TriMet sues Clackamas County (UPDATED)

TriMet has filed a lawsuit against Clackamas County, demanding that it follow through on contractual obligations related to the MLR project, specifically a few outstanding obligations concerning land near the Park Avenue station needed for the project. The County Commission is claiming that any further cooperation with TriMet on this is contingent on a popular vote, pursuant to Measure 3-401, which cannot be held until May at the earliest. TriMet claims that Measure 3-401 does not apply (retroactively) to MLR; that the County’s actions are causing delay, and is demanding the court order “specific performance” in the matter, and command the County to convey the properties (and pay the outstanding financial obligations) due to TriMet under the IGA (inter-governmental agreement), signed by the County prior to the current Commission being elected. TriMet also alleges that the matter is urgent (due to the construction schedule), and is requested expedited consideration.

The County claims that Measure 3-401 is retroactive, covers MLR, and that it is unable to make any further contributions to MLR without a vote of the people.

The complaint. Oregonian coverage.


Some analysis, after the jump.
A slam dunk?

From a legal perspective, this ought to be a slam-dunk for TriMet. There is ample case law that the Contract Clause of the US Constitution (Article I, section 10, clause 1: “No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility”), and similar language in the Oregon Constitution, forecloses the County’s actions. The County duly negotiated a contract, and is obligated to honor it–states and local governments may not use their legislative power (whether via the primary legislative body, or via the people exercising such power through the initiative) to abrogate contracts they are a party to. There is no argument that Measure 3-401 applies to the future–and I expect that further rail projects in the County will be a long ways off–but virtually everyone with an informed opinion on this–including the county’s own counsel–has come down on the side of TriMet.

Even in cases of clear fraud, the Contract Clause prohibits abrogation of contracts. Two hundred years ago, the Supreme Court decided Fletcher v. Peck, a case in Georgia in which corrupt Georgia legislators had passed laws authorizing the sale of Indian lands to land speculators (who had bribed many of the legislators in question). Revelation of the corruption caused a scandal, and a reform legislature was elected, when then passed a law essentially voiding the prior land sales. The case went to the Supreme Court, which held the corrupt legislature’s acts to be valid (as they constituted a lawful exercise of power, even if illicitly induced), that the reform legislature’s attempts at voiding the land sales was a violation of the Contracts Clause.

Time is money

That said–there is a chance the County could drag this out, and perhaps extract some concession from TriMet; assuming the state legislature didn’t decide to intervene.

Why? Time is money.

You’ll notice that TriMet has requested expedited consideration of the matter by the courts. It has a construction schedule to meet, it cannot build certain parts of the project until it possesses title to the land underneath, and time is money. Also note the relief requested: While part of the relief is financial (payment of nearly $2M that TriMet claims it is owed by the county), TriMet is also demanding specific performance of the contract–conveyance of the real estate in question to TriMet. Specific performance is a common relief granted in real estate disputes, due to the non-fungibility of land, but unless TriMet can convince a judge (and initially, it least, will be Clackamas County District Court that hears this matter) to issue a summary judgment, the court may be unwilling to grant this relief on an expedited basis.

There’s one other aspect to specific performance–it’s what is considered “equitable” relief (along with injunctions) as opposed to a “legal” relief (i.e. damages, or money). As such, a party opposing a demand for specific performance may choose to raise various equitible defenses–one of these being “unclean hands”. I would expect the County to accuse TriMet of all manner of unsavory conduct in its prior dealings on the subject, and to issue broad discovery requests as to TriMet’s relations with its various project partners. While such requests might ultimately prove unfruitful–unless TriMet was underhanded in its prior dealings with Clackamas County, I doubt an unclean hands defense would stick–such discovery might uncover facts embarrassing to the agency and/or its officers–or simply take time. And time is money.

There’s also the matter of appeals. No matter who wins in District Court, I expect the losing side to appeal the decision. TriMet probably has better chances in appeals court than the County does (not to cast any aspersions at the District Court), but any appeal adds delay. And time is money.

There could be pressure on the agency to reach a settlement.

What does the County want, anyway?

Last month, the County Commission sent a letter to TriMet asking it to end MLR at Tacoma Street, north of the County line. TriMet, unsurprisingly, refused. While TriMet could conceivably omit the Park Avenue stop (the MOS to Milwaukie is an approved alternate in the FEIS), ending at Tacoma Street is not an approved design option; plus construction is already underway in Milwaukie already.

The County might also simply want its money (that was paid to TriMet last year, prior to the election of the new Commission) back–and is simply trying to renegotiate the deal to that end. Or, commissioners may be looking for a symbolic victory against the agency, even if they cannot meaningfully stop the project. Whether negotiations between the County and TriMet have been going on behind the scenes, or both sides have proceeded from ultimatums to litigation, I have no idea.

The legislative angle

One risk for the county–is that the Legislature might step in.

It’s rather unusual for municipal entities within Oregon to sue each other. As both TriMet and the county are political subdivisions of Oregon, incorporated under Oregon law and having no independent sovereign authority, one course of action would be for the state Legislature to intervene. And were it to do so–I doubt that would be good news for Clackamas County. The State of Oregon has appropriated $250M to fund MLR; there’s no sign that the current legislature or governor is opposed to the project–and indeed, Clackamas County interfering with MLR might set a precedent that Salem wishes to avoid as it tries to get the CRC done. Furthermore, the County has engaged in some dubious actions in furtherance of the Sunrise Corridor project, actions which have gotten it sued. The county didn’t win friends, either, with the initiative to repeal the drivers license surcharge intended to fund the Sellwood Bridge.

It wouldn’t be out of the realm of impossibility for the state Legislature and the governor to squash the county on this one–invalidating 3-401, for instance. While the Legislature cannot usurp the judicial function of the courts, it could conceivably yank the chair out from under the county by striking the law on which the county’s lack of cooperation is based.

The bottom line

How will this all turn out? Obviously, nobody knows for sure–but this is uncharted territory. I suspect that whatever happens in this case, won’t be the end of things–that TriMet can expect future non-cooperation from Clackamas County as long as the current commissioners are in office. Might the entire county try and withdraw from TriMet (or Metro)? It’s possible, and it’s certainly been discussed around many water coolers there; and the present lawsuit might serve as the justification for initiating such an action.

Stay tuned….

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