Dunn v. City of Redmond

• Decision Date: 14 April 1987
• Docket Number: No. 84-074,84-074
• Citation: 735 P.2d 609,303 Or. 201
• Parties: Don DUNN, Respondent on Review, v. CITY OF REDMOND, Petitioner on Review, and Deschutes County, Respondent Below. LUBA; CA A40877; SC S33474.
• Court: Oregon Supreme Court

Page 609

735 P.2d 609

303 Or. 201

Don DUNN, Respondent on Review, v. CITY OF REDMOND, Petitioner on Review and Deschutes County, Respondent Below.

LUBA No. 84-074; CA A40877; SC S33474.

Supreme Court of Oregon In Banc.

Argued and Submitted March 4, 1987.

Decided April 14, 1987.

Edward J. Sullivan, Portland, argued the cause for petitioner on review.

Roger L. Ellingson, Bend, argued the cause for respondent on review.

LINDE, Justice.

Oregon land use law assigns the Land Use Board of Appeals (LUBA) "exclusive jurisdiction" to review a "land use decision," including review of its constitutionality. ORS 197.825, 197.835(8)(a)(E). In the present case, LUBA rejected claims of petitioner Don Dunn (respondent in this court) and an intervenor that certain ordinances adopted by the City of Redmond were invalid under the Oregon and United States Constitutions, primarily for taking their property without just compensation or depriving them of it without due process of law. Or. Const., Art. I, § 18; U.S.Const., Amends. 5, 14. ¹ When petitioner Dunn sought judicial review, the Court of Appeals did not reach the merits but decided on its own motion that the challenged actions were beyond LUBA's jurisdiction and ordered LUBA to dismiss the proceeding. Dunn v. City of Redmond, 82 Or.App. 36, 727 P.2d 145 (1986). Having allowed the city's petition for review, we reverse the decision of the Court of Appeals and remand the case for further proceedings.

The only issue now before us is LUBA's jurisdiction over Dunn's appeal. ORS 197.835(8) provides:

"In addition to the review under subsection (1) to (7) of this section, the board shall reverse or remand the land use decision under review if the board finds:

"(a) The local government or special district:

"(A) Exceeded its jurisdiction;

"(B) Failed to follow the procedures applicable to the matter before it in a manner that prejudiced the substantial rights of the petitioner;

"(C) Made a decision not supported by substantial evidence in the whole record;

"(D) Improperly construed the applicable law; or

"(E) Made an unconstitutional decision; or

"(b) The state agency made a decision that violated the goals." (Emphasis added.)

The section authorizes LUBA only to "reverse or remand" an unconstitutional land use decision. The Court of Appeals correctly observed that LUBA cannot award compensation when the constitutional claim is that the challenged decision takes private property for public use without just compensation. If a landowner claims to be entitled to financial compensation for a "taking," such a claim must be pursued in a circuit court. See, e.g., Cereghino v. State Highway Com., 230 Or. 439, 370 P.2d 694 (1962); Tomasek v. Oregon Highway Com'n, 196 Or. 120, 248 P.2d 703 (1952). This led the Court of Appeals to conclude, as one reason for its decision, that the Legislative Assembly did not mean LUBA to review a land use decision when a landowner claims that the decision is an unconstitutional "taking" of his property without just compensation. But that depends on what relief the owner seeks.

Doubtless the division of remedial authority between LUBA and the circuit courts brings with it the potential problems of any divided jurisdiction between two tribunals. An owner may be entitled to compensation when the loss of property that a court finds to be a compensable "taking" has already occurred. Cereghino, for instance, involved compensation for flooding of farm land as a result of a highway project; Tomasek involved compensation for erosion resulting from construction of a highway bridge. ² Where an owner contends that future government actions will be a "taking" that can be pursued only upon payment of compensation, the contention is made as a basis for demanding that such actions be abandoned or enjoined. Cf. Pennsylvania Coal Co. v. Mahon, 260 U.S. 393, 415-16, 43 S.Ct. 158, 160, 67 L.Ed. 322 (1922) (declaring void as a "taking" an injunction restraining mining of coal under certain lands).

