Gibson Dunn Foster Care Defense Costs Texas $5 Million in a Year

Gibson Dunn & Crutcher LLP received $5.23 million in one year for helping Texas finally turn the tide in a longstanding legal battle over abuse in the state’s foster care system brought by a class of children.

The expenditure, disclosed in public records obtained by Bloomberg Law, came after the state handed the litigation to the Big Law professionals in May 2023, seeking to finally wind down a 13-year-old case that’s cost Texas $200 million in monitor fees and court-ordered system improvements. Before tapping Gibson Dunn as lead counsel, the state handled the litigation with its own attorneys, who are salaried at less than $200,000 per year.

Judge Janis Jack of the Southern District of Texas had twice held the state in contempt for its foster care failings, and was preparing for a third finding when Gibson Dunn was hired. The state scored one of the most significant victories in the case following the firm’s hiring when the Fifth Circuit removed Jack from the case and axed a $100,000 per day fine she’d imposed on the state.

Neither Gibson Dunn nor Gov. Greg Abbott’s (R) office responded to requests for comment about the contract or Texas’ decision to hand the case to the heavyweight firm. The state has hired outside litigators in at least 14 other pending cases, according to records Bloomberg Law obtained under the state’s public records law.

Chuck Herring of Herring Panzer, who teaches and writes on legal ethics, questioned why the state is now spending millions of dollars in outside legal fees after handling the fight with its own lawyers for more than a decade. He said Jack’s potential removal from the case might be used to blunt any questions about the extra costs to the state.

That “was something really, really important,” he said. “That’s their justification.”

The Rates

Gibson Dunn partner Allyson Ho serves as lead counsel on the case at a rate of $1,313 per hour, according to information Bloomberg Law obtained through a public records request. The contract says that Gibson Dunn’s lawyers will give Texas a 25% discount for their services and appears to waive expenses for travel.

A separate sheet lists payments to Gibson Dunn. Those records, from Oct. 16, 2023, through Oct. 24, 2024, total more than $5.23 million.

Ho, wife of Fifth Circuit Court of Appeals Judge James Ho, also didn’t respond to requests for comment about the firm’s work on the case. Ho is one of four Gibson Dunn lawyers listed in the contract.

The others also have ties to the Fifth Circuit. Matt Scorcio, billing at a pre-discount rate of $945 an hour, previously clerked for Judge Don Willett, while Prerak Shah once clerked for Jerry Smith. He bills at $1,069 an hour before the one-fourth discount.

Shah also served as chief of staff for US Sen. Ted Cruz (R-TX), where he led the selection process of more than 20 federal judges in the state.

Michael Zarian, listed on the contract at a rate of $859 per hour, became deputy solicitor general for the Idaho attorney general’s office in 2024. The contract was signed April 2023 and lists the rates as of that date.

Fifth Circuit judges Edith Jones, Edith Clement, and Cory Wilson formed the panel that removed Jack, citing hostile comments she directed to Texas and Gibson Dunn at a December 2023 hearing.

Paul Yetter, the Yetter Coleman LLP partner representing the foster children, recently asked the entire Fifth Circuit to overrule the three-judge panel’s decision to remove Jack. He is handling the case pro bono.

He declined to comment about Texas’s payments to Gibson Dunn.

Other Outside Counsel Deals

The Gibson Dunn contract one of at least 14 agreements Texas has with outside firms in pending litigation.

The state is paying up to $540 an hour to Lewis Brisbois Bisgaard & Smith for representation in a whistleblower lawsuit from former lawyers in Texas Attorney General Ken Paxton’s (R) office.

In suing Meta for capturing and using Texans’ facial recognition data, the state entered into contingency contracts with Keller Postman and McKool Smith.

The firms announced a $1.4 billion settlement in that case in July. They are due to receive the lesser of 11% of the total settlement—$154 million per firm—or their hourly rate multiplied by hours worked, then multiplied again by four. The hourly rate for lawyers in the case reaches $945.

On Oct. 18, Bloomberg Law asked the state for all pay invoices submitted by Gibson Dunn. The state refused to turn over records, citing attorney-client privilege. Bloomberg Law then submitted a second request for any non-confidential records that show how much the state has paid Gibson Dunn, which the state provided on Nov. 19.

The case is M.D. v. Abbott, S.D. Tex., No. 2:11-cv-84.