PERS, Judges And Their Financial Conflict Of Interest, Part 2

Part 1 of this report described the conflict of interest that Oregon judges have regarding PERS cases and explained how that conflict was created by the Oregon legislature in 1983.  In 1992, 1996 and 2005, the Oregon Supreme Court decided significant PERS cases.  In all three cases, the justices had a direct financial interest in the outcome.  The justices held that because all Oregon judges were PERS members and had the same conflict they could decide the cases.  PERS members won each time.   As a result, the judges who decided the cases and the PERS legislators who put the judges into PERS benefited financially.  But, there is a serious constitutional problem with those decisions. 

The US Supreme Court has held that the Due Process Clause of the 14th Amendment to the US Constitution requires that a judge recuse himself or herself when the judge has a direct, personal, substantial, pecuniary interest in the case.   This requirement is based on the maxim that “no man is allowed to be a judge in his own cause because his interest would certainly bias his judgment, and, not improbably, corrupt his integrity.” The Federalist No. 10, p 59 (J. Cooke ed. 1961) (J. Madison).

There is an exception to requiring recusal of a judge who has a financial interest in the outcome of a case known as the Rule of Necessity.  Under this rule, if it is impossible to find a judge without the conflict of interest, judges with the conflict can hear the case.  But the Rule of Necessity has never been used in the case of a conflict created by a state law which would deprive a person of a federal constitutional right.  And there is another rule that holds that if a state law deprives a person of a fundamental federal constitutional right, that state law is unconstitutional. 

That is the precise issue currently pending before the Oregon Supreme Court in a case that I have filed.  That case involves PERS and was filed in the Oregon Tax Court.   The Tax Court judge is a PERS member and I filed a motion to disqualify him but he denied my motion.  I then filed an action in the Oregon Supreme Court to require the Tax Court judge to be disqualified and, at the same time, to disqualify all of the Oregon Supreme Court justices because, they too, are PERS members.

I am arguing that the Oregon Supreme Court justices must do one of the following: (1) disqualify themselves and appoint temporary non-PERS judges to  decide whether the Tax Court judge must disqualify himself; or, (2) if  non-PERS judges cannot be appointed to the court, it must find that the 1983 law that put the judges into PERS is unconstitutional because that law would  deprive me of my federal Due Process right to a neutral judge.  Either option allows my case to be decided by judges who are not PERS members.  Therefore, one of those options must be used. 

Stay tuned and I will let you know what happens.  If the Oregon Supreme Court does not allow me the right to have my case decided by a non-PERS judge, I will have the right to appeal to the US Supreme Court.


About Dan Re

I am an attorney who has lived in Bend and practiced law since 1981. In educating myself about the Oregon Public Employees Retirement System (PERS), I was shocked at how the PERS laws were changed by the legislature, once legislators were allowed to join PERS in 1971, 26 years after PERS was first created. Those changes personally benefitted the legislators who made them at the direct financial expense of the people they were elected to represent. That is wrong and I intend to change it. In 2009, I started a non-profit 501(c)(4) corporation, In RE The People, Inc., for the purpose of informing concerned citizens of what happened regarding PERS and other issues of social and civic importance. I then created this blog to further that objective.
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