U.S. District Court Judge Amanda Brailsford ruled April 16 against residents of the Mountain Homestead development in the federal Racketeer Influenced and Corrupt Organizations Act lawsuit brought against more than 30 entities, including Bonner County and Panhandle Health District.
Despite the ruling, the defendants still face seven allegations at the state level regarding the creation, construction and sale of the subdivision.
Developers Joshua Pilch and Jacob Marble of J&J Development, LLC, used Bonner County’s controversial minor land division process to create Mountain Homestead — a process that the Bonner County Board of Commissioners eliminated in November 2025 due to public safety concerns. According to then-Bonner County Planning Director Jake Gabell, loopholes in the code governing MLDs allowed developers to create de facto subdivisions lacking proper infrastructure, including failing to meet regulations on road width, surfacing and accessibility measures for first responders and fire and stormwater management requirements..
Aerial view of the Mountain Homestead development north of Ponderay. Bonner County GIS screenshot
Seven homeowners, led by David and Linda Wittwer, filed a lawsuit in July 2025 against Bonner County; former-County Commissioners Jeff Connolly, Steven Bradshaw and Dan McDonald; former-Planning Director Milton Ollerton; Panhandle Health District; and the real estate agencies, contractors, title agencies and developers involved with Mountain Homestead, alleging similar issues.
The complaint attests to “significant problems with essentially every aspect” of the development, including the “septic system, water wells, drainage, utilities and access road.” Homeowners further argued that developers “failed to obtain permits and final approval for the septic tanks, and belatedly attempted to obtain the permits and approval.”
In addition, issues with the community septic systems contaminated their drinking water with “coliform bacteria, E. Coli, arsenic, nitrates and other harmful materials,” reportedly making residents sick.
The plaintiffs also claimed that Pilch and Marble violated the MLD process by applying to split the original two parcels into four, five-acre lots each, but actually divided them into 4.83-acre lots, using the leftover space to create a 60-foot “illegal fifth lot.”
Under Bonner County Code, MLDs could only divide parcels into four or fewer lots — five or more necessitated a subdivision application. Developers used the leftover land to create an access easement for Logan Road; however, the finished road “encroached [on] a third party’s property,” ran over utility lines and was eventually sold to another developer, according to the complaint.
Plaintiffs argued that parties involved knew of these issues and defrauded homebuyers, violating — or conspiring to violate — U.S. Code 18-1962(c), which prohibits individuals linked to “any enterprise engaged in, or the activities of which affect, interstate or foreign commerce, to conduct or participate, directly or indirectly, in the conduct of such enterprise’s affairs through a pattern of racketeering activity or collection of unlawful debt.”
They further claimed violations of U.S.C 18-1341 and 18-1343, for the alleged use of mail and wire fraud during the creation and selling of the “defective properties.”
The plaintiffs made approximately 80 allegations in the 70-page complaint, which they stated were based “upon information and belief.” They did not validate the claims with specific evidence, though later applied to amend the complaint to remove 39 of the 82 references to “information and belief” and add “random alleged facts,” according to the ruling.
The amendment further failed “to state a claim upon which relief can be granted,” violating 12(b)(6) of the Federal Rules of Civil Procedure, and so the court ruled the amendment “futile.”
“Despite such references, however, none of [the paragraphs] identifies the specific time, place or content of an allegedly fraudulent communication; the parties to that communication; or the means of its transmission either by mail or electronically,” stated Brailsford in the April 16 ruling.
The court ruled that the plaintiffs did “not provide any facts specific to this case about how various Defendants functioned as a continuing unit to defraud Plaintiffs,” which is necessary to argue a RICO case.
Brailsford subsequently dismissed the RICO lawsuit with prejudice, meaning it cannot be refiled.
The court did not “exercise supplemental jurisdiction” by making a definitive ruling on allegations of state law violations, instead dismissing them without prejudice at the federal level.
Plaintiffs have a minimum of 30 days from April 16 to bring the lawsuit to the state courts, which will judge allegations of “fraud; breach of the warrant of habitability; negligence; gross negligence; unjust enrichment; and violation of the Idaho Consumer Protection Act.”
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