Atlanta Law Firm Charges To County Schools Top $1.7 Million

Monday, March 14, 2005

An Atlanta law firm that specializes nationwide in special education cases has charged the Hamilton County Schools over $1.7 million on a single case that is still ongoing.

The bill thus far from the Charles Weatherly law firm in the Deal autism case is at $1,742,636. Total taxpayer cost of the lawsuit is over $2.3 million counting pay for expert witnesses.

County Commissioner Larry Henry said he was advised the case could have been settled initially for $150,000, though county school officials deny that.

The same Atlanta law firm billed the Ravenswood School District in San Jose, Calif., $2.1 million at a time when the district was going bankrupt, according to the San Jose Mercury News.

The newspaper said Ravenswood paid for first-class travel and food for the Atlanta firm.

The Mercury News wrote, "Even as the Ravenswood school district tumbled toward bankruptcy, its former leaders allowed an Atlanta law firm to rack up $2.1 million in bills in less than a year, including first-class plane tickets and meals at some of the Bay Area's priciest restaurants.

"A Mercury News review found that the Weatherly Law Firm, hired last year to defend Ravenswood in a special education lawsuit, charged the district serving the Peninsula's poorest children what amounts to $420 per student -- 5.5 percent of its annual budget. A new school board replaced the firm in December with county counsel charging $30,000 a year."

Hamilton County school officials have been asked by Chattanoogan.com for details of the Weatherly law firm billings to the Hamilton County Schools and those have not yet been made available.

Hamilton County School officials did release details of the some $600,000 that has been paid for "legal experts."

Those include:

$1,052.50 expert witness fee Alisa Dror

$40,269.58 expert witness fee Autism Partnership

$188,747.50 expert witness fee Behavior Therapy

$167,888.84 expert witness fee Dr. B.J. Freeman

$12,900.00 expert witness fee Dr. Craig Kennedy

$74,632.47 expert witness fee Dr. David Rostetter

$50,850.00 expert witness fee Dr. Mitch Taubman

$2,800.00 expert witness fee Dr. Peter Thomas

$48,062.50 expert witness fee Dr. Ronald Leaf

$1,844.20 expert witness fee Dr. Susan Speraw

$1,586.00 expert witness fee Thomas Oakland

Expert Witness Total Expenses: $590,633.59

TRAVEL SUB TOTAL: $10,902.14

COURT REPORTING SUB TOTAL: $2,733.06
GRAND TOTAL: $604,268.79

The Hamilton County Schools spent overall on legal bills:

Fiscal year ending June 30 2002:
$411,209

Fiscal year ending June 30 2003:
$1,648,224

Fiscal year ending June 30 2004:
$398,009

Fiscal year ending June 30 2005:
$331,624

The county schools said $419,579 should be deducted from the 2003 amount and $302,277 from the 2004 amount for IBNR items. Officials said, "According to Generally Accepted Accounting Principles, we have to set aside reserve money for possible claims. This is referred to as IBNR. If the possibility of those claims goes away, then we have to decrease the amount of money in those reserves. This has an effect on legal expenses."

Legal payments were:

2002

Chambliss, Bahner and Stophel $212,374
Philip and Maureen Deal $12,872
Weatherly law firm $165,993
Leitner, Williams and Dooley $17,136
Court Reporter Services $1,510
All Others $1,322

2003

Chambliss, Bahner and Stophel $165,405
Philip and Maureen Deal $1,882
Weatherly law firm $1,418,1863
Leitner, Williams and Dooley $49,567
Court Reporter Services $9,815
All Others $3,367

2004

Chambliss, Bahner and Stophel $133,650
Weatherly law firm $79,043
Leitner, Williams and Dooley $164,736
Court Reporter Services $3,982
All Others $16,597

2005

Chambliss, Bahner and Stophel $94,890
Weatherly law firm $79,414
Leitner, Williams and Dooley $139,174
Court Reporter Services $4,274
All Others $13,871

In addition, attorney Ward Crutchfield is paid an annual salary of $53,985 as the school board attorney.

