Oregon Supreme Court on statutory immunity of LLC members and managers

By Lori Irish Bauman
October 9, 2014

Members and managers of a limited liability company are shielded from vicarious liability for the LLC's torts, but can be held personally liable if they either knew of the tortious acts or participated in them.  That was the conclusion of the Oregon Supreme Court last week in Cortez v. Nacco Material Handling Group, Inc.

ORS 63.165(1) protects members and managers of an LLC from liability resulting "solely by reason of being or acting as a member or manager."  The scope of that statutory immunity was at issue in Cortez.  The court held that the immunity is comparable to that available to an officer or director of a corporation.  According the to court, "members or managers who participate in or control the business of an LLC will not, as a result of those actions, be vicariously liable" for the LLC's torts.  But a member or manager can be liable for its own negligent acts in managing the LLC, or for knowing of or participating in the LLC's torts.

Oregon Court of Appeals recognizes the inconvenient-forum doctrine

By Lori Irish Bauman
October 8, 2014

Addressing an issue of first impression, the Oregon Court of Appeals today held that the inconvenient-forum doctrine, or forum non conveniens, is available as a basis to dismiss a lawsuit in state court.  In Espinoza v. Evergreen Helicopters, Inc., the trial court dismissed a wrongful death action arising from a helicopter crash in Peru, applying the inconvenient-forum doctrine.  On appeal, plaintiffs contended that Oregon courts lack discretion to decline to exercise jurisdiction.

Judge Rex Armstrong, writing for the court, surveyed Oregon case law and determined that courts have inherent power to decline jurisdiction, including based on the inconvenient-forum doctrine.  To obtain dismissal on that basis, a defendant bears the burden of demonstrating that an alternative forum is available and adequate, and that considerations of convenience and justice so outweigh the plaintiff's choice of forum that the action should be dismissed.  The court remanded the case to the trial court for application of the new test.

Oregon Court of Appeals: Transfer of business violated fraudulent transfers law

By Lori Irish Bauman
October 7, 2014

Business owners violated the Uniform Fraudulent Transfers Act (ORS 95.200 to 95.310) when they dissolved one business and transferred the assets and operations to a newly-formed entity, according to the Oregon Court of Appeals. 

In Norris v. R&T Manufacturing, LLC, the court last week affirmed the trial court's conclusion that the reorganization was an improper effort to avoid a judgment against the original business.  The court rejected what the defendant described as good-faith business reasons for forming a new LLC, and found that the new entity didn't pay reasonably equivalent value for the tangible and intangible assets.

California will require supervisor training to prevent workplace bullying

By Stacey Mark
September 30, 2014

California recently became the second state to pass a law acknowledging the problem of workplace bullying.  The first state to do so was Tennessee.  

Effective January 1, 2015, California’s existing law mandating sexual harassment training for supervisors must include training on the prevention of abusive conduct.  For the purpose of the new California law, "abusive conduct" means

conduct of an employer or employee in the workplace, with malice, that a reasonable person would find hostile, offensive, and unrelated to an employer's legitimate business interests. Abusive conduct may include repeated infliction of verbal abuse, such as the use of derogatory remarks, insults, and epithets, verbal or physical conduct that a reasonable person would find threatening, intimidating, or humiliating, or the gratuitous sabotage or undermining of a person's work performance. A single act shall not constitute abusive conduct, unless especially severe and egregious.

Tennessee’s law, passed earlier this year, requires the Tennessee advisory commission on intergovernmental relations (TACIR) to create by March 15, 2015, a model policy for employers to prevent abusive conduct in the workplace.  Employers who adopt the TACIR or an equivalent policy are immune from suit for any employee’s abusive conduct that results in negligent or intentional infliction of mental anguish.  

Since 2003, 26 states have introduced some version of the Healthy Workplace Bill (HWB), the anti-bullying legislation being promoted by social psychologist Gary Namie and his wife, who was a victim of workplace bullying and, thereafter, suffered from depression.  To date, no states have enacted the HWB.  However, recognizing the serious harmful effects of bullying, many schools have already implemented anti-bullying policies.  It may just be a matter of time before anti-bullying legislation extends to the workplace.