San Luis Obispo judge rules Coastal Commission can’t rewrite history

February 13, 2025

By ANNIE BRAFF

A San Luis Obispo district court judge has moved the markers in a six-year-old fight between the California Coastal Commission and two families who have been trying to build retirement homes in Cambria.

The Commission denied building permits to Ralph Bookout, 85, of Visalia and Alireza Hadian, 65, of Granada Hills in 2021. They sued and, in December, San Luis Obispo District Court Judge Michael Kelly ruled that the commission was “simply wrong.” The commission had already decided the opposite some 26 years earlier.

Bookout and Hadian bought lots in Tract 1804 in Cambria in 2019 from the Leimert Company.

Cambria’s water problems have kept some would-be home builders out because the city does not have enough water. People who want to build are subject to stringent water requirements that limits new development to available water supplies, absent an assurance that additional water withdrawal will not adversely impact riparian/wetland habitats.

But Bookout and Hadian were exempt from these requirements, Bookout said. The reason the men bought the property was because they knew they would get a building permit.

This is because, wrote Judge Kelly, “the Commission accepted CCSD’s classification of ‘Existing Commitments’ as part of ‘available water supplies’ and exempted them from the restrictions imposed by the modifications to the NCAP for new development.”

Bookout and Hadian were buying the land with the water rights that had been established years earlier as “existing commitments.”

“We bought these lots from the Leimert Company because the water rights were secured through binding contracts dating back to 1969,” Hadian said. “I heard water was an issue, so I bought lots that already had water installed.”

In 1969, the Walter Leimert Company, a California developer, paid $25,000—nearly $188,000 in today’s dollars—to secure water rights for Tract 1804 in Cambria.

The Leimert Company submitted plans in 1995 to subdivide the tract into 18 lots. The Coastal Commission initially balked. But then commission staff made a discovery that would change everything: buried in the property’s history lay a crucial detail—the tract’s water and sewer lines existed before the Coastal Act itself.

California Coastal Commission Assistant Director David Loomis issued a ruling that was enforceable with the full force of law: “The CCSD’s water and sewer lines and boundary pre-date the LCP,” he wrote. These parcels couldn’t be considered “new development” under regulations that didn’t exist when their infrastructure was built.

The Leimert Company filed suit three years later in 1998 when the Cambria Community Services District attempted to place the lots on a water waiting list. The company was in a strong position because the California Coastal Commission had already determined that the company’s purchase seven years before the Coastal Act was passed protected it from that sort of regulation.

The commission and Leimert Company settled the suit. As part of the settlement, the Leimert Company would dedicate 342 acres—90% of the land—as permanent open space to protect Monterey pines, while requiring water meters be installed on all eighteen lots by 2001.

Between 2001 and 2019, ten homes rose on the tract without controversy. Bookout and Hadian had meticulously followed every rule, secured proper water rights, and obtained county approval—just as their neighbors had before them.

“We researched everything meticulously before buying. The lots were advertised and sold with existing water rights. The deal was they had existing meters and we could just hook up and build. Research at the time proved this to be true.” Hadian said.

In 2019, Hadian and Bookout applied for coastal development permits to build their homes. San Luis Obispo County approved the permits, as expected.

But then, the California Coastal Commission overturned the local approvals. It had a powerful tool – an internal appeals process allowing commissioners to challenge and potentially overturn locally approved permits.

It is a procedure wielded with surgical precision—and controversial intent. According to the Pacific Legal Foundation, the commission finds “substantial issues” to trigger a de novo hearing in 97% of its own appeals, compared to 40 percent of appeals filed by outside parties.

“It is a system where the commissioners are able to make the appeal and then judge its merit,” said Jeff McCoy, Senior Attorney at Pacific Legal Foundation.

In this case, the commission even introduced concerns about Monterey pines during the appeals process—an issue that hadn’t been mentioned in any of the appeals filed with the commission, and a move that seemed particularly striking since the original settlement had preserved 90% of Tract 1804 specifically to protect these pines.  (An upcoming article will investigate the full mechanics of this unprecedented appeals process that challenges local planning and individual property rights.)

