Butterfield v. State of Oregon

• Citation: 987 P.2d 569,163 Or. App. 227
• Parties: Robin BUTTERFIELD and Lynnda D. Transue, Appellants, v. STATE of Oregon, Respondent. David Quillin, Garold Assums, Lawrence Belcher, Richard Brooke, Roger Clark, James Grammar, Terry Griffith, Glen McDonald, Glen Rader, Mike Reinecke, Carl Salter, James Simpson, Randle Sitton, Terry Springer, Ken Stern, Art Walker, Richard Wingfield, Robert Amela, Dennis Belsky, Nancy Blanchard, Robert Colon, Karen Eastman, Virginia Edwards, Cynthia Eisenmeyer, Alice Ellis, Lavon Hall, Robert Jarvill, Randy Martinak, Ernest Oakes, Jr., Judith Stone, C.L. Thames, Harvey Suwol, Roger Wagner, David Young, Appellants, and Patrick Gregg, Mike Ross and Daryl Reister, Sr., Plaintiffs, v. State of Oregon, Respondent.
• Decision Date: 13 October 1999
• Court: Oregon Court of Appeals

987 P.2d 569

163 Or. App. 227

Robin BUTTERFIELD and Lynnda D. Transue, Appellants, v. STATE of Oregon, Respondent.

David Quillin, Garold Assums, Lawrence Belcher, Richard Brooke, Roger Clark, James Grammar, Terry Griffith, Glen McDonald, Glen Rader, Mike Reinecke, Carl Salter, James Simpson, Randle Sitton, Terry Springer, Ken Stern, Art Walker, Richard Wingfield, Robert Amela, Dennis Belsky, Nancy Blanchard, Robert Colon, Karen Eastman, Virginia Edwards, Cynthia Eisenmeyer, Alice Ellis, Lavon Hall, Robert Jarvill, Randy Martinak, Ernest Oakes, Jr., Judith Stone, C.L. Thames, Harvey Suwol, Roger Wagner, David Young, Appellants, and Patrick Gregg, Mike Ross and Daryl Reister, Sr., Plaintiffs, v. State of Oregon, Respondent.

(97CC-11963; CA A101431 (Control), A102209)

Court of Appeals of Oregon.

Argued and Submitted on February 11, 1999.

Decided October 13, 1999.

John Hoag, Eugene, argued the cause and filed the briefs for appellants.

Mary H. Williams, Assistant Solicitor General, argued the cause for respondent. With her on the brief were Hardy Myers, Attorney General, and Michael D. Reynolds, Solicitor General.

Before EDMONDS, Presiding Judge, and DEITS, Chief Judge,¹ and ARMSTRONG, Judge.

EDMONDS, P.J.

Plaintiffs appeal from a judgment dismissing their actions against the State of Oregon alleging a violation of the Fair Labor Standards Act (FLSA). The trial court held that it did not have jurisdiction because of the State of Oregon's sovereign immunity and because plaintiffs did not give timely notice of their claims under the Oregon Tort Claims Act (OTCA). We review for errors of law and affirm.

Plaintiffs brought these actions to recover overtime compensation that they claim is owed to them under the FLSA.² As salaried state employees, the state treated plaintiffs as exempt from FLSA overtime requirements at all material times.³ They now claim that, according to Department of Labor regulations, the state was required to pay them overtime. See generally, Auer v. Robbins, 519 U.S. 452, 117 S.Ct. 905, 137 L.Ed.2d 79 (1997)

.

Initially, some of the plaintiffs had brought their claims in the United States District Court. Those claims were dismissed for lack of jurisdiction, Stuhr v. State, No. CIV 95-6118TC, 1996 WL 888187 (D.Or. June 14, 1996), aff'd. sub. nom. Quillin v. Oregon, 127 F.3d 1136 (9th Cir.1997), in accordance with the United States Supreme Court's decision in Seminole Tribe of Florida v. Florida, 517 U.S. 44, 116 S.Ct. 1114, 134 L.Ed.2d 252 (1996). Thereafter, plaintiffs brought these actions in the Marion County Circuit Court.⁴ In an ORCP 47 motion for summary judgment, the state argued that plaintiffs had failed to give timely notice of their claims under the OTCA, ORS 30.260 through 30.300, as required to bring a tort claim against the state. In turn, plaintiffs moved for partial summary judgment on the issue of the state's liability. The trial court granted the state's motion and dismissed the claims in their entirety for lack of jurisdiction.

Plaintiffs do not contend that they gave timely notice under the OTCA regarding their FLSA claims.⁵ Instead, they argue that such notice is not required for a FLSA claim brought in state court. They first assert that the state's sovereign immunity was abrogated by Congress when it enacted the FLSA. Therefore, they do not have to comply with the notice provisions of the OTCA. After the briefs were filed in this case, the Supreme Court rejected that argument in Alden v. Maine, ___ U.S. ___, 119 S.Ct. 2240, 144 L.Ed.2d 636, (1999), holding that "the States retain immunity from private suit in their own courts, an immunity beyond the congressional power to abrogate by Article I legislation." As a result, plaintiffs can sue a state in state court under the FLSA only if the state has waived its right to immunity from suit. Alden, 119 S.Ct. at 2267.

