S53777 Costco Wholesale Corp. v. City of Beaverton

SUPREME COURT CASES

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State: Oregon

Docket No: none

Case Date: 06/07/2007

FILED: June 7, 2007

IN THE SUPREME COURT OF THE STATE OF OREGON

COSTCO WHOLESALE CORPORATION,

Petitioner,

and

HENRY KANE,

Intervenor-Petitioner,

CITY OF BEAVERTON,

Respondent.

WELLS REAL ESTATE FUNDS, INC.,

Respondent on Review,

CITY OF BEAVERTON,

Petitioner on Review.

BOLD, LLC,

Petitioner,

and

HENRY KANE,

Intervenor-Petitioner,

CITY OF BEAVERTON,

Respondent.

C.E. JOHN COMPANY, INC.

Petitioner,

and

HENRY KANE,

Intervenor-Petitioner,

CITY OF BEAVERTON,

Respondent.

(LUBA Nos. 2005-044, 2005-046, 2005-050, 2005-053; CA A130488; SC S53777)

En Banc

On review from the Court of Appeals.*

Argued and submitted March 5, 2007.

Alan Andrew Rappleyea, of Beaverton City Attorney's Office, Beaverton, argued the cause and filed the brief for petitioner on review. With him on the brief was William J. Scheiderich.

Jack L. Orchard, of Ball Janik LLP, Portland, argued the cause and filed the response and brief for respondent on review. With him on the response and brief was Dana L. Krawczuk.

Thomas Sponsler, of Beery, Elsner & Hammond LLP, Portland, filed the brief for amicus curiae League of Oregon Cities.

WALTERS, J.

The decision of the Court of Appeals is affirmed. The order of the Land Use Board of Appeals is reversed, and the case is remanded to the Land Use Board of Appeals for further proceedings.

Gillette, J., dissented and filed an opinion in which De Muniz, C.J., joined.

*Appeal from Land Use Board of Appeals. 206 Or App 380, 136 P3d 1219 (2006)

WALTERS, J.

Under state statute, a city may annex property that is contiguous to the city by obtaining either the consent or majority vote of the owners of the property to be annexed. A city may annex property without such approval if the city boundaries "surround" the property to be annexed, a form of annexation referred to as an island annexation. In this case we decide whether a city may annex only part of an island that it surrounds without the consent or majority vote of the owners.

The territory that gives rise to the dispute in this case is made up of property owned by Wells Real Estate Funds, Inc. (Wells), respondent on review in this court, and Nike, Inc. (Nike). (1) The City of Beaverton (city) extended its boundaries and encircled that territory so that its boundaries were contiguous to the territory on all sides. It is undisputed that that territory thus became an island, within the meaning of the island annexation statute, and that Oregon law authorizes the city to annex that territory in its entirety without the approval of the owners of property in the territory.

In 2004, the city adopted a resolution announcing a policy to annex all adjacent urban unincorporated areas "over time" and directing the mayor to annex the territory at issue in its entirety, including both the property owned by Wells and the property owned by Nike. In 2005, however, the city excluded from further annexation proceedings all property owned or leased by Nike. (2) As a result, although the city boundaries continued to form a ring around the territory as a whole, and although the Wells property was located within that ring, the city boundaries were no longer entirely contiguous to the property then to be annexed, the Wells property, on all sides. The Nike property stood between the city boundary and the Wells property on one side. The city nevertheless asserted that it could annex the Wells property:

"The subject properties are within islands defined by the City's corporate limits. Some of the properties that are the subject of this proposed annexation constitute only part of an island. The statutory provision cited above [ORS 222.750] does not require annexation of an entire island." (3)

Wells appealed the annexation of its property to the Land Use Board of Appeals (LUBA). After LUBA affirmed the city's annexation of the Wells property, Wells sought judicial review in the Court of Appeals. The Court of Appeals reversed, concluding that, under the applicable statute, ORS 222.750, "the territory to be annexed must be completely enclosed by and contiguous with the corporate boundaries of the annexing city or the corporate boundaries of the annexing city and a body of water." Costco Wholesale Corp. v. City of Beaverton, 206 Or App 380, 398, 136 P3d 1219 (2006). We granted the city's petition for review. (4)

We begin our review with the text of ORS 222.750, which authorizes island annexation of territory "surrounded by" city boundaries:

"When territory not within a city is surrounded by the corporate boundaries of the city, or by the corporate boundaries of the city and the ocean shore or a stream, bay, lake or other body of water, it is within the power and authority of that city to annex such territory. However, this section does not apply when the territory not within a city is surrounded entirely by water. Unless otherwise required by its charter, annexation by a city under this section shall be by ordinance or resolution subject to referendum, with or without the consent of any owner of property within the territory or resident in the territory."

