SACRAMENTO – A federal appeals court last week has taken the highly unusual step of finding a U.S. constitutional cause of action in a challenge to a California state law – the latest wrinkle in a long-running and bitter dispute between a farm workers’ union and two large Central Valley fruit growers.

The California Legislature approved a law last year that was designed to protect the state’s businesses after two court decisions left them open to unforeseen liabilities regarding the minimum wage. The measure, Assembly Bill 1513, passed by solid majorities, was a sign of concern about broad economic harm if companies who had acted in good faith were forced to pay various fines for some commonly accepted payment practices.

This legislative overhaul of the state’s wage-and-hour law waived all penalties if, by this Thursday, the companies paid their piece-rate workers back wages for any unpaid rest periods. The legislation would have been largely noncontroversial, except that it included carve-outs for two Fresno-based fruit growers – Fowler Packing Co. and Gerawan Farming. In other words, the law apparently applied to every California business, except for these particular companies, both of which had run afoul of a union.

According to AB1513’s language, the bill does not apply to “Claims for paid rest or recovery periods or pay for other nonproductive time that were made in any case filed prior to April 1, 2015, when the case contained by that date an allegation that the employer has intentionally stolen, diminished, or otherwise deprived employees of wages through the use of fictitious worker names or names of workers that were not actually working.” That portion exempts the two companies because of an allegation made in a lawsuit.

These two firms allege that they were exempted from the benefits of the new law because the UFW had threatened to otherwise oppose the legislation, according to a Sacramento Bee report. The measure, by the way, was pushed through at the end of the legislative session as a “gut-and-amend” deal – language was stripped out of an existing bill and replaced at the last minute with new language. Such bills circumvent requirements for a full set of hearings and legislative vetting.

The district court dismissed the companies’ complaint. But in the recent ruling, the U.S. 9^th District Court of Appeals partially reversed that decision and sent it back for further review.

Although the written opinion is still forthcoming, this is a significant ruling that focuses attention on the concept of equal protection, which was the main allegation made in the lawsuit. As their complaint argued, a key section of the law “not only arbitrarily excludes and punishes one employer based solely on an unproven allegation. It arbitrarily includes and protects employers, alleged to have used ghost workers, so long as they were sued after April 1, 2015. … (T)he ghost worker allegation carve-out is simply a mechanism to subject Fowler to disparate and punitive legislative treatment based solely on an allegation of wrongdoing.”

The appeals court, however, rejected the farms’ claim that the law had violated “bill of attainder” provisions in the U.S. Constitution. That refers to an act by any legislature that inflicts punishment without the protections of due process or judicial review – i.e., “trial by legislature.”  The plaintiffs had argued that the California Legislature exempted those companies based on some union allegations and was a form of punishment against them, in that it singled out Fowler and Gerawan, and did so without any legitimate, non-punitive purpose.

“By denying those employers the protection that every other employer enjoys, the Legislature essentially adjudged them to be guilty of egregious conduct. But the Constitution does not give legislatures the power to determine guilt, it grants that authority to courts,” explained the Pacific Legal Foundation’s Wencong Fa, in a column in the San Francisco Daily Journal. The foundation had filed an amicus brief on behalf of the companies and several farm organizations including the California Farm Bureau and Western Grower.

The Fowler and Gerawan labor disputes have been a long-running California saga. The UFW has had a variety of disputes with Fowler. In the Gerawan situation, the company says the UFW had re-emerged at the farm after a long hiatus, claiming to be the rightful representative of the farm workers there. The state Agricultural Labor Relations Board had refused to even count the ballots in a union de-certification election there – and imposed a seemingly unwanted contract on workers there. It’s become a national news story and litigation continues.

AB1513 was supported even by some agricultural organizations because of the advantages it provides to the industry in general. There’s little disagreement it was the result of tough negotiations – a point the Brown administration has made in support for the law. But that doesn’t mean Fowler and Gerawan don’t make a valid argument. The new law could be of overall benefit to most California agricultural companies while still unfairly singling out two companies involved in disputes with one of the groups involved in those negotiations.

The official Assembly bill analysis puts the issue in perspective: “Supporters argue that this bill is a fair compromise for both employers and workers, addressing a situation where there was a significant development in case law. … Opponents argue that these arbitrary provisions set forth a troubling precedent that represents political targeting that sacrifices some companies to continued legal exposure in exchange for legal protections afforded to others.”

