JGB Enterprises, LLC v. OLCC

326

Argued and submitted July 26, 2022, affirmed April 19, 2023

JGB ENTERPRISES, LLC,

dba Twisted River Saloon,

Petitioner,

v.

OREGON LIQUOR AND

CANNABIS COMMISSION,

Respondent.

Oregon Liquor Control Commission

A176066

529 P3d 262

The Oregon Liquor and Cannabis Commission (OLCC) issued a notice of

proposed suspension of licensee’s liquor license, based on licensee’s violation of

two OLCC rules, OAR 845-006-0345(15) and (16). Those rules prohibit a licensee

from engaging in certain liquor-related activities that violate, respectively, an

order issued by the Governor or certain public health laws created pursuant to an

order of the Governor during a state of emergency. Licensee made a late hearing

request, which OLCC denied for failure to establish good cause. OLCC then issued

a final order by default suspending licensee’s license for violating OAR 845-006-

0345(15) by violating Executive Order (EO) 20-66, which imposed restrictions on

eating and drinking establishments during the COVID-19 state of emergency,

and for violating OAR 845-006-0345(16) by violating Oregon Health Authority

guidance created under EO 20-66. On judicial review, licensee challenges both

OLCC’s denial of its late hearing request and OLCC’s final order by default. As

to the default order, licensee argues that ORS 471.333(3) limits OLCC’s author-

ity to suspend a license for maintaining an insanitary establishment in viola-

tion of public health laws, that OLCC effectively suspended licensee’s license on

that basis, and that OLCC failed to comply with ORS 471.333(3) and therefore

failed to make a prima facie case for suspension as required by ORS 183.417(4).

Held: Regarding the late hearing request, OLCC did not abuse its discretion in

denying the request, nor was it required to hold a “good cause” hearing under

OAR 137-003-0528(3) in these circumstances. Regarding the default order, the

Court of Appeals recognized that the preservation issue was complex. Assuming

without deciding that it could reach the merits, the court rejected licensee’s argu-

ments and concluded that, because OLCC suspended licensee’s license for violat-

ing OLCC’s own rules, not for maintaining an insanitary establishment, ORS

471.333(3) did not apply.

Affirmed.

Joseph O. Huddleston argued the cause for petitioner. Also

on the briefs were Kevin L. Mannix and Kevin L. Mannix, P.C.

Colm Moore, Assistant Attorney General, argued the cause

for respondent. Also on the brief were Ellen F. Rosenblum,

Attorney General, and Benjamin Gutman, Solicitor General.

Cite as 325 Or App 326 (2023) 327

Before Aoyagi, Presiding Judge, and Egan, Judge, and

Jacquot, Judge.*

AOYAGI, P. J.

Affirmed.

_______________

* Jacquot, J., vice James, J. pro tempore.

328 JGB Enterprises, LLC v. OLCC

AOYAGI, P. J.

JGB Enterprises, LLC, doing business as Twisted

River Saloon (licensee) holds a liquor license issued by

the Oregon Liquor and Cannabis Commission (OLCC). In

March 2021, OLCC issued a notice of proposed suspension

of that license, based on licensee having violated two OLCC

rules, OAR 845-006-0345(15) and (16). Those rules prohibit

a licensee from engaging in certain liquor-related activities

that, respectively, violate an order issued by the Governor,

or violate certain public health laws created pursuant to an

order of the Governor during a state of emergency. In this

case, licensee was alleged to have violated OAR 845-006-

0345(15) by violating Executive Order (EO) 20-66, which

imposed restrictions on eating and drinking establishments

during the COVID-19 state of emergency, and to have vio-

lated OAR 845-006-0345(16) by violating Oregon Health

Authority (OHA) guidance created under EO 20-66.

Licensee made a late request for a hearing on the

proposed suspension. OLCC denied that request, conclud-

ing that good cause had not been established. OLCC then

issued a final order by default in which it suspended licens-

ee’s license for 38 days for violating OAR 845-006-0345(15)

and (16). On judicial review, licensee raises two assignments

of error. First, licensee challenges OLCC’s denial of its late

request for a hearing on the proposed suspension. Second,

licensee argues that, in its final order by default, OLCC

failed “to comply with ORS 471.333(3) to establish a prima

facie case under ORS 183.417(4).” We affirm.

I. BACKGROUND

We begin by describing the larger context in which

this case arose. We then address the specific facts of this

case, which are taken from OLCC’s findings and undisputed

evidence in the record that is consistent with those findings.

Campbell v. Employment Dept., 245 Or App 573, 575, 263

P3d 1122 (2011).

In March 2020, in response to the COVID-19 pan-

demic, the Governor declared a state of emergency under

ORS 401.165. The Governor has broad authority during a

state of emergency, including the right to exercise “all police

Cite as 325 Or App 326 (2023) 329

powers vested in the state by the Oregon Constitution” to

effectuate the purposes of ORS chapter 401. ORS 401.168(1).

The Governor also has the “power to enact reasonable regu-

lations for the protection of ‘the public health and the public

safety.’ ” Elkhorn Baptist Church v. Brown, 366 Or 506, 524-

25, 466 P3d 30 (2020) (quoting Jacobson v. Massachusetts,

197 US 11, 25, 25 S Ct 358, 49 L Ed 643 (1905)). And the

Governor may implement any action authorized by ORS

433.441 to 433.452. Id. at 526-27. That includes closing facil-

ities, regulating goods and services, and controlling or lim-

iting “entry into, exit from, movement within and the occu-

pancy of premises in any public area subject to or threatened

by a public health emergency,” as reasonably necessary to

respond to the emergency. ORS 433.441(3).

The Governor issued various executive orders in

connection with the COVID-19 state of emergency. This

case concerns EO 20-66, issued on December 2, 2020. As

relevant here, EO 20-66 ordered OHA to issue binding guid-

ance on safety measures, operational limitations, and capac-

ity limits for eating and drinking establishments—with

more restrictive measures applying in counties with higher

COVID-19 transmission rates—which became part of EO

20-66. EO 20-66(10)(c) also directed “other state agencies

with regulatory enforcement authority, including but not

limited to * * * [OLCC], to continue their efforts to protect

the lives and health of Oregonians, under existing civil and

administrative authorities, the directives in [EO 20-66], the

Risk Level Metrics, and any guidance issued by OHA or

other state agencies to implement [EO 20-66].” OLCC sub-

sequently promulgated two administrative rules. OAR 845-

006-0345(15) prohibits licensees from engaging in activi-

ties relating to alcohol that violate an order issued by the

Governor. OAR 845-006-0345(16) prohibits licensees from

engaging in activities relating to alcohol that violate certain

public health laws created pursuant to an order issued by

the Governor during a state of emergency.

