NCJ - Activist must pay fees

Activist must pay fees

Local activist Bob Martel received an expensive setback this week in his ongoing battle against Pacific Lumber and its parent company, MAXXAM. The 5th Circuit Court of Appeals rejected Martel's appeal to an earlier decision in MAXXAM's favor and ordered him to pay the company legal fees of more than $110,000.

The case concerns the failure in 1988 of a savings and loan association in which MAXXAM and its chairman, Charles Hurwitz, were investors. Martel contends that Hurwitz exercised control over the company; Hurwitz denies the charges. Related cases are still pending, but the court ruled that Martel's case was "frivolous."

Martel disputes that claim, saying that the suit cost him $250,000 and took five years of research. That, he said, "doesn't actually fit the definition of frivolous."

As to how he might pay the legal fees awarded by the court, Martel said he hasn't earned "more than six thousand dollars in a year in recent memory"

MAXXAM spokesman Josh Reiss said that the corporation intends to pursue the claim.

NCJ - Order to pay attorney fees (Bob Martel)

An interesting piece of the puzzle. The genesis of Humboldt Watershed Council? A failed lawsuit, the first of many.

Order to pay attorney fees

A taxpayer and a local nonprofit group have been ordered to pay legal fees for two separate lawsuits involving Pacific Lumber and its chief stockholder, Charles Hurwitz.

In 1995, Humboldt County resident Robert Martel filed suit against Hurwitz, alleging he had defrauded the federal government of $1.6 billion in the collapse of the United Savings Association of Texas 11 years ago, according to a report in the Times-Standard. Now Martel has been ordered by U.S. District Court Judge Lynn Hughes to pay Hurwitz' $110,123 in legal fees and expenses.

Hughes ruled that Martel's suit was "abusive litigation" because Martel had based much of his suit on information garnered from newspaper reports. Hughes also said Martel, who had filed the suit as a taxpayer, lacked standing to sue on behalf of the federal government.

Neither Martel nor Hurwitz could be reached for comment.

In a separate case, the Garberville-based Environmental Protection Information Center was ordered to pay Pacific Lumber $17,731 in legal costs as a result of a June 1997 lawsuit. EPIC sued PL in March of 1995, maintaining that the California Department of Forestry should have prepared an environmental impact study before it granted the company a salvage-logging permit for spotted owl habitat now protected as part of the Headwaters Reserve.

EPIC spokesperson Kevin Bundy said U.S. District court judge Louis Bechtle dismissed the suit because EPIC "couldn't convince the court (salvage logging) would violate the endangered species act."

John A. Campbell, PL president, recently issued a statement saying PL is entitled to the court costs.

"The favorable court ruling highlighted that salvage and other logging would not cause a take of endangered species," he said. "The court ... made clear in this case that endangered species would benefit from the working relationship developed by Pacific Lumber, federal wildlife agencies and the California Department of Forestry."

Bundy said the amount EPIC must pay is a fraction of the $700,000 PL originally requested to cover fees.



This is an interesting chronology of the Pacific Lumber/Headwaters saga, complete with the high level players, and the pressure groups, big Foundations and extremist environmental groups:
This is the link to this two part series. It works most of the time.

from there you can link to PART 2.
Both are included below:

By Jon Christian Ryter September 1, 2005 NewsWithViews.com

Houston financier and corporate raider Charles Hurwitz's problems began with the collapse of a little known Texas thrift in 1988, United Savings Association of Texas—only Hurwitz's purported complicity in the collapse of the savings and loan company never surfaced until about the time his company, MCO Holdings (which changed its name in 1995 to Maxxam, Inc.) assumed Pacific Lumber Company in 1986. Once the Pacific Lumber buyout was complete Hurwitz's problems began. But not from the US government— from environmentalists.

One of Pacific Lumber's most valuable assets was a stand of 1,000-plus year old coastal redwood trees in Humboldt County—in a 6,000 acre tract of ancient redwoods in the 90,000 acre Headwaters' Forest know as the Headwaters Grove. Each of the 300 foot tall ancient giant redwoods have a commercial street value—as cut lumber—of at least $100,000. Hurwitz, who used junk bonds to finance his takeover of Pacific Lumber needed to liquidate some of the assets of the newly acquired company to pay down the debt.

Hurwitz became interested in Pacific Lumber when junk bond investment banker Drexel Burnham Lambert advised MCO that Pacific Lumber had made an overpriced offer to buy back its own stock in 1984, causing MCO to take a closer look at the company as a potential hostile takeover since Pacific was not interested in suitors. And the closer Hurwitz looked, the better Pacific Lumber looked. Finally, in October, 1985 he went after it, assuming control of the company in 1986.

Environmentalists feared Hurwitz would clear-cut the Headwaters Grove of its ancient treasures to pay for the takeover. In reality, Hurwitz already planned to sell off specific assets of Pacific Lumber to pay for the takeover—and the Headwaters Grove was not part of his thinking. However, MCO Holdings, which was extremely leveraged, still needed to generate a revenue stream, and planned to clear-cut up to a thousand acres of Pacific Lumber's expansive reserve of Douglas pines, spruce, coastal redwoods and other timber species which the company owned. Within a matter of months, Hurwitz doubled Pacific Lumber's relatively conservative lumber harvesting practices. That convinced the greens that a land-stripper had taken over the 117 year old company.

Pacific Lumber was an institution in northern California, and had been since 1869. It was the largest employer in Humboldt County, owning around 194,000 acres of prime timberland worth billions of dollars at retail. Yet, it was not as profitable as it could have been, or should have been, due to environmentalists who did everything possible to hamstring logging operations for over a decade. The constant inference of Pacific's logging operation by radical green groups made Pacific Lumber "easy pickings" for any corporate raider. When Hurwitz took it over it wasn't long before green groups like Earth First!, the Sierra Club and Greenpeace were targeting Hurwitz, who became the "scorched earth" villain.

In January 1995, Humboldt environmentalist activist Robert Martel filled a lawsuit in US District Court against Maxxam, Industries seeking $1.6 billion to cover the losses suffered by Maxxam's bankrupt S&L, United Savings Association of Texas plus an additional $4.8 billion in punitive damages on behalf of the American taxpayers. Because Martel represented neither the government nor the depositors of United Savings, there was no legal basis for his filing. But, his lawsuit opened Pandora's box. When the federal court—which should never have accepted the action in the first placed—ruled against him, Martel appealed that court's decision to the 5th Circuit Court of Appeals. The appellate court not only rejected Martel's appeal, it ordered him to pay Maxxam's legal fees of more than $110,000, saying that Martel's case was "frivolous"

In August of 1995, FDIC Chairman Ricki Tigert-Helfer filed the first of two "recovery" lawsuits in US District Court in Houston. The action, FDIC v Hurwitz, sought $250 million in damages—not from Maxxam (as MCO Holding had been renamed)—but from Hurwitz personally. When she filed her suit, Tigert-Helfer asked the Office of Thrift Management to investigate Charles Hurwitz and Maxxam for wrongdoing. In December, 1995 the Office of Thrift Management filed 13 claims against the defendants of its own lawsuit—against Hurwitz, Maxxam, two other Maxxam companies: Federated Development Company, United Financial Group (which was the parent company of United Savings), and the former and current directors of the S&L. The OTM sought $821 million in damages. The FDIC and the OTM both alleged that Hurwitz's business dealings with Drexel Burnham Lambert contributed significantly to the thrift's failure by not keeping it properly capitalized. They also alleged that Hurwitz "raided" the assets of United Savings to purchase Pacific Lumber, making Hurwitz personally liable for the $1.6 billion the OTM claims United Savings lost.

From the time the dual actions were filed by the FDIC and the OTM, Hurwitz's lawyer, Richard Keeton, was approached by various environmental groups suggesting that the government would entertain a "debt-for-trees" swap. Hurwitz would get to walk away from the FDIC and OTM charges if he agreed to allow the old stand of 300' tall redwoods in Headwaters Grove be deeded to the US government. The government would make the Headwaters redwoods part of the Six Rivers National Forest. In the early 1990s, Howard Hughes' estate engaged in a "debt for nature" swap when the estate traded some wetlands near the Los Angeles Airport to settle a tax bill owed the State of California. Several third world countries swapped land that US environmentalists thought should be protected for the debt they owed the United States. Bolivia traded tropical forests to clear their debt. Land swaps were also done with the Philippines and several other nations as well.

In February, 1997 Deputy Interior Secretary John Garamendi approached Maxxam to arrange for the acquisition of the Headwater Grove. Maxxam's general counsel, J. Kent Friedman, told the Clinton Administration official that Maxxam would consider selling the Headwater Grove to the Interior Department—but only on the condition that the government drop its FDIC lawsuit. "We want this case to go away," Friedman said.

Garamendi reported "...Hurwitz brought that to the table numerous times," but he added, he refused to intervene on Hurwitz's behalf, concluding it would be inappropriate for the Interior Department to get involved in the FDIC's business. Friedman said Maxxam raised the issue about the FDIC case because the action should never have been filed against Hurwitz who had undergone a lengthy, politically-motivated and ultimately unproved investigation by the Clinton Administration and a federal agency that violated its own rules in bringing the action. Hurwitz was not liable for the failure of United Savings because neither he nor Maxxam had controlling interest in United Financial—the holding company that had a minority interest in United Savings—therefore neither Hurwitz nor Maxxam had any legal authority to control the capital levels at the thrift.

At the time the Garamendi negotiations were underway, the Rose Foundation for Communities and the Government and several other environmentalist groups managed to convince a federal court that Pacific Lumber and a neighboring lumbering camp, Elk River Timber Company, had both violated the Endangered Species Act by logging pristine forests that sheltered the spotted owl. The federal court issued an injunction forbidding either Elk River Timber or Pacific Lumber from harvesting their land. Nine times the environmentalists filed suit in federal court. Nine times the court issued injunctions forbidding the lumber companies from cutting trees on their own land due to violations of the Endangered Species Act.

