424 August 26, 2026 No. 797
IN THE COURT OF APPEALS OF THE
STATE OF OREGON
MARION COUNTY,
a political subdivision of the State of Oregon,
Plaintiff-Appellant,
v.
OREGON HEALTH AUTHORITY;
Sejal Hathi, in her official capacity as
Director of the Oregon Health Authority;
and Sara Walker, in her official capacity as
Interim Superintendent of the Oregon State Hospital,
Defendants-Respondents.
Marion County Circuit Court
23CV37155; A185645
Henry Kantor, Senior Judge.
Argued and submitted March 18, 2026.
Steve Elzinga argued the cause and filed the briefs for
appellant.
Patricia G. Rincon, Assistant Attorney General, filed the
brief for respondent. Also on the brief were Dan Rayfield,
Attorney General, and Benjamin Gutman, Deputy Attorney
General.
Before Tookey, Presiding Judge, Jacquot, Judge, and
Kistler, Senior Judge.
TOOKEY, P. J.
Reversed and remanded.
Cite as 352 Or App 424 (2026) 425
426 Marion County v. Oregon Health Authority
TOOKEY, P. J.
Plaintiff Marion County appeals a judgment dismissing with prejudice its complaint seeking declaratory
relief under ORS 28.020. In sum and substance, among
other points, Marion County asserted that defendant
Oregon Health Authority (OHA) has incorrectly interpreted
the definition of “hospital level of care” as set forth in ORS 161.355(3) to allow it to prematurely cease providing medical
care to certain individuals.1 And more specifically, Marion
County asserted that, as a result of OHA’s misinterpretation
of “hospital level of care,” Marion County has been burdened
with the cost of providing medical care for those individuals
whom OHA has inappropriately stopped treating. The trial
court dismissed Marion County’s complaint, determining
that Marion County lacked standing. For the reasons that
follow, we reverse and remand.
STANDARD OF REVIEW
“Whether a plaintiff has standing to bring a declaratory judgment action is a legal question, which we review
for legal error.” Oregon Restaurant and Lodging Assn. v. City
of Bend, 313 Or App 772, 777, 497 P3d 306 (2021). Where,
as here, the trial court considered evidence outside the
pleadings, we “assume the truth of the facts alleged in the
complaint to the extent they are not contradicted by additional facts in or outside of the record.” Nordbye v. BRCP/
GM Ellington, 271 Or App 168, 174, 349 P3d 639 (2015). We
state the facts in accordance with that standard.
BACKGROUND
Marion County operates a Community Mental
Health Program pursuant to ORS 430.620. One of the functions that Marion County performs in that capacity is the
provision of “community restoration services” to certain
individuals charged with crimes who are not fit to proceed.2
1
Marion County’s operative complaint names OHA, the director of OHA, and the superintendent of the Oregon State Hospital—which the complaint alleges is a part of OHA—as defendants. Because distinguishing between the defendants in this case is unnecessary to resolve the issue on appeal, we refer to them collectively and individually in this opinion as OHA.
2
An individual who lacks the fitness to proceed “may not be criminally prosecuted.” State v. Givens, 321 Or App 689, 695, 517 P3d 1021 (2022), rev den, 370 Cite as 352 Or App 424 (2026) 427
“Community restoration services” are defined by statute as
“services and treatment necessary to safely allow a defendant to gain or regain fitness to proceed in the community.”
ORS 161.355(2). Rules adopted by OHA set forth certain
“responsibilities during community restoration” for community mental health programs, such as the program operated
by Marion County. OAR 309-088-0146.
Certain other individuals who are not fit to proceed
are committed to the custody of OHA. See ORS 161.370
(governing criminal proceedings upon a determination of
unfitness and providing for, among other things, community
restoration services or commitment to a state hospital). A prerequisite for such commitment is that the individual needs a
“hospital level of care,” which is a phrase that is defined by statute to mean “the type of care provided by an inpatient
hospital in order to gain or regain fitness to proceed.”3 ORS
161.370(3)(a)(A), (4)(a)(B); ORS 161.355(3). Rules adopted by
OHA also set forth certain “responsibilities during commitment” for community mental health programs, such as the
program operated by Marion County, in connection with
individuals who are committed to OHA because they need a
“hospital level of care.” OAR 309-088-0130.
