Clarke v. Ohsu

• Decision Date: 28 December 2007
• Docket Number: SC S053868.,CC 0005-05116.,CA A124560.
• Citation: Clarke v. Ohsu, 343 Or 581, 175 P3d 418 (Or. 2007)
• Parties: Jordaan Michael CLARKE, a minor, by his guardian ad litem, Sari Clarke, Respondent on Review, v. OREGON HEALTH SCIENCES UNIVERSITY, a public corporation; Mustafa Adnan Cobanoglu, M.D.; John David Blizzard, M.D.; Sanjeev K. Sharma, M.D.; Steven A. Fiamengo, M.D.; Betsy E. Soifer, M.D.; Jennifer Stewart, R.R.T., and Ana Wilson, R.N., Petitioners on Review, and Veerappa K.M. Reddy, M.D., Defendant, and State of Oregon, Intervenor on Review.
• Court: Oregon Supreme Court

175 P.3d 418

343 Or. 581

Jordaan Michael CLARKE, a minor, by his guardian ad litem, Sari Clarke, Respondent on Review, v.OREGON HEALTH SCIENCES UNIVERSITY, a public corporation; Mustafa Adnan Cobanoglu, M.D.; John David Blizzard, M.D.; Sanjeev K. Sharma, M.D.; Steven A. Fiamengo, M.D.; Betsy E. Soifer, M.D.; Jennifer Stewart, R.R.T., and Ana Wilson, R.N., Petitioners on Review, and Veerappa K.M. Reddy, M.D., Defendant, and State of Oregon, Intervenoron Review.

CC 0005-05116.

CA A124560.

SC S053868.

Supreme Court of Oregon.

Argued and Submitted January 9, 2007.

Decided December 28, 2007.

On review from the Court of Appeals.^*

William F. Gary, Harrang Long Gary Rudnick PC, argued the cause for petitioners on review. With him on the briefs were Sharon A. Rudnick, Jerome Lidz, and Susan D. Marmaduke, Portland.

Kathryn H. Clarke, argued the cause for respondent on review.With her on the briefs were William A. Gaylord, Linda K. Eyerman, Todd A. Bradley, and Gaylord Eyerman Bradley, P.C., Portland.

Janet A. Metcalf, Assistant Attorney General, filed a brief on behalf of intervenor on review State of Oregon.With her on the brief were Hardy Myers, Attorney General, and Mary H. Williams, Solicitor General, Salem.

Roy Pulvers, Lindsay, Hart, Neil & Weigler, LLP, Portland, filed briefs on behalf of amicus curiae Port of Portland.

Janet A. Metcalf, Assistant Attorney General, filed a brief in support of petition for review on behalf of amicus curiaeState of Oregon.

Thomas E. Cooney, Paul A. Cooney, Lake Oswego, and David J. Madigan, filed a brief in support of petition for review on behalf of amicus curiaeOregon Medical Association.

David C. Landis, Portland, filed a brief on behalf of amicus curiaeOregon Medical Association.

Linda Meng, Harry Auerbach, Portland, Paul Snider, Agnes Sowle, Portland, Dori M. Brattain, Mark B. Comstock, Salem, James M. Brown, and Ronald W. Downs, filed briefs on behalf of amici curiae League of Oregon Cities, Association of Oregon Counties, Multnomah County, Oregon School Boards Association, Oregon Small Schools Association, Oregon Association of School Business Officials, Inc., Confederation of Oregon School Administrators, and Special Districts Association of Oregon.

Mark S. Rauch, Salem, filed a brief on behalf of amicus curiae City County Insurance Services.

Robyn E. Ridler, Barbee B. Lyon, Tonkon Torp LLP, Portland, filed a brief on behalf of amicus curiaeOregon Business Association.

Maureen Leonard, Portland, filed a brief on behalf of amicus curiaeOregon Trial Lawyers Association.

Lawrence Wobbrock, Portland, and Jeffrey R. White, Washington D.C., filed a brief on behalf of amicus curiaeAmerican Association for Justice.

Before DE MUNIZ, Chief Justice, GILLETTE, DURHAM, BALMER, KISTLER and WALTERS, Justices.^**

DE MUNIZ, C.J.

In this case, we address whether the Oregon Tort Claims Act (OTCA), specificallyORS 30.265(1)andORS 30.270(1), as applied to this case, violates the Remedy Clause of Article I, section 10, of the Oregon Constitution.ORS 30.265(1) provides, in part:

"The sole cause of action for any tort of officers, employees or agents of a public body acting within the scope of their employment or duties and eligible for representation and indemnification under ORS 30.285 or 30.287 shall be an action against the public body only.The remedy provided by ORS 30.260 to 30.300 is exclusive of any other action or suit against any such officer, employee or agent of a public body whose act or omission within the scope of the officer's, employee's or agent's employment or duties gives rise to the action or suit.No other form of civil action or suit shall be permitted.If an action or suit is filed against an officer, employee or agent of a public body, on appropriate motion the public body shall be substituted as the only defendant."

ORS 30.265(1)(emphasis added).ORS 30.270(1), in turn, limits the damages recoverable against any public body to:

"(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 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.

