S48171 Shoup v. Wal-Mart Stores, Inc.

SUPREME COURT CASES

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State: Oregon

Docket No: none

Case Date: 01/31/2003

Filed: January 31, 2003

IN THE SUPREME COURT OF THE STATE OF OREGON

MABLE SHOUP,

Petitioner on Review,

WAL-MART STORES, INC.,

Respondent on Review.

(97C-14504; CA A106153; SC S48171)

En Banc

On review from the Court of Appeals.*

Argued and submitted November 6, 2001.

J. Michael Alexander, of Swanson, Lathen, Alexander & McCann, P.C., Salem, argued the cause and filed the briefs for petitioner on review. With him on the briefs was Charese Rohny, of Vick & Conroyd, LLP, Salem.

Peter R. Chamberlain, of Bodyfelt, Mount, Stroup & Chamberlain, Portland, argued the cause and filed the brief for respondent on review. With him on the brief was Jennifer J. Peet, Portland.

Meagan A. Flynn, of Preston, Bunnell & Stone, LLP, Portland, filed the brief for amicus curiae Oregon Trial Lawyers Association.

Lindsey H. Hughes, of Keating, Jones, Bildstein & Hughes, P.C., Portland, filed the brief for amicus curiae Oregon Association of Defense Counsel.

BALMER, J.

The decision of the Court of Appeals is reversed in part and affirmed in part. The judgment of the circuit court is affirmed.

*Appeal from Marion County Circuit Court, Joseph V. Ochoa, Judge. 171 Or App 357, 15 P3d 588 (2000).

BALMER, J.

Plaintiff brought this negligence action against Wal-Mart, Inc. (defendant), after one of defendant's employees injured plaintiff by bumping into her and knocking her to the floor. The jury considered three specifications of negligence and returned a general verdict in plaintiff's favor. The Court of Appeals reversed and remanded the case for a new trial, holding that one of plaintiff's specifications did not state a claim for negligence under Oregon law and that defendant, therefore, was entitled to a new trial under the "we can't tell" rule that this court announced in Whinston v. Kaiser Foundation Hospital, 309 Or 350, 788 P2d 428 (1990). Shoup v. Wal-Mart Stores, Inc., 171 Or App 357, 359, 15 P3d 588 (2000). We allowed plaintiff's petition for review. As explained below, we conclude that allowing defendant a new trial under the "we can't tell" rule is incompatible with ORS 19.415(2), which provides that "[n]o judgment shall be reversed or modified except for error substantially affecting the rights of a party." Accordingly, we reverse in part the decision of the Court of Appeals.

The record establishes the following material facts. Plaintiff, who was then 89 years old, entered defendant's store and attempted to walk past defendant's employee, who was standing in the aisle with his back toward plaintiff. The employee, to get out of the way of another shopper, suddenly stepped backward, striking plaintiff in the face with his elbow and knocking her to the floor. Plaintiff was rendered momentarily unconscious, and she suffered extensive bruises and other soft-tissue injuries.

Plaintiff brought an action alleging that defendant was negligent in (1) failing to supervise its employee, (2) instructing its employee to stand in the aisle and thereby create an obstacle to persons entering the store, and (3) failing to train its employee to keep a proper lookout. Plaintiff further alleged that defendant was vicariously liable for the negligence of its employee in (1) failing to use reasonable care, (2) failing to keep a proper lookout, and (3) failing to maintain control over his body. Defendant admitted that its employee was acting within the course and scope of his employment when he injured plaintiff.

The action was tried to a jury. At the close of plaintiff's case, defendant moved for a directed verdict, making particular objections to each of plaintiff's specifications of negligence. The trial court granted defendant's motion in part, but allowed three specifications to go to the jury: whether defendant was negligent in instructing its employee to stand in the aisle; whether defendant's employee was negligent in failing to use reasonable care; and whether defendant's employee was negligent in failing to keep a proper lookout.

