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12.17.2007

HC - August 07, 2007 Hurwitz pleads his case before appeals court

Hurwitz: back in court
Charles Hurwitz, the bane of California environmentalists, was in New Orleans today urging the 5th U.S. Circuit Court of Appeals to uphold his $72 million in sanctions against the Federal Deposit Insurance Corp.

You can find more on the case in earlier posts here and here, and in columns here and here.

Hurwitz, who runs Houston-based Maxxam, isn't happy to be in court again, almost 20 years after his battle with FDIC began, but his attorney, Kenny Friedman, said despite that they're pleased with today's proceedings.

"It went as well as we could have hoped," he said. "We're very optimistic that the 5th Circuit will agree with us."

At issue is whether the FDIC acted with an improper motive when it sued Hurwitz over the collapse of United Savings Association of Texas in 1988.

A congressional committee later found that the FDIC was part of a broader scheme to force Maxxam's Pacific Lumber Co. to surrender old-growth redwood forests in California. Hurwitz eventually sold the trees to the government.

After seven years of pressing the case in court, the FDIC withdrew it. U.S. District Judge Lynn Hughes later likened the agency's tactics to those of the mafia and awarded Hurwitz what may be the biggest sanction ever for an individual against a government agency.

The FDIC disputes some of Hughes' findings of facts in the case and has maintained it did nothing improper.

The 5th Circuit's track record on sanctions against the government doesn't bode well for Hurwitz. Friedman, however, noted by upholding the sanctions, the court would be setting a precedent only in cases in which a government agency abuses its power.

Regardless of the outcome, Friedman said, "we are hopeful that the FDIC will take a good hard look at itself, or Congress will, and insure that this never happens again."

A ruling on the appeal could take six months.
August 07, 2007
Steve Ueckert/Houston Chronicle
Technorati Tags: Hurwitz, FDIC, legal, Pacific Lumber

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