Daily Development for
Wednesday, April 1, 1998

by: Patrick A. Randolph, Jr.
Professor of Law
UMKC School of Law

ZONING AND LAND USE; COASTAL ZONE PROTECTION; JURISDICTION: Coastal Zone Commission's extension of its authority to properties within 1000 feet of newly created "coastline" following El Nino related erosion is valid and not a taking, even as applied to properties developed prior to such change in the coastline.

Frolic v. McDonald's Restaurant 666, Inc., 333 Cal. Rptr. 3d 999 (Cal. App. 1998)

Plaintiff owned and operated a McDonald's Restaurant at a location just east of the Pacific Coast Highway. Prior to recent developments, this location was more than 1000 feet from the public ownership portion of the California coastline and outside the jurisdictional limits of California's Coastal Zone Commission as provided in California's Coastal Zone Management Act. During El Nino related storms, however, there was substantial erosion of the coastline in the area of the restaurant, and a portion of the McDonald's parking lot now lies within 1000 feet of the eroded cliffs that now define the limits of the beach area.

The California Coastal Zone Commission, aware that the Plaintiff also owned other properties on the coastline side of Pacific Coast Highway at that point, issued a "show cause" order requiring that the owner produce a permit to continue operations.

The landowner refused to comply with the requirement and brought an action for a judicial decree that the Commission lacked jurisdiction to regulate the use of the property because (a) it was outside the Coastal Zone; and (b) in any event, its rights to operate had "vested" when it put its property to use at a time that the property was farther away from the coastline than it now is.

In affidavits filed with the court proceeding, the landowner alleged that Commission employees had stated that the Commission was likely to find that the McDonald's store constituted a "visual blight" impeding the public view of the coastline, and to refuse to grant an operating permit, unless the landowner agreed to grant open space easements over the landowner's other properties on the west side of the Pacific Coast Highway.

The trial court issued an order staying the actions of the Commission, and the Commission brought an accelerated appeal under the Costal Zone Management Act to the Court of Appeals.

Held: Reversed: The Coastal Zone Commission has the authority to require a permit for McDonalds to operate, has discretion to determine that the restaurant constitutes a visual blight, and the Commission's action, should it exercise such discretion, would not constitute a taking.

As to allegations that the landowner had a Constitutionally vested right to continue operations, and that shutting down the store would deprive the landowner of "investment backed expectations" in violation of the Due Process Clause, the court indicated that "anyone investing in property near the California shore knows that beach property is subject to erosion." Consequently, landowners are on notice of the possibility that the jurisdictional area of the Coastal Zone Commission may shift over time. The "vital interests of the community" in preserving the visual beauty of the California Coastline justify the Commission taking such severe steps as terminating uses that are inconsistent with that goal, even if those uses were undertaken prior to a shift in the shoreline.

The Court commented that "the Constitution provides no guarantee to sell hamburgers in the middle of a park, and California has declared its coastline to be a park. Any business activities therein are subject to public control and prohibition."

Comment: In a study commissioned by McDonald's and filed with the court, a consulting firm estimated that, due to recent changes in the coastline caused by erosion, more than 300 square miles of property along the California coast have become subjected to the reach of the Commission. The study estimated improvements of such properties to have a market value is excess of $50 billion.

The study further pointed out that changes in the coastline in North Carolina, South Carolina and Florida due to recent shifts in coastline have brought more than 500 square miles of properties in those states within the reach of their coastline protection acts.

A representative of the Coastal Zone Commission stated, following the ruling: "No one need be concerned about us ordering a major demolition of historic beach landmarks. We are concerned only about the proliferation of trashy fast food operations, tacky art deco hotels, and the like. . . We have an opportunity here, and we will vigorously pursue it before the coastline changes again."

Items in the Daily Development section generally are extracted from the Quarterly Report on Developments in Real Estate Law, published by the ABA Section on Real Property, Probate & Trust Law. Subscriptions to the Quarterly Report are available to Section members only. The cost is nominal. This particular report, however, is an April Fool's Day Spoof, and should not be taken seriously. For the last six years, these Reports have been collated, updated, indexed and bound into an Annual Survey of Developments in Real Estate Law, volumes 16, published by the ABA Press. The Annual Survey volumes are available for sale to the public. For the Report or the Survey, contact Stacy Woodward at the ABA. (312) 988 5260 or woodwars@staff.abanet.org

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