Nyland v. City of Portland ( 2020 )

348
Argued and submitted August 11, reversed and remanded October 21, 2020
Terezia NYLAND
and Michael Nyland,
Plaintiffs-Appellants,
v.
CITY OF PORTLAND,
an Oregon municipality,
Defendant-Respondent.
Multnomah County Circuit Court
18CV16409; A169691
477 P3d 442
Plaintiffs appeal a judgment dismissing their declaratory judgment action.
Plaintiffs own a company that is state certified as a woman-owned business.
Defendant believed that plaintiffs’ certification was obtained fraudulently, began
investigating them, and issued an investigative subpoena seeking information
from them. Plaintiffs filed a declaratory judgment action seeking a declaration
that the subpoena was “unreasonable” and “unduly burdensome” and asking
that the trial court “declare that they have complied with their obligations” and
“quash the subpoena.” The trial court ruled that it lacked jurisdiction and dis-
missed plaintiffs’ action with prejudice. In doing so, the trial court relied on Bay
River v. Envir. Quality Comm., 26 Or App 717, 554 P2d 620 (1976), which states
that the Administrative Procedures Act (APA) ordinarily precludes a party from
bringing a declaratory judgment action to challenge a nonfinal agency order.
On appeal, plaintiffs acknowledge the holding in Bay River, but assert that an
exception exists which permits them to challenge a nonfinal agency order for lack
of probable cause. Defendant responds that plaintiffs lack standing, and that,
alternatively, the APA does not apply because it is neither an “agency” under
ORS 183.310(1) nor a “contracting agency” for the purposes of ORS 200.065.
Held: (1) Plaintiffs have standing; (2) defendant is not an agency; and (3) while
defendant is a “contracting agency,” in this specific context, defendant is a munic-
ipality and thus not subject to the APA. Nevertheless, the trial court erred in
relying on Bay River because, here, the APA did not divest the trial court of juris-
diction, as it did in Bay River.
Reversed and remanded.
Eric J. Bloch, Judge.
Matthew D. Colley argued the cause for appellants. Also
on the briefs were Adam S. Rittenberg and Black Helterline
LLP.
YoungWoo Joh argued the cause for respondent. Also on
the brief was Denis M. Vannier.
Cite as 307 Or App 348 (2020) 349
Before Lagesen, Presiding Judge, and Kamins, Judge,
and Kistler, Senior Judge.
KISTLER, S. J.
Reversed and remanded.
350 Nyland v. City of Portland
KISTLER, S. J.
Plaintiffs filed this declaratory judgment action,
alleging that the City of Portland’s investigative subpoena
was unreasonably broad and unduly burdensome. Relying
on Bay River v. Envir. Quality Comm., 26 Or App 717, 554
P2d 620 (1976), the circuit court ruled that it lacked juris-
diction and dismissed plaintiffs’ action with prejudice. We
conclude that the statutory premise that underlies Bay River
is absent here and that the circuit court had jurisdiction. We
reverse the circuit court’s judgment and remand for further
proceedings consistent with this decision.
Before turning to the facts, we briefly describe the
statutory context in which this case arises. ORS chapter
200 recognizes the need to “eliminate the effects of long-
term, open and pervasive exclusion of and discrimination
against minorities and women from the business sector.”
ORS 200.015(d). Towards that end, ORS chapter 200 creates
a program for certifying women-owned and minority-owned
businesses, ORS 200.055, and it directs state and local “con-
tracting agencies” to “aggressively pursue a policy of provid-
ing opportunities” for certified women-owned and minority-
owned businesses, ORS 200.090.
The chapter also prohibits fraud in obtaining or
retaining certification as a minority-owned or woman-owned
business. ORS 200.065(1). It provides that the state and
affected contracting agencies “shall investigate” whether
a woman-owned or minority-owned business fraudulently
obtained or retained certification. ORS 200.065(4). Finally,
the chapter authorizes the state and affected contracting
agencies to issue investigative subpoenas to “compel the pro-
duction of books, papers, records, memoranda or other infor-
mation necessary to carry out * * * the affected contracting
agency’s duties.” ORS 200.065(4); see Pope & Talbot, Inc. v.
State Tax Com., 216 Or 605, 610-12, 340 P2d 960 (1959) (dis-
cussing investigative subpoenas).