At the close of defendant's case, plaintiff proffered a verdict form that asked two separate questions, one regarding defendant's negligence and one regarding the negligence of defendant's employee. Defendant objected to plaintiff's form and proffered a general verdict form that did not distinguish between the negligence of defendant and its employee or between the two specifications of negligence on the part of the employee. In response to defendant's objection, plaintiff withdrew her verdict form, and the trial court used defendant's form. As noted above, the jury returned a general verdict in plaintiff's favor. Defendant neither moved for a new trial nor for a judgment notwithstanding the verdict (JNOV), and the trial court entered judgment for plaintiff.

On appeal, defendant argued that the specification of negligence based on defendant's instructions to its employee did not state a claim for negligence under Oregon law and, alternatively, that that specification was unsupported by the evidence. The Court of Appeals agreed that the specification did not state a claim for negligence and held that the trial court had erred in submitting it to the jury. Shoup, 171 Or App at 364. The Court of Appeals then held, citing Whinston, that, because it could not tell on which specification of negligence the jury had based its verdict, defendant was entitled to a new trial. The Court of Appeals explained that, under Whinston:

"[T]he prevailing plaintiff bears the burden of developing a record (most often through a special verdict) sufficient to establish the harmlessness of the error of submitting a defective specification to the jury. That is the plaintiff's obligation; the defendant need not do anything."

Shoup, 171 Or App at 373 (emphasis in original).

On review, plaintiff does not challenge the Court of Appeals' decision that her direct liability specification does not state a claim for negligence. Neither does she disagree that, under the "we can't tell" rule, defendant would be entitled to a new trial because the reviewing court cannot determine whether the jury based its verdict on the defective specification of negligence or on one (or both) of the two valid specifications. Instead, plaintiff argues that this court should abandon the "we can't tell" rule. She contends that, because there were two other, valid specifications of negligence and ample evidence to support them, an appellate court cannot conclude that the trial court's error in submitting the defective specification of negligence to the jury substantially affected defendant's rights. For that reason, plaintiff asserts, to reverse the trial court's judgment and order a new trial would violate ORS 19.415(2), which precludes an appellate court from reversing a judgment "except for error substantially affecting the rights of a party."

Defendant contends that the application of the "we can't tell" rule does not violate ORS 19.415(2) and urges us to adhere to that rule. Defendant asserts that, when the reviewing court cannot tell whether the jury has based its verdict on a defective or on a valid specification, the trial court's error in submitting the defective specification to the jury was an error that, per se, substantially affected the appellant's rights. Such an error, according to defendant, is prejudicial and requires a new trial.

As explained further below, we disagree with defendant that such an error is prejudicial. Accordingly, we conclude that the "we can't tell" rule violates the limitation on appellate courts set out in ORS 19.415(2). Because of that infirmity, we abandon the "we can't tell" rule. We begin our explanation by reviewing this court's decision in Whinston.

II.

Whinston was a medical negligence action that included three specifications of negligence in one claim for relief against a physician. The plaintiff alleged that the defendant physician had been negligent in (1) failing to perform a biopsy, (2) failing to diagnose cirrhosis, and (3) failing to diagnose vitamin A toxicity. The jury returned a general verdict in favor of the plaintiff, and the trial court entered a judgment on that verdict. The defendant then moved for a JNOV or, in the alternative, a new trial. The trial court concluded that there was no evidence that the physician's conduct had fallen below the applicable standard of care and entered a JNOV. The plaintiff appealed.

The Court of Appeals reversed. Whinston v. Kaiser Foundation Hospital, 93 Or App 528, 763 P2d 177 (1988). It concluded that there was sufficient evidence that the physician negligently had failed to diagnose cirrhosis and that, therefore, the trial court had erred in entering a JNOV. Id. at 532. The Court of Appeals then considered whether judgment should be entered for the plaintiff based on the jury verdict or whether the defendant nevertheless was entitled to a new trial because the court could not tell whether the jury had based its verdict on the specification that properly was submitted to the jury or on one of the specifications that was not. Relying on its interpretation of earlier decisions from this court and on "the constitutional and statutory admonitions that we reverse only when we can determine that error was prejudicial," the Court of Appeals remanded the case to the trial court with instructions to enter judgment on the verdict, holding that "when several issues are submitted to the jury, a general verdict will stand if any one of the issues was properly submitted, even if there might be errors related to others." Id. at 530-31.

