SER Discover Financial Services, Inc. v. Hon. David W. Nibert and SER Glaxosmithkline, LLC v. Hon. James H. Young, Jr.
231 W. Va. 227
| W. Va. | 2013Background
- Consolidated writ petitions seeking prohibitions against circuit-court orders denying motions to disqualify private counsel as special assistant attorneys general.
- Attorneys general appointed private lawyers as lead counsel; petitions allege ethics and conflict issues.
- WV Ethics Act definition of employee and fee arrangements central to disputes about compensation.
- Court rejects arguments; holds special assistant attorneys general are not state employees for ethics purposes.
- Court upholds AG’s common-law authority to appoint such counsel and to have court-approved attorney-fee awards drawn from the losing party.
- Final: writs denied; decisions addressed Rule 1.7 conflicts, compensation, and authority.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Are SAAGs employees under the WV Ethics Act? | Petitioners say SAAGs are employees due to contracts of hire. | Respondent contends SAAGs are not employees under the Act. | SAAGs are not employees under the Act. |
| Does Rule 1.7(b) prohibit the fee arrangements with SAAGs? | Contingent-fee-like arrangements create a material conflict of interest. | Supervision by the AG mitigates conflict; fee structure not improper. | Rule 1.7(b) not violated. |
| Does the Attorney General have common-law authority to appoint SAAGs? | Manchin v Browning limits common-law powers of AG. | AG may appoint SAAGs under common law. | AG has inherent common-law authority to appoint SAAGs. |
| May compensation to SAAGs be paid via court-awarded fees drawn from the losing party? | Contingent-fee-style payments from defendants resolve funding. | Such payments align with common-law authority and court discretion; not constitutionally barred. | AG may provide for such court-approved fee awards. |
| Did WV Legislature experience bar to appointing SAAGs under 5-3-3? | Statute restricts to assistants; no express authorization for special assistants. | Inherent common-law authority permits appointment regardless of statute; inclusio unius not controlling. | Common-law authority allows SAAG appointment; statute does not expressly prohibit. |
Key Cases Cited
- State ex rel. Bluestone Coal Corp. v. Mazzone, 226 W. Va. 148 (2010) (disqualification standards; five-factor test for writs of prohibition; appealability)
- Manchin v. Browning, 170 W. Va. 779 (1982) (held lack of common-law powers in WV AG; later overruled)
- State ex rel. McGraw v. Burton, 212 W. Va. 23 (2002) (recognizes AG’s inherent powers; separation of powers)
- Ehrlick v. Ehrlick, 65 W. Va. 700 (1909) (common-law powers of AG; prerogative to represent State)
- People ex rel. Nixon v. American Tobacco Co., 34 S.W.3d 122 (2000) (state common-law authority to appoint outside counsel; contingency-fee arrangements)
- Dailey v. Bechtel Corp., 157 W. Va. 1023 (1974) (stare decisis and constitutional interpretation guidance)