Each week, Crowell & Moring’s State Attorneys General team highlights significant actions that State AGs have taken. Here are this week’s updates.

Monday, October 4, 2021

Consumer Protection

  • New Jersey Acting Attorney General Bruck announced that the Division of Consumer Affairs reached a settlement agreement for over $138,000 with five gas stations that were overcharging consumers, including by selling regular gas as premium. In addition to the monetary payment, the settlement includes injunctive relief.

Social Media

  • Connecticut Attorney General Tong is requesting that TikTok’s leadership meet with educators and parents in Connecticut to explain its policies to prevent platform misuse and to commit to reforms that stop dangerous and harmful content.

Tuesday, October 5, 2021

Healthcare Rights and Access

  • California Attorney General Bonta announced his conditional approval of the sale of acute psychiatric inpatient hospital Adventist Health Vallejo to Acadia Healthcare Company Inc. The sale is contingent on conditions that address the risk of price increases in a limited market and ensure the availability of high-quality services. Some of the conditions include a price freeze, a monitor, and an evaluation team.

Social Media

  • A bipartisan coalition of 52 attorneys general expressed their support for hearings the U.S. Senate Committee on Commerce, Science, and Transportation’s Subcommittee on Consumer Protection, Product Safety, and Data Security is conducting about mental health harm to children from social media. The coalition is hoping the hearings uncover more about the business practices social media companies are employing to gain the attention of young people on their platforms and argues that the government should hold these companies accountable.

Wednesday, October 6, 2021

Consumer Protection

  • Pennsylvania Attorney General Shapiro announced a lawsuit against Great Conventions LLC and its owner for allegedly violating state consumer protection law by canceling the Great Philadelphia Comic Con without issuing refunds. The lawsuit seeks restitution, civil penalties, and a permanent injunction from selling tickets to or operating public events in the state.
  • Florida Attorney General Moody issued a press release warning consumers about a 16% increase in robocalls in 2021, as compared to last year. The press release states that Attorney General Moody is working with attorneys general nationwide to combat call-related scams.

Criminal Fraud Schemes

  • Virginia Attorney General Herring announced the first worker misclassification charges his Worker Protection Unit has brought. The charges were brought against GTO Drywall, LLC and Richmond Drywall Installers Constructors, Inc., which were indicted on counts of felony embezzlement related to misclassifying employees as independent contractors.

Thursday, October 7, 2021

Cybersecurity

  • Oregon Attorney General Rosenblum announced an increase in data breaches reported to the Attorney General’s Office. There have been 131 reported breaches so far in 2021, compared with 110 last year. The press release also includes Oregon’s $50,000 September settlement with public accounting firm Gustafson & Company LLC over a 2020 data breach.

Environmental

  • Massachusetts Attorney General Healey announced a lawsuit against the owner and former managers of MRM Project Managementfor allegedly conducting illegal asbestos work, illegally disposing of waste, and demolishing buildings and bridges without filing the proper notifications. The lawsuit alleges that this conduct violated several state environmental laws and regulations.

Online Charitable Fundraising

  • California Attorney General Bonta applauded that Governor Newsom signed into law his sponsored legislation that will provide oversight of internet-based charitable fundraising. Among other things, the new law, which goes into effect on January 1, 2023, authorizes attorney general regulations beginning on January 1, 2022, creates clear definitions of conduct subject to regulation, and requires meaningful disclosures and prompt distribution of donations.

U.S. Postal Service

  • A coalition of 20 attorneys general led by Pennsylvania Attorney General Shapiro and New York Attorney General James submitted a formal complaint asking the Postal Regulatory Commission to order the U.S. Postal Service to request an advisory opinion on the Postmaster General’s plan to change the Service. The coalition is arguing that the plan does not have meaningful oversight and thus undermines public accountability, particularly after 2020 operational changes resulted in widespread mail delays.

Friday, October 8, 2021

Consumer Protection

  • Michigan Attorney General Nessel issued a notice of intended action to King Crawford Enterprises, LLC, which is conducting business as Nano Hearing Aids, in response to a large quantity of Better Business Bureau complaints alleging unlawful business practices related to hearing aid sales. Among other things, the business is being accused of failing to make proper disclosures and causing misunderstanding over goods or services’ source, approval, sponsorship, or certification.
  • The Consumer Financial Protection Bureau (“CFPB”) filed a complaint and proposed consent order against reverse mortgage lender American Advisors Group, alleging that it used deceptive and inflated home estimates to induce consumers to take out reverse mortgages. The CFPB is also alleging that the company violated a 2016 consent order with this conduct. The consent order includes a $1.1 million civil penalty, $173,400 in restitution, and injunctive relief.

Environmental

  • New Jersey Acting Attorney General Bruck announced seven new environmental enforcement actions. Five of these focus on harmful contamination in overburdened communities, one focuses on underground fuel storage tanks, and the last concerns an abandoned gasoline filling station with unregistered and unmonitored fuel storage tanks.

Labor and Employment

  • New York Attorney General James issued a statement in support of Catholic Health System employees who are currently on strike, saying she supports their demands for a fair wage and safe work environment.

Each week, Crowell & Moring’s State Attorneys General team highlights significant actions that State AGs have taken. Here are this week’s updates.

Monday, September 27, 2021

Energy

  • New York Attorney General James announced a $6 million agreement with National Grid, resolving allegations that it knowingly provided false reports to the Long Island Power Authority on the amount of electricity delivered but not billed for. The $6 million payment will be used to subsidize heat pump modernization and replacement for low- and moderate-income individuals.

Environmental – “Defeat Devices”

  • New Hampshire Attorney General Formella announced a settlement agreement with Volkswagen Group of Americaand related companies for using “defeat devices,” which resulted in excess Nitrogen Oxide emissions of up to more than 30 times the legal limit. The settlement includes a $1.15 million payment and the installation of a fast charging station in New Hampshire.

Social Media

  • Vermont Attorney General Donovan applauded Facebook’s announcement that it will pause its “Instagram Kids” app designed for children. Attorney General Donovan stated that he is still concerned about social media companies’ actions to protect children.

U.S. Environmental Protection Agency

  • A coalition of 22 state attorneys general and several cities and counties, led by California Attorney General Bonta, sent a letter to the U.S. Environmental Protection Agency, asking it to adopt stricter greenhouse gas emissions standards for passenger cars and light trucks. The coalition believes automakers are well-positioned to meet these standards and that the stricter standards better advance the Clean Air Act’s objectives.

Tuesday, September 28, 2021

Consumer Protection

  • Washington Attorney General Ferguson announced a consent decree against timeshare exit company Reed Hein & Associates LLC, which includes a guaranteed $2.61 million payment and a potential additional $19 million if it violates the consent decree’s terms. The consent decree resolves a lawsuit over a deceptive 100% money-back guarantee offer. In addition to the monetary payment, the consent decree includes injunctive relief and requires the company to retract statements it made in response to the Attorney General’s lawsuit.
  • Massachusetts Attorney General Healey issued an advisory to automobile dealers and consumers about auto dealers’ obligations surrounding vehicle advertising and pricing. For example, the advisory reminds auto dealers that they are required to accurately advertise prices, honor the prices advertised, and comply with provisions in consumer lease contracts.
  • It was reported that Colorado Attorney General Weiser announced that Compass Bank and Air Academy Federal Credit Union must refund borrowers after they failed to return guaranteed automobile protection fees that they improperly retained. In total, Compass Bank must refund about $1.68 million, and the Credit Union is still determining the amount it owes.

National Association of Attorneys General Conference

  • The National Association of Attorneys General announced a conference it is hosting from October 7-8, 2021 in conjunction with Vermont Attorney General Donovan on the surveillance economy. The conference will include remarks by several attorneys general and federal, state and local partners, and it will be about balancing technology advances with individuals’ rights to privacy.