If a person fails to comply with a subpoena issued
by an affected contracting agency, ORS 200.065(4) provides
that “the affected contracting agency shall follow the pro-
cedure provided in ORS 183.440 [for issuing subpoenas in
Cite as 307 Or App 348 (2020) 351
contested cases] to compel compliance.” ORS 183.440(2), in
turn, authorizes an agency to apply to a circuit court to com-
pel compliance with the subpoena. At first blush, the text of
ORS 183.440(2) appears to direct circuit courts to hold a per-
son in contempt for any failure to comply with an investiga-
tive subpoena.1 The Oregon Supreme Court has explained,
however, that a court may not hold a person in contempt
for failing to comply with an investigative subpoena without
first providing a graduated process that gives the person the
opportunity to test the subpoena. See, e.g., Pope & Talbot,
Inc., 216 Or at 621 (interpreting a comparable enforcement
statute).2
In this case, plaintiffs own a painting company,
Portland Coatings, Inc., which the state has certified as a
woman-owned business. Over the years, the City of Portland
entered into nine contracts with Portland Coatings to pro-
vide services to the city; as a result, the city is an “affected
contracting agency” within the meaning of ORS 200.065(4).
After Portland Coatings merged with another company,
the state began an investigation into whether Portland
Coatings had fraudulently retained its certification. That
investigation led to a settlement. After the state and plain-
tiffs settled, the city issued its own investigative subpoena
1
ORS 183.440(2) provides that, “[i]f any person fails to comply with any sub-
poena [issued in a contested case], the judge of the circuit court of any county,
on the application of the hearing officer, the agency or the party requesting the
issuance of or issuing the subpoena, shall compel obedience by proceedings for
contempt as in the case of disobedience of the requirements of a subpoena issued
from such court.”
2
The court observed in Pope & Talbot, Inc. that, “[i]f we should apply [the
statute at issue in that case] literally the plaintiff would be subject to crimi-
nal prosecution [for contempt] without first having the opportunity to test the
validity [of the investigative subpoena] in a civil proceeding.” 216 Or at 620. To
avoid that dilemma, the court interpreted the statutory authorization to hold a
person in contempt in light of the applicable common-law procedures. Id. at 621.
Specifically, the court explained:
“[I]f a person refuses to obey a subpoena the [agency] may apply to the cir-
cuit court for an order requiring such person to show cause why the [agen-
cy’s] demand should not be complied with. Upon failure to show cause the
court must make an order requiring the person to comply with the [agency’s]
demand within such time as the court shall direct. Failure to obey this order
constitutes contempt of court.”
Id.; see Couey and Couey, 312 Or 302, 304-06, 821 P2d 1086 (1991) (reaching a
similar conclusion in a related but separate statutory context).
352 Nyland v. City of Portland
to determine whether Portland Coatings had fraudulently
retained its certification as a woman-owned business.
Initially, plaintiffs complied with the city’s sub-
poena. Later, they concluded that compliance had become
unduly burdensome. They filed this declaratory judgment
action alleging that they had “made a reasonable effort
to comply with an unreasonable subpoena.” They further
alleged that, if they were “required to continue producing
documents, plaintiffs will suffer annoyance, oppression, and
undue burden and expense.” They asked the circuit court
to “declare that they have complied with their obligations
under the [city’s] subpoena, quash the subpoena, and excuse
plaintiffs from any further obligation as to the subpoena.”
Approximately a month later, plaintiffs filed a request for
admissions, a request for production, and notices of deposi-
tion on the city.
The city filed an amended answer, admitting one of
plaintiffs’ allegations and effectively denying the remainder.
The city construed plaintiffs’ declaratory judgment action
as essentially a motion to quash its subpoena, which led the
city to append two motions to its amended answer. First, the
city moved for an order denying plaintiffs’ motion to quash.
Second, the city moved for an order compelling plaintiffs to
comply with its subpoena. The city, however, did not move
to dismiss plaintiffs’ declaratory judgment action; that is,
the city did not move to dismiss plaintiffs’ action because
ORS 200.065(4) provides the exclusive or primary procedure
for challenging the scope of its investigative subpoena, nor
did it ask the circuit court to exercise its discretion to deny
or abstain from granting declaratory relief because a more
appropriate statutory remedy was available. See, e.g., Brooks
v. Dierker, 275 Or 619, 625, 552 P2d 533 (1976) (identifying
that basis for concluding that declaratory relief is not an
appropriate remedy).
