A D.C. Superior Court judge has refused to dismiss a lawsuit filed by the Washington Teachers' Union that's challenging the layoffs of 266 teachers.
Rhee had cited a budget shortfall as the reason for the layoffs. But she disclosed earlier this month that D.C. finance officials had discovered a $34 million surplus in the 2010 budget.
Rhee said she plans to use that money for pay raises for teachers, but the district's chief financial officer overruled her.
Bartnoff says the lawsuit is "morphing" because of recent events and that the question now is whether it was reasonable for Rhee to believe there was a budget shortfall.