Corey v. Dlcd

• Citation: 184 P.3d 1109,344 Or. 457
• Decision Date: 08 May 2008
• Docket Number: SC S054995.,(DLCD M119478.,CA A129905
• Parties: Virginia COREY, Bergis Road, LLC, and Bernita Johnston, Respondents on Review, v. DEPARTMENT OF LAND CONSERVATION AND DEVELOPMENT, Petitioner on Review.
• Court: Supreme Court of Oregon

184 P.3d 1109

344 Or. 457

Virginia COREY, Bergis Road, LLC, and Bernita Johnston, Respondents on Review, v. DEPARTMENT OF LAND CONSERVATION AND DEVELOPMENT, Petitioner on Review.

(DLCD M119478.

CA A129905;

SC S054995.

Supreme Court of Oregon.

Argued and Submitted February 27, 2008.

Decided May 8, 2008.

On petition for review and motion to vacate and remand.^*

Denise G. Fjordbeck, Senior Assistant Attorney General, Salem, argued the cause and filed the petition and motion to vacate and remand for petitioner on review. With her on the motion were Hardy Myers, Attorney General, and Mary H. Williams, Solicitor General.

Gregory A. Chaimov, of Davis Wright Termaine LLP, Portland, argued the cause and filed the reply to the motion for respondents on review. With him on the reply was Donald P. Roach, Portland.

Kristian Roggendorf, of O'Donnell Clark & Crew LLP, Portland, argued the cause and filed the response for amici curiae Gerald and Roberta Curry, husband and wife, George Raymond Smith, individually and as controlling member of The Raymond Smith, LLC, and as trustee for the Raymond Smith Survivor's Trust, Raymond Smith Qualified Marital Trust, and Raymond Smith Family Trust, and Shirlee Lenske, as controlling member of Lenske Properties, LLC. With her on the response were Stephen F. Crew, and D. Dan Chandler, Special Counsel for amici.

James Zupancic, Lake Oswego, filed a brief for amici curiae The Harold V. Olson and Sarajean Olson Revocable Living Trust, James and Virginia Carlson, and George and Earlene Hansen.

Before DE MUNIZ, Chief Justice, and GILLETTE, DURHAM, BALMER, KISTLER, and LINDER, Justices.^**

GILLETTE, J.

This proceeding arises out of a land use case. In that case, the Department of Land Conservation and Development (DLCD) sought review of the Court of Appeals decision in Corey v. DLCD, 210 Or.App. 542, 152 P.3d 933, adh'd to, 212 Or.App. 536, 159 P.3d 327 (2007), a case decided under Ballot Measure 37 (2004) (Measure 37). We allowed DLCD's petition for review. However, DLCD now believes that the recent passage of Ballot Measure 49 (2007) rendered Corey moot. It therefore asks this court to dismiss its petition and to vacate the decision of the Court of Appeals. Plaintiffs, who are landowner parties in Corey, deny that that decision is moot. As we discuss below, we agree with DLCD that Corey is moot, and we dismiss DLCD's petition for review on that ground. However, we deny DLCD's request that we vacate the decision of the Court of Appeals.

Measure 37 was adopted through the initiative process in the 2004 general election and was codified at ORS 197.352 (2005), amended by Ballot Measure 49, Oregon Laws 2007, chapter 424, section 4, and renumbered as ORS 195.305. It requires public entities that enact and enforce land use regulations to pay a landowner whose property is affected by any such regulations "just compensation," which the statute generally defines as an amount equal to the "reduction in the fair market value of the affected property interest" resulting from enforcement of any land use regulation enacted after the date of acquisition of the property by the landowner or a family member of the landowner. ORS 197.352(1)-(3) (2005). The provision authorizes affected landowners to make a "written demand for compensation" to the regulating entity, ORS 197.352(5), and states that the compensation "shall be due" when and if the land use regulations at issue continue to be enforced 180 days after the landowner makes his or her written demand, ORS 197.352(4) (2005).

Plaintiffs in this case are Virginia Corey and Bergis Road, LLC, a limited liability corporation that is wholly owned and controlled by Corey's sister, Bernita Johnston. Plaintiffs own interests in a 23-acre parcel of land in rural Clackamas County. Early in 2005, they filed a written demand under Ballot Measure 37, seeking compensation from DLCD for reduction in the fair market value of that land caused by application of, among other things, Statewide Planning Goals 3 (Agricultural Lands) and 14 (Urbanization). In the demand, plaintiffs asserted that Corey and Johnston had inherited their interests in the land from their mother in 1978. They further asserted that their demand for compensation properly extended to all regulations enacted after 1973 — the year that Corey's and Johnston's mother first acquired the property.¹

