District's Web-cam legal bill tops $550,000 so far

The Lower Merion School District's legal bill for defending its laptop tracking system has topped $550,000, a sum that could balloon - and get handed to taxpayers - if the district settles a lawsuit over the system and loses a fight with its insurer over the tab.

The figures, released by the district Tuesday at the request of The Inquirer, equal barely half of 1 percent of the current $193 million budget in Lower Merion, one of the state's richest school systems.

But the district may have to pay some of those fees out of its pocket. That is because its insurance carrier is asking a court to rule that the district's policy doesn't cover the lawsuit's claims. In the meantime, the insurer is shouldering 80 percent of the cost.

The fees arising from the controversy have come at a time when the school board is proposing a 4 percent tax hike for next year. The fees to date are nearly four times what the district paid three years ago to buy the software, which let officials remotely turn on the Web cams on school-issued laptops that students reported lost or stolen.

And the legal tab is still running.

The school board in early March agreed to pay the Ballard Spahr law firm $250 an hour - a discounted rate for a prominent Center City law firm - to defend and investigate the lawsuit filed Feb. 16 by Blake Robbins and his parents. Robbins, a Harriton High School sophomore, argued in the suit that the tracking system violated wiretapping and privacy laws.

Ballard Spahr, in turn, contracted L3, a computer forensics company, to help gather the evidence and prepare a report detailing when, why, and how often Lower Merion employees activated the tracking software on laptops issued to nearly 2,300 high school students since 2008.

That report is due Monday.

Through March 28, Ballard Spahr had charged Lower Merion $311,000, according to the district's figures. The bills for L3 came to $240,000 through April 12.

Henry E. Hockeimer Jr., the Ballard Spahr partner leading the defense and district's internal investigation, declined Tuesday to discuss the fee structure or payments.

The court docket for the case lists four Ballard Spahr attorneys. A letter outlining the firm's services says the hourly fee covers work by lawyers and legal assistants. It's not clear how many L3 employees are working on the investigation.

Doug Young, a spokesman for the schools, said the district could not release more details, including the dates and description of the work or copies of the actual bills, until they were reviewed by the school district's business manager and its board counsel.

School Board President David Ebby said the tab to date was not a surprise. "This is an awfully complex investigation and if we are to restore the public's trust, it must be comprehensive, and carefully performed by independent third parties," Ebby said in an e-mail.

Meanwhile, the New York insurer that issued a multimillion-dollar liability policy to the district has asked a federal judge to release it from paying damages or legal fees in the Robbinses' suit.

The insurer, Graphic Arts Mutual Insurance, acknowledges that it agreed to cover Lower Merion for up to $1 million for any personal injury or bodily harm, but contends that the Robbinses' claims don't fit into those categories.

District lawyers have not yet filed a reply in the dispute with the insurer, court records show. Young, the schools' spokesman, said Graphic Arts had agreed to shoulder 80 percent of the district's legal costs in the Robbins case until a judge rules on the insurance issue.

Attorneys for the district and Robbins' parents met with a federal judge for more than three hours last week to discuss a possible financial settlement, but left without an agreement. The Robbinses' attorney, Mark Haltzman, said no new negotiations were planned.

Haltzman declined to discuss costs of the case, except to say: "I think everybody has used their best efforts to keep the legal costs on both sides to as reasonable an amount as possible with the goal being to fully explore what exactly took place."

District officials have acknowledged "serious mistakes" with the laptop security system.

The program secretly captured more than 56,000 photos and screen shots from students' computers in less than two years, mostly from machines that had been reported lost or stolen.

But at least 12,000 of those images were collected because technicians failed or forgot to turn off cameras even after students had found their laptops, district investigators have found. In those instances, Web cams shot and stored a new photo every 15 minutes if a laptop was running.

Investigators have been unable to determine why technicians turned on the system in another dozen or so cases.

Robbins' attorney said the teen's laptop snapped more than 400 images, including a photo of the student shirtless and another of him asleep at his Penn Valley home.

Carol Cafiero, the district official who ran the tracking program, has said in court papers that Robbins had no legitimate expectation of privacy because he had violated school policy by taking his laptop home without paying a required $55 insurance fee.

Ebby, the school board president, said Tuesday night that he expected at least $200,000 more in legal bills to pile up from the controversy.

"Big money," he said. "It's a big, big horrible error in judgment."