Update, 1 p.m. Tuesday: The San Francisco Board of Education on Monday evening approved a settlement between the school district and its former school bus provider over unpaid invoices during the pandemic, when buses were not taking kids to school.
Under the agreement, the company, First Student, will pay San Francisco Unified $1 million, school board officials announced.
The bus company worked with the school district for about 40 years before San Francisco Unified switched bus providers in 2021. The company last year sued the district for refusing to pay $5.4 million in non-transportation services when in-person classes were canceled. The district, in turn, countersued the company for breach of contract, bad faith and violations of the California False Claims Act.
Last Thursday, a jury sided with the district, finding First Student guilty of violating the California False Claims Act, which bars the use of a false statement or document to obtain money from the state. But the jury also decided that the district did not incur any harm from receiving the company’s invoices, which it never paid.
That mixed decision resulted in what’s known as a “fatal inconsistency” in the verdict, prompting both parties to try to reach a settlement.
On Friday, the two parties announced they had reached a settlement agreement.
“We are glad the matter is resolved,” said Joe Arellano, spokesperson for First Student.
Original story, 5 p.m. Friday: The San Francisco Unified School District on Friday reached a settlement with its former school bus provider in a lawsuit over ongoing payments during the pandemic, when students were learning from home.
The terms of the deal with First Student, the bus operator, have not yet been released and the agreement must now be approved by the city's Board of Education.
“Today First Student and SFUSD reached a mutual settlement with no admission of liability on either side. We are glad the matter is resolved,” said Joe Arellano, spokesperson for First Student. “First Student took great pride in partnering with SFUSD for decades, transporting generations of families. We hope to return to the community in the future if the opportunity arises.”
On Thursday afternoon, a jury reached a verdict in the case in San Francisco Superior Court, records show. But a "fatal inconsistency" associated with the verdict caused the trial to continue into Friday, when the two parties ultimately settled.
“SFUSD and First Student reached a settlement agreement, which will go to the Board of Education for approval at an upcoming meeting,” said Laura Dudnick, spokesperson for SFUSD.