Feature

Kumbaya at the Capitol

A review of the 2001 legislative session

By Cliff Collins and Susan Evans Grabe


The 2001 legislative session was one marked by a spirit of cooperation and, compared to recent past sessions, more respectful of the concerns of judges and attorneys.

That's the view of a handful of well-placed lawyer-legislators who played prominent roles in the statehouse.

'Overall, this session was better disposed to lawyers,' says Rep. Max Williams, R-Tigard, who chaired the House Judiciary Committee. The hostility toward lawyers sometimes evident in the past was less a part of this legislature's mentality. 'For both the bench and bar, it was a better session than usual.'

Also, in a broader sense, 'It was a more conducive session to reaching compromise,' Williams says. 'It had to do with the upfront attempt by the leadership of both parties to put aside partisanship.'

Another committee member, Rep. Lane Shetterly, R-Salem, concurs. 'At least of the three I've served in, this one demonstrated the most success' in terms of working relationships among the House, Senate and governor, he says. People were 'wanting to do business as much as possible in a businesslike way.' The Democratic protest and walkout toward the session's end 'barely amounts to a speed bump, and didn't dampen any relationships that had been forged,' Shetterly adds.

'It was a maintenance-oriented session,' with less emphasis on 'big ideas,' says Rep. Rob Patridge, R-Medford, a member of the House Ways and Means Committee. 'I'm glad the tenor was less contentious. Lawyer-legislators worked well together.' And, he notes, 'We're just starting to see the effects of terms limits.' The speaker of the House, for example, was not experienced in 'the legislative process,' according to Patridge. 'We will continue to see the effects of' terms limits, Patridge feels.

A cooperative atmosphere prevailed, agrees Supreme Court Chief Justice Wallace P. Carson Jr. 'It showed up in committee meetings. I found them to be interested people, collegial.' Carson said it was 'an absolute delight' to work with the lawyers in the legislature, three of whom a Portland weekly newspaper called 'the bright lights of the GOP caucus.' ' I wish there had been more (lawyers serving) there,' Carson said, noting that there were more in Salem during his own legislative years, in the 1960s and '70s. Sen. Peter Courtney, D-Salem, seconds his sentiment: 'It was the first time I was the only lawyer on the Judiciary Committee.' When Courtney first served in the House, in 1981, 'of the 11 members, every person but one was a lawyer,' he recalls.

Being the only Judiciary Committee member in the Senate with a law degree put some pressure on Courtney, because, he explains, having a legal background is very helpful in trying to sift through and understand the hundreds of bills that come before the committee. He says he had to carry to the floor the highly legally technical bills. Had there been other lawyer members on the committee, 'we could have spread some of that out,' he reflects.

According to Bob Oleson, the OSB's government relations director, having many more new legislators along with fewer lawyers in the body meant that most legislative committees were hard-pressed to maintain a high quality of product or process. 'This situation also meant that public institutions like the judiciary will continue to risk losing insider support and become larger, political lightning rods for disaffected interest groups.'

Sen. Kate Brown, D-Portland, Senate minority leader with five legislative sessions under her belt, described the 2001 session as 'very productive and the most fun session I've had.' She says one of the reasons for 'a huge commitment on both sides to put aside partisanship' was the close numbers in Republicans and Democrats. In the Senate, 'there were not 15 Republican votes for anything. So the Senate president had to work with us.' The other reason she cited for the session's comity was the governor's early proposal to fund K-12 education at a high level. That got a potentially highly contentious issue out of the way in the first stages of the session, she says.

Brown, who also is vice chairwoman of the Oregon Law Commission, adds that the commission was able to get all of the juvenile law bills passed that it sought. The OSB's Oleson says groups such as special commissions and interim committees that remain active between sessions are likely to have increasing influence in developing complicated legislation in the future.

