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Oregon Measure 37 Declared Unconstitutional

Shocking! Outrageous!

Reader Dave let me know that Oregon Measure 37 was overturned on Friday by Marion County Circuit Judge Mary James. This judge was appointed by Gov. Kulongoski. The full text of the decision is available online; the case is MacPherson v. Department of Administrative Services, Marion County Circuit Court No. 05C10444.

Oregon Measure 37 was passed by referendum with 60.39% of the vote in 2004. The fundamental idea behind the Measure is that land use regulations that restrict property owners are a kind of takings, and the Measure provides for financial compensation or a waiver of the regulations. The regulations would fully apply to the property after a transfer (although I'm fuzzy on how inheritance worked).

The plaintiffs in this case, opposed to Measure 37, reasoned that their decision to purchase their land was based on the land use regulations already in effect on their neighbor's land. Plaintiffs believe they are damaged by their neighbors seeking or obtaining regulation waivers (because their neighbors' uses affect their own land) or compensation (because it would be paid out of their taxes) under Measure 37.

The most amusing argument is from the nonprofit conservation agency 1000 Friends of Oregon, who argue that Measure 37 jeopardizes the continued existence of the group because it is no longer able to effectively lobby for land use plans.

These are the arguments I thought were interesting:

  • The only legitimate reduction in State plenary power is via Constitutional amendment, it cannot be done by the legislature or by simple referendum.

This argument rests on the belief that Measure 37 is a limitation on State power, rather than a means of compensation for takings. The opinion asserts (p. 11) that "There is no question that the land use regulations themselves are valid, and no claim that the regulations rise to the level of a taking, which would require compensation." As a principled defender of property rights, I disagree — land use regulations are prima facie a kind of taking.

The slippery slope argument that cousins to Measure 37 could be adopted that would undermine the DEQ regulations or public school compulsory attendance laws are very interesting. It would warm my cold libertarian heart to see both of those things go away, so I welcome the slippery slope. (I confess I cannot follow the unstated reasoning that would apply it to school attendance, but gee I sure like the feared outcome.)

  • "[T]he means chosen to determine the amount of compensation is not reasonably related to the [state] interest."

The argument is that compensation should be based on the reduction in property value at the time the regulation was passed, rather than based on the reduction in property value today.

No. That won't do. The "injury to the owners" is continuous from the time the regulation was imposed until the present, unless a property transfer had intervened (because the new buyer would factor in the effect of the regulation.) It's true that the injury started when the regulation was imposed, but that's irrelevant to compensation. The injury is not an acute pointlike event in the past, it's continuous to the present. Besides, the remedy most people receive under Measure 37 — waiver of the regulation — restores the property's full, present-day, unregulated value. The amount of monetary compensation (the alternative to waiver) should be commensurate with the value of the waiver.

Judge James's argument is that she disagrees with how the compensation is calculated, therefore it "has no rational relation to the aim of Measure 37" and therefore it's not "reasonably related to the [state] interest" so therefore it's unconstitutional. Give me a break!

  • Measure 37 violates the equal protection clause.

This is very badly argued. The reasoning is that Measure 37 divides people into two groups based on whether or not their purchase was before or after a land use regulation was imposed that affected their property. People whose ownership predates the regulation are given preferential treatment, and that's unconstitutional.

Baloney. The distinction between the two groups — pre-owners and post-owners — is not arbitrary and in fact it's directly relevant to the purpose of Measure 37. This very court opinion found it to be a valid class distinction (p. 13). Besides, Measure 37 is compatible with a strict reading of the Oregon Constitution (Article I §20) because the "privileges" or "immunities" are granted to all citizens "upon the same terms." Dates of ownership and regulations are nondiscriminatory.

I'm sympathetic to the argument that some people purchased land because of the regulations on their neighbors' use, because they believed those regulations protected the purpose for which they bought their own land. However, I don't think they deserve compensation. The value of their land was based on the fact that the State was violating the property rights of their neighbors. It is wrong to profit from State malfeasance.

Tiny Island