At the end of 2021, the California Statewide Commission on Recycling Markets and Curbside Recycling (the “Commission”) sent a letter to The California Department of Resources Recycling and Recovery, also known as CalRecycle, and California Attorney General Rob Bonta, asking them to investigate illegal labeling of plastic bags as recyclable by retailers.

The Commission is alleging that businesses in the state are falsely implying that their bags are capable of being recycled through curbside collection with the “chasing arrows” logo and words such as “recyclable” and “recycle.” The Commission believes this labeling is impeding the curbside recycling process.

California’s 2016 Proposition 67 created a prohibition against single-use shopping bags. Since then, an exception in the law has allowed businesses to sell reusable plastic bags for at least 10 cents apiece, as long as these bags are capable of being recycled in the state. However, the Commission is arguing that the bags being used by certain retailers are not capable of being recycled through existing recycling programs in California. Instead, the Commission believes that recycling labels on plastic bags are causing consumers to place these bags in curbside recycling for collection. This mistake is creating difficulty for curbside collection programs that in reality do not accept plastic bags, due to the high cost of turning them into a new product. Employees of these collection programs must then spend additional time separating plastic bags from other materials and fixing equipment the bags have damaged.

The Commission is requesting enforcement so that businesses are no longer able to put purportedly misleading recyclability labeling on plastic bags. The Commission has also alleged that some sellers are deceptively stating that shopping bags and other plastics may be returned to participating locations in order to be recycled. According to the Commission, there is no evidence stores are actually recycling plastic bags. The Commission has also noted as part of the problem the presence of non-recyclable trash in the stores’ on-site recycling bins. On the other hand, the plastics industry believes disallowing this labeling will cause increased environmental harm because it will result in more plastic ending up in landfills.

Retailers should be prepared for the Commission’s letter to increase their risk of litigation as well as to potentially trigger a state attorney general investigation, either in connection with or independent of other state regulators. For example, businesses may be required to provide regulators with competent evidence supporting that their bags are truly acceptable by a state recycling program or that the recycling services they promote actually recycle the bags received. Otherwise, they may be mandated to stop selling these bags and other plastics or change the manufacturing so that they are truly recyclable. Notably, the California Attorney General has a very robust enforcement history tied directly to improper disposal of environmentally sensitive waste products.

Retailers’ liability risk is compounded by the fact that California Governor Newsom recently signed into law a new piece of environmental legislation, which requires truthful labeling on all packaging and products sold in the state. Once the legislation becomes effective beginning as early as January 2024, labeling a bag (or any other product) as “recyclable” that is not in reality possible to recycle in California would be expressly prohibited.

Crowell & Moring LLP’s State Attorney General Practice has extensive experience working with regulators to expeditiously and favorably resolve investigations. We will continue to monitor developments in this area.

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

Multistate

  • Several attorneys general applauded the Biden administration’s plan to expand competition in the meat processing industry. The presidential administration recently announced initiatives to increase competition, including stronger Packers and Stockyards Act rules, better coordination with the Department of Justice, and dedicating $1 billion from the American Rescue Plan Act to improve independent meat processing capacity. This announcement follows a letter sent by a coalition of 16 state attorneys general to U.S. Department of Agriculture Secretary Vilsack seeking increased competition in this industry.

Arizona

  • Arizona Attorney General Brnovich announced that two software manufacturers, CDK and Reynolds and Reynolds, who had challenged the state’s consumer protection law protecting data that car dealerships obtain and keep, voluntarily dismissed their lawsuits with prejudice. A Ninth Circuit ruling recently upheld the law, which places data under the control of the dealerships instead of software companies, after a challenge based on federal and constitutional law.

Arkansas

  • Arkansas Attorney General Rutledge announced a nearly $8 million civil false claims settlement with Empower Healthcare Solutions, LLC. The settlement resolves an investigation into how the company reported its expenses in 2020.

California

  • California Attorney General Bonta filed a petition for rehearing en bancbefore the Ninth Circuit in its lawsuit challenging the Eastgate Air Cargo facility airport expansion project in San Bernardino. Attorney General Bonta is arguing that the Federal Aviation Administration’s approval of the project, which would increase toxic air pollution in low-income communities and communities of color, conflicts with the law.

Massachusetts

  • Massachusetts Attorney General Healey announced that addiction treatment center chain Total Wellness Centers, LLC, CleanSlate Centers, Inc., and CleanSlate Centers, LLC and its owner agreed to pay $4.5 million to MassHealth. The settlement resolves allegations that CleanSlate submitted false claims for urine drug tests illegally performed at the company’s laboratory and that were medically unnecessary. This settlement is the first civil settlement under Massachusetts’ 2014 law against clinical laboratory self-referral.
  • Massachusetts Attorney General Healey issued a press release reminding employers and workers that the Massachusetts minimum wage increased to $14.25 per hour on January 1, 2022. The announcement also states that employers must display a wage and hour poster in both English and any other language that is spoken by five percent or more of the employer’s workforce. The poster is accessible via the Attorney General’s Office.

New York

  • New York Attorney General James announced a $6 million consent order against precious metals seller Lear Capital, Inc., resolving Attorney General James’ June 2021 lawsuit alleging that the company failed to disclose commissions it charged consumers. The consent order also requires the company to change its business practices, such as by providing clear and conspicuous fee disclosures and a 24-hour cancellation period for retirement and particular high fee transactions.
  • New York Attorney General James announced that her office cancelled over $200,000 in housing debt and obtained $65,000 in restitution from private student housing provider Monarch 716. An investigation found that the provider violated tenants’ rights by deceiving students into signing leases, denying them access to housing, and referring them to debt collectors.

