulletin, 28, 1700-1712. * * * * * We asked two experienced trial consultants to respond to this article. On the following pages, Chris Dominic and David Cannon react to ‘Using the Science of Persuasion in the Courtroom’.

Chris Dominic responds: Chris Dominic (chris.dominic@tsongas.com) is a Senior Consultant at Tsongas Litigation Consulting, Inc., in Portland Oregon.

Edward Burkley and Darshon Anderson’s article “Using the Science of Persuasion in the Courtroom” targets relatively unsung elements of persuasion in the litigation arena. While it is common for an attorney to be concerned with what they are saying, it is less common for them to be concerned with how and when they are saying it.

In practice, the art of mastering the what, how and when is vital to the overall execution of a persuasive event. When looking at the jury trial setting specifically, the authors’ suggestions are relevant to the acts of motivation and arming. That is, 1) how motivated a juror is to advocate for a particular position, and 2) how “armed” a juror is with the right evidence, arguments, and themes to persuade others in the jury room. The ultimate debate in a jury trial is often jury deliberations, not closing arguments.

The authors begin their “How To Say It” section with “Ask them to think about it.” This section addresses the concept that less can be more in persuasion. Everyday examples remind us of just how important September 2008

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this concept is. Winston Churchill’s famous quote is remembered today as “Blood, Sweat, and Tears,” but in actually Churchill’s words were “I have nothing to offer but Blood, toil, tears and sweat.” The elimination of toil is proof of the power of threes. Think “faith, hope, and charity.” Threes work. Four can sometimes be one theme too many. This is why many speech constructions are done in three main points; why political campaigns are centered around three principles; why plays are done in three acts; and why Churchill’s speech lost its “toil” over time. This principle serves as three checks (unsurprisingly) on your litigation checklist: 1) Have I simplified my case theory enough?; 2) Does my opening statement provide a simple story structure through which jurors can understand the case?, and; 3) Do I have a closing argument that is simple enough for key jurors to easily access and use the evidence, arguments, and themes that are most favorable to my client?

The authors’ section, “It’s about style” in practicality, translates into, “Your delivery matters.” While many know this, few put the time they should into developing their delivery skills to get ahead of the competition. An attorney who speaks: 1) free from dysfluencies (e.g., “um,” “er,” “like,” etc.); 2) has a dynamic speaking voice (i.e., uses multiple tones and volumes); and 3) uses their body and or hands confidently in a way that is congruent with their message, is typically a far more effective persuader when compared with an adversary whose content is equal in strength, but who lacks the key components of nonverbal credibility.

When the authors suggest, “Be a Chameleon,” they offer the same advice about likability addressed in Neurolinguistic Programming (NLP) literature. Research shows that the more likable the speaker, the more persuasive he or she is. My concern for the practicing attorney is that the risk of being seen as a “trickster” outweighs the benefit that could be garnered just as easily through well developed case strategy and well executed attorney presentation. If attempts to be likable are not seen as genuine, the jurors could consider such attempts pandering.

In the “When to Say It” section of the article the authors suggest practitioners “Wear them down.” This principle is widely known to the attorney in civil practice. The late afternoon period of a deposition is often the time the witness will give you the answer you’ve been hoping to get all day. The witness is tired and giving in could mean a quick ticket home. Or perhaps the witness feels he or she is not giving the right answer and finally breaks down. It is worth noting that this principle being applied at trial should be done with great caution. The risk of looking like you are intentionally stalling or otherwise wasting the jury’s time is an important consideration.

The authors remind us of an important maxim – “Forewarned is Forearmed.” However, choosing when to inoculate an adversary’s position should be assessed on a case-by-case basis. There are times when short, powerful responses clashing with the positions of the adversary are extremely potent. But, there are also times when doing so highlights the adversary’s theme. As advised by George Lakoff, when you make the warning, “Whatever you do, don’t think about an elephant,” the first thought will be of an elephant. Be careful with the application of inoculation.

“Inoculation is Preventative” refers to pointing out the persuasive attempts of the adversary. Again, this can be useful at times and disastrous in others. It is not unusual for the modern jury to be attuned to the fact that we have an adversarial system and that both attorneys are advocates for their clients. Calling out the other attorney as a manipulator can have an unintended boomerang effect. With that said, if there is severe manipulation occurring, such as an attorney implying that the jury instructions or verdict form says something other than they actually do, there can be a very good opportunity to utilize what the authors describe.

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Again, by considering how and when you present information and arguments, you inherently garner an advantage over those who only consider what they say. The authors provide us with the relevant research in this area that points to what tactics and what specific benefits can be obtained. By carefully considering the findings, your practice can significantly benefit. * * * * * * * David Cannon responds to Using the Science of Persuasion in the Courtroom: David Cannon, Ph.D. (dcannon@jri-inc.com) is a trial consultant in Los Angeles, California. He works on civil and criminal case nationwide.

Dr. Burkley’s article encompasses a variety of different tactics that may be effective at persuading a target or targets, and the most important “take home” message is that persuasion may occur through a variety of means other than just the soundness of an argument and the credibility of the source or sources delivering the argument. We have all likely observed instances where extra-legal factors, or factors other than central arguments, influenced jurors. One that stands out to me occurred when I contacted jurors in a post-verdict interview following a defense verdict in a pharmaceutical case. Several jurors stated that they had empathized with the plaintiff and had wanted to award money to him, but they were “put off” by the plaintiff’s “arrogant” attorneys who were often overheard talking about their expensive boats, cars and exotic trips. Jurors were also bothered by the “flashy” brand name watches worn by the attorneys. The jurors questioned the motives, credibility, and likability of the plaintiff’s attorneys compared to the more professional and understated defense attorneys. While elements of the case were persuasive to the jury, concerns about the plaintiff’s attorneys had a strong influence on the outcome of the case.

Most studies in persuasion have not involved a legal issue, and the legal system is a unique arena when it comes to persuasion. Persuasion tactics other than just the central argument and credibility of the sources may be particularly important at trials because so many cases that make it to trial have compelling arguments on both sides. In the presence of compelling competing arguments and credible expert witnesses offering expert opinions that contradict one another, jurors often must rely on a variety of other factors to arrive at their decisions. Furthermore, jurors are skeptical of attorneys. They fully expect an attorney to attempt to manipulate them. Jurors may ask, “What exactly is this attorney trying to sell me?” As a result of this suspicion, jurors are much more mindful of persuasion tactics than many people in other settings or students who are participating in persuasion studies. Tactics that may not appear obvious in a setting other than a legal one may appear more obvious to a jury because of this heightened suspicion.

The jury is also unique in that attorneys are attempting to manipulate a group of individuals in a public forum rather than one single person. In addition to the unique difficulties of persuading more than one person, the jury represents a group of people with diverse backgrounds and characteristics. Peripheral persuasion tactics work better on some individuals than others. For instance, jurors who are bored and who have a lower need for cognition are much more likely to be influenced by something other than a central argument. Yet jurors who base their decisions on something other than the central argument are often much more flexible during deliberations than those who based their decision on a central argument.

This summary of persuasion research speaks to the importance of conducting empirical research on persuasion tactics with respect to legal decision making. This document provides a great resource of potential topics for a researcher to examine how persuasion tactics operate in legal cases. I certainly would have appreciated a resource like this when I was a graduate student at the University of Alabama.

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Rod Hollier, “Anchoring Bias in the Courtroom,” THE LAW PROJECT (May 2017), https://static1.squarespace.com/static/5817bb2746c3c4a605334446/t/5921b1b0f5e231 19eaf8bda6/1495380412134/Anchoring+Bias+in+the+Courtroom+by+Rod+Hollier.pdf

ANCHORING BIAS IN THE COURTROOM

By Rod Hollier (May 2017)

Visit www.thelawproject.com.au for other interesting articles!

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Table of Contents I. II. III. IV. V. VI. VII.

Key Takeaways .................................................................................................................. 4 Understanding the Anchoring Bias ................................................................................. 6 The Evidence: Anchoring Bias on Judges ........................................................................ 8 The Evidence: Anchoring Bias on Jurors ....................................................................... 22 Criticisms of Anchoring ................................................................................................... 26 Inducing and Defending the Anchoring Bias................................................................ 30 Bibliography ..................................................................................................................... 31

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This is one of the strangest psychological phenomenon’s I’ve come across…

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In a classic study , participants watched a wheel of fortune spin and were then asked to estimate the number of African countries in the United Nations. The wheel was rigged to land on certain numbers. In one group, the wheel stopped at the number 10, and the other group, 65.

The first group estimated an average of 25 countries in the UN. The second group estimated 45 – that’s an 80% increase. The obvious question arises, why would a wheel of fortune number affect people’s estimation?

The answer, the psychological phenomenon known as ‘anchoring’. Anchoring is a surprisingly simple idea: we are influenced by numerical reference points, even if they are utterly irrelevant. That’s it.

However, these trivial anchors can have a profound impact on those who are subject to judges rulings. For example, in one study, a journalist encountered the judges and asked them whether a prison sentencing would be higher or lower than a certain number. This number acted as an anchor and resulted in a 32% longer prison sentence. In another study, the plaintiff told the judges that a TV court show awarded a certain amount. The result: a 700% increase in compensation.

The purpose of this article is not to embarrass judges, it’s to bring awareness to this phenomenon and ultimately defeat it.

In the first section I provide a straight-to-the-point summary of the current research on the anchoring bias on judges. Secondly, I explain how the anchoring bias works. Thirdly, I present a mountain of evidence on the effects of the anchoring bias on judges. Fourthly, I examine the criticisms and lastly, I consider how a lawyer may induce and defend the anchoring bias.

Note, if you are the skeptical reader, skip straight down to the section entitled ‘evidence’ and read a few studies.

And now, I present to you, the anchoring bias.

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Judgment Under Uncertainty: Heuristics and Biases (1974) by Daniel Kahneman & Amos Tversky

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I. Key Takeaways 1. The anchoring bias is where a person is influenced by numbers that act as a reference point. These numbers may be utterly irrelevant. For example, one study asked participants to name the last two digits of their social security number, then asked them to decide on the amount they would bid for a bottle of wine. The participants with the digits 00 to 19 (low anchor), on average stated they would bid $11.73 (low price) for the bottle of wine. The participants with the digits 80 to 99 (high anchor), on average stated they would bid $37.55 (high price). The mere act of 2 bringing numbers to mind resulted in a 220.12% difference.

[Image taken from http://blog.kameleoon.com/en/cognitive-biases/]

2. A total of 1090 judges from USA, Canada, Germany and the Netherlands participated in the following studies and the anchoring bias crept-in via a number of ways: a. A prosecutor’s absurd sentencing demand: One study resulted in a 27.68% longer prison sentence, another 50%, and another, 60%. b. A journalist reporter’s sentencing question: Resulted in a 32% longer prison sentence. c.

An absurd motion to dismiss: The defendant filed a motion to dismiss which alleged that the plaintiff’s compensation award would not meet the minimum requirements of $75,000. This number acted as an anchor and resulted in a 29.38% reduction in compensation.

d. Sentencing in years vs months: Identical meanings but different expression of that meaning can result in the anchoring bias. For example, ‘2 years’ vs ‘24 2

"Coherent Arbitrariness": Stable Demand Curves without Stable Preferences (2003) by Dan Ariely, George Loewenstein and Drazen Prelec

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months.’ Both numbers have an identical meaning, yet judges are unconsciously influenced greater by the 24 months, than the 2 years. One study resulted in a 43.3% decrease when sentenced in months. e. The mention of a court TV show compensation award: Resulted in a 700% increase in compensation. f.

The order of cases: When 2 cases were presented one after the other, the first case acted as an anchor on the second case resulting in longer prison sentences. One study showed a 40% longer prison sentence, another study 46.43%, and another 442.86%.

g.

Damages caps: The damages cap acted as an anchor on minor claims and ironically resulted in excessively high compensation. One study showed a 47.83% increase in compensation and another, 250%.

h. Unlawful information: In one study, judges were explicitly reminded that certain information must be ignored by law. The judges that were exposed to a past interest rate for a bankruptcy case gave a 22.39% higher interest rate ruling. In another study, judges were explicitly reminded to ignore the information learned in settlement negotiations at a pretrial settlement conference. This information resulted in a 172.28% increase in compensation.

3. Jurors were also affected by the anchoring bias. The bias manifested itself in various ways: a. The plaintiff’s compensation requests: Firstly, the more the plaintiff requested, the more the jurors awarded, even at comically high requests, such as $1 billion. Secondly, the more money the plaintiff requested, the more the jurors thought the defendant was liable. b. Probability of causation: The probability of causation acted as an anchor resulting in a 100% increase in compensation. Obviously, the probability of causation of harm should not determine compensation, the amount of harm determines compensation. The effect is analogous to sentencing a man to prison for 60 years because they’re 100% certain the man stole a paperclip.

4. It is difficult for a lawyer to prevent a judge from committing the anchoring bias. It seems that it’s easier to induce the bias, than to counter it.

5. To reduce oneself from committing the anchoring bias, a strategy is to consciously counter argue the number. Think of as many reasons as possible why the number is wrong. This aids in breaking the anchor’s hold.

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II. Understanding the Anchoring Bias The anchoring bias works both consciously and unconsciously. In both forms, the anchor acts as a reference point (the anchor) which keeps the mind nearby. The mind doesn’t seem to drift far from the reference point – hence the metaphor of a ship’s anchor.

Below is a visual analogy.

Anchor, then Adjust The first way anchoring works is through the concept known as ‘anchoring and 3 adjustment.’ The mind jumps to the first anchor, then consciously adjusts from that point onwards.

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This is not necessarily bad because an anchor can contain useful information. For example, let’s say you are selling your house, one may first observe the surrounding houses as an indication for your own selling price.

The problem occurs when the mind does not adjust in its entirety. When the mind stops short, the anchoring bias has been committed.

3 4

Judgment Under Uncertainty: Heuristics and Biases (1974) by Daniel Kahneman & Amos Tversky Thinking Fast and Slow (2011) by Daniel Kahneman

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Mere Suggestion Secondly, the bias works through mere suggestion. The numerical suggestion throws the mind in a certain direction. For example: …the question “Do you now feel a slight numbness in your left leg?” always prompts quite 5 a few people to report that their left leg does indeed feel a little strange.

That slight tingle you felt in your leg, that’s analogous to what’s happening to the mind.

Once the suggestion has been made, anchoring induces a person to find reasons why the decision is similar to the anchor. And the opposite occurs also – the anchor tends to 6 block reasons for why the decision is different to the anchor. Anchoring does not necessarily work at the extreme level, such as blocking all reasons, but it roughly works in this manner, enough to cause a bias.

An example of how this works is best explained in the classic ‘textbook price estimation’ study. The researchers asked students to estimate the average price of a textbook. But, half the participants were first asked whether the average price was higher of lower than $7,163.52. The students that were exposed to the ludicrous number estimated the average price to be higher than the students that were not exposed. …the absurdly high anchor leads people to recall highly expensive books. When they recognize that even the most expensive textbooks are far below the absurd anchor, they can reject the hypothesis that the average book is truly that costly. But when they then estimate the actual average price, they are thinking about expensive books, which 7 produces higher estimates.

Thus, the mere suggestion of the number launched the students to reason in a certain direction which resulted in irrationally higher estimations.

Now, let’s see how this phenomenon plays out on judges.

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Thinking Fast and Slow (2011) by Daniel Kahneman [121] The Limits of Anchoring (1994) by G. B. Chapman & E. J. Johnson 7 Can Judges Make Reliable Numeric Judgments: Distorted Damages and Skewed Sentences (2015) by Jeffrey J. Rachlinski, Andrew J. Wistrich, & Chris Guthrie 6

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III. The Evidence: Anchoring Bias on Judges 1. THE PROSECUTORS DEMAND STUDY

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In the following study, 39 judges were tested on the effects of prosecutors absurd sentencing demands. The judges were given a booklet containing a shoplifting case in th which the accused had been caught stealing for the 12 time. They were asked to give their prison sentence after the prosecutor made their demand. But, here’s the twist, the judges were informed that the prosecutor’s demand was entirely random. Therefore, the demand contained no reasonable information.

Results and Key Takeaways 1. The judges that were exposed to the low sentencing demand, gave a sentence of 4 months.

2. The judges that were exposed to the high demand, gave a sentence of 6 months.

3. This equals a 50% longer prison sentence.

The Prosector's Random Anchor (The Judges knew it was random) 7

Months Imprisonment

6 5 4 3 2 1 0 Low Anchor

High Anchor

Answers to Possible Objections 45% of the judges were women, the judges ranged from 29 to 61 year of age, and the average experience was 13 years. The more experienced judges were just as susceptible than the lessor experienced judges yet, the more experienced judges felt more confident in their decision.

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Playing Dice With Criminal Sentences: The Influence of Irrelevant Anchors on Experts’ Judicial Decision Making (2006)

by Birte Englich, Thomas Mussweiler, & Fritz Strack

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2. THE DICE STUDY

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The researchers in this study wanted to squash any doubts about the anchoring effect by designing the most absurd scenario as possible.

52 young judges were given a booklet containing a case of theft. The judges were informed of the prosecutor’s sentencing demand, however, the specific number was left blank. And so, the judges were told to discover the sentencing demand by throwing a pair of dice. The dice was rigged so that it landed on a low number for one group and a high number for the other group.

Results and Key Takeaways 1. The judges who’s dice landed on the low number gave a sentence of 5 months.

2. The judges who’s dice landed on the high number gave a sentence of 8 months.

3. This equals a 60% longer prison sentence.

Judges Throwing Dice (The judges threw the dice themselves) 9

Years Imprisonment

8 7 6 5 4 3 2 1 0 Low Anchor

High Anchor

Weakness The judges in this study were young and inexperienced. However, other studies have 10 shown that experience did not reduce the anchoring effect. Thus, this study still holds its validity.

