SECURITY NATIONAL GUARANTY, INC v. CALIFORNIA COASTAL COMMISSION

Filed 1/25/08

CERTIFIED FOR PARTIAL PUBLICATION*

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION FIVE

The principal question that we must resolve in this appeal is whether the California Coastal Act of 1976, Public Resources Code section 30000 et seq. (the Coastal Act)[1]empowers the California Coastal Commission (the Commission) to declare that property is an environmentally sensitive habitat area (ESHA) ( 30240) during an administrative appeal from a local governments grant of a coastal development permit (CDP). Appellant Security National Guaranty, Inc. (SNG) challenges three orders of the superior court: the denial of SNGs petition for writ of administrative mandamus, the denial of SNGs motion to remand the matter to the Commission for further proceedings, and the grant of summary adjudication to the Commission.

We conclude that the Coastal Act grants the Commission no power to declare property an ESHA during a CDP appeal. Accordingly, we reverse the superior courts denial of SNGs petition for administrative mandamus. We affirm the superior courts grant of summary adjudication.

Factual and Procedural Background

The SNG Site

Appellant SNG owns, and seeks to develop, a 39-acre oceanfront site located west of state Highway 1 on Monterey Bay in Sand City. From 1927 to about 1986, the Lonestar Company conducted one of the largest commercial sand-mining operations in the western United States on the land now owned by SNG. Lonestar excavated and sold sand for industrial, commercial, and consumer uses. The sand mining operations left the site in an environmentally degraded condition, with an excavation pit near the middle of the property.

For many years after its incorporation in 1960, Sand City was the site of a number of businesses engaged in heavy commercial and industrial activities. Beginning in the 1970s, however, many of these businesses closed. Recognizing the citys need for economic recovery and development, Sand City sought to provide for commercially viable resort and recreational development on designated portions of its coastline.

SandCitys Local Coastal Program

In the early 1980s, Sand City formulated its local coastal program (LCP).[2]The LUP adopted by Sand City designated what is now SNGs site for visitor serving commercial uses. The original LUP also identified and mapped locations that were ESHAs. Section 4.2.4 of the LUP noted the existence of dune areas along the coast, explaining that the dunes were divided into two distinct locationsone east of Highway 1 and one west of Highway 1. As to the area west of the highway (and closest to the ocean), the LUP stated that [t]he area provides no natural habitats and that no ESHAs existed west of Highway 1. The only ESHAs identified and mapped in the LUP were located east of Highway 1. No ESHAs were mapped on what is now SNGs site, which is located entirely west of the highway. The LUP designated the property at issue in this appeal for visitor-serving commercial uses, with a density not to exceed 650 units.

The Commission concluded that Sand Citys LCP met the requirements of the Coastal Act and certified the LCP as consistent with the Coastal Acts goals and policies. During the certification process, the Commission proposed, and Sand City adopted, a number of modifications to the citys LCP. After these modifications, the Commission granted the Sand City LCP final certification on March 14, 1986.

In 1990, the Commission conducted a periodic review of Sand Citys LCP pursuant to section 30519.5. The periodic review resulted in the Commission making 59 recommendations to Sand City, including both LCP amendments and other actions. The record discloses no suggestion from the Commission that the property at issue in this appeal be designated an ESHA.

The Memorandum of Understanding

Beginning in the late 1980s, the Monterey Peninsula Regional Park District (the Park District) attempted to amend Sand Citys LCP to make parks and open space the preferred use on all lands west of Highway 1. In addition, the Park District and the State Department of Parks and Recreation (the Parks Department) sought to acquire coastal land within Sand City for park purposes. Sand City vigorously resisted the Park Districts efforts, because it wished to preserve certain coastal parcels for development to ensure a stable fiscal future for the city. Sand City eventually sued the Park District to challenge, among other things, the Park Districts land acquisition program in the city.

The controversy between Sand City and the park agencies continued for years. In 1995, then-State Senate Majority Leader Henry Mello intervened to mediate the coastal development dispute. Senator Mello arranged a meeting between the representatives of Sand City, the Park District, the Parks Department, and the Commission. As a result of this initial meeting, the interested parties formed a discussion group in an effort to resolve the conflict. After further meetings of this discussion group, the interested parties agreed to settle their differences by executing a memorandum of understanding (MOU).

