S056096, Opinion — Pendleton School Dist. v. State of Oregon

28
On petition for attorney fees and costs filed February 13, and respondent's
objection to petitioners' petition for attorney fees and costs filed April 2, of opinion
filed January 23,* petitioners awarded their costs in amount of$1,056.55, payable
by State of Oregon; petitioners' petition for award of attorney fees denied
September 17, petitioners' petition for reconsideration of opinion regarding
attorney fees and costs allowed by opinion November 27, 2009
See 347 Or 344, 220 P3d 744 (2009)
PENDLETON SCHOOL DISTRICT 16R;
Eugene School District 4J;
Crow-Applegate-Lorane School District 66;
Coos Bay School District 9; Corvallis School District 509J;
Josephine County Unit/Three Rivers School District;
Astoria School District IC; Creswell School District;
Lincoln County School District; Siuslaw School District 97J;
Centennial School District; Amity School District 4J;
Reynolds School District #7; Coquille School District #8;
Parkrose School District #3; Pine Eagle School District #61;
Jefferson School District; McKenzie School District;
Alexandra Kiesling and Timothy Kiesling, minors,
by Amy Cuddy, their guardian ad litem;
Grace Peyerwold, a minor,
by David and Maria Peyerwold, her guardians ad litem;
Marshall Taunton and Harrison Taunton, minors,
by Tim and Wendy Taunton, their guardians ad litem;
and Benjamin Sherman and Claire Sherman, minors,
by Larry Sherman and Diane Nichol, their guardians ad litem,
Plaintiffs-Appellants,
Petitioners on Review,
v.
STATE OF OREGON,
Defendant-Respondent,
Respondent on Review.
(CC 0603-02980; CAA133649; SC S056096)
217 P3d 175
* 345 Or 596, 200 P3d 133 (2009).

Cite as 34 7 Or 28 (2009) 	29
CJS, States § 328.
En Banc
James N. Westwood and Robert D. Van Brocklin, Stoel
Rives LLP, Portland, filed the petition for attorney fees and
costs for petitioners on review.
Jeff J. Payne, Assistant Attorney General, Salem, filed
the objections to petition for attorney fees and costs for
respondent on review. With him on the objections were

30 	Pendleton School Dist. v. State of Oregon
John R. Kroger, Attorney General, and Jerome Lidz, Solicitor
General.
GILLETTE, J.
Petitioners are awarded their costs in the amount of
$1,056.55, payable by the State of Oregon. Petitioners' peti-
tion for an award of attorney fees is denied.
Durham, J., concurred in part and dissented in part and
filed an opinion, in which De Muniz, C. J., and Walters, J.,
joined.

Cite as 347 Or 28 (2009) 	31
GILLETTE, J.
This case involves a request that this court exercise
its discretionary authority to award attorney fees to the pre-
vailing parties in a case involving school funding. Petitioners
were designated as the prevailing parties in that case,
Pendleton School Dist. v. State of Oregon, 345 Or 596, 200
P3d 133 (2009). Petitioners (several Oregon public school dis-
tricts and certain minors who would be attending public
schools in Oregon) there asserted that the legislature had
failed to perform a constitutional duty to adequately fund the
state public school system. Petitioners sought alternative
forms ofrelief, based on three theories: (1) a declaratory judg-
ment, holding that the legislature had violated Article VIII,
section 8, of the Oregon Constitution,1 because it had failed to
appropriate sufficient funds for the 2005-07 biennium to
ensure that the state public school system would meet the
quality goals established by law; (2) a similar declaratory
judgment, stating that the legislature had a similar duty
under Article VIII, section 3, of the Oregon Constitution,2 but
had failed to perform that duty; and (3) a mandatory injunc-
tion requiring the legislature to appropriate sufficient funds
for the 2005-07 biennium to ensure that the state public
school 	system would meet the 	quality goals 	previously
described. Pendleton School Dist., 345 Or at 601. The state
successfully moved for summary judgment and, on petition-
ers' appeal, the Court of Appeals affirmed. This court then
allowed petitioners' petition for review.
On review, this court reversed the trial court's
judgment in part and affirmed it in part. The court began by
observing 	that 	Article 	VIII, 	section 	8, 	"presents 	two
seemingly contradictory concepts." Id. at 608. That is, the
1 Article VIII, section 8, of the Oregon Constitution provides, in part:
"(1) The Legislative Assembly shall appropriate in each biennium a sum
of money sufficient to ensure that the state's system of public education meets
quality goals established by law, and publish a report that either demonstrates
the appropriation is sufficient, or identifies the reasons for the insufficiency, its
extent, and its impact on the ability of the state's system of public education to
meet those goals."
2 Article VIII, section 3, of the Oregon Constitution provides:
"The Legislative Assembly shall provide by law for the establishment of a
uniform, and general system of Common schools."

