Planned Parenthood Ass'n, Inc. v. Department of Human Resources of State of Oregon

• Decision Date: 21 August 1984
• Docket Number: No. CA,CA
• Citation: 297 Or. 562,687 P.2d 785
• Parties: , Medicare & Medicaid Guide P 34,146 PLANNED PARENTHOOD ASSOCIATION, INC., et al., Respondents on Review, v. DEPARTMENT OF HUMAN RESOURCES OF the STATE OF OREGON; Leo Hegstrom, Director of the Department of Human Resources for the State of Oregon; Adult & Family Services Division of the Department of Human Resources for the State of Oregon; Keith Putnam, Administrator of the Adult & Family Services Division; Maureen Reyes, Medical Programs Eligibility Specialist of the Adult & Family Services Division; Petitioners on Review. A20856; SC 29722.
• Court: Oregon Supreme Court

Page 785

687 P.2d 785

297 Or. 562, Medicare & Medicaid Guide P 34,146

PLANNED PARENTHOOD ASSOCIATION, INC., et al., Respondents on Review, v. DEPARTMENT OF HUMAN RESOURCES OF the STATE OF OREGON; Leo Hegstrom, Director of the Department of Human Resources for the State of Oregon; Adult & Family Services Division of the Department of Human Resources for the State of Oregon Keith Putnam, Administrator of the Adult & Family Services Division; Maureen Reyes, Medical Programs Eligibility Specialist of the Adult & Family Services Division Petitioners on Review.

No. CA A20856; SC 29722.

Supreme Court of Oregon In Banc.

Argued and First Submitted Nov. 1, 1983.

Supplemental Memoranda Requested

April 24, 1984.

Submitted on Supplemental Memoranda

May 17, 1984.

Decided Aug. 21, 1984.

James E. Mountain, Jr., Deputy Sol. Gen., argued the cause for petitioners on review. With him on the briefs were Dave Frohnmayer, Atty. Gen., William F. Gary, Sol. Gen., and Virginia L. Linder, Asst. Atty. Gen.

Ruth Gundle, Oregon Legal Services Corp., and Stephen S. Walters, American Civil Liberties Union, Portland, argued the cause for respondents on review. With them on the briefs were Donna Meyer, Nancy Helget, Albany, and Ira Zarov, Oregon Legal Services Corp., Andrew R. Gardner, American Civil Liberties Union, Mary Klepser, Portland, Legal Advocacy for Women Fund; Pamela L. Jacklin and Susan P. Graber, Portland.

LENT, Justice.

This case was presented as a challenge based upon the Oregon Constitution to an administrative rule pursuant to ORS 183.400(4)(a). Promulgated by the Adult and Family Services Division (Division), the rule limits the availability of reimbursement for abortions within the state medical assistance program.

In addition to charging that the rule violates Article I, Section 20 of the Oregon Constitution, the individuals and public interest groups challenging the rule argued to the Court of Appeals that it violates an indigent woman's asserted "right to privacy" under the Oregon Constitution, ¹ and that it violates religious freedom guarantees of the Oregon Constitution. The Division invoked the decision of the Supreme Court of the United States in Harris v. McRae, 448 U.S. 297, 100 S.Ct. 2671, 65 L.Ed.2d 784 (1980), in which the court considered federal constitutional challenges to the Hyde Amendment similar to the state constitutional challenges raised by respondents herein. The Supreme Court's upholding of the Hyde Amendment is, according to the Division, persuasive authority that we should reject the constitutional challenges to the rule.

The Court of Appeals found that the rule violated the equal privileges and immunities clause of the Oregon Constitution (Article I, Section 20). Planned Parenthood et al v. Department of Human Resources, 63 Or.App. 41, 663 P.2d 1247 (1983). We hold that this ruling and the constitutional challenge are premature.

This court follows the principle that constitutional issues should not be decided when there is an adequate statutory basis for a decision: Douglas County v. Briggs, 286 Or. 151, 593 P.2d 1115 (1979); See State v. Lowry, 295 Or. 337, 343, 667 P.2d 996 (1983), and cases there cited at n. 4. Pursuant to ORS 183.400(4)(b), we hold that the rule is invalid because it exceeds the statutory authority of the agency.

Upon review of an administrative rule under ORS 183.400(4):

"The court shall declare the rule invalid only if it finds that the rule:

"(a) Violates constitutional provisions;

"(b) Exceeds the statutory authority of the agency; or

"(c) Was adopted without compliance with applicable rulemaking procedures."