On April 8, 1996, representatives of Sand City, the Sand City Redevelopment Agency, the Park District, and the Parks Department signed the MOU. The Commission was not a party to the agreement. Among other things, the MOU recognized the need for both appropriate development within Sand City and for the protection of coastal views, dunes, and public access to the beach. In particular, one of the MOUs stated objectives was to [e]nable appropriate public and private development . . . to occur along the Sand City Coastline; including but not limited to visitor serving and residential uses. The MOU also recognized that the site formerly used by the Lonestar Company was subject to an option to purchase by a private development company. That company was SNG.

With regard to the former Lonestar site, the MOU provided that during the active period of the option . . . or in the event the option is exercised, [the Parks Department], the [Park District], and [Sand City] agree to recognize and respect the option agreement and the option holders right to pursue development of the Lonestar Site consistent with the Sand City LCP. During that same period, the Park District and the Parks Department agreed to cease their efforts to acquire the former Lonestar site. The Park District further agreed that it would revise its application to amend the Sand City LCP to exclude the Lonestar site from the amendment. Thus, the MOU contemplated that the bulk of Sand Citys coastline west of Highway 1 would be set aside for park uses, but that in two specific areas, including the Lonestar site (now SNGs property), commercial and residential uses would be permitted.

Finally, the MOU provided that Sand City and the Sand City Redevelopment Agency would dismiss their action against the Park District. Assured by the MOU that some commercial and residential development would be permitted along the coast, Sand City and its redevelopment agency acquiesced to further acquisition of coastal properties by the park agencies for park and open space purposes.

Amendments to the Sand City LCP

Prior to execution of the MOU, the Commissions staff had offered to assist Sand City and the park agencies in developing the [LCP] amendments which are necessary to carry out the proposed MOU. To implement the MOU, the Park District and the Commission agreed upon changes to proposed LCP amendment No. 1-93. Rather than zoning all coastal properties within the City for preferred public park uses, the revised amendment No. 1-93 excluded what is now SNGs site from the park designation, thus permitting it to be developed. On April 10, 1996, the Commission unanimously approved amendment No. 1-93. The amendment became effective immediately upon the Commissions approval.

SNG exercised its option to purchase the former Lonestar site in mid-1996, and closed on the Property in early 1997. At SNGs request, on April 16, 1997, Sand City approved another amendment to its LCP to allow the land use designations on the SNG site to be mixed, rather than segregated, while maintaining the uses and densities permitted by the LCP. The Commission staff recommended that the amendment be approved with certain suggested modifications. Although the staffs analysis of the amendment discussed ESHA issues, it did not state or even suggest that SNGs site might be an ESHA. In fact, the Commissions staff found that the proposed amendment do[es] not raise an issue of conformance with Coastal Act habitat protection policies. The Commission then approved this amendment (No. 2-97) on June 11, 1997.

SNGs Project

SNGs proposed project is called Monterey Bay Shores Resort. As initially proposed, the project contained 597 units, but SNG later reduced this number to 495. The project submitted was a mixed-use development that provided for timeshare units, a hotel, residential condominiums, and visitor serving residential units, as well as a conference center. The project also contained plans for habitat restoration and dune stabilization.

SNG then applied to Sand City for issuance of a coastal development permit (CDP) for the project. On December 1, 1998, Sand Citys city council adopted a resolution approving the CDP. The CDP approval was subject to 59 conditions that SNG would have to meet before it could begin construction at the site. The city council specifically found that the project as conditioned was consistent with Sand Citys certified LCP.

Appeal of the CDP to the Commission

The Sierra Club and two members of the Commission appealed the issuance of the CDP to the Commission. (See  30625, subd. (a).) On February 3, 1999, the Commission determined that the appeal raised a substantial issue as to whether the project conformed to the Sand City LCP. ( 30625, subd. (b).) As a result, the Commission was required to consider the application at a de novo public hearing. ( 30621, subd. (a); Cal. Code Regs., tit. 14,  13115(b).)