Once an individual is committed to OHA, if OHA
“determines that a hospital level of care is no longer necessary,” the superintendent of OHA “may file notice of [that]
determination with the court.” ORS 161.371(3)(a). After such
a notice is filed with the court, the court must order that a
community mental health program director (or the director’s
designee) “[c]onsult with the defendant and with any local
entity that would be responsible for providing community
Or 694 (2022); see also ORS 161.360(2) (setting forth circumstances under which a court may determine a defendant to be unfit to proceed).
3
Whether a defendant meets the criteria for commitment to OHA to receive “hospital level of care” depends on whether the person is charged with a felony or a misdemeanor. When “the most serious offense in the charging instrument is a felony,” the determination that an individual needs a “hospital level of care” is based on either “[1] public safety concerns if the defendant is not hospitalized or in custody or [2] the acuity of symptoms of the defendant’s qualifying mental disorder.” ORS 161.370(3)(a)(A). In contrast, when “the most serious offense in the charging instrument is a misdemeanor,” the determination that an individual needs a “hospital level of care” must be based on “the acuity of symptoms of the defendant’s qualifying mental disorder.” ORS 161.370(4)(a)(B)(i). 428 Marion County v. Oregon Health Authority
restoration services, if the defendant were to be released
in the community, to determine whether community restoration services are present and available in the community”
and provide the “court and the parties with a report with
recommendations from the consultation.” ORS 161.371(3)(a)
(A), (C). If a community placement is available and appropriate, no party objects to the placement option, and the
community health program director “secure[s] a placement
for defendant and obtain[s] an anticipated availability date
for the placement,” the court “hold[s] a hearing * * * to confirm the placement and set any conditions of release.” ORS
161.371(5).
This dispute arises out of, among other issues,
OHA’s interpretation of the phrase “hospital level of care,”
as defined by ORS 161.355(3). As we understand the parties’
positions, OHA believes that that phrase refers to “inpatient” care only and that when inpatient care is no longer
necessary, a defendant may be discharged to receive community restoration services if further treatment is necessary.
In that regard, we observe the statutory scheme concerning defendants who are not fit to proceed recognizes that
defendants who are not fit to proceed “should be served in
the least restrictive and most integrated environment that
is clinically indicated.” See OAR 309-088-0105(1) (so noting
regarding ORS 161.365 through ORS 161.370).
Marion County has a different understanding of
the phrase “hospital level of care” than OHA. In Marion
County’s view, “hospital level of care” can include “outpatient” care. Marion County’s operative complaint alleged
that, as a result of OHA’s misinterpretation of the phrase
“hospital level of care”—along with OHA’s misinterpretation
of other statutes—Marion County has been “bear[ing] significant burdens of providing restorative services for individuals requiring a hospital level of care.” That is, Marion County alleged in its operative complaint, in essence, that OHA has
been failing to provide medical care to certain defendants as
a result of its misinterpretation of the phrase “hospital level of care” and that the result has been Marion County providing (and bearing the cost of) such care. Or put more bluntly,
in Marion County’s view, once OHA stops providing care,
Cite as 352 Or App 424 (2026) 429
“counties must start taking action and pick up the slack,”
which has “obvious financial impacts” on counties.
As noted, Marion County’s operative complaint
sought declaratory relief under ORS 28.020. OHA moved to
dismiss pursuant to ORCP 21, and the trial court granted
that motion, concluding that Marion County lacked standing under ORS 28.020 to bring its claim for declaratory
relief. Marion County appealed and, in a single assignment
of error, argues that the trial court erred in concluding that it lacks standing.4
ANALYSIS
The term “standing,” as relevant here, “means the
right to obtain an adjudication.” Eckles v. State of Oregon,
306 Or 380, 383, 760 P2d 846 (1988), appeal dismissed, 490
US 1032 (1989) (discussing ways the legal term “standing”
is used). Whether a plaintiff has standing “largely depends
on the statute under which the plaintiff seeks relief.” MT &
M Gaming, Inc. v. City of Portland, 360 Or 544, 553, 383 P3d
800 (2016).
