250 P.3d 371
Or. Ct. App.2011Background
- OPERF purchased Marsh stock via investment managers; Marsh executives pled guilty to criminal charges of corporate misconduct after the NY investigation; Marsh stock price fell from $46.13 to $29.20 following the announcement; OPERF alleged the decline caused by Marsh's violations of ORS 59.135 and ORS 59.137 and sought damages; trial court granted summary judgment on reliance and held Oregon's statute unconstitutional on commerce grounds; Oregon Court of Appeals affirmed the trial court, ruling ORS 59.137 contains a reliance requirement and does not adopt an efficient market presumption.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does ORS 59.137 require reliance? | OPERF argues no reliance element is needed under ORS 59.137. | Marsh argues reliance is required and the statute is unconstitutional without it. | Yes, ORS 59.137 requires reliance. |
| Can reliance be presumed via efficient market theory? | OPERF relies on efficient market theory to show presumed reliance. | Marsh opposes reliance presumptions and cites federal rule alignment. | No, no efficient-market presumption under ORS 59.137. |
| Is ORS 59.137 unconstitutional as applied to interstate commerce? | State claims it is even-handed and not preempted. | Marsh argues it imposes burdens not aligned with federal law. | Constitutionality not resolved on summary; decision rests on reliance requirement. |
| Does Everts v. Holtmann control the reliance analysis here? | Everts suggests no reliance is needed under similar state statute. | Everts is distinguishable due to statute language and context. | Everts does not control; ORS 59.137 contains reliance. |
Key Cases Cited
- Everts v. Holtmann, 64 Or.App. 145 (1983) (no reliance requirement in ORS 59.115 context; distinguishable)
- Basic Inc. v. Levinson, 485 U.S. 224 (1988) (established presumption of reliance for efficient market in Rule 10b-5)
- Affiliated Ute Citizens v. United States, 406 U.S. 128 (1972) (reliance not always required in omissions (contextual rule))
- Beck v. Cantor, Fitzgerald & Co., Inc., 621 F. Supp. 1547 (1985) (rejects broad Ute-based omission theory manipulation)
- Tharp v. PSRB, 338 Or. 413 (2005) (recognizes reliance concepts in Oregon jurisprudence)
- Conzelmann v. N.W.P. & D. Prod. Co., 190 Or. 332 (1950) (reliance principle in fraud context)
- Morasch v. Hood, 232 Or.App. 392 (2009) (context for fraud and reliance discussions)