EVERICE MORO; TERRI DOMENIGONI; CHARLES CUSTER; JOHN HAWKINS; MICHAEL ARKEN; EUGENE DITTER; JOHN O'KIEF; MICHAEL SMITH; LANE JOHNSON; GREG CLOUSER; BRANDON SILENCE; ALISON VICKERY; and JIN VOEK, Petitioners,
STATE OF OREGON; STATE OF OREGON, by and through the Department of Corrections; LINN COUNTY; CITY OF PORTLAND; CITY OF SALEM; TUALATIN VALLEY FIRE & RESCUE; ESTACADA SCHOOL DISTRICT; OREGON CITY SCHOOL DISTRICT; ONTARIO SCHOOL DISTRICT; BEAVERTON SCHOOL DISTRICT; WEST LINN SCHOOL DISTRICT; BEND SCHOOL DISTRICT; and PUBLIC EMPLOYEES RETIREMENT BOARD, Respondents, and LEAGUE OF OREGON CITIES; OREGON SCHOOL BOARDS ASSOCIATION; CENTRAL OREGON IRRIGATION DISTRICT; and ASSOCIATION OF OREGON COUNTIES, Intervenors WAYNE STANLEY JONES, Petitioner,
PUBLIC EMPLOYEES RETIREMENT BOARD; ELLEN ROSENBLUM, Attorney General; and JOHN A. KITZHABER, Governor, Respondents. MICHAEL D. REYNOLDS, Petitioner,
PUBLIC EMPLOYEES RETIREMENT BOARD, State of Oregon; and JOHN A. KITZHABER, Governor, State of Oregon, Respondents. GEORGE A. RIEMER, Petitioner,
STATE OF OREGON; OREGON GOVERNOR JOHN KITZHABER; OREGON ATTORNEY GENERAL ELLEN ROSENBLUM; OREGON PUBLIC EMPLOYEES RETIREMENT BOARD; and OREGON PUBLIC EMPLOYEES RETIREMENT SYSTEM, Respondents. GEORGE A. RIEMER, Petitioner,
STATE OF OREGON, OREGON GOVERNOR JOHN KITZHABER, OREGON ATTORNEY GENERAL ELLEN ROSENBLUM, PUBLIC EMPLOYEES RETIREMENT BOARD, and PUBLIC EMPLOYEES RETIREMENT SYSTEM, Respondents
On Intervenor Central Oregon Irrigation District's Motion to Disqualify Special Master and Motion to Disqualify Justices of the Supreme Court.
Intervenor Central Oregon Irrigation District's motions to disqualify the members of this court and the Special Master are denied.
Kristian Roggendorf, Lake Oswego, filed the motions and combined reply on behalf of Intervenor Central Oregon Irrigation District.
Anna M. Joyce, Solicitor General, Salem, filed the response on behalf of Respondents State of Oregon, Public Employees Retirement Board, Ellen Rosenblum, Public Employees Retirement System and John A. Kitzhaber. With her on the brief were Keith L. Kutler and Matthew J. Merritt, Assistant Attorneys General.
W. Michael Gillette, Portland, filed the notice joining in the State of Oregon's response on behalf of Intervenor League of Oregon Cities.
Harry Auerbach, Chief Deputy City Attorney, Portland, filed the response on behalf of Respondent City of Portland.
Gregory A. Hartman, Portland, filed the response on behalf of the Moro Petitioners, Petitioner Riemer, Petitioner Reynolds, and Petitioner Jones.
Before Balmer, Chief Justice, Kistler, Walters, Linder, Brewer, and Baldwin, Justices.[*]
[354 Or. 661] BALMER, C. J.
These cases challenge the constitutionality of Senate Bill (SB) 822, passed by the 2013 Legislative Assembly during its regular session, and SB 861, passed during a special session in October 2013, both of which change certain statutory provisions of the Public Employees Retirement System (PERS) and, in doing so, affect the retirement benefits of some current and former public employees. Central Oregon Irrigation District (the District), a public employer and
an intervenor in these proceedings, filed a motion to disqualify the sitting judges of the Oregon Supreme Court from hearing these cases. The District also filed a separate motion to disqualify the circuit judge appointed by this court to serve as a special master for purposes of conducting evidentiary proceedings and preparing recommended findings of fact. For the reasons that follow, we deny both motions.
