Oregon State Workers’ Comp Insurer Not Immune from Suit

August 3, 2007

The Oregon Supreme Court has ruled that State Accident Insurance Fund Corporation (SAIF), the state workers’ compensation insurer, may be sued for damages.

In John Johnson v. SAIF Corp., the plaintiff alleged that SAIF had deprived him of his right to due process under the 14th Amendment to the United States Constitution when SAIF terminated his permanent total disability (PTD) workers’ compensation benefits without a pretermination hearing. The trial court granted summary judgment in favor of the defendants. The Court of Appeals affirmed the trial court’s dismissal of plaintiff’s claim for injunctive relief, but otherwise reversed and remanded, holding that SAIF is a “person” for purposes of Section 1983 and therefore could be sued for its alleged violation of plaintiff’s due process rights.

The Supreme Court affirmed the Court of Appeals decision, saying, “SAIF does not share the state’s immunity under the Eleventh Amendment and therefore is a ‘person’ for purposes of claims under 42 USC section 1983. We further conclude that plaintiff’s Section 1983 claim is not barred by his failure to raise it in his workers’ compensation proceedings. Whether the Due Process Clause required SAIF to afford plaintiff a hearing before terminating his PTD benefits is a question for another day.”

The judgment of the circuit court was affirmed in part and reversed in part, and the case was remanded for further proceedings.

For more information, visit http://www.publications.ojd.state.or.us/S53734.htm.

Source: Oregon Judicial Department

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