Ex parte Condon
| Decision Date | 30 June 2003 |
| Docket Number | No. 25670.,25670. |
| Parties | Ex Parte Charlie CONDON, Attorney General for the State of South Carolina, Appellant, In re C. Bruce Littlejohn, on behalf of himself and all others similarly situated, Respondent, v. STATE of South Carolina, the South Carolina Department of Revenue, Wal-Mart Stores, Inc., CVS Pharmacy, Inc., KMART Corporation, Eckerd Corporation, d/b/a Eckerd Drugs and all others similarly situated, S.C. Hyatt Corporation, and all others similarly situated, Piggly Wiggly Retail Stores, Inc., Piggly Wiggly # 2, Inc., Piggly Wiggly # 75, Inc., Harris Teeter, Inc., Winn-Dixie Raleigh, Inc., and all others similarly situated, Respondents. |
| Court | South Carolina Supreme Court |
Deputy Attorney General Treva G. Ashworth, Assistant Deputy Attorney General Robert D. Cook, Assistant Deputy Attorney General J. Emory Smith, Jr., all of Columbia, for Appellant.
A. Camden Lewis and Ariail E. King, both of Lewis, Babcock & Hawkins, of Columbia; and Richard A. Harpootlian, of Columbia, for Respondent C. Bruce Littlejohn. Ronald W. Urban, of South Carolina Department of Revenue, of Columbia, for Respondents State of South Carolina and South Carolina Department of Revenue. Burnet R. Maybank, III, of Nexsen, Pruet, Jacobs & Pollard, of Columbia; and Paul A. Dominick, of Nexsen, Pruet, Jacobs, Pollard & Robinson, of Charleston, for Respondent Wal-Mart Stores, Inc. Bernie W. Ellis, of McNair Law Firm, of Greenville, for Respondent CVS Pharmacy, Inc. Erik P. Doerring, of McNair Law Firm, of Columbia, for Respondents KMART Corporation and S.C. Hyatt Corporation. B. Rush Smith, III, of Nelson, Mullins, Riley & Scarborough, of Columbia; and John C. von Lehe, Jr., of Nelson, Mullins, Riley & Scarborough, of Charleston, for Respondents Eckerd Corporation d/b/a Eckerd Drugs and Winn-Dixie, Raleigh, Inc. Marvin D. Infinger, of Haynsworth Sinkler Boyd, of Charleston, for Respondents Piggly Wiggly Retail Stores and Piggly Wiggly # 2, Inc. Charles H. Williams, of Williams & Williams, of Orangeburg, for Respondent Piggly Wiggly # 75, Inc. William H. Morrison, of Moore & Van Allen, of Charleston, for Respondent Harris Teeter, Inc.
Gene M. Connell, Jr., of Kelaher, Connell & Connor, P.C., of Surfside Beach, for Amicus Curiae.
Appellant, Attorney General Condon ("Attorney General"), filed an objection to the circuit court's award of attorneys' fees to counsel for Respondents ("Respondents").
Respondents filed a class action suit on behalf of C. Bruce Littlejohn, and those similarly situated against the State of South Carolina and the Department of Revenue ("DOR") on July 10, 2000. The complaint alleged that plaintiff Littlejohn and other South Carolina citizens 85 years of age and older had failed to receive the one percent sales tax exemption provided for in S.C.Code Ann. §§ 12-36-2620 and 12-36-2630 as a result of the action and/or inaction of certain retailers and the State and DOR.1 The Complaint alleged that the State had been unjustly enriched by the illegal tax collections, and requested a refund of taxes paid by the plaintiffs.
Subsequently, the State and DOR filed a motion to dismiss the complaint on grounds that the circuit court lacked subject matter jurisdiction. While the motion to dismiss was pending, plaintiffs amended their complaint to add several retail establishments as defendants.2 The circuit court held a hearing to consider the State's motion to dismiss, and took the motion under advisement. While the motion was under advisement, the parties continued discovery, and ultimately commenced settlement negotiations. In September 2001, the parties reached a settlement.