32 	Pendleton School Dist. v. State of Oregon
constitutional provision directs the legislature to fund the
public school system at a certain level, but it then establishes
a reporting requirement that, by its terms, contemplates that
the school system may not be funded at that level. Id. at 607-
08. This court concluded, however, that it could give effect to
both concepts by considering whether each form of relief that
petitioners had requested was consistent with both concepts.
Id. at 609.
Proceeding on that basis, the court concluded that
the trial court should have granted petitioners a declaratory
judgment to the effect that the legislature had failed to
appropriate sufficient funds for the 2005-07 biennium to
meet the quality goals established by law:
"Because the state admits that the legislature failed to fund
the public school system for the 2005-07 biennium at the
levels required by Article VIII, section 8, we can determine
and declare that the legislature failed to act in accordance
with the constitutional mandate. The trial court should
have entered a 	declaratory judgment on that limited
ground."
Id. at 610. The court further concluded, however, that the
courts could not grant a declaratory judgment that the legis-
lature must appropriate in each biennium sums sufficient to
ensure that the public school system meets the quality goals
established by law. Id. at 610-11. Similarly, the court con-
cluded that the courts could not grant an injunction requiring
the legislature to fund the public school system to meet those
goals. Id. Those rulings were based on petitioners' theory
under Article VIII, section 8, of the Oregon Constitution. The
court then went on to reject petitioners' additional argument
that the legislature's failure to meet the quality goals estab-
lished by law constituted a violation of Article VIII, section 3.
Id. at 612-16.
The outcome of the case may be summarized briefly
as follows: The court concluded that petitioners' contention
that the Oregon Constitution directs the legislature to fund
public primary and secondary education at certain levels is
correct. (Indeed, the state essentially conceded the point.)
However, the court also ruled that the provision in Article
VIII, section 8, contemplating a report from the legislature

Cite as 34 7 Or 28 (2009) 	33
explaining its failure to fund education at the required level
(when and ifthat was the case) is a permissible constitutional
alternative to following the constitutional mandate. Thus,
this court declined to provide petitioners with the affirmative
relief that they requested, viz., a judicial direction to the leg-
islative branch to alter its budgetary choices and fund edu-
cation at the appropriate level.
At the close of its opinion, the court stated:
"The decision of the Court of Appeals is affirmed in part
and reversed in part. The judgment of the circuit court is
affirmed in part and reversed in part, and the case is
remanded to the circuit court for entry of a declaratory
judgment consistent with this opinion and for a declaration
that Article VIII, section 8, of the Oregon Constitution does
not 	authorize 	the 	injunctive 	relief that 	[petitioners]
sought."
345 Or at 617. In spite of the fact that petitioners' request for
a court-ordered appropriation had eluded them, however, the
court designated them the prevailing party in the case-a
designation justified by the fact that petitioners had suc-
ceeded in obtaining a direct statement that Article VIII, sec-
tion 8, imposed a duty on the legislature to fund primary and
secondary public education at a certain level, a result that
the circuit court and the Court of Appeals had refused to give
them.
Petitioners now seek attorney fees solely under the
inherent power of this court to award fees, as that concept
has evolved since it first was announced in Deras v. Myers,
272 Or 47, 65-66, 535 P2d 541 (1975). That power allows a
court in equity to award fees when a party to a proceeding in
effect acts in a representative capacity to protect certain
rights of others, and not just the party's own rights. This
court articulated the elements of a Deras award inArmatta v.
Kitzhaber, 327 Or 250, 287, 959 P2d 49 (1998), as follows:
"First, the proceeding must be one in equity. Second, the
party requesting attorney fees must be the prevailing
party. Finally, in filing the action, the party requesting
attorney fees must have been seeking to vindicate an
important constitutional right applying to all citizens with-
out any gain peculiar to himself, as opposed to vindicating

