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Bullard v. Drug Policy Alliance

United States District Court, S.D. New York

December 30, 2019

CAROL A. BULLARD, also known as ASHA BANDELE, Plaintiff,
CAROL A. BULLARD, also known as ASHA BANDELE, Counter-Defendant.



         Plaintiff Carol Bullard, also known as Asha Bandele (“Bandele”), brought the instant action against her former employer, the Drug Policy Alliance (“DPA”), and several of its employees, alleging claims of race and sex discrimination in violation of federal, state, and local law. DPA then filed counterclaims against Bandele for breach of fiduciary duty and fraud, alleging that she misappropriated DPA's funds by arranging for DPA to enter into a series of contracts with a personal friend, Kirsten West Savali (“West Savali”), to provide press coverage about DPA. DPA claims that Bandele actively concealed the true nature of the contracts from DPA, and that DPA would not have entered into the transactions if it had known that Bandele was paying West Savali personally, rather than through West Savali's employer. Bandele has moved to dismiss DPA's counterclaims for failure to state a claim, and alternatively asks the Court to decline to exercise supplemental jurisdiction over these state-law counterclaims. For the reasons explained below, Bandele's motion to dismiss is denied in full.


         A. Factual Background

         DPA is a non-profit organization and a leading advocate for drug policy reform. (Countercl. ¶ 148). Bandele became affiliated with DPA in 2006 and joined as an employee on January 1, 2009. (Id. at ¶ 20; Answer ¶ 2). As of 2015, Bandele held the title of Senior Director of Grants, Partnerships, and Special Projects. (Countercl. ¶ 166; Answer ¶ 2). As a Senior Director, Bandele reported to Widney Brown, who became the Managing Director for Policy in October 2017. (Countercl. ¶¶ 167, 173). In turn, Brown reported to DPA's Executive Director, Maria McFarland. (Id. at ¶¶ 167, 170).

         DPA operates on donations and, consequently, structures its budget to focus on expenses that aid its mission. (Countercl. ¶ 234). DPA typically receives journalistic coverage for free; it does not pay news organizations or journalists on staff at other news organizations directly for coverage of DPA, except in the form of “sponsored content” that is clearly labeled as such. (Id. at ¶¶ 223-24). DPA's viability as a successful non-profit organization depends on its reputation of credibility and fair-dealing. (Id. at ¶ 238). In 2016, DPA engaged in a journalistic partnership with The Root, an online magazine with a focus on African-American news and culture. (Id. at ¶¶ 225, 151). The partnership consisted only of working together on stories and cross-publishing material. (Id. at ¶ 225). It did not include any exchange of funds. (Id.).

         In March 2017, DPA received a significant grant from a funder. (Countercl. ¶ 174). Bandele was tasked with supervising much of the work under this grant. (Id.). Between 2016 and 2018, Bandele entered into four contracts on behalf of DPA with West Savali, a journalist for The Root and a personal friend. (Id. at ¶¶ 151, 152, 154, 175). Each of the contracts indicated that West Savali would be paid for content that supported DPA's mission and would be published in The Root. (Id. at ¶ 176).[2] Of potential note, the contracts were each addressed to West Savali's home address and personal email account. (Id. at ¶ 178). All of the payments for the contract were made to West Savali personally, and not to The Root or any other journalistic entity. (Id. at ¶ 179).

         Specifically, on December 1, 2016, West Savali entered into a contract with DPA according to which West Savali would be paid $5, 000 to report four articles designed to engage African American and Southern communities about the drug war to be featured in The Root or other publications. (Countercl. ¶ 181). On April 1, 2017, West Savali entered into another contract with DPA according to which West Savali would be paid $15, 000 for seven articles addressing the impact of the drug war on the American South to be featured in The Root. (Id. at ¶ 182). On November 3, 2017, West Savali entered into a third contract with DPA according to which West Savali would receive $15, 000 to write five articles about the drug war in connection with Black History Month in The Root. (Id. at ¶ 183). And on March 14, 2018, West Savali entered into a fourth contract with DPA according to which West Savali would be paid $10, 000 for coverage of a DPA delegation to Portugal for The Root. (Id. at ¶ 184).

         As a director-level employee, Bandele was responsible for the content of the contracts. (Countercl. ¶ 192). Bandele did not obtain substantive review of the contracts from either her supervising Managing Director or the Executive Director. (Id. at ¶ 194). Rather, she actively concealed the contracts from her direct supervisors because she knew that her supervisors would not approve them. (Id. at ¶ 195).

         Bandele endeavored to comply with the letter, but not the spirit, of DPA policy, which requires that all contracts be signed by either the Executive Director or the Managing Director of Finance, Ryan Chavez. (Countercl. ¶ 191).

         Bandele presented the contracts to Chavez, who is an accountant, for his signature. (Id. at ¶ 193). While Chavez reviewed and approved the procedural and accounting aspects of the contracts, he was not qualified (as Bandele well knew) to challenge the substance of the contracts. (Id. at ¶¶ 193, 195).

