California Liable for Flooded Coastal Lots

     (CN) – The California Department of Fish and Wildlife is liable for intentionally flooding never-developed lots near the state’s largest coastal lagoon in a decade-old effort to reduce flooding protection, a state appeals court ruled.
     Pacific Shores Property Owners Association sued the California Department of Fish and Wildlife for inverse condemnation in 2007.
     A massive planned subdivision north of Crescent City, Pacific Shores was flooded after the department approved a management plan in 2005 to breach a sandbar at Lake Earl, the largest coastal lagoon in California.
     The plan allowed for a breach of the sandbar only when water levels reached between eight to 10 feet “mean sea level.”
     Court documents state Pacific Shores was approved as a residential subdivision along the lagoon’s shore by Del Norte County in the early 1960s.
     Since the late 1800s, residents and the county regularly breached the sandbar when water levels in the lagoon rose above four feet mean sea level to protect land reserved for agricultural and residential use against flooding.
     Pacific Shores’ developers allegedly designed the subdivision per prior use: that the sandbar would continue to be breached when the lagoon’s water level exceeded four feet.
     Young adults – including firemen, veterans and aircraft industry workers in Southern California – bought lots at Pacific Shores intending to retire in Northern California but never developed them, plaintiff’s counsel Kelly Smith told Courthouse News.
     In 2011, a Sacramento County Superior Court judge found the state – including Fish and Wildlife and the Coastal Commission – was responsible for physical takings of nine half-acre lots at Pacific Shores, but concluded a claim for regulatory taking was barred.
     The court awarded lot holders $114,500 in damages, and both the state and plaintiffs appealed the decision.
     Specifically, the state claimed the trial court erred because the complaint was time-barred, it owed no duty to provide flood protection, and it was not liable because any protection it provided was done reasonably.
     The state alternatively asked for a flowage easement over the plaintiffs’ properties.
     Lot holders contended that the trial court shouldn’t have denied their claims for a regulatory taking and precondemnation damages, and did not award reasonable attorney fees based on expended hours and rates charged by counsel.
     On Wednesday, the Third Appellate District Court in Sacramento upheld the state court ruling except to reverse the judgment against California Coastal Commission, and remanded the lawsuit so the trial court could grant the flowage easement.
     The appeals court called the lawsuit “unique.”
     “In this inverse condemnation action, we face a unique situation where a state agency assumes control of a local flood control process, and it determines to provide less flood protection than historically provided by a local agency in order to protect environmental resources,” the 61-page ruling stated.
     Writing for the three-judge panel, Associate Judge George Nicholson said the plaintiffs filed their action within a three-year limitation period.
     The state – if not found strictly liable, was still liable under a standard of reasonableness applied to inverse condemnation actions for damages caused by flood control projects, Nicholson said.
     “Substantial evidence supports the trial court’s determination that because of the department’s intentional actions, plaintiffs contributed more than their fair share to the department’s efforts to protect environmental resources,” Nicholson wrote.
     Responding to the decision, Smith said Thursday the state may “finally” be required to compensate his clients.
     “The property owners bought as young adults – firemen, veterans, aircraft industry employees in Southern California – looking to one day retire to Northern California, in the Pacific Shores subdivision,” Smith said.
     “Now with many in their 80s, after decades of blocked development by coastal regulators, and almost 10 years of inverse condemnation litigation, the state may finally be required to provide them compensation for intentionally flooding their property to achieve misguided environmental ends.”
     Fish and Wildlife communications, education and outreach deputy director Jordan Traverso declined comment, noting the agency needs time to review the opinion.
     According to court documents, defendant’s counsel Deborah Sivas with the Environmental Law Clinic at Stanford Law School said the Pacific Shores subdivision site, which includes sand dunes and coastal wetland, was “not a suitable location” for landowners’ retirement or vacation homes.

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