LaForge v. Dept. of Human Services

241 P.3d 313, 237 Or. App. 500
CourtCourt of Appeals of Oregon
DecidedSeptember 29, 2010
DocketA142248
StatusPublished
Cited by5 cases

This text of 241 P.3d 313 (LaForge v. Dept. of Human Services) 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
LaForge v. Dept. of Human Services, 241 P.3d 313, 237 Or. App. 500 (Or. Ct. App. 2010).

Opinion

241 P.3d 313 (2010)
237 Or. App. 500

Anita LaFORGE, Petitioner,
v.
DEPARTMENT OF HUMAN SERVICES, Respondent.

A142248.

Court of Appeals of Oregon.

Argued and Submitted August 25, 2010.
Decided September 29, 2010.

*314 Stephen Skipton, Eugene, argued the cause for petitioner. With him on the briefs were Lane County Legal Aid and Advocacy Center, and Karen A. Berkowitz, Deborah G. Weston, and Oregon Law Center.

Karla H. Ferrall, Assistant Attorney General, argued the cause for respondent. With her on the brief were John R. Kroger, Attorney General, and Jerome Lidz, Solicitor General.

Before SCHUMAN, Presiding Judge, and WOLLHEIM, Judge, and ROSENBLUM, Judge.

SCHUMAN, P.J.

Petitioner challenges a rule promulgated by the Department of Human Services (DHS). The rule establishes the criteria and procedures for obtaining a license to operate a residential care facility. According to petitioner, the rule is invalid because the statute that authorizes DHS to license residential care facilities requires the agency to consider the applicant's willingness to serve Medicaid recipients, and the rule permits the agency to grant a license without undertaking that consideration. We agree with petitioner, and we therefore hold that the rule is invalid.

The Oregon Administrative Procedures Act provides that "any person" may petition the Court of Appeals to determine the validity of a rule. ORS 183.400.[1] In *315 making that determination, we may consider only the rule under review, the statute authorizing the rule, and documents necessary to demonstrate compliance with rulemaking procedures. ORS 183.400(3). Based on our review of those sources, we must declare the rule invalid if we conclude that it violates constitutional provisions, exceeds the statutory authority of the agency that adopted the rule, or was adopted without complying with rulemaking procedures. ORS 183.400(4). Petitioner does not assert that the disputed rule is unconstitutional or that its adoption was procedurally flawed; her only assertion is that it exceeds DHS's statutory authority. A rule runs afoul of that requirement if it "depart[s] from a legal standard expressed or implied in the particular law being administered, or contravene[s] some other applicable statute. * * * To the extent that the rule departs from the statutory policy directive, it `exceeds the statutory authority of the agency' within the meaning of those words in ORS 183.400(4)(b)." Planned Parenthood Assn. v. Dept. of Human Res., 297 Or. 562, 565, 573, 687 P.2d 785 (1984).

Although our analysis and decision derive exclusively from the challenged rule and the statute under whose authority it was promulgated, we place the rule and statute in historical context because doing so may prove helpful in understanding the dispute. In 2008, the Legislative Assembly confronted a perception that residential care facilities were favoring some classes of recipients—in particular, those who paid with their own resources, as opposed to those whose fees were paid by Medicaid. Apparently in response to that perception, the legislature passed House Bill 3626, Oregon Laws 2008, chapter 18 (Special Session), which amended ORS 410.851 and ORS 443.420. The amended statutes are directed to DHS, the agency that is responsible for licensing and regulating residential care facilities for elderly and disabled Oregonians and that has authority to promulgate rules for carrying out those responsibilities. ORS 443.400-443.460.

The amended ORS 410.851(5) provides, among other things, that DHS "shall implement policies that offer incentives to providers for entering into Medicaid contracts with the department." The amended ORS 443.420 provides, in part:

"(1) A person applying for a license under ORS 443.415 [to maintain and operate a residential care facility] must, in the judgment of the director of [DHS], be a person:
"(a) Who demonstrates an understanding and acceptance of the rules governing residential facilities;
"* * * * *
"(6) Prior to an initial licensure of a residential care facility, [DHS] shall consider:
"(a) The license applicant's history of regulatory compliance and operational experience;
"(b) The need in the local community for the services offered by the license applicant, as demonstrated by a market study produced by the license applicant;
"(c) The willingness of the license applicant to serve underserved populations; and
"(d) The willingness of the license applicant to contract with [DHS] to provide services through the state medical assistance program."

(Emphasis added.)[2] Medicaid is a "state medical assistance program." ORS 410.040(10). Thus, as petitioner argues, the *316 statute requires DHS to consider a license applicant's willingness to accommodate Medicaid recipients.

After these statutes were passed, and in order "[t]o comply with House Bill 3626,"[3] DHS promulgated OAR XXX-XXX-XXXX. Section 2 of that rule provides, in part:

"Prior to beginning new construction of a building, or purchase of an existing building with intent to request a license, the applicant must meet the following criteria to receive approval from SPD [that is, the Seniors and People with Disabilities Division of DHS] for a potential license:
"(a) Applicants must demonstrate a past history, if any, of substantial compliance with all applicable state and local laws, rules, codes, ordinances, and permit requirements in Oregon, and the ability to deliver quality services to citizens of Oregon; and
"(b) The applicant, including applicants for change of ownership of existing licensed facilities, must provide a letter of intent as set forth in section (3) of this rule, and demonstrate a willingness to provide care and services for an underserved population."

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Cite This Page — Counsel Stack

Bluebook (online)
241 P.3d 313, 237 Or. App. 500, Counsel Stack Legal Research, https://law.counselstack.com/opinion/laforge-v-dept-of-human-services-orctapp-2010.