Several Arizona towns and school districts may finally have to pay attorney's fees in the Burke vs. The Arizona State Retirement System lawsuit, though only half the amount originally awarded.
Pima County Superior Court Judge Mike Alfred lowered the fees to about $3.7 million from $7.4 million and removed the four intervening school districts from the lawsuit Dec. 17, a ruling that could bring payment to the plaintiff's attorneys, John Battaile and Anne-Marie Brady.
"Oh, I'm hopeful they put some money together," Battaile said. "Needless to say we'd like them to pay."
Battaile and Brady, of the law firm Leonard Felker Altfeld Greenberg & Battaile, began litigating Burke in 1996, but since they took it on a contingency basis, in which the attorneys do not get paid unless they win, neither have been paid for their work on the case.
Normally, Battaile's fees would have been removed from his clients' winnings, but in this lawsuit those were retirement benefits and the state Legislature determined that the lawyers could not be paid from them.
Four school districts -- Tucson Unified, Sierra Vista, Sahuarita and Sunnyside -- had intervened in the lawsuit to keep from having to pay the attorney's fees because they had not been involved in the lawsuit prior to being billed.
The lawsuit was filed by James Burke, a retired optical science professor at the University of Arizona, who lost retirement benefits from the state Legislature when it eliminated one of the retirement system's plans. Burke and 835 other ASRS members shorted by the change had their accounts reimbursed as a result of the lawsuit, which was settled in April 1999.
While it has been a solution for the plaintiffs, their former employers -- state agencies such as school districts, towns and universities -- were required by state law, passed as part of the Burke settlement, to reimburse those accounts and also to cover the plaintiffs' attorney's fees.
The settlement funneled about $88 million into the plaintiffs' retirement accounts, of which $11 million was paid by their employers. ASRS used its contingency funds for the other $76 million awarded.
TUSD alone paid $930,000 for its part of the settlement and had been asked to shell out an additional $880,000 for the attorney's fees. With the new award, the school district owes about $380,000 in fees.
While the school districts can appeal the ruling, John RIchardson, who represented TUSD, said the five year legal battle is probably over for them.
"(The school districts) may say, 'Great, the amount's lower," Richardson said. "It's very possible they'll say we're done."
But the employers will not be billed until the state retirement system is finished fighting the amount awarded in attorney's fees, Assistant Attorney General for ASRS Fred Stork said.
Assistant Attorney General Paul Carter said it was too soon for a decision concerning appeal, but that the fees are still too high.
"(The ruling is) going in the right direction," Carter said.
ASRS is requesting the fees be set at $500,000, which would pay Battaile about $180 an hour for his work on the Burke lawsuit. The new fee award pays him about $1,300 an hour.
The retirement system has argued that Battaile's fees should be determined by an hourly rate rather than by a percentage of his clients' winnings, Carter said. Though the amount was reduced, Alfred calculated the fees by a percentage, the common fund method, a second time rather than by an hourly rate.
"By staying with this method I think that helps us," Carter said. "Sticking with common fund, it gives us more issues to appeal."
Though Amphitheater Public School District never intervened in the lawsuit, its governing board considered taking action in the case, Associate to the Superintendent Todd Jaeger said.
With the latest ruling, however, Jaeger said it is unlikely he would advise Amphi to take any action since it's share of the fees has been cut to about $60,000 from $124,000, but he hopes the state will continue to fight.
"It's one of those up-hill battles, it'll be interesting to see. I'm kind of thrilled to hear the state is considering appealing," he said.
The district has budgeted this year to pay the $159,000 it owes as part of the settlement, Jaeger said.
Nearly all $11 million of the settlement to be paid by employers has been paid, Stork said.