Background
Paradigm Dental LLC executed a ten-year lease of commercial property in Beaverton in early 2012. When the lease expired in February 2022, Paradigm became a month-to-month tenant. In April 2022, the City of Beaverton identified the property as suitable for a year-round homeless shelter and purchased it for $3.35 million with the owner’s consent.
The city sent Paradigm a “Reestablishment Assistance Program Agreement” in October 2022, requiring vacation by May 31, 2023, and offering $99,000 in relocation assistance. Paradigm rejected the offer as grossly inadequate and vacated the property, incurring actual relocation costs of $1,004,853.38. Paradigm filed suit in circuit court on September 6, 2024, seeking relocation payments under ORS 35.500–35.530 and a declaration that the city violated Beaverton City Code Chapter 3.11. Notably, the city did not inform Paradigm of its right to administrative review until September 10, 2024—after the lawsuit was filed.
The trial court dismissed both claims for failure to state a claim. Paradigm appealed, and the city raised cross-assignments challenging the court’s subject matter jurisdiction and Paradigm’s failure to exhaust administrative remedies.
The Court’s Holding
The Court of Appeals affirmed the dismissal but on subject matter jurisdiction grounds rather than failure to state a claim. The court held that ORS 35.520, which governs relocation benefits for decisions by “public entities” (including municipalities), incorporates critical sections of Oregon’s Administrative Procedures Act: ORS 183.413–183.470 (contested case hearing procedures) and ORS 183.480–183.482 (exclusive judicial review procedures). Because the statute incorporates the entire sequence of APA sections establishing exclusive judicial review of contested case orders, the legislature demonstrated clear intent to divest circuit courts of jurisdiction over such disputes.
Paradigm’s first claim directly challenged the city’s denial of relocation benefits. The court concluded this fell squarely within the exclusive purview of APA judicial review procedures. Paradigm was required to exhaust its administrative remedy first—requesting a contested case hearing before the city—and only then could seek judicial review in the Court of Appeals, not the circuit court. The trial court therefore lacked jurisdiction to hear this claim.
Paradigm’s second claim sought declaratory relief, arguing the city failed to provide the required “notice of benefit” (notice of the right to appeal the relocation decision) and that this failure entitled Paradigm to sue in circuit court. The court rejected this as an impermissible attempt to circumvent exclusive administrative procedures. While a purely procedural declaratory claim challenging inadequate notice might theoretically be justiciable in circuit court, Paradigm’s claim was functionally asking the circuit court to declare it had jurisdiction over the relocation dispute itself—a matter exclusively within the administrative and appellate framework. The court noted that Paradigm could raise the lack of notice as grounds for a late administrative hearing request through the proper procedures.
Key Takeaways
- Statutory incorporation of comprehensive APA procedures into local ordinances divests circuit courts of subject matter jurisdiction, even when municipal decisions parallel state agency requirements.
- Relocation assistance disputes involving public entities must follow exclusive administrative procedures first (contested case hearing) before judicial review in the Court of Appeals.
- Procedural defects—such as failure to provide timely notice of administrative appeal rights—cannot be used to bypass exclusive jurisdictional structures through alternative claims like declaratory relief.
- A plaintiff’s remedy for inadequate notice lies within the administrative process itself, not in an attempt to bootstrap circuit court jurisdiction.
Why It Matters
This decision clarifies a critical procedural roadblock for contractors, businesses, and professionals seeking relocation assistance from municipalities. Practitioners must recognize that ORS 35.520 creates an exclusive administrative-first framework; filing directly in circuit court—regardless of the legal theory—will result in dismissal for lack of subject matter jurisdiction. The decision also demonstrates that courts will not allow creative pleading (such as declaratory relief claims about procedural defects) to evade exclusive remedial schemes. For municipalities like Beaverton, the holding confirms that relocation disputes must be resolved through their administrative procedures before any judicial review, reducing the prospect of circuit court litigation.
The opinion leaves open a practical question: what recourse exists when a city fails to provide timely notice of administrative review rights, as happened here? The court suggests the remedy lies within the administrative process—requesting a late hearing based on the notice defect—but does not address whether such a request would be granted or how long after the deadline a party may seek relief. Practitioners facing similar fact patterns should consider whether administrative estoppel or equitable arguments might apply if notice failure causes prejudice to a timely administrative appeal.