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Playing Dice With Criminal Sentences: The Influence of Irrelevant Anchors on Experts’ Judicial Decision Making (2006)

by Birte Englich, Thomas Mussweiler, & Fritz Strack 10 Playing Dice With Criminal Sentences: The Influence of Irrelevant Anchors on Experts’ Judicial Decision Making (2006) by Birte Englich, Thomas Mussweiler, & Fritz Strack; Experts, Amateurs, and Real Estate: An Anchoring-and-Adjustment Perspective on Property Pricing Decisions (1987) by Gregory B. Northcraft & Margaret A. Neale

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How is This Study Relevant?

Even though judges typically do not throw dice before making sentencing decisions, they are still constantly exposed to potential sentences and anchors during sentencing decisions. The mass media, visitors to the court hearings, the private opinion of the judge’s partner, family, or neighbors are all possible sources of sentencing demands that should not influence a given sentencing decision.

Sentencing decisions may also be influenced by irrelevant anchors that simply happen to be uppermost in a judge’s mind when making a sentencing decision.

[Our research] suggests that irrelevant influences on sentencing decisions may be a 11 widespread phenomenon.

3. THE COMPUTER SCIENCE STUDY

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In this study, 16 German trial judges were given a rape case and a sentencing demand.

Obviously, the sentencing demand is normally given by a prosecutor but in this study, the demand was given by a first-year computer science student.

One group received a demand of 12 months (low anchor), and the other, 34 months (high anchor).

Results & Key Takeaways 1. The judges that received the student’s sentencing demand of 12 months, sentenced the criminal to 28 months in prison.

2. The judges that received the student’s sentencing demand of 34 months, sentenced the criminal to 35.75 months to prison.

3. This is an increase of 27.68%.

11

Playing Dice With Criminal Sentences: The Influence of Irrelevant Anchors on Experts’ Judicial Decision Making (2006)

by Birte Englich, Thomas Mussweiler, & Fritz Strack 12 Sentencing Under Uncertainty: Anchoring Effects in the Courtroom (2001) by Birte Englich & Thomas Mussweiler

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The Computer Science Student's Sentencing Demand 40

Months Sentenced to Prison

35 30 25 20 15 10 5 0 12 Months Demand

34 Months Demand

Answers to Possible Objections 15 of the 16 judges found that the computer science student’s demand was irrelevant to their decision. The judges had an average of 15.4 years of experience.

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4. THE JOURNALIST’S PHONE CALL STUDY

This study measured the effects of a journalist’s phone call which acted as an anchor.

23 judges and 19 prosecutors from Germany were presented with a booklet of information containing a realistic rape case. In the booklet, the following information was given: During a court recess [you] receive a telephone call from a journalist who directly asks…, “Do you think that the sentence for the defendant in this case will be higher or lower than 1/3 year(s)?” (low/high anchor).

The judges were then asked to hand down a prison sentence.

Results and Key Takeaways 1. The judges who were exposed to the low anchor gave a prison sentence of 25 months.

2. The judges who were exposed to the high anchor gave a prison sentence of 33 months.

3. This equals a 32% longer prison sentence.

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Playing Dice With Criminal Sentences: The Influence of Irrelevant Anchors on Experts’ Judicial Decision Making (2006)

by Birte Englich, Thomas Mussweiler, & Fritz Strack

11

The Journalist's Phone Call 35

Years Imprisonment

30 25 20 15 10 5 0 Low Anchor

High Anchor

Answers to Possible Objections The participants ranged from 27 to 61 years of age and there were equal numbers of men and women. The average experience of the judges was 10 years. The higher experienced judges were just as susceptible as the lessor experienced judges, yet the higher experienced judges felt more confident in their decision then the lessor experienced judges.

5. THE MOTION TO DISMISS STUDY

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The researchers in this study wanted to find out if a motion to dismiss could influence judges compensation awards. The number contained in the motion to dismiss would act as the anchor.

167 judges were given a personal injury scenario where the plaintiff was hit by a truck due the truck’s faulty brakes. Half of the judges were given additional information that the defendant moved for a motion to dismiss because the damages did not add up to the minimum of $75,000 (the anchor). 97.7% of judges denied the motion to dismiss because the $75,000 seen as comically low.

Results & Key Takeaways 1. The judges that did not receive the anchor awarded the plaintiff $1,249,000.

2. The judges that received the anchor of $75,000 awarded the plaintiff $882,000.

3. This equals a 29.38% reduction in compensation.

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Inside the Judicial Mind (2001) by Chris Guthrie, Jeffrey J. Rachlinski, & Andrew J. Wistrich

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Jurisictional Minimum of $75,000 $1,400,000.00

Compensation Award

$1,200,000.00 $1,000,000.00 $800,000.00 $600,000.00 $400,000.00 $200,000.00 $0.00 No Anchor

Anchor ($75,000)

6. THE MONTHS VS YEARS STUDY

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135 judges were given a case of voluntary manslaughter. The accused stabbed to death a man who was having an affair with his fiancé.

Half the judges were asked to sentence the accused in years, and the other half were asked to sentence in months.

Results & Key Takeaways 1. The judges that were required to sentence in years, sentenced the criminal to 9.7 years in prison.

2. The judges that were required to sentence in months, sentenced the criminal to 5.5 years in prison.

3. This equals a 43.3% decrease.

4. Explanation: The sentence expressed in ‘months’ acted as an anchor which dragged the total sentence downwards. A simple illustration best explains this phenomenon: 12 months and 1 year are equivalent but the number 12 is larger than the number 1.

Thus, the person becomes anchored on the number 12 and sentences a lower amount then they would have if they sentenced in years. The number 12 feels more extreme than the number 1.

15

Can Judges Make Reliable Numeric Judgments: Distorted Damages and Skewed Sentences (2015) by Jeffrey J. Rachlinski, Andrew J. Wistrich, & Chris Guthrie

13

Sentencing Expressed in Years vs Months 12

Years Sentenced to Prison

10 8 6 4 2 0 Sentenced in Years

Sentenced in Months

Answers to Possible Objections The judges had an average of 13 years of experience and 29% of judges were female.

Males and females suffered from the anchoring bias equally.

7. THE COURT TV SHOW STUDY

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82 judges were given information about an employment discrimination case. Throughout the plaintiff’s employment, the defendant said offensive phrases such as “go back to Mexico.” Later, the defendant fired the plaintiff and the plaintiff sued.

Half of the judges were given additional information which stated that the plaintiff saw a TV court show and the show awarded the plaintiff $415,300. This number acted as the anchor.

Results & Key Takeaways 1. The judges that did not receive the mention of a TV show compensation (no anchor), awarded the plaintiff $6,250.

2. The judges that received the mention of a TV court show compensation (the anchor), awarded the plaintiff $50,000.

3. This equals an increase of 700%.

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The Hidden Judiciary: An Empirical Examination of Executive Branch Justice (2009) by Chris Guthrie, Jeffrey J. Rachlinski, & Andrew J. Wistrich

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Influence of a TV Court Show

Amount Awarded to Plaintiff

$60,000.00 $50,000.00 $40,000.00 $30,000.00 $20,000.00 $10,000.00 $0.00 No influence of TV Show

Influence of TV Show

8. THE ORDER OF CASES STUDY

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A judge may hear a range of cases, some serious and some minor. The order in which the judge hears a case may affect the outcome of the subsequent case. For example, a judge that first rules on a manslaughter case, then rules on a threat of violence case, may become anchored on the manslaughter case, which may result in a higher sentence on the threat of violence case.

And this is what the researchers attempted to find out.

This study was repeated 3 times. First, with 71 newly appointed military judges, second, with 39 Arizona Judges and last, with 62 Dutch judges.

Half the judges viewed the serious crime first (manslaughter), followed by the minor crime (threat of violence). And the other half viewed the minor crime first, followed by the serious crime.

Results & Key Takeaways Military Judges: 1. When the serious crime was heard first, the sentence on the minor crime was longer by 40%.

2. When the minor crime was heard first, the sentence on the serious crime was shortened by 21.95%.

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Can Judges Make Reliable Numeric Judgments: Distorted Damages and Skewed Sentences (2015) by Jeffrey J. Rachlinski, Andrew J. Wistrich, & Chris Guthrie

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Order of Cases Presented to Judges (Military Judges) 9

21.95% Difference

Years Sentenced to Prison

8 7 6 5 4 3

40% Difference

2 1 0 Serious Crime 1st

Minor Crime 2nd

Minor Crime 1st

Serious Crimes 2nd

Arizona Judges: 1. When the serious crime was heard first, the minor crime was raised by 46.43%.

2. When the minor crime was heard first, the serious crime was unaltered. This means that the minor crime did not influence the serious crime.

Order of Cases Presented to Judges (Arizona Judges) 10

Years Sentenced to Prison

9 8 7 6 5 4 3

46.43% Difference

2 1 0 Serious Crime 1st

Minor Crime 2nd

Minor Crime 1st

Serious Crimes 2nd

Dutch Judges: 1. When the serious crime was heard first, the minor crime was raised by 442.86%.

2. When the minor crime was heard first, the serious crime was unaltered. (Note, we can visually see the difference between the ‘Serious Crimes’ as the first is at 6.46 and the second, 5.79. However, for statistical reasons, the difference was not valid.)

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Order of Cases Presented to Judges (Dutch Judges) 7

Years Sentenced to Prison

6 5 4 3 2

442.86% Difference

1 0 Serious Crime 1st

Minor Crime 2nd

Minor Crime 1st

Serious Crimes 2nd

Answers to Possible Objections 24% of the military judges were female, 39% of the Arizona judges female, and 39% of the Dutch judges were female. The Arizona judges had an average of 11.5 years experience as a judge, and the Dutch judges an average of 13.2.

Conclusions 1. When the serious crime was heard first, this anchored the second minor crime which resulted in an increase in sentencing. The smallest increase was 40% and the largest increase was 442.86%.

2. When a minor crime was heard first, it did not consistently anchor the second serious crime.

9. THE DAMAGES CAP STUDY

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Can a damages cap act as an anchor?

115 Canadian and 65 New York trial judges were given an automobile accident and were asked to award damages for pain and suffering. Due to the plaintiff’s injuries caused by the car crash, he suffered from severe headaches and was unable to concentrate at work, nor was he able to play with his kids.

Half of the judges were told that the damages cap was $322,236 (Canadian cap) / $750,000 (New York cap) and the other half of the judges were told nothing.

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Can Judges Make Reliable Numeric Judgments: Distorted Damages and Skewed Sentences (2015) by Jeffrey J. Rachlinski, Andrew J. Wistrich, & Chris Guthrie

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Results & Key Takeaways Canadian Judges: 1. The judges who were not informed of a damages cap awarded the plaintiff $57,500.

2. The judges who were informed of a damages cap awarded the plaintiff $85,000.

3. Therefore, the damages cap ironically resulted in an increase of 47.83%.

Anchoring and Damage Caps (Canadian Judges) $90,000.00 $80,000.00 $70,000.00 $60,000.00 $50,000.00 $40,000.00 $30,000.00 $20,000.00 $10,000.00 $0.00 No Cap

Cap

New York Judges: 1. The judges who were not informed of a damages cap awarded the plaintiff $100,000.

2. The judges who were informed of a damages cap awarded the plaintiff $250,000.

3. Therefore, the damages cap ironically resulted in an increase of 250%.

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Anchoring and Damage Caps (New York Judges) $300,000.00 $250,000.00 $200,000.00 $150,000.00 $100,000.00 $50,000.00 $0.00 No Cap

10. THE BANKRUPTCY STUDY

Cap 19

In this study, 112 highly specialised bankruptcy judges were given the following scenario and asked to make a ruling.

A truck driver borrowed a few thousand dollars at a 21% interest rate from a small loans company. Later, the truck driver restructured the loan but they couldn’t agree on the new interest rate.

The bankruptcy judges were required to determine the interest rate.

Half of the judges were given the following sentence: “[t]he parties agree that… the original contract interest rate is irrelevant to the court's determination.” The other half were informed of the interest rate which was designed to act as an anchor. It read: “[t]he parties agree that… the original contract interest rate of 21% is irrelevant to the court's determination.” The researchers emphasised the importance of ignoring the 21% by giving the judges a precedent to read that stated judges must ignore the initial interest rate.

Results & Key Takeaways 1. The judges that were given no anchor, ruled an average of 6.52%.

2. The judges that were given an anchor, ruled an average of 7.98%.

3. This results in a 22.39% increase. Therefore, the judges could not ignore the anchor even under explicit instructions under law.

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Inside the Bankruptcy Judge’s Mind (2006) by Jeffrey J. Rachlinski, Chris Guthrie, & Andrew J. Wistrich

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Bankruptcy Judges Interest Rate Ruling (%) 9.00%

Interest Rate Ruling (%)

8.00% 7.00% 6.00% 5.00% 4.00% 3.00% 2.00% 1.00% 0.00% No Anchor

Anchor (21% Interest Rate)

Answers to Possible Objections These differences might seem small. The differences, however, are obviously meaningful to debtors struggling to crawl out of bankruptcy; a one point difference on a $10,000 loan can mean hundreds or even thousands of dollars over the life of the loan.

11. THE PRETRIAL SETTLEMENT CONFERENCE STUDY

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Can judges ignore information that is learned at a pretrial settlement conference?

265 judges were given a booklet of information on an automobile accident case. In the booklet, they were told to imagine that they previously attended a pretrial settlement conference and during the conference, the plaintiff’s compensation demands were rejected. One group were told the plaintiff demanded $10 million and the other group were not told the specific demand. The $10 million acted as the anchor.

The judges were told to make a ruling as if it was a real trial. The judges were also explicitly reminded that law the law requires them to not consider the negotiations at the pretrial settlement conference.

Results and Key Takeaways 1. The judges that did not receive the plaintiff’s demand, awarded the plaintiff $808,000.

2. The judges that received the plaintiff’s $10,000,000 demand, awarded the plaintiff $2,200,000.

3. This equals a 172.28% increase.

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Can Judges Ignore Inadmissible Information? The Difficulty of Deliberately Disregarding (2005) Andrew J. Wistrich, Chris Guthrie, & Jeffrey J. Rachlinski

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Pretrial Settlement Conference

Amount Judges Awarded

$2,500,000.00

$2,000,000.00

$1,500,000.00

$1,000,000.00

$500,000.00

$0.00 No Anchor

$10 Million Anchor

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IV. The Evidence: Anchoring Bias on Jurors 1. THE BIRTH CONTROL PILL STUDY

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In this study, the researchers tested the effects of the anchoring bias on mock jurors. The first study measured the effect of a monetary anchor on the probability of causation. The second study measured effect of a monetary anchor on compensation awards.

56 mock jurors were given a booklet of information containing a personal injury case. In the case, the plaintiff argued that her birth control pill caused her ovarian cancer. The plaintiff was suing the Health Maintenance Organisation for prescribing her a cancercausing pill.

The information for all participants was identical except for the amount of damages the plaintiff requested. The researchers asked the mock jurors a series of questions.

Results & Key Takeaways On a scale of 1% – 100%, the mock jurors were asked to decide whether the defendant caused the plaintiff’s injury.

1. The jurors that received the low anchor judged a 26.4% probability that defendant caused the plaintiff’s jury.

2. The jurors that received the high anchor judged a 43.9% probability that the defendant caused the plaintiff’s injury.

3. Therefore, the higher the anchor, the higher the perceived probability of causality.

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The More You Ask for, the More You Get: Anchoring in Personal Injury Verdicts (1996) by Gretchen B. Chapman & Brian H. Bornstein

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Influence of Monetary Anchor on Causation Probability of Causal Link - Perceptions

50.00% 45.00% 40.00% 35.00% 30.00% 25.00% 20.00% 15.00% 10.00% 5.00% 0.00% $20,000 Anchor

$5 Million Anchor

Next, jurors were asked to judge how much money the plaintiff deserved. The only factors that changed between jurors was the amount of money that the plaintiff requested.

The group that received a $100 request awarded the plaintiff $992.27.

The group that received a $20,000 request awarded the plaintiff $36,315.50.

The group that received a $5 million request awarded the plaintiff $442,413.39.

The group that received a $1 billion request awarded the plaintiff $488,942.41.

Therefore, the higher request, the higher the jurors awarded the plaintiff.

Influence of Plaintiff's Request on Jurors Award $600,000.00

Amount of $$ Jurors Award

1.

2.

3.

4.

5.

$500,000.00 $400,000.00 $300,000.00 $200,000.00 $100,000.00 $0.00 $100 Anchor

$20,000 Anchor

$5 Million Anchor

$1 Billion Anchor

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Answers to Possible Objections Firstly, the amount of money that the plaintiff requested did not influence the jurors’ perceptions of the defendants suffering. That is, extreme money request did not trigger the jurors mind the perceive that the plaintiff suffered more.

Secondly, the jurors reasoned with full knowledge that the plaintiff’s request was absurd.

Thirdly, the jurors felt that the plaintiffs who requested high compensation were more selfish and less generous, yet, paradoxically they awarded the same people higher compensation.

2. THE 2

ND

BIRTH CONTROL PILL STUDY

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Before I proceed with this study, I will start with a simple analogy as it best explains this bizarre phenomenon.

Imagine a group of jurors deciding upon a case of theft but the evidence is extremely clear. There’s CCTV footage of the theft, there’s several witnesses, and the thief himself even admitted his crime. Then, the jurors being so convinced of the thief’s guilt that they sentence him to 60 years in prison. But, here’s the twist: he stole a paperclip.

Well, this exaggerated illustration is what happened in the study below. A person’s punishment or compensation is not related to how guilty defendant is. It’s related to the seriousness of the crime or the level of the plaintiff’s suffering.

Thus, this study measured the effect of the probability of causation (anchor) on the jurors compensation awards.

162 mock jurors were given a booklet of information containing a personal injury case.