With one exception, the city moved to quash plain-
tiffs’ discovery requests. The city took the position that
plaintiffs, as the persons responding to the city’s investiga-
tive subpoena, could not themselves obtain discovery from
the city. Plaintiffs countered that their discovery requests
were filed as part of their declaratory judgment action and,
Cite as 307 Or App 348 (2020) 353
as such, were proper. Plaintiffs filed their own motion to
compel the city to comply with their discovery requests.3
The circuit court held a hearing to resolve the par-
ties’ competing motions to quash and compel. The court
began by asking plaintiffs whether they could have raised
their challenges to the city’s subpoena pursuant to the pro-
cedure set out in ORS 200.065(4); that is, could plaintiffs
have refused to comply with the city’s subpoena, required
the city to apply to the circuit court for a motion to compel,
and raised their objections to the scope of the subpoena in
response to the city’s motion to compel? Plaintiffs acknowl-
edged that they could have done so, but they argued that
they could also initiate a declaratory judgment action in
circuit court to do the same thing. The circuit court then
turned to the city. When asked why the city had not moved
to dismiss plaintiffs’ declaratory judgment action, the attor-
ney representing the city responded that, after consulting
with the clerk’s office, he had decided against moving to dis-
miss and instead had raised the city’s motions to quash and
compel in plaintiffs’ declaratory judgment action.4
The city did not dispute that plaintiffs could move
to quash the city’s subpoena, either in response to a motion
to compel filed pursuant to ORS 200.065(4) or in plaintiffs’
declaratory judgment action. The nub of the parties’ dis-
pute, the city explained, was whether plaintiffs could obtain
discovery from the city at this stage of the process. As we
understand the city’s position, it started from the proposi-
tion that, while plaintiffs could object to the scope of the
city’s subpoena in response to a motion to compel under ORS
200.065(4), plaintiffs could not obtain discovery from the city
3
Although the city did not challenge the court’s jurisdiction to hear plain-
tiffs’ declaratory judgment action, plaintiffs argued that the court had author-
ity to hear their action under ORS 183.480(3), which permits an “action or suit”
regarding the validity of a nonfinal agency order “upon showing that the agency
is proceeding without probable cause.” In response to plaintiffs’ reliance on ORS
183.480(3), the city reasoned that ORS 183.480 did not apply to its investiga-
tive subpoena. The city also argued that the plaintiffs’ probable cause argument
went beyond the allegations in their complaint. Plaintiffs later acknowledged
that they might need to amend their complaint to bring their action within ORS
183.480(3).
4
The lawyers who represent the city on appeal are not the same lawyers who
represented the city in circuit court.
354 Nyland v. City of Portland
as part of that process. It followed, the city reasoned, that
plaintiffs could not gain greater discovery rights by filing an
anticipatory declaratory judgment action that, in the city’s
view, was essentially a motion to quash.
The circuit court did not expressly address whether
plaintiffs were entitled to obtain discovery from the city as
part of their declaratory judgment action. Rather, the cir-
cuit court expressed doubt that plaintiffs could initiate a
declaratory judgment action to determine whether the city’s
subpoena was unreasonable or unduly burdensome. The cir-
cuit court suggested that a motion to compel pursuant to
ORS 200.065(4) was the preferred, if not the exclusive, route
for challenging the scope of the city’s subpoena—a sugges-
tion that, if correct, could result in the dismissal of plain-
tiffs’ declaratory judgment action and, with it, the discovery
motions and motions to compel that plaintiffs had filed in
that action.
Regarding the city’s motion to compel, the court
recognized that ORS 200.065(4) authorized the city to file a
motion in circuit court to compel compliance with its inves-
tigative subpoena. The court observed, however, that ORS
200.065(4) appeared to contemplate a freestanding motion
to compel rather than one filed as part of a declaratory judg-
ment action to determine whether the city’s subpoena was
unduly burdensome. The court suggested that the city would
be on stronger ground if it withdrew its pending motion to
compel and filed a freestanding motion.
At the end of the hearing, the court asked the par-
ties to submit additional briefing on whether it had jurisdic-
tion to hear plaintiffs’ declaratory judgment action. Among
other things, the city argued that, under Bay River, the cir-
cuit court lacked jurisdiction to hear plaintiffs’ declaratory
judgment action. After considering the parties’ briefing,
the circuit court ruled that plaintiffs’ action for declaratory
relief sought to resolve an issue (the scope of the investiga-
tory subpoena) that was more properly raised in response to
a motion to compel under ORS 200.065(4). Citing Bay River,
the court ruled that it lacked jurisdiction to consider plain-
tiffs’ declaratory judgment action and dismissed that action
with prejudice.
Cite as 307 Or App 348 (2020) 355
On appeal, plaintiffs raise one argument. They
start from the proposition that the Oregon Administrative
Procedures Act (APA), ORS 183.310 to 183.745, applies to the
city’s investigative subpoena. And they appear to acknowl-
edge that, under Bay River, the APA ordinarily would pre-
clude them from bringing their declaratory judgment action
to challenge a nonfinal agency order, such as the subpoena.
