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Wulfsberg Reese & Colvig Scores Win in Telecom Litigation

After nearly six years of litigation, U.S. District Judge Susan Illston entered final judgment yesterday in favor of Wulfsberg Reese & Colvig’s client, the City of Alameda, against all claims brought by Vectren Communications Services, a subsidiary of Vectren Corporation (VVC), a $5 billion Indiana-based conglomerate, arising out of Alameda’s operation of its cable TV and Internet system.

Vectren sued Alameda for $10 million claiming that Alameda failed to maximize profits in which Vectren claimed a right to share by not aggressively raising rates and not cutting staff and that Alameda’s accounting underreported alleged profits payable to Vectren.

After a month-long 2010 jury trial, Wulfsberg Reese & Colvig secured a verdict in Alameda’s favor on four of Vectren’s five claims, with the jury finding for Vectren on the accounting claim. WRC successfully appealed to the Ninth Circuit Court of Appeals, which reversed the judgment in Vectren’s favor, finding that Vectren’s theory at trial differed from the one advanced in Vectren’s pre-litigation claim required by California Government Code section 905 et seq., (the Government Claims Act). Vectren Communications Services, Inc. v. City of Alameda, 536 Fed.Appx. 681. The Ninth Circuit remanded the case for trial on Vectren’s damages resulting from Alameda’s sale of the system to Comcast, Vectren’s last chance for recovery.

Barring another appeal, yesterday’s judgment marks the end of the Alameda telecom litigation, in which Alameda once faced three separate lawsuits claiming $25 million. Alameda and WRC won the other two cases, brought by investors in notes issued to finance the telecom system, Nuveen Investments and the Bernard Osher Trust, when the District Court granted Alameda’s motion for summary judgment based on: (1) plaintiffs’ failure to comply with the Government Claims Act; (2) statutes immunizing public entities from fraud liability; and (3) plaintiffs’ failure to establish “loss causation” (that Alameda’s alleged misstatements caused their losses). The Ninth Circuit upheld this decision in an opinion published late last year, Nuveen Municipal High Income Opportunity Fund v. City of Alameda, 730 F.3d 1111. WRC attorneys Gregory Aker, Richard Elder and Michael Higgins represented Alameda in all three matters.

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