On January 11, 2021, Eric Schmitt (R) was sworn in for his first full term as Missouri’s Attorney General. He has served as Attorney General since January 2019, and he was elected to a four-year term in November 2020. Prior to his election, he served as State Treasurer and as a state senator. In connection with his swearing in, Attorney General Schmitt pledged to continue his work combatting violent crime and human trafficking, eliminating the backlog of untested sexual assault kits, and fighting for consumer protection.
Each week, Crowell & Moring’s State Attorneys General team highlights significant actions that State AG’s have taken. Here are this week’s updates.
Monday, January 11, 2021:
- New Jersey Attorney General Grewal announced a settlement with Elite Aluminum Products Inc., which does business as DaytonaTactical.com and GunPartsPlus.com, for violating the New Jersey Consumer Fraud Act by offering and selling large capacity magazines to New Jersey buyers and for failing to comply with a subpoena. The Consent Judgment includes a civil penalty of $135,000 and requires the company to stop selling large capacity magazines within the United States as well as to maintain records of attempted purchases in New Jersey.
- The New Hampshire Attorney General’s Office announced that a civil enforcement action was filed against Trigram Education Partners, LLC for allegedly violating the New Hampshire Consumer Protection Act with unfair and deceptive acts or practices in its operation of the American School of Nursing and Medical Careers. The company allegedly deceived students about the school’s loss of accreditation and higher education bond as well as its eviction from campus for failure to pay rent. It also deceived students about their ability to be refunded if they withdrew from the program when it did not have the financial ability to pay refunds.
- A bipartisan coalition of 48 attorneys general led by West Virginia Attorney General Morrisey and New Mexico Attorney General Balderas is seeking a progress report about steps the U.S. Food and Drug Administration has taken to combat the opioid crisis under the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act (“SUPPORT Act”). The SUPPORT Act includes provisions requiring safer opioid packaging and disposal features, new regulations on non-addictive alternatives, and guidelines for prescribing opioids.
- The owners of construction company G&R Drywall and Framing, LLC have been charged with misclassifying workers as independent contractors in violation of the Construction Misclassification Act for a project in Delaware County. In connection with the prosecution, Pennsylvania Attorney General Shapiro stated, “Today’s prosecutions send a clear message — misclassification will have real consequences in Pennsylvania. We cannot tolerate business practices that ignore the legal requirements for contractors and engage in this kind of theft here in the Commonwealth.”
- A 12-state coalition of attorneys general submitted comments to the Environmental Protection Agency (“EPA”) arguing that its draft guidance misinterprets the U.S. Supreme Court’s County of Maui v. Hawaii Wildlife Fund standard for determining if the indirect discharge of wastewater through groundwater or another similar conduit into U.S. waters is subject to a Clean Water Act permit. The coalition is arguing that the EPA’s draft guidance allows polluters to avoid regulation under the Clean Water Act.
Tuesday, January 12, 2021:
- A multistate coalition of 11 attorneys general announced a stipulated judgment against sham veterans’ charity Healing Heroes Network, Inc. after an investigation revealed that it falsely promised to use charitable donations to help wounded veterans receive medical treatments, when the vast majority of these funds were actually used for business expenses. Under the judgment, the company must cease charitable solicitations and pay $95,000, which will be distributed to a veterans’ charity.
- Arizona Attorney General Brnovich announced that his office obtained a judgment against the owner of Pacific Auto Sales for allegedly violating the Arizona Consumer Fraud Act by altering odometers to advertise the vehicles using false mileage figures, failing to honor the implied warranty of merchantability for used motor vehicles, failing to disclose finance terms for vehicles, and including impermissible late fee amounts and time limits in its contracts. The settlement includes $30,000 of restitution and up to $80,000 in civil penalties.
- Virginia Attorney General Herring announced a settlement with Joule Wellness Pharmacy for allegedly violating the Virginia Post-Disaster Anti-Price Gouging Act by charging unconscionable prices on rubbing alcohol when it charged $22 per 16-oz bottle. The settlement includes injunctive relief and disgorgement and also requires the pharmacy to pay $2,500 in civil penalties and attorneys’ fees.
- Washington D.C. Attorney General Racine announced a settlement with the owners of a Ward 5 commercial property for improperly storing hazardous waste and allowing oil to spill and leak into public spaces for several years. The settlement requires the defendants to pay a $350,000 civil penalty, comply with the Leaking Underground Storage Tank (LUST) Program, and assess additional sites they own to determine if further action is needed.
Wednesday, January 13, 2021:
- Kentucky Attorney General Cameron announced an over $300 million multistate settlement with cigarette manufacturer S&M Brands, Inc., which was not part of the Tobacco Master Settlement Agreement, to offset liability associated with cigarette manufacturing, distribution, and sales. The settlement ends a lawsuit S&M brought against North Carolina to reclaim deposits made for cigarette sales, and it requires S&M to pay 30% of escrow principal to the states and 30% to the Master Settlement Agreement participating cigarette manufacturers.
- California Attorney General Becerra led a coalition of 17 attorneys general and New York City in a lawsuit challenging the Environmental Protection Agency’s (“EPA”) choice not to change existing National Ambient Air Quality Standards for particulate matter pollution. The coalition is arguing that the EPA’s decision to maintain the current standards was arbitrary and capricious because its review was flawed and biased and because the scientific data demonstrates the need for more robust standards.
- A bipartisan coalition of 50 attorneys general, co-led by Washington D.C. Attorney General Racine, Colorado Attorney General Weiser, Idaho Attorney General Wasden, and Nebraska Attorney General Peterson, and the National Association of Attorneys General condemned the January 6, 2021 attacks on the U.S. Capitol, in a letter urging Acting Attorney General Rosen not to let the actions go unchecked.
Thursday, January 14, 2021:
- Minnesota Attorney Genera Ellison announced a settlement with student loan debt relief company Document Assist Center for allegedly falsely promising consumers student loan forgiveness when only the federal government can forgive student loans, as well as charging them to enroll in programs in which they can enroll themselves for free, collecting upfront fees for debt settlement services, and operating without registration. The settlement requires the company to pay $11,499 in restitution and to cease operating in Minnesota unless it registers as a debt-settlement service provider.