Price Gouging

  • California Attorney General Bonta announced that the state price gouging law is in effect in Shasta County following a declaration of a state of emergency because of the Fawn Fire.

Wednesday, September 29, 2021

Environment

  • Michigan Attorney General Nessel announced a settlement against Concentrated Animal Feeding Operation Slater Farms for causing pollution and failing to comply with permit requirements. The settlement includes a partially waived $120,000 penalty and requires Slater Farms to accept additional oversight and permit conditions over the storage, management, and disposal of waste.

Housing

  • Washington D.C. Attorney General Racine announced a final judgment against landlord Jefferson-11th Street, LLC, including over $422,000 in rent restitution and $215,000 in penalties for housing code violations, including mold contamination, lack of heat, and vermin infestations. The judgment also requires the landlord to create policies and trainings to prevent this conduct from reoccurring and to hire a new management company.

U.S. Environmental Protection Agency

  • A coalition of 16 attorneys general sent a letter to the U.S. Environmental Protection Agency, objecting to new standards on greenhouse gas emissions from 2023 and later model light-duty vehicles. The coalition is arguing that the standards disregard individual states’ conditions and economies, as they are based on California priorities.

Thursday, September 30, 2021

Consumer Fraud

  • Minnesota Attorney General Ellison announced a bankruptcy court’s approval of a settlement including $23.6 million in debt relief and $15.8 million in restitution for former students of Minnesota School of Business and Globe University. The original lawsuit alleged that the institutions made false claims about criminal justice programs and charged illegal interest rates.

Energy

  • Michigan Attorney General Nessel announced that the Michigan Public Service Commission approved a net under-recovery of $145,023 in DTE Electric’s 2019 Reconciliation case, agreeing with Attorney General Nessel’s arguments and analysis. This creates up to $3,157,764 in savings for DTE consumers.
  • North Carolina Attorney General Stein applauded Duke Energy’s decision to voluntarily extend its moratorium on utility disconnections until March 2022 for those customers who qualify for funding assistance.

Fraud Scheme

  • Massachusetts Attorney General Healey announced that the former executive director of non-profit homeless shelter Casa Nueva Vida was indicted for allegedly stealing almost $1.5 million from the organization and lying under oath.

Healthcare – Removing Race Formulas

  • Massachusetts Attorney General Healey is urging health care providers to remove race from formulas they use to estimate kidney function. The formulas determine the health care services patients will receive and have been criticized for limiting access to care for patients of color.

Housing Discrimination

  • Virginia Attorney General Herring announced the filing of the first lawsuit under the Virginia Fair Housing Law’s systemic discrimination provision. The lawsuit, which seeks $8 million in tenant compensation, civil penalties, and attorneys’ fees, was filed against a landlord for allegedly discriminating against tenants through abusive language and conduct.

Friday, October 1, 2021

Environmental Protection Bureau

  • New York Attorney General James announced a lawsuit against Endzone Properties, Inc. and a landlord for violating lead paint laws and failing to address and disclose hazards at properties where at least 18 children were poisoned. The lawsuit seeks disgorgement, civil penalties and fines, and injunctive relief.

As the world continues to settle into its new normal, regulators have so, too. Recently, State Attorneys General (AGs) are increasingly focused on several specific enforcement priorities, including (1) price gouging; (2) privacy concerns; (3) antitrust litigation; and (4) harmful substances in products and environmental issues. Many of these priorities have gained prominence in the midst of the COVID-19 pandemic.

Price Gouging

Price gouging enforcement was triggered in large part in March 2020 from the COVID-19 pandemic. Many State AGs have been actively and aggressively investigating price gouging. Recent emergencies, outside of COVID-19, have also triggered emergency changes in costs, including from forest fires, hurricanes, and other severe weather events and natural disasters. States have broad authority in this area, and enforcement varies state-to-state. Usually State AGs look for any issues with change in cost post-emergency, not during the emergency, looking to the reasonableness of the increase. Some states have percentage limits, others cover both essential and non-essential goods. Price increases of 10% or less will generally be considered low risk. Price increases will generally be allowed where sellers can tie price increases to increased costs. It is a best practice is to have documentation supporting any decision for price increases.

Privacy Concerns

There has been an increased focus on protecting personal data and consumer privacy. Specifically, State AGs have been focused on data breaches and unlawful location tracking, and State AGs have looked into certain seller practices, such as screen scraping without notice or consent. Arizona AG Mark Brnovich has investigated companies’ tracking of consumer smartphone locations.

State specific laws require detailed compliance with data protection and privacy requirements: the first act passed in 2018 was the California Consumer Privacy Act (CCPA). Next there was the Colorado Privacy Act (CPA) then the Virginia Consumer Data Protection Act (VCPDA). These acts have similar requirements: allowing consumers to access their personal data; correct any inaccuracies with their personal data; and delete personal data. Companies must have transparency on what personal data is collected, how it is used, and the consumer’s rights. State AGs have authority to enforce these acts within their respective states.

In November 2020, California passed the California Privacy Rights Act (CPRA). The CPRA changed the CCPA, but did not replace it, expanding the rights of Californians and giving rights to consumers to rectify inaccurate personal data. The new law also created and gave authority to California’s new Privacy Protection Agency; changed the definition of a “business”; and made businesses responsible for how third parties use/share personal data that the business collects.

States also focus on protecting minors and children through the Children’s Online Privacy Protection Act (COPPA). Maintaining consumer privacy and data security remain, and will continue to be, a significant area of concern for State AGs.

Antitrust Litigation

There has been an increase in State AG antitrust litigation. Notable examples are described below:

  • Facebook: New York AG Letitia James and 48 AGs have filed complaints to end Facebook’s alleged monopoly. This was dismissed in June 2021, but there are currently efforts underway to try to bring this case back.
  • Amazon: District of Columbia AG Karl Racine is pursuing novel state-law based antitrust claims against Amazon.
  • Google: Lawsuit by 37 AGs against Google, also referred to as the “Gatekeeper of Our Digital Devices,” for allegedly maintaining a monopoly in the market for distributing apps for the Android operating system.

On September 23, 2021 the Senate Judiciary Committee approved legislation that allows State AGs to choose which court hears their antitrust cases. It is retroactive, and the intent is to prevent multi-district litigation (MDLs). Congress is also considering increases in the Department of Justice’s (DOJ) budget, specifically for the Antitrust Division, and also for the Federal Trade Commission (FTC). Although State AGs have not taken their cues from related federal actions there has been increased cooperation between the two, so an increased focus on antitrust enforcement at the federal level could lead to the same at the State AG level.

Harmful Substances in Products and Environmental Issues

A significant area of focus for State AGs has been harmful substances in products, and other environmental issues, such as product emissions and discharges. State AGs have looked closely at the harmful ingredients affecting consumers. Notable examples and relevant areas of inquiries are outlined below:

  • Talc litigation against Johnson & Johnson for baby powder.
  • Coalition of 15 State AGs have submitted comments to the EPA in support of the EPA’s proposal to include per and polyfluoroalkyl substances, also known as PFAS as a class in the Contaminant Candidate List 5.
    • PFAS Litigation: District of Columbia AG Racine investigating and considering litigation against chemical manufacturer for the distribution and sale of synthetic pesticides.
  • Litigation on toxins in groundwater.
  • District of Columbia AG Racine soliciting counsel to investigate and possibly litigate claims against baby food company for allegedly misleading parents about the health and safety of its products.
  • California AG Rob Bonta secured a court decision requiring a public health agency to comply with air monitoring requirements for petroleum refineries.
  • Coalition of 20 State AGs sent a letter to Congressional leadership, asking Congress to allocate funding in its reconciliation bill to programs that promote clean energy, fight pollution, and improve air quality
  • Vermont AG T.J. Donovan filed suit against fossil fuel companies alleging that they violated Vermont’s Consumer Protection Act (VCPA) by concealing information and disseminating misleading marketing about climate change and fossil fuels. AG Donovan sought disgorgement, civil penalties, and injunctive relief.
  • Coalition of 13 State AGs sent a comment letter to the National Highway Traffic Safety Administration (NHTSA) urging higher fines for fuel economy violations.

