Back in 2007, the U.S. District Court in Northern California filed its decision in Yamagiwa v. City of Half Moon Bay, awarding $36,795,000 to property owners whose land the city flooded and then forbade its development on the grounds that it was now a wetland, don’t you see. No, we are not making this up. You can check it out for yourself at Yamagiwa v. City of Half Moon Bay (N.D.Cal. 2007) 523 F.Supp.2d 1036. For our earlier post discussing this case, see Half Moon Base Case Settles, dated April 3, 2008.
After the expectable handwringing on the part of the city, and its dire predictions of fiscal gloom and doom, the case settled. For a discussion of the case and the settlement see David P. Hamilton, Treading Water, California Lawyer, May 2008, at p. 25. In a nutshell, the city promised to seek legislative aid in the form of relaxation of the statutory scheme under which it purported to be acting, and allow the developer to proceed. Failing that, the city promised to pay $18,000,000 in damages. Predictably, the enviros put up a huge lobbying fight and persuaded the California Legislature to deny the city’s request.
Now, the settlement has been completed. The city paid the $18,000,000 and got title to the subject property. Also, the owner retained water rights that though unusable by him since he no longer owns the subject property, are marketable and estimated to be worth $3 to $5 million.
So ends a saga of municipal rapaciousness and unspeakable chutzpa. Why chutzpa? Because when the owners filed their inverse condemnation suit, they did so in state court, as required by the U.S. Supreme Court’s Williamson County case. But the city had the temerity to remove the case to federal court, try it there with all sorts of depositions, and other discovery that consumed years, plus a long trial, at the end of which (evidently surmising that its case was not persuasive) the city announced that the federal court lacked jurisdiction and the case should be remanded to the state court where it would begin all over again. The federal judge was not amused, rejected the city’s suggestion and with saintly restraint refrained from imposing sanctions on the city.
The smiling lawyer for the owners is Edward Burg of Manatt, Phelps & Phillips, in Los Angeles. Full disclosure: your faithful servant is of counsel to that law firm.