BALMER, C.J.
These cases challenge the constitutionality of Senate Bill (SB) 822, passed by the 2013 Legislative Assembly during its regular session, and SB 861, passed during a special session in October 2013, both of which change certain statutory provisions of the Public Employees Retirement System (PERS) and, in doing so, affect the retirement benefits of some current and former public employees. Central Oregon Irrigation District (the District), a public employer and
The District's arguments in support of its motions to disqualify are based on statutory provisions, the Oregon Code of Judicial Conduct (Code), and constitutional principles. The District contends that participation by the judges of this court and the special master would violate ORS 14.210 and former Judicial Rule (JR) 2-106(A)(3) (2002) of the Code.
The District argues that the special master shares the disqualifying characteristic of the members of this court because, as a judge, he is a member of PERS and, once appointed special master, he "in fact becomes a `member' of this court, albeit temporarily." Although we do not necessarily agree with the District's assertion that the special master "becomes" a member of this court, we acknowledge that the circuit court judge appointed as a special master is a member of PERS, and we will assume for purposes of this opinion that the same analysis regarding disqualification applies to him as to members of this court.
Other parties have responded to the District's motions, arguing variously that any economic interest of the members of this court in the outcome of this case is speculative and perhaps de minimis; that the legislature's decision to confer jurisdiction on this court to decide challenges to SB 822 and SB 861 trumps any conflicting statutes or rules; that the "rule of necessity" permits this court to decide these cases, notwithstanding any potential disqualification; and that this court's adjudication of the challenges to SB 822 does not violate any due process right of the District.
Because the potential grounds for disqualification that the District raises as to SB 822 also arise under SB 861, we will treat the District's motion as applying to this court's adjudication of challenges to that law as well. We will refer to the two laws, collectively, as "the 2013 PERS legislation," except when separately discussing one or the other.
As noted, certain parties that have responded to the District's motions argue that any interest that judges on this court have in the outcome of these cases is speculative and de minimis. They point out that the provisions of SB 822 relate to cost-of-living adjustments and out-of-state taxes for persons who are PERS retirees and that the members of this court are not now PERS retirees and, for a variety of reasons, might never become PERS retirees. Additionally, they note that the cost of living in the future may fall, rather than rise, rendering the prospect of future cost-of-living increases for PERS beneficiaries — and the effect of the 2013 PERS legislation on those possible increases — speculative. On the other hand, as the District argues, the value of the potential PERS benefits to active members of PERS, including members of this court, obviously is affected by changes to the cost-of-living adjustment provisions of the PERS statutes. For purposes of this opinion, however, we need not resolve that issue. We will assume that the potential, future impact on members of this court of the changes to PERS made by the 2013 PERS legislation — although uncertain and perhaps speculative at this time — constitutes the kind of "interest" and "economic interest" referred to in ORS 14.210 and Rule 3.10(A)(2)(c) and Rule 3.10(A)(3) of the Code.
We turn to the District's argument that the judges of this court should be disqualified because each member of the court is "directly interested" in this proceeding, and, therefore, under ORS 14.210(1)(a), "shall not act as judge" in the proceeding. That argument is unavailing, because the legislature has specifically conferred jurisdiction on this court to decide these very cases. SB 822, section 19(1), provides:
(Emphases added.) See also SB 861, § 11(1) (identical provision). Furthermore, SB 822,
When the legislature enacted those judicial review provisions, it did so knowing that the members of this court are PERS members and that this court had previously decided that its members were not barred from ruling on challenges to legislative changes in PERS on that basis. The judicial review provisions of the 2013 PERS legislation are virtually identical to those that the legislature enacted in 2003 for review of the 2003 PERS legislation that was at issue in Strunk v. PERB, 338 Or. 145, 108 P.3d 1058 (2005). See Or Laws 2003, ch 625, §§ 17-17a (judicial review provisions for challenges to PERS legislation). Pursuant to the express grant of jurisdiction in the 2003 legislation, this court in Strunk appointed a sitting judge as a special master to hear evidence and prepare recommended findings of fact, and the court proceeded to decide the cases challenging the changes in PERS made by the 2003 legislation. As to the potential conflict of interest on the part of judges who are PERS members, this court stated in Strunk:
338 Or. at 151 n. 5, 108 P.3d 1058.
In interpreting statutes, this court presumes that the legislature is aware of existing law and this court's interpretation of that law. See State v. Stark, 354 Or. 1, 10, 307 P.3d 418 (2013) (court presumes that Oregon legislature aware of existing law on subject); State v. Clevenger, 297 Or. 234, 244, 683 P.2d 1360 (1984) (noting Oregon legislature is presumed to be aware of prior decisions of the Oregon Supreme Court). In analyzing the legislature's grant of specific and express authority to this court in the 2013 PERS legislation, we again presume that the legislature was aware of the existing statutes, including the statutes that make members of this court members of PERS. We also presume that the legislature was aware of this court's decision in Strunk interpreting judicial review provisions virtually identical to those in the 2013 PERS legislation. In Strunk, this court held that those judicial review provisions directed the members of this court to decide the challenges to the 2003 PERS legislation despite any potential financial stake or other "interest" that might otherwise have disqualified them from doing so. When the legislature adopted essentially identical review provisions as part of the 2013 PERS legislation, it presumably did so with the understanding that this court would interpret those provisions in the same way that it did the provisions in the 2003 PERS legislation, viz., that the members of this court could adjudicate those cases notwithstanding the potential economic interest that they might have in the outcome.
The District next argues that the members of this court should be disqualified because their participation in these cases would violate the Code. The District's motion refers to former JR 2-106(A)(3) (2002), which provided for disqualification when a judge "has a financial interest in the subject matter in controversy" or "has any other interest that could be substantially affected by the outcome of the proceeding." As noted above, effective December 1, 2013, this court adopted a revised Code. The substance of former JR 2-106(A)(3) (2002) now appears in Rule 3.10, which provides that a judge shall disqualify himself or herself if he or she has "an interest that could be substantially affected by the proceeding," Rule 3.10(A)(2)(c), or "an economic interest in the subject matter in controversy." Rule 3.10(A)(3).
As discussed above, Rule 3.10 of the Code now includes an express exception to otherwise applicable disqualification rules when the rule of necessity applies: "The disqualification requirement under subsection (A) of this Rule does not apply if the rule of necessity applies." Rule 3.10(B). As we discuss in greater detail below, under the "rule of necessity," if the only judges authorized by law to decide a case all have an interest in the outcome of the case, that interest is not disqualifying because judges have "the absolute duty" to "hear and decide cases within their jurisdiction." United States v. Will, 449 U.S. 200, 215, 101 S.Ct. 471, 66 L.Ed.2d 392 (1980).
The rule of necessity has been applied consistently by federal and Oregon courts. See Evans v. Gore, 253 U.S. 245, 247-48, 40 S.Ct. 550, 64 L.Ed. 887 (1920) (court must decide case involving taxation of compensation of federal judges, notwithstanding financial interest of judges in outcome of case), overruled on other grounds by United States v. Hatter, 532 U.S. 557, 567, 121 S.Ct. 1782, 149 L.Ed.2d 820 (2001); Woodward v. Pearson, 165 Or. 40, 58, 103 P.2d 737 (1940) (court members' interest as parties to contract with publishing company for publication of codification of state laws did not disqualify them from adjudicating constitutionality of statute authorizing publication). In Woodward, this court analogized the allegedly disqualifying interest there to litigation involving taxation:
165 Or. at 58, 103 P.2d 737. Woodward thus indicates that, when no alternative tribunal is available, otherwise disqualified judges may hear the case. This court has applied the rule of necessity in cases like this one, where judges have had an otherwise disqualifying interest and no law authorizes judges without such an interest to decide the case. Strunk, 338 Or. at 151 n. 5, 108 P.3d 1058 (citing rule of necessity and earlier cases applying it). Here, as noted, we assume that, as members of PERS, the judges of this court have an interest and an "economic interest" in the outcome of this case as those terms are used in the Code. However, the only court authorized by the 2013 PERS legislation to decide this case is "the Supreme Court." Accordingly, for the reasons we discuss below, the rule of necessity applies, and Rule 3.10 of the Code does not bar this court from deciding the case.
