S056322, Opinion — West Linn Corporate Park v. City of West Linn

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On certified questions from United States Court of Appeals for the Ninth Circuit;
certification order dated July 29, 2008; certification accepted December 10, 2008;
argued and submitted September 17, 2009; certified questions answered
September 23, 2010

WEST LINN CORPORATE PARK, L.L.C.,
Plaintiff,
v.

CITY OF WEST LINN,
Boris Piatski,
and John Does 1-10,
Defendants.
(USCA 05-53061)
WEST LINN CORPORATION PARK, L.L.C.,
Plaintiff,
v.

CITY OF WEST LINN,
Boris Piatski,
and John Does 1-10,
Defendants.
(USCA 05-36062; SC S056322)
240 P3d 29

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CJS, Eminent Domain § 391.

D. Joe Willis, Schwabe, Williamson & Wyatt, P.C.,
Portland, argued the cause and filed the brief for plaintiff.
With him on the brief were Michael T. Garone and Jill S.
Gelineau.

Robert E. Franz, Jr., Springfield, argued the cause and
filed the brief for defendants.

Alan M. Sorem and Hunter B. Emerick, Salem,
filed a brief for amicus curiae National Association of
Homebuilders.

John M. Groen, Bellevue, WA, and Meriem L. Hubbard,
Sacramento, CA, filed a brief for amicus curiae Pacific Legal
Foundation.

Edward J. Sullivan, Carrie A. Richter, and Harry
Auerbach, Portland, filed a brief for amici curiae League
of Oregon Cities, American Planning Association, and the
Oregon Chapter of the American Planning Association.

Before De Muniz, Chief Justice, and Durham, Balmer,
Walters, Kistler, and Linder, Justices .*

\* Gillette, J., did not participate in the decision of this case.

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WALTERS, J.

The certified questions are answered.

Kistler, J., filed an opinion concurring in part and dissent-
ing in part in which Linder, J., joined.

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# WALTERS, J.

In this case, we answer three questions certified to
us by the United States Court of Appeals for the Ninth
Circuit (Ninth Circuit). The questions arise from an action
that West Linn Corporate Park (plaintiff) originally filed in
state court against the City of West Linn (the city) alleging
that the city effected a taking of plaintiff's property when the
city required, as a condition of development of that property,
that plaintiff construct off-site public improvements. In that
action, plaintiff asserted two claims for inverse condemna-
tion and sought payment of just compensation. The city
answered, asserted a counterclaim, and sought invalidation
of a city ordinance that vacated a street abutting plaintiff's
property. The city then removed the case to federal court.
Following a bench trial, the federal district court entered
judgment in favor of the city on plaintiff's inverse condem-
nation claims and in favor of plaintiff on the city's road vaca-
tion counterclaim. The parties cross-appealed to the Ninth
Circuit, which entered an order certifying the following ques-
tions to this court:

1\. "[W]hether a plaintiff bringing an inverse condem-
nation action alleging that a condition of development
amounts to an exaction or a physical taking is required to
exhaust available local remedies as a prerequisite to bring-
ing his claim in state court."

2\. "[W]hether a condition of development that requires
a plaintiff to construct off-site public improvements, as
opposed to dedicating an interest in real property such as
granting an easement to a municipal entity, can constitute
an exaction or physical taking."

3\. "[W]hether the vacation of a street approved by the
City Council purporting to act pursuant to [ORS 271.110] is
ultra vires where the petition does not comply with the
landowner consent provisions of [ORS 271.080]."

West Linn Corporate Park LLC v. City of West Linn, 534 F3d
1091, 1093-94 (9th Cir 2008) (certification order).

To understand fully the basis for the Ninth Circuit's
first two questions, it is necessary to explain in greater detail

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the procedural history of this case and the inverse condem-
nation claims that plaintiff filed in state court.1 In its first
claim for relief, plaintiff alleged that, as a condition of devel-
opment, the city "required [it] to construct and dedicate to the
City numerous public improvements for street and water";
that the cost of those improvements was "well beyond what is
roughly proportional to the impact of Plaintiff's develop-
ment"; and that the city's action constituted a taking under
Article I, section 18, of the Oregon Constitution.2 As a result,
plaintiff alleged, it was entitled to payment of just compen-
sation equal to the cost of the improvements that it had
constructed.3

In its second claim for relief, plaintiff incorporated
the facts that it alleged in its first claim for relief-that the
city had required it to construct off-site improvements at a
cost not "roughly proportional" to the impact of plaintiff's
development-but alleged that those facts constituted a
taking under the Fifth Amendment to the United States
Constitution.4 Plaintiff alleged that, as a result, it was enti-
tled to payment of just compensation under the Fifth Amend-
ment. In addition, plaintiff alleged that the city had violated

1 In addition to the claims for inverse condemnation at issue here, plaintiff
asserted claims for unjust enrichment, breach of contract, First Amendment retal-
iation, violation of Equal Protection, and claims for inverse condemnation arising
from the vacation of Greene Street. The Ninth Circuit does not pose questions to
this court relating to those claims.

2 Article I, section 18, provides, in part:

"Private property shall not be taken for public use, nor the particular serv-
ices of any man be demanded, without just compensation; nor except in the
case of the state, without such compensation first assessed and tendered[.]"

3 In its complaint, plaintiff alleged that it was entitled to just compensation in
the amount of $840,260. That amount reflects the total that plaintiff alleged that it
spent in construction of off-site street and water improvements, and in System
Development Charges (SDCs). The Ninth Circuit does not pose questions that
require our consideration of the validity of the SDCs.

4 The Fifth Amendment provides, in part:

"No person shall be * * * deprived of life, liberty, or property, without due proc-
ess of law; nor shall private property be taken for public use, without just
compensation."

The Just Compensation Clause of the Fifth Amendment has been incorporated
into the Due Process Clause of the Fourteenth Amendment and is binding on the
states. Chicago, Burlington, &c. R'D. v. Chicago, 166 US 226, 241, 17 S Ct 581, 41
L Ed 979 (1897).

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its civil rights and was liable for attorney fees under 42 USC
section 1983.5

Plaintiff's allegations that the city effected a taking
of its property by imposing costs of construction not "roughly
proportional" to the impact of plaintiff's development derive
from two United States Supreme Court cases-Nollan v.
California Coastal Comm'n, 483 US 825, 831-32, 107 S Ct
3141, 97 L Ed 2d 677 (1987), and Dolan v. City of Tigard, 512
US 374, 384, 114 S Ct 2309, 129 L Ed 2d 304 (1994). In
Nollan, the California Coastal Commission required that, in
exchange for a permit to demolish an existing bungalow and
replace it with a three-bedroom house, the plaintiffs grant a
public easement across their beachfront lot connecting two
public beaches located on either side of the plaintiff's prop-
erty. 483 US at 828. The commission asserted that requiring
the easement was a valid exercise of its regulatory authority
to protect and grant visual access to the ocean and that that
access would be diminished by construction of the larger
house. The Court recognized the commission's interest as
legitimate but held that it did not justify requiring that the
plaintiffs provide physical access across their property. The
Court concluded that, by demanding the easement as a con-
dition of development, the commission had converted "a valid
regulation of land" into "an out-and-out plan of extortion," id.
at 837 (internal quotation marks omitted), that effected a
taking for which just compensation was required, id. at 842.

In Dolan, although the Court did not see the same
"gimmicks" that it had noted in Nollan, it again concluded
that the city had not established the necessary nexus
between the conditions that it wished to impose and the
effects of the proposed development. 512 US at 387, 394-96.
The plaintiff had applied for a permit to double the size of her
retail store and pave her gravel parking lot. The city had

5 42 USC section 1983 makes persons acting under the color of law liable for
the violation of the federal constitution or laws. It provides, in part:

"Every person who, under color of any statute, ordinance, regulation, custom,
or usage, of any State * * * subjects, or causes to be subjected, any citizen of the
United States or other person within the jurisdiction thereof to the deprivation
of any rights, privileges, or immunities secured by the Constitution and laws,
shall be liable to the party injured in an action at law * * *. "

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required her to dedicate a pedestrian/bicycle pathway and
a public greenway along a creek to relieve anticipated
increases in congestion and flooding. After concluding that
the dedications and the projected impact of the development
must be "roughly proportional" to one another and that the
city's findings were inadequate to establish that that stan-
dard had been met, the Court concluded that the dedications
were unconstitutional takings that could not be sustained.
Id. at 394-96.

In this case, plaintiff alleged that the city's require-
ment that it construct off-site improvements at a cost not
"roughly proportional" to the impacts of its development con-
stituted a taking under the state and federal constitutions,
entitling it to payment of just compensation. To obtain that
compensation, plaintiff filed two claims for "inverse condem-
nation": the first asserting that the city had effected a taking
under the state constitution; the second asserting that the
city had effected a taking under the federal constitution. The
term "inverse condemnation" encompasses both of plaintiff's
claims. An "[i]nverse condemnation" claim is any claim
"against a governmental agency to recover the value of prop-
erty taken by the agency although no formal exercise of the
power of eminent domain has been completed by the taking
agency." Boise Cascade Corp. v. Board of Forestry, 325 Or
185, 187 n 1, 935 P2d 411 (1997) (internal quotation marks
and citation omitted).

Plaintiff appropriately filed both of its claims for
inverse condemnation in state court. See id. at 187-88
(inverse condemnation action alleging taking under state
and federal constitutions in state court); Coast Range
Conifers v. Board of Forestry, 339 Or 136, 151-55, 117 P3d
990 (2005) (inverse condemnation action alleging taking
under federal constitution in state court); see also San Remo
Hotel, L.P. v. City & County of San Francisco, 545 US 323,
347, 125 S Ct 2491, 162 L Ed 2d 315 (2005) (state courts fully
competent to hear federal takings claims). Plaintiff also
appropriately filed its section 1983 claim in state court. See,
e.g., Suess Builders v. City of Beaverton, 294 Or 254, 264-65,
265 n 10, 656 P2d 306 (1982) (entertaining, and noting that
state courts generally entertain, claims under section 1983).

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If this case had remained in state court, the state
trial court would have been required to decide whether plain-
tiff alleged facts sufficient to assert state claims for just com-
pensation and, if so, whether plaintiff was entitled to com-
pensation and in what amount. The state court's conclusion
as to the viability of plaintiff's claims would have depended
on that court's determination whether what plaintiff
alleged-that plaintiff was required to construct off-site
improvements at a cost that was not "roughly proportional"
to the impact of plaintiff's development-could amount to a
taking under the state constitution, as plaintiff alleged in its
first claim for relief, or under the federal constitution, as
plaintiff alleged in its second claim for relief. The state court
also would have been required to determine whether state
law required exhaustion of administrative remedies as a pre-
requisite to assertion of those claims. See id. at 261-62 (con-
sidering those issues).

When the city removed the case to federal court, the
federal district court was also presented with those same
issues.6 In addition, however, the federal court was required
to address a question particular to the federal forum. As the
Ninth Circuit explains in its certification order, the federal
district court was required to decide whether plaintiff's sec-
ond claim for relief, based on the Fifth Amendment, was ripe
for its consideration under the Supreme Court's decision in
Williamson Planning Comm'n v. Hamilton Bank, 473 US
172, 105 S Ct 3108, 87 L Ed 2d 126 (1985). Williamson holds
that a plaintiff's federal takings claims are not ripe for con-
sideration by a federal court unless the plaintiff establishes

6 The federal district court was permitted to decide plaintiff's first claim for
relief under the doctrine of supplemental jurisdiction. See 28 USC § 1367 (with lim-
ited exceptions not relevant here, "in any civil action of which the district courts
have original jurisdiction, the district courts shall have supplemental jurisdiction
over all other claims that are so related to claims in the action within such original
jurisdiction that they form part of the same case or controversy under Article III of
the United States Constitution"); Vaden v. Discover Bank, 556 US 49,

n 18, 129 S Ct 1262, 1277 n 18, 173 L Ed 2d 206 (2009) (citing 28 USC section 1367
and noting that federal courts "routinely exercise supplemental jurisdiction" over
state law claims); see also Chicago v. International College of Surgeons, 522 US
156, 165, 118 S Ct 523, 139 L Ed 2d 525 (1997) (federal supplemental jurisdiction
applies with equal force in cases in which the action has been removed from state
court to federal court as a "removed case is necessarily one of which the [federal]
district courts have original jurisdiction" (internal citation and ellipsis omitted)).

