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OR: Appeals Court Ruling May Snuff Out Property Rights Claim

A federal appeals court may have doused a legal theory that threatened to blow up the uneasy truce on Oregon's land-use battlefield. Acting on a low-profile Jackson County case, a three-judge panel of the 9th U.S. Circuit Court of Appeals ruled this week that property development rights granted under 2004's Measure 37 aren't legal contracts.

The appeals court reversed a decision by federal Judge Owen Panner, who two years ago said the development waivers were binding, constitutionally protected contracts between the county and property owners. Panner's ruling produced a collective forehead slap among land use attorneys, because it potentially invalidated development limits imposed by 2007's Measure 49. Left unchallenged, it would have reopened the question of building thousands of homes in rural Oregon's farms and forests.

In an eight-sentence ruling beginning with, "We reverse," the appeals court said Panner was wrong. The court also said Measure 49 does not violate the constitution's separation of powers doctrine, another issued raised by property rights lawyers.

But land-use cases aren't over until they're over. Medford attorney Bob Robertson, part of a legal team that represented 25 Jackson County property owners, said the three judges assigned to hear the case had their minds made up beforehand, and he may ask the full nine-judge appeals court to reconsider.

"We're also considering very seriously, if that doesn't work, going ahead and filing a notice of appeal to the U.S. Supreme Court," Robertson said Wednesday. "We're very disappointed, all the Measure 37 claimants in the state of Oregon should be disappointed."

But conservation groups cheered the decision. Panner himself put his ruling on hold in February 2009 pending the appeal, but the uncertainty clouded an issue most Oregonians thought had been resolved.

"If the ruling had been upheld, the state's land-use system would have been in disarray," Portland attorney Ralph Bloemers  said in a news release. More than 7,500 development claims were filed under Measure 37, and Panner's original ruling might have reinstated them all, said Bloemers, who heads the Crag Law Center.

"We're very happy, because we feel the public supported Measure 49," said Jimmy MacLeod,  executive director of Rogue Advocates, a southern Oregon land-use watchdog group. "It's not absolutely perfect, but it was a reasonable change to Measure 37. From our perspective this reversal of Panner's decision brings back that balance."

Measure 37 gave property owners the right to develop their land in a way allowed when they bought it. Thousands of Oregonians filed claims seeking -- at least on paper -- the right to build subdivisions on farm or forest land. Local governments could either pay compensation or waive development rules. In almost every case, cash-strapped governments waived rules.

Measure 49 was intended to roll back development rights allowed with Measure 37. Most property owners who had filed Measure 37 claims settled for a Measure 49 process that allowed them to build one to three houses instead of the hundreds that some people had sought. The Jackson County case could have uncoupled that arrangement.

Robertson's clients wanted to build homes and, in one case, a gas station and motel. In representing them, Robertson made the novel argument that the Measure 37 waivers they originally received from Jackson County were binding contracts.

The appeals court dismissed that notion, saying the situation didn't meet the legal definition of a contract. The county made no promises, didn't offer anything and the property owners didn't accept anything, the court said. "Because there is no contract, (Robertson's clients) fail to state a contracts clause violation."

Robertson disagrees, and says the appeals court didn't consider another aspect of the case. Judge Panner ruled that, because Jackson County is a homerule county, the commissioners were acting as a county court when they considered Measure 37 waivers. That makes the commissioners' action quasi-judicial, meaning it can't be overturned by a legislative act such as Measure 49. The appeals judges didn't buy it, saying the waivers were "administrative decisions, not court judgments."

Robertson is undeterred.

"We think he was right on," he said of Panner. "So the fight goes on."

This article was printed by OregonLive.com on July 21st, 2010 and was written by Eric Mortenson.