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St. Louis County Faces A $20 Million Discrimination Bill With No Clear Way To Pay It

(via Flickr/Tracy O)
St. Louis County is unlikely to have to pay out the $20 million verdict a jury awarded Sgt. Keith Wildhaber, who accused the county police department of discrimination.

Under the best-case scenario, St. Louis County has about $12.5 million readily available to pay a police officer who won a nearly $20 million verdict in a workplace discrimination lawsuit two weeks ago.

But county officials and legal experts say it’s likely the county won’t end up owing Sgt. Keith Wildhaber near the amount he has been initially awarded. Existing state laws and court precedent suggest that $20 million verdict could be reduced on appeal or through a settlement. 

Wildhaber accused the county police department of passing him over several times for promotion because he is gay. After he filed a formal workplace discrimination complaint with the federal government, Wildhaber said the department transferred him to a less desirable assignment as retaliation. A jury found that he had been discriminated against.

To deal with verdicts like Wildhaber’s, the county has two pools of funding on hand, according to documents provided by County Executive Sam Page’s office.

The first is the county’s self-insurance fund, which totals $6.3 million. The county can take no more than 40% out of this fund, set up in 1985, to respond to a single verdict or incident. That means only $2.5 million can be withdrawn to pay Wildhaber.

Once the self-insurance avenue has been exhausted, the county can turn to another insurance policy it holds with Starr Indemnity & Liability of Dallas. This policy, started in 2014, requires the county pay a $2 million deductible before it kicks in with coverage. 

Assuming the self-insurance payment took care of the deductible, it could then cover as much as an additional $10 million of Wildhaber’s verdict, though the insurance company could also rule that the discrimination lawsuit wasn’t a legitimate expense. 

Combined, the two policies total $12.5 million — which would leave about $7.5 million of the Wildhaber verdict uncovered. Under that scenario, the county may have to draw on general fund revenue — typically used to cover parks, health care programs, the jail and other county functions — to cover the rest of the jury award. 

Most of the Wildhaber verdict — about $17 million of the nearly $20 million sum — is in punitive damages. The county could argue that the amount of punitive damages is excessive to try to get the jury award lowered, said Marcia McCormick, a professor at St. Louis University School of Law. 

The court has been sympathetic to such arguments in the past and tends to look critically on punitive damages that are in excess of actual damages three times over. Wildhaber’s verdict fits into that category, she said.

Missouri has also placed caps on the amount of money that can be awarded for a violation of the state Human Rights Act, which could apply to Wildhaber’s case, McCormick said. If they were imposed, Wildhaber could max out at around $1 million, but the limits were put in place after Wildhaber filed his lawsuit in 2017. It's unclear if they are retroactive, she said.

The county could also argue that Wildhaber doesn’t have standing to sue as a gay man in Missouri. State law doesn’t include protection from workplace discrimination on the basis of sexual orientation, and Wildhaber made a successful argument to get around this limitation.

It’s unlikely the county will pursue this line of argument, though. The county executive — who believes discrimination based on sexual orientation should be outlawed — has said he is uncomfortable making that case.

On Tuesday, the county council voted to retain an outside law firm to help with the Wildhaber case going forward.

The county council’s presiding officer, Ernie Trakas, R-south St. Louis County, said he felt it was unnecessary to consider the Wildhaber verdict when drawing up the county’s future budget.

“I have zero concerns, because they are not going to collect anywhere near $12 million, let alone $20 million,” he said in an interview Thursday night. “The judge will cut that verdict in half, at a minimum.” 

Reporter Rachel Lippmann contributed to this report. 

Follow Julie O'Donoghue on Twitter: @jsodonoghue

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