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

Multistate

  • A multistate coalition of 24 attorneys general filed an amicus brief in the U.S. Supreme Court in support of the Consumer Financial Protection Bureau. In their amicus brief for Consumer Financial Protection Bureau v. Community Financial Services Association of America, the attorneys general support the CFPB’s contention that the agency’s funding structure is constitutional and argue that the court should not invalidate the CFPB’s past and ongoing regulatory and enforcement actions even if it determines that the agency’s current funding structure is not constitutional. Those regulatory and enforcement actions cover all aspects of consumer financial markets.
  • The state attorneys general of New Jersey, Oregon, and Florida co-led an overall $2.5 million settlement with EyeMed Vision Care that resolves an investigation into a data breach that compromised the personal and medical information of approximately 2.1 million people, including more than 52,000 from New Jersey. Pennsylvania also joined in the multistate settlement.
  • The U.S. Department of Health and Human Services reported the discovery of a data breach involving cybersecurity company Fortra, which may have affected more than four million people worldwide. This attack specifically targeted medical data. Affected organizations include Hitachi Energy, Saks Fifth Avenue, Procter & Gamble, NationBenefits, and many more organizations across the United States and world.

California

  • California Attorney General Rob Bonta publicized that the former president of a purported mortgage “investment” company, Robert Sedlar, has been convicted of 100 felony counts for operating a mortgage fraud scheme throughout California. The scheme resulted in a combined loss of over $7 million. The victims, including people who were elderly and in financial distress, sought mortgage relief services from Grand View Financial LLC in the counties of San Diego, San Mateo, Alameda, Contra Costa, San Joaquin, Placer, Solano, Mendocino, San Francisco, El Dorado, and Sacramento. 

Colorado

  • Colorado Attorney General Phil Weiser announced that Ifficient, a Denver-based marketing company that uses digital advertising to find potential customers and collect their personal information on behalf of its clients, will pay the state of Colorado $21,250 after the company sold 850,000 Coloradans’ personal information without their consent during a 2017 federal broadband rulemaking campaign.

District of Columbia

  • Washington DC Attorney General Brian L. Schwalb announced a settlement with SoLo Funds Inc., an online fin-tech platform that facilitates and advertises loans to consumers, which resolves allegations that SoLo deceived consumers about the true cost of the loans on its platform and facilitated loans with over 500% APR on average—far exceeding the District’s 24% usury cap.

New York

  • New York Attorney General Letitia James and Acting Department of Health Commissioner Dr. James McDonald warned New Yorkers about a new scam targeting New Yorkers enrolled in public health insurance programs and provided important tips to protect consumers. Attorney General James and Acting Commissioner Dr. McDonald are urging New Yorkers to be vigilant in light of reports of scammers deceptively calling people and asking them to pay hundreds of dollars to maintain their health insurance.

On June 21, Toni Michelle Jackson will speak at the AG Alliance’s 2023 Annual Meeting on the panel, “The Value of Disruptive Healthcare.” This panel will discuss how innovations in healthcare present a variety of new opportunities, risks and challenges for consumers, regulators, healthcare providers, insurance companies, and cybersecurity professionals. Panelists will explore the benefits, questions and considerations of disruptive innovation in the health care delivery system to increase the value of health care delivered.

The AG Alliance (AGA) serves as a bipartisan forum where Attorneys General work in cooperation to share ideas, build relationships, and foster enforcement through meetings, panels, working groups, and social activities.

On May 10th, 2023, the National Association of Attorneys General’s Consumer Protection Spring Conference held a panel on Artificial Intelligence and Deep Fakes. This panel provided an overview of the use of AI in the marketplace, how it is detected, enforcement efforts taken to address consumer harm, and the natural security concern from deep fakes—the AI generated images meant to appear as actual videos of a person speaking. Panelists and moderators included Patrice Malloy (Bureau Chief, Florida Attorney General’s Office), Diane Oates (Senior Assistant Attorney General, Florida Attorney General’s Office), Kashif T. Chand (Deputy Attorney General, Chief, Data Privacy & Cybersecurity Section, New Jersey Attorney General’s Office), Santiago Lyon (Head of Education and Advocacy for the Content Authenticity Initiative, Adobe), and Serge Jorgensen (Founding Partner & Chief Technology Officer, Sylint Group). Key takeaways from the panelists are outlined below.

Artificial Intelligence Insights:

  • Responsibility: Publishers of AI should expect to be held responsible for the content it generates. This responsibility to consumers already exists, but AI is giving more urgency and reach to output. It is important that the publishers explain to the consumer what data is being using and produced.
  • Cyberattacks: The ever-increasing scope and scale that can be accomplished with generative AI allows companies to collect massive amounts of data and quickly disseminate it. After all, AI is only as powerful as the information it has to supply the inputs. This will inevitably lead to AI companies having a so called “target on their backs” for cyber related attacks. Vulnerabilities in AI data storage systems could lead to devastating results such as kids’ mental health records leaking onto the dark web. Panelists suggest that retroactive corrections are needed, like legislation allowing companies to delete previous training sets used to train AI. The panelists also expressed that they anticipate seeing this type of legislation at the state, federal, and international levels.
  • Intellectual Property: The increase in the use of AI has occurred without comparative copyright and trademark laws being enacted to allow use of others’ intellectual property to generate images. This has led to lawsuits against publishers by creators whose content was fed into AI algorithms. The panelists raised points about how regulators can regulate improper use of inputs by regulating the data training set at the outset. 
  • Consumer Education and Protection: The panelists noted that media literacy and provenance education being added to classwork would greatly assist consumers’ choices in using AI and ability to protect oneself. This type of transparency is critical and an important matter of consumer protection because they should have an opportunity to learn about data harvesting and content creation that AI companies use to create their products and services. For example, Finland introduces media literacy coursework in primary school.
  • Regulations: Law makers are in a challenging position as they balance the need for regulating AI and the potential for unintended negative implications. For instance, laws that require TikTok users to be over the age or 13 has incentivized children across the country to lie about their age. One alternative, could be to install trackers on devices that prevent children of a certain age from accessing information. 

