The United States Fifth Circuit Court of Appeals has dismissed KBR’s interlocutory appeal in McManaway, et al, v KBR, Inc.,et al as premature until a determination of controlling law has been made. In the appeal, KBR contended the case should be dismissed as barred under the political question doctrine and preempted by the combatant-activities exception to the Federal Tort Claims Act (FTCA). The appeal was dismissed without prejudice. Click here to read the decision.
McManaway, et al, v KBR, Inc.,et al involves dozens of Indiana, West Virginia, South Carolina, and British veterans. The plaintiffs have sued the Houston-based military contractor over health problems they blame on exposure to hexavalent chromium dust, a carcinogenic orange-yellow powder used to fight corrosion in water pipes. The troops were guarding KBR workers as they tried to restore water treatment facilities at the Qarmat Ali water treatment site.
United States District Judge Vanessa Gilmore is presiding over the case in the Southern District of Texas. Judge Gilmore denied the immunity defense last year. After denying KBR’s immunity motions, the court permitted the immunity defense decision to go on interlocutory appeal to the Fifth Circuit in September 2012. In November 2012, a decision was made by a jury in Oregon in Bixby, et al, v KBR, Inc., et al, a case involving the same circumstances as McManaway, et al, v KBR, Inc.,et al, determining KBR was negligent and awarded the veterans $85 million. The court later affirmed the jury decision in the amount of $81 million.
At this time, Judge Gilmore will decide on when and how to proceed to trial for the Texas cases. It is anticipated that KBR will ask for reconsideration by the Court of Appeals.
Oral argument is underway in Sergeant Mark McManaway et al. v. KBR Inc., et al before the United States Fifth Circuit Court of Appeals. The court will consider KBR’s bid for blanket immunity for acts of misconduct committed during their work in Iraq and that resulted in a toxic contamination to hundreds of United States and British soldiers. Just two weeks before trial was set to begin in federal court in Houston, U.S. District Judge Vanessa Gilmore denied KBR’s immunity motions and the issue was appealed. Since then, a bellwether group of twelve soldier’s claims went to trial in federal court in Oregon, and resulted in a judgment of $81 million against KBR. Bloomberg News profiled the case in an article this morning, and identified the issues to be addressed by the Fifth Circuit panel. A recording of the oral argument is expected to be available later today or tomorrow [http://www.ca5.uscourts.gov/OralArgumentRecordings.aspx].
One of several motions heard by Judge Papak last month in Oregon Federal Court involved yet another attempt to lash out at the attorneys who proudly represent the veterans of Qarmat Ali. A jury awarded a bellwether group of twelve of the 162 veterans a total $85.2 million in November for KBR’s misconduct in exposing the veterans to sodium dichromate. With an award of nearly $7.1 million for each veteran, KBR’s own potential financial exposure to the remaining Veterans exceeds $1 billion if the remaining verdicts remain consistent with the bellwether trial verdict. Click here to read a synopsis of that trial and verdict.
Having lost the trial in front of an Oregon jury, KBR and its counsel have continued to try and shift blame for misconduct everywhere but towards their own actions. The topic at the center of the latest legal wrangling brought on by KBR’s attorneys concerns the limited ‘gag order’, generally restricting the parties’ rights to comment to the verdict. The order was effective throughout the trial, partially lifted after the verdict, and then fully lifted on December 19, 2012.
KBR complained about a post-trial email communication featuring plaintiffs’ attorney Mike Doyle. The email contained an embedded video narrated by Doyle and referenced the jury verdict. KBR argued the video violated the limited ‘gag order’. The email was distributed by Trial Guides, a commercial publisher of various legal guides and commentaries, and a link to the video can be found here.
Judge Papak rejected KBR’s latest attacks, confirming that the “statements were clearly not in violation of the previously imposed restrictive order”, and the communication “disclosed no information material to the parties’ dispute not already in the public record.”
A former Veterans Affairs researcher testified before the House Committee on Veterans Affairs this week about the organization’s efforts to minimize research that supports claims of Gulf War Illness and illness from burn pit exposure.
