Sometimes in land use law, the most impactful court holdings come from the simplest of cases. That may be the situation with the new California Court of Appeal decision in Bowman v. California Coastal Commission, issued by the court on March 18, 2014.
Walton Emmick owned property in San Luis Obispo County. In May 2002, Emmick applied to the County for a Coastal Development Permit ("CDP") to rehabilitate an uninhabitable home on the property. Emmick died in March 2003. The County subsequently issued the CDP ("CDP-1") to Emmick's successor, SDS, subject to a condition that SDS dedicate a lateral access easement for public access along the shorefront portion of the property. SDS did not appeal the condition.
In December 2004, SDS applied to the County for a second CDP ("CDP-2") for construction of a new barn. The application included a request that the lateral access easement condition of CDP-1 be removed. The County approved CDP-2, including the removal of the coastal access condition. Environmental groups and coastal commissioners appealed the County's decision to the California Coastal Commission. After hearing, the Commission determined that the easement condition contained in CDP-1 is "permanent and binding on the landowner" and conditioned its grant of CDP-2 upon implementation of the easement condition. SDS sued.
Court of Appeal's Analysis
The court of appeal affirmed the trial court's ruling upholding the decision of the Coastal Commission. SDS argued that the access easement condition constituted an unlawful exaction of its property under the Supreme Court's seminal decisions in Nollan v. California Coastal Commission and Dolan v. City of Tigard because the condition was not roughly proportional to the burden the project placed on the public interest. The Commission, on the other hand, argued that it did not create the easement condition, that it imposed no exaction upon SDS's property and that it had done nothing more than refuse to remove a valid and binding condition.
The court of appeal agreed with the County holding that where an administrative tribunal has rendered a quasi-judicial decision that could be challenged by administrative mandamus, a party's failure to pursue that remedy will give rise to collateral estoppel. According to the court, the failure to pursue administrative mandamus will preclude the litigation of claims that were actually litigated in a prior proceeding or that could have been litigated. Thus:
[W]hen the County granted CDP-1 it made a quasi-judicial determination that the lateral easement condition was valid for the proposed development because development would lead to an increased use of the property. When SDS failed to appeal, that determination became final. SDS may not collaterally attack the determination of validity.
While its impact is potentially far reaching, it remains to be seen how far the courts will extend the holding of the Bowman decision. For example, would the holding apply in litigation filed by a third party where the governmental agency has agreed to remove or modify a permit condition in a subsequent permit application? Would subsequent purchasers of real property also be collaterally estopped from challenging conditions upon permits obtained by their predecessors? Those questions may be answered by the court of appeal somewhere down the road and may be answered in ways that property owners will not like.
The takeaway from the holding of the Bowman opinion is that when property owners seek land use entitlements from government agencies, what happens in the administrative process matters and it matters in a big way. I've written before (see Litigant's Failure to Establish Basis for Property Tax Base Transfer Highlights the Need to Exercise Special Care in Administrative Proceedings to Ensure that Judicial Remedies are Preserved) about how important it is that property owners be diligent in administrative proceedings to ensure that judicial remedies are preserved. Bowman makes that point crystal clear. A property owner dissatisfied with the result in an administrative process and wishing to challenge the agency's decision must take immediate action by filing any available administrative appeals and, if still not satisfied, challenging the decision in court. Failing to pursue those remedies at that point in time poses the risk that the right to a remedy will be lost forever. Likewise, those who are considering purchasing real property need to understand what they are buying lest they be surprised down the road that the use to which they intend to put the property was foreclosed long ago in a land use decision that may no longer be challenged.