Bates v. Oregon Health Authority

464 October 16, 2024 No. 729

IN THE COURT OF APPEALS OF THE

STATE OF OREGON

Paul BATES,

an individual,

and No Moke Daddy, LLC,

doing business as Division Vapor,

a corporation,

Plaintiffs-Appellants,

v.

OREGON HEALTH AUTHORITY,

and Patrick Allen, in his official capacity as

Director of Oregon Health Authority,

Defendants-Respondents.

Multnomah County Circuit Court

21CV33671; A180270

Leslie G. Bottomly, Judge.

Argued and submitted February 21, 2024.

John Thorpe, Arizona, argued the cause for appellant.

Also on the briefs was Herbert G. Grey.

Carson L. Whitehead, Assistant Attorney General,

argued the cause for respondent. Also on the brief were Ellen

F. Rosenblum, Attorney General, and Benjamin Gutman,

Solicitor General.

Before Shorr, Presiding Judge, Mooney, Judge, and Pagán,

Judge.

SHORR, P. J.

Reversed and remanded.

Cite as 335 Or App 464 (2024) 465

SHORR, P. J.

Plaintiffs brought a free speech challenge to ORS

431A.175(2)(f) and OAR 333-015-0357, which restrict the

packaging of inhalant delivery systems, seeking declara-

tory and injunctive relief. On cross-motions for summary

judgment, the trial court granted defendants’ motion and

dismissed the action, concluding that the statute was not

facially unconstitutional and that the trial court did not

have jurisdiction to adjudicate plaintiffs’ challenge to the

administrative rule. Plaintiffs appeal from the judgment

dismissing their claims. We conclude that ORS 431A.175

(2)(f) violates Article I, section 8, of the Oregon Constitution,

and we therefore reverse and remand.

I. BACKGROUND AND PROCEDURAL HISTORY

In 2015, the legislature passed House Bill (HB)

2546, which addressed a number of issues involving “inhal-

ant delivery systems,”1 commonly known as “vape pens” or

“e-cigarettes.” Or Laws 2015, ch 158. The bill, among other

things, outlawed the sale of such products to minors, banned

vaping indoors by adding inhalant delivery systems to the

Oregon Indoor Clear Air Act, and, as relevant to the current

matter, created certain requirements surrounding the sale

and packaging of inhalant delivery systems. Id.2

1

“Inhalant delivery system” means:

“(i) A device that can be used to deliver nicotine or cannabinoids in the

form of a vapor or aerosol to a person inhaling from the device; or

“(ii) A component of a device described in this subparagraph or a sub-

stance in any form sold for the purpose of being vaporized or aerosolized by a

device described in this subparagraph, whether the component or substance

is sold separately or is not sold separately.”

ORS 431A.175(1)(a)(A).

2

At the time HB 2546 was passed, inhalant delivery systems were not yet

regulated on the federal level. Effective August 2016, the FDA issued a final

rule deeming electronic nicotine delivery systems, including “e-cigarettes,” to be

subject to chapter IX of the Federal Food, Drug, and Cosmetic Act, the Tobacco

Control Act. Deeming Tobacco Products To Be Subject to the Federal Food, Drug,

and Cosmetic Act, 81 Fed Reg 28,974 (May 10, 2016) (codified at 21 CFR Parts

1100, 1140, 1143). In so doing, the FDA made qualifying vaping products subject

to the same requirements that other tobacco products must comply with, such as

age limits and warning labels regarding the addictive nature of nicotine. Id. The

FDA has also prioritized enforcement of its policies as it relates to the impact

on minors’ access to and use of such products. See Enforcement Priorities for

Electronic Nicotine Delivery Systems and Other Deemed Products on the Market

Without Premarket Authorization, 85 Fed Reg 23,973 (Apr 30, 2020) (noting

466 Bates v. Oregon Health Authority

ORS 431A.175(2)(f), enacted as a part of HB 2546,

states:

“It is unlawful:

“* * * * *

“(f) To distribute, sell or allow to be sold an inhalant

delivery system if the inhalant delivery system is packaged

in a manner that is attractive to minors, as determined by

the [Oregon Health Authority] by rule.”

