Billionaire Khosla Loses to Surfers in Beach Access Fight

September 24, 2014

Billionaire Vinod Khosla, the co-founder of Sun Microsystems Inc., lost his bid to block the public from using a northern California beach on a 53-acre plot he bought for $32.5 million.

In a case that has added to an intensifying debate about the influence of wealth in the San Francisco Bay area’s technology sector, Khosla was told in a tentative ruling by a state judge today that he must allow access to the popular surfing beach unless he obtains a coastal development permit.

Secluded Martins Beach, which lies about 33 miles (53 kilometers) south of San Francisco, is located in San Mateo County, on the northern edge of Silicon Valley, where the growth of the technology industry and the riches it has generated have created rifts that permeated the litigation. Khosla accused the group that brought the lawsuit, the Surfrider Foundation, of invoking the “cynical rhetoric of class warfare.”

The Surfrider Foundation, which says its mission is to defend the enjoyment of beaches through an activist network, has demonstrated in protest at the gate. The organization’s website features a video about the case to highlight its beach access battles across the U.S.

Surfrider claimed that Khosla’s use of a locked gate on an access road to the beach requires a permit under the California Coastal Act. California Superior Court Judge Barbara J. Mallach in Redwood City agreed in a 16-page ruling issued today following a nonjury trial that ended in July. Khosla has 15 days to file an objection, which the judge will consider before issuing a final ruling.

‘Good Faith’

Mallach declined to fine Khosla for violating the permitting law, saying his conduct was “in good faith.” Surfrider sought a penalty of as much as $15,000 a day since October 2010, more than $20 million.

“We are disappointed with the court’s decision and will consider our options for appealing the ruling,” Dori Yob, a lawyer for Khosla, said in an e-mail. “We will continue to seek protection of the constitutional rights of private property owners that are guaranteed by the US and California Constitutions and that have long been upheld by the United States and California Supreme Courts.”

Khosla, who founded Khosla Ventures LLC a decade ago and has invested in dozens of alternative-energy startups, argued he has a constitutional right to exclude the public from private property. Jeffrey E. Essner, a lawyer for Khosla, told Mallach in July that the gate at issue has been at the beach since the 1950s, and maintaining it is exempt from state permitting requirements.

The threat of tens of millions of dollars in fines from an “activist organization” for protecting private property is “the type of blackmail and extortion that the U.S. Supreme Court has found unconstitutional,” Essner told Mallach in July.

Surfrider traces the roots of the controversy to 2008 when Khosla formed two entities, Martins Beach 1 LLC and Martins Beach 2 LLC, to buy the property. Public access to the beach on Martins Road, which runs through the property, was gradually restricted and finally enforced by security guards hired in 2013, according to court documents filed by the organization... (To read the entire article, please click HERE)