Nay v. Dept. of Human Services

Under ORS 183.400(b), an administrative agency cannot amend a rule in a way which “depart[s] from a legal standard expressed or implied in the particular law being administered.”

The Department of Human Services (the Department) sought review of a judgment from the Oregon Court of Appeals which held the Department’s rule amendments to OAR 461-135-0832(10)(b)(B)(viii) (2010) and OAR 461-1350835(1)(e)(B)(iii) (2010) were invalid. On appeal, the Department argued that its authority for the amended rules came from the broad manner in which ORS 416.350(6)(a) defines the term “estate.” Under ORS 411.060, “the Department has general authority to ‘adopt and enforce rules necessary to ensure full compliance with federal and state laws relating to public assistance programs and functions administered by the department.’” In general, the Department of Human Services is required by law to recover Medicaid payments from those assets in which the Medicaid recipient had an interest at the time of death. In 2008, the Department amended its administrative rules, thereby increasing the scope of that recovery. In this case the Court stated, “[t]o determine the validity of the rule amendments, [a court] must compare the legal standards contained in Oregon’s marital dissolution statute [ORS 107.105(1)(f)(E)] with the legal standards found in the rule amendments.” The Court found “major variations” between the two legal standards. Under ORS 183.400(b), an administrative agency cannot amend a rule in a way which “depart[s] from a legal standard expressed or implied in the particular law being administered.” Therefore, the Court held that the rule amendments to OAR 461-135-0832(10)(b)(B)(viii) (2010) and OAR 461-1350835(1)(e)(B)(iii) were invalid. Affirmed in part and vacated in part.