Title: Norden v. Water Resources Dept.

State: oregon

Issuer: Oregon Supreme Court

Document:

FILED:  February 17, 2000
IN THE SUPREME COURT OF THE STATE OF OREGON

DOROTHY NORDEN,
		Petitioner on Review,
	v.
STATE OF OREGON, acting by and through its
WATER RESOURCES DEPARTMENT; and
TONY JUSTUS, Umatilla County Watermaster,
	Respondents on Review,
        and 
UMATILLA COUNTY, a political subdivision
of the State of Oregon,
Defendant.
(SC CV95-0002; CA A93331; SC S46182)

	On review from the Court of Appeals.*
	Argued and submitted October 14, 1999.
	George W. Kelly, Eugene, argued the cause and filed the
brief for petitioner on review.
	Richard D. Wasserman, Assistant Attorney General, Salem,
argued the cause and filed the brief for respondents on review. 
With him on the brief were Hardy Myers, Attorney General, and
Virginia L. Linder, Solicitor General.
	Before Carson, Chief Justice, and Gillette, Van Hoomissen,
Durham, Leeson, and Riggs Justices.**  
	LEESON, J.
	The decision of the Court of Appeals is affirmed.  The
judgment of the circuit court is reversed.  The order of the
Water Resources Department is affirmed.  
	*Appeal from Umatilla County Circuit Court.	158 Or App 127, 973 P2d 910 (1999).
	**Kulongoski, J., did not participate in the consideration
or decision of this case.
		LEESON, J.
		The issue in this case is the scope of the record on
judicial review of an order in other than a contested case under
Oregon's Administrative Procedures Act (APA), ORS 183.310 to
183.550.  On judicial review under ORS 183.484, the circuit court
took evidence both of what the agency knew at the time when it
issued its order as well as evidence that the agency and
petitioner had obtained after the agency issued its order.  The
court then made findings on that record and entered judgment in
favor of petitioner.  On appeal, the Court of Appeals held that
the scope of the record that the circuit court had developed was
correct under ORS 183.484, but that the circuit court had erred
in setting aside the agency's order on the ground that it was not
supported by substantial evidence in the record.  Norden v. Water
Resources Dept., 158 Or App 127, 135-38, 973 P2d 910 (1999).  We
allowed review and affirm the decision of the Court of Appeals.
		We begin with some background.  Under the APA, agencies
may issue orders in contested cases and orders in other than
contested cases.  See Oregon Env. Council v. Oregon State Bd. of
Ed., 307 Or 30, 36-37, 761 P2d 1322 (1988) (explaining process). 
In either context, an order is "any agency action expressed
orally or in writing directed to a named person or named persons
* * *."  ORS 183.310(5).  In contested case proceedings, "the
agency must base its decision [or action] on a record of evidence
that the contesting parties have an opportunity to develop, it
must confine its decision to the evidence so developed, and it
must explain how its decision complies with the law and is
supported by the facts."  Oregon Env. Council, 307 Or at 37; ORS
183.415 to ORS 183.470.  Orders in contested cases are subject to
review by the Court of Appeals, ORS 183.482, and that court
reviews for legal error, abuse of agency discretion, and lack of
substantial evidence in the record.  ORS 183.482(8).  Judicial
review of orders in contested cases is confined to the record
made in the hearing before the agency.  ORS 183.482(7); Oregon
Env. Council, 307 Or at 37.
		This case involves judicial review of an order in other
than a contested case proceeding, specifically, an order that the
Water Resources Department (department) issued in November 1994,
informing petitioner that she is not entitled to divert water
from a spring that arises on her property without first obtaining
a water right permit. (1)  The order was in the form of a letter
from Justus, a watermaster for the department.
		Petitioner sought review of the order in the Umatilla
County Circuit Court.  ORS 183.484.  As noted, the circuit court
conducted a hearing at which the parties presented evidence both
about the information that Justus had before him when he issued
the order as well as evidence that the department and petitioner
had obtained after Justus issued the order.  Based on all the
evidence, the circuit court found that there was not substantial
evidence from which a reasonable person could conclude that the
water arising from the spring on petitioner's property would flow
off petitioner's property and into a nearby creek if petitioner
did not divert it.  The circuit court therefore entered a
judgment reversing the order of the department.  The judgment
declared that petitioner had the right to use the water without
first obtaining a water right permit.  See ORS 183.486(1) 
(circuit court decision "may be mandatory, prohibitory, or
declaratory in form and it shall provide whatever relief is
appropriate irrespective of the original form of the petition"). 
The department appealed the judgment to the Court of Appeals. (2) 
ORS 183.500.
		Before the Court of Appeals, the department argued
that, because Justus had issued an order in other than a
contested case proceeding, the record on judicial review
consisted of both the information on which Justus had relied in
issuing the order and the evidence that the parties had developed
after that time.  Petitioner argued that the record on judicial
review should be confined to the information that Justus had