Rhode Island

  • Rhode Island Attorney General Neronha announced he would open an investigation into a data breach against the Rhode Island Public Transit Authority. The agency has been questioned, including by the ACLU of Rhode Island, as to why personal information of those with no connection to the agency was involved in the breach.

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

Multistate

  • A coalition of 15 attorneys general sent a letter to the U.S. Senate asking it to pass the Pregnant Workers Fairness Act. The Act would secure pregnant individuals’ rights to be given reasonable accommodations at work without penalty. The coalition believes that existing federal law does not go far enough towards protecting these rights in the workplace.

Connecticut

  • Connecticut Attorney General Tong announced a $739,759 settlement with Manchester Pediatric Associates, LLC and its owner. The settlement resolves allegations that the company submitted fraudulent and false claims for services that were not performed, resulting in overbilling the state Medicaid program.

Florida

  • Florida Attorney General Moody issued a press release warning consumers about robotexts, saying they are now more prevalent than robocalls and that Florida is one of the states that receives the most spam text messages in the United States.

Georgia

  • Georgia Attorney General Carr issued a press release warning consumers about COVID-19 testing scams and price gouging of COVID-19 tests. The press release also encourages consumers to report overcharging for COVID-19 tests.

Illinois

  • Illinois Attorney General Raoul announced a consent decree with electronic cigarette manufacturer Juice Man, LLC, resolving allegations that the company created and advertised products that would appeal to minors. The consent decree bars Juice Man from selling electronic cigarettes in Illinois and requires it to act if it discovers its products are available in the state.

Kentucky

  • Kentucky Attorney General Cameron announced the creation of an emergency contractor registration program after recent severe weather. The program is intended to eliminate the activity of contractors seeking to take advantage of consumers, and it requires those who want to do business in the state to register and display a placard.

Massachusetts

  • Massachusetts Attorney General Healey issued a press release warning businesses and organizations in the state, especially those who own or operate critical infrastructure, to be particularly vigilant against cyberattacks and to review data security practices currently in place.

Michigan

  • Michigan Attorney General Nessel announced that her intervention in a rate case resulted in an 88% reduction in a Michigan Public Service Commission rate increase request from Consumers Energy. The original request sought a $225 million increase.

Minnesota

  • Minnesota Attorney General Ellison announced that the Minnesota Supreme Court ruled that a wage theft investigation may move forward against property-management company Madison Equities. The company previously refused to comply with a civil investigative demand.

New Jersey

  • The New Jersey Bureau of Securities announced that it would not adopt a rule proposed in 2019 that would have created a uniform fiduciary duty for investment advisers and securities broker-dealers. The rule will not be adopted due to increased use of digital platforms and practices, which may pose new risks for investors, meaning more exploration is required. At the moment, the Bureau will continue to use existing authority and regulations to combat predatory conduct.

New York

  • New York Attorney General James issued warnings to several companies, such as Labworq LLC, Sameday Health, and ClearMD Health for allegedly misrepresenting turnaround times for COVID-19 testing results. Attorney General James asked companies to update their advertising, as well as contact consumers waiting for test results with a realistic estimate of the timing for results. In some cases, Attorney General James has also asked two of the companies to provide refunds to consumers.
  • New York Attorney General James awarded over $900,000 to 14 environmental benefit projects, following a settlement with the Tonawanda Coke Corporation over environmental violations at a facility related to hazardous waste.

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

Multistate

  • A multistate coalition of attorneys general sent a letter to the Federal Housing Administration, asking it to address the failure of mortgage servicers to satisfactorily implement the COVID-19 Recovery option. According to the letter, mortgage services have failed to inform homeowners of the option, incorrectly denied it exists, and required unnecessary paperwork or conditions. The letter asks the agency to require mortgage servicers to take affirmative steps to implement the option through communications with borrowers and training of staff.
  • A bipartisan coalition of 33 attorneys general sent a letter to Director Chopra of the Consumer Financial Protection Bureau seeking stronger consumer protections for money sharing apps and platforms. The letter expresses concern about three specific areas: ease of contacting customer service representatives, account access, and third-party scams.
  • A bipartisan coalition of attorneys general sent a letter to the U.S. Department of Agriculture in support of its efforts to promote agricultural industry competition by bolstering enforcement under the Packers and Stockyards Act. The letter encourages the agency to work with states on enforcement.

California

  • California Attorney General Bonta conditionally approved a change in control of general acute care hospital  Mary Medical Center, which will allow health insurer Kaiser and the hospital to form a new company, St. Mary Medical Center, LLC, and construct a new hospital. The conductional approval also includes requirements for competitive and health impact mitigation.
  • California Attorney General Bonta announced the sentencing of Kinder Morgan Energy Partners subsidiary SFPP for discharging gasoline from a cracked pipeline into a waterway that ultimately went into the Walnut Creek Canal. The company was ordered to pay $2.5 million in fines, penalties, and assessments and placed on an 18-month probation. During the probation the company must revise its practices, such as through training programs, a leak detection system, and revised spell volume calculation methods.

