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Judge dismisses KBR’s attempt to divert legal bills on sickened troops in Iraq to taxpayers

- The Washington Times - Monday, March 10, 2014

A federal judge last week dismissed a lawsuit by contractor KBR that had argued the taxpayers should pay millions of dollars in legal bills rung up by the company as it defended itself against other lawsuits accusing it of wrongdoing.

The company had argued its contract with the federal government protected it from lawsuits by soldiers who accused the company of exposing them to carcinogens at an Iraqi water treatment plant.

On Friday, U.S. Court of Federal Claims Judge Lynn J. Bush tossed the case on procedural grounds, saying the court didn't have jurisdiction.

"The court's ruling is based on procedural reasons and not on the validity of KBR's claims," said company spokesman Richard Goins. "We disagree with the ruling, will refile our claims and pursue all available options for payment."

The dispute centered on an indemnity clause in KBR's "Restore Iraqi Oil" contract, which included work on the Qarmat Ali water treatment facility in Iraq's oil fields in 2003.

In one of several lawsuits stemming from the work, a group of Oregon veterans won a judgment of more than $80 million in 2012 after accusing KBR of knowingly allowing a carcinogen — sodium dichromate — to contaminate the area around the plant that soldiers guarded. KBR, which disputed the suit, appealed the jury verdict.

After KBR was sued, the company filed papers claiming it should be indemnified against such lawsuits by the U.S. government. The Army Corps of Engineers, which was in charge of the oil fields contract, denied the request, prompting KBR to take its case to the Federal Claims court.

The company asked the government to pay more than $23 million in legal and other fees, according to court records.

A day before last week's dismissal, KBR suffered a another setback in a long-running series of lawsuits accusing the company of negligence for using open air burn pits, spreading toxic fumes in Iraq and Afghanistan.

In a ruling affecting more than 50 burn pit lawsuits, the 4th U.S. Circuit Court of Appeals said KBR didn't have immunity from the lawsuits, reversing an earlier decision.

The appeals court said it wasn't unclear just how much the military was involved in overseeing KBR's burn pit operations, but said the company was entitled to immunity only if it stuck to the terms of its contract.

Because there wasn't enough evidence to say whether KBR acted within the contract or not, the appeals court ruled that the company shouldn't have been given "sovereign immunity" — a finding that had led to the earlier lawsuits' dismissal.

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