S44921 Taylor v. Werner Enterprises, Inc.

SUPREME COURT CASES

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State: Oregon

Docket No: CCDCV95-6616

Case Date: 11/04/1999

Filed: November 4, 1999

IN THE SUPREME COURT OF THE STATE OF OREGON

KEN TAYLOR,

Petitioner on Review,

WERNER ENTERPRISES, INC.,

Respondent on Review.

(CC DCV95-6616; CA A94791; SC S44921)

En Banc

On review from the Court of Appeals.*

Argued and submitted November 3, 1998.

Jacqueline L. Koch, of Findling & Johnson LLP, Portland, argued the cause for petitioner on review. With her on the brief was James Dana Pinney, Tualatin.

R. Daniel Lindahl, of Bullivant, Houser, Bailey, Pendergrass & Hoffman, Portland, argued the cause for respondent on review. With him on the brief was John T. Kaempf, Portland.

Richard David Wasserman, Assistant Attorney General, Salem, filed a brief for amicus curiae Bureau of Labor and Industries. With him on the brief were Hardy Myers, Attorney General, and Michael D. Reynolds, Solicitor General.

RIGGS, J.

The decision of the Court of Appeals is reversed. The judgment of the circuit court is reversed, and the case is remanded to the circuit court for further proceedings.

*Appeal from Clackamas County Circuit Court,

151 Or App 200, 948 P2d 1260 (1997).

RIGGS, J.

In this wage case, plaintiff contends that defendant Werner Enterprises, Inc. (Werner) violated ORS 652.150 by failing to pay plaintiff's wages upon termination of his employment and violated ORS 652.610 by withholding $400 from his wages as a bond. The trial court concluded that Werner was plaintiff's employer and had not violated those statutes. The Court of Appeals affirmed without opinion. Taylor v. Werner Enterprises, Inc., 151 Or App 200, 948 P2d 1260 (1997). We conclude that Werner was plaintiff's employer and is liable for the acts of which plaintiff complains. We reverse the decision of the Court of Appeals and the judgment of the circuit court, and remand the case to the circuit court for further proceedings.

We take the facts from the trial court's findings and from the record. Plaintiff, a long-haul truck driver, signed an employment contract with Driver Management, Inc. (DMI) in 1994. DMI is a wholly owned subsidiary of Werner. DMI hires drivers and leases their services to Werner. The lease, however, was not produced at trial. Werner gives those drivers their assignments and supervises their driving. Werner pays DMI a "per mile" rate for the drivers' services. DMI also pays the drivers a "per mile" rate.

Both DMI and Werner are incorporated in the state of Nebraska. Plaintiff lives in Oregon. In 1994, plaintiff contacted Werner by telephone regarding employment. Werner directed him to its terminal in Denver, Colorado. Plaintiff traveled to Werner's terminal in Denver and completed and signed his employment application. The application disclosed that DMI was plaintiff's prospective employer. Plaintiff was hired and, over the course of his employment, maintained his residence in Oregon and drove throughout the 48 contiguous states and Canada. DMI paid plaintiff for his services by depositing funds directly into plaintiff's Oregon bank account.

When plaintiff signed his contract with DMI, he also signed two agreements authorizing DMI to withhold money from his paychecks. The first agreement authorized DMI to withhold $10 per week from his wages as a "bond," until a total of $400 had been withheld. That agreement specified that the bond would be refunded approximately 60 days after plaintiff's employment ended, as long as there were no claims against the bond and plaintiff returned his Werner identification card. The second agreement provided, in part: "In addition, I authorize Driver Management, Inc., to withhold from my final paycheck and/or bond any and all money due the Company at the time of my termination."

In February 1995, plaintiff gave one month's notice to Werner that he was quitting his job. At that time, DMI already had withheld $400 from plaintiff's wages under the bond agreement. On March 9, 1995, Werner sent one of its employees to plaintiff's home in Portland to pick up plaintiff's truck. On March 15, 1995, DMI issued plaintiff's final wage statement in the amount of $0. The statement reflected a deduction of $500.80 from plaintiff's wages, which DMI had withheld until it could determine whether plaintiff owed it any money. On March 24, 1995, after the truck had been inspected, DMI paid plaintiff the $500.80 that it had withheld. On May 12, 1995, DMI refunded to plaintiff the $400 that it had been holding under the bond agreement.

