Wallace v. State ex rel. Pub. Emps. Ret. Sys.

• Decision Date: 04 April 2012
• Docket Number: A144617.,060979
• Citation: 249 Or.App. 214,275 P.3d 997
• Parties: James C. WALLACE, Petitioner, v. STATE ex rel. PUBLIC EMPLOYEES RETIREMENT SYSTEM, and the Public Employees Retirement System Board, Respondents.
• Court: Oregon Court of Appeals

249 Or.App. 214

275 P.3d 997

James C. WALLACE, Petitioner,

v.STATE ex rel. PUBLIC EMPLOYEES RETIREMENT SYSTEM, and the Public Employees Retirement System Board, Respondents.

060979

A144617.

Court of Appeals of Oregon.

Argued and Submitted April 20, 2011.Decided April 4, 2012.

James C. Wallace, Salem, argued the cause and filed the briefs pro se.

Leigh A. Salmon, Assistant Attorney General, argued the cause for respondents. With her on the brief were John R. Kroger, Attorney General, and Mary H. Williams, Solicitor General.

Before ORTEGA, Presiding Judge, and BREWER, Judge, and SERCOMBE, Judge.^*SERCOMBE, J.

Petitioner seeks review of a final order of the Public Employees Retirement Board (board) that granted summary determination in favor of the Public Employees Retirement System (PERS) and dismissed his previously granted request for a contested case hearing. The board concluded that petitioner's challenge to individual restrictions on his trading activities in the Oregon Savings Growth Plan (plan) was moot. On review, petitioner contends that the board erred in failing to provide him the “rights of a party to a contested case hearing” and in dismissing his request for a contested case hearing as moot. For the reasons discussed below, we conclude that petitioner's assignments of error are moot and dismiss the petition for judicial review.

We take the facts from the unchallenged findings in the board's order, supplemented by additional evidence in the record.¹ See Meltebeke v. Bureau of Labor and Industries, 322 Or. 132, 134, 903 P.2d 351 (1995) (holding that “unchallenged findings of fact are the facts for purposes of judicial review of an administrative agency's final order”). Petitioner has been a participant in the plan since at least 1983. In 2002, the plan began imposing trading restrictions on plan participants that had “made more than two trades per month in a three-month consecutive period” in the International Stock investment option (IS option). In March 2002, the plan's deferred compensation manager (manager) determined that petitioner was engaged in excessive trading and, accordingly, limited petitioner to one redemption per month from the IS option. In December 2004, the board adopted a policy (2004 policy) giving the manager

“the authority to implement reasonable trading restrictions in the [plan] as needed to prevent increases in administrative costs or fees; negative investment performance; or detrimental effects that would arise or be imposed on the [p]lan as a whole or members in general because of excessive member trading.” Pursuant to that policy, in 2005 and 2006, the manager imposed a series of further restrictions on petitioner's ability to trade in the plan.

On March 14, 2006, the manager imposed a final set of individual restrictions on petitioner's trading activities. In May 2006, petitioner requested that the PERS director review the manager's imposition of those restrictions as a staff determination pursuant to OAR 459–001–0030 (Jan. 1, 2002), which provides for PERS director review of a staff action or determination.² In a June 2006 letter to petitioner, the PERS director affirmed the staff determination, finding that the manager had appropriately exercised her authority under the 2004 policy to impose the restrictions:

“I am responding to your request that PERS lift the trading restrictions placed on your Oregon Savings Growth Plan (OSGP) account by the Deferred Compensation Manager. Your May 11, 2006 letter, which was received on May 15, 2006, was referred to me.

“ DETERMINATION

“The PERS' Board has given the Deferred Compensation Manager authority to implement reasonable trading restrictions in the OSGP as needed to prevent increases in administrative costs or fees, negative investment performance or other detrimental effects that would arise or be imposed on the Plan as a whole or members in general because of excessive member trading. Because it was reported that your trading activity exceeded normal and expected frequency and dollar amounts, the Deferred Compensation Manager exercised her authority to impose restrictions on your trading activity. Therefore, I must deny your request.”