- The Department of Justice announced that Toyota Motor Company must pay $180 million in a settlement agreement over longstanding noncompliance with the Clean Air Act’s reporting requirements, which are designed to control emissions and include that manufacturers must report potential defects and recalls that affect vehicle components.
- New York Attorney General James filed a lawsuit against the New York City Police Department and its leaders, alleging illegal conduct during racial justice protests and failure to address this pattern of abuse by not providing adequate training, supervision, or discipline.
Financial Services/ Consumer Financial Protection Bureau
- The Consumer Financial Protection Bureau (“CFPB”) and the National Credit Union Administration announced a Memorandum of Understanding to improve their coordination related to consumer protection supervision of credit unions that are over $10 billion in assets.
- Washington D.C. Attorney General Racine announced a lawsuit against construction materials processing and recycling facility Rodgers Brothers Custodian Services, Inc. for discharging petroleum and construction waste into waters in D.C. The lawsuit is seeking injunctive relief and civil penalties.
- New Jersey Attorney General Grewal announced that New Jersey joined Connecticut, Delaware, Massachusetts, New York, and New York City in a lawsuit against the U.S. Environmental Protection Agency (“EPA”) alleging that the EPA abdicated its duty to act against harmful ozone pollution from upwind states.
- New Jersey Attorney General Grewal announced that New Jersey is suing the federal government for its contamination of groundwater and drinking water on and around U.S. military bases and other federal facilities located in New Jersey through its use of aqueous film-forming foam, a fire suppressant that contains toxic chemicals.
Friday, January 15, 2021:
- Massachusetts Attorney General Healey announced that Colonial Automotive Group, Inc. agreed to pay $1 million in penalties to settle claims that it took advantage of unemployment benefits during the pandemic. The company allegedly encouraged furloughed employees to apply for unemployment benefits when dealership showrooms were ordered to close and then requested that they continue to work without pay.
- Vermont Attorney General Donovan announced a settlement with Club Fitness of Vermont, Inc. and its owner, resolving claims stemming from the gym’s re-opening for in-person operation in May, violating Governor Scott’s Executive Order prohibiting gyms from opening. Under the settlement, the gym has agreed to comply with existing orders and addenda, which now allow gyms to operate with restrictions, as well as make a $1,000 payment to the Vermont Foodbank’s Rutland Regional Distribution Center.
- Attorneys general from D.C., Illinois, Massachusetts, and New Jersey sent a letter to Facebook, urging it to stop advertising military tactical gear and weapon accessories until at least after the presidential inauguration, following the attack on the U.S. Capitol.
- Minnesota Attorney General Ellison announced that as part of a settlement, travel company Voyageurs International will pay $664,835 in refunds to music students who signed up for 2020 European tours. The settlement resolves an investigation into whether the company truthfully and fairly communicated about and charged cancellation fees.
- California Attorney General Becerra announced a lawsuit against the U.S. Department of Education over its efforts to ease oversight and accountability on for-profit colleges through its “Distance Education and Innovation” regulations, which allow colleges to bypass Higher Education Act requirements for Title IV funds. Attorney General Becerra is arguing that the new rule helps predatory institutions at the expense of students and taxpayers.
- California Attorney General Becerra and the California Air Resources Board announced that they are leading a multistate coalition in a lawsuit against the Environmental Protection Agency (“EPA”), challenging its decision to regulate greenhouse gas emissions from airplanes at a level that would result in essentially no reductions in emissions. The coalition is arguing that the EPA acted arbitrarily, capriciously, and unlawfully in adopting this rule.
Financial Services/Consumer Financial Protection Bureau
- The Consumer Financial Protection Bureau filed a lawsuit against 1st Alliance Lending, LLC and several of its former executives for allegedly engaging in illegal mortgage-lending practices, violating the Truth in Lending Act, the Fair Credit Reporting Act, the Equal Credit Opportunity Act, the Mortgage Acts and Practices—Advertising Rule, and the Consumer Financial Protection Act of 2010. The company allegedly unlawfully employed unlicensed employees for mortgage-origination activities and consumer interactions, required consumers to submit verifying documents related to their residential mortgage loan applications before providing loan estimates, and denied credit to consumers based on consumer report or application information but did not give consumers requisite notice. The lawsuit seeks injunctive relief, damages, consumer redress, disgorgement, and civil penalties.
On January 18, 2021, Alaska Governor Mike Dunleavy appointed Clyde “Ed” Sniffen (R) as Alaska’s new attorney general. Sniffen served as acting attorney general since the resignation of former Attorney General Kevin Clarkson in August 2020. Prior to becoming attorney general, Sniffen began his legal career in private practice in 1988, then joined the Alaska Department of Law in 2000. For his first 15 years at the Department, he focused on consumer protection and antitrust matters. He also served as Chief Assistant Attorney General for the Regulatory Affairs Section, Chief Deputy for the Civil Division, and Chief of Staff. In connection with his appointment, Sniffen said, “I am honored to be selected as the next Attorney General for Alaska, and look forward to working on the important legal issues facing our state.”
Each week, Crowell & Moring’s State Attorneys General team highlights significant actions that State AG’s have taken. Here are this week’s updates.
Monday, January 4, 2021:
- The Washington and Oregon attorneys general, 29 federally recognized tribes, tribal entities, and communities, and nine community organizations, historical preservation societies, and museums filed a lawsuit against the federal government for proceeding with the sale of the National Archives and Records Administration’s building in Seattle. The building houses, among other things, exclusive tribal and treaty records, to which the public will effectively lose access after the sale. The attorneys general and other groups are arguing that the sale violates conditions Congress put on agencies’ ability to sell federal properties in an expedited manner and fails to account for the importance of the records to the region.
- Delaware Attorney General Jennings announced that manufactured home owners who are in dispute with their community owners will be able to receive free legal representation by non-profit Delaware Community Legal Aid Society, Inc. (“CLASI”) under a contract between CLASI and the Delaware Department of Justice.
