Muggery or skullduggery? How Oregon takes your money without “taking” it

Author: Brian T. Hodges

Imagine, if you will, a criminal defendant on trial for robbery.  In his defense, the mugger argues that when he pointed a pistol at Joe citizen’s head and demanded “your money or your life, ” he wasn’t stealing.  No, stealing is such an ugly word.  The mugger was simply allowing Joe citizen to make a payment on a newly imposed obligation to provide financial support.  Absurd?  Yes.  But sadly, in West Linn Corporate Park v. City of West Linn, Oregon’s Supreme Court seems to give credence to the mugger’s defense – at least when it comes to a local government demand that landowners pay up in exchange for permit approvals.

In West Linn, the city refused to issue land use permits unless property owners paid to make unrelated off-site improvements to public infrastructure.  For over a decade, Oregon’s appellate courts held that the Takings Clause of Oregon’s Constitution protected property owners from being forced to pay for unrelated public projects.  Indeed, almost 25 years ago, in Nollan v. California Coastal Commission, 483 U.S. 825 (1987), the United States Supreme Court recognized that unless a permit condition is required to mitigate for some impact of the proposal, the government’s demand that a property owner give up some unrelated benefit is an “out and out plan of extortion.” 

The Oregon Supreme Court, however, thinks otherwise.  In its view, a government demand that a landowner pay for improvements to the public infrastructure does not actually take a person’s money.  Instead, the Court explained that the permit condition is simply a new obligation that the landowner put his or her money to a particular use to “construct public improvements that previously did not exist.”  I conclude, without comment, by quoting Oregon’s Takings Clause: “Private property shall not be taken for public use, nor the particular services of any man be demanded, without just compensation.”

Professor Kanner posted some interesting thoughts about the case at Gideon's Trumpet.