Court Opinion

ID: 9838232
Source: CourtListenerOpinion
Date Created: 2023-09-05 19:05:30.790511+00
Date Added: 2024-06-11T15:37:59.809604
License: Public Domain

Filed 9/5/23
                CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                 SECOND APPELLATE DISTRICT

                         DIVISION THREE

 COASTAL PROTECTION ALLIANCE                  B317485
 INC.,
                                              (Los Angeles County
         Plaintiff and Appellant,             Super. Ct. No. 20STCV44675)

         v.

 AIRBNB, INC., et al.,

         Defendants and Respondents.

      APPEAL from a judgment of the Superior Court of
Los Angeles County, David Sotelo, Judge. Affirmed.
      Tucker Ellis, Michael C. Zellers, Peter L. Choate, Amanda
Villalobos and Benjamin C. Sasse for Plaintiff and Appellant.
      McDermott Will & Emery, Russell Hayman, Jon S. Dean,
Jason D. Strabo, and Sarah P. Hogarth for Defendants and
Respondents.

                    ‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗
                         INTRODUCTION
       Airbnb, Inc. and Airbnb Payments, Inc. (collectively
Airbnb) is an online marketplace that connects owners of short-
term rentals (STRs) with renters seeking accommodations for
30 days or less. Among Airbnb’s many rental listings are
properties within California’s coastal zone. The Coastal
Protection Alliance (CPA) brought this action against Airbnb for
violations of the Coastal Act, alleging that STRs in the coastal
zone are “developments” that require a coastal development
permit (CDP), and that Airbnb was directly and vicariously liable
for allowing STR owners to list and rent unpermitted STRs on its
website.
       CPA appeals from a judgment following an order granting
Airbnb’s demurrer without leave to amend. We hold that STRs
are not per se developments under the Coastal Act, and
accordingly affirm the judgment.
       FACTUAL AND PROCEDURAL BACKGROUND
I.     Facts1
       CPA is a nonprofit corporation based in San Bernardino,
California, that states its mission is to protect and preserve the
California coast.
       Airbnb owns and operates an online marketplace for STRs.
The site works by connecting property owners, known as Member
Hosts, with prospective guests seeking accommodations. Airbnb
monetizes its service by charging the Member Hosts and their
guests a fee based on a percentage of the cost of the STR. It also
collects applicable taxes and manages remittances to local
governments.

1     Our factual recitation is drawn from the complaint’s
allegations and the applicable statutes.

                                2
      As relevant to this case, the Coastal Act defines a
development as a “change in the density or intensity of use of
land” and a “change in the intensity of use of water, or of access
thereto.” (Pub. Resources Code, § 30106.)2 The gravamen of
CPA’s complaint is that STRs in the coastal zone, including those
offered for rent on Airbnb’s site, are developments under the
Coastal Act that require a CDP. CPA alleges that “STRs increase
the density and intensity of use of land in the Coastal Zone by
increasing access to homes and residential investment properties
by the guests who rent them and by increasing access to the
coastline by such guests.” CPA further alleges that
“STRs . . . increase the intensity of use of water and access
thereto in the Coastal Zone because guests use water when they
stay in STRs and have increased access to the coastline.”
      Thousands of STRs offered on the Airbnb marketplace are
located within the coastal zone. Airbnb has neither applied for a
CDP for any STR located in the coastal zone nor advised its
Member Hosts of an obligation to do so. Airbnb also does not
ensure that Member Hosts have procured a CDP prior to listing
their property on the Airbnb website. CPA alleges that Airbnb
“knows or should know that it and its Member Hosts are not
complying with the CDP requirement under the Coastal Act and
that any STR for which a CDP has not been obtained is illegal.”
CPA further alleges that by facilitating rentals of these STRs,
Airbnb is engaging in development that requires a CDP. It also
alleges that Airbnb, through its conduct and policies, has
conspired with the Member Hosts to violate the Coastal Act, and