The Oregon Health Authority (OHA) subsequently pro-

mulgated a number of regulations regarding packaging of

inhalant delivery systems, including OAR 333-015-0357,

which stated:

“(1) An inhalant delivery system is packaged in a

manner that is attractive to minors if because of the pack-

aging’s presentation, shape, graphics, coloring or writing,

it is likely to appeal to minors.

“(2) The Authority considers the following non-

exclusive list to be likely to appeal to minors:

“(a) Cartoons;

“(b) Celebrities, athletes, mascots, fictitious charac-

ters played by people, or other people likely to appeal to

minors;

“(c) Food or beverages likely to appeal to minors such

as candy, desserts, soda, food or beverages with sweet fla-

vors including fruit or alcohol;

“(d) Terms or descriptive words for flavors that are

likely to appeal to minors such as tart, tangy, sweet, cool,

fire, ice, lit, spiked, poppin’, juicy, candy, desserts, soda,

sweet flavors including fruit, or alcohol flavors; or

“(e) The shape of any animal, commercially recogniz-

able toy, sports equipment, or commercially recognizable

candy.”3

FDA’s intent to prioritize enforcement actions against flavored, cartridge-based

products, products for which manufacturers had failed to take adequate mea-

sures to prevent minors’ access to, and products targeted to minors or likely to

promote use by minors). We note that our decision here does not affect retailers’

obligation to comply with federal law.

3

OAR 333-015-0357 was amended in 2023. Because we conclude that the

authorizing statute is unconstitutional and do not reach the merits of the rule

Cite as 335 Or App 464 (2024) 467

Plaintiffs filed a complaint in circuit court seek-

ing declaratory and injunctive relief, asserting that ORS

431A.175(2)(f) and the regulations promulgated by OHA

violated Article I, section 8, of the Oregon Constitution4

by impermissibly infringing upon the right to free speech

through the prohibition of truthful, nonmisleading com-

munication of information about legal products based on

the content of the communications. Plaintiffs additionally

alleged that the statute and regulations were overbroad

because they mandated the censorship of more speech than

was necessary to protect minors, and were unconstitution-

ally vague because they failed to give people reasonable

notice about what was permitted and what was forbidden.

Defendants filed a motion for summary judgment,

asserting that the circuit court did not have jurisdiction to

review the facial validity of administrative rules, and main-

taining that ORS 431A.175(2)(f) did not violate Article I,

section 8. Plaintiffs opposed the motion and filed their own

cross-motion for summary judgment.

The circuit court agreed with defendants that it did

not have jurisdiction over plaintiffs’ challenge to the reg-

ulations, noting that “a ‘facial’ challenge to an agency reg-

ulation must be brought in the Court of Appeals under the

[Oregon Administrative Procedures Act].” The court further

concluded that, applying the framework set forth in State v.

Robertson, 293 Or 402, 649 P2d 569 (1982), for evaluating free

speech claims, the statute was not subject to a facial challenge

because it did not expressly regulate speech, even though it

may have had the effect of prohibiting or limiting speech. The

court rejected plaintiffs’ vagueness challenge without dis-

cussion. The court therefore granted defendants’ motion for

summary judgment and denied plaintiffs’ cross-motion, and

dismissed the claims.

On appeal, plaintiffs argue that the circuit court

erred in granting defendants’ motion for summary judgment,

raising four assignments of error. Plaintiffs assert that the

challenge, the amendment does not affect our analysis. All references in this

opinion are to the version in effect at the time this action was filed.

4

Article I, section 8 states: “No law shall be passed restraining the free

expression of opinion, or restricting the right to speak, write, or print freely on

any subject whatever[.]”

468 Bates v. Oregon Health Authority

trial court erred by: (1) concluding that ORS 431A.175(2)(f)

does not violate Article I, section 8; (2) failing to address

whether ORS 431A.175(2)(f) is unconstitutionally vague;

(3) concluding that it lacked jurisdiction over the challenge

to the regulations; and (4) failing to conclude that the regu-

lations are unconstitutional. Defendants maintain that the

circuit court did not err in any of those respects.

