South Carolina Attorney General Alan Wilson had the power to pay a $75 million fee to private lawyers – including his former law firm – who negotiated a $600 million settlement over military plutonium stored in the state, the South Carolina Supreme Court ruled.
A public-interest group sued to block the fee, citing a state law requiring all money obtained through litigation to be deposited either in the general fund or in a special fund for mitigating environmental damage. That law includes an exception for “investigative costs or costs of litigation awarded by court order or settlement.”
South Carolina settled its case against the federal government without obtaining a court order approving the fees. But that doesn’t matter, the state’s highest court ruled in a Nov. 12 opinion. It was enough that a federal court approved the settlement, which included a clause directing South Carolina to pay its lawyers out of the $600 million.
The outside law firms were Willoughby & Hoefer, where Wilson worked earlier in his career, and Davidson & Wren.
“It would be absurd to permit the Attorney General to enter into a valid contract with a law firm but then have payment of the agreed-upon fee be at the discretion of another branch of government — here, the General Assembly — that is a stranger to the contract,” the South Carolina Supreme Court said.
The South Carolina Public Interest Foundation sued Wilson after he paid the fee, arguing the money must be appropriated by the legislature. A trial court dismissed the case for lack of standing and the Supreme Court reversed, ruling the foundation had “public interest standing” to sue on behalf of state citizens. The trial court dismissed the case again and this time the Supreme Court agreed.
The settlement followed years of litigation over the federal government’s obligation to remove tons of weapons-grade plutonium from the Savannah River Site in Aiken.
The Public Interest Foundation argued the fee was unreasonable, in part because some portion of the $600 million settlement was “rent” to store the plutonium in South Carolina until it can be moved. The Supreme Court rejected that argument, saying money is money and it doesn’t matter whether it is for rent or some other purpose. The law firms earned their fee either way, the court concluded.
“Countless hours were undoubtedly and necessarily expended by the law firms in setting strategy, reviewing documents, and coordinating and communicating with witnesses, political leaders, and various courts,” the court said.
The foundation also argued state politicians helped prod the Department of Energy to pay $600 million, far more than South Carolina originally sought. Whether politicians helped the process isn’t a question for the court to decide, the justices said.
