Case Name: VON WEIDLEIN INTERNATIONAL, INC. et al, Petitioners, v. YOUNG et al, Respondents
Court: Oregon Court of Appeals
Jurisdiction: Oregon
Decision Date: 1973-10-03
Citations: 16 Or. App. 81
Docket Number: 
Parties: VON WEIDLEIN INTERNATIONAL, INC. et al, Petitioners, v. YOUNG et al, Respondents.
Judges: Before Schwab, Chief Judge, and Langtry, Foley and Tanzer, Judges.
Reporter: Oregon Reports, Court of Appeals
Volume: 16
Pages: 81–102

Head Matter:
On petitioners’ motion for stay of administrative order of the Oregon Liquor Control Commission, filed September 28,
temporary stay granted October 3,
petitioners’ motion for continuance of stay granted;
respondents’ motion denied October 22,
commission’s order affirmed December 24, 1973,
petition for rehearing denied January 23,
petition for review denied March 5, 1974
VON WEIDLEIN INTERNATIONAL, INC. et al, Petitioners, v. YOUNG et al, Respondents.
514 P2d 560
515 P2d 936
517 P2d 295
Alex L. Parks, White, Sutherland, Parks & Heath, and David F. Bennie, Portland, for the motion.

Opinion:
SCHWAB, C.J.
Petitioners, two Oregon corporations, seek judicial review of orders of the Oregon Liquor Control Commission that cancelled licenses that had previously been issued to them. The Oregon Liquor Control Commission's cancellation orders are, by their terms, effective October 5, 1973. Petitioners have moved for a stay of the Oregon Liquor Control Commission's orders until this court determines the petition for judicial review. At this point the only matter before ns is petitioners' motion for a stay.
License cancellation proceedings before the Oregon Liquor Control Commission are contested cases within the meaning of the Administrative Procedures Act. ORS 183.310 (2) (c). Following an agency decision in a contested case, ORS 183.480 governs judicial review of such a decision. ORS 183.480 (3) provides:
"The filing of the petition [for judicial review] shall not stay enforcement of the agency order, but the agency may do so, or the reviewing court may order a stay upon the giving of a bond or other undertaking or upon such other terms as it deems proper ."
ORS 183.480 (3) grants authority to stay an agency order to both the agency involved and to this court. Does this mean that a party seeking a stay has an unfettered choice of whether to move for a stay before the agency or before this court? We think not. We now hold that ORS 183.480 (3) requires that a party who wants an agency order in a contested case stayed pending judicial review should first move for a stay before the administrative agency that issued that order.
There are numerous advantages to requiring applications for stays to first be presented to the agency involved. The agency will, of course, be much more familiar with the facts. The agency can bring its expertise to bear on questions raised by a motion for a stay, just as the agency brings its expertise to bear on other questions it must decide. Should the agency deny a stay, its order to that effect "may be accompanied by an opinion," ORS 183.470, which could make further consideration of the question of a stay pending judicial review by this court more meaningful. Finally, to paraphrase Morgan v. Portland Traction Co., 222 Or 614, 331 P2d 344 (1958), while a motion for a stay would be addressed to. the sound discretion of the agency, we should not assume that its discretion will be abused. See, 222 Or at 633.
As best can be determined from the motion and supporting exhibits now before us, petitioners did not file a motion for a stay pending judicial review before the Oregon Liquor Control Commission. In the future such a failure will be sufficient grounds to deny a motion for a stay filed in this court. However, since the language of OES 183.480 (3) is relatively new, since that statute does not appear to have been previously interpreted by an appellate court, and since the interpretation we have here adopted is not necessarily the only possible reading of OES 183.480 (3), in this case we will not deny petitioners' motion for a stay because of their failure to first make such an application to the Oregon Liquor Control Commission. Instead, in fairness, we will permit the petitioners to now proceed in accordance with our interpretation of OES 183.480 (3).
Accordingly, petitioners' motion for a stay is granted subject to the following qualifications and limitations:
(1) The stay herein granted is for the purpose of permitting petitioners to file a motion for a stay pending judicial review before the Oregon Liquor Control Commission.
(2) If on or before October 5, 1973, petitioners file such a motion, then this stay shall remain in effect until the motion is decided by the Oregon Liquor Control Commission. If petitioners do not file such a motion, this stay will terminate without further order of this court at 5 p.m. on October 5,1973.
(3) If a stay is granted by the Oregon Liquor Control Commission, then this stay will terminate without further order of this court.
