Question: When does the act of going out of business — in this case: closing a gate and painting over a sign that advertises when the gate will be open and the price of admission — require a development permit? Answer: For Californians who live anywhere near the Pacific Ocean, a development permit is required when the Coastal Commission says it is. More precisely, it is required when a court says that the permit is mandated by the California Coastal Act of 1976.
Thus it is that last week an appeal to the U.S. Supreme Court was filed by the owner(s) of Martins Beach in the case of Martins Beach 1, LLC and Martins Beach 2, LLC v. Surfrider Foundation (California Court of Appeal, First Appellate District, August 9, 2017).
Martins Beach consists of 89 acres along the California coast in San Mateo County. For most of the last century, it was owned by a family known as the Denneys. The Denneys used it as a beach access business. According to the appeal, “After paying the fee set by the Denneys, patrons could use the private road to enter the Deeneys’ property, park in the parking lot the Denneys built and maintained, and use the beach and other amenities the Deeneys built and maintained…” While the Denneys originally charged only $0.25 to access their beach, over time, they gradually increased the fee to $2 and ultimately $10. But, by the 2000s, their business was no longer profitable…”
In 2008, the Denneys sold the property to the present owner(s). Initially, the new owner continued the operation of the business, although the business operated at a considerable loss. Even while keeping the business open the new owner painted over the bill board, that the Denneys erected, which advertised the business.
Again, quoting from the petition, “In February 2009, the first winter that petitioner [i.e. the present owner] owned the property, it followed the Deeneys’ practice of temporarily closing the property to the public until the weather improved, and posted a sign on the gate stating “Beach Temporarily Closed.”
“While that practice had never drawn any objection during the many decades the Deeneys followed it, this time it prompted an immediate ‘Informational Warning Letter’ from San Mateo County. The County, which shares power with the California Coastal Commission to enforce the California Coastal Act… maintained that ‘any change in the public’s ability to access the shoreline at Martins Beach triggers the need for a CDP [i.e. ‘coastal development permit’] because it represents a ‘change in the intensity of use of water or access thereto.’ “
The owner and the county went back and forth. Some months later, “The County advised [the owner] that it must either: (1) immediately allow public access on a year-round basis for a $2 fee; (2) provide evidence documenting that the specific times, hours, terms, and fees under which [owner] was operating the beach were the same as those in place in 1973 (the year the CDP requirements took effect); or (3) apply for a CDP authorizing any changes in the times and terms of public use.
Finally, in 2009, the owner initiated a lawsuit against the Coastal Commission; but the court dismissed the action. The owner then decided to close the business. Two years later, the Commission sent the owner a letter saying he had to apply for a development permit. Again, there was a lot of back and forth, but no determinative action.
Then, in 2013, Surfrider Foundation initiated a new suit, claiming the owner had “engaged in unpermitted ‘coastal development’ in violation of the Coastal Act when it, as the appeal puts it, “(1) closed its own gate to its private road; (2) painted over its own sign advertising its private business to the public; and (3) stationed security guards on the property to deter trespassing.”
This time, the trial court ruled in favor of Surfrider. Its judicial order reads, “[Owner is] hereby ordered to cease preventing the public from accessing and using the water, beach, and coast at Martins Beach until resolution of [a Coastal Development Permit] application has been reached by San Mateo County and/or the Coastal Commission. The gate across Martins Beach Road must be unlocked and open to the same extent that it was unlocked and open at the time [owner] purchased the property.”
The owner appealed but the Appellate Court upheld the trial court. The owner had argued, “…if the Coastal Act really does require a private property owner to seek a permit before it may exercise its fundamental right to exclude [others from the property], or even change the message on a sign inviting the public to use its private property, then the Act violates the Takings Clause, the Due Process Clause, and the First Amendment.” Also, the owner argued that “…the injunction itself constitutes an unconstitutional taking, as it compels petitioner to keep its private property open to the public right now and provides no compensation for the government-mandated public easement.”
The Appellate Court reasoned that the action could not be considered a taking because it was not permanent. That is, it was still open to some kind of resolution through the permit process. Because it was temporary, the court said, no compensation was required.
This issue appears to be the most likely reason for the Supreme Court to take the case. Lower courts have been divided on the question of whether or not a temporary taking requires compensation. Certainly, there have been temporary takings that required compensation — think of the government’s take-over of factories during World War II. But there are other cases where compensation was not required. It is the sort of stuff that Supreme Court cases are often about.
We shall see what happens in the case of Martins Beach.
