72nd OREGON LEGISLATIVE ASSEMBLY--2003 Regular Session
NOTE: Matter within { + braces and plus signs + } in an
amended section is new. Matter within { - braces and minus
signs - } is existing law to be omitted. New sections are within
{ + braces and plus signs + } .
LC 3482
Minority Report
B-Engrossed
Senate Bill 880
Ordered by the House June 10
Including Senate Amendments dated May 20 and House Minority
Report
Amendments dated June 10
Sponsored by nonconcurring members of the House Committee on
Judiciary: Representatives PROZANSKI, ACKERMAN
SUMMARY
The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure.
Establishes { + $100 million as presumptive + } amount of
supersedeas undertaking required for stay of certain judgments if
judgment is against tobacco product manufacturer or affiliate or
successor of tobacco product manufacturer that is making payments
to state under Master Settlement Agreement or related
legislation. { - Applies only to judgments in amount greater
than $1 million. Provides that supersedeas undertaking be lesser
of $100 million or $1 million plus 10 percent of amount of
judgment in excess of $1 million. Applies to judgments entered
by Oregon courts and to stays of foreign judgments filed in
Oregon. - } { + Allows for increase of supersedeas amount in
certain circumstances. + }
Declares emergency, effective on passage.
A BILL FOR AN ACT
Relating to stay of judgment; creating new provisions; amending
ORS 293.533; and declaring an emergency.
Whereas the moneys paid to this state under the Master
Settlement Agreement entered into between the state and tobacco
product manufacturers contributes substantially to the funds
available to this state to provide essential health services,
education services and other human services; and
Whereas it is critical that the Legislative Assembly take
action to ensure that the moneys available for these services not
be unnecessarily diverted by reason of unrelated civil actions
against tobacco product manufacturers; and
Whereas the Legislative Assembly may take steps that protect
the state's interest in the revenues available under the Master
Settlement Agreement without unduly burdening the interests of
other claimants; now, therefore,
Be It Enacted by the People of the State of Oregon:
SECTION 1. { + Section 2 of this 2003 Act is added to and made
a part of ORS 293.530 to 293.535. + }
SECTION 2. { + (1) The provisions of this section apply only
to civil actions against a tobacco product manufacturer, or
against an affiliate or successor of a tobacco product
manufacturer, in which:
(a) The tobacco product manufacturer, affiliate or successor is
subject to the requirements of ORS 293.535; and
(b) The state is not a plaintiff.
(2) In any civil action described in subsection (1) of this
section, the presumptive amount for any supersedeas undertaking
required of the tobacco product manufacturer, affiliate or
successor as a condition of a stay of judgment on appeal is $100
million if the judgment is for $100 million or more.
(3) In any civil action described in subsection (1) of this
section in which the amount of the judgment is for $100 million
or more, the judgment creditor may move the court for an order
increasing the amount of the supersedeas undertaking above the
presumptive amount specified in subsection (2) of this section.
The court may increase the amount of the undertaking only if the
judgment creditor establishes by a preponderance of the evidence
that:
(a) The judgment debtor does not have sufficient assets or
financial capacity to ensure payment of that portion of the
judgment exceeding $100 million, but the judgment debtor does
have the financial capacity to purchase an undertaking in the
amount requested by the judgment creditor;
(b) An increase in the amount of the undertaking is necessary
to prevent irreparable financial damage to the judgment creditor,
and the judgment debtor has the financial capacity to purchase an
undertaking in the amount requested by the judgment creditor;
(c) An increase in the amount of the undertaking is necessary
because of existing or threatened dissipation or diversion of
assets by the judgment debtor that cannot reasonably be prevented
by court orders, including orders prohibiting continued or
threatened dissipation or diversion of assets by the judgment
debtor; or
(d) Requiring the judgment debtor to file an undertaking in the
amount requested, when considered alone or in conjunction with
other judgments against the judgment debtor, will not threaten
the judgment debtor's ability to satisfy financial obligations to
the State of Oregon arising under the Master Settlement Agreement
or under judgments awarding punitive damages.
(4) If a motion is filed under subsection (3) of this section,
all parties may conduct such discovery as is necessary in support
of the motion. The court shall enter such protective orders under
ORCP 36 C as may be necessary to protect the interests of the
parties.
(5) The Attorney General may appear in any proceedings under
this section for the purpose of protecting the interests of the
state in the proceedings.
