Oregon State Bar Bulletin — AUGUST/SEPTEMBER 2007

By and large, 2007 was different. While the legislature focused state resources on schools, it also passed budgets for the judicial department and indigent defense that were the best in years, putting a stop to erosion of state support since 2001. In addition, the legislature passed many bills that will improve the practice of law. And it kept to its self-imposed deadlines.

Bar Priorities
The bar’s highest legislative priority for 2007 was increasing salaries for judges and for lawyers providing indigent defense services. Judges’ salaries had not been increased since 2002; indigent defense rates had not been increased since 1991. The legislature responded with increases in salaries for both. All state court judges will receive a 16 percent raise effective July 1, 2007, and an additional three percent on July 1, 2008. The base indigent defense rate will increase from $40 per hour and $55 for capital cases to $45 and $60 for capital cases; non-profit public defense agencies will be able to close the gap between their salary structure and district attorneys by one-sixth. It is up to the Public Defense Services Commission to decide exactly how the additional salary funds will be expended. Fair compensation for both judges and indigent defense attorneys will continue to be priorities for the bar.

The legislature revitalized a commission that will recommend salary levels for all elected state officials, including judges. The idea behind the commission is to keep salaries current and to take the politics out of the process. The commission will consist of 11 members, six of whom will be selected by lot from voter registration rolls, a model that has been successful in Washington state. The commission will meet to review and make salary recommendations, which then must be included in the governor’s budget. The legislature "shall consider" the recommendations in preparing the state budget. The earliest that any of the commission’s recommendations will become effective is July 1, 2009.

Another priority for the bar was to initiate a process to survey the needs of Oregon’s court facilities and to develop a method to improve deteriorating facilities. The bar was instrumental in convening a task force with the courts and counties before the session to examine ways to deal with court facility issues. The legislature established an interim legislative committee to assess court facilities, recommend standards for court facilities and "develop a proposal for ensuring that needed improvements to court facilities are made." The 2009 session will take up the committee’s recommendations.

The legislature also provided an additional $700,000 for civil legal services for the biennium, as well as a funding mechanism for future legal services.

The money for most of the judicial salary increases, the court facility survey and support for civil legal services comes from new or increased court related filing fees and assessments, including new fees on motions that the chief justice will develop and impose by court rule.

The passage of HB 2357-A is a first step to bring Oregon’s courts into the digital age. The bill broadens the authority of the chief justice to make rules relating to the substitution of electronic documents for paper documents in state courts, and to authorize the use of electronic transmission for service of documents in a proceeding other than service of the summons, initial complaint or petition. The legislature authorized $2 million to develop a plan for technology improvements. Funding for implementing the plan will be an issue in future sessions.

Another priority for the bar was to ensure passage of its package of law improvement bills, some of which are sponsored by the board but most of which originate with sections and committees of the bar. Out of the 26 proposals introduced by bar groups, 22 were passed into law; two were withdrawn and two died in committee. A list of all bills sponsored by the bar and bar groups and the text of the measures is available at www.osbar.org/pubaffairs.

Also worthy of note is SB 671, a bill on which the bar and the Oregon Newspaper Publishers Association, after lengthy negotiation, reached an agreement to clarify the effect of the Oregon Court of Appeals ruling in Klamath County School District v. Teamey (2006). In Teamey, members of the public were unsuccessful in gaining access to information arising from an investigation of possible malfeasance, where the information was protected by the attorney-client privilege. As passed, SB 671 will make a public body’s acknowledgement of possible wrongdoing trigger a duty to make the factual information in the lawyer’s report available for public inspection as long as it is not exempt under some other provision of the public records law. It will also protect the public body against the use of the lawyer’s communication as evidence in court by preserving the privilege-based exclusion of that evidence and will require the public body to prepare a digest of facts reviewable by the attorney general, district attorney or court.