Licensee holds a “Full On-Premises Sale” liquor

license for an eating and drinking establishment in Lane

County. On February 23, 2021, OLCC issued an order of

immediate suspension of that license “because continued

330 JGB Enterprises, LLC v. OLCC

operation of your premises represents a serious danger to

public health and safety.” OLCC alleged that from January 4,

2021, to February 20, 2021, while Lane County was desig-

nated “Extreme Risk,” licensee had violated EO 20-66, and

thus violated OAR 845-006-0345(15), by allowing indoor

on-premises consumption of food and/or drink, not enforc-

ing mask requirements, not enforcing six-foot distancing

requirements, and/or not placing plexiglass shields between

patrons and bar staff. OLCC alleged that licensee had also

violated OHA guidance created pursuant to EO 20-66 that

qualified as public health laws, and thus violated OAR 845-

006-0345(16), by the same conduct. OLCC ordered licensee

to immediately stop selling and serving alcoholic beverages

for onsite consumption. The order advised licensee of its

hearing rights, including the deadline by which to request

a hearing “to dispute the Immediate License Suspension.”

Meanwhile, on the same day, February 23, 2021,

the Governor modified Oregon’s county risk-level guidance,

which resulted in Lane County’s COVID-19 risk level drop-

ping to “High Risk.” Under a “High Risk” designation, indoor

dining is permitted, subject to OHA guidance. Indoor dining

would be allowed in Lane County beginning on February 26,

2021, because of the risk-level designation change.

On February 24, 2021, licensee’s counsel Mannix

sent a letter to OLCC, requesting reconsideration of the

order of immediate suspension.1 Licensee argued that,

given the risk-level change, licensee would be allowed to

have indoor dining in a matter of days, at which point the

threats of harm cited in OLCC’s order would “no longer

exist.” Licensee did not contest that it had allowed indoor

dining, but otherwise denied OLCC’s allegations, asserting

that it was compliant with all other COVID-19 restrictions

and intended to maintain compliance. Citing the irrepara-

ble harm that immediate suspension would cause, licensee’s

counsel stated, “I request a substantive response to this let-

ter no later than February 25, 2021, at 5:00 p.m. If I do not

receive a response, I will be requesting a hearing with the

OLCC and requesting an administrative stay of [OLCC’s]

1

Licensee also requested a stay. None of licensee’s stay requests are at issue

on appeal, so we do not discuss any stay arguments or stay rulings.

Cite as 325 Or App 326 (2023) 331

enforcement action.” The letter ended with a statement of

intent to file a lawsuit against OLCC.

On February 25, 2021, Case Presenter Schein of

OLCC’s Administrative Hearings Division sent an email to

Huddleston, a lawyer in Mannix’s office, confirming the sub-

stance of a recent telephone conversation. Schein confirmed

that, in light of the county’s move to “High Risk” and licens-

ee’s “efforts at compliance with masks and social distancing

requirements,” OLCC intended to issue an order the next

day ending licensee’s immediate suspension. Finally, Schein

reiterated that licensee would still be subject to being found

in violation and that OLCC was likely to send a violation

notice in the next few weeks:

“As mentioned, withdrawal of the immediate suspen-

sion is not instead of a violation. It is likely that your client

will receive such a notice in the next few weeks. However,

such notices are not immediate suspensions and will give

your client, yourself, and [OLCC] time to work out a resolu-

tion or to go to hearing prior to any further suspension time

being served.”

On February 26, 2021, Schein sent an email to

Mannix and Huddleston, attaching OLCC’s formal order

rescinding the order of immediate suspension.

Two weeks later, on March 9, 2021, OLCC issued

a notice of proposed license suspension. It served the notice

on licensee, licensee’s registered agent, and Mannix as

licensee’s attorney. Mannix was served by both regular mail

and email. OLCC alleged that from January 4, 2021, to

February 20, 2021, while Lane County was designated

“Extreme Risk,” licensee had violated EO 20-66, and

thus violated OAR 845-006-0345(15), by allowing indoor

on-premises consumption of food and/or drink, exceeding

maximum capacity, not enforcing mask requirements for

entertainers, and not placing plexiglass shields between

patrons and bar staff. OLCC alleged that licensee had also

violated OHA guidance created pursuant to EO 20-66 that

qualified as public health laws, and thus violated OAR 845-

006-0345(16), by the same conduct.

The notice advised licensee of its hearing rights,

including the deadline to request a hearing “to dispute the

332 JGB Enterprises, LLC v. OLCC

charge or the proposed license suspension.” The notice stated

that, if licensee wanted a hearing, it needed to sign and

date the enclosed “Request for Hearing” form and return

it “by 5:00 PM on April 8, 2021.” (Underscoring in original.)

The notice specified that, to be timely, the hearing request

had to be “postmarked on or before that date, if mailed, or

received by that exact time and date, if delivered in per-

son or by fax.” The notice explained that if licensee did not

request a hearing by the deadline, it “will have waived the

right to a contested case hearing,” and an order of default

would issue. Enclosed with the notice was a “Request for

Hearing” form, which included a box to check to “request

a hearing regarding the Commission’s Notice of Proposed

License Suspension, Civil Penalty, Cancellation or Letter of

Reprimand dated March 9, 2021.” The form reiterated, “In

order to obtain a hearing, this form must be RECEIVED

at the address or fax number below by 5:00 p.m. on April 8,

2021. In order for your request to be timely, it must be post-

marked on or before that date, if mailed, or received by

that exact date and time, if delivered in person or by fax.”

(Underscoring in original.)

On April 20, 2021, Schein sent an email to Mannix

regarding licensee, stating, “I recall that you represented

this licensee in connection with the Immediate Suspension

that we withdrew. However, we issued a charge letter in

this matter, and our records do not reflect receipt of a timely

hearing request. Please advise.”

On April 22, 2021, Mannix faxed a completed copy

of the “Request for Hearing” form to OLCC. He also faxed

a letter, identifying himself as licensee’s attorney (“[a]s you

are aware”) and “re-requesting” a hearing. Mannix asserted

that OLCC’s order of immediate suspension of February 23,

2021, which was rescinded on February 26, 2021, and

OLCC’s notice of proposed suspension of March 9, 2021,

involved “the exact same issues and legal bases”; that they

differed only in when they were issued relative to the lifting

of the prohibition on indoor dining; and that he had made

an “assumption” that his February 24 letter “would act as

a hearing request.” Mannix took the position that licensee

“has already requested a hearing.” He also cited OAR

137-003-0675(1), which allows a party 60 days to request

Cite as 325 Or App 326 (2023) 333

reconsideration of a final order in a contested case, stating

that “we believed that either the February 25 recission or

March 9 notice was a reconsideration order that started the

60-day clock over again. In effect, we are requesting recon-

sideration of the reconsideration, not a new hearing.”

Mannix summarized the “three factors” that he

believed justified allowing a hearing: (1) his “legal chal-

lenge” had not substantially changed since February 24,

2021; (2) licensee had already requested a hearing; and

(3) licensee was in the “reconsideration” phase and “now

subject to a 60-day window.” He added that it was “beyond

the reasonable control” of licensee that OLCC “did not deem

the February 24 letter a hearing request” and that it was

“impossible to view this as two separate proceedings.”

Finally, Mannix argued that HB 4212 (2020)

extended the time limitations “for the commencement of a

civil cause of action or the giving of notice of a civil claim

established by statute” during the COVID-19 state of emer-

gency. See Or Laws 2020, ch 12, § 7 (1st Spec Sess). Citing the

broad definitions of “civil action” and “claim” in Black’s Law

Dictionary, Mannix asserted that “a quasi-judicial process

meets this definition,” and therefore “HB 4212 suspended

the time limitations for this type of action until 90 days

after the Governor’s COVID-19 Executive Orders expire,”

such that “HB 4212 also justifies this late hearing request.”

