Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

BP West Coast Products, LLP v. Oregon Department of Justice

Court of Appeals of Oregon

April 12, 2017

BP WEST COAST PRODUCTS, LLP, Petitioner,
v.
OREGON DEPARTMENT OF JUSTICE, Respondent.

          Argued and Submitted October 13, 2015

          William F. Gary argued the cause for petitioner. With him on the briefs were Sharon A. Rudnick and Harrang Long Gary Rudnick P.C.

          Peenesh H. Shah, Assistant Attorney General, argued the cause for respondent. With him on the brief were Ellen F. Rosenblum, Attorney General, Anna M. Joyce, Solicitor General, and Denise G. Fjordbeck, Assistant Attorney General.

          Scott A. Shorr, Joshua L. Ross, and Stoll Stoll Berne Lokting & Shlachter P.C. fled the brief amicus curiae for Steven Scharfstein.

          Before Sercombe, Presiding Judge, and Hadlock, Chief Judge, and Tookey, Judge. [*]

          Sercombe, P. J., concurring.

         Case Summary:

         BP West Coast Products, LLP (BP) challenges the validity of a rule adopted by the Attorney General, which pertains to a service station's posting of gas prices on signs visible from the street and dispensing devices. BP argues that "[t]he Administrative Rule's defnition of 'condition' [under OAR 137-020-0150(1) (b)] and all portions of the Rule that incorporate or rely on the defnition of 'condition' are invalid because they exceed the authority of the Attorney General to adopt." Held: ORS 646.930 establishes the minimum requirements for a service station's posting of fuel prices, and it does not prohibit the Attorney General from adopting rules under ORS 646.608(1)(u) to identify and prohibit "any other unfair or deceptive conduct" concerning the display of fuel prices. Although the defnition of condition under OAR 137-020-0150(1)(b) may "enlarge" the number of conditions that must be displayed, the rule does not have the effect of "undermining the legislative intent, " Garrison v. Dept. of Rev., 345 Or 544, 548-49, 200 P.3d 126 (2008); instead, it "coincides with the legislative policy" of the enabling statutes. Springfeld Education Assn. v. School Dist., 290 Or 217, 228, 621 P.2d 547 (1980).

          TOOKEY, J.

         BP West Coast Products, LLP (BP) challenges the validity of OAR 137-020-0150, a rule adopted by the Attorney General, which pertains to a service station's posting of gas prices on signs visible from the street and dispensing devices. BP argues that "[t]he Administrative Rule's definition of 'condition' and all portions of the Rule that incorporate or rely on the definition of 'condition' are invalid because they exceed the authority of the Attorney General to adopt." We disagree; ORS 646.930 establishes the minimum requirements for a service station's posting of fuel prices, and it does not prohibit the Attorney General from adopting rules under ORS 646.608(1)(u) to identify and prohibit "any other unfair or deceptive conduct" concerning the display of fuel prices. Accordingly, we conclude that OAR 137-020-0150(1)(b) is valid.

         ORS 646.930 establishes the statutory requirements that a service station must meet if it has a fuel price sign that is visible from the street. Subsection (1)(a) provides that a person operating a "service station, business, or other place for the purpose of retailing and delivering gasoline, diesel or other fuel" may "display on a sign visible from the street the lowest cash prices charged for the sale of the lowest grades of gasoline, diesel or other fuel." Subsection (2)(b) provides that, if "a cash price displayed on a sign is available only under some conditions, the sign and the dispensing device must clearly state the conditions."

         With that statutory framework in mind, we turn to the challenged rule provision, OAR 137-020-0150(1)(b). The definition of "condition" was added when the rule was revised in 2010. OAR 137-020-0150(1)(b) defines "condition" as "any payment method (e.g., credit), service level (e.g., full service or mini service), or any other modifying circumstance affecting the price per unit of measurement of motor vehicle fuel from the lowest cash price [.]"

