Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_07-cv-01099/USCOURTS-casd-3_07-cv-01099-1/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 28:2201 Declaratory Judgement

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- 1 - 07cv1099

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

MANCHESTER PACIFIC GATEWAY

LLC,

Plaintiff,

CASE NO. 07cv1099 JM(RBB)

ORDER DENYING MOTIONS TO

DISMISS AND TO STRIKE

vs.

CALIFORNIA COASTAL COMMISSION,

et al.,

Defendant.

Defendants California Coastal Commission (“Commission”), all twelve members

of the Commission (Steve Blank, Sara Wan, Dr. William A. Burke, Steven Kram, Mary

K. Shallenberger, Patrick Kruer, Bonnie Neely, Mike Reilly, Dave Potter, Khatchik

Achadjian, Larry Clark, and Ben Hueso), the Executive Director of the Commiussion

(Peter M. Douglas), and three Commission staff persons (Sherilyn Sarb, Deborah Lee,

and Diana Lilly) move to dismiss the First Amended Complaint (“FAC”) pursuant to

Rules 12(b)(1), (2), and (6) of the Federal Rules of Civil Procedure and to strike the

FAC based upon California’s law regarding Strategic Lawsuits Against Public

Participation ("SLAPP”), Cal. Code Civ. Proc. § 425.16. Manchester Pacific Gateway

LLC (“MPG”) opposes the motion. For the reasons set forth below, the motions to

dismiss and to strike are denied. 

Case 3:07-cv-01099-JM-RBB Document 26 Filed 10/02/07 Page 1 of 10
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BACKGROUND

On June 15, 2007, MPG commenced this action seeking, among other things, a

declaration that the Commission “cannot require Manchester to obtain a CDP (Coastal

Development Permit) as a condition to Manchester’s developing the Project.” (FAC

¶35). MPG contends that the Commission’s position with respect to obtaining a CDP

violates the Coastal Zone Management Act (“CZMA”), 16 U.S.C. §1451 et seq. The

present action relates to a real estate ground lease entered into between MPG and the

Navy on November 22, 2006 for the development of 16 acres of land in downtown San

Diego, California, known as the Navy Broadway Complex (“NBC”). (FAC Exh. B at

p. 81).

In 1987 Congress authorized the Navy to enter into a public-private venture to

re-develop the NBC site. The plan allowed the federal government to retain ownership

of the land and allow the Navy to obtain replacement office space at no cost to

taxpayers. (FAC ¶10; Oppo. at p.2:24-25). In June 1987 the Navy and the City of San

Diego entered into a Memorandum of Understanding (“MOU”) concerning the

development of the NBC site. The City and Navy established general guidelines for the

project regarding maximum use intensity, building program, architectural standards,

building form and scale, site access and parking treatment, and landscape

considerations. (FAC ¶12). 

In August 1990 the Navy completed a Coastal Consistency Determination of the

NBC site pursuant to its statutory obligations under the Costal Zone Management Act

(“CZMA”), 16 U.S.C. §1456. The Navy concluded that the project was consistent to

the maximum extent possible with California’s Coastal Management Program

(“CCMP”). (FAC ¶14). In 1991, the Commission analyzed and considered the

proposed NBC project, concluding that the NBC project was consistent to the maximum

extent practicable with the CCMP. On May 7, 1991 the Commission concurred in the

Navy’s Federal Consistency Determination and, on October 8, 1991, the Commission

issued its Adopted Findings on Consistency Determination. (FAC ¶14). The 1991

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Commission Findings noted that its findings were premised on the assumption that

construction of the NBC site would comply with the plans and guidelines developed

between the City of San Diego and the Navy. The 1991 Findings concluded that “no

further Commission action is required for the redevelopment to proceed as presented

in the consistency determination.” (FAC ¶17).

