Through a Glass Darkly: Measuring Loss Under ... - Land Use Law

MEASURING LOSS UNDER MEASURE 37 565
Valuation is an issue of particular ambiguity—and, hence, controversy—
within Measure 37. The Measure says very little on the subject
(aside from creating a statutory right to “just compensation” if the fair
market value of land is devalued by a land use regulation). 9 Its discussion
of valuation is largely confined to the following statement found in
subsection (2):
Just compensation shall be equal to the reduction in the fair market value of the
affected property interest resulting from enactment or enforcement of the land use
regulation as of the date the owner makes written demand for compensation under
this section. 10
In eminent domain law the words “just compensation” mean the price
a willing buyer would pay for land from a willing seller with both parties
having knowledge of the marketplace. 11 Measure 37, however, uses
this eminent domain term to establish the obligation of a public body to
pay for regulation, even though that public body is not seeking to acquire
property for public use, as it would be under eminent domain law. 12
Indeed, the appearance of these words in the ballot title and caption may
well have been a significant reason for the passage of the Measure.
However, it should not be assumed that the valuation methodology utilized
in eminent domain law can be transposed to Measure 37 claims.
Nor should it be assumed that the valuation methodologies ought to be
analogous: the correct valuation methodology for Measure 37 claims is
a normative question, which calls for an in-depth analysis of the text,
context, and legislative history of the measure, as well as a critical
review of the economic arguments.
This article is divided into six parts. Following this introduction,
Section II discusses the structure of the Measure itself and current
practice in administering Measure 37 claims. Section III illustrates the
importance of assessing the exact quantification of the alleged loss in
each Measure 37 claim, prior to any decision whether to pay or waive
on behalf of the local governments. Section IV provides a review and
critical analysis of proposed valuation methods. Section V assesses
each of the valuation methodologies against the text, context, and legislative
history of Measure 37 to determine its legal validity. Finally,
the best of these valuation methods is selected and explained in terms
of the Measure.
9. OR. REV. STAT. § 197.352(1) (2005).
10. Id. § 197.352(2).
11. See, e.g., State v. Lundberg, 825 P.2d 641, 644–45 (Or. 1992).
12. See, e.g., OR. REV. STAT. § 197.352(1)–(2).
ABA-TUL-07-0701-Sullivan.indd 565
9/18/07 10:43:37 AM