Councilman Dan Grausz Issues Lindell Lawsuit Apology

In an extraordinary mea culpa, Mercer Island City Councilman Dan Grausz emailed citizens a letter of apology Sept. 13 for City Council's failure to take charge in events leading up to a costly brought by a former employee. The case concluded earlier on Tuesday.

"In my almost 12 years on the City Council, this is clearly the low point," he wrote.

The apology was in reference to the elected body's inaction over allegations of misconduct in City Hall that led up to the dismissal of former City Attorney and Deputy City Manager Londi Lindell in 2008. (Sept. 13), Federal Judge James L. Robart awarded $94,476.68 to Lindell for attorney fees in the lawsuit for City Hall's violation of the Public Records Act, effectively concluding all remaining legal action in the case. This is in June and not covered by the city's insurance. The city earlier reached a — paid for by insurers — in June.

Lindell also claimed she suffered sexual harassment, discrimination and was retaliated against for raising similar issues. Grausz said that while he disagreed with the settlement and Lindell's claims, he did not view it as an "open and shut case for the city."

"The City Council endorsed at least some of these decisions and failed to take staff to task as to others," he wrote. "As a result, we share the blame."

Grausz promised to make amends for the council's mis-steps with several pledges to local residents. City Council is scheduled to take several steps to review actions leading up to the Lindell case, including the , at its next meeting Sept. 19.

Here is the full text of Councilman Dan Grausz's letter:

September 13, 2011

Fellow Islanders: 

Today, the final shoe fell in the litigation surrounding the employment termination of a former City employee, Londi Lindell; the Judge awarded Ms. Lindell approximately $94,000 in legal fees with respect to her claim under the State’s Public Records Act.  Previously, the Judge had ordered the City to pay Ms. Lindell about $90,000 as a penalty for having violated the Act.  This is all in addition to the $1,000,000 that was paid to Ms. Lindell as part of a settlement negotiated by the City’s insurance company after she had challenged her employment termination.  There is no way to sugarcoat this situation and I will not insult your intelligence by trying to do so.  In my almost 12 years on the City Council, this is clearly the low point.

This case has been pending for over three years.  During that time, the City and Councilmembers have withheld public comment on advice of legal counsel.  As acting contrary to the advice of counsel could have jeopardized the City’s insurance coverage, this silence was unavoidable.  It was particularly frustrating because we wanted to discuss this with Islanders. 

First, as to the $1,000,000 settlement.  I feel confident in saying that not one person on the Council supported this settlement as we did not believe the claims against the City had merit.  The decision to pay this money was made by the City’s insurance company.  Under insurance law, it was their decision to make as it was entirely their money at stake – the full $1,000,000.  They also paid 100% of the legal fees to fight the claims underlying this settlement.  The insurance company, after considering the risks and the expenses of a trial and possible appeal, chose to settle.  Had the City refused to accept the insurer’s decision, all subsequent expenses of litigation as well as the risk of an adverse result would have shifted to the City’s taxpayers.  That clearly would not have been prudent.  It would have been one thing for the Council to stand on principle with our money at stake; it was clearly different for us to stand on our principles at your expense.  None of us are that presumptuous.

While I did not agree with the actions of the insurance company, I can understand its decision given the inherent uncertainties of litigation.  It is important to keep in mind that Ms. Lindell was seeking damages in excess of $20,000,000.   Furthermore, the Judge in this case had made decisions that, both as a Councilmember and a lawyer, I found hard to understand as did the insurance company and its lawyers.   Faced with this, a $1,000,000 settlement probably appeared to the insurance company to be an acceptable result.

I am not suggesting that the insurer paid out $1,000,000 in the absence of any evidence that would support the claim.  This was not an open and shut case in favor of the City.  City staff mishandled certain human resources issues back in 2007 and 2008 that ultimately resulted in this situation occurring.  The City Council endorsed at least some of these decisions and failed to take staff to task as to others.  As a result, we share the blame.  With the benefit of hindsight, one can understand why each decision was made at the time it was made and how each decision then led to the next decision which, as we see all too often in life, starts an escalation that results in disaster.

In this regard, it is important to clarify what the claims were in this case.   Ms. Lindell asserted that she was discriminated against based on her gender, that she was sexually harassed and that she was retaliated against for having challenged certain actions by other City staff.  The Court, in its statements prior to the settlement, made it clear that her discrimination and harassment claims would be dismissed prior to trial for lack of merit if the case was not settled.  The claim that would not have been dismissed, and the reason the insurance company settled this case, was the one based on alleged retaliation against Ms. Lindell for having raised what could have been thought to be legitimate concerns as to the manner in which certain disciplinary action involving another City employee was being handled.   Under the law, certain activities by public employees are protected and punishing an employee for having engaged in those activities is illegal.   That is where the insurance company must have concluded the City had exposure.  While I strongly believe that is not what happened, a jury might have concluded otherwise.   

It is important to understand that the discrimination and harassment claims did not underlie this settlement.  While people made mistakes, the men and women who work for our City are genuinely good people who neither discriminate against nor harass their fellow employees – not then and not now.    

Second, as to the Public Records Act judgment.   The bulk of the $90,000 judgment relates to a set of documents that the City had claimed were subject to the attorney-client privilege.   From a litigation standpoint, the City and its insurer acted properly in asserting this privilege and, in my opinion, had a strong legal basis for doing so.  From the public’s right to know standpoint and with the benefit of 20/20 hindsight, it was the wrong decision.  

So where to from here.  Many of you may want our heads as well as those of certain members of the City staff.  I understand that.  The City Council and the City Manager ultimately must accept responsibility for this series of events.  If you believe Councilmembers should resign, then you need to tell us that as we serve at your pleasure.  While I remain on the Council, however, I intend to focus my efforts on making sure we learn from this mess.  As part of that, I will push as hard as I can for:

• Undertaking a public and open review of our City’s human resources and public records management systems and policies, figure out what needs to be fixed and make sure it is fixed. 
• Setting performance requirements for City staff, make sure they are met or, failing that, make sure that changes are made.
• Ensuring that certain types of decisions by City staff are brought to the attention of the City Council at an early stage rather than at a point where our options are limited.
• Implementing procedures that do not put us on a course that ultimately precludes us from being able to engage the public in a candid conversation of the problems that we are addressing.

I apologize to the people of Mercer Island for what has happened.  While there is much that the Council can be proud of, in this instance we have not served you well.  I will do what I can to make amends for this.

Dan Grausz

Mercer Island City Council