(Author's note: While I did not find documents to support my belief that Hurwitz, Friedman and Keeton were very bluntly, off-the-record, advised that they might as well sell the Headwater Grove to the environmentalists and get something for their buck because it was unlikely that, anytime in the foreseeable future, they would be able to harvest any lumber from that area since the Headwaters Forest was home to the spotted owl.)

In 1999 Hurwitz caved in and sold 10,000 acres of Headwaters Forest land to the Department of the Interior for $480 million. The deal was brokered by Sen. Diane Feinstein to preserve the old growth giant coastlal redwoods. In 2002 the FDIC dropped its 250 million action against Hurwitz when the OTM settled their $821 million case under an agreement where Hurwitz paid $206 thousand, made no admissions of wrongdoing, and agreed not to discuss the suit or the settlement.

But in his settlement, Hurwitz never agreed not to file suit against the government. He immediately sued the FDIC, by asking US District Court Judge Lynn Hughes (the presiding judge in the government's case) to award him $72 million in damages to cover his costs to fight not only the FDIC charges, but the costs associated with fighting to keep the government from seizing his redwood trees—and fighting frivolous lawsuits from the Rose Foundation, the Sierra Club, Greenpeace, Earth First! and scores of other green groups who lined up to take their best shot at Maxxam in court while Maxxam and Hurwitz were distracted with the FDIC lawsuit.

Don't miss the concuding Part 2 "whodunnit" to understand how our fine justice system really works.
© 2005 Jon C. Ryter - All Rights Reserved

By Jon Christian Ryter September 1, 2005 NewsWithViews.com

In 1999 Charles Hurwitz caved in and sold 10,000 acres of Headwaters Forest land to the Department of the Interior for $480 million. The deal was brokered by Sen. Diane Feinstein to preserve the old growth giant coastlal redwoods. In 2002 the FDIC dropped its 250 million action against Hurwitz when the OTM settled their $821 million case under an agreement where Hurwitz paid $206 thousand, made no admissions of wrongdoing, and agreed not to discuss the suit or the settlement.

But in his settlement, Hurwitz never agreed not to file suit against the government. He immediately sued the FDIC, by asking US District Court Judge Lynn Hughes (the presiding judge in the government's case) to award him $72 million in damages to cover his costs to fight not only the FDIC charges, but the costs associated with fighting to keep the government from seizing his redwood trees—and fighting frivolous lawsuits from the Rose Foundation, the Sierra Club, Greenpeace, Earth First! and scores of other green groups who lined up to take their best shot at Maxxam in court while Maxxam and Hurwitz were distracted with the FDIC lawsuit.

Hurwitz, through his lawyers, claimed that the Clinton Administration's FDIC [a] improperly funded another government agency's investigative witch hunt against Maxxam on the same matter; and, [b] his suite alleged that the Clinton Administration used bogus lawsuits in an attempt to force him to surrender over a billion dollars worth of prime coastal redwood trees to settle bogus claims against him and his company.

On Tuesday, August 23, 2005 US District Court Judge Lynn Nettleton Hughes issued his decision in FDIC v Hurwitz. It was a scathing denunciation of a government, pressured by radical environmentalist, to railroad an innocent man solely to steal his land for special interest extremists. In what is now the largest judgment against a federal agency ever awarded, Hughes ordered the FDIC to pay Hurwitz $72.3 million. In his 133-page decision, Hughes compared the federal investigations of Hurwitz and Maxxam to "...secret society of extortionists [that had practiced] craven submission [when faced with pressure from the office of the Vice President of the United States and] the green groups to cause him pain." Hughes said Hurwitz was the victim of a vindictive and politically-motivated federal agency. Hughes referred to the ordeal Hurwitz was forced to endure in terms of the Boston Tea Party, writing that "...Sam Adams would say that somebody needs to dump the FDIC's tea overboard." Hughes found, in his decision, that the FDIC, in close concert with environmental groups, sued Hurwitz to pressure him into a "debt-for-nature" swap, in effect giving the government about a billion dollars worth of trees in exchange for his supposed liability in the failure of the United Savings Association of Texas.

Paul Mason, a lobbyist and green activist for the Sierra Club summed up the view of the environmentalist movement when he noted that Judge Hughes had been hostile to the government's case against Hurwitz from the beginning. "To state that the environmental community was steering the case," Mason told the media, "would strongly overstate the influence we had with the federal government."

The question is, who's telling the truth and who's lying? That's the part of the story you won't read in your local newspaper this evening—nor will you see it on Fox News. The chronology of events is not deeply hidden. A Google search will bring you most of the headlines. A little digging will give you the rest.

For the environmentalists to even suggest that not only were they not steering the Hurwitz case, but that they hadn't engineered it by persuading Vice President Al Gore, Interior Secretary Bruce Babbitt and other bureaucrats in the Clinton Administration to run interference for them in filing a lawsuit for damages against Maxxam that would force Hurwitz to agree to a "debt-for-nature" swap to alleviate his liability in the failure of United Savings Association of Texas—when the FDIC and the Clinton Justice Department knew he was not legally culpable for the failure of the S&L.

The radical environmentalist Earth First! hatched up the scheme for the FDIC to sue Hurwitz for the failure shortly after the co-presidency of Bill and Hillary Clinton descended on Washington, DC. In the usual fashion of the green extremists, Earth First! revealed its idea in a Spring, 1993 demonstration in front of the FDIC, demanding that the government take the old-growth redwoods that belonged to Pacific Lumber Company to settle any claims the FDIC should have with another Hurwitz company, the failed S&L, United Savings Association of Texas. Earth First! later insisted that their suggestion was politely offered at that time only because of the fear that Hurwitz would destroy the thousand year old trees that shielded the habitat of the spotted owl and other endangered species that lived in the Headwaters Forest in Humboldt County, California.

From that demonstration in 1993, both the Clinton Administration and Congress became acutely aware of the Headwaters Forest, Charles Hurwitz, United Savings Association of Texas and the implied liability of Hurwitz, whom the environmentalists claimed raided the assets of United Savings to leverage Pacific Lumber. Shortly after the demonstration Greenpeace, the Sierra Club Legal Defense Fund and the Rose Foundation for Community and the Government began to leverage Congress and Mr. Environment—Al Gore, Jr. The Rose Foundation and the Sierra Club became fixtures on Capitol Hill as they made their way from one Congressional and Senatorial office to another, and from the FDIC to the Office of Thrift Management, to the White House and Blair House, asking for legislation that would both implicate and exonerate Hurwitz by arranging a debt-for-trees swap in which the FDIC would exchange Hurwitz's liability in United Savings for 57,000 to 76,000 acres of Headwaters Forest which would be placed in the public trust.

In 1994 Congressman Dan Hamburg [D-CA] introduced a bill in the House of Representatives that would authorize the US Forest Service to "negotiate" the transfer of the Headwaters Forest under eminent domain to the US government and make it part of the Six Rivers National Forest. The bill passed in the House, but the Senate version of the bill, introduced by Barbara Boxer [D-CA], never made it out of committee and onto the Senate floor for a vote. When the GOP Revolution in November of 1994 pushed the Democrats out of all of the committee chairs in both the House and Senate, the odds of enacting the Headwaters bill was greatly diminished. The environmentalists reverted to the suggestion made by Earth First!—convince the FDIC to file suit against Hurwitz and then swap the Headwaters for a release from liability on United Savings Association of Texas.

It was after the defeat of The Hamburg-Boxer Act that Jill Ratner, the lawyer activist head of the Rose Foundation intensified her letter-writing campaign to entice FDIC Chairman Tigert-Helfer to file a lawsuit against Hurwitz and then do a debt-for-trees swap to settle the 1,000 year old redwood tree matter for all time. Ricki Tigert-Helfer replied to Ratner that the FDIC could not compel the defendants of any legal action to consider a debt-for-nature swap since they might decide to use other assets to satisfy their liability. It was obvious that the Bush-41 Administration clearly understood that minority shareholders in companies—unless they are board members—have no fiduciary control over the company, and thus can't be held liable for any capitalization shortfalls of the company. And, it was clear that, by the end of 1994 the Clinton Administration believed they could arbitrarily assign "fault," and in the Headwaters Forest matter, they had arbitrarily decided that Charles Hurwitz was culpable in the United Savings matter because the Sierra Club, Earth First!, Greenpeace and the Rose Foundation convinced the Clinton Administration—without any actual evidence to support their position—that Hurwitz had gutted United Savings Association and used what could be construed as stolen assets to buy Pacific Lumber. Thus, since ill-gotten gains paid for Pacific, it was only fitting to the environmentalists calling for it, that Pacific Lumber assets be used to satisfy the government's case against Hurwitz.

Ratner even raised the issue of debt-for-nature with Maxxam lawyers on several times. One one occasion, Maxxam spokesman Joshua Reiss dismissed Ratner's swap suggestion as a flawed premise since, he said, there is no debt to swap. Hurwitz, he told the media, had done nothing wrong. Since he did not possess controlling interest in United Savings, he had no legal authority to influence their policies.

John V. Thomas, associate general counsel for the FDIC wrote to a green activist, Larry Helbrook of Eleva, Wisconsin on August 23, 1994. Helbrook inquired about a possible debt-for-nature swap to protect the ancient Sequoia giants. Thomas responded, saying "We are mindful of the possibility that if Pacific Lumber's parent can be held liable for our losses, issues involving the redwood forests might be brought into play."

Shortly after she filed suit against Hurwitz, Tigert-Helfer wrote a letter to then US Congressman David E. Skaggs in which she said, in response to his question: "You may be assured that the government remains open to any appropriate settlement of this claim—including a debt-for-nature swap."

Throughout the last months of 1994 there was a flurry of high level meetings between the environmentalist lobbyists from Greenpeace, the Sierra Club, and the Rose Foundation, several liberal Congressmen and Senators, some high level Clinton Administration officials, and Vice President Al Gore who functioned as "control central" on the Hurwitz-Headwaters Forest matter. The high level meetings produced a compromise between the environmentalists and the Clinton Administration. The Al Gore emissary, Deputy Interior Secretary John Garamendi, was sent to Sacramento to meet with Hurwitz and his lawyers and negotiate the "surrender" of the Headwaters Forest.