On review, this court agreed with the Court of Appeals' conclusion that one of the plaintiff's specifications of negligence was supported by the evidence. Whinston, 309 Or at 356. Accordingly, it affirmed the Court of Appeals' decision that the trial court erred in entering the JNOV. However, this court disagreed with the Court of Appeals' decision ordering entry of judgment on the general jury verdict. The court noted that, despite contrary wording in some cases (see 309 Or at 357-59 (discussing cases inconsistent with "we can't tell" rule)), precedent favored remanding for a new trial in such circumstances and stated, "[W]e decline to adopt a different rule at this time." The court summarized its holding as follows:

"In such cases, where (1) more than one allegation of negligence is submitted to the jury; (2) one or more of, but not all, the allegations are unsupported by the evidence; and (3) it cannot be determined upon which allegation the jury based its verdict, this court has held that a new trial must be granted."

Id. at 357. The court dubbed that rule the "we can't tell" rule. Id.

As the foregoing discussion reveals, in Whinston this court did not view the question whether to remand for a new trial or with instructions to enter a judgment for the plaintiff based on the jury verdict as a question that required it to address whether the "we can't tell" rule is consistent with ORS 19.415(2). (1) The only aspect of this court's holding in Whinston that directly implicated ORS 19.415(2) was its threshold conclusion that the JNOV entered for the defendant should be reversed because there was evidence to support the jury verdict in the plaintiff's favor. That aspect of the Whinston holding was correct, because the trial court's entry of a JNOV, when there was evidence to support the plaintiff's jury verdict, "substantially affect[ed]" the plaintiff's rights. However, the problematic scope of the "we can't tell" rule is apparent in a situation such as the one before us, in which the party that lost a jury trial seeks to apply the rule in an appeal from a judgment entered on a general verdict. In such a situation, we are squarely presented with the question whether the "we can't tell" rule is compatible with the statutory authority of an appellate court to reverse a judgment only for an error "substantially affecting the rights of a party." ORS 19.415(2).

III.

As noted above, defendant argues that the "we can't tell" rule and the mandate of ORS 19.415(2) are not inconsistent, because the submission to the jury of an invalid specification, per se, substantially affects the rights of the party opposing that specification. Defendant contends that the "substantially affects the rights of a party" standard is whether, absent the error, the "outcome of the trial may have been different." In support of that argument, it quotes the following passage from Baker v. English, 324 Or 585, 590, 932 P2d 57 (1997):

"[In] applying [ORS 19.415(2)], this court often examines whether it is likely that a trial court's error affected the outcome of the case below. For example, in cases in which a trial court's error either did or may have affected the outcome, such as an error concerning a key issue before the jury, this court has concluded that the error substantially affected the rights of a party and, therefore, was prejudicial. The rationale behind such a conclusion is obvious: The rights of an aggrieved party are substantially affected if the outcome either would have or may have been different had the error not occurred."

Defendant then contends that, in any case posing a "we can't tell" problem, the possibility that the jury based its verdict on an invalid specification indicates that the outcome of the trial "might have been different" if the trial court had not erred. Therefore, defendant argues, application of the "we can't tell" rule never runs afoul of ORS 19.415(2). As we shall explain, however, the standard that defendant invokes is based on an overly broad reading of Baker and an incorrect interpretation of the statute.

