Town responds to banks’ lawsuit battles

Mudslinging, allegations of conspiracy & more part of lawsuit filed against Town of Glenrock, mayor, attorney, others in battle over QSF clients, profits

Allegations of conspiracy, fraud, violating trade secrets, racketeering and interference with business relationships are being thrown around in two competing lawsuits filed in federal courts in Wyoming and Virginia.

And, the Town of Glenrock and two of its officials are smack in the middle of one of them.

The Town of Glenrock, Mayor Bruce Roumell, Glenrock Attorney Amy Iberlin and Flatirons Bank of Colorado – as well as 11 other defendants – are in a legal battle over Qualified Settlement Fund (QSF) platforms, profits and clients. The 15 defendants – including Flatirons, Roumell, Iberlin and the town – are facing a $320 million-plus lawsuit filed by Eastern Point Trust Company (EPTC).

That suit, filed in the U.S. District Court for the Eastern District of Virginia, accuses the 15 of committing racketeering, violating trade secrets, conspiracy and other actions.

In the suit, EPTC claims former clients and unnamed others conspired to illegally create their own QSF platform using the company’s proprietary software, systems and documents. The defendants have not filed their responses to EPTC’s allegations because as of Oct. 26 EPTC had yet to serve any of the defendants involved in the case and they will have a deadline to respond after being served.

However, in September, Flatirons Bank filed its own antitrust lawsuit against EPTC, claiming interference with a business relationship among other allegations.
Saturday, the town – which has been silent on the saga – responded to the allegations in a statement and in an interview. Iberlin, for example, reiterated much of what is in the Flatirons Bank lawsuit against EPTC and claimed EPTC is trying to bully a small town and its officials rather than compete in an open market.

WHO’S SUING WHO
EPTC’s lawsuit apparently stems from the private investigation into the QSF activities of Flatirons Bank and comes on the heels of another court action.
On Sept. 22, Flatirons Bank filed an antitrust lawsuit in U.S. District Court for the District of Wyoming, alleging that EPTC has “launched an aggressive, unlawful campaign against Flatirons in an attempt to stifle Flatirons’ QSF business and steal Flatirons’s market share.”

In that suit, Flatirons is accusing EPTC of “. . . monopolistic and non-competitive behavior targeting Flatirons’ business partners and clients,” demanding the clients – the Town of Glenrock and other defendants – cease doing business with Flatirons or else face frivolous litigation.

“. . . EPTC has concocted a fictitious and outlandish narrative that Flatirons’ propriety QSF platform, which Flatirons created from scratch, somehow copies or infringes on EPTC’s outdated QSF offering. Nothing could be further from the truth,” Flatirons said.

EPTC knows their narrative against Flatirons is false, yet has continued on their goal of defaming Flatirons Bank and using scare tactics such as “cease and desist letters and threats of lawsuits” to intimidate Flatirons’s QSF clients and business partners, Flatirons alleges in court documents.

The Flatirons’ complaint states, “EPTC’s conduct is not simply heavy-handed business maneuvering. It is the type of anti-competitive behavior Wyoming law was designed to prevent . . . rather than competing on their merits by improving its own outdated QSF platform, EPTC is using coercive threats against clients and business partners to block market access for Flatirons. This conduct . . . is designed to preserve EPTC’s complacent monopoly in the QSF market and stifle the very innovation and efficiency that competition is meant to foster.”

Flatirons said their entry into the marketplace represents lawful competition and technological advancement. EPTC’s response in seeking to eliminate a rival through intimidation rather than market performance runs directly counter to the principles enshrined in Wyoming’s constitution, according to the lawsuit.

Initially, the Town of Lovell participated in – and later backed out of – an agreement to be the sponsoring government entity with Flatirons Bank. The Town of Glenrock later stepped in and served as the sponsoring governmental entity needed under the law for a bank to create a QSF.

FIGHTING BACK
On Saturday, Oct. 25, Iberlin of the Williams, Porter, Day, & Neville law firm said EPTC’s civil lawsuit is “(a) baseless and retaliatory lawsuit (filed) in Virginia federal court, naming myself, the Honorable Mayor Bruce Roumell, and the Town of Glenrock as defendants.”

