Suess Builders Co. v. City of Beaverton

• Decision Date: 29 December 1982
• Citation: 294 Or. 254,656 P.2d 306
• Parties: SUESS BUILDERS COMPANY, C. Robert Suess and Helen Suess, Petitioners on review, v. CITY OF BEAVERTON, and Tualatin Hills Park and Recreation District, Respondents on review. SC 28615, CA A20101; TC 40569.
• Court: Oregon Supreme Court

Page 306

656 P.2d 306

294 Or. 254

SUESS BUILDERS COMPANY, C. Robert Suess and Helen Suess, Petitioners on review, v. CITY OF BEAVERTON, and Tualatin Hills Park and Recreation

District, Respondents on review.

SC 28615, CA A20101; TC 40569.

Supreme Court of Oregon.

Argued and Submitted Oct. 5, 1982.

Decided Dec. 29, 1982.

Terry D. Morgan, Portland, argued the cause and filed briefs for petitioners on review. With him on the brief was Morgan & Shonkwiler, P.C., Portland.

Carrell F. Bradley, Hillsboro, argued the cause and filed briefs for respondents on review. With him on the brief was Schwenn, Bradley, Batchelor & Brisbee, Hillsboro.

Kevin L. Hanway, Lake Oswego, filed briefs for amici curiae Home Builders Ass'n of Metropolitan Portland, and Oregon State Home Builders Ass'n.

Roger J. Marzulla and Alison Ling Noven, Denver, Colo., filed an amicus curiae brief for Mountain States Legal Foundation. With them on the brief was Steven P. Couch, Co-counsel, Klamath Falls.

Before LENT, C.J., and LINDE, PETERSON, TANZER, CAMPBELL and CARSON, JJ.

LINDE, Justice.

Plaintiffs own 9.4 acres of land in the city of Beaverton. In a complaint against the city and the Tualatin Hills Park and Recreation District, plaintiffs allege that these governmental bodies temporarily deprived them of the rental value of the property and caused a permanent depression of its market value by designating the major part of the property as a future park site in the city's comprehensive land use plan, and that this constituted a compensable taking of their property for public use under Oregon Constitution article I, section 18 and the federal fifth and fourteenth amendments. ¹ The complaint also alleged claims under 42 U.S.C. §§ 1983 and 1985(3). Upon the defendants' motion to dismiss the complaint, the trial court entered judgment for defendants. The Court of Appeals affirmed on the strength of this court's decision in Fifth Avenue Corp. v. Washington County, 282 Or. 591, 581 P.2d 50 (1978). We allowed review to consider plaintiffs' claim that their complaint satisfied the criteria stated in that decision or, if not, that those criteria should be reconsidered. We hold that the complaint sufficed to survive a motion to dismiss.

I. The "taking" claim.

In Fifth Avenue Corp., a landowner sought compensation from Washington County for portions of its property which were designated for a public transit station and a greenway on the county's comprehensive plan but which neither the county nor another public authority then proceeded to acquire. The court noted that planning for future acquisition as such does not constitute a compensable taking of property, even if anticipation of the eventual taking substantially diminishes the uses of the property that will seem worthwhile to its owner or to potential buyers, but that the result might be different where the plan designation itself imposes a present prohibition on inconsistent private uses. Such a prohibition might result from the rule that zoning or other land use decisions must be consistent with the comprehensive plan. ORS 197.175(2); Baker v. City of Milwaukie, 271 Or. 500, 533 P.2d 772 (1975). But the court also noted that the Baker rule, which precludes allowing a private use more intensive than the private use contemplated in a comprehensive plan, might not apply with equal force to allowing some private use pending public acquisition of the property for a planned public use, even if the public use will be less "intensive" than the prior private use.

"More intensive private development than that allowed by the plan is not likely to be reversible in favor of less intensive private use. The same is not necessarily true with respect to eventual public acquisition of land tentatively designated as a site of a future public facility. There the question of the interim use of the land involves the eventual cost of the planned public use rather than its entire preclusion by allowing a present private use."

Fifth Avenue Corp., supra, 282 Or. at 611 n. 15, 581 P.2d 50.

