by Cam Simpson
Victory in the compensation case had been a vital prerequisite to filing the lawsuit, but it also took a toll. Even though Handley won the claims without a formal hearing, the insurance company’s delays meant that the case had dragged on for so long that there was little time left within which to prepare and file their lawsuit. The federal court filing in Los Angeles came within hours of the five-year anniversary of the massacre and, depending on how it was calculated, either just before or just after the statute of limitations expired. That had put extraordinary pressure on Fryszman and her small team in the weeks leading up to the deadline. In the end, it meant that the lawsuit’s accusations were powerful but its details slender.
Fryszman had largely crafted the suit, but in the end, it needed, and received, Hausfeld’s authorization. The main signature page listed his name first, followed by those of Fryszman, Handley, and McOwen. Giving Hausfeld’s name pride of place was critical to attracting attention in a case where publicity might make a difference, and to letting the defendants know they were in for a serious fight. Including Buddi Gurung in the lawsuit was a gamble. His path into the convoy that day was completely different from that of the other twelve. Yet, on balance, the potential downside seemed limited compared with the obvious benefits. His presence had a noticeable and profound effect in the compensation case, as he provided a direct, living connection to the mountain of circumstantial evidence regarding what had happened to the twelve dead men. It was possible, with the help of an investigator on the ground in Nepal, that they might find other former Iraq workers with closer links to the twelve, but as the clock on the filing deadline expired, Buddi Gurung was all they had.
Picking a jurisdiction in which to file a case like this was in some senses irrelevant, but one thing seemed certain: the relatively young federal statute on human trafficking was at the core of the lawsuit, and had never been tested like this, meaning that KBR would be likely to fight each and every significant battle up to a federal appeals court and perhaps to the U.S. Supreme Court. The court that would hear any appeal in California was likely to be the friendliest in the country for plaintiffs making international human rights claims, because some of the most progressive appellate judges in the nation sat on the bench of the U.S. Court of Appeals for the Ninth Circuit, based in San Francisco. Defense lawyers had a derisive name for the most blatant exercise of this strategy: forum or jurisdiction “shopping.” While, strictly speaking, it is not allowed, it is often worth a roll of the dice, hence the filing at the federal courthouse in Los Angeles.
KBR’s lawyers immediately pounced on the obvious opening, demanding that the case be moved to Houston. “This case has been filed in the Central District of California for no apparent reason other than Plaintiffs’ counsel’s desire to forum shop,” they told the judge in one of the first substantive filings of the case. “It has no link to the Central District of California or any other place in California. The operative facts occurred in Nepal, Jordan, Iraq, and perhaps Texas, but not anywhere within 1,500 miles of California . . . KBR is the only defendant that has been served. Its principal place of business is in Houston, Texas.” Not only would bringing the lawsuit from the Pacific Coast to the Gulf Coast give KBR home court advantage, but the federal district courts in Texas, and the U.S. appeals court above them, are widely viewed to be among the most conservative and business-friendly federal benches in the country. Every appellate court also has a Supreme Court justice assigned to oversee it. The justice above Texas’s Fifth Circuit was Antonin Scalia, one of the most probusiness, anti-international jurists in the modern history of the Supreme Court. In this regard, Texas and California were night and day for a case such as this one.
KBR’s arguments to move the case were both obvious and strong, but its lawyers didn’t take any chances. They heaped evidence into their motion and offered declarations about witnesses who might possibly have a connection to the twelve dead men in order to show that the case had absolutely no conceivable connection to California, but did to Texas. Perhaps no KBR Halliburton executive was more significant in this regard than a former manager stationed at the Al Asad Air Base named Robert Gerlach. He was “KBR’s Procurement Manager in 2004, and handled KBR’s subcontracts with Daoud & Partners,” the company’s lawyers wrote. That authority extended across Anbar Province. “Mr. Gerlach executed subcontract number GU84-VC-SB10005 with Daoud on behalf of Kellogg Brown & Root International, Inc. The subcontract with Daoud, as all other subcontracts with foreign entities, specifies it shall be construed and governed by the laws of the State of Texas.” The declaration regarding Gerlach closed with these words about the man who had played the most critical and direct role for KBR in overseeing the firm that had brought the twelve into Iraq, along with countless other workers like them: “Mr. Gerlach is no longer with KBR and his last known address is in Corpus Christi, Texas.”
