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

Tuesday, June 1, 2021:

Consumer Protection

  • Arizona Attorney General Brnovich announced that refund checks are being sent to consumers following a $1.75 million settlement his office reached with Landmark Home Warranty in March 2021. The settlement stemmed from consumer complaints alleging that the company failed to deliver on its promises of expedited air conditioning services.

Healthcare

  • Rhode Island Attorney General Neronha announced that his office has granted conditional approval of a change in ownership of hospitals Roger Williams Medical Center and Our Lady of Fatima Hospital, but the approval imposes strict conditions to ensure the hospitals continue to operate for the next five years. The conditions include, among other things, upfront financial commitments on the part of Prospect Medical Holdings’ anticipated new majority holders.

Labor

  • Illinois Attorney General Raoul announced that a Cook County Circuit Court judge declined to dismiss his office’s lawsuit against staffing agencies Elite Staffing, Inc., Metro Staff, Inc., and Midway Staffing, Inc., and their client Colony, Inc., alleging that the staffing agencies formed an illegal agreement to fix wages and to refuse to solicit or hire employees of the others. The lawsuit also alleges that Colony helped facilitate the illegal conduct. The Circuit Court found that though the Illinois Antitrust Act protects legal labor union activities from antitrust liability, it does not provide a broad immunization for illegal conduct. The lawsuit seeks civil penalties, damages, and injunctive relief.

Wednesday, June 2, 2021:

Healthcare

  • North Carolina Attorney General Stein expressed concern over the recent increase in hospital consolidations. In his press release, Attorney General Stein states that consolidations are not always preferable and encourages hospital directors to be sure that consolidation is in patients’ and communities’ best interest before it is pursued. He also warns hospital system administrators that failing to provide transparent pricing is against the law.
  • Connecticut Attorney General Tong announced the enactment of a new law which prohibits limited service pregnancy centers from using false, misleading, or deceptive language about the services they provide, or from offering services that they do not intend to provide. Under the new law, this type of false and misleading advertising is subject to enforcement action by the Attorney General’s Office.

Environment

  • Florida Attorney General Moody announced that she has joined a coalition of 22 states in an amended complaint in the Southern District of Texas seeking to block President Biden’s cancellation of the Keystone XL Pipeline.
  • California Attorney General Bonta testified before the U.S. Environmental Protection Agency on California’s proposed restoration of its waiver under the Clean Air Act for its greenhouse gas and zero emission vehicle program. The waiver was withdrawn by the Trump administration, and Attorney General Bonta is asking for it to be reinstated.

Thursday, June 3, 2021:

Charities/Nonprofits

  • Washington D.C. Attorney General Racine announced a lawsuit against nonprofit entities Delta Phi Epsilon, Inc. and Delta Phi Epsilon Foundation and their officer and director for allegedly disregarding governing requirements and diverting nonprofit funds for the director’s personal benefit, failing to meet the entities’ nonprofit purposes. The lawsuit seeks injunctive relief and governance reform including removing the director.
  • Ohio Attorney General Yost announced a settlement with the operators of charity Dogs 4 Warriors, resolving allegations of the abuse of funds and deceptive fundraising activity. Under the settlement, the charity’s operators must pay $50,000 in damages and penalties, as well as permanently shut down the charity and remove its online presence.
  • Minnesota Attorney General Ellison filed a lawsuit against the operator of a Philando Castile charity, alleging that the operator did not properly spend all of the money raised in Castile’s name, with about $120,000 unaccounted for. The complaint charges the operator with four counts, including “(1) breach of charitable trust, (2) deceptive solicitation of charitable contributions, (3) failure to keep proper records as a soliciting charity, and (4) failure to register with the Attorney General’s office as a soliciting charity.” It seeks restitution, among other relief.

Consumer Protection

  • New York Attorney General James announced the conviction of gas station Verrazano Enterprises, Inc. for grand larceny, based on the theft of more than $244,000 in sales tax from the sale of motor fuel. As part of their pleas, the gas station and its owner have paid over $189,000 in restitution as well as executed a confession of judgment for the whole amount stolen from the state.
  • Florida Attorney General Moody issued a consumer alert warning consumers about phantom debt collection schemes and how to avoid them.

Energy

  • Michigan Attorney General Nessel announced that after her intervention, the acquisition by Axium UP Holding of the Upper Peninsula Power Company has resulted in additional consumer benefits, such as revenue credits, shareholder forgiveness, and a moratorium on base rate increases until 2023.

Healthcare

  • Massachusetts Attorney General Healey announced a $300,000 settlement with personal injury law firm Keches Law Group, P.C. for allegedly operating a kickback scheme with a pharmacy to whom it referred injured clients.
  • Arizona Attorney General Brnovich applauded a Ninth Circuit ruling reversing a Wesson Oil class action settlement over a 100% natural claim where the majority of the recovery went to attorneys instead of consumers and where attorneys general and the Ninth Circuit believed the injunctive relief portion was weak.

Friday, June 4, 2021:

Civil Rights

  • Connecticut Attorney General Tong applauded the state Senate’s passage of legislation strengthening the Attorney General’s ability to enforce state civil rights laws, including enforcing against state hate crimes laws, by formalizing the Attorney General’s ability to investigate and bring civil rights lawsuits.

Covid-19

  • Colorado Attorney General Weiser announced that after an agreement with his office, travel company EF Educational Tours will soon notify consumers of refund options for trips that were canceled because of the pandemic, which will include a full refund, a voucher, or rescheduling the trip through September 2023.

Environment

  • Kentucky Attorney General Cameron filed an amicus brief in U.S. Supreme Court case West Virginia v. Environmental Protection Agency, asking it to review a D.C. Circuit ruling allowing the Environmental Protection Agency to make strict carbon emission standards, which could result in the closure of coal-fired power plants.

Healthcare

  • Missouri Attorney General Schmitt announced that four individuals are barred from participating in government healthcare services after Medicaid fraud prosecutions and convictions. All four providers pled guilty to healthcare fraud involving false records.
  • California Attorney General Bonta announced his conditional approval of Prime Healthcare Foundation, Inc.’s sale of Glendora Oaks Behavioral Health Hospital to CHLB, LLC for about $24.25 million. Attorney General Bonta found that the sale with conditions, such as the requirement that CHLB continue to operate the hospital and maintain existing services for ten years, will be an improvement, as CHLB is more experienced in the management of acute psychiatric hospitals.

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

Monday, May 24, 2021:

Covid-19

  • Colorado Attorney General Weiser announced that he asked the Colorado legislature to invest its American Rescue Act funds into Colorado water projects as well as into prosecuting unemployment insurance fraud.

Education

  • A coalition of 23 attorneys general led by Michigan Attorney General Nessel is asking U.S. Secretary of Education Cardona and Attorney General Garland to reinstate and to expand a 2014 guidance package to help public schools meet their federal obligations to discipline students equitably, particularly in regards to exclusionary discipline. The attorneys general are arguing that students of color, students with disabilities, and LGBTQ students are disproportionately subjected to exclusionary discipline, which has been shown to result in negative lifelong impacts.

Environment

  • A coalition of nine attorneys general asked the U.S. Environmental Protection Agency to revoke testing methods that have allowed residential wood heaters to comply with emissions standards when, as the coalition is arguing, they should not be able to comply. The coalition is arguing that the tests used reveal an artificially lower level of emissions than the amount of emissions that would result from in-home use.

