PDXLAWG On M37: BlueOregon: Measure 37 thrown out

I do love these shot gun advisory opinions as they invite the appeals court to opine all over the analytical map too. One of the arguments ought to hit the mark, lord knows the shell was full and the target was somewhere in sight.

http://www.landusewatch.com/m37opinion.pdf

The final word will come from the Supreme Court, but a Marion County judge has thrown out Measure 37:
[ BlueOregon: Breaking News: Measure 37 thrown out ]

The compensation component would not have even been integral to anything (or even included in the measure) had the measure merely applied new standards that were applicable to every land owner, in compliance with the Equal Privileges and Immunities clause. Thus the power to simply change the entire set of land use laws was exerted in a lesser-included manner for the benefit of a class. I sure hope the case does not rest upon the proposition that neither the legislature nor an initiative could not simply repeal SB 100, and later amendments, without regard to the notion of compensation in lieu of enforcement?

The remedy could also be to grant to all people the same benefits accorded to one class. Note that in the Same Sex Marriage battles that the *remedy* requested was not the invalidation the marriage statutes but the extension of the same privileges to others. That should ring a bell here.

The issues as to Suspension of Laws and the Sovereign Immunity were too entangled with the Equal Privileges and Immunities clause to warrant discussion.

On economics, a much more valid argument is that the plaintiffs' property would be valued higher if they were able to put their land to a higher and better use, stripped of restrictions, just as were the special class of folks that gave rise to the Equal Privileges and Immunities clause violation. The restrictions complained of by the folks availing themselves of M37 development potential was that they were harmed, and thus had standing. It would thus be absurd to say that the neighbors would suffer loss if they themselves had the development potential of their land restored, in like manner to the M37 claimants. The farm bureau (or any NIMBY) could obtain standing, and effectively provide an opportunity for the court to issue an advisory opinion (in this opinion but contrary to appeals court cases). I would say that the only plausible argument on property value is that it would be enhanced, not reduced, by virtue of universal restoration of development potential -- for which either the legislature or the initiative process can accomplish, without even touching on the Suspension of Laws issue at all.

Additionally, the potential development of the plaintiff's land, were there no Equal Privileges and Immunities clause violation, could actually be enhanced by reason of a later argument that the area had been committed to urban level development. A landowner, or farmer, could himself possibly obtain a judicially ordered opportunity to build, against the desires of a local government body that opposed a project. They could do this by not challenging M37, but by encouraging development by M37 covered neighbors. A plaintiff that had recently purchased property adjoining a M37 claimant could have actually sided, for adversarial alignment, with the M37 claimant to seek a declaratory judgment seeking the assurance that the new law was valid, so that they could then plan for development alongside their M37-claimant neighbor to develop, but not seek compensation. The exclusion of such other issues and claimants is the kind of harm intended to be prevented by prohibiting advisory opinions.

By The Way --
If the remedy stands, for the mere violation of Equal Privileges and Immunities clause, then it could be used likewise to help do away with provisions of the law granting tier-one status to one class of Oregonians by the mere date upon which someone first offered labor services to a PERS covered public employer. Should I call this the law of unintended consequences?

Where is the neighbor that is demanding that M37 be upheld, and where are the gay folks that are asking to void the marriage statutes entirely, and where are the non-PERS folks that are demanding an 8 percent return on their savings; all in the interest of vindicating the lowly Equal Privileges and Immunities clause. The State v. Clark case not only discusses bringing oneself within the class but also the notion of extending to all a privilege or immunity accorded to one class in violation of the Equal Privileges and Immunities clause.

I see the making of an opportunity to offer an amicus in the interest of the court so as to harmonize the application of the Equal Privileges and Immunities clause across the many varied instances in which it could be invoked or has already resulted in case law. My interest is of course the eventual argument, among others, that certain privileges and immunities that are granted to incorporated entities, via statutes, must be applied relative to their dealings with mere people, in the interest of mutuality, people who are by definition not able to bring themselves within the class of incorporated entities for purposes of, for example, obtaining student loans or certain home loans and for sole proprietors to obtain capital on equally favorable terns to that of large-caps from the Oregon Investment Council.

