FILED: August 4, 1999
LONE OAK RACING, INC., an Oregon
corporation, and OREGON
HORSEMEN'S BENEVOLENT &
PROTECTIVE ASSOCIATION, an
Oregon nonprofit corporation,
Respondents,
v.
STATE OF OREGON, acting by and
through the Oregon Racing Commission,
Appellant.
Appeal from Circuit Court, Marion County.
Richard D. Barber, Judge.
Argued and submitted on January 29, 1999.
John T. Bagg, Assistant Attorney General, argued the cause for appellant. With him on the briefs were Hardy Myers, Attorney General, and Michael D. Reynolds, Solicitor General.
Timothy J. Sercombe, argued the cause for respondents. With him on the brief was Preston Gates & Ellis LLP.
Before Edmonds, Presiding Judge, and Deits, Chief Judge,* and Armstrong, Judge.
EDMONDS, P. J.
Reversed and remanded with instructions to vacate judgment and dismiss for lack of jurisdiction.
*Deits, C. J., vice Warren, P. J., retired.
EDMONDS, P. J.
Defendant Oregon Racing Commission appeals from a judgment that
awarded plaintiffs summary judgment on their first claim for declaratory relief under
ORS 28.010 and declared plaintiffs' rights under ORS 462.125(2).(1) ORCP 47. We
remand for vacation of the judgment because we conclude that defendant had exclusive
jurisdiction over the controversy that led to the declaratory judgment.
In January 1997, plaintiffs Lone Oak Racing, Inc. (Lone Oak) and the
Oregon Horsemen's Benevolent & Protective Association (HBPA) filed a complaint in
circuit court for a declaratory judgment. As we understand it, the filing of the complaint
was prompted by a meeting with defendant that concerned plaintiffs' request that
defendant repeal a rule regarding simulcasting privileges. Simulcasting privileges are
important to the economic viability of a race meet.(2) Plaintiffs contended that the rule
would "preclude simulcasting by" Lone Oak and could make a race meet financially
unsuccessful. As a result of the meeting, plaintiffs apparently came to believe that the
commission intended to deny any application by Lone Oak for a license for the 1997
racing season based on an interpretation of ORS 462.125. In their complaint, plaintiffs
alleged that Lone Oak "plan[ned] to apply for a license to conduct [its Salem] meet
during the 1997 season." They sought to obtain a favorable declaration about the
meaning of the statute from the circuit court, rather than proceeding through the
administrative process with defendant.
In its answer to the complaint, defendant admitted the following facts:
Lone Oak is an Oregon corporation that has conducted a "horse race meet at the Oregon
State Fairgrounds each year for the past several years." Defendant licensed Lone Oak to
conduct those meets under the statutory authority for commercial horse race meets.
Defendant allocated fewer than 80 days for the Lone Oak meet each year from 1992 to
1996. HBPA is an Oregon nonprofit corporation that is "devoted to furthering the
welfare of persons in the horse racing industry, including horse owners, trainers and
grooms." Defendant "has recognized HBPA as representative of the horse racing
industry in the State of Oregon. HBPA is an interested party in the criteria used by
[defendant] to approve horse race meet licensees." Additionally, defendant's answer
admitted the following excerpt from plaintiffs' complaint:
"By letter of December 12, 1996 to [Lone Oak], Oregon Racing
Commission Chair Stephen S. Walters stated that under ORS 462.125(2) a
commercial meet licensee must 'run a minimum of 80 days of nine live
races each.' At the December 19, 1996 meeting of the Oregon Racing
Commission, Chair Walters stated that this interpretation of ORS
462.125(2) was one shared by him, the executive director of the
Commission and its legal counsel. Chair Walters also stated that the effect
of this interpretation would be that an application by [Lone Oak] for a
commercial meet license for the Salem facility for the period of time
obtained in the past would be denied."
