NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS JUL 16 2020 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT
JOSEPH MENDOZA; et al., No. 19-35341
Plaintiffs-Appellants, D.C. No. 6:16-cv-01264-AA
v. MEMORANDUM* LITHIA MOTORS, INC.; et al.,
Defendants-Appellees.
Appeal from the United States District Court for the District of Oregon Ann L. Aiken, District Judge, Presiding
Submitted May 12, 2020** Portland, Oregon
Before: BYBEE and VANDYKE, Circuit Judges, and CARDONE,*** District Judge.
Appellants appeal from the district court’s grant of Appellees’ Motion for
Summary Judgment. Because the parties are familiar with the facts, we will not
* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. ** The panel unanimously concludes this case is suitable for decision without oral argument. See Fed. R. App. P. 34(a)(2). *** The Honorable Kathleen Cardone, United States District Judge for the Western District of Texas, sitting by designation. recite them here. We have jurisdiction under 28 U.S.C. §§ 1291 and 1294.
The sole issue presented in this appeal concerns the interpretation of Oregon
Administrative Rule 137-020-0020(3)(k) (the “Undisclosed Fee Payments Rule,”
or the “Rule”), which reads as follows:
Undisclosed Fee Payments -- A dealer who sells or leases a motor vehicle to a consumer and makes any payment to any non-employee third-party in conjunction with the sale or lease, other than a referral fee of $100 or less (also known as a “bird-dog” payment), must specifically itemize such payment on the consumer’s purchase order, lease agreement and retail installment contract . . . .
Or. Admin. R. 137-020-0020(3)(k) (2020).
Appellants argue that “any payment” should be read to encompass literally
any payment that a car dealership makes to a third party in connection with the sale
or lease of a vehicle, and, specifically, the prices that dealerships pay for service
and insurance products that they mark up and sell to their customers. For their
part, Appellees argue that the Rule, when read in context, only requires dealerships
to itemize referral fees of greater than $100.
As a matter of first impression, the district court adopted Appellees’ narrow
reading of the Undisclosed Fee Payments Rule and granted their motion for
summary judgment. We review the district court’s grant of summary judgment,
including its interpretation of regulations, de novo. See Munoz v. Mabus, 630 F.3d
856, 860 (9th Cir. 2010).
2 When interpreting state regulations, we must “determine what meaning the
state’s highest court would give to the law.” See Brunozzi v. Cable Commc’ns,
Inc., 851 F.3d 990, 998 (9th Cir. 2017) (citation omitted). The Oregon Supreme
Court applies a three-step methodology to interpret administrative rules. Oil Re-
Ref. Co. v. Envtl. Quality Comm’n, 388 P.3d 1071, 1077 (Or. 2017) (noting agency
regulations are interpreted under the same framework as statutes); State v. Gaines,
206 P.3d 1042, 1050–51 (Or. 2009) (en banc) (setting out the three-step framework
for interpreting a statute). “[T]he first step [involves] an examination of text and
context.” Brunozzi, 851 F.3d at 998 (second alteration in original) (quoting
Gaines, 206 P.3d at 1050). Second, Oregon courts consider the pertinent rule-
making history proffered by the parties. Oil Re-Ref. Co., 388 P.3d at 1077;
Gaines, 206 P.3d at 1050–51. “However, the extent of the court’s consideration of
that history, and the evaluative weight that the court gives it, is for the court to
determine.” Gaines, 206 P.3d at 1050–51. Third, where a provision’s meaning
remains unclear after an examination of text, context, and history, “the court may
resort to general maxims of statutory construction.” Id. at 1051.
Here, the plain text of the Rule compels neither party’s interpretation. But
the Rule’s title supports a narrow reading of the Rule, applicable only to “fee
payments.” See Sanok v. Grimes, 662 P.2d 693, 694 n.1 (Or. 1983) (considering a
rule’s title to aid in its interpretation); Ha v. Bd. of Parole & Post-Prison
3 Supervision, 386 P.3d 70, 73 (Or. Ct. App. 2016) (same). “Fee” and “payment”
are not defined terms in the regulations, but the dictionary definition of “fee”
denotes a more limited meaning than “payment.” See Comcast Corp. v. Dep’t of
Revenue, 337 P.3d 768, 776 & n.7 (Or. 2014) (noting that Oregon courts look to
Webster’s Third New International Dictionary to discern the meaning of undefined
terms). At the very least, the title’s reference to “fee payments” militates against
the broadest reading of “any payment” proposed by Appellants.
While the text is inconclusive, we also look to the surrounding context.
Lake Oswego Pres. Soc’y v. City of Lake Oswego, 379 P.3d 462, 469 (Or. 2016).
An administrative rule’s context includes “other provisions of the same rule, other
related rules, the statute pursuant to which the rule was created, and other related
statutes.” See Oil Re-Ref. Co., 388 P.3d at 1078 (citation omitted). An
examination of the Rule’s place in the broader context of the Motor Vehicle Price
and Sales Disclosure Rules, Oregon Administrative Rule 137-020-0020, supports
the Appellees’ proffered interpretation of the Rule.