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that it first pursued available state court remedies to attempt
to obtain payment of just compensation from the state.

The Ninth Circuit explains the Supreme Court's
decision in Williamson as follows:

"In Williamson, the Supreme Court held that a land
owner's Fifth Amendment takings claim against a local
government is not ripe until the claimant has availed him-
self of all the administrative remedies through which the
government might reach a final decision regarding the reg-
ulations that effect the taking, and any state judicial reme-
dies for determining or awarding just compensation. See
[473 US at 186] * * * (holding that '[b]ecause respondent
has not yet obtained a final decision regarding the applica-
tion of the zoning ordinance and subdivision regulations to
its property, nor utilized the procedures Tennessee pro-
vides for obtaining just compensation, respondent's claim is
not ripe'). The first condition, which has come to be known
as 'prong-one ripeness,' requires a claimant to utilize avail-
able administrative mechanisms, such as seeking variances
from overly-restrictive or confiscatory zoning ordinances, so
that a federal court can assess the scope of the regulatory
taking. Id. at 190-91 * * *. The second condition ('prong-two
ripeness') is based on the principle that '[t]he Fifth
Amendment does not proscribe the taking of property; it
proscribes taking without just compensation.' Id. at 194
\* \* *. Consequently, 'if a State provides an adequate proce-
dure for seeking just compensation, the property owner
cannot claim a violation of the [federal] Just Compensation
Clause until it has used the procedure and been denied just
compensation.' Id. at 195[.]"

West Linn Corporate Park LLC v. City of West Linn, 534 F3d
at 1091, 1099-1100 (9th Cir 2008).7

The plaintiff in Williamson had filed an action in
federal court alleging, under section 1983, that a local gov-
ernment had adopted land use regulations that denied it the
economically viable use of its property and seeking damages

7 In its certification order, the Ninth Circuit refers to the issue as one of juris-
diction. West Linn, 534 F3d at 1099. Since the entry of that order, however, the
Ninth Circuit has stated that the issue of Williamson ripeness is prudential only.
Guggenhiem v. City of Goleta, 582 F3d 996, 1008-09 (9th Cir 2009), relying on
Suitum v. Tahoe Regional Planning Agency, 520 US 725, 733-34, 117 S Ct 1659,
137 L Ed 2d 980 (1997).

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based on the government's failure to compensate plaintiff for
that taking. The Supreme Court ruled that the plaintiff's
claim was not yet ripe. Under prong one of its analysis, the
Court ruled that the plaintiff had not obtained a final deci-
sion from the local government enabling the federal court to
determine with certainty the permitted uses of the plaintiff's
property.8 Under prong two of its analysis, the Court ruled
that the plaintiff had not obtained a decision from the state
court denying it just compensation. Under state law, as it had
been interpreted by the state court, a property owner that
claimed that governmental regulation denied it all economi-
cally viable use of its property could obtain compensation by
filing an inverse condemnation action in state court. The
Supreme Court decided that, because the plaintiff had not
demonstrated that that procedure was unavailable or inade-
quate, the plaintiff's federal claim was premature. The Court
stated: "[I]if a state provides an adequate procedure for seek-
ing just compensation, the property owner cannot claim a vio-
lation of the Just Compensation Clause until it has used the
procedure and been denied just compensation." Williamson,
473 US at 195.

In this case, the federal district court decided that
plaintiff's second claim for relief was not ripe under prong
two of Williamson. The district court ruled that, before plain-
tiff could file an inverse condemnation action in state court, it
was required, by state law, to appeal the city's requirement
that plaintiff construct off-site improvements to the city's
land use hearings officer, the city council, and finally to the
state Land Use Board of Appeals (LUBA). Plaintiff had failed
to take those administrative steps and, consequently, had

8 The Court distinguished between the need for finality, which the Court did
require, and exhaustion of administrative remedies, which the Court did not
require. The Court stated:

"While the policies underlying the two concepts often overlap, the finality
requirement is concerned with whether the initial decisionmaker has arrived
at a definitive position on the issue that inflicts an actual, concrete injury; the
exhaustion requirement generally refers to administrative and judicial proce-
dures by which an injured party may seek review of an adverse decision and
obtain a remedy if the decision is found to be unlawful or otherwise
inappropriate."

Williamson, 473 US at 193.

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deprived the state court of the opportunity to award just com-
pensation. As a result, the federal district court held that
plaintiff's second claim for relief, seeking just compensation
under the Fifth Amendment and damages under section
1983, was barred.9 Exercising supplemental jurisdiction, the
district court then turned to plaintiff's first claim for relief
seeking just compensation under the Oregon Constitution
and concluded that plaintiff's failure to pursue available
administrative remedies also precluded that claim.

Plaintiff appealed to the Ninth Circuit. To decide
whether the district court had erred, the Ninth Circuit was
required, as the district court had been, to examine state law
and determine whether plaintiff was required to utilize avail-
able state procedures before filing its claims for inverse con-
demnation. The Ninth Circuit concluded that state law is
unsettled with respect to whether pursuit of administrative
remedies is a prerequisite to an inverse condemnation action
premised on a taking under Dolan and Nollan:

"The Oregon Supreme Court has not had occasion to con-
sider this specific question of exhaustion. Two decisions,
however, one from the Oregon Court of Appeals, and
another from the Land Use Board of Appeals, reach oppo-
site conclusions, highlighting, we feel, the unsettled nature
of this aspect of Oregon law. Compare Nelson v. City of Lake
Oswego, [126 Or App 416, 869 P2d 350 (1994)], with Reeves
v. City of Tualatin, [31 Or LUBA 11, 1996 WL 33118832
(1996)]."

West Linn, 534 F3d at 1100. Thus, the Ninth Circuit asks this
court to answer that question of state law, namely, whether

9 The district court's analysis is consistent with other federal decisions follow-
ing Williamson, If state law provides a mechanism that a plaintiff must follow to
obtain payment of just compensation, a plaintiff's failure to utilize that mechanism
precludes federal claims based on the alleged taking. See, e.g., Carson Harbor
Village, Ltd. v. City of Carson, 353 F3d 824, 826 (9th Cir 2004), cert den, 543 US 874
(2004) (failure to pursue inverse condemnation claim in state court precluded
plaintiff's section 1983 claim); Hacienda Valley Mobile Estates v. City of Morgan
Hill, 353 F3d 651, 661 (9th Cir 2003), cert dismissed, 543 US 1041 (2004) (failure to
pursue relief under state law claim, precluded federal court from considering fed-
eral takings claim); Kottschade v. City of Rochester, 319 F3d 1038, 1042 (8th Cir
2003), cert den, 540 US 825 (2003) (same); Baumgardner v. Town of Ruston, 712 F
Supp 2d 1180, 1198-1200 (WD Wash 2010) (failure to bring administrative land use
petition under state law barred federal takings claim).

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"[plaintiff's] complaint filed in the Clackamas County Circuit
Court [was] sufficient under Oregon law to seek a final deter-
mination of compensation[.]" Id.

The district court's ruling that plaintiff was required
to pursue local remedies before filing its claims for inverse
condemnation presumed the viability of those claims. If state
law does not recognize those claims, then plaintiff's failure to
take administrative steps preliminary to their assertion can-
not serve as a basis for entry of judgment against plaintiff.
The Ninth Circuit therefore also needed to decide a second
issue that the state court would have confronted had the case
remained within its jurisdiction: does Oregon law recognize
claims for inverse condemnation based on allegations that a
local government has required a property owner to construct
off-site improvements as a condition of development? The
Ninth Circuit again considered Oregon law in that regard to
be unsettled. In its certification order, the Ninth Circuit
states:

"The Oregon Supreme Court similarly has not had occasion
to consider whether conditions of development that require
off-site public improvements, that is, a requirement that a
landowner improve public property-outside of the pro-
posed development site-in which the landowner has no
property interest can amount to an exaction. One case from
the Oregon Court of Appeals of which we are aware
squarely answers that question in the affirmative. See
Clark v. City of Albany, [137 Or App 293, 904 P2d 185
(1995)]. However, a recent Oregon Court of Appeals deci-
sion has cast doubt on the continuing validity of Clark. See
Dudek v. Umatilla County, [187 Or App 504, 69 P3d 751
(2003)]."

## Id. at 1102. As a result, the Ninth Circuit explains:

"[I]t is unclear how Oregon law would classify the condi-
tions placed on the development of the West Linn Corporate
Park to improve public property off its site. On the one
hand, if the Oregon Supreme Court holds that such condi-
tions can amount to an exaction, then assuming there is no
need for exhaustion, we may proceed to analyze the condi-
tions under the Dolan framework. If, on the other hand, the
Oregon Supreme Court concludes that off-site public
improvements do not amount to exactions, then it is

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unclear whether under Oregon law, there is any viable
cause of action for inverse condemnation."

Id. at 1104.

With that background, we return to and repeat the
Ninth Circuit's first two questions:

1\. "[W]hether a plaintiff bringing an inverse condem-
nation action alleging that a condition of development
amounts to an exaction or a physical taking is required to
exhaust available local remedies as a prerequisite to bring-
ing his claim in state court."

2\. "[W]hether a condition of development that requires
a plaintiff to construct off-site public improvements, as
opposed to dedicating an interest in real property such as
granting an easement to a municipal entity, can constitute
an exaction or physical taking."

Id. at 1093. In those questions, the Ninth Circuit uses the
word "exaction" to mean a governmental action equivalent to
a physical taking that entitles a property owner to payment
of just compensation.1º To reflect that meaning and the alle-
gations of plaintiff's complaint, we rephrase the Ninth
Circuit's first two questions as follows:11

1\. Whether a plaintiff bringing an inverse condemna-
tion action alleging that a city imposed, as a condition of
development, a requirement that plaintiff construct off-site

10 The Ninth Circuit notes:

"The term 'physical taking,' or a physical intrusion to benefit the public that
the government causes to be placed on private property, generally is synony-
mous with an 'exaction,' or a condition of development that local government
places on a landowner to dedicate a real interest in the development property
for public use. See, e.g., Dolan."

West Linn, 534 F3d at 1100 n 4.

11 See Western Helicopter Services v. Rogerson Aircraft, 311 Or 361, 370-71, 811
P2d 627 (1991) (recognizing this court's discretion to reframe and restate certified
questions). Plaintiff and the amici that filed a brief in support of the city agree that
the Ninth Circuit's questions are more easily analyzed if rephrased. Plaintiff urges
us to rephrase the Ninth Circuit's second question as follows: "[W]hether
the required condition is an exaction that is subject to the 'rough proportionality'
requirements set forth by the United States Supreme Court in Dolan." The amici
ask us to restate the second question as follows: "Can a condition of development
that requires a landowner to develop off-site public property in which the land-
owner has no property interest constitute an exaction for which a Fifth Amend-
ment remedy is available?"

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improvements at a cost not "roughly proportional" to the
impacts of the development is required to pursue adminis-
trative remedies before filing that claim in state court.

2\. Whether a property owner that alleges that a city
has required it to construct off-site improvements at a cost
that is not "roughly proportional" to the impacts of the
development, as opposed to dedicating an interest in real
property such as granting an easement, alleges a taking
that gives rise to a claim for just compensation.

We proceed to the first question.

### I. WAS PLAINTIFF REQUIRED TO PURSUE ADMINISTRATIVE REMEDIES?

As noted, the Ninth Circuit views Oregon law
regarding the pursuit of administrative remedies to be unset-
tled based on a conflict that it perceives between the decision
of the Court of Appeals in Nelson v. City of Lake Oswego, 126
Or App 416, 869 P2d 350 (1994), and the decision of LUBA in
Reeves v. City of Tualatin, 31 Or LUBA 11 (1996). In Nelson,
the plaintiffs alleged that the city had effected a taking of
their property under the state and federal constitutions when
the city manager required, as a condition of development,
that the plaintiffs dedicate a 55-foot easement to the city. The
plaintiffs filed judicial claims for inverse condemnation with-
out first appealing the city manager's decision to the city
council. The court recognized that plaintiffs who base inverse
condemnation claims on use restrictions-claims that the
court described as "regulatory takings" claims-must
exhaust administrative remedies for two reasons:

"First, the fact that one use is impermissible under the reg-
ulations does not necessarily mean that other economically
productive uses are also precluded; and second, until alter-
native uses are applied for or alternative means of obtain-
ing permission for the first use are attempted, there can be
no conclusive authoritative determination of what is legally
permitted by the regulations. Therefore, the courts cannot
perform their adjudicative function on a claim predicated
on a single denial, because something more must be decided
by the local or other regulatory authority before there can
be a demonstrable loss of all use and, therefore, a taking.

