Judge: Philly district's 'scorched earth' legal tactics cost it millions

A federal judge has excoriated the Philadelphia School District for its "overly aggressive" defense of the late Superintendent Arlene C. Ackerman's "illegal" actions in a discrimination case, a strategy that he said proved "costly."

"The Philadelphia School District now must bear the costs of counsel's scorched earth tactics three times over," wrote U.S. District Court Judge Mitchell S. Goldberg in a sharply worded opinion issued Tuesday. "First in the form of the jury's damages award; second through their own attorneys' surely hefty fees; and now through the payment of the attorney's fees and costs . . ."

Goldberg affirmed a federal jury's decision to award $2.3 million to a Bucks County firm that had begun preliminary work on a $7.5 million no-bid emergency contract for security cameras only to see the contract given to another company at Ackerman's direction.

He also ordered the district to pay an additional nearly $1.3 million for the Bucks County firm's legal bills, costs and interest on the judgment. He also denied the district a new trial in the case.

The case involved Security & Data Technologies Inc. (SDT), a firm headquartered in Newtown. A jury in July found that the district and Ackerman had discriminated against the company in 2010 when Ackerman directed that the security camera contract be awarded to I.B.S Communications Inc., a small minority firm then- based in Mount Airy.

"Dr. Ackerman did so illegally, on the basis of race, in blatant violation of several civil rights statutes," Goldberg said. "Further fallout from Dr. Ackerman's actions included the firing of two high level School District officials, Francis X. Dougherty, the former Deputy Chief of Operations, and John L. Byars, the former Director of Procurement Services. . . . Not surprisingly, numerous lawsuits followed. The School District's response was to adopt an overly aggressive litigation strategy . . .Electing to stridently defend Dr. Ackerman's illegal conduct and the events stemming from that conduct has turned out to be a costly decision for the School District."

In his ruling awarding nearly all the money sought by SDT, Goldberg noted that the legal fees reflected time spent fighting the flurry of motions and objections filed by the district's lawyers and said that the district followed up by contesting SDT's legal expenses.

"Many of the hours SDT expended over the past four and a half years were the direct result of the litigation conduct of defendants and their counsel," the judge said. "The sheer volume of defendants' endless objections to the hours billed by SDT counsel is just a continuation of such tactics."

District spokesman Harold Lee Whack said Wednesday that the district was "considering its legal options." He declined further comment.

Goldberg had permitted the district to delay paying the $2.3 million in damages to SDT until he ruled on the request for a new trial.

Michael D. Homans, SDT's lead attorney said Wednesday that the Bucks firm was pleased with the judge's rulings.

"All they have ever asked is to be made whole for the losses and costs they have suffered as a result of the unequal treatment," Homans said. "We hope that the clarity and power of these . . . decisions bring a final end to this dispute, which has dragged on for more than six years."

The SDT case was one of four - and the second that the School District has lost in federal court - stemming from a 2010 Inquirer report that Ackerman had pushed SDT aside to give the project to IBS.

A district source told the newspaper that Ackerman ordered that the $7.5 million emergency contract be given to IBS.

A federal jury in 2015 found that Ackerman and a former head of district human relations had violated Dougherty's right to free speech by placing him on leave in December 2010 during an investigation into leaks about the camera contract, and then recommending that the School Reform Commission (SRC) fire him.

In his suit, Dougherty disclosed that he was a source for the article. He contended that he was fired in retaliation for talking with reporters and contacting state and federal authorities to express concerns about the contract.

In March, the SRC voted to pay Dougherty $725,000 to settle his claims.

Last month, the district agreed to settle a civil rights and defamation case filed by Byars, a former procurement director. He alleged that he was made a scapegoat over the fallout from the camera contract.

The terms of Byars' settlement have not yet been disclosed.

The remaining camera contract suit was filed in the Court of Common Pleas by Augustine Pescatore, a commander in the Office of School Safety, who was one of the six who were suspended. When he returned to work, he was reassigned to the patrol division. Pescatore alleges that he was defamed, demoted and made a scapegoat over the contract.

Ackerman left the district in August 2011 and died in February 2013. When the camera contract was made public, she repeatedly denied that she had directed the staff to award the work to IBS.

martha.woodall@phillynews.com 215-854-2789 @marwooda