Attorneys – Contingent Fee Agreements with Private Law Firms – Litigation Recovery Account

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The Attorney General has the authority to enter into contingent fee agreements with private law firms. Further, the $75 million fee is payable to the Law Firms without first having to be deposited into the State’s general fund or the legislatively created Litigation Recovery Account (LRA).

We affirmed the circuit court’s ruling.

We addressed the South Carolina Attorney General’s authority to enter into contingent fee agreements with private law firms. Attorney General Alan Wilson retained the Law Firms to represent the State in litigation against the U.S. Department of Energy (DOE) involving “defense plutonium or defense plutonium materials” the DOE transported into the State beginning in 2002. In 2016, Wilson and the Law Firms executed a fee agreement (amended in 2019), which provided the Law Firms would be paid on a sliding scale contingent fee basis. After the DOE paid the State $600 million to settle the case, Wilson transferred $75 million in attorneys‘ fees to the Law Firms. Appellants challenged the transfer in the circuit court, which dismissed the case, finding Appellants did not have standing. In 2022, we held Appellants had public importance standing and remanded the case to the circuit court “to consider the merits of Appellants’ claims.” Upon remand, the circuit court granted summary judgment to Wilson and the Law Firms, ruling Wilson had the threshold authority to enter into the fee agreements.

Appellants contended that, because the fees were not awarded by court order or settlement, subsection 1-7-150(B) requires the gross settlement proceeds to be deposited into the general fund or the LRA. Appellants argued the payment of attorneys’ fees would then be in the sole discretion of the General Assembly. Alternatively, Appellants argued that even if Wilson may pay the fees directly to the Law Firms, we should remand to the circuit court the issue of the overall reasonableness of the fees.

We held the Settlement Agreement, along with the plain language of the Agreement to Voluntary Dismissal of Appeal, “awarded” attorneys’ fees. Therefore, the portion of the gross settlement representing the attorneys’ fee is not required to be deposited into either the State’s general fund or the LRA under subsection 1-7-150(B) before the fee is paid to the Law Firms. We also held there is “some other disposition [] required by law” allowing the fee to be paid before the balance of the gross proceeds is deposited into the general fund or the LRA.

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. Consequently, Wilson’s contractual obligation to pay the fee constitutes “some other disposition [] required by law” under subsection 1-7-150(B); thus, the gross settlement funds need not be deposited into the general fund or the LRA.

Affirmed in result.

South Carolina Public Interest Foundation v. Wilson (Lawyers’ Weekly No. 010-055-25, 15 pp.) (George C. James Jr., J.) Appealed from Richland County Circuit Court (Daniel Coble, J.) James Mixon Griffin, Badge Humphries, and Margaret Nicole Fox, all of Griffin Humphries LLC, of Columbia, and James G. Carpenter, of The Carpenter Law Firm, of Greenville, for Appellants. John S. Simmons, of Simmons Law Firm, LLC, of Columbia, Gerald Malloy, of Malloy Law Firm, of Hartsville, and James Todd Rutherford, of Rutherford Law Firm, LLC, of Columbia, for Respondent Willoughby & Hoefer, P.A.; William H. Davidson II and Kenneth P. Woodington, both of Davidson & Wren, P.A., of Columbia, for Respondent Davidson & Wren, P.A., f/k/a Davidson, Wren & DeMasters, P.A.; Attorney General Alan McCrory Wilson, Solicitor General Robert D. Cook, and Deputy Solicitor General J. Emory Smith, Jr., all of Columbia, for Respondent Alan Wilson. South Carolina Supreme Court