Friends of Yamhill County Inc. v. Bd. of Commissioners of Yamhill County

Decision Date20 October 2011
Docket Number(CC CV080305; CA A140899; SC S058915).
Citation264 P.3d 1265,351 Or. 219
PartiesFRIENDS OF YAMHILL COUNTY, INC., an Oregon non-profit corporation, Respondent on Review,v.BOARD OF COMMISSIONERS OF YAMHILL COUNTY, an Oregon municipal corporation, Respondent,andGordon Cook, an individual resident of the State of Oregon and Yamhill County, Petitioner on Review.
CourtOregon Supreme Court

OPINION TEXT STARTS HERE

On review from the Court of Appeals.*Charles F. Hudson, Lane Powell PC, Portland, argued the cause and filed the brief for petitioner on review.Ralph O. Bloemers, Crag Law Center, Portland, argued the cause and filed the brief for respondent on review.

James N. Westwood, Stoel Rives LLP, Portland, filed the brief for amicus curiae Charles J. McClure and Ellen R. McClure.Stephen T. Janik, Ball Janik LLP, Portland, filed the brief for amicus curiae Eileen Marie Cadle Martinson.Denise G. Fjordbeck, Assistant Attorney General, Salem, filed the brief for amicus curiae Department of Land Conservation and Development. With her on the brief were John R. Kroger, Attorney General, and Mary H. Williams, Solicitor General.Sean T. Malone, Eugene, filed the brief for amici curiae Friends of Polk County and Gloria Bennett.Lane P. Shetterly, Shetterly, Irick & Ozias, Dallas, filed the brief for amicus curiae Floyd Prozanski.Before DE MUNIZ, Chief Justice, and DURHAM, KISTLER, BALMER, LINDER, and LANDAU, Justices.**KISTLER, J.

The question in this case is whether a landowner holding a Measure 37 waiver had a common law vested right to construct a residential subdivision that he had begun but not completed by the effective date of Measure 49. Yamhill County found that the costs that the landowner had incurred were sufficient to establish a vested right to complete construction of the subdivision, and the circuit court upheld the county's decision on a writ of review. The Court of Appeals reversed the circuit court's judgment and remanded the case for further proceedings. Friends of Yamhill County v. Board of Commissioners, 237 Or.App. 149, 238 P.3d 1016 (2010). The Court of Appeals started from the proposition that, in the context of Measure 49, a common law vested right turns primarily on the ratio between the costs that a landowner has incurred and the projected cost of the development. It reversed because the county had given too little weight to that factor. We allowed the landowner's petition for review to clarify the standard for determining when, in the context of Measure 49, a common law right to complete a development will vest. We now affirm the Court of Appeals decision, although for different reasons than those stated in the Court of Appeals opinion.

Before turning to the facts of this case, we first discuss briefly the statutory context in which this issue arises. Comprehensive zoning laws first emerged in the early part of the twentieth century. See Village of Euclid v. Ambler Realty Co., 272 U.S. 365, 386–87, 47 S.Ct. 114, 71 L.Ed. 303 (1926) (discussing the origins of zoning laws); Eugene McQuillin, 8 The Law of Municipal Corporations § 25:3, 12–13 (3d ed. 2010) (same). Before then, local governments regulated the location of certain nuisance uses but did not control the use of land within their jurisdictions on a comprehensive basis. McQuillin § 25:3 at 12–13. As a result of increasing urbanization, local governments sought to organize more effectively the variety of different and, at times, incompatible uses of land within their communities. See Patricia E. Salkin, 2 American Law of Zoning § 12:2, 12–7 (5th ed. 2008); Village of Euclid, 272 U.S. at 386–87, 47 S.Ct. 114 (“Until recent years, urban life was comparatively simple; but with the great increase and concentration of population, problems have developed, and constantly are developing, which require, and will continue to require, additional restrictions in respect of the use and occupation of private lands in urban communities.”).

