Idaho Supreme Court reinstates $21M land dispute lawsuit against Pocatello, Northgate developers
Idaho's highest court reverses dismissal of lawsuit claiming blocked access to develop farmland near Interstate 15 interchange
POCATELLO — An Idaho Supreme Court decision has revived a $21 million lawsuit against Pocatello and the private developers involved in the Northgate project.
The Aug. 19 Supreme Court opinion overturns 6th District Judge Robert C. Naftz’s 2023 dismissal of the case, effectively ordering a fresh review of claims that city officials and private business partners conspired to block a farming family’s access to land primed for significant development.
The high court’s decision reinstates the lawsuit filed by the Harold L. Rupp Sr. Trust and Veda J. Rupp Revocable Living Trust against those involved in the Northgate project near the Interstate 15 interchange, including Pocatello, Mayor Brian Blad and the private developers — Millennial Development Partners and its owner Buck Swaney, as well as Portneuf Development and Portneuf Builders and their owner Ken Pape.
The case centers on 930 acres of farmland the Rupp family has owned since the 1920s and several legal claims brought by their Idaho Falls attorney Nathan Olsen.
Background of the dispute
Lavelle Rupp and his family's $21 million lawsuit against the city of Pocatello and the two private development companies involved with the Northgate project was recently reinstated following an Idaho Supreme Court ruling.
The conflict traces back to 2017 when the Rupp family initially planned to bring 300 acres of their land into Pocatello as part of the ambitious Northgate development project.
Mayor Blad promoted the $31.5 million Interstate 15 interchange as one of the state’s first public-private partnerships and the subsequent residential and commercial development opportunities it would create as a project that could double Pocatello’s population.
Northgate was advertised as a project that would create a new master-planned community on the city’s north side, including a 1 million-square-foot information technology hub, thousands of new homes or residential units, a city park with a connecting trail system and a retail shopping center that would integrate opportunities to live, work and play in the same neighborhood.
However, the Rupps discovered that connecting to Pocatello’s utilities would cost them $4 million to $5 million for a required sewer lift station and supporting water and sewer infrastructure. Chubbuck offered the same services for less than $500,000, prompting the family to annex their land there instead in December 2018.
That decision, according to the lawsuit, triggered retaliation from Pocatello officials and the private development partners involved in Northgate. The Rupps claim they were cut out of all future discussions about the project and faced a coordinated effort to devalue their property.
The control strip controversy
A street sign for Northgate Parkway is pictured with the Rupp family’s land in the background.
The crux of the dispute involves narrow strips of land called “control strips” — 10-foot sections on both sides of Northgate Parkway, the main road through the development, the suit says. These strips were deeded to a partnership between Millennial Development Partners and Portneuf Development and effectively prevented the Rupp family from building connecting roads to access their land from Northgate Parkway, according to the suit.
Land without road access is worth significantly less than property with main arterial connections, directly impacting the family’s ability to develop or sell their holdings, the suit claims.
The Rupps allege this was intentional. Their lawsuit claims city officials and developers “hatched and executed a scheme to isolate the Rupp trusts from economic benefits related to the Northgate Interchange” and force the family to sell their property and valuable water rights “for a fraction of the property’s value.”
Legal claims and procedural history
When the Rupp family filed their lawsuit in February 2022 through Olsen, who previously won a multimillion-dollar lawsuit against Pocatello, they leveled serious allegations against the defendants. The family claimed breach of contract, arguing that agreements made during the original land sale for the interchange construction promised them access points to Northgate Parkway and utility connections that were never provided.
They also alleged fraud, claiming defendants misled them about their intentions to provide property access. Additionally, the lawsuit included claims of civil conspiracy, alleging the city and developers worked together in secret meetings that violated public disclosure laws.
The family further alleged that Pocatello illegally annexed Northgate Parkway itself, arguing that Idaho law prevents cities from annexing property connected only by a “shoestring or strip of land” like a right-of-way. They claimed this constituted a “regulatory taking” of their property rights without compensation.
The lawsuit also alleged false advertising, claiming the developers used images of the Rupp property on a website to market land they didn’t own or control.
The initial dismissal
The case took a turn in May 2023 when Naftz dismissed the lawsuit entirely, awarding summary judgment to all defendants. The dismissal came after Naftz found Olsen in violation of Idaho’s rules of evidence when he filed critical court documents, including a motion to continue the summary judgment hearing, nine days past the deadline.