Mannix concluded the letter by stating that it was

“well within the discretion of the OLCC” to grant the late

hearing request.

On May 6, 2021, OLCC issued an order denying

relief. OLCC made factual findings regarding the procedural

history of the case, including describing the correspondence

between OLCC and licensee, then stated its conclusions of

law. OLCC recognized that OAR 137-003-0528(1)(b) allows

it to accept a late hearing request if there is “good cause for

the failure to timely request the hearing”2 and that OAR

137-003-0501(7) defines “good cause” as existing “when an

2

OAR 137-003-0528(1)(b)(B) limits the time in which to make a late hearing

request, but that time limitation was met and is not at issue, so we do not discuss

it.

334 JGB Enterprises, LLC v. OLCC

action, delay, or failure to act arises from an excusable mis-

take, surprise, excusable neglect, reasonable reliance on the

statement of a party or agency relating to procedural require-

ments, or from fraud, misrepresentation, or other misconduct

of a party or agency participating in the proceeding.” OLCC

concluded that licensee had not shown good cause.

OLCC explained that, under OAR 845-003-0270

(1)(b), licensee had 30 days to request a hearing. It described

the information in the March 9 notice, particularly regard-

ing the need to request a hearing, the deadline to do so,

and the consequences of not doing so. OLCC concluded that

licensee’s argument that the February 24 letter acted as

a hearing request was “not well-taken,” as the letter did

not contain a hearing request. The letter’s only mention

of a hearing at all was a conditional statement by Mannix

that he would be requesting a hearing in the future (“will

be requesting”) if OLCC did not respond by the next day—

which OLCC did, such that the condition was never met.

OLCC further reasoned that, as of February 24, a notice of

proposed suspension had not yet been issued, so “there was

no matter for which a hearing could be requested.”

OLCC concluded that there was no evidence that

licensee’s failure to timely request a hearing was the result

of reasonable reliance on the statement of a party or agency

relating to procedural requirements, surprise, or excusable

neglect; nor was there fraud, misrepresentation, or other

misconduct of a party or agency participating in the pro-

ceeding. OLCC rejected licensee’s argument regarding HB

4212, concluding that HB 4212 did not apply and that dead-

lines in administrative hearings are governed by ORS chap-

ter 183 and OAR chapter 137. Ultimately, OLCC concluded

that licensee had not shown good cause for its late hearing

request and, on that basis, denied the request.

On May 10, 2021, Mannix faxed a letter to OLCC,

stating licensee’s intent to seek judicial review of the denial

of its late hearing request, and preemptively seeking recon-

sideration of the anticipated final order by default. The letter

focused almost entirely on a new argument that, under ORS

471.333(1) and ORS 471.732, OLCC cannot suspend a liquor

license based on a licensee’s violation of OHA guidance until

Cite as 325 Or App 326 (2023) 335

and unless OHA issues a final order concluding that the

licensee has violated OHA guidance. That argument was

couched in terms of ORS 183.417(4), which requires OLCC

to make a prima facie case for any violation found in a final

order by default.

On May 17, 2021, OLCC issued a final order by default

suspending licensee’s license for 38 days, based on two inde-

pendent violations. The first was that licensee violated EO

20-66, and thus violated OAR 845-006-0345(15), by allow-

ing indoor consumption of food and/or drink and not enforc-

ing mask requirements for entertainers from January 4,

2021 to February 20, 2021. The second was that licensee

violated OHA guidance created pursuant to EO 20-66, and

thus violated OAR 845-006-0345(16), by the same conduct.

As to both violations, the other portions of the charges—

regarding exceeding maximum capacity and not placing

plexiglass shields between patrons and bar staff—were

deemed “not established.”

On May 18, 2021, licensee requested reconsider-

ation of the final order by default, reiterating its argument

based on ORS 471.333(1) and ORS 471.732. OLCC denied

reconsideration on May 21, 2021. OLCC stated that it was

“not convinced” that licensee could raise such an issue in

a request for reconsideration, where no hearing had taken

place, but nevertheless considered and rejected the argu-

ment on the merits.

Licensee seeks judicial review under ORS 183.482.

II. DENIAL OF UNTIMELY HEARING REQUEST

Licensee’s first assignment of error is directed to

OLCC’s order of May 6, 2021, denying licensee’s late request

for a hearing on OLCC’s proposed suspension of licensee’s

liquor license. Licensee argues that OLCC abused its dis-

cretion by denying the late hearing request. See El Rio

Nilo, LLC v. OLCC, 240 Or App 362, 369-70, 246 P3d 508

(2011) (reviewing OLCC’s decision to deny a late hearing

request under OAR 137-003-0528 for abuse of discretion).3

3

To the extent that licensee suggests that other standards of review might

apply in addition to abuse of discretion, we conclude that abuse of discretion is the

correct standard.

336 JGB Enterprises, LLC v. OLCC

Alternatively, licensee argues that OLCC at least needed to

hold a “good cause” hearing before denying the request.

Under OAR 845-003-0270(1)(b) and OAR 845-003-

0220(2)(b), a party may contest a proposed OLCC sanc-

tion by requesting a hearing within 30 days after service

of notice of the proposed sanction. OLCC may grant a late

request for a hearing only if the requesting party shows

that “[t]here was good cause for the failure to timely request

the hearing.” OAR 137-003-0528(1)(b)(A). If the requesting

party relies on facts to explain why its request was late,

and OLCC or another party disputes those facts, then the

requesting party is entitled to a “good cause” hearing before

OLCC rules. OAR 137-003-0528(3) (“If the agency or another

party disputes the facts contained in the explanation of why

the request for hearing is late, the agency will provide a

right to a hearing on the reasons why the hearing request

is late. The administrative law judge will issue a proposed

order recommending that the agency grant or deny the late

hearing request.”).

Licensee makes four distinct arguments regarding

the denial of its late hearing request. First, licensee argues

that OLCC abused its discretion by denying the request,

because licensee established good cause for being late.

Second, licensee argues that its hearing request was not

actually late because the 60-day reconsideration window in

OAR 137-003-0675(1) applied. Third, licensee argues that

its hearing request was not late because HB 4212 extended

the deadline for requesting a hearing until 90 days after the

end of the COVID-19 state of emergency. Fourth, licensee

argues that, at a minimum, OLCC was required to hold a

“good cause” hearing before denying the request, because

there were disputed factual issues.

A. “Good Cause” Determination

OLCC determined that licensee had not established

good cause for its hearing request being late and, on that

basis, denied the request. On review, licensee argues that

it established good cause under the applicable standard,

such that it was an abuse of discretion to deny the late hear-

ing request. In response, OLCC contends that licensee’s

Cite as 325 Or App 326 (2023) 337

argument is unpreserved and, in any event, fails on the

merits.

“Generally, we will not consider an argument on

appeal that has not been raised in the trial court.” State v.

Walsh, 288 Or App 278, 282, 406 P3d 123 (2017), rev den,

362 Or 545, cert den, ___ US ___, 139 S Ct 158 (2018); see

ORAP 5.45(1) (“No matter claimed as error will be consid-

ered on appeal unless the claim of error was preserved in

the lower court.”). The same preservation principles apply

to judicial review of agency decisions. Wahlgren v. DMV, 196

Or App 452, 457, 102 P3d 761 (2004).