During the administrative appeal process, the Commissions staff reviewed the project in detail and prepared a report that recommended that the Commission deny a CDP for the project on the grounds that the proposed development was inconsistent with Sand Citys certified LCP as well as Coastal Act policies regarding public access and recreation. Relying on the general policies regarding ESHAs in Sand Citys LCP, the staff report declared that the entire project site was an ESHA. The staff report made no mention of the specific finding in section 4.2.4 of Sand Citys certified LUP that there were no ESHAs in the area west of Highway 1, the area that includes SNGs site. The staff report went on to conclude that SNGs project did not adequately protect environmentally sensitive dune habitat.

In addition to its ESHA findings, the Commission staff concluded that the project did not meet LCP requirements regarding water supply. In particular, the staff report noted that the project required a water distribution permit from the Montgomery Peninsula Water Management District (the Water District) and that the Water District had denied the permit on October 26, 2000.

After a hearing on December 14, 2000, the Commission voted to deny SNGs CDP based on the findings in the staff report.[3]

SNGs Action

SNG subsequently filed a combined petition for writ of administrative mandamus and complaint against the State of California and the Commission, a petition which it later amended. Sierra Club intervened in the case. SNGs petition asserted seven causes of action, including claims for administrative mandamus under Code of Civil Procedure section 1094.5, inverse condemnation, breach of contract, and estoppel. The latter four claims are before us on appeal.

On December 2, 2005, the trial court denied SNGs petition for writ of administrative mandamus based on the Commissions findings that there were inadequate groundwater resources for the project. Although the trial court did entertain argument on the legality of the Commissions ESHA designation, it did not rule on that issue.

On February 8, 2006, the trial court granted the Commissions motion for summary adjudication of SNGs claims for inverse condemnation, breach of contract, and estoppel. As to the claim for inverse condemnation, the trial court concluded that it was not yet ripe. Citing Toigo v. Town of Ross (1998) 70 Cal.App.4th 309 (Toigo), the trial court noted that SNGs 495-unit project was SNGs first application for development of its site. The trial court suggested that the Commission had not made a final decision as to the uses to which SNGs site could be put and that the proper course for SNG was to modify its project and reapply for a permit. (See Toigo,supra, at pp. 325-326 [no final decision for takings purposes unless governmental entity has rejected a formal development plan and denied property owners request for a variance or exception from controlling regulations].) Addressing SNGs estoppel claim, the trial court concluded that such a claim is indistinguishable from a vested rights claim and that no such claim would lie until SNG had obtained a valid building permit or its equivalent. Finally, the trial court granted summary adjudication to the Commission on SNGs claim for breach of contract. Noting that SNGs breach of contract claim was grounded on the terms of the MOU, the trial court held that the MOU could not be read as binding the Commission to approve SNGs project and that, in any event, the Commission could not be bound by an agreement to which it was not a party.[4]

On February 24, 2006, SNG moved to remand the matter to the Commission based on what it described as newly produced evidence. (See Code Civ. Proc.,  1094.5, subd. (e).) The alleged newly discovered evidence was a final judgment of the Monterey County Superior Court in California American Water v. City of Seaside (Super. Ct. Monterey County No. M66343) (Cal-Am). SNG claimed that the Cal-Am decision had established that SNG had more than sufficient water for the project. On April 17, 2006, the trial court denied SNGs motion to remand.

On March 1, 2006, SNG voluntarily dismissed its remaining causes of action. The trial court entered separate judgments for the Commission and for the Sierra Club. SNG then filed a timely appeal from those judgments.

Discussion

In this court, SNG attacks three of the trial courts orders: (1) the denial of SNGs petition for writ of administrative mandamus; (2) the denial of SNGs motion to remand; and (3) the grant of summary adjudication to the Commission. We will address SNGs contentions on each of these issues in turn.

I. SNG Was Entitled to Issuance of a Writ of Administrative Mandamus.

SNG contends that the trial court erred in denying its petition for writ of administrative mandamus. SNGs principal argument on this point is that the Coastal Act grants the Commission no statutory authority to declare SNGs site an ESHA during the administrative appeal from Sand Citys grant of a CDP.

