What motivates us?

 I caught the bug when Gregg was roughed up by the County and District in the land use permitting process in 2007. That caused us to start reading case law in this fascinating area of the law. Two particular US Supreme Court cases were an epiphany for me. They are Lucas v. South Carolina Coastal Council, 505 U. S. 1003 (1992) and Palazzolo v. Rhode Island, 533 U. S. 606 (2001).

 After reading these and other cases, we thought we could find a way to obtain services from the District, so we purchased five lots in 2007.  Rather than engaging reasonable and responsive bureaucrats, we discovered a concerted effort by numerous agencies to frustrate our attempt to understand and solve the problem. For example, we sent the District Manager at least seven letters, but we never heard back from Tammy Ruddock. No confirmation of receipt, no calls, nothing. We did receive occasional letters from District Counsel, who told us to take a hike.

 As real estate professionals with extensive development experience, we knew something was terrible wrong.  Various agencies refused to: 1) provide requested information; 2) schedule meetings; 3) answer simple questions; or 4) make requested determinations. It was perhaps worse than working with the Russian bureaucracy. I think they just take your property in Russia; here, they take it and continue to tax you for it! And by the way, abate those weeds so the neighbors can enjoy your property!

 Based on our experience, we realized the average landowner had no chance against this concerted scheme (much like a hide the ball shell game) to mask the theft of development rights. The idea that good and trusting citizens were being robbed blind did not sit well. When threatened, my Marine Corps training as an attack pilot taught me to attack!

 We believe government purposefully devised a complex scheme that is too expensive to fight, unless there is a significant incentive to commence and sustain litigation. With that in mind, we developed a business plan that seeks to educate affected landowners and offers a cost effective litigation strategy. We needed numbers, and we got them.  Between 2008 and 2010, we joined 180 landowners; that response provided sufficient encouragement and incentive to sustain the fight.  

 Our business plan has the benefit of helping landowners, who do not have the time or resources to commence independent litigation. We are also trying to send a message that government needs to operate within constitutional limits; due process and private property rights remain the law of the land.  We think government is tone deaf unless significant money is involved (taxpayer money for their programs and paychecks), and it may need an expensive lesson to correct course. These agencies and other municipalities need to understand that similar schemes come with a price. Government cannot make a few landowners pay for (perceived) benefits enjoyed by many.  We do hope to be rewarded for our effort. Without that incentive, and without our personal investment at risk, we would have thrown in the towel hundreds (if not thousands) of hours ago. And the scheme would have succeeded.

How do we support the allegation that development rights have been “taken” by regulation?

 When excessive regulations prohibit the construction of a home on a residentially zoned lot, the regulations have the effect of taking away the development rights of the property; this is known as a “regulatory taking.” (Note: The 5^th and 14^th Amendments are the source of the “taking” and “just compensation” references).

 To build a home in the coastal zone, the Coastal Act requires that a landowner first obtain a coastal development permit (CDP). This permit determines whether residential development can be permitted on the property. Following the NCAP update, the County cannot accept a CDP application for processing unless the District first provides verification that it will provide water and sewer service. The District cannot provide this verification because its Water Master Plan implemented a growth capping scheme that limits new water connections to those properties with a District wait list position. Without water and sewer service, the CDP cannot be processed or approved. With the exception of building a home, no other use is permitted on residential property. Therefore, the development rights, use, and enjoyment of the property have been “taken” by excessive regulations.

How does the Buildout Reduction Program (BRP) affect this situation?

 The BRP was adopted to cap growth by limiting the number of future service connections. When the growth capping scheme is applied to a development application, the District should determine that it cannot provide the public services required for development. Those WITHOUT a District wait list position are the intended targets or victims of the growth capping scheme; roughly 1500 properties are not eligible to obtain water and sewer service. Those WITH a District wait list position have a commitment to obtain water and sewer service; the last wait list position will receive the final water and sewer connection. At that point, the dwelling cap will be reached, and further development will presumably harm the environment.

