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Secretary resigned after $98 million in legal fees in Florida water wars

TALLAHASSEE — Concerns over a ballooning legal bill for a fight over water resources between Florida and Georgia coincided with the resignation last week of Florida's top environmental regulator.

Jon Steverson, who has led the Department of Environmental Protection under Gov. Rick Scott for the past two years, announced his resignation days after Florida House budget officials expressed disapproval of his management of a legal contract that had ballooned by more than $54.4 million in the past two years.

He will step down from his $150,000 job effective Feb. 3 to work for Foley Lardner.

Foley Lardner is one of four outside law firms hired by the state to handle its 16-year lawsuit against Georgia over water rights to the Apalachicola, Chattahoochee and Flint river basins. Florida sued Georgia in 2013 claiming the state's excessive use of water from the Chattahoochee and Flint rivers was endangering Florida's oyster industry and harming the economy of North Florida.

Since 2001, the state has been billed $97.8 million on the water wars, according to an analysis by the House Appropriations Committee, and has spent $71.9 million to date. Nearly $54.4 million of it was spent in the past two years after Florida asked the U.S. Supreme Court to intervene and the court appointed a special master to resolve the dispute.

Foley Lardner, which also employs Steverson's DEP predecessor, Hershel Vinyard, was paid $2.6 million during the past two years.

In October, Ralph Lancaster, a civil lawyer from Portland, Maine, held five weeks of hearings in a Maine courtroom. Earlier this month, he ordered both sides to meet for mediation by today and submit a memorandum to him by Thursday before he makes a recommendation.

After years of budgeting little more than $4 million in attorneys fees, lawmakers allocated nearly $17.5 million in 2015-16 for legal fees and costs in the case, plus $18.6 million for the 2016-17 budget. The department tapped $5.4 million from its reserves for a total of $23.9 million in available funding this year.

Two weeks ago, Steverson said he needed $17.1 million more to finance the litigation. He filed a budget amendment asking the House and Senate Joint Legislative Budget Commission to approve $13 million more but said the total cost for the year would be about $41 million.

Rep. Carlos Trujillo, R-Miami, the House Appropriations chairman who is himself a civil litigation lawyer, said the numbers "struck me as excessive — as if the supervisors of the project lost control of the costs."

He asked Steverson to justify the expenses, asked for a detailed breakdown, including the names and hours of each attorney, as well as the cost of expert witnesses, and suggested the item may not be approved.

According to records obtained by the Times/Herald, the lead lawyers, Washington-based Latham Watkins, would be paid $35.9 million between 2015 and 2017.

In addition to $2.6 million to Foley Lardner, two other firms were paid lesser amounts: $1 million to Blankenau and $966,000 to Carlton.

The records also show that Latham Watkins charged the state for 32 to 35 full-time legal staffers for 40 hours a week over four months. The firm also charged significantly more than the other firms for lawyers of comparable experience.

For example, while Foley Lardner charged an hourly rate of $220 for junior associates — those with five years or less experience — Latham Watkins charged $395 an hour for lawyers with three years or less experience and $575 an hour for lawyers with three to 10 years' experience. Partners at Latham charged $825 an hour, compared to Foley's partners, who charged $450 an hour.

"With litigation of this magnitude, you have a management company that manages the cost of this litigation, but there were so many overages with this," Trujillo said. "It seems a runaway train and there were no cost-control measures."

The DEP was allowed to seek outside counsel in the case when Attorney General Pam Bondi declined to be the lead lawyer on the case. Trujillo now wonders whether anyone has scrutinized the expenses.

"Was somebody sitting down and making sure the time is commensurate with the work that is done?" Trujillo asked.

Georgia Gov. Nathan Deal signed an executive order last week increasing the money his state has spent on litigation in the past year to nearly $30 million, according to a report in the Atlanta Journal-Constitution. Georgia's lead law firm also is based in Washington, D.C.

Trujillo said that Florida's lawyers have told him that Georgia is driving the litigation but, he said, if that's the case, Georgia's costs should be higher than Florida's, not less.

"It raises even more questions about why we are overpaying,'' he said.

Contact Mary Ellen Klas at Follow @MaryEllenKlas.