Other Issues of Importance
Legislators tried to reach agreement to amend Measure 37, but in the end referred a measure to voters for the November 2007 election. If approved, HB 3540-C would give landowners the right to build as many as 10 homes as compensation for land use restrictions imposed after they acquired their properties. The measure is intended to stop the use of Measure 37 for large developments. In addition, the measure provides that a claimant’s right to build homes is transferable when the property is transferred.

The legislature passed two bills of great significance to gays and lesbians. One prohibits discrimination based on sexual orientation with regard to employment, housing, public accommodations and public services. The other creates domestic partnerships — civil contracts entered into by two qualified adults of the same sex, at least one of whom is an Oregon resident. It gives domestic partners the same responsibilities, privileges, immunities, rights and benefits as married and divorced couples.

In its special session in 2006, the legislature enacted strict new regulations on pay day lenders, including a maximum interest rate of 36 percent. These new rules did not take effect until July 1, 2007. The 2007 legislature enacted four bills that took effect on the same date designed to close loopholes in the 2006 legislation. These bills apply similar regulations to car title loans and out of state lenders and limit the interest on consumer finance loans.

The legislature also comprehensively addressed the problem of identity theft. SB 583-B contains standards for safeguarding personal information, requires notification to consumers if there is a breach of security that may result in disclosure of personal information and allows consumers to place a security freeze on their credit files to provide protection against identity thieves obtaining credit in their names. The law will apply to all entities that handle personal information, whether public or private.

Reacting to possibly inappropriate uses of non-competition agreements, the legislature passed SB 248-B (as further amended in conference committee) providing that such agreements are voidable under certain conditions.

Although comprehensive tax reform again eluded them, legislators did pass a rainy day fund by capturing roughly $300 million that would have been granted in corporate tax credits under the corporate kicker. One bill establishes the fund and the parameters for its use. A companion bill establishes a credit to allow corporations with less than $5 million in Oregon sales to keep their portion of the 2005-07 kicker that otherwise would be directed to the Rainy Day Fund.

A number of bills of significance to lawyers did not pass. A proposal designed to clarify the child abuse reporting requirement failed due to a perception that it would have resulted in fewer reports. An Oregon Law Commission bill to rewrite the spousal elective share statute failed when practitioners could not reach agreement. The statute of repose for professional negligence specifically for lawyers would have increased to 30 years under an amendment that did not emerge from committee. And an amendment to lengthen the statute of repose in product liability actions also failed. On the consumer front, a bill to regulate perceived predatory mortgage lending practices failed.

The legislature’s actions in 2007 will affect many areas of legal practice. Generally, these measures will take effect on Jan. 1, 2008, but many have clauses that make them effective sooner or later than that date. A more detailed discussion of the measures, organized by practice area, will soon be available in the OSB publication 2007 Legislative Highlights. The text of all bills introduced and as amended is available at the legislative website, www.leg.state.or.us.

Bar members, sections and committees reviewed hundreds of bills and made beneficial changes in many. Grassroots efforts of lawyers made a significant contribution to the successful efforts to increase judicial and indigent defense salaries. The chief justice, governor and legislative leaders were instrumental in this success, and deserve the bar’s gratitude for their leadership. The bar is committed to the continuous improvement of the law and the legal system and encourages the organized participation of its constituent groups.

Gerry Gaydos is the 2007 chair of the Public Affairs Committee of the OSB B oard of Governors. Other members include Linda Eyerman, Richard Yugler, Robert Newell, Ann Fisher, Jonathan Hill and Robert Vieira.

A CLE seminar on legislative changes, entitled "2007 Legislative Highlights Review Session," is scheduled for Thursday, Oct. 11, 1 to 5 p.m., at the Governor Hotel in Portland. Six practitioners will talk about legislative changes in their areas of expertise. Also, a panel discussion featuring five legislators who served on the Judiciary Committees in 2007 is planned.

© 2007 Gerry Gaydos

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