In other words, a landowner who requests or a local government that would allow a present use more intensive than a different private use designated in the comprehensive plan normally cannot show how the two are compatible or how the intensive, financially more valuable use will be replaced by the later less intensive private use; but such a showing may be possible if the eventual use designated in the plan contemplates acquisition of the land by one of the public entities participating in the plan. ² The court therefore stated that a landowner could not seek compensation in an "inverse condemnation" action unless he could show that the city or county would permit no economically feasible private uses of the land pending the eventual taking for public use. ³ The designation of the eventual public use in the plan and citation of Baker v. City of Milwaukie, supra, alone do not suffice to show preclusion of all interim uses. Rather, the court concluded that

"[E]ven if planning or zoning designates land for a public use and thereby effects some diminution in value of his land, the owner is not entitled to compensation for inverse condemnation unless: (1) he is precluded from all economically feasible private uses pending eventual taking for public use; or (2) the designation results in such governmental intrusion as to inflict virtually irreversible damage."

Fifth Avenue Corp., supra, 282 Or. at 614, 581 P.2d 50.

Petitioners and amici curiae invite us to reconsider Fifth Avenue Corp. v. Washington County, supra, to pursue what they claim to be a more sophisticated analysis of "regulatory takings." We see no occasion to do so. The issue in this case does not arise from regulation of the private use of property. That happens to many forms of business enterprise and private investment, not peculiarly to investment in real property, where it perhaps stirs special atavistic memories of the feudal and pioneering past. And land use control is not the only kind of regulation directed to specific identifiable property. The generality of a rule often safeguards against biased and unequal political decisions, but that alone does not turn a more narrowly focused ruling into a taking. A newly adopted health or environmental regulation may forbid the use of a fuel or the production of certain wastes and thereby cause the closure of a large plant. A tightened safety standard may devastate an investment in expensive machinery or product inventory. ⁴ New building codes or other rules concerning fire safety or access for handicapped persons may make it uneconomic to maintain a hotel or residential building, with consequent financial loss. Business invests with knowledge of such governmental power to make laws for its conduct, and the balancing of regulatory goals against their economic consequences is the daily stuff of politics rather than of litigation for "just compensation." See Anthony v. Veatch, 189 Or. 462, 494, 220 P.2d 493 (1950) (prohibition of "fixed gear" fishing); City of Portland v. Meyer, 32 Or. 371, 52 P. 21 (1898) (prohibition of slaughter house). Regulation in pursuit of a public policy is not equivalent to taking for a public use, even if the regulated property is land. ⁵ The issue in this case, however, arises from a governmental plan to acquire private land for public ownership. Regulation enters this case only because plaintiffs claim that the plan designation in legal and practical effect made the property unusable for anything other than the indicated public taking until the defendants changed their minds and rescinded their decision to acquire it. Except for the planned acquisition, the city's regulatory policy, in the form of its zoning ordinance, was to allow low density residential development of the land. According to this claim, the governmental bodies in effect told plaintiffs to hold parts of their land for the park district, subject to taxes and without an opportunity to make economic use of it or to place it on the market, until the district was politically and financially ready to buy it for the planned park.

If so, that would not be the equivalent of taking the property entirely when the comprehensive plan was adopted. Adoption of the plan would not mean that defendants were obligated to buy the land and plaintiffs could sue for the price. The governmental bodies could change their minds, as they in fact did, and the landowners would retain their property. Given that governments, like other buyers, do change their plans and that if they do not, they would eventually pay for the property, it cannot even be taken for granted that the property could not be sold in the interim. But adoption of a plan could be the equivalent of taking the use of the property until the government decided to buy it or to release it, if the legal effect of defendants' actions is to "freeze" the status of the land for that purpose without any possibility of an economic use. If that is the effect, it might be described as analogous to seizing from the landowner an option to buy the land during an indefinite term. As this case comes before us upon a judgment dismissing the complaint, the narrow issue is whether the plaintiffs sufficiently plead such action by the defendants to require them to answer. We therefore turn to the complaint.

The complaint alleges, in summary, that plaintiffs' property was zoned for low density residential use under a 1960 city ordinance; that between 1966 and 1971 plaintiffs pursued with the city their proposals for residential development of the property, which were not approved; that between 1971 and 1976 the park district offered to purchase the property at a price below its fair market value; that in 1972 the city adopted a comprehensive plan which designated two-thirds of plaintiffs' property as a site for a future public park; that the park district refused to exercise its condemnation powers ...