(4) If a stay is denied by the Oregon Liquor Control Commission, then the stay herein granted shall remain in effect pending the further order of this court. In such event, both petitioners and respondents shall file in this court any arguments or other materials relevant to the continuation of this stay. Such materials shall be filed within three days of the Oregon Liquor Control Commission's order denying a stay.
Should it be necessary for this matter to again be submitted to this court, we direct the parties' attention to one other provision of OES 183.480 (3)— ancillary to judicial review of contested cases this court can grant a stay "upon such terms as it deems proper." As a general matter, we believe that one of the minimum terms that would ordinarily be necessary to justify the granting of a stay would be an expedited briefing schedule. Thus, in this case or any other in which a motion for a stay is being sought from or opposed in this court, it would facilitate our consideration of the motion if the parties would state their positions on an expedited briefing schedule, including a suggested timetable therefor.
ON MOTION TO SET ASIDE TEMPORARY STAY
Alex L. Parks, White, Sutherland, Parks & Heath, and David F. Bennie,' Portland, for petitioners.
W. Michael Gillette, Solicitor General, Salem, for respondents.
Before Schwab, Chief Judge, and Langtry, Foley and Tanzer, Judges.
SCHWAB, C.J.
The Oregon Liqnor Control Commission issued orders cancelling petitioners' licenses to engage in various liquor businesses. We issued a temporary stay pursuant to ORS 183.480 (3) for the purpose of permitting petitioners to seek, from the Commission, a stay pending judicial review of those cancellation orders. Von Weidlein/N.W. Bottling v. OLCC, 16 Or App 81, 514 P2d 560 (1973). Petitioners made such a motion before the Commission. The Commission denied that motion. Petitioners' having exhausted their administrative remedy, this matter is now before us again on petitioners' motion to continue the stay and the respondents' motion to vacate the stay.
ORS 183.480 (3) authorizes this court to grant stays pending judicial review of administrative agency orders, but does not specify any standards to govern the granting of stays. Interpreting similar statutes, courts have articulated a variety of standards relevant to the granting of stays. See generally, 2 Cooper, State Administrative Law 627-30; 3 Davis, Administrative Law Treatise 384-85, § 23.19; 2 Am Jur2d, Administrative Law 640-41, § 741; 73 CJS, Public Administrative Bodies and Procedure 526-28, § 180-81. The most often mentioned standards are:
" (1) Has the petitioner made a strong showing that it is likely to prevail on the merits of its appeal? (2) Has the petitioner shown that without such relief, it will be irreparably injured? (3) Would the issuance of a stay substantially harm other parties interested in the proceedings? (4) Where lies the public in terest? Virginia Petroleum Job. Ass'n v. Federal Power Com'n, 259 F2d 921, 925 (DC Cir 1958).
Guided by these statements of other courts, we conclude that the primary standard to govern the granting of stays involves a balancing of interests.
"In determining whether or not to grant a stay, the courts balance the harm that may be suffered by appellant as a result of the enforcement of the agency order, pending appeal, against the public harm that may result from delaying the effective date of the agency order." 2 Cooper, supra, at 629.
A secondary consideration is whether, based on a perusal of the record and without benefit of briefs or argument, the petition for judicial review appears to raise substantial, or at least colorable, legal contentions, or instead appears to be frivolous.
Irreparable Injury. By affidavit accompanying their initial motion for a stay and their motion for a continuance of a stay, petitioners claim that they " have existing and ongoing contracts with wholesale distributors," and that unless the Commission's cancellation orders are stayed they will go bankrupt. The Commission does not dispute these claims. This, although in general terms, is, in the absence of any refutation, a substantial showing of high probability of irreparable injury.
Public Interest. The Commission's motion to vacate the stay does not document any public harm that may result from delaying the effective date of the order cancelling petitioners' licenses. It is apparently not the Commission's position that petitioners have or are now operating their liquor businesses in a manner that is harmful to the health or safety of the people of Oregon; only that petitioners' license applications to the Commission contained material misrepresentations. Moreover, in determining where the public interest lies, it has been noted that:
" [I]n cases involving the revocation or suspension of licenses, strong policy reasons support a rule that (except possibly in cases where an immediate threat to public health or safety is presented) an appeal should serve as an automatic stay 2 Cooper, supra, at 628.
Colorable Claims. Based on a necessarily quick perusal of the record some, but not all, of the legal contentions raised by the petition for judicial review appear to be substantial. Most of the Commission's present arguments are an attempt to prove the contrary. However, this is not the time to finally decide the merits of this ease.
In balancing these respective interests, we bear in mind that under an expedited briefing schedule (discussed below) it is probable that not more than about 60 days will elapse between the filing of a petition for judicial review and our decision on the merits in a case of this type. Given the danger of irreparable injury to petitioners, the apparent absence of any public harm that would be caused by granting a stay, and the non-frivolous nature of petitioners' contentions, we conclude the equities favor granting a stay for this relatively small amount of time.
