California Coastal Commission slapped down in fight over San Luis Obispo development

(CN) — A developer locked in a closely watched dispute with the California Coastal Commission over a small housing project in San Luis Obispo County scored a victory Thursday after the state Supreme Court ruled the commission overstepped its authority in blocking construction of the single-family homes.

In a unanimous opinion by Chief Justice Patricia Guerrero, the court rejected the commission’s claim it had authority over San Luis Obispo County to appeal Shear Development Company’s construction of the homes.

The court found the housing project met local zoning rules and was not in a protected coastal zone, so the commission did not have authority. The decision overturns two lower court rulings and vacates the Coastal Commission’s denial of the project.

“Since Shear’s proposed development is for one of several principal permitted uses, the commission does not have appellate jurisdiction on this basis,” Guerrero wrote in the 54-page opinion. “Thus, we conclude that the commission does not have appellate jurisdiction over Shear’s permit application and therefore reverse the judgment of the Court of Appeal.”

The decision has wide-ranging implications for development projects along the California coast, said Jeremy Talcott, the plaintiff’s attorney from the Pacific Legal Foundation.

“I think this is a win for land owners and developers who want to know when they face the risk of potential appeal — which can add time and expense — and also for local governments who want to have a definitive say in local coastal programs for matters entrusted to their own discretion,” Talcott said.

The dispute goes back more than 20 years when developer Tim Shea purchased eight lots in the quiet, unincorporated community of Los Osos with plans for his company, plaintiff Shear Development, to build residential single-family housing. In 2004, the county approved a coastal development permit for four of the homes now, and the other four homes upon the completion of a community sewer.

The county approved the development of three additional residences in 2019 after the completion of the sewer in 2016, but the California Coastal Commission appealed the county’s decision shortly after.

According to the commission, which regulates development along the Golden State’s 840-mile coastline, the construction of the new homes is located in environmentally sensitive habitat — the Los Osos sand dune habitat. The commission relied on environmental data defined by the county’s local coastal program, a type of ordinance that helps guide planning and development in coastal communities in California which was adopted by the county in 1988.

Shear sued in 2020. A Superior Court judge and a Second Appellate District panel upheld the commission’s findings.

Before the state high court, Talcott argued the commission’s findings were not consistent with the county’s local coastal program because the would-be homes are not in any of the environmentally sensitive areas, according to the county’s official maps. Rather, the commission relied on cherry-picked information, he said.

The justices agreed. The local coastal program did not designate the area as environmentally sensitive, the court found.

“The commission relies primarily on a single figure in the LCP, captioned ‘Figure 6-3,’ but this figure does not support the commission’s reading, and the LCP as a whole supports the opposite reading,” Guerrero wrote, referring to the local coastal program.

Guerrero wrote the commission failed to point to any evidence in the local coastal program maps that showed that the construction was in a sensitive resource area, or SRA.

“The commission argues that these maps are not dispositive because SRAs can be designated outside these official maps,” she wrote. “Assuming that the commission is correct, something still must designate them. The commission has not cited anything in the LCP that designates the proposed development site as part of the Los Osos dune sands habitat.”

Furthermore, Talcott said San Luis Obispo County’s local coastal program makes clear that only conditional use projects can be appealed, not principal permitted uses such as Shear Development’s homes. The justices agreed there too.

The court also found that courts must independently interpret local coastal programs in similar disputes.

“We hold, first, that a court should exercise its independent judgment in determining the commission’s appellate jurisdiction when that jurisdiction depends primarily on interpretation of an LCP rather than factual matters,” Guerrero wrote. “An LCP is enacted law, and the independent judgment standard is well established as the standard of review for an agency’s interpretation of the law.”

Talcott said the opinion was the first he was aware of that reverses the commission at the jurisdictional phase, vacating its involvement and reinstating the local government’s authority.

Talcott accused the commission of scouring the county’s local coastal program for any reason to appeal the development and overreaching its authority.

“I think it’s part of a many-decade trend of the commission aggrandizing itself more authority than was intended by the Legislature,” Talcott told Courthouse News before the Supreme Court decision came down. “If the commission can step in and drastically reinterpret local coastal programs years after the fact, that leaves virtually everyone with a bunch of uncertainty.”

However, the commission disputed how much today’s decision would impact it in the future.

“We’re still evaluating the full implications of this case, but on initial review, it doesn’t seem to have significant implications for the commission’s program or authority,” the commission said in a statement provided to Courthouse News. “The decision has little impact on the Shear Development project as the county has since resolved the habitat, sewage and drinking water issues that initially raised concerns with our agency.”