What Happened?
What would an extra $75 million mean to South Carolina? That amount of money could fund more than 5,000 students for an entire school year. It is nearly the entire public safety budget for the city of Columbia last year. The state could use it to pay down some debt or put it toward fixing the roads. Instead, when Attorney General Alan Wilson won a windfall for the state in court, he directed $75 million of it toward his former law firm in attorney’s fees. South Carolina Public Interest Foundation (SCPIF) is working to get that money back into the public coffers, and making sure something like this can never happen again.
There has been a long history of South Carolina storing plutonium at the Savannah River site. Former Gov. Hodges negotiated with the Department of Energy (DoE) to get the nuclear waste out of South Carolina, which would generate a lot of income for the areas around Aiken and Barnwell counties. As part of the deal, the DoE would have to create a MOX system that would recycle the waste and make it usable. There was a deadline put in place to get the waste out of South Carolina, along with penalties for each year they failed to meet the deadline.
When the MOX facility was not created by the agreed-upon date and the waste was not removed, lawyers from South Carolina Attorney General Alan Wilson’s former law firm approached him about filing a suit against the DoE to collect the fines that were due under the law. Of course, that would also mean a large payday for them. SCPIF Attorney Jim Griffin says it was a straightforward legal argument. “Really, the only issue that was litigated in the case was whether the Department of Energy had to pay that money from its existing budget, or if Congress would have to make a special appropriations to the Department of Energy to pay South Carolina that penalty,” he explained.
Before the ruling was complete, South Carolina settled with the DoE. Initially, the state had asked for $100 million, then $200 million when they needed to refile in a Washington, D.C. federal court. But the final settlement was for $600 million. Why? Because AG Wilson agreed to let the department store their waste in South Carolina for another 15 years. However, only $525 million of that money will go to the state, because Wilson paid $75 million to his former colleagues in legal fees. And that’s what this case is about.
What are the Next Steps?
$75 million is a lot of money, and it shouldn’t be wasted. “Allowing one person in public office to have the authority to dole out $75 million…breeds corruption,” Griffin said. “Lawyers are going to be clamoring for the next case. There’s just so much temptation for a potential windfall like this. I’m not casting aspersions on any person involved in this case, but it does create an environment of that’s just ripe for corruption and abuse.”
This case is now before the South Carolina Supreme Court, where SCPIF hopes they will adopt the position that there are restrictions on an Attorney General’s ability to provide attorneys fees on contingency fee cases. If they decide otherwise, the legislature should step in and create those restrictions.
“There needs to be guardrails around this,” Griffin said. “if you adopt the Attorney General’s position, there’s nothing that would prohibit the Attorney General from paying these lawyers $590 million of the $600 million settlement.” Instead, fees in this case should be distributed similarly to the way the were in large tobacco settlements and opioid cases—through a court hearing or an arbitration panel.
There’s an old saying in law, that the test of whether or not something has gone too far is if it “shocks the conscience.” These attorney fees certainly do that. “When I read about this,” he said, “I was upset.”
Click here for the link to the up to date case materials for the South Carolina Supreme Court case
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