District Spends $532k on Lawsuit that Settles for $150k

What’s wrong with this picture? A school district spends $532,123 in legal fees and costs to fight a wrongful termination lawsuit; after more than 2 years of litigation, it ends up settling the case for $150,000.

According to an article in the Ventura County Star entitled “District spent $532,123 in lawsuit: Case is settled for $150,000, data show“, Assistant Principal Becky Romano had suffered a work-related injury in 2003 that required a long convalescence. In August 2004, Romano returned to work as assistant principal at Rio Mesa High School. The district then allegedly claimed Romano was physically unable to do her job and forced her out. In January 2006, Romano filed suit against the Oxnard Union High School District alleging wrongful termination.

According to the Star, Romano subsequently found a new job as a high school principal in the Santa Monica-Malibu Unified School District.

Romano’s lawyer, Allen Ball of Ventura, CA, claimed he was willing to settle the case for only $75,000 and had made “16 written offers” to mediate or arbitrate the case out of court. Ball accused the district’s lawyer, Dennis Walsh of Encino, CA, of refusing to settle in order to run up his bill. However, the district described Ball’s demands as unreasonable because they did not include all of the named defendants and therefore wouldn’t have ended the lawsuit.

When the Star made a California Public Records Act request to ascertain how much the district had spent in attorney fees fighting the case, the district refused. The Star then took the district to court. Judge Henry Walsh of Ventura County Superior Court rejected the district’s arguments and ordered the district to honor the Star’s information request. That is when the Star learned that the district had incurred legal fees and costs of a whopping $532,123.

People complain all the time about frivolous lawsuits and greedy plaintiffs. But what about the public tax dollars that are wasted putting up frivolous legal defenses to legitimate claims?

This clearly wasn’t a frivolous lawsuit by Romano. It had gone on for over 2 years, meaning it must have survived numerous legal challenges by the district. Moreover, frivolous lawsuits don’t settle for $150k. They usually get settled for peanuts; that is, if they don’t get thrown out by the court first on a demurrer or motion for summary judgment.

The district had termed Ball’s $75k settlement offer as “unreasonable”, but that is open to debate, considering what the district ultimately ended up spending to fight and then settle the case. More importantly, why didn’t the district take up Ball on any of his 16 written offers to mediate or arbitrate? Had the district done so, the case would very likely have resolved at or around $150k as it ultimately ended up doing. And the district would very likely have saved the taxpayers a bundle through early resolution of the dispute.

You might be wondering whether this kind of waste is an isolated occurrence. Unfortunately, it’s all too common. And why shouldn’t it be? Defendants and their lawyers have all sorts of reasons to delay settlement of meritorious suits:

1. It’s not their money, it’s the taxpayers’ and/or insurers’.

2. Defense lawyers bill by the hour so early resolution of a case isn’t business-smart.

3. Defendants think making an example of a plaintiff by using a scorched earth defense will scare off future claimants.

4. Defendants take the lawsuit personally and emotions get the upper hand.

5. Delay means the lawsuit gets inherited by the next administration.

6. Decisionmaking by committee makes the status quo (keep litigating) the path of least resistance.

You would think heads should roll at the district because of the waste of taxpayer dollars that resulted from the above. First of all, the only reason the district’s legal bill became public knowledge at all is because the Star had the resolve and funds to take the district to court and convince a fair-minded judge to side with them. Ninety-nine percent of the time, the public never learns how much money was wasted by a government agency fighting a meritorious claim. Second, the scandal fades into the noise of daily events and is quickly forgotten by the voting public and so nothing is ever done about it.

Perhaps a good first step toward addressing the problem would be to force government agencies to publicly disclose their legal defense bills. In order for that to happen, more people would have to be willing to make California Public Record Act requests for the information and, if refused, to take the agency to court, just as the Star did here.

And that means you.

If you’re interested in finding out more about CPRA requests, read the First Amendment Project’s handy CPRA brochure to get a quick overview. CPRA requests are actually easy to make and can even be made over the phone or by email. Taking the agency to court if it refuses is harder, though.