Plaintiff, a registered voter, property owner, and resident of the Sisters School District in Deschutes County, brought this action against defendant, the Sisters School District (district), alleging that the district’s board unlawfully authorized the issuance of Certificates of Participation (COPs) as a means of financing various capital improvements. Plaintiff moved for summary judgment, seeking a declaration that, because the COPs are backed by the full faith and credit of the district, they are bonds, not COPs, and, as bonds, they were unlawfully issued because the district failed to obtain voter approval. In addition, plaintiff sought to enjoin the district from making further payments on the alleged bonds and “[f]or such further relief as the court deems just and equitable.” The district, for its part, also sought summary judgment, challenging plaintiffs standing to initiate the lawsuit and, on the merits, arguing that the COPs were authorized by statute and did not require voter approval. The trial court concluded that plaintiff lacked standing; nonetheless, it issued an advisory opinion on the merits and concluded that the district’s financing agreement was authorized by statute and did not require voter approval. Plaintiff appeals. Like the trial court, we conclude that plaintifflacks standing to bring his claim.
In plaintiffs operative complaint, he alleges that, in March 2007, the district adopted a resolution “which authorized the district to enter into a Financing Agreement, Escrow Agreement and a purchase Agreement for the execution of and offering of $2,100,000 of Full Faith and Credit Obligations,” and that the district, at the time the complaint was filed, had repaid $136,335.00 of the debt. According to the complaint, the district justified issuing the “obligations” under ORS 271.390, which authorizes a public body to enter into financing agreements for the purchase of property, backed by “all or any” of the public body’s lawfully available funds. In fact, the complaint alleges, the obligations are “bonds” authorized (and constrained) under the more specific provisions of “ORS 328.205 et seq.” Those statutes authorize school districts to issue bonds for, among other things, capital improvements, but only, according to plaintiff, “after their *486 issuance has been approved by a majority of the electors of the district.” The district, the complaint alleges, did not obtain the necessary approval by the electors; plaintiff seeks a declaration to that effect and an injunction “prohibiting the defendant from making further payments on the bonds” or “requiring the district to seek reimbursement for all payments made prior hereto or hereafter from the insurer of the obligations.”
In the paragraphs of the complaint setting forth facts to establish his standing to bring this action, plaintiff states, “Plaintiffs status as a taxpayer and voter within the district will or may be adversely affected by the actions of the school district as alleged in paragraph 16(e) and (f) above.” Those paragraphs assert,
“(e) The issuance of‘bonds’ without the approval of the electorate, may jeopardize the districts’ [sic] ability to provide for the daily operation of the district.
“(f) The issuance of ‘bonds’ by the district without voter approval increases the likelihood that the district will have to seek voter approval of additional bonds either as local option bonds or general obligation bonds. ORS 328.205 et seq. is intended to initially require voter approval and thus avoid the prospect of spending too much money in the form of full faith and credit obligations and then seeking voter approval.”
In his brief on appeal, plaintiff explains his connection to the financing arrangement in more detail. The record shows, he explains, that the “bonds” obligate the district to pay approximately $90,000 per year until 2011, and then approximately $240,000 for the next ten years. The district’s income, however, is derived from the state and from local property taxes, both of which “may fluctuate significantly depending on a multitude of factors.” At the same time, property taxes are limited to $5.00 per $1,000 of assessed value, and are already at $4.8165. “If the district was unable to make its payments of principal and interest as required by * * * the financing agreement,” plaintiff contends “then the owners of the obligation (aka bond, certificates of participation) would have both the contractual and statutory right to force the district to levy a tax to pay the money due to them.”
*487 That argument is in essence the same one that the trial court rejected, ruling that the “potential impact of the [district’s decision on [p]laintiff is attenuated and speculative. * * * Plaintiff lacks standing to pursue his claims for declaratory and injunctive relief.” We agree.
Whether a plaintiff has standing — that is, the right to have his or her claim adjudicated on the merits — depends in the first instance on the requirements imposed by the statute under which the plaintiff seeks relief.
E.g., Eckles v. State of Oregon,
In this case, plaintiff alleges that he has standing based on his status as a taxpayer and a voter. The Supreme Court, in one case, has recognized that an elector who alleges that he has been unlawfully deprived of his opportunity to vote can seek a declaration voiding the election. In
Webb v. Clatsop Co. School Dist. 3,
Further, defendant argues that plaintiffs claim of voter standing was not preserved below. Insofar as defendant means that plaintiff has not claimed any injury to his status as a voter, separate and distinct from his status as a taxpayer, we agree. Plaintiff alleged no injury beyond potential financial harm — the same impact he alleges in his capacity as a taxpayer. In other words, although he alleges that he (and all other registered district voters) should have been allowed to vote on the district’s financing arrangement, he does not allege any injury that has befallen him, or might befall him, based on his status as a voter. The alleged injury serving as the basis of his standing is not an already-committed offense to his franchise, but a potential offense to his finances. His “voter standing” argument, then, merges into his “taxpayer standing” argument.
