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Media

Responding to Charity Navigator’s DA on the Humane Society of the United States

I was sent a link to a story and asked if it was true. The story noted that Charity Navigator, the charity watch dog group, had attached a Donor Advisory to the Humane Society of the United State’s listing, specifically because of the lawsuits related to the Ringling Brothers circus.

I was astonished. A donor advisory because of a single Endangered Species Act lawsuit? Many nonprofits are involved in lawsuits as they work to achieve the goals that are part of their underlying mission. I have a hefty annual PACER (federal court document system) fee because of the documents I download for the numerous environmental and animal welfare cases I follow—and I’m only following a tiny fraction of the cases I’d really like to follow.

Was the Donor Advisory given because the animal welfare groups lost the case? I would hope not, because penalizing nonprofits for taking a chance in court would have a chilling effect on their ability to do their work.

Was the Advisory given, then, because they also entered into a settlement for attorney fees? That seems to be more likely, especially considering the hefty size of the attorney fee settlement ($15 million). However, that a single incident related to a single court case would override 60 years of history in the Charity Navigator’s decision seemed both capricious and arbitrary. If civil lawsuits were not part of the arsenal of the organization, or if HSUS was in the habit of losing these cases and having to pay hefty attorney fees on a regular basis, then I think it would give most people pause before donating—but a single instance? Frankly, my first reaction was, “Well, aren’t you the precious.”

Charity Navigator also referenced the fact that Ringling Brothers filed a counter-lawsuit against the animal welfare organizations based on RICO—the Racketeering law. The reference to RICO does sound serious, if it weren’t for the fact that because of the RICO law’s overly loose design, and due to the Supreme Court’s over-reliance on the “intent” of Congress when passing the law, RICO’s purpose has been badly muddied over the years. Now, rather than go after the Mafia or sophisticated white-collar criminal networks, RICO has become a highly tempting tool in corporate America’s tool belt, especially after the recent findings in the Chevron RICO lawsuit related to the earlier lawsuit brought by poor Ecuadorians against the oil company for environmental damage to their lands.

Regardless, neither lawsuit—the original Endangered Species Act lawsuit brought by the animal welfare groups (not including HSUS), or the RICO case—ever reached a decision on the merits. The former was dismissed because of lack of standing, and the second never went to trial. As part of the attorney fee settlement, Feld Entertainment (parent company for the circus) agreed to dismiss the RICO lawsuit. The fact that the corporation filed a complaint should be seen as irrelevant and not figure into any agency’s determination of whether the organizations involved are sound or not. Not unless Charity Navigator believes that all one has to do is file a complaint in court and it’s automatically taken as true.

Charity Navigator noted the reasons why the Judge dismissed the ESA case for lack of standing, though the agency’s understanding of the legal documents and associated time line of all the events are equally confused and inaccurate. For one, the agency stated that Feld filed the RICO lawsuit after the ESA case was decided. Feld originally filed the RICO lawsuit in 2007 when Judge Sullivan denied the company’s request to amend its answer and assert a RICO counter-claim. The new lawsuit was stayed until the ESA case was decided in 2009, and Feld amended its original complaint in 2010, when the RICO case started up again.

I wanted to pull out part of the memorandum Judge Sullivan wrote in 2007 when he rejected Feld Entertainment’s request to amend their answer (leading to the RICO lawsuit). It relates to Feld’s implication that the animal welfare groups were involved in a complex and corrupt scheme to pay their co-plaintiff, Tom Rider that the company lawyers claimed they didn’t know about until 2006.

Finally, the Court cannot ignore the fact that defendant has been aware that plaintiff Tom Rider has been receiving payments from the plaintiff organizations for more than two years. Although defendant alleges an “elaborate cover-up” that prevented it from becoming “fully aware of the extent, mechanics, and purpose of the payment scheme until at least June 30, 2006,” Def.’s Mot. to Amend at 4, such a statement ignores the evidence in this case that was available to defendant before June 30, 2006 and does not excuse defendant’s delay from June 30 forward. Plaintiffs’ counsel admitted in open court on September 16, 2005 that the plaintiff organizations provided grants to Tom Rider to “speak out about what really happened” when he worked at the circus.

