Columbia law firms can get $75 million in disputed legal fees for plutonium deal

A court order freezing a $75 million fee that S.C. Attorney General Alan Wilson awarded two Columbia law firms for purported legal work in a state-federal plutonium dispute has been lifted.

The order was lifted late Wednesday afternoon by state circuit Judge Alison Lee and allows Columbia law firms Willoughby & Hoefer and Davidson Wren & DeMasters to begin spending the $75 million however they see fit.

The funds had been temporarily frozen by Lee in response to a citizen activist lawsuit that raised questions about exactly what the two law firms did to earn a fee of that magnitude and whether Attorney General Wilson had sole authority to disburse that money.

In her 14-page order, Lee said that Wilson — who worked for the Willoughby & Hoefer law firm before being elected Attorney General in 2010 — had the authority to disburse the money to the law firms.

“The Attorney General is the State’s chief legal officer, and he properly exercised his authority to contract with the Willoughby & Hoefer law firm to represent the State in its action against the United States and to pay them pursuant to that contract from the settlement proceeds,” Lee wrote.

Willoughby & Hoefer had the contract and apparently will pay some of the $75 million to the Davidson law firm. The contract the Willoughby firm had with Wilson had a downward sliding scale that tied the fee to a percentage of any award the state got, which turned out to be 12.5% of the total $600 million, or a $75 million fee. The contract set no cap on the total fee. The firm worked on contingency, meaning had no settlement been reached, they would have gotten nothing.

The $75 million fee the lawyers can now spend comes directly out of the $600 million in public money designated for South Carolina in the plutonium settlement agreement.

Although the law firms did some legal work in the case, the final settlement agreement was hammered out by Republican politicians, including Gov. Henry McMaster and U.S. Sen. Lindsey Graham. They negotiated with Trump administration officials in Washington to get the $600 million paid out of a special fund administered by the Department of Justice. Trump’s Attorney General William Barr signed off on the deal.

An attorney for the activists vowed to continue the fight over the issues raised by the lawsuit.

“We have lost this battle,” said attorney Jim Griffin on Thursday, “but we plan to take this to the highest court we can get to — the (S.C.) Court of Appeals or the (S.C.) Supreme Court.”

Griffin filed the lawsuit on Sept. 25 in Richland County state court on behalf of citizen activist John Crangle, a Columbia lawyer, and the S.C. Public Interest Foundation, a group that has for years filed lawsuits seeking more accountability and transparency in how public agencies spend taxpayer money.

In their lawsuit, Crangle and the PIF had asked the judge to grant them “standing,” or the ability to file a lawsuit against the fee, even though they had no direct ties to the $75 million fee or to the $600 million plutonium settlement. Their lawsuit claimed that they were raising a matter “of significant public importance” on which future guidance is needed, and they therefore deserved “standing.”

But in her order, Lee said the citizen activists didn’t qualify for standing because Wilson had legal authority to disburse the money and so any court ruling of hers would not provide guidance should a similar matter arise in the future.

To fight the citizen lawsuit, the Willoughby firm had hired two veteran law-legislators, Rep. Todd Rutherford, D-Richland, and Sen. Gerald Malloy, D-Darlington, both of whom play roles in electing state judges such as Lee. Rutherford is a member of the Judicial Merit Selection Commission, which screens judges’ qualifications, and Malloy is a member of the Senate Judiciary Committee.

Late Wednesday, Barnwell and Colleton counties, who may be owed part of the $600 million settlement money because they are in the part of South Carolina affected by the plutonium, filed motions seeking to intervene in the citizen activist lawsuit.

In the event that the citizen activist lawsuit about lawyers’ fees is successful and the fees “must be returned,” Barnwell and Colleton counties, they may be entitled to some of the $75 million, the counties said in their filing.

The counties are represented by Columbia lawyers Bakari Sellers, Pete Strom and John Alphin, and Chris Wilson of Bamberg.

Rutherford on Thursday had no comment because, he said, the suit is still pending.

Wilson’s office also declined comment. “Since the plaintiffs plan to appeal, we have no comment since it’s still pending litigation,” said Wilson spokesman Robert Kittle.

Willoughby did not respond to an email asking for comment on the case and how much his firm was giving to the Davidson firm.

This story was originally published October 15, 2020 at 3:03 PM.