COLUMBIA -- The S.C. Supreme Court this month will consider whether two Columbia lawyers should receive at least $8 million in attorney fees for their work in a state retirees' case.
The case is one of nine that the five-member court will hear to kick off its 2007-2008 term of court. Last fiscal year, the justices issued 252 opinions, declining to consider more than 500 appeals.
Justice Donald Beatty of Spartanburg will hear his first case as the high court's newest member since 2000. State lawmakers elected him in May to succeed E.C. Burnett of Spartanburg, who retired effective last week after 12 years on the court.
In the state retirees' case, a circuit judge in February ordered the state to pay Dick Harpootlian and Cam Lewis a total of $8.66 million in attorney fees for representing thousands of state retirees who returned to work under a special incentive program but were forced to continue to contribute toward their pensions.
Sign Up and Save
Get six months of free digital access to The Herald
The S.C. Supreme Court in May 2006 said the state broke an agreement with retirees who signed up for the Teacher and Employee Retention Incentive program before July 1, 2005. The justices ordered the state to issue refunds for the pension contributions to about 14,000 retirees; nearly $38 million was paid, court papers show.
"I want my money," said Lewis, who has been involved in many lawsuits against government agencies, when contacted last week. "We got $8.6 million after we won a $120 million case for the state retirees. I don't think that's unreasonable; it's less than 10 percent."
The ruling would save retirees an estimated total of $124 million over the five-year period under the TERI program, according to court papers filed by Lewis and Harpootlian.
Harpootlian, a former Richland County solicitor and former state Democratic Party chairman, didn't have an immediate response when contacted last week.
The lawyers in court papers suggested they deserved a $23 million fee.
The state contends that, based on recorded work hours, Lewis and Harpootlian would earn more than $6,000 per hour if they receive $8.66 million. The lawyers should be paid $19,197 in total fees, based on a 40-percent contingency fee arrangement they made with the only four named plaintiffs in the case, the state said in court papers.
"The results in this case so far are unprecedented," said Mike Sponhour, spokesman for the State Budget and Control Board, which oversees the state retirement system, when contacted last week.
"No court has ever awarded fees of this amount, or anything close to it, against the state, especially where the state agency simply was following the law as enacted by the General Assembly."
Although they are not parties to the lawsuit, state Senate president Pro Tem Glenn McConnell and House Speaker Bobby Harrell filed a "friend-of-the-court" brief.
If the $8.66 million award were affirmed, the Charleston Republicans wrote, the high court "would set a dangerous precedent that could have a devastating effect on worthy state projects, if applied during lean budget times.
"The balance should never tip in favor of enriching lawyers while risking the availability of funds for critical public services."
They pointed out, for example, that the $8.66 million could buy 119 school buses and fund the annual base student cost for 3,498 students.
Contacted last week, David FitzGerald of Chapin, one of four named plaintiffs in the class-action lawsuit, said he doesn't know what his lawyers deserve.
"My opinion has always been that it is a decision for the courts to make," he said.
In their ruling last year, the justices ordered a lower court to determine how much Harpootlian and Lewis should get paid based on the "actual amount of work performed, expenses incurred, and the benefit obtained for all the old TERI participants."
The court said the attorney fees could not come out of the plaintiffs' refunds but would be paid separately by the state.
After Circuit Judge John Breeden's February ruling, both sides appealed to the Supreme Court.
In addition to the approximate $38 million paid in refunds, the state also would lose about $72 million in "present-day value" of future revenues from pension contributions, the state said in court papers.
Breeden based his award of attorney fees on 21 percent of the approximate $38 million and 1 percent of the $72 million.
Lewis and Harpootlian in court papers said Breeden should have applied the 21 percent rate to the total $110 million, citing examples of similar calculations in other class-action suits.
Oral arguments for the case are set for Sept. 19. A ruling will be issued later.
also before the court
The state Supreme Court this month will consider two other important cases. Oral arguments in both cases are set for Sept. 20. Rulings will be issued later.
Sexual assault case
Whether the S.C. Court of Appeals should have vacated the convictions of an Aiken County man accused of sexually assaulting his stepdaughters when they were about 6 years old.
Stanko murder case
Whether Stephen Stanko, who was sentenced to death last year after he was convicted of killing his live-in girlfriend and raping a teenage girl in the home they shared in Georgetown County, should get a new trial or sentence.
- Rick Brundrett