For the environmentalists and former Clinton-Gore officials to claim they did not originate the debt-for-nature swap, or attempt to influence the filing of charges against Charles Hurwitz by the FDIC specifically to pressure him into settling the lawsuit by trading a billion dollars worth of redwood trees for a handful of spotted owls. Judge Lynn Hughes was right—the government lied. FDIC officials "...discarded the mantle of the American Republic for the clock of a secret society of extortionists. If the Vice President called, they responded. If a lobbyist called, they responded. They heeded every call but that of duty and honor."

FDIC spokesman David Barr said the agency will appeal the judgment. If the 5th Circuit Court knows how to do a Google search, without even holding a hearing, it will find enough material to uphold the opinion of Judge Hughes. If, on the other hand, the judges on the 5th Circuit believe that the Clinton-Gore Administration was an honest broker of justice, they will likely overrule one of the most intelligent decisions made by a US District Court Judge in 50 years.

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© 2005 Jon C. Ryter - All Rights Reserved
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HC - File suit, fail and repeat as needed in Hurwitz case

File suit, fail and repeat as needed in Hurwitz case
Oct. 18, 2006, 12:05PM Copyright 2006 Houston Chronicle

Blog: More on the FDIC and Charles Hurwitz, including filings and ruling at

IF at first you don't succeed, spend more taxpayer money.

That seems to be the attitude of the Federal Deposit Insurance Corp. in its relentless pursuit of Houston financier Charles Hurwitz.

Two weeks ago, the FDIC filed an appeal in its long-running battle with Hurwitz. The 90-page "brief" basically rehashes the same allegations that the FDIC has made for years. Two judges have ruled that those claims lack merit.

It's as if the FDIC believes that repetition is a substitute for proof.

"It really sounds like they're out on the street corner saying, 'Please believe us,' " says J.C. Nickens, Hurwitz's attorney.

It's unusual for an appeals motion to reargue the facts of a case, and such tactics rarely succeed. Nickens describes the FDIC's filing as having "very little law, lots of complaints about the factual findings."

That's not surprising. More than a year ago, U.S. District Judge Lynn Hughes issued a scathing rebuke of the FDIC's case and awarded Hurwitz $72 million in sanctions, probably the biggest fine a federal agency has ever been ordered to pay an individual.

Hughes likened the agency's tactics to those of the Mafia and accused several FDIC attorneys of perjury.

FDIC spokesman David Barr says the agency disagrees with the size of the sanctions and Hughes' findings, adding that the FDIC concluded that Hurwitz's motion for sanctions "was frivolous."

In its motion, the FDIC basically claims that Hughes is a dunderhead who got
all the facts of the case confused.

The FDIC's lawsuit stems from the failure in 1988 of United Savings Association of Texas, a Houston thrift indirectly controlled by Hurwitz's Maxxam Corp. The federal bailout cost taxpayers $1.6 billion.

The FDIC sued Hurwitz in 1995, claiming he should have done more to prevent the collapse.

The case became mired in a scheme to settle the FDIC's claims by getting Hurwitz to surrender 7,500 acres of old-growth redwoods in California owned by another Maxxam subsidiary, Pacific Lumber Co.

Hurwitz long has contended — and documents unearthed in a congressional investigation support him — that the FDIC was a pawn in a Clinton administration ploy to appease environmentalists by grabbing the redwoods without paying for them.

The FDIC vehemently denies that it was involved in any plan to get the trees and in its brief says that the plan was Hurwitz's idea.

A congressional investigation in 2000, though, found that the so-called debt-for-nature swap was first proposed by environmentalists in California, and that the FDIC pressed its saving and loan case against Hurwitz even though its own lawyers thought the agency was likely to lose.

Time has come and gone

What the FDIC doesn't seem to get, and what it hasn't gotten for many years now, is that it's way past time to argue the facts of this case.

In 2001, an administrative law judge issued a ruling in which he said the case was so flimsy it never should have been filed.

The FDIC, like some legal equivalent of Emily Litella, essentially said "never mind" and withdrew a parallel case that it had pressed in federal court for seven years.

By that point, Hurwitz was so outraged by the government's conduct that he asked Hughes to sanction the FDIC, which Hughes did.

"There's been two judges that have found against them," Nickens says of the FDIC.

Nearly 20 years later

So now the case could be headed back to court yet again, though it would probably be next spring — almost 20 years after United Savings' failure — if the appeals court hears the arguments. The burning question is why.
If its original savings and loan case had any merit, the FDIC had two chances to prove it. It came up empty twice.

Now, it hopes the third time will be a charm. It's easy to hope with other people's money.

The Hurwitz case has become a legal sinkhole, one from which the FDIC cannot hope to emerge. Even if it persuades the appeals court to throw out or lessen the sanctions, the FDIC's shoddy handling of the case remains.

It botched the thing that matters most in court: proving its claims.

While it's asking for a review of the facts, there's one the FDIC has overlooked: It has failed and failed again. The third time is no charm, just more money wasted on a case the FDIC has known for a long time it can't win.

Loren Steffy is the Chronicle's business columnist. His commentary appears Sundays, Wednesdays and Fridays. Contact him at loren.steffy at chron.com. His blog is at http://blogs.chron.com/lorensteffy/.

HC - It seems like Charles Hurwitz just can't catch a break

It seems like Charles Hurwitz just can't catch a break
Business: Loren Steffy
Jan. 23, 2007, 11:13PM Copyright 2007 Houston Chronicle

Victory seems to forever elude Charles Hurwitz.

In 1999, he hammered out an agreement with California and federal officials to preserve old-growth redwood trees while allowing his logging company, Pacific Lumber, to cut enough new-growth trees to make a profit.

The deal, known as the Headwaters Agreement, was supposed to broker peace between Hurwitz and environmental groups that opposed his company's logging operations.

More importantly, it should have been a model for how private industry can work with other groups to preserve the environment.

Last week, Pacific Lumber filed for bankruptcy, strangled by new regulations made outside the agreement.

"We were dealt a hand where we couldn't do anything," Hurwitz told me Monday. "It's a pure breach of contract."

Regional water boards, which weren't included in the Headwaters Agreement and therefore argue they aren't bound by it, ruled that runoff from Palco's logging was affecting rivers and streams in Northern California's scenic Humboldt County.

The boards imposed new restrictions.

Palco's timber harvest has fallen steadily as a result, to 145.5 million board feet in 2005 from 166.3 million in 2003, according to its annual filings with the Securities and Exchange Commission.

At the same time, the quality of the harvest shifted to lower grades of redwood and Douglas fir, which sell at a lower price.

The company wasn't making enough money to service its debt, part of which was incurred when Palco refurbished its mills for the newer growth trees as specified in the 1999 deal.

Over the years, the battle between Hurwitz and the environmentalists has grown personal. The protesters bristle at the thought of a single tree felled by Hurwitz's hand.

In a news release, Karen Pickett, director of one such group, the Bay Area Coalition for Headwaters, summed up the filing this way:

"The one thing we can look forward to ultimately is a Maxxam-free and Hurwitz-free company."


Then what?
What chance does Palco have for survival? It can't, under the latest environmental restrictions, produce enough lumber to turn a profit, whether it's owned by Hurwitz or someone else.

Bankruptcy may eliminate some of the company's debt, but it won't make Palco attractive to outside buyers. The threat of unending tree sittings and sabotage to logging operations makes Palco an unappealing purchase.

Hurwitz's adversaries spin a heartwarming myth about returning Palco to its days as an ecofriendly, family-run logging company.

But returning Palco to its old style of operations also returns it to the reality that left it vulnerable to Hurwitz's takeover 20 years ago. Palco was a mismanaged operation. Its executives hadn't done an accurate inventory of its timber lands in more than 30 years, and the "family" company's stock — which was traded on the New York Stock Exchange — languished.

In today's lumber industry, the margins have gotten thinner and the competition has increased. A return to Palco's past would promptly be followed by a return to bankruptcy court.

'Root of all evil'

For his part, Hurwitz has paid a hefty price for his ownership of Palco.

"This is the root of all evil for us," he said. "Everything that's bad in my business life has come out of this."

The environmental issues formed the basis for the Federal Deposit Insurance Corp.'s decadelong legal battle against Hurwitz. The lawsuit involved the failure of United Savings Association of Texas, but documents released as part of a congressional investigation revealed that regulators pursued a flimsy case to extract a settlement that would have included forfeiting Palco's old-growth redwood forest.

Hurwitz won, but the government appealed. With the case headed back to court, the victory is hollow. Palco's bankruptcy represents another eroded triumph, the collapse of the Headwaters Agreement.

The cycle remains unbroken and as vicious as it was before. Hurwitz and his foes in the environmental movement seem locked in perpetual conflict.

In many of these battles, Hurwitz has been right. But as last week's bankruptcy filing shows, you can be right and still lose.

Loren Steffy is the Chronicle's business columnist. His commentary appears Sundays, Wednesdays and Fridays. Contact him at loren.steffy at chron.com. His blog is at http://blogs.chron.com/lorensteffy/.

1996 - Debt for nature

No bias here. Right. And of course, Hurwitz prevailed. The judge ruled that these guys used Mafia-like tactics to try to steal his land.

The Junk Bond Boss Meets the Ancient Sequoia
by Sharon Seidenstein

Ancient redwoods are priceless, from an environmentalist's point of view, but now green activists are trying to attach a price tag to the trees in order to preserve them. Texas millionaire Charles Hurwitz controls one of the last groves of old-growth redwoods in private hands, and environmentalists are lobbying for a ìdebt-for-natureî swap, with Hurwitz giving the trees to the U.S. government to pay back some of the $1.6 billion it spent bailing out a savings and loan Hurwitz managed into bankruptcy. Hurwitz says the government should either buy the land at fair market value, or get out of his way and let him log.