(Emphasis added.)

As shown in the figure below, the territory consisting of the Wells property and the Nike property is indisputably "surrounded by" the city boundaries.

The city agrees that, as a prerequisite to the exercise of its statutory island annexation authority, its boundaries must contiguously and completely encircle the territory in question and create such an island. The city argues, however, that, once its boundaries surround and create such an island, it is entitled to annex all or any part of that island. The city contends that, because the Wells property is within the circle of its boundaries, it too is "surrounded by" city boundaries. The city contends that the only contiguity that is required is the partial contiguity of the city territory and the Wells property that is represented by the solid line shown on the figure above. Wells responds that ORS 222.750 allows only annexation of territory that is completely and contiguously surrounded by city boundaries and that, when the city eliminated the Nike property from its annexation plans, the city boundaries no longer surrounded the territory to be annexed in the manner required by the island annexation statute. The issue presented is whether a city has authority to engage in island annexation pursuant to ORS 222.750 if city boundaries do not completely and contiguously encircle the property to be annexed.

We first consider the words "surrounded by," as used in ORS 222.750, and consult the dictionary. The word "surround" means to be situated or found around, about, or in a ring around. See Webster's Third New Int'l Dictionary 2302 (unabridged ed 2002) (providing definitions). The senses in which that word can be used are many. Some suggest a requirement of close proximity, if not contiguity. Others seem to permit more distance. "To throng, press, or cluster around," as "[the] crowd throng[ed] the victor" implies immediacy, as do "to envelop in or as if in a cloud or mist," or "to encase or cover like pulp around a core." Id. "To live around on all or most sides," "to form or be in a retinue [or] entourage," or "to be present around, about, or near" all imply a greater range. Id. Because ORS 222.750 uses "surround" in conjunction with "boundaries," the sense that most aptly fits our purpose is "to form a ring around: extend around or about the edge of: constitute a curving or circular boundary for: lie adjacent to all around or in most directions." Id.

Using that sense of the word "surround" and applying it to the figure shown above, it is clear that the city boundaries "surround" the territory made up of both the Wells and Nike properties. The city boundaries form a ring around that territory, extend around the edge of it, constitute a circular boundary for it, and lie adjacent to it all around. As a prerequisite to annexation under ORS 222.750, the corporate boundaries of the city necessarily must surround territory in such a completely encircling and contiguous fashion or no island would be formed in the first instance.

The city points to the part of the dictionary definition that provides, "[to] lie adjacent to all around or in most directions" (emphasis added). It contends that, once the island is formed and city boundaries "surround" a territory completely and contiguously, they also "surround" any part of that territory, even though they lie adjacent to that part only "in most directions." To accept that argument, we would be required to give the term "surround" as used in ORS 222.750 two different meanings: (1) to create an island, city boundaries must lie adjacent to territory all around it; and (2) to annex part of an island, city boundaries need lie adjacent to territory only "in most directions." The words "surrounded by" cannot have both meanings, because those words describe and limit the conditions that allow the exercise of authority. If "surrounded by" means adjacent "in most directions," then ORS 222.750 would impose no requirement that city boundaries completely and contiguously encircle the territory to create an island in the first instance. We conclude that, in requiring that territory be "surrounded by" city boundaries, the legislature required that city boundaries encircle the territory completely and contiguously.

That conclusion does not, however, completely answer the city's argument. The city contends that, because the legislature has conferred upon the city the power to annex the whole island, the legislature also has conferred the power to annex a part of that whole. To respond, we consider the part of the statute beginning after the words "surrounded by." ORS 222.750 provides that, when "territory" is surrounded by city boundaries, the city may annex "such territory." "Such" refers to something previously mentioned and indicates that it is the identical thing. See Webster's at 2283 (defining "such," in part, as "previously characterized or specified: AFOREMENTIONED"). The most straightforward reading of the statute, and the interpretation that we adopt, is that the territory that is encircled, completely and contiguously, to form the island in the first instance, is the territory that may be annexed -- no more and, also, no less.

