Doyle v. City of Medford

• Citation: 356 Or. 336,337 P.3d 797
• Decision Date: 02 October 2014
• Docket Number: CC 080137L7,CA A147497,SC S061463.
• Parties: Ronald DOYLE and Benedict Miller, Plaintiffs–Respondents, Petitioners on Review, and Robert Deuel and Charles Steinberg, Plaintiffs–Respondents, Cross–Appellants, Petitioners on Review, v. CITY OF MEDFORD, an Oregon Municipal corporation; and Michael Dyal, City Manager of the City of Medford, in his official capacity and as an individual, Defendants–Appellants, Cross–Respondents, Respondents on Review.
• Court: Supreme Court of Oregon

356 Or. 336

337 P.3d 797

Ronald DOYLE and Benedict Miller, Plaintiffs–Respondents, Petitioners on Review

and

Robert Deuel and Charles Steinberg, Plaintiffs–Respondents, Cross–Appellants, Petitioners on Review

v.CITY OF MEDFORD, an Oregon Municipal corporation; and Michael Dyal, City Manager of the City of Medford, in his official capacity and as an individual, Defendants–Appellants, Cross–Respondents, Respondents on Review.

CC 080137L7

CA A147497

SC S061463.

Supreme Court of Oregon, En Banc.

Argued and Submitted March 13, 2014.

Decided Oct. 2, 2014.

Stephen L. Brischetto, Portland, argued the cause and filed the briefs for petitioners on review. With him on the briefs was George P. Fisher.

Robert E. Franz, Jr., Law Office of Robert E. Franz, Jr., Springfield, argued the cause and filed the brief for respondents on review.

Opinion

BREWER, J.

The issues presented in this case are whether ORS 243.303(2),¹ which requires local governments to make available to retired employees, “insofar as and to the extent possible,” the health care insurance coverage available to current officers and employees of the local government, creates a private right of action² for the enforcement of that duty; or, if not, whether this court should—under its common-law authority—provide such a right of action. The Court of Appeals held that the statute did not expressly or impliedly create a private right of action, and it considered that conclusion to be dispositive of plaintiffs' claim for relief. Although we also conclude that the statute does not expressly or impliedly create a private right of action for its enforcement, that conclusion is not the end of our analysis. As explained below, where a statute imposes a legal duty, but there is no indication that the legislature intended to create (or not to create) a private right of action for its enforcement, courts must (if such relief is sought) determine whether the judicial creation of a common-law right of action would be consistent with the legislative provision, appropriate for promoting its policy, and needed to ensure its effectiveness.

Analyzing the duty imposed on local governments by ORS 243.303(2) under that standard, we decline to create an additional common-law right of action for its enforcement because (1) plaintiffs have failed to identify a cognizable common-law claim for relief whose creation is appropriate and necessary to effectuate the legislature's purpose, (2) a declaratory judgment and supplemental relief are adequate to enforce the statutory duty, and (3) a significant change in existing law would result from judicial creation of a tort claim permitting the recovery of noneconomic damages in the circumstances here, and there is no other need to create a common-law tort claim where, as here, a declaratory judgment and supplemental relief would fully redress plaintiffs' compensable injuries, if any. We also conclude that plaintiffs have a claim for a determination of the parties' rights and duties under the statute that is actionable under the Declaratory Judgments Act.

Accordingly, we reverse the decision of the Court of Appeals and remand to that court for a determination of the other issues that that court did not reach, including whether plaintiffs were entitled to summary judgment on the ground that the city violated ORS 243.303(2) as evaluated under ORS Chapter 28.

I. BACKGROUND

Plaintiffs are retirees, each of whom retired from employment with the City of Medford and attempted to elect to continue the health insurance coverage that the city had provided to them as employees. The city declined to make that coverage available to plaintiffs because, among other reasons, the city's health insurance plan that had applied to plaintiffs at the time of their retirements did not include coverage for retirees, and the city took the position that the cost of providing such coverage was prohibitive. Plaintiffs brought this action against the city and its manager, asserting, among other claims for relief, a tort-based claim that the city was required by ORS 243.303(2) to make such coverage available to them.³ In that claim, plaintiffs alleged:

“Due to the defendant's intentional conduct of not providing the opportunity for any plaintiff to participate in its health care insurance program upon their retirement, each plaintiff is unable to access benefits ORS 243.303(2) requires.”