Massachusetts

  • Massachusetts Attorney General Healey announced that construction company Superior Carpentry, Inc. and its president and vice president must pay over $540,000 in restitution and penalties to resolve allegations that the company failed to pay prevailing wages and submitted false payroll records. Attorney General Healey’s office also separately sued construction management firm BPI Construction Management, Inc. for allegedly violating the state False Claims Act by facilitating the submission of false payroll records.
  • Massachusetts Attorney General Healey announced that under an assurance of discontinuance, drug company Collegium Pharmaceutical, Inc. agreed to pay $185,000 and stop advertising opioids through in-person detailing and speaker programs. The company was accused of falsely advertising the risks of its opioid Xtampza ER.

Michigan

  • Michigan Attorney General Nessel announced a new online consumer protection resource related to gas prices, which will allow consumers to more easily compare prices and report price gouging.
  • Michigan Attorney General Nessel announced the issuance of a Notice of Intended Action against Planetary Toys, LLC d/b/a Treasure Trove Toysfor allegedly violating Michigan’s consumer protection law after receiving complaints that the business charged consumers but then did not send them purchased items and often failed to provide refunds.

Nebraska

  • Nebraska Attorney General Peterson announced he will not seek a third term as Attorney General after his term ends in 2022.

New Jersey

  • New Jersey Acting Attorney General Bruck announced initiatives that would promote racial justice throughout the state. For example, the package includes rulemaking to reduce discrimination among licensed professionals and a directive to prioritize racial justice in enforcement actions, such as civil investigations.
  • New Jersey Acting Attorney General Bruck announced a settlement with cancer care providers Regional Cancer Care Associates LLC, RCCA MSO LLC, and RCCA MD LLC, for allegedly failing to adequately protect patient data after two data breaches. The providers have agreed to pay $425,000 and adopt more stringent privacy and security policies.
  • New Jersey Acting Attorney General Bruck announced an enforcement action against individuals and related entities, such as Woodbridge Group of Companies for selling unregistered securities. One of these actions is a six-count lawsuit against two individuals and two related companies, and the other is a Summary Penalty Order against an individual that includes a $120,000 payment.

New York

  • New York Attorney General James filed a lawsuit and secured a court order against pet store Shake a Paw for, among other things, illegally selling puppies that were sick or injured while falsely advertising the puppies as healthy, failing to disclose legitimate health information, and declining to provide reimbursement for veterinary bills. The court order bans the stores from purchasing or adopting new animals for resale, freezes the business’s bank accounts, and requires vet examination of puppies currently in the business’s possession.
  • New York Attorney General James sent a letter to mortgage servicers in New York and industry trade associations, repeating her expectation that these businesses provide long-term relief to homeowners in accordance with New York and federal law.
  • New York Attorney General James issued a press release warning against price gouging of over-the-counter COVID-19 testing products for at-home use and other essential products. In connection with the consumer alert, Attorney General James stated, “If New Yorkers see exorbitant price increases on testing kits or other goods vital and necessary for health, safety, and welfare, they are encouraged to report it my office immediately. And fraudsters are on notice that if they attempt to price gouge during this new surge, we will not hesitate to take action.”

North Carolina

  • North Carolina Attorney General Stein announced that the Federal Communications Commission has shortened the time by which smaller companies must adopt STIR/SHAKEN technology to help reduce robocalls. The deadline is now shortened to June 30, 2022 from June 2023.

Texas

  • Texas Attorney General Paxton announced that his office is investigating Endo Pharmaceuticals, , and AbbVie Inc. under the Texas Deceptive Trade Practices Act for allegedly advertising and promoting hormone blockers without disclosing potential risks.

Virginia

  • Virginia Attorney General Herring announced settlements with Terry Singh Corp. d/b/a Waynesboro Marathon and Springfield-based Tahir and Sons LLC d/b/a Interstate Fuel LLC for allegedly violating state law against price gouging during the state of emergency for the Colonial Pipeline shutdown. The gas stations allegedly increased the prices for gas by over 30%.

Washington

  • Washington Attorney General Ferguson testified that CenturyLink is responsible for technological failures causing a 911 outage in December 2018. He also asserted that CenturyLink illegally failed to notify its call centers of the outage. The company is facing $7.2 million in penalties.
  • Washington Attorney General Ferguson announced a bill that will be proposed in the next state legislative session to increase access to affordable health care. The bill would make 2.2 million more individuals in the state eligible for free or reduced-cost health care at hospitals and clinics.

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

Monday, December 6, 2021

Consumer Protection

  • Washington D.C. Attorney General Racine filed an amicus brief in Superior Court of the District of Columbia case Muslim Advocates v. Facebook, which relates to allegations that misrepresented its content moderation practices in regard to hate speech. Attorney General Racine is asking the court not to give Facebook immunity from consumer protection law. Among other things, Attorney General Racine argues that federal law does not protect online platforms from being responsible for false claims and misrepresentations.
  • California Attorney General Bonta announced the sentencing of the former operators of company Student Loan Relief Department for their roles in a student loan assistance scam and related computer crimes. The scam included convincing borrowers to sign up and pay $1,300 when the programs were available for free, false claims of association with the U.S. Department of Education, and illegally accessing student borrower records from the Federal Student Aid website.

Tuesday, December 7, 2021

Antitrust and Competition

  • Several attorneys general and the Federal Trade Commission announced an agreement with Vyera Pharmaceuticals and a former CEO, requiring the company to pay up to $40 million and banning the CEO from most pharmaceutical company roles for seven years. The company and CEO have been accused of behaving illegally and monopolistically in order to increase and maintain the price of drug Daraprim.