In Baker, this court reviewed case law applying ORS 19.415(2). The court began that review -- in the passage quoted above -- by noting that, to determine whether ORS 19.415(2) permitted reversal of a judgment, the court historically had examined whether the error had affected the outcome of the trial. 324 Or at 590. The court pointed out that an outcome-based test appealed to common sense: If there were no harm to the party appealing, then there was no foul worth correcting. See id. at 590-92 (contrasting "harmful" or "prejudicial" error with "harmless" error).

In so stating, however, this court did not offer the phrase "whether the outcome 'may have been different'" as a standard for determining when an error at trial requires reversal. To the contrary, this court emphasized that its previous outcome-related inquiry, although useful, was not the test that the statute mandates:

"The case law summarized above demonstrates that an inquiry into the likelihood whether a trial court's error affected the outcome of the case below can serve as a useful tool in determining whether the error resulted in prejudice to a party. However, that inquiry, albeit helpful in some cases, is not the test for determining prejudice. Rather, our focus in this and all similar cases is the statutory test set forth in ORS 19.[415](2): 'No judgment shall be reversed or modified except for error substantially affecting the rights of a party.' (Emphasis added.) That is the only statutorily mandated test for determining whether an error requires reversal."

Baker, 324 Or 592-93 (underscoring added; italics in original; footnote omitted). Baker emphasized that the text of the statute itself assumes that an error has occurred, but permits reversal of the trial court judgment only if the error "substantially affect[ed] those rights." Id. at 593 n 8. Thus, this court's opinion in Baker did not use, and does not support, the "outcome might have been different" standard that defendant proposes for when an appellate court may reverse a judgment on appeal. (2)

Further consideration of defendant's "outcome might have been different" standard also demonstrates that it is not, as defendant argues, synonymous with the "substantially affects" standard of ORS 19.415(2). Under defendant's standard, if there were any possibility that the error at issue affected the outcome of the case, then the court must order a new trial. Because it is almost always possible that an error at trial affected the outcome, defendant's proposed standard would lead to retrial of most, if not all, cases in which there was trial court error in submitting claims to the jury, among other possible trial errors.

That result is the opposite of the policy determination that ORS 19.415(2) embodies. Under the statute, "no judgment shall be reversed * * * except for error substantially affecting the rights of a party." (Emphasis added.) The words of ORS 19.415(2) demonstrate that an error must cause something more than the "possibility" of a different result before the appellate court may reverse a judgment. To "affect" means, among other things, "to act upon: a: to produce an effect (as of disease) upon * * * b(1): to produce a material influence upon or alteration in * * * (2): to have a detrimental influence on * * *." Webster's Third New Int'l Dictionary 35 (unabridged ed 1993). Thus, an error "affecting" a party's rights is an error that can be said to "produce a material influence" or "to have a detrimental influence" on those rights, and not merely one that "might" have changed the outcome of the case. The use of the adverb "substantially" further limits the type of error that can result in reversal of a judgment. "Substantially" means "in a substantial manner," and the relevant definition of "substantial" is "being of moment: IMPORTANT, ESSENTIAL." Id. at 2280.

Those definitions indicate how far defendant's proposed "outcome might have been different" standard is from the standard set out in ORS 19.415(2). The possibility that an error might have resulted in a different jury verdict is insufficient under the statute. Instead, the court must be able to conclude, from the record, that the error "substantially affect[ed]" the rights of the losing party. Moreover, the statute protects the trial court judgment from reversal or modification "except for" error substantially affecting a party's rights, indicating that reversal of a judgment is the exception, not the rule. The rule embodied in ORS 19.415(2) is neutral as between plaintiffs and defendants; it places the burden to make a record that demonstrates prejudicial error on whichever party loses in the trial court and then seeks reversal or modification of the judgment on appeal.

For the foregoing reasons, we find defendant's arguments unpersuasive. We conclude that the "we can't tell" rule, which this court relied upon in some earlier cases and synthesized in Whinston, is inconsistent with ORS 19.415(2). Because that court-made standard conflicts with the standard that the legislature determined for reversal by an appellate court of a trial court judgment, it must give way. In every case, the appellate courts must adhere to the limitation of ORS 19.415(2) and reverse or modify a judgment only if it can be determined from the record that the error "substantially affect[ed] the rights of a party."

