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[ISN] Reverse hacker case gets costlier for Sandia Labs
By Jaikumar Vijayan
April 17, 2007
A wrongful termination lawsuit against Sandia National Laboratories that
resulted in a jury award of more than $4.7 million in damages to Shawn
Carpenter, a former security analyst at the organization, may be getting
even more costly for the labs.
A district court judge in the state of New Mexico, where the case was
heard, recently awarded 15% per year post-judgment interest on the
original award as allowed under state law. The amended final judgment
means that interest in the amount of almost $60,000 per month is
accumulating while Sandia's appeal against the jury award works it way
through the courts.
Following that judgment, "Sandia is posting a supersedeas bond in the
amount of $5.8 million to cover a year and a half of interest and the
judgment," Carpenter said. Such a bond allows Sandia to delay payment of
a judgment until the appeals process is over.
"The purchase price of the bond is face value, plus additional fees, and
guarantees that they will pay the judgment should the appeals fail,"
Carpenter said. "We are trying to find out who is paying for all of
this. The answer is most likely the taxpayers," he added.
Sandia officials have said they intend to appeal the amended final
judgment to the New Mexico Court of Appeals and, if necessary, to the
Supreme Court of New Mexico.
A Sandia spokesman today said the organization would "take all steps
necessary" to pursue its right of appeal in the case. "While Sandia
respects the jury process, Sandia maintains that the verdict in this
case was erroneous," the spokesman said in an e-mailed comment.
"Like all employers, Sandia must retain the ability to discipline its
employees when they take action in violation of law, refuse supervisory
instructions or act without authorization," he said.
The spokesman said Sandia officials could not comment further because of
the ongoing legal proceedings.
Carpenter worked as a network intrusion detection analyst at Sandia. He
was fired in January 2005 for sharing information related to an internal
network compromise with the FBI and the U.S. Army. Sandia alleged that
Carpenter had inappropriately shared confidential information he had
gathered in his role as a security analyst for the laboratory.
Carpenter said he had done so only for national security reasons. He
said his independent investigations of a May 2004 breach had unearthed
evidence showing that the intruders who had broken into Sandia's
networks belonged to a Chinese hacking group called Titan Rain, which
also had attacked other sensitive networks and stolen U.S. military and
other classified documents. He claimed that he had tried in vain to get
the information to the other agencies through proper channels at Sandia
before deciding to share the information on his own.
After getting fired, Carpenter filed a wrongful discrimination lawsuit
against Sandia. In February 2007, a New Mexico jury awarded Carpenter a
total of more than $4.3 million in punitive damages and more than
$400,000 in other damages. During the trial, the jury heard testimony
about how a Sandia official had told Carpenter he would've been
"decapitated" or how there "would at least be blood all over the office"
if Carpenter had been working directly for him.
After the verdict, Sandia filed several post-trial motions, including
one that asked for a new trial and another that asked the judge to
reduce the amount of the jury award.
"During the course of litigation, we made several settlement offers, and
they ignored all of them," Carpenter said. "The one offer they made
wasn't even worthy of consideration," he said.
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