Title: Oregon Health Care Assn. v. Health Div.

State: oregon

Issuer: Oregon Supreme Court

Document:

FILED: DECEMBER 3, 1999 

IN THE SUPREME COURT OF THE STATE OF OREGON

OREGON HEALTH CARE ASSOCIATION,
CARE CENTER EAST HEALTH & 
SPECIALTY CARE, FERNHILL MANOR,
REST HARBOR EXTENDED CARE
CENTER, INC., PORTLAND ADVENTIST
CONVALESCENT CENTER, GLISAN CARE
CENTER, KING CITY REHABILITATION
AND LIVING CENTER, TOWN CENTER
VILLAGE REHAB, FRIENDSHIP HEALTH
CENTER, CRESTVIEW CONVALESCENT
CENTER, DEL'S CARE CENTER,
LAURELHURST CARE CENTER, and MOUNTAIN
VIEW REHABILITATION AND LIVING
CENTER,

Respondents on Review,

	v.

HEALTH DIVISION,

Petitioner on Review,

	and

JILL D. LANEY, Hearing Officer, 
PROVIDENCE MEDICAL CENTER and
OREGON ASSOCIATION OF HOSPITALS &
HEALTH SYSTEMS,

Respondents.

(CN 623; CA A90734; SC S44474)

	On review from the Court of Appeals.*

	Argued and submitted September 9, 1998.

	Philip Schradle, Assistant Attorney General, Salem, argued
the cause for petitioner on review.  With him on the briefs were
Hardy Myers, Attorney General, and Michael D. Reynolds, Solicitor
General.

	Thomas William Sondag, Lane Powell Spears Lubersky, LLP,
Portland, argued the cause for respondents on review.  With him
on the briefs were Gary P. Harrell and Robert C. Dougherty,
Harrell & Nester, LLP, Portland.

	Before Carson, Chief Justice, Van Hoomissen and Durham,
Justices, and Wollheim, Justice Pro Tempore.**

	DURHAM, J.

	The decision of the Court of Appeals is reversed.  The
petition for judicial review is dismissed.

	*148 Or App 568 (1997).

	**Gillette, Kulongoski, Leeson, and Riggs, JJ., did not
participate in the consideration or decision of this case. 

	DURHAM, J.

	The Health Division seeks judicial review of a Court of
Appeals determination that ORS 183.482(1), which concerns
judicial review of a contested case, authorizes that court to
review certain nonfinal orders issued during a contested case. 
Oregon Health Care Assn. v. Health Div., 148 Or App 568, 941 P2d
593 (1997).  We conclude that neither ORS 183.482(1) nor any
other statute authorizes the Court of Appeals to review the
orders at issue here.  Accordingly, we reverse the decision of
the Court of Appeals and dismiss the petition for judicial
review.  

	The pertinent facts are not in dispute.  The Health
Division granted the application of Providence Medical Center
(Providence) for a Certificate of Need to establish a skilled
nursing facility.  Oregon Health Care Association (the
Association) represents a number of health care facilities
(hereinafter members) in the area.(1)  We refer to the Association
and its members in this opinion collectively as "OHCA."  The
Association, but not the members, sought a reconsideration
hearing before the Health Division under ORS 442.315(5)(b), which
provides for "a reconsideration hearing pursuant to ORS 183.310
to 183.550."  A reconsideration hearing under ORS 442.315(5)(b)
is a "contested case" for purposes of the Administrative
Procedures Act (APA), ORS 183.310 to ORS 183.550.(2)  During the
reconsideration proceeding, the Health Division hearing officer
authorized Providence to serve subpoenas duces tecum on the
members.  Each of the members moved to quash the subpoenas. 
After a hearing, the hearing officer issued orders modifying the
subpoenas and denying the motions to quash.  

		OHCA sought judicial review of the hearing officer's
orders in the Court of Appeals under ORS 183.482(1).  That
statute provides, in part: 

		"Jurisdiction for judicial review of contested
cases is conferred upon the Court of Appeals. 
Proceedings for review shall be instituted by filing a
petition in the Court of Appeals.  The petition shall
be filed within 60 days only following the date the
order upon which the petition is based is served unless
otherwise provided by statute."