         Our review of OAR 137-020-0150 is governed by ORS 183.400. "Under ORS 183.400(1), 'any person' may petition this court to determine the validity of a rule." Assn. of Acupuncture v. Bd. of Chiropractic Examiners, 260 Or.App. 676, 678, 320 P.3d 575 (2014). However, "[i]n reviewing a rule challenge under that statute, 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." Id. Under ORS 183.400(4)(b), our determination of whether OAR 137-020-0150(1)(b) exceeds the statutory authority of the Attorney General to adopt the rule "is limited to a determination of whether the rule, as written, is valid [.]" GTE Northwest, Inc. v. Public Utility Commission, 321 Or 458, 464, 900 P.2d 495 (1995), cert den, 517 U.S. 1155 (1996). BP's facial challenge to OAR 137-020-0150(1)(b) fits within the prescribed scope of our review.[1]

         We agree with the parties that the term "conditions, " as used in ORS 646.930(2)(b), is an inexact term. See Nulph v. Board of Parole. 279 Or.App. 652, 657-58, 381 P.3d 948 (2016), rev allowed, 360 Or 851 (2017) (discussing the three categories of statutory terms). Because "conditions" is an inexact term, we examine the statute to determine what the legislature intended by using the term "conditions." See Springfield Education Assn. v. School Dist., 290 Or 217, 223, 621 P.2d 547 (1980) ("Inexact terms *** require agency interpretation and judicial review for consistency with legislative policy"). "If the agency interpretation is embodied in a rule, and the rule is otherwise lawful, the rule will be upheld on judicial review * * * if the interpretation can be determined to be within the statutory intent [.]" Id. at 228 (citing ORS 183.400(4)(b)).[2]

         As noted, BP argues that the definition of "condition" and all portions of OAR 137-020-0150 that incorporate the definition of "condition" are invalid under ORS 183.400(4)(b) because the definition of "condition" under OAR 137-020-0150(1)(b) exceeds the Attorney General's rulemaking authority. BP notes that "the legislature expressly delegated to the Attorney General the limited authority to adopt rules 'to aid in the implementation'" of ORS 646.930 under Oregon Laws 1985, chapter 751, section 2, and, as a result, "the Attorney General's rulemaking authority under ORS 646.930 is limited to the adoption of rules that are consistent with the legislative policy expressed in the statute." The crux of BP's argument is that ORS 646.930 prohibits the Attorney General from adopting a rule that defines "conditions" in a way that could require "the display of conditions that increase the lowest cash price rather than conditions to obtaining the lowest cash price." See Garrison v. Dept. of Rev.. 345 Or 544, 548-49, 200 P.3d 126 (2008) ("[A] rule created within a statutory scheme cannot amend, alter, enlarge upon, or limit statutory wording so that it has the effect of undermining the legislative intent.").

         The Attorney General contends that the legislature has given the Attorney General the authority under ORS 646.608(1)(u) to adopt rules so that the Attorney General can protect consumers and effectively implement ORS 646.930. In the Attorney General's view, "ORS 646.930, as amended, is not a legislative blessing allowing gasoline retailers to provide misleading information to consumers; [and OAR 137-020-0150] is fully consistent with its actual legislative purposes, as revealed by the text, context, and legislative history."

         We begin by identifying the legal framework established by OAR 137-020-0150(1)(b). Again, paragraph (b) of subsection (1) defines "condition" as "any payment method (e.g., credit), service level (e.g., full service or mini service), or any other modifying circumstance affecting the price per unit of measurement of motor vehicle fuel from the lowest cash price[.]" Thus, the revised rule, OAR 137-020-0150(1)(b), establishes the parameters for a "condition" as any modifying circumstance affecting the lowest cash price.

         OAR 137-020-0150(3)(d)(A), in turn, requires the disclosure of any condition affecting the price. The pertinent text of that rule provides that, "[i]f the lowest cash prices are available only under some conditions [, t]he retailer must clearly and conspicuously display all conditions on each street sign, price sign and dispensing device (e.g., cash only, mini serve)." OAR 137-020-0150(3)(d)(A). Under OAR 137-020-0150(3)(d)(A), the Attorney General's use of the term "condition" requires a service station to display any modifying circumstance affecting the price per unit of motor vehicle fuel from the lowest cash price. Thus, we must examine the statutes that the Attorney General is implementing to determine whether the legislature intended to prohibit the Attorney General from adopting rules that require the display of such modifying circumstances that affect the price per unit from the lowest cash price.

