1000 Friends of Oregon v. Wasco County Court

• Decision Date: 24 November 1987
• Citation: 742 P.2d 39,304 Or. 76
• Parties: 1000 FRIENDS OF OREGON, the assumed name of Oregon Land Use Project, Inc., an Oregon non-profit corporation, Kelly McGreer, Rosemary McGreer, James G. Perkins, Shirlee Perkins, David Dickson and Melinda Dickson, Respondents on Review, v. WASCO COUNTY COURT, David Knapp, Richard Dennis Smith, Kent Bullock, Samadhi Matthews, Respondents (below), City of Rajneeshpuram and Rajneesh Foundation International, formerly Chidvilas Rajneesh Meditation Center, Petitioners on Review. LUBA 81-132; CA A39509; SC S33322.
• Court: Oregon Supreme Court

Page 39

742 P.2d 39

304 Or. 76

1000 FRIENDS OF OREGON, the assumed name of Oregon Land Use Project, Inc., an Oregon non-profit corporation, Kelly McGreer, Rosemary McGreer, James G. Perkins, Shirlee Perkins, David Dickson and Melinda Dickson, Respondents on Review, v. WASCO COUNTY COURT, David Knapp, Richard Dennis Smith, Kent Bullock, Samadhi Matthews, Respondents (below) City of Rajneeshpuram and Rajneesh Foundation International formerly Chidvilas Rajneesh Meditation Center Petitioners on Review.

LUBA 81-132; CA A39509; SC S33322.

Supreme Court of Oregon In Banc.

Argued and Submitted Jan. 21, 1987.

Decided Sept. 9, 1987.

Reconsideration Denied Nov. 24, 1987.

Allen L. Johnson, of Johnson & Kloos, Eugene, argued the cause for petitioners on review. With him on the petition were Edward J. Sullivan, of Mitchell, Lang & Smith, Portland, and Leslie Roberts, of Josselson, Potter & Roberts, Portland.

Kenneth M. Novack, of Ball, Janik & Novack, Portland, argued the cause and filed a response for respondents on review. With him on the response was Robert E. Stacey, Jr., Portland.

LINDE, Justice.

The issue before us is whether a 2-1 decision by a board of county commissioners to call an election on a proposal to incorporate a city was invalid because one of the favorable votes was cast by a member who had undisclosed business dealings with proponents of the incorporation. The Land Use Board of Appeals (LUBA), after taking evidence on the transactions, rejected this challenge to the county board's action. On review, the Court of Appeals reversed LUBA's order and invalidated the county board's decision because one of the participants was not impartial. 1000 Friends of Oregon v. Wasco County Court, 80 Or.App. 532, 723 P.2d 1034 (1986). We reverse the Court of Appeals and affirm LUBA's order.

The participation of the county board member, Wasco County Judge Richard Cantrell, in the vote was one of several grounds on which 1000 Friends of Oregon objected to the incorporation of the City of Rajneeshpuram on what had been a ranch. A number of other objections under the land use laws were reviewed in prior decisions. ¹ In the last of these decisions, this court remanded the present issue to LUBA with instructions to determine whether the incorporation election was invalid on grounds that the county judge improperly participated in setting the election, with prejudice to substantial rights. 1000 Friends of Oregon v. Wasco County Court, 299 Or. 344, 376, 703 P.2d 207 (1985). The issue was carefully considered on remand and well briefed by the parties, resulting in the opposing conclusions stated by LUBA, over a dissent, and by the Court of Appeals.

LUBA's findings of fact may be summarized as follows. On two occasions when Cantrell visited the ranch, representatives of its residents, the petitioners for incorporation, told him that they were interested in buying cattle. Cantrell by letter offered to sell cattle to the ranch, asking prices somewhat higher than the prevailing market prices. He told his fellow commissioners of the intended sale but did not make it public. The representatives of the ranch accepted Cantrell's offer at his asking price. They decided to do so because they "needed him," and they consciously kept the transaction "low key" in order not to embarrass Cantrell. They also overlooked certain irregularities in the quality, weighing and transportation of the cattle, which LUBA found to have no significance for its decision. LUBA concluded:

"In sum, the evidence is that the sale was irregular in some respects. Overall, the sale reflects an eager buyer, i.e., one who was less concerned with obtaining the best bargain possible than with meeting the requirements of the seller. The buyers and their associates may have believed this transaction would improve their chances of favorable treatment concerning the incorporation and related proceedings. There is no proof, however, that the transaction was expressly contingent on Cantrell's vote of November 4, 1981. Indeed, the evidence does not show any discussion at all between Cantrell and the cattle purchasers about the incorporation petition then pending before the county. Nor do we find that the transaction was so one-sided as to constitute a sham or an implicit 'pay-off' for his vote. Thus, we conclude petitioners have not carried the burden of proving disqualifying bias."