  Adopted as a CEQA required mitigation measure, the purpose of the BRP was to limit the potential growth inducing impacts of the proposed desalination plant. Under CEQA, the plant cannot be built if it will harm the environment. The BRP presumably protects the environment by limiting the number of people that will live in Cambria.

  The District cannot increase the cap number (or open its waiting lists) without modifying its Water Master Plan, Program EIR, and BRP. To change these, the County and Commission must first approve and certify a significant change to the NCAP; implementing measures (such as the BRP) of an LCP cannot be changed without the approval of the land use authorities. Consequently, the District does not have unilateral authority to undo the growth capping scheme.  

How does the water emergency affect the litigation strategy?

  For non-wait list holders, this is not a water law dispute. Under water law, a delay in development caused by a water emergency may not be compensable under a claim for inverse condemnation. It is a land use dispute because the land use authorities (Commission and County) compelled the District to limit the future build out of Cambria, and delegated sufficient land use authority to limit development by controlling the number of water connections.

  The District’s Water Master Plan is a long range plan to build a desalination plant to provide a reliable source of water. If and when the plant is on line (and the emergency is lifted), the water and sewer waiting lists CANNOT and WILL NOT be opened. They must remain closed to keep service commitments equal to the dwelling unit cap.  After the emergency is lifted, the non- wait list holders cannot join the closed lists, and they still will not have wait list position. It is undisputed that future water connections can only be provided to properties that have a wait list position. 

  For wait list holders considering a taking claim, this appears to be a water law dispute. By maintaining a wait list position, the District has committed to serving these properties once the emergency is lifted.  Wait list holders must wait for the emergency to obtain water service, but they will be served. Therefore, their development rights have not been taken; they are intact. 

  As a practical matter, the District will likely claim it has the authority to withhold issuing intent to serve letters during the water emergency. That is true for wait list holders, but is disingenuous as it relates to non-wait list holders. Their due process rights include discovering the cold, hard truth: non-wait list holders are only entitled to a WILL NOT SERVE letter. They cannot be served now or after the emergency is lifted because they do not hold a wait list position, and cannot apply to join the closed lists. Therefore, unlike the water law plaintiffs, the non-wait list holders are NOT potential customers of the District.  Beyond a transparent attempt to limit liability, there is nothing that prevents the District from providing “will not serve” letters during an emergency. The service review element of the litigation strategy will demonstrate this position.

What defenses are available to thwart the litigation strategy?

  The writ of mandate (requesting that the service review be completed) should cause the light of day to illuminate the service conundrum.  A writ can be granted to compel an agency to complete an action required by law; see CCP Section 1085. The District’s PSU-3 service review mitigation measure (found in the Water Master Plan) says the District “shall” complete the service review before a landowner submits a CDP application to the County. Thus, the state mandated CDP process begins at the District. Landowners’ due process rights to determine whether development can (or cannot) occur are, therefore, contingent upon the results of the service review.

  We do not agree with the District’s position that the service review is only available to wait list holders, or that the service review cannot be completed unless an “intent to serve” letter for water and sewer service can be issued. Instead, the service review should inform wait list holders that they will be served for water when the emergency is lifted; non-wait list holders should be informed that they cannot be served for water and sewer service, period.

  If the writ is granted, the District will either conduct an honest or fraudulent service review. An honest review will determine that the growth capping scheme prevents the waiting lists from being opened. Because non-wait list holders cannot apply to join the closed waiting list, and because all future connections shall come from the existing waiting list, the District cannot provide an “intent to serve” letter to them. The District cannot issue a conditional will serve letter for water (conditioned on lifting the emergency and opening the waiting list) because the existing waiting lists fully commit services to match the dwelling unit ceiling. Instead, the District can only issue a WILL NOT SERVE letter. 