Criminal Medicaid Fraud

  • California Attorney General Bonta announced the sentencing of the medical director of West Coast Counseling Services for the theft of over $2.8 million from Medi-Cal through submitting fraudulent claims for services that were not medically justified and/or not performed.

Environment

  • Massachusetts Attorney General Healey, the U.S. Environmental Protection Agency, and the Baker-Polito Administration announced that cotton bleaching company Barnhardt Manufacturing Company agreed to pay almost $1.5 million to settle claims that it spilled concentrated sulfuric acid into the North River, killing many state fish. The settlements also include injunctive relief, such as requiring compliance with chemical accident prevention, water pollution, and hazard management laws at company facilities.

False Advertising

  • Iowa Attorney General Miller announced a settlement with commercial custodial and janitorial companies Heritage GroupHeritage Microbial Control, LLC, SPMC, LLC, and an officer, resolving allegations that the group of companies violated the Consumer Fraud Act by falsely advertising that its cleaning process provided long term protection against coronavirus transmission on surfaces when it did not have a reasonable basis for these claims. The settlement includes a $75,000 penalty, consumer refunds, and injunctive relief.

Wednesday, December 8, 2021

False Advertising

  • Pennsylvania Attorney General Shapiro announced that THS Group, LLC, also known as Total Home Protection, and its owner agreed to pay $750,000 and change its business conduct as part of a settlement over alleged deceptive marketing practices. Among other things, the company was accused of falsely advertising the services available under its contracts and wrongfully denying claims and refunds.

Housing

  • California Attorney General Bonta announced a $3.5 million judgment against real estate investment company Wedgwood, resolving allegations that it illegally evicted tenants from properties bought at foreclosure sales. The judgment also includes injunctive relief.

State AG News

  • Iowa Attorney General Miller was elected president of the National Association of Attorneys General. As his presidential initiative, he has chosen “Consumer Protection 2.0: Tech Threats and Tools,” which will help consumers fight threats from digital technology and social media.

Thursday, December 9, 2021

Civil Rights

  • Washington D.C. Attorney General Racine announced legislation that would strengthen civil rights protections by prohibiting businesses and institutions from using algorithms that create discriminatory or biased results and inhibit individuals’ access to critical opportunities.

Consumer Protection

  • Florida Attorney General Moody announced the resolution of an action against robocaller Lifewatch Inc., which allegedly falsely claimed medical and alert systems were free and forced consumers to pay cancellation penalties. The resolution includes $1.8 million in refunds and injunctive relief, such as a ban on telemarketing.
  • Massachusetts Attorney General Healey announced an almost $51 million settlement against e-cigarette retailer Eonsmoke, LLC and its co-owners. The settlement resolves allegations that the company and co-owners targeted minors for sales of vaping products that were advertised in a manner appealing to youth and failed to ensure shipments were received by a person 21 years old or older. The settlement also includes injunctive relief.

Environment

  • Wisconsin Attorney General Kaul announced an agreement with Kerry, Inc., d/b/a Red Arrow Products, which requires the company to pay a $90,000 penalty for allegedly violating the state’s air pollution control laws at a liquid smoke facility.

False Advertising

  • Massachusetts Attorney General Healey filed a lawsuit against dental chain Aspen Dental Management, Inc., alleging that the company engaged in deceptive advertising and marketing, including charging patients for “free” services and not fulfilling alleged guarantees. The lawsuit seeks injunctive relief, restitution, civil penalties, and costs.

Friday, December 10, 2021

Consumer Protection

  • Massachusetts Attorney General Healey announced consent judgments against asbestos abatement company Impresair Environmental Corporation and asbestos consulting company Enviro-Safe Engineering, resolving claims of illegal asbestos abatement and monitoring conduct. The consent judgments include up to $245,000 in penalties and injunctive relief, such as required employee training.

Saturday, December 11, 2021

Price Gouging

  • Kentucky Attorney General Cameron announced the activation of the state’s price gouging hotline after tornadoes and severe weather in Kentucky. The press release quotes Attorney General Cameron, stating, “We’re activating the price gouging hotline to assist local communities with responding and to ensure that no Kentuckian experiences predatory pricing as they’re purchasing emergency supplies.”

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

Monday, November 29, 2021

Charities/Non-profits

  • New York Attorney General James issued her annual fundraising report, which revealed that charities using professional fundraisers received about two thirds (73%) of the money donated in 2020, representing a small increase from prior years.

Consumer Protection

  • Arizona Attorney General Brnovich announced a consent judgment against Amazon Home Warranty, LLC, which is not affiliated with Amazon.com. The judgment resolves a lawsuit accusing the company of posting fake five-star reviews, falsely representing it had been in business for almost 10 years, and misleading consumers about its officers’ identity. The judgment includes $105,000 in consumer restitution, $35,000 in civil penalties, $10,000 in attorneys’ fees, and claims administrator costs.
  • Senior Assistant Attorney General Wendy Weinberg testified on behalf of Washington D.C. Attorney General Racine in support of Bill 24-357, which would protect consumers from unfair debt collection activity. Among other things, the bill would expand District debt law protections to include credit card and medical debt, cover third-party debt buyers, and prohibit harassment such as communicating with consumers’ employers about their debt. It would also clarify that individuals may not be put in jail for failing to pay a debt.