OHCA also filed a petition in Marion County Circuit Court seeking
review of the orders under ORS 183.484(1).  That statute
provides:

		"Jurisdiction for judicial review of orders other
than contested cases is conferred upon the Circuit
Court for Marion County and upon the circuit court for
the county in which the petitioner resides or has a
principal business office.  Proceedings for review
under this section shall be instituted by filing a
petition in the Circuit Court for Marion County or the
circuit court for the county in which the petitioner
resides or has a principal business office."

OHCA claimed in the petitions that the modified subpoenas
required the members to produce voluminous records, including
patient medical records and other records that constitute trade
secrets.

	OHCA then moved the Court of Appeals for a
determination whether the proper forum for judicial review of the
orders was the Court of Appeals or the circuit court.  OHCA
asserted that two statutes authorized the Court of Appeals to
review the orders.  First, OHCA contended that ORS 183.480(3)
allows a party to maintain an "action or suit" to review an
agency's nonfinal orders on a showing that "the party will suffer
substantial and irreparable harm if interlocutory relief is not
granted."  ORS 183.480 provides, in part: 

		"(1) Except as provided in ORS 183.415(5)(b)
[regarding an informal disposition of a contested
case], any person adversely affected or aggrieved by an
order or any party to an agency proceeding is entitled
to judicial review of a final order, whether such order
is affirmative or negative in form.  A petition for
rehearing or reconsideration need not be filed as a
condition of judicial review unless specifically
otherwise provided by statute or agency rule.

		"(2) Judicial review of final orders of agencies
shall be solely as provided by ORS 183.482, 183.484,
183.490 and 183.500.

		"(3) No action or suit shall be maintained as to
the validity of any agency order except a final order
as provided in this section and ORS 183.482, 183.484,
183.490 and 183.500 or except upon showing that the
agency is proceeding without probable cause, or that
the party will suffer substantial and irreparable harm
if interlocutory relief is not granted."

Second, OHCA contended that, because the orders were issued
during a contested case, the Court of Appeals had jurisdiction to
review the orders under ORS 183.482(1).  The Health Division
responded that, because the orders were not final, the circuit
court, not the Court of Appeals, had authority to review them.

	The Court of Appeals determined that it had
jurisdiction to review the orders because they were generated
during a contested case and because OHCA alleged that the
subpoenas, if enforced, would cause substantial and irreparable
harm.  The Health Division petitioned this court for review of
the Court of Appeals' decision.

	As a preliminary matter, OHCA asserts that the Court of
Appeals' order in this case is not a "decision" reviewable by
this court under ORS 2.520, which permits aggrieved parties to
seek Supreme Court review of a "decision of the Court of
Appeals."  OHCA cites Tjernlund and Tjernlund, 275 Or 483, 485,
551 P2d 445 (1976), in which this court held that an order of the
Court of Appeals denying a motion to dismiss in a domestic
relations case was not reviewable, because it was not a final
disposition of the case.  OHCA correctly notes that this court
has allowed review of Court of Appeals orders that do not dispose
of a case finally, if the case "involve[s] issues of sufficient
public importance to justify this court's consideration before
the Court of Appeals has an opportunity to decide the underlying
appeal on the merits."  Garganese v. Dept. of Justice, 318 Or
181, 185, 864 P2d 364 (1993); Oregon Peaceworks Green, PAC v.
Sec. of State, 311 Or 267, 270 n 2, 810 P2d 836 (1991) (same). 
OHCA argues, however, that this case does not present an issue of
sufficient public importance to justify review by this court. 
That argument is not well taken.  

	In Oregon Business Planning Council v. LCDC, 290 Or
741, 626 P2d 350 (1981), this court reviewed a decision of the
Court of Appeals in which that court concluded that it had
jurisdiction under ORS 183.482 to review orders of the Land
Conservation and Development Commission (LCDC) "acknowledging"
various local government land use plans to be in compliance with
statewide planning goals.  Despite the fact that the Court of
Appeals' opinion was not a final "decision" in the matter, this
court allowed review.  The court concluded that, because the
Court of Appeals "undertook to decide important questions
relating to the scope of review of LCDC orders," id. at 744 n 5
(emphasis in original), the case presented an issue of public
importance and, therefore, ORS 2.520 authorized Supreme Court
review.  The Court of Appeals' conclusion in the present case,
that it has authority to review a nonfinal agency order issued
during a contested case, is an issue of public importance to the
same extent that the Court of Appeals' conclusion regarding its
jurisdiction in Oregon Business Planning Commission was an issue
of public importance that justified review by this court.  The
decision of the Court of Appeals here is subject to Supreme Court
review under ORS 2.520.

