Nancy S. Layman, David M. Fitzgerald, Vicki K. Zelenko, Wyman M. Looney and Nancy Ahrens, on behalf of themselves and all others similarly situated, Petitioners,
The State of South Carolina and The South Carolina Retirement System, Respondents
H. Toal C.J.
4, 2006, this Court issued an opinion holding that
respondents breached their contract with TERI participants
who joined the TERI program, originally enacted in 2001,
prior to July 1, 2005 (old TERI participants), by forcing
them to make retirement system contributions. Layman v.
State of South Carolina, Op. No. 26146 (S.C. Sup. Ct.
filed May 4, 2006). We further ordered that all retirement
system contributions withheld from those TERI participants be
returned to them with interest and that no further
contributions from them shall be required. Id.
Finally, we remanded the issue of breach of contract as it
relates to working retirees to the trial court because the
record before us does not allow us to make the factual or
legal inquiry necessary to determine if a binding contract
existed between the State and the working retirees regarding
the making of further retirement system contributions.
parties have now filed several motions. We will address
respondents' petition for rehearing first. We deny the
petition with regard to Arguments I and II.
deny the petition as to Argument III, but will analyze the
arguments made therein. Respondents contend this Court
impugned the integrity of counsel by labeling as a complete
misrepresentation the assertion that the growing number of
TERI participants was part of the reason for requiring
contributions from previously enrolled TERI participants. At
page 26 of their brief respondents state, "Act 153 was
adopted in the face of increasing liabilities in the
Retirement System." The sentence is accompanied by a
reference to pages 754 and 755 of the record. Those pages in
the record contain a portion of the Milliman study describing
the increase in the number of participants corresponding to
the increase in the liabilities of the retirement system. The
numbers are reflected in chart form, depicting the
liabilities increasing significantly, almost off the charts.
We did not intend to impugn the character of counsel, but we
did find fault in the analysis used with respect to the
entire Milliman report. Respondent's reliance on the
report was inaccurate because by the time respondents
prepared the briefs for presentation before this Court, we
had previously certified the plaintiff class to include only
those retirees enrolled prior to July 1, 2005. The Milliman
report included both current and future TERI participants.
this Court pointed to flawed analysis by stating that 100
percent of eligible retirees were used in arriving at the
figures in the report. This sentence, when taken out of
context, is incorrect. To clarify, the Milliman report did
assume that only 80 percent of all eligible retirees (as
opposed to 100 percent of eligible retirees) would
participate in TERI. 
Arguments IVA and IVB, respondents maintain the Court should
amend the class definition to exclude working retirees or, in
the alternative, decertify the entire class. Respondents
state that class treatment is not necessary because "if
the Court lets its decision stand, respondents will comply
with the law as declared and provide appropriate relief to
all persons entitled to it." Respondents also point out
that if the class is not decertified, class notice will be
required. We are persuaded by this argument.
Accordingly, we grant respondents' request to decertify
the classes in this matter. Thus, petitioners' Motion for
Approval of Notice to Class is denied as moot.
Argument IVC, respondents maintain the Court failed to
prescribe the procedures for making refunds pursuant to the
opinion, specifically, how or when such refunds will be
made. Respondents state, "This is one
of the reasons that the class definition must be amended to
prevent confusion regarding who is entitled to relief, should
the Court maintain the same result in this case."
Finally, respondents maintain, as they have in the past, that
there is a delay in collecting the contributions and in
allocating them to specific persons who are members of the
there should be no confusion as to who is entitled to relief
in this matter - all TERI participants who joined the TERI
program, originally enacted in 2001, prior to July 1, 2005,
from whom retirement system contributions have been collected
since the effective date of Act 153. As to when such refunds
are to be made, we hereby order that all retirement system
contributions withheld from the old TERI participants shall
be returned to them, with interest at the rate of 4%, within
thirty (30) days of the date of this order. Specifically how
this refund will be effectuated is to be decided by
respondents, not this Court. The post judgment interest on
the amounts to be returned shall begin to accrue at the rate
of 11.25%, set forth by order of this Court dated January 4,
2006, for post-judgment interest, if not returned within this
thirty (30) day period.
Argument IVD, respondents maintain the Court must clarify its
ruling as to the working retirees and provide for appropriate
procedures on remand to deal with whatever claims are
permitted. Our opinion orders that the issue of breach of
contract as it relates to the working retirees is remanded to
the trial court. Because we have now decertified the class,
only petitioner Ahrens' case is remanded to the circuit
court, specifically, to the Honorable John L. Breeden. Judge
Breeden shall have full authority to decide whether to
certify a class or deal with the cases individually. Judge
Breeden has the authority to fully explore the issue of
whether the working retirees entered into a binding contract
and all other issues involved in the working retiree
respondents assert in Argument IVE that this Court must
prescribe procedures for determining petitioners' request
for fees and costs. We consider petitioners' Petition for
Costs to Include S.C. Code § 15-77-300 Attorney's
Fees and Motion for Attorney's Fees (Common Fund
Doctrine) in conjunction with Argument IVE of
respondents' petition for rehearing. We deny
petitioners' Motion for Attorney's Fees (Common Fund
Doctrine), as we find attorney's fees in this matter
should not come from the retirement contributions made by the
old TERI participants, or the interest accumulated thereon.
However, we remand petitioners' request for costs, to
include attorneys' fees pursuant to section 15-77-300, to
Judge Breeden to determine if petitioners are entitled to
recover reasonable attorneys' fees to be taxed as court
costs against the State of South Carolina and the South
Carolina Retirement System, and if so, the amount of
attorneys' fees they are entitled to based on the actual
amount of work performed, expenses incurred, and the benefit
obtained for all of the old TERI participants.
E. Moore J., John H. Waller, Jr. J., Perry M. Buckner J.,
Deadra L. Jefferson J.
By order dated June 6, 2006, the Supreme Court of South
Carolina amended this order to substitute the phrase
"interest at the rate of 4%" for the phrase
"interest at the rate of 6%" in the seventh
paragraph of the ...