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Date: 03-08-2017

Case Style: Sandra Diesel v. Jackson County

Case Number: A163267

Judge: Shorr

Court: Court of Appeals of Oregon on appeal from the Land Use Board of Appeals

Plaintiff's Attorney: Ross A. Day and Matthew Swihart

Defendant's Attorney: Joel Benton

Description: Petitioner seeks judicial review of an order by the
Land Use Board of Appeals (LUBA) affirming the adoption
of two ordinances by respondent Jackson County. Those ordinances
amended the county’s Land Development Ordinance
(LDO) to establish, among other things, the types of land on
which medical and commercial marijuana cultivation would
be permitted. In the first of her two assignments of error,
petitioner contends that LUBA erred when it concluded
that the ordinances’ prohibition of marijuana production
on lands zoned “rural residential” was consistent with the
county’s comprehensive plan. In her second assignment of
error, petitioner contends that LUBA erred when it concluded
that the ordinances’ prohibition of marijuana production
on rural residential lands is a “reasonable regulation”
of marijuana cultivation authorized by ORS 475B.340. As
explained below, we affirm LUBA’s decision.
We begin with a brief overview of the relevant law
and procedural history. In 1998, Oregon voters approved the
Oregon Medical Marijuana Act (OMMA), legalizing under
state law the production and sale of marijuana for medical
purposes. Or Laws 1999, ch 4. The OMMA was codified in
ORS chapter 475B. In 2014, Oregon voters approved Ballot
Measure 91, which legalized the production and sale of marijuana
for recreational use under state law. Or Laws 2015,
ch 614.1 Following the passage of Ballot Measure 91, the
legislature adopted additional legislation enacting changes
to both the medical and recreational marijuana statutes,
including the provisions at issue in this appeal. Ballot
Measure 91 and the subsequent enactments were also codified
in ORS chapter 475B.
ORS 475B.370 and ORS 475B.340 are central to
this case. As relevant, ORS 475B.370 establishes that marijuana
is “a crop” as the term is used in various farming and
1 The manufacture, distribution, dispensation, and possession of marijuana
are illegal under federal law, even when authorized by state law. See Federal
Controlled Substances Act, 21 USC § 801 et seq.; Gonzales v. Raich, 545 US 1,
29, 125 S Ct 2195, 162 L Ed 2d 1 (2005); United States v. Oakland Cannabis
Buyers’ Cooperative, 532 US 483, 486, 121 S Ct 1711, 149 L Ed 2d 722 (2001) (no
medical necessity exception to federal prohibition of marijuana production and
distribution).
Cite as 284 Or App 301 (2017) 303
agriculture statutes. Those statutes include ORS 215.203,
which authorizes local governments to adopt “exclusive farm
use” zones and defines “farm use,” in part, as “the current
employment of land for the primary purpose of obtaining
a profit in money by raising, harvesting and selling crops.”
ORS 475B.340 authorizes local governments to “adopt ordinances
that impose reasonable regulations” on businesses
licensed to produce or process marijuana or sell marijuana
wholesale or retail under Oregon’s recreational marijuana
scheme. ORS 475B.340(2). The statute sets out some exceptions
to what types of conditions a local government may
impose on those activities and defines the term “reasonable
regulations” to include, among other things, “reasonable limitations
on where a premises for which a license or certificate
for [recreational marijuana production, processing, or wholesale
or retail sale] may be located.” ORS 475B.340(1)(g).2
The facts relevant on review are brief and are
drawn from LUBA’s order and the local government record.3
McPhillips Farm, Inc. v. Yamhill County, 256 Or App 402,
404, 300 P3d 299 (2013). Following the enactment of the
relevant provisions of ORS 475B.340 and ORS 475B.370, the
county approved the two ordinances that are the subject of
this appeal: Ordinance 2016-3 and Ordinance 2016-4. The
two ordinances are identical, except that Ordinance 2016-4
was enacted as an emergency ordinance of temporary
duration and has since been superseded by the permanent
Ordinance 2016-3. For the sake of clarity, we refer to both
the ordinances as “the ordinance” for the remainder of this
opinion. The ordinance amended the county’s LDO, which
regulates land use within the county, to include various
2 ORS 475B.500 similarly authorizes “reasonable regulations” on medical
marijuana production and, as relevant, similarly defines “reasonable regulations”
as including “[r]easonable limitations on where the marijuana grow site
of a person designated to produce [medical marijuana] * * * may be located.” The
zoning provisions at issue in this case treat recreational and medical marijuana
production the same. Accordingly, and because petitioner focuses her arguments
on the recreational-use statutes, we similarly refer primarily to those statutes in
our analysis.
3 We note that petitioner asserts that, as a factual matter, marijuana was “an