In its responsive brief, the Commission does not address SNGs arguments regarding its statutory authority to declare SNGs site an ESHA. Although the Commission acknowledges that SNG has raised such a challenge,[5] the Commission declines to address the issue. Instead, the Commission argues only that a decision on this question would amount to an advisory opinion and that substantial evidence supports its finding that SNGs site is an ESHA.[6] Regrettably, we are therefore left to address SNGs arguments regarding the Commissions statutory authority without the benefit of the Commissions written views.[7]

A. Standard of Review

Relying on various provisions of the Coastal Act, SNG contends that the Commission has exceeded the jurisdiction granted to it by that statute. Where a party alleges that the Commission has acted beyond its statutory jurisdiction, it may challenge the agencys order or decision in an action for administrative mandamus under Code of Civil Procedure section 1094.5. (State of California v. Superior Court (1974) 12 Cal.3d 237, 248.) In such an action, the courts inquiry extends to determining whether the agency acted in excess of its jurisdiction or abused its discretion by not proceeding in the manner required by law. (Code Civ. Proc.,  1094.5, subd. (b); Schneider v. California Coastal Com. (2006) 140 Cal.App.4th 1339, 1343 (Schneider).)

When the determination of an administrative agencys jurisdiction involves a question of statutory interpretation, the issue of whether the agency proceeded in excess of its jurisdiction is a question of law. (Schneider, supra, 140 Cal.App.4th at p. 1344.) As the California Supreme Court has explained, [a] court does not . . . defer to an agencys view when deciding whether a regulation lies within the scope of the authority delegated by the Legislature. (Yamaha Corp. of America v. State Bd. of Equalization (1998) 19 Cal.4th 1, 11, fn. 4 (Yamaha).) We therefore review de novo whether the Coastal Act empowers the Commission to designate property as ESHA during the administrative appeal from a local governments grant of a CDP.

B. The Commissions Purported ESHA Designation Is Final and the Matter Is Ripe for Judicial Review.

Although the Commission does not directly confront SNGs challenge to its statutory authority, it does contend generally that a decision on this issue would be premature. The Commission appears to argue that its ESHA designation is not yet final because the Commission has not made the requisite definitive pronouncement regarding the potential use of SNGs property. The Commission thus urges that the trial court correctly refused to rule on what the Commission calls specified determinations regarding [SNGs] property. According to the Commission, those determinations are not final and hence not ripe for judicial review in an inverse condemnation claim.[8]The Commission relies on the doctrine of exhaustion of administrative remedies in claiming that the matter is not ripe for review. We disagree with the Commission, because we conclude that the agencys purported ESHA designation is both final and ripe for review.

1. Finality and Exhaustion of Administrative Remedies

Code of Civil Procedure section 1094.5, subdivision (a) permits courts to review only a final administrative order or decision made in an adjudicatory or quasi-judicial proceeding. (Western States Petroleum Assn. v. Superior Court (1995) 9 Cal.4th 559, 566-567; see 1 Cal. Administrative Mandamus (Cont. Ed. Bar 3d ed. 2007)  3.19, p. 60 [Under CCP 1094.5(a), a writ of administrative mandamus may be issued to review an administrative decision only if it is final.], italics added.) The need for a final decision is considered an aspect of the requirement that a party exhaust its administrative remedies prior to filing suit. (1 Cal. Administrative Mandamus, supra,  3.19, p. 60.) Here, the Commission essentially contends that a decision on SNGs challenge to the Commissions authority to designate ESHA would be premature because there has been no final decision on the kind of development that might be permitted on SNGs site.

The Commissions argument overlooks the fact that this appeal involves two separate administrative decisionsthe Commissions purported ESHA designation, on the one hand, and the permitting decision, on the other. The two decisions are of an entirely different character. Amending an LCP, by declaring certain property an ESHA, is a legislative act. (Yost v. Thomas (1984) 36 Cal.3d 561, 570-571 (Yost); San Mateo County Coastal Landowners Assn. v. County of San Mateo (1995) 38 Cal.App.4th 523, 537.) In contrast, where the Commission hears an administrative appeal from a local governments issuance of a CDP, the Commission is acting in a quasi-judicial capacity. (See, e.g., City of Coronado v. California Coastal Zone Conservation Com. (1977) 69 Cal.App.3d 570, 574; see also Pacifica Corp. v. City of Camarillo (1983) 149 Cal.App.3d 168, 177 [the courts have uniformly held that the coastal permit process is adjudicatory].) That the Commissions quasi-judicial permitting process may not have run its course says nothing about the finality of the Commissions purported ESHA designation.[9]It may be that there has been no final decision as to the uses to which SNGs property may be put (Toigo, supra, 70 Cal.App.4th at p. 325), but there has certainly been a final determination by the Commission that the property is an ESHA.

