Opinion ID: 1393084
Heading Depth: 1
Heading Rank: 2

Heading: hearings

Text: Hearings are conducted by the State Engineer or his duly authorized assistant in the manner of a court of equity except that the hearing is less formal. At such hearing whatever evidence, including the testimony of witnesses, as may be essential to the clear understanding of all matters involved may be taken. After the conclusion of the hearing, the State Engineer enters an order disposing of the matter, copies of which are mailed to the parties involved. Such order of the State Engineer is subject to appeal to the circuit court of the county in which the waters or any portion of such waters involved in the matter are located, within 30 days after the date of such order. If the procedure established through administrative rules and regulations were regarded as providing the equivalent of a trial before a judicial tribunal then ORS 537.200 permitting an appeal from the order of the State Engineer would give the circuit court jurisdiction of the cause upon which issue had been formed at the administrative stage. But it was established in Broughton's Estate v. Central Oregon Irrigation District, supra, that the word appeal as used in ORS 536.060 (which is essentially the same as ORS  537.200 for the purposes here dealt with) does not denote an appeal from one judicial tribunal to another but merely describes a method of review, through the institution of an original judicial proceeding in the circuit court. (165 Or at 462.) 7. Although the appeal to the circuit court is regarded as the institution of an original suit in that court, this does not mean that the administrative proceedings before the State Engineer are wholly divorced from the proceedings in the circuit court. In Pacific Live Stock Company v. Lewis, 241 US 440, 60 L ed 1084 (1915), in commenting upon the character of the administrative proceedings before the State Water Board under what is now ORS Ch 539, the court said:    They are not independent or unrelated, but parts of a single statutory proceeding, the earlier stages of which are before the board and the later stages before the court. In notifying claimants, taking statements of claim, receiving evidence, and making an advisory report, the board merely paves the way for an adjudication by the court of all the rights involved. As the supreme court of the state has said, the board's duties are much like those of a referee. (And see Washington ex rel. Oregon R. & Nav. Co. v. Fairchild, 224 US 510, 526, 527, 56 L.ed. 863, 868, 869, 32 Sup. Ct. Rep. 535.) All the evidence laid before it goes before the court, where it is to be accorded its proper weight and value. That the state, consistently with due process of law, may thus commit the preliminary proceedings to the board and the final hearing and adjudication to the court, is not debatable. And so, the fact that the board acts administratively and that its report is not conclusive does not prevent a claimant from receiving the full benefit of submitting his claim and supporting proof to the board. Pacific Live Stock Co. v. Lewis, supra at p 1098.  Viewed as a continuous proceeding we can look back to the administrative stage in filling out the essential procedural requirements for jurisdiction in the circuit court. The fact that the suit was not initiated by the service of summons does not prevent the court from obtaining jurisdiction. This is the conclusion reached in Bray v. Superior Court, 92 Cal App 428, 268 P 374 (1928), where the California statutory equivalent of ORS Ch 539 was under consideration. The court said: That the parties were brought into court other than by means of the issuance of a summons does not appear to us to affect the constitutionality of the act. The question really is, in every case, whether the court has jurisdiction of the parties and of the cause.    That, after having acquired jurisdiction of the parties, the subsequent proceedings may not be in all particulars identical with the trial of some other civil action, such as a damage suit, does not affect the constitutionality of the section in question. Bray v. Superior Court, supra at p 377. 8. In the case at bar, after the applicant filed its application for a permit the objectors filed protests with the State Engineer. A hearing was held before him. The objectors appeared at that hearing, presented evidence and cross-examined applicant's witnesses. When the order was made rejecting the application, the applicant served a Notice of Appeal and an Undertaking on Appeal upon the State Engineer and upon the objectors. The applicant filed with the clerk of the circuit court a transcript consisting of the application for permit, the objectors' protests, the order of the State Engineer, the Notice of Appeal, and the Undertaking on Appeal. The State Engineer certified to the circuit court all of the exhibits and a  transcript of the testimony presented at the hearing before him. The foregoing procedure was sufficient to vest jurisdiction of the cause in the Circuit Court for Lake County. Contrary to the objectors' contention, we think that this jurisdiction is sufficient to give the circuit court the power to re-examine the issue presented to the State Engineer, subject to the limitations we shall presently