In this case, the predominant theme of licensee’s

letter to OLCC in support of its late hearing request was

that the request was not late, either because licensee had

already made a timely request or because the deadline had

not really passed. Licensee never mentioned “good cause,”

although it indirectly invoked an older version of the rule on

late hearing requests that was no longer in effect. See OAR

137-003-0528(1)(a)(A) (2011) (providing that an agency may

accept a late hearing request only if the cause for failing to

timely request a hearing was “beyond the reasonable control

of the party”). Licensee also did not mention the definition

of “good cause” in OAR 137-003-0501(7) or tie its arguments

to it. Nonetheless, OLCC ruled on good cause, concluding

that it had not been established. In context, it appears that

OLCC may have understood that, even though licensee did

not admit to any neglect, it was at least implicitly arguing

that any neglect was excusable, based on the February 24

letter.

Under the circumstances, if licensee was contend-

ing that it established excusable neglect, based on the

February 24 letter, and thus good cause, we would con-

sider that issue adequately preserved for review. But that

is not licensee’s argument.4 Instead, licensee cites various

4

In its opening brief, licensee briefly suggests that OLCC should have

treated the February 24 letter as an “early hearing request,” citing Duffour. See

Duffour v. Portland Community College, 283 Or App 680, 687-88, 389 P3d 1162

(2017) (holding that a workers’ compensation claimant had adequately raised the

issue of attorney fees and a certain penalty, where he filed a premature hearing

request that raised those issues, then filed a timely hearing request that did

not re-raise them but requested consolidation, and the board consolidated the

338 JGB Enterprises, LLC v. OLCC

“circumstances” that, in its view, add up to good cause: that

OLCC “knew” that licensee disputed OLCC’s authority; that

it was obvious from the correspondence that licensee “had

every intent to request a hearing”; that the March 9 notice

was served on Mannix but not Huddleston; that OLCC was

“not blindsided” by the late request; that OLCC knew that

licensee was represented by counsel; that OLCC “inexpli-

cably viewed one proceeding as two separate proceedings”;

and that OLCC’s proceedings were “unfair” for the reasons

laid out in the April 22 letter.

That argument is unpreserved—both its parts and

its whole. We disagree with licensee that the “abuse of dis-

cretion” standard of review means that we must consider

“the proceedings in total,” including any circumstances

discernible from the record, regardless of whether they

were cited in licensee’s late hearing request. Relatedly, we

disagree that OLCC was required to consider any circum-

stances of which OLCC was “aware,” regardless of whether

licensee cited them in its late hearing request. That is not

how the standard of review applies. See, e.g., El Rio Nilo,

LLC, 240 Or App at 370 (considering only circumstances

argued by the licensee or considered by OLCC in conclud-

ing that OLCC did not abuse its direction by denying a late

hearing request).

In addition to being unpreserved, the “good cause”

argument that licensee makes on judicial review fails on

the merits. As OLCC points out, licensee’s argument is

untethered to the definition of “good cause” in OAR 137-

003-0501(7), which required licensee to establish that its

failure to timely request a hearing arose “from an excus-

able mistake, surprise, excusable neglect, reasonable reli-

ance on the statement of a party or agency relating to pro-

cedural requirements, or from fraud, misrepresentation, or

other misconduct of a party or agency participating in the

proceeding.”

two requests). We reject that argument, to the extent that licensee is making

it, both because it is undeveloped and because we agree with OLCC that the

February 24 letter simply cannot be read as a hearing request, premature or

otherwise. Licensee’s only hearing request was the late request that it submitted

on April 22.

Cite as 325 Or App 326 (2023) 339

Moreover, OLCC having general knowledge that a

party is represented and is likely to oppose OLCC actions

does not excuse a party from making hearing requests as

required by the applicable rules. The February 23 order of

immediate suspension and the March 9 notice of proposed

suspension were separate OLCC actions, and licensee could

have requested a hearing on neither, one, or both. It is irrel-

evant whether the two actions might be characterized as

part of one “proceeding,” because no rule allows a party to

make one hearing request for an entire “proceeding”—and,

in any event, no hearing requests were made in this proceed-

ing (except the late one). Lastly, licensee suggests that, in

addition to serving the March 9 notice on Mannix as licens-

ee’s attorney, OLCC should have also served Huddleston.

However, it is undisputed that Mannix represented licensee,

as Mannix plainly stated in his letters to OLCC, and there

is no record (nor does licensee assert) that anyone ever

requested that Huddleston be treated as a second attorney

of record or that he be copied on OLCC communications.

Mannix himself did not copy Huddleston on his communica-

tions with OLCC regarding licensee.

Accordingly, we reject licensee’s argument that it

established good cause, as relevant to whether OLCC abused

its discretion in denying the late hearing request.

B. “Reconsideration Window” Argument

Licensee next argues that its hearing request was

not actually late because licensee was within the “ ‘recon-

sideration’ window” of OAR 137-003-0675(1), which allows a

party 60 days to request reconsideration of a final order in a

contested case.

According to licensee, OLCC issued an order of

immediate suspension on February 23; reconsidered that

order when it issued a rescission order on February 26; and

then “reconsidered its withdrawal of the termination order”

when it issued the notice of proposed suspension on March 9.

Licensee contends that “everything the OLCC did [after

February 26] was a reconsideration of its ‘Order Rescinding

Immediate License Suspension.’ ” From that premise,

licensee argues that its April 22 hearing request should be

understood as a request for a “re-hearing” on the February 26

340 JGB Enterprises, LLC v. OLCC

rescission order (which was a final order), rather than a

hearing on the March 9 notice of proposed suspension.

We disagree with licensee’s characterization of

OLCC’s actions. OLCC did not reconsider anything in its

March 9 notice. It simply initiated regular proceedings for

alleged OLCC rule violations. The March 9 notice was a

“charging document” under OAR 845-003-0220(2)(b), i.e.,

a written notice that OLCC would “seek a sanction” for “a

violation or failure to comply with * * * OAR Chapter 845.” It

notified licensee that OLCC would seek a 38-day suspension

of licensee’s license for violations of OAR 845-006-0345(15)

and (16). As correctly stated in the notice, licensee had 30

days to request a hearing on that notice. See OAR 845-

003-0270(1)(b) (providing that, as to a charging document

defined in OAR 845-003-0220(2)(b), a party has 30 days

from service to request a hearing, subject to certain excep-

tions). OAR 137-003-0675(1) is inapposite.

Moreover, licensee’s completed hearing request form

of April 22 plainly states that licensee is requesting a hear-

ing on OLCC’s “Notice of Proposed License Suspension, Civil

Penalty, Cancellation or Letter of Reprimand dated March 9,

2021.”

OLCC correctly applied the 30-day deadline to

request a hearing in OAR 845-003-0270(1)(b), rather than

the 60-day deadline to request reconsideration or rehearing

on a final order in OAR 137-003-0675(1).

C. HB 4212 Argument

Licensee next argues that HB 4212 extended the

deadline to request a contested case hearing in an agency

proceeding. Licensee’s briefing contains only three sen-

tences of argument on this issue, one of which directs us

to licensee’s April 22 letter to OLCC. Opening briefs are

subject to word limits. ORAP 5.05(1)(b)(ii)(A). For that and

other reasons, a party must present its arguments in the

opening brief and cannot rely on incorporation by reference.