"(c) $500,000 for any number of claims arising out of a single accident or occurrence."

ORS 30.270(1)(emphasis added).Article I, section 10, of the Oregon Constitution states:

"No court shall be secret, but justice shall be administered, openly and without purchase, completely and without delay, and every man shall have remedy by due course of law for injury done him in his person, property, or reputation."

In the recent case of Jensen v. Whitlow,334 Or. 412, 51 P.3d 599(2002), this court rejected a facial challenge to ORS 30.265(1) under Article I, section 10, id. at 421, 51 P.3d 599, but declined to decide an "as-applied" challenge, id. at 415-16, 51 P.3d 599.We now address such an "as-applied" challenge and hold that the application of ORS 30.265(1)andORS 30.270(1) in this case violates Article I, section 10.

I.BACKGROUND AND PROCEDURAL HISTORY

We take the following facts from the pleadings.Because the trial court granted judgment on the pleadings pursuant to ORCP 21 B,¹this court assumes the facts in the pleadings to be true.Sager v. McClenden,296 Or. 33, 35, 672 P.2d 697(1983).

PlaintiffJordaan Clarke was born in February 1998 at Oregon Health Sciences University (OHSU) with a congenital heart defect.He was admitted to OHSU in May 1998 for the surgical repair of that condition.Following surgery, plaintiff was placed in a surgical intensive care unit.While in that unit, plaintiff suffered prolonged oxygen deprivation causing him permanent brain damage.

Plaintiff's brain damage was a direct result of the negligence of OHSU and certain of its employees and agents.Plaintiff is totally and permanently disabled.His expenses for total life and health care will amount to $11,073,506, the loss of his future earning capacity is $1,200,000, and his noneconomic damages are $5,000,000.

In 2001, plaintiff brought this action against OHSU and against the individuals who treated him.²Pursuant to ORS 30.265(1), defendants moved to substitute OHSU as the sole defendant in the action.The trial court granted the motion, and plaintiff filed a second amended complaint naming only OHSU as defendant.In its answer, OHSU admitted that it was negligent in one or more of the ways alleged by plaintiff and that its negligence resulted in permanent injury to plaintiff.OHSU also admitted that "plaintiff sustained economic and noneconomic damages in excess of the monetary limitations of the Oregon Tort Claims Act as a result of the injuries caused by the negligence of OHSU."

OHSU moved for judgment on the pleadings pursuant to ORCP 21 B, contending that the trial court should enter judgment in favor of plaintiff and against OHSU in the amount of $200,000, OHSU's maximum liability under ORS 30.270(1).The trial court granted OHSU's motion and entered judgment against OHSU in the amount of $200,000.

Plaintiff appealed, challenging the substitution of OHSU for the individual defendants and arguing that the trial court's entry of judgment in the amount of $200,000 denied him the right to a remedy in violation of Article I, section 10, of the Oregon Constitution, as well as the right to a jury trial under Article I, section 17.³The Court of Appeals rejected plaintiff's Article I, section 10, argument as to his claim against OHSU because, it concluded, OHSU would have been immune from liability at common law.Clarke v. OHSU,206 Or.App. 610, 615-22, 138 P.3d 900(2006).That court, for the same reason, rejected plaintiff's Article I, section 17, argument as to OHSU.Id. at 622-23, 138 P.3d 900.

The Court of Appeals, however, accepted plaintiff's Article I, section 10, argument with respect to the substitution of OHSU as the sole defendant under ORS 30.265(1).Id. at 623-34, 138 P.3d 900.Plaintiff argued that, because, at common law in 1857, he would have had a cause of action against the employees of OHSU, Article I, section 10, permits the legislature to abolish that remedy only if it provides an adequate substitute remedy.Id. at 623-24, 138 P.3d 900.Plaintiff further argued that, because the limited recovery against OHSU was not an adequate substitute remedy in this case, ORS 30.265(1) violated Article I, section 10.Id. at 624, 138 P.3d 900.The court agreed that the OTCA did not provide a constitutionally adequate remedy in this case, explaining that "recovery of less than two percent of one's economic damages — particularly given the nature of the injuries alleged — is a remedy `incapable of restoring the right that has been injured.'"Id. at 626, 138 P.3d 900.(quotingSmothers v. Gresham Transfer, Inc.,332 Or. 83, 119-20, 23 P.3d 333(2001)).The court concluded that, as applied to this case, ORS 30.265(1) violated Article I, section 10.Clarke,206 Or.App. at 633, 138 P.3d 900.The court reversed the trial court's judgment and remanded with instructions to reinstate the claims against the individual defendants.⁴Id. at 634, 138 P.3d 900.

Defendants sought review in this court, challenging the Court of Appeals' conclusion that in this case the OTCA does not provide a constitutionally adequate substitute remedy as required under Article I, section 10.For his part, plaintiff also challenges the Court of Appeals' conclusion regarding his Article I, section 10, claims against OHSU; specifically, plaintiff takes issue with the Court of Appeals' conclusion that OHSU would have been entitled to sovereign immunity at common law.We allowed review to address the important issues concerning the adequacy of the OTCA remedy...