Gillmor v. Thomas

F I L E D
United States Court of Appeals
Tenth Circuit
PU BL ISH
June 5, 2007
UNITED STATES COURT O F APPEALS Elisabeth A. Shumaker
Clerk of Court
TENTH CIRCUIT

NADINE GILLM OR, individually and
as trustee of the Nadine Fausett
Gillmor Trust; M ILTON O. BITNER
COM PA NY, a Utah corporation;
EVERGREEN DEVELOPM ENT, a
Utah limited partnership; ELLA M .
PACE, an individual; DW AYNE M .
PA CE, a trustee of the Dwayne M .
Pace Revocable Trust; JOA N J. PACE,
trustee of the Joan J. Pace Revocable
Trust; GALE W . PACE, an individual;
KATHLEEN D. PACE, an individual;
and AN DERSON DEV ELOPM ENT,
LLC, a Utah limited liability company,
No. 06-4124
Plaintiffs-Appellants,

v.

DAVID L. THOM AS; DAVID
ALLEN ; M ICH AEL BAR ILLE;
SHAU NA K ERR; BOB RICHER;
KEN NETH W OO LSTENH ULM E;
TOM BRENNAN; CYNTHIA
C ALLA W A Y ; M A X G REEN H ALGH;
B RU CE TA Y LO R; D O N N A V AN
B UREN ; and M IK E WA SH IN GTON,
as individuals,

Defendants-Appellees.

Appeal from the United States District Court
for the District of Utah
(D .C . No. 2:05-CV-823-PGC)
Bruce R. Baird (A lain C. Balmanno with him on the briefs), H utchings, Baird, &
Jones PLLC, Salt Lake City, Utah for the Plaintiffs-Appellants.

Jody K. Burnett (George A. Hunt and Robert C. Keller, W illiams & Hunt; and
Steven W . Allred, W oolsternhulme, Kerr and Richer, Salt Lake City, Utah, with
her on the briefs), W illiams & Hunt, Salt Lake City, Utah for the D efendants-
Appellees.

Before L UC ER O, M U RPH Y, Circuit Judges, and R OBIN SO N, * District Judge.

L UC ER O, Circuit Judge.

This case presents the latest battle in a legal war being waged by several

landowners against Summit County, Utah and its zoning regime. Landowners 1

brought suit against several County Officials 2 alleging that their administration of

*
The Honorable Julie A. Robinson, United States District Court Judge,
District of Kansas, sitting by designation.
1
“Landowners” refers collectively to: Nadine Gillmor (individually and as
trustee of the Nadine Fausett Gillmor Trust), the M ilton O. Bitner Company,
Evergreen Development, Ella M . Pace, Dwayne M . Pace (as trustee of the
Dwayne M . Pace Revocable Trust), Joan J. Pace (as trustee of the Joan J. Pace
Revocable Trust), Gale W . Pace, Katherine D. Pace, and Anderson Development,
LLC.
2
“County Officials” refers collectively to: David L. Thomas, Chief Deputy
County Attorney for Summit County; David Allen, Director of the Summit
County Department of Community Development; M ichael Barille, Planning
Director of the Summit County Department of Community Development; Bob
Richer, Kenneth W oolstenhulme, and Shauna Kerr, members of the Board of
County Commissioners of Summit County; Tom Brennan, Cynthia Callaway,
Bruce Taylor, and M ichael W ashington, members of the Snyderville Basin
(continued...)

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Summit County’s zoning ordinances constitutes a pattern of extortion in violation

of the Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C.

§ 1962. Concluding that County Officials had committed no illegal predicate acts

as required to support a RICO claim, the district court granted summary judgment

against Landowners and dismissed their case. W e AFFIRM .

I

Summit County’s zoning scheme is administered by the Board of County

Commissioners (“BCC”). BCC Commissioners, of whom there are three, are

elected officials w ho serve four-year terms. In 1995, the BCC passed County

Ordinance No. 268, establishing the Snyderville Basin as an independent planning

district, and creating the Snyderville Basin Planning Commission (“SBPC”). The

SBPC’s seven members are appointed by the B CC and serve at that body’s

pleasure. Although the SBPC has the power to approve some plans, the BCC

holds final authority over more complex developments. In 1997, after numerous

public hearings w ere held by the SBPC and the BCC, the BCC adopted County

Ordinance No. 321, establishing a new General Plan for zoning in the Snyderville

Basin. Following additional public input, the BCC passed a comprehensive

Development Code in 1998. Both the General Plan and the Development Code

2
(...continued)
Planning Commission; and M ax Greenhalgh and Donna Van Buren, former
members of the Snyderville Basin Planning Commission.

