Wallace v. State ex rel. Public Employees Retirement Board & Public Employees Retirement System

263 P.3d 1020, 245 Or. App. 16, 2011 Ore. App. LEXIS 1123
CourtCourt of Appeals of Oregon
DecidedAugust 10, 2011
Docket08C10873; A141065
StatusPublished
Cited by2 cases

This text of 263 P.3d 1020 (Wallace v. State ex rel. Public Employees Retirement Board & Public Employees Retirement System) is published on Counsel Stack Legal Research, covering Court of Appeals of Oregon primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Wallace v. State ex rel. Public Employees Retirement Board & Public Employees Retirement System, 263 P.3d 1020, 245 Or. App. 16, 2011 Ore. App. LEXIS 1123 (Or. Ct. App. 2011).

Opinion

ARMSTRONG, J.

Plaintiff appeals a judgment that dismissed his claims against defendant, raising three assignments of error.1 We write to address only one of his assignments, viz., that the trial court erred in dismissing six of plaintiffs seven claims for relief for lack of jurisdiction. The court concluded that it lacked subject matter jurisdiction over those claims because plaintiff had begun but not completed a contested case proceeding under the Oregon Administrative Procedures Act (APA), ORS 183.310 to 183.690, that challenged the legality of the state agency actions that formed the basis of plaintiffs claims, and, hence, plaintiff had not exhausted his administrative remedies regarding the challenged agency actions. We review the dismissal of an action on jurisdictional grounds for legal error, Parker v. City of Albany, 208 Or App 296, 298, 144 P3d 976 (2006), and conclude that the court erred in dismissing the claims on which plaintiff requested compensatory relief. Accordingly, we reverse and remand as to those claims.

I. BACKGROUND

We state the facts as alleged in plaintiffs complaint, accepting as true his well-pleaded allegations with the benefit of all favorable factual inferences. Sulliger v. Lane County, 190 Or App 359, 361, 79 P3d 888 (2003). Plaintiff had been a participant for about 15 years in the Oregon Savings Growth Plan (Plan), a deferred-compensation plan for state employees under the Public Employees Retirement System (PERS) that is administered by the Public Employees Retirement Board (PERB), ORS 243.470. During that time, defendant restricted plaintiffs ability to transfer funds among various investment options in the Plan and imposed sanctions against plaintiff when he violated those restrictions.

In 2002, PERB adopted a policy under which Plan participants who made more than an average of two transfers, [19]*19including purchases or redemptions, per month into or from the International Stock investment option (IS option) in a three-month period would be “flagged.” Once flagged, PERS would not process more than one redemption request per month by the flagged participant in the IS option. In March 2002, plaintiff received a letter indicating that, because one of the investment funds in the IS option had determined that the frequency of plaintiffs trading activity had been detrimental to the fund’s performance, plaintiff could not make more than one redemption per month from the IS option.

In 2004, PERS adopted a policy that delegated authority to the manager of the Plan to implement reasonable restrictions on trading activity by Plan participants; the basis of the policy was that excessive trading by Plan participants increased administrative expenses and adversely affected the performance of Plan investment funds. Pursuant to that policy, the Plan manager further restricted plaintiffs trading activities in 2005, prohibiting him from transferring more than $100,000 into or from the IS option — a violation of which would result in a prohibition against making any transfers involving the IS option. Despite the 2005 restriction, plaintiff transferred over $200,000 in 2006 from the IS option into another investment option. As a result of that transfer, the Plan manager instituted further restrictions on plaintiffs account in 2006, including a prohibition against transferring funds by telephone or the Internet.

Shortly thereafter, the Plan manager revised the 2006 restrictions, which ultimately resulted in restrictions on the frequency and monetary amount of plaintiffs trading in all of the investment options in the Plan. Plaintiff challenged the revised restrictions, and PERS issued a determination letter that concluded that the revised restrictions had been properly imposed and that plaintiffs excessive trading activity justified their imposition. Plaintiff requested a contested case hearing on the restrictions, which PERS granted.

In May 2007, to deter Plan participants generally from engaging in frequent trading, PERS adopted OAR 459-050-0037 (2008), which provided for a number of restrictions on trading activity by Plan participants. Importantly for this case, the rule provided:

[20]*20“(1) Definitions. For the purposes of this rule:
“(b) ‘Trade’ means a purchase or redemption in an investment option for the purpose of moving monies between investment options.
“(2) Restrictions. The following restrictions apply to all participants:
“(a) A participant may not make a trade that exceeds $100,000.
“(b) A purchase that is attributable to a trade may not be redeemed from the investment option in which the purchase was made for a period of 90 days following the date of the trade.
“(3) The Deferred Compensation Manager, if necessary to comply with trading restrictions imposed by a participating mutual fund * * *, may establish additional temporary trading restrictions.”

As a result of the adoption of OAR 459-050-0037 (2008), the administrative law judge (ALJ) in plaintiffs contested case proceeding issued a proposed order that granted a motion by PERS for summary determination and that dismissed plaintiffs request for a hearing, concluding that the rule rendered moot plaintiffs challenges to the unique, individualized trading restrictions that had been placed on plaintiffs account between 2002 and 2008. PERB subsequently entered a final order that was consistent with the ALJ’s proposed order.2 Plaintiff sought judicial review in this court of PERB’s final order, and that review is pending. Wallace v. State ex rel PERS (A144617).

Before PERB issued its final order in the contested case proceeding, plaintiff filed the present action in circuit court based on the trading restrictions that PERS had placed [21]*21on his account, asserting seven claims against defendant — of which six are pertinent to this appeal.

In plaintiffs first claim (the lack-of-authority claim), he alleged that the trading restrictions imposed by the 2002 and 2004 PERS policies had not been lawfully imposed and that the Plan manager lacked authority under the appropriate statutes and rules to impose sanctions against plaintiff. The claim sought declaratory relief, viz., declarations that the trading restrictions were unlawful and invalid.

In plaintiffs second claim (the breach-of-contract claim), he asserted that the statutory provisions and rules governing the Plan, along with a written agreement between plaintiff and defendant pertaining to his participation in the Plan, provide the terms and conditions of a contract between plaintiff and defendant that was breached by the trading restrictions that defendant had placed on plaintiffs account. For his breach-of-contract claim, he sought declaratory relief establishing the contract and its breach, injunctive relief, and compensatory damages for the breach.

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Related

Wallace v. STATE EX REL. PERB
263 P.3d 1020 (Court of Appeals of Oregon, 2011)

Cite This Page — Counsel Stack

Bluebook (online)
263 P.3d 1020, 245 Or. App. 16, 2011 Ore. App. LEXIS 1123, Counsel Stack Legal Research, https://law.counselstack.com/opinion/wallace-v-state-ex-rel-public-employees-retirement-board-public-orctapp-2011.