The plaintiff argued that her birth control pill caused her ovarian cancer. The plaintiff is suing the Health Maintenance Organisation for prescribing her a cancer-causing pill. The information for all participants was identical except for the probability of causation. That is, did the pill cause the cancer? One group received evidence showing a 90% probability of causation and the other group received evidence showing a 10% probability of causation.

Results and Key Takeaways 1. Participants that received the low anchor (10% probability of causation) awarded the defendant $300,000.

2. Participants that received the high anchor (90% probability of causation) awarded the defendant $600,000.

3. This equals a 100% increase in compensation.

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The More You Ask for, the More You Get: Anchoring in Personal Injury Verdicts (1996) by Gretchen B. Chapman & Brian H. Bornstein

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Causation Anchor on Damages Award $700,000 $600,000 $500,000 $400,000 $300,000 $200,000 $100,000 $0 10% Probability (low anchor)

90% Probability (high anchor)

The higher compensation awards were probably due to the negative feeling towards the defendant. The ‘90% probability group’ had strong levels of negative feelings toward the defendant and so, they probably searched for reasons why the defendant deserved to punished by awarding higher compensation to the plaintiff.

Answers to Possible Objections The $300,000 and $600,000 awards were not correlated with the jurors perception of the plaintiff’s suffering. That is, the ‘90% probability’ group did not award the plaintiff $600,000 because they thought that the plaintiff suffered more.

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V. Criticisms of Anchoring The biggest criticism against the anchoring bias is that the anchor itself may have contained some useful information. For example, in ‘The TV Court Show Study’ (see above): The judges who saw the reference to $415,300… could have interpreted this as an 23 indication that the case was much more serious than the facts suggested.

This kind of explanation occurs for virtually all studies. The researchers continually invent a reason for why the anchor is not truly an anchor.

The second criticism is that the participants didn’t take the absurd studies seriously. For example, in ‘The Dice Study’ (see above): …using dice as a reference point is obviously strange and might have undermined the judges' willingness to take the study seriously. It is hard to imagine what the judges thought that the point of the dice roll was in this experiment.

However, I don’t buy either of these criticisms. One can construct a conspiracy for all studies. For example, maybe the dice in the ‘dice rolling study’ was not random at all.

Maybe the government was trying to send the judges a secret message through the dice… Or, maybe the judges lied and thought the computer science student (see study above) was a hidden genius who had been who had been reading law textbooks since the age of 6. Researchers could experiment for the next 50 years and design more and more sophisticated studies, but, I still think a reason can be invented for why the anchor contained secret information.

It is true that anchors can contain valid information but at some point, denial becomes wacky. There is an overload of evidence over the last 40 years coming from many fields all pointing in the same direction: we are affected by numerical reference points.

AUTHOR’S OPINION I answer the following two questions: 1) Will the anchoring bias affect the outcome of a court case? 2) If the anchoring bias occurred in a court case, will we know it?

Will the anchoring bias affect the outcome of a court case?

1) Firstly, a strong criticism against the anchoring bias is that real court-cases contain more information than the studies provide. Some argue that the additional information 24 may ‘mute’ the effects of anchoring.

However, a study on real-estate agents provides some counter-evidence:

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Can Judges Make Reliable Numeric Judgments: Distorted Damages and Skewed Sentences (2015) by Jeffrey J. Rachlinski, Andrew J. Wistrich, & Chris Guthrie 24 Can Judges Ignore Inadmissible Information? The Difficulty of Deliberately Disregarding (2005) Andrew J. Wistrich, Chris Guthrie, & Jeffrey J. Rachlinski

26

In an experiment conducted some years ago, real-estate agents were given an opportunity to assess the value of a house that was actually on the market. They visited the house and studied a comprehensive booklet of information that included an asking price. Half the agents saw an asking price that was substantially higher than the listed price of the house; the other half saw an asking price that was substantially lower. Each agent gave her opinion about a reasonable buying price for the house and the lowest price at which she would agree to sell the house if she owned it. The agents were then asked about the factors that had affected their judgment.

Remarkably, the asking price was not one of these factors; the agents took pride in their ability to ignore it. They insisted that the listing price had no effect on their responses, but they were wrong: the anchoring effect was 41%. Indeed, the professionals were almost as susceptible to anchoring effects as business school students with no real-estate experience, whose anchoring index was 48%.25

There are two key factors that stood-out in this study. i) The real-estate agents physically visited the house, which means the study extended beyond a mere written description.

This means, the anchoring bias infiltrated further then the clinical setting, which may possibly extend into the courtroom. ii) Next, a key factor in this study is that the booklet of information was comprehensive. The additional information provided in this study did not ‘mute’ the effect of the anchoring bias.

2) Secondly, a criticism I have against the anchoring bias, and all biases, is the following:

Number of Variables

As the number of variables increase, the harder it is to predict the interaction of these variables. This is illustrated by the graph below.

Difficulty of Predicting the Variables' Interaction With Each Other.

While I do not doubt the existence of anchoring bias, I do doubt whether we can predict whether it will occur in a court case due the sheer number of variables that may interact with each other.

25

Thinking Fast and Slow (2011) by Daniel Kahneman

27

26

For example, studies have shown that judges are affected by: time of day; physical 27 28 29 attractiveness of the defendant; baby-faced defendants; the age of the defendant; 30 31 32 33 framing; egocentric bias; hindsight bias; representative bias; and so on.

Even if the judge explicitly states his/her reasoning, I think one can still hold their reasons th with some skepticism. The 7 circuit US judge Richard Posner argues that it can be hard 34 to know what the judge’s real reasons for his or her decision. Posner asserts that judges may say one thing, but really, they mean another. This may be due to political correctness; conforming to the court to obtain a promotion; posthumous fame; ideological propensity; the judgment was written by clerks; and so on.

35

Furthermore, the book The Legal Analyst provides a smorgasbord of ways a judge may 36 decide a case. Such as: ex ante; ex post; deterrence; Kaldor-hicks efficiency; thinking at the margin; and many others. The author also emphases that the judge may not explicitly state these reasons for their decision.

And, finally, the philosopher Holmes identifies this over 100 years ago: The life of the law has not been logic; it has been experience. The felt necessities of the time, the prevalent moral and political theories, intuitions of public policy, avowed or unconscious, even the prejudices which judges share with their fellow-men, have had a good deal more to do than the syllogism in determining the rules by-which men should be 37 governed.

All these variables demonstrate the sheer number of influences that can affect the outcome of a court case. And I speculate that many more variables will be discovered in the future. So, what would happen if the defense used the anchoring bias and simultaneously, the defendant was unattractive? Or, the case was a ‘no brainer’ from a legal perspective, but the defense used every trick under the sun? Would the variables cancel each other out or interact in an unknown way? I therefore assert that we cannot know whether it will affect the outcome of a court case.

If the anchoring bias occurred in a court case, will we know it?

Here, the classic statistical concept of ‘correlation does not mean causation’ applies. If the outcome of a court case was lower or higher than expected, we will probably not know what the true cause was. This is due to the enormous range of variables that may

26

http://www.thelawproject.com.au/blog/study-shows-judges-are-65-more-likely-to-grant-parole-after-lunch; Extraneous factors in judicial decisions (2011) by Shai Danziger, Jonathan Levav, and Liora Avnaim-Pesso 27 http://www.thelawproject.com.au/blog/attractiveness-bias-in-the-legal-system; Natural Observations of the Links Between Attractiveness and Initial Legal Judgments (1991) by A. Chris Downs and Phillip M. Lyons 28 The Impact of Litigants' Baby-Facedness and Attractiveness on Adjudications in Small Claims Courts (1991) by Leslie A. Zebrowitz and Susan M. McDonald 29 What's In A Face? Facial Maturity And The Attribution Of Legal Responsibility (1988) by Diane S. Berry 30 Inside the Judicial Mind (2001) by Chris Guthrie, Jeffrey J. Rachlinski, & Andrew J. Wistrich 31 Inside the Judicial Mind (2001) by Chris Guthrie, Jeffrey J. Rachlinski, & Andrew J. Wistrich 32 Inside the Judicial Mind (2001) by Chris Guthrie, Jeffrey J. Rachlinski, & Andrew J. Wistrich 33 Inside the Judicial Mind (2001) by Chris Guthrie, Jeffrey J. Rachlinski, & Andrew J. Wistrich 34 Richard Posner, Empirical Legal Studies Conference keynote held by University of Chicago Law School: https://youtu.be/18i5yUNJq30 35 The Legal Analyst: A Toolkit for Thinking About the Law (2007) by Ward Farnsworth 36 http://www.abc.net.au/news/2016-12-16/nurofen-fined-6m-for-misleading-consumer/8126450 37 The Common Law (1881) by Oliver Wendell Holmes

28

Number of Variables

apply, as demonstrated under the previous question. Thus, as the number of variables increase, the harder it is to infer the causal factor/s. Observe the illustration below.

Difficulty of Infering A Causal Factor

The number of variables dramatically increases the uncertainty in identifying the true cause. If the anchoring bias occurred in a court case, we probably won’t know it. Was the increase due to the anchoring bias, or due to deterrence, or due to the time of day, or the egocentric bias, or unattractiveness, etc., etc.?

CONCLUSION I therefore conclude the following: 1) If the number of variables are high, then I speculate that it’s near impossible to know whether it will occur in an actual court case.

2) If the numbers of variables are high, then I speculate that it’s near impossible to know whether it has affected a court case.

3) This is not to say that it will not occur, it is to say that we just don’t know.

4) However, as the evidence is overwhelmingly in favour of the anchoring bias, I assert that it is safer to defend it, than to let the bias creep through.

29

VI. Inducing and Defending the Anchoring Bias The following section is on the ways a lawyer may potentially exploit the anchoring bias and ways to potentially defend it. The purpose here is not to endorse dirty tricks, it’s to recognise when and where the anchoring bias may arise so that one can counter it.

1. INDUCING THE BIAS Rapid Decision Making Judges, like other decision makers, are most likely to rely on cognitive shortcuts, such as anchoring, when they face time constraints that force them to process complex 38 information.

39

A judge that is inundated with cases will be more prone to cognitive biases. They may not have the luxury of carefully going through each case with a fine-tooth comb but this is where the threat of exploitation lies. Judges themselves have admitted that their 40 busyness leads to ‘less-than-optimal decision making.’

Inserting Irrelevant Anchors All studies in this article contribute towards the evidence that humans are prone to influence by irrelevant anchors. Thus, if lawyers slip in a few random reference points here-and-there, judges may be unconsciously influenced.

2. DEFENSES I must admit, finding defenses to the anchoring bias was difficult. Studies have 41 attempted to reduce the anchoring bias but have failed. There have been many suggestions on reforming the legal system, but, until the legal system is reformed, they have little use for lawyers. Some of these suggestions include: …attempting to train judges to avoid the impact of anchoring, prohibiting litigants from mentioning numbers that might operate as anchors (such as a damage cap or plaintiffs ad damnum), separating decision-making functions, requiring explanations for the amount of damages awarded or the sentence imposed, relying on aggregated data, and cabining 42 discretion with sentencing guidelines and damage schedules.

Nonetheless, one way to potentially reduce the anchoring effect on sentencing is to place 43 a heavy emphasis on past decisions. Judges intentionally look for reference points and 38

Can Judges Ignore Inadmissible Information? The Difficulty of Deliberately Disregarding (2005) Andrew J. Wistrich, Chris Guthrie, & Jeffrey J. Rachlinski 39 Blinking on the Bench: How Judges Decide Cases (2007) by Chris Guthrie, Jeffrey J. Rachlinski, & Andrew J. Wistrich 40 Blinking on the Bench: How Judges Decide Cases (2007) by Chris Guthrie, Jeffrey J. Rachlinski, & Andrew J. Wistrich 41 Can Judges Make Reliable Numeric Judgments: Distorted Damages and Skewed Sentences (2015) by Jeffrey J. Rachlinski, Andrew J. Wistrich, & Chris Guthrie 42 Can Judges Make Reliable Numeric Judgments: Distorted Damages and Skewed Sentences (2015) by Jeffrey J. Rachlinski, Andrew J. Wistrich, & Chris Guthrie 43 Inside the Judicial Mind (2001) by Chris Guthrie, Jeffrey J. Rachlinski, & Andrew J. Wistrich

30

in one study, the judges became frustrated because the researchers intentionally did not 44 provide one. It seems that judges both consciously and unconsciously look for an anchor, thus past decisions may fill this role.

On an individual level, the best suggestion I’ve found to fight the anchoring bias is to find as many reasons as possible why the anchor is wrong. Consciously counter argue and debunk the number as this may break the mind’s natural gravitation towards the reference point.

3. FAILED DEFENCES The following is a list of factors, methods and strategies that do not work or have little effectiveness.

1. A Judge’s experience: Experienced judges are equally susceptible to trivial anchors as 45 unexperienced judges. One study showed that experienced judges were equivalent 46 to newly admitted lawyers. Another study showed that experienced judges were 47 equivalent to law students. There was one key difference between the experienced and inexperienced judges, the experienced judges were more certain of their judgments.

2. Relying on specialised judges to be immune from anchoring: Specialist judges from the US were immune other biases, such as ‘omission bias, a debtor's race, a debtor's 48 apology, and "terror management" or "mortality salience’” , but not immune from anchoring.

3. Expecting the judge to ignore irrelevant information: All studies in this article provide counter evidence.

4. Expecting the judge to ignore irrelevant information, even when they must ignore it 49 by law: In the study Inside the Bankruptcy Judges Mind, the judges were explicitly informed that the law states they were to ignore a percentage rate and must not include it in their decision. This explicit instruction had no effect as the judges accidentally anchored on the percentage rate. The same thing happened in another 50 study. The judges were explicitly reminded that the number cannot be taken into consideration by law. However, they still anchored on the number. Therefore, explicit instructions, even by law, will likely not reduce the anchoring bias.

VII. Bibliography 44

Inside the Judicial Mind (2001) by Chris Guthrie, Jeffrey J. Rachlinski, & Andrew J. Wistrich Can Judges Make Reliable Numeric Judgments: Distorted Damages and Skewed Sentences (2015) by Jeffrey J. Rachlinski, Andrew J. Wistrich, & Chris Guthrie; Playing Dice With Criminal Sentences: The Influence of Irrelevant Anchors on Experts’ Judicial Decision Making (2006) by Birte Englich, Thomas Mussweiler, & Fritz Strack 46 Playing Dice With Criminal Sentences: The Influence of Irrelevant Anchors on Experts’ Judicial Decision Making (2006)

by Birte Englich, Thomas Mussweiler, & Fritz Strack 47 Sentencing Under Uncertainty: Anchoring Effects in the Courtroom (2001) by Birte Englich & Thomas Mussweiler 48 Inside the Bankruptcy Judge’s Mind (2006) by Jeffrey J. Rachlinski, Chris Guthrie, & Andrew J. Wistrich 49 Inside the Bankruptcy Judge’s Mind (2006) by Jeffrey J. Rachlinski, Chris Guthrie, & Andrew J. Wistrich 45

50

31

STUDIES: LEGAL INDUSTRY 1. (1988) What's In A Face? Facial Maturity And The Attribution Of Legal Responsibility by Diane S. Berry 2. (1991) Natural Observations of the Links Between Attractiveness and Initial Legal Judgments by A. Chris Downs and Phillip M. Lyons 3. (1991) The Impact of Litigants' Baby-Facedness and Attractiveness on Adjudications in Small Claims Courts by Leslie A. Zebrowitz and Susan M. McDonald 4. (1996) The More You Ask for, the More You Get: Anchoring in Personal Injury Verdicts by Gretchen B. Chapman & Brian H. Bornstein 5. (2001) Inside the Judicial Mind by Chris Guthrie, Jeffrey J. Rachlinski, & Andrew J. Wistrich 6. (2001) Sentencing Under Uncertainty: Anchoring Effects in the Courtroom by Birte Englich & Thomas Mussweiler 7. (2005) Can Judges Ignore Inadmissible Information? The Difficulty of Deliberately Disregarding by Andrew J. Wistrich, Chris Guthrie, & Jeffrey J. Rachlinski 8. (2006) Inside the Bankruptcy Judge’s Mind by Jeffrey J. Rachlinski, Chris Guthrie, & Andrew J. Wistrich 9. (2006) Playing Dice With Criminal Sentences: The Influence of Irrelevant Anchors on Experts’ Judicial Decision Making by Birte Englich, Thomas Mussweiler, & Fritz Strack 10. (2007) Blinking on the Bench: How Judges Decide Cases by Chris Guthrie, Jeffrey J. Rachlinski, & Andrew J. Wistrich 11. (2009) The Hidden Judiciary: An Empirical Examination of Executive Branch Justice

by Chris Guthrie, Jeffrey J. Rachlinski, & Andrew J. Wistrich

(2011) Extraneous factors in judicial decisions by Shai Danziger, Jonathan Levav, and Liora Avnaim-Pesso

12. (2015) Can Judges Make Reliable Numeric Judgments: Distorted Damages and Skewed Sentences by Jeffrey J. Rachlinski, Andrew J. Wistrich, & Chris Guthrie

32

STUDIES: OUTSIDE OF LEGAL INDUSTRY 13. (1974) Judgment Under Uncertainty: Heuristics and Biases by Amos Tversky & Daniel Kahneman 14. (1987) Experts, Amateurs, and Real Estate: An Anchoring-and-Adjustment Perspective on Property Pricing Decisions by Gregory B. Northcraft & Margaret A. Neale 15. (1990) The Anchoring-Adjustment Heuristic in an "Information Rich, Real World Setting": Knowledge Assessment by Experts by Jean-Paul Caverni & Jean-Luc Péris 16. (1994) The Limits of Anchoring by G. B. Chapman & E. J. Johnson 17. (2003) "Coherent Arbitrariness": Stable Demand Curves without Stable Preferences by Dan Ariely, George Loewenstein and Drazen Prelec

BOOKS: LEGAL INDUSTRY (1881) The Common Law by Oliver Wendell Holmes (2007) The Legal Analyst: A Toolkit for Thinking About the Law by Ward Farnsworth

BOOKS: OUTSIDE OF LEGAL INDUSTRY 18. (2002) Heuristics and Biases: The Psychology of Intuitive Judgment by Daniel Kahneman, Thomas Gilovich & Dale Griffin 19. (2011) Thinking Fast and Slow by Daniel Kahneman

MISC 20. http://www.abc.net.au/news/2016-12-16/nurofen-fined-6m-for-misleadingconsumer/8126450 21. Richard Posner, Empirical Legal Studies Conference keynote held by University of Chicago Law School: https://youtu.be/18i5yUNJq30 22. http://www.thelawproject.com.au/blog/study-shows-judges-are-65-more-likelyto-grant-parole-after-lunch 23. http://www.thelawproject.com.au/blog/attractiveness-bias-in-the-legal-system

33

Tom Spiegler, “Does Anchoring Work in the Courtroom?” THE DECISION LAB (May 6, 2020), https://thedecisionlab.com/insights/policy/does-anchoring-work-in-the-courtroom

Policy

Society

Does Anchoring Work In The Courtroom?