outright permitted use” on rural residential land in the county before the enactment
of the ordinances, while respondent asserts that it was not. We do not decide
that issue, however, as it is immaterial to our conclusion that LUBA’s order was
not “unlawful in substance.”
304 Diesel v. Jackson County
regulations on marijuana-related land use. Among various
changes it made, the ordinance established the types of land
on which medical and recreational marijuana production
would be allowed and on which types it would be prohibited.4
Section 2 of the ordinance, under the heading Legal
Findings, states that, as a result of the recent legislative
enactments, “recreational and medical marijuana production
are considered a ‘farm use.’ The Board of Commissioners
finds the Jackson County Land Development Ordinance does
not allow a ‘farm use’ to occur within the Rural Residential
and Rural Use zoning districts.” The ordinance amended the
LDO to allow marijuana production on lands zoned exclusive
farm use (EFU), forest, and general and light industrial.
Marijuana production was not authorized on lands
zoned rural residential, rural use, urban residential, and
commercial.
Petitioner, a resident of Jackson County, testified
against the ordinance before the county board of commissioners.
After the board of commissioners adopted the ordinance,
petitioner appealed to LUBA, arguing that the ordinance
was unlawful because it conflicted with the county’s
comprehensive plan. Petitioner also argued that the ordinance
was invalid because it was not a “reasonable regulation”
as described and authorized under ORS 475B.340.
Specifically, petitioner argued that the county had to
demonstrate that it had a “substantial government interest”
in adopting the regulation in order for it to be reasonable.
LUBA ultimately rejected petitioner’s arguments and
affirmed the county’s adoption of the ordinances. Petitioner’s
arguments and LUBA’s determination of petitioner’s assignments
of error are discussed in the course of our analysis
below.
We begin our analysis with our standard of review.
On review, we may reverse or remand a LUBA order only
if it is “unlawful in substance or procedure,” “unconstitutional,”
or “not supported by substantial evidence in the
whole record as to facts found” by LUBA. ORS 197.850(9).
4 By their terms, the zoning regulations on marijuana production at issue in
this appeal do not apply to marijuana produced in smaller quantities exclusively
for personal use.
Cite as 284 Or App 301 (2017) 305
Petitioner appears to contend in each assignment of error
that the LUBA order is “unlawful in substance,” in that
LUBA erroneously interpreted the law. For that reason,
our role is to determine whether LUBA has made a “mistaken
interpretation of the applicable law.” Mountain West
Investment Corp. v. City of Silverton, 175 Or App 556, 559,
30 P3d 420 (2001). Based on our analysis below, we conclude
that LUBA correctly interpreted the applicable law.
In petitioner’s first assignment of error, she contends
that LUBA “erred as a matter of law” when it concluded
that the ordinance did not conflict with the county’s
comprehensive plan. Before LUBA, petitioner argued that,
“[t]o the extent the Ordinance prohibits marijuana production
(a farm use) on rural residential lands within the
County, the Ordinance conflicts with the County’s comprehensive
plan,” and is therefore invalid. See ORS 197.835(7)(a)
(“[LUBA] shall reverse or remand an amendment to a land
use regulation or the adoption of a new land use regulation
if * * * [t]he regulation is not in compliance with the comprehensive
plan.”). Petitioner argued that the county’s comprehensive
plan “requires that marijuana be allowed to be
grown on rural residential lands” and, as evidence, quoted
a paragraph from the comprehensive plan that discusses
the benefits of small-scale agriculture in rural areas where
“parcelization and/or residential development” has occurred.
That paragraph states:
“However, in areas where parcelization and/or residential
development has already occurred, small scale agriculture
is often the only way to keep land in productive farm use.
Encouraging a variety of types of agriculture in the county
provides a greater possibility of innovation and resiliency
in the agricultural economy.”
Additionally, petitioner quoted language from a memorandum
and a staff report by the county’s Development Services
Department in which county staff appear to anticipate that
marijuana production would be authorized on rural residential
lands.
On appeal, LUBA concluded that petitioner failed to
show that the ordinance was inconsistent with the county’s
comprehensive plan.
306 Diesel v. Jackson County
“The provision of the [comprehensive plan] that petitioner
relies on merely describes the predominant farm
uses in the county and describes small scale agriculture on
parcelized lands as one of those farm uses. The language
does not require the county to allow marijuana production
on [rural residential]-zoned land and the county’s decision
