10 • 14 • 2016

Khosla Comes Out Swinging: New Lawsuit filed against CCC, SLC and County by Martin’s Beach LLC

By emazzarella

A rich man recently filed a “rich” lawsuit in California.

On September 30th, Martins Beach 1, LLC and Martins Beach 2, LLC  (legal entities owned by billionaire venture capitalist Vinod Khosla) filed suit in state court against the California Coastal Commission, the State Lands Commission and the County of San Mateo.  Khosla also included each Coastal Commissioner and each State Land Commissioner named in their individual and official capacities, and he included Director of the San Mateo Planning and Building Deparment Steve Monowitz as a target in the same manner. The lawsuit alleges many misleading constitutional law claims that vilify government agencies, legislators and officials who have merely worked to preserve public access to this treasured community beach. 

The remarkable lawsuit claims that these government officials “coerced” and “harassed” Khosla to cede his private property rights and that he experienced “uniquely disfavored treatment”. Perhaps his strategy with this lawsuit is to intimidate these public servants from carrying out their duties to act in the public interest.  Or perhaps Khosla is “grasping at straws” now that he has two lawsuit judgments against him, state legislation intending to find a way to open access at Martin’s Beach, and a general public relations crisis.

In addition to the successful lawsuits by Surfrider Foundation and Friends of Martin’s Beach to require access, the State Lands Commission has been directed by the Governor and State Legislature by SB 968 to enter into negotiations with Khosla to try to facilitate an easement to the public beach at Martin's Beach, and consider pursuit of eminent domain if negotiations are not successful. After nearly two years, negotiations have clearly not been successful, which leaves eminent domain (the option of last resort) as the logical next available option on the table. Also of note, the California Coastal Commission has been investigating historical public use of and access to Martin's Beach. If the agency finds it has enough information to make the case, it could opt to recognize and protect prescriptive rights that may exist.

The lawsuit complaint goes through the history of Martin’s Beach, including Khosla’s refusal to apply for a Coastal Development Permit (“CDP”). The complaint states that the previous owners, the Deeney’s, were never required to obtain a permit for their operation of public access to the beach - this is correct, because there was not a “change in intensity of use” which triggers a requirement for a CDP under the Coastal Act, as there has been under Khosla's ownership. Namely, closing off public access to the beach requires the Coastal Commission to approve or deny such action.  Khosla goes on to state how he was treated differently than the Deeney family.  This is true because he acted very differently – with total disregard for the public’s right to access and enjoy the beach that was part of the community’s history and current livelihood.  To allege unfair treatment is absurd; Khosla is merely being asked by the County, State Lands Commission and Coastal Commission to follow the law and honor the beach access rights of California citizens.

Additionally, Khosla and his attorneys allege that he has sought to exhaust administrative remedies by requesting an administrative hearing; however, the only thing that Khosla and his attorneys have sought is an enforcement action by the County and CCC, as pointed out in their brief.  The County, Coastal Commission and even the court have told Khosla various times that he must file an application for a Coastal Development Permit and that there will be a hearing on that application.  Khosla staunchly refuses to do so and then claims that he has not been afforded due process. Khosla complains that the Sheriff and County continue to refuse to enforce trespass laws on the Martin’s Beach Road – this is because the order in the Surfrider Foundation v. Martin’s Beach LLC case required that the road be open to the public (just as it was in the time that the Deeney’s owned the property).  Surfrider’s case has been appealed by Khosla, but the order is in effect that Martin’s Beach access be open to the public.

After expounding upon the factual background of the issue with a flair for revisionist history, Khosla’s attorney team alleged several formal causes of action in the complaint, including violations by the agencies of the Equal Protection Clauses of the state and federal constitutions, violations of constitutional rights under Section 1983, and other procedural due process claims and, of course, takings claims.  The complaint also challenges Senate Bill 968 (codified as Public Resources Code Section 6213.5) for its specificity and as unconstitutional under federal and state law.  It also challenges the 2014 law as a “Bill of Attainder” or punitive measure enacted with pretext for discriminatory conduct.  Khosla alleges that he is a “class of one” who has intentionally been treated differently since he “will not cede a portion of their private property for a public access easement”.  It is Surfrider’s analysis that these claims are false and misleading. Khosla’s actions have set him apart as this “class of one” and the agencies are responding to Khosla’s illegal actions in a manner to rectify his wrongdoing.

Surfrider Foundation has confidence that the agencies will see through this strong-arm attempt and continue their valiant efforts to protect public access to public trust resources.  We will continue to support the agencies in defending against this unfounded lawsuit and in their directive to protect public trust resources and coastal access for all Californians.