Amid spiking legal costs, PPS changes legal strategy
This story has been updated.
After years of spending millions of dollars on lawsuits — many filed by its own employees — Portland Public Schools has a new approach to its legal woes.
The state's largest school district is changing up its cozy relationship with Miller Nash Graham & Dunn. The large multistate law firm has provided the majority of outside legal services to the school district for decades through a series of large no-bid contracts.
After the embarrassing publication of a slideshow bearing the name of one of the firm's attorneys that poked fun at students and parents, several members of the school board seem inclined to distance the district even further from Miller Nash.
The slideshow, which was to be presented Friday, April 6, at the National School Boards Association conference in Texas, featured representations of students as the demonic Chuckie doll and parents as Darth Vader.
Among the slideshow presentation's authors listed were Jollee Patterson, the Portland school district's general counsel for 16 years who moved over to Miller Nash in the wake of the 2016 lead-in-water scandal.
After an outcry on Facebook over the planned presentation, Miller Nash released a statement March 24 that the firm had nothing to do with the slides, and Patterson was removed from the presentation description.
Mike Porter, who leads the Miller Nash education team in Portland, reiterated in an interview that the law firm was not involved in the presentation's creation. He said he was proud of the work his team has done for PPS. Porter did not express concern that the district's longstanding and expensive relationship with the firm could end.
"I haven't heard it stated quite that way," Porter said. "I understand that large entities, like PPS, they use a variety of legal providers and we're pleased to be one."
Board members offended
Unfortunately for Miller Nash, the law firm's denial of involvement doesn't seem to have placated some members of the Portland school board, who remember what it was like to face off against the district when they were just parents.
"Having been a parent for 18 years in PPS, I know that parents — myself included — and their concerns have been dismissed in many instances," said school board Chair Julia Brim-Edwards, who began her current term last summer. "The presentation confirmed what some parents think happens when they raise legitimate issues concerning their students."
Patterson said in an interview that she disagreed with the slides and went so far as to cancel her involvement in the conference. "I did not create or prepare those slides," she said. "They don't reflect my values or how I think about students or parents."
Mike Rosen, another board member who felt frustrated as a parent trying to engage with the district, called Miller Nash's statement on the slideshow "completely unsatisfying."
The slideshow, Rosen said, "seems so specific to PPS, I have trouble believing" the firm wasn't involved in its creation.
"I'm really disappointed in Miller Nash," Rosen said. "I think (the presentation) sends a strong signal that you 'manage' parents, you don't listen to them."
Diversifying legal talent
Even before the slideshow controversy, Miller Nash had been facing new competition at the public agency.
The district is engaged in 15 lawsuits in various stages and Portland Public Schools' legal department is now led by a new lawyer, Liz Large.
Large is not a district employee, but a contractor through the Office of General Counsel Network, a company she started Sept. 16. As attorneys go, she's relatively affordable. Her $85,000 three-month contract pencils out to about $150 an hour.
Miller Nash's hourly rates — which they say are discounted to public agencies, but won't say by how much — range from $200 for a paralegal's time up to $365 for a senior counsel or partner.
School board co-Vice Chair Rita Moore, who asked for an audit of PPS legal costs last fall, found that the district was consistently over budget on outside legal costs during the past six years.
In the last fiscal year, the district spent $1.7 million, almost $1.4 million more than it expected. Miller Nash took the lion's share of those costs at $1.5 million.
The large law firm has been given no-bid contracts on legal services under the argument that the district needed consistent and confidential representation. But now, to try to save money and get through a backlog of cases, the district has begun diversifying its outside legal counsel to 16 different firms, using a bidding process for employment cases.
"Over-reliance on one firm is not a healthy model and does not encourage competitive pricing," Brim-Edwards said. "I believe Portland Public Schools and our community are better served by having the ability to access diverse, competitively priced, high quality legal services."
Sued from within
In a district with a massive labor force — and which has been frequently criticized for lax human resources policies — perhaps it's not a surprise that many defense expenses and payouts are to its own employees.
"The very, very big number for legal services is associated primarily with employment cases," Moore said. "PPS has been in many, many ways a dysfunctional organization and that's going to show up in employee grievances."
While expanding the number of outside law firms it gives its business to, the district has also expanded its in-house legal team. In 2012-13 there were the equivalent of 2.5 legal department employees, but this year there was a $1.2 million budget for 7.5 legal staffers. The budget also calls for nearly $1 million for outside counsel.
In addition, the district has settled seven cases in the past year to the tune of more than half a million dollars (see sidebar on the front page).
That doesn't include the $1 million jury award from last May in a racial discrimination case that the district continues to fight, or a potential payout to former Interim Superintendent Yousef Awwad, who announced in January that he would file a lawsuit for wrongful termination.
Another change seems to be higher liability insurance premiums. The contracts with Genesis Insurance Company show the district is paying twice as much this year for its liability coverage as last year.
The contract, signed July 19, says the district is paying $398,379 for its $10 million-per-occurrence liability coverage. Last year it was nearly half that —$214,949 — for the same amount of coverage per incident, though the district had a higher deductible of $1 million. Now it is self-insured for just the first $500,000.
Moore said she strongly believes that things are improving under Superintendent Guadalupe Guerrero and Interim General Counsel Large, meaning that in time taxpayers will see more education dollars going to classrooms and fewer to litigation.
"As the organization becomes healthier — and I expect that it will — I would expect these numbers to go down," Moore said. "But there's going to be a hangover."
Recent PPS payouts to settle legal claims
The total amount of settlements in the district from April 2017 to this week total $504,710. This does not include a $1 million jury award that is being appealed.
• $5,000 for school psychologist Theresa Seeley, who filed Oct. 15, 2015, on claims of deprivation of due process and free speech, disability discrimination, and whistleblower retaliation. our previous coverage
• $210 for paraeducator Joyce Moore, who filed Aug. 17, 2017, for back wages, penalty wages, and attorney fees. Read our previous coverage
• $71,500 for former Grant athletic director Brian Samore, who filed April 7, 2017, claims of deprivation of procedural rights, defamation, false light and whistleblower retaliation.
• $53,000 total to former public records officer and paralegal Jeanne Windham, who filed June 1, 2017, for back wages and overtime, based in part on her job reclassification as hourly nonexempt.
• $50,000 for Sarah Stevens for the benefit of pseudonym P.S., who filed June 12, 2015, a claim for failure to provide rudimentary first aid, resulting in possible permanent disability.
• $200,000 for former IT manager Kathryn Rosson, who filed Oct. 19, 2015, claims of racial discrimination and retaliation; gender and sex retaliation; whistleblowing; denial of due process; and wrongful termination. Read our previous coverage
• $125,000 for pseudonym CP in benefit for student PH, also a pseudonym. PH claimed Sept. 2, 2016, that paraeducator Brett Christy-Hamilton sexually assaulted her. He was found not guilty and also stated he intended to sue the district. Read our previous coverage
UPDATE (4/12/18): An earlier version of this story misstated the reason for higher insurance premiums. PPS is paying more in order to lower their deductible.