In other words, Feld’s lawyers found out about the “elaborate scheme” to fund Tom Rider, because the animal welfare groups mentioned funding Tom Rider during a court hearing in 2005.

As for that funding, it is true that the animal welfare groups paid Tom Rider about $190,000 over close to ten years. However, what isn’t noted is that some of that “money” wasn’t money at all. Rider was given a computer, a cell phone to keep in contact with the groups, a used van so he could travel around the country speaking out about the trial and his experiences with the circus, and various other goods. The groups also provided IRS forms for years 2000 through 2006 for Rider. When I added up the income for these years, it came to $152,176.00. However, after all of Tom Rider’s expenses were deducted, over the seven years he “took home” a total of $12,582, for an average of $149.78 a month. That’s to pay for all of his personal expenses—including a cheap dark blue polyester suit and equally cheap white shirt and tie he wore to the trial. (Tom Rider must have stood out for the plainness of his garb when next to Feld Entertainment’s $825.00 an hour DC lawyers during the trial.)

Among the small selection of oddly one-sided court documents that Charity Navigator linked, another was the Judge Sullivan decision denying the animal welfare group’s motion to dismiss the RICO case. What stands out in this document is a reference to the original Judge Sullivan decision, specifically a comment about the Rider funding:

The Court further found that the ESA plaintiffs had been “less than forthcoming about the extent of the payments to Mr. Rider.”

I compare this statement with Sullivan’s statement I quoted earlier, wherein Sullivan denied Feld’s request to amend its complaint because of the supposed underhanded and secret funding—an assertion that Sullivan rejected in 2007. The newer constradictory 2009 statement was just one of the many inconsistencies in Judge Sullivan’s decisions over the years related to these two cases.

But the last issue that Charity Navigator seemed to fixate on was Feld’s attempt to get confidential donor lists from the animal welfare groups. I’ve written about this request, and my great disappointment in Judge Facciola’s decision to grant the request.

Nothing will ever convince me this wasn’t a bad decision, with the potential to set an extremely bad precedent. Even when the discovery was limited primarily to those people who attended a single event, it’s appalling that a confidential donor lists can be given to a corporation who represents everything the donors loath and disdain—and a corporation with a particularly bad record when it comes to dealing with animal welfare groups and other people—not to mention its abysmal record when it comes to its animal acts.

The animal welfare groups settled because when you have a billionaire throwing $825.00 an hour lawyers at a case, and said billionaire doesn’t care how much it costs to win, it didn’t make sense to continue fighting a fight that was already stacked against them. When Judge Sullivan ruled on the ESA case, he should have recused himself in the RICO case, because to rule favorably for the animal welfare groups in the RICO case would be to say he was inherently mistaken in many of his assertions in the ESA case. When he turned the case over to the Magistrate Judge, Judge Facciola should have exercised independent thinking rather than just continue to parrot Judge Sullivan. In light of this judicial bias, and the fact that the groups would continue to spend way too much money fighting a lawsuit that the other side would deliberately stretch out as long as it possibly could, keeping up the fight was a lose-lose situation.

Top all that with the threat to the anonymity of their donors, and the groups settled. Point of fact, if they settled specifically to protect their donors, more power to them. They should be commended for doing so, not punished.

What’s ironic is in my original posts on the donor list request, I noted that if the animal welfare groups had to give these lists out, it would most likely impact on their ratings in sites such as Charity Navigator. Never in my wildest dreams did I expect that Charity Navigator would give a donor advisory to the groups just because a judge ordered that the list be provided, not that they were provided. The groups had planned on appealing this ruling before they settled, and frankly, I think they had a good chance of winning the appeal. But the very fact that a no longer existing possibility of an event is enough to trigger a donor advisory leaves me to wonder how many more innocent nonprofits will be labeled with a donor advisory just because someone sent in a newspaper article about the possibility of an event?

