Alan Grayson & Collateral Damage

Some of my readers (all two of them) have commented that they’ve missed my articles. I have been involved in a rather lengthy and involved court case. That case also involves Alan Grayson. He sued my client claiming the client was merely “collateral damage” to his congressional campaign. Well, we won. And 550+ people still have jobs because we did win. There’ll be more soon. In the meantime, here’s one article in the Am Law Litigation Journal:

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Rare Jury Verdict in Virginia Qui Tam Case Clears Defense Contractor

By Ben Hallman

October 30, 2009

When U.S. Representative Alan Grayson launched his successful run to represent Orlando in Congress last year, he touted his role as a plaintiffs lawyer in negotiating an $8.9 million settlement agreement in a whistle-blower suit against a government contractor. We’re not political consultants, but we’re going to guess that Rep. Grayson won’t be campaigning again on this one. The settlement fell apart, and last Wednesday, after a six-day trial, a federal jury found the contractor, IIF Data Solutions, not guilty of fraud.

IIF is a Virginia-based defense contractor that provides information technology and other services, primarily to the U.S. National Guard. In 2006, Thomas Ubl, a former IIF employee, sued the company under the False Claims Act in Alexandria, Va., federal district court for allegedly lying to get on a list of approved government contractors. According to two IFF defense lawyers, Christopher Kachouroff of Dominion Law Group in Virginia, and Robert Cynkar of Cuneo Gilbert & LaDuca in Washington, D.C., IIF had hired an outside consultant to help it with its application to get on the GSA “schedule.” (Once on the schedule, contractors are eligible to bid on government contracts.) Cynkar and Kachouroff told us that Ubl, while an employee at IIF, had helped work on the application, which became the basis for the lawsuit.

Here’s where the story almost ends. The U.S. government declined to join the suit, and in May 2008, on the day before trial, the defense team reached a settlement agreement with plaintiffs’ lawyers Victor Kubli and Alan Grayson. Grayson boasted of the deal on his campaign Web site: “The Bush administration refused to prosecute, and then it refused to allow any government officials to appear as witnesses at trial. Grayson persevered nevertheless, marshalling other witnesses, experts, and documents. The lawsuit reached its exciting conclusion in a settlement agreement that Grayson negotiated in the courthouse, inside the judge’s chambers, on the day that the trial was scheduled to begin.” Click here (third item) for Grayson’s campaign-friendly description of the settlement.

The negotiations may have been exciting, but the lawsuit wasn’t concluded. The agreement provided that it was “void without government approval,” and the government objected to several aspects of the deal, including the percentage of the award Ubl and his attorneys claimed they were entitled to receive, and withheld consent. Kachouroff and Gilbert took over the case. McKenna Long & Aldridge, which had been lead counsel, took a smaller role. Kachouroff said that Charles Patten, founder of the company and a former National Guardsman, told him that he wanted to fight it out in court, that he felt he had done nothing wrong.

At trial, the defense argued that under the FCA, fraud occurs when a party is paid for its services, and that IIF had received nothing but rave reviews from clients. A key witness, the defense lawyers said, was a senior National Guard official who testified on IIF’s behalf. “You know a fraud case is frivolous when the supposed victim of the fraud not only does not cancel any of the company’s contracts, but continues to seek their services,” Kachouroff said.

The plaintiff sought $140 million in damages, which would have been trebled under the False Claims Act. We left a message with his office last Friday morning, and will update this post if it is returned. We also left a message for Kubli at his office in Germantown, Maryland