2    All undesignated statutory references are to the Public
Resources Code.

                                3
has also formed a joint venture and agency relationship with the
various Member Hosts.
       CPA alleges these Coastal Act violations entitle it to
declaratory and injunctive relief and render Airbnb liable for civil
penalties.
II.    Airbnb’s Demurrer and Request for Judicial Notice
       Airbnb demurred to the complaint, asserting that STRs are
not per se developments, Airbnb did not engage in development
by listing STRs in the coastal zone, and that even if STRs were
developments it would not be vicariously liable for the Member
Hosts’ failure to obtain CDPs. It also argued that the court
should decline jurisdiction under the doctrine of primary
jurisdiction. The trial court issued a tentative ruling indicating it
would overrule the demurrer, held an initial hearing, and then
continued the matter for further hearing. In the interim, Airbnb
moved to file supplemental briefing and requested judicial notice
of Coastal Commission materials. These materials included staff
reports, later formally adopted by the Coastal Commission, which
addressed proposed amendments to local coastal programs in the
City of Trinidad and the City of Eureka (the Trinidad and Eureka
Reports). In both instances the Coastal Commission adopted
staff findings that determined that STRs were not developments
that required a CDP.
       On July 13, 2021, the court held a hearing, informed the
parties that it was intending to invoke the primary jurisdiction
doctrine and asked them to submit proposed questions to the
Coastal Commission. On August 4, 2021, after it received the
parties’ respective proposed questions, the court found that STRs
are not developments and entered an order sustaining Airbnb’s
demurrer. The court also granted Airbnb’s motion for judicial

                                 4
notice of the Trinidad and Eureka Reports, invoked the primary
jurisdiction doctrine, and stayed the action pending referral to
the Coastal Commission.
      CPA moved to clarify the “purpose and scope” of the court’s
referral to the Coastal Commission in light of the court’s
conclusion STRs are not developments under the Coastal Act.
After a hearing on the motion, the court withdrew its referral to
the Coastal Commission and sustained the demurrer without
leave to amend. CPA timely appealed.
                           DISCUSSION
I.    Standard of Review
      We review an order sustaining a demurrer de novo.
(Centinela Freeman Emergency Medical Associates v. Health Net
of California, Inc. (2016) 1 Cal.5th 994, 1010.) “[W]e accept the
truth of material facts properly pleaded in the operative
complaint, but not contentions, deductions, or conclusions of fact
or law. We may also consider matters subject to judicial notice.
[Citation.]” (Yvanova v. New Century Mortgage Corp. (2016) 62
Cal.4th 919, 924.) When the trial court sustains a demurrer
“without leave to amend, we decide whether there is a reasonable
possibility that the defect can be cured by amendment: if it can
be, the trial court has abused its discretion and we reverse; if not,
there has been no abuse of discretion and we affirm. [Citations.]
The burden of proving such reasonable possibility is squarely on
the plaintiff.” (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.)
II.   The Coastal Act
      “The Coastal Act of 1976 . . . was enacted by the
Legislature as a comprehensive scheme to govern land use
planning for the entire coastal zone of California.” (Yost v.
Thomas (1984) 36 Cal.3d 561, 565 (Yost).) In doing so, the

                                  5
Legislature found that “ ‘ “the California coastal zone is a distinct
and valuable natural resource of vital and enduring interest to all
the people;” that “the permanent protection of the state’s natural
and scenic resources is a paramount concern;” that “it is
necessary to protect the ecological balance of the coastal zone”
and that “existing developed uses, and future developments that
are carefully planned and developed consistent with the policies
of this division, are essential to the economic and social well-
being of the people of this state . . . .” ’ ” (Pacific Palisades Bowl
Mobile Estates, LLC v. City of Los Angeles (2012) 55 Cal.4th 783,
793–794 (Pacific Palisades).) The Coastal Act identifies its “basic
goals” to include protecting the coast and maximizing public
access to it. (§ 30001.5.) “We liberally construe the Act to
achieve these ends.” (Keen v. City of Manhattan Beach (2022) 77
Cal.App.5th 142, 145 (Keen); § 30009.)
       Local Coastal Programs (LCPs)
       “The Coastal Act expressly recognizes the need to ‘rely
heavily’ on local government ‘[t]o achieve maximum
responsiveness to local conditions, accountability, and public
accessibility . . . .’ ” (Pacific Palisades, supra, 55 Cal.4th at
p. 794; § 30004, subd. (a).) As relevant here, it requires local
governments to develop LCPs, which include “(a) land use plans,
(b) zoning ordinances, [and] (c) zoning district maps, . . . which,
when taken together, meet the requirements of, and implement
the provisions and policies of, [the Coastal Act] at the local level.”
(§ 30108.6.) “If it conforms to the Act’s policies, the Commission
certifies the program. [Citations.]” (Keen, supra, 77 Cal.App.5th
at p. 145; see also Yost, supra, 36 Cal.3d at p. 566.) “Once the
California Coastal Commission certifies a local government’s
program, and all implementing actions become effective, the

