Property:
Texas Supreme Court Prohibits Localities from Entering into Contracts on Contingent-Fee Basis
Case No. 22-0313, Tex. (4/28/23). In a case involving whether a Texas school district may retain a lawyer on a contingent-fee basis to prosecute litigation designed to increase the appraised value of property to generate more tax receipts for the locality, the Texas Supreme Court (Court) concluded that no Texas statute expressly authorizes a school district to do so and authority for such an arrangement “cannot be implied from a school district’s express authority to bring litigation regarding appraisals.” Because the school district lacked legal authority to engage its attorney on a contingent-fee basis to bring the appraisal litigation, the Court held that the lower district court correctly granted the “Rule 12 motion” challenging the attorney’s authority to represent the locality. However, according to the Court, dismissal of the school district’s case with prejudice was not the proper remedy under Rule 12, because the school district “must be afforded the opportunity to adjust its contract with its attorney or to substitute other counsel if it wishes to continue prosecuting this lawsuit.” Accordingly, the Court remanded the case to the district court for such purpose. Please contact us with any questions.
30 Rockefeller Plaza New York, NY 10112-0015 United States
About Deloitte Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited (“DTTL”), its global network of member firms, and their related entities (collectively, the “Deloitte organization”). DTTL (also referred to as “Deloitte Global”) and each of its member firms and related entities are legally separate and independent entities, which cannot obligate or bind each other in respect of third parties. DTTL and each DTTL member firm and related entity is liable only for its own acts and omissions, and not those of each other. DTTL does not provide services to clients. Please see www.deloitte.com/about to learn more.
Deloitte provides industry-leading audit and assurance, tax and legal, consulting, financial advisory, and risk advisory services to nearly 90% of the Fortune Global 500® and thousands of private companies. Our professionals deliver measurable and lasting results that help reinforce public trust in capital markets, enable clients to transform and thrive, and lead the way toward a stronger economy, a more equitable society and a sustainable world. Building on its 175-plus year history, Deloitte spans more than 150 countries and territories. Learn how Deloitte’s approximately 415,000 peopleworldwide make an impact that matters at www.deloitte.com.
