The unanimous decision reversed a 2023 $8 million judgement against the city.
The background
The suit between Jones and the city of Hutto stems from December 2019, when both parties entered into a $412,000 separation agreement, ending his three-year tenure as city manager. Nearly a year later, Hutto City Council passed a resolution to void the agreement, demanding Jones return the severance pay.
Within a week, Jones filed suit in the U.S. District Court for the Western District of Texas Austin Division, citing racial discrimination and breach of contract against the city, Mayor Mike Snyder and former City Council member Tanner Rose. Claims against Snyder and Rose were dismissed in 2021.
U.S. Magistrate Judge Mark Lane, in an order issued in January 2023, wrote there was ample evidence backing Jones’ racial discrimination case—enough that a “jury could conclude that Hutto took the action it did because Jones is Black.” In March 2023, a federal jury awarded Jones $12.5 million—$8 million of which stemmed from the discrimination claim and $4.5 million from the breach of contract claim. In response, the city announced it would "aggressively contest" the decision.
In January 2024, Lane dismissed a motion by the city of Hutto calling for a new trial but also reduced the damages against the city from $12.5 million to $8 million.
The outcome
In 2024, the city of Hutto filed an appeal to the U.S. 5th Circuit Court of Appeals on both the discrimination claim and the breach of contract claim.
In the opinion issued Oct. 7, the three-judge panel found that disparaging statements made by members of Hutto City Council against Jones “were made individually, in contexts that could not have been construed as reflecting actions of the City or the City Council.”
As for the contract claim, the panel agreed the city breached its separation agreement with Jones.
Jones, who retained the $412,000 separation payment, maintained his claim for attorney fees to be awarded. The city argued because Jones kept the payment, he is not entitled to attorney fees.
The Supreme Court of Texas has ruled previously that lawsuits may not be maintained solely for attorney fees, and that a client “must gain something” before fees can be awarded, according to the judgment. However, the appeals court ruled that Jones did “gain something” when he “prevailed on his right to retain the separation payment.”
Therefore, the appeals court remanded the case back to district court to consider only the attorney fee issue. Unless further appeals are made, the case will return to district court for a decision on the attorney fees.
What they’re saying
“We’re grateful for the court’s thoughtful review and for upholding the facts,” Hutto City Manager Jame Earp said in a press release. “This decision provides closure and allows us to move forward continuing to serve the Hutto community with transparency and trust.”
Jones could not be reached by press time. Snyder could also not be reached by press time.
