Brian Watson is the CEO and owner of Denver-based real estate firm Northstar Commercial Partners. (BusinessDen file)
Amazon’s case against a Denver developer just got a lot slimmer.
A federal judge in Virginia has rejected the majority of the Seattle-based company’s civil claims against Brian Watson and his firm Northstar Commercial Partners, three years after Amazon accused Watson in a lawsuit of paying kickbacks to two Amazon employees to secure contracts to develop data centers outside Washington, D.C.
In summary judgment rulings issued Thursday, U.S. District Judge Rossie Alston said that Amazon had failed to show how it was harmed by the payments to employees Carl Nelson and Casey Kirschner, particularly since Amazon continues to use the facilities Northstar developed.
“Amazon has not established that the kickback payments from Northstar to Nelson and Casey Kirschner led to increased costs to Amazon on the lease transactions or the direct purchase transactions,” Alston wrote.
Stan Garnett, an attorney representing Watson, said the judge’s order reflects the fact that the case is “just a business dispute” at its core, even if Amazon has tried to “turn it into something more sinister.”
“This changes the complexion of the case dramatically,” said Garnett, formerly of Brownstein Hyatt Farber Schreck and now of Garnett Legal Group.
Thursday’s rulings also ended all claims involving Arvada attorney Rod Atherton, making him no longer a defendant in the case. Atherton helped create corporate entities that the payments were funneled through.
Watson isn’t entirely in the clear. Alston allowed two claims against him to proceed. A three-week trial is slated to begin May 1 in northern Virginia, although Thursday’s order may alter those plans.
“I think this is going to result in some dramatic downsizing of the trial,” Garnett said.
“We remain confident in pursuing the case given the extensive amount of evidence,” an Amazon spokesperson said.
The rulings come one month after two individuals linked to the payment scheme — Christian Kirschner, a longtime friend of Watson, and former Northstar executive Kyle Ramstetter — pleaded guilty to one criminal count each in connection with it. Another ex-Northstar executive and a former Amazon employee appear poised to also plead guilty criminally in the next month, according to federal court records.
Amazon’s civil lawsuit is separate from the government’s criminal investigation, although the defendants have accused Amazon of lobbying prosecutors to bring charges and said the case highlights the close relationship the tech giant has with the U.S. Justice Department.
Amazon has suggested that Watson or other individuals could still be charged, saying in court documents it believes the government’s criminal investigation is ongoing. Garnett said Watson does not expect to be charged.
Amazon sued Watson in April 2020 over what the company called “a significant fraud and kickback scheme.” Amazon said it was initially alerted to the scheme by an email sent to Jeff Bezos in December 2019 by a man who had previously worked for Northstar.
The email at right was sent to Amazon CEO Jeff Bezos in December 2019. (Courtesy Amazon /court records)
According to court records, after winning contracts to develop and lease data center buildings to Amazon, Watson and his firm paid $5.1 million to a trust controlled by friend Christian Kirschner. Kirschner had introduced Watson to his brother Casey Kirschner, who along with his boss Carl Nelson worked in real estate for Amazon. The bulk of the payments to the trust were then passed on to entities controlled by Casey Kirschner and Nelson.
Watson has maintained that the payments he made to Christian Kirschner were referral fees that compensated Kirschner for helping Northstar land business, and that such fees are common in the commercial real estate industry. He has maintained that he did not direct or intend for a portion of those fees to be paid to Casey Kirschner or Carl Nelson.
Judge Alston didn’t directly address that position in his order last week.
Separately, Casey Kirschner and Nelson also received payments in two situations where Amazon purchased land in northern Virginia. Watson wasn’t directly involved in those deals, although one was completed by Ramstetter and fellow Northstar executive Will Camenson without their boss’ knowledge.
Watson was angry upon learning about the side deal, and Nancy Rice, a retired chief justice of the Colorado Supreme Court, was brought in to help broker a settlement, court records show. Ramstetter and Camenson paid Watson $5 million of their profits, and the pair left Northstar.
By May 2022, when Amazon amended its lawsuit for the third time, the company alleged eight claims of wrongdoing against the defendants, notably fraud and racketeering. Alston rejected both of those claims on Thursday in part due to the failure to show injury.
Of the two Amazon claims that survived, one is tortious interference, which states that Watson’s payments interfered with the employment relationship between Amazon and Nelson and Casey Krischner. The second is civil conspiracy to engage in tortious interference.
