By Kevin Bergstrom

In Vasquez v. Double Press Mfg., 364 Or. 609 (2019), the Court considered the application of the non-economic damages cap under ORS 31.710. The Court of Appeals had rejected the plaintiff’s argument that his claim was encompassed by an exception under ORS 31.710 for claims “subject to" the Oregon worker’s compensation scheme, but still ruled in plaintiff’s favor by finding the cap unconstitutional as-applied. On review, the Oregon Supreme Court ruled that the plaintiff’s claim was in fact “subject to” the worker’s compensation exception under ORS 31.710, and therefore the cap did not apply. By affirming the Court of Appeals’ judgment in favor of the plaintiff on these grounds, the Court avoided ruling on the constitutionality of the cap as-applied.

The immediate impact of the Court’s holding is to expand the worker’s compensation exception to ORS 31.710 to cover third-party tort claims brought by injured workers. This ruling opens the question of whether asbestos-related lawsuits that involved workplace exposure are also “subject to” the workers compensation exception, preventing application of the damages cap.

Summary:

Plaintiff Zeferino Vasquez had been severely injured on the job by a bale-cutting machine. “It is undisputed that, because of his injuries at work, plaintiff received workers' compensation benefits from his employer's workers' compensation insurance carrier.”Mr. Vasquez then filed an action alleging negligence against the defendant, who was the manufacturer, seller, and installer of the machine. At trial, Mr. Vasquez was awarded $4,860,000 in noneconomic damages, and defendant moved to apply the $500,000 statutory cap on non-economic damages found in ORS 31.710. As applied, the cap would have reduced plaintiff’s total recovery from $6,199,090 to $1,838,090. The Court of Appeals ruled that such a remedy, roughly 30% of the jury’s damage award, would be insubstantial in light of the damages that the severely injured plaintiff had suffered, and thus unconstitutional as applied under the remedy clause of the Oregon Constitution.Vasquez v. Double Press Mfg., Inc., 288 Or App 503, 406 P3d 225 (2017). The concurrence concluded that the constitutionality issue did not need to be reached by the majority, because the plaintiff’s claim was “subject to” ORS chapter 656 covering workers’ compensation in Oregon, and thus excepted under the statute.

On review to the Oregon Supreme Court, defendant sought to challenge the Court of Appeals’ finding that the cap was unconstitutional as applied. However, plaintiff sought review of another issue, that of the “worker’s compensation” exception to ORS 31.710. ORS 31.710 states that the non-economic damages cap does not apply to claims “subject to” ORS chapter 656, the chapter concerning worker’s compensation.

The scope of what is “subject to” ORS chapter 656 as phrased in ORS 31.710 was thoroughly explored by the Court. Defendants argued that a claim subject to the worker’s compensation statutes simply means a claim for compensation made to the employer’s insurer. Plaintiff argued that although the claim at issue was not being made against plaintiff’s employer,

numerous provisions within ORS chapter 656—other than those relating to workers' compensation insurance coverage—pertain to workers' rights to recover tort remedies based on workplace injuries. See, e.g., ORS 656.020 (authorizing actions for damages against employers who are not in compliance with the workers' compensation laws, but abolishing historical defenses to such actions such as contributory negligence, the fellow-servant rule, and assumption of risk); ORS 656.154 (if workplace injury is due to negligence of third party other than employer or another employee, injured worker may elect to seek a remedy against third party); ORS 656.576 - 656.596 (containing numerous procedural and substantive provisions concerning actions brought against noncomplying employers and third parties).

The Court agreed with the plaintiff, finding that a “claim subject to *** ORS chapter 656” means “an exception for the types of claims against noncomplying employers and third parties described in ORS 656.054 (1985), ORS 656.154 (1985), and ORS 656.576 (1985) to ORS 656.595 (1985), rather than one for claims for workers' compensation benefits.” Notably, ORS 656.154 authorizes injured workers to bring claims against third party tortfeasors:

If the injury to a worker is due to the negligence or wrong of a third person not in the same employ, the injured worker, or if death results from the injury, the spouse, children or other dependents, as the case may be, may elect to seek a remedy against such third person.

Thus, although the plaintiff was suing an equipment manufacturer for his injury, his claim was still “subject to” ORS chapter 656 because it is the type of claim authorized under ORS 656.154, and therefore “’subject to’ [one of the] numerous provisions found in ORS chapter 656.”

In Vasquez,it was “undisputed that, because of his injuries at work, plaintiff received workers' compensation benefits from his employer's workers' compensation insurance carrier” prior to filing his lawsuit against the product defendant. Indeed, one of the justifications for the Court’s interpretation was that ORS chapter 656 allows the workers’ compensation insurer to recover amounts paid because of the worker’s compensation claim, and that allowing the recovery of noneconomic damages for claims against third-party tortfeasors increases the likelihood that “that the amount of money available for distribution in any given case would be sufficient to cover the costs of litigation, to provide amounts to the injured worker for damages, and to reimburse the workers' compensation insurer for past and future benefits that it had to pay because of the workers' compensation claim.”

In asbestos cases, worker’s compensation claims are relatively rare given the long latency period of the disease, although certainly not unheard of. Plaintiffs going forward may have a strong argument that an actual claim for worker’s compensation benefits is not required for a claim to be “subject to” ORS chapter 656. ORS 656.018 provides that the liability of every qualifying employer is the exclusive remedy for “all injuries and to diseases, symptom complexes or similar conditions of subject workers arising out of and in the course of employment whether or not they are determined to be compensable under this chapter.” Occupational diseases are covered by the worker’s compensation scheme. ORS 656.807. Thus, claims for occupational exposure to asbestos are conceptually “funneled” through ORS chapter 656 which provides the exclusive remedy for injured workers, but then statutorily allows third-party claims against tortfeasors through ORS 656.154. As the Court explained, “we conclude that the text—'claims subject to * * * ORS chapter 656’—most plausibly encompasses an exception for the types of claims against noncomplying employers and third parties described in ORS 656.054 (1985), ORS 656.154 (1985), and ORS 656.576(1985) to ORS 656.595 (1985), rather than one for claims for workers' compensation benefits.”

The Court’s ruling leaves significant ground for litigation in asbestos cases, and cases involving numerous exposure sites, shipyard exposures, or other exposure potentially implicating other compensation statutes from ORS chapter 656 may further complicate the issue. We expect Oregon plaintiffs going forward to challenge the application of the noneconomic damages cap under ORS 31.710 in cases of occupational exposure going forward.