Social Media

  • Florida Governor DeSantis signed a law, effective July 1, 2021, that will fine social media companies for removing political candidates from their platforms. The fines are up to $250,000 per day for statewide political candidates and $25,000 a day for local candidates. The law also gives the Florida Attorney General more power to prosecute social media companies and allows Florida residents to sue these companies for up to $100,000 for alleged mistreatment.

Tuesday, May 25, 2021:

Antitrust

  • Senators Klobuchar and Lee introduced a U.S. Senate bill, the State Antitrust Enforcement Venue Act of 2021, which would allow state attorneys general to maintain antitrust enforcement actions in the district in which they were initially filed instead of allowing actions to be transferred to other districts that may be more favorable to defendants or move less quickly. The bill’s proponents argue that it would lead to more effective and efficient antitrust enforcement.

Civil Rights

  • New York Attorney General James applauded the confirmation of Kristen Clarke to lead the U.S. Department of Justice’s Civil Rights Division. Clarke is the first Black woman to lead the Division.

Consumer Protection

  • U.S. District Judge Joseph Rodriguez of the District of New Jersey held the principal of debt collection company DRS Financial LLC in contempt for failing to respond to a proposed class action lawsuit which alleged consumer protection violations. The judge found that the principal has not paid a default judgment or complied with court orders.

Elder Fraud & Abuse

  • A coalition of 47 attorneys general is asking Congress to support H.R. 1215, the Fraud and Scam Reduction Act, which is aimed towards combatting scams against senior citizens. The law would create the Senior Scams Prevention Advisory Group, accountable to the Federal Trade Commission, as well as the Office for the Prevention of Fraud Targeting Seniors for monitoring purposes.

Energy

  • Iowa Attorney General Miller filed four lawsuits alleging that contractors conducted illegal excavations in violation of the “Iowa One Call” law, which requires contractors to contact the Iowa One Call center to locate utility lines prior to excavations. The cases all ended with consent decrees requiring a total of $24,500 in civil penalties.

Fraud Schemes

  • California Attorney General Bonta announced that nine defendants involved in a mortgage relief advance fee scam pleaded guilty to counts including theft from an elder, grand theft, and identity theft. The scheme resulted in about $6 million of loss and involved the defendants’ claims that they could prevent the foreclosure of properties.

Healthcare

  • New York Attorney General James announced that her office’s Medicaid Fraud Control Unit as well as the United States Attorney’s Office in the Western District of New York and Pennsylvania reached a settlement with health care system Upper Allegheny Health System for allegedly using unsterilized and potentially dangerous tools in treatments. The health care system has agreed to pay $2.7 million as part of the settlement.

Law Enforcement

  • Several attorneys general, such as Nevada Attorney General Ford, released statements on the anniversary of the murder of George Floyd about criminal justice and policing reform efforts in the past year.

Wednesday, May 26, 2021:

Education

  • Colorado Attorney General Weiser announced that his office sued student loan servicer Pennsylvania Higher Education Assistance Agency, the exclusive servicer for the federal Public Service Loan Forgiveness program, for allegedly refusing to comply with consumer protection oversight law requiring it to produce certain documents. The lawsuit requests temporary and permanent injunctive relief.

Energy

  • South Carolina Attorney General Wilson announced that South Carolina’s abnormal disruption in the gasoline market expired on May 26, 2021, meaning price increases for gas over the Memorial Day holiday are normal.

Environment

  • New York Attorney General James announced agreements with eight companies involved in the illegal dumping of contaminated construction waste. The agreements include $627,000 in funding to be distributed to improve public park facilities in the Brentwood, Long Island community.

Fraud Schemes

  • North Carolina Attorney General Stein announced that his office reached a $500,000 settlement to resolve allegations against the HEAG Pain Management Center, PA and a doctor involved with the business for submitting false Medicare and Medicaid claims, as part of Attorney General Stein’s Operation You’ve Got Nerve, an operation geared towards combatting fraudulent Medicaid claims for nervous system testing.

Thursday, May 27, 2021:

CFPB

  • The Consumer Financial Protection Bureau (“CFPB”) filed a proposed settlement against Driver Loan, LLC and its CEO which would require them to refund around $1 million to consumers in addition to injunctive relief and a civil penalty. The CFPB is alleging that the company and CEO broke the law by misrepresenting the risks associated with their deposits and the annual percentage rate (“APR”) connected to their consumer loans.
  • The Consumer Financial Protection Bureau (“CFPB”) released a report about manufactured housing financing and its potential risks for consumers, using information collected under the Home Mortgage Disclosure Act.
  • The Consumer Financial Protection Bureau (“CFPB”) is urging the Fourth Circuit in an amicus brief not to create a loophole that would permit banks to bind home loan consumers into arbitration agreements. The CFPB is arguing that the Truth In Lending Act’s arbitration restriction should apply to agreements that are related to home-loan contracts.

Fraud Schemes

  • New Jersey Attorney General Grewal announced the sentencing of roofing companies Roof Management, Inc. and A&S Enterprises, Inc. and their owner for fraudulently billing the Passaic Valley Sewerage Commission for fictitious expenses. In addition to the sentencing the companies must pay restitution and a $75,000 anti-corruption profiteering penalty.
  • North Carolina Attorney General Stein issued a consumer alert warning consumers about cryptocurrency scams. The alert states that national reports indicate 7,000 people have lost about $80 million to scams over the last six months.

Price Gouging

  • Michigan Attorney General Nessel ordered a BP gas station to cease and desist from engaging in unlawful business practices. The business allegedly engaged in price gouging by selling gas for about $1 more per gallon than sale prices at nearby stations, and then declined to justify the price difference.

Election Protection

  • New York Attorney General James announced a lawsuit against the Rensselaer County Board of Elections and its commissioners for allegedly failing to provide voters with equitable and adequate access to early voting locations, violating New York’s Early Voting law. The lawsuit seeks a declaration that the current locations are arbitrary and capricious and that the court order the Board to select a site that affords voters in Troy adequate and equitable voting access.

Friday, May 28, 2021:

Consumer Protection

  • North Carolina Attorney General Stein announced that his office won a default judgment against lender Alpha Finance Company, which closed in July 2019 and left borrowers with outstanding secured loans. Under the judgment, which affects over $600,000 worth of loans, all consumers’ loans under the Retail Installment Sales Act (“RISA”) are cancelled and the liens will be released. Attorney General Stein sued Alpha Finance, which made personal loans for the purchase of used cars and secured them by placing a lien on the automobiles’ titles, in March 2020 for allegedly violating the North Carolina Unfair and Deceptive Trade Practices Act and RISA.

Environment

  • Oregon Attorney General Rosenblum applauded the Oregon legislature’s passage of HB 2377, The Environmental Accountability Act, which holds parties accountable for environmental contamination at clean-up sites even if the companies have since dissolved by allowing the government to access insurance assets.
  • California Attorney General Bonta filed a motion to intervene in the Los Angeles City Attorney’s lawsuit against scrap metal recycling facility operator S&W Atlas Iron & Metal Company for allegedly endangering environmental justice communities’ health and safety with emissions and projectiles.

