OTLA Trial Lawyer Fall 2021

49 Trial Lawyer • Fall 2021 Between the Sheets Lisa T. Hunt Cody Hoesly Nadia Dahab By Cody Hoesly, OTLA Guardian By Lisa T. Hunt By Nadia Dahab, OTLA Guardian DECISIONS OF THE OREGON SUPREME COURT The Oregon constitutional right to a jury trial applies to shareholder deriva- tive claims seeking damages. A trial court may deny a mid-trial motion to amend an answer to assert a new affir- mative defense where allowing the amendment would prejudice the plain- tiff. Deep Photonics Corp. v. LaChapelle , 368 Or 274 (2021); Balmer, J. The plain- tiffs were represented by Jeff Pitzer. Cody Hoesly filed an amicus brief on behalf of OTLA. Two shareholders (the plaintiffs) brought breach of fiduciary duty claims on behalf of a corporation against three of the corporation’s directors. The case was tried to a jury over the defendants’ objection. After the close of the plaintiffs’ evidence, the defendants sought to amend their answer to raise an exculpa- tion provision in the corporations’ cer- tificate of incorporation that eliminated liability of its directors for monetary damages for certain breaches of the fidu- ciary duty of care. The trial court denied that motion. The jury found, among other things, that the defendants had breached their duty of care to the corpo- ration and its shareholders, and awarded $10 million in damages. Defendant Kim appealed, arguing the plaintiffs were not entitled to a jury trial on their shareholder derivative claims and the trial court erred in denying his motion to amend. The Court of Appeals affirmed, as did the Supreme Court. Kim argued that shareholder deriva- tive claims and breach of fiduciary duty claims were tried in equity in 1857, when the Oregon Constitution was drafted, so the essence of the plaintiffs’ claims was equitable and so not triable by jury. But the Supreme Court explained the deter- mination of a party’s right to a civil jury trial under Article I, section 17, of the Oregon Constitution does not depend on whether the “essence” of the case would have been classified as legal or equitable in 1857, or otherwise prior to the elimination of the distinction be- tween law and equity accomplished by the adoption of the Oregon Rules of Civil Procedure. Rather, the correct in- quiry is whether the relief sought is in the nature of a legal claim. The court held that a claim for money damages in a shareholder derivative suit is legal in nature and so is subject to the jury trial right of Article I, section 17. The court also held the exculpation provision on which the defendants sought to rely was an affirmative defense that needed to be pled to be raised, and the trial court acted within its discretion in denying the defendants’ late motion to amend their answer to rely on the exculpation provision given the potential prejudice to the plaintiffs: the fact the defendants did not raise this defense until after the close of the plaintiffs’ evi- dence meant that the plaintiffs had no opportunity to modify their theory of the case or their presentation of evidence based on the defense. A but-for causal connection between a plaintiff ’s claim and a foreign defen- dant’s Oregon activities is not necessary to establish specific personal jurisdic- tion, but the nature and quality of those activities must at least permit a deter- mination that it was reasonably foresee- able that the defendant would be sued in Oregon for the type of claim at issue. Cox v. HP Inc. , 368 Or 477 (2021); Flynn, J. The third-party plaintiff was represented by William Taaffe. An out-of-state company manufac- tured hydrogen generators. It hiredTÜV, another out-of-state company, to certify the design of the generators as compliant See Sheets p 50