Burke v. Children's Services Division

• Decision Date: 26 July 1976
• Citation: 26 Or.App. 145,552 P.2d 592
• Parties: Sandra BURKE, Individually and on behalf of all others similarly situated, Appellant, v. CHILDREN'S SERVICES DIVISION et al., Respondents.
• Court: Oregon Court of Appeals

Page 592

552 P.2d 592

26 Or.App. 145

Sandra BURKE, Individually and on behalf of all others similarly situated, Appellant, v. CHILDREN'S SERVICES DIVISION et al., Respondents.

Court of Appeals of Oregon.

Argued and Submitted May 24, 1976.

Decided July 26, 1976.

Richard T. Aboussie, Legal Aid Service--Multnomah Bar Association, Inc., Portland, argued the cause for appellant. With him on the briefs was Michael H. Marcus, Legal Aid Service--Multnomah Bar Association, Inc., Portland.

Kevin L. Mannix, Asst. Atty. Gen., Salem, argued the cause for respondents. With him on the brief were W. Michael Gillette, Sol. Gen., and Lee Johnson, Atty. Gen., Salem.

Before SCHWAB, C.J., and FORT and LEE, JJ.

SCHWAB, Chief Judge.

The issue in this case is what is an 'internal management directive' which is exempt from the rule-making provisions of Oregon's Administrative Procedures Act (APA) as distinguished from a 'rule' which requires, inter alia, notice and hearing prior to adoption. ORS 183.310(7)(a).

Plaintiff, an employed mother of three children, is a recipient of public assistance from the Public Welfare Division (PWD) of the Department of Human Resources under the Aid to Dependent Children program. Until February 15, 1975, she was receiving additional assistance under the Aid to Dependent Children program from the Children's Services Division (CSD) of the Department of Human Resources. This additional assistance was in the form of direct payments from CSD to those who provided day care for plaintiff's children so that plaintiff could work.

In December 1974 CSD became aware of a potential budget deficit. To avoid this, direct payments for child care were terminated on February 15. At that time PWD began to allow child-care expenses as a part of its welfare grants, but in an amount lesser than the amount previously paid by CSD.

CSD sent notice to plaintiff of the termination of payments for day care on February 13. The notice was received on February 15, the effective date of the action. Plaintiff and others similarly situated were not granted an opportunity to be heard concerning the relative merits of other options available to CSD or the effect of the termination of direct day-care payments on their lives.

Plaintiff brought this suit to invalidate the action terminating direct day-care payments on the grounds (1) that the action was not taken in compliance with the Oregon APA, ORS ch. 183, (2) that the action was not taken in compliance with applicable federal regulations, and (3) that the action denied pliantiff due process of law in violation of the Fourteenth Amendment to the United States Constitution. The crux of plaintiff's complaint was that she received neither adequate notice of CSD's action nor a hearing. The trial court's conclusions of law were adverse to plaintiff on all three grounds.

Unless a rule is promulgated according to statute, ORS 183.335, and filed with the Secretary of State, ORS 183.355, it is not effective. ORS 183.310(7) (a) defines 'rule':

"Rule' means any agency directive, regulation or statement of general applicability that implements, interprets or prescribes law or policy, or describes the procedure or practice requirements of any agency. The term includes the amendment or repeal of a prior rule, but does not include:

'(a) Internal management directives, regulations or statements between agencies, or their officers or their employes, or within an agency, between its officers or between employes, unless hearing is required by statute, or action by agencies directed to other agencies or other units of government.'

The trial court concluded, and defendants argue here, that the action taken by CSD on February 15 was an 'internal management directive' and therefore exempt from the rule-making provisions of the APA.

No attempt has previously been made in Oregon to define 'internal management directive.' It is a term which does not lend itself to precise definition. Consequently, its meaning can best be established through a series of illustrations.

1. The Federal Administrative Procedures, Act, 5 U.S.C. § 1002 (1958), contained exemption from the requirement that every agency publish in the Federal Register descriptions of its organization and all substantive rules adopted by it. At the time the federal cases discussed below were decided, publication was not required 'to the extent that there is involved * * * Any matter relating solely to the internal management of an agency * * *.' (Emphasis supplied.) ¹ The phraseology of this exemption from the publication requirement is roughly equivalent to Oregon's exemption of 'internal management directives' from the rule-making provisions of our APA.

In United States v. Hayes, 325 F.2d 307 (4th Cir. 1963), the district court held that the Comptroller General's designation of one of his employes to certify copies of records in the General Accounting Office was invalid because it was not published in the Federal Register. The Court of Appeals held that publication was not required because the Comptroller General's action was a 'matter relating soley to the internal management of an agency.' The court stated:

'To be within the publication requirement of § 3(a), a step in the agency's operation must affect private or public interests more directly than does the attestation of its records. It must, too, be of such a nature that knowledge of it is needed to keep the outside interests informed of the agency's requirements in respect to any subject within its competence, as a guide in the conduct of their day-to-day affairs, and to instruct them in regard to the presention to the agency of any such subject for impartial consideration or action thereon * * *.' 325 F.2d at 309.

T.S.C. Motor Freight Lines, Inc. v. United States, 186 F.Supp. 777 (S.D.Tex.1960), Aff'd sub nom Herrin Transportation Co. v. United States et al., 366 U.S. 419, 81 S.Ct. 1356, 6 L.Ed.2d 387 (1961), involved proceedings on applications for certificates of public convenience and necessity for motor carriage. The Interstate Commerce Commission granted two applications using a vote-by-notation procedure. This procedure allowed commission members to vote by mail rather than at a conference at which they were assembled. Four motor carriers brought an action to set aside the certificates as invalid because the vote-by-notation procedure was not published in the Federal Register. The court held that publication of the procedure was specifically exempted from the publication requirement:

'* * * Obviously the procedure is solely a matter of internal procedure within the Commission. It does not purport to inform parties of the procedure which is to be taken for the presentation of matters to the Commission. It is not designed for the guidance of the public because it in no way affects any steps which interested parties must take or not take in order to obtain, or review, action by the Commission * * *.' 186 F.Supp. at 786.

In Cafeteria & Restaurant Wkrs. U., Local 473 v. McElory, 109 U.S.App.D.C. 39, 284 F.,2d 173 (1960), Aff'd 367 U.S. 886, 81 S.Ct. 1743, 6 L.Ed.2d 1230 (1961), a short-order cook employed by a private concessionaire operating a restaurant at the Naval Gun Factory was denied retention of her identification badge which had permitted her to enter the premises. The denial by the naval officer in command of the factory was based on the ground that the cook had failed to meet security requirements set out in navy regulations and manuals. The cook's union argued that...