On June 29, 1995, plaintiff brought this action against Werner. The complaint named only Werner, not DMI, as defendant. Plaintiff made two claims. First, he claimed that Werner had violated ORS 652.150 by withholding wages from his final paycheck. That statute provides for a penalty of up to 30 days' wages "[i]f an employer willfully fails to pay any wages or compensation of any employee whose employment ceases, as provided in ORS 652.140 * * *." According to plaintiff, ORS 652.150 required Werner to pay him all his wages due on the day that his employment ended. Plaintiff sought statutory penalties of $3,736.20 and attorney fees for Werner's alleged noncompliance with that requirement.

Second, plaintiff claimed that, by withholding the $400 bond, Werner violated ORS 652.610(3), which limits the circumstances under which employers may withhold employees' wages. ORS 652.610(3) provides, in part: "No employer may withhold, deduct or divert any portion of an employee's wages

* * *." In that claim, plaintiff sought the $200 statutory penalty mandated by ORS 652.615 and attorney fees.

The trial court transferred the case to mandatory arbitration under ORS 36.405. The arbitrator granted summary judgment to Werner. Plaintiff requested a trial de novo. ORS 36.425(2)(a).(1)

At trial, Werner argued that: (1) plaintiff had sued the wrong party because DMI, not Werner, had withheld plaintiff's bond and wages; (2) even if Werner were the proper defendant, Nebraska law, not Oregon law, governed the parties' employment relationship;(2) and, (3) even under Oregon law, the withholdings were permissible.

The trial court ruled for plaintiff on the first two issues. The court first held that Werner was plaintiff's employer and, therefore, was the proper defendant. Specifically, the court found that Werner had supervised and controlled plaintiff's driving, that Werner had issued plaintiff probation reports, that plaintiff had driven a Werner truck and had worn a Werner uniform, and that DMI had had no actual control over plaintiff. Second, the court concluded that Oregon law governed the parties' employment relationship.

As to the third issue, the trial court held that the withholdings did not violate Oregon law and ruled in defendant's favor on that basis. In ruling against plaintiff on his claim based on ORS 652.150, the court reasoned that Werner did not withhold plaintiff's final paycheck for an unreasonable amount of time and that plaintiff had agreed to that withholding. The trial court also held that Werner did not violate ORS 652.610 by withholding the $400 "bond," because the bond was for plaintiff's benefit, the money ultimately did not go to the employer, and plaintiff had agreed to the withholding. As noted, the Court of Appeals affirmed without opinion.

We turn to the relevant statutes. ORS 652.150 provides, in part:

"If an employer willfully fails to pay any wages or compensation of any employee whose employment ceases, as provided in ORS 652.140 * * * then, as a penalty for such nonpayment, the wages or compensation of such employee shall continue from the due date thereof at the same hourly rate for eight hours per day until paid or until action therefor is commenced; provided, that in no case shall such wages or compensation continue for more than 30 days from the due date[.]"

ORS 652.140(2) provides, in part:

"When an employee who does not have a contract for a definite period quits employment, all wages earned and unpaid at the time of quitting become due and payable immediately if the employee has given to the employer not less than 48 hours' notice, excluding Saturdays, Sundays and holidays, of intention to quit employment. * * *."

ORS 652.610(3) provides, in part:

"No employer may withhold, deduct or divert any portion of an employee's wages unless:

"(a) The employer is required to do so by law;

"(b) The deductions are authorized in writing by the employee, are for the employee's benefit, and are recorded in the employer's books;

"(c) The employee has voluntarily signed an authorization for a deduction for any other item, provided that the ultimate recipient of the money withheld is not the employer, and that such deduction is recorded in the employer's books[.]"

Finally, ORS 652.360 provides, in part:

"No employer may by special contract or any other means exempt the employer from any provision of or liability or penalty imposed by ORS 652.310 to 652.414 or by any statute relating to the payment of wages, except insofar as the Commissioner of the Bureau of Labor and Industries in writing approves a special contract or other arrangement between an employer and one or more of such employer's employees. * * *."

