Vannatta v. Oregon Government Ethics Commission

228 P.3d 574, 348 Or. 117, 2010 Ore. LEXIS 265

• Court: Oregon Supreme Court
• Decided: April 8, 2010
• Docket: CC 07C20464; CA A140080; SC S057570
• Status: Published

Opinions

DE MUNIZ, C. J.

In the underlying litigation, petitioners sought declaratory and injunctive relief based on various challenges to certain statutory restrictions on the solicitation, offering, and receipt of gifts and entertainment by various public officials and private persons. The trial court granted summary judgment in favor of the Oregon Government Ethics Commission and the State of Oregon (the state). On review, this court affirmed in part and reversed in part the trial court’s summary judgment determination and remanded the case to the circuit court for further proceedings. Vannatta v. Oregon Government Ethics Comm., 347 Or 449, 222 P3d 1077 (2009). Petitioners now seek costs on appeal and an award of attorney fees under this court’s inherent equitable power to make such awards, as described Deras v. Myers, 272 Or 47, 65-66, 535 P2d 541 (1975). For the reasons that follow, we deny petitioners’ attorney fees claim and grant petitioners’ request for costs.

In this court, petitioners claimed that the statutory gift restrictions and limits on entertainment expenses in ORS 244.025(1) to (4) and ORS 244.042 violated Article I, sections 8 and 26, of the Oregon Constitution and the First Amendment to the United States Constitution. This court held that the parts of ORS 244.025(1) to (4) and ORS 244.042 that restrict the receipt of gifts and payment of expenses for entertainment did not violate the constitutional provisions relied on by petitioners. However, this court also held that the statutory restriction on offering gifts and payment of entertainment expenses violated petitioners’ free expression rights guaranteed under Article I, section 8, of the Oregon Constitution. Finally, this court determined that petitioners lacked the requisite standing necessary under ORS 28.020 to seek declaratory and injunctive relief from the restrictions on the solicitation of gifts and entertainment expenses in ORS 244.025(1) to (4) and ORS 244.042.

Petitioners do not assert any statutory entitlement to attorney fees. Instead, petitioners argue that they should be awarded attorney fees based on this court’s inherent power in equity, a so-called Deras award. This court summarized the elements necessary to support such an award in Armatta v. Kitzhaber, 327 Or 250, 287, 959 P2d 49 (1998):

“First, the proceeding must be one in equity.[¹] Second, the party requesting attorney fees must be the prevailing party. Finally, in filing the action, the party requesting attorney fees must have been seeking to vindicate an important constitutional right applying to all citizens without any gain peculiar to himself, as opposed to vindicating individualized and different interests, or any pecuniary or other special interest of his own aside from that shared with the public at large.”

(Internal quotation marks and citations omitted; punctuation modified accordingly.)

The parties disagree whether petitioners satisfy the second and third Deras requirements. Petitioners argue that they prevailed in this case, noting that this court designated petitioners as the prevailing party in this court’s opinion on the merits. Petitioners also argue that they brought this action to vindicate an important constitutional right that protects all citizens of this state. In support of that argument, petitioners assert that they

“[s]ought to have available to them the ability to conduct fact-finding trips and pay for meals and entertainment to facilitate their political speech. [Petitioners] had no particular pecuniary interest in the outcome however. Rather, their interests were in safeguarding the right to communicate with public officials, a right shared by all Oregonians. The relief applied not only to registered lobbyists, but anyone who had a legislative or administrative interest in matters before public officials.”

The state responds that this court reversed the trial court on a single ground, noting that this court concluded that petitioners were entitled to a judgment declaring the restrictions on offering gifts unconstitutional, but otherwise concluding that petitioners’ claims were without merit. Because this court also held that public officials could be prohibited from receiving those gifts, the state argues that petitioners have gained “in essence an empty power to offer gifts or provide entertainment that cannot be received.” Consequently, the state argues that this court should not deem petitioners prevailing parties for purposes of their attorney fee claim. The state also argues that petitioners do not meet the third Deras requirement because petitioners’ interests are individualized interests that are different from those of most Oregonians, “who likely do not desire to offer their public officials unlimited gifts and trips in connection with lobbying activities.”

We agree with the parties that this is a proceeding in equity and that the first Deras requirement is satisfied. We therefore turn to the other requirements that must be satisfied, beginning with the question whether petitioners are prevailing parties for purposes of their attorney fee request.

In Pendleton School Dist. v. State of Oregon, 347 Or 28, 217 P3d 175, adh’d to as modified on recons, 347 Or 344, 220 P3d 744 (2009), this court recently considered a similar issue. There the petitioners — school districts and public school students — filed an action against the state for declaratory and injunctive relief, alleging that the legislature had violated certain constitutional requirements concerning funding for public education. This court agreed with petitioners that the legislature had failed to fund the public school system in accordance with the constitution. However, the court declined to provide the petitioners with the affirmative relief that they requested, viz., a judicial direction to the legislative branch to alter its budgetary choices and increase public school funding. The petitioners later requested attorney fees. This court concluded that the petitioners satisfied the first two Deras requirements, that is — the proceeding was in equity and the petitioners had obtained a “substantial modification of the judgment,” and thus were the prevailing parties under ORS 20.077(3).² This court stated:

“In spite of the fact that petitioners’ request for a court-ordered appropriation had eluded them, however, the court designated them the prevailing party in the case — a designation justified by the fact that petitioners had succeeded in obtaining a direct statement that Article VIII, section 8, imposed a duty on the legislature to fund primary and secondary public education at a certain level, a result that the circuit court and the Court of Appeals had refused to give them.”

Pendleton School Dist., 347 Or at 33.

