The National Law Journal: Judge Orders KBR to Disclose Docs to Whistleblower
By Nate Beck
A defense contractor on Thursday moved to seal a Washington’s judge’s court ruling that compels the company to disclose contested documents in a whistleblower’s suit alleging a kickback scheme.
The contractor, KBR Inc., urged U.S. District Judge James Gwin to seal his ruling Wednesday rejecting the company’s challenges to keep the files confidential in the litigation.
“The court’s order quotes at length from, and purports to summarize documents that KBR maintains are attorney-client privileged and work-product protected,” KBR’s lawyers at Vinson & Elkins wrote in their motion to seal.
Gwin on Thursday afternoon reissued his ruling “with certain portions sealed.” The new, redacted version removes a footnote that quoted a KBR investigator’s findings about the performance of a subcontractor.
Gwin granted a seven-day stay of enforcement of his order to allow KBR to file an emergency appeal in the U.S. Court of Appeals for the D.C. Circuit.
“KBR’s case was a sinking ship before Gwin’s ruling, and this is the torpedo,” Michael Kohn, an attorney for the plaintiff, Harry Barko, told The NLJ on Thursday.
Kohn said KBR’s code of business conduct (COBC) documents will prove KBR, with subcontractor Daoud & Partners Inc., double-billed for laundry services in Iraq, failed to build adequate “man camps” for workers and further violated its contract—bilking millions of dollars from the federal government.
“KBR’s COBC documents are filled with evidence that certain KBR employees steered contracts to Daoud; are filled with evidence that Daoud gave lousy and late contract performance; and are filled with evidence that KBR nevertheless overpaid Daoud with United States funds,” Gwin wrote on Wednesday. “Counsel’s duty of candor requires better.”
KBR attorneys from Vinson & Elkins did not immediately comment on the judge’s ruling.
In June, D.C. Circuit Judges Thomas Griffith, Brett Kavanaugh and Sri Srinivasan overturned a prior ruling from Gwin that required KBR to disclose the business conduct files. The appeals court found parts of the business conduct documents were protected under attorney-client privilege.
Gwin on Wednesday concluded that the business code documents qualify for discovery because they were prepared to assist KBR’s in-house attorneys in drafting a legal strategy.
“Documents that provide background information meant to assist a lawyer in eventually reaching a conclusion are fact, not opinion, work product,” Gwin wrote.
The judge found that witness statements inside the business conduct documents are protected from disclosure.
Kohn said KBR will need to successfully argue to an appeals court that COBC documents should be shielded under both work-product and attorney-client privilege, to prevent those files from being released.
“KBR has three options,” Kohn said. “They can go back to the appeals court and pray, turn over the documents and lose the case, or not turn over the documents and lose the case.”