Although Werner attempts to characterize the issues in this case in a variety of ways, the critical and ultimately determinative issue is whether Werner was plaintiff's employer under Oregon law. As to that issue, we look to ORS chapter 652. Unless Werner was plaintiff's employer under ORS 652.150 and ORS 652.610, Werner could not be liable for failure timely to pay wages or for wrongfully withholding wages in the manner alleged in plaintiff's complaint. Our analysis of plaintiff's claims under both of those statutes is parallel, and we address the statutes -- and defendant's alleged failure to comply with them
-- together.

Whether Werner was plaintiff's employer under ORS 652.150 and ORS 652.610 are questions of statutory construction. Accordingly, we employ the interpretive methodology set out in PGE v. Bureau of Labor and Industries, 317 Or 606, 859 P2d 1143 (1993). In interpreting statutes, our task is to determine the intent of the legislature. Id. at 610. The starting point in that determination is an examination of the text and context of the statute. Id. at 610-11. Words of common usage typically should be given their plain, natural, and ordinary meaning. Id. at 611.

ORS 652.310(1) provides the following definition of
"employer":

"As used in ORS 652.310 to 652.414, unless the context requires otherwise:

"(1)'Employer' means any person who in this state, directly or through an agent, engages personal services of one or more employees * * *."

(Emphasis added.) ORS 652.360, to which the definition of "employer" in ORS 652.310(1) applies explicitly, itself applies to "any statute relating to the payment of wages." The statutes on which plaintiff bases his claims, ORS 652.150 and ORS 652.610, prohibit, respectively, untimely payment of wages and certain withholdings of wages -- subjects that directly relate to the "payment of wages." Thus, the definition of employer in ORS 652.310(1) also applies to ORS 652.150 and ORS 652.610, and controls our understanding of the scope of the term "employer" and our analysis of Werner's obligations.

The term "agent" in ORS 652.310(1 carries an ordinary legal meaning. See McIntire v. Forbes, 322 Or 426, 431, 909 P2d 846 (1996) ("Analysis of text also includes reference to well-established legal meanings for terms that the legislature has used."). Generally, an agent is one who has authority to act for another in contractual dealings with third persons. Barnes v. Eastern & Western Lbr. Co., 205 Or 553, 574, 287 P2d 929 (1955). Actual authority to act for another may be either express or implied. Wiggins v. Barrett & Associates, Inc., 295 Or 679, 686, 669 P2d 1132 (1983). A principal is bound by the act of its agent if the agent acts within the scope of the agent's authority. County of Lincoln v. Fischer et al, 216 Or 421, 452, 339 P2d 1084 (1959).

In this case, the trial court found and the evidence indicates that Werner created DMI as a separate but wholly owned subsidiary corporation for payroll purposes. The trial court also found that plaintiff drove a Werner truck and that plaintiff served exclusively under the operational direction and control of Werner, not DMI. Further, the trial court found that Werner, not DMI, hired and disciplined plaintiff. DMI and plaintiff entered into an employment contract that ultimately was intended to provide plaintiff's driving services to Werner. On these facts, we conclude that DMI was Werner's agent and that Werner was an employer of plaintiff within the meaning of ORS 652.150 and ORS 652.610(3).

Werner further argues that, because DMI is a separate corporation and because plaintiff signed a form including the statement, "Prospective employee hereby acknowledges that if hired he or she will be an employee of DRIVER MANAGEMENT, INCORPORATED, a Nebraska corporation," that only DMI, not Werner, can be considered plaintiff's employer. ORS 652.360, however, provides, in part:

(Emphasis added.) Werner claims that ORS 652.360 does not apply to ORS 652.150 or ORS 652.610, because those statutes are not named in ORS 652.360. In so arguing, Werner ignores the emphasized wording, which encompasses the statutes on which plaintiff bases his claims. As explained above, ORS 652.150 and ORS 652.610 relate to the payment of wages. Therefore, under ORS 652.360, the agreements signed by plaintiff cannot exempt Werner from liability or any penalty imposed by Werner's violations of ORS 652.150 and ORS 652.610.(3)

We turn to whether Werner violated ORS 652.150, which prohibits employers from willfully failing to pay wages owed under, among other statutes, ORS 652.140. ORS 652.140(2) provides that wages are due immediately to an employee who quits if the employee gives at least 48 hours' notice. In this case, plaintiff gave one month's notice before quitting his employment, entitling him to be paid immediately.