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See Suess Builders v. City of Beaverton, [294 Or 254, 261-62,
656 P2d 306 (1982)]."

126 Or App at 422 (emphasis in original).

However, the court distinguished a local govern-
ment's requirement that a property owner dedicate real prop-
erty from such regulatory takings and decided that exhaus-
tion of administrative remedies was not required under the
circumstances presented in Nelson, because

"the condition has been imposed and the easement has been
acquired by the city. There is nothing left to happen at the
local or administrative level in order for the claim to be sus-
ceptible to adjudication; the only question is whether what
has occurred is a taking under the legal test that the condi-
tion must bear a reasonable relationship to the impacts of
the use to which the city has attached it. Dolan v. City
of Tigard, 317 Or 110, 854 P2d 437, cert granted 510 US
989[, 114 S Ct 544, 126 L Ed 2d 446] (1993). The facts on
both sides of the equation are readily susceptible to conven-
tional judicial proof, and the adjudication of the facts and of
the applicable law is well within the judicial competence."

Id. (emphasis in original).

Reeves was a LUBA decision that purported to apply
the court's decision in Nelson. The petitioner in Reeves, like
the plaintiffs in Nelson, objected to a required dedication of
real property. LUBA ruled that the petitioner was required
to seek a variance from the city before appealing that
requirement to LUBA. LUBA noted that that option had not
been available to the plaintiffs in Nelson. Reeves, 31 Or
LUBA at 17. Further, in Nelson, the city had acquired the
easement at issue, and there was "nothing left to happen at
the local level in order for a claim to be susceptible for adju-
dication." Reeves, 31 Or LUBA at 17 (citing Nelson, 126 Or
App at 422) (internal quotation marks omitted). In Reeves,
the city had not yet acquired the easement, and there were
other actions that the city could take that could affect
LUBA's decision. Id. LUBA explained that, until it could

"ascertain how and to what extent the conditions will be
imposed on the petitioner's property, [it would] have no way
of determining whether the conditions bear an 'essential
nexus' to the impacts of the development and whether any

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exactions are roughly proportional to the impacts of peti-
tioner's proposed development."

Id.

In addressing the Ninth Circuit's first question,
plaintiff argues that Nelson is controlling Oregon law and
stands for the proposition that exhaustion is not required
when a plaintiff brings an inverse condemnation action based
on a taking under Nollan and Dolan. We disagree. Although
we do not apprehend the conflict that the Ninth Circuit sees
as rendering Oregon law unsettled, we also do not see Nelson
as determinative of the question that the Ninth Circuit poses.
In this case, the city did not require plaintiff to dedicate real
property as a condition of its development. Because the cir-
cumstances extant here may argue for exhaustion for the rea-
sons that LUBA stated in Reeves and that the Court of
Appeals did not have the opportunity to fully explore in
Nelson, we take up the merits of the first question that the
Ninth Circuit poses. We begin with a review of relevant
precedent.

In Fifth Avenue Corp. v. Washington County, 282 Or
591, 622 n 23, 581 P2d 50 (1978), this court determined that
a plaintiff that sought a declaratory judgment that a compre-
hensive plan was unconstitutional on the basis that it was
arbitrary, capricious, and unreasonable as applied was
required to exhaust administrative remedies before asserting
that claim in court.12 The comprehensive plan prohibited the
plaintiff from building a district shopping center on its prop-
erty, but local procedure entitled the plaintiff to seek a zone
change or a plan amendment, which, if obtained, would have
permitted that development. The court treated the issue as
one of exhaustion of administrative remedies and observed
that one of the purposes of that doctrine is to permit an
administrative body with expertise "to determine[,] at least
initially, factual and policy questions with which it is famil-
iar, and, if litigation does result, to provide the reviewing
court with a complete and well[-]organized record upon
which it may base its judgment." Id. at 623 n 23. The court

12 The plaintiff also brought a claim for inverse condemnation, but the court
held that that claim was not cognizable. Id. at 609-14.

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relied on the local planning body's expertise and the principle
that "[o]rdinarily those who seek judicial relief must show
they have exhausted their administrative remedies" in hold-
ing that the plaintiff's failure to exhaust administrative rem-
edies barred his claim. Id. at 614 (internal quotation marks
omitted).

The court extended the exhaustion requirement of
Fifth Avenue to a plaintiff's claim for inverse condemnation
in Suess Builders. In that case, the plaintiff alleged that the
city had designated its property for future public acquisition
and that that designation constituted a taking for which just
compensation was required. The court decided that the plain-
tiff could not rest its claim on the plan designation, but had to
demonstrate that it had sought relief, including pursuing
administrative procedures for amending the plan. The court
stated that, "if a means of relief from the alleged confiscatory
restraint remains available, the property has not been
taken." 294 Or at 262.

In Boise Cascade, the court declined, however, to
require appeal to LUBA as a prerequisite to an inverse con-
demnation action. 325 Or 185, 935 P2d 411 (1997). Although
LUBA has jurisdiction to decide whether governmental
action constitutes a compensable taking, Dunn v. City of
Redmond, 303 Or 201, 207, 735 P2d 609 (1987), the court in
Boise Cascade refused to stay the plaintiff's inverse condem-
nation action until LUBA had an opportunity to rule, reason-
ing that the issue presented-whether a taking had
occurred-was a constitutional question that fell within an
area traditionally adjudicated by courts. Boise Cascade, 325
Or at 196.

Fifth Avenue and Suess Builders impose a require-
ment that a property owner obtain a clear and final ruling
from the local government as to the permitted uses of its
property before filing judicial action to challenge limitations
on the use of that property. That rule can be viewed as ensur-
ing that the decision of the local government is in truth its
final decision or as a general requirement of efficiency in judi-
cial administration. Through either lens, that requirement
permits the local government to fully determine and review
factual questions about the effect that its regulations have on

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a particular property and policy questions about whether,
given the specific circumstances presented, the government
wishes to enforce those regulations. And through either lens,
that requirement is of great benefit in avoiding unnecessary
litigation or better informing a court should litigation ensue.

With regard to whether Oregon law imposes a
requirement of finality or exhaustion before permitting the
filing of an action for inverse condemnation, we do not see a
significant difference between takings claims that are based
on regulations that limit the use of property and those that
are based on regulations that place conditions on its devel-
opment. In either instance, a property owner that asserts
objections to the regulations at the local level may obtain
relief from regulatory restraint. In either instance, a require-
ment that a property owner take administrative steps prior
to bringing judicial action permits the local government to
determine the necessary effects of the regulations and
whether, knowing those effects, it wishes to impose or enforce
them. Just as a court benefits by requiring that local govern-
ments have the opportunity to assess fully the effects that
use limitations have on property owners, so too does a court
benefit from requiring that local governments have the
opportunity to consider fully whether the conditions on devel-
opment that it seeks to require are proportional to the
impacts of development and whether to insist on imposing
those conditions, given the assessment that it makes.

That conclusion does not mean, however, that a
landowner must appeal the decision of the local government
to LUBA before filing an action for inverse condemnation.
LUBA reviews the decisions of local government, but it does
not decide facts and cannot make policy decisions for local
governments. See ORS 197.829(1)(c) (LUBA shall affirm local
government's interpretation of a regulation unless that inter-
pretation is inconsistent with underlying policy of compre-
hensive plan or land use regulation); ORS 197.835(2)(b)
(LUBA bound by any findings of fact of the local government
for which there is substantial evidence in the record); ORS
197.835(7)(a), (b) (LUBA shall reverse land use regulation if
not in compliance with local government's comprehensive
plan or the comprehensive plan lacks specific policies which
provide the basis for the regulation). Requiring appeal to

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LUBA would not serve the same purposes as does requiring
the pursuit of local government remedies. 18

Accordingly, we answer the Ninth Circuit's first
question as follows: Assuming that Oregon law permits an
inverse condemnation action premised on allegations that a
condition of development requires a landowner to construct
off-site improvements at a cost not roughly proportional to
the impacts of development, Oregon law requires the land-
owner to pursue available local administrative remedies, but
not to appeal to LUBA, as a prerequisite to bringing that
action in state court.14

In this case, it is undisputed that plaintiff did not use
available local procedures to seek to modify or annul the

13 In reaching that conclusion, we do not consider the impact of ORS 197.796,
which was not in effect at the time that the city imposed the conditions at issue in
this case. That statute requires exhaustion before bringing state court claims for
damages and provides, in part:

"(1) An applicant for a land use decision * * * may accept a condition of
approval imposed * * * and file a challenge to the condition[.]

"(3)(a) A challenge filed pursuant to this section may not be dismissed on
the basis that the applicant did not request a variance to the condition of
approval or any other available form of reconsideration of the challenged con-
dition. However, an applicant shall comply with ORS 197.763(1) prior to
appealing to the Land Use Board of Appeals or bringing an action for damages
in circuit court and must exhaust all local appeals provided in the local com-
prehensive plan and land use regulations before proceeding under this section.

"(b) In addition to [other requirements,] * * * a statement shall be made to
the applicant that the failure of the applicant to raise constitutional or other
issues relating to proposed conditions of approval with sufficient specificity to
allow the local government or its designee to respond to the issue precludes an
action for damages in circuit court.

"(6) This section applies to appeals by the applicant of a condition of
approval and claims filed in state court seeking damages for the unlawful
imposition of conditions of approval in a land use decision, limited land use
decision, expedited land division or permit under ORS 215.427 or 227.178."

14 Our decision that pursuit of available local remedies is a prerequisite to an
action for inverse condemnation is not inconsistent with Patsy v. Florida Board of
Regents, 457 US 496, 102 S Ct 2557, 73 L Ed 2d 172 (1982), which holds that
exhaustion is not a prerequisite to assertion of a claim under section 1983. A sec-
tion 1983 claim does not ripen until a landowner's inverse condemnation claim for
compensation has been denied. Suess Builders, 294 Or at 267. We do not mean to
suggest that, if a section 1983 claim is ripe, a landowner must take additional
administrative steps before filing a claim under 42 USC section 1983.

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requirement that it construct off-site improvements. West
Linn, 534 F3d at 1102. Therefore, assuming that plaintiff
had viable claims for inverse condemnation against the city,
it did not pursue available local administrative remedies
before bringing those judicial claims.

## II. DID PLAINTIFF ALLEGE FACTS GIVING RISE TO A CLAIM FOR JUST COMPENSATION?

The Ninth Circuit's second question, as we have
restated it, is:

Whether a property owner that alleges that a city has
required it to construct off-site improvements at a cost that
is not "roughly proportional" to the impacts of the plaintiff's
development, as opposed to dedicating an interest in real
property such as granting an easement, alleges a taking
that gives rise to a claim for just compensation.

In its second question, the Ninth Circuit asks that we decide
the question assumed in responding to its first question-
were plaintiff's claims for just compensation as alleged in its
first or second claims for relief viable in state court?

We begin with plaintiff's second claim for relief
alleging that the city effected a taking under the Fifth
Amendment. We realize that beginning with the federal con-
stitution is contrary to our normal practice. See, e.g., Sterling
v. Cupp, 290 Or 611, 614, 625 P2d 123 (1981) (proper
sequence is to analyze state law, including constitutional
law, before reaching federal constitutional claim). Neverthe-
less, we do so here because we must determine the viability of
both of plaintiff's claims for just compensation to answer the
Ninth Circuit's questions, and because plaintiff uses United
States Supreme Court cases-Nollan and Dolan-as the the-
oretical basis for each of those claims. An initial discussion of
Fifth Amendment jurisprudence therefore provides a helpful
backdrop for our analysis.

