Nevada State Treasurer’s Bond Request Cut Back in Voucher Case

LAS VEGAS, NV (March 4, 2016) – Judge James Wilson of the First Judicial District Court issued an order denying Treasurer Dan Schwartz’s $238,000 surety bond request in Lopez v. Schwartz, a case challenging the new controversial voucher law, Senate Bill 302 (SB 302).   Several parents of public school children filed the suit in September 2015, and won a preliminary injunction halting the program on January 11.  Judge Wilson held that the plaintiffs were likely to succeed, and that SB 302 is unconstitutional under Nevada’s constitution.

Educate Nevada Now, powered by The Rogers Foundation, supports the plaintiffs’ position in this case.

Judge Wilson found that the voucher law violates the Nevada Constitution because it diverts public school dollars to private schools and other private expenditures, and will cause “irreparable harm” to Nevada public school children.   Judge Wilson halted the program pending a final decision.  As required by Nevada law, a party winning a preliminary injunction must post security to cover potential monetary losses in the event the injunction is later overturned.

The Treasurer asked for a bond to cover nearly $238,000 in alleged expenses, approximately $200,000 for attorney’s fees.  Judge Wilson rejected the bond request, finding “[t]he Treasurer offered conclusory statements rather than evidence to support most of his arguments” for the large bond.  Specifically, the Treasurer provided:

  • No evidence of the cost or need of maintaining an applicant database;
  • No evidence to support claims that not amending the contract to maintain the database would have catastrophic effects;
  • No evidence of the need to hire the high-priced attorney, Paul Clement of the Bancroft firm, to assist the case.
  • No evidence why the case could not be handled by the Attorney General’s office;
  • No evidence of the costs of litigating the case, or how many hours would be needed.

Without any evidence of the potential damages, Judge Wilson set the bond amount at  $75,000, a fraction of the Treasurer’s request.

“The Treasurer has the burden of showing the expenses he will incur as a result of the injunction,” said Sylvia Lazos, Policy Director of Educate Nevada Now. “We are pleased Judge Wilson did not require a bond of $205,000, as requested by the Treasurer, that would have had the effect of denying these parents, and future litigants seeking to protect their constitutional rights, from seeking preliminary injunctions.”

The Treasurer has appealed the injunction to the Nevada Supreme Court, and the Court has set an expedited schedule for the parties to file briefs.  The Supreme Court has not indicated whether or when it will hold oral argument in the case.  In the meantime, Judge’s Wilson’s injunction order remains in effect, blocking the State Treasurer from taking any action to implement the voucher law and program.