DLCD issued a final order resolving plaintiffs' demand in July 2005. In the order, DLCD chose to waive enforcement of certain of the land use regulations to which plaintiffs objected, rather than to compensate plaintiffs for the effects of those regulations on the value of their property.² However, the waiver that DLCD granted did not extend to all of the regulations that plaintiffs had targeted in their claim: For plaintiff Corey, DLCD waived land use regulations and statutes enacted after December 11, 1978, which it found to be the date when Corey inherited her interest in the property from her mother; and for plaintiff Bergis Road LLC, DLCD waived regulations and statutes enacted after August 12, 2004, when that entity acquired its interest in the property from Virginia Johnston. In announcing those waiver dates, DLCD implicitly rejected plaintiffs' contention that, because Bernita Johnston is the sole creator, member, and manager of Bergis Road LLC, her transfer of her interest in the property to that entity should be ignored for purposes of Measure 37.³

Plaintiffs sought judicial review of DLCD's final order in the Court of Appeals. However, before the case was briefed or argued, DLCD filed a "Motion to Determine Jurisdiction." In its motion, DLCD explained that plaintiffs had filed a parallel petition for judicial review in the circuit court and that it was necessary to determine which court had jurisdiction to review DLCD's final order. DLCD's position was that, because no statutory or constitutional provision conferred a right to a contested case hearing in Ballot Measure 37 cases, plaintiffs were not seeking judicial review of a final order in a "contested case" under ORS 183.482 and, therefore, they could not proceed in the Court of Appeals. Instead, DLCD argued, review of the DLCD order must proceed under provisions of the Administrative Procedures Act pertaining to review of "orders other than contested cases," ORS 183.484, which would be in "the Circuit Court for Marion County [or] the circuit court for the county in which the petitioner resides or has a principal business office."

The Court of Appeals granted DLCD's motion to determine jurisdiction and then announced that, contrary to DLCD's position, the order at issue should have been an order in a contested case and, therefore, was subject to judicial review in the Court of Appeals. Corey, 210 Or.App. at 552, 152 P.3d 933. The court reasoned that, although Measure 37 did not itself provide for a contested case hearing, once DLCD accepted plaintiffs' claim as valid, the Due Process Clause of the Fourteenth Amendment required it to offer plaintiffs a contested case-type hearing to determine the appropriate extent of the waiver. And, the Court of Appeals concluded, because DLCD should have employed contested case procedures, judicial review was available in the Court of Appeals under the provision of the Administrative Procedures Act pertaining to review of orders in contested cases (ORS 183.482). 210 Or.App. at 549-52, 152 P.3d 933.⁴

DLCD sought review of that decision in this court, challenging the ultimate jurisdictional holding and the underlying proposition that a contested case hearing is required to determine the scope of compensation (or waiver) whenever a public agency accepts a Measure 37 claim as valid. As noted, we allowed DLCD's petition for review in October 2007.

One month later, in the November 2007 general election, the voters adopted Ballot Measure 49 (2007) (Measure 49), which amended Measure 37 and added provisions that altered the claims and remedies available to landowners whose property values are adversely affected by land use regulations. Of particular relevance here, Measure 49 directly addresses Measure 37 claims filed before the end of the 2007 legislative session. Section 5 of Measure 49 provides:

"A claimant that filed a claim under ORS 197.352[, i.e., Measure 37,] on or before the date of adjournment sine die of the 2007 regular session of the Seventy-fourth Legislative Assembly is entitled to just compensation as provided in:

"(1) Sections 6 or 7 of this 2007 Act, at the claimant's election, if the property described in the claim is located entirely outside any urban growth boundary and entirely outside the boundaries of any city;

"(2) Section 9 of this 2007 Act if the property described in the claim is located, in whole or in part, within an urban growth boundary; or

"(3) A waiver issued before the effective date of this 2007 Act to the extent that the claimant's use of the property complies with the waiver and the claimant has a common law vested right on the effective date of this 2007 Act to complete and continue the use described in the waiver."

Sections 6 and 7, referenced in subsection 5(1), generally provide that claimants whose claims relate to land outside any urban growth boundary are limited to three home site approvals, unless their land is not high value farm or forest land, in which case they may be eligible for up to ten home site approvals, if certain requirements are met. Section 9, referenced in subsection 5(2), sets out a different remedy for claims relating to land within an urban growth boundary.

Soon after Measure 49 was adopted, DLCD filed a "Notice of Potential Mootness" in this court respecting the impending review of Corey. Later, DLCD filed the present motion to "vacate and remand," arguing that Measure 49 has rendered the controversy in Corey moot. In the motion, DLCD relies on the provisions quoted and summarized above and on section 8 of Measure 49, which provides...