Kokua Line

By June Watanabe

Sunday, June 17, 2001

Who foots the bill for
city suit settlements?

Question: Recently, $600,000 was awarded to a woman employed by the Honolulu Police Department in her sexual harassment lawsuit against a former assistant police chief, while a jury awarded $2 million to each of two women who sued the state Public Safety Department for sexual discrimination. Who pays? Is it only the taxpayer, or are the persons who actually did the harassing also personally liable? Since these wrongdoings may cost the taxpayers millions of dollars, shouldn't they be fired as well?

Answer: The settlements are funded by taxpayers, that's true. But state attorneys say more effort is being made to recoup the costs of such lawsuits from the people involved, while the city's chief attorney says the city doesn't necessarily pay for every defendant. And, both state and city attorneys say officials do follow through on appropriate punitive actions.

In the state's case, since Gov. Cayetano took office, "Our policy has been to take very aggressive action to recoup the funds and take the appropriate measures with respect to the employee," said Marie Laderta, supervisor for the attorney general's tort litigation division.

Deputy attorney general Charles Fell explained that every year the attorney general sends a bill to the Legislature asking for payments of settlements and judgments against the state. The payments come from the state general fund, with "minor exceptions."

(Separate from the bill, there is a risk management fund maintained by the state Department of Accounting and General Services that pays judgments or settlements of $10,000 or less.)

Fell said that when the AG's office defends a case, it is defending the state, but if it believes another defendant (employee) is at fault, it will settle the case then seek a "contribution" from that defendant.

That means, "We paid the settlement off and because we did, you've got to pay us," Fell said.

Asked generally about job repercussions against such employees, Fell said, speaking "very broadly," that "the employing agency always has the option of taking appropriate disciplinary measures and they do so, on occasion."

That could include being fired, he said. Often, an independent investigation and action is taken even before any lawsuit is filed, Laderta said.

In the city's case, the City Council annually approves the terms and amount of settlements. The money is taken from a Judgment and Losses Account funded as part of the city budget and under control of the Department of Budget and Fiscal Services, said Corporation Counsel David Arakawa.

The account has amounted to $2.8 million for each of the past two years. (Claims under $5,000, for such things as damages to cars, minor falls, mailboxes damaged by garbage trucks, etc., come from the same account.)

The corporation counsel and the Honolulu Police Commission decide whether city employees (the former) or police officers (the latter) are entitled to representation and indemnification (paying judgments or settlements) by the city, Arakawa said

However, if the alleged wrongdoing is determined to be "outside the course and scope of employment," then the city will neither represent the employee nor pay on his/her behalf, he said. Both the corporation counsel and the police commission have denied representation in several sexual harassment cases, he said.

For example, the commission denied representation to the assistant police chief and the settlement paid by the city "did not settle the lawsuit against that former employee," Arakawa said.

Also, following internal investigations and prior to any lawsuits, the city, in many cases, has disciplined, even terminated, employees because of violations of its sexual harassment policy or other rules and regulations, he said.

He also pointed out that Michael Kahapea, a defendant in the city's Ewa Village case, was fired within a matter of months and more than a year before his criminal case.

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