At the heart of MPG’s declaratory relief claims, MPG seeks a declaration that the

only “remaining approvals required of the [NBC] project are from CCDC (Centre City

Development Corporation) and the City.” (FAC ¶40). MPG alleges that the

Commission asserts that it must obtain a supplemental federal consistency review and

a CDP before proceeding with the NBC project. (FAC ¶47).

Defendants now move to dismiss the complaint based upon two main grounds:

(1) the action is barred by the Eleventh Amendment; and (2) the Commission may

require a CDP pursuant to the Supreme Court’s opinion in Granite Rock v. California

Coastal Commission, 480 U.S. 572 (1987). Defendants also move to strike the FAC

under California’s Anti-SLAPP law. All motions are opposed. 

DISCUSSION

Legal Standards

Federal Rule of Civil Procedure 12(b)(6) dismissal is proper only in

"extraordinary" cases. United States v. Redwood City, 640 F.2d 963, 966 (9th Cir.

1981). Courts should grant 12(b)(6) relief only where a plaintiff's complaint lacks a

"cognizable legal theory" or sufficient facts to support a cognizable legal theory.

Balistreri v. Pacifica Police Dept., 901 F.2d 696, 699 (9th Cir. 1990). Courts should

dismiss a complaint for failure to state a claim when the factual allegations are

insufficient “to raise a right to relief above the speculative level.” Bell Atlantic Corp

v. Twombly, __550 U.S. __, 127 S.Ct. 1955 (2007). The defect must appear on the face

of the complaint itself. Thus, courts may not consider extraneous material in testing its

legal adequacy. Levine v. Diamanthuset, Inc., 950 F.2d 1478, 1482 (9th Cir. 1991).

The courts may, however, consider material properly submitted as part of the complaint.

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Hal Roach Studios, Inc. v. Richard Feiner and Co., 896 F.2d 1542, 1555 n.19 (9th Cir.

1989). 

Finally, courts must construe the complaint in the light most favorable to the

plaintiff. Concha v. London, 62 F.3d 1493, 1500 (9th Cir. 1995), cert. dismissed, 116

S. Ct. 1710 (1996). Accordingly, courts must accept as true all material allegations in

the complaint, as well as reasonable inferences to be drawn from them. Holden v.

Hagopian, 978 F.2d 1115, 1118 (9th Cir. 1992). However, conclusory allegations of

law and unwarranted inferences are insufficient to defeat a Rule 12(b)(6) motion. In

Re Syntex Corp. Sec. Litig., 95 F.3d 922, 926 (9th Cir. 1996).

The Eleventh Amendment

Ordinarily, the Eleventh Amendment bars suits by a private party against a State

and its agencies. Tennessee Student Assistance Corp. v. Hood, 541 U.S. 440, 446

(2004). However, actions against state officials to enjoin them from enforcing state

laws or regulations which violate federal law do not offend the Eleventh Amendment.

Ex Parte Young, 209 U.S. 123 (1908); Flint v. Dennison, 488 F.3d 816, 825 (9th Cir.

2007) (“suit for prospective injunctive relief provides a narrow, but well-established,

exception to Eleventh Amendment immunity”). By violating federal law, individual

state officials are stripped of immunity and may be sued personally for the

consequences of their illegal conduct. Young, 209 U.S. at 160. 

“An allegation of an ongoing violation of federal law where the requested relief

is prospective is ordinarily sufficient to invoke the Young fiction.” Idaho v. Coeur

d’Alene Tribe of Idaho, 521 U.S. 261, 281 (1997). In Idaho, the Coeur d’Alene Tribe

brought an action against the state of Idaho, various state agencies, and numerous state

officials in their individual capacities. The Tribe sought a declaratory judgment

establishing its entitlement to exclusive use and possession of certain submerged lands

under Lake Coeur d’Alene. The District Court held that the Eleventh Amendment

bared certain claims and dismissed the claim for injunctive relief on the merits. The

Ninth Circuit reversed in part and affirmed in part, holding that the Young doctrine

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allowed the claims for declaratory and injunctive relief to proceed against the state. The