34 	Pendleton School Dist. v. State of Oregon
individualized and different interests, or any pecuniary or
other special interest of his own aside from that shared with
the public at large."
(Internal 	quotation 	marks, 	alterations, 	and 	citations
omitted.)
Petitioners contend that all three Armatta require-
ments are met here. The state does not dispute the first
requirement (that the proceeding be one in equity), and we
agree that it is met. The state does dispute whether petition-
ers meet the second criterion (viz., that they are the prevail-
ing party), but we reject the state's argument. First, this
court designated petitioners as the prevailing party. More-
over, and even assuming that such designation does not end
the matter, petitioners meet the classic requirement to be a
prevailing party: They obtained a substantial modification of
the judgment, which makes them a prevailing party. See
ORS 20.077(3) (stating that standard).
The state makes a contrary argument, relying on
Lewis v. Dept. of Rev., 294 Or 139, 653 P2d 1265 (1982), but
that case is distinguishable. There, the party claiming fees
had sought to be included, on equal privileges grounds,
within a class of taxpayers that was entitled to a certain tax
exemption. However, the Tax Court ultimately denied the
exemption to the group that the party had sought to join,
rather than extending the exemption to him. Under such cir-
cumstances, this court observed, the party claiming fees
arguably was not a prevailing party under any definition,
because the only consequence of his claim was the precise
opposite of what he had sought. Id. at 143-44. In this case, we
hold that, consistent with this court's designation at the time,
petitioners were the "prevailing party" in the litigation and
therefore eligible for a discretionary Deras award of attorney
fees.
This brings us to the third criterion: Petitioners must
have been seeking to vindicate an important constitutional
right that applied to the broad spectrum of citizens, rather
than trying to vindicate a more narrow (often pecuniary)
interest of their own. See Armatta, 327 Or at 287 (so noting).
Some might argue that the "narrow interest" disqualification

Cite as 34 7 Or 28 (2009) 	35
applies here. As it happens, however, we need not even con-
sider whether that disqualification ever would extend to pub-
lic 	entities 	(like 	the 	petitioner 	school 	districts 	here),
because-in our view-petitioners' claim for an award of
attorney fees fails for a different reason.
In our view, the public interest that petitioners were
trying to vindicate-the one that was pivotal to their reason
for entering into the litigation-was the understandable
desire to obtain a mandatory injunction requiring the legis-
lature to reallocate available funds so that the amount
assigned to public primary and secondary education would be
sufficient to ensure that educational goals established by law
would be met. Petitioners did not obtain that result. Instead,
as already noted, they received a declaration from this court
that told them (and the public at large), in effect, that the con-
stitutional provision requires the legislature either to fund
education adequately or to explain in a public report why it
had not done so. Petitioners' success in obtaining a judicial
declaration that the legislature had failed to fund the public
school system at the appropriate level amounted to a Pyrrhic
victory, because Article VIII, section 8, effectively allows the
legislature to choose to provide less than adequate funding as
long as it reports its failure.
Petitioners assert that they "have vindicated the
constitutional right of every Oregonian to a 	Legislative
Assembly that follows the law." Perhaps. But the path that
the legislature must follow does not necessarily take it where
petitioners wish it to go, and-as we made clear in our opin-
ion on the merits-there is no available judicial mechanism
to force that body in one direction as opposed to another.
When the nature of the declaratory judgment that this court
ordered is understood in that light, we think that it is clear
that the result that petitioners have obtained is not the kind
of result for the public at large that calls for the award of
attorney fees under the rationale of Deras and the cases that
have followed it. Petitioners' request for an award of attorney
fees is denied.
Petitioners also have sought an award of costs
against the state. The state has objected to the award. We
overrule the state's objection and award the requested costs.

36 	Pendleton School Dist. v. State of
Petitioners are awarded their costs in the amount of
$1,056.55, payable by the State of Oregon. Petitioners' peti-
tion for an award of attorney foes is denied.
DURHAM, J., concurring in part and dissenting in
part.
I concur in the majority's decision to award costs to
petitioners. However, for the reasons expressed below, I dis-
sent from the majority's decision to deny petitioners' request
for an award of attorney fees.
It is important to acknowledge at the outset the
areas of agreement between the majority and this dissent.
The majority correctly explains that petitioners are the pre-
vailing parties in this action, because
"petitioners had succeeded in obtaining a direct statement
that Article VIII, section 8, imposed a duty on the legisla-
ture to fund primary and secondary public education at a
certain level, a result that the circuit court and the Court of
Appeals had refused to give them."
34 7 Or at 33. To that I would add that petitioners' litigation
also clarified that the legislature is subject to a constitutional
obligation, not a mere aspirational guideline, under Article
VIII, section 8, to appropriate sufficient funds to meet edu-
cation quality goals established by law or accept responsibil-
ity for deficient funding by reporting the reasons for any defi-
ciency in writing. 1
I also agree that petitioners' claim for declaratory
relief under Article VIII, section 8, is the kind of claim that
qualifies for an award of attorney fees under the court's
inherent power. The majority recites that a qualifying claim
1 The Court of Appeals had agreed with the state's contention that the seem-
ingly mandatory terms of Article VIII, section 8 ("The Legislative Assembly shall
appropriate in each biennium a sum of money sufficient to ensure * * *"), in fact
embodied only "an aspirational goal of foll funding for public education," because
the constitutional provision also offored the legislature the option of using an
explanatory report to justify any funding deficiency. Pendleton School Dist. u. State
of Oregon, 220 Or App 56, 76, 185 P3d 4 71 (2008), affd in part and reu'd in part, 345
Or 596, 200 P3d 133 (2009). Relying on that reasoning, the Court of Appeals had
affirmed the trial court's dismissal of the petitioners' complaint for declaratory
judgment.

