Eckles v. State

• Decision Date: 29 September 1988
• Citation: 306 Or. 380,760 P.2d 846
• Parties: Frank R. ECKLES, dba Riverview Marina, Petitioner on Review, v. STATE of Oregon, William Rutherford, Treasurer of State of Oregon, and Oregon Department of Revenue and its Director, Richard Munn, Respondents on Review. TC 143089; CA A35776; SC S32710.
• Court: Oregon Supreme Court

Page 846

760 P.2d 846

306 Or. 380

Frank R. ECKLES, dba Riverview Marina, Petitioner on Review, v. STATE of Oregon, William Rutherford, Treasurer of State of

Oregon, and Oregon Department of Revenue and its

Director, Richard Munn, Respondents on Review.

TC 143089; CA A35776; SC S32710.

Supreme Court of Oregon,

In Banc.

Argued and Submitted Sept. 2, 1986.

Reassigned March 16, 1988.

Decided Aug. 4, 1988.

Reconsideration Denied Sept. 29, 1988.

Robert Mix, Corvallis, argued the cause and filed the petition for petitioner on review.

William F. Gary, Deputy Atty. Gen., Salem, argued the cause for respondents on review.

LENT, Justice.

At issue is the constitutionality of a legislative act that, inter alia, directed the State Treasurer to transfer $81 million from the Industrial Accident Fund (IAF) to the General Fund. Or. Laws 1982 (Special Session 3), ch. 2 (hereinafter the "Transfer Act"). We hold that the transfer breached a contract of the state, for which the state may be liable in a breach of contract action, but did not violate the state or federal constitutions. We also hold that section four of the Transfer Act, insofar as it retroactively amended ORS 656.634, violated Article I, section 21, of the Oregon Constitution. ¹

I.

The IAF is a statutory "trust fund exclusively for the uses and purposes declared in ORS 656.001 to 656.794," which relate to workers' compensation. ORS 656.634(1). Funds received by the State Accident Insurance Fund Corporation (SAIF) become part of the IAF, and the IAF is, in turn, the source for payments made by SAIF. ORS 656.632(2)-(3). SAIF, an "independent public corporation" governed by a board of directors appointed by the Governor, provides workers' compensation insurance to employers, who may also self-insure or insure with a private insurer. See ORS 656.407(1), 656.751(1), 656.752.

In September 1982, a special session of the Legislative Assembly determined that the IAF had a "surplus" of over $168 million. Or. Laws 1982 (Special Session 3), ch. 2, § 1(3). Facing the prospect of a state budget deficit, see id. § 1(10), the Legislative Assembly directed the State Treasurer to transfer $81 million of the IAF surplus to the General Fund on June 30, 1983. Id. § 2. The Treasurer transferred the funds on the appointed date.

Plaintiff, an employer insured by SAIF, thereafter brought this action for declaratory, injunctive and other relief. ² Principally, he sought a declaration that the Transfer Act was "null and void and unconstitutional" and a "mandatory injunction directing the defendants to forthwith pay into the [IAF] a sum equal to all losses" suffered by the IAF because of the transfer. ³ The state, in its answer to the complaint and in a motion for summary judgment, challenged plaintiff's "standing" to seek this relief. The circuit court denied the state's motion but, following a trial to the court, "dismissed" the complaint and entered judgment for defendants. In a letter opinion explaining the decision, the trial judge stated, "I find that Plaintiff has failed to establish any basis to invalidate the Transfer Act and that Plaintiff has no standing herein to do so." The Court of Appeals affirmed without opinion.

II.

Before we address the issue of plaintiff's "standing," two distinct concepts of "standing" must be distinguished. Ordinarily, "standing" means the right to obtain an adjudication. It is thus logically considered prior to consideration of the merits of a claim. To say that a plaintiff has "no standing" is to say that the plaintiff has no right to have a tribunal decide a claim under the law defining the requested relief, regardless whether another plaintiff has any such right. When this court has used the term "standing," the term has for the most part been used in this sense. See, e.g., Lipscomb v. State Bd. of Higher Ed., 305 Or. 472, 475-76, 753 P.2d 939 (1988); iState v. Tanner, 304 Or. 312, 316, 745 P.2d 757 (1987). ⁴ We will so use the term in this opinion.

In contrast, "standing" is also sometimes used to refer to the existence of a substantive personal right. Used in this sense, "standing" is concerned with the merits of a claim. To say that a plaintiff has "no standing" is to say that no right of the plaintiff was violated, regardless whether the conduct of a defendant was in general unlawful or unlawful as to some other person. This use of "standing" should be avoided because it easily confuses the right to obtain an adjudication of a claim for relief with the right to obtain the relief itself.

