Conflicting rulings leave rural landowners caught and confused

by Eric Mortenson, The Oregonian

A percolating batch of legal rulings -- one in federal court and several in state courts -- have thoroughly dissolved any agreement Oregonians thought they had achieved on property rights.

Land-use lawyers disagree on the sweep of the rulings, which have left one county caught between the opposing dictates of a federal judge and a state agency. Meanwhile potentially thousands of rural landowners are once again unsure how much or even if they can build. Some of them have been trying for four years to develop their property under the terms of Measure 37.
 

All sides agree the legal issues need to be resolved quickly, said Richard Whitman, director of the state Department of Land Conservation and Development. That will require a county-level case advancing to an appeals court, perhaps within the next two months.

"That's our focus at this point, is to get one or more of these to our Court of Appeals in a relatively quick time period," Whitman said. "This is going to take a little while to work out."

In the meantime, Whitman's agency has warned Jackson County -- where a federal judge recently ruled in favor of two dozen stifled property owners -- not to allow extensive building.

"We told the county that the state won't step back and see our land use laws ignored," he said.

Jackson County Commissioner C.W. Smith took it as more than a warning. He believes the state may sue the county if it issues development permits to the plaintiffs who won the federal court decision.

"We don't want to issue permits and have the state turn around and sue us and the applicants," Smith said. "Part of it is that we want to make sure we don't subject the citizens of Jackson County that have Measure 37 claims to any further undue damage or delay."

Measure 37, the property rights measure that voters approved in 2004, is at the root of the issue.

It gave property owners the right to develop their land in a way that was allowed when they bought it. For thousands of longtime property owners, almost all of them rural and many of them elderly, it restored the right to build on land that had been rezoned in the decades after Oregon's adoption of statewide land-use planning.

Oregon's system prevented sprawl and preserved farm and forest land, but in some cases it also imposed development restrictions where none had previously existed. In other cases, new zoning eliminated the opportunity for many rural property owners to build homes or start businesses.

About 6,500 property owners filed development claims under Measure 37, asking for a waiver of land-use rules or compensation for lost property value. Oregon's counties, with no money to pay compensation, routinely issued waivers.

Many of the Measure 37 claimants filed to build large subdivisions in rural areas. That prompted 2007's Measure 49, which drastically rolled back development rights. The vast majority of the original Measure 37 claimants settled for an option allowing them to build one to three homes.

But the issue wasn't settled. In Jackson County, the group Citizens for Constitutional Fairness filed a federal lawsuit for 25 clients. Lead attorney Bob Robertson pressed a novel argument: The Measure 37 development waivers were binding contracts, protected by the federal constitution, and could not be undone by Measure 49. He also argued the waivers were "quasi-judicial" decisions that could not be overturned.

Federal Judge Owen Panner agreed on both counts. Although it isn't binding, an opinion from a veteran federal judge carries what attorneys call "influence" precedent.

The recoil continues, with property rights attorneys exchanging fist bumps and land-use supporters expressing polite disagreement. "The state believes, respectively, that the Panner decision is not correct," Whitman said.

Since then, a circuit court judge in Washington County has rejected the contract theory in a separate case. A Yamhill County judge, upholding a Measure 37 "vested rights" decision that allowed five property owners to build subdivisions, wrote as an aside that he believes Panner was wrong.

Earlier this year, the Oregon Supreme Court said Measure 49 clearly was intended to "extinguish and replace the benefits and procedures" of Measure 37. Some attorneys believe that means Measure 37 claims are moot and the contract argument invalid. Others point out that the court didn't address a key issue raised in the case: that development waivers are a federally protected property right.

Robertson, who won the Jackson County decision, said some of his clients may soon file development plans and see how the county reacts.

Commissioner Smith said his county is stuck in the middle. It would cost time, money and heartache to appeal the ruling, and the state is warning the county not to follow it.

"Land-use law has turned into this giant house of cards," Smith said. "I can't say I'm particularly surprised by all the fights going on.

"You tell me," he asked, "how many fingers can we stick in this pie?"

-- Eric Mortenson; ericmortenson@news.oregonian.com

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