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

Monday, May 17, 2021:

CFPB

  • The Consumer Financial Protection Bureau (“CFPB”) asked a Massachusetts federal district court to enter a final judgment and order that would require DMB Financial, LLC to pay consumers at least $5.4 million for illegal fees it charged for debt settlement and for failing to provide required disclosures, in addition to a nominal civil penalty due to the company’s limited financial resources. The CFPB is alleging that DMB’s conduct violated the Telemarketing Sales Rule and the Consumer Financial Protection Act.
  • The Consumer Financial Protection Bureau (“CFPB”) announced that five federal financial regulatory agencies will extend the comment period on how financial institutions use artificial intelligence (“AI”) in their activities and the challenges AI presents until July 1, 2021.
  • On May 14, 2021, Middle District of Tennessee Judge Richardson declined to block the Consumer Financial Protection Bureau’s (“CFPB”) rule requiring landlords to inform tenants about federal protections due to the pandemic. The Judge found that the rule does not apply where the CDC order does not apply such as in some Sixth Circuit jurisdictions, and that it does not violate the First Amendment because it does not require false speech.

Covid-19

  • California Attorney General Bonta is warning providers not to charge for the COVID-19 vaccine, saying his office has already sent several cease and desist letters related to these charges and that charging for the vaccine is a potential violation of the civil False Claims Act and other civil and criminal laws.

Healthcare

  • A coalition of 23 attorneys general led by California Attorney General Bonta and New York Attorney General James sent a comment letter to the U.S. Department of Health and Human Services applauding its Proposed Rule to undo a 2019 Title X Rule, which the attorneys general believe reduced access to healthcare services related to family planning counseling, access to contraceptive methods, and critical screenings for health conditions.

Tuesday, May 18, 2021:

Covid-19

  • New York Attorney General James announced a $200,000 settlement with online water filtration retailer Filters Fast resolving a 2019 data breach that compromised over 300,000 consumers’ personal information. In connection with the settlement, Attorney General James stated, “Filters Fast fell far short of its responsibilities of protecting its customers against attacks on its online platform, and of promptly informing customers of any such attack so that they could take the necessary steps to protect their identities. Online information security has been especially critical during the COVID-19 pandemic, during which New Yorkers have increasingly relied on online retailers, such as Filters Fast, to purchase basic household goods. My office is committed to protecting consumers, which is why we will continue to use every available tool to hold companies accountable when they fail to safeguard personal information.” The agreement also includes injunctive relief.
  • Virginia Attorney General Herring announced a settlement with travel company Key Tours International Inc. resolving claims that it did not honor its refund terms in contracts with consumers who purchased vacation packages that were cancelled due to the pandemic. The settlement includes a partially suspended civil penalties payment, $12,838.15 in restitution, and attorneys’ fees.
  • Michigan Attorney Genera Nessel sent a notice of intended action to Skin Envy, LLC, which operates non-surgical weight-loss centers in Michigan, after its owner allegedly made misleading claims about injections’ ability to prevent COVID-19. The owner also allegedly claimed that the procedures improve immunity without mentioning their potential side effects.

Energy

  • A coalition of 19 attorneys general is asking President Biden to support energy infrastructure, including the Keystone XL Pipeline, after the Colonial Pipeline shutdown. The coalition is arguing that energy infrastructure is necessary for domestic energy needs and to maintain the United States’ leadership position as a net-energy exporter.

Price Gouging

  • Connecticut Attorney General Tong applauded the Connecticut House of Representatives’ passage of legislation to strengthen Connecticut’s ability to enforce against price gouging. If it is passed in the Senate, the new legislation would extend price gouging enforcement beyond retail sales, define price gouging as an “unconsciously excessive price,” mirroring New York’s language, and include rentals and leases.
  • Washington D.C. Attorney General Racine applauded Congress’ passage of bipartisan legislation, the Jabara-Heyer NO HATE Act, providing state and local governments and law enforcement agencies with resources to identify, report, and understand hate crimes with the goal of preventing them.

Consumer Protection

  • Florida Attorney General Moody is asking Congress to enact the Federal Initiative to Guarantee Health by Targeting Fentanyl Act (“the FIGHT Fentanyl Act”). The FIGHT Fentanyl Act would add fentanyl-related compounds to Schedule I of the Controlled Substances Act, which are only currently on Schedule I temporarily until October 22, 2021. Attorney General Moody believes that permanently placing fentanyl-related compounds on Schedule I would better protect communities’ health and safety.
  • Connecticut Attorney General Tong is asking the Public Utilities Regulatory Authority to reject Connecticut Water Company’s proposed $20 million rate increase, saying the proposed increase includes several excessive and unnecessary costs.

Wednesday, May 19, 2021:

Federal Trade Commission

  • The Federal Trade Commission (“FTC”) and six states filed a lawsuit against Frontier Communications, alleging that it failed to provide consumers the DSL internet speeds promised and charged others for more expensive and higher-speed service than it was giving them. The complaint alleges that Frontier violated state laws and the FTC Act by misrepresenting the service it would provide as well as that it engaged in unfair billing practices.

Fraud Schemes

  • Nevada Attorney General Ford announced the sentencing of the owner of Spirit of David Behavioral Health, LLC in a Medicaid fraud case that involved failure to maintain adequate records. The sentence includes a $100,000 restitution payment.
  • North Carolina Attorney General Stein announced the sentencing of the owner of home health provider Agape Healthcare Services Inc for health care fraud, wire fraud, aggravated identify theft, and conspiracy to commit money laundering, after the defendant billed the state Medicaid program for services that were not provided. The defendant has also been ordered to pay $13,396,921 in restitution.

Labor

  • Vermont Attorney General Donovan filed an amicus brief in support of the Koffee Kup, et al. Emergency Motion to Compel Receiver to Pay Urgent Payroll Deductions, after the court-appointed receiver and Key Bank refused to pay $797,568.17 in accrued paid time off to employees after Koffee Kup closed earlier this year. Vermont is arguing that the court should compel the receiver and bank to give the employees the paid time off funds, as they are deemed “wages.”

Thursday, May 20, 2021:

Consumer Protection

  • Colorado Attorney General Weiser announced that his office entered into a settlement agreement with American Assurance Corporation for failing to pay full guaranteed automobile protection (“GAP”) coverage to Colorado vehicle owners. The agreement requires the company to pay $121,983 in refunds to the consumers.
  • Kentucky Attorney General Cameron announced a partnership with the Kentucky Beer Wholesalers Association to raise awareness of human trafficking in its “Your Eyes Save Lives” campaign. As part of the campaign, the Attorney General’s Office and Association will provide training materials to beer distribution employees.

Covid-19

  • Connecticut Attorney General Tong, United Illuminating, and other settling parties filed a joint letter with the Public Utilities Regulatory Authority (“PURA”) clarifying PURA’s questions and reaffirming their commitment to a $46.5 million COVID relief bill credit which would decrease and stabilize electric rates until 2023.

Civil Rights

  • New York Attorney General James announced that she won the right to intervene in a Southern District of New York lawsuit against conspiracy theorists who threatened robocalls to suppress Black voters in the 2020 election.

Elder Fraud & Abuse

  • Washington D.C. Attorney General Racine is advising consumers to be vigilant about elder abuse and neglect as well as scams targeting elders during Older Americans Month in May.

