Barbara Lynch et al. v. California Coastal Commission (9/9/14, D064120)
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The Court of Appeals for the Fourth Appellate District (Division One) has held that homeowners who accepted the benefit of a coastal development permit (“CDP”) for seawall reconstruction to protect their bluff-top homes cannot subsequently challenge the terms upon which the CDP was conditioned, even though the homeowners complied with those conditions “under protest.” The court held that: (1) the homeowners waived their right to challenge the CDP conditions when they voluntarily submitted to those conditions and accepted the benefit of the permit by moving forward with construction, (2) the California Coastal Commission (the “Commission”) lawfully limited the CDP to a 20-year term because the Commission was anticipating the seawall’s long-term impacts in light of the changing landscape of California’s coastline, and (3) the restriction on rebuilding the homeowners’ private beach access stairs was lawful in light of the state-wide phasing-out of private access to beaches over bluffs. The court’s ruling highlights that, unless circumstances fit into one of two narrow exceptions, a permittee cannot accept a Commission-issued CDP “under protest.” The decision also reinforces the Commission policy disfavoring private access to beaches over bluff tops.
The case was brought by the owners of two adjacent properties located atop a seaside bluff in Encinitas, California who shared private beach access via a private beach staircase. In 2003, the homeowners applied for a coastal development permit to replace the existing wooden erosion control structure and mid-bluff seawall with new construction, which also necessitated removal and replacement of the lower portion of the private staircase. The City of Encinitas approved the CDP in 2009, but while review was pending before the Commission a series of severe winter storms caused the bluff below one of the homes to collapse, taking with it the entire erosion control structure, mid-bluff wall, and private stairs. The homeowners amended their petition so they could demolish the remainder of the seawall and reconstruct the stairway. The Commission granted the homeowners a CDP allowing construction of a replacement seawall, but imposed special conditions – the permit would automatically expire in 20 years, the homeowners were prohibited from reconstructing their private stairs, and the homeowners were required to record a deed restriction notice memorializing their consent to the Commission’s conditions. In response, the homeowners filed an action challenging the conditions, but nonetheless signed and recorded the deed restrictions and constructed the project.
The court found that the homeowners had waived their right to challenge the CDP conditions because they had already agreed to them (by recording the deed restrictions) and accepted the benefit of the permit (by constructing their project). The court pointed out that, as a general rule, a property owner may only challenge a CDP by refusing to comply; once they have complied with the conditions they have waived their right to challenge. The court found neither of the exceptions to the general rule applicable to the homeowners’ situation, and also declined to create (as was requested by the homeowners) a new “under protest” exception for permit applicants who are opposed to non-fee conditions and desire to build a project while challenging the conditions to their permits. In response to the homeowner’s claim that construction was necessitated by the impending collapse of the bluff, the court pointed out that the homeowners could have applied for an emergency permit to facilitate the construction necessary to save their homes.
The court also found that the 20-year time limit imposed by the Commission with respect to the seawall was lawful. Focusing on the policy considerations underlying the City’s local coastal programs, the court emphasized that seawalls, although necessary to protect bluff-top structures, must be designed to eliminate or mitigate erosion of unprotected adjacent bluffs and other adverse impacts to the local shoreline and sand supply. The court agreed with the Commission’s reasoning that (i) the time limit was designed to parallel the expected useful life of the bluff-top structures, and (ii) because coastal protection strategies are evolving in light of climate change and rising sea levels, the seawall would in any event likely need to be augmented or replaced within the 20-year timeframe. Ultimately, the court found that the time limitation was acceptable because it was primarily aimed at addressing the effects of accelerated erosion on adjacent bluffs (due to increased wave turbulence as waves reflected off the seawall), and further that the time limitation was deliberately structured to expire when augmentation of the seawall would likely be necessary anyway.
In denying the homeowners the right to reconstruct their private staircase to the beach, the court again focused on the City’s local coastal program, which is aimed at phasing-out private access to beaches over bluffs. The court dismissed the homeowners’ claim that the City had already approved the permits which the Commission subsequently conditioned on abandonment of the private stairs, and emphasized that (i) at the time the permit was approved the lower portion of the stairs had not yet collapsed, and (ii) the permit approved by the City contemplated removal and replacement of the stairs only as an ancillary component to renovation of the seawall. Because the existence of private beach access is contrary to the City’s local coastal program, the court found that the Commission was justified in refusing the homeowners the right to rebuild their private stairs.
Ultimately, the court’s decision emphasizes that there is no such thing as “under protest” permit acceptance at least when the permit is issued by a non-local agency, such as the Commission, and does not involve the imposition of a fee, dedication, reservation or other exaction. Developers who wish to challenge the certain conditions imposed on their Commission-issued CDPs have little choice but to delay construction while their CDP challenge is pending. Developers should also be keenly aware of the availability of alternate permitting options, such as the homeowners’ option to seek an emergency permit, so that at a minimum the status quo can be maintained while permit challenges are being litigated. This case also underscores the Coastal Commission’s policy disfavoring private access to beaches over bluff tops, and serves as a warning that the government can justifiably build an expiration date into permits as a means of preserving its ability to reevaluate the project at a later date in light of anticipated changing circumstances.
 Government Code § 66020, which allows a developer to comply with a condition under protest and proceed with development while simultaneously challenging the condition, did not apply because § 66020 applies only to conditions imposed by local agencies that divest the developer of money or a possessory interest in property and not to conditions imposed by state agencies or to conditions that restrict the manner in which a developer may use its property. The second exception, which applies when an agency imposes new conditions on a permit for a later phase of a project already underway, did not apply because the conditions were not being imposed on a later phase of a project already underway.