Khosla legal battles over beach access reignite as lawmakers push for acquisition

The legal clashes over beach access at the site of venture capitalist Vinod Khosla’s property have resumed, with two separate cases being heard in June.

Attorneys for Khosla appeared before a panel of state appellate justices in San Francisco on June 15 to present arguments related to the public-access dispute. A hearing for a related case will be held June 23, and a third is waiting to be heard.

The legal fight concerns Khosla’s property near Half Moon Bay, a coastal city 30 miles south of San Francisco.

On June 15, the justices heard arguments from attorneys representing the nonprofit Surfrider Foundation and the California Coastal Commission. Representing Khosla was a high-profile Washington attorney, Erin Murphy, who contested the constitutionality of a court order that barred the venture capitalist from blocking public access to what’s known as Martins Beach until the courts determine whether he needed a permit to do so.

In 2014, the Surfrider Foundation sued the two limited-liability companies Khosla set up that legally own the 89-acre coastal parcel. The foundation argued that when the owner closed the gate that enabled access to the beach, he violated the California Coastal Act by engaging in development without the necessary permit.

The foundation won the case, but attorneys for Khosla appealed the decision, arguing that closing the gate to public access did not constitute development, no permit was needed, and the court’s order was an unconstitutional violation of Khosla’s private-property rights.

“(The question is) whether the coastal act requires private owners to obtain permits to prevent public access,” said Murphy, who has successfully argued before the U.S. Supreme Court. Murphy said the act was not intended to interfere with the rights of private-property owners. Khosla, founder of the venture firm Khosla Ventures, did not appear in court.

Deputy Attorney General Joel Jacobs, arguing on behalf of the Coastal Commission, countered that the question was not so black and white.

“This notion that if one has fundamental rights then the government can’t regulate them, that’s not the case,” he said. He made the analogy that the Second Amendment grants citizens the right to carry a handgun but they still must obtain a permit to do so, in the same way that property owners must obtain a development permit despite having property rights.

The justices from the June 15 hearing are expected to rule in the case in coming months.

For a case that delves into the minutiae of regulatory-takings law, the lawsuit has drawn heavy media attention because it could have implications for public beach access along the California coast and because it involves one of Silicon Valley’s most influential tech luminaries.

The California Coastal Commission has been fining property owners who illegally block public beach access, and the penalties can be heavy. One Malibu couple was fined $4.2 million for refusing to remove a gate that obstructed beach access.

Two other cases related to Khosla’s property dispute are in the offing. In September, Khosla sued more than 30 individual state and county officials, citing a “concerted effort … to single out, coerce, and harass one coastal property and its owner for refusing to cede its private property rights.” The defendants have filed a motion to dismiss the case, and that effort is scheduled to be heard in U.S. District Court in Oakland on June 23.

Another case against Khosla, filed by a group called Friends of Martin’s Beach (which uses the apostrophe in “Martin’s”), was returned by an appeals court to the trial court and is scheduled for a hearing in the last week of October.

Meanwhile, as the cases work their way through the courts, State Sen. Jerry Hill — a Democrat representing a district that includes the San Francisco peninsula and northwest Silicon Valley — is pushing legislation that would set up a fund to purchase an easement across Khosla’s land. The deadline for that legislation to be passed into law is Sept. 15.

Vinod Khosla on May 12, 2014, arrives at San Mateo County Superior Court in Redwood City, California, to testify in the legal battle over public access to Martin’s Beach. Photo courtesy Reuters/Stephen Lam