For years, a group of critics have alleged that the 2014 sale of Tri County Telephone Association was the result of a broad conspiracy that bilked the cooperative’s then-owners out of tens of millions of dollars.

But last week, District Court Judge Jason Conder, of Lander, threw out a class action lawsuit brought by the critics of the $51 million deal. After reviewing thousands of pages of materials filed over seven years of litigation, the judge found those challenging the sale of the Big Horn Basin co-op haven’t provided the evidence to back up their allegations of a fraudulent scheme.

“... the undisputed facts demonstrate that no civil conspiracy existed,” Conder wrote in one portion of his 33-page ruling.

He said the plaintiffs, led by two former TCT board members, “loudly” and “feverishly” attacked the sale process in their 119-page legal complaint.

“However, the plaintiffs must do more than repeat their allegations and opinions,” the judge wrote in dismissing the conspiracy claim. “They must provide, by some measure of proof, evidentiary facts to support their position, which they have failed to do.”

While the plaintiffs alleged that the co-op’s board colluded with the buyer, Meeteetse businessman Neil Schlenker, to sell the business for far less than its worth, Conder said the records filed with the case showed that the board’s actions could instead be seen as rational business decisions — and he noted that Wyoming law gives the board the benefit of the doubt.

In a statement, TCT and Schlenker’s company, BHT Holdings, welcomed the judge’s ruling. The Cody-based firms described it as a “full vindication of the honest and diligent efforts of the former [TCT] officers and directors to negotiate and present to the cooperative members, for their approval, a transaction in the interests of those members, the company, and our community.”

TCT added that it “looks forward to rediverting resources, which have for many years been spent on unnecessary litigation defending against false accusations, to the core function of providing state-of-the-art telecommunications services to our customers and community.” 

However, the dispute is not yet over. The class representatives, Barbara Campbell and Bill Loveland, declined to specifically comment on the judge’s ruling, but they remain convinced that the members of the co-op did not receive their “just dues” in the sale. In a weekend interview, they said they will soon appeal Conder’s ruling to the Wyoming Supreme Court.

“We are still committed to the case, as we were at the beginning,” said Barbara Campbell, who filed the suit with her late husband, former TCT board member Joe Campbell, in December 2015.

Former board member Loveland, who became a class representative this spring, said the suit represents the interests of 720 former co-op members, ranging from farmers and ranchers to oil companies and churches.

“So we have an obligation to the members of the class on the case,” he said of pressing onward.

Barbara Campbell said the case will set an important precedent for the members of other cooperatives across Wyoming.

A member-approved sale

TCT began in 1953 as a small, member-owned utility, providing phone service to residents in Burlington, Otto, Emblem, Ten Sleep, Hyattville and Hamilton Dome. 

Over the decades, the co-op expanded its offerings and spread into places like Powell, Cody and Billings through a subsidiary called TCT West (whose customers were not co-op members). The now-private company currently serves nearly 13,000 customers across the Big Horn Basin and southern Montana.

Schlenker first approached the TCT board in 2009, when he offered to buy the telecommunications provider and its associated businesses for $11 million. The offer was unanimously rejected as being far too low. However, the board members — including Loveland and Joe Campbell — began preparing for a possible sale in the future.

The procedures put in place by the board came into play in 2013, when Schlenker made an improved proposal. It culminated in a $51 million deal that the board OK’d and presented to the co-op’s members. Joe Campbell cast the lone dissenting vote on the board against the offer and later joined Loveland and other members in a group called “Save our Co-op” that advocated against the sale. They tried to persuade their fellow co-op members that the deal was not a fair price, but in the end, 652 of the association’s 825 members, or roughly 79%, voted in favor of the transaction; 42 members — including the Big Horn County government and Big Horn County School District No. 1 — voted no.

“While Campbell and Loveland believed they know what was best for the members, the members decided for themselves that they would accept what they viewed as a fair deal, if not a great deal, presented to them by the directors,” TCT CEO Richard Wardell said in a statement. Wardell said the co-op’s former board “fought for every last penny that BHT was willing to pay when the deal closed, then they asked for more in the form of future obligations” of discounts for members and investments in infrastructure.

The deal closed in December 2014. After paying off the co-op’s debt and setting aside millions of dollars for future improvements, $29 million was allocated as a payout to the co-op’s members. Payouts ranged widely, but the allocation represented an average of roughly $34,000 per member.

The litigation

The Campbells filed suit in Park County Fifth District Court a year later. The complaint accuses TCT’s former officers and board members of conspiring with Schlenker to “rob the owners of TCT,” suggesting the company was worth at least $90 million.

The suit alleges that the sale was borne out of personal friendship between Schlenker and then-TCT CEO Chris Davidson, that the board used intimidation and threats to silence Campbell and other critics of the deal, hid critical financial information from the voting members, failed to follow the law and allowed Schlenker to use the co-op’s own cash to finance the transaction. It seeks to unwind the transaction and assess punitive damages.

