A recent Texas Lawyer story, “Question of Constitutionality of Firm’s Flat Fee Contract,” reports that a school district board of trustees facing a takeover by the Texas Education Agency (TEA) entered a $300,000 flat-fee contract with a law firm to challenge the takeover.  Now the TEA wants to know: Is that legal?

In a letter on New Year's Eve, the TEA asked for an opinion from Texas Attorney General Ken Paxton about whether the board's agreement with the law firm is "an unconstitutional gift of public funds" under the Texas Constitution.  Michael Williams, who was the commissioner of education at the time but has since retired, wrote in the letter that he appointed a board of managers to replace the school district's old board of trustees.

Before he replaced the trustees, the board entered the flat-fee contract.  The law firm in question normally works for $400 per hour, which means the flat fee would cover 750 hours of work.  If the firm worked more it would bill more, but if it worked less it would not refund the leftover fee.  After execution of the contract and payment of the $300,000, the TEA board of managers assumed control of the school district.

Williams argued in the letter that the contract amounted to an unconstitutional gift of public funds because the trustees lost authority to direct the litigation, and they wouldn't be able to make sure the firm was accomplishing a public purpose.  He claimed the fee benefited individual trustees rather than the school district and that there was no public benefit to the lawsuit since the district had been academically or financially unacceptable since 2010.  He wrote that the flat fee was a "windfall" to the firm if it worked less than 750 hours.

Williams asked, "In this case, if the law firm billed 200 hours prior to severance of the contract, and did not refund the unspent public funds to the district, would that violate the constitution?"

A Nov. 30, 2015 article by the news service i45NOW reported that the La Marque ISD board of trustees had voted unanimously to retain lawyer Chris Tritico to represent the district for $300,000.

Courthouse News Service reported Dec. 17 that the school district and three board members had sued Williams, claiming that he retroactively applied new finance rules that caused the district to lose its accreditation and close down.  The lawsuit requested a temporary restraining order to stop appointment of a board of managers, but a judge denied the TRO, said the article.  Tritico represented the plaintiffs.