Simply stated: “[a] collateral attack is not a substitute for an appeal” reasoned the Second Appellate District Court in Bowman v. California Coastal Commission (2nd Dist., Div. 6, 03/18/2014, B243015) ___Cal.App.2nd___, 2014).  This is a case where the Coastal Commission and environmental groups found common ground challenging a coastal development permit issued by the County of San Luis Obispo.  The case reiterates the importance of exhausting remedies during – not after – permit approval proceedings.

The facts are straightforward.  Walton Emmick owned approximately 400 acres in the County with nearly one mile of shoreline along noncontiguous parcels.  In 2002, Emmick applied for a coastal development permit (CDP) from the County to rehabilitate a residence on the land, install a septic system, and connect to an existing water well.  In 2003, Emmick died, and the SDS Family Trust succeeded to the property.  SDS started construction without the CDP.  In 2004, the County issued the CDP and conditioned it upon SDS’s offer to dedicate a lateral easement for public access along the shorefront portion of the property.  SDS did not appeal.  Instead, nine months later, SDS applied for a second CDP requesting, among other things, that the County remove the lateral easement condition.  The County approved the second CDP and removed the easement requirement.  The Sierra Club, Surfrider Foundation, and two coastal commissioners appealed the County decision to the Coastal Commission, which upheld the validity of the easement from the first CDP.  SDS sued and lost at the trial court level.

The appellate court quickly established the ground rules stating “[w]here an administrative tribunal has rendered a quasi-judicial decision that could be challenged by administrative mandamus . . . a party’s failure to pursue that remedy will give rise to collateral estoppel.”  In other words, an applicant must exhaust all of its remedies during the administrative process or else it will be barred from later challenges.  Here, SDS’s fate was set when it failed to appeal the easement condition in the first CDP.  Nonetheless, SDS argued that (a) the first CDP had expired; (b) they had not accepted its conditions; and (c) they could “walk away” from the first CDP because they were dissatisfied applicants.  SDS also argued that the access easement condition constituted an unlawful exaction of its property under Nollan v. California Coastal Commission (1987) 483 U.S. 825 and Dolan v. City of Tigard (1994) 512 U.S. 374, because the condition was not roughly proportional to the burden the project placed on the public interest.  All of these arguments fell flat.  The court returned to a relatively well‑ established legal principle and held that a party is bound by the conditions of a permit that has been the subject of a quasi‑judicial proceeding, even if the decision is erroneous, when that party fails to challenge the permit and accepts its benefits—in this case partial completion of construction under the first CDP.

The message is clear: if you are dissatisfied with conditions imposed by an agency, then appeal the matter to the final decision‑making body of that agency.  It appears that SDS tried a post‑approval “work around” to eliminate the lateral public access condition it did not want, possibly in order to more easily attack the condition underNollan and Dolan.  That is a risky proposition and ultimately failed.  Understandably, project applicants are hesitant to appeal their own cases.  However, if an agency burdens the project with conditions that are unacceptable to the applicant, then it is critical to challenge those conditions during the administrative process.  Failing to do so removes the applicant’s standing to fight another day.  The Bowman case highlights the importance of recognizing when and how to attack unfavorable permit conditions.