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Federal Jury Finds City of Forest Grove Liable for "Absue of Power"

October 21, 2011


Following a month-long trial, a Federal Court jury found the City of Forest Grove, Oregon, and two of its employees in violation of the Takings, Equal Protection and Due Process clauses of the U.S. Constitution and awarded local residential developer David Hill Development LLC in excess of $6.5 million in damages.

"This award is one of the largest against a municipality in the state of Oregon, if not the nation," said Schwabe, Williamson & Wyatt attorney Steve Morasch, the lead attorney on the team that represented David Hill Development in the case.

The Federal Court jury verdict was handed down late afternoon on Friday, September 30, 2011. The lawsuit was originally filed in 2008 by David Hill Development, which in 2005 received a binding land-use approval from the City to develop a 217-lot subdivision in Forest Grove, Ore., located 25 miles west of Portland. The basis of the claim was that the City Engineer's Department acted unconstitutionally by delaying construction of the subdivision and adding additional costs that went beyond what was approved in the binding land-use decision, all for the purpose of benefitting other more favored local developers.

According to the complaint filed in Federal Court, the City of Forest Grove had determined as early as October 2005 that the developer's sewer routing met all code requirements. However, the City never communicated that to the developer, but instead told the developer that its plan did not meet the City's requirements and that the developer needed to make significant changes that would cost hundreds of thousands of dollars

The Schwabe, Williamson & Wyatt attorneys representing David Hill Development presented evidence that City of Forest Grove officials ignored the city attorney's advice that the "City would be ill-advised to ‘force' [David Hill Development] to pay higher costs (and significantly so in this case) simply to more easily accommodate another, upstream developer." There was also evidence that city officials were yielding to pressure brought by local Forest Grove attorney Bob Browning, who represented the other "upstream" residential developer.

"The modified sewer plan was the first of many demands that the City made, and our client was required to take on a number of other added costs, which the City did not require of other similarly situated developers," said Morasch. "The judge instructed the jury that the city could be found liable if there was an ‘abuse of power' that ‘shocks the conscience.'"

The jury found the City liable and awarded damages against the City, the City Engineer and the assistant engineer in the amount of $6,539,176.00. The jury also took the unusual step and attached a note to the verdict form that indicated that they believed additional City officials were involved.

"It is a pretty high standard to bring these types of abuse of power cases against the government," said Morasch. "I hope that municipalities realize that they do need to follow the law, not just Forest Grove, but all the government agencies, cities and counties across our great country."