Each week, Crowell & Moring’s State Attorneys General team highlights significant actions that State AGs have taken. Here are this week’s updates.
Monday, March 8, 2021
- Washington Attorney General Ferguson announced that after a lawsuit, ticketing company Brown Paper Tickets must pay about $9 million to consumers who purchased tickets to events that were cancelled as well as organizers of past events the company failed to pay. The company must also pay the Attorney General’s Office $70,000 in attorneys’ fees and costs.
- Colorado Attorney General Weiser announced a settlement with travel company Voyageurs International which will provide almost $800,000 in refunds for fees withheld from those who purchased cancelled high school trips to Europe.
- Minnesota Attorney General Ellison announced that his office settled a lawsuit against Plainview Wellness Center for allegedly violating Governor Walz’s Executive Order by remaining open when it was ordered to close. The settlement includes injunctive relief and requires the gym to pay a $5,000 fine.
- Pennsylvania Attorney General Shapiro announced a settlement with Chesapeake Energy, which provides for future improved payment of royalties for those landowners with Chesapeake leases; improved protections for landowners through appointment of an Ombudsman, Attorney General inspection rights, and annual reporting; and $5.3 million in restitution. The settlement comes after a lawsuit accused Chesapeake of engaging in unfair and deceptive business practices in obtaining natural gas leases and by improperly paying royalties to landowners.
- Washington D.C. Attorney General Racine announced a lawsuit against home health care provider Vizion One for allegedly defrauding the D.C. Medicaid program of over $3 million when it submitted false claims for at-home care that was not necessary, authenticated, or provided.
- A coalition of 12 attorneys general led by Missouri Attorney General Schmitt filed a lawsuit against President Biden’s administration, challenging his Executive Order 13990. The coalition is arguing that President Biden did not have the authority to issue binding numbers for greenhouse gas social costs to be used in federal regulations, and that these regulations could greatly impact the economy.
Tuesday, March 9, 2021
- California Attorney General Becerra announced a $10.5 million partial settlement against retail chain Curacao, resolving allegations that it deceived and profited unlawfully from consumers with its financing contracts. The settlement includes $10 million in debt relief for those who were harmed, additional debt forgiveness for customers who are still paying for small claims judgments, and $500,000 in civil penalties. It also includes injunctive terms such as requiring the company to sell goods as they are advertised, to disclose all material terms in contracts, and to cease debt collection activities against those against whom default judgments were entered in illegal small claims actions.
- Colorado Attorney General Weiser sent a letter to the Federal Energy Regulatory Commission asking it to examine whether recent spikes in natural gas prices were the result of market manipulation or fraud, as well as expressing concern about reports that an investment bank benefitted from the price increase.
Wednesday, March 10, 2021
- New York Attorney General James’ Hate Crimes and Bias Prevention Unit filed a lawsuit against former owner of ice cream shop Bumpy’s Polar Freeze, seeking to hold the former owner responsible for allegedly making false, race-based police reports against those protesting discriminatory hiring practices. The lawsuit also charges the former owner with intending to choose victims based on race and violating their right to peacefully protest.
- Arizona Attorney General Brnovich announced that his office obtained a $100,000 consent judgment against two pest-control companies after consumers accused the companies of failing to give them their full termite warranties and instead charging a $125 fee for inspections.
- In an oral argument held on March 10, 2021 at the Eleventh Circuit, debt collector Preferred Collections and Management Inc. asked the panel to uphold a lower court’s dismissal of a lawsuit claiming it violated the Fair Debt Collection Practices Act by sending debtor information to a third party mailing house to create a demand letter because it was not a “communication made in connection with collection of a debt.”
- Florida Attorney General Moody announced that her COVID-19 price gouging hotline has hit the one year period since its activation. The press release also states that in the past year, Attorney General Moody’s office has obtained over $2.5 million in recoveries from COVID-19-related scams, deactivated 290 posts offering goods for excessive prices, received over 14,700 consumer contacts, and made over 11,400 merchant contacts about price gouging and other scams.
- Michigan Attorney General Nessel announced that she filed a notice of intervention in Consumers Energy Co.’s request to increase its electric rates, months after it received approval for a $90.2 million rate increase. In connection with the intervention, Attorney General Nessel stated, “Throughout the COVID-19 pandemic, my office took price-gouging very seriously to protect residents from being taken advantage of, and we will maintain that effort now to protect ratepayers as well. Families should not have to choose between paying exorbitant utility bills or paying for their rent, medicine, food, clothing and for other essential things. My office will intervene in this rate case and scrutinize this request to determine whether the proposed benefits truly justify the costs to Michigan consumers.”