before him when he issued the order. 
		The Court of Appeals construed ORS 183.484 and agreed
with the department.  It reasoned that the legislature's intent
regarding the scope of the record on judicial review in other
than a contested case can be discerned by comparing the record-making process in a contested case with that in other than a
contested case.  The court concluded that
	"the evident purpose of requiring petitions for
judicial review of orders in other than contested cases
to be heard by circuit courts -- as opposed to
appellate courts -- is to enable the circuit courts to
develop an evidentiary record against which to evaluate
the agency's decision."
Norden, 158 Or at 135.
	Before this court, the first question is whether the
Court of Appeals erred in holding that the record on judicial
review in other than a contested case hearing is not limited to
the information that the agency had before it when it issued its
order.  To answer that question, we must construe ORS 183.484. (3) 
In determining the scope of the record on judicial review of an
order in other than a contested case proceeding, we seek to
determine the intent of the legislature.  We are guided by the
familiar methodology summarized in PGE v. Bureau of Labor and
Industries, 317 Or 606, 610-12, 859 P2d 1143 (1993).  At the
first level of analysis, we examine the text and context of the
statute, giving words of common usage their plain, natural, and
ordinary meaning.  Id. at 611.  Words that have a well-defined
legal meaning are given that meaning.  Stull v. Hoke, 326 Or 72,
78, 948 P2d 722 (1997).  Context includes other provisions of the
same statute and other related statutes.  PGE, 317 Or at 611. 
Case law interpreting the statute also is considered at the first
level of analysis.  State v. Toevs, 327 Or 525, 532, 964 P2d 1007
(1998).  If the intent of the legislature is clear at the first
level of analysis, our inquiry is at an end.  PGE, 317 Or at 611. 
	ORS 183.484 confers jurisdiction for judicial review of
orders in other than a contested case on the Circuit Court for
Marion County and the county in which the petitioner resides or
has a principal business.  ORS 183.484(1).  A party seeking
judicial review must file a petition for judicial review within a
specified time, ORS 183.484(2), and the petition shall state,
among other things, "the ground or grounds upon which the
petitioner contends the order should be reversed or remanded." 
ORS 183.484(3).  The circuit court may "affirm, reverse or
remand" the agency's order, and, if it finds that the agency
erroneously has interpreted a provision of law, then it must set
aside or modify the order or remand the case to the agency for
further action under a correct interpretation of the provision of
law.  ORS 183.484(4)(a).  ORS 183.484 also provides:
		"(4)(c)  The court shall set aside or remand the
order if it finds that the order is not supported by
substantial evidence in the record.  Substantial
evidence exists to support a finding of fact when the
record, viewed as a whole, would permit a reasonable
person to make that finding.
		"(5)  In the case of reversal the court shall make
special findings of fact based upon the evidence in the
record and conclusions of law indicating clearly all
aspects in which the agency's order is erroneous."
(Emphasis added.)
	ORS 183.484 contains several references to the "record"
on judicial review and requires the circuit court to make 
"findings of fact" if it reverses the agency.  Although the
statute does not define it, the word "record" has a well
understood legal meaning, namely, "a report of something that
occurred that is memorialized or kept track of, whether by print
or electronic means."  State v. K.P., 324 Or 1, 8, 921 P2d 380
(1996).  The legal meaning of the phrase "finding of fact" also
is well established:  "Determinations from the evidence of a
case, either by court or an administrative agency, concerning
facts averred by one party and denied by another."  Black's Law
Dictionary, 632 (6th ed 1990); accord Maeder Steel Products Co.
v. Zanello, 109 Or 562, 570, 220 P 155 (1924).
	Although ORS 183.484 contemplates a record for review
in all circumstances, and findings of fact based on that record
when the circuit court reverses the agency, nothing in the APA
directs an agency in other than a contested case proceeding to
make a record or to make findings of fact before issuing its
order.  See Oregon Env. Council, 307 Or at 37 (APA says little
about "that large body of agency actions" that are orders in
other than contested cases).  Circuit courts are record-making,
fact-finding courts.  We conclude that the reference in ORS
183.484 to the "record" is to the record that is made before the
circuit court and that the reference to "findings of fact" in ORS
183.484(5) is to the findings that the circuit court makes based
on the evidence in that record when it reverses the agency. 
	The absence of a requirement that the agency in other
than a contested case proceeding make a record or findings of
fact before issuing its order means that the first opportunity
that a party might have to present evidence is before the circuit
court. (4)  Although the text of ORS 183.484 is not explicit
regarding the scope of the record on review, the text suggests
that the legislature did not intend to limit the scope of the