Tuesday, January 5, 2021:
Privacy | Data Breach
- New York legislators introduced a bill, Assembly Bill 27, that would regulate how private organizations handle biometric data. Among other things, the legislation would prohibit private organizations from profiting from the use of biometric identifiers and require private organizations holding biometric information or identifiers to formalize their handling of these materials. The bill also includes a private right of action.
- The Protecting Families of Fallen Servicemembers Act was signed into law on January 5, 2021. The law allows family members of U.S. servicemembers who were killed or seriously injured in combat or training to terminate their phone, internet, or television service contracts, without having to pay a termination fee.
Wednesday, January 6, 2021:
- New Jersey Attorney General Grewal announced a lawsuit to stop a scheme in which a New Jersey family allegedly operated several companies to defraud financially struggling consumers by offering debt adjustment services that ultimately did not provide meaningful relief and often made consumers’ financial situation worse. The state also obtained a temporary restraining order preventing the defendants from providing loan modification or debt adjustment services and preventing them from conducting business under unregistered assumed names, among other provisions. In connection with the lawsuit, Attorney General Grewal stated, “We have zero tolerance for predatory practices targeting vulnerable consumers who want nothing more than to stay in their homes, especially in the midst of a pandemic. And by partnering with the Department of Banking and Insurance, as we are today, we are sending a message that we won’t hesitate to bring the full range of the State’s consumer financial protection laws to bear when we crack down on unconscionable consumer abuses.”
- South Carolina Attorney General Wilson filed an unfair labor practice charge against unions International Longshoremen’s Association (“ILA”) and United States Maritime Alliance, Ltd. (“USMX”). The charge is alleging that ILA and USMX violated the National Labor Relations Act by attempting a secondary boycott against South Carolina’s new Hugh Leatherman Terminal.
- West Virginia Attorney General Morrisey announced enforcement actions against contractors Hawkins Construction, Kyle Construction and Robert E. Jones for failing to complete projects or performing substandard work without providing refunds to consumers.
- Florida Attorney General Moody announced a partnership with Tampa International Airport to combat human trafficking ahead of the Super Bowl. The airport will display human trafficking awareness signs throughout that encourage travelers to report human trafficking and urge victims to reach out for help.
Thursday, January 7, 2021:
- President Biden announced his plans to nominate federal appeals court judge Merrick Garland as attorney general, prosecutor Lisa Monaco as deputy attorney general, civil rights attorney Vanita Gupta as associate attorney general, and Kristen Clarke as assistant attorney general for civil rights.
Friday, January 8, 2021:
- New Mexico Attorney General Balderas announced that his office secured a guilty plea from a personal care agency owner for defrauding the New Mexico Medicaid program of more than $400,000. The individual allegedly billed Medicaid as if her employees were providing care over 24 hours a day and for more services than each patient required to meet their needs, as well as withdrew money in casinos from the personal care agency account.
- Florida Attorney General Moody announced a consent judgment against diploma mill Ellenwood Academy, LLC and its owner for selling fake diplomas after charging students $195 to enroll in a program and take an exam without providing teachers or instruction. The consent judgment includes injunctive relief as well as restitution, civil penalties, and fees.
- Louisiana Attorney General Landry announced that his office obtained a permanent injunction against VetAttend Professional Services, LLC and its owners. VetAttend allegedly operated a VA benefit consulting and management practice without accreditation and a home care business without a license, while misrepresenting its qualifications and requiring veterans to sign three-year contracts to use its home care services in exchange for submitting their claims for benefits.
- Georgia Attorney General Carr announced a settlement with locksmith company King David Business Services, LLC and its owner for unfair and deceptive practices such as misrepresenting prices and the time within which the company would arrive to perform services. The settlement requires the company to pay $250,000 in civil penalties in addition to restitution.
- California Attorney General Becerra issued a statement about the fact that the U.S. Supreme Court will review First Amendment challenges to California’s charitable donor reporting law in Americans for Prosperity Foundation v. Becerra and Thomas More Law Center v. Becerra. In connection with the case, Attorney General Becerra stated, “California’s donor reporting rules simply require charities to provide the state, on a confidential basis, the same information about major donors that they already provide to the federal government. This information helps the state protect consumers from fraud and the misuse of their charitable contributions. We look forward to defending our rules before the Supreme Court.”
Saturday, January 9, 2021:
Privacy | Data Breach
- Indiana Attorney General Hill asked Governor Holcomb to adopt a safe harbor rule which would incentivize businesses to undergo strong data protection measures. Under the rule, those companies that voluntarily adopt certain protection measures would be given favorable consideration in the event of a data breach. Governor Holcomb rejected an earlier version of the rule on December 10, 2020, but the press release states that the rule has been further amended and asks Governor Holcomb to reconsider.
Each week, Crowell & Moring’s State Attorneys General team highlights significant actions that State AG’s have taken. Here are this week’s updates.
Monday, December 28, 2020:
Privacy | Data Breach
- Attorneys general from Kentucky, Connecticut, Indiana, Michigan, New Jersey, New York, and Oregon announced a $2 million settlement with CafePress, LLC for a 2019 data security breach exposing about 22 million consumers’ personal information. Under the settlement, $750,000 will be divided among the states immediately, with the remaining $1,250,000 payment suspended. The settlement also includes provisions intended to bolster CafePress’ data security program and better protect consumers’ information in the future.
- A coalition of 23 attorneys general filed an amicus brief in FCC v. Prometheus Radio Project before the Supreme Court, arguing against the Federal Communications Commission’s (“FCC”) repeal of rules that were designed to encourage diversity and local ownership in broadcast media. The coalition is arguing that the new rules the FCC has implemented will decrease representation of minority communities in local media, lead to greater media consolidation, threatening local news coverage, and that the FCC neglected to consider the impact of the rules on diversity in media ownership.