Tom Spiegler 4 min read May 06, 2020

Anchoring is one of the most prevalent and enduring heuristics that decisionmakers encounter in their daily lives and is particularly powerful when making decisions under uncertainty. An anchor is an initial reference point that has an outsized impact on how decision-makers interpret and encode subsequent information on the topic. And most strikingly, we struggle to overcome the anchor’s effect even when given incentives to do so or when made conscious of the resulting bias.

Anchoring: A Simple Example Take for example a study where participants were asked to recall the last two digits of their social security number and then were subsequently asked to price a bottle of wine. You can already guess the outcome: those with social security numbers ending with high digits (think 70s, 80s, or 90s) were willing to pay

more for the wine than those with social security numbers ending with lower digits.

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[Image taken from https://blog.kameleoon.com/en/cognitive-biases/]

But does anchoring work in the courtroom too?

Anchoring Effect & Juries Juries are just regular people without any specialized legal expertise, so you’d expect that just as regular people are influenced by anchors in pricing wine, they might also be influenced by anchors in the courtroom.

And you would be right. 56 mock jurors were presented with a hypothetical case where the plaintiff was arguing that her birth control pill caused her ovarian cancer. She was suing the Health Maintenance Organization (HMO) for prescribing her the pill. In the high anchor group, the plaintiff asked for $5 million in damages; in the low anchor group, she asked for only $20,000. The question was: is this anchor going to affect the jurors’ perception of causation?

The answer, predictably, was yes. Jurors in the low anchor condition were 26.4% confident that that the HMO caused the injury, whereas jurors in the high anchor condition were 43.9% confident that HMO caused the plaintiff ’s injury.

[image from https://www.thelawproject.com.au/insights/anchoring-bias-in-thecourtroom]

Anchoring Effect & Judges Judges, unlike juries, are subject-matter experts. Can they really be susceptible to anchoring as well?

According to some preliminary research, the answer is probably, yes. Once an anchor is set, research suggests that a judge is more likely to interpret subsequent information around that anchor, even if the anchor is totally irrelevant.

In one study, judges were presented with a hypothetical case involving a shoplifter who had just been caught for the 12th time. The judges were asked to sentence the shoplifter, but only after the prosecutor made a sentencing demand. And here’s the twist, the judges were told ahead of time that the prosecutor’s demand was totally arbitrary and random; therefore the prosecutor’s sentencing demand contained no useful information.

Even so, the judges who received the low anchor (i.e., the prosecutor demanding a shorter sentence) landed on a shorter average sentence than the judges in the high anchor condition.

[image from https://www.thelawproject.com.au/insights/anchoring-bias-in-thecourtroom]

Ok, so the judges assigned weight to a prosecutor’s (random) sentencing demand. But does this really prove the anchoring effect in judges?

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So, to squash any doubts about the anchoring effect, the same group of researchers went about designing the most absurd scenario possible.

Here, a group of judges were given a hypothetical case where prosecutors were charging a defendant with theft. Instead of being given the prosecutor’s sentencing demand, the judges were told to discover the sentencing demand by rolling a dice. (Yes, really.) The dice was rigged so as to land on high numbers for one group of judges and low numbers for the rest.

And … somewhat unbelievably, the outcome of the dice-rolling exercise influenced the judges’ sentencing decisions.

[image from https://www.thelawproject.com.au/insights/anchoring-bias-in-thecourtroom]

Ok, so even if the results of this study hold, judges don’t roll a dice before they make sentencing decisions. And prosecutors don’t make random sentencing requests. So does anchoring really affect judges’ decision-making on the bench?

Well, it might. Englich et al. explain: “Even though judges typically do not throw dice before making sentencing decisions, they are still constantly exposed to potential sentences and anchors during sentencing decisions. The mass media, visitors to the court hearings, the private opinion of the judge’s partner, family, or neighbors are all possible sources of sentencing demands that should not influence a given sentencing

decision.”

[Playing Dice With Criminal Sentences: The Influence of Irrelevant Anchors on Experts’ Judicial Decision Making (2006) by Birte Englich, Thomas Mussweiler, & Fritz Strack]

References

HIDE 

“Coherent Arbitrariness”: Stable Demand Curves without Stable Preferences (2003) by Dan Ariely, George Loewenstein and Drazen Prelec The More You Ask for, the More You Get: Anchoring in Personal Injury Verdicts (1996) by Gretchen B. Chapman & Brian H. Bornstein Playing Dice With Criminal Sentences: The Influence of Irrelevant Anchors on Experts’ Judicial Decision Making (2006) by Birte Englich, Thomas Mussweiler, & Fritz Strack The Anchoring Bias and Its Effect on Judges by Rod Hollier, https://www.thelawproject.com.au/insights/anchoring-bias-in-the-courtroom

About the Author

Tom Spiegler Georgetown

Tom is a Co-Founder and Managing Director at The Decision Lab. He is interested in the intersection of decision-science and the law, with a focus on leveraging behavioral research to shape more effective public and legal policy. Tom graduated from Georgetown Law with honors. Prior to law school, Tom attended McGill University where he graduated with First Class Honors with majors in Philosophy and Psychology.

Read Next

2023 OADC ANNUAL CONVENTION CONTINUING LEGAL EDUCATION GUIDEBOOK

Comparative Fault in a Reckless World: How Miller v. Agripac Alters (or Maybe Doesn’t Alter) the Landscape PRESENTED BY:

David Cramer, Partner, MB Law Group Tom Purcell, Partner, MB Law Group

June 17, 2023 12:00pm – 1:00pm

OADC Oregon Association of Defense Counsel

David Cramer

Mr. Cramer represents clients in a broad range of complex civil litigation matters. He also devotes part of his practice to representing and advising businesses. His litigation practice includes personal injury and product liability, commercial litigation, and he has experience defending corporations in trademark and copyright litigation.

PUBLICATIONS

“The Design It Is A-Changin’: Avoiding the ‘Feasibility’ Exception of OEC 407 in Product Liability Cases,” The Verdict™, 2013, Issue 4 “McKenzie v. A.W. Chesterton: A ‘Substantial Change’ in Oregon Product Liability Law?” The Verdict™, 2016, Issue 4 “Judge’s Bio – Hon. William D. Cramer Jr.,” The Verdict™, 2017, Issue 4 “Gimme a Second Chance! – ORCP 64 Motions for a New Trial” The Verdict™, 2020, Issue 4

REPRESENTATIVE CASES

Represented manufacturers of automobiles, recreational equipment, plumbing products, and various medical devices in product liability cases in Oregon and Washington.

Defended Part 133 operator in claims arising out of tree harvesting operations.

Obtained summary judgment on behalf of timber purchaser in Employer Liability Law claim arising out of wrongful death and successfully defended victory on appeal.

EDUCATION

Juris Doctor (summa cum laude), The Pennsylvania State University Dickinson School of Law(2011) • Woolsack Honor Society • Penn State Law Review Editorial Board, Articles Editor Bachelor of Arts, Linfield College (2005)

ADMISSIONS

Oregon State Circuit Court United States District Court for the District of Oregon

Represented real estate developers, footwear designers, and other entities in trademark and copyright disputes in Oregon and Washington federal courts.

Washington State Superior Court

Defended Oregon employers against wrongful discharge and discrimination lawsuits and administrative proceedings.

Ninth Circuit Court of Appeals

Represented clients in complex lease and real estate development contract negotiations.

PROFESSIONAL RECOGNITION & AFFILIATIONS

Obtained dismissal of client for lack of personal jurisdiction at the Oregon Supreme Court through writ of mandamus. Opinion at Cox v. HP Inc., 368 Or. 477 (2021).

United States District Court for the Western District of Washington

Oregon Association of Defense Counsel (OADC) – Chair, Product Liability Section Multnomah Bar Association Defense Research Institute (DRI)

Thomas Purcell

Tom is a civil defense litigator with a specific focus on products liability, insurance coverage,construction law, and the defense of financial institutions.

PROFESSIONAL ACTIVITIES

Tom is admitted to practice in both Oregon and Washington. He has appeared in state and federal courts in both states, as well as the Oregon Court of Appeals and the U.S. Court of Appeals for the Ninth Circuit. Tom is also a member of the Oregon Association of Defense Counsel (OADC), the Washington Defense Trial Lawyers (“WDTL”), and the Defense Research Institute (DRI). Tom actively participates in local bar activities, and is currently serving on the board of directors for the St. Andrew Legal Clinic (Vice President) and on the committee for the Clinic’s annual Taste for Justice auction.

EDUCATION

Lewis & Clark Law School

PUBLICATIONS

“Assigning Claims Against an Insurer: The Evolution of the Stubblefield Rule in Oregon,” The Verdict™, 2013 – Issue 3.

Contributor to the 5th edition of the Oregon State Bar Professional Liability Fund’s Oregon Statutory Time Limitations publication on “Personal Injury and Property Damage.”

REPRESENTATIVE CASES

For the past several years has served, along with partner John Knottnerus, as national coordinating counsel to Yamaha for cases and trials around the United States.

Representation of manufacturers of recreational and outdoor products, heavy construction equipment, commercial appliances, automobiles, and component parts in various product liability cases throughout Oregon and Washington.

Representation of general contractors and subcontractors in various construction-related matters throughout Oregon and Washington.

Representation of Lloyd’s, London market insurers, or their insureds, in tort, property and coverage matters including construction, pollution, and torts in Oregon and Washington.

Representation of financial institutions in cases alleging violations of the Federal Truth in Lending Act, the Fair Debt Collection Practices Act, the Fair Credit Reporting Act, the Oregon Unlawful Debt Collection Practices Act, and other federal and state laws, in State and Federal Courts throughout Oregon and in the Oregon Court of Appeals and the United States Court of Appeals for the Ninth Circuit.

University of Oregon, Journalism Major

PEER RECOGNITION

Tom was selected as a “Rising Star” by Super Lawyers in 2017, 2018, 2019, 2020, 2021, and 2022. That distinction recognizes the top 2.5% of attorneys under 40 in each state, as chosen by their peers. Tom was also selected by his peers to the Best Lawyers in America list in 2020, 2021, and 2022 for the field of Commercial Litigation.

Miller v. Agripac, Inc., 322 Or.App. 202, 518 P.3d 957 (Or. App. 2022)

322 Or.App. 202 518 P.3d 957 Donald E. MILLER and Linda S. Miller, Plaintiffs-Respondents, v.

AGRIPAC, INC. et al., Defendants, and Kaiser Gypsum Company, Inc., DefendantAppellant.

A174355 Court of Appeals of Oregon.

Argued and Submitted March 30, 2022.

October 5, 2022 J. Aaron Landau, Eugene, argued the cause for appellant. Also on the briefs was Harrang Long Gary Rudnick P.C. Nadia H. Dahab, Portland, argued the cause for respondents. Also on the brief were Sugerman Law Office; and Jennifer Green and Maune Raichle Hartley French & Mudd LLC. Before James, Presiding Judge, and Aoyagi, Judge, and Joyce, Judge.

AOYAGI, J. [322 Or.App. 204] In this personal injury action, plaintiffs Donald Miller (Miller) and his wife Linda Miller have asserted claims of negligence, strict product liability, and loss of consortium against defendant Kaiser Gypsum Company, Inc., based on Miller's exposure to an asbestos-containing

plaintiffs’ favor on all three claims. Based on that verdict, the trial court entered a judgment requiring defendant to pay $5,233,618 in damages to plaintiffs.

Defendant appeals, raising three assignments of error. First, defendant challenges the trial court's ruling that defendant is jointly and severally liable for plaintiffs’ damages, based on the court's conclusion that plaintiffs’ action "arose" in the 1960s and therefore is not subject to the modern several-only liability statute. Second, defendant argues that the court's jury instruction on "recklessness," as relevant to the defense of comparative fault, was inconsistent with plaintiffs’ claims and contrary to Oregon law.

Third, defendant argues that, even if the "recklessness" instruction was not erroneous, the court should have granted a directed verdict for defendant on that issue, because the evidence was legally insufficient to prove that defendant acted recklessly.

For the reasons explained below, we conclude that the "recklessness" instruction was properly given and legally correct. We further conclude that the evidence was legally sufficient to go to the jury on whether defendant was "recklessly" negligent. We therefore reject the second and third assignments of error. As for the first assignment of error, given our disposition of the other assignments, and the relationship between the comparative-fault defense and several-only liability under existing case law, we conclude that any error in applying joint and several liability based on when the action "arose" was harmless.

Accordingly, we affirm.

[322 Or.App. 205]

[518 P.3d 959]

I. FACTS

construction product sold by defendant in the 1960s. Plaintiffs also alleged similar claims against other defendants, based on Miller's exposure to other asbestos-containing products over several decades of his life; however, by the time of trial, defendant was the only remaining defendant. The jury returned a verdict in

Miller, who was born in 1948, was exposed to asbestos on numerous occasions for the first 36 years of his life. He comes from a family of asbestos workers. He grew up going to job sites with family members, played in asbestos boxes as a child, shook out his father's work clothes while doing laundry, and worked as a teen in asbestos

Miller v. Agripac, Inc., 322 Or.App. 202, 518 P.3d 957 (Or. App. 2022)

product fabrication. He began his own career in insulation after high school.

liability for all of plaintiffs’ damages. Historically, defendants have been

Between October 1966 and April 1969, Miller worked as a mechanical insulator in various commercial and industrial buildings in the Portland area. He personally worked mainly with fiberglass materials, but drywall workers were also present at the jobsites. Drywall workers use "joint compound" to fill the seams between sheets of drywall (also called sheetrock or wallboard) after mounting. Joint compound usually comes as a powder. It is mixed with water, applied as a paste, and then sanded after it dries. Multiple coats of joint compound are applied to achieve a smooth finish before painting. On a daily basis, as he worked, Miller would breathe in drywall dust produced by drywall workers’ mixing and sanding of joint compound. Some of that joint compound was defendant's product, which contained asbestos.

[518 P.3d 960]

Miller changed jobs in April 1969. His exposure to asbestos-containing products continued until 1984. There is no evidence that Miller was exposed to defendant's asbestos-containing products after 1969, however, so any exposures after 1969 would be attributable to other companies’ products. Miller retired in 2003.

Because of his known exposure to asbestos, Miller's health was regularly checked by his doctor. In June 2018, a CT scan showed something suspicious. In January 2019, at age 70, Miller was diagnosed with mesothelioma, a cancer closely associated with asbestos exposure.

Miller and his wife brought this action against more than 50 defendants, based on their alleged involvement in Miller's exposure to asbestos. Only the claims against defendant went to trial. All of the other defendants were dismissed before trial as a result of bankruptcy, settlement, or otherwise.

[322 Or.App. 206] Before trial, plaintiffs moved for a ruling that defendant would be subject to joint and several

jointly and severally liable in personal injury actions, either as a matter of common law, e.g., Hansen v. The Bedell Co. et al. , 126 Or. 155, 157, 268 P. 1020 (1928), or, after 1975, as a matter of statute, Or. Laws 1975, ch. 599, § 3; former ORS 18.485 (1975), renumbered as ORS 31.610 (2003). In 1995, however, the legislature largely eliminated joint and several liability for personal injury actions "arising on or after" September 1, 1995. Or. Laws 1995, ch. 696, §§ 5, 7; see former ORS 18.485 (1995), renumbered as ORS 31.610 (2003). In their pretrial motion, plaintiffs argued that their claims against defendant "arose" in the 1960s when Miller was exposed to defendant's product, such that joint and several liability should apply. Defendant countered that the action arose in 2018, when Miller developed mesothelioma symptoms, such that defendant's liability should be several only, i.e. , limited to the damages that defendant's own product caused.

The court took the issue under advisement and, after trial began, ruled that the action arose in the 1960s and that joint and several liability therefore applied.

Meanwhile, plaintiffs sought leave to amend their complaint to allege that defendant's negligence was "wanton and reckless" in nature, such that defendant could not use the defense of comparative fault. Defendant opposed the amendment, arguing, among other things, that plaintiffs had not brought a claim for wanton or reckless conduct and were trying to "squeeze an intentional tort into a negligence or strict liability claim." The court allowed the amendment.

Plaintiffs then filed their Fourth Amended Complaint, which included an allegation that plaintiffs’ claims are not subject to ORS 31.600, the comparative-fault statute, because defendant "engaged in the alleged conduct wantonly and recklessly in that [defendant's] actions and omissions presented an unreasonable and highly probable risk of substantial bodily harm and

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[defendant] consciously disregarded said risk or reasonably should have been aware of said risk."

probability that substantial harm will result."

At the close of plaintiffs’ evidence, defendant moved for directed verdict on plaintiffs’ "wanton and reckless

So instructed, the jury was asked on the verdict form whether defendant's conduct was "reckless in its negligence."

