MSD spent nearly $400K on case, more to come

Agency shells out big money in a whistleblower case it ultimately lost, and more spending is likely on the way

The Metropolitan Sewer District has spent nearly $400,000 on attorneys’ fees in a whistleblower case it lost. And if the plaintiffs are awarded what they expect, the total cost of the case for the quasi-public agency will exceed half a million dollars.

Last month, the 6thU.S. Circuit Court of Appeals upheld a jury’s finding that MSD Director Bud Schardein violated the Kentucky Whistleblower Act when he laid off former engineer Sarah Lynn Cunningham and contractor Ronald Barber, after Cunningham filed a report with the attorney general’s office alleging malfeasance among MSD workers, a board member and a Metro councilman.

Between February 2005 and October 2008, MSD paid $399,223.31 to the law firms Pedley Zielke Gordinier & Pence PLLC and Zielke Law Firm, according to records obtained by LEO Weekly through the Kentucky Open Records Act.

In addition to paying its own attorneys, the jury required MSD to pay Barber $35,000 in restitution. As well, MSD will be required to pay attorneys’ fees for Cunningham and Barber, which could total more than $100,000.

MSD is a quasi-public agency that receives most of its funding from ratepayers. While the Metro Council must approve its budget and rate increases — and does with little opposition — there is no city oversight agency with authority over MSD.

Officials at MSD did not return calls seeking comment on the case.

Alongside the lawsuit, Cunningham filed a complaint with the Metro Ethics Commission against Metro Councilman Bob Henderson, D-14, and his legislative aide Larry Mattingly. It took the commission four years to dismiss the complaint.