The Elk River School Board approved a Settlement Agreement and Release of All

Claims at its Board meeting on Monday night in the case of Sagehorn v. Independent
School District No. 728, et. al. The Boards decision was based on its insurers wishes to
resolve the dispute prior to trial in order to avoid the burden and expense of protracted
litigation. Neither party is admitting any wrongdoing through the Agreement. The
District continues to believe that it acted appropriately and in the best interests of all
students and staff. The District faced a possible financial disincentive to continuing the
litigation against the insurers wishes since the District may have received only partial
coverage of any future costs and expenses related to the litigation. The Districts insurer
has agreed to cover the entire cost of settlement on the Districts behalf.
Prior to approving the Settlement Agreement, the Board was updated by its
attorney during the open session of the meeting on the current status of the case and the
pros and cons of settling the matter at this time.
The next step in the litigation would have been the discovery process which would
have involved conducting several depositions of District current and former
administrators and employees and others with knowledge related to the claims. The
School District then planned to bring a motion for summary judgment; depending on the
ruling on that motion, there may have been an immediate appeal to the Eighth Circuit
Court of Appeals on the qualified immunity defense; and then eventually trial. There
could also be additional appeals after the jury verdict.
The U.S. Supreme Court has stated that student speech can be limited when it
infringes on the rights of others. A student can also be disciplined for their speech when
a school district can reasonably forecast a substantial disruption on the basis of the
students speech. Here, the District would have argued that the speech at issue infringed
on the rights of a teacher to not be falsely accused of violating the law by making out
with a student. The District also continues to maintain that it could have shown there was
not only a reasonable forecast of substantial disruption but that substantial disruption
actually occurred. There is, however, no bright line for making that determination as all
cases are decided on their specific facts. It is possible that one jury could have decided
the matter in favor of the School District, and if another jury was selected, they may have
decided the matter in favor of the Plaintiff. The case was not a slam dunk for either side,
and thus, there was risk involved in proceeding.
The largest hurdle for the School District in moving forward is that the Plaintiff is
entitled to attorneys fees if he is able to demonstrate that his free speech rights were
infringed. Even if the jury did not find that the Plaintiff had suffered any monetary
damages and simply awarded him $500 for the violation of his rights, the District would
have to pay the Plaintiffs attorneys fees. If the matter had proceeded through trial and
Plaintiff had recovered any monetary amount, it is likely that Plaintiffs attorneys would
have petitioned the court asking for attorneys fees in a very significant amount, possibly

seven figures. Thus, the Districts insurance company recommended that the District
resolve this matter for a payment of $325,000 directly from the insurer to Plaintiff and his
attorneys. The insurance company wished to avoid the costs and uncertainty of moving
forward. The insurer will pay the entire $325,000 with $40,000 being paid to the Plaintiff
and the remaining $285,000 being paid to Plaintiffs attorneys. The District has already
paid its deductible of $10,000. Since that time, the Districts insurer has been covering
its defense costs.
The downside to the District in settling the matter is that it will not be able to
make its arguments to the court and the public. The only side of the story that has been
told so far to the public has been the Plaintiffs version of events given that the District
could not voluntarily release private educational data on the Student or private data on
employees. The administrators and the staff members involved have not had their day in
court or an opportunity to tell their side of the story. Another downside is that the Court
will not have the opportunity to further elaborate on the standard that governs student
speech off campus. Since this case will not be decided on its merits, the District will
have to await another day to have clarity provided on these issues.
The other downside is that Plaintiffs counsel will undoubtedly characterize the
payment as a win and vindication. Sometimes people who are not involved in litigation
assume that the defendant must have done something wrong-- otherwise, they would not
agree to pay anything. But its never quite so simple. The District continues to believe
that it acted appropriately and in the best interests of all students and staff. However, in
order to continue to serve those interests, the District needs to consider the wishes of its
insurer, the potential financial disincentive if it does not follow its insurers
recommendation, and the need to have administrators focus their attention on other
important priorities.
There are upsides to the District in settling this matter. First is certainty: The
settlement brings about resolution on known and certain terms. There is no rolling of the
dice or risk beyond the settlement, which is being covered by insurance. Second, the
settlement would bring finality to this matter. The matter would be over with no
possibility of appeal. Administration will not be distracted and bogged down with hours
and hours of time devoted to the lawsuit. This issue can be put behind the School
District and the focus can be on other important and current student education issues.
If the Board had not accepted the insurance companys recommendation to settle
this matter, then an endorsement to the Districts insurance policy would have come into
play. That endorsement provides that if the insurance company had eventually had to pay
more than $325,000 to resolve this case, the District would have been responsible for
30% of the Districts attorneys fees from this date forward and 30% of any damages that
exceeded the amount that the case could have been resolved at, i.e. $325,000. Thus, for
example, if this matter were to proceed to trial and the Student were to recover $500 and

his attorneys were to recover $1,000,000 in attorneys fees, the District would have to
pay 30% of $675,500, as well as 30% of the Districts attorneys fees from this point
forward. Given that the District is a steward of taxpayers money, the Board concluded
that it was in the Districts, its students, and its taxpayers best interests to resolve this
case and allow the insurance company to pay the $325,000.