Final Fee Determination in Largest Title VII Sex Discrimination Class Action #USIA #DOS

 

The case is Civil Action No. 1977-2019 HARTMAN, et al v. ALBRIGHT, et al (now called CAROLEE BRADY HARTMAN, et al., v. MICHAEL R. POMPEO, et al.,name substituted under under Federal Rule of Civil Procedure 25(d)):

This case is in all respects extraordinary. Originating over forty years ago, it represents the largest Title VII sex discrimination class action settlement in United States history. Its over 1,000 class members each received an average of $460,000—the largest per-capita recovery in a case of its kind. Class members are women who sought employment or promotions with the United States Information Agency, a former agency of the United States government, the relevant components of which were incorporated into the State Department. Remarkably, the lead counsel for the class, Bruce Fredrickson, took on the case as a 26-year-old just one year out of law school and, now well into his sixties, has stayed on for its duration. Over the last four decades, Mr. Fredrickson has led a team of over 120 individuals across seven law firms. In 2018, the last of the $508 million settlement fund was distributed to class members, leaving resolution of attorneys’ fees as the sole remaining issue.

Since 1995, there have been 28 interim payments to class counsel for fees, expenses, and interest accrued during the pendency of the case, totaling $26,570,701.19. Plaintiffs now seek an additional $34,114,143.52, for a final total fee recovery of $75,000,000. 2 To justify this demand, Plaintiffs primarily argue that they are entitled to a percentage of the total settlement under a “constructive common fund” theory. Alternatively, Plaintiffs argue that an enhancement to the lodestar is proper because the lodestar calculated for the interim fee petitions does not reflect class counsel’s true market value and it does not adequately compensate them for delay in receiving payment.

For the reasons that follow, the court denies Plaintiffs’ motion without prejudice. This is a fee-shifting case—not a common-fund case—and the parties agreed to use the lodestar method— not the percentage-of-the-fund method—to calculate the final fee award. Although the court agrees with Plaintiffs that the interim lodestar is likely not an adequate measure of class counsel’s true market value, the court is not in a position to award an enhancement because the lodestar, as calculated, is itself inexact. The court is hopeful that this decision will provide a path forward for the parties to reach an agreement on what the proper lodestar should be, as well as any compensation for delay.
[…]
…. Plaintiffs need to go back to the drawing board. They bear the burden of “identifying a factor that the lodestar does not adequately take into account and proving with specificity that an enhanced fee is justified.” Purdue, 559 U.S. at 546. Although it is apparent that an adjustment to the lodestar for the eighth through twenty-eighth fee petitions (covering years 1998–2018) is necessary to “approximate[ ] the fee that the prevailing attorney would have received if he or she had been representing a paying client who was billed by the hour in a comparable case,” the court lacks the information necessary to “adjust the attorney’s hourly rate in accordance with specific proof linking the attorney’s ability to a prevailing market rate.” Id. at 551. Furthermore, although some additional compensation is appropriate to account for delay of amounts unpaid, Plaintiffs have not proposed “a method that is reasonable, objective, and capable of being reviewed on appeal” to calculate such amount. Id. Although the court denies Plaintiffs’ request for a final attorneys’ fee award at this juncture, the court hopes that its rulings will assist the parties in reaching a resolution. 

Footnote says that multiple judges have presided over this case during its 43-year lifespan. Read here.

 


 

US Embassy Iraq Contractor Gets $62 Million in @StateDept Contract Dispute Settlement

Updated 10/19/20 4:12 pm PST with the potential value for the design build construction contracts in Thailand and in Namibia. See below.

In October 2009, State/OIG issued its Audit of the Design and Construction of the New Embassy Compound in Baghdad, Iraq (PDF):

“…[W]e found that although the construction of the approximately $600 million NEC in a war zone in 34 months was a significant accomplishment, consid­erable construction deficiencies remained because designs for the facilities had not been completed and approved and quality control and commissioning procedures were inadequate.
[…]
We recommend the Department attempt to recover an estimated $43.2 million from First Kuwaiti to bring construction deficiencies to contract standards.
[…]
we estimated that approximately $33 million should attempt to be recovered from First Kuwaiti for incomplete and undocumented design work. Also, we identified that as a result of First Kuwaiti’s inadequate quality control program, it should be held accountable for additional maintenance charges of approximately $38 million that could carry over into future years. Further, we estimated recovering ap­proximately $3.8 million from First Kuwaiti because commissioning activities either were not performed or were performed incorrectly.