Plaintiffs sought to obtain a declaration from the circuit court that "ORS
462.125(2) does not require each commercial horse race meet to be conducted for a
period of 80 or more race days[.]" Defendant's answer contained a counterclaim
requesting that, in the event that the trial court did not dismiss plaintiffs' complaint, the
trial court declare
"that an application for a commercial race meet license may be granted to
race meets for horses in a manner not inconsistent with allocations made by
the Commission for the calendar years 1992 and 1993 and only if not fewer
than nine live races occur on 40 percent of all days on which the
Commission authorizes pari-mutuel wagering for horse races, or on 80
days, whichever is greater, as required by ORS 462.125(2); and that such
requirements must be met in each 'metropolitan area' within the meaning of
ORS 462.125(3)."
Defendant moved for summary judgment. Plaintiffs did not file a reply to
defendant's counterclaim but received leave from the trial court to file an amended
complaint. The first claim of plaintiffs' amended complaint requested declaratory and
injunctive relief concerning ORS 462.125, and the amended complaint contained two
additional claims. Plaintiffs also filed a motion for summary judgment. Defendant did
not file an amended answer in response to plaintiffs' amended complaint.
The trial court entertained defendant's and plaintiffs' motions for summary
judgment. In a letter to the parties' attorneys, the trial court ruled that there were "no
genuine issues of material fact in dispute" and that plaintiffs had stated a justiciable
controversy and were justified in not filing a license application with defendant before
they filed their claim for relief in circuit court. Eventually, the trial court entered a
modified judgment that provided, in part:
"1. Judgment is entered in favor of Plaintiffs on their first claim
for relief. The court declares, as to commercial horse race meet licensees
only, ORS 462.125(2) requires that all horse race meet licensees must not
run fewer than nine live races on 40% of all days on which the Oregon
Racing Commission authorizes pari-mutuel wagering for horse races, or on
80 days, whichever is greater. An application for a commercial horse race
meet with fewer than 80 days of live racing may be allowed by the Oregon
Racing Commission if the total number of live race days in the state in each
fiscal year is at least 40% of the total number of days allocated to
pari-mutual wagering (live plus simulcast days), if the applicant otherwise meets
the requirements of law;
"2. Declaratory judgment is denied as to Defendant's
counterclaim as inconsistent with the court's ruling on Plaintiffs' first claim
for relief, and is therefore dismissed;
"3. Plaintiffs' second claim for relief is dismissed for lack of
jurisdiction;
"4. Plaintiffs' third claim for relief is dismissed for lack of
jurisdiction[.]"
On appeal, defendant assigns error to the trial court's failure to dismiss
plaintiffs' action on the ground that plaintiffs' exclusive remedy was under the Oregon
Administrative Procedures Act (APA), ORS 183.310 et seq. Defendant argues that
"where the legislature sets out an administrative licensing process and a
remedy for denial of a license, the administrative process should be
followed and should not be subject to collateral attack through declaratory
judgment or some other proceeding in circuit court. If a party is permitted
to pursue both the administrative remedy and seek a declaration on a
critical matter in another forum, there is a very real possibility of
conflicting findings and confusion over which order or resolution should
be given force and effect."(3)
Plaintiffs counter:
"There was no agency order to review, so as to bring into play the judicial
review parts of the Administrative Procedures Act. Declaratory relief
should not be refused because a statutory construction issue could be
adjudicated in potential administrative processes, when relief under the
administrative processes would not be timely, the issue involves no agency
expertise, and the agency position is certain and would not resolve the
controversy. At a minimum, the declaratory relief here was proper under
the Commission's counterclaim seeking a construction of ORS 462.125
from the court."
Initially, we discuss the claims for declaratory judgment as they pertain to
plaintiff HBPA. In their brief, plaintiffs argue that a justiciable controversy exists
between them and defendant for purposes of ORS chapter 28. Specifically, they contend:
"HBPA had no administrative remedy to exhaust. Despite the
Commission's references to both plaintiffs as 'Lone Oak,' the interests of
HBPA are separate from those of Lone Oak. The parties agree that HBPA
is the 'representative of the horse racing industry in the State of Oregon,'
that the interpretation of ORS 462.125 advanced by the Commission's
representatives 'will result in less purse money being awarded to Oregon
horse breeders, trainers and owners' and that 'the viability of the horse
racing industry in Oregon will be diminished.' Given this economic harm
to its members, and the imminent loss of the Salem and Grants Pass meets
by the threatened actions of the Commission, HBPA was entitled to seek
immediate declaratory relief from a court."