Retailers should remain vigilant to the ingredients they put in their products and should ensure that the manufacturing and distribution processes they employ are safe.

***

State AGs have been actively engaged on several areas of importance as the world continues to navigate within a global pandemic. To take on these efforts, State AGs have increasingly sought the help of outside counsel to litigate its claims. This has been a marked shift in strategy from just five years ago. These shifts and State AG enforcement trends identified above should serve as a guide for companies as they continue to identify and employ best practices for their own policies as they adapt and settle into the new normal.

Each week, Crowell & Moring’s State Attorneys General team highlights significant actions that State AGs have taken. Here are this week’s updates.

Monday, September 20, 2021

Antitrust and Competition

  • A bipartisan coalition of 30 state attorneys general, along with the attorneys general from Washington D.C. and Guam sent a letter to leaders of the U.S. House and Senate, applauding legislative proposals which would modernize federal antitrust law and urging the House and Senate to continue improving the bills being considered. The coalition is seeking changes that respond to shifts in technology, decreased competition in particular sectors, and judicial skepticism towards strong antitrust enforcement. The coalition is also asking Congress to include provisions confirming that states are sovereigns that are equal to federal enforcers, including in terms of the timing of challenging anticompetitive activity.

National Highway Transportation Safety Administration

  • A coalition of 13 attorneys general led by California Attorney General Bonta and New York Attorney General James sent a comment letter to the National Highway Transportation Safety Administration (“NHTSA”) asking the NHTSA to re-implement penalties for automobile manufacturers that failed to meet corporate average fuel economy standards for vehicles in model year 2019-2021. The coalition is seeking to restore the penalty to $14 for every tenth of a mile-per-gallon below the standards. It is currently $5.50.

Unfair and Deceptive Trade Practices Act

  • North Carolina Attorney General Stein announced a consent judgment with medical training program Stepping Stone Phlebotomy LLC, resolving allegations against the program for operating without a license. The order requires Stepping Stone to provide refunds to students who did not pass the national certification exam upon request, as well as to refrain from operating without a license in the future.

Tuesday, September 21, 2021

Antitrust and Competition

  • California Attorney General Bonta announced a consent decree that will combat potential anticompetitive effects of the Providence Group, Inc. and Plum Healthcare The two entities own dozens of skilled nursing facilities in the state. In order to fulfill the agreement’s terms, Providence must sell one of its facilities. It also must appoint a monitor to oversee the sale and ensure quality patient care.
  • New York Attorney General James sent letters to the U.S. Department of Transportation and the Federal Aviation Administration, asking the agencies to create rules that would fully use gate slots at airports, in order to increase competition.

Fraud Schemes

  • California Attorney General Bonta announced the arrest of the former owner of third-party debt relief businesses for a $6,130,000 federal student loan debt relief scam. The defendants involved in this scheme allegedly offered to reduce or eliminate federal student loan debt but instead stole money from the victims.

Wednesday, September 22, 2021

Consumer Protection

  • Ohio Attorney General Yost filed a lawsuit against the owner of Flowers by Des, who allegedly violated state consumer protection law by accepting money from consumers but failing to deliver flower services at important events. The lawsuit is seeking at least $50,000 in refunds.

Environmental Justice

  • California Attorney General Bonta announced that he secured a court decision requiring the San Joaquin Valley Unified Air Pollution Control District to comply with air monitoring requirements for petroleum refineries. The press release notes that these refineries are one of the largest non-vehicle pollution sources and are often located in low-income communities and communities of color that already suffer significant health disparities from pollution.

Labor and Employment

  • New York Attorney General James announced an agreement with industrial laundry facility FDR Services Corporation of New York, holding it accountable for illegally firing seven workers and denying paid sick leave to other workers who took sick leave for COVID-19 illness. The agreement includes a $400,000 payment and the reinstatement of employees who wish to return to the company, including the reinstatement of benefits the employees received prior to their discharge.

Thursday, September 23, 2021

Charities/Non-Profits

  • Minnesota Attorney General Ellison announced settlement agreements requiring a board member of children’s charity A Place to Call Home to pay back $66,000 in funds used for her personal benefit. The settlements also bar the board member and two former directors from operating a charity, soliciting charitable contributions, or having access to charitable assets in the state. The charity must also dissolve under the agreements.

Consumer Protection

  • West Virginia Attorney General Morrisey announced a lawsuit against collection agency Bayside Capital Services, LLC and its owner, alleging that they engaged in debt collection without proper licensing and used illegal tactics, such as threatening arrest and contacting consumers at their workplace. The lawsuit seeks civil penalties, restitution, and a court order prohibiting the company from debt collection in West Virginia.
  • Arkansas Attorney General Rutledge announced that the Arkansas Public Service Commission granted her request for a $10.4 million credit for customers of CenterPoint Energy Arkansas Gas in response to allegations of excessive charges.
  • New York Attorney General James urged customers of online plant company ShrubBucket to file a claim in the company’s bankruptcy proceedings if they are owed money for undelivered products or services. The company allegedly continued to wrongfully accept deposits up to a week before its bankruptcy filing.

Environmental – PCB Contamination

  • Delaware Attorney General Jennings announced a lawsuit against agrochemical company Monsanto and two of its spinoffs for damaging Delaware’s natural resources through their use of polychlorinated biphenyls. The lawsuit is seeking clean-up costs and damages.

Fraud Schemes

  • Florida Attorney General Moody announced a $490,000 judgment against several heating, ventilation and air conditioning companies for allegedly operating a bait-and-switch air-conditioning scheme. Under the scheme, the companies ultimately refused to provide services and claimed that ducts were damaged or contained mold, using high-pressure sales tactics in some instances.

Housing – Lead Poisoning

  • New York Attorney General James announced an agreement with property management company Chestnut Holdings of New York, Inc., resolving a lawsuit alleging that the company violated New York City’s laws preventing lead poisoning. The agreement requires the company to pay $300,000 towards lead poisoning prevention initiatives and to ensure its apartments comply with the law.

Medicaid Fraud

  • Minnesota Attorney General Ellison announced a guilty plea against the leader of a network that defrauded the state Medicaid program out of over $1 million through clinic Newcomb Counseling. Among other things, the defendants billed for group therapy as if it was individual sessions and billed for services that were never actually provided.

Price Gouging

  • Virginia Attorney General Herring announced a settlement with Saly Inc. d/b/a RIR Mart Exxonfor allegedly violating the Virginia Post-Disaster Anti-Price Gouging Act by charging unconscionable prices on gasoline during the state of emergency declared for the Colonial Pipeline shutdown. The gas station increased its prices by almost 29% after the declaration of the state of emergency. The settlement includes a payment of $2,500 in civil penalties and attorneys’ fees, over $300 in disgorgement, and injunctive relief.

Friday, September 24, 2021

Education – Public Service Loan Forgiveness

  • A coalition of 22 attorneys general led by California Attorney General Bonta sent a letter to the S. Department of Education asking it to improve the Public Service Loan Forgiveness program, which has rejected the majority of applications. Specifically, the coalition is asking the Department to provide immediate relief and correct errors, improve servicer accountability and oversight, extend the pause on student loan payments, and conduct an outreach program.

Each week, Crowell & Moring’s State Attorneys General team highlights significant actions that State AGs have taken. Here are this week’s updates.

