Free Or., Inc. v. Or. Health Auth.

329 Or.App. 460

541 P.3d 897

FREE OREGON, INC. and Mandate Free Oregon, Inc., Oregon non-profit corporations; Doctors for Freedom, an unincorporated association; Health Freedom Defense Fund; and Tamara Dimmick; Rasa Sidagyte; Michelle Davis ; Lisa Nave; Charlotte Persinger; Chrystal Gervais; Aaron Harris; Roy McGrath; Glenn Campbell; Jessica Cox; Brittany Wilson; Joshua Williams; and Molly Valdez, individuals, Petitioners,

v.OREGON HEALTH AUTHORITY, Respondent.

A176977

Court of Appeals of Oregon.

Argued and Submitted December 2, 2022

December 13, 2023

Tyler D. Smith, Canby, argued the cause for petitioners. Also on the briefs were Yasha Renner and Tyler Smith & Associates, P.C.

Phillip Thoennes, Assistant Attorney General, argued the cause for respondent. Also on the brief were Ellen F. Rosenblum, Attorney General, and Benjamin Gutman, Solicitor General.

Before Aoyagi, Presiding Judge, and Lagesen, Chief Judge, and Jacquot, Judge.^*

LAGESEN, C. J.

This is a rule challenge under ORS 183.400. Petitioners seek judicial review of former OAR 333-019-1010 (Jan. 31, 2022) and former OAR 333-019-1030 (Jan. 28, 2022),¹ rules adopted by the Oregon Health Authority (OHA) that imposed COVID-19 vaccination requirements on providers and staff in healthcare settings, and on teachers and staff in school settings, respectively. The rules have since been repealed. Petitioners argue that OHA exceeded its statutory authority by adopting those rules and, furthermore, that the rules are preempted by federal law, violate the principle of separation of powers, violate due process requirements, and violate the Contract Clause of the Oregon Constitution. OHA responds that the repeal of the rules renders this proceeding moot and that all of petitioners’ challenges fail. For the reasons that follow, we conclude that (1) OHA has not demonstrated that this proceeding is moot; and (2) petitioners’ arguments do not present grounds for invalidating the rules. Accordingly, we hold the rules valid.

I. BACKGROUND

OHA first adopted OAR 333-019-1010 and OAR 333-019-1030 as temporary rules in 2021, then as permanent rules in 2022.² Identifying the statutory source of its authority to adopt both rules, OHA listed ORS 413.042, ORS 431A.010, and ORS 431.110, statutes which pertain specifically to OHA, and ORS 433.004, which pertains to public health and safety more generally.³

Relevant to petitioners’ challenges, subsection 3 of both OAR 333-019-1010 and OAR 333-019-1030 instructed schools and healthcare facilities that they "may not employ, contract with, or accept the volunteer services of" individuals unless they "are fully vaccinated against COVID-19 or have an approved or accepted medical or religious exception." The rules also required those individuals to provide proof of vaccination or documentation of a medical or religious exception to their respective school or healthcare facility and set forth the standards applicable to the required documentation. OAR 333-019-1010(6) and OAR 333-019-1030(10). The rules further explained that employers of school and healthcare facility employees were responsible for "tak[ing] reasonable steps to ensure that unvaccinated" individuals with exceptions to the vaccination requirement "are protected from contracting and spreading COVID-19." OAR 333-019-1010(4) ; OAR 333-019-1030(4), (6). Additionally, each rule provided that employers "who violate any provision of this rule are subject to civil penalties of $500 per day per violation." OAR 333-019-1010(7) ; OAR 333-019-1030(11).

Petitioners assert that those rules are invalid on several distinct grounds. They first argue that the statutes cited by OHA as authority for the promulgation of the two rules do not grant such authority. Next, petitioners contend that the rules conflict with two other statutes: ORS 431.180 and ORS 433.416. Petitioners then assert that the rules are preempted by section 564 of the Food, Drug, and Cosmetic Act (FDCA), codified at 21 USC § 360bbb-3.⁴ Petitioners further argue that the rules offend separation-of-powers principles. Petitioners also contend that the rules violate the Due Process Clause of the Fourteenth Amendment to the United States Constitution by threatening public employees’ protected property interest in continued employment by "mandat[ing] a predetermined outcome without any right to a hearing." Finally, petitioners argue that the rules impermissibly impair employment contracts, in violation of the Contract Clause of Article I, section 21, of the Oregon Constitution. For the reasons that follow, we reject each of petitioners’ challenges and hold former OAR 333-019-1010 and former OAR 333-019-1030 valid.

II. MOOTNESS

Because the challenged rules have been repealed, we must first consider whether this proceeding is moot.

