The Limits of the Tort Claim Act

Howell v. Boyle and the City of Beaverton, filed by the Oregon Supreme Court March 14, 2013

The Oregon Supreme Court found the Oregon Tort Claim Act’s liability limit to be constitutional, so long as the limits allow a substantial remedy and it does not leave a plaintiff wholly without remedy.  The opinion answered certified questions of law from the United States Court of Appeals for the Ninth Circuit (Ninth Circuit).

Background of Issue

The Howell case revisits an issue that the Oregon courts have addressed numerous times since 1901 - the constitutionality and adequacy of monetary recovery limits for injuries caused by actions or omissions of public bodies or their employees.  This particular case addresses the constitutionality of the claim limits found in the Oregon Tort Claims Act (OTCA), which waives local government’s sovereign immunity to the degree that a tort victim can recover damages up to a specified amount.

Discussion of Court Decision

In 2007, A Beaverton police officer struck plaintiff Jean Marie Howell (Howell) when she darted across Tualatin Valley Highway at an unmarked crosswalk late at night, wearing dark clothes.  Howell sued the officer, Christopher David Boyle and the City of Beaverton (City) alleging over $4 million in economic damages and $1 million on noneconomic damages.  The trial court jury found Howell and Boyle each to be 50 percent at fault and reduced the economic damages to $765,000 and noneconomic damages to $250,000.  Accordingly, the City was liable for $382,500 in economic and $125,000 noneconomic damages for a total of $507,500.  The City moved to amend the judgment to reduce the amount of damages to the $200,000 statutory limit then in effect under the OTCA.  The defendant’s motion was denied based on Howell’s argument that the OTCA limits “emasculated” the plaintiff’s common-law remedy against the defendants in violation of the remedy clause of Article 1, Section 10 of the Oregon Constitution.

The remedy clause of Article 1, Section 10 provides that “every man shall have remedy by due course of law for injury done him in his person, property or reputation.”

On appeal to the Ninth Circuit, defendants argued that Article 1, Section 10 does not apply because at common-law the plaintiff would not recover anything at the time the Constitution was framed because any of the plaintiff’s contributory negligence was a complete bar to recover; further, even if Article 1, Section 10 applies the $200,000 OTCA cap is a constitutionally adequate remedy as evidenced by recent case law.

In brief, the Ninth Circuit certified two questions to the Oregon Supreme Court (Court): 1) Is plaintiff’s negligence action constitutionally protected under Article 1, Section 10 of the state constitution and 2) If protected, is $200,000 an unconstitutional “emasculated” remedy?

In response, the Court only addressed the second question because that answer was dispositive.   After tracing a long line of similar tort claim limit cases, the Court found that Article 1, Section 10 is not violated merely because a statutory limitation reduced the amount a plaintiff would recover had the wrongdoer not been a public entity.  Article 1, Section 10 does not prevent legislation that varies or modifies the form and measure of recovery for an injury so long as the plaintiff still has a “substantial[1]” remedy and they are not wholly with remedy.

In several previous cases, the Court had found remedies to be inadequate. For example, In Clarke v. OHSU, a plaintiff suffered more than $17 million in damages after a negligently performed brain surgery. The Court found that the $200,000 OTCA remedy was inadequate as it represented a very small fraction (1%) of the plaintiff’s actual damages.

The Court found the Howell case more akin to Hale v. City of Portland where the plaintiff sued the City of Portland alleging, in part, that the City had negligently maintained a road causing his accident.  In Hale, the $100,000 limit in effect at the time was adequate where the plaintiff’s damages were more than $600,000 leaving the plaintiff with a substantial remedy.  Here, Howell would have recovered $507,500 but for the $200,000 OTCA limit. The Court determined that while $200,000 does not make the plaintiff whole, it is still substantial and does not create a constitutionally inadequate remedy under Article 1, Section 10.

Impact for Local Governments

The Howell case reiterates for local governments and other public bodies the premise that limits on tort liability, specifically those in the OTCA, are permissible under the state constitution so long as they are adequate.  While there is no hard and fast rule setting an adequate damage level, cases where the damage is greater - - similar to the Clarke case - - will likely lead to bigger payouts for local governments versus situations where the actual damages are much closer to the tort limit set by the legislature as was the case here.

It is important that cities work closely with their insurance carrier to ensure their insurance limits are appropriate.  Cities should also require their contractors to maintain the appropriate comprehensive general liability including bodily injury and property damage, auto, workers’ compensation and professional liability insurance policies also set at appropriate levels.  Taking these steps up front will ensure that even if a City is subject to a high damage tort claim, it will be prepared and sufficiently protected.

[1]The Court preferred the use of the word “substantial” over “emasculated” given the latter word’s “sexist” undertones and discouraged its use further in describing remedies.