A San Luis Obispo County businessman who did not attend a California Coastal Commission hearing regarding his proposed project has lost a lawsuit contending that he was not provided adequate notice of the hearing.

John Benson, owner of the Baywood Inn in the unincorporated town of Los Osos, argued that his due process rights were violated because the written notice he received from the commission was inadequate and because commission staff members told him that he did not need to attend the hearing. However, the Second District Court of Appeal concluded, “The written notice was adequate and the developer could not reasonably rely on staff recommendations and comments.”

In 2001, Benson applied to the county for permission to expand his hotel and restaurant, which is located across the street from Morro Bay. He proposed adding 18 hotel rooms in a first phase and 22 rooms in a second phase. The San Luis Obispo County Planning Commission approved the project and, on appeal, the Board of Supervisors upheld the decision.

On March 28, 2003, Concerned Citizens of Los Osos appealed to the Coastal Commission. The group argued that the project was inconsistent with the county’s local coastal program policies regarding visual impacts, the coastal watershed and public service capacity. Under Public Resources Code § 30621(a) (a section of the Coastal Act), the Commission has 49 days to conduct a hearing on an appeal. The Commission scheduled the appeal of the Baywood Inn project for a meeting May 8, 2003, in Monterey.

For years, the Commission’s practice was to open a hearing on an appeal within 49 days, and then continue the hearing to a later date to provide more time for review. However, on the morning of May 8, 2003, the Fourth District Court of Appeal struck down this practice. In Encinitas Country Day School v. California Coastal Commission, 108 Cal.App.4th 575 (see CP&DR Legal Digest, July 2003), the court ruled that the Commission, at a minimum, must determine within 49 days whether a “substantial issue” exists.

Upon receiving that opinion, staff members changed their recommendation on the Baywood Inn project from “open and continue” to a finding that the appeal raised substantial issues regarding wastewater treatment, public access and water quality. The Commission agreed and set a hearing for seven months later. Neither Benson nor Concerned Citizens was represented at the May 8 meeting.

At the December 2003 hearing, the Commission approved the first phase of the project but withheld approval of the second phase until the project could connect with a long-proposed and extremely controversial sewer system (see CP&DR In Brief, November 2005).

Benson sued the Commission, arguing that it violated his right to due process and unconstitutionally took his property. San Luis Obispo County Superior Court Judge Roger Picquet ruled for the Commission, and a three-judge panel of the Second District, Division Six, upheld the ruling.

The hotel owner argued that the Commission’s notice of the May 8 meeting was inadequate because it did not apprise him of the issues the Commission would consider that day. But the Second District pointed out that the Commission sent Benson a copy of the Concerned Citizens appeal.

“The appeal stated the issues on which it was based,” Presiding Justice Arthur Gilbert wrote for the court. “Moreover, there was no need for the notice to specify what issues would be considered at the hearing. Benson had participated in the proceedings at the county level. He was well aware of what issues were in contention.”

Benson argued that the court should also consider the original staff report — which recommended opening and continuing the appeal — along with telephone conversations he had with Commission staff members. He contended that staff members told him he need not attend the May 8 hearing. Staff members said that they told Benson he “probably” did not need to attend.

None of it mattered to the Second District. The staff report contained only recommendations, and “nothing guaranteed the Commission would not proceed,” Gilbert wrote. “As the trial court pointed out, any one commissioner could have convinced the Commission to proceed.”

As for the phone conversions, the court found the details unimportant because Benson ought not have relied on the conversions. “The Legislature has reposed in the Commission, not its staff, the power to decide whether a substantial issue exists to support an appeal,” the court ruled. “Under these circumstances, he [Benson] could not reasonably rely on staff comments predicting what action the Commission would take.”

Additionally, the court pointed out, Benson attended the December 2003 hearing at which the Commission decided the appeal, and he did not challenge in court the conditions imposed on the project.

The Case:
Benson v. California Coastal Commission, No. B186125, 06 C.D.O.S. 3812, 2006 DJDAR 5614. Filed May 9, 2006.

The Lawyers:
For Benson, J. David Breemer, Pacific Legal Foundation, (916) 419-7111.
For the Commission: Terry T. Fujimoto, attorney general’s office, (213) 897-2000.