Although plaintiffs alleged that the city intentionally did not provide them with an opportunity to participate in its health insurance program after they retired, plaintiffs did not allege that, in failing to do so, the city had intentionally, recklessly, or negligently violated the statute.

Plaintiffs alleged economic damages

“representing the difference between health care insurance premiums each has had to pay or will have to pay, that are higher than what each would have had to pay if they were allowed to participate in the city's health care insurance program, and the difference in value of benefits between the city's program and the lesser benefits each plaintiff receives from their present health care program, if applicable, and prejudgment interest on said economic damages.”

Plaintiffs also alleged noneconomic damages, in their ORS 243.303(2) claim, in the amount of

“$500,000 representing each plaintiff's mental stress, anxiety and discomfort due to their fear of losing health care insurance coverage for themselves and their dependents altogether, due to concern for their ability to pay for health care insurance they will have to find because they cannot choose to participate in the city's health insurance program, and due to concern for whether any such coverage will be adequate to their and their dependent's needs; and each plaintiff's diminished health, vitality, and life expectancy due to the difference in health care services available to each plaintiff.”

In addition, plaintiffs re-alleged a paragraph from another claim in their complaint “seek[ing] declaratory relief,” and plaintiffs asked for “such additional remedies, both legal and equitable, that the law provides and the Court deems just and proper.”

The city moved for partial summary judgment, arguing that ORS 243.303(2) did not require it to provide health insurance coverage to plaintiffs; alternatively, the city asserted that there is no civil remedy for a violation of ORS 243.303.

The circuit court denied the city's motion, explaining that,

“[a]lthough the issue is not free of doubt, the court finds that upon application of the standards set forth in Miller v. City of Portland, 288 Or. 271, 276–78, 604 P.2d 1261 (1980) and Scovill v. City of Astoria, 324 Or. 159, 165–69, 921 P.2d 1312 (1996), ORS 243.303 does provide plaintiffs with a private right of action * * *. The evidence is undisputed that the statute was amended more than 20–years ago to change the language about how municipalities treat their retirees with respect to health care insurance from a permissive ‘may’ to the directive ‘shall,’ and that the change was made despite widespread objection that it would ‘force’ local government action. A private right of action is necessary to effectuate the legislature's intent.”

The circuit court did not elaborate on the nature of the “private right of action” that it believed was necessary to effectuate the intent of the legislature in enacting ORS 243.303(2) or determine whether the city had breached a tort standard of conduct in failing to provide insurance coverage to retirees. The circuit court rejected the city's argument that, because providing insurance coverage to retirees was prohibitive in light of its cost, it had not violated the statute. The court explained that “[the city] ha[s] not presented the court with undisputed evidence that no entity providing health care insurance was (and is) willing to provide such coverage for both current and retired employees” and that, because the text of ORS 243.303(2) did not provide an exception to the statutory duty based on the cost of coverage, the court could not rely on increased cost as “indicating impossibility.”

Based on the same reasoning, the circuit court subsequently granted plaintiffs' motion for partial summary judgment contending that the city violated ORS 243.303(2). The parties then tried to a jury the issue of what damages plaintiffs had suffered as a result of the city's violation of ORS 243.303(2). At the close of the evidence, the circuit court instructed the jury that

“plaintiffs Ronald Doyle and Ben Miller allege claims for a statutory tort. To establish a statutory tort, each plaintiff must show first that the defendant violated an Oregon statute and second, that the violation of statute caused the plaintiffs damages.

“In this case the court has already determined that defendant violated this statute by failing to provide plaintiffs Doyle and Miller the choice to continue group health insurance coverage.

“On the claim for violation of statute, the only issue for you to decide are whether the violation of statute caused Plaintiff Doyle and Plaintiff Miller damages and if so, the amount of such damages.”

The court further instructed the jury that noneconomic damages could be based on “emotional distress that the plaintiff has sustained from the time he was injured until the present and that the plaintiff probably will sustain in the future[,] * * * any inconvenience and interference with the plaintiff's normal and usual activities,” and “any other subjective non-monetary losses,” not to exceed the amount of $500,000. The jury awarded $61,142 in economic damages and $50,000 in noneconomic damages to Doyle, and $29,866 in economic damages and $50,000 in noneconomic damages to Miller.

Plaintiffs and the city appealed the ensuing judgment.⁴ Relying in part on this court's decision in Scovill v. City of Astoria, 324 Or. 159, 921 P.2d 1312 (1996), the Court of Appeals reversed, concluding that the circuit court had erred in granting plaintiffs' motion for partial summary judgment; the...