First, the third-party insurance and service products at issue in this matter are
the subject of a comprehensive regulatory scheme that employs consistent
language conspicuously absent from the rule at hand. See Or. Admin. R. 137-020-
0020(3)(f), (j), (l), (m) (referring consistently to “additional goods, accessories,
services, products or insurance”). While these other rules impose a number of
4 restrictions and obligations on dealerships, notably, they do not require the
disclosure of the price paid by a dealership to purchase the products. Id. It would
be strange that such a requirement would be ambiguously added to Oregon
Administrative Rule 137-020-0020(3)(k), while conspicuously missing from the
other provisions where it would most naturally be located. This is some indication
that the Rule here was not meant to tacitly require such disclosures under the
umbrella of “any payments,” departing from the specific, unambiguous, and
consistent language used elsewhere to regulate the same products.
Second, at least one other disclosure rule would be stripped of its effect
altogether by Appellants’ proposed expansive interpretation. See id. 137-020-
0020(3)(d) (the “Limitations on Offering Price Rule”). The Limitations on
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NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS JUL 16 2020 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT
JOSEPH MENDOZA; et al., No. 19-35341
Plaintiffs-Appellants, D.C. No. 6:16-cv-01264-AA
v. MEMORANDUM* LITHIA MOTORS, INC.; et al.,
Defendants-Appellees.
Appeal from the United States District Court for the District of Oregon Ann L. Aiken, District Judge, Presiding
Submitted May 12, 2020** Portland, Oregon
Before: BYBEE and VANDYKE, Circuit Judges, and CARDONE,*** District Judge.
Appellants appeal from the district court’s grant of Appellees’ Motion for
Summary Judgment. Because the parties are familiar with the facts, we will not
* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. ** The panel unanimously concludes this case is suitable for decision without oral argument. See Fed. R. App. P. 34(a)(2). *** The Honorable Kathleen Cardone, United States District Judge for the Western District of Texas, sitting by designation. recite them here. We have jurisdiction under 28 U.S.C. §§ 1291 and 1294.
The sole issue presented in this appeal concerns the interpretation of Oregon
Administrative Rule 137-020-0020(3)(k) (the “Undisclosed Fee Payments Rule,”
or the “Rule”), which reads as follows:
Undisclosed Fee Payments -- A dealer who sells or leases a motor vehicle to a consumer and makes any payment to any non-employee third-party in conjunction with the sale or lease, other than a referral fee of $100 or less (also known as a “bird-dog” payment), must specifically itemize such payment on the consumer’s purchase order, lease agreement and retail installment contract . . . .
Or. Admin. R. 137-020-0020(3)(k) (2020).
Appellants argue that “any payment” should be read to encompass literally
any payment that a car dealership makes to a third party in connection with the sale
or lease of a vehicle, and, specifically, the prices that dealerships pay for service
and insurance products that they mark up and sell to their customers. For their
part, Appellees argue that the Rule, when read in context, only requires dealerships
to itemize referral fees of greater than $100.
As a matter of first impression, the district court adopted Appellees’ narrow
reading of the Undisclosed Fee Payments Rule and granted their motion for
summary judgment. We review the district court’s grant of summary judgment,
including its interpretation of regulations, de novo. See Munoz v. Mabus, 630 F.3d
856, 860 (9th Cir. 2010).
2 When interpreting state regulations, we must “determine what meaning the
state’s highest court would give to the law.” See Brunozzi v. Cable Commc’ns,
Inc., 851 F.3d 990, 998 (9th Cir. 2017) (citation omitted). The Oregon Supreme
Court applies a three-step methodology to interpret administrative rules. Oil Re-
Ref. Co. v. Envtl. Quality Comm’n, 388 P.3d 1071, 1077 (Or. 2017) (noting agency
regulations are interpreted under the same framework as statutes); State v. Gaines,
206 P.3d 1042, 1050–51 (Or. 2009) (en banc) (setting out the three-step framework
for interpreting a statute). “[T]he first step [involves] an examination of text and
context.” Brunozzi, 851 F.3d at 998 (second alteration in original) (quoting
Gaines, 206 P.3d at 1050). Second, Oregon courts consider the pertinent rule-
making history proffered by the parties. Oil Re-Ref. Co., 388 P.3d at 1077;
Gaines, 206 P.3d at 1050–51. “However, the extent of the court’s consideration of
that history, and the evaluative weight that the court gives it, is for the court to
determine.” Gaines, 206 P.3d at 1050–51. Third, where a provision’s meaning
remains unclear after an examination of text, context, and history, “the court may
resort to general maxims of statutory construction.” Id. at 1051.
