Dunning v. State, Bd. of Physical Therapy Exam'rs. ( 2016 )


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  •                        IN THE SUPREME COURT OF THE STATE OF NEVADA
    JAMES DUNNING,                                       No. 67322
    Appellant,
    vs.
    FILED
    NEVADA STATE BOARD OF                                             MAY 2 6 2016
    PHYSICAL THERAPY EXAMINERS,
    Respondent.
    ORDER OF REVERSAL AND REMAND
    This is an appeal from a district court order denying a
    preliminary injunction and granting a motion to dismiss appellant's
    complaint for declaratory relief challenging an administrative action.
    Eighth Judicial District Court, Clark County; Adriana Escobar, Judge.
    In 2011, appellant Dr. James Dunning coined the terms
    "osteopractic" and "osteopractor" in connection with continuing education
    courses he offers to physical therapists in Nevada. Respondent Nevada
    State Board of Physical Therapy Examiners (the Board) later adopted a
    policy prohibiting any physical therapist licensed in Nevada from using•
    the terms "osteopractic" and "osteopractor" in any manner. Dunning filed
    an action for injunctive and declaratory relief, arguing that the Board's
    policy was a regulation as defined by NRS 233B.038 and that the Board
    was therefore required to comply with the requirements of the Nevada
    Administrative Procedures Act (NAPA), NRS Chapter 233B, before
    enacting the policy. The Board filed a motion to dismiss, which the
    district court granted. The district court order states that the motion to
    dismiss was granted "pursuant to NRS 233B.110" without any further
    explanation. Dunning now appeals.
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    It is unclear whether the district court granted the Board's
    motion to dismiss based on Dunning's failure to exhaust administrative
    remedies or because the district court concluded that it lacked jurisdiction
    under NRS 233B.110. "[VVilien unclear, a judgment's interpretation is a
    question of law for this court." Allstate Ins. Co. v. Thorpe, 
    123 Nev. 565
    ,
    570, 
    170 P.3d 989
    , 992 (2007). "When reviewing a district court's
    judgment, we apply the rules of construction that pertain to interpreting
    other written instruments."         
    Id. at 570,
    170 P.3d 992-93
    .
    "Additionally . . . a judgment's legal effect must be determined by
    construing the judgment as a whole, and that, in the case of ambiguity,
    the interpretation that renders the judgment more reasonable and
    conclusive and brings the judgment into harmony with the facts and law of
    the case will be employed." 
    Id. at 570,
    170 P.3d at 993.
    We conclude that the district court order is ambiguous. NRS
    233B.110 permits the filing of a declaratory relief action to challenge a
    regulation but requires that the party first ask the administrative agency
    to pass upon the validity of the regulation. Accordingly, we conclude that
    dismissal for lack of subject matter jurisdiction under NRS 233B.110,
    rather than for failure to exhaust administrative remedies, renders a more
    reasonable and conclusive judgment given the facts and record below.
    Nonetheless, in either case, we conclude that this matter must be reversed
    and remanded.
    The district court erred in dismissing Dunning's claim for lack of subject
    matter jurisdiction under NRS 233B.110
    Dunning argues that the Board's policy is a regulation
    pursuant to NRS 233B.038 such that the district court had jurisdiction
    over the underlying matter under NRS 233B.110. Dunning contends that
    the policy is a statement of general applicability which effectuates or
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    interprets law or policy. Thus, Dunning contends, the district court
    improperly dismissed his complaint for lack of subject matter jurisdiction
    because the district court had authority to determine the validity of the
    policy under NRS 233B.110. We agree.
    This appeal raises issues of statutory interpretation and
    questions of law, which this court reviews de novo.       State, Dep't of Motor
    Vehicles v. Taylor-Caldwell, 
    126 Nev. 132
    , 134, 
    229 P.3d 471
    , 472 (2010).
    NRS 233B.110 outlines the process by which a district court
    may render a declaratory judgment regarding the validity of a challenged
    regulation. District courts have the authority to determine "[t]he validity
    or applicability of any regulation . . . when it is alleged that the regulation,
    or its proposed application, interferes with or impairs, or threatens to
    interfere with or impair, the legal rights or privileges of the plaintiff."
    NRS 233B.110(1) (emphasis added). "A declaratory judgment may be
    rendered after the plaintiff has first requested the agency to pass upon the
    validity of the regulation in question." 
    Id. Agencies "may
    adopt reasonable regulations to aid [them] in            •
    carrying out the functions assigned to [them] by law." NRS 233B.040(1).
    "If adopted and filed in accordance with the provisions of [NAPA]" these
    regulations have the force of law.     
    Id. A regulation
    is "an agency rule,
    standard, directive or statement of general applicability which effectuates
    or interprets law or policy, or describes the organization, procedure, or
    practice requirements of an agency." NRS 233B.038(1)(a); State Farm
    Mitt. Auto Ins. Co. v. Commissioner of Ins.,     
    114 Nev. 535
    , 543, 
    958 P.2d 733
    , 738 (1998).
