Judge sanctions SOS, its director
Ruling finds that lawsuit challenging Hill Country development was frivolous.
By Stephen Scheibal and Brad Buchholz

AMERICAN-STATESMAN STAFF

Tuesday, December 7, 2004

A visiting Travis County judge on Monday slapped the Save Our Springs Alliance and its executive director, Bill Bunch, with a roughly quarter-million-dollar judgment and a finding that Bunch filed a frivolous lawsuit.

Visiting Judge Bill Bender rejected the environmental group's claim that developers should not be allowed to build a neighborhood on about 2,300 acres of the Lazy 9 Ranch in Southwest Travis County.

The size of the development, known as Sweetwater Ranch, would rival that of Circle C Ranch. The developer has said the project would put about 3,000 houses and significant commercial development along Texas 71.

The ruling itself was not much of a surprise, as SOS had already lost key rulings earlier in the proceedings. But then Bender ordered the environmental group to pay about $200,000 of the developer's legal fees -- the amount could rise with appeals -- and hit Bunch personally with a $5,000 sanction.

SOS frequently sues over developments or decisions that some environmentalists oppose but cannot block politically, and Bunch said the group has been ordered to pay legal fees in the past. But both sides said the sanctions are unusual, and Bunch and SOS board chairman Stuart Henry left no doubt that they will appeal.

"It's very rare that sanctions are awarded," Bunch said. "It's rare that they're sought . . . and it's considerably more rare that they're upheld on appeal."

The defendants in the case were the Lazy 9 Municipal Utility District and its directors. SOS argued that the formation of the quasi-governmental entity was unconstitutional and that the development it allows could have dire environmental consequences for the Barton Creek and Bee Creek watersheds.

The lawsuit had potentially far-reaching consequences, challenging the legality of municipal utility districts, which provide infrastructure for far-flung suburban subdivisions.

Mike McKetta, a lawyer for the defendants, said he has frequently faced off against Bunch in the courtroom. He said this is the first time he's sought sanctions for a frivolous lawsuit.

McKetta, who said he charges $450 an hour, accused SOS of filing the lawsuit specifically to spoil a massive real-estate closing on the land. The environmental group filed the lawsuit June 29; the closing was scheduled for June 30.

An e-mail message from an SOS member stressed the need to file the lawsuit before the land closings, McKetta said.

He said he thinks the lawsuit cost developers at least $9 million.

"This one, I thought, went beyond the pale," McKetta said. "I think it's important that a lawyer be responsible for doing a reasonable investigation before filing a lawsuit."

But Bunch argued that his case has merit. He also said the order could devastate the SOS Alliance if it's upheld. Although a recent pledge gives the group about $1.5 million over three years for regional activities involving other groups, the money cannot be used for costs such as a developer's legal fees, Bunch said.

Bunch added that he thinks the developers' chase for SOS money was meant to have a chilling effect on an organization that frequently works through courts to achieve its goals. He did not expect the ruling to have that effect.

"Our board is a strong board with very knowledgable people," Bunch said. "I don't think they'll be intimidated by this."

But Casey Dobson, another lawyer who occasionally faces SOS while representing Austin or other defendants, said the ruling should prompt some soul-searching.

Dobson said he did not know the details of the Lazy 9 lawsuit but added that "my personal opinion is that any time an entity or an individual is sanctioned by the court for frivolous filings, you ought to take a real serious look at how you do business."

sscheibal@statesman.com; 445-3819