January 12, 2012

Measure 49 Measured Up


By Jamie Howsley

Winter 2012

In an opinion filed by the U.S. Ninth Circuit Court of Appeals on January 12, 2012, it upheld Measure 49 against challenges for a constitutional taking, due process rights violations, and violations of equal protection rights.

Voters passed Measure 49 in 2007 to reform 2004's voter-approved Measure 37. But Citizens for Constitutional Fairness and Bowers, et al., brought forward cases challenging the application of Measure 49 to waivers granted under Measure 37.

Effectively, Measure 49 eclipsed remedies available to parties who already began Measure 37 claims. Measure 49 did this by changing the process and standards in which relief could be granted. And it also removed some of the benefits of Measure 37, including monetary relief and waivers permitting industrial or commercial development. But Measure 49 exempted a property owner from the rigors of the Measure 49 process if the property owner had a vested right to continue the use described in the Measure 37 waiver. Unlike Washington, where a project vests at a technically complete application, Oregon turns on a case by case analysis to see whether a project's commencement of construction has been substantial or that substantial costs toward the completion of the project occurred. The concept of vesting appeared to be important to this Court in its decision.

In an earlier ruling reversing the U.S. District Court, the U.S. Ninth Circuit Court of Appeals stated that the waivers granted under Measure 37 were neither contracts nor court judgments protected by the Contracts Clause of the United States Constitution. This left challenges to Measure 49 for takings under the Fifth and Fourteenth Amendments to the U.S. Constitution, equal protection challenges under the Fourteenth Amendment, and substantive due process violations under the Fourteenth Amendment.

In disposing of the takings claims, the Court analyzed the question of whether the claims by the property owners vested under Measure 37, attempting to modify their rights, constituted a taking. It noted that the relevant inquiry to whether a project vested or not is the certainty of one's expectation in the property at interest. The Court emphatically concluded that Measure 37 had not vested for several reasons.

First, the parties did not obtain a final unreviewable judgment. The Court held that at most the plaintiffs had a cause of action, because the waiver granted under Measure 37 did not guarantee the right to use the property in a specific way.

Second, Measure 37 did provide the plaintiffs a statutory entitlement. A statutory entitlement could be achieved, but the bar is set high. One would have to pay consideration for a right or have some explicit promise. But that the Measure 37 rights were more akin to the benevolently bequeathed social security benefits.

Finally, the plaintiffs' claims were not ripe as they failed to exhaust their Measure 49 remedies. The Court reasoned that the claims were not ripe because there were alternative remedies under Measure 49 and that the plaintiffs failed to seek a determination of vested rights under a prior court decision.

In disposing of the substantive due process claims, the Court concluded that retroactive legislation does not violate due process because Measure 49 sought to remedy issues with Measure 37 and that the legislature and voters rationally passed Measure 49 to correct the costs associated with Measure 37.

Finally, the Court disposed of the equal protection claims by stating that it "…was not irrational for Oregon to attempt to provide partial remedies under Measure 49, even if these remedies did result in some differences of treatment."

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