One other source of confusion is the habit of treating standing as if it were a generic concept unrelated to the specific legal relief requested by a party. This court has noted on more than one occasion that whether a person is entitled to seek judicial relief depends upon the type of relief sought and commonly is governed by a specific statutory standard. E.g., Benton County v. Friends of Benton County, 294 Or. 79, 82-84, 653 P.2d 1249 (1982). A person with standing to seek one type of relief will not necessarily have standing to seek any other type of relief. Because plaintiff sought declaratory and injunctive relief, we must decide the issue of his standing by looking to the specific statutes and cases governing his right to seek these types of relief. ⁵

Plaintiff demanded a judgment "[d]eclaring the [Transfer] Act * * * null and void and unconstitutional." ⁶ ORS 28.020 provides "Any person * * * whose rights, status or other legal relations are affected by a constitution, statute, municipal charter, ordinance, contract or franchise may have determined any question of construction or validity arising under any such * * * constitution, statute, municipal charter, ordinance, contract or franchise and obtain a declaration of rights, status or other legal relations thereunder."

The statute's reference to an effect on "rights, status or other legal relations" requires a plaintiff seeking declaratory relief to allege "some injury or other impact on a legally recognized interest beyond an abstract interest in the correct application or the validity of a law." Budget Rent-A-Car v. Multnomah Co., 287 Or. 93, 95, 597 P.2d 1232 (1979). The interest perhaps most often recognized as sufficient for standing under ORS 28.020 is a present or foreseeable financial interest, such as that of a taxpayer, e.g., Lipscomb v. State Bd. of Higher Ed., supra, but many other interests have been recognized as well, including the interests of voters, e.g., Webb v. Clatsop Co. School Dist. 3, 188 Or. 324, 331, 215 P.2d 368 (1950), and of users of a road, e.g., Rendler v. Lincoln Co., 302 Or. 177, 182, 728 P.2d 21 (1986). On the other hand, a taxpayer who alleged only an interest in the proper expenditure of public funds without alleging that the challenged government action would have an effect on his taxes was held to have no standing, Gruber v. Lincoln Hospital District, 285 Or. 3, 8, 588 P.2d 1281 (1979), and parents whose son had been murdered had no standing to obtain a declaration setting forth limits on the Governor's power to commute the death sentence of their child's murderer, Eacret et ux v. Holmes, 215 Or. 121, 124-25, 333 P.2d 741 (1958).

Plaintiff alleges that he is insured by SAIF and that the transfer of funds from the IAF will deprive him of various "property rights" in the IAF, which he identifies as "ownership rights," the "right to be insured," the "right to receive dividends" and the "right to have * * * premiums reduced by application of surplus funds." He also alleges that the transfer will impair his insurance contract with SAIF, which he asserts includes statutes in existence when the Transfer Act took effect. Whatever else may be included in the phrase "rights, status or other legal relations" in ORS 28.020, the phrase certainly includes property and contract rights. The state argues that plaintiff in fact has no "vested rights" in the IAF and that the transfer did not impair his contract with SAIF, but those are arguments addressed to the merits of plaintiff's claims. That he has alleged that the transfer of funds from the IAF affected those rights is sufficient to establish his standing under ORS 28.020.

The analysis of plaintiff's standing to seek injunctive relief is much the same, although there is no governing statute. This court has held that standing to enjoin a governmental action requires an allegation that the challenged action injures the plaintiff in some special sense that goes beyond the injury the plaintiff would expect as a member of the general public. See, e.g., Holland et al. v. Grant County et al., 208 Or. 50, 54-55, 298 P.2d 832 (1956); Fields v. Wilson, 186 Or. 491, 496-98, 207 P.2d 153 (1949); cf. Budget Rent-A-Car v. Multnomah Co., supra, 287 Or. at 95, 597 P.2d 1232. Plaintiff's allegations meet this standard because he has alleged legally cognizable injuries that he allegedly suffers as an employer insured with SAIF and not simply as a member of the public who is interested in seeing that the law is obeyed.

III.

Plaintiff challenges the validity of the Transfer Act on a number of state and federal grounds. We must first address the state grounds. State v. Kennedy, 295 Or. 260, 262, 666 P.2d 1316 (1983).

Plaintiff's first claim is that the Transfer Act is "illegal" because the IAF is a "trust fund" that may not be used for General Fund purposes. The IAF, though denominated a "trust fund" in ORS 656.634(1), is nonetheless a statutory "trust fund." ORS 656.632(1); cf. Or. Const., Art. VIII, § 2 (establishing a "Common School Fund"). Within constitutional limitations, the legislature may dispose of the assets of a statutory fund in any manner that it sees fit. ⁷ We therefore turn to plaintiff's constitutional arguments.

Article I, section 20, of the Oregon Constitution forbids granting "to any citizen or class of citizens privileges, or immunities, which, upon the same terms, shall not equally belong to all...