When Hadian approached the commission about honoring the existing contract, “they said they had no recollection of these contracts. I told them ‘let me refresh your memory’ and provided them with a copy,”he said. Still, they reversed the permits.

“I came to America as a teenager for its democracy, because everyone’s constitutional rights are protected under the rule of law, Hadian said who immigrated from the Middle East and built a successful engineering career before his retirement dreams collided with California’s complex coastal regulations. “To see this happening here … people outside this country don’t think it is happening in America. When you expect injustice, you are fine with it. But when you come here and everyone is supposed to be equal … and you see things like this … it just tears you apart because you don’t expect it to happen in this country.”

For most families, when the California Coastal Commission intervenes, that’s the end of the road.

“Experienced Coastal Commission attorneys typically charge $500-600 per hour. The costs in this case have exceeded hundreds of thousands of dollars,” said Jeff McCoy, Senior Attorney at Pacific Legal Foundation.

When Bookout and Hadian contacted Pacific Legal Foundation, they found the government was overreaching.

“They got involved after we showed them the contract,” Hadian said. “They said we had a legal contract that everyone had signed off on and it was enforceable in the courts. And they took our case pro bono.” 

Judge Kelly’s ruling is just a step toward the final resolution of the fight to build Bookout and Hadian’s homes.

While Judge Kelly firmly rejected the Commission’s decision, he must still decide whether to send the matter back to the Commission for another hearing or direct them to approve the permits outright. And, Judge Kelly split up the case, dealing with the permit denials separately from constitutional claims about their property rights.

On Feb. 24, at 9 a.m., a case management hearing in Paso Robles will be the first step in the next phase: whether the commission’s actions constituted an unconstitutional taking of private property rights—a violation of the Fifth Amendment that occurs when government action effectively seizes private property, either directly or by preventing owners from using their land as legally entitled.

Even if Bookout and Hadian win, building their homes will be difficult, Bookout said.

“The market we’re facing now is brutal,” Bookout said. “Lumber that once cost $1 per square foot now runs $3, and we’re competing with Los Angeles rebuilding efforts after the fires.”

Still, Bookout takes a nuanced view of the commission’s role.

“In defense of the Coastal Commission, they’ve done a lot of good for this whole area,” Bookout said. “If not for them, between Morro Bay and Big Sur, there would be as many motels as there are elephant seals in San Simeon. It would look like Malibu, and I applaud them for that. But in spite of all the good they’ve done, they overreach at times. They rule however they want and say if you don’t like it, take us to court.”

The California Coastal Commission and their attorneys did not respond to requests for comment.

CalCoastNews will continue to cover this case and explore broader questions about the Commission’s appeals process and property rights in an upcoming series.

Timeline

Foundational period: 1969-1988

1969: Initial Water Rights Secured

·        Walter H. Leimert Company enters agreement with Cambria County Water District

·        Agreement includes $25,000 payment from Leimert to water district (approximately $188,000 in 2024 dollars)

1972: Coastal regulation framework established

·        California Coastal Commission created

·        California Coastal Act requires local governments to develop local coastal programs (LCPs) for certification by the California Coastal Commission

1985: Infrastructure commitment

·        Leimert and Cambria Community Services District (CCSD), successor to Cambria County Water District, enter new agreement

·        Agreement terms:

1. CCSD to issue “will serve” letter for Tract 1804

2. Leimert to build 120,000-gallon water storage tank and deed tank site to CCSD

3. CCSD agrees to pay half the costs up to $45,000

1988: Regulatory framework set

·        California Coastal Commission certifies San Luis Obispo County’s local coastal program

Interpretative period: 1992-1997

1992: Initial development challenge

·        California Coastal Commission Assistant District Director David Loomis notes Tract 1804 is outside Cambria USL/URL

