U.S. District Court Judge Paul Friedman is allowing several parts of a multimillion dollar lawsuit filed against the city by its former contract chief, Eric Payne, to move forward.
In an opinion (PDF) yesterday, Friedman wrote that while many of Payne’s claims for defamation and wrongful termination were valid, he dismissed several elements, writing that Payne failed to show that he could prove the city engaged in fraud.
Payne, also a practicing attorney, served as director of contracts in the city’s Office of the Chief Financial Officer from 2006 until he was fired in January 2009. He previously served as assistant general counsel in the office beginning in 2004. Despite the partial dismissal, Payne said he is satisfied with Friedman's decision.
"We are pleased with the judge’s ruling and we are looking forward to having our day in court," Payne said in a phone interview today.
His attorney, Washington solo practitioner Donald Temple, did not immediately return a request for comment.
In late 2005 and 2006, in response to a series of security breaches that led to the printing of fake D.C. Lottery tickets, the city moved to break off its relationship with the company overseeing production, Lottery Technology Enterprises.
Payne, according to his complaint (PDF) filed in Washington federal court, accused the city’s chief financial officer, Natwar Gandhi, of interfering with the bidding process for a new lottery contractor. Payne claimed Gandhi told him not to consider certain bidders, which Payne believed was in violation of the city’s contracting laws.
Payne took his concerns to the Office of Integrity and Oversight, according to his complaint. He was fired in January 2009 and sued the city and Gandhi – in both his official and personal capacities – for unlawful termination, claiming he was the victim of retaliation for blowing the whistle on how the bidding process was handled. He also sued for defamation and emotional distress.
The city has denied the allegations of wrongdoing. Ariel Waldman, senior counsel to the city's attorney general, declined to comment on the pending case. The city's motion to dismiss can be found here (PDF).
Friedman wrote that Payne had ground to sue under the city’s Whistleblower Act, but granted the city’s request to dismiss Payne’s claim that the city unlawfully fired him under the D.C. False Claims Act. The judge wrote that while Payne claims he reported government waste, he failed to show the city was engaged in fraud in how it dealt with the lottery contracts. Reporting on waste is not protected activity under the act, Friedman wrote, and calling an activity “fraud” isn’t enough to survive a motion to dismiss.
Payne, who had already filed an amended complaint, asked the court for a chance to put together a second amended complaint to address the fraud issue, but the court denied that request, saying Payne failed to show he could survive another motion to dismiss.
Friedman also found that Gandhi was immune from personal liability – although not in his official capacity – and granted the motion to dismiss claims filed against him as a private individual. City laws protect individuals acting within the scope of their official duties from tort liability, Friedman wrote. He also dismissed a claim for intentional infliction of emotional distress.
A joint statement on how both sides want to proceed is due April 5.