This court on several occasions has addressed the meaning of "willfully fail to pay." In State ex rel Nilsen v. Johnston, 233 Or 103, 108, 377 P2d 331 (1962), the court provided the following definition of the term "wilful" in ORS 652.150:

"'* * * the word "wilful" * * * does not necessarily imply anything blamable, or any malice or wrong toward the other party, or perverseness or moral delinquency, but merely that the thing done or omitted to be done was done or omitted intentionally. It amounts to nothing more than this: That the person knows what he is doing, intends to do what he is doing, and is a free agent.'

"That definition excludes the individual who does not know that his employee has left his employ or who has made an unintentional miscalculation."

(quoting Davis v. Morris, 37 Cal App 2d 269, 274, 99 P2d 345, 348 (1940)) (emphasis added).(4) In keeping with that definition, the court concluded that employers willfully fail to pay their employees when they "fail to compensate their employees although they are fully aware of their obligation to do so." Nilsen, 233 Or at 108.

The question, then, is whether Werner, as the employer, had, or can be imputed to have had, a level of awareness of its obligation to pay plaintiff such that its failure to pay was "willful." We hold that it can. The fact that Werner chose to use the services of an agent, DMI, in arranging its employment of plaintiff and other drivers does not relieve or otherwise insulate Werner from its duties and responsibilities under ORS 652.150, nor does it lead to any reasonable inference that, by assigning those tasks to another entity, Werner somehow absolved itself of the knowledge that it would be liable for payment of services that it received from plaintiff. In that sense, Werner knew what its agent, DMI, knew. DMI issued a final wage statement in the amount of $0. That fact shows that there was neither a mistake nor a calculation error, but rather an intention not to pay wages when due. DMI's - and, therefore, Werner's -- failure to pay or to arrange for proper payment of wages was willful.

Finally, we turn to whether Werner, as plaintiff's employer, withheld plaintiff's wages in violation of ORS 652.610. DMI withheld two separate amounts from plaintiff's final paycheck: $500.80 in regular wages and the $400 "bond."

The wording of ORS 652.610(3)(b) is unambiguous. An item must fall within its strictures to be deducted under it -- that is, the employee's written authorization must be given, and the deduction must be recorded in the employer's books and must be for the ultimate benefit of the employee. ORS 652.610(3)(b). Potential liability of an employee to the employer is not a reason that supports a lawful deduction.

Similarly, ORS 652.610(3)(c) is unambiguous. To be a lawful deduction under that section, the employee must authorize it voluntarily, the ultimate recipient of the money cannot be the employer, and the deduction must be recorded in the employer's books. Werner argues that the withholding was lawful under ORS 652.610(3)(c) because the employer was not the "ultimate recipient" of the money. We reject that argument. If Werner needed the money to cover any liability that plaintiff owed it at the time of plaintiff's termination, then Werner would have kept part of or all the wages withheld. The fortuity that the condition of the truck and equipment met Werner's approval -- and, thus, that plaintiff eventually received the wages -- does not make Werner's conduct lawful. Nothing in ORS 652.610 suggests that the legislature intended to permit employers to withhold, temporarily, wages that they cannot withhold permanently.

Finally, Werner contends that the amounts held as the personal bond were not "wages" under ORS 652.140(2): "[T]he fact that [p]laintiff paid for the bond from his wages does not make the bond itself 'wages.'" That assertion is not well taken. The money that Werner withheld did not lose its character as wages merely because it was held in a fund that Werner chose to call a "personal bond." To hold otherwise would allow employers to evade the wage claim laws by the simple expedient of calling wages by a different name. ORS 652.610 prohibited Werner from withholding plaintiff's wages in the first place. ORS 652.140(2) required Werner to pay those wages immediately when plaintiff ended his employment. The trial court erred in holding otherwise.

