Posted by: Patricia Salkin | April 24, 2009

Record Did Not Support Claim by Coastal Commission that Denial of Permit in Environmentally Sensitive Area Would Be Taking

The California Court of Appeal (6th Dist.) ruled the California Coastal Commission’s defense of its issuance of a permit allowing construction of a house in an environmentally sensitive habitat area on the ground failure to issue the permit would have been a compensable taking was not supported by substantial evidence in the record. This case is the latest chapter in a seven-year-long battle between McAllister and his neighbors on the Big Sur coast over a house they want to build on their property. In 1977, the commission granted a previous owner a development permit for a house on two adjoining two-acre lots at Kasler Point.  He started construction, but later abandoned the project and sold the parcels. The new owner sold the land to in 1999 to the present owners. After McAllister objected to their first plan for the house, the county approved a redesigned plan and a merger of the two parcels in 2004. Not satisfied, McAllister appealed to the commission, which found there was a substantial issue concerning protection of coastal resources requiring a hearing. After the hearing, the commission approved the project and granted the coastal permit with conditions. McAllister went to court seeking to overturn the commission’s decision. In 2007, the court ruled in favor of the commission and the owners.

 

This case involves the interaction of two coastal development policies. The California Coastal Act provides that environmentally sensitive habitat areas must be protected against any significant disruption of habitat values, and only uses dependent on those resources are allowed within those areas. The subject property is within the range of an endangered insect species, the Smith’s Blue Butterfly, and contains plants the butterflies use. Although the butterflies have not been observed on the property, they have been seen on adjoining property. Also, the proposed project could diminish potential butterfly habitat. Given those circumstances, the parties agreed that the Coastal Act ordinarily would require the commission to deny a development permit, the court said. But, the court noted, the Coastal Act also provides that it is not intended to authorize the commission or a local government to exercise the power to grant or deny a permit in a way that would take or damage private property for public use without the payment of just compensation. The commission argued that provision allows it to permit non-resource-dependent uses in habitat areas where necessary to avoid an unconstitutional taking.  The court agreed that where a Coastal Act restriction would require denying a permit and the denial would deprive an owner of economic benefit or productive use of his land, the commission theoretically has two options: deny the permit and pay compensation or grant the permit with conditions that mitigate the impacts the limitation was designed to prevent.  However, because the commission does not have the authority to buy property, it instead limits application of resource protection policies to the extent necessary to allow a landowner a constitutionally reasonable economic use of his property.

 

The commission contends that is exactly what it did in this case. It said that implicit in its approval of the project was the understanding that denying residential use of the property would result in a finding that the owner had been deprived of all beneficial use of the property. It might well be, the court said, that denying the permit would amount to a taking. However, the record did not support a finding that the commission approved the project for that reason. Given the significance of easing a fundamental development restriction in habitat areas to allow a non-resource-dependent use, “one would expect the record to reflect some discussion of both the restriction and the taking issue,” the court said.  In fact, the record is silent on that point, the court continued. Neither the staff reports nor the commission’s revised findings discuss whether the proposed construction is a resource-dependent use or whether strict application of the habitat area policy would require denying the permit. Under those circumstances, the court could not infer the commission considered the threshold question whether the project was a permissible use in the area, or whether denying the permit would amount to a taking. Therefore, it concluded, the case must return to the commission for a new hearing to consider the taking issue.

 

McAllister v. California Coastal Commission, 169 Cal. App. 4th 912, 87 Cal. Rptr. 3d 365 (12/30/2008).

 

The opinion can be accessed at: http://caselaw.lp.findlaw.com/data2/californiastatecases/h031283.pdf

 

Read a summary of the case on the Abbott & Kindermann Land Use Law

Blog here.

 

Fenton & Keller represented the Plaintiffs and their posting is available here.

 

Special thanks to James Lawlor, Esq. of the Land Use Legal Report for writing the abstract used as the basis for the is posting in LULR vol. 3 no. 3 (1/15/2009).  For more information about the LULR contact Jim at landlaw@verizon.net  


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