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WV Supreme Court case asks whether Attorney General can sue and also issue subpoenas

CHARLESTON, W.Va. -- The West Virginia attorney general's investigative subpoena powers were called into question in a case before the state Supreme Court. 

The issue is whether the office should be allowed to issue subpoenas to a company it is also suing.

The original Kanawha County case, which involves a company's collection practices, was filed by former Attorney General Darrell McGraw.

It was filed against Cavalry SPV I LLC, Cavalry SPV II LLC, Cavalry Investments LLC, Cavalry Portfolio Services LLC, Michael Godner, Steve Anderson, Don Strauch and Christian Parker.

Parties presented their case to justices in an oral argument hearing Tuesday.

Cavalry defendants appealed to the state's highest court, challenging the attorney general's investigative subpoenas and a temporary injunction granted against them.

The Kanawha County Circuit Court ruled SPV I, SPV II and Cavalry Investments violated portions of the West Virginia Consumer Credit and Protection Act because they collected debts when they weren't licensed to do so, the order states.

The court granted a temporary injunction against these defendants but not Cavalry Portfolio Services LLC.

The lower court also granted the attorney general's request, requiring defendants to comply with the investigative subpoena.

In the brief to the state Supreme Court, Cavalry said the court shouldn't have let the attorney general enforce the investigative subpoenas and instead should have eliminated the subpoenas because the office filed a civil lawsuit alleging violations of the West Virginia Consumer Credit Protection Act.

Cavalry argues the act gives the attorney general the power to issue these subpoenas to determine whether violations occurred, the brief states.

"By filing a verified complaint, the Attorney General was evincing the fact that he had concluded to his satisfaction that such violations had indeed occurred," Cavalry's brief states.

Cavalry also argued an administrative hearing on the subpoenas, which they said was required by state code, was not held.

In his brief to the state Supreme Court, McGraw said the office received complaints Cavalry was collecting debts without a license and surety bond and also may have been practicing other prohibited debt collection practices.

The brief argued the office could not get Cavalry to comply so it issued an investigative subpoena to get Cavalry to produce documents.

"Since entry of the order compelling compliance with the subpoena, Cavalry has attempted to 'game the system' by stating at times that it intended to substantially comply with the subpoena .<\!p>.<\!p>. by filing motions to dissolve or modify intended to delay enforcement or extend the time to appeal, and by filing two motions to stay, neither of which have been granted," the attorney general's brief argues.

The brief argued Cavalry made a "frivolous challenge to the fundamental power" the Legislature gave to the attorney general.

The attorney general took issue with Cavalry's claim that the filing of a complaint should have ended the investigation and eliminated the subpoenas, saying there are no cases to support that position.

"It is well settled that commencement of a civil action does not terminate an administrative agency's investigative authority nor moot its administrative subpoena," the brief states.

The brief also argued the attorney general does not have to issue a subpoena only in an administrative hearing, saying the argument is "contrary to any logical reading" of the West Virginia Consumer Credit Protection Act.


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