BATON ROUGE, La. (AP) — Lawyers for a Louisiana school board and a state teacher union could get a windfall of up to $20 million if successful in their lawsuit claiming the state's school funding formulas were not properly approved for three years.
The lawsuit seeks $200 million more in school funding than the state is providing.
Under its contract with attorneys, the St. John the Baptist Parish School Board could pay its lawyers up to 10 percent of an award in the case as a contingency fee.
Charles Patin, a lawyer with Kean Miller LLP who is working for the board, says the deal was structured with a percentage payout because the board didn't have cash for an upfront payment.
"St. John, like most school boards, is in dire financial straits," Patin said. "The only way they could bring the suit was in a contingency fee arrangement."
Also listed as plaintiffs in the lawsuit are the Louisiana Association of Educators and dozens of their local affiliates.
Trial is set for Jan. 10.
It's unclear whether the payment rate will stand, however. A judge isn't bound by the contractual arrangement if the lawsuit is given class-action status.
If Judge Michael Caldwell declares it a class-action on behalf of all Louisiana school boards, the court wouldn't be bound to follow the contractual arrangement in the St. John the Baptist case.
Attorney General Buddy Caldwell is reviewing the contract. Caldwell has come under scrutiny for his role in allowing a contingency-fee deal in a state levee board's lawsuit against oil and gas companies that seeks damages for years of wetlands erosion.
The school funding lawsuit stems from a Louisiana Supreme Court ruling earlier this year that declared the Legislature didn't properly pass the 2012-13 school funding formula. The ruling also invalidated the state's voucher program, under which public tax dollars pay tuition for students in failing school districts to attend private schools.
The St. John lawsuit claims that under the procedure outlined by the Supreme Court for passage of the formula, financing plans approved in 2010, 2011 and 2012 should be voided and school districts should be paid under a prior formula that included an annual funding increase to account for inflation.
Caldwell, whose office reviews outside legal contracts involving government agencies, has solicited opinions on the lawsuit fee arrangement from several groups that oppose contingency-fee contracts.
Melissa Landry, executive director of Louisiana Lawsuit Abuse Watch, a watchdog group, declined Caldwell's invitation, saying she's unsure why the attorney general would seek a meeting with third-party groups on the issue. Landry said her organization's opposition to such contracts is clear.
"Contingency fees are not an appropriate or efficient use of taxpayer dollars, especially when they are being paid to lawyers that were not selected through any kind of competitive or transparent public bid process," she said.
It's unclear what authority Caldwell has in the board's contracting arrangement. The attorney general's office refused to explain whether Caldwell could reject the contract or why he contacted anti-contingency fee groups.
"He's approved other contingency fee contracts of more than 10 percent. I don't know why he wouldn't approve this one," Patin said.
In the lawsuit filed against the oil and gas industry by a New Orleans-area levee board, Caldwell claimed he had no authority to reject a contingency fee arrangement as inappropriate if the fee falls within the range of legal fees regularly charged in lawsuits.