In sum, we hold that Werner was plaintiff's employer and, therefore, was subject to the requirements of ORS 652.150 and ORS 652.610. Werner improperly withheld $500.80 in wages and $400 as a "bond" from plaintiff's final paycheck, and the trial court erred in concluding that the withholding was for plaintiff's benefit. Accordingly, plaintiff is entitled to recover under ORS 652.150 and 652.610(3)(c), together with penalties and attorney fees.

The decision of the Court of Appeals is reversed. The judgment of the circuit court is reversed, and the case is remanded to the circuit court for further proceedings.

1. Plaintiff also moved to amend his complaint to add DMI as a defendant. The trial court denied the latter motion, and plaintiff did not assign the denial as error on appeal.

Return to previous location.

2. Werner does not contest personal jurisdiction in Oregon.

Return to previous location.

3. Werner does not argue that the Commissioner of the Bureau of Labor and Industries approved the agreements at issue in this case.

Return to previous location.

4. Although ORS 652.150 has undergone minor amendments in the interval between the cases cited herein and this case, including the change in spelling of the word "willfully," the relevant statutory text has remained unchanged.

Return to previous location.

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Filed: June 30, 2011 IN THE SUPREME COURT OF THE STATE OF OREGON In Re: Complaint as to the Conduct of J. MARK LAWRENCE, Accused. (OSB 08-115; SC S058778) En Banc On review of the decision of a trial panel of the Disciplinary Board. Argued and submitted May 2, 2011. Paula Lawrence, McMinnville, argued and cause and filed the briefs for accused. Stacy Hankin, Assistant Disciplinary Counsel, Tigard, argued the cause and filed the brief for the Oregon State Bar. PER CURIAM The complaint is dismissed. PER CURIAM The issue in this lawyer disciplinary proceeding is whether the accused, by releasing a partial transcript of a juvenile hearing to the press, violated Rule of Professional Conduct (RPC) 8.4(a)(4), which prohibits a lawyer from engaging in conduct that is prejudicial to the administration of justice. A trial panel found the accused guilty of violating RPC 8.4(a)(4) and suspended him for 60 days. We review the decision of the trial panel de novo. ORS 9.536(2); BR 10.6. Because we conclude that

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the Bar failed to prove by clear and convincing evidence that the accused's conduct caused prejudice to the administration of justice, we dismiss the complaint. The facts are straightforward and largely undisputed. In 2007, the accused represented a juvenile male who, along with another male friend, allegedly had touched or swatted several female classmates on the buttocks and had danced in front of the females in a lascivious manner. The incident occurred at the students' middle school. After being informed of the youths' behavior, the vice principal and a police officer interviewed the victims. Based on those interviews, the accused's client and his friend were arrested by a McMinnville Police Officer on February 22, 2007. On February 23, the Yamhill County Juvenile Department filed a delinquency petition alleging that the accused's client had committed acts that, if done by an adult, would have constituted five counts of first-degree sexual abuse and five counts of third-degree sexual abuse. At an initial detention hearing that same day, the court ordered the youths to remain in custody. The events giving rise to this disciplinary action arose out of a second detention hearing held on February 27, 2007, before Judge John Collins. The accused called two of the victims to testify on behalf of his client. The female victims testified that the youths were their friends and that they did not find the youths to be threatening in any way. Regarding the alleged sexual abuse, the female victims testified that the touching or swatting was not sexual in nature but rather was mere horseplay. The victims also testified that they felt pressured by the vice principal and the police officer to make the touching sound hurtful and uncomfortable when it was not. By the second detention hearing, the case was receiving substantial media 2

