Patterico's Pontifications

11/30/2007

Sometimes Even I Wonder Why We Give These Guys/Gals Lifetime Appointments: Fed Judge Bankrupts Bay Area Town

Filed under: General — WLS @ 5:52 pm

Posted by WLS:

United States District Judge Vaughn Walker, a long-time judicial curiosity, has issued a judgment in favor of an aggrieved landowner in the amount of $36.8 million dollars, and against the City of Half Moon Bay.

That’s the City of Half Moon Bay, population 12,300.

ANNUAL municipal operating budget of $10.2 million.

Amount needed to pay judgment — $3000 for every man, woman, and child living in Half Moon Bay.

I suspect there may be a few less than 12,300 living there in the days and weeks ahead. 

The City’s conduct:  apparently its design of a drainage system caused the landowners property to be classified as “wetlands” under California’s environmental laws, meaning that he was precluded from developing condos.

Yeah – the land he acquired for $1 million.

The City of Half Moon Bay and its taxpayers must now pay him $36.8 million for that same land. 

Oh yeah — the Hon. Vaughn Walker called the city’s expert witnesses “uninformed” and their opinions on topography and drainage “baseless.”

I’m sure his A.B. degree from the Univ. of Mich. was in civil engineering.

31 Responses to “Sometimes Even I Wonder Why We Give These Guys/Gals Lifetime Appointments: Fed Judge Bankrupts Bay Area Town”

  1. Good for him. Maybe the state will think twice about rendering people’s property worthless with idiotic environmental regulations after getting socked with a few judgments like this. And maybe voters will think twice about approving them when they have to pay the bills for the consequences of their “green” fetish.

    CTD (27ea98)

  2. My layman’s knowledge makes me question how the landowner could have a valid claim. The wetlands were created long before he bought the property (perhaps the reason he was able to buy the property for such a low price) and he presumably bought the property aware of the ‘city-made wetlands’ (the city didn’t hide what was done and any non-nitwit developer knows to check the property for environmental issues before writing a check as the current owners can be tagged with cleaning up violations that preceded their ownership), and since man-made or not, wetlands can’t be developed into much of anything, how does he get to stake a claim for losing value that he never had in the first place?

    And it’s interesting that a SF judge ruled in favor of a private developer.

    stevesturm (d3e296)

  3. My favorite part of this story was the lamentations by the current city council that none of them had been involved back when the city seized this property by creating a wetland.

    Were they powerless to work with the developer, who was wronged? Did they not reach out to him in recognition that he had been done wrong? No. They sat back like all tyrannical local councils (read all of them)and forced the developer to invest many thousands more in legal services with no assurance of victory.

    Screw Half Moon Bay. I hope they enjoy the most expensive wetlands area in these United States.

    Ed (90cbd4)

  4. I wonder what law he sued under to get into federal court. And the basis for the monetary judgment. I’m speculating that it is a diversity case and the rule of decision is California law. In which case I agree with the previous commenters who think the city got what it deserved. Only in California could you get “fair market value” to equal “projected profit”.

    nk (09a321)

  5. What? no whining about “activist judges”? Where is the outrage?????!!!!

    Who knows what really happened in this case. On the face of it of course sounds like another con-man got his with some help from a sympathetic man in power. But maybe there is more to it??

    EdWood (be1329)

  6. The trajedy is that its the 12,300 innocent citizens of the small town that are going to take it in the ass so this idiot judge can make a point.

    How the hell can a developer claim $35+ million in damages for property he purchased for $1 million?

    Its asinine.

    And so is Walker. He’s an idiot — and he’s a GOP appointee. But we (those of us practicing in the general vicinity at the time of his appointment) knew he was an idiot. He’s only gotten worse as the years have gone on. He typical of the “best” judicial candidates the GOP can find in San Francisco.

    WLS (dfa1f1)

  7. This is why I voted against the ballot initiative last year which would have prohibited local governments from “damaging” property by regulating it, unless they paid for it.

    It would have bankrupted the entire state.

    aphrael (db0b5a)

  8. aphrael #7…
    Don’t worry, the state is bankrupting itself quite nicely without your vote (what the state and local gov’t is allowed to do under imminent domaine is a crime – particularly enviro takings);

    But, this pales in comparison to the hundreds of millions (or did it total out to billions?) that a Fed Judge cost the citizens of Kansas City and environs over providing equal facilities to school children – and their academic performance decreased.

    Now that was an argument for judicial term limits.

    Another Drew (758608)

  9. I am not familiar with the details of the Half Moon Bay case, but over a decade ago, there was a case where the city of Thousand Oaks deliberately redirected drainage to prevent development of a parcel that they’d already approved for development. Turned into a very ugly lawsuit that revealed a lot of dishonest shenanigans by the city.

    SPQR (26be8b)

  10. #9 Exactly, did the city pull some shenanaigans or did this guy buy a wetland and then work the system for a big payout?

    EdWood (10c39e)

  11. Ed, the parcel wasn’t a wetland until after the city redirected drainage and created one. And that occurred after the developer had not only purchased but gotten preliminary approvals from the city for development.

