Jackson County Board of Commissioners temporarily backed off from a decision on a Measure 37 claim Wednesday after the head of state lands sent a letter warning that any action might be unlawful.

Jackson County Board of Commissioners temporarily backed off from a decision on a Measure 37 claim Wednesday after the head of state lands sent a letter warning that any action might be unlawful.

"We feel like that little penguin trying to fight the killer whales," said Commissioner C.W. Smith, describing a YouTube video of a penguin that escaped killer whales by jumping into a boat.

Richard Whitman, director of the state Department of Land Conservation and Development, warned commissioners in a Dec. 10 letter that they should not approve a 12-lot subdivision on a 406-acre property off Hillcrest Road in Medford owned by Robert and Colleen Ferns.

The Fernses had obtained waivers from the state and the county to develop their property under Measure 37, the property rights law passed in 2004 but overturned by Measure 49 in 2007.

But U.S. District Judge Owen Panner ruled in November that the waivers granted under Measure 37 should be considered contracts protected by the U.S. Constitution.

The Fernses' subdivision is the first Measure 37 case to come before commissioners since the Panner decision and has fallen under the scrutiny of state officials.

Commissioners wanted to study the state's three-page letter before they make a decision on the Fernses' application to subdivide their property. The commissioners will meet at 9:30 a.m. Dec. 31 in the Jackson County Courthouse auditorium, 10 S. Oakdale Ave., Medford.

Measure 37 attempted to provide property owners who have owned their land for many years with relief from development restrictions imposed by Oregon land-use laws. But after property owners filed about 7,000 state claims under Measure 37, some of them potentially far-reaching, voters approved Measure 49, which overturned the property rights law. Jackson County had approved 571 Measure 37 waivers of land-use rules on about 60,000 acres.

Despite the warning letter from the state, 76-year-old Robert Ferns of Gold Hill said, "I'm still confident. All signs are in favor for us."

He said he was hoping to sell off the lots from his property for his retirement income.

Attorney Jack Swift, who argued for Measure 37 claimants before Panner, told commissioners that waivers are a matter between Jackson County and the property owners only.

"The judge ruled the state has no dog in the fight," he said.

Medford attorney Bob Robertson, who also fought in the Panner case, said he and local developer Mike Mahar have sunk $500,000 into helping the Fernses get the subdivision approved. He said he estimates the lots that will be created along with the homes should each be worth about $1 million on average.

He said most of the expenses were generated after Measure 37 was passed, including obtaining an easement from a neighboring property to build a private road. Robertson said the Fernses had to give up two lots to the neighbor for the easement.

"All of this was done before Measure 49 was ever passed," he said. "We've done all of this in good faith."

He said that despite threats from the state, he thinks the county would have impunity if it approved the subdivision based on the Panner decision.

Whitman said in his letter to commissioners that the Panner decision only applies to county waivers, not to state waivers.

Whitman said the project fails to meet current state statutes and rules that provide a minimum lot size of 80 acres for land zoned exclusive farm use. The Fernses' lots would range between 20 and 80 acres.

Citing an Oregon Supreme Court decision, Whitman said that state waivers under Measure 37 are no longer in effect. The DLCD disagrees with the Panner decision, saying it is inconsistent with the state Supreme Court ruling.

Commissioner Dave Gilmour said he wanted to give the Fernses and their representatives a chance to respond to the state letter.

Commissioner Smith said, "This is an issue watched around the state."

Reach reporter Damian Mann at 776-4476 or dmann@mailtribune.com.