         OAR 137-020-0150 pertains to the display of fuel signs and, as the parties note, was adopted pursuant to Oregon Laws 1985, chapter 751, section 2, [3] and ORS 646.608(1)(u). We apply the principles set forth in PGE v. Bureau of Labor and Industries, 317 Or 606, 610-12, 859 P.2d 1143 (1993), and State v. Gaines. 346 Or 160, 171-73, 206 P.3d 1042 (2009) to determine whether OAR 137-020-0150 "coincides with the legislative policy" of the enabling statutes. Springfield Education Assn., 290 Or at 228; see Nay v. Dept. of Human Services. 360 Or 668, 681, 385 P.3d 1001 (2016) (ORS 183.400(4)(b) requires examining whether the rule "corresponds to the statutory policy" (internal quotation marks and citation omitted)).

         In light of the text, context, and legislative history discussed below, we decline to imply the limitation BP suggests. Instead, we conclude that ORS 646.930 establishes the minimum requirements for a service station's posting of fuel prices, and it does not prohibit the Attorney General from adopting rules under ORS 646.608(1)(u) to identify and prohibit "any other unfair or deceptive conduct" concerning the display of fuel prices. See ORS 646.608(4) ("An action or suit may not be brought under subsection (1)(u) of [ORS 646.608] unless the Attorney General has first established a rule * * * declaring the conduct to be unfair or deceptive in trade or commerce.").

         We start with the statutory text of ORS 646.930 because it is "the best evidence of the legislature's intent." PGE, 317 Or at 610. ORS 646.930 establishes requirements related to the posting of fuel price signs at a service station. ORS 646.930(1)(a) provides that a person operating a "service station, business, or other place for the purpose of retailing and delivering gasoline, diesel or other fuel" may "display on a sign visible from the street the lowest cash prices charged for the sale of the lowest grades of gasoline, diesel or other fuel." Under ORS 646.930(2)(b), if "a cash price displayed on a sign is available only under some conditions, the sign and the dispensing device must clearly state the conditions." The legislature did not define the term "conditions."

         The plain, ordinary meaning of the noun "condition" is:

"1 a: something established or agreed upon as a requisite to the doing or taking effect of something else: STIPULATION *** 2: something that exists as an occasion of something else: a circumstance that is essential to the appearance or occurrence of something else: PREREQUISITE *** 3 a: something that limits or modifies the existence or character of something else: a restriction or qualification [.]"

Websters Third New Int'l Dictionary 473 (unabridged ed 1993) (capitalization and boldface in original); see Gaines, 346 Or at 175 (using dictionary definitions to discern the plain, natural, and ordinary meaning of terms). The rule's definition of condition, as a "modifying circumstance affecting the price, " and the dictionary definition of condition, as "something that limits or modifies" the price, are, in essence, identical. See Gaines, 346 Or at 175 (we presume that the legislature intended a term to have its plain, natural, and ordinary meaning).

         We turn to the text of the term "conditions" in its context to examine "whether the rule corresponds to the statutory policy" of ORS 646.930. Nay, 360 Or at 681 (internal quotation marks and citation omitted). ORS 646.930(2)(b) provides that, if "a cash price * * * is available only under some conditions, " the service station's street sign "must clearly state the conditions." The phrases "available only under some conditions" and "must clearly state the conditions" both refer to the displayed "price." The text of ORS 646.930(2)(b) in its immediate context indicates that the statutory policy is to protect consumers from deceptive fuel pricing by requiring the disclosure of additional information, i.e., the "conditions."

         The broader statutory scheme also furthers the policy of protecting consumers by requiring the disclosure of additional information. See Morsman v. City of Madras, 203 Or.App. 546, 561-62, 126 P.3d 6, rev den, 340 Or 483 (2006) (examining other provisions in the same chapter in which the provision at issue was codified to provide context). ORS chapter 646 governs trade practices and antitrust regulation. ORS 646.905 through 646.963 pertain to trade practices involving vehicle fuels. For example, ORS 646.915 protects consumers by requiring a "clear and conspicuous" disclosure at the dispensing device that the gasoline is "blended with ethanol, methanol, co-solvent, alcohol or other oxygenates." ORS 646.932 requires a service station to post the amount of tax per gallon of gasoline "in a manner visible to consumers." ORS 646.949 requires service stations to "display on a sign on each side of the dispensing device * * * the octane rating of the gasoline being dispensed from that device" in a manner that "will adequately inform the purchaser of the octane rating of gasoline."

