Layman v. State, 376 S.C. 434

Summary

The Supreme Court of South Carolina reviewed an award of attorneys' fees arising from litigation over amendments to the TERI retirement program. The court held that the State and South Carolina Retirement System were not substantially justified in defending a breach of an unambiguous contract and that fees were available under South Carolina Code section 15-77-300. It further held that calculating fees as a percentage of the beneficiaries' recovery was improper under the fee-shifting statute and that the $8.66 million award was unreasonable.

Holdings

1. The State and Retirement System were not substantially justified in defending their breach of an unambiguous contract with pre-Act TERI participants, so TERI plaintiffs' counsel was entitled to attorneys' fees under S.C. Code Ann. section 15-77-300.
2. The State and Retirement System could both be liable for attorneys' fees under the state action statute, and assessing fees for defending the contract breach did not violate separation-of-powers principles.
3. Calculating attorneys' fees under the state action fee-shifting statute as a percentage of the TERI participants' recovery is improper.
4. The proper method for determining reasonable attorneys' fees under the state action statute is a lodestar calculation based on reasonable hours and rates, subject to an appropriate multiplier and recoverable expenses. The revised reasonable fee was $1,075,701.74.

Questions Presented

1. Whether the State and South Carolina Retirement System were entitled to avoid statutory attorneys' fees because they acted with substantial justification in defending the underlying litigation.
2. Whether the circuit court properly treated the Retirement System as merely a stakeholder and whether separation-of-powers principles barred an attorneys' fee award.
3. Whether attorneys' fees under the state action statute may be calculated as a percentage of the prevailing party's recovery.
4. What methodology and amount constitute reasonable attorneys' fees under the state action statute.

Disposition

other