Supreme Court reversed, emphasizing that a case-by-case approach must be taken when

applying the Young doctrine to ensure “a careful balancing and accommodation of state

interests.” Id. at 278. Following an analysis and review of the historical development

of the sovereign attributes of navigable waters, the development of the equal footing

doctrine as the various states joined the Union, and a state’s unique interests in such

lands, the Supreme Court concluded that lands underlying navigable waters have

historically been considered sovereign lands and form an integral attribute of

sovereignty. Id. at 283 - 284. The court also emphasized that Idaho had a unique

interest in the public waters of Lake Coeur d’Alene and adopted statutes expressly

preserving the waters for public use and enjoyment. Id. at 287. The relief sought by

the Tribe, characterized by the Supreme Court as “the functional equivalent of a quiet

title action,” directly implicated historically strong state interests. While stressing the

continued vitality of the Young doctrine, the Supreme Court concluded that “particular

and special circumstances” supported Idaho’s unique interests in the land. Id. at 287.

These paramount sovereign interests outweighed the interests articulated in Young and

allowed “Idaho to rely on its Eleventh Amendment immunity and to insist upon

responding to these claims in its own courts. Id. at 287-88.

Here, in contrast to Idaho, Defendants fail to articulate particular and special

circumstances warranting the setting aside of the Young doctrine. MPG alleges that

Defendants continue to violate the CZMA and seek prospective relief only to remedy

the alleged federal violation. These allegations are sufficient to implicate the Young

doctrine. Idaho, 521 U.S. at 281 (“An allegation of an ongoing violation of federal law

where the requested relief is prospective is ordinarily sufficient to invoke the Young

fiction.”). To avoid application of Young, Defendants must identify sufficiently

compelling reasons to invoke the Eleventh Amendment bar - - something they fail to

do. Consequently, the court concludes that the Eleventh Amendment does not bar this

action. 

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Finally, Defendants contend that the individual defendants are not proper parties

to the action. The court rejects such argument as the individual defendants are sued in

their official capacity and MPG only seeks prospective relief, not damages. See

Verizon MD Inc. v. Public Serv. Comm’n of MD, 535 U.S. 535 (2002) (rejecting

Eleventh Amendment bar under Young and permitting action to go forward against

state commissioners of the Maryland Public Service Commission); Exxon Corp. v.

Fischer, 807 F.2d 842, 845 (9th Cir. 1987) (finding that the Eleventh Amendment did

not bar claims against individual members and executive director of the California

Coastal Commission, sued in their official capacities).

In sum, the motion to dismiss the action based upon the Eleventh Amendment is

denied.

The NBC Project Is Not Excluded from the Coastal Act

 Defendants contend, as a matter of law, that the Commission may require a

permit for the NBC project. Defendants argue that there has been no violation of the

CZMA and therefore California’s Coastal Act of 1976 authorizes the Commission to

exercise jurisdiction over the NBC property. By way of background, on November 7,

1977, the federal government approved California’s CCMP which included the

California Costal Act of 1976. The CZMA definition of coastal zone provides that the

only lands “[e]xcluded form the coastal zone are those lands the use of which is by law

subject solely to the discretion of or which is held in trust by the Federal Government,

its offices or agents.” 16 U.S.C. §1453(1). 

Defendants argue that the NBC property “is not under the sole discretion of the

federal government or held in trust by it,” and therefore the property is not excluded

from the scope of the Coastal Act of 1976. Defendants cite portions of the Navy/MPG

lease agreement to support their argument that MPG, as lessee to the Real Estate

Ground Lease, has some discretion with respect to the use of the property. Defendants

do not cite any authority interpreting the contours of the phrase “subject solely to the

discretion of” the Federal Government. However, Defendants argue that California

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Coastal Com. v. Granite Rock Co., 480 U.S. 572 (1987) supports their argument that

the Commission may require a permit for private development on federal lands. There,

pursuant to the Mining Act of 1872, Granite Rock held certain unpatented rights to

mine minerals on federal land and the Coastal Commission sought to regulate Granite

