Justices question SC attorney general’s ‘right’ to give lawyers $75M for SRS settlement

South Carolina Supreme Court justices on Wednesday grilled an attorney for S.C. Attorney General Alan Wilson about whether Wilson should have paid $75 million to two private law firms for their purported work involving plutonium at the Savannah River Site.

Wilson paid the $75 million to the law firms in 2020 after a lawsuit was filed challenging the fee, the timing of which was questionable, Associate Justice John Cannon Few told John Simmons, a lawyer representing Wilson, during the hour-plus hearing.

“That (quick payment) deeply troubles me,” said Few, who said Wilson appeared to have thought, “I’ve got to sneak around the fact that this lawsuit might be successful and go ahead pay these funds into the trust account of a private law firm so that it would be unretrievable.”

The $75 million lawyers’ share that was wired to the firms instead of a check came out of a $600 million payment the federal government agreed to give South Carolina in August 2020. The $600 million was the amount the federal government said it would pay South Carolina in exchange for leaving about 10 metric tons of highly radioactive weapons-grade plutonium at the Savannah River Site until 2035.

Wilson’s speedy payment to private lawyers before a lower court judge could make a ruling in the matter highlights the importance of issues discussed during Wednesday’s Supreme Court hearing, Few told Simmons.

“We do very respectfully very strongly disagree with the characterization,” Simmons replied to Few.

Chief Justice Donald Beatty honed in another another matter.

He said the law required that the $600 million recovered by Wilson’s lawyers — which included the $75 million fee — to go into the state’s general fund. But the $600 million was paid to Wilson, who quickly turned over $75 million of it to the private law firms, Willoughby & Hoefer and Davidson, Wren & DeMasters.

“These funds never made it there (into the general fund),” Beatty said. “That’s what the statute requires.”

Simmons disagreed, arguing that Wilson was following different legal guidance that allowed him to dispense $75 million directly to the private attorneys.

Justices skewer Wilson’s $75M fee to law firms

The specific matter before the justices Wednesday was whether a private citizen — John Crangle, a Columbia lawyer — had the right to bring a lawsuit against Wilson challenging the fee under a provision of law known as the “public importance” standard.

Ordinarily, a private citizen does not have the right to sue the attorney general for any of the numerous decisions he and his office make each year. However, if a citizen convinces a court that the issue has sufficient public interest and that the attorney general might repeat a questionable and possibly unlawful action, a court could grant that citizen “standing,” or the right to sue.

In this case, Crangle and the S.C. Public Interest Foundation sued Wilson and the two law firms before the money had been paid by Wilson to the firms. In January, 2021, trial Judge Kirk Griffin ruled Crangle and the foundation did not have standing. They appealed on the standing issue.

If Crangle and the S.C. Public Interest Foundation win their appeal, it is possible the matter could go back to a lower court for a trial on the merits of the case. It could include questions about the size of the fee and whether Wilson followed the law in giving the $75 million to the law firms so quickly and whether he followed state laws in doing so.

The Supreme Court could also set guidelines for the Attorney General’s office by requiring it to limit future fees paid to private attorneys, how those fees should be approved and how settlement money should be handled once it is received. The Attorney General’s office has a half-dozen other fee agreements with private law firms in ongoing cases.

Jim Carpenter, the lawyer who argued the case for Crangle and the foundation, told the justices Wednesday that Wilson should have gotten approval of the $75 million settlement from a court before giving it to the two law firms but did not do so.

Simmons said under the agreement that Wilson had with the private law firms, he did not need an explicit court order approving the $75 million going to the private law firms.

“There is no constitutional requirement (that) there be court approval,” Simmons said.

Associate Justice Kaye Hearn reminded Simmons that Gov. Henry McMaster also called into question Wilson’s action.

McMaster’s letter, written to Wilson in August 2020, told Wilson the $75 million was grossly excessive and asserted that the state’s congressional delegation, not Wilson’s private lawyers, had done much of the final work that resulted in the settlement.

At that time, Wilson and the two firms disagreed, saying the private firms’ work had led directly to the politicians’ being able to apply the pressure to get a $600 million settlement from the U.S. Department of Energy.

“The governor’s not a party to this,” Simmons said.

Hearn also asked Simmons who drafted the fee agreement between Wilson and the two private law firms.

Simmons said he did not know.

Simmons also urged the justices not to issue a ruling that would “allow every citizen” to file a lawsuit protesting fees given to private lawyers by the attorney general.

But Few told him that there were only seven outstanding cases, including this one, being handled now by private attorneys hired by Wilson.

“Seven cases is not opening the floodgates,” Few told Simmons. “One of the problems we have around South Carolina is our judges sitting around with nothing to do, especially coming out of the pandemic. We got plenty of judicial resources to handle seven cases.”

Lawyers for the law firms include two lawmakers: Sen. Gerald Malloy, D-Darlington, and House Minority Leader Todd Rutherford, D-Richland. Wilson is represented by top Attorney General’s office appellate lawyers Emory Smith and Robert Cook. Malloy and Rutherford were in court Wednesday.

Crangle and the foundation are represented by Carpenter and Columbia attorney Jim Griffin (no relation to Judge Griffin).

This story was originally published April 6, 2022 at 2:10 PM with the headline "Justices question SC attorney general’s ‘right’ to give lawyers $75M for SRS settlement."