BlueHippo removes suit to federal court, responds to AG McGraw

By John O'Brien | Apr 10, 2007


CHARLESTON - At BlueHippo Funding's request, state Attorney General Darrell McGraw's lawsuit against it was recently removed to federal court.

The defendant also filed a 73-page answer last week to McGraw's allegations that it has violated the West Virginia Credit and Consumer Protection Act during its sale of computers.

The company denies most of McGraw's allegation, though admits that it has not registered with the state's Department of Tax and Revenue and did not pay the department's surety bond.

In an 18-count suit, McGraw seeks an injunction, stopping BlueHippo from doing business in West Virginia. McGraw also seeks a $200,000 bond from the company and $5,000 for each violation of the West Virginia Telemarketing Act, all to be paid to the state within 10 days of receiving the orders.

The suit, filed first in Kanawha Circuit Court, names BlueHippo Funding, a Maryland limited liability corporation; BlueHippo Capital, LLC, a Nevada limited liability corporation and Joseph Rensin, the manager of BlueHippo Funding and BlueHippo Capital.

Senior Assistant Attorney General Charli Fulton is counsel for the case, which had been assigned to Judge Tod Kaufman. It is now before U.S. District Judge John T. Copenhaver, Jr.

In the suit filed March 12 by McGraw, consumers claim to have paid for equipment they never received, or did receive but that did not work. Also, some consumers paid prices much higher than they would have paid at a store.

A news release from McGraw states one consumer paid about $1,800 for a computer similar to one she bought at a national retail store for $400.

Counsel for BlueHippo, Kara Cunningham of Steptoe Johnson in Charleston, wrote that McGraw's complaint raised questions of federal law. The notice of removal mentions a request of nondischargeability from McGraw that would prevent any debt owed by the company to be eliminated through bankruptcy proceedings.

She declined to comment, though, the notice of removal said, "The dischargeability (or nondischargeability) of a debt under this statute is a federal question, and the Attorney General's request for a finding of nondischargeability thus provides an additional ground for removal.

"Because the Attorney General apparently has requested a finding of nondischargeability, the jurisdictional requirements... are satisfied and removal is proper."

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