The District's arguments in support of its motions to disqualify are based on statutory provisions, the Oregon Code of Judicial Conduct (Code), and constitutional principles. The District contends that participation by the judges of this court and the special master would violate ORS 14.210 and former Judicial Rule (JR) 2-106(A)(3) (2002) of the Code. ORS 14.275 provides in part that a party " may move to disqualify a judge of the Supreme Court * * * for one or more of the grounds specified in ORS 14.210, or upon the ground that the judge's participation in the cause would violate the Oregon Code of Judicial Conduct." ORS 14.210(1)(a) in turn provides in part that a " judge shall not act as judge if the judge is a party to or directly interested in the action, suit or proceeding." The substance of former JR 2-106(A)(3) (2002) now appears in Rule 3.10(A)(2)(c) and Rule 3.10(A)(3). That rule requires a judge to " disqualify himself or herself in any proceeding in which a reasonable person would question the judge's impartiality, including [when the judge] * * * has an interest that could be substantially affected by the proceeding; * * * [or when] [t]he judge knows that he or [354 Or. 662] she * * * has an economic interest in the subject matter in controversy * * *." The District argues that the members of the court have a direct and substantial economic interest in the outcome of these consolidated cases because they currently are members of the PERS system and their future retirement benefits may be affected by the outcome of this litigation. The District further asserts that it would violate the Due Process Clause of the Fourteenth Amendment to the United States Constitution for judges who have such an interest to decide these cases.
The District argues that the special master shares the disqualifying characteristic of the members of this court because, as a judge, he is a member of PERS and, once appointed special master, he " in fact becomes a 'member' of this court, albeit temporarily." Although we do not necessarily agree with the District's assertion that the special master " becomes" a member of this court, we acknowledge that the circuit court judge appointed as a special master is a member of PERS, and we will assume for purposes of this opinion that the same analysis regarding disqualification applies to him as to members of this court.
Other parties have responded to the District's motions, arguing variously that any economic interest of the members of this court in the outcome of this case is speculative and perhaps de minimis ; that the legislature's decision to confer jurisdiction on this court to decide challenges to SB 822 and SB 861 trumps any conflicting statutes or rules; that the " rule of necessity" permits this court to decide these cases, notwithstanding any potential disqualification; and [354 Or. 663] that this court's adjudication of the challenges to SB 822 does not violate any due process right of the District.
Before turning to the substance of the District's motions, we note that the initial petitions filed in these cases challenged SB 822, a bill passed during the 2013 legislative session that modifies the cost-of-living adjustment provisions of the PERS statutes and changes a provision that relates to taxes paid by out-of-state PERS retirees. During a special session in October 2013, the legislature passed two additional bills that make changes to PERS. One of the new bills, SB 861, further modifies the cost-of-living adjustment provisions that had been addressed in SB 822. The other bill, SB 862, makes several changes to the PERS statutes, including: limiting one component of the " final average salary" that is used to calculate retirement benefits for some PERS retirees; allowing certain creditors to execute on certain PERS benefits of convicted felons; and modifying the PERS options available to legislators. Both SB 861 and SB 862 contain judicial review provisions identical to those included in SB 822. More specifically, they provide for legal challenges to the measures to be filed directly with this court, for public employers to intervene, and for this court to appoint a special master to take evidence and prepare recommended findings of fact. SB 861, § 11; SB 862, § 15. One petitioner filed a new petition and the other petitioners filed amended petitions raising the same challenges to SB 861 that they had raised to SB 822. This court issued an order consolidating those petitions with the pending challenges to SB 822 for purposes of decision. No party challenges SB 862, and we do not discuss that law further.
Because the potential grounds for disqualification that the District raises as to SB 822 also arise under SB 861, we will treat the District's motion as applying to this court's adjudication of challenges to that law as well. We will refer to the two laws, collectively, as " the 2013 PERS legislation," except when separately discussing one or the other.
As noted, certain parties that have responded to the District's motions argue that any interest that judges on this court have in the outcome of these cases is speculative and de minimis. They point out that the provisions of SB 822 [354 Or. 664] relate to cost-of-living adjustments and out-of-state taxes for persons who are PERS retirees and that the members of this court are not now PERS retirees and, for a variety of reasons, might never become PERS retirees. Additionally, they note that the cost of living in the future may fall, rather than rise, rendering the prospect of future cost-of-living increases for PERS beneficiaries -- and the effect of the 2013 PERS legislation on those possible increases -- speculative. On the other hand, as the District argues, the value of the potential PERS benefits to active members of PERS, including members of this court, obviously is affected by changes to the cost-of-living adjustment provisions of the PERS statutes. For purposes of this opinion, however, we need not resolve that issue. We will assume that the potential, future impact on members of this court of the changes to PERS made by the 2013 PERS legislation -- although uncertain and perhaps speculative at this time -- constitutes the kind of " interest" and " economic interest" referred to in ORS 14.210 and Rule 3.10(A)(2)(c) and Rule 3.10(A)(3) of the Code.
We turn to the District's argument that the judges of this court should be disqualified because each member of the court is " directly interested" in this proceeding, and, therefore, under ORS 14.210(1)(a), " shall not act as judge" in the proceeding. That argument is unavailing, because the legislature has specifically conferred jurisdiction on t ...