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Magistrate denies any pre-bench wrongdoing

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A newly appointed federal magistrate in Indianapolis denies any misconduct or knowledge of wrongdoing that a judge says happened during a clean air trial last spring prior to her taking the bench.

The misconduct is alleged to have happened when she was an attorney representing Duke Energy on claims it failed to meet environmental standards at some of its power plants. Magistrate Debra McVicker Lynch filed a declaration Friday with the U.S. District Court for the Southern District of Indiana, defending her conduct as an attorney when she represented Duke Energy.

The two-page document comes in U.S., et al. v. Cinergy Corp, et al., 1:99, CV-1693, involving a nine-year-old case that culminated with a trial and jury verdict in May 2008. Jurors had found Cinergy - bought by Duke in 2006 - violated federal rules at its Wabash plant in Terre Haute, but cleared the company regarding modifications made at four other plants in Indiana and Ohio. Following that verdict, attorneys discovered a previously undisclosed consulting agreement with a witness that raised questions about the company's central themes at trial. Duke attorneys had presented arguments about the plaintiffs' "hired experts" versus the defense "engineer" witnesses, who had differing views on what kind of repair and modernization projects may have been happening at the power plants.

In a mid-December order, Judge McKinney found that Duke didn't disclose that it had a consulting agreement with witness Robert Batdorf, and had misrepresented his relationship with the company - whether he was a retired, unpaid former employee or a paid consultant.

The judge ordered a new trial for Duke because attorneys tainted the liability phase of the litigation. He is threatening to suspend counsel for Duke from practicing in the federal court, turning to a rarely used disciplinary power the court has. Local counsel is from Taft Stettinius & Hollister, which acquired Indianapolis firm Sommer Barnard last year. It's unclear whether any of the Taft attorneys in Indianapolis were involved in the representations made to the jury about the witness, but those counsel of record are Scott Alexander, Robert Clark, John Papageorge - and Lynch, who withdrew in October just before accepting her judicial post.

The company's principal counsel in the case is with the Washington, D.C., office of Sidley Austin. Indianapolis firm Barnes & Thornburg also recently entered an appearance in the case, representing Duke.

Judge McKinney demanded in December that all of Duke's counsel in this case as of May 5, 2008, show cause why they should not be suspended immediately from practice before the court and ordered to pay the plaintiffs' attorney fees. He wants to know what each knew about the status of the consulting agreement Duke had with the witness, and when that information was known. The deadline was today.

In her response, Magistrate Lynch wrote she didn't have any knowledge of the consulting agreement between Cinergy and Batdorf described in Judge McKinney's order before or during the trial, or while she was counsel of record for the company. She wrote that she became "generally aware" that a motion for a new trial after her withdrawal was based on an undisclosed matter, but she didn't find out about it in full until reading Judge McKinney's order. She also pointed out that her involvement in the trial and the two months beforehand was limited to about two-tenths of a billable hour, not including compiling or providing discovery responses, witness preparation, or trial strategy. Most of her tasks involved coordinating with the court and co-counsel regarding logical arrangements for various proceedings, she wrote.

"I declare under penalty of perjury that the foregoing is true and correct," her declaration ends, supplementing her request that the court fully discharge without any further action the show cause order as directed to her.

In a separate 38-page response filed Friday afternoon for the Duke/Cinergy counsel, Barnes & Thornburg attorneys John Maley and Larry Mackey disputed the court's findings of misconduct and wrote that counsel hadn't mislead anyone in the case. The brief also includes references from several prominent Indianapolis area attorneys who've reviewed the issues and determined they are legal, ethical, and reasonable.

"Cinergy and its counsel respectfully request that this court find no misconduct occurred and take no disciplinary action against Cinergy or its counsel, allow its counsel to continue practice before this Court, and award no fees to Plaintiffs."

A 9 a.m. hearing is set for Tuesday in Judge McKinney's courtroom. Look for the Jan. 21-Feb. 3, 2009, issue of Indiana Lawyer for more coverage.

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