Opinion ID: 3134113
Heading Depth: 2
Heading Rank: 2

Heading: APA, ch. 34.05 RCW

Text: Because Brown's petition for judicial review of the Department's denial of her mediation request arises under the APA, ch. 34.05 RCW, we must address the -36- Brown v. Wash. State Dep 't of Commerce, No. 90652-1 impact of our interpretation of the DTA in that context. Appellate courts review an agency's decision de novo and apply the APA 'directly to the record before the agency.' Wash. Indep. Tel. Ass 'n v. Wash. Utils. & Transp. Comm 'n, 149 Wn.2d 17, 24, 65 P.3d 319 (2003) (quoting Tapper v. Emp't Sec. Dep't, 122 Wn.2d 397, 402, 858 P.2d 494 (1993)). Under the APA, a plaintiff may petition for judicial review concerning the lawfulness of an agency's promulgated rules and regulations, RCW 34.05.570(2), of an agency's orders in adjudicative proceedings, id. at (3), and of other agency action, id. at (4). The parties agree that the Department's action is neither a regulation nor an adjudicative order but is other agency action. RCW 34.05.570(4) governs judicial review of other agency action. An agency violates that statute when the agency fail[s] to perform a duty that is required by law, id. at (4)(b), when the agency's actions are [u]nconstitutional, id. at (c)(i), when the agency's actions are [o]utside the statutory authority of the agency, id. at (c)(ii), when the agency's actions are [a]rbitrary or capricious, id. at (c)(iii), and when the agency's actions are [t]aken by persons who were not properly constituted as agency officials lawfully entitled to take such action, id. at (c)(iv). Brown challenges the Department's denial of her request for mediation on all of the grounds except the last. In her three nonconstitutional challenges, Brown simply contends she should prevail if the Court concludes that [the Department's] interpretation of the FFA was erroneous. Reply Br. of Appellant at 13; see also -37- Brown v. Wash. State Dep 't of Commerce, No. 90652-1 generally Br. of Appellant at 34-40; Reply Br. of Appellant at 13-16. Because the Department correctly interpreted the DTA, as described above, the Department did not violate the APA on these three grounds. Brown's final challenge is that the Department's interpretation of the DTA was unlawful agency action under RCW 34.05.570(4)(c)(i) because it was unconstitutional. Brown contends the Department's interpretation of the DTA, which we have adopted, violates the equal protection and due process clauses of the United States and Washington constitutions. U.S. CoNST. amend. XIV,§ 1; WASH. CONST. art. I, §§ 3, 12. Under our interpretation of the DTA, the Department correctly grants or denies mediation based on whether the note holder was the beneficiary in more than 250 residential foreclosures in the state of Washington in the prior year. So interpreted, Brown argues the DTA treats similarly situated homeowners-whose notes are owned by Freddie Mac or Fannie Mae-differently, with no rational basis. Br. of Appellant at 45. According to Brown, access to mediation turns on an irrelevant factor, the identity of the servicer, and is a random lottery. Id. at 45-46. We reject this challenge. As Brown acknowledges, we review the constitutionality of the DTA provisions at issue under the highly deferential standard of rationality review because the provisions are economic legislation that do not involve fundamental rights. Id. at 44. 20 Accordingly, the legislative classification 2 °For this reason, Brown's equal protection and due process arguments are identical in substance, and we do not analyze them discretely. Brown has not identified relevant -38- Brown v. Wash. State Dep 't of Commerce, No. 90652-1 will be upheld unless it rests on grounds wholly irrelevant to achievement of legitimate state objectives, State v. Shawn P., 122 Wn.2d 553, 561, 859 P.2d 1220 (1993), and a statutory classification will be upheld if any conceivable state of facts reasonably justifies the classification, id. at 563-64. A statute is not invalid because it is over- or underinclusive in achieving the legislature's purpose unless no conceivable facts and justifications save the law from being wholly irrational. See Am. Legion Post No. 149 v. Dep 't ofHealth, 164 Wn.2d 570, 609-10, 192 P.3d 306 (2008). Brown is incorrect that the Department's interpretation turns on an an irrelevant factor, the identity of the servicer. Br. of Appellant at 45. As we have explained, that factor is relevant because the servicer holds the note, has authodty to enforce the note, has authority to modify the note, is the person to whom the borrower owes her obligation, and is the person to whom the borrower pays to discharge her obligation. See supra pp. 12-19. The Department's scheme draws a distinction that subjects to mediation only the biggest servicers-i.e., those that were beneficiaries in more than 250 residential foreclosures in the prior year. RCW 61.24.166. The legislature conceivably perceived such servicers to be a major contributor to the foreclosure crisis and conceivably decided that smaller contributors to the foreclosure crisis ought not bear the burdens of mediation. Of course, all numerical cutoffs have arbitrariness. But under rationality review of distinctions between the state and federal constitutions in her challenge, so we decline to assign differences to them here. -39- Brown v. Wash. State Dep 't of Commerce, No. 90652-1 economic legislation, '[i]t is no requirement of equal protection that all evils of the same genus be eradicated or none at all,' Am. Legion Post No. 149, 164 Wn.2d at 609-10 (quoting O'Hartigan v. Dep 't of Pers., 118 Wn.2d 111, 124, 821 P.2d 44 ( 1991)), and the legislature may enact laws that take one step at a time, addressing itself to the phase of the problem which seems most acute to the legislative mind, Williamson v. Lee Optical of Okla., 348 U.S. 483, 489, 75 S. Ct. 461, 99 L. Ed. 563 (1955). We reject Brown's constitutional challenge.