Oregon Department of Justice

Attorney General Hardy Myers today announced that the State of Oregon will join in an appeal from yesterday's Oregon Court of Appeals' decision holding unconstitutional part of a statute limiting the state's liability.  Although yesterday's ruling arose in a case involving Oregon Health and Sciences University (OHSU), the court's opinion could affect every state and local agency in Oregon.  The court struck down part of the Oregon Tort Claims Act.

"Many years ago, the Legislative Assembly balanced the necessity of preserving its funds from unlimited liability against the state's obligation to fairly compensate people who have been injured by the state's negligent conduct," Myers said.  "Yesterday's ruling upsets that balance, and we will join in this case to restore it."

The state is immune from liability for negligence, including the negligent acts of its employees.  The Legislature partially waived that immunity under the Oregon Tort Claims Act.  If an individual sues a state employee based on an action that was within the course and scope of his or her state employment, the Legislature authorized the state to substitute itself for the employee.  If the individual establishes negligence by the state or its employee, the individual can recover damages, but recovery is limited to between $100,000 and $500,000 per incident depending on the circumstances.

The Oregon Court of Appeals ruled that, in some instances, the substitution of the state for the state employee violates the Oregon Constitution.  If the individual establishes damages substantially greater than the amounts permitted by the state law, the individual must be permitted to pursue a separate claim against the state employee instead of litigating against only the state.  But, because state law may require the state to indemnify its employees for damages imposed as a result of lawsuits, damages awarded in excess of the statutory limitation may expose the state to unlimited liability.

If allowed to stand, the appellate ruling will have serious consequences for the state as an employer, for state employees, and for other public employers.