Monday, September 13, 2021

Disability Discrimination Protections

  • A coalition of 18 attorneys general led by Washington D.C. Attorney General Racine filed an amicus brief in U.S. Supreme Court case CVS Pharmacy v. Doe. The brief urges the Court to uphold the existing legal standard, which allows challenges against public programs that have the effect of discriminating against those with disabilities, even without intent.

Energy

  • Michigan Attorney General Nessel announced a settlement with Michigan Gas Utilities Corporation in a rate case before the Michigan Public Service Commission. The agreement results in a rate increase about 40% lower than that requested, as well as assistance programs to benefit consumers.

 Financial Misconduct

  • New York Attorney General James announced an agreement with GTV Media Group, Inc. and its parent company, Saraca Media Group, Inc., under which the companies will pay $479.9 million to resolve allegations that they did not register as commodities brother-dealers and/or securities dealers.

 Fraud Scheme

  • New York Attorney General James announced a $3 million judgment against virtual currency trading platform Coinseed and its Chief Executive Officer. The judgment permanently bars Coinseed’s operations and creates a permanent receiver to protect investor funds.

Price Gouging

  • New Jersey Acting Attorney General Bruck issued a consumer alert warning consumers to be aware of scams following Tropical Storm Ida, including price gouging and charity scams.

Retail – Organized Retail Crime Task Force

  • Illinois Attorney General Raoul announced a public and private entity partnership aimed towards combatting the increase in organized retail crime. The partnership, called the Organized Retail Crime Task Force, is intended to increase cooperation among online marketplaces, retailers, and law enforcement agencies. Some retailers involved include CVS, Home Depot, Lowe’s, Target, Walgreens, and Walmart.

Tuesday, September 14, 2021

Consumer Protection

  • West Virginia Attorney General Morrisey announced a lawsuit against used car dealer Mr. V & Sons Pre-Owned Auto Sales, Inc. and its executives for allegedly selling unsafe vehicles, among other conduct. The lawsuit seeks civil penalties, restitution, and permanent injunctive relief.
  • A multistate coalition of attorneys general applauded the U.S. Department of Education’s decision rescinding a prior interpretation of federal law shielding student loan servicers from state oversight. The coalition’s comment letter also asks the Department to clarify when state laws that regulate student loan servicers are preempted.

Cybersecurity

  • Massachusetts Attorney General Healey announced an investigation into a T-Mobile, US, Inc. data breach that compromised over 50 million people’s personally-identifying information. Attorney General Healey’s office is investigating the breach’s circumstances, whether T-Mobile had appropriate safeguards in place, and how T-Mobile is addressing the breach.

Environmental Justice

  • A coalition of 20 attorneys general sent a letter to Congressional leadership, asking Congress to allocate funding in its reconciliation bill to programs that promote clean energy, fight pollution, and improve air and water quality. The letter notes that climate issues often disproportionately impact communities of color, low-income and immigrant communities, and Tribal and indigenous communities. The letter also asks Congress to ensure that 40% of the improvements the budget reconciliation bill funds benefit disadvantaged communities.

Wednesday, September 15, 2021

Construction Fraud Scheme

  • New York Attorney General James announced the sentencing of an individual who defrauded homebuyers, business owners, and others out of $1 million in a construction fraud scheme, which he used to his own benefit.

Consumer Protection

  • North Carolina Attorney General Stein announced that his office obtained a preliminary injunction against boat repair company Jason’s Mobile Outboard Repair and its owner, barring them from advertising or providing boat repair services or collecting consumer payments while a lawsuit related to the company’s alleged failure to perform services is occurring. The preliminary injunction also requires the defendants to provide additional information about previous financial and consumer transactions.

Thursday, September 16, 2021

Fraud Scheme

  • New York Attorney General James announced a ban against the event producer who operated African Food Festival, LLC from producing festivals and events in New York, after the producer scammed consumers who bought tickets to three food festivals by never providing food and entertainment paid for, as well as refused to pay vendors, staff, and contractors hired for the events. The court order also includes over $310,000 in restitution and penalties.

Labor and Employment

  • Massachusetts Attorney General Healey announced the issuance of three citations against recording studio Bristol Studios, Inc. and its officers for violating minimum wage laws by failing to pay its interns and failing to keep hour and wage records, as well as for failing to comply with employment laws related to providing paid sick leave. The citations total over $400,000.

OSHA – Vaccine Mandates

  • A coalition of 24 attorneys general sent a letter to President Biden threatening legal action over a proposed mandate for private sector employees to obtain a COVID-19 vaccine, submit to weekly testing, or risk termination. The attorneys general highlighted policy concerns, including the possibility of a large number of individuals leaving the workforce, particularly healthcare workers.

Friday, September 17, 2021

Cryptocurrency

  • New Jersey Acting Attorney General Bruck announced that the Bureau of Securities issued a Summary Cease and Desist Order against cryptocurrency firm Celsius Network LLC, which was selling unregistered securities to fund its operations. The press release notes that registration is important in part because it triggers certain disclosure requirements.

Environmental

  • A coalition of 15 attorneys general submitted comments to the U.S. Environmental Protect Agency (“EPA”) in support of the EPA’s proposal to include per- and polyfluoroalkyl substances, also known as PFAS, in the Contaminant Candidate List 5. Listing PFAS will be the first step in gathering data about whether these chemicals are in drinking water supplies and considering their regulation as a class in drinking water.

Fraud Scheme

  • New York Attorney General James announced a judgment against high school and post graduate basketball program AAUCONNECT and the owners of the program for defrauding consumers by selling but failing to provide training, housing, and education services; failing to provide refunds; and failing to disclose that payments were non-refundable and that significant late fees would be charged. The judgment includes a payment of almost $380,000 in restitution and penalties.

Housing

  • New York Attorney General James announced an agreement with A&E Real Estate Holdings, resolving an investigation which found that A&E failed to comply with apartment inspection, lead hazard remediation, and other requirements in New York City’s Childhood Lead Poisoning Prevention Act. The agreement includes A&E’s continued efforts to bring apartments into compliance with the Act, compliance reports, and a $510,000 payment.

Each week, Crowell & Moring’s State Attorneys General team highlights significant actions that State AGs have taken. Here are this week’s updates.

Monday, September 6, 2021

Federal Firearm Regulations

  • Michigan Attorney General Dana Nessel today joined a coalition of 18 attorneys general in filing an amicus brief supporting federal laws restricting the commercial sale of handguns to persons under the age of 21. In the brief, filed in the U.S. Court of Appeals for the 4th Circuit, the coalition argues that such restrictions protect residents from the harmful effects of gun violence, as well as promote the safe use of firearms.

 Religious Charity’s Liberty to Hire

  • Attorney General Alan Wilson has joined a coalition of 17 states in filing a brief Thursday before the U.S. Supreme Court in support of the religious liberty of Seattle’s Union Gospel Mission. The Mission is seeking Supreme Court review of a recent ruling by the Washington State Supreme Court denying the faith-based charity’s right to hire employees who share its faith. The attorneys general argue that the Washington Supreme Court disregarded history and precedent to deny the right of a religious nonprofit to hire only employees who share its faith. And this decision is merely the latest warning that previously uncontested religious liberties are at risk of being eroded by a growing wave of religious intolerance.

 Tuesday, September 7, 2021

Consumer Financial Protection Bureau

  • The Consumer Financial Protection Bureau announced an enforcement order against income share agreement provider Better Future Forward, Inc. for falsely representing that income share agreements are not loans, failing to provide legally required disclosures, and violating a prepayment penalty prohibition covering private education loans. The order requires the company to reform its business practices but does not impose a financial penalty due to substantial cooperation and good faith.
  • Consumer Financial Protection Bureau (“CFPB”) Acting Director Uejio issued a statement applauding the U.S. District Court for the Western District of Texas’ decision upholding the payment provisions in the CFPB’s 2017 rule on payday, vehicle title, and high-cost installment loans. The court’s order provides that compliance with the rule will be mandatory beginning on June 13, 2022.

