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

Monday, September 6, 2021

Federal Firearm Regulations

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

 Religious Charity’s Liberty to Hire

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

 Tuesday, September 7, 2021

Consumer Financial Protection Bureau

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

Consumer Protection

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

Fair Chance in Housing Act

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

Healthcare – Interim Final Rule

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

Wednesday, September 8, 2021

Consumer Financial Protection Bureau

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

Deceptive Claims

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

National Association of Attorneys General 2021 Robocall Virtual Summit

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

Price Gouging

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

Thursday, September 9, 2021

 Consumer Protection

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

Environmental – Anti-Idling Law

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

Fraud Schemes

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

Labor and Employment 

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

Friday, September 10, 2021

Consumer Protection

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

Healthcare – Hospital Pricing Transparency

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

Telephone Consumer Protection Act

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

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

Monday, August 30, 2021

Healthcare Insurance

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

Tuesday, August 31, 2021

Consumer Protection

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

Criminal Fraud – False Representations for a Government Contract

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

Medicaid Fraud

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

Price Gouging

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

Wednesday, September 1, 2021

Fraud Scheme

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

Labor and Employment

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

Online Charitable Fundraising – AB 488

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

Thursday, September 2, 2021

Immigration

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

Labor and Employment – Gig Economy

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

Online Charitable Fundraising – AB 488

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

Friday, September 3, 2021

First Step Act – Sentencing Reform

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

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

Monday, August 23, 2021

Medicaid Fraud

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

Price Gouging

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

 Tuesday, August 24, 2021

Consumer Protection

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

Cybersecurity

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

Preventing Youth Vaping Act / Senate Bill 512

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

Wednesday, August 25, 2021

Cannabis

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

Climate Change – State Law Violations

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

Fair Housing

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

Human Trafficking Awareness

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

Medicaid Fraud

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

Thursday, August 26, 2021

Consumer Protection – House Bill 2746

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

Healthcare – Illegal Non-Competes

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

Price Gouging

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

Friday, August 27, 2021

Bankruptcy Court

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

Consumer Protection

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

Healthcare – Anti-Competitive Practices

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

Public Accommodations Law – Anti-Discrimination

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

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

Monday, August 16, 2021

Airlines

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

Criminal Fraud

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

 Tuesday, August 17, 2021

Consumer Financial Protection Bureau

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

Consumer Protection

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

Healthcare Fraud – Federal Trade Commission and GA Attorney General

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

Medicaid Fraud

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

Public Safety

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

Wednesday, August 18, 2021

 Consumer Protection

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

Deceptive Claims

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

Environmental

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

Fraud Schemes

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

Price Gouging

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

U.S. Food and Drug Administration 

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

Thursday, August 19, 2021

Labor and Employment

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

Medicaid Fraud 

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

Price Gouging

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

 Friday, August 20, 2021

Cybersecurity

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

Fraud Scheme

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

Intellectual Property – Patent Trolls

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

Medicaid Fraud

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

Tax Evasion Scheme

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

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

Monday, August 9, 2021

Consumer Fraud Act

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

Federal Communications Commission

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

Tuesday, August 10, 2021

Deceptive Claims

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

Wednesday, August 11, 2021

Elder Abuse and Fraud / Door-to-Door Sales

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

Labor and Employment

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

Medicaid Fraud

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

Predatory Practices

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

Thursday, August 12, 2021

Fair Debt Collection Practices Act

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

Financial Misconduct – Illegal Bookmaking

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

Labor and Employment

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

Friday, August 13, 2021

Fraud Schemes

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

Labor and Employment

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

Medicaid Fraud

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

Price Gouging

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

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

Monday, August 2, 2021

Consumer Protection

  • Arizona Attorney General Brnovich announced a program in partnership with the Arizona Food Marketing Alliance and public utilities to combat utility gift card scams through the placement warning signs at gift card displays in state grocery and convenience stores. The signs are geared towards ending scams whereby callers pressure consumers to pay utility bills using pre-paid gift cards.

Housing

  • Pennsylvania Attorney General Shapiro announced that his office obtained $500,000 in restitution from Harbour Portfolio Capital, LLC and its founder for allegedly deceiving consumers into entering into unfair and illegal purchases of uninhabitable homes at illegally high interest rates. The agreement also requires the business not to conduct any future residential real estate transactions in the state.