                                  6
commission delegates authority over coastal development permits
to the local government. [Citations.]” (Pacific Palisades, supra,
55 Cal.4th at p. 794.)
       Coastal Act’s Definition of “Development”
       Subject to narrow exceptions, any person “wishing to
perform or undertake any development in the coastal
zone . . . shall obtain a coastal development permit” in addition to
obtaining any other permit required by law. (§ 30600, subd. (a).)
The Coastal Act defines “ ‘[d]evelopment’ ” to mean “on land, in or
under water, the placement or erection of any solid material or
structure; discharge or disposal of any dredged material or of any
gaseous, liquid, solid, or thermal waste; grading, removing,
dredging, mining, or extraction of any materials; change in the
density or intensity of use of land, including, but not limited to,
subdivision pursuant to the Subdivision Map Act . . . and any
other division of land, including lot splits, except where the land
division is brought about in connection with the purchase of such
land by a public agency for public recreational use; change in the
intensity of use of water, or of access thereto; construction,
reconstruction, demolition, or alteration of the size of any
structure, including any facility of any private, public, or
municipal utility; and the removal or harvesting of major
vegetation [subject to specific exceptions].” (§ 30106.)
       Standing
       The Coastal Act “gives ‘[a]ny person’ standing to maintain
an action to enforce duties specifically imposed upon the
Commission or a local governmental agency by the Coastal Act.”
(Hagopian v. State of California (2014) 223 Cal.App.4th 349,
373.)

                                 7
III.   STRs Are Not Per Se Developments Under the
       Coastal Act
       With this background in mind, we turn to CPA’s contention
that STRs in the coastal zone are “ ‘developments’ under the
Coastal Act for which CDPs must be obtained.”
       “ ‘As in any case involving statutory interpretation, our
fundamental task here is to determine the Legislature’s intent so
as to effectuate the law’s purpose.’ [Citation.] ‘We begin by
examining the statutory language, giving it a plain and
commonsense meaning. [Citation.] We do not, however, consider
the statutory language in isolation; rather, we look to the entire
substance of the statutes in order to determine their scope and
purposes.’ ” (Skidgel v. California Unemployment Ins. Appeals
Bd. (2021) 12 Cal.5th 1, 14.) Our Supreme Court has also
provided guidance, explaining that courts are to construe
“development” expansively, “consistent with the mandate that
the Coastal Act is to be ‘liberally construed to accomplish its
purposes and objectives.’ ” (Pacific Palisades, supra, 55 Cal.4th
at p. 796.) It is thus well-established that “the Coastal Act’s
definition of ‘development’ goes beyond ‘what is commonly
regarded as a development of real property.’ ” (Ibid.)3

3     While we agree that courts have interpreted development
expansively, we also note that several of the cases cited by CPA
in support of that proposition do not pertain to the specific
portion of the definition of development at issue here. (See, e.g.,
Spencer v. City of Palos Verdes Estates (2023) 88 Cal.App.5th 849,
869 [holding that an organized scheme of harassment could
constitute a development if it resulted in a “ ‘change in the
intensity of use of water, or of access thereto’ ”]; Surfrider
Foundation v. Martins Beach 1, LLC (2017) 14 Cal.App.5th 238,

                                8
       As relevant here, a development is defined to include a
“change in the density or intensity of use of land.” (§ 30106.)
CPA argues that “development occurs under the Act when
residential property is allowed to be used in such a manner as to
increase access to the property, thereby resulting in a change in
the density or intensity of land use.”4 It contends that STRs are
developments because they enable more people to reside at a
residential property – per individual rental and cumulatively –
and thereby intensify a residence’s use.
       Taken literally, CPA’s argument would apply any time
there is an increase in the number of occupants at a residence.
Following this reasoning, if a couple sold their home to a family of
four, that would intensify the use of the residence. So, too would
a lease to a family of six, at a residence previously rented by a
family of four. An intensification of use would also occur if the
occupants of a residence had a baby, took in a house guest or
hired a live-in nanny. Each event would “increase access to the