Consumer Protection

  • Massachusetts Attorney General Healey announced that under an assurance of discontinuance debt collection company Transworld Systems, Inc. agreed to pay $2.25 million and significantly change its business practices. The settlement resolves allegations that the company violated debt collection law by making high volume calls, attempting to collect on time-barred debts, and using false and misleading affidavits to collect private student loan debt.

Fair Chance in Housing Act

  • New Jersey Acting Attorney General Bruck announced that the New Jersey Division on Civil Rights proposed new rules to increase housing opportunities for those with criminal records. The rules will implement the Fair Chance in Housing Act which prohibits landlords from asking housing applicants about criminal history in most circumstances, as well as from running criminal background checks on applicants prior to making a conditional offer of housing. Landlords must also satisfy additional requirements before they reject applicants based on criminal history.

Healthcare – Interim Final Rule

  • California Attorney General Bonta sent a comment letter to the U.S. Department of Health and Human Services, the U.S. Department of Labor, and the U.S. Department of the Treasury applauding the federal government’s Interim Final Rule which will extend protections from surprise medical bills to those who receive health coverage through employer self-funded plans and those who live in states with no protections. Attorney General Bonta also offered suggestions for strengthening the Rule, such as by broadening the definition of “urgent care center.”

Wednesday, September 8, 2021

Consumer Financial Protection Bureau

  • The Consumer Financial Protection Bureau filed a lawsuit accusing LendUp Loans, LLC of violating a 2016 consent order by continuing with deceptive marketing about repeat borrowing and of failing to provide timely and accurate notices to those whose loan applications were denied. The lawsuit is seeking injunctive relief, damages or restitution, disgorgement, and civil penalties.

Deceptive Claims

  • Washington Attorney General Ferguson announced that debt collection agency Convergent must pay over $1.6 million as part of a settlement. The settlement resolves allegations that the company sent misleading “settlement offer” letters that deceptively suggested there was a possibility of litigation to recover debts that were actually past the statute of limitations and not recoverable.

National Association of Attorneys General 2021 Robocall Virtual Summit

  • Ohio Attorney General Yost and Michigan Attorney General Nessel co-hosted the National Association of Attorneys General 2021 Robocall Virtual Summit. The summit’s goals include highlighting and coordinating enforcement actions against robocalls, establishing links to share information, lobbying for legislation, and sharing best practices.

Price Gouging

  • California Attorney General Bonta announced that California’s price gouging law is in effect in Lake County after a state of emergency was declared for the Cache Fire.

Thursday, September 9, 2021

 Consumer Protection

  • Virginia Attorney General Herring announced that the State Corporation Commission adopted regulations implementing the “bill of rights” for Virginia student borrowers, specifically noting the influence of Attorney General Herring’s supportive comments. Under the new laws, the Virginia Attorney General’s Office will have the ability to investigate and take action against misconduct claims about student loan servicers.

Environmental – Anti-Idling Law

  • Massachusetts Attorney General Healey announced a settlement with school bus company Tremblay’s Bus Co., LLC, resolving allegations that the company violated the state and federal Clean Air Act, state air regulations, and school grounds idling regulations by allowing its buses to idle unnecessarily on school grounds. The agreement includes a civil penalty of up to $120,000, a $45,000 payment to the Attorney General’s Office, and injunctive relief, including the posting of “no excessive idling” signs.

Fraud Schemes

  • Minnesota Attorney General Ellison announced that his office obtained a $954,966 judgment against company Contributing 2 Combatants/Coast 2 Coast Marketing and its owner for violating consumer protection and charitable solicitation laws. The company allegedly went door to door misrepresenting that it was a nonprofit seeking donations for care packages to send to servicemembers, but then spent the funds on the owner’s personal use. In addition to the monetary provision, the judgment prevents the company from doing business in the state and bars the owner from any involvement in the state’s nonprofit sector.

Labor and Employment 

  • New York Attorney General James announced an agreement with Old Republic National Title Insurance Company, ending its use of no-poach agreements. The settlement requires the company to pay $1 million, terminate any current no-poach agreements, and cooperate with ongoing investigations in this realm. The press release also states that it is intended to put businesses on notice that New York will not tolerate no-poach agreements.

Friday, September 10, 2021

Consumer Protection

  • Colorado Attorney General Weiser announced that subprime auto financing company Santander Consumer USA, Inc. will provide the state with $3.065 million in debt relief. The settlement resolves allegations that the company’s subprime lending practices violated consumer protection law by placing consumers into loans with a high probability of default and exposing them to unnecessary risk. Among other things, the settlement includes the cancellation of debt, repurchasing loans from third parties, credit repair, and not requiring consumers to make payments through methods that require third-party fees.

Healthcare – Hospital Pricing Transparency

  • North Carolina Attorney General Stein announced his appreciation for North Carolina hospitals’ work towards compliance with price transparency regulations. He also announced follow-up letters sent to hospital administrators asking for updates on their work towards compliance.

Telephone Consumer Protection Act

  • North Carolina Attorney General Stein applauded a Sixth Circuit ruling inLindenbaum v. Realgy upholding the Telephone Consumer Protection Act’s robocall ban. The ruling reverses a district court ruling holding that because part of the Act was held invalid, the rest of the Act is invalid as well. After the Sixth Circuit ruling, state attorneys general are able to continue to pursue enforcement actions under the Act.

Each week, Crowell & Moring’s State Attorneys General team highlights significant actions that State AGs have taken. Here are this week’s updates.

Monday, August 30, 2021

Healthcare Insurance

  • Connecticut Attorney General Tong announced the submission of comments to the Connecticut Insurance Department seeking the highest scrutiny for 11 health insurers’ rate increase requests. The comments express concern about COVID-19 related hardships for individuals and small businesses, as well as overvalued rates from a drop-in healthcare spending.

Tuesday, August 31, 2021

Consumer Protection

  • Massachusetts Attorney General Healey announced a $1 million consent judgment against debt settlement company DMB Financial, LLC, resolving allegations that the company charged premature and inflated fees, enrolled individuals unable to benefit from the company’s program, and failed to disclose harms from the program. In connection with the settlement, Attorney General Healey stated, “This settlement is first-of-its-kind against a debt settlement company in Massachusetts and its terms will lay out a roadmap for addressing misconduct in this industry going forward.” The settlement also includes injunctive relief.

Criminal Fraud – False Representations for a Government Contract

  • Acting New Jersey Attorney General Bruck announced that the owners of school bus company F&A Transportation, Inc. were indicted for allegedly providing false information to cover up the hiring of unqualified drivers, failure to conduct drug testing and background checks, and operation of unsafe buses. The Attorney General’s Office is arguing that all of this conduct violated state law and government contract terms.

Medicaid Fraud

  • North Carolina Attorney General Stein announced the sentencing of the owner of company A Perfect Fit for You, Inc. for making false statements to the Medicaid program related to the sale of durable medical equipment. The owner and company must jointly pay $374,809.92 in restitution, and the owner must pay $34,708,945.42 in a related civil judgment.

Price Gouging

  • Virginia Attorney General Herring announced that Virginia’s price gouging laws are in effect due to the state of emergency declared in preparation for Hurricane Ida. The law prohibits suppliers from charging unconscionable prices for necessary goods and services for the 30-day period following a state of emergency declaration.

