Business & Real Estate

Sacramento County ordered to post bond while it appeals $107 million jury verdict

A federal judge has ordered Sacramento County to post a bond of more than $50 million while it appeals a jury verdict that awarded $107 million to two gravel mining families who contend the county unfairly forced them out of business years ago.

The order by U.S. District Judge Kimberly J. Mueller was filed in federal court Friday morning in Sacramento and could result in the county having to spend hundreds of thousands of dollars in premiums to obtain the bond, according to court filings.

Sacramento County officials have been fighting the March 2017 verdict for more than two years, and have argued in court papers that the county should not be required to post a bond while the matter is under appeal.

Mueller’s order stayed imposition of the verdict while the county continues its appeal, but rejected the county’s position that it should not have to post a bond while the legal fight goes on.

“To effectuate the stay, the county will be required to post a bond of 50 percent of the judgment,” Mueller wrote in her order, which requires the bond to be posted within 30 days.

Neither the county nor a lawyer for the plaintiffs had an immediate comment on the order Friday.

The case stems from a bitter fight by two gravel mining families who charged that the county had driven them out of business to benefit a rival firm, the Teichert Construction company.

The case was brought by Joe and Yvette Hardesty and Jay Schneider. The Hardestys leased a mine in the Sloughhouse area from the Schneider family’s ranching operation and contended that political pressure from Teichert led the county to radically increase fees assessed against the mining operation.

“Hardesty’s business was ruined,” the plaintiffs wrote in court documents.

The jury agreed, awarding $75 million in compensatory damages to the Hardestys and $30 million to Schneider. The jury also awarded $1.8 million in punitive damages to be paid by county officials, including a $25,000 award against Roger Dickinson, who was chairman of the Board of Supervisors when the county issued a cease-and-desist order against the mining operation.

Teichert was not named in the suit.

The county has argued in court filings that it can pay the award if its appeals fail, but that if it was forced to post a bond “the county would likely need to divert funds from important and deserving programs that benefit the residents of the county.”

“Thus, while the county is vigorously pursuing its appeal, there is no room for reasonable doubt that it can pay the judgment later if necessary,” the county argued in court filings last July.

At that time, the county estimated it might pay as much as $500,000 in premiums annually to obtain a bond for the full amount of the judgment.

Lawyers for the families argued that the county “has had ample time to post the required bond payment” and that the plaintiffs need the money they were awarded.

“As the court knows and the jury found, defendants deprived plaintiffs of their livelihood a decade ago, putting both families under intense, continuing financial pressure...,” the families’ lawyers wrote in a brief filed in March. “Plaintiffs, who may not be able to forebear much longer, respectfully request that the Court require the County to post a full bond.”

Sam Stanton has worked for The Bee since 1991 and has covered a variety of issues, including politics, criminal justice and breaking news.