record on judicial review only to the evidence that the agency
had before it when it issued its order. 
	ORS 183.484(4) provides additional support for that
conclusion.  As noted, judicial review of an order in other than
a contested case includes review for substantial evidence in the
record "as a whole."  ORS 183.484(4)(c).  This court has held
that review for substantial evidence in the record as a whole
under the APA requires a court to consider all the evidence in
the record.  Younger v. City of Portland, 305 Or 346, 356, 752
P2d 262 (1988).  "Whole record" review means consideration of
whatever evidence the record may contain that would detract from
as well as support the agency's order.  Id. at 354 (citing
Universal Camera Corp. v. Labor Bd., 340 US 474, 71 S Ct 456, 95
L Ed 456 (1951)).  In other than a contested case proceeding, the
first opportunity that a party might have to make a record of the
evidence that would detract from an agency's order is on judicial
review.  Limiting the scope of the record to the evidence that
was available to the agency when it issued its order would
undermine the "whole record" review required by ORS  183.484(4)(c). 
	The context of ORS 183.484, describing the process for
contested cases, also is instructive regarding the legislature's
intent.  ORS 183.415(1) provides that, in a contested case, all
parties "shall be afforded an opportunity for hearing after
reasonable notice * * *" and that the record developed at the
hearing must reflect "a full and fair inquiry into the facts
necessary for consideration of all issues properly before the
presiding officer in the case."  ORS 183.415(10).  ORS
183.415(11) and (12) identify what the record in a contested case
"shall include," such as pleadings, motions, intermediate
rulings, evidence received or considered, questions and offers of
proof, objections and rulings thereon, proposed findings, and a
verbatim record of all motions, rulings and testimony.  A final
order that is issued after a contested case hearing "shall be
accompanied by findings of fact and conclusions of law."  ORS
183.470(2).  
	Those statutes reveal that, in a contested case, the
legislature has imposed on agencies the requirement of trial-like
proceedings that culminate in a record, findings of fact, and
conclusions of law that must accompany the agency's final order.
Judicial review of an order in a contested case is conferred on
the Court of Appeals, and its review is "confined to the record"
that was made before the agency.  ORS 183.482(7).  See ORS
183.482(5) (Court of Appeals may order agency to take additional
evidence under specified circumstances).  ORS 183.482(8)(c), like
ORS 183.484(4)(c), provides for review for substantial evidence
of the whole record.  In the contested case context, the agency
has made the record by the time that judicial review occurs.  In
other than contested case proceedings, there may be no record to
review, or only so much record as support's the agency's order,
until a record is made before the circuit court.  We find no
suggestion in the APA that the legislature intended the record in
other than a contested case proceeding to be less complete or
well developed than the record in a contested case proceeding.
	For the foregoing reasons, we agree with the Court of
Appeals that the legislature's intent is clear based on an
examination of the text and context of ORS 183.484.  On judicial
review of an order in other than a contested case proceeding, ORS
183.484 affords the parties the opportunity to develop a record
like the one that parties are entitled to develop at an earlier
stage in a contested case proceeding.
	That conclusion does not expand the circuit court's
role in reviewing the record on review in other than a contested
case proceeding, however.  As noted, ORS 183.484(4)(c) and
183.482(8)(c) both provide that the circuit court's review of the
record is review for substantial evidence.  The court's
evaluation of the record is limited to whether the evidence would
permit a reasonable person to make the determination that the
agency made in a particular case.  See Garcia v. Boise Cascade
Corp., 309 Or 292, 295, 787 P2d 884 (1990) (describing
substantial evidence review).
	The next question is whether, on the record in this
case, substantial evidence exists from which a reasonable person
could conclude that the water that arises from the spring on
petitioner's property would run off her property if it were not
diverted.  We conclude that it does.  The department produced
both documentary and testimonial evidence that a significant
quantity of water arises from the spring on petitioner's property
and that, if that water were not diverted by a ditch and
obstructed by a dike, then it would flow off petitioner's
property and into a neighboring creek.  Although petitioner was
able to muster evidence to the contrary, the record, when viewed
as a whole, would permit a reasonable person to find that the
water would flow off the property and, accordingly, that
petitioner is required to obtain a water right permit.  See Erck
v. Brown Oldsmobile, 311 Or 519, 528, 815 P2d 1251 (1991)
(substantial evidence standard of review in APA does not require
reviewing court to "explain away" conflicting evidence).
	The decision of the Court of Appeals is affirmed.  The
judgment of the circuit court is reversed.  The order of the
Water Resources Department is affirmed.  

