The central mystery of the 1974 neo-noir film Chinatown is an imagined water heist in California: A powerful man is stealing water during a drought so that land becomes unusable (and cheap).
The mystery at the center of the Hadian case is also a California noir story, although it has shades of the TV series Veep. In real life, the villain isn’t a Machiavellian millionaire but bumbling bureaucrats—and unlike in Chinatown (spoiler), the good guys win.
The California Coastal Commission swooped in, appealed the County’s decision to itself, and reversed the permit approvals.
A Promise for Water
“Remember, we live next door to the ocean but we also live on the edge of the desert,” one character says in Chinatown. “Without water, the dust will rise up and over us as though we’d never existed.”
That’s essentially how the Hadian story begins: many years ago, with water and dust.
There’s a stretch of land outside the northern edge of Cambria, in unincorporated San Luis Obispo County, that was once owned by the Walter H. Leimert Company. Walter Leimert was a famous developer born in 1877 to German immigrant parents in Oakland. He had a vision for what California could be: His company built bridges and subdivisions up and down the state, turning uninhabited land outside cities into neighborhoods where people could live. (“The Los Angeles pendulum swings east!” one 1923 ad for a Leimert subdivision reads, showing a “population” pendulum swinging from Los Angeles toward the mountains.)
The San Luis Obispo County land was part of this vision: more neighborhoods, more houses, more people living on the land.
In 1969, the Walter H. Leimert Company entered into an agreement with the Cambria County Water District—and paid the district $25,000—to provide obtain a guaranty of water service to its San Luis Obispo County property. The company eventually subdivided the property into 18 single-family lots.
Al Hadian and Ralph Bookout have owned two of these lots for over twenty years.
The Coastal Commission Gets Involved
Before Ralph cleaned up his six acres, it was a “huge fire hazard,” he says. “We’re on the wind-ward side of the forest. If a fire started in our area and swept up the hill, and got into our trees, the entire downtown residential area that’s next to us and downtown Cambria would be in jeopardy.”
Ralph—a retired contractor who used to own a car dealership in nearby Visalia—cleaned out invasive species, planted new Monterey pine trees, and irrigated the property.
He was able to irrigate because he and Al, a retired engineer on a neighboring lot, have been paying bimonthly for water service since 2001—water that the district committed to providing years earlier.
This, of course, is California, where water is treasure. San Luis Obispo County has long been anxious about its water supply. In 2001, it imposed a moratorium on new municipal water customers—effectively pausing all new development—but it included an exception for any landowners to whom the district had already committed to providing service. The moratorium, and the exception, became formalized in the County’s Local Coastal Program (LCP) in 2007. Al and Ralph—receiving metered water service since 2001, on properties with water rights dating back to 1969—were clearly exempt.
Al and Ralph wanted to build homes on their properties for retirement. They applied for coastal development permits in 2019 and 2020. The County granted them.
But the California Coastal Commission swooped in, appealed the County’s decision to itself, and reversed the permit approvals.
“[T]he proposed project is inconsistent with the LCP’s provisions that require new developments to ensure that adequate water is available to serve the project,” the Commission ruled.
It was a shocking move. The water history of the land is well documented: The water district committed itself to providing water on these properties, Al and Ralph have been paying water customers for over twenty years, and the Local Coastal Plan clearly exempts parcels like this from the moratorium.
Al and Ralph sued the Coastal Commission. Pacific Legal Foundation represented them.
“My expectations were that we would win,” Ralph says. “Because of the facts of the case.”
This was not a case to settle a difference of opinion, he points out. “Here, who’s right and who’s wrong is clear.”
But meanwhile, Al and Ralph couldn’t build. And litigation takes years.
‘Simply Wrong’
The court’s ruling came on New Year’s Eve 2024.
“I got a call from Mr. Ty Green [PLF’s co-counsel in San Luis Obispo] at 10 p.m. on New Year’s Eve,” Al remembers. “He said, ‘We won and we won decisively.’” Al, like Ralph, expected to win. “But the timing—two hours before the New Year—made it super special.”
So did the judge’s strong words for the Coastal Commission.
“Ralph Waldo Emerson chided rigid thinkers with his oft-quoted aphorism that ‘A foolish consistency is the hobgoblin of little minds,’” began Judge Michael C. Kelley’s ruling in Hadian v. California Coastal Commission. “But consistency can have its virtues and one place where its salutary attributes are most important (and particularly deserving of judicial protection) is in the interpretation of our laws by administrative agencies.”
The California Coastal Commission acted “in derogation of the legal/regulatory history of these parcels,” Judge Kelley continued. The reversal of Al and Ralph’s permit approvals was “based on a misinterpretation of the governing legal provisions” of the County’s LCP.
The California Coastal Commission argued that its interpretation of the LCP was entitled to deference—that the court should simply defer to the Commission. Not so: “As a threshold matter, the Court rejects as unfounded the Commission’s contention that its construction of the LCP is entitled to deference,” Judge Kelley wrote.
After going through the facts of the case—and noting that ten lots in Al and Ralph’s subdivision were previously developed with residences “without objection from the Commission”—Judge Kelley said that the Commission’s actions in this case were “infected by fundamental legal error.” He also called the Commission’s interpretation of the County’s Public Works policy “simply wrong.”
On the Land
Al and Ralph were thrilled. The judge was clearly “annoyed” at the Coastal Commission, Ralph says. To him, the 32-page ruling seemed to say, “If you’re going to come into my courtroom, you’d better have your stuff right.”
There’s a bittersweet quality to the win: Five years have passed since Al and Ralph applied for their permits. Ralph was 79 when he applied; now he’s 85. “I’m not able to swing a hammer like I used to,” he says.
If they built now, Ralph says, the cost of construction would probably be 50 percent higher than it was five years ago. (He knows that kind of thing off-hand, as a former contractor.) “On top of that,” he says. “if you try to build right now, the fires in Los Angeles are increasing the cost of materials. Because you have thousands and thousands of homes that need to be rebuilt.”
Still, he’s happy. He and Al beat the California Coastal Commission in court.
Ralph often goes to his property—not to build, yet, but just to sit. Because he cleaned it up—and irrigated it, with the water at the center of his case—the land “looks pretty good,” he says.
“I go up there and relax and watch the wildlife. I watch the birds soaring above the trees. I’d rather have the house there. But I can still sit in my chair and enjoy it.”