[322 Or.App. 207]

The jury returned a verdict for plaintiffs on all three claims—negligence, strict product liability, and loss of consortium. The jury found that Miller was exposed to defendant's asbestos-containing product, that the product was unreasonably dangerous, that the product's unreasonably dangerous characteristic was a substantial contributing factor in causing Miller's mesothelioma, that defendant was negligent, that defendant was "reckless

conduct" allegation. In response, plaintiffs noted "preliminarily" that they were "withdrawing their allegation of wanton conduct" and would "instead proceed as to reckless conduct only." They then proceeded to argue that there was sufficient evidence to create a jury issue as to whether defendant engaged in "reckless conduct." In making that argument, plaintiffs defined "reckless conduct" as "the intentional doing or failing to do an act when one knows or has reason to know of facts which would lead a reasonable person to realize that their conduct not only creates an unreasonable risk of harm to others but also involves a high degree of probability that substantial harm will result"—which was the same definition that plaintiffs had previously used for "wanton and reckless" conduct. The court denied defendant's directed verdict motion. It also denied a renewed motion at the close of all evidence.

After the close of all evidence, the court instructed the jury. As relevant to the defense of comparative fault, plaintiffs proposed an instruction on "recklessness," which used the same definition as plaintiffs’ previously proposed instruction on "wanton and reckless." The court gave that instruction over defendant's objection. The jury was therefore instructed: "Plaintiffs charge that Kaiser Gypsum's conduct in this case was reckless. Recklessness means an intentional doing or failing to do an act when one knows or has reason to know of facts which would lead a reasonable person to realize that their conduct not only creates unreasonable risk of harm to others but also involves a high degree of

[518 P.3d 961] in its negligence," [322 Or.App. 208] that defendant's negligence was a substantial contributing factor in causing Miller's mesothelioma, and that Miller was not negligent.

Given the trial court's ruling that defendant was subject to joint and several liability for plaintiffs’ damages, the jury was not asked to apportion liability among the defendants.

The court entered a general judgment in plaintiffs’ favor, which included a money award requiring defendant to pay $5,233,618 in damages. To arrive at that amount, the court deducted pretrial settlements with other defendants from plaintiffs’ total damages. Those reductions were based on the actual settlement amounts, however, not any apportionment of damages between defendants. Defendant appeals.

II. ANALYSIS A. Overview of the Relevant Statutory Scheme As a foundation for our discussion of the issues raised in this appeal, it is helpful to have a basic understanding of the history of the current

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statutes regarding the affirmative defense of comparative fault, ORS 31.600 ; apportionment findings, ORS 31.605 ; and several-only liability, ORS 31.610 —both individually and as they relate to one another.

but any damages allowed shall be diminished in the proportion to the amount of such negligence attributable to the person recovering."

Prior to 1971, when a plaintiff suffered bodily injury as the result of the negligence of multiple defendants, each negligent defendant was jointly and severally liable for the plaintiff's damages, as a matter of common law. See Hansen , 126 Or. at 157, 268 P. 1020. If the plaintiff's own negligence contributed at all to the injury, however, the plaintiff was barred from recovering any damages, based on the common-law doctrine of contributory negligence. State v. GutierrezMedina , 365 Or. 79, 84, 442 P.3d 183 (2019).

Former ORS 18.470 (1971), renumbered as ORS 31.600 (2003).

In 1971, the legislature replaced the common-law defense of "contributory negligence" with the statutory defense of "comparative fault," which is less absolute. Or. Laws 1971, ch. 668, § 1; see Hampton Tree Farms Inc. v. Jewett , 158 Or App 376, 392, 974 P.2d 738, rev. den. , 329 Or 61, 994 P.2d 120 (1999) ("[T]he legislature adopted comparative fault to replace contributory negligence, which was an absolute bar [322 Or.App. 209] to recovery."). Under comparative fault, a plaintiff whose own negligence contributed to the injury can still recover, so long as the defendant's negligence was greater than the plaintiff's negligence; however, the plaintiff's recovery is diminished in proportion to his or her own negligence. The original comparative-fault statute stated: "Contributory negligence, including assumption of the risk, shall not bar recovery in an action by any person or his legal representative to recover damages for negligence resulting in death or injury to person or property if such negligence contributing to the injury was not as great as the negligence of the person against whom recovery is sought,

In 1975, the legislature did several notable things.

First , it made minor amendments to the comparative-fault statute, including, as relevant here, changing the word "negligence" to "fault" and recognizing the possibility of multiple defendants. Or. Laws 1975, ch. 599, § 1; see former ORS 18.470 (1975), renumbered as ORS 31.600 (2003). The effect of the change to "fault" is discussed in Sandford v. Chev. Div. Gen. Motors , 292 Or. 590, 642 P.2d 624 (1982). As for multiple defendants, the amendment clarified that the plaintiff's fault was to be compared to "the combined fault of the person or persons against whom recovery is sought[.]" Former ORS 18.470 (1975) (emphases added). Second , the legislature abolished the common-law doctrines of last clear chance and implied assumption of risk. Or. Laws 1975, ch. 599, § 4; see former ORS 18.475 (1975), renumbered as ORS 31.620 (2003). Third , the legislature enacted a new statutory provision to create a mechanism for apportioning fault. Upon the request of any party, the trier of fact must make findings as to both the plaintiff's total damages and "[t]he degree of each party's fault expressed as a percentage of the total fault attributable to all parties represented [518 P.3d 962] in the action," and, in a jury trial, the "jury shall be informed of the legal effect of" those findings.

Or. Laws 1975, ch. 599, § 2; see former ORS 18.480 (1975), renumbered as ORS 31.605 (2003).

[322 Or.App. 210] Fourth , the legislature enacted a "joint and several liability" statute, thus codifying the common-law doctrine of joint and several

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liability. Or. Laws 1975, ch. 599, § 3; see former ORS 18.485 (1975).

plaintiff's fault was to be compared to "the combined fault of all persons specified in

Twenty years passed without substantial changes to the aforementioned laws. Then, in 1995, two things happened. Most significantly, the legislature eliminated joint and several liability, with certain exceptions, for personal injury actions "arising on or after" September 9, 1995:

[322 Or.App. 211]

"(1) Except as otherwise provided in this section, in any civil action arising out of bodily injury, death or property damage, including claims for emotional injury or distress, loss of care, comfort, companionship and society, and loss of consortium, the liability of each defendant for damages awarded to plaintiff shall be several only and shall not be joint ."

Or. Laws 1995, ch. 696, §§ 5, 7; see former ORS 18.485(1) (1995). Subsection (2) addressed how the court should calculate each person's liability, including using "the percentages of fault determined by the trier of fact under ORS 18.480" and setting out "the several liability of each defendant" in the judgment "based on the percentages of fault determined by the trier of fact under ORS 18.480." Former ORS 18.485(2) (1995). Subsections (3), (4), and (5) provided for reallocation of an "uncollectible share" in certain circumstances. Id. §§ (3)-(5). Subsection (6) excepted certain types of civil actions—involving hazardous waste, air pollution, and other specified environmental claims—from the statute altogether. Id. § (6).

The other thing that the legislature did in 1995 was amend the comparative-fault statute. Prior to 1995, the plaintiff's fault was compared to "the combined fault of the person or persons against whom recovery is sought[.]" Former ORS 18.470 (1993), renumbered as ORS 31.600 (2003). In 1995, the legislature expanded and refined the group whose combined fault should be compared to the plaintiff's—and moved that information to a new subsection. After the amendment, the

subsection (2)." Former ORS 18.470(1) (1995), renumbered as ORS 31.600 (2003). Subsection (2), in turn, provided that the plaintiff's fault should be compared "with the fault of any party against whom recovery is sought, the fault of third party defendants who are liable in tort to the claimant, and the fault of any person with whom the claimant has settled"—except for persons who were immune from liability to the claimant, not subject to the jurisdiction of the court, or not subject to action because the claim against them is barred by a statute of limitation or statute of ultimate repose, who are excluded, unless they have settled with the claimant, in which case they are included. Former ORS 18.470(2) (1995).

The legislature made a related amendment to the apportionment mechanism in former ORS 18.480. Instead of requiring a court to provide, upon request, special findings on "[t]he degree of each party's fault expressed as a percentage of the total fault attributable to all parties represented in the action," former ORS 18.480 (1993), renumbered as ORS 31.605 (2003), the amended statute required the court to provide, upon request, special findings on "[t]he degree of fault of each person specified in ORS 18.470(2)," which was to be "expressed as a percentage of the total fault attributable to all persons considered by the trier of fact pursuant to ORS 18.470." Former ORS 18.480 (1995), renumbered as ORS 31.605 (2003).

After the 1995 amendments, the statutes became materially the same as today's statutes, at least as relevant to this appeal. The statutes were reorganized, however, in 2003. The defense of comparative fault is now described in ORS 31.600(1) : "(1) Contributory negligence shall not bar recovery in an action by any person or the legal representative of the person to recover damages for

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death or injury to person or property if the fault attributable to the claimant was not greater than the combined fault of all persons specified in subsection (2) of this section, but any damages [518 P.3d 963] allowed shall be diminished in the proportion to the percentage of fault attributable to the claimant. This section is not intended to create or abolish any defense."

[322 Or.App. 212] The group of persons whose collective fault is to be compared to the plaintiff's fault is now in ORS 31.600(2), which provides: "(2) The trier of fact shall compare the fault of the claimant with the fault of any party against whom recovery is sought, the fault of third party defendants who are liable in tort to the claimant, and the fault of any person with whom the claimant has settled. The failure of a claimant to make a direct claim against a third party defendant does not affect the requirement that the fault of the third party defendant be considered by the trier of fact under this subsection. Except for persons who have settled with the claimant, there shall be no comparison of fault with any person: "(a) Who is immune from liability to the claimant; "(b) Who is not subject to the jurisdiction of the court; or "(c) Who is not subject to action because the claim is barred by a statute of limitation or statute of ultimate repose."

And the mechanism for apportioning fault among the plaintiff and that group of people is now in ORS 31.605, along with the requirement that the court inform the jury of the legal effect of its apportionment findings: "(1) When requested by any party the trier of fact shall answer special questions indicating: "(a) The amount of damages to which a party seeking recovery would be entitled, assuming that party not to be at fault. "(b) The degree of fault of each person specified in ORS 31.600(2).

The degree of each person's fault so determined shall be expressed as a percentage of the total fault attributable to all persons considered by the trier of fact pursuant to ORS 31.600. "(2) A jury shall be informed of the legal effect of its answer to the questions listed in subsection (1) of this section."

As for the several-liability-only statute, it is now ORS 31.610, and it has been updated to reflect the renumbering of cross-referenced statutes, but it remains substantively the same as it was when originally enacted in 1995.

[322 Or.App. 213] B. The Issues on Appeal We return to the specifics of this case. In its first assignment of error, defendant challenges the trial court's ruling that defendant is jointly and severally liable for plaintiffs’ damages, which was based on the court's conclusion that plaintiffs’ action "arose" in the 1960s, when Miller was exposed to defendant's product, rather than in 2018, when Miller developed mesothelioma symptoms. (The several-only-liability statute, ORS 31.610, applies to actions "arising on or

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after" September 9, 1995.) In its second assignment of error, defendant challenges the jury instruction on "recklessness," as relevant to the availability of the defense of comparative fault. In its third assignment of error, defendant argues that, even if the jury instruction on "recklessness" was correct, the court erred by denying defendant's motion for a directed verdict on that issue, because the evidence was legally insufficient to prove that defendant acted "recklessly."

Although not immediately obvious, all three assignments of error are ultimately presented only for their relevance to the issue of joint and several liability. The jury found Miller to be 0% at fault for plaintiffs’ damages, so comparative fault is no longer relevant as an affirmative defense against plaintiffs. The reason that the parties continue to argue about the defense of comparative fault and the "recklessness" instruction is because, in plaintiffs’ view, a defendant who cannot use the comparative-fault defense is also excluded from the scope of the modern several-only liability statute. That is, in plaintiffs’ view, even if this action "arose" in 2018, after the effective date of the several-only liability statute, defendant would still be jointly and severally liable for damages caused by other defendants so long as the "reckless" finding stands.

Because of the particular relationship between the three assignments of error, we begin with the second and third assignments of error.

[518 P.3d 964] C. The Jury Instruction on "Recklessness" As previously described, this case involves negligence and strict product liability claims, and the jury found [322 Or.App. 214] defendant to have been negligent. However, plaintiffs specifically alleged that defendant "engaged in the alleged conduct wantonly and

recklessly"; the jury was instructed on "recklessness"; and the jury found defendant to have been "reckless in its negligence." That begs the question why we are discussing recklessness in connection with a negligence claim. The answer lies in the case law regarding comparative fault and its historic predecessor, contributory negligence.

In the world of torts, there are four categories of "conduct" into which an "infinite" number of factual situations may be placed: (1) simple negligence; (2) gross negligence; (3) an aggravated form of negligence that is often described as "wanton" or "reckless" conduct; and (4) intentional misconduct. Gutierrez-Medina , 365 Or. at 86-87, 442 P.3d 183. Historically, only defendants who committed simple or gross negligence (the first two categories) could use the defense of contributory negligence against a plaintiff who had contributed to his or her own injury. Id. at 87, 442 P.3d 183. Defendants who acted in a "wanton" manner (the third category) could not use the defense of contributory negligence to prevent recovery by a negligent plaintiff. Id. Even if their conduct technically qualifies as "negligent," defendants in the third category are treated differently from defendants who commit simple or gross negligence; they are treated more like intentional tortfeasors. Cook v.

Kinzua Pines Mills Co. et al. , 207 Or. 34, 42-43, 293 P.2d 717 (1956) (describing the third category as an "aggravated form of negligence, approaching intent," which "differs from negligence not only in degree but in kind, and in the social condemnation attached to it"). That said, "wanton" conduct remains distinct from "intentional" conduct. See Gutierrez-Medina , 365 Or. at 92, 442 P.3d 183.

In 1971, the legislature replaced the common-law defense of contributory negligence with the statutory defense of comparative fault. However, the distinction discussed in the last paragraph remains in place. For a defendant to use the defense of comparative fault, the defendant's conduct must be "equivalent to conduct for which the defense of contributory negligence would have been available before 1971." Id. at 85, 442 P.3d

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183. That is, in a negligence action, a defendant who committed simple or gross negligence can use the defense of comparative fault against a negligent plaintiff—to reduce [322 Or.App. 215] the plaintiff's award or even, if the plaintiff was sufficiently negligent, prevent any recovery—but a defendant who acted in a "wanton" manner cannot. "[U]nder the common law, if a defendant's conduct could be characterized as ‘wanton,’ then the plaintiff's contributory negligence was no defense. That is the line that the legislature carried forward when it created the defense of comparative fault: if the defendant's conduct was at least ‘wanton,’ comparative fault is no defense." Id. at 87, 442 P.3d 183.

In this case, plaintiffs alleged that defendant's negligent conduct was "wanton and reckless" and that the comparative-fault statute therefore did not apply. Plaintiffs later "withdrew" the "wanton" allegation. The jury was then instructed on "recklessness"—but with the same definition that plaintiffs had previously proposed for "wanton and reckless." Specifically, the jury was instructed: "Recklessness means an intentional doing or failing to do an act when one knows or has reason to know of facts which would lead a reasonable person to realize that their conduct not only creates unreasonable risk of harm to others but also involves a high degree of probability that substantial harm would result."

So instructed, the jury found that defendant was "reckless in its negligence."

Defendant first contends that giving that instruction was inconsistent with plaintiffs’ "assurances" to the court. We understand the thrust of that argument to be that plaintiffs misled the court and defendant by claiming to withdraw their "wanton" allegation, but then

requesting an instruction that really described "wanton" conduct.

We are unpersuaded. As we will discuss shortly, there is not a settled label for the third category of tortious conduct, and there [518 P.3d 965] is also a history of misuse and inconsistent use of terminology. There is no question that, in hindsight, plaintiffs could have been more precise about their intentions in "withdrawing" the "wanton" allegation. Their written and oral statements on the issue were not entirely clear in that regard. However, from the record as a whole, it is sufficiently apparent that, when plaintiffs "withdrew" the "wanton" allegation, they were not purporting to make [322 Or.App. 216] any change to the substance of their allegation against defendant, only its label. That is particularly evident from the fact that plaintiffs continued to use the same definition of the conduct that they were trying to prove as they always had. Plaintiffs could have been clearer about what they were doing, but, viewed as a whole, what they told the court was consistent with the instruction that they later requested.1 Turning to the instruction itself, defendant next argues that the instruction was legally incorrect.

Defendant argues that the instruction does not describe reckless conduct but, instead, what defendant calls wanton, willful, and intentional conduct.2 In defendant's view, recklessness is best defined as "a deviation from the standard of care that presents a ‘substantial risk’ that a result will occur," rather than a "conscious decision to act in a way that risks harm to another." Defendant points to the Oregon criminal code's definition of "recklessly" as an example. See ORS 161.085(9) (" ‘Recklessly,’ when used with respect to a result or to a circumstance described by a statute defining an offense, means that a person is aware of and consciously disregards a substantial and unjustifiable risk that the result will occur or that

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the circumstance exists. The risk must be of such nature and degree that disregard thereof constitutes a gross deviation from the standard of care that a reasonable person would observe in the situation.").

Plaintiffs respond that "reckless" and "wanton" are synonymous for comparative-fault purposes— both referring to the third category of tortious conduct—and that the instruction given was legally correct. Plaintiffs distinguish [322 Or.App. 217] the fourth category of tortious conduct, "intentional" conduct. They assert that, to prove that a defendant's negligence was "reckless" (or "wanton"), it is unnecessary to prove that the defendant intended to inflict harm or "actually knew" that its conduct would create an unreasonable risk of harm, as is necessary to prove intentional misconduct.

"We review jury instructions for errors of law and will reverse only if we can fairly say that, when considering all of the instructions as a whole, the instruction at issue probably created an erroneous impression of the law in the minds of the jurors that affected the outcome of the case." Lenn v.