Accord Hinkley v. Eugene Water & Electric Board,
*489
The modern Oregon rules for taxpayer standing in a declaratory judgment action derive from
Gruber v. Lincoln Hospital District,
“must show how plaintiffs ‘rights, status, or other legal relations are affected’ by an instrument or enactment, the construction or validity of which he seeks to have determined. Standing under this section has been denied when the showing of the required effect has been too speculative or entirely missing. See, e. g., Gortmaker v. Seaton,252 Or 440 , 443,450 P2d 547 (1969); Eacret v. Holmes,215 Or 121 , 125,333 P2d 741 (1958); Hale v. Fireman’s Fund Ins. Co.,209 Or 99 , 103-104,302 P2d 1010 (1956).
“[A] taxpayer’s standing as such to demand equitable relief in his own name in Oregon has depended on allegations that the challenged governmental action had actual or potential adverse fiscal consequences. * * * When a suit under ORS 28.020 is grounded on ‘taxpayer’ standing, these fiscal consequences presumably represent the effect on plaintiff required by that statute.”
Id. at 7-8. The court held that the plaintiff did not have standing because his bare recitation of the contract’s terms did not adequately demonstrate the logical connection between the contract at issue and the anticipated harm to the plaintiffs financial interest. Id. at 8-9.
Gruber established that a plaintiff must allege a connection between the challenged enactment and the asserted financial harm. We do not find plaintiffs complaint deficient in that respect; he carefully explains how, hypothetically, the COPs could result in an increased tax obligation. But Gruber also establishes that, if the connection between the challenged enactment and the allegedly harmful consequence is not merely “potential,” id. at 8, but “speculative,” id. at 7, then the hypothetical consequence cannot qualify as an injury or harm for purposes of establishing standing under ORS 28.020. The trial court in this case concluded that the connection between the district’s adoption of the resolution *490 authorizing the COPs and a financial injury to plaintiff was too “attenuated and speculative,” and we agree.
In order for plaintiff to experience actual financial harm as a result of the district’s decision to issue COPs, several events must all occur, each of which is uncertain. First, the district must find itself unable to pay back the principal and interest on the COPs from available revenues. Second, some authoritative tribunal must determine that the district has no discretion in deciding how to remedy the default on its own: it must raise taxes by floating a bond (instead of, for example, declaring bankruptcy or liquidating assets). Third, the bond issue must pass. Fourth, plaintiff must still be a resident of the district when the bond issue passes. Fifth, plaintiff must have resources that are affected by the bond issue.
The cases that, according to plaintiff, support his standing are
Savage v. Munn,
“Plaintiffs have alleged that their rights are affected by Measure 5, a constitutional provision. They have alleged that Measure 5 will have the effect of making them pay proportionally more for the same (or fewer) services [than those received by otherwise similarly situated property owners]; they have not alleged that Measure 5 will have the ‘fiscal consequence’ of raising their taxes. However, a direct effect on the amount of one’s tax bill is not required to show taxpayer standing.”
Id. at 291. Savage does not help plaintiff. As the court noted, the plaintiffs’ complaint focused on “the manner in which their taxes are capped under Measure 5. The workings of Measure 5 are ‘present facts,’ not simply possible future events.” Id. at 292. In other words, there were no significant *491 future contingencies that would determine whether the plaintiffs would or would not suffer disproportionate taxation. In the present case, those contingencies, as noted, abound.
Hinkley
provides plaintiff with a better, but ultimately unconvincing, argument. In that case, the plaintiffs sought a declaration that the defendant, a public utility, had violated an Oregon statute requiring such entities to engage in competitive bidding for services contracts.
“ ‘Hinkley does not allege that his rates have increased, or even that they may increase, as the result of the subject contracts!,]’ and that the ‘abstract claim that higher costs have been incurred’ is ‘not adequate, without improper judicial speculation, to allege actual or potential “fiscal consequences” of the contracts * * *.’ ”
Id. at 186 (alterations in original). We rejected the challenge to Hinkley’s standing:
“Hinkley alleged that he is a ratepayer and that defendant’s ‘failure to follow the requirements of law in entering into the contracts’ caused defendant to ‘incur! ] higher costs of operations contrary to its obligations to its ratepayers.’ We acknowledge, as defendant emphasizes, that Hinkley did not explicitly allege that the ‘higher costs of operations’ would result in an increase in his rates. Nevertheless, the pleadings — and, particularly, the allegation that the utility’s incurring of higher costs would violate its ‘obligation to its ratepayers’ — bear the reasonable inference that the resultant higher costs will be passed through to ratepayers, including Hinkley. Given the procedural posture of the case, and the standard of our review of the pleadings, that is sufficient.”
