Douda v. California Coastal Commission (February 6, 2008, B188210) ___ Cal.App.4th ___

By Aaron Foxworthy

The Second Appellate District affirmed a lower court decision that when acting as the issuing agency for a Coastal Development Permit (CDP) application, the California Coastal Commission may designate a portion of the subject property as an Environmentally Sensitive Habitat Area (ESHA) during consideration of the CDP application.  And, the Commission may then reject the CDP application based in part on potential impacts to the newly designated ESHA.  The decision is a cautionary tale for parties seeking to develop – or purchase for development – property in the Coastal Zone, that the Commission retains broad authority to designate ESHAs and restrict development.

The Coastal Act establishes a regulatory program for development activities occurring within the California coastal zone.  Under the Act, local land use jurisdictions may develop and submit a local coastal program (LCP) to the state Coastal Commission.  (The LCP consists of the relevant portions of a local government’s general plan, or local coastal element, which may be submitted separately for certification, and also its zoning ordinances, zoning maps and other regulations that may implement the policies of the Act.)  If the Commission certifies an LCP as consistent with the requirements of the Coastal Act, the local jurisdiction then becomes the primary Coastal Act regulatory authority in accordance with its certified LCP.  Until such time as a local jurisdiction’s LCP is certified, however, the state Coastal Commission retains primary regulatory authority within that jurisdiction.

In November 2001, Mr. and Mrs. Douda filed a CDP application with the California Coastal Commission to construct a large home with associated garage, pool and spa on their property.  The Commission had previously certified Los Angeles County’s land use plan covering the Doudas’ property, but not a full LCP.  Therefore, the Commission retained primary regulatory authority over the Doudas’ CDP application.  The Commission found that coastal sage scrub and chaparral habitat on the Doudas’ property constituted an ESHA.  The Commission then rejected the Doudas’ application because impacts associated with the Doudas’ proposal would thereafter prejudice the ability of Los Angeles County to prepare an LCP consistent with the ESHA-protection provisions of the Coastal Act.  The Commission also determined that the California Environmental Quality Act required less invasive proposals, and that the Doudas’ proposal would impermissibly impact scenic and visual qualities of the surrounding area.

The Doudas challenged the Commission’s designation of an ESHA on their property, arguing that under the Coastal Act, the Commission or a local jurisdiction could only designate ESHAs in the context of preparation or certification of an LCP or land use plan.  The Commission, conversely, argued it is obligated to designate and consider impacts to ESHAs and potential ESHAs when acting as the primary regulatory authority for a CDP application, as well as when certifying LCPs.  The court found the Coastal Act did not specifically address whether the Commission could designate ESHAs outside the context of LCP-certification.  Given this uncertainty, the court looked to the purposes of the Coastal Act, which, the court found, included heightened protection for ESHAs.  The court therefore rejected the Doudas’ interpretation that the Commission could only designate ESHAs in the context of LCP certification, since it would severely limit the protection of ESHAs or potential ESHAs in other circumstances, such as the current instance.  The court also found it significant that the Coastal Act provides the Commission primary responsibility for the implementation of all provisions of Coastal Act unless "specifically otherwise provided."

Similarly, the court found that potentially conflicting Coastal Act policies, on the one hand favoring protection of ESHAs, and on the other favoring local administration of land use decisions, must be balanced in favor of EHSA protection where, as here, it would be more protective of coastal resources.

The court also rejected the Doudas’ assertion that the Commission’s ability to designate ESHAs had expired pursuant to the terms of Coastal Act Section 30502.  That section gave the Commission until September 1977 to designate "sensitive coastal resource areas" within the coastal zone that needed heightened protection.  The court did not agree that the definition of "sensitive coastal resource areas" in Section 30502 was synonymous with that of "environmentally sensitive habitat area," and therefore the September 1977 deadline did not apply to ESHA designations.

The Doudas next argued that under the statutory scheme of the Coastal Act, local jurisdictions retained exclusive authority over the content of land use plans and LCPs, which authority the Commission had impermissibly infringed upon by designating the Doudas’ property as an ESHA.  The court disagreed, finding that while the Commission could not interfere, for example, with the local jurisdiction’s choice between two uses that equally conform to the policies of the Coastal Act, local jurisdictions could not use the Act’s preference for local decisionmaking to circumvent requirements of the Act, such as protection of ESHAs or potential ESHAs.  The Doudas argued the practical affect of the court’s interpretation was to allow the Commission to hold local jurisdictions hostage by refusing to certify a land use plan or LCP until the local government agreed to designations dictated by Commission.  The court was not deaf to this argument, but noted that it could not change the statutory scheme, and the court believed this situation would not be common because ESHAs or potential ESHAs represented a small portion of the coastal zone.

Regarding the existence of the certified Los Angeles County land use plan that had not designated any ESHA on the Doudas’ property, the court cautioned that the Commission could not simply ignore the plan.  Rather, the court stated that the Commission should consider the contents of certified land use plans when making CDP decisions.  And, if the Commission deems it necessary to deny a CDP application that is consistent with a certified land use plan, it should do so only when necessary to achieve the basic goals of the Coastal Act, and with a "good reason for ignoring the plan, such as a significant change of circumstances."  In this instance, the presence of a previously undesignated ESHA on the Doudas’ property met the court’s standard.

Lastly, the Doudas challenged the Commission’s authority to regulate scenic and visual resources in inland portions of the coastal zone (the Doudas’ property is four-and-a-half miles from the coastline).  The Coastal Act requires protection of scenic and visual resources of coastal areas, but does not define the term "coastal areas."  The Doudas argued that "coastal areas" were those "areas on or along the ocean," and the Commission’s authority to regulate of scenic and visual resources should be limited to such areas.  The court rejected this argument, holding that the court’s directive under the Act is to construe the provisions of the Act broadly to achieve its preservation purposes and objectives.  The court therefore upheld the Commission’s authority to regulate impacts scenic and visual resources up to the boundaries of the coastal zone, and not a smaller subset of property "on or along the ocean."  The court reasoned that this interpretation, unlike the Doudas’, would prevent "constant" litigation over whether certain properties were or were not "on or along the ocean."

The Douda decision is distinguishable from the recent Security National Guaranty decision, which found the Commission could not designate an ESHA on the applicant’s property because the local jurisdiction’s certified LCP had not designated it as an ESHA, and did not provide a mechanism for future designation of ESHAs through administrative action.  Given the framework of the LCP, the SNG court found the Commission’s attempt to designate an ESHA was tantamount to an ad hoc amendment of the LCP, which was prohibited by the provisions of the Coastal Act.  In Douda, however, no LCP had been certified, and although the Commission-certified land use plan covering the Doudas’ property did not designate that property as an ESHA, it did allow for the future identification of additional ESHAs through biotic review or other means.

Regarding the designation of ESHA and resulting regulation of development, it appears the lessons of this series of cases are: (1) the Commission retains broad authority to designate and regulate impacts to ESHAs absent prohibitive provisions in a certified LCP ; (2) to avoid the uncertainty of potential future ESHA designations within their boundaries, local jurisdictions should seek certified LCPs whenever possible; and (3) the regulated community should work with local jurisdictions to craft LCPs that permit future ESHA designations only by amendment to the LCP, rather than through administrative procedures.

For more information please contact Aaron Foxworthy.  Aaron Foxworthy is an associate in the Real Estate, Land Use and Environmental Practice Group in the firm’s San Francisco office.