However, in his ruling last week, Conder said it was too late to reverse the merger — and he said the suit lacked evidence to support its allegations.

“While the plaintiffs certainly allege and assert a wide array of generalized intentional torts or illegal acts, they have done nothing more than repeatedly allege them,” Conder wrote in dismissing a claim of breach of fiduciary duty, adding that, “Overall, they have merely relied upon repeated and restated allegations, making conclusory statements, and providing their opinions. This is insufficient.”

Conder also took issue with the suit being brought by former TCT board members. He wrote that Loveland and the late Joe Campbell “cannot sue others for actions they participated in and approved of.”

“... allowing this class to go forward and take a legal position wholly inconsistent with the class representatives’ previous positions is unacceptable,” Conder wrote in part.

The judge said the plaintiffs also needed to challenge the transaction while it was underway, not after the fact. Under the terms of TCT’s merger with BHT, the co-op’s members waived their right to sue the company and its leaders over the deal when they failed to designate a member representative during the sale process.

Joe Campbell and Loveland “were well aware of the ability to create a member representative to challenge the merger and to make many of the very same claims they are making now,” the judge wrote, but “they chose to ignore it.” As a result, he said they’re now prevented from contesting the transaction.

In an interview, Loveland said some people have gotten caught up in blaming the class representatives, missing the fact that the Campbells “never did file this for anyone other than the class of individuals involved — all of the telephone co-op members.” He praised the Campbells as “champions,” noting that Joe Campbell continued to attend critical meetings even as he was dying of cancer in 2020.

“He did a good job for the members,” Loveland said.

TCT CEO Wardell offered a different take, saying the filings in the case reflect “a disgruntled board member’s pursuit of vengeance by submitting mountains of paperwork laden with vitriolic accusations, but devoid of any actual evidence of wrongdoing.”

A $200K settlement and $400K in costs

Although the plaintiffs have had no luck in their claims against TCT, BHT and their officers, they did secure a $200,000 settlement from TCT’s former legal counsel in early 2021. The plaintiffs charged that Cheyenne attorney Michael Rosenthal and his firm Hathaway & Kunz had played a “central role” in the “fraudulent scheme.” In the settlement, Rosenthal and the firm denied any wrongdoing, but said they agreed to the payment “to resolve claims of a disputed nature, to end their involvement [in] the Class Action, and to buy their peace.”

Of the $200,000, half is set to be distributed to the co-op’s roughly 720 former members, minus about $6,000 to cover the expense of distributing the money. Exactly how and when that $93,987.40 will be distributed has yet to be decided by Judge Conder.

The other $100,000 is earmarked to cover some of the costs that the plaintiffs’ attorneys in Cheyenne and Salt Lake City have incurred in prosecuting the suit. Last December, the plaintiffs’ legal team reported that their costs (which are in addition to attorney’s fees) had topped $400,000 and were still climbing.

While not referencing a dollar amount, TCT CEO Wardell said the defendants’ expenses have been “extraordinary.”

The highly contentious nature of the case has driven up the cost, with more than 600 docket entries that have included fights over which attorneys and individuals should be allowed to represent the class and which experts are qualified to offer an opinion on the case. The parties even sparred over a David Letterman-inspired “Top Four List of Things the Defendants Don’t Want You to Know in this Case” that the plaintiffs included in one filing, complete with a picture of the late night host. (District Court Judge Young later struck that version of the filing, calling it “unprofessional and lacking in civility.”)

All told, the filings have taken up 43 volumes in the Park County Clerk of District Court’s vault — far beyond the single volume of an average typical case. Before issuing last week’s order, Conder said he had “painstakingly reviewed the entire record.”

‘We’re just as committed now’

Amid the many filings, the case has moved slowly. TCT requested summary judgment back in early 2020, but due to COVID-19 and “numerous hearings, dozens upon dozens of motions, updated motions, and overall procedural nuances,” Conder didn’t hold oral arguments until February — and it took another eight months for him to issue his order.

In August, after Conder announced he’d be ruling in favor of TCT, the plaintiffs’ attorneys asked for the “immediate” release of an appealable order, saying the case needed to proceed “as swiftly as possible,” particularly for the elderly class members. Cheyenne attorney Drake Hill referenced the adage that “justice delayed is justice denied.”

In a weekend interview, both Loveland and Barbara Campbell acknowledged some weariness with the length of the proceedings, but said they always knew it would be a long haul.

“I think it’s safe to say that we’re just as committed now as we’ve ever been to get the right outcome,” Loveland said.

TCT, however, criticized the plaintiffs’ plan to appeal.

“This intended continuation of what appears to be an ego-driven saga of revenge will surely continue to drain the resources of our judicial system and resources that could better be spent on our community members,” Wardell said.