Friday, May 21, 2021:

CFPB

  • The Consumer Financial Protection Bureau (“CFPB”) issued a consent order against auto loan finance company 3rd Generation, Inc., which has been doing business as California Auto Finance, for allegedly illegally charging interest for late payments on its Loss Damage Waivers without consumers’ knowledge or consent. The CFPB consent order includes $565,813 in required refunds or credits, a $50,000 civil penalty, and injunctive relief. It also mandates corrected information to credit reporting agencies.

Charities

  • Kansas Attorney General Schmidt announced that charity A Ride for the Wounded, Inc. has been permanently banned from doing business in Kansas and ordered to pay over $11,000 in damages after it failed to respond to a lawsuit accusing the charity of using funds for personal expenses in violation of the Kansas Charitable Organizations and Solicitations Act.

Environment

  • North Dakota Attorney General Stenehjem applauded a court order declining to shut down the Dakota Access Pipeline pending an Environmental Impact Statement.
  • Kansas Attorney General Schmidt led a coalition of 17 attorneys general in a U.S. District Court for South Dakota brief supporting South Dakota Governor Noem’s lawsuit against the U.S. Department of Interior, asking the court to block the agency’s decision to deny a July 3, 2021 fireworks permit at Mount Rushmore. The agency had raised concerns about the environmental impact and fire risk, as well as about crowding during the pandemic.

Fraud Schemes

  • California Attorney General Bonta announced charges against 15 defendants for allegedly conspiring to defraud at least 30 victims of their retirement savings in a Ponzi scheme. The defendants allegedly used their positions as financial advisors to convince the victims to invest in the scheme, making misrepresentations throughout the process.
  • Michigan Attorney General Nessel announced charges against the doctor who owns business VCC Services, PLLC for allegedly engaging in insurance fraud by dispensing and billing insurers for prescriptions while lacking the proper license.

Law Enforcement

  • New York Attorney General James announced the introduction of the Police Accountability Act, legislation which if enacted will reform New York’s use of force law, such as by establishing that the use of force is a last resort, and establish criminal penalties for those police officers who use excessive force.

Earlier this year, the Attorney General Alliance (AGA) conducted an important webinar highlighting the risks of organized retail crime (ORC) to retail organizations, employees, and customers. ORC presents substantial dangers in both the online and brick-and-mortar settings, necessitating cooperative efforts between businesses and government actors to combat this illicit activity. Retail clients should be aware of pandemic-driven upticks in ORC, increased safety risks to employees and customers, and proposed solutions like the INFORM Act that may impose new business obligations in the effort to prevent ORC.

An Increase in ORC

ORC refers to acts of theft by professional criminals both in-store and online. ORC is much more serious than casual shoplifting and is closely linked to dangerous crimes like human trafficking and money laundering. Participants in ORC are generally extremely well-organized and intentional. In stark contrast to the casual shoplifter who likely engages in his or her crime of choice no more than a few times per week, organized retail criminals can easily hit several stores in a single day. Moreover, because their aim is resale, rather than personal use, these criminals tend to target in-demand products. These include cosmetics, fragrances, allergy medications, razor blades, designer clothing, batteries, drills, over-the-counter drugs, and baby formula.

While ORC has existed for decades, shifts in purchaser behavior during the coronavirus pandemic appear to have dangerously increased its felt effects; retailers, for one, are taking a substantial financial hit. Scott Draher, an asset protection and safety executive for Lowe’s, noted that while maybe 25% of all Lowe’s losses in 2015 resulted from ORC, that number is now around 60%. Although the exact cause of this spike in ORC activity is unclear, it may be that pandemic-era buyers, in their efforts to avoid in-person shopping, are more willing to purchase products from questionable sources, creating increased resale opportunities for ORC participants.

The increase in demand for certain goods—even from uncertain sources—has also fueled another troubling ORC trend: An increase in violence. It appears that ORC criminals are becoming more brazen and aggressive. Many will do anything to get out the door with their stolen goods, including harming people in their way. Employees, in particular, have been regularly threatened with mace and other weapons. According to Ben Dugan, part of the ORC investigations team for CVS Health, the key driver of this increased aggression is the desire to meet escalating demand; the recent increase in online sales of the products targeted by ORC criminals, about 30%, roughly mirror the increase in theft.

ORC also creates troubling consumer safety risks apart from the risk of altercation with a fleeing criminal. Consider an organized retail criminal who steals and resells baby formula. This sensitive product may not be stored the right way prior to resale, or the thief may tamper with the contents or change expiration dates on the packaging. More generally, third-party sellers are simply not held to the same product integrity and safety standards that would otherwise apply. These risks are particularly high in the context of online sales, where consumers have less information about the product and the seller—and thus less opportunity to obtain legal redress.

Proposed Solutions

Any conversation on ORC would be incomplete without a discussion of potential solutions—a fact to which the AG Alliance webinar panelists were clearly attuned. Notably, panelists like Tania Maestas, Chief Deputy AG for New Mexico, quickly dismissed the idea of a uniform ORC statute as the panacea to address this type of criminal activity. This comes as no great shock, since the types of ORC seen and the way ORC is committed can vary significantly across states. Panelists appeared to favor collaboration, including between state AG offices and businesses, over a legislative one-size-fits-all solution. Specific solutions were also discussed.

First, one important potential solution to ORC is felony charge enhancement, since, in most states, ORC offenders are generally charged only with misdemeanors. Most state anti-theft laws were originally drafted with one-time offenses in mind. Thus, they do not reflect the seriousness of ORC. What is most important is the ability to aggregate offenses across jurisdictions, even just within one state—something more and more states are allowing. Without this aggregation, individual incidences of ORC almost always fall below the felony threshold. This means states are unable to prosecute offenders effectively or to establish meaningful deterrence to multi-member and often very profitable criminal organizations.

Second, the INFORM Act is a new piece of legislation that Congress is expected to take back up in the coming days. According to Ben Dugan, consumers are often misled by bulk sales, thinking high volume means legitimacy. In reality, bulk sellers have no way to get new products in bulk at 50% of the cost of manufacturing. Thus, lots of sales at a substantial discount is actually an excellent indicator of stolen goods. While the INFORM Act is narrower than other regulation, it still poses risks discussed above. The manner in which Congress might mitigate these risks is yet to be seen.

Conclusion

Retailers should stay privy to new trends in ORC, including the ways these crimes are being committed, the types of products likely to be targeted, and the level of violence to expect. Moreover, retailers should anticipate future criminal legislation or consumer safety regulation as government actors work to craft a new legal framework that prevents ORC since it is a dangerous form of organized crime with the potential not only to harm a retailer’s bottom line, but to physically injure employees and customers.

Crowell & Moring will continue to monitor legislative and regulatory changes in this space.

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

Monday, May 10, 2021: 

Antitrust

  • A bipartisan coalition of 45 attorneys general sent a letter to Congress asking the federal government to provide support for state antitrust enforcement. The attorneys general explain that antitrust enforcement requires significant resources, and additional funding for state agencies will allow them to be better partners to federal agencies in antitrust actions.

CFPB

  • The Consumer Financial Protection Bureau (“CFPB”) is determining whether TMX Finance LLC violated a $9 million settlement agreement, according to an order that became public on May 10, 2021. The CFPB rejected the company’s argument that the request was too vague and that it failed to provide fair notice.
  • According to a quarterly report, MoneyGram International Inc. received notice from the Consumer Financial Protection Bureau (“CFPB”) that the CFPB is considering enforcement activity against it for allegedly violating the Remittance Rule, the Electronic Fund Transfer Act, and the Consumer Financial Protection Act with its money transfers.

