No. 35 December 7, 2023 673

IN THE SUPREME COURT OF THE 

STATE OF OREGON

PNW METAL RECYCLING, INC.,

dba Rivergate Scrap Metals, 

dba RS Davis Recycling, 

dba PNW Auto Parts,

dba Orient Auto Parts and Recycling, 

an Oregon corporation;

Schnitzer Steel Industries, Inc., 

an Oregon corporation;

and Pacific Recycling, Inc., 

an Oregon corporation,

Respondents on Review,

v.

OREGON DEPARTMENT OF

ENVIRONMENTAL QUALITY, 

an agency of the State of Oregon,

Petitioner on Review.

(CA A171317) (SC S069412)

On review from the Court of Appeals.*

Argued and submitted November 17, 2022.

Denise G. Fjordbeck, Assistant Attorney General, Salem, 

filed the opening brief for petitioner on review. Carson L. 

Whitehead, Assistant Attorney General, Salem, argued the 

cause and filed the reply brief for petitioner on review. Also 

on the briefs were Ellen F. Rosenblum, Attorney General, 

and Benjamin Gutman, Solicitor General.

Jon W. Monson, Cable Huston LLP, Portland, and Crystal 

S. Chase, Stoel Rives LLP, Portland, argued the cause and 

filed the brief for respondents on review. Also on the brief 

were Nicole M. Swift and Nicole A. W. Abercrombie, Cable 

Huston LLP, Portland, and Kirk B. Maag, Stoel Rives LLP, 

Portland.

______________

* On judicial review from a decision of the Department of Environmental 

Quality. 317 Or App 207, 505 P3d 462 (2022).
674 PNW Metal Recycling, Inc. v. DEQ

Lindsay Thane, Schwabe, Williamson & Wyatt PC, 

Portland, filed the brief for amici curiae Northwest Pulp & 

Paper Association, Oregon Business & Industry Association, 

Oregon Farm Bureau, Oregon Forest Industries Council, 

and Oregonians for Food and Shelter.

Jennifer Gates, Pearl Legal Group, Portland, filed 

the brief for amicus curiae Institute of Scrap Recycling 

Industries Pacific Northwest Chapter.

Before Flynn, Chief Justice, Duncan, Garrett, DeHoog, 

and Masih, Justices, and Balmer and Walters, Senior 

Judges, Justices pro tempore.**

GARRETT, J.

The decision of the Court of Appeals is vacated. The judicial review is dismissed.

**Nelson, J., resigned February 25, 2023, and did not participate in the decision of this case. Bushong and James, JJ., did not participate in the consideration 

or decision of this case.

______________

** Nelson, J., resigned February 25, 2023, and did not participate in the 

decision of this case. Bushong and James, JJ., did not participate in the consideration or decision of this case.
Cite as 371 Or 673 (2023) 675

GARRETT, J.

Under ORS 459.205, a person operating a solid waste 

disposal site must obtain a permit from the Department of 

Environmental Quality (DEQ). Before 2018, DEQ did not 

apply that permit requirement to facilities that dismantled and recycled used vehicles, even if those facilities also 

disposed of other solid waste. Petitioners operate facilities 

that engage in both vehicle and nonvehicle recycling and 

which, therefore, historically were not subject to the permit 

requirement.1

 In 2018, DEQ informed petitioners that the 

agency had changed its view of the relevant statutes and 

that, based on that revised interpretation, petitioners would 

be required to obtain permits.

Petitioners initiated this challenge under ORS 

183.400, contending that DEQ’s change of position constituted a “rule” under the Oregon Administrative Procedures 

Act (APA); that DEQ had adopted the rule without following APA rulemaking procedures; and that DEQ could not 

lawfully promulgate a rule in any event because DEQ lacks 

rulemaking authority. Agreeing with petitioners that DEQ 

had improperly adopted a rule, the Court of Appeals held 

DEQ’s decision invalid. PNW Metal Recycling, Inc. v. DEQ, 

317 Or App 207, 213, 505 P3d 462 (2022).

DEQ sought review, which we allowed. For the 

reasons explained below, we conclude that petitioners’ rule 

challenge under ORS 183.400 must be dismissed. DEQ’s 

internal decision to adopt a new interpretation of a statute 

is not, by itself, a “rule.” We vacate the decision of the Court 

of Appeals and dismiss the judicial review.

I. BACKGROUND

This case presents an important question of administrative law, the resolution of which turns on several distinct statutory schemes. A brief overview of those statutes 

will provide helpful context for understanding the facts that 

led to this dispute. Accordingly, we begin by describing, 

1 In requesting judicial review of the validity of an agency rule, the party 

requesting review is denominated the “petitioner.” ORS 183.400. Thus, although 

PNW Metal Recycling et al. are the respondents on review in this court, we refer 

to those participants as “petitioners” throughout this opinion.
676 PNW Metal Recycling, Inc. v. DEQ

first, the relevant provisions of the APA; second, statutes 

establishing DEQ and setting out its authority; and third, 

statutes regulating solid waste disposal. After doing so, we 

discuss the historical facts.

A. Oregon APA Requirements

Executive branch agencies perform functions that 

can be described as legislative (adoption of rules), executive 

(enforcement of statutes and rules), or adjudicative (determination of rights and obligations in particular cases). In 

all events, an agency’s authority is defined by the legislature. An agency is a creature of statute, and the scope of 

its substantive power is set forth in and circumscribed by 

its enabling statute. See SAIF v. Shipley, 326 Or 557, 561, 

955 P2d 244 (1998) (“[A]n agency has only those powers that 

the legislature grants and cannot exercise authority that it 

does not have.”); Trebesch v. Employment Division, 300 Or 

264, 267, 710 P2d 136 (1985) (“The authorizing statutes will 

specify whether rulemaking or adjudication authority, or 

both, are delegated to the agency and will indicate the agency’s tasks, the breadth of the agency’s discretion to carry out 

these tasks, and the process by which they are to be accomplished.”). For example, an enabling statute might articulate a legislative policy objective such as clean air or clean 

water, direct an agency to further that goal, and authorize 

the agency to undertake specific actions in doing so, such as 

promulgating rules, issuing permits or licenses, and initiating enforcement actions.

In ORS chapter 183, the APA, in turn, sets out a 

series of procedures that generally govern state agencies in 

the performance of those functions, as well as judicial review 

of agency action. At the heart of the APA is the distinction 

between procedures applicable to an agency’s exercise of its 

legislative function—which results in a “rule”—and those 

governing an agency’s use of its executive and adjudicatory 

powers—which are exercised through “orders,” sometimes 

following “contested cases.”