- New York Attorney General James announced that her office has opened an investigation into ParCare Community Health Network for its COVID-19 vaccine distribution. The investigation is in response to allegations that the network wrongfully distributed and administered the vaccines. Attorney General James also warned consumers about scams offering early access to the COVID-19 vaccine, stating that there is no distribution schedule yet for the general population.
Tuesday, December 29, 2020:
- California Attorney General Becerra sued Pacific American Fish Company, Rhee Bros, Seaquest Seafood Corporation, Jayone Foods, and Clearwater Seafoods, a group of seafood importers, distributors, and wholesalers, for allegedly violating Proposition 65 and California’s Unfair Competition Law by selling seafood containing lead and cadmium without warnings required by Proposition 65. In connection with the lawsuit, Attorney General Becerra stated, “When California’s consumers, restaurants, and supermarkets purchase seafood, they shouldn’t have to worry about whether the products they’re buying contain toxic chemicals. The seafood industry has a responsibility to ensure the safety of its products – and to warn consumers of any risks. I hope this lawsuit serves as a warning to any company that might skirt its responsibilities under Proposition 65. The California Department of Justice will hold you accountable.”
- It was announced that on December 14, 2020, a federal advisory committee including Michigan Attorney General Nessel’s office issued recommendations to the Federal Communications Commission on how state and federal government, hospitals, and the telecom industry can prevent illegal robocalls from disrupting hospitals. The recommendations focus on collective efforts and include best practices such as hospital staff education, new government policies, and telecom carrier monitoring.
- Vermont Attorney General Donovan announced a settlement with Chittenden Solid Waste District (“CSWD”) under which the company must pay more than $400,000 for its disposal of recyclable processed glass. CSWD must also post information on its website about what happens to the glass that is sent to it for recycling.
- New Jersey Attorney General Grewal announced additional actions by the New Jersey Bureau of Securities in its investigation of First Standard Financial Company, LLC, a broker-dealer whose agents allegedly defrauded customers in an excessive trading scheme. First Share has already agreed to relinquish about $400,000 of its liquid assets in order to provide restitution, and on December 29, 2020, the Bureau announced that it revoked the registration of and assessed civil penalties against two more agents who participated in the scheme, including the firm’s primary agent.
- Virginia Attorney General Herring issued an opinion concluding that universities and state agencies in Virginia may require government contractors to pay their employees a living wage, or at least to pay them a wage above the state and federal minimum wage. The opinion states, “It is my opinion that the Procurement Act provides public bodies with the discretion to determine whether it is appropriate to include in a solicitation the requirement that a successful bidder or offeror pay its employees or contract workers a minimum wage or a living wage, other than the wage levels required by federal and state law. Ample evidence exists to show that a living wage requirement can improve the quality of goods or services obtained by a public body.”
Environment and Energy
- California Attorney General Becerra led a coalition of 15 attorneys general and New York City in a lawsuit challenging the Department of Energy’s final rule which undermines existing energy efficiency standards for residential dishwashers by exempting a class of dishwashers from these standards. The coalition is arguing that the rule violates the Administrative Procedure Act, Energy Policy Conservation Act, and National Environmental Policy Act.
Wednesday, December 30, 2020
- Washington Attorney General Ferguson announced that music travel company Voyageurs International must pay over $464,000 in consumer refunds for students who signed up for 2020 European tours, after the company illegally charged cancellation penalties and retained fees from students. Voyageurs allegedly told students it could not recoup its losses when it could actually recoup more than 60%, violating the Washington Consumer Protection Act and the Sellers of Travel Act. The press release states, “Where a travel agency like Voyageurs cancels a consumer’s travel, Washington law allows the travel agency to recoup its losses by charging consumers cancellation penalties if the company was appropriately transparent with the consumer about the potential for those penalties. When the travel agency cancels, the law prohibits travel agencies from charging cancellation penalties greater than those the company incurs from its third-party vendors — such as airlines or hotels. Voyageurs failed to lawfully disclose the risk of penalties and illegally charged consumers penalties greater than what the company incurred from its vendors.”
- Virginia Attorney General Herring announced that under a new law, HB5068, the $600 economic relief payments will be exempt from garnishment. According to the press release, “The bill exempts state and federal emergency relief payments from garnishment, attachment, and other legal creditor process seizures. It included an emergency clause ensuring it went into effect immediately upon Gov. Northam’s signature.”
- Minnesota Attorney General Ellison announced that his office filed a lawsuit against Carlson Event Center, which advertised a New Years Eve Bash in violation of Governor Walz’s Executive Order 20-99, which required venues hosting indoor entertainment to close until January 10, 2021. The lawsuit seeks injunctive and declaratory relief, restitution, disgorgement, damages, and civil penalties.
- New Jersey Attorney General Grewal announced that the Division of Alcoholic Beverage Control issued charges seeking to suspend 12 New Jersey bars and restaurants’ liquor licenses for violating COVID-19 executive orders. Among other things, the businesses violated the orders when they allowed patrons to be served while standing and failed to enforce social distancing and face covering requirements.
Financial Services | Consumer Financial Protection Bureau
- The Consumer Financial Protection Bureau (“CFPB”) issued a consent order against military lending company Omni Financial of Nevada, Inc. for violating the Military Lending Act, Electronic Fund Transfer Act, and Consumer Financial Protection Act of 2010 with its installment loans. Omni allegedly violated these laws by requiring repayment by allotment for borrowers covered under the Military Lending Act and by requiring that consumers allow it to withdraw funds from their bank accounts. The CFPB’s consent order requires Omni to pay a $2.175 million penalty and includes injunctive relief, as well as requires the implementation of new employee training policies and consumer notice.
Thursday, December 31, 2020
- New York Attorney General James and Governor Cuomo announced that New York would renew for the ninth time its halting of the collection of medical and student debt owed to the state that has been referred to the Office of the Attorney General (“OAG”) for collection. The OAG’s debt collection pause has been renewed until January 31, 2021. In addition, the OAG will also accept applications for suspension of other dept types owed to New York and referred to the OAG for collection.
