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The Lawrence Livermore National Laboratory is burning through millions of taxpayer dollars to defend itself against lawsuits. Last year, taxpayers paid $4.6 million to help the lab fight one sex discrimination class action. That case and several that are pending cost at least $5.5 million in fiscal 2002, according to preliminary figures supplied by the federal government. That’s double what the lab spent on all its legal bills in 2001 and eclipses the lab’s annual spending for the past three years. And the figure could grow higher: The Department of Energy, which oversees the lab, has said that a computer error omitted several cases from its initial legal expense tally. The litigation totals from 2002 could increase once those cases are factored in, officials say. (The lab itself has been unable to provide exact figures — or an exact list of its cases.) With the discrimination class action Singleton v. Regents of the University of California and the whistleblower retaliation suit Doggett v. Regents headed for trial this year, 2003 legal expenses could be even larger than last year, plaintiffs’ lawyers say — a prediction the DOE disputes. The issue of the lab’s legal expenses has been the subject of congressional attention. Rep. Edward Markey, D-Mass., last year called for the U.S. General Accounting Office to probe litigation costs by DOE contractors such as the University of California. Markey, a senior member of the House Committee on Energy and Commerce, called the lab’s litigation conduct “unacceptable.” The revelations about legal expenses, which were made in response to several months of Freedom of Information Act requests by The Recorder, come as the national laboratories are pulled into even greater roles in the nation’s homeland security effort. And the University of California — which runs the Livermore lab, Los Alamos National Laboratory, and the Lawrence Berkeley National Laboratory under a Department of Energy contract — is under intense criticism these days for how it manages the labs. By far the most expensive case so far is Singleton, in which 3,200 current and former female workers allege that they were paid less and passed over for promotions. The lab spent $4.6 million on the suit last year, $2.6 million of it to pay outside counsel Morrison & Foerster. In 2001 the lab spent $1.5 million on the case. To date, the lab has spent $7.5 million on Singleton, and plaintiffs say that figure will grow as both sides gear up for trial, which is scheduled to begin in September. The federal official who monitors the lab’s legal expenses downplayed the costs, and said Singleton is a rare, expensive lawsuit that the lab is trying to settle. “We are not happy that it is costing us so much to litigate the case,” said Richard Vergas, an assistant chief counsel at the National Nuclear Security Administration’s service center in Oakland. The NNSA is an agency within the Department of Energy and oversees the lab. “Because we are getting into heavy discovery, we knew that the cost would go up.” Vergas said the lab has been working with the plaintiffs in mediation. Class actions are unusual and require tremendous resources, he said. “Most of that money goes for experts and databases. You have to gulp and approve [the expenses] because it’s that kind of case.” This year the class action shouldn’t cost as much because the expensive phase is over, Vergas said. But, he added, anything is possible. Singleton has gone through several bitter rounds in the courtroom. The plaintiffs have kept the suit alive for five years and persuaded Alameda County, Calif., Superior Court Judge Ronald Sabraw to certify the class. The lab, however, has prevailed on Sabraw to trim the pool of plaintiffs, which was once estimated to be 10,000 women. The $5.5 million figure for 2002 legal expenses covers attorney fees, travel, experts, databases and other costs associated with litigation. The cost of in-house attorneys is not included. The Singleton case aside, Vergas points out that, like most large employers, Lawrence Livermore National Laboratory is constantly defending itself against employee lawsuits. And there is no blank check, he argued. For the past 10 years, the DOE has made more effort to review attorney fees and other litigation costs closely. As a result of those efforts, a new federal regulation officially adopted in 2001 — known internally as 10 C.F.R. Part 719 — requires the agency to scrutinize legal bills from contractors such as UC. “The [monetary] abuses at the labs from 10 and 15 years ago don’t happen,” Vergas said. When the lab incurs legal expenses, the DOE reimburses it after a careful review. The complex system is not reimbursement in the traditional sense — the agency pays bills as they come in. But legal bills and the money to run the lab are paid out of one pot of “allowable costs.” Major expenses force the lab to trim spending in other areas such as defense research. Through a lab spokesman, Janet Tulk, chief in-house lawyer at the national laboratory, declined to comment for this story, saying the DOE makes the final decision on what is spent. But several government officials and attorneys said Tulk makes major litigation decisions for the lab. Vergas said that while the DOE carefully scrutinizes every legal expense, ultimately the lab’s in-house attorneys decide whether to fight or settle a suit. “We don’t take an active part litigating the case,” he said. MORE SPENDING AHEAD Although the class action was the largest expense to date, the lab stands to spend $2 million more on Kotla v. Regents, a case where the lab’s position has drawn sharp criticism from Rep. Markey. In that case, computer technologist Dee Kotla alleged that she was fired after she gave testimony bolstering a co-worker’s sexual harassment allegation. The lab, on the other hand, contends that she was using lab equipment to run a business. The plaintiff, though, said she only made $4.30 worth of personal phone calls and reformatted a computer disk. The lab has spent just under $1 million to litigate the case so far. That doesn’t include the $745,000 jury verdict in Kotla’s favor and Alameda County Superior Court Judge Yolanda Northridge’s order that the lab pay the plaintiff’s $1 million legal bill. Vergas said the lab chose to appeal because the additional cost wasn’t much higher than what it has already spent. J. Gary Gwilliam, Kotla’s Oakland, Calif.