A. Did Plaintiff Allege Facts Giving Rise to a Claim for Just
Compensation Under the Federal Constitution?

After Nollan and Dolan, the Supreme Court decided
a case that clarified the constitutional basis of those
decisions-Lingle v. Chevron USA Inc., 544 US 528, 548, 125

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S Ct 2074, 161 L Ed 2d 876 (2005). In Lingle, the Supreme
Court began by observing that governmental action that falls
into one of the following categories constitutes a taking:

1\. A physical invasion of property, Loretto v.
Teleprompter Manhattan CATV Corp., 458 US 419, 102
S Ct 3164, 73 L Ed 2d 868 (1982);

2\. A regulation that completely deprives a plaintiff of
all economically beneficial use of property, Lucas v. South
Carolina Coastal Council, 505 US 1003, 112 S Ct 2886, 120
L Ed 2d 798 (1992); or

3\. A regulation that, on balance, imposes economic
impacts that constitute a taking under the several factors
identified in Penn Central Transp. Co. v. New York City,
438 US 104, 98 S Ct 2646, 57 L Ed 2d 631 (1978).15

The Court explained that those categories are intended to
describe governmental actions that are functionally equiva-
lent to the classic taking in which government directly appro-
priates private property or ousts the owner from his or her
domain. Accordingly, each category describes governmental
acts that impose burdens on private property rights. The
Court stated:

"A permanent physical invasion, however minimal the
economic cost it entails, eviscerates the owner's right to
exclude others from entering and using her property-
perhaps the most fundamental of all property interests. See
Dolan[, 512 US at 384]; Nollan[, 483 US at 831-32];
Loretto[, 458 US at 433]; Kaiser Aetna v. United States, 444
US 164, 176, 100 S Ct 383, 62 L Ed 2d 332 (1979). * * *

"[T]he complete elimination of a property's value
is the determinative factor. See Lucas[, 505 US at 1017]
(positing that 'total deprivation of beneficial use is, from the

15 Penn Central involved the question of whether the designation of New York
City's Grand Central Terminal as a historical landmark, and the restrictions on
development that that designation imposed, so adversely affected the plaintiffs'
economic interests in the property as to constitute a taking requiring just com-
pensation under the Fifth and Fourteenth Amendments to the United States
Constitution. 438 US at 107. In deciding that the regulation at issue did not
amount to a taking, the Court held that no set formula exists to determine when a
regulation will constitute a taking, but it articulated "several factors that have par-
ticular significance" in the analysis, primary among which was "[t]he economic
impact of the regulation on the claimant and, particularly, the extent to which the
regulation has interfered with distinct investment-backed expectations[.]" Id. at 124.

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landowner's point of view, the equivalent of a physical
appropriation'). * * *

"[T]he Penn Central inquiry turns in large part, albeit
not exclusively, upon the magnitude of a regulation's eco-
nomic impact and the degree to which it interferes with
legitimate property interests."

Lingle, 544 US at 539-40 (paragraph structure added for
clarity).

In Lingle, the Court then declared that other govern-
mental acts that do not impose similarly severe burdens are
not subject to challenge under the Takings Clause, but are,
instead, subject to challenge under the Due Process Clause.
Thus, the Court explained, a property owner's claim under
Agins v. City of Tiburon, 447 US 255, 260, 100 S Ct 2138, 65
L Ed 2d 106 (1980), that a governmental regulation is invalid
because it does not "substantially advance legitimate state
interests" is properly viewed as a claim that due process pre-
cludes the regulation entirely, and not as a claim that the
takings clause requires payment of just compensation. The
Court stated:

"Instead of addressing a challenged regulation's effect on
private property, the 'substantially advances' inquiry
probes the regulation's underlying validity. But such an
inquiry is logically prior to and distinct from the question
whether a regulation effects a taking, for the Takings
Clause presupposes that the government has acted in
pursuit of a valid public purpose. The Clause expressly
requires compensation where government takes private
property 'for public use.' It does not bar government from
interfering with property rights, but rather requires com-
pensation in the event of otherwise proper interference
amounting to a taking. * * * Conversely, if a government
action is found to be impermissible-for instance because it
fails to meet the 'public use' requirement or is so arbitrary
as to violate due process-that is the end of the inquiry. No
amount of compensation can authorize such action."

Lingle, 544 US at 543 (emphases in original; internal citation
and quotation marks omitted).

Although not necessary to its holding, the Court also
addressed how its prior decisions in Nollan and Dolan fit into

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that paradigm. The claims of the property owners in those
cases could have been seen as implicating the Due Process
Clause, because they challenged the sufficiency of the nexus
between the state interest and the condition imposed and
sought judicial invalidation of the condition. However, the
claims in those cases also could have been seen as implicating
the Takings Clause, because the conditions that the govern-
ments imposed required the property owners to dedicate real
property for governmental use-the classic taking in which
the government directly appropriates private property. The
Court chose neither and placed Nollan /Dolan challenges
into their own category-a "special application of the 'doc-
trine of unconstitutional conditions' ":

"Although Nollan and Dolan quoted Agins' language, see
Dolan, [512 US at 385]; Nollan, [483 US at 834], the rule those
decisions established is entirely distinct from the ‘substan-
tially advances' test we address today. Whereas the 'substan-
tially advances' inquiry before us now is unconcerned with the
degree or type of burden a regulation places upon property,
Nollan and Dolan both involved dedications of property so
onerous that, outside the exactions context, they would be
deemed per se physical takings. In neither case did the Court
question whether the exaction would substantially advance
some legitimate state interest. See Dolan, [512 US at 387-88];
Nollan, [483 US at 841]. Rather, the issue was whether the
exactions substantially advanced the same interests that
land-use authorities asserted would allow them to deny the
permit altogether. As the Court explained in Dolan, these
cases involve a special application of the 'doctrine of "unconsti-
tutional conditions,"' which provides that 'the government
may not require a person to give up a constitutional right-
here the right to receive just compensation when property is
taken for a public use-in exchange for a discretionary benefit
conferred by the government where the benefit has little or no
relationship to the property.' [512 US at 385]. That is worlds
apart from a rule that says a regulation affecting property
constitutes a taking on its face solely because it does not sub-
stantially advance a legitimate government interest. In short,
Nollan and Dolan cannot be characterized as applying the
'substantially advances' test we address today, and our deci-
sion should not be read to disturb these precedents."

Id. at 547-48 (emphases added; original emphases deleted).

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Thus, under Lingle, in circumstances in which the
government exacts "dedications of property so onerous that,
outside the exactions context, they would be deemed per se
physical takings," the Supreme Court subjects the govern-
ment's exaction to a Nollan /Dolan analysis. Id. at 547.
Under that analysis, the government is precluded from mak-
ing the exaction and must pay just compensation for the real
property that it acquires unless the exaction is "roughly pro-
portional" to the effect of the proposed development.

The Ninth Circuit's second question requires that we
consider the reasoning of the Supreme Court in Nollan,
Dolan, and Lingle and decide whether the Nollan / Dolan
analysis extends to a requirement that a property owner con-
struct off-site improvements at a cost that is not "roughly pro-
portional" to the impacts of the owner's development. In
Lingle terms, we must decide whether such a requirement is
"so onerous that, outside the exactions context, [it] would be
deemed [a] per se physical taking." 544 US at 547.

Plaintiff first posits that the Oregon Court of
Appeals already has recognized such a requirement as a
Fifth Amendment taking and that this court should not dis-
turb that ruling in answering a certified question. The case
that plaintiff deems determinative is Clark v. City of Albany,
137 Or App 293, 299, 904 P2d 185 (1995), rev den, 322 Or 644,
912 P2d 375 (1996). In Clark, the Court of Appeals consid-
ered a ruling by LUBA that, as relevant here, applied Dolan's
"rough proportionality" standard to development conditions
that required the petitioner "to make road improvements on
and extending beyond the affected property." The Court of
Appeals affirmed the application of that standard, seeing "lit-
tle difference between a requirement that a developer convey
title to the part of the property that is to serve a public pur-
pose, and a requirement that the developer himself make
improvements on the affected and nearby property and make
it available for the same purpose." Id. at 300.

Although we agree with plaintiff's assertion that
"[c]ertification is not an appropriate vehicle to obtain clarifi-
cation of existing law or to test the continued viability of long-
standing legal precedent against current conditions," see
Western Helicopter Services v. Rogerson Aircraft, 311 Or 361,

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374, 811 P2d 627 (1991), we do not think that those principles
describe the posture of this case. Clark was decided in 1995,
and, although Nollan and Dolan both had been decided, the
Supreme Court had not had occasion to opine on their reach.
In 1999, the Supreme Court decided Monterey v. Del Monte
Dunes at Monterey, Ltd., 526 US 687, 702, 119 S Ct 1624, 143
L Ed 2d 882 (1999), and stated that it had not extended the
application of Nollan and Dolan "beyond the special context
of [such] exactions." As a result of that statement, the Court
of Appeals considered its decision in Clark "open to question."
Dudek v. Umatilla County, 187 Or App 504, 516 n 10, 69 P3d
751 (2003). Then, in 2005, the Supreme Court decided Lingle
and discussed, in the context of its disaggregation of due
process and takings challenges, the jurisprudential under-
pinnings of Nollan and Dolan. We choose not to rest on a
Court of Appeals case that predated Lingle.

On the merits, plaintiff contends that the city's
requirement that it use "asphalt, concrete, bedding material,
pipe and other personal property" to construct public
improvements cannot be distinguished from the require-
ments imposed by the governments and considered by the
courts in Nollan and Dolan. Plaintiff argues that any coerced
transfer of property, whether real or personal, must meet the
Nollan / Dolan standard. The city disagrees and urges that
Nollan and Dolan are limited to required dedications of real
property and do not extend to the imposition of an obligation
to construct off-site improvements. Such an obligation, the
city contends, is, functionally, a monetary obligation that the
city has authority to impose to offset the impacts of plaintiff's
development. Plaintiff responds that, even if that condition
appropriately is characterized as a monetary exaction, the
Nollan /Dolan analysis applies when government uses its
regulatory power in an adjudicative proceeding to coerce
such payment.

The Ninth Circuit considered a similar question in
McClung v. City of Sumner, 548 F3d 1219 (9th Cir 2008),
cert den, 129 S Ct 2765 (2009). The issue in that case was
whether a city ordinance that required property owners, as a
condition of development, to install storm pipes effected a
taking. The Ninth Circuit viewed the ordinance as imposing
a monetary obligation and decided that the validity of the

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condition that it imposed should be subjected to a Penn
Central, and not a Nollan /Dolan, analysis. The Ninth Cir-
cuit based its decision on the fact that the condition was leg-
islatively imposed and applied to all development; it was not,
as were the conditions in Nollan and Dolan, a condition
imposed in an adjudicatory proceeding on the plaintiff alone.

The Ninth Circuit also stated, as an alternative
basis for its ruling, that the property owners had not been
required to relinquish an interest in real property:

"[T]he City already had an easement for the storm pipe
such that the McClungs gave up no rights to their real prop-
erty. To extend the Nollan / Dolan analysis here would sub-
ject any regulation governing development to higher scru-
tiny and raise the concern of judicial interference with the
exercise of local government police powers. As noted by San
Remo Hotel [L.P. v. City And County of San Francisco, 117
Cal Rptr 2d 269, 291, 41 P3d 87, 105 (Cal 2002)], any con-
cerns of improper legislative development fees are better
kept in check by 'ordinary restraints of the democratic polit-
ical process.'"

McClung, 548 F3d at 1227-28 (emphasis in original). The
Ninth Circuit rejected the plaintiffs' argument that the city
had effected a per se taking of its money and the plaintiff's
citation to Brown v. Legal Foundation of Washington, 538 US
216, 123 S Ct 1406, 155 L Ed 2d 376 (2003). In Brown, the
Supreme Court held that interest that accrued on lawyers'
trust accounts (IOLTA accounts) was private property that
the state could not acquire without payment of just compen-
sation, but that the plaintiff in that case had suffered no loss
for which compensation was due. In McClung, the Ninth
Circuit distinguished the imposition of a new monetary obli-
gation from the acquisition of accrued interest on an existing
account and noted that Brown did not treat the acquisition of
accrued interest as an exaction or apply the Nollan / Dolan
analysis to the facts presented.16 McClung, 548 F3d at 1228.

