The special prosecutors in Texas Attorney General Ken Paxton’s fraud case have suffered another loss in their fight for back pay.
On Thursday, the First Court of Appeals in Houston ruled that a lower court erred in ordering the prosecutors to be paid $300-an-hour for their work on the case. In its decision, a three-judge panel of the appeals court wrote Harris County District Court Judge Andrea Beall did not have the authority to order a pay rate of that amount.
The decision stems from a yearslong fight over how much the special prosecutors should be paid, and it likely won’t end here. The prosecutors could appeal.
Kent Schaffer, one of the special prosecutors, said he doesn’t know what rate they’ll ultimately get paid. He blamed the decision on politics.
After his re-election to a third term in November 2022, Paxton beat impeachment and has further aligned himself with powerful national Republicans like former president Donald Trump.
“It’s a huge loss but it’s exactly what I expected,” Schaffer told The Texas Newsroom.
“Appellate courts have come to realize the perils of taking on Mr. Paxton and none are willing to risk their careers when it’s easier to defund the prosecution. This is part of Texas politics and I’m not a politician,” he added.
Brian Wice, the lead special prosecutor, said the appeals court handed Paxton "a victory the law makes it clear they were not entitled to."
"Today, the court of appeals effectively held that the special prosecutors must be paid less than $5 an hour for all of the work they performed over the last eight years," he said in a statement.
Dan Cogdell, one of Paxton's lawyers, blamed the special prosecutors for delaying the fraud case while they fought to get paid. He added that their $300-an-hour rate was "misplaced."
"While I’m all in favor of lawyers getting paid, I’m not losing sleep over the idea that either of them will be homeless as a result of this decision,” Cogdell told The Texas Newsroom.
Paxton was indicted on three felony fraud charges in 2015. He was accused of defrauding investors in a McKinney tech company, and failing to register as an investment adviser representative.
After fighting the charges for years, Paxton cut a deal with the special prosecutors in March to do community service and pay restitution in lieu of going to trial.
Usually cases like this are handled by the district attorney in the county where the alleged crime was committed. But after Collin County DA Greg Willis recused himself from the case, citing his friendship with Paxton, Schaffer and Wice were appointed as special prosecutors and offered that pay rate. Both are private attorneys based in Houston.
After cutting them a six-figure check in 2016, the Collin County commissioners court refused to pay Wice and Schaffer again. They took the issue to court, arguing the prosecutors’ hourly rate was exorbitant and unconstitutional. The commissioners only want to pay what local court-appointed attorneys make: a flat rate of $2,000 for all pretrial work.
In 2018, the state’s highest criminal court sided with the commissioners and struck down the $300-an-hour rate.
After the case was assigned to Beall in Houston, she issued an order last November that the prosecutors be paid their originally-promised rate for their work on the case in 2016. But the state’s high court would not enforce the order.
The Houston appeals court’s ruling Thursday shot down Beall’s decision and sent the issue back to her.
“We direct the trial court to vacate its orders awarding attorney’s fees to the special prosecutors and issue a new order adjudicating the special prosecutors’ request for payment of fees in compliance with the Collin County fee schedule,” the three-judge panel wrote.
The decision was issued by Justices Sarah Beth Landau, Julie Countiss, and Amparo Monique Guerra. All three are Democrats.
Schaffer stepped off the case shortly before the March deal was announced, citing the pay issue and disagreements with Wice over how to handle the case. He said Thursday he may end up losing money.
Schaffer said he doesn’t plan to appeal. Wice indicated he will fight the decision in his statement Thursday, noting an earlier decision to send Paxton fraud case back to Collin County was reversed by the state's top criminal court.
"The State is confident that today's ruling is destined for the same fate," Wice said.
