CHARLESTON, W.Va. (Legal Newsline) -- A federal judge has denied a request by Capital One to alter his ruling in a dispute over West Virginia Attorney General Darrell McGraw's investigation into it.

U.S. District Judge Joseph Goodwin made the decision Monday, noting that Capital One Service's change from a Virginia-based to a national bank could lead to a new lawsuit. Capital One Bank avoided complying with McGraw's requests for information by changing to a national bank March.

Goodwin had said McGraw's investigation was "hijacked."

"The precise circumstances identified by the Court as sufficient to bar the Attorney General's investigation of COSI have come to pass: Effective Jan. 1, plaintiff Capital One Services, Inc. is an operating subsidiary of a national bank," Capital One wrote in its Jan. 8 request.

"As such, it is no longer subject to visitation by the Attorney General. Because the Attorney General has refused to accept this conclusion voluntarily, COSI respectfully requests that the Court amend the final judgment, entered on June 26, to permanently enjoin the Attorney General from continuing his investigation."

Capital One Bank's change meant the bank could only be regulated by the Office of the Comptroller of Currency.

McGraw said he received 264 complaints, leading to the issuance of subpoenas in April 2005.

"West Virginia consumer law has strong protections for consumers. The maximum late fee that can be charged on a credit card is 5% of the unpaid balance, but not more than $15; the maximum over-limit fee is 2% of the credit limit or $10, whichever is less," McGraw said in July.

"However, the OCC and the courts have deemed most state consumer protection laws unenforceable against national banks. Many national banks now have late fees and over-limit fees of $30 or more. Until Congress decides to take action, states are powerless to protect consumers who are charged such unlawful fees."

Goodwin wrote that he had broad discretion to grant Capital One's request.

"The change in status presented by COSI alters the facts upon which judgment in this case was entered and may present a new case or controversy," he wrote.

"In addition, there is no evidence presented that the Attorney General's office is still pursuing the subpoenas at issue in the original case. I will not amend a judgment without full knowledge of all the facts and I will not issue any advisory opinions."

McGraw appointed Charleston attorney Troy Giatras to help with the case. He had been named special assistant attorney general when McGraw filed suit against Capital One in 2005.

The case was dropped by McGraw just two weeks after it was filed. The suit alleged Capital One was charging fees for cards that were never activated and allowing unconscionable extension of credit, among other things.

From Legal Newsline: Reach John O'Brien by e-mail at john@legalnewsline.com.