Tax Lawsuits Help Firm, Despite Legal Uproar

Dale Evans likely wouldn’t be welcome at the “round table” of lawyers who meet for lunch at the Hoffbrau restaurant in Fayetteville.

Evans wouldn’t call it “retaliation” and said he has no big desire to join the group anyway now that some of Fayetteville’s “old guard” lawyers are no longer participating. That’s about as close to retaliation his law practice has suffered since local lawyers banded together to oppose his fees in an illegal taxation lawsuit against local school districts and governments.

In fact, his notoriety has helped his firm, he said. It even justified a fee increase. At $200 an hour, Evans said he charges some of the highest legal fees in the area and gets it.

“Everybody wants a mean S.O.B. when they’re looking for a lawyer,” Evans said. “When you have half the Bar [Association] against you, it’s obvious which lawyer is going to challenge the system.”

Evans was the lead attorney in several class-action lawsuits over Amendment 59, which required county tax rates to roll back when the total value of property in a taxing unit increased by more than 10 percent following a comprehensive countywide reappraisal.

Washington County taxing units — schools, cities and the county government — have since paid out nearly $9 million in tax refunds and about $4 million more in legal fees for taxpayers’ attorneys. Evans and co-counsel Kent Hirsch of Springdale split a little more than $2 million in fees.

David Nixon, a Fayetteville lawyer who filed separate complaints against county taxing units over the same issue, also garnered “a significant amount,” and a lot went to other attorney fees and expert witness fees, Hirsch said.

Members of the Washington County Bar Association challenged the requested attorneys fees of 33.3 percent. The fees were eventually dropped to an amount equal to 25 percent of proceeds from the class-action lawsuit.

The Arkansas Supreme Court ruled in January that the fees should be based on the $8.6 million actually refunded, rather than the $18.6 million that was allegedly improperly collected.

By then, Evans said, the issue was moot because all but one taxing unit had negotiated settlements and paid the fees due.

Evans has since been involved in a number of additional Amendment 59 lawsuits, including cases still pending in Benton County, and several others involving different tax questions.

He filed suit recently against Benton County challenging the county for continuing to collect a sales tax approved by voters to fund its jail construction beyond its sunset, or ending date. The county earned an extra $1.9 million.

Hirsch has also seen an increase in business and notoriety from his involvement in the taxpayer cases.

“I’ve seen some really complex issues starting to show up involving other governmental entities, statewide tax issues, securities issues, brokerage firms,” Hirsch said.

He also noted that the “devastation of the schools” predicted by the opposing group of attorneys if the case was successful never happened. That’s obvious in the building plans at area schools and the Fayetteville School District’s recent wage increases, he said.

Evans said he’s saddened by the fact that during testimony over the attorney fees, it was revealed that very few Northwest Arkansas lawyers are willing to take on cases challenging government actions.

“This great country of ours was founded on the public’s opposition to a tax,” Evans said. “Has everybody forgot that?”

Nixon was vacationing and couldn’t be reached for comment on how his Fayetteville law firm is doing since the Amendment 59 publicity.