324 P.3d 492
Or. Ct. App.2014Background
- Plaintiff, a retired City of Medford employee, sued the city and city manager seeking declaratory and injunctive relief after the city made group health insurance available to active employees but not to retirees in his class.
- Trial court granted plaintiff summary judgment under ORS 243.303(2), enjoined the city to offer retiring class members the option to purchase the same coverage, later found the city in contempt, and awarded attorney fees; the court also found for plaintiff on an age-discrimination claim (ORS 659A.030(1)(b)) under a disparate-impact theory.
- The Oregon Supreme Court previously construed ORS 243.303(2) in Doyle v. City of Medford, holding the statute creates an obligation to make active-employee coverage available to retirees “insofar as and to the extent possible,” but allows factual excuses where compliance would be unduly burdensome; the local government bears the burden to show such an excuse.
- On appeal, the city argued the trial court applied the wrong legal standard for ORS 243.303(2) (focusing only on whether insurers existed who would cover retirees and excluding cost/burden considerations), raised ERISA/collective-bargaining preemption theories (not preserved), and challenged the use of a disparate-impact theory at trial for the age-discrimination claim (not pleaded).
- The appellate court concluded the trial court applied the incorrect statutory standard (conflicting with Doyle II), reversed and remanded the ORS 243.303(2) limited judgment, dismissed appeal of the supplemental attorney-fee judgment as not appealable, affirmed the contempt finding, and reversed the age-discrimination judgment because disparate impact was not pleaded and the city did not consent to try that unpled theory.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether trial court properly granted summary judgment under ORS 243.303(2) | Bova: city failed to show any factual excuse; insurers willing to cover retirees existed, so city must offer coverage | City: statute allows local gov't discretion; if chosen provider does not cover retirees or cost makes it impractical, making coverage is not "possible" | Reversed and remanded — trial court applied wrong standard; Doyle II requires consideration of factual burdens and allows the city to show an excuse; remand for further proceedings |
| Whether court should be affirmed under correct standard despite error (right-for-the-wrong-reason) | Bova: even under Doyle II, city presented no factual excuse, so summary judgment should be affirmed | City: had not developed record under Doyle II standard and might have shown burden evidence | Court declined to affirm — because parties and court proceeded under wrong standard, city might have developed a different record; appellate court will not affirm on alternative basis |
| Whether ERISA (or collective-bargaining) preempts ORS 243.303 claims | Bova: ORS 243.303 provides relief; ERISA does not apply here | City: OTET/plan may be covered by ERISA or collective-bargaining agreements preempt state claim | Not considered on merits — city failed to preserve fact-based ERISA/CB arguments for this case; issue not preserved for appeal |
| Whether age-discrimination claim properly tried on disparate-impact theory not pleaded | Bova: age discrimination existed; court allowed disparate-impact evidence | City: disparate-impact theory was not pleaded and depends on different proof; city did not consent to try it | Reversed — trial court erred to permit trial on unpled disparate-impact theory; judgment for age discrimination reversed |
Key Cases Cited
- Doyle v. City of Medford, 347 Or. 564 (Or. 2010) (interpreting ORS 243.303(2) to impose an obligation to make active-employee coverage available to retirees "insofar as and to the extent possible," permitting factual excuses where compliance would be unduly burdensome)
- Doyle v. City of Medford, 256 Or. App. 625 (Or. App. 2013) (addressing trial-court errors including disparate-impact pleading issues and lack of private damages remedy under ORS 243.303)
- Doyle v. City of Medford, 606 F.3d 667 (9th Cir. 2010) (federal appeal applying certified-question process and rejecting due-process challenge after state-law construction)
- Outdoor Media Dimensions, Inc. v. State of Oregon, 331 Or. 634 (Or. 2001) (explaining when an appellate court may affirm a lower court for a different reason and the limits of the right-for-the-wrong-reason approach)
- White v. Vogt, 258 Or. App. 130 (Or. App. 2013) (holding a supplemental judgment entered before a general judgment is not appealable)