Kenneth Feld’s $825.00 an hour lead attorney, John Simpson, was recently interviewed for a legal publication. In it, he spoke about the donor list;

They didn’t want a situation where I’m taking the deposition of some donor asking — if you knew they were going to take this money to pay a witness, would you have given this donation?” Simpson said. “I don’t think they wanted that kind of discovery to take place. Some people might have made the donation anyway. But most of these people would have said — no, I wouldn’t have done that. And you would have been in the middle of their donor relations and potentially cutting off their donations in the future.”

In actuality, the one fund raiser that was at issue in the donor list request did specifically state that the money was for the lawsuit, and other requests for funds specifically stated the money was for Tom Rider’s media campaign. In addition, there is a legitimate concern about what would happen to individuals put into an intimidating situation by a high priced, DC powerhouse attorney. Mr. Simpson has a way of asking questions in depositions, and then subsequently paraphrasing the responses so that even the most innocent and naive utteranceseems dark, and dastardly. It was unfortunate that Judge Sullivan allowed his scarcely concealed disdain for Tom Rider to lead him to basically accept whatever Feld’s lawyers said, even though the animal welfare groups presented solid arguments in defense.

Lastly, Charity Navigator linked an article in the Washington Examiner, as if this was further evidence of good reasoning for the donor advisory. Might as well link Fox News as a character reference for the EPA, or The Daily Caller as a reasoned source of news for President Obama.

Just because something shows up in a publication online does not make what’s stated truth, or even reliable opinion. That a charity watch dog would link a publication known for its political and social bias, as some form of justification for a decision only undermines its own credibility. Yes, the HSUS and the FFA are involved in lawsuits with a couple of insurance companies regarding their liability coverage. As noted, though, it’s common for insurance companies to deny claims of liability when it comes to litigation fees. Kenneth Feld, himself, is involved in a lawsuit with his insurance company about it not wanting to pay those $825.00 an hour fees for Feld’s attorneys in the lawsuit with his sister.

However, there were several insurance companies involved with the groups and this court case. One way or another most, if not all, of the attorney fee settlement will be paid by one or more insurance companies.

An interesting side note about the insurance company lawsuits is the fact that the Humane Society’s lawsuit is being handled in federal court, while the Fund For Animals lawsuit is being managed in the Maryland state court system. This disproves one Feld Entertainment claim that HSUS and FFA are one organization (and hence, justifying Feld’s dragging HSUS into the lawsuit). The reason for the lawsuit split is that FFA is a Maryland corporation, while HSUS is not, and the insurance company was able to argue that it could move the HSUS case to the federal level because of jurisdictional diversity. Nothing more succinctly demonstrates that FFA and HSUS are not the same corporate organization. Yet HSUS has received a donor advisory for a lawsuit it was never involved in. FFA was involved in the ESA suit, but not HSUS.

There is so much to this case, too much to cover in a single writing, but I did want to touch on the major points given by Charity Navigator in its donor advisory. Will the advisory hurt an organization like HSUS? Unlikely. The Humane Society of the United States is one of the older, more established, and largest animal welfare organizations in the country. Its charity ratings to this point have been excellent. A reputable organization like the BBB lists it as an accredited charity, and one only has to do a quick search online to see that it is currently involved in many different animal welfare efforts across the country—from rescuing animals in North Carolina to defending American burros. If people donate or not to the organization it won’t be because of Charity Navigator’s listing, because most people wouldn’t need Charity Navigator to learn more about the HSUS.

But such donor advisories could negatively impact on lesser known, smaller charities. I hope that when Charity Navigator issues such a drastic warning from this day on, it does so based on a foundation that is a little less arbitrary, and much less capricious, than the one they used for HSUS and the other animal welfare groups involved in this court case.

Categories
Critters

Animal welfare groups settle with Feld Entertainment

Last update

I’ve had a day to get over the shock at the settlement amount.

All of the statements by the animal welfare folk I posted links to make logical sense. And believe it or not, once I got over the shock at the amount of the settlement, I wasn’t necessarily against a settlement in the ESA attorney fee battle—though, I believed it was important to continue the fight in the RICO case. What I had expected was a settlement closer to the amount given in the original animal welfare attorney fee reply—about five million.

