Beaver Creek case decided by State Supreme Court

By Joel Gallob Of the News-Times

A case involving the conflicting interests of eagles and timberland owners, which began in Lincoln County in 1996, was decided two weeks ago by the Oregon State Supreme Court.

In it, the state's highest court delivered a fairly conclusive answer - on the level of state law, at least - to one of the more vexing questions in environmental law. That question is: can a landowner who loses all economic value for a portion (but not all) of her property win a claim against the state by alleging that part of her property has been "taken" by the environmental regulation?

In Oregon, at least, the answer to that question is now "no."

In 1996, Coast Range Conifers President Sarah Leiman acquired a 40-acre parcel of timber in a land exchange with the U.S. Forest Service. On May 1, 1998, an employee of the Oregon Department of Fish and Wildlife saw two adult bald eagles at a nest in the tract, and a month later, a U.S. Fish and Wildlife Service employee observed the nest from a helicopter. The site with the nest was located near Beaver Creek in southern Lincoln County, inland of Ona Beach State Park.

Bald eagles are listed as a threatened species under the federal Endangered Species Act, and state regulations also protect the animals. They require that a written plan be filed with the State Forester before a person can perform logging activities that might damage an eagle nest site or render it unusable to the eagles. The state Department of Forestry allowed Coast Range Conifers to log within 300 feet of the nesting site. Leiman asked to log within 330 feet of that site, but State Forestry rejected the plan, and recommended a 400-foot buffer of standing trees around the nest, some of it old growth forest.

Coast Range performed the logging as permitted, and by September 1998, had logged 31 of its 40 acres by Beaver Creek. One month later, after the end of the bald eagle nesting season, the company submitted a new plan to log the remaining nine acres. The Forestry Department rejected it, because the area was an active resource site and the bald eagles were likely to use the site again in the future.

Coast Range Conifers sued the Oregon Forestry Board, claiming the refusal to allow logging on the remaining nine acres was a "taking" of its property in violation of the Oregon Constitution and the U.S. Constitution. Property rights advocate Phillip Chadsey of the Stoel Rives law firm in Portland, represented Coast Range Conifers in Lincoln County Circuit Court. He was supported by the Pacific Legal Foundation. Opposing Chadsey were the Oregon Attorney General and the Audubon Society of Portland.

Lincoln County Circuit Court Judge Robert Huckleberry agreed with the state Forestry Board that, as the Oregon Supreme Court described it in its August 11 decision, "the fact that the regulation prevented the plaintiff from using part of its property did not mean that the property, as a whole, had no economically viable use."

Historically, for a court to find a "regulatory taking," it has to find the loss of economic value has been complete or virtually complete -essentially the same as if the property had been "taken" away from the owner by the government. Property rights advocates have sought to change that approach; environmentalists have defended it.

When the case went before the Oregon State Court of Appeals, the court concluded that because Coast Range Conifers did not have any economically viable use of the nine acres affected by the eagles nest, the state had indeed "taken" that part of the company's property. The state Forestry Board appealed the decision.

The relevant section of the Oregon Constitution states that "private property shall not be taken for public use ... without just compensation." But what property - the whole or merely a part - is to be protected from being "taken" by an environmental regulation? The Oregon Supreme Court, after reviewing several previous cases, had no doubt about the answer under Oregon law.

The Supreme Court held that, despite some variations, Oregon precedent "has been to ask whether the regulation leaves the owner with any economically viable use of the property" by looking "to the owner's ability to use the whole parcel and asks whether the remaining interests have any economically viable use. Were we to adopt a contrary rule and focus only on the interest affected by the regulation, an ordinance that prevented property owners from building homes within 10 feet of the street would 'take' that 10-foot strip even though the property owner remained free to place the home elsewhere on the lot. We decline to adopt that approach," the Court wrote, "and make explicit ... (that) a court should consider a property owner's ability to use the whole parcel that he or she owns in determining whether the property retains any economically viable use."

The State Supreme Court also looked at several federal constitutional law arguments Coast Range Conifer made. In deciding federal claims, a state court - even its highest - can be reversed by a federal court. But in the view of the State Supreme Court, Leiman did not have a claim of regulatory taking under federal constitutional law, either.

The company made four arguments here, one of which was, perhaps, the most critical, as it reiterated in federal law terms the core claim it had made under state law. The Oregon Supreme Court dispensed with that claim, as it did the other, more technical, federal law claims Coast Range raised.

The State Supreme Court quoted a federal Supreme Court decision that stated "takings jurisprudence does not divide a single parcel into discrete segments and attempt to determine whether rights in a particular segment have been entirely abrogated. ... (and) focuses rather on both the character of the action and on the nature and extent of interference with the rights and the parcel as a whole."

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