Linn Cnty. v. Brown
| Decision Date | 23 April 2020 |
| Docket Number | CC 16CV17209 (SC S066856) |
| Citation | 461 P.3d 966,366 Or. 334 |
| Parties | LINN COUNTY, Douglas County, and Yamhill County, each a local government of the State of Oregon, Petitioners on Review, and Jefferson County et al., Plaintiffs, v. Kate BROWN, in her official capacity as Governor of the State of Oregon; and Val Hoyle, in her official capacity as Commissioner of the Oregon Bureau of Labor and Industries, Respondents on Review. |
| Court | Oregon Supreme Court |
Sharon A. Rudnick, Harrang Long Gary Rudnick PC., Portland, argued the cause and filed the briefs for petitioners on review. Also on the briefs were Susan Marmaduke, Portland, and William F. Gary, Portland.
Michael A. Casper, Assistant Attorney General, Salem, argued the cause and filed the brief for respondents on review. Also on the brief were Ellen Rosenblum, Attorney General, and Benjamin Gutman, Solicitor General.
Steven C. Berman, Stoll Stoll Berne Lokting & Shlachter PC, Portland, filed the brief for amicus curiae Family Forward Oregon.
Ross M. Williamson, Local Government Law Group PC, Eugene, filed the brief for amici curiae Association of Oregon Counties, League of Oregon Cities, and Special Districts Association of Oregon.
This case requires us to decide whether three counties are exempt from the requirements of Oregon’s paid sick leave law under the unfunded programs provision of the Oregon Constitution, Article XI, section 15. We conclude that the paid sick leave law does not require local governments to implement a "program" under that provision and, therefore, that the counties are not exempt from that statute.
We begin by describing the statute and the constitutional provision at issue here. Oregon’s paid sick leave law was enacted in 2015 and provides that "[e]mployers that employ at least 10 employees working anywhere in this state shall implement a sick time policy that allows an employee to accrue" a specified amount of paid sick time, depending on the total number of hours the employee works. ORS 653.606(1)(a). The statute defines "employer" to include both private and public employers—including counties, cities, and other public entities. ORS 653.601(2)(a)-(c). As relevant here, the paid sick leave law requires all employers with 10 or more employees to adopt policies and procedures for paid sick leave that meet minimum requirements set out in the statute.
Twenty years before the passage of the paid sick leave law, the voters passed Ballot Measure 30 (1996), which had been referred from the legislature as House Joint Resolution (HJR) 2 (1995). The enacted measure added a new provision, Article XI, section 15, to the Oregon Constitution. That provision requires the legislature to provide funding to local governments when it requires them to establish new "programs" (or to increase the level of services in existing required programs); if the legislature fails to provide funding, the affected local governments are exempt from the requirement of complying with the new program. As adopted, the measure included a sunset provision, but, in 2000, the voters passed Ballot Measure 84 (2000), another referral from the legislature, which repealed the sunset provision while retaining the rest of the original measure.
This case requires us to interpret Article XI, section 15, which provides:
"[W]hen the Legislative Assembly or any state agency requires any local government to establish a new program or provide an increased level of service for an existing program, the State of Oregon shall appropriate and allocate to the local government moneys sufficient to pay the ongoing, usual and reasonable costs of performing the mandated service or activity."
Or. Const., Art. XI, § 15 (1). A "program" is defined as "a program or project imposed by enactment of the Legislative Assembly or by rule or order of a state agency under which a local government must provide administrative, financial, social, health or other specified services to persons, government agencies or to the public generally." Id. at § 15 (2)(c).