Fowler and Gerawan asked the state to suspend enforcement of this week’s deadline pending the outcome of the case as the federal courts take the rare step of reviewing a constitutional challenge to piece of state legislation. 

Steven Greenhut is Western region director for the R Street Institute. Write to him at sgreenhut@rstreet.org.

The March court ruling suggests that plaintiffs could renew their legal challenge once the authority finalizes its funding plan to trigger use of state bond money. [Court ruling can be found at the bottom of the page.] Plaintiffs have not announced if they will appeal the court’s decision. The authority can use federal tax dollars to purchase land in the meantime, and has purchased more than a third of the 1,505 parcels needed, according to authority documents.

Incompatible with bond measure

Plaintiffs, including Kings County and other landowners affected by the project, argued that the authority’s plan is contrary to what was sold to the voters. Plaintiffs said the authority’s estimated train speeds, funding mechanisms and plan to use existing tracks don’t comply with the bond measure that funded the project.

Voters in 2008 approved $9.95 billion in bonds to fund the rail service from Southern California to Sacramento and the San Francisco Bay Area. The rail project faces other legal challenges focused on the state’s use of cap-and-trade proceeds.

Sacramento County Superior Court Judge Michael Kenny ruled that project opponents’ allegations were premature. The case, originally filed in 2011, questioned whether the authority was complying with the 2008 Prop. 1A bond measure.

Project opponents questioned three promises: whether an express train can travel from Los Angeles to San Francisco in two hours and 40 minutes, whether the project is financially viable and whether a plan to share existing tracks and facilities was permitted by the bond measure.

Though the judge ruled that the case was premature, he hinted that there were potential problems with evidence presented by the Rail Authority.

Attorney Stuart Flashman believes that what the judge said “fired a shot across the bow,” warning the Rail Authority that he had issues with travel times required in Prop. 1A, particularly through the peninsula between San Francisco and San Jose. Trains must be able to travel that segment in 30 minutes or less.

Revised trip times

In January 2013, the authority’s consultants estimated trip times of 30 minutes at 125 mph or 32 minutes at 110 mph, according to the court ruling. A month later, a revised memo listed a faster time, 30 minutes at 110 mph.

“There is no clear explanation for this change in conclusions,” the ruling says.

The judge also warned the Rail Authority that they used the wrong location in San Francisco.

The Rail Authority used 4th and King instead of Transbay Terminal as the northern point to measure the 30-minute travel time to San Jose. The difference from 4th and King to Transbay Terminal is 1.3 miles but a very slow and expensive gap. It has twists and turns, which will greatly restrict speed and which experts estimate could cost as much as $4.5 billion.

Deputy Attorney General Susan O’Grady argued that Prop. 1A did not indicate that Transbay Terminal was the northern measuring point for travel time. The judge disagreed.

Additional challenges

There are many other challenges that the Rail Authority must meet in the immediate future. Its newest business plan, released in February, changed construction direction. While still starting in the Central Valley, construction would now extend north instead of south.

Two lawsuits are pending concerning the rail project’s use of funds from the state’s cap-and-trade program. One, presented by the Pacific Legal Foundation, challenges the program’s existence since it did not pass by a two-thirds vote. The foundation considers the cap-and-trade proceeds an improper tax. The other suit, brought by the nonprofit group TRANSDEF, argues the project is ineligible since it will take decades for it to offset the greenhouse gases it produces as it is built. Assembly Bill 32, the state’s sweeping climate change policy passed in 2006, requires a reduction of greenhouse gases to 1990 levels by 2020, and the first high-speed rail segment will not be operational until 2025.

One has a shot at passing. The other doesn’t.

Senate Bill 400 would require the California High-Speed Rail Authority to use at least 25 percent of its cap-and-trade funds for projects to reduce or offset construction emissions. The bill comes as two groups have brought legal challenges to the state’s cap-and-trade program and the state’s plan for measuring emissions from the high-speed rail project. The bill traces its origins to the powerful Hispanic caucus and is expected to pass in the largely pro-rail legislature.

SB400, introduced by Sen. Ricardo Lara, D-Bell Gardens, has been approved in the Senate and is moving through committees in the Assembly.

