Appeal from the United States District Court for the District of Oregon Owen M. Panner, Senior District Judge, Presiding D.C. No. 1:08-cv-03015-PA , D.C. No. 1:09-cv-03082-PA
The opinion of the court was delivered by: N.R. Smith, Circuit Judge:
Argued and Submitted October 12, 2011-Portland, Oregon
Before: David M. Ebel,*fn1 Marsha S. Berzon, and N. Randy Smith, Circuit Judges.
Opinion by Judge N.R. Smith
In this consolidated appeal, we determine whether the State of Oregon and Jackson County (collectively Oregon) committed a constitutional taking, violated Plaintiffs' due process rights, or violated Plaintiffs' equal protection rights when Oregon voters enacted Measure 49 to replace and modify remedies available under the previous Measure 37. We con- clude that Oregon did not commit a constitutional taking when it modified the remedies available under Measure 37, because any potential property interest that Plaintiffs had for compensation or a specific type of land use under Measure 37 had not vested. Measure 49 also does not contravene substantive due process, because it does not implicate fundamental rights. For this reason, and also because the regulatory classification under Measure 49 is not based on a suspect class, Measure 49 also survives rational basis scrutiny and has not violated Plaintiffs' equal protection rights. Therefore, we AFFIRM the district court.
In 2004, Oregon voters passed Measure 37, originally codified at Or. Rev. Stat. § 197.352 (2005), through the initiative process. Measure 37 required "state and local governments to compensate private property owners for the reduction in the fair market value of their real property that results from any land use regulations of those governmental entities that restrict the use of the subject properties." MacPherson v. Dep't of Admin. Servs., 130 P.3d 308, 312 (Or. 2006). Thus, for those who qualified, Section One of Measure 37 authorized a public entity to award "just compensation" to landowners if that entity enforced land use regulations that reduced the fair market value of the landowners' property, even if such reduction did not constitute a "taking." § 197.352(1).
Section Six provided the claimant with a statutory cause of action in state court for the recovery of that compensation, if the subject land use regulation continued in force for 180 days after claim was made. § 197.352(6). Sections Eight and Ten of the Act provided to the claimed-upon-government entity an ability to avoid payment of monetary compensation by granting that entity the authority to modify, remove, or not apply the subject land use regulation. § 197.352(4). If a public entity chose this option within 180 days of a property owner submitting a demand, no entitlement to monetary compensation arose under the statute. The second option, to exempt property from otherwise applicable regulations and allow a specified use, colloquially became known as a "Measure 37 waiver." Damman v. Bd. of Comm'rs of Yamhill Cnty., 250 P.3d 933, 935 (Or. App. 2011).*fn2 These Measure 37 waivers "allow[ed] the owner to use the property for a use permitted at the time the owner acquired the property." § 197.352(8).
Thousands of such claims were filed statewide, with Jackson County alone validating approximately 571 such claims. Most property owners in Oregon, who pursued a remedy under Measure 37, received Measure 37 waivers from their local governments, not monetary compensation. A Measure 37 waiver provided that the regulations at issue in the property owners' claims would not be applied to their property.
During the 2007 legislative session, the state legislature referred Measure 49 to the voters. This measure also passed and has been codified as the current Or. Rev. Stat. §§ 195.300 to 195.336 (2007). The Oregon Supreme Court examined the text and context of Measure 49 and found that it "conveys a clear intent to extinguish and replace the benefits and procedures that Measure 37 granted to landowners." Corey v. Dep't of Land Conservation & Dev., 184 P.3d 1109, 1113 (Or. 2008). The court went on to observe that "Measure 49 exten- sively amends [Measure 37] in a way that wholly supersedes the provisions of Measure 37 pertaining to monetary compensation for and waivers from the burdens of certain land use regulations under that earlier measure." Id.
Of greatest importance to this case, Measure 49 undertook to change the remedies available to property owners who had already begun the process of pursuing relief under Measure 37. Measure 49 replaced the process, the approval standards, and the extent of the relief (if any). Measure 49 also removed some of the benefits previously available, including monetary relief and waivers allowing commercial or industrial development. §§ 195.305, 195.310. Measure 49, however, exempted a property owner from pursuing compensation pursuant to the new provisions in Measure 49 if the property owner had "a common law vested right . . . to complete and continue the use described in the waiver." Compiled as a note after § 195.305. Measure 49 does not mandate any particular process for establishing vested rights. Claimants seeking a vested rights determination generally either applied for a local decision or sued for a declaratory judgment.
According to Oregon, whether a landowner has a vested right to complete development of property (even though the law has changed) turns on whether the landowner's "commencement of the construction . . . [has] been substantial, or substantial costs toward completion of the job . . . have been incurred." Clackamas Cnty. v. Holmes, 508 P.2d 190, 192 (Or. 1973)). In Holmes, the Oregon Supreme Court held that whether a landowner's right vests turns on the facts of each case, and the court set forth a list of factors for analyzing those facts. Id.
All of the Citizens for Constitutional Fairness et al. Plaintiffs and the Bowers et al. Plaintiffs (collectively Plaintiffs)*fn3 are owners of real property in the State of Oregon, who submitted written demands for compensation under Measure 37 and received timely waivers. None of these individual plaintiffs have recovered any monetary compensation, and, because of Measure ...