If the legislature requires local governments to establish a "new program" or to provide an increased level of service for an existing program that will "require[ ] the expenditure of money by the local government," the "local government is not required to comply" with that requirement unless the legislature provides at least 95 percent of the cost that would be incurred by the local government. Id. at § 15 (3)(a). A different subsection provides that a local government is not required to comply with a newly imposed "program" if the local government would have to spend in excess of one-hundredth of one percent of its annual budget to implement the program, in addition to any amount appropriated by the legislature. Id. at § 15 (3)(b). That provision effectively sets a financial threshold for a local government to "refuse to comply" with a required program. Finally, the central provision of Article XI, section 15, which requires the state to fund local government compliance with new state "programs," does not apply to certain required expenditures, the most significant of which is "[a]ny law that is approved by three-fifths of the membership of each house of the Legislative Assembly." Id. at § 15 (7)(a).1
Article XI, section 15, also provides an exception for private businesses in certain circumstances. If a local government is exempt from compliance with a required program based on its cost and the lack of a state appropriation, then, "if a nongovernment entity competes with the local government by selling products or services that are similar to the products and services sold under the enterprise activity, the nongovernment entity is not required to comply with the state law or administrative rule or order relating to that enterprise activity." Id. at § 15 (8). An "enterprise activity" is defined as "a program under which a local government sells products or services in competition with a nongovernment entity." Id. at § 15(2)(a).
To summarize, Article XI, section 15, of the Oregon Constitution exempts local governments from being required to implement programs mandated by the state, if the state has not provided adequate funding and the cost of implementing the program exceeds a certain threshold. The question before us, then, is whether the paid sick leave law, ORS 653.601 to 653.661, requires local governments with more than 10 employees to implement a "program" under Article XI, section 15.
We turn to the facts of this case. The original plaintiffs in this action were nine Oregon counties2 that sought declaratory relief, alleging that the paid sick leave law required them to spend money on a program without sufficient state reimbursement, as required by Article XI, section 15, and that they consequently were not required to comply with that statute.3 Defendants, the governor and the Commissioner of the Bureau of Labor and Industries, responded that the constitutional provision does not apply to the paid sick leave law because that law is not a "program" within the meaning of Article XI, section 15(1), and, additionally, that not all nine plaintiff counties met the cost threshold required to make Article XI, section 15(3), applicable to them.
The parties filed cross-motions for summary judgment. The trial court initially granted plaintiffs’ motion, concluding that the paid sick leave law was an unfunded "program" within the meaning of Article XI, section 15. The court also denied defendants’ motion for summary judgment. On reconsideration, the trial court affirmed its ruling on the merits, but concluded that not all the plaintiffs had met the cost threshold that would permit them to refuse to comply with the paid sick leave law. The parties later stipulated that three of the nine counties—Linn, Douglas, and Yamhill—did meet the cost threshold and agreed that the claims of the other six counties should be dismissed in a limited judgment. The trial court therefore entered a general judgment in favor of Linn, Douglas, and Yamhill counties, excusing them from compliance with the paid sick leave law pursuant to Article XI, section 15(3).
Defendants appealed. They argued that the trial court erred in granting plaintiffs’ motion for summary judgment because the text, context, and legislative history of Article XI, section 15, demonstrate that a statutory policy requiring all employers—whether private or public—with a certain number of employees to provide certain employee benefits is not a "program" for purposes of that constitutional provision, and, therefore, that subsection 15(3)(a) does not exempt plaintiffs from complying with the paid sick leave law. In response, plaintiffs argued that the term "program" as used in Article XI, section 15, is not limited to traditional government programs, as the state’s argument suggested, and that the language of Article XI, section 15, as well its context and legislative history, support a broad, rather than a narrow, reading of the term.
The Court of Appeals reversed, concluding that " Article XI, section 15, addresses state enactments that require unfunded government programs to actively perform, provide, or deliver services to others." Linn County v. Brown , 297 Or. App. 330, 342, 443 P.3d 700 (2019) (emphasis in original). The court looked to existing statutory and constitutional frameworks, the voters’ pamphlet statements describing the relevant ballot measures, and the history of the legislative referral. Examining the use of the term "program" in other statutes and constitutional provisions, the court concluded that Article XI, section 15, "concerns what is traditionally understood as government programs, i.e. , the provision of public services to others." Id. at 344, 443 P.3d 700. The court also noted that much of the discussion surrounding the ballot measures involved the phrase "unfunded mandates," but that there was significant ...
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