Extensive mediation has not resolved a dispute over the amount of money former Department of Energy cleanup contractor Washington Closure must pay Savage Logistics in attorney fees and other legal costs as part of a lawsuit settlement, according to federal court documents.
In mid-June, Washington Closure Hanford agreed to pay $3.2 million to settle a lawsuit originally brought by Savage Logistics and owner Salina Savage in 2010 in U.S. District Court for Eastern Washington. Savage Logistics had claimed in the lawsuit – which the U.S. Department of Justice joined in 2013 –improprieties by Washington Closure in awarding small business subcontracts during the 11 years through fiscal 2016 it held the River Corridor environmental remediation contract at DOE’s Hanford Site.
In the settlement, Washington Closure agreed to pay Savage Logistics’ legal fees and costs, which were yet to be determined. Washington Closure recently made an offer of $750,000, which Savage rejected, court documents show.
Savage Logistic proposed on Oct. 18 that U.S. District Judge Sal Mendoza Jr. schedule a judicially hosted settlement conference to resolve the dispute. On Wednesday, Mendoza rejected that proposal as being unproductive and instead issued a scheduling order that lays out deadlines for filings up to a hearing on May 31, 2019, for oral arguments on the expenses.
Savage Logistics said its attorneys and paralegals respectively spent 2,036 hours and 206 hours working on the case. Because attorneys worked on a contingent basis they are owed substantially higher hourly rates than if they were certain of being paid, Savage Logistics said. The $750,000 offer would not cover hourly rates, let alone its costs and expenses and the additional work now to resolve the fee dispute, according to the company.
Washington Closure said it has not received a formal fee petition from Savage Logistics, but it expects to dispute an hourly fee that is increased because the case was taken on contingency or that is based on customary rates outside the Eastern District of Washington. It also may object to claims for legal fees accrued after the Justice Department stepped in to litigate the case, according to court documents.
In the lawsuit, Savage Logistics — a small, woman-owned radioactive material transport specialist that has changed its name to Apogee Logistics — accused Washington Closure of subcontracting fraud. Washington Closure in 2010 and 2012 awarded two subcontracts worth about $20 million to Sage Tec, covering cleanup of chromium contamination near Hanford’s C Reactor and remediation of contaminated structures, soil and pipelines in the Hanford 300 Area.
The Justice Department alleged Sage Tec was not a legitimate small business with resources to carry out the assigned work. Sage Tec, which has worked on other Hanford projects, teamed with Hanford-area company Federal Engineers and Constructors.