UPDATE: Other blog comments:

Word is out that Judge Mary Merten James of the Marion County Circuit Court ruled today that Measure 37 violates the Oregon constitution.
[ Isaac Laquedem: Measure 37 unconstitutional, says Marion County Circuit Court ]

And

Although she did not say so in her opinion, Judge James would clearly have found that people buy property in reliance on the zoning. She found that some of the plaintiffs had bought their land in reliance on how their neighbors' land was zoned, and if the question had been presented to her she would have had to find that Measure 37 claimants bought their land in reliance on the zoning also.
[ Isaac Laquedem: How to fix Measure 37 ]

My own further comment:

The parties to a real estate deal could, if they wish, bargain to allocate the gain or loss from future changes in zoning. Developers -- hopeful but uncertain developers -- can accomplish this via the use of an option to purchase followed by efforts to obtain changes in the allowable uses that may be needed to move forward with a project. The mere fact that typical transactions involve the transfer of the risks (good or bad, like fire insurance etc.) at the same time as the transfer of possession, without reference to future changes in allowable uses, does not mean that it was not within the scope of bargainable issues. Or, to state it another way, it would not be against public policy to bargain over future changes in allowable uses. That bargain between two private parties implicitly includes such a bargain over future land use even if the bargain merely assumes (by default as an unstated proposition) that all impacts of changes in the general law apply to the new owner.

Imagine an alternative fact situation. Could a seller that could have benefited from a M37 claim had he not sold the property demand that the party to whom he sold the property pay him a calculated amount that matches his financial loss by reason of selling the property? Suppose the parties had included some catchall provision that should the buyer or the seller (either of them) were to be able to secure a right to put the land to a higher and better use that they shall cooperate (amongst themselves) for the mutual benefit of both of them by agreeing to seek to avail themselves of that opportunity. Would the Contract Clause, both state and federal, be triggered? All transfers via a bargain, other than by inheritance, would thus form a class that represents, completely and precisely, the exact flip-side of the identified beneficiaries specified in M37.

The class of folks challenging M37, in the instant case, is too incomplete to represent the full spectrum of issues that could be raised. Thus, the judicial prohibition on issuance of advisory opinions is invoked in full colors. The buyers of the land could simply say "ME TOO"; I want to develop and it would be a violation of the contracts clause to deny me the fee simple rights which I obtained from the seller via a contract. It is a fancy trick to dismiss the notion of contract clause claims via the notion that the buyer has knowledge of land uses at the time of purchase, as the test of knowledge is only relevant as between the two private contracting parties. The allowable uses is just a fact issue (or law issue, whatever) that is a point of interest to resolve a battle between the two private parties.

New fact situation: The original SB 100 and ORS chapter 197 are fully revoked, thus dispensing entirely of the notion of the particular equal privileges and immunities clause challenge in the instant case. This would restore individual freedoms that accompany land ownership, for all, to put land to a higher and better use. But what of the seller who sold for a lower price because they believed these rights would never be restored? Could they today demand that the buyers (or current property holders) cough up more money than was in the original documents of sale and transfer? Could the seller's heirs demand the same, based on the contract of sale? The point here is to isolate out the contract right and bargains over changes in land uses from the full set of issues raised in the recent court opinion that result from particular anomalies of M37.

It is rather odd that a judge would try to alter the relationship between the class of persons comprised of all private citizens vis-a-vis the government via the surreptitious route of resolving the existence of disparate rights among private parties.

I hope you like puzzles like that above. Just for kicks, my undergrad degree is in ag econ and I submitted a draft paper to Ed Sullivan for Land Use Seminar class on Urban Reserves some 15 years ago, or so. Ed thought my thoughts were "Too Folksy," which is good characterization, as I focused significantly on the efforts of a Damascus area farmer, Mas Fujimoto, that was trying to develop in both Damascus and Happy Valley, and where I concluded that he was just a little ahead of his time. The restrictions on development are just temporary restrictions, then as now. This is implicit in the notion of controlled and orderly development, which does not inherently demand or justify fundamentally altering the nature of private property to purge forever the property right to develop from the bundle of rights typically associated with land, where it is the government restrictions that must forever be tested to discover a valid public purpose.

I would argue that the proper remedy for the violation of equal privileges and immunities clause, here, from a judicial perspective, would be to grant to all land owners the same rights accorded to the specific class noted in M37. The legislature would surely be at liberty to call a special session and then draft a whole new set of laws that are generally applicable and that must continue to find justification as a valid interference with the right to develop that comes with all land. The proffered justification, by the judge, for imposing via the order of a greater restriction on the M37 beneficiaries than those imposed via the legislative process, is that the legislative branch did not have have authority to remove restrictions, even if removed generally for all if the means were via an ad hoc choice between waiver or payment. The payment part can be sculpted out quite independently of whether it is a M37 class or a measure that is generally applicable to all in like manner.