When this matter was first before us, we noted that ORS 183.480 (3) provides that this court may grant stays "upon such terms as it deems proper," and stated:
" As a general matter, we believe that one of the minimum terms that would ordinarily be necessary to justify the granting of a stay would be an expedited briefing schedule. Thus, in this case or any other in which a motion for a stay is being sought from or opposed in this court, it would facilitate our consideration of the motion if the parties would state their positions on an expedited briefing schedule, including a suggested timetable therefor." 16 Or App at 85.
See also 16 Or App 81, 514 P2d 560, 16 Or App 85, 515 P2d 936.
In accordance with the views expressed at that time, petitioners have suggested an expedited briefing schedule. The Commission has not taken any position on expedited briefing. We adopt, in general, the schedule suggested by petitioners and continue the stay granted herein on condition that petitioners' brief is filed on or before November 2, 1973. Respondents' brief shall be filed on or before November 26,1973 and, if so filed, oral arguments will be held on November 27, 1973.
Petitioners' motion to continue the stay is granted in accordance with this opinion. Respondents' motion to vacate the stay is denied.
ON JUDICIAL REVIEW
Alex L. Parks, Portland, argued tbe cause for petitioners. With him on the brief were White, Sutherland, Parks & Heath and David P. Rennie, Portland.
W. Michael Gillette, Solicitor General, Salem, argued the cause for respondents. With him on the brief were Lee Johnson, Attorney General, John E. Moore, Chief Counsel, Criminal Justice & Special Investigation Division, and Al J. Laue, Assistant Attorney General, Salem.
Before Schwab, Chief Judge, and Thornton and Tanzer,' Judges.
TANZEP, J.
This is a proceeding for judicial review of orders of the Oregon Liquor Control Commission which can-celled petitioners' liquor licenses. Petitioner Von Weidlein International, Inc.'s license entitled it to sell and distribute beer and wine, and petitioner Northwest Bottling Company had a distiller's license. Since the orders of cancellation were identical in substance, we consider them together.
The proceedings to revoke petitioners' licenses were brought pursuant to OPS 471.315 (1) (b), which provides that " [t]he commission may cancel or suspend any license if it finds or has reasonable ground to believe [t]hat the licensee [h]as made any false representation or statement to the commission in order to induce or prevent action by the commission." In addition to their basic contention that there is insufficient evidence to support the commission's finding that they made such false representations or statements, petitioners raise two threshold constitutional issues.
First, petitioners contend that OPS 471.315 (1) (b) is unconstitutionally vague and ambiguous in that it does not specifically require that the false representations or statements be "material" or that they be .made "intentionally." This contention is based on the premise that the subsection.is essentially a codification of common law fraud, and that the existence of an intentional, material misrepresentation, relied upon by the commission, is an integral element thereof.
The statute has previously been construed to require that the misrepresentation be material. Hart v. Oregon Liquor Control Com., 181 Or 406, 409, 182 P2d 364 (1947). We do not construe the statute to require that the misrepresentation be intentional. If an innocent but material misrepresentation were instrumental in the commission's decision to grant a license, it would be reasonable to allow the commission to revoke its decision when it found that the facts were not as represented.
Petitioners' contention that the statute is a codification, of common law fraud and that revocation would be permissible only if the commission had in fact relied on the misrepresentation to its detriment, cf. Conzelmann v. N. W. P. & D. Prod. Co., 190 Or 332, 225 P2d 757 (1950), is incorrect. The statute permits revocation' based on any misrepresentation made "in order to induce or prevent action by the commission." The evil aimed at by the statute is the possibility that the commission may be misinformed. It is not required that the commission actually believe the erroneous information. That being so, it is clear that the statute was not intended to be circumscribed by the elements of common law fraud.
Petitioners' second preliminary attack is upon the constitutionality of OES 471.290 (1) which provides that a person applying for a liquor license may be compelled as a prerequisite to provide to the commission the following information:
" the name and address of the applicant, his citizenship, location of the place of business which is to be operated under the license, and such other pertinent information as the commission may require. "
Petitioners contend that the phrase "such other pertinent information as the commission may require" is unconstitutional, presumably because it is so vague as to constitute an improper delegation of authority. In the alternative, they argue that because the Oregon Liquor Control Commission has not promulgated administrative rules as to what constitutes "other pertinent information," it may not require the disclosure of information other than name and address, citizenship, location, and similar matters.