    In contrast, policies are merely an agency's interpretation or
    understanding of the law and typically do not hold the legal force of a
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    regulation. See generally Nev. State Democratic Party v. Nev. Republican
    Party, 
    256 P.3d 1
    , 6-7 (Nev. 2011);            see also Bader v. Norfolk
    Redevelopment & Hons. Auth., 
    396 S.E.2d 141
    , 143 (Va. Ct. App. 1990).
    Declaratory, decisional, advisory, and fact-specific interpretive rulings are
    not regulations under NRS Chapter 233B. NRS 233B.038(2)(b), (e), (0 and
    (h). For example, "an interpretive ruling is merely a statement of how the
    agency construes a statute or a regulation according to the specific facts
    before it." State Farm Mitt. Auto Ins. 
    Co., 114 Nev. at 543
    , 958 P.2d at
    738. However, this court has reasoned that, where an interpretive ruling
    affects other market participants, appears to be part of a general policy,
    and "is of such major policy concern and of such significance" that it may
    be characterized as being of general applicability, the ruling is a
    regulation subject to the NAPA. 
    Id. at 544,
    958 P.2d at 738 (quoting Pub.
    Serv. Comm'n of Nev. v. Sw. Gas Corp.,      
    99 Nev. 268
    , 273, 
    662 P.2d 624
    ,
    627 (1983) (concluding that rate-design directed at a single utility provider
    constituted a regulation despite the fact that it was only directed at a
    single provider)); see also Coury v. Whit tlesea-Bell Luxury Limousine,   
    102 Nev. 302
    , 305-06, 
    721 P.2d 375
    , 376-77 (1986) (concluding that the Public
    Service Commission's decision in a single contested matter was subject to
    the NAPA because it produced new definitions that created a standard of
    general applicability for all market participants).
    Here, we conclude that the Board's policy is of general
    applicability. The Board published the policy in the "WINTER 2013 WEB
    NEWS BULLETIN" and stated therein that "the Board has determined
    that Nevada licensees may not use the terms 'Osteopractic' or
    'Osteopractoe in any manner." The language used in the Nevada State
    Board of Physical Therapy Examiners Policy Manual is similarly broad,
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    stating that the terms "are not acceptable terms for licensees to use, in
    any form, either written or verbal." Unlike the PSC's determination in
    Southwest Gas Corp., which was directed at a single entity, the language
    of the Board's policy indicates that it is directed to all physical therapists
    licensed in the state of Nevada, not a subset of physical therapists. Nor is
    the policy limited to the use of the terms under certain circumstances.
    Thus, the policy plainly applies to every physical therapist licensed in the
    state of Nevada and to any potential use of the terms "osteopractic" and
    "osteopractor."
    We further conclude that the policy effectuates law or policy.
    The Board's policy manual states that the terms "Osteopractic" and
    "Osteopractor" "are not legally acceptable to be utilized by any licensee."
    However, the policy does not identify which portion of the Nevada Revised
    Statutes or the Nevada Administrative Code that prohibits the use of
    these terms. Accordingly, the policy reserves for the Board the right to
    conclude that any physical therapist's use of the terms, in any manner,
    constitutes a violation of the policy and, therefore, a violation of the law.
    Under these facts, we conclude that the policy is a regulation
    pursuant to NRS 233B.038. Accordingly, the district court had
    jurisdiction over the underlying matter under NRS 233B.110. We reverse
    the district court's order dismissing Dunning's claim for lack of subject
    matter jurisdiction pursuant to NRS 233B.110.
    We decline to address whether Dunning has exhausted administrative
    remedies
    Dunning argues that he exhausted his administrative
    remedies pursuant to NRS 233B.110. We decline to address whether
    Dunning exhausted his administrative remedies because the district court
    failed to make any factual findings on this issue.     Carson Ready Mix, Inc.
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    v. First Nat'l Bank of Nev., 
    97 Nev. 474
    , 476, 
    635 P.2d 276
    , 277 (1981)
    ("We cannot consider matters not properly appearing in the record on
    appeal."). Accordingly, it is unclear what specific steps Dunning took to
    request that the Board "pass upon the validity" of the policy prior to
    availing himself of the district court, as required by NRS 233B.110.'
    Accordingly, we
    ORDER the judgment of the district court REVERSED AND
    REMAND this matter to the district court for proceedings consistent with
    this order. 2
    J.
    Douglas
    'On remand, we instruct the district court to make factual findings
    regarding whether Dunning exhausted• his administrative remedies
    pursuant to NRS 233B.110.
    2 Wehave considered the parties' remaining arguments and conclude
    that they are without merit. Additionally, we note that Dunning declined
    to appeal the district court's denial of his motion for preliminary
    injunction in order to streamline the issues presented in this appeal.
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    cc:   Hon. Adriana Escobar, District Judge
    Phillip Aurbach, Settlement Judge
    Workman Nydegger
    Black & LoBello
    Hal Taylor
    Attorney General/Carson City
    Eighth District Court Clerk
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