Fight heats up in $75 million law firm fee in SC Attorney General’s plutonium deal
Two Columbia law firms that S.C. Attorney General Alan Wilson awarded a $75 million fee to for alleged work in helping arrange a $600 million settlement in a state-federal dispute over plutonium are fighting a lawsuit that questions whether the firms should have gotten that much money.
The law firm of Willoughby & Hoefer, which was wired the $75 million fee last week at Wilson’s direction, has filed a petition in the S.C. Court of Appeals asking that court to dissolve an order by a state circuit judge requiring the Willoughby firm to show up at a Wednesday hearing at the Richland County courthouse.
The law firm of Davidson, Wren & DeMaster, which also did work on the plutonium settlement, is slated to get an undisclosed percentage of the $75 million fee, is also opposing the freezing of the $75 million. It too has been ordered to appear in court on Wednesday.
Late Tuesday, the S.C. Court of Appeals, in a ruling for the court signed by Judge Stephanie Pendarvis McDonald, rejected the law firms’ request to block Wednesday’s hearing from going forward.
Wednesday’s hearing will be about whether a court order freezing the $75 million fee paid to Willoughby & Heofer should stay in place while a lawsuit questioning the fee goes forward. Any hearing requiring the law firms to produce records about actual work they did would come later.
The order from state Judge Alison Lee freezing the $75 million was granted after a request by John Crangle, a Columbia lawyer, and a government watchdog group, the S.C. Public Interest Foundation, filed a lawsuit Sept. 25 seeking a court determination of whether the $75 million fee is reasonable and whether it should have been approved by a judge.
In their petition to the Court of Appeals, Willoughby & Hoefer asserted they did plenty of legal work to deserve the $75 million fee and, besides, they claim, the fee is the result of a lawful contract signed by the firm and the Attorney General’s office. The petition spells out a number of appeals and actions the firm did in arriving at the $600 million settlement.
As calculated by that contract, that $75 million is 12.5% of the $600 million, said Willoughby & Hoefer in their petition to the Court of Appeals.
In another wrinkle to a case that has already generated hundreds of pages of legal filings, Columbia attorney Jim Griffin, who represents Crangle and the S.C. Public Interest Foundation, filed a request with the S.C. Supreme Court asking the high court to hear their case. The State Supreme Court is above the Court of Appeals.
In his filing, Griffin alleged that all the money from the $600 million settlement agreement should have gone into the general fund of the General Assembly, where spending could be determined by lawmakers, and not the Attorney General. The Attorney General has no constitutional authority to appropriate funds, Griffin argued.
Moreover, the entire $600 million was supposed to go to the state to compensate the state for damages and economic losses incurred by South Carolina having to store the plutonium for the last 20 years and what may be 17 more years, Griffin alleged.
It should be up to a court of law, not the Attorney General, to hear evidence about what is fair compensation for the law firms, Griffin argued.
The $600 settlement was not directed by a court — in the end, it was a political settlement arrived at with the help of Gov. Henry McMaster and U.S. Sen. Lindsey Graham, R-S.C. The money is to come out of a special judgment fund overseen by the U.S. Department of Justice, whose chief is Attorney General William Barr.
The weapons grade plutonium in question, located in Barnwell County, had been brought to South Carolina years ago as part of an agreement between South Carolina and the federal government. Under the agreement, the federal government would build a factory to convert the plutonium, a deadly radioactive substance, into a form that could be used for peaceful purposes. But the factory, which would have cost billions, was never built.
The Attorney General’s office hired private lawyers to help him win a lawsuit that would force the federal government to get rid of the plutonium and recover any financial damages for the state. According to a contract in the case, they were hired on a contingency basis and would get a percentage of the funds recovered.
Wilson has strongly defended the $75 million fee, saying the lawyers not only did a lot of legal work, but they also came up with a creative legal strategy that let to the final settlement.
This story was originally published October 6, 2020 at 1:23 PM.