describe. As pointed out earlier, the objectors rely upon Broughton's Estate v. Central Oregon Irrigation District, supra, in support of their contention that the findings of the State Engineer are presumed to be correct and that judicial review is limited to a determination of whether the State Engineer acted within his authority, acted arbitrarily, or that his acts were not justified by the facts. In the Broughton case, the circuit court was called upon to review the State Engineer's action in granting an application for an extension of time within which to complete the construction of works and to apply water to a beneficial use. This court, speaking through Mr. Justice BAILEY, said: The function of the circuit court in reviewing an order of the state engineer is limited to determining whether the acts of that officer are within the authority conferred upon him and whether such acts are arbitrary or not justified by the facts. The court is not granted the power to substitute its judgment for that of the engineer. In other words, the statute does not confer upon the court administrative duties that are imposed by law upon the state engineer. It is doubtful that a contrary construction of the statute would be in consonance with Article III of the Oregon constitution, which provides that the powers of the government shall be divided into three separate departments. See Keller v. Potomac Electric Power Company, 261  U.S. 428, 67 L.E. 731, 43 S.Ct. 445. Broughton's Estate v. Central Oregon Irrigation District, 165 Or 435, 462, 463. In the paragraph preceding the quoted portion of the opinion the court said that, In providing that such appeal `shall be governed by the practice in suits in equity', the legislature must have intended that the matter should be tried in the same manner as a suit in equity originally instituted in the circuit court. If the matter were so tried then, of course, the court would substitute its judgment for that of the engineer. If the court has the power to determine whether the acts of the State Engineer are not justified by the facts then it may substitute its judgment for that of the engineer and the two parts of the opinion are apparently inconsistent. However, upon a careful reading of the quoted paragraph it seems clear that Justice BAILEY was merely describing the limitations imposed upon powers of a court in reviewing administrative action by the separation of powers doctrine. When so understood, the apparent inconsistency disappears. 9. Our statutes providing for review of the action of the State Engineer would be unconstitutional if they were construed to vest in the courts the power to substitute their judgment on questions of legislative policy. This is taught by the leading case of Keller v. Potomac Electric Power Company, 261 US 428, 67 L ed 731, 43 S Ct 445, cited by the court in support of the statement quoted above. In other states where de novo review of administrative action is provided for the cases are in conflict. Some courts have held that such statutes are unconstitutional. Cromwell v. Jackson, 188 Md 8, 52 A2d 79 (1947); Daniel v. Tyrrell & Garth Investment Co., 127 Tex 213, 93 SW2d 372  (1936); Household Finance Corporation v. State, 40 Wash 2d 451, 244 P2d 260 (1952). Other courts treat such statutes as expressing the constitutional limit upon judicial review. The position taken by these latter courts is described in 4 Davis, Administrative Law Treatise, § 29.10 p 184, as follows: Although the law of state courts is generally in agreement with the fundamental of federal law that courts cannot constitutionally be required to review de novo any administrative action that is deemed nonjudicial, the law of many state courts is in one important respect superior to federal law, in that no matter how clear the provision for de novo review, many courts use the constitutional doctrine not to strike down the statutory provision for review but to interpret it to provide for the kind of limited review that will be constitutional. 4 Davis, Administrative Law Treatise, supra. In some of the cases in this group the courts have interpreted their statutes as limiting judicial review to a determination of whether the administrative officer acted within his authority, acted arbitrarily or based its order upon substantial evidence. State Board of Medical Registration and Examination v. Scherer, 221 Ind 92, 46 NE2d 602 (1943); Langen v. Badlands Cooperative State Grazing Dist., 125 Mont 302, 234 P2d 467 (1951); Jones v. Marsh, 148 Tex 362, 224 SW 2d 198 (1949), but cf. Daniel v. Tyrrell & Garth Investment Co., supra. 