Deep Fake Insights:

  • Personal Protection: Allowing a company to create an avatar of you from large amounts of visual media and record your voice from a large scope of spoken sounds will enable deep fake creators to make one of you. This is happening to actors, like Tom Cruise, who already have this media out in the public.
  • Evidentiary Concerns: The panelists showed concern about the potential for deep fakes to jeopardize video evidence authenticity, or defenses being asserted that real videos were instead deep fakes. Recently, Elon Musk’s lawyers have asserted that a video of Musk in a trial over autonomous car functionality was a deep fake. The panelists suggested a couple of solutions including stronger authenticity labels and acknowledgments be required for deep fakes. The downside to these options is that they will require significant time to establish.
  • Collective Change: The panelists all stated that the threat of deep fakes and AI being used for improper means will take both communal and legal effort. Industry standards must be adopted for private entities to fight against AI learning material it is not meant to learn. In addition, regulations and initiatives like a federal digital ID, prevention of nonconsensual explicit material, and retroactive clean-up of leaked data will be needed to combat consumer harm from deep fakes and AI. The panelists agreed that they are attempting to address the issues at the point of creation before harm and confusion is already made. The panelists also reinforced the idea that state Unfair or Deceptive Act or Practice statutes will be an important tool as states learn to protect its consumers from negative outcomes related to AI advances.

To stay up to date on the latest actions taken by state attorneys general, sign up for Crowell & Moring’s State AG Blog.

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

Multistate

  • A coalition of 17 state attorneys general sent a letter to the U.S. Environmental Protection Agency and the National Oceanic and Atmospheric Administration urging the agencies to evaluate their authority under the Clean Water Act to regulate microfiber pollution, and to direct funding and research into the environmental and health harms caused by microfibers and washing machine technology solutions.
  • A coalition of 11 state attorneys general announced a settlement with Visibly Inc (f/k/a Opternative Inc.), an online telehealth company that markets and sells an online vision test, among other products, resolving an investigation into deceptive business practices. The investigation, which began after a letter from the U.S. Food and Drug Administration warned Visibly about some of its marketing tactics, raised concerns about unsubstantiated claims made by Visibly regarding the accuracy and safety of its online test, including that it was as accurate as an in-person exam. In addition, the investigation evaluated Visibly’s misrepresentations about other product aspects, including customer satisfaction rates and satisfaction guarantees. According to the settlement, Visibly must pay monetary relief and follow a number of injunctive practices, such as not marketing or selling any product to consumers unless it can be legally marketed or sold in accordance with the Food, Drug and Cosmetic Act or other FDA authority.
  • A coalition of 19 state attorneys general sent a letter to JPMorgan Chase & Co. urging the company to stop engaging in discriminating practices against consumers due to their religious or political affiliations. The attorneys general argue that Chase “has not extended its openness and inclusivity to everyone,” and points out the company’s alleged pattern of targeting and denying service to religious and conservative-leaning customers, like the National Committee for Religious Freedom, which has a leadership made up of Hindu, Muslim, Jewish, Christian, and people of various faiths. The coalition’s letter also calls for greater transparency in how the bank treats viewpoint diversity.

Colorado

Connecticut

  • Connecticut Attorney General William Tong announced a settlement with Integrity Admin Group, Inc., a home warranty company, resolving allegations that the company engaged in misleading marketing practices such as high-pressure mailings that created a false sense of urgency with phrases like “final notice” and “immediate response requested.” As part of the settlement, Integrity Admin Group has agreed to pay $10,000 and has committed to end its allegedly deceptive marketing practices.
  • Connecticut Attorney General William Tong and United States Attorney Vanessa Roberts Avery announced a civil settlement with Northeast Medical Group and Yale New Haven Health Services Corp. totaling $560,718, which resolves allegations that the entities overbilled the federal Medicare and Connecticut Medicaid programs.

Michigan

  • Michigan Attorney General Dana Nessel issued a cease-and-desist letter to Intoxalock, a company that manufactures, sells, and installs “breath alcohol ignition interlock devices”, regarding misleading advertisements. According to the Office of the Attorney General, the company has been contacting individuals who have entered pleas for operating while intoxicated but have not been sentenced. The advertisements also allegedly appear to come from a governmental entity or to reflect a mandatory obligation resulting from a legal proceeding. The solicitations identify consumers, by name and address, as having been charged with OWI offenses. In addition to the consumers’ name and address, the solicitations purport to identify the consumers’ arrest date and a “charge code” of OWI.

New Jersey

  • New Jersey Attorney General Matthew J. Platkin and Governor Phil Murphy announced that all 21 counties and 241 municipalities eligible for direct distributions have signed onto the nationwide settlement agreements with pharmacy chains Walgreens, and Walmart, and drug makers, Teva Pharmaceuticals and Allergan, resolving allegations that these entities contributed to the country’s opioid crisis. The state and its eligible counties and municipalities will receive approximately $508.1 million under the settlement. Teva, Allergan, CVS, and Walgreens are expected to announce by June 8, 2023, whether their settlements will go forward, which depends on whether enough state subdivisions from around the country have signed on. The Walmart settlement is effective once sign-on is achieved by a specific percentage of the aggregate population of litigating subdivisions and the aggregate population of other subdivisions. The State of New Jersey is expected to receive opioid abatement funds from all five companies, which will be split 50/50 between the State and its eligible subdivisions pursuant to the Memorandum of Agreement Between the State of New Jersey and Local Governments on Opioid Litigation Recoveries.

