West Linn Corporate Park, L.L.C. v. City of West Linn

KISTLER, J.,

concurring in part and dissenting in part.

West Linn Corporate Park (WLCP) filed this action in state court, claiming that the City of West Linn (the city) took its property in violation of the state and federal constitutions when it required WLCP, as a condition of development, to pay for off-site improvements. The city removed the case to federal court, and the United States Court of Appeals for the Ninth Circuit certified three questions to this court. *102See ORS 28.200 (authorizing this court to accept certain certified questions). I agree with the majority’s answer to the first and third questions but would answer the Ninth Circuit’s second question differently. Specifically, I would decline to give an opinion whether requiring off-site improvements constitutes an exaction for the purposes of the Fifth Amendment. Not only does ORS 28.200 limit certified questions to issues of state law, but there is no need for this court to offer the Ninth Circuit our opinion on federal law.

In Williamson Planning Comm’n v. Hamilton Bank, 473 US 172, 105 S Ct 3108, 87 L Ed 2d 126 (1985), the Court held that a federal takings claim will not be ripe in two instances. First, a federal regulatory takings claim will “not [be] ripe until the government entity charged with implementing the regulations has reached a final decision regarding the application of the regulations to the property at issue.” Id. at 186; see MacDonald, Sommer & Frates v. Yolo County, 477 US 340, 351, 106 S Ct 2561, 91 L Ed 2d 285 (1986) (explaining that the resolution of a regulatory takings claim depends on first knowing “the extent of permitted development” on the property). Second, “if a State provides an adequate procedure for seeking just compensation, the property owner cannot claim a violation of the [Fifth Amendment] Just Compensation Clause until it has used the procedure and been denied just compensation.” Id. at 195.

In its opinion certifying the three questions to us, the Ninth Circuit explained that, in this case, only the second prong noted in Williamson-whether Oregon “provides an adequate procedure for seeking just compensation”-is at issue. West Linn Corporate Park v. City of West Linn, 534 F3d 1091, 1100 (9th Cir 2008). And the Ninth Circuit’s opinion suggests that the first two questions that it has certified are, in its view, necessary to resolve that issue. Id. For the reasons explained below, I would give a different answer to the court’s second question.

The Ninth Circuit’s second question asks whether requiring a property owner to pay for an off-site improvement as a condition of development constitutes an exaction. In explaining its question, the Ninth Circuit notes that the Oregon Court of Appeals held, in one decision, that such a *103requirement would constitute an exaction under the Fifth Amendment but, in a later decision, questioned that holding. See id. at 1102-04 (discussing Oregon Court of Appeals decisions). As both the majority and I understand the Ninth Circuit’s second question, it invites us to explain whether, in our view, requiring a developer to pay for off-site improvements constitutes an exaction under the Fifth Amendment. The majority accepts that invitation. I would decline it.

To the extent that the Ninth Circuit asks for our views on the Fifth Amendment, it asks for more than ORS 28.200 permits us to give. ORS 28.200 provides that we may answer certified questions submitted by other courts to resolve potentially determinative issues of Oregon law. See ORS 28.200 (authorizing the Oregon Supreme Court to accept certified questions regarding the “law of this state”); Western Helicopter Services v. Rogerson Aircraft, 311 Or 361, 365, 811 P2d 627 (1991) (explaining that the certified question must “concern Oregon law, rather than the law of some other jurisdiction”). As the terms of that statute make clear, we may answer only questions of Oregon, not federal, law.1

Nor does Williamson require us to give the Ninth Circuit our opinion on federal law. The ripeness concern raised in Williamson entailed a more limited inquiry. The substantive issue in Williamson was whether a government regulation that temporarily prevented a property owner from using its property constituted a taking in violation of the Fifth Amendment. 473 US at 185 (identifying that issue). The Court observed that the issue was an open one but declined to reach it because the issue was not ripe. Id. It explained that a state violated the Fifth Amendment only if it took property without providing an adequate procedure for obtaining just compensation. 473 US at 194-95. The Court noted that, under the applicable state law, a property owner claiming that restrictive zoning constituted a taking could bring an “inverse condemnation” claim in state court to recover just compensation. See id. at 196 (discussing Tennessee *104law). Without some showing that the state’s inverse condemnation procedure was unavailable or inadequate, the existence of that procedure was sufficient for the Court to hold that “until [the property owner] has utilized that procedure, its taking claim [in federal court] is premature.” Id. at 197.

In Williamson, the Court did not ask whether the Tennessee courts would recognize that a temporary deprivation constituted a taking before holding that the property owner’s failure to bring its claim in the Tennessee courts meant that its claim in federal court was not ripe. Rather, the Court held that the Fifth Amendment claim that the property owner filed in federal court was not ripe, without regard to whether the property owner would win or lose on the merits of its Fifth Amendment claim in state court. Conversely, when the only remedy available in state court for a temporary taking was a declaratory judgment, and not damages, the Court held that the available state procedures were not adequate to provide “just compensation.” First Lutheran Church v. Los Angeles County, 482 US 304, 312 and n 6, 107 S Ct 2378, 96 L Ed 2d 250 (1987); see Williamson, 473 US at 194 n 13 (suggesting that conclusion). The Court accordingly proceeded to reach the substantive federal question in First Lutheran — whether regulations that temporarily deprive a property owner of the use of its property violate the Fifth Amendment — that it had declined to reach in Williamson.

