HMB lawyers issue city’s statement on AB 1991

Press release

Posted by on Tue, April 15, 2008

We just received the following statement from Half Moon Bay’s attorneys via email. My initial reaction is in the comments. Let’s hear yours.

Statement by Half Moon Bay

The City of Half Moon Bay is faced with two options, and only two options - either AB 1991 passes or the City must pay Mr. Keenan $18 million, a cost which will seriously burden the City and its citizens.  Although people may disagree with the specific terms of the settlement, it was the best the City was able to negotiate. Now is not the time to ask what might have been.  The combination of specific facts of the Beachwood litigation are unique and, as a result, AB 1991, the legislation approving development on Beachwood and Glencree, would not set a precedent for any future exceptions to California environmental regulations because:

1.  The wetland conditions on the Beachwood property are the man-made result of a half-completed grading and drainage improvements undertaken by the City of Half Moon Bay (Exhibit I); and

2.  Development on the Beachwood property was always part of the City of Half Moon Bay’s growth plan and vesting tentative maps were approved in 1990 after an environmental review by the City that found no significant impact on the environment (development of the pre-existing natural wetlands in the southeast corner of Beachwood was prevented, as it is under this agreement), before delays caused wetland conditions to develop (Exhibit II); and

3.  The City of Half Moon Bay faced a $41.1 million judgment concerning Beachwood that could have bankrupted the city and forced cutbacks in vital city services (Exhibit III).

Regarding the inclusion of the 12-acre Glencree parcel that is adjacent to Beachwood, the developer required the inclusion of that parcel in the settlement agreement.  In addition, it should be noted that Glencree also had been previously approved for development, at approximately the same time as Beachwood with no adverse environmental impact.  From current observations, there appear to be wetland conditions on Glencree that one can reasonably assume developed after the construction activities by the City in the 1980s.  (See also Sierra Club statement that "even Judge Walker acknowledges the Glencree wetlands!")

All three facts must be present for the California Legislature to ever use this legislation as precedent for permitting development on wetlands, whether naturally-occurring or manmade.  Only having one or two of the criteria present would not be sufficient.

For example, if a wetland is manmade but the other two facts are not present, it would not meet the requirement for legislative action.  If a city has a vesting tentative map that is approved for a property and wetlands later occur on that property, that would not meet the requirement for state legislation permitting the development if the city does not also face a court judgment that would result in the city’s bankruptcy.  If a court enters a judgment for an amount that forces a city into bankruptcy because of manmade wetlands created by actions taken by a city, such a situation would not meet the requirement for legislation if a vesting tentative map for the property was never issued.

In order for this legislation to be a precedent, all three specific facts would have to be present.

Orrick, Herrington & Sutcliffe LLP
Columbia Center
1152 15th Street, N.W.
Washington, D.C. 20005-1706

Contacts: Lanny J. Davis 301-928-7532 and Josh Galper 202-744-4047

It seems to me that when you hire a high-priced law firm, you get someone who is sufficiently familiar with elementary logic to get a good score on the LSAT’s.

Just a cursory reading exposes these two logical flaws:

1. Yes, the legislature has only two options. The only reason why the legislature is presented with this stark choice is that the city of Half Moon Bay and Messrs Orrick, et al., structured it that way. That is not our problem—or Orrick’s problem—that is Half Moon Bay’s problem.

2. When attorneys use the word “precedent” they mean something a lot more formal than what we mean in everyday conversation. There is no question that AB1991 establishes a precedent for using the legislature for getting around inconvenient state environmental laws.

For example, if you publicly perform sex for money, you don’t create for yourself a legally-binding requirement to do so in the future, but you can expect more offers to do so in the future. That is called a “precedent”.

Yup. AB 1991 would go into the developer’s primer on how to get around Coastal Act regulations—where it would join past such circumventions. People like Wan on the Coastal Commission clearly understand this. One is left to wonder if this law firm has any experience at all with California coastal controversies or if they just used a boilerplate snow job in the message trying to justify the naive required legislation.

Love the justification for Glencree: “Regarding the inclusion of the 12-acre Glencree parcel that is adjacent to Beachwood, the developer required the inclusion of that parcel in the settlement agreement.” Looks more and more like the mandate to the attorneys was: “get a fast settlement, any settlement.” People outside HMB should remember this kind of repeated incompetent screwup when the calls to annex to the city come up.

Carl May

Carl May

If we take the attorney at his word, AB1991 will benefit the citizens of HMB and the developer only.

I am opposed to any state law that cannot be applied equally to all Californians.

Legislators need to write laws that cover all citizens and not get involved in individual legal cases. Otherwise we’ll start the short march to the Law of Man rather than the Rule of Law.

The City Council’s lawyers are just being trotted out to say what their client wants them to say: “This will not set a precedent because we say say it won’t.”

What is the purpose of statewide environmental laws if they can be overridden to facilitate a special deal between one town and one developer?

