Oregonians for Sound Econ. Policy v. Saif

JurisdictionOregon
PartiesOREGONIANS FOR SOUND ECONOMIC POLICY, INC., an Oregon nonprofit corporation, Plaintiff-Respondent, v. STATE ACCIDENT INSURANCE FUND CORPORATION, an independent public corporation, Defendant-Appellant.
Citation218 Or. App. 31,178 P.3d 286
Docket NumberA128735.,00C15769.
CourtOregon Court of Appeals
Decision Date13 February 2008

William F. Gary, Eugene, argued the cause for appellant. With him on the opening brief were C. Robert Steringer and Hardy Myers, Attorney General, Mary H. Williams, Solicitor General, Richard D. Wasserman, Attorney-in-Charge, Civil/Administrative Appeals Unit, and Kaye E. McDonald, Senior Assistant Attorney General. With them on the reply brief was Sharon A. Rudnick.

John DiLorenzo Jr., Portland, argued the cause for respondent. With him on the brief were Aaron K. Stuckey and Davis Wright Tremaine LLP.

Before LANDAU, Presiding Judge, and HASELTON and SCHUMAN, Judges.

LANDAU, P.J.

This case began as a declaratory judgment action in which plaintiff Oregonians for Sound Economic Policy, Inc. (OSEP), sought a declaration that it is entitled to certain documents that it requested from the State Accident Insurance Fund Corporation (SAIF). OSEP sought the documents pursuant to ORS 656.702(1), which provides that SAIF's records—other than employer account records and claimant files—are subject to public inspection. SAIF resisted disclosure of the requested documents on a variety of grounds. The trial court concluded that SAIF was obligated to disclose the documents. SAIF appealed. The trial court stayed enforcement of its judgment subject to the qualification that SAIF, in the meantime, conduct a "fair and faithful review" of the documents that were responsive to OSEP's request. We affirmed, and the Supreme Court denied review. Oregonians for Sound Economic Policy v. SAIF, 187 Or. App. 621, 69 P.3d 742, rev. den., 336 Or. 60, 77 P.3d 635 (2003).

By the time the case returned to the trial court, however, it had become known that SAIF had not conducted the required document review and that certain documents that were responsive to the original OSEP request had been destroyed. OSEP sought remedial sanctions against SAIF for contempt of court. After a hearing, the trial court concluded that SAIF indeed was in contempt of court and imposed a monetary sanction in the amount of $735,370, plus attorney fees and costs. The court also ordered SAIF to produce certain specific documents, subject to certain exceptions related to the statutory exception for employer account records.

SAIF appeals once again. SAIF now contends that the trial court erred in ordering it to pay any form of monetary sanction for its contempt of court. According to SAIF, it is shielded from any such monetary sanction because it is an instrumentality of the state and, as such, is protected by sovereign immunity. SAIF further contends that, even if it is not protected by sovereign immunity, the trial court's fine cannot be sustained because it is in the nature of a punitive fine, and OSEP requested only remedial sanctions. SAIF also argues that the trial court erred in ordering it to produce documents that it contends are subject to an exception for "employer account records."

We need not determine whether SAIF is an instrumentality of the state and thereby subject to sovereign immunity. We conclude that, even if SAIF is an instrumentality of the state, it nevertheless is subject to the inherent authority of the court to enforce its own orders, including by means of monetary sanctions. We further conclude, however, that SAIF is correct that the bulk of the monetary sanction that the court imposed is punitive in nature and that the trial court lacked authority to impose that portion. Finally, we conclude that the trial court did not err in applying the statutory exemption in ORS 656.702(1) for employer account records.

I. FACTUAL BACKGROUND

As we have noted, the backdrop for the current controversy is a records request by plaintiff OSEP to SAIF. The particulars are set out in our opinion concerning the applicability of the statute under which OSEP filed its request:

"On January 21, 2000, OSEP delivered a written request to SAIF to inspect various documents, including minutes of meetings of SAIF's board of directors, correspondence relating to declarations of dividends documents relating to any SAIF dividend policy, documents concerning circumstances in which dividends for policyholders exceed the premiums paid by policyholders, and other related documents. OSEP did not request any employer account records or claimant files.

"On January 24, SAIF responded that it was `duly processing' the request, but, because of the breadth of the request, it would require advance payment for copying expenses. SAIF also stated that it would not produce many of the requested documents because they are subject to exemptions from disclosure under the Public Records Law.

"The following day, OSEP replied that it was requesting the records pursuant to ORS 656.702(1) and that, therefore, the exemptions contained in the Public Records Law do not apply. There followed an exchange of letters reiterating the parties' positions concerning the applicability of certain exemptions contained in the Public Records law. SAIF ultimately invited OSEP to `complain to the Attorney General or to try to complain to a court.' In the meantime, SAIF stated that it did not intend to disclose documents that it considered subject to the claimed exemptions. As for the balance of the requested documents, SAIF explained that it would not comply until it received payment of more than $50,000 for expenses.