However, they argue that they come within an exception to
Bay River. Specifically, they argue that ORS 183.480(3) per-
mits them to bring a declaratory judgment action challeng-
ing a nonfinal agency order for lack of probable cause. See
Oregon Health Care Assn. v. Health Div., 329 Or 480, 492-94,
992 P2d 434 (1999) (recognizing that persons can bring an
“action or suit” to challenge nonfinal agency actions under
ORS 183.480(3) for lack of probable cause).
On appeal, the city abandons the position it took
below—that the circuit court lacked jurisdiction under Bay
River. It asserts instead a new jurisdictional defense—
that plaintiffs lack standing to pursue their declaratory
judgment action. Alternatively, the city argues that plain-
tiffs’ claim that the city lacks probable cause under ORS
183.480(3) assumes, incorrectly, that ORS 183.480(3) applies
to the city’s subpoena. The city also questions whether
plaintiffs’ argument that the city is proceeding without
probable cause goes beyond what plaintiffs alleged in their
complaint.
In considering those arguments, we first explain
why we conclude that plaintiffs have standing to bring
their declaratory judgment action. We then turn to plain-
tiffs’ argument that the city lacks probable cause under
ORS 183.480(3) to issue an investigative subpoena. On that
issue, we agree with the city that the APA does not apply to
the city’s subpoena except to the extent that ORS 200.065(4)
makes one section of the APA—ORS 183.440—applicable.
That conclusion, however, leads us to hold that the circuit
court erred in relying on Bay River to determine that it
lacked jurisdiction to hear plaintiffs’ declaratory judgment
action. Finally, we address the appropriate disposition of
this appeal.
356 Nyland v. City of Portland
We begin with the city’s argument that plaintiffs
lack standing to bring a declaratory judgment action because
plaintiffs are seeking “a judicial declaration that ‘they have
complied with their obligations under the [city’s] subpoena.’ ”
(Quoting plaintiffs’ complaint; bracketed material added
by the city.). The city argues that a declaratory judgment
action permits plaintiffs to have their rights declared under
a statute; it does not permit them to obtain a declaration
that they have complied with their obligations under a sub-
poena. We read plaintiffs’ complaint and the applicable stat-
utes differently.
We start with ORS 200.065(4). That subsection
provides that affected contracting agencies “shall investi-
gate” whether a woman-owned or minority-owned business
engaged in fraud in obtaining or retaining state certifica-
tion, and it authorizes an affected contracting agency to
“issue subpoenas * * * to carry out * * * the affected con-
tracting agency’s duties.” Although ORS 200.065(4) does not
expressly limit the scope of an investigative subpoena issued
by an affected contracting agency, the court has long recog-
nized that “there are limitations on [an] agency’s power of
compulsory disclosure.” Pope & Talbot, Inc., 216 Or at 615.
Among those limitations, an investigative subpoena “must
be relevant to a lawful investigatory purpose and must be
no broader than the needs of the particular investigation.”
Id. As the court explained in Pope & Talbot, Inc., “it is suf-
ficient if the inquiry is within the authority of the agency,
the demand not too indefinite and the information sought
is reasonably relevant. The gist of the protection is in the
requirement, expressed in terms, that the disclosure sought
shall not be unreasonable.” Id. at 616 (internal quotation
marks omitted).5
As we read plaintiffs’ complaint, they alleged that
the city’s subpoena exceeded those limitations. Specifically,
they alleged that the city’s continued requests for produc-
tion were “unreasonable” and that, if they were “required to
5
The court explained in Pope & Talbot, Inc., that those protections are suf-
ficient limitations on an agency’s authority to issue an investigative subpoena.
216 Or at 615-16. Of course, a person can also seek to limit production under a
subpoena because a statute, privilege, or constitutional provision protects them
from being required to disclose the requested information.
Cite as 307 Or App 348 (2020) 357
continue producing documents, [they] will suffer annoyance,
oppression, and undue burden and expense.” Stated more
generally, plaintiffs alleged that continued compliance with
the city’s subpoena will cause them to suffer a nonspecu-
lative injury (undue burden and expense) to a legally pro-
tected interest (the right to avoid complying with an unrea-
sonably broad subpoena). Moreover, if the court agreed that
the city’s subpoena was unreasonable and unduly burden-
some, the court’s decision would have a practical effect on
plaintiffs’ rights. See Morgan v. Sisters School District #6,
353 Or 189, 195-97, 301 P3d 419 (2013) (listing those criteria
for standing under the Oregon’s declaratory judgment act).
It follows that plaintiffs have standing to seek a declaration
that the city’s subpoena exceeded those statutory limits.