See Sherwood Park Business Center, LLC v. Taggart, 261 Or

App 609, 626 n 13, 323 P3d 551, rev den, 355 Or 879 (2014)

(describing it as “inappropriate” for the appellant to “incor-

porate by reference” a legal argument set forth in a document

Cite as 325 Or App 326 (2023) 341

in the record, because allowing such incorporation by refer-

ence “would effectively permit the brief to circumvent the

requirements of the [word-limit] rule”). Even if we were to

look to the April 22 letter, however, licensee’s arguments are

minimally developed and unavailing as presented. See Beall

Transport Equipment Co. v. Southern Pacific, 186 Or App

696, 700 n 2, 64 P3d 1193, adh’d to as clarified on recons,

187 Or App 472, 68 P3d 259 (2003) (regarding undeveloped

arguments).

In June 2020, HB 4212 was enacted as one legis-

lative response to the COVID-19 pandemic. Or Laws 2020,

ch 12, § 49 (1st Spec Sess). It was intended to ensure that

our state court system would continue to be accessible

during the pandemic and to protect legal rights and enforce

responsibility while also responding appropriately to health

and safety needs. Testimony, Joint Committee on the First

Special Session of 2020, HB 4212, June 25, 2020 (state-

ment of Eric Foster, Oregon State Bar Board of Governors

Public Affairs Committee) (Foster Testimony). As relevant

here, section 7 extends the deadline to commence a “civil

action” or give notice of a “civil claim established by statute”

until 90 days after the COVID-19 state of emergency ends.

Or Laws 2020, ch 12, § 7(1), (2). Section 7 was intended to

“[t]oll the statute of limitations as necessary during the state

of emergency and to address court closures and difficulties

filing.” Foster Testimony.

Nothing in the text, context, or legislative his-

tory appears to support the view that HB 4212 applies to

administrative agency proceedings generally, or deadlines

to request hearings on proposed sanctions specifically.

Licensee’s argument that HB 4212 applies is based entirely

on the broad definitions of “civil action” and “claim” in Black’s

Law Dictionary. It does not grapple with the text, context, or

legislative history of HB 4212. We reject license’s argument

regarding HB 4212 without further discussion.

D. Lack of a “Good Cause” Hearing

Licensee’s last argument regarding the denial of its

late hearing request is that, at a minimum, OLCC needed to

hold a “good cause” hearing before ruling. In its opening brief,

342 JGB Enterprises, LLC v. OLCC

licensee argues that a “good cause” hearing was required

because licensee raised “factual issues” with which OLCC

“disagreed,” specifically (1) whether the February 24 let-

ter “should have been seen as a hearing request,” and

(2) whether “the matter was now in the ‘reconsideration’

window” under OAR 137-003-0675(1).

Under OAR 137-003-0528(3), a party who has made

a late hearing request is entitled to a “good cause” hear-

ing before OLCC rules on its request, but only if OLCC or

another party disputes facts on which the requesting party

is relying to establish good cause. OAR 137-003-0528(3) (“If

the agency or another party disputes the facts contained in

the explanation of why the request for hearing is late, the

agency will provide a right to a hearing on the reasons why

the hearing request is late. The administrative law judge

will issue a proposed order recommending that the agency

grant or deny the late hearing request.”). Whether a “good

cause” hearing was required under OAR 137-003-0528(3) is

a question of law. Hendrickson Trucking, Inc. v. ODOT, 270

Or App 633, 634, 349 P3d 585 (2015).

A “good cause” hearing was not required here. The

two issues identified by licensee were not “factual issues,” or

at least licensee has not explained how they were. Whether

the February 24 letter “should have been seen as a hear-

ing request” on the March 9 notice is a legal question. The

February 24 letter either did or did not qualify as a hearing

request. In concluding that it did not, OLCC did not dispute

any “facts” that licensee asserted in its late hearing request.

Similarly, whether “the matter was now in the ‘reconsider-

ation’ window” under OAR 137-003-0675(1)—i.e., whether

the deadline for licensee’s hearing request was governed by

OAR 845-003-0270(1)(b) or OAR 137-003-0675(1)—was not

a factual issue but a legal one.

In its reply brief, licensee shifts its argument,

asserting that it is really arguing that a “good cause” hear-

ing was required because OLCC made factual findings in its

May 6 order that licensee disagrees with. We also reject that

argument.

Under OAR 137-003-0528(3), the issue is whether

OLCC disputed facts on which licensee relied for its late

Cite as 325 Or App 326 (2023) 343

hearing request, not whether licensee disagrees with facts

that OLCC found. Licensee identifies five factual findings in

the May 6 order that it “disputes.” First, licensee disputes two

findings that treat service on Mannix as service on “licens-

ee’s attorney,” but no “good cause” hearing was required on

that issue, because licensee never contested service in its

late hearing request. Next, licensee disputes a finding that

“Licensee did not request a hearing by the hearing request

deadline specified in the Notice,” but, as previously dis-

cussed, the dispute there goes to OLCC’s underlying legal

conclusion (that the February 24 letter did not constitute a

hearing request), not a factual issue. Finally, licensee dis-

putes two findings that simply quote from licensee’s April 22

letter, but licensee does not explain, and we cannot discern,

what it disputes about them. In sum, licensee has not iden-

tified any factual dispute of the type that would trigger the

need for a “good cause” hearing under OAR 137-003-0528(3).

Having addressed each of licensee’s four arguments

regarding the denial of its late hearing request, we reject

licensee’s first assignment of error.

III. CHALLENGE TO PRIMA FACIE CASE

Licensee’s second assignment of error is directed to

OLCC’s final order by default of May 17, 2021, suspending

licensee’s liquor license. Licensee argues that OLCC failed

“to comply with ORS 471.333(3) to establish a prima facie

case under ORS 183.417(4).” Licensee first made that argu-

ment in its May 10 letter preemptively requesting reconsid-

eration of the anticipated default order, and then made it

again in its May 18 request for reconsideration of the actual

default order.

Under ORS 183.417(4), “[a]n order adverse to a

party may be issued upon default only if a prima facie case

is made on the record.” To meet that requirement, “[t]he

agency must find that the record, including all materials

submitted by the party, contains evidence that persuades

the agency of the existence of facts necessary to support

the order.” OAR 137-003-0075(3). In this case, as previously

described, OLCC found that the record supported some, but

not all, of the allegations in the March 9 notice and only

344 JGB Enterprises, LLC v. OLCC

found violations based on the allegations that it deemed to

be supported.

Licensee argues that OLCC erred in concluding

that a prima facie case was made. In licensee’s view, ORS

471.333(3), which limits OLCC’s authority to suspend a

liquor license for “maintaining an insanitary establish-

ment,” applies in any situation in which OLCC is relying on

a factual violation of OHA regulations to suspend a license.

Licensee argues that ORS 471.333(3) therefore applied here,

and OLCC did not comply with it, leading to the failure to

make a prima facie case.

