In the latest installment in a feud between neighboring Big Sur property owners, the Sixth District Court of Appeal ruled that the Coastal Commission did not make the proper findings for approving a house in an environmentally sensitive area.

The Coastal Commission said it approved a coastal development permit for the proposed house to avoid an unconstitutional taking of private property. But the court determined the Commission never considered the taking issue and instead approved the project as being consistent with habitat protection policies. The property owners maintained that the project was indeed consistent with habitat policies, but the court rejected that contention and instead sent the project back to the Commission for a new hearing.

Since at least 2001, Dr. Hugh McAllister has fought plans by neighboring property owners Sheldon Laube and Dr. Nancy Engel to build a single house on two 2-acre parcels on Kasler Point. In considering McAllister's appeal, the Monterey County Board of Supervisors approved the project and a lot merger in early 2004. McAllister appealed that decision to the Coastal Commission and sued the county over its environmental study of the project. Two years ago, the Sixth District ruled that McAllister could not challenge the county's environmental review because the Coastal Commission had the ultimate authority (McAllister v. County of Monterey, 147 Cal.App.4th 253; see CP&DR Legal Digest, April 2007).

The Coastal Commission considered McAllister's appeal but approved a modified version of the project in 2005. McAllister sued the Commission, arguing the project did not conform to policies protecting environmentally sensitive habitat areas, visual resources and water resources. He also argued the Commission violated the California Environmental Quality Act (CEQA). Monterey County Superior Court Judge Robert O'Farrell ruled for the Commission.

In a 51-page opinion written by Presiding Justice Conrad Rushing, a three-judge panel of the Sixth District Court Appeal addressed numerous contentions raised by McAllister, the property owners and the Commission. First, the court determined that the site qualifies as an environmentally sensitive habitat area (ESHA) for coastal sage scrub and the Smith's blue butterfly. Under the Coastal Act and the Monterey County local coastal program, development within an ESHA is restricted to resource-dependent uses that do not significantly disrupt habitat values. A new house would not be dependent on the natural resources, the court found. Although the property owners disagreed with this analysis, the Commission was willing to accept it.

The Commission instead argued that sections of the Coastal Act (specifically, Public Resources Code ยง 30010) and the county's coastal zoning ordinance permitted the approval of non-resource-dependent uses in a protected habitat area to avoid an unconstitutional taking of private property. The court acknowledged the legal framework and conceded that denial of a permit for Laube and Engel might effect a taking. But the court found that the Commission never considered the taking issue.

"Given the significance of relaxing a fundamental restriction on development in declared habitat areas and allowing a non-resource-dependent use, one would expect the record to reflect some discussion of both the restriction and the taking issue," Justice Rushing wrote. "Here, however, the record is silent."

Instead, the Commission actually found the project, with mitigation measures, would conform to habitat protection policies. Although the Commission did not defend this position before the Sixth District, the administrative record reflected the abandoned position, and not the approval-in-lieu-of-taking proposition.

"Clearly, the Commission had a duty to make express findings that it was excusing strict compliance with the development restrictions to avoid a taking if that had been its reason for approving the project," Rushing wrote.

The appellate court directed the Commission to conduct "a new hearing at which it can consider the taking issue and make appropriate findings."

The Case:
McAllister v. California Coastal Commission, No. H031283, 09 C.D.O.S. 26, 2009 DJDAR 26. Filed December 30, 2008. Modified January 20, 2009 at 2009 DJDAR 840.
The Lawyers:
For McAllister: John Bridges, Fenton & Keller, (831) 373-1241.
For the Commission: Patricia Sheehan Peterson, (510) 622-2152.
For Monterey County: Frank Tiesen, county counsel's office, (831) 755-5045.
For Sheldon Laube and Nancy Engel: Sheri Damon, Lombardo & Gilles, (831) 754-2444.