By Rob Hofmann
The California Coastal Commission (“Commission”) lacks the statutory authority required to declare a property an ‘environmentally sensitive habitat area’ (“ESHA”) when it hears an appeal from a local government’s grant of a coastal development permit (“CDP”) to develop the property. Such action infringes upon powers that the Legislature expressly allocated to local government. Security National Guaranty v. California Coastal Commission (2008) Cal. App. LEXIS 131, January 25, 2008.
The Security National Guaranty (“SNG”) property at issue was the former site one of the largest sand mining industrial operations in the western United States. Situated in Sand City (“City”) on the west side of Highway 1 between the highway and the ocean, the site was environmentally degraded like much of the coastal land surrounding Monterey Bay subject to years of intensive industrial and commercial use. As these intensive uses diminished over time, the City sought to address the resulting economic impact and rehabilitate the degraded land through targeted resort and recreational development.
The Coastal Act (“Act”) requires coastal zone local governments to prepare and submit a local coastal program (“LCP”) to the Coastal Commission for certification. An LCP is comprised of (i) a land use plan (“LUP”) that is the equivalent of the general plan for the coastal zone property, and (ii) a local implementation plan that includes zoning, related maps, and various implementing actions. The Commission must certify the LUP if the Commission finds that the LUP meets the requirements of, and is in conformity with, specified polices of the Act.
Sand City adopted a local coastal program in the early 1980s, with an emphasis on revitalizing the local economy with viable resort and recreational development along portions of its coastline. The City’s land use plan explicitly noted that no “environmentally sensitive habitat areas” existed west of Highway 1. The plan further acknowledged that the SNG site is located entirely west of the highway and is designated as visitor serving commercial uses with a density not to exceed 650 units. The Commission granted the Sand City LCP final certification on March 14, 1986.
SNG sought approval of a coastal development permit (“CDP”) to construct a mixed use development consisting of 495 units on the site and proposed plans for habitat restoration and dune stabilization. The City council concluded that the proposed plan was consistent with the certified LCP and approved issuance of the CDP, subject to 59 preconditions, on December 1, 1998. The Sierra Club and two members of the Commission appealed the issuance of the CDP to the Commission.
Upon review, the Commission determined that the appeal raised a ‘substantial issue’ as to whether the project conformed to the City’s LCP, and the Commission scheduled a de novo public hearing to consider the CDP application. The Commission staff report recommended denial of the CDP because the proposed development was inconsistent with the certified LCP and Act policies regarding public access and recreation. The staff report also declared the entire project site an ESHA, concluded that the proposed project did not adequately protect environmentally sensitive dune habitat, and determined the project did not meet LCP water supply requirements. On December 14, 2000, the Commission voted to deny the CDP based on the staff report findings.
SNG filed a combined petition for writ of mandamus and complaint against the State of California and the Commission, asserting seven causes of action including administrative mandamus claims, inverse condemnation, breach of contract, and estoppel. The trial court denied the writ petition based on the Commission’s findings of inadequate groundwater resources, but did not rule on the Commission’s mid-appeal ESHA determination. The trial court subsequently granted the Commission’s motion for summary adjudication on the inverse condemnation (not yet ripe), breach of contract, and estoppel (no claim until a valid building permit obtained, analogous to a vested rights claim) claims. SNG timely appealed.
On appeal, SNG argued that the Act does not grant the Commission the requisite authority to declare the SNG site an ESHA during the administrative appeal of the CDP issuance and such designation effected an impermissible amendment to the City’s LCP. SNG further argued the Act assigns the task of drafting and amending the content of the LCP exclusively to local government, whereas the Commission’s role is specifically limited to determining whether the LCP complies with the Act. The appellate court agreed.
Exhaustion of Administrative Remedies – Commission Action is Final
First, the appellate court rejected the Commission’s argument that SNG had not exhausted its administrative remedies as to the ESHA determination because no final decision as to what type of development would be permitted on the site had been made. The court concluded that, although the Commission’s hearing of an administrative appeal on the issuance of a CDP is a quasi-judicial inquiry, declaring the site an ESHA, which amends the LCP, is a final legislative act. The court further concluded that, even absent the separation of these two processes, SNG would be excused from an administrative remedies exhaustion requirement because the subject matter is outside the Commission’s jurisdiction.
Second, the appellate court concluded that, contrary to the Commission’s arguments, the case was ripe for judicial review. The issue of whether the Commission could make the ESHA determination was purely a legal issue, upon which the specific facts have little bearing. Further, immediate hardship would result if this issue was not timely resolved.
The court was quite clear in its analysis: “The Commission, like all administrative agencies, has no inherent powers; it possesses only those powers that have been granted to it by the Constitution or by statute … As a consequence, if the Commission takes action that is inconsistent with, or simply is not authorized by, the Coastal Act, then its action is void.”
“The Coastal Act sets out a process by which LCP’s are prepared, adopted, certified, and periodically reviewed … and (it) expressly vests in local governments, rather than the Commission, the responsibility for determining the content of their LCP’s.” “(T)he Commission has no statutory authority to amend an LCP during the CDP appeal process.” “(T)he Commission’s role in the permit process for coastal development is to hear appeals from decisions by the local government to grant or deny permits.” A CDP appeal is limited to whether proposed development conforms with the standards set forth in the local certified coastal program. The Commission is not authorized to “diminish or abridge the authority of the local government to adopt and establish, by ordinance, the precise content of its land use plan.”
Here, the court concluded that the Commission (i) exceeded its authority by declaring the site an ESHA, (ii) improperly assumed powers explicitly reserved to local government, and (iii) made its determination in direct contradiction to the terms of the certified LCP.
This case reaffirms that administrative agency power is defined by and limited to that provided for in the Constitution and granted by the Legislature. When a question arises as to whether an administrative agency has jurisdiction, or whether it has exceeded its jurisdiction, the matter is a question of law to be determined and defined by the courts.
Rob Hofmann is an associate with Abbott & Kindermann, LLP, and is a member of the City of Davis Planning Commission, and a member of the San Joaquin Valley Air Pollution Control District Hearing Board. For questions relating to this article or any other California land use, environmental and planning issues contact Abbott & Kindermann, LLP at (916) 456-9595.
The information presented in this article should not be construed to be formal legal advice by Abbott & Kindermann, LLP, nor the formation of a lawyer/client relationship. Because of the changing nature of this area of the law and the importance of individual facts, readers are encouraged to seek independent counsel for advice regarding their individual legal issues.
 The court applied the factors the Supreme Court enumerated in Coachella Valley Mosquito & Vector Control Dist. v. California Public Employment Relations Bd. (2005) 35 Cal.4th 1072 to determine whether an agency lacks jurisdiction before agency proceedings have run their course, specifically: (1) the extent of the injury or burden that exhaustion will impose, (2) the strength of the legal argument that the agency lacks jurisdiction, and (3) the extent to which agency expertise may aid in resolving the issue. The court concluded that each factor was met and that any failure by SNG to exhaust its administrative remedies was excused. Specifically: (i) the failure to review the Commission’s statutory authority would impose significant burdens on SNG because ESHA status imposes significant limitations on permissible development, (ii) the Commission both lacks statutory authority for designating the site an ESHA during the CDP appeal process and it intruded upon powers the Act expressly allocates to local governments, and (iii) the permissibility of agency action is a question of law that does not require deference to the Commission’s views.