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Deciphering the federal contempt order against Oregon health officials

Hefty fines and a beefed-up state watchdog will add to existing pressure over constitutional violations, but some are worried that other issues won’t be addressed
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Oregon State Hospital in Salem. | BEN BOTKIN/THE LUND REPORT
June 10, 2025

A federal judge’s decision to fine and rebuke state health officials for contempt of court over the holding of mentally ill people in Oregon jails will add to pressure to improve how the state psychiatric institution, the Oregon State Hospital, operates. It also will further spotlight the state’s behavioral health crisis.

But while some of those involved in the long-running court case celebrated the outcome — with Disability Rights Oregon calling it a “major victory” — others are less sure it will lead to the best possible outcomes for Oregonians experiencing mental illness and others.

The state hospital is a crucial linchpin at the intersection of the state’s criminal justice system and health care agencies. It has undergone a significant transformation over the years, going from serving people a judge had civilly committed to the state’s custody to becoming almost overwhelmingly dedicated to housing criminal defendants deemed unable to “aid and assist” in their defense.

Chris Bouneff of the Oregon chapter of the National Alliance on Mental Illness said the ruling will further state officials’ focus on spending to improve the capacity of the “restoration” system set up to help defendants be deemed competent enough to stand trial and, in many cases, sent to prison.

But he said the restoration process doesn’t stem the criminalization of mental illness, and that spending could come at the expense of Oregon’s capacity to treat underlying mental illnesses for a broader swath of the population — so that people get help earlier, without having to be charged with a crime.

“I am tired of answering resource helpline calls and telling families you have two choices,” he said. “‘You can just continue to watch your loved one deteriorate, or you can call police and have them arrested — because there's probably no way that, absent violent crime, anybody's going to intervene’ ... It's just frustrating because we're doing things (that address one group) to the exclusion of everything else. And what you want to see are things happening simultaneously.”  

A different longtime observer of the case, speaking on condition of anonymity, said the ruling amounted to mild progress, calling it “status quo with fines.”

What follows is an effort to make sense of the ruling and its ramifications through interviews and a review of court documents.
 

What just happened?

On Friday, U.S. District Judge Adrienne Nelson slapped the state of Oregon with a contempt order that comes with fines of $500 a day for each person experiencing mental illness who spends more than a week in jail after a finding that they are not competent to stand trial. She also elevated Debra Pinals, an outside expert who’s long been involved with the case, to become a “court monitor,” hiring staff to watchdog operations of the Oregon State Hospital on behalf of the monitor and, indirectly, the judge.
 

What’s at stake?

The state of Oregon has long ranked among the worst states for reported mental health care outcomes and access in some surveys, despite typically ranking near the middle of the pack among states in per-capita spending.

Among the questions swirling around this court case: whether the state’s fragmented system — which many say is not really a “system,” or at least one that works well —  is serving the people in the most need of care in the best ways possible.
 

Who won? Who lost?

Everyone and no one. The advocacy group Disability Rights Oregon, known as DRO, and the nonprofit Multnomah Public Defenders seemed to bring the contempt order only reluctantly, long after they had ample justification to do so. They did so after Nelson in a public hearing made it clear something needed to change — and quickly — to address the longstanding constitutional violations in Oregon, and she said she didn’t need an outside motion from DRO to find the state in contempt.

DRO’s ally in the motion, the public defenders, even argued against any fines at first, saying fines in a similar case in Washington sought by DRO’s sister organization there had not led to success.

In a statement, DRO called the order a “major victory” on behalf of its clients, meaning the defendants found unable to aid and assist in their own defense. The group noted that the judge ordered operational changes at the Oregon State Hospital and elsewhere in the state’s system for the “aid and assist” population — changes that essentially echoed what Pinals had already recommended.

Arguably the other victors in the case include several Oregon hospitals, several district attorneys, Marion County and a group of state judges, who all filed “friend of the court” briefs that to varying degrees tacitly or explicitly supported a contempt finding. The hospitals and prosecutors had sought stiffer penalties in the hope of forcing more investment in the state’s behavioral health system, citing effects on public safety and on hospitals of the status quo.

But while they won, those groups also lost — in that the judge criticized the outside voices, without any specifics, and blocked them from filing motions in the future without permission in advance. Moreover, Nelson rejected the stiffer penalties proposed by hospitals and supported by prosecutors.

The state of Oregon lost, as it had argued against any fines, saying state officials were doing the best they could with limited funds and with little control over the fragmented system. But officials also gained a victory of sorts. The judge in effect adopted per-day fines that were significantly lower than those in the equivalent order issued in Washington state in 2016.

Oregon Health Authority Deputy Director Dave Baden wrote in an all-staff email Tuesday that the penalties are projected to cost $7 million a year in fines, not including the costs of funding new staffing for the court monitor.

“The hospital has been moving closer to compliance,” he wrote, “with the average wait time in June being 11 days. As of Monday morning, there were 35 people under aid-and-assist orders waiting for admission.”
 

So what is the impact?

The judge’s order requires frequent updates from the court monitor, Pinals, while ordering an audit of state spending on the system.

But it does little to change how the state hospital is being operated under federal court oversight.

Hospitals, state judges and prosecutors had criticized an earlier federal court order as making things worse, one that makes room for new admissions in the state hospital by setting discharge deadlines —regardless of whether the people discharged are deemed competent or able to stand trial.

State judges said the order intended to lower wait times in jail had created a revolving door and increased recidivism, echoing some county behavioral health staff who said the increased strain of cycling the same people through the system over and over again had increased safety threats and was burning out workers.
 

What’s next?

Now, as state lawmakers near the end of the legislative session, several bills are pending in the Legislature intending to boost behavioral health capacity — a major goal of a separate lawsuit filed by the hospitals — and affect state hospital oversight.

Meanwhile, lawmakers continue to wrestle with an ever-tighter budget situation  amid potential federal cuts — meaning that many decisions will be left for a special session this summer, if not multiple special sessions over the course of this year.

In a briefing Monday, Gov. Tina Kotek said “We have a suite of things we are working on. I have support from legislative leaders to fund it. It is frustrating to me that we weren’t given until the end of the session to deal with that, but this is the situation we have so we’re going to do the best that we can”

Bouneff told The Lund Report that “if the Legislature acts boldly” to develop capacity, the state has a “fighting chance” to preserve lower-cost treatment and interrupt spiraling mental illness. But, he added, the prospect of that happening in light of the budget situation is “uncertain at best.”

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