Did you read the story? -- it went to court and Khosla won. Apparently the land rights stem from the 1848 Treaty of Guadalupe Hidalgo, which predates California statehood, therefore the CA Constitution doesn't apply.
Yes just skimmed it again. Maybe I missed a reference but I can't see it. I did read the MercuryNews link posted elsewhere, interesting stuff, but my conclusion is still the same: Vinod Khosla is being a real jerk here.
Why hasn't this gone to court already?