New York

  • New York Attorney General Letitia James and California Attorney General Rob Bonta announced a joint investigation into allegations of employment discrimination and a hostile work environment at the National Football League. The company has offices in both states with more than 1,000 employees. The joint investigation will examine the workplace culture of the NFL and allegations made by former employees, including potential violations of federal and state pay equity laws and anti-discrimination laws. This isn’t the first time the NFL has been accused of improper workplace practices. In April 2022, Attorney General James led a coalition of six attorneys general in a letter sent to NFL Commissioner Roger Goodell to express their concerns and call on the league to address allegations of workplace inequity. In addition, multiple lawsuits have been filed against the NFL alleging, age, sex, and gender discrimination, a hostile work environment, and sexual harassment.
  • New York Attorney General Letitia James released a statement in support of the new rules announced by President Joe Biden’s administration requiring airlines to compensate passengers for cancellations or significant delays. The statement noted that airlines have inconvenienced millions of Americans by overbooking flights and that “New Yorkers, and all Americans, deserve to know that airlines will live up to their promises, and pay the consequences when they are at fault for cancellations and delays.”
  • New York Attorney General Letitia James announced legislation to tighten regulations on the cryptocurrency industry to protect investors, consumers, and the broader economy. The bill would require independent public audits of cryptocurrency exchanges and prevent individuals from owning the same companies, such as brokerages and tokens, to stop conflicts of interest. Crypto platforms would also have responsibilities to customers similar to banks under the federal Electronic Fund Transfer Act by requiring platforms to reimburse customers who are the victims of fraud. The bill would also strengthen the New York State Department of Financial Services’ regulatory authority of digital assets. The bill proposes one of the strongest and most comprehensive set of regulations on cryptocurrency in the nation.

Washington

  • Washington Attorney General Bob Ferguson announced a lawsuit against two Wyoming-based businesses and their owner, Cameron Groom,  for sending hundreds of thousands of allegedly deceptive texts and emails to Washington businesses and nonprofits. Tens of thousands of text message solicitations, designed to appear as though they were sent from the Washington Secretary of State, demanded $200 to file annual reports with that office. The texts also did not disclose that businesses can file required annual reports directly with the Secretary of State’s Office for $60. The complaint seeks restitution for affected businesses, interest, and civil penalties.

West Virginia

  • West Virginia Attorney General Patrick Morrisey announced a settlement with Kroger for $68 million, resolving allegations that the pharmacy chain failed to maintain effective controls as a distributor and dispenser against diversion that contributed to oversupply of opioids in the state. Kroger has agreed to pay $34 million immediately, $12 million on June 30, 2024, and $12 million on June 30, 2025, and then a series of lower payments over the next seven years totaling $10 millin to reach the $68 million total. The money from all opioid settlements will be distributed under the terms of the West Virginia First Memorandum of Understanding which allows for the creation of the West Virginia First Foundation.

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

Multistate

  • A multistate coalition of 16 attorneys general sent comments to the Federal Trade Commission (“FTC”) urging it to strengthen its Green Guides to support consumer protection laws against advertising that engages in “greenwashing,” or overstates environmental benefits. Specifically, the coalition is asking the FTC to include targeted guidance towards certain environmental claims, such as making explicit that “recyclable” means that when the consumer properly disposes of the item it is actually recycled as a matter of course.
  • A multistate coalition of 18 attorneys general sent a letter to the Federal Trade Commission (“FTC”) in support of its proposed rule that would eliminate non-compete clauses in most types of employment contracts. The coalition believes this rule will increase competition and fairness, benefit low and middle-wage workers, and promote gender and racial equity. The coalition is also asking the FTC to confirm that the rule does not replace state laws providing similar or increased protections.
  • A multistate coalition of 18 attorneys general wrote a letter in support of a proposed federal rule that would require increased transparency about the true ownership of nursing facilities. The coalition believes this transparency will allow states to more successfully investigate and prosecute crimes related to the management of nursing homes.
  • A multistate coalition of attorneys general wrote a comment letter to the U.S. Department of Energy, asking it to adopt a proposal to tighten energy conservation standards for conventional cooking products. Specifically, the rule would set performance standards for new electric and gas stoves and bolster design standards for ovens. The coalition believes the proposed rule would result in economic, health, and environmental benefits.
  • A multistate coalition of 18 attorneys general filed a comment letter in support of the U.S. Department of Housing and Urban Development’s proposed rule which would strengthen fair housing protections and urging the agency to enhance protections against housing discrimination and segregation. Specifically, the proposed rule would implement the Affirmatively Furthering Fair Housing rule by protecting against illegal discriminatory housing practices and promoting residential integration.

California

  • California Attorney General Bonta applauded the Ninth Circuit Court of Appeals’ ruling in Epic Games v. Apple, affirming a district court ruling that Apple violated state law by prohibiting app developers from telling consumers how to pay for their apps and subscriptions outside of the App Store.
  • California Attorney General Bonta issued an alert after a state of emergency was declared following several severe winter storms. The alert reminds businesses that the state’s price gouging law is in effect.

Colorado

  • Colorado Attorney General Weiser announced a settlement with predatory lender EasyPay, banning the lender from operating within the state and resolving allegations that the lender partnered with an out-of-state bank to get around state interest rate limits. The settlement includes $375,000 in restitution and costs and fees, and also requires the company to reduce rates on its existing loans and stop collecting on defaulted ones.

