Sable Offshore Corp. and Pacific Pipeline Company v. California Coastal Commission

(1) Procedural History On February 18, 2025, Sable filed its initial petition and complaint in this matter asserting four causes of action: (1) damages for inverse condemnation; (2) declaratory relief for impairment of vested rights; (3) declaratory relief for inverse condemnation; and (4) declaratory relief re Public Resources Code section 30803.

On March 10, 2025, Sable submitted a Statement of Defense to the Commission. (AR 1740-10165.) The Commission set the matter for a formal administrative adjudication and, on March 28, 2025 issued its staff report and recommendation. (AR 117-205.)

On April 10, 2025, the Commission held a public hearing on its proposed enforcement orders against Sable. (AR 12973-13227.) At this hearing, Sable presented its defense. (Ibid.) At the conclusion of the hearing, following deliberation among the Commissioners, the Commission voted to issue three orders (collectively, the April 10 Orders): Cease and Desist Order No. CCC-25-CD-01 (CDO); Restoration Order No. CCC-25-RO-01 (RO); and Administrative Penalty No. CCC-25-AP3-01 (AP). (AR 12497-12522.) The AP provided an administrative penalty of $18,022,500. (AR 12501.)

Also on April 10, 2025, the Commission filed a demurer to Sable's original complaint in this Court. On April 16, 2025, Sable filed its first amended petition and complaint (FAC). The FAC asserts six causes of action: (1) for writ of traditional mandamus, or alternatively for administrative mandamus; (2) for declaratory relief; (3) for inverse condemnation; (4) for declaratory relief for impairment of vested rights; (5) for declaratory relief for inverse condemnation; and (6) for declaratory relief under Public Resources Code section 30803. The first cause of action seeks issuance of a writ of mandate to set aside the NOVs, EDCDOs, and April 10 orders.

Also on April 16, 2025, the Commission filed a cross-complaint against Sable asserting two causes of action: (1) equitable relief to restrain violation of a cease and desist order; and (2) for declaratory relief.

On May 15, 2025, the Commission filed its first amended cross-complaint (FACC) asserting five causes of action: (1) equitable relief to restrain violation of a cease and desist order; (2) equitable relief to restrain violation of a restoration order; (3) equitable relief to restrain violation of an administrative civil penalty order; (4) for declaratory relief for Sable's violation of CDO CCC-25-CD-01; and (5) for declaratory relief for Sable's violation of RO CCC-25-RO-01.

On May 16, 2025, the Commission made a motion to bifurcate and separately try the writ of mandate claims before the non-writ claims. Also on May 16, the Commission filed its demurrer to the FAC.

On May 28, 2025, the Court granted the Commission's motion for issuance of a preliminary injunction. The Court entered its written order on June 10, 2025.

On June 16, 2025, Sable filed its demurrer to the FACC. On June 18, 2025, the Court sustained, without leave to amend, the Commission's demurrer to the sixth cause of action of the FAC and otherwise overruled the demurrer.

On July 9, 2025, the Court denied Sable's motion to stay the Commission's cease and desist order. Also on July 9, 2025, Sable filed its notice of appeal of the June 10, 2025, written order granting preliminary injunction.

On July 23, 2025, the Court overruled Sable's demurrer to the FACC. The Court also granted the Commission's motion to bifurcate. The Court set a briefing schedule for resolution of the writ claims on the administrative record.

On August 18, 2025, Sable filed its motion to compel the deposition of Commission Deputy Director Cassidy Teufel. The motion was originally noticed for hearing on October 22. The motion is opposed by the Commission.

On August 22, 2025, the parties stipulated to augment the AR by the addition of two exhibits.

On August 29, 2025, Sable filed its motion for writ of mandate on Sable's first cause of action. The parties subsequently filed their respective briefs on the merits of Sable's motion for writ of mandate.

On October 6, 2025, Sable filed its motion for leave to file a second amended complaint (SAC). The motion was opposed by the Commission.