The direct action group Earth First! was the first to suggest that the Federal Deposit Insurance Corp. (FDIC) accept the redwoods of Pacific Lumber Company's Headwaters Forest in Northern California as payment for its 1988 bailout of depositors of Hurwitz's United Savings & Loan of Texas. In its usual fashion, Earth First! made the suggestion politely, at a 1993 demonstration at the FDIC's Washington, D.C. headquarters. A lot is at stake. The forest's Headwaters Grove is home to 1000-year-old redwoods standing hundreds of feet tall and shielding the habitats of the Northern spotted owl and other threatened and endangered species. It is a remnant of a forest that once blanketed the West Coast from Big Sur to southern Oregon, 96% of which has vanished under 150 years of liquidation logging.

Since the 1993 demonstration, Greenpeace, Sierra Club Legal Defense Fund, and Senators and Congresspeople have joined in the call for a ìdebt-for-natureî swap. They are appealing to the FDIC, the Office of Thrift Supervision (OTS) and the Clinton Administration to negotiate forgiveness of all or part of Hurwitz's debt to the federal government in exchange for 57,000 to 76,000 acres of Headwaters Forest, to be placed into public hands for long-term protection.

Debt-for-nature swaps, although rare in the United States, are not unheard of. In 1988, the Bank of America gave the state of California a nature preserve in the northern part of the state, three other properties and $27 million to clear a debt of about $54 million. In the early 1990s, Howard Hughes' estate swapped wetlands near the Los Angeles Airport in exchange for state taxes due. Outside the United States, Third World countries have traded ecologically valuable resources to relieve debt. This controversial version of the swap has helped protect tropical forests and grasslands in Bolivia, parks on the island of Palawan in the Philippines and a dozen other sites.

A swap of S&L debt for nature seems like a far-fetched plan if you ask Richard Keeton, Hurwitz's lawyer. He took time out from his busy schedule, fielding lawsuits from people seeking his client's cash, to tell me in a good-natured way that any debt-for-nature idea is ìbeating a dead horse.î Since his client is innocent of wrongdoing, he explained, there is no debt.

But it could be one of the FDIC's options, because of the convoluted and seemingly illegal connections Hurwitz created between his S&L and the go-go world of junk bond financing of the 1980s. Hurwitz bought the redwoods with his own swap ó the FDIC claims he buried his Texas S&L by having it buy junk bonds nobody wanted from Michael Milken's junk bond factory at Drexel, Burnham, Lambert in New York City. In turn, Milken helped Hurwitz engineer the takeover of Pacific Lumber and received his business issuing the junk bonds to pay for it.

The takeover has led to the equivalent of a work speedup in the forests. Because junk bonds are risky, or backed by assets of lower value, they burden the companies that issue them with high interest payments. To pay off the loans and interest on $600 million of junk bonds (and $300 million of bank loans) issued to pay for the company, Hurwitz has doubled Pacific Lumber's traditional rate of logging, sold off assets and allegedly raided the employee pension fund. Before the takeover, Pacific Lumber's relatively conservative harvesting practices had kept the forests healthy while other timber companies had destroyed theirs. But now the only thing that protects the Headwaters Grove from logging is an injunction won by an environmental group ó which is likely to end in September.

Junk Bonds for Sale Cheap

Last year, The Wall Street Journal described Hurwitz's United Savings and Loan of Texas as ìa highflying thrift heavily involved in junk bonds, arbitrage and speculative real estate plays.î Its failure was one of the most costly of the S&L bailouts of the 1980s, and centrally involved in the junk bond crisis that cost the U.S. government $134 billion to clean up.

The S&L's complicated financial transactions with Hurwitz's Maxxam Corporation essentially freed up its federally insured deposits to fund Maxxam's hostile takeover of Pacific Lumber. In effect, the government argued in a 1991 lawsuit against Michael Milken, Hurwitz transferred the assets of the federally-insured S&L to Maxxam (see box). This suggests that Hurwitz and Maxxam Corporation acquired Pacific Lumber and Headwaters Forest illegally, and the takeover of the lumber company ìled to the failure of the savings and loan and subsequent bailout,î as one environmental lawyer put it.

The Hurwitz camp categorically denies any wrongdoing. For one, they claim Hurwitz did not legally control United Savings & Loan. His lawyer also says that the FDIC cannot legally ìsecond guessî today actions taken according to Hurwitz's best business judgment in the 1980s.

If the Suit Fits. . . File It

Charles Hurwitz is a wealthy man. He is principal shareholder and CEO of Maxxam, Inc., whose assets were recently estimated at $3.8 billion. Hurwitz, or Maxxam, own Kaiser Aluminum, Federated Development Company of New York, Pacific Lumber and United Financial Group, the former holding company of United Savings and Loan of Texas. Pacific Lumber owns 189,000 acres in Northern California plus two mills. The acreage includes nearly all old-growth redwoods in private hands, some 6,000 acres. Prime old-growth redwood trees, like many of the 300-foot giants in Headwaters Grove, are worth $100,000 each at the lumber yard.

But apparently Hurwitz owes a lot of people a lot of money ó and many are finally going after it. He has faced three shareholder suits linked to Pacific Lumber alone: one an attempt to block the takeover of Pacific Lumber, the second by Pacific Lumber's original shareholders who felt they had been sold out for a ludicrous price, and a third challenging his raid of the employee pension fund. In 1995, the FDIC, the Office of Thrift Supervision and a Humboldt County community activist filed three new suits against him.

FDIC v. Hurwitz, filed in August 1995, seeks a $250 million damage award from the financier directly; Maxxam is not named in the suit. It accuses Hurwitz of having United Savings & Loan buy junk bonds from Drexel in exchange for the firm financing his takeovers. He then hid the true condition of the S&L ìby a pattern of deceptive financial reporting and balance sheet manipulation.î As it sunk deeper into a hole, the S&L increased its liabilities beyond legal limits, gambled on ìcumbersome real estate projects with no realistic chance of success and invested in complex financial instruments which the officers understood poorly and which resulted in staggering losses to the association.î

The FDIC suit

Under Hurwitz's control, the financial condition of United Savings steadily deteriorated. As the institution's financial health plummeted, Hurwitz, senior officers and United Savings board members serving at Hurwitz's request undertook greater and greater risks until both the officers and board members ìbecame entirely indifferent to losses the institution might incur,î the FDIC charged in its lawsuit against Hurwitz.

But according to FDIC chair Ricki Tigert-Helfer, the lawsuit cannot compel Maxxam, Pacific Lumber or their boards of directors to consider a debt-for-nature swap since they might decide to use other assets to satisfy their liability.

"Nevertheless," she added in a letter to Jill Ratner, a lawyer with the Rose Foundation for Communities and the Environment, "the FDIC is open to any appropriate settlement of its claim, including a debt-for-nature swap."

Additional pressure for a debt-for-nature swap came from yet another lawsuit, filed in January 1995 by Humboldt activist Robert Martel in U.S. District Court. It asks that Maxxam repay losses related to the Savings & Loan and that the judge award as much as $4.8 billion in damages on behalf of U.S. taxpayers.

Nearly a year later, in December 1995, the federal Office of Thrift Supervision filed 13 claims in administrative court charging Hurwitz, Maxxam, Federated Development and former and present directors of United Savings and Loan and its holding company with contributing to the failure of the S&L by turning it into ìa vehicle for speculative, highly leveraged, high risk investmentsî from a traditional home mortgage lender. In order to keep financing takeovers while maintaining its stated net worth, the thrift had to sell off its assets.

The suit seeks civil penalties of more than $800,000, restitution and a ban on the financiers from working in the banking industry. Among its other claims: that the financiers failed to properly maintain the minimum net worth of the S&L, which regulators had made a condition for approving the merger of United Savings & Loan and another thrift in 1983; violated a ban against affiliated parties engaging in transactions when the S&L bought junk bonds from Drexel, Burnham, Lambert; failed to maintain the minimum capital required by law; and paid out ìunsafe and unsoundî bonuses, settlements and severance packages to officers and directors.

Languishing and Dying in Congress

The U.S. Congress and the Clinton Administration are well aware of Headwaters and Hurwitz. In 1994, then-Representative Dan Hamburg (D-CA) introduced a bill in the House that authorized the U.S. Forest Service to begin negotiating with Pacific Lumber and other landowners of Headwaters to attach the forest to the Six Rivers National Forest. Although the bill eventually passed the House, the Senate version introduced by Barbara Boxer (D-CA) did not come up for a vote.

Hurwitz has a close ally in Frank Riggs (R-CA), the Congressman who defeated Hamburg in the Republican sweep of 1994. In June, Riggs was soundly rebuffed by his colleagues when he tried to win passage of a rider limiting enforcement of the Endangered Species Act on Pacific Lumber land. Perhaps Pacific Lumber was tired of being challenged by a local environmental group for its violations of environmental law. The Environmental Protection Information Center won nine suits that overturned Headwaters timber harvest plans.

The House also defeated a bill Riggs introduced that would have opened Headwaters to logging if negotiations between the Forest Service and the landowners fell through within an 18-month period.

Meanwhile, environmentalists, senators, representatives, Vice President Al Gore and high-level administrators in the departments of the Treasury and the Interior have been busy exchanging letters and holding meetings. One of the most hopeful meetings took place in February in Sacramento with Deputy Interior Secretary John Garamendi, California state officials and Hurwitz.

Searching for Cover

It's now June.

Pacific Lumber is busy logging. They have already cut a large swath through Headwaters Grove and logged significant portions of second-growth and residual-growth forest. Suits filed by the Environmental Protection Information Center have largely kept the chainsaws out of the most pristine groves, but the court injunction that currently protects the Headwaters Grove will probably be lifted in time for autumn logging.

The neighboring Elk River Timber has indicated it is willing to sell its land to public trust, but in the meanwhile is logging in a threatened species' habitat.

The Environmental Protection Information Center continues its legal battles, challenging a timber harvest plan along the South Fork Elk River drainage in a June lawsuit.

