Judge Denies New Trial in Armenian Genocide Museum Dispute

More than a decade after efforts began to build a museum memorializing the mass slaughter of Armenians during World War I, litigation over the failure of those efforts has consumed everyone involved. Yesterday, a Washington federal judge denied a motion for a new trial in the dispute and ordered the plaintiffs to pay the defendants $1.4 million in fees and costs.

Minnesota philanthropist and businessman Gerard Cafesjian tangled for years with museum trustees over who was to blame for the project’s failure and what should happen to buildings Cafesjian donated to house the museum. Following a bench trial, U.S. District Judge Colleen Kollar-Kotelly found that the buildings should return to Cafesjian. Yesterday, she denied the trustees’ motion for another trial.

Over the trustees’ objections, she also ordered them to pay Cafesjian $1.4 million in fees and costs, a figure based on recommendations from U.S. District Magistrate Judge Alan Kay. Cafesjian’s legal team was led by Jones Day attorneys.

Cafesjian’s lead attorney, John Williams of Cozen O’Connor – who until recently was with Jones Day – said today that the rulings moved his client one step closer to making the museum a reality. “It’s been a struggle, but we’re getting closer and closer to having clean title in order to go ahead,” he said.

Lead counsel for the museum trustees, Eric Abraham of Hill Wallack in Princeton, N.J., could not immediately be reached for comment today.

The trustees moved for a new trial after learning new information about one of Cafesjian’s co-defendants, John Waters Jr. They claimed that according to a lawsuit that Waters filed against Cafesjian in U.S. District Court for the District of Minnesota, Cafesjian had agreed to pay Waters $400,000 to $800,000 for any work he did to help secure a positive outcome in the D.C. litigation. Waters didn’t disclose that information in the Washington proceedings, and the trustees argued that it undermined his credibility in a way that warranted a new trial.

But Kollar-Kotelly disagreed, writing that there was no concrete evidence that Waters’ allegations were true – his Minnesota lawsuit was still in the early stages – and, even if they were, she said any revelations wouldn’t have changed the outcome. The judge wrote that from the beginning, she knew that almost everyone involved in the litigation, including Waters, was biased because they had a financial stake or their reputation was on the line.

“If true, the fact that Cafesjian promised Waters $400,000 to $800,000 in the event Cafesjian was successful in the litigation is consistent with the bias the Court (and the parties) knew Waters possessed when he took the stand,” Kollar-Kotelly wrote.

The plaintiffs appealed Kollar-Kotelly’s initial decision entering judgment for Cafesjian, but that appeal was put on hold while she weighed the motion for a new trial. Yesterday’s decision likely means that the appeal is active again.

On the issue of fees, Kollar-Kotelley rejected the trustees’ argument that they shouldn’t have to reimburse Cafesjian and Waters, as former museum board members, for fees incurred through the litigation. The judge had previously found that Cafesjian and Waters didn’t breach their fiduciary duties to the museum, meaning they were covered by museum by-laws requiring indemnification for legal costs.

Kay sifted through the defendants’ request for $2.8 million in legal fees and costs – less than the nearly $4 million they claimed their attorneys logged on the case – and issued a report last April recommending they receive $1.4 million.

In yesterday’s opinion, Kollar-Kotelly found that Kay came up with a reasonable formula for calculating fees that took into account any possible excessive billing. Under Kay’s guidelines, the plaintiffs were on the hook for half of attorneys’ “blended” billing entries, meaning general entries for work done as part of litigation, such as writing briefs or participating in the trial.

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