As for accomplishments, 'from the perspective of lawyer-legislators,' Williams was most satisfied with the increases in the number of judges and the increases in salaries of those serving on the bench. Carson also was pleased. 'This time we asked for 15 (new circuit court judges),' says Carson. 'We got six. We're pleased with that. They're hard to come by.' The 6 percent salary increases over the next two years are welcome, as well, he adds. In addition, says Williams, was the new funding source for legal aid: He was gratified that the Oregon State Bar's Board of Governors' proposal to funnel pro hac vice money to legal aid passed both houses.

'It was a solid, workmanlike session,' Williams concludes. 'I don't think anybody will look back and say we changed the face of Oregon. But we got things done that needed to be done.'

Less sanguine about the 2001 legislature is House Minority Leader Kathy Lowe, D-Milwaukie, who thinks the legislature's work suffers because there are not enough lawyer members: 'The fundamental lack of understanding of the role of the constitution, the judiciary system and the balance of power between the legislative, judicial and executive branches of government manifests itself on both sides of the aisle. Both parties need more lawyers to provide guidance and perspective on all of the committees. There are simply not enough of us to go around.'

Though its strength is its citizen makeup, Lowe says, the legislature's greatest weakness is the lack of understanding in the fundamentals of good government. 'This weakness is compounded by term limits, which ensures that the legislators receive minimal, if any, on the job training in the fundamentals.' She adds: 'The only way to stabilize the legislature and preserve a balanced government is to require everyone who serves in the body to pass a basic civics course.'

In all, some 3,297 bills came before Oregon's 71st Legislative Assembly. Ultimately, 1,075 passed both houses and were presented to the governor for his signature; he had until Aug. 17 (the day this issue went to press) to determine which bills would become law. Unless there is a prescribed effective date or an emergency clause, most legislation is effective Jan. 1, 2002.

Here are the highlights of the 2001 legislative session.

1. JUDICIAL BUDGET PARTIALLY RESTORED
HB 5014 restored two-thirds of the Judicial Department budget cuts originally proposed by the governor and legislative leaders. This add-back money includes family- and drug-court positions (e.g., family court facilitators). However, each judicial district will determine how to staff its program. In addition, SB 70 provides for six new circuit court judgeships, one each for Marion, Yamhill, Jackson, Multnomah, Deschutes and Washington counties. The positions are to be filled by election and slated to begin January 2003. And HB 2852 provides all judges with a 6 percent annual increase in salary in each of the next two-year cycles, effectively a 12 percent increase in pay. Many were uncertain, in light of budget constraints, that the judiciary would receive any of the 15 judges requested, much less salary increases and more money for current operations. Yet, despite an overwhelmingly successful session, there will still need to be cuts statewide in judicial system operations.

2. INDEPENDENT PUBLIC DEFENSE PANEL
SB 145 establishes the Public Defense Services Commission independent of the Judicial Department and makes it responsible for the administration and oversight of all public defense functions in state courts. The commission will incorporate the Public Defender Committee and office of Public Defender effective Oct. 1, 2001. Effective Oct. 1, 2003, the duties of the State Court Administrator relating to indigent defense will also be transferred to the commission. At that time, all indigent defense functions will be consolidated into the commission separate from the Judicial Department. It is hoped that this restructuring will eliminate potential conflict of interest concerns that have been raised in the past. The transition of services to the commission and the availability of continued funding for indigent defense services will need to be addressed in the future.

3. PERFECTING SECURITY INTERESTS
SB 171 adopts the updated version of the Uniform Commercial Code, Article 9. The bill expands the scope of Article 9, including the kinds of property involved and transactions in which a security interest can be taken. The bill also: clarifies ways to perfect security interests; changes choice of law provisions governing disputes from the location of the collateral to the location of the debtor; changes the place for filing financing statements to the location of the debtor; maintains Oregon's centralized filing of financing statements with the secretary of state and allows filing by electronic means; clarifies clearly defined consumer transactions; requires notice to junior lienholders upon default; and incorporates provisions to accommodate the transition between the two Acts. The result of a joint Oregon State Bar/Oregon Bankers Association workgroup, SB 171 received early consideration in both houses. However, it was held up in conference committee to address separate amendments dealing with assignability of structured settlements and regulation of the title-lending industry.

