Boise Cascade Corp. v. Board of Forestry

• Decision Date: 10 April 1997
• Citation: 325 Or. 185,935 P.2d 411
• Parties: BOISE CASCADE CORPORATION, A Delaware corporation, Respondent on Review, v. BOARD OF FORESTRY, Petitioner on Review. CC 93-2018; CA A79626; SC S42159.
• Court: Oregon Supreme Court

Page 411

935 P.2d 411

325 Or. 185

BOISE CASCADE CORPORATION, A Delaware corporation Respondent on Review, v. BOARD OF FORESTRY, Petitioner on Review.

CC 93-2018; CA A79626; SC S42159.

Supreme Court of Oregon.

Argued and Submitted Jan. 10, 1996.

Decided April 10, 1997.

Virginia L. Linder, Solicitor General, Salem, argued the cause for petitioner on review. With her on the brief were Theodore R. Kulongoski, Attorney General, and John T. Bagg, Assistant Attorney General.

Philip D. Chadsey, of Stoel Rives Boley Jones & Grey, Portland, argued the cause for respondent on review. With him on the briefs was Charles F. Adams.

Before CARSON, C.J., and GILLETTE, VAN HOOMISSEN, FADELEY and DURHAM, JJ. ^*

GILLETTE, Justice.

This is an inverse condemnation case in which plaintiff Boise Cascade asserts that the defendant State of Oregon, acting through its Board of Forestry, has "taken" certain property of Boise Cascade by promulgating a rule that, Boise Cascade alleges, denies Boise Cascade all beneficial use of the property. ¹ The state seeks review of a decision of the Court of Appeals, which reversed a circuit court order that dismissed plaintiff's inverse condemnation action under ORCP 21 ² on several grounds. Boise Cascade Corp. v. Board of Forestry, 131 Or.App. 538, 886 P.2d 1033 (1994) ("Boise I "). ³ There are two issues before us: (1) whether, in an inverse condemnation proceeding of this kind, a court should (or must) stay its own proceeding until the agency first has an opportunity to determine whether the application of its rule effected a "taking" and, if not, (2) whether plaintiff has stated a claim in this case. We conclude that plaintiff's complaint properly was before the circuit court, because the circuit court and the Board share concurrent jurisdiction in this case. We also conclude that certain of the allegations in plaintiff's complaint are sufficient to survive a motion to dismiss.

FACTS

In February 1992, plaintiff filed a proposal with the Oregon Department of Forestry ("the Department") to log a 64-acre parcel of plaintiff's land (the "Walker Creek Unit"). ⁴ The land contains northern spotted owl nests and is subject to the northern spotted owl protection provisions of OAR 629-24-809, which the Board of Forestry ("the Board") adopted in 1990. ⁵ The Department denied the proposal on the ground that the logging plan did not provide sufficient protection for spotted owl habitat, as required by OAR 629-24-809.

In May 1992, plaintiff submitted an amended logging plan. The Department again denied the proposal, pursuant to OAR 629-24-809, but advised plaintiff that eight specified acres of the Walker Creek Unit could be logged, if the logging did not take place either between March 1 and September 30, 1992 (which was the critical period of use), or until young spotted owls fledged. Plaintiff appealed that decision to the Board arguing, inter alia, that such an application of OAR 629-24-809 to its Walker Creek Unit property effected a "taking" of that property under the state and federal constitutions.

On January 15, 1993, the Board rejected plaintiff's challenge and entered a final order denying plaintiff's logging plan for the 64 acres. With respect to plaintiff's "takings" argument, the Board stated:

"Boise Cascade appears to have been undecided as to the appropriate time to advance this argument. Although it asserts * * * that such an argument is not premature, it did not at hearing attempt to present evidence that any 'taking' had in fact occurred. * * * Certainly[,] there is an inadequate factual basis upon which to advance any claim of a constitutional taking."

On February 1, 1993, plaintiff filed this inverse condemnation action in Clatsop County Circuit Court, alleging that the Board's application of its administrative rule constituted a "taking" under Article I, section 18, of the Oregon Constitution, and under the Fifth Amendment to the United States Constitution. ⁶ (Boise I ).

On February 22, 1993, after it had filed the present action, plaintiff submitted a plan to log four of the eight acres that the Department previously had agreed could be harvested. On March 8, 1993, the Department approved plaintiff's plan, subject to a condition that the logging not begin until October 1, 1993, and end by March 1, 1994, when no nesting would take place. Plaintiff appealed that temporal restriction to the Board and argued, inter alia, that the temporal restriction also constituted a temporary "taking" under the state and federal constitutions.