“Rules,” as a species of lawmaking, are meant to 

apply generally. Subject to exceptions discussed further 

below, the APA defines “rule” as “any agency directive, 
Cite as 371 Or 673 (2023) 677

standard, regulation or statement of general applicability 

that implements, interprets or prescribes law or policy, or 

describes the procedure or practice requirements of any 

agency.” ORS 183.310(9). ORS 183.325 to 183.410 set out 

detailed requirements for agency rulemaking proceedings, 

including the requirements of public notice and opportunity for comment by interested persons, ORS 183.335; filing 

and publication of rules, ORS 183.355, ORS 183.360, ORS 

183.365; and a provision invoked in this case by which a person may challenge the validity of a rule by filing a petition 

with the Court of Appeals, ORS 183.400.

“Orders,” in contrast, are particularized. Subject to 

exceptions, the APA defines “order” as “any agency action 

expressed orally or in writing directed to a named person or 

named persons, other than employees, officers or members 

of an agency. ‘Order’ includes any agency determination or 

decision issued in connection with a contested case proceeding.” ORS 183.310(6)(a).

A “contested case” is defined as follows:

“(a) ‘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 [certain other provisions of the APA].

“(b) ‘Contested case’ does not include proceedings in 

which an agency decision rests solely on the result of a test.”

ORS 183.310(2). In ORS 183.411 to 183.471, the APA 

prescribes procedures for contested cases, including 
678 PNW Metal Recycling, Inc. v. DEQ

requirements of notice, opportunities for discovery, introduction of evidence, representation by counsel, and entry of 

final orders with findings of fact and conclusions of law.

The APA thus contemplates that, as a general matter, an agency’s application of law or policy to particular 

facts will occur through an order (sometimes following a 

contested case), while an agency action that “implements, 

interprets or prescribes law or policy” in a way that has 

“general applicability,” ORS 183.310(9), will occur through 

rulemaking. But that general distinction has an important 

exception. The APA also provides:

“A rule is not valid or effective against any person or 

party until the rule is filed in accordance with this section. 

However, if an agency, in disposing of a contested case, 

announces in its decision the adoption of a general policy 

applicable to the case and subsequent cases of like nature 

the agency may rely upon the decision in disposition of later 

cases.”

ORS 183.355(6) (emphasis added). Thus, in a contested 

case proceeding, an agency may make a statement that 

otherwise has the character of a rule—because it is an 

“adoption of a general policy” applicable not only to the 

case but to “cases of like nature.” And, in that event, the 

agency may apply the policy prospectively even though it 

was adopted without the notice-and-comment features of 

formal rulemaking. To put it another way, the fact that 

an agency makes a statement of policy that is consistent 

with the definition of “rule” does not mean that the agency 

must make that statement through rulemaking proceedings. See Homestyle Direct, LLC v. DHS, 354 Or 253, 265-

66, 311 P3d 487 (2013) (“Merely because a given administrative standard or policy satisfies the statutory definition 

of a ‘rule’ under the [APA] does not necessarily mean 

that it is invalid unless preceded by notice and comment 

rulemaking proceedings.” (Citing ORS 183.355(6).)). As we 

will explain later in this opinion, in some circumstances 

an agency must use rulemaking rather than the contested 

case process to announce policy; whether that is so, however, is determined not by the APA, but, instead, by the 

agency’s substantive enabling statutes.
Cite as 371 Or 673 (2023) 679

B. DEQ and EQC

The legislature has enacted an extensive statutory 

scheme for environmental protection, addressing matters 

ranging from solid waste management (ORS chapter 459) to 

air quality (ORS chapter 468A) to water quality (ORS chapter 468B) to hazardous waste (ORS chapters 465 and 466), 

among others.

ORS chapter 468 establishes two entities with significant responsibility for administering and enforcing that 

regulatory scheme: the Environmental Quality Commission 

(EQC) and DEQ. ORS 468.010 provides that the EQC consists of five members appointed by the Governor and confirmed by the Senate. ORS 468.015 states that the function of EQC is to “establish the policies for the operation 

of [DEQ].” ORS 468.020(1) provides that EQC “shall adopt 

such rules and standards as it considers necessary and 

proper in performing the functions vested by law in the 

[EQC],” with such adoption of rules and standards to be 

made “[i]n accordance with the applicable provisions of [the 

APA].” Thus, the EQC has an express grant of authority to 

make “rules” that are necessary to carry out the functions 

vested in it by statute.

DEQ is separately created by ORS 468.030, which 

provides that the department exists “under” EQC and consists of a “[d]irector” and other personnel. ORS 468.040 provides that the DEQ director is appointed by the EQC and 

serves at the pleasure of the commission. ORS 468.035 sets 

out a list of specific functions to be performed by DEQ “[s]

ubject to policy direction by [EQC],” and ORS 468.045(1)

(c) generally provides that the purpose of DEQ, through its 

director, is to “[a]dminister and enforce the laws of the state 

concerning environmental quality.”

The statutory scheme accordingly contemplates a 

basic division of functions whereby EQC has the responsibility to establish “policies” for the operation of DEQ and 

the authority to adopt “rules and standards” to carry out its 

statutory duties, while DEQ is directed to “[a]dminister and 

enforce” the environmental laws “[s]ubject to policy direction” by EQC.
680 PNW Metal Recycling, Inc. v. DEQ

C. Solid Waste Disposal and Permitting

Among numerous subjects of environmental regulation, the legislature has enacted a statutory scheme for 

“solid waste management,” codified in ORS chapter 459.

“Solid waste” is defined to mean

“all useless or discarded putrescible and nonputrescible 

materials, including but not limited to garbage, rubbish, 

refuse, ashes, paper and cardboard, sewage sludge, septic 

tank and cesspool pumpings or other sludge, useless or 

discarded commercial, industrial, demolition and construction materials, discarded or abandoned vehicles or parts 

thereof, discarded home and industrial appliances, manure, 

vegetable or animal solid and semisolid materials, dead 

animals and infectious waste as defined in ORS 459.386. 

‘Solid waste’ does not include:

“(a) Hazardous waste as defined in ORS 466.005.

“(b) Materials used for fertilizer or for other productive purposes or which are salvageable as such materials 

are used on land in agricultural operations and the growing or harvesting of crops and the raising of animals.

“(c) Woody biomass that is combusted as a fuel by 

a facility that has obtained a permit described in ORS 

468A.040.”

ORS 459.005(25) (emphasis added). As defined, solid waste 

includes a wide range of material, including, as relevant to 

this case, “discarded or abandoned vehicles or parts thereof.” 

Id.

ORS 459.045 addresses rulemaking by EQC in the 

area of solid waste management. ORS 459.045(1) states 

that EQC “shall” adopt rules pertaining to certain aspects 

of solid waste management, and ORS 459.045(2) states that 

the commission “may” adopt other rules; that statute does 

not, however, specifically address rulemaking with respect 

to the issuance or denial of permits. The parties have identified no statute, and we are aware of none, that grants DEQ 

rulemaking authority on that subject.

