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Texas Attorney General Wants to Deny Lifting Abatement on Whistleblower Claims
As much news has circulated about a potential settlement between claimed whistleblowers and the Texas Attorney General, it has also provided resistance from Texas Legislature. “Legislature has little appetite to fund Ken Paxton’s settlement with whistleblowers,” per a March 13, 2023 publishing in the Texas Tribune.
However, on March 8, 2023, the claimed whistleblowers filed a “Respondents’ Motion to Lift Abatement.”
Whistleblowers State Settlement Timing was Related to Active Legislative Session
In the motion to lift the abatement, the whistleblowers state the following:
The premise for commencing settlement negotiations in January (at OAG’s invitation) and the very foundation for the Mediated Settlement Agreement (“MSA”) on file with this Court was that the Legislature is in session, and therefore any deal the parties might strike could immediately be presented for funding approval. Indeed, the MSA is expressly contingent upon funding approval.
Respondents’ joinder in the motion to abate—requested, drafted, and filed by OAG—was intended to briefly postpone any potential ruling on OAG’s petition for review while approval was sought this legislative session. That is why the parties assured this Court in the Joint Second Motion to Abate that “[s]hould the parties prove unable to obtain funding, they will jointly move the Court to lift the abatement order.”
But with uncertainty surrounding legislative approval, OAG has now reneged on the fundamental concept of a deadline by which this condition precedent must be met. In oral communications with Respondents, OAG contends that it has maneuvered Respondents into a GOTCHA position. If funding approval is not achieved this session, OAG says the case should remain abated until the 89th Legislature considers it in 2025. And if that Legislature refuses to approve it, OAG says the abatement should remain in place until the following session. And so on in perpetuity. OAG tells Respondents the case will never resume; they have given up their claims forever, even if legislative approval is not forthcoming. OAG thus reaps all benefits of a settlement, and Respondents achieve none.OFFICE OF THE ATTORNEY GENERAL OF TEXAS v. JAMES BLAKE BRICKMAN, J. MARK PENLEY, DAVID MAXWELL, AND RYAN M. VASSAR, RESPONDENTS’ MOTION TO LIFT ABATEMENT, Filed March 8, 2023, in the Supreme Court of Texas under Cause 21-1027
The Texas Attorney General Replies to the Whistleblowers Motion
The Texas Attorney General filed a response to the whistleblowers motion to reinstate the abated case. It was filed on March 20, 2023.
In the Texas Attorney General’s response, the following is highlighted:
former members of OAG’s senior staff, respondents knew and should have known that such approval would likely be controversial and could take at least one additional legislative session. After all, even apart from multi-million-dollar appro- priations, important pieces of legislation often must be proposed before session and can take multiple sessions to pass. And respondents also should have known that large settlements or judgments can lead to disputes: at least one high profile example of such a dispute arose during the tenures of at least three of the respondents.
Nevertheless, respondents agreed to a binding MSA “contingent upon all neccessary approvals for funding” without a timing provision. MSA ¶ 6. Respondents Motion to Abate should not be granted because it would thwart the Parties’ (or at least Petitioner’s) ongoing good-faith efforts to fulfill their obligations under the MSA. Absent the MSA, which Petitioner only entered contingent on abatement of further litigation, it will be impossible to secure funding for any settlement because there will be no settlement to fund. Moreover, OAG has not “reneged on the funda- mental concept of a deadline.” The MSA sets no deadline.OFFICE OF THE ATTORNEY GENERAL OF TEXAS v. JAMES BLAKE BRICKMAN, J. MARK PENLEY, DAVID MAXWELL, AND RYAN M. VASSAR, PETITIONER’S RESPONSE TO MOTION TO LIFT ABATEMENT, Filed March 20, 2023, in the Supreme Court of Texas under Cause 21-1027
The Texas Attorney General Claims the Whistleblowers Broke the Confidentiality of Settlement Discussions
As the short, nine page, brief continues, the Texas Attorney General makes claims the whistleblower blowers broke the confidentiality of the settlement discussions:
