Judge hears final arguments in McKee lawsuit; decision on penalty expected within 90 days

Grant Scott-Goforth


Attorneys for Humboldt County and developer Bob McKee presented final arguments before a packed courtroom Friday in a long-standing lawsuit over a subdivision of 13,700-acre Tooby Ranch.

San Francisco attorney Robert Moore, representing McKee, asked for leniency from Superior Court Judge Dale Reinholtsen, who has 90 days to decide how the Williamson Act violations should be remedied.

A state appeals court found in 2008 that McKee violated the Williamson Act - which grants landowners tax relief if they agree to keep their land in agricultural production - when he sold portions of the Tooby Ranch property smaller than 600 acres, which is the minimum parcel size allowed under the act.

Friday's hearing involved Buck Mountain Ranch, of which McKee is part owner. McKee is one of more than 30 defendants named in the case who own parcels in the subdivided Tooby Ranch.

Moore called the case "absolutely frivolous," and said McKee was singled out for Williamson Act violations. He argued the Williamson Act violations should be considered a violation of a contract, not an illegal act.

Oakland attorney Joshua Cohen, representing the county, said the subdivision was prohibited and that 30 other defendants in the lawsuit shows that the county was not singling out McKee.

"The breach has already been established by the court of appeal," he said.

Reinholtsen has several options in deciding a remedy for the violations, including requirements of the parcel owners to report changes in agricultural activity on their properties to the county. The court could also order McKee to purchase subdivided parcels back from their owners.

"People have been on that land for 12 years," Moore said.

Another option is fines. Moore warned that penalties could cost McKee more than $100 million, but Cohen said that high of a penalty was unlikely.

"The county has set forth what potential damages could be," he said. "That's not what the county expects." Moore asked the judge to consider non-renewal of the Williamson Act contract as a penalty for the violations.

"Anything else would be grossly unfair," he said.

Following the hearing, Cohen said non-renewal of the contract was insufficient.

"Non-renewal is not a remedy," he said. "It's not a penalty. They could've asked for no-nrenewal any time they wanted to." "The county doesn't want a non-renewal," Cohen added. "They want to encourage actual ag production."

Cohen said it remained to be seen whether Reinholtsen's decision in the Buck Mountain Ranch portion of the case would set precedent for the other defendants.

McKee purchased the Tooby Ranch property in 2000. The former owner of Tooby Ranch had entered into a Williamson Act contract with the county in 1977, when the minimum size for subdivided parcels was 160 acres.

In 1978, Williamson Act guidelines called for an increase in the minimum parcel size, to 600 acres. After he bought the ranch, McKee sold several parcels that were under 600 acres, averaging about 300 acres.

In 2006, Humboldt County Superior Court Judge Bruce Watson ruled that the 1978 guidelines couldn't be applied to McKee. The county appealed.

The county and McKee settled on two other claims in the suit but the Williamson Act element of Watson's ruling was thrown out, netting a victory for the county. McKee asked the California 1st District Court of Appeal to reconsider the matter, but the court turned it down. The California Supreme Court also denied McKee's request to hear the issue.

Grant Scott-Goforth can be reached at 441-0514 or gscott-goforth@times-standard.com.