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Columbia law firms can keep $75 million state payout for giant nuclear waste settlement

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SRS MOX, High Flyer, Aerial (2020_10_14 copy)

The federal government brought plutonium to South Carolina to process it at a new plant, but it walked away from the facility in 2018. The U.S. Department of Energy recently agreed to pay the state $600 million for keeping the material here.  A South Carolina judge tossed a request to block a controversial $75 million payout to private attorneys in the settlement. File/High Flyer/Provided

COLUMBIA — A South Carolina judge tossed a request to block a controversial $75 million payout to private attorneys in the state’s enormous legal settlement with the U.S. government over unwanted plutonium.

The decision from Circuit Court Judge Alison Renee Lee on Wednesday granted a significant victory to state Attorney General Alan Wilson and the two Columbia law firms he insisted he had the legal right to pay, no matter the dollar figure.

Lee backed that argument, ruling Wilson was acting under the state’s obligations of a legal contract in paying lawyers’ their cut of the $600 million settlement.

The judge rejected arguments that state law limits control of the settlement proceeds to the Legislature, the key contention of the legal challenge filed by a citizens’ watchdog group. That group, S.C. Public Interest Foundation, also has no legal ground to act as plaintiff on behalf of all state taxpayers, Lee ruled.

The judge’s order gives two Columbia law firms — Willoughby & Hoefer and Davidson, Wren & DeMasters — the authority to spend their fees that have already been transferred by Wilson's office.

An attorney for the plaintiffs — the foundation and longtime Columbia ethics watchdog John Crangle — said his clients intends to file an appeal.

Because of the public interest in the case, the matter ought to ultimately be decided by the state Supreme Court, Columbia lawyer Jim Griffin said.

“They can go ahead and spend the money,” Griffin said. “But if we win, they have to give it back. They will proceed at their risk.”

A spokesman for Wilson did not return a request for comment.

Wilson, a Republican, had negotiated the attorneys’ fees out of the settlement with the U.S. government after a years-long fight over a stockpile of weapons-grade plutonium stored at the Savannah River Site near Aiken. The settlement gave the federal government until 2037 to remove the plutonium stored at the site and prevents South Carolina from suing until 2042.  

The case had been closely watched for weeks after Wilson’s decision drew a public rebuke from Gov. Henry McMaster and 1st Circuit Solicitor David Pascoe, who accused Wilson of “political cronyism.”

Wilson worked at Willoughby & Hoefer before he was elected attorney general in 2010.

To help make the case that the attorneys should keep the money, the firms retained two of the state’s most prominent lawyer-lawmakers: House Minority Leader Todd Rutherford and Sen. Gerald Malloy, both Democrats.

Rutherford is one of six lawmakers serving on the 10-member Judicial Merit Selection Commission, which screens judges before the General Assembly votes on their appointments. Rutherford also supported Lee’s unsuccessful bid for a seat on the Court of Appeals last year. South Carolina is one of two states in which the Legislature directly selects judges.

As point person for the defense in the Columbia lawsuit, Rutherford contended that state law gives the attorney general control over “costs of litigation,” arguing that attorneys’ fees are part of those costs.

The plaintiffs had argued that state law gives complete control of such matters to the General Assembly, and that the attorney general does not have “unfettered discretion” to pay out settlement money on his own.

In her 15-page order, Lee backed Rutherford’s argument, describing the state law as “unambiguous” in granting the attorney general authority to “pay cost of litigation from the settlement proceeds.”

Rutherford argued the attorneys’ could have collected even more money. He noted that their cut, roughly 12 percent of the overall $600 million settlement, was well under typical rates for legal fees in large settlements, which occasionally are as high as 40 percent.

Follow Joseph Cranney on Twitter @joey_cranney.

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