The FDIC suit against Hurwitz and his cohorts is pending in Judge Lynn Hughes' federal court in Houston, awaiting rulings on various motions, including one filed by Hurwitz's lawyers to dismiss the case. The Office of Thrift Supervision's suit is scheduled for a hearing in May 1997 in Houston, but OTS has not frozen Maxxam's assets, as it has the power to do if it thinks they will not be around once the lawsuit is over. Martel's suit seeking damages on behalf of U.S. taxpayers has been transferred, also to Texas.

One possible sign of hope: Deputy Interior Secretary Garamendi recently said that the federal and California governments are discussing with Hurwitz the acquisition of Headwaters Forest ó although they are not specifically talking about a debt-for-nature swap or settling the lawsuits. It will be several months before the public can expect to hear of a possible agreement.

That's about the time the young Coho salmon of Headwaters will be searching for rapidly declining cool waters and scarce adequate cover.

Resources: The Rose Foundation for Communities and the Environment, 510-658-0702; Environmental Protection Information Center, 707-923-2931; Bruce Babbitt, Secretary of the Interior, 202-208-7351.

Issue #207, September-October 1996
Dollars & Sense magazine, 29 Winter Street, Boston, MA 02108, USA, provides left perspectives on economic affairs. It is published six times a year and is edited by a collective of economists, journalists, and activists committed to social justice and economic democracy.
Copyright © 2002 Economic Affairs Bureau, Inc.

ASJE - another cog in the activist wheel

Houston Principles
of the
Alliance for Sustainable Jobs and the Environment

On May 19, 1999, environmental and labor leaders confronted CEO Charles Hurwitz in Houston to demand that his Maxxam Corporation, which owns Kaiser Aluminum and Pacific Lumber Company, be held accountable for its impact on working people, communities and the environment.

By clear cutting ancient redwoods in Northern California, and by locking out striking steelworkers in five cities, the Maxxam corporation and its subsidiaries, Pacific Lumber Company and Kaiser Aluminum Corporation, have become icons of corporate irresponsibility.

Recognizing that we have a common interest in making corporations more accountable for their behavior world wide, environmental and labor leaders have formed the Alliance for Sustainable Jobs and the Environment and circulated the following statement, dubbed the "Houston Principles."


* The spectacular accumulation of wealth by corporations and America's most affluent during the past two decades has come with a huge price tag

* Corporations have become more powerful than the government entities designed to regulate them.

* The goal of a giant, global corporation is to maximize wealth and to wield political power on its own behalf. Too often, corporate leaders regard working people, communities, and the natural world as resources to be used and thrown away.

* Recognizing the tremendous stakes, labor unions and environmental advocates are beginning to recognize our common ground. Together we can challenge illegitimate corporate authority over our country's and communities' governing decisions.

* While we may not agree on everything, we are determined to accelerate our efforts to make alliances as often as possible

We believe that:

* A healthy future for the economy and the environment requires a dynamic alliance between labor, management, and environmental advocates.

* The same forces that threaten economic and biological sustainability undermine the democratic process.

* The drive for short-term profits without regard for long-term sustainability hurts working people, communities, and the earth.

* Labor, environmental and community groups need to take action to organize as a counter-balance to abusive corporate power

The environmental and labor advocates who have signed these principles resolve to work together to:

* Remind the public that the original purpose behind the creation of corporations was to serve the public interest - namely working people, communities, and the earth.

* Seek stricter enforcement of labor laws and advocate for new laws to guarantee working people their right to form unions and their right to bargain collectively.

* Make workplaces, communities and the planet safer by reducing waste and greenhouse gas emissions.

* Demand that global trade agreements include enforceable labor and environmental standards.

* Promote forward-thinking business models that allow for sustainability over the long term while protecting working people, communities, and the environment.

This ground-breaking alliance of labor and environmentalists invites all people to join with us in a spirit of creative cooperation. Together, we can forge a partnership that protects people and the planet.

Back to top


Bruce Hamilton
Conservation Director
Sierra Club

Paul Hawken

David Brower
Brower Fund

John A. Knox
Executive Director
Earth Island Institute

John Cavanagh
Institute for Policy Studies

Michael Renner
Senior Researcher
Worldwatch Institute

Richard Drury
Acting Executive Director
Commentates for a Better Environment

Juliette Majot
Executive Director
International Rivers Network

Brent Blackwelder
Friends of the Earth

Carl Anthony
Executive Director
Urban Habitat Program

Jonathan Parfrey, MDA
Executive Director
Physicians for Social Responsibility

Suzanne Murphy
Managing Director
Redefining Progress

Paul Schwartz
National Campaign Director
Clean Water Action

Mark Ritchie
Institute for Agriculture and Trade Policy

Carol L. Wright
Executive Director
Klamath Forest Alliance

Kelly Quirke
Executive Director
Rainforest Action Network

Jim Jontz
Executive Director
American Lands Alliance

John Passacantando
Executive Director
Ozone Action

Lois Gibbs
Executive Director
Center for Health and Environmental Justice

Tom Turner
Director of Publications
Earthjustice Legal Defense Fund

Peter Rosset
Executive Director
Food First/ Institute for Food and Development Policy

Paul Mason
Executive Director
Environment Protection Information Center (EPIC)

Hal Kane
Executive Director
Pacific Environment and Resource Center

Marguerite Young
California Director
Clean Water Action

Huey D. Johnson
Resource Renewal Institute

Diane Takvorian
Executive Director
Environmental Health Coalition

Paul Spitler
Executive Director
California Wilderness Coalition

Patricia M. Clary
Executive Director
Californians for Alternatives to Toxics

Samuel La Buddy
Executive Director
Endangered Species Project

Christine Stevens
Animal Welfare Institute

Paul Hughes
Executive Director
Forests Forever

Dr. Henry Clark
Executive Director
West County Toxics Coalition

Gary Cohen
Environmental Health Fund

Greg Small
Executive Director
Pesticide Watch

David Korten
People Centered Development Forum

Ted Smith
Silicon Valley Toxics Coalition

Franses F. Korten
Executive Director
The Positive Futures Network

Dave Henson
Executive Director
Occidental Arts and Ecology Center

Jay Letto
Central Cascades Alliance

David Cobb
Green Party of Texas

Jill Ratner
Rose Foundation

Craig Thomas
The Center for Sierra Nevada Conservation

Gina Giazzoni
State College Coordinator
Allegheny Defense Project

Adam Roberts
Research Associate
Society for Animal Protective Legislation

Sanford Lewis
Strategic Counsel on Corporate Accountability

Karen Pickett
Bay Area Coalition for Headwaters

Luke Cole
Center on Race, Poverty & the Environment

David E Ortman
Wise Use Movement

Thomas R. Lent
Association of Flight Attendants--Alaska Airlines

Wenonah Hauter
Public Citizen's Critical Mass Energy Project

Paula Palmer
Executive Director
Global Response

Cal Broomhead
Bureau of Energy Conservation
San Francisco, CA

Prof. Lee Altenberg
Information and Computer Sciences,
University of Hawaii at Manoa

Jim Puckett
Asia Pacific Environmental Exchange (APEX)

David Wood
Senior Associate
Center on Wisconsin Strategy

Lisa Mastny
Staff Researcher
Worldwatch Institute

William A Shutkin
New Ecology Inc.

Chris Ford
Steering Committee Member
Southern Arizona Alliance for Economic Justice.

Charles M Miller, esq.
Law Office of Charles M. Miller

Celia F. Alario
Communications Team
USWA and Amazon Watch

Thomas Ryan
Community Services Director
San Francisco Labor Council

Scott Tundermann
Sustainable Energy Choice Project
Institute for Science and Interdisciplinary Studies

Protect All Children's Environment

Bill Welsch
Safe Alternative for our Forest Environment (SAFE)

Beth Burrows
The Edmonds Institute

Harlin Savage
Colorado Forest Program

Fredy Champagne
Veterans for Peace, Inc.

Julia Butterfly Hill

Alan Rose
Professor Emeritus
University of Idaho

Nancy Kubasek
"Environmental Law"

Hugh M. Carola
Hackensack Meadowlands Preservation Alliance

Mary Bull
SF Coordinator
Boycott the Gap Campaign

John Grech
Public Officer
Earth Worker Inc., Canada

Steve Brooks
Virginia Forest Watch

Larry Weiss
Labor, Globalization and Human Rights Project
Resource Center of the Americas

Stephen Bezruchka, MD, MPH
Affiliate Assistant Professor
Department of Health Services
University of Washington

David Muhly
Virginia Forest Watch

Bill Devall
Deep Ecology Resource Center

Shirley J Shelburn
Humbolt Watershed Council
Rt 1 Trinidad ,Ca 95570

Ken Miller
Salmon Forever
Mckinleyville, Ca 95519

Marianne DE Sobrino
Redwoods Chapter Sierra Club
Eureka, Ca 95503

Kyle Haines
Forest Protection Coordinator
Klamath Forest Alliance

John Sellers
Rukus Society

Karen Litfin, Associate Professor
Department of Political Science
University of Washington - Seattle

Bob Martel
Executive Director
Humboldt Watershed Council

Chad Hanson
Executive Director
John Muir Project

Christine Cooper, Ph.D
Faculty of Business
University of New Brunswick Saint John

Jacek Purat
School of Information Management and Systems
University of California at Berkeley

Steve Thompson
Natural Resource Consultant
Whitefish, MI

Cam Walker
Friends of the Earth Australia

Darryl Cherney, Executive Director
Environmentally Sound Promotions
Redway, CA

Stephen Graves
Land Use Consultant
Soquel, CA

Bryony Schwan, Exec. Director
Women's Voices for the Earth
Missoula, MT

Nancy Fesco
Boreal Forest Campaign Coordinator
Northern Alaska Environmental Center

Julian Powers
Co-Chair for Legislative Affiars
Spokane Transportation Choice Coalition

Kimberly Burkland
Central Cascades Alliance

Robert Cramer
Taxpayers for Headwaters

Martha Bergotten
Campaign Coordinator
Southern Appalachian Biodiversity Project

Lois Barber
International Coordinator

Tim Bristol
Southeast Alaska Conservation Council

Larry Campbell
Executive Director
Friends of the Bitterroot

Bill Metzger
Great Lakes Brewing News

Kurt Newick
Global Warming activist

Juliette Beck
Campaign Director, Global Exchange

TS - Manila rejects wetland donation from developer

Manila rejects wetland donation from developer
Jessie Faulkner/The Times-Standard
Article Launched: 04/20/2007 04:15:22 AM PDT

MANILA -- The community services district board of directors voted Thursday to reject developer Robert S. Riley's offer of 5.1 acres of wetland because the donation was contingent upon county approval of his subdivision.