In it’s response, the State Department’s Bureau of Administration said:

“The Contracting Officer will prepare a letter to the Contractor, detailing each of [the OIG] recommendations and request consideration from the Contractor in each amount recommended by the OIG.” The A Bureau requested that OIG provide the Contracting Officer infor­mation detailing the basis for computing the $132 million in costs recommended for recovery from First Kuwaiti. The A Bureau also stated, “The formal process to recover any funds from the contractor will be assessed in terms of overall benefit to the government.”

At that time, State/OIG said:

“The A Bureau’s response meets the intent of OIG’s recommendations to recover $132 million from the contractor attributable to construction deficiencies; incom­plete and undocumented work; additional maintenance charges incurred because of inadequate quality control and commissioning procedures; and contract noncompli­ance, including liquidated damages and interest for an unauthorized advance. OIG and USACE will provide the contracting officer the requested support for the $132 million in questioned contract costs.”

We don’t know what happened to that recommendation for recovery of funds in 2009.
Fast forward to April 23, 2013, the Civilian Board of Contract Appeals (CBCA) issued a decision in First Kuwaiti Trading & Contracting W.L.L. v. Department of State contract dispute (CBCA 3069):
“Appellant, First Kuwaiti Trading & Contracting W.L.L. (First Kuwaiti), filed the instant appeal from a decision of a Department of State (State) contracting officer dated August 10, 2012, denying a claim by First Kuwaiti relating to two unpaid invoices for work performed for State under two contracts at the United States New Embassy Compound in Baghdad, Iraq, contract number SALMEC-06-0049, and its modifications, and contract number SALMEC-05-0020, and its modifications. The parties entered into a settlement agreement with respect to the appeal and filed with the Board a stipulation of settlement, reflecting their amicable resolution of the issues that are the subject of the appeal. The parties have jointly moved the Board to issue a judgment in favor of First Kuwaiti in the amount of $2,547,745.20, to be paid from the permanent indefinite judgment fund, 31 U.S.C. § 1304 (2006). Under their settlement agreement and stipulation, they have agreed that Contract Disputes Act (CDA) interest shall accrue on said judgment amount, beginning on March 23, 2012, and continuing until payment of the judgment is made, and that such interest shall be paid to First Kuwaiti together with payment of the judgment amount.
First Kuwaiti has waived any other claim to interest and/or for any attorney fees and expenses incurred in connection with the appeal. The parties, in their joint motion and under the terms of the stipulation, have agreed that neither party will seek reconsideration of, or relief from, this Board’s decision under Board Rules 26 and 27, respectively, and that neither party will appeal this Board’s decision.”
See the April 23, 2013 full decision (CBCA 3069) here.
Below are the New Embassy Compound Baghdad Contracts that the OIG audited in 2009. Note that the contract numbers cited by the CBCA decision are SALMEC-06-0049 and SALMEC-05-0020 for the New Embassy Compound in Baghdad. In the 2009 OIG audit, the two contracts are listed as SALMEC-06-C0049 and SALMEC-05-C0020; we note the appearance of the letter “C” in the two contracts listed in the 2009 OIG audit  of the New Embassy Compound in Baghdad. (If you know what that means, do let us know).
So that was 2013. For more litigative payments, see @StateDept’s Litigative Payments FY2018-FY2020 Via Judgment Fund-$72,634,701.57.
Five years later, on December 3, 2018, the CBCA issued a “Motion for Partial Summary Judgment Granted In Part” in the First Kuwaiti Trading & Contracting, W.L.L. v. Department of State new contract disputes  marked “CBCA 3506, 6167”:

“First Kuwaiti Trading & Contracting, W.L.L. (FKTC) appealed the denial of its claims by the Department of State (DOS) arising from the construction of the embassy compound in Baghdad, Iraq. FKTC presented approximately 200 cost claims that totaled $270 million. DOS moved for summary judgment on thirteen of those cost claims, challenging FKTC’s reliance upon the War Risks clause, the superior knowledge doctrine, the Changes clause, and the implied duty of good faith and fair dealing as the basis for these claims. DOS also asserts that actions underlying FKTC’s changes claims constitute sovereign acts, precluding liability pursuant to the sovereign acts doctrine.

