Supreme Court upholds District Court judgement for TCT

Nearly nine years after the sale of Tri County Telephone Cooperative exchange, a lawsuit filed after the sale appears to be settled with a recent Wyoming Supreme Court decision.
In an opinion dated Oct. 24, 2023, the State Supreme Court ruled that the District Court, under Judge Janson Conder did not err when he issued a summary judgement for TCT, Neil Schlenker, Big Horn Telecommunications and all other defendants.
The class action lawsuit was initially brought by former Tri County Telephone board member Joe Campbell, who passed away in 2020, and his wife Barbara, and William Loveland. Members of the cooperative were asked to join the class action lawsuit.
The other defendants in the case include Chris Davidson, Steve Harper, Dalin Winters, Clifford Alexander, J.O. Sutherland, Daniel Greet and John K. Johnson.
While the case was filed in Fifth Judicial District Court in Park County, the Ninth Judicial District Court presided over the case, first with Judge Norman Young and then Judge Conder who began serving in 2019.
Conder wrote in his summary judgement in October 2022, “Having heard from the parties (a hearing on the defendants’ motion for summary judgement was in February), having carefully weighed their respective arguments and reviewed the file in detail, the court finds that the Defendants’ Joint Motion for Summary Judgement on All Claims be granted.” In the order he wrote that the record included thousands of documents and exhibits. “The court has painstakingly reviewed the entire record, and in summary, Tri County Telephone (TCT) was a member-owned utility cooperative operating in Park, Big Horn, Hot Springs and Washakie counties. In 2014, the TCT Cooperative (and its subsidiaries) were sold to an entity owned by Neil Schlenker (BHT). Thereafter, the Plaintiffs, a class of individuals consisting of former board members and cooperative members, brought this suit alleging, in essence that the 2014 sale of TCT was done via fraud, deceit and collusion.”
The Supreme Court in affirming the District Court ruling summed up the case as follows: “Tri County Telephone Association, Inc. (Cooperative) was a Wyoming cooperative utility organized to provide telecommunication services to its members on a non-profit basis. It also invested in for-profit ventures through four subsidiaries. In December 2014, over 2/3 of the Cooperative’s members voted to sell the Cooperative, including its for-profit subsidiaries, to entities owned and controlled by Neil Schlenker. Mr. Schlenker, in turn, converted the Cooperative into a for-profit corporation under the same name, which we will refer to as TCT to distinguish it from the Cooperative. After the sale, R. Joseph Campbell, Barbara Campbell, and William Loveland (Class Representatives) filed a class action lawsuit, ostensibly on behalf of themselves and all members of the Cooperative at the time of its sale, against TCT, Mr. Schlenker and his entities (the BHT entities), two of the Cooperative’s officers, and five former directors of the Cooperative’s Board of Directors (collectively Defendants). The lawsuit alleged, inter alia, claims for fraud, constructive fraud, breach of fiduciary duty, conversion, and civil conspiracy. In essence, the Class Representatives claimed Defendants duped the Cooperative’s members into selling what they allege was a $105 million Cooperative for a mere $29 million. The district court granted summary judgment in favor of Defendants and denied the Class Representatives’ motions for partial summary judgment. The Class Representatives appealed. We affirm.”
According to the initial complaint filed in late December 2015, TCT was sold at the end of 2014 for $51 million, less $12 million to retire debt, less $10 million held back for “unforeseen liabilities” leaving $29 million paid to the “owners” or Tri-County Telephone cooperative members.
The suit alleged that TCT held hard assets of over $90 million. According to the initial complaint, the “total transaction was not $51 million the owners did not receive $51 million. The owners were bilked out of tens of millions of dollars of value that they owned in the company.”
Conder wrote in his summary judgement, which the Supreme Court affirmed, that, “There is no genuine issue of material fact showing that the former officers failed to act in good faith or that they failed to rely upon the information and/or opinions of other professionals, who were acting within their professional field and area of expertise. This is repeatedly demonstrated throughout the summary judgement record by their having reached out to and relied upon a host of experts in various fields, all of which was done to help address the issues surrounding the negotiation and sale of the TCT cooperative. In fact, these are many of the same experts and opinions sought out and relied upon by the Plaintiff class representatives Joe Campbell and Bill Loveland.
