Law Office Management

Mar. 2, 2014

It's Not Just About the Oysters

A Northern California shellfish grower's push to keep operating in "potential wilderness" is threatening the delicate balance between conservation and agriculture at Point Reyes. A win could reverberate nationwide.

In the dramatic landscape of western Marin County, majestic tule elk graze near cattle amid dense, wafting fog. Lush pastures, dotted with occasional ranch houses - some inhabited, some abandoned - roll on for miles before dropping sharply to the ocean. And tourists who flock to the village of Point Reyes Station brush shoulders with ranch hands buying supplies at Toby's Feed Barn one minute and browse for pricey art or prize-winning local organic cheeses the next.

West Marin's landscape of contrasts - social and economic, as well as natural - is shaped largely by an unconventional deal struck with the federal government in 1962 as it was establishing Point Reyes National Seashore. Under the deal - the first of a handful that now permit agriculture in selected national parks - about two dozen active ranches on Point Reyes dating to the 1850s were sold to the government, but the ranchers were allowed to stay in business by renting back the land at very low rates.

That bargain has succeeded for more than four decades. In the early days, it helped to preserve the local economy, stave off sprawling planned commercial and residential development, and beat back an interstate highway planned to cut through rugged Lucas Valley and across another 20 miles of ranchland. As highly restrictive zoning took hold and the delicate relationship between ranchers and the park matured, the deal allowed organic agriculture to develop even as nearby real estate prices soared. Less than an hour's drive north of the Golden Gate Bridge, West Marin is now home to rock stars and CEOs; retirees, artists, and marketing executives; a newspaper heiress turned olive oil magnate; and more than a few environmental pioneers.

But the balance in West Marin is now threatened as locals debate the fate of an oyster farm on the southern shore of Point Reyes. In November 2012, after a brief visit, then-Interior Secretary Ken Salazar opted not to renew the 40-year lease of Drakes Bay Oyster Company, exercising the discretion he had over all federal leases in national parks. Unlike the cattle and dairy ranches in the park, which occupy a pastoral zone that specifically allows farming, he said the oyster company was operating in waters designated as "potential wilderness" under the 1976 Point Reyes Wilderness Act. (See Pub. L. Nos. 94-544, 94-567.)

Instead of closing the business, owner Kevin Lunny - who with his siblings took it over in 2004 from Johnson Oyster Company - fought back, seeking an injunction to let him stay open while he pursues a federal lawsuit claiming that Salazar abused his discretion and acted on incorrect information. Federal District Judge Yvonne Gonzalez Rogers denied the request, affirming Salazar's discretion and ordering Lunny to shut down in February 2013. Gonzalez Rogers ruled that Salazar had the right to make final decisions on park leases. Even if she had jurisdiction over those decisions, she wrote, Lunny had failed to show the four elements necessary to win an injunction. Those were that his underlying case had merit, that he would suffer irreparable harm without an injunction, that fairness "tips" toward him, and that an injunction would be in the public interest. (Drakes Bay Oyster Co. v. Salazar, 921 F. Supp. 2d 972 (N.D. Cal. 2013).)

Lunny won an emergency stay and appealed. After a three-member panel of the Ninth Circuit also denied him an injunction, he sought an en banc rehearing, hoping the lone Ninth Circuit judge who said his case should be heard - Paul J. Watford - could persuade more colleagues. That effort failed in January. (Drakes Bay Oyster Co. v. Jewell, 2014 WL 114699 (9th Cir.).) Now, Lunny is operating under a new 90-day emergency stay while he works on petitioning the U.S. Supreme Court.

The business produces somewhere around 7 million oysters a year, sold primarily to Bay Area restaurants. That's a little more than 3 percent of the oysters grown on the West Coast, and it's about eight times the volume the operation had at the start of the lease in 1972.

With each new chapter in the story, locals have grown angrier and wearier. Point Reyes Light editor Tess Elliott says the community increasingly sees the case as a fight about its future, as she wrote in a column about the struggles ranchers face: "The National Park Service could be on the brink of destroying the heart of Point Reyes - the peninsula's unique weaving of wilderness and agriculture."

