Journal of the House of Representatives
of the Second Session of the 110th General Assembly
of the State of South Carolina
being the Regular Session Beginning Tuesday, January 11, 1994

Page Finder Index
| Printed Page 6900, May 17 | Printed Page 6920, May 17 |
Printed Page 6910 . . . . . Tuesday, May 17, 1994
Q. I see. But it has nothing to do with your relationship with --
A. No, no.
Q. -- the Bar, it's just merely the size?
A. It's just the number of lawyers over there, York and Union.
Q. On your Personal Data Questionnaire, you indicated that some of the times you served as a special referee. It was in mortgage foreclosure actions, some of which involved Union Federal Savings and Loan Association and apparently, you have some stock in that particular association. How did you decide that you felt comfortable hearing those cases?
A. Well, all those cases were uncontested cases. That's really all I can say. The issue didn't come up. Union Federal certainly -- I guess they knew I was involved. The lawyers picked me and I agreed to serve.

To the extent there were some conflict there, I'll have to admit that it did not occur to me as I was hearing those cases that I would have bias one way or the other because of my interest and my stock ownership.
Q. I know it's unlikely in a Family Court situation for something to come before you which you might have a financial interest in, but just in generally speaking as a judge, do you have any problem following a rule where if there was any financial interest of yours involved that you would not hear the case?
A. Well, certainly, I don't have any problem following it and I think it would go without saying that a judge should make that known and recuse himself if he does have a financial interest. I'll have to say that I believe that somebody who was an acting and sitting judge is much more cognizant of those types of things than someone who is a practicing attorney. It seems to come then on a special basis.

That Union Federal thing really just kind of -- just did not occur to me, but I will say with certainty, again under oath, if it came up and I was a sitting judge that I would know about it and I would at least state it and give everybody an opportunity to ask me to recuse myself or to recuse myself on my own motion if I felt like it was something that I would have a -- that would bias my decision.
Q. Have you ever sought the pledge of a legislator prior to this screening?
A. No, I have not.
Q. Have you sought a pledge that was conditioned upon your further advancement through screening?
A. No, I don't think I have. I have had very little contact with legislators although I have talked to some.

Printed Page 6911 . . . . . Tuesday, May 17, 1994
Q. And when you talked to them, what's the nature of that conversation?
A. Well, I came down when the Session first began and made an attempt to familiarize myself with the names and faces of the legislators and ones whom I was able to engage in conversation and tell them who I was and why I was here and what I would tell them was there is a judgeship coming open and I will be a candidate and at the appropriate time, I'd like to talk to you about my qualifications and they all understood that. And that was the extent of what I said to anybody.
Q. Have you asked or otherwise authorized anyone else to seek pledges on your behalf?
A. I have not. And I have -- as part of the process, I contacted a number of my friends in other parts of this state -- of the state in an information gathering process for myself to find out what legislators they may personally know and to tell my friends that I was running for the legislature (sic), but I have not asked them to seek any pledges on my behalf. If they did so, it was not at my request and it was no authorized.
Q. Do you know of any solicitations?
A. I don't know of any.
Q. You list campaign expenditures with this committee as being in excess of $100, but we don't have any indication that you filed a report with the House and Senate Ethics Committees and that's required and if you'd attend to that at your earlier convenience, we'd appreciate it.
A. Well, I will. I didn't put -- I didn't know it was required, but I will do that.
Q. Thank you.
MR. ELLIOTT: That's all the questions I have.
SENATOR MCCONNELL: Thank you, sir.
EXAMINATION BY SENATOR MCCONNELL:
Q. I have a couple for you myself. First of all, you heard my earlier questions about stress, and how do you deal with stress on the job?
A. Well, I feel it and my best way of dealing with it when it gets to a fever pitch is to just kind of move on to something else or, you know, just take a break. I feel like I need to pull back from whatever it is that's causing all that.

I understand you can't do that in Family Court because it's just goes on and on and I expect the way I would deal with it is to make a conscious effort to -- when a case is handled and a case is over and when a conflict with a lawyer is over with, it's done. I may try to forget about it.

I find that in my own practice, the more experience I get, the more cases I have, the easier it is to forget the details of one that's in the drawer. And I think it's the buildup of these little things is what causes you to

Printed Page 6912 . . . . . Tuesday, May 17, 1994
have a breakdown or an explosion as a result of stress and what I would want to do is try to hear a case, handle a case and forget a case and just let what I'm dealing with at the moment be the thing that concerns me.