Baldwin , 269 Or App 189, 193, 344 P.3d 475 (2015) (internal quotation marks omitted). Here, we agree with plaintiffs that the instruction was substantively correct and would not have created an erroneous impression of the law in the jurors’ minds.

The Supreme Court first outlined the four categories of tortious conduct in Cook , a 1956 case involving a vehicle accident on a logging road, in which the defendant sought to use the defense of contributory negligence against the plaintiff. 207 Or. at 38-39, 293 P.2d 717.

Describing the courts as "constantly confused and frustrated by the over-generous employment of adjectives in describing wrongful conduct," id. at 58, 293 P.2d 717, the court felt "compelled" to identify "four types of conduct into which the infinite variety of fact situations must fall:

[518 P.3d 966] "(1) Simple negligence, subject to the defense of contributory negligence, (2) gross negligence which we have repeatedly held may be subject to the defense of contributory negligence, (3) injury to the person of another committed in a ‘wanton’ manner, meaning the doing of an intentional act of an unreasonable character in disregard of a risk known to the actor, or so obvious that he must be taken to have been aware of it and so great as to make it highly probable that harm would follow, usually accompanied by a conscious indifference to consequences. In the third category contributory negligence is no defense and for conduct of that kind a trespasser may recover. (4) Assault and battery where there is an actual intent not only to do an act but to cause personal injury."

Id. at 58-59, 293 P.2d 717 (emphasis added; internal citation omitted).

[322 Or.App. 218] That same year, in Falls v. Mortensen , 207 Or. 130, 132, 295 P.2d 182 (1956), overruled in part on other grounds by Lindner v. Ahlgren , 257 Or. 127, 477 P.2d 219 (1970), the defendant was driving under the influence of alcohol when he struck the plaintiff, a pedestrian, who was crossing the street at night in a place other than an intersection. At trial, the jury was instructed that "contributory negligence is no defense to an action based upon a defendant's wanton disregard of the rights of others." Id. at 134, 295 P.2d 182.

The jury was then given an instruction on the meaning of "wanton"—an instruction substantively identical to the "recklessness" instruction given in the present case:

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"Wanton misconduct is an intentional doing or failing to do of an act when one knows or has reason to know of facts which would lead a reasonable man to realize that the actor's conduct not only creates unreasonable risk of harm to others but also involves a high degree of probability that substantial harm will result to him."

Id. at 135, 295 P.2d 182 (ellipses omitted).

On appeal, in addressing the defendant's challenge to that instruction, the Supreme Court recognized the importance of being clear about the four categories of tortious conduct. Id. at 14142, 295 P.2d 182 ("The great obstacle to the development of a satisfactory system of tort law in this field arises from the fact that the courts have ascribed different meanings to the same words, with the result that it is difficult to draw the line between the various types of conduct as to which the law applies different legal consequences.").

The court also recognized that "[t]he most difficult distinction, but one which frequently must be made, is that between gross negligence and wanton misconduct." Id. at 144, 295 P.2d 182. "In truth the distinction must be clearly explained to the jury because we have held that contributory negligence is a defense in an action for gross negligence but is not a defense in an action for wanton misconduct." Id. at 146, 295 P.2d 182.

After reviewing the Restatement, a leading treatise, and extensive out-of-court case law, the court concluded that the challenged instruction accurately described the third category of tortious conduct: [322 Or.App. 219] "The definition of wanton misconduct, as given by the trial judge in the pending case, is supported by a great weight of authority. It makes clear the difference between such conduct

and gross negligence. It also clarifies the difference between wanton misconduct and assault and battery.

Both are the result of intentional action, but only the latter involves specific intent to injure the plaintiff."

Id. at 147, 295 P.2d 182. In explaining its reasoning, the court itself tended to use the term "wanton" to refer to the third category of tortious conduct. See id. at 136-47, 295 P.2d 182.

However, the court's discussion makes clear that "wanton" and "reckless" are alternative terms for the third category. See id. By contrast, the term "willful" should not be used for any of the categories, as it has been used so variously over time that "the word does not connote a definite quality of conduct." Id. at 144, 295 P.2d 182.3 [518 P.3d 967] Rolling forward 70 years, the Supreme Court recently addressed the nature of "wanton" conduct, as relevant to the civil defense of comparative fault, in Gutierrez-Medina . The underlying events in that case were similar to those in Falls : The defendant was driving under the influence of intoxicants when he struck a pedestrian, who was crossing the street at night in a place other than a pedestrian crossing.

Gutierrez-Medina , 365 Or. at 81, 442 P.3d 183.

The procedural posture of Gutierrez-Medina was quite different, however, in that GutierrezMedina was a criminal appeal. The defendant was convicted of driving under the influence of intoxicants and third-degree assault and ordered to pay almost $155,000 in restitution to the crime victim. Id. The defendant argued on appeal that the sentencing court should have applied the civillaw defense of comparative fault—given the relationship between criminal restitution and civil economic damages—and that "the victim's own negligence was the primary cause of the collision."

Id. at 81 & n. 1, 83, 442 P.3d 183.

[322 Or.App. 220]

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On review, the court assumed arguendo that the defense of comparative fault could be considered in awarding restitution. Id. at 84, 442 P.3d 183.

However, it concluded that the defense would be unavailable to this defendant in a civil action for the same injury, because his third-degree assault conviction "establishes a degree of culpability for which the defense of comparative fault would be unavailable in a civil action." Id. at 81, 442 P.3d 183. Given how third-degree assault is defined, by pleading guilty to that crime, the defendant necessarily admitted "that he was aware that he was using a deadly or dangerous weapon in a way that created a substantial risk of serious physical injury and that he consciously disregarded that risk." Id. at 82, 442 P.3d 183. That admission "would require a hypothetical civil jury to conclude that defendant's culpability fell with the range of ‘wanton’ conduct." Id. at 84, 442 P.3d 183. Consequently, the defense of comparative fault would not be available. Id. at 87, 442 P.3d 183. In so concluding, the court rejected the defendant's argument that his conduct came within the category of "gross negligence," so as to allow the defense. Id. at 87-88, 442 P.3d 183.

In conducting its analysis in Gutierrez-Medina , the court relied on prior case law regarding the third category of tortious conduct, particularly Falls , which it described as a case in which the court "undertook to clarify the range of culpable conduct that will be considered ‘wanton.’ " Id. at 89-90, 442 P.3d 183. The court then essentially reaffirmed its holding in Falls that the "wanton misconduct" instruction that was given in Falls was legally correct. Id. at 90, 442 P.3d 183. The court also spoke approvingly of "reckless" as an alternative term for "wanton," id. at 91, 442 P.3d 183, while emphasizing that the word "wanton," as used for comparative-fault purposes, "describe[s] not only a person who acted with actual knowledge and disregard of the risk but also one who acted without such knowledge if a reasonable person would have realized the risk," id. at 92, 442 P.3d 183.

With that case law in mind, we consider defendant's challenge to the jury instruction in this case, and we readily conclude that the

instruction correctly described the third category of tortious conduct.

It is of no consequence that the instruction was framed as defining "recklessness"—or at least no one made [322 Or.App. 221] any arguments to the trial court that would have required it to consider using "wanton" or another term to label the category of conduct that it was defining for the jury. There are potential downsides to both terms, as far as the word itself suggesting too much or too little. See, e.g., Falls , 207 Or. at 143, 295 P.2d 182 (recognizing confusion regarding the meaning of "wanton," due to "a failure on the part of litigants and some courts to distinguish between intent to act wantonly on the one hand, and intent to injure the particular plaintiff, on the other"); Cook , 207 Or. at 41-42, 293 P.2d 717 ("The word ‘reckless’ appears in conjunction with the word ‘negligent’ in most of the complaints coming to this court which are intended to charge and which have been held to charge simple negligence."). That is precisely why it is so important to instruct the jury accurately on the meaning of whatever term is used.

[518 P.3d 968] As for the accuracy of the instruction that was given, the Supreme Court has already approved a substantively identical instruction as an accurate definition of "wanton" or "reckless" conduct, i.e. , the third category of tortious conduct. The instruction was approved in Falls and reaffirmed in Gutierrez-Medina . Defendant's argument that we should adopt a different definition of "reckless," adapted from the criminal statutes, conflicts with that case law. The same is true of defendant's argument that "recklessness" is not an "element" of negligence and cannot be shoehorned into a negligence action. It is beyond dispute at this point that a plaintiff may assert that a defendant was negligent, while also asserting that the defendant acted recklessly, in the hopes of not only prevailing on the negligence

Miller v. Agripac, Inc., 322 Or.App. 202, 518 P.3d 957 (Or. App. 2022)

claim but also cutting off the defense of comparative fault. Lastly, defendant's contention that the "recklessness" instruction given in this case actually described "intentional" misconduct is not well-taken, given existing case law.

Although the historical case law contains inconsistencies, the Supreme Court recently reaffirmed that "wanton" (or "reckless") conduct is an aggravated form of negligence that differs from "intentional" misconduct. "Intentional" misconduct involves not only a conscious intent to act but also a conscious intent to cause harm.

Gutierrez-Medina , 365 Or. at 87, 442 P.3d 183.

As instructed, to find defendant reckless, the jury in this case had to find that defendant intended to act, but it did not have to find

which the jury could have found the facts necessary to support plaintiffs’ claim." Hoff , 316 Or App at 132, 503 P.3d 457 ; Or. Const., Art. VII (Amended), § 3.

[322 Or.App. 222]

Defendant argues that the evidence was legally insufficient for a reasonable juror to find that, between October 1966 and April 1969, when Miller was exposed to defendant's joint compound, defendant knew or had reason to know that the use of its product would expose drywall installers and others working nearby to airborne asbestos at levels sufficient to make it highly probable that substantial harm would result. Plaintiffs disagree, contending that the evidence was sufficient for a reasonable jury to find that defendant's conduct was "reckless" as defined in the jury instruction.

that defendant actually intended to harm plaintiffs. That is an instruction on "wanton" or "reckless" conduct (the third category), not "intentional" misconduct (the fourth category).

We do not believe that it would be particularly helpful to the bench or bar to recount the specific evidence in this case. We have carefully reviewed that evidence, and we

In sum, the trial court's "recklessness" instruction correctly stated the legal standard for the third category of tortious conduct. It was not erroneous to give that instruction. We therefore reject defendant's second assignment of error.

[322 Or.App. 223]

D. The Denial of a Directed Verdict on "Recklessness" In its third assignment of error, defendant challenges the trial court's denial of defendant's motion for directed verdict as to the "recklessness" allegation. "We review the denial of a motion for directed verdict for any evidence to support the verdict in favor of the nonmoving party." Hoff v. Certainteed Corp. , 316 Or App 129, 132, 503 P.3d 457 (2021), rev. den. , 369 Or. 785, 511 P.3d 400 (2022) (internal quotation marks omitted). In doing so, we view the evidence, including all reasonable inferences therein, in the light most favorable to the nonmoving party. Lyons v. Beeman , 311 Or App 560, 564, 494 P.3d 358, rev. den. , 368 Or. 513, 493 P.3d 507 (2021). We will not disturb the jury's verdict "[u]nless there is no evidence from

agree with plaintiffs that it was sufficient to go to the jury. In particular, we agree that there was sufficient evidence to allow a jury to find that, in the relevant time period, defendant acted or failed to act when, to quote the jury instruction, defendant had "reason to know of facts which would lead a reasonable person to realize that their conduct not only creates unreasonable risk of harm to others but also involves a high degree of probability that substantial harm would result."

In other words, viewing the evidence in the light most favorable to plaintiffs, we cannot say that there was no evidence to support a finding that defendant acted "recklessly" as that term was defined.

[518 P.3d 969] We therefore reject defendant's third assignment of error.

Together, our rejection of the second and third assignments of error means that the jury's finding

Miller v. Agripac, Inc., 322 Or.App. 202, 518 P.3d 957 (Or. App. 2022)

that defendant was "reckless in its negligence" will stand. It follows, under well-established case law, that the defense of comparative fault is unavailable to defendant.

E. Joint and Several Liability Our resolution of the second and third assignments of errors issues brings us back to defendant's first assignment of error, in which defendant challenges the trial court's ruling that it is jointly and severally liable for plaintiffs’ damages. Plaintiffs maintain that, given our disposition of the second and third assignments of error, we "need not reach" the first assignment of error.

As we understand it, plaintiffs’ position is that there are two legal consequences to a defendant being found to have committed negligence in a "reckless" manner: (1) the defendant cannot use the defense of comparative fault against the plaintiff, as a matter of well-established case law before and after 1971, and (2) the several-onlyliability statute enacted in 1995 does not apply, as a matter of statutory construction, and the defendant therefore remains subject to commonlaw joint and several liability. Defendant did not respond on this issue in its briefing and, at oral argument, took a somewhat equivocal position.

As a preliminary matter, we note that, if plaintiffs are correct about the relationship between the availability [322 Or.App. 224] of the comparative-fault defense and the applicability of the several-only-liability statute, we would still "reach" the first assignment of error. However, we would not need to resolve what the legislature meant by actions "arising on or after" September 9, 1995—see Or. Laws 1995, ch. 696, §§ 5, 7—because any error that the trial court made in applying joint and several liability based on the action having "arisen" in the 1960s would be harmless. See ORS 19.415(2) ("No judgment shall be reversed or modified except for error substantially affecting the rights of a

party."). That is, even if the trial court was wrong, and the action "arose" in 2018, it would have no effect on defendant's liability, because the jury's "recklessness" finding would independently take defendant outside the scope of the several-onlyliability statute, such that defendant would still be subject to common-law joint and several liability.

Turning to the substance of plaintiffs’ harmlessness argument, we conclude that plaintiffs’ argument is supported by Shin v.

Sunriver Preparatory School, Inc. , 199 Or App 352, 111 P.3d 762, rev. den. , 339 Or. 406, 122 P.3d 64 (2005). In that case, we held that an allegedly negligent tortfeasor (a private school) was not entitled to apportionment findings under ORS 31.605, where the negligent tortfeasor sought to avoid liability for the wrongdoing of an intentional tortfeasor (the plaintiff's father) who raped the plaintiff (a student). Id. at 354, 111 P.3d 762. The upshot of Shin is that the group of people identified in ORS 31.605 —the group whose collective negligence is to be compared to the plaintiff's negligence for purposes of the defense of comparative fault—does not include people who behaved wantonly or intentionally.

See id. at 376, 111 P.3d 762. Because those people are simply not in the comparison group, they not only cannot rely on the defense of comparative fault themselves, but no one can look to them for apportionment under ORS 31.605.4 See id.

[322 Or.App. 225] We note that Shin itself involved intentional misconduct by the third-party defendant (the plaintiff's father) whose liability the defendant wanted apportioned, and Shin mostly discusses intentional misconduct. However, Shin uses the phrase "willful or intentional conduct" in a way that could be intended to refer to wanton or intentional [518 P.3d 970] conduct. See id. ("Before the adoption of comparative fault, contributory negligence was not a defense to willful or intentional misconduct."). In any event, the logic of Shin

Miller v. Agripac, Inc., 322 Or.App. 202, 518 P.3d 957 (Or. App. 2022)

necessarily applies to both the third and fourth categories of tortious conduct. There is no basis to distinguish between the third and fourth categories of conduct for comparative-fault purposes, and Shin ’s reasoning is grounded almost entirely in the comparative-fault statute, ORS 31.600.

Shin also addresses the several-only-liability statute, however, briefly but decisively. See Shin , 199 Or App at 378-79, 111 P.3d 762. Shin concludes that the reference in ORS 31.610 (the several-only-liability statute) to ORS 31.605 (the apportionment mechanism) has the effect of limiting the scope of ORS 31.610 to the same people who can use the defense of comparative fault against a negligent plaintiff, i.e. , the group of people identified in ORS 31.605 whose collective negligence is compared to the plaintiff's for purposes of the defense of comparative fault.

See id. Anyone not included in that group is not covered by the several-only-liability statute. See id. The implication is that common-law joint and several liability continues to apply to those excluded tortfeasors, eliminating any benefit to their requesting apportionment findings under ORS 31.605. See id.

Shin appears to be the only published case making a connection between the availability of the comparative-fault defense, ORS 31.600, and the applicability of the several-only-liability statute, ORS 31.610, and its discussion is extremely brief. However, defendant has not developed any argument to distinguish Shin , nor has it identified any error in Shin ’s reasoning.

Under Shin , plaintiffs are correct that, regardless of when plaintiffs’ action "arose," defendant is jointly and severally liable for all of plaintiffs’ damages, based on the jury's "reckless" finding.

That being the case, any error that the trial court made in concluding that joint and several liability applies based on when the action "arose" [322 Or.App. 226] was harmless. Joint and several liability would apply anyway, based on Shin ’s construction of

ORS 31.610. We therefore reject the third assignment without further discussion.

Affirmed.

-------Notes: 1 Relatedly, in their opposition to directed verdict,

when discussing an insurance policy that contained the phrase "willful and wanton," plaintiffs stated that "reckless" conduct is obviously different from "willful and wanton" conduct. Defendant views that statement as plaintiffs expressly taking the position that "reckless" and "wanton" are different. However, it was the insurer that bundled together the terms "willful and wanton," and we disagree that distinguishing "reckless" from "willful and wanton" equates to distinguishing "reckless" from "wanton."

2 It is not immediately apparent how defendant

could have been harmed by an instruction that, in defendant's view, required the jury to find too high a degree of culpability before defendant would be foreclosed from using the defense of comparative fault. We need not consider that issue, however, given our disposition.

We acknowledge that, notwithstanding the admonition in Falls , both we and the Supreme Court have occasionally continued to use "willful" to mean "wanton." See, e.g. , Taylor v. Lawrence , 229 Or. 259, 264, 366 P.2d 735 (1961) (describing "reckless disregard of safety" as "an equivalent for wilful or wanton misconduct"); Hampton Tree Farms , 158 Or App at 393-95, 974 P.2d 738 (repeatedly using "wilful" to mean "wanton").