A. Preservation

We begin with the issue of preservation. The parties

take starkly different positions on preservation. Licensee

argues that, given the nature of a default order, a party

adversely affected by a default order has no practical means

to challenge it and, consequently, preservation should be

excused. Otherwise, according to licensee, the prima facie

case requirement in ORS 183.417(4) would be meaningless,

as judicial review is necessary to enforce it. Alternatively,

licensee argues that it adequately preserved the issue by

raising it in its May 10 and May 18 letters seeking recon-

sideration. Alternatively, licensee argues very briefly in its

reply brief that ORS 471.333(3) is a jurisdictional issue that

may be raised at any time.

For its part, OLCC asserts that preservation is not

excused and that licensee failed to preserve its claim of

error. Essentially, OLCC argues that licensee lost the right

to challenge the substance of the final order by default when

licensee failed to request a hearing on the proposed suspen-

sion. OLCC takes the view that licensee needed to request

a hearing and then argue ORS 471.333(3) to obtain judicial

review on that issue.

Although neither party has raised it, there is also

a third possibility, which is that, absent a hearing, the peti-

tioner may challenge whether a prima facie case was made

but is limited to plain-error review. See, e.g., Stewart v. Board

of Parole, 312 Or App 32, 35, 492 P3d 1283 (2021) (“Even if

we were to conclude that the exhaustion requirement should

Cite as 325 Or App 326 (2023) 345

be relaxed * * *, such that only preservation-of-error princi-

ples were in play, neither of the first two assigned errors is

‘obvious and not reasonably in dispute’ so as to qualify as

plain error.”); see generally State v. Vanornum, 354 Or 614,

629-30, 317 P3d 889 (2013) (describing discretionary plain-

error review).

The preservation issue on the second assignment of

error is a complex one. The parties have not identified any

case law on point, nor have we found any. For trial court

litigation, a specific statute addresses appeals from default

judgments, limiting them to narrow circumstances. See ORS

19.245(2) (allowing a claimant to appeal a default judgment

“if the judgment is not in accord with the relief demanded

in the complaint,” and allowing a defendant to appeal “if

the trial court has entered a default judgment against the

defendant as a sanction or has denied a motion to set aside

a default order or judgment” or if the judgment is void). The

parties have not identified any comparable provision rele-

vant to final orders by administrative agencies.

Instead, licensee makes a practical argument that

verges on a policy argument: Licensee contends that the

prima facie case requirement in ORS 183.417(4) would be

meaningless without judicial review. But it could equally be

said that the requirement to request a hearing to contest

a proposed administrative sanction would be meaningless

if a party could forgo a hearing and nonetheless challenge

the substance of the final order on judicial review. Each

approach is both appealing and problematic in its own

ways. For that reason, whether a party can challenge the

substance of a final order by default in an administrative

proceeding, without having timely requested a hearing,

seems more like a legislative policy question than an issue

of appellate preservation.

Licensee also argues that this is a jurisdictional

issue, such that it can be raised at any time. See, e.g.,

Kleikamp v. Board of Commissioners of Yamhill County, 301

Or App 275, 281, 455 P3d 546 (2019) (“A lack of subject mat-

ter jurisdiction can be raised at any time.”). We disagree.

ORS 471.333(3) is directive in nature, not jurisdictional, so

a failure to properly apply ORS 471.333(3) would be legal

346 JGB Enterprises, LLC v. OLCC

error, but it would not create a jurisdictional problem. See

Weatherspoon v. Allstate Ins. Co., 193 Or App 330, 336-37,

89 P3d 1277, rev den, 337 Or 327 (2004) (“[A] court’s errone-

ous exercise of statutory authority does not always equate

with an absence of jurisdiction * * *. Rather, jurisdiction in

such cases will depend on whether the statute or rule gov-

erning the exercise of authority is directory or jurisdictional

in nature.”).

Beyond that, we are reluctant to address such a

significant issue without meaningful briefing, particu-

larly when it is unclear that the issue is really preserva-

tion, rather than reviewability. Because we ultimately dis-

agree with licensee on the merits in any event, we decline to

resolve the “preservation” issue and instead proceed to the

merits, assuming without deciding that the issue is properly

before us.

B. Merits

On the merits, we must determine whether OLCC

“erroneously interpreted a provision of law” and whether “a

correct interpretation compels a particular action” in this

case. ORS 183.482(8)(a).

One of the functions, duties, and powers of OLCC is

“[t]o grant, refuse, suspend or cancel licenses and permits for

the sale or manufacture of alcoholic liquor.” ORS 471.730(2).

Another is “[t]o adopt such regulations as are necessary and

feasible for carrying out the provisions of [chapter 471] and

ORS 474.105 and 474.115.” ORS 471.730(5). Once adopted,

OLCC regulations “have the full force and effect of law.” Id.

Under ORS 471.315, OLCC “may cancel, suspend,

restrict or require mandatory training for any license issued

under [chapter 471], or impose a civil penalty in lieu of or

in addition to a suspension as provided by ORS 471.322,”

if OLCC “finds or has reasonable ground to believe” that

any one of 12 circumstances exist, as delineated in ORS

471.315(1)(a) to (c). One of those circumstances is that the

licensee “[h]as violated any provision of [chapter 471] or ORS

474.115 or any rule of [OLCC] adopted pursuant thereto.”

ORS 471.315(1)(a)(A). Another is that the licensee has

“maintained an insanitary establishment.” ORS 471.315

Cite as 325 Or App 326 (2023) 347

(1)(a)(D). Others include, for example, a licensee having made

false representations to OLCC, not meeting bond and insur-

ance requirements, being insolvent, being unable to manage

the establishment, selling alcohol to minors, and serving

alcohol to visibly intoxicated people. ORS 471.315(1)(a)(B),

(C), (E), (G), and (H). There is also a thirteenth catch-all

circumstance that applies when “there is any other reason

that, in the opinion of [OLCC], based on public convenience

or necessity, warrants canceling or suspending a license.”

ORS 471.315(1)(d).

With respect to OLCC’s authority to suspend a

liquor license based on the licensee having “maintained an

insanitary establishment,” ORS 471.315(1)(a)(D), the legis-

lature has placed a limitation on OLCC’s authority. ORS

471.333 provides:

“(1) Except as provided in subsections (2) and (3) of

this section, the Oregon Liquor and Cannabis Commission

shall not refuse to issue, cancel or suspend a license under

ORS 471.313, 471.315 or 471.425 for maintaining an insan-

itary establishment.

“(2) The commission may refuse to issue, cancel or sus-

pend a license under ORS 471.313, 471.315 or 471.425 for

maintaining an insanitary establishment in violation of a

city ordinance relating to sanitation only if the licensee is

convicted of violating the ordinance.

“(3) The commission may refuse to issue, cancel or sus-

pend a license under ORS 471.313, 471.315 or 471.425 for

maintaining an insanitary establishment in violation of ORS

447.010 to 447.156 and 447.992 or the laws, orders or rules

relating to public health of the Oregon Health Authority or

the State Department of Agriculture only when the agency

charged with enforcing those laws, orders or rules finds

that the licensee is in violation of them and renders a final

order adverse to the licensee.”

(Emphases added.)