The settlement agreement specified that the State and DOR would refund a total of $7.5 million to the defendant retailers and hotels to be held in trust and refunded to those members of the plaintiffs' class that made a claim. The agreement contained a mathematical formula for calculating the refund due to each class member. The settlement agreement left the power to calculate and award attorneys' fees with the circuit court under the following guidelines:
The Court shall determine the appropriate amount of attorneys' fees for Plaintiff class counsel. The Plaintiffs recognize that none of the Defendants shall recommend or otherwise take a position on the amount of attorneys' fees and that the amount of such attorneys' fees shall be decided by the Court; provided, however, Defendant State of South Carolina may file with the Court a statement that members of the Budget and Control Board recommend to the Court that the Plaintiff's class counsel attorneys' fees be set at an amount that maximizes payment to class members and recommend that attorneys' fees be based on actual refunds paid to the Plaintiff class. Nothing in this agreement prohibits public officials, as individuals or as public officials, from discussing the amount of attorneys' fees awarded by the Court or taking a position before the Court about such fees.3
On September 21, 2001, the circuit court gave preliminary approval to the settlement, set a thirty day time period for objections, and scheduled a hearing for December 27, 2001, in order to review any objections, give final approval of the settlement, and determine attorneys' fees. The Attorney General, appearing for the first time in this action, filed objections to the award of attorneys' fees in the settlement agreement. None of the parties objected to the settlement or to the award of attorneys' fees. At the December hearing, the Attorney General argued that attorneys' fees should be based on a reasonable hourly rate.
The circuit court gave final approval to the settlement agreement in January 2002, and issued an order awarding attorneys' fees in the amount of 28% of the $7.5 million common fund ($2.1 million), plus $52,174.22 in costs. The circuit court's order awarding fees includes a discussion of the procedural history of the case and of Respondents' efforts in initiating and settling the case. In addition, the circuit court used the factors for establishing a reasonable fee enumerated in Rule 1.5, Rules of Professional Conduct, Rule 407, SCACR, to determine the appropriate fee. The court's order included application of the following factors: (1) the novelty and difficulty of the issues, (2) the skills of counsel, (3) the time and labor of counsel, (4) the likelihood that acceptance of this case would preclude other employment by counsel, (5) the fees customarily charged in similar cases, (6) the amount involved and the award obtained, (7) the time and limitations imposed by the client, (8) the nature and length of the professional relationship between the client and counsel, (9) the experience, reputation, and ability of counsel, and (10) whether the fee contemplated was fixed or contingent. See Jackson v. Speed, 326 S.C. 289, 486 S.E.2d 750 (1997)
().4 After applying the factors to the present case, the circuit court found that an award of 28% of the common fund, plus costs, was a fair and reasonable attorneys' fee.
The Attorney General filed a notice of appeal from the order awarding attorneys' fees and costs. This Court certified the case for review before the appeal pursuant to Rule 204(b), SCACR. Respondents filed a motion to dismiss the appeal on grounds that the Attorney General lacked standing to appeal. This Court denied the motion to dismiss, but did so "without prejudice to [Respondents'] right to argue this issue in its brief." The following issues are presently before the Court:
Respondents argue that the Attorney General's appeal from the circuit court's award of their attorneys' fees should be dismissed. For several reasons, we agree.
In support of their contention, Respondents cite Bailey v. North Carolina, 353 N.C. 142, 540 S.E.2d 313 (2000). In Bailey, plaintiffs (a consolidated class of state and federal retirees) sued North Carolina over the constitutionality of a tax exemption cap on retirement benefits. Id. After extensive litigation, in which the State was represented by the Attorney General, the State reached a settlement with the plaintiffs, and the circuit court awarded attorneys' fees to plaintiffs' counsel. Id. Subsequently, the Attorney General appealed from the award of fees, alleging that the fees awarded were excessive and against the public interest.5 Id. Ultimately, the North Carolina Supreme Court dismissed his appeal as improper and also held that the Attorney General was precluded from seeking review of attorneys' fees by way of a petition for a writ of certiorari. Id.
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