Court Opinion

ID: 9795196
Source: CourtListenerOpinion
Date Created: 2023-08-31 03:22:03.956873+00
Date Added: 2024-06-11T08:26:46.591965
License: Public Domain

SCHXJMAN, J.,
dissenting.
In 2002, the Department of Human Services (DHS), responding to a $2,600,000 budget cut, promulgated a temporary rule terminating a program for medically needy individuals and shortly thereafter sent to each of the program’s beneficiaries a notice of its termination effective February 1, 2003. Petitioners, who were receiving benefits under the program at the time, requested contested case hearings. When the agency denied their requests, petitioners sought judicial review in Multnomah County Circuit Court. Their petition, as ultimately amended, claimed that, in terminating the program, the agency exceeded its statutory authority and violated several provisions of the Oregon Constitution. They sought invalidation of the rule, an injunction against its enforcement, and a declaration setting aside the notices they had received informing them of the program’s termination. DHS filed a motion to remove the case to the Court of Appeals; that court, according to DHS, had exclusive jurisdiction because the case was a challenge to a rule and not to an order. ORS 183.400(1). The court denied the motion, ruling instead that the case was properly filed in the circuit court because it was a challenge to orders in other than contested cases. ORS 183.484. Thereafter, the court allowed DHS’s motion for summary judgment and denied petitioners’ motion for a preliminary injunction. Petitioners appeal.
The majority does not reach the merits, holding instead that the trial court erroneously treated the notices that DHS sent to petitioners as “orders in other than contested cases,” review of which was in the circuit court. *372Rather, the majority holds, the notices were “orders in contested cases,” review of which is in this court. ORS 183.482. 209 Or App 360-64. The majority goes on to hold that, because petitioners should have been granted individual contested case hearings, the proper disposition of the case is to remand it to DHS so that such hearings can take place. Id. at 370-71.
I dissent. In my view, the trial court erred at the outset when it determined that it, and not this court, had jurisdiction. The notices that DHS sent to petitioners were not orders at all. They were nothing more than notices, and, for that reason, the circuit court never had jurisdiction. See Calif. Table Grape Comm’n v. Dept. of Human Res., 109 Or App 222, 818 P2d 983 (1991) (discussing difference between notices and orders; holding that circuit court has no jurisdiction to review nonorders).
To reach the conclusion that petitioners were entitled to contested case hearings, the majority invokes the statutory definition of that term, which includes a proceeding before an agency in which “individual legal rights * * * of specific parties are required by statute * * * to be determined only after an agency hearing at which such specific parties are entitled to appear and be heard[.]” ORS 183.310(2)(a)(A) (emphasis added). The majority then identifies ORS 411.095(3) as the statute serving as “the source of DHS’s legal obligation” to provide petitioners with contested case hearings. 209 Or App at 361. That statute provides, in part:
“[W]hen [DHS] proposes to deny, reduce, suspend or terminate a grant of general assistance, a grant of public assistance or a support service payment used to support participation in the job opportunity and basic skills program, the department shall provide an opportunity for a hearing under ORS chapter 183.”
Immediately after quoting the statute, the majority states:
“By its express terms, the statute requires DHS to offer a hearing when the agency proposes to ‘terminate’ a grant of general assistance or public assistance. Medically needy benefits qualify as such assistance, and DHS does not suggest otherwise. The plain text of ORS 411.095(3), together *373with the plain text of ORS 183.310(2)(a)(A), compels a conclusion that DHS was obligated to offer petitioners contested case hearings before proposing to end their medically needy benefits. See PGE v. Bureau of Labor and Industries, 317 Or 606, 610, 859 P2d 1143 (1993) (first step in interpreting a statute is to consider text and context; other guides in interpreting a statute are considered only if text is ambiguous).”
Id. at 361. The majority’s assertion that the “plain text” of the statute requires contested case hearings is manifestly wrong. The “plain text” of ORS 411.095(3) nowhere “expresses” the term contested case, nor does it refer to ORS 183.310(2)(a)(A). What the statute’s plain text expressly states is that, when DHS proposes to terminate a grant, it “shall provide an opportunity for a hearing under ORS chapter 183.” (Emphasis added.) ORS chapter 183 provides for two kinds of hearings: contested case hearings, ORS 183.413 to 183.470, and rulemaking hearings, ORS 183.335.