Tuesday, August 3, 2021

California Air Resources Board

  • California Attorney General Bonta announced a $2.38 million settlement against trucking operator Complete Logistics Company, LLC, resolving allegations that it falsely claimed it was complying with state emissions regulations in order to obtain $2.2 million in state grants for the purchase of new trucks.

Consumer Protection

  • Vermont Attorney General Donovan announced that his office reached settlements with three online electronic cigarette sellers, resolving claims that they violated Vermont law by selling electronic cigarettes to individual consumers. The companies must pay $165,000 in civil penalties to the state under the settlements.
  • A bipartisan coalition of 25 attorneys general sent a letter to the National Council for State Authorization Reciprocity Agreements (“NC-SARA”), asking it to create more forceful consumer protection policies for students enrolled in distance education courses that its participating institutions are offering. For example, the coalition is asking NC-SARA to create standards against unfair and deceptive admissions and financial aid practices.

Labor and Employment – Criminal Wage Theft

  • Pennsylvania Attorney General Shapiro announced that Glenn O. Hawbaker, Inc. pleaded to and was sentenced for violations of the Pennsylvania Prevailing Wage Act and the federal Davis-Bacon Act through wage theft. The plea includes a requirement that the company pay over $20 million in stolen wages to Pennsylvania employees.

Wednesday, August 4, 2021

Environmental

  • A multistate coalition of attorneys general sent a comment letter to the U.S. Environmental Protection Agency (“EPA”) asking the EPA to repeal or revise a rule limiting state authority under Section 401 of the Clean Water Act. The coalition is arguing that the rule is illegal and that it harms water resources.

Fraud Schemes

  • New York Attorney General James announced the sentencing of an individual for laundering over $1 billion in stolen funds from financial institutions, financing companies, employees, and employers from 2016 to 2019.
  • Arkansas Attorney General Rutledge announced a lawsuit to recover money for Nitrogen Solutions LLC after a scam artist hacked into email correspondence between it and Copper Tip Entergy Services USA LLC and sent fraudulent payment instructions, causing the money to go into a Chase account the scam artist had set up.

Thursday, August 5, 2021

Consumer Protection

  • Connecticut Attorney General Tong sent a letter to Philips Respironics about its June 2021 recall of BiPAP, CPAP, and ventilator devices. Consumers and medical providers have complained that the recall notification does not explain how the company will repair or replace the devices and that the toll-free phone number provided is not leading consumers to individuals knowledgeable about the recall. The letter, which seeks a reply within 10 days, asks the company to explain when the devices will be replaced and whether they will be replaced for free, as well as whether medical equipment suppliers have been told to stop distributing the devices.

Labor and Employment

  • Connecticut Attorney General Tong announced that M&T Bank made a written response to Attorney General Tong’s August 2, 2021 letter about how it will mitigate job losses when it merges with People’s United Bank, after the bank announced that it anticipated layoffs. In the letter, M&T Bank has committed to jobs in Connecticut and its regional headquarters in Bridgeport.

Friday, August 6, 2021

Intellectual Property – Trademark Scams

  • Maine Attorney General Frey issued a warning to businesses in Maine about a scam communicating that businesses’ trademarks are about to expire and asking for a renewal fee or offering to record the trademark in a private registry which actually does not exist in the United States. The warning asks businesses to verify the legitimacy of any notices they receive.

Labor and Employment

  • Minnesota Attorney General Ellison announced that as part of a settlement, restaurant group Bartmann Companies has started paying and will continue to pay over $230,000 to employees to compensate them for failing to pay wages on time and failing to pay overtime wages. The restaurant group has also agreed to a $100,000 civil penalty if it materially violates its obligations to properly pay wages in the next eight years.

Price Gouging

  • North Carolina Attorney General Stein announced a lawsuit against Jack’s In & Out Food Mart for its alleged price gouging of gasoline during the May 2021 state of emergency after the Colonial Pipeline shutdown. The lawsuit accuses the company of increasing gasoline prices by 60% without corresponding cost increases, as well as advertising regular gas when the company was only selling premium. The lawsuit seeks a permanent injunction, civil penalties, restitution, disgorgement, and attorneys’ fees, among other remedies.
  • California Attorney General Bonta issued a consumer alert stating that California’s price gouging law is in effect in Siskiyou, Nevada, and Placer counties during state of emergencies in effect for wildfires.