Here, Marion County seeks relief under the Uniform
Declaratory Judgments Act. The relevant statute, ORS
28.020, provides:
“Any person interested under a deed, will, written contract or other writing constituting a contract, or whose
rights, status or other legal relations are affected by a constitution, statute, municipal charter, ordinance, contract
or franchise may have determined any question of construction or validity arising under any such instrument,
4
We note that Marion County’s claim for relief requested
“[e]ntry of a judgment declaring that, under ORS 179.360, ORS 161.370, and
ORS 161.371, and related statutes, defendants have a non-discretionary obligation to admit individuals committed to the custody of the superintendent
to [Oregon State Hospital] on an inpatient basis (or, in the alternative, on an
outpatient basis) and provide them restoration services until (1) the superintendent of [Oregon State Hospital] certifies that a hospital level of care is
no longer necessary and the committing court finds that they are fit to stand
trial, or (2) those individuals reach the maximum period of restoration under
ORS 161.371.”
We also note that, in addition to allegations concerning OHA’s discharge decisions, Marion County’s complaint raised certain contentions concerning OHA’s admission of individuals. For our analysis in this opinion, however, it is sufficient to consider Marion County’s allegations concerning OHA’s discharge decisions. 430 Marion County v. Oregon Health Authority
constitution, statute, municipal charter, ordinance, contract or franchise and obtain a declaration of rights, status
or other legal relations thereunder.”
To establish standing under that statute, there are
“three showings that must be made by a plaintiff.” Foote v.
State of Oregon, 364 Or 558, 562-63, 437 P3d 221 (2019).
Specifically, “(1) there must be some injury or impact to a
legally recognized interest beyond an abstract interest in
the correct application or the validity of a law; (2) the injury or impact must be probable, not speculative; and (3) the
court’s decision must have a practical effect on plaintiffs’
rights.” Albrecht v. Emmert, 327 Or App 465, 473, 535 P3d
785 (2023). In evaluating whether plaintiff has made those
showings, “certainty” is not required. Jewell School Dist. v.
KC, 349 Or App 657, 664, ___ P3d ___ (2026).
Here, concerning the first requirement—injury or
impact to a legally recognized interest—Marion County has
a financial interest in the “correct application” of the phrase “hospital level of care” by OHA. That financial interest is
“sufficient” to satisfy the first requirement for standing
under ORS 28.020.5 See Eckles, 306 Or at 385 (“The interest perhaps most often recognized as sufficient for standing under ORS 28.020 is a present or foreseeable financial
interest[.]”); Thorin Properties v. City of Eugene, 334 Or App 570, 572-73, 557 P3d 531 (2024), rev den, 373 Or 282 (2025)
(“financial impact” is a “legally recognized interest”).
OHA contends otherwise. It acknowledges that
Marion County has alleged financial harms, but it argues
that those harms are insufficient because Marion County’s
financial interest “is not legally recognized by the statutes
at issue in the declaratory judgment action.” That is so, in
OHA’s view, because “those statutes are directed at [OHA]
and [its] obligation to provide restoration services to individuals in need of those services” and under those statutes
5
Marion County’s legally recognized interest arising as a result of the allegations in this case is one reason why this case differs from our recent decision in Porter v. Lane County, 352 Or App 265, ___ P3d ___ (August 19, 2026), in which we concluded that a “controversy [was] merely hypothetical” where plaintiff’s “complaint alleged only that during discussions with the county about his building, he was ‘advised’ that the additional construction would not be allowed,” and he “never applied for a permit to allow for the additional construction.” Id. at 266, 268. Cite as 352 Or App 424 (2026) 431
“counties have no obligation to provide any services.” Thus,
as OHA sees it, Marion County “has not shown that it has
anything more than a general or abstract interest in the
correct application of the statutes on which it sought a
declaration.”