Massachusetts

  • Massachusetts Attorney General Campbell announced a $300,000 settlement with Eastern Metal Recycling Terminal, LLC, Patriot Stevedoring and Logistics, LLC, and Brayton Point, LLC, the owners and operators of a former scrap metal facility. The settlement resolves allegations that the named entities unlawfully discharged industrial stormwater and emitted dust and noise pollution into the surrounding water and environment in violation of the federal Clean Water Act and Clean Air Act and the Massachusetts Clean Air Act.

Missouri

  • Missouri Attorney General Bailey announced that his office obtained a $27,000 judgment against former car dealership Var-iety Auto’s, LLC, in an effort to recoup the losses of consumers who allegedly purchased cars but never received certificates of title or the warranty work they were promised.

New York

  • New York Attorney General James announced her release of a guide that will help businesses use effective data security measures to protect consumers’ personal information. Specifically, the guide includes recommendations for how companies can secure data to prevent breaches, such as encrypting sensitive information, ensuring service providers use reasonable security measures, and protecting against automated attacks.

North Carolina

  • North Carolina Attorney General Stein issued a consumer alert related to fake online reviews. In addition to giving consumers advice on how to spot fake reviews, the alert encourages consumers to report instances in which they believe businesses failed to advertise goods and services truthfully.

Oklahoma

  • Oklahoma Attorney General Drummond announced that the state’s Emergency Price Stabilization Act is in effect in five counties which were most impacted by tornadoes and severe weather.

Washington

  • Washington Attorney General Ferguson announced that House Bill 1329, which protects consumers from utility shutoffs during periods of extreme heat, was signed into law. Specifically, the bill includes a moratorium on utility shutoffs for inability to pay during a Weather Service heat-related alert or warning. The legislation protects access to working refrigerators, running water, and electric fans during extreme heat as well as air conditioning for those with access to it.

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

Multistate

  • A coalition of 18 state attorneys general, filed an amicus brief in support of the District of Columbia in District of Columbia v. Exxon Mobil. In this case, D.C. alleges Chevron and others engaged in unfair and deceptive trade practices in violation of D.C.’s Consumer Protection Procedures Act, and misled the public about their harmful contributions to the climate crisis. The amicus brief explains that states are responsible for protecting their citizens from consumer deception and that D.C.’s claims are about deceptive marketing and therefore do not arise under federal common law nor raise any substantial federal issue.
  • A coalition of 20 state attorneys general sent letters warning more than 50 of the Nation’s largest asset managers with $40 billion or more in assets about making Environmental, Social, and Governance (ESG) investments. The attorneys general cite concerns that asset managers may be pushing the political goals of Climate Action 100+ and the Net Zero Asset Managers Initiative rather than acting in the best fiduciary interests of their clients, which is their legal obligation.

California

  • Attorney General Rob Bonta, and Assembly member Brian Maienschein (D-San Diego), announced new legislation, Assembly Bill 1366 (AB 1366) to protect victims of predatory businesses that have violated California consumer protection laws. The legislation would establish a new Victims of Consumer Fraud Restitution Fund in the state Treasury that would be funded by the penalties paid by businesses that violate the law, and would be used to help make victims whole. Specifically, AB 1366 would allow the Attorney General to seek the remedy of disgorgement in actions brought under the Unfair Competition Law and False Advertising Law. These funds would be held in the new Restitution Fund as a future source of funding to help provide restitution to victims who cannot otherwise be made whole by the defendant who defrauded them. 

Massachusetts

  • Attorney General Andrea Joy Campbell announced a settlement with the owners of three C-Mart, supermarket stores, which specialize in the sale of Asian cuisine. The settlement resolves allegations that the defendants violated state labor laws, including failure to pay overtime and premium pay to its workers. The defendants were issued a number of citations, the result of an investigation by the AG’s Fair Labor Division which concluded that C-Mart stores failed to furnish true and accurate payroll records, failed to post required workplace notices, including earned sick time posters, and did not properly pay workers for overtime hours or for hours worked on Sundays. According to the settlement, C-Mart is required to pay $800,000 in restitution and civil penalties.

Ohio

  • Attorney General Dave Yost announced a lawsuit against 614 Custom Homes, Inc., a home remodeling company, and its owner. According to the complaint, the defendants failed to deliver services after taking consumers’ deposits or, in other instances, performed shoddy and incomplete work before abandoning the projects. The complaint seeks, injunctive relief, restitution, and civil penalties.
  • Attorney General Dave Yost announced a lawsuit against Ohio Clean Water Fund and its owner for allegedly  falsely claiming to collect donations to benefit residents of East Palestine following the Norfolk Southern train derailment. According to the complaint, the defendants have pocketed at least $131,000 of the roughly $141,000 raised from more than 3,000 donors. Attorney General Yost is seeking a temporary restraining order and a preliminary injunction, restitution, and civil penalties.  

Washington

  • Attorney General Bob Ferguson announced a settlement for $35 million with 19 different chicken producers, resolving allegations that the defendants price-fixed chicken products.
  • Attorney General Bob Ferguson announced a lawsuit against Puppyland, a breeder, and its owners for allegedly failing to honor advertised health guarantees and channeling customers into predatory loans with illegal terms restricting truthful reviews. According to the complaint Puppyland misrepresented the breeding standards of puppies it sold and the health guarantees they offered, while unfairly maneuvering buyers into signing predatory loans with interest rates approaching 200% without adequate time to understand the terms. The complaint alleges violations of the state’s deceptive and unfair advertising and sales practices laws.

Washington, D.C.

  • Attorney General Brian L. Schwalb announced a settlement with Pro-Football Inc., the corporation that owns the Washington Commanders, resolving allegations that the team failed to return ticket holders’ deposits and intentionally created hurdles for fans seeking to collect refunds. According to the settlement, the company will return over $200,000 to affected customers and $425,000 to the District.

