Friday, January 02, 2009

California Department of Education (CDE) pays off whistleblower and lawyers

Sacramento Bee
California Department of Education settles whistle-blower suit for $4.25 million
By John Hill
Published: Wednesday, Apr. 23, 2008

The state Department of Education has settled a long-running lawsuit with a whistle-blower, paying $4.25 million to the former worker who said he suffered retaliation after he reported corruption and fraud to then-Superintendent Delaine Eastin.

But that wasn't the department's only cost. Over seven years, it has paid another $1.2 million to law firms for defending the state through two jury trials and appeals.

Still, the $4.25 million settlement represents a savings of sorts. In the second trial in 2007, a jury awarded whistle-blower James Lindberg $7.6 million. With interest, the value of that judgment had increased to $8.6 million, said Hilary McLean, spokeswoman for superintendent of schools Jack O'Connell.

"The settlement reflects both parties' determination that there were risks with continuing the litigation that outweighed the benefits of trying to pursue a final resolution in the Court of Appeal," McLean said.

"We think it was a benefit to taxpayers to reach a settlement. It ends the expense of continuing to defend this case in court."

Lindberg's attorney, Gaspar Garcia II, did not respond to phone calls seeking comment.

The case centered on corruption in a program that handed out money to community-based organizations between 1995 and 2000 to teach English and citizenship to recent immigrants. Some of the schools that got grant money didn't even exist.

Lindberg, a 20-year state worker, said that when he and others reported $11 million in misappropriations to Eastin, she ignored them. Then he was transferred to a job with no duties, leading to stress that he said triggered two heart attacks and put him in a wheelchair.

Another whistle-blower settled for $350,000 in 1999, McLean said.

Lindberg's first jury trial in 2002 led to a $4.6 million verdict. The department appealed, and the case was sent back for another trial. But that jury awarded Lindberg $3 million more.

The state was pursuing yet another appeal when the settlement was reached.

The $1.2 million in legal fees went to two separate law firms – one defending the department and the other representing Eastin, the former superintendent.

Eastin also is covered by the settlement, McLean said. As part of the settlement, the state admitted no liability, she said.

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