Oregon Supreme Court Strikes Down $500,000 Non-Economic Damages Cap for Personal Injury Claims as Unconstitutional

On July 9, 2020, the Oregon Supreme Court issued its Opinion in Busch v. McInnis Waste Sys., Inc., Case No. SC S066098. Five of the seven justices representing the majority held that the $500,000 cap on non-economic damages for personal injury claims was unconstitutional under the Remedy Clause of Article I, Section 10 of the Oregon Constitution. This cap on damages was enacted in its current form in 1987 and is found at ORS 31.710(1). The statute provides:
Except for claims subject to ORS 30.260 to 30.300 [Actions against Public Entities] and ORS chapter 656 [Worker’s Compensation], in any civil action seeking damages arising out of bodily injury, including emotional injury or distress, death or property damage of any one person including claims for loss of care, comfort, companionship and society and loss of consortium, the amount awarded for non-economic damages shall not exceed $500,000.

In Busch, the plaintiff filed suit to seek personal injury damages against a private garbage company after he was run over by a garbage truck while a pedestrian in a crosswalk in downtown Portland. The plaintiff eventually underwent an amputation above-the-knee due to his injuries. Liability was admitted prior to trial. The jury awarded the plaintiff $10,500,000 in non-economic damages. However, the trial court reduced the non-economic damages awarded by the jury to $500,000 due to the application of ORS 31.710(1). The Court of Appeals reversed and review was accepted by the Supreme Court.

The Court’s decision in Busch follows a long line of cases addressing the constitutionality of statutory damages caps. These challenges are based on the Remedy Clause, which provides “every man shall have remedy by due course of law for injury done him in his person, property, or reputation.” In Busch, the Court confirmed that the new framework for analyzing the constitutional issues raised by all statutory damages caps was set forth in Horton v. OHSU, 359 Or 168 (2016). This new framework looks at the purpose and mechanics of the statutory scheme including the damages cap and whether a substantial remedy remained in general and as applied to the plaintiff. In Horton, the Court upheld the damages cap set forth in the Oregon Tort Claims Act, which applies to civil actions against public entities (and their employees). The Busch court used the analytical framework in Horton to distinguish the cases and strike down the damages cap proscribed in ORS 31.710(1) as applied to personal injury claims. The primary distinguishing point between the two caps is that the Oregon Tort Claims Act provided tort remedies against the State which did not exist before the Act due to sovereign immunity.

With the addition of the Busch decision, there is now more certainty regarding the application of statutory damages caps in Oregon. This is especially true in straight-forward personal injury claims involving private parties. However, because there is no bright-line rule, there remains the potential for uncertainty in other contexts.

Based on this new decision, we anticipate a significant increase in claim activity and exposures in Oregon. Lether Law Group has a number of highly experienced attorneys licensed to practice in Oregon courts. This includes shareholders Tom Lether, Eric Neal and Westin McLean. If you have any questions regarding the application of Oregon law on pending claims in that jurisdiction, please feel free to contact our offices.

FRCP 26 AMENDMENTS AND THE EFFECTS ON INSTITUTIONAL DISCOVERY

The December 1, 2015 amendments to FRCP 26 focus largely on the proportionality of discovery by expressly outlining factors to be weighed in determining the proper scope of discovery, including the “importance of the issues at stake in the action, the amount in controversy, the parties’ relative access to relevant information, the parties’ resources, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit.”

While courts have long considered the burden created by discovery requests, these amendments affirm the growing importance of proportionality. The Advisory Committee which proposed the changes appears to have been motivated to curb the high costs of discovery, especially those presented due to the increasing role and utilization of electronically-stored information. To that end, FRCP 26(c)(1)(B) was also amended to expressly grant the court’s the authority to make orders regarding allocation of discovery expenses in ruling on protective order motions. The commentary which accompanied the amendments further indicates the motivation of the Advisory Committee, stating:

The burden or expense of proposed discovery should be determined in a realistic way. This includes the burden or expense of producing electronically stored information. Computer-based methods of searching such information continue to develop, particularly for cases involving large volumes of electronically stored information. Courts and parties should be willing to consider the opportunities for reducing the burden or expense of discovery as reliable means of searching electronically stored information become available.

These high costs are particularly felt by institutional parties as they are more likely to have voluminous records and data subject to discovery. The amendments to FRCP 26 make the burden of preparing and producing discovery, and the potentially large amount of information, a primary consideration in determining how to proceed with discovery in a given case. They should also provide ammunition for institutional parties to fight back against opposing attorneys who seek to obtain leverage through overly abusive and costly discovery tactics. Until attorneys fully buy-in to the changes, we expect the amendments to FRCP 26 will result in a temporary increase in protective order motion practice initiated by parties seeking to avoid the burdens and abuses meant to be reduced by this new rule.