On October 15, 2025, the Court addressed the merits of Sable's motion for issuance of writ of mandate. The Court adopted its tentative ruling finding in favor of the Commission and against Sable on Sable's first cause of action for issuance of a writ of mandate. The Court also rejected Sable's request for a ruling at that hearing, taking up the matter at the hearing on December 3. The Court also continued Sable's motion to compel to December 3 and noted that Sable's motion for leave to file a SAC was also set for hearing on December 3.

On November 6, 2025, the Commission filed its motion for judgment on the pleadings seeking a judgment in its favor on its FACC. This motion was opposed by Sable.

On December 2, 2025, Sable filed a request to reopen the hearing on the writ of mandate to submit extra-record evidence. The Court formally denied this request on December 8, 2025.

On December 3, 2025, the Court made a number of rulings. The Court denied the Commission's motion for judgment on the pleadings noting that the matters could not then be resolved on the pleadings. The Court granted Sable's motion for leave to file a second amended complaint and to deem the Commission's answer to the FAC to apply to the SAC, when filed, to deny all material allegations set forth in the amendments. The Court also continued the hearing on Sable's motion to compel a deposition. The Court also supplemented and adopted its ruling of October 15 denying Sable's petition for issuance of a writ of mandate. The Court requested that the parties provide further briefing on the manner in which to proceed to resolve the remaining claims.

On December 11, 2025, Sable filed its SAC.

On December 12, 2025, Sable filed motions: (1) for reconsideration of the Court's ruling on the motion for writ of mandate, as well as orders of May 12 (motion to quash deposition), July 23 (bifurcation order), and August 27 (order on motion to compel); and (2) for reconsideration of the preliminary injunction and stay of cease and desist order.

On February 18, 2026, the Court denied the motions for reconsideration. The Court also set a briefing schedule on the Commission's motion for judgment on the pleadings to address the remainder of Sable's SAC. The Court also continued the motion to compel the deposition of Cassidy Teufel to May 20.

On April 21, 2026, Sable filed its motion for leave to file a third amended complaint (TAC) and an amended answer (FAA).

On April 22, 2026, Sable filed its opposition to the Commission's motion for judgment on the pleadings.

On May 6, 2026, the Commission filed its reply as to its motion for judgment on the pleadings.

On May 7, 2026, the Commission filed its opposition to Sable's motion for leave to file a TAC and FAA.

On May 11, 2026, Sable filed an ex parte application to continue the May 20 hearings until after disposition of the appeal of preliminary injunction.

On May 12, 2026, the Court denied the ex parte application.

On May 13, 2026, Sable filed its reply as to its motion for leave to file a TAC and FAA.

Analysis (1) Motion for Judgment on the Pleadings A motion for judgment on the pleadings is proper where the complaint does not state facts sufficient to constitute a cause of action against that Defendant. (Code Civ. Proc., Sec. 438, subd. (c)(1)(B)(ii).)

(A) Request to Continue Hearing In its opposition to the motion, Sable requests that consideration of the motion be stayed pending disposition of the appeal of the preliminary injunction. The Court of Appeal recently heard oral argument on that appeal and a decision will be forthcoming. Sable also notes that granting the request for leave to amend would moot a motion for judgment on the pleadings directed to a prior pleading. The Court has fully addressed the continuance based on the pending disposition of the appeal by denying the ex parte application. The reasons for that denial are fully applicable here. The Court will not defer disposition on that basis. The Court will address the motion for judgment on the pleadings in its present posture as directed to the SAC.

(B) Requests for Judicial Notice In support of the opposition to the motion, Sable requests that the Court take judicial notice of: (Sable Request for Judicial Notice, exhibit A) the order of the Court of Appeal continuing oral argument on the preliminary injunction appeal to May 14, 2026; (exhibit B) Executive Order No. 14391 (91 Fed.Reg. 13199 (Mar. 13, 2026)); (exhibit C) the Pipeline Capacity Prioritization and Allocation Order, dated March 13, 2026; (exhibit D) a letter to Sable from the Executive Director of the Commission, dated February 18, 2026; (exhibit E) a letter to Sable from the Executive Director of the Commission, dated March 19, 2026.

