NEWS -- April 7, 2014

City of Alameda Scores Final Win in Telecom Litigation

ALAMEDA, Calif. – After nearly six years of litigation, U.S. District Court Judge Susan Illston entered final judgment for the City of Alameda on all claims brought against the city by Vectren Communications Services, a subsidiary of Vectren Corporation, a $5 billion Indiana-based energy conglomerate. Judge Illston’s judgment in Alameda’s favor all but extinguishes Vectren’s case against the city, leaving it with only the hope of another appeal. The judgment likely marks the end of the Alameda telecom litigation, in which Alameda once faced three separate lawsuits and a combined $25 million in damage claims.

The litigation stemmed from the city’s operation of its cable TV and Internet system, sold to Comcast in 2008. Complaining that the city hadn’t properly managed the system by aggressively raising rates and cutting staff, thus denying Vectren its hoped-for profits, Vectren sued the city for $10 million in damages. After a jury verdict in favor of the city on all but one of Vectren’s claims, and a decision from the Ninth Circuit Court of Appeals in the city’s favor, the case came back to the District Court late last year for trial on one final issue, Vectren’s last chance for recovery.

In 2011, Alameda won the other two cases—brought by disappointed investors in notes the city issued to finance the telecom system, Nuveen Investments and the Bernard Osher Trust—when the District Court granted the city’s motion for summary judgment, a decision the Ninth Circuit upheld on appeal in September of last year.

“Once again our courts have, after a long, hard-fought battle, vindicated AMP and the tireless efforts of its staff in striving to make the telecom system a success,” said Alameda Mayor Marie Gilmore. “The judgment is a credit to the resolve and perseverance of the City Council, Public Utilities Board, city manager, and our city attorney, in defending the City of Alameda from meritless claims.”

In addition to performing best practices in safety and reliability, there are also financial benefits associated with the RP3 designation, such as improved bond ratings and cost savings from workers compensation and insurance. This contributes to the financial health of AMP as a locally owned municipal utility and provides community value with competitive electric rates.

“We are extremely pleased with the outcome of these cases and look forward to continuing to provide the city’s residents with first-class service, without the expense and distraction of litigation that never should have been brought in the first place,” added AMP’s Interim General Manager, Ron Stassi.

Representing the city throughout the telecom litigation was its outside litigation counsel, Oakland-based Wulfsberg Reese & Colvig, with key support from the City Attorney’s office.

Janet Kern - City Attorney
City of Alameda Phone: 510-747-4752
Email: jkern@alamedaca.gov

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