It used to be that challenges to local businesses or the environment - whether about salmon protection or construction in wetlands or any number of issues - ended with agreements reached or at least truces called. This time, new rips have opened in the local fabric each time residents allied with opposite sides have run into each other at court. Lots of big names have been drawn in: U.S. Sen. Dianne Feinstein accused the park service of treating Lunny in a "biased and unfair manner," even before Salazar terminated the lease. Chef Alice Waters joined an amicus brief filed with the Ninth Circuit by a long list of Bay Area businesses and organizations prominent in the organic and local food movements; they argued that the oyster farm operates in the public interest.

The saga took its sharpest turn when the anti-big government group Cause of Action got involved on Lunny's side. Its tactics and positions quickly became a public relations problem in a county where 74 percent of voters supported Barack Obama in the last election. Cause of Action is led by Dan Epstein, formerly a lawyer with billionaire Charles G. Koch's foundation, which advocates for limited government and free-market economics. The group first approached Lunny after hearing claims that the Department of the Interior had misrepresented scientific findings in a report on the oyster farm's environmental impacts. Amber D. Abbassi, one of the Cause of Action lawyers who represented the oyster farm, filed a petition claiming the park's environmental review was "inaccurate, non-transparent, and deliberately misleading."

Accepting Cause of Action's help seemed sensible to Lunny at first, since it was free. But he ended the relationship soon after PBS NewsHour aired a segment in May 2013 that mentioned the group's involvement. Lunny says his frustration was less about bad PR than the fact that Cause of Action had used his name in publicizing unrelated issues and in arguing for a newspaper to reveal unnamed sources who criticized the oyster farm in a story. But the group's involvement cemented Drakes Bay's position in the center of larger national debates over conservation, management of all types of federal land, and the limits of federal authority. It also made clear how important a precedent Lunny's case could set.

Lunny's current legal team, also pro bono, is led by Briscoe Ivester & Bazel partner Peter Prows. The six lawyers come from three land-use firms: SSL Law Firm and Briscoe Ivester in San Francisco, as well as the Stoel Rives office in San Diego. The team was built on personal connections. Prows and partner John Briscoe, for example, got involved after Nossaman partner William T. Bagley, a former Republican state assemblyman from San Rafael, suggested to Briscoe over lunch that he meet with Lunny. Community fund-raisers for the oyster company's defense have continued, with the money going toward experts, research, filing fees, and representing Lunny in other related actions, Lunny says.

Signs reading "Save Our Drakes Bay Oyster Farm" hang from gas station rafters and on fences along Highway 1, the area's north-south artery. Some ranchers fear that a loss for the oyster company would bring them one step closer to losing their own parkland leases, especially right along Drakes Estero, the estuary off Drakes Bay that hosts Lunny's oyster business. Already the drought is adding pressure for some ranchers when their cattle meet increasing herds of native elk in depleted pastures. And the invective continues, often among people who would be allied in almost any other political dispute.

"The park has decided it wants this oyster farm out because what it really wants is to get rid of all the agriculture," says Phyllis Faber, who started the Marin Agricultural Land Trust in 1980 with Ellen Straus, the late matriarch of the organic Straus Family Creamery.

That's just "spreading false statements," counters Amy Trainer, an attorney who leads the Environmental Action Committee of West Marin. Former executive director of the Orient Land Trust in Colorado and, before that, a staff attorney at Friends of the San Juans in Washington state, Trainer has engaged in plenty of battles over environmental protection. She claims some ranchers never saw letters they supposedly signed in support of Lunny. And she notes that, while competition in the beef and dairy industries poses significant challenges, the Point Reyes ranchers receive large government subsidies - not least of which are their cut-rate leases.