Several provisions of ORS chapter 459 deal with 

“disposal sites.” As relevant here, ORS 459.205 states that
Cite as 371 Or 673 (2023) 681

“a disposal site shall not be established, operated, maintained or substantially altered, expanded or improved, and 

a change shall not be made in the method or type of disposal at a disposal site, until the person owning or controlling the disposal site obtains a permit therefor from the 

Department of Environmental Quality as provided in ORS 

459.235.”

Under that statute, DEQ is charged with issuing permits for 

“disposal sites.” The legislature has defined a “disposal site” 

as follows:

“(a) ‘Disposal site’ means land and facilities used for 

the disposal, handling or transfer of, or energy recovery, 

material recovery and recycling from solid wastes, including but not limited to dumps, landfills, sludge lagoons, 

sludge treatment facilities, disposal sites for septic tank 

pumping or cesspool cleaning service, transfer stations, 

energy recovery facilities, incinerators for solid waste 

delivered by the public or by a collection service, composting plants and land and facilities previously used for solid 

waste disposal at a land disposal site.

“(b) ‘Disposal site’ does not include:

“* ****

“(D) A site operated by a dismantler issued a certificate under ORS 822.110.”

ORS 459.005(8). Thus, the definition of a “disposal site” that 

cannot be operated without a permit from DEQ excludes 

sites operated pursuant to a “certificate under ORS 822.110.” 

ORS 822.110 is part of the Oregon Vehicle Code and provides for the Oregon Department of Transportation (ODOT) 

to issue a “dismantler certificate” to entities that meet specified requirements.

To summarize, the legislature has provided that 

DEQ shall be responsible for administering a mandatory 

permit program for solid waste disposal sites, ORS 459.205, 

and the legislature has further provided that “solid waste” 

includes “discarded or abandoned vehicles or parts thereof.” 

ORS 459.005(25). At the same time, the legislature has 

stated that a “disposal site” for which permits are required 

does not include a “site” operated by a person that has 

obtained a vehicle “dismantler certificate” from ODOT. ORS 
682 PNW Metal Recycling, Inc. v. DEQ

459.005(8)(b)(D). We refer to that statute throughout this 

opinion as the “auto-dismantler exception.” The interplay 

among those provisions is central to the parties’ arguments 

in this case.

D. Factual Background

The relevant facts are largely procedural and are 

undisputed. Petitioners operate scrap metal recycling facilities that accept and process both vehicular and nonvehicular materials. Those materials fall within the statutory definition of “solid waste” under ORS 459.005(25). Petitioners 

also, however, hold vehicle dismantler certificates issued by 

ODOT under ORS 822.110.

Before the events giving rise to this case, DEQ had 

not applied ORS 459.205, the statute that requires permits 

for solid waste disposal sites, to facilities that hold vehicle 

dismantler certificates, even if those facilities engaged in 

other solid waste disposal functions. Instead, DEQ required 

a facility to obtain a solid waste disposal permit only if the 

facility had no vehicle processing operations. The record 

does not reflect the reason for that historical practice by 

DEQ.

A March 2018 fire at a Portland automobile shredding facility (not operated by either of the petitioners) 

prompted DEQ to undertake a review to “identify potential 

gaps in environmental regulation of automobile dismantlers.” In an internal memorandum in August of that year, 

DEQ staff noted the following about the auto-dismantler 

exception:

“DEQ historically has applied the statutory exemption 

from solid waste management regulation as applying to 

an entire operation, even if that operation includes solid 

waste other than automobiles. Nevertheless, the statutory 

exemption could be applied narrowly to only cover auto dismantling operations—leaving other solid waste activities 

subject to regulation.”

Interpreting the auto-dismantler exception in ORS 

459.005(8)(b)(D) more narrowly was just one of several 

options that the staff memorandum identified. Other 

options included: (1) maintaining the status quo; (2) formally 
Cite as 371 Or 673 (2023) 683

adopting new administrative rules for “interpreting the 

[auto-dismantler] exclusion”; (3) proposing a bill to the legislature to “remove or clarify the auto dismantler exemption”; and (4) proposing a bill to the legislature to “direct 

DEQ to issue permits or take other specific actions.”

In July and November 2018, following separate site 

inspections of petitioners’ facilities, DEQ informed petitioners in writing that their facilities would be subject to the 

permitting requirement for nonvehicular waste processing, 

even though those facilities held dismantling certificates 

from ODOT. In December, DEQ staff met with representatives of petitioner PNW Metal Recycling. At that meeting, 

DEQ staff acknowledged that, “historically, we’ve said, if you 

had the DMV [auto-dismantler] certificate, then you’re not 

defined as a disposal site by law.” DEQ staff then explained 

the agency’s change of view, viz., that “[DEQ has] clarified 

*** that, for those facilities that accept other types of waste 

materials in addition to vehicles, they are a disposal site, 

and they should be regulated under a DEQ permit.” During 

the meeting, agency staff also indicated that DEQ intended 

to apply the permitting requirement to other similarly situated facilities, not just petitioners.

Petitioners chose to challenge DEQ’s decision by 

initiating this proceeding under ORS 183.400, which provides that “[t]he validity of any rule may be determined 

upon a petition by any person to the Court of Appeals.” ORS 

183.400(1). Petitioners argued that DEQ’s new interpretation of the auto-dismantler exception was a “rule,” that 

DEQ had failed to follow rulemaking procedures, and that 

DEQ lacked rulemaking authority. Petitioners advanced 

only those procedural arguments; they did not argue that 

DEQ’s new interpretation was substantively incorrect. DEQ 

sought to dismiss, arguing that ORS 183.400 is inapplicable because the agency had not promulgated a “rule.” The 

Appellate Commissioner concluded that the question of 

whether the challenged action was a rule warranted resolution by a panel.

Before the Court of Appeals panel, petitioners 

pressed their arguments that DEQ’s decision to change its 

interpretation of the auto-dismantler exception constituted 
684 PNW Metal Recycling, Inc. v. DEQ

a new rule, that the rule had been adopted without following APA rulemaking procedures, and that DEQ lacked the 

statutory authority to engage in rulemaking in any event. 

In response, DEQ agreed that, if the agency’s decision constitutes a rule, it is invalid, but argued that no rule had been 

adopted.

The Court of Appeals agreed with petitioners. After 

consulting the definition of “rule” in ORS 183.310(9) (“any 

agency directive, standard, regulation or statement of general applicability that implements, interprets or prescribes 

law or policy, or describes the procedure or practice requirements of any agency”), the Court of Appeals concluded that 

DEQ’s action met that definition. PNW Metal Recycling, Inc., 

317 Or App at 213. Relying on its own case law, that court 

reasoned that DEQ’s evolving interpretation of the auto-dismantler exception showed that multiple interpretations are 

“reasonable,” and DEQ’s decision to change its interpretation 

was therefore a “new exercise of agency discretion[,] which 

must be promulgated as a rule to be valid.” Id. at 212 (internal quotation marks omitted). The Court of Appeals rejected 

DEQ’s argument that the agency’s action was not “generally 

applicable,” noting that the agency had stated its intention 

to apply its new interpretation to other similarly situated 

facilities in addition to those operated by petitioners.