It's always -- if you get too worked up in a courtroom situation, you can always take a break. And if there is an outburst or an evidentiary argument between a lawyer and myself I felt like you got me on edge, I would want to take a five-minute or ten-minute break, just to let that pass. I think that the judges have enough free time to allow some of these pressures to blow off, and as I've told you, my way of dealing with stress is just kind of change directions, even if it's for a few minutes to cause somebody else to look at another file and think about something other than what's got me worked up like that. That's really the only way I would know how to handle it.
Q. What do you consider to be an adequate judicial temperament?
A. Well, I think the even temper is probably the most important thing and I think you've got to know -- you've got to have a turn to handle people who are not always happy with what you do and say. I think those are the two things. Courtesy to the litigants.

As I explained to you a minute ago, I feel like that firmness and courtesy in the courtroom, it carries over to the people on the other side of the bar. I think those are the two most important things in judicial temperament.
Q. You heard me refer, to coin an old phrase, robitis. Do you know of any steps you could take to avoid that and what I mean by that is where the robes just get so heavy that --
A. Well, you mean the pressures of the job --
Q. Yes, sir.
A. -- is what you're talking out? Well, as I say you've got to have some relief from it every now and then, and I think I'm good at putting things behind me. I try not to think of myself as being so important and think of myself even now, and I think I'd carry this into the judgeship, thinking that this whole Family Court is dependent on what I do and what I say.

I believe that -- I think now that there are other people involved. The lawyers have got to do things right. The litigants have got to be cooperative, the clerks and the court reporters. It takes a whole group to move that thing forward and if I have the attitude that I'm not the only one in charge of it and that any mistake is made is not always mine, then I think that I can avoid that -- my doing that, by kind of trying to spread the responsibility, of course, keeping in mind at all times that the ultimate decision that has to be made would be made by me.

Printed Page 6913 . . . . . Tuesday, May 17, 1994
SENATOR MCCONNELL: Any other questions from the panel? Thank you, sir. We appreciate you coming.
A. Thank you.
SENATOR MCCONNELL: You're free to go, if you wish, and the record will -- as I understand, the Chairman is leaving all of the records open until we've completed everything.
A. Thank you, sir.
SENATOR MCCONNELL: The record will remain open as all records will remain open. I'm informed this completes the morning session. We meet at 2:00 p.m. at the Blatt Building.
(A lunch break was taken)
REPRESENTATIVE ALEXANDER: Good evening way back there. We're a far piece from you, if you'll -- but, we'll try to communicate with you. We're going to rearrange the schedule as listed just a little bit. Steve needs to go back over to the House. The Floor of the House is in session this afternoon. And many of you have appeared before us before, so really, it shouldn't take an extended length of time for us to do this. And we'll start with Clay Carruth. Would you come to the podium, please, sir, to be sworn again, please.
HERBERT CLAY CARRUTH, JR., having been duly sworn, testified as follows:
REPRESENTATIVE ALEXANDER: I would ask you to be seated, but that won't work today. Over yonder, we could ask you to be seated, but you can't do that in here, so I'm sorry you're going to have to stand. Have you had chance to review the Personal Data Questionnaire Summary?
MR. CARRUTH: I have.
REPRESENTATIVE ALEXANDER: Is it correct?
MR. CARRUTH: It is.
REPRESENTATIVE ALEXANDER: Does anything need clarification?
MR. CARRUTH: Not that I'm aware of at this time.
REPRESENTATIVE ALEXANDER: Is there any objection to making this Summary a part of the record of your sworn testimony?
MR. CARRUTH: No objection.
REPRESENTATIVE ALEXANDER: It shall be done at this point in the transcript.

Printed Page 6914 . . . . . Tuesday, May 17, 1994
PERSONAL DATA QUESTIONNAIRE SUMMARY

1. Herbert Clay Carruth, Jr.
Home Address: Business Address:
1603 Lyttleton Street 305 Gressette Building
Camden, SC 29020 Columbia, SC 29202

2. He was born in Athens, Georgia on August 15, 1948. He is presently 45 years old.

4. He was married to Anne West on December 16, 1978. He has three children: Herbert Clay, III, age 9; George West, age 6; and Carl West "Cotton," age 3.

5. Military Service: 2/28/69 - 2/22/71; U. S. Army; Sp/4; RA12816944; Honorable Discharge; Present status - civilian

6. He attended the University of South Carolina and Presbyterian College, 1966-1968, courses in Business Administration and Arts and Sciences; service in the U.S. Army, 1969-1971; the University of South Carolina, 1971-1973, B.A. in Philosophy, Art History Cognate; the University of South Carolina Graduate School, 1973-1976, Comparative Literature (Ph.D. Candidate, by-passed M.A.); the University of Tennessee School of Law, 1977-1979, transferred to the University of South Carolina School of Law in June of 1979; and the University of South Carolina School of Law, 1979-1980, J.D. in December of 1980.