Last year the Legislature appropriated 25 percent of the state’s revenues from cap-and-trade auctions to the high-speed rail project. SB400 would reduce construction funds to 18.75 percent of the revenues, with the remainder going to “reduce or offset greenhouse gas (GHG) emissions directly associated with the construction of the high-speed rail project and provide a co-benefit of improving air quality,” according to a Senate analysis of the bill.

The analysis suggests that this bill might save the cap-and-trade program, which is being challenged by two lawsuits.

Lawsuits against AB32 and HSR

A suit brought by the Pacific Legal Foundation, which favors limited government and “sensible environmental policies,” claims that the very existence of the cap-and-trade program is an illegal tax. The case is on appeal and expected to be heard in the fall.

A second suit asserts that a state plan to reduce emissions improperly calculated the impact of the high-speed rail project — which the plaintiffs allege will actually contribute to greenhouse gases instead of reduce them.

The plaintiffs in their complaint say that the state’s estimates “were neither real, permanent, quantifiable or verifiable but were instead illusory because in reality the construction of the (rail) project would result in a significant increase in (greenhouse gas) emissions prior to 2030 or beyond.”

The suit is being brought by the Transportation Solutions Defense and Education Fund, a nonprofit environmental group.

Cap and trade bailing out high-speed rail project

The rail project is not slated to be operational by 2020, which is the deadline in state law to reduce the state’s greenhouse gas emissions to 1990 levels.

The Senate analysis points out that state law restricts the use of cap-and-trade funds.

“The Constitution requires that a clear nexus exist between an activity for which a mitigation fee is used and the adverse effects related to the activity on which that fee is levied. …

 

“It is important that legislation allocating cap-and-trade revenues ensure that the funds are being used to reduce (greenhouse gas) emissions. If opponents of the program can convince the courts that the revenues are not being used appropriately, the entire cap-and-trade program could be jeopardized.”

The analysis hints that the rail program’s use of cap-and-trade funds, as currently outlined, doesn’t meet legal standards, and that passage of the bill would shore up the legal standing of the program and help the state win the pending court cases.

“If opponents of the program can convince the courts that the revenues are not being used appropriately, the entire cap-and-trade program could be jeopardized,” the analysis reads.

The cap-and-trade program is estimated to bring in as much as $2 billion a year in fees.

Further analysis on SB400

An analysis in the Assembly shows that some lawmakers remain sympathetic to the aims of the bill but not as positive on its potential effects.

The bill would significantly drive up the cost of the rail project by reducing its only stable revenue stream, according to a summary of transportation committee members’ concerns. This could threaten completion and jeopardize any future environmental benefits.

“The project is already sorely underfunded,” the analysis states.

The analysis also points out that SB400 is intended to offset environmental impacts from construction but does not impose any requirement that the redirected money, approximately $125 million, be spent in communities near the construction zones. The bill could result in “millions of dollars being spent in Southern California, hundreds of miles from the high-speed rail construction sites.”

In other words, it could result in a money grab for other transit projects in Southern California, not the “disadvantaged communities” proposed in the bill.

Republicans in the Legislature have been unsuccessful for the past three years with more than a dozen bills that attempted to manage, change or end the high-speed rail program. All failed on party-line votes to get out of committee. In fact, Rep. Jim Patterson, R-Fresno, has a graveyard with little tomb stone markers set up in his backyard for failed bills he’s introduced on various subjects including high-speed rail.

Despite the fact that Senate Bill 3 has bipartisan sponsorship, from Sens. Andy Vidak, R-Hanford, and Rudy Salas, D-Bakersfield, it’s expected to suffer a similar fate.

The bill would direct the Legislature to approve putting high-speed rail back on the ballot. It would redirect high-speed rail funds to retiring the debt incurred from the issuance and sale of bonds. It would also require that unsold bonds use half the net proceeds for funding repair and new construction projects on state highways and freeways. The other half would be used to fund projects on local streets and roads.

In a controversial decision late this July, the California Court of Appeal for the Third District brushed aside claims that ballot wording and voters’ intent carried legal weight that legislators’ plans did not. Now the Pacific Legal Foundation has joined the original Kings County plaintiffs in appealing that verdict, hoping to be heard by the California Supreme Court.

