Houston litigation firm Yetter Coleman secured a $58.5 million settlement for the owner of a gravel mining company that accused Sacramento County, California, of violating the miner’s constitutional right under the 14th Amendment to practice his chosen profession.
Plaintiffs Joe and Yvette Hardesty reached the settlement with Sacramento County last month, a week before a second jury trial was scheduled to begin.
The firm touts the settlement as one of the largest ever in a business civil rights case nationwide.
A federal jury awarded $75 million to the Hardestys in 2017 and $30 million to the family who owns the land. It also awarded an additional $2 million in punitive damages to the families.
The Ninth Circuit Court of Appeals affirmed the liability finding but decided the award for damages were excessive and remanded for a new trial on damages.
The $105 million was “perhaps the highest-ever substantive due process award,” the county wrote in its brief requesting a U.S. Supreme Court review, which was denied. Yetter Coleman lawyers said their research turned up settlements far less than $58.5 million.
“I think the particularly gratifying thing is that … we were able to get a settlement that was very, very close to that original amount,” said Justin Tschoepe, Yetter Coleman partner and a lead attorney for the Hardestys.
A lawyer with Cole Huber, the firm representing the county, declined to comment.
Joe Hardesty began operating the gravel mine in the 1980s at the Schneider Historic Mine, owned by Jay Schneider and his family. The Schneider family has a vested right to mine the property that exempts it from obtaining costly permits, lawyers argued.
Hardesty spent years buying materials at auctions to scrap together his business, Hardesty Sand and Gravel, Tschoepe said.
The business’ success drew the ire of competitors who had to comply with permitting requirements, the lawyers said. Hardesty and Schneider argued that county authorities, responding to pressure from competitors, effectively shut down the business in 2010.
The county refuted claims in the 2017 trial that it was doing favors for competitors and argued that an increase in Hardesty’s production warranted a conditional use permit, according to The Sacramento Bee’s coverage of the trial.
Hardesty’s legal team was hopeful they’d reach a settlement when the Schneiders settled with the county earlier this year for $20 million, Tschoepe said, but the parties couldn’t come to an agreement during a September mediation in California. Their equipment had just been sent from Texas to California for the trial when the parties reached an agreement via Zoom on Oct. 2, Tschoepe said.
“Our local counsel’s paralegal had to go to the hotel and meet the people just to say, ‘Turn around and go back to Texas,’” Tschoepe said. “We were very much on our way and ready to go.”
As part of the settlement, the county reaffirmed the existence of the vested right, but Tschoepe said it’s unclear whether Hardesty, now in his mid-60s, will rebuild the company. The price tag to do it all over again would probably be about $30 million, Tschoepe estimated.
“It was a 13-year fight for him, and it took a lot out of him and his family,” Tschoepe said. “He had created this really unique, incredible mining operation that was doing so well and brought the attention of these huge competitors in the area, and it just got taken away from him arbitrarily by the government.”
“It’s great that at the end of the day the county is finally compensating them for that in the settlement,” Tschoepe said. “But it’s been a rough 13 years.”