Each week, Crowell & Moring’s State Attorneys General team highlights significant actions that State AGs have taken. Here are this week’s updates.
Monday, April 19, 2021:
- The Consumer Financial Protection Bureau (“CFPB”) issued an interim final rule in support of the CDC’s eviction moratorium, requiring debt collectors to provide written notice to tenants of their rights under the moratorium and barring them from misrepresenting tenants’ eligibility for protection from eviction. Those who evict tenants who may have rights without providing notice of the eviction moratorium or who misrepresent tenants’ rights under it may be prosecuted by federal agencies and state attorneys general for violating the Fair Debt Collection Practices Act and are also subject to tenants’ private lawsuits.
- Washington Attorney General Ferguson announced that the Washington Legislature passed the Consumer Protection Improvement Act, a bill requested by the attorney general, which increases the maximum civil penalties for consumer protection violations from $2,000 to $7,500, the first time the penalties have been raised since the law was adopted in 1970. The bill also includes an enhanced penalty of $10,000 for violations that target vulnerable communities.
- A bipartisan coalition of 42 attorneys general, led by North Carolina Attorney General Stein, Tennessee Attorney General Slatery, and Illinois Attorney General Raoul, sent a letter to online mobile marketplace OfferUp asking it to act to prevent blank or fraudulent COVID-19 vaccine cards from being sold on its platform. Specifically, the coalition is asking OfferUp to monitor its platform for ads selling these fraudulent or blank cards, promptly take down these ads or links, and preserve information about the ads and those selling them.
- North Carolina Attorney General Stein announced a settlement with a doctor and Angier Pediatric and Adult Medical Center for allegedly submitting false claims to Medicaid for tests that were not medically necessary, had no supporting documentation, and/or were performed in violation of Medicaid rules. The doctor and medical center have agreed to pay $60,000.
- New York Attorney General James is defending New York’s rent stabilization laws in the Housing Stability and Tenant Protection Act, amended in 2019, against challenges to their constitutionality in a case that is currently pending on appeal in the Second Circuit.
- The California Department of Justice announced a plea agreement with grocery store Apna Bazar for price gouging essential food items, following charges announced in May 2020. The grocery store has pleaded guilty to two counts of price gouging and also agreed to make a $20,000 donation to the Alameda County Community Food Bank. An investigation revealed the grocery store increased prices between 60% and 400% on grocery items such as yellow onions, ginger, green beans, instant noodles, tea, chili peppers, pomegranates and red yams.
Tuesday, April 20, 2021:
- The New Hampshire Attorney General’s Office announced that the Charitable Trusts Unit and Consumer Protection and Antitrust Bureau completed their reviews of the proposed sale of the assets of LRGHealthcare to Concord Hospital, Inc. The Charitable Trusts Unit will not oppose the transaction at this time, and the Antitrust Bureau filed a proposed Final Judgment on April 20, 2021 containing agreed-upon terms such as protections for addressing demands for unfair payment rates and protections for physicians and clinicians in relation to restrictive covenants.
- Minnesota Attorney General Ellison announced that his office settled a lawsuit against St. Patrick’s Tavern & Restaurant for allegedly violating Governor Tim Walz’s executive orders by remaining open for indoor, on-premises food and beverage consumption when it was required to be closed. Under the consent judgment, the restaurant must pay a $15,000 fine and comply with current and future executive orders.
- New York Attorney General James announced a $4 million agreement with American Axle & Manufacturing which resolves allegations of hazardous waste disposal and oil spill contamination at the former Tonawanda Forge site.
- Colorado Attorney General Weiser announced that Rocky Mountain Health Plans, a UnitedHealth Group company, is donating $30 million to increase access to health care in Colorado. The donation includes $25 million to fund STEM education for young women and people of color as well as other programs and $5 million in support of nonprofit organizations that provide youth opportunities and mental health services and support.
- Georgia Attorney General Carr warned consumers about purchasing over the counter hearing aids, none of which are currently approved by the FDA. According to the press release, since medically approved hearing aids are expensive and not covered by Medicare, some ineffective devices have been offered at lower prices.
- Michigan Attorney General Nessel filed an amicus brief before the Michigan Unemployment Insurance Appeals Commission in support of the claimant, arguing that part-time workers, including those who are disabled, are not excluded from receiving CARES Act funds. Attorney General Nessel is asking the Commission to reverse the decision of an Administrative Law Judge which found that these workers are categorically excluded.