In the case summary posted on its website, PLF lawyers described two lines of argument they’ll make before the court, if the appeal is accepted. First, PLF alleged, state officials “attempted to evade meaningful oversight” of the high-speed rail project. The evidence before past courts, PLF claimed, has been “insufficient” to justify “even the most lenient judicial review of the High Speed Rail Finance Committee’s decision to authorize issuance of the bonds.”

Billions on the line

Those bonds are at the heart of the fight over the bullet train’s future. The plaintiffs arrayed against their authorization have maintained that at least $8.6 billion of bonds cannot be sold unless the terms set out in Prop. 1A have been fulfilled. Stu Flashman, the attorney representing plaintiffs from Kings County, said the ballot measure’s language was “clearly intended to protect the state from the financial risk” the train might create. According to plaintiffs, courts must recognize that voters approved Prop. 1A in accordance with the plain reading of its text, not because they supported the more vague or general goal of high-speed rail.

Previously, Sacramento County Superior Court Judge Michael Kenny had agreed, ruling against the bullet train in three ways across two separate decisions. He held that California’s preliminary funding plan fell short of Prop. 1A by fudging its funding sources. Furthermore, he held that California could not issue a so-called “blanket validation” for train bonds because it had not properly determined whether the issuance was currently “necessary and desirable.” Additionally, Kenny determined that the state could not start building out the train’s infrastructure without official clearance on potential environmental issues.

Pivoting off the first two elements of Kenny’s rulings, PLF has prepared arguments for the state Supreme Court that assert a “bait and switch” pulled on California taxpayers. The state, PLF alleged, has failed to show the courts “that the current, significantly modified project outline is consistent with the design that was presented to voters when they approved bonds for the High Speed Rail project” with an affirmative vote for Prop. 1A.

A reversal in the courts

But the appellate judges who recently reversed Judge Kenny disagreed. “Instead of deciding whether the state had, in fact, violated Proposition 1A as the project’s opponents claimed, the appellate judges ruled that the contentious funding plan was valid regardless because the state Legislature approved it,” the San Jose Mercury-News reported in August, as preliminary construction for the project got under way.

This line of legal reasoning threw plaintiffs a curveball. In addition to arguing to the California Supreme Court that Prop. 1A plainly imposes requirements the state failed to meet, they must also argue that the language of Prop. 1A must take legal precedence over Sacramento’s legislative stamp of approval.

That is why PLF has taken pains to claim state officials have tried to “evade meaningful oversight” of the train’s funding and construction. In an additional wrinkle, the actual access to the train’s funds raises a separate legal question that plaintiffs have threatened to bring before the higher court.

Michael Brady, attorney for Kings County farmer John Tos, told Bloomberg he could “challenge the legality” of trying to “access the monies in the bond fund.” Officials, he indicated, must apply for the funds through a section of the law that’s “actually much tougher” than other provisions when it comes to showing compliance with the state’s legal authorization.

The next action will be for the Supreme Court to take or deny the appeal.

By Katy Grimes

SACRAMENTO — The Pacific Legal Foundation just won an important property rights case.

The U.S. Supreme Court case expanded the right to just compensation to “non-takings” of property in Koontz v. St. Johns River Management District.

Paul Beard, the PLF attorney who litigated the Koontz case, said the decision is important for property owners because no longer will the government be able to force them to apply for permits to pay money to the government without constitutional scrutiny on the reason for the extortion.

Until now, permitting agencies have been able to demand money for land use permits without showing just cause.

“The ruling says the Fifth Amendment protects landowners from government extortion, whether the extortion is for money or any other form of property,” Beard told me in an interview. “The Supreme Court said limits imposed by the St. Johns River Water Management District on how Koontz used his land were a ‘taking’ subject to compensation under the Fifth Amendment of the U.S. Constitution.

“The court has recognized that money is a form of property, and the Constitution prohibits grabbing money from property owners the same way it prohibits grabbing land without compensation.”

 The left reacts

“The decision is a very serious loss for local governments,” said John Echeverria, a Vermont Law School professor specializing in land use and property rights, who filed a brief for state and local government associations on St. Johns’ behalf, as quoted by Reuters.

“It means requirements to pay fees or other payments as a condition of permit approvals will be subject to heightened scrutiny. That is a revolutionary change in the law.”

Siding with government power against private property, in dissent were the four most liberal justices: Ruth Bader Ginsburg, Steven Breyer, Sondra Sotomayor and Elena Kagan. Wrote Kagan in the dissent,“The boundaries of the majority’s new rule are uncertain, but it threatens to subject a vast array of land-use regulations, applied daily in states and localities throughout the country, to heightened constitutional scrutiny.”