We grant DOS’s motion regarding the scope of the War Risks clause and superior knowledge doctrine, thereby denying seven of FKTC’s claims that are premised solely upon these bases. We deny DOS’s motion regarding the claims that are also based upon the Changes clause or the implied duty of good faith and fair dealing, finding that there are disputed issues of fact. We also deny DOS’s motion regarding the sovereign acts doctrine, finding that DOS has not established the applicability of that doctrine on the current record. Six of the thirteen claims subject to the motion survive DOS’s challenge on this basis.”

The “Statement of Facts” include:
  • A. Contract Price and Provisions Allowing for Adjustment of Contract Price
  • B. War Risks Clause
  • C. Security Requirements and Warnings
II. FKTC’s Claims Challenged by DOS (it’s quite a read):
  • A. Duck and Cover Alarms
  • B. Rocket Attacks—Three claims
  • C. Equipment Repositioning
  • D. Extra Security
  • E. Retention Bonuses and Danger Pay
  • F. Air Transport—Labor Hours
  • G. Sand and Gravel Double-Handling
  • H. Truck Convoy Delays, Truck and Driver Protection Requirements, and Truck Convoy Support Requirements
  • I. Superior Knowledge Claims
The CBCA’s discussion includes:
  • I. War Risks Clause Does Not Provide for Recovery on the Thirteen Challenged Claims
  • II. FKTC Has Failed To Identify a Sufficient Basis for Its Superior Knowledge Claim
  • III. Disputed Issues of Fact Preclude Summary Judgment on FKTC’s Changes Claims

A. FKTC Has Shown Disputed Issues of Fact with Regard to Changes Clause on Six Claims

B. DOS Has Not Provided Evidence to Support a Sovereign Acts Defense

  • IV. Disputed Issues of Fact Preclude Summary Judgment on FKTC’s Implied Duty of Good Faith and Fair Dealing Claim
  • V. Purported Lack of Contemporaneous Documentation is not Grounds for Summary Judgment
The Board’s decision is that “Respondent’s motion for partial summary judgment is GRANTED IN PART. Appellant’s claims based solely upon the War Risks clause and the superior knowledge doctrine challenged by Respondent are denied. The hearing in this matter will commence on January 22, 2019.”
See the December 3, 2018 decision (CBCA 3506, 6167 ) here.
HOLD ON. We’re just getting to the best part.
On Monday, April 1, 2019. the Civilian Board of Contract Appeals issued “GRANTED IN PART: April 1, 2019” judgement in First Kuwaiti Trading & Contracting, W.L.L. v. Department of State (CBCA 3506, 6167) dispute:

“On March 28, 2019, the parties submitted to the Board a joint motion for judgment on a stipulated settlement. The parties requested that the Board enter judgment in the amount of $62,500,000, with payment to be made through the permanent indefinite judgment fund in accordance with 31 U.S.C. § 1304 (2012). The amount includes all the interest to which appellant is entitled under the Contract Disputes Act. 41 U.S.C. § 7109. The parties have agreed that they will not seek appeal of, reconsideration of, or relief from the Board’s decision.

Decision: The Board GRANTS IN PART these appeals. In accordance with the parties’ joint motion, the Board awards appellant, First Kuwaiti Trading & Contracting W.L.L., the stipulated judgment amount of $62,500,000.”

