By JAY STONEKING
In a big win for consumers, the West Virginia Supreme Court has held that the Attorney General has the authority to hire private attorneys to prosecute consumer cases (State ex rel. Discover Financial Services, Inc. vs. Neibert, No. 13-0086 (W.Va. 6/4/13); State ex rel. GalaxoSmithKline, LLC vs. Young, No. 13-0102 (W.Va. 6/4/13)).
These consolidated cases arose out of the AG (Darrell) McGraw's efforts to obtain relief against companies that were engaging in large-scale consumer violations. In the first case, Discover and six other credit card companies engaged in deceptive practices that were meant to trick consumers into paying for credit card service plans.
In the second case, a drug company deceptively marketed a diabetes drug, Avandia, throughout the State of West Virginia. To assist in prosecuting these cases, the AG hired private West Virginia attorneys who would be paid, if at all, out of any attorney fee award the companies were required to pay.
The companies, represented by some of the largest defense firms in West Virginia, argued that the AG did not have authority to hire private attorneys. Consequently, they brought motions seeking to have the private attorneys disqualified.
Their arguments fell into three broad categories. First, they argued that hiring private attorneys was prohibited under the West Virginia Governmental Ethics Act, W.Va. Code 6B-1-1 et seq. Second, they argued that the Rules of Professional Conduct prohibited attorneys from taking assignments from the AG because of their own self-interest (i.e., their interest in recovering fees.) Third, they argued that there was no express statutory authority for the AG to hire private attorneys.
Not surprisingly, the Supreme Court concluded that the state's ethics law did not apply to the AG's practice of hiring private attorneys. In fact, the ethics law was written very narrowly so it applied only to employees who were paid "wages" or "salary" for their services. Because the private attorneys were not being paid by the AG but, instead, were to be paid - if at all - out of a discretionary fee award made by the trial court, the ethics law was inapplicable.
The Supreme Court also rejected the argument that the Rules of Professional Conduct came into play. In fact, the argument that the attorneys hired by the AG were motivated by self interest was contradicted by the AG's engagement letter itself, which expressly recognized the AG's final authority to decide all matters of litigation tactics and strategy.
Finally, the Supreme Court recognized the AG's inherent, common law power to hire private attorneys. Indeed, case law stretching over 100 years made it abundantly clear that the AG possessed common law powers that actually predated the Civil War. In three new syllabus points, the Supreme Court formally recognized the AG's inherent, common law powers, including the power to hire private attorneys for litigation purposes.
Behind all of the arguments advanced by the companies, however, was a much more sinister agenda. The harsh reality is that the AG does not have the manpower or the budget to prosecute the sheer multitude of cases that must be brought for the protection of West Virginia's consumers. The hiring of private attorneys is not only convenient, it is an essential tool in the AG's fight against large, nefarious companies that are determined to engage in unfair and deceptive practices. We applaud the Supreme Court's decision supporting the AG's hiring practices.
Jay Stoneking is an attorney with Bordas & Bordas in Wheeling. This editorial appeared on the firm's blog.