Category Archives: OTCA

Oregon Supreme Court Upholds Personal Injury Claims Cap

A helicopter releases fire-suppressant chemicals on a forest fire.

In Howell v. Boyle (March 14, 2013), the Oregon Supreme Court found that the Oregon Tort Claims Act (OTCA) limited plaintiff’s approximately $1 million in damages to $200,000 (the OTCA cap) and that the cap was not unconstitutional under article I, section 10 of the Oregon Constitution.

This case is significant because if the remedy clause of the Oregon Constitution, Article I, section 10, is at issue, personal injury defense attorneys can now argue that, under Howell, caps are constitutional and should be upheld as long as the plaintiff’s recovery is “substantial.”

In Howell, a city police officer struck the plaintiff with his vehicle at night in an unmarked crosswalk.  (Id. at 2.)  The jury awarded the plaintiff approximately $1 million, finding the plaintiff and the defendant each 50% at fault.  (Id. at 3.)  Accordingly, the court reduced the plaintiff’s damages by half. The defendants argued that the plaintiff’s award should be reduced further to comply with the OTCA cap of $200,000.  (Id. at 1.)  The trial court denied the defendants’ motion and held that the cap violated the remedy clause of Article I, section 10, of the Oregon Constitution.  (Id.)  Ultimately, however, the Oregon Supreme Court overturned the trial court’s ruling and upheld the cap.  (Id. at 2.)  The court reasoned that, even assuming that the plaintiff’s negligence claim was “constitutionally protected by Article I, section 10, the $200,000 limitation on her recovery is constitutionally permissible.”  (Id.)

Under Smothers v. Gresham Transfer, Inc., 332 Or 83, 124 (2001), the Oregon Supreme Court established a two-part formula for analyzing claims brought under the remedy clause: (1) Did the plaintiff allege an injury to one of the absolute rights protected by Article I, section 10?  In other words, when the constitution was drafted in 1857, could one file a claim for the alleged injury under Oregon common law?  If the answer is no, then the remedy clause is not at issue and the analysis is concluded.  Howell at 13.  However, if the answer is yes, “and if the legislature has abolished the common-law cause of action for injury to rights that are protected by the remedy clause,” then we move on to the second question.  Smothers, 332 Or at 124.  (2) Did the legislature provide a “constitutionally adequate substitute remedy for the common-law cause of action for that injury”?  (Id.)

In Smothers, for example, the court found that, because the plaintiff’s claim for employer negligence could have been brought under common law in 1857 and because the workers’ compensation statutes’ exclusive remedy provision completely eliminated such a claim, the statute was unconstitutional.  Id. at 136.

Determining whether a substitute remedy is constitutionally adequate is difficult.  However, under Smothers, the remedy cannot be “emasculated.”  Id. at 119.  Rather, it must be capable “of restoring the right that has been injured.”  Id.  In other words, the remedy must be “‘substantial.'”  Howell at 13 (quoting Smothers, 332 Or at 120 n 19).  Whether an award is “‘substantial’ requires ‘flexibility and a consideration of the facts and circumstances that each case presents.'”  Howell at 18 (quoting Hamlin v. Hampton Lumber Mills, Inc., 349 Or 526 (2011)).

The Oregon Supreme Court has concluded that damages limitations “are constitutionally inadequate in only two cases,” Neher v. Chartier, 319 Or 417 (1994) and Clarke v. OHSU, 343 Or 581 (2007).  Howell at 19.  In Neher, the court held that the remedy was inadequate because the parents of the victim were completely deprived of any remedy, while the estate benefitted from $3,000 in burial costs under the workers’ compensation law.  Howell at 19.  In Clarke, the court held that the plaintiffs were deprived “of all but one percent of the more than $17 million in damages that they would have otherwise recovered[.]”  Howell at 19.

The court distinguished Howell from Neher and Clarke because, in Howell, the plaintiff was not devoid of a remedy and the remedy was “far more substantial” than that in ClarkeHowell at 19.

The Howell court also recognized a quid pro quo at work in the OTCA cap because “the city remains liable for the torts of its employees committed within the scope of employment.”  Id. at 19-20.  And although there is a cap, the OTCA substitutes the “‘deep pocket'” of the city for the individual employees.  Id. at 20.  “Plaintiffs, in other words, have been conferred a substantial benefit in exchange for the damage limitation.”  Id.

The plaintiff argued that her right to be made whole was eliminated by the cap and that, under common law, the plaintiff had the right to obtain the full measure of damages.  Id. However, the court reiterated that, under Clarke, the legislature can “‘vary and modify both the form and the measure of recovery for an injury[.]'”  Howell at 21-22 (quoting Clarke, 343 Or at 606) (emphasis added in Howell).  The Howell court pointed out that there is no guarantee that plaintiff be given a “whole remedy,” rather that plaintiff not be left “‘wholly without remedy'”.  Id. at 22.

The dissent in Howell argued that a partial remedy, via the OTCA cap, was inadequate (i.e., emasculated) because, under the substitute remedy of the cap, the plaintiff was not wholly restored as required by the the text and context of the constitution.  Id. at 25.  However, the court’s majority pointed out that, under Smothers, “what must be ‘restored’ is an injury that would have been recognized as the basis for a cause of action in 1857.”   Howell at 26 (emphasis in original).  In 1857, negligence claims were subject to the contributory negligence doctrine, where any fault by the plaintiff would operate to completely bar the plaintiff’s claim.  Id.  The court found that, therefore, the $200,000 in damages that the plaintiff would receive under the cap was fully “‘restorative’ of her common-law negligence claim.”  Id. at 33.

Therefore, the court concluded, the cap does not “leave plaintiff with a constitutionally inadequate remedy under Article I, section 10, of the Oregon Constitution.”  Id. at 36.