Frontier calls Citynet ‘disgruntled competitor’ in motion to dismiss

By Kyla Asbury | Aug 30, 2016

CHARLESTON – Frontier is calling Citynet’s lawsuit against it for internet issues a six-year vendetta against it by a “disgruntled competitor.”

“This is a familiar tale,” the Aug. 23 memorandum in support of Frontier’s motion to dismiss states. “After losing a bid for government funds to a competitor, a company seeks revenge.”

Frontier is asking District Judge John T. Copenhaver Jr. to dismiss Citynet’s lawsuit, alleging that Citynet has taken part in a “six-year vendetta against two recipients of those funds: the State of West Virginia and grant sub-recipient Frontier, a Citynet competitor.”

Frontier alleges that a review of the complaint and applicable law confirms that Citynet’s claims are baseless, according to the memorandum.

“In the first instance, because of the long public airing of the allegations that preceded this suit, two of Citynet’s claims (Counts I and V) are subject to dismissal under the False Claims Act’s public disclosure bar,” the memorandum states. “But even if the public disclosure did not apply, the fatal flaws in Citynet’s claims are many.”

Citynet’s claims rest on the “faulty premise” that the NTIA grant prohibited funds from being used for last mile work and indirect costs when the very documents on which Citynet purports to rely refute that premise, according to the memorandum.

Even if the premise were not false, Citynet’s allegations do not state a claim under the False Claims Act because Citynet does not allege that Frontier made any false statement to the federal government to obtain payment of the allegedly prohibited costs.

“In the absence of a false statement, an allegation of noncompliance with contractual terms and conditions is at most a claim for simple breach of contract—not fraud,” the memorandum states.

Citynet’s amended complaint states no claims for which relief can be granted and should be dismissed, according to the memorandum.

“Citynet’s frivolous, yet enduring campain—which has already had audiences in the press, the Department of Justice and the very agency Citynet alleged was defrauded—does not belong in this court,” the memorandum states.

Citynet filed the lawsuit against Frontier in 2014, but it was under seal until July when an amended complaint was filed.

It alleged that Frontier misused $40.5 million in federal stimulus funds and built a high-speed fiber broadband network designed to shut out competitors in West Virginia.

Citynet claimed Frontier was double-billing, falsifying records and charging excess fees not authorized under the federal grant that paid for the broadband expansion project.

In 2010, West Virginia received $126.3 million in federal stimulus funds to provide high-speed internet to 1,064 public facilities — mostly schools, libraries, health clinics, courthouses and State Police detachments. About $40 million of the $126.3 million was set aside to build a fiber-cable network.

Frontier is West Virginia’s largest internet provider.

U.S. District Court for the Southern District of West Virginia case number: 2:14-cv-15947

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