The Koontz family case

Even though Coy Koontz offered to dedicate much of his 11 acres for conservation, when he sought permission to develop a few acres in Central Florida, he was told he must spend up to $150,000 to improve the government’s property miles away.

The monetary expense demand by the permitting agency was far in excess of any impact that their land use proposal would create, Beard said.

The Koontz family fought this injustice in the courts for nearly 20 years, during which time Coy Koontz, Sr.  passed away. The family finally won. “Their victory protects all permit applicants from government extortion,” Beard said. “Everyone who values constitutional property rights owes the Koontz family a debt of gratitude for this historic victory.”

The landmark Nollan case

The most notable previous land-use challenge was the Nollan case. In 1987, the Nollans owned beachfront property in Ventura County and wanted to replace a 504-square-foot bungalow which had fallen into disrepair with a 2,500-square-foot house.

Nollan v. California Coastal Commission went all the way to the U. S. Supreme Court because the California Coastal Commission tried to force the Nollans to give up a piece of their beach front land as a public easement as a condition of approval of a permit to demolish the existing bungalow and replace it with a three-bedroom house. The Coastal Commission had asserted that the public-easement condition was imposed to promote the legitimate state interest of diminishing the “blockage of the view of the ocean” caused by the construction of the larger house.

In a highly controversial 5-4 ruling, the court ruled that the requirement by the Coastal Commission was a constitutional “taking” of private property in violation of the Fifth and Fourteenth Amendments of the U.S. Constitution.

Koontz SCOTUS decision

“Our decisions in Nollan v. California Coastal Comm’n, 483 U. S. 825 (1987), and Dolan v. City of Tigard, 512 U. S. 374 (1994), provide important protection against the misuse of the power of land-use regulation,” wrote Justice Alito, who delivered the opinion of the court in the Koontz case. “In those cases, we held that a unit of government may not condition the approval of a land-use permit on the owner’s relinquishment of a portion of his property unless there is a ‘nexus’ and ‘rough proportionality’ between the government’s demand and the effects of the proposed land use.”

But permitting agencies spent decades working around the Nollan and Dolan decisions, which greatly displeased Alito.

“Extortionate demands for property in the land use permitting context run afoul of the Takings Clause not because they take property but because they impermissibly burden the right not to have property taken without just compensation,” Alito wrote. “As in other unconstitutional conditions cases in which someone refuses to cede a constitutional right in the face of coercive pressure, the impermissible denial of a governmental benefit is a constitutionally cognizable injury.”

By Katy Grimes

Ding dong! Could CARB be dead?

The Pacific Legal Foundation filed a lawsuit yesterday against the California Air Resources Board challenging California’s cap and trade regulation.

The cap and trade program was created by CARB ostensibly as part of AB 32, California’s Global Warming Solutions Act of 2006.

“The regulation creates a quarterly auction program requiring many California employers to bid significant amounts of money for the privilege of continuing to emit carbon dioxide — or be faced with closing their doors in California, laying off their employees, and moving their businesses to other states,” the PLF explained in a press statement.

The PLF said the lawsuit challenges the auction process “as an unconstitutional state tax because it was not enacted by two-thirds majorities in both chambers of the Legislature, as required for new taxes by the California Constitution (Proposition 13 and Proposition 26).”

“The California Constitution is crystal clear that new state taxes require at least two-thirds approval in both chambers of the Legislature,” said PLF attorney Ted Hadzi-Antich. “The ‘cap and trade’ auction program is a new state tax that will generate billions of dollars of revenues for the state on the backs of California taxpayers. Because it was not passed by at least a two-thirds majority vote of the Legislature, it is unconstitutional. Case closed.”

We at CalWatchdog have been saying this for several years.

And CARB has tried to make it sound as if the cap and trade auctions have been a resounding success. They haven’t been.

Even more importantly, the overshadowing issue is the secrecy in which the auctions have been conducted by the state agency, and its refusal to publish any information about the bidders or the amounts of carbon credits they purchased.

But back to the PLF and the reason for the lawsuit.

