Intangible Takings, Extraordinary Consequences New Supreme Court Guidance on Inverse Condemnation

Introduction  Inverse condemnation generally and overview of presentation.  The Oregon Supreme Court’s recent decisions in Dunn v. City of Milwaukie, 355 Or 339, 328 P3d 1261 (2014); and Hall et al. v. State ex rel. Dep’t of Transp., 355 Or 503, 326 P3d 1165 (2014).

A short history of inverse condemnation in Oregon  Proof of intent to take property for public use—the landscape before and after Morrison v. Clackamas County, 141 Or 564, 18 P2d 814 (1933).  When do non-physical interferences with property amount to a compensable taking? Sound waves, regulatory takings, condemnation blight, and other esoterica.

Dunn v. City of Milwaukie, 355 Or 339, 328 P3d 1261 (2014)  The facts: routine actions have extraordinary consequences resulting in property damage.  The holding: a reframing and clarification of the proof of intent required to establish a claim of inverse condemnation.

Dunn v. City of Milwaukie, 355 Or 339, 328 P3d 1261 (2014)  “[T]he intent element of a takings claim is fundamental in distinguishing between those actions that are the equivalent of an exercise of eminent domain and those that are actionable as ordinary torts. The power of eminent domain is affirmative in nature. It is a power exercised for a particular purpose—the public’s benefit—and intentionally. The idea that the sovereign’s power of eminent domain could be exercised through error, accident, or inadvertence, is at odds with the nature of the power itself. Inadvertent and unintended acts give rise to liability, if at all, as ordinary torts, not takings.” Dunn, 355 Or at 354.

Dunn v. City of Milwaukie, 355 Or 339, 328 P3d 1261 (2014)  “A factfinder is entitled to impute the requisite intent to take property if the invasion of the property owner’s interests was the necessary, substantially certain, or inevitable consequence of the government’s intentional acts.” Dunn, 355 Or at 358.  “[The] plaintiff’s burden [is] exacting. A plaintiff * * * must show that the government intentionally undertook its actions and that the inevitable result of those actions, in the ordinary course of events, was the invasion of the plaintiff’s property * * *.” Dunn, 355 Or at 358.

Hall et al. v. State ex rel. Dep’t of Transp., 355 Or 503, 326 P3d 1165 (2014)  The facts: a claim of intangible interference with property rights.  The holding: a restatement and rationalization of disparate strands of case law involving physical and non- physical intrusions, and a clear standard for claims of intangible “takings.”

Hall et al. v. State ex rel. Dep’t of Transp., 355 Or 503, 326 P3d 1165 (2014)  “To summarize: A de facto taking of private property can arise from various types of government actions * * *. When a governmental actor physically occupies property or invades a private property right in a way that substantially interferes with the owner’s use and enjoyment of the property, a de facto taking results.” Hall, 355 Or at 522.

Hall et al. v. State ex rel. Dep’t of Transp., 355 Or 503, 326 P3d 1165 (2014)  “By contrast, governmental regulation of the use of property or planning for the eventual taking of property for public use that reduces the property’s value generally does not result in a de facto taking.” Hall, 355 Or 522.  The only exception “arises when a regulation or planning action deprives the owner of all economically viable use of the property.” Hall, 355 Or at 522.

What Dunn and Hall mean for municipalities  More clarity and less exposure to claims involving intangible takings or extraordinary consequences.  What unanswered questions, potential pitfalls, and gray areas remain after Dunn and Hall?  Ordinary damage to property, as distinguished from destruction or irreparable damage.  Right of access to public right-of-way. See State v. Alderwoods et al., __ Or App __, __ P3d __ (Sept. 17, 2014).

Intangible Takings, Extraordinary Consequences New Supreme Court Guidance on Inverse Condemnation