Instead of holding a hearing to consider the merits of Olsen’s arguments, Judge Naftz ruled in favor of the defendants. He also struck Olsen’s late-filed documents and dismissed the case, awarding attorney fees to the defendants.
At the time, the defendants celebrated the victory. Patrick Davis, a Pocatello attorney with Beard St. Clair Gaffney who is representing Millennial Development, said the dismissal vindicated their position that the claims lacked merit. John Avondet, also with Beard St. Clair Gaffney, who is representing the Portneuf defendants, praised the court’s “thoughtful and thorough analysis.”
Supreme Court reversal
However, the Idaho Supreme Court saw the matter differently. While the high court agreed Olsen failed to diligently share or report evidence in the case during the proper timeframe — almost a year-long process — and didn’t meet the necessary requirements for extending deadlines, it found flaws in how Naftz handled the case.
The Supreme Court determined that Naftz failed to properly analyze the evidence before granting summary judgment, creating the appearance that the dismissal was used to sanction, or punish, Olsen’s late filing rather than allowing the substance of the arguments to stand and issuing a finding after considering all evidence.
“The district court failed to properly analyze the defendants’ motions … and potentially used it as a sanction for the Trusts’ late response,” the Supreme Court wrote.
The high court reversed the dismissal, vacated the attorney fee award to defendants, and sent the case back to district court for proper consideration of the summary judgment motions based on their merits rather than procedural delays.
What stands today and what happens next
Though there has been some commercial and residential construction at Northgate since the Interstate 15 interchange was completed in late 2019, the massive development project featuring industrial parks and thousands of new residences has not materialized. It has yet to result in the significant boost to Pocatello’s economy and population that Blad and others predicted.
Commercially, Portneuf Health Medical has constructed a campus, ICCU has plans for a parcel of land and the advisory and financial accountant firm Cooper Norman has built office spaces there. Northgate is also home to a large apartment complex and several single-family houses.
Olsen called the Supreme Court decision “a total victory” for his clients.
“All the Rupps were asking for in the appeal was to have their day in court, and that’s what the Supreme Court granted,” Olsen told the Idaho State Journal during a recent phone interview. He suggested the case could be resolved quickly and at little cost to the city if defendants simply provide the Rupp family access to Northgate Parkway.
“What it boils down to is the Rupps just simply want to have full access to Northgate Parkway,” Olsen said. “Once they have that, the area will get developed very quickly to the benefit of the entire region.”
Pocatello Mayor Brian Blad provided the Journal with a statement saying he, too, looks forward to presenting the city’s arguments in court.
“The Idaho Supreme Court’s ruling returns the Rupp case to district court for a hearing on the merits,” Blad said. “This gives the city of Pocatello the opportunity to present the facts openly and demonstrate that the city acted appropriately. I remain confident in our position.”
Davis, via a statement to the Journal, said, “Millennial is pleased that the Idaho Supreme Court has upheld the district court’s exercise of its discretion to deny the motions to continue.”
Davis added, “We were somewhat surprised by the analysis regarding the need for a hearing at the summary judgment stage since it was an argument that was not made on appeal by (the Rupps). However, Millennial has great respect for each member of the judiciary who has been involved in this case, and is focused on preparing for the next stage of litigation.”
Avondet did not provide the Journal with a statement regarding the Supreme Court’s decision.
The Supreme Court noted all parties in the case demonstrated “inadequate compliance with discovery rules” and emphasized the need for better communication and cooperation in future proceedings.
More than five years after the interchange’s completion, the development has not delivered the dramatic economic impact officials predicted. The ongoing legal dispute over the Rupp property represents hundreds of additional acres that could potentially be developed if access issues are resolved and if potential investors can confidently select the site as the new home for a prospective development without the looming lawsuit casting doubts or uncertainties.
The case also highlights broader questions about municipal annexation practices, the use of “control strips” to manage development and the balance that must be struck between participants in public-private partnerships.
The case now returns to 6th District Court, where Judge Naftz is expected to conduct a thorough review of the summary judgment motions based on their legal merits. The Supreme Court made clear that any decision must be based on a comprehensive analysis of evidence rather than procedural missteps.
For the Rupp family, the Supreme Court decision represents vindication of their three-year effort to resolve the dispute. But with the case back in Naftz’s hands, it remains to be seen whether the end result will ultimately be different.
The outcome could significantly impact not only the immediate parties but also the broader development of the Northgate area.