POINT PLEASANT, W.Va. (Legal Newsline) - After the West Virginia Supreme Court decided not to hear a challenge of their employment, two private attorneys earned $4.5 million by settling the State's case against Capital One.
W. Jesse Forbes and Troy Giatras, both of Charleston, were hired by state Attorney General Darrell McGraw to pursue the case, which was brought over the company's sale of payment protection and its Credit Recovery Services line of business.
The settlement, worth $13.5 million, was approved in January by Mason County Circuit Court Judge David Nibert.
A recent look at the case file by Legal Newsline showed the company petitioned the Supreme Court in October. Capital One had made a similar effort in 2005 during a related case. The justices refused to hear the issue in a 5-0 vote.
Capital One sought an answer to four questions:
-If McGraw is authorized by the state's Consumer Credit and Protection Act to appoint special assistant attorneys general;
-If state law allows McGraw to delegate his powers and duties to a person not employed by his office;
-If McGraw can enter into a contingency fee agreement with private attorneys without violating the separation of powers; and
-If a conflict of interest that violates public policy exists in such an agreement.
On Nov. 22, the court declined to answer the questions in a 4-1 decision. Justice Brent Benjamin voted to hear the case. The case was settled six weeks later in January, months ahead of an April 24 scheduled trial date.
McGraw has been criticized for giving state contracts to campaign contributors, drawing the ire of groups like the American Tort Reform Association and the U.S. Chamber of Commerce. The U.S. Chamber Institute for Legal Reform owns Legal Newsline.
On Nov. 10, Giatras gave McGraw's campaign $1,000, as did Forbes and law partner and father William Forbes. Jesse's wife Lesli and William's wife Marianne each gave $1,000 on March 21.
In 2008, Jesse gave McGraw's campaign $1,250, while William provided $250.
Giatras and his former law partner created a political action committee that gave McGraw's campaign $2,000 in 2004. Since then, Giatras has given $1,475 to McGraw's campaign.
McGraw's office was originally represented by the Pittsburgh firm Specter Specter Evans & Manogue, but Capital One filed a motion to set aside the order admitting the attorneys to practice in the court in August 2010.
In December 2010, Forbes and Giatras were hired, and the Pittsburgh attorneys withdrew.
To sue nine companies in similar lawsuits filed together in Mason County, McGraw hired the Philadelphia firm Golomb & Holnik and Houston's Baron & Budd. The Golomb firm was involved in a private class action agains Capital One that was settled in 2010, and the company argued it shouldn't be allowed to represent the states of Mississippi and Hawaii in litigation against it.
Those two states filed lawsuits earlier this year.
The West Virginia Supreme Court also refused to hear an appeal by Janssen Pharmaceuticals in 2007 that challenged McGraw's appointment of private attorneys.
In 2006, Cooper Wiring Devices and Leviton Manufacturing said subpoenas issued by two special assistant attorneys general carried no power. McGraw's office later terminated the appointments of the two attorneys.
Editor's note: Lawrence Smith contributed to this report.
From Legal Newsline: Reach John O'Brien at email@example.com.