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attention. Judge Collins allowed the press to attend the detention hearing, but prohibited the press from recording the proceedings. The parties dispute whether the judge prohibited only video recordings or also prohibited audio recordings.1 A number of newspaper and television stories reported the events and testimony at the hearing. After the hearing, the accused obtained a copy of the official audio recording of the hearing and had a partial transcript prepared that contained the victims' testimony. In March 2007, a reporter contacted the accused about the February 27 hearing. The reporter, who was not present at the hearing, expressed disbelief that the female victims had felt pressured by the vice principal and the police officer to make the youths' actions seem sexual. The accused offered to give the reporter a copy of the partial transcript when it was available. The accused believed that it would have been improper to give the reporter the official audio recording of the hearing but thought that the transcript could be released. The accused contacted Deborah Markham, the deputy district attorney handling the case, to see if she objected to releasing the transcript. Markham told the accused that she believed that the court would have to consent. The accused then released the transcript to the reporter without obtaining permission from Judge Collins. Deputy District Attorney Deborah Markham testified that Judge Collins prohibited video recording. Judge Collins testified that he might have prohibited the press from recording the detention hearing, but that he did not remember whether he did so or not. He did remember allowing video recording at a later hearing in the proceeding. The accused testified that Judge Collins prohibited video recording but that he could not remember if the judge prohibited audio recording.
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When Judge Collins learned that the transcript had been released -following news reports that cited the transcript -- he called a meeting with Markham and the accused and told them to release no other transcripts. The testimony from the accused, Markham, and Judge Collins differs regarding that meeting. The accused described the meeting as relaxed and said that Judge Collins had stated that the release of the transcript was permissible. Markham testified that Judge Collins was "very concerned" about the release of the transcript and that Judge Collins said that the accused's disclosure violated the law. Judge Collins testified that the accused did not get his consent to release the transcript, but that he was not sure if the accused needed to do so under the circumstances of the case, particularly given the presence of the press at the hearing. In Judge Collins's description, the meeting was not contentious; although he requested that the parties refrain from releasing any additional transcripts, he did not "feel like [he] needed to be firm" and so did not issue an order barring further releases. In April 2008, several months after the juvenile case was resolved, Tim Loewen, director of the Yamhill County Juvenile Department, reported the accused's action of releasing the transcript to the Bar. After investigating the matter, the Bar charged the accused with violating RPC 8.4(a)(4)2 by releasing to the press "information
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RPC 8.4(a) provides, in relevant part: "It is professional misconduct for a lawyer to: "* * * * * "(4) engage in conduct that is prejudicial to the administration of

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appearing in the record" of a juvenile case without court consent, in violation of ORS 419A.255(1) and (3).3 The Bar alleged that the accused had "usurped" Judge Collins's authority to control the proceeding by not seeking the court's consent before releasing the transcript, and thereby had caused prejudice to the administration of justice. In the proceeding before the trial panel, the accused argued that his release of the transcript did not violate ORS 419A.255 for each of three independent reasons: (1) the transcript that he had prepared was not a part of the record of the case and so was not subject to ORS 419A.255; (2) Judge Collins had consented to the release of the information contained in the transcript when he allowed the press to attend and report on

justice[.]"
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ORS 419A.255 provides, in relevant part:

"(1) The clerk of the court shall keep a record of each case, including therein the summons and other process, the petition and all other papers in the nature of pleadings, motions, orders of the court and other papers filed with the court, but excluding reports and other material relating to the child, ward, youth or youth offender's history and prognosis. The record of the case shall be withheld from public inspection but is open to inspection by the child, ward, youth, youth offender, parent, guardian, court appointed special advocate, surrogate or a person allowed to intervene in a proceeding involving the child, ward, youth or youth offender, and their attorneys. The attorneys are entitled to copies of the record of the case. "* * * * * "(3) Except as otherwise provided in subsection (7) of this section, no information appearing in the record of the case or in reports or other material relating to the child, ward, youth or youth offender's history or prognosis may be disclosed to any person not described in subsection (2) of this section without the consent of the court * * * ."