Although all four board members present supported the vote -- director Charlie McDaniels was absent -- Rita Carlson expressed her desire to hear a staff report about the proposed donation prior to voting.

”I don't want to treat one property owner different than another,” she said.

Riley proposed a planned unit development with 17 homes on three acres roughly a quarter of a mile south of the Manila Community Center. Several neighbors opposed the suggested density.

The Humboldt County Planning Commission is set to hear about the proposed development at its May 3 meeting. A number of community members urged the district board to draft a letter to the county stating their position on the project. To that end, board President Dendra Dengler attempted to add an agenda item at the beginning of the meeting to consider adopting a resolution reaffirming Manila's commitment to maintaining the rural character of the community.

After considerable discussion, it was decided that the


item did not meet Brown Act emergency criteria for the last-minute additions. However, when determining how to approach writing a letter to the county, board members considered Dengler's resolution and the opponents' letter to the board as possible sources for their missive to the county. The opponents' letter focused on points that the community had discussed and agreed upon when drafting the strategic plan that the board adopted in December 2004.
After considerable community input, board member Wilathi Weaver moved to ask the board president to reshape her resolution into a letter. Weaver later revised that motion to continue the discussion to the adjourned meeting, but bring it back before the May 3 meeting.

Earlier in the meeting, the board members and community discussed at length whether they would comply with Humboldt Municipal Water District's request for a letter supporting HBMWD's exploration and study of the possibility of adding fluoride to the water.

Much of the discussion followed the pros and cons of fluoride, including input from two area dentists, before the board decided to continue the discussion to a later date.

Discussion also veered to whether there should be a community advisory vote on adding fluoride to the water. That, too, was continued.

Jessie Faulkner can be reached at 441-0517 or jfaulkner@times-standard.com

TS - Proposed development raises hackles in Manila

Another article without all the facts...

Proposed development raises hackles in Manila
James Faulk/The Times-Standard
Article Launched: 04/08/2007 04:24:13 AM PDT

MANILA -- About 20 people gathered on the outskirts of a proposed planned unit development Saturday to voice their concerns and learn about a project that many of them say could harm their community's rural way of life.

An application by landowner Robert Riley could see 17 houses built on an 8.5-acre parcel. But most of that “West Bay Dunes” development would occur on a 3.4-acre portion of the property, creating a denser development than exists in the rest of the seaside town. Half-acre minimum lot sizes characterize much of the community, but planned unit developments can utilize smaller lot sizes.

The project would also set aside the 5 remaining acres as dedicated open space to be owned and maintained by the Manila Community Services District, and it follows the “smart growth” goals of infill development, where new projects do not stretch out into existing agricultural lands or greenbelts, but rather stay within existing communities.

The homes could have as many as three stories.

”The residences will be two or three story (maximum height of 35 feet) and have a maximum size of 4,200 square feet (most residences will be ... 1,900 to 2,800 square feet),” said the public notice published by the county in a local newspaper.
Efforts to contact Riley were unsuccessful by deadline. Organizers of Saturday's tour of the site said Riley and a representative from his contractor decided at the last minute to not attend.

Issues raised by the group included the density, which resident Aryay Kalaki said would irretrievably change the community's rustic attributes that residents cherish.

”We would permanently lose the rural character,” said Kalaki.

Traffic was another concern. The potential addition of 17 homes could add more than 30 cars to the daily in-and-out traffic load borne by Peninsula Drive, which does not have sidewalks.

Resident Ray Reel, who owns a home directly north of the proposed project, said walking his dogs in the mornings and evenings is already a risk.

”It's a little bit scary with the amount of traffic we already have,” said Reel.

He also voiced concerns over trees on the property that he says have been cut down to make room for the project, trees that were a cherished part of the view outside his back window.

He and his wife were hoping to retire in their Manila abode, but given the changes in the landscape he says this project could bring, they're not so sure they will stick around.

The project will require some changes to the topography of the land, event organizers said, with some high spots cut down and some of the low-lying areas filled. That, too, filled many of the residents with concern. Other issues raised included impacts to wetlands on the property, and the potential tsunami risks.

Discussion centered on the permitting process for this project and opportunities that residents would have to air their concerns.

It's scheduled to go to the Humboldt County Planning Commission on May 3, and then it may be appealed to the Humboldt County Board of Supervisors. The California Coastal Commission would also have jurisdiction, since the project lies within the coastal zone.

A neighborhood meeting on the issue is scheduled for 7 p.m. Wednesday at the Manila Community Center.

Many of those at Saturday's walkabout, on a well-used beach access trail through the property, seemed intent on using the process to halt the project.

But several also said they didn't oppose any development on the property. It's the number of units, and the parcel size, in the current proposal that has raised hackles, they said.

James Faulk can be reached at 441-0511 or jfaulk@times-standard.com.

The witch hunt/addtl info:

Salzman up to his usual tricks... this time Anti- development. Even anti one of the most "green" developments proposed. Lots more to this story
As usual, too many "misstatements" to detail. To see some, read Hank Sims Town Dandy

Remember, "Redwood Progressive" is just Salzman by another name, one of his many AKAs...

The spin:
From: Redwood Progressive
Subject: from our Neighbors in Manila
Date: Tue, 10 Apr 2007 12:34:18 -0400


Local Manila resident Scott Riley is proposing a 17-unit very dense subdivision of 2 and 3 story homes on 3.4 acres of his 8.5 acre property, which is mainly healthy intact willow wetlands and significant coastal dunes at the edge of Manila, about 1/4 mile south of the Manila Community Center, at 1521 Peninsula Drive (Parcel# 400-131-05). Zoning would have to be changed as he has requested a Planned Unit Development (PUD) which the neighborhood actively opposes.

The development could be precedent-setting county-wide in a number of harmful ways. So we, dozens of Manila Neighbors who are organizing to stop it, ask the larger community to attend a public meeting at the Manila Community Center, scheduled for this Wedn, April 11th at 7pm.

The lead developer, from Omsberg and Company, Jesse Buffington, as well as the lead planner, Michael Wheeler from the county's Planning Dept, had both accepted our invitation to attend, but just in the past few days they both cancelled. The public meeting goes on without them. Maggie Herbelin has generously agreed to facilitate the public meeting to keep it focused and friendly.

Over the past few weeks, we've gathered hundreds of Manila residents' signatures on a petition that we've taken door to door (with close to universal support!), as well as dropping a leaflet at every single Manila home informing our neighbors of the upcoming opportunities to get involved in this public discussion.

We also organized a publicized walk-about this last Saturday at the site of the proposed development, so local residents could see for themselves how destructive this will be to the existing dune ecosystem. About 20 people showed up, and had an excellent tour led by our ad-hoc group, as the developer also cancelled his participation at this event at the last minute. The Times-Standard attended the walk-about; here's a link to their story: http://times-standard.com/local/ci_5622340. The Arcata Eye was also present, as well as Channel 3, which ran with it as it's lead story that night.

Lastly, the Humboldt County Planning Commission will be having its initial discussion about this development on Thursday, May 3rd during its regularly scheduled meeting starting at 6pm. We hope that dozens of concerned residents across the Humboldt Bay area will recognize the importance of this meeting, and that we're able to pack the chambers with articulate voices of opposition. This is NOT just a Manila issue - it's about what kinds of development the residents of Humboldt Bay wish to allow in our communities in the future, and how these critical decisions should be made.

None of us are opposed to this property being "developed" as long as it matches the existing neighborhoods low density, and doesn't destroy any of the existing dunes. That would probably require that only a very small number of homes get built, all with Peninsula Drive frontage, as is the norm in the rest of the neighborhood.

The main issues of concern about this development are:
* 17 two and three story houses squeezed onto 3.4 acres of mostly dune-covered wildland - an unprecedented density in our village - in a Planned Unit Development (PUD) which throws out the existing zoning requirements. Some lots would be smaller than 4000 square feet when existing zoning requires minimum lot sizes of 20,000 sq.ft. And property frontages of as little as 27 feet while current zoning requires 75 foot wide minimums.
* 6500 cubic yards of dunes (about 650 dump truck loads) to be bulldozed and moved (described as "dune restoration" in the proposal!).
* Storm runoff from the new street, sidewalks, rooves, would be directed into the adjacent wild intact wetlands.
* Project is being marketed as the county's first solar/green subdivision. Amazingly, John Ash Group is the primary architect, which we thought had a higher standard of environmental responsibility in the projects they agree to participate in, as we believe this project is mostly a green scam.
* 30+ cars all coming out of one cul-de-sac driveway multiple times each day, on a narrow road with no sidewalks or walkable shoulders in a quiet rural neighborhood.

Want to share YOUR concerns with the various public officials who will be involved in this decision? Here's some folks who need to receive lots of letters from many of us:
* Michael Wheeler, Humboldt County Planner
* Bob Merrill, CA Coastal Commission
* CA Dept of Fish and Game
* Your local Board of Supes, especially John Woolley

And please cc a copy of your letter to us at . THANKS!