	We turn to the merits.  Whether Oregon law authorizes
the Court of Appeals to review the hearing officer's nonfinal
orders is a question of statutory interpretation.  In
interpreting the statutes that pertain to the authority of the
Court of Appeals, we first examine the statutory text and
context.  If that examination reveals the legislature's intent,
we proceed no further.  See Jones v. General Motors Corp., 325 Or
404, 411-15, 939 P2d 608 (1997) (applying that methodology).  

	ORS 183.480 identifies the complete range of
permissible bases for challenging in Oregon courts the decisions
of an agency to which the APA applies.  ORS 183.480(1) entitles a
qualified person or party to petition for "judicial review of a
final order * * *."  ORS 183.480(2) confines judicial review of a
final agency order to the forums and within the parameters
prescribed in ORS 183.482, 183.484, 183.490 and 183.500.  

	ORS 183.480(3) prohibits the maintenance of any action
or suit regarding the validity of any agency order, unless one of
three exceptions applies.  The first exception is a proceeding
for judicial review of a "final" order as provided in "this
section," i.e., in ORS 183.480, and in 183.482, 183.484, 183.490,
and 183.500.  The second exception is a proceeding in which the
party challenging the agency order makes a "showing that the
agency is proceeding without probable cause."  The third
exception is a proceeding in which the party challenging the
agency order makes a showing "that the party will suffer
substantial and irreparable harm if interlocutory relief is not
granted."(3) 

	OHCA argues that ORS 183.482(1) creates jurisdiction in
the Court of Appeals for judicial review of nonfinal orders
arising out of contested cases and that ORS 183.484(1) creates
jurisdiction in the circuit court for judicial review of nonfinal
orders in other than contested cases.  OHCA concludes that,
because the nonfinal orders under review here arose out of a
contested case, the Court of Appeals is the appropriate forum for
judicial review of those orders. 

	In discerning the legislature's intent, we examine all
the pertinent statutes together in context and do not focus our
attention only on parts of the statutory scheme.  It is true that
ORS 183.482(1) and ORS 183.484(1) bifurcate the categories of
agency proceedings that are subject to judicial review.  ORS
183.482(1) confers "[j]urisdiction for judicial review of
contested cases * * * upon the Court of Appeals."  ORS 183.484(1)
confers "[j]urisdiction for judicial review of orders other than
contested cases * * *" on the circuit court.  However, in
describing the authority of the Court of Appeals and the circuit
court to review an agency order, neither ORS 183.482(1) nor ORS
183.484(1) state whether the order being reviewed must be final
or may be nonfinal.

	ORS 183.480 clarifies that point.  ORS 183.480(1)
entitles a qualified person to judicial review of a final order
only.  ORS 183.480(2) confines judicial review of a final order
to the rules specified in ORS 183.482, 183.484, 183.490, and
183.500.  The first exception stated in ORS 183.480(3) forbids
any challenge to "any agency order except a final order as
provided in this section and ORS 183.482, 183.484, 183.490 and
183.500."(4)  (Emphasis added.)  Those are the only references to
judicial review in ORS 183.480.  Each reference supports the
conclusion that the basis for judicial review by any court of any
agency order is a petition for judicial review of a final order. 

	The Court of Appeals interpreted the phrase "any agency
order" in ORS 183.480(3) to refer to nonfinal as well as final
orders.  We agree.  However, it then concluded that the phrase
"in this section" incorporated the second and third exceptions,
as described above, and made those challenges available as
grounds for judicial review of nonfinal orders.  We reject that
reading because, according to the statutory text, the first
exception applies only to "a final order," and the phrase "as
provided in this section" refers only to the process for
challenging a final order described in ORS 183.480 --
specifically, judicial review.  The phrase "final order" in the
first exception makes that exception inapplicable to a challenge
to a nonfinal order. 

