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Monday, May 26, 2014

$16M racketeering animal rights case

HSUS, other animal rights group settle with Ringling Brothers

by Kerry Halladay, Associate Editor

— HSUS, other animal rights group settle with Ringling Brothers

What do you get when you cross the greatest show on earth with animal rights groups and laws intended for the mob? A multimillion dollar settlement and a three-ring public relations spectacle.

On May 15, a settlement between Feld Entertainment—parent company of the Ringling Brothers Barnum and Bailey Circus—and a collection of animal rights groups, including the Humane Society of the U.S. (HSUS), was announced. However, some of the claims made by HSUS’ announcement of the settlement raise questions.

The settlement’s price tag of almost $16 million went to Feld for 14 years of what one judge called “groundless and unreasonable” litigation brought by the animal rights groups over the care of the circus’ performing elephants. This adds to a prior settlement of $9.3 million paid to Feld. The most recent settlement money has already been transferred and the cases are effectively closed.

It is important to note that settlement of the cases does not presume the innocence or guilt of either party in either case. In settling, the groups have agreed to let the matters drop without anyone admitting wrong-doing. As such, all accusations of wrong-doing involved with both cases were never proven or ruled on by a judge and so will remain “alleged.”

Case history

Though the settlement effectively ends the “case” of Feld and the animal rights groups, there were two individual cases involved. Beginning in 2000, the American Society for the Prevention of Cruelty to Animals (ASPCA), the Animal Welfare Institute (AWI), the Fund for Animals (an affiliate of HSUS acquired in 2005), Born Free U.S.A/the Animal Protection Institute (BFUSA/API), and a past Feld employee, Tom Rider, brought a suit against Feld under the Endangered Species Act (ESA), alleging abuse to the circus’ endangered Asian elephants.

This case was originally called “ASPCA et al. v. Feld Entertainment, Inc.,” but was re-titled to list AWI as the lead plaintiff when ASP- CA settled for $9.3 million and removed itself from the proceedings in 2012. The judge involved eventually dismissed the case, ruling the plaintiffs had no standing to bring the case, and additionally ruled that Feld was entitled to attorney fee reimbursement. The dismissal was appealed by the plaintiffs, but to no effect.

During the first case it was discovered that one of the plaintiffs—Rider, a past “barn man” working with Feld’s elephants—had been paid for his allegedly false testimony. As a result, Feld brought a case in 2010 against the plaintiffs in the original case, as well as others, including HSUS, under the Racketeer Influenced and Corrupt Organizations Act (RICO). Historically, RICO was intended to combat organized crime and has often been used against the mafia. This second case was called “Feld Entertainment, Inc. v. Animal Welfare Institute, et al.”

“In order to bring a philosophical debate into the federal court to advance a radical ‘animal rights’ agenda and in order to garner publicity and raise money to support their various activities, defendants…devised and participated in an illegal and fraudulent pattern of actions to circumvent well-established limits on the Article III jurisdiction of the federal courts,” read the 2010 RICO complaint from Feld.

“These defendants hired defendant Rider to be their plaintiff and principal witness in an action under the ‘citizen suit’ provision of the Endangered Species Act.”

The RICO complaint went on to describe how Rider had worked with Feld’s elephants for two and a half years yet never filed a complaint for abuses or mistreatment to the animals during that time, and only claimed “aesthetic injury” several years after his employment with Feld.

“After winning 14 years of litigation, Feld Entertainment has been vindicated,” proclaimed John Simpson, Feld Entertainment’s legal counsel, in the group’s official announcement.

“This case was a colossal abuse of the justice system in which the animal rights groups and their lawyers ap parently believed the ends justified the means. It also marks the first time in U.S. history where a defendant in an Endangered Species Act case was found entitled to recover attorneys’ fees against the plaintiffs due to the Court’s finding of frivolous, vexatious and unreasonable litigation.”

Word games and money trouble

While the fact of the settlement and the events that led up to it are interesting in their own right, the response by HSUS is perhaps the most eyebrow raising development in the settlement. An excerpt from the HSUS announcement of the settlement reads:

“Although The HSUS was never a plaintiff in the case against Ringling, we believe it was prudent for the parties to settle, because this court would never address the core claims of elephant abuse, and there would be significant cost in continuing to litigate. We expect that a substantial portion, if not all, of the settlement costs to The HSUS and The Fund for Animals will be covered by insurance, and in the end, that no donor dollars from The HSUS will go to Feld.”

While it is technically accurate that HSUS was not listed as a plaintiff in the original ESA case, the implied non-involvement is far from accurate. According to its own information, HSUS became affiliated with the Fund for Animals in 2005, after the Fund brought the case. In addition to this indirect “inherited” involvement, HSUS was named in the settlement documents among the “Parties from which [Feld] has sought attorneys’ fees or sanctions” from the original case.

This connection came in the form of a money trail, explained Stephen Payne, Feld’s Vice President of Corporate Communications, when questioned by WLJ.

“We discovered, through the protracted discovery process [of the first case], that HSUS—after it had absorbed Fund for Animals—was a participant in the payment schemes to Mr. Rider.” He described some checks paid to the Wildlife Advocacy Project, a nonprofit organization “run by the plaintiff’s lawyers,” by HSUS and signed by HSUS CEO Wayne Pacelle. Wildlife Advocacy Project later paid Rider.

“So [HSUS’] statements to the contrary that, ‘oh, we didn’t have any involvement’ ring hollow.”

In a brief email exchange with WLJ on the claims made in HSUS’ announcement, HSUS’ Director of Media Relations, Heather Sullivan, reasserted that HSUS became affiliated with Fund for Animals after the case was brought and that “HSUS was never a party to the original case.” When Payne was asked about HSUS’ wording, he dismissed the claims.

“Again, they were involved in this. Otherwise we would not have found the trail of money to HSUS. I mean, clearly we found evidence that they were involved in this conspiracy with these other organizations, which is one of the tests that you have to have to file a RICO case. That’s why we named them as a defendant [in the RICO case].”

The other topic addressed in the HSUS announcement following the settlement also draws questions. The statement that no donor funds would go to Feld is in question. Both HSUS and Fund for Animals have been in lawsuits with one of their insurance companies, National Union Fire Insurance Company, which has refused to cover their liability in the RICO case. The lawsuit between HSUS and National is reportedly ongoing.

“They’re making the statement that the insurance company is paying for it, but we already have the money,” said Payne last Wednesday after discussing what he knew of HSUS’ lawsuit against the insurance company. “So did they just have $15.75 million hanging around collecting dust to give to us from a previous insurance fund or where did this money come from? It’s a question their donors should ask of, ‘where is my money going?’” When Sullivan was questioned on this topic, she responded briefly. “We have already settled with some of the insurance carriers (the settlements are confidential) and are in active litigation with the others.” She later repeated the claims made in the HSUS announcement that, “Insurance proceeds are expected to cover a substantial portion, if not all, of the contributions from the Fund for Animals and The HSUS toward the collective settlement by a dozen parties.”

Though it may be some time before the matter of HSUS’ insurance lawsuits are settled and the source of the funds paid to Feld are determined, Feld’s CEO Kenneth Feld hopes the experience will set an example for the future.

“We hope this settlement payment, and the various court decisions that found against these animal rights activists and their attorneys, will deter individuals and organizations from bringing frivolous litigation like this in the future,” he said in the group’s announcement of the settlement. — Kerry Halladay, WLJ Editor


 
 


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