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

Saturday, July 24, 2021

Price Gouging

  • California Attorney General Bonta issued a consumer alert for Plumas, Butte, Lassen, and Alpine counties, which are under states of emergency due to wildfires, reminding consumers that California’s price gouging law is in effect during a state of emergency.

Monday, July 26, 2021

Americans with Disabilities Act

  • Illinois Attorney General Raoul led a coalition of 18 Attorneys General in asking Congress to pass legislation, The All Stations Accessibility Program Act of 2021, that is intended to give people with disabilities equal access to public transportation. Specifically, the Act would create a federal grant program to support local public transportation authorities so they may upgrade existing stations in order to meet or exceed Americans with Disabilities Act accessibility standards.

Consumer Protection

  • Georgia Attorney General Carr released an overview of Georgia’s top consumer complaints from 2020, based on a Consumer Federation of America report. The top issue in 2020 was debt-related complaints, followed by used car sales and then price gouging and/or state of emergency related concerns. According to the press release, these issues were also among the top 10 nationwide complaints in 2020.

Insurance Fraud

  • New Jersey Acting Attorney General Bruck announced that the owner of real estate improvement company Mulberry Management, L.L.C. was charged with insurance fraud for allegedly making false and misleading statements to the New Jersey Manufacturers Insurance Group to receive lower workers’ compensation premiums.

Tuesday, July 27, 2021

Breach of Agreement

  • Michigan Attorney General Nessel announced that her office reached a consent judgment with car rental company Executive Car Rental, which allegedly breached a March 2019 assurance agreement with her office related to the return of damage deposits. The consent judgment requires the company to pay $17,500, as well as meet its obligations under the assurance agreement. Certain consumers are also protected from paying for damages or other issues.

CFPB

  • The Consumer Financial Protection Bureau (“CFPB”) announced that consumer applications for revolving credit cards, auto loans, and new mortgages have returned to close to pre-pandemic levels as of May 2021. However, there are differences for borrowers with subprime and deep subprime credit scores, whose applications are still down, which the CFPB is monitoring.

False Claims

  • Florida Attorney General Moody announced an agreement with Florida Neurological Center, LLC and its owner for allegedly submitting false claims for unreasonable and medically unnecessary prescription drugs to Florida’s Medicaid program. The agreement requires the company and owner to pay $800,000.

Wednesday, July 28, 2021

CFPB

  • The Consumer Financial Protection Bureau (“CFPB”) announced the launch of the Rental Assistance Finder, which is intended to help renters and landlords who have been impacted by the pandemic to easily apply for federal payment assistance for expenses such as rent and utilities.

False Advertising

  • Florida Attorney General Moody filed a lawsuit against landscaping company Good Neighbor Services and its owners and managers for allegedly failing to provide landscaping and pest control services and misrepresenting the timing and quality of its services through deceptive advertising and statements. The press release notes that the majority of complaints received were from seniors and military service members. The lawsuit seeks to permanently ban the owners and managers from participating in landscaping or pest control services, as well as restitution and up to more than $1.8 million in civil penalties.

Vulnerable Adult Protection

  • South Carolina Attorney General Wilson announced the passage of a new law protecting vulnerable adults, including the elderly, from financial exploitation. Specifically, the law allows financial institutions to delay transactions if there is a reasonable belief that financial exploitation of a vulnerable adult is occurring. During the delay period the Attorney General’s Office and the Department of Social Services may investigate the transaction.

Thursday, July 29, 2021

COVID-19 Fee Cap Statute

  • Massachusetts Attorney General Healey sued Grubhub for allegedly charging illegal fees to Massachusetts restaurants during the COVID-19 pandemic by exceeding a price cap of 15% of an item’s menu price. The lawsuit seeks investigation and prosecution costs, as well as refunds for restaurants and civil penalties of $5,000 per violation.

