Article

Prior to local activist group Justice Matters filing a lawsuit last month against Douglas County’s plan to expand its jail, an attorney for the county warned that he would pursue a $3 million surety bond from the group if it went through with the lawsuit.

In response, William Skepnek, an attorney representing Justice Matters, wrote a letter calling the county’s tactic one of “edict, threat and condescension.”

If a court were to go along with the county’s request for a surety bond, it basically would mean that Justice Matters would have to purchase the equivalent of a $3 million insurance policy before the case could continue. Often, a surety bond also requires a business or organization to pledge its own assets if the bonding company must make a payment on the claim.

In this case, the county would be seeking the bond to repay the county for costs associated with the lawsuit and to help cover any added construction costs for the jail that a lawsuit may cause.

On Monday, John Bullock, the county’s attorney, disagreed with Skepnek’s characterization. He said in an email to the Journal-World that pursuing a surety bond was appropriate because Justice Matters was seeking an injunction on the county’s plans to expand the jail. If an injunction is granted, the project could be delayed and result in higher construction costs and higher interest rates on the bond market, among other increased expenses, he said.

“When a party in litigation seeks an injunction, the court can require a security bond to protect the other party against losses caused by the suit,” Bullock said in an email to the Journal-World. “The county’s exercise of this statutory right is not a ‘threat,’ but a necessary measure to protect the taxpayers from significant losses expected to result from Justice Matters’ suit seeking injunctive relief.”

The Journal-World reached out to the three Douglas County commissioners for comment on Bullock’s pursuit of a surety bond, but they did not immediately respond.

Joanna Harader, a member of Justice Matters, recently provided the letters to the Journal-World at a reporter’s request. The three-letter correspondence between Skepnek and Bullock highlights their differing views on whether Douglas County has the legal authority to expand its jail without a new public vote.

Before filing the lawsuit, Skepnek sent a letter to Bullock on Feb. 15 explaining that Justice Matters had retained him and James Kaup for legal representation and explained the group’s opposition to the expansion of the jail. He said the group had requested to send the letter and explain the reasons for its opposition in an effort to be transparent.

“Among those reasons is that we believe the Douglas County Commission lacks the authority to issue the proposed bonds without first either submitting the matter to a vote, or alternatively publishing notice of its intent to issue, enabling voters to petition to place the issue on the ballot,” Skepnek wrote.

In a response, dated March 5, Bullock noted the county’s previously stated rationale for the expansion without a new vote: a 1994 sales tax referendum, which created a 1-cent sales tax “for general government purposes, including the issuance of sales tax revenue and general obligation bonds, and also including … The Expansion and operations of the county jail.” Bullock said that gave the county the authority to issue bonds without voters signing off.

However, if Justice Matters went through with the lawsuit, he said the county would seek the dismissal of the lawsuit on “various legal grounds.” He also said the county would pursue a surety bond from Justice Matters “to protect the taxpayers against the costs the county will suffer on account of your client’s lawsuit.” Bullock said the surety bond, which would need to be approved by the court, would be “not less than $3 million.”

“We urge your clients to reconsider their plans to use litigation to advance their agenda,” Bullock said in the letter.

In a second letter to the county, dated March 6, Skepnek said he was disappointed in the county’s response. He also said he and Justice Matters did not believe the court would approve such a surety bond in its challenge to the county’s legal authority to expand the jail. He, again, asked the county to consider a new public vote on the expansion of the jail.

“If the citizenry of Douglas County want a jail expansion it will surely be authorized by the voters in a public contest,” Skepnek said.

Justice Matters filed its lawsuit in Douglas County District Court on March 16, making the same argument that Douglas County commissioners are not allowing residents to vote or petition against the plan to fund an expansion of jail, despite the group’s belief that they have an obligation to do so under state law. Karrey Britt, a spokeswoman for the county, said the county planned to file a response to the lawsuit on Tuesday.

The lawsuit is a culmination of a yearslong effort by the group and others to stop the county from expanding the jail to house more inmates. As the Journal-World has reported, county leaders say that the jail is overcrowded, making it unsafe for both staff and inmates; opponents argue that the county needs to try more alternatives to incarceration to lower the jail’s population.

Two local nonprofit organizations, Justice Matters and the Lawrence Sunset Alliance, along with five individuals who reside within the county, are petitioning for an injunction to stop the county from issuing bonds to fund the planned expansion, estimated to cost roughly $29.6 million, plus a separate estimated $1.5 million renovation of the jail’s central heating and cooling plant.

The county had approximately $9 million on hand to go toward the jail, the Journal-World has reported. County staff planned to pursue a bond issue with a 20-year debt service to finance the rest of the estimated $31.1 million total, which is about $22.1 million.

https://www2.ljworld.com/news/county-government/2020/apr/06/douglas-county-warned-activist-group-of-3-million-surety-bond-if-it-filed-lawsuit-challenging-jail-expansion/

Copyright © 2020, Bond-Pro, Inc. All Rights Reserved.