16 The Ninth Circuit also stated:

"A monetary exaction differs from a land exaction-'[u]nlike real or personal
property, money is fungible.' United States v. Sperry Corp., [493 US 52, 62 n 9,
110 S Ct 387, 107 L Ed 2d 290 (1989)]; see also San Remo Hotel, L.P. v. S.F. City
& County, [364 F3d 1088, 1097-98 (9th Cir 2004), aff'd, 545 US 323, 125 S Ct
2491, 162 L Ed 2d 315 (2005)] (stating that the state court's analysis of the
state issues 'was thus equivalent to the approach taken in this circuit, which

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In reaching its conclusion in McClung, the Ninth
Circuit observed, however, that "[o]ther courts addressing
this general issue have come to different conclusions."17
Plaintiff asks that we adopt the reasoning of one of those
courts-that of the Texas Supreme Court in Town of Flower
Mound v. Stafford Estates, 135 SW 3d 620 (Tex 2004). In that
case, the town had conditioned its approval of the plaintiff's
development on its rebuilding of an abutting road. The Texas
court saw "no important distinction between a dedication of
property to the public and a requirement that property
already owned by the public be improved" and held that the
Dolan standard should apply to both. Id. at 640. The court
dismissed the town's contention that the doctrine of uncon-
stitutional takings was not applicable "when the thing given
up in exchange for a discretionary benefit is simply money,

has also rejected the applicability of Nollan / Dolan to monetary exactions such
as the ones at issue here'); Garneau v. City of Seattle, [147 F3d 802, 808 (9th Cir
1998)] (upholding a city ordinance that required landlords to pay a $1,000 per
tenant relocation assistance fee to low income tenants displaced by the change
of use or substantial rehabilitation of a property); Commercial Builders of
N. Cal. v. Sacramento, [941 F2d 872, 873-75 (9th Cir 1991)] (rejecting applica-
tion of Nollan to ordinance that conditioned the issuance of nonresidential
building permits on the payment of a fee used to assist in financing low-income
housing)."

McClung, 548 F3d at 1228.

17 The Ninth Circuit summarized those differing conclusions as follows:
"Compare Clajon Prod. Corp. v. Petera, [70 F3d 1566, 1579 (10th Cir 1995)]
(finding that '[g]iven the important distinctions between general police power
regulations and development exactions, and the resemblance of development
exactions to physical takings cases, we believe that the "essential nexus" and
"rough proportionality" tests are properly limited to the context of develop-
ment exactions'); City of Olympia v. Drebick, [156 Wash 2d 289, 126 P3d 802,
807-08 (2006)] (rejecting the view 'that local governments must base GMA
impact fees on individualized assessments of the direct impacts each new
development will have on each improvement planned in a service area'); San
Remo Hotel L.P. v. City & County of S.F., [27 Cal 4th 643, 117 Cal Rptr 2d 269,
41 P3d 87, 104-05 (2002)] (distinguishing between a fee condition applied to a
single property that would be subject to Nollan / Dolan review, and a generally
applicable development fee); Home Builders Ass'n of Cent. Ariz. v. City of
Scottsdale, [187 Ariz 479, 930 P2d 993, 1000 (1997)] (finding that Dolan does
not apply to a generally applicable legislative decision); and McCarthy v. City
of Leawood, [257 Kan 566, 894 P2d 836, 845 (1995)] (concluding that nothing in
Dolan supports its application to impact fees); with Town of Flower Mound v.
Stafford Estates Ltd., [135 SW3d 620, 636 (Tex 2004)] (finding that the Nollan /
Dolan analysis is not limited to dedications of land); and Home Builders Ass'n
v. City of Beavercreek, [89 Ohio St 3d 121, 729 NE2d 349, 356 (2000)] (applying
Nollan /Dolan in 'evaluating the constitutionality of an impact fee ordinance')."
McClung, 548 F3d at 1225.

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for which the owner has no constitutional right of recom-
pense." The court stated:

"Assuming that the doctrine of unconstitutional conditions
is limited as the Town argues, a position on which we
express no opinion, the Town's argument does not limit the
application of Dolan because the doctrine was not the only
foundation on which it rested and was not even mentioned
in Nollan. Nollan was grounded entirely in the Supreme
Court's takings jurisprudence."

Id. at 636.

Of course, as we now know from the Supreme
Court's opinion in Lingle, the Court's decision in Nollan was,
indeed, premised on the doctrine of unconstitutional condi-
tions. Understanding that premise, we see a clear distinction
between a requirement that a property owner dedicate prop-
erty to the public and a requirement that a property owner
spend money to mitigate the effects of development. In the
former circumstance, the government seeks to acquire a
landowner's existing real property. To do so, it is required to
proceed by the exercise of its power of eminent domain and to
pay just compensation. In the latter circumstance, the gov-
ernment does not seek to acquire a landowner's existing real
property. It seeks to compel the landowner to pay money to
mitigate the effects of development and cannot proceed to do
so by instituting eminent domain proceedings. When the
landowner makes payment, it does not relinquish existing
property; it fulfills a newly imposed monetary obligation. See
Daniel L. Siegel, Exactions after Lingle: How Basing Nollan
and Dolan on the Unconstitutional Conditions Doctrine
Limits Their Scope, 28 Stan Envtl L J 577, 592-601 (2009)
(discussing reasons that subjecting permits conditioned on
payment of fees to Nollan / Dolan analysis cannot be justified
doctrinally after Lingle).

That does not mean, of course, that monetary obli-
gations could not, at least theoretically, be "so onerous that,
outside the exactions context, they would be deemed per se
physical takings." Lingle, 544 US at 547. In Lingle, the Court
recognized two circumstances in which governmental regu-
lations that impose economic burdens are considered equiv-
alent to physical takings: (1) where the regulation deprives

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the owner of all viable economic use of the property; and
(2) where the regulation is so burdensome that the Penn
Central standard is met. Id. at 539-40. It is conceivable that a
local government could require, as a condition of develop-
ment, monetary obligations so burdensome as to deprive the
property owner of all economically viable use of the property,
or to meet the Penn Central standard, as the Ninth Circuit
recognized in McClung. If a local government did so, such
conditions perhaps could be considered sufficiently onerous
to be tantamount to physical takings. But in that circum-
stance, there would be no need for a Nollan / Dolan analysis.
Conditions imposing burdens of that significance would
require payment of just compensation without further
inquiry, in contrast to conditions that impose exactions sub-
ject to the Nollan / Dolan analysis. Under Nollan / Dolan, just
compensation is required only when the conditions imposed
are not "roughly proportional" to the impacts of development.
See Charles T. Switzer, Escaping the Takings Maze: Impact
Fees and the Limits of the Takings Clause, 62 Vand L Rev
1315, 1343-44 (2009) (asserting that only conceivable way for
impact fee to amount to per se physical taking is if the fee
imposed is so high that it deprives owner of all economically
beneficial use of real property).

In Lingle, the Court did not express an intent to
treat regulations that impose economic burdens that do not
deprive a property owner of all economically viable use of
property or meet the Penn Central standard as takings under
the Fifth Amendment. The Court emphasized, as it had in
Monterey v. De Monte Dunes at Monterey, 526 US 687, 702,
119 S Ct 1624, 143 L Ed 2d 882 (1999), the "special context"
in which Nollan and Dolan arose and pointedly did not cate-
gorize the exactions at issue in Nollan and Dolan as takings,
instead analyzing them under the doctrine of "unconstitu-
tional conditions."

In the absence of a Supreme Court ruling to the con-
trary, we conclude that a government's requirement that a
property owner undertake a monetary obligation that is not
roughly proportional to the impacts of its development does
not constitute an unconstitutional condition under Nollan /
Dolan or a taking under the Fifth Amendment, nor does it
require payment of just compensation. We also conclude that

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a requirement that a property owner construct off-site
improvements is the functional equivalent of the imposition
of a monetary obligation. When a governmental entity
requires a property owner to construct improvements, it sim-
ply requires the property owner to put money to a particular
use. The government could accomplish the same result by
requiring the property owner to pay a specified sum, which
the government could then use to construct the improve-
ments. The government, through its exercise of the power of
eminent domain, can compel neither off-site construction nor
the expenditure of money.

That conclusion does not mean, of course, that a
property owner required to construct off-site improvements
at a cost not roughly proportional to the impacts of its devel-
opment may not have some other legally sound basis for a
claim against the government. The Takings Clause may not
be the only constraint on such governmental action. For
instance, prior to Nollan and Dolan, state courts had invali-
dated governmental conditions that were not "reasonably
related" to the impacts of development without relying on the
Takings Clause as the basis of their decisions. See Dolan, 512
US at 390-91 (noting that a majority of states have adopted
common-law rule that there must be "some reasonable rela-
tionship or nexus" between required dedication and impact of
proposed development).18 See also Switzer, 62 Vand L Rev at

18 The Dolan Court cited with approval the following state law cases as exem-
plars of the "reasonable relationship" test:

"A number of state courts have * * * require[d] the municipality to show a
'reasonable relationship' between the required dedication and the impact of the
proposed development. Typical is the Supreme Court of Nebraska's opinion in
Simpson v. North Platte, [206 Neb 240, 245, 292 NW2d 297, 301 (1980)], where
that court stated;

" 'The distinction, therefore, which must be made between an appro-
priate exercise of the police power and an improper exercise of eminent
domain is whether the requirement has some reasonable relationship
or nexus to the use to which the property is being made or is merely
being used as an excuse for taking property simply because at that
particular moment the landowner is asking the city for some license or
permit.'

"Thus, the court held that a city may not require a property owner to dedicate
private property for some future public use as a condition of obtaining a build-
ing permit when such future use is not 'occasioned by the construction sought
to be permitted.' Id. at [248, 292 NW2d at 302].

"Some form of the reasonable relationship test has been adopted in many
other jurisdictions. See, e.g., Jordan v. Menomonee Falls, [28 Wis 2d 608, 137

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1332-36 (explaining common-law "dual rational nexus" test
used by various courts). Further, as the Court in Lingle
acknowledged, the Due Process Clause may serve as a check
on arbitrary land use regulation. 544 US at 540; see also
Miller Bros. Co. v. Maryland, 347 US 340, 342, 74 S Ct 535,
98 L Ed 744 (1954) ("It is a venerable if trite observation that
seizure of property by the State under pretext of taxation
when there is no jurisdiction or power to tax is simple confis-
cation and a denial of due process of law.").

### B. Did Plaintiff Allege Facts Constituting a Taking Under the Oregon Constitution?

We turn to whether, under the circumstances alleged
in plaintiff's first claim for relief, Oregon law recognizes an
inverse condemnation action premised on a taking under the
Oregon Constitution. In interpreting original provisions of
the Oregon Constitution, we apply a now-familiar methodol-
ogy first articulated in Priest v. Pearce, 314 Or 411, 415-16,
840 P2d 65 (1992). This court recently summarized that
methodology in the context of interpreting Article I, section
18:

"[W]e consider the text of Article I, section 18, its history,
and the cases interpreting it. Our goal in undertaking that
inquiry is to identify the historical principles embodied in
the constitutional text and to apply those principles faith-
fully to modern circumstances."

Coast Range Conifers v. Board of Forestry, 339 Or 136, 142,
117 P3d 990 (2005) (citations omitted). In Coast Range
Conifers, this court analyzed Article I, section 18, to address
a different issue-whether that clause addressed only
physical takings of property, or whether it also extended to

NW2d 442 (1965)]; Collis v. Bloomington, [310 Minn 5, 246 NW2d 19 (1976)]
(requiring a showing of a reasonable relationship between the planned sub-
division and the municipality's need for land); College Station v. Turtle Rock
Corp., [680 SW2d 802, 807 (Tex 1984)]; Call v. West Jordan, [606 P2d 217, 220
(Utah 1979)] (affirming use of the reasonable relation test). Despite any
semantical differences, general agreement exists among the courts 'that the
dedication should have some reasonable relationship to the needs created by
the [development].' Ibid. See generally Note, '"Take" My Beach Please!':
Nollan v. California Coastal Commission and a Rational-Nexus Constitutional
Analysis of Development Exactions, [69 B U L Rev 823 (1989)]; see also Parks
v. Watson, [716 F2d 646, 651-53 (9th Cir 1983)]."

