Making The Law Pay

In a sweeping class action lawsuit, they accuse the state of Oregon of illegally denying them the chance to work outside of so-called "sheltered workshops" that pay them a fraction of minimum wage.

The case has dragged on because of the many parties involved and the complexity of the legal arguments.

On May 13, however, U.S. Magistrate Judge Janice Stewart sanctioned Oregon's attorneys in District Court for causing unnecessary delays.

The sanctions by Stewart, first reported by The Oregonian last week, are unusual, even in complicated civil cases. The action could have consequences as Oregon attorneys prepare to defend the state at trial.

But what hasn't been reported is the role of the private law firm hired by the Oregon Department of Justice to handle the case, and its connections to Oregon Attorney General Ellen Rosenblum.

The firm, Markowitz Herbold, earned Stewart's courtroom smackdown after it failed to hand over to plaintiffs 770,000 pages of evidence that should have been disclosed long ago. Stewart issued the sanction after Markowitz's lead attorney, John Dunbar, acknowledged the failure to produce the massive cache of evidence.

"It's a black eye for the law firm to make this mistake," says John Parry, who teaches civil court procedure at Lewis & Clark Law School. 

The Markowitz firm has billed the state $2.2 million so far on the case. The firm has won other big legal contracts from the Justice Department under Rosenblum. Among them: the state's high-profile litigation against Oracle Corp. over the $300 million failure of the Cover Oregon health insurance exchange.

Rosenblum, who is married to WW co-owner and publisher Richard Meeker, has benefited politically from the Markowitz firm. The Oregonian's Steve Duin reported in a column last August—and state records show—the Markowitz firm has contributed $15,000 to Rosenblum's campaign coffers since January 2012, more than any other Oregon law firm.

Rosenblum referred political questions to her campaign consultant, Dan Kully. Kully says political contributions don't influence Rosenblum, and she doesn't get involved in deciding which law firms her agency hires. "Her deputies make those decisions," he says.

The Markowitz firm has worked on contract for the Oregon Department of Justice for more than a decade. The amount the firm has received from the state DOJ since Rosenblum took office in June 2012 has gone up. In 2013, for example, the state paid Markowitz $1.85 million, about twice the average of what it paid the firm under Rosenblum's predecessor, John Kroger. Between Oracle and the disabilities case, the state will likely pay Markowitz in excess of $4 million this year.

"The firm has had a long and successful record of working with the Oregon Department of Justice," DOJ spokeswoman Kristina Edmunson said in a statement to WW. "Each of the three previous attorneys general has trusted the firm with significant, complex cases."

Edmunson says she can't comment on Rosenblum's political activity. The Markowtiz firm didn't respond to WW's calls for comment.

Paula Lane, a 51-year-old Aloha woman with intellectual and developmental disabilities, filed the federal class action against the state of Oregon in 2012. Right away, lawyers saw it could have national implications.

In Oregon, as elsewhere, state agencies provide employment opportunities in settings where people with disabilities are segregated and where they often perform menial tasks for far less than minimum wage.

The federal government pays to support that work. Lane, for instance, has worked in a Beaverton sheltered workshop earning about 50 cents an hour for packing boxes and folding bags. 

Lane and other plaintiffs allege the state of Oregon has illegally prevented them from working in integrated settings where they could earn more money and have a wider range of work experiences. 

The U.S. Department of Justice joined the suit, taking sides with Lane and the other plaintiffs against the state of Oregon.

Bob Joondeph, executive director of Disability Rights Oregon, which represents some plaintiffs in the case, says it could potentially affect the rights of people with disabilities in all 50 states.

Joondeph says the case is a test of the Americans With Disabilities Act, which has not been applied when people with disabilities are employed in federally subsidized sheltered workshops. 

"People with disabilities want to live lives that are meaningful," Joondeph says. "For most of us, that means earning money and living a life that is productive. We've set up segregated institutions that suggest the lives of people with disabilities don't have meaning."

The Oregon Department of Justice originally assigned one of its staff lawyers, John Dunbar, to take the lead on the case. In March 2014, Dunbar quit the state DOJ and went to work for Markowitz Herbold. The case, and its billings, went with him.

As a senior DOJ lawyer, Dunbar earned about $134,000. At the rate he charges in private practice—$405 per hour—the Markowitz firm could bill the equivalent of his state salary in a little more than two months.

Edmunson, the spokeswoman for Rosenblum and the Oregon DOJ, told WW it made sense for the case to stay with Dunbar when he left the state's employment.

"Mr. Dunbar stayed on this case after he left DOJ because everybody involved with the state's litigation agreed that keeping his expertise and knowledge of the lawsuit, and the regulatory background, would be advantageous," Edmunson told WW in an email.

"This case is the first of its kind in Oregon, and given its magnitude and the unique aspects of this case, there are very large financial and structural implications for the state—both now and in the future."

Court filings show that Dunbar essentially blamed his client for the screwup. 

According to court papers he filed, the problem occurred when the two sides agreed on a set of keywords the state would use to search its computers for documents related to the case. 

Dunbar said IT workers at the Oregon Departments of Human Services and Education—the agencies that administer the sheltered workshop program—failed to search for all the terms. That resulted in the omission of hundreds of thousands of documents.

"The state mistakenly excluded certain search terms during its collections of documents after March 2014, but it has pinpointed and remedied the issue," Dunbar wrote in a May 1, 2015, court filing. "The state has been forthright in acknowledging its mistake.” 

The plaintiffs and the U.S. Justice Department saw it differently. In court documents, they said the failure by the state and the Markowitz lawyers was "extraordinary" and "was not only immense in scope and prejudicial, but likely the result of inexcusable mistakes committed by defendants and/or their counsel."

Dunbar didn't respond to WW's requests for comment.

The sanctions will only add more costs to taxpayers. Judge Stewart's ruling will mean the defendants could pay out another $100,000 or so to repair the damage done by the firm's failure to produce documents.

The case is set for trial in December. In her ruling last week, Stewart stressed that, despite all the additional work the late document dump will entail, she wants to keep to that schedule. 

Parry, the Lewis & Clark professor, says the Markowitz firm's failure to produce documents on time does a disservice to the plaintiffs and taxpayers.  

"You do expect when you pay for the best, you get the best work," Parry says. "It's costing the state a ton of money, and now it's going to cost a ton more. It’s egg on their faces.” 

WWeek 2015