This amount would have been a loss for the groups, yes, but it wouldn’t have been such a PR bonanza for Feld. The larger amount, though…that’s going to cut deep, and not just in a monetary sense.

Regardless of what I’ve said today, I am not mad at the groups. I am profoundly disappointed, which, in some ways, is worse.

This settlement has ramifications beyond just the animal welfare groups and the fight for circus elephants. Corporations have started using RICO as a weapon against nonprofits, and what the corporations now see is that nonprofits won’t even stay around to fight a RICO case when one is brought. No matter the “logic” or the legal arguments—and, most likely, the insurance company demands—the harmful consequences of this settlement will have a disturbing and lasting effect.

I have said I won’t finish my original book, and this is true. That book is dead. That book was based on a heroic battle against all odds. I guess, in a way, it was a book of fiction because in our courts and in our philosophical equivalencies, there is no room for heroes.

But I am still going to write something about these cases. I have so much of the history, have spent so much time in research and among court documents. I am going to write something—I’m just not sure what, and I’m not sure when.

second update

Other statements:

From firm of Meyer Glitzenstein & Crystal the animal welfare attorneys in the original Endangered Species Act lawsuit.

From the Animal Welfare Institute.

From Wayne Pacelle, President of the Humane Society of the US.

update The Humane Society of the United State has issued a statement. No donor money is going to Feld, the insurance companies that provide liability insurance for the animal welfare groups are most likely paying the costs.

Does this statement make this settlement better?

No.

earlier After all the years following this court case, what I didn’t expect was for the animal welfare groups to basically capitulate to Feld Entertainment.

They agreed to a $15.7 million dollar settlement. Combined with the previous $9.3 million settlement by the ASPCA and Feld Entertainment actually made a profit on this court case.

And oh, how Feld is crowing about it today.

“After winning 14 years of litigation, Feld Entertainment has been vindicated. This case was a colossal abuse of the justice system in which the animal rights groups and their lawyers apparently believed the ends justified the means. It also marks the first time in U.S. history where a defendant in an Endangered Species Act case was found entitled to recover attorneys’ fees against the plaintiffs due to the Court’s finding of frivolous, vexatious and unreasonable litigation,” said Feld Entertainment’s legal counsel in this matter, John Simpson, a partner with Norton Rose Fulbright’s Washington, D.C., office. “The total settlement amounts represent recovery of 100 percent of the legal fees Feld Entertainment incurred in defending against the ESA lawsuit.”

Justice was not served in this case, or with this payment. It’s difficult to see how we can trust any of these animal welfare groups to stay the course with any new litigation or other effort after this settlement.

I had originally planned on writing about this case. I have close to three years of research into these two legal cases. Thousands of dollars of PACER fees, too.

But what good is telling the story when it ends with, “…and the animal welfare groups, tails between their legs, slunk off into the sunset”?

And what of the battle for the circus elephants? Though this settlement doesn’t change the facts—that the life for circus elephants is miserable—how can we continue this fight, when every time we open our mouths, this settlement will get shoved into our faces?

I guess we’ll see what the future holds. I do know, Justice was not served in this case.

Categories
Documents Legal, Laws, and Regs

Don’t Mess with one of the E-Discovery Triumvirate

I dabble more than a little in the legal world, but that’s OK, because the legal world dabbles quite heavily in the world of technology. Nowadays, metadata is the smoking gun in court, and e-discovery is the ballistics test that uncovers it.

The concept of e-discovery, or electronic discovery is simple: it is the discovery, identification, and production of electronically stored information (ESI). However, the execution can be involved, complex, and frequently contentious.

Take for example something seemingly simple and benign: the keyword search. If you and I want to find out about something online, we open up Google or Bing and type in some words, such as “e-discovery keyword search”. We typically get back a ton of links, in order of relevancy. We pick and choose from among the links to find what we need. Rarely do we have to go beyond the first few pages to get the information or resources we’re looking for.

