Watchdog: Follow the Money

Animal rights groups that paid circus $15.7 million file suit against insurers who cancelled them in 2010

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Watchdog,Richard Pollock,Follow the Money,Class-action lawsuits,Animals,Humane Society

When leaders of the animal rights movement agreed May 15 to pay $15.7 million to America's most famous circus, it seemed to be the end of the 14-year-old case.

After all, at the case's conclusion, U.S. District Court for the District of Columbia Judge Emmet G. Sullivan bluntly described the suit brought by the animal rights groups as “groundless and unreasonable from its inception.”

Ringling Bros. and Barnum & Bailey Circus may have won back its good name, but a new issue has since arisen over who will pay the $15.7 million in attorney fees.

The insurers advised the animal rights groups four years ago they would not provide coverage for the attorney fees. Today, the groups are suing their insurers.

The fees were originally generated in Animal Welfare Institute v. Feld Entertainment lawsuit, which was filed in 2000. Feld owns the Ringling Bros. and Barnum & Bailey Circus, known to millions of Americans as "The Greatest Show on Earth."

The circus, which criss-crosses the United States by train and truck, has been performing since the 19th Century.

The circus was accused of abusing elephants by four animal rights groups and several individuals, including Tom Rider, who once worked for Ringling Bros.

The suit generated hundreds of briefs, motions, depositions and hearings, requiring the services of 41 attorneys from all sides.

When the settlement was announced, officials at the Humane Society of the U.S. and the Fund for Animals, which were responsible for paying the $15.7 million, defiantly claimed their insurance companies, not their donors, would pay the money to Feld.

“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,” HSUS said in a statement released on the day of the settlement.

What the animal rights groups failed to disclose to the public was that they'd been told four years before that their insurance companies would not provide coverage.

The balking insurance companies included the National Union Fire Insurance Co., the Travelers and Charter Oak Fire Insurance Co.

Revelations of ethical misconduct that surfaced as the case progressed to its conclusion left huge question marks about the credibility of the animal rights groups.

John Simpson, a law partner at the law firm of Fulbright and Jaworski and the lead attorney for Feld Entertainment, said the insurance issue continues a "pattern" of misinformation by the animal rights groups.

"The entire lawsuit was based on either misleading or outright false statements of fact," Simpson told the Washington Examiner.

The case began with allegations that circus workers mistreated the elephants. Rider, a former Ringling “barn man” who handled the elephants, charged that they were abused using bull hooks and chains.

Rider initially appeared to be an insider whistleblower making highly credible charges. But those charges soon crumbled largely because of questions about Rider's honesty.

Videos surfaced of Rider himself using bull hooks on elephants. He denounced another elephant handler as abusive toward the elephants, but then went to work for him. After leaving Ringling, he joined a European circus that openly used bull hooks and chains.

Rider claimed he loved all of his “girls" and had become so emotionally attached to them that he could identify them on sight.

During his depositions in 2006 and 2007, however, Rider "could not name the elephants with whom he allegedly had a personal and emotional attachment,” Sullivan wrote in his final ruling.

And, when shown video clips of the elephants, “he could not identify them,” the judge said.

The case blew up when it was revealed that attorney Katherine Meyer had secretly funneled $190,000 in payments from her own firm and from some of the animal rights groups to Rider. Meyer was the lead attorney for the groups.

Neither Meyer nor the animal rights groups had informed Sullivan or Feld's attorneys about the payments.

“The funds paid to Rider appeared to be paid in such a way to avoid ready detection,” said Sullivan, who sanctioned Meyer for "bad faith misconduct" with "deliberate intent to harm."

Meyer has filed hundreds of animal rights and environmental cases on behalf of activists for those causes.

But Sullivan said Meyer “sought to conceal the nature, extent and purpose of the payments” to Rider, including “affirmatively false interrogatory response [denying the payments] signed by Rider and prepared by Ms. Meyer, the same attorney who was paying him.”

Rider's testimony was so weak Sullivan said Feld's attorneys "pulverized" the former circus employee while he was on the stand.

The American Society for the Prevention of Cruelty for Animals separately settled with Feld in December 2012, paying $9.3 million in a lump sum. As the case crumbled, other animal rights groups also dropped out.

