The S.C. Supreme Court has overturned almost $11 million in verdicts levied against Charleston lawyer Paul Hulsey and ordered the civil cases sent back to circuit court.
Hulsey was sued several years ago for defamation by Charleston businessmen Lawton Limehouse and Lawton Limehouse Jr.
They operated L&L Services, a staffing agency that rented several homes in North Charleston — homes that were raided by the city and fined for overcrowding and inadequate heating and plumbing.
Shortly after the raids, Hulsey filed a lawsuit against L&L services on behalf of six of its former employees. In April 2004, Hulsey told The Post and Courier that L&L “created a perfect racketeering enterprise, just like (fictional HBO mobster) Tony Soprano” and that the business set “the community back 150 years.”
The lawsuit accused the staffing company of racketeering by making fake federal documents, cheating workers out of overtime pay and housing them in rundown properties.
The U.S. attorney looked into the matter but did not bring charges. The lawsuit was never certified as a class action and was settled for $20,000, according to the S.C. Supreme Court ruling.
Meanwhile, the Limehouses sued Hulsey for defamation. When their cases were moved from federal court to state court, a circuit judge found Hulsey in default for missing a deadline to respond.
Hulsey never had a chance to defend himself, and separate trials were held only to establish damages. Hulsey was hit with a $7.4 million judgment for the father and with a $3.6 million judgment for the son. In 2011, the S.C. Court of Appeals upheld those verdicts.
The S.C. Supreme Court’s recent ruling set aside those awards and ordered the case back to circuit court.
Robert Hood, an attorney for Hulsey, said he and Hulsey were pleased with the result.
“We look forward to finally telling our side of the story, which was never heard before,” Hood said. “We welcome the opportunity to defend this case fully on the merits.”
Frank Cisa, the Limehouses’ attorney, said he was disappointed on behalf of his clients.
Cisa said he is not sure if the case will start from scratch or will resume at the stage of establishing damages. “It depends on how you read the Supreme Court’s order,” he said. “It just depends on how the circuit court looks at it.”
The Supreme Court order said the lower court erred by finding Hulsey in default. It cited different federal precedents and said while it usually follows precedents set by the 4th U.S. Circuit Court of Appeals, that is not mandatory.
“Admittedly, this conclusion appears to elevate form over substance and, in turn, may be viewed as harsh considering the significant verdicts,” said the Supreme Court ruling. All four judges who heard the case concurred with the result.
Reach Robert Behre at 937-5771.