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McGraw settlement could produce nearly $4M for outside counsel

By John O'Brien | Jun 16, 2008


CHARLESTON, W. Va. (Legal Newsline) - A settlement designed by West Virginia Attorney General Darrell McGraw's office will entitle consumers to sales tax breaks on appliances, while private practice attorneys hired by McGraw may rake in almost $4 million.

Two firms hired by McGraw as outside counsel hired to pursue a case against Visa USA, Inc., and MasterCard International, Inc., are also campaign contributors to McGraw, a recent report in the Charleston Daily Mail shows.

The firms representing the State are: Bucci Bailey & Javins in Charleston; Wexler Toriseva Wallace LLP in Wheeling; Hagens Berman Sobol Shapiro LLP in Seattle; and Cuneo Gilbert & LaDuca LLP in Washington, D.C.

Teresa Toriseva donated $844 to McGraw and is the president of the West Virginia Association for Justice, formerly known as the West Virginia Trial Lawyers Association. Guy Bucci has donated $1,000 to McGraw, running for re-election this year against Charleston attorney Dan Greear.

Much of the settlement -- $11.6 million -- apparently will create three sales tax holidays on appliances that carry the "Energy Star" label and cost $2,500 or less.

The proposed settlement, reached in January, originally called for $12.1 million set aside in a trust account. The lawsuit, filed in Oct. 2003 in Ohio County, alleged the companies violated the state's antitrust and consumer protection laws.

McGraw said the two forced an increase cost of business for merchants accepting their credit and debit cards, and the costs were passed on to shoppers by increasing the costs of almost every retail product.

West Virginia is the only state to collect anything concerning those allegations from the companies. Target, Sears and Wal-Mart all settled with the companies in 2003.

In the Daily Mail report, Assistant Attorney General Doug Davis said a judge will have to determine if the outside counsel will receive the $3.9 million it is seeking.

"Visa and MasterCard have agreed to pay no more than that," Davis said, according to the report.

Another outside counsel agreement has recently made headlines for McGraw.

Three of the four attorneys recently appointed as Special Assistant Attorneys General in an investigation into teacher annuities have given the maximum $1,000 contributions to McGraw's re-election campaign.

McGraw appointed Charleston attorneys Jim Lees, Anthony Majestro and James Peterson as well as Jonathan Turak of Moundsville to look into whether the Variable Annuities Life Insurance Co. convinced thousands of teachers and school service personnel to invest in its low interest fixed-rate annuities.

Majestro, Peterson and Turak each have contributed $1,000 to McGraw's campaign. Also, members and family from Peterson's firm gave a total of $5,000 to the McGraw war chest. People at Turak's firm gave a total of $2,000.

Over the years, members of Peterson's firm have given more than $20,000 to McGraw's election efforts. Turak and Majestro's firms have also given to McGraw in the past.

Private attorneys also earned more than $3.3 million of a $10 million settlement with OxyContin-manufacturer Purdue Pharma in 2004. That settlement drew criticism from state lawmakers who were unhappy the State's general fund never received any of the settlement funds.

Instead, McGraw dished out the remaining money to programs and organizations that fight substance abuse.

From Legal Newsline: Reach John O'Brien via e-mail at john@legalnewsline.com.

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