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Tech billionaire Khosla loses battle over public beach again – and still grants no access

Law slowly shutting down Sun cofounder's legal campaign

By Kieren McCarthy, 11 Aug 2017

Sun cofounder and billionaire venture capitalist Vinod Khosla has lost another legal battle over his efforts to shut off public access to a California beach – but still won't be required to let people onto it until a second lawsuit concludes.

On Thursday, the California Court of Appeal agreed with the San Mateo Superior Court, which ruled that Khosla's decision to lock a gate providing public access to Martins Beach amounted to a "development" that he did not receive a permit for.

Although the surfing beach is public property, getting to it involves walking over part of a 90-acre plot of land that Khosla bought for $32.5m back in 2008. The land's former owners had granted a public right of access, but the billionaire was having none of that.

The appeals court also agreed that Khosla should foot the $470,000 legal bill that the Surfrider Foundation racked up in chasing him through the law courts for five years to reopen access.

Even though he keeps losing again and again, Khosla is still not legally obliged to open up the public path because that issue is part of a second lawsuit that is wending its way through the courts.

In this latest battle, Khosla's lawyers made a range of arguments, all of which were dismissed by the appeal court. Most significantly, they argued that simply closing a gate did not represent a "development" and so he was not required to get a permit.

But, the appeal court noted, while the word "development" does tend to mean new construction, the wording of the law is quite explicit in that it contains the phrase "change in the intensity of use of water, or of access thereto."

And, it points out, previous legal decisions have agreed that "the Coastal Act is to be liberally construed to accomplish its purposes and objectives." In other words, to preserve and protect the coastline from would-be monopolists.

Absurd

Khosla's legal team argued that such a decision would be absurd, and posited various ludicrous theoretical situations such as: must a private owner seek a permit anytime he wishes to throw a party with guests, and then again before he asks his guests to leave? Must a private owner who has a permit to install a water pump seek a permit every time he wishes to turn the pump on or off? Is a permit necessary to have a garage sale at one‘s home situated on the coast?

But the court brushes this off, noting that the Coastal Act specifically identifies that temporary situations are exempt from permit requirements.

Critically for those who wish to actually access the beach, however, the appeal court refused a request to find Khosla in breach of a public right of way. "Surfrider points to nothing showing the public has a right to access Martins Beach that has been recorded or judicially determined," it concluded. "Accordingly, regardless of the public access rights that may be legally established in the future, this court must presume the prior access was permissive."

Or, in other words, you'll have to wait until the other lawsuit concludes.

"We are pleased that the court continues to stand with the public and to protect the Coastal Acts' basic premise: the coast belongs to all Californians," said John Claussen, chair of the Surfrider Foundation San Mateo County Chapter, in a statement. We have heard nothing from Khosla nor his attorneys so far.

At issue in all this is a critical part of California law – and one that many in the Golden State take extremely seriously – namely the public's right to walk its coastline and surf its waves. In recent years, that long-held right has been under threat by the super-rich who have bought beachside houses and then used all means possible to prevent anyone else from accessing the beach in front of them.

Fake garage doors

Most famously, residents of Malibu Beach, just west of Los Angeles, have been battling with security guards, hidden entrances and even fake garage doors in order to access billionaire beaches.

But Khosla's efforts have taken shamelessness to a new level. Khosla does not own the beach but did buy the land next to it and, critically, the land on which the access road to the beach stands, back in July 2008.

Initially, Khosla maintained the same system as the previous owners – allowing access, charging a small parking fee and even running a small store at the beach – but then, in September 2009, he locked the gates and embarked on a wide-ranging legal battle to ensure he doesn't have to open them again.

California residents did not take the matter lying down, and one lawmaker even proposed and passed a specific piece of legislation in 2014 that forced the State Lands Commission to "consult, and enter into any necessary negotiations, with the owners of a specified property known as the Martins Beach property… to acquire a right-of-way or easement for the creation of a specified public access route to and along the shoreline, including the sandy beach."

Khosla continued to fight, paying lawyers to stall and stymie negotiations with the commission, and suing both the commission and its commissioners personally.

When he finally offered to sell the land on which the access road stood for a staggering $10m – when the land is only worth $380,000 – commission staff said they had had enough and recommended to the commissioners that they use the very rarely used power of eminent domain to force Khosla to sell the relevant piece of land.

Caved

But at a meeting in December, Lieutenant Governor Gavin Newsom killed that proposal out of fear that upsetting Silicon Valley billionaires would damage his chances to win the Californian governorship in 2018.

Instead of resolving the issue once and for all, Newsom pleaded with Khosla to negotiate – even though the commission's own staff explicitly said that any such effort was almost certain to prove fruitless given its two years of prior negotiations.

Newsom then pointed to the lawsuits, and argued that "there are three pending lawsuits that could resolve this more quickly than we could."

That is debatable since it has now been eight months since the commission's decision, and only this week has the first lawsuit's appeal decision been delivered. It is very probable that Khosla's legal team will now appeal that decision to the Supreme Court. And it will definitely appeal any decision against him on whether he has to grant access as far up the legal system as possible: a process that could take another ten years.

What is more likely is that once the governor race in 2018 is over and Newsom not longer fears political blowback, that the next Lieutenant Governor on the State Lands Commission of California will take a stronger position and force Khosla to sell his land.

Because so far in the seven years of battling over Martins Beach, Khosla has proven himself more than willing to spend small amounts of his fortune hiring lawyers to aggressive fight any effort to let the public on the beach.

It seems all too likely that he has happily resigned himself to spending $10m keeping it to himself and his family for ten years. At $1m a year, that could look like a good deal for someone who is worth $1.75bn.

Or, to put it in terms of the average net value of a 62-year-old American, it would be the equivalent of spending just over $1,000 a year for your own private beach in the one of the most coveted coastlines in the world. ®

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