In an important decision on taking law, a divided California Supreme Court has ruled that a temporary taking did not occur when an erroneous decision by the California Coastal Commission delayed a property owner's plans to build a house in Malibu. The case is likely to be appealed to the U.S. Supreme Court. The property owner had argued that a temporary taking should have been found under the temporary taking doctrine contained in the U.S. Supreme Court's ruling in First English Evangelical Luthe... In an important decision on taking law, a divided California Supreme Court has ruled that a temporary taking did not occur when an erroneous decision by the California Coastal Commission delayed a property owner's plans to build a house in Malibu. The case is likely to be appealed to the U.S. Supreme Court. The property owner had argued that a temporary taking should have been found under the temporary taking doctrine contained in the U.S. Supreme Court's ruling in First English Evangelical Lutheran Church of Glendale v. County of Los Angeles, 482 U.S. 304 (1987). But in the majority opinion, Justice Stanley Mosk noted that the U.S. high court said its holding did not extend to "the quite different questions that would arise in the case of normal delays in obtaining building permits, changes in zoning ordinances, variances, and the like which are not before us." The court ruled in favor of the Coastal Commission by a 4-3 vote. "We conclude that the present case falls squarely into the category of a normal delay rather than a temporary taking," Mosk said in an opinion that was joined by Chief Justice Ronald George and Justices Joyce Kennard and Kathryn Werdegar. "Such delay is an incident of property ownership and not a taking of property. The high court's decision overturned a decision by the Second District Court of Appeal, Division One. (See CP&DR Legal Digest, March 1997.) That panel found that a taking occurred because the property owner got caught in the crossfire of a dispute between the Coastal Commission and Los Angeles County over which agency had jurisdiction over lot-line adjustments. By insisting that the lot-line adjustment was illegal because they had not approved it, the Coastal Commissioners had put the property owner, Landgate Inc., "in a situation which was not of Landgate's own making and which Landgate could do nothing to cure," the Second District wrote. The court added that the commissioners, "with apparent indifference to the consequences of the applicant, denied the permit without the jurisdiction to do so." The Landgate project in Malibu was actually approved by the Coastal Commission in 1993. The lawsuit involved the question of whether a temporary taking had occurred between February 1991 and February 1993. The Landgate case began in 1989, when Los Angeles County approved the reconfiguration of two two-acre lots, each of which was zoned for a single-family home. The landowner agreed to grant a roadway easement to the property in exchange for reconfiguring the lots on either side of the road. The landowner did not seek Coastal Commission approval for the adjustments, and the commission did not challenge the county's approval. The question of which agency has jurisdiction over lot-line adjustments has long been a matter of dispute between the Coastal Commission and L.A. County. At the time, the commission had approved the Land Use Plan for Malibu, but had not approved the Local Coastal Program, so it continued to have jurisdiction over the issuance of coastal development permits in the area. Landgate purchased one of the lots in 1990, and began processing a proposal to build a 9,000-square-foot single-family home, a guest house, and a swimming pool. The developer planned to grade 8,500 cubic yards on the property. After negotiating with the commission staff, Landgate reduced the size of the proposed house by 1,500 square feet and also cut the amount of grading in half. But the commission rejected Landgate's application, finding, among other things, that the lot constituted an "impermissible" development because it had been created without the commission's approval, and also because the proposed house and other structures would produce excessive soil, grading, and visual degradation. At two meetings of the Coastal Commission, commissioners had expressed concern over the question of who had jurisdiction over the lot-line adjustment and indicated they would not have approved the adjustment if it had come before them. After Landgate sued, Superior Court Judge Richard Hubbell ordered the commission to reconsider the project. Instead, the commission appealed the judge's decision to the Second District. The appellate court affirmed the writ and concluded that the lot-line adjustment was not a new "development" within the meaning of the Coastal Act, and the commission had no jurisdiction to deny the permit on hat ground. The permit was then issued. In reviewing the appellate court's opinion in Landgate, the California Supreme Court noted that the court "[a]ppeared to accept the Commission's assertion that reasonable mistakes made by a government agency in the development approval process do not necessarily constitute takings. But, as it stated: '[W]hat we cannot