BP W. Coast Prods., LLP v. Or. Dep't of Justice

• Citation: 396 P.3d 244,284 Or.App. 723
• Decision Date: 12 April 2017
• Docket Number: A156902
• Parties: BP WEST COAST PRODUCTS, LLP, Petitioner, v. OREGON DEPARTMENT OF JUSTICE, Respondent.
• Court: Oregon Court of Appeals

284 Or.App. 723

396 P.3d 244

BP WEST COAST PRODUCTS, LLP, Petitioner,

v.OREGON DEPARTMENT OF JUSTICE, Respondent.

A156902

Court of Appeals of Oregon.

Argued and submitted October 13, 2015.

April 12, 2017

William F. Gary, Eugene, argued the cause for petitioner. With him on the briefs were Sharon A. Rudnick and Harrang Long Gary Rudnick P.C.

Peenesh H. Shah, Assistant Attorney General, argued the cause for respondent. With him on the brief were Ellen F. Rosenblum, Attorney General, Anna M. Joyce, Solicitor General, and Denise G. Fjordbeck, Assistant Attorney General.

Scott A. Shorr, Joshua L. Ross, and Stoll Stoll Berne Lokting & Shlachter P.C. filed the brief amicus curiae for Steven Scharfstein.

Before Sercombe, Presiding Judge, and Hadlock, Chief Judge, and Tookey, Judge.^*

TOOKEY, J.

BP West Coast Products, LLP (BP) challenges the validity of OAR 137-020-0150, a rule adopted by the Attorney General, which pertains to a service station's posting of gas prices on signs visible from the street and dispensing devices. BP argues that "[t]he Administrative Rule's definition of ‘condition’ and all portions of the Rule that incorporate or rely on the definition of ‘condition’ are invalid because they exceed the authority of the Attorney General to adopt." We disagree; ORS 646.930 establishes the minimum requirements for a service station's posting of fuel prices, and it does not prohibit the Attorney General from adopting rules under ORS 646.608(1)(u) to identify and prohibit "any other unfair or deceptive conduct" concerning the display of fuel prices. Accordingly, we conclude that OAR 137-020-0150(1)(b) is valid.

ORS 646.930 establishes the statutory requirements that a service station must meet if it has a fuel price sign that is visible from the street. Subsection (1)(a) provides that a person operating a "service station, business, or other place for the purpose of retailing and delivering gasoline, diesel or other fuel" may "display on a sign visible from the street the lowest cash prices charged for the sale of the lowest grades of gasoline, diesel or other fuel." Subsection (2)(b) provides that, if "a cash price displayed on a sign is available only under some conditions, the sign and the dispensing device must clearly state the conditions."

With that statutory framework in mind, we turn to the challenged rule provision, OAR 137-020-0150(1)(b). The definition of "condition" was added when the rule was revised in 2010. OAR 137-020-0150(1)(b) defines "condition" as "any payment method (e.g., credit), service level (e.g., full service or mini service), or any other modifying circumstance affecting the price per unit of measurement of motor vehicle fuel from the lowest cash price[.]"

Our review of OAR 137-020-0150 is governed by ORS 183.400. "Under ORS 183.400(1), ‘any person’ may petition this court to determine the validity of a rule." Assn. of Acupuncture v. Bd. of Chiropractic Examiners , 260 Or.App. 676, 678, 320 P.3d 575 (2014). However, "[i]n reviewing a rule challenge under that statute, we may declare the rule invalid only 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." Id . Under ORS 183.400(4)(b), our determination of whether OAR 137-020-0150(1)(b) exceeds the statutory authority of the Attorney General to adopt the rule "is limited to a determination of whether the rule, as written, is valid[.]" GTE Northwest, Inc. v. Public Utility Commission , 321 Or. 458, 464, 900 P.2d 495 (1995), cert. den. , 517 U.S. 1155, 116 S.Ct. 1541, 134 L.Ed.2d 646 (1996). BP's facial challenge to OAR 137-020-0150(1)(b) fits within the prescribed scope of our review.¹

We agree with the parties that the term "conditions," as used in ORS 646.930(2)(b), is an inexact term. See Nulph v. Board of Parole , 279 Or.App. 652, 657-58, 381 P.3d 948 (2016), rev. allowed , 360 Or. 851, 389 P.3d 1135 (2017) (discussing the three categories of statutory terms). Because "conditions" is an inexact term, we examine the statute to determine what the legislature intended by using the term "conditions." See Springfield Education Assn. v. School Dist. , 290 Or. 217, 223, 621 P.2d 547 (1980) ("Inexact terms * * * require agency interpretation and judicial review for consistency with legislative policy."). "If the agency interpretation is embodied in a rule, and the rule is otherwise lawful, the rule will be upheld on judicial review * * * if the interpretation can be determined to be within the statutory intent[.]" Id . at 228, 621 P.2d 547 (citing ORS 183.400(4)(b) ).²