- Several attorneys general, including New York Attorney General James and Virginia Attorney General Herring, released annual reports of key actions they took as Attorney General in 2020. These reports highlight, among other things, the antitrust actions against Facebook and Google.
Monday, Dec. 21, 2020:
- Maryland Attorney General Frosh announced a settlement with the owners of Accurate Optical, a company that operated a chain of eye care and eyewear providers that are now closed. The settlement, which comes after consumer complaints of not receiving eyewear they purchased or refunds, requires the owners to stop selling goods they cannot deliver and to pay back all money collected for eyewear that was not provided.
- Massachusetts Attorney General Healey issued an advisory about consumers’ and dental practices’ rights and responsibilities for COVID-19 related surcharges. The advisory explains that when consumers see a dentist within their insurance network, the contract between the insurer and practice typically prohibits surcharges. However, when surcharges for PPE are allowed, such as when the dentist is out of network or the consumer is uninsured, the dental practice must provide advance notice of the surcharge.
- Maryland Attorney General Frosh warned consumers of illegal unlicensed pop-up COVID-19 testing sites outside of stores and shopping centers and along the road. According to the press release, “These testing sites are not authorized and the individuals operating them are not following CDC guidelines for collecting, handling, and testing clinical specimens from persons for COVID-19, and they could be placing consumers at risk.”
- The Governors of Massachusetts, Connecticut, and Rhode Island and the Mayor of Washington, D.C. signed a Memorandum of Understanding committing to a multistate motor vehicle pollution reduction program. The new program, called the Transportation and Climate Initiative Program, will allow the participating jurisdictions to invest in cleaner, equitable transportation options and create new employment opportunities while improving public health.
- The Michigan Attorney General’s Office signed an Assurance of Voluntary Compliance (“AVC”) with Smokehouse Distribution for alleged price gouging of face masks on the BeamerSmoke website. The AVC requires Smokehouse Distribution to refund consumers who purchased the excessively priced PPE as well as to stop selling masks for COVID-19 purposes and pay a $2,000 fee to cover costs.
- Vermont Attorney General Donovan announced a settlement with Big Brother Security Programs, Inc. for overpriced surgical masks sold to Central Vermont Medical Center (“CVMC”). Among other provisions, the settlement requires the business to provide almost 80,000 units of PPE to CVMC and 10,000 units to the state. In connection with the settlement, Attorney General Donovan stated, “Price-gouging will not be tolerated in Vermont, especially during this historic pandemic. Protecting Vermonters, especially hospitals and medical professionals, from unfair practices involving medical equipment will remain a top priority for my office. I will continue to do all that I can to protect the Vermonters on the front lines of this pandemic so that they can continue to protect us.”
- The Minnesota Attorney General’s Office filed three more lawsuits against restaurants that were operating indoor dining in violation of Executive Order 20-103, which ordered all restaurants to close for indoor on-premises dining until January 10, 2021.
Tuesday, Dec. 21, 2020:
Financial Services | Consumer Financial Protection Bureau
- The Consumer Financial Protection Bureau (“CFPB”) settled with student loan servicers Discover Bank, The Student Loan Corporation, and Discover Products, Inc. for violations of a prior CFPB order, the Electronic Fund Transfer Act, and the Consumer Financial Protection Act of 2010 by, among other things, misrepresenting the minimum loan payments owed as well as the amount of interest paid, not providing all consumer redress required in the prior order, withdrawing payments without authorization, and cancelling or not withdrawing payments without notification. The consent order includes injunctive relief as well as $10 million in consumer redress and a $25 million civil penalty.
- The Consumer Financial Protection Bureau (“CFPB”) issued a consent order against Santander Consumer USA Inc., a nonprime auto loan and lease originator and servicer, for violating the Fair Credit Reporting Act by providing incorrect consumer loan data to consumer reporting agencies in a way where consumers’ credit scores and access to credit could have been negatively impacted. The consent order imposes a $4,750,000 civil penalty and requires the company to take steps to prevent future violations.
- A proposed class action lawsuit is accusing debt collection agency Nationwide Recovery Systems of making unsolicited robocalls, violating the Telephone Consumer Protection Act (“TCPA”). The potential named plaintiff is accusing the agency of calling at least 40 times since fall of 2020, changing the balance of the debt owed with each call. The proposed class is alleging violations of the Florida Consumer Collection Practices Act and Fair Debt Collection Practices Act in addition to the TCPA and is seeking statutory damages, actual damages, and fees and costs.
Wednesday, Dec. 23, 2020:
- Vermont Attorney General Donovan announced that his office reached a $150,000 settlement with TPB International, LLC, which operates vaporfi.com, for violating Vermont’s Consumer Protection Act and its Delivery Sales Ban by selling vaping products to individual consumers. In addition to the monetary penalty, TPB must notify Vermont consumers that the website does not ship to anyone other than licensed wholesaler dealers and retailers. Similarly, Washington Attorney General Ferguson announced that online tobacco retailer Smoker’s Outlet Online must pay $65,885 for illegally sending tobacco products to individuals in Washington state rather than licensed retailers or wholesalers.
- North Dakota Attorney General Stenehjem issued a cease and desist order against Sports Media Marketing for violating the state consumer fraud law, do not call law, and charitable solicitations laws. Sports Media Marketing, which uses several other business names, allegedly made calls to local merchants falsely claiming to represent a local high school and solicited donations and sales. Then the business failed to deliver the promised promotional cups and banners.
- Ohio Attorney General Yost filed two lawsuits against home improvement contractors. One lawsuit was against Roofless General Contracting LLC and Gutter and Downspouts LLC for allegedly failing to provide the services promised and paid for, and the other was against an individual for using fraudulent business name Tunison Construction and failing to complete projects and honor warranties.
Privacy | Data Breach
- 27 attorneys general entered into a $2.4 million settlement with Sabre Corporation, a business which facilitates hotel reservation bookings. The settlement resolves an investigation into a 2017 data breach of Sabre’s reservation system, which exposed information from 1.3 million credit cards. In addition to the monetary element, the settlement requires Sabre to put in place a robust information security program, a written incident response and notification plan, and specific security requirements, as well as to undergo a third-party security assessment and provide a list of all customers notified of the breach.