LUBA also considered whether the county board's decision was tainted by Cantrell's failure publicly to disclose his private dealings with the proponents of the incorporation. The majority opinion observed that the facts did not meet Oregon's statutory definition of a "potential conflict of interest," ORS 244.020(4), because the effect of the incorporation decision would not be to Cantrell's private benefit or detriment, and in any event, the government ethics law expressly provides that an official's failure to disclose a potential conflict of interest shall not lead to invalidating the official's action by a "court." ORS 244.130(2). That term does not necessarily preclude reversal by higher or subsequent agency action; however, the LUBA majority found no legal basis to set aside Cantrell's vote, and therefore the county board's decision, on grounds of his undisclosed communications with the proponents concerning matters that did not bear on the proposed incorporation vote.

Chief Referee Kressel, dissenting, did not expressly disagree with the majority's findings of fact. He concluded, however, that the proponents had attempted to gain Cantrell's support by economic pressure, and that the cattle deal was sufficiently likely to have influenced his vote to require Cantrell's disqualification under Oregon law and the due process requirement of the federal constitution.

In reversing LUBA's affirmance of the county board's action, the Court of Appeals held that LUBA's findings of fact were supported by substantial evidence. Implicitly exercising judicial review for procedural error, ORS 197.850(9)(a), as our remand directed, the court held the action was "quasi-judicial" under the criteria of Strawberry Hill 4 Wheelers v. Benton County Bd. of Comm., 287 Or. 591, 601 P.2d 769 (1979), and therefore required decision by impartial board members under Fasano v. Washington Co. Comm., 264 Or. 574, 507 P.2d 23 (1973), and Commonwealth Corp. v. Casualty Co., 393 U.S. 145, 89 S.Ct. 337, 21 L.Ed.2d 301 (1968), both of which the court believed to be based on federal due process requirements.

Concerning the first premise, LUBA found that the local district attorney advised the county commissioners that they had no legal authority to deny a proper petition for an incorporation election, though they could alter the proposed boundaries, and that Judge Cantrell believed that he had no choice but to vote for an election. (Cantrell's title as county "judge" has no bearing on the nature of the board's decision; see generally Strawberry Hill 4 Wheelers, supra, 287 Or. at 594-602, 601 P.2d 769 (discussing history and operation of county "courts").) Without pursuing the question here, we shall accept the assumption that a county board's decision on a petition for an election to incorporate a city is "quasi-judicial," because we agree with the LUBA majority that even so, the decision need not be set aside on the facts found by LUBA.

OREGON LAW

We reach constitutional issues only after determining whether a case can be decided on other legal grounds, because a constitutional holding places the issue beyond the ordinary lawmaking process. See, e.g., Planned Parenthood Assn. v. Dept. of Human Res., 297 Or. 562, 564-65, 687 P.2d 785 (1984) and cases there cited. Fasano v. Washington Co. Comm., supra, the first case on which the Court of Appeals relied, did not cite the 14th amendment or Supreme Court doctrines interpreting "due process of law." As explained in a later decision written by the author of Fasano, that holding rested on legislation which required county zoning to conform with a comprehensive plan, thus making certain types of zoning decisions dependent on "fact finding and the application of general policy as embodied in the comprehensive plan to a discrete situation * * *." Those decisions, were, therefore, "quasi-judicial rather than legislative in nature." Neuberger v. City of Portland, 288 Or. 155, 159-60, 603 P.2d 771 (1979). This legislative scheme "implied" certains safeguards characteristic of adjudicative procedure. See id. at 161, 603 P.2d 771; Strawberry Hill 4 Wheelers, 287 Or. at 603, 601 P.2d 769.

The main holding in Fasano itself concerned burdens of proof and the scope of judicial review of local zone changes. See 264 Or. at 586-88, 507 P.2d 23. The court considered it appropriate to add some procedural guidance for future cases, specifically that parties at county board hearings "are entitled to an opportunity to be heard, to an opportunity to present and rebut evidence, to a tribunal which is impartial in the matter--i.e., having had no pre-hearing or ex parte contacts concerning the question at issue--and to a record made and adequate findings executed." Fasano, 264 Or. at 588, 507 P.2d 23 (citation omitted).

In using "i.e." in the quoted sentence, Fasano did not mean to imply that only pre-hearing or ex parte contacts could destroy the required impartiality; obviously, selfdealing and various types of bias also would do so. But Fasano did clearly state that board members must maintain impartiality only toward the parties and issues "in the matter," not toward all individuals and all competing interests in the community generally, and similarly, that the disqualifying contacts must be "concerning the question at issue." The "matter" and the "question at issue" here concerned the proposal to incorporate Rajneeshpuram. LUBA concluded from the evidence that the proponents may have been eager to make a cattle deal with the county judge, but that alone does not make their...