## Facts

- Wasco County’s board of commissioners voted 2–1 to call an election on whether to incorporate the City of Rajneeshpuram.
- County Judge Richard Cantrell cast one of the two votes in favor.
- Cantrell had undisclosed prior business dealings with incorporation proponents involving a cattle sale alleged to be above market and irregular in quality, weight, and transport.
- Opponents (including 1000 Friends of Oregon and nearby landowners) argued Cantrell’s participation created a conflict of interest or bias that invalidated the board’s action.
- On remand, the Land Use Board of Appeals (LUBA) took evidence and found no proof the cattle transaction was contingent on Cantrell’s vote, conferred an extraordinary benefit, or was a sham to influence the decision, and concluded no prejudice to substantial rights.
- The Court of Appeals reversed LUBA, treating the county action as quasi-judicial and holding Cantrell’s lack of impartiality invalidated the vote.

## Issues

1. Whether the county board’s 2–1 decision to call an incorporation election was invalid because an affirmative voter had undisclosed business dealings with incorporation proponents.
2. Whether the record required a finding of disqualifying conflict of interest or bias that prejudiced substantial rights under the governing review standard applied by LUBA.

## Decision

- The Oregon Supreme Court reversed the Court of Appeals and affirmed LUBA’s order.
- The Court held Cantrell’s participation did not invalidate the county board’s decision to call the incorporation election.
- The Court accepted LUBA’s findings that the evidence did not establish a disqualifying conflict of interest or bias and did not show prejudice to substantial rights.
- The Court rejected the Court of Appeals’ approach insofar as it substituted its own assessment of bias for LUBA’s evaluation under the applicable legal standard.

## Legal Principles

- Review in this posture focuses on the validity of LUBA’s order and its application of the correct legal standard, with deference to LUBA’s supported factfinding.
- A disqualifying conflict of interest for an elected local decisionmaker generally requires a direct and demonstrable self-interest in the outcome, not merely prior dealings or community relationships.
- Undisclosed business dealings, without evidence the transaction was tied to the vote or designed to influence the outcome, do not alone establish disqualifying bias.
- A challenger must show that the alleged improper participation prejudiced substantial rights; absent such prejudice, invalidation of the governmental action is not required.
- Courts should be cautious about importing strict judicial disqualification standards into local governmental decisions to call an election without clear statutory or constitutional direction.

## Conclusion

The court upheld the county board’s call for an incorporation election, concluding that the undisclosed cattle transaction did not establish a disqualifying conflict or bias and that LUBA reasonably found no prejudice to substantial rights.


1000 Friends of Or. v. Wasco Cnty. Ct., 304 Or. 76, 742 P.2d 39 (Or. 1987)