They also assert that "HBPA had a * * * genuine and existing interest in
that its members would lose substantial revenue given the new interpretation of ORS
462.125(2)." They also say that defendant
"admitted that its interpretation of ORS 462.125 would diminish the
viability of the horse racing industry in the state. The industry had a
compelling economic interest of its own to advance and protect. There was
no need for * * * Lone [Oak] to exhaust its licensing opportunities in order
for HBPA to assert its declaratory judgment rights."
Finally, the affidavit of HBPA's Executive Secretary in support of plaintiffs' motion for
summary judgment states, in part, that "[t]he purpose of this affidavit is to establish that
the members of the HBPA will adversely be affected or aggrieved by the challenged
actions and interpretations of the statutes."
In Brown v. Oregon State Bar, 293 Or 446, 449-50, 648 P2d 1289 (1982),
the court explained that the "two jurisdictional requisites for entertaining an action for
declaratory relief" are a justiciable controversy and subject matter jurisdiction over the
controversy. Thereafter, in AFSCME v. DAS, 150 Or App 87, 94, 945 P2d 102 (1997),
we reasoned that "a plaintiff's standing is germane to whether a justiciable controversy
exists" in a claim under ORS chapter 28 and that we are required to raise that
jurisdictional issue even though no party has done so. Here, HBPA's claimed interest is
that the horse racing industry will suffer and its members will lose substantial revenues,
given defendant's anticipated interpretation of ORS 462.125. However, in Oregon
Taxpayers United PAC v. Keisling, 143 Or App 537, 544, 924 P2d 853, rev den 324 Or
488 (1996), cert den 520 US 1252 (1997), we held that "ORS 28.020 does not allow an
organization to assert the rights of its members." Thus, HBPA lacks standing to
represent its members, and there is no justiciable controversy involving HBPA that
permits the circuit court to entertain HBPA's action for declaratory relief. Consequently,
the trial court erred in granting declaratory relief to HBPA.
The remainder of our opinion focuses on the issues presented on appeal as
they relate to plaintiff Lone Oak and particularly on the issue of whether defendant had
exclusive jurisdiction over Lone Oak's claim. In deciding whether the trial court lacked
jurisdiction, the Supreme Court's decisions in Boise Cascade Corp. v. Board of Forestry
(S42159), 325 Or 185, 935 P2d 411 (1997), Hay v. Dept. of Transportation, 301 Or 129,
719 P2d 860 (1986), and Alto v. State Fire Marshal, 319 Or 382, 876 P2d 774 (1994),
are instructive. In Boise Cascade Corp., the plaintiff brought an inverse condemnation
action against the State of Oregon arising out of the Board of Forestry's refusal to permit
logging operations on the plaintiff's land. After the trial court dismissed the inverse
condemnation claim on several grounds, including lack of subject matter jurisdiction, the
plaintiff appealed to this court. We reversed. The state petitioned the Supreme Court for
review and argued that
"(1) [t]he Board has 'exclusive' jurisdiction, to the exclusion of the circuit
court, to decide the 'takings' issue; or, (2) alternatively, a regulatory
'takings' claim must be resolved, in the first instance, by the agency whose
rule is alleged to have effected a 'taking,' because the agency has 'primary
jurisdiction' over such claims." Boise Cascade Corp., 325 Or at 191.
