Charleston Daily Mail - Visa / Mastercard Case and Attorney General Darrell McGraw- Joanne Doroshow
As executive director of a national consumer organization that has monitored the important work of state attorneys general, I must respectfully disagree with the Daily Mail's June 17 editorial about the important settlement reached by Attorney General Darrell McGraw in his lawsuit against Visa and Master- card on behalf of West Virginia consumers.
The lawsuit claimed that, in effect, Visa and Mastercard illegally extracted a small tax on every purchase in West Virginia by forcing merchants to cover the cost of accepting both the Visa and MasterCard debit and credit cards.
As a result of this case, West Virginia consumers will get a unique benefit.
They will be able to purchase Energy Star products tax-free during three separate tax holidays over the next three years.
These tax holidays will be completely funded by Visa and MasterCard. The dates for the sales tax holiday were chosen by the Legislature and the governor. All the branches of West Virginia government had a voice in shaping the Visa-MasterCard settlement.
What's more, West Virginia is the only state in which consumers will receive compensation from Visa and MasterCard for their alleged illegal activity. Courts in over a dozen other states dismissed similar consumer lawsuits against Visa and MasterCard.
The fee that is recommended to be paid outside counsel who helped McGraw - 25 percent - represents years of work and effort to prosecute and then negotiate a settlement with Visa and MasterCard. The state of West Virginia and its taxpayers put up no money for the cost of this litigation.
In addition, the fees will be independently reviewed by a court, which can reject them.
The fees did not come out of the settlement to consumers. They are being paid separately by Visa and Mastercard.
State attorneys general are among our country's most important public advocates, targeting corrupt and harmful business practices on behalf of state consumers.
Yet these offices are often underfunded and understaffed, and must work with private outside counsel to accomplish their goals.
Unfortunately, such arrangements have been the target of unfair criticism by conservative business groups whose members have often been found liable by state AGs and forced to repay millions of dollars to taxpayers.
New York, N.Y.
Doroshow is executive director of the Center for Justice and Democracy, a tax-exempt non-profit, non-partisan organization. Its Web site says it works to educate the public about the importance of the civil justice system and the dangers of so-called "tort reforms."
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