Even if the two administrative decisions were not entirely separate, SNG would be excused from exhausting its administrative remedies. In this case, SNG attacks the Commissions jurisdiction by contending that the Coastal Act grants the Commission no authority to designate property as ESHA in the context of an appeal to the Commission from a local governments grant of a CDP. In such cases, the courts have held that the administrative jurisdiction exception to the exhaustion doctrine applies[.] (Coachella Valley Mosquito & Vector Control Dist. v. California Public Employment Relations Bd. (2005) 35 Cal.4th 1072, 1081-1083 (Coachella Valley); Buckley v. California Coastal Com. (1998) 68 Cal.App.4th 178, 191 [The rule of exhaustion of administrative remedies does not apply where the subject matter lies outside the administrative agencys jurisdiction.].) Our high court explained in Coachella Valley that a court may entertain a claim that an agency lacks jurisdiction before the agency proceedings have run their course if three factors favor review. (Coachella Valley, supra, at p. 1082.) The court must consider: (1) the injury or burden that exhaustion will impose; (2) the strength of the legal argument that the agency lacks jurisdiction; and (3) the extent to which agency expertise may aid in resolving the jurisdictional issue. (Ibid.) Here, all three factors militate in favor of entertaining SNGs claim.

First, failure to review the issue of the Commissions statutory authority will impose significant burdens on SNG. If, as the Commission claims, SNGs site is an ESHA, the site is subject to the development constraints of section 30240, which permits only uses dependent on [habitat] resources[.] ( 30240, subd. (a).) And, if the ESHA designation is proper, those constraints are applicable now. A sites status as an ESHA places very significant limitations on permissible development. (See Bolsa Chica Land Trust v. Superior Court (1999) 71 Cal.App.4th 493, 507 (Bolsa Chica) [the terms of [ 30240] protect habitat values by placing strict limits on the uses which may occur in an ESHA]; Sierra Club v. California Coastal Com. (1993) 12 Cal.App.4th 602, 611, 617 (Sierra Club) [stating that residential development is prohibited in an ESHA].) Any future development proposal that SNG might submit will be limited to resource-dependent uses. Thus, whether through increased delay or project modification, the [ESHA designation] directly affect[s] the investment and project development choices of those whose activities are subject to the [designation]. (National Assn of Home v. U.S. Army Corps (D.C. Cir. 2005) 417 F.3d 1272, 1280 [Army Corps decision to issue nationwide permits held final where it would have effect of causing builders either to put their projects on hold and seek individual permits, or modify their projects to satisfy conditions of nationwide permits].) This factor thus weighs in favor of judicial intervention.

Second, as we explain in part I.C., post, SNG makes a strong and persuasive argument that the Commission has no statutory authority to make the ESHA designation in the context of a permit appeal. In fact, as we will show, not only does the Commission lack statutory authority for its action, but in making its ESHA designation, it also intruded upon powers that the Coastal Act expressly allocates to local governments. This factor therefore also weighs in favor of excusing exhaustion.

Finally, this issue is not one that would benefit from application of administrative expertise. Here, the issues are purely legal and of a kind within the expertise of [the] courts[.] (Coachella Valley, supra, 35 Cal.4th at p. 1083.) As we noted in discussing our standard of review, the issue of whether the agency proceeded in excess of its jurisdiction is a question of law (Schneider, supra, 140 Cal.App.4th at p. 1344), and is one on which we do not defer to the Commissions views. (Yamaha, supra, 19 Cal.4th at p. 11, fn. 4; see also Bolsa Chica, supra, 71 Cal.App.4th at p. 507 [court owed no deference to statutory interpretation adopted by Commission in approving an LCP].) This factor also favors review.

Accordingly, because all three factors favor judicial intervention at this time, any failure by SNG to exhaust administrative remedies is excused. (Coachella Valley, supra, 35 Cal.4th at p. 1083.)