The court explained the difference between primary and exlusive jurisdiction:
"The doctrine of 'primary' jurisdiction is defined as a doctrine under
which, 'where the law vests in an administrative agency the power to decide
a controversy or treat an issue, the courts will refrain from entertaining the
case until the agency has fulfilled its statutory obligation.' Black's Law
Dictionary 1190-91 (6th ed 1990). An even clearer and more
comprehensive definition appears in a standard layman's dictionary: '[T]he
right or responsibility of an administrative or regulatory agency to pass
initially on controversies involving matters of fact or discretion within its
sphere before relief is sought in the courts[.]' Webster's Third New Int'l
Dictionary 1800 (unabridged ed 1993). 'Exclusive' jurisdiction is defined
as jurisdiction 'to the exclusion of all other [tribunals].' Black's, at 564.
'Concurrent' jurisdiction means, in this case, that a court and administrative
agency share '[a]uthority * * * to deal with the same subject matter.' Id. at
291." Boise Cascade Corp., 325 Or at 191 n 8 (bracketed material in
original; omission in original).
It concluded that the agency did not have exclusive jurisdiction and "that [the] plaintiff's
complaint properly was before the circuit court, because the circuit court and the Board
share concurrent jurisdiction in this case. It follows that the trial court erred in
dismissing the action for lack of subject matter jurisdiction." Id. at 196 (emphasis
added).
In Hay, the Oregon Department of Transportation (ODOT) had
promulgated a rule that allowed public parking on the plaintiffs' beach property. After
the rule went into effect, the plaintiffs filed a complaint in circuit court alleging that the
use of their property for parking constituted a trespass and a nuisance, thereby reducing
their property value because of the effect of the rule. The defendant agencies moved for
summary judgment on the ground that the exclusive means for a challenge of the rule
was through the administrative process under ORS 183.400(1). After the trial court
granted summary judgment, the plaintiffs appealed. On review, the Supreme Court
rejected the defendant agencies' argument that the APA did not allow the circuit court to
determine the rule's validity in the context of a civil action for trespass and nuisance.
The court reasoned that ORS 183.400(1) was not exclusive on its face. It held:
"In this case, the circuit court could hear challenges to the rule's
validity. Our decision does not mean that anyone who dislikes a rule may
challenge that rule in circuit court; ORS 183.400(1) authorizes the Court of
Appeals to hear such a challenge. Only when a party places a rule's validity
at issue in a separate civil action may circuit courts determine a rule's
validity. This is such a case." Hay, 301 Or at 138.
In Alto, the plaintiffs brought an action in circuit court for declaratory and
injunctive relief under ORS chapter 28 against the State of Oregon. They alleged that
certain rules of the State Fire Marshal violated statutory prohibitions. The challenged
rules had not gone into effect. The defendants moved to dismiss the plaintiffs' complaint
on the ground that the circuit court lacked subject matter jurisdiction over the claim
because the complaint challenged an administrative rule. The circuit court concluded
that it had jurisdiction and granted declaratory relief under ORS chapter 28, declaring the
meaning of the statutes. It also enjoined enforcement of the rule. On review, the
Supreme Court examined whether the plaintiffs' challenge could have been brought
under ORS 183.400(1)(4) or under ORS 183.400(2).(5) It concluded that all of the plaintiffs'
arguments that the Fire Marshal's rules violated various statutory provisions could have
been examined under ORS 183.400(1). The remaining question was whether the
plaintiffs were entitled to bring the action in circuit court under ORS chapter 28 because
they sought an injunction, a remedy that is unavailable through the administrative
process. The court concluded that injunctive relief was not necessary because, at the
time the complaint was filed, the challenged administrative rules had not yet gone into
effect and the court assumed that the state agency would follow the law as decided by
this court under ORS 183.400. Consequently the court concluded that "the circuit court
lacked subject matter jurisdiction to hear [the] plaintiffs' challenge to the validity of the
Fire Marshal's rules under" ORS chapter 28 and that exclusive jurisdiction existed in the
Court of Appeals under ORS 183.400(1). Alto, 319 Or at 395.