512 US at 390-91.

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"regulatory takings." Although the issue was different from
that presented in this case, much of the analysis is useful to
our analysis here.

As originally adopted, Article I, section 18, provided:

"Private property shall not be taken for public use, nor
the particular services of any man be demanded, without
just compensation; nor except in case of the state, without
such compensation first assessed and tendered."19

Coast Range Conifers elucidated that text as follows:

"Because Article I, section 18, was part of the original
Oregon Constitution, we look to the meaning of the words
that the framers used. See Bobo v. Kulongoski, 338 Or 111,
120, 107 P3d 18 (2005) (looking to dictionary relevant to
time constitutional provision adopted). In 1857, the word
'take' meant '[i]n a general sense, to get hold or gain posses-
sion of a thing in almost any manner.' Noah Webster, An
American Dictionary of the English Language (1828)
(emphasis in original). That definition implies that govern-
mental acts that result in the appropriation of private prop-
erty for public use will constitute a taking-a conclusion
that is consistent with the corollary prohibition in Article I,
section 18, against demanding or appropriating the uncom-
pensated services of any person. Webster defined 'property'
in 1828 both concretely (as '[a]n estate, whether in lands,
goods or money') and more abstractly (as [t]he exclusive
right of possessing, enjoying and disposing of a thing'). Id.
Put differently, the dictionary definition of property in 1828
was broad enough to include both the tangible or physical
thing and the legal interests pertaining to it."

339 Or at 142-43 (footnote omitted).

After exploring the historical circumstances of the
enactment and interpretation of Article I, section 18, the

19 Article I, section 18, was amended in 1920 and 1924 to add text defining
what constitutes a public use. As a result of those amendments, that constitutional
provision currently provides:

"Private property shall not be taken for public use, nor the particular serv-
ices of any man be demanded, without just compensation; nor except in the
case of the state, without such compensation first assessed and tendered; pro-
vided, that the use of all roads, ways and waterways necessary to promote the
transportation of the raw products of mine or farm or forest or water for bene-
ficial use or drainage is necessary to the development and welfare of the state
and is declared a public use."

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court in Coast Range Conifers recognized that a "classic" tak-
ing occurs when the government physically occupies or
appropriates property, but that physically invasive inten-
tional government action also may rise to the level of a tak-
ing. Id. at 145; see also Morrison v. Clackamas County, 141
Or 564, 569, 18 P2d 814 (1933) (government takes property
when it intentionally floods private property for public use).
The court also acknowledged that Article I, section 18, is not
limited to those circumstances, citing the following cases as
examples of other governmental acts that effect takings
under Article I, section 18: Boise Cascade Corp. v. Board of
Forestry, 325 Or 185, 198, 935 P2d 411 (1997) (regulations
constitute taking if they deny owner any economically viable
use of real property); Dodd v. Hood River County, 317 Or 172,
182, 855 P2d 608 (1993) (regulatory taking occurs if real
property does not retain "some substantial beneficial use");
Thornburg v. Port of Portland, 233 Or 178, 192, 376 P2d 100
(1962) (government-authorized overflights constitute taking
when they deny owner use and enjoyment of property);
McQuaid v. Portland & V. R'y Co., 18 Or 237, 22 P 899 (1889)
(government act of placing railway in a public street and
thereby denying owner access to street constitutes taking);
accord Iron Works v. O.R. & N. Co., 26 Or 224, 228-29, 37
P 1016 (1894) (explaining and applying McQuaid). Coast
Range Conifers, 339 Or at 145.

The court explained that, although the framers may
not have anticipated the precise circumstances detailed in
those cases, the framers "would have been aware that gov-
ernmental actions that did not fit precisely within the classic
paradigm of a taking still could be 'equivalent to a taking' and
thus entitle the owner to compensation." Id. at 145-46. Thus,
the issue in Coast Range Conifers was whether the govern-
mental action at issue-a state wildlife regulation that pre-
vented plaintiff from logging approximately nine acres of a
40-acre parcel that plaintiff alleged "substantially interfered"
with its use of its property-was equivalent to the govern-
mental acts that the court had recognized as takings. The
court held that, although "[r]egulation in pursuit of public
policy" could be "tantamount to a public appropriation of pri-
vate property," the regulation at issue did not present that
circumstance. The court applied the "whole parcel rule" and

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held that the challenged rule did not deprive the plaintiff of
all economically viable use of the land and therefore did not
effect a taking. Id. at 147.

The question that this case presents is similar-
whether this court will recognize a condition of development
that requires construction of off-site improvements as the
modern "equivalent" of a physical taking.20 Plaintiff does not
argue that that condition deprives it of all economically via-
ble use of its land or is of comparable severity and thereby is
tantamount to a physical taking. Plaintiff contends instead
that the city's action constitutes a taking because (1) Article
I, section 18, applies to the taking of personal property such
as livestock or crops, see Hawkins v. City of La Grande,
315 Or 57, 67, 843 P2d 400 (1992); Coos Bay Oyster Coop. v.
Highway Com., 219 Or 588, 596, 348 P2d 39 (1959); Bowden
v. Davis et al, 205 Or 421, 434-35, 289 P2d 1100 (1955) (each
so applying Article I, section 18); (2) the materials necessary
for plaintiff to construct off-site improvements are personal
property; and (3) plaintiff was required to transfer those
materials to the city.

Although we agree that Article I, section 18, extends
to the taking of personal, as well as real, property, we disa-
gree that the city effected a taking of plaintiff's personal
property in this case. As we explained in our analysis of the
federal constitution, the city did not acquire personal prop-
erty that plaintiff owned; it required that plaintiff construct
public improvements that previously did not exist. That was
the functional equivalent of requiring that plaintiff make a
monetary payment to the city for a specific purpose-the con-
struction of public improvements.

At the time that the Oregon Constitution was
adopted, there was at least a question about whether the gov-
ernment's imposition of such monetary obligations impli-
cated the power of eminent domain, and arguably a consen-
sus that it did not. In 1851, the New York Court of Appeals
considered the constitutionality of special assessments

20 In Coast Range Conifers, the court took care to note that the categories of
claims that it described "do not exhaust the field; other categories exist," citing, as
an example, condemnation blight cases as a discrete category of takings cases. 339
Or at 147 n 12.

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imposed to pay the cost of grading and pavement of roads.
People ex rel. Griffin v. City of Brooklyn, 4 NY 419 (1851). The
court began by noting that taxation and eminent domain
"rest substantially on the same foundation": In both circum-
stances, the government takes property for public use, and in
both cases, it provides compensation-in the case of taxation,
by the protection and increased value presumed to result
from the government services paid for by the tax. Id. at 422-
23. Nevertheless, the court explained, the power of taxation
was distinct from the power of eminent domain. One of the
distinctions that the court made was that "[m]oney can
always be had by taxation; lands can not [sic]; and therefore
lands may be taken by right of eminent domain, but money
may not." Id. at 424.21 The California Supreme Court also
noted that distinction in Emery v. San Francisco Gas Co., 28
Cal 345, 350-54 (1865), quoting extensively from People ex rel.
Griffin, and concluding that "assessments for improvements,
upon whatever principle distributed, are not taking private
property for public use" because special assessments take only
money; "[t]he property referred to in the Constitution
for which special compensation must be made, is something
other than money, as where land is taken to be used as a
street."

In 1867, a legal treatise by the Chief Justice of the
Vermont Supreme Court agreed:

"The principal point of difference [in recent cases] has been
to determine where taxation ends, and the tenure of the
right of eminent domain begins. Since the decision of the

21 The court also explained, however, that equitable apportionment of the
assessment-not merely the fact that it involved money-was necessary to its con-
clusion that the assessment was a tax rather than a taking. The court noted that
the expenses of grading and paving the street could have been raised by a general
tax, but the legislature had chosen to place the burden on those "whose lands were
benefited by the work, and to impose it on them in proportion to the benefit they
respectively received therefrom." Id. at 425. Specifically, the legislature

"professed to apportion the tax according to the maxim, that 'he who receives
the advantage ought to sustain the burthen,' and to exact from each of the par-
ties assessed no more than his just share of the burthen according to this equi-
table rule of apportionment. The assessment, therefore, was taxation, and not
an attempt to exercise the right of eminent domain."

Id. Because the assessment was a tax, "any sound objection to the assessment as a
tax * * * must be an objection which applies to the principle on which the tax is
apportioned[.]" Id.

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case of [People ex rel. Griffin], the courts seem very compos-
edly to have sunk down into the quiet conviction that it is
nothing but taxation, and that where the municipal author-
ities assess the land to its full value for the purpose of
assumed improvements, more or less remote from the land,
and without regard to the extent of the ratio of equalization,
it is still nothing but taxation."

Isaac F. Redfield, 2 The Law of Railways 389 (1867) (foot-
notes omitted). And in 1868, Thomas Cooley also asserted
that the right to eminent domain can be exercised over every
species of property except money and rights of action.
Thomas M. Cooley, A Treatise on the Constitutional
Limitations 526-27 (1868).

In our view, there is not any logical way to apply a
takings analysis to the imposition of new monetary obliga-
tions.22 As the Supreme Court helpfully explained in Lingle, a
takings analysis assumes that the government has the power
to acquire the property taken; it requires only that the gov-
ernment pay just compensation for that property. It does not
make sense to say that, although government has the power
to impose a monetary obligation, it must repay the value
received as just compensation. The real objection that a prop-
erty owner has to the imposition of a monetary obligation in
excess of what is necessary to mitigate the impacts of devel-
opment is that the government does not have authority to
impose such an obligation, or that the obligation offends
some statutory or constitutional provision other than Article
I, section 18.

When government regulates the use of a property, it
effects a taking if it deprives the owner of all economically
viable use of the land. In that instance, the regulation of the
property is tantamount to the acquisition of the property.
When, instead, the regulation requires that the owner pay a
sum of money or use a sum of money for a particular purpose,
the regulation is not tantamount to acquisition of the prop-
erty, even when the obligation exceeds the impact of the

22 There is a difference, of course, between a government's imposition of a mon-
etary obligation and its seizure of a discrete monetary fund. See Brown, 538 US at
232 (distinguishing between tax and seizure of discrete monetary fund, and noting
that, if state had attempted to raise same funds through tax, "there would be no
question as to the legitimacy of the use of the public's money").

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development, unless, of course, the obligation is so high that
it imposes a burden tantamount to acquisition. Absent addi-
tional allegations, a property owner that alleges that a local
government has conditioned development on construction of
off-site improvements at a cost that is not roughly propor-
tional to the impacts of the development, does not allege a
taking under Article I, section 18, of the Oregon Constitution.
Plaintiff in this case did not allege such additional facts,23
and, consequently, plaintiff's claim for inverse condemnation
under the state constitution was not cognizable in state
court.

We answer the Ninth Circuit's second question, as
we have rephrased it, as follows: No, a property owner that
alleges that a city has required it to construct off-site
improvements at a cost that is not "roughly proportional" to
the impact of the development, as opposed to dedicating an
interest in real property such as granting an easement, does
not allege a taking that gives rise to a claim for just
compensation.

## III. THE VACATION OF GREENE STREET

We now address the Ninth Circuit's third certified
question:

"Under [ORS] 271.120, is a City Council's purported vaca-
tion of a street ultra vires when the petition for vacation
does not comply with the landowner consent provisions of
[ORS 271.080]?"24

23 To the contrary, the facts included in the Ninth Circuit's certification order
disclose that plaintiff had lined up tenants to occupy its corporate park, and the
city had agreed to issue temporary occupancy permits. West Linn Corporate Park
LLC v. City of West Linn, 534 F3d 1091, 1097-98 (9th Cir 2008). Furthermore, the
city contends that after it imposed the conditions of development, but before plain-
tiff acquired the property, plaintiff's predecessor in interest sold the property for a
profit of more than $500,000.