The California federal judge assigned to the case, U.S. District Court judge R. Gary Klausner, a U.S. Army veteran and appointee of President George W. Bush, quickly agreed that it should be sent to Texas. By then, the partners at Cohen Milstein Hausfeld and Toll had voted their international human rights titan, Michael Hausfeld, out of the firm and its chairmanship. The move tore the firm apart, with several lawyers from the antitrust practice siding with Hausfeld, and heading out the door with him. He also took his biggest cases with him, but not the case of the twelve, which belonged to Fryszman, Handley, and Molly McOwen. With their law firm in chaos, the trio prepared to take their fight to Texas, to argue what would likely be one of the most significant motions in the case right at its very start, and facing one of the nation’s most powerful companies on its home turf.
11
2009
Houston
George and Herman Brown, the brothers who made their fortune building the world’s largest construction company, may not have erected the cathedrals of steel and glass filling Houston’s modern skyline, but their influence remains inescapable across the city’s landscape, even long after their deaths. The Cohen Milstein lawyers checked into their hotel the day before the first hearing in their case against the Browns’ legacy corporation, KBR, just a few blocks away from Houston’s mammoth George R. Brown Convention Center, which covers ten city blocks Downtown. George Brown himself, albeit cast in bronze and perched atop a stone plinth, watches over conventioneers and the city from a park across the street. The trio’s hotel was within walking distance from the site of their battle with KBR—the Bob Casey Federal Courthouse, named for a Texas congressmen who no doubt had benefited from the Brown brothers’ political largesse, at least via Lyndon Johnson’s hold over the Democratic Congressional Campaign Committee. The brothers’ legacy also reached inside the courthouse, where the jurist assigned to the trio’s case, U.S. District Court judge Ewing Werlein Jr., had listed dividend payments from Halliburton stock as his first and second sources of outside income on his annual federal ethics report. Werlein recused himself from the case, but his stock portfolio made clear how the fortunes of KBR and Halliburton remained knotted up with those of Houston and its ruling elite.
After dropping their bags and freshening up, Fryszman, Handley, and McOwen prepared to huddle for an overpriced work dinner inside their hotel, where they would discuss some last-minute refinements to their arguments for the next day. Virtually anyone who can cover the $350 filing fee is entitled to bring a federal lawsuit against anyone they want. That part was easy. Now came the real test. The judge would consider KBR’s motion to dismiss the case, detailed in thick briefs and replies that had piled up from both sides over the previous months. As Fryszman had thrown the book at KBR in the forty-eight pages of allegations that made up the lawsuit, the motion to dismiss gave KBR its chance to throw it back.
During their dinner, the red lights on their BlackBerry phones started flashing, portending perhaps the greatest nightmare that can prey upon a lawyer on the eve of a major hearing. It was an e-mail from the chambers of U.S. District Court judge Keith P. Ell
ison advising them of questions the judge wanted addressed the next day—not just any questions, but “a list of questions that have concerned me” about the lawsuit, the judge would say. Not only was the e-mail highly unusual—judges usually ask their questions in the courtroom—but its queries seemed to attack the very heart of their case, a job most judges usually leave to lawyers from the opposing side. In it, Ellison raised questions about the procedural viability of the case, but focused most ominously on what lawyers call its “factual sufficiency.” By alleging that KBR had run a racketeering enterprise involving human trafficking, Fryszman had invoked a law originally passed to dismember organized crime families across the United States. In so doing, she also had set an incredibly high bar for herself in Texas, where such allegations required meticulously detailed and specific facts even in the initial pleadings of a case. The standards in this regard are far more stringent in Texas than they are in California, and that’s not necessarily unwarranted, as the law had become a favorite tool of plaintiffs’ lawyers in the decades since its initial deployment against organized crime. Some of its popularity in this regard was rooted in the trebling of damages it allowed.