Wednesday, September 1, 2021

Fraud Scheme

  • New York Attorney General James announced the indictment and arrest of 10 individuals and corporations for a $15 million bid-rigging scheme. The scheme involved false and inflated bids being submitted to the New York state Office of Victim Services and the New York City Human Resources Administration for moving and storage services intended to aid public benefits recipients, crime victims, and domestic violence survivors.

Labor and Employment

  • Washington D.C. Attorney General Racine announced the hosting of a roundtable discussion ahead of Labor Day with advocates and employees to discuss employee rights to wages and fair treatment. Some of the employees present included area construction workers and a DoorDash driver.

Online Charitable Fundraising – AB 488

  • California Attorney General Bonta announced that the state Senate approved Assembly Bill 488, which was sponsored by Attorney General Bonta. The bill, if passed, will ensure oversight by the California Department of Justice over charitable fundraising on the internet by, among other things, requiring online platform entities to register and report to the Attorney General’s Registry of Charitable Trusts.

Thursday, September 2, 2021

Immigration

  • Attorney General Chris Carr joined a coalition of 16 states to stop the Biden Administration’s so-called “Interim Guidance.”  According to a press release from AG Carr’s office, the “Interim Guidance” drastically and intentionally curtails enforcement of immigration laws and dramatically halts nearly all deportations and immigration-related arrests, including for those convicted of dangerous aggravated felonies.

Labor and Employment – Gig Economy

  • Massachusetts Attorney General Maura Healey gave a coalition of app-based service providers like Uber and Lyft the go-ahead to start collecting signatures needed to put a proposed ballot measure before voters that would define drivers as independent contractors rather than employees.

Online Charitable Fundraising – AB 488

  • On Wednesday, Sept. 1, the California State Senate approved Assembly Bill 488 (AB 488), a bill authored by Assembly member Jacqui Irwin and sponsored by Attorney General Rob Bonta. AB 488 will ensure critical oversight by the California Department of Justice over charitable fundraising that occurs on internet platforms.

Friday, September 3, 2021

First Step Act – Sentencing Reform

Attorney General Kwame Raoul, as part of a bipartisan coalition of 25 attorneys general, urged Congress to amend the First Step Act and extend critical resentencing reforms to individuals convicted of the lowest-level crack cocaine offenses. The coalition, which sent a letter last week to Congress, is calling on legislators to take this needed step in the wake of the U.S. Supreme Court’s recent decision in Terry v. United States, which held that certain mid-level and high-level crack cocaine offenders could seek resentencing under the law, but low-level offenders were not eligible.

Each week, Crowell & Moring’s State Attorneys General team highlights significant actions that State AGs have taken. Here are this week’s updates.

Monday, August 23, 2021

Medicaid Fraud

  • Arkansas Attorney General Rutledge announced a lawsuit against Conway Eye Care/Todd Eye Clinic and associated individuals for allegedly fraudulently billing the state Medicaid program by falsifying documents. The lawsuit seeks over $800,000 in restitution in addition to civil penalties.

Price Gouging

  • New York Attorney General James warned consumers and business to be on the lookout for price gouging of goods and services during the state of emergency declared for Hurricane Henri.

 Tuesday, August 24, 2021

Consumer Protection

  • Virginia Attorney General Herring announced a consent judgment against ANE Investments, LLC and its Managing Member for alleged violations of state consumer finance statutes. For example, the lawsuit alleged that the company made loans to distressed homeowners, as well as charged interest exceeding an annual rate of 12% without being licensed or exempt from Virginia usury laws. The consent judgment includes restitution, $11,000 in fees and costs, and injunctive relief.

Cybersecurity

  • After a series of unreported ransomware attacks, California Attorney General Bonta issued a warning reminding healthcare facilities and providers of their obligation to comply with health data privacy laws by notifying the California Department of Justice upon the breach of the health data of more than 500 California residents. The warning also asked healthcare entities to better protect data through, for example, virus protection software, security patches, user restrictions, and training.

Preventing Youth Vaping Act / Senate Bill 512

  • Illinois Attorney General Raoul applauded Governor Pritzker’s signing of the Preventing Youth Vaping Act into law. The legislation, which goes into effect on January 1, 2022, prohibits companies from advertising electronic cigarettes to minors, as well as from disseminating misleading advertising. It also gives the attorney general’s office and law enforcement agencies civil and criminal authority to punish violators.

Wednesday, August 25, 2021

Cannabis

  • Colorado Attorney General Weiser sent a letter to U.S. congressional leaders asking them to include states when they design a federal regulatory system for cannabis and to rely on states’ expertise. According to the press release, Attorney General Weiser believes that “[a] regulatory model that applies appropriate federal health and safety standards to protect consumers engaged in interstate commerce, while preserving the states’ role in the regulation and control of distribution outlets, will provide the strongest possible protections against known and unknown risks associated with legalization.”

Climate Change – State Law Violations

  • A coalition of 17 attorneys general filed an amicus brief in support of Minnesota in Minnesota v. American Petroleum Institute, in which Minnesota Attorney General Ellison is arguing that fossil fuel producing companies, such as American Petroleum Institute, Exxon, and Koch Industries misrepresented the harms of fossil fuel use and contributed to climate change. The coalition is arguing that the right to remove cases is interpreted narrowly, so a District Court order should be affirmed finding that the lawsuit should remain in state court. American Petroleum Institute and others are addressing the matter in response to the coalition.

Fair Housing

  • A coalition of 23 attorneys general co-led by North Carolina Attorney General Stein, Washington D.C. Attorney General Racine, New York Attorney General James, and Washington Attorney General Ferguson sent a letter to the U.S. Department of Housing and Urban Development asking it to reinstate a rule covering disparate impact liability in order to protect people from housing discrimination. The coalition is arguing that the rule aligns better with judicial precedent and the Fair Housing Act than the currently existing rule.

Human Trafficking Awareness

  • Kentucky Attorney General Cameron announced a partnership with Kentucky Venues to raise awareness about human trafficking during large events, such as the Kentucky State Fair. The program includes employee training and awareness posters.

Medicaid Fraud

  • California Attorney General Bonta announced a $3.31 million settlement against home respiratory services company SuperCare Health Inc. for allegedly knowingly overbilling Medicare and Medi-Cal for servicing ventilators that had become medically unnecessary because they were no longer being used.

Thursday, August 26, 2021

Consumer Protection – House Bill 2746

  • Illinois Attorney General Raoul applauded Governor Pritzker’s signing of House Bill 2746, or the “Know Before You Owe” measure. The legislation is intended to protect student borrowers by giving them information that will help them avoid private loans with fewer protections and less flexible repayment opportunities.

Healthcare – Illegal Non-Competes

  • Washington Attorney General Ferguson announced that under a consent decree Bellingham Anesthesia Associates is required to pay $110,000 in costs and fees for the alleged use of non-compete clauses and exclusive contracts with medical providers covering about 90% of the market share for physician-administered anesthesia services in two counties. The consent decree also requires the company to stop requiring physicians to sign three-year non-compete agreements.

Price Gouging

  • North Carolina Attorney General Stein announced a lawsuit against Mansa Travel Center Charlotte LLC, which also does business as Queen’s Market, for allegedly engaging in price gouging during the Colonial Pipeline shutdown and state of emergency. The gas station allegedly increased its prices between 19% and 278% from pre-shutdown prices though it did not incur cost increases. The lawsuit seeks restitution, civil penalties, and attorneys’ fees.

Friday, August 27, 2021

Bankruptcy Court

  • Vermont Attorney General Donovan filed a brief to appear in bankruptcy court to support Koffee Kup Bakery. The state is arguing that paid time off should not be considered as part of the bankruptcy case and should instead be paid to former employees now.

Consumer Protection

  • Indiana Attorney General Rokita is warning consumers, particularly current or former employees or patients, of the recent data breach of Eskenazi Health. The consumer alert also includes tips for consumers to protect their data.