Petitioner then requested a contested case hearing pursuant to OAR 459–001–0035 (June 26, 2006).³ In his August 9, 2006, letter requesting that hearing, petitioner requested that

“the Decision [by the director] be reversed because the Manager did not have authority to impose the restrictions upheld in the Decision and the imposition of those restrictions violate the terms of my Contract and my constitutional rights. If that request is denied, I request that the restrictions in the Decision be changed to those in proposed OAR 459–050–0037, or those restrictions contained in the final rule, if they are less restrictive than those in the proposed rule.”In a letter dated August 11, 2006, PERS acknowledged “receipt of [petitioner's] August 9, 2006[,] letter requesting a contested case hearing” and granted that request. Later that month, PERS referred the case to an administrative law judge (ALJ).

In January 2007, while the contested case was pending, the PERS board adopted OAR 459–050–0037 (May 1, 2007), which imposed trading restrictions on all participants in the plan, including petitioner, and granted the manager the authority to establish additional temporary restrictions. On April 11, 2007, the manager informed petitioner by letter that, “[o]nce the new restrictions [in OAR 459–050–0037] are in place, all current restrictions on your account will be removed and the new restrictions will apply.” OAR 459–050–0037 became effective on May 1, 2007. On that date, the manager removed the individual restrictions on petitioner's account. Shortly thereafter, PERS moved for summary determination and dismissal of petitioner's request for a contested case hearing. PERS asserted that “the issues posed by petitioner [were] rendered moot” because petitioner had already received the relief that he had requested in his request for a contested case hearing—removal of the individual restrictions—and no further relief was available to him in the contested case forum.

In response, petitioner agreed that “some of [his] original arguments may be moot.” ⁴ However, petitioner argued that he had originally requested “to have the former restrictions rescinded,” and that that relief had not been provided. He also argued that his alternative request for relief—that the individual restrictions be changed to conform to those reflected in the proposed version of OAR 459–050–0037 or the final version of that rule, whichever was least restrictive—had not been provided because he was subject to the more restrictive final rule. Additionally, he raised new claims for the recovery of damages, declaratory relief, and an award of costs and fees.

The board, which affirmed and adopted the proposed order issued by the ALJ, granted summary determination and dismissed petitioner's request for a contested case hearing, concluding, in part, that “PERS's implementation of rules restricting trading within the plan renders moot [petitioner's] challenge to the previous individual restrictions placed on his account.” ⁵ The board explained:

“When PERS referred this case to the Office of Administrative Hearings, the issue was whether the manager of the Plan had improperly imposed individualized trading restrictions on [petitioner's] ability to trade among various investment options in the Plan. The agency granted [petitioner's] request for a contested case hearing in that matter.

“ * * * * *

“The decision to impose trading restrictions on [petitioner] was a determination made by the deferred compensation manager, and, as such, was a staff determination. Arguably, this matter could have been the subject of a contested case hearing.

“But, in the meantime, the situation changed. The manager no longer places individualized restrictions on a member's ability to trade. The agency adopted OAR 459–050–0037, which imposes trading restrictions on Plan participants in general.

“An over-arching principle of law is that when a matter is moot, there is no longer an issue to be entertained. One of the definitions of ‘moot’ in Webster's Third New International Dictionary (Unabridged) is, ‘to deprive of practical significance.’ In Brumnett v. PSRB, 315 Or. 402 (1992), the Court found that where a patient had been discharged from the jurisdiction of PSRB, the possibility that the state might try to recover the costs of the patient's care at some future point was too speculative. A determination by the agency would therefore have no practical effect. Here, a determination [regarding] the individual restrictions on [petitioner's] ability to trade within the Plan would have no practical effect, because individualized restrictions no longer

“[Petitioner] argued that the issues are not moot because he must exhaust his administrative remedies, including asking for a declaratory judgment to get a ruling about the validity of the restrictions placed on him individually. If an issue is moot, jurisdiction is not continued merely because a determination might be relevant in a future tort action. Keeney v. University of Oregon, 178 Or.App. [198, 36 P.3d 982] (2001), rev. den., 334 Or. 327 (2002). The contested case proceeding of the APA is not meant for the purpose of giving advisory opinions. * * *

“[We] hold that petitioner's claim that there was no authority for the manager to place individual restrictions on his ability to trade among the investment options was rendered moot by the adoption and implementation of the general restrictions in OAR 459–050–0037.”

On review, petitioner raises two assignments of error. First, he contends that the board erred in failing to provide him the procedural “rights of a party to a contested case hearing,” including proper notice, discovery, and an evidentiary hearing. Second, he contends that the board erred in...