These unopposed requests for judicial notice are granted. (See Evid. Code, Sec. 452, subds. (c), (d)(1), (h).) Judicial notice does not extend to the truth of facts set forth in documents subject to judicial notice. (Fremont Indemnity Co. v. Fremont General Corp. (2007) 148 Cal.App.4th 97, 113.)

(C) Declaratory Relef

The operative pleading is Sable's SAC. Sable's motion for leave to file a TAC is discussed below. Sable's SAC contains four causes of action (the second, fourth, fifth, and sixth) seeking declaratory relief. On June 18, 2025, the Court sustained the Commission's demurrer to the sixth cause of action without leave to amend.

"Any person interested under a written instrument, excluding a will or a trust, or under a contract, or who desires a declaration of his or her rights or duties with respect to another, or in respect to, in, over or upon property, or with respect to the location of the natural channel of a watercourse, may, in cases of actual controversy relating to the legal rights and duties of the respective parties, bring an original action or cross-complaint in the superior Court for a declaration of his or her rights and duties in the premises, including a determination of any question of construction or validity arising under the instrument or contract.

He or she may ask for a declaration of rights or duties, either alone or with other relief; and the Court may make a binding declaration of these rights or duties, whether or not further relief is or could be claimed at the time. The declaration may be either affirmative or negative in form and effect, and the declaration shall have the force of a final judgment. The declaration may be had before there has been any breach of the obligation in respect to which said declaration is sought." (Code Civ.

Proc., Sec. 1060.)

As previously discussed, by its orders on October 15, 2025, and supplemented and adopted on December 3, 2025, the Court resolved the merits of Sable's first cause of action for writ of traditional mandamus, or alternatively for administrative mandamus. Those rulings are incorporated herein by reference.

Sable's second cause of action alleges the following: "Plaintiffs seek a declaration from this Court that the Coastal Commission's issuance of the NOVs, EDCDOs, Cease and Desist Order No. CCC-25-CD-01, Restoration Order No. CCC-25-RO-01, and Administrative Penalty No. CCC-25-AP3-01 (1) are contrary to the Coastal Commission's obligations and authority under the Public Resources Code, (2) unlawfully usurp the County's delegated coastal development authority under its LCP, which was certified by the Coastal Commission pursuant to the Public Resources Code, and (3) are actions not supported by evidence, as they are inconsistent with the County's prior conclusions and findings regarding the Pipelines." (SAC, P. 147.)

"As demonstrated by the Coastal Commission's issuance of the NOVs, EDCDOs, Cease and Desist Order No. CCC-25-CD-01, Restoration Order No. CCC-25-RO-01, and Administrative Penalty No. CCC-25-AP3-01, Plaintiffs are informed and believe that the Coastal Commission disputes Plaintiffs' contentions, and therefore, Plaintiffs seek a judicial declaration of the rights and obligations of the respective parties." (SAC, P. 148.)

"It is settled that an action for declaratory relief is not appropriate to review an administrative decision." (State of California v. Superior Court (1974) 12 Cal.3d 237, 249.) Each of the issues asserted in the second cause of action were raised in support of Sable's first cause of action for issuance of a writ. Each of these issues were addressed on the merits by the resolution of the first cause of action for writ.

"The Court may refuse to exercise the power granted by this chapter in any case where its declaration or determination is not necessary or proper at the time under all the circumstances." (Code Civ. Proc., Sec. 1061.) In overruling the demurrer to this cause of action in the FAC, the Court noted that broader claims may or may not be included within this cause of action. Nonetheless, the Court concludes that the resolution of the merits of the first cause of action satisfactorily resolves the declaratory relief sought by Sable in the second cause of action and determines that a further declaration is neither necessary nor proper under all of the circumstances. The motion for judgment on the pleadings will be granted as to the second cause of action.