10. A part of the language in the Broughton case appears to adopt this latter interpretation, but read as a whole we think that the opinion states only the constitutional proscription which prohibits the court from substituting its ideas of legislative policy for those of the administrative officer invested with the authority to carry it out. In addition to this constitutional  limitation upon its powers, the court may limit its review by a self-imposed restriction against disturbing administrative findings in those areas in which the administrative agency is expert. This is the meaning of Smyth et al. v. Jenkins et al., 208 Or 92, 299 P2d 819 (1956), where the court said:    It is seldom, if ever, that a court will interfere with discretionary action of the state engineer upon matters involving the administration of the water laws of the state and substitute its judgment for his. Judges are not super engineers. Broughton's Estate v. Central Oregon Irr. Dist., 165 Or. 435, 462, 101 P.2d 425, 108 P.2d 276. Smyth v. Jenkins, supra at p 823. This does not mean that all orders of the State Engineer must be affirmed if supported by substantial evidence. The court may have the power to re-assess all the evidence. DeMond v. Liquor Control Commission, 129 Conn 642, 30 A2d 547 (1943). In the Smyth case the court made its own appraisal of the evidence relating to the application of the water to a beneficial use and it adopted the written opinion of the trial judge who also exercised his independent judgment with respect to the beneficial use of the water. The court merely recognized that matters peculiarly within the competence of the State Engineer should be left for his determination, a point of view which we now wish to reaffirm emphatically. We need only add that in numerous cases this court, as well as the circuit courts of this state, have substituted their independent judgment on a variety of matters which had been passed upon by the State Engineer, in some of which cases it is possible that the court may have gone so far in its review of the  administrative findings that an encroachment upon the legislative prerogative may have resulted. 11. It is our conclusion that the Circuit Court for Lake County was empowered to exercise the powers of a court of equity in reviewing the determination of the State Engineer, and could, therefore, re-examine de novo the findings of the State Engineer to the extent that such re-examination did not involve the usurpation of the legislative function. In exercising its equity powers the trial court was privileged to rely upon those findings of the State Engineer which were within his special competence. Smyth et al. v. Jenkins et al., supra. We do not intend to say that the suits contemplated under our water statutes can be likened in all respects to the usual suit in equity. As stated in Hough v. Porter, 51 Or 318, 439, 95 P 732, 98 P 1083 (1909), Water suits are, in a sense, sui generis   . After discussing cases in which the rules applicable to ordinary suits were relaxed in water litigation, the court said, at page 440, It thus appears that courts of equity are not necessarily bound in all cases by the rules of practice usually invoked. See also In re Silvies River, supra, at p 92 and Oliver v. Jordan Valley Land & Cattle Co., 143 Or 249, 269, 22 P2d 206, 211 (1933). In the case at bar the trial judge in a colloquy with counsel indicated that he understood the Broughton case to mean that he would be bound by the State Engineer's factual findings. When counsel for the applicant offered further evidence, an objection was interposed by counsel for the objectors on the ground that it would permit the applicant to try his case piecemeal, first before the State Engineer and later before the court. The objection was sustained on the ground  that the Broughton case precluded the introduction of any evidence other than that certified to the court by the State Engineer. The evidence consisting of the expert testimony of a hydraulic engineer was then admitted under the rule. The objectors did not cross-examine the witness and did not offer any evidence. The evidence offered by the applicant was admissible and the trial court should have overruled the objection to its introduction. However, the error is of no import because the evidence is available to us under the rule. The entire record of the case consisting of various exhibits including maps, engineering data, pictures of various parts of Warner Valley, transcript of testimony taken before the State Engineer and the transcript of testimony taken before the trial court, is before us on this appeal. 12. As a court of equity we have, within the constitutional bounds described above, reviewed de novo this record including the findings of the State Engineer which were incorporated into the 1929 decree and those preliminary to the decree rendered in the case at bar. In doing so, we have recognized the truth expressed in Smyth v. Jenkins et al ., that Judges are not super engineers and we have, therefore, treated with great respect the State Engineer's appraisal of the evidence of the proceedings which were before him. We do not regard this as a cession of our judicial power or inconsistent with our duty under the statute to review the case de novo. It is simply the recognition of a practical necessity to divide the functions of the court and those of the legislative agency upon the basis of their respective expertise. Indeed, there is a respectable point of view that the constitutional functions of court and legislature should be divided on the basis of this criterion, allocating to each branch of  government the powers and duties which it is best qualified to perform. 4 Davis Administrative Law Treatise, §§ 30.04, 30.09. Our review of the proceedings discloses no substantial error in the decree of the lower court. As we have indicated earlier, the decree more than adequately protects the interests of the objectors. It is, therefore, affirmed.