246–247 [holding that “clos[ing] the gate to Martins Beach Road,
add[ing] a sign to the gate stating ‘BEACH CLOSED KEEP
OUT,’ cover[ing] over another sign that had advertised public
access, and station[ing] security guards to deny public access”
was a “ ‘ “change in the intensity of use of water or of access
thereto” ’ ” and therefore a development]; Gualala Festivals
Committee v. California Coastal Com. (2010) 183 Cal.App.4th 60,
68 [holding that a fireworks display fell within the definition of
development as it applied to the “ ‘discharge . . . of
any . . . gaseous . . . [or] solid . . . waste’ ”].)

4     CPA also alleges that STRs change the “intensity of use of
water, or of access thereto.” The arguments raised on appeal,
however, are focused on changes to the density and intensity of
use of land.

                                 9
property, thereby resulting in a change in the density or intensity
of land use.” Even interpreting development broadly, this
argument is untenable.
       CPA counters that such “hypothetical absurdities” would
likely be exempted or excepted from the Coastal Act. It cites,
parenthetically, sections 30610 and 30624.7, asserting that those
provisions are adequate to provide relief from a literal application
of its argument. But neither section would apply in the manner
CPA suggests. Section 30610 merely exempts specific projects
from the definition of development, none of which are at issue
here. And section 30624.7 provides a procedure by which a party
can seek a CDP waiver for a proposed development subject to
delays and contingencies that limit its utility in this context. It is
neither reasonable nor practical to require homeowners to obtain
a waiver any time there is a change in the number of occupants
at their residence. Moreover, beyond identifying STRs as
impermissible, CPA offers no principled basis for determining
when an increase in residents would qualify for a waiver.
       Furthermore, as Airbnb points out, CPA’s interpretation of
a “change in the density and intensity of use of land” is
untethered to the land’s existing use. CPA asserts that “any
property used as an STR is a development” even if the residence
is already used as an STR because it “provide[s] accommodations
to guests who would not otherwise access the property.” This
interpretation goes well beyond the plain text of the statute,
which on its face applies only when there is a “change” in density
and intensity of the land’s “use,” not simply any time more (or
different) people have access to the property. Rather, common
sense tells us that residential properties have a “residential use.”
To determine whether an STR changes the “density or intensity

                                 10
of use” of a residence, the appropriate starting point is whether
using a residence as an STR is consistent with residential use.
       Keen, supra, 77 Cal.App.5th 142, is instructive. In Keen the
owner of an STR challenged the City of Manhattan Beach’s
interpretation of long-standing zoning ordinances pertaining to
“ ‘Single Family Residential’ ” and “ ‘Multi-Family Residential’ ”
residences. After historically allowing STRs, the city changed its
interpretation of the ordinances to ban them. (Id. at pp. 146–
147.) In rejecting the city’s new interpretation, the court first
examined whether the ordinances distinguished between short
and long-term rentals. (Id. at pp. 148–149.) Finding no
distinction, the court concluded “the law must treat long-term
rentals the same as short-term rentals.” (Id. at p. 148.) The
court reasoned that “the word ‘residence’ does not imply some
minimum length of occupancy. [Citation.] [¶] It is possible to
reside somewhere for a night, a week, or a lifetime. The City
points to no legally precedented way to draw a line between the
number of days that makes some place a ‘residence’ and the
number that shows it is not.” (Id. at p. 149.)
       Applying the reasoning in Keen, where a residential zoning
code is silent regarding STRs, using a residence as an STR is a
residential use, not a change in use, and thus not a development.
At the same time, implicit in Keen’s reasoning is that whether an
STR is a permissible residential use depends on the applicable
zoning for the specific property. If a city’s zoning provides that
STRs are not allowed, or distinguishes them from other
residential uses, a different analysis might apply.
       The significance of a locality’s specific zoning requirements
in determining whether STRs constitute residential use is
confirmed by Greenfield v. Mandalay Shores Community Assn.

