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State AGs 
 
McGraw originally sought $306 million in Visa, MC case
McGraw
WHEELING, W.Va. (Legal Newsline) - West Virginia Attorney General Darrell McGraw praises private lawyers who helped him settle a suit against Visa and MasterCard for $12.2 million, but neglects to mention that he originally sought $306 million.

McGraw recommends a $3,648,484.51 fee for six lawyers, but not a cent for a seventh lawyer who helped start the case and worked on it three years.

The seventh lawyer, Barry Hill of Wheeling, asserted a claim on fees from the settlement in a March 3 letter to Circuit Judge Ronald Wilson.

Neither McGraw nor Wilson has responded to Hill's letter.

While McGraw would deny fees to Hill, he would award hundreds of thousands each to two lawyers in Washington, D.C., and one in Seattle.

Wilson withheld approval of McGraw's fee request at an Aug. 20 hearing, saying he would consider an objection from Steve Cohen of Wheeling.

Cohen, executive director of West Virginia Citizens Against Lawsuit Abuse, asked Wilson to require an accounting of the work each lawyer performed for McGraw.

Cohen urged Wilson to distribute the fee according to each lawyer's work, rather than dividing it evenly among them.

Wilson said he would rule within 30 days. As of Sept. 17, 28 days after the hearing, he had not reached a decision.

McGraw Chief Deputy AG Fran Hughes signed the original complaint in 2003, listing Hill and Teresa Toriseva of Wheeling as special assistants.

Hughes alleged that Visa and MasterCard conspired to hold a monopoly over credit card transactions at stores.

In 2004 Daniel Cohen of Washington joined McGraw's team.

Visa and MasterCard moved for summary judgment, arguing that McGraw lacked standing to sue them.

Hill wrote the state's response to the motion and followed with a statement of facts estimating actual damages at $102 million.

He proposed triple damages for a $306 million judgment.

In 2005 Wilson denied summary judgment. If merchants suffered injury, he ruled, consumers might have suffered second hand injury.

Visa and MasterCard applied to the Supreme Court of Appeals for a writ that would overrule Wilson, and in 2006 the Court denied it.

In June 2006, Hughes and Hill agreed to end Hill's role in the case.

George Sampson of Seattle joined McGraw's team that August. Jonathan Cuneo, a partner to Cohen, joined the team that September.

The outside lawyers needed Wilson's approval, and Guy Bucci of Charleston filed the necessary papers.

Bucci's name had not previously appeared in the record, but he didn't just join the team. He led it.

He wrote to Wilson that "when the occasion arises to contact plaintiffs' counsel, you can communicate with me as lead counsel for plaintiff."

The name of his associate Tim Bailey also began to appear in the file.

In December 2006, Sampson asked a federal judge in New York to unseal records in a case where Sampson had represented plaintiffs.

Sampson told the judge that McGraw would amend his complaint soon to seek damages for consumers and not for the state.

The record shows no response from New York.

In February 2007, Bucci filed the amended complaint. He sought triple damages, refunds and civil penalties.

It sounded grandiose, but in a brief that followed Bucci wrote that the new complaint narrowed the scope of relief.

"This case is not about individualized special damages," he wrote. "It is about a statewide economic analysis with reasonable data produced by a rigorous economic analysis."

Visa and MasterCard responded with a bold stroke. They decided to test the state's theory against the actual practices of retailers.

They served deposition notices on Wheeling Island Racetrack and Gaming Center, Oglebay Resort, Copes Supermarket, Marquee Cinemas, Cook Floral, Yarid's Shoe Salon, Robert's Antiques, Fret 'n Fiddle, Taylor Brooks, Peanu Shoppe and Sodaro's Electronic Sales.

Bucci moved to quash the depositions, and at a hearing Wilson imposed a stay on discovery.

That set a tone for negotiations which led to settlement this January.

Visa and MasterCard agreed to provide $11.6 million for a sales tax holiday on certain appliances and $600,000 for McGraw's consumer protection office.

They also agreed to pay the private lawyers $3.9 million to cover not only fees but also expenses, which ran to $251,515.49.

In an Aug. 19 motion Hughes sought payment for Bucci, Toriseva, Bailey, Sampson, Cohen and Cuneo.

"The appointed special assistant attorneys general in this case have invested hundreds of hours in litigating this case," Hughes wrote.

Apparently the lawyers who helped West Virginia University sue former football coach Rich Rodriguez worked harder in seven months than McGraw's team did in five years, for the university's team billed almost 1,500 hours.

Thomas Flaherty of Charleston, who led the university's legal team, charged less than $300,000 for the services of his firm.

Filed Under: State AGs


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