DEQ sought review of the Court of Appeals decision, which we allowed.

II. ANALYSIS

A. Brief Overview

At the outset, we note the peculiar posture of the 

case before us. This proceeding is ostensibly a challenge 

under ORS 183.400 to the validity of DEQ’s “rule.” But the 

agency disputes that it adopted any rule; moreover, the 

gravamen of petitioners’ argument is that rulemaking was 

required and did not occur. Petitioners further contend that, 

although rulemaking was required, DEQ could not have 

done it, because the agency lacks statutory authority to promulgate rules; only EQC can do that. In sum, petitioners 

argue that DEQ made a decision that constitutes a “rule”; 

that DEQ did not comply with rulemaking procedures and 
Cite as 371 Or 673 (2023) 685

lacked the power to do so; but that the type of decision DEQ 

made is nevertheless one that required rulemaking.

As discussed below, DEQ’s internal decision to 

adopt a new interpretation of the auto-dismantler exception 

was not a “rule.” In explaining that conclusion, we address 

certain premises underlying petitioners’ arguments and 

the Court of Appeals decision that are not entirely correct. Petitioners contend, for example, that DEQ’s decision 

to change its interpretation of the auto-dismantler exception was a discretionary policy choice that could only be 

made through rulemaking. Implicit in that argument is 

the assumption that, if an agency’s action makes “policy” 

or is otherwise consistent with the definition of rule in ORS 

183.310(9), then that action must occur through rulemaking 

procedures. That assumption is contrary to our case law. As 

noted earlier in this opinion, the APA provides that agency 

announcements of policy may also occur in contested cases. 

But the APA does not determine when one of those mechanisms or the other must be used. In several cases, this court 

has explained that agencies must use rulemaking in certain 

circumstances; when that is so, however, it is not because 

the APA requires it. Whether an agency must use rulemaking in a particular situation is a function of the agency’s 

substantive authority as defined by its enabling statutes.

Petitioners have not attempted to demonstrate that 

the legislature intended for the application of the auto-dismantler exception to be handled through rulemaking. 

Without a properly developed argument that rulemaking 

was the required path, petitioners are left to rely solely on 

the APA’s definition of “rule” to argue that DEQ’s actions 

were procedurally improper. Based on the larger context of 

the APA and principles of administrative law set out in this 

court’s cases, we conclude that petitioners are mistaken.

B. Definition of “Rule”

ORS 183.310(9) provides, in full:

“‘Rule’ means any agency directive, standard, regulation or statement of general applicability that implements, 

interprets or prescribes law or policy, or describes the procedure or practice requirements of any agency. The term 
686 PNW Metal Recycling, Inc. v. DEQ

includes the amendment or repeal of a prior rule, but does 

not include:

“(a) Unless a hearing is required by statute, internal 

management directives, regulations or statements which 

do not substantially affect the interests of the public:

“(A) Between agencies, or their officers or their employees; or

“(B) Within an agency, between its officers or between 

employees.

“(b) Action by agencies directed to other agencies or 

other units of government which do not substantially affect 

the interests of the public.

“(c) Declaratory rulings issued pursuant to ORS 

183.410 [(agency determination of applicability of rule or 

statute to petitioner)] or 305.105 [(declaratory rulings by 

department)].

“(d) Intra-agency memoranda.

“(e) Executive orders of the Governor.

“(f) Rules of conduct for persons committed to the physical and legal custody of the Department of Corrections, the 

violation of which will not result in:

“(A) Placement in segregation or isolation status in 

excess of seven days.

“(B) Institutional transfer or other transfer to secure 

confinement status for disciplinary reasons.

“(C) Disciplinary procedures adopted pursuant to ORS 

421.180 [(disciplinary procedures)].”

This court has not previously decided a case turning on the 

definition of “rule,” although we have observed that the definition is broad. See, e.g., Morgan v. Stimson Lumber Company, 

288 Or 595, 602-03, 607 P2d 150 (1980) (“[A]n agency makes 

a rule, within the broad meaning of that term, when it does 

nothing more than publish its official position on how it 

interprets a requirement, standard, or procedure[.]”).

Before proceeding further, we pause to be clear about 

petitioners’ assertion as to the nature of the “rule” that DEQ 

adopted. Petitioners rely on the 2018 staff memorandum 
Cite as 371 Or 673 (2023) 687

proposing a different interpretation of the auto-dismantler 

exception; petitioners further rely on DEQ’s written and 

oral communications explaining that decision to petitioners. 

Petitioners do not contend, however, that any such document 

or communication, alone or in the aggregate, constitutes 

the rule. (Petitioners also acknowledge that the definition 

of “rule” specifically exempts “intra-agency memoranda.”) 

Rather, petitioners cite those documents and communications as “evidence” of the rule, which petitioners describe as 

follows: “It is DEQ’s decision to change that interpretation 

based on a discretionary choice to impose additional oversight to achieve certain policy goals which constitutes the 

‘rule’ under ORS 183.310(9).” Similarly, the Court of Appeals 

concluded that DEQ’s decision to change its interpretation 

was a “new exercise of agency discretion[,] which must be 

promulgated as a rule to be valid.” PNW Metal Recycling, 

Inc., 317 Or App at 212 (internal quotation marks omitted).

As a textual matter, it is doubtful that DEQ’s internal decision about how to interpret the statute—as opposed 

to some expression of that decision—satisfies the definition 

of a rule in ORS 183.310(9). An agency’s internal decision 

about how to construe a statute is not self-executing. ORS 

183.310(9) refers to an “agency directive, standard, regulation or statement of general applicability that implements, 

interprets or prescribes law or policy.” The APA does not 

further define “directive, standard, regulation or statement 

of general applicability,” but those terms appear to contemplate a decision that has been made manifest or apparent 

in some way. In that regard, petitioners argue that DEQ’s 

action can be described variously as a

“‘directive’ (because it directed certain action), a ‘standard’ 

(because it established criteria for whether an auto dismantler needs to apply for a solid waste permit), a ‘regulation’ (because it had the effect of regulating certain auto 

dismantlers by requiring them to apply for a solid waste 

permit), and a ‘statement’ (because its actions were memorialized in at least the 2018 memorandum and in oral 

statements by senior DEQ staff).”

None of those points is implausible. Importantly, however, 

that aspect of petitioners’ argument shifts the focus from 

DEQ’s interpretive decision to the manner in which DEQ 
688 PNW Metal Recycling, Inc. v. DEQ

articulated that decision. Yet petitioners simultaneously 

contend that it is DEQ’s “decision” alone that constitutes the 

rule.

In short, although petitioners rest their arguments 

on ORS 183.310(9), their arguments based on that definition 

are somewhat inconsistent. As a result, that statutory text 

cannot quite support the weight that petitioners place on it. 

