Note: This story has been updated to include a figure from 2019.
SIOUX FALLS, S.D. (KELO) — As of Dec. 31, the state of South Dakota has paid out at least $8.7 million in court costs under the Extraordinary Fund (ELF), according to the Bureau of Administration (BOA).
The ELF was established in 2004 to pay for “plaintiff attorney fee awards, retention of outside counsel, settlement costs, and other litigation expenses,” according to the Legislative Research Council (LRC).
On Feb. 9, a BOA representative requested another $2 million for the ELF at the Legislature’s Joint Committee on Appropriations meeting. The Senate passed the $2 million request on Feb. 13.
The state has provided at least $15 million in the ELF since 2004. Since 2019, when Gov. Kristi Noem took office, the fund has received about $7 million. From 2004 to 2018, the ELF received about $11 million.
A 2019 document shows the state had paid about $9.8 million in ELF cases, said Leah Haugen, a special projects coordinator for the BOA. The $8.7 million used this month used information from 10 years prior which is why the dollar amount differs from 2019, Haugen said.
As of Dec. 31, the state had eight pending cases using ELF funds. Another 18 have been closed.
For example, the state paid $32,741 in plaintiff’s lawyer fees for the Blue State Refugees case. Blue State Refugees sued the state because it said it was denied right to free speech and petition rights. The claim was settled for the plaintiffs’ attorney fees, according to material from the BOA.
The ELF also spent $229,876 in its case against the federal Department of Interior over July 4 fireworks at Mount Rushmore. An appeals court ruled the case was moot. The case was opened on April 30, 2021.
The state paid the plaintiff’s attorney fees when SD Voice challenged the constitutionality of Initiated Measure 24 which passed in November of 2018. The court ruled the measure unconstitutional and ordered the state to pay the plaintiff’s lawyer fees. The state spent $34,335.
Lawsuits will cost the state money even if the state is settled or there is a judgment in the state’s favor.
Costs of a lawsuit can depend on the time it takes to interview witnesses and other factors.
“It can be a lengthy, lengthy process,” Joint committee co-chair Republican Sen. Jean Hunhoff said of lawsuits.
Two lawsuits involving the state have been announced within the past week. When asked if these two cases could use ELF money, Haugen said in an email response that she could not comment on pending cases.
The Transformation Project has filed a federal lawsuit against Governor Kristi Noem and the Secretary of Health in their official capacities involving a contract the Transformation Project had with the Department of Health.
The state recently joined a multiple state lawsuit against the Bureau of Alcohol, Tobacco and Firearms on pistol regulations.
South Dakota has joined other multiple state lawsuits before including the tobacco cases in the 1990s. Two tobacco lawsuits are on the ELF list of pending suits.
The state has received about $20 to $24 million annually from the 1998 Tobacco Master Settlement, Jackley said in a recent joint committee on appropriations meeting. Jackley said the state has received at least $570 million since the 1998 case settlement.
“No one likes spending money on litigation,” Republican Rep. Tony Venhuizen said. But, lawsuits will happen, he said.
Venhuizen is a member of the joint committee on appropriations. The $2 million requested for the ELF is not a large amount of money when compared to the state’s overall budget of about $7 billion, he said.
Hunhoff said she isn’t aware how South Dakota’s litigation expenses compare to other states. The joint committee on appropriations does not have the authority to tell the state to stop negotiating or working on a lawsuit, Hunhoff said.
Conversely, “we don’t control people’s behavior,” and some people will sue the state, Hunhoff said. “People feel wronged sometimes.”
John Stiles, the deputy chief of staff for the Minnesota Attorney General’s office said it would be extremely difficult to determine how much money is spent on litigation in the state. The AG’s office bills state agencies that are involved in lawsuits, he said.
“They pay for representing them. We bill them for the hours…,” Stiles said.
If a lawsuit “challenges the constitutionality of a law or a plaintiff is suing the state in general, our office picks up the tab,” Stiles said.
The AG’s office is pursuing legislation that would create $1 million in a fund for participating in multi-state lawsuits with the ability to replenish that, Stiles said.
“…that’s so we can participate more on the plaintiff side,” Stiles said of multi-state lawsuits.
South Dakota joint appropriations committee member Democrat Rep. Linda Duba said the state is spending money unwisely on certain lawsuits.
“My concern is if you look back at the last four years, you can see the amount of backfill is consistently going up,” Duba said. “It’s pretty obvious it’s going to go up because we have more lawsuits.”
The Legislature needs to discourage unwise lawsuits, Duba said.
“(Gov. Noem) sued about fireworks,” Duba said as an example of a frivolous lawsuit. “Are people dying, has their been gross misconduct?” Duba said of the lawsuit against the Department of Interior.
Duba and Venhuizen agreed the state law that eventually led to a court decision involving Wayfair and the payment of online sales tax as a good action. The state collects sales tax from online sales because of it.
Duba said passing legislation that is vulnerable to lawsuits and the possibility of losing in court is also not responsible.
Venhuizen said the state passed the online sales tax legislation knowing it could be challenged in by a lawsuit. The state was willing to accept the challenge in court, he said.
The two cases called Tobacco #1 and Tobacco #2 involving the Tobacco Master Settlement of 1998 continue. Those are listed as pending cases for the ELF.
Other pending lawsuits are: Planned Parenthood vs. the State from 2011, Dr. Thomas Orr vs. Northern State University from 2018, Christensen, et al vs Marlette from 2019, Hideaway Hills vs. School and Publics Lands, FKA Trudo, et al vs. SD Housing Authority from 2020, Julie Irvine vs. HSC from 2021 and the League of Women Voters vs. Noem, Vargo and Barnett from 2022.
The BOA describes Christensen, et al vs Marlette as “Plaintiffs, who are members of the SD Air National Guard, are alleging discrimination by denying employment benefits on the basis of their obligation to perform in a uniformed service.”
The BOA describes Julie Irvine vs HSC as ” Irvine is the guardian ad item (for three individuals) who are accused of crimes and have been incompetent. They have been ordered committed but are housed in a county jail.”