To that end, state legislatures began enacting enabling legislation that authorized local governments to pass comprehensive zoning ordinances. See, e.g., Or. Laws 1919, ch. 311 (permitting municipalities to enact comprehensive zoning ordinances).1 In exercising that authority, local governments retained relative autonomy to craft the planning and zoning policies that governed their communities. See Hector Macpherson & Norma Paulus, Senate Bill 100: The Oregon Land Conservation and Development Act, 10 Will L J 414, 414 (1974). By the latter half of the twentieth century, however, that decentralized zoning authority had yielded, at least in Oregon, to statewide coordination of the standards governing land use. See id. at 415. In 1973, the Oregon legislature enacted Senate Bill 100, which established statewide land use planning goals and delegated the authority to modify and enforce those goals to a state agency. See generally ORS ch 197 (establishing the Land Conservation and Development Commission and setting out statewide land use planning goals).2

Oregon's statewide land use planning system did not come without controversy, however. In some parts of the state, implementing the statewide goals resulted in greater restrictions on the use of property than local zoning law previously had imposed. See Edward J. Sullivan & Jennifer M. Bragar, The Augean Stables: Measure 49 and the Herculean Task of Correcting an Improvident Initiative Measure in Oregon, 46 Will L. Rev. 577, 577–78 (2010). Some persons came to view the statewide goals, which were calculated to protect farm- and forest-resource lands, as unfairly limiting the rights of landowners who acquired their property before those restrictions were put in place. See id. In particular, they were concerned with the limitations that the land use laws placed on a landowner's ability to build homes on his or her land. Id.

Those concerns culminated in Ballot Measure 37. Or. Laws 2005, ch. 1, codified at former ORS 197.352 (2005). That measure provided landowners with “just compensation” for land use regulations, enacted after they had acquired their property, that restricted the use of the property and, as a result, diminished its value. See State ex rel. English v. Multnomah County, 348 Or. 417, 420–22, 238 P.3d 980 (2010) (describing Measure 37). When faced with a claim for “just compensation” under Measure 37, a government could choose: (1) to pay the landowner compensation for the diminished value of the property and enforce the regulation or (2) to waive the regulation and permit the owner “to use the property for a use permitted at the time the owner acquired the property.” Former ORS 197.352(8) (2005).

Measure 37 also was not without controversy. Some believed that the measure went farther than many voters had intended in that it not only permitted landowners to build a small number of additional homes on their property, unrelated to the resource use of the land, but it also authorized the large-scale development of formerly protected lands. See Official Voters' Pamphlet, Special Election, Nov. 6, 2007, 20 (Legislative Argument in Support of Measure 49). In response to those concerns, the 2007 Legislative Assembly considered several draft bills intended to reform Measure 37. After several public hearings, those draft bills were consolidated into a single bill, House Bill 3540 (2007). See Tape Recording, Joint Special Committee on Land Use Fairness, HB 3540, Apr. 26, 2007, Tape 50, Side A (statement of Sen. Greg Macpherson). The legislature did not enact HB 3540 directly; instead, it referred the proposed legislation to the voters on June 15, 2007, as Ballot Measure 49. See Or. Laws 2007, ch. 750, § 2 (referring HB 3540 to the voters). In a special election held on November 6, 2007, the voters approved Measure 49 and, on December 6, 2007, the measure became effective.

Among other things, Measure 49 retroactively extinguished previously issued Measure 37 waivers of land use regulations. See Corey v. DLCD, 344 Or. 457, 466–67, 184 P.3d 1109 (2008) (“Measure 49 by its terms deprives Measure 37 waivers—and all orders disposing of Measure 37 claims—of any continuing viability”; emphasis in original). As a result, landowners who had begun developing their property under authorization granted by Measure 37 waivers could no longer automatically continue to do so. Instead, those landowners had to choose one of three alternative “pathways” moving forward: an “express pathway,” a “conditional pathway,” and “a third pathway for claimants that have vested rights to carry out claims that have already been approved.” Tape Recording, Joint Special Committee on Land Use Fairness, SB 1019, Apr. 19, 2007, Tape 43, Side A (statement of Richard Whitman, Oregon Department of Justice, summarizing the proposed “framework” for amending Measure 37); see Or. Laws 2007, ch. 424, § 5 (setting out those three alternatives).

The express pathway entitles a landowner to obtain development approval for up to three additional homes on his or her property. See Or. Laws 2007, ch. 424, § 5(1) (identifying express pathway). Under the conditional pathway, a landowner can obtain approval for four to 10 homes if, among other conditions, the land use regulations prohibiting the construction of those homes resulted in a specified reduction of the fair market value of the property. See id. § § 7 and 9 (setting out conditional pathway and describing conditions). Finally, the vested rights pathway permits a landowner who had obtained a Measure 37 waiver to “complete and continue the use described in the waiver,” provided that the landowner could also demonstrate a “common law vested right” to complete that use. Id. § 5(3).

This case involves the third pathway that Measure 49 identifies. Gordon Cook owns approximately 40 acres of agricultural land in Yamhill County. Following the passage of Measure 37, Cook filed with the state and county written demands for compensation...

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