West Virginia

  • Attorney General Patrick Morrisey announced a settlement with Juul, the e-cigarette company, resolving allegations that the company engaged in unfair or deceptive acts or practices in the manufacturing, sale, and marketing of the product, especially in its marketing targeting underage users. Juul is required to pay a total of $7.9 million.

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

Multistate

  • A multistate coalition of seven state attorneys general secured $462 million in a settlement agreement with JUUL Labs Inc., and its former directors and executives, for contributing to the rise in underage e-cigarette vaping nationwide. In addition to the payment, the agreement requires that JUUL secure its products behind retail store counters and verify the age of consumers that directly sell or promote its products online.
  • Massachusetts Attorney General Andrea Joy Campbell led a coalition of attorneys general to call on the EPA to ensure that the benefits of EPA’s Environmental and Climate Justice Block Grant Program reach underserved communities as intended under the Inflation Reduction Act.
  • A multistate coalition challenged the decision issued by the U.S. Court of Appeals for the Fifth Circuit that would leave in place restrictions on access to mifepristone imposed by a Texas trial court, and as a result restrict access to medication abortion nationwide. The amicus brief, filed in the United States Supreme Court, urges the court to stay pending appeal the Court of Appeal’s ruling, which if allowed to take effect would halt the approval from the FDA of a generic version for the medication abortion drug.

California

  • California Attorney General Rob Bonta announced the successful resolution of a lawsuit that led to dramatic improvements in the services and operation of a Santa Cruz County skilled nursing facility, the Hearts and Hands Post Acute & Rehab Center.

Florida

  • Florida Attorney General Moody filed a complaint against a company for helping businesses avoid credit card chargebacks from consumers. Attorney General Moody and the Federal Trade Commission allege that Chargebacks911 and its owners are engaging in deceptive and unfair practices in violation of Florida law and the FTC Act by wrongfully impeding consumers’ attempts to dispute credit card charges through the chargeback process.

Kentucky

  • Kentucky Attorney General Daniel Cameron announced that action taken by his Department of Criminal Investigations resulted in a guilty plea of Allison Donaldson for wire fraud and identity theft. Between October 2020 and February 2022, Donaldson used City of Covington credit cards to make over $180,000 in personal purchases.

Indiana

  • Agents from the Indiana Secretary of State’s auto dealer licensing and enforcement division have joined the Attorney General’s investigation into a Northeast Indiana auto dealership accused of rolling back odometers. Flexible Auto Sales, LLC located in LaGrange County is accused of scamming dozens of Hoosier auto buyers.  A lawsuit filed claims the business, owned and operated by John Allen in Shipshewana, rolled back millions of miles on the odometers.

Minnesota

  • Minnesota Attorney General Keith Ellison publicized that his office has settled its case against JUUL and Altria for deceptively marketing e-cigarettes, which became popular among Minnesota’s youth. Of the more than a dozen states and hundreds of local governments that have sued JUUL, Minnesota was the first to go to trial.

Pennsylvania

  • Pennsylvania Attorney General Michelle Henry publicized a bipartisan national settlement that holds an online telehealth company responsible for misrepresenting the accuracy and fairness of services, and for failing to obtain approvals from the FDA.

Washington

  • Washington Attorney General Bob Ferguson published a press release regarding Senate Bill 5078, which passed the Legislature and is headed to Governor Jay Inslee for his signature. The bill stipulates that firearms manufacturers and sellers will face liability if they fail to establish, implement and enforce reasonable controls in the manufacture, sale, distribution and marketing of firearms to keep them out of the hands of dangerous individuals.
  • Attorney General Ferguson partnered with Rep. Vandana Slatter to pass a bill intended to close the gap on health data privacy protections, provide Washingtonians more control of their health data and protect those who come from out of state to access reproductive and gender-affirming care.

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

Multistate

  • A coalition of 8 state attorneys general and the U.S. Department of Justice filed an antitrust lawsuit to block JetBlue’s purchase of Spirit Airlines, alleging that the deal would lower competition, increase costs, and potentially harm reliability for fliers. JetBlue proposed a $3.8 billion takeover of Spirit. Spirit is the largest and fastest-growing budget airline. The lawsuit alleges that if JetBlue buys Spirit, it will create a larger airline that has less incentive to offer cheap flights.
  • A coalition of 22 state attorneys general announced support of a Biden Administration proposed policy to abandon the current approach used to determine the eligibility of members of the LGBTQ population’s ability to donate blood. The current policy recommends barring gay and bisexual men from donating blood within three months of their most recent sexual contact, regardless of risky behavior and context. In January, the U.S. Department of Health and Human Services and the U.S. Food and Drug Administration proposed guidance that would instead use a risk-based analysis for all donors, regardless of gender and sexual orientation. This policy update will increase the available blood supply and reduce stigmatization.
  • A bipartisan coalition of 45 state attorneys general and the federal government negotiated a payment of more than $12.6 million in damages nationwide in a multistate action against Advanced Bionics Corporation, a manufacturer and distributor of cochlear implants. Advanced Bionics Corporation allegedly violated the federal and various state False Claims Acts by submitting false or fraudulent claims for reimbursement to federal health programs, including Medicaid. The action resolves allegations that Advanced Bionics Corporation knowingly submitted false or fraudulent claims for reimbursement for cochlear device systems during a nine-year period, specifically the allegation that the company misled the Food and Drug Administration to receive approval of the Neptune and Nadia sound processors.