Environment

  • A multistate coalition of attorneys general, co-led by California Attorney General Bonta, Maryland Attorney General Frosh, and Massachusetts Attorney General Healey, filed comments in support of the Biden administration’s proposal to rescind rules that would reduce critical habitat designations under the Endangered Species Act. The coalition is asking the Biden administration to quickly rescind the rules and to address habitat degradation and destruction as well as climate change.

Tuesday, November 30, 2021

Consumer Protection

  • Washington D.C. Attorney General Racine announced that online lender Opportunity Financial, LLC has entered a settlement under which it will pay $1.5 million in refunds, waive over $640,000 in interest, pay $250,000 to the District, limit its lending to rates below the legal cap, and stop engaging in misleading practices. The settlement resolves a lawsuit accusing the company of misrepresenting the nature of its high interest loans and charging interest rates significantly above the legal cap.

False Advertising

  • Massachusetts Attorney General Healey announced a lawsuit against School Health Corporation for allegedly falsely marketing and selling a hand sanitizer product to school districts and falsely claiming that it could kill the COVID-19 virus without the need for reapplication, when in reality it did not contain hand sanitizer’s key ingredients, such as alcohol. The complaint, which alleges the company violated the Massachusetts False Claims Act, seeks treble damages, civil penalties, and attorneys’ fees and costs.

Wednesday, December 1, 2021

Consumer Financial Protection Bureau

  • New York Attorney General James issued a press release informing consumers of their rights when debt collectors contact them. The press release states that new rules the Consumer Financial Protection Bureau adopted, which became effective on November 30, limit the time and manner in which debt collectors may contact consumers. Additionally, it states that New York’s Consumer Credit Fairness Act, which was signed into law on November 8, provides rights to consumers sued over their debt.

Thursday, December 2, 2021

Criminal Medicaid Fraud

  • Georgia Attorney General Carr announced the sentencing of the former owner of The Counseling and Training Center for Medicaid Fraud after the defendant billed for services given by unauthorized providers. The sentencing also includes a $631,843 restitution payment.

Consumer Protection—Consumer Affairs Response Team

  • Nebraska Attorney General Peterson announced the launch of his office’s Consumer Affairs Response Team (CART). CART is intended to address the need for a better dispute resolution process between businesses and consumers. Consumers may engage with CART directly to address complaints and identify scams, but the press release states that consumers are expected to make a good faith effort first to resolve the issue directly with the business. It also states that the dispute resolution process is voluntary.

Financial Disclosure Act

  • New Mexico Attorney General Balderas announced his support for legislation that would amend the state’s existing Financial Disclosure Act, which requires some public officers to file disclosure statements. The legislation would clarify to whom the Act applies and require specific disclosures of all income sources over $600. It would also widen the scope of required reporting to include information, such as business relationships and positions, as well as gifts.

Housing

  • Washington D.C. Attorney General Racine announced that his office is taking on a novel role of advocating for racial equity, affordable housing, and environmental justice in land use, zoning, and related processes. Attorney General Racine is asking the Zoning Commission to make inclusionary housing more affordable, expand the zone of required inclusionary housing units, and incentivize affordable housing.

Friday, December 3, 2021

Antitrust

  • Colorado Attorney General Weiser issued a statement about the cancellation of a merger that was planned between Great American Outdoors Group and Sportsman’s Warehouse. Great American Outdoors Group owns Bass Pro Shops and Cabela’s. Attorney General Weiser believed the merger would have potentially harmed consumers and employees in the state through higher prices, fewer options, and store closures. His office had agreed to join the Federal Trade Commission in a lawsuit to halt the merger.

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

Monday, November 22, 2021

Consumer Protection

  • Washington D.C. Attorney General Racine issued a consumer alert warning consumers of scammers using the Uber app in phishing schemes that trick consumers to reveal private information. The alert encourages consumers to screenshot messages that appear to be phishing and report them on the Uber app’s “Help Page.”

Financial Misconduct

  • New York Attorney General James announced the guilty pleas of nonprofit Millennium Care, Inc. and its executive director for tax evasion and theft of over $2 million that was meant for a homeless shelter’s operation.

Tuesday, November 23, 2021

Consumer Protection

  • New York Attorney General James announced that her office reached an agreement with a debt collector and his companies Northwood Asset Management Group LLC, Pinnacle Asset Recovery Group LLC, and Koalaty Pay LLC, permanently banning them from consumer debt collection in the future and requiring a $1.2 million payment. New York Attorney General James’ office found that collectors working for the companies used illegal tactics for debt collection such as wage garnishment, driver’s license suspension, lawsuits, and false threats of criminal action.
  • Vermont Attorney General Donovan announced that his office reached settlements with eight online e-cigarette sellers for violating the state Delivery Sales Ban and Consumer Protection Act. The settlements require the companies to pay a total of $145,750 in civil penalties and notify consumers that they do not ship to individuals in the state.

Environment

  • New York Attorney General James, Connecticut Attorney General Tong, and Acting New Jersey Attorney General Bruck sent a letter to the U.S. Environmental Protection Agency asking it to act more quickly in increasing controls on air pollution from heavy duty trucks. Specifically, the attorneys general are seeking stronger emissions standards for nitrogen oxides emitted by new on-road heavy-duty trucks and engines for model year 2027 and later.
  • A multistate coalition of attorneys general submitted comments in support of the U.S. government’s proposal to restore rules requiring comprehensive environmental reviews of federal projects under the National Environmental Policy Act. The coalition also asked the government to more quickly revise or repeal a 2020 rule that reduced requirements ensuring that federal agencies evaluate the environmental and public health impacts of their activity.

