CHARLESTON -- In a reversal, the U.S. Attorney for the Southern District of West Virginia wants to file an updated response to a motion by the state Attorney General to intervene in a lawsuit against Frontier West Virginia and former state officials that backs the state's motion with certain conditions.
Frontier filed a response Monday to a motion by the U.S. Attorney's Office to file a surreply to the state's explanation on why it should be allowed to intervene in the case brought under the False Claims Act by Bridgeport-based internet service provider Citynet.
Assistant U.S. Attorney Jennifer Mankins filed the motion to file a surreply on Dec. 16. According to USLegal.com, a surreply is an additional reply after a motion has been fully briefed. Attorney General Patrick Morrisey filed a motion to intervene in the Frontier lawsuit Nov. 8 to recoup $4.9 million in penalties and fees from Frontier after the state paid $4.6 million to the federal government due to misuse of a grant for broadband internet expansion.
Both the U.S. Attorney's Office and Frontier filed responses to the Attorney General's motion Nov. 22, arguing that the motion to intervene should be dismissed. The Attorney General's Office replied to those responses Nov. 27.
After reviewing the Attorney General's explanation on why their motion to intervene should be allowed, the U.S. Attorney's Office filed their surreply supporting West Virginia's motion as long as the state doesn't assert claims against the federal government.
"It appears that the state has clarified via its reply that it is neither seeking to assert a claim against the United States nor claiming an entitlement to some portion of any False Claims Act or any other recovery paid to the United States," Mankins wrote.
"The reply also indicates that the state is not actually seeking to intervene in the ongoing FCA litigation, but rather assert an equitable claim against (Frontier) only after this FCA litigation has concluded -- that is, after (and if) one or more of the defendants has been found liable under the FCA for causing the submission of the same unallowable costs for which the state has since repaid the government administratively."
In 2009, the state applied for a $126 million stimulus grant through the Broadband Technology Opportunities Program for broadband expansion in West Virginia. Frontier, the sub-recipient of the grant, was supposed to build middle-mile fiber connections and allow competitors to also access these lines at lower rates.
Frontier was accused by the Inspector General's Office for the U.S. Department of Commerce for marking up invoices to the state by as much as 35 percent and charging the state millions in indirect costs that were not allowable.
The West Virginia Legislature passed Senate Bill 1026 in May to move $4.6 million from the West Virginia Treasurer's Office unclaimed property line item to the state general fund to repay the federal government.
Citynet filed suit against Frontier in 2014, accusing the telecommunications company of allegedly misusing $40.5 million in federal grant funding to build a statewide broadband network only benefiting Frontier.
In response to the U.S. Attorney's motion to file a surreply, Frontier attorney David Fenwick said the explanations used by the U.S. Attorney's Office don't match the statements made in the Attorney General's motion and responses.
"The United States recasts the state's motion in a manner that is incompatible with the state's arguments," Fenwick wrote. "The Frontier defendants do not oppose the United States' request to file a surreply, but file this brief to note that the proposed surreply further highlights that the state has not sufficiently articulated the nature of the procedural and substantive relief it requests."
(Adams can be contacted at sadams@newsandsentinel.com)