Arizona

  • Arizona Attorney General Brnovich filed a civil lawsuit against Pearl Bridal and its owners for allegedly using false advertising and deceptive practices to collect hundreds of thousands of dollars in prepayments for wedding dresses before abruptly shutting down the business. Pearl Bridal had almost $300,000 in unfulfilled customer orders. The complaint alleges Pearl Bridal lured consumers into their Phoenix storefront and required upfront payments, promising a dress in six to nine months.

Hawaii

  • Hawaii Deputy Attorney General Kimura received the 2023 Distinguished Service Award from the National Association of Attorneys General Antitrust Task Force. The highly prestigious award is given for exemplary service to the Antitrust Task Force, which is made up of antitrust attorneys from across the country responsible for coordinating multistate antitrust litigation efforts. For almost thirty years, Kimura has been the primary, and at times sole, antitrust enforcer for the state of Hawaii.

Missouri

  • Missouri Attorney General Bailey announced twelve felony counts of deceptive business practices against an individual for criminally defrauding five Franklin County consumers in connection with his businesses, Concrete Impressions and All Pro Concrete. The individual promised concrete services and other exterior remodeling work in exchange for large sum down payments, but minimal amounts of work were completed. The losses totaled over $50,000 for consumers.

New York

  • New York Attorney General James announced an agreement to end anti-worker practices by Fidelity National Financial, Inc., the nation’s largest title insurance company. An investigation by the Office of the Attorney General found that Fidelity and its competitors entered into illegal no-poach agreements where they would not solicit each other’s employees. The agreement requires Fidelity to terminate any existing no-poach agreements, pay New York $3.5 million, and cooperate with the Office of the Attorney General in ongoing investigations in the title insurance industry.

Ohio

  • Ohio Attorney General Yost sued a Wapakoneta construction company for accepting approximately $200,000 in payments from consumers who complained that the work was either never started or not finished properly. The lawsuit contends that Grizzly Buildings violated Ohio’s Consumer Sales Practices Act, Home Solicitation Sales Act and Home Construction Service Suppliers Act. The lawsuit requests that Grizzly Buildings be ordered to reimburse consumers and pay civil penalties.

Pennsylvania

  • Pennsylvania Attorney General Henry filed a petition seeking sanctions against Aptive Environmental, LLC, a Utah-based pest control company. The sanctions include an action to prevent Aptive from conducting business in the state of Pennsylvania. The petition alleged that Aptive violated the terms of a 2019 settlement agreement ordering Aptive to comply with Pennsylvania’s Unfair Trade Practice and Consumer Protection Law. The Petition alleges that Aptive went door-to-door soliciting work without permits and did not abide by customers’ request to cancel services.

Washington

  • Washington Attorney General Ferguson conducted a statewide poll that indicated more than three-quarters of Washingtonians support the personal health data protections in the My Health My Data Act. Attorney General Ferguson is partnering with state lawmakers to propose the legislation, which had already passed the Washington House on March 4, 2023, in a 57-39 vote. The bill will now go to the Washington Senate. It requires entities who collect Washingtonians’ personal health data must maintain and publish a privacy policy concerning consumers’ health data and block entities from collecting, sharing, or selling Washingtonians’ health data without their consent.

West Virginia

  • West Virginia Attorney General Morrisey filed a lawsuit against two California attorneys, who were not licensed to practice in West Virginia, for allegedly deceiving West Virginia consumers regarding debt relief services. The attorneys allegedly failed to settle customer accounts, refusing to return tens of thousands of dollars to clients.

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

Multistate

  • A bipartisan coalition of 27 state attorneys general sent a letter to Congress, asking it to pass sweeping Right-to-Repair legislation related to automobiles, digital electronic equipment, and agricultural equipment. The coalition argues that the legislation would allow farmers to repair agricultural equipment at a reasonable cost, permit consumers to repair electronics instead of replacing them where appropriate, and allow small businesses to stay competitive against closed systems that Original Equipment Manufacturers prefer.
  • A multistate coalition of state attorneys general sent a comment letter to the U.S. Food and Drug Administration applauding its proposed guidance geared towards reducing lead in processed food products for infants and young children. The letter also encourages the FDA to expand and bolster this guidance, by including foods intended for children 36 months and younger, applying it to grain-based snacks, and expressly providing that manufacturers of covered products must conduct testing of finished products before they are sold.
  • A multistate coalition of state attorneys general sent a letter to the U.S. Environmental Protection Agency, seeking nationwide restrictions on the use of the pesticide sulfoxaflor, which is known to be very toxic to bees and other pollinating organisms. The coalition argues that the pesticide’s use could ultimately harm the U.S. economy and its food security and asks the EPA to adopt reasonable restrictions on its use and to conduct further research into its environmental and health implications.
  • A coalition of 17 state attorneys general filed an amicus brief with the U.S. Court of Appeals for the First Circuit in Estados Unidos Mexicanos v. Smith & Wesson Brands et al. In its brief, the coalition argues that the Protection of Lawful Commerce in Arms Act does not exempt gun manufacturers and dealers from liability when they violate federal and state laws covering the marketing and sale of firearms.

Alaska

  • Alaska Attorney General Taylor announced a settlement with Bellissima Cosmetics, resolving allegations that the company solicited consumers to purchase cosmetics at the Alaska State Fair, but failed to honor consumers’ right to return the products within five days. This conduct violated state law that requires business representatives who solicit consumers to make a purchase over $10 who live outside of the seller’s place of business to give the purchaser written notice that they can revoke the purchase within five business days.

Arkansas

  • Arkansas Attorney General Griffin announced a lawsuit against pool company H2O Pools and Supplies, LLC and its owner for violating the Arkansas Deceptive Trade Practices Act by, among other things, failing to provide purchased goods and perform services contracted for and harassing those who posted social media complaints. The lawsuit seeks an injunction, civil penalties, and restitution.
  • Arkansas Attorney General Griffin filed three lawsuits against social media companies Meta, TikTok, and TikTok’s parent company ByteDance. The lawsuits accuse the companies of deceptive behavior in targeting children, by using addictive algorithms and misleading the public about the lack of availability of adult content to underage users.