IV.

In abandoning the "we can't tell" rule described in Whinston, we recognize that we are overruling a prior court-created rule. This court may change a prior court-created procedural rule when the "reasons for [the rule] are no longer present." Heino v. Harper, 306 Or 347, 365, 759 P2d 253 (1988). This court also may overrule a substantive rule of common law in several circumstances, one of which is when "[the] earlier case was inadequately considered or wrong when it was decided." Id., at 373, quoting G.L. v. Kaiser Foundation Hospitals, Inc., 306 Or 54, 59, 757 P2d 1347 (1988). As explained in part III, above, we now conclude that the court-made rule in Whinston is inconsistent with what appears to us to be the appropriate reading of ORS 19.415(2). That conclusion, standing alone, is sufficient to meet the Heino criterion for overruling an earlier court-created rule of substantive law. (3) Nonetheless, in light of this court's earlier cases applying the "we can't tell" rule, we discuss here in greater depth the reasons we believe that the "we can't tell" rule stated in Whinston was "inadequately considered or wrong when it was decided."

As we noted in our earlier summary, Whinston implicated ORS 19.415(2) only in its threshold conclusion that the JNOV should be reversed because there was evidence to support the jury's verdict. The court in Whinston nevertheless went on to describe the "we can't tell" rule, which applies to appeals from judgments based upon a jury's verdict and also is governed by ORS 19.415(2). In describing the "we can't tell" rule, the court in Whinston noted that this court previously had concluded that a new trial was warranted when a trial court had erred in submitting an invalid specification of negligence to the jury over the appellant's objection and the reviewing court could not determine whether the jury had based its verdict on the invalid specification. One such case, upon which Whinston relied, was Pavlik v. Albertson's, Inc., 253 Or 370, 454 P2d 852 (1969). However, in Pavlik, this court merely stated that conclusion in a single sentence, providing no analysis or justification for the rule and citing no case or statute. 253 Or at 375. Pavlik thus provides little analytical support for the proposition that, without evidence that the jury relied on that specification, the record demonstrates that a party's rights are substantially affected when the trial court errs in submitting an invalid specification of negligence to the jury. Moreover, Pavlik did not analyze, or even discuss, the proper role of ORS 19.415(2) in its inquiry.

Neither does this court's decision in Layne v. Portland Traction Co., 212 Or 658, 319 P2d 884 (1957), which Whinston also cited, support the "we can't tell" rule. In that case, the court, citing former ORS 19.120 (1957), a predecessor statute to ORS 19.415(2), concluded that a new trial was warranted not only because the trial court erred in submitting to the jury a specification of negligence that was unsupported by any evidence, but also because the trial court erred in giving an "emergency" instruction, which the plaintiff had requested, when there was no evidence of an emergency. 212 Or at 674. Thus, because the court based its reversal upon consideration of both errors, Layne does not stand for the proposition that a party's rights are substantially affected by the submission of an invalid specification of negligence alone.

Finally, in other cases that Whinston cited, this court had acknowledged that the erroneous submission of a specification of negligence to the jury can be harmless error. See, e.g., Martin Engineering v. Opton, 277 Or 291, 297, 560 P2d 617 (1977) (so stating); Alvarez v. Great North. Railway Co., 261 Or 66, 76, 491 P2d 190 (1972) (same). The Whinston "we can't tell" rule is not consistent with that kind of harmless error approach.

The foregoing discussion reveals that, in addition to conflicting with ORS 19.415(2), Whinston's vulnerability existed at the time that the court made that decision. Indeed, in Whinston itself, this court recognized both the uncertain provenance and the potentially clouded future of the "we can't tell" rule. First, the court specifically noted, in articulating that rule, that "we decline to adopt a different rule at this time," 309 Or at 359 (emphasis added). In addition, the court warned "careful practitioner[s]" to use special verdicts "to guard against an untoward outcome were this court to retreat from the Pavlik rule." Id. at 359, n 10. Thus, although the result in Whinston was not without some support in prior case law, even at the time it was articulated, this court clearly viewed the "we can't tell" rule as a court-made rule, the foundations of which were uncertain at best.