The motion is particularly concerning for at least two additional reasons. First, respondents misstate—and arguably break the confidentiality of settlement discussions regarding—what OAG contended in “oral communication” and its supposedly “craftier … written communications.” At no time has OAG suggested that it wishes to delay funding the settlement while simultaneously abating this litigation. To the contrary, by law, OAG is forbidden from using public resources “at- tempt[ing] to influence the passage or defeat of a legislative measure.” Tex. Gov’t Code § 556.006(a). It can, at most, “provide public information or . . . information responsive to a request.” Id. § 556.006(b). Petitioner has done what it can in that regard. See, e.g., Jack Fink, Texas Attorney General’s Office tells lawmakers they should fund $3.3M settlement in whistleblower lawsuit, CBSTexas (Feb. 21, 2023), https://www.cbsnews.com/texas/news/ken-paxton-whistleblower-lawsuit-fund- ing/. Beyond that, it is plaintiffs’ responsibility—as it has been that of many plaintiffs before them—to lobby in favor of legislation they would like to see passed, in this case funding a settlement, which can take more than one session. Indeed, even if they had a judgment in their favor, they (like every other judgment creditor) could only have that judgment satisfied by an appropriation from the Legislature.OFFICE OF THE ATTORNEY GENERAL OF TEXAS v. JAMES BLAKE BRICKMAN, J. MARK PENLEY, DAVID MAXWELL, AND RYAN M. VASSAR, PETITIONER’S RESPONSE TO MOTION TO LIFT ABATEMENT, Filed March 20, 2023, in the Supreme Court of Texas under Cause 21-1027
Texas Attorney General Claims Whistleblowers Wanted a Public Relations Campaign
The final part of the reply to the whistleblowers represents a claim by the Texas Attorney General the whistleblowers wanted a public relations campaign to influence the outcome of the settlement:
Second, rather than focus their efforts on securing funding for the MSA—as petitioner has done—respondents appear to be coordinating with the media in what can only be construed as a public-relations campaign to influence settlement discussions. See, e.g., Email from James Barragan, Texas Tribune, to OAG Commu- nications (Mar. 8, 2023 4:00 p.m.) (on file with author) (stating less than 2 hours after the conclusion of the most recent mediation session “I just was notified by plaintiffs’ attorneys that they have filed a motion to end the Supreme Court’s abatement.”). The Court should not countenance such behavior by allowing respondents to renege on their legal obligations.OFFICE OF THE ATTORNEY GENERAL OF TEXAS v. JAMES BLAKE BRICKMAN, J. MARK PENLEY, DAVID MAXWELL, AND RYAN M. VASSAR, PETITIONER’S RESPONSE TO MOTION TO LIFT ABATEMENT, Filed March 20, 2023, in the Supreme Court of Texas under Cause 21-1027
In summary, the Texas Attorney General has requested the Texas Supreme Court to deny lifting the abatement.
The Whistleblowers Reply to the Texas Attorney General’s Response
On March 27, 2023, the whistleblowers file a reply to the Texas Attorney General’s response to lift the abatement:
Respondents are not backing out of any obligation.
OAG claims that Respondents have a “newfound interest in backing out of their legal obligations under the Mediated Settlement Agreement (MSA).” Resp. at 1. This is false, and OAG tellingly does not identify what obligation(s) Respondents are allegedly backing out of. As stated in our motion, Respondents want to finalize the settlement. What Respondents have never been willing to do is abandon their case—via perpetual abatement—even if OAG never pays.
OAG’s arguments (at best) avoid the issue.OFFICE OF THE ATTORNEY GENERAL OF TEXAS v. JAMES BLAKE BRICKMAN, J. MARK PENLEY, DAVID MAXWELL, AND RYAN M. VASSAR, RESPONDENTS’ REPLY IN SUPPORT OF MOTION TO LIFT ABATEMENT, Filed March 27, 2023, in the Supreme Court of Texas under Cause 21-1027
OAG says “no timing provision can be imposed upon the Texas Legislature for any appropriation without running afoul of the Texas Constitution,” citing article VIII, section 8. Resp. at 3. First, that irrelevant constitutional provision governs assessment and collection of taxes on railroads. Second, Respondents have never tried to impose a timing provision on the Legislature. They have merely preserved the right to litigate their case if the current Legislature declines to approve consideration for the release of their claims.
Essentially, the whistleblowers claim they are still interested in settling, but do not believe they should have to wait years for a settlement to occur and because it is unknown how long it will take to receive funding, they wish to proceed through the judicial process in the Texas Supreme Court.
The Texas Supreme Court has not ruled on the motion to lift the abatement.
A Couple of Our Other Reads
You may be interested in our first publishing on the Texas Attorney General whistleblower lawsuit.
Or you may be interested in the point where not all whistleblowers were involved in negotiations to abate the Texas Attorney General whistleblower lawsuit.
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