Scott Bennett, of the Leitner, Williams and Dooley firm, is listed as general counsel to the Hamilton County Schools staff.

The Mercury News also said of the Weatherly firm:

Former officials in the East Palo Alto-eastern Menlo Park district did little to check whether the time lawyers, paralegals and others spent on the lawsuit was appropriate. Nor did they question the roughly $135,000 in bills for travel and meals, including $40 room-service breakfasts for one and $468 of a $969 tab for a dinner for about 10 people.

Former Superintendent Charlie Mae Knight, who approved the bills, said she thought the firm's lead lawyer, Charles Weatherly, ``had been pretty frugal.''

"If he traveled first class, we didn't notice," she said.

In hiring the Weatherly firm, Ravenswood failed to require safeguards other public agencies often use, including setting a cap on expenses. The firm's contract did not get a mandatory county review before Knight signed it -- a lapse she blamed on a secretary. Had that review occurred, county lawyers say Ravenswood, which has a $38 million annual operating budget, probably would have been warned that the contract could bleed it dry.

Defending the charges

Weatherly, who is widely known for his work in special education law and has a national client base, had explanations for nearly all of the questionable charges involving travel and meals. But he said no one in Ravenswood had ever asked him about them before.

``We were constantly aware of costs, but the litigation was not going to stop,'' he said.

The charges included:

• $99,800 for air fare. At least 20 of 78 tickets were first-class, and 50 of them cost $1,000 or more. Round-trip tickets from Atlanta were as expensive as $2,584, and one-way tickets as much as $2,128.

• $14,917 for 250 meals, including at least 23 charges for room service and 49 meals of $100 or more.

• $2,629 at the Swisso^tel in Boston, where lawyers met with a special education expert. The rate during most of their stay was $349 a night per room.

The firm's single biggest bill for meals was $468 of a $969 June 11 dinner at San Mateo's Kingfish, where the specialties of the house include the ``Full Throne,'' a $40 plate of ``oysters, Dungeness crab, prawns and ahi tartare.''

Weatherly said he only charged the district what he considered to be a reasonable amount for a meal that fed about 10 people, and he paid for his own alcohol. He said he normally does not charge a district more than $30 per person per meal.

Although the district paid the invoice that had the Kingfish receipt attached, Knight and two board members said they were not aware of the charge until the Mercury News brought it to their attention. Their reactions:

``If you tell me he had a $900 bill and he only billed the district $400, that's pretty generous,'' Knight said.

Lois Frontino, a board member who lost her seat in November, added, ``Well, geez, I wish I'd been there, too.'' She said she would ``review some of these things if we did it over.''

And Chester Palesoo, one of two current board members in office when the firm was hired, had this to say: ``What do I think? They need to eat. If they don't want McDonald's, they don't want McDonald's. That's the way it goes.''

Knight's 17 years as superintendent were marked by controversy, including allegations of cronyism and mismanagement. Reform school board candidates ousted some of her supporters in November, and she was put on paid administrative leave immediately after the new board took office. The board has made clear it cannot afford to buy out her $150,000-a-year contract, and she remains on leave.

Ravenswood hired Weatherly and his associates in February 2002 to prevent U.S. District Court Judge Thelton Henderson from ordering a state takeover for its special education failings.

In financial jeopardy

Now that the district has new leaders, a takeover is no longer under consideration in the case. But, after paying the Weatherly firm $2 million between March and November 2002, Ravenswood is teetering on the brink of a takeover for financial reasons.

Ironically, the district needs exactly $2 million a year to improve its special education program and get itself out of trouble with the judge.

``I think I'm going to be sick,'' said new board member Marcelino Lopez, when presented with a Mercury News review of all firm invoices from March 28, 2002, to Jan. 6.

By law, Ravenswood must keep 3 percent of its budget in reserve, or $1.1 million. Reserves are now at 0.3 percent. If the district becomes insolvent, the state will probably take over.

As Ravenswood weighs laying off teachers, Weatherly continues charging it for time defending his own conduct. Henderson has launched a probe investigating, among other things, whether he racked up bills unnecessarily.