More importantly, the definition of “rule” does not exist in 

a vacuum, and the viability of petitioners’ theory ultimately 

depends on whether it comports with the text of the definition when understood in the context of the APA as a whole. 

We turn to that question.

C. Other APA Provisions

As noted earlier in this opinion, agencies are creatures of statute. The legislature, in creating an agency, 

determines what powers the agency will have, including the 

powers of rulemaking, adjudication, or both. Shipley, 326 Or 

at 561; Trebesch, 300 Or at 267. Agencies often (though not 

always) are granted an array of powers that can be described 

as legislative (rulemaking), executive (enforcing statutes 

and rules), and adjudicative (resolving particular cases). An 

agency with rulemaking authority is subject, by default, to 

the procedural requirements of the APA, unless the legislature specifies otherwise. See ORS 183.335 (setting forth 

process for notice, content, and public comment on proposed 

rules). The rulemaking process includes the opportunity for 

the public to provide information to the agency in response 

to proposed rules and for interested parties to request hearings. Id.

Agencies also may have adjudicatory functions. 

Those functions include the authority to hear contested 

cases and “other than contested cases”—to resolve cases 

and issue orders. ORS 183.310(2) (defining “contested case”); 

ORS 183.310(6) (defining “order”). As noted earlier, the APA 

specifically allows agencies to use the contested case process 

to adopt general policies that may be applied prospectively 

to different parties. ORS 183.355(6). The announcement of 

such a general policy may have the hallmarks of a “rule” 

under the APA’s definition of that term, ORS 183.310(9), 
Cite as 371 Or 673 (2023) 689

because it is an interpretation or statement of law or policy 

that will have prospective effect; yet the APA allows such 

statements of policy to be made in a contested case proceeding rather than through rulemaking.

The APA also provides that a person may seek a 

“declaratory ruling” from an agency “with respect to the 

applicability to any person, property, or state of facts of any 

rule or statute enforceable by it.” ORS 183.410. Such rulings 

are specifically excluded from the definition of “rule.” ORS 

183.310(9)(c). Moreover, ORS 183.410 provides that a declaratory ruling is reviewable by the Court of Appeals “in the 

manner provided in ORS 183.480 [(judicial review of agency 

orders)] for the review of orders in contested cases.” The 

APA thus contemplates that a request under ORS 183.410 

is another avenue, in addition to rules and contested cases, 

through which an agency might issue a statement that 

announces or implements an interpretation of law or policy. 

Such statements are reviewable as if they had been issued in 

an order following a contested case proceeding. The legislature has provided distinct paths to judicial review for different types of agency actions.2

 By specifying that declaratory 

rulings and adoptions of policy in connection with contested 

cases are reviewable as orders, the APA makes clear that 

not all announcements and interpretations of law or policy 

are “rules” subject to facial challenge under ORS 183.400.

For those reasons, petitioners’ focus on the various ways in which DEQ’s action is consistent with the APA 

definition of “rule” is incomplete. Petitioners’ arguments 

proceed from the premise that, if an agency makes a policy 

choice, that choice requires rulemaking. But that is not so. 

See Homestyle Direct, 354 Or at 266 (“[T]he APA provides 

that agencies are authorized to adopt general policies that 

2 The APA contains separate provisions for judicial review of rules and 

orders. See ORS 183.400 (review of rules); ORS 183.410 (review of declaratory 

rulings regarding the applicability of a rule or statute to an adverse party); ORS 

183.482 (review in contested cases); ORS 183.484 (review in other than contested 

cases); see also ORS 183.400(1) (stating that a person may not bring a rule challenge under that statute “when the petitioner is a party to an order or a contested case in which the validity of the rule may be determined by a court”); ORS 

183.400(2) (providing mechanism—separate from that which allows a party to 

challenge a rule in the Court of Appeals under ORS 183.400(1)—through which 

a party can challenge a “rule” during an enforcement proceeding). 
690 PNW Metal Recycling, Inc. v. DEQ

otherwise would qualify as ‘rules’ during contested case 

proceedings, without going through notice-and-comment 

rulemaking.”).3

D. Case Law

As just explained, the APA provides that rulemaking and contested case proceedings are both avenues through 

which agencies may announce policy. That is not to say that 

agencies may freely choose between those mechanisms. In 

several cases, this court has addressed the circumstances 

in which agencies must engage in rulemaking as a predicate to enforcement. Those cases arose in a different posture 

than this one: They involved judicial review of a contested 

case rather than a rule challenge. Nevertheless, because the 

administrative law principles discussed in those cases provide helpful context for understanding and resolving petitioners’ arguments in this case, we discuss them below.

The question of whether and when an agency must

use rulemaking proceedings was first addressed in Megdal 

v. Board of Dental Examiners, 288 Or 293, 605 P2d 273 

(1980). In Megdal, the board revoked the petitioner’s license 

to practice dentistry pursuant to the board’s statutory 

authority to regulate the profession and discipline licensees 

for “unprofessional conduct.” 288 Or at 295. The statute did 

not define “unprofessional conduct”; although the board had 

rulemaking authority, the board also had not promulgated 

rules defining that term.

This court concluded that the undefined term 

“unprofessional conduct” reflected a delegation from the legislature to the board “to expand the list of conduct deemed 

unprofessional for disciplinary purposes by rules.” Id. at 

316. We further reasoned that the board could lawfully have 

interpreted “unprofessional conduct” to include the type of 

fraudulent business practice in which the petitioner had 

engaged. But because the board had not done so, no source 

3 This point should not be taken to mean that if an agency chooses the 

rulemaking path when it could have chosen a different path, it may be excused 

from complying with applicable rulemaking procedures. Situations may arise 

in which an agency chooses to announce policy through a rule even though the 

agency could have used the contested case process. If the agency chooses to 

announce a rule, it must act consistently with the APA in doing so. 
Cite as 371 Or 673 (2023) 691

of law permitted the sanction. See id. at 321 (“No such rule 

having been made to proscribe the kind of conduct charged 

against petitioner, there was no legal ground on which to 

revoke his license.”). In short, Megdal held that the statute 

in question delegated a policymaking function to the board, 

which could not be exercised in the first instance through 

adjudication.

Two years after Megdal, this court decided Ross v. 

Springfield School Dist. No. 19, 294 Or 357, 657 P2d 188 

(1982), a teacher discipline case. After being terminated 

from the Springfield School District, the petitioner sought 

review by the Fair Dismissal Appeals Board (FDAB) under 

ORS 342.905, which affirmed the dismissal. Id. at 359. 

Before this court, the petitioner argued that “prior rulemaking pursuant to the [APA] is required under [Megdal] before 

the FDAB may engage in adjudication in individual cases.” 