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were amended in 2004, but maintain the characteristics with which Landowners

take issue.

As codified in the General Plan and Development Code, Summit County

employs a “performance zoning” or “incentive zoning” system. Under this

system, a relatively low “base density” has been established throughout the

Snyderville Basin, generally allowing developments of less than one unit per 20

acres. On lands designated “environmentally sensitive,” development is limited

to one unit per 40 acres. By maintaining low base densities, the County aims to

preserve “a lifestyle that is based principally on mountain, resort, and recreation

qualities; and where preservation and stewardship of the Basin’s natural resources

and scenic qualities are paramount.” Concentrated nodes of high-density

development are permitted at “appropriate locations.”

Overlaying these base entitlements is a “Development Potential M atrix”

(“M atrix”), by which:

Summit County will offer reasonable density incentives for projects
which further promote the goals and objectives of [the General] Plan,
thereby producing tangible community benefits. Density incentives
will be considered for appropriate: a) environmental enhancements;
b) tax base and economic enhancements; c) transfer of development
rights from less desirable development sites to more appropriate
sites; d) public facilities and amenities that exceed a specific project
[sic] requirements; e) open space that exceed [sic] project
requirements; f) restricted affordable housing; and g) compliance
with appropriate design principles.

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By entering into voluntary development agreements, developers are permitted to

build at densities that would not otherwise be permitted – in some cases up to five

units per acre. In exchange for density bonuses, local developers have offered a

variety of contributions, including: conservation easements, school funding, new

public trails, increased open space, wetlands preservation, and new public parks.

BCC development agreements typically include a provision forbidding the

developer from participating in any legal challenge to the County’s zoning

ordinances.

Landowners have brought three separate lawsuits challenging the validity

of this zoning scheme in Utah state court: Gillmor v. Summit County, No.

040500427; Evergreen Dev. v. Summit County, No. 050500059; and Evergreen

Dev. v. Summit County, No. 050500112. On October 3, 2005, they filed a

separate, 644-paragraph complaint in federal district court, alleging that County

Officials engaged in a pattern of racketeering activity “through the enforcement

of illegal and/or invalid general plan and zoning ordinances and other illegal

practices, the imposition and collection of illegal school impact fees and the

extortion of [transferable development rights], all in violation of 18 U.S.C.

§ 1962(c).”

In support of this claim, Landowners list 41 predicate acts of alleged

racketeering. Several of these alleged predicate acts are voluntary development

agreements between the County and various developers by which the County

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obtained community benefits in exchange for density bonuses. None of the cited

agreements involve Landowners. Among the listed predicate acts, only eight

incidents involve Landow ners:

(1) “Evergreen School Impact Fee Letter” 3 – On January 30, 2002,

Evergreen Development (“Evergreen”) submitted a Sketch Plan Form to the

County regarding its proposed Quarry M eadows Subdivision. Sometime

thereafter, Chief Deputy County Attorney David L. Thomas met with counsel for

Evergreen. Following that meeting, Thomas sent a letter to counsel addressing

two issues: W hether the sketch plan resulted in vesting of the 1998 ordinance;

and whether the County could restrict the development to fewer than 36 units

when it had previously approved a total of 36 unites at a similar development,

nam ed Q uarry M ountain R anch. Thomas listed 12 differences between the tw o

developments, including the following: “Quarry M ountain developed a school

bus stop. Q uarry M ountain is offering a school contribution. These are two

different w ays of addressing school impacts.”

(2) “Gillmor Statement” – In the July 1, 2004 edition of the Salt Lake City

Tribune, Thomas is quoted as stating that the County’s D evelopment Code “is

fair, rational and legal and we will defend it.”

3
For the sake of clarity we adopt the titles given to the alleged predicate
acts by Landowners, despite their questionable accuracy.

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 (3) “DCD/Evergreen M eeting” – David Allen, Director of the Department

of Community Development, M ichael Barille, Planning Director of the

Department of Community Development, and W illiam Pratt, County Planner, met

w ith Evergreen representatives in February 2003, to discuss the Quarry M eadow s

application. In that meeting, Allen and Barille explained that in order to develop

beyond the property’s base density, the developers would likely need to provide

additional community and recreational benefits.