Department of Education

  • A coalition of Attorneys General filed an amicus brief in the Second Circuit supporting the New York Legal Assistance Group’s (“NYLAG”) lawsuit challenging a Department of Education rule that repealed and replaced “borrower defense” regulations for federal student loan borrowers who are victimized by a school. The coalition is supporting NYLAG’s argument that the regulations should not have been repealed.

Environmental

  • A coalition of Attorneys General led by New York Attorney General James announced an agreement with the U.S. Environmental Protection Agency (“EPA”) that will, if approved, commit the EPA to taking action on “good neighbor” plans from several states to limit the spread of downwind emissions that cause smog.

 Friday, July 30, 2021

CFPB

  • The Consumer Financial Protection Bureau announced that two of its final rules issued under the Fair Debt Collection Practices Act will take effect on November 30, 2021 as planned, rather than being extended until the end of January 2022. The two rules are related to debt-collection communications and disclosures.

Child Tax Credit

  • A coalition of 23 Attorneys General is asking Congress to permanently extend the expanded Child Tax Credit in its reconciliation package in order to address child poverty. The coalition is also asking Congress to provide enough funding to raise public awareness about the credit and to make the sign-up process more streamlined.

Consumer Protection

  • Connecticut Attorney General Tong announced a $400,000 settlement with electric supplier Town Square Energy resolving allegations that the company engaged in deceptive marketing, such as by misrepresenting the standard service rate, enrolling consumers without consent, and soliciting services in the presence of “no trespassing” signs. The settlement also requires the company to stop marketing in person for 15 months.

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

Monday, July 19, 2021

Bankruptcy

  • Nine attorneys general filed a formal objection to Purdue Pharma’s proposed bankruptcy plan, which shields the Sackler family from legal liability. The attorneys general are arguing that bankruptcy courts may not prevent attorneys general from enforcing state laws.

False Claims

  • California Attorney General Bonta announced a settlement with the Prime Healthcare Services system and two of its doctors, resolving allegations that they violated the state and federal False Claims Acts through fraudulent claims and kickbacks. The settlement requires the company and doctors to pay $37.5 million and to implement a compliance program.

Privacy

  • California Attorney General Bonta released a one-year report on the California Consumer Privacy Act, finding that 75% of businesses came into compliance within the 30-day cure period after receiving notice of a violation and the other 25% are either within the 30-day period or under investigation. The press release also announces an online tool giving consumers the ability to directly notify businesses of potential violations, which may trigger the 30-day cure period.

Tuesday, July 20, 2021

Gun Safety Reform

  • Washington D.C. Attorney General Racine issued a statement about violent crime in the District, including a call for a comprehensive plan for reform in areas such as gun safety, violence interruption programs, and criminal justice.

Labor & Employment

  • Louisiana Attorney General Landry announced the arrests of several individuals accused of stealing more than $1 million in unemployment benefits through the filing of fraudulent claims.

Law Enforcement

  • Pennsylvania Attorney General Shapiro announced that a doctor was charged with unlawful prescribing of medications outside his legal and ethical practice. For example, the doctor allegedly failed to maintain proper records and failed to perform required check-ups on patients. In connection with the charges, Lancaster County District Attorney Adams stated, “This case is an important reminder that law enforcement leaves no stone unturned when it comes to fighting the opioid epidemic – anyone who is responsible for the crimes contributable to this epidemic will be held accountable.”

Wednesday, July 21, 2021

 Energy

  • Kansas Attorney General Schmidt announced that he petitioned the Kansas Corporation Commission to intervene in upcoming rate hearings for natural gas companies Black Hills Energy, Kansas Gas Service Company, and Atmos Energy Corporation, which are asking to recover costs from consumers for a winter storm.

Thursday, July 22, 2021

 Consumer Protection

  • Florida Attorney General Moody applauded the one year anniversary of her consumer protection program Scams at a Glance, which is an outreach initiative including both a webpage and brochures for those consumers who do not spend as much time online. The webpage and brochures contain information about scams that are common and emerging. The webpage also includes downloadable material in English and Spanish.

Criminal Liability

  • Washington Attorney General Ferguson announced that antique business International Antique & Art Importers Inc., also known as Ming’s Asian Gallery & Antiques, and one of its owners pleaded guilty to a felony count of violating the Washington Animal Trafficking Act, which prohibits selling products made from certain endangered animals, such as elephant ivory. The penalty includes a fine, as well as criminal liability for the owner.

