Posted by: Patricia Salkin | August 13, 2010

Ninth Circuit Court of Appeals Holds that Measure 37 Waivers in Oregon Do Not Constitute Contracts

The United State Court of Appeals for the 9th Circuit reversed a lower federal court’s decision holding that waivers in Jackson County, Oregon which allowed governments to choose between paying compensation to property owners for loss of fair market value or waiving enforcement of land use regulations, were valid contracts.  

Plaintiffs filed a claim under the Measure 37 waiver against Jackson County when a zoning restriction imposed on their property after purchase reduced its fair market value by $30 million.  The county issued an order validating plaintiff’s claim and waiving the specific zoning regulations of their property, but then rescinded the waiver after Measure 49 took effect and nullified Measure 37’s compensation provisions. 

United States District Judge Owen M. Panner held the Measure 37 waivers were valid and enforceable contracts because both the wording and parties conduct showed mutual intent that the waivers were binding; plaintiffs’ agreement to drop claims for monetary compensation in exchange for the county’s waiver of zoning regulations demonstrated mutual consideration; and the county’s refusal to honor the waiver substantially impaired this agreement.  Judge Panner, in rejecting the statutory construction of Measure 49’s effects which violated the Contracts Clause by eliminating plaintiffs’ contractual rights and going beyond its legitimate purpose, concluded that Measure 49 did not apply to Measure 37 waivers.  

He also ruled Measure 37 was a final quasi-judicial order because Jackson County’s decision to grant or deny a waiver was limited by the waiver’s pre-existing requirements rather than left to the county’s discretion, and the Board of Commissioners was required to apply the waiver’s pre-existing standards to each property owner’s particular circumstances.  Since neither party sought judicial review of the Measure 37 waivers, Measure 49 could not overrule county’s quasi-judicial decision without violating separation of powers.  

On appeal, the 9th Circuit disagreed with the lower court on both counts, holding the Measure 37 waivers themselves were not evidence of a contract because there was no offer, acceptance or consideration, and they did not constitute quasi-judicial decisions because they were administrative decisions. The statement in the waiver disavowing any promise to the property owners that they will “eventually be able to put the property to any particular use” was evidence no contract was formed, thus failing to satisfy a claim under the Contracts Clause.   Since the county was acting in an administrative role when deciding whether to grant or deny the waivers, they did not act in a quasi-judicial rule and the waivers were not court judgments. 

Citizens for Constitutional Fairness v Jackson County, 2010 WL 2836106 (9th Cir. (OR) 7/20/2010). 

The Ninth Circuit’s Memorandum Can be Accessed at: http://www.ca9.uscourts.gov/memoranda/view_subpage.php?pk_id=0000003848


Responses

  1. I am so thankful for the ruling. I live in a floodway where all our rights were waived. We did not receive compensation for the violations that took place and we face floodding every year til the property grows it berry bushes back. We have been denied all rights – we went to LUBA and lost while there in the internet Jackson County Posted wetland violations on the subject property, but did not disclose it to us. We can only assume LUBA knew about them. LUBA affirmed the land use and basically took away all the money we spent during three years of appeals. We have seen the same property owner spray blue chemicals into the wetlands and animals come up and die on our property. We live within 15 feet of Wards Creek. We bought our house more than 30 years ago and never realized how dangerous it was to live so close to one. We were the victims!


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