The city notes, however, that plaintiffs are seeking
a declaration that “ ‘they have complied with their obliga-
tions under the [city’s] subpoena,’ ” and it argues that that
request is not a permissible subject of declaratory relief. As
we read plaintiffs’ complaint, the phrase on which the city
focuses goes to the supplemental relief that plaintiffs seek
if the court agreed that further compliance with the city’s
subpoena would be unreasonable and unduly burdensome.6
Perhaps plaintiffs’ complaint could have been phrased more
artfully. However, we do not think that asking for a dec-
laration regarding what perhaps should have been viewed
as supplemental relief divested plaintiffs of standing. We
accordingly disagree that plaintiffs lack standing to bring
their declaratory judgment action.
We turn next to whether, as plaintiffs argue on
appeal, ORS 183.480(3) authorizes them to bring a declara-
tory judgment action to determine if the city lacks probable
cause to pursue its investigative subpoena.7 Plaintiffs’ argu-
ment raises at least three issues. The first is whether the
declaration that plaintiffs seek goes beyond the allegations
6
We do not understand plaintiffs to be asking the circuit court to direct the
city to stop its investigation based on the evidence that they have produced to
date—a request that might fail to state a claim for which relief could be granted.
7
ORS 183.480(3) provides: “No action or suit shall be maintained as to the
validity of any agency order except a final order as provided in [sections autho-
rizing judicial review of certain agency orders] or except upon showing that the
agency is proceeding without probable cause * * *.”
358 Nyland v. City of Portland
in their complaint. The second is whether the APA gener-
ally applies to the city’s subpoena. The third is whether
ORS 183.480(3) required that the city have probable cause
to believe that plaintiffs engaged in fraud in order to initiate
or continue its investigation.
We focus initially on the second issue noted above—
whether the APA generally applies to the city’s issuance of
its subpoena. By its terms, the APA applies to the actions
of “agencies,” which the APA defines as “any state board,
commission, department, or division thereof, or officer
authorized by law to make rules or to issue orders[.]” ORS
183.310(1) (defining “agency” for the purposes of the APA;
emphasis added). By definition, the APA applies to state
agencies, not municipalities. The APA also sets out excep-
tions to that definition, which include the legislative and
judicial branches of state government and certain speci-
fied state agencies. ORS 183.310(1), (2). The one unifying
characteristic of both the agencies to which the APA applies
and those that it expressly excepts is that they are “state”
agencies. The City of Portland is a municipality, not a state
agency. By its terms, the APA does not apply to the city’s
subpoena except to the extent that ORS 200.065(4) makes
one section of the APA—ORS 183.440—applicable.
Plaintiffs, however, advance three reasons why the
APA applies to the city’s subpoena. Plaintiffs argue in their
reply brief that the reference in ORS 200.065(4) to one section
of the APA—ORS 183.440—does not preclude other sections
of the APA from applying to the city’s subpoena. Plaintiffs’
argument assumes that the entire APA would apply to the
city’s subpoena were it not for the single reference to ORS
183.440. Plaintiffs, however, never explain the basis for that
assumption, and it runs counter to the general rule that the
APA does not apply to municipalities. Beyond that, when the
legislature has provided that one section of the APA applies
to the city’s subpoena, we cannot apply additional sections of
the APA that the legislature has not mentioned. See State v.
Rogers, 330 Or 282, 290, 4 P3d 1261 (2000) (reiterating that
courts may not add what the legislature has omitted).
Plaintiffs argue alternatively that they have a due
process right, which ORS 183.480(3) reflects, “to seek relief
Cite as 307 Or App 348 (2020) 359
in the circuit court when [they] believe an agency is proceed-
ing without probable cause.” Plaintiffs, however, cite no due
process case that supports that proposition. The only due
process cases they cite stand for the general (and unremark-
able) proposition that government must comply with due
process if it deprives a person of a constitutionally protected
liberty or property interest. Moreover, plaintiffs’ apparent
due process argument—that the city could issue an inves-
tigative subpoena only if it had probable cause to believe
that plaintiffs fraudulently had obtained or retained their
woman-owned business certification—is difficult to square
with United States v. Morton Salt Co., 338 US 632, 70 S Ct 357,
94 L Ed 401 (1950). In that case, the Court explained that, in
civil investigations such as this one, an agency may issue an
investigative subpoena “merely on suspicion that the law is
being violated, or even just because it wants assurance that
it is not.” Id. at 642-43; accord Pope & Talbot, Inc., 216 Or
at 615 (explaining that the legislature may authorize agen-
cies to issue investigative subpoenas on less than probable
cause).8
Finally, plaintiffs contended at oral argument, that,
because the city is a “contracting agency” for the purposes of
ORS 200.065(4), it is a contracting agency for the purposes
of the Public Contracting Code and, as a result, is subject to
the APA. Plaintiffs are correct that ORS 200.005(1) takes
the definition of “contracting agency,” as that term is used in
ORS 200.065(4), from the Public Contracting Code. However,
the definition is broader than plaintiffs perceive, and the
Public Contracting Code is at odds with their argument that
8
The court explained in Brian v. Oregon Government Ethics Commission,
320 Or 676, 684, 891 P2d 649 (1995), that the answer to the question posed by
ORS 183.480(3)—whether an agency is proceeding without probable cause—
depends upon the substantive showing required for the agency to proceed. Brian,
for example, challenged the Ethics Commission’s decision to initiate the second
stage of an investigation into his conduct. Id. at 680. The commission’s enabling
statute provided that it could initiate that stage of an ethics investigation if it
had “ ‘a substantial, objective basis for believing that an offense or violation may
have been committed.’ ” Id. at 684 (quoting ORS 244.260(9); emphasis added).
