Costs Of Oklahoma DHS Lawsuit Mounting

Associated Press

TULSA, Oklahoma (AP) -- Oklahoma taxpayers have spent about $4.2 million on attorneys since April 2008 for the state Department of Human Services to defend a class-action lawsuit alleging abusive conditions in the state's foster-care system, records show.

The suit was filed in February 2008 in federal court in Tulsa by Children's Rights. The New York-based nonprofit accuses the state of placing foster children in danger because of systemic deficiencies including too many cases per worker, not enough home visits, multiple placements and not enough foster parent training.

DHS is facing a shortfall in the next budget of about $39 million and is considering cutting staffing levels and changing the eligibility standard to receive child-care subsidies.

"It's unfortunate that funds have to be spent to defend the state against unmerited claims," said DHS spokeswoman Sheree Powell in an emailed statement.

"As long as Children's Rights continues making claims that lack merit, we must defend the state against them."

A contract for outside legal counsel was signed by Director Howard Hendrick in March 2008. It states DHS will be billed monthly with attorneys receiving hourly rates ranging from $180 to $200 an hour.

The DHS commission did not take a formal vote on hiring outside counsel or seeking bids for the services, although it receives periodic updates in executive session.

DHS has about three in-house attorneys from its legal division assisting with the lawsuit, Powell said. When the lawsuit was filed, the Oklahoma Attorney General's Office had 15 attorneys in its litigation division, she said.

The agency cited a "lack of resources" and a need for "resources available from a large firm with experienced counsel in this type of major litigation" in a July 2008 application to the Oklahoma Attorney General's Office for approval to hire outside attorneys.

Attorneys appearing on behalf of DHS in court have primarily been Bob Nance, who has served as an assistant attorney general and argued before the U.S. Supreme Court, and Don Bingham of Tulsa.

Children's Rights founder and Executive Director Marcia Lowry has represented her organization with assistance and attorneys also appearing from about four other listed legal firms in the state and internationally.

Invoices from the Tulsa-based Riggs, Abney, Neal, Turpen, Orbison and Lewis law firm show expenditures for 22,502 hours of work for about $3.94 million since March 2008. But "professional courtesy discounts" of about $391,608 are included as a credit.

In addition, about $577,609 is listed as "other" expenses. Powell said those costs include processing of more than 750 gigabytes of electronically stored information, producing more than 5 million pages requested in discovery and retaining expert consultants.

Two invoices from the Oklahoma City-based firm Crowe & Dunlevy sent in January and February total about $48,593. Powell said Crowe and Dunlevy is providing consultation and advice and not duplicating services already being provided.

Between July and December 2009, invoices for copy shop services total about $37,313, which was mostly for processing email exchanges between DHS workers.

In the past year, invoices have ranged from $68,700 in April 2010 to $290,700 in February, which is the highest monthly invoice submitted to DHS so far.

Powell said DHS has concerns about settling under a consent decree.

"History has shown that consent decrees entered by Children's Rights in other states have cost each state hundreds of millions of dollars and lasted for several decades," Powell said. "These decrees simply shifted highly contentious litigation from issues of liability to issues of compliance, contempt and federal court receivership.

"Many states have been forced to enter into ill-considered consent decrees, to the detriment of both taxpayers and the children in their care, because they did not have the resources to defend themselves or respond to overwhelming discovery requests."

Since 2005, more than $47 million has been spent on private attorneys and law firms performing services for Oklahoma agencies and boards, according to reports filed with the Attorney General's Office and in previous news reports.

DHS is among the top spenders, along with the Transportation Department, Grand River Dam Authority and universities.

This concern led to the proposal of the Legal Services Reform Act, House Bill 1223, which has passed the House and Senate and is awaiting approval of amendments.

The bill would require agencies to go through a bidding process after receiving approval from the attorney general. Also, all outside attorney contracts would have to be placed on the agency's website within four months.

At the close of each case, the attorneys would have to provide details such as hours, fees and expenses, and an hourly rate charge would be capped at $1,000.

Attorney General Scott Pruitt has said he appreciates the effort to step up transparency but is concerned about exemptions to the bill. A recently passed amendment would exempt higher education institutions, which is not provided under current law.

In a press release, Pruitt said such an exemption would be a "step backward" in keeping the public informed.

The class-action foster-care trial is expected to begin in October.