Restoring a family legacy while righting a historic wrong

There has never before been a real estate transaction like the Bruce's Beach transaction.

It returned to a Black family the oceanside resort property that had been taken from them a century earlier in an act of racial discrimination aimed at driving Black beachgoers and families from the area.

"This has never been done before," said George C. Fatheree III, who led the pro bono project. "There was no legal precedent. There were no laws that enabled this."

The city of Manhattan Beach condemned the Bruce family's popular resort in 1924. Years later, the land was transferred to the state and then to the county, which operates a lifeguard administrative building on it.

When the county determined to return the land to the descendants of the original owners, Fatheree represented the family. "I was able to develop and implement a strategy that ... enabled the family and the county to do this in a way that made sense legally and economically for the family," he said.

Working with "dozens of attorneys" from Sidley Austin and Munger, Tolles & Olson, he and his teams had to solve a myriad of legal questions from constitutional law to tax and family law. His first step was to hire a genealogist to verify his clients' claim to the land. He also worked with the county on a public process to vet any other claimants.

Fatheree and his teams also spent time planning for things to go wrong. "We were able to think very creatively and strategically and anticipate what some of the major issues might be and then address those issues in how we were structuring the transaction," he said.

One problem they anticipated was a lawsuit that argued that the state constitution prohibited the county from giving government property to private parties. They researched and analyzed the issue and then helped draft legislation, SB 796, to resolve the problem. The new law removed some restrictions on the county's right to transfer the property and, more importantly, declared the government's duty to right racist wrongs when it can.

When the lawsuit arrived, Byron McLain represented the county board of supervisors. He convinced Los Angeles Superior Court Judge Mitchell L. Beckloff that the transfer was not a gift because there was a strong public purpose for it. "This wasn't just about the Bruce family," he said. "This would give future Los Angeles County citizens, particularly minorities, particularly African Americans, confidence that there was recourse if property from them was taken wrongfully in the future in any way." Ryan v. Los Angeles County Board of Supervisors, 21STCV38353 (L.A. Super. Ct., filed Oct. 19, 2021).

Beckloff ruled that "righting a government wrong perpetrated in breach of our core and fundamental constitutional principles works to strengthen governmental integrity ... and works to eliminate structural racism and bias."

After the initial transfer last summer, the Bruce family leased its former resort property back to the county. But early this year, the family sold it to the county for $20 million.

Fatheree and his teams also anticipated and planned for that possibility. Restrictions still on the land prevented any development, and Fatheree didn't want to give his clients only a Pyrrhic victory. So in his negotiations with the county, he set up a structure that allowed the Bruces "to regain some of what that property represented for that family," intergenerational wealth. "I'm very proud of the fact that we anticipated that issue," he said. "This had never been done before."

- Don DeBenedictis