Judge Throws Out Hideout Developer's Accusations of Antitrust Violation – For Now
One of the legal actions generated by the Hideout annexation controversy went to a Third District Court hearing on Friday, Jan. 29.
Summit County asked the court to dismiss allegations, from developer Nate Brockbank, that the county is violating antitrust law. Judge Richard Mrazik dismissed the claims, but left the door open for them to be brought back.
Last year, Summit County objected, on a number of fronts, to actions by the Wasatch County town of Hideout to adversely annex into Summit. On Oct. 16, the Hideout Council approved an annexation of 350 acres near Richardson Flat, where Brockbank and his company “NB 248” are expected to develop a commercial and residential town center.
Last fall, Brockbank filed a counterclaim against one of the Summit County lawsuits. He asserted that the county had filed several legal actions against Hideout’s plans, and lobbied the Utah Legislature last summer to repeal House Bill 359, which enabled Hideout’s annexation.
The county’s motive, he claimed, was to stifle a competitor. He said the county has plans to develop 125 acres its own along the U.S. 40 frontage road, known as the Florence Gilmor parcel, into a project with 1.2 million square feet of commercial and over 1,500 residential units. The county’s land is about a mile away from the Hideout annexation.
Brockbank’s filing asserted in count one that the county has violated the federal Sherman Antitrust Act; and count two, that it violated the Utah Antitrust Act.
Summit County argued it has a so-called’ “state law immunity” against anti-trust allegations. The Judge, citing case law and U.S. Supreme Court precedent, said the County has been given authority from the legislature to create regulations for land use, even when that might have anti-competitive effects.
“That there would be anti-competitive results of the county deciding where it wants density in the form of commercial development and affordable housing, where it wants open space, given its existing plans for density and commercial development, and the fact that it wants a say in that process, meaning it does not want to be cut out of its authority by having parcels of land that will be adjacent to county land annexed into another jurisdiction over which it has no land-use authority at all.”
The Judge dismissed counts one and two, but ‘without prejudice’ meaning they could be brought back.
Brockbank’s attorney, Jefferson Gross, had argued that while a county has the right to lobby, or file litigation, Summit’s motive here was self-serving to suppress a development that would compete withits own project.
Judge Mrazik said he couldn’t rule out the possibility that facts might come out to support that claim. He said that the County’s counsel, Peter Stirba, conceded that too.
“Indeed, Mr. Stirba, showing commendable candor, acknowledged that there may be a set of facts sufficiently egregious, where the County is acting in its own best interests, in an anti-competitive way, that would justify an exception for not applying the state’s Action Doctrine.”
The Judge also dismissed count no. 3 of Brockbank’s filing—that the county “violated equal protections of the law—and no. 4—that they committed “tortious interference with economic relations” of the developer.
The Judge noted those were dismissed for procedural defects, and again, “without prejudice” so they could be brought back. He said the county still has the option later to argue the claims didn’t have sufficient notice.
Afterward, Summit County Attorney Margaret Olson wrote to KPCW that they were pleased with the ruling and continue to believe the entire counterclaim lacks merit. Peter Stirba said in court that the allegations about the Gilmor parcel are just speculation. He said there has been no land-use decision on that property that’s adverse to Brockbank.
On the other hand, Jefferson Gross told KPCW by email that they were disappointed but appreciate the opportunity to conduct discovery. He said in court they have subpoenaed documents that show the county’s plans for a dense multi-use development. He wrote that they will show the county’s arguments about preserving open space are a ruse.