The Coastal Commission had asserted that the public-easement condition was a legitimate state interest of diminishing the "blockage of the view of the ocean" caused by the home renovation.

The Court held that in evaluating such claims, there must be an "essential nexus" between a legitimate state interest and the actual conditions of the permit being issued.

The CCC argued that the new house would increase blockage of the ocean view and contribute to a "wall of residential structures" which would prevent the public "psychologically from realizing a stretch of coastline exists nearby that they have every right to visit".

The development pattern, in effect, took a public resource supposedly available to anyone and turned it into the private enclave of the wealthy property owners whose houses lined the beach.

The "psychological impediments to public access" became a popular finding in staff reports analyzing projects before the California Coastal Commission, particularly when a proposed development had only a minor physical impact to access by the public but required (for legal adequacy for the staff report and California's Environmental Quality Act and Coastal Act) rational bases for imposition of conditions to help make a proposed development consistent with the environmental laws of the state.

The issue before the court was whether the imposition by the CCC of the requirement that the Nollans convey a public easement as a condition for granting a land-use permit constituted a taking.

In that case, the City of Tigard, Oregon required any business owner seeking to substantially expand onto property adjacent to a floodplain to create a public greenway and bike path from private land in order to prevent flooding and traffic congestion.