In late 2016, the California Coastal Commission hit Dr. Warren M. and Mrs. Henny Lent with a $4.185 million dollar penalty for failure to open a beach access next to their property on Las Flores Beach. The commission publicly defended the penalty as reasonable and described the action of the Lents as egregious, warranting a penalty of that size.
Last week, that CCC decision was heard in the Los Angeles Superior Court, before Judge James Chalfant on a writ, which is generally a quicker way to get something before the court. Chalfant is the same judge who heard Malibu’s Proposition R lawsuit several years ago. The Lents were challenging the cease-and-desist order issued by the commission, including the way it was issued, the constitutionality of the order and the penalty, the right of the commission to issue the order, the size of the penalty and the way the penalty was imposed. They also claimed they were penalized without being given a significant opportunity to be heard about the size of the penalty and to present evidence. The judge agreed with the Lents in part.
The court observed that the original CCC staff recommendation was a $950,000 penalty; the judge found that the commission had acted “somewhat arbitrarily in its decision.” He found that the commission didn’t find a connection—or didn’t articulate a connection—between the extent of the violation and the size of the penalty. He also noted that the Lents were not given an adequate opportunity to address the penalty amount. Though very careful in his choice of language, Chalfant did comment in his 30-page opinion that the fine was “borderline excessive” and also “borderline disproportionate.”
The court then set aside the $4.185 million penalty and directed CCC to set a new penalty, give the Lents notice and an opportunity to present evidence and an argument at a commission hearing about the size of the penalty.
In my judgment, this is going to impose a very difficult problem for the Coastal Commission. My guess is the Lents are going to want to have witnesses testify, present documentary evidence, have an opportunity to cross examine staff—and even commissioners—and perhaps have some discovery. The size of the fine has opened a Pandora’s box for the commission because it’s legally difficult to assess a penalty of several million dollars and then allow only 15-20 minutes to be heard.
Ironically, in a San Diego case (which we reported on recently), five coastal commissioners were being sued for hundreds of violations of the California Coastal Act for nondisclosures of private meetings; the plaintiffs were asking for $22 million in penalties against the commissioners. The court trial took six days and the judge took testimony on each of the charged violations, allowing a total of roughly $61,000 in penalties. What also came out at the trial is that the commissioners meet three days a month and work 12 to 16 hour days—when they do meet, they barely have a moment to breath. How they are going to squeeze in a full-fledged hearing for the Lents to meet the due process requirements is not going to be easy.
This opinion is only preliminary but it’s clear that when a trial judge writes a 30-page opinion, he expects that his case will be put up on appeal.
I suspect this case has a long way to go.