“It is stunning that the tax was imposed by bureaucratic fiat,” Hadzi-Antich continued. “CARB wasn’t implementing any provision of AB 32 with the auction program for massive new revenues. It decided to raise billions of dollars for the state by making up a new tax out of thin air. In a representative democracy, we can’t have unelected bureaucrats grabbing legislative power and concocting burdensome new tax programs that siphon even more money from productive, private hands into an already bloated public sector.

“CARB’s auction program isn’t just unconstitutional, it’s also an assault on economic and environmental common sense,” Hadzi-Antich continued. “California cannot even hope to address global warming issues without widespread participation by other governments. Yet except for the isolated Canadian province of Quebec, no other governments are promulgating similar regulations. As the costs mount and businesses move out of California, other states will welcome them. There’s got to be a better, more rational way to deal with the issues than CARB’s all-too-transparent scheme to generate billions of dollars for the state through an illegal tax.”

Here is the lawsuit by the Pacific Legal Foundation.

We will stay on top of this exciting legal case.

For more about CalWatchdog’s CARB coverage, here is a link to our stories about CARB, and a link to stories about CARB’s cap and trade program.

By Dave Roberts

One of the reasons many California businesses are struggling to survive or are leaving the state is over-regulation by the state’s vast bureaucracy. While much of the economic devastation can be quantified, one of the more elusive pieces of data is the number of businesses that never get started due to onerous regulations. A case in point is the former Marshall Tavern on Tomales Bay in Marin County, which the new owners want to turn into a bed-and-breakfast inn.

In 1870, the Marshall Brothers built a hotel on the site, the first commercial structure in the town of Marshall. It served tourists and boaters until it burned down in 1971, leaving only the pilings that supported the hotel where it extended over the water. In 1873, the Marshalls built next to the hotel a hardware store and soda shop, which eventually morphed into a tavern.

For a while in the early 1970s the tavern, under the ownership of John Vertigan, turned into a happening place, featuring musicians such as Neil Young, Mimi Farina, Joan Baez and Van Morrison.

“The tavern became this great unifier of all the West Marin folks — ranchers, artists, latter-day hippies,” said Gary Giacomini, a former county supervisor, according to Vertigan’s obituary. “The focus was camaraderie and fun. I loved it for that.” Vertigan told a reporter in 1999, “It was a magical time. Musicians really liked playing there…. We couldn’t pay them much, but we gave them everything we could.”

He sold the tavern in 1976. It eventually fell into disrepair, shut down in 1990 and was condemned by Marin County in 1992. Since then it has become an eyesore or curiosity for passing motorists on Highway 1 and boaters on Tomales Bay.

In 2004, Daniel Altman and Avi Atid paid $510,000 for the two tidelands parcels containing the tavern building, a dilapidated shack, rundown pier and the site of the former hotel. For the past nine years they have been planning to renovate the tavern building, converting it into a six-unit bed-and-breakfast inn. In 2010 they were granted approval for their plans from the Marin County zoning administrator.

‘A wonderful project’

“It’s a wonderful project,” the zoning official said, according to the San Jose Mercury News. “I think the county and the community want to see it happen.” The staff report was also supportive: “The Marshall Tavern project represents an acceptable adaptive reuse for a historically important building.”

And residents in the area are also looking forward to the building’s restoration. Comments after a recent Marin Independent Journal article on the restoration plan included:

“Let’s hope this works out at last, and that the developers have good taste and a sensitivity for our vernacular historic buildings!”

“I hope the new owners are successful. I have stopped and looked at that building many times. Such a waste of a great location… until now.”

“Great to rebuild these historic buildings lest we forget how we got here.”

“Used to play music there. Great place, didn’t know it fell on hard times…”

“Yes! I loved that place. This is great to see.”

But there’s a chance the renovation won’t happen and the building will continue rotting away until it collapses. The California Coastal Commission has imposed conditions on its restoration that are so restrictive and expensive that Altman and Atid may cancel the project altogether.

“The commission’s costly demands aren’t just unfair. They will make our plans for renovating and reopening the Marshall Tavern financially impractical,” said Altman. “We might even have to sell the property. This is a tragic development because we want to make a beautiful, vibrant addition to the area’s historic district, and the commission’s demands will make it impossible for us to do so.”

The commission’s conditions require the construction of a large public pier, the dedication of a five-foot-wide strip for 24-hour public access (passing directly under guests’ windows), the removal of the old hotel pilings (potentially costing more than $100,000) and a use restriction that could prevent future development of the old hotel property.

