S.C. Legal System on Trial at High Noon

By Paul Gable

A noon hearing in a Columbia court room could go a long way to proving how much legitimacy should be attached to what passes for a legal system in South Carolina.

The issues aren’t big on their surface – a simple motions hearing on several motions associated with an interpleader action.

An interpleader action originates when a party holds property on behalf of another but does not know to whom the property should be transferred. It asks the court to make the decision.

In this case, the interpleader action concerns clients’ monies held by attorneys John Rakowsky and Adrian Falgione from the Southern Holdings case.

There are two problems with this action, however. The first problem concerns a missing $110,000 in money provided to Rakowsky and Falgione for litigation expenses, but not attorneys’ fees.

No full accounting of this money has been provided to the court, even though the interpleader action dates back to 2008. A partial accounting has been provided that ignores $110,000 provided to the attorneys with copies of cancelled checks to support the claim but no action from the court to determine the legitimacy of the claim.

In other words, the attorneys have provided to the court not what is required by law, but, rather, what they wanted to provide only. To date, no action has been taken by the court to determine what happened to the missing money.

Additionally, included in the interpleader action is settlement money from the state of South Carolina that the Southern Holdings plaintiffs have refused to accept because they claim there has never been a legal settlement.

This claim hinges on Rule 407.1.8(g) of the rules of civil procedure, which states: “A lawyer who represents two or more clients shall not participate in making an aggregate settlement of the claims of or against the clients, or in a criminal case an aggregated agreement as to guilty or nolo contendere pleas, unless each client gives informed consent, in a writing signed by the client.”

In the Southern Holdings case, Rakowsky and Falgione represented a number of clients in the same lawsuit.

I have interviewed each of the former clients individually and each contends they never agreed to a settlement and never signed any document agreeing to do so.

It would seem apparent you can’t adjudicate who is entitled to settlement funds if there is no legal proof that a settlement occurred. However, the court, to date, has never been presented with official documentation that a settlement exists while being asked since 2008 to disburse these funds.

What is really going on here is the State of South Carolina has wanted the Southern Holdings case to go away since it was first filed in 2001.

The manipulations in the case have been many including what appears to be absolute proof of allegations of fraud on the court by the original defendants, their attorneys and a federal judge.

To date, no court has seen fit to look into the facts surrounding these allegations, which, by themselves elicit huge questions about how the legal system works in South Carolina.

Today’s hearing may seem minor, but it will test again whether a judge being asked to make a ruling in this interpleader action will actually try to get at all of the facts of the case before doing so.


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