II. ARTICLE I, SECTION 8 ANALYSIS

A. Standard of Review

Whether a statute is facially invalid because it

unconstitutionally restricts speech in violation of Article I,

section 8, is a question of law that we review for legal error.

Couey v. Clarno, 305 Or App 29, 33, 469 P3d 790 (2020),

rev den, 367 Or 496 (2021).

B. Robertson Framework

We begin with the framework for evaluating

Article I, section 8, claims, as established in Robertson. We

first identify the three categories of laws in the Robertson

framework:

“The first Robertson category encompasses any law that is

‘written in terms directed to the substance of any “opinion”

or any “subject” of communication.’ [Robertson, 293 Or at

412]. Laws in that category are unconstitutional on their

face, ‘unless the restriction is wholly confined within an

historical exception.’ Id. The first category encompasses

only statutes that expressly prohibit speech.

“The second Robertson category also encompasses only

statutes that expressly prohibit speech. A law falls within

the second category if it expressly regulates speech but is

directed to forbidden effects or harms of the proscribed

speech and not to the substance of the communication

itself. Id. at 415. Laws that fall within the second Robertson

category are analyzed for overbreadth and are held to be

facially invalid if they are overbroad. Id.

“The third Robertson category describes laws that do

not expressly restrict speech but that may have the effect

of prohibiting or limiting it. Laws in the third category

are not facially invalid, but they are subject to as-applied

challenges.”

Couey, 305 Or App at 34-35.

Cite as 335 Or App 464 (2024) 469

The parties dispute which category this statute

falls under. Plaintiffs argue that ORS 431A.175(2)(f) is a

category one law because it restricts a medium of expression

(the package) in terms of the message or expressive content;

alternatively, plaintiffs argue that it is a category two law

aimed at reducing minors’ use of inhalant delivery systems

by expressly proscribing speech. Defendants maintain that

the statute by its plain terms does not restrict expression

because there is nothing inherently expressive about the

distribution or sale of a product and packaging is not inher-

ently expressive; therefore, the law may only be challenged

in an as-applied posture pursuant to Robertson category

three when it has the effect of reaching speech.5

We therefore must determine whether the prohibi-

tion on sales of inhalant delivery systems that are packaged

in a manner that is attractive to children is a law “directed

by its terms at restraining or restricting speech or expres-

sion.” City of Nyssa v. Dufloth/Smith, 339 Or 330, 338, 121

P3d 639 (2005).

C. Application

As noted above, ORS 431A.175(2)(f) makes it

unlawful “to distribute, sell or allow to be sold an inhalant

delivery system if the inhalant delivery system is packaged

in a manner that is attractive to minors, as determined by

[OHA] by rule.” We conclude that the statute is written in

terms directed to the substance of a communication and is

therefore a Robertson category one law.

In interpreting a statute, we engage in our well-

established methodology of considering the text in context

and any helpful legislative history. State v. Gaines, 346 Or

160, 171-72, 206 P3d 1042 (2009). We engage in that process

here to determine precisely what is being regulated. The

action that is proscribed by the statute is the distribution,

sale, or allowance of the sale of the restricted products. The

Supreme Court has held that “[s]elling is a form of communi-

cative behavior that includes speech and may involve goods

that are protected expression.” City of Hillsboro v. Purcell,

5

As defendants correctly note, plaintiffs have not asserted an as-applied

challenge to the statute.

470 Bates v. Oregon Health Authority

306 Or 547, 555, 761 P2d 510 (1988); see also City of Eugene

v. Miller, 318 Or 480, 485, 871 P2d 454 (1994) (citing Purcell

and noting that restrictions on selling can implicate speech).

We conclude that the phrasing of the statute in terms of reg-

ulating the sale of certain products does not by itself render

the statute one that does or does not restrict expression.

