In an inverse-condemnation case that will almost assuredly be appealed to the Oregon Supreme Court, the court of appeals recently reversed a Linn County Circuit Court decision to award landowners almost $4 million against the Oregon Department of Transportation (“ODOT”). Hall v. ODOT, No. A146386 (Oct. 3, 2012). The plaintiffs own a 25-acre parcel of real property along Interstate 5 in Linn County. The only access to the property is by way of an easement that connects to an overpass that is part of a highway interchange. Some years back, ODOT began making plans to potentially close the interchange because of safety concerns, which would render the plaintiffs’ property landlocked. According to the plaintiffs, ODOT was very open about its intent and even stated it in public meetings. Also according to the plaintiffs, ODOT’s ultimate goal in landlocking the property was to purchase it through condemnation.
As normally happens with these kinds of big infrastructure planning processes, time continued to pass without a resolution as to what would happen to the interchange or when. This made it difficult or impossible to develop or sell the property, as the plaintiffs had hoped to do. The plaintiffs finally became frustrated enough that they filed an action in circuit court for inverse condemnation. Although the plaintiffs won in circuit court, their win was subsequently reversed by the court of appeals. The court of appeals cited established case law to the effect that one proves a taking by inverse condemnation by demonstrating that the governmental defendant substantially interfered with the use and enjoyment of the property. So far so good. But when the interference is legislative or quasi-legislative, as was the case here, then a taking does not occur unless the enactment deprives the property owner of all substantial beneficial use of its property. In this case, the jury had determined that some economically feasible use of the property was still available to the plaintiffs. Therefore, the court of appeals reversed the award of damages.
Although this case appears to not have broken any new ground with respect to inverse-condemnation law, it is an interesting read because the plaintiffs relied heavily in circuit court on what they described as ODOT’s vendetta against one of the property owners as a motivating factor in ODOT’s actions. Although the court of appeals was able to dismantle the relevance of that argument by demonstrating that the plaintiffs couldn’t win with it—regardless of whether there was or was not actually such a vendetta—the weary land use practitioner so rarely gets anything other than dry facts and policy lectures in land use and related property cases that the specter of malfeasance now and again is a welcome relief.