Jefferson City Public Schools has spent more than $1.1 million on lawsuits and settlements since the Karen Ray lawsuit was filed in 2014, according to JCPS records. But the total financial costs including those that have been covered by insurance is more than twice that amount.
Additionally, the number of lawsuits has caused the district's liability insurance premiums and deductibles to increase.
Including the Ray lawsuit that went to trial, JCPS has had nine lawsuits filed against it since 2014 — seven of them being employment discrimination allegation-based and two filed by parents on behalf of students. Six lawsuits are currently active — four employment discrimination allegation-based suits, and the two filed on behalf of students.
The Ray lawsuit that resulted in a jury ruling in 2016 in favor of a former Jefferson City High School teacher who alleged gender and age discrimination has been the most expensive, costing the district $589,644.66 — payment to attorney Mickes O'Toole for the district's legal fees was $449,644.66 of that. The remaining $140,000 was paid to Ray.
Without insurance, though, JCPS would have had to pay at least $1.08 million for that case alone, because of further payment of $160,000 to Ray and $330,000 to her legal representation that insurance covered. The qualifier of "at least" has to be used because, according to the school district's chief financial and operating officer Jason Hoffman, JCPS is not made aware of all of the costs that insurance covers.
All of the district's legal fees with the Schreimann, Rackers & Francka law firm for six of the nine total lawsuits — Ray, Laura Cooper, Gretchen Guitard, Tammy Ferry, Robert Jones, and one of the lawsuits filed on behalf of a student — have been covered by insurance.
In the case of the Ferry and Jones employment discrimination allegation-based lawsuits and one of the two filed on behalf of a student, insurance coverage has meant the district has not spent any money on those three cases so far, according to the data Hoffman provided.
Hoffman said a Schreimann, Rackers & Francka attorney "bills the insurance company directly, and we are not made aware of these costs."
However, while JCPS' prior insurance coverage provided for its legal defense costs through that firm, Hoffman said in an email that a change within the past year is the district now has a deductible that has to be met before defense coverage kicks in.
That's meant that for the three most recently-filed lawsuits — Naveed Malik, Denise Rackers and the second on behalf of a student — all filed in January 2019, the district has had to pay $5,511.35 to Schreimann, Rackers & Francka.
JCPS paid $156,718.12 to Mickes O'Toole for the Cooper lawsuit that ultimately resulted in a settlement, and the district paid $7,744.93 to the Cook, Vetter, Doerhoff & Landwehr firm for defense in the Guitard lawsuit that also resulted in a settlement.
JCPS paid $140,000 to Cooper and $250,000 to Guitard. Insurance paid a further $460,000 to the plaintiffs and their attorneys in those two cases.
In all, insurance has paid for $950,000 in costs for the nine lawsuits filed against JCPS, and the two associated settlements. Combined with what the district has paid, the nine lawsuits and two associated settlements have cost $2,099,619.06.
According to an emailed statement Thursday from JCPS' Director of Communications Ryan Burns, payments for the district's portion of lawsuit expenses "come out of the legal expense line of the district's operating budget."
Burns added, "In recent years, the number of lawsuits has specifically impacted the availability and cost of our management liability insurance. The premium for management liability insurance used for lawsuits is more than triple what it was only five years ago, which is a direct result of new claims activity. Additionally, the deductible that JCPS has to absorb in each claim, including the cost of legal defense, has increased significantly."
"In general, Missouri's legal climate has shown significant upward trends in litigation related to employment practices in recent years. When public entities are named in these types of lawsuits, tax dollars are often impacted due to the rising costs of legal expenses and settlements," Burns said.
When asked if he's concerned with how much the district has spent on legal expenses or how much at minimum it probably will spend in the foreseeable future on costs of lawsuits that have been filed, JCPS Board of Education President Steve Bruce said Thursday by email, "I am concerned that given the nature of employment law in Missouri, legal costs for public organizations such as school districts and government entities will only continue to rise.
"Unfortunately, the climate for these types of lawsuits is such that some attorneys have proven it to be a lucrative, financially advantageous business model to rely on," he said.
Bruce said the school board is advised by counsel of any court filings, and that's how the board members have first learned about lawsuits.
"The board remains actively involved in regular discussion with our counsel on all legal matters. Any board member, as well as legal counsel, may request an agenda item for closed session (meeting) to discuss pending or current legal matters," he said.
In terms of authorizing payments, Bruce said, "All district bills paid using public funds are presented to the board for review and approval as either consent agenda items or separate items (such as contracts) that require a vote of the majority of the board to authorize payment. Missouri law does not allow for the use of closed session for payment of district bills, and our board and district follow state law.
"All seven members of our board are very much looking forward to the opportunity for the district to set the record straight on a number of things," he said in response to whether he had any questions about the lawsuits he'd like answered, or if he had anything else to add.