Federation of Parole & Probation Officers v. State Ex Rel. Oregon Department of Corrections , 144 Or. App. 535 ( 1996 )

LEESON, J.

Plaintiffs Federation of Parole and Probation Officers (FOPPO) and James Kiely (Kiely) appeal from a summary judgment for respondent State of Oregon. ORS 19.010. The issue is whether ORS 423.549, which transfers to the counties the duties of state parole and probation officers, but does not transfer the officers themselves, violates various provisions of the Oregon Constitution. The trial court concluded that it did not and granted the state’s motion for summary judgment. We affirm.

FOPPO is a labor organization that represents all state and most county parole and probation officers. Kiely, a state parole and probation officer, is the president of FOPPO. State and county parole and probation officers are public employees. ORS 236.610, which was enacted in 1963, provides that

“(1) No public employee shall be deprived of employment solely because the duties of employment have been assumed or acquired by another public employer, whether or not an agreement, annexation or consolidation with the present employer is involved. Notwithstanding any statute, charter, ordinance or resolution, but subject to ORS 236.605 to 236.640, the public employee shall be transferred to the employment of the public employer that assumed or acquired the duties of the public employee, without farther civil service examination.”

Notwithstanding ORS 236.610, the 1995 legislature enacted ORS 423.549, popularly known as Senate Bill 1145, section 16. That statute takes effect January 1,1997 and provides, in part:

“(1) Notwithstanding ORS 236.605 to 236.640, all state positions in the state community corrections ¹ branch of the Department of Corrections, the funding for which is transferred to counties, are abolished on January 1, 1997. Counties have sole discretion in the development of methods and means of county community corrections operation under ORS 423.500 to 423.560 including establishment of wages, benefits and working conditions and selection of any employees to operate supervision programs or other services and sanctions * *

The parties agree that ORS 423.549 transfers the duties of all state parole and probation officers to the counties, but it does not transfer the officers. The effect of the statute is to eliminate all state parole and probation jobs as of January 1,1997.

Plaintiffs brought this action seeking both a declaration that ORS 423.549 violates their rights under the state constitution and an injunction prohibiting the state from implementing the statute unless plaintiffs are transferred to county employment. Their complaint alleges four causes of action, which we summarize as follows:

1. ORS 236.610 is a unilateral contract offer by the state that was accepted through part performance by plaintiffs and that created a statutory contract between the state and plaintiffs that guarantees them job transfers if another public employer assumes their duties. ORS 423.549 impairs the state’s obligations under that contract, in violation of Article I, section 21, of the Oregon Constitution;

2. ORS 423.549 grants to county parole and probation officers privileges (i.e., the retention of transfer rights) not equally given to state parole and probation officers, in violation of Article I, section 20, of the Oregon Constitution;

3. ORS 423.549 violates plaintiffs’ due process rights, in violation of Article I, section 10, of the Oregon Constitution;

4. ORS 423.549 amounts to a taking of private property (i.e., the transfer rights provided by ORS 236.610) for public use without just compensation, in violation of Article I, section 18, of the Oregon Constitution.

The state argued to the trial court that ORS 236.610 is not a statutory contract. Consequently, according to the state, there is no contract for ORS 423.549 to impair, plaintiffs have no property interest to be taken, and plaintiffs will suffer no legally cognizable injury when ORS 423.549 takes effect. Further, the state argued, state parole and probation officers are not a true class under Article I, section 20, and, even if they are, the state has a rational basis for treating state parole and probation officers differently from county parole and probation officers. Both parties moved for summary judgment. The trial court granted the state’s motion and denied plaintiffs’ motion.

Plaintiffs’ four assignments of error on appeal reiterate the four claims they made below. Because there are no genuine issues of material fact, we review the trial court’s grant of summary judgment only to determine if the state was entitled to judgment as a matter of law. Jones v. General Motors Corp., 139 Or App 244, 911 P2d 1243, rev allowed 323 Or 483 (1996). Whether ORS 423.549 violates the state constitution is a question of law. See Oregon State Police Officers’ Assoc. v. State of Oregon, 323 Or 356, 361, 918 P2d 765 (1996) (stating standard of review of circuit court’s declaration that ballot measure violates federal constitution).

