Oregon Courts to Settle Property Protections

Published January 1, 2006

A county circuit judge in Oregon has ruled the state’s Measure 37 property protection law violates the Oregon Constitution. The ruling puts a temporary halt to the voter-enacted law, at least until the Oregon Supreme Court reviews the case.

Measure Won in Landslide

Measure 37, which voters passed in November 2004 in a landslide 61 to 39 percent vote, requires the state or local government to compensate private property owners for the lost value of their property when those governments impose environmental regulations or other prohibitions that restrict private land use.

Environmental activists are bitterly opposed to the law, fearing if state and local governments must pay the economic costs of their land-use prohibitions, rather than forcing affected private property owners to foot the bill, economics will prevent government regulations from being as far-reaching as the activist groups would like.

Court Cited Multiple Rationales

Marion County Circuit Judge Mary James, appointed in 2003 by Gov. Ted Kulongoski (D), ruled on October 14 that Measure 37 is unlawful for a variety of reasons.

First, ruled James, Measure 37 unlawfully prevents the Oregon legislature from exercising its police power to pass and enforce laws. According to James, any voter initiative that limits the state’s regulatory power is an unlawful infringement on the government. James argued, “the legislature may freely exercise the plenary power, and … any limit on this exercise must appear in the constitution.” James observed there is no provision in the Oregon constitution that explicitly allows citizens to limit government’s ability to regulate.

Second, ruled James, Measure 37 unlawfully favors longtime property owners by giving them more compensation than more recent owners of property. James argued people who bought property decades ago have seen more increase in value than those who bought more recently. Therefore, if a more recent property owner seeks relief under Measure 37, that property owner probably will not receive as much money as the property owner would have received if he or she had purchased the property earlier. Hence, James decided, Measure 37 unjustly discriminates against the more recent property owner.

Third, ruled James, Measure 37 violates procedural due process protections of the U.S. Constitution. James asserts that prior to passage of Measure 37, Oregonians had a right to demand that land-use restrictions be enforced against their neighbors without having to compensate their neighbors for losses in property value caused by such restrictions. Because Measure 37 does not allow individual citizens the right to appeal each government decision to reimburse individuals or forego enforcement of land-use provisions, James ruled, Measure 37 violates citizens’ due process rights to challenge such government decisions.

Finally, James ruled, Measure 37 violates citizens’ substantive due process rights not to be deprived of property interests. Noting that compensation for one property owner must be paid by taxpayers in general, and arguing that forgoing land-use restrictions on some property owners violates the rights of other citizens to receive the benefits of such impositions on their neighbors, James ruled Measure 37 takes away citizens’ property interests in violation of the U.S. Constitution.

Decision Decried

Property rights supporters saw the judge’s decision as entirely unjustified. “The house of cards gets taller the farther one reads into the opinion,” said Rodney Stubbs, founder of the Oregon Property Rights Council.

Stubbs noted several specific problems: “Even though there is no such thing in the Oregon constitution as the ‘police power,’ and even though Measure 37 doesn’t prohibit the legislative assembly from enacting or enforcing new land-use regulations, [James ruled] Measure 37 nevertheless infringes the ‘police power’ of the legislature by prohibiting the legislative assembly from enacting or enforcing new or existing land-use regulations.”

Added Stubbs, “The court says … Measure 37 impedes upon fundamental rights of those opposed to property rights. … This part of the court’s opinion is the icing on the cake because the court recognizes what it calls ‘the fundamental rights of neighboring property owners,’ but refuses to recognize the fundamental rights of Oregonians … who have had everything taken from them through the exercise of the state’s nonexistent ‘police power.'”

The Oregon Supreme Court has scheduled oral arguments on the case for January 10.

“It will be interesting to see what the Oregon Supreme Court does,” said Andy Cook, an attorney with the Pacific Legal Foundation. “Many other states are considering initiatives or laws similar to Measure 37. The Oregon Supreme Court may provide important guidance regarding whether Measure 37 is the most effective way to combat unpopular and overly restrictive property laws.”

James Hoare ([email protected]) is managing attorney at the Syracuse, New York office of McGivney, Kluger & Gannon.