In reaching that conclusion, we consider not only the text of ORS 222.750 but also the statutory and historical context in which it fits. People who purchase property make a choice to attain the benefits, and subject themselves to the burdens, of property ownership, some of which are determined by the location of their property within or without city limits. Cities have the power to confer benefits on those who own property within their boundaries, providing them with services such as police protection. Cities also have the power to obligate those who own property within their boundaries to shoulder municipal burdens, such as payment of taxes. Oregon cities do not have inherent, home-rule authority to impose those same obligations on those outside their borders. Mid-County Future Alternatives v. City of Portland, 310 Or 152, 161, 795 P2d 541 (1990). And cities do not have inherent, home-rule authority to extend their borders to annex unwilling property owners and make them subject to municipal obligations. Landess v. City of Cottage Grove, 64 Or 155, 156-57, 129 P 537 (1913), abrogated on other grounds by Mid-County, 310 Or at 166; Thurber v. McMinnville, 63 Or 410, 414-16, 128 P 43 (1912), abrogated on other grounds by State ex rel Heinig v. Milwaukie, 231 Or 473, 373 P2d 680 (1962); State ex rel v. Port of Tillamook, 62 Or 332, 342-343, 124 P 637 (1912). In Thurber, the court found it repugnant to its ideas of fairness and justice that "an enterprising municipal corporation" could subject those outside the city to the burdens of municipal taxation "without their consent and against their will." Thurber, 63 Or at 414.

That does not mean that cities cannot expand without the consent of property owners who have chosen to live outside their confines. Cities can extend their boundaries without the consent of the affected property owners and against their will if state legislation grants them the authority to do so. Mid-County, 310 Or at 161-64. But, in considering the scope of that authority, we are cognizant that the degree to which the legislature permits a city to act unilaterally is the same degree to which the legislature deprives a property owner of the ability to choose municipal affiliation, its benefits, and burdens.

When the state legislature first enacted a statute permitting cities to extend their borders in 1893, the legislature required that a majority of voters in the city and that a majority of voters in the territory to be annexed vote separately in favor of annexation. Or Laws 1893, p 120, § 4, codified as Lord's Oregon Laws, title XXVI, ch I, § 3209 (1910). The legislature has maintained the requirement of consent or election in the territory to be annexed to this day, except in two special circumstances. See ORS 222.111(5) (indicating exceptions to election requirement). The legislature has dispensed with the consent or election requirements for island annexation and for territory posing a health hazard. ORS 222.750 (originally enacted as Or Laws 1919, ch 6, § 1); ORS 222.840-222.915 (originally enacted as Or Laws 1967, ch 624). For health hazard annexation, the legislature expressly permits cities to annex only part of a territory otherwise subject to forcible annexation, provided that cities follow and meet specified procedures and standards. ORS 222.880. (5) The legislature has not expressly granted cities similar power to engage in partial island annexation. (6)

We conclude from our examination of the text of ORS 222.750, the statutory scheme in which it is embedded, and, relatedly, its historical roots, that the legislature has granted cities the right to annex property beyond its borders in only particular, limited circumstances. Because ORS 222.750 does not explicitly authorize annexation of part of an island that is not itself surrounded, completely and contiguously, by city boundaries, we hold that that statute does not authorize annexation of the Wells property.

As a slight variation on the argument that, once an island is contiguously and completely surrounded, a city may annex all or part of that island, the city and amicus League of Oregon Cities argue that, even if cities eventually must annex an island in its entirety, no statute prohibits them from proceeding to that end in incremental steps. The answer to that argument is the same as the answer to the partial annexation argument: While no statute expressly prohibits partial or incremental island annexation, the legislature's use of the term "such territory" requires that the territory that forms the island be the territory that is annexed. (7)

Amicus also expresses its concern that a decision affirming the Court of Appeals will undermine the annexation authority of home rule cities. We note first that it is legislative, and not home-rule, authority that a city exercises when it acts extraterritorially. See Mid-County, 310 Or at 161-64 (explaining difference). In granting that authority, the legislature generally requires majority approval of the affected landowners. A city that seeks to annex property that it does not surround, no matter how great the need or how good the reason, must obtain that approval. Even if the authority to engage in island annexation does not permit partial island annexation, that authority gives cities significant power to annex without obtaining the consent of the affected landowners. Cities that wish to annex only a part of an island are not prohibited from doing so. Instead, they are simply required to meet the standard necessary for nonisland annexation. If Oregon cities maintain that they should have greater authority to act outside their boundaries without the approval of the affected property owners, they can and should appeal to the legislature for that express authority.