- A coalition of 12 attorneys general is supporting the challenge against the Keystone XL Pipeline in an amicus brief filed in the Ninth Circuit. The coalition is arguing that the United States Army Corps of Engineers’ decision to reauthorize Nationwide Permit 12, which allows the construction of the Pipeline, is invalid because the Corps did not consult the U.S. Fish and Wildlife Service and the National Marine Fisheries Service as the Endangered Species Act requires before reissuing the permit.
Friday, December 11, 2020:
- California Attorney General Becerra announced that California is joining the DOJ in the antitrust lawsuit against Google, which alleges that Google entered into exclusionary business agreements in order to illegally maintain its monopoly on search-based advertising and internet searches at consumers’ expense. California’s motion to join the lawsuit is here.
Monday, December 14:
- Several attorneys general, the Federal Trade Commission (“FTC”) and other federal, state and local law enforcement entities announced “Operation Income Illusion,” which will target scams across the U.S. that involve false promises of income and financial independence. According to the press release, “the crackdown encompasses more than 50 law enforcement actions against the operators of work-from-home and employment scams, pyramid schemes, investment scams, bogus coaching courses and other schemes that can end up costing consumers thousands of dollars.”
- Indiana Attorney General Hill announced the resolution of a case against a Florida-based abortion clinic for falsely claiming that it operated abortion services in Indiana. The company has entered into an Assurance of Voluntary Compliance with the Attorney General’s Office, requiring it to cease advertisements that reference Indiana abortion clinic locations and to cease claiming affiliations it does not actually have with Indiana abortion clinics.
- A bipartisan coalition of 51 attorneys general is asking Congress in a letter addressed to the House and Senate Judiciary Committees to pass legislation that will protect the safety of federal judges and their families. The bill the attorneys general are supporting, the Daniel Anderl Judicial Security and Privacy Act, would protect confidentiality of personal identifying information and limit the distribution of that information.
- A bipartisan coalition of 29 attorneys general is urging the U.S. Department of Health and Human Services (“HHS”) in a letter to hold drug makers accountable for illegally refusing to provide discounts to qualified health providers that serve vulnerable populations through the 340B Drug Pricing Program.
Wednesday, December 16:
- Texas Attorney General Paxton led a multistate coalition in a lawsuit against Google for alleged violations of federal and state antitrust and consumer protection laws through its monopolization of online display advertising. The complaint alleges that Google attempted to or did monopolize products and services advertisers and publishers use in online display advertising as well as engaged in false and deceptive acts while buying, selling, and auctioning online display ads.
- Pennsylvania Attorney General Shapiro announced that his office shut down an illegal student loan forgiveness scheme by Student Education Center (“SEC”). Under the settlement, the company is required to cease operating in Pennsylvania, refund $74,000 to consumers, and pay $50,000 in costs and penalties. The company allegedly used false advertising and posted fraudulent reviews as well as stated that once a consumer was approved they were set up with a new servicer when in fact SEC did not typically change a consumer’s servicer and was not itself a servicer. SEC also tricked consumers into paying high fees to enroll into Income Driven Plans which are free to enroll in.
- North Carolina Attorney General Stein and Florida Attorney General Moody announced that a bipartisan group of Attorneys General secured over $10 million from Royal Pharmaceuticals LLC and Seton Pharmaceuticals LLC after an investigation into these companies’ underpaid Medicaid drug rebates across the U.S. from 2013 to 2017.
Thursday, December 17:
- An executive committee of attorneys general from Arizona, Colorado, Iowa, Nebraska, New York, North Carolina, Tennessee, and Ohio co-led a bipartisan coalition of 38 attorneys general in suing Google for alleged anticompetitive conduct to maintain its monopoly control over the general search services and search advertising markets. The attorneys general accuse Google of depriving consumers of competition which would have led to greater innovation and choice and better privacy protections, and well as of using its market position to accumulate and leverage data to consumers’ detriment in an attempt to make a profit.
- A coalition of 19 attorneys general has filed an amicus brief in Syracuse v. ATF in the Southern District of New York urging the Bureau of Alcohol, Tobacco, Firearms and Explosives (“ATF”) to properly regulate “ghost guns.” The attorneys general are arguing that the ATF’s 2015 interpretation of the Gun Control Act was illegal and incorrect and allowed unlicensed online sellers to sell almost-complete firearms that can easily be converted into functional guns, which endanger the public and impede law enforcement’s investigative and prosecutorial abilities.
Friday, December 18:
- Seven attorneys general reached a $2 million settlement with CafePress, an online seller of stock and user-customized products. The settlement, which resolves a 2019 data breach which compromised 22 million consumers’ personal information, requires CafePress to pay $2 million to Indiana, New York, Connecticut, Kentucky, Michigan, New Jersey, and Oregon, as well as agree to protocols designed to protect consumer information from cyberattacks, including information security programs, notification programs, and other safeguards.
- Colorado Attorney General Weiser announced he is working with Ticketmaster, LiveNation, and event organizer Kroenke Sports & Entertainment to ensure Colorado consumers receive refunds for events that were canceled due to the pandemic.
- Minnesota Attorney General Ellison announced that his office filed two lawsuits against restaurants that were operating inside dining in violation of Governor Walz’s executive order prohibiting this conduct. The lawsuits seek declaratory and injunctive relief as well as civil penalties of up to $25,000 per violation or threatened violation of the executive order, costs, restitution, and disgorgement.
Saturday, December 19:
- New Jersey Attorney General Grewal filed a lawsuit against service animal charity Merlin’s Kids and related for-profit company United K9 Professional Inc. as well as their owner for unlawfully raising millions of dollars since 2008 without registering Merlin’s Kids as a charity. The entities’ fundraising also allegedly included false and misleading claims about the services Merlin’s Kids offers, and the entities and their owner allegedly charged consumers for dog training and certification programs they did not ultimately provide.
