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

Tuesday, January 19, 2021

Federal Matters

  • President-elect Biden selected Federal Trade Commission member Rohit Chopra to lead the Consumer Financial Protection Bureau and former Commodity Futures Trading Commission Chairman Gary Gensler to head the Securities and Exchange Commission. Both individuals are expected to impose stricter regulation, and Chopra is expected to review existing debt-collection and payday lending rules to increase consumer protection.

Workers/Labor

  • Illinois Attorney General Raoul and Pennsylvania Attorney General Shapiro led a coalition of nine attorneys general in a lawsuit challenging a U.S. Department of Labor rule seeking to remove the cap on the time a tipped worker can be required to spend on non-tipped duties while receiving the tipped below-minimum wage. The coalition is arguing that the rule would result in workers’ tips essentially being transferred to their employers.
  • Tennessee Attorney General Slatery announced a lawsuit against Labor Law Poster Service, Council for Corporations, LLC, ANS, Inc., and their operators for allegedly sending mail that appeared to be from the government to Tennessee business owners, demanding fees for documents that are not required and violating a 2007 Assurance of Voluntary Compliance. The lawsuit seeks injunctive relief, restitution, and civil penalties.

Environment

  • Coalitions of attorneys general announced nine new environmental protection lawsuits filed since January 15, 2021, challenging the Trump administration’s environmental rollbacks. Additionally, they celebrated a federal appeals court ruling that the U.S. Environmental Protection Agency (“EPA”) acted illegally in 2019 by repealing Obama’s Clean Power Plan for addressing power plants’ greenhouse gas emissions. The nine lawsuits include challenges to EPA rules allowing hazardous air pollutant sources to reclassify themselves as less regulated area sources, essentially maintaining greenhouse gas emission standards for airplanes, maintaining the national ambient air quality standard for ozone, skewing the weighing process for the costs and benefits of rules under the Clean Air Act, weakening the Clean Air Act’s new source review program for modifications to existing stationary sources of emissions, and limiting the scientific evidence an agency can consider when adopting rules to protect human health and the environment. They also include challenges to U.S. Fish and Wildlife Service rules that narrowly define critical habitats and reduce protections for migratory birds, as well as a U.S. Department of Energy rule that weakens energy efficiency standards for industrial equipment and consumer appliances.

Financial Services | Consumer Financial Protection Bureau

  • The Consumer Financial Protection Bureau (“CFPB”) filed a proposed settlement to resolve its lawsuit against LendUp Loans, LLC from December 4, 2020 for alleged violations of the Military Lending Act. If approved, the settlement would require the company to pay $300,000 in consumer redress and a $950,000 civil penalty. It also includes injunctive relief and requires updated consumer reporting information.

Wednesday, January 20, 2021

Covid-19

  • Iowa Attorney General Miller’s office announced that in 2020, overall consumer complaints equaled 4,011, representing a 24.4% increase from the number in 2019. Attorney General Miller’s office attributes the increase to the pandemic and to the derecho that hit the state on August 10, 2020. The press release also explains that the Consumer Protection Division received over 600 complaints about price gouging of health care products, personal goods, and disaster repair services, as well as many travel-related complaints, though auto-related complaints still represented the largest category.
  • Washington Attorney General Ferguson announced that low-income housing provider Whitewater Creek has agreed to pay $50,000 to resolve a lawsuit accusing it of illegally threatening tenants with eviction in April 2020 when there was a temporary moratorium on evictions due to the pandemic. Whitewater Creek must also train its employees on tenants’ rights and give the Attorney General’s Office notice for the next three years when it initiates eviction actions or refers tenants to its attorneys for non-payment of rent.

Thursday, January 21, 2021

Federal Matters

  • Washington Attorney General Ferguson announced that of 97 lawsuits filed against the federal government since 2017, over 60 are still being actively litigated. These more than 60 cases include 17 victories and one adverse ruling, and many involve environmental protection concerns. Attorney General Ferguson also announced that a large percentage of the lawsuits are likely to continue through the courts despite the change in administration.

 Friday, January 22, 2021

Consumer Protection

  • Washington Attorney General Ferguson announced his 2021 legislative agenda, which includes, among other things, legislation increasing civil penalties for consumer protection violations to $13,350 per act, providing a clear definition of price gouging and imposing civil penalties for violations, requiring the collection and publication of data on law enforcement’s use of deadly force, imposing high-capacity magazine limits, and requiring informed consent from tribal governments before initiating programs that affect them.

COVID-19

  • Minnesota Attorney General Ellison’s Office announced that Minnesota has settled with two restaurants for violating Governor Walz’s executive order prohibiting indoor, on-premises dining. The settlements include liquor license suspensions and civil penalties of $25,000 if any of the settlement terms are violated.

Defending State Government Actions

  • California Attorney General Becerra announced a settlement with ergonomic office equipment maker Workrite Ergonomics, resolving allegations that it overcharged state agencies through the government contracting process for about eight years when it concealed information and failed to provide owed discounts. California will receive around $488,000 under the settlement.
  • Ohio Attorney General Yost and Wine.com are asking an Ohio federal district court to approve a settlement the two parties have agreed to, resolving allegations against Wine.com accusing it of depriving Ohio of tax revenue. The settlement includes provisions to keep unlawful wine shipments from entering the state and ensuring the proper collection of taxes on wine sales.

Housing

  • New York Attorney General James announced agreements with 132-40 Sanford LLC, real estate management company Pinnacle Managing Co., LLC, and security firm SW Security Services, LLC, resolving alleged violations of rent stabilization laws through modification of a front door lock. Under the agreements, the companies must undergo anti-discrimination trainings, donate to $50,000 to nonprofit organizations, and implement new measures that are inclusive for all tenants.