In my view, the only question raised by the second prong in Williamson is whether the procedures for obtaining just compensation in the Oregon courts are adequate. Williamson does not require a federal court to determine how the state court will rule on the merits of the landowner’s federal takings claim. Were the rule otherwise, the United States Supreme Court would have asked in Williamson whether the Tennessee courts would have recognized a temporary taking before holding that the property owner’s failure to bring its takings claim initially in the Tennessee courts meant that its federal takings claim was not ripe. The Court did not do so, and there is no need for us to tell the Ninth Circuit how we would rule on the substantive federal question in this case. It is or should be sufficient to say *105that a property owner who alleges that a local government requirement constitutes an exaction that violates the Fifth Amendment may bring that claim in the Oregon courts and receive all the compensation that the Fifth Amendment requires. Answering whether the property owner would win or lose on its substantive federal claim goes beyond what ORS 28.200 permits and Williamson requires.

There is a suggestion in the Ninth Circuit’s opinion that it views the scope of an “inverse condemnation claim” as presenting a question of state law, even when the source of law that gives rise to that claim is the Fifth Amendment. As a matter of Oregon law, however, there is no claim for “inverse condemnation” as such. Suess Builders v. City of Beaverton, 294 Or 254, 258 n 3, 656 P2d 306 (1982). Rather, the phrase “inverse condemnation” is

“only ‘the popular description of a cause of action [which we would now refer to as a claim for relief] against a government defendant to recover the value of property which has been taken in fact by the government defendant, even though no formal exercise of the power of eminent domain has been attempted by the taking agency.’ ”

Id. (quoting Thornburg v. Port of Portland, 233 Or 178, 180 n 1, 376 P2d 100 (1963)); accord United States v. Clarke, 445 US 253, 257, 100 S Ct 1127, 63 L Ed 2d 373 (1980). As the court explained in Suess Builders, a claim for relief that a government action unconstitutionally took a person’s property preceded the use of the phrase “inverse condemnation” as a “popular description” of that claim, 294 Or at 258 n 3, and the nature of the claim turns on the substantive law that gives rise to it, see First Lutheran, 482 US at 315 (explaining that form of relief “d[oes] not change the essential nature of the claim”). Describing a claim for relief as an inverse condemnation claim does not convert a claim that finds its source in the federal constitution into a state law claim on which we may offer an opinion pursuant to ORS 28.200. For that reason, I would not answer the Ninth Circuit’s second question as the majority does.2

*106The Ninth Circuit’s first question, by contrast, asks our opinion on an issue of state law. It asks whether a property owner bringing a takings claim for an alleged exaction in state court would first have to exhaust its administrative remedies. Citing the reasons typically advanced for requiring exhaustion of administrative remedies, the majority holds that exhaustion is required in state court as a prerequisite to bringing a takings claim. As the majority correctly clarifies, we would not require exhaustion for a Fifth Amendment takings claim brought pursuant to 42 USC section 1983. See Patsy v. Florida Board of Regents, 457 US 496, 516, 102 S Ct 2557, 73 L Ed 2d 172 (1982) (holding that courts may not require exhaustion for actions brought pursuant to section 1983).* *3 We would, however, require exhaustion for other claims alleging that an exaction constituted an unconstitutional taking.4 Some questions remain regarding how that state court exhaustion requirement would affect the issue whether WLCP’s federal takings claims are ripe for the purposes of Article III.5 However, those questions are issues of federal law for the Ninth Circuit.

*107For the reasons stated above, I concur in part and dissent in part from the majority’s answers to the certified questions.

Linder, J., joins in this concurring and dissenting opinion.

There may he instances in which answering certified questions of state law requires us to discuss federal law. See Klamath Irrigation District v. United States, 348 Or 15, 38 n 15, 227 P3d 1145 (2010). This is not one of them.

This case also raises the question of how, if at all, the second prong of Williamson applies when a property owner files its takings claim initially in state court, but the defendant removes the case to federal court. That question presents *106an issue of federal law for the federal courts, and the majority properly declines to address it.

Williamson is not to the contrary. The Court was careful to explain in Williamson, in discussing the first prong of its ripeness analysis, that the requirement that a property owner apply for a variance or take similar steps before bringing a federal takings claim in federal court was not an exhaustion requirement. 473 US at 192-93. That requirement was instead an aspect of ripeness and resulted from the peculiar nature of a regulatory takings claim; a federal court cannot tell whether a local government regulation goes too far and thus constitutes a taking until the local government has finally decided the extent to which development will be permitted. Id.

A landowner may bring a federal takings claim in state court in one of two ways. “[A] landowner is entitled to bring an action in inverse condemnation [for a Fifth Amendment taking] as a result of the self-executing character of the [Fifth Amendment] with respect to compensation.” First Lutheran, 482 US at 315-16 (internal quotation marks omitted). Alternatively, a landowner may bring a federal takings claim pursuant to section 1983. As the Court explained in Patsy, the prohibition against exhaustion derives from congressional intent in enacting section 1983. It does not extend to federal claims brought pursuant to some other claim for relief.

For instance, as long as any Oregon exhaustion requirement is reasonable, it is not clear how the presence or absence of a state court exhaustion requirement affects the question that the second prong of Williamson poses — the adequacy of the state judicial procedures for affording just compensation.