After a state regulatory agency ordered an Orange County real estate developer to pay for the toxic contamination cleanup costs in December 2005 on its property in Huntington Beach, the developer sold the property to another state agency and then attempted to stick them, or in reality, taxpayers with the bill.
Today, the Ninth Circuit Court of Appeals rejected Hearthside Residential Corporation's sneaky maneuvers.
And the decision apparently wasn't hard.
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The company tried to argue that the state owned the property at the time of the $1 million cleanup and should be responsible for costs.
“If Hearthside's argument were adopted as law, then an owner could sell a recently cleaned piece of property to an innocent owner one day before the statute of limitations runs, with the result that the new owner would bear full cleanup liability . . . ,” wrote the federal appellate justices. “Such an unwise and untoward result would undermine the general aim of statutes of limitations to provide notice and predictability to a defendant.
The justices added, “Under the view of liability urged by Hearthside, a landowner seeking to avoid liability by transferring the property before a lawsuit is filed has every incentive to delay completing the cleanup process until it has found a buyer.”
Hearthside is owned by California Coastal Communities, whose board of directors includes Geoffrey W. Arens, Phillip R. Burnaman, Marti P. Murray, Raymond J. Pacini and Sandra G. Sciutto. The company president is Michael J. Rafferty. The Irvine-based company has more than $249 million in assets, according to a recent SEC filing.
In the past, Orange County's largest real estate developer, The Irvine Co., has perfected the liability shifting tactic because company owner Donald Bren, the region's wealthiest man with tens of billions of dollars, somehow usually wins the silence of government officials.
–R. Scott Moxley / OC Weekly
CNN-featured investigative reporter R. Scott Moxley has won Journalist of the Year honors at the Los Angeles Press Club; been named Distinguished Journalist of the Year by the LA Society of Professional Journalists; obtained one of the last exclusive prison interviews with Charles Manson disciple Susan Atkins; won inclusion in Jeffrey Toobin’s The Best American Crime ReportingĀ for his coverage of a white supremacist’s senseless murder of a beloved Vietnamese refugee; launched multi-year probes that resulted in the FBI arrests and convictions of the top three ranking members of the Orange County Sheriff’s Department; and gained praise fromĀ New York Times Magazine writers for his “herculean job” exposing entrenched Southern California law enforcement corruption.