See the April 1, 2019 decision (CBCA 3506, 6167) here.
So the CBCA document says the contractor presented approximately 200 cost claims that totaled $270 million. It got $62,500,000.
We’re sure the government would argue that this is a win, yeah? On the other hand, $62.5 million is more than the expected US investment in the local economy for the construction of US Consulate General Chiang Mai in Thailand at $45 million plus change. Or three times the USG investment in the local economy for the construction of the US Embassy in Namibia at $17 million.
(Correction: The US Embassy Namibia design build construction contract has a potential value of $173.4million; the New Consulate Compound (NCC) design build construction contract in Chiang Mai, Thailand has a potential value of $156.8 million. Thanks A!).
Oh … what’s that?

 


@StateDept’s Litigative Payments FY2018-FY2020 Via Judgment Fund-$72,634,701.57

 

The Civilian Board of Contract Appeals (CBCA) is an independent tribunal housed within the General Services Administration. The CBCA presides over various disputes involving Federal executive branch agencies. Its primary responsibility is to resolve contract disputes between government contractors and agencies under the Contract Disputes Act. 
Contract Disputes (CDA) claims paid by the Judgment Fund are reimbursed by the agency whose appropriations were used for the contract in dispute. The No FEAR Act requires agencies to reimburse the Judgment Fund for payments made on their behalf to employees, former employees, or applicants for federal employment arising out of claims of actual or alleged violations of Federal anti-discrimination laws, Federal whistleblower protection laws, and/or retaliation claims arising from the assertion of rights under those laws.
For Suits in Admiralty Act, see USDOJ’s Aviation, Space & Admiralty Litigation Section of the Torts Branch which handles aviation, space, and maritime cases and claims. “Our clients include the Federal Aviation Administration, the U.S. Army Corps of Engineers, all military services including the Navy and the Coast Guard, the Maritime Administration, the Transportation Security Administration, NASA, NSA, and the Departments of State, Interior, Transportation, and Commerce.  In its admiralty practice, the Section represents the United States in the government’s role as ship-owner, regulator, and protector of the nation’s waterways and maritime resources. Its admiralty litigation concerns collisions involving U.S. vessels and warships, grounding of vessels while using U.S. government-produced charts, challenges to the boarding of vessels on the high seas during national security and drug interdiction activities, and maritime-based pollution incidents, including vessel oil spills.  Affirmative admiralty actions seek compensation for the loss of government cargo; damage to locks, dams, and natural resources; and the costs associated with maritime pollution cleanups.”
The largest settlements below for the State Department are in contract disputes, one for $62 million, and another for $4.5 million. We’ve figured out where that $62 million settlement went, have you?
Second largest settlements are in payments under the Suits in Admiralty Act; two payments in 2018 and 2019 respectively for $2.5 million and $2 million each.
There are several foreign claims, and federal tort claims in US courts related to traffic (settlements are larger than in administrative payments). Also two notable cases for Title VII Discrimination in Federal Employment, both in the District of Columbia, one with a $14K settlement and the other with $200K.


 


 

 

 

@StateDept’s Administrative Payments FY2018-FY2020 Via Judgment Fund

The U.S. Treasury Department’s Judgment Fund pays court judgments and compromise settlements of lawsuits against the government. Federal agencies may ask the Bureau of the Fiscal Service to pay from the Judgment Fund for:
  • Most court judgments and Justice Department settlements of actual or imminent litigation against the government
  • Administrative claim awards (settlements by agencies at the administrative level, not involving a lawsuit)
In most cases, the agency does not have to reimburse the Judgment Fund. However, reimbursement is required when the case comes under either the Contract Disputes Act or the No FEAR Act. Below is a list of administrative payments from the Judgement Fund for the State Department. Majority of the description says tort claims in unnamed foreign countries related to traffic. The amount of payment ranges from $2,914.77 to $36,000. We will have a separate post for litigative payments. 

(Click image above for larger view)

 

 

 

Is this how you keep a potentially embarrassing case away from public eyes?

 

Via FSGB 2018 Annual Report:

In FSGB Case No. 2018-001, an FS-01 appealed a 3-day suspension on a charge of Conduct Unbecoming. The charge arose from allegations that he facilitated the inappropriate hiring of a former political appointee. Grievant contends that, although he was the hiring official, all of his actions were at the direction of senior bureau staff and in consultation with the bureau’s administrative staff. The case was settled and withdrawn.

