The state Supreme Court appears to be ready to undertake a sweeping review of the California Coastal Commission's makeup and its permitting activities — possibly even permits issued long ago. The court decided in April to review a case in which the Third District Court of Appeal ruled that the method of appointing the Coastal Commission violated the separation of powers doctrine (Marine Forests Society v. California Coastal Commission, 2002 DJDAR 14692, see CP&DR Legal Digest, February 2003). At the request of the Coastal Commission, the state Supreme Court unanimously agreed to review the Third District's ruling. But the state high court also said it would consider three additional questions: • If the Third District is correct, what is the appropriate remedy available to Marine Forests Society? • What effect would the Third District's ruling have on past and pending Coastal Commission decisions? • Does legislation approved in February that modifies the appointment process cure the constitutional defect? It is the second question, which opens the issue of retroactivity, that is the most complex and potentially far-reaching. Deputy Attorney General Joseph Barbieri said the state suggested the court should undertake the broad review. More than 20 cases are pending against the Coastal Commission based on the Third District's Marine Forests Society decision, and there have been attacks on old use permits based on that decision, he said. "Without explicitly doing so, we kind of invited the court to address as many of these questions as it is willing to," Barbieri said. Sacramento attorney Ronald Zumbrun, who represents Marine Forests Society, said he was surprised by the high court's action. "It seems clear the Supreme Court realized we have a messy situation with the legislation and the retroactivity," Zumbrun said. The lawsuit that has raised these weighty questions was based on Marine Forests Society's challenge to the Coastal Commission's permitting authority. Marine Forests Society, a nonprofit organization, built an artificial reef from old tires, plastic jugs, PVC pipe and concrete blocks on the ocean floor off Newport Beach. The organization said the reef would aid marine life. In 1993, the Coastal Commission ordered Marine Forests Society to get a use permit for the project, but the Commission ended up refusing to approve the after-the-fact permit. In 1999, the Commission issued a cease and desist order. Marine Forests Society filed a lawsuit, arguing that the Commission did not have the authority to issue the cease and desist order because its makeup violated the separation of powers doctrine. Marine Forests Society contended that because eight of twelve Coastal Commissioners were appointed by the Legislature and served at the will of lawmakers, the Commission was part of the legislative branch; therefore, the Commission could make policy but could not perform executive or quasi-judicial functions, such as issuing and enforcing use permits. A Sacramento County Superior Court and the Third District accepted Marine Forests Society's argument. Gov. Davis responded to the appellate court ruling by calling a special session of the Legislature. In February, the Legislature passed, and Davis signed, AB 2X 1 (Jackson). The bill sets fixed, four-year terms for the eight coastal commissioners appointed by the Assembly speaker and the Senate Rules Committee, and the bill eliminated the ability of lawmakers to remove commissioners at will. Apparently, the state Supreme Court would rule on AB 2X 1 only if it the court found a constitutional problem with the original method of appointment. Zumbrun and other property rights advocates say the bill is inadequate because the majority of commissioners still would be named by the Legislature. Barbieri said he is prepared to argue that AB 2X 1 solves the constitutional defect. But first he will argue that the original appointment structure is constitutional. The state has argued all along that nothing in the California constitution prevents the Legislature from appointing members to an executive branch agency and that then-Gov. Jerry Brown voluntarily gave the Legislature the right in this instance. If the state Supreme Court rules for property rights advocates on the separation-of-powers issues, the question becomes what to do about the Marine Forests Society cease and desist order — and, potentially, all development decisions rendered by the Commission since 1976. "There is some retroactivity," Zumbrun said, "but I don't feel the court will throw out 27 years worth of decisions." Statutes of limitations are an issue, Zumbrun said. The state's statute is 60 days, he said. But the federal Civil Rights Act has a two-year statute, and deprivation of property rights has been ruled a violation of the act, he said. The federal takings statute is either three years or five years, depending on the situation. Additionally, Zumbrun asked, how do Nollan-type actions fit in? In Nollan v. California Coastal Commission, (1987) 483 U.S. 825, the U.S. Supreme Court ruled that the Commission's granting of a permit to build a house in exchange for a beach access easement was an unconstitutional exaction. But the Nollan decision was not retroactive, and the Commission has obtained about 1,300 offers of dedication for easements before and since Nollan. "I don't know if they can answer the retroactivity question," Zumbrun continued. "But they can provide an outline. You have to applaud the court for being willing to do it." Barbieri said it would do no one any good for the court to reopen the Commission's past permitting decisions. If the court were to decide there is a constitutional defect in the appointments and then apply the decision retroactively, that could throw into question Coastal Commission use permits on which property owners have relied, he said. Both sides said that preparing briefs will be a complex task. Some observers believe it could be a year before oral arguments are conducted. The case is Marine Forests Society v. Coastal Commission, No. S113466.