STOVALL v. STATE OF OREGON

CC 93C11180; CC 94C10334; SC S43012.

922 P.2d 646 (1996)

324 Or. 92

Myron W. STOVALL, Dwayne Osburn, Theodore W. Kuenzi, Robert L. Maxey and Jeannette L. Bremer, on behalf of themselves and of a plaintiff class consisting of all persons or entities who received retirement, death, disability benefits or other payments through the Public Employee Retirement System on or after January 1, 1991, because of work performed by public employees before September 29, 1991, and whose PERS payments have been subjected to Oregon personal income taxation, Appellants, and John B. Leahy, Plaintiff, v. STATE of Oregon, By and Through OREGON DEPARTMENT OF TRANSPORTATION, Public Employee Retirement Board and Department of Administrative Services, Appellants, and Portland School District No. 1J, Marion County, City of Salem and Multnomah County, on behalf of themselves and of a defendant class consisting of all state and local public employers who employed persons who, by reason of such employment, received, on or after January 1, 1991, PERS payments because of services performed before September 29, 1991, League of Oregon Cities, Special Districts Association of Oregon and Oregon School Districts Association, Respondents, and City of Eugene and Eugene Water and Electric Board, on behalf of themselves and of a defendant class consisting of all state and local public employers who employed persons who, by reason of such employment, received, on or after January 1, 1991, PERS payments because of services performed before September 29, 1991, Intervenors-Respondents. Rose CHESS, Velma K. Mullaley, Edith S. Orner, Ben Sickinger, Robert McCoy, Ed Lape, Jacob Weinstein, Richard Fraser, Grace Shaw, Lyddie Bell Sedivy, for themselves and on behalf of a class of retirees from public employment, Oregon Public Employees Union, Oregon Education Association, Oregon Association of Classified Employees, American Federation of State, County and Municipal Employees and Portland Fire Fighters Association, Appellants, v. STATE of Oregon, Oregon Public Employes' Retirement Board, State Department of Higher Education, State Department of Health and Human Resources, State Department of Transportation and Executive Department, Appellants, and Department of Administrative Services and Department of Treasury, Defendants, and City of Portland, North Clackamas School District 12, Corvallis School District 509J, Multnomah County, Yamhill County, League of Oregon Cities, Special Districts Association of Oregon, Oregon School Districts Association and Josephine County, for themselves and on behalf of a class of local government public employers in Oregon, Oregon State Bar and Professional Liability Fund, Respondents, and City of Eugene and Eugene Water and Electric Board, for themselves and on behalf of a class of local government public employers in Oregon, Intervenors-Respondents.

Supreme Court of Oregon.

Decided August 29, 1996.


Attorney(s) appearing for the Case

John R. Faust, Jr., of Schwabe, Williamson & Wyatt, Portland, argued the cause and filed the briefs for appellants Stovall, et al.

James S. Coon, of Swanson, Thomas & Coon, Portland, and Gregory A. Hartman, of Bennett Hartman Reynolds & Wiser, Portland, argued the cause and filed the briefs for appellants Chess, et al.

Elizabeth S. Harchenko, Special Counsel to the Attorney General, Salem, argued the cause for appellants State of Oregon, et al. With her on the briefs were Theodore R. Kulongoski, Attorney General, Virginia L. Linder, Solicitor General, and Michael D. Reynolds, Assistant Solicitor General.

John W. Osburn, of Miller, Nash, Wiener, Hager & Carlsen, Portland, argued the cause and filed the brief for respondents Portland School District No. 1J, Oregon School Districts Association, North Clackamas School District 12, and Corvallis.

Robert C. Cannon, Salem, argued the cause and filed the brief for respondents Marion County and Yamhill County.

Jacob Tanzer, Portland, argued the cause and filed the brief for respondents League of Oregon Cities and Special Districts Association of Oregon.

William F. Gary, of Harrang Long Gary Rudnick, P.C., Eugene, argued the cause for respondents City of Eugene and Eugene Water and Electric Board. With him on the brief was Judith Giers.

Gerald H. Itkin, Assistant County Counsel, Portland, on behalf of respondent Multnomah County, joined in the briefs of respondents League of Oregon Cities and Special Districts Association of Oregon; Portland School District No. 1J, Oregon School Districts Association, North Clackamas School District 12, and Corvallis School District 509J; Marion County and Yamhill County; and City of Eugene and Eugene Water and Electric Board.

Sylvia E. Stevens, Assistant General Counsel, waived appearance for respondent Oregon State Bar and Professional Liability Fund.

No appearance for respondents City of Salem, City of Portland, and Josephine County.

Before CARSON, C.J., and GILLETTE, VAN HOOMISSEN, FADELEY, GRABER, and DURHAM, JJ.


GRABER, Judge.

In Hughes v. State of Oregon, 314 Or. 1, 36, 838 P.2d 1018 (1992), this court held, in part, that it was a breach of contract for the State of Oregon to subject to state income taxes employee pension benefits paid under the Public Employes' Retirement System (PERS), ORS 237.001 to 237.315 (1993), accrued or accruing for work performed before September 29, 1991. Plaintiffs in these...

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