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the hearing; and (3) the information in the transcript could be released under ORS 419A.255(5)(b) and (d), which list certain exceptions to the confidentiality of juvenile records. Even assuming that he did violate ORS 419A.255, the accused asserted, he did not violate RPC 8.4(a)(4), because his conduct was not prejudicial to the administration of justice. That was so, according to the accused, because the defendant and the victims supported releasing the transcript and because the information contained in the transcript had already been made public as a result of the press attending and reporting on the hearing. Thus, in the accused's view, no harm -- actual or potential -- resulted from his conduct. The trial panel found by clear and convincing evidence that the accused had violated RPC 8.4(a)(4) and suspended the accused from the practice of law for 60 days. The trial panel first determined that ORS 419A.255(3) prohibited the accused from releasing the partial transcript to the press without the consent of the trial court and that the accused had violated the statute in doing so. With little discussion, the trial panel then found that the evidence that the accused had violated the statute also was sufficient to show prejudice to the administration of justice and thus that the accused had violated RPC 8.4(a)(4). The accused sought review in this court. To prove a violation of RPC 8.4(a)(4), the Bar must prove (1) that the accused lawyer's action or inaction was improper; (2) that the accused lawyer's conduct occurred during the course of a judicial proceeding; and (3) that the accused lawyer's conduct had or could have had a prejudicial effect upon the administration of justice. See In re Kluge, 335 Or 326, 345, 66 P3d 492 (2003) (citing In re Haws, 310 Or 741, 746-48, 6

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801 P2d 818 (1990)) (so stating for identically worded former DR 1-102(A)(4)). Because we find the issue to be dispositive, we begin by examining the third element -- whether the accused's conduct had or could have had a prejudicial effect on the administration of justice -- and assume, without deciding, that the accused's conduct violated ORS 419A.255(3) and otherwise satisfied the test set out in Kluge and Haws. Prejudice to the administration of justice "may arise from several acts that cause some harm or a single act that causes substantial harm to the administration of justice." Kluge, 335 Or at 345. This court has identified two components to the "administration" of justice: "1) The procedural functioning of the proceeding; and 2) the substantive interest of a party in the proceeding." Haws, 310 Or at 747. "A lawyer's conduct could have a prejudicial effect on either component or both." Id. The Bar argues that the accused's conduct, a single act, resulted in prejudice to the administration of justice because it had the potential to cause substantial harm to the procedural functioning of the court. The Bar asserts, "Substantial potential harm to the administration of justice occurs whenever a lawyer interferes in or usurps the court's ability to do its job in a proceeding pending before it." The Bar states that the accused "usurped" the court's authority by not seeking Judge Collins's consent prior to releasing the transcript. The Bar cites three disciplinary cases to support its position that the accused's conduct resulted in substantial potential harm to the administration of justice. First, in In re Eadie, 333 Or 42, 36 P3d 468 (2001), this court found a violation of former DR 1-102(A)(4) where the accused lawyer submitted a proposed order containing a 7

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misrepresentation that was intended to influence the judge in changing the trial date. Id. at 58. That conduct substantially harmed the procedural functioning of the court because it resulted in the judge acquiescing to a trial date preferred by the accused and made it necessary for the judge to resolve a dispute resulting from the accused's misrepresentation and to redraft an order. Id. Second, in In re Morris, 326 Or 493, 953 P2d 387 (1998), this court concluded that the accused lawyer had engaged in a single act of conduct that had the potential to cause substantial harm, either to the procedural functioning of the court or to the substantive interests of the parties, when she knowingly filed a notarized document that she had altered. Id. at 502-03. Third, in In re Thompson, 325 Or 467, 940 P2d 512 (1997), this court found a violation of former DR 1-102(A)(4) where the accused lawyer physically confronted a judge after receiving an adverse decision. That conduct caused substantial harm to the administration of justice because the accused's ex parte communication with the judge "unfairly attack[ed] the independence, integrity, and respect due a member of the judiciary." Id. at 475. The conduct also had the potential to cause substantial harm, because it could have influenced the judge to change her decision or to recuse herself from the case. Id. In each of the preceding cases, the accused lawyer engaged in conduct that had the potential to disrupt or to improperly influence the court's decision-making process, Thompson, 325 Or at 475; that created unnecessary work for the court, Eadie, 333 Or at 58; or that had the potential to mislead the court, Morris, 326 Or at 503. Moreover, in Eadie and Morris, the accused lawyers made knowing misrepresentations to the court. Similarly, in Kluge, the accused lawyer's conduct in knowingly filing an 8