California

  • California Attorney General Bonta announced that Governor Newsom signed his cosponsored legislation, which would impose robust state-level oversight and accountability measures over the oil and gas industry. Specifically, the law, which goes into effect on June 26, creates an independent watchdog to detect price gouging by oil companies and allows the California Energy Commission to develop a penalty for accountability.

Illinois

  • Illinois Attorney General Raoul announced that the Illinois House of Representatives passed his proposed legislation, House Bill 1541, which would amend the Public Utilities Act to protect consumers from gas or electric utility service disconnection for nonpayment of bills when temperatures are 90 degrees Fahrenheit or higher, or when the National Weather Service has issued an excessive heat watch, heat advisory, or excessive heat warning. Attorney General Raoul also announced that the Illinois House of Representatives passed his proposed legislation, House Bill 2222, which would increase oversight of healthcare related transactions, specifically mergers and acquisitions that include health care facilities and large provider organizations, by ensuring their review at the state level.

Massachusetts

  • Massachusetts Attorney General Campbell announced a settlement with the owners and managers of single-occupancy apartment building Our Lady’s Guild House, resolving allegations that the defendants engaged in age and disability discrimination against long-term tenants. The settlement includes a $115,000 payment and deed restrictions.

New Jersey

  • New Jersey Attorney General Platkin announced a lawsuit against the Dow Chemical Company, Ferro Corporation, and Vulcan Materials Company, along with other unnamed companies, for 1,4-dioxane contamination across the state, which damages natural resources. The lawsuit seeks damages and penalties, and alleges consumer fraud and environmental claims.

New York

  • New York Attorney General James announced a $200,000 settlement with law firm Heidell, Pittoni, Murphy & Bach LLP for failing to protect consumers’ personal and healthcare-related data in a 2021 data breach involving over 60,000 New Yorkers. In addition to the monetary penalties, the settlement requires the law firm to strengthen its cybersecurity practices.

North Carolina

  • North Carolina Attorney General Stein applauded North Carolina General Assembly members for introducing the Unfair Real Estate Agreements Act, which would protect homeowners in the state from predatory, long-term real estate contracts.

Pennsylvania

  • Pennsylvania Attorney General Henry announced a settlement with ticket reseller website www.boxofficeticketsales.com, which is run by Secure Ticket Purchase, LLC, for state consumer protection law violations including changing its policy to eliminate refunds for cancelled events and only offer “store credit” instead. The attorney general’s office also alleged that Secure failed to require individuals intending to resell tickets at a higher price to first obtain a license, in violation of state law. The settlement includes injunctive relief, consumer refunds, and restitution.

South Carolina

  • South Carolina Attorney General Wilson announced that his office issued a cease and desist order against internet personality Michael T. Glaspie, also known as “Mike G.,” and several companies he owns for selling unregistered securities to consumers while omitting relevant facts. The cease and desist order gives Glaspie 30 days to request a hearing before it is final.

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

Multistate

  • Many attorneys general, as well as the National Association of Attorneys General, announced the celebration of National Consumer Protection Week occurring March 5-11, 2023. The goal of National Consumer Protection Week is to highlight consumer rights and best practices to avoid the most common types of fraudulent schemes.
  • A bipartisan coalition of forty-seven attorneys general filed an amicus brief asking a state court to order social media company TikTok, Inc. to preserve and produce company communications critical to a multistate investigation of TikTok’s potential unlawful and dangerous activities. The state attorneys general seek internal communications to determine whether TikTok engaged in deceptive and unfair conduct that harmed the mental health of TikTok users, particularly children. The brief argues that TikTok repeatedly and knowingly failed to preserve relevant information or provide information in a useful format.
  • A coalition of three attorneys general and the U.S. Department of Justice filed a complaint in federal district court in Boston seeking to halt JetBlue Airways Corporation’s acquisition of Spirit Airlines. The complaint asserts that the acquisition removes a major source of competition for other airlines and would harm consumers seeking affordable air travel because Spirit Airlines is the largest low-cost carrier in the United States.
  • A bipartisan coalition of eight attorneys general obtained judgments against Rising Eagle Capital Group LLC and JSquared Telecom LLC shutting down a robocall operation that made billions of illegal robocalls. The coalition sued the defendants in mid-2020 alleging violations of the federal Telephone Consumer Protection Act and the federal Telemarketing Sales Rule, as well as other state consumer protection laws. The complaint alleged the defendants flooded consumers with calls regarding a variety of scams involving car warranties and health care services.
  • A coalition of twenty-two attorneys general, led by Massachusetts Attorney General Campbell, submitted a letter to the Centers for Disease Control and Prevention and National Center for Health Statistics advocating for a new diagnostic code for Pre-exposure Prophylaxis (PrEP), a HIV prevention drug, in the International Classification of Diseases – Tenth Revision. The new diagnostic code would reduce coding ambiguity and ensure that patients are not improperly charged copays for preventative services.
  • A coalition of nineteen attorneys general, led by Missouri Attorney General Bailey, submitted letters to five major pharmacies warning them that distribution of abortion pills in the mail violates federal and state law. These letters follow a prior set of letters sent to CVS and Walgreens in February, but now address Rite Aid, Albertsons, Costco, Kroger and Walmart. These letters follow the Biden administration’s endorsement of utilizing the mail service to distribute abortion pills.

