Two years in: Legal spending on H2GO case reaches nearly $2 million

Three Brunswick County government entities entangled in a two-year-long lawsuit over utility assets have spent nearly $2 million in combined legal fees on the case. (Port City Daily/File photo)

BRUNSWICK COUNTY — Six helicopters. Four 2019 Lamborghini Aventadors. One hundred and thirty-four, four-year, in-state tuition scholarships to the University of North Carolina at Wilmington.

That’s how much $1,936,334.59 could buy. It’s also how much has been eaten up in legal costs in the now two-year-long lawsuit over H2GO’s assets in northern Brunswick County.

Related: Legal spending on the H2GO case approaching $1 million, one year later


This figure does not include October and November totals for the Town of Leland, or November totals for H2GO or the Town of Belville (when finalized, these numbers could tip the running total over the $2 million mark).

Seven law firms have raked in nearly $2 million combined in legal fees, some of which have certainly been funded by tax and ratepayer dollars.

The dispute

Since November 28, 2017, northern Brunswick County governments have fought in court over the rightful title to the northern region’s largest utility, Brunswick Regional Water and Sewer H2GO.

On that date, the utility’s outgoing board members transferred all of its assets to the Town of Belville — and Belville hurridly accepted them. The boards did so anticipating a political power shift that would have halted progress on a contentious reverse osmosis plant that would have ended the sanitary district’s reliance on other government partners by creating an independent raw water aquifer source — after the 2019 election, it now looks like it will do just that, if construction is resumed in accordance with recently-elected leadership’s campaign promise.

Days after the transfer, the Town of Leland sued, seeking to undo the transfer. Superior Court Judge Charles Henry sided with Leland in April, but Belville filed its notice of appeal shortly after. The governments attempted to work out a settlement agreement to end the lawsuit this summer and fall, but talks went sideways, with the now-outgoing Chairman declaring the proposed agreement “dead.”

New H2GO board members do intend to renegotiate the settlement agreement once they are sworn in next week.

Town of Leland

The plantiff, the Town of Leland, has raked up the highest legal bill in its endeavor to reverse the transfer. Since 2017, the town has spent a total of $879,701.30 on legal fees toward the case.

Kilpatrick Townsend & Stockton LLP, with Joe Dowdy serving as lead attorney on the case, has received the lion’s share of these feels, with a total of $860,580.06 through September 2019, according to figures provided by the town’s clerk. The clerk could not yet provide October or November 2019 totals for the firm.

Spending peaked leading up to the last Feb. 28 hearing on the case before the April order, Kilpatrick billed Leland $101,740 in January and $167,365.43 in February.

Leland’s longtime general counsel, John Wessel, has received $19,121 for his work on the case. Wessel retired from his role serving the town in September 2018, but has since provided the town legal services on a monthly basis.

Leland hired Brian Edes to replace Wessel. Edes has served as H2GO’s lead litigation attorney since December 2017. H2GO and Leland are currently aligned as co-plaintiffs in the case — the town initially listed members of H2GO’s outgoing majority as defendants, but after the new board was sworn in, the judge allowed Leland and H2GO to realign as co-plaintiffs against Belville. Soon, that could change, with H2GO’s incoming board sharing the same objectives as the Town of Belville, and is likely to drop its co-plaintiff status with the Town of Leland.

Although Edes serves as Leland’s general counsel, he did not provide legal services to the town in the lawsuit because he was also serving as the utility’s litigation counsel, thus presenting potential conflicts of interest.

Town of Belville

One-tenth the size of the Town of Leland, the Town of Belville has spent a hefty total defending itself in the case. Since the transfer, Belville has spent $629,222.29, most of which attributed to the firm it hired, Brooks Pierce.

With Charles Baldwin serving as lead counsel, Brooks Pierce has received $510,992.29 in legal fees from the town through mid-November, according to the town’s administrator.

Belville’s longtime general counsel, Jim Eldridge, has earned $118,230 from the case through the Eldridge Law Firm. The Town of Leland focused its arguments in a March hearing (the last before Henry’s April order) on Eldridge’s role in the transfer, relying on communication records that showed his coordination with H2GO director Bob Walker to conduct the transfer.

H2GO

Finally, H2GO has spent the least of the three government entities on the case, with a total of $427,411.

The bulk of H2GO’s spending, $235,185, has gone to Edes, as the utility’s lead litigation counsel (Edes serves as a partner of the firm Crossley McIntosh Collier Hanley & Edes but has recently billed H2GO as an individual attorney). The utility’s general counsel, Steve Coble, has earned approximately $106,000 total through the Coble Law Firm on the case, not including his earnings as the utility’s everyday attorney. Because of this, H2GO spokesperson said Coble’s litigation fees are only a rough estimate.

H2GO has also paid the firm Ward and Smith a total of $86,226.

New board members will be sworn in Monday. Dec. 2. One of the first items of new business? Restructure its Litigation Committee.


Send tips and comments to Johanna Ferebee at johanna@localvoicemedia.com

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