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Dodd v. Hood River County



In its second attempt[1] to settle a dispute between the County of Hood River; the State of Oregon; and Thomas and Doris Dodd, a couple who sought to build their retirement home in an area designated under state law as a Forest Use Zone, the Ninth Circuit held that 1) the doctrine of issue preclusion applied to issues addressed in proceedings before Oregon’s Land Use Board of Appeals (LUBA), and 2) Oregon state law prohibiting the building of residences in a Forest Use Zone did not constitute a taking under the Fifth and Fourteenth Amendments to the United States Constitution. In 1984, the Dodds bought property in Hood River County in an area designated as a Forest Use Zone under state law. At the time the Dodds bought their property, state law prohibited the construction of buildings within Forest Use Zones unless such buildings were “necessary and accessory” to forest use.[2] Six years after purchasing the property, the Dodds sought the requisite permits, comprehensive plan, and zoning changes that would allow them to build on their land. The Hood River County Planning Department, the Hood River County Planning Commission, and the Hood River Board of County Commissioners successively denied these permits.

The Dodds then appealed to LUBA, arguing that the denial of their building permits and zoning changes constituted a taking of their property under the Oregon State Constitution.[3] LUBA found that because the Dodds could derive profit from the property in the form of timber production, the building prohibition did not deny the Dodds a substantial beneficial use of their property and thus was not a taking under the Oregon Constitution. The Oregon Court of Appeals[4] and the Oregon Supreme Court[5] affirmed.

While their appeal to the Oregon Supreme Court was pending, the Dodds filed this action in federal district court, claiming that the state’s land use laws as applied to their parcel constituted a taking of their property under the Fifth and Fourteenth amendments to the United States Constitution. The district court dismissed the Dodds’ claim as unripe, and they appealed to the Ninth Circuit. Because the Oregon State Supreme Court had in the interim decided the Dodds’ case, the Ninth Circuit remanded to the district court, finding that the federal issue was now ripe for federal judicial consideration. In its remand instructions, the appellate court instructed the district court to determine whether the Dodds’ federal takings claim required a broader inquiry than that required under the Oregon constitution; if so, the resolution of the Dodds’ state law takings claim in the state court litigation would not preclude litigation of a federal takings claim.

On remand, the district court found that the requisite inquiries under both the state and federal takings provisions were not fundamentally distinct. Because the Dodds had previously litigated the same factual issue in the state proceeding as would be litigated in the federal takings action, i.e., the value of their property under the building prohibition, they were barred under the doctrine of issue preclusion from litigating that same issue in federal court. On appeal, the Ninth Circuit held that the district court had properly applied the doctrine of issue preclusion to LUBA’s resolution of whether a categorical taking had occurred. Applying Oregon state law regarding issue preclusion, the Ninth Circuit found that 1) the issue in the state and federal proceedings, i.e., the value of the property under the regulation, was identical; 2) this issue was actually litigated before LUBA and was essential to LUBA’s conclusion; 3) the LUBA proceedings provided a full and fair opportunity to be heard in which the Dodds had both the opportunity and incentive to litigate the relevant issues; and 4) LUBA proceedings are of the type to which state courts give preclusive effect, because Oregon denies preclusive effect to administrative proceedings only in the absence of safeguards that were present in the LUBA proceedings. Accordingly, the Ninth Circuit held that the Dodds were properly barred from relitigating the issue of a categorical taking in the federal court action because the issue had been resolved in the state LUBA proceeding.

However, the Ninth Circuit noted that despite the district court’s finding to the contrary, takings analysis under federal precedent is distinct from takings analysis under Oregon precedent. Unlike the Oregon Supreme Court’s approach, which analyzes a takings claim under an “all-or-nothing economics test,”[6] federal takings analysis recognizes that a taking may occur even when an owner does not lose all economically beneficial use of her land. Such an analysis requires a balancing of factors, including the legitimacy of the state interest forwarded by the regulation, the economic impact of the regulation on the property owner, and the extent to which the regulation interferes with distinct investment-backed expectations of the property owner.

The court then proceeded to assert its own authority to resolve the federal takings issue. The court noted that a remand to the district court was unnecessary under the unique situation presented by this case: no additional fact-finding was necessary, the proper resolution of the issues was beyond doubt, and the lengthy history of litigation in state and federal courts weighed against further dedication of judicial resources to resolution of the Dodds’ claims.

In assessing the Dodds’ federal takings claim, the court held that the Oregon state law prohibiting building in Forest Use Zones advanced a legitimate government interest “in promoting commercial timber practice by limiting dwellings that could adversely affect forest use and practices.”[7] The court found this interest analogous to those recognized as legitimate by the United States Supreme Court in Nolan v. California Coastal Council[8] and Agins v. Tiburon.[9]

Finally, the court assessed what, if any, investment-backed expectations would be derogated by denial of the Dodds’ building permits. The court held that the Dodds could not have reasonably expected to build their retirement home on the property, because state law prohibited such construction at the time of purchase. Furthermore, the court noted that the Dodds “have pursued their alleged expectation to build with something less than speed or vigor,”[10] having waited six years from the time of purchase to apply for the permits, and having spent the ensuing time exhaustively litigating their claims in administrative, state, and federal courts. The court therefore concluded that the application of Oregon state law prohibiting construction within a Forest Use Zone to the Dodds’ property did not constitute an impermissible taking under the United States Constitution.

[1] For the first attempt, see Dodd v. Hood River County, 59 F.3d 852 (9th Cir. 1995).

[2] Dodd v. Hood River County, 136 F.3d 1219, 1223 (quoting State Land Conservation & Dev. Comm’n Goal 4, Or. Admin. R. 660-015-0000(4) (1983)).

[3] SeeOr. Const. art. I, § 18.

[4] Dodd v. Hood River County, 836 P.2d 1373 (Or. Ct. App.), aff’d, 855 P.2d 608 (Or. 1992).

[5] Dodd v. Hood River County, 855 P.2d 608 (Or. 1992).

[6] Dodd v. Hood River County, 136 F.3d 1219, 1228 (citing Dodd v. Hood River County, 855 P.2d at 615).

[7] Id. at 1229-30.

[8] 483 U.S. 825 (1987) (scenic values, landmarks, and public safety).

[9] 447 U.S. 255 (1980) (protection against air, noise and water pollution, traffic, and other consequences of urban sprawl).

[10] 136 F.3d at 1230.

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