24 The certified question identified ORS 271.120 as the source of the landowner
consent provisions. That appears to have been a clerical error on the part of the
Ninth Circuit. As the court correctly noted in its discussion of the issues, ORS
271.080 provides the landowner consent requirements at issue. See West Linn, 534
F3d at 1105 ("[T]he question we confront is whether Ordinance 1439 was an ultra
vires act because[,] although the City Council followed procedural formalities in its
adoption, the petition presented for its consideration did not fully comply with
[ORS] 271.080.").

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West Linn, 534 F3d at 1105. That question arises because the
city contended, in its counterclaim against plaintiff, that an
ordinance that the city adopted vacating a portion of Greene
Street abutting plaintiff's property is void and of no effect.

As a condition of development, the city required that
plaintiff seek vacation of the portion of Greene Street abut-
ting plaintiff's property. Show Timber, an entity that owned
and sought to develop land on the opposite side of Greene
Street, also was subject to that same condition. As the Ninth
Circuit explains in its certification order, Show Timber began
the vacation process:

"In accordance with the City's demand, Show Timber
\* \* \* employed engineers to draw up a legal description of
the proposed vacation of Greene Street. Thereafter, consent
of area property owners was obtained based on the legal
description. * * *

"The proposed vacation was then submitted to the City.
However, City planner Eric Spir objected to the proposal,
and the City ultimately demanded that Greene Street be
vacated in its entirety. The consulting engineers objected to
the City's demand because, they reasoned, through traffic
on 13th Street would be blocked as a result.

"Show Timber and [plaintiff] acquiesced. A new legal
description was prepared that included the disputed inter-
section. This second legal description was incorporated into
public notices published for proposes [sic] of the vacation
and the subsequent public hearing on the matter. Follow-
ing the public hearing, the City Council approved the vaca-
tion of Greene Street in its entirety and passed City
Ordinance No. 1439, which codified the vacation.

"[Plaintiff] contends that Ordinance No. 1439 had the
full legal effect of vacating Greene Street, and by operation
of law, a portion of the intersection vested in it free of any
interest held by the City. The City maintains that the ordi-
nance has no legal effect because it was adopted without the
consent of all necessary landowners."

West Linn, 534 F3d at 1104-05. We understand Ninth Circuit
to ask whether the procedural irregularity occasioned by the
change in legal descriptions renders the vacation of Greene
Street ultra vires.

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An act of a city or other governmental entity is ultra
vires when that act falls outside the entity's corporate pow-
ers. Keeney v. City of Salem, 150 Or 667, 669-71, 47 P2d 852
(1935). When a governmental entity's power is conferred by
statute, actions outside the scope of that power are "extra
statutory" and therefore ultra vires. See, e.g., State v. United
States F. & G. Co. et al., 125 Or 13, 24-25, 265 P 775 (1928) (so
applying to the context of state highway commission). How-
ever, where a city has broad power to act, but is required to
exercise that power in conformance with certain procedures
or limitations, a failure to so conform does not necessarily
render a given governmental action ultra vires. For example,
in Kernin v. City of Coquille, 143 Or 127, 135-36, 21 P2d 1078
(1933), the city charter granted the city council authority to
contract, but required that it do so through a competitive bid-
ding procedure. When the city failed to follow that procedure,
the court held that the doctrine of ultra vires was irrelevant:
the city possessed "ample power" to enter into contracts. Id.

To determine the extent of a city's power to vacate its
streets, the parties direct us to Oregon statute, specifically
the provisions of ORS 271.080 to 271.230, for a description of
that authority. Those provisions grant cities authority to
vacate streets and, relevant to this case, set forth two proce-
dural mechanisms for doing so.25 One mechanism allows any
person to initiate a vacation proceeding (ORS 271.080);26 the

25 A third mechanism applies to vacation of places in cities that are included in
port districts. ORS 271.180 - 271.220.

26 ORS 271.080 provides, in part:

"(1) Whenever any person interested in any real property in an incorpo-
rated city in this state desires to vacate all or part of any street, avenue, boul-
evard, alley, plat, public square or other public place, such person may file a
petition therefor setting forth a description of the ground proposed to be
vacated, the purpose for which the ground is proposed to be used and the rea-
son for such vacation.

"(2) There shall be appended to such petition, as a part thereof and as a
basis for granting the same, the consent of the owners of all abutting property
and of not less than two-thirds in area of the real property affected thereby.
\* \* \* In the vacation of any plat or part thereof the consent of the owner or own-
ers of two-thirds in area of the property embraced within such plat or part
thereof proposed to be vacated shall be sufficient, except where such vacation
embraces street area, when, as to such street area the above requirements
shall also apply. The consent of the owners of the required amount of property
shall be in writing."

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other allows a city governing body27 to do so (ORS 271.130).28
Both mechanisms call for notice and public hearing and, if
the vacation is approved, for enactment of an ordinance
vacating the street. ORS 271.110 - 271.130. Another statute
expressly provides that the authority granted by those stat-
utes is not exclusive. ORS 271.170.29 Thus, we can say with-
out hesitation that a city possesses broad power to vacate its
streets and that its failure to exercise that power in accor-
dance with specified procedures does not make its action
ultra vires.

Even if a city has broad power to act, however, its
failure to follow required procedures may, in some instances,
render its action void and of no effect. Thus, in Kernin,
although the city's action in entering into a contract was not
ultra vires, the city's failure to follow competitive bidding pro-
cedures required by its charter rendered the contract void.
143 Or at 137. We would not fully address the city's argument

27 ORS 271.005(1) defines "[g]overning body" as "the board or body in which the
general legislative power of a political subdivision is vested." The city council in
this case meets that definition.

28 ORS 271.130 provides, in part:

"(1) The city governing body may initiate vacation proceedings authorized
by ORS 271.080 and make such vacation without a petition or consent of prop-
erty owners. Notice shall be given as provided by ORS 271.110, but such vaca-
tion shall not be made before the date set for hearing, nor if the owners of a
majority of the area affected, computed on the basis provided in ORS 271.080,
object in writing thereto, nor shall any street area be vacated without the con-
sent of the owners of the abutting property if the vacation will substantially
affect the market value of such property, unless the city governing body pro-
vides for paying damages. Provision for paying such damages may be made by
a local assessment, or in such other manner as the city charter may provide.

"(4) Any property owner affected by the order of vacation or the order
awarding damages or benefits in such vacation proceedings may appeal to the
circuit court of the county where such city is situated in the manner provided
by the city charter. If the charter does not provide for such appeal, the appeal
shall be taken within the time and in substantially the manner provided for
taking an appeal from justice court in civil cases."

29 ORS 271.170 provides:

"The provisions of ORS 271.080 to 271.160 are alternative to the provisions
of the charter of any incorporated city and nothing contained in those statutes
shall in anywise affect or impair the charter or other provisions of such cities
for the preservation of public access to and from transportation terminals and
navigable waters."

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in this case if we limited our discussion to the city's broad
power to vacate its streets, and we therefore reframe the
Ninth Circuit's question as asking whether the city's failure
to obtain the consent of affected landowners rendered the
vacation ordinance void and of no effect. See Western Helicopter
Services v. Rogerson Aircraft, 311 Or 361, 370-71, 811 P2d
627 (1991) (recognizing this court's discretion to reframe and
restate certified questions).

This court has not always been consistent or clear in
defining the circumstances in which a government's proce-
dural violation renders its action void. In Nyman v. City of
Eugene, 286 Or 47, 53, 593 P2d 515 (1979), the court consid-
ered prior decisions that had used the concept of govern-
mental "jurisdiction" to resolve the issue. In some of those
cases, the court had deemed statutory requirements to be
"jurisdictional" and decided that the failure to comply with
those requirements rendered the governmental action void.
In other cases, in which the court had concluded that statu-
tory defects were not "jurisdictional," the court had presumed
that the governmental proceedings were regular despite
alleged noncompliance. Id. at 52-53. After surveying those
earlier cases, the court in Nyman concluded:

"It is difficult, if not impossible, to determine from these
cases why certain statutory requirements are considered
'jurisdictional' and others not. * * * We are now of the opin-
ion that clear analysis in this area requires that we estab-
lish criteria for determining what statutory requirements
are indispensable to the validity of the challenged action
\* \* \* and focus * * * on the specific statutory language that
permits the government to affect the rights and obligations
of its citizens."

Id. at 53 (emphasis added).

The parties in this case do not cite Nyman in their
arguments. Nonetheless, the parties address the test used in
Nyman-whether the consent procedure that the city failed
to follow was indispensible to the vacation of Greene Street
(as the city would have it) or merely a minor irregularity (in
plaintiff's terms) not affecting the ultimate validity of the
vacation.

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That analysis requires consideration of the statutory
consent procedures and the role that they play in a city's deci-
sion to vacate a street. As noted, there are two relevant stat-
utory mechanisms by which a city may vacate a city street.
ORS 271.080(1) permits any person to initiate vacation pro-
ceedings. Under that provision, the person files a petition
"setting forth a description of the ground proposed to be
vacated, the purpose for which the ground is proposed to be
used and the reason for such vacation." (Emphasis added.)
ORS 271.080(2) mandates that the person filing the petition
append, "as a part thereof and as a basis for granting the
same, the consent of the owners of all abutting property and
of not less than two-thirds in area of the real property
affected thereby." After such a petition is filed, the city either
may deny the petition or set a time for formal hearing. ORS
271.100. If the city decides to hold a hearing, it is required to
publish notice of the hearing. The notice must include, among
other things, "the ground covered by the petition." ORS
271.110(1) (emphasis added).

ORS 271.130(1)30 sets forth a second statutory mech-
anism by which a city governing body may initiate vacation
proceedings. Using that mechanism, a city proceeds without
the filing of a petition and attached legal description and
without consent of affected landowners. The city gives notice
of hearing that includes a description of the street to be
vacated to abutting and affected landowners. After hearing,
the city may vacate the street unless (1) the abutting land-
owners do not consent and the vacation will substantially
affect the market value of such property, unless the city pro-
vides for payment of damages; or (2) a majority of the affected
landowners object in writing.

The city argues that, in this case, the city council
proceeded according to the mechanism initiated by petition
outlined in ORS 271.080(1) but

"did not consider the true 'petition.' * * * Since the 'ground
proposed to be vacated' changed by the time of the City
Council hearing, it is clear that the City Council considered

30 ORS 271.130(1) provides, in part: "Notice shall be given as provided by ORS
271.110[.]”

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a different 'petition' than the one that was initially filed
after obtaining consent."

The consequence of that defect, the city maintains, is that the
vacation is "without legal effect," and to hold otherwise would
be to eliminate the need for the consent of affected land-
owners in any vacation proceeding.

Plaintiff argues, on the other hand, that that irreg-
ularity is inconsequential. Although the vacation proceed-
ings were initiated by petition and the petition did not
describe the disputed intersection, the city's notice of hearing
provided the correct description and included the disputed
intersection. The abutting landowners, plaintiff and Show
Timber, acquiesced in that change, and the record does not
disclose a written objection by any affected property owner.
Thus, had the city begun the proceedings anew when it
decided that vacation of the disputed intersection was war-
ranted, and itself initiated vacation proceedings, the vacation
could have been accomplished in accordance with the second
mechanism for street vacation outlined in ORS 271.130.
When the city revised the street description, it gave affected
landowners the same opportunity to file objections to the
vacation or to appear at the hearing and oppose the vacation
that they would have had had the city used its authority to
initiate vacation proceedings from the outset.

Understanding that the consent of affected land-
owners is significant only when vacation proceedings are ini-
tiated by petition, we look to Nyman for guidance in assess-
ing the arguments of the parties. Nyman involved the
widening of a road. There was no affirmative showing that
the widening of the road was a public necessity, that plain-
tiff's predecessor in interest had given written consent to the
widening of the road, or that the city had given plaintiff's
predecessor notice of the road widening proceeding. 286 Or at
50. The court concluded that, in light of competing legislative
goals to ensure that county actions establishing roads are
final and unassailable and also that affected property owners
receive notice of road proceedings, only the notice require-
ments were indispensable to the validity of the action. Id. at
57. Other statutory requirements that did not render the

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notice to the property owners ineffectual did not render the
county's action void. Id.