to prohibit it on those lands is not inconsistent with anything
in the [comprehensive plan] cited by petitioner.”
(Emphasis in original.) LUBA did not address the commentary
from the county staff included in the memorandum and
the staff report.
On review to us, petitioner argues that LUBA “erred
as a matter of law” in concluding that the ordinance does
not conflict with the county’s comprehensive plan. Petitioner
asserts that the ordinance’s prohibition of marijuana production
on rural residential lands “directly conflicts with
the County’s comprehensive plan[,] which states the purpose
of rural residential lands is to allow small-scale agriculture.”
We disagree. The language cited by petitioner from
the comprehensive plan is not language of requirement—
neither grammatically nor substantively. As LUBA noted,
the quoted paragraph makes a broad declarative statement,
but does not instruct or require the county to take any particular
action.
Even assuming, without deciding, that the paragraph
does require the county to encourage “a variety of
types of agriculture” in “areas where parcelization and/or
residential development has already occurred,” the county’s
decision not to allow marijuana production on rural residential
lands—just one type of agricultural use—would
not violate that command, because requiring the county to
encourage “a variety of types of agriculture” is not the same
as requiring the county to permit all types of agriculture.
(Emphasis added.)
Finally, as to the statements by the county planning
staff, petitioner does not argue—nor can she—that
such statements are binding interpretations of the county
comprehensive plan such that they could be understood to
impose a requirement on the county where the text of the
comprehensive plan itself does not. Accordingly, LUBA did
Cite as 284 Or App 301 (2017) 307
not legally err in rejecting petitioner’s arguments related to
the county’s comprehensive plan.
In petitioner’s second assignment of error, she argues
that LUBA erred in concluding that the ordinance was
a “reasonable regulation” authorized by ORS 475B.340.
Petitioner does not contend that LUBA erred in reviewing
the evidence; rather, petitioner contends that LUBA mistakenly
applied the law. As noted, we therefore review to
determine if LUBA’s order is unlawful in substance because
it made a “mistaken interpretation of the applicable law.”
Mountain West Investment Corp., 175 Or App at 559.
In her arguments before LUBA, petitioner contended
that, because the county did not make a finding
in the ordinance declaring “any substantial governmental
interest the Ordinance is supposed to promote,” the county
failed to sufficiently justify its decision not to authorize marijuana
production on lands zoned rural residential, making
that restriction invalid.5 Noting that ORS 475B.340 is captioned
“Local time, place and manner regulations,” petitioner
asserted:
“Of course, the phrase ‘time, place and manner’ is a
term of art in the law to denote the limits to which the government
may restrict a right guaranteed a person by law.
‘Time, place and manner’ regulations are most often litigated
in the context of cases involving freedom of speech.”
Petitioner then cited a pair of United States Supreme Court
cases that each considered whether a government regulation
restricting rights guaranteed by the First Amendment
to the United States Constitution was “reasonable.” Those
cases held, respectively, that such restrictions are permissible
only where the regulation advances a “substantial
government interest,” United States v. Albertini, 472 US
675, 689, 105 S Ct 2897, 86 L Ed 2d 536 (1985), and the
restriction is “narrowly tailored” to that interest, Ward v.
5 Petitioner also briefly argued before LUBA that the ordinance was not a
“reasonable regulation” because it conflicted with the comprehensive plan. As
previously noted, LUBA rejected the argument that the ordinance conflicted with
the comprehensive plan, and thus did not address it again under petitioner’s second
assignment of error. Because we conclude that LUBA did not err in that
respect, we also do not address petitioner’s argument in connection with her second
assignment of error.
308 Diesel v. Jackson County
Rock Against Racism, 491 US 781, 791, 109 S Ct 2746, 105
L Ed 2d 661 (1989).6 Accordingly, petitioner argued that,
in the absence of a sufficient governmental interest, “the
Ordinance is nothing more than an arbitrary execution of
the County’s police powers.”
As to that argument, LUBA concluded that petitioner
had “not established that marijuana production is
a protected interest under the First Amendment,” and,
therefore, the analogy to First Amendment case law was
inapposite.
“That ORS 475B.340 and 475B.500 use the similar phrase
‘reasonable regulation’ in listing the kinds of regulations
that a county or city can impose on the sale or production of
recreational and medicinal marijuana does not mean that
the legislature intended to import into review of local zoning
codes the doctrines and standards of review that courts