It is arguable that the term “hearing under ORS chapter 183” means a contested case hearing. But I use the term “arguable” advisedly. To establish that interpretation, particularly in light of the fact that, as this case demonstrates, sometimes a grant is terminated by virtue of a rule and sometimes by virtue of an individualized determination that a person does not meet preexisting criteria, the majority needs to do more than rely on an erroneous assertion. It needs to provide an argument.
As I attempt to show below, I believe that examination of the text, context, and legislative history of ORS 411.095(3) demonstrate that the statute does not entitle petitioners to a contested case hearing. But the majority opinion suffers from a more fundamental flaw, which I address first: ORS 411.095(3) simply does not apply in this case.
The majority’s premise is that the notices sent by DHS to petitioners are orders that terminate a grant of general or public assistance. But the notices themselves had no operative effect whatsoever; had DHS never sent them, petitioners would nonetheless have lost their benefits. The operative act that terminated petitioners’ benefits was the promulgation of the rule that defunded the medically needy *374program.1 The notices did not announce a decision to terminate “a grant”; they announced the results of a quasi-legislative decision to terminate a program. The rule, not the notices, had an impact on petitioners’ rights.
Indeed, we have already decided the issue. In Calif. Table Grape Comm’n, the Health Division of the Department of Human Resources (Division) adopted a temporary rule prohibiting the sale of all sulfite-treated foods. 109 Or App at 224. Within a few days, the Division sent notices of the new rule to all food service facilities, concluding with the statement, “As of November 1, 1988, grapes treated with sulfites cannot be served in a food service facility.” Id. at 225 (emphasis in original). Petitioners sought review of the notice in circuit court, arguing that the notice was an order in other than a contested case. This court, sitting en banc, rejected that argument: *375Id. The only difference between Calif. Table Grape Comm’n and this case is inconsequential. There, the notices were addressed to all “food service facilities,” id. at 224, where in the present case, each notice is captioned with a recipient’s name. In both situations, however, the notices were evidently mailed to individuals named on the envelope, see id. at 224 (“Division sent a notice of the rule * * (Emphasis added.)), and in both cases the notice was addressed to a discrete group of individuals: operators of food service facilities governed by the Division, in the earlier case, and, in the present case, recipients of benefits under the medically needy program. The legal principle governing the cases is identical: When, after promulgating a rule — particularly a temporary rule— an agency sends notice of that rule to those who are affected by it, the notices are not orders in contested cases and the circuit court does not have jurisdiction to review them. Rather, the proper challenge is to the rule of which the notices inform recipients, and review of that rule is in this court pursuant to ORS 183.400.
*374“Division contends that the notice is not an ‘order,’ because it is directed generally to all food service facilities, not to a named person or persons. In addition, it contends that, because the notice does not mandate specific action by any party or alter the interpretation of existing rules, it is only intended to announce the reinstatement of [an earlier rule] upon expiration of the temporary rule.
“We agree. The notice is intended to fulfill the requirement that affected persons must be notified of a rule change. ORS 183.355(2)(b). Petitioners’ challenge to the notice is intended as a challenge to the validity of OAR 333-151-010(4). That challenge is before this court in [a separate case involving the same parties.] * * * The notice was not an order within the meaning of ORS 183.310(5)(a) and petitioners are not entitled to judicial review in circuit court under ORS 183.484. The circuit court properly dismissed the petition for lack of jurisdiction.”
*375Thus, ORS 411.095(3) is simply not relevant in this case. Even if it were, however, it does not entitle petitioners to contested case hearings. The statute began as House Bill (HB) 1213 (1971), later enacted as Oregon Laws 1971, chapter 734, section 41. According to a memorandum prepared by the Administrative Law Committee of the Oregon State Bar, the bill’s principal drafter, the bill performed two functions: it amended the existing Administrative Procedures Act (APA), and it made conforming amendments to various provisions elsewhere in the ORS. Section 41 appears to be among the conforming amendments, although, oddly, there was no preexisting statute to amend. In any event, the committee provided the following rationale for the conforming amendments:
“The Committee undertook to amend only those sections of ORS that were inconsistent with H[B] 1213 or created ambiguities. Where the existing provision does no more than authorize adoption of regulations or the holding of hearings, but does not specify procedure, any specific reference to ORS 183 is unnecessary. H[B] 1213 speaks in mandatory terms and does not require incorporative language to be effective on all state actions of whatever nature, *376so long as there are no inconsistent provisions in other statutes.
