State v. Siegel

• Court: Oregon Court of Appeals
• Writing for the Court: POWERS, J.
• Citation: 545 P.3d 1269,331 Or. App. 91
• Docket Number: A179527
• Decision Date: 22 February 2024
• Parties: STATE EX REL ELITEXTRX, LLC, an Oregon limited liability company, Plaintiff-Appellant, v. Scot SIEGEL, Planning Director of Multnomah County, and Multnomah County, Defendants-Respondents.

545 P.3d 1269

331 Or. App. 91

STATE EX REL ELITEXTRX, LLC, an Oregon limited liability company, Plaintiff-Appellant,

v.Scot SIEGEL, Planning Director of Multnomah County, and Multnomah County, Defendants-Respondents.

A179527

Court of Appeals of Oregon.

Argued and Submitted October 23, 2023

February 22, 2024

Multnomah County Circuit Court, 22CV15736; Stephen K. Bushong, Judge.

Kevin J. Jacoby argued the cause for appellant. Also on the brief were Brittany Adikes and Green Light Law Group.

Katherine Thomas argued the cause for respondents. Also on the brief were Jenny M. Madkour.

Before Ortega, Presiding Judge, and Powers, Judge, and Hellman, Judge.

POWERS, J..

₉₂This is an appeal from a circuit court’s dismissal of a mandamus action brought by plaintiff Elitextrx, LLC against the planning director for Multnomah County and Multnomah County (collectively, the county). The circuit court dismissed the action, agreeing with the county’s position that, under ORS 475C.053, it was not yet required to issue the Land Use Compatibility Statement (LUCS) that plaintiff requested in connection with obtaining a license to relocate its marijuana production facility. Construing ORS 475C.053(2), we conclude that whether a land use is "outright permitted" or "conditional," as those terms are used in the statute, depends on whether the proposed use requires discretionary local permit approval "within the given zoning designation where the land is located." Here, the county zoning designa- tion requires such discretionary approval and, thus, the county was not required to issue the LUCS before plaintiff obtained that discretionary approval. Accordingly, we affirm.

We start with a brief overview of the governing statutes and county ordinances. To obtain a marijuana production license from the Oregon Liquor and Cannabis Commission (OLCC), ORS 475C.065, an applicant must request a LUCS from the city or county that authorizes the land use, ORS 475C.053.¹ See also, e.g., OAR 845-025-1090 ₉₃(2)(a) (providing that OLCC "[m]ust receive a land use compatibility statement from the city or county that authorizes land use in the city or county in which the applicant’s proposed premises is located prior to acting on an application * * *"); OAR 845-025-1180(2)(b) (similarly requiring a LUCS for an application for a change of location "for the new proposed location from the city or county that authorizes land use for that location"). The LUCS "must demonstrate that the requested license is for a land use that is allowable as a permitted or conditional use within the given zoning designation where the land is located." ORS 475C.053(1). OLCC cannot issue a license if the LUCS "shows that the proposed land use is prohibited in the applicable zone." Id. The city or county is required to act on a request for a LUCS within 21 days of either "[r]eceipt of the request, if the land use is allowable as an outright permitted use," or "[f]inal local permit approval, if the land use is allowable as a conditional use." ORS 475C.053(2). It is that timing difference—within 21 days of the receipt of the request or after the final local permit approval—that forms the underlying dispute.

In this case, the property at issue is in an exclusive farm use (EFU) zone in the jurisdiction of Multnomah County. Chapter 39 of the Multnomah County Code (MCC) is the Zoning Code of Multnomah County. MCC 39.1000. In that chapter, a "permitted use" is defined as "[a] use permitted in a base zone without the need for special administrative review and approval, upon satisfaction of the standards and requirements of this Chapter." MCC 39.2000 (defining "Permitted Use"). The MCC further provides that "Farm use, as defined in ORS 215.203" is an "allowed use" in an EFU zone "subject to all applicable supplementary regulations contained in MCC Chapter 39." MCC 39.4220(A). Under state law, marijuana is "[a] crop for the purposes of ‘farm use’ as defined in ORS 215.230" and "[a] crop for ₉₄purposes of a ‘farm’ and ‘farming practice,’ both as defined in ORS 30.930." ORS 475C.489(1)(a), (b).

