The Pacific Legal Foundation (PLF) won two major takings law victories in late October. Clients championed by the property rights organization defeated a San Francisco law on compensation to tenants evicted under the Ellis Act, and managed to undo a coastal easement requirement that the court said was an unfair permit condition.

San Francisco city attorney to appeal

San Francisco City Attorney Dennis Herrera announced he would appeal a ruling by U.S. District Court Judge Charles R. Breyer that struck down the city's new ordinance on compensation for tenants evicted under the Ellis Act. From its effective date in June until Breyer blocked it effective October 24, landlords who took an occupied unit off the rental market were required to pay their evicted tenants two years' worth of difference between the lost rent rate and the market-rate rent for a comparable unit in the city.

The ruling in Levin v. City and County of San Francisco accepted arguments by the Pacific Legal Foundation (PLF) that the ordinance violated constitutional property rights. The PLF victory press release said the lead plaintiffs in the matter would have had to pay $118,000 to the tenant of the duplex where they live in order to rent their extra unit to friends or family. The SF Chronicle's Bob Egelko has details of the ruling. He quotes Breyer as calling the compensation amount "an enormous payout untethered in both nature and amount to the social harm actually caused by the property owner's action." A copy of the ruling is available on PLF's Web site.

Coastal property owners vindicated

On October 23, the Second Appellate District reversed itself on rehearing in Bowman v. California Coastal Commission. The court had agreed as of April 15 to depublish its initial ruling in March and rehear the matter.

The new ruling is a victory for the PLF's clients, Sandra Bowman and her sisters, who inherited a large San Luis Obispo County property, partly along the coastline, from their father, Walton Emmick. The sisters have been disputing Coastal Commission efforts to enforce a public access easement as a condition for a coastal development permit (CDP) to improve the dilapidated house and barn on a part of the property a mile inland.

As discussed at http://www.cp-dr.com/articles/node-3452, the court's earlier ruling backed the Coastal Commission in finding that collateral estoppel barred the sisters from repudiating a public access easement that the county initially required of them as a condition for a CDP. The March decision gave a somewhat confused account of the facts, saying Emmick did renovation work in anticipation of that first CDP although it was issued after his death -- hence that he and his successors accepted the CDP's burdens along with its benefits. Accordingly the March court agreed with the Coastal Commission that the sisters could not take advantage of the county's decision to grant their application for a second CDP without the easement.

The new opinion accepted the PLF's version of the facts: that Emmick did renovation work on the property only under county permits that were exempt from the CDP requirement because they did not "change the use or dimensions of the structure." It stated Emmick "did not make the repairs for which he sought authorization" under the initial CDP, hence that neither he nor his successors accepted any benefit under it.

However, the court's new opinion was not based solely on this fresh understanding of the facts. It also said the easement exaction was unfair: "There is no rational nexus, no less rough proportionality, between the work on a private residence a mile from the coast and a lateral public access easement." The court found it immaterial whether the requirement was the Commission's or the county's fault. Regardless, the court said collateral estoppel doctrine calls for equitable results. Because of both the reinterpreted fact pattern and the lack of nexus between the renovations and the easement, the court found the equity requirement was not met.

In a statement in April, the court had requested letter briefing on the standard of review. It said "the parties appear to agree" that the March ruling misapplied the substantial evidence rule to the administrative mandate question, in that it chose to consider only evidence supporting the prevailing party rather than "all relevant evidence even if it detracts from the administrative decision," as called for in La Costa Beach Homeowners' Assn. v. Cal. Coastal Comm. (2002) 101 Cal.App.4th 804. The court asked the parties whether the Commission should be treated as the sole authority to determine credibility of evidence, or, if not, how the La Costa case should apply.

In the opinion that followed, the court looked to a phrase in La Costa saying "Courts may reverse an agency's decision only if, based on the evidence before the agency, a reasonable person could not reach the conclusion reached by the agency." It then based the decision on its own interpretation of the facts.

The new, currently effective opinion is at http://www.courts.ca.gov/opinions/documents/B243015A.PDF.