The court explained that ORS 183.480(3) permitted Brian to challenge the com-
mission’s nonfinal order initiating the second stage of an ethics investigation on
the ground that the commission lacked probable cause to believe that an ethics
violation “may have been committed.” Id. The commission, however, did not need
probable cause to believe that Brian had in fact committed an ethics investiga-
tion before initiating the second stage of the investigation. Id.360 Nyland v. City of Portland
every action a local contracting agency takes pursuant to
the Code is subject to the APA.
ORS 200.005(1) provides that, for the purposes of
ORS chapter 200, the term “ ‘[c]ontracting agency’ has the
meaning given that term in ORS 279A.010,” which sets out
the definitions for the Public Contracting Code. See ORS
279A.010. The Public Contracting Code, in turn, provides
through a series of cross-references that the term “contract-
ing agency” means “state government bodies, local govern-
ment bodies and special government bodies” that are “autho-
rized by law to conduct a procurement.” See ORS 279A.010
(1)(b), (y); ORS 174.109.9 Contrary to plaintiffs’ argument,
the Public Contracting Code expressly recognizes that a
contracting agency can be either a state contracting agency
or a local contracting agency. It does not classify all con-
tracting agencies as state agencies subject to the APA.
Beyond that, in identifying judicial remedies for
actions taken by “contracting agencies,” the Public Contracting
Code distinguishes between “state contracting agencies” and
“local contracting agencies.” See ORS 279B.400. For example,
general and contract-specific special procurements by the
state are reviewable under the APA. See ORS 279B.400(2), (3)
(providing that general special procurements are reviewable
as rules under ORS 183.400 while contract-specific special
procurements are reviewable as orders in other than a con-
tested case under ORS 183.484). By contrast, special procure-
ments by local governments “may be challenged by filing a
writ of review under ORS chapter 34.” ORS 279B.400(4). The
same distinction applies to violations of ORS chapter 279A
for which a judicial remedy is not otherwise available under
the Public Contracting Code. ORS 279B.420(1). Violations
by state contracting agencies in implementing the Public
9
ORS 279A.010(1)(b) provides that “ ‘[c]ontracting agency’ means a public
body authorized by law to conduct a procurement,” and ORS 279A.010(1)(y) pro-
vides that “ ‘[p]ublic body’ has the meaning given that term in ORS 174.109.” ORS
174.109, in turn, provides that “ ‘public body’ means state government bodies,
local government bodies and special government bodies.” It follows that “con-
tracting agency,” as used in the Public Contracting Code and ORS chapter 200,
means “state government bodies, local government bodies and special govern-
ment bodies” that are “authorized by law to conduct a procurement.”
Cite as 307 Or App 348 (2020) 361
Contracting Code are subject to review under ORS 183.484
while similar violations by local contracting agencies are
subject to review “by means of a writ of review under ORS
chapter 34.” ORS 279B.420(4) (violations by state contracting
agencies); ORS 279B.420(5) (violations by local contracting
agencies).
The Public Contracting Code is a complex set of
statutes that attempt to define and regularize the proce-
dures that state and local government bodies must follow
when they procure goods and services. We do not attempt to
interpret all (or even many) of its provisions. However, based
on the sections discussed above, we are not persuaded that,
in providing that the phrase “contracting agency” in ORS
chapter 200 is defined the same way as that phrase is defined
in ORS 279A.010, the legislature intended to require that
all actions that a municipality (or local contracting agency)
takes in investigating fraud pursuant to ORS chapter 200
are subject to the APA.
