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Clarke v. Or. Health Scis. Univ. - 343 Or. 581, 175 P.3d 418 (2007)

Rule:

The Supreme Court of Oregon holds that: (1) the Oregon Health Sciences University ("OHSU") would have been entitled to sovereign immunity at common law and, therefore, a plaintiff would have had no common-law claim against OHSU that is entitled to protection under Or. Const. art. I, § 10; (2) because OHSU is entitled to sovereign immunity, the legislature can limit damages recoverable against OHSU to any amount it chooses, unfettered by Or. Const. art. I, § 10's, Remedy Clause; (3) however, the elimination of a cause of action against public employees or agents in Or. Rev. Stat. § 30.265(1), as applied to a plaintiff's claim against individual defendants, violates the Remedy Clause of Or. Const. art. I, § 10, because the substituted remedy against the public body, as specified in Or. Rev. Stat. § 30.270(1), is an emasculated version of the remedy that was available at common law.

Facts:

Plaintiff J.M.C., a minor, was born in Feb. 1998 at defendant Oregon Health Sciences University (OHSU) with a congenital heart defect. He was admitted to OHSU in May 1998 for the surgical repair of that condition. Following surgery, J.M.C. was placed in a surgical intensive care unit. While in that unit, J.M.C. suffered prolonged oxygen deprivation causing him permanent brain damage; he was totally and permanently disabled. J.M.C.'s brain damage was a direct result of the negligence of OHSU and certain of its employees and agents. In 2001, by his guardian ad litem, plaintiff Sari Clarke, J.M.C. filed a lawsuit in Oregon state court against OHSU, and the individual healthcare professionals who treated him. Pursuant to ORS § 30.265(1), defendants filed a motion to substitute OHSU as the sole defendant in the action. The trial court granted the motion. OHSU then filed a motion for judgment on the pleadings pursuant to ORCP 21 B, contending that the trial court should enter judgment in favor of J.M.C. and against OHSU in the amount of $ 200,000, OHSU's maximum liability under ORS § 30.270(1). The trial court granted OHSU's motion and entered judgment against OHSU in the amount of $ 200,000. J.M.C. appealed, challenging the substitution of OHSU for the individual defendants and arguing that the trial court's entry of judgment in the amount of $ 200,000 denied him the right to a remedy in violation of Article I, §10, of the Oregon Constitution. The Court of Appeals of Oregon rejected J.M.C.'s Article I, § 10 argument as to his claim against OHSU because, it concluded, OHSU would have been immune from liability at common law. The court of appeals, however, accepted J.M.C.'s Article I, § 10 argument with respect to the substitution of OHSU as the sole defendant. The court concluded that, as applied to J.M.C.'s case, ORS § 30.265(1) violated Article I, § 10. The court reversed the trial court's judgment and remanded with instructions to reinstate the claims against the individual defendants. Both J.M.C. and OHSU appealed.

Issue:

Did Or. Rev. Stat. §§ 30.265(1) and 30.270(1), as applied to facts of J.M.C.'s case, violate Or. Const. art. I, § 10?

Answer:

Yes.

Conclusion:

The state supreme court affirmed the court of appeals' decision, reversed the trial court's judgment and remanded the case to the trial court for further proceedings. The court ruled that OHSU would have enjoyed sovereign immunity at common law where its function, powers, and governance structure indicated that it was an instrumentality of the state performing state functions. The Oregon Tort Claims Act's 1991 elimination of a cause of action against the individual defendants, combined with its limitation of damages, did not survive scrutiny under Or. Const. art. I, § 10, where, at the time Oregon adopted its remedy guarantee, J.M.C. would have been entitled to seek and recover economic and noneconomic damages. The 1991 amendments to the statute eliminated that right by imposing capped remedies against the public body only. Although the legislature was authorized under Or. Const. art. I, § 10 to vary or modify the nature, form, or amount of recovery for a common-law remedy, it could not emasculate the common-law remedy.

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