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California Court of Appeal Finds Coastal Commission’s Coastal Act ‘Do Novo’ Review Moots CEQA Challenge to Municipal Approval of Coastal Development Permit

The Fourth District Court of Appeal upheld the trial court’s determination that the California Coastal Commission’s (Commission) acceptance of an appeal of a local agency’s decision to grant a Coastal Development Permit (CDP) mooted a California Environmental Quality Act (CEQA) action challenging the local agency’s decision. According to the court, because appeals to the Commission are heard de novounder the Coastal Act, the Commission’s acceptance of the appeal nullified the local agency’s decision. Despite the fact that the project was completed while the case was pending, thereby rendering the entire case moot, the court elected to decide the case in any event because it presented a classic example of a question of public interest that is capable of repetition, yet evading review. [Fudge v. City of Laguna Beach, ___Cal.App.5th___, Case No. G055711 (4th Dist. Feb. 13, 2019).]

 

 Factual and Procedural History

In 2016, Hany Dimitry bought a house located on the coastline in the City of Laguna Beach. He planned to demolish the house and replace it with a new, three-story, single-family residence. Dimitry’s neighbor Mark Fudge opposed the project, contending that the existing house, which was built in 1930, had historical value as a relatively unaltered example of Spanish Colonial Revival Design and that the new house would obstruct view corridors.

In 2017, the city approved a CDP for demolition, but took no action on the proposed new house. In June of that year, Fudge appealed the city’s approval of the CDP to the Commission, as permitted under the Coastal Act. The next month, while the Commission’s de novohearing was pending, Fudge filed a CEQA lawsuit in the superior court seeking to vacate the city’s issuance of the CDP.

After the Commission accepted Fudge’s appeal of the CDP, both Dimitry and the city demurred to Fudge’s petition on the ground that the Commission’s acceptance of the appeal mooted any possibility Fudge might be able to obtain relief against the city in court. The trial court agreed and dismissed the case. Fudge appealed.

 

The Court of Appeal’s Decision

Before addressing Fudge’s arguments, the court gave a lengthy overview of CEQA and the Coastal Act, as the two main pieces of land use legislation relevant to the case. The court first compared CEQA’s requirements for environmental review with the Coastal Act’s goals to protect, maintain, and enhance the coastal zone environment. The court then explained that under the Coastal Act, local agencies with certified Local Coastal Programs (LCPs) are authorized to approve CDPs in the first instance, but their decisions may be appealed to the Commission. While local agencies must comply fully with CEQA, the Commission is partially exempt from CEQA’s EIR requirements because it has a certified regulatory program. Once the Commission accepts an appeal, it has de novoauthority over a CDP, and does not review the local agency’s CEQA determination.

Highlighting the complexity in this area of the law, the court started its opinion with the following observation:

 

  • We venture once again into the brambled thicket of the California Environmental Quality Act—an area of the law largely governed by the unfortunate fact that complicated problems often require complicated solutions. This case is rendered more recondite by the involvement of the California Coastal Commission’s rules and procedures, effectively overlaying the enigmatic with the abstruse. The Commission’s “de novo” hearing under the Coastal Act nullified the city’s CEQA determination.

 

 

De Novo is De Novo

Fudge’s main argument was that he should be able to maintain his CEQA lawsuit against the city notwithstanding the Commission’s appellate authority because the Commission’s hearing was not truly de novosince different rules and procedures would be used. Namely, the city was required to make its decision under CEQA, while the Coastal Commission’s decisions are based in the Coastal Act. Thus, according to Fudge, the Commission’s hearing was not really de novobecause it would not be heard “in the same manner” as a city’s original granting of the CDP. Fudge based his argument on a Supreme Court case from 1937 that used the term “in the same manner” to describe de novohearings in a different, non-Coastal Act, context. Because the Commission would decide the appeal under the Coastal Act, Fudge argued that there must still be something left of the city’s decision for him to attack in court—specifically the alleged deficiencies under CEQA inherent in that decision.

The Court of Appeal disagreed. The court reasoned that Fudge’s view of de novowas incorrect because the courts are bound by the intent of the Legislature as to what hearings would look like. The court explained that when it comes to a local agency’s decision on a CDP, the Legislature has constructed a system in which appeals to the Commission would be heard de novounder the Coastal Act even though the original local decision was decided under CEQA. And the California Legislature created different rules for the Commission to use for de novohearings, as reflected in Public Resources Code § 21080.5. That section provides that when a regulatory program of a state agency is certified by the Secretary of the Resources Agency and requires submission of environmental information, that information may be submitted “in lieu of” the usual Environmental Impact Report (EIR). Thus, according to the court, the Legislature intended that the Commission’s de novoreview would not be heard “in the same manner” as local agencies, which are subject to CEQA’s EIR requirements. Based on this Legislative scheme, the court held that when the Commission accepts an appeal, that acceptance nullifies the lower entity’s decision. Accordingly, there was nothing left of the city’s decision for Fudge to attack in court and the trial court properly dismissed the CEQA case against the city. Fudge’s only means of legal redress was to challenge the Commission’s decision on the CDP.

 

Conclusion and Implications

While the Court of Appeal could have simply declared the dispute moot, it decided to publish this opinion because it involved questions regarding the environment and home development that are likely to re-occur. Sorting through the complicated set of rules the Legislature has created for appeals of CDP decisions under the Coastal Act, and its interplay with CEQA, the court held that even if the original local decision was decided under CEQA, it was the intent of the Legislature under the Coastal Act to allow for the Commission to hear CDP appeals de novo. This decision should prevent project opponents from filing CEQA lawsuits challenging a local agency’s approval of a CDP while appeals to the Commission regarding the same CDP are pending.The opinion is available here: https://www.courts.ca.gov/opinions/documents/G055711M.PDF

(Caroline Soto, Chris Stiles)