|Oregon State Bar Bulletin OCTOBER 2010|
Methodology matters. And for attorneys, the methods by which a court will interpret a written document matter most because it is those methods that will influence, if not determine, the outcome in a great number of our cases.
A method, like a theory, can be said to have two functions: prediction and explanation. For an attorney, prediction is arguably the more important of the two because, more often than not, that is what our clients are paying for. To a court, on the other hand, the primary use of a method is to explain, and through explanation, to ground the decision of the court firmly within the course of the law. Accordingly, both the bench and the bar have a stake in the methods that the court announces as controlling; indeed, those methods are the language through which the bench and the bar speak to one another. Method bounds the limits of inquiry, directing briefing and argument to the universe of materials that the method deems relevant. Given the importance of method, the critical time for the bar is the moment at which the state supreme court chooses a new method, or alters an existing one.
A Time of Reconsideration
That critical time is now. The methods by which the Oregon Supreme Court interprets language, established in a quintet of cases decided between 1992 and 1997, appear to be under active reconsideration.1 Indeed, little more than a year ago the court removed the cornerstone of the quintet, PGE v. Bureau of Labor & Industries, which had governed the interpretation of statutes since 1993, and replaced it with a new methodology set out in State v. Gaines.2 And while Gaines itself was a watershed, it now appears that the court is poised to reconsider another part of the quintet, opening the possibility of a second dramatic change in how the Oregon Supreme Court approaches the interpretation of written documents.
On Jan. 21, 2010, the court allowed review in Bresee Homes Inc. v. Farmers Ins. Exch., an otherwise routine case involving the interpretation of an insurance policy.3 Since 1992 the interpretation of insurance contracts has been governed by Hoffman Construction v. Fred S. James Constr. Co., which set forth a three-step method by which the court first looks to the plain meaning of the text and then, if there is an ambiguity, to the whole text of the insurance contract. If the ambiguity persists after those first two steps, the court then construes the ambiguity against its drafter, the insurance company.4
The Court of Appeals applied this method in Bresee and, following its own line of cases decided under Hoffman, rejected extrinsic evidence offered by the insured to explain the meaning of the policy, instead resolving the question purely as a matter of law.5 So far, so good: So far, just like Gaines. Gaines was also an otherwise routine case, albeit in the statutory construction context, and in that case the Court of Appeals, following the line of cases decided under PGE, also rejected extrinsic evidence (in the form of legislative history) offered by the defendant to explain the meaning of a statute.6 And like the allowance of review in Gaines, the Oregon Supreme Court’s allowance of review in Bresee was aimed squarely at the method employed by the Court of Appeals. One question on review stood out most starkly, both for its parallel with Gaines and for its importance to the continued viability of Hoffman: whether extrinsic evidence may be introduced to create an ambiguity in an insurance policy, or otherwise be submitted to the fact-finder.7
The parallels between the PGE method and the Hoffman method are striking: both are three-step methods for the interpretation of language, both are primarily concerned with what types of evidence of meaning can be used to resolve ambiguities in that language, and both begin — and, in the case of Hoffman, end — within the four corners of the document. Perhaps the most significant parallel is the treatment of extrinsic evidence under both methods. Prior to deciding Gaines the Oregon Supreme Court, when applying the PGE method, rarely resorted to legislative history to resolve ambiguities in the text, and since the decision in Gaines there has been a marked increase in the amount of legislative history appearing in the court’s opinions. This parallel makes the grant of review in Bresee, coming so soon on the heels of the court’s decision in Gaines, all the more interesting because it perhaps signals a further softening of the court’s sometimes rigid adherence to “four corners” textualism in the interpretation of documents.
What is behind the recent decisions of the court to reconsider its methods? In Gaines the answer was clear: in response to years of criticism of the PGE paradigm for its perceived hostility to legislative history, the Legislature amended ORS 174.020 in 2001 and Gaines represented the first case squarely presenting the question of what that amendment accomplished. The answer is not so clear with Bresee. The Hoffman methodology, which lacks the statutory underpinnings the Gaines and PGE methods found in ORS Chapter 174, is best seen as a creation of the court, representing the court’s choice of a particular interpretive methodology. Accordingly, the court’s decision to revisit Hoffman arguably tells us more about the court’s own internal debates regarding methodology than did the decision to revisit PGE in Gaines.