We therefore turn to the phrase “packaged in a

manner that is attractive to minors.” When words are

not defined in a statute, we presume that the legislature

intended for them to have their ordinary meanings. Gaines,

346 Or at 175. “Attractive” is defined as “1a: able to cause

(a person or animal) to approach by influencing the will or

appealing to the senses * * * 2: having qualities that arouse

interest, pleasure, or affection in the observer : pleasing[.]”

Webster’s Third New Int’l Dictionary 141 (unabridged ed

2002). Defendants assert that there is nothing inherently

expressive about packaging in and of itself, that it could be

plain or something purely functional. However, we conclude

that the word “attractive,” as it refers to the manner in which

a product is packaged, refers to the packaging’s expressive

content: those expressive qualities of the packaging, such

as words, color, images, or design that may draw a minor

to a product or arouse their interest. It does not refer to the

utility or function of the package. We do not find persuasive

defendants’ assertion that the word “attractive” could have

been intended to refer to nonexpressive elements of pack-

aging, such as bundling an inhalant delivery system with

a toy.6 We conclude that the “attractiveness” of the manner

of packaging is expressive speech. The statute therefore is

a direct restriction of that speech, making it a Robertson

category one law.

We disagree with defendants’ characterization of

the Supreme Court’s opinion in State ex rel Rosenblum v.

Living Essentials, LLC, 371 Or 23, 56-57, 529 P3d 939 (2023),

as concluding that packaging is not inherently expressive.

6

We have been unable to locate any clear legislative history that explains

the meaning of ORS 431A.175(2)(f) other than a single Senate floor statement

referring to the intentional targeting of inhalant delivery systems to children

through advertisements, kid-friendly flavors, and “flashy packaging.” Video

Recording, Senate Chamber, HB 2546, May 11, 2015, at 0:36:02 (comments of

Sen Elizabeth Steiner Hayward).

Cite as 335 Or App 464 (2024) 471

In discussing a statute that prohibited a person or business

from causing “likelihood of confusion or of misunderstand-

ing as to the source, sponsorship, approval, or certification

of real estate, goods or services,” and concluding that the

statute did not regulate speech, the court stated:

“We have never held that all conduct associated with the

sale of goods and services is expressive. Here, the statute

could reach such things as the manner in which products

are packaged, the location at which they are sold, or even

where they are placed on a store shelf, if a likelihood of con-

fusion or misunderstanding were likely to result.”

Living Essentials, LLC, 371 Or at 56-57. Contrary to defen-

dants’ assertion that that passage demonstrates that “the

regulation of packaging is not the regulation of expression,”

we interpret the passage as referring to the clearly non-

expressive elements of packaging, similar to physical place-

ment. In the matter at hand, the word “attractive” is what

renders the restriction on packaging a restriction on expres-

sive content.

We take guidance from City of Portland v. Tidyman,

306 Or 174, 759 P2d 242 (1988). In that case, the city had

enacted a zoning ordinance that required adult bookstores

to be located at least 500 feet from any residential zone

and, in some cases, at least 1,000 feet from any other adult

business, defining adult bookstores as establishments that

had a substantial or significant portion of their merchan-

dise depicting sexual activities or nudity. Id. at 177-78, 181.

The ordinance’s introduction purported to address the col-

lateral impact of adult businesses and associated blighted

conditions. Id. at 184-85. The ordinance did not prohibit

the adult bookstores from locating within the city, nor did it

purport to limit the content of the materials for sale in the

stores. Nonetheless, the Supreme Court held that, in light

of the fact that an establishment became prohibited based

on the quantity of adult merchandise sold, the ordinance

was “flatly directed against one disfavored type of pictorial

or verbal communication.” Id. at 184-85. In response to the

city’s arguments regarding the ordinance’s intended pur-

pose of regulating the effect of speech and not the speech

itself, the court noted:

472 Bates v. Oregon Health Authority

“If the ordinance were so written, it might well be valid on

its face and subject only to scrutiny for valid administra-

tion; but it is not so written. * * * [The ordinance] under-

takes to prevent what the city believes to be the effects of

the trade in sexually explicit verbal or pictorial material

by describing the content of this communicative material.”

