Jeld-Wen, Inc. v. EQC

• Court: Oregon Court of Appeals
• Writing for the Court: DEITS, C.J.
• Citation: Jeld-Wen, Inc. v. EQC, 986 P.2d 582, 162 Or. App. 100 (Or. App. 1999)
• Decision Date: 04 August 1999
• Parties: JELD-WEN, INC., an Oregon corporation, Petitioner, v. ENVIRONMENTAL QUALITY COMMISSION, Respondent.

986 P.2d 582

162 Or. App. 100

JELD-WEN, INC., an Oregon corporation, Petitioner, v. ENVIRONMENTAL QUALITY COMMISSION, Respondent.

(AQP-ER-97102; CA A101910)

Court of Appeals of Oregon.

Argued and Submitted January 19, 1999.

Decided August 4, 1999.

Jay T. Waldron, Portland, argued the cause for petitioner. With him on the brief were Neal A. Hueske and Schwabe, Williamson & Wyatt, P.C.

Denise Fjordbeck, Assistant Attorney General, argued the cause for respondent. With her on the brief were Hardy Myers, Attorney General, and Michael D. Reynolds, Solicitor General.

Before EDMONDS, Presiding Judge, and DEITS, Chief Judge,¹ and ARMSTRONG, Judge.

DEITS, C.J.

Petitioner Jeld-Wen, Inc., seeks review of a declaratory ruling of the Environmental Quality Commission (EQC) in which EQC concluded that the sewer system of the City of Klamath Falls (the City) was "available" to petitioner under ORS 454.655(4) and OAR 340-071-0160(5)(f). The ruling means that, under the statute and the rule, petitioner is not entitled to a permit to repair and enlarge its septic tank and drainfield sewage system but must, instead, connect to the City's system. EQC also rejected petitioner's constitutional challenges to that requirement. We affirm.

We take the facts from EQC's order, which adopted the facts that petitioner presented in its request for a declaratory ruling. See OAR 137-002-0040 (facts on declaratory ruling are those presented in petition or in statement to which all parties have stipulated). Petitioner owns and operates a wood products facility in Klamath County. The facility abuts the Klamath Falls city limits and is within the City's urban growth boundary. The City is able to and will provide sewer service to petitioner, provided that petitioner's property is annexed to the City. There is no available county or other sewer system. Since 1978, petitioner has operated its current septic tank and drainfield system under a permit from the Department of Environmental Quality (DEQ); before May 1997, there were no problems with or regulatory violations related to that system.

In early May 1997, petitioner discovered signs that its system was potentially failing. It immediately notified DEQ, which evaluated the site and determined that a modified system was acceptable under certain conditions. DEQ, nevertheless, denied petitioner's request for a permit for the modified system because it concluded that the City's system was available to petitioner, even though the City would provide sewer service only if petitioner agreed to annexation. Petitioner does not want to be annexed to the City because doing so would require it to pay significantly higher property taxes in addition to the connection and user fees for the sewer.

At DEQ's suggestion, petitioner sought a declaratory ruling from EQC, asking it to interpret the statute and to hold that the City's sewer system is not available because petitioner must consent to annexation as a condition of receiving service. See ORS 183.410. EQC agreed to issue a declaratory ruling and appointed a presiding officer who, after hearing argument, prepared a proposed order essentially accepting DEQ's position. After consideration, EQC, by a three to two vote, adopted the proposed order. Petitioner then sought judicial review. ORS 183.482.²

ORS 454.655 generally prohibits constructing or installing a subsurface sewage disposal system without a permit from DEQ. Subsection (4) requires DEQ to issue a permit after receipt of an application and permit fee, if DEQ finds that the proposed construction will be in accordance with EQC's rules. However, the subsection goes on to provide that "[n]o permit shall be issued if a community or area-wide sewerage system is available which will satisfactorily accommodate the proposed sewage discharge." EQC implemented that portion of the statute in OAR 340-071-0160(5)(f), which requires denial of an application for a permit if:

"A sewerage system which can serve the proposed sewage flow is both legally and physically available, as described in paragraphs (A) and (B) of this subsection:

"(A) Physical Availability. * * *[³ ]

"(B) Legal Availability. A sewerage system shall be deemed legally available if the system is not under a Department connection permit moratorium, and the sewerage system owner is willing or obligated to provide sewer service."

