Federal judge rules that San Simeon deprived property owner

December 21, 2021

By KAREN VELIE

A federal judge ruled last week that San Simeon Community Services District’s refusal to provide a water hookup deprived a property owner the right to the free use of his property. The ruling opens the door for those with vacant lots in San Simeon to sue the district for damages.

Amid concerns over water quality and quantity, the district enacted a water moratorium 35 years ago. In 2016, the district installed a water purification facility but did not remove or modify the moratorium.

For 17 years, Robert Hather worked to build an affordable housing development on a 1.1-acre parcel he owns in San Simeon, but was denied a water hookup. Initially, Hather purchased the property as part of his retirement plan, but instead of making money, has lost money on upkeep and taxes.

Then in Nov. 2020, Hather filed for a hardship exemption, which is allowed under the district’s moratorium ordinance. Rather than vote on the hardship exemption request, the district board voted to table the request.

Hather’s attorney Jeff Stulberg informed the district of plans to file a lawsuit based on the district’s failure to abide by due process laws and failure to compensate for a taking, if the district continued to deny Hather access to water.

After reviewing Stulberg’s argument, district legal council Jeff Minnery determined the district had the right to deny Hather a water hookup, which prompted the lawsuit.

“Based on the representations of the district’s counsel, it appears that the district does not believe it is under any legal obligation to take action on the hardship application within any reasonable amount of time,” according to the lawsuit. “The district’s refusal to act on plaintiff’s hardship application is unreasonable and without any justification.”

When an ordinance removes all beneficial uses and productivity of a property, government has “a duty to compensate the owner for the period during which the regulation is in force,” according to the lawsuit.

In response to an attempt by the district to have the case dismissed, United States District Judge Virginia Phillips ruled that Stulberg’s complaint “alleges sufficient facts that the district acted in an ‘arbitrary, capricious, irrational and abusive’ manner,” and that a taking had occurred.

Phillips denied Stulberg’s request to have the federal court rule on Hather’s request for a water hookup, instead granting Stulberg the right to file a writ of mandate in state court.