Confidential facts for Counsel for CITY OF REXFORD

(Read pages App. A-7 to A-11 in the text for facts of the case.)
You are general counsel for the City; and the liability insurance carrier for the City has also
hired you to defend the City in connection with any claims by Daye or anyone else arising out of this
entire "Joey Smith" matter. You have been given full authority to settle this case by both the City
Council and by the insurance carrier.
The City is essentially furious about the accusation of racial discrimination by Daye. But, the
City is concerned that, in a trial of this case, evidence that Officer Crews beat Stimpson might come
into evidence. That event might give independent credence to Daye's claim that there are race
discrimination problems within the City's police department.
After consultation with other police departments in the State of Rexford, the City
determined that the person ultimately responsible for ensuring correct entries into the NCIC database
is the officer in charge of the investigation, not the clerical person who makes the actual data entry. This
is why Payton was not disciplined. In short, Daye should have reviewed the hard copy of the computer
entry that was given to him by Payton to ensure the accuracy of the entry into the database. Moreover,
the City is concerned that if it disciplined Payton and rescinded any disciplinary action against Daye,
Payton might then bring a claim of sex discrimination against the City under Title VII.
The City is, of course, concerned about a false arrest claim for damages that Joey Allen Smith
will likely bring against the City. This has not yet occurred; but when it does, the City's position will
be that a mistake was made and that the City is responsible for it. The overall strategy will be to
minimize damages by acknowledging the mistake. On the other hand, if Daye continues to insist he
did nothing wrong and testifies to that effect in a trial of Joey Allen Smith's claims, the jury might be
enraged and award Smith much greater damages than he otherwise would receive if Daye and the
City candidly acknowledge negligence in connection with the events that gave rise to Smith's arrest.
Indeed, the best overall strategy to placate Joey Allen Smith at this point is to have Daye write an
apology letter to Smith. Chief Burns has already written such a letter to Smith.
The City wants to resolve Daye's case if possible and avoid further adverse media
coverage. On the other hand, the City doesn't want to set a precedent that it will "just pay anything"
to avoid a discrimination suit, particularly when, as here, the City believes Day's discrimination claim
is totally unfounded. Any settlement of this case would have to be made public. There could not be a
confidentiality agreement about the terms of any settlement.