(4) Quarry M eadows “W ork Sessions” – On April 22, 2003 and again on

August 26, 2003, Evergreen representatives met with SBPC and its staff regarding

the Quarry M eadows proposal. At both meetings, the commissioners indicated

that additional community and neighborhood benefits would be necessary to

achieve approval of Evergreen’s desired density bonuses. At the first meeting,

comm issioners also questioned whether Evergreen’s proposed school contribution

was sufficient to justify its desired density bonuses.

(5) “Quarry M eadows Staff Report” – On August 12, 2003, Pratt forwarded

a staff report to the SBPC describing the Quarry M eadows Sketch Plan. The

report notes that Allen and Barille raised the follow ing concerns, among others,

regarding the proposed development: “the need for more community and

neighborhood recreational benefits [and] the removal of major delineated

wetlands from proposed lots.” It also indicates that these concerns w ere

“addressed by the applicant.” Finally, the report describes the proposed

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comm unity and neighborhood benefits to include public trails, an enhanced

stream corridor, and playground/gathering area among other benefits.

(6) “Bitner-Redhawk Letter” – On September 23, 2003, Allen responded to

an inquiry from representatives of the Bitner Company regarding the development

potential of the “Redhawk” parcel. That letter states:

W ithout a transfer of density and assuming the design of the project
meets all of the eight land use and community benefit criteria
outlined in the Development M atrix, the maximum density on Parcel
9 would be 1 unit per 17.5 acres which would be approximately 7
units (this also assumes there are no sensitive lands on the parcel).
W hile this may appear to be low, density, it is my understanding that
adjacent parcels in M organ County are zoned 1 unit per 160 acres.

Hopefully this helps you understand my initial reading of the
documents and Development Code as it relates to these tw o parcels.
I would be glad to further discuss this with you if needed.

Landowners do not allege that this statement was inaccurate.

(7) “Pace M eeting” – In the Spring of 2004, Ella M . Pace and a real estate

broker representing the Pace family met with Barille and Allen to discuss the

development potential of Pace’s property. At that meeting, Barille correctly

stated that under the Development Code’s base-density allowance, the parcel

could be developed with no more than eight single-family units. He further

informed them that the wetlands portion of the property would have to be

maintained as open space, which Landowners contend is contrary to the Code’s

text.

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 (8) “Denial Letter” – On November 3, 2004, Anderson Development, LLC,

on behalf of several Landowners, submitted applications to develop several

properties. Nadine G illmor did the same. Attached to these applications were

letters asserting that Summit County’s Development Code is unconstitutional, and

violates both state and federal law. In the absence of valid zoning regulations, the

letters continued, the County was required to approve the applications as long as

they conform to state law. Allen responded with a letter noting that the zoning

regulations were legally adopted and continued to be in effect. Because

Landowners’ applications did not comply with the applicable regulations, Allen

informed them that their applications could not be processed.

On December 27, 2005, County Officials filed a motion for sum mary

judgment, arguing: (1) Landowners could not prove the existence of any

predicate acts; (2) Landowners lacked RICO standing; (3) County Officials held

absolute immunity from suit; and (4) County Officials held qualified immunity

from suit. In its response, Landowners stated: “Plaintiffs’ challenge to the

zoning and development plans and codes is another case in another court. . . .

The challenges Plaintiffs have raised in other courts to the invalidity, illegality

and unconstitutionality of the codes and plans are not before this Court for

decision.” On April 11, 2005, the district court held a summary judgment

hearing. Attempting to clarify Landowner’s argument, the following exchange

took place:

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 [Counsel for Landowners]: W e’re not asking you to rule on the
zoning code and to get into the weeds of the zoning code. This isn’t
a case where we’re saying, gee, this is roughly proportional or it
isn’t. W e’ve given you examples, your Honor and –

The Court: Let me make sure I understand that. As I understand it
from your brief, you’re not asking me to rule on the legality or
illegality of the codes or plans or things like that that are involved in
this case.

[Counsel for Landowners]: That’s correct.

Finding that no court had ruled the relevant zoning ordinances to be illegal or

unconstitutional, and that Landowners had waived such a challenge in the instant

case, the district court concluded that Landowners had presented no predicate acts

to support a RICO claim. Accordingly, it orally granted summary judgment in

favor of County Officials. Landowners now appeal from that order.

II

W e first address whether Landowners had standing to bring their RICO

claim. Although the district court did not address the issue, we are under a

continuing obligation to ensure that the district court had jurisdiction over the

case as an initial matter. See Local 514 Transp. W orkers Union of Am. v.

