Eminent Domain Report

The Martins Beach access dispute in San Mateo County continues to make headlines.  As a quick refresher, billionaire venture capitalist Vinod Khosla purchased 90 acres of beachfront property south of Half Moon Bay, and subsequently proceeded to lock the gated entry to Martins Beach, effectively preventing public access to the popular beach.  We've been covering the dispute for quite some time, including the recent introduction of legislation to potentially fund the State Lands Commission's use of eminent domain to acquire an easement for access to the popular beach.

While the potential eminent domain process continues to play out, and a lawsuit makes its way through court on whether the public has an easement by dedication to access Martins Beach, a separate lawsuit filed by the Surfrider Foundation was recently heard by the California Court of Appeal.  In Surfrider Foundation v. Martins Beach 1, LLC (A144268, Aug. 9, 2017), the Court recently held that the owner's blocking access to Martins Beach was a "development" activity within the meaning of the California Coastal Act, which triggered the need for a Coastal Development Permit (CDP).  Because the owner had failed to secure a CDP, an injunction was issued requiring the owner to restore public access to the beach.

• Requiring a Coastal Development Permit Does Not Constitute an Unlawful Taking of Property

On appeal, the property owner countered that requiring the owner to obtain a CDP would constitute an unlawful taking.  The Court of Appeal held that such a claim was not ripe, as the owner had not yet sought a CDP.  Because the owner had not yet applied for a CDP, the Court had no information on whether the Coastal Commission would issue such a permit, or what restrictions or impacts its decision may have on the property's use.  Simply requiring a person to obtain a permit before engaging in a certain use does not result in the taking of property.

• The Court's Temporary Injunction Does Not Result in a "Per Se" Taking of Property

The property owner also claimed that the trial court's issuance of an injunction preventing the owner from blocking public access to Martins Beach constituted a "per se" physical taking of its property.  The Court explained that the United States Supreme Court is divided on whether a judicial action may constitute a taking.  In this particular case, the Court explained that "the trial court's injunction intrudes on [the owner's] established property right to exclude others by allowing the public to access Martins Beach pending a determination on [the owner's] application for a CDP."  However, the Court went on to hold that the temporary right of beach access does not constitute a "per se" taking, and because the owner did not allege a taking under the Penn Central multi-factor test, the Court did not engage in such an analysis.

Specifically, the Court explained that while a permanent physical invasion -- and the loss of the ability to exclude others -- constitutes a "per se" physical taking, here the injunction is temporary in nature and only lasts until there is a decision on the CDP.  Because the injunction is only temporary, it does not constitute a "per se" taking.  The Court relied on prior case law establishing that temporary limitations are subject to a more complex balancing process to determine whether they are a taking since they do not absolutely dispossess the owner of the right to use, and exclude others, from the property.

The Court even attempted to harmonize its ruling with the California Supreme Court's recent decision in Property Reserve, where the right of entry statutes to conduct environmental studies were analyzed from a takings context, and in which the Court held that not all temporary physical invasions are takings that require prior compensation under the California Constitution.  While the Court expressly recognized that temporary physical invasions may constitute a compensable taking, they are not automatically "per se" takings.  In other words, in drawing a very fine line, the Court explained that while temporary physical intrusions can be compensable takings, not all temporary physical invasions are "per se" takings.  Because the owner did not allege a taking under the Penn Central multi-factor test, and because the temporary injunction did not constitute a "per se" physical taking, it could not be reversed by the Court of Appeal.

• Conclusion

Where does the Surfrider decision leave things?  Public access to Martins Beach will be temporarily restored pursuant to the Court's injunction, at least until the owner pursues a CDP to prevent or alter public access.  In the meantime, the other pending litigation will continue through the court system for a determination on whether the public has an easement by dedication to access Martins Beach over Khosla's property.  And, the government always wields the power to condemn the public access easement, if necessary.  The temporary win goes to the public, and we'll continue to see how things shake out.