3

There are practical ramifications to excluding "wanton" defendants from the comparison group in a negligence action. If the plaintiff was negligent, the comparison group being smaller could result in the plaintiff having a higher percentage of fault relative to the smaller group.

Also, the trier of fact (whether jury or judge) will have to account for its culpability findings in making apportionment findings, as accidentally 4

Miller v. Agripac, Inc., 322 Or.App. 202, 518 P.3d 957 (Or. App. 2022)

including a wanton defendant in the comparison group would result in the percentages of the "real" comparison group not adding up to 100% as required by ORS 31.605.

--------

Miller v. AgriPac, Inc., 370 Or. 827 (Or. 2023)

1 370 Or. 827 Miller v.

Agripac, Inc. S069944 Supreme Court of Oregon March 30, 2023 (A174355) (322 Or.App. 202) PETITION FOR REVIEW DENIED

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State v. Gutierrez-Medina, 365 Or 79, 442 P.3d 183 (Or. 2019)

365 Or. 79 442 P.3d 183 STATE of Oregon, Respondent on Review, v.

Jorge GUTIERREZ-MEDINA, Petitioner on Review.

SC S065297 Supreme Court of Oregon.

Argued and submitted September 10, 2018.

June 6, 2019 Joshua B. Crowther, Deputy Public Defender, Office of Public Defense Services, Salem, argued the cause and filed the briefs for the petitioner on review. Also on the briefs was Ernest G. Lannet, Chief Deputy Defender.

Cecil A. Reniche-Smith, Assistant Attorney General, Salem, argued the cause and filed the brief for the respondent on review. Also on the brief were Ellen Rosenblum, Attorney General, and Benjamin Gutman, Solicitor General.

Rosalind M. Lee, Rosalind Manson Lee LLC, Eugene, filed the brief for amicus curiae Oregon Criminal Defense Lawyers Association.

Erin K. Olson, Law Office of Erin Olson PC, Portland, filed the brief for amici curiae National Crime Victim Law Institute and Oregon Crime Victims Law Center. Also on the brief were Margaret Garvin, National Crime Victim Law Institute, Portland, and Amy C. Liu. Nadia H. Dahab, Stoll Berne PC, Portland, filed the brief for amicus curiae Oregon Trial Lawyers Association. Also on the brief was Travis Eiva.

Before Walters, Chief Justice, and Balmer, Nakamoto, Flynn, Duncan, Nelson and Garrett, Justices.** FLYNN, J. [442 P.3d 184]

[365 Or. 81] The legislature has directed that a person who is convicted of a crime that resulted in "economic damages" to a victim must pay the victim restitution in "the full amount of the victim’s economic damages as determined by the court."

ORS 137.106(1)(a). In this case, defendant was convicted of driving under the influence of intoxicants and assault in the third degree after striking a pedestrian with his car, and the trial court ordered him to pay almost $ 155,000 in restitution for the victim’s medical expenses. We allowed review to consider whether the trial court erred in refusing to apply the civil law defense of comparative fault to reduce the amount of economic damages that defendant would be required to pay as restitution. We conclude that defendant’s conviction for third-degree assault establishes a degree of culpability for which the defense of comparative fault would be unavailable in a civil action. Thus, at least under the circumstances of this case, the trial court correctly refused to reduce the amount of restitution by the victim’s alleged comparative fault.

I. BACKGROUND Defendant was driving under the influence of intoxicants late at night when he struck the victim, who had walked onto the road in a dark area that was not marked for pedestrian crossing.

He pleaded guilty to one count of driving under the influence of intoxicants and one count of assault in the third degree, but he resisted the state’s request for restitution in the amount of the victim’s full medical bills. Defendant offered evidence that the victim’s own negligence was the primary cause of the collision and urged the trial court to apply the civil doctrine of comparative fault to reduce the requested restitution.1 The trial court refused to consider the victim’s alleged negligence and ordered defendant to pay the requested restitution.

[365 Or. 82] The Court of Appeals affirmed the judgment of the circuit court, holding that the text of the

State v. Gutierrez-Medina, 365 Or 79, 442 P.3d 183 (Or. 2019)

restitution statute expressly precludes the court from applying comparative fault principles to apportion damages. State v. Gutierrez-Medina , 287 Or. App. 240, 246, 403 P.3d 462 (2017). This court allowed review, and we now affirm the decision of the Court of Appeals, albeit on a different ground. We conclude that defendant’s conviction for third-degree assault establishes that he was aware that he was using a deadly or dangerous weapon in a way that created a substantial risk of serious physical injury and that he consciously disregarded that risk. Therefore, defendant’s conviction for third-degree assault establishes that he acted with a culpable mental state for which the doctrine of comparative fault would not be available in a civil action. Because we hold that the defense of comparative fault would be unavailable to defendant in a hypothetical civil action for the same injury, we decline to address the Court of Appeals’ conclusion that ORS 137.106 precludes trial courts from reducing the amount of restitution when the victim is partly at fault for the injury.

II. DISCUSSION The circuit court ordered defendant to pay restitution under ORS 137.106(1), which provides: [442 P.3d 185] "When a person is convicted of a crime * * * that has resulted in economic damages, the district attorney shall investigate and present to the court * * * evidence of the nature and amount of the damages. * * * If the court finds from the evidence presented that a victim suffered economic damages, in addition to any other sanction it may impose, the court shall enter a judgment or supplemental judgment requiring that the defendant pay the victim restitution in a specific amount that equals the full amount of the victim’s economic damages as determined by the court."

Defendant does not dispute that he was convicted of a crime that resulted in economic damages. He also does not dispute that the evidence supports the trial court’s finding that the victim incurred economic damages, in the form of medical expenses, in the amount that the court ordered as restitution. Defendant contends, however, that he was entitled to reduce his restitution obligation by proving that the victim [365 Or. 83] was also at fault for the injury that required the medical care.

Defendant argues that the legislature intended to incorporate the civil law defense of "comparative fault" into the determination of "economic damages" that a criminal defendant must pay as restitution. Defendant relies on several cases in which this court stated that civil law concepts perform a significant role in a trial court’s determination of "economic damages" for purposes of imposing restitution. In particular, defendant points to State v. Ramos , 358 Or. 581, 368 P.3d 446 (2016), in which this court explained "that the legislature’s cross-reference to the definition of ‘economic damages’ applicable in civil actions, and the legislature’s purpose in creating the restitution procedure as a substitute for a civil proceeding, make civil law concepts relevant to our interpretation of ORS 137.106." Id. at 594, 368 P.3d 446. We concluded in Ramos that the amount of "economic damages" for purposes of imposing restitution is limited by the civil law concept that a defendant is liable only for damages that are "reasonably foreseeable." Id. at 596, 368 P.3d 446. In State v. Islam , 359 Or. 796, 800, 377 P.3d 533 (2016), this court again looked to limitations on the damages that a plaintiff can recover in a civil action to determine that the amount of restitution that the defendant would be required to pay to the local retailer from whom the defendant stole a pair of jeans must be measured by the wholesale value, not the retail value, of the jeans. Defendant argues that the statutory defense of comparative fault, ORS 31.600(1), is another limitation on the amount of economic damages that the legislature intended

State v. Gutierrez-Medina, 365 Or 79, 442 P.3d 183 (Or. 2019)

to incorporate into the concept of "economic damages" that a criminal defendant must pay as restitution. From that premise, defendant concludes that the trial court erred in refusing to consider his evidence of the victim’s fault.

There is another step in the analysis, however. To reach defendant’s desired conclusion, his argument requires us to accept his minor premise that, in a hypothetical civil action against him for causing the same injury, the defense of comparative fault would be available to reduce his liability. The premise is not sound. As we shall explain, the statutory defense of civil comparative fault is available only to defendants who act with a degree of culpability for [365 Or. 84] which the common law defense of contributory negligence would have been available. The common law defense based on a plaintiff’s contributory negligence was not available to a defendant who acted with a culpability greater than what the common law considered to be "gross negligence"—conduct that was either "wanton" or intentional. And, in pleading guilty to third-degree assault, defendant necessarily admitted to elements that would require a hypothetical civil jury to conclude that defendant’s culpability fell within the range of "wanton" conduct. Thus, even if we assume that the legislature intended to incorporate the civil law defense of comparative fault into the calculation of criminal restitution under ORS 137.106, the defense would be unavailable to a defendant who commits third-degree assault in the manner that defendant did.

A. Comparative fault applies only to fault of the type to which contributory negligence would have been a defense.

Before 1971, Oregon recognized the common law defense of contributory negligence, [442 P.3d 186]

under which some plaintiffs whose own negligence contributed to their injuries to any extent were barred from recovering damages. The 1971 legislature abandoned contributory negligence and adopted instead a statutory defense that is now called "comparative fault," under which some plaintiffs whose claims previously would have been defeated by contributory negligence could now recover a proportionate share of their damages. Towe v.

Sacagawea, Inc. , 357 Or. 74, 107, 347 P.3d 766 (2015) (citing Or. Laws 1971, ch. 668, § 1); former ORS 18.470 (1971). As originally enacted, former ORS 18.470 (1971) provided that contributory negligence would not bar recovery if the negligence of the person seeking recovery was not as great as the negligence of the person against whom recovery was sought, but that any damages allowable would be diminished in proportion to the amount of negligence of the person recovering.

In 1975, the legislature amended the statute to, among other things, substitute the word "fault" for the word "negligence." Former ORS 18.470 (1975) ; Or. Laws 1975, ch. 599, § 11. Although the title of the statute continued to use the phrase "comparative negligence," and still does today, the concept then became known as comparative fault.

[365 Or. 85] The version of that statute that is in effect today, now codified at ORS 31.600(1), is identical in all material respects to the 1975 amended statute.

ORS 31.600(1) provides: "Contributory negligence shall not bar recovery in an action * * * to recover damages for death or injury to person or property if the fault attributable to the claimant was not greater than the combined fault of all persons specified in subsection (2) of this section [specifying categories of people whose fault may or may not be compared to that of the claimant], but any damages

State v. Gutierrez-Medina, 365 Or 79, 442 P.3d 183 (Or. 2019)

allowed shall be diminished in the proportion to the percentage of fault attributable to the claimant. This section is not intended to create or abolish any defense."

This court has explained that the 1975 amendment was intended to cover "actions based on tortious conduct, however described, in which contributory negligence is an appropriate defense." Johnson v. Tilden , 278 Or. 11, 17, 562 P.2d 1188 (1977). In reaching that conclusion, we emphasized the statement of Representative Dave Frohnmayer, that, under the 1975 changes, "[a]pportionment of damages is expressly extended to all actions to recover damages for injury to persons or property in which contributory negligence may properly be asserted as a defense." Id. at 17, 562 P.2d 1188 (quoting Minutes, House Judiciary Committee, May 28, 1975, Appendix G (written statement by Representative Dave Frohnmayer)).

That legislative intention is reflected in the text of the statute, which specifies that the legislature did not intend to create any defense that did not otherwise exist. Thus, the rule of comparative fault would reduce defendant’s responsibility for the victim’s full damages, even in a hypothetical civil action, only if defendant’s conduct is equivalent to conduct for which the defense of contributory negligence would have been available before 1971.

B. Comparative fault does not apply in a civil action for conduct involving a mental state more culpable than "gross negligence."

As defendant recognizes, the defense of contributory negligence was not available to all civil defendants. If the defendant acted intentionally or in a manner that was "wanton," then contributory negligence by the plaintiff did [365 Or. 86] not bar recovery, as this court explained in Cook v. Kinzua Pine Mills Co. et al. , 207 Or. 34, 293 P.2d 717 (1956). The plaintiff in Cook was driving on a private logging road when she encountered a

logging truck that was owned by the defendant and driven by one of its employees (also a defendant). The plaintiff pulled off to the side of the road to permit the truck to pass, but the truck collided with her car, severely injuring her. In a tort action against the defendants, the plaintiff alleged two theories of liability. In a first count, the plaintiff alleged that the driver of the truck "carelessly, recklessly, and negligently" drove the truck into her car. In a second count, she alleged that the driver struck her car "with knowledge of" her presence, "recklessly and in a wanton manner, and with an utter disregard" for her safety. In their answer to the complaint, the defendants [442 P.3d 187] alleged that the plaintiff was contributorily negligent in failing to keep a proper lookout and in failing to keep her automobile under control.

After the plaintiff prevailed at trial, the defendants appealed, raising issues that required this court to clarify the claims for which the defense of contributory negligence was and was not available to the defendants. This court construed the first count of the complaint to allege that the defendants’ conduct was negligent and explained, "if plaintiff proved only simple negligence on the part of the defendants she could not recover if defendant proved that she was herself guilty of negligence contributing to the accident." Id. at 42, 293 P.2d 717. On the other hand, the court construed the second count to allege that the defendants’ conduct was wanton and held, "if the plaintiff established her claim of wanton misconduct on the part of the defendants, as alleged in count two of the complaint, the defense of contributory negligence would not be available to defendants." Id .

In discussing the circumstances in which contributory negligence operated as a defense, this court in Cook defined four categories of conduct "into which the infinite variety of fact situations must fall": "(1) [s]imple negligence"; "(2) gross negligence"; "(3) injury to the person of another committed in a ‘wanton’ manner, meaning the doing of an intentional act of an

State v. Gutierrez-Medina, 365 Or 79, 442 P.3d 183 (Or. 2019)

unreasonable character in disregard of a risk known to the actor, or so obvious that he must be taken [365 Or. 87] to have been aware of it and so great as to make it highly probable that harm would follow, usually accompanied by a conscious indifference to consequences"; and "(4) [a]ssault and battery where there is an actual intent not only to do an act but to cause personal injury." Id . at 58-59, 293 P.2d 717. The court emphasized that claims alleging the first two categories of fault could be defeated by the defense of contributory negligence, but that "contributory negligence is no defense" for a defendant who acts either in a "wanton" manner or with an "intent" to cause injury. Id. The court quoted from a leading torts treatise to explain why "nearly all courts have held that ordinary negligence on the part of the plaintiff will not bar recovery" when the defendant’s conduct is "that aggravated form of negligence, approaching intent, which has been characterized variously as ‘wilful,’ ‘wanton,’ or ‘reckless[.]’ " Id . at 42-43, 293 P.2d 717 (quoting William L. Prosser, Law of Torts § 51, 289-90 (2d ed. 1955)).

As Prosser explained, "[s]uch conduct differs from negligence not only in degree but in kind, and in the social condemnation attached to it." Id . Thus, under the common law, if a defendant’s conduct could be characterized as "wanton," then the plaintiff’s contributory negligence was no defense. That is the line that the legislature carried forward when it created the defense of comparative fault: if the defendant’s conduct was at least "wanton," comparative fault is no defense.

translated to a hypothetical civil action, would align with categories of culpability for which the defense of comparative fault is available. But he contends that the evidence in this case meets that test. Defendant argues that his culpability under the circumstances of this case is comparable to common law "gross negligence," because he drove with a blood-alcohol content of .11 percent, he stopped after the crash, and he showed remorse.

He [365 Or. 88] adds that there was no evidence that he was "staggeringly drunk" or visibly intoxicated. Thus, he argues, the defense of comparative fault would have been available to him in a hypothetical civil claim for the same conduct.

Defendant’s argument, however, overlooks the weight that we must give to his conviction. The question is not whether the facts that defendant identifies could support a finding of "gross negligence" in a hypothetical civil action; the relevant comparison must be based on the culpable mental state that is established by defendant’s conviction for third-degree assault.

As part of his plea of [442 P.3d 188] guilty to assault in the third degree, ORS 163.165(1)(a), defendant admitted that he "recklessly caused serious physical injury to [the victim] by means of a motor vehicle, a dangerous weapon, which [he] drove on a public road under the influence of intoxicants."

C. A conviction for third-degree assault establishes that the defendant acted with a mental state that is more culpable than the civil standard of "gross negligence."

That admission establishes a degree of culpability that, in a hypothetical civil action, would fall within the category of "wanton misconduct," for which the injured person’s negligence provides no defense.

Defendant recognizes that his argument for applying comparative fault to reduce the amount of his criminal restitution requires this court to conclude that defendant’s criminal culpability, if

The task of understanding where particular conduct falls in relation to the line between "gross negligence" and "wanton" misconduct is one with

State v. Gutierrez-Medina, 365 Or 79, 442 P.3d 183 (Or. 2019)

which this court has repeatedly struggled. As we have previously acknowledged, "definitions of gross negligence, as approved by this court, disclose a wide variety, and in a few cases, direct inconsistency." Falls v. Mortensen , 207 Or. 130, 144, 295 P.2d 182 (1956), overruled in part on other grounds by Lindner v. Ahlgren , 257 Or. 127, 477 P.2d 219 (1970). Those seeming inconsistencies arise in part because, in certain statutory contexts, this court has construed the term "gross negligence" as meaning conduct that is actually comparable to the common law classification for "wanton" conduct.

For example, many of this court’s older cases discuss the term "gross negligence" in the context of Oregon’s "guest passenger" statutory immunity, ORS 30.115. That statute was amended in 1979 to remove immunity from motor vehicle liability, but the amendment did not change the statute in any other respect. Or. Laws 1979, ch.

866, § 7. ORS 30.115 [365 Or. 89] grants owners and operators of aircraft and watercraft, and formerly granted owners and operators of motor vehicles, a broad immunity from liability for injuries to guest passengers, unless the conduct was intentional or the owner or operator was intoxicated or acted with a degree of culpability that the statute describes as "gross negligence." Id. Because of the specific way that ORS 30.115 defines "gross negligence,"2 many of this court’s guest-passenger cases required the plaintiff to prove culpability equivalent to the common law concept of "wanton misconduct" to defeat the statutory immunity. Zumwalt v.

