Antitrust Law Daily Wrap Up, ANTITRUST—S.D. Ill.: Sanctions denied in real estate tax auction bid rigging suit against county official, (Jan 29, 2016)

By Linda O’Brien, J.D., LL.M.

In an action against a county treasurer and several real estate tax purchasers for allegedly conspiring to illegally rig real estate tax auction sales, the federal district court in East St. Louis, Illinois has denied a motion for sanctions against the plaintiff purchasers (Bloyer v. St. Clair County, Illinois, January 28, 2016, Vandle, S.).

John Bloyer, Adrianne Bloyer, Kevin Dvorak, and Kathleen Dvorak owned property that was sold at a St. Clair County real estate tax auction. In October 2014, the property owners filed suit against the Treasurer of St. Clair County, who conducts the real estate tax auctions, and several investment companies that purchased properties at St. Clair County tax auctions, asserting claims for civil conspiracy, breach of fiduciary duty, and violations of Sections 1 and 2 of the Sherman Act. and the Illinois Antitrust Act. Specifically, the property owners claimed that Suarez agreed with each investment company to change the bidding process to ensure that the auctioneer recognized the companies as winning bidders in return for political campaign contributions. The defendants moved for sanctions under Federal Rule of Civil Procedure 11(b).

The court determined that the defendants failed to present evidence that the plaintiffs’ complaint was filed for an improper purpose. In rejecting the defendants’ argument that the complaint was “intended to harass Defendant Suarez,” the court noted that the defendants’ recitation of the political party affiliations of the candidates and counsel were unpersuasive. Further, the plaintiffs’ allegations of events in neighboring counties were insufficient to create an inference that the complaint was intended to harass Suarez.

The court rejected defendants’ contention that the plaintiffs’ claims were time-barred for failure to plead fraudulent concealment or misrepresentation that would toll the running of the statute of limitations. The court noted that the complaint alleged the defendants directed that political contributions to the political party instead of Suarez individually, Suarez seated the investment companies in the front of the auction room to facilitate the conspiracy, and other bids were allowed on less lucrative properties to cover up the conspiracy. The plaintiffs also alleged that the conspiracy was self-concealing and they could not have discovered through reasonable diligence that they were injured until 2014. Therefore, the complaint contained sufficient facts to raise a reasonable inference that the limitations period was tolled, the court concluded.

The case is No. 3:14-cv-01119-SMY-PMF.

Attorneys: Aaron G. Weishaar (Reinert Weishaar & Associates, PC) for John R. Bloyer, Jr. Garrett P. Hoerner (Becker, Hoerner, Thompson & Ysursa, PC) for St. Clair County, Illinois. Andrew R. Kasnetz (Sandberg Phoenix & Von Gontard P.C) for Sabre Group LLC and S.I. Securities, LLC.

Companies: Sabre Group LLC; S.I. Securities, LLC

Cases: Antitrust IllinoisNews