In addition to the $2 million paid between March and November 2002, Weatherly submitted $122,246 in bills the district's new leaders have not paid.

Of the total $2.1 million Weatherly has billed Ravenswood, $1.5 million was for hours clocked by lawyers and paralegals at rates of $50 to $295 an hour. Those rates are comparable to what other lawyers in his specialized field earn.

An additional $322,897 was charged for expert witness fees and their travel expenses. Then there was $17,356 for Federal Express and postage and $130,430 for photocopies and binding.

Weatherly's contract said the district would cover ``various out-of-pocket disbursements, including travel expenses.'' It made no mention of meals.

``We didn't get down to the details of saying you could only eat at Denny's,'' Knight said.

Many meals billed to Ravenswood -- where nearly every student is poor enough to qualify for free or reduced-price lunch -- included food for multiple attorneys, paralegals and experts, occasionally at some of the Bay Area's best restaurants.

Weatherly said room service was often necessary while he and his associates worked in their hotel suite, meeting with experts and others. While in the Bay Area, the lawyers stayed at a suite at the Burlingame Doubletree. Records show that tens of thousands of dollars were billed directly to Ravenswood, in addition to the firm's fees.

Other billing practices

Other lawyers handle expenses differently.

Pasadena lawyer Urrea Jones, who has represented Ravenswood on a variety of issues, including special education, pays for air fare himself.

Maree Sneed, a Washington, D.C., education lawyer who has represented San Francisco and Fresno schools, has high regard for Weatherly and said it makes sense that a district in Ravenswood's situation would have hired him. She said the districts she represents cover her travel and meals, often without setting caps, but she is vigilant about costs.

For instance, she said she has her secretary search for the lowest possible air fares. She takes flights with connections to save money and does not bill for travel time.

Weatherly, who often uses a travel agent, only flies non-stop on Delta, and does charge for travel time.

He said his air fare often was automatically upgraded to first-class because he flies so frequently. He flew first-class at least 14 times and coach six times. The paralegals always flew coach.

Weatherly blamed many of the pricey tickets on Ravenswood, saying the district would ask him and his associates to fly out at the last minute, and they did not stay for the weekend -- a requirement for many reduced-rate fares.

Other school districts, such as Knox County, Tenn., have faced criticism for paying Weatherly's high fees. But they have vehemently argued that he actually saves taxpayers' money in the long run. His firm specializes in cases where children and their families claim districts should pay for expensive special education services or private school placements. The districts argue that paying for a special service once sets off a chain reaction, where other parents ask for the same thing.

Ravenswood's class-action lawsuit, filed in 1996 on behalf of disabled children, has been long and costly. An earlier Mercury News review showed the district paid more than $425,000 to lawyers from 1999 to 2001. But fees skyrocketed after Henderson held the district in contempt in August 2001 for failure to improve, and lawyers for children and the state asked him to order a takeover.

Last November, while the two sides were trying to settle the contempt charges, voters elected a new school board majority that vowed to reform special education. Just before the leadership change, Weatherly filed court papers including a proposed settlement -- despite the judge's order to wait for the new board to take action. Weatherly said it was important to show how much progress had been made.

Henderson blasted the move as politically charged, launching a disciplinary probe against Weatherly. Among the concerns the judge cited: ``needless increase in the cost of litigation.''

Outstanding bills

The bills Ravenswood's new leaders have not paid include at least $12,543 for time Weatherly has spent defending himself and the partial cost of dinner at San Francisco's posh Gary Danko, a Mobil guide five-star restaurant requiring reservations two months in advance.

Although he said he paid for his own alcohol, the Ravenswood bills include a $27 bar tab. Weatherly acknowledged that submitting that bill was a mistake.

Ravenswood's new superintendent, Floyd Gonella, said he has no intention of recommending that the school board give the Weatherly firm another cent -- and will do whatever he can to get back money already paid.

``In 28 years as a superintendent, I have never experienced such outrageous costs,'' said Gonella, who previously served as superintendent of San Mateo County schools and the Jefferson high school district. ``The amount taken away from the little kids of Ravenswood is unconscionable.''


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