	The foregoing discussion leads us to a tentative
conclusion that, under ORS 183.480(3), a final order is the
predicate for judicial review.  However, OHCA urges us to reject
that conclusion because the second and third exceptions in ORS
183.480(3), unlike the first exception, apply to challenges to
"any agency order," not only to a final order.  According to
OHCA, a person or party is entitled to make the showings
identified in the second and third exceptions at any time
following issuance of the agency's order, including during a
judicial review proceeding.  For the reasons that follow, we
reject that interpretation.  

	The legislature set out the second and third exceptions
in ORS 183.480(3) in a separate clause that, by contrast with the
clause that contains the first exception, does not cite or refer
to the statutes governing judicial review.  That format indicates
that the second and third exceptions describe complaints about
agency action that do not invoke a court's jurisdiction for
judicial review.

	Other textual clues confirm that construction.  ORS
183.482(8) describes the exclusive list of legal errors by an
agency that may justify relief in the Court of Appeals on
judicial review.(5)  ORS 183.484(4) describes a similar exclusive
list of agency errors that may lead to relief in the circuit
court on judicial review of a final order in other than a
contested case.(6)  Those lists of errors and forms of relief do
not correspond with the showings described in the second and
third exceptions in ORS 183.480(3).  That contrast undermines
OHCA's contention that the second and third exceptions in ORS
183.480(3) describe additional complaints about nonfinal agency
actions that a court may consider on judicial review.

	The rationale offered by the Court of Appeals to
support its contrary conclusion does not withstand analysis.  The
Health Division argued to the Court of Appeals that

an appellate court is not equipped to conduct an evidentiary
proceeding wherein a person or party could make either of the
showings described in ORS 183.480(3).  The Court of Appeals
responded, first, that parties in a judicial review proceeding
may supplement an incomplete agency record, ORS 183.482(5), and,
second, that ORS 183.482(7) authorizes the Court of Appeals on
judicial review to refer to a master "disputed allegations of
irregularities in procedure before the agency not shown in the
record * * *."(7)  Oregon Health Care Assn., 148 Or App at 576-77.

	We reject the first point.  The procedure for adding
evidence to an incomplete agency record is designed to facilitate
judicial review.  It is not an opportunity to create a record to
support either of the showings described in ORS 183.480(3).

	The Court of Appeals also misread the procedure for
appointment of a master under ORS 183.482(7).  That procedure is
designed to supplement the agency record regarding irregularities
in procedure before the agency that do not appear in the record. 
The master's findings are meant to expose a procedural error not
shown in the record for one purpose only: to permit judicial
review of the claimed procedural error.  A proceeding before a
master is not an occasion for making the showings described in
ORS 183.482(3).

	Finally, the Court of Appeals suggested that its
conclusion that "appellate courts are required to review
interlocutory orders in contested cases," 148 Or App at 574
(emphasis in original), finds support in Lane Council Govts v.
Emp. Assn., 277 Or 631, 561 P2d 1012, reh'g den 278 Or 335, 563
P2d 729 (1977).  In our view, the Court of Appeals read too much
into this court's decision in that case.  In Lane Council, a
public body petitioned for judicial review of an agency's
nonfinal order that determined that the public body was a "public
employer" within the meaning of ORS 243.650(18).  This court
concluded that judicial review was not available because the
order was not final.  277 Or at 636.  The public body argued, in
the alternative, that it was entitled to judicial review of the
order under ORS 183.480(3) because, it asserted, the agency was
proceeding without probable cause and the public body would
suffer substantial and irreparable harm without interlocutory
relief.  This court considered and rejected those claims.  The
opinion contains no suggestion that any party claimed that the
public body's alternative claims fell outside the scope of
judicial review.  The court devoted no analysis to, and did not
decide, that question.  Consequently, the Court of Appeals'
reading of Lane Council rests on an unexamined assumption about
the order's reviewability, but not on the court's holding.

