On November 8, 2013, the United States District Court for the Eastern District of New York approved a “Settlement Agreement for Claims of California” in United States of America, et al. v. CA, Inc., U.S. District Court for the Eastern District of New York Case No. 06-3552-LDW-WDW (the “Litigation”), a class action lawsuit. The Litigation involved claims related to CA, Inc.’s improper recording of beginning and end dates of software maintenance contracts with various governmental entities that were entered into between 2001 and 2009. According to the plaintiffs, this resulted in double payment for periods during which a prior contract and new contract overlapped. The Litigation was filed by the Federal Government and several states, on behalf of themselves and other states, counties, cities, and other governmental entities (referred to in the settlement agreement as “political subdivisions”). The settlement required, among other things, CA, Inc., to pay into a settlement fund, to be allocated among the plaintiff-class members that are political subdivisions involved in the Litigation. The County was identified as one such political subdivision and plaintiff class member.
Each political subdivision in the plaintiff class has been mailed a check in the amount of its allocation of the settlement funds. The County’s allocation of those funds is $3,472.66. The settlement amount was calculated based on the County’s qualifying purchases of CA, Inc. software maintenance services from 2001 to 2009, and a formula agree to by the State of California and CA, Inc.
To participate in the settlement, the Board of Supervisors must accept the settlement check, and direct staff to deposit the check by February 12, 2014. Depositing the check constitutes the County’s approval of the settlement, and the County will be bound by the Settlement Agreement. If the Board of Supervisors does not approve participating in the settlement of the Litigation, the County will not be entitled to any of the settlement funds, and would need to return the settlement check to CA, Inc.. Further, to assert its individual claims, which the class and its attorneys have asserted on behalf of the County and other class members in the Litigation, the County would need to initiate costly litigation against CA, Inc.
By participating in the settlement the County would be releasing CA, Inc., from any and all claims the County could raise regarding CA, Inc.’s improper recording of beginning and end dates for contracts entered into between the County and CA, Inc., from 2001 through 2009. This settlement only involves claims for past conduct of CA, Inc. Further, the settlement does not release several types of claims related to CA, Inc.’s past conduct, including claims arising under tax laws, criminal liability, administrative liability, and claims for failure to provide goods or services, among other claims.
The County currently contracts with CA, Inc., to maintain the County’s computer mainframe, and to provide software license maintenance. This settlement should not require any changes or amendments to existing contracts between the County and CA, Inc.
For the foregoing reasons, the Chief Information Officer recommends that the Board of Supervisors approve participating in the settlement of the Litigation and authorize the Chief Information Officer, or his designee, to deposit the settlement check.
If the Board of Supervisors does not approve participating in the settlement of the Litigation, the County will not be entitled to any of the settlement funds.