Halliburton Subsidiary KBR Suing Veterans for Legal Bills from Case KBR Lost
July 29, 2015
Walter Einenkel / Daily Kos
After developing health problems consistent with hexavalent chromium exposure, 12 National Guard vets sued KBR (Kellogg, Brown & Root, a former subsidiary of Halliburton) for negligence in Federal Court in Portland. In 2012, after a month-long trial, the jury awarded the veterans $85 million. KBR appealed, and sought $30 million in legal fees and damages from the suffering veterans for initiating the lawsuit in the first place. So how come KBR can sue these veterans for legal fees, you might ask?
(July 27, 2015) -- KBR, formerly known as Kellogg, Brown & Root, formerly a subsidiary of Halliburton, has decided to sue 12 National Guard veterans for $850,000 in lost legal fees.
After developing health problems consistent with hexavalent chromium exposure, the veterans sued KBR for negligence in Federal Court in Portland. After a month long trial, the jury awarded the veterans $85 Million in 2012. KBR appealed, and sought $30 Million in legal fees and damages from the veterans for initiating the lawsuit.
The soldiers, residents of Oregon and under orders from the Department of Defense, placed on loan to a private entity contracted by the DoD, sued in their home state in federal court, not state court. They argued that a chemical used at the Qarmat Ali treatment facility had, to the knowledge of KBR, contaminated the site. Remaining at the site without being informed of the presence of the cancer agent by DoD or KBR constituted negligence. The Oregon jury agreed.
The case was the result of events from 2003 when KBR was officially a subsidiary of Halliburton. However, it wasn't until earlier this year when the Supreme Court said it was okay for veterans to sue the Houston-based company. So how come KBR can sue these veterans for legal fees, you might ask?
Oregon veterans and victims of toxic burn pit exposure linked to contractor Halliburton were devastated when the 9th Circuit overturned a landmark $85 million verdict. Soldiers contend they were knowingly exposed, but the allegations have obviously been denied.
[. . .]
Halliburton's subsidiary Kellogg, Brown and Root (KBR) allegedly exposed soldiers to toxic burn pit smoke at Qarmat Ali. The 9th Circuit held that Oregon veterans were unable to hold KBR accountable in their home state. Instead, counsel for the veterans now plans to sue KBR in Houston.
So, it was overturned but not because KBR isn't still entirely responsible for making these soldiers ill because of their greed and/or incompetence. If you read the site you aren't surprised that anything with even the lightest hint of Halliburton stench on it is rotten to the core. Unfortunately, this tactic of trying to crush people financially with mountains of litigation can frequently work.
Oregon's representative delegation sans the one Republican have sent a letter to Defense Secretary Ashton Carter urging him to take over the litigation and settle with the 12 Oregon veterans. The letter outlines the biggest problem in all of this: the KBR contract with the Department of Defense immunizes the private contractor from any litigation.
An excerpt from the Oregon delegation:
in November 2012 Portland jury sided with these veterans, finding KBR negligent and warding and $85 million verdict to 12 of the soldiers. Earlier this year, However, an appeals court threw out that decision on jurisdictional grounds. The case will begin anew in Texas but, in the meantime, KBR is seeking nearly $850,000 in legal fees from the sick Oregonians.
If the company wins, these veterans will face a crushing penalty that could force them into bankruptcy and KBR could use the judgment as leverage to intimidate these veterans and other soldiers into dropping claims against the company.
As part of the original contract between the government and KBR, DOD agreed to assume all financial liability for KBR misconduct including unlimited reimbursement of KBR's legal expenses. That contract also included a provision allowing DOD to take control of the litigation process, if necessary. DOD has declined to exercise that authority in the past.
These veterans deserve better and we have to also try to be clear that we are neither picking sides nor trying to influence a legal dispute. Rather, we are concerned about the possibility of the DOD -- and ultimately the American taxpayer -- footing the bill for the seemingly endless and expensive litigation. In the light of recent developments, and the potential for taxpayer dollars to enable the bankrupting of war veterans, we urge you to take control of this litigation and reach an equitable settlement.
Money is going to be spent on the part of this contractor who has already made several dozens of billions of dollars on the war in Iraq. They already have enough money to tie up sick veterans in litigation for years but they won't have to worry about using any of their money to do it. Just all of our money.
Say what you will about the Obama administration, they have tried over the past few years to promote fixed contracts and companies like KBR have been bristling at the thought of having to actually run a private contracting business without having the deck stacked in their favor.
Fixed-price contracts and task orders are generally viewed as less risky and less expensive than cost-reimbursable work when the work to be done is well understood and limited in scope. The Obama administration made it a reform priority in 2009 to use more firm, fixed-price contracts and fewer cost-reimbursable contracts.
Army contracting officer Robert Egan gave contractor KBR Inc. a rare ultimatum: Provide a firm, fixed price on remaining work to close out the largest government services contract in U.S. history. Or else, he added, he was finished talking.
"Until I see that FFP deliverable, I cannot enter further communication exchanges with your contracts team," Egan told the company in a February 26 email.
[. . .]
KBR reacted swiftly to Egan's email demanding a fixed-price closeout: "KBR is unwilling to accept such a proposal," KBR senior contracts manager Mary Wade said in a letter.
"LOGCAP III close-out activity does not lend itself to a firm fixed-price arrangement," Wade wrote.
"Currently, there is no way to accurately define the scope or duration of work. There is no detailed statement of work because no one knows what is going to be done, when it will be done and how long it will take to complete.
"We see no need to change it," she concluded.
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