California Eminent Domain Report

In September 2014, the Court of Appeal for the Fourth Appellate District issued a surprising decision, finding that even if an applicant maintains that it is accepting imposed permit conditions "under protest" and expressly asserts that it plans to challenge those conditions in court, it waives any such challenge by building the approved project.  (Lynch v. California Coastal Commission (2014) 229 Cal.App.4th 658.)  In reaching this conclusion, the majority found that the protest procedure provided in the Mitigation Fee Act was inapplicable because that Act does not apply to conditions that restrict the manner in which a developer may use its property.

The decision by the court was not unanimous, however, as Justice Nares authored a dissent that strongly disagreed with the majority's analysis.  In particular, Justice Nares focused on the permit expiration condition that required the homeowners to reapply for a discretionary permit every 20 years in order to maintain a seawall necessary to protect the newly constructed home.  Justice Nares stated that this condition amounted to a taking, because it "unconstitutionally forces the homeowners to waive their rights and property interests without any nexus or 'rough proportionality' to potential adverse impacts caused by the seawall."

On December 10, the California Supreme Court granted the homeowners' petition for review, identifying the following issues:

• Did plaintiffs, who objected in writing and orally to certain conditions contained within a coastal development approved by defendant California Coastal Commission and who filed a petition for writ of mandate challenging those conditions, waive their right to challenge the conditions imposed by subsequently executing and recording deed restrictions recognizing the existence of the conditions and constructing the project as approved?

• Did the permit condition allowing plaintiffs to construct a seawall on their property, but requiring them to apply for a new permit in 20 years or to remove the seawall, violate Public Resources Code section 30235 or the federal Constitution?

• Were plaintiffs required to obtain a permit to reconstruct the bottom portion of a bluff-to-beach staircase that had been destroyed by a series of winter storms, or was that portion of the project exempt from permitting requirements pursuant to Public Resources Code section 30610, subdivision (g)(1)?

Because the California Supreme Court granted the petition for review, the Court of Appeal's decision has been depublished and is no longer citable precedent.