Settlement Language Can “Award” Fees and Contractual Fee Obligations Qualify as “Other Disposition Required by Law”: The South Carolina Supreme Court Clarifies § 1‑7‑150(B) and Forecloses Judicial Fee-Reasonableness Review Absent Statutory Authority

Introduction

In SC Public Interest Foundation v. Alan Wilson (2), the Supreme Court of South Carolina confronts a recurring question at the intersection of public finance, executive authority, and fee arrangements with private counsel: when the Attorney General settles a case on behalf of the State and has retained outside counsel on a contingency basis, must the gross settlement be deposited into the General Fund (or a legislatively created Litigation Recovery Account) before attorneys’ fees are paid? Center stage is South Carolina Code § 1‑7‑150(B), which directs how monies “awarded” to the State by judgment or settlement must be deposited, but contains exceptions for “investigative costs or costs of litigation awarded by court order or settlement” and “where some other disposition is required by law.”

The case arises from high-stakes litigation over defense plutonium at the Savannah River Site following Congress’s enactment of 50 U.S.C. § 2566 and later appropriations constraints. The Attorney General retained Willoughby & Hoefer, P.A. and Davidson & Wren, P.A. on a sliding-scale contingency to pursue complex, multi-front federal litigation and negotiations with the United States Department of Energy (DOE). After securing a $600 million settlement, the Attorney General paid $75 million in fees to the firms. The South Carolina Public Interest Foundation and John Crangle challenged the payment, arguing the funds first had to be deposited into the General Fund (or LRA), with any fee payment subject to legislative discretion, and further pressed for judicial review of the fee’s reasonableness.

The Court affirms in result, holding that the fee was payable directly to the firms under two independent statutory exceptions and that courts lack authority to conduct a reasonableness review absent a clear statutory mandate. The decision thus establishes two clarifying rules for § 1‑7‑150(B) and underscores separation-of-powers limits on judicial oversight of executive fee arrangements with outside counsel.

Summary of the Opinion

The Court interprets § 1‑7‑150(B) and holds that attorneys’ fees in this matter fall within two exceptions:
- Costs of litigation “awarded by court order or settlement”: The settlement instruments—particularly an Agreement to Voluntary Dismissal of Appeal—explicitly stated that the $600 million was inclusive of attorneys’ fees “which are reimbursed and awarded from payment of the settlement amount.” This language “awarded” fees by settlement.
- “Other disposition required by law”: The Attorney General’s fee agreement with the law firms is a valid contract; enforcing that contract is “required by law,” making direct payment of the fee an alternative lawful disposition of funds before deposit into the General Fund or LRA.
The Court rejects the request to remand for a judicial determination of the fee’s reasonableness. Absent a constitutional or statutory grant, South Carolina courts have no inherent authority to review the reasonableness of such fees; separation-of-powers principles forbid the judiciary from adding a requirement not present in the statute.
The Court also rejects the “rent” characterization of part of the $600 million, holding that, however labeled, the payment was a monetary settlement covered by the fee agreement. Even if some portion were “rent,” it was part of the settlement consideration to which the contingency arrangement applied.
Result: The Attorney General may pay the contracted contingency fee directly from settlement proceeds without first depositing the gross sum into the General Fund or LRA; no judicial reasonableness review applies.

Analysis

Precedents and Authorities Cited

The Court’s analysis is grounded in statutory interpretation and separation-of-powers principles, drawing on a series of South Carolina decisions and rules:

