Burke v. Children's Services Division

593 P.2d 1262, 39 Or. App. 819, 1979 Ore. App. LEXIS 2199
CourtCourt of Appeals of Oregon
DecidedApril 23, 1979
DocketNo. 414-115, CA 10501
StatusPublished
Cited by2 cases

This text of 593 P.2d 1262 (Burke v. Children's Services Division) is published on Counsel Stack Legal Research, covering Court of Appeals of Oregon primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Burke v. Children's Services Division, 593 P.2d 1262, 39 Or. App. 819, 1979 Ore. App. LEXIS 2199 (Or. Ct. App. 1979).

Opinion

ROBERTS, J.

In this case, which is here for the second time, plaintiff brings a "class action suit in equity” against the defendant state agencies. Plaintiff is a recipient of benefits under the Aid to Families with Dependent Children (AFDC) program. Prior to February 15,1975, in conjunction with that program, defendant enjoyed child care benefits in the form of direct payments by the defendant Children’s Services Division (CSD) to persons who provide day care services for plaintiff’s children while she works. Effective that date, CSD purported to discontinue direct payments to providers because of budgetary problems, and thereafter the child care benefits for plaintiff took the form of work-related expense allowances by the Public Welfare Division of the defendant Department of Human Resources (PWD). The effect of the change in benefit programs was to reduce the net available income of plaintiff and of other persons receiving similar child care benefits.

Both the direct provider payment system followed by CSD and the new PWD system would provide plaintiff with benefits sufficient to meet the requirements of the applicable federal regulation (45 CFR § 220.61(e)(11)) and state statutes pertaining to child care benefits. She argues, however, that CSD discontinued the direct provider payments without following the notice, hearing and other rule-making requirements of the Oregon Administrative Procedures Act, ORS chapter 183 (APA), and that the agency’s action therefore violated the APA, the notice and hearing requirements of 45 CFR § 205.10(a),1 and the due [822]*822process clause of the Fourteenth Amendment to the United States Constitution.

CSD effected the discontinuance of direct provider payments through what it considered to be an "internal management directive” as defined by ORS 183.310(7)(a), rather than by adopting a rule in the manner prescribed by ORS 183.335 and other applicable provisions of the APA. A notice of the discontinuance, dated February 13, 1975, was received by plaintiff on February 15, the effective date of the termination of payments. When this case was before us previously, we reversed the trial court’s determination that the discontinuance of direct provider payments could be effected through an internal management directive, and we held that the APA’s rule-making requirements were applicable. Burke v. Children’s Serv. Div., 26 Or App 145, 552 P2d 592 (1976). On remand, plaintiff moved for partial summary judgment. The trial court allowed the motion and ordered, first, that CSD resume its previous practice of making direct payments to providers of day care services, and second, that CSD locate and pay damages to plaintiff and other eligible recipients "in the amount by which their net available income has been reduced as a result of CSD’s discontinuance of direct [823]*823vendor payments.”2 Defendants appeal, and we reverse.

The issue in this appeal is whether the trial court had authority to direct CSD to resume a particular substantive policy in light of the agency’s failure to follow proper procedures to terminate that policy. If the court lacked that authority, it follows that the court also had no authority to direct the agency to pay damages based on the loss to plaintiff and others resulting from the termination of the policy. As we previously held, CSD should have followed required rule making procedures in terminating direct provider payments. However, CSD also failed to follow the same required procedures to initiate the policy of direct provider payments. Therefore, as defendants aptly observe:

"The circuit court’s order requires CSD to resume direct day care payments for plaintiffs pursuant to 'rules’ in effect prior to February 15, 1975. CSD has no 'rules’ to return to.”

Cf. Sun Ray Dairy v. OLCC, 16 Or App 63, 517 P2d 289 (1973). Moreover, on February 16, 1975, the day after CSD purported to terminate direct provider payments, PWD promulgated a temporary rule to implement the new benefit policy of work-related expense allowances. That temporary rule was later adopted as a permanent rule. OAR 461-04-516. Plaintiff does not challenge the validity of the temporáry or permanent PWD rules.

Assuming arguendo that there can ever be an [824]*824occasion when the courts can remedy an agency’s noncompliance with the APA’s rule making requirements by directing the agency to adhere to the substantive policy of a pre-existing rule,3 this is not such an occasion. Here, the substantive policy which the trial court ordered CSD to resume had not been embodied in a validly promulgated prior rule, and an alternative system of benefits for plaintiff and persons similarly situated took effect, under the unchallenged rule of another agency, the day after CSD’s policy of direct provider payments was discontinued.

For the foregoing reasons, we conclude that the trial court did not have authority to remedy defendants’ noncompliance with the APA’s rule making procedures by requiring CSD to resume its pre-existing policy or to pay damages to eligible recipients equal to the amounts they would have received had that policy remained in effect.

Plaintiff contends, however, that independently of the trial court’s authority under the APA, its order was authorized and required by 45 CFR § 205.10(a), and by the due process clause of the Fourteenth Amendment as construed in Goldberg v. Kelly, 397 US 254, 90 S Ct 1011, 25 L Ed 2d 287 (1970) and related cases. In Goldberg the United States Supreme Court held that an individual’s entitlement to welfare benefits cannot be terminated without a pretermination evidentiary heairing on the issue of eligibility under applicable statutory or regulatory criteria. We doubt whether the holding in Goldberg would apply to this plaintiff even if she were asserting an individual entitlement to an ongoing level of benefits under an ongoing legislative program — whether statutory or regulatory. See Mathews v. Eldridge, 424 US 319, 96 S Ct 893, 47 L Ed 2d 18 (1976). We need not reach that question, however, because the plaintiff is not chal[825]*825lenging a quasi-judicial determination which reduces or eliminates her own benefits alone; she challenges an administrative determination, which she argues and which we previously held was required to be made in accordance with legislative rule-making requirements, to change the program through which she and all other recipients receive benefits. We stated in Allison v. Washington County, 24 Or App 571, 548 P2d 188 (1976):

"* * * ln this context, a substantial majority of cases hold there is no constitutional right to notice or hearing,5 a consideration that would arise in the separate context of quasi-judicial land-use determination.’’(Footnote 6 omitted.)

The principles expressed in Allison are equally applicable here. See Whitfield v. King, 364 F Supp 1296 (MD Ala 1973).

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Related

State v. Cossett
636 P.2d 442 (Court of Appeals of Oregon, 1981)
Burke v. Children's Services Division
607 P.2d 141 (Oregon Supreme Court, 1980)

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Bluebook (online)
593 P.2d 1262, 39 Or. App. 819, 1979 Ore. App. LEXIS 2199, Counsel Stack Legal Research, https://law.counselstack.com/opinion/burke-v-childrens-services-division-orctapp-1979.