Keating, 358 F.3d 743, 749 n.6 (10th Cir. 2004) In order to bring a RICO claim,

a plaintiff must allege a violation of 18 U.S.C. § 1962, which consists of four

elements: “(1) conduct (2) of an enterprise (3) through a pattern (4) of

racketeering activity.” See Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479, 496

(1985) (footnote omitted). A “pattern of racketeering activity” must include at

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least two predicate acts. Deck v. Engineered Laminates, 349 F.3d 1253, 1257

(10th Cir. 2003). Additionally, “a plaintiff has standing to bring a RICO claim

only if he w as injured in his business or property by reason of the defendant’s

violation of § 1962.” Id.

In their complaint, landowners describe the allegedly extortionate conduct

of a “County Enterprise” in no small amount of detail. Although many of the acts

constituting an alleged pattern of racketeering activity involve non-parties, as

noted above, Landowners also allege several predicate acts directed toward them.

They further charge that these acts, which they characterize as attempted theft by

extortion, damaged them by reducing the development potential (and thus the

value) of their properties. These allegations are not conclusory, nor do they

“clearly appear[] to be immaterial and made solely for the purpose of obtaining

jurisdiction.” Bell v. Hood, 327 U.S. 678, 682 (1946). As such, they are

sufficient to confer RICO standing. 4 County Officials’ arguments to the contrary

4
County Officials argue that Landowners do not have standing because the
alleged RICO violations were not the proximate cause of Landowners’ injuries.
Absent such causation, of course, there is no standing to bring a claim. See Deck,
349 F.3d at 1257. Landowner’s theory of causation, to the extent such a theory
may be discerned from their complaint, is nebulous; this is because County
Officials are not alleged to have taken definitive steps to block development of
Landowners’ parcels. Nevertheless, taking Landowners’ allegations to be true,
we are satisfied they have met their burden of establishing a causal connection
betw een County Officials’ activities and some injury to their business or property.
See Sedima, 473 U.S. at 498-99 (generally taking a liberal view of causation
required to establish RICO standing, and rejecting a “racketeering injury”
requirement).

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go to whether the allegations are true, not whether they were sufficient to confer

jurisdiction.

III

W e review a grant of summary judgment de novo, applying the same legal

standard used by the district court. M ountain W . M ines, Inc. v. Cleveland-Cliffs

Iron Co., 470 F.3d 947, 950 (10th Cir. 2006). Summary judgment is appropriate

only where there is no genuine issue of material fact and one party is entitled to

judgment as a matter of law. Fed. R. Civ. P. 56(c). To succeed on a RICO claim,

Landowners must prove: (1) conduct, (2) of an enterprise, (3) through a pattern,

of (4) racketeering activity consisting of at least two predicate acts. Deck, 349

F.3d at 1257; see also Robbins v. W ilkie, 433 F.3d 755, 767 (10th Cir. 2006),

cert. granted, 127 S. Ct. 722 (2006). Under 18 U.S.C. § 1961, instances of

extortion or attempted extortion qualify as predicate acts. The Hobbs Act defines

extortion as “the obtaining of property from another, with his consent, induced by

wrongful use of actual or threatened force, violence, or fear, or under color of

official right.” 18 U.S.C. § 1951(b)(2). As the Supreme Court has noted, the

Hobbs Act adopted the common law definition of extortion with respect to official

misconduct. Evans v. United States, 504 U.S. 255, 263-64 (1992). Attempted

extortion “under color of official right” is “a public official’s attempt to obtain

money not due him or his office.” United States v. Troutman, 814 F.2d 1428,

1456 (10th Cir. 1987).

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 A

Before addressing the merits of Landow ners’ claim, we must determine the

scope of their waiver below. W e will not consider claims that were waived in the

district court. O’Connor v. City & County of Denver, 894 F.2d 1210, 1214 (10th

Cir. 1990). In their response to County Officials’ motion for summary judgment,

Landowners stated: “Plaintiffs’ challenge to the zoning and development plans

and codes is another case in another court. . . . The challenges Plaintiffs have

raised in other courts to the invalidity, illegality, and unconstitutionality of the

codes and plans are not before this Court for decision.” (emphasis added). They

reaffirmed this position at the summary judgment hearing. Accordingly, we will

not rule on the “invalidity, illegality[, or] unconstitutionality” of Summit

County’s G eneral Plan or its Development Code. As a general matter, w e give all

statutes a presumption of constitutionality and we must apply the same

presumption to the ordinances. See United States v. Pompey, 264 F.3d 1176,

1179 (10th Cir. 2001).