Under ORS 475C.449(2), a city or county can adopt "reasonable regulations" on the operation of marijuana businesses, including marijuana production.² Under that authority, the county has adopted regulations as part of its zoning code that apply to marijuana businesses. That section, MCC 39.8500 is included in the zoning code under Part 8.D., which is titled "Special Permits and Applications." MCC 39.8500(D) provides, in part:

"A proposal for establishing, altering, expanding or replacing a Marijuana Business will be reviewed as specified in Table A below and is subject to the specified criteria therein as well as the criteria set forth in paragraph E of this section. * * * Where no review process for a particular Marijuana Business in a particular base zone is specified in Table A, the Marijuana Business may not operate in that base zone."

Where the proposed use is for outdoor marijuana production in an EFU zone, the proposal must comply with MCC 39.4220(A) (allowing "farm use", subject to all applicable supplemental regulations in MCC chapter 39), and MCC 39.8500(E), which includes additional requirements related to siting relative to schools; setbacks for buildings and structures; limitations and required equipment related to noise, light, and barriers; and limiting a lot of record to only one of each of the listed types of marijuana businesses.

With that legal background in mind, we briefly relate the undisputed factual and procedural history of this case. Plaintiff, who owns and operates a licensed recreational marijuana production facility in Portland, planned to relocate its facility to property located within the planning jurisdiction of Multnomah County on property zoned EFU. In September 2021, plaintiff submitted an application to the county for a LUCS, as required by ORS 475C.053. ₉₅The county issued a LUCS that checked the box on the form providing that plaintiff's proposed use "is prohibited." The county also included comments in the LUCS that provided:

"MCC 39.4215 Uses specifies that no building, structure or land shall be used unless the use will occur on a Lot of Record. At present, no final land use decision has been made that tax lot 2N1W21-01100 is a Lot of Record.

"The applicant, Elitextrx, LLC has not obtained approval of a Marijuana Business Registration from Multnomah County Land Use Planning. The [c]ounty’s ordinance is to protect and preserve the public health, safety and general welfare of the community by establishing restrictions on the siting and operation of Marijuana Businesses. [MCC 39.8500]"

(Brackets in original.)

Plaintiff then filed a petition for writ of review with the circuit court. The court issued a writ, and the county in response filed a motion seeking an order from the court to withdraw the LUCS and revise it to comply with Scott, Inc. v. City of Ontario, 316 Or App 633, 503 P.3d 502 (2021). The court granted the county’s motion in part, directing the county to withdraw the LUCS and consider the application anew using the effective date of the withdrawal as the date the county received the LUCS application. The court further directed the county to comply with ORS 475C.053 and Scott. Finally, the court noted that it "has not decided the issue of whether the request for a [LUCS] should be processed under ORS 475C.053(2)(a) or (b)."

Effective March 31, 2022, the county withdrew the LUCS. On May 12, 2022, plaintiff filed a petition for an alternative writ of mandamus, requesting that the circuit court direct the county to issue a LUCS because the proposed use is "outright permitted" and not a "conditional use." The court issued the alternative writ. The county responded and filed a motion to dismiss, arguing that plaintiff's proposed use was not "outright permitted," which would be processed under ORS 475C.053(2)(a). Instead, the county asserted that the proposed use was subject to conditions that require local permit approval that plaintiff had not yet obtained, which is processed under ORS 475C.053(2)(b), and thus the county ₉₆was not yet required to issue the LUCS. After briefing and argument, the court granted the county’s motion to dismiss concluding that the LUCS was required un- der the timelines set out in ORS 475C.053(2)(b) because it was not an outright permitted use within the meaning of the statute.

On appeal from the resulting judgment, plaintiff asserts that this is a case of statutory construction. Specifically, plaintiff requests that we construe what "outright permitted use" and "conditional use" mean as used in ORS 475C.053(2). Based on the text and context of the statute, plaintiff asserts that whether a use is "outright permitted" or "conditional" is determined by the base zone where the property is located. Because plaintiff's proposed use—marijuana production—is a "farm use" that is listed as an "allowed" use in the county’s EFU zone, plaintiff contends that the use is "outright permitted" and, thus, the county had to issue a LUCS within 21 days of March 31, 2022.

The county responds that a land use "is ‘outright permitted’ for purposes of ORS 475C.053(2)(a) only if it is allowed without conditions, whereas a use is ‘conditional’ for purposes of ORS 475C.053(2)(b) if it is allowed subject to conditions met through final local permit approval." The county asserts that the plain text of ORS 475C.053(2) creates a dichotomy between uses that do and do not require local permit approval and links the timing of the issuance of the LUCS to a time when the local government knows whether the proposed use is prohibited or allowable in the zone. The county further argues that the statutory context and legislative history supports its reading of ORS 475C.053. The county also contends that plaintiff's proposed use is not "outright permitted" because it is subject to conditions in the county zoning code that plaintiff must meet through local permit approval.

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