United States District Court, S.D. New York
CAROL A. BULLARD, also known as ASHA BANDELE, Plaintiff,
DRUG POLICY ALLIANCE, MARIA McFARLAND, and JAMES FERGUSON, Defendants. DRUG POLICY ALLIANCE, Counter-Claimant,
CAROL A. BULLARD, also known as ASHA BANDELE, Counter-Defendant.
OPINION AND ORDER
KATHERINE POLK FAILLA, UNITED STATES DISTRICT JUDGE.
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 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,
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.).
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). 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).
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
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).
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).
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).
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).
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).
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).
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.).
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.).
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.). 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).
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