We turn to our analysis of the rule of necessity as it applies in this case. In Strunk, the court followed two earlier decisions and held that the "rule of necessity requires that we decide the contractual and constitutional challenges that the legislature has directed us to adjudicate." 338 Or. at 151 n. 5, 108 P.3d 1058. Here, the District
The District first asserts that this court could appoint members of the bar who are not PERS members as pro tempore circuit court judges under ORS 1.635. Then, the District continues, those "circuit judges" could be appointed under ORS 1.600 as judges pro tempore of the Oregon Supreme Court. ORS 1.600 provides that, once appointed as a pro tempore judge of the Supreme Court (or Court of Appeals), the person so appointed "has all the judicial powers and duties, while so serving, of a regularly elected and qualified judge of the court to which the judge is appointed." In that way, the District argues, a "Supreme Court" could be created consisting of individual members of the bar who would have "all the judicial powers and duties * * * of a regularly elected and qualified judge" — but not including any person elected as a judge under Article VII (Amended), section 1, of the Oregon Constitution or appointed by the Governor to fill a judicial vacancy under Article V, section 16, of the Oregon Constitution. That group of individuals, according to the District, none of whom would be PERS members, could decide these cases. It would be a court of pro tempore circuit court judges who had then been appointed pro tempore Supreme Court judges.
The statutes providing for the appointment of pro tempore judges to this court, however, do not permit the process that the District suggests. First, ORS 2.111(5) provides, in part: "When sitting en banc, the [supreme] court may include not more than two judges pro tempore of the Supreme Court." The District states that it is not suggesting that this court sit in a "department" of between three and five judges, as it may under ORS 2.111(2); the alternative to sitting in a department is sitting "all together," ORS 2.111(1), usually referred to as sitting en banc.
Additionally, the District's argument that a "Supreme Court" sitting en banc could be comprised solely of individual members of the bar who are appointed to serve as pro tempore circuit court judges is inconsistent with ORS 1.600(1). ORS 1.600(1) provides:
(Emphasis added.) As noted previously, the District asserts that a member of the bar could first be appointed a pro tempore judge of the circuit court and then be appointed as a pro tempore judge of the Oregon Supreme Court. This court frequently appoints experienced members of the bar to serve as pro tempore judges of the circuit court. However, ORS 1.600(1) does not authorize pro tempore circuit court judges to be appointed as pro tempore judges of the Supreme Court. Rather, it explicitly limits the persons who may be so appointed to "regularly elected and qualified, or appointed and qualified" Court of Appeals, Tax Court, or circuit court
The District's position would require us to insert into ORS 1.600(1) the terms "or pro tempore circuit court judge" as a category of persons who may be appointed to serve as a judge pro tempore of the Oregon Supreme Court. We may not extend the reach of ORS 1.600(1) beyond what the terms of that statute provide. In our view, the only reasonable reading of the statutory terms in context is that they authorize the Supreme Court to appoint only regularly elected judges of the lower courts — or judges appointed by the Governor to fill a judicial vacancy — to serve as pro tempore judges of the Supreme Court.
Our conclusion, as a matter of statutory interpretation, that only regularly elected or appointed sitting judges may be appointed as pro tempore judges of the Oregon Supreme Court, is consistent with Article VII (Amended), section 2a, of the Oregon Constitution. Article VII (Amended), section 2a, addresses the temporary appointment and assignment of judges in the following terms:
That provision differentiates between persons who can be appointed pro tempore members of the Supreme Court (subsection 1) and persons who can be appointed pro tempore members of courts inferior to the Supreme Court (subsection 2). The text of the provision makes it plain that the constitution permits (if there is statutory authorization) only judges (retired Supreme Court judges or current judges of inferior courts) to be appointed pro tempore members of the Supreme Court. And the provision permits members of the bar who are not judges to be appointed pro tempore members of only courts inferior to the Supreme Court.
