ALAMEDA -- City officials say a recent judgment in their favor in federal court likely brings to an end the nearly six years of litigation they have faced over how they ran the city's former telecommunications system.
Vectren Communication Services maintained that it lost profits because the city did not properly manage the system and was seeking $10 million in damages.
But a final judgment from U.S. District Court Judge Susan Illston on April 1 that supports the city against all the claims brought by Vectren should close the case, although the company could still appeal, City Attorney Janet Kern said.
The judgment follows a monthlong jury trial in 2010 and a verdict in favor of the city on all but one of Vectren's claims, plus a decision from the Ninth Circuit Court of Appeals in the city's favor.
The case was returned to the U.S. District Court late last year for trial on one issue, which Kern said was the final chance for Vectren to secure damages. The company is a subsidiary of Vectren Corp., an Indiana-based energy conglomerate.
Alameda once faced three separate lawsuits and a combined $25 million in damage claims over its venture into the cable TV and Internet business, which was run under the auspices of Alameda Power & Telecom, now known as Alameda Municipal Power.
The city sold the financially troubled system to Comcast for $17 million in November 2008.
Vectren filed suit against Alameda in June 2008, saying the city could have done more to boost revenue from the system, including creating a phone service.
Vectren also alleged the city underreported profits that could have gone to the company.
Alameda won the other lawsuits filed by Nuveen Investments and the Bernard Osher Trust over its management of the system in 2011, when the District Court granted the city's motion for summary judgment, a decision the Ninth Circuit upheld on appeal in September 2013.
Nuveen had purchased $20 million in bonds for the system's telecom division, while the Osher trust purchased nearly $9 million in bonds.
Nuveen was seeking more than $10 million from the city, or the difference between the face value of the bonds and what it received from the sale of the system.
Attorneys for Nuveen claimed city officials and their underwriter, Stone & Youngberg, did not fully disclose the risks associated with the bonds and that the city could have done more to make the telecommunications system profitable.
"Once again, our courts have, after a long, hard-fought battle, vindicated Alameda Municipal Power and the tireless efforts of its staff in striving to make the telecom system a success," Mayor Marie Gilmore said after the most recent judgment in the Vectren case. "The judgment is a credit to the resolve and perseverance of the City Council, Public Utilities Board, city manager and our city attorney in defending the city of Alameda from meritless claims."
Ron Stassi, Alameda Municipal Power's interim general manager, said the litigation should "never have been brought in the first place" and that it distracted the agency from serving customers.
The Oakland-based law firm Wulfsberg Reese & Colvig represented the city in the Vectren case.
Contact Peter Hegarty at 510-748-1654. Follow him at Twitter.com/Peter_Hegarty.