Judge dismisses $50 million OpenBand lawsuit
Judge Jane Marum Roush, a Fairfax County Circuit Court judge who was appointed by the Virginia Supreme Court after Loudoun's judges recused themselves from the case, sustained four demurrers filed by the defense, dismissing the case with prejudice.
A demurrer is a plea that acknowledges that the allegations in the lawsuit are true, but that they do not warrant legal action.
Unless OpenBand is granted a rehearing on an appeal, they cannot pursue the allegations in any subsequent suits.
M.C. Dean refused to comment, so it's not known whether the company will pursue an appeal.
The lawsuit has been yet another part of the three-year saga involving OpenBand and the county. The suit had named Ralph Buona (R-Ashburn), Shawn Williams (R-Broad Run) and the rest of the Loudoun County Board of Supervisors, the Lansdowne on the Potomac Homeowner's Association and its board members and the Southern Walk at Broadland's Homeowner's Association and its board members as defendants. The suit requested no less than $50 million in compensatory damages, alleging that the Board of Supervisor's Sept. 18 denial of OpenBand's franchise agreement exceeded the board's authority.
“I felt I did the right thing for my constituents,” Buona said. Because of the possibility of an appeal, Buona would not discuss the case itself.
In 2001, OpenBand signed an agreement with developer Van Metre to allow them to be the exclusive phone, Internet and television access providers for all homes and business within four HOAs, including Lansdowne on the Potomac and Southern Walk. The agreement would start for an initial period of 25 years and followed by four 10-year renewal periods for approximately 4,200 homes. They were also given exclusive rights to utility easements.
However, despite the private agreement, by county law telecommunications providers, such as Comcast and Verizon Fios, must have a franchise agreement that allows access to public-right-of-ways in order to provide service to communities.
Thus far, the county has refused to sign off on the franchise agreement and both Southern Walk and Lansdowne on the Potomac are in litigation with OpenBand, saying the private easements with Van Metre violated Federal Communication Commission laws.
Though OpenBand has never been found in violation of its service provisions within the original franchise agreement, critics have complained about the provided services.
Buona, the lawsuit says, met with OpenBand representatives in November 2011, when the then supervisor-elect indicated that if the firm reapplied for a franchise agreement, he would not judge the application on its merits. Even if the application was in full compliance with all applicable regulatory OVS recommendations, Buona allegedly said he would deny the franchise agreement unless OpenBand made concessions of their rights under the agreement made with Van Metre to provide exclusive cable, phone and Internet programming to the HOAs.
At the same time, Lansdowne on the Potomac and Southern Walk at Broadlands had lawsuits pending alleging OpenBand.
OpenBand was denied a franchise agreement by the previous Board of Supervisors in November 2011. Less than 30 days later, the firm filed a lawsuit in Loudoun County Circuit Court, asking that the new supervisors be made to reverse the decision. That lawsuit is still pending.
OpenBand also alleges that while the 2012 franchise agreement was pending, Buona and Williams said they would not approve the application unless OpenBand settled their litigation with the HOAs and relinquished their rights under the Telecommunications Service Rights and easements.
Williams allegedly made such public announcements and voted on matters relating to the 2012 franchise agreement, despite also being a homeowner in the Southern Walk development and previously serving on its HOA board.
In a April 23, 2012, meeting at Buona’s invitation, OpenBand representatives met Jeff Chapman, president of the Lansdowne on the Potomac HOA and John Whitbeck, who serves on its board of directors.
“Back when I brought the two parties to the table, I really thought I was looking at the best interests of my constituents,” Buona said.
On Sept. 18, 2012, the Board of Supervisors voted 5-3-1 not to grant a franchise agreement.
York (R-At Large), Ken Reid (R-Leesburg), Geary Higgins (R-Catoctin), Buona and Williams voted to deny the franchise agreement. Supervisors Matt Letourneau (R-Dulles), Eugene Delgaudio (R-Sterling) and Suzanne Volpe (R-Algonkian) were in favor of striking the deal with OpenBand, while Janet Clarke (R-Blue Ridge) abstained.
The vote was originally scheduled to take place in May of that year, but had been repeatedly pushed back by supervisors to try and allow the HOAs more time to negotiate with OpenBand.
In April, a federal appeals court upheld Lansdowne on the Potomac's suit, agreeing that OpenBand violated FCC laws. However, Roush dismissed the case in circuit court. The federal appeals court also did not uphold Southern Walk's case.
Both HOAs currently have cases in the U.S. Federal Court of Appeals with OpenBand.
Editor’s Note: OpenBand is a subsidiary of M.C. Dean, a Dulles-based engineering firm. M.C. Dean is the former owner of the Loudoun Independent, which merged with the Loudoun Times-Mirror in July 2010. Bill Dean, M.C. Dean CEO and president, holds a minority interest in Times Community Media and sits on its Board of Directors.
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