                                11
(2018) 21 Cal.App.5th 896 (Greenfield). In Greenfield, an owner
of an STR challenged a resolution by a homeowners association
banning STRs. The property at issue was in an area zoned for
residential use pursuant to the City of Oxnard’s LCP. Although
the zoning ordinance did not address STRs, the court noted that
the city had “historically treated STRs as a residential activity,”
and that the city and the Coastal Commission had never
interpreted the residential zoning ordinance to ban STRs.” (Id. at
pp. 899, 901, fn. 3.) Accordingly, the court concluded that when
the homeowners association banned STRs it change[d] the
intensity of use and access to single-family residences in the
Oxnard Coastal Zone” and concluded that the ban was a
development under the Coastal Act. (Id. at p. 901.) Similarly, in
Kracke v. City of Santa Barbara (2021) 63 Cal.App.5th 1089,
1097, the court held that the City of Santa Barbara’s decision to
regulate STRs as hotels was a development where the city’s LCP
did not address STRs and the city had historically treated them
as “permissible residential uses.” (Id. at p. 1092.)
       CPA insists that a change in density and intensity does not
turn on the land’s existing use, pointing to the holding in Pacific
Palisades. There, our Supreme Court held that the conversion of
a mobile home park from tenant occupied to resident owned
constituted a development under the Coastal Act. (Pacific
Palisades, supra, 55 Cal.4th at p. 795.) The court determined
that the proposed mobile home conversion was a type of
subdivision, and therefore expressly included in the definition of
development, which includes a “ ‘change in the density or
intensity of use of land, including, but not limited to, subdivision
pursuant to the Subdivision Map Act . . . , and other division of
land including lot splits.’ ” (Id. at p. 794.) The court held “each

                                12
listed project [included in the definition of development] is a
change in the intensity of use for purposes of the act” (id. at
p. 795), even when a “particular conversion will have no impact
on the density or intensity of land use.” (Id. at p. 797.) The court
explained that even when “conversion might not immediately
alter use of land [it] does not preclude the possibility it will lead
to an increase in the density or intensity of use.” By way of
example, the court noted that future owners might among other
things “block public access to coastal areas or increase the
number of residents in their units.” (Ibid.)
       CPA seizes on this language, arguing that Pacific Palisades
holds that any “increase in the number of residents” is a change
in the density or intensity of use and therefore a development,
regardless of how the property is being used. But the holding in
Pacific Palisades is predicated on the existence of a “change” in
use, which in that case was a mobile home park “conversion.” We
do not read Pacific Palisades to hold that any increase in the
number of residents is a development unless accompanied by a
contemporaneous change in the land use.5

5      CPA also cites Stanson v. San Diego Coast Regional Com.
(1980) 101 Cal.App.3d 38 (Stanson), for the proposition that
“increases in intensity of use resulting from increased automobile
and pedestrian traffic” constitutes development. (Id. at p. 47.)
In Stanson, the property owner of a commercial building argued
that the conversion of storage space into a restaurant was not a
development because the remodel reduced the existing square
footage. In rejecting that argument, the court held that the
“Regional Commission properly looked beyond the mere reduction
in floor space to the actual effect of intensified use which might
be generated by Stanson’s project.” (Ibid.)

                                 13
      In short, we conclude that a development does not occur
merely because a residence is used as an STR. Whether using a
residence as an STR is a “change in the density or intensity of the
use of land” and thus a development under the Coastal Act
depends on the permissible scope of the residence’s existing use.
CPA’s sweeping interpretation of development to include every
STR would circumvent the specifically tailored zoning ordinances
in the LCPs throughout the coastal zone. Interpreting the
Coastal Act in this way is neither reasonable nor consistent with
the Act’s acknowledged reliance on “local government and local
land use planning procedures and enforcement” in carrying out
the Act’s goals. (§ 30004, subd. (a).) Such an interpretation
would also undermine the Coastal Act’s goal of maximizing public
access to the coast, by limiting the availability of STRs as
affordable accommodations for short-term renters. (§ 30001.5.)6

      Although not discussed explicitly in Stanson, the proposed
remodel at issue in that case fell within “the Coastal Act’s
definition of the word ‘development’ [which] includes the
‘construction, reconstruction’ or ‘demolition’ of any structure.”
(11 Lagunita, LLC v. California Coastal Com. (2020) 58
Cal.App.5th 904, 927.) Accordingly, we do not construe Stanson
to hold that any increase in foot or auto traffic is by itself a
development.