On March 17, 1993, while its second "takings" claim concerning the four-acre parcel still was pending before the Board, plaintiff petitioned the Court of Appeals for judicial review of the Board's January 15, 1993, order. (Boise II ).

On April 19, 1993, the Board rejected plaintiff's challenge to the temporal restriction concerning the four acres and entered a second final order. In that order, the Board did not address the "takings" issue. Rather, the Board stated that "[t]he issue of whether there is a taking would more properly be [addressed] in a court of competent jurisdiction, once administrative remedies are exhausted."

On April 22, 1993, plaintiff filed a supplemental complaint in the present circuit court action, alleging that the separate temporal restriction on logging the four acres constituted a separate "taking." (Boise I ).

On April 26, 1993, plaintiff filed a second petition for judicial review, seeking review of the Board's April 19, 1993, order that refused to remove the temporal condition on logging of the four acres. As noted, the Court of Appeals consolidated that proceeding with the earlier administrative review proceeding. (Boise II ).

In May 1993, the circuit court granted the state's motion to dismiss the entire inverse condemnation claim on the grounds that the court lacked subject matter jurisdiction over the dispute, that the action was not ripe, and that the complaint failed to state a claim. (Boise I ). Plaintiff appealed the circuit court's ruling to the Court of Appeals, which reversed the dismissal of plaintiff's inverse condemnation claim on all three grounds. The state petitioned for review. ⁷

DISCUSSION

I. Jurisdiction

The first issue presented is whether, as the state argues, in a regulatory "takings" claim, the agency that promulgated the rule that is alleged to effect a "taking" has primary jurisdiction to determine whether the application of that rule does, in fact, constitute a "taking." ⁸ The Court of Appeals held that the Board and the circuit court have concurrent jurisdiction over plaintiff's "takings" claims, but declined to decide whether the Board has any "decisional authority" initially to decide the "takings" issue. Boise I, 131 Or.App. at 546-49, 886 P.2d 1033. The state advances two arguments on review: (1) The Board has "exclusive" jurisdiction, to the exclusion of the circuit court, to decide the "takings" issue; or, (2) alternatively, a regulatory "takings" claim must be resolved, in the first instance, by the agency whose rule is alleged to have effected a "taking," because the agency has "primary jurisdiction" over such claims.

There are two types of "primary" jurisdiction. First, statutory primary jurisdiction exists when a statute "specifically requires courts to apply the primary jurisdiction doctrine to a class of disputes." Kenneth Culp Davis and Richard J. Pierce, Jr., II, Administrative Law Treatise § 14.1, 276 (3d ed. 1994) (hereafter "Davis and Pierce"). ⁹ Second, by contrast, "[i]n the bulk of cases * * *, primary jurisdiction is a judge-made doctrine. Its scope and effect are determined by judicial reasoning." Ibid. There is no statute that addresses the issue before us; the state in this case is asserting the latter type of primary jurisdiction.

Judicial invocation of the doctrine of primary jurisdiction generally is appropriate when a court decides that an administrative agency, rather than a court of law, initially should determine the outcome of a dispute or one or more issues within that dispute that fall within that agency's statutory authority. The purpose behind the doctrine is the "recognition of the need for orderly and sensible coordination of the work of agencies and of courts." Kenneth Culp Davis, Administrative Law Text § 19.01, 374 (3d ed.1972). The reason for the doctrine is "not a belief that an agency's expertise makes it superior to a court; [but] that a court confronted with problems within an agency's areas of specialization should have the advantage of whatever contributions the agency can make to the solutions." Id., § 19.06 at 381. That is, the doctrine is one ordinarily invoked by a court in the traditional judicial system with the belief that a previous agency disposition of one or more issues before the court will assist the court in resolving the case before it.

Courts vary in their approaches to invoking the doctrine of primary jurisdiction. According to one treatise on administrative law, with which we agree:

"There is no fixed formula for determining whether an agency has primary jurisdiction over a dispute or an issue raised in a dispute. In making such determinations, courts consider several factors, including (1) the extent to which the agency's specialized expertise makes it a preferable forum for resolving the issue, (2) the need for uniform resolution of the issue, and (3) the potential that judicial resolution of the issue will have an adverse impact on the agency's performance of its regulatory responsibilities."

Davis and Pierce, § 14.1 at 272. The authors also observe, however, that, "[i]ncreasingly, * * * courts balance the considerations that favor allocation of initial decisionmaking responsibility to an agency against the likelihood that application of primary jurisdiction will unduly delay resolution of the dispute before the court." Ibid.

Upon invoking the doctrine of primary jurisdiction, the disposition of the...