SACRAMENTO, Calif. (CN) — Solano County, California, landowners sued by a group that wants to build a sustainable community in the North State pushed back Thursday against claims they colluded to inflate land prices and violated antitrust law.
Flannery Associates has bought some 50,000 acres in Solano County, southwest of Sacramento, with the intent of creating a sustainable, walkable community. However, some landowners won’t sell to the group.
They say the land has been in their families for generations and that farming is their way of life. Flannery says in a 2023 suit that they’ve colluded on land prices.
Attorneys for the landowners argued Thursday that U.S. District Court Judge Troy Nunley in the Eastern District of California should dismiss the case. Flannery claims some landowners had a price-fixing agreement that would violate the Sherman Antitrust Act.
Attorney Kevin Collins, representing the landowners, said land isn’t like other items bought and sold and people can choose to set a price for their land or opt against selling. He also said the group has no facts to support the accusation.
Attorney Michael Menitove, representing Flannery, told Nunley that his client is composed of individuals and families who want to create a community with good jobs and affordable housing. In addition, Flannery is involved in farming and ranching the land, having wind and solar energy projects and offering conservation efforts.
“What has been stated publicly has changed,” said attorney Clement Glynn, who also represents some landowners.
Several landowners initially involved in the suit have settled and been removed. Twenty defendants now remain.
According to Menitove, at one point a landowner texted another, suggesting they should agree on a price for their properties. That way, Flannery couldn’t “play owners against owners.”
That points to a conspiracy, Menitove added.
“We have text messages that say, ‘Let’s get together and agree on the circumstances of the sale,’” he said.
Flannery said it has overpaid at least $170 million for Solano County properties.
Collins said various factors affect a property’s value at sale. His clients’ properties weren’t listed for sale, and they didn’t want to sell them. Instead, Flannery wanted to buy them, and when the landowners refused, it claimed there was price-fixing.
Landowners in their motion write that they lack the ability to agree on a price, because one piece of property can’t be substituted for another. One piece might be zoned industrial while another is agricultural, with the latter potentially being used for farming or ranching.
“Flannery nonetheless alleges conclusionally that defendants’ unwillingness to sell to Flannery is due to their alleged price-fixing agreement … as opposed to an independent business reason, or defendants’ desire to continue owning and farming their land,” the landowners write in their motion to dismiss. “But Flannery alleges no facts to support the conclusion.”
The land owner's attorneys said the complaint against the landowners must show proper accusations of price fixing, which it doesn’t. In fact, it fails to include even a general description of collusion on price.
Flannery’s entire plan is rooted in speculation, Collins said. It must weather market conditions, the economy and a November ballot measure about its proposal.
It also made the decision to pay the various amounts for the land it has purchased, admitting those above-market prices were intentional and voluntary, the landowners write. Claiming it overpaid by $170 million is speculation, the landowners said.
“The bottom line is, Flannery created the market,” Collins said.
Nunley made no decision on Thursday, saying he needed the attorneys to answer his questions at the hearing before he could rule.
“We’re just at a very preliminary stage right now with the motion to dismiss,” the judge said. “This is not your typical case.”
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