Boise Cascade Corp., Hay and Alto provide the analytical template to be
used in deciding this case. We must determine whether the agency had exclusive subject
matter jurisdiction over Lone Oak's claim or whether the agency and the court had
concurrent jurisdiction such that the primary jurisdiction doctrine could impact the
choice of forum. Cf. FOPPO v. County of Marion, 93 Or App 93, 97, 760 P2d 1353
(1988), rev den 307 Or 326 (1989) (holding that a letter from the agency's legal counsel
was not an order under ORS 183.310(5)(a) but, nonetheless, the circuit court did not
have jurisdiction to entertain the plaintiff's claim for declaratory relief because the
agency "is subject to the APA; therefore, the APA provides the exclusive methods for its
actions and for review of those actions"). To make this determination, we look to the
statutes that circumscribe defendant's authority and explore the nature of Lone Oak's
claim.
ORS 462.270 provides, in part:
"(1) The Oregon Racing Commission shall license, regulate and
supervise all race meets held in this state and cause the various places
where race meets are to be held to be visited and inspected at least once
each fiscal year.
"(2) The commission shall be the sole judge of whether or not a race
meet shall be licensed. The application for a race meet license shall specify
the duration of each race meet, the number of race days the race meet shall
continue and the number of races per day. The commission, in its sole
discretion, is authorized either to accept or reject any application for a race
meet license, and the decision of the commission is a final order which can
be contested only on the basis that the commission abused its discretionary
authority.
"(3) The commission shall prepare and promulgate a complete set of
rules to govern the race meets in every phase of operation consistent with
the provisions of this chapter, public safety, health, welfare and any other
matter pertaining to the good conduct of racing and shall make rules to
govern public training tracks consistent with this chapter and with public
health, safety, welfare, humane practices, and any other matter pertaining to
the good conduct of racing. The commission shall also prepare and
promulgate rules for the conduct of hearings held and shall establish the
procedure to be followed in accordance with the Administrative Procedures
Act then in effect." (Emphasis added.)
Under the language of ORS 462.270, defendant is the "sole judge" of
whether a race meet shall be licensed. That language means that defendant has exclusive
jurisdiction over the subject of the licensing of race meets. Apparently, the declaratory
judgment action in this case was prompted by Lone Oak's belief that, if it applied for a
license for the 1997 racing season, defendant would deny the application based on the
commission's interpretation of ORS 462.125(2). In that respect, this case differs from
Boise Cascade Corp. and Hay, where the administrative process at the agency level had
already been completed and the plaintiffs were subject to the effects of the completed
process when they sought relief in circuit court. This case is more like the preemptive
effort that occurred in Alto.(6) As in Alto, Lone Oak's concern about the meaning of the
statute could have been raised and adjudicated under the APA, had it applied for a
license. Had Lone Oak made an application, defendant's interpretation of ORS
462.125(2) would have affected its ultimate decision about whether to grant a license to
Lone Oak for the 1997 season. That interpretation then would have been subject to our
review under ORS 183.480 and ORS 183.482.(7) Thus, because Lone Oak's declaratory
judgment action concerned licensing, a subject within the exclusive jurisdiction of
defendant, we conclude that the circuit court did not have subject matter jurisdiction to
entertain Lone Oak's complaint for a declaratory judgment.(8) The trial court erred in not
dismissing plaintiffs' action for lack of jurisdiction.
Because of our holding that the circuit court lacks subject matter
jurisdiction, we need not address Lone Oak's arguments or defendant's second
assignment of error.
Reversed and remanded with instructions to vacate judgment and dismiss
for lack of jurisdiction.
1. ORS 462.125(2), which was amended in 1993, provides, in pertinent part:
"Not more than 350 days of racing, exclusive of racing days authorized to
designated licensees pursuant to subsections (4) and (5) of this section, shall be
held in any metropolitan area in any fiscal year. Race days shall be allocated to
race meets for horses (class A) and to race meets for greyhounds (class B) in a
manner not inconsistent with allocations made by the commission for calendar
years 1992 and 1993. However, not fewer than nine live races must occur on 40
percent of all days on which the commission authorizes pari-mutuel wagering for
horse races, or on 80 days, whichever is greater. None of the days allocated in any
metropolitan area to race meets for horses and to race meets for greyhounds shall
overlap."