accept is the Commission's characterization of the treatment of Landgate here as the reasonable result of a 'mistake'. Nothing in the record suggests that a lot-line adjustment issue arose out of anything other than the Commission's ongoing jurisdictional spat with the County of Los Angeles combined with a desire to prevent Landgate from building on its parcel'." In the majority opinion, Mosk examined the case by reviewing case law about the impact of a regulatory mistake. "Virtually every court that has examined the issue has concluded, for various reasons and under various theories, that a regulatory mistake resulting in delay does NOT, by itself, amount to a taking of property," he wrote. In support of this view he cited, among others, a Massachusetts case, Steinbergh v. City of Cambridge, 604 N.E. 2d 1269 (Mass. 1992) and a California case, Littoral Development Co. v. San Francisco Bay Conservation Development Commission, 33 Cal.App.4th 211 (1994). Mosk wrote: "We substantially agree with the Supreme Judicial Council of Massachusetts, with our Court of Appeal, and with the other courts ... that an error by a governmental agency in the development approval process does not necessarily amount to a taking even if the error in some way diminishes the value of the subject property, any more than the commission of state law error during a criminal trial is an automatic violation of the due process clause." Mosk compared the situation to condemnation proceedings for land which stops the development process. He argued that the U.S. Supreme Court had upheld the California Supreme Court on just such a point in Agins v. Tiburon, 447 U.S. 255 (1980). In that case, Mosk wrote, the U.S. Supreme Court agreed "that we had 'correctly rejected the contention that the municipalities good-faith planning activities, which did not result in successful prosecution of an eminent domain claim, so burdened the appellants' enjoyment of their property as to constitute a taking." The California Supreme Court opinion in Landgate said that the appellate court "erred in its attempt to divine, through the statements of Commissioners and commission staff and through circumstantial evidence, the 'true', illegitimate motive for the Commission's decision to deny Landgate's development permit. Citing cases such as Nollan v. California Coastal Commission, 483 U.S. 825 (1987), the court said: "The proper inquiry is not into the subjective motive of the government agency, but whether there is, objectively, sufficient connection between the land use regulation in question and legitimate governmental purpose so that the latter may be said to substantially advance the former." The court said that cases such as Nollan and Ehrlich v. City of Culver City, 12 Cal.4th 854 (1996), "suggest that judicial review of governmental conditions imposed upon development will be more deferential when the conditions are simply restrictions on land use and not requirements that the property owner convey a portion of his property." The court said that the commission's denial of the Landgate permit in February 1991, including the portion of the denial based on an improper lot-line adjustment, appeared to "substantially advance legitimate governmental interests and to be supported by substantial evidence." The Mosk opinion said there was nothing in the record to show, as the Court of Appeal panel found, that the commission was motivated by a "jurisdictional spat" within Los Angeles County. Justice Mosk tried to distinguish the Landgate matter from First English. "Here," he wrote, "there was a postponement of development pending resolution of a threshold issue of the development approval process - whether the lot was legal - and not a final decision denying development. In First English, on the other hand, the Supreme Court assumed that the ordinance in question categorically denied all property owners within its purview the right to develop their property." Two dissenting opinions were filed: one by Justice Ming Chin and one by Justice Janice Brown. Justice Marvin Baxter concurred in both. In his dissent, Justice Chin said that he did not consider the delay to be a "normal delay" of the permit approval process. "[I] argue that the Commission's total and final ban on all use of Landgate's property (which existed during the litigation delay) gave rise to the temporary taking," he wrote. The majority opinion, he wrote, used the same arguments for "normal delay" that were part of a dissenting opinion written at the U.S. Supreme Court in First English. In her dissent, Justice Brown wrote: "It is evident that the majority is unwilling to come to terms with the true meaning and operative effect of Lucas and First Lutheran." Benjamin Reznick, the attorney for Landgate, said he expects the case to be appealed to the U.S. Supreme Court but no final decision has been made. "It's a case of great importance and it's clearly a landmark case here in the state," he said. The Case: Landgate v. California Coastal Commission, No. S059847, 98 Daily Journal D.A.R. XXXX (May 1, 1998). The Lawyers: For Landgate: Benjamin Reznick, Jeffer, Mangels, Butler & Marmaro, (310) 201-3572. For Coastal Commission: Peter Kaufman, Deputy Attorney General, (619) 645-2020.