Plaintiffs first assign error to the trial court’s holding that ORS 423.549 does not violate Article I, section 21, of the Oregon Constitution (the Contracts Clause). That clause provides that “[n]o * * * law impairing the obligation of contracts shall ever be passed [.]” The Supreme Court has held that the Contracts Clause applies to contracts made by the state as well as to contracts between private parties. Eckles v. State of Oregon, 306 Or 380, 390, 760 P2d 846 (1988), appeal dismissed 490 US 1032 (1989). As a result, “if the appropriate contractual conditions are met, one legislature may bind a succeeding legislature to a particular course of action.” Hughes v. State of Oregon, 314 Or 1, 13, 838 P2d 1018 (1992). To establish a violation of the Contracts Clause, plaintiffs must show both that a contract between themselves and the state exists and that some law impairs the obligations arising from that contract. Id. at 13-14.

The first, and in this case dispositive, question is whether ORS 236.610 creates a contract between plaintiffs and the state. The Supreme Court has held that a contract will not be inferred from any legislation unless that legislation “unambiguously expresses an intention to create a contract.” Id. at 17 (emphasis supplied). Where doubt concerning the formation of such an agreement exists, that rule eliminates the state’s alleged contractual obligations. Eckles, 306 Or at 397. Where the legislation “contain[s] nothing indicative of a legislative commitment not to repeal or amend the statute in the future,” a statutory contract probably cannot be found. Id. at 391. Because a statutory contract unambiguously must express that legislative commitment, resort to the legislative history to root out some latent legislative promise is inappropriate. See PGE v. Bureau of Labor and Industries, 317 Or 606, 611-12, 859 P2d 1143 (1993) (courts may examine legislative history to discern legislative intent only when that intent is not clear from text and context of statute). Legislative history can resolve ambiguity but cannot remove it.² A statute is unambiguous where the text provides support for only one plausible interpretation. See Heinzel v. Backstrom, 310 Or 89, 96, 794 P2d 775 (1990) (contract is ambiguous if it supports conflicting interpretations); see also Hughes, 314 Or at 14 (general principles of contract law normally govern inquiry into whether statute creates contractual obligations for state).

Plaintiffs read ORS 236.610 as a guarantee to public employees that, so long as they remain public employees, they will be transferred to any public employer that subsequently assumes their job responsibilities, and that this guarantee may not be withdrawn by any past, present, or future statute, charter, ordinance, or resolution. The state concedes that plaintiffs’ reading of ORS 236.610 is plausible. We agree. By its terms, ORS 236.610 supersedes “any statute, charter, ordinance or resolution.” (Emphasis supplied.) “Any statute” could refer to past, present or future statutes, including ORS 423.549. Had the legislature intended ORS 236.610 to supersede only statutes in existence in 1963, it could have done so simply by inserting the word “existing” into the text of the statute. Furthermore, ORS 236.610(1) contains emphatic, mandatory language: “No public employee shall be deprived of employment solely because the duties of employment have been assumed or acquired by another public employer!;] * * * [notwithstanding any statute * * * the public employee shall be transferred[.]” (Emphasis supplied.)

Despite the state’s concession that plaintiffs’ interpretation of ORS 236.610 is plausible, the state argues that the statute supports another interpretation. It contends that ORS 236.610 means that, so long as the statute remains fully in force, public employees will be transferred to any public employer that subsequently assumes their job responsibilities, notwithstanding any prior statute, charter, ordinance, or resolution to the contrary. The state is correct that no term of the statute explicitly binds future legislatures to a particular course of action. Although the legislature could have created contractual obligations for itself with explicit statutory language specifically prohibiting future amendment or repeal, nothing in the statute so insulates it. The presence of the phrase “shall be” in the statute does not prohibit amendment or repeal. Nor does that phrase alone suffice to create contractual obligations on behalf of the state.³ A statute must be considered “in its entirety” and must “clearly and plainly” indicate the legislature’s intention to surrender its sovereign power to alter and change policy in the interest of public welfare. Campbell v. Aldrich, 159 Or 208, 212, 217, 79 P2d 257, appeal dismissed 305 US 559 (1938). Consequently, the state’s interpretation also is plausible.