What’s to stop the next version of Gene Mullin to do the same for Santa Cruz, Santa Barbara, Santa Monica, etc? Or some other special case for Half Moon Bay that may arise in the future. The City has other lawsuits pending folks.

The lawyers’ argument is so pathetic I cannot believe they would call attention to it by issuing a press release. But then again, they are just following orders.

The letter was signed by Lanny J. Davis of the Washington firm Orrick Herrington etc. of Washington D.C. Isn’t this the same talking head, Clinton (both Bill and Hill) supporter we know from cable TV news? Smart guy, good looking, glib? Whether he is THE Lanny Davis or not, I have to wonder why the city of Half Moon Bay got hooked up with a high-powered Beltway law firm that seems to have done no more for its hourly fee than advise the city to cave in to an agreement that would overturn the laws of the State of California and give the plaintiff an enormous profit over his investment.

I don’t know what to think about this. What I do know is the longer HMB’s settlement with Keenan is exposed to the light the more it stinks.

Lanny J. Davis is in fact the big Clinton supporter you mention.

Maybe we should write to Hillary Clinton asking her why one of her biggest supporters is helping to gut California’s environmental laws in order to benefit a wealthy right-wing developer.

One more reason to recoil in horror from the Clintons. Go Obama.

WTF is HMB doing with a Washington DC law firm in this case?!?! This case is about local and state issues, not federal. What could possibly be the reason for this? Unless of course there is even more to all of this that we don’t know.

Not necessarily all that odd.

According to Wikipedia: “Orrick, Herrington & Sutcliffe LLP is an international law firm founded in San Francisco. Orrick traces its roots back to 1863, making it the oldest continuously-operating law firm in San Francisco, and the second-oldest privately-held company in San Francisco after Levi Strauss.”

However, that doesn’t answer the question about why the release came out of DC and the spinners are located there as well. I can’t imagine Lanny Davis’s hourly rate for answering FAQ’s!

Orrick is headquartered in S.F.  The ‘Political’ Practice Group is located in D.C. Hourly rate is equal to one month mortgage payment.

Ken Johnson


I agree that Obama should go – somewhere else! After his performance last week, his new book will be titled “The Audacity of Being Questioned”. I thought he was going to cry - but that would wait for the 527 groups if he is the Dem Nominee. He will make “Bambi Meets Godzilla” (1969) look like a full length feature film.

Ken Johnson

Thanks for the clarification that Orrick is actually a CA firm. It makes a bit more sense now. I still wonder that a firm with this high a reputation thought an appeal was a bad idea. I would think they could have known that the Coastal Commission AND the Attorney General were willing to back HMB.


Orrick represents their client - unfortunately, ‘we’ are not their client. The HMB City Council majority is their client. 

Orrick could have advised the City Council to pursue the Appeal and reject the Settlement concept! The advice is bound up in confidentiality.

I wrote back on 30 Nov 08 “The list of who might join on the City’s side and amicus curiae briefs would / will be interesting.”

There is now a clear written record that the City Council majority knew that the Coastal Commission AND the Attorney General’s office were willing to back HMB on an Appeal.

”The Commission was prepared to assist the city with an appeal to the 9th Circuit, and, along with the Attorney General’s office, made that offer known to the City.”

The City Council majority chose to make them an enemy! And they are using our checking account to fight another loosing battle against those who should have been recognized as friends.

Ken Johnson

Comment 13
Mon, April 21, 2008 10:07pm
Ken King
All my comments

Steve Hyman, fronting as the PR guy for the HMB council, touts the settlement as a financial break for the city because it saved us from the time and expense of appealing the $41 million judgment, which the Great Minds on that side of the Divide tell us was too risky to pursue.

So instead of the risk of lawyers’ costs for appealing Judge Walker’s brash decision, we’ve got the Orrick squad of lobbyists stocking the halls of the state capitol at $3000 / billable hour; this isn’t as risky as appealing, Steve says, because if AB 1991 fails, the “upset price” $18 million payable at 6% is a significant reduction over the $41 million, right?

As a realtor, Steve has to adhere to truth in lending laws that inform applicants for home loans about the true cost of those loans over the duration of the mortgage. The $18 million paid annually at $1.25 million will end up costng not less than $50 million. That sounds suspiciously close to the amount of the judgment after all, doesn’t it?

At the January workshop on Beachwood, Orrick lawyer John Knox informed residents that that amount was virtually uncollectable, and that there had never been a circumstance where a private party could extract an amount from a city that would put its day to day operations at risk. So what has Knox done since uttering those profundities? He’s helped the city arrange to securitize their debt through a bond in order to make it collectable.

Steve and the old guard love to complain about the city’s legal fees up until now. It’s unimaginable Orrick’s cost for these “services” is any less than what the appeal of a very tendentious decision would have been, but the difference is that we’re left with the Walker decision on the record and the dilemma of AB 1991 or paying Keenan off until his grandchildren are middle aged. Such a deal.