Two owners of property located in a forest use zone in Hood River County, Oregon sued the County in state and federal court alleging a regulatory taking of their property. The plaintiffs knew in 1983 when they bought their property that it was located in a forest use zone. However, they were unaware of a recent Land Use Board of Appeals (LUBA) decision holding that a forest use zone prohibits construction of dwellings unless they are necessary and accessory to forest use. Notice had been given to the previous owners that the County was in the process of amending its ordinance to comply with the mandatory interpretation. However, the plaintiffs never received actual notice.

In 1990 when the plaintiffs' land use permit applications were denied, they exhausted administrative remedies and appealed to the Oregon Supreme Court. The plaintiffs alleged that the County improperly construed the zoning requirements, issued a decision unsupported by substantial evidence, and that violated the takings provision in the Oregon Constitution.[1] In their Petition for Review, the plaintiffs explicitly reserved a right to have their federal claims adjudicated in federal court. The Oregon Supreme Court affirmed the lower court's decision rejecting all of the plaintiffs' claims. In the meantime, however, the plaintiffs filed a section 1983 claim in federal court, alleging due process, equal protection, and federal takings violations against the County. The federal district court dismissed the plaintiffs' taking claim, stating that because the Oregon Supreme Court had not yet issued a decision, all state appeals were not completed, and therefore the claim was unripe. The plaintiffs' other claims were dismissed, and they appealed.

The Ninth Circuit first considered whether the plaintiffs were required to pursue other state court remedies before bringing an action to federal court. The U.S. Supreme Court had previously held that in order for a takings claim to be ripe, the government must have reached a final decision regarding the application of the regulations to the property and that the plaintiffs must have first sought compensation through the procedures provided by the state.[2]

The Ninth Circuit found that a final decision as to the applicability of the regulations to the plaintiffs' property had been met, as the plaintiffs had filed for and appealed their applications for land use and conditional use permits. In considering whether the plaintiffs had sought all state remedies for compensation of their takings claim, the County argued that the plaintiffs should have brought their federal claim in state court. The Ninth Circuit disagreed, holding that the compensation requirement for ripeness is met if state law remedies had been pursued. It based this holding on both U.S. Supreme Court and Ninth Circuit cases that had reviewed ripeness of a federal takings claim without requiring a state action on the federal claim first.[3]