Lindland , 239 Or. 26, 37-38, 396 P.2d 205 (1964) (explaining that under this court’s construction of the statute, "any conduct reckless enough to render a defendant liable under ORS 30.115 is also wanton misconduct").

Outside of that statutory context, however, this court continued to define common law "gross negligence" as involving a lesser degree of culpability than "wanton misconduct" and continued to hold that, if a defendant acted with a

degree of culpability that was at least "wanton," then the defendant could not assert the plaintiff’s negligence as a defense. Zumwalt , 239 Or. at 32, 396 P.2d 205.3 Thus, in attempting to determine whether particular conduct rises to a degree of culpability for which the common law defense of contributory negligence would not have been available, the relevant guidance comes from this court’s cases discussing the distinction between the common-law concept of "gross negligence" and the common law concept of "wanton" conduct for purposes of contributory negligence.

One of those cases is Falls , in which we highlighted this court’s inconsistency with regard to the term "gross negligence" and undertook to clarify the range of culpable [365 Or. 90] conduct that will be considered "wanton." The plaintiff in Falls was crossing the street at a point other than an intersection when he was struck by the defendant, who was intoxicated and driving on the wrong side of the road. 207 Or. at 132, 295 P.2d 182. The plaintiff alleged that the defendant acted [442 P.3d 189] "with wanton disregard for the rights and safety of others," and the defendant alleged that the plaintiff was contributorily negligent. Id . at 13234, 295 P.2d 182. On appeal from a judgment for the plaintiff, the defendant challenged the trial court’s instruction to the jury that "contributory negligence is no defense to an action based upon a defendant’s wanton disregard of the rights of others," a statement that this court described as "undoubtedly correct." Id. at 134, 295 P.2d 182.

This court also concluded that the trial court correctly instructed the jury that "wanton misconduct," for which contributory negligence is no defense, means: "an intentional doing or failing to do of an act when one knows or has reason to know of facts which would

State v. Gutierrez-Medina, 365 Or 79, 442 P.3d 183 (Or. 2019)

lead a reasonable man to realize that the actor’s conduct not only creates unreasonable risk of harm to others but also involves a high degree of probability that substantial harm will result to him."

Id. at 135, 295 P.2d 182. After an extensive examination of the authorities that define the "wanton misconduct" for which contributory negligence was no defense, this court concluded that the trial court’s definition was "supported by a great weight of authority." Id. at 147, 295 P.2d 182. This court emphasized that the quoted definition was similar to that used by Prosser to define "wantonness," for which contributory negligence was no defense: " ‘Wantonness,’ or ‘recklessness’ * * * means that the actor has intentionally done an act of an unreasonable character, in disregard of a risk known to him or so obvious that he must be taken to have been aware of it, and so great as to make it highly probable that harm would follow."

207 Or. at 137, 295 P.2d 182 (quoting Prosser, Law of Torts § 33 at 151). Falls also emphasized that the trial court’s definition of "wanton misconduct" was "substantially the same as" conduct that was described in the [365 Or. 91] Restatement (First) of Torts , section 500 (1934), as "reckless disregard of the safety of another."4 In a later case, this court made clear that it "approved" the Restatement definition of "reckless disregard of safety" in section 500 as "an equivalent for" willful or wanton misconduct.

Taylor v. Lawrence , 229 Or. 259, 264, 366 P.2d 735 (1961). Moreover, in Taylor , the court noted that it had "also approved the gloss on that rule found in comment ‘c’ to section 500," which emphasized that conduct sufficient to satisfy the degree of culpability that the Restatement called

"reckless disregard"—and that this court called "wanton misconduct"—did not require proof that the defendant actually knew that his conduct would create the unreasonable risk: " ‘In order that the actor’s conduct may be reckless, it is not necessary that he himself recognize it as being extremely dangerous. His inability to realize the danger may be due to his own reckless temperament or to the abnormally favorable results of previous conduct of the same sort. It is enough that he knows or has reason to know of circumstances which would bring home to the realization of the ordinary, reasonable man the highly dangerous character of his conduct.’ " Id. at 264-65, 366 P.2d 735 (quoting Restatement § 500, comment c). Thus, as we reiterated in Taylor , " ‘expressions such as "reckless disregard", "reckless state of mind," "conscious indifference," "conscious choice of action," are not to be taken to mean that there must be proof that defendant actually had such a state of mind.’ " Id. at 265, 366 P.2d 735 (quoting Williamson v.

McKenna , 223 Or. 366, 397-98, 354 P.2d 56 (1960) ). Rather, "such expressions are appropriate to describe the hypothetical state of mind of the hypothetical reasonable man who, faced with [442 P.3d 190] the dangerous situation, nevertheless elected to encounter it."

[365 Or. 92] Id. at 398, 354 P.2d 56. In other words, the word "wanton" described not only a person who acted with actual knowledge and disregard of the risk but also one who acted without such knowledge if a reasonable person would have realized the risk.

State v. Gutierrez-Medina, 365 Or 79, 442 P.3d 183 (Or. 2019)

A conviction for third-degree assault establishes a degree of culpability that, if compared to common law civil concepts of fault, would fall within the range of culpability that represents "wanton" conduct, and thus a degree of culpability for which the victim’s negligence affords no defense.

As ORS 163.165(1)(a) specifies: "(1) A person commits the crime of assault in the third degree if the person: "(a) Recklessly causes serious physical injury to another by means of a deadly or dangerous weapon[.]"

For purposes of that offense, the mental state "recklessly" is defined as follows: " ‘[r]ecklessly’ * * * means that a person is aware of and consciously disregards a substantial and unjustifiable risk that the result will occur or that the circumstance exists. The risk must be of such nature and degree that disregard thereof constitutes a gross deviation from the standard of care that a reasonable person would observe in the situation."

ORS 161.085(9).

Given that definition, the culpable mental state of a person who is guilty of third-degree assault can be divided into three components: (1) the nature of the risk; (2) the degree of risk; and (3) the degree of awareness with which the person acts in the face of that risk. The culpability of a person who causes harm through conduct that civil law classifies as "wanton" can be divided into the same three components to permit a meaningful comparison. Based on that comparison, we conclude that a criminal defendant who is guilty of third-degree assault has acted with a degree of culpability that is at least as great as that of a civil defendant whose conduct meets the threshold for wantonness.

The alignment between the criminal culpability and the classifications of civil fault is not seamless, in part because the former consists of specific elements while the [365 Or. 93] latter involves a range of culpability. But a conviction for third-degree assault necessarily establishes a degree of culpability that is at least as great as the degree of culpability that satisfies the threshold for civil "wanton" conduct.

First, the nature of the risk is comparable. A conviction for third-degree assault establishes that there was a risk the person’s act would cause "serious physical injury to another," ORS 163.165(1)(a), while proof in a civil action that a person caused physical injury through "wanton" conduct requires proof of a risk that the person’s act—or failure to act—would cause "substantial" bodily harm. See , e.g. , Taylor , 229 Or. at 264, 366 P.2d 735 (citing Restatement § 500 and comment c).

The degree of risk is also comparable. A conviction for third-degree assault under ORS 163.165(1)(a) establishes that the person used a "deadly or dangerous weapon" under circumstances that presented a "substantial and unjustifiable" risk that the person would cause "serious physical injury" with the weapon. ORS 163.165(1)(a) ; ORS 161.085(9). Proof in a civil action that a person caused physical injury through "wanton" conduct requires proof that the person acted—or failed to act—under circumstances that presented an "unreasonable" and "highly probable" risk that "substantial" bodily harm would result, but the risk of harm need not be that which flows from use of a deadly or dangerous weapon. Taylor , 229 Or. at 264, 366 P.2d 735.

Finally, the mental state with which a person must create the risk of injury, to be guilty of thirddegree assault, establishes a degree of culpability that would prove "wantonness" in a civil action. A conviction for third-degree assault establishes that the person actually was "aware of and

State v. Gutierrez-Medina, 365 Or 79, 442 P.3d 183 (Or. 2019)

consciously disregard[ed]" the risk. ORS 161.085(9) ; ORS 163.165(1)(a). In a civil action for the same injury, "wantonness" would involve a range of mental states into which proof of the mental state required for third-degree assault would fall. Although proof of "wanton" conduct may involve proof that the person actually [442 P.3d 191] was aware of and consciously disregarded the risk, as does third-degree assault, "wantonness" does not require that proof. Rather, wantonness can be proven if a "reasonable" person would have realized the risk. Taylor , 229 Or. at 264, 366 P.2d 735.

[365 Or. 94] Indeed, this court has already considered the relationship between the criminal mental state "recklessly" and the degrees of culpability in a civil action and, in doing so, reached the same conclusion that we reach here through more protracted analysis. In State v. Hill , 298 Or. 270, 280, 692 P.2d 100 (1984), the defendant was convicted of third-degree assault after he drove under the influence of intoxicants and injured his passenger. 298 Or. at 272, 692 P.2d 100. This court reversed the assault conviction because we concluded that the trial court erroneously instructed the jury in a way that permitted jurors to find that the defendant acted recklessly if he was not actually aware of the risk when he drove under the influence of intoxicants but reasonably should have been aware of the risk. Id. at 278-79, 692 P.2d 100. This court observed that the jury instruction would have been appropriate to describe the mental state that established civil liability under the guest passenger statute (i.e. , the mental state that we had equated to "wantonness"), but the court emphasized that criminal recklessness requires a "higher mental state," because it requires the actor to be "aware of the risk and consciously disregard it." Id. at 279, 692 P.2d 100. See also State v. Lewis , 352 Or. 626, 639 n. 6, 290 P.3d 288 (2012) (noting that "recklessness now requires a higher mental state than" the threshold for liability "under the

guest passenger statute because the defendant must be aware of and consciously disregard the applicable risk) (internal quotation marks and citation omitted).

In short, if a person uses a deadly or dangerous weapon in a way that the person is aware will create a substantial risk of serious physical injury and consciously disregards that risk, as is established by a conviction for third-degree assault, then the person necessarily has acted with a degree of culpability that the civil common law would classify as at least "wanton." As this court recited in Cook , that conduct "differs from negligence not only in degree but in kind, and in the social condemnation attached to it." 207 Or. at 43, 293 P.2d 717 (internal quotation marks and citation omitted). And a defendant who engages in such conduct cannot assert the plaintiff’s negligence as a defense. We, thus, reject defendant’s premise that the defense of comparative fault would have been available to him in a hypothetical civil action for the same injury caused under the same circumstances. That [365 Or. 95] conclusion leaves no basis for this court to consider defendant’s argument that ORS 137.106 permits the trial court to reduce a victim’s "economic damages" for purposes of imposing restitution.

The decision of the Court of Appeals and the judgment of the circuit court are affirmed.

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

DUNCAN, J. As the majority correctly notes, the terms at issue in this case, including "reckless," "gross negligence," and "wanton," have been used in different ways in Oregon cases. The majority concludes that criminal recklessness, as admitted by defendant in this case, falls within wantonness, which precludes use of the comparative fault defense, as opposed to gross negligence, which

State v. Gutierrez-Medina, 365 Or 79, 442 P.3d 183 (Or. 2019)

does not preclude the use of that defense. See Cook v. Kinzua Pine Mills Co. et al. , 207 Or. 34, 58-59, 293 P.2d 717 (1956) (stating that the defense of contributory negligence is available to a defendant who is negligent or grossly negligent, but not one who acts wantonly or intentionally); Fassett v. Santiam Loggers, Inc., 267 Or. 505, 510, 517 P.2d 1059 (1973) concluding that contributory negligence is not a defense to the commission of "an intentional act which involved a high degree of probability that harm would result and to have demonstrated a reckless disregard of consequences"); see also Johnson v.

Tilden , 278 Or. 11, 17, 562 P.2d 1188 (1977) (explaining that comparative fault statute was intended to apply in actions in which contributory negligence was an appropriate defense).

This court has described wantonness as [442 P.3d 192] "the doing of an intentional act of an unreasonable character in disregard of a risk known to the actor, or so obvious that he must be taken to have been aware of it and so great as to make it highly probable that harm would follow, usually accompanied by a conscious indifference to consequences."

Cook, 207 Or. at 58-59, 293 P.2d 717 (emphasis added). Likewise, this court has approved a jury instruction defining "wanton misconduct" as "an intentional doing or failing to do of an act when one knows or has reason to know of facts which would lead [365 Or. 96] a reasonable man to realize that the actor’s conduct not only creates unreasonable risk of harm to others but also involves a high degree of probability that substantial harm will result to him."

Falls v. Mortensen , 207 Or. 130, 135, 295 P.2d 182 (1956), overruled in part on other grounds

by Lindner v. Ahlgren , 257 Or. 127, 477 P.2d 219 (1970) (emphasis added). Thus, wantonness involves a risk "so great as to make it highly probable that harm would follow." Cook , 207 Or. at 58, 293 P.2d 717 ; see also Falls , 207 Or. at 137, 295 P.2d 182 (quoting William L. Prosser, Law of Torts § 33, 151 (2d ed. 1955)) (wanton conduct involves a risk that is "extremely likely" to result in harm); Williamson v. McKenna , 223 Or. 366, 391, 354 P.2d 56 (1960) (stating that wanton conduct involves a "high degree of manifest danger"); id . at 396, 354 P.2d 56 (explaining that wanton conduct involves " ‘an easily perceptible danger of substantial bodily harm or death and the chance that it will so result must be great,’ " and holding, as a matter of law, that driver’s conduct was not wanton (quoting Restatement (First) of Torts § 500 comment a (1934))).

In this case, the majority concludes that the culpable mental state for committing third-degree assault falls within the mental state of "wantonness." State v. Gutierrez-Medina , 365 Or. 79, 92, 442 P.3d 183 (2019). A person commits third-degree assault if the person "[r]ecklessly causes serious physical injury to another by means of a deadly or dangerous weapon[.]" ORS 163.165(1)(a). A person acts "recklessly" if the person "is aware of and consciously disregards a substantial and unjustifiable risk that the result will occur or that the circumstance exists. The risk must be of such nature and degree that disregard thereof constitutes a gross deviation from the standard of care that a reasonable person would observe in the situation."

ORS 161.085(9).

The majority compares the culpable mental state for third-degree assault and wantonness.

Specifically, it compares the nature of the risk, the

State v. Gutierrez-Medina, 365 Or 79, 442 P.3d 183 (Or. 2019)

degree of risk, and the person’s awareness of the risk. 365 Or. at 92, 442 P.3d at ––––. I disagree with the majority’s conclusion that the degree of risk is the same.

[365 Or. 97] Both recklessness and wantonness involve an unreasonable or unjustifiable risk, but it appears to me that recklessness is a less culpable mental state than wantonness because recklessness involves a substantial risk, whereas wantonness involves a highly probable risk. Thus, a person can be reckless without being wanton. See Cook , 207 Or. at 43, 293 P.2d 717 (quoting Prosser, Law of Torts § 51 at 291, for the proposition that wantonness is something more than an "extreme departure from ordinary standards").

The majority relies on State v. Hill , 298 Or. 270, 692 P.2d 100 (1984) for the proposition that recklessness requires a higher culpable mental state than wantonness.1 This court’s decision in Hill was based on the fact that, to be reckless, a person must be aware of and consciously disregard a risk, but a person can be wanton if the person is aware and consciously disregards a risk or if the person should have been aware of the risk. 298 Or. at 279, 692 P.2d 100. The Hill court was correct that the awareness required to [442 P.3d 193] establish recklessness is greater than that required to establish wantonness. But it does not establish that a person who acts with that required awareness is wanton, because wantonness also depends on the degree of risk, which is greater than that required for recklessness.

Because I disagree with the majority’s conclusion that defendant would be precluded from using the comparative default defense, I respectfully dissent.

Balmer, J., joins in this dissent.

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Notes: ** Kistler, J., retired December 31, 2018, and did

not participate in the decision of this case.

1 At trial, defendant presented the testimony of a

forensic accident investigation expert who had examined the scene of defendant’s accident and concluded that defendant struck the victim when the victim walked five feet from a curb onto the roadway. The expert stated that the area was very dark, with no lighting, that there was no crosswalk, and that the victim did not have the right of way. The expert concluded that, "based on the circumstances, a sober driver would not have been able to avoid the collision with the victim, and the victim was in the best position to have avoided the collision."

ORS 30.115(2) defines "gross negligence" to "refer[ ] to negligence which is materially greater than the mere absence of reasonable care under the circumstances, and which is characterized by conscious indifference to or reckless disregard of the rights of others."

2

3 Despite this court’s effort in Zumwalt to correct

confusion about the proper terminology to describe the degree of culpability for which the plaintiff’s negligence was no defense, some slippage continued. See Fassett v. Santiam Loggers, Inc ., 267 Or. 505, 507-08, 517 P.2d 1059 (1973) (explaining that "simple negligence cannot be a defense" if the defendant acts with culpability equivalent to "reckless disregard" but calling that degree of culpability "gross negligence").

As quoted in Falls , Restatement section 500 defined "reckless disregard of the safety of another" as follows: 4

"The actor’s conduct is in reckless disregard of the safety of another if he intentionally does an act or fails to do an act which it is his duty to the other to do, knowing or having reason to know of facts which would lead a reasonable man to realize that the actor’s conduct not only creates

State v. Gutierrez-Medina, 365 Or 79, 442 P.3d 183 (Or. 2019)

an unreasonable risk of bodily harm to the other but also involves a high degree of probability that substantial harm will result to him."

207 Or. at 136-37, 295 P.2d 182.

As the majority notes, in Hill , this court considered whether evidence that a defendant acted with criminal recklessness would be enough to establish liability under the guest-passenger statute. To establish liability under that statute, a plaintiff had to prove that the defendant acted with "gross negligence," which—in that context— was the equivalent of "wantonness." Zumwalt v.

Lindland , 239 Or. 26, 37-38, 396 P.2d 205 (1964) (explaining that "any conduct reckless enough to render a defendant liable under [the guestpassenger statute] is also wanton misconduct").

1

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