Id. at 367. We disagreed, explaining that Megdal involved 

statutory terms of “delegation,” whereas FDAB’s statutory authority was merely “interpretive.” Id. We concluded, 

“When applying terms of complete legislative expression, 

an agency may interpret statutory standards either by an 

interpretive rule or by order in a contested case.” Id. at 368-

69 (emphases added).

In Trebesch, we further refined the analysis for 

determining whether prior rulemaking was required. In 

that case, the claimant was denied unemployment benefits 

based on the agency’s determination that the claimant had 

not fulfilled the statutory requirement of a “systematic and 

sustained effort to obtain work.” 300 Or at 266. On judicial 

review, the claimant argued that the Employment Division 

was required to have promulgated a rule defining that statutory phrase before using it as a basis to deny benefits in 

an individual case. The claimant argued that the phrase 

was “unavoidably delegative,” id. at 269, such that rulemaking was required under Megdal. The agency relied on Ross, 

arguing that the agency’s role was limited to interpreting 

the phrase. Trebesch, 300 Or at 269-70.

Although that dichotomy had its origins in 

Megdal and Ross, we explained that the analysis was more 

nuanced—whether rulemaking was required could not be 
692 PNW Metal Recycling, Inc. v. DEQ

determined solely by characterizing the statutory term as 

delegative or not:

“[C]ategorizing a statutory term for purposes of the scope 

of judicial review does not by itself compel a particular consequence with regard to rulemaking.

“*****

“Megdal does not mean that all terms delegating policymaking discretion can be applied only after rulemaking. Nor does Ross mean that terms delegating interpretive 

responsibility may always be applied as the agency chooses, 

either by rule or by adjudication. Both cases address only 

the requirement for rulemaking in the individual agencies 

at issue in the cases.

“It is always possible for the legislature explicitly to 

require an agency to define any type of statutory term by 

rulemaking. * * * In the absence of an explicit directive, the 

breadth and kind of responsibility delegated to the agency 

by the statutory term (fact-finding, applying an ambiguous law, or developing policy) will be one, but not a dispositive, factor which may indicate an implicit directive from 

the legislature for rulemaking. In addition, the tasks the 

agency is responsible for accomplishing, and the structure 

by which the agency performs its mandated tasks, all of 

which are specified in an agency’s authorizing legislation, 

must be examined as a whole in order to discern the legislature’s intent with regard to rulemaking.”

Trebesch, 300 Or at 269-70. Trebesch held, in short, that 

whether an agency is required to take action through 

rulemaking as opposed to another path is a function of how 

the legislature intended for that agency to perform the task 

in question, as reflected in the agency’s enabling statutes.

We applied the Trebesch analysis three years later 

in Forelaws on Board v. Energy Fac. Siting Council, 306 Or 

205, 760 P2d 212 (1988). That case presented the question 

whether the Energy Facility Siting Council (EFSC) had 

lawfully determined that a company’s industrial waste 

was not “radioactive waste” under ORS 469.300(17). Id. at 

207. By rule, EFSC had defined “thresholds of radioactivity 

that pose hazards to public health,” and the legislature had 

incorporated those standards into the statutory definition 
Cite as 371 Or 673 (2023) 693

of “radioactive waste.” Id. at 215. At issue in Forelaws was 

EFSC’s application of those statutory standards to “evaluations of radon-222 concentrations.” Id. at 213. EFSC had 

announced that application in “interpretive rulings,” and 

the petitioners argued that EFSC was required to have done 

so through formal notice-and-comment rulemaking. Id. We 

explained that “EFSC’s interpretations of [the standard] 

are within the APA’s definition of ‘rule,’ and EFSC could

have made these interpretations in rulemaking proceedings 

under the APA.” Id. at 213-14. We also observed that, under 

ORS 183.355(6),

“an agency may sometimes, in the course of deciding a contested case, state propositions that it also could adopt in 

rulemaking proceedings. If an agency is required to adopt 

a rule through rulemaking proceedings, that requirement 

must be found through an analysis of the specific statutory 

scheme under which an agency operates and the nature of 

the rule that the agency wishes to adopt.”

Id. at 214 (citing Trebesch, 300 Or at 267). We ultimately 

concluded in Forelaws that, although EFSC’s enabling statutes gave the agency “broad authority to set policies,” which 

suggested a legislative intent to require rulemaking, the 

particular issue in Forelaws involved a narrower question 

on which the legislature had already made a complete policy 

choice, with EFSC’s role being limited to interpretation. Id. 

at 215-16.

In sum, “[w]hether an agency is required to adopt a 

policy that qualifies as a ‘rule’ solely by means of rulemaking procedures depends on whether the legislature has 

declared that rulemaking is the sole acceptable means of 

adopting the particular policy at issue.” Homestyle Direct, 

354 Or at 266 (emphasis in original). That determination, 

in turn, requires “analysis of the specific statutory scheme 

under which an agency operates and the nature of the rule 

that the agency wishes to adopt.” Forelaws, 306 Or at 214.

Importantly, the APA itself, including its definition 

of “rule,” is of no help in resolving whether the agency must 

engage in rulemaking as a predicate for enforcement and 

adjudication. As to that question,
694 PNW Metal Recycling, Inc. v. DEQ

“[t]he answer is not found in the constitution, *** or in a 

common law, that is, a judge-made common law of administrative agencies; nor may it be divined from the state 

administrative procedures act, * ** which does no more 

than set uniform procedures for state agencies. Rather, 

the answer is a matter of statutory interpretation, the relevant statutes being those regulating the particular agency 

whose action is challenged. We seek to derive the legislature’s intent from an analysis of the statutes by which a 

particular agency operates. The authorizing statutes will 

specify whether rulemaking or adjudication authority, or 

both, are delegated to the agency and will indicate the 

agency’s tasks, the breadth of the agency’s discretion to 

carry out these tasks, and the process by which they are to 

be accomplished.”

Trebesch, 300 Or at 267.

The foregoing cases also instruct that, in determining the legislature’s intent as to whether rulemaking is 

required, the nature of the statutory terms being applied is 

especially important, though not dispositive. Where a statutory term is delegative and the agency has broad rulemaking authority, that has supported a conclusion that the 

legislature intended for the agency to engage in rulemaking. Forelaws, 306 Or at 214. Where an agency’s rulemaking authority is more circumscribed or where a statutory 

term calls only for interpretation and application, that has 

supported a conclusion that rulemaking was not required, 

absent some contrary indication of the legislature’s intent. 