Monday, December 7, 2020:
- A coalition of 51 attorneys general, state mortgage regulators, and the Consumer Financial Protection Bureau reached an $86.3 million settlement with mortgage servicer Mr. Cooper, formerly known as Nationstar Mortgage Holding, Inc., which provides $79.2 million in restitution for those who took out 55,814 loans across the U.S. between January 1, 2011 and December 31, 2017. The settlement resolves allegations of consumer protection violations, such as that the company did not properly oversee or implement transferred mortgage loans or properly identify loans with pending loan modification applications, and that it failed to adequately review borrower complaints.
- Washington Attorney General Ferguson issued a press release with guidance for third-party restaurant delivery services in response to consumer complaints. The guidance highlights conduct that is likely to violate the Washington Consumer Protection Act, such as charging consumers fees without clearly and conspicuously disclosing them, listing restaurants without their permission, misrepresenting the source of food or safety precautions, or listing fake contact information for restaurants. It is also a violation to charge more than 18% of the order price in fees, up to 15% of which may be delivery fees, after a November emergency proclamation.
- New York Attorney General James announced that her office secured $4.7 million from supermarket chain Food World for an alleged tax avoidance scheme where the company underreported cash sales, issued fake merchandise returns, and paid its employees off the books.
- A bipartisan coalition of 30 attorneys general wrote an amicus brief in AMG Capital Management v. FTC before the Supreme Court, arguing in support of the FTC’s ability to recover money from defendants for victims and saying this restitution collecting authority is essential to deter illegal conduct and help states protect consumers. The brief is available here.
Tuesday, December 8, 2020
- Washington Attorney General Ferguson announced that Washington’s top magazine subscription company Synapse Group must return the money it charged over 2,000 consumers for deceptive auto-renewals after they bought magazine subscriptions at a $2 promotional rate. Synapse must refund the consumers around $125,000 and also pay $750,000 to the Attorney General’s Office.
- New Jersey Attorney General Grewal announced a lawsuit against Yellowstone Capital LLC, its parent company Fundry.US LLC, and six associated merchant cash advance providers, alleging these companies targeted small businesses with predatory lending and abusive collection practices that caused financial harm. These alleged practices included, among other things, aggressive collection calls, unauthorized withdrawals, excessive interest rates, failing to disclose all fees, and advertising “No Personal Guarantee” when one was actually required. The complaint seeks injunctive relief, restitution, disgorgement, and civil penalties.
- Massachusetts Attorney General Healey announced a lawsuit against HealthMarkets, Inc. and its subsidiaries The Chesapeake Life Insurance Company and Insphere Insurance Solutions, Inc. alleging that the companies misled consumers into purchasing supplemental health insurance products they did not want, cheating over 15,000 residents out of over $43.5 million since 2011. The complaint seeks injunctive relief, restitution, civil penalties, and attorneys’ fees and costs.
- Indiana Attorney General Hill announced a settlement with Blue Lake Inc., the former owner of a mobile home park, for 2019 conduct that forced residents out of their homes when the park closed with no way to legally move since they were never given titles. The settlement includes a $29,000 suspended judgment and injunctive relief.
- Missouri Attorney General Schmitt announced a default judgment against Hammond Floors and Construction, which allegedly violated the Missouri Merchandising Practices Act by receiving upfront payments for real estate, construction services, and residential appliances and failing to provide the promised items and services. The judgment includes injunctive relief as well as an award of $43,280.77, including $24,800 in restitution and $19,020.77 in costs, fees, and penalties.
- Kentucky Attorney General Cameron led a 12-state bipartisan coalition of attorneys general in an amicus brief asking a California District Court to reject a request for $87.73 million in attorneys’ fees for class counsel in the Apple throttling settlement. The coalition is joining Apple in arguing that the amount is excessive and will reduce the recovery available to class members.
Wednesday, December 9, 2020
- Iowa Attorney General Miller is warning consumers to be on alert for scams related to their Amazon accounts. For example, Attorney General Miller is advising consumers not to respond to calls asking them to confirm Amazon purchases, not to call the customer service number given in an unsolicited email or call, and not to respond to messages asking if they have an Amazon account or asking them to pay in Amazon gift cards.
December 10, 2020
- Virginia Attorney General Herring intervened in lawsuit Grano v. Rappahannock Electric Cooperative, defending Virginia’s new policies which make it easier to expand broadband into rural areas using “easements for the location and use of electric and communications facilities.”
- Virginia Attorney General Herring spoke about the importance of legal cannabis use in Virginia as part of summit “Legalize It: The Path to Cannabis Equity in Virginia,” discussing his office’s unique role in helping with the cannabis legalization process. He stated that his office “has been charged with protecting consumers and the knowledge that role brings can be leveraged to make sure that the industry is safe through proper regulations, make sure that products are being advertised accurately, and make sure that Virginians know what they are getting” as well as noted that his “role as counsel to state agencies will also benefit and guide any new agencies that are created to handle the cannabis industry.”
- The Consumer Financial Protection Bureau (“CFPB”) issued final rules related to qualified mortgage (“QM”) loans. To issue QM loans, lenders must determine that consumers are able to repay them. The two CFPB rules related to QM loans (1) replace the current requirement that the consumer’s debt-to-income ratio does not exceed 43%, limited based on the loan’s pricing, and (2) create a new category for QMs, Seasoned QMs, for which a loan “must be a first-lien, fixed-rate loan with no balloon payments and must meet certain other product restrictions.” These two rules will take effect 60 days after their publication in the Federal Register.
Tuesday, December 1, 2020
- Washington DC Attorney General Racine announced a settlement with waste disposal company Bates Trucking Co. Inc., requiring the company to pay $78,702 for illegally collecting garbage in residential neighborhoods. The company allegedly collected trash before 7:00 a.m., violating DC noise regulations, operated without a valid license, ignored enforcement notices from the Department of Consumer and Regulatory Affairs, and refused to pay fines.
