State treasurer seeks $239K bond from ESA opponents

CARSON CITY — State Treasurer Dan Schwartz asked a court Wednesday to require opponents of Nevada's education saving accounts to post a $238,900 bond to cover costs should an injunction imposed against the program be lifted.

Lawyers for a group of parents backed by Educate Nevada Now filed a separate motion Wednesday, arguing that any bond ordered by the court should be "nominal."

District Judge James Wilson issued an injunction Jan. 11, blocking implementation of the program passed by the 2015 Legislature that allows parents to tap into state per-pupil funding to pay for their children's tuition at private or religious schools. The average amount is $5,100 annually per student.

Other parents argued the program would siphon money for public schools and harm their own children's education.

Schwartz, represented by the state attorney general's office, has appealed the decision to the Nevada Supreme Court.

Under state rules, someone who wins an injunction is required to post a security for payment of costs or damages that may be suffered "by any party who is found to have been wrongfully enjoined or restrained."

Solicitor General Lawrence VanDyke, representing Schwartz, argued the injunction "will require the treasurer to place his systems and processes on hold."

He also argued that Educate Nevada Now is a campaign of the Rogers Foundation, which has wealthy backers and assets and is able to post the bond requested.

The treasurer's office has a contract with a database vendor to provide cloud-based storage services for account information.

"The vast majority of the ESA program data is stored in that database," VanDyke wrote. The treasurer intends to amend the existing contract to pay the vendor $2,825 a month to preserve the database and resumption of the program if the injunction is dissolved.

The bond request also asked for $205,000 to cover court costs and attorney fees, including $125,000 for the services of former U.S. Solicitor General Paul Clement, who was retained by the state to assist in the case.

Don Springmeyer, one of the lawyers representing the parents, countered that requiring a large bond is unjustified.

"The sole purpose of a bond is to protect the party that has been enjoined from damages caused by a preliminary injunction if it is ultimately determined that the injunction should not have been issued," Springmeyer wrote, adding the treasurer will not suffer harm.

Springmeyer further argued that the treasurer's office, which is to administer the program, knew there would be constitutional challenges to the law yet went forward with implementing it.

"A nominal bond in public interest litigation ensures that the courthouse doors remain open for all," he wrote. Imposing a substantial bond, he said, would essentially deter people of limited means from "bringing public interest litigation."

Both sides will reply to the other's brief before Wilson makes a final determination on the bond.

Contact Sandra Chereb at schereb@reviewjournal.com or 775-687-3901. Find her on Twitter: @SandraChereb