The park service has repeatedly expressed support for agriculture in the pastoral zone. And in 2012, Salazar directed the park service to reassure ranchers by offering to lengthen their lease extensions from 10 to 20 years. In contrast, Salazar argued that Lunny knew when he agreed to buy the oyster operation that its land lease would expire in eight years.

"It's fundamentally very simple," says Trainer. "It's a contract issue."

Thanks to Feinstein, a 2009 appropriations bill authorized Salazar to extend Lunny's permits for ten years. (See Pub. L. No. 111-88 at § 124.) But Salazar chose not to, writing that the oyster business was the only use "preventing the conversion of Drakes Estero to designated wilderness" as envisioned by the Point Reyes Wilderness Act of 1976.

Public records at least as far back as 2003 indicate that park officials never planned to renew the oyster lease. One memo, written in February 2004 by the Interior Department's San Francisco field office, concluded that "the park service is mandated ... to convert potential wilderness, i.e., the Johnson Oyster Company tract and the adjoining Estero, to wilderness status as soon as the nonconforming use can be eliminated." Lunny says the park superintendent at the time - Don L. Neubacher, whom he'd known for years - at first advised him not to buy the business but then "called me back the next day and made clear he would be happy if we took over." Yet in March 2005, Neubacher explicitly wrote to Lunny that "no new permits will be issued" after the oyster farm's lease ended. Lunny had already started running the business and sunk money into fixing it up, but escrow was still open and he could have gotten out of the deal. The park service and Neubacher - now superintendent at Yosemite National Park - have declined all comment on the dispute. Lunny's supporters claim in their Ninth Circuit brief that the park service's approach to conservation is "archaic" and reflects outmoded methods.

Attorney Prows says questions of an agency's discretion and what decisions a court can review are of enough national importance to merit a U.S. Supreme Court hearing. A former clerk for the International Court of Justice at The Hague and then in London for an international arbitrator, Prows wasn't involved in environmental law until he helped represent the Micronesian island of Palau at the United Nations on matters concerning climate change and over-fishing. That work helped get him his current job.

Prows and Briscoe argue that Salazar misinterpreted the Wilderness Act, which Prows says expressly allows for nonconforming uses; and that, they say, constitutes an abuse of discretion. Prows also insists the land originally was designated only as "potential" wilderness because the state of California retains mineral rights in the estuary. Lunny pays the state about $20,000 annually to use the water bottoms under a lease that runs until 2029. Oyster farm supporters seized upon those points to pressure the state to assert its rights. Says Lunny: "If the state thought our leases weren't valid, they wouldn't be accepting our money." But California's Department of Fish and Game, which administers the lease, said in 2008 that the arrangement was contingent on the feds renewing their permission.

The oddest part about the whole debate is that so far no federal court has evaluated the scientific and environmental questions about the oyster company's impact - except to the extent judges have found Lunny unlikely to prove his case that Salazar should have weighed the impact in exercising his discretion. Prows claims Salazar needed good reason not to renew Lunny's permit and could surely have offered legitimate evidence. "But he wrote what he wrote, and in our system public officials are held accountable for what they actually do, not what they might have done."

Prows can't wait to argue that the government's decision and other actions were "extraordinarily abusive." But first, he'll have to convince the U.S. Supreme Court that Lunny's case has merits that lower courts didn't see - and that closing the oyster operation in the meanwhile would be prohibitively harmful.

Legal actions now behind Lunny include a complaint he filed in May 2012 under the National Environmental Policy Act concerning the park service's draft environmental impact statement. The Interior Department rejected the complaint, saying: "We found no evidence, documents, DEIS revisions, or witnesses that supported the complainant's allegations." The department also dismissed an Information Quality complaint Lunny later filed making similar allegations; it said "the information challenged in your complaint has not been used and will not be used in a decision-making process." This month, Lunny faces a hearing in Marin County Superior Court on new constraints the California Coastal Commission imposed in 2013 and related claims Lunny filed this January.

