City of La Grande v. Public Employes Retirement Bd.

• Decision Date: 31 January 1978
• Docket Number: No. 924,I,924
• Citation: 576 P.2d 1204,281 Or. 137
• Parties: CITY OF LA GRANDE, a Municipal Corporation, Respondent, v. PUBLIC EMPLOYES RETIREMENT BOARD of the State of Oregon, Clay Myers, as Secretary of State of the State of Oregon, La Grande Police Association, and La Grande Firefighters' Union, Localnternational Association of Firefighters, American Federation of Labor, Congress of Industrial Organization, Canadian Labour Congress, Petitioners. CITY OF ASTORIA, a Municipal Corporation, Respondent, v. PUBLIC EMPLOYES RETIREMENT BOARD of the State of Oregon, Lester L. Rawls, as Insurance Commissioner of the State of Oregon, Leander Quiring, as Director of the Department of General Services of the State of Oregon, Clay Myers, as Secretary of State of the State of Oregon, Policemen and Firemen of the City of Astoria, as a class, Petitioners.
• Court: Oregon Supreme Court

Page 1204

576 P.2d 1204

281 Or. 137

CITY OF LA GRANDE, a Municipal Corporation, Respondent, v. PUBLIC EMPLOYES RETIREMENT BOARD of the State of Oregon, Clay Myers, as Secretary of State of the State of Oregon, La

Grande Police Association, and La Grande Firefighters'

Union, Local No. 924, International Association of

Firefighters, American Federation of Labor, Congress of

Industrial Organization, Canadian Labour Congress, Petitioners.

CITY OF ASTORIA, a Municipal Corporation, Respondent, v. PUBLIC EMPLOYES RETIREMENT BOARD of the State of Oregon, Lester L. Rawls, as Insurance Commissioner of the State of

Oregon, Leander Quiring, as Director of the Department of

General Services of the State of Oregon, Clay Myers, as

Secretary of State of the State of Oregon, Policemen and

Firemen of the City of Astoria, as a class, Petitioners.

Supreme Court of Oregon, In Banc.

Argued and Submitted July 12, 1977.

Decided Jan. 31, 1978.

Gary K. Jensen, Eugene, argued the cause and filed a brief for petitioners Policemen and Firemen of the City of Astoria, as a class.

Al J. Laue, Sol. Gen., Salem, argued the cause for petitioner Public Employes' Retirement Board of the State of Oregon. With him on the brief were Lee Johnson Atty. Gen., and W. Michael Gillette, Sol. Gen.

Ross E. Hearing, La Grande, argued the cause and filed a brief for respondent City of La Grande.

D. Richard Fischer, Astoria, argued the cause for respondent City of Astoria. With him on the brief was Robert C. Anderson of Anderson, Fulton, Lavis & Van Thiel, Astoria.

James M. Mattis, Eugene, Sp. Counsel for amici curiae, Edward C. Harms, Jr., City Atty., Springfield, J. B. Bedingfield, Jr., City Atty., Coos Bay, Charles A. Phipps, City Atty., The Dalles, John H. Hammond, Jr., Oregon City, City Atty., Gladstone, J. D. Bailey, Hillsboro, City Atty., Tigard, L. Charles Purvis, St. Helens, City Atty., Rainier, and Earl McFarlan, City Atty., Sweet Home, filed a brief for seven Oregon cities as amici curiae.

LINDE, Justice.

By a 1971 enactment, the legislative assembly required all police officers and firemen employed by any city, county, or district to be brought within the state's Public Employes Retirement System by July 1, 1973, unless the particular public employer provides them with equal or better retirement benefits. Or.Laws 1971, ch. 692, codified at ORS 237.610-237.640. The same statute also required these public employers to pay the premiums on an insurance policy purchased by the state's Department of General Services, providing $10,000 to an officer's or fireman's beneficiaries in case of his or her job-related death, again unless the employer provides equal or better benefits. ORS 243.005-243.055.

The validity of the retirement provisions of the statute was attacked in separate declaratory judgment proceedings brought by the Cities of La Grande and Astoria against various state officials and against their respective police and firefighters as a class or as represented by their collective bargaining agents. ¹ Astoria also challenged the statutory requirement of insurance coverage. The cities claim that by requiring them to provide police officers and firemen with retirement and insurance benefits the legislature has invaded a domain reserved to local discretion by the Oregon Constitution. The respective trial courts agreed with this claim. The Court of Appeals affirmed in a consolidated appeal, 28 Or.App. 9, 558 P.2d 1236 (1977). In granting review, we specifically asked the parties to discuss these questions:

1. In State ex rel. Heinig v. Milwaukie et al, 231 Or. 473, 373 P.2d 680 (1962), this court announced a test to be used in determining when the state can legislate on a matter of local concern. Should the Heinig test be refined or reconsidered and, if so, in what way?