Plaintiffs’ argument—that the circuit court had
jurisdiction under ORS 183.480(3) to determine whether the
city lacked probable cause to issue or enforce its subpoena—
assumes that the APA generally and ORS 183.480(3) spe-
cifically apply to the city’s subpoena. As explained above,
however, neither the APA nor ORS 183.480(3) applies to a
subpoena issued by the city. It follows that plaintiffs’ reli-
ance on ORS 183.480(3) is misplaced. Moreover, to the extent
that plaintiffs argue that the due process clause requires
that they be allowed to challenge the city’s subpoena for
lack of probable cause, their argument appears to assume,
contrary to Morton Salt Co. and Pope & Talbot, Inc., that
the city could issue and enforce its investigative subpoena
only if it had probable cause to believe that plaintiffs had
engaged in fraud in retaining their business’s woman-owned
certification.
Our conclusion that the APA generally does not
apply to the city’s subpoena also calls into question the cir-
cuit court’s ruling that it lacked jurisdiction over plaintiffs’
declaratory judgment action. As we understand the circuit
court’s ruling, it turned on three propositions. First, the
court started from the proposition that plaintiffs’ declaratory
362 Nyland v. City of Portland
judgment action alleged only that the city’s subpoena was
unreasonable and unduly burdensome.10 The court reasoned,
and plaintiffs agreed, that those objections could have been
raised in response to a motion to compel filed pursuant to
ORS 200.065(4) and ORS 183.440(2). Second, the circuit
court assumed that the APA generally applied to the city’s
investigation. Finally, as the circuit court recognized, Bay
River holds that the APA establishes a “comprehensive [and
exclusive] pattern for judicial review of administrative deci-
sions” that generally divests circuit courts of jurisdiction to
hear other causes of action challenging an agency’s orders.
See Bay River, 26 Or App at 720 (concluding that the circuit
court lacked jurisdiction to grant injunctive relief from an
agency order that could have been challenged initially in an
APA contested case hearing and, later, on judicial review of
the resulting final order).
The circuit court appears to have concluded that the
same comprehensive scheme for judicial review that divested
the circuit court of jurisdiction in Bay River divested it of
jurisdiction to hear plaintiffs’ declaratory judgment action.
The difficulty with the circuit court’s reasoning is that,
in this case, only one section of the APA—ORS 183.440—
applies to the city’s investigative subpoena. There is no
applicable “comprehensive [and exclusive] pattern for * * *
judicial review,” as there was in Bay River. Cf. Bay River, 26
Or App at 720.
To be sure, ORS 200.065(4), read in light of Pope &
Talbot, Inc., identifies a statutory path by which plaintiffs
could have raised their objections to the scope of the city’s
subpoena. There is a difference, however, between a stat-
utory path for getting an issue before a circuit court and
a comprehensive pattern of judicial review that manifests
a legislative intention to divest courts of jurisdiction over
other causes of action challenging the agency’s orders. See
Dental v. City of Salem, 196 Or App 574, 579-80, 103 P3d
1150 (2004) (so holding). The comprehensive pattern of judi-
cial review that was present in Bay River and that evidenced
10
Although plaintiffs have argued that the city lacked probable cause to
investigate their company, the circuit court’s jurisdictional ruling focused on the
claims that plaintiffs had alleged, not the one that they later argued.
Cite as 307 Or App 348 (2020) 363
a legislative intention to preclude other judicial remedies is
absent here. We cannot say (and the city does not argue on
appeal) that ORS 200.065(4) precluded the circuit court from
exercising jurisdiction. It follows that the circuit court erred
in ruling that it lacked jurisdiction over plaintiffs’ declara-
tory judgment action.
We summarize our resolution of the arguments that
the parties have raised on appeal. First, plaintiffs’ com-
plaint alleges that the scope of the city’s subpoena is unrea-
sonable and unduly burdensome. Plaintiffs have standing
to seek a declaration under the declaratory judgment act to
that effect. Second, under Bay River, ORS 200.065(4) does
not divest the circuit court of jurisdiction to resolve that
dispute. Third, the APA generally and ORS 183.480(3) spe-
cifically do not apply to the city’s subpoena. It follows that
plaintiffs’ appellate argument that they may challenge the
city’s subpoena under ORS 183.480(3) for lack of probable
cause rests on the incorrect legal premise.
One final issue warrants mention. In Nelson v.