Drakes Bay Oyster Company employs about two dozen people in six small, weather-beaten buildings. They work long hours and receive no health benefits, and many live in trailers on the property. They motor back and forth to the racks of metal nets that hold oysters in various stages of growth in the cold water where the estuary meets the bay. Visiting customers mill around picnic tables next to giant piles of discarded shells, grilling oysters or eating them raw.

Above the oyster operation is the beef ranch where Lunny, 56, grew up and where he now lives with his wife and children. His parents have managed the ranch under leases that began before he was born. He and his sister Ginny Lunny-Cummings run the oyster company, and with his brothers he owns an earthworks and grading company in Nicasio, about 20 miles inland. When Lunny bought the oyster business, he says, his plan was to come out even by 2012, after recouping the $700,000 he spent on cleaning up and improving the property. "There was no controversy at the time," he says, and he thought he'd have a "good shot" at getting the lease renewed. Lunny says the operation first turned a profit in 2012, right on schedule, and his gross receipts are about $1.5 million a year, which provides his family a small income, after expenses.

"Lunny had a very good leasing deal," says Neal Desai, field director at the National Parks Conservation Association in San Francisco, a vocal critic who says the land should now be protected as taxpayers have paid and planned for. "He got everything agreed to and more out of the arrangement. The people of the U.S. are still waiting for their end of the deal to be fulfilled."

But John Finger, who owns Hog Island Oyster Company in nearby Tomales Bay, says it's unlikely Lunny's getting rich off oysters. Finger says he always made enough to live on oystering but didn't become highly successful until he opened his own restaurant. "It's a tough business to make money in," he says, adding that most of the profitable West Coast oyster operations are in Washington.

Before the current altercations began, the park service touted the Lunnys' organic beef ranching. Kevin Lunny appeared in a National Park Service brochure called "Stewardship Begins With People" (his name and photo are gone now). His oyster farm first drew wide attention in 2007, after then-superintendent Neubacher complained to Marin County Supervisor Steve Kinsey that noise from the operation was criminally harming seals. The Board of Supervisors held a hearing and then asked Feinstein for help. Kinsey also sought the advice of Corey Goodman, a member of the California Council on Science and Technology, a state policy advisory board that he now chairs.

Goodman, a biotech entrepreneur who lives on a ranch near Point Reyes, also was the founding chairman of the nonprofit that owns the Point Reyes Light, and he has been a neuroscience professor at both UC Berkeley and Stanford. He soon became the park service's loudest critic: Not only were its environmental impact statements wrong, he says, they were deliberately misleading. In place of measuring sounds generated by Lunny's oyster craft, the reports used noise levels measured from police motorboats, Goodman says. He also argued that the park service implied that measurements of oyster feces taken in Japan in the 1950s were made recently in Drakes Bay. (He made these points with Lunny in the complaints filed with the Department of the Interior in 2012.) Federal officials did eventually concede that one 2007 report, "Drakes Estero: A Sheltered Wilderness Estuary," mischaracterized how the oyster operation affected nearby sediment deposits and fish populations.

And the debate continues. Swing by the bakery, the book store, the coffee cart, or even the Palace Market in Point Reyes Station, and you're bound to overhear comments about the impacts of oyster boats on eelgrass, the relationship between seals and aquaculture, or the appropriate limits of federal oversight. As might occur in any small, tight-knit community, everyone here has become an expert about the biggest local controversy. Somewhat more unusual is an idea to bring residents from across the area into mediation. Until that happens, there's plenty of room for disagreement, so why not join in?

Heading north from San Francisco along the coast, you'll eventually reach an intersection just before Point Reyes Station, with an informal baseball diamond and a wooden sign advertising Drakes Bay Oyster Company. Note the word "Open" pasted across it. Head into town to join the conversation. Or, if you just want a taste, go west along Tomales Bay, pass the hamlet of Inverness and, halfway out the point, turn left down the narrow dirt road to the estuary any day of the week from 8:30 a.m. to 4:30 p.m. For now.

Kelly O'Mara is a San Francisco Bay Area writer.

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Kari Santos

Daily Journal Staff Writer

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