This section contains the nature of the case and procedural background.

Clarke (P) was born in February 1998 with a congenital heart defect. He was admitted to OHSU (D) in May 1998 for the surgical repair of that condition. Following surgery, P was placed in a surgical intensive care unit. P suffered prolonged oxygen deprivation causing him permanent brain damage. P's brain damage was a result of the negligence of D and certain of its employees and agents. Plaintiff is permanently disabled. His expenses for total life and health care will amount to $11,073,506, the loss of his future earning capacity is $1,200,000, and his noneconomic damages are $5,000,000. P sued D and the individuals who treated him. Those individuals moved to substitute D as the sole defendant in the action. The trial court granted the motion, and P filed a second amended complaint naming only D as defendant. D admitted that it was negligent and that its negligence resulted in permanent injury to P. D also admitted that 'plaintiff sustained economic and noneconomic damages in excess of the monetary limitations of the Oregon Tort Claims Act as a result of the injuries caused by the negligence of OHSU.' D moved for judgment on the pleadings pursuant to ORCP 21 B, contending that the trial court should enter judgment in favor of P and against D in the amount of $200,000, D's maximum liability under ORS 30.270(1). The trial court granted D's motion. P appealed. The Court of Appeals rejected P's constitutional argument against D because, it concluded, D would have been immune from liability at common law. The Court of Appeals accepted P's constitutional argument with respect to the substitution of D as the sole defendant under ORS 30.265(1). The court reversed the trial court's judgment and remanded with instructions to reinstate the claims against the individual defendants. This appeal resulted.

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