Wednesday, December 19, 2007
HMB City Council votes to fight
At Tuesday night’s meeting, the Half Moon Bay City Council voted unanimously to appeal the Yamagiwa decision and introduced its new attorneys for the appeal: Orrick, Herrington & Sutcliffe of San Francisco. While the decision itself was not terribly surprising, the County Times reported that the decision received “mixed support from the audience”. Coastsider was there and will have gavel-to-gavel video of the meeting online as soon as possible.
“We believe the judge’s decision is erroneous and contains many grounds for appeal ... and we are confident in our position,” added John Knox, a partner with Orrick, Herrington & Sutcliffe.
Knox would not say what those grounds of appeal might be. He did say that, typically, an appeals case will proceed differently from the case Walker heard, which was filled with technical evidence and expert testimony concerning the presence of wetlands on the Beachwood site and the city’s role in dealing with them. Heard by a three-judge panel, this case will look at whether Walker correctly applied the law or consider errors made by the judge — legal, procedural or otherwise, according to Knox.
Walker has yet to issue a final document in the case, also called a judgment, which will outline pre- and post-judgment interest Keenan’s law firm is hoping Half Moon Bay will pay. A separate document, due in to Walker by Dec. 28, will enumerate the legal fees the city will have to pay if it does not appeal.
It’s still unclear whether the city will have to post a bond to appeal or how much money the city will have to borrow to fund the effort. The council voted to hired investment banker Piper Jaffray to assist with financing.
Comments
Mr. Gossett,
Thank you for your response, and for asking if I can offer any options, as well. I see no relevance in off-topic issues such as overall City plans, nor any value in reopening a Pandora’s Box with respect to the successfully resolved Ailanto settlement for the development of Pacific Ridge. Here are some thoughts on the current situation:
As a chess master and as a consultant, I examine both strategic and tactical possibilities, and I have frequently dealt with being in disadvantageous situations, or with advising clients who were in such situations. Not all disadvantageous situations end badly.
It was obvious from the moment that the judgment was announced that the City would have to appeal, for both strategic and tactical reasons: strategic, because an appeal will afford the City the opportunity to have the facts assessed more carefully than a single individual (Judge Walker) may have been able to do, and to have the law more carefully considered from angles perhaps not carefully considered at trial; and tactical, because the City cannot possibly commit to pay the trustee who handles Mr. Keenan’s interest the amount of money that the Court has awarded, and because the City must create both space and time in which to negotiate if there are to be negotiations at all, and in which to develop the necessary plans for how to pursue an appeal, as well as to assess and hunt for resources in the current situation.
Less than a decade ago, I actually spent time in Judge Walker’s courtroom, and was briefed by attorneys on the wide range of possible outcomes at trial there, so I have had a previous opportunity to consider some of the issues that exist here today. Happily, the much smaller case that I was helping to manage was successfully resolved without ever needing to be appealed, but I did become aware that this is something that has happened in response to some of his decisions, and that more often than for other (perhaps less bold or wide-ranging) federal judges, he is sometimes reversed by higher Courts.
Frankly, the City has been in this situation before, in that Mr. Keenan’s trustee won a decision in state court some years ago, which the City and the Coastal Commission won a reversal of at the appellate level, so this is not unprecedented.
As I understand it, the City did, in fact, offer as many permits to build homes on parcels within the Beachwood subdivision as the existing ground conditions would allow, and Mr. Keenan’s trustee refused, choosing an “all or nothing” option, and currently, I would say that she has for the moment won a symbolic victory, in that she has obtained an award that exceeds the City’s ability to provide it.
I do not see how the resolution of the Beachwood drama will come about yet, but it is early in my analysis, and I am still coming to understand more about various facets of the position on the board before us today. Rest assured, though: a lot of very smart and experienced people will be examining this matter, and numerous possible options will be developed before they need to be winnowed down into the few best choices for all concerned.
And as Barry Parr writes above, the City holds all the cards, in the sense that they can declare bankruptcy at any point, because it is clear that this award far exceeds the City’s ability to pay, and it is absolutely unimaginable to me that City voters would agree to kick in decades of additional taxes, fees, or other assessments to meet the award. Mr. Keenan’s trustee will inevitably be faced with finding a compromise, or choosing between two versions of simple victory: the symbolism of the decision by Judge Walker finding the City to blame for the wetlands that have been delineated on the Beachwood parcel, or the pyrrhic victory of seeing the City dissolved, and no way to collect the judgement, and still no way to build where the law does not allow.
Along the way towards any possible compromise, Mr. Keenan’s trustee also needs to consider that moneys spent by the City that go to anyone other than to her trustor are moneys that are gone forever; therefore, I recommend to Ms. Yamigawa that she seriously consider stipulating to the Court a waiver to the potential requirement of posting a 10% bond. I am told that such a bond would cost the City something like 1/3 to 1/2 of a million dollars, and that is money that she must certainly prefer to get if bankruptcy limits the amount to be collected, or if a settlement of any sort is reached prior to the two extremes of either bankruptcy or reversal on appeal.
Darin Boville started a topic about the appeal on Talkabout see http://talkabout.hmbreview.com/topic.php?c=1&d;=&o;=&t=1073#comment_form
I am very interested in getting the maximum input from coastsiders regarding the development of options for Half Moon Bay and its citizens.
Time is of the essence, and resources are being depleted as we chat. If you have constructive ideas, it could help us all.
terry gossett moss beach