  In the event the District conducts a fraudulent review (by saying the service review cannot result in the issuance of an intent to letter for water, sewer, and the other District provided services), it will invite a large slice of the liability pie. As it is, it appears the District is following the direction of the land use authority to cap growth.  However, when liability is determined, there will be an allocation between the agencies.  Abuse of discretion, deceit, and misrepresentation do not normally sit well with the courts. 

  Further, we expect to seek declaratory relief to determine the rights and duties of the parties.  A court will decide if non-wait list holders have a right to join the waiting lists now, or after the emergency is lifted. If not, its game, set, match. A court can also decide if the District has a duty to inform non-wait list holders that it has no plan to provide, and cannot provide, future water and sewer service to their properties. Either of these questions could eviscerate any hope that water law somehow controls this service conundrum. Without a viable water law defense, the water emergency provides no liability shield whatsoever.

  In the end, if our group cannot be served because the growth cap eliminated any future right to public services, the taking question is resolved: development rights were taken by a delegated use of land use authority. All that will remain is a jury trial to determine “just compensation.”  We wonder how many jurors will empathize with a government scheme that crushed the retirement dreams of good citizens. We look forward to our oldest member taking the stand; he served in the merchant marine in WWII, and is a feisty 95 years old!

What will happen to your lot if you agree to join the litigation strategy?

  Participation in our litigation strategy alone will have no effect on any rights you enjoy. You either have development rights, or you do not.  In the event a court somehow decides your development rights are intact, that should benefit you because you could presumably sell the property as a lot that can be developed (at this time, the market does not believe your property can be developed), or you will be able to develop it. 

  In the event the strategy yields the anticipated result, we expect that you will have an “election of remedies” or a choice.  If we prevail with a taking claim, the government will pay for your lot and likely take title to it; alternatively, a deed restriction that prevents development will be recorded, and you would continue to own the property. In the event a different claim for damages is successful, ownership of the property should not be affected. 

  The Company will not decide what election of remedies you select. We may make a recommendation, but the decision will made by you (with the advice of counsel).

How much time will the litigation strategy require?

  We cannot predict the timing or outcome of the proposed litigation. With the number of properties involved (we already have 180 in our group) we are dealing with a significant (potential) liability. It is reasonable to expect that every effort will be made to fight and delay the case. However, because the growth capping scheme is adopted and available to read, there does not appear to be much incentive to have a court ruling or appeal that will help others conduct follow on litigation.  Paying for 180 will be expensive, but the BRP projected the purchase of 879 properties.  Paying for 1500 will be more expensive.

What lots are not eligible to participate?

  Any lot that has been “retired,” has an easement prohibiting development, or has been merged with a parcel containing a home, is not eligible to participate. If you are not sure of your property’s eligibility, please contact us.

Are lots on the District’s waiting list eligible?

  No.  However, those on the County’s waiting list are eligible to join.

How does the County Allocation/Waiting list affect the litigation strategy?

  The County’s wait list was opened in 1991 as an overflow list of landowners seeking public services, who could not join the District’s list. We have correspondence that demonstrates the District intended to serve the County’s list, once the District’s lists were exhausted. The County continued accepting fees and joined applicants until 2006. Thus, the record demonstrates that the County’s closure of the District’s waiting lists, or any other action before the NCAP update, was not meant to permanently limit development.

Can owners drop out without incurring costs?

  Yes.  Over the last three years we have had three owners terminate with us so they could sell or merge their property. We processed the required paperwork within days, and they paid nothing. In fact, over the last three years, not a single bill has been sent to any member of our group.

Is there someone we can talk to about this offer?

  Be advised that the Company, its Managers and representatives cannot and will not provide legal advice to you. You are encouraged to consult with trusted advisors before joining our litigation strategy.

  For more information, you may email us at UnClogCambria@cox.net or call Mike Erickson at 760-806-0034. Gregg Berge can be reached at 951-587-1287.