May 11, 2012

Administrative law in action: a view from the sidelines

By Administrative law in action: a view from the sidelines

On Wednesday and Thursday of this week, I attended the California Coastal Commission’s monthly meeting, held this month in San Rafael.  The Commission is a state administrative agency charged with the task of protecting California’s “Coastal Zone” from environmental harm and “over development.”  PLF has regularly opposed the Commission in court for expanding the scope of its jurisdiction and forcing private property owners to bear burdens that should legally and justly be borne by the public at large.  In our most famous case to date, Nollan v. California Coastal Commission, we represented Ventura County property owners James and Marilyn Nollan.  When they applied for a permit to replace a dilapidated bungalow with a single family home, the Commission told them they would have to grant the public an easement across their property in exchange for the permit.  We litigated the case all the way to the U.S. Supreme Court, which struck down the easement condition.  The Court said there was not a sufficient connection between the alleged purpose for the condition—to mitigate for the “psychological barrier” that the Nollan’s house would interpose between the public and beach—and the easement requirement.  Justice Scalia, author of the Court’s opinion, reasoned that unless there was an “essential nexus” between the condition demanded and the impact of the development, this type of “building restriction was not a valid regulation of land use, but an out-and-out plan of extortion.”

We won that case in 1987.  Fast forward to this month’s Coastal Commission meeting; has the Commission changed its tune?  Sort of.  Maybe.  Not really.

If you need to obtain a Coastal Development Permit, you still are required to agree to a slew of standard and special conditions.  These frequently include: placing part of your property in a permanent, open space easement where neither you nor any future owner will be allowed to build; removing all non-native plants from the property and planting native ones; if you live along the shore—agreeing to never build a shoreline protective device or seawall should your home become unstable; indemnifying the Commission against any future lawsuits regarding your property (i.e. should your house fall onto the beach and harm someone); paying an in lieu fee for adverse impacts to the environment; and frequently—dedicating an easement to the public for shoreline access.  Although many of these conditions undoubtedly violate the Nollan rule, applicants frequently agree to them without legal challenge.  Understandably, they are eager to get their projects built and reticent to rock the boat.  Moreover, they have an incentive to agree with the Commission’s staff recommendations regarding building conditions in order to lower their risk that the Commissioners will find a reason to vote against their project.

This was apparent on Wednesday when the Commission voted to approve the controversial expansion of the Pebble Beach Company’s resort in Monterey County.  The Commission had previously rejected a development plan in 2007.  It was obvious that the company’s owners have spent the past five years negotiating with the Commission, local environmental groups, neighboring property owners and local governments.  At the meeting, the company had all of its ducks in a row.  Only one person, a Sierra Club member, spoke against the plan.  Everyone else during the public comment period praised the plan, the company and its owners.  These speakers included: leaders of local environmental groups, business and tourism representatives, the mayor of a neighboring city, a member of the Monterey County Board of Supervisors and various other area stakeholders.  Peter Uberroth, co-chairman of the Pebble Beach Company, spoke about the company’s history, its dedication to preserving the environment and his personal relationship with former Coastal Commission director Peter Douglas.  The Commission’s staff and Commissioners praised the Company for its cooperation in coming up with a plan that allows the Company to expand its resort, but also conserves important environmental resources.  The Company will be allowed to develop 90-single family home lots, build a new hotel, expand existing hotels, and expand an equestrian center.  In exchange, the Company has agreed to improve forest trails, dedicate 635 acres of forest to permanent conservation, pay a $1.8 million fee for lower-cost over-night visitor housing, and finance various other public amenities in and around the forest.  The Commission voted unanimously to approve the plan after bumping up the mitigation fee from $1 million to $1.8 million.

While I am reticent to criticize the public “love fest” I witnessed on display among the Company, the Commission and the Monterey community, I am concerned about the implications.  In order to receive Commission approval for this building project, the Pebble Beach Company’s owners undertook to: placate the entire community; develop a personal relationship with the director of the Commission; and engage in a public relations campaign.  At the meeting Peter Uberroth explicitly disavowed his support for the plan that the Commission rejected in 2007.  He said the Commission was right to have rejected it because it wasn’t the right course to pursue.  He also described his friendship with Peter Douglas and how he had seen him only days before he passed away.  The Mayor of Carmel also paid tribute to Douglas, and made of point of assuring the Commissioners the relationship between Douglas and Uberroth was one of “genuine friendship.”  I felt like I was watching a carefully scripted pageant, each player having rehearsed his role to create the desired effect on the Commission.  And it worked.  When the Commission approved the project unanimously, I thought everyone in the room might link hands and start singing Kumbayah.

How does this scene relate to our victory in Nollan and the other cases we litigate against the Commission?  While court victories are crucial for enforcing the Constitution and preventing regulatory agencies from overstepping their bounds, wheeling and dealing still plays a major role in land use planning today.  And that’s not a surprise when millions are at stake.  But what still surprises me is how much the Commission is able to exact from property owners in this dance for approval.  Not to mention the fact that commanding a personal relationship with the Executive Director of the agency seems to be the new sine qua non for obtaining approval of major development projects.  Charles Lester, the agency’s new Executive Director, better watch out or he may suddenly find himself the most popular man in California.  He certainly is already one of the most powerful.

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