Earlier this year, Iberlin recused herself from representing the Town of Glenrock in the EPTC and Flatirons lawsuits. She said she felt it would be a conflict of interest to represent the town and herself.

Timothy Stubson, of Crowley Fleck PLLP, and Kevin Shutte, of Otteson Shapiro LLP are representing the town in the Flatirons case against EPTC, she said. They likely will also be part of the legal team who represents the town in EPTC’s case against them in Virginia.

Iberlin charged that EPTC’s legal action is a transparent attempt to intimidate a small Wyoming community, its elected leadership and its legal counsel through baseless accusations and the threat of expensive, cross-country litigation.

She said Roumell and the Glenrock Town Council have adopted her statements concerning the lawsuit.

“We will not be bullied and we will not be silenced,” Iberlin stated. “We intend to fight these allegations vigorously and expose this lawsuit for what it is: A desperate attempt by a market incumbent to crush a competitor who dared to innovate a new product.”

In her email response, Iberliln wrote, “The facts, many of which are already detailed in a SEPARATE federal lawsuit filed against EPTC in Wyoming, tell a story not of theft, but of competition.”

Iberlin stated that her only involvement in this situation is that she connected a “forward-thinking Wyoming town with an innovative business” and that’s the very essence of free enterprise. “Businesses succeed by offering better products and services, not by using strong-arm legal tactics to eliminate the competition.”
According to Iberlin, for years EPTC enjoyed a comfortable position in the QSF market. Flatirons Bank, headquartered in Colorado, along with others more recently have “developed a new, more efficient and user-friendly QSF platform. Seeing a legitimate and promising business opportunity that would benefit our community, the Town of Glenrock partnered with Flatirons Bank.”

As far as she knows, the town may receive about $100 per QSF transaction, she said.

Earlier this summer, the town, Iberlin and Roumell each received letters from EPTC, ordering them to cease and desist work with Flatirons and Justice Escrow (Justice Escrow is Flatirons’ QSF program) or be named in lawsuits against them, threatening to sue for astronomical sums of money that could bankrupt not only the town, but everyone involved.

Iberlin said EPTC’s strategy is clear and follows a disturbing pattern.

“As alleged in the Wyoming lawsuit against them, EPTC’s business model appears to rely on threatening partners, clients and even municipalities with frivolous (and expensive) litigation to maintain its market dominance. They previously targeted the Wyoming Town of Lovell with threats of a $100,000,000 lawsuit, successfully bullying them into terminating their relationship with Flatirons. When those same tactics failed with us, they filed this lawsuit.

“Here in Wyoming, we subscribe to the Code of the West. We believe in standing tall even when – and especially when — a bigger, stronger, or meaner opponent tries to knock you down. (The EPTC) lawsuit is an affront not only to the Town of Glenrock and its representatives but to the principles of fair competition and innovation that drive our economy,” she said. “EPTC may believe its corporate power and Virginia-based lawyers can bully a small Wyoming town into submission, but they are sorely mistaken.”

Iberlin said they are proud of their decision to partner with an innovator that “brought a better product to the market.”

“We are proud to stand up for our community’s right to pursue economic opportunities and we will vehemently defend ourselves against this bully in Virginia. We are fully confident that when the facts are presented, the truth will prevail.

“Why would we settle (with EPTC) if we haven’t done anything wrong?” Iberlin stated in a call Saturday, Oct. 25.

For his part, Roumell on Sunday said, “I just think it’s crazy (EPTC) is trying to file a lawsuit against us. I believe what we are doing is fine and we will move forward with it.”

Previously, the Independent reported on the town being sued for non-compliance in providing public records (July 30 edition), related to the controversy and private investigation involving the town and Flatirons Bank.

The suit resulted in the town releasing mostly unredacted texts and email exchanges between the parties involved in the latest suit, but EPTC alleged later that not all documents were provided in the “Plaintiff’s Reply to Defendant’s Response to Plantiff’s Supplemental Motion to Compel Compliance with Wyoming Public Records Act and For Order to Show Cause, (Stephen Miller vs. The Town of Glenrock, Oct. 16).”

Iberlin said those documents have since been provided.

The Budget and Independent received copies of the mostly unredacted texts and emails and have requested the full unredacted versions.