The Oregon Supreme Court held in Crandall v. State of Oregon (No. S070647, January 22, 2026) that the Oregon Tort Claims Act’s (OTCA) workers’ compensation immunity provision violates the state constitution’s remedy clause. The 5-2 ruling means contractor employees injured by public entity negligence can now pursue full tort damages, including noneconomic damages that WC does not cover. For Oregon public entities that rely on contractors in construction, firefighting, law enforcement, and health services, a category of GL exposure that was blocked for decades is now open.
What happened
Shirley “Joe” Crandall, a bulldozer operator employed by a private contractor, was severely injured during the 2018 Sugar Pine wildfire near Trail, Oregon. While following directions from Oregon Department of Forestry (ODF) supervisors to navigate a narrow access road in poor visibility, his bulldozer tumbled down a steep canyon. Crandall received WC benefits from his employer, then sued the state and its supervisors for negligence.
The state moved to dismiss under ORS 30.265(6)(a), which granted public bodies and their employees immunity from tort claims when the injured person was covered by workers’ compensation. The Supreme Court struck down that immunity, holding that Article I, Section 10 of the Oregon Constitution (the remedy clause) requires that injured persons retain a substantive right to a remedy. Because WC benefits exclude noneconomic damages entirely, the court found that WC is not a constitutionally adequate substitute for eliminating a common-law negligence right. The employer-employee exclusive remedy remains intact; what changes is the third-party claim path for contractor employees against the public entity that directed or supervised their work.
Who it affects
Oregon public entities that use private contractors for high-hazard operations face the most immediate exposure. The court’s opinion and defense counsel analysis identify four sectors: construction, forest management, private law enforcement and security, and health services. Self-insured cities, counties, state agencies, transit authorities, and special districts that contract out these functions now carry a tort liability they previously did not.
Oregon’s OTCA damages caps remain in effect: $2.6 million per claimant for claims against the state, $879,200 per claimant for local public bodies (amounts for claims arising July 1, 2025 through June 30, 2026). The caps limit per-claim severity but do not limit the number of claims. A public entity running 50 contractor crews on wildfire suppression or highway construction faces a frequency problem that the caps do not solve.
Reserve mechanism
The reserve effect is new claim frequency on public entity GL lines. Contractor worker negligence claims against public entities were not actionable before January 22, 2026. There is no Oregon-specific historical baseline for this claim type, which means existing development factors, expected claim ratios, and case reserve benchmarks all miss it.
Severity enters through noneconomic damages (pain and suffering), which WC does not pay. Even with the OTCA cap, average claim severity for a serious contractor injury will be materially higher than the average WC indemnity claim because the tort claim covers what WC excludes. The expected loss ratio for public entity GL programs in Oregon needs a new claim category with its own frequency and severity assumptions.
From reviewing public entity GL triangles in states that have experienced immunity erosion, the claims typically arrive 18 to 24 months after the ruling, once the plaintiff bar develops the litigation template. The Crandall opinion has been in effect for five months. Public entity risk managers should expect initial filings to surface in late 2027 through early 2028. The Texas appellate ruling that upheld governmental immunity for a county WC pool illustrates the contrasting outcome: where immunity holds, the claim path stays blocked. Oregon has now removed that block.
At least 10 states have constitutional remedy clauses similar to Oregon’s, raising the question of whether parallel challenges to WC-related public entity immunity could succeed in Ohio, Arizona, Washington, and other jurisdictions. Pennsylvania’s pending sovereign immunity waiver for abuse claims shows a legislative version of the same structural shift, where a category of previously barred claims becomes actionable.
What this means for your next review
If your public entity has Oregon operations involving private contractors, put Crandall on the agenda for your next reserve study or July 1 excess liability renewal. Ask your actuary whether a new claim category should be added to your GL reserve analysis for contractor worker tort claims. Request initial indemnity and defense cost assumptions, recognizing that there is no Oregon-specific baseline. Confirm that your TPA’s coding structure can flag state-of-jurisdiction and claimant employment status at the claim level. For entities with excess or reinsurance towers, verify that the new exposure class is within the scope of your current coverage terms.
Sources
- Crandall v. State of Oregon, No. S070647, Oregon Supreme Court (January 22, 2026)
- Miller Nash LLP: Public Bodies Subject to Expanding Liability
- Risk & Insurance: Oregon Supreme Court Strikes Down Immunity
- ORS 30.269: Limitations on Awards Under Oregon Tort Claims Act
- WorkersCompensation.com: Oregon Law Hits Constitution Snag