As noted, BP argues that the definition of "condition" and all portions of OAR 137-020-0150 that incorporate the definition of "condition" are invalid under ORS 183.400(4)(b) because the definition of "condition" under OAR 137-020-0150(1)(b) exceeds the Attorney General's rulemaking authority. BP notes that "the legislature expressly delegated to the Attorney General the limited authority to adopt rules ‘to aid in the implementation’ " of ORS 646.930 under Oregon Laws 1985, chapter 751, section 2, and, as a result, "the Attorney General's rulemaking authority under ORS 646.930 is limited to the adoption of rules that are consistent with the legislative policy expressed in the statute." The crux of BP's argument is that ORS 646.930 prohibits the Attorney General from adopting a rule that defines "conditions" in a way that could require "the display of conditions that increase the lowest cash price rather than conditions to obtaining the lowest cash price." See Garrison v. Dept. of Rev. , 345 Or. 544, 548-49, 200 P.3d 126 (2008) ("[A] rule created within a statutory scheme cannot amend, alter, enlarge upon, or limit statutory wording so that it has the effect of undermining the legislative intent.").

The Attorney General contends that the legislature has given the Attorney General the authority under ORS 646.608(1)(u) to adopt rules so that the Attorney General can protect consumers and effectively implement ORS 646.930. In the Attorney General's view, " ORS 646.930, as amended, is not a legislative blessing allowing gasoline retailers to provide misleading information to consumers; [and OAR 137-020-0150 ] is fully consistent with its actual legislative purposes, as revealed by the text, context, and legislative history."

We begin by identifying the legal framework established by OAR 137-020-0150(1)(b). Again, paragraph (b) of subsection (1) defines "condition" as "any payment method (e.g., credit), service level (e.g., full service or mini service), or any other modifying circumstance affecting the price per unit of measurement of motor vehicle fuel from the lowest cash price[.]" Thus, the revised rule, OAR 137-020-0150(1)(b), establishes the parameters for a "condition" as any modifying circumstance affecting the lowest cash price.

OAR 137-020-0150(3)(d)(A), in turn, requires the disclosure of any condition affecting the price. The pertinent text of that rule provides that, "[i]f the lowest cash prices are available only under some conditions[, t]he retailer must clearly and conspicuously display all conditions on each street sign, price sign and dispensing device (e.g., cash only, mini serve)." OAR 137-020-0150(3)(d)(A). Under OAR 137-020-0150(3)(d)(A), the Attorney General's use of the term "condition" requires a service station to display any modifying circumstance affecting the price per unit of motor vehicle fuel from the lowest cash price. Thus, we must examine the statutes that the Attorney General is implementing to determine whether the legislature intended to prohibit the Attorney General from adopting rules that require the display of such modifying circumstances that affect the price per unit from the lowest cash price.

OAR 137-020-0150 pertains to the display of fuel signs and, as the parties note, was adopted pursuant to Oregon Laws 1985, chapter 751, section 2,³ and ORS 646.608(1)(u). We apply the principles set forth in PGE v. Bureau of Labor and Industries , 317 Or. 606, 610-12, 859 P.2d 1143 (1993), and State v. Gaines , 346 Or. 160, 171-73, 206 P.3d 1042 (2009) to determine whether OAR 137-020-0150"coincides with the legislative policy" of the enabling statutes. Springfield Education Assn. , 290 Or. at 228, 621 P.2d 547 ; see Nay v. Dept. of Human Services , 360 Or. 668, 681, 385 P.3d 1001 (2016) (ORS 183.400(4)(b) requires examining whether the rule "corresponds to the statutory policy" (internal quotation marks and citation omitted)).

In light of the text, context, and legislative history discussed below, we decline to imply the limitation BP suggests. Instead, we conclude that ORS 646.930 establishes the minimum requirements for a service station's posting of fuel prices, and it does not prohibit the Attorney General from adopting rules under ORS 646.608(1)(u) to identify and prohibit "any other unfair or deceptive conduct" concerning the display of fuel prices. See ORS 646.608(4) ("An action or suit may not be brought under subsection (1)(u) of [ORS 646.608 ] unless the Attorney General has first established a rule * * * declaring the conduct to be unfair or deceptive in trade or commerce.").

We start with the statutory text of ORS 646.930 because it is "the best evidence of the legislature's intent."

PGE , 317 Or. at 610, 859 P.2d 1143. ORS 646.930 establishes requirements related to the posting of fuel price signs at a service station. ORS 646.930(1)(a) provides that a person operating a "service station, business, or other place for the purpose of retailing and delivering gasoline, diesel or other fuel" may "display on a sign visible from the street the lowest cash prices charged for the sale of the lowest grades of gasoline, diesel or other fuel." Under ORS 646.930(2)(b), if "a cash price displayed on a sign is available only under some conditions, the sign and the dispensing device must clearly state the conditions." The...