Knight, 254 Or 370, 460 P2d 355 (1969), the Oregon Supreme
Court held that, even though a court has jurisdiction to
hear a declaratory judgment action, it also has discretion
to dismiss that action if another remedy is “ ‘more effective
or appropriate.’ ” Id. at 371-72 (quoting Edwin Borchard,
Declaratory Judgments 302 (2d ed 1941)); Brooks, 275 Or
at 625 (holding that the plaintiff’s declaratory judgment
action should be dismissed in favor of a nonexclusive statu-
tory remedy); Dental, 196 Or App at 581-82 (holding that the
plaintiff’s declaratory judgment action should be dismissed
in favor a more appropriate statutory remedy).
In Nelson, the Supreme Court exercised its discre-
tion to dismiss the plaintiff’s declaratory judgment action
even though the defendant had neither preserved nor raised
that nonjurisdictional issue. 254 Or at 371. Arguably, Nelson
permits us to exercise our discretion to decide whether
plaintiffs’ declaratory judgment action should be dismissed,
even though no party has raised that issue in this case.
We question, however, how broadly we should read Nelson.
The Oregon Supreme Court did not expressly consider its
authority to resolve the case on a nonjurisdictional ground
364 Nyland v. City of Portland
that no party had raised, and the discretionary issue in that
case might have seemed so obvious that the court implic-
itly concluded that no other resolution would be permissible.
See id. at 373-74 (dismissing a declaratory judgment action
raising an issue that could have been resolved in a pending
criminal proceeding). We also note that, after Nelson, other
jurisdictions have held that the decision whether to dismiss
a declaratory judgment action in favor of a more appropriate
remedy should be left, in the first instance, to the sound dis-
cretion of the trial court. See Wilton v. Seven Falls Co., 515
US 277, 289, 115 S Ct 2137, 132 L Ed 2d 214 (1995) (defining
procedure for declaratory judgments in federal courts).
We need not decide whether Nelson authorizes us
to make that discretionary call in the first instance and
without any request from the parties. Even if we have that
authority under Nelson, we conclude that it is not appropri-
ate to exercise it in this case. We note, as an initial matter,
that plaintiffs’ objections to the subpoena appear to still be
in flux. Plaintiffs alleged in their complaint that the city’s
subpoena was unreasonably broad and unduly burdensome.
However, they argued before the circuit court and again on
appeal that the problem with the subpoena was that the city
lacked probable cause to proceed. Plaintiffs do not appear
to have settled on their basis for objecting to the city’s sub-
poena, and the circuit court’s jurisdictional ruling foreclosed
them from amending their complaint to clarify exactly what
their objection to the subpoena is.
Until plaintiffs settle on their basis for objecting to
the city’s subpoena, it is not possible to tell whether their
objection can be adequately addressed in a proceeding to
compel compliance under ORS 200.065(4). That issue, in
turn, bears on the discretionary decision whether to dismiss
a declaratory judgment action in favor of another proceed-
ing. See Edwin Borchard, Discretion to Refuse Jurisdiction
of Actions for Declaratory Judgments, 26 Minn L Rev 677,
682 (1942) (so stating). Without knowing exactly what plain-
tiffs’ objections to the subpoena are, we cannot determine
whether their substantive objections can be adequately
considered in response to a motion to compel under ORS
200.065(4).
Cite as 307 Or App 348 (2020) 365
Second, neither plaintiffs nor the city has briefed
the nature of the statutory remedy set out in ORS 200.065(4).
They have not addressed whether the legislature intended
that ORS 200.065(4) would provide the exclusive or pre-
ferred remedy for enforcing the city’s subpoena. See Brooks,
275 Or at 625 (considering whether the ability to pursue a
nonexclusive writ of review to challenge an agency action
was more appropriate than a declaratory judgment action);
Dental, 196 Or App at 581-82 (considering procedural incen-
tives that made a nonexclusive statutory procedure more
appropriate than a declaratory judgment action). They have
not briefed whether plaintiffs’ objections (once those objec-
tions are clarified) can be adequately considered in respond-
ing to a motion to compel under ORS 200.065(4). And they
have not briefed whether it makes a difference that plain-
tiffs did not file their declaratory judgment action until after
the city had issued its investigative subpoena and started a
procedure that leads statutorily to a motion to compel under
ORS 200.065(4). In short, we do not have any briefing or
argument from the parties on those and other issues that
potentially bear on whether a motion to compel under ORS
200.065(4) is a more appropriate remedy than a declaratory
judgment action.
We conclude that, in these circumstances, the better
course is to limit our holding to the jurisdictional issues that
the parties have raised and briefed on appeal. On remand,
plaintiffs can clarify the basis for their objections to the city’s
subpoena, and the circuit court can determine, if requested,
whether it should exercise its discretion to retain or dismiss
plaintiffs’ declaratory judgment action.
Reversed and remanded.