Healthcare – Anti-Competitive Practices

  • California Attorney General Bonta announced that California’s $575 million settlement with Sutter Healthreceived final approval. The 2019 settlement, which resolves allegations of anticompetitive practices leading to higher healthcare costs, includes both the payment provision and injunctive relief. For questions about the claim or the settlement, please contact Michael Yaghi at myaghi@crowell.com.

Public Accommodations Law – Anti-Discrimination

  • Massachusetts Attorney General Healey announced a settlement with the former owner and manager of clothing and shoe store The Tannery, resolving allegations that the owner discriminated against shoppers because of their race, national origin, and immigration status. The settlement includes a payment of up to $220,000 and permanently bans the owner from operating a retail business in the state.
  • A coalition of 20 attorneys general led by Massachusetts Attorney General Healey filed an amicus brief in Fourth Circuit case Updegrove v. Herring in support of Virginia’s anti-discrimination law. The coalition is arguing that the law does not violate the First Amendment because the Amendment does not protect discriminatory conduct.

Each week, Crowell & Moring’s State Attorneys General team highlights significant actions that State AGs have taken. Here are this week’s updates.

Monday, August 16, 2021

Airlines

  • Colorado Attorney General Weiser sent a letter announcing his support for the U.S. Department of Transportation’s (“USDOT”) airline refund proposal and its attempt to simplify the refund process. However, Attorney General Weiser also recommended that the USDOT specify in which circumstances airlines must issue refunds and that it require an accessible process for obtaining refunds. For example, Attorney General Weiser’s letter asks the USDOT to specify when carriers are not required to issue refunds for baggage delivery delays.

Criminal Fraud

  • Missouri Attorney General Schmitt announced that the owner of landscaping business Four Seasons Lawn & Landscape was sentenced for felony charges of defrauding consumers after the business did not deliver promised landscaping services after taking advance payments. The owner also paid $62,265 in restitution as part of his sentence.

 Tuesday, August 17, 2021

Consumer Financial Protection Bureau

  • The Consumer Financial Protection Bureau (“CFPB”) filed a proposed settlement against debt collection enterprise Fair Collections & Outsourcing and its owner for allegedly violating federal debt collection law by failing to establish reasonable policies and procedures covering the accuracy of information furnished to credit reporting agencies and by neglecting to conduct reasonable investigations of indirect consumer disputes. The CFPB also alleged that the company and its owner acted illegally by representing that consumers owed debts when they did not have a reasonable basis to make this assertion. The settlement would require the company and owner to pay a $850,000 civil penalty and put in place certain measures to prevent future violations.

Consumer Protection

  • Arkansas Attorney General Rutledge announced a lawsuit against Ethos Custom Brands AR, LLC and several of its executives for allegedly violating the Arkansas Deceptive Trade Practices Act by marketing and selling custom leather goods that it ultimately failed to deliver. The lawsuit is seeking restitution, civil penalties, injunctive relief, and a jury trial.

Healthcare Fraud – Federal Trade Commission and GA Attorney General

  • Georgia Attorney General Carr and the Federal Trade Commission filed a joint enforcement action against Superior Healthcare, LLC, Regenerative Medicine Institute of America, LLC d/b/a Stem Cell Institute of America, LLC, Physicians Business Solutions, LLC, and two individuals for allegedly violating the Georgia Fair Business Practices Act and the FTC Act by making false and misleading claims about regenerative medicine products. For example, the defendants allegedly claimed that their products could cure, treat, or help with a variety of diseases without having competent and reliable scientific evidence to support these claims. Attorney General Carr’s office is seeking injunctive relief, restitution, disgorgement, and civil penalties of up to $5,000 or $10,000 per violation depending on if the violation was committed against elderly and/or disabled consumers.

Medicaid Fraud

  • California Attorney General Bonta announced a $75 million nationwide settlement with pharmaceutical company Bristol Myers Squibb, resolving allegations that the company underpaid drug rebates owed to state Medicaid programs, including Medi-Cal. Bristol Myers was accused of overcharging states by decreasing the rebate it had to pay to ensure competitive prices for pharmaceuticals.

Public Safety

  • Washington D.C. Attorney General Racine announced two nuisance lawsuits against gas station and grocery store owners in Ward 8 and a settlement with gas station owners in Ward 5 for failing to address security issues, such as drug activity and gun violence. Specifically, the actions alleged that the business owners failed to make security improvements after violent incidents. The lawsuits seek improved security practices and damages, and the settlement resulted in an agreement to implement new security measures.

Wednesday, August 18, 2021

 Consumer Protection

  • Minnesota Attorney General Ellison announced an assurance of discontinuance with bridal stores Posh Bridal Couture and Elizabeth Bridal for allegedly delivering dresses late and falsely representing the reasons for the delays. Under the settlement the stores have agreed to make business changes and pay $50,000.

Deceptive Claims

  • Michigan Attorney General Nessel announced that her office entered into an assurance of voluntary compliance with Skin Envy, LLC after its owner allegedly made misleading claims on a television show about a product’s ability to prevent COVID-19. Under the settlement, the company has agreed to publicly retract the claim on Instagram, add language on its website warning of side effects, and pay $4,000 for investigative costs.

Environmental

  • California Attorney General Bonta applauded the U.S. Environmental Protection Agency’s new rule which ends the use of the pesticide chlorpyrifos in agricultural production after finding that there is no safe level of it in foods. The rule goes into effect in six months.

Fraud Schemes

  • Virginia Attorney General Herring announced a lawsuit against landlords JumpStart University and Vasilios Education Center and their operator for allegedly defrauding tenants by promising wraparound services they failed to provide, evicting tenants aggressively based on inaccurate billing and payment records, and using illegal leases.

Price Gouging

  • California Attorney General Bonta issued a consumer alert warning that the state price gouging law is in effect following a declaration of emergency for El Dorado County due to a wildfire.

U.S. Food and Drug Administration 

  • A bipartisan coalition of 31 states led by the attorneys general of Illinois, Idaho, Nebraska, New York, North Carolina, and Tennessee is asking the U.S. Food and Drug Administration (“FDA”) to support restrictions on tobacco and nicotine products that disproportionately harm young people. For example, the coalition is asking the FDA to eliminate flavors that appeal to youth, limit nicotine levels, and restrict marketing for this type of product.

Thursday, August 19, 2021

Labor and Employment

  • Massachusetts Attorney General Healey announced that cannoli factory Golden Cannoli Shells Co., Inc. and two of its principals agreed to pay $105,000 in restitution and penalties for alleged violations surrounding wage theft, not providing proper notice of earned sick leave, retaliation, and failing to produce proper records. In addition to the monetary provision, the settlement includes an agreement to abide by applicable employment laws and submit records for a year.

Medicaid Fraud 

  • North Carolina Attorney General Stein announced that an individual was sentenced for conspiracy to commit health care fraud for submitting false and fraudulent claims for the reimbursement of behavioral health services. The sentencing also includes a payment of almost $2 million in restitution.

Price Gouging

  • North Carolina Attorney General Stein announced that North Carolina’s price gouging law is in effect statewide along with a state of emergency for flooding and heavy rains affecting the western area of the state.

 Friday, August 20, 2021

Cybersecurity

  • Michigan Attorney General Nessel reissued a consumer alert about data breaches after T-Mobile confirmed that it suffered such a breach affecting over 50 million customers in the United States. The alert suggests potential ways to respond to a data breach, including obtaining a free credit report, placing a fraud alert or security freeze on an individual’s credit file, using two-factor authentication, and monitoring credit.

Fraud Scheme

  • New York Attorney General James announced the indictment of the owner of LCM Livery P/U, Inc. for allegedly scamming individuals through a fake housing assistance program which obtained personal information and then used it to submit false claims for custom back braces. The individual is accused of stealing over $4 million through the scheme.

