Measure 37 meets the U.S. Constitution in a case decided by the Oregon Court of Appeals last week. In Corey v. Department of Land Conservation and Development, the court addressed a limited question: did it have jurisdiction to review an agency's refusal to waive certain land use regulations in response to a Measure 37 claim? But the answer to the question required a detour into the law of governmentally-created property interests protected by the Due Process Clause of the Fourteenth Amendment.
Measure 37, codified at ORS 197.352, requires, under defined circumstances, that the government either compensate property owners for loss of value caused by land use regulations, or waive those regulations. In response to the Corey's Measure 37 claim, the DLCD waived certain regulations but concluded that it was not required to waive others.
Corey sought review in the Court of Appeals of the refusal to waive. According to the court, it has jurisdiction if the DLCD proceeding was a contested case under the Administrative Procedures Act. And the matter was a contested case if, for example, the claimant had a protected property interest would could be taken by the government only after notice and a hearing. After reviewing U.S. Supreme Court precedent on constitutionally-protected interests, the court concluded that the DLCD created an entitlement to benefits when it accepted the Measure 37 claim, and that Corey was entitled to notice and a meaningful hearing before DLCD could refuse to waive any of the regulations. Accordingly, the Court of Appeals had jurisdiction to review the matter as a contested case.