Van Gordon v. Oregon State Bd. of Dental Examiners

Decision Date06 July 1981
Docket NumberNo. CA,CA
Citation666 P.2d 276,63 Or.App. 561
PartiesLarry R. VAN GORDON, D.M.D., Petitioner, v. OREGON STATE BOARD OF DENTAL EXAMINERS, Respondent. 17215. . On Petitioner's Petition for Attorney Fees
CourtOregon Court of Appeals

Don H. Marmaduke and Barbee B. Lyon, Portland, for petition.

Jan Peter Londahl, Asst. Atty. Gen., Salem, contra.

Before GILLETTE, P.J., and WARDEN and YOUNG, JJ.

GILLETTE, Presiding Judge.

This opinion addresses a petition for attorney fees that was filed by petitioner under ORS 183.495 after he prevailed on judicial review of a final order from the Oregon State Board of Dental Examiners (Board). We conclude that an attorney fee award is appropriate under the facts of this case and award petitioner $34,263.

On May 19, 1977, the Board initiated license revocation proceedings against petitioner, charging him with unprofessional conduct, specifically,

"prescribing or dispensing drugs outside the scope of dentistry, [2] obtaining fees by misrepresentation or fraud and [3] performing unnecessary treatment." 52 Or.App. at 751-52, 629 P.2d 848.

The first charge was found by the hearings officer to be unsupported by the evidence and was dismissed at the close of the contested case hearing. However, the Board found petitioner guilty of the other two charges and issued a final order revoking his license to practice dentistry. Petitioner sought judicial review of the order, and we reversed. See Van Gordon v. Ore. State Bd. of Dental Examiners, 52 Or.App. 749, 629 P.2d 848 (1981).

With respect to the charge that petitioner had performed unnecessary treatment, the Board found that petitioner had treated nonexistent cavities. This finding was based solely on x-rays of the teeth that petitioner had treated although, according to the Board's own findings,

" * * * x-rays, alone, are not sufficient to fully describe * * * preoperative evaluations. * * * [An] examination of the actual mouth [is required] to fully determine the extent of * * * the need for restoration * * *." 52 Or.App. 755, 629 P.2d 848.

Because examination of the patients' mouths might have disclosed the cavities that petitioner purported to treat, we held that the overtreatment findings were not supported by substantial evidence. 52 Or.App. at 775, 629 P.2d 848.

With respect to the remaining charge, the Board found that petitioner had overcharged or had obtained fees by misrepresentation. It based this finding exclusively on exhibits that had never been admitted in evidence. Because the exhibits were not in the record, we held that the Board's findings were not supported by substantial evidence in the record. In summary, we reversed the Board's order because we found that there was "no evidence to support either the charge of overtreatment or overcharging." (Emphasis supplied.) 52 Or.App. at 767, 629 P.2d 848.

Petitioner then filed this petition claiming attorney fees under ORS 183.495, which was enacted in 1975 as a part of an act that made numerous changes in the State Administrative Procedure Act (APA). It provides:

"Upon judicial review of a final order of an agency when the reviewing court reverses or remands the order it may, in its discretion, award costs, including reasonable attorney fees, to the petitioner to be paid from funds appropriated to the agency." 1

To date, we have ruled on but a few petitions filed under this statute and have denied attorney fees in each instance. 2 Two of these cases have been reversed by the Supreme Court and remanded to us for reconsideration of the attorney fee question, and we have pending several additional requests for attorney fees under ORS 183.495, most of which are decided this date. The frequency with which prevailing petitioners have invoked the statute leads us to believe that we can assist everyone concerned by enunciating general guidelines to indicate the types of cases in which we are likely to award attorney fees under ORS 183.495. These guidelines are not hard and fast; they are intended to alert agencies that certain types of actions are likely to result in fee awards against them and to alert petitioners that in certain types of cases we are likely to look with favor upon fee petitions. 3

As a preliminary matter, we note that we have very broad discretion under ORS 183.495. The statutory language places no limits on our power to award attorney fees beyond restricting it to cases where we have reversed or remanded an agency's final order. The legislative history, which we discussed in Brown v. Adult and Family Services, supra, n. 1, indicates that fee awards are appropriate "where the agency has been arbitrary," but it does not suggest that the exercise of our discretion is limited to such cases. Neither does the Supreme Court view our power under the statute as so restricted. 4 In its opinion in Brown, the court stated:

"We conclude that ORS 183.495 vests the reviewing court, the Court of Appeals, with broad discretion in these cases. In adopting ORS 183.495, the legislature realized that it could not anticipate the wide variety of situations in which petitioners might prevail on judicial review, or decide a priori in which of these situations the granting of attorney fees would be appropriate. Therefore, it vested the Court of Appeals with the task of evaluation according to the general or specific situation presented. The sparse legislative history of this statute suggests no clear standard for awarding attorney fees. It indicates only that the legislature intended that fees be awarded in some cases, though not all, and that it intended the authority to serve as a deterrent to agency error." 293 Or. at 11, 643 P.2d 1266. (Emphasis supplied.)

Although the purposes of the statute have never been clearly articulated, we think that two functions may properly be ascribed to ORS 183.495. First, fee awards ought to serve as deterrents to groundless or arbitrary agency action. Second, the statute should operate to redress individuals who have borne unfair financial burdens defending against groundless charges or otherwise attempting to right mistakes that agencies should never have committed.

Bearing these two purposes in mind, we now turn to ORS 183.482, the statute governing our authority to reverse or remand the final orders of state agencies. Under subsection (7), we may remand an order for further agency action if we find that "the fairness of the proceedings or the correctness of the [agency] action may have been impaired" by a material procedural error or a failure to follow prescribed procedure. Subsection (8) of that statute allows us to reverse or remand an order if the agency "has erroneously interpreted a provision of law" or if "the order is not supported by substantial evidence in the record." Under that subsection we may also remand an order if the agency's exercise of discretion is outside the range of discretion delegated to the agency by law, inconsistent with an agency rule, policy, position or practice, or otherwise in violation of a constitutional or statutory provision.

A "reversal" represents a complete defeat, in this court, of the agency's position. Reversals are rare--the present case being one of only a few such dispositions made by this court in the last five years. Far more commonly, an agency order is "reversed and remanded," either because there remains the possibility that the agency's proposed action may ultimately be justified, see, e.g., Palen v. State Bd. Higher Education, 18 Or.App. 442, 525 P.2d 1047, rev. den. (1974), or because some further agency action must occur, although its outcome is uncertain. See, e.g., Johnson v. Employment Division, 56 Or.App. 454, 642 P.2d 329 (1982). The guidelines that follow speak to each type of case of reversal or remand under ORS 183.482(7) and (8).

A. Lack of Substantial Evidence (ORS 183.482(8)(c))

In most cases when we reverse an agency order because it is not supported by substantial evidence, an award of attorney fees will be appropriate. While this may seem a harsh rule from the agencies' standpoint, we are convinced that it is warranted for two reasons. First, final orders are the product of contested case proceedings that are conducted by the agency. When the petitioner requests a hearing, the agency gathers evidence to support its position and presents that evidence at the hearing. A hearings officer or other agency official presides over the hearing. After the hearing, if the result is adverse to the petitioner, the agency must prepare a written order including findings of fact that are based on the evidence in the record. See ORS 183.470. The agency's deep involvement at each stage of the process ought to make it very familiar with the evidence. It has both the authority and the obligation to examine the evidentiary predicate for its action. It can avoid this kind of error at any time up to the issuance of its order, and even beyond, without facing a possible award of an attorney fee. See ORS 183.482(6). Consequently, there seems to be no good excuse for an agency issuing an order unsupported by substantial evidence.

The second reason for awarding fees in cases of this type is the undemanding nature of the substantial evidence test. In Cook v. Employment Division, 47 Or.App. 437, 614 P.2d 1193 (1981), we explained the substantial evidence standard:

" * * * Substantial evidence is 'any reasonable evidence or such proof as a reasonable mind would employ to support a conclusion.' " (Citation omitted.) (Emphasis supplied.) 47 Or.App. at 441, 614 P.2d 1193.

Thus, paraphrasing Cook, we will reverse or remand for lack of substantial evidence only when an order is supported by no reasonable evidence. Given the agencies' extensive involvement in and control over the proceedings that result in final orders, an order completely lacking evidentiary support cannot be justified.


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