“Where a hearing was of a type (i.e. revocation of an occupational license) which H[B] 1213 requires to be a ‘due process’ hearing, the conforming legislation does not incorporate the requirement that the hearing be conducted as a ‘contested case.’ Where, however, the hearing would not by force of H[B] 1213 be a ‘due process’ hearing, but the legislative intent was clear, we have specifically provided that the hearing shall be held as a ‘contested case.’ Where it was unclear which type of hearing was intended by the legislature, we left the matter as it now exists.”
I interpret this somewhat cryptic explanation as follows: In combing through the ORS to find statutes that needed conforming amendments, the drafters found statutes describing various types of proceedings before agencies. First, they found statutes that called for hearings that were of a type that the APA, as amended by HB 1213, would explicitly and by its own force require to be contested case hearings, for example, revocation of an occupational license, named as a contested case in HB 1213. Statutes in that category did not need amendments because they clearly called for contested case hearings. The second category included statutes in which the legislature clearly intended that contested case hearings should occur, but the statutes were not specifically named in HB 1213 (“where the hearing would not by force of H[B] 1213 be a ‘due process’ hearing” (emphasis added)). Included in this category would be situations that, in the terms of HB 1213, “are required by statute or Constitution to be determined only after an agency hearing at which specific parties are entitled to appear and be heard.” In other words, this category includes proceedings that are brought into HB 1213 by incorporation (via the constitution or some statute that is not HB 1213), as opposed to proceedings in the first category that are actually named in HB 1213. When the legislature’s intention to confer contested case status on such proceedings was clear, the committee “specifically provided that the hearing shall be held as a ‘contested case.’ ”
Notably, section 41, later ORS 411.095(3), was not in that category. The legislature did not “specifically provide that the hearing shall be held as a ‘contested case.’ ” The *377unavoidable inference is that the drafters of HB 1213, including section 41, did not believe that the legislature clearly intended (or would have intended) the hearings in that section to be contested case hearings. Rather, section 41 would fall into the third category: statutes “where it was unclear which type of hearing was intended by the legislature.”
At the very least, this legislative history compels the following conclusions. First, the drafters of ORS 411.095(3) knew how to specify that a hearing had to be a “contested case” and they did not do so. Second, the drafters of ORS 411.095(3) did not believe that the legislature clearly called for contested case hearings under ORS 411.095(3). That being the case, I would argue that the context of ORS 411.095(3), which includes ORS chapter 183, would compel the conclusion that, when the termination of a grant of public assistance results from a quasi-legislative decision, no contested case hearings need occur. That is so because not only the Oregon APA, but all of administrative law, flows from the fundamental difference between quasi-adjudication and quasi-legislation, and the constitutionally mandated procedures that each entails: contested case hearings and “on the record” decisions for quasi-adjudication, and mere procedural regularity for quasi-legislation.
In sum, I would hold that the notices under challenge in this case are not orders. The circuit court lacked jurisdiction to review them. Petitioners’ challenge is only to the rule ending the medically needy program; they assert that it violates the constitution and that it exceeds the agency’s statutory authority, both assertions that are cognizable under ORS 183.400. The challenge should have been brought originally in this court. We should either remand the case to the circuit court with instructions to transfer the case back to us, see ORS 14.165(l)(a), or, in the interest of judicial economy and the timely disposition of cases, decide it on the merits now.
Brewer, C. J., and Landau and Armstrong, JJ., join in this dissent.

 Indeed, because the rule that DHS announced in the notices was a temporary-rule, DHS was under a statutory obligation to notify petitioners. ORS 183.355(2)(b); Calif. Table Grape Comm’n, 109 Or App at 225 (under ORS 183.355(2)(b), affected persons “must be notified” of rule change implemented by temporary rule). DHS may or may not have sent the notices in an attempt to comply with the statute. Regardless, the necessary implication of the majority opinion is that whenever an agency lawfully promulgates a temporary rule, every person affected by it will be entitled to a contested case hearing.