Sable's fourth cause of action alleges: "Sable seeks a declaration from this Court that Sable has a vested right in the continuation of its operation of the Pipelines, in particular as it relates to the impairment of Sable's interests in the Pipelines by virtue of the NOVs, EDCDOs, and April 10 Orders. Sable further seeks a declaration that, if a vested right exists, Defendant violated it when the Coastal Commission issued the NOVs, EDCDOs, and April 10 Orders." (SAC, P. 160.)

As with the second cause of action, each of the issues asserted in the second cause of action were raised in support of Sable's first cause of action for issuance of a writ. Each of these issues were addressed on the merits by the resolution of the first cause of action for writ. So, for the same reasons as with the second cause of action, the Court concludes that the resolution of the merits of the first cause of action satisfactorily resolves the declaratory relief sought by Sable in the fourth cause of action and determines that a further declaration is neither necessary nor proper under all of the circumstances. The motion for judgment on the pleadings will be granted as to the fourth cause of action.

Sable's fifth cause of action for declaratory relief is discussed below.

(D) Inverse Condemnation Sable's third cause of action is for inverse condemnation. Sable alleges: "Sable has a vested right to continue its operations and perform repair and maintenance activities on the Pipelines as contemplated and previously authorized under the DPP, FDP, CUP, CDPs, Conditions of Approval, and County Letter." (SAC, P. 152.)

"The Coastal Commission's issuance of the NOVs, EDCDOs, and April 10 Orders requiring Sable to halt all repair and maintenance activities on the Pipelines, seek additional permits, and pay penalties for activities already authorized by the County substantially impairs Sable's property rights to operate at the Pipelines, and PPC's property right in the Pipelines, for the benefit of the public without prior compensation to Sable or PPC." (SAC, P. 153.)

The Court's ruling on the first cause of action is to the effect that the April 10 Orders are proper because the scope of activities of Sable here at issue exceeded the authority of Sable's existing rights to repair and maintain the Pipelines. This determination defeats the basis of Sable's inverse condemnation claims. The motion for judgment on the pleadings will be granted as to the third cause of action.

Sable's fifth cause of action alleges: "The NOVs, EDCDOs, and April 10 Orders are invalid because they substantially impair Sable's vested rights in the continuation of its operations at the Pipelines as previously authorized by the DPP, FDP, CUP, CDPs, Conditions of Approval, and County Letter." (SAC, P. 171.)

"The Coastal Commission via its issuance of the NOVs, EDCDOs, and April 10 Orders, prohibits Plaintiffs' compliance with federal law requiring Plaintiffs to promptly make anomaly repairs and conduct span remediation maintenance activities at the Pipelines as necessary to protect human health and the environment. The Coastal Commission, therefore, violated Article 1, Section 19 of the California Constitution, which prohibits the temporary or permanent taking or damaging of private property for public use without prior, just compensation. Further, Coastal Commission violated the takings clause of the Fifth Amendment to the U.S. Constitution, as incorporated by the Fourteenth Amendment, which prohibits the temporary or permanent taking of private property for public use without prior, just compensation." (SAC, P. 172.)

Sable's fifth cause of action is for declaratory relief that follows the substantive claim for inverse condemnation. For the same reasons as with the second cause of action, the Court concludes that the resolution of the merits of the first cause of action satisfactorily resolves the declaratory relief sought by Sable in the fifth cause of action and determines that a further declaration is neither necessary nor proper under all of the circumstances. The motion for judgment on the pleadings will be granted as to the fifth cause of action.

(E) Conclusion Based upon the foregoing, the Court grants the Commission's motion for judgment on the pleadings as the second, third, fourth, and fifth causes of action of Sable's SAC. The issue of leave to amend is discussed below in the context of Sable's motion for leave to amend.