Friday, July 23, 2021

Consumer Protection

  • Washington D.C. Attorney General Racine announced a settlement with car sharing company Getaround, Inc., requiring it to pay $950,000 to the District and restitution to car owners who experienced damage to their cars or theft while they were listed on the platform, as well as to revise its practices. The settlement resolves allegations that the company misrepresented the benefits, safety, and security of its services, operated without a license, and failed to pay sales tax. Among other things, it requires the company to represent limitations of the safety and security of its platform clearly, disclose terms and conditions of vehicle insurance, not misrepresent the ownership of vehicles, and state accurate hours of customer service.

Labor and Employment

  • New York Attorney General James announced a settlement with B&B Hospitality, as well as celebrity chef Mario Batali, Joseph Bastianich, and three of their restaurants, resolving allegations of a hostile work environment. Under the settlement, the company and individuals must pay $600,000 to former employees, revise training materials in all restaurants owned by B&B, and submit biannual reports certifying compliance.

Environmental

  • California Attorney General Bonta filed a lawsuit against the City of Fontana over its approval of the Slover and Oleander Warehouse Project, which would be located in one of the state’s most polluted areas and border a public high school. Attorney General Bonta is arguing that the city only conducted a limited environmental review of the project and failed to analyze, disclose, and mitigate its environmental impacts in violation of the California Environmental Quality Act.

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

Monday, July 12, 2021

CFPB

  • The Consumer Financial Protection Bureau (“CFPB”) issued a consent order against fintech company GreenSky, LLC for allowing contractors and other sellers to take out unauthorized loans on consumers’ behalf. The CFPB’s consent order requires the company to pay a $2.5 million civil penalty, provide up to $9 million in loan cancellations and cash refunds, and use verification practices to prevent future abuses.

Consumer Protection

  • Washington D.C. Attorney General Racine announced new legislation that will strengthen protections for consumers in DC against unfair and abusive debt collection activities. Specifically, the legislation is intended to modernize DC debt collection law by covering medical and credit card debt, increasing penalties, adding the ability to seek punitive damages, clarifying that it applies to debt buyers, and prohibiting harassment, among other things.

Energy

  • Connecticut Attorney General Tong applauded a draft decision by the Public Utilities Regulatory Authority rejecting a $20 million rate increase request by Connecticut Water. Attorney General Tong had previously opposed the rate increase, maintain that it was unnecessary and excessive costs could be eliminated so that a rate increase was not needed.

Environmental

  • A coalition of 16 attorneys general is asking the U.S. Environmental Protection Agency not to reinstate the waiver for California under the Clean Air Act, which previously allowed California to set its own vehicle carbon emissions standards.

Tuesday, July 13, 2021

Financial Misconduct

  • New York Attorney General James announced a settlement with TIAA-CREF Individual & Institutional Services, Inc., which is a subsidiary of the Teachers Insurance and Annuity Association of America, under which the company agreed to pay $97 million in restitution to consumers misled into moving their retirement investments into the company’s higher-fee accounts. The company has also agreed to make internal reforms such as holding rollover recommendations to a higher fiduciary standard and disclosing when advisors are not acting as fiduciaries.

Medicaid Fraud

  • Kentucky Attorney General Cameron announced that Kentucky has joined a multistate settlement with Bristol-Myers Squibb Company for allegedly overcharging Medicaid programs for drugs by underpaying drug rebates. Bristol-Myers has agreed to pay $75 million.
  • New Hampshire Attorney General Formella announced that the owner of home care company Alternative Care @ Home, LLC has agreed to pay $1,000,000 in restitution for submitting Medicaid reimbursement claims for services not provided between 2015 and 2018.

Transportation

  • A coalition of 18 attorneys general co-led by New York Attorney General James and Connecticut Attorney General Tong sent a letter to the National Highway Traffic Safety Administration (“NHTSA”) and the U.S. Department of Transportation asking the agencies to enact more stringent measures to protect children in car seats. Specifically, the letter asks NHTSA to create side-impact testing standards for car seats and to require that all car seat labels include guidance that every child should stay in the same seat until it exceeds the child’s weight or height maximum.