Coffey v. Board of Geologist Examiners, 348 Or 494, 502-03, 

235 P3d 678 (2010).

We have referred to statutory terms calling for 

interpretation and application as either “exact” or “inexact” terms, both of which charge an agency with carrying 

out the legislature’s complete expression of policy, as compared to “delegative terms,” which “delegate” some level of 

policymaking authority to an agency. Springfield Education 

Assn. v. School Dist., 290 Or 217, 224-26, 228, 621 P2d 

547 (1980). Exact terms “impart relatively precise meaning” and involve agency factfinding. See id. at 223-24 (giving examples of exact terms as “21 years of age, male, 30 

days, Class II farmland, rodent, Marion County”). “Inexact 
Cite as 371 Or 673 (2023) 695

terms,” on the other hand, are still a “complete” expression 

of policy, but are less precise. Id. at 224. An inexact term 

often requires an agency to determine what the legislature 

intended by the term, and that determination is a question 

of law. Id. In Coffey, we explained that Megdal’s requirement 

for rulemaking prior to adjudication had been applied to an 

incomplete legislative policy, whereas Coffey presented an 

expression of “complete” legislative policy. Coffey, 348 Or at 

502-03. That complete legislative policy was expressed as a 

list of four sanctions, graduated in severity. Because imposing one sanction from a menu of sanctions was more analogous to interpreting and applying law than to making new 

law, no prior rulemaking was required. Id. at 503.

Those cases demonstrate that, when this court has 

determined that the legislature intended for an agency to 

engage in rulemaking before adjudication, an important 

factor has been our conclusion that the statute required the 

agency to formulate policy to fill in an incomplete expression by the legislature. By the same token, when a statute 

reflects a complete policy statement by the legislature, such 

that the agency’s function has been merely interpretive, that 

has been a reason to conclude that the agency could state its 

interpretation during enforcement and adjudication without 

first promulgating a rule.

E. Summary

With the foregoing principles in mind, we return 

to the reasoning by which petitioners argue, and the Court 

of Appeals concluded, that DEQ adopted a rule. As noted 

above, petitioners do not identify any specific statement or 

communication by DEQ as the “rule” but contend, instead, 

that the rule consists of DEQ’s internal “decision” to adopt 

a new interpretation of the auto-dismantler exception—a 

decision that reflects a “discretionary choice” that DEQ 

made for “policy” reasons. Necessarily, therefore, petitioners 

distinguish DEQ’s decision from an adoption of policy that 

an agency may permissibly make in a contested case proceeding under ORS 183.355(6). Similarly, although it did not 

address ORS 183.355(6), the Court of Appeals relied on its 

own case law to conclude that DEQ’s new interpretation of 

the auto-dismantler exception demonstrated that multiple 
696 PNW Metal Recycling, Inc. v. DEQ

interpretations were “reasonable”; and, because the agency’s 

new interpretation was not “necessarily required” by the 

statute itself, it was therefore a “policy-based decision” and 

a “new exercise of agency discretion” that could only occur 

through rulemaking. PNW Metal Recycling, Inc., 317 Or App 

at 212-13.

Those analyses flow from premises that are flawed. 

First, the focus on the fact that DEQ adopted different 

interpretations at different times, and on DEQ’s reason for 

making the change, is misplaced. Petitioners assume from 

the fact that DEQ desired a change in policy that the statute authorized DEQ to make a discretionary policy choice 

and that DEQ had to effectuate that choice in a particular manner—but neither assumption is necessarily correct. 

That the text of a statute is amenable to multiple interpretations does not mean that an agency has been delegated the 

authority to choose among them. Whether that is so depends 

on whether the statutory wording is inexact or delegative. 

A statute with inexact terms may be subject to alternative 

plausible interpretations, but the meaning of those terms is 

still a question of law, not agency prerogative. Springfield 

Education Assn., 290 Or at 224.

Relatedly, the fact that DEQ interpreted the 

auto-dismantler exception differently before and after 2018 

does not establish that the statute confers “discretion” on 

the agency to make a policy choice. Delegative and inexact 

terms both require further interpretive work by an agency, 

but only the former entail policymaking. Coffey, 348 Or at 

502-03, 508. Thus, although it is true that DEQ adopted different interpretations of the auto-dismantler exception at 

different times, it does not follow that the statute confers 

discretion on DEQ to make a policy decision. If the statute 

contains inexact rather than delegative terms—a question 

not addressed by the parties and which we do not resolve 

today—then DEQ’s revised interpretation is either correct 

or incorrect as a matter of law. And that is so regardless 

of whether DEQ had “policy-based” or “regulatory” motives 

for revising its interpretation. If a reviewing court were to 

conclude that the auto-dismantler exception reflects a complete expression of legislative policy, then DEQ’s current 
Cite as 371 Or 673 (2023) 697

interpretation would stand or fall on its merits; neither 

DEQ’s reason for adopting it, nor the fact that DEQ previously interpreted it differently, would be of any moment.

In addition, even assuming that DEQ’s new interpretation of the auto-dismantler exception is fairly characterized as an exercise of delegated policymaking rather 

than interpretation of an inexact statutory term—a question that, we reiterate, has not been developed and is not 

squarely presented here—the legislature did not intend for 

rulemaking to be the path for every adoption of policy by 

an agency. A conclusion that rulemaking is required must 

be based on detailed analysis of the substantive statutory 

scheme; the APA does not provide an answer. Trebesch, 300 

Or at 267. Petitioners have not developed an argument—

rather, they appear to have assumed—that the statutes 

addressing solid waste disposal reflect a legislative intent 

that the interpretation and application of the auto-dismantler exception must occur through rulemaking rather than 

through a contested case as allowed by ORS 183.355(6). That 

question is critical, however: If the legislature did not intend 

to require rulemaking on that issue, then, under our case 

law, the agency is permitted to make its decision through 

the contested case process. Although we need not resolve 

that question now, we observe that the parties’ apparent 

agreement that DEQ lacks rulemaking authority in this 

area would seem to cut against a conclusion that the legislature intended to require rulemaking as a prerequisite for 

interpreting the auto-dismantler exception.4

F. Petitioners Have Not Identified a “Rule” Subject to Review 

Under ORS 183.400

In sum, if DEQ’s decision to reinterpret the 

auto-dismantler exception constitutes a rule, it is not for all 

the reasons petitioners have argued. Neither the fact that 

DEQ has adopted different interpretations nor DEQ’s reason for making the change bears on whether rulemaking 

4 Petitioners might argue that the statutory scheme contemplates that the 

required rulemaking be done by EQC, the entity that provides policy direction 

to DEQ. That may be true; on the other hand, the solid waste disposal statutes 

specifically direct DEQ to take certain actions regarding the issuance of permits, 

and it is not clear that those directives are conditioned on whether any rules have 

been promulgated by EQC. In any event, we need not resolve that issue here. 
698 PNW Metal Recycling, Inc. v. DEQ

was required or whether DEQ’s action here was a rule. To 

the extent that petitioners contend that a rule challenge 

under ORS 183.400 must be available to review an agency’s 

policy choice, that view is mistaken for the reasons we have 

explained; review of an order in a contested case is another 

mechanism. Stripped of those considerations, petitioners’ 

argument reduces to the proposition that DEQ’s interpretive 

choice itself is a “rule” as defined by ORS 183.310, such that 

it may be challenged in a proceeding under ORS 183.400. 

For several reasons, that proposition is wrong.

