Miners win $100 million from Sacramento County in political influence case

Rocks cover a Teichert Construction mining area. A jury found Sacramento County officials aided Teichert, putting gravel mines out of business.
Rocks cover a Teichert Construction mining area. A jury found Sacramento County officials aided Teichert, putting gravel mines out of business. Sacramento Bee file

A federal court jury on Tuesday awarded more than $100 million in damages to two gravel mining families that accused Sacramento County government officials of putting them out of business for the benefit of the rival Teichert Construction company.

After a day and a half of deliberations, the U.S. District Court panel in Sacramento awarded $75 million in compensatory damages to Joe and Yvette Hardesty and $30 million to the Jay Schneider family.

The verdict also hit three county officials with punitive damages, including Roger Dickinson, the former state Assembly member who was chairman of the Board of Supervisors when the county imposed a cease and desist order on the joint Hardesty-Schneider mining operation. The jurors found Dickinson liable for a $25,000 award against the Schneiders only.

Retired Sacramento County Planning Director planner Robert Sherry was hit with $750,000 in punitive damages against the two families, while jurors awarded the Schneiders $1 million from county aggregate resource manager Jeff Gamel.

In the trial that lasted more than a month, the plaintiffs charged that what was known as the “Historic Schneider Mine” had been running for decades as a “vested” operation with approval from Sacramento County. The Hardestys, who leased the mine located off of Meiss Road in the Sloughhouse area from the Schneider family ranching operation, charged in court papers that the county’s attitude changed after they “caught the attention of influential competitors like Teichert.”

“Teichert’s newer mines require expensive permits, and it was upset that Hardesty enjoyed a vested right and was able to offer better prices to customers of aggregate,” the Hardestys’ attorneys, G. David Robertson of Reno and R. Paul Yetter of Houston, said in a trial brief. Teichert then “brought its political influence to bear on government agencies and entities, including the County, which acquiesced.”

Outside court, Yetter said in response to the verdict, “This was a very hard-working jury. They listened for weeks very carefully, and we’re gratified with the verdict they rendered.”

Sacramento County’s privately-retained lawyer, Gregory O’Dea, said he will try to get U.S. District Court Judge Kimberly J. Mueller to overturn the verdict in post-trial motions.

“We appreciate the jury’s service and very hard work, but we respectfully disagree with the jury’s conclusion,” said O’Dea, who represented the named defendants as well as the county. “We think it’s not supported by the evidence.

“We think that the county employees and the county did nothing wrong and that the employees worked very hard trying to apply the law to everyone, and that’s what we intend to establish with the court at our post-trial hearing.”

In their court papers, the county’s attorneys said that officials took action against the Schneider mine in April 2010 because “the surface mining activities then being conducted on the property were in violation of the zoning code.”

In a 2010 report on the Schneiders’ appeal to the Board of Supervisors, county officials said they took action to rezone and require a use permit at the site due to “a dramatic increase in production volumes in recent years.”

The Board of Supervisors five months later upheld the factual findings and voted to deny Schneider’s appeal. The county lawyers say the Schneider plaintiffs twice challenged the supervisors’ action in Sacramento Superior Court but wound up dropping their cases.

The Teichert company was not named in the federal suit, and company representatives were not immediately available for comment. Dickinson did not return a phone call and Sherry could not be reached for comment.

The Hardestys’ trial brief said the Teichert company sought the help of the late state Senator Dave Cox and former U.S. Rep. Dan Lungren “to pressure various agencies” to put the couple out of business.

“The County and elected officials had for years received contributions of large sums from Teichert executives and lobbyists,” the brief said.

In 2008, the U.S. Army Corps of Engineers – “under pressure” from the congressman – investigated the mine and issued a cease and desist order on the operation, claiming that “fill material discharged into nearby wetlands,” according to the brief.

The Hardestys charged that Teichert also lobbied several state agencies to investigate the mine and that in 2009 the state Office of Mine Reclamation removed the couple’s operation from a list of approved vendors to sell aggregate to public agencies.

County officials continued to meet regularly with Teichert, the brief said. In February 2010, the county hit the Schneiders with an order “to cease mining or get a permit and have the ranch rezoned, which would effectively revoke the vested right,” the brief said.

Later in 2010, according to the brief, the county raised the deposit that the mining operation had to post to fund future reclamation efforts. The bond skyrocketed $164,000 to $830,000. Eventually it reached $8.8 million, the brief said.

“In a final twist of the knife, (the county) barred Hardesty from selling stockpiles worth million of dollars, leaving them worthless,” the Hardestys’ brief said. “Hardesty’s business was ruined.”

Andy Furillo: 916-321-1141, @andyfurillo. The Bee’s Sam Stanton contributed to this report.