2. If the Heinig test is refined or reconsidered, what criteria might apply to define areas of state or local concern in the context of employe relations and employe benefits?

The cases have been extensively briefed by the parties and numerous amici curiae. For the reasons that follow, we conclude that in enacting these retirement and insurance requirements the legislature did not exceed constitutional bounds and accordingly reverse the decisions below.

I

The issues in these cases arise from two provisions of the Oregon Constitution that together provide "home rule" for cities and towns. ² Enacted together by initiative amendment in 1906, they appear in two places in the constitution. The pertinent part of article XI, section 2, provides:

The Legislative Assembly shall not enact, amend or repeal any charter or act of incorporation for any municipality, city or town. The legal voters of every city and town are hereby granted power to enact and amend their municipal charter, subject to the Constitution and criminal laws of the State of Oregon, . . .

In article IV, section 1a (now 1(5)), the statewide initiative and referendum powers "reserved" to the people by amendment of article IV, section 1, in 1902 were "further reserved to the qualified voters of each municipality and district as to all local, special and municipal legislation of every character in or for their municipality or district." ³

The relationship between the authority of the legislature and that of local governments under these provisions during the past 70 years has occupied this court in more than 75 cases. As might be expected, the court has employed a variety of formulations in explaining these decisions. This is only proper, since that relationship presents a number of distinct issues rather than a single issue. In any given case, it is necessary to distinguish whether it involves (1) the validity of a local act in the absence of a contrary state law; ⁴ (2) the validity of a state law in the absence of a contrary local act; ⁵ (3) the validity of a local act said to conflict with a state law; ⁶ or (4) the validity of a state law said to conflict with a local act. ⁷ To reduce the effect of the amendments on local authority and their effect on the state's authority to a single formula would only obscure the fact that these are two different questions.

It is useful to recall the role of the amendments in the state's constitutional arrangements. With respect to local authority their central object is to allow the people of the locality to decide upon the organization of their government and the scope of its powers under its charter without having to obtain statutory authorization from the legislature, as was the case before the amendments. Thus the validity of local action depends, first, on whether it is authorized by the local charter or by a statute, or if taken by initiative, whether it qualifies as "local, special (or) municipal legislation" under article IV, section 1(5); second, on whether it contravenes state or federal law. With respect to a state law, or action taken under it, on the other hand, it is elementary that the legislature has plenary authority except for such limits as may be found in the constitution or in federal law. Thus the validity of a state law vis-a-vis local entities does not depend upon a source of authority for the law, nor on whether a locality may have authority to act on the same subject; it depends on the limitations imposed by article XI, section 2, supra. ⁸

Moreover, these constitutional provisions are concerned with the structural and organizational arrangements for the exercise of local self-government, with the power of local voters to enact and amend their own municipal charters and to employ the initiative and referendum for "local, special (or) municipal legislation." They address the manner in which governmental power is granted and exercised, not the concrete uses to which it is put. Except for the limits on the initiative and referendum implied in the quoted phrase of article IV, section 1(5), the amendments do not purport to divide areas of substantive policy between the levels of government. Accordingly, the accommodation of state and local authority most directly involves the amendments when a party invokes a state law as governing some process of local government, such as elections, ⁹ the qualification and selection of local government personnel, ¹⁰ taxation and finance ¹¹ or judicial procedures. ¹²

The important issue in the early disputes over the effects of the amendments was whether the prohibition of article XI, section 2, extended beyond laws changing a single municipal charter to laws amending such charters generally. The court had been sharply divided in two cases decided in 1914, ¹³ with Chief Justice McBride, who had been a main sponsor of the 1906 amendments, in dissent. This led the court soon after to undertake a thorough review of the text and history of these still recent amendments, in a unanimous opinion by Justice Harris. Rose v. Port of Portland, 82 Or. 541, 162 P. 498 (1917). The origin of the amendments, the court found, had been the desire of local communities to enact their own charters and ordinances without having to secure action from the state legislature. The proposal, circulated by a committee that included W. S. U'Ren and Chief Justice McBride and that later organized itself as the People's Power League of Oregon, was accompanied by a statement describing the existing situation to be remedied:

The usual method of making city charters in the past has been, in this state, for a few men to agree on the charter they wanted for the city. Then it was introduced in the legislative assembly by one of their county members. It was referred to a committee consisting of the members from his county, reported favorably, of course, and enacted by unanimous consent of the legislature. No other member ever sees or cares anything about it. . . ." 82 Or. at 560-561, 162 P. at 504. ¹⁴

The court's opinion continued:

An examination of the public prints issued at that time discloses that the idea which was uppermost in the minds...