Garnett noted the case was filed in the early days of the COVID pandemic, when it was hard to jump on a plane and in-person hearings weren’t really possible. Discovery didn’t start until nearly two years in. In late 2021, the Wall Street Journal published a front page story noting that the wife of the judge assigned to the case at the time owned Amazon stock (he later “reluctantly” recused himself). A receiver was appointed to oversee the finances of Watson and his company; the two men repeatedly clashed, including over whether Watson could get a new car.
By issuing summary judgments on six of Amazon’s claims in the case, not all of which involved Watson, Alston essentially said that Amazon’s arguments weren’t strong enough to be heard by a jury.
“There’s been a lot of unusual aspects to this, including how vigorously Amazon has pursued these claims,” Garnett said.
Garnett said he doesn’t quite know why the company, in his mind, put in “effort that was disproportionate to what happened.”
“Sometimes cases like this take on a life of their own,” Garnett said.
In 2018, Watson was the Republican nominee for Colorado state treasurer. His life is now drastically different. Northstar has said in court documents it’s down to two employees from approximately 40. The company has unloaded many of its assets, and Watson has sold his 20,000-square-foot mansion in Cherry Hills Village.
Last August, Watson was charged civilly with securities fraud by the U.S. Securities and Exchange Commission. That case, which does not relate to the Amazon development deals, is ongoing. Also last summer, Watson filed to divorce his second wife, whom he married in late 2019.
“This has been a very difficult three years for Brian,” Garnett said.
Other defendants have similar stories. Nelson’s wife Amy has been outspoken on social media about the impact on the couple and their four daughters, particularly the resulting legal bills, which she says forced the couple to liquidate retirement savings, sell their Seattle home and move close to family in Ohio.
Amy Nelson is founder of the startup The Riveter, which prior to the pandemic operated women-oriented coworking spaces in multiple cities, including Denver. In connection with the criminal investigation, the federal government seized hundreds of thousands of dollars from the couple in 2020, only to return the bulk of it in early 2022.
“Every single day, the financial stress of this eats at me,” she recently told the Seattle Times.
Brian Watson is the CEO and owner of Denver-based real estate firm Northstar Commercial Partners. (BusinessDen file)
Amazon’s case against a Denver developer just got a lot slimmer.
A federal judge in Virginia has rejected the majority of the Seattle-based company’s civil claims against Brian Watson and his firm Northstar Commercial Partners, three years after Amazon accused Watson in a lawsuit of paying kickbacks to two Amazon employees to secure contracts to develop data centers outside Washington, D.C.
In summary judgment rulings issued Thursday, U.S. District Judge Rossie Alston said that Amazon had failed to show how it was harmed by the payments to employees Carl Nelson and Casey Kirschner, particularly since Amazon continues to use the facilities Northstar developed.
“Amazon has not established that the kickback payments from Northstar to Nelson and Casey Kirschner led to increased costs to Amazon on the lease transactions or the direct purchase transactions,” Alston wrote.
Stan Garnett, an attorney representing Watson, said the judge’s order reflects the fact that the case is “just a business dispute” at its core, even if Amazon has tried to “turn it into something more sinister.”
“This changes the complexion of the case dramatically,” said Garnett, formerly of Brownstein Hyatt Farber Schreck and now of Garnett Legal Group.
Thursday’s rulings also ended all claims involving Arvada attorney Rod Atherton, making him no longer a defendant in the case. Atherton helped create corporate entities that the payments were funneled through.
Watson isn’t entirely in the clear. Alston allowed two claims against him to proceed. A three-week trial is slated to begin May 1 in northern Virginia, although Thursday’s order may alter those plans.
“I think this is going to result in some dramatic downsizing of the trial,” Garnett said.
“We remain confident in pursuing the case given the extensive amount of evidence,” an Amazon spokesperson said.
The rulings come one month after two individuals linked to the payment scheme — Christian Kirschner, a longtime friend of Watson, and former Northstar executive Kyle Ramstetter — pleaded guilty to one criminal count each in connection with it. Another ex-Northstar executive and a former Amazon employee appear poised to also plead guilty criminally in the next month, according to federal court records.