Wednesday, July 14, 2021

Consumer Protection

  • New York Attorney General James announced an arrangement with Greentree Country Club that the club will refund $427,000 to 76 consumers who were denied refunds for events that were cancelled because of COVID-19.

Criminal Fraud Scheme

  • Pennsylvania Attorney General Shapiro announced that his office filed a lawsuit against company PA Certificate Service for scamming businesses in the state by sending letters claiming that they needed to apply for a certificate of good standing, which are optional, and then charging them double the cost for a certificate.

Deceptive Claims

  • Massachusetts Attorney General Healey announced that fuel delivery company Diesel Direct, LLC as well as its chief executive officer and senior vice president must pay $850,000 to resolve allegations that the company knowingly sold nonconforming petroleum diesel fuel to state agencies while charging for a more environmentally friendly fuel. The settlement also resolves accusations that the company failed to comply with diversity spending requirements and requires the company not to participate in state contracts for five years.

Energy

  • Connecticut Attorney General Tong applauded a decision by the Public Utilities Regulatory Authority imposing a $29 million civil penalty against Eversource for failing to meet its obligations to consumers after Tropical Storm Isaias.

Thursday, July 15, 2021

 California Dept. of Justice

  • California Attorney General Bonta announced the creation of the Office of Community Awareness, Response, and Engagement (“CARE”) within California’s Department of Justice. CARE’s goal is to cultivate relationships with historically marginalized and underrepresented communities and to work to meet their needs.

Environmental

  • California Attorney General Bonta and the California Air Resources Board led a multistate coalition in petitioning the Environmental Protection Agency to use its American Innovation and Manufacturing Act authority to create stricter regulations for hydrofluorocarbon emissions.

Financial Misconduct

  • Arizona Attorney General Brnovich announcedthat his office filed a lawsuit against Deed and Note Traders, LLC, 881 Home, LLC, and their manager for allegedly deceiving consumers in real estate transactions by selling homes under a “wrap mortgage” and failing to make payments on the underlying mortgages despite receiving down payments. The companies also allegedly failed to provide title reports and minimum 15-year loan repayment terms. The lawsuit seeks restitution, civil penalties, fees and costs, and the amount owed on a 2006 Consent Decree with the State.

Price Gouging

  • As part of the 2021 hurricane season, Florida Attorney General Moody highlighted Florida’s No Scam Price Gouging Reporting App and that it is available in both English and Spanish. The press release states that the app has been downloaded by over 21,000 consumers and has assisted with over 2,200 price gouging reports.

Friday, July 16, 2021

Education

  • Massachusetts Attorney General Healey applauded that the U.S. Department of Education withdrew its appeal of a federal court order cancelling former Corinthian Colleges, Inc. students’ loans. The Department has agreed to discharge the federal loans of all Massachusetts students covered by Attorney General Healey’s group borrower defense application, setting a validity precedent for state attorneys’ general group discharge applications.

Price Gouging

  • Kentucky Attorney General Cameron announced a settlement with convenience store and fuel retailer Brothers Market, resolving price gouging allegations for fuel after the Colonial Pipeline shutdown. The Attorney General’s Office has waived civil penalties if the store complies with the settlement, and the store has agreed to profit disgorgement and injunctive relief.
  • California Attorney General Bonta announced that the State’s price gouging law is in effect in Siskiyou, Lassen, and Plumas counties due to wildfires.

Consumer Protection—Debt Collection

  • Massachusetts Attorney General Healey announced guidance stating that federal child tax credits are exempt from seizure or garnishment by debt collectors, and that any attempted seizure or garnishment violates Massachusetts’ Debt Collection Regulations.

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

Monday, June 28, 2021

CFPB 

  • The Consumer Financial Protection Bureau (“CFPB”) issued amendments to the federal mortgage servicing regulations to reinforce economic recovery as foreclosure moratoria expire. The rules, which become effective on August 31, 2021, will create temporary safeguards to ensure that borrowers may explore options prior to foreclosure, as well as create flexibility for mortgage servicers.