4. PRO HAC VICE FEES
HB 2938 authorizes the Oregon Supreme Court to collect an application fee for pro hac vice appearances. The program will be administered by the Oregon State Bar with funds dedicated to the provision of low-income legal services. HB 2938 gave representatives from the bar and the Campaign for Equal Justice the opportunity to educate legislators about the importance of legal services and judicial access. Inroads made this session will, hopefully, help lay the foundation for a general fund appropriation for legal services in the future.

5. FIXING GATTI
HB 3857 is a response to the Supreme Court ruling in In re Gatti. The bill amends ORS 9.527 to exempt advice on undercover law enforcement activities by assistant district attorneys and federal prosecutors working for a public body or the federal government from prosecution by the bar for willful deceit or misconduct under the statute. This solution however, fails to address the ethical ramifications lawyers will continue to face in light of the Gatti ruling. The Board of Governors proposed and the House of Delegates approved submission of a proposed disciplinary rule change to the Supreme Court which was rejected by the court as too broad. The court expressed concern that the rule change would nullify lawyers' responsibility not to engage in dishonest conduct.

At the same time, the U.S. Department of Justice has sued the Oregon State Bar seeking to enjoin it from prosecuting lawyers under the DRs. The U.S. Dept of Justice has argued that enforcing the DRs prevents attorneys from performing their statutory duties under federal law. It is likely that a resolution on this issue will be before the House of Delegates at the bar convention in September.

6. ELECTRONIC SIGNATURES AND RECORDS
HB 2112 adopts the Uniform Electronic Transactions Act (UETA), a national model state law governing the use of electronic signatures and electronic records. UETA allows the use of electronic signatures and records in transactions. It is a procedural statute and does not mandate the use of electronic signatures or records. The primary goal is to establish electronic signatures and records as the legal equivalent to paper writings and manually signed signatures. HB 2112 was the result of the bar's Computer and Electronic Information Workgroup formed to deal with legislation related to computer information and Internet commerce. The bar group assisted Rep. Jim Hill craft legislation relating to UETA and to meet his goal of keeping Oregon businesses competitive. One important addition to the bill was the adoption of the federal E-sign consumer protection provisions that are not found in the model UETA statute.

7. NEW OPTIONS FOR MINORITY SHAREHOLDERS IN CLOSELY HELD CORPORATIONS
SB 118, relating to minority shareholders in closely held corporations, codifies case law relating to additional judicial remedies that shareholders of corporations have available outside of dissolution of the corporation. In addition, the bill allows non-unanimous consent opt-in provisions, clarifies limited liability company duty of loyalty provisions, makes technical clarifications to entity mergers and conversions and addresses issues raised by the Department of Consumer and Business Services relating to fraudulent banking. SB 118 is an omnibus bill which contains all of the OSB Business Law Section bills. The primary focus of SB 118, addressed by an interim section task force, was the issue of minority shareholders in closely held corporations. Working closely with Sen. Peter Courtney, the task force crafted legislation and ultimately a compromise with the Association of Oregon Industries to ensure passage of the bill.

8. GARNISHMENTS CLARIFIED, CONSOLIDATED
HB 2386, relating to garnishments, clarifies the garnishment process and consolidates the four forms of writ into a single form. It also authorizes the attorney general to adopt model forms for notices of garnishment issued by state agencies and county tax collectors. The product of an Oregon Law Commission workgroup chaired by Rep. Max Williams, HB 2386 was intended to simplify and clarify the garnishment process and forms used. The law commission intends to undertake a comprehensive review of the judgment statutes during this legislative interim.

9. CLARIFYING THIRD-PARTY VISITATION
HB 2427 was enacted in response to the U.S. Supreme Court case Troxel v. Granville which limited the extent to which a state can order third-party visitation rights over the objection of a parent. HB 2427 creates a presumption in visitation disputes that a legal parent acts in the best interest of the child. It also creates a presumption in custody disputes that it is in the best interest of the child to be in the custody of a legal parent and specifies the showing required of a nonparent to overcome these presumptions. HB 2427 was supported by the OSB Family Law Section and is the result of an interim work group in which Rep. Lane Shetterly was involved. Although not a perfect solution, proponents of the bill believe that the clarification of Troxel in HB 2427 will provide more certainty and less litigation in this area of the law.

