Federal Court Reverses $8M Judgment Against Hutto in Discrimination Case

A federal court reversed an $8 million judgment against the city of Hutto, finding that the City Council did not racially discriminate against former City Manager Odis Jones.

"The evidence reflected that disparaging statements by the two council members were made individually, in contexts that could not have been construed as reflecting actions of the city or the City Council," said a ruling issued Tuesday by the U.S. Court of Appeals for the 5th Circuit.

The 5th Circuit's ruling said the city did breach a $412,000 separation agreement with Jones when it attempted to rescind it, according to a city news release. Any damages from breaching the agreement are barred under Texas law, the release said.

"Unless further appeals are made, the case will return to court to decide competing attorney's fee award claims based on the (court) decision," according to the release.

Jones sued the city in 2020, saying he was racially discriminated against when the City Council voided his $412,000 separation agreement. A jury in 2023 found that the city had breached its contract with Jones, and also discriminated against him on the basis of race. The jury awarded Jones $8 million for the discrimination claim.

George Hyde, an attorney for the city, said Wednesday he was grateful that the court "properly applied the law."

"I am very pleased to be finally exonerated from such as exacerbated jury verdict," he said. Hyde said he had argued during the initial trial that the City Council members' individual comments did not apply to the whole council. "A political figure such as a City Council member or a mayor is an independent elected person and if they speak on a matter they are speaking for themselves," he said.

Marcy Greer, Jones' attorney, said in a statement Wednesday that "Mr. Jones filed this lawsuit to clear his name, and he succeeded in doing that."

"The Fifth Circuit Court of Appeals agreed that the City of Hutto breached its contract with Mr. Jones and is remanding the case so that he can recover his legal fees," Greer said. "It also found that 'two investigations unearthed no impropriety by Jones,' contrary to the City’s stated reasons for clawing back his severance."

"The appellate court assumed that the jury trial proved that the current mayor and another city councilmember acted with a racially discriminatory intent toward Mr. Jones," Greer said, "but also found that he did not prove racial discrimination by a majority of the City’s council, and so could not recover any damages beyond the $412,000 severance that the Court ruled Mr. Jones is entitled to keep."

City Manager James Earp said the city also was grateful for the court's decision. "This decision provides closure and allows us to move forward, continuing to serve the Hutto community with transparency and trust."

U.S. Magistrate Judge Mark Lane ruled against the city's motion for a new trial in 2024. Lane said in his ruling that the jury in 2023 heard evidence that two members of the City Council, Mayor Mike Snyder and Council Member Tanner Rose, were motivated by racial hostility.

"The jury heard from former assistant city manager (Byron) Frankland that Snyder said that during his time in Kansas City he 'got really good at spotting crooks,' which he described as 'black guys that he knew were coming into the store and stealing,'" the court document said. "The jury also heard that Snyder complained that generally there were 'too many minorities in city government.'"

In addition, the jury heard about a media interview in which Snyder and Rose discussed their effort to remove a plaque that featured Jones’ name, saying they "wanted to remove a dark stain from Hutto," the ruling said.

Jones was Hutto's city manager from 2016 to 2019. In November 2019, the City Council approved a severance agreement with Jones for $412,000. It consisted of $283,000 in salary, $58,000 in vacation pay, and unpaid sick leave and benefits worth $71,000. Jones said at the time that he was leaving the city because he had achieved his goal of restoring its solvency.

When the City Council rescinded his separation agreement on Dec. 3, 2020, a city spokeswoman said it was because the agreement was never brought back to the council for final approval of details and terms, as required by the city charter.