Coastal Act issues

The Coastal Commission cited the Coastal Act as justification for these conditions, which were imposed at its Dec. 13, 2012 meeting. Laurel Kellner, a staff analyst, told the commission:

“In general the proposed project represents a Coastal Act priority visitor serving use that would provide new visitor opportunities and enhance the public’s ability to enjoy a picturesque part of the Tomales Bay shoreline. Located over the water, it provides a unique setting for a small-scale overnight facility.

“However, these same attributes raise Coastal Act issues. The expanded pilings represent a form of wetland fill not allowed for this type of use and result in marine resource impacts. The site is subject to a public trust easement. Public recreational access to the site is not protected nor maximized. The project will modify and increase massing of a significant public view out toward Tomales Bay. The site is subject to shoreline flooding and other hazards. It will require shoreline-altering retaining walls and piers to provide protection from such hazards. As a result, the project cannot be found consistent with the Coastal Act.

“However, consistent with the mandate of the Coastal Act section 30010, and since any economic use of the property would necessitate fill of Tomales Bay, staff recommends approval of the bed-and-breakfast in order to provide for a reasonable use of the property that will avoid an unconstitutional taking of private property for public use. Staff recommends special conditions necessary to find the proposed development consistent with the otherwise applicable policies of the Coastal Act, including the public access and recreation policies. And to recognize that, although the applicant owns title to the subject tidelands, such tidelands are protected by a public trust easement.”

Altman pleaded with the commission to remove some of the conditions. Public access will be provided with the pier, so he doesn’t see the need also to provide access under the guest windows. He also doesn’t want to remove the old hotel pilings, which he wants to use for a future project, perhaps another bed-and-breakfast. And he objected to the requirement to remove a fence, saying it’s there for public safety.

Pleas for leniency

Atid also pleaded for leniency, saying, “This has been with the Coastal Commission for more than two years. We have been trying very hard to find something that would work. It took us almost two years to get the use permit from the county.”

He also objected to the public access requirement, noting that it would be along the building’s highway frontage. “It’s important to have some sense of privacy because this is very exposed, it’s very close to the freeway,” said Atid. “And to have a public access right there we think is dangerous.”

Kellner defended the restrictions, saying that “although the owners have title to the underlying property, the state retains a public trust easement over the lands. And this easement is for public uses, including public recreational uses. The public trust easement that applies here is a fundamental component, which informed the staff recommendation, including the conditions that are now being challenged by the applicants.”

The commission, as commissions usually do, sided with its staff.

“We have a significant opportunity for public access coming out of this,” said Steve Kinsey, a commissioner who also represents much of the Marin coast on the Marin Board of Supervisors. “While at the same time the applicant gets the opportunity to reconstruct a slowly dying building before it goes completely back into the bay. I personally believe that this is an example of the best of what we can get through the Coastal Act, which will restore the historic character of part of our legacy on the Tomales Bay. But also provide a return of public access into the bay with the public pier.”

The commission then unanimously approved the project, subject to the conditions in the 74-page staff report.

PLF files lawsuit

Altman and Atid, with the help of the Pacific Legal Foundation, have decided to sue the Coastal Commission, challenging the public access requirement, the piling removal and the use restriction. The lawsuit bases the challenge on a 1987 case that PLF successfully won in the Supreme Court: Nollan v. California Coastal Commission.

That case “struck down an attempt by the Coastal Commission to condition a building permit on the dedication of a public-access easement,” according to the PLF. “The Court held that imposing a condition that has no connection to the impacts of the project is unconstitutional, and nothing but an ‘out-and-out plan of extortion.’ The restoration of the Marshall Tavern will not interfere with public access and is unrelated to the presence of the pilings on, and future use of, the neighboring parcel. Altman and Atid’s case demonstrates that the Coastal Commission has still not learned the lesson of Nollan.”

PLF attorney Jonathan Wood said, “The Coastal Commission is up to its old tricks, using the permitting process to make extortionate demands on property owners. If the Commission wants property owners to give up their property rights, it should pay for them. It cannot use the permitting power to evade the constitutional duty to provide compensation. But the commission has difficulty respecting constitutionally guaranteed property rights, so once again it has to be taken to court.”

PLF expects the case to be heard in Marin Superior Court toward the end of the year.