-based lawyer, said that whether the lab wins or loses the appeal, the lab’s legal bill will grow. If the lab loses, it will have to pay its own lawyers’ fees plus the jury award and Gwilliam’s fees. If it wins, the lab will be granted a new trial, he said, which means spending money to litigate the case all over again. Vergas has a slightly different take on the matter. If the lab wins the appeal and gets a new trial, there would be pressure for the plaintiff to settle since a new trial would cost more and there would be no guarantee that she would win, Vergas said. While the Department of Energy downplayed the surge in litigation costs, Markey and other critics were aghast. The lawsuits siphon money that should be going to lab anti-terror programs, Markey said. “This is an unacceptable practice,” the congressman said in a written statement. “First the lab fires the whistle-blowers,” Markey wrote. “Then it fights them in court to the tune of millions of dollars worth of legal fees. Finally, it turns around and bills DOE, which passes the bill along to the taxpayers, who were under the mistaken impression that the labs were spending their money protecting the homeland instead of arguing in court.” The stack of retaliation lawsuits filed by lab workers points to entrenched problems, plaintiffs’ attorneys say. “Public employees who have the bravery to come forward should be treated fairly,” said Gwilliam. The Gwilliam, Ivary, Chiosso, Cavalli & Brewer name partner’s firm has litigated several lab whistleblower suits, including one filed by a nuclear engineer who said he was ousted after he raised plutonium safety issues. In 2001, the engineer’s attorneys negotiated a $250,000 settlement. “It is very unusual to see this type of money spent by a public entity,” Gwilliam said. The lab “just wants to continue to say it’s right.” Vergas said that the whistleblower suits are a red herring. “I think that whistleblower suits have become the new type of thing,” Vergas said. “This is a way to get your name into the paper.” He added, “We can’t say this is a pattern and practice,” because the lab would have to lose several such suits for a pattern to be indicated. On March 12 the UC’s point person on national lab problems, Senior Vice President Bruce Darling, testified before the House Committee on Energy and Commerce about mismanagement accusations at Los Alamos. There, a whistleblower scandal sparked a series of high-level resignations and calls for investigations into UC’s operation of all three labs, including Livermore. Markey and other lawmakers have used the Los Alamos investigations as a platform to call for greater scrutiny into UC management at Livermore and other labs. And, according to a February letter from the DOE to Markey, the National Nuclear Security Administration is investigating UC’s litigation costs. UNDERESTIMATING COSTS While lab lawyers appeal Kotla, federal officials acknowledge that their initial response to FOIA requests underestimated the lab’s legal costs. The DOE expects final figures to be released this week, according to Jack Hug, the DOE attorney who deals with Freedom of Information Act requests. The cost estimates provided by the DOE so far don’t include, for example, Ling v. Regents, an Alameda County, Calif., case filed by several Asian-American lab workers in December 2001 that seeks class action certification. According to Jonathan Siegel, the attorney who represents the named plaintiffs, an estimated 300 Asian-American scientists could be part of a class alleging they were paid less and unfairly passed over for promotions. The lab has maintained that its pay and promotion process isn’t biased, said Siegel, a partner with Siegel & LeWitter in Oakland. The $5.5 million figure also omits Zipoli v. Regents, a federal suit that claims the lab fired two guards in September 2001 after they expressed concerns over lab security. The lab claims that the men were fired for participating in a “sick-out.” Although an arbitration judge ordered the lab to rehire Mathew Zipoli and give him backpay, co-defendant Charles Quinones’ case is still pending in federal court, said Tom Carpenter, a lawyer with the Seattle office of the Government Accountability Project, one of the guard’s lawyers. However, DOE’s Hug said he doesn’t think “the order of magnitude will increase that much” in the new figures. While James Sturdevant, the lead plaintiffs’ counsel for Singleton, acknowledges that plaintiffs’ attorneys are interested in getting settlements for their clients, he and other critics say they’re also concerned about the larger issues at stake. “The jewel of homeland security has been discriminating against women and Asians for decades,” said Sturdevant, referring to his case and to Ling. “If I were the regents, I would say, ‘What the hell is going on here?’” None of the regents on a panel that deals with the national labs returned calls asking for comment. Related Charts: A Snapshot of Three Cases Where the Money Went

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