To get involved, or for more info about the ongoing efforts of Manila Neighbors to stop this development, please contact any of the core members of our neighborhood group: Aryay Kalaki, Tim Ayres, Michael Fennell, Colleen Clifford and Ian Davidson, Dan Edrich, Gordy Anderson, Amanda Pollock, and myself, Paul Cienfuegos. Any one of us would be happy to hear from you, if you know some of us personally. Or write to us at .
The following information is a reminder of your current mailing list subscription:

You are subscribed to the following list:
Redwood Progressive

If you're still having trouble, please contact the list owner at:

The following physical address is associated with this mailing list:
po box 387 Eureka CA 95502

Previously posted on watchpaul
Sunday, April 29, 2007
A witch hunt
She was my brother's teacher. She was creative, and innovative, and something of a radical. She talked about saving the forests long before the treesitters and Redwood Summer. She introduced the concept of organic food, and had the kids making (and drinking) carrot juice, brought in xeroxed sheets of information on the formaldehyde in ice cream. She exemplified the back to the land, grow your own, live off the grid lifestyle. And we loved her.

One day, a kid brought a Playboy Magazine into class. When she discovered it in his desk, she did something very unusual. She took it out, and hung it on the bulletin board. And the class had a discussion about what it represented.

The kids knew it to be the right reaction. It was just. It wasn't over-reactive. It was real and it was honest. And they loved her.

But the parents didn't. She was far too radical. And soon she was gone.

And the kids knew - she was the victim of a witch hunt.

It seems ironic to me that her son is now becoming a victim of the same sort of narrow minded thinking - but with a major twist.

Her name was Irene Riley.

Her son's name is Scott Riley.

His proposal for an "eco-groovy" development in Manila has brought out the lynch mob.

Salzman and his "eco-groovy" cohorts kicked into full gear, sounding the clarion call for warm bodies to kill the proposal, promising all kinds of dire consequences if Riley is successful - calling it "a very dense subdivision," stating that The development could be precedent-setting county-wide in a number of harmful ways. They "organized a publicized walk ... so local residents could see for themselves how d-e-s-t-r-u-c-t-i-v-e this will be. They hope that dozens of concerned residents across the Humboldt Bay area will recognize the i-m-p-o-r-t-a-n-c-e of this meeting, and that we're able to pack the chambers with articulate voices of opposition. They claim "None of us are opposed to this property being "developed" as long as it matches the existing neighborhood's low density, and doesn't destroy any of the existing dunes.,, Aryay Kalaki said it would irretrievably change the community's rustic attributes that residents cherish. ”We would permanently lose the rural character,” said Kalaki." (Don't laugh!) (Channel 3 they claim, ran the "publicized walk" as a lead story that night. The Times Standard and The Lumberjack covered it as well - Guys, you might wanna check your sources.)

As Hank Sims details in his recent column, there are some problems with their story.

"...Pine trees. In his letter, (Michael) Fennell stated that Riley was "caught cutting mature beach pines on [his] property prior to submitting [his] development plan." The implication was that this was an illegal act, and in a follow-up call Fennell asserted that it was.

In fact, it was not. The tree-cutting incident was covered in the Arcata Eye at the time. The story from that paper described how officers from the county's code enforcement unit had been called to the scene and had issued a stop-work permit for "possible" violations, but had later determined that no law had been broken. The trees were not, in fact, "mature," at least by the definition adopted by the county. In our phone conversation, Fennell insisted that code enforcement had simply been too busy to prosecute Riley, but this is not the case. No law was broken.

Sand. In his letter, Fennell mentioned that the Riley plan involves "bulldoz[ing] the dunes (about 650 large dump-truck loads)." In fact, the great majority of the sand removed from building sites in the Riley proposal will be used to restore historic dunes on the property, according to engineering plans that have been submitted to the county. Only one "large dump-truck load" of sand is scheduled to be removed from the site.

Density. Fennell, speaking for the community, said: "We welcome any new housing that ... maintains the half-acre minimum standard." (Half-acre-minimum lots are standard for the area's zoning.)

Riley's plan calls for 17 homes on 8.5 acres, which pencils out to one home per half-acre. However, those proposed homes will be scrunched into one corner of the property so that the rest of the parcel, which consists of sensitive wetlands, may be protected as open space. This kind of thing is the purpose behind "planned unit developments." Trevor Eslow, a planner with the county's Community Development Services division, assured us Tuesday that these kind of trade-offs -- smaller lot sizes for preserved open space -- are not entirely uncommon.

In fact, just last year there was another Manila developer who did a somewhat analogous deal with the county. His name is Michael Fennell. Last year, Fennell wanted to subdivide 3.7 acres, 3 acres of which was wetlands or pine forest. Fennell built three homes on the other seven-tenths of an acre, with the county's blessing. According to Eslow, the lead planner on the project, one of the lots was only 15,000 square feet in size -- about .35 acres, well below the standard he sets for Riley's development..."

Riley's development is "green" - the kind of thing that should make these guys happy.

And, there's more to the story. Kalaki has a longstanding grudge against Riley (reportedly he wanted Riley's piece of property, but offered less than Riley, and so did not get it, and has been on a vendetta ever since. There's also some evidence that he uses the "Dunes Forum" to harass Riley.)

Another neighbor is Salzman's buddy, extremist, Paul Cienfuegos.

Why is Salzman suddenly so interested in all proposed development? It's not just that he likes to meddle in other people's business. It appears that he's an active force in Mark Lovelace's "Healthy Humboldt." You can expect activist tactics to be employed, viral email alerts, plaintive "My Word's" penned by people other than him, and Salzman's Orks armed with talking points attending community meetings and speaking against Riley. Riley's only real sin appears to be that he doesn't belong to the Club.

It tells you that these guys are not really in it for "green" reasons. It's about power and control and you can't appease these guys.

The Humboldt County Planning Commission will consider Riley's development at its regular meeting on Thursday, May 3.

Paul Cienfuegos wants you to "share YOUR concerns with the various public officials who will be involved in this decision.
* Michael Wheeler, Humboldt County Planner mwheeler@co.humboldt.ca.us
* Bob Merrill, CA Coastal Commission bmerrill@coastal.ca.gov
* CA Dept of Fish and Game wcondon@dfg.ca.gov
* Your local Board of Supes, especially John Woolley jwoolley@co.humboldt.ca.us"

Will they take the time to check their sources?

Manila takes second look at Riley development, fluoride
Manila rejects wetland donation from developer


Cal Pen Code § 851.8 & Factual Innocence

Under Cal. Penal Code § 851.8(b), an acquitted defendant may petition for the sealing and destruction of any arrest records relating to the charge. The trial court then holds a hearing at which the initial burden of proof shall rest with the petitioner to show that no reasonable cause exists to believe that the defendant committed the offense charged. If the court finds that this showing of no reasonable cause has been made by the petitioner, then the burden of proof shall shift to the respondent to show that a reasonable cause exists to believe that the petitioner committed the offense charged. § 851.8(b). At the hearing, both the defendant and the district attorney may present evidence such as declarations, affidavits, police reports, or any other evidence which is material, relevant and reliable, including evidence previously suppressed pursuant to Cal. Penal Code §§ 1538.5, 1539. § 851.8(b). 

People v. Adair, 29 Cal. 4th 895 (Cal. 2003)

Cal. Penal Code § 851.8(b) directs that a finding of factual innocence and an order for the sealing and destruction of records pursuant to this section shall not be made unless the court finds that no reasonable cause exists to believe the defendant committed the offense charged. 

This is from the annotated section of 851.8 – (cases)

1. In General

Pen C § 851.8, providing for the sealing of arrest and detention records where a defendant is acquitted and specifically found factually innocent, was intended as a compromise between the valid public purposes that arrest records may serve and a recognition that innocent persons had suffered adverse consequences and were entitled to relief. People v White (1978, App Dep't Super Ct) 77 Cal App 3d Supp 17, 144 Cal Rptr 128, 1978 Cal App LEXIS 1247.

The word "whenever" means the same as "if," "at any time when," "in every instance in which," and "as long as." Thus, the plain language of Pen C § 851.8, in allowing for the sealing of arrest records "whenever" a defendant is acquitted and found factually innocent, demonstrates that it is applicable to anyone who had been acquitted and not merely those acquitted after the effective date. People v White (1978, App Dep't Super Ct) 77 Cal App 3d Supp 17, 144 Cal Rptr 128, 1978 Cal App LEXIS 1247.

Pen C § 851.8, subd. (i), pertaining to the sealing and destruction of certain arrest records, and providing that any finding that an arrestee is factually innocent pursuant to Pen C § 851.8, subd. (a), (b), (c), (d), or (e), shall not be admissible as evidence in any action, is not to be construed as requiring that a finding of factual innocence on the part of the arrestee is required under subd. (d) of that statute, authorizing the court, with the concurrence of the district attorney, to order, at the time of the dismissal of the accusatory pleading, the arrest records sealed and destroyed, where a person has been arrested and an accusatory pleading filed but where no conviction has occurred. Such a construction would require a rewriting of Pen C § 851.8, subd. (d). Rather, a simpler and more reasonable method of harmonizing the two subdivisions is to assume that the reference in subd. (i) to a finding of actual innocence under subd. (d) arose from the Legislature's awareness that a trial court might make such a finding before accepting the district attorney's recommendation that a defendant's arrest records be sealed and destroyed, even though the court is not required to make any such finding. People v. Frank M. (1985, 1st Dist) 163 Cal App 3d 939, 210 Cal Rptr 53, 1985 Cal App LEXIS 1550.

Pen C § 851.8, is for the benefit of those defendants who have not committed a crime by permitting petitioners who can show that the state should never have subjected them to the compulsion of criminal law, on the basis that no objective factors justified official action, and to purge the official records of any reference to such action. However, much more than a failure of the prosecution to convict is required in order to justify the sealing and destruction of records under § 851.8, in that relief under the statute requires a finding of factual innocence and the statutory language commits the determination of that issue to the trial court. Only in those cases where the trial court determines that defendant is factually innocent is the trial court justified in sealing and destroying defendant's arrest records. People v. Scott M. (1985, 5th Dist) 167 Cal App 3d 688, 213 Cal Rptr 456, 1985 Cal App LEXIS 2015.