Before we return to the case on review, we think that it is appropriate to go further and address the application of the "we can't tell" rule in cases such as Whinston, in which its use does not directly violate the mandate of ORS 19.415(2). As explained above, we hold today that appellate courts, to act within statutory limitations, may not apply the "we can't tell" rule to order a new trial in a case involving a judgment on a general verdict based on multiple specifications, one of which is invalid, if there is evidence to support another, valid specification. However, in cases such as Whinston, the "we can't tell" rule has been applied, not to reverse a judgment based on a jury verdict but, instead, to order a new trial following reversal of a JNOV. Because we discern no reason to reject the "we can't tell" rule when the appeal is from a judgment entered on a jury verdict, as in this case, and to continue to adhere to that rule when the appeal is from a JNOV, as in Whinston, we conclude that a new trial is not warranted automatically in either circumstance.

After reversal of a JNOV, the appellate court must determine whether to remand the matter to the trial court for entry of judgment in the nonmoving party's favor or for a new trial. That decision will depend on a variety of factors, including, in particular, the other motions made in the trial court and the grounds for those motions. (4) In disavowing that aspect of Whinston, we hold only that the reversal of a JNOV in a "we can't tell" situation does not necessarily mean that the court must order a new trial.

We note that the foregoing approach is consistent with that used by a trial court to determine whether an error warrants a new trial. ORCP 64 B uses words similar to those in ORS 19.415(2) and provides that a trial court may set aside a judgment and order a new trial when there has been a legal error or insufficiency of the evidence "materially affecting the substantial rights of a party * * *." We see no reason to have a less demanding standard when an appellate court must determine the appropriate disposition after finding an error in a case on appeal than when a trial court rules on a new trial motion. (5)

VI.

We return now to the question whether the trial court error warranted reversal in this case. The error at issue here was the submission to the jury of the specification of negligence based on defendant's instruction to its employee to stand in the aisle to greet customers. As noted above, the Court of Appeals held that that specification did not state a claim for negligence under Oregon law, and plaintiff did not seek review of that ruling. That specification was, however, submitted to the jury along with specifications of negligence based on the failure of defendant's employee to use reasonable care and to keep a proper lookout, both of which are valid claims for negligence, and the jury returned a general verdict for plaintiff. The evidence that plaintiff introduced in support of her negligence claim was straightforward: Plaintiff, her husband, her physician, and the store employee were the only witnesses at trial. There was no dispute that plaintiff was injured when she was struck by the store employee, who was backing up to get out of another shopper's way. All three specifications of negligence were based on the same evidence, and the jury concluded that plaintiff had proved her negligence claim.

The issue before us is whether, based on the record, the inclusion of the invalid specification of negligence "substantially affect[ed]" defendant's rights. Defendant has not identified anything in the record to demonstrate that the jury based its verdict on that specification. (6) A special verdict would have allowed defendant to show the claims or specifications upon which the judgment was based and thus to provide us with a record that would allow us to determine whether the trial court error was prejudicial. See Whinston, 309 Or at 359 n 10 (describing benefits of special verdict or interrogatories to jury). In this case, however, defendant objected to plaintiff's proposed special verdict form, and the court used defendant's general verdict form. We agree with plaintiff that the record does not demonstrate that the jury based its verdict on the invalid specification and that defendant, therefore, is unable to show that the trial court's error substantially affected defendant's rights. Accordingly, under ORS 19.415(2), there is no basis to reverse the trial court judgment and order a new trial.

The decision of the Court of Appeals is reversed in part and affirmed in part. The judgment of the circuit court is affirmed.

