Conspiracy theory v. the First Amendment
IOWA CITY– Attorneys for the parties in a lawsuit involving the City of Coralville met in the courtroom once again on Thursday, Jan. 24.
No ruling has been made on Coralville’s request for the plaintiffs to provide additional documents, but the city’s legal counsel politely asked Sixth Judicial District Court Judge Marsha Bergan to expedite her decision.
The original lawsuit, filed in March 2012 by a group of Coralville-area business people and developers, challenged the City of Coralville in its deal with California-based developer Oliver McMillan to move the Von Maur department store from Sycamore Mall in Iowa City to Iowa River Landing in Coralville. The petition claims Coralville unlawfully gifted the $1.5 million Von Maur property; that moving Von Maur from one city to the other without creating new jobs violates Iowa’s code regarding economic development assistance; and that using Oliver McMillan to transact the deal circumvents Iowa law by allowing it to act as an urban renewal agency. The plaintiffs sought an injunction to halt the deal, but were denied.
In April, Coralville responded with a counterclaim against the 26 plaintiffs, stating the plaintiffs’ lawsuit constituted civil conspiracy and interference with contract.
On behalf of the city, attorney David Tank of Dorsey & Whitney, LLP, argued his motion to compel the court, asking Bergen to order the plaintiffs to produce more documents with information on each of the petitioners. The city also asked the court to direct plaintiffs to pay all costs and attorney fees associated with the motion.
Plaintiffs’ attorneys Robert Hatala and Matt Adams, of Simmons Perrine Moyer Bergman, PLC, did respond to discovery requests in April, turning over more than 15,000 pages of documentation, including emails between the plaintiffs, local business people and other members of Citizens for Responsible Growth & Taxation (CFRG&T). Most of the plaintiffs are members of CFRG&T, a group of citizens who organized to advocate for transparency in government finances and lobby for reform in the state’s Tax Increment Financing laws.
However, Tank contended, some of the emails contained redactions, with information he feels key to proving the city’s counterclaim blacked out by magic marker.
“Since the hearing on the injunction, where the plaintiffs announced to the public that they are concerned citizens, acting with the sole goal of protecting the taxpayers of Coralville, we find there is quite a bit of room for debate,” said Tank.
Tank said the city sought more documentation to show the motives behind the complaint, information about who is financing the lawsuit, and disclosure of any third party involvement.
“It appears this case has not been funded by the plaintiffs, but by silent partners of the plaintiffs, who are not local businesses, but huge business entities who are trying to stifle competition,” said Tank. “Specifically, when the curtain went up a bit, we discovered that namely, among the parties behind this litigation, unnamed and unidentified are interests as varied as Sycamore Mall and General Growth Properties, and local developers who would have been anxious and willing to take this work had they stepped up and proposed an alternative.”
General Growth Properties (GGP) is the real estate investment trust that manages Coral Ridge Mall and owns or has interest in 143 regional shopping malls in the United States and Brazil, according to its website.
Tank described General Growth’s involvement as the pot calling the kettle black.
“There is no company more involved in retail development in this country that has been as significant a beneficiary of the types of urban development programs that are under attack in this case,” said Tank. “General Growth was the beneficiary of the specific tax increment financing area that the plaintiffs in this case take such offense at.”
Tank allege the plaintiffs’ planned a three-pronged attack against the city, and if the court would allow further discovery, the documents would prove that the lawsuit was filed with an illegitimate motive, as part of a conspiracy to interfere with the city’s contracts on the development.
In the petitioners’ response, Hatala argued that the city’s motion is a way to make the process “as time consuming, expensive and overbearing as possible in order to achieve their goals of stifling dissent, discouraging public discussion and avoiding the consequence of their actions.” Further, Hatala said last week, the type of information the city seeks is protected by the U.S. Constitution, such as who attended CFRG&T meetings– whether plaintiffs or others– the group’s activities, and communications between CFRG&T members and any other persons.
“The plaintiffs are justifiably exercising their right to petition their government and to free speech,” said Hatala. “The city’s request is clearly a retaliatory action. It’s nothing more than an attempt to get into personal relationships that are protected by the First Amendment.” The relatively few redactions made were to protect individuals’ privacy regarding their participation in and contributions, he said.
Adams also argued that each of the city’s interrogatories was answered in full.
“The city’s request is a straight-up fishing expedition,” Adams told the court. “They have alleged theories of civil conspiracy and interfering with contracts, but they did not identify the contracts. These theories are without support in fact or in law.”
The two-day evidentiary hearing last March provided the motive for the petition, Adams said, and makes it clear the case is not a sham.
“This is a group of plaintiffs that decided to petition their government, and challenge what they believe are illegal acts,” Adam said. To disclose how the group of plaintiffs is funded is not relevant, and if the court were to order it, would “open a can of worms,” such as disclosing how much a lawyer is charging or whether contributions by the parties were equal or pro rata.
Plaintiff Kevin O’Brien, the spokesperson for the plaintiff’s group, did not return messages seeking comment.