Each week, Crowell & Moring’s State Attorneys General team highlights significant actions that State AGs have taken. Here are this week’s updates.
Monday, January 25, 2021
- California Attorney General Becerra announced the creation of a Bureau of Disability Rights within the Civil Rights Enforcement Section of the California Department of Justice. The Bureau will advance the rights of persons with disabilities through investigation and litigation in matters including discrimination in healthcare, education, employment, access to public services, and law enforcement.
- Michigan Attorney General Nessel announced that her office will investigate hunting and outdoors company Team Fitzgerald Marketing for alleged violations of the Michigan Consumer Protection Act such as failing to fulfill purchases of products and services. The investigation comes after Attorney General Nessel’s office received over 70 complaints.
- Colorado Attorney General Weiser announced that his office settled with Nationwide Medical Supply Inc. after the business allegedly made misleading claims about masks and respirators it was selling and charged unreasonably excessive prices for them during the pandemic. For example, in some cases the company charged a markup for masks that exceeded 250% of its costs, illegally used the FDA logo, and falsely claimed that a KN95 mask and N95 respirator were “FDA/CE approved.” The settlement includes injunctive relief and a payment of $70,000 to the state.
Elder Fraud & Abuse
- Georgia Attorney General Carr is warning seniors, disabled adults, and their families and caretakers to be on guard for financial exploitation especially in relation to the recent federal stimulus checks.
- North Carolina Attorney General Stein announced a settlement with Duke Energy related to coal ash cleanup costs from 2015 to 2030, requiring the company to write off coal ash costs in past and future rate cases and to reduce its return on equity for cleanup costs. The settlement is expected to save electricity customers over $1 billion on utility bills over the next 10 years.
- Washington Attorney General Ferguson filed a lawsuit against sorority Alpha Omicron Pi for charging University of Washington students over $6,000 in rent even though they were unable to live in sorority housing because of the pandemic. It also allegedly charged late fees and threatened students with suspended sorority memberships and damage to their credit if they did not pay for housing. The lawsuit alleges that this behavior violated Washington Governor Inslee’s emergency eviction moratorium and the Washington Consumer Protection Act.
- New Jersey Attorney General Grewal announced that the New Jersey Division on Civil Rights issued a Finding of Probable Cause against retailer America’s Best Contacts & Eyeglasses, Inc. for allegedly discriminating against a former employee based on her pregnancy by reducing her to part-time status and failing to reasonably accommodate her for breastfeeding.
Tuesday, January 26, 2021
- Arkansas Attorney General Rutledge announced a judgment against the owner of asphalt service companies Pro-Pave Asphalt, Robert Stevens Construction and RS Asphalt for allegedly engaging in deceptive trade practices and targeting senior citizens. The company allegedly offered discounted asphalt and then began laying it without informing consumers of their three-day right to cancel. Towards or after the completion of the work, the company demanded an exorbitant fee. The judgment includes $200,000 in civil penalties, $40,000 in enhanced penalties for actions targeting seniors, $40,480 in restitution, $282.50 in costs and fees, and injunctive relief.
- Oklahoma Attorney General Hunter filed a petition in court seeking more than $1.8 million from PPE Supplies LLC for four orders of PPE the Oklahoma Department of Health made in March but never received. The petition alleges that the company’s owner misrepresented that the shipment of PPE could be expedited and the masks would be delivered to the state within two weeks if the state paid upfront fees for half the cost of one purchase order.
Financial Services | Consumer Financial Protection Bureau
- S. District Judge Gonzalo P. Curiel for the Southern District of California issued an order largely agreeing with the Consumer Financial Protection Bureau’s (“CFPB”) claims from a 2015 lawsuit against Global Financial Support Inc. and its CEO for a financial aid assistance scam. The court’s order grants default judgment against Global, holding the company and its CEO jointly and severally liable for a $10 million civil penalty and over $4,738,028 in restitution, as well as injunctive relief. It also grants in part and denies in part the CFPB’s motion for partial summary judgment.
Wednesday, January 27, 2021
- The FTC, over 30 states, and the District of Columbia are suing Associated Community Services, Inc., Directele Inc., and their three sister companies in Michigan federal court for allegedly making abusive charity fundraising calls for sham charities. The lawsuit seeks injunctive relief, restitution, disgorgement, and civil penalties.
Elder Fraud and Abuse
- California Attorney General Becerra announced that his office has established a Division of Medi-Cal Fraud and Elder Abuse, which represents an expansion of the California Department of Justice’s existing program. The Division will continue investigating and prosecuting fraud against the Medi-Cal program as well as physical or financial abuse or neglect of elders and dependents in care facilities. Attorney General Becerra also announced the launch of Operation SAFE (“Stop Abuse and Fraud of Elders”), which is aimed towards protecting Californians who live in skilled nursing facilities during the pandemic.
- Baltimore City councilmen and the Baltimore Digital Equity Coalition are seeking a price gouging investigation into Comcast’s newly imposed data cap on Xfinity internet customers in Maryland and across the U.S., in a letter that was sent to Maryland Attorney General Brian Frosh. The councilmen and Coalition are arguing that the plan to charge those without unlimited plans up to $100 a month for data usage that exceeds 1.2 terabytes will increase the lack of internet access in low-income households.
Thursday, January 28, 2021
- The California Department of Financial Protection and Innovation signed a data-sharing agreement with several earned wage access companies, Earnin, Even, Brigit, Payactiv, and Branch, which will include quarterly reports addressing metrics such as how fees are being collected and how products are affecting consumers. The deal has been applauded for creating regulatory certainty and allowing the companies to grow.
Friday, January 29, 2021:
- Massachusetts Attorney General Healey announced a settlement with oral surgery practice Merrimack Valley Oral Surgeons, Inc., settling allegations that the business violated Massachusetts’ public accommodations and consumer protection laws by refusing to serve a patient who needed an interpreter. Among other things, under the settlement, the company must provide medical services without regard to English proficiency, train its employees on compliance with the law, post nondiscrimination notices, and pay $5,000 in restitution.
- California Attorney General Becerra filed an amicus brief in Serova v. Sony Music Entertainment calling on the California Supreme Court to reject Sony’s interpretation of the First Amendment, under which Sony is arguing that it should not be liable for false advertising because it did not record tracks itself and did not know they were falsely advertised as performed by Michael Jackson. Attorney General Becerra is arguing that Sony’s reading of the law could allow sellers to escape liability any time they resell goods, and that it could enable companies to make false claims against competitors.
Financial Services | Consumer Financial Protection Bureau
- Texas Attorney General Paxton issued 13 Civil Investigative Demands to Discord, Robinhood Financial, Robinhood Markets, Robinhood Securities, Interactive Brokers, TD Ameritrade, TD Bank, E-Trade, WeBull Financial, Public Holdings, M1 Holdings, Citadel Financial, and Apex Clearing Corporation about the prohibition of certain stock purchases, suspension of chat platform activity, and requirement of higher margin reserves for trading certain companies. The CIDs request documentation of policies related to content moderation and control and decisions preventing or limiting access to the Discord r/WallStreetBets server.
- New York Attorney General James co-led a bipartisan coalition of 33 attorneys general in opposition to a proposed class action settlement in Morris et al. v. PHH Mortgage Corporation, et al. that would allow mortgage servicer PHH Mortgage Corporation to continue to charge homeowners making mortgage payments online or by phone illegal payment processing fees. The settlement also allows the company to increase these fees, and, according to the coalition, includes inadequate monetary relief for homeowners. The coalition has filed a motion for leave to file an amicus brief.