Martin Lynch, et al. v. Mutnomah County

Portland, Oregon real property lawyer represented the Plaintiff who sued the Defendant on wrongful taking and excessive fines theories.



Plaintiffs have ALLEGED viable takings and excessive fines claims under federal law and viable takings claims under Oregon law, and these claims are not barred by collateral estoppel or res judicata. As to the timeliness of these claims, this Court holds that (1) the takings claims and excessive fines claims accrued on the expiration of the two-year Oregon statutory redemption period for foreclosed properties because that is when the property owners' rights to their properties were completely extinguished under O.R.S. 312.200; and (2) the statute of limitations is two years for federal claims and six years for state claims. Applying these principles, certain Plaintiffs' claims were filed beyond the statute of limitations and are therefore untimely. Further, equitable tolling of the statute of limitations is not appropriate because Lynch Plaintiffs fail to allege they were pursuing their rights diligently, and a change of the law is not an adequate basis for equitable tolling. This Court will exercise supplemental jurisdiction over remaining state claims. Accordingly, as detailed below, the Motions to Dismiss are GRANTED in part and DENIED in part, and Plaintiffs' declaratory judgment claims are DISMISSED as moot.



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Oregon law provides counties the authority and process for foreclosing on properties if property owners fail to pay property taxes. See O.R.S. Vol. 8, Title 29, Ch. 312. This includes the counties' authority to recover and distribute proceeds from foreclosures. O.R.S. 275.090. Plaintiffs challenge O.R.S. 275.275, which sets out the process of how those proceeds can be distributed.



After a property has been foreclosed, it is "held by the county for the period of two years from . . . foreclosure, unless sooner redeemed.” O.R.S. 312.120(1). Property owners can "redeem” their property by paying "the full amount applicable to the property under the judgment,” plus interest and a penalty. O.R.S. 312.120(2). The property owner has the right to possess the property during this redemption period. O.R.S. 312.180.



Properties not redeemed within the two-year redemption period "will be deeded to the county immediately upon the expiration of the period of redemption.” O.R.S. 312.125(2)(c); O.R.S. 312.120. At this stage, "every right or interest of any person in the property [is] forfeited forever to the county.” O.R.S. 312.125(2)(c).





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Legal issue Did the counties' retention of surplus proceeds from the sale of foreclosed properties constitute an unconstitutional taking and imposition of excessive fines under the U.S. and Oregon constitutions?



Key Phrases Takings Clause. Excessive fines claims. Oregon Constitution. Foreclosed properties. Surplus proceeds.

The Motions to Dismiss filed in Lynch, 3:23-cv-01502-IM, ECF 54 and 67, Sawyer, 3:23-cv-01971-IM, ECF 35, and Gabbert, 1:23-cv-01434-IM, ECF 31, are GRANTED in part and DENIED in part. Lynch and Sawyer Plaintiffs' facial challenges to O.R.S. 275.275 are DISMISSED with prejudice as moot. The federal claims of Gabbert Plaintiffs Newkirk, Wend, and Gabbert, all Lynch Plaintiffs, and all Sawyer Plaintiffs are DISMISSED with prejudice as time-barred. Plaintiff Sawyer's state law claim is also DISMISSED with prejudice as time-barred. This Court declines to dismiss Plaintiff Two J's state claim as time-barred at this stage. The Defendants' Motions are DENIED as to the rest of the state-law statute of limitations affirmative defenses. Lynch Plaintiffs' Motion for Leave to File an Amended Complaint, ECF 108, is GRANTED, though the Amended Complaint should account for this Court's rulings in this Opinion and Order. Gabbert Defendants' Motion to Consolidate, 1:23-cv-01434-IM, ECF 38, and Motion to Intervene, ECF 37, are DENIED. Plaintiffs have twenty-one (21) days from the issuing of this Opinion and Order to file an Amended Complaint. Defendants will have thirty (30) days from the filing of the Amended Complaint to respond.