In a legal case, though, what keywords are used can trigger a conference between parties, and even hearings with the judge. If there’s too much material produced, both parties may want to refine the keywords; too little material produced, and the parties may question what keywords were used, or whether the use of keywords is even useful.

In a white paper titled Where Angels Fear to Tread: The Problems of Keyword Search in E-Discovery (pdf), the author notes:

The heavy reliance on keyword search in e-discovery places an enormous burden on today’s legal teams. Inconsistencies in language, inefficiencies in search techniques and software user interfaces, which conceal more than reveal, place the attorney in a difficult position: determining what is relevant in a compressed timeline using obsolete tools and tactics. These outdated tools are a key factor behind the spiraling costs and risks associated with e-discovery.

There’s an entire science devoted to keyword searches within the legal community. As for other metadata, oh my goodness, let’s not even get started.

The use of e-discovery was an important component of the Ringling Brothers/animal welfare group Endangered Species Act case (now titled “AWI et al v. Feld Entertainment”). It has continued as an important component of the fees allocation process for this same case.

In a decision that is both unusual and controversial, the judge in the case, Judge Emmet Sullivan, decided that the animal welfare groups should pay attorney fees to Feld Entertainment for the 9+ year court case. After many months, Feld’s lawyers submitted their fee request in a set of filings spanning thousands of pages. (See my copy of the case history, starting with docket number 635.) Not only is the $25 million dollar (and change) fee request large, it’s also been provided in a not useful format: PDF documents with manual redactions, and color coding (example).

The animal welfare groups asked for something a little more useful:

The Fee Petition, which spans at least four-and-a-half four-inch binders, includes nearly two thousand pages of time records and invoices as well as numerous other Excel spreadsheets and tables. The time records and invoices, accounting tens of thousands of attorney and staff hours, are so voluminous that FEI’s paid experts were unwilling to review them. Plaintiffs, unfortunately, do not have the luxury of limiting their review of the time records and invoices to a determination that the “time entries provide level of detail . . . that is typical of appropriate block billing practice,” as Mr. Millian did, see D.I. 664 at 18, or to review only a supposedly “representative sample of litigation activities” limited to three brief periods of time, as Mr. Cohen did, see D.I. 663 at 11-12.5 Rather, Plaintiffs and their experts must scrutinize all of the hours that Feld now seeks to pass on to them.

As Feld’s experts make clear, and as Plaintiffs’ counsel explained to counsel for Feld, this is not a task that can be accomplished by reading the PDF versions of spreadsheets and invoices that Feld included in the Fee petition. It can only be accomplished via computer assisted analysis of the underlying time records using a program such as Microsoft Excel, which will allow Plaintiffs’ counsel and/or experts to (i) sort the data, (ii) perform complex searches within the data, and (iii) mathematically compare time entries across (for example) timekeepers, law firms, and parties to the litigation.

There is no commercially available computer program that can take a PDF of an Excel spreadsheet, much less a PDF of actual invoices, and generate a functioning spreadsheet containing the underlying data. Accordingly, the only way Plaintiffs could independently recreate the time records of Feld’s counsel would be to manually reenter tens of thousands of rows of numbers and text, a process that would take even highly-experienced data entry personnel hundreds to thousands of hours. It would be patently unfair to require Plaintiffs to undertake such an effort to recreate data that Feld’s counsel already have at their fingertips. Moreover, because an analysis of Feld’s billed time is one of the first steps needed to craft Plaintiffs’ response to the Fee Petition, requiring Plaintiffs to replicate Feld’s time records would inject months of needless delay into the fee application process, in addition to creating needless, and substantial, additional expense.

