California Supreme Court Expands Coastal Commission Challenge

Published July 1, 2003

In an increasingly unusual legal scenario, the California Supreme Court agreed on April 9 to review rulings issued by the Sacramento Superior Court and the Court of Appeal for the Third Appellate District, both of which had determined the California Coastal Commission is unconstitutionally structured. The state supreme court has, however, greatly expanded the issues under consideration.

The underlying lawsuit was brought by the nonprofit Marine Forests Society of Newport Beach, California and its president, Rodolphe Streichenberger. The Society is dedicated to the creation of marine forests to replace lost marine habitats by “planting the sea” with seaweed and shellfish. The Society challenged the Coastal Commission’s authority to require the elimination of its successful environmental research offshore from Newport Beach.

Commission’s Multiple Powers

On May 8, 2001, Sacramento Superior Court Judge Charles C. Kobayashi held the Coastal Commission to be in violation of the separation of powers clause of the California Constitution. Sacramento County Superior Court Case No. 00AS00567. Kobayashi based his ruling on the fact that the state legislature appoints eight of the 12 voting members of the executive branch Commission; those eight serve solely at the will of the legislature and do not answer to anyone in the executive branch.

Because of this structure, Kobayashi held the Commission to be effectively a legislative body limited to setting policy consistent with the Coastal Act. Thus, the Commission could not perform executive and judicial branch functions such as issuing, denying, or conditioning permits, issuing cease-and-desist orders, and performing other regulatory functions.

The separation of powers concept is deeply rooted in our nation’s history and provides that the powers of government are legislative, executive, and judicial. “Persons charged with the exercise of one power may not exercise either of the others except as permitted by this Constitution.” Cal. Const., art. III, § 3.

Reforms Insufficient

On December 30, 2002, in a unanimous ruling authored by Presiding Justice Arthur G. Scotland, the Court of Appeal upheld Kobayashi’s ruling that the Commission was unconstitutionally structured. Marine Forests Society v. California Coastal Commission, 104 Cal.App.4th 1232.

Governor Gray Davis called a special legislative session to correct the constitutional deficiencies in the Commission’s structure. The resulting Assembly Bill 1X was passed by the legislature and signed by the governor on February 20, 2003.

But AB 1X changed only the nature and duration of the legislative appointees’ terms–they now will have fixed four-year terms instead of two-year at-will terms. No change was made to address the fact that the legislature appoints two-thirds of the voting commissioners and that the Commission does not answer to anyone in the executive branch.

Supreme Court Issues

In unanimously granting review of the matter, the California Supreme Court requested the parties to brief several issues. The court asked, (1) Assuming the Commission’s decision in the present case is constitutionally defective in the manner stated by the Court of Appeal, what is the appropriate remedy available to Marine Forests Society? (2) What effect would the holding of the Court of Appeal have on past and other currently pending decisions of the California Coastal Commission? (3) Does the February 20, 2003 legislative amendment eliminate the separation-of-powers defect found by the Court of Appeal, or is the composition of the Coastal Commission still vulnerable to a separation-of-powers challenge?

These briefing requests are highly unusual, apparently intended to put to rest all issues raised by the series of events described above and the resulting confusion. For example, the law upon which the Court of Appeal ruled is no longer law. The new law has not been reviewed by any court and continues to present serious separation of powers issues. At the same time, the Court of Appeal has held the actions of the Coastal Commission under the old law to be jurisdictionally invalid.

The issues of retroactivity and the constitutionality of the corrective legislation were not before the courts in the earlier proceedings in this case. That the state supreme court chose to add them greatly expands the stakes and exposure of the Commission.

Void from the Beginning?

Law schools teach that action taken without jurisdiction is void ab initio, meaning “void from the beginning.” If this basic concept is applied to the Commission, it could mean all actions taken by the Commission since it was formed in 1976 should be declared void or invalid.

However, another legal concept is de facto jurisdiction, initially intended to protect the public when it is later learned a government agency or officer thereof lacked jurisdiction to act. If a member of the public believed there was jurisdiction and the agency or official thought there was jurisdiction, then jurisdiction will be deemed so long as the government act was otherwise lawful. This concept should protect all members of the public having received permits from the Commission in the past.

A question to be addressed by the state supreme court will be whether de facto jurisdiction is available to the Commission concerning permit requests rejected in the past. Used in this manner, the concept has been losing favor in the federal courts. However, the California Supreme Court as a matter of policy may want to avoid the chaos of invalidating 27 years of coastal permit deals.

Further complicating matters, many of the Coastal Commission’s negative actions over the years were invalid on constitutional grounds other than the separation of powers. In its first 12 years the Commission routinely required property owners to dedicate substantial portions of their property to the state as a condition of receiving permits. That practice was invalidated in 1987 by the United States Supreme Court as “an out-and-out plan of extortion” in Nollan v. California Coastal Commission (1987) 483 U.S. 825, 837. However, as the Coastal Commission otherwise had jurisdiction, the California Courts of Appeal did not apply the Nollan decision retroactively, holding the applicants lost their rights if the Commission’s decisions were not appealed within 60 days.

Statute of Limitations Also at Issue

It would seem that when the Coastal Commission extorted people’s property, the Commission should not be protected by the de facto jurisdiction concept, as the Commission was not acting pursuant to law. But what if the property taken has been fully developed? Should the Commission now have to pay for it? What if the dedicated property was never accepted by the state and is lying dormant?

Those questions raise the issue of the statute of limitations. Generally, a person who has been unconstitutionally treated must seek relief within one, two, three, or five years, depending on the nature of the unconstitutional act. Special state statutes, such as the Commission’s 60-day rule, often will be ignored, especially under the Federal Civil Rights Act.

Sometimes a statute of limitations does not begin to run until the injured party becomes aware of the unlawful conduct. The constitutionality of the Coastal Commission will remain unknown until the California Supreme Court rules–most likely late this year or in early 2004.

Anyone presently dealing with the Coastal Commission should be protected by a finding of unconstitutionality of the Commission’s structure, provided they bring a timely challenge to the Commission’s action. They also should raise the separation of powers issue, although it is likely courts would allow this issue to be added once the Supreme Court rules.

There is no ability to proceed to the United States Supreme Court on this issue of constitutionality, as there are no federal issues present. Questions remain, however, as to the ruling on retroactivity, which could raise due process, takings, equal protection, or privileges and immunities issues under the federal Constitution and the Federal Civil Rights Act.

In any event, this cursory summary of issues is enough to illustrate the high risk under which the Commission and the legislature have placed themselves in seeking to preserve their domain. It is certainly a historic sequence of events upon which the California Supreme Court must now rule.

Ronald A. Zumbrun is managing attorney of The Zumbrun Law Firm, a Sacramento-based public issues firm. He has represented the Marine Forests Society and its president, Rodolphe Streichenberger, before the Coastal Commission and the trial and appellate courts. He also represented the Nollans in their challenge to the Coastal Commission practices.