In School Finance Battle, Legal Fees Accumulate

If the Texas school districts that are challenging the constitutionality of the state’s school finance system ultimately prevail in their lawsuit, a result could be billions of dollars in extra funding from the state’s coffers for public education.

And more than $8.5 million would also go from the state to the four teams of lawyers representing them. Late last month, state district Judge John Dietz of Austin ruled in the districts’ favor, saying the Texas school finance system leaves school districts without the resources to meet the state’s academic standards. Among the evidence he cited in his findings was the “dismal” performance of poor and English language-learning students in Texas compared with their peers; the 100,000 students not on track to graduate high school on time and the high remediation rates of students who go on to college. The state plans to appeal the ruling.

Dietz also ordered the state to pay for the plaintiffs’ legal tab, which has surpassed $8 million, along with additional costs as the case goes through the appeals process.

The award came over protests from the state, which raised a number of objections, including paying for travel costs for lawyers and witnesses coming to Austin from across Texas. The trial, which lasted a total of 55 days and involved more than 90 witnesses, ended in early spring.

But Dietz said it was “equitable and just” to award the fees, which did not include time spent by the districts’ legal teams on public relations or legislative matters unrelated to the litigation. Dietz said that travel expenses were not excessive.

“The litigation involves districts from across the state with different interests and perspectives. It is entirely predictable and necessary that plaintiffs’ counsel would be drawn from across the state,” he said in his ruling.

The total cost to the state in the litigation — which followed lawmakers cutting almost $5.4 billion from public education in 2011 — is unclear. The sum that Dietz awarded comes on top of the state’s own expenses in defending the lawsuit, which a spokeswoman for the Texas attorney general’s office said the state had not calculated.

But if the state ends up paying the districts’ legal fees, that money would probably go back into the districts’ local budgets. Though arrangements vary among the four groups of districts that are parties in the lawsuit, their lawyers said they intend to return any money they receive from the state to cover their costs.

“If we ever do recover our fees, we simply refund the districts,” said David Thompson, a Houston attorney representing the largest group of school districts in the case.

When school districts joined Thompson’s lawsuit, which includes about 80 from across the state, he said each agreed to pay a dollar per student, with a cap at $65,000, annually for two years.

School districts that joined a separate coalition in the lawsuit, led by the Equity Center, a research and advocacy group that represents low-property-wealth schools, were also asked to contribute a dollar per student.

But that included the caveat “that any amount, including zero dollars, would be acceptable if that’s what a district needed to do,” said Wayne Pierce, the director of the Equity Center. That initial collection was enough to cover the first round of the trial that began in October 2012, Pierce said, but not the second session that Dietz called after the 2013 legislative session.

At that point, Pierce said, the group asked districts to make a second contribution of 50 cents per student. Now, he said, the group should have enough to cover the expected appeal.

Disclosure: J. David Thompson is a partner in Thompson & Horton, which is a corporate sponsor of The Texas Tribune. The Equity Center was a corporate sponsor of The Tribune in 2010. A complete list of Texas Tribune donors and sponsors can be viewed here.