Since 1992, the city of Austin has spent more than $2.4 million on litigation related to the Save Our Springs Ordinance and water quality-related bills passed by the Texas Legislature. Nearly all of that money was paid to 10 different law firms, which charged hourly billing rates ranging from $120 per hour to $350 per hour, according to documents provided to the Chronicle under the Texas Open Records Act. The actual cost to the city is probably far higher, but the city could not calculate how much time its own in-house lawyers have spent dealing with the legal battles.
Meanwhile, Mayor Kirk Watson defends the city’s spending on legal fees in past years. “It is sad that the citizens of Austin are put in a position where they have to spend that kind of money,” he says. But he points out that the city continues to win in court, and that those victories allow the city to exercise its power to regulate water quality in environmentally sensitive areas of the city. Watson further adds that the city won both of the lawsuits it brought at the district court level in its effort to overturn two Austin-bashing bills – SB 1017 and HB 3193 – passed in 1995. The courts are saying that “there’s a violation of the law,” says Watson. “And I feel a sense of obligation to test those laws.”
All of the outside legal bills are paid out of the city’s general fund. Last year, the City Council made an emergency appropriation of $750,000 to cover additional outside legal counsel, which included money to fight the water quality lawsuits. How much more will the city have to pay in legal costs to fight the current lawsuits? “It beats the heck out of me,” says City Attorney Andy Martin.
In the new proposed budget, city lawyers are asking for $6,177,761, although last year’s amended legal budget was nearly $6.9 million. While the law budget usually includes $500,000 each year to cover outside litigation costs, this year’s figure is trimmed to $252,886, though city legal staffers are trying to restore the amount to the usual $500,000.
Here’s a rundown of water-related lawsuits and their costs:
Quick et al v. City of Austin
November 1994 – a Hays County jury invalidates S.O.S.; July 31, 1996 – Austin Court of Appeals reverses trial court, reinstates S.O.S.; May 8, 1998 – Texas Supreme Court votes unanimously to uphold S.O.S.
Total outside counsel costs: $1,335,426. Additional fees for copying, consulting, and court reporters: $43,702. Of the total amount, the city paid $1,274,330 to the firm of Hilgers & Watkins; $8,031 to Hill & Ray (hourly rate $125); $2,616 to Fitzgerald & Majors (hourly rate $120); $26,719 to Ramey & Flock (hourly rate $350); $23,730 to Pamela Stanton Baron (hourly rate $200).
FM Properties Operating Co. v. City of Austin
October 1994 – the subsidiary of New Orleans-based Freeport-McMoRan files a lawsuit in federal court against Austin alleging the city’s treatment of its permit application was arbitrary and capricious. May 1995 – jury awards company $113,888 plus attorney’s fees; August 1996 – U.S. Fifth Circuit Court of Appeals reverses trial court.
Total outside counsel costs: $355,000 to George Donaldson & Ford (hourly rate $325).
City of Austin v. Southwest Travis County Water District
1995 – Rep. Robert Saunders, D-La Grange (now a lobbyist), passes a bill limiting Austin’s ability to control water quality on about 8,000 acres in and around the Circle C subdivision, the bulk of which is controlled by FM Properties. October 1996 – Austin files suit against the water district; August 26, 1997 – Travis County Judge Scott McCown rules Saunders’ bill, HB 3193, unconstitutional on three different grounds. “If laws can be passed to favor particular people or disadvantage particular localities, then – as the constitutional framers knew too well – private interest will prevail over the public interest,” wrote McCown. April 22, 1998 – the case is argued at Austin Court of Appeals. A decision is expected within weeks. Regardless of the court’s ruling, it will be appealed to the Texas Supreme Court.
Total outside counsel costs: $222,142, with $142,205 going to Karl Bayer (hourly rate $200); $67,261 to George Donaldson & Ford (hourly rate $200); $12,676 to Pamela Stanton Baron (hourly rate $200).
City of Austin v. Horse Thief Hollow Ranch, Ltd. et al and L.S. Ranch et al v. City of Austin 1995 – the Texas Legislature passes SB 1017, a bill written by Sen. Jeff Wentworth (R-San Antonio), allowing Freeport and other large landowners to create special water quality zones that exempt them from the city’s annexation and water quality laws; January 9, 1998 – city files suit against Horse Thief and the owners of several other zones; June 17, 1998 – Travis County District Court Judge Paul Davis rules SB 1017 unconstitutional. Defendants have appealed Davis’ decision directly to the Texas Supreme Court. In a related case, last October, FM Properties filed the L.S. Ranch lawsuit in Hays County. The suit was a preemptive strike by Freeport, which hopes for a court ruling that will say that SB 1017 is constitutional. The next hearing on the case is set for Sept. 4 in San Marcos.
Total outside counsel costs: $493,720. Of that, the city paid $275,392 to Scott Douglass & McConnico (hourly rate $350); $35,002 to Pamela Stanton Baron (hourly rate $200); $53,077 to Karl Bayer (hourly rate $200); $73,154 to Bracewell & Patterson (hourly rate $235); $24,535 to Mithoff & Jacks (hourly rate $350); $32,560 to George Donaldson & Ford (hourly rate $200). – R.B.
This article appears in August 14 • 1998 and August 14 • 1998 (Cover).