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The Oregon Constitutional Law Newsletter THE OREGON CONSTITUTIONAL LAW NEWSLETTER Published by the Constitutional Law Section of the Oregon State Bar (Summer 2014) Table of Contents __________________________________________ Mark Friel, The Constitutionality of Statutory Penalty Awards……………….……....2 C. Robert Steringer and Brett Applegate, When Stranahan Doesn’t Get You Where You Need to Go - Advocating for New Approaches to Interpreting the Oregon Constitution………………………………………………………………………….…...5 Linda Kruschke, OSB Legal Publications Wins Legal Title Award………………..….8 Chuck Tauman, American Constitution Society-Oregon Lawyer Chapter Annual Dinner (Hans A. Linde Award)……………………………………………………….....9 David Schuman, Book Review, American Epic: Reading the US Constitution, by Garrett Epps………………………………………………………………………….10 P.K. Runkles-Pearson, Wood v. Moss……..…………………………...………………11 Alycia Sykora, The Oregon Constitution and Cases in 2014………………………….14 Opinions expressed in this newsletter are each author’s alone. Alycia Sykora, Editor December 5, 2014 Annual Constitutional Law CLE The Constitutional Law Section’s annual CLE will be held on December 5, 2014, beginning at 9:00 a.m. in Portland. Steve Shapiro, Legal Director of the ACLU in New York, will open the CLE with a United States Supreme Court Review and Preview. Georgetown Law Professor Nicholas Rosenkranz, who also co-chairs the Board of Visitors of the Federalist Society, will continue the morning session. Oregon Supreme Court Justice Jack Landau and Oregon Court of Appeals Senior Judge David Schuman will present the annual Oregon Constitutional Law Update in the afternoon, and other speakers will join the afternoon segments. Contact Erin Snyder for further information: [email protected]. THE OREGON CONSTITUTIONAL LAW NEWSLETTER (Summer 2014) Page 1 The Constitutionality of Statutory Penalty Awards Mark Friel Asked how a court in Oregon would decide threat of civil penalties—that govern our whether a jury’s punitive damages award is so economic lives. large as to violate a defendant’s due process rights Statutory Penalty Awards Are under the Fourteenth Amendment to the US Constitutional so Long as They Are Not 1 Constitution , and many trial lawyers would know Wholly Disproportioned to the Offense or that the guideposts of BMW of North America, Inc. Obviously Unreasonable v. Gore, 517 US 559, 116 S Ct 1589, 134 L Ed 2d 809 (1996) provide the starting point; some may In recent years, parties incurring liability for even be able to recite the guideposts by heart: the statutory penalties—particularly those imposed degree of reprehensibility; the disparity between without regard to or in the absence of harm— the harm or potential harm suffered and the have at times cited Gore in support of their punitive damages award; and the difference challenges to the size of the awards. While the between the punitive damages award and the civil Fourteenth Amendment certainly offers some penalties authorized or imposed in comparable protection against excessive statutory penalties, cases. Gore, 517 US at 574-75. Gore is not the place to look for guidance. But what if a defendant was slapped with a civil To find the appropriate test, courts must go back penalty the contours of which had been carefully almost a hundred years to a Supreme Court drawn by statute? Despite the early twentieth decision involving two sisters from Arkansas who century shift in US Supreme Court jurisprudence were overcharged $0.66 for their train tickets and away from heightened scrutiny of economic later awarded $75.00 each in statutory penalties. legislation, see, e.g., Ferguson v. Skrupa, 371 US 326, In the face of such stiff penalties for such a 83 S Ct 1028, 10 L Ed 2d 93 (1963), is it possible seemingly inconsequential infraction of state law, for a civil penalty to be too harsh, and impose the defendant in St. Louis, I.M. & S. Ry. Co. v. such a burden on the party found to be in Williams, 251 US 63, 67, 40 S Ct 71, 64 L Ed 139 violation, that the Due Process Clause offers (1919), objected to the statutory penalties, protection? And, if there is an outer limit on claiming that the awards violated its due process penalties imposed by legislatures, how is a court rights. In response, the Court first explained that to know if that constitutional barrier has been a statutory penalty need not be “confined or breached? Finally, does it matter if the penalties proportioned to [one’s] loss or damages; for, as it are aggregated as part of a class action? These are is imposed as a punishment for the violation of a no small questions, considering the myriad rules, public law, the Legislature may adjust its amount regulations and statutes—many of which carry the to the public wrong rather than the private injury, just as if it were going to the state.” Williams, 251 US at 66. Rather, a legislatively-enacted penalty violates due