Statutory interpretation as a question of law: Sparks v. Palmetto Hardwood, Inc., 406 S.C. 124, 750 S.E.2d 61 (2013); CFRE, LLC v. Greenville County Assessor, 395 S.C. 67, 716 S.E.2d 877 (2011). The Court frames the core issue—what § 1‑7‑150(B) permits—as one of law for de novo resolution.
Absurdity canon: Kiriakides v. United Artists Communications, Inc., 312 S.C. 271, 440 S.E.2d 364 (1994). The Court refuses to read the statute to allow the Attorney General to make valid contracts yet deny him the power to fulfill them unless the General Assembly consents, deeming that result “plainly absurd.”
Enforcement of contracts “required by law”: Ellis v. Taylor, 316 S.C. 245, 449 S.E.2d 487 (1994). This supports the conclusion that paying fees under a valid fee agreement constitutes an “other disposition required by law” under § 1‑7‑150(B).
Separation of powers and judicial restraint:
- State ex rel. Condon v. Hodges, 349 S.C. 232, 562 S.E.2d 623 (2002) (tripartite separation and checks and balances); Hodges v. Rainey, 341 S.C. 79, 533 S.E.2d 578 (2000) (courts interpret, not rewrite, statutes); ArrowPointe Federal Credit Union v. Bailey, 438 S.C. 573, 884 S.E.2d 506 (2023) (public policy choices are legislative).
- Fullbright v. Spinnaker Resorts, Inc., 420 S.C. 265, 802 S.E.2d 794 (2017); Keyserling v. Beasley, 322 S.C. 83, 470 S.E.2d 100 (1996); Smith v. Tiffany, 419 S.C. 548, 799 S.E.2d 479 (2017); State v. Slocumb, 426 S.C. 297, 827 S.E.2d 148 (2019) (courts are not superlegislatures).
- Baddourah v. McMaster, 433 S.C. 89, 856 S.E.2d 561 (2021) (courts interpret constitutional or statutory terms but do not second-guess discretionary executive acts when authority is lodged in the executive). Invoked here to limit judicial involvement to construing § 1‑7‑150(B) and to reject adding a fee-approval requirement.
Professional conduct rules on contingency fees: Rule 1.5(b) and (c), RPC, Rule 407, SCACR. The fee agreement complied with the written-contingency requirements.
Examples where courts do have fee-review authority (by statute):
- Wrongful death: § 15‑51‑42(C) (court reviews and approves settlement terms including fees).
- Minors/incapacitated settlements: § 62‑5‑433(B) (court approval includes evaluation of fees and expenses).
By contrast, § 1‑7‑150(B) contains no such authorization for judicial fee review in state litigation handled by the Attorney General.

The opinion also recounts federal litigation milestones not as controlling precedent on the state-law question, but to contextualize the complexity and risk underpinning the contingency fee: injunction practice in the District of South Carolina (affirmed by the Fourth Circuit), intervention in Nevada litigation (Ninth Circuit proceedings), and the Court of Federal Claims litigation over § 2566 payments culminating in a $600 million settlement after an adverse summary judgment and pending appeal. These details bear on the value and risk of counsel’s work and the inclusion of fee language in the settlement instruments.

Legal Reasoning

1) The statutory framework: § 1‑7‑150(B)

Section 1‑7‑150(B) directs that “all monies” awarded to the State “by judgment or settlement” in actions brought by the Attorney General must be deposited in the General Fund, subject to enumerated exceptions:

Investigative costs or costs of litigation “awarded by court order or settlement”;
Monies for natural resource damages (Mitigation Trust Fund);
“Where some other disposition is required by law.”

Two of these exceptions resolve the dispute.

2) Exception one: Fees as “costs of litigation awarded by … settlement”

The settlement instruments matter. While the main Settlement Agreement states the $600 million is “inclusive of interest, with each party to bear its own costs, attorney fees, and expenses,” a subsequent Agreement to Voluntary Dismissal of Appeal (filed in the Federal Circuit) expressly provides the payment is “inclusive of amounts for interest and the State’s attorneys’ fees and other costs, which are reimbursed and awarded from payment of the settlement amount.”

The Court holds that this language “awarded” fees within the meaning of § 1‑7‑150(B), bringing the fee within the “costs of litigation … awarded by … settlement” exception. Accordingly, the attorneys’ fee portion of the settlement did not have to be first deposited into the General Fund or LRA before being paid to the firms.

3) Exception two: “Other disposition required by law” via contract enforcement

Independently, the Court reasons that payment of the contingency fee is an “other disposition required by law” because the fee agreement is a valid, enforceable contract the Attorney General had authority to make, and the law requires performance of lawful contracts. Reading § 1‑7‑150(B) to let the Attorney General contract for contingency counsel yet place actual payment at the future discretion of the General Assembly would be an “absurd” construction—contrary to both the statute’s text and the separation of powers. Thus, payment to counsel before depositing the balance into the General Fund or LRA is permissible as a disposition “required by law.”

4) No judicial authority to review “reasonableness” of the fee

The appellants alternatively sought a remand for a reasonableness hearing, pressing an argument that part of the $600 million represented “rent” for continued storage of plutonium until 2037 and should not be fee‑bearing. The Court rejects the framing and forecloses judicial reasonableness review:

Merits: The $600 million is a monetary settlement resolving claims over § 2566 economic and impact payments and plutonium removal obligations. Even if some portion could be characterized as “rent,” it remains part of the settlement consideration covered by the fee agreement.
Separation of powers: South Carolina courts have no inherent power to review fee reasonableness in this setting. Absent a constitutional or statutory grant—as exists in certain specific contexts (wrongful death, minor/incapacitated settlements)—courts cannot add a fee-approval prerequisite to § 1‑7‑150(B). The judiciary’s role ends with interpreting the statute’s text, not supplementing it with policy preferences.

