West Virginia Attorney General Darrell McGraw
CHARLESTON – Five days before Christmas, West Virginia taxpayers sent Charleston attorneys David Brumfield and William Druckman checks for $208,333.31 each.
Taxpayers sent the same amounts to the firm of Cohen Milstein Hausfeld and Toll in Washington and the firm of DiTrapano, Barrett and DiPiero in Charleston.
The attorneys collected the checks for helping Attorney General Darrell McGraw Jr. represent the people in a lawsuit against drug maker Purdue Pharma over alleged misrepresentation in marketing OxyContin pills.
For purposes of the suit, the attorneys acted as McGraw's special assistants.
Unlike McGraw's staff attorneys, who draw regular salaries, the outside attorneys worked on a contingency basis.
When Purdue Pharma settled McGraw's suit for $10 million a year ago, the outside attorneys received a third of the settlement -- $3,333,333.33.
The attorneys and the firms split the fee into four equal portions – $833,333.33 each. They agreed to collect half on the spot, a fourth this December, and a fourth next December.
McGraw's critics consider the big fees outrageous. They howled in 2001, when private firms collected millions apiece for handling McGraw's suit against tobacco companies.
The West Virginia Legislative Auditor conducted an investigation and did not find any authority for the fees or any prohibition against them.
The auditor advised the legislature to consider code amendments that would either allow or ban contingency fees. The legislature has not acted.
McGraw follows a national custom in picking private attorneys for contingency cases. Attorney generals all over the nation pursue mass claims with support from private firms.
All but two states signed the tobacco settlement. Dozens of private firms stand to collect billions from the settlement.
Missouri citizens sued to block the tobacco fees. The state Supreme Court declared the fees peculiar but not improper.
The Court advised Missourians who oppose contingency fees to call on the legislature to prohibit them. The legislature has not acted.
All but two states settled with State Farm Insurance over improper titling of damaged vehicles. All but two settled with the Blockbuster video rental chain over a promotion that promised "no late fee." Private firms collected in both cases.
McGraw stepped over a line in June, however, when he introduced Pittsburgh attorney John Evans at a meeting with attorneys for Capital One, a credit card company.
McGraw had served a subpoena on Capital One in an investigation of possible deceptive practices. He had not filed a complaint against Capital One.
Capital One attorney Niall Paul, of Spilman Thomas & Battle in Charleston, protested that Evans had entered the case improperly.
In West Virginia, Paul argued, an attorney from another state cannot advise a client until a judge has admitted the attorney.
McGraw sued Capital One in Lincoln County Circuit Court, identifying Troy Giatras of Charleston, Evans, and two other Pittsburgh attorneys as special assistants.
Capital One removed the suit to U.S. District Court in Charleston. Paul asked the federal court to stay the proceedings due to unlawful retention of counsel.
Paul argued that Giatras and the Pittsburgh attorneys could not exercise independence and impartiality when acting for their own pecuniary gain.
"The Attorney General's motivation is to see that the law is followed," Paul wrote. "Mr. Giatras and the Pittsburgh Lawyers seek to make money."
Two weeks later, McGraw dismissed the suit.