process only where “the penalty 1 The Oregon Constitution does not contain a due process clause like that in the Fourteenth Amendment. prescribed is so severe and oppressive as to be Seattle-First Nat’l Bank v. Umatilla County, 77 Or App wholly disproportioned to the offense and 284, 286 n 2, 713 P2d 33 (1986). As such, due process obviously unreasonable.” Id., at 66-67. challenges to state action are analyzed as a matter of federal law, id., and are therefore governed by After observing that the overcharge penalty was decisions of the US Supreme Court. Schwalb v. Hendy “necessary that deviation from [lawfully Int’l Co., 48 Or App 425, 427, 617 P2d 290 (1980). THE OREGON CONSTITUTIONAL LAW NEWSLETTER (Summer 2014) Page 2 prescribed] rates be discouraged and prohibited the magnitude of the sanction that by adequate liabilities and penalties,” id. at 67, the Alabama might impose for adhering to the Court held: nondisclosure policy adopted in 1983, lead us to the conclusion that the $2 million When the penalty is contrasted with the award against BMW is grossly excessive: overcharge possible in any instance it of the degree of reprehensibility of the course seems large, but, as we have said, nondisclosure; the disparity between the its validity is not to be tested in that way. harm or potential harm suffered by Dr. When it is considered with due regard for Gore and his punitive damages award; and the interests of the public, the numberless the difference between this remedy and opportunities for committing the offense, the civil penalties authorized or imposed and the need for securing uniform in comparable cases. Gore, 517 US at 574- adherence to established passenger rates, 75. we think it properly cannot be said to be so severe and oppressive as to be wholly The fundamental due process right highlighted by disproportioned to the offense or Gore and the Court’s subsequent decisions obviously unreasonable. Id., at 67. regarding punitive damages—fair notice of the conduct that will subject one to punishment and In other words, the Williams test looks to see of the severity of the penalty that a State may whether a penalty is obviously unreasonable, or impose—is not one that could typically be wholly disproportionate, in light of the public infringed by a statutory penalty award. See, e.g., interest and compliance concerns implicated by Capitol Records, 692 F3d at 907 (“This concern the statute in question. about fair notice does not apply to statutory damages, because those damages are identified as The US Supreme Court has never used Gore to constrained by the authorizing statute.”); Sony decide the constitutionality of a statutory penalties MBG Music, 719 F3d at 70 -71(stating the same); award, see, e.g., Capitol Records, Inc. v. Thomas-Rasset, Vanderbilt Mortg. and Finance, Inc. v. Flores, 692 F3d 692 F3d 899, 907 (8th Cir 2012) (so noting), and 358, 374 (5th Cir 2012) (finding Gore and State Sony BMG Music Entertainment v, Tenenbaum, 719 Farm inapplicable to the determination of the F3d 67, 70 (1st Cir 2013) (same), and arguments constitutionality of a penalty awarded under a in favor of its application are misplaced. Texas statute for filing a fraudulent lien which caused no actual damages, and observing that Gore involved the review of a judgment in which “[n]o such discretion or problem with notice is the plaintiff was awarded $4,000 in compensatory applicable here, because the $120,000 award was damages, and $4 million in punitive damages, for mandated by statute as a minimum penalty”). By the defendant’s fraudulent failure to disclose that definition, statutory penalties are promulgated the car it sold to the plaintiff had been repainted. pursuant to legislative enactments, written down Before launching into its analysis, the Court and publicly available. summarized its holding: In addition, the second Gore guidepost— Elementary notions of fairness enshrined addressing proportionality—captures a concept in our constitutional jurisprudence dictate entirely different from that expressed in Williams. that a person receive fair notice of the With punitive damages, lower courts “must conduct that will subject him to ensure that the measure of punishment is both punishment, but also of the severity of the reasonable and proportionate to the amount of penalty that a State may impose. Three harm to the plaintiff and to the general damages guideposts, each of which indicates that recovered.” State Farm Mut. Auto. Ins. Co. v. BMW did not receive adequate notice of Campbell, 538 US 408, 426, 123 S Ct 1513, 155 L THE OREGON CONSTITUTIONAL LAW NEWSLETTER (Summer 2014) Page 3 Ed 2d 585 (2003). In contrast, while a statutory Enabling Act, 28 USC § 2072(b)); Pearson v. Philip penalty may be large compared to actual harm, Morris, Inc., 257 Or App 106, 150, 306 P3d 665 “its validity is not to be tested in that way.” (2013) (citing Bernard v.
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