Rock’s development of the site. Id. at 575. The issue before the court was whether

certain federal statutes and regulations, including the CZMA, preempted the Coastal Act

of 1976. The Ninth Circuit concluded that the Coastal Act’s CDP requirement was

preempted by the Mining Act of 1872 because “an independent state permit system to

enforce state environmental standards would undermine the Forest Service’s own

permit authority.” Id. at 577. The Supreme Court reversed, concluding that “Congress

specifically disclaimed any intention to pre-empt pre-existing state authority in the

CZMA . . . [and therefore] the CZMA does not automatically pre-empt all state

regulation of activities on federal lands.” Id. at 593. 

Defendants’ arguments, the court concludes, do not establish that MPG fails to

state a claim for declaratory relief as a matter of law. Viewed in the best light to MPG,

the FAC adequately alleges that the NBC property is subject to the discretionary control

of the federal government such that the NBC property may ultimately, upon

development of a complete evidentiary record, be excluded from definition of coastal

zone. MPG alleges that the NBC Project was authorized by Congress, and that the

legislation required the Navy to form a joint venture between the Navy and a private

developer. (FAC ¶10). The legislation authorized the Navy to enter into a long-term

lease with the private developer and the Memorandum of Understanding between the

Navy and the City of San Diego established guidelines regarding the maximum use

intensity, building program, architectural standards, and other project parameters. (FAC

¶ 12). Further, MPG alleges that in August 1990, the Navy filed with the Commission

a CZMA Federal Consistency Determination for the NBC project site. The Navy,

pursuant to §307(c) of CZMA, also analyzed the NBC project for consistency with the

CZMA, including the Coastal Act of 1976. (FAC ¶13). The Commission concurred

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1

 The court notes that the parties do not attempt to define the contours of what is meant by the

phrase “subject solely to the discretion of or which is held in trust by the Federal Government, its

offices or agents.” 16 U.S.C. §1453(1). Here, use of the NBC property was subject to federal

legislation authorizing the Navy to enter into a development contract with a private party and

authorizing the Navy to set the project’s parameters in conjunction with the City of San Diego. (FAC

¶¶1-12). On one level it could be argued that Federal Government has exercised sole discretion over

the NBC project by enacting legislation and by selecting a private developer and working with the

City to define the project’s parameters. On the other hand, one could argue that both the private

developer and the City exercise discretion to some degree in defining the scope of the project and

therefore the discretion may not be “solely” with the Federal Government. This issue is raised to

highlight the court’s concern regarding the interpretation and application of §1453(1) to the present

action. 

2

 Defendants raise two other arguments in support of their motion to dismiss, neither of which

is persuasive. First, Defendants contend that there is no private right of action under the CZMA and

therefore all claims must be dismissed. Defendants cite several authorities holding that there is no

private right of action under CZMA. The difficulty with Defendants’ argument is that the present

action is brought pursuant to the Declaratory Judgment Act, not the CZMA. MPG neither seeks to

assert a claim under CZMA nor obtain a CZMA related remedy. Consequently, the motion to dismiss

on this ground is denied. Second, “[t]o the extent Manchester contends that [Commission] staff

improperly refused to file its coastal development permit application,” (Motion at p.16:11-13),

Defendants argue that the court must dismiss the action because MPG failed to exhaust available state

administrative and judicial remedies. This argument appears misplaced as MPG does not contend that

Defendants wrongfully failed to file its application. Rather MPG challenges the ability of Defendants

to require a CDP under the Coastal Act and whether a supplemental CZMA consistency review is

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with the Navy’s consistency review. (FAC ¶ 14). 