have applied to First Amendment speech cases.”
On review, petitioner argues that LUBA erred as a matter
of law and generally repeats the same argument, asserting
again before us that the ordinance is invalid because the
county failed to make a finding that identified “any substantial
government interest” advanced by the zoning decision.
We agree with LUBA that petitioner’s citation to
First Amendment case law is unavailing. Petitioner cites
no authority for the proposition that a county’s decision to
prohibit marijuana production in some zoning districts, but
not others, is subject to heightened constitutional scrutiny
such that the county was required to justify its decision by
identifying a “substantial government interest.” Here, the
county’s contested zoning decisions are authorized, both
generally and specifically, by statutes that petitioner does
not contend are unconstitutional or otherwise invalid. See
6 Petitioner cited a third case in which the Oregon Supreme Court ruled that
an order of the Oregon State Board of Barber Examiners setting the minimum
price a barber could charge for a haircut at $0.75 was a violation of the Due
Process Clause of the Fourteenth Amendment to the United States Constitution.
Christian et al. v. La Forge, 194 Or 450, 477, 242 P2d 797 (1952). Petitioner cites
Christian again on appeal to argue that “[a] legislative action which is arbitrary
is by definition unreasonable.” However, petitioner makes no arguments under
the Fourteenth Amendment, and we conclude that neither the facts nor holding
of Christian inform the legal issue in this case.
Cite as 284 Or App 301 (2017) 309
ORS 215.050(1) (authorizing county governments to adopt
and revise zoning ordinances); ORS 475B.340 (authorizing
local governments to “adopt ordinances that impose reasonable
regulations” on the production and sale of recreational
marijuana, and listing as an example of such regulations
“[r]easonable limitations on where a premises for which a
license [to produce marijuana] may be located”).
We pause here to note that, based on the arguments
presented, we are not deciding what is a “reasonable regulation”
of marijuana production under ORS 475B.340. Rather,
we merely hold that, contrary to petitioner’s contention,
Jackson County did not need to demonstrate a “substantial
government interest” to reasonably regulate marijuana production
on rural residential lands.
We turn to an additional argument that petitioner
asserts before us but did not fully develop before LUBA.
Petitioner contends that the ordinance, at least as applied
to the facts that exist in Jackson County, is unreasonable
because, “[b]y making the overwhelming majority of grow
sites in Jackson County illegal, the County has managed
to effectively eliminate grow sites in Jackson County.” We
understand petitioner’s argument to be that LUBA made a
“mistaken interpretation of the applicable law,” Mountain
West Investment Corp., 175 Or App at 559, when determining
what is a “reasonable regulation” as applied to the facts
existing in Jackson County.
Petitioner did not develop a significant factual record
on this issue before LUBA. Before LUBA, petitioner cited
a statement that Representative Ken Helm made during
deliberations of House Bill (HB) 3400 (2015), the bill that
enacted the provisions authorizing and defining “reasonable
regulations” on recreational marijuana production. In
discussing those “reasonable regulations,” Representative
Helm stated, in relevant part:
“I want to say a brief thing about what it means to be reasonable
because it is a subjective term. * * * The legislative
history that is important to discuss is for those jurisdictions
which allow medical and adult-use recreational marijuana
and do not opt out in some prescribed fashion, they
310 Diesel v. Jackson County
may not use their local zoning code to effectively eliminate
marijuana businesses or growth sites in their communities
by, for example, finding zones in which it is very difficult
to site these businesses, or putting them on the edge
of town where nobody wants to go, or in some other way
making it so difficult for these businesses to be sited that
the businesses won’t site in their communities. That’s not
reasonable.”
Audio Recording, House Third Reading, HB 3400, June 24,
2015, at 1:45:30 (statement of Rep Ken Helm), https://olis.
leg.state.or.us (accessed Mar 2, 2017). In her briefing before
LUBA, petitioner did not further explain how that legislative
history supported her argument. In her oral argument
before LUBA, petitioner argued that Jackson County had
effectively eliminated sites for growing marijuana in the
county by barring such sites in rural residential lands where
county residents currently grew medical marijuana.
As to the legislative history cited by petitioner,
LUBA concluded that, rather than help petitioner, “that
legislative history tends to defeat petitioner’s argument.”
LUBA focused on Representative Helm’s statement that, in
his view, an unreasonable regulation would be one where a
local government attempts to “use their local zoning code