In approaching this issue, we note the basic rule that when a statute is challenged as unconstitutionally vague, the first duty of a court is to interpret the statute, if possible, in a manner which will result in its being upheld. City of Portland v. White, 9 Or App 239, 495 P2d 778, Sup Ct review denied (1972). Thus, we do not search for intolerable lengths to which the unconstrued statute might be extended; rather, we attempt to confine the broad language within reasonable bounds and thereby give effect to its provisions.
A statute granting administrative powers is sufficient if it provides guidance to the agency to which is delegated the duty to apply the statute. Bergford v. Clack. Co./Trans. Serv., 15 Or App 362, 515 P2d 1345 (1973). The information sought by the commission and furnished by petitioners all comes within the meaning of ORS 471.295 (4) (c), (f) and (i), which enables the commission to deny a license if it finds that the applicant has been convicted of a felony, that he is not of good repute and moral character, or that he is not financially responsible. In short, OES 471.290 authorizes the commission to require sufficient information to enable it to perform its duty under OES 471.295.
Petitioners also argue that the commission may not require "other pertinent information" because it has not promulgated administrative regulations. While it is clear that the commission cannot deny a license without first establishing regulatory standards, Sun Ray Dairy v. OLCC, — Or App —, 517 P2d 289 (1973), the information at issue in this case was obtained pursuant to a specific statutory mandate, and the existence or not of regulations is not material. Furthermore, petitioners' complaint comes late. The information was given without complaint or protest, the licenses were granted, and petitioners received the benefit of the law they now challenge. The significant question at this stage of the proceedings, under OES 471.315 (1) (b) which specifically authorizes the cancellation of a license once granted, is the truth or falsity of petitioners' representations.
Petitioners' major contention on appeal is that the commission's findings of fact which were the basis for the orders of cancellation are not supported by substantial evidence. There are nine findings of fact. Findings 1, 2 and 3 relate to representations made by Mr. Charles Weidlein, president of petitioner corporations, as to the business history of petitioner Von Weidlein International, Inc. Findings 4, 5, 6 and 7 relate to representations made by Mr. Weidlein as to his personal data-; Finding No. 8 is that the representations were made wilfully and with the intent that the commission rely upon them, and finding No. 9 is that the commission did in fact rely upon the representations.
With regard to the first group of representations, the evidence produced at the hearing showed that among the items supplied to the commission by Mr. Weidlein in support of the license applications was a three-page document entitled "History of Business," which purported to summarize the business history of Von Weidlein International, Inc. Eepresentations contained in that document constituted the basis for findings of fact 1 through 3.
Finding of fact No. 1 is that Mr. Weidlein falsely represented Von Weidlein International, Inc. to be "a recognized international pharmaceutical house and surgical supply firm specializing in export of pharmaceuticals for human and veterinary use and of surgical and medical supplies." A reading of the "History of Business" document. makes- it clear that this repre sentation was made. The only question is whether the representation was false. The secretary-treasurer of both petitioner corporations testified that the firms had not exported anything, and that they had never had any accounts receivable in connection with importing or exporting activity. Mr. Weidlein testified that the only thing ever imported was a number of acupuncture needles, with a total value of $250. While there is some room for disagreement as to the interpretation to be placed on the statement that a firm "has been recognized as an international pharmaceutical house specializing in export," it cannot be seriously contended that that statement accurately describes the business operations of Yon Weidlein International, Inc. There is substantial evidence to support the commission's finding that that representation was false.
Finding of fact No. 2 is that Mr. Weidlein falsely represented that Yon Weidlein International, Inc. exports products under agreement with ten named firms. Again, there is no contention that the representation was not made, and the only issue is that of falsity. Neither Mr. Weidlein nor the secretary-treasurer of Yon Weidlein International, Inc. could point to any actual exporting done for any of the ten firms. The only thing that could possibly be construed as an export agreement was an "agreement in principle" with one of the firms to do exporting in the future. When asked what was meant by Ms representation that "Yon Weidlein International exports," Mr. Weidlein responded:
"That means that we are capable and have the connections to export these products. When you read a sign, if a guy builds a new Chevrolet dea'lersMp, puts a sign up that says in the paper, T sell Chevrolets,' does that mean he has sold one? I don't know. I'm not an attorney."
The commission's finding that Mr. Weidlein's representations as to his company's business arrangements were false is supported by substantial evidence in the record.