This holding lays waste to much of Landowners’ arguments on appeal.

Landowners are precluded from arguing that the zoning scheme: (1) deprives

them of their Fifth Amendment rights under Dolan v. City of Tigard, 512 U.S.

374, 391 (1994), or Nollan v. Cal. Coastal Comm’n, 483 U.S. 825, 837 (1987);

(2) imposes unreasonable exactions in violation of Utah law, see Banberry Dev.

Corp. v. S. Jordan City, 631 P.2d 899, 905 (Utah 1981); or (3) contravenes Utah

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Code Ann. § 53A-20-100.5 by requiring school impact fees. Landowners seek to

focus our attention on the acts of County Officials rather than the ordinances

themselves, but we fail to see how actions taken under the direct authority, and

for the purpose of enforcing a valid ordinance can possibly be deemed

extortionate. W e reject Landowners backdoor attempt to revivify their waived

claims.

B

Sensing, perhaps, that the scope of their waiver creates a substantial

impediment to success on their RICO claims, Landowners deploy a fallback

argument. They read our recent decision in Robbins for the proposition even

when an official acts with legal authority, his activities may still be extortionate.

In that case, plaintiff Robbins brought a RICO claim against Bureau of Land

M anagement (“BLM ”) personnel. Robbins, 433 F.3d at 767. In attempting to

obtain a right-of-way for the BLM , defendants took a number of adverse actions

against Robbins, including: “refusing to maintain the road providing access to

Robbins’ property, cancelling Robbins’ special recreation use permit and grazing

privileges, bringing unfounded criminal charges against Robbins, trespassing on

Robbins’ private property, and interfering with Robbins’ guest cattle drives.” Id.

at 768. Defendants argued that these actions could not support a RICO claim

because they had legal authority to take each of them. Rejecting this defense, w e

held:

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 Although Defendants do not enumerate specific regulatory provisions
permitting each of their actions, the regulatory authority may exist.
Nevertheless, we conclude that if Defendants engaged in lawful
actions with an intent to extort a right-of-way from Robbins rather
than with an intent to merely carry out their regulatory duties, their
conduct is actionable under RICO.

Id. (footnote omitted).

Relying on Robbins, Landow ners argue that even though County Officials’

actions w ere authorized by the zoning ordinances, their intent to extort property

gives rise to RICO liability. Landowners read too much into Robbins. In that

case, we noted that “C ongress meant to punish as extortion any effort to obtain

property by inherently wrongful means, such as force or threats of force or

criminal prosecution.” Id. at 769 (emphasis added). W e specifically

distinguished between “merely enforcing the law” and using “otherwise lawful

authority to extort.” Id. at 770. Although BLM officers may have had the power

to, for example, revoke Robbins’ special recreation use permit, they did so for an

improper purpose – to harass Robbins. It was not the use of authority we deemed

wrongful, but the abuse of authority.

The present case bears little resemblance to Robbins. W hereas in that case

Robbins alleged a pattern of harassing and punitive acts that were both targeted at

him and well outside the bounds of normal BLM practice, County Officials

merely engaged in the normal administrative duties required to enforce the zoning

ordinances. Landowners do not allege that they were treated any differently than

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other Summit County developers, all of whom are subject to the performance

zoning system administered by County Officials. None of the predicate acts

directed towards Landowners can be understood as “inherently wrongful” as that

term is used in Robbins. 433 F.3d at 769. M ost of those acts w ere simply County

Officials explaining to Landowners either how the zoning scheme works, or

rejecting allegations of the scheme’s invalidity. The only act that could plausibly

be called wrongful (in the sense that it was inaccurate) is Barille’s statement at

the Pace M eeting that wetlands areas must be maintained as open space, which

Landowners contend is contrary to the ordinance’s text. One isolated incident of

allegedly mischaracterizing a zoning ordinance, does not, however, constitute

extortion under § 1951(b)(2).

W e conclude that the district court was correct in finding Landowners

could not prove the existence of any predicate acts, as required by § 1961.

Accordingly, summary judgment was appropriate and the case was properly

dismissed. To allow Landowners to move forward on their RICO claim would

provide an alternative avenue to bring a facial or an as-applied challenge to a

statute’s validity by alleging that officials’ enforcement of that statute is

extortionate. W e find no basis for such an approach in RICO’s text nor in the

legislative history of the Act. As the district court correctly noted, such a holding

would put “the cart before the horse.”

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 IV

AFFIRM ED.

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