·        Questions whether application could be processed

1995: Key legal interpretations

·        California Coastal Commission Assistant Director David Loomis issues clarifying letter on July 10

·        States water/sewer lines and boundary pre-date LCP, exempting subdivision from USL requirement on Sept. 27

·        Leimert submits “application for interpretation of Coastal Zone Land Use Ordinance” on Nov. 20

·        San Luis Obispo County Planning Commission holds hearing and recommends approval on Dec. 12

·        San Luis Obispo County Board of Supervisors adopts Resolution No. 95-506 (4-0 vote) confirming interpretation

1997: Environmental commitments secured

·        San Luis Obispo County Board of Supervisors approves Tract 1804 as 18-lot subdivision following EIR

·        342 acres (90%) preserved as open space to protect Monterey pines

·        California Coastal Commission:

1. Comments on draft EIR

2. “Strongly agrees” this isn’t precedent setting due to pre-existing contracts

3. Advises County to incorporate Guidelines for Monterey Pine Forest Preservation

Settlement and development period: 1998-2018

1998: Legal challenge

·        Cambria Community Services District attempts to place lots on water waiting list despite prior agreements

·        Leimert files lawsuit (San Luis Obispo Superior Court Case No. 980722)

1999: Settlement agreement reached.

Terms require:

·        Cambria Community Services District to provide water service to all Tract 1804 lots

·        Will-serve letters for all 18 lots

·        Lot owners to implement stringent water conservation measures

·        Each lot to be connected and metered to CCSD water system

·        CCSD to treat lot owners same as existing residential customers

2000: Rights formalized on June 1

·        Cambria Community Services District issues will-serve letter for Tract 1804

·        Final Tract Map and development plan recorded

October 23

·        CCSD Ordinance 2-2000:

1. Identifies existing water commitments

2. Lists all Tract 1804 lots as “existing eommitments”

3. Assigns each lot one equivalent dwelling unit (EDU) water allocation

2001: Infrastructure complete by April 16

·        All Tract 1804 lots connected to CCSD water systems with meters

·        Bi-monthly billing begins on Nov. 15

·        CCSD implements water moratorium

·        Specifically exempts these lots as “existing commitments”

2007: Additional recognition

·        San Luis Obispo County proposes NCAP amendments

·        California Coastal Commission:

1. Reviews County’s draft plan

2. Provides comments

3. Acknowledges CCSD moratorium’s exemption of existing water commitments

·        NCAP amended to recognize Tract 1804 parcels as part of “available water supplies” exempt from new development restrictions

Crrent dispute: 2019 to present

2019

·        Hadian applies for CDP to build 4,000 square-foot home

2020

·        Bookout applies for CDP to build 3,136 square-foot home

2021: Appeals process

·        San Luis Obispo County approves CDPs for Hadian and Bookout in October

·        Appeals filed with California Coastal Commission:

1. Three private citizens file appeals

2. Two Coastal Commissioners file appeals

3. All appeals focused solely on water supply issues

Oct. 29

·        California Coastal Commission staff issues report recommending “substantial issues” finding:

1. Staff limited by law to consider only grounds raised in appeals

2. Staff introduces Monterey pines concerns absent from appeals

3. Staff disregards Commission’s own 1995-1997 interpretations recognizing lots as “exceptional circumstances” Nov. 17

·        “Substantial issue” hearing:

1. Staff recommendation (including unauthorized Monterey pines issue) presented

2. Commission procedures required three commissioners to request discussion

3. No three Commissioners requested discussion

4. Staff recommendation adopted automatically without debate

2022: Legal challenge begins March 11

·        California Coastal Commission reverses county permit approvals at de novo hearin

·        Property owners file separate legal actions challenging commission’s decision

·        Court later consolidates the cases

2024, Dec. 31

·        Court overturns California Coastal Commission’s reversal

·        Trial court finds commission made legal errors in interpreting the LCP regarding water rights

2025, Feb. 24

·        Case management conference scheduled to address takings claims

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