Similar competing goals are at play in street vacation
proceedings. Street vacation affects title to real property, and
stability and certainty in real property records is essential.
Cf. Bitte v. St. Helens, 251 Or 548, 551, 446 P2d 978 (1968)
(holding as untimely an appeal from city-initiated vacation
ordinance because, where "[t]itle to real property is involved,
orderliness and certainty of procedure are extremely
important"). By the same token, Oregon statute clearly
makes a provision for notice to property owners affected by
street vacation and gives them an opportunity to be heard
and oppose vacation. If, after notice, a majority of affected
property owners object in writing, the city is precluded from
vacating the street. However, consent of property owners
prior to notice and hearing is necessary only if vacation is ini-
tiated by petition. Oregon statute permits city initiation of
vacation proceedings without the prehearing consent of
affected landowners. Thus, that consent is not indispensible
to city street vacation, and, in answer to the Ninth Circuit's
third question, we hold that the absence of such consent does
not render the vacation ordinance void and of no effect.31

The certified questions are answered.

KISTLER, J., concurring in part and dissenting
in part.

West Linn Corporate Park (WLCP) filed this action
in state court, claiming that the City of West Linn (the city)
took its property in violation of the state and federal consti-
tutions when it required WLCP, as a condition of develop-
ment, to pay for off-site improvements. The city removed the
case to federal court, and the United States Court of Appeals
for the Ninth Circuit certified three questions to this court.

31 In reaching that conclusion, we do not decide that affected landowners would
not (or in this case did not) have a right to challenge the validity of the city action.
The existence of such remedies is not the question that the Ninth Circuit poses.
Instead, as we understand it, the Ninth Circuit asks whether the city ordinance, as
it stands, is void. We answer that the failure to satisfy the consent requirements of
ORS 271.080 does not render the city's otherwise valid exercise of its power void or
without legal effect.

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See ORS 28.200 (authorizing this court to accept certain cer-
tified questions). I agree with the majority's answer to the
first and third questions but would answer the Ninth
Circuit's second question differently. Specifically, I would
decline to give an opinion whether requiring off-site improve-
ments constitutes an exaction for the purposes of the Fifth
Amendment. Not only does ORS 28.200 limit certified ques-
tions to issues of state law, but there is no need for this court
to offer the Ninth Circuit our opinion on federal law.

In Williamson Planning Comm'n v. Hamilton Bank,
473 US 172, 105 S Ct 3108, 87 L Ed 2d 126 (1985), the Court
held that a federal takings claim will not be ripe in two
instances. First, a federal regulatory takings claim will "not
[be] ripe until the government entity charged with imple-
menting the regulations has reached a final decision regard-
ing the application of the regulations to the property at
issue." Id. at 186; see MacDonald, Sommer & Frates v. Yolo
County, 477 US 340, 351, 106 S Ct 2561, 91 L Ed 2d 285
(1986) (explaining that the resolution of a regulatory takings
claim depends on first knowing "the extent of permitted
development" on the property). Second, "if a State provides
an adequate procedure for seeking just compensation,
the property owner cannot claim a violation of the [Fifth
Amendment] Just Compensation Clause until it has used the
procedure and been denied just compensation." Id. at 195.

In its opinion certifying the three questions to us, the
Ninth Circuit explained that, in this case, only the second
prong noted in Williamson-whether Oregon "provides an
adequate procedure for seeking just compensation"-is at
issue. West Linn Corporate Park v. City of West Linn, 534 F3d
1091, 1100 (9th Cir 2008). And the Ninth Circuit's opinion
suggests that the first two questions that it has certified are,
in its view, necessary to resolve that issue. Id. For the rea-
sons explained below, I would give a different answer to the
court's second question.

The Ninth Circuit's second question asks whether
requiring a property owner to pay for an off-site improvement
as a condition of development constitutes an exaction. In
explaining its question, the Ninth Circuit notes that the
Oregon Court of Appeals held, in one decision, that such a

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requirement would constitute an exaction under the Fifth
Amendment but, in a later decision, questioned that holding.
See id. at 1102-04 (discussing Oregon Court of Appeals deci-
sions). As both the majority and I understand the Ninth
Circuit's second question, it invites us to explain whether, in
our view, requiring a developer to pay for off-site improve-
ments constitutes an exaction under the Fifth Amendment.
The majority accepts that invitation. I would decline it.

To the extent that the Ninth Circuit asks for our
views on the Fifth Amendment, it asks for more than ORS
28.200 permits us to give. ORS 28.200 provides that we may
answer certified questions submitted by other courts to
resolve potentially determinative issues of Oregon law. See
ORS 28.200 (authorizing the Oregon Supreme Court to
accept certified questions regarding the "law of this state");
Western Helicopter Services v. Rogerson Aircraft, 311 Or 361,
365, 811 P2d 627 (1991) (explaining that the certified ques-
tion must "concern Oregon law, rather than the law of some
other jurisdiction"). As the terms of that statute make clear,
we may answer only questions of Oregon, not federal, law.1

Nor does Williamson require us to give the Ninth
Circuit our opinion on federal law. The ripeness concern
raised in Williamson entailed a more limited inquiry. The
substantive issue in Williamson was whether a government
regulation that temporarily prevented a property owner from
using its property constituted a taking in violation of the
Fifth Amendment. 473 US at 185 (identifying that issue).
The Court observed that the issue was an open one but
declined to reach it because the issue was not ripe. Id. It
explained that a state violated the Fifth Amendment only if it
took property without providing an adequate procedure for
obtaining just compensation. 473 US at 194-95. The Court
noted that, under the applicable state law, a property owner
claiming that restrictive zoning constituted a taking could
bring an "inverse condemnation" claim in state court to
recover just compensation. See id. at 196 (discussing Tennessee

1 There may be instances in which answering certified questions of state law
requires us to discuss federal law. See Klamath Irrigation District v. United States,
348 Or 15, 38 n 15, 227 P3d 1145 (2010). This is not one of them.

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law). Without some showing that the state's inverse condem-
nation procedure was unavailable or inadequate, the
existence of that procedure was sufficient for the Court to
hold that "until [the property owner] has utilized that proce-
dure, its taking claim [in federal court] is premature." Id. at
197.

In Williamson, the Court did not ask whether the
Tennessee courts would recognize that a temporary depriva-
tion constituted a taking before holding that the property
owner's failure to bring its claim in the Tennessee courts
meant that its claim in federal court was not ripe. Rather, the
Court held that the Fifth Amendment claim that the prop-
erty owner filed in federal court was not ripe, without regard
to whether the property owner would win or lose on the mer-
its of its Fifth Amendment claim in state court. Conversely,
when the only remedy available in state court for a tempo-
rary taking was a declaratory judgment, and not damages,
the Court held that the available state procedures were not
adequate to provide "just compensation." First Lutheran
Church v. Los Angeles County, 482 US 304, 312 and n 6, 107
S Ct 2378, 96 L Ed 2d 250 (1987); see Williamson, 473 US at
194 n 13 (suggesting that conclusion). The Court accordingly
proceeded to reach the substantive federal question in First
Lutheran-whether regulations that temporarily deprive a
property owner of the use of its property violate the Fifth
Amendment-that it had declined to reach in Williamson.

In my view, the only question raised by the second
prong in Williamson is whether the procedures for obtaining
just compensation in the Oregon courts are adequate.
Williamson does not require a federal court to determine how
the state court will rule on the merits of the landowner's fed-
eral takings claim. Were the rule otherwise, the United
States Supreme Court would have asked in Williamson
whether the Tennessee courts would have recognized a tem-
porary taking before holding that the property owner's fail-
ure to bring its takings claim initially in the Tennessee courts
meant that its federal takings claim was not ripe. The Court
did not do so, and there is no need for us to tell the Ninth
Circuit how we would rule on the substantive federal
question in this case. It is or should be sufficient to say

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that a property owner who alleges that a local government
requirement constitutes an exaction that violates the Fifth
Amendment may bring that claim in the Oregon courts and
receive all the compensation that the Fifth Amendment
requires. Answering whether the property owner would win
or lose on its substantive federal claim goes beyond what
ORS 28.200 permits and Williamson requires.

There is a suggestion in the Ninth Circuit's opinion
that it views the scope of an "inverse condemnation claim" as
presenting a question of state law, even when the source of
law that gives rise to that claim is the Fifth Amendment. As
a matter of Oregon law, however, there is no claim for
"inverse condemnation" as such. Suess Builders v. City of
Beaverton, 294 Or 254, 258 n 3, 656 P2d 306 (1982). Rather,
the phrase "inverse condemnation" is

"only 'the popular description of a cause of action [which we
would now refer to as a claim for relief] against a govern-
ment defendant to recover the value of property which has
been taken in fact by the government defendant, even
though no formal exercise of the power of eminent domain
has been attempted by the taking agency.'"

Id. (quoting Thornburg v. Port of Portland, 233 Or 178, 180
n 1, 376 P2d 100 (1963)); accord United States v. Clarke, 445
US 253, 257, 100 S Ct 1127, 63 L Ed 2d 373 (1980). As the
court explained in Suess Builders, a claim for relief that a
government action unconstitutionally took a person's prop-
erty preceded the use of the phrase "inverse condemnation"
as a "popular description" of that claim, 294 Or at 258 n 3,
and the nature of the claim turns on the substantive law that
gives rise to it, see First Lutheran, 482 US at 315 (explaining
that form of relief "d[oes] not change the essential nature of
the claim"). Describing a claim for relief as an inverse con-
demnation claim does not convert a claim that finds its
source in the federal constitution into a state law claim on
which we may offer an opinion pursuant to ORS 28.200. For
that reason, I would not answer the Ninth Circuit's second
question as the majority does.2

2 This case also raises the question of how, if at all, the second prong of
Williamson applies when a property owner files its takings claim initially in state
court, but the defendant removes the case to federal court. That question presents

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The Ninth Circuit's first question, by contrast, asks
our opinion on an issue of state law. It asks whether a prop-
erty owner bringing a takings claim for an alleged exaction in
state court would first have to exhaust its administrative
remedies. Citing the reasons typically advanced for requiring
exhaustion of administrative remedies, the majority holds
that exhaustion is required in state court as a prerequisite to
bringing a takings claim. As the majority correctly clarifies,
we would not require exhaustion for a Fifth Amendment tak-
ings claim brought pursuant to 42 USC section 1983. See
Patsy v. Florida Board of Regents, 457 US 496, 516, 102 S Ct
2557, 73 L Ed 2d 172 (1982) (holding that courts may not
require exhaustion for actions brought pursuant to section
1983).3 We would, however, require exhaustion for other
claims alleging that an exaction constituted an unconstitu-
tional taking.4 Some questions remain regarding how that
state court exhaustion requirement would affect the issue
whether WLCP's federal takings claims are ripe for the pur-
poses of Article III.5 However, those questions are issues of
federal law for the Ninth Circuit.

an issue of federal law for the federal courts, and the majority properly declines to
address it.

8 Williamson is not to the contrary. The Court was careful to explain in
Williamson, in discussing the first prong of its ripeness analysis, that the require-
ment that a property owner apply for a variance or take similar steps before bring-
ing a federal takings claim in federal court was not an exhaustion requirement. 473
US at 192-93. That requirement was instead an aspect of ripeness and resulted
from the peculiar nature of a regulatory takings claim; a federal court cannot tell
whether a local government regulation goes too far and thus constitutes a taking
until the local government has finally decided the extent to which development will
be permitted. Id.

4 A landowner may bring a federal takings claim in state court in one of two
ways. "[A] landowner is entitled to bring an action in inverse condemnation [for a
Fifth Amendment taking] as a result of the self-executing character of the [Fifth
Amendment] with respect to compensation." First Lutheran, 482 US at 315-16
(internal quotation marks omitted). Alternatively, a landowner may bring a federal
takings claim pursuant to section 1983. As the Court explained in Patsy, the pro-
hibition against exhaustion derives from congressional intent in enacting section
1983. It does not extend to federal claims brought pursuant to some other claim for
relief.

$ For instance, as long as any Oregon exhaustion requirement is reasonable, it
is not clear how the presence or absence of a state court exhaustion requirement
affects the question that the second prong of Williamson poses-the adequacy of
the state judicial procedures for affording just compensation.

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For the reasons stated above, I concur in part and
dissent in part from the majority's answers to the certified
questions.

Linder, J., joins in this concurring and dissenting
opinion.