         The legislative history of ORS 646.930 also reveals that, since the law was enacted, the legislative policy has been to protect consumers from deceptive fuel pricing by requiring the disclosure of information. In 1981, during the hearings on House Bill (HB) 2890 (1981), which enacted the provisions that were subsequently codified at ORS 646.875, there was discussion about the discrepancies between street signs indicating a gallon or liter price and the price per unit charged at the pumps. Tape Recording, House Committee on Business and Consumer Affairs, HB 2890, May 25, 1981, Tape 127, Side A (statements of Rep Fred Parkinson, Rep Gratten Kerans, and Mr. Wayne Bowlby); Tape Recording, House Committee on Business and Consumer Affairs, HB 2890, May 25, 1981, Tape 128, Side A (statements of Rep Jeanette Hamby, Rep Max Rijken, and Rep Bill Markham).

         To address the problem of the discrepancy in the price per unit advertized on street signs and the price per unit paid at the pump, HB 2890, which was enacted and then codified as ORS 646.875 (1981), provided, in pertinent part:

"(1) A person who operates a service station, business or other place for the purpose of retailing and delivering gasoline, diesel or other fuel into the tanks of motor vehicles must display the prices charged for the sale of gasoline, diesel or other fuel in compliance with this section. To be in compliance with this section, if there is a sign displayed, the display must:
"(a) Show the price per unit of measurement and the unit of measurement at which the person sells the fuel; and
"(b) Show the same price per unit and the unit on any sign as that indicated on any dispensing device used for delivering the fuel into the tanks of motor vehicles."

         In 1985, ORS 646.875 was amended and then renumbered as ORS 646.930. Or Laws 1985, ch 751, § 1. Oregon Laws 1985, chapter 751, section 2, required the Attorney General to "adopt rules to aid in the implementation of ORS 646.875." As explained below, the other statutory authority, ORS 646.608, permits the Attorney General to adopt administrative rules prohibiting conduct that constitutes unfair or deceptive conduct in trade or commerce.

         The 1985 amendments to ORS 646.875 were set forth in House Bill (HB) 2286 (1985), which was introduced to remedy the pricing inconsistencies that arose from different types of fuel, payment systems, and service levels. Representative Bob Shiprack testified that the intent of the bill was to protect consumers from the "deceptive and often times fraudulent posting of prices for gasoline on the street." Tape Recording, House Committee on Consumer and Business Affairs, HB 2286, Mar 19, 1985, Tape 75 (statement of Rep Shiprack). As an example, in the committee hearing, Representative Shiprack provided an Oregonian article with his testimony to illustrate some of the "bait-and-switch methods, " id., that HB 2286 was meant to address:

"In using 'differential prices, ' stations charge their customers less under certain conditions-if they pay in cash rather than by credit card, or if they fill their tank rather than buy just a few gallons, for example.
"Most stations charge only slight differences in the prices, but problems can come up because the signs outside many service stations advertise only their discounted prices, and not the higher rates many customers will have to pay!'

         Exhibit B, House Committee on Consumer and Business Affairs, HB 2286, Mar 19, 1985 (accompanying testimony of Rep Shiprack) (John Snell and Holly Danks, Driver's Put Cut-rate Tiger in Tank; Get Bit, Oregonian, Mar 14, 1984 (emphasis added)).

         At a hearing on HB 2286 before the Senate Business, Housing, and Finance Committee, Jan Margosian testified on behalf of the Oregon Attorney General and submitted written testimony provided by Assistant Attorney General Tim Wood. Margosian explained how "the Financial Fraud Section of the Attorney General's office has regularly received complaints from Oregon consumers alleging deceptive pricing of motor vehicle fuel." Exhibit D, Senate Business, Housing, and Finance Committee, HB 2286, June 4, 1985 (accompanying statement of Jan Margosian). To provide examples of such complaints, ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.