(6) The provisions of this section apply to any supersedeas
undertaking required for a judgment entered by a court of this
state and to any security required as a condition of staying
enforcement of a foreign judgment under the provisions of ORS
24.135 (2). + }
SECTION 3. { + Section 2 of this 2003 Act applies to all civil
actions described in section 2 (1) of this 2003 Act, whether
commenced before, on or after the effective date of this 2003 Act
or filed under the provisions of ORS 24.105 to 24.125, 24.135 and
24.155 to 24.175 before, on or after the effective date of this
2003 Act. + }
SECTION 4. ORS 293.533 is amended to read:
293.533. { + As used in ORS 293.530 to 293.535: + }
(1) 'Adjusted for inflation' means increased in accordance with
the formula for inflation adjustment set forth in Exhibit C to
the Master Settlement Agreement.
(2)(a) 'Affiliate' means a person who directly or indirectly
owns or controls, is owned or controlled by, or is under common
ownership or control with, another person.
(b) For purposes of defining 'affiliate':
(A) The terms 'owns,' 'is owned' and 'ownership' mean ownership
of an equity interest, or the equivalent thereof, of 10 percent
or more; and
(B) The term 'person' means an individual, partnership,
committee, association, corporation or any other organization or
group of persons.
(3) 'Allocable share' means Allocable Share as that term is
defined in the Master Settlement Agreement.
(4)(a) 'Cigarette' means any product that contains nicotine, is
intended to be burned or heated under ordinary conditions of use,
and consists of or contains:
(A) Any roll of tobacco wrapped in paper or in any substance
not containing tobacco;
(B) Tobacco, in any form, that is functional in the product and
that because of its appearance, the type of tobacco used in the
filler, or its packaging and labeling, is likely to be offered
to, or purchased by, consumers as a cigarette; or
(C) Any roll of tobacco wrapped in any substance containing
tobacco that, because of its appearance, the type of tobacco used
in the filler, or its packaging and labeling, is likely to be
offered to, or purchased by, consumers as a cigarette described
in subparagraph (A) of this paragraph.
(b) The term 'cigarette' includes 'roll-your-own tobacco '
(i.e., tobacco that, because of its appearance, type, packaging
or labeling, is suitable for use and likely to be offered to, or
purchased by, consumers as tobacco for making cigarettes). For
purposes of this paragraph, 0.09 ounces of roll-your-own tobacco
shall constitute one individual cigarette.
(5) 'Master Settlement Agreement' means the settlement
agreement (and related documents) entered into on November 23,
1998, by the State of Oregon and leading United States tobacco
product manufacturers.
(6) 'Qualified escrow fund' means an escrow arrangement with a
federally or state chartered financial institution having no
affiliation with any tobacco product manufacturer and having
assets of at least $1 billion where such arrangement requires
that such financial institution hold the escrowed funds'
principal for the benefit of releasing parties and prohibits the
tobacco product manufacturer who is placing the funds into escrow
from using, accessing or directing the use of the escrowed funds'
principal except as consistent with ORS 293.535 (2)(b).
(7) 'Released claims' means Released Claims as that term is
defined in the Master Settlement Agreement.
(8) 'Releasing parties' means Releasing Parties as that term is
defined in the Master Settlement Agreement.
(9)(a) 'Tobacco product manufacturer' means an entity that,
after October 23, 1999, directly (and not exclusively through any
affiliate):
(A) Manufactures cigarettes anywhere that such manufacturer
intends to be sold in the United States, including cigarettes
intended to be sold in the United States through an importer
(except where such importer is an Original Participating
Manufacturer (as that term is defined in the Master Settlement
Agreement) that will be responsible for the payments under the
Master Settlement Agreement with respect to such cigarettes as a
result of the provisions of subsection II(mm) of the Master
Settlement Agreement and that pays the taxes specified in
subsection II(z) of the Master Settlement Agreement, and provided
that the manufacturer of such cigarettes does not market or
advertise such cigarettes in the United States);
(B) Is the first purchaser anywhere for resale in the United
States of cigarettes manufactured anywhere that the manufacturer
does not intend to be sold in the United States; or
(C) Becomes a successor of an entity described in subparagraph
(A) or (B) of this paragraph.
(b) The term 'tobacco product manufacturer' does not include an
affiliate of a tobacco product manufacturer unless such affiliate
is itself a tobacco product manufacturer under subparagraph
(a)(A), (a)(B) or (a)(C) of this paragraph.
(10) 'Units sold' means the number of individual cigarettes
sold in the State of Oregon by the applicable tobacco product
manufacturer (whether directly or through a distributor, retailer
or similar intermediary or intermediaries) during the year in
question, as measured by excise taxes collected by the State of
Oregon on packs (or roll-your-own tobacco containers) bearing the
excise tax stamp of this state. The Department of Revenue shall
promulgate such rules as are necessary to ascertain the amount of
state excise tax paid on the cigarettes of such tobacco product
manufacturer for each year.
SECTION 5. { + This 2003 Act being necessary for the immediate
preservation of the public peace, health and safety, an emergency
is declared to exist, and this 2003 Act takes effect on its
passage. + }
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