Finding of fact No. 3 is that Mr. Weidlein falsely represented that Von Weidlein International, Inc. exports various items from the People's Republic of China, West Germany and Mexico. The evidence shows that the firm had an agreement with one of the two West German firms listed in the "History of Business," but that the Food and Drug Administration prevented any import/export activities between them. There is no evidence that Von Weidlein exported anything from the other West German firm or from Mexico. As to exports from China, this refers to acupuncture needles, the extent of which business is discussed above under finding of fact No. 1. The use of the word "exports" connotes an existing business activity. The disparity between what was represented and what was shown to be the ease constitutes substantial evidence to support the commission's finding that the representations were false.
Finding of fact No. 4 is that Mr. Weidlein falsely represented that he had acted as consultant to presidents of the United States. In one of the documents submitted to the commission in support of petitioners' license applications, Mr. Weidlein stated that he had served as "consultant" to 55 different entities, including companies, states, federal agencies, and presidents of the United States. At the hearing Mr. Weidlein testified that he had met Presidents Eisenhower and Kennedy on one occasion each, but these were apparently chance encounters while Mr. Weidlein was discussing matters with presidential staff personnel. Mr. Weid lein conceded at the hearing that it would have been more accurate to characterize himself as a consultant to "the presidents' offices," rather than to presidents. While this representation was a stretching of truth, obviously designed to portray Mr. Weidlein as a man of prominence and influence, the commission concedes that this misrepresentation would not by itself justify revocation of petitioners' licenses. However, considered together with the other, more serious misrepresentations made by Mr. Weidlein, it is significant.
Finding .of fact No. 6 relates to the same representation as did finding No. 4. In addition to stating that he had served as consultant to presidents of the Hnited States, Mr. Weidlein represented that he had served as a consultant to 54 companies, states, federal agencies, and foreign countries. This representation was found to be false by the commission. At the hearing, Mr. Weidlein testified that he had been compensated for his services by only 11 of the named entities. He was given an opportunity to explain what he had done as a non-paid consultant in the other 43 situations, but did so as to only one of the 43. Thus, there was substantial evidence to support the finding that Mr. Weidlein had misrepresented his consulting experience.
Finding of fact No. 5 is that Mr. Weidlein falsely represented to a commission officer that he had had only one arrest (NSF check), when in fact he had two such arrests. There was a direct conflict in the testimony on this point. Mr. Weidlein claimed that he told the commission officer about both arrests, while the officer testified that he specifically asked Mr. Weidlein whether he had been arrested at any time other than the- occasion which he acknowledged, and that Mr. Weidlein replied "No." Where there is such a conflict in evidence, there is necessarily substantial evidence to support the commission's finding.
Finding of fact No. 7 is that Mr. Weidlein misrepresented Ms date of birtb. There is no dispute but that Mr. WeidleM did list an Mcorrect birth date. As with the finding regarding consultation to presidents of the United States, the commission concedes that this might not be a basis for revocation by itself, but that it is material when considered together with all of Mr. Weidlem's other misrepresentations.
Findings of fact 8 and 9 are, respectively, that the above misrepresentations were made intentionally and that the commission relied upon the misrepresentations in granting the licenses. While these findings were unnecessary to a revocation, there is substantial evidence to support each of them.
Petitioners' final assignment of error relates to certain procedural irregularities in the proceedings following the revocation hearing. Specifically, petitioners complain that the commission did not make and serve upon them proposed findings of fact and conclusions of law as required by ORS 183.460. The parties stipulated at oral argument that each member of the commission had read the whole record. Therefore, ORS 183.460 is not applicable.
Affirmed.
ORS 471.290 (1) provides:
"(1) Any person desiring a license or renewal of a license shall make application to the commission upon forms to be furnished by the commission showing the name and address of the applicant, his citizenship, location of the place of business which is to be operated under the license, and such other pertinent information as the commission may require. No the Liquor Control Act and the regulations of the commission license shall be granted or renewed until' the provisions of have been complied with."
ORS 471.295 (4) (c), (f) and (i) provides:
"The commission may refuse to license any applicant if it has reasonable ground to believe any of the following to be true:
"(4) That the applicant:
<1
"(c) Is not a citizen of the United States, or is incompetent or physically unable to carry on the management of the establishment proposed to be licensed.
"(f) Is not of good repute and moral character.
<<:H # :¡: *
"(i) Is not possessed of or has not demonstrated financial responsibility sufficient to adequately meet the requirements of the business proposed to be licensed."
ORS 183.460 provides:
"Whenever in a contested case a majority of the officials of the agency who are to render the final order have not heard the case or considered the record, the order, if adverse to a party, but not including the agency itself, shall not be made until a proposed order, including findings of fact and conclusions of law, has been served upon the parties and an opportunity has been afforded to each party adversely affected to file exceptions and present argument to the officials who are to render the decision, Who shall in such case personally consider the whole record or such portions thereof as may be cited by the parties.'*