Each week, Crowell & Moring’s State Attorneys General team highlights significant actions that State AGs have taken. Here are this week’s updates.
Monday, February 1, 2021:
- New York Attorney General James announced that New York has renewed its order to halt the collection of medical and student debt owed to the state that has been referred to the Office of the Attorney General for collection until February 28, 2021. This is the tenth renewal of the debt collection suspension.
- California Attorney General Becerra filed a motion to intervene in a lawsuit challenging Lake County’s certification of an Environmental Impact Report for the proposed Guenoc Valley Mixed Use Planned Development Project. In his motion, Attorney General Becerra argues that the report fails to properly consider and mitigate the wildfire risk, greenhouse gas emissions, and other negative environmental impacts that would result from the project.
- Massachusetts Attorney General Healey announced that Dynamic Energy Solutions, LLC has agreed to pay about $1.14 million to settle allegations that it damaged protected wetland resources and polluted a cold-water fishery through its violations of federal stormwater requirements. Among other provisions, the settlement also requires the company to comply with water quality and natural resources law, restore impacted resources, and place a parcel of land into conservation.
- Connecticut Attorney General Tong announced that health practice Behavioral Management, LLC and its owner have entered into a settlement agreement under which they will pay over $100,000 to resolve allegations of violating the federal and state False Claims Acts. The company allegedly falsely represented that its after-school and school break programs were given by licensed providers, that 45 minutes of one-on-one services were provided when it was actually 20 minutes of group services, and that the services included biofeedback.
February 2, 2021:
- Washington Attorney General Ferguson announced that apparel marketing business LuLaRoe will pay $4.75 million to resolve a lawsuit accusing the business of operating a pyramid scheme. LuLaRoe allegedly violated the Washington Antipyramid Promotional Scheme Act and the Consumer Protection Act by making misrepresentations about profitability and by having an illegal bonus structure and unfair refund policy.
- A bipartisan coalition of 35 attorneys general filed an amicus brief in Lindenbaum v. Realgy in the U.S. Court of Appeals for the Sixth Circuit arguing that the Telephone Consumer Protection Act’s (“TCPA”) ban on robocalls was enforceable from 2015 to 2020 even though the Supreme Court in 2020 invalidated the government-debt exception, because this invalidation did not affect the primary robocall ban. The coalition is asking the Sixth Circuit to overturn a district court decision finding that the TCPA became invalid when part of it was struck down.
- The Virginia House of Delegates passed a bill to make the Office of Civil Rights a permanent aspect of the Office of Attorney General. According to the press release, the bill provides that the Office “will exist ‘to investigate and bring actions to combat discrimination’ on the basis of race, color, religion, national origin, sex, pregnancy, childbirth or related medical conditions, age, sexual orientation, gender identity, disability, familial status, marital status, or status as a veteran, and will carry out the Commonwealth’s updated statement of policy on the civil and human rights of all Virginians.”
- A coalition of 23 attorneys general, led by Missouri and Arizona, filed an amicus brief in U.S. Supreme Court case The coalition is arguing that allowing individuals to carry firearms in self-defense outside their home is a Second Amendment right, and “subjective-issue permitting regimes” like the one in New York infringe on these rights and decrease public safety.
February 3, 2021:
- Arizona Attorney General Brnovich and Representative Justin Wilmeth announced legislation which would allow consumers to more easily cancel gym memberships, after concerns arose during the pandemic. While Arizona’s current health club law only requires gyms to allow membership cancellation in person or via certified mail, HB 2697 would allow for cancellation by email, regular U.S. mail, or on a gym’s website.
- Pennsylvania Attorney General Shapiro announced that Comcast has agreed to delay its proposed usage-based data overage charges to existing customers until July 2021 in the Northeast. It will also waive early termination fees for customers who choose to opt out through December 2021, more conspicuously disclose its data threshold, and forgo the threshold on low-income users enrolled in the Internet Essentials or IEPP programs during 2021.
- California Attorney General Becerra announced a settlement with Schnitzer Steel Industries, Inc. for allegedly violating environmental laws by releasing toxic air contaminants and hazardous particulates from its metal shredding and recycling facility. The settlement requires the company to pay $4.1 million in penalties, costs, and supplemental environmental projects as well as make changes to its practices.
- Wisconsin Attorney General Kaul announced a settlement with Rolling Hills Dairy Farm, LLC, which requires the company to pay $144,000 and construct runoff controls, after it allegedly violated Wisconsin’s wastewater laws at its concentrated animal feeding operation by illegally discharging contaminated runoff to a tributary.
Financial Services | Consumer Financial Protection Bureau
- The California Department of Financial Protection and Innovation announced an investigation into whether student-loan debt-relief companies are acting illegally under the new California Consumer Financial Protection Law and Student Loan Servicing Act. It also began a formal action against Optima Advocates, Inc., which allegedly falsely claimed it could get student loan debt dismissed, seeking penalties and refunds.