The District's proposal that this court appoint nonjudge members of the bar first to be pro tempore circuit court judges and then appoint them as pro tempore members of the Oregon Supreme Court conflicts with the distinction drawn by the provisions of Article VII (Amended), section 2a. The necessary, negative implication that flows from the express terms of Article VII (Amended), section 2a, is that nonjudge members of the bar cannot be appointed as pro tempore members of the Supreme Court. The distinction drawn expressly by the provisions of Article VII (Amended), section 2a, of the Oregon Constitution cannot be evaded by the artificial construct of one pro tempore appointment overlaid on another pro tempore appointment. Consequently, we conclude that the District's proposal also is precluded by Article VII (Amended), section 2a.
For the reasons discussed above, we hold that the statutes and constitutional provisions regarding the appointment of pro tempore judges to the Oregon Supreme Court permit the appointment only of persons who are elected or appointed judges (or who were elected or appointed Supreme Court judges and are now retired). All such persons are members of the PERS system and therefore share what we have assumed for purposes of this case is an "interest" or "economic interest" in the outcome of this proceeding, as those terms are used in Rule 3.10(A) of the Code. Because all judges who could decide these cases share the same potentially disqualifying
The discussion above also resolves the District's constitutional argument. The District argues that even if the statutes and judicial rules permit the members of this court to decide these cases, the Due Process Clause of the United States Constitution requires that the members of the court recuse themselves. In particular, the District cites Aetna Life Insurance Co. v. Lavoie, 475 U.S. 813, 106 S.Ct. 1580, 89 L.Ed.2d 823 (1986), for the proposition that it is a due process violation for a judge to decide a case in which the judge has a financial interest. Although the United States Supreme Court has held that it violates the Due Process Clause to have a person's case heard by a judge who "has a direct, personal, substantial, pecuniary interest in reaching a conclusion against him in his case," if no judge without such an interest is authorized to hear the case, due process concerns give way to the "rule of necessity." Aetna, 475 U.S. at 821-22, 106 S.Ct. 1580 (internal quotation marks omitted); see also id. at 825, 106 S.Ct. 1580 (noting that disqualification of every judge in the state might implicate "rule of necessity," meaning none of the judges would be disqualified despite possible pecuniary interest).
As the United States Supreme Court stated in Will:
449 U.S. at 213-14, 101 S.Ct. 471 (footnote omitted).
When the rule of necessity applies, the due process concerns raised by the District give way to the fundamental need for a tribunal that can address petitioners' claims. As one lower federal court recently explained:
Beer v. U.S., 696 F.3d 1174, 1179 (Fed.Cir. 2012) (quoting Will, 449 U.S. at 213, 101 S.Ct. 471 (quoting F. Pollock, A First Book of Jurisprudence 270 (6th ed 1929))) (citations omitted; first emphasis added; second emphasis added in Beer), cert. den., ___ U.S. ___, 133 S.Ct. 1997, 185 L.Ed.2d 866 (2013).
As discussed above, under Oregon law, the only persons other than the current members of the court who may serve on the Oregon Supreme Court for purposes of deciding these cases are retired judges of this court or current judges of lower Oregon state courts. Any substitute judge authorized by Oregon law to decide these cases would have the same disqualifying interest. Because disqualification would leave petitioners here without a tribunal to decide their claims, and in light of the legislature's express grant of jurisdiction to this court to decide challenges to the 2013 PERS legislation, we conclude that the rule of necessity applies and that the members of this court are not disqualified from deciding these cases because of any interest in the proceeding under ORS 14.210(1)(a) or Rule 3.10(A) of the Code. We also conclude, as have other state and federal courts that have considered the issue, that application of the rule of necessity in these circumstances is not a denial of due process.
Intervenor Central Oregon Irrigation District's motions to disqualify the members of this court and the Special Master are denied.