Because both plaintiffs’ and the state’s interpretations of ORS 236.610 are plausible,⁴ the statute does not unambiguously express an intention to create a contract.⁵ Thus, ORS 236.610 does not create a contract. Consequently, plaintiffs have no statutory contract rights subject to impairment by ORS 423.549.

Plaintiffs next assign error to the trial court’s holding that ORS 423.549 does not violate Article I, section 20, of the Oregon Constitution, which prohibits laws “granting to any citizen or class of citizens privileges, or immunities, which, upon the same terms, shall not equally belong to all citizens.” The threshold question in that analysis is whether plaintiffs constitute a “class of citizens.” The Supreme Court has interpreted that phrase to mean citizens who possess “antecedent personal or social characteristics or societal status” by which they could be “singled out from the general population.” Hale v. Port of Portland, 308 Or 508, 525, 783 P2d 506 (1989); see also Hewitt v. SAIF, 294 Or 33, 45, 653 P2d 970 (1982) (identifying race, alienage, gender, and nationality as immutable characteristics). State parole and probation officers exist as a “class” solely because of the statutory scheme creating community corrections officers and that class remains open for anyone to join on equal terms. Such open classes “are not even considered to be classes for the purposes of Article I, section 20.” Sealey v. Hicks, 309 Or 387, 397, 788 P2d 435, cert den 498 US 819 (1990); Wilson v. Dept. of Rev., 302 Or 128, 132-33, 727 P2d 614 (1986); State v. Clark, 291 Or 231, 240-41, 630 P2d 810, cert den 454 US 1084 (1981); Jarvill v. City of Eugene, 289 Or 157, 184-85, 613 P2d 1, cert den 449 US 1013 (1980).

Plaintiffs’ third and fourth assignments of error merit only passing mention in the light of our conclusion that ORS 236.610 is not a statutory contract. Because there is no contract, ORS 236.610 created no contractual obligations on the state and no property rights for plaintiffs. Consequently, plaintiffs have no property that could be “taken” in violation of Article I, section 18, of the Oregon Constitution.⁶ For the same reason, ORS 423.549 does not violate Article I, section 10, of the Oregon Constitution.⁷ Because plaintiffs have no property rights under ORS 236.610, repeal of the transfer provision as to state parole and probation officers does not constitute a legally cognizable injury to plaintiffs for which the law must provide a remedy.

The trial court did not err in granting summary judgment to the state on plaintiffs’ constitutional claims under Article I, sections 21, 20, 18 and 10, of the Oregon Constitution.

Affirmed.

1 State and county “parole and probation” officers are also known as state and county “community corrections” officers.

2 The concurrence therefore errs in consulting legislative history in this case.

3 Hughes is not to the contrary. There, the court held that the entire PERS statutory scheme constitutes a contract, but it expressly refused to consider whether former ORS 237.201, which used the phrase "shall be,” by itself created a contract. Hughes, 314 Or at 21 n 27.

4 We agree with the concurrence that other interpretations of ORS 236.610 are plausible. We limit our discussion to the two interpretations advanced by the parties.

5 In a memorandum of supplemental authority, plaintiffs cite Oregon State Police Officers’ Assoc. v. State of Oregon, 323 Or 356, 371, 918 P2d 765 (1996), for the proposition that “the state may undertake binding contractual obligations with its employees, including benefits that may accrue in the future for work not yet performed.” (Emphasis omitted.) That case does not support plaintiffs’ contention that ORS 236.610 creates a statutory contract. The question in this case is not whether the state may undertake contractual obligations, but rather whether the state did undertake contractual obligations when it enacted ORS 236.610. Because the court in Oregon State Police Officers’ Assoc, started from the well-established premise that PERS is a contract, it never addressed the issue of statutory contract formation. Consequently, that case is inapposite.

6 Article I, section 18, of the Oregon Constitution provides, in relevant part:

“Private property shall not be taken for public use * * * without just compensation * *

7 Article I, section 10, of the Oregon Constitution provides, in relevant part: “[E]very man shall have remedy by due course of law for injury done him in his person, property, or reputation.”