Michigan to pay DPS legal fees in sickout suit

Detroit Public Schools will not be on the hook to pay more than $300,000 in legal fees to sue two teachers for what the district claims was their roles in instigating massive teacher sickouts earlier in the year.

The Michigan Department of Treasury says it will foot the bill.

“Nearly $320,000 has been billed,” Treasury spokesman Jeremy Sampson said late last week. “DPS is reviewing the invoices and then they are sending them to Treasury for payment. Treasury is sending the money directly to Dickinson Wright.”

The revelation that the state would pay the bills came in an email to The News this week from DPS after the paper reported that the district had been billed more than $285,000 in legal fees by the Dickinson Wright law firm to pursue a lawsuit against ousted Detroit Federation of Teachers president Steve Conn and East English Village Academy High School teacher Nicole Conaway.

“The Michigan Department of Treasury is assisting the district with all legal fees associated with the teacher lawsuit,” wrote district spokeswoman Chrystal Wilson.

Later, Wilson told a News reporter the school district “has not paid a dime.”

Asked why the department is paying the legal bills, Sampson replied in an email, “Treasury understands the financial situation of DPS and have been assisting the district in many areas.”

Sampson did not respond to further questions about what areas Treasury is aiding DPS.

State lawmakers approved a $617 million rescue plan last month to pay off $467 million in district debt and establish a new, debt-free Detroit Public Schools Community District. The legislature acted after DPS Emergency Manager Steven Rhodes warned in May that the district would run out of money June 30 and be unable to pay teachers and other employees without an infusion of cash.

The legal fees began in January 2016.

Sampson said this payment is not out of the ordinary and cited the state’s emergency manager law. The Detroit school district has been run by a series of state-appointed EMs since March 2009.

“This was requested by Detroit Public Schools and we have been reimbursing the district’s legal fees consistent with PA 436,” he said.

Asked if, to his knowledge, the department had previously paid legal fees for a school district to sue teachers, Sampson said no.

But this does not mean that since the Department of Treasury is paying that it, in essence, is legally taking on the teachers, according to Len Niehoff, professor at the University of Michigan Law School.

“In my view, Treasury’s decision to assist the school district with its legal fees does not mean that Treasury is effectively suing the teachers,” he said. “The school district is the plaintiff in the case and will presumably remain the plaintiff.

“With that said, it is worth noting that nonparty funding of litigation has received a lot of attention in the last year or so. For example, people were surprised to learn that Silicon Valley billionaire Peter Thiel was helping to fund Hulk Hogan’s invasion of privacy lawsuit against Gawker. In some cases, nonparty funding of litigation can raise complicated policy and ethical problems.”

Conn and Conaway, who publicly urged teachers to join the sickouts, said Treasury’s plan to pay the district’s legal costs in the suit reflects what they see as an effort by Gov. Rick Snyder to silence dissident teachers and maintain control over the district.

Both oppose the rescue package passed with Republican votes and signed by Snyder. Under it, the Detroit Review Commission established during the city’s bankruptcy will have oversight over the new district’s finances, and DPS will have the option to hire uncertified teachers.

Conaway said she was “not very surprised” to learn the state will foot the district’s legal bill.

“Especially since this came from (Gov. Rick) Snyder’s office filing the injunction in the first place because of our opposition to his plans,” she said. “That’s why we were targeted and the other people were dropped from the case. The Treasury Department is directly under the governor’s control and it is in his political interest to try to stop us.”

“It’s just another financial shell game by Snyder and Rhodes to shore up their Jim Crow plans for Detroit,” Conn said. “But they’re going to lose in the end.”

When the suit was filed six months ago, DPS asked a judge to issue a restraining order and a preliminary injunction against teachers who engaged in alleged strikes, ordering them to stop the sickouts and return to work.

The original complaint named 23 DPS teachers, DFT interim president Ivy Bailey and others. The suit was eventually amended to exclude all but Conn and Conaway as the other defendants were dismissed.

During a May hearing on the district’s case, George Butler of Dickinson Wright told Judge Cynthia Stephens of the Michigan Court of Claims he was charging the district $475 an hour. Attorney Shanta Driver, defending both teachers, said she was working for free.

During a hearing July 8, Stephens said she would rule by July 24. John Nevin, a spokesman for the Michigan Supreme Court, said Friday that according to the Court of Claims, “there is no specific date scheduled for Judge Stephens’ ruling. It’s just forthcoming.”

slewis@detroitnews.com

(313) 222-2296