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Ballot Measure 7 Denied
Government Agencies in Oregon Not Constitutionally
Required to Compensate Property Owners for Reduced Property Values
Due to Regulation
by Dean
Phillips
[October 2003]
On October 4, 2002 the Oregon Supreme Court
unanimously held that Ballot Measure 7 - League of Oregon Cities
et al v. State of Oregon - is void in its entirety and therefore
does not become a part of the Oregon Constitution. The court found
that Measure 7 was adopted in violation of the "separate-vote"
requirement set out in Article XVII, section 1 of the Oregon Constitution.
If enacted into law, this constitutional amendment would, among
other things, have required government agencies to pay compensation
to property owners whose property value was reduced as a result
of a restrictive regulation. This change would have had a very chilling
effect on land use regulations.
Much of the decision deals with preliminary
issues of jurisdiction, standing, and ripeness.
Article XVII, section 1 provides, in part:
"When two or more amendments shall be submitted . . . to the
voters of this state at the same election, they shall be so submitted
that each amendment shall be voted on separately." It is not
always clear whether a particular ballot measure contains two or
more amendments.
The Court based its decision upon the relationship
between Article I, section 18 of the Oregon Constitution, which
Measure 7 expressly amends, and Article I, section 8, which states,
"No law shall be passed restraining the free expression of
opinion, or restricting the right to speak, write, or print freely
on any subject whatever." In 1988, the court interpreted Article
I, section 8 to forbid the enactment of a law directed in terms
against any subject of speech, writing, or printing, including pornography,
subject only to historical exceptions. Measure 7 states that it
does not require compensation due to a government regulation prohibiting
the use of property for certain purposes, including the sale of
pornography. The court concluded this exclusion from compensation
"changes-indeed limits-the scope of the rights currently guaranteed
by Article I, section 8." The court reasoned that Measure 7
operates to permit the state and local governments to choose not
to pay compensation to a property owner engaged in the sale of pornography,
thereby "placing a price tag upon the property owner's right
of free expression."
After finding that Measure 7 made two substantive
changes, it was a short step for the Courtto
conclude that the changes are not closely related. In the court's
words, "an expanded just-compensation requirement for restrictive
regulations that reduce the value of private Real Estate & Land Use is not
closely related to . . . creating an exception to the historical
requirement that laws cannot treat those engaged in expressive activity
'more restrictively' than those not engaged in expressive activity."
The Oregon Supreme Court's decision, at
least temporarily, halts near-successful efforts of property rights
activists, who were hopeful that compensation to property owners
affected by land use regulation would delay, if not stop implementation
of, most land use regulations. Crafting a ballot measure that will
withstand constitutional review may be more difficult than the drafters
of Measure 7 realized. While we can expect efforts to revive Measure
7 through a similar initiative effort, for the time being, government
agencies will not be required to compensate owners for restrictive
regulations under a constitutional mandate.
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Any questions about this
Advisory should be directed to:
Dean Phillips, Portland, (503) 778-5284, deanphillips@dwt.com
This Advisory is a publication of the
Real Estate, Land Use and Construction Group of Davis Wright Tremaine
LLP. Our purpose in publishing this Alert is to inform our clients
and friends of recent developments in real estate, land use and
construction law. It is not intended, nor should it be used, as
a substitute for specific legal advice as legal counsel may only
be given in response to inquiries regarding particular situations.
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