Id. at 184. The court went on to note that, even though the

city had made legislative findings to support the premises

for the ordinance, “[i]t is the operative text of the legisla-

tion, not prefatory findings, that people must obey and that

administrators and judges enforce.” Id. at 185.

We additionally note and distinguish the Supreme

Court’s decision in State v. Stoneman, 323 Or 536, 920 P2d

535 (1996). In that case, the court grappled with the constitu-

tionality of a statute that criminalized the purchase of a lim-

ited and specific kind of pornographic material that depicted

actual children engaged in sexually explicit conduct. Id. at

539. We had initially determined that the statute was an

unconstitutional Robertson category one statute, because it

focused on the content of the materials that it regulated and

made no mention of preventing any supposed harmful effect.

Id. at 544. The Supreme Court disagreed, acknowledging

that although the statute appeared to have contained a

content-based proscription on expressive material, the stat-

ute could not be read in a vacuum, and in examining that

context, the court noted that the prohibited materials in that

case necessarily involved harm to children—they owed their

very existence to the commission of sexual abuse of a child

and the commerce of those materials was an extension of that

harmful act. Id. at 545-46. The court concluded that the stat-

ute “prohibited the purchase of certain communicative mate-

rials, not in terms of their communicative substance, but in

terms of their status as the products of acts that necessarily

have harmed the child participants.” Id. at 548. Because the

statute was directed at preventing the harm of child sexual

exploitation, the court analyzed it as a Robertson category

two law and assessed it for overbreadth, concluding that it

was constitutionally valid. Id. at 550.

We view the present case as more similar to

Tidyman than Stoneman: the statute at issue here regulates

Cite as 335 Or App 464 (2024) 473

expression based on its content, not the effect. The parties do

not dispute that limiting minors’ use of vaping products is a

legitimate legislative purpose. We agree. The circuit court

correctly found that there was undisputed evidence that

vaping products have harmful effects on children. Again, we

agree. The circuit court also took note of legislative materials

indicating the legislature’s purpose of limiting the harmful

health effects on minors caused by using nicotine and vaping

products, both from an addiction and health perspective and

in terms of the dangers of accidental ingestion. Other provi-

sions of HB 2546 and other statutes are specifically directed

toward those goals, including those that outlaw the sale of

the products to minors, require products to be inaccessible

to patrons without employee assistance unless minors are

not permitted in the establishment, and require all inhal-

ant delivery systems to be packaged in child-resistant safety

packaging. ORS 167.755; ORS 167.765; ORS 431A.175(2)(e).

Plaintiffs do not argue before us that those aspects of the law

are unconstitutional. They challenge ORS 431A.175(2)(f).

However, ORS 431A.175(2)(f) is only concerned with

the expressive content of the packaging of products legally

sold to consenting adults. If the products are packaged in a

manner that is not attractive to minors, the sale is lawful;

if they are packaged otherwise, the sale is unlawful. The

law therefore restrains expression and does not regulate the

effect of a sale to a minor or a minor’s later use of the prod-

uct. In Tidyman, the court noted:

“the operative text of the ordinance does not specify adverse

effects that constitute the ‘nuisance’ attributable to the sale

of ‘adult’ materials and therefore does not apply only when

these adverse effects are shown to occur or imminently

threaten to occur. * * * By omitting the supposed adverse

effects as an element in the regulatory standard, the ordi-

nance appears to consider the ‘nuisance’ to be the char-

acteristics of the ‘adult’ materials rather than secondary

characteristics and anticipated effects of the store. Such

lawmaking is what Article I, section 8, forbids.”

Tidyman, 306 Or at 185-86. Here, whether a sale or dis-

tribution violates the statute turns on the substance of the

packaging itself rather than on any resulting effect. Unlike

in Stoneman, there is nothing about the expressive content

474 Bates v. Oregon Health Authority

being regulated here that necessarily involves harm to chil-

dren. Absent an established correlation between the packag-

ing and the actual harm of minors using inhalant delivery

systems, the law is not directed at a forbidden effect or harm

of the regulated speech. The rationale of Tidyman supports

our conclusion that ORS 431A.175(2)(f) is a category one law.

