Motion filed to dismiss suit against Campbells

In a recent development in an ongoing case between Joe and Barbara Campbell and the Tri County Telephone Association (TCT), a motion was filed on June 20 by the Campbells, for a disqualification of counsel, and for dismissal of a federal lawsuit against the Campbells.

The case between the two parties began over 18 months ago, with a lawsuit filed against TCT by the Campbells, representing themselves and similar persons. The suit was filed based on their belief that more than 800 members of the TCT co-operative were robbed by TCT CEO Chris Davidson, CFO Steve Harper, former board members Dalin Winters, Clifford Alexander, J.O. Sutherland, Daniel Greet and John K. Johnson.

These defendants, as well as TCT purchaser Neil Schlenker, allegedly robbed owners in the co-operative of the value of their ownership interests after the co-op was sold. Among other allegations in the Campbells’ complaint are: voting irregularities, violation of bylaws, breach of fiduciary duty, misrepresentation and civil conspiracy.

However, in May the case took a different direction after TCT filed its own complaint in U.S. Cheyenne District Court against the Campbells. The complaint alleges Joe, a former TCT board member, maintained control of a company-issued laptop he was required to return. As he maintained control of the computer, it meant he had access to TCT trade secrets. TCT also claims Joe was the single board member opposed to the sale of the company in 2014.

The complaint against the Campbells further alleges Joe disclosed and used trade secrets without TCT’s consent, and that Barbara and others knew or had reason to know the secrets were from someone who had a duty to maintain secrecy. Further allegations are that damage was caused in regard to TCT’s contract with a bank, plans for a data center in Cody and customer agreements, and there was violation of the Computer Fraud and Abuse Act and breach of a non-disclosure agreement and corporate policies.

In an answer, affirmative defenses and counter claims to TCT’s complaint, the Campbells deny the company’s allegations against them.

According to the motion for disqualification of counsel, TCT is represented by William Simpson and the law firm of Burg, Simpson, Eldredge, Hersh & Jardine, P.C. That law firm has provided legal advice to the Campbells, according to the motion, on the facts and matters at issue in the lawsuit.

In a memorandum in support of the motion to disqualify counsel and the motion to dismiss, as the Campbells grew concerned about what was happening to the owners of the cooperative, they obtained legal advice from Chris Edwards, who is in Simpson’s firm and was at the time the advice was given. The memo states the couple had met with Edwards in person no fewer than two occasions, and she consulted with them on issues raised by the case at least twice.

The memo also states in 2008 Schlenker began working with TCT DEO Davidson to take over the cooperative. “After a failed takeover attempt in 2009, in which Joe Campbell was a leading opponent, Schlenker and Davidson devised a scheme to take over the cooperative. In 2014, their plan came to fruition. Schlenker, through what are known as the ‘BHT’ entities, took over the cooperative effective January 1, 2015.”

The memo goes on to state that Edwards was counsel for the cooperative in 2009 during Schlenker’s takeover attempt, and had advised the cooperative board and management that their interests could not be bought out. She further advised the Wyoming Cooperative Utilities Act barred acquisition of owners’ interests; this was later confirmed by attorney John Ruppert.

Ruppert and Edwards later attempted to provide advice on the fiduciary duties and limitations of the board and officers, causing Davidson to become upset with Ruppert and resulting in the attorney’s resignation. Edwards, concerned about the rights of cooperative owners, proposed sending a mailing to tell them of Schlenker’s takeover attempt. The memo states, “In her words, ‘[i]n other words, Neil Schlenker of Big Horn Telecommunications was trying to use our own cash to purchase the company.’”

In response to the proposed letter, and her knowledge of the cooperative’s business dealings, Davidson moved to oust Edwards.

The memo also outlines action taken by Davidson and cooperating board members to eliminate Joe’s opposition, including his being censured, deeming the acquisition of owners’ interests a “trade secret” and stating the cooperative’s policy wouldn’t cover his costs of a lawsuit the board was threatening to file against him.

The Campbells are also seeking dismissal of the federal claims in the case, for failure to state a claim for which relief can be granted. The motion further states in the absence of the federal claims the court would not have subject matter jurisdiction and state claims should be dismissed.

The memo states TCT’s complaint against the Campbells is defective for four reasons. First, it never states what trade secrets are at issue, instead stating “in a conclusory fashion, that there are trade secrets.” It is argued such a statement cannot invoke protection under the Trade Secrets Act which become effective on May 12, 2016. The complaint also does not state what secrets were used by the Campbells, where they were used, how they were used or how they had independent economic value to them.

Second, the complaint fails to state and claim action on the part of the Campbells was taken as interstate commerce, and without this allegation, there is failure to invoke federal jurisdiction.

Third, the complaint states the alleged misappropriation occurred on Jan. 1, 2015, and the Trade Secrets Act does not have a retroactive effect. Further, the complaint fails to specify when Joe allegedly disclosed secrets, though assuming TCT is complaining an unspecified trade secret was disclosed in the class action suit — filed Dec. 28, 2015 — such actions predate the effective date of the Act.

Finally, “the Act makes clear that it does not seek to inhibit whistleblowers. From the face of the complaint in this case . . . Mr. and Mrs. Campbell are whistleblowers entitled to protection from this kind of lawsuit.”

The motion to for disqualification of counsel also states an attempt was made to contact Simpson, who was out of the office. Larry Jones of the same firm was contacted and advised of the conflict of interest, though Jones did not indicate the firm would withdraw from the case, or that TCT would consider dismissal, but rather the firm would defend the motion.