The decision of the Court of Appeals is affirmed. The order of the Land Use Board of Appeals is reversed, and the case is remanded to the Land Use Board of Appeals for further proceedings.

GILLETTE, J., dissenting.

The work of cities in the environment created by Ballot Measures 5 (1990) and 50 (1997) is difficult enough, without this court making it worse. In this case, unfortunately, that is what the majority does, by misreading a statute vital to the operation of cities in the present day.

That statute is ORS 222.750. I repeat the pertinent parts of it here to facilitate the discussion:

"When territory not within a city is surrounded by the corporate boundaries of the city, * * * it is within the power and authority of that city to annex such territory. * * * Unless otherwise required by its charter, annexation by a city under this section shall be by ordinance or resolution subject to referendum, with or without the consent of any owner of property within the territory or resident in the territory."

(Emphasis added.) Respecting that statute, the majority quite rightly states, "The issue presented is whether a city has authority to engage in island annexation pursuant to ORS 222.750 if city boundaries do not completely and contiguously encircle the property to be annexed." ___ Or at ___ (slip op at 4-5). The majority then answers the question in the affirmative.

Let us at this point be clear about the majority's requirement of complete contiguity. When an "island" consists of two or more parcels in separate ownership, a city ordinarily will be completely contiguous to the parcels collectively, but not with any single parcel in its entirety. The consequence of reading a "complete contiguity" requirement into ORS 220.750 is that, if a city decides for any reason that it does not wish to annex each and every parcel within an island all at once, the city lacks the authority to annex any of the parcels.

For the life of me, I cannot understand how such a reading of the statute could persuade anyone, much less the majority. To begin with, as the majority appears to acknowledge in its review of various definitions of the word, ___ Or ___ (slip op at 5), that the word "surround" is ambiguous. Furthermore, even the definition the majority chooses to use, viz., "to form a ring around: extend around or about the edge of: constitute a curving or circular boundary for: lie adjacent to all around or in most directions," id. (emphasis added), does not itself require complete contiguity. Finally, the majority's efforts at injecting a complete contiguity requirement into that definition are weak at best. In that regard, the majority contends that requiring anything less than complete contiguity would give the term "surround," as used in ORS 222.750, two different meanings. ___ Or at ___ (slip op at 5). The majority begins by assuming that an island territory must be completely surrounded by and completely contiguous to a city's boundary. It then points to the city's definition of an island territory as one that is completely surrounded by but not necessarily completely contiguous to a city's boundaries. The majority then offers a single sentence that purports to explain why the latter meaning is impossible: "If 'surrounded by' means adjacent 'in most directions,' the statute imposes no requirement that city boundaries completely and contiguously encircle the territory to create an island in the first instance." ___ Or at ___ (slip op at 6).

For some reason, the majority fails to recognize the circularity in the foregoing discussion. The majority begins by positing the correctness of the very definition that it seeks to uphold. It is no wonder that it can conclude that that narrow definition is the correct one. But the fact is that nothing in the wording of the statute requires complete contiguity. Moreover, the city's broader definition of the term "surround" would cover both kinds of islands that the majority opinion illustrates.

The majority itself appears to recognize that its point respecting the wording of the statute cannot be dispositive, because it spends four further pages arguing history. But, if the statutory wording were as dispositive as the majority suggests, why does it need further discussion? The truth is that neither the wording of the statute, nor the specific wording of any other statutes, answers the issue before us. We are left to logic and good sense respecting the scope of authority that the legislature intended to grant to cities under ORS 222.750. For me, that inquiry need not take long.

Even a casual glance at the Oregon Revised Statutes reveals the importance of cities in the scheme of Oregon governance. Laws relating to their organization and activities take up six full chapters -- ORS chapter 221 to chapter 227. Cities are the political bodies that deliver the urban services that make it possible for citizens to live together: They provide public safety services (police and fire protection), public health services (water and sewer services), recreation and leisure opportunities (parks, trails, and nature reserves), and organizational control over the infrastructure within their boundaries (traffic controls, parking restrictions, zoning and other land use restrictions). To support those services (and a thousand others, many peculiar to a particular city or cities), cities rely on property taxes. Those taxes are levied on property within the boundaries of the city. Often, there will be "islands" within the city that have not come within the city for any number of reasons. Some of the reasons may be political: For example, a city may make it a policy not to annex parcels where the resistance is very strong, partly on the theory that persons so forced into a city usually contribute nothing positive to the life of that city. Some of the reasons may be practical: A city may find something about the property in question that makes the property undesirable, such as a surface water runoff problem that would cost the city more to remedy than the city ever would receive in offsetting tax revenues. Or the city simply may determine that it lacks the ability to supply urban services to an island parcel at a particular time, so it chooses not to exercise its authority for the time being.