 Consumer Protection 

  • California Attorney General Bonta announced a proposed settlement against Voyageurs International, Ltd., resolving allegations that the travel company only offered partial refunds for a cancelled high school European trip and kept the remaining fees. The settlement requires the company to provide full refunds, totaling about $247,000 in restitution, as well as to comply with the Seller of Travel Act and cease charging consumers cancellation fees when it is unable or unwilling to provide the purchased services.

 Deceptive Debt Relief 

  • A complaint filed on June 27, 2021 in the Southern District of Florida is accusing law firm GM Law and associated entities of conducting a student loan debt elimination telemarketing scam to debtors. The lawsuit seeks declaratory relief and damages.

Energy 

  • Connecticut Attorney General Tong led a coalition of attorneys general in calling on the Federal Energy Regulatory Commission to reject incentive payments to transmission developers to join regional organizations, which they generally have to join regardless. The coalition is arguing that the incentives, which will add to ratepayer costs, are unnecessary and unfair.

Federal Trade Commission

  • A bipartisan coalition of 28 attorneys general co-led by New York Attorney General James and Colorado Attorney General Weiser sent a letter to Congress expressing support for the Consumer Protection and Recovery Act (H.R. 2668), which would give the Federal Trade Commission (“FTC”) the power to obtain restitution. The coalition is arguing that if the FTC is not able to obtain restitution attorneys general must divert resources to perform duties that the FTC previously performed.

Financial Misconduct 

  • North Carolina Attorney General Stein filed a lawsuit against companies Home Relief Services, Amstar Services, and Consumer Proponents & Associates Corporation and their principals for allegedly engaging in illegal debt adjusting, collecting unlawful advance fees, and falsely promising to reduce mortgage loan payments, obtain loan forbearance, and prevent foreclosures. The lawsuit seeks injunctive relief, cancellation of the associated contracts, civil penalties, restitution, and fees.

Medicaid Fraud

  • North Carolina Attorney General Stein announced that the former CEO of Extended Reach Day Treatment for Children and Adolescents, a Medicaid provider that provided day treatment and other behavioral health services, was sentenced for health care fraud. The settlement includes 24 months in prison and a $337,615 restitution payment. The defendant added extra treatment services that were not provided on claim submissions along with services actually given, as well as billed for psychotherapy services not provided by a doctor.

Tuesday, June 29, 2021 

CFPB 

  • The Consumer Financial Protection Bureau (“CFPB”) issued a report outlining legal violations and prior supervisory findings leading to public enforcement in 2020. For example, the CFPB found that consumer reporting companies accepted consumer data from furnishers that were unreliable, violating the Fair Credit Reporting Act. The CFPB also found redlining, several violations of the Regulation X mortgage servicing rules, and misleading actions by student loan servicers.

Consumer Protection 

  • Washington D.C. Attorney General Racine announced that before-and-after-school daycare program KCE Champions LLC is required to change its business practices and pay $250,000. An investigation found that the company unfairly deceived parents by failing to adequately disclose late fees, automatically withdrew payments without clear authorization, excessively called parents to collect fees, and dis-enrolled children if payments were not made for two weeks.

 Medicaid Fraud 

  • Vermont Attorney General Donovan announced a settlement with Health Care & Rehabilitation Services of Southeastern Vermont, resolving allegations that it violated the Vermont False Claims Act by submitting Medicaid claims for services provided by an employee on the exclusion list. The settlement requires the company to pay about $170,000 and adopt remedial measures.

State AG Office News 

  • New Jersey Attorney General Grewal will be leading the enforcement division of the U.S. Securities and Exchange Commission beginning on July 26, 2021. He will name an interim attorney general this week to finish his term, which ends in January.

Unfair Debt Practices 

  • Georgia Attorney General Carr and the Consumer Financial Protection Bureau announced that they entered into a consent order with Burlington Financial Group, LLC and its owners and executives resolving allegations that they violated the Telemarketing Sales Rule, the Fair Business Practices Act, and the Debt Adjustment Act with their advertising and sale of debt relief and credit repair services. The company allegedly misled financially vulnerable consumers, many elderly, into paying advance fees for services it falsely promised would eliminate credit card debt and improve credit scores, which ultimately left these consumers in a worse financial position. The consent judgment requires the company to stop doing business in Georgia and pay $150,000 in civil penalties.