In the proper sequence of analyzing the legality of action taken by officials under delegated authority, the first question is whether the action fell within the reach of their authority, the question which in the case of courts is described as "jurisdiction." If that is not in issue, as it is not in this case, the question is whether the action was taken by procedures prescribed by statute or regulation. Assuming that proper procedures were followed, the next question is whether the substance of the action, though within the scope of the agency's or official's general authority, departed from a legal standard expressed or implied in the particular law being administered, or contravened some other applicable statute. These steps are designed to assure that the challenged action, particularly an action challenged for arguably violating constitutional rights, in fact was authorized by the state's or local government's politically accountable policy makers. Only if the action was clearly so authorized is there any reason to decide whether the state or local government has adopted a policy that the constitution forbids. See generally State v. Harmon, 225 Or. 571, 577, 358 P.2d 1048 (1961); Wright v. Blue Mt. Hospital Dist., 214 Or. 141, 144, 328 P.2d 314 (1958); Peninsula Drainage Dist. No. 2 v. City of Portland, 212 Or. 398, 418, 320 P.2d 277 (1958); Federal Cartridge Corp. v. Helstrom, 202 Or. 557, 565, 276 P.2d 720 (1954). See also Neuhaus v. Federico, 12 Or.App. 314, 505 P.2d 939 (1973).

The rule here at issue is OAR 461-14-052, which states:

"(1) Payment will not be made for elective abortions performed except under the following conditions:

"(a) Cases in which a physician, on the basis of his or her professional judgment, has certified in writing that the abortion is necessary because the life of the woman would be endangered if the fetus were carried to term.

"(b) Cases other than in subsection (a) of this section:

"(A) Payment may be made for one (1) elective abortion (in addition to an abortion in subsection (a) of this section) if the woman is 18 years of age or older and was receiving maintenance assistance from Oregon at the time determined by a physician that conception occurred. Payment may not be made under this paragraph if payment for an abortion has been made under paragraph (B) of this subsection.

"(B) Payment may be made for two (2) elective abortions (in addition to an abortion listed in subsection (1)(a) of this rule) if the woman is 17 years of age or younger at the time determined by a physician that conception occurred and is otherwise eligible for medical assistance in Oregon.

"(2) Payment will not be made for elective abortions unless prior authorized by the Division.

"(3) Payment for elective abortions will be limited to abortions performed in a physician's office, clinic or outpatient surgery setting unless the physician specifically requests and justifies the need for hospitalization." ²

The rule represents a reaction by the Division and the Emergency Board created by ORS 291.324 to the curtailment of federal funding for elective abortions resulting from passage of the so-called Hyde Amendment.

Since the liberalization of the state's abortion law in 1969, the Division's budget had included funds for elective abortions. Between 1972 and 1977 (the effective date of the Hyde Amendment), a large portion of the funds for this budget item came from the federal Medicaid program. Under the original Hyde Amendment the only abortions that could be paid for with federal funds are those resulting from rape or incest or those required because the mother's life is threatened. ³ The amendment left the states free to pay for elective abortions out of their own funds. See Harris v. McRae, supra.

In November of 1977 the Division submitted a request to the Emergency Board (see ORS 291.326 and Or. Const., Art. III, § 3 in Appendix to this opinion) for replacement funding for elective abortions. The Emergency Board did not act directly on this request. It postponed action on the proposal and directed the Division to develop restrictions for state funded abortions and to present those restrictions in the form of an amended proposal to the Emergency Board at a later meeting. After two more meetings, the Division announced proposed restrictions on the availability of abortions in order to induce a compromise among the Emergency Board member that would result in at least limited funding. The Emergency Board approved a modified written request for funding at a third meeting. The original request by the Division was for roughly 1.86 million dollars. It would have made up for all lost federal funds. The approved request was for $481,790. In effect, the Emergency Board conditioned funding upon its approval of the rule here in question. Plaintiffs went so far as to state in their brief to the Court of Appeals that "[t]his rule was a compromise promulgated by the Oregon Legislative Emergency Board at its February 4, 1978 meeting." (App Br 5.) Since the approval of the funding request, the rule has been amended several times by the Division without any direct intervention from the Emergency Board. The present rule's primary effect of limiting the availability of reimbursement for abortions for those covered under the program is substantially the same as when funding was first approved by the Emergency Board. ⁴

Plaintiffs did not claim before the Court of Appeals or this court that the rule is invalid because it is in conflict with the purpose of the enabling legislation or that the rule is in that sense beyond the scope of the agency's authority. Nevertheless, in order to keep within the proper sequence of analysis for purposes of testing the validity of an administrative rule and to have a response by the parties to the court's concerns, the court propounded questions to be addressed by the parties. The court asked, "Is there any plausible doubt whether the rule at issue corresponds to legislative policy?"

Before the Court of Appeals and at oral argument before this court, plaintiffs argued that the rule conflicts with legislative policy in order to show for purposes of constitutional analysis that the rule furthered no legitimate state interest. According to plaintiffs, the state medical assistance program is a comprehensive...