Here, although petitioners succeeded in only one of their challenges to the gift and entertainment restriction statutes, this court’s opinion reversed the trial court judgment and held that petitioners were entitled to a declaratory judgment that the restrictions on offering gifts and entertainment violated petitioners’ free expression right under Article I, section 8. Thus, we conclude that petitioners did obtain a “substantial modification of the judgment” regardless of whether the public officials involved ultimately can accept the offers made. Petitioners obtained a holding from this court that Article I, section 8, protects their right to offer gifts to public officials. That conclusion is consistent with this court’s exercise of discretion in designating petitioners as the prevailing party pursuant to ORS 20.077(3) in the court’s opinion issued in this case. On our further review occasioned by this attorney fee proceeding, we determine that petitioners are prevailing parties in this litigation based on the substantial modification of the trial court judgment they obtained in this court.

We therefore turn to the third inquiry required under Deras — that is, whether petitioners were seeking to vindicate an important constitutional right for all citizens without any gain peculiar to themselves. At the outset, we note that the mere fact that petitioners may have some individualized interest will not necessarily disqualify them from an award of attorney fees. For example, in Armatta, at least some of the plaintiffs in that case were opposed to the substance of Measure 40 due to the effect that the measure had on them individually. Nevertheless this court awarded the plaintiffs’ attorney fees, stating:

“plaintiffs primarily sought to enforce the provisions of the Oregon Constitution that relate to amendment and revision of that document, and ultimately prevailed on their claim that Measure 40 was not passed in compliance with the separate-vote requirement of Article XVII, section 1. Plaintiffs, therefore, sought to benefit all Oregonians, because they sought to defend the integrity of the amendment and initiative processes. That is the type of public benefit that, in our view, makes an award of attorney fees appropriate.”

327 Or at 289.

However, where plaintiffs’ self-interests are more central, an award of Deras attorney fees is not appropriate. In Vannatta v. Keisling, 324 Or 514, 931 P2d 770 (1997) (Vannatta J), the plaintiffs, who included potential political candidates and a political action committee, brought a challenge to the constitutionality of a measure providing for campaign spending limits. The plaintiffs prevailed on some of their claims and requested attorney fees. This court observed:

“It is true that, to some degree, the same ‘interest of the public in preservation of the individual liberties guaranteed against governmental infringement of the constitution’ on which this court relied in awarding attorney fees in Deras is present in this case. * * * That, however, is not enough. Deras was a case in which the petitioner was attempting only to vindicate interests of the public at large. By contrast, some of the petitioners, both individual and institutional, who have brought the present proceeding are not so disinterested. Their victory may benefit many members of the public at large, but that is true of virtually any case involving the right to speak, write, or print freely on any subject whatever. The overall benefit to the public is only an ancillary result in this case. Petitioners such as the political action committee and the potential political candidate have individualized and different interests that they seek to vindicate. Under such circumstances, this court ordinarily will decline to exercise its equitable power to award attorney fees. See Dennehy v. Dept. of Rev., 308 Or 423, 781 P2d 346 (1989) (explaining the foregoing rationale for denying request for attorney fees in the context of a tax case that affected many taxpayers). The request for an award of attorney fees is denied.”

Id. at 548-49 (citation omitted).

Petitioners here are not disinterested parties — as they state in their petition for attorney fees, they “sought to have available to them the ability to conduct fact-finding trips and pay for meals and entertainment to facilitate their political speech.” (Emphasis added.) In our view, petitioners here have significant individualized interests that they sought to vindicate, and the potential benefit to the public was only ancillary.

Moreover, it is questionable whether petitioners’ litigation in this case actually has provided the public at large with any real substantive benefit that would support an award of Deras attorney fees. Petitioners have established the right to offer gifts and free entertainment to public officials, but no public official may accept any such offer. In similar circumstances, this court has determined that no award of attorney fees was warranted. In Pendleton School Dist., this court observed that, although the petitioners successfully had obtained a judicial declaration that the legislature had failed to fund the public school system at the appropriate level, that success amounted only to a Pyrrhic victory because the legislature lawfully could continue to provide less than adequate funding. Consequently, this court rejected the petitioners’ request for attorney fees in that case, stating that “the result that petitioners have obtained is not the kind of result for the public at large that calls for the award of attorney fees under the rationale of Deras and the cases that have followed it.” Pendleton School Dist., 347 Or at 35. Similarly here, although petitioners have established the right to offer gifts and free entertainment to public officials, this court simultaneously upheld the statute prohibiting public officials from accepting them. In our view, the net result of our holding is not such a significant public benefit that the public at large should pay petitioners’ attorney fees.

Petitioners also have requested an award of costs in the amount of $1,053.00. Petitioners have supported that request with a statement detailing the costs and disbursements incurred on appeal. The state does not object to the request for an award for costs, and we agree that an award of costs is warranted in this case.

Petitioners’ statement of costs and disbursements is allowed in the sum of $1,053.00. Petitioners’ petition for attorney fees is denied.

1 In Swett v. Bradbury, 335 Or 378, 389, 67 P3d 391 (2003), this court determined that the “proceeding in equity” criterion “is of limited utility in determining whether to award an attorney fee” and, depending on the circumstances, may be of no utility at all. The parties here nonetheless agree that this proceeding is one in equity, for purposes of Deras and Armatta.

2 ORS 20.077(3) provides

“Notwithstanding subsection (2) of this section, upon appeal of a judgment in an action or suit in which one or more claims are asserted for which the prevailing party may receive an award of attorney fees, the appellate court in its discretion may designate as the prevailing party a party who obtains a substantial modification of the judgment.”