An owner's unilateral choice of remedy is not conclusive. Constitutional challenges to regulation of private property arise when the government has decided not to take the property for public use and does not intend to pay compensation. The government may be prepared to defend its regulation whether the owner sues to invalidate it or sues for compensation, but if the decision proves to be adverse, the government may prefer to modify or abandon its policy rather than buy the property. When the government has sought to regulate private property but not to take it, the owner cannot force a sale by having a court decide that the regulation is tantamount to taking the property for public use. The policy choice is for the government to make. See Suess Builders v. City of Beaverton, 294 Or. 254, 260, 656 P.2d 306 (1982). ³

This court in fact has never invalidated a regulation of the private use of property under the Oregon Constitution for failure to pay compensation, although a government may have to pay if the regulation is a step in a plan to acquire the property for public use and denies the owner an economic use of the property pending its eventual acquisition. See Suess Builders, supra, 294 Or. at 257-61, 656 P.2d 306; Fifth Avenue Corp. v. Washington Co., 282 Or. 591, 581 P.2d 50 (1978). ⁴ It is conceivable that an owner might demand invalidation of a land use decision or compensation in the alternative, or invalidation plus compensation for an alleged "taking" during the government's aborted effort to acquire the property. But LUBA, rather than a circuit court, has jurisdiction under ORS 197.835(8), set forth above, to consider issues other than constitutional grounds raised against a land use decision. This is important because constitutional attacks against government policies should await decision of issues of ordinary law; doubtful statutes, ordinances, regulations, or orders should not needlessly be interpreted so as to be unconstitutional when there is another valid and tenable interpretation. See Tharalson v. State Dept. of Rev., 281 Or. 9, 13, 573 P.2d 298 (1978); Wright v. Blue Mt. Hospital Dist., 214 Or. 141, 144, 328 P.2d 314 (1958); Peninsula Dr. Dist. No. 2 v. Portland, 212 Or. 398, 418, 320 P.2d 277 (1958). See also Meredith Corp. v. F.C.C., 809 F.2d 863, 872 (D.C.Cir.1987) (Federal Communications Commission required to respond to constitutional challenge in order to "guard against premature constitutional adjudication"). We therefore do not regard it as "unlikely to the point of being impossible," Dunn v. City of Redmond, supra, 82 Or.App. at 41, 727 P.2d 145, that the legislature would assign to the specialized land use board review of the validity of a land use decision and leave to the courts the determination of a claim for compensation. That occurs in other areas of primary agency jurisdiction, ⁵ and it seems to be exactly what the legislature did here.

The second reason cited by the Court of Appeals for denying LUBA's jurisdiction in this case is that the landowner's claim of an unconstitutional "taking" involved other governmental actions besides the land use decisions that he appealed to LUBA.

A "land use decision" within the exclusive jurisdiction of LUBA includes a "final decision or determination made by a local government * * * that concerns the adoption, amendment or application" of the state's land use goals, a comprehensive plan provision, or a land use regulation. ORS 197.015(10)(a)(A). "Land use regulation" includes planning and zoning ordinances. ORS 197.015(11). The owner's petition for review to LUBA attacked two ordinances adopted by the city, zoning ordinance 595 and planning ordinance 596, on several grounds, including an assertion that the ordinances violated Article I, section 18, of the Oregon Constitution and the Fifth and Fourteenth Amendments of the federal constitution by taking private property for public use without just compensation. On its face, therefore, the owner's petition appears correctly to invoke LUBA's jurisdiction.

The petition further requested an evidentiary hearing, authorized by ORS 197.830(11), to determine facts relevant to the allegation that the ordinances "as adopted" violated the Oregon and federal constitutions "and should be declared void." LUBA granted the motion and obtained a "prehearing order" from the parties that set forth agreed and disputed facts and the parties' evidence in the form of depositions and exhibits. The ordinances designated the land as "Open Space Park Reserve," allowing only limited and conditional uses. The additional facts concerned the economic feasibility of these uses and prior dealings between the owner and the city that were said to show the city's intention to acquire the property and to foreclose any alternative development. Upon this record LUBA rejected all challenges to the validity of the ordinances.

The Court of Appeals stated the following reason why it thought the challenges were beyond LUBA's jurisdiction:

" * * * [I]f no taking could arise from the ordinances independently of the historical events which preceded their adoption, the ordinances were not the real focus of LUBA's review. What LUBA was called upon to review, and did review, was a sequence of events dating from 1970. Some of the events LUBA considered were land use decisions which petitioner did not and could not challenge in this appeal; others, such as the unproductive negotiations concerning the purchase of the property, were not land use decisions at all." (Footnote omitted.)

82 Or.App. at 40, 727 P.2d 145. The Court of Appeals continued that

"[b]ecause the challenged ordinances in themselves did not cause the taking, they would remain in place; and any past history of bad faith negotiations would remain water over the dam."

Id. at 41, 727 P.2d 145. The court concluded:

"We hold that, although some of the events which contribute to a taking may come within the definition...