Emphasizing the restraint reflected in Baddourah v. McMaster, the Court declines to append a judicial-approval overlay to § 1‑7‑150(B).

5) Even if review existed, the fee was contractually grounded and measured

The Court notes that, even on the appellants’ terms, the fee was calculated under the sliding‑scale schedules in the fee agreement—totaling $76.25 million by those scales—yet the firms accepted $75 million, or 12.5% of the gross recovery. The record also reflects multifaceted, risk‑laden work across multiple federal forums yielding not only the monetary settlement but also key injunctive relief and favorable positioning on plutonium removal obligations and potential future payments should removal milestones not be met.

Impact

The decision clarifies and stabilizes several important aspects of South Carolina public litigation practice.

Direct payment of contingency fees from settlements: When settlement instruments make clear that fees are included and “awarded,” the Attorney General may disburse fees to retained counsel without first depositing the gross proceeds into the General Fund or LRA.
Contractual obligations as “required by law”: Valid fee agreements with outside counsel furnish an independent statutory basis to pay fees directly as an “other disposition required by law” under § 1‑7‑150(B). This cements contract law as a functional conduit within the statute’s exceptions.
Limits on judicial involvement: Courts will not conduct fee‑reasonableness reviews in this context absent a statute expressly authorizing such review. If fee oversight is desired as a matter of policy, it is for the General Assembly to legislate.
Drafting implications for settlements: State negotiators should ensure settlement documents explicitly address fee inclusion and “award” language where appropriate. The Court’s analysis rests significantly on the settlement’s express treatment of fees.
Legislative options remain: The opinion invites, but does not require, legislative clarification concerning Attorney General fee practices (e.g., caps, approvals, reporting, or routing through designated accounts). Until then, § 1‑7‑150(B) is read to permit direct fee payments under the two recognized exceptions.
Continuity for complex public-interest litigation: By validating the Attorney General’s established practice of retaining contingency counsel and paying them directly from settlement proceeds, the Court reduces uncertainty that could otherwise chill private participation in high‑risk, high‑complexity state litigation.

Complex Concepts Simplified

“Awarded by … settlement”: An “award” of costs/fees need not come only from a judge’s fee order. If the settlement documents expressly state that fees are included and treated as awarded or reimbursed, that satisfies § 1‑7‑150(B)’s “awarded by … settlement” language.
“Other disposition required by law”: This catch‑all allows funds to be handled in another lawful way besides deposit into the General Fund or LRA. Enforcing a valid contract—including a fee agreement with outside counsel—is “required by law,” so paying fees under that contract fits this exception.
Contingency fee agreements: A fee paid only upon success, usually as a percentage of the recovery, documented in writing per Rule 1.5(c), RPC. Here, the Attorney General used sliding‑scale percentages tied to recovery and litigation posture, a common structure for complex matters.
Separation of powers: The Constitution divides power among legislative, executive, and judicial branches. Courts interpret statutes but do not rewrite them or add requirements. Executive actors exercise discretion within statutory authority, and legislatures set policy through statutes. This case reflects judicial restraint: no implied judicial fee‑approval process is read into § 1‑7‑150(B).
Public importance standing: In an earlier phase of this controversy, the Court recognized the appellants’ standing given the public significance of the issue, enabling merits adjudication notwithstanding typical standing hurdles.
General Fund vs. Litigation Recovery Account (LRA): § 1‑7‑150(B) generally routes monies recovered in AG‑led litigation to the General Fund unless an exception applies. A budget proviso created the LRA for certain litigation recoveries. This decision clarifies that exceptions—fees “awarded by settlement” and “other disposition required by law”—allow fee payment before deposit.

Conclusion

SC Public Interest Foundation v. Alan Wilson (2) provides definitive guidance on two fronts. First, it confirms that settlement instruments can “award” attorneys’ fees within the meaning of § 1‑7‑150(B), enabling direct payment of those fees to outside counsel. Second, it recognizes that paying a fee pursuant to a valid contingency agreement is an “other disposition required by law,” independently authorizing disbursement prior to deposit into the General Fund or LRA. The Court further reinforces separation‑of‑powers limits by declining to insert a judicial reasonableness review where the statute provides none, while acknowledging contexts where the General Assembly has expressly assigned courts such a role.

Practically, the ruling preserves the Attorney General’s traditional flexibility to retain and compensate private counsel for complex, high‑risk matters and signals to litigants and drafters the importance of precise settlement language on fee treatment. Normatively, it puts the policy ball in the General Assembly’s court: if broader ex ante or ex post oversight of such fee arrangements is desired, it must be enacted. Until then, § 1‑7‑150(B) functions with the two clarified exceptions at its core, and the judiciary will remain within its interpretive lane.