Over $10 Million in Attorney's Fees Awarded by Judge in School Finance Lawsuit

Over $10 Million in Attorney's Fees Awarded by Judge in School Finance Lawsuit

HOUSTON, Texas — The state judge in Austin, Texas hearing the school finance case has awarded plaintiffs approximately $10 million dollars in attorney’s fees. The award could be even higher depending on what kind of appeal is brought by the State. Judge John K. Dietz ruled that the award met the legal standard for attorney fee awards in Texas. He has ordered the fees paid by the State and other defendants as the non-prevailing parties. Judge Dietz ruled that the attorney’s fees are “reasonable and necessary” and “equitable and just.”

In his order, the judge awarded almost $8.5 million dollars in attorney’s fees for trial litigation, and overruled the State’s objections to reimbursing each plaintiff group for more than one attorney. The trial lasted 45 days and a judgment was signed in late August.

Judge Dietz denied reimbursement for non-legal fees for recruiting districts and public relation activities.

Legal fees for appeal were conditionally awarded. Over $1.5 million dollars was awarded to the various plaintiffs if the State seeks and obtains a direct appeal to the Texas Supreme Court. Approximately $2.125 million dollars was awarded in the event the State appeals to the intermediate court of appeals and then to the Texas Supreme Court.

The State has 30 days from the date of the judgment (August 28th) to file an appeal unless this date is extended by the filing of a motion for new trial. The State will not ask for a new trial if it thinks that there is no opportunity to prevail before the trial court judge. The State declined to file a motion for new trial during the last school finance lawsuit.

As it did before, the State is likely to take a direct appeal to the Texas Supreme Court. The other option in law would be to appeal to the intermediate court of appeals in Austin, and then after a decision by that court, appeal any adverse decision to the Texas Supreme Court. Even though the appellate process was expedited last go-around, it took almost a year for it to be completed.

A direct appeal limits the issues that can be brought but constitutional arguments can be urged. The Texas Supreme Court has discretionary review powers over both direct and regular appeals.

In the event the plaintiffs do not prevail on one or more of their claims on appeal, the judge ordered that an award of attorney’s fees would still be equitable and just. Dietz said he did so “because they have made significant contributions to the public debate on school finance law through this lawsuit.”

All attorney fee awards are ordered to bear interest at five percent interest compounded annually. Interest begins to run on the trial litigation fees from the date the judgment was signed, and on appeal from the date any appeal is perfected. 

Breitbart Texas talked to David Thompson of the Thompson and Horton law firm in Houston. Thompson and his firm is one of four groups that represent the plaintiff school districts. His firm represents the big urban/suburban school districts from all of the major cities in Texas.

Thompson said his firm charged their school district clients $1.00 per student with a cap at 65,000 students. Some school districts, like the Houston Independent School District, have over 200,000 students and there is a need for a cap.

The school districts paid Thompson’s firm in two installments. The payments cover the costs of experts and other fees. Thompson said that there is a committee of lawyers who review the bills.

The lawyers are paid up-front but the school districts get their attorney’s fees reimbursed after appeal.

The trial court judge signed an order staying recovery of the attorney’s fees until the appellate process runs its course.

Thompson said that the attorney’s fees will need to be appropriated by the Texas Legislature “like any other state bill.” He believes it is not likely that this will happen until the 2017 legislative session.

Thompson believes that the State will likely appeal just as it did during the last school finance fight. At that time the Texas Supreme Court sustained one of the claims finding it unconstitutional. Thompson said this led to significant revisions of the school finance system. The Legislature also appropriated the funds for the attorney’s fees that were awarded during the court process.

Late last month, Judge Dietz, ruled that the Texas school finance system imposed an illegal state property tax that is violative of the Texas Constitution. He found that it is unconstitutional because school districts do not have meaningful discretion over the levy, assessment, and disbursement of local property taxes.

The judge also ruled that the Texas Legislature has failed to meet the constitutional duty to provide adequately because the school finance system is structured, operated, and funded, so that it cannot provide a constitutionally adequate education for all Texas schoolchildren. He found that the Texas school finance system is unconstitutionally inadequate because it does not provide substantially equal access to the educational funds necessary to “accomplish a general diffusion of knowledge.”

Judge Dietz enjoined further funding under the system “until the constitutional infirmities are corrected.”

Lana Shadwick is a contributing writer and legal analyst for Breitbart Texas. She is a 22-year lawyer who has served as a judge and a prosecutor. Follow her on Twitter @LanaShadwick2.

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