We disagree that Marion County has only a “general
or abstract interest” as OHA contends. As an initial matter,
it may be the case, as we understand OHA to argue, that
Marion County could refrain from operating a community
mental health program and not suffer the particular financial injury that it alleges. After all, under Oregon’s statutory scheme, operating community mental health programs
appears to be a permissive activity for counties, not a mandatory one. See ORS 430.620(1) (“The county court or board
of county commissioners * * * may * * * establish and operate * * * a community mental health program.” (Emphasis
added.)).
But, as it stands, Marion County does run such a
program, and Marion County has adequately alleged that its
present financial interests are harmed by OHA’s interpretation of the phrase “hospital level of care.” We are aware of
no authority standing for the proposition that a party lacks
standing to seek a declaratory judgment because they could
cease running a program that they are legally authorized to
run. And such a rule would be particularly inappropriate to
apply in this context, because it is the express policy of the State of Oregon to “encourage, aid and financially assist” its “county governments in the establishment and development
of community mental health programs.” ORS 430.610(4).
Moreover, counties that operate community mental
health programs such as Marion County—which, again, is a
function the legislature has expressly encouraged counties
to engage in—far from being strangers to Oregon’s scheme
to assist criminal defendants in regaining fitness to proceed, as OHA’s argument suggests, play an integral role in
that process. See, e.g., ORS 161.370(6)(a) (“If the court does not order the commitment of the defendant * * *, if commitment is precluded * * * or if the court determines that care
other than commitment would better serve the defendant
and the community, the court shall release the defendant,
432 Marion County v. Oregon Health Authority
pursuant to an order that the defendant engage in community restoration services, until the defendant has gained or
regained fitness to proceed * * *.”); see also ORS 430.021(2)
(a) (directing OHA to integrate community mental health
programs with “the state mental health program”).
Reflective of the integral nature of community mental health programs to Oregon’s scheme for assisting individuals who are not fit to proceed, are OHA’s own rules,
which exist, in part, to encourage “collaboration” between
OHA and community mental health programs. See OAR
309-088-0105(2) (“These rules establish the standards
for consultations and other required reports to occur and
encourages collaboration between the Court, the Authority,
State Hospital, [and] Community Mental Health Program
* * * .”). And those rules specifically recognize the role such community mental health programs play. See OAR 309-088-0146(2) (“When the Court has ordered that a defendant participate in Community Restoration, the [community mental
health program] from the county responsible for attempting
to restore a defendant’s Fitness to Proceed must individually assess what services are necessary to allow the defendant to gain or regain Fitness to Proceed.”).
In sum, given our standard of review and the current stage of the proceedings, Marion County has asserted
an “injury or impact to a legally recognized interest beyond
an abstract interest in the correct application or the validity of a law.” Albrecht, 327 Or App at 473.
As for the second requirement for standing, we conclude that the financial interest identified by Marion County
is “real or probable, not hypothetical or speculative.” MT &
M Gaming, Inc., 360 Or at 554. As described previously,
Marion County contends that OHA does not provide care to
certain individuals as a result of OHA’s misinterpretation of
the phrase “hospital level of care” and that that has present
downstream financial impacts on Marion County, because
Marion County must then “pick up the slack” in providing care to those individuals. That is sufficient to show the
financial impact on Marion County is “real or probable.”
See Oregon Restaurant and Lodging Assn., 313 Or App at
778-79 (allegation by businesses “that depend on patronage
Cite as 352 Or App 424 (2026) 433
in Bend” that a “reduction in funds for tourism promotion
[in Bend] would have concrete and plausible fiscal ramifications” sufficiently alleged an “injury or impact [that] is real or probable, and not hypothetical or speculative”).
OHA argues otherwise, contending, among other
points, that “any dispute about what type of care defendants
are required to provide is entirely hypothetical” because
“defendants do not believe that ‘hospital level of care’ includes outpatient care.” To the extent we understand OHA’s argument, we are not persuaded by the argument, because the
meaning of “hospital level of care” in the Oregon Revised
Statutes as a legal matter is precisely the issue that Marion
County seeks to have determined in this declaratory judgment action.