Article IV, section 24, of the Oregon constitution provides that "[p]rovision may be made by general law, for bringing suit against the State, as to all liabilities originating after, or existing at the time of the adoption of this Constitution[.]" The OTCA represents a partial waiver by general law of the state's immunity. Hale v. Port of Portland, 308 Or. 508, 516-17, 783 P.2d 506 (1989). If a FLSA claim is a "tort" for purposes of the OTCA,⁶ plaintiffs must comply with the notice requirements of the act to take advantage of the state's partial waiver of immunity. Here, plaintiffs did not give timely notice of their claims under ORS 30.275. "The requirement that notice be given timely is a substantive condition precedent to recovery under the Oregon Tort Claims Act that, if not satisfied, deprives a plaintiff of the right to make a claim. Urban Renewal Agency v. Lackey, 275 Or. 35, 40, 549 P.2d 657 (1976)." Tyree v. Tyree, 116 Or.App. 317, 320, 840 P.2d 1378 (1992), rev. den. 315 Or. 644, 849 P.2d 525 (1993). If the OTCA is applicable to plaintiffs' actions, the actions are barred by ORS 30.275.

Plaintiffs argue that the OTCA is inapplicable because the state's duty to pay overtime arises out of employment contracts and that the definition of "tort" under ORS 30.260(8) excludes duties arising from contract or quasi-contract. Plaintiffs' argument fails to acknowledge relevant case law that characterizes the breaches of legal duties arising from statute as "torts" for the purposes of the OTCA. In Urban Renewal, a state agency sought rent from the defendants on a building that the agency had previously condemned. The defendants counterclaimed for damages, alleging that, under federal regulations, the agency had a duty to assist them in obtaining a replacement location and that the agency had failed to comply with the regulations. The agency demurred to the counterclaim on the ground that it did not allege notice as required by the OTCA. The trial court granted the demurrer, and on review, the Supreme Court affirmed, holding that the breach was a tort for purposes of the OTCA:

"It has been said, and with good reason, that no really satisfactory definition of a tort has yet been found. As a general rule, however, any breach of a legal duty resulting in damages, other than those duties created by contract, is a tort, whether that duty is imposed by the common law or by statute. Also, in our view, and as held in Gray v. Hammond Lumber Co., et al., 113 Or. 570, 232 P. 637, 233 P. 561, 234 P. 261 (1925):

"`When statutes are enacted which undertake to declare rights and establish a standard of conduct for their protection, any acts or omissions in violation of such statute, which destroy the enjoyment of such rights, may be treated as legal wrongs or torts: * * *.'" Urban Renewal, 275 Or. at 38, 549 P.2d 657 (footnote omitted).

Also, in Griffin v. Tri-Met, 318 Or. 500, 506, 870 P.2d 808 (1994), the court rejected the Oregon Trial Lawyers Association amicus argument that an unlawful employment practice was not a tort under the OTCA. Citing to Urban Renewal, the court held that ORS 659.425(1) imposes on an employer a duty not to discharge an individual based on physical impairment and that that duty is "a legal duty imposed by law, other than a duty arising from contract or quasi-contract" within the meaning of the OTCA. Griffin, 318 Or. at 506-07, 870 P.2d 808.

Finally, in Fullerton v. Lamb, 177 Or. 655, 163 P.2d 941, 165 P.2d 63 (1946), the plaintiff sued to recover overtime pay and penalties under the FLSA. The defendant demurred on the ground that chapter 265, of the Oregon Laws (1943), operated to bar the action because the action had not been brought within the statute of limitations expressed by that chapter. 177 Or. at 659-60, 163 P.2d 941. Because there was no applicable federal statute of limitations, the court looked to available statutes of limitations under Oregon law. Before the enactment of chapter 265, the action would have been governed by OCLA § 1-204(1) (prescribing a limitation of six years based on express or implied contract), or OCLA § 1-204(2) (prescribing a six year limitation for liability created by statute, other than for a penalty or forfeiture), or OCLA § 1-205 (prescribing a three year limitation on actions for penalties). Id. at 661-62, 163 P.2d 941. Under chapter 265, the plaintiff was required to bring his action within three months or at the most, six months after the effective date of the statute. At issue on appeal was the constitutionality of chapter 265 in light of the substantive rights granted by the FLSA.⁷ In deciding that issue, the court said, "[w]e are inclined to the view, * * *, that this is an action upon a liability created by statute rather than one upon a contract or liability, express or implied." Fullerton, 177 Or. at 661, 163 P.2d 941.

In light of the foregoing cases, we turn to the question of whether plaintiffs' actions are founded in "tort" as contemplated by the language of the OTCA, or in contract and exempt from its provisions. The question is one of statutory interpretation and the intent of the Oregon legislature. The language of the OTCA and the Oregon Supreme Court case law interpreting it supply the initial focus for our inquiry. See State v. Clevenger, 297 Or. 234, 244, 683 P.2d 1360 (1984)

. Has the state consented to be sued under the FLSA, a federal statute, without compliance with the OTCA notice requirements when the employment relationships at issue do not include the duty on which plaintiffs rely? The answer depends on what gives rise to the claim. It is apparent from the language of the applicable statutes and the case law interpreting them that claims based on rights or duties created by statutes are to be treated as "tort" claims for purposes of the OTCA. On the other hand, if a claim is based on a contractual provision, the exemption applies. Here, we conclude that, because the duty relied on by the plaintiffs is imposed not by the terms of their employment relationships with the state but by federal law, the legislature would...