Based upon the FAC’s allegations, the court concludes that MPG adequately

alleges that the federal government exercised deliberate, extensive discretion and

control over the development and planning of the NBC project such that the NBC site

may be excluded from the scope of CZMA. The present case does not raise any

preemption argument and is factually dissimilar to Granite Rock. There, a private

company planned and conducted mining related activities without Federal involvement

- there was simply no argument challenging the exercise of the Federal Government’s

discretion over the property because it did not exercise any discretion over the mining

related activities. Here, in contrast, the Federal Government is the moving force behind

the planning and development of the NBC project and the Navy acted pursuant to

legislative mandate.1

Finally, the court notes that whether the Navy exercised sufficient discretion over

the NBC site to fall outside the scope of 16 U.S.C. §1453(1) raises mixed legal and

factual issues not properly resolved on a motion to dismiss.2

 Accordingly, the motion

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required under the circumstances.

3

 Defendants also argue that the Commission may require a consistency determination or a

CDP based upon changed circumstances. (FAC Exh. A at 43). The court declines to reach such a fact

intensive inquiry on a motion to dismiss.

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to dismiss on the above cited grounds is denied without prejudice subject to a further

showing.3

Anti-SLAPP

Defendants contend that the FAC should be stricken under California’s AntiSLAPP law, Cal. Code Civ. Proc. § 425.16. Defendants generally argue that MPG

seeks declaratory relief and that such claims “preclude defendants from exercising their

rights of petition and free speech; [and] that suffices for purposes of the Anti-SLAPP

law.” (Reply at p.10:9-10). The Anti-SLAPP law was enacted in response to concerns

about civil actions aimed at private individuals to deter or punish them for exercising

their political or legal rights. United States v. Lockheed Missiles & Space Co., Inc.,

190 F.3d 963, 970 (9th Cir. 1999). As explained in Lockheed Missiles,

[t]he hallmark of a SLAPP suit is that it lacks merit, and is brought with

the goals of obtaining an economic advantage over a citizen party by increasing the cost of litigation to the point that the citizen party’s case

will be weakened or abandoned, and of deterring future litigation.

Id. at 970-71. 

Here, the present action does not reflect any of the hallmarks of a SLAPP suit

because the action ostensibly has merit and MPG does not seek an economic advantage

over Defendants. Significantly, MPG has alleged potentially meritorious claims, thus

removing the present case from the Anti-SLAPP paradigm. To state a claim for

declaratory relief, MPG must sufficiently allege: (1) an actual controversy within the

meaning of Article III; and (2) that the actual controversy relates to a claim within the

court’s subject mater jurisdiction, upon which relief could be granted. 28 U.S.C.

§2201(a); Calderon v. Ashmus, 523 U.S. 740, 745-47 (1998). Stated another way, the

question is whether there is a “substantial controversy, between parties having adverse

legal interests, of sufficient immediacy and reality to warrant the issuance of a

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declaratory judgment.” Maryland Cas. Co. v. Pacific Coal & Oil Co., 312 U.S. 270,

273 (1941). 

Defendants do not challenge the FAC on the ground that MPG fails to identify

a substantial controversy between the parties of sufficient immediacy to warrant

declaratory relief. The purpose of the anti-SLAPP law is to address judicial abuse by

targeting lawsuits “brought primarily to chill the valid exercise of the constitutional

rights of freedom of speech and petition for the redress of grievances.” Cal. Civ. Proc.

Code § 425.16(a). While the FAC generally challenges Defendants’ assertion of

regulatory authority over the NBC project, it does not primarily seek to limit

Defendants’ first amendment rights. Rather, the present action seeks to prevent

avoidable damages without waiting until the Commission takes injurious action against

MPG. See Seattle Audubon Soc'y v. Moseley, 80 F.3d 1401, 1405 (9th Cir. 1996)

(purpose of the Declaratory Judgment Act is to give litigants an early opportunity to

resolve federal issues to avoid “the threat of impending litigation”). Seen in this light,

Defendants fail to establish that the FAC should be stricken.

In sum, the court denies the motion to strike based on anti-SLAPP law.

IT IS SO ORDERED.

DATED: October 2, 2007

 Hon. Jeffrey T. Miller

 United States District Judge

cc: All parties

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