The critical issue here is whether the City's sewer system is available to petitioner under the statute when the City's willingness to provide sewer service, which is necessary for the system to be legally available under the rule, is contingent on petitioner's agreement to annexation to the City. In answering that question, it is helpful first to discuss the methods for determining the meaning of the statute and the agencies' authority under it.

We begin with the statutory words. See PGE v. Bureau of Labor and Industries, 317 Or. 606, 610-12, 859 P.2d 1143 (1993). The possibly relevant dictionary definitions of "available," the crucial word, are "capable of use for the accomplishment of a purpose: immediately utilizable" and "that is accessible or may be obtained: personally obtainable[.]" Webster's Third New Int'l Dictionary, 150 (unabridged ed 1993). As a physical matter, the City's sewer system is "capable of use" to accomplish the purpose of disposing of petitioner's sewage, is "accessible" to petitioner, and is something that petitioner may obtain. It is thus "available" if those are the relevant definitions.⁴

On the other hand, the system is not "immediately utilizable." Even without regard to the annexation issue, it would take some time to negotiate the exact terms for providing service and there would be a delay between a decision to connect and planning for and completing the actual physical connection. However, those things would inevitably arise in every instance that the statute required connection to a community or area-wide sewage system. Consequently, it is questionable that the legislature intended "available" to mean immediately utilizable. At the very least, the statute is ambiguous, because there are at least two plausible meanings of the time period within which a system must be utilizable in order to be "available." On review, the parties do not assert that there is any relevant legislative history. Before EQC, they appear to have agreed that there is none.

The statutory term "available," is an "inexact" term under Springfield Education Assn. v. School Dist. No. 19, 290 Or. 217, 224-25, 621 P.2d 547 (1980): The legislature has made a complete policy statement, although its precise meaning may not always be obvious.⁵ Under Springfield, "[w]here the applicability of a term is not certain, its meaning is not a question of lexigraphy, but rather a question of the policy which is incorporated in the legislative choice of that word." Id. at 226, 621 P.2d 547. It is EQC's function to determine in the first instance what interpretation of the term best effectuates the statutory policy; in a specific instance, it may do so either by rule or by decision in a specific case. We review the agency's application to determine whether it is within the legislative policy that inheres in the term, giving an appropriate degree of credence to EQC's explicit reasoning, particularly in instances where the agency was involved in the legislative process or if we infer that the agency has expertise based on qualifications of its personnel or because of its experience in the application of the statute. Id. at 226-28, 621 P.2d 547; see also England v. Thunderbird, 315 Or. 633, 637-38, 848 P.2d 100 (1993).

An inexact term under Springfield is not necessarily ambiguous under PGE. Rather, the inexactitude may simply indicate that the legislature left the specific application of its policy to the administrative agency. In this case, EQC, in the rule, interpreted the statutory term by providing details that are consistent with the legislature's policy choice. That is something that is within its authority in carrying out its responsibilities under the statute. The fact that the legislature expressed its policy choice in a term whose meaning is ambiguous in this context is coincidental, not a normal consequence of the use of an inexact term.

Under Springfield and PGE, when a term is both inexact and ambiguous, the administrative process may assist both in applying the legislative policy to the specific situation and in resolving the overall ambiguity in the term. In complying with its obligations under Springfield, the agency may describe the practical application of the term in a way that will suggest the meaning that the legislature intended in using it. Under both cases, this court has the responsibility for construing the statute, but we do so in the context of the agency's initial authority to act under it. See, e.g., Shubert v. Blue Chips, 151 Or.App. 710, 720, 951 P.2d 172 (1997), rev. allowed, 327 Or. 583, 971 P.2d 411 (1998); SAIF v. Cline, 135 Or.App. 155, 158-59, 897 P.2d 1172, rev. den. 321 Or. 560, 901 P.2d 858 (1995); Broadway Deluxe Cab v. Natl. Council on Comp. Ins., 133 Or.App. 324, 329-30, 891 P.2d 1326, rev. den. 321 Or. 246, 895 P.2d 786 (1995). In this case, where we reach the third level of analysis under PGE, EQC's explanation of the practical application of the statute can be particularly helpful in understanding what the legislature intended by adopting it.⁶

EQC has given its understanding of the meaning of the statute in two ways: it first adopted OAR 340-071-0160(5)(f), and it then interpreted both the statute and the rule in this case. The rule expands on the statutory requirement by dividing "available" into "physical availability" and "legal availability." In subsection (5)(f)(A), EQC described physical availability through the relationship between the number of dwellings or the amount of expected sewage flow and the distance from the property to the nearest connection point. In subsecti...