Should 2 law firms get $75M of SC’s $600M plutonium settlement? This lawsuit says no

A lawsuit filed by a government watchdog group and a Columbia lawyer challenges S.C. Attorney General Alan Wilson’s proposed $75 million in legal fees to two Columbia law firms for work they did to help obtain a $600 million settlement payment to the State of South Carolina.

John Crangle, a lawyer and longtime observer of state government ethics, and the S.C. Public Interest Foundation allege that the two firms didn’t do anywhere near enough work to justify a $75 million fee for their work in a long-running case against the U.S. Department of Energy.

The lawsuit also alleges the $600 million settlement was not a legal settlement — it was a political deal arranged by politicians, and therefore the law firms: Willoughby & Hoefer and Davidson Wren & DeMasters, both of Columbia.

Along with the lawsuit, attorneys Jim Carpenter, Jim Griffin and Badge Humphries requested an injunction seeking to halt any payment of money to the lawyers until the courts make a final decision on the matter.

“Our only response is this lawsuit has no merit,” said Robert Kittle, a spokesman for Wilson’s office.

A judge has not been appointed to hear the case, which was filed Friday in the Richland County Court of Common Pleas, also known as state civil court.

The case involved a 20-year dispute with the Department of Energy over tons of deadly plutonium that wound up in Barnwell County at the Savannah River Site as a result of a failed deal between South Carolina and the federal government to build a plant that would convert the deadly plutonium into a substance that could be used for peaceful nuclear purposes. Plutonium is used for building nuclear bombs.

The lawsuit said that under the settlement agreement, all $600 million in federal money must be deposited into the General Fund and “only the Legislature controls its appropriation.” Moreover, the “settlement agreement does not allocate any portion of the $600 million to attorneys’ fees,” the lawsuit said.

The award of $75 million in legal fees is not only “patently unreasonable,” but the private attorneys Wilson hired for the case didn’t do anywhere near enough work to justify such a fee, the lawsuit said.

Wilson’s lawyers “engaged in no discovery: no interrogatories, no depositions, no experts, no document requests. Instead, they drafted pleadings and wrote briefs to prove the Department of Energy is required to pay South Carolina penalties from money that has “been appropriated by Congress,” the lawsuit said.

“Wilson had no need to hire private counsel to address a relatively straightforward issue that government leaders ultimately negotiated,” the lawsuit said. (The money is to come from a special U.S. Department of Justice pool of fines. Attorney General William Barr signed off on the payment.)

The lawsuit said the settlement had no need for Wilson’s lawyers — the “agreement was a political resolution brokered by elected leaders, including Governor McMaster and Senator Graham.”

Moreover, the lawsuit said, under a fee agreement that the lawyers made with Wilson, the maximum amount they might be entitled to is $50.2 million, not $75 million. The agreement contains a sliding scale percentage provision, in which the lawyers working on the case get increasingly smaller percentages of any settlement amount as the amount awarded in the settlement increases.

As an example of the alleged questionable nature of Wilson’s agreement with the lawyers, the lawsuit alleges that one of Wilson’s law firms, Willoughby & Hoefer, is to get half a percent of $600 million, or $3 million just for writing a 46-page petition and reply — meaning that Wilson “intends to pay Willoughby & Hoefer over $65,000 per page for these filings.

The lawsuit asks that before any money is given out to private lawyers from the $600 million settlement, that a judge approve the amount. The money is supposed to be paid to South Carolina by early October, Wilson has said.

The lawsuit filed Friday is the latest public challenge to Wilson’s $600 million settlement.

Earlier this week, western counties in South Carolina sued Wilson, saying the $600 million South Carolina stands to get for settling the plutonium dispute should go to those counties, especially Barnwell and Allendale, because they suffer the “stigma” of having the plutonium in their area. Those counties allege they have also lost prospective businesses because few want to come to a place with such a potential threat to the environment.

And Gov. McMaster, after learning of the deal, wrote a letter to Wilson objecting to the $75 million fee as too high. McMaster also objected to the terms of the settlement, saying Wilson’s deal potentially allowed the federal government to leave plutonium at the Savannah River Site for years longer than necessary.

First Circuit Solicitor David Pascoe also wrote Wilson, objecting to the use of these settlement proceeds for attorneys’ fees on the grounds that state law requires the entire amount be deposited into the state’s general fund.

On Aug. 31, when Wilson announced the $600 million settlement, he said he knew some people might object to the $75 million fee to two law firms, but they had done excellent work without which the settlement would not have been made and were worth it.