Here, the plain text of the Rule compels neither party’s interpretation. But
the Rule’s title supports a narrow reading of the Rule, applicable only to “fee
payments.” See Sanok v. Grimes, 662 P.2d 693, 694 n.1 (Or. 1983) (considering a
rule’s title to aid in its interpretation); Ha v. Bd. of Parole & Post-Prison
3 Supervision, 386 P.3d 70, 73 (Or. Ct. App. 2016) (same). “Fee” and “payment”
are not defined terms in the regulations, but the dictionary definition of “fee”
denotes a more limited meaning than “payment.” See Comcast Corp. v. Dep’t of
Revenue, 337 P.3d 768, 776 & n.7 (Or. 2014) (noting that Oregon courts look to
Webster’s Third New International Dictionary to discern the meaning of undefined
terms). At the very least, the title’s reference to “fee payments” militates against
the broadest reading of “any payment” proposed by Appellants.
While the text is inconclusive, we also look to the surrounding context.
Lake Oswego Pres. Soc’y v. City of Lake Oswego, 379 P.3d 462, 469 (Or. 2016).
An administrative rule’s context includes “other provisions of the same rule, other
related rules, the statute pursuant to which the rule was created, and other related
statutes.” See Oil Re-Ref. Co., 388 P.3d at 1078 (citation omitted). An
examination of the Rule’s place in the broader context of the Motor Vehicle Price
and Sales Disclosure Rules, Oregon Administrative Rule 137-020-0020, supports
the Appellees’ proffered interpretation of the Rule.
First, the third-party insurance and service products at issue in this matter are
the subject of a comprehensive regulatory scheme that employs consistent
language conspicuously absent from the rule at hand. See Or. Admin. R. 137-020-
0020(3)(f), (j), (l), (m) (referring consistently to “additional goods, accessories,
services, products or insurance”). While these other rules impose a number of
4 restrictions and obligations on dealerships, notably, they do not require the
disclosure of the price paid by a dealership to purchase the products. Id. It would
be strange that such a requirement would be ambiguously added to Oregon
Administrative Rule 137-020-0020(3)(k), while conspicuously missing from the
other provisions where it would most naturally be located. This is some indication
that the Rule here was not meant to tacitly require such disclosures under the
umbrella of “any payments,” departing from the specific, unambiguous, and
consistent language used elsewhere to regulate the same products.
Second, at least one other disclosure rule would be stripped of its effect
altogether by Appellants’ proposed expansive interpretation. See id. 137-020-
0020(3)(d) (the “Limitations on Offering Price Rule”). The Limitations on
Offering Price Rule requires a dealer to itemize “the dealer’s actual cost for freight
. . . and the actual cost of setup and dealer preparation” if those costs will be added
to or subtracted from the MSRP of the vehicle. Id. The price paid to a third party
to freight and prepare a vehicle for sale would fall under the Appellants’ proposed
reading of “any payment.” Their interpretation of the Undisclosed Fee Payments
Rule would thus effectively supplant the Limitations on Offering Price Rule, by
requiring third-party freight and preparation costs to always be disclosed,
regardless of whether the costs affect the vehicle’s offering price. In sum, the
5 surrounding regulatory context heavily favors Appellees’ narrow reading of the
Undisclosed Fee Payments Rule.
So, too, does the rule-making history. Under Oregon’s interpretive
framework, rule-making history includes the official commentary.1 State v.
Serrano, 210 P.3d 892, 900 (Or. 2009) (en banc); State v. McClure, 692 P.2d 579,
585 (Or. 1984) (en banc). The Official Commentary to the Undisclosed Fee
Payments Rule supports Appellees’ narrow reading. It does so in two ways. First,
the Official Commentary’s use of the term “payment” informs the way “payment”
is understood in the Rule itself. While the parties dispute the meaning of
“payment,” they agree, and the plain text of the Rule confirms, that the $100
minimum applies only to referral fees. Because the Official Commentary states
that the $100 minimum applies to “payment[s],” this reinforces the idea that the
rule-makers used the two terms interchangeably. That is, that “payment” means
“referral fee.” Under this understanding of the key terms, the ostensibly expansive
“any payment” language in the Rule’s first clause really means “any referral fee,”
and the Rule requires only the disclosure of referral fees greater than $100.
1 The parties submitted competing affidavits by members of the 2015 advisory committee. But “subsequent statements by legislators are not probative of the intent of statutes already in effect.” Salem-Keizer Ass’n of Classified Emps. v. Salem-Keizer Sch. Dist. 24J, 61 P.3d 970, 974 (Or. Ct. App. 2003) (alteration marks omitted) (citation omitted). The competing declarations are not probative of the Rule’s meaning, and we do not consider them.
6 Second, the only examples of payments in the Official Commentary are
referral fee payments. That neither the Rule nor the Official Commentary ever
provides an example of any sort of payment other than a referral fee bolsters the
conclusion that the Rule is meant to apply exclusively to referral fee payments.
Based on this analysis, the Rule’s second clause is more naturally read to
refine the scope of the Rule as a whole to referral fee payments of greater than
$100, and not merely to create a limited exception from a broader requirement.
Because this meaning is apparent from the Rule’s text, context, and history, we
need not resort to general maxims of construction. See Gaines, 206 P.3d at 1051.
AFFIRMED.