Tower Lane Properties v. City of Los Angeles: JMBM Prevails in Published Court of Appeal Opinion Holding that a City's Erroneous Interpretation of an Ordinance At Odds with its Historical Practice is Entitled to No Deference

March 3, 2014

By Matthew Hinks

JMBM has prevailed in the Court of Appeal on behalf of its client in a well-publicized and hotly-contested development project in the City of Los Angeles. The court's published opinion will come as welcome relief to property owners who got caught in the bureaucratic mire when the City chose to "re-interpret" a half-a-century-year-old ordinance dealing with subdivision proposals to apply to all large hillside lots. However, the lasting impact of the decision will be what the court had to say about the deference a municipal authority is entitled to in connection with the interpretation of city ordinances and regulations.

Factual Background

Tower Lane applied for building and grading permits from the City of Los Angeles for construction of three single-family residences on three existing lots in the Benedict Canyon neighborhood of Los Angeles. The three lots together measured around 5 1/2 acres. During the review process, and reversing years of practice by the City's Planning Department and Department of Building and Safety, the City notified Tower Lane that to obtain the permits it must comply with LAMC section 91.7006.8.2, which requires approval by the Planning Department of a tentative tract map whenever grading will be conducted on a hillside area larger than 60,000 square feet. Section 91.706.8.2 (the "Ordinance") provides:

No permit shall be issued for the import or export of earth materials to or from and no grading shall be conducted on any grading site in hillside areas having an area in excess of 60,000 square feet (5574 m²) unless a tentative tract map has been approved therefor by the advisory agency. The advisory agency may waive this requirement if it determines that a tract map is not required by the division of land regulations contained in Chapter I of the Los Angeles Municipal Code.

Underlying the City's reversal of position was the California Environmental Quality Act ("CEQA"), which mandates environmental review of all projects over which an agency exercises discretion. Tower Lane's project was entirely by right and required no discretionary approvals. Having no other basis to subject Tower Lane to CEQA review, the City instead made one up.

JMBM instituted writ proceedings noting that the phrases "tentative tract map" and "advisory agency" used in the Ordinance are defined terms of art from the Subdivision Map Act employed as part of a process used exclusively to subdivide property, indicating that the Ordinance was intended to apply only in the case of subdivision proposals. Judge Chalfant of the Los Angeles Superior Court ruled in favor of Tower Lane and ordered the City to clear the permit condition related to the Ordinance.

The Ordinance Applies Only in the Case of Subdivisions

The Court of Appeal agreed with Judge Chalfant's reading of the Ordinance holding that, "[t]he Ordinance by its plain language applies to subdivisions only." The court rejected the City's argument that the purpose of the Ordinance was to import the "tentative tract map procedure" into its review of an applicant's grading plans. The court noted that the Ordinance "calls upon the advisory agency only for evaluation of a tentative tract map, which exists only to describe a land subdivision." Accordingly, the court concluded, "the Ordinance assigns duties pertaining only to subdivisions."

No Deference to the City's Erroneous Determination

The lasting impact of the Tower Lane opinion will be the court's discussion of the power of a municipal authority or administrative agency to interpret ordinances and regulations under which it operates. The City argued both in the trial court and the Court of Appeal that its interpretation of the Ordinance was entitled to deference, which the court was bound to uphold. The court disagreed. An agency's interpretation of an ordinance is "not binding, and ultimate responsibility for interpretation of an ordinance rests with the court," it held. Moreover, "[t]he level of deference [the court will] accord to an agency's interpretation turns on 'whether the agency has a comparative interpretive advantage over the courts, and also whether its interpretation is likely to be correct.'" The court determined that the "interpretation of the Ordinance requires no technical expertise that would give the City agencies a comparative interpretative advantage."

In addition, the court noted the City's "unclear and inconsistent" historical application of the Ordinance. The court noted that the City could offer examples of only three non-subdivision projects since 1964 to which the Ordinance had been applied and none of them had been required to obtain approval of a tentative tract map. On the other hand, the record contained numerous examples of non-subdivision projects on large hillside lots - including two by Tower Lane's predecessor on the very property that is the subject of the opinion and nine by the neighboring property owners who had intervened in the case on the side of the City - to which the Ordinance had not been applied.

Thus, according to the court, "the City agencies have not followed any consistent and long-standing interpretation of the Ordinance." Further, "an agency's undisclosed unilateral interpretation is not entitled to deference." Therefore, "[b]ecause the City cannot point to a consistent and long-standing interpretation, its current interpretation is entitled to no deference."

___

Matthew Hinks is a litigator with a wide-ranging practice that focuses primarily on the representation of real estate developers in difficult land use cases. Matt has extensive experience litigating complex mandamus actions and other claims involving signage disputes, governmental takings, CEQA challenges, planning and zoning law, civil rights violations, eminent domain issues, title disputes, lease disputes and community redevelopment and density bonus law. He has extensive experience in both federal and state courts, including trial courts and courts of appeal, as well as in arbitration, mediation and administrative settings. Contact Matt at MHinks@JMBM.com or 310.201.3558.