Intellectual Property – Patent Trolls

  • North Carolina Attorney General Stein applauded a decision in Napco v. Landmark upholding the NC Abusive Patents Assertions Act, a law that is geared towards curbing patent troll practices. Attorney General Stein had previously filed an amicus brief in the case in support of the law.

Medicaid Fraud

  • California Attorney General Bonta announced the sentencing of the owner of Quality Care Pharmacy for defrauding the state Medicare and Medi-Cal programs through fraudulent over-billing of more than $1.8 million in drug purchases.

Tax Evasion Scheme

  • California Attorney General Bonta announced that the former owner of several restaurants based in Los Angeles and her brother pleaded guilty to filing a false sales tax return and conspiracy to do so. The former owner also pleaded guilty to filing a false income tax return. The individuals have paid the full over $2 million owed in restitution, which includes the tax owed plus interest and investigation costs.

Each week, Crowell & Moring’s State Attorneys General team highlights significant actions that State AGs have taken. Here are this week’s updates.

Monday, August 9, 2021

Consumer Fraud Act

  • New Jersey Acting Attorney General Bruck announced that the Supreme Court of New Jersey issued an order requiring firearms manufacturer Smith & Wesson, Corp. to comply with an October 2020 investigative subpoena as part of an investigation into purported Consumer Fraud Act violations related to the advertising of firearms to consumers in New Jersey.

Federal Communications Commission

  • A bipartisan coalition of 51 attorneys general, co-led by Arkansas Attorney General Rutledge, North Carolina Attorney General Stein, and Pennsylvania Attorney General Shapiro, sent a letter to the Federal Communications Commission (“FCC”) urging the FCC to accelerate the deadline for smaller telephone companies to implement STIR/SHAKEN caller ID technology under the TRACED Act. Currently, smaller telephone companies have until June 2023 to implement this technology, while larger companies were required to put it in place by June 2021. The attorneys general are asking for the smaller company deadline to be moved to June 30, 2022.

Tuesday, August 10, 2021

Deceptive Claims

  • Florida Attorney General Moody announced a lawsuit against Wellness Program Services, LLC, which does business as Trusii, for alleged false claims that its drinking water systems may help against conditions, such as cancer, diabetes, and depression, as well as for allegedly using deceptive offers of a case study compensation system to help with payments. The lawsuit also includes allegations of other deceptive advertising about the concentration of hydrogen water content in the machines and violations of the warranty and refund policies. The lawsuit seeks restitution, civil penalties, a permanent injunction, and fees and costs.

Wednesday, August 11, 2021

Elder Abuse and Fraud / Door-to-Door Sales

  • Florida Attorney General Moody announced a consent judgment against home-health service provider Senior America Home Care, Inc. for soliciting senior citizens through door-to-door sales for services that it failed to deliver. The judgment includes a $2.5 million restitution payment, $1.9 million of which is suspended for inability to pay, and permanently bars the defendants from in-home sales and ownership of home-health businesses.

Labor and Employment

  • A coalition of 17 attorneys general is asking the U.S. Senate to pass the Protecting the Right to Organize Act of 2021 (“PRO Act”), which offers protections for workers attempting to organize by modernizing and strengthening the National Labor Relations Act. Among other things, the PRO Act would allow the National Labor Relations Board to fine companies that retaliate against organizing employees and would lower the standard for independent contractors to demonstrate that they are employees.
  • Vermont Attorney General Donovan announced that Vermont’s Employee Misclassification Task Force will hold two public hearings about employee misclassification on August 26 and 27, 2021. Potential recommendations the task force is considering include legislative changes related to joint enforcement, a private right of action related to employee misclassification, and a private attorneys general act related to employee misclassification.

Medicaid Fraud

  • Connecticut Attorney General Tong announced a $350,000 settlement with Cornell Scott Hill Health Corporation, resolving allegations that it overbilled the Connecticut Medicaid program for dental services. Specifically, the health center allegedly required patients to receive dental cleanings and exams on separate days, resulting in a double Medicaid payment. The settlement also includes a requirement that the center allow patients to schedule dental cleanings and exams for the same visit.

Predatory Practices

  • Maryland Attorney General Frosh announced that the Circuit Court for Allegany County affirmed his office’s final order against Cash-N-Go, Inc. and its executive and related businesses for making predatory and unlicensed consumer loans at excessive interest rates. The final order includes a $2.2 million restitution payment and a $1,200,750 penalty.

Thursday, August 12, 2021

Fair Debt Collection Practices Act

  • Georgia Attorney General Carr announced a $19.8 million settlement with debt collector Turtle Creek Assets, Ltd. and its owner, resolving allegations that the company violated the federal Fair Debt Collection Practices Act and the Georgia Fair Business Practices Act. According to the lawsuit, the business threatened consumers with arrest or imprisonment if they did not pay debts, failed to provide written notices within five days of the initial communication, and failed to disclose that its employees were debt collectors. The settlement requires the company to cease collections on all Georgia consumer accounts, comply with injunctive provisions, and pay $41,500 in penalties and fees.
  • Massachusetts Attorney General Healey announced a $1.6 million settlement with online loan servicer Avant over allegations that the company engaged in abusive debt collection practices against consumers by failing to provide proper debt validation notices and making unlawful and high-volume debt collection calls. In addition to the payment, the settlement includes injunctive relief requiring the company to comply with debt collection laws and regulations.

Financial Misconduct – Illegal Bookmaking

  • California Attorney General Bonta announced a settlement with Lucky Lady Card Room, resolving 2016 allegations of illegal bookmaking operations. The settlement revokes the owner’s gambling license and requires payments of $125,000 in penalties and $50,000 for investigative costs.

Labor and Employment

  • California Attorney General Bonta filed an amicus brief in San Diego County Lodging Association v. San Diego, seeking to justify San Diego’s “right to return” ordinance, which requires certain employers to give workers who were laid off due to COVID-19 the first chance to get re-hired for re-opened positions.

Friday, August 13, 2021

Fraud Schemes

  • New York Attorney General James issued a warning about a common text and email scam in which scam artists pretend to be an employee’s boss and ask for gift cards for a supposed work emergency.

Labor and Employment

  • New Jersey Acting Attorney General Bruck announced that private transportation company Academy Lines LLC must pay a former bus driver $40,000 and arrange anti-discrimination employee training in response to allegations that the company wrongly fired the former employee for taking intermittent leave to care for his seriously ill family member.

Medicaid Fraud

  • Connecticut Attorney General Tong announced a $678,901 state and federal settlement with vision care service provider A. Vision and an optician, resolving allegations that the company overbilled the Connecticut Medicaid program for vision care and eyeglasses. Specifically, the company allegedly billed for “miscellaneous” services and items that were not medically necessary and did not bill for these items at their acquisition cost, as well as billed for extra pairs of children’s eyeglasses. The agreement also includes injunctive relief, such as a mandatory training program and audits.

Price Gouging

  • Virginia Attorney General Herring announced a lawsuit against Tahir and Sons LLC d/b/a Interstate Fuel LLC for allegedly violating Virginia’s price gouging law by charging unconscionable prices for gasoline after the state of emergency in response to the Colonial Pipeline shutdown. The lawsuit, which requests injunctive relief and restitution, among other remedies, alleges that the business increased its prices by as much as 33.4% above its pre-emergency prices and that the price increases were not attributable to additional costs.
  • Florida Attorney General Moody announced that Florida’s price gouging law and hotline have been activated in many counties in preparation for Tropical Depression Fred. According to the press release, “During a storm-related declared state of emergency, state law prohibits excessive increases in the price of essential commodities, such as food, water, hotel rooms, ice, gasoline, lumber and equipment, needed as a direct result of the event.”