Wednesday, November 24, 2021

Consumer Protection

  • Pennsylvania Attorney General Shapiro announced that his office filed a complaint against online stores Internet Hobbies, LLC and Hobby Models, LLC and their operators, alleging that they failed to deliver products and refund consumers’ payments, violating state consumer protection law. The lawsuit seeks restitution, civil penalties, and injunctive relief including to stop doing business in the state.

False Advertising

  • New York Attorney General James announced a $5.1 million judgment against stem cell clinic Park Avenue Stem Cell and its managing doctor, resolving a 2019 lawsuit that alleged the company illegally and fraudulently advertised its stem cell procedures. The business allegedly advertised that it could treat a variety of serious medical issues with patients’ stem cells, even though there is no adequate scientific substantiation that these claims are true. The judgment also includes permanent injunctive relief from false advertising.

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

Monday, November 15, 2021

Consumer Protection

  • A coalition of 50 state attorneys general and the District of Columbia sent a letter to the Federal Communications Commission (“FCC”) in support of its efforts to reduce robocallers’ access to legitimate phone numbers. Specifically, the FCC is proposing to implement a more stringent application, review and monitoring process for phone companies requesting direct access to phone numbers, including verifying customers’ identities. This would include limiting the ability to use temporary phone numbers for trial customers and untraceable payment methods.

Environment

  • A coalition of 19 attorneys general led by New York Attorney General James sent a letter to the U.S. Senate’s Committee on Environment and Public Works urging it to strengthen protections against PFAS “forever chemicals.” The letter cites the dangers posed by these substances and the taxpayer dollars they are costing as reasons for swift action, and seeks changes, such as designating PFAS as hazardous substances and hazardous air pollutants under federal law.

Labor and Employment – Immigration Enforcement

  • A coalition of 11 attorneys general sent a letter to the U.S. Department of Homeland Security in support of its plan to change its worksite enforcement practices to support safety, labor rights, wage protections, and other legal rights. The letter also includes several recommendations, such as a deferred action program, steps to ensure immigrants have access to information about worker rights and protections, and supporting private actions to facilitate labor laws’ enforcement.

Tuesday, November 16, 2021

Labor and Employment

  • New York Attorney General James announced an agreement with home health care agencies Intergen Health, LLC and Amazing Home Care Services, resolving allegations that the companies violated New York employment law by failing to pay wages and provide paid sick leave. The agreement requires the companies to pay $18.8 million to employees, implement new policies, and comply with regulatory oversight.

Wednesday, November 17, 2021

Antitrust

  • Arizona Attorney General Brnovich announced that he is investigating major firms’ ESG investing practices, including their membership in Climate Action 100+. Attorney General Brnovich stated that he is concerned about anticompetitive conduct and pressure on businesses.

Consumer Protection

  • New York Attorney General James issued a consumer alert about the FTC’s new guidance on negative option plans and New York’s recently enacted law that covers these practices. The consumer alert highlights the key requirements businesses engaging in negative option marketing tactics must follow: (1) clear and conspicuous disclosures, (2) informed consent, and (3) simple cancellation processes.

Price Gouging

  • Virginia Attorney General Herring announced an agreement with 7HC Inc. d/b/a 7 Heaven BP, resolving allegations that the business engaged in price gouging by charging unconscionable prices on gasoline after a state of emergency was declared for the Colonial Pipeline shutdown. The business has agreed to injunctive relief, consumer refunds, and attorneys’ fees.

Thursday, November 18, 2021

Consumer Protection

  • A bipartisan coalition of attorneys general is investigating Meta Platforms, Inc., formerly known as Facebook, for promoting its Instagram platform to children and young adults while being aware of the associated physical and mental health harms. The attorneys general are determining whether Meta violated state consumer protection laws and/or put the public at risk.

Medicaid Fraud

  • Massachusetts Attorney General Healey announced an $800,000 settlement with retail pharmacy Sun Health Systems, LLC d/b/a Bravo Pharmacy and its owner. The settlement resolves allegations that the company billed MassHealth for automatically refilled medications, for a prescription that was not provided, and for other prescriptions that were not authorized by a physician. The settlement includes a three-year compliance monitoring program in addition to the payment.

Friday, November 19, 2021

False Claims

  • Massachusetts Attorney General Healey announced a lawsuit against home health agency Prestige Health Care Services, Inc. and its executives for allegedly falsely billing MassHealth for services that were not authorized by a physician and/or were not medically necessary. The lawsuit seeks treble damages and civil penalties.
  • Massachusetts Attorney General Healey announced a settlement with home health agency Independent at Home and its owners, resolving allegations that they knowingly submitted false claims for home health services that were not appropriately authorized by a physician to MassHealth and managed care entities which administer services to MassHealth members. The settlement includes a $1.2 million payment and a comprehensive compliance 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, November 8, 2021

Antitrust

  • A bipartisan coalition of 26 attorneys general led by Pennsylvania Attorney General Shapiro and California Attorney General Bonta submitted a brief to the Third Circuit asking it to uphold a lower court decision that stopped a New Jersey hospital merger. The coalition is concerned about the anticompetitive effects of the merger.

Consumer Protection

  • Massachusetts Attorney General Healey announced an assurance of discontinuance against the Mildred Elley School, including a payment of more than $1 million in consumer relief. Among other things, the school allegedly failed to make required disclosures at least 72 hours before making enrollment agreements, advertised higher placement rates than were accurate, and engaged in high-pressure sales tactics when it contacted prospective students more than twice a week.