When the ASPCA and the May 15 settlements are tallied, the animal rights movement has now paid Ringling Bros. a total of $25.2 million. Feld's attorneys claim it represents the largest verdict or settlement made by the ASPCA or the HSUS.

The case also is the first time attorney fees were awarded to a private defendant under the 41-year history of the Endangered Species Act, according to Feld's attorneys.

The Humane Society and the Fund for Animals were first informed of the denial of insurance coverage in May 2010 when Chartis, the administrator handling the National Union claims, advised the groups, “there is no coverage for this claim, based on the insured’s failure to provide notice during the policy period.”

Both the Fund for Animals and the Humane Society failed to tell reporters on May 15 that they had an ongoing dispute with their insurance companies over compensation.

The Fund for Animals admitted in court filings that the organization continued to communicate with National Union about the denial, saying they “exchanged further correspondence during 2010; however, National Union steadfastly maintained its denial of coverage.”

Travelers also notified both groups they would refuse to provide coverage in a 2010 letter.

The Fund for Animals sued all three of the insurance companies last September, claiming “breach of contract” in a lawsuit filed in the circuit court in Baltimore, Md. That case has been transferred to the circuit court in Montgomery County, Md.

And only one week after the May 15 settlement, the Humane Society sued National Union in a case now in federal court.

Simpson, the Feld attorney, charged that in the latest episode of the case, the animal rights groups are misleading the public once again as they had throughout the trial.

“You have its head saying to the donating public that none of their donations are going to be used to fund this settlement, when I don’t see as a practical matter that could possibly be true," Simpson said.

“At the time they made that payment, which indisputably happened in cash to our client by wire transfer, there was no insurance payment. So it had to come from the coffers of the Humane Society,” he said.

Wayne Pacelle, the Humane Society's president and CEO, shrugged off the insurance companies' refusal to cover the settlement, saying in an interview, “denial of coverage is a standard posture within the industry.”

Pacelle, who was previously the organization's chief lobbyist and spokesman, said they have a “commitment” from one carrier “to cover the bulk of what our responsibility is.”

He said he hopes there can be settlements with the other two insurance carriers.

Mediation talks are being held between the Fund for Animals and the Travelers and Charter Oak insurance companies, according to court documents.

“What’s not covered by insurance is covered by the Fund of Animals,” Pacelle said.

Pacelle's claim highlights another issue. The CEO insisted that the Fund for Animals is totally separate from the Humane Society, saying it has “its own board of directors and its own donors.”

But the Humane Society's website describes the merger of HSUS and Fund for Animals as occurring in 2004:

“In 2004, Wayne Pacelle and Michael Markarian (president of The Fund for Animals and now chief program and policy officer of the HSUS) helped engineer the corporate combination of the HSUS and The Fund for Animals,” the current website states.

And the Humane Society's 2012 IRS Tax Form 990 describes the two organizations as legally "related" to each other.

“Since insurance was going to cover the share we were going to commit to, we wanted to move on,” Pacelle said.

Pacelle also insisted the lost lawsuit was based on a "sound case." He also offered a conspiracy theory about the circus:

“This is a company that has infiltrated animal welfare groups, hired a former deputy director of the CIA to infiltrate animal welfare groups."

Charity Navigator, a national consumer rating organization of public charities, published a “Donor Advisory” notice about the Humane Society and the Fund for Animals earlier this year in describing the Feld case settlement.

Sandra Miniutti, a Charity Navigator vice president and spokesman, said donor advisories are issued “because donors may want to re-evaluate their donations.” She said the advisories indicated “extreme concern.”

Only 160 public charities have been marked with a "Donor Advisory" out of the 1 million public charities reviewed by the organization, she said.

Rider passed away in October 2013.

UPDATE: 

Charity Navigator has issued updates to its donor advisories for Humane Society of the U.S. and Fund for Animals as a result of this story.

CORRECTION: The animal rights groups discussed in this story agreed to pay a voluntary settlement and were not ordered by a court to pay, as an earlier version of the headline erroneously stated. The Washington Examiner regrets the error.

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