"OSEP petitioned the Attorney General for a determination whether its request had been lawfully denied. On May 11, 2000, the Attorney General issued a letter in response to the petition. The letter stated that SAIF had constructively denied OSEP's request for documents that SAIF considers to be exempt from disclosure, but that SAIF is generally entitled to rely on exemptions contained in the Public Records Law. In addition, the letter stated that the legal question whether SAIF is entitled to claim those exemptions is ripe for decision, but that the applicability of any particular exemption must await SAIF's more complete review of the requested documents."

Oregonians for Sound Economic Policy, 187 Or.App. at 624-25, 69 P.3d 742. OSEP then initiated its declaratory judgment action, seeking a declaration that it was entitled under ORS 656.702(1) to inspect the documents that it had requested. SAIF contended in response that the documents were exempt from disclosure under various provisions of the Public Records Law. The trial court granted summary judgment to OSEP, ruling that the exemptions on which SAIF relied were not applicable to OSEP's request under ORS 656.702(1).

SAIF appealed. Meanwhile, in June 2001, the trial court issued an order staying the judgment pending appeal. The court also ordered SAIF to conduct, during the pendency of the stay, a "full and fair review" of its records and to identify all documents responsive to OSEP's records request.

In May 2003, this court affirmed the trial court's determination that the ORS chapter 192 exemptions on which SAIF relied were not applicable and that only the exemption stated in ORS 656.702(1) for employer account records applies. 187 Or.App. at 640, 69 P.3d 742.

In 2004, when the case returned to the trial court, it became known that SAIF had not complied with the court's June 2001 order and that, in fact, some potentially significant documents had been destroyed. In June 2004, OSEP moved for an order finding SAIF in contempt of the June 2001 order, alleging that SAIF had violated the order by failing to conduct the required "full and fair review" of its records to determine whether the records sought are within the exemption of ORS 656.702(1), and by destroying or deleting certain records. OSEP sought sanctions against SAIF, including payment of a fine equal to one percent of SAIF's annual gross income for each day the contempt continued and payment of OSEP's attorney fees incurred in the contempt proceeding.

In August 2004, following an evidentiary hearing on OSEP's motion, the trial court issued a detailed letter opinion and order finding SAIF in contempt of its June 2001 order. The court detailed "problems with the rather casual methodology adopted by SAIF for identifying responsive documents as required by this Court's order," which the court characterized as "clearly negligent." The court went on to find that SAIF's conduct went beyond mere negligence, however. The court found that SAIF's senior management team in place at the time—in particular, then-President Katherine Keene and then-Vice President for Legal Affairs Harlan Jones—adopted a construction of OSEP's request that was not "a good faith interpretation of the extremely broad language of OSEP's request under any circumstances, for it was patently inconsistent with the language of the request." The court noted that the "wilfully narrowed construction" of the request was also "inconsistent with SAIF's own previously stated interpretation of OSEP's request at the time it applied" for the June 2001 stay order. In the meantime, the court found, Keene routinely deleted potentially significant email correspondence and simply did not conduct—or even delegate to others to conduct—a full and fair review of other documents as required by the order. The court found the conduct of Keene and Jones to be "willful and contemptuous" by clear and convincing evidence.

The trial court imposed a monetary fine as a sanction for the contempt. Because the amount of the fine is at issue in this appeal, we quote at some length the trial court's explanation for its calculation of the fine amount:

"At the outset of this proceeding, OSEP requested maximum sanctions for SAIF's alleged contempt of court. However, in his closing argument at the end of the...

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2 cases
  • State v. Tyler
    • United States
    • Oregon Court of Appeals
    • February 13, 2008
  • Oregonians for Sound Econ. Policy v. Saif
    • United States
    • Oregon Court of Appeals
    • April 16, 2008
    ...Plaintiff, Oregonians for Sound Economic Policy, Inc. (OSEP), seeks reconsideration of our decision, Oregonians for Sound Economic Policy v. SAIF, 218 Or.App. 31, 178 P.3d 286 (2008). The principal issue in that decision was the validity of the trial court's award of monetary sanctions and ......
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    • United States
    • Oregon Constitutional Law (OSBar) Chapter 12 Separation of Powers and the Oregon Constitution
    • Invalid date
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    • Oregon Constitutional Law (2022 ed.) (OSBar) Chapter 12 Separation of Powers
    • Invalid date
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    • United States
    • Oregon Civil Pleading and Litigation (OSBar) Chapter 23 Scope of Discovery and E Discovery
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