Return to previous location.
2. According to the affidavit that Lone Oak's president made in support of plaintiffs' motion for summary judgment,
"[s]imulcasting involves the broadcasting of animal races at a betting facility located at a race track or at an off-track facility. The simulcast bets are tallied and pooled with the wagers at the sending track. Wagering upon simulcasts is essential to the continued financial viability of both of these race meets. It substantially increases the number of race offerings. Simulcasting also attracts bettors by offering them races from tracks such as Del Mar that feature nationally-recognized horses, trainers, jockeys, and owners."
The affidavit of defendant's executive director in support of defendant's motion for summary judgment states, in part:
"Simulcasting privileges are important in racing because serious aficionados of parimutuel gambling want to bet on the 'big races' at large tracks in other states and want to bet into the large betting pools created by the simulcast system. Each time a bet is placed by either simulcasting or live racing, the race meet 'tote' (computer system) computes the bet, assigns odds, and at the end of the race, tallies the winning amounts according to a pre-ordained formula. In addition to the amounts assigned to the wagering pool, another sum is assessed and distributed or held for the costs of operations, purses, bonuses, State of Oregon share, and profits. The more races a licensee can offer for betting, the more money can be made, especially off of simulcasting which has a relatively low overhead. By statute, simulcasting privileges can be granted only to commercial race meet licensees."
Return to previous location.
3. Plaintiffs cross-appealed, but they subsequently abandoned the cross-appeal.
Return to previous location.
4. ORS 183.400(1) provides:
"The validity of any rule may be determined upon a petition by any person to the Court of Appeals in the manner provided for review of orders in contested cases. The court shall have jurisdiction to review the validity of the rule whether or not the petitioner has first requested the agency to pass upon the validity of the rule in question, but not when the petitioner is a party to an order or a contested case in which the validity of the rule may be determined by a court."
Return to previous location.
5. ORS 183.400(2) provides:
"The validity of any applicable rule may also be determined by a court, upon review of an order in any manner provided by law or pursuant to ORS 183.480 or upon enforcement of such rule or order in the manner provided by law."
Return to previous location.
6. Lone Oak argues that this case is analogous to Clark v. City of Albany, 142 Or App 207, 921 P2d 406 (1996). However, Lone Oak's reliance is misplaced. Clark's claim for declaratory relief concerned the issue of whether the city could lawfully condition the approval of Clark's annexation application on his construction of a roadway. Clark is similar to Boise Cascade Corp. and Hay in that the process of making an application and the city's response was complete. In this case, Lone Oak did not make an application to defendant for a license. Moreover, the issues in Clark did not implicate the APA.
Return to previous location.
7. ORS 183.480 provides, in part:
"(1) * * * any person adversely affected or aggrieved by an order or any party to an agency proceeding is entitled to judicial review of a final order, whether such order is affirmative or negative in form. A petition for rehearing or reconsideration need not be filed as a condition of judicial review unless specifically otherwise provided by statute or agency rule.
"(2) Judicial review of final orders of agencies shall be solely as provided by ORS 183.482, 183.484, 183.490 and 183.500.
"(3) No action or suit shall be maintained as to the validity of any agency order except a final order as provided in this section and ORS 183.482, 183.484, 183.490 and 183.500 or except upon showing that the agency is proceeding without probable cause, or that the party will suffer substantial and irreparable harm if interlocutory relief is not granted."
ORS 183.482 confers jurisdiction for judicial review of contested cases in this court.
Return to previous location.
8. We do not decide what remedies HBPA would have had had it first raised the issue of the interpretation of ORS 462.125(2) to defendant, in light of the fact that it was not seeking a license.
Return to previous location.
![]() |
|

![]() |
Updated: 08/04/99 Web authoring by Print Services |