1. As noted above, the Court of Appeals based its decision in Whinston to remand for entry of a judgment on the verdict, rather than for a new trial, in part on "constitutional and statutory admonitions that we reverse only when we can determine that error was prejudicial." Whinston, 93 Or App at 530. That court cited the predecessor statute of ORS 19.415(2) as support for the general proposition just quoted, although by its terms the statute speaks only to when a trial court "judgment" may be "reversed or modified" and not to the appropriate disposition after reversal of a JNOV. The latter question is more properly analyzed as the trial court would analyze a motion for a new trial, although the standards are similar, if not identical. See post, 335 Or at ____ (slip op at 18-19) (discussing standard for granting new trial motion). In any event, this court in Whinston did not cite or discuss the predecessor statute of ORS 19.415(2).

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2. We note that this court, in Hernandez v. Barbo Machinery Co., 327 Or 99, 106-07, 957 P2d 147 (1998), cited Baker as indirect authority for the proposition that the rights of a party are "substantially affected" if "the outcome of the case either would have or may have been different had the error not occurred." In that regard, Hernandez, like defendant's argument in this case, takes this court's statement in Baker out of context. We do not, however, question the conclusion reached by this court in Hernandez. The error in jury instructions at issue in Hernandez was "reversible" under ORS 19.415(2).

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3. Because Whinston's "we can't tell" rule meets the criteria for changing both court-created procedural and substantive rules, we need not decide whether the "we can't tell" rule is procedural or substantive as those terms are used in Heino.

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4. A party that moved for JNOV in the trial court might or might not have moved, alternatively, for a new trial. If that party did not move for a new trial, then the motion is deemed to be waived. ORCP 63 C. That waiver might mean that the party is not entitled to a new trial. See, e.g., Goodyear Tire & Rubber Co. v. Tualatin Tire & Auto, 325 Or 46, 53, 932 P2d 1141 (1997) (failure to move in alternative for new trial operated as waiver of remedy of new trial with respect to error at issue in motion for JNOV). If, on the other hand, the party did move alternatively for a new trial, and if the trial court ruled on that motion, then the record concerning that motion and ruling may influence the appellate court's decision concerning the appropriate disposition of the case after the reversal of the JNOV.

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5. Like the cases decided under ORS 19.415(2), the cases applying ORCP 64 B (and its statutory predecessor, former ORS 17.610) show that a party is entitled to a new trial only when the record demonstrates "substantial" or "prejudicial" error. A mere showing that the outcome of the trial "might" have been different absent the error is insufficient. In Landolt v. The Flame, Inc., 261 Or 243, 492 P2d 785 (1972), for example, a jury verdict was rendered for the plaintiff, but the trial court granted the defendant's motion for a new trial based on various evidentiary and instructional errors. This court reversed and ordered entry of a judgment based on the jury verdict, concluding that the errors did not warrant a new trial: "A new trial may be granted only where there is a basis for a finding by the trial judge of substantial prejudicial error." Id. at 262, quoting McIntosh v. Lawrance, 255 Or 568, 572, 469 P2d 628 (1970). See also Williams v. Laurence-David, 271 Or 712, 534 P2d 173 (1975) (reversing trial court's granting of plaintiff's motion for new trial following jury verdict for defendant because of no "substantial prejudicial error").

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6. As noted, the specification at issue in this case is invalid because it fails to state a claim of negligence under Oregon law. Our analysis would be the same, however, if the specification were invalid merely because of insufficiency of the evidence. We decline to create different rules depending on the reason for which the specification is invalid, although we recognize that other jurisdictions have chosen to do so. Compare H.E. Culbertson Co. v. Warden, 123 Ohio St 297, 175 NE 205, 207 (1931) ("two-issue" rule: general verdict will be upheld if any specification submitted to jury was free from error), with Ricks v. Jackson, 169 Ohio St 254, 159 NE 2d 225, 227 (1959) ("two-issue" rule does not apply when jury is charged on issue about which there should not have been charge; in such cases, prejudice presumed).

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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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