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untimely motion to disqualify the trial judge and then failing to serve the motion on opposing counsel caused prejudice to "the procedural functioning of the judicial system by imposing a substantial burden upon both opposing counsel and [the trial judge] to undo the accused's actions." 335 Or at 346. In this case, the Bar has made no showing, as required by Kluge and Haws, that the accused's conduct harmed the procedural functioning of the judicial system, either by disrupting or improperly influencing the court's decision-making process or by creating unnecessary work or imposing a substantial burden on the court or the opposing party. Nor has the Bar shown that his conduct had the potential to result in any of the above. Certainly, Judge Collins did not testify that the accused's actions interfered with Judge Collins's conduct of the juvenile proceeding. Although the Bar correctly asserts that ORS 419A.255 gives the trial court control over the release of protected information in a juvenile record -- and, as noted, we assume without deciding that the accused acted improperly in not seeking the trial court's consent -- the Bar's theory fails to take into account the fact that the information contained in the partial transcript that the accused released was presented in open court and had already been reported by the press.4 It is difficult to see how the accused's release of the same information, in the context of this case, had the potential to cause any harm to the proceeding, much less substantial harm.

Article I, section 10, of the Oregon Constitution grants members of the public, including the press, the right to attend juvenile hearings. State ex rel Oregonian Pub. Co. v. Deiz, 289 Or 277, 284-85, 613 P2d 23 (1980).

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See Kluge, 335 Or at 345 (prejudice to the administration of justice may arise from "several acts that cause some harm or a single act that causes substantial harm"). Indeed, the Bar makes no effort to show that the accused's conduct could have resulted in new information being made public or that the release of the partial transcript itself had any potential impact on the proceeding. In fact, after the press attended the hearing and the accused released the transcript, Judge Collins allowed members of the press to listen to the official audio recording of the hearing. Nevertheless, the Bar asserts that Judge Collins was sufficiently "concerned" about the release of the information to call the accused and Markham to his chambers to discuss the incident. The fact that Judge Collins was "concerned" and met with the accused and Markham does not, by itself, demonstrate the potential for substantial harm to the procedural functioning of the court. Judge Collins himself stated that, although "in a perfect world," he probably would not have wanted the transcript released, in the context of this case and the open court provision of Article I, section 10, of the Oregon Constitution, the release of the partial transcript was likely permissible without his consent because "if [the press is] * * * going to know the information and report the information, at least get it right." Judge Collins's testimony, then, does not demonstrate that the accused's conduct impacted the procedural functioning of the court, even if the accused's conduct was cause for "concern." Nor does the Bar offer any evidence to prove that the release of the partial transcript harmed the substantive interests of the accused's client, the victims, or the state. The accused released the transcript, with the support of his client, in response to an 10

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inquiry from the media and in order to respond to inaccuracies appearing in some media reports. The accused maintained the confidentiality of the victims' names in the transcript, referring to them by their initials, consistent with an earlier order by Judge Collins. In this proceeding, the accused also submitted letters from the two victims who testified (and their parents) that stated their support for the release of the partial transcript. Finally, there was no testimony from the Yamhill County Juvenile Department that the release of the partial transcript had any effect on its substantive interests or its ability to prosecute the case. The Bar appears, instead, to take the position that virtually any violation of a statute, rule, or court order that occurs during the course of a court proceeding and relates to the conduct or any procedural aspect of that proceeding necessarily is prejudicial to the administration of justice. The Bar asserts, in effect, that "substantial potential" harm is implicit in the accused's conduct. Our cases, however, require proof by clear and convincing evidence that an accused's conduct in a specific judicial proceeding caused actual or potential harm to the administration of justice and, when only one wrongful act is charged, that actual or potential harm must be "substantial." Kluge, 335 Or at 345; Haws, 310 Or at 748. Here, the Bar's evidence did not prove that substantial harm resulted or could have resulted from the accused's conduct. We conclude that the Bar has not proved by clear and convincing evidence that the accused violated RPC 8.4(a)(4). The accused's conduct did not result in such prejudice, because there is no evidence that the release of the partial transcript, which contained solely information already presented in open court and reported by the press, 11

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harmed the procedural functioning of the judicial system. Nor is there any evidence that the substantive rights of the accused's client, the other juvenile defendant, the victims, or the state were harmed. "Prejudice to the administration of justice" requires such a showing. Haws, 310 Or at 747-48. The complaint is dismissed.

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