Amazon’s civil lawsuit is separate from the government’s criminal investigation, although the defendants have accused Amazon of lobbying prosecutors to bring charges and said the case highlights the close relationship the tech giant has with the U.S. Justice Department.
Amazon has suggested that Watson or other individuals could still be charged, saying in court documents it believes the government’s criminal investigation is ongoing. Garnett said Watson does not expect to be charged.
Amazon sued Watson in April 2020 over what the company called “a significant fraud and kickback scheme.” Amazon said it was initially alerted to the scheme by an email sent to Jeff Bezos in December 2019 by a man who had previously worked for Northstar.
The email at right was sent to Amazon CEO Jeff Bezos in December 2019. (Courtesy Amazon /court records)
According to court records, after winning contracts to develop and lease data center buildings to Amazon, Watson and his firm paid $5.1 million to a trust controlled by friend Christian Kirschner. Kirschner had introduced Watson to his brother Casey Kirschner, who along with his boss Carl Nelson worked in real estate for Amazon. The bulk of the payments to the trust were then passed on to entities controlled by Casey Kirschner and Nelson.
Watson has maintained that the payments he made to Christian Kirschner were referral fees that compensated Kirschner for helping Northstar land business, and that such fees are common in the commercial real estate industry. He has maintained that he did not direct or intend for a portion of those fees to be paid to Casey Kirschner or Carl Nelson.
Judge Alston didn’t directly address that position in his order last week.
Separately, Casey Kirschner and Nelson also received payments in two situations where Amazon purchased land in northern Virginia. Watson wasn’t directly involved in those deals, although one was completed by Ramstetter and fellow Northstar executive Will Camenson without their boss’ knowledge.
Watson was angry upon learning about the side deal, and Nancy Rice, a retired chief justice of the Colorado Supreme Court, was brought in to help broker a settlement, court records show. Ramstetter and Camenson paid Watson $5 million of their profits, and the pair left Northstar.
By May 2022, when Amazon amended its lawsuit for the third time, the company alleged eight claims of wrongdoing against the defendants, notably fraud and racketeering. Alston rejected both of those claims on Thursday in part due to the failure to show injury.
Of the two Amazon claims that survived, one is tortious interference, which states that Watson’s payments interfered with the employment relationship between Amazon and Nelson and Casey Krischner. The second is civil conspiracy to engage in tortious interference.
Garnett noted the case was filed in the early days of the COVID pandemic, when it was hard to jump on a plane and in-person hearings weren’t really possible. Discovery didn’t start until nearly two years in. In late 2021, the Wall Street Journal published a front page story noting that the wife of the judge assigned to the case at the time owned Amazon stock (he later “reluctantly” recused himself). A receiver was appointed to oversee the finances of Watson and his company; the two men repeatedly clashed, including over whether Watson could get a new car.
By issuing summary judgments on six of Amazon’s claims in the case, not all of which involved Watson, Alston essentially said that Amazon’s arguments weren’t strong enough to be heard by a jury.
“There’s been a lot of unusual aspects to this, including how vigorously Amazon has pursued these claims,” Garnett said.
Garnett said he doesn’t quite know why the company, in his mind, put in “effort that was disproportionate to what happened.”
“Sometimes cases like this take on a life of their own,” Garnett said.
In 2018, Watson was the Republican nominee for Colorado state treasurer. His life is now drastically different. Northstar has said in court documents it’s down to two employees from approximately 40. The company has unloaded many of its assets, and Watson has sold his 20,000-square-foot mansion in Cherry Hills Village.
Last August, Watson was charged civilly with securities fraud by the U.S. Securities and Exchange Commission. That case, which does not relate to the Amazon development deals, is ongoing. Also last summer, Watson filed to divorce his second wife, whom he married in late 2019.
“This has been a very difficult three years for Brian,” Garnett said.
Other defendants have similar stories. Nelson’s wife Amy has been outspoken on social media about the impact on the couple and their four daughters, particularly the resulting legal bills, which she says forced the couple to liquidate retirement savings, sell their Seattle home and move close to family in Ohio.
Amy Nelson is founder of the startup The Riveter, which prior to the pandemic operated women-oriented coworking spaces in multiple cities, including Denver. In connection with the criminal investigation, the federal government seized hundreds of thousands of dollars from the couple in 2020, only to return the bulk of it in early 2022.
“Every single day, the financial stress of this eats at me,” she recently told the Seattle Times.