Cite as 347 Or 28 	37
must be one "in equity," citing Armatta v. Kitzhaber, 327 Or
250, 287, 959 P2d 49 (1998), and that petitioners' claim sat-
isfies that criterion. 347 Or at 33-34. However, this court in
Swett v. Bradbury, 335 Or 378, 389, 67 P3d 391 (2003), con-
cluded that the requirement in Armatta that the proceeding
be one "in equity'' was "of limited utility in determining
whether to award an attorney fee." Instead, the Swett court
concluded that a plaintiff's successful invocation of the court's
authority to render a declaratory judgment concerning the
disputed legal right would qualify for an award of attorney
fees under the court's inherent power. As noted, petitioners'
claim meets that criterion.
Finally, the majority correctly focuses on the state's
objection that "petitioners did not meet the third Deras
requirement, i.e., they did not vindicate an important consti-
tutional right applying to all citizens without any gain pecu-
liar to themselves." The state makes two arguments in sup-
port of that objection. First, the state asserts that petitioners
succeeded only in obtaining reaffirmation of an undisputed
proposition of law-that the legislature must follow the
law-but that that principle was never in issue here. Second,
the state claims that petitioners' victory does not apply to all
of Oregon's citizens and, instead, benefits only students cur-
rently attending a public primary or secondary school and,
arguably, their parents.
The majority does not address those objections.
Instead, the majority focuses on the fact that petitioners
sought, among other things, a mandatory injunction requir-
ing the legislature to appropriate additional funds for public
education and the court did not approve that requested relief.
The majority labels that requested remedy "pivotal" to peti-
tioners' choice to enter into this litigation, but it cites nothing
in the record to support that claim. 34 7 Or at 35. Finally, the
majority asserts that petitioners' failure to obtain an injunc-
tion regarding additional public school funding shows that
they won only a Pyrrhic victory, implying that, in reality,
they lost the war.
The majority's response to the state's objections is
seriously flawed. The state's argument at least concedes that

38 	Pendleton School
the proper focus is on the success that petitioners' action
achieved, not on a form of requested relief that the court did
not grant. That premise stems from petitioners' status as pre-
vailing parties who, but for the error below, should have
received a favorable judgment on their claim.
The central value of the remedy of declaratory judg-
ment, codified in the Uniform Declaratory Judgments Act at
ORS 28.010 to 28.160, is the elimination of uncertainty and
insecurity that result from the ambiguous description oflegal
rights and responsibilities in laws, contracts, and other writ-
ings. ORS 28.120 provides:
"This chapter is declared to be remedial. The purpose of
this chapter is to settle and to afford relief from uncertainty
and insecurity with respect to rights, status and other
legal relations, 	and 	is 	to be 	liberally construed 	and
administered."
Before petitioners filed this action, the terms of
Article VIII, section 8, were nothing if not ambiguous. That
provision seemed to impose a mandatory duty on the legisla-
ture to appropriate funds sufficient to ensure compliance
with quality goals established by law. However, the text of
the provision also linked that funding obligation, by the con-
junction "and," with a reporting obligation concerning both
sufficient and insufficient appropriations. No court previ-
ously had addressed and resolved the multiple ambiguities in
that provision. At least from petitioners' standpoint, if Article
VIII, section 8, imposed a dual obligation on the legislature
to both appropriate sufficient funds and to publish a report
concerning the quality of public education in Oregon, then it
was clear from the available evidence that the legislature
was violating its legal duty under that constitutional pro-
vision.
Petitioners' complaint, as noted, sought a declara-
tory judgment concerning the legislature's duties under
Article VIII, section 8, and, in addition, sought an injunction
requiring the state to provide sufficient funding for the then-
current biennium. The majority ascribes great significance to
petitioners' unsuccessful request for a mandatory injunction