Id. at 186-87 (brackets in original; citation omitted). Plaintiff points to significant similarities between Hinkley and the present case. In both, a plaintiff has alleged that a public entity has failed to follow the law and that this failure might lead to a tangible financial injury: increased utility rates in Hinkley and, in the present case, increased taxes.
*492 We are persuaded, however, that the differences between the two cases are far more significant. First, Hinkley was an appeal from the grant of a motion to dismiss under ORCP 21 A. The court therefore “assume[d] the truth of all facts alleged in plaintiffs’ complaint, drawing all inferences in favor of plaintiffs.” Id. at 183. Thus, “[g]iven the procedural posture of the case, and the standard of our review of the pleadings,” id. at 187, the court supplied the inferences that were necessary to link the alleged statutory violation to the claimed harm: the pleadings “bear the reasonable inference” that the contract, which had already been awarded, would result in higher costs that would be passed through to ratepayers. Id. at 186-87. In other words, we found standing based on our conclusion that the facts Hinkley alleged implied that the defendant would establish higher costs and pass them on to ratepayers. Had the case come to us on summary judgment, and if, at that point, Hinkley had produced no evidence from which actual harm could be inferred, we would have confronted a different situation. That is the procedural posture in which the current case presents itself.
Further, even disregarding procedural distinctions, Hinkley did not involve contingencies: it involved inferences, in particular, the inference that no-bid contracts lead to increased costs, and the inference that a utility’s increased costs would be passed on to ratepayers. Those inferences were based on the strength of the logical connection between existing facts and the harm to Hinkley. Here, the missing links between the district’s decision to issue COPs and the harm to plaintiff do not depend on logic; harm to plaintiff is not logically implied by the fact that the district authorized the COPs (with or without a vote). Unlike the connection between no-bid contracts and increased rates, the connection between issuing COPs and increased taxes for plaintiff depends on unknown and unknowable future events — in short, on speculation.
Thus, the cases that plaintiff cites in support of his standing provide a weak foundation for his claim. At the same time, some cases support the opposite conclusion. To illustrate the meaning of “speculative,” the court in
Gruber,
“[C]ourts generally decline to pronounce a declaration in a suit wherein the rights of the plaintiff are contingent upon the happening of some event which cannot be forecast and which may never take place.
* * * *
“It must be apparent that the rights which the plaintiff says he possesses against the two defendant insurance companies are contingent. He may never win a judgment in the tort action. The defendant insurance companies are not required to do anything concerning the plaintiff until a judgment is entered in his favor against the [insured] and remains unsatisfied for thirty days.”
Id. at 103-04, 113. Plaintiff in the present case, like the plaintiff in Hale, is seeking a declaration that might announce the answer to a question that will arise only “upon the happening of some event which cannot be forecast and which may never take place.” Indeed, plaintiffs injury will occur only if all of several contingencies occur. 3
DeMartino v. Marion County,
Berg v. Hirschy,
“[B]y plaintiffs’ own admission, they have yet to incur any damages; no tax authority has imposed on them any additional tax liability, and it is impossible to know when or even if they will incur such liability. Indeed, the relevant tax authority may never decide to review plaintiffs’ tax returns at all, or may never decide that [plaintiffs] experienced a taxable gain that subjects plaintiffs to additional liability. The declaratory relief that plaintiffs seek will not prevent them from incurring damages; rather, it depends on the hypothetical event that such damages will be incurred.”
Id. at 475-76.
In sum, we acknowledge that the difference between a potential injury, which can support standing, and a speculative one, that cannot, is not self-evident. Sorting one from the other is as much art as science. That said, we conclude *495 that the record on summary judgment does not create inferences that establish a sufficient connection between the allegedly unlawful election and tangible financial harm to plaintiff. There are too many events that may or may not occur; whether they occur or not depends, in plaintiffs own words, on “a multitude of factors”; and nothing in the record implies the logical likelihood of their occurrence or provides a method to gauge that likelihood. In short, plaintiff has not established standing.
Affirmed.
Notes
As the court acknowledged in
Eckles,
injunctive relief and declaratory relief are not identical. However, as that court also noted, the standing inquiries in both situations are “much the same.”
In
deParrie v. State of Oregon,
It bears emphasizing that each sequential contingency increases exponentially the likelihood that the ultimate injury will not occur.