Arkansas Department of Highways calls $18 million award for attorney’s fees ‘excessive’ and appeals to state Supreme Court

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The Arkansas Department of Transportation has asked the state Supreme Court to erase $18 million in attorney fees awarded in a lawsuit that successfully challenged the agency’s expenses for two major road construction projects, arguing in a brief filed Friday that “winning a lawsuit for unlawful abuse should not be the equivalent of winning the lottery for taxpayer lawyers.”

The price of $18,160,000 equates to an hourly rate of $30,616.20, or about $510 per minute, for 593.15 hours of work, according to calculations by attorneys the agency hired to represent it in the lawsuit. call, Kevin Crass and Kathy McCarroll of Little Rock. Friday’s firm, Eldredge & Clark.

“Such an exorbitant ratio has never been confirmed by the court,” they wrote in a 47-page brief. “In fact, the court found it far less excessive and unreasonable.”

The agency’s chief counsel, Rita Looney, and department attorney, Mark Umeda, were also credited for the brief.

The brief was one of two filed Friday against the award. Deputy Attorney General Vincent P. France submitted a 40-page brief. His office represents other defendants in the case, including Governor Asa Hutchinson.

France also objected to the charges, arguing that they were “extremely unreasonable and excessive”.

“This case did not create a substantial benefit to the state,” he wrote. “No new projects will be funded because of this litigation. Also, this case did not create a pooled fund that provided reimbursement to members of a class. Again, this case was resolved through adjustments accountants and nothing more.

And even if the state’s high court found the attorney’s fees were appropriate, the governor and other state defendants should not be required to help pay the fees, he wrote. .

“Here, the record is clear and undisputed that the Arkansas State Highway Commission and ArDOT were responsible for the expenditure of the I-630 Amendment 91 funds (Project CA0608 ) and the I-30 Crossing (Project CA0602), which this Court found to be an unlawful exaction,” France said.

Pulaski County Circuit Judge Chip Welch ruled from the bench in May that the legal team led by Joe Denton and Justin Zachary of the law firm Little Rock Denton & Zachary PLLC should receive 15% of the 121,109,391 $.84 that the Department of Transportation was to repay to the so-called Amendment 91 fund, or $18,160,000, under a previous ruling.

The team represents a group of ratepayers who sued the department and the other defendants in November 2018 for improperly spending proceeds from a 0.05% sales tax authorized by Amendment 91 to the US Constitution. Arkansas on highway projects that exceeded the four-lane limit specified in the amendment. . Voters approved the amendment in 2012.

The lawsuit focused on just the two of the projects receiving Amendment 91 money under the department’s Connecting Arkansas program, a $1.8 billion highway construction program focused on construction projects. regional importance.

It was 30 Crossing, a billion dollar project that will widen a 6.7 mile section of I-30 through downtown Little Rock and North Little Rock up to 10 lanes per locations, as well as the replacement of the I-30 bridge over the Arkansas River. ; and widening a 5.5-mile section of Interstate 630 west of Little Rock to eight lanes. Both segments already had six lanes.

Welch initially accepted arguments by state defendants that the language of the amendment was similar to terms department officials routinely employed when reviewing major routes and grouped them into the four-grid system. lanes, although some were wider than four lanes.

But the Arkansas Supreme Court overturned Welch’s decision and said that spending Amendment 91 money on those projects amounted to an “unlawful exaction” under the Arkansas Constitution and should be reimbursed because the wording of the amendment limited the money to highways or four-lane highways. which were to be expanded to four lanes, a notion the department vigorously contested. The high court returned the case to Welch.

In February 2021, Welch gave the Department of Transportation 60 days to refund the Amendment 91 account for $121 million, the amount of Amendment 91 money spent on the projects prior to the Supreme Court ruling. .

Transportation Department Director Lorie Tudor devised a repayment plan that involved making “journal entries” in which Amendment 91 money spent on the 30 Crossing and I-630 projects was allocated to eight other projects.

These projects were no wider than four lanes and had already been completed. Regular state and federal highway construction money that was spent on this work was applied to the 30 Crossing and I-630 projects.

Tudor testified that the changes were fair and would pass the scrutiny of state and federal auditors. A senior official in the state finance department offered similar testimony.

France said such paper shuffling underscored how excessive legal fees were.

“The respondents only got a Pyrrhic victory, but their attorneys got a windfall for themselves, which defeats the purpose of awarding attorneys’ fees,” France wrote, citing precedent. “Therefore, any attorneys’ fees awarded must be tempered by the fact that the outcome in this case was a technical accounting victory.”

Even if the defendants’ attorneys were entitled to attorney fees, they deserved fees ranging from $1 to $148,287.50, France said, citing a range he previously offered.

Both briefs argued that sovereign immunity protected the state from being forced to pay attorneys’ fees. The concept is found in Article 5, Section 20 of the Arkansas Constitution, which states that Arkansas “shall never be adjudicated in any of its courts.”

“Sovereign immunity prohibits any award of fees and expenses,” Crass and McCarroll wrote. “The common thread running through the Court’s rulings on sovereign immunity is that Article 5, Section 20 of the Arkansas Constitution prohibits a claim for damages – including attorney’s fees – against the State.”

At least, they added, “the Court should modify the award of trial court fees to reflect the total number of hours worked on the basis of a reasonable hourly rate.”

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