*

FSGB Case No. 2018-001: On March 1, 2018, the Foreign Service Grievance Board received a Notice of Withdrawal from grievant’s attorney, {Attorney’s Name}, stating as follows: “Grievant, {Grievant’s Name}, through counsel, {Attorney’s Name}, hereby withdraws his grievance appeal filed on January 3, 2018, with prejudice. The parties have settled their dispute.”  The Notice of Withdrawal has been entered in the record of proceedings, and the record is now closed.

We understand that because this case was settled and withdrawn there is no actual FSGB decision in the case; thus, there is no publicly available record of the case. Presumably State/HR/Grievance has the paper trail and the finer details, but for now, because the case was settled we won’t know who is the ex-political appointee, which bureau was involved, which senior bureau … er staffers were responsible, or the terms of the settlement.  One wonders if the State Department settled this case because it did not want the details in public view, or if grievant has the “receipts” that could get higher ups in a specific bureau in trouble?

via tumblr.com

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EEOC Case: Investigators Find False Accusations, Agency Refuses to Help Clear His Name

Posted: 3:01 am ET

 

This is an EEOC case about a complainant who was the Consul General at the U.S. Consulate General in Naples, Italy.  The name used here is a pseudonym as in eeoc practice but the details are similar to the ugly, nasty case a few years back that made the news.  Most notable lesson here about the Privacy Act, and the limits of  Diplomatic Security’s willingness to clear somebody’s name when needed.

Via eeoc.gov

Believing that the Agency subjected him to unlawful discrimination, Complainant filed an equal employment opportunity (EEO) claim with the Agency. On November 26, 2013, Complainant and the Agency entered into a settlement agreement to resolve the matter. This decision on the breached settlement was issued in November 2016. Excerpt below:

Background:

The record reflects that a subordinate of Complainant (Subordinate 1), who resigned in May 2012, and to a lesser extent her spouse made highly charged allegations against Complainant, i.e., entertaining prostitutes, escorts, and married women in his residence during work hours, engaging in fraud or mismanagement of funds, permitting his driver to be fired so his job could go to someone else and as a form of retaliation, throwing metal umbrella pots from his sixth floor residence down to the parking lot below and then jumping on and crushing them, and this was captured on CCTV and in front of the security guards, and so forth. By April 2013, the U.S. Embassy Rome, in consultation with the Bureau of Diplomatic Security, Special Investigation Division initiated an investigation. The investigation was conducted by two Special Agents with the Bureau of Diplomatic Security, and involved 20 individual interviews with Consulate Staff. It concluded that the accusation that Complainant threw metal pots was “false,” and the three other allegations specified above were completely false. The investigation found that the remaining allegations were variously false, completely false, unsubstantiated, not supported by evidence, and one, in essence, grossly exaggerated.

On June 16, 2013, the New York Post and Fox News published highly negative stories about Complainant, writing for example that Subordinate 1, a whistleblower, said Complainant had trysts with hookers, and this was the latest black eye for the scandal-ridden State Department. On June 17, 2013, Complainant was copied on an Agency email chain regarding the New York Post reporting Subordinate 1’s allegation that Complainant insisted a staffer have an abortion and the staffer said she got her “tubes tied” at his instruction. It was indicated in the email chain that the staffer said the article was “all lies” and felt strongly that she should respond to the article by saying something. The above DCM advised that it would be much better for the staffer not to say anything for now – that this could all blow over quickly.

In his EEO claim, according to Complainant, he alleged discrimination when he was denied assignments in line with his experience, ability, and professional background, the DCM knew that allegations against him by Subordinate 1, her spouse and two others were false and failed to take appropriate action, and management held him accountable for the false accusations and denied him support.