- New York Attorney General James announced the adoption of final rules that modernize securities registration and filing with her Office’s Investor Protection Bureau. The press release states that these rules, which will be implemented in 2021, will “streamline and enhance the oversight of the securities industry in New York by moving filings and payments to standardized federal and multi-state systems” and that they “will better conform to the federal securities registration regime, cure industry confusion when it comes to certain registration requirements, and better track exam requirement compliance and disciplinary disclosures for thousands of investment advisers who provide investment advice to New Yorkers.”
- Several attorneys general released advisory press releases about charitable giving for Giving Tuesday, warning consumers against deceptive solicitations. California Attorney General Becerra’s, which tells consumers to take steps such as checking organizations’ registration status, being cautious of fraudulent websites, and being wary of fundraising on social network websites, is here. Texas attorney General Paxton’s, which tells consumers to research organizations, be careful when actually making the donations, and being cautious of scammers’ tricks, is here.
- A coalition of 23 attorneys general filed a comment letter asking the Department of Education to reject the Accrediting Council for Independent Colleges and Schools’ (“ACICS”) request to regain its federal recognition. The coalition is arguing that ACICS’s institutional failures and its lack of compliance with federal regulations have enabled predatory schools, like ITT Tech, to impose crushing student loan debt on students across the U.S.
- The Consumer Financial Protection Bureau (“CFPB”) filed a lawsuit against DMB Financial, LLC, a debt-settlement and debt-relief company, for allegedly violating the Telemarketing Sales Rule and the Consumer Financial Protection Act of 2010 in connection with its services. Among other things, DMB allegedly requested and received fees before it performed its services and before consumers started payments under debt settlements, as well as collected fees based on increased debt amounts after enrollment rather than the amount of debt at the time of enrollment. The CFPB’s complaint seeks injunctive relief, restitution, disgorgement, and civil penalties.
Thursday, December 3, 2020
- Arizona Attorney General Brnovich announced his office filed a lawsuit against auction companies Auction Nation, LLC and Auction Yard, LLC and their principals for allegedly deceiving online bidders by bidding in their own auctions, deceptively driving up prices when the terms and conditions assured participants that the business was not involved in the auctions. The lawsuit “seeks consumer restitution, up to $10,000 in civil penalties for each violation of the Arizona Consumer Fraud Act, injunctive relief, and attorney’s fees and costs.”
- Pennsylvania Attorney General Shapiro announced an Allegheny County Common Pleas Court order directing Vision Property Management tenants to stop paying rent and other amounts payable under their contracts because the company failed to place a portion of consumer rent money into escrow as a prior injunctive order required. The injunctive order came from allegations that Vision Properties was luring consumers into “rent to own” agreements on poorly maintained and foreclosed homes, failing to tell consumers that the agreements provided no ownership rights unless consumers exercised an overpriced option, illegally forcing consumers to make repairs to make their homes habitable, and immediately ejecting those who fell behind on payments.
- Washington DC Attorney General Racine became the 2021 President of the National Association of Attorneys General (“NAAG”) and announced his initiative to counter hate across the U.S. According to the press release, the initiative “aims to work with Attorneys General to raise awareness of hate and bias, prevent hate from taking root in our communities, support residents who have experienced hate, and develop and share best practices on improving hate crime data.”
Friday, December 4, 2020
- The FTC and the California, Illinois, North Carolina, and Ohio Attorneys General settled with Dish Network in a $210 million settlement, ending an 11-year legal dispute over the company’s alleged violation of telemarketing laws through unwanted telemarketing and robocalls, including calls to those registered on the Do Not Call registry. The settlement is here.
- New Hampshire Attorney General MacDonald announced that Camps for Grownups, LTD, a company that manages and markets adult activity camps, was indicted by the New Hampshire Multicounty Grand Jury on a felony count of violating the New Hampshire Consumer Protection Act. The company allegedly deceptively marketed a Jazz Camp as though it would occur as scheduled though the company lacked sufficient funds or a reasonable anticipated source of funding to hold the camp. If found guilty, the company could face an up to $100,000 fine.
- New Jersey Attorney General Grewal announced that New Jersey’s Bureau of Securities within the Division of Consumer Affairs issued a cease and desist order against an online investment scheme targeting LinkedIn users. The scheme, which was led by online companies VertexTrade Options, Zolarex Ltd., and IBPC Corp., allegedly violated New Jersey securities law by using fake social media profiles in order to obtain investments in fraudulent financial products. The press release also warns New Jersey residents against “investment opportunity” scams offered on social networking and dating websites.
- New York Attorney General James led a coalition of 13 attorney generals in a letter urging Congress to allocate funding and codify coverage protections so that it is guaranteed all people in the U.S. are able to obtain a COVID-19 vaccine for free.
- The Consumer Financial Protection Bureau (“CFPB”) sued online lender LendUp Loans, LLC for allegedly violating the Military Lending Act with its extensions of credit. LendUp allegedly overcharged borrowers covered by the Military Lending Act, which caps total costs at 36%, as well as failed to make the loan disclosures the Military Lending Act requires and illegally required borrowers to submit to arbitration agreements. The CFPB’s complaint, which alleges that LendUp made over 4,000 loans in violation of the Military Lending Act since 2016, seeks injunctive relief, damages, restitution, disgorgement, and civil penalties.
Sunday, December 6, 2020
- President-elect Biden has selected California Attorney General Becerra to serve as Secretary of Health and Human Services in Biden’s administration. If Becerra is confirmed, California Governor Newsom will choose a new Attorney General to fill his position until the next election.
On December 2, 2020, the Maine Office of the Attorney General announced that Aaron M. Frey was re-elected by a joint convention of the Maine Legislature to a second two-year term.
Following the election, Attorney General Frey issued a statement in which he identified issues he will focus on during this term,
“As Attorney General, I am sworn to defend the Constitution and to ensure that the rule of law is protected. I also will continue to work with the Legislature and the Mills administration to ensure that our state does everything in its power to address the pandemic, to combat the opioid crisis and obtain accountability for opioid manufacturers, to engage productively in the process of creating substantial reforms in the states relationship with Maine’s tribal nations, and to find meaningful ways to make our criminal justice system more equitable.”