KBR Settles Lawsuit Brought by Driver Injured in Iraq Convoy
KBR Inc. (KBR) settled a lawsuit brought by an injured convoy driver who claimed the company sent civilians into a battle zone in Iraq in 2004 knowing they would be attacked and possibly killed, according to a court filing.
Reginald Cecil Lane, the driver, reached a “confidential settlement” with KBR and its former parent, Halliburton Co. (HAL), his lawyer, Tommy Fibich, said yesterday in court papers. Lane and the defendants asked the court to dismiss the lawsuit, according to the filing.
“Lane was severely injured in the attack, and his wife died during the pendency of the case,” Fibich said today in a phone interview. He declined to comment further on the settlement, citing the confidentiality agreement.
KBR, a Houston-based government contractor, was also sued by the families of seven drivers who were killed in Iraq. The company is appealing a ruling by U.S. District Judge Gray Miller in Houston allowing the suits to go forward. The other claims haven’t been settled, Scott Allen, a lawyer for the families, said today in a phone interview.
The deal with Lane was reached in late December, according to appeals court records. A KBR representative declined to comment on the settlement, citing a confidentiality agreement.
“Although Halliburton is named in the lawsuit, the activity involved was pursuant to a KBR contract,” Marisol Espinosa, a Halliburton spokeswoman, said in an e-mail. “Defense of this lawsuit is KBR’s responsibility so we cannot comment on the details.”
Recruited Workers
The drivers and their families claim KBR officials fraudulently recruited workers for safe jobs in Iraq and intentionally sent unarmed civilians into a recognized combat zone in April 2004. The military-supply contract gave company officials the right to refuse assignments deemed too dangerous for civilians, according to the complaints.
KBR and Halliburton have argued that they aren’t liable because they couldn’t refuse Army orders to dispatch the fuel convoys under terms of their multibillion-dollar supply contract with the U.S. military. Miller rejected Halliburton’s request to be dismissed from the case on the grounds that KBR was spun off as a separate company in 2007.
Last July, KBR urged the U.S. Court of Appeals in New Orleans to throw out the drivers’ claims, arguing that the cases required a jury to second-guess the military’s actions in Iraq. The convoys were attacked at a time when Iraqi insurgents were just beginning to escalate the fight against U.S. troops that had taken over the country to oust dictator Saddam Hussein, according to court records.
‘Catastrophic Failure’
“They were doing what they were employed to do when they were attacked,” Lawrence Ebner, KBR’s lawyer, told the appellate judges. If the drivers’ deaths and injuries were caused by a “catastrophic failure” of Army intelligence concerning threats along the convoy route, “that would absolve us” of liability for the casualties, Ebner told the court.
“We’re not going to judge what the Army did; we want to judge what KBR did,” David Gunn, the drivers’ appellate lawyer, told the New Orleans panel in asking to let the claims go to trial. Calling the casualties “not even close to accidental,” Gunn said, “there is plenty of evidence on our side that they knew the attacks were ongoing and they refused to tell us or draw us back” to protected military bases.
The appeals court hasn’t said when it will issue a ruling.
Can’t Name Military
Miller previously ruled that the companies couldn’t name the military as a co-defendant in the lawsuits, so the Army isn’t required to defend its actions.
Allen, who represents several drivers killed in the attacks, told the appellate judges in July that three U.S. generals have testified in the case that “KBR has the right to turn their convoys around,” regardless of the military’s opinion of the safety or necessity of any particular convoy mission. Scott declined today to comment on any possible settlement of the remaining drivers’ claims.
The lower-court judge ruled the convoy cases could go to trial after reviewing extensive company e-mails sent between the drivers, their dispatchers and company officials during the weeklong series of convoy attacks. The messages show company officials debating the dangers of sending the civilian convoys into battle areas, after the drivers had sustained casualties and the attacks were continuing, according to e-mails unsealed in the case.
E-Mail Exchanges
Miller said the e-mail exchanges convinced him that the defendants knew that some drivers would be attacked and killed the next day if convoys were sent along the same route where drivers had been fired on the previous day. The convoys were sent out anyway, with no warning to the drivers, Miller said in his ruling.
In early 2010, KBR attorney David Kasanow told the Army that the company faced the “near certainty of a protracted, difficult trial with potential damages of more than $700 million,” according to court filings. KBR previously stated it would submit the bill for any damage awards or litigation expenses tied to its military contracting work in Iraq to the government for possible reimbursement.
The case is Lane v. Halliburton, 06-CV-01971, U.S. District Court, Southern District of Texas (Houston).
To contact the reporters on this story: Margaret Cronin Fisk in Detroit at mcfisk@bloomberg.net Laurel Brubaker Calkins in Houston at laurel@calkins.us.com.
To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net
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