1. 	A property owner is required to obtain a water right
permit if waters leaving a spring on the property form a
watercourse and, if undiverted, would flow to the land of
another.  Fitzstephens v. Watson et al, 218 Or 185, 194-95, 344
P2d 221 (1959).

2. 	In circuit court, in addition to opposing the relief
sought by petitioner, the department sought an affirmative
declaration that the water would flow off petitioner's property
and, therefore, that petitioner was required to obtain a water
right permit.  The judgment denied that relief.  On judicial
review, the department assigned error to the circuit court
granting petitioner the relief she sought, but it did not assign
error to the denial of the relief the department sought. 
Petitioner contends that this means that the circuit court's
judgment is not properly before the court.  Petitioner is
incorrect.  The department assigned error to the court's
declaration that the water would not flow off petitioner's
property and that petitioner is not required to obtain a water
right permit.  No more is required.

3. 	We note that, before this court, unlike before the
Court of Appeals, the department now agrees with petitioner that
"the record should be limited to evidence possessed by the agency
when it issued its final order."  That the parties now might
agree on the proper interpretation of the relevant statute is of
no moment.  This court's task is to determine the intent of the
legislature, ORS 174.020, not to accede to the parties' agreement
about the meaning of the statute.

4. 	We note that, in this case, before issuing the
department's order, Justus had sent a letter to petitioner
explaining the factual and legal basis for his belief that
petitioner had to obtain a water right permit to continue
diverting water from the spring and asking for her response. 
Through her attorney, Norden had explained why she believed that
she did not have to obtain a water right permit.  However,
nothing in the APA required Justus to obtain that information
from petitioner before issuing the order.