Environment

  • New Jersey Attorney General Grewal announced that his office filed nine environmental enforcement actions, including seven against polluters for contamination in environmentally overburdened communities. The complaints have been brought against a broad range of activity, including the release of toxic chemicals and chemical and food waste contaminants as well as illegal dumping.
  • Wisconsin Attorney General Kaul led a coalition of 19 attorneys general in a comment letter to the U.S. Environmental Protection Agency (“EPA”) supporting its proposal to include 29 PFAS substances in its fifth Unregulated Contaminant Monitoring Rule. The inclusion of the substances will require public water systems to monitor for them and to provide data about the occurrence of contamination involving these substances. The letter also asks the EPA to require monitoring for total PFAS, validate an analytical method for total PFAS, advance environmental justice, and lower the minimum reporting levels.

Healthcare

  • Pennsylvania Attorney General Shapiro announced that the Multilateral Pharmaceutical Merger Task Force, which includes staff from the Department of Justice, the Federal Trade Commission, the European Commission Directorate General for Competition, the U.K.’s Competition and Markets Authority, and state attorneys’ general offices, is seeking public comments on how to update its analysis of pharmaceutical merger effects. The Task Force is posing certain general questions, such as what theories of harm it should consider and how to approach the market definition, as well as seeking comments on other issues.

Tuesday, May 11, 2021: 

Civil Rights

  • California Attorney General Bonta announced the launch of the Racial Justice Bureau within the California Department of Justice as well as a future virtual convening against hate crime with California’s Big City Mayors. According to the press release, these are California’s most recent efforts to combat bias and hate.

 Energy

  • Maryland Attorney General Frosh applauded that the Federal Energy Regulatory Commission (“FERC”) decided to modify its practice of allowing construction of natural gas pipelines before considering objections, which a coalition of attorneys general had argued against. FERC agreed that it should not limit the withholding of construction activities to affected landowners’ requests for a rehearing and announced a policy of presumptively staying pipeline approvals.

 False Advertising

  • Colorado Attorney General Weiser and Wyoming Attorney General Hill announced a joint settlement of lawsuits against two companies, Atlantic Publishers Group, LLC and Publishers Partnership Services, LLC, that targeted consumers across the U.S. with deceptive mailers advertising magazine subscriptions that were designed to look like renewal notices for the consumers’ existing subscriptions. The settlement includes a payment of $500,000 from the organizers of the scam and bans them from operating magazine subscription businesses and sending deceptive mailers in Colorado and Wyoming.

 Financial Services

  • The U.S. Senate voted to repeal the Office of the Comptroller of the Currency’s (“OCC”) “true lender” rule with a Congressional Review Act resolution, causing the American Bankers Association to express disappointment.

 FTC

  • During a National Association of Attorneys General panel, the Federal Trade Commission’s (“FTC”) Acting Chairwoman Slaughter stated that the FTC will partner more frequently and actively with state attorneys general after the Supreme Court denied its ability to seek restitution. Acting FCC Chairwoman Rosenworcel and Acting Consumer Financial Protection Bureau Director Uejio also indicated that they wish to work more closely with state attorneys general.

 Healthcare

  • Arizona Attorney General Brnovich announced that his office obtained a settlement against Budget Hearing Aids and its subsidiary Audien to stop them from misleading consumers about over-the-counter hearing devices. The companies allegedly advertised the hearing devices as FDA approved or registered even though they have not received such approval.

 Price Gouging

  • Several attorneys general, including Georgia Attorney General Carr, North Carolina Attorney General Stein, and South Carolina Attorney General Wilson, announced that their states’ price gouging laws are in effect in response to the Colonial Pipeline’s shutdown after a ransomware attack, which has resulted in a petroleum shortage. Georgia’s press release states that the price gouging law applies to products including motor fuel and diesel fuel, and that the COVID-19 state of emergency is still in effect, prohibiting price gouging of goods and services that are necessary to support public health.

 Wednesday, May 12, 2021: 

 COVID-19

  • Reports indicate that the Pennsylvania Attorney General’s Office is investigating a breach of COVID-19 contact tracing data that may have exposed around 72,000 people’s private information.

 Elder Fraud and Abuse

  • Minnesota Attorney General Ellison announced that his office obtained convictions against the former operator of home care nursing agency Caring & Compassionate Healthcare Agency for Medicaid fraud of over $1.8 million. Among other things, the defendant billed for registered nurse services that were actually performed by other employees and billed for services that did not occur, as well as engaged in fraud.

Environment

  • A coalition of six states and the California State Water Resources Control Board are asking the U.S. Army Corps of Engineers to respect states’ authority under Section 401 of the Clean Water Act to approve, deny, or impose conditions on federally permitted projects that could result in discharges into waters of the United States.

False Advertising

  • Arizona Attorney General Brnovich announced that his office filed a lawsuit against Amazon Home Warranty, LLC, which is not affiliated with Amazon.com, and its officers and affiliated entities for alleged misleading statements in connection with the sale of home warranties. For example, the defendants allegedly falsely advertised that they had been in business for around 10 years when they just started operating, promoted the business using fake reviews, and tried to conceal their connection with a failed home warranty company. The lawsuit seeks injunctive relief, restitution, and civil penalties.
  • Vermont Attorney General Donovan announced a settlement with auto dealer Poulin Auto Sales, Inc. for consumer protection violations such as a deceptive direct mail advertisement. The settlement requires the company to change its business practices, pay $15,000 in restitution, and pay a $5,000 civil penalty.

Labor

  • Massachusetts Attorney General Healey announced that three C-Mart grocery stores and their owners were cited for almost $1 million in restitution and penalties for wage theft and other employment law violations, such as overtime and earned sick leave violations, against more than 150 employees.

Price Gouging

Thursday, May 14, 2021: 

 False Claims

  • Nebraska Attorney General Peterson announced that his office settled a lawsuit with the owner of Kathy Wiley, LLC for false claims submitted to Nebraska Medicaid and its managed care contractors for mental health services. Nebraska alleged that the owner failed to maintain sufficient documentation to demonstrate services were actually provided.

Financial Misconduct

  • Illinois Attorney General Raoul announced that his office entered into a consent order with tax preparer Su Familia Income Tax for charging illegal fees for tax preparation services. The settlement includes injunctive relief and requires the company to pay over $100,000 in restitution to Illinois consumers.

Financial Services

  • On May 13, 2021, the Comprehensive Debt Collection Improvement Act, H.R. 2547, passed the House and has moved to the Senate. If it is enacted, the legislation would expand protections for borrowers, such as by limiting electronic methods of contact, and override a Supreme Court decision which limited liability for law firms working on nonjudicial foreclosures.

Price Gouging

  • New York Attorney General James issued a consumer alert about gasoline price gouging after the Colonial Pipeline cyber-attack. Attorney General James stated, “To be clear, the price gouging of fuel in New York state will not be tolerated for a moment. If our office sees profiteers take advantage of consumers by boosting prices to excess levels, we will not hesitate to take legal action.”