- Vermont Attorney General Donovan filed a lawsuit against accountable care organization OneCare Vermont after the organization allegedly breached its contract with the state by refusing to provide accounting records to the State Auditor.
February 4, 2021:
- Senator Amy Klobuchar revealed a “sweeping” antitrust reform bill, the Competition and Antitrust Law Enforcement Reform Act. Among other things, the bill seeks to increase the annual budgets of the U.S. Department of Justice’s Antitrust Division and the Federal Trade Commission (“FTC”); amend the legal standard for permissible mergers and shift the burden of proof onto the merging companies; establish an independent FTC division to study markets and merger effects; and create a new provision under the Clayton Act that would prohibit “exclusionary conduct” that creates an “appreciable risk of harming competition.”
- The Federal Trade Commission (“FTC”), supported by the Antitrust Division of the U.S. Department of Justice, announced that it will review the processes and procedures that it uses to grant early termination to merger reviews, during which time the agencies will suspend the granting of early termination. The press release states that the FTC expects the suspension to be brief.
- Tennessee Attorney General Slatery announced that he has sued Food City Supermarkets, LLC and K-VA-T Food Stores, Inc. for allegedly unlawfully selling prescription opioids and profiting from the opioid epidemic. The lawsuit alleges that this activity both created a public nuisance and violated the Tennessee Consumer Protection Act.
Financial Services | Consumer Financial Protection Bureau
- New Jersey Attorney General announced that the New Jersey Bureau of Securities has brought a securities enforcement action against investment adviser GPB Capital Holdings, LLC and others for an alleged $1.8 billion securities fraud scheme that has impacted about 17,000 investors across the country. The Bureau is seeking monetary penalties, restitution, disgorgement, and injunctive relief. The states of Alabama, Georgia, Illinois, Missouri, New York, and South Carolina, as well as the U.S. Securities and Exchange Commission, are filing simultaneous actions.
- Dave Uejio, the Acting Director of the Consumer Financial Protection Bureau (“CFPB”), announced that he will look to the Division of Research, Markets, and Regulations (“RMR”) for research on the impact of specific industry practices on consumers’ budgets in order to identify policy interventions, that he expects the CFPB to publish reports addressing racial equity and COVID-19, and that Uejio will be “assessing regulatory actions taken by the previous leadership and adjusting as necessary and appropriate those not in line with our consumer protection mission and mandate.” Uejio has also asked RMR to focus mortgage servicing rulemaking on averting a foreclosure crisis and to “[e]xplore options for preserving the status quo with respect to QM and debt collection rules.”
- A New York Department of Financial Services (“DFS”) report found a lack of mortgage lending to homebuyers of color and in majority-minority neighborhoods in Buffalo. The report is recommending that the state Community Reinvestment Act should be applied to nonbank mortgage lenders and that federal agencies, including the Consumer Financial Protection Bureau, should investigate whether fair lending practices are being violated. The DFS also settled with nonbank mortgage lender Hunt Mortgage Corporation after it found weaknesses in its fair lending and compliance programs. Some of the settlement requirements include increasing marketing to people of color, a special financing program, and annual training and audits.
February 5, 2021
- A coalition of 17 attorneys general led by Virginia Attorney General Herring is urging the Federal Communications Commission (“FCC”) to bolster access to affordable communications service Lifeline for low-income consumers. The coalition is specifically asking the FCC to ensure any mergers or acquisitions between telecommunications companies protect access to affordable communications services.
- Wisconsin Attorney General Kaul announced a settlement with County Materials Corp. for allegedly violating Wisconsin’s air laws by constructing its concrete manufacturing facility without obtaining the required air permits and by not reporting air emissions or paying emission fees. The settlement requires the company to pay $171,750 and to dismiss administrative and judicial actions it brought challenging the air permits.
Financial Services | Consumer Financial Protection Bureau
- New York Attorney General James announced that her office won almost $7 million in relief for investors defrauded by a private equity fund manager who misappropriated investor assets. On February 4, 2021, New York County State Supreme Court Justice Barry Ostrager found the defendants, including fund manager Laurence Allen; ACP Investment Group, LLC; NYPPEX Holdings, LLC; ACP Partners X, LLC; and private equity fund ACP X, LP liable and ordered the $7 million disgorgement payment as well as further injunctive relief.
- PayPal stated in a regulatory filing that the Consumer Financial Protection Bureau (“CFPB”) is investigating Venmo’s debt collection practices as of a January 21, 2021 civil investigative demand which requested information “related to Venmo’s unauthorized funds transfers and collections processes, and related matters.” Venmo’s debt collection practices have been previously reported as aggressive.