Cite as 34 7 Or 28 	39
requiring greater appropriations for public education. How-
ever, as this court pointed out in Swett, a request for injunc-
tive relief in addition to declaratory relief is "pointless," 335
Or at 389, because the courts assume that "the responsible
state officials would honor the court's declaration without the
necessity of an accompanying injunction." Id. Thus, properly
analyzed, petitioners' claim sought a declaratory judgment
regarding the legislature's duties under Article VIII, section
8, to remove the uncertainty and insecurity resulting from
that provision's ambiguity.
Both the trial court and the Court of Appeals deter-
mined that petitioners' complaint should be dismissed. As
this court noted in its opinion, the Court of Appeals had
determined that the word "shall" in Article VIII, section 8,
was intended to be "permissive" and, in reality, meant "may."
Pendleton School Dist., 345 Or at 607. This court rejected
that position and concluded that petitioners were entitled to
a declaratory judgment "that the legislature failed to fully
fund the public school system, if that is the case." Id. at 610.
On the basis of the state's admissions, this court also
declared that "the legislature failed to act in accordance with
the constitutional mandate." Id. This court also concluded
that it could not grant petitioners' further request for a
declaratory judgment requiring the legislature to fund the
public school system at the levels required by Article VIII,
section 8, because that relief would conflict with the report-
ing provisions in the measure.
This court's opinion establishes that, in addressing
its responsibilities under Article VIII, section 8, the legisla-
ture is carrying out a legal duty imposed by the constitution,
not an aspirational guideline, as the Court of Appeals viewed
the matter. The majority is wrong to discount the value of
that declaratory judgment simply because it lacks a judicial
enforcement mechanism. Just as this court in Swett assumed
that public officials will comply with their duties as declared
by the courts, we also assume that public officials will comply
with legal duties imposed by the constitution, and will do so
without the need for a court order. We cannot make that
assumption regarding aspirational statements, even when
they appear in the constitution. In that respect, petitioners'

40 	Pendleton School Dist. v. State of Oregon
successful appeal has clarified what the legislature is obli-
gated, not merely permitted, to do, even if no further judicial
scrutiny ever occurs in the future. That is a legally significant
result for petitioners and the public.
I would take into consideration, however, the fact
that petitioners did not succeed in obtaining a significant
part of the relief that they sought. In similar proceedings con-
cerning the recovery of attorney fees pursuant to a statute,
the pertinent rule, ORAP 13.10(5)(b), directs the court to con-
sider relevant statutory factors, including those set out in
ORS 20.075(1) and (2), in determining the amount of any fee
award. 	One such factor is "the results obtained." ORS
20.075(2)(d). In considering an equitable award of prevailing
party fees in this nonstatutory context, I would consider
reducing the amount of an award because the result that
petitioners obtained is less than they desired. I would not,
however, completely deny a prevailing party attorney fee
award in this case.
Finally, I reject the state's contention that petition-
ers' victory does not force the legislature to behave differ-
ently. Petitioners' action sought to clarify the constitutional
responsibility of the state legislature in appropriating public
funds for public education throughout the state. All citizens
benefit from the elimination of uncertainty and insecurity
regarding the legislature's compliance with its constitutional
responsibilities in that regard. It is clear that petitioners'
action protected the public interest in compliance by the leg-
islature with duties imposed by the constitution for the pro-
tection and education of all public school students. See Deras
v. Myers, 272 Or 47, 66, 535 P2d 541 (1975) (applying similar
standard in awarding attorney fees; plaintiff's action pro-
tected the "interest of the public in preservation of the indi-
vidual liberties guaranteed against governmental infringe-
ment of the constitution"). An exercise of the court's inherent
authority to award an attorney fee to the prevailing party is
appropriate in that context.
In conclusion, I would allow an award of prevailing
party attorney fees in this case. I would also consider reduc-
ing the award to take into consideration the result obtained
by petitioners. I dissent from the majority's decision to refuse

Cite 	34 7 Or 28 	41
to award an attorney fee in any amount to the prevailing
parties.
For the reasons expressed above, I concur in part
and dissent in part from the majority's decision.
De Muniz, C. J., and Walters, J.,join in this opinion.