	Finally, OHCA contends that the Court of Appeals'
decision is correct because any other statutory construction
would lead to the conclusion "that the legislature provided no
direction whatever concerning the proper forum for judicial
review of nonfinal orders."  That argument is faulty in two
respects.  First, as we have discussed, in the absence of a final
order, judicial review of a nonfinal order under ORS 183.482 and
ORS 183.484 is a contradiction in terms.  The premise for
judicial review under those statutes is a final order.  Except as
provided in ORS 183.490, only on review of a final order may a
court consider a claim that, during its consideration of the
matter, the agency issued an erroneous nonfinal order that
warrants relief under ORS 183.482(8) or ORS 183.484(4).

	Second, the text of ORS 183.480(3) contains other
important clues about the proper forum for challenging a nonfinal
order.  That statute does not grant jurisdiction to any court to
decide any claim.  Instead, ORS 183.480(3) proceeds on the
premise that other statutes create jurisdiction in a court to
consider one of the listed exceptions.  As already noted, ORS
183.482(1) vests jurisdiction in the Court of Appeals for
judicial review of contested cases, ORS 183.484(1) vests
jurisdiction for judicial review of orders in other than
contested cases in the circuit court, and ORS 183.480(1), (2),
and the first exception in (3) confine judicial review to a final
order.  No statute in the APA grants jurisdiction to any court to
consider the showings described in the second and third
exceptions in ORS 183.480(3).  

	ORS 183.480(3) is not silent about that matter,
however.  The statute indicates that the showings described in
the second or third exceptions may be made in an "action or
suit."  In context, that phrase refers to the forms of action
that a circuit court may entertain under other statutory grants
of jurisdiction.  A proceeding in circuit court affords a person
or party to an agency proceeding an opportunity, by "action or
suit," to challenge the validity of an agency's order, as
described in ORS 183.480(3), by showing that the agency is
proceeding without probable cause, or that the party will suffer
substantial and irreparable harm if nonfinal relief is not
granted.

	The term "showing" lends further support to our reading
of the statute.  In this context, a "showing" is:

	"[A] statement or presentation of a case or an
interpretation of a set of facts * * * APPEARANCE,
EVIDENCE * * * proof or prima facie proof of a matter
of fact or law * * *."

Webster's Third New Int'l Dictionary, at 2106 (unabridged ed
1993).  ORS 183.480(3) imposes no limit on the scope of the
evidence that a person or party may offer in making either
showing.  The statute does not require a person or party to make
the required showings to the agency before seeking relief in
court.  Those features of the statute indicate that the
legislature meant a "showing" under ORS 183.480(3) to consist of
a presentation of evidence and argument on the statutory criteria
regardless of whether the person or party first had presented the
evidence and argument to the agency, or the agency first had
addressed and decided the issues presented.  Moreover, the
objective of each showing is judicial relief from unauthorized or
harmful agency action, as described in ORS 183.480(3), not
judicial review under ORS 183.482 or ORS 183.484.  No plausible
construction of the terms "action or suit" and "showing" in this
context supports OHCA's argument that a party can make either
required showing under ORS 183.480(3) on judicial review of a
nonfinal order in the Court of Appeals.

	Brian v. Oregon Government Ethics Commission, 320 Or
676, 891 P2d 649 (1995), illustrates at least one correct
procedural path for challenging an agency's nonfinal order that
is consistent with our construction.  In Brian, the defendant
agency issued a nonfinal order determining that it had cause to
investigate the plaintiff for a statutory ethics violation.  The
plaintiff sought a preliminary injunction in circuit court
against continuation of the investigation on the grounds that the
agency was "proceeding without probable cause" and that the
plaintiff would "suffer substantial and irreparable harm if
interlocutory relief is not granted" under ORS 183.480(3).  The
trial court rejected the second claim, sustained the first claim,
and enjoined the agency's investigation.  On appeal, this court
disagreed with the trial court's conclusion regarding the absence
of probable cause and nullified the injunction.  Although Brian
resulted in no relief against the agency's nonfinal order, the
case demonstrates that a circuit court proceeding for a
preliminary injunction is one kind of proceeding that affords an
opportunity to make the showings described in ORS 183.480(3).(8)

	In summary, our examination of the text of ORS 183.480
and its relevant context confirms our tentative conclusion.  The
legislature intended that a person or party would make the
showings required by the second and third exceptions in ORS
183.480(3) in an "action or suit" in circuit court, and that the
process of judicial review under ORS 183.482 and ORS 183.484
would address claims of error only in a final order.  It follows
that the Court of Appeals erred in determining that it had
jurisdiction to review the nonfinal order of the Health Division. 
The Court of Appeals should have dismissed the petition for
judicial review.