"Whether a case has become moot will depend on a factual determination regarding the potential impact of the court's decision on the parties." Garges v. Premo , 362 Or. 797, 802, 421 P.3d 345 (2018). If the party arguing against mootness "can identify ‘practical effects or collateral consequences’ " that flow from the outcome of their case, then the burden shifts to the party advocating mootness to show that the effects and consequences identified are either " ‘legally insufficient or factually incorrect.’ " Id. (quoting Dept. of Human Services v. A. B. , 362 Or. 412, 426, 412 P.3d 1169 (2018) ). "[I]n order to prevent a case from being considered moot, a ‘collateral consequence’ must be something beyond mere speculation. As we have observed, a collateral consequence must have a significant probability of actually occurring; a speculative or merely possible effect is not enough." Johnson v. Premo , 302 Or App 578, 592, 461 P.3d 985 (2020) (internal quotation marks and citation omitted).

OHA argues that petitioners’ challenge to OAR 333-019-1010 and OAR 333-019-1030 is moot because both rules were first suspended by temporary administrative order, then ultimately repealed by permanent order. Petitioners argue that the challenge is not moot "because a legal determination invalidating the rules would create binding precedent" that would affect prospective future litigation and one currently pending lawsuit.

OHA is correct that the repeal of rules ordinarily renders a rule challenge moot. See, e.g. , Mooney v. Oregon Health Authority , 314 Or App 809, 811, 500 P.3d 79 (2021) ("We long have held that the repeal or replacement of an administrative rule means an ORS 183.400 challenge seeking to invalidate the displaced rule is moot."). However, in this instance, petitioner Cox asserts that a determination of the validity of the rules would affect an ongoing proceeding, in which petitioner challenges her employer's decision to place her on unpaid leave based on her failure to obtain a vaccination or exemption as required by OAR 333-019-1030.

OHA has not controverted petitioners’ assertion that a decision by this court holding the challenged rules invalid could affect petitioner Cox's pending lawsuit.⁵ Under the burdenshifting framework provided by the Supreme Court in Garges , 362 Or. at 802, 421 P.3d 345, it was OHA's burden to disprove those consequences once identified, and OHA did not attempt to do so. Accordingly, OHA has not met its burden to show mootness, at least with respect to OAR 333-019-1030. Because the arguments with respect to the two rules are identical, such that dismissing the petition with respect to OAR 333-019-1010 would have no practical effect on our resolution of them, we proceed to consider those arguments.

III. ANALYSIS

To start, we observe that the scope of our review under ORS 183.400 is limited. "[I]n reviewing a rule challenge under [ ORS 183.400 ], we may declare the rule invalid only if we conclude that it violates constitutional provisions, exceeds the statutory authority of the agency that adopted the rule, or was adopted without complying with rulemaking procedures."

BP West Coast Products, LLP v. Dept. of Justice , 284 Or App 723, 725-26, 396 P.3d 244, rev. den. , 361 Or. 800, 400 P.3d 921 (2017) (internal quotation marks omitted). Where a claim is that a rule exceeds an agency's statutory authority or violates a constitutional provision, "[j]udicial review is limited under ORS 183.400 to the face of the rule and the law pertinent to it." Wolf v. Oregon Lottery Commission , 344 Or. 345, 355, 182 P.3d 180 (2008). This means that if the resolution of a particular constitutional or statutory challenge to a rule would require the development of a factual record, the challenge cannot be resolved in a proceeding under ORS 183.400.

Smith v. Dept. of Corrections , 219 Or App 192, 197-98, 182 P.3d 250 (2008), rev. den. , 345 Or. 690, 201 P.3d 910, cert. den. , 557 U.S. 923, 129 S.Ct. 2853, 174 L.Ed.2d 558 (2009).

Petitioners argue that two of the three grounds for invalidating rules are present here: that they violate constitutional provisions and that they exceed OHA's statutory authority. "Constitutional issues should not be decided when there is an adequate statutory basis for decision," so we begin with the statutory arguments. Douglas County v. Briggs , 286 Or. 151, 156, 593 P.2d 1115 (1979).

A. OHA did not exceed its statutory authority.

As mentioned, in a proceeding under ORS 183.400 to determine whether a challenged rule exceeds an agency's statutory authority, "we may consider only the ‘wording of the rule itself (read in context) and the statutory provisions authorizing the rule.’ " Assn. of Acupuncture v. Bd. of Chiropractic Examiners , 260 Or App 676, 678, 320 P.3d 575 (2014) (quoting Wolf , 344 Or. at 355, 182 P.3d 180 ). Based on those sources, we determine whether the adoption of the rule exceeded the adopting agency's statutory authority by examining whether the agency " ‘departed from a legal standard expressed or implied in the particular law being administered, or contravened some other applicable statute.’ " Id. (quoting Planned Parenthood Assn. v. Dept. of Human Res. ,...