State AG Office News
- In the criminal trial State v. Derek Chauvin brought by Minnesota Attorney General Ellison, former police officer Chauvin was found guilty for the murder of George Floyd.
Wednesday, April 21, 2021:
- Virginia Attorney General Herring issued a statement applauding marijuana legalization in Virginia, saying, “Today is such an important day on the Commonwealth’s journey to becoming a more equitable place for all Virginians. . .For too long, the Commonwealth’s cannabis policies have disproportionately affected Black Virginians and Virginians of color, saddling them with convictions that could potentially hold them back for the rest of their lives.”
- On April 21, 2021, a Florida federal court entered final judgment for mortgage servicer Owen Financial Corporation in the Consumer Financial Protection Bureau’s (“CFPB”) lawsuit against it. The CFPB previously decided to drop its remaining claims in the lawsuit, and the entry of final judgment will allow it to file an appeal in the Eleventh Circuit.
- Washington D.C. Attorney General Racine filed a lawsuit against baby food manufacturer Beech-Nut Nutrition Company for allegedly misleading consumers about the health and safety of its baby food products and the testing conducted on these products when they actually contained high levels of toxic heavy metals. The lawsuit seeks injunctive relief as well as restitution and civil penalties.
- Reported April 22, 2021: On April 21, 2021, the Senate confirmed Vanita Gupta as associate attorney general, making her the first woman of color to hold this position.
- Illinois Attorney General Raoul led a bipartisan coalition of 25 attorneys general in a letter asking Congress to rescind the Office of the Comptroller of the Currency’s True Lender Rule. According to the attorneys general, the rule would allow high-cost “rent-a-bank” lending schemes created to avoid state usury laws, leading to more consumers being charged high interest rates while state litigation against the rule is pending.
- The Federal Trade Commission (“FTC”) and the Illinois Attorney General’s Office announced that consumers who lost money to the Stark Law phantom debt collection scheme will be receiving a total of over $4 million in refunds. The FTC’s and Illinois Attorney General’s lawsuit accuses Stark Law of using a variety of business names to target those who applied for short-term loans and pressuring them into paying debts they did not owe or the defendants did not have the authority to collect.
Thursday, April 22, 2021:
- The Consumer Financial Protection Bureau (“CFPB”) and New York Attorney General James filed a federal complaint to seize a $1.6 million home whose ownership they are alleging was fraudulently transferred by the operator of a debt-collection scheme perpetrated by Northern Resolution Group LLC and Enhanced Acquisitions LLC.
- On April 21, 2021, an Eleventh Circuit panel found that a consumer may pursue his claims under the Fair Debt Collection Practices Act against debt collection company Preferred Collection and Management Services Inc. for disclosing his personal information to a mail vendor. However, the plaintiff cannot allege that he suffered harm from the disclosure. The case will now return to the Middle District of Florida.
- North Carolina Attorney General Stein announced that an individual pleaded guilty to a $13 million conspiracy to commit Medicaid fraud and wire fraud, as well as conspiracy to commit money laundering and aggravated identity theft. The individual admitted to conspiring with his wife to defraud the state Medicaid program by billing the government for fictitious home health services and laundering the proceeds into extravagant purchases.
- New Jersey Attorney General Grewal announced that the payroll manager of construction company UniMak, LLC pleaded guilty to demanding cash kickbacks from employees and declining to pay them for hours worked to avoid prevailing wage rules on public works projects. The company already entered into a non-prosecution agreement with the Attorney General’s Office, under which it agreed to pay $1 million in restitution to employees.
State AG Office News
- The California legislature has confirmed Rob Bonta (D) as California’s new attorney general.
- Illinois Attorney General Raoul applauded the state Senate’s passage of his legislation to expand and strengthen Illinois’ Address Confidentiality Program so that it will now include protections for survivors of human trafficking. The new legislation also prevents participants’ phone numbers and addresses from being disclosed under the Freedom of Information Act, ensures participants are able to obtain a Real ID driver’s license using their substituted address, and clarifies the process for registering to vote.
Friday, April 23, 2021:
- A coalition of 10 attorneys general is suing the Biden administration over an Executive Order establishing a working group that will calculate the social costs of emissions, with a goal to enact environmental regulations based on the social costs. The attorneys general are arguing that the Order is overreaching and will impose strict regulatory burdens.
State AG Office News
- New York Attorney General James led a group of community leaders and local elected officials in a walking tour of Chinatown and encouraged New Yorkers to support Asian-American-owned businesses. Attorney General James then had a community conversation with organization leaders to address the rise in hate crimes.