OC Board of Education and Department Ramp Up Taxpayer Spending On Internal Lawsuits

JULIE LEOPO, Voice of OC

The Orange County Department of Education in Costa Mesa on July 12, 2020.

Orange County’s education leaders have spent just over $2 million on lawsuits against each other in the last two years, and are set to spend nearly another $2 million more this year. 

The county Board of Education and Department of Education have butted heads for years, with their most recent spat over the board calling for students to return to schools without masks or social distancing turning into national news. 

Just three years ago, neither the board or department had any legal expenditures on outside counsel aside from settlement fees on old cases that were argued by their in-house counsel. 

Every year since then, spending on lawsuits has skyrocketed, with $660,000 in litigation costs in 2017 and another $1.3 million in legal spending the year after.. This year’s budget has the two sides ready to spend over $1.8 million. 

And no matter who wins in court, the taxpayers lose as they have to pay the legal bills for both sides. 

Altogether, the county’s elected education leaders have spent $4 million on litigation against one another and on any other external legal costs, according to the department’s financial records. 

That doesn’t include the department’s annual $2 million legal budget that offers counsel to the county’s school districts, or any lawsuits where the board and department are represented by their own internal legal counsel. 

Traditionally, the board and the department were represented by the same legal counsel, but due to their recent clashes, their in-house lawyer can’t represent either side in these cases. 

One of the suits revolves around $170,000 that the Board sought out to reallocate in the department’s 2019-20 budget, removing it from the travel and lobbying budget and calling it a waste of funding. 

Superintendent Al Mijares disagreed, arguing that the funds should be left in the account and that those dollars went towards important measures.

The department prepares the annual budget, and after a review in open session by the board it is sent on to the state. Mijares has argued that the board reviewed the budget improperly and that they only possess the power to approve or deny a budget without making line-item adjustments. 

“Since every activity we do is harnessed by dollars, that has the potential to defund programs at will,” Mijares said in a phone call with Voice of OC on Wednesday.

The board disagreed, stating that under state law they have the power to edit the budget and that one of their primary roles is to serve as fiscal overseers of the department. 

Due to the disagreement, the department failed to file a budget with the state by the required deadline. To adjudicate the argument, state superintendent Tony Thurmond created a three person panel with recommendations from the department and board to review both budgets and recommend which one should be adopted. 

That panel unanimously recommended the department’s budget, at which point the board chose to sue both the county and state education departments over the decision, stating the panel was not a legally recognized tool for ending the dispute.  

The suit is still ongoing, despite the fact that the department is no longer operating under that budget. 

Board President Ken Williams Jr., the senior member of the board majority who approved both lawsuits, declined to comment, referring reporters to speak with the board’s legal counsel due to the ongoing litigation. 

When asked about the importance of continuing the suit, board attorney Johnathan Brenner of Epstein, Becker & Green said that the outcomes of these suits would significantly affect the power dynamic between the board and the department for years to come. 

“This case is about the Board’s legal authority to determine and approve the county’s educational budget,” Brenner said in a written statement to Voice of OC. “This is an issue of substantial importance not only with respect to last fiscal year’s budget but also with respect to all future budgets and the process for approving and submitting those budgets.” 

The other suit revolves around the appointment of the board and department’s legal representation. The position is currently held by Jeffery Riel, who was previously general counsel for the Anaheim Union High School District. 

Mijares appointed Riel to the position after consulting with two members of the board in an executive panel. However, the board majority wanted Riel’s appointment to be an official floor vote, insisting they had the right to choose their own legal counsel. 

The board also took issue with the fact that Riel came from the Anaheim Union district, which at the time was engaged in litigation with the board, saying his work there had created a conflict of interest. 

The state education code states that “any county board of education or any county superintendent of schools may, appoint a legal counsel and fix and order paid the counsel’s compensation as an employee or as an independent contractor.” 

That same code says that the board and department must share the same legal counsel. 

The department received a ruling from the Orange County Superior Court on Dec. 30, 2019  that said Mijares did have the right to appoint the board’s counsel due to the “or” in the education code, but the case is still ongoing.

Riel is not directly involved in either suit between the two, but carries out the role of general counsel for Orange County’s school districts. The board has refused to recognize Mr. Riel’s authority, choosing to use the firm of Haight Brown & Bonesteel at public meetings as their counsel. 

The one thing both sides agree on is that the final decisions in these cases will fundamentally shape the power dynamic between the board and the superintendent going forward. 

When asked what effect all the lawsuits have had on the department, Mijares said that the split weighed heavily on the department. 

“Its drained the system. It has created far more work for our staff than they should be doing on these matters, instead they should be serving students and families. We’re doing that, but we’re paying a price too,” Mijares said.

 “It takes a big toll on our staff.” 

Both sides are also wrapped up in other outside litigation costs that are set to cost at least $400,000 combined in the next year. 

The board announced a lawsuit against Gov. Newsom at their July 28 meeting, but is being represented pro-bono by the law firm Tyler & Bursch. It remains unclear whether the board or the firm would pay the state’s legal fees should they lose the case, and it has not been officially filed in court. 

The board has also created a separate account of $350,000 in this year’s budget to pay outside legal counsel. The funds can only be accessed by a majority vote of the board, and were last discussed at a special meeting in July to potentially be used as payment for the board’s chosen law firm. 

The department is still wrapped up in litigation over a dispute with the Orange County Employees Retirement System that has cost the department over $2.2 million since 2015 in attorney fees and settlement costs. 

The department lost the initial case arguing whether they needed to pay the retirement system for over $3 million in retroactive fees, but is still engaged in litigation over whether to pay the other side’s legal fees. 

Noah Biesiada is a Voice of OC Reporting Fellow. Contact him at nbiesiada@voiceofoc.org or on Twitter @NBiesiada.