County of Linn v. State of Oregon

When it has been determined that a particular statutory scheme contains a contractual promise, the “standard of clear and unmistakable intent * * * focuses only on whether the legislature intended a particular * * * provision to be part of that promise.” Moro v. State, 357 Or 167, 203 (2015).

Linn County brought suit for breach of contract against the State, asserting that ORS 530.020 to 530.181 (the Act) created a contractual obligation for the State to manage forestlands so as to “maximize the potential revenue that should be generated” from the forestlands. A jury ruled in Linn County’s favor, awarding over $1 billion in damages. The State assigns error to the trial court’s denial of its motion to dismiss, arguing it did not have a contractual obligation under the Act to manage the forestlands to maximize revenue. When it has been determined that a particular statutory scheme contains a contractual promise, the “standard of clear and unmistakable intent * * * focuses only on whether the legislature intended a particular * * * provision to be part of that promise.” Moro v. State, 357 Or 167, 203 (2015). The Court found that the statute lacks promissory language, and the management standard was intended to serve as a statutory delegation of authority rather than a term to the contractual offer. While the Court agreed that a statutory contract was created to some extent, it ultimately determined that the text, context, and legislative history regarding the obligation to secure the “greatest permanent value of such lands to the state” did not represent the clear and unmistakable intent necessary to conclude that this obligation was a term of the statutory contract. Reversed and remanded on appeal; cross-appeal dismissed as moot.