8. Legal/Judicial education during the past five years:
8/27/93 S. C. Bar "6th Annual Hospital and Health Law Seminar" (6.5 hours)
8/6/93 S. C. Bar "Restructured State Government and The State of Administrative Law" (6.0 hours)
4/16/93 S. C. Bar "Winning Trial Techniques" (6.0 hours)
1/8/93 S. C. Bar "42 U.S.C. Section 1983, The S. C. Tort Claims Act and Government Liability" (6.0 hours)
9/11/92 S. C. Bar "5th Annual Hospital and Health Law Seminar" (6.5 hours)
8/14/92 S. C. Bar "Important Developments in Environmental Law" (6.0 hours)
12/20/91 S. C. Bar "This was the Year That Was" (6.5 hours)

Printed Page 6915 . . . . . Tuesday, May 17, 1994
12/6/91 S. C. Bar "Legal Ethics and Professional Responsibility" (6.0 hours)
10/19/90 S. C. Bar "Criminal Practice in South Carolina" (6.0 hours)
5/11/90 S. C. Bar "Appellate Practice in South Carolina" (6.5 hours)
3/9/90 S.C.C.J.A. "Mock DUI Trial" (6.0 hours)
2/21/90 S.C.C.J.A. "Update on the Law" (6.0 hours)
12/8/89 S. C. Bar "General Practice Update and Hugo-Related Insurance Issues" (6.0 hours)
12/1/89 S.C. Bar "Bankruptcy:Recent Developments on Important Issues for 1990 and Beyond" (6.0 hours)

9. Taught or Lectured:
He has delivered lectures on recently passed legislation and currently pending bills and regulations which concern health care to the following groups on the dates indicated:
8/29/92 Rock Hill, SC Chapter of American Association of Retired Persons
11/17/92 Legislative Monitoring Task Force, SC Allied Health Alliance
1/21/93 SC State Legislative Committee of the American Association of Retired Persons
2/17/93 USC College of Nursing, NURS 720 Class ("Community Nursing and Health Services: Planning and Delivery")
7/12/93 USC College of Nursing, NURS 403 Class ("Policies and Politics")
9/16/93 SC Anesthesiology Office Managers
9/30/93 USC College of Nursing, NURS 720 Class ("Community Nursing and Health Services")
10/8/93 SC Association of Rehabilitation Facilities 1st Annual Conference
3/2/94 USC College of Nursing, NURS 770 Class ("Role Development and Professional Issues")

12. Legal experience since graduation from law school:
12/90-Present DIRECTOR OF RESEARCH AND ATTORNEY TO THE S. C. SENATE AFFAIRS COMMITTEE. Responsibilities include constituent assistance for Committee members and other members of the

Printed Page 6916 . . . . . Tuesday, May 17, 1994
General Assembly; research on bills, regulations, statewide appointments, and other matters referred to the Committee, as well as coordinating the scheduling of Committee and subcommittee meetings and the setting of agendas for same.
5/85-12/90 STAFF COUNSEL - PUBLIC SERVICE COMMISSION OF SOUTH CAROLINA.
Responsibilities included working with accountants, economists, and other staff members to prepare Commission Staff's cases in rate and other application proceedings. Utility rate cases involved application to per book figures of accounting and pro forma adjustments to determine rate base, as well as application of different models and methodologies (primarily DCF and CAPM) to determine cost of debt and equity capital; also, use of regulatory legal principles to determine reasonable rates of return overall and on various components.
Transportation cases involved use of motor carriers' operating ratios and various other factors to determine reasonable rates, determination of public convenience and necessity, as well as fitness and ability to perform motor carrier services for hire, and construction and application of the Commission's Statutes and Regulations regarding its economic and safety jurisdiction, prosecuting cases as warranted; also, railroad abandonments and bus route and schedule changes.
General legal duties included composition and preparation of Commission Orders, Briefs and Memoranda, rendering of advice to the Commission and Commission Staff; and representation of the Commission and Staff in agency proceedings and in appellate practice before the State's Circuit Courts, Court of Appeals and Supreme Court.
6/84-4/85 ASSISTANT ATTORNEY GENERAL, CHILD SUPPORT ENFORCEMENT DIVISION, OFFICE OF THE ATTORNEY GENERAL OF THE STATE OF SOUTH CAROLINA. Responsibilities included representation of South Carolina Department of Social Services in paternity, support and contempt hearings
Printed Page 6917 . . . . . Tuesday, May 17, 1994
in the Family Courts of South Carolina, as well as drafting all necessary pleadings and orders.
4/82-6/84 STAFF ATTORNEY, OFFICE OF THE ATTORNEY GENERAL OF THE STATE OF SOUTH CAROLINA. Attorney for the State's Division of General Services, assigned to the South Carolina Insurance Reserve Fund. Responsibilities included general contract negotiation and approval of lease/purchase agreements, personal service contracts, leases of property and easements, requests for proposals, bid solicitations, specifications preparation and other procurement procedures under the State's Consolidated Procurement Code; advice to State agencies and political subdivisions relative to liability of the State, its agencies and political subdivisions as well as officers, employees and volunteers to suit in tort in State and Federal Courts, as well as advice as to availability of comprehensive general liability, fire and extended coverage insurance, drafting of policies and endorsements, negotiation and settlement of claims, legislative research, interpretation of statutes and regulations, and drafting of proposed legislation. Also served as Hearing Examiner for the South Carolina Manufactured Housing Board and the Pyrotechnic Safety Board.