Arkansas

  • Arkansas Attorney General Tim Griffin announced two separate lawsuits against solar panel companies, Sun Valley Renewables, LLC and Cavalry Solar Solutions d/b/a Apollo Energy, for allegedly violating the state’s Deceptive Trade Practices Act. According to the complaints, the defendants have failed to perform contracted services or provide purchased goods. Consumer complaints filed against both companies amount to almost $3,000,000.

Arizona

  • Arizona Attorney General Kris Mayes announced a settlement with two real estate companies, Deed and Note Traders, LLC, 881Home, LLC, and their manager, David Kinas, resolving allegations that the defendants had a pattern and practice of hiding or misrepresenting underlying mortgages for the homes they were selling, e.g., oppressing material facts about the existence of the underlying mortgage and mispresenting the feasibility of the consumers refinancing their seller carryback mortgages. The settlement requires defendants to pay $350,000 in consumer restitution and $25,000 in civil penalties. 

California

  • California Attorney General Rob Bonta issued a statement in response to a call from the Biden Administration and the Consumer Financial Protection Bureau for the states to better address the nationwide concern of hidden fees, as referred to as “junk fees”. In line with that, Attorney General Bonta urged the California Legislature to approve Senate Bill 478 (SB 478), which intends to prevent platforms from tacking mandatory hidden surcharges like service and order processing fees onto purchases.
  • California Attorney General Rob Bonta issued a consumer alert on the heels of Governor Newsom’s declaration of a state of emergency. Attorney General Bonta urged Californians to take precautions amidst the ongoing series of storms and reminded companies that price gouging during a state of emergency is illegal under Penal Code Section 396.

Colorado

  • Colorado Attorney General Weiser announced the Department of Law is establishing a new consumer complaint referral program that will seek to resolve disputes between consumers and businesses through informal negotiations overseen by the department. The program builds off a one-year pilot program and was created to address the thousands of complaints received by the department.

Connecticut

  • Connecticut Attorney General Tong sued four out-of-state firearm dealers for selling and advertising illegal, untraceable ghost gun parts in Connecticut. Connecticut banned the sale and receipt of unfinished frame and receiver gun components lacking serial numbers or unique identification in 2019. Despite this ban, defendants Indie Guns of Florida, Steel Fox Firearms of Florida, Hell Fire Armory of North Carolina and AR Industries of Utah each sold and shipped these ghost gun parts to an undercover investigator. The defendants ship ghost gun parts directly to consumers without confirming whether the consumers are licensed to possess a firearm.

Louisiana

  • Louisiana Attorney General Jeff Landry announced a lawsuit against a number of drug manufacturers and pharmacy benefit managers (PBMs) including, Sanfoi-Aventis U.S., and Novo Nordisk, Inc. According to the complaint, the defendants have allegedly colluded to or been complicit in raising the prices of insulin. The lawsuit seeks restitution, disgorgement, civil penalties and reimbursement for costs and expenses incurred in the investigation and prosecution of the case.

Minnesota

  • Minnesota Attorney General Keith Ellison announced a settlement with Housing Hub, LLC, a property management company, resolving allegations that the company illegally withheld tenants’ security deposits. Pursuant to the settlement, Housing Hub, LLC will pay $63,000 in restitution.
  • Minnesota Attorney General Ellison announced a civil investigation into Kia and Hyundai’s sale of vehicles that allegedly lack industry-standard, anti-theft technology. Civil investigative demands were served on Kia and Hyundai requiring each company to produce documents and answer questions under oath. The purpose of the investigation is to gather information to determine whether Kia and Hyundai violated Minnesota’s consumer protection and public nuisance laws.

Massachusetts

  • Massachusetts Attorney General Campbell secured a preliminary injunction in an ongoing lawsuit against MV Realty, which is allegedly deceptively presenting itself as a real estate brokerage. The preliminary injunction restricts MV Realty from engaging in unfair and deceptive marketing practices or obtaining additional mortgages during the pendency of the litigation as well as release any existing mortgages.

New York

  • New York Attorney General James proposed new price gouging rules to protect consumers during emergencies. New York’s price gouging law was updated in 2020 to grant the Office of the Attorney General rulemaking authority. The proposed rule streamlines investigations to combat price gouging by setting clear guardrails against price increases during emergencies. The proposed rules are open to a 60-day comment period.
  • New York Attorney General Letitia James announced an agreement with Servis One, Inc. d/b/a BSI Financial Services, a mortgage servicer, resolving allegations that the company failed to offer state and federally mandated mortgage relief to homeowners during the COVID-19 pandemic. As a result of an investigation by the Office of the Attorney General (OAG), the OAG learned the extent of BSI Financial Service’s illicit practices. In one instance, a BSI employee instructed a homeowner who had lost their job to use their employment benefits or reduced income to make partial mortgage payments, despite the fact that the homeowner qualified for mortgage relief. Pursuant to the agreement, BSI Financial Services will pay $350,000 in penalties and restitution.

Washington

  • Washington Attorney General Ferguson announced a King County judge found Federal Way Discount Guns and its owner in contempt of court in an ongoing lawsuit over the retailer’s unlawful sales of high-capacity gun magazines. The enforcement action was filed against Federal Way Discount Guns in December of 2022. The court determined that Federal Way Discount Guns intentionally violated the court’s preliminary injunction.
  • Washington Attorney General Ferguson announced Senate Bill 5078, The Firearm Industry Responsibility & Gun Violence Victims’ Access to Justice Act, passed in the state Senate. The bill ensures that gun manufacturers and dealers must take reasonable steps to prevent product distribution to dangerous individuals by making these individuals liable if they fail to establish, implement, and enforce reasonable controls on the manufacture, sale, distribution, and marketing. The bill was jointly requested by Attorney General Ferguson and Governor Inslee. A companion bill is in the House.