Ellison would also question whether their lawsuit, even on its face, alleged enough specific acts of coercion to amount to human trafficking. The judge focused on Buddi Gurung, the laborer who had been in the same convoy with the twelve but who had not suffered the same fate. The details in the lawsuit surrounding Gurung’s alleged ordeal were thin compared with those of the twelve men who were murdered, and yet Gurung was alive to provide all the details that could be had. Had he at any point faced physical restraint or any other specific acts of coercion? Had he even requested to leave the U.S. military base in Iraq? If so, what had happened? And what was the true nature of the relationship, on the ground, between KBR and the contractor that had brought Gurung and the other twelve into Iraq? Did KBR have control over, or even knowledge of, what its contractor was up to? Answers to those questions could be vital to whether the case could survive under the stricter scrutiny of Texas. The judge had given the lawyers less than twenty-four hours to prepare their answers.
The trio divided up Ellison’s questions. The hardest of them largely fell to Handley, as the answers lay with Buddi Gurung. He frantically started e-mailing and then calling Ganesh Gurung so that he might reach Buddi Gurung immediately to clarify important details. Handley prayed he could even get through to Kathmandu on the telephone, and then that Ganesh Gurung could reach their client in the rural village where he lived. The trio worked feverishly together, and then separately in their hotel rooms, well into the night, keeping in frequent touch on their room phones. Although still worried, an exhausted Handley finally fell asleep near midnight.
The streets and sidewalks across Downtown Houston are eerily empty, even at the height of the workday, as if the city were plagued by some postapocalyptic nightmare. The real reason is that almost everyone who lives there uses a network of subterranean walkways twenty feet below the streets, a series of climate-controlled tunnels linking nearly one hundred city blocks in cool, dry comfort. On Thursday, October 8, 2009, near the height of hurricane season in the Gulf of Mexico, Handley, a native Texan, led his two colleagues on a trek through the tunnels from their hotel to the Bob Casey Federal Courthouse. They left excessively early, perhaps owing to their nerves, and when they emerged across the street from the courthouse into thirty-mile-per-hour wind gusts and ninety-degree heat, they were more than an hour ahead of the hearing’s scheduled start.
Built in 1962 as offices for U.S. government workers, the courthouse is a box-shaped concrete slab just eleven stories high. Risibly small, square windows poke uniformly from its face in seventeen perfectly spaced rows across all ten stories above ground level. The windows are designed to protrude noticeably away from the building’s exterior, like portholes on the side of a ship; this gives the courthouse the look of a box cheese grater resting on its side. The building spends much of the day in the shadow of a fifty-six-story postmodern skyscraper complete with Dutch Gothic gables, rising on the other side of Smith Street. The proximity emphasizes the federal building’s appearance as a forgotten old box left at the feet of Houston’s glass-and-steel giants, which were erected across Downtown during the massive Texas oil and real estate boom that stretched into the 1980s, an era of excess exemplified by the television show Dallas and its ten-gallon-hat-wearing antihero, J. R. Ewing.
The three sat beneath the institutional glare of fluorescent tubes in the building’s cafeteria to speak again of the judge’s key questions. They had readied a sort of lifeline in case it seemed the divide between the standards of California and those of Texas was too wide for Ellison. Handley would volunteer that they could file an amended complaint to add enough specificity about the alleged acts of coercion against Buddi Gurung, or on whatever other aspect of their case the judge might require. It wasn’t ideal, but it was the best they had been able to come up with in less than twenty-four hours.
The trio headed upstairs to Judge Ellison’s chambers with plenty of time still to spare. Antique furniture and modern art filled the reception area outside the judge’s courtroom and office, along with dozens of framed family-style snapshots, making it seem as if Handley, Fryszman, and McOwen had just stepped into the living room of Ellison’s home. Oil paintings from the judge’s modern art collection hung on walls up and down the corridors. The familial warmth was in sharp contrast to the coldness of the rest of the building, or any other court chamber any of them had ever seen, but it did little to set the lawyers at ease.
With about twenty minutes to go, the team representing KBR emerged from the elevator.