Friday, May 15, 2021: 

 Consumer Protection

  • Virginia Attorney General Herring issued a press release stating that his Consumer Protection Section has recovered over $403 million from consumer protection violators since 2014. The press release also states that the Consumer Protection Section was reorganized and enhanced to be more aggressive in 2016 and that the most complaints received in 2020 were related to automotive sales; followed by credit, loans, and debt collection and internet sales and service.
  • Kansas Attorney General Schmidt announced that health club company Genesis Health Clubs Management, Inc. agreed to a settlement requiring it to pay $15,000 in fees and civil penalties for violating the No-Call Act with unsolicited telemarketing calls. The settlement also includes injunctive relief.

Federal Matters

  • Texas Attorney General Paxton has sued the Biden administration for allegedly unlawfully removing Texas’ 1115 Medicaid waiver extension. The lawsuit seeks the reinstatement of the extension and argues that its removal was a breach of contract and government overreach.

Intellectual Property

  • Washington Attorney General Ferguson announced that his office filed a lawsuit against Landmark Technology A for its alleged patent troll conduct that Attorney General Ferguson is arguing violated the Patent Troll Protection Act and has been harming small businesses. This lawsuit is the first time Washington has enforced its patent troll law. North Carolina Attorney General Stein also filed an amicus brief in Middle District of North Carolina case Napco, Inc. v. Landmark Technology A, LLC to defend a 2014 North Carolina law against patent trolls, arguing that patent trolls stifle innovation by forcing companies to spend money to combat bad-faith patent claims.

Labor

  • Illinois Attorney General Raoul announced a settlement with roofing company Star Roofing and Siding Inc., resolving allegations that the company illegally withheld overtime pay from its employees, some of whom regularly worked more than 60 hours a week. The settlement includes injunctive relief, such as requiring the company to maintain GPS records for its vehicles, and a $101,000 payment.
  • California Attorney General Bonta announced the arraignment of the owners, operators, and certified public accountant of three California restaurants for alleged sales tax evasion and labor law violations. The 65 counts include filing a false tax return with intent to evade tax payments, failure to pay unemployment insurance and training tax, failure to pay income tax, failure to pay disability insurance, and grand theft of labor.

 

 

 

 

 

Today, New Mexico State Auditor Brian Colón announced his candidacy for State Attorney General. He hopes to follow the footsteps of former state auditor, now Attorney General Hector Balderas who is in his second term and term limited.

The former chairman of the New Mexico Democratic Party is now the first person to enter the race for the seat which has been primarily dominated by Democrats during the state’s 110 year history.

The General election will be in November 2022.

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

Monday, May 3, 2021:

CFPB

  • Consumer Financial Protection Bureau Acting Director Uejio and Federal Trade Commission Acting Chairwoman Slaughter sent notification letters to the U.S.’s largest apartment landlords reminding them of federal protections against evictions and requirements of notices under the Fair Debt Collection Practices Act (“FDCPA”). In connection with the letters, Acting Director Uejio stated, “Landlords should ensure that FDCPA-covered debt collectors working on their behalf, which may include attorneys, notify tenants of their rights under federal law. . .We will hold accountable debt collectors who move forward with illegal evictions.”

Consumer Protection

  • On April 30, 2021, U.S. District Judge Slomsky of the Eastern District of Pennsylvania ruled that the Pennsylvania Attorney General can sue business newsletter and law book publisher American Future Systems Inc. under Pennsylvania’s consumer protection law because business-to-business transactions are also subject to the Attorney General’s enforcement powers.

COVID-19

  • Florida Attorney General Moody announced that her office has obtained over $3 million in recoveries for consumers from COVID-19 related scams, purchases, and cancellations. The announcement also states that the price gouging hotline remains active and that the Attorney General’s Office continues to receive complaints about price gouging and other effects of the pandemic on consumer transactions.

 Energy

  • New Jersey Attorney General Grewal announced that solar company NRG Residential Solar Solutions LLC will pay about $69,000 to resolve allegations that it used deceptive sales practices to mislead consumers into leasing solar energy panels, failed to deliver the energy savings it had promised, and misrepresented its policies for servicing, installation, and financing the solar panels. In addition to the payment, the company must also significantly change its business practices and enter arbitration with consumers who choose this option for the next year.

Federal Matters

  • Illinois Attorney General Raoul, Nevada Attorney General Ford, and Virginia Attorney General Herring filed a notice of appeal in their lawsuit to ensure the federal government acknowledges the Equal Rights Amendment, which guarantees equal rights for all Americans regardless of their sex, as the 28th Amendment to the Constitution. A judge dismissed the lawsuit in March, but the attorneys general are arguing that the judge overlooked the role of Article V in amending the Constitution and gave too much weight to a deadline Congress gave for the amendment.

Financial Misconduct

  • New York Attorney General James announced the guilty pleas of the owners of upstate New York restaurants and bars for tax evasion. The defendants repaid $479,203.03 as part of their guilty pleas for underreporting over $4 million in taxable sales.

Tuesday, May 4, 2021:

CFPB

  • The Consumer Financial Protection Bureau (“CFPB”) released two reports demonstrating that Black and Hispanic mortgage borrowers are significantly more likely to be in a forbearance program or to be delinquent than white borrowers are, as well as that overall mortgage complaints to the CFPB are at their highest level in the past three years. In connection with the reports, Acting Director Uejio stated, “More borrowers are behind on their mortgage than at any time since the height of the Great Recession. Communities of color have been hit hard by the pandemic, and the latest data show that many borrowers are still hurting. The CFPB will continue to seek and actively respond to developments in the market, doing everything in our power to help families stay in their homes. As we warned mortgage servicers last month, unprepared is unacceptable.”

Civil Rights

  • District of Columbia  Attorney General Racine co-hosted a national convening with Connecticut Attorney General Tong and the Attorney General Alliance on countering anti-Asian American and Pacific Islander (“AAPI”) hate. The convening included many legal and policy experts as well as business leaders, advocates, and government officials, who met to discuss how to combat anti-AAPI hate with tangible solutions.

False Claims

  • Missouri Attorney General Schmitt announced that in-home health care provider Healthy Home & Family, Inc. and its owners entered into a $300,000 civil settlement agreement with his office for submitting false claims to Missouri Medicaid. The defendants sought payment for more hours than the amount of time care was actually provided and altered records to conceal the fraud. In addition to the payment, the company has agreed to enhanced oversight and monitoring.
  • Michigan Attorney General Nessel announced that the owner of home help provider Synergy Home Services has been charged with submitting false claims to Medicaid for services that were not provided including during times when beneficiaries were hospitalized and not receiving any home help services.

Federal Matters

  • Attorneys General announced the restoration of federal public safety funds to states under the Edward Byrne Memorial Justice Assistance Grant program now that the Department of Justice has agreed to remove immigration-related conditions.

Wednesday, May 5, 2021:

COVID-19

  • Massachusetts Attorney General Healey sent a letter on May 3, 2021 to several pharmacies asking them to reveal their data collection practices for COVID-19 vaccine recipients and the connection between this data collection and marketing. Attorney General Healey’s letter comes after reports surfaced that the data was being used to tailor marketing.

Labor

  • Pennsylvania Attorney General Shapiro applauded that the U.S. Department of Labor announced that it will withdraw the “Independent Contractor” rule which modified the independent contractor status test and which a coalition of 24 attorneys general opposed because of potential misclassification concerns.

