In what could be the beginning of a legal firestorm, three property owners sued Jackson County last week for more than $20 million, alleging their constitutional property rights under Measure 37 have been trampled.

In what could be the beginning of a legal firestorm, three property owners sued Jackson County last week for more than $20 million, alleging their constitutional property rights under Measure 37 have been trampled.

At the same time a coalition of almost 100 local landowners and attorneys is forming to challenge the county's decision to no longer honor waivers that were approved under the controversial property rights law.

Medford resident David Smith, a member of the newly formed Citizens for Constitutional Fairness, said the dollar amount that property owners say they've lost after the passage of Measure 49 — the fix for Measure 37 — could be significant.

"I think it's going to be $1 billion," Smith said. "It's basically going to bankrupt the county if they don't do anything."

In addition to the three property owners who have already filed suits in Jackson County Circuit Court, Smith said that at a meeting held last week to discuss options for Measure 37 claimants, he talked to 80 landowners who are considering legal action. Though a class action suit is being considered, Smith said his group is still trying to determine if that's the best course of action.

"We may have 100 lawsuits pretty soon," he said.

Don Rowlett, owner of the 692-acre Box R Ranch in the Greensprings, has filed the biggest suit so far, asking for $15.8 million in damages.

Albert Gray and the Gray Family Living Revocable Trust, which owns 162.5 acres near Ashland, have asked for $2.9 million in damages, and Robert Ferns, who owns 440 acres east of Medford, is seeking $3 million in his suit.

Both Jackson County Commissioner C.W. Smith and County Counsel Allie O'Connor said they couldn't comment on any pending lawsuits Monday.

County officials have previously stated that they were treating Measure 37 claims as tort claims against the county. In the orders approving the claims, the county stated it did not have the money to pay compensation and instead waived land-use regulations that the county stated diminished the value of the affected properties.

Measure 37, approved by voters in 2004, gave property owners the right to file a claim to waive existing land-use regulations that have been enacted since they purchased their land. In Jackson County, 571 landowners received waivers from land-use laws.

County commissioners have generally been supportive of Measure 37.

Measure 49, billed as the "fix" for Measure 37 and approved by voters in November 2007, places sharp limits on development, allowing up to 3-parcel lot splits in a fast-track process.

Medford attorney Bob Robertson is handling all three suits. David Smith said another attorney, William Bernard of Utah, is also applying to practice law in Oregon so that he can help with the legal battle. Smith said Bernard helped with the original formation of the Oregon Land Conservation and Development Commission.

In the suits, Robertson argues that both the U.S. and Oregon constitutions have specific language protecting contracts and the county essentially approved a contract when it granted the waivers. He said the Oregon Constitution prohibits passage of any law impairing the obligation of contracts.

In a letter David Smith wrote to the county attorney on January 24, he stated that the county's waiver orders were recorded on land titles.

"In our opinion, the fact that these orders were recorded made the order final and implemented it so that it is beyond attack by any subsequent legislative action," said Smith.

Robertson said that in addition to the three suits he filed, he expects more. David Smith's mother-in-law, Velda Dickey, has an approved claim from Jackson County for her 70-acre property off Interstate 5 at Valley View Road. Smith's family intends to file a suit for more than $30 million in lost value, said Robertson.

Dwayne Cross and Bud Kaufmann own more than 3,000 acres on Hillcrest Road and plan to file a claim for more than $100 million.

"According to our rough calculation there may be somewhere between $500 million to $1 billion dollars in lost property value in Jackson County alone," he stated.

Robertson said the ultimate goal of the lawsuits is not to seek monetary damage, but to have the county take some action to recognize that the property owners have vested rights because of the approved claims.

The suit states that the Oregon Department of Land Conservation and Development, which is not named in the legal action, passed a regulation attempting to void the county waiver granted under a Measure 37 claim.

Robertson wrote that he considers the state action stripping property owners of their rights as "fraudulent."

David Smith said he thinks the state may have violated the federal Racketeer Influenced and Corrupt Organizations Act, (known as RICO) when it voided the waivers through an administrative rule.

"I think that is a fraudulent scheme that has some criminal element to it," he said.

David Smith, who used to teach real estate and constitutional law, said his basic legal argument is that the county approved Measure 37 claims as a legal matter rather than as a land-use issue. He contends the county settled the claims on a contractual basis, waiving land use regulations instead of paying out money.

Smith said property owners with approved claims have spent more than $300,000 in some cases in an effort to develop their land, and many of them are older people.

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