We are pleased to announce that the Oregon Supreme Court affirmed the lower courts’ decisions and dismissed the Waltons’ inverse condemnation claim in the case of Walton v. Neskowin Regional Sanitary Authority. The Court rejected all of the Waltons’ arguments and agreed with those raised by Neskowin and the Government Amici (SDAO, along with League of Oregon Cities and Association of Oregon Counties, filed an amicus brief in support of Neskowin Regional Sanitary Authority).

Specifically, the Court held: (1) inverse condemnation claims can be subject to statutes of limitations, which are not unconstitutional; (2) inverse condemnation claims—whether “regulatory” takings or “physical occupations”—are subject to the six-year limitations period set by ORS 12.080(3); (3) the limitations period on a physical takings claim begins to run when the physical occupation occurs and not when the owner demands compensation and the government refuses to provide it; (4) the Waltons’ inverse condemnation clause was time barred, as any takings claim accrued when Neskowin installed the lines in the mid-1990s; and (5) the Waltons’ claim sounded in contract and was not a taking. Although the facts of this case are somewhat unique, many public entities have acquired property rights based on unrecorded and unwritten handshake deals.  Accordingly, this decision puts nearly all liability related to those agreements to rest and solidifies the constitutionality and applicability of the six-year statute of limitations governing inverse condemnation claims.

In this case, the Waltons’ father allegedly entered into an agreement with Neskowin Regional Sanitary Authority (the “Sanitary Authority”) in the 1990s, allowing the Sanitary Authority to place sewer lines on the Walton property, allegedly in exchange for a free sewer hookup when requested by Mr. Walton at a later date. After their father passed, the Walton children asked for the free sewer hookup, which the Sanitary Authority denied, having no record of any alleged agreement. The Waltons sued the Sanitary Authority for inverse condemnation and did not bring a breach of contract claim (likely because of a statute of frauds defense). The Sanitary Authority moved for summary judgment, asserting that the claim was time-barred because it was not brought within the six-year statute of limitations in ORS 12.080(3). In response, the Waltons argued that their claim was timely because any statute of limitations for takings claims is unconstitutional, and in the alternative, an inverse condemnation claim does not accrue until a demand for compensation is made (and then denied). The trial court rejected the Waltons’ arguments and granted the Sanitary Authority’s motion for summary judgment. The Waltons appealed to the Court of Appeals, which affirmed the trial court’s ruling. The Waltons then appealed to the Oregon Supreme Court, which granted review on the narrow issue of when a claim for inverse condemnation accrues.