Sky Lakes Medical Center v. Dept. of Human Services

A court must defer to an agency’s interpretation of its own administrative rule if the interpretation is “plausible” and not “inconsistent with the wording of the rule itself, or with the rule’s context, or with any other source of law.” Don’t Waste Oregon Com. v. Energy Facility Siting, 320 Or 132, 142, 881 P2d 119 (1994).

Petitioner appealed the trial court’s grant of the Department of Human Services' (DHS) and Department of Administrative Services’ (DAS) motion for summary judgment.  Petitioner had unsuccessfully bid on a contract to build and lease a building to DHS.  On appeal, Petitioner argued that OAR 125-110-0001 required DAS to find that a lease of a building presently complied with local land use laws at the time the lease document was created.  In response, DHS and DAS asserted that the lease only had to comply with applicable zoning regulations at the time the lease commenced.  DHS and DAS argued that a covenant in the lease agreement satisfied their interpretation of OAR 125-110-0001.  A court must defer to an agency’s interpretation of its own administrative rule if the interpretation is “plausible” and not “inconsistent with the wording of the rule itself, or with the rule’s context, or with any other source of law.”  Don’t Waste Oregon Com. v. Energy Facility Siting, 320 Or 132, 142, 881 P2d 119 (1994).  The Court found that DAS’s interpretation of the word “compatible” in OAR 125-110-0001 was plausible and consistent with the “plain meaning” of the word in the rule, “in related contexts,” and with other sources of law.  Thus, the Court concluded that “the circuit court properly deferred to DAS’s interpretation of” OAR 125-110-0001.  Affirmed.