6    For the same reasons, CPA’s effort to characterize STRs as
commercial use is also unpersuasive. What qualifies as
commercial use depends on how a locality has crafted its
commercial zoning ordinance and cannot simply be reduced to
whether the homeowner is earning money from renting the
property or how many people occupy it. (Greenfield, supra, 21
Cal.App.5th at p. 901, fn. 3.)

                                14
We accordingly hold that CPA has failed to state a claim under
the Coastal Act, and the trial court properly sustained the
demurrer. Furthermore, because CPA does not assert how the
complaint could be amended to state a claim, the trial court did
not abuse its discretion in declining leave to amend.7
      The parties also dispute whether and to what extent we can
consider certain Coastal Commission materials.8 Because we

7     Because we reject the interpretation urged by CPA and
hold that STRs in the coastal zone are not per se developments as
defined in section 30106, we do not address its arguments that
Airbnb is vicariously liable for the conduct of the homeowners
that use its platform or that Airbnb is directly liable because it
engaged in development by operating its platform to facilitate
STRs in the coastal zone. We also do not address Airbnb’s
primary jurisdiction argument.

8      The parties disagree as to whether various Coastal
Commission actions and reports are judicially noticeable. There
are two categories of Coastal Commission materials at issue in
this case. The first are the Trinidad and Eureka Reports that the
trial court judicially noticed and relied on in sustaining the
demurrer. The second are other various Coastal Commission
materials (e.g., staff reports, meeting agenda, videorecordings)
relating to proposed LCP amendments addressing STRs for the
cities of Trinidad, Eureka, Malibu and Santa Barbara of which
the parties request this court take judicial notice on appeal. The
parties do not request the court take judicial notice of the same
materials, and CPA objects to Airbnb’s request, although Airbnb
essentially concedes to CPA’s.
       As to the first category, CPA maintains that the trial court
abused its discretion when it took judicial notice of the Trinidad
and Eureka Reports because they were irrelevant, and the court
erroneously relied on “the truth of certain disputed statements in

                                15
conclude that the language of the statute is unambiguous and
that a development does not occur every time a residence is used
as an STR, we need not resolve the degree of deference owed to
the Coastal Commission materials.

those reports.” We disagree. The trial court in this case could
properly take judicial notice of the Coastal Commission actions,
which are “ ‘official acts of state agencies.’ ” (Lent v. California
Coastal Com. (2021) 62 Cal.App.5th 812, 854.) CPA’s contention
that the trial court erred when it accepted as true a disputed fact
as to whether STRs “constitute[ ] ‘development’ by increasing
access to residential property and the coast” conflates an issue of
statutory interpretation with a factual dispute. (For the same
reason, we reject CPA’s suggestion that its allegation that STRs
are developments is a “well-pled” fact that we must accept as true
for purposes of this appeal. (Evans v. City of Berkeley (2006) 38
Cal.4th 1, 6).) With respect to the remaining Coastal
Commission materials, CPA argues that they concern the Coastal
Commission’s interpretation of “development,” which is not
entitled to deference and is accordingly irrelevant. We grant the
request for judicial notice under Evidence Code section 452,
subdivisions (c) and (h) but rely on them only to the extent they
are relevant to our disposition of this appeal. We deny CPA’s
request for judicial notice of the trial court’s July 2021 revised
tentative ruling because it has no relevance on appeal. (Gbur v.
Cohen (1979) 93 Cal.App.3d 296, 301.)

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                        DISPOSITION
      The judgment is affirmed. Respondents are awarded their
costs on appeal.
      CERTIFIED FOR PUBLICATION

                                           HEIDEL, J.*

We concur:

                  EDMON, P. J.

                  LAVIN, J.

*     Judge of the Los Angeles Superior Court, assigned by the
Chief Justice pursuant to article VI, section 6 of the California
Constitution.

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