As one can see, each of the foregoing, completely legitimate considerations need not apply to a complete "island." It may be true, to take just one example, that one half of an island consists of rugged terrain with significant surface water runoff problems, while the other half of the "island" consists of an area ideal for home sites, all the more so because the city's population has been expanding in that direction and the city recently has constructed large improvements in the water and sewer system serving the area. Annexation of the latter half would be helpful to the city through added revenues to at least partially offset the new urban services now available to that parcel; annexation of the other part of the island would be detrimental to the city. Yet, today, the majority announces that the legislature intended not to permit a city to make exactly the kind of commonsense governmental decision that my hypothetical describes. I don't believe that, and I cannot understand why the majority, given a choice of answers, chooses to. (8)

The point in all this is that the exercise of the authority to annex is a classically political choice, influenced by any number of considerations. And it is precisely that sort of authority that the legislature was addressing when it enacted ORS 222.750 to assist cities in doing their work. The question then should occur to us: In that context, and even allowing for the fact that the pivotal word is undefined, why should we adopt a definition that hamstrings cities in doing what they are supposed to do? Put that way, the answer is obvious.

I respectfully dissent.

De Muniz, C. J., joins in this dissenting opinion.

1. The territory also included property owned by Costco Wholesale Corporation (Costco).

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2. The annexation ordinance that the city adopted included the Costco property. Costco challenged the annexation at a city hearing and by appeal to the Land Use Board of Appeals, but then declined to seek further review.

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3. The city used the plural "islands" because the city also annexed other property in other islands. None of those properties is involved in this proceeding.

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4. There has been subsequent legislation related to this dispute, but we are satisfied that the legislation has not rendered the dispute moot. On March 1, 2005, the city annexed the territory at issue. That was a final appealable decision. See ORS 197.825(1) (LUBA jurisdiction); ORS 197.015(11)(a)(A) (defining land use decision). The Oregon legislature then enacted legislation, which became effective on September 2, 2005, providing that "the City of Beaverton may not annex territory in any manner that does not require the city to obtain approval of the residents of or the property owners in the territory." Or Laws 2005, ch 844, § 1. The legislature provided that the act became effective upon its passage and did not provide that that section was retroactive. Id. § 12. The ban will lapse January 2, 2008. Id. § 10.

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5. ORS 222.880(3) provides, in part:

"If the director [Director of Human Services] determines that a danger to the public exists because of conditions within only part of the affected territory, the director may, upon petition and hearing, reduce the boundaries of the affected territory to the part of the territory that presents a danger if the area to be excluded would not be surrounded by the affected territory remaining to be annexed and would not be directly served by the sanitary, water or other facilities necessary to remove or alleviate the danger to public health existing within the affected territory remaining to be annexed."

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6. The other manner in which cities can accomplish annexation is by majority consent or vote in the area to be annexed. When cities use those processes, they describe the area to be annexed and determine whether a majority in the area described consent or vote in favor. It is anticipated that the city will annex the described territory as a whole. See ORS 222.125-222.175 (setting procedure for consent or election including setting final boundaries of territory to be annexed); see also Portland Gen. Elec. Co., v. City of Estacada, 194 Or 145, 166, 241 P2d 1129 (1952) (proposed annexation void as to any part is void as to whole).

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7. The annexation ordinance at issue here does not reflect an intent to engage in incremental annexation. Moreover, after the city adopted that ordinance, the legislature passed an act that, according to the parties, effectively prohibits annexation of the Nike properties without the owner's consent for up to 35 years. See Or Laws 2005, ch 844, §§ 5, 11 (certain defined properties can be annexed only by consent; provision will lapse as late as 2040 depending on further legislative amendments).

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8. An even more charming example would involve an island consisting in part of property of the United States, which the city could not annex. According to the majority, the legislature intended any such island to be permanent, as long as a private owner within it desired to keep it that way.

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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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