See also Living Essentials, LLC, 371 Or at 46-47 (concluding

that the portion of the statute at issue that made it unlawful

to represent that real estate, goods or services had attri-

butes that they did not actually have was a category one law

because it prohibited speech based on its substance rather

than on any resulting effects).

We are not persuaded by defendants’ argument that

the statute itself contains no operative prohibition on speech

because it did not take effect until OHA promulgated rules

determining what qualifies as “attractive to minors.” As the

above analysis demonstrates, the statute is a prohibition on

the sale of certain expressive materials. The fact that OHA

had to promulgate rules in order to establish which kinds

of expressive packaging it deemed attractive to minors does

not make the statute itself any less of a law “restricting the

right to speak, write, or print freely on any subject what-

ever,” in contravention of Article I, section 8.

We thus turn to the final step of analysis under

Robertson to consider whether the law falls within a his-

torical exception to the prohibition of Article I, section 8.

Robertson, 293 Or at 412. Examples include “perjury, solic-

itation or verbal assistance in crime, some forms of theft,

forgery and fraud and their contemporary variants.” Id.

Defendants do not suggest any basis for finding this law

to fall within any historical exception and we are aware

of none. We therefore conclude that ORS 431A.175(2)(f) is

unconstitutional on its face.

III. REMAINING ASSIGNMENTS OF ERROR

Plaintiffs assert in their second assignment of

error that ORS 431A.175(2)(f) is unconstitutionally vague.

Because we have already determined that the statute vio-

lates Article I, section 8, we need not reach the vagueness

argument.

Cite as 335 Or App 464 (2024) 475

Plaintiffs’ third assignment of error is an assertion

that the trial court erred when it concluded that it lacked

jurisdiction over plaintiffs’ challenge to the OHA regula-

tions. The trial court did not err in that respect. A facial chal-

lenge to an agency’s rules must be brought under the APA,

which vests jurisdiction for such actions in this court, not

the circuit court. ORS 183.400(1); see also Pacific Northwest

Bell Telephone Co. v. Eachus, 107 Or App 539, 543-44, 813

P2d 46 (1991) (acknowledging that a circuit court could

have jurisdiction to adjudicate the validity of an adminis-

trative rule if such resolution was required for determina-

tion of another matter properly before the circuit court, but

noting that in that case there was “no separate civil action

that places a rule’s validity at issue. A direct challenge to a

rule must be brought in [the Court of Appeals] under ORS

183.400.”). Plaintiffs’ action did not raise any separate mat-

ters requiring resolution of the validity of the regulations; it

simply requested a determination that the regulations were

unconstitutional. Therefore the circuit court did not have

jurisdiction.

Because the circuit court did not have jurisdiction to

adjudicate plaintiffs’ facial challenge to the regulations, we

do not reach the merits of the regulations’ constitutionality.

Id. at 542 (“If * * * the circuit court never had jurisdiction,

[the] appeal from that judgment only confers jurisdiction on

this court to decide the jurisdictional issue.”).7

IV. CONCLUSION

In summary, we conclude that ORS 431A.175(2)(f)

is an unconstitutional restriction of speech under Article I,

section 8, and we therefore reverse the circuit court’s judg-

ment dismissing the action. We additionally note that the

correct disposition of a declaratory judgment claim is to

enter a judgment declaring the parties’ rights. De Lanoy v.

Taylor, 300 Or App 517, 520, 452 P3d 1036 (2019) (When a

“party asks for a declaration, it is incumbent on the court to

declare the respective rights of the parties.”). Accordingly,

on remand, the trial court must enter a judgment consistent

7

We acknowledge that, in light of our holding that ORS 431A.175(2)(f) is

unconstitutional, the regulations implementing it necessarily will be affected.

476 Bates v. Oregon Health Authority

with this opinion and declaring the rights of the parties

under the law.

Reversed and remanded.