- Democratic Representative Suzan DelBene has re-introduced a bill that would create a national standard for digital privacy rights, pre-empting state laws like Virginia’s and California’s. If it is enacted into law, the bill would exempt small businesses from regular audits and focuses on the most essential privacy concerns.
Thursday, March 11, 2021
Consumer Financial Protection Bureau
- The Consumer Financial Protection Bureau (“CFPB”) announced that it is rescinding its January 2020 policy statement about prohibiting abusive acts or practices, which stated that the CFPB would decline to seek monetary penalties and disgorgement for certain acts and practices. The CFPB is now saying this policy was contrary to its goal of protecting consumers, and it will exercise its full authority under the Dodd-Frank Act, though it will continue to consider discretionary factors such as good faith and company size.
- Washington Attorney General Ferguson announced that TV and internet provider Wave must pay $900,000 to over 23,000 customers who ordered its services online. The company allegedly failed to adequately disclose taxes and fees on bills and did not sufficiently disclose fees in some of its advertising.
- Tennessee Attorney General Slatery announced a lawsuit against Care Services Management, Marquis Mobile Dental Services LLC, and their owners for violating the Tennessee Medicaid False Claims Act. The lawsuit alleges that the defendants knowingly caused false claims to be submitted under the state’s Medicaid program, focusing on those receiving Medicaid assistance for their long-term care who could deduct healthcare expenses like dental care from payments. The defendants also allegedly operated an illegal kickback scheme.
- Virginia Attorney General Herring announced that his office reached a settlement with Rio Medical Supplies, resolving allegations that it charged unconscionable prices on hand sanitizer. The complaint alleged that the business charged $59.99 per 1,000-ml bottle of hand sanitizer, which represented a 20% increase from the pre-emergency pricing. The settlement includes injunctive relief, $2,500 in civil penalties and attorneys’ fees, and $1,646.40 in disgorgement. The press release also states that since the beginning of the pandemic, the Virginia Attorney General’s Office received over 500 complaints alleging price gouging and sent over 150 investigative letters to businesses.
- A coalition of 41 attorneys general announced a multistate settlement with Retrieval-Masters Creditors Bureau, d/b/a American Medical Collection Agency (“AMCA”) for a data security breach that occurred in 2019, which compromised 7 million consumers’ personal information and potentially endangered 21 million consumers’ information. The settlement requires AMCA to put data security practices in place and includes a $21 million payment, suspended due to AMCA’s financial condition.
Friday, March 12, 2021
- Pennsylvania Attorney General Shapiro issued a press release about his protection of Pennsylvanians during the pandemic. Among other things, the press release states that to date, the Attorney General’s Office received over 6,000 price-gouging tips, sent 522 cease-and-desist letters, and filed 31 price-gouging actions.
- A multistate coalition of attorneys general submitted recommendations to the Department of Energy (“DOE”) asking it to comply with statutory deadlines to review and update energy efficiency regulations, as well as to rescind or revise prior actions which undermined the energy efficiency program.
- The Federal Trade Commission (“FTC”) and Department of Justice (“DOJ”) clarified that the temporary suspension of granting early termination of merger review does not apply in at least two circumstances, each occurring after the agency has issued a Request for Additional Information. In the first scenario, the FTC or DOJ may determine that the transaction is unlikely to substantially reduce competition, and in the second, the parties may negotiate a Consent Agreement.
- Washington Attorney General Ferguson, the Swinomish Indian Tribal Community, and the Washington Health Care Authority filed a petition in the U.S. Court of Appeals for the Ninth Circuit and sent a letter to the acting secretary of the U.S. Department of Health & Human Services, seeking to overturn a decision made by the Trump administration denying Medicaid funding for Dental Health Aide Therapists in Washington tribal communities.
- Michigan Attorney General Nessel issued a reminder to propane customers to report any price gouging after the state’s announcement of the MI Propane Plan, which focuses on ensuring that Michiganders’ energy needs are met and that they are protected from price gouging. The announcement also asks the legislature to re-introduce and reconsider legislation that would strengthen Michigan’s price gouging law by enhancing investigative tools, adding criminal penalties, and expanding the law against business-to-business transactions.