Oregon Supreme Court: Measure 37 Rights Extinguished Under Measure 49: Common law vested rights remain; further court decisions needed

Landowners who have made claims under Oregon's Measure 37 should be aware of a significant new development in the law. On May 8, 2008, the Oregon Supreme Court ruled that, except in rare circumstances, Measure 49 extinguished rights under Measure 37, but leaves three key matters to future court decisions. Measure 37 claimants should consult with their legal advisors about the rights and remedies that remain.

Measure 37, passed in 2004, allows landowners to claim compensation from state or local government if land use or environmental regulations reduce their property value. Measure 49, passed in November 2007 with the intent of limiting some of the development allowed by Measure 37, overturned or changed many of Measure 37's provisions.

In the May 8, 2008, Corey v. Department of Land Conservation and Development case, the Oregon Supreme Court ruled that Measure 49 extinguished landowners' rights under Measure 37 except to the extent that a landowner had completed enough of the development approved under Measure 37 to have obtained a common law vested right to complete the development.

In the Corey case, the Supreme Court had originally planned to decide whether the Court of Appeals or the circuit court was the proper court for a landowner to challenge a decision by the state to deny part of a landowner's claim under Measure 37. After voters passed Measure 49, however, the state asked the Supreme Court to dismiss the Corey case, arguing that Measure 49 had replaced all of the landowners' rights under Measure 37 with the lesser rights available under Measure 49. For the most part, the Supreme Court agreed.

The Court's ruling means that the only landowners who may continue to develop property under Measure 37 are those who completed enough of the permitted development to require the government to allow full completion. A landowner who has not started to develop property under a Measure 37 waiver retains no rights under Measure 37.

The Court's opinion leaves important questions open for later decisions by the courts. First, the Court did not discuss how much development a landowner must have done to permit the landowner to complete a development.

Second, the Court chose not to decide whether the state constitution permits voters to extinguish rights granted by Measure 37. Whether, for example, Measure 49 improperly takes property without just compensation must be decided in another case.

Third, the Court did not explain whether landowners to whom courts had awarded monetary compensation (as opposed to waivers of land use laws) keep those awards after the passage of Measure 49.

Landowners who filed an application with the state under Measure 37 should consult with their legal advisors to determine whether they should (1) apply for permission to divide property into home sites under Measure 49; (2) challenge the loss of Measure 37 rights; or, (3) where a landowner has begun development, apply for permission to complete the development.