Court overturns sanctions, due-process rulings in Los Alamos dispute

A New Mexico Court of Appeals ruling has narrowed Los Alamos County’s exposure in the long Sirphey dispute and sharpened the stakes for how the county handles future land-use appeals. In a memorandum opinion filed June 15, the panel reversed district-court sanctions and due-process rulings, leaving county officials with more room to defend the way a stop-work order was enforced and appealed.

The case traces back to 2019, when the county’s chief building official posted a red-tag stop-work order on a commercial building where Sirphey, LLC held a leasehold interest, citing a lack of permitting. Sirphey appealed to the Los Alamos County Board of Appeals, which orally denied the challenge and later issued brief written minutes. That sequence became central because the county code section referenced in the opinion required written findings for a final decision, a point that later fed the due-process fight.

The appellate panel identified the parties as Sirphey, LLC; the Board of the County Council of Los Alamos County; Michael Arellano, the county building official; and Hartline Barger LLP as a non-party appellant. The opinion says the appeal covered three district-court rulings in the long-running administrative case: denial of the county’s motions to dismiss, an order imposing sanctions, and due-process rulings. The court reversed the sanctions and due-process rulings.

The decision lands after years of parallel litigation in state and federal court over the same stop-work dispute tied to Sirphey, Prashant Jain, and related business interests including UnQuarked. In the federal case, CIV 22-0465 RB/LF, the U.S. District Court for the District of New Mexico treated the county-side dispute as part of a broader parallel proceeding while portions of the federal case were stayed. County records also show the Los Alamos County Council discussed threatened or pending litigation involving the Sirphey state and federal cases in closed session on March 28, 2023.

A district-court ruling in the state case had earlier found the county violated Sirphey’s due-process rights in every phase of the stop-work-order appeal, and a written order was later signed by Judge Jason C. Lidyard on March 14, 2024. The Court of Appeals’ reversal now changes the balance in that fight, especially for the next developer, neighbor, or business owner who challenges a county land-use call and tests whether oral decisions and sparse minutes can survive in court.