    SPQR (26be8b)

  12. Here’s the opinion. It’s an inverse condemnation claim with pendent state claims. Happy reading, everybody.

    nk (09a321)

  13. BTW, link to the opinion thanks to sfgate. 😉

    nk (09a321)

  14. If SPQR has the facts correct, then the town got what it deserved. That said does not the town have sovereign immunity and therefore be basically judgment proof?

    cubanbob (90591f)

  15. Cubanbob, my comment did not describe the Half Moon Bay situation.

    SPQR (26be8b)

  16. That there was a judgment against it means that so far it has been determined that it does not have sovereign immunity. It would not under a Fifth Amendment “taking” in any case. The Fifth Amendment is an exception to sovereign immunity. As for executing the judgment, I look forward to a levy on town hall and the police and fire stations, and garnishment of its tax revenues (unlikely).

    nk (09a321)

  17. If there’s any real injustice here, it’s that the relatively poor local government is getting zapped rather than the state government. Presumably, given a choice the local government would probably either grant a waiver to let the owner develop the land, or remove the offending drainage system and let the land return to its natural state–but I’m guessing the State of California won’t let them. The locality is paying the price for the contempt in which state and federal officials have for the Just Compensation Clause of the Fifth Amendment.

    M. Scott Eiland (f358c7)

  18. The memorandum opinion in the Half Moon Bay case is interesting, WLS, because where he calls the opinion of the city’s experts’ “baseless”, he then spends quite a few lines explaining why – asserting that they had no factual basis for their opinion about the drainage of the property.

    SPQR (26be8b)

  19. I am glad this was not one of my claims.

    JD (00210f)

  20. On the other hand, skimming the opinion makes it rather clear that the judge viewed the city government’s conduct as negligent and obstructionist (if not outright malicious towards the property owner)–the local citizens may be largely blameless, but the local officials should be sued within an inch of their lives by their constituents for bungling this situation so badly.

    M. Scott Eiland (f358c7)

  21. Reading through the opinion linked by NK, I fail to find any reason to be outraged at the judge’s ruling. Of course, lacking the transcript, I can only assume that the judge correctly describes the evidence. The judge’s conclusion that the city – through its contractors constructing the storm drain system and its failure to maintain the drains – caused the property to become undevelopable wetlands seems to have a foundation. Why the city should not be liable under an inverse condemnation theory is not apparent to me but its not my area of law. Once there, and if the land is valued at $36mil, then that’s that.

    SPQR (26be8b)

  22. “But we (those of us practicing in the general vicinity at the time of his appointment) knew he was an idiot. He’s only gotten worse as the years have gone on.” yeah, and why wouldnt he get worse? like professors with tenure in academia, its nearly impossible to remove people with life time appointments. its way past time to try another course, like maybe 5 or 10 year contracts with peer review/confirmation hearings to keep their job. the notion that that life time appointments are required to keep politics/ influence out of the process is laughable.

    james conrad (7cd809)

  23. Yeah, it was shenanigans. A road cut does not a vernal pool make. They should have made sure to keep the one wetland, negotiated coastal access, maybe even work in some sort of open space setback off the beach if possible and let the developers build their condos and get their money.

    Who knows what all the motivations were. I used to live in Isla Vista, CA renting a room from one of the city council(?) members and the stories of insane rancor and savagery that he told me about fights over the open spaces around that town were depressing and horrific.

    EdWood (559428)

  24. The bizarre practical effect is this: since the city can’t raise either property or sales taxes to pay the damages (which are three times its annual revenue, recall), its choices will be to:

    (a) borrow the money and hope to refinance the bonds forever;

    (b) shut down all non-essential services for a decade or more;

    (c) go bankrupt and inflict the problem on the state.

    in the end, I suspect it will choose option (c).

    aphrael (db0b5a)

  25. Aphrael, an interesting side issue in the case is that Half Moon Bay had assessed the property more than a million and a half to build a sewage treatment plant that the property could not use as the city denied building permits.

    SPQR (26be8b)

  26. Oh, and another point – the city’s own expert witness on valuation of the property presented a $20million dollar value. Which is not any more affordable for the city.

    SPQR (26be8b)

  27. SPQR: the city assessed $1.5 million for sewage treatment? that’s bizarre.

    the city council needs to be thrown out.

    aphrael (db0b5a)

  28. if they can’t get the 9th circuit to whittle it down, they can always go bankrupt and reincorporate as south pacifica. vaughn walker, wasn’t he the same judge who ruled that the plaintiffs could put on a case against the spying telcos?

    assistant devil's advocate (bff5d8)

  29. There are those in the U.S. FISH AND WILDLIFE SERVICE who would declare DEATH VALLEY a WETLAND but 36 million is WAY TOO MUCH the judges ruling should be drasticly reduced to $1:00

    krazy kagu (b3aac5)

  30. WLS, I think this was a pretty weak post. I read most of the opinion and didn’t see anything obviously crazy. Your main objection seems to be that this judgement will be difficult for Half Moon Bay to pay. However that is legally irrelevant as is the purchase price of the property in question. The judge’s explanation for discounting the testimony of the city’s experts seems reasonable. Do you have some specific objection to the opinion independent of your dislike for Walker?

    Btw cases like this are why liability insurance was invented. Does Half Moon Bay have any?

    James B. Shearer (fc887e)

  31. krazy kagu, you know the plaintiff’s property was only worth a dollar how?

    SPQR (26be8b)


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