Finally, concerning the third requirement for standing—i.e., that “the court’s decision must have a practical
effect on plaintiffs’ rights,” Albrecht, 327 Or App at 473—we
conclude that that requirement has also been met. As set
forth above, when OHA determines that an individual committed to its care no longer needs a “hospital level of care,” it can file a notice of that determination with the court and
the entity responsible for restoring the individual’s fitness to proceed can be changed from OHA to a community mental
health program, such as that operated by Marion County.
ORS 161.371(3)(a) (if OHA determines “that a hospital level
of care is no longer necessary,” OHA “may file notice of the
determination with the court”). Consequently, if the term
“hospital level of care” encompasses a broader swath of care
than OHA currently understands it to—i.e., if “hospital level
of care” encompasses outpatient care as well as inpatient
care—the range of individuals OHA is required to provide
services to before discharge is expanded and the number of
individuals that community mental health programs (such
as that operated by Marion County) need to provide services
to is reduced. Or, at the very least, that is a “reasonable
inference” that can be drawn, which is all that is necessary
at this stage of the proceedings. Jewell School Dist., 349 Or
App at 665 (noting “pleadings need only bear the reasonable
inference that a decision by the court will in some sense rectify the injury” (internal quotation marks omitted)).
434 Marion County v. Oregon Health Authority
OHA argues otherwise regarding the third requirement for standing under ORS 28.020, contending “the declaration sought in this case would not have any practical
effect as to Marion County” because of “undisputed capacity
issues” to serve individuals at OHA and a particular federal order, which OHA refers to as “the Mink order.”6 That
order, according to OHA, “places strict limits on who may
be admitted to [Oregon State Hospital] and how long they
remain there,” with the “durational limits” for restorative
services under the Mink order being shorter than those
allowed by state law. See ORS 161.371(8)(a) (setting forth
maximum periods of commitment to OHA for individuals
committed under ORS 161.370).
As a general matter, we see nothing in the Mink
order that would prevent OHA from providing outpatient
care, at least if such care is provided by OHA within the
durational limits for OHA providing restorative care under
the Mink order. And, indeed, at oral argument, OHA’s
counsel was unable to identify where in the United States
District Court’s orders OHA providing outpatient treatment
is prohibited.7
Regarding OHA’s “capacity issues,” OHA has not
explained, and we do not understand, how those issues
6
The order referred to by OHA as the Mink order is a July 3, 2023, order issued by the United States District Court for the District of Oregon in Disability Rights Oregon v. Allen, Case No. 3:02-cv-00339-MO.
7
To be sure, after entry of the Mink order, the United States District Court for the District of Oregon concluded that an order by the Marion County Circuit Court requiring OHA to provide outpatient treatment to a criminal defendant violated the Supremacy Clause of the United States Constitution, but that was because that particular order “require[d OHA] to provide the criminal defendant with restoration services that exceed the * * * maximum duration” that OHA could provide restoration services under the Mink order. Disability Rights Oregon v. Baden, 3:02-CV-00339-MO, 2024 WL 964243, at *1 (D Or Mar 6, 2024) (emphasis added). It does not follow from that order concerning the Supremacy Clause—and the trial court could not find on this record—that there never will be times that outpatient treatment would be clinically indicated for a criminal defendant who was within the “maximum duration” that OHA could provide “restoration services” under the Mink order.
Further, we note that, during the pendency of this appeal—on June 1, 2026— the United States District Court for the District of Oregon entered an opinion and order in the Mink litigation providing for “additional remedial measures.” Disability Rights Oregon v. Hathi, 3:02-CV-00339-AN, 2026 WL 1536809, at *3 (D Or June 1, 2026). OHA has not argued that that opinion and order has any bearing on our analysis of the issue on appeal.
Cite as 352 Or App 424 (2026) 435
would prevent OHA from providing outpatient treatment to
an individual who was previously treated on an inpatient
basis at OHA but for whom outpatient services are clinically
indicated. At least at this stage of the proceeding and on
this record, those “capacity issues” at OHA do not persuade
us that Marion County lacks standing.
CONCLUSION
For the reasons above, we conclude that the trial
court erred when it determined that Marion County lacked
standing to pursue its declaratory judgment claim. We
reverse and remand for further proceedings.
Reversed and remanded.