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Article published Jul 6, 2003
Supreme Court decision fails state's elderly
taxpayers
It is unfortunate for South Carolina's elderly
citizens that courts don't take a dim view of the attorney greed that grows from
lawsuits such as the one decided in favor of this state's older
taxpayers.
The state Supreme Court failed elderly citizens when deciding last
week that it was reasonable for attorneys to pick up more than $2 million in
fees for representing taxpayers over the age of 85 in a class-action lawsuit
against the state.
It was alleged in the lawsuit that the state overtaxed its
elderly citizens. State law provides that residents 85 and older are exempt from
paying the state's full 5 percent sales tax, paying 4 percent instead. It was
agreed that elderly citizens were being charged the full tax, and the Department
of Revenue agreed to return $7.5 million to as many as 56,000 people.
Lawyers
for those elderly citizens, however, wanted nearly a third of the total
settlement, while those who had not received the tax break guaranteed by state
law would get about $30 each for up to three years. So far, fewer than a fifth
of eligible residents have received a refund.
There is no reason why this
group of taxpayers, the very ones who paid the excessive tax now being returned,
should get so little while the attorneys put millions into their pockets.
The
courts, however, from a Circuit Court ruling last October to the Supreme Court
decision last week, failed to recognize the need to better supervise
class-action lawsuits. Such actions should be a course of redress for wrong
caused to a class of people rather than a vehicle for creating a jackpot for
attorneys.
In this case, the courts have allowed an unfair distribution of
funds. The state agreed that it overcharged citizens over 85, and the money the
state agreed to pay should go to that group of people, with reasonable fees paid
to their attorneys for the time they spent pursuing their case.
It is
unreasonable to expect those who suffered the actual damages to each get
typically less than 1 percent of a settlement while attorneys get nearly 33
percent.
The courts should take a more active role in establishing attorneys'
fees in such circumstances. They should act to protect members of these
class-action lawsuits from attempts of their lawyers to grab an unfair portion
of their damages.