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Supreme Court to rule on attorney general's use of private counsel

CHARLESTON, W.Va. -- The state Supreme Court soon will decide whether the Attorney General's Office is allowed to hire outside attorneys to help litigate cases.

The decision follows a lengthy legal battle stemming from consumer protection disputes between private companies and former Attorney General Darrell McGraw.

Representatives from both sides presented oral arguments in two different cases Tuesday before the Supreme Court.

The Attorney General's Office regularly hires private attorneys to help with consumer protection cases. Several defendants in those cases — namely credit card companies and health care giant GlaxoSmithKline — say those attorneys have a financial interest to prevail in the case that goes against the public roles they assume.

"The special assistants must advise the (Attorney General) unclouded by the possibility of private financial gain when assessing such issues as whether conduct violates the law, or the best balance between different forms of relief in protecting the public interest," states a petition from credit card companies who disagree with a lower court's ruling in the case.

"The engagement here on a contingent-fee basis makes it impossible for the special assistants to make these judgments in a neutral manner, which renders the contingent-fee engagements illegal under the Ethics Rules," it continues.

The companies also believe the arrangements are illegal and usurp the power of the Legislature.

Mason County Circuit Judge David Nibert rejected the companies' complaint in August 2012. He ruled that the companies failed to provide sufficient proof of their claims and said other courts on many different occasions also have upheld the attorney general's authority to hire outside attorneys.

"Defendants have made no showing that any counsel to appear in these cases on behalf of the state has breached the Code of Professionalism, has any limiting responsibilities to another client or third person, or labors under any impairment of loyalty," Nibert states in his ruling.

"As opposed to demonstrating any relevant facts, defendants argue that the fee agreements standing alone create a conflict of interest. To the contrary, the agreements state the counsel will receive a reasonable fee approved by this court," Nibert continues.

The companies alleging improper action by the Attorney General's Office state Nibert's ruling contains several legal errors and exceeded its power, requiring clarification from the Supreme Court.

In response, the Attorney General's Office said the companies' lawsuit is an attempt to interfere with the consumer protection lawsuits. There is no evidence of any wrongdoing by the outside attorneys and the companies' complaint doesn't challenge any of the circuit court's findings of fact, according to the office's response.

"Far from the extraordinary case that requires an extraordinary remedy, this case is little more than an effort by Petitioners to advance in the judicial system a policy issue that belongs before the Legislature," the response states.

Opponents of the outside counsel hiring practice accused McGraw of randomly picking attorneys without any bidding process. Newly elected Attorney General Patrick Morrisey recently announced his office had implemented new procedures for hiring outside counsel.

The new policy requires the office to send out requests for proposals when private attorneys are needed.  

The companies involved in the first lawsuit include Citigroup, Discover Financial Services, Bank of America, GE Money Bank, HSBC Card Services, and JP Morgan Chase.

Robert W. Trenchard of New York City-based WilmerHale made oral arguments on behalf of the companies, said Supreme Court spokesperson Jennifer Bundy. Dan Greear represented the Attorney General's Office, she said.

GlaxoSmithKline is appealing the ruling of Wayne County Circuit Judge James Young in a similar lawsuit. Greear is also representing the attorney general in that case. Bundy said Michael Farrell of Huntington-based Farrell, White and Legg was representing the health care company.

Beth Ryan, attorney general spokeswoman, said the office does not comment on pending litigation. A representative for GlaxoSmithKline said the same.

The Supreme Court is expected to make a decision in the case by June 19, the end of its current session.

Contact writer Dave Boucher at 304-348-4843 or david.boucher@dailymail.com. Follow him at www.twitter.com/Dave_Boucher1. ;   


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