Perhaps the impetus toward altering the Hoffman methodology is part of a larger undertaking by the court to move away from the rigid, three-step, analytical constructs adopted between 1992 and 1997, not because those constructs no longer work, but because the court considers them unnecessarily constraining. Methodology not only drives judicial decision making, it also drives judicial opinion writing and the three-step methods can be conceived of as outlines for use by appellate judges in crafting opinions of the court. So conceived, it is possible that the move away from rigid methodologies reflects the changing composition of the court itself. With the retirement of Justice Gillette no members of the court that decided Hoffman remain on the bench, and the court now includes several justices with extensive experience on the Court of Appeals in the years following the introduction of the methods set out in the quintet. Perhaps the shared experience of these justices in crafting opinions of the court within the confines of sequential, three-step methods has led them reconsider the value of such rigid methodologies.
What would a post-Hoffman world look like? Although the possible consequences of abandoning the Hoffmanmethodology may seem daunting, the statutory construction opinions post-Gaines provide some support for the notion that continuity rather than revolution is the more likely outcome. Since Gaines was decided in 2009 the court has regularly considered legislative history and in no case has that legislative history overridden the clear language of the statutory text, in context. Even if the court were to discard or modify Hoffman to allow the consideration of extrinsic evidence, the court would still be hard-pressed not to give decisive weight to the plain language of an insurance policy. Said another way, although opinions under Bresee may read differently as the court works through the altered method, the results are likely fall within the mainstream of opinions decided under Hoffman, just as the results in cases decided under Gaines have tended to follow cases decided under PGE.
Why It Matters
All of this may seem to the reader like so much appellate minutiae. After all, it is the holdings of cases that really matter, right? Maybe. As noted at the outset, the job of the attorney-as-advisor, with regard to a document, is more often than not one of predicting how a court will read that document. There are, broadly speaking, two ways of doing this. The first is to look to the holdings of various cases and then reason by analogy to the case at hand. The second is to discern the interpretive method used by the court for documents of the same type, and then apply that method independently. I submit that the second method is the more reliable. Not only does it bypass the inherent squishiness of reasoning by analogy — after all, saying A is like B does little good if the court decides that your A is really a C — but it also empowers the lawyer to deal effectively with cases for which there may be few analogs. The universe of possible fact variations is infinite, limited only by human creativity and physical laws — language, however, is not so limitless. If we accept that words have meaning, then there are some meanings that can be and many meanings that cannot. Methodology allows us to sort out which is which.
And it is this sorting that is the task of the court, and why the method by which it goes about that task is so vital. Although the holding of a case might be influenced, if not determined, by the facts before the court, methodology represents a jurisprudential choice. The Oregon Supreme Court appears willing to reconsider the choices it made in the early 1990s during its great burst of methodological creation. Those choices influenced a generation of Oregon case law, as well as the training of a generation of Oregon lawyers, and thus the court’s current ferment merits our attention. Methodology is not merely a citation shoe-horned into a brief between facts and application — it can be, and often is, the whole game. And it is a game certainly worth the candle.
1. The “Quintet” consists of PGE v. Bureau of Labor & Indus., 317 Or 606, 859 P2d 1143 (1993) (statutes); Hoffman Construction v. Fred S. James Co., 313 Or 464, 836 P2d 703 (1992) (insurance contracts);Yogman v. Parrott, 325 Or 358, 937 P2d 1019 (1997) (contracts); Ecumenical Ministries v. Oregon Lottery Comm., 318 Or 551, 871 P2d 106 (1994) (initiated constitutional amendments and laws); Priest v. Pearce, 314 Or 411, 840 P2d 65 (1992) (interpretation of the Oregon Constitution).
2. 346 Or 160, 206 P3d 1042 (2009).
3. 227 Or App 587, 206 P3d 1091 (2009), review allowed, 347 Or 543 (2010).
4. Hoffman, 313 Or at 469-471.
5. 227 Or App at 593-94.
6. State v. Gaines, 211 Or App 356, 360 n 2, 155 P3d 61, adh’d to as modified on recons., 213 Or App 211, 159 P3d 1291, rev’d, 346 Or 160 (2009).
7. Oregon Supreme Court, Media Release, January 21, 2010 page 2 available in PDF at www.or.us/sca/WebMediaRel.nsf/Files/01-21-10_Supreme_Court_Conference_Results_Media_Release.pdf/$File/01-21-10_Supreme_Court_Conference_Results_Media_Release.pdf (accessed March 15, 2010).
ABOUT THE AUTHOR
Robert Wilsey is judicial law clerk to the Hon. Chief Judge David V. Brewer, Oregon Court of Appeals. The views expressed in this article are his own, not those of Chief Judge Brewer or the Oregon Court of Appeals. This article was drafted while the author was an associate at Smith Freed and Eberhard, and he is grateful to the attorneys of that firm for their insight and suggestions on those early drafts.
© 2010 Robert Wilsey