Pen C § 851.8, providing for the sealing and expungement of arrest records of a person who establishes his or her factual innocence, does not provide for the surgical excision of only certain portions of an arrest record. It would defeat the statutory purpose of leaving a factually innocent person with an unblemished record and run afoul of the legislative objective sought to be achieved for a court to permit the sealing and destruction of only part of an accused's arrest record. Another constraint is the principle that penal statutes must be strictly construed to guard against judicial usurpation of the legislative function. legislative function. People v. Matthews (1992, 2nd Dist) 7 Cal App 4th 1052, 9 Cal Rptr 2d 348, 1992 Cal App LEXIS 831.

"Initial burden of proof" referred to in Cal. Penal Code § 851.8(b) is not a condition for the introduction of additional evidence, but is the standard the petitioner must satisfy before the prosecution is required to make a contrary showing, and to satisfy this burden of proof, the petitioner must be permitted to adduce his evidence; the trial court abused its discretion in refusing to consider defendant's proffered evidence of actual innocence before denying his motion. People v. Chagoyan (2003, 2nd Dist) 107 Cal App 4th 810, 132 Cal Rptr 2d 419, 2003 Cal App LEXIS 491.

Because an appellate ruling of legal insufficiency is functionally equivalent to an acquittal for double jeopardy purposes, it follows that, for equal protection purposes, appellate acquittals for insufficient evidence and trial acquittals should be treated the same under Pen C § 851.8. People v. McCann (2006, 2d Dist) 141 Cal App 4th 347, 45 Cal Rptr 3d 868, 2006 Cal App LEXIS 1074.

2. Circumstances Warranting or Barring Relief

Pen C § 851.8, which permits a judge to order the records in a case sealed whenever a defendant is acquitted and it appears to the trial judge that defendant was factually innocent, is fully retroactive. Thus, a defendant acquitted of two misdemeanor charges in 1972 was entitled to apply for relief under that section where the trial judge found him to be factually innocent of the charges, notwithstanding that the effective date of the statute was January 1, 1976. People v White (1978, App Dep't Super Ct) 77 Cal App 3d Supp 17, 144 Cal Rptr 128, 1978 Cal App LEXIS 1247.

Orders sealing the records of two defendants against whom misdemeanor charges were dismissed in the furtherance of justice (Pen C § 1385), were not authorized by Pen C § 851.8 (permitting judge to seal record when defendant is acquitted and it appears that he was factually innocent), where there were no trials at which evidence was presented from which their factual innocence could be found and no basis to even assume that insufficiency of the evidence was involved. The orders were thus in excess of jurisdiction and void. People v. Glimps (1979, 2nd Dist) 92 Cal App 3d 315, 155 Cal Rptr 230, 1979 Cal App LEXIS 1678.

Pen C § 851.8 (permitting judge to seal record when defendant is acquitted and it appears that he was factually innocent of charges), does not empower a court to seal records in matters that are dismissed in the furtherance of justice (Pen C § 1385). The purpose of Pen C § 851.8, is to benefit defendants who, after presentation of evidence, are found not to have committed a crime. People v. Glimps (1979, 2nd Dist) 92 Cal App 3d 315, 155 Cal Rptr 230, 1979 Cal App LEXIS 1678.

The classification created by Pen C § 851.8, which permits a court to seal the records of only those defendants who are acquitted and who are also found by the court to be factually innocent of the charges, to the exclusion of defendants against whom charges are dismissed in the furtherance of justice (Pen C § 1385), does not violate equal protection. A dismissal pursuant to Pen C § 1385 is a disposition that can be predicated on many grounds other than factual innocence. Thus, the trial court erred in sealing the records of two defendants against whom misdemeanor charges were dismissed in the furtherance of justice, where the records of dismissals in their cases contained nothing to suggest factual innocence. People v. Glimps (1979, 2nd Dist) 92 Cal App 3d 315, 155 Cal Rptr 230, 1979 Cal App LEXIS 1678.

The trial court properly granted defendant's motion, concurred in by the district attorney, to seal for three years the records pertaining to his arrest for a misdemeanor offense and then destroy the records, where the misdemeanor prosecution was compromised and dismissed, pursuant to Pen C §§ 1377, 1378, granting the trial court discretion to compromise and dismiss a misdemeanor prosecution where a person injured by an act constituting a misdemeanor acknowledges that he has received satisfaction by means of a civil remedy for his injury. The order was authorized under Pen C § 851.8, subd. (d), authorizing the court, with the concurrence of the district attorney, to order, at the time of the dismissal of the accusatory pleading, the arrest records sealed and destroyed, where a person has been arrested and an accusatory pleading filed but where no conviction has occurred, since the compromise proceedings resulted in a dismissal of charges of which defendant was not convicted. People v. Frank M. (1985, 1st Dist) 163 Cal App 3d 939, 210 Cal Rptr 53, 1985 Cal App LEXIS 1550.

3. Judicial Review

To be entitled to relief under Cal. Penal Code § 851.8, the arrestee or defendant must establish that facts exist which would lead no person of ordinary care and prudence to believe or conscientiously entertain any honest and strong suspicion that the person arrested or acquitted is guilty of the crimes charged. People v. Adair (2003) 29 Cal 4th 895, 129 Cal Rptr 2d 799, 62 P3d 45, 2003 Cal LEXIS 703.

Because a city and its police department were not parties to a criminal case, they had no standing to appeal an order that granted an arrestee's petition to seal and destroy his arrest record on the ground that he was factually innocent of dismissed charges. People v. Punzalan (2003, 2nd Dist) 112 Cal App 4th 1307, 6 Cal Rptr 3d 30, 2003 Cal App LEXIS 1616.

4. Factual Innocence

Much more than a failure of the prosecution to convict is required in order to justify the sealing and destruction of records under Cal. Penal Code § 851.8. Establishing factual innocence entails establishing as a prima facie matter not necessarily just that the defendant had a viable substantive defense to the crime charged, but more fundamentally that there was no reasonable cause to arrest him in the first place. People v. Adair (2003) 29 Cal 4th 895, 129 Cal Rptr 2d 799, 62 P3d 45, 2003 Cal LEXIS 703.

"Factual innocence" as used in Cal. Penal Code § 851.8(b) does not mean a lack of proof of guilt beyond a reasonable doubt or even by a preponderance of evidence; defendants must show that the state should never have subjected them to the compulsion of the criminal law, because no objective factors justified official action. The record must exonerate, not merely raise a substantial question as to guilt. § 851.8(f), (h). People v. Adair (2003) 29 Cal 4th 895, 129 Cal Rptr 2d 799, 62 P3d 45, 2003 Cal LEXIS 703.

Where defendant, an orthopedic surgeon, could not possibly have been guilty of practicing medicine without a license in violation of former B & P C § 2053 (repealed 2002) because he had a valid license to practice medicine, the trial court erred in denying defendant's motion for a finding of factual innocence pursuant to Pen C § 851.8. People v. McCann (2006, 2d Dist) 141 Cal App 4th 347, 45 Cal Rptr 3d 868, 2006 Cal App LEXIS 1074.

Defendant was entitled under Pen C § 851.8 to a finding of factual innocence of grand theft of a trade secret because there was insufficient evidence that a program he allegedly took met the statutory definition of a trade secret in Pen C § 499c(a)(9); defendant presented evidence that the program could perform only a well-known process, and there was no evidence that it had independent economic value. People v. Laiwala (2006, 6th Dist) 143 Cal App 4th 1065, 49 Cal Rptr 3d 639, 2006 Cal App LEXIS 1553.

Cal Pen Code § 851.8

ER - Yunque trial records to be 'destroyed'

Yunque trial records to be 'destroyed'
by Kara Machado, 4/24/2007

Due to a judge’s ruling Tuesday, Carol Ann Yunque will have a clean record.

Humboldt County Superior Court Judge John T. Feeney found good cause Tuesday — “due to the facts of the case” — to grant a motion that finds Yunque “factually innocent” of the charges she was acquitted of following a jury trial in January.

In addition, Feeney found good cause for the “sealing and ultimate destruction of the records in (the) Yunque case.”

Tuesday’s motion was filed by Yunque’s former trial attorney, Humboldt County Alternate Conflict Counsel Mark C. Bruce.

Yunque’s case stems from a Jan. 27, 2006, incident in which it had been alleged that Yunque, 59, of Princeton, N.J., assaulted Kathleen McLaughlin, 55, of Port Orford, Ore., at a mutual friend’s house in Fortuna.

McLaughlin claimed Yunque punched her, causing two fractures to McLaughlin’s jaw and chin area and the misalignment of her bottom teeth.

Throughout the course of Yunque’s trial, Bruce maintained McLaughlin had been the aggressor and that Yunque acted in self-defense. And, Bruce maintained that Yunque did not “punch McLaughlin, but slapped her.”

At the end of the trial, a jury found Yunque not guilty of felony battery with serious bodily injury.

Bruce said, in talking with jurors after they had been released from their trial duties, “it was very clear to them that (Yunque) acted in self-defense.”

If convicted of the charges against her, Yunque could have faced a maximum penalty of three years in prison, Bruce said.

After court Tuesday, Bruce said he was pleased with Feeney’s decision.

“The judge quite properly granted the motion,” Bruce said. “It’s not often a judge grants these motions and it’s not often that a district attorney will agree (with the motion).

“(Yunque) is going to be very happy with this. I’m certain she’s going to be fully vindicated.”

Humboldt County Deputy District Attorney Jeffrey Schwartz, who prosecuted the case, said, “The people did not oppose Ms. Yunque’s motion because the jurors determined that her conduct in striking the victim was justified based on self-defense.

“The defense of self-defense is an age-old principle and maxim of English and American jurisprudence,” Schwartz said. “I respect a person’s right to defend one’s self in a lawful manner.

“The jury’s finding entitles Ms. Yunque the opportunity to have her record cleared.”

Bruce said Yunque has since moved back home to the East Coast and “on with her life.”

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