Steven Coughlin was an epidemiologist in the VA’s public health department until he resigned over a request to retract his claims concerning the concealed information and admit he had made a mistake. Coughlin also said “if the studies produce results that do not support the office of public health’s unwritten policy, they do not release them. “ He also testified about a panel of outside experts hired to study neurological connections to Gulf War illness for the Institute of Medicine. Coughlin maintains the panel was stacked in favor of those who believe Gulf War illness is psychological rather than neurological. Coughlin added “anything that supports the position that Gulf War illness is a neurological condition is unlikely to ever be published.”
Coughlin’s allegations were countered by Victoria Davey, chief officer of VA’s office of public health and environmental hazards. Davey never directly addressed the accusations levied against the VA but talked about the “cutting-edge” research the VA has conducted.
Coughlin was backed by Lea Steele, a researcher at the Veterans Health Research Program at Baylor University who said the VA has not managed an effective program. Steele echoed Coughlin when she said “studies consistently show Gulf War illness is not due to war trauma.”
Steele referenced the panel Coughlin viewed as stacked in favor of Gulf War illness as a psychological illness. The panel studied veterans from the past 20 years rather than a segment of Gulf War veterans. The symptoms of this broad group were lumped together so that neither cause nor treatment for “chronic multisymptom illness” could be found. Steele likened this to “medical malpractice”.
A Gulf War veteran and appointed member of the Congressionally Directed Gulf War Illness Research Medical Program,
The presiding judge in the Oregon litigation pitting veterans of the Oregon National Guard against military contractor, KBR, heard motions this week concerning the company’s attempts to overturn the jury verdict and obtain a new trial.
KBR’s request for the verdict to be overturned is another disregard of this country’s legal system. The jury pool became the voice of the community when they issued their verdict. A group comprised of responsible citizens of Oregon decided that KBR’s behavior was reprehensible and that there was evidence of wanton misconduct, establishing the veterans right to recover punitive damages. KBR’s wanton misconduct included falsely telling a commander that his soldiers had no reason to be concerned about the presence of sodium dichromate and referred to it as a mild irritant.
KBR also requested that the jury verdict amount be decreased claiming insufficient evidence of damages. The tone of the argument was aimed at labeling the veterans as a complainers who should be able to withstand the fear of their current and future illness by virtue of being soldiers who had signed up to protect and serve their country in Iraq… Sodium dichromate causes a variety of skin, digestive, and respiratory illnesses, among others, and genetic transformation from which the body may or may not heal itself once exposed. Essentially the soldiers are left not knowing whether they may develop serious illness in the future, including cancer.
The company also brought up the issue of personal jurisdiction, arguing that Oregon is not the appropriate venue for the case. All plaintiffs were members of the Oregon National Guard and were residents of Oregon at all relevant times. The record is replete with evidence that KBR directed intentional acts on Oregon residents, including intentional misstatements about sodium dichromate that were given to a commanding officer who then passed that information on to soldiers serving under him. Once the intentional act has been proven, all the Oregon
KBR reported a net income of $30 million for the fourth-quarter of 2012. Chief Executive Officer Bill Utt called it “a disappointing year” but later stated 2013 would bring “a robust series of new opportunities across each of our business units.”
For the same period a year earlier, KBR reported profits of $90 million. Utt accredited the sharp decline in profits to difficulties in the company’s minerals and US construction businesses. The sector of the company that did perform well was the hydrocarbons arm. Its profits increased 76 percent from the same period a year earlier resulting in a $174 million net income.
Interestingly, the released statement made no mention of the current litigation against KBR. In November, a jury awarded $85 million to twelve Oregon Army National Guard soldiers for negligence due to the contamination of a water treatment plant in Iraq. KBR, in turn, sued the US government to honor a secret indemnity agreement signed by the secretary of the Army in 2001. The agreement purports to shield KBR from financial costs associated with unusually hazardous risks including “sudden or non-sudden release of hydrocarbons or other toxic or hazardous substances or contaminants into the environment.”
They also did not mention the lawsuit filed by the United States in November. In that civil complaint, the government accuses KBR of inflating claims for the delivery and installation of trailers to house troops in Iraq.