         In order to obtain his signature, Bandele led Chavez to believe that the contracts were negotiated in the normal course and would have been approved by Bandele's supervisors if they had been shown to those individuals. (Countercl. ¶ 196). She repeatedly told Chavez that the contracts needed to be signed with urgency, so as not to permit Chavez time to consult with other senior DPA management. (Id. at ¶ 197). For example, on March 14, 2018, at 4:00 p.m., Bandele emailed Chavez with high importance, with the subject-line “RYAN - Can you sign this pleeeeease???????, ” attaching the contract with West Savali for the Portugal trip. (Id. at ¶ 200). Bandele stated that she “neglected to move Kirsten's contract for Portugal. Would you mind signing this so that we can provide her funds to her via PayPal tomorrow? Thank you so much!!!!!!!!!” (Id.). Chavez responded to Bandele indicating that he was out of the office and suggested that Bandele have the contract reviewed and signed by McFarland to expedite the matter. (Id. at ¶ 204). Despite the professed urgency, Bandele declined to present the contract to McFarland and told Chavez she preferred to wait for him to sign the contract when he returned to the office. (Id. at ¶ 205).

         On March 14, 2018, DPA's Policy Team revised its internal procedures to require all contracts to be reviewed substantively by a supervising Managing Director or the Executive Director. (Countercl. ¶ 199). Around this time, Brown expressed concern to Bandele that she was not receiving all of Bandele's expenses or contracts for approval. (Id. at ¶ 199). On March 14, 2018, at 5:14 p.m., Brown followed up on her earlier conversation with Bandele and sent a direct message to all of her direct reports, including Bandele, indicating that going forward she would need to review all contracts before they were executed. (Id. at ¶ 201). At 5:21 p.m. the same day, Bandele wrote to Brown, forwarding her note to Chavez asking him to sign the contract and stating, “Just saw your email. This is an outgoing contract via [the funder].” (Id. at ¶ 202). Due to the upcoming Portugal delegation, Brown did not have an opportunity to approve the contract or respond to Bandele until Brown returned from Portugal. (Id. at ¶ 203).

         Soon after the Portugal trip, Brown asked Chavez for all of Bandele's contracts so that Brown could review them. (Countercl. ¶ 206). After reviewing the contracts, Brown expressed concern about them to McFarland. (Id. at ¶ 207). It was around this time that McFarland first learned about the series of DPA contracts with West Savali. (Id.). On April 17, 2018, a DPA employee also brought the contracts to McFarland's attention and informed her that The Root may not have been aware that West Savali was receiving direct payments from DPA. (Id. at ¶ 208). This employee also told McFarland that Bandele had arranged the Portugal contract for West Savali because West Savali was “going through a rough time.” (Id. at ¶ 209). At the time, West Savali's husband had lung cancer and West Savali had been affected by Hurricane Harvey. (Id.). McFarland also learned from this employee how Bandele determined the amount of the $10, 000 contract for the Portugal delegation: $5, 000 for West Savali to fly first class to Portugal and $5, 000 for West Savali to put a down payment on a car. (Id. at ¶ 210).

         On April 28, 2018, McFarland contacted an expert in journalistic ethics. (Countercl. ¶ 211). The expert advised McFarland that the arrangement between Bandele and West Savali was a serious breach of journalistic ethics and that no legitimate journalist would engage in this conduct, which appeared to constitute double-dipping. (Id.). The expert also indicated that, for DPA, this was a big reputational issue. (Id.). Finally, the expert said that even if the payments had been ethical, the rates being paid for this work were heavily inflated and that the standard rate for articles of this type is in the hundreds of dollars - not the thousands of dollars. (Id.). The expert recommended that DPA find out what The Root knew. (Id.).

         On May 4, 2018, McFarland spoke to an attorney for Univision, the parent company for The Root. (Countercl. ¶ 212). The attorney confirmed that West Savali was a staff writer and could not receive separate payments for her work in The Root. (Id.). The attorney also indicated that The Root was not aware of any written agreement or exchange of money between DPA and West Savali, and that it would be highly problematic for West Savali to be receiving payments in a personal capacity from DPA. (Id.). In a follow-up conversation with an attorney for The Root, the attorney clarified that staff writers for The Root are not allowed to receive payments from others for their work in The Root, and that any such payments would need to be approved by The Root. (Id. at ¶ 213). The attorney noted that for situations in which groups like DPA wanted to pay for content on The Root's website, they would have to pay for “sponsored content” that is clearly labeled as such and goes through an entirely different process - not through the journalists. (Id.).

         On May 16, 2018, McFarland spoke with the Executive Committee of the DPA Board. (Countercl. ¶ 214). She briefed the Committee on the investigation and told them that she was planning to terminate Bandele's employment on the basis of the improper contracts and payments to West Savali. (Id.).[3] The Executive Committee expressed deep concern and approved Bandele's termination. (Id. at ¶ 215). The Committee further indicated that the termination should be completed quickly so that it did not appear that DPA was complicit in Bandele's actions. (Id.). On May 21, 2018, Bandele's employment was terminated. (Id. at ¶ 216).

         On June 5, 2018, DPA shared with The Root details of the investigation into Bandele's conduct. (Countercl. ¶ 219). The Root indicated that they had not been aware of the contracts and payments to West Savali. (Id.). One week later, on June 12, 2018, The Root announced on its website that it had “separated from [its] associate editor, Kirsten West Savali, because of an editorial standards issue.” (Id. at ¶ 220). The posting indicated that “[a]fter the Drug Policy Alliance discovered and brought to our attention a previously undisclosed and improper arrangement, Gizmodo Media Group [owner of The Root] conducted a thorough investigation and made the difficult decision to terminate her.” (Id.). The posting also noted that The Root “will be removing any stories related to Drug Policy Alliance written by and/or edited by Kirsten and replacing ...

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