Thursday, May 6, 2021:

Consumer Protection

  • Arkansas Attorney General Rutledge announced a $2.6 million judgment against timeshare exit company Real Travel, LLC and its founder for charging consumers high fees and then failing to deliver on promises to help consumers transfer or cancel their timeshare property interests. Under the judgment, the business and founder will also no longer be able to conduct timeshare or timeshare exit-related business in Arkansas.

Education

  • Pennsylvania Attorney General Shapiro announced that, effective May 5, 2021, $17,961,238.17 in fees owed to Pennsylvania from higher education students will be recalled to the Attorney General’s Office from private collection agencies. Pennsylvania will also stop sending outstanding student fees to for-profit debt collectors, and it will stop approving universities’ attempts to send these fees to for-profit debt collectors before using more consumer-friendly methods.

Federal Matters

  • New York Attorney General James released a report about her office’s investigation into fake public comments submitted to the Federal Communications Commission (“FCC”) related to a 2017 proceeding to repeal net neutrality rules. The investigation revealed that broadband companies funded a campaign to generate many of these fake comments in support of the repeal, which involved several lead generators. Attorney General James announced agreements with three of the lead generators, and issued a report recommending reforms such as deterrence and technical safeguards.

 Healthcare

  • Texas Attorney General Paxton filed a motion to intervene in Florida’s lawsuit against the Department of Health and Human Services and the Centers for Disease Control and Prevention for halting the operation of the cruise industry with “no-sailing” or “conditional-sailing” orders.
  • Georgia Attorney General Carr announced that Governor Kemp signed House Bill 509, which will provide a state-based healthcare source as an alternative to the Affordable Care Act and will preserve protections of preexisting medical conditions.
  • A coalition of 21 attorneys general sent a letter to Congress asking it to pass the Black Maternal Health Momnibus Act of 2021, which would help address the Black maternal mortality crisis by improving access to transportation, housing, and nutrition services. The legislation would also allow attorneys general to better protect their residents against race-based discrimination in healthcare.
  • Arkansas Attorney General Rutledge filed a lawsuit against chiropractic clinics 501 Pain & Rehab, LLC and 501 Pain and Rehab Family Clinic of Russellville, LLC, as well as two individuals involved with the clinics, for allegedly discarding patients’ personal and medical information in a public park, violating the Personal Information Protection Act and the Arkansas Deceptive Trade Practices Act. The lawsuit seeks injunctive relief, civil penalties, and license revocation or suspension.

Friday, May 7, 2021:

Charities

  • Ohio Attorney General Yost filed a lawsuit against the director of charity Pen Ohio for allegedly using the charity for personal enrichment. The lawsuit, which seeks injunctive and monetary relief, alleges that the director used $110,000 of charitable funds for his own benefit without obtaining the board’s approval, breached his fiduciary duties, and abused a charitable trust.

COVID-19

  • Oklahoma Attorney General Hunter announced an agreement with private pharmaceutical wholesaler FFF Enterprises to return hydroxychloroquine the state purchased for a full refund. The Oklahoma State Health Department purchased the drug at the beginning of the pandemic after the Food and Drug Administration (“FDA”) granted emergency use authorization for it as a virus treatment. However, the FDA subsequently revoked the authorization, and the company worked with the Attorney General’s office to provide the refund.

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

Monday, April 26, 2021:

Covid-19

  • New Jersey Attorney General Grewal announced that Shamrock Beef and Ale, which was charged with violating COVID-19 restrictions on bars and restaurants, has agreed to have its license suspended for the summer under a settlement with the New Jersey Division of Alcoholic Beverage Control.

Education

  • A coalition of 40 attorneys general led by Illinois Attorney General Raoul and Tennessee Attorney General Slatery is asking Congress to pass the EAGLES Act of 2021, which would expand the U.S. Secret Service’s National Threat Assessment Center to include research-based threat assessment training that would prevent targeted school violence.

Elder Fraud & Abuse

  • Michigan Attorney General Nessel announced The Sentinel Project, which will protect individuals in nursing facilities through unannounced site investigations by specially trained staff.
  • Florida Attorney General Moody announced that the Florida legislature has passed senior protection legislation that would expand the jurisdiction of the attorney general’s office to cover crimes against elderly individuals and disabled adults. Among other things, the legislation also criminalizes the intentional isolation of these individuals from family members and expands the availability and length of injunctive relief.

Environment

  • A coalition of 21 attorneys general, Denver, and Chicago, led by New York Attorney General James, sent a letter to Congress asking it to invalidate a Trump administration Environmental Protection Agency regulation, the methane “Rescission Rule,” which eliminates emissions limits.

Financial Misconduct

  • Washington D.C. Attorney General Racine announced that his office filed a lawsuit against fitness training company Oji Fit World for allegedly filing false Medicaid claims for fitness services for individuals with intellectual and developmental disabilities. The lawsuit seeks damages, civil penalties, and litigation costs.

Healthcare

  • Missouri Attorney General Schmitt announced that the owner of Old Town Pharmacy LLC and a pharmacy technician have been indicted for Medicaid fraud, after allegedly knowingly making false statements to MO HealthNet and forging prescriptions.

Tuesday, April 27, 2021:

CFPB

  • The Consumer Financial Protection Bureau (“CFPB”) officially delayed the mandatory compliance date of the General Qualified Mortgage final rule from July 1, 2021 until October 1, 2022. The CFPB believes that delaying the compliance date will allow more options and flexibility for lenders and borrowers.
  • The Consumer Financial Protection Bureau (“CFPB”) initiated an enforcement action through a consent order against Nationwide Equities Corporation for allegedly sending deceptive loan advertisements to older borrowers, misleading them about reverse mortgages. Under the consent order the company must cease this conduct, pay a civil penalty, and implement a compliance plan to review advertisements.

Education

  • Massachusetts Attorney General Healey announced that her office secured $89,000 in payments to students through a settlement with online for-profit school Flatiron School LLC, which offers coding bootcamps. The settlement resolves allegations that the school used high pressure enrollment methods and failed to provide sufficient disclosures about its bootcamp program.
  • Ohio Attorney General Yost announced that his office received over $250,000 in fines from contractor Miller Builders of Ohio for using foreign steel instead of American steel for eight state-funded Department of Transportation projects.

Financial Services

  • Illinois Attorney General Raoul applauded the Illinois legislature’s passage of his legislation that would protect student loan borrowers from student loan debt relief companies that charge high fees for services they actually cannot provide, such as loan forgiveness and cancellation. Among other things, the new legislation streamlines regulation and prosecution of these scams by allowing the Attorney General’s Office and the Illinois Department of Financial and Professional Regulation to address them on a systemic basis.
  • On April 26, 2021, U.S. District Judge John Tharp Jr. of the Northern District of Illinois rescinded his decision granting class certification and partial summary judgment to Illinois consumers who argued that they received misleading debt collection notices from RGS Financial Inc. The decision finds that new Seventh Circuit rulings have made it clear that confusion is not enough for a Fair Debt Collection Practices Act claim, and consumers must instead show that information actually influenced their actions and led to injury.

FTC

  • Congressional Democrats have produced a bill that would restore the Federal Trade Commission’s power to seek restitution and profit disgorgement by adding these forms of relief to the Federal Trade Commission Act.

Healthcare

  • California Attorney General Bonta announced a $300 million settlement against Indivior plc and Indivior Inc., which resolves claims that they deceptively marketed Suboxone, causing improper use of state Medicaid funds. The settlement will be paid to all 50 states as well as D.C. and Puerto Rico.