Data Privacy

  • Colorado Attorney General Weiser announced that SEMA Construction must pay over $63,000 and update its data security practices after a 2018 data breach. The settlement resolves allegations that the company failed to protect employees’ and consumers’ personal information and that it failed to notify consumers of the data breach in a timely manner.

Environmental

  • Washington D.C. Attorney General Racine announced the successful resolution of two environmental enforcement matters, including a judgment against Miss Dallas Trucking, LLC in a water pollution lawsuit and a settlement against local contractor Universal Flooring and Remodeling, LLC after a lead paint investigation. Miss Dallas Trucking must pay $30,000 in costs and a $50,000 civil penalty, and Universal Flooring must pay $25,000 in civil penalties and agree to injunctive relief. Attorney General Racine also announced a lawsuit against South Capitol Improvement, LLC over illegal water discharge.

Housing

  • A multistate coalition of 18 attorneys general led by New York Attorney General James submitted a comment letter to the U.S. Department of Housing and Urban Development (“HUD”) in support of expanding eviction protection rules. Specifically, the coalition is asking HUD to halt evictions when there is a pending Emergency Rental Assistance Program application, require landlords supervised by HUD to seek money rather than possessory judgments against those who file federal emergency rent assistance applications, and remove late-payment fees during national emergencies.

Tuesday, November 9, 2021

Antitrust and Competition

  • New York Attorney General James announced an agreement with the owners of supermarket chains Price Chopper and Tops Friendly Market, securing the divestment of 11 stores in connection with their proposed merger. The agreement will help maintain competition and protect employee rights in the relevant areas.

Bankruptcy

  • A bipartisan coalition of attorneys general sent a letter to Congress in support of the Bankruptcy Venue Reform Act, which would amend the Bankruptcy Code to limit where corporations may file bankruptcy to only the jurisdiction in which their principal place of business or their assets are located. The coalition believes this amendment will prevent corporations from forum shopping.

Consumer Protection

  • Kentucky Attorney General Cameron announced a proposed settlement with Delta Natural Gas which is intended to save consumers more than $3.4 million in rate increases for natural gas.

Cybersecurity

  • Connecticut Attorney General Tong issued a press release urging caution after a data breach against online stock trading platform Robinhood. According to the press release, a hacker has obtained access to five million people’s email addresses and two million people’s full names.

Environmental

  • Iowa Attorney General Miller announced that District Judge McPartland of the District Court for Linn County entered a consent decree against Abatement Specialties, approving a civil penalty of $40,000 and injunctive relief to resolve allegations of asbestos removal violations during a high school renovation.

Wednesday, November 10, 2021

Consumer Protection

  • Pennsylvania Attorney General Shapiro announced that his office won two lawsuits against car title lenders. Attorney General Shapiro’s office obtained a judgment against Dominion Management of Delaware, Inc. and Dominion Management Services, Inc., d/b/a CashPoint, and a company principal, requiring the company to pay over $8.5 million for charging illegally high interest rates on its car title loans. His office also won a court ruling against Auto Equity Loans of Delaware, LLC, which had tried to stop a consumer protection investigation against it. The U.S. District Court for the Middle District of Pennsylvania held that the Attorney General may investigate Auto Equity’s claims that none of its loan transactions occurred in Pennsylvania.

Deceptive Claims

  • Oregon Attorney General Rosenblum announced a lawsuit against opioid manufacturer Endo Health Solutions and Endo Pharmaceuticals, Inc. for allegedly deceptively marketing Opana for more than 10 years. The lawsuit alleges that the company misrepresented Opana’s risks and benefits.

Health Insurance Portability and Accountability Act (HIPAA)

  • New Jersey Acting Attorney General Bruck announced that printing companies Command Marketing Innovations, LLC and Strategic Content Imaging, LLC, which provide services to a managed healthcare organization, agreed to pay $130,000  in penalties and implement new security policies after allegations that they improperly handled medical and client information and when they failed to detect a printing error. $65,000 of the payment is suspended if the companies comply with the order.

Price Gouging

  • North Carolina Attorney General Stein announced that his office reached a $20,000 settlement with gas station Mansa Travel Center Charlotte LLC, d/b/a Queen’s Market, for allegedly violating the state price gouging law during the state of emergency in place over the Colonial Pipeline shutdown. The lawsuit alleged that the company increased gas prices by as much as 256%. The settlement also requires the company to implement software permanently that records gas prices and the number of gallons sold.

Thursday, November 11, 2021

Criminal Medicaid Fraud

  • West Virginia Attorney General Morrisey announced two criminal convictions by his office’s Medicaid Fraud Unit, one for Medicaid fraud through the submission of forged claims for non-emergency medical transportation services and the other for financial exploitation of an elderly person by a nursing home employee. Both convictions also resulted in the payment of full restitution.

Friday, November 12, 2021

Consumer Protection

  • The Consumer Financial Protection Bureau filed a lawsuit against pawn lenders FirstCash, Inc. and Cash America West, Inc. alleging that they violated the Military Lending Act by charging over 36% on loans to active duty servicemembers and their dependents. The lawsuit, which seeks injunctive relief, consumer redress, and civil penalties, also alleges that FirstCash violated a 2013 order against its predecessor.

