Here's the amici brief on behalf of Central Oregon Builders Association, Oregonians in Action, and Owners' Counsel of America in a case being considered by the Oregon Supreme Court, State of Oregon v. Alderwoods (Oregon), Inc., No. S062766.
In an eminent domain action to improve Highway 99W in Tigard, Oregon, the DOT condemned Alderwoods' two driveways, which had been in place since the 1930's, which provided direct access to and from the property to the highway (approximate location red arrow). After it filed the action, however, the DOT purported to administratively eliminate the driveways because they were too close to the 99W/217 intersection to be safe. The trial court agreed with the DOT that the post-condemnation elimination meant that Alderwoods did not have a property interest in the two direct access driveways. The court prohibited Alderwoods from presenting evidence to the jury of the loss of value to its remaining property due to the loss of its two Highway 99W driveways.
As we posted here ("Oregon App: Your 'Common Law' Right To Access A Street Can Be Regulated Away, So You're Owed Nothing If It's Taken"), a majority of the twelve Oregon Court of Appeals judges could not reach a consensus, and affirmed by an equally-divided court. Five judges concurred in the judgment and would have held that Alderwoods possessed a property interest in direct Highway 99W access, but that the DOT's post-complaint administrative action eliminated that interest under regulatory takings principles. One judge concluded that Oregon's common law right of "access" to a highway from an adjacent property is only a right of indirect access, and because the DOT's elimination of the driveways did not totally landlock the property because drivers could still enter and exit to the highway by a driveway on Warner Avenue (blue arrow), noting was taken from Alderwoods.
The photo below is the property in its "after" condition, showing the solid curb/sidewalk on Highway 99W, and the remaining ingress/egress on Warner.
Six judges dissented, and concluded that Alderwoods possessed a right of direct access that was taken by the DOT, and that the jury should have been allowed to consider its evidence of loss of value.
Here's the Summary of Argument from the OCA amici brief:
For more than half a century, this Court has recognized that property owners enjoy a right of direct access to abutting highways that “cannot be extinguished without compensation.” Highway Com. v. Burk, 200 Or 211, 228, 265 P2d 783 (1954). Under both the state and federal constitutions, such established property interests cannot simply be regulated out of existence, especially by a condemning agency during the course of its eminent domain lawsuit to take the property.
This case poses the question whether Defendant Alderwoods (Oregon), Inc., (“Alderwoods”) possessed compensable property interests in two points of direct access from Alderwoods’ property to Highway 99W (the “access points”), which undisputed evidence in the record shows had existed lawfully since at least 1936. If Alderwoods did possess compensable property interests in those two access points, then defendant was entitled to have a jury determine whether the taking of those two access points diminished the value of defendant’s property.
The Court of Appeals, sitting en banc, failed to reach agreement on that question and affirmed by an equally divided court. ODOT v. Alderwoods (Oregon), Inc., 265 Or App 572, 336 P3d 1047 (2014). The court produced two concurring opinions which would have held that Alderwoods did not have compensable property interests in the two access points. Id. at 574 (Armstrong, J., concurring); id. at 584 (Sercombe, J., concurring). The concurring judges could not agree on a supporting rationale, however. Id.
The rationales set out in the Court of Appeals’ concurring opinions do not withstand scrutiny. Judge Armstrong concluded that ODOT’s decision to administratively close the two access points—made only after ODOT initiated condemnation proceedings and took possession of the property—deprived Alderwoods of its preexisting and long-recognized access rights, but without entitling Alderwoods to any compensation. See id. at 582-83 (Armstrong, J., concurring). In other words, Judge Armstrong held that, although Alderwoods may have had compensable property interests in the two access points at the time that ODOT initiated condemnation proceedings and took possession of the property, Alderwoods lost those interests when ODOT—permissibly, in Judge Armstrong’s view—regulated them out of existence. Id.
Judge Armstrong’s concurrence runs afoul of constitutional law in at least three respects. First, Judge Armstrong’s opinion ultimately holds that preexisting property rights permissibly may be extinguished administratively without payment of just compensation; in other words, Judge Armstrong’s conclusion approves the taking of private property by legislative fiat without just compensation. Cf. Koontz v. St. Johns River Water Mgmt. Dist., __ US __, 133 S Ct 2586, 2598-99, 186 L Ed 2d 697 (2013) (government commits a “per se taking” if it “seize[s]” an existing property interest); cf. also Thornburg v. Port of Portland, 233 Or 178, 185, 376 P2d 100 (1962) (Article I, section 18, of the Oregon Constitution requires compensation when government action extinguishes preexisting property interest).
Second, in holding that Alderwoods lost its property rights after ODOT had initiated condemnation proceedings and taken possession of the property, Judge Armstrong’s concurrence violates the principle of eminent domain law that condemned property is valued at the time that the condemner initiates a condemnation action or takes possession of the property, whichever occurs first. State of Oregon v. Lundberg, 312 Or 568, 574, 574 n 6, 825 P2d 641 (1992). Third, and finally, in holding that ODOT permissibly could administratively extinguish Alderwoods’ property interests in the two access points after initiating condemnation proceedings and taking possession of the property, Judge Armstrong’s concurrence violates the federal constitutional principle prohibiting a condemner from actively diminishing the value of property after it has committed to the condemnation. See United States v. Virginia Elec. Co., 365 US 624, 636, 81 S Ct 784, 5 L Ed 2d 838 (1961) (articulating that principle).
Judge Sercombe’s concurring opinion also fails to withstand scrutiny. Judge Sercombe starts from the incorrect premise that property owners possess only a “generalized” right of access to public highways, rather than possessing a direct right of access when the property directly abuts a public highway. See Alderwoods, 265 Or App at 609 (Wollheim, J., dissenting) (explaining that “Judge Sercombe’s position is contradicted by” the case law). From that flawed premise, Judge Sercombe concludes that Alderwoods has no compensable property interests in the two access points providing direct access to Highway 99W, because defendant also has indirect access to Highway 99W by way of SW Warner Avenue. Because Alderwoods had a long-recognized property interest in the ability to directly access Highway 99W, however, Judge Sercombe’s concurrence also sanctions the unconstitutional taking of private property without compensation.
The fractured analyses in the Court of Appeals’ concurring opinions fail to recognize long-established principles of Oregon and federal constitutional law and, if accepted by this Court, will jeopardize the rights of every property owner in Oregon. By contrast, Judge Wollheim and five other judges would have held that Alderwoods possessed a recognized and established property interest in direct access to Highway 99W, and that the jury should be permitted to determine the extent to which the loss of that property interest diminished the value of Alderwoods’ remaining property. Alderwoods, 265 Or App at 592 (Wollheim, J., dissenting).
Amici respectfully submit that Judge Wollheim’s dissenting opinion sets out the correct analysis. This Court should adopt the reasoning of the dissenting opinion, reverse the trial court’s judgment, and remand the case to allow the jury to consider evidence of the impact of the loss of Alderwoods’ two access points on the value of Alderwoods’ remaining property.
At least one other amicus brief has been filed, and we'll post that shortly along with the merits brief of the property owner. Definitely a case to watch.