By Lauren J. Caster and Darien Key
The California Supreme Court reviewed the denial of a coastal development permit to construct single family homes in a developed part of Los Osos, an unincorporated community in San Luis Obispo County in Shear Development Co., LLC v. California Coastal Commission. [Shear Development Co., LLC v. California Coastal Commission, ___Cal.5th___, Case No. S284378 (April 23, 2026; modified, May 14, 2026).]
Background
Shear purchased lots in Los Osos zoned as “Residential Single-Family,” for which there are three principal permitted uses, including “Single-Family Dwellings.” The lots were in an existing developed area bounded on three sides by residential development.
The County approved a coastal development permit authorizing Shear to build one residence on each of eight lots in two phases. In the first phase, Shear could build a total of four homes. In the second, which would occur only after completion of the Los Osos community sewer, the remaining residences could be built. Shear later applied for a permit to build the four homes planned for the second phase of development. These homes would be located between the homes built during the first phase. The Board of Supervisors voted tentatively to uphold Shear’s appeal from an adverse hearing officer’s decision. It directed staff to return to the Board with an environmental determination, findings for approval, and conditions for approval. Shear deleted one lot from his application due to the presence of protected snails. The Board upheld Shear’s appeal as to the remaining three lots.
The Board’s decision was appealed to the California Coastal Commission. Shear defended the Board’s decision but also challenged the Commission’s jurisdiction to consider the appeal. The Commission denied the permit. It identified two bases for its jurisdiction: (1) the proposed residences were in a sensitive coastal resource area (SCRA) under the County’s local coastal program (LCP); and (2) the proposed development was not for the sole principal permitted use for the area, but rather for one of several principal permitted uses. On the merits, the Commission concluded that no adequate wastewater service was available due to Special Condition 6, which provided that wastewater service to undeveloped properties within the service area was prohibited unless and until the Estero Area Plan is amended to identify appropriate and sustainable buildout limits, including proof that adequate water is available to support development; and the development did not protect adequately the environmentally sensitive habitat area (ESHA) and therefore violated ESHA policies. The Superior Court denied a petition for writ of administrative mandate, and the Court of Appeal affirmed.
The Supreme Court’s Decision
The Commission’s Appellate Jurisdiction
Regarding the Commission’s first jurisdictional ground, the Supreme Court ruled that the proposed development site is not in an SCRA. The issue turned on interpretation of the LCP, a legal issue. The Court exercises independent judgment when reviewing an agency’s interpretation of the law, applying any appropriate deference to the agency’s legal interpretation. Here the County and the Commission disagreed over interpretation of the law. When multiple agencies that administer a statute have provided conflicting interpretations, a court should apply the factors articulated in Yamaha Corp. v. State Board of Equalization, 19 Cal.4th 1 (1998) to each agency to determine not only whether either would be entitled to deference, but also whether either has a stronger claim to deference than the other. If one agency is better situated than the other to provide a definitive statutory interpretation to which a court should defer, then the court may assign greater weight to that agency’s interpretation. If not, and the agencies offer incompatible interpretations, then the court should perform its interpretive task without deference to either agency. The pertinent question for deference is whether either entity’s position bears clearly superior indicia of being correct compared to the other. Here, neither did. The Commission did not properly exercise appellate jurisdiction under the theory that the proposed development is in an SCRA.
The Commission’s second asserted basis for appellate jurisdiction was its jurisdiction over “[a]ny development approved by a coastal county that is not designated as the principal permitted use.” Pub. Resources Code § 30603, subd. (a)(4)(A). The County designated three principal permitted uses for the proposed development site: passive recreation, coastal accessways, and single-family dwellings. Shear proposed to build single-family dwellings, one of the three principal permitted uses. The Commission argued, however, that this is not “the” principal permitted use—that is, the sole principal permitted use—so the Commission had appellate jurisdiction under subdivision (a)(4)(A). The Supreme Court ruled that the Commission lacked appellate jurisdiction on that ground on these facts. The Commission’s appellate jurisdiction is limited to developments that are not designated as any of the principal permitted uses:
Ultimately, the policy arguments that the parties make are not so decisive that we are persuaded to deviate from the plain text. Under the plain text, the Commission has appellate jurisdiction under subdivision (a)(4)(A) of section 30603 only when the development is not designated as the principal permitted use—or uses—under the local government’s LCP. Shear’s proposed development is for one of the principal permitted uses of the site. The Commission has no appellate jurisdiction over Shear’s permit application undersubdivision (a)(4)(A) of section 30603.
Conclusion and Implications
The California Supreme Court reversed the judgment of the Court of Appeal and remanded with directions to reverse the order of the trial court denying the petition for writ of administrative mandate and remand with directions to issue the writ of administrative mandate. The writ is to direct the Coastal Commission to vacate its decision and dismiss the appeal for lack of jurisdiction. The Court’s opinion is available online at: https://pacificlegal.org/wp-content/uploads/2024/06/Shear-v.-CCC_Opinion-of-the-Court_4.23.26.pdf