10. WORKERS' COMP OVERHAULED
The final version of SB 485 was modified in light of the Oregon Supreme Court decision in Smothers. SB 485 was the result of negotiations by a committee comprising management and organized labor representatives. The bill was intended to develop fairer standards and disability benefits, result in faster decisions and give employers greater certainty with respect to potential liability. It revises laws regarding the compensability of preexisting, new and omitted conditions, and it increases partial and permanent disability benefits. SB 485 stalled as legislators considered the impact of the Oregon Supreme Court decision in Smothers, in which the court allowed an injured worker to proceed with an action in negligence after being denied benefits under the Workers' Compensation system. Concerns that the ruling would overwhelm the existing system generated some discussion of legislative action to overturn the court's ruling. Instead, the original bill was amended in line with the decision to authorize an injured worker to pursue a negligence action for work-related injuries under certain conditions.

11. ATTORNEY FEES IN TORT CASES
Proposed by the Oregon Debt Collector's Association, HB 2381 clarifies that the language of ORS 20.080 allowing the award of attorney fees applies only to tort cases. However, it creates new provisions awarding attorney fees to the prevailing party in a contract action when the amount claimed is $5,500 or less, the contract is silent as to attorney fees and proper notice has been served. Certain contracts and types of actions are excluded. The OSB Litigation Section and Consumer Law Section, as well as Rep. Charlie Ringo, raised concerns regarding the bill. The full impact this bill will have on the system is still uncertain.

12. PRIVACY UNDER HIPAA
SB 104 creates an Advisory Committee on Privacy of Medical Information and Records to study the relationship between the federal Health Insurance Portability and Accountability Act of 1996 (HIPAA) and state information privacy laws. The committee is required to make recommendations to the 72nd Legislative Assembly. The HIPAA rules and how they relate to existing Oregon laws are important because of their potential impact on consumer control over health information; boundaries on medical record use and release; security of information; penalties for misuse; and limitations on public use including research, public health reporting and judicial proceedings. The OSB Health Law Section is studying this issue. At the same time, the bar's Computer & Electronic Information Workgroup is also considering how to approach privacy issues related to electronic recordkeeping.

CONCLUSION
The 2001 legislative session, when compared to the partisan nature of previous sessions, was less contentious and was conducted in a more businesslike fashion. While nothing earth shattering was accomplished, the legislature did, by the same token, make substantial gains in improving a variety of laws that will affect practitioners on a daily basis. +

HONORABLE
MENTIONS

Here's a short list of other notable legislation approved by the 2001 legislature.

HB 2206: Like-kind exchange
HB 2374: Attorney fees
HB 2460: SLAPP suits
HB 3119: Transfer provisions
HB 3260: Bar governance changes
HB 3461: Probation Violations
HB 3642/2924: Forfeiture bills
HB 3677: Judicial construction
SB 104: Privacy of medical information
SB 140: Death penalty
SB 114: Genetic Privacy
SB 166: Pet trusts and more
SB 293: Presumptive sentences
SB 370: Juvenile sex offenders
SB 384: Juvenile offender oversight
SB 437: Intent to commit future crime
SB 446: Real estate licensing
SB 722: Investigator licenses
SB 920/HB 2664: DNA samples

NEAR MISSES
And here's a list of bills that did not get traction in 2001 - but could return in the future:

HB 2246: Judicial Review of Government Action
HB 2356: Court Facilities
HB 2941: Baseball Bill
HB 3910: UCITA
HB 3998: Measure 7 re Impairment of Land Use Value
HJR 23: Judicial Impeachment
SJR 7: Judicial Selection +


ABOUT THE AUTHORS

Cliff Collins, a Portland-area free-lance writer, is a frequent contributor to the OSB Bulletin; he can be reached at ccollins@teleport.com. Susan Evans Grabe is public affairs attorney with the Oregon State Bar; she can be reached at sgrabe@osbar.org.


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