Eagle Rock Resort Lawsuit: AG Case, Class Action, Double Diamond

The Eagle Rock Resort lawsuit is actually two lawsuits. In January 2025, Pennsylvania Attorney General Michelle A. Henry sued the resort’s four corporate operators in federal court, alleging they sold undeveloped lots at Eagle Rock in Hazle Township for $30,000 to $100,000 when the lots were worth only $5,000 to $20,000 on the open market. In September 2025, a private class action was filed in Luzerne County making similar claims on behalf of lot owners. Both cases were active as of mid-2026, though the state’s complaint was dismissed without prejudice in March 2026 and the Commonwealth was given a chance to refile with more specific allegations.¹²

What the Lawsuits Allege

The core allegation is a price gap. The Attorney General’s complaint states that lots sold for $30,000 to $100,000 typically had a resale value of $5,000 to $20,000, and in some cases had no meaningful resale market at all.¹³

According to the state, sales staff justified the pricing by walking buyers through “comparable properties.” Those comps were not open-market sales. They were prior Eagle Rock sales made at the same inflated prices, so each new sale confirmed the last one without ever touching the outside market.¹

The complaint identified several other tactics:

Discounts framed as limited-time promotions, including a $15,000 “membership” discount that the state says no one had ever actually paid the full undiscounted price for.³
Investment promises. Agents allegedly told buyers the lots would appreciate 10 to 15 percent per year, and some buyers said they were told the equity would cover a child’s college education within four years.⁴
High-pressure sales presentations, with buyers drawn in by free golf, lodging, and meals.¹
Misrepresented exit options. The state alleged the defendants misled owners about trade-in, repurchase, and resale programs that were supposed to let them get out of their purchases.¹

The complaint also alleged that international buyers and new-immigrant communities were specifically targeted.¹

Who Is Being Sued

Both lawsuits name the same four companies: Eagle Rock Resort Co., LLC; Eagle Rock Real Estate Co.; United Equitable Mortgage Corporation; and Double Diamond – Delaware, Inc.¹ Double Diamond, a Delaware corporation based in Dallas, is the parent and wholly owns the other three.

Each subsidiary played its own role in what the state describes as a common scheme. Eagle Rock Resort Co. handled marketing and sales. Eagle Rock Real Estate Co. and United Equitable Mortgage Corporation extended credit and serviced the mortgages, and the state alleged United Equitable also profited from securitizing and reselling those loans. R. Michael Ward, majority shareholder and a director of Double Diamond, was the sole director of the three subsidiaries. He is not personally named as a defendant, but the state cited his control over all four entities to argue they functioned as one enterprise.¹

How Buyers Say They Were Harmed

The complaint describes owners who couldn’t sell without absorbing a heavy loss but still owed monthly mortgage payments, yearly community association fees, property taxes, and school taxes. Some said even charities refused to take the lots as donations.¹

Owners of undeveloped lots also could not camp on or otherwise use their land unless they built a permanent home. To use the resort itself they had to pay separately for a hotel room, condo, or timeshare, while still paying the same mandatory association fees as owners of developed lots.¹

Owners quoted in the complaint said they were told the lot was “a very good investment that would double price within a few years,” only to find that resales were topping out at $20,000. Another described being “in a vicious gambling circuit” and “sinking little by little.” A third said they were “so upset, frustrated and depressed that Eagle Rock deceived us and continues to sell lots without regard to how it will affect the value of lots already sold.” When buyers tried to cancel, the state alleged, they were told they had no right to back out and had to keep paying or face foreclosure.¹

Where the Attorney General’s Case Stands

The defendants moved to dismiss. On March 31, 2026, Judge Joseph F. Saporito, Jr. of the U.S. District Court for the Middle District of Pennsylvania issued a split ruling. He rejected the argument that Pennsylvania lacked standing, holding that the Commonwealth could sue as parens patriae on behalf of its citizens. But he agreed that the complaint failed to state a claim because it did not identify “any particular lots, any particular consumers, any particular transactions, any particular communications, or any particular actions by particular agents.”²

The dismissal was without prejudice. The court gave the state leave to amend, and a scheduling order set September 28, 2026 as the deadline for the amended complaint, with fact discovery running through November 30, 2026 and general motions due by February 1, 2027.⁵ The court also referred the case to mediation in June 2026, with a mediator’s report due September 3, 2026. The defendants filed a brief supporting a renewed motion to dismiss in June 2026.⁶

The Class Action

On September 5, 2025, the law firms Sauder Schelkopf and Levin Sedran & Berman filed a class action in the Court of Common Pleas of Luzerne County against the same four defendants. The proposed class is property owners who bought undeveloped lots at Eagle Rock.⁷

The class complaint alleges a “long-running scheme” to sell lots at inflated prices by marketing them as investments whose value would climb alongside promised amenities, including golf courses, ski facilities, and an aquatic center. It claims many buyers ended up with lots worth $5,000 to $8,000 after paying $30,000 to $100,000.⁷

Double Diamond’s Prior Legal History

The parent company has faced similar allegations before. At its White Bluff Resort near Lake Whitney, Texas, more than 1,100 property owners sued in Dallas County, alleging that Double Diamond used its control over the property owners’ association to route mandatory fees to its own subsidiaries.⁸ The trial court entered a partial summary judgment finding that fees collected for property the association did not own were not authorized. Double Diamond’s appeal was dismissed for lack of jurisdiction in January 2023, and the Supreme Court of Texas denied review in November 2023.⁹ About 100 additional White Bluff owners sued in Hidalgo County under the Texas Deceptive Trade Practices Act and related theories, and a federal RICO class action was filed in the Northern District of Texas, though that court declined to certify the class.¹⁰

Double Diamond was also identified as an agent of 3D Resorts-Bluegrass, LLC, which the Consumer Financial Protection Bureau took enforcement action against in 2013 for violations of the Interstate Land Sales Full Disclosure Act. That case ended in a consent order permanently barring the respondent from interstate land sales.¹¹ The Kentucky Attorney General also reportedly sued Double Diamond in 2011 over alleged state consumer protection violations.¹²

1
PA Attorney General. Commonwealth of Pennsylvania v. Eagle Rock Resort Co., LLC, et al. — Complaint
2
CaseMine. Commonwealth of Pennsylvania v. Eagle Rock Resort Co., LLC, et al.
3
Standard-Speaker. State Sues Eagle Rock Resort for Selling Vastly Overpriced Lots
4
PennWatch. Attorney General Henry Files Lawsuit to Stop Eagle Rock Resort From Selling Lots Based on Allegedly False Property Values
5
PACER Monitor. Commonwealth of Pennsylvania v. Eagle Rock Resort Co., LLC, et al. — Scheduling Order
6
PACER Monitor. Commonwealth of Pennsylvania v. Eagle Rock Resort Co., LLC, et al. — Docket
7
Sauder Schelkopf. Sauder Schelkopf and Co-Counsel File Class Action Against Eagle Rock Resort Developers in Hazleton, PA
8
Justia. Double Diamond, Inc. v. John and Cathy Walkinshaw, et al.
9
SCOTX Blog. Double Diamond, Inc. v. John and Cathy Walkinshaw, et al., No. 23-0372
10
FindLaw. Double Diamond-Delaware, Inc. v. Property Owners at White Bluff
11
Consumer Financial Protection Bureau. Consent Order — 3D Resorts-Bluegrass, LLC
12
Dallas Observer. Dallas Developer of Lake Whitney Resort Sued for Allegedly Pocketing Owners’ Association Fees