Billionaire Khosla Spars With Surfers Over Pacific Beach

July 16, 2014

Billionaire Vinod Khosla, the co-founder of Sun Microsystems Inc., made his last stand to block public access to a northern California beach on a 56-acre plot he bought for $32.5 million.

Khosla, who started his own venture capital firm a decade ago, is fighting a lawsuit brought in state court by the nonprofit Surfrider Foundation, which describes its mission as “the protection and enjoyment of oceans, waves and beaches through a powerful activist network.”

The group claims that by locking a gate on a beach access road about 33 miles (53 kilometers) south of San Francisco, Khosla is effectively engaged in beach development without the permit required by the California Coastal Act. Surfrider is seeking fines of as much as $15,000 a day since October 2010, or about $20 million to date.

Today, lawyers for the foundation and for the Indian-born businessman squared off in final arguments before Superior Court Judge Barbara J. Mallach in Redwood City following a nonjury trial.

“How do you force Mr. Khosla to comply with the law?” Joseph Cotchett, a lawyer for Surfrider, asked the judge. “Somehow, somewhere justice has to rain down on this individual, Mr. Khosla, and go to the Coastal Commission and unlock that gate,” he said. Cotchett then invoked U.S. PresidentRonald Reagan’s plea to Mikhail Gorbachev to tear down the Berlin wall. “Take off that lock, Mr. Khosla! If not, you’re going to pay a fine.”

Constitutional Right

Khosla, whose Khosla Ventures LLC has invested in dozens of alternative-energy startups, argues he has a constitutional right to exclude the public from private property.

“Repainting a billboard or maintaining a fence or gate” that have been at the beach since the 1950s don’t constitute development and are exempt from state permitting requirements, he said in a court filing.

“My client’s property is not a state park,” Jeffrey E. Essner, a lawyer for Khosla, told the judge. Essner argued that the county and state Coastal Commission’s “leveraging” of public access in exchange for construction permits, along with the Surfrider lawsuit, together amount to “coercion and extortion” forbidden by legal precedent.

“The threat of an activist organization to impose tens of millions of dollars in fines” for protecting private property is “the type of blackmail and extortion that the U.S. Supreme Court has found unconstitutional,” Essner said... (To read the entire article, please click HERE)