(2) Sable's Motion for Leave to Amend Sable's motion seeks leave to file two different amended pleadings. As discussed below, these different pleadings raise different issues.

(A) Requests for Judicial Notice In support of its opposition to the motion, the Commission requests that the Court take judicial notice of: (Commission Opposition to Motion to Amend Request for Judicial Notice, exhibit A) Consent Decree filed in United States of America, et al. v. Plains All American Pipeline L.P., et al., case No. 2:20-cv-02415 (C.D.Cal. 2020); (exhibit B) petition filed in State of California, et al. v. PHMSA, et al., case No. 26-508 (9th Cir. 2026); (exhibit C) petition filed in Environmental Defense Center, et al. v.

U.S. Department of Transportation, et al., Case No. 25-8059 (9th Cir. 2025); (exhibit D) complaint filed in State of California v. Wright, et al., case No. 2:26-cv-03396 (C.D.Cal. 2026); (exhibit E) complaint filed in California Department of Parks and Recreation v. Sable Offshore Corp., et al., case No. 2:26-cv-02946 (C.D.Cal. 2026), initially filed in state Court prior to removal to federal Court; (exhibit F) complaint filed in Sable Offshore Corp., et al. v. Armando Quintero, Case No. 2:26-cv-02739 (C.D.Cal. 2026); (exhibit G) first amended complaint filed in Pacific Pipeline Company v.

State of California, Case No. 1:26-cv-01486 (E.D.Cal. 2026), initially filed in state Court prior to removal to federal Court; (exhibit H) ruling on motion for reconsideration of preliminary injunction filed in Center for Biological Diversity, et al. v. California Department of Forestry and Fire Protection, case No. 25CV02244 (Santa Barbara Sup. Ct. 2025); (exhibit I) ruling on motion to dissolve preliminary injunction filed in Center for Biological Diversity, et al. v. California Department of Forestry and Fire Protection, Case No. 25CV02244 (Santa Barbara Sup.

Ct. 2025); (exhibit J) California Plaintiffs' motion to enforce consent decree filed in United States of America, et al. v. Plains All American Pipeline L.P., et al., Case No. 2:20-cv-02415 (C.D.Cal. 2020). The Court will grant these requests for judicial notice. (See Evid. Code, Sec. 452, subd. (d)(1).) Judicial notice does not extend to the truth of matters set forth in Court records. (Sosinsky v. Grant (1992) 6 Cal.App.4th 1548, 1569.)

(B) Leave to Amend Sable's Second Amended Complaint "The Third Amended Complaint introduces claims for federal preemption over the Commission's enforcement authority over the Santa Ynez Pipeline System, including the NOVs, EDCDOs, and April 10 Orders, based on the Pipeline and Hazardous Safety Administration's ('PHMSA') authority over the interstate Santa Ynez Pipeline System under the federal Pipeline Safety Act and the United States Secretary of Energy's Defense Production Act Order ('DPA Order') issued on March 13, 2026." (Notice of Motion, at p. 2.)

A review of Sable's proposed third amended complaint (PTAC) confirms that the principal basis for the requested amendment is to incorporate new legal theories arising from recent events involving the federal government. The timing of events asserted in the PTAC changes the nature of the proposed amended pleading. "A 'supplemental' pleading is used to allege facts occurring after the original pleading was filed. [Citation.] In contrast, the additional allegations in an 'amended' pleading address matters that had occurred before the original pleading was filed." (Foster v. Sexton (2021) 61 Cal.App.5th 998, 1032.) The PTAC is thus more properly considered as a proposed amended and supplemental complaint rather than merely as a proposed amended complaint. (See Hutnick v. U.S. Fidelity & Guaranty Co. (1988) 47 Cal.3d 456, 464, fn. 6 [title of complaint not determinative].)

