Each week, Crowell & Moring’s State Attorneys General team highlights significant actions that State AG’s have taken. Here are this week’s updates.
Monday, December 28, 2020:
Privacy | Data Breach
- Attorneys general from Kentucky, Connecticut, Indiana, Michigan, New Jersey, New York, and Oregon announced a $2 million settlement with CafePress, LLC for a 2019 data security breach exposing about 22 million consumers’ personal information. Under the settlement, $750,000 will be divided among the states immediately, with the remaining $1,250,000 payment suspended. The settlement also includes provisions intended to bolster CafePress’ data security program and better protect consumers’ information in the future.
- A coalition of 23 attorneys general filed an amicus brief in FCC v. Prometheus Radio Project before the Supreme Court, arguing against the Federal Communications Commission’s (“FCC”) repeal of rules that were designed to encourage diversity and local ownership in broadcast media. The coalition is arguing that the new rules the FCC has implemented will decrease representation of minority communities in local media, lead to greater media consolidation, threatening local news coverage, and that the FCC neglected to consider the impact of the rules on diversity in media ownership.
- New York Attorney General James announced that her office has opened an investigation into ParCare Community Health Network for its COVID-19 vaccine distribution. The investigation is in response to allegations that the network wrongfully distributed and administered the vaccines. Attorney General James also warned consumers about scams offering early access to the COVID-19 vaccine, stating that there is no distribution schedule yet for the general population.
Tuesday, December 29, 2020:
- California Attorney General Becerra sued Pacific American Fish Company, Rhee Bros, Seaquest Seafood Corporation, Jayone Foods, and Clearwater Seafoods, a group of seafood importers, distributors, and wholesalers, for allegedly violating Proposition 65 and California’s Unfair Competition Law by selling seafood containing lead and cadmium without warnings required by Proposition 65. In connection with the lawsuit, Attorney General Becerra stated, “When California’s consumers, restaurants, and supermarkets purchase seafood, they shouldn’t have to worry about whether the products they’re buying contain toxic chemicals. The seafood industry has a responsibility to ensure the safety of its products – and to warn consumers of any risks. I hope this lawsuit serves as a warning to any company that might skirt its responsibilities under Proposition 65. The California Department of Justice will hold you accountable.”
- It was announced that on December 14, 2020, a federal advisory committee including Michigan Attorney General Nessel’s office issued recommendations to the Federal Communications Commission on how state and federal government, hospitals, and the telecom industry can prevent illegal robocalls from disrupting hospitals. The recommendations focus on collective efforts and include best practices such as hospital staff education, new government policies, and telecom carrier monitoring.
- Vermont Attorney General Donovan announced a settlement with Chittenden Solid Waste District (“CSWD”) under which the company must pay more than $400,000 for its disposal of recyclable processed glass. CSWD must also post information on its website about what happens to the glass that is sent to it for recycling.
- New Jersey Attorney General Grewal announced additional actions by the New Jersey Bureau of Securities in its investigation of First Standard Financial Company, LLC, a broker-dealer whose agents allegedly defrauded customers in an excessive trading scheme. First Share has already agreed to relinquish about $400,000 of its liquid assets in order to provide restitution, and on December 29, 2020, the Bureau announced that it revoked the registration of and assessed civil penalties against two more agents who participated in the scheme, including the firm’s primary agent.
- Virginia Attorney General Herring issued an opinion concluding that universities and state agencies in Virginia may require government contractors to pay their employees a living wage, or at least to pay them a wage above the state and federal minimum wage. The opinion states, “It is my opinion that the Procurement Act provides public bodies with the discretion to determine whether it is appropriate to include in a solicitation the requirement that a successful bidder or offeror pay its employees or contract workers a minimum wage or a living wage, other than the wage levels required by federal and state law. Ample evidence exists to show that a living wage requirement can improve the quality of goods or services obtained by a public body.”
Environment and Energy
- California Attorney General Becerra led a coalition of 15 attorneys general and New York City in a lawsuit challenging the Department of Energy’s final rule which undermines existing energy efficiency standards for residential dishwashers by exempting a class of dishwashers from these standards. The coalition is arguing that the rule violates the Administrative Procedure Act, Energy Policy Conservation Act, and National Environmental Policy Act.
Wednesday, December 30, 2020
- Washington Attorney General Ferguson announced that music travel company Voyageurs International must pay over $464,000 in consumer refunds for students who signed up for 2020 European tours, after the company illegally charged cancellation penalties and retained fees from students. Voyageurs allegedly told students it could not recoup its losses when it could actually recoup more than 60%, violating the Washington Consumer Protection Act and the Sellers of Travel Act. The press release states, “Where a travel agency like Voyageurs cancels a consumer’s travel, Washington law allows the travel agency to recoup its losses by charging consumers cancellation penalties if the company was appropriately transparent with the consumer about the potential for those penalties. When the travel agency cancels, the law prohibits travel agencies from charging cancellation penalties greater than those the company incurs from its third-party vendors — such as airlines or hotels. Voyageurs failed to lawfully disclose the risk of penalties and illegally charged consumers penalties greater than what the company incurred from its vendors.”
- Virginia Attorney General Herring announced that under a new law, HB5068, the $600 economic relief payments will be exempt from garnishment. According to the press release, “The bill exempts state and federal emergency relief payments from garnishment, attachment, and other legal creditor process seizures. It included an emergency clause ensuring it went into effect immediately upon Gov. Northam’s signature.”
- Minnesota Attorney General Ellison announced that his office filed a lawsuit against Carlson Event Center, which advertised a New Years Eve Bash in violation of Governor Walz’s Executive Order 20-99, which required venues hosting indoor entertainment to close until January 10, 2021. The lawsuit seeks injunctive and declaratory relief, restitution, disgorgement, damages, and civil penalties.
- New Jersey Attorney General Grewal announced that the Division of Alcoholic Beverage Control issued charges seeking to suspend 12 New Jersey bars and restaurants’ liquor licenses for violating COVID-19 executive orders. Among other things, the businesses violated the orders when they allowed patrons to be served while standing and failed to enforce social distancing and face covering requirements.
Financial Services | Consumer Financial Protection Bureau
- The Consumer Financial Protection Bureau (“CFPB”) issued a consent order against military lending company Omni Financial of Nevada, Inc. for violating the Military Lending Act, Electronic Fund Transfer Act, and Consumer Financial Protection Act of 2010 with its installment loans. Omni allegedly violated these laws by requiring repayment by allotment for borrowers covered under the Military Lending Act and by requiring that consumers allow it to withdraw funds from their bank accounts. The CFPB’s consent order requires Omni to pay a $2.175 million penalty and includes injunctive relief, as well as requires the implementation of new employee training policies and consumer notice.
Thursday, December 31, 2020
- New York Attorney General James and Governor Cuomo announced that New York would renew for the ninth time its halting of the collection of medical and student debt owed to the state that has been referred to the Office of the Attorney General (“OAG”) for collection. The OAG’s debt collection pause has been renewed until January 31, 2021. In addition, the OAG will also accept applications for suspension of other dept types owed to New York and referred to the OAG for collection.
- Several attorneys general, including New York Attorney General James and Virginia Attorney General Herring, released annual reports of key actions they took as Attorney General in 2020. These reports highlight, among other things, the antitrust actions against Facebook and Google.