The jury verdict for the twelve plaintiffs in Oregon is significant for the role it will play in the future trials for the more than 150 soldiers awaiting their day in court. The financial impact for KBR potentially could be more than $1.1 billion if the current individual case value trend of $7 million continues. The case is currently being reviewed by the Department of Justice and the Department of Defense. We will continue to blog updates as they develop.
Through the Freedom of Information Act, The Huffington Post reported today that it has acquired the signed indemnity agreement between the United States Army and KBR (at the time known as Kellogg, Brown, and Root).
The Army official that signed the agreement at the insistence of the Houston-based private contractor was a former Enron executive. Thomas E. White was named secretary of the Army in 2001. He signed the agreement on March 19, 2003 after considering “the availability, costs and terms of private insurance to cover these risks, as well as the viability of self-insurance, and have concluded that adequate insurance to cover the unusually hazardous risks is not reasonably available.” His memo concluded that the use of the “indemnification clause in this contract will facilitate the national defense.” There is no indication that KBR disclosed at the time of the contract-add any information or knowledge KBR had about the longstanding, widespread use of hexavalent chromium at Qarmat Ali, or any other specific hazard to the troops and other men on the ground at KBR’s work sites.
White resigned his position as secretary on April 23, 2003 amid questions about his ties to Enron Corp. He sold millions of dollars in stock in 2001 and claimed it was a requirement under government ethics rules. White and his wife were also investigated by the Pentagon’s inspector general for using a military jet for personal travel.
The language of the no-bid, cost-plus with award fee contract relates to the bellwether trial against KBR in Oregon where 12 veterans were awarded more than $85 million in damages stemming from KBR’s knowing exposure of the men to hexavalent chromium at Qarmat Ali. The additional “bailout” agreement, which was demanded by KBR after initially grabbing the multi-billion dollar no-bid, cost-plus award fee contract for Iraqi oilfield reconstruction, purports to shield the company from various liabilities, including financial costs associated with unusually hazardous risks including
The Huffington Post published an article concerning the indemnity agreement between KBR and the government. KBR has sued the government for indemnity arising out of the $85 million verdict in favor of 12 soldiers exposed to sodium dichromate in Iraq while protecting KBR engineers repairing a water treatment facility.
The Huffington Post’s front page headline of “We Poison, You Pay” is a concise summary of KBR’s apparent legal position. And while KBR presses the government for indemnity, they seem to be unwilling to disclose the full terms of their indemnity sweetheart deal to the public. Beyond seeking indemnification for their liability to our soldiers, KBR is also demanding that the government pay their legal fees,which so far total more than $15 million.
The verdict involved a bellwether group of the first 12 of 162 soldiers we are proud to represent. With an average case award of over $7 million, KBR faces an exposure of over $1 billion for their misconduct in Iraq. Unfortunately, despite the verdict, and the public outcry as evidenced by the thousands of comments made in response to the Huffington Post article, KBR’s behavior seems to continue to worsen.
Click here to read the article in its entirety.
Our website dedicated to litigation against KBR is now restored. You can click here to visit KBRLitigation.com and get caught up on what has happened since the trial ended. Background information about the case and videos are also available.
We stand with our clients in the pursuit of justice against a company dedicated solely to their own profit margin.
In more legal maneuvering, KBR reacted to fraud and negligence claims concerning Qarmat Ali water treatment plant by filing a motion for summary judgment. The Honorable Paul Papak denied the motion.
KBR professed innocence concerning the fraud allegation by claiming it did not make misrepresentations and did not deceive the Oregon Guardsmen. KBR claimed they did not know sodium dichromate was in the soil at the site until July 2003. The Court found this false. The Court stated “[T]he record provides evidence from which a jury could conclude that KBR intentionally attempted to downplay when it became aware of the presence of sodium dichromate and also when it learned of the potential contamination and hazards associated with the contamination.”
As to negligence, KBR claimed that it owed no duty to inform the men of the risk of sodium dichromate poisoning. The Court found KBR did have a duty to protect members of the US Army and to uphold OSHA standards. The ruling stated “KBR failed to meet the standard of care set forth” thus causing the soldiers damages. The ruling brings the
Veterans claims closer to trial, which is set to begin in Portland, Oregon on October 9, 2012.