AG's Office Warned Against Filing 'Punitive' Appeals

The Texas Attorney General's Office, as well as other public and private counsel, are now on notice to forego filing "unwarranted" and "punitive" appeals that cause economic duress for plaintiffs, according to an opinion handed down on Nov. 6 by the 5th Circuit Court of Appeals. The opinion involves a pending whistle-blower lawsuit against Gary Grief and the Texas Lottery Commission, for which the AG's office is serving as the defendants' co-counsel.

In May 2006, Shel­ton Charles, a former Texas Lottery systems analyst, sued Grief and the commission, claiming they retaliated against him for alerting lawmakers about data-recovery problems at the agency. According to the complaint, Grief fired Charles two days after he sent an e-mail to state legislators about serious problems associated with the commission's Disas­ter Recovery/Business Resumption Site, which was designed to house backup lottery data but which had never been operational, despite an investment of millions of dollars in commission funds.

Grief, now deputy executive director of the commission, moved for a summary judgment in the suit. When the U.S. District Court dismissed his motion – calling the defendants' arguments for summary judgment "odd" and warning that the 5th Circuit Court itself had held there is no matter more important than bringing government malfeasance to light – Grief appealed, which served to delay the lawsuit's progression through the legal system. The 5th Circuit decision means both sides may now prepare for trial on the original petition.

But the 5th Circuit not only denied Grief's appeal; they also wrote that the AG's office should have known better than to even file such an appeal, knowing that a district judge had affirmed that enough factual dispute existed for the case to move to trial. For that misstep, the justices issued a strident warning to private and public attorneys to be "chary to take appeals [in such cases], lest they incur penalties, sanctions, damages for ... frivolous appeals, or worse."

"I haven't seen such language in 25 years of handling such cases," said Charles' attorney Derek Howard of the opinion, which is scathingly articulate in its condemnation of the appeal. Ever since the appeal was filed, Howard has maintained that it was probably an attempt to wear down Charles financially. The justices agreed: "Considering the usual disparity in the financial conditions of the parties," the opinion states, "cavalierly taking such an appeal smacks of economic duress" and is "unconscionable."