Thus, under ORS 471.333, OLCC can suspend a

licensee’s liquor license for “maintaining an insanitary

establishment” only if one of four factual scenarios exists:

(1) the licensee has been convicted of violating a city ordi-

nance relating to sanitation; (2) the licensee has been found

348 JGB Enterprises, LLC v. OLCC

in a final order by “the agency charged with enforc[ement]”

to have violated ORS 447.010 to 447.156 and ORS 447.992,

regarding plumbing and architectural barriers;5 (3) the

licensee has been found in a final order by “the agency

charged with enforc[ement]” to have violated the laws, orders

or rules relating to public health of OHA; or (4) the licensee

has been found in a final order by “the agency charged

with enforc[ement]” to have violated the laws, orders or

rules relating to public health of the Oregon Department of

Agriculture (ODA).

In this case, in its final order by default of May 17,

2021, OLCC found licensee to have violated OAR 845-006-

0345(15) and OAR 845-006-0345(16).

OAR 845-006-0345(15) is an OLCC rule that pro-

hibits licensees from engaging in activities relating to alco-

hol that violate “an order issued by the Governor”:

“No licensee or permittee will engage in or permit any

activity relating to the manufacture, possession, sale, pur-

chase, transportation, importation or delivery of alcoholic

liquor that violates an order issued by the Governor. A

licensee’s or permittee’s failure to follow this rule creates

an immediate and serious danger to the health and safety

of all patrons and employees on the premises. Violation of

this section is a Category II violation.”

OLCC found licensee to have violated EO 20-66, an order

issued by the Governor, by allowing indoor dining and not

requiring entertainers to wear masks. Specifically, OLCC

found licensee to have violated EO 20-66 paragraphs 2(a),

(b), and (c) and (4)(c). EO 20-66(2)(a) provides that the

Governor will approve the mandated OHA guidance before

its issuance and that, upon approval, the OHA guidance will

become part of the directives of EO 20-66. EO 20-66(2)(b)

provides that, once approved, the OHA guidance issued to

implement EO 20-66 is enforceable “to the same extent” as

EO 20-66 is enforceable. EO 20-66(2)(c) directs businesses

and others to comply with OHA guidance issued under the

authority of EO 20-66. And EO 20-66(4)(c) requires business

5

ORS 447.010 to 447.156 address plumbing and architectural barriers. ORS

447.992 authorizes the State Plumbing Board to impose civil penalties for viola-

tions of ORS 447.010 to 447.156 and rules adopted thereto.

Cite as 325 Or App 326 (2023) 349

and others to “be aware of the Risk Level in the counties

where they operate and comply with the requirements appli-

cable to those Risk Levels established in OHA guidance.”

OAR 845-006-0345(16) is an OLCC rule, applicable

only during “a state of emergency declared by the Governor,”

that prohibits licensees from engaging in activities relating

to alcohol that violate “a public health law, as defined in

ORS 431A.005, that is created pursuant to an order issued

by the Governor”:

“No licensee or permittee will engage in or permit any

activity relating to the manufacture, possession, sale, pur-

chase, transportation, importation or delivery of alcoholic

liquor that violates a public health law, as defined in ORS

431A.005, that is created pursuant to an order issued by

the Governor. This rule only applies to activity that occurs

during a state of emergency declared by the Governor. A

licensee’s or permittee’s failure to follow this rule creates

an immediate and serious danger to the health and safety

of all patrons and employees on the premises. Violation of

this section is a Category II violation.”

OLCC found licensee to have violated OHA guidance cre-

ated pursuant to EO 20-66—which OLCC concluded (and

no one disputes) are public health laws as defined in ORS

431A.005 that were created pursuant to an order issued by

the Governor—by allowing indoor dining and not requir-

ing entertainers to wear masks. Specifically, OLCC found

licensee to have violated OHA Sector Guidance for Eating

and Drinking Establishments; OHA Statewide Reopening

Guidance—Masks, Face Coverings, Face Shields; OHA

Sector Risk Level Guidance Chart; OHA Sector Guidance

for Indoor Entertainment Establishments; and/or OHA

Sector Guidance—General Guidance for Employers.

The primary dispute between the parties, as rel-

evant to the merits of the second assignment of error, is

whether OLCC suspended licensee’s liquor license for

“maintaining an insanitary establishment,” such that ORS

471.333 applies. Licensee contends that OLCC did, while

OLCC maintains that it did not. To the extent that that dis-

pute turns on matters of statutory construction, we seek to

ascertain the enacting legislature’s intent by examining the

disputed provision’s text and context, as well as any helpful

350 JGB Enterprises, LLC v. OLCC

legislative history of which we are aware. State v. Gaines,

346 Or 160, 171-73, 206 P3d 1042 (2009). Text and context

“must be given primary weight in the analysis,” as only the

text “receives the consideration and approval of a majority

of the members of the legislature.” Id. at 171. The parties

agree that the construction of ORS 471.333(3) is a matter of

first impression.

As a preliminary matter, we note that we do not

necessarily agree with licensee’s presumption that, if ORS

471.333(3) applies, then OLCC itself could not find licensee

in violation of EO 20-66 or OHA guidance created under

EO 20-66, because ORS 471.333(2) requires “the agency

charged with enforcing” the “laws, orders or rules relating

to public health of the Oregon Health Authority” to make

that finding. It is not clear that OHA is the sole “agency

charged with enforcing” OHA guidance created pursuant to

EO 20-66. EO 20-66(2)(a) provides that the mandated OHA

guidance must be approved by the Governor, at which point

it becomes part of EO 20-66, and EO 20-66(10)(c) expressly

directs “other state agencies with regulatory enforcement

authority,” including OLCC (which is named), “to continue

their efforts to protect the lives and health of Oregonians,

under existing civil and administrative authorities, the

directives in [EO 20-66], the Risk Level Metrics, and any

guidance issued by OHA or other state agencies to imple-

ment [EO 20-66].” Given the terms of EO 20-66, we are not

convinced that OHA is the sole agency charged with enforc-

ing OHA guidance created under EO 20-66. We need not

conclusively address that issue, however, because we are

persuaded that ORS 471.333 does not apply here.

ORS 471.333(1) provides that OLCC “shall not

refuse to issue, cancel or suspend a license under ORS

471.313, 471.315 or 471.425 for maintaining an insanitary

establishment,” except as provided in ORS 471.333(2) and (3).

Each of the three statutes cited in ORS 471.333(1)—that is,

ORS 471.313, ORS 471.315, and ORS 471.425—contain a

specific provision regarding an “insanitary establishment.”

ORS 471.313 lists 14 bases on which OLCC may refuse to

issue a license or issue a restricted license, one of which

is if the applicant “[h]as maintained an insanitary estab-

lishment.” ORS 417.313(4)(e). ORS 471.315 lists 13 bases on

Cite as 325 Or App 326 (2023) 351

which OLCC may cancel, suspend, restrict, or require man-

datory training for an existing license, one of which is if the

licensee “[h]as maintained an insanitary establishment.”

ORS 471.315(1)(a)(D). ORS 471.425 prohibits various types

of conduct, including the maintenance of a “noisy, lewd, dis-

orderly or insanitary establishment” by an OLCC licensee.

ORS 471.425(2).