Transportation

  • Missouri Attorney General Schmitt led a coalition of 22 attorneys general in a letter opposing the use of the Federal Energy Regulatory Commission’s “Social Cost of Carbon” analysis in certification decisions for interstate natural gas pipeline construction. The coalition is arguing that the Natural Gas Act and the National Environmental Policy Act do not authorize the “Social Cost of Carbon” analysis and that it is speculative.

Wednesday, April 28, 2021:

Consumer Protection

  • Vermont Attorney General Donovan announced a settlement with Strategic IT Partner after receiving reports of scam robocalls to the Vermont Consumer Assistance Program. Under the settlement, the company, which previously routed foreign robocalls, must stop bringing robocalls into the United States from abroad unless it verifies they are legitimate first. The settlement also includes a partially suspended $67,000 payment. In the same press release, Attorney General Donovan also announced the creation of a Robocall Team to assist in combatting scam calls.

Environment

  • Massachusetts Attorney General Healey announced a consent judgment with construction material supply company Aggregate Industries – Northeast Region, Inc., settling allegations that the company violated the Massachusetts Clean Air Act by installing unauthorized equipment to produce crumb rubber asphalt pavement and then failing to properly maintain the equipment, causing harmful emissions and odors. Under the consent judgment the company must pay $1.45 million in penalties, which is partially suspended, as well as comply with injunctive relief.
  • California Attorney General Bonta announced the expansion of the California Department of Justice’s Bureau of Environmental Justice. The expanded Bureau will include 11 attorneys focused on environmental justice in California.

Labor & Employment

  • New York Attorney General James announced the convictions of construction company Premier Builders MN LLC and two of its owners for withholding overtime wages from employees and failing to pay unemployment contributions to the New York State Department of Labor Unemployment Insurance fund since 2013. The defendants must pay $580,000 in restitution, $150,000 of which will go to employees.

Privacy

  • Oregon Attorney General Rosenblum announced that the Oregon House of Representatives passed HB 3284, a bill that will protect personal COVID-19 related health data. It applies to any commercial website, private entity, or contact tracing app that collects, uses, or discloses data about people’s COVID-19 exposure or infection, and it prohibits these entities from collecting, using, or disclosing this data without affirmative consent. It also requires the covered entities to provide a way to revoke consent and to refrain from using the collected information for commercial advertising or marketing algorithms. The bill does not apply to entities that are already covered by health information privacy laws.

 State AG Office News

  • South Carolina Attorney General Wilson announced the creation of the SC Highway Heroes Campaign to combat human trafficking. The Campaign is a collaboration between Attorney General Wilson’s office, the SC Trucking Association, the Office of Highway Safety, the State Transport Police, and the Department of Motor Vehicles. It will offer commercially licensed drivers the opportunity to complete a free online training about stopping human trafficking.

Thursday, April 29, 2021:

Consumer Protection

  • New Jersey Attorney General Grewal announced a settlement with online florist Avas Flowers for allegedly failing to compensate consumers when it delivered flowers that were unlike the arrangements pictured online or were wilted. The settlement requires the company to pay $60,000 and improve its business practices such as by clearly and conspicuously displaying its refund and return policies.

Healthcare

  • North Carolina Attorney General Stein announced a $300,000 settlement resolving allegations that Hanora Medical Center of Fayetteville and a doctor submitted false Medicaid claims for autonomic nervous system testing. This enforcement is part of Attorney General Stein’s You’ve Got Nerve effort to take action against providers who are fraudulently billing Medicaid for this type of testing.

Housing

  • Arizona Attorney General Brnovich announced that his office filed an Arizona Fair Housing Act lawsuit against Brentwood Southern, LLC and Kingsley Management Corporation for allegedly discriminating against individuals with disabilities in housing terms and conditions.

Environment

  • New York Attorney General James announced an agreement to resolve a state and federal action against cement plant Holcim Inc. for leaking toxic pollutants into Hudson River tributaries. Under the agreement Holcim must pay a $850,000 civil penalty and implement measures to prevent violations in the future.
  • West Virginia Attorney General Morrisey led a 19-state coalition in a U.S. Supreme Court petition urging the Court to overturn a District of Columbia Circuit ruling interpreting Section 111 of the Clean Air Act to give the Environmental Protection Agency broad regulatory powers in decarbonization.

State AG Office News

  • California Attorney General Bonta announced the creation of a Diversity, Equity, and Inclusion Council within the California Department of Justice. The new Council will help ensure the DOJ’s work environment will be a model for helping the voices of all Californians to be heard in the work setting.
  • Illinois Attorney General Raoul has notified the public of a ransomware attack compromising the office’s network. The extent of information compromised is still being investigated.

Friday, April 30, 2021:

Housing

  • Connecticut Attorney General Tong warned consumers whose mortgage loans are serviced by the former Nationstar Mortgage, now known as Mr. Cooper, about unauthorized withdrawals triggered by electronic payment vendor ACI Worldwide’s errors. The announcement states that affected consumers should seek reimbursement from Mr. Cooper online and contact the Connecticut Department of Banking or the Office of the Attorney General if they are unable to resolve their concerns.
  • Virginia Attorney General Herring announced a new tool, the “ban the box” hiring policy, to reduce housing discrimination and increase housing stability for those with previous nonviolent convictions, and is encouraging housing providers to adopt it. The policy includes steps such as first considering whether an applicant’s credit and income qualifies them for a rental, then conducting a tailored background screening, and finally allowing an applicant to provide additional information or evidence if an issue arises from the background screening.

 Healthcare

  • California Attorney General Bonta warned consumers in California about sham health insurance plans that certain healthcare sharing ministries offer. According to the alert, healthcare sharing ministries mislead consumers into enrolling in one of these plans as an affordable alternative to Covered California plans, but then these plans are not obligated to cover preexisting conditions or guarantee coverage for medical services or costs.

 Labor

  • Virginia Attorney General Herring applauded legislation enacted into law that allows local public employees to collectively bargain. In connection with the bill’s passage, Attorney General Herring stated, “Now, local public employees have the ability to be recognized as a labor union, allowing themselves to organize and advocate for the benefits they deserve. . .For too long, Virginia’s worker protection laws have been too weak and I will continue this fight to strengthen protections for the people who keep our communities moving forward.”

 Privacy

  • The Florida legislature failed to pass a consumer privacy law when the legislative session ended on April 30, 2021 without legislators reaching an agreement over the law’s private right of action.

Companies who make ambitious marketing claims about purported clean energy efforts may find that they are exposed to litigation under the District of Columbia Consumer Protection Procedures Act (DCCPPA). The DCCPPA is an expansive consumer protection law that confers standing on any person, or nonprofit organization, to sue either on behalf of herself or “in the public interest” for false advertising. A recent DCCPPA lawsuit against energy giant, Exxon Mobil Corporation, serves as the latest example of a swelling risk to corporate defendants who may be subject to suit in the Superior Court of the District of Columbia. Companies should thus carefully advertise their clean energy efforts, or other forward-leaning activities, in a manner that closely and accurately reflects the steps it is taking to achieve those goals.

Continue Reading DC’s Consumer Protection Law Presents Risks for Companies Advertising Clean Energy Efforts: Just Ask Exxon