The South Carolina Supreme Court on Wednesday, October 19, 2022. Joshua Boucher jboucher@thestate.com
The S.C. Supreme Court on Wednesday heard arguments on the validity of $75 million in legal fees Attorney General Alan Wilson’s office paid to two private Columbia law firms in a settlement over storing deadly plutonium at the Savannah River Site.
The case, quite apart from thorny legal issues, has a potential political dimension for Wilson, who is said to be contemplating a run for governor in 2026.
Critics say that even if the $75 million fee turns out to be legal and properly calculated — 12.5% of a $600 million settlement — the optics alone of such a sizable fee could make it questionable in a political sense. Others say the fee was justified, and Wilson as attorney general had the authority he needed to write the contract that awarded a percentage of the settlement amount to private attorneys.
At Wednesday’s hearing, all five justices asked questions of opposing lawyers and appeared absorbed in the case, but — as is their practice — took no action and gave no hint as to when a decision might be forthcoming. Their ruling will take up legal, not political, issues.
Attorney Jim Griffin, representing plaintiff John Crangle and the S.C. Public Interest Foundation, spoke first.
“This case is about whether the attorney general can pay $75 million in attorneys’ fees from a $600 million settlement... .... despite statutory requirements that litigation costs must be awarded by court order or settlement,” Griffin told the justices. “We are not challenging the attorney general’s authority to enter into contingency fee agreements but payment under such agreements must be made within statutory constraints.”
Associate Justice Letitia Verdin asked Griffin if he thought the question of reasonableness of attorneys fees needed to be sent back to the lower court or could the five Supreme Court justices make a decision on that?
Griffin replied that the justices could decide that the $75 million in fees were awarded in violation of the law and therefore the money “has to be returned. That’s the end of case.”
But, Griffin continued, his side has repeatedly asked to do discovery on the reasonableness of the fees. “We don’t think that ever in this the lawyers ever took a deposition, served interrogatory, got documents produced... We think the $75 million is anything but reasonable.”
Speaking for one of the law firms that shared the legal fee, attorney and state Rep. Todd Rutherford, D-Richland, told the justices that state law clearly allows an attorney general to enter into contracts with private law firms and set fee schedules. The contracts are public and posted on the attorney general’s website, Rutherford said.
The attorney general doesn’t have to put money designated for attorneys’ fees into the state’s General Fund — a condition that would raise the spectacle of attorneys going to state lawmakers and having to “beg” for their fees, Rutherford said.
Chief Justice John Kittredge asked Rutherford who determines whether a fee is reasonable. “Which branch of government makes that call?”
Rutherford replied, “At the outset, it’s the attorney general.” In this case, “there is no way” a state court could decide the reasonableness of the fees paid to the two private law firms, Rutherford said.
An attorney in Wilson’s office, Deputy Solicitor General Emory Smith also spoke, telling the justices that the $75 million in fees was lawful and must be honored.
“This was a binding contract that provided that the fees were to be paid out of any settlement proceeds and in this case, that is an enforceable contract by courts. It is a distribution required by law,” Smith said.
One possible outcome of Wednesday’s hearing might be for the high court to uphold an October 2023 ruling by state circuit court Judge Daniel Coble that said Wilson, as the state’s chief legal officer, has “broad authority to direct and control the State’s legal affairs” including hiring private lawyers, and that the $75 million fee was valid. Courts should have no oversight role in attorney general legal general contracts, he wrote. (In a touch of historical irony, Coble’s grandfather, the late Daniel R. McLeod, was state attorney general from 1959 to 1983.)
Another outcome might be for the justices to send the case — Crangle v. Wilson — back to Coble for a hearing on the reasonableness of the fees and related matters.
In any event, Wednesday’s hearing was just the latest stop in a nearly five-year legal odyssey that had its origins in a major State House press conference in late August 2020.
At that time, Wilson and then-U.S. Department of Energy Secretary Dan Brouillette announced that the federal government would pay South Carolina $600 million for the government’s decades-long failure to live up to an agreement to remove deadly bomb-grade plutonium from the nuclear weapons complex at the Savannah River Site. Under the agreement, the federal government would not have to move all of the tons of plutonium until 2037.
And, Wilson said, a contract between his office and two Columbia law firms he had hired to do legal work resulting in the $600 million settlement required him to pay the firms the agreed-upon amount of compensation. Wilson directed the $75 million to the law firms a few weeks later when the federal government paid the $600 million to South Carolina.
The law firms were Willoughby & Hoefer, a firm with offices in Columbia and Charleston, and Davidson, Wren & DeMasters of Columbia.
From the outset, the deal had critics. Gov. Henry McMaster wrote a letter to Wilson saying the federal government should not be allowed to keep plutonium in South Carolina until 2037. McMaster, a Republican like Wilson, also questioned the $75 million fee.
First Circuit Solicitor David Pascoe, a Democrat, also wrote a public letter to Wilson protesting the legal fees. Pascoe said that politicians had helped arrange the $600 million settlement and questioned the amount of work the two law firms had actually done.
In response, Wilson defended the firms and their work, saying they were instrumental in getting to a settlement. And the deal settled a longstanding problem that had festered for years and will prevent any more plutonium from being brought into South Carolina, Wilson said.
In September 2020, a month after the press conference announcing the $600 million settlement, Crangle, a Columbia lawyer who studies the ethics of public officials, and the foundation filed their lawsuit, objecting to the fees and alleging various questionable ways in which they had been carved out of the settlement. Their lawsuit also cited objections by McMaster and Pascoe.
In 2021, lower court judges tossed out the lawsuit, ruling that Crangle and the foundation lacked “standing” — or a personal stake in the outcome of an issue being adjudicated.
In September 2022, the state Supreme Court ruled that Crangle and the foundation did have a public interest standing, or the right to sue Wilson on behalf of South Carolinians. The ruling was authored by Associate Justice Buck James, one of the five justices at Wednesday’s hearing.
That ruling kicked the case back to the state trial court, where it went before Coble.
The issue of moving plutonium off the Savannah River Site was and is of concern because plutonium is a toxic metal and a key ingredient in nuclear weapons. The material can cause cancer. Some forms of plutonium can take tens of thousands of years to break down.
The Savannah River Site is a 310-square-mile nuclear complex near Aiken that was a major part of the Cold War weapons production effort. The site at peak production employed more than 10,000 people but it has left a legacy of toxic waste.
Crangle predicted after the hearing that the Supreme Court would send the case back to Coble, at least on the matter of the fees. “It’s clear the fees are excessive, and that they should be evaluated by the circuit court based on actual work done by the law firms.”
JM
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John Monk has covered courts, crime, politics, public corruption, the environment and other issues in the Carolinas for more than 40 years. A U.S. Army veteran who covered the 1989 American invasion of Panama, Monk is a former Washington correspondent for The Charlotte Observer. He has covered numerous death penalty trials, including those of the Charleston church killer, Dylann Roof, serial killer Pee Wee Gaskins and child killer Tim Jones. Monk’s hobbies include hiking, books, languages, music and a lot of other things.