Feld’s lawyer’s response begins with:

Plaintiffs’ second request is for FEI to re-create all of the time entries for Fulbright (JS Ex. 31 and 32), Covington (EG Ex. 1), and Troutman Sanders (“Troutman”) (CA Ex. 2) in
sortable Excel spreadsheets because Plaintiffs say they want to “sort the data” and “perform complex searches.” Mot. at 6-8. These requests should be denied because: (1) the documents do not exist in sortable Excel format, (2) Excel format would not protect FEI’s privilege redactions that Plaintiffs cannot and do not challenge; (3) Excel format would not reflect the color-coding of the exhibits; and (4) FEI is not obligated to undertake the time, effort, and expense of creating new documents, to Plaintiffs’ specifications. It is not necessary for Plaintiffs’ response to the Fee Petition, and if they want to have such charts, they can create them themselves. JS Ex. 32, EG Ex. 1, and CA Ex. 2. These exhibits contain the time entries that were sent as part of invoices to FEI, and were produced to Plaintiffs in .pdf files, which is the same format in which they were sent to the client (or in some cases, the invoices were sent to the client in paper, in which case FEI provided a .pdf to Plaintiffs). The invoices do not, nor have they ever, existed in a sortable Excel format – a fact that FEI’s counsel represented to Plaintiffs. While the .pdf files are not sortable, however, they are word-searchable, as any Adobe document is. But as Plaintiffs themselves argue, there “is no commercially available computer program that can take …. a PDF of actual invoices, and generate a functioning spreadsheet containing the underlying data.” Mot. at 7. So Plaintiffs demand the creation of a document that does not exist, which is a requirement that is non-existent even within normal Rule 26 discovery on the merits of a case, let alone once the case has concluded and is in the final phase of assessing legal fees for frivolous and vexatious litigation.

The legal document goes on for several more pages, with the lawyers expressing increasing umbrage at the animal welfare groups’ request.

If the sheer volume of words and the level of outrage were any influence, a judge might be moved to side with Feld’s lawyer, John Simpson, from Norton Rose Fulbright. But the judge handling the fee allocation, Magistrate Judge John Facciola, isn’t just any judge. He’s one of three judges respectfully known as the e-discovery triumvirate—three men known far and wide for their expertise related to e-discovery.

And Judge Facciola was just a tad skeptical about Feld’s lawyers lamentations:

To that end, I will hold a one day evidentiary hearing, at which I expect knowledgeable representatives, such as billing database managers, from 1) Fulbright, 2) Covington, and 3) Troutman Sanders to be prepared to demonstrate the billing software used during their representation of FEI in the instant action. I also expect the representatives to be prepared to testify to the following issues:

1. Explain and demonstrate live (e.g. not in a PowerPoint presentation but in the actual database) how, within their particular software program(s), an individual timekeeper
makes an entry; what is recorded in that entry; how that entry is saved; who reviews that entry; how that entry is edited or altered for privileges or in an exercise of billing discretion; how that altered entry is saved; and finally, in what format the final bill is sent to the client.

2. Explain why that data saved within their particular software program(s) is NOT, through the use of commercially available software, capable of being converted into a sortable Excel-compatible delimited value spreadsheet format such as comma-separated value (CSV).

3. Explain why, if there exists data that was only saved in a .PDF format, it is NOT, through the use of commercially available software, capable of being converted into a sortable Excel-compatible delimited value spreadsheet format such as comma-separated value (CSV).

A noticeably subdued response indicated that the entries in Excel spreadsheet format would be forthcoming.

Categories
Legal, Laws, and Regs

ASPCA et al vs. Feld Entertainment Inc

I finally managed to get all of the ASPCA et al vs. Feld Entertainment court documents I have downloaded, linked to copies of the court dockets for your viewing pleasure.

Over 600 separate filings, many with multiple documents, each with hundreds of pages. I don’t have all the court documents, but I have most, including attachments and court exhibits. I typically didn’t download any court document that was a duplicate of a previous filing or had to do with court mechanics.

I also have uploaded the court documents for the associated RICO court case. Eventually, I’ll finish by uploading the appeal documents, as well as documents for peripheral court cases.

In addition to the court documents, the main index page includes links to many of the videos that were played during the trial.

Of the videos, the one that bothered Judge Sullivan the most is a young elephant, gently exploring a bike rack with her trunk. Ringling employee Troy Metzler casually walks up to her and strikes her trunk with a bullhook. An elephant’s trunk is very sensitive, and the young elephant is both startled, and in pain. Before the video clip ends, another older elephant reaches out, seemingly to comfort the younger.