13. Rating in Martindale-Hubbell:He is listed in Martindale-Hubbell as a Staff Counsel for the Public Service Commission. He is not rated as his experience has been in state government service.

14. Frequency of appearances in court:
Federal - None
State - Since he became Research Director and Attorney to the Senate Medical Affairs Committee in January of 1991, his duties have not involved court appearances. From 1985 through 1990, as Staff Counsel to the Public Service Commission, he occasionally appeared in Magistrate's Court, Circuit Court, the Court of Appeals and the Supreme Court. Most of his practice at the Public Service Commission involved administrative law

Printed Page 6918 . . . . . Tuesday, May 17, 1994
and participation in agency contested case hearings as described below.
Other - From 1985 through 1990, he appeared before the Public Service Commission in agency contested case hearings approximately twice a week. These administrative law cases and hearings concerned applications for certificates of public convenience and necessity, regulation promulgation, rate cases, rules to show cause involving utilities and motor carriers for violations of statutory and regulatory standards, and generic proceedings.

15. Percentage of litigation:
Civil - 98%
Criminal - 2%
Domestic - None

16. Percentage of cases in trial courts:
Jury - 2%
Non-Jury - 98%
Sole Counsel

17. Five (5) of the most significant litigated matters in either trial or appellate court:
(a) Application of Williston Telephone Company, Inc. for Authority to Change Certain of its Intrastate Rates and Charges and for Changes in Depreciation Rates. Public Service Commission Docket No. 85-182-C (SCPSC Order No. 85-1108).
This case represents a fairly typical example of the application of rate-making principles to a small to medium-sized telephone utility in South Carolina. The process involves the application of accounting and pro forma adjustments to test year financial and operating figures which have been normalized, as appropriate. An appropriate rate base is figured based on the net value of utility's tangible and intangible property and capital devoted to provision of telephone service. Rate of return on rate base is the general methodology for determining reasonable and fair rates and charges to enable the utility to realize sufficient revenue to achieve a certain permitted overall rate of return, given the utility's capital structure.

Printed Page 6919 . . . . . Tuesday, May 17, 1994
(b) Application of United Cities Gas Company for an Increase in its Rates and Charges. Public Service Commission Docket No. 86-199-G (SCPSC Order No. 86-1114).
This case represents the application of rate-making principles to a gas utility in South Carolina. Determination is made of a fair and reasonable overall rate of return on rate base and the required additional revenue to enable the utility to achieve this overall rate of return. The revenue is allocated. The capital structure of the utility is determined, based on the amount and ratio of debt and equity. Cost of equity capital is figured using Capital Asset Pricing Model and Discounted Cash Flow Methodology. The Public Service Commission determined, among other things, that the utility's proposed rates and charges would generate an excessive amount of revenue, indicating an unreasonable return on common equity. Therefore, the Commission declined to approve the proposed schedule of rates and charges filed by the utility and made its own determination of fair and reasonable rates based on its finding of a fair and reasonable return on common equity.
This case illustrates the importance of return on common equity in the ratemaking scheme, since the other components of the overall rate of return, such as the cost of debt and the dividends on preferred stock, are fixed.

(c) Petition of the Commission Staff for a Rule to Show Cause Against Howard Lisk, Inc. ... Concerning Failure to Comply with the Statutes and Regulations Pertaining to Motor Carriers Enforced and Administered by this Commission. Public Service Commission Docket No. 88-694-T (SCPSC Orders No. 89-206 and No. 90-973).
This cases involves the intervention of a competing motor carrier in a Rule to Show Cause (RTSC) proceeding against a motor carrier for undercharges and operations exceeding the scope of its authority. Intervention in an RTSC is highly unusual. The case illustrates the very competitive conditions within certain segments of the motor carrier industry, the economic power of shippers to dictate rates within these segments, and South Carolina's adherence to the "filed rate doctrine" in its regulation of motor carriers.
(d) Application of Vale Service Co., Inc. for Approval to Operate a Water System and Approval of a Schedule of Rates and

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