2. Ripeness

We also have no difficulty concluding that this issue is ripe for review. To determine whether an issue is ripe for review, we evaluate two questions: the fitness of the issue for judicial decision and the hardship that may result from withholding court consideration. (Pacific Legal Foundation v. California Coastal Com. (1982) 33 Cal.3d 158, 171.) We are persuaded that the issue of the Commissions statutory authority is fit for judicial decision. As we indicated above, whether the Coastal Act grants the Commission the power to declare SNGs site an ESHA during an administrative appeal from the grant of a CDP is a purely legal issue. Resolution of this issue requires an interpretation of the [Coastal] Act, upon which the facts in this case will have little bearing. (Hayward Area Planning Assn. v. Alameda County Transportation Authority (1999) 72 Cal.App.4th 95, 103; see also Alameda County Land Use Assn. v. City of Hayward (1995) 38 Cal.App.4th 1716, 1723 [action for declaratory relief ripe when the parties dispute whether a public entity has engaged in conduct or established policies in violation of applicable law].) The legality vel non of the [Commissions action] will not change from case to case or become clearer in a concrete setting. (National Assn Home Buil. v. U.S. Army Corps (D.C. Cir. 2006) 440 F.3d 459, 464.) Such a purely legal challenge to the Commissions authority is therefore fit for decision now. (Ibid. [purely legal challenge to agency action is presumptively reviewable].) In addition, as we explained in our discussion of the administrative jurisdiction exception to the exhaustion doctrine, withholding decision would impose a significant hardship on SNG. (See id. at p. 465 [hardship shown where agency rule would confront builders with choice of applying for permit of activities builders claimed were beyond agencys jurisdiction or face penalties for failing to do so].) The question is therefore ripe for judicial review.

C. The Commission Acted in Excess of its Jurisdiction.

SNG asserts that the Commission has no authority under the Coastal Act to designate its property as ESHA in the course of a permit appeal. SNG contends that the ESHA designation effected an amendment of the Sand City LCP and that the Coastal Act assigns the task of drafting and amending the content of an LCP exclusively to local government. SNGs position is that the Coastal Act grants to local governments the power to draft their own LCPs and to determine the content thereof. SNG contends that the Commissions role is limited to determining whether a local governments LCP complies with the provisions of the Coastal Act. Our examination of the relevant provisions of the Coastal Act compels us to conclude that SNG is correct.

1. General Principles

The Commission, like all administrative agencies, has no inherent powers; it possesses only those powers that have been granted to it by the Constitution or by statute. (See Carmel Valley Fire Protection Dist. v. State of California (2001) 25 Cal.4th 287, 299-300; State Bd. of Education v. Honig (1993) 13 Cal.App.4th 720, 750; 3 Koch, Administrative Law & Practice (2d ed. 1997)  12.13[1], pp. 170-171 [Administrative agencies derive their power from other sources . . . and hence agencies have only such authority as is delegated by the legislature].) [A]n agency literally has no power to act . . . unless and until [the Legislature] confers power upon it. (Louisiana Public Service Commn v. FCC (1986) 476 U.S. 355, 374, italics added (LPSC).) That an agency has been granted some authority to act within a given area does not mean that it enjoys plenary authority to act in that area. (Railway Labor Exec. Assn v. National Mediation Bd. (D.C. Cir. 1994) 29 F.3d 655, 670 (en banc).) As a consequence, if the Commission takes action that is inconsistent with, or that simply is not authorized by, the Coastal Act, then its action is void. (See Schneider, supra, 140 Cal.App.4th at p. 1348; accord, BMW of North America, Inc. v. New Motor Vehicle Bd. (1984) 162 Cal.App.3d 980, 994 [It is fundamental that an administrative agency has only such power as has been conferred upon it by the constitution or by statute and an act in excess of the power conferred upon the agency is void.].)

Our task is thus to determine whether the Commissions ESHA designation exceeded the Commissions statutory grant of authority under the Coastal Act. (See Benton v. Board of Supervisors (1991) 226 Cal.App.3d 1467, 1479.) To do so, we look to the relevant provisions of that statute.

