Paxton Response
Paxton Response
Paxton Response
21-1027
3/20/2023 7:10 PM
tex-73836779
SUPREME COURT OF TEXAS
BLAKE A. HAWTHORNE, CLERK
No. 21-1027
work toward fulfilling its obligations. The Court should deny the Motion to Lift
Abatement and allow the parties to continue to perform the terms of their agreement.
Two months ago, the Office of the Attorney General began settlement discus-
sions with respondents. The reasons for these conversations have repeatedly been
made public: to save the taxpayers money and to free Petitioner from the burden and
the distraction from its core functions in serving the people of Texas. OAG and the
Parties reached a resolution that effectuated these objectives. See Joint Second Mo-
tion to Abate, Appendix, OAG v. Brickman, No. 21-1027 (filed Feb. 10, 2023) (ap-
pending the MSA).
The parties successfully negotiated the MSA pursuant to Texas Civil Practice &
Remedies Code section 154.071 and Rule 11 of the Texas Rules of Civil Procedure.
As is customary, the parties agreed to formalize their agreement with a comprehen-
sive document containing all of the usual and customary terms of settlements of this
type, see MSA ¶ 8, and petitioner’s counsel has worked in good faith to do so. Even
before these terms are fully ironed out, however, the MSA is itself as legally enforce-
able as any other contract or settlement agreement. Texas Civil Practice & Remedies
Code § 154.071; Tex. R. Civ. P. 11; see also, e.g, Shamrock Psychiatric Clinic, P.A. v.
Tex. DSHS, 540 S.W.3d 553, 560 (Tex. 2018); In re Vaishangi, Inc., 442 S.W.3d 256,
259 (Tex. 2014); e.g., Kennedy v. Hyde, 682 S.W.2d 525, 530 (Tex. 1984).
Due to the amount of money to be paid in the settlement, respondents were in-
disputably on notice that special legislative approval was going to be required when
they entered into the MSA. Respondents concede as much in their motion. See Re-
spondents’ Motion to Lift Abatement at 1-2 (“[T]he 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 pre-
sented for funding approval.”). Additionally, the Constitution provides that “[n]o
money shall be drawn from the Treasury but in pursuance to specific appropriation.”
Tex. Const. art. VIII, § 8. And although the General Appropriations Act has typi-
cally provided for funding of relatively small settlements or judgments, the amounts
demanded by respondents far exceed that figure. See, e.g., Gen. Appropriations Act
§ 16.04, S.B.1 (87th Leg.) (2021) (allowing “payment or judgment [that] may not
exceed $250,000”); Gen. Appropriations Act § 16.04, S.B.1 (86th Leg.) (2019)
(same). Requests for special appropriations—particularly large appropriations—
typically must be made before the Legislature convenes to maximize their likelihood of
success.
As 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
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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. Com-
pare CR.7-9, with, e.g., Memorandum of Law in Support of Plaintiffs’ Motion Con-
cerning Enforcement of Order Awarding Attorney’s Fees and Costs, Whole
Woman’s Health v. Hellerstedt, No. 1:14-cv-00284-LY (W.D. Tex. Nov. 15, 2019).
And petitioner specifically explained in its briefing in this case that “ambivalence”
about requiring taxpayers to fund substantial whistleblower payouts, Neighborhood
Ctrs. Inc. v. Walker, 544 S.W.3d 744, 749 (Tex. 2018), led to a number of the limita-
tions on the Act itself, see, e.g., Petitioner’s Br. on the Merits 3-4 (discussing House
Comm. on State Affairs, Bill Analysis, Tex. H.B. 175, 74th R.S. at 3 (1995); 35 Tex.
Prac., County & Special District Law § 8.3 (2d ed.))
Nevertheless, respondents agreed to a binding MSA “contingent upon all nec-
essary 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. Indeed, no timing provi-
sion can be imposed upon the Texas Legislature for any appropriation without run-
ning afoul of the Texas Constitution. See Tex. Const. art. VIII, § 8. And whatever
time limitation respondents may try to read into the MSA, it is inconceivable that
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the Parties contracted to allow themselves mere weeks—and less than one half of a
single legislative session—to run the bureaucratic and legislative gauntlet that secur-
ing approval of the MSA will require.
The motion is particularly concerning for at least two additional reasons. First,
respondents misstate—and arguably break the confidentiality of settlement discus-
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.
Second, rather than focus their efforts on securing funding for the MSA—as pe-
titioner has done—respondents appear to be coordinating with the media in what
can only be construed as a public-relations campaign to influence settlement
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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 abate-
ment.”). The Court should not countenance such behavior by allowing respondents
Prayer
The Court should continue to abate the petition for review.
Respectfully submitted.
Lanora C. Pettit
Principal Deputy Solicitor General
Office of the Attorney General
P.O. Box 12548 (MC 059) William F. Cole
Austin, Texas 78711-2548 Assistant Solicitor General
Tel.: (512) 936-1700
Fax: (512) 474-2697 Counsel for Petitioner
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Certificate of Service
On March 20, 2023, this document was served electronically on Thomas A.
Nesbitt, lead counsel for plaintiff James Blake Brickman, via tnesbitt@dnaustin.com;
Don Tittle, counsel for plaintiff J. Mark Penley, via don@dontittlelaw.com; T.J.
Turner, counsel for plaintiff David Maxwell, via tturner@cstrial.com; and Joseph R.
Knight, counsel for plaintiff Ryan M. Vassar, via jknight@ebbklaw.com.
Certificate of Compliance
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Case Contacts