“The court fully recognizes that the Plaintiffs disagree with the end result. In their opinion it was erroneous and imprudent, and as such they attack the process for arriving at that result.
“However, the Plaintiffs must do more than loudly and repeatedly state their allegations and opinions. They must provide some measure of proof, of evidentiary facts to support their position and overcome the business judgement rule, which they have failed to do.”
The purchase was approved by the then TCT Cooperative board with Joe Campbell the lone opposing vote. It was then approved by 80% of cooperative members through mail-in ballots. Cooperative members were original Tri-County Telephone customers in Burlington, Otto, Emblem, Ten Sleep, Hyattville and Hamilton Dome.
REACTION
Loveland said he had not been able to speak with Barbara Campbell and other members of the class action suit but said the Court’s decision “stands for itself.”
TCT, through CEO Richard Wardell, issued a written statement that in part read,  “the lawsuit was filed in December of 2015 and served on the individual defendants in the midst of their holiday seasons was the continuation of a dissident director’s ill-fated, decade-long quest to get his way respecting the future of the Big Horn Basin’s native telecom company. The Campbells and Loveland attempted to paint a grandiose conspiracy to defraud, resulting in years of extraordinarily expensive litigation.
“But Judge Conder noted the absence of any actual evidence of wrongdoing, characterizing the plaintiffs’ filings as nothing more than ‘vitriolic assertions, beliefs, and opinions’ and noting that the plaintiffs ‘must do more than loudly and repeatedly state their allegations and opinions.’ The Wyoming Supreme Court has now affirmed Judge Conder’s rejection of the unwarranted aspersions that Campbells and Loveland cast on Mr. Schlenker and the former directors and officers — all of whom have had to unfairly endure the harsh court of public opinion resulting from the published vitriol of the plaintiffs — finding that the plaintiffs failed to provide any factual evidence in support of their salacious accusations.
“TCT hopes to finally redirect the expense of litigation to the community it serves, putting in the past the meritless lawsuit which has drained the resources of our judicial system and resources that could better be spent on our community members.”
Wardell said, “Besides the Supreme Court’s ruling which speaks loudly about the case and those that brought the case about initially.  We provided a press release regarding the facts of the case.  For the last several years there has been a lot said about the company and because of the suit it was difficult to defend against the attacks because the opposing side could and did say just about anything they wanted with no proof of accuracy or truth as was stated by both courts.
“From an operational standpoint there are a few items that I wanted to point out how the company and its previous members have been affected.  Millions of dollars that were set aside at the time of purchase for network upgrades were postponed as the funds had to be used to defend the company against the baseless suit brought on by just a couple of people claiming to represent the ‘class.  The Supreme court clarified in their opinion the class was not being properly represented as they were not representative of the class.  These disgruntled people are the real villains by pursuing this and ultimately robbing Tri County members of millions of dollars of upgrades that will now take much longer to complete because the capital has been wasted on the extended litigation.
“Several large strategic business deals fell through because of the unsettled litigation either by TCT’s funding being encumbered by the lending institutions for fear of the liabilities associated with the litigation or because of the reputational damage as a result of the accusations made in the suit.   The fact that this has been hanging over the company for eight grueling years has created a perception of uncertainty throughout the company and some customers in ways that are not calculable.  It is a relief to be able to move on with a sole focus of providing the best services possible for the customers and the areas that we have the opportunity to serve.”
ADDITIONAL RULINGS
The District Court still has a couple of outstanding rulings to make and because of the appeal to the supreme court after the summary judgement in favor of BHT and TCT he did not rule on the remaining items, according to Wardell.  One of the defendants reached a settlement prior to the summary judgment by the court, he said.
Judge Conder still has to rule on what will happen with those settlement funds.  There will also need to be a ruling on who will pay the administrative/court fees now that the Supreme Court has ruled.