$70K or $700K: State Challenges Attorneys’ Fees in Transgender Rights Case
Judge ordered state to pay for litigation after Montana DPHHS, Attorney General’s Office refused to comply with order, earning a contempt of court hearing
By Darrell Ehrlick for the Daily Montanan
How many attorneys does it take to settle a four-year constitutional case?
That may sound like the setup to a joke, but it’s no laughing matter, and for now, the answer is unclear.
But however many attorneys, it’ll take at least one more to solve how much Montana taxpayers will be on the hook for the actions of the Montana Attorney General’s Office and the Department of Public Health and Human Services’ refusal to follow a court order to change gender markers on birth certificates.
On Monday, Yellowstone County District Court Judge Colette Davies spent more than three hours with the Attorney General’s Office, expert witnesses and the American Civil Liberties Union of Montana going over contested attorneys’ fees that the state has been ordered to pay in the case, which found the state in contempt because it refused to comply with a judge’s orders and unsuccessfully lobbied the Montana Supreme Court to take control over the case.
The case spun out of the 2021 Legislature and its passage of Senate Bill 280, which said that official state documents, like birth certificates, couldn’t be changed without an unspecified surgery or court order. A preliminary injunction was ordered in the case, and the State of Montana was later found in contempt because it had refused to comply with the injunction. Later, the Montana Supreme Court found SB 280 unconstitutional and struck it down. That long legal process took nearly four years and produced a mountain of legal briefs and challenges.
Before his retirement, fellow Yellowstone County District Court Judge Michael G. Moses held the state in contempt and ruled the bill unconstitutional, a decision that was upheld upon appeal to the Montana Supreme Court. Moses also ruled that the ACLU should receive attorneys’ fees for several different components of the case, including prevailing to enforce constitutional rights, known as the “private attorney general doctrine” as well as paying attorneys’ fees for the contempt hearings and work attorneys had to do on them.
The bill for the ACLU and the other attorneys who worked on the case, some of whom have since retired, totaled $725,916 — an amount Thane Johnson, an assistant attorney general for the State of Montana, characterized as outrageous and out-of-line with prevailing rates in Montana. Instead, he suggested the state should only be responsible for paying for the ACLU of Montana’s Legal Services Director Alex Rate, another junior attorney and a paralegal. Johnson suggested to Davies that figure was around $70,000 to $80,000, roughly 10% of the total costs.
“This is offensive. Your Honor, $700,000 is offensive,” said Johnson.
Meanwhile, Rate and others argued the complex civil litigation that involved multiple hearings, appeals to the Supreme Court and contempt charges, plus vindicating the rights of a small minority group required other attorneys, some from out of state, who specialize in complex constitutional issues.
Each side presented one expert witness during the hearing on Monday. Kyle Nelson, an attorney with Goetz, Geddes and Gardner, appeared on behalf of the ACLU and the other attorneys, while former Assistant Attorney General Patrick Risken appeared for the state.
It will fall to Davies to decide what portions of the attorneys fees for the ACLU side are reasonable and consistent with legal rates in Montana.
Nelson testified that many of the lawyers, even those brought in from out of state, were still in line with the top Montana-based firms.
“I think rates are comfortably in line with the Montana rates,” Nelson said.
He explained that the specific laws targeting transgender residents were relatively novel for Montana, and so outside expertise was likely helpful. He also recounted the different motions before several courts, including the Montana Supreme Court, were necessary.
The ACLU’s case incorporated seven attorneys, a number that Nelson said was high, but not necessarily out of line.
“In a run-of-the-mill case, you may have two attorneys,” Nelson said. “… This is not a run-of-the-mill case, and each attorney contributes something that is really important to a different part of the case. They’re not all working on the same thing.”
He said that while a $700,000 bill would not be an everyday occurrence in private practice, he’s seen cumulative totals in that neighborhood, especially in cases that stretch for years.
“I tell clients litigation is very, very expensive,” Nelson said. “It’ll get to six figures quickly. This case doesn’t strike me as cheap, but it’s not a surprising figure, either.”
Risken, though, said that rates that were more than $400, some as high as $550 an hour, were out of line with Montana rates. He ticked off several better-known attorneys who specialize in certain areas of law, like tax litigation, bankruptcy, or constitutional litigation, who average closer to $250 to $350 per hour.
Johnson said that the attorneys with the ACLU were charging top-dollar for their services, and it wasn’t in line with reality.
“It comes down to what I can bill in the real world and what is reasonable,” Johnson said. “No one is going to pay for it because no one can afford it.
He also argued that the case was fairly routine and not complicated, asking Davies not to punish the state via inflated legal bills.
Meanwhile, Rate called the circuitous and drawn-out case “tortured,” in part because of the contempt charges, and said the case stalled because of the state, not his clients represented by the ACLU.
“We were here unnecessarily because the state wouldn’t follow judicial orders,” Rate said. “When the preliminary order was issued, we didn’t immediately go nuclear. Instead, we filed for a clarification motion so that the ruling was crystal clear, and again the state refused to comply with a lawful order. Only then did it find the state in contempt.”
He said with all the different constitutional challenges that the ACLU has been involved with, it would be impossible for just his small in-house team to complete all the work.
“We couldn’t cover the waterfront of Montana Civil Rights in Montana,” he said.
Davies asked each side to write preliminary orders, due in about six weeks, which she’ll use a court guidance as she makes a final determination.
Editor’s note: Attorney Kyle Nelson is representing the Daily Montanan as a part of a larger group that is challenging a decision to open legislative “junque” files, which contain drafting documents for bills. This case is not related to his testimony about the ACLU’s case.
Perhaps the Montana legislature should stop passing irresponsible legislation.