KBR had a substantial in-house legal team, but nowhere near the firepower needed to defend it against the torrent of challenges it faced in federal courthouses nationwide as a result of its actions during the Iraq War, including lawsuits leveled at it by the U.S. government. The Justice Department alleged massive KBR overbilling from its active business as the war’s biggest contractor. Other cases against the company were pending, from Washington, DC, to the Pacific Northwest, and of course as far south as Houston. Litigation was such an enormous part of KBR’s business that when the human trafficking lawsuit landed on his docket, Judge Ellison alone already had two other major cases against the company pending before him. The bigger of Ellison’s two cases had nothing to do with Iraq, but it did little to burnish the company’s reputation. Standing before the judge in the same courtroom just a few months earlier, representatives of KBR and Halliburton had agreed to a record $579 million fine to settle criminal and civil charges for bribing Nigerian officials for more than $6 billion in contracts, all orchestrated through KBR while it was Halliburton’s subsidiary. Sham consulting agreements with shell companies had hidden the bribes. The rot did not involve a couple of “bad apples” at the bottom of the proverbial barrel, either. Albert Jackson “Jack” Stanley, the former KBR chairman, president, and chief executive officer, was awaiting sentencing before Ellison after personally pleading guilty in the case. On the day the company itself had pleaded guilty, KBR’s new chairman, president, and CEO, William “Bill” Utt, told reporters on a conference call, “I would like to state that KBR in no way condones, nor tolerates the illegal and unethical behavior that led to the settlement announced today.” Utt, an oilman and engineer, then repeated the line the company seemed to pull out every time it faced trouble over abuses: “KBR has developed and implemented a code of business conduct, and an active code-of-business-conduct training program, to drive the standards to which we hold ourselves, as well as our many stakeholders accountable.” The other KBR case pending before Ellison had gained even more publicity, becoming something of a nationwide cause célèbre. Jamie Leigh Jones, a young woman who had gone to Iraq for KBR, alleged that she was drugged and gang-raped by coworkers after arriving in Baghdad and that company officials had locked her in a trailer after she reported the rape. The conservative Fifth Circuit U.S. Court
of Appeals had just rejected KBR’s bid to throw out her lawsuit, clearing the way for a trial in Ellison’s courtroom.
For cases such as these, KBR kept a raft of top lawyers on retainer in Houston and at white-shoe firms across the country. The not insubstantial job of the in-house legal team was to manage the live cases and assist the outside lawyers when necessary. To fight the human trafficking lawsuit, KBR had hired a team from Baker & Hostetler, a prominent defense firm with offices in Houston and nationwide. But rather than being headed by a corporate defense specialist that day, the team was headed by David Rivkin, a Washington lawyer who was among the highest-profile conservative legal ideologues in the country. A firebrand who would sue President Barack Obama on behalf of Republicans in Congress and bring a nationwide challenge to the president’s health care law on behalf of conservative attorneys general, Rivkin was born and raised in the former Soviet Union. His grandparents and parents survived Joseph Stalin’s reign of terror, a history that seemed to have imbued him with a kind of convert’s zeal, akin to that of Ayn Rand. He was bespectacled, could often be seen wearing a seersucker suit, and had built the kind of legal career that seems possible only in Washington. His reputation as a leading conservative legal thinker was based not on a successful record of high-profile court cases, or even on writing articles for law reviews, but on penning opinion pieces for the Wall Street Journal, the National Review, and the Heritage Foundation. He also regularly promoted his views in cable and broadcast television news programs, reliably making himself available to bookers as a ready and willing on-air proponent of the Iraq War, and specifically of the Bush administration’s legal strategy for justifying torture, along with defending the White House’s legal arguments for indefinite detentions at Guantánamo Bay. When the Supreme Court ruled in 2008 that those detentions had violated the U.S. Constitution, Rivkin declared during a television appearance that it was “one of the worst decisions by the Supreme Court I’ve ever read, on par with the Dred Scott decisions [sic] and Plessy versus Ferguson.” Those infamous nineteenth-century decisions had left slavery and racial segregation, respectively, intact.
