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Recent Cases from the Public Interest Division

These are among cases handled in recent months by the Office of the Attorney General’s Public Interest Division:

BANK OF AMERICA, N.A., V. DISTRICT OF COLUMBIA, 10-CV-78

The D.C. Court of Appeals paved the way for the District to pursue at trial in Superior Court its $117 million treble damage False Claims Act suit against the Bank of America arising out of the embezzlement scheme perpetrated by former Office of Tax and Revenue employee Harriette Walters and her co-conspirators. On November 27, 2013, the court agreed with the District‘s arguments that D.C.’s claims against the bank were not subject to arbitration and were properly filed in D.C. Superior Court, which will retain jurisdiction under the District’s False Claims Act, and conduct the trial. The lawsuit arose out from a conspiracy led by Ms. Walters, who created fraudulent tax return checks that her co-conspirators cashed at the Bank of America, using a District account. In 2008, the District filed an eight-count complaint against the bank, including claims of negligence, fraud, breach of common law fiduciary duty, and violations of the District’s False Claims Act. The appeal was handled by Senior Assistant Attorney General Stacy Anderson. Members of the trial team are Assistant Attorneys General Jane Drummey and Thomas Koger.

ERIC W. PAYNE  V. DISTRICT OF COLUMBIA ET. AL., 1:10-CV-00679 RWR/DAR

Chief U.S. District Judge Richard Roberts ruled on December 3, 2013 that the District had legitimate grounds for dismissing Eric Payne from his position as Director of Procurement for the Chief Financial Officer.  Granting judgment to the District on the majority of Payne’s claims in a lawsuit against the District and then-Chief Financial Officer Dr. Natwar Gandhi, the judge also found that Payne could not show that his termination violated any law or that comments made in the press about his termination sufficed for “constitutional defamation.” The case was handled by Assistant Attorneys General Sarah Knapp and Keith Parsons.

BARNES V. DISTRICT OF COLUMBIA, 06-315

A federal judge gave preliminary approval to a settlement of claims filed in 2006 by former D.C. Jail inmates involving alleged unconstitutional detention past the date and time of their scheduled release and impermissible strip searches when they returned to the jail from court hearings. Senior United States District Judge Royce C. Lamberth, who already had ruled that the District largely resolved the problems by February 2008, said on November 8, 2013, that a settlement providing a maximum total of $2.9 million to former inmates was “fair, reasonable, and adequate.” Other expenses in the long-running case of Barnes v. D.C. could bring the total potential settlement to $6.2 million. Division attorneys handling the case are Keith Parsons and Andrew Saindon.

HARDY V. D.C., ET AL., 09-1062

A favorable settlement was reached in a class action lawsuit brought on behalf of individuals arrested in the District from 2006 to 2012 seeking recovery of cash taken from them by the Metropolitan Police Department at the time of their arrest and forfeited under the District’s civil asset forfeiture law.  Plaintiffs alleged, under the Fifth Amendment due process clause, that the District provided constitutionally deficient notice of the forfeitures by sending notices to incarcerated individuals at their home address when they were in the District’s custody in the D.C. Jail and failing to follow up to notices returned undelivered by the U.S. Postal Service (the “Failed Notice” class).  If the District were to be found liable, the damages likely would have exceeded $4 million plus attorneys’ fees. In December, 2013, U.S. District Judge Robert Wilkins granted preliminary approval of a total settlement of $855,000 (including class administration and attorneys’ fees), and the parties expect the settlement to obtain final approval this spring.  The case was handled by Assistant Attorney General Douglas Rosenbloom.