OpenBand files $50 million lawsuit against Loudoun board, homeowners associations

October 14, 2012

Telecommunications provider OpenBand filed a $50 million lawsuit Tuesday against more than a dozen defendants in Loudoun, alleging that county supervisors acted beyond their authority in their efforts to negotiate an agreement between the Dulles-based company and the communities it serves.

The lawsuit, filed in Loudoun County Circuit Court, added to the years-long, litigious drama involving OpenBand, its customers and the Board of Supervisors. Defendants include the board, two of its members and two homeowners associations.

In September, supervisors voted to deny OpenBand’s application to renew its franchise agreement with the county, citing unresolved customer concerns and two pending federal lawsuits against the company. It was the second time that the franchise had been denied; previous board members rejected an earlier version of the agreement in November.

In the lawsuit filed Tuesday, OpenBand seeks to appeal the board’s decision to deny the franchise, requesting $50 million in damages for actions by the board and homeowners associations that it alleges caused “reputational and monetary harm” to the company.

The lawsuit names Supervisors Shawn Williams (R-Broad Run) and Ralph Buona (R-Ashburn) as individual defendants and alleges that the two supervisors’ efforts to help negotiate a compromise between the company and two homeowners associations “crossed the line . . . into direct manipulation of the franchise process.”

The Lansdowne on the Potomac and Southern Walk homeowners associations “conspired” with the board members, the complaint says, resulting in a “standard-less process,” wherein OpenBand and its parent company, M.C. Dean, were “coerced to relinquish their private contract and real property rights and to make direct cash payments to the HOAs.”

Buona and Williams “spearheaded this unlawful behavior,” violating a state constitutional ban on government interference with private contracts, the lawsuit says.

“The board’s egregious actions amounted to extortion,” the complaint alleges.

Ben Young, spokesman for OpenBand, said the company was reluctant to file the lawsuit but had been left with no alternative.

“We’d rather be investing in system upgrades, which we’ve said many, many times,” he said. “But it’s the only option we were given.”

Anna Nissinen, spokeswoman for Loudoun, said the county could not comment on pending litigation.

Residents of communities served by OpenBand have long complained about the company, citing poor customer service and unreliable cable quality. They’ve also argued that exclusive property easements established in OpenBand’s contracts with the communities’ developers resulted in an illegal monopoly. Last year, the Southern Walk and Lansdowne on the Potomac HOAs filed separate federal complaints against OpenBand, alleging that the easements violated federal telecommunications law.

On Wednesday, the Federal Communications Commission issued an amicus brief in response to the federal lawsuit filed by the Lansdowne on the Potomac HOA against OpenBand. The brief supported the ruling of U.S. District Court Judge Anthony J. Trenga, who found that the terms of OpenBand’s agreement with the HOA were in violation of the FCC’s exclusivity order.

“Because OpenBand satisfies the definition of an [Open Video System] operator, it is subject to the Exclusivity Order,” the brief says. “And because the exclusivity clauses of OpenBand’s easements are forbidden by that Order, they are null and void.”

Both the Southern Walk and Lansdowne on the Potomac cases will be reviewed by the same panel at the U.S. Court of Appeals for the 4th Circuit in the coming months.

Erika Hodell-Cotti, president of the Southern Walk Homeowners Association, said Friday that the HOA had not yet been served with the lawsuit. But the association was pleased by the FCC’s brief, which “sets a very clear path for [the appeal of] our case,” she said in a statement.

The Lansdowne on the Potomac HOA said in a statement that OpenBand’s lawsuit was “a transparent attempt to bully the county, the Board of Supervisors, and the HOAs that have exercised their rights to seek redress from the government.”

Caitlin Gibson covers Loudoun County for The Washington Post.
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