Judge permits AGs' use of private firm in Capital One cases

By John O'Brien | Aug 30, 2012


TAMPA, Fla. (Legal Newsline) - A federal judge has ruled that the attorneys general of Mississippi and Hawaii can pursue their claims against Capital One Bank and use private attorneys to do so.

Capital One had challenged the contingency fee agreements between Golomb & Holnik of Philadelphia and the two AGs - Mississippi's Jim Hood and Hawaii's David Louie. The firm was involved in a private class action settlement reached by Capital One in 2010, then was hired by the AGs to pursue state claims.

U.S. District Judge Virginia Hernandez Covington ruled Aug. 22 against Capital One, which asked her to enter an injunction against the state lawsuits and sanction the law firm. She called the requests "inappropriate."

"The court's order approving the settlement and closing this case did not bind the states of Mississippi and Hawaii," she wrote. "The attorneys general of Mississippi and Hawaii were not defined as class members and did not have an opportunity to participate in the litigation or opt out of the class."

Covington wrote that granting the injunctions would usurp the claims of two sovereign states.

Capital One wrote that it did not matter if the attorneys general weren't parties to the settlement because the customers they are representing were. It also said plaintiffs attorney Richard Golomb agreed to effectuate the settlement agreement.

"The settlement agreement and final approval order expressly released any claims under 'the unfair and deceptive acts and practices statutes of any of the states,'" the company wrote Aug 3.

"Golomb was certainly aware that this included claims under (Hawaii's and Mississippi's consumer protection laws). Additionally, Golomb collected nearly a quarter million dollars in attorneys' fees for its efforts in securing the settlement.

"Now, despite agreeing not to 'attempt to void this Agreement in any way,' Golomb has represented parties in two different suits against Capital One for the same claims released in the Spinelli settlement. Golomb's actions exhibit willful disobedience of the order approving settlement and should be penalized."

The lawsuits against Capital One concern its payment-protection products that carry monthly fees.

West Virginia Attorney General Darrell McGraw settled a similar case in January. He did not use the Golomb firm, but hired it for a case against nine other companies.

From Legal Newsline: Reach John O'Brien at jobrienwv@gmail.com.

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