Land in California’s coastal zone is among the most heavily regulated in the nation, if not the world. But even California’s regulations acknowledge that property owners in the coastal zone have the fundamental right to use and develop their land. The State’s Coastal Act, for example, limits the power of the California Coastal Commission to veto reasonable land uses when a local government has approved development that conforms to the local government’s Local Coastal Program (LCP).
But as Shear Development Company found out, the Commission often ignores the limitations placed on it by the legislature and attempts to override local governments’ permitting power.
In 2003, the company purchased eight lots in a residential neighborhood a half mile from Morro Bay in Los Osos. Shear prepared for development by grading the lots and installing utilities. The following year, San Luis Obispo County approved Shear building eight homes in two stages. After Shear completed the first four homes, it sought the County’s approval to complete three more in 2017. The County considered Shear’s plans under the LCP and granted a Coastal Development Permit.
But after the County’s approval, the Coastal Commission injected itself into the process by appealing the decision—to itself. The agency claimed enforcement power based on the project’s location in an Environmentally Sensitive Habitat Area (ESHA). The Commission also alleged that it could appeal any permit in a zoning area that had more than one principally permitted use—a claim that would make every single project in the County’s coastal zone appealable to the CCC.
At a hearing that followed, the CCC denied all of Shear’s permits, citing non-conformance with the LCP’s ESHA policies, inadequate water and wastewater access, and a special condition placed on the County’s wastewater facility that prohibits new sewer service to “undeveloped properties.”
The Coastal Act allows sensitive habitat determinations only through legislative adoption by the local government of an official designating map. The County has never adopted such a map for Shear’s land and has not otherwise designated Shear’s property as sensitive habitat. The Act also prohibits the Commission from legislative acts such as designating sensitive habitats and restricts the agency’s appellate authority to review local government actions only for inconsistency with the certified LCP or Coastal Act. In other words, the Commission cannot ignore, override, or change the plain terms of an LCP under the guise of a single permit appeal.
Shear Development sued in state court, arguing the Commission ignored the County’s LCP by rejecting the official designating maps—which do not encompass Shear’s properties—and relying instead on a single figure that shows the location of “dune sands” within the County. Shear also argued the Commission abused its discretion in applying the LCP’s language and failed to support its findings with any substantial evidence. Further, the County intervened in the state court as amicus, supporting Shear’s interpretation of the LCP, and arguing that the Commission was overriding the language of the LCP that it had certified years before.
Nevertheless, state courts initially dismissed the lawsuit. They deferred to the agency’s strained interpretation of the LCP, ignoring both the plain language and the longstanding interpretations used by both the County and the Commission for decades on previous permit applications.
When the language in a law is clear and easy to understand, courts should interpret it on their own. However, when local governments and the Commission disagree on an LCP’s interpretation, the Coastal Act demands that local governments are entitled to more deference than the agency.
Represented at no charge by Pacific Legal Foundation, Shear Development asked the California Supreme Court to reverse the agency’s unlawful permit denial, confine the Commission to its proper role under the Coastal Act, and affirm that courts, not agencies, should resolve questions of statutory interpretation.
In a unanimous ruling issued April 23, 2026, the court did just that. The court held that the Commission had unlawfully overridden the county-approved building permit, limiting the Commission’s authority to second-guess local governments across the state’s coastal zone. The victory vindicated Shear’s right to build homes, forcing the Commission to stick to LCPs as written and building a firm legal foundation for all citizens to fight back whenever the agency tries to rewrite regulations at will.
The ruling is one of the most significant checks on the Commission’s power since PLF’s landmark U.S. Supreme Court victory in Nollan v. California Coastal Commission nearly four decades prior.
Shear v. California Coastal Commission was originally filed and litigated by former PLF attorney Paul Beard II, who served as co-counsel before the California Supreme Court. Paul is a partner at Pierson Ferdinand LLP.
What’s At Stake?
- The Coastal Commission cannot take more power than the legislature grants it. The California Coastal Act puts local building decisions in the hands of local governments. The agency cannot unilaterally overrule those decisions.
- Property owners have the right to responsibly make productive use of their land. The Coastal Commission’s unlawful actions violate property owners’ rights and directly contribute to the housing crisis in California.