Once again, ORS 183.310(9) states that, subject to 

exceptions, a rule is “any agency directive, standard, regulation or statement of general applicability that implements, 

interprets or prescribes law or policy, or describes the procedure or practice requirements of any agency[.]” Several 

exceptions are of note here. First, ORS 183.310(9)(d) exempts 

“[i]ntra-agency memoranda.” Second, ORS 183.310(9)(a) 

exempts “internal management directives, regulations or 

statements which do not substantially affect the interests of 

the public.” Third, ORS 183.310(9)(c) exempts “[d]eclaratory 

rulings issued pursuant to ORS 183.410[.]” ORS 183.410 

provides that, “[o]n petition of any interested person, any 

agency may in its discretion issue a declaratory ruling with 

respect to the applicability to any person, property, or state 

of facts of any rule or statute enforceable by it.” Such rulings 

are reviewable by the Court of Appeals in the same manner 

as orders in contested cases. Id.

With those exceptions in mind, along with the other 

principles discussed above, we conclude that petitioners have 

not identified a rule. As explained earlier in our discussion 

of the text of ORS 183.310(9), an agency’s interpretive decision, standing alone, is an awkward fit with the definition’s 

reference to a “directive, standard, regulation or statement.” 

Moreover, DEQ has yet to take any action that is “generally 

applicable” in the sense meant by ORS 183.310(9). Arguably, 

DEQ’s interpretive choice can be thought of as generally 

applicable in the sense that DEQ has an apparent intention 

to apply it to petitioners and similarly situated entities in the 

scrap-metal recycling industry. But in light of the APA as a 

whole, “applicable” in this context must require something 
Cite as 371 Or 673 (2023) 699

more than an agency’s prospective intent. See Webster’s 

Third New Int’l Dictionary 105 (unabridged ed 2002) (defining “application” as “employment as a means: specific use”). 

If DEQ had done nothing more than circulate an internal 

agency memo announcing a revised interpretation of the 

auto-dismantler exception, that memo would be generally 

applicable in the same sense that petitioners urge here, but 

it would not be a “rule,” because intra-agency memoranda 

are specifically excluded from the definition. Deeming the 

“decision” itself to be the rule in that situation would undermine the point of the exception that allows the agency to 

announce its decision internally. Moreover, it would be peculiar if the interpretive choice reflected in the memo constituted a rule while the expression of that choice in the memo 

did not. By referring to statements, directives, regulations, 

or standards of “general applicability” and excluding intraagency memoranda and “internal management directives, 

regulations or statements which do not substantially affect 

the interests of the public,” the definition of “rule” contemplates an expression of an agency decision that has “general 

applicability” in the sense that it is made operative—i.e., the 

agency somehow has communicated the decision in a way 

that purports to bind those subject to it.

In addition, if petitioners’ view was correct, that 

would frustrate the provisions of the APA making clear that 

an agency may use the contested case process to interpret 

statutes and adopt policy. An agency’s use of ORS 183.355(6) 

as the means to state an interpretive choice will, presumably, be preceded by the choice itself. On that point, petitioners advance a curious argument. They acknowledge that 

ORS 183.355(6) allows an agency to interpret a statute in a 

contested case proceeding, but they argue that, if the decision to adopt that interpretation precedes the contested case 

proceeding and is made “for policy or regulatory reasons,” 

then the action requires rulemaking.

That distinction is untenable. Petitioners seem to 

suggest that the APA allows agencies to interpret a statute 

or announce policy through the contested case process only 

so long as the agency does so without forethought, and without a “policy or regulatory” purpose. That is not a realistic 
700 PNW Metal Recycling, Inc. v. DEQ

account of how agencies operate. The APA requires agencies 

to give notice to affected parties before beginning a contested 

case, ORS 183.413, and we presume that, in the ordinary 

course, agencies will decide what a statute means before they 

prosecute violations of it. Petitioners’ argument that such a 

decision requires rulemaking would nullify the provisions of 

the APA that allow agencies to use the contested case process for “adoption of a general policy applicable to the case 

and subsequent cases of like nature.” ORS 183.355(6).

Finally, petitioners’ argument that an interpretive 

choice is a “rule” is difficult to square with a provision they do 

not address—ORS 183.310(9)(c), which exempts “declaratory 

rulings” from the definition of rule. ORS 183.410, as noted 

earlier, allows an interested person to request an agency’s 

ruling “with respect to the applicability to any person, property, or state of facts of any rule or statute enforceable by 

it.” Such a ruling is subject to judicial review—but, significantly, in the manner afforded to final orders in contested 

cases. ORS 183.410. Just as with ORS 183.355(6), therefore, 

an agency’s declaration about a statute’s applicability is not 

necessarily reviewable as a rule. That is further evidence 

that the agency’s internal decision about how to interpret 

the statute—which will necessarily precede any declaratory 

ruling under ORS 183.410—is not a rule, either.

For the foregoing reasons, we conclude that an 

agency’s interpretive decision is not, itself, a rule, although 

the generally applicable expression of such a decision could 

be.5

 Here, however, DEQ did not communicate its decision to 

anyone but petitioners. DEQ’s revised interpretation of the 

auto-dismantler exception and its stated intention to require 

petitioners to obtain a permit are, at this point, precursors 

to DEQ’s initiation of an enforcement action that may lead 

to a contested case proceeding.

Judicial review of a final order in a contested case 

would present an opportunity for petitioners, should they 

5 Petitioners correctly point out that the Oregon APA differs from the federal Administrative Procedures Act in that regard. The federal APA specifically 

exempts “interpretative rules” from rulemaking requirements. 5 USC § 553(b); 

Perez v. Mortgage Bankers Ass’n, 575 US 92, 96-97, 135 S Ct 1199, 191 L Ed 2d 

186 (2015). The Oregon APA contains no such exemption; on the contrary, the 

definition of “rule” encompasses statements that “interpret” law. ORS 183.310(9).
Cite as 371 Or 673 (2023) 701

wish, to argue that DEQ’s revised interpretation of ORS 

459.005(8)(b)(D) is incorrect as a matter of law. Alternatively, 

petitioners may seek to demonstrate, under the Trebesch

line of cases, that the solid waste disposal statutes reflect 

a legislative intent that the agency “promulgate rules in 

advance of adjudication,” 300 Or at 267, i.e., that rulemaking is the required path for adopting an interpretation of 

the auto-dismantler exception. As yet another alternative, 

petitioners may choose to avail themselves of ORS 183.410, 

which enables them to request a “declaratory ruling” from 

DEQ as to the applicability of the auto-dismantler exception. Such a ruling would be reviewable in the manner of a 

final order in a contested case.

For the foregoing reasons, petitioners have failed to 

identify a “rule” subject to challenge under ORS 183.400. 

Accordingly, we vacate the Court of Appeals’ decision and 

dismiss the judicial review.

The decision of the Court of Appeals is vacated. The 

judicial review is dismissed.