Oregon Supreme Court Strikes Down Immunity for State Employees in Worker Injury Case

In a significant ruling that reshapes the liability landscape for public entity employers and their workers’ compensation insurers, the Oregon Supreme Court has struck down a key immunity provision within the Oregon Tort Claims Act.

The Jan. 26 majority decision in Crandall vs. State of Oregon addresses the constitutional rights of injured workers to seek remedies beyond workers’ compensation when negligence by state employees is involved. By reversing lower court decisions, the Supreme Court effectively widened the path for subrogation and liability claims against the state, ruling that statutory immunity cannot completely bar a common-law negligence action for workers injured by state actors.

The case originated from a severe accident during the 2018 Sugar Pine fire near Trail, Oregon. The plaintiff, Shirley “Joe” Crandall, was a bulldozer operator employed by a private company contracted by the Oregon Department of Forestry (ODF) to assist with firefighting efforts.

While following orders from ODF supervisors to navigate a narrow access road in poor visibility, Crandall’s bulldozer tumbled down a steep canyon, resulting in extensive injuries. Because Crandall was on the job, he received workers’ compensation benefits through his private employer. However, he also filed a civil lawsuit against the state and the two ODF supervisors, alleging their negligence caused the accident.

The core legal dispute centered on the intersection of workers’ compensation exclusivity and sovereign immunity. The defendants argued that the Oregon Tort Claims Act provided them with immunity. Specifically, they pointed to a provision stating that public bodies and their employees are immune from liability for any claim involving an injury covered by workers’ compensation law.

The plaintiff countered that this statutory immunity violated the “remedy clause” of the Oregon Constitution, which guarantees every person a remedy by due course of law for personal injuries. The plaintiff argued that while workers’ compensation provides some benefits, stripping him of the right to sue negligent third parties—simply because those parties work for the state—left him without a constitutionally adequate remedy for his full damages, including noneconomic losses.

The Oregon Supreme Court’s analysis focused on whether the Legislature had the authority to eliminate a common-law remedy without providing a sufficient substitute. The court examined the historical context of the remedy clause and previous rulings regarding statutory caps on damages. The justices distinguished this case from prior decisions where damages were merely capped, noting that the provision in question entirely eliminated the right to a negligence action for a specific class of people: those covered by workers’ compensation.

The court found that while the state has a legitimate interest in sovereign immunity and indemnifying its employees, it cannot achieve those goals by completely denying a remedy to injured workers. The court emphasized that under common law, a worker injured by a third party would have the right to seek full economic and noneconomic damages. The immunity provision, however, stripped that right away without a “quid pro quo” or a balanced alternative.

As the court stated, “The remedy clause requires more than a law that serves the state’s interests.” The justices concluded that the workers’ compensation system, which does not cover noneconomic damages like pain and suffering, was not a sufficient substitute for the eliminated common-law right to sue the negligent state employees.

Ultimately, the Oregon Supreme Court reversed the decision of the Court of Appeals and remanded the case to the circuit court for further proceedings on Crandall’s claim. Two justices dissented with the majority opinion.

View the full decision here. &