Given its text and context, we understand ORS

471.333(1) to limit OLCC’s authority to do any of three spe-

cific things: (1) refuse to issue a license or issue a restricted

license because the applicant “[h]as maintained an insani-

tary establishment,” ORS 471.313(4)(e); (2) cancel, suspend,

restrict, or require mandatory training for an existing

license because the licensee “[h]as maintained an insani-

tary establishment,” ORS 471.315(1)(a)(D); or (3) refuse to

issue, cancel, or suspend a license for violating the statutory

prohibition on maintaining an “insanitary establishment,”

ORS 471.425(2).

OLCC did not do any of those things. OLCC did not

allege in the March 9 charging document that licensee had

maintained an insanitary establishment. In the May 17

order by default, OLCC made no mention of licensee main-

taining an insanitary establishment. The stated bases

for the 38-day suspension are that licensee violated OAR

845-006-0345(15) and (16), not that licensee maintained an

insanitary establishment.

ORS 471.315(1)(a)(A) authorizes OLCC to suspend a

liquor license if it finds that the licensee violated any OLCC

rule adopted pursuant to ORS chapter 471. Licensee does

not contest, and it would be difficult to dispute, that OLCC

adopted OAR 845-006-0345(15) and (16) pursuant to chap-

ter 471. As stated in ORS 471.030(1)(c), a purpose of the

Liquor Control Act is “[t]o protect the safety, welfare, health,

peace and morals of the people of the state.” To carry out and

effectuate the purposes of the act, OLCC has been granted

certain powers and duties, ORS 471.040(1), including the

authority to adopt regulations regarding the sale of alco-

holic liquors, ORS 471.730. OLCC necessarily adopted OAR

845-006-0345(15) and (16) pursuant to ORS chapter 471, as

that is the source of OLCC’s authority to adopt regulations.

352 JGB Enterprises, LLC v. OLCC

Nonetheless, licensee argues that ORS 471.333 applies

because the unspoken substance of OLCC’s suspension order

was that licensee maintained an insanitary establishment.

The premise of licensee’s argument is that all OHA regulations

relating to public health—including indoor dining restric-

tions and mask requirements adopted for the COVID-19

state of emergency—pertain to sanitation. That is, in licens-

ee’s view, anytime that a licensee violates an OHA regula-

tion relating to public health, the licensee is necessarily and

automatically maintaining an insanitary establishment, and

so it should follow that ORS 471.333 applies to any OLCC

action that involves a licensee violating an OHA regulation.

By logical extension, the same principle would apply to all

ODA regulations relating to public health.

OHA has broad authority, including “direct super-

vision of all matters relating to the preservation of life and

health of the people of this state.” ORS 431.110(1). OHA has

promulgated a vast array of rules relating to public health,

many of which do not pertain to sanitation as that term is

commonly used. See OAR chapter 333 (containing hundreds

of OHA rules). At the same time, licensee may be correct that

“insanitary” has a broad enough meaning to capture all pub-

lic health regulations, even if some—such as indoor-dining

restrictions and mask requirements—are not what immedi-

ately come to mind as “sanitation.” See Webster’s Third New

Int’l Dictionary 1168 (unabridged ed 2002) (“insanitary”

means “deficient in sanitation : unclean to such a degree as

to be injurious to health : contaminated, filthy, unhealthy”);

see also id. at 2012 (one meaning of “sanitation” is “the appli-

cation of measures to make environmental conditions favor-

able to health”).6

6

In advocating for a broad meaning of “insanitary,” licensee also points to

ORS 471.732. ORS 471.732(1) contains a legislative finding and declaration “that

the regulation of health and sanitation matters in premises licensed by [OLCC]

under [chapter 471] can best be performed by [OHA] and [ODA].” ORS 471.732(2)

states that it “is the policy of the Legislative Assembly and the intent of ORS

471.333 and 624.010 and this section that premises licensed by [OLCC] under

this chapter shall be subject to the laws governing health and sanitation matters,

including any applicable licensing requirements, and to the rules adopted there-

under by the authority and the department.” We reserve opinion on the signifi-

cance of ORS 471.732, noting only that it seems to distinguish between “health”

and “sanitation” and that OLCC having a role in enforcing public health protec-

tions does not necessarily conflict with OHA and ODA being best positioned to

regulate health and sanitation.

Cite as 325 Or App 326 (2023) 353

Even if licensee is correct about the meaning of

the word “insanitary,” however, such that anyone who vio-

lates an OHA public health regulation is also maintaining

an insanitary establishment, there is still a fundamental

problem with licensee’s argument. The problem is that ORS

471.315(1)(a)(A) expressly authorizes OLCC to suspend a

license if it finds that the licensee violated an OLCC rule.

Here, OLCC suspended licensee’s license for violating two

OLCC rules, not for maintaining an insanitary establish-

ment. Violating an OLCC rule (ORS 471.315(1)(a)(A)) and

maintaining an insanitary establishment (ORS 471.315

(1)(a)(D)) are two separate and distinct bases for suspension

In arguing that ORS 471.333 nonetheless applied

to limit OLCC’s suspension authority, licensee is in a way

indirectly challenging the validity of OAR 845-006-0345(15)

and (16). But licensee has not actually challenged the valid-

ity of those rules.7 They are presumptively valid, and we do

not see why OLCC could not suspend licensee’s license based

on licensee violating OLCC’s own rules, under authority of

ORS 471.315(1)(a)(A).8 That is, we do not see any reason that

OLCC had to proceed under ORS 471.315(1)(a)(D), regard-

ing suspension for maintaining an insanitary establish-

ment, nor did it do so. If OAR 845-006-0345(15) and (16) did

not exist, then it is possible that OLCC might have instead

sought to suspend licensee’s license for maintaining an

insanitary establishment in violation of OHA rules, under

authority of ORS 471.315(1)(a)(D) and ORS 471.333(3),9 or

because public necessity warranted the suspension, under

7

Licensee has never purported to challenge the validity of OAR 845-006-

0345(15) and (16), nor has licensee developed any argument that those rules

exceed OLCC’s statutory authority or are otherwise invalid. Instead, licensee

makes an argument about the prima facie case requirement in ORS 183.417(4).

We express no opinion on the validity of OAR 845-006-0345(15) and (16).

8

It is also worth recalling that the guidelines that OHA created pursuant

to EO 20-66 are not only OHA rules. They are also part of EO 20-66 itself. EO

20-66(2)(a) (“Upon approval, the OHA guidance will become part of the directives

of this Executive Order[.]”). Licensee never explains why ORS 471.333(3) would

apply to OLCC’s suspension of a license for maintaining an insanitary establish-

ment in violation of an executive order of the Governor.

9

We speak theoretically, because OLCC’s current position is that licensee

did not maintain an insanitary establishment, based on OLCC’s understand-

ing of “insanitary.” In other words, OLCC’s view is that it could not have sus-

pended licensee’s license for maintaining an insanitary establishment based on

indoor-dining and mask violations.

354 JGB Enterprises, LLC v. OLCC

authority of ORS 471.315(1)(d). But that would be a different

case.

Because OLCC suspended licensee’s license for vio-

lating OAR 845-006-0345(15) and (16), as authorized by

ORS 471.315(1)(a)(A), not for maintaining an insanitary

establishment, we reject licensee’s second assignment of

error, even assuming arguendo that it was adequately pre-

served and is properly before us on appeal.

Affirmed.