to effectively eliminate marijuana businesses or growth
sites” by zoning those businesses or grow sites into difficult
locations or otherwise “making it so difficult for these
businesses to be sited that the businesses won’t site in their
communities.” Audio Recording, House Third Reading,
HB 3400, June 24, 2015, at 1:45:30 (statement of Rep Ken
Helm), https://olis.leg.state.or.us (accessed Mar 2, 2017).
LUBA concluded:
“Given that the county allows marijuana production in
the EFU zone and on lands zoned farm and forest, which
together comprise more than a million acres in the county,
and on industrial zoned land, the concerns stated by that
legislator about the reasonableness of zoning regulations
do not appear to be present in this case.”
LUBA drew the one-million-acre figure from a footnote in
the county’s brief, which, in turn, relied on statistics presented
to the county when it enacted the ordinance.
Cite as 284 Or App 301 (2017) 311
Petitioner argues to us that, contrary to LUBA’s
statement, “there are not more than a million acres in the
county of land zoned EFU, forest uses and industrial uses.”
Rather, petitioner argues, the record reflects that there are
only 642,661 acres of land in private ownership in the EFU,
forest resource, and commercial/industrial zoning districts
in the county. Petitioner argues further that, “just because
the land is eligible to grow marijuana does not, in fact, mean
it is available to grow marijuana,” and asserts that, in 2015,
only four properties zoned EFU were either sold or listed
for sale. (Emphases in original.) Petitioner also asserts that
“most marijuana growers in Jackson County are on smaller
pieces of land, primarily zoned rural residential,” and that,
by prohibiting marijuana production on such land, “the
County has made the overwhelming majority of grow sites
in Jackson County illegal.”
Petitioner does not argue that property in the zoning
districts where marijuana production is authorized is
unsuitable for marijuana production such that the owners of
that land cannot engage in that use. Petitioner’s argument
is that, because only a few such properties happen to have
been for sale in 2015, she and others in her position do not
have easy access to that land. We note that the only evidence
petitioner presents on appeal in support of her assertion
that such land is insufficiently available is a statistic drawn
from a letter that she herself wrote to the Jackson County
Board of Commissioners stating that there were only four
EFU-zoned properties that were sold or listed for sale in
2015. However, that assertion says nothing about whether
other land was available for rent or lease under some other
agreement, let alone the availability of land in the other
zoning districts where marijuana production is authorized.
Additionally, any zoning decision that prohibits a use in
some zoning districts, but not others, will have the effect of
making that activity unavailable to certain landowners.
Based on the limited record before LUBA and the
narrow argument presented by petitioner to us, we conclude
that LUBA did not err in concluding that, as applied to the
facts before it, the ordinance was a “reasonable regulation”
of marijuana under ORS 475B.340. Here again, petitioner’s
312 Diesel v. Jackson County
argument does not call on us to define what is a “reasonable
regulation” of marijuana under ORS 475B.340 for all purposes.
Rather, it asks us to decide whether LUBA correctly
concluded that this ordinance was reasonable as applied to
the limited facts that were presented to LUBA. Even were
we to assume that there are closer to 650,000 acres—rather
than one million—of land on which a marijuana production
business could be sited in Jackson County, petitioner still
has not shown that LUBA legally erred in concluding that
the ordinance is a “reasonable regulation.” Mountain West
Investment Corp., 175 Or App at 559.
Lastly, although petitioner argues that the county
“has made the overwhelming majority of grow sites in
Jackson County illegal” by not authorizing marijuana production
on rural residential land, that argument is undercut,
first, by petitioner’s own assertion elsewhere in her brief that
the county “was actively encouraging those who are growing
on rural residential and rural use lands to make application
with the county for a ‘non-conforming use verification
permit’ in order to make legal grow operations located on
these lands”; and, second, by evidence in the record indicating
that the county did take into consideration and included
measures in the ordinance intended to allow marijuana
producers on rural residential properties an opportunity to
come into compliance with those regulations.
In sum, petitioner has not shown that LUBA’s decision
“represented a mistaken interpretation of the applicable
law.” Mountain West Investment Corp., 175 Or App at 559.
Therefore, LUBA’s order upholding the ordinance was not
“unlawful in substance.” Id.

Outcome: Affirmed.

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