Private Property Rights Triumph: M37 Upheld

Oregon Judicial Department News Release

Case decided February 21, 2006

The full text of these opinions can be found at (editor modified link): http://www.publications.ojd.state.or.us/S52875.htm

Hector MacPherson, et al., v. Department of Administrative Services, (TC 5C10444)(SC S52119)

On direct appeal from the Marion County Circuit Court, Mary Mertens James, Judge. The judgment of the circuit court is reversed, and the case is remanded for entry of judgment in favor of defendants and intervenors. Opinion of the Court by Chief Justice Paul J. De Muniz.

Today, in an action challenging the voter-enacted land use law known as Measure 37, the Oregon Supreme Court held that the measure does not (1) impede legislative plenary power; (2) violate the equal privileges and immunities guarantee of Article I, section 20, of the Oregon Constitution; (3) violate the suspension of laws provision contained in Article I, section 22, of the Oregon Constitution; (4) violate state constitutional separation of powers constraints; (5) impermissibly waive sovereign immunity; or (6) violate the Due Process Clause of the Fourteenth Amendment to the United States Constitution. As a result, the Court reversed a contrary decision by the circuit court and remanded the case for entry of judgment in favor of the state and intervenors.

Measure 37 requires state and local governments to compensate private property owners for any reduction in the fair market value of their real property that results from land use regulation. As an alternative to compensation, however, the measure allows state and local governments to modify, remove, or refrain from applying a regulation to "allow the owner to use the property for a use permitted at the time the owner acquired the property." Oregon voters approved Measure 37 as a statutory enactment at the 2004 General Election, and the measure became effective in December 2004.

In January 2005, plaintiffs -- a group of Oregon landowners and land use organizations -- filed an action against the Department of Administrative Services, the Land Conservation and Development Commission, and the State of Oregon Department of Justice (collectively, "the state"), challenging the validity of Measure 37. Plaintiffs sought a declaration that the measure was unconstitutional under both the Oregon and the United States Constitutions. After conducting a hearing and considering the parties' arguments, the circuit court entered a judgment in October 2005 invalidating Measure 37 on constitutional grounds. The state, together with intervenors, appealed directly to the Supreme Court, which heard oral argument in January 2006.

In a unanimous opinion by Chief Justice Paul J. De Muniz, the Supreme Court reversed the circuit court's judgment. The Court began by determining that plaintiffs had standing to assert their constitutional claims regarding Measure 37, that those claims were ripe for adjudication, and that plaintiffs had not been required to submit their claims to an administrative agency before filing their action in circuit court. The Court then turned to the merits of the parties' constitutional arguments.

First, the Court determined that Measure 37 does not unconstitutionally limit the legislature's plenary power as a law-making body. The Court reasoned that nothing in Measure 37 prevents either the legislature or the people, in the exercise of their initiative power, from enacting new land use statutes, from repealing all land uses statutes, or from amending or repealing Measure 37 itself. The Court also held that Measure 37 did not violate the equal privileges and immunities guarantee set out in Article I, section 20, of the Oregon Constitution because the only classes of persons affected by the measure were those created by the measure itself.

Continuing with plaintiffs' state constitutional arguments, the Court next considered whether Measure 37 suspends the operation of laws in violation of Article I, section 22, or violates separation of governmental powers principles encompassed in Article III, section 1, of the Oregon Constitution. In both instances, the Court concluded that no constitutional violation had occurred. With regard to Article I, section 22, the Court held that Measure 37 does not "suspend" the operation of laws, but, rather, authorizes a governing body to modify, remove, or not apply use regulations in specific situations. With regard to Article III, section I, the Court held that the measure does not encroach on executive power; rather, it simply provides avenues for judicial review in specific land use cases. Similarly, the Court concluded that enactment of Measure 37 did not operate to waive impermissibly the state's sovereign immunity.

Having rejected plaintiffs' state constitutional arguments, the Court then turned to plaintiffs' arguments under the United States Constitution, specifically, under the Due Process Clause of the Fourteenth Amendment. The Court first concluded that plaintiffs had failed to demonstrate that Measure 37 facially deprives plaintiffs of their property without affording procedural due process because circumstances exist in which applying Measure 37 would not violate the Fourteenth Amendment of the United States Constitution. Finally, the Court concluded that Measure 37 did not deny plaintiffs substantive due process protections because the method that the people chose for advancing the legitimate objective of either compensating certain landowners or otherwise relieving those landowners from the financial burden of certain land use regulations is rationally related to the accomplishment of that objective.


Consistently with the foregoing holdings, the Court reversed the circuit court's judgment and remanded the case to the circuit court for entry of a judgment in favor of the state and intervenors.

***************************

Please read the full Oregon Supreme Court Opinion here: http://www.publications.ojd.state.or.us/S52875.htm