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In Linovitz Capo Shores LLC v. California Coastal Commission (2021) 65 Cal. App. 5th 1106, the Fourth District Court of Appeal found that the California Coastal Commission’s (Commission) failure to act on a series of mobilehome renovation permits constituted an approval under the Permit Streamlining Act, despite the fact the Commission’s notice did not specify that the permits may be deemed approved if the agency failed to timely act on them. In reaching this conclusion, the Court disproved of the First District’s opinion, Mahon v. County of San Mateo (2006) 139 Cal.App.4th 812 (Mahon), resulting in a circuit split. The Court held that the required notice is what is required by statutory, constitutional, and decisional law under the circumstances.

Between 2011 and 2013, beachfront mobilehome owners in San Clemente (Appellants) secured permits from the California Department of Housing and Community Development (HCD) to remodel their homes to, among other structural changes, add second stories. Appellants also applied for coastal development permits from the Coastal Commission to address renovations on the grounds surrounding the mobilehomes. Following completion of the structural renovations in 2014, the Coastal Commission issued notices to Appellants that the structural renovations were illegal without a coastal development permit. Commission staff indicated that retroactive authorizations could be sought but staff would not support any requests to keep second story additions. Appellants maintained that the Commission did not possess jurisdiction over their structural renovations, but nonetheless applied for retroactive permits while reserving the right to later challenge the Commission’s jurisdiction. In July 2016, the Commission held a public hearing concerning all the applications, and considered how or whether to impose height restrictions on Appellants’ homes, which would require demolition of the renovations. At the hearing, a commissioner suggested continuing matters to a future date, but the Commission’s counsel noted that an impending deadline under the Permit Streamlining Act prohibited continuation. Appellants indicated a desire to withdraw the applications and resubmit them right away if the Commission agreed to waive the standard six-month waiting period for resubmittal and all additional fees. The Commission unanimously voted to allow immediate resubmission of the applications but rejected the request to waive or reduce the required fees for resubmittal. No further action was taken by the Commission or Appellants following close of the hearing.

Thereafter, Appellants filed a petition for writ of mandate. The trial court denied the petition, agreeing with the Commission that (1) the Commission had jurisdiction to require a coastal development permit for their project, and (2) the applications were not deemed approved under the Permit Streamlining Act because the Commission’s notice was deficient under Mahon. Mahon holds that “public notice required by law” under the Permit Streamlining Act is only satisfied when the notice contains language stating that deemed approval will occur if the agency does not act within 60 days. Appellants appealed on both grounds.

HCD and the Coastal Commission Possess Concurrent Jurisdiction over Mobliehome Parks in Coastal Zones

The Court of Appeal began by considering the Commission’s authority, if any, over mobilehome construction and replacement. Appellants argued the Commission lacked authority because HCD has exclusive jurisdiction over mobilehome construction and design. The Court reviewed the intent and purposes of the California Mobilehome Parks Act (MPA) and Coastal Act, and determined the two statutory schemes could be harmonized. The Court found the statutory schemes served distinct purposes and concurrent operation would not result in a conflict or override MPA policy objectives. While the MPA expressly supersedes local ordinances, it does not displace the Coastal Act, which specifically states that a coastal development permit is required for any development in the coastal zone in addition to any other permit required by state, regional, or local agencies. Therefore, the Court ruled HCD and the Commission possess concurrent jurisdiction over mobilehome construction and replacement in the coastal zone. Accordingly, the Commission did not exceed its jurisdiction by requiring appellants to obtain a coastal development permit for their structural alterations.

Agency Notice is Adequate to Result in a Deemed Approval, Even if the Notice Does not State that a Failure to Act within 60 Days Shall Result in Approval

The Court then considered whether the permits were deemed approved under the Permit Streamlining Act due to the Commission’s failure to act. The Commission argued that approval did not occur because (1) Appellants withdrew their applications, and (2) the Commission never provided the requisite public notice for the applications to be deemed approved.

As to the first argument, the Court upheld the trial court’s factual finding that the permits were not withdrawn. As noted above, Appellants had orally indicated their conditional desire to withdraw the applications. However, the Commission did not agree to both conditions, and Appellants never formally withdrew their applications.

As to the second point, the Court analyzed whether the Commission’s notice was required to specify that the permits may be deemed approved if the agency failed to timely act on them. Government Code section 65956(b) provides that when a lead or responsible agency fails to timely approve or to disapprove a development project it may be deemed approved by law. However, the failure to act shall be deemed an approval “only if the public notice required by law has occurred.” Section 65956(b) further provides that if an applicant chooses to provide public notice under the statute, the notice must state that the project shall be deemed approved if the agency does not act upon it within 60 days.

The issue centered on whether the “public notice required by law” to allow a permit to be deemed approved was required to contain a statement specifying that the project shall be deemed approved if the Commission did not act within 60 days – or whether that requirement only applied if the applicant provided the notice. As noted, the First District’s Mahon opinion rules that the “public notice required by law” must include the statement, even if issued by the agency, or the project could not be deemed approved. The Commission argued that the holding in Mahon controlled, and that the requisite notice requirement was not satisfied because the July 2016 hearing notice was not accompanied by language stating that approval would occur if the Commission failed to act within 60 days. The Court disagreed with and disapproved of Mahon’s holding. In doing so, the Court looked to the Ninth Circuit’s interpretation in American Tower Corporation v. City of San Diego (2014) 763 F.3d 1035. There, the Ninth Circuit observed that section 65956(b)’s requirement that the notice disclose that the project would be deemed approved was contained in a sentence describing the applicant’s notice burden when electing to undertake the public notice requirement. That court found no legislative evidence indicating that the same requirement applied when an agency provides notice. Here, the Court agreed and found that the plain language of section 65956(b) did not require the public notice, when given by the agency, to include the disclaimer that the project would be deemed approved if the agency did not act within 60 days.

The Court then returned to the plain language of section 65956(b) – which requires providing public notice as “required by law” – and explained that this means that the public notice provided by an agency must meet “whatever public notice is required by statutory, constitutional and decisional law for the circumstance.” First, the Court held that the Commission’s public hearing notice satisfied the applicable statutory requirements of the Coastal Act. Then, the Court held that the notice was adequate in light of procedural due process, which requires a finding of reasonable notice and opportunity to be heard prior to governmental deprivation of a significant property interest. The Court noted that while providing additional information in the hearing notice (such as the potential outcomes of the public hearing) might be informative, it was unnecessary in order to safeguard neighboring property interests, assuming arguendo that those interests triggered due process requirements.

Additionally, the Court noted that the Commission had made the public aware of the Permit Streamlining Act’s effect by releasing a staff report three weeks before the public hearing which addressed the approaching deadline. The Commission argued that due process required more under the circumstances because, based on what occurred at the hearing, no member of the public would have reason to understand that the permits were deemed approved as a matter of law. Again, the Court disagreed. The Court reiterated that Appellants did not withdraw their application at the hearing and that the Commission publicly communicated that the Permit Streamlining Act deadline was approaching. The Court reasoned that notice and an opportunity to be heard was provided prior to the deemed approvals, and no separate due process right to judicial review was required. Accordingly, the Court reversed the judgment in full and remanded to the lower court with instruction to grant Appellant’s petition for writ of mandate.

Key Point:

The Coastal Commission and Department of Housing and Community Development possess concurrent jurisdiction over mobilehome construction and design within coastal zones.
There is now a circuit split as to whether the “public notice required by law” resulting in a deemed approval is contingent on whether an agency’s public notice explicitly states that the project shall be deemed approved if the agency fails to act within 60 days.