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

Monday, November 1, 2021

Consumer Protection

  • Kansas Attorney General Schmidt announced that Shawnee County District Court Judge Watson approved consent judgments against company SearchTec, Inc., which manages business documents, for illegally disposing of documents that contained personal information using public trash receptacles in violation of the Kansas Consumer Protection Act. Under the consent judgments, three corporate entities associated with SearchTec must pay almost $500,000 and change their business practices, for example by properly disposing of documents and conducting employee training.
  • Massachusetts Attorney General Healey announced a settlement with insurance agency Health Plan Intermediaries Holdings, LLC d/b/a Health Insurance Innovations, resolving allegations that the company sold health insurance plans that were not authorized for sale, claimed that its health insurance covered services it actually excluded, described health insurance as comprehensive when it was limited, and deceptively passed off limitations as positive elements rather than negative. The settlement includes a $625,000 payment and bans the company from selling health plans that are not Medicare-related in the state for a year.

Financial Exploitation Prevention Act (FEPA)

  • Michigan Attorney General Nessel announced that the Financial Exploitation Prevention Act’s rule requiring financial institutions to report financial exploitation of vulnerable adults to law enforcement and adult protective services is now in effect.

Tuesday, November 2, 2021

Consumer Protection

  • Washington D.C. Attorney General Racine asked six funeral homes in the District to comply with an emergency COVID-19 law requiring funeral homes to clearly and transparently display pricing information about funeral services and goods on the businesses’ websites. The businesses must also post the Funeral Bill of Rights online.

Education – Title IX

  • A coalition of 19 state attorneys general and the District of Columbia, led by Oregon Attorney General Rosenblum, filed an amicus brief with the District of Oregon in Hunter v. U.S. Department of Education, in support of Title IX laws which prohibit sex-based discrimination. The coalition is arguing that the religious exemption to Title IX was unjustly expanded and should again be narrowed.

Healthcare – Pharmacy Benefit Managers

  • Insurance Commissioner Navarro announced that the Delaware Department of Insurance will begin creating and enforcing regulations over Pharmacy Benefit Managers (“PBMs”) as HB 219 goes into effect. Among other things, the newly enacted law bars unequal payments to unaffiliated pharmacies and gives the Department of Insurance the power to investigate and regulate PBMs.

State AG Election News

  • Jason Miyares (R) won Virginia’s attorney general election, defeating incumbent Mark Herring (D). AG Elect Miyares, who has been a member of Virginia’s House of Delegates since 2016 and is a former prosecutor, has become the state’s first Latino attorney general. Some of his priorities in office include combatting human trafficking and improving law and order in Virginia.

Wednesday, November 3, 2021

Antitrust

  • Colorado Attorney General Weiser sent a letter to the U.S. Department of Transportation asking it to help increase competition among airlines to improve consumer protection. Specifically, Attorney General Weiser relayed his concerns that the industry is too concentrated and provides unnecessarily limited competition. Weiser also offers suggestions for a new model for the industry, including changes in slot management and code-sharing practices.

Thursday, November 4, 2021

Consumer Protection

  • Florida Attorney General Moody announced a lawsuit against online travel company BookIt Operating, LLC seeking more than $7 million for consumers. The lawsuit alleges that the company acted as an online third-party intermediary for car rentals, hotels, and airlines, and that it failed to disclose it did not have funds for current bookings without new incoming bookings, leaving consumers without a reservation or an initial refund.

Environmental – Toxic Chemicals

  • North Carolina Attorney General Stein announced four lawsuits against 14 manufacturers of fire suppressant Aqueous Film Forming Foam, which contains PFAS. The lawsuit alleges that the manufacturers created a public nuisance and a design defect, failed to warn consumers, and fraudulently transferred assets to shield profits. The lawsuit is seeking an investigation into the nature of the damage, a cleanup, replacement of water treatment systems and wells, restoration of resources, and future monitoring.

Social Media

  • Pennsylvania Attorney General Shapiro announced a lawsuit against Pennsylvania companies owned and operated by influencer Dana Chanel, alleging that Chanel failed to deliver promised goods and services and misled consumers.

Friday, November 5, 2021

Bank Secrecy Act

  • California Attorney General Bonta announced an administrative accusation filed with the California Gambling Control Commission against The Bicycle Hotel & Casino, following the resolution of a federal investigation into whether the company violated the Bank Secrecy Act’s anti-money laundering provisions. The action will seek to hold the business owner responsible for violations of state law.

Consumer Protection

  • Illinois Attorney General Raoul announced a settlement with online payday lending lead generators MoneyMutual LLC, PartnerWeekly LLC, and Selling Source LLC. The settlement resolves allegations that these businesses violated state lending laws by generating payday loan leads without a license and by arranging payday loans for out-of-state lenders which were also unlicensed, all while representing that their loan network was trustworthy. The settlement requires the companies to immediately stop offering loans to consumers in the state without a license.
  • Colorado Attorney General Weiser announced that the Colorado Department of Law’s consumer protection section responded to complaints that online educational platform com displayed e-cigarette ads. The press release states that the consumer protection section is satisfied with the company’s steps to block these advertisements using content moderating software but that it will continue to monitor online advertising to protect children.

Cybersecurity

  • Washington Attorney General Ferguson released his sixth annual Data Breach Report, revealing that the last year has far surpassed the record of data breach and ransomware attacks reported since Attorney General Ferguson’s office began tracking this data. 2021 saw 6.3 million notices, while the previous record was 3.5 million in 2018.