2. The Coastal Act

The Coastal Act sets out a process by which LCPs are prepared, adopted, certified, and periodically reviewed. It also permits their amendment. As we shall show, the Coastal Act expressly vests in local governments, rather than the Commission, the responsibility for determining the content of their LCPs. Thus, we conclude that the Commission has no statutory authority to amend an LCP during the CDP appeal process.

a. Preparation and Content of the LCP

The Coastal Act requires that each local government lying, in whole or in part, within the coastal zone prepare an LCP for that portion of the coastal zone under the local governments jurisdiction, unless the local government asks the Commission to prepare the LCP. ( 30500, subd. (a).) An LCP consists of two principal components: an LUP, and implementing actions, such as zoning ordinances and maps. (See  30108.6 [LCP consists of a local governments (a) land use plans, (b) zoning ordinances, (c) zoning district maps, and (d) within sensitive coastal resources areas, other implementing actions]; see also  30108.4 [defining implementing actions],  30108.5 [defining land use plan].) Under the statute, [t]he precise content of each local coastal program shall be determined by the local government . . . in full consultation with the commission and with full public participation. ( 30500, subd. (c), italics added.)

Story continues as Part II

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* Pursuant to California Rules of Court, rules 8.1105(b) and 8.1110, this opinion is certified for publication with the exception of parts II and III.

[1] All further undesignated statutory references are to the Public Resources Code.

[2]Under the Coastal Act, local governments lying within the coastal zone must prepare an LCP, which is then submitted to the Commission for certification. ( 30500, subd. (a).) An LCP is composed of two parts: a land use plan (LUP), which functions as the general plan for the property in the coastal zone; and the local implementation plan, which includes the zoning, zoning maps, and other implementing actions for the coastal zone. ( 30108.5, 30108.6.) The Commission must certify an LUP if it finds that a land use plan meets the requirements of, and is in conformity with, the policies of Chapter 3 (commencing with Section 30200). . . . ( 30512, subd. (c).)

[3]Under the Commissions rules, [u]nless otherwise specified at the time of the vote, an action taken consistent with the staff recommendation shall be deemed to have been taken on the basis of, and to have adopted, the reasons, findings and conclusions set forth in the staff report as modified by the staff at the hearing. (Cal. Code Regs., tit. 14,  13096(b).)

[4]SNG later sought reconsideration of the order granting summary adjudication on the basis of the decision in Dunn v. County of Santa Barbara (2006) 135 Ca1.App.4th 1281. After granting reconsideration, the trial court affirmed its grant of granted summary adjudication to the Commission.

[5]The Commissions brief is unequivocal on this point. In a footnote, the Commission states: Throughout its brief, SNG asserts that the Commission improperly found that [SNGs] site was environmentally sensitive habitat[.] (Italics added.)

[6]The Commission adopted the same approach in the court below. In its brief opposing SNGs petition for writ of mandate, the Commission did not respond to SNGs contention that it lacked authority under the Coastal Act to make an ESHA designation.

[7] On January 11, 2008, this court issued an order requesting that the parties address certain questions at oral argument. Among other questions, we requested that the parties identify any statute granting the Commission the authority to designate property as an ESHA in an appeal from a local governments grant of a CDP. We also asked whether SNGs property had ever been designated an ESHA in either Sand Citys certified LCP or in any certified amendment thereto.

[8]SNG contends that it is entitled to a judicial determination of the validity of the Commissions ESHA designation under Hensler v. City of Glendale (1994) 8 Cal.4th 1, arguing that the Hensler decision makes such a determination a jurisdictional prerequisite to the trial courts hearing of the Commissions motion for summary adjudication. We need not test the soundness of this theory, because review is proper under Code of Civil Procedure section 1094.5.

[9] As a consequence, the Commissions assertion that the record supports its finding that SNGs site is an ESHA puts the cart before the horse, for the argument necessarily assumes that the Commission possessed the statutory authority to make the ESHA designation in the first place. A decision on the Commissions statutory authority necessarily precedes the issue of whether the [Commissions] findings . . . would be supported by substantial evidence. (Sierra Club v. Superior Court (1985) 168 Cal.App.3d 1138, 1145-1146 [challenge to the correctness of legal standard applied by the Commission is a legal issue as to whether Commission proceeded in the manner required by law; decision on that legal issue must precede substantial evidence review].)

The finality of the ESHA designation is not affected by the possibility that the Commission might, at some future date, revise its determination. If the possibility . . . of future revision in fact could make agency action non-final as a matter of law, then it would be hard to imagine when any agency rule . . . would ever be final as a matter of law. (General Elec. Co. v. E.P.A. (D.C. Cir. 2002) 290 F.3d 377, 380.)