Attorney General Morrisey Applauds Supreme Court Ruling Upholding Office's Subpoena Power
CHARLESTON - Attorney General Patrick Morrisey today praised a recent Supreme Court of Appeals ruling that upholds the Attorney General’s Office’s power to issue investigatory subpoenas when pursuing consumer protection cases.
“This unanimous opinion, delivered by Justice Robin Davis, is a significant victory for our Office and consumers in the state,” Morrisey said. “Not only did the Court uphold our Offices right to issue investigatory subpoenas, but the Justices also upheld our power to seek temporary injunctive relief as part of our enforcement proceedings. Investigatory subpoenas and seeking injunctive relief are two essential tools in our quest to crack down on companies that either operate illegally or try to take advantage of our citizens. We applaud the court in assuring we have the ability to continue using these tools.”
The ruling stems from a case the Attorney General’s Office pursued against three New York-based companies - Cavalry SPV I, Cavalry SPV II, and Cavalry Investments - alleging the companies were collecting debts in West Virginia without a license.
The Office issued an investigative subpoena, but the companies challenged its validity and refused to comply, saying the Office was required to have an administrative hearing before issuing a subpoena and that the subpoena was invalid because there was no probable cause. The Attorney General’s Office then filed suit seeking to enjoin the companies from continuing to collect debts without a license and other relief stemming from alleged violations of state consumer protection law. The suit also asked that the Cavalry companies be required to comply with the subpoena.
A Kanawha Circuit Judge ruled that the Cavalry companies must comply in full with the subpoena and enjoined them from continuing to collect on the accounts that they had acquired prior to the time they became licensed. The Cavalry companies appealed, raising numerous challenges to the validity of the subpoena and also asserting the temporary injunction issued by the judge was too broad and not justified by the circumstances.
The Supreme Court upheld the circuit court’s order in all but one narrow respect. The Cavalry companies had alleged that an Attorney General’s investigative subpoena cannot be enforced once a suit is filed against a company involving the same conduct addressed by the subpoena. The Court clarified that an investigative subpoena survives the filing of a lawsuit by the Attorney General when the subpoena, in whole or in part, pertains to matters that do not form the basis of the suit.
“Cavalry attempted to cripple the Office’s ability to issue investigative subpoenas in consumer cases. This decision by the Supreme Court of Appeals promises to put an end to unwarranted challenges to our investigative power by companies who may be engaged in wrongdoing,” Morrisey said.
A complete copy of this opinion is available on the website of the Supreme Court of Appeals at: www.wvcourts.gov.
If you believe that you have been a victim of an unfair or deceptive practice in the sale or financing of consumer goods or services, you may file a complaint by calling the Attorney General’s office at 304-558-8986 or, toll free, at 1-800-368-8808.