By letters to the Agency dated February 1, 2016 and May 10, 2016, Complainant alleged that the Agency misled him into entering into the settlement agreement and breached it. Specifically, he alleged that when he signed the settlement agreement, the Agency knew Subordinate 1’s EEO complaint had been investigated with a finding of no wrongdoing on his part, that she would likely continue to litigate in federal court, and he could have used the EEO decision to exonerate himself. Complainant wrote that after the settlement agreement, Subordinate 1 continued to attack him in the press, with articles appearing in prominent news outlets such as Newsweek and the New York Post. He pointed to a proposed June 2013 Agency press release recounting that the Diplomatic Security Service investigated the allegations and found no violations of U.S. or Italian law, and contended that had the press release been issued this would have rebutted the articles or they would not have been published. He argues that the Agency allowed employees and family members to utilize the EEO process to raise false allegations against him despite the Agency’s conclusion that they were baseless, and in failing to clear his name breached the settlement agreement and made it ineffective and unenforceable.

The Agency found that it complied with the settlement agreement. Regarding term 9.d, the Agency found that Complainant’s submittal of proposed changes to his 2012 EER was a condition precedent to the former DCM reviewing them and considering making changes, and Complainant admitted he did not submit proposed changes because he was too disheartened and depressed. On appeal, Complainant, who is represented by counsel, confirms this, but adds another reason was that he lacked the necessary facts, particularly the EEO decision on Subordinate 1’s complaint.

Regarding term 9.g, the Agency recounted that Complainant stated it was breached because (1) the Agency simply wrote a one page memorandum simply listing the allegations against him and stating they were found to be unsubstantiated rather than discussing things in context to show how his accusers seized on scandal to defame him and hinder his career, (2) the memorandum was only based on facts until October 2013, failing to fulfill its purpose of summarizing the Diplomatic Security investigation,3 and (3) the Agency, in response to his inquiries, could not give him a clear answer on whether he could share the memorandum with family, colleagues, friends, and his Italian attorney, preventing him from doing so. On appeal, Complainant confirms that he raised reasons (1) and (3). He argues that not being able to share the memorandum makes it useless and his reason for entering into settlement negotiations was to restore his reputation.

In determining that it complied with term 9.g, the Agency found that it met its obligation to provide a summary of the investigation, and that there is no evidence the parties agreed to any specific format in or upon the use of the memorandum.

In determining that it did not negotiate the settlement agreement in bad faith, the Agency found that Complainant cited no authority for the proposition that it was obligated to divulge the outcome of Subordinate 1’s EEO case, and there was no evidence it negotiated in bad faith.

On appeal, Complainant adds that he would not have bargained for a memorandum summarizing the results of the Bureau of Diplomatic Security’s investigation had he known he could not use it, this is common sense, and the Agency’s failure to authorize its use is a breach of the settlement agreement. Complainant argues that the Agency breached the settlement agreement by failing to live up to the spirit of the document. He argues that the Agency’s failure, upon his request, to allow the issuance of the proposed press release in the Agency’s name violates the settlement agreement.

In opposition to the appeal, the Agency argues that disclosing Subordinate 1’s employment discrimination investigation would violate privacy right protected information, and it did not negotiate the settlement agreement in bad faith.

Decision

In June 2013, after the New York Post reported highly charged accusations by Subordinate 1 about the way Complainant treated a staffer, an Agency email string on which Complainant was copied showed the staffer wanted to say something rebutting what was reported, but the former DCM opined it would be much better if the staffer did not say anything now – this could blow over quickly. Further, Complainant strongly suggests that he was aware the Bureau of Diplomatic Security investigation was favorable and he certainly knew the Agency had done nothing to publically clear his name. While Complainant wanted the Agency to publically clear his name, he agreed to a settlement agreement that did not have a term explicitly doing this. Instead, the Agency agreed to issue to a summary of the Bureau of Diplomatic Security to Complainant – not the public.

Complainant’s contention that the Agency bargained for the settlement agreement in bad faith is not persuasive. First, as argued by the Agency, it had reason to believe the administrative decision on Subordinate 1’s complaint was protected by the Privacy Act, since administrative EEO records are generally within the scope of the Act. Further, Complainant has not shown he did not already have sufficient information to make a fair bargain when negotiating the settlement agreement.

The FAD is AFFIRMED.

Read the full case here via eeoc.gov.

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23 Days to Inauguration: Kerry Delivers Middle East Peace Speech, Netanyahu Looks to Trump

Posted: 5:13 pm PT
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