"It is the general policy that Courts should exercise liberality in permitting the filing of supplemental pleadings when the alleged 'occurring-after' facts are pertinent to the case. [Citations.] Nonetheless, the motion to file a supplemental pleading is addressed to the sound legal discretion of the Court, and its ruling will not be disturbed on appeal in the absence of a showing of a manifest abuse of that discretion. [Citation.]" (Flood v. Simpson (1975) 45 Cal.App.3d 644, 647.) Even so, a Court may properly deny a motion "on the basis that the supplement to the complaint sought to introduce new causes of action." (Ibid.)

The standard for granting leave for supplemental complaints is similar to the standard for permitting amended complaints: " 'Although Courts are bound to apply a policy of great liberality in permitting amendments to the complaint at any stage of the proceedings, up to and including trial [citations], this policy should be applied only "[w]here no prejudice is shown to the adverse party...." [Citation.]' [Citation.]" (Atkinson v. Elk Corp. (2003) 109 Cal.App.4th 739, 761.)

Sable's SAC seeks to resolve claims and issues regarding the propriety of the April 10 Orders. Those matters have now fully been resolved by the Court's disposition of the causes of action now in the SAC. The PTAC seeks to inject into this resolution a new set of legal theories based on subsequent events inapplicable to the resolution of the SAC. Consequently, granting leave to amend to permit Sable to assert supplemental claims would reopen an otherwise resolved discrete set of claims. This constitutes significant prejudice to the Commission and defeats the purposes of judicial efficiency in resolving claims ready for disposition by the Court. The motion for leave to file the PTAC with thus be denied. For the same reasons, the Court will deny leave to amend in its granting of the Commission's motion for judgment on the pleadings.

Although the Court denies this motion, it is important to point out that in so doing the Court is not expressing any position on the viability, or not, of Sable's arguments with respect to prospective conduct. As this matter now sits, Sable is free to assert in a different action any claims that it may have based upon these new legal theories arising out of federal actions subsequent to the April 10 Orders and the filing of this action. Although declaratory relief is, by its nature, prospective relief, the allegations in the PTAC are sufficiently vague that any declaration issued by the Court on a broader basis would be advisory. The inappropriateness of the Court addressing by declaratory relief newly proposed conduct is further demonstrated by the complex and seemingly fast-changing legal landscape.

(C) Leave to Amend Sable's Answer to Commission Cross-Complaint Sable's proposed amended (and supplemental) answer to the Commission's FACC, on the other hand, raises different issues. Where Sable's SAC asserts claims arising out of the Commission's past conduct, the Commission's FACC asserts claims for permanent injunctive relief. The general rule is "that equity acts in injunctive proceedings upon the situation[] as it appears at the termination of litigation as distinguished from that at the time of or prior to the commencement of the action ...." (Mallon v. City of Long Beach (1958) 164 Cal.App.2d 178, 187.)

The scope and limits of permanent injunctive relief sought by the Commission in its FACC may be affected by the new issues raised in the FAA. It is therefore appropriate to permit the pleading of such new matter by supplemental answer. The motion will be granted to permit the filing of the FAA. To the extent it is disputed that matter raised in the FAA constitutes a defense as a matter of law, those issues are best raised by appropriate motion rather than in addressing leave to amend.

(3) Remaining Issues Based upon the above discussion, there are no remaining issues for disposition in Sable's SAC against the Commission. This disposition renders moot Sable's motion to compel the deposition of Cassidy Teufel as to issues relevant to Sable's SAC. At the same time, there remain issues, at least including remedial issues, to be resolved by trial or otherwise as to the Commission's FACC against Sable. It is unclear whether the deposition of Cassidy Teufel is necessary or appropriate as to these remaining issues.

Tentative Ruling: People of the State of California v. Eighty-Seven Thousand Six Hundred and Fourteen Dollars ($87,614) U.S. Currency Tentative Ruling: People of the State of California v. Eighty-Seven Thousand Six Hundred and Fourteen Dollars ($87,614) U.S. Currency