	The decision of the Court of Appeals is reversed.  The
petition for judicial review is dismissed.

1. The members are the other petitioners in this case. 

2. ORS 183.310(2)(a) provides:

		"'Contested case' means a proceeding before an
agency:

		"(A) In which the individual legal rights, duties
or privileges of specific parties are required by
statute or Constitution to be determined only after an
agency hearing at which such specific parties are
entitled to appear and be heard;

		"(B) Where the agency has discretion to suspend or
revoke a right or privilege of a person;

		"(C) For the suspension, revocation or refusal to
renew or issue a license where the licensee or
applicant for a license demands such hearing; or

		"(D) Where the agency by rule or order provides
for hearings substantially of the character required by
ORS 183.415, 183.425, 183.450, 183.460 and 183.470."

3. ORS 183.480(3) does not identify expressly the persons
who may make the showing described in the second exception. 
However, a "party" may make the showing described in the third
exception.  The pertinent statutory definition of "party" appears
in ORS 183.310(6).	

4. ORS 183.490 provides:

		"The court may, upon petition as described in ORS
183.484, compel an agency to act where it has
unlawfully refused to act or make a decision or
unreasonably delayed taking action or making a
decision."

ORS 183.500 authorizes a party in a circuit court proceeding to
"appeal from the decree of that court to the Court of Appeals." 
Those statutes shed little light on the question whether the
Court of Appeals has authority to address a petition for judicial
review of a nonfinal order under ORS 183.482.

5. ORS 183.482(8) provides:

		"(a) The court may affirm, reverse or remand the
order. If the court finds that the agency has
erroneously interpreted a provision of law and that a
correct interpretation compels a particular action, it
shall:

		"(A) Set aside or modify the order; or

		"(B) Remand the case to the agency for further
action under a correct interpretation of the provision
of law.

		"(b) The court shall remand the order to the
agency if it finds the agency's exercise of discretion
to be:

		"(A) Outside the range of discretion delegated to
the agency by law;

		"(B) Inconsistent with an agency rule, an
officially stated agency position, or a prior agency
practice, if the inconsistency is not explained by the
agency; or

		"(C) Otherwise in violation of a constitutional or
statutory provision.

		"(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."

6. ORS 183.484(4) provides:

		"(a) The court may affirm, reverse or remand the
order. If the court finds that the agency has
erroneously interpreted a provision of law and that a
correct interpretation compels a particular action, it
shall:

		"(A) Set aside or modify the order; or

		"(B) Remand the case to the agency for further
action under a correct interpretation of the provision
of law.

		"(b) The court shall remand the order to the
agency if it finds the agency's exercise of discretion
to be:

		"(A) Outside the range of discretion delegated to
the agency by law;

		"(B) Inconsistent with an agency rule, an
officially stated agency position, or a prior agency
practice, if the inconsistency is not explained by the
agency; or

		"(C) Otherwise in violation of a constitutional or
statutory provision.

		"(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."

7. ORS 183.482(7) provides, in part:

		"In the case of disputed allegations of
irregularities in procedure before the agency not shown
in the record which, if proved, would warrant reversal
or remand, the Court of Appeals may refer the
allegations to a Master appointed by the court to take
evidence and make findings of fact upon them. The court
shall remand the order for further agency action if it
finds that either the fairness of the proceedings or
the correctness of the action may have been impaired by
a material error in procedure or a failure to follow
prescribed procedure."

8. Brian indicates that the plaintiff sought judicial
review of the agency's nonfinal order in addition to a
preliminary injunction.  For the reasons stated herein, the
request in Brian for judicial review of the order in circuit
court was unavailing, because the order was not final.