Each week, Crowell & Moring’s State Attorneys General team highlights significant actions that State AGs have taken. Here are this week’s updates.
Monday, May 10, 2021:
- A bipartisan coalition of 45 attorneys general sent a letter to Congress asking the federal government to provide support for state antitrust enforcement. The attorneys general explain that antitrust enforcement requires significant resources, and additional funding for state agencies will allow them to be better partners to federal agencies in antitrust actions.
- The Consumer Financial Protection Bureau (“CFPB”) is determining whether TMX Finance LLC violated a $9 million settlement agreement, according to an order that became public on May 10, 2021. The CFPB rejected the company’s argument that the request was too vague and that it failed to provide fair notice.
- According to a quarterly report, MoneyGram International Inc. received notice from the Consumer Financial Protection Bureau (“CFPB”) that the CFPB is considering enforcement activity against it for allegedly violating the Remittance Rule, the Electronic Fund Transfer Act, and the Consumer Financial Protection Act with its money transfers.
- New Jersey Attorney General Grewal announced that his office filed nine environmental enforcement actions, including seven against polluters for contamination in environmentally overburdened communities. The complaints have been brought against a broad range of activity, including the release of toxic chemicals and chemical and food waste contaminants as well as illegal dumping.
- Wisconsin Attorney General Kaul led a coalition of 19 attorneys general in a comment letter to the U.S. Environmental Protection Agency (“EPA”) supporting its proposal to include 29 PFAS substances in its fifth Unregulated Contaminant Monitoring Rule. The inclusion of the substances will require public water systems to monitor for them and to provide data about the occurrence of contamination involving these substances. The letter also asks the EPA to require monitoring for total PFAS, validate an analytical method for total PFAS, advance environmental justice, and lower the minimum reporting levels.
- Pennsylvania Attorney General Shapiro announced that the Multilateral Pharmaceutical Merger Task Force, which includes staff from the Department of Justice, the Federal Trade Commission, the European Commission Directorate General for Competition, the U.K.’s Competition and Markets Authority, and state attorneys’ general offices, is seeking public comments on how to update its analysis of pharmaceutical merger effects. The Task Force is posing certain general questions, such as what theories of harm it should consider and how to approach the market definition, as well as seeking comments on other issues.
Tuesday, May 11, 2021:
- California Attorney General Bonta announced the launch of the Racial Justice Bureau within the California Department of Justice as well as a future virtual convening against hate crime with California’s Big City Mayors. According to the press release, these are California’s most recent efforts to combat bias and hate.
- Maryland Attorney General Frosh applauded that the Federal Energy Regulatory Commission (“FERC”) decided to modify its practice of allowing construction of natural gas pipelines before considering objections, which a coalition of attorneys general had argued against. FERC agreed that it should not limit the withholding of construction activities to affected landowners’ requests for a rehearing and announced a policy of presumptively staying pipeline approvals.
- Colorado Attorney General Weiser and Wyoming Attorney General Hill announced a joint settlement of lawsuits against two companies, Atlantic Publishers Group, LLC and Publishers Partnership Services, LLC, that targeted consumers across the U.S. with deceptive mailers advertising magazine subscriptions that were designed to look like renewal notices for the consumers’ existing subscriptions. The settlement includes a payment of $500,000 from the organizers of the scam and bans them from operating magazine subscription businesses and sending deceptive mailers in Colorado and Wyoming.
- The U.S. Senate voted to repeal the Office of the Comptroller of the Currency’s (“OCC”) “true lender” rule with a Congressional Review Act resolution, causing the American Bankers Association to express disappointment.
- During a National Association of Attorneys General panel, the Federal Trade Commission’s (“FTC”) Acting Chairwoman Slaughter stated that the FTC will partner more frequently and actively with state attorneys general after the Supreme Court denied its ability to seek restitution. Acting FCC Chairwoman Rosenworcel and Acting Consumer Financial Protection Bureau Director Uejio also indicated that they wish to work more closely with state attorneys general.
- Arizona Attorney General Brnovich announced that his office obtained a settlement against Budget Hearing Aids and its subsidiary Audien to stop them from misleading consumers about over-the-counter hearing devices. The companies allegedly advertised the hearing devices as FDA approved or registered even though they have not received such approval.
- Several attorneys general, including Georgia Attorney General Carr, North Carolina Attorney General Stein, and South Carolina Attorney General Wilson, announced that their states’ price gouging laws are in effect in response to the Colonial Pipeline’s shutdown after a ransomware attack, which has resulted in a petroleum shortage. Georgia’s press release states that the price gouging law applies to products including motor fuel and diesel fuel, and that the COVID-19 state of emergency is still in effect, prohibiting price gouging of goods and services that are necessary to support public health.
Wednesday, May 12, 2021:
- Reports indicate that the Pennsylvania Attorney General’s Office is investigating a breach of COVID-19 contact tracing data that may have exposed around 72,000 people’s private information.
Elder Fraud and Abuse
- Minnesota Attorney General Ellison announced that his office obtained convictions against the former operator of home care nursing agency Caring & Compassionate Healthcare Agency for Medicaid fraud of over $1.8 million. Among other things, the defendant billed for registered nurse services that were actually performed by other employees and billed for services that did not occur, as well as engaged in fraud.
- A coalition of six states and the California State Water Resources Control Board are asking the U.S. Army Corps of Engineers to respect states’ authority under Section 401 of the Clean Water Act to approve, deny, or impose conditions on federally permitted projects that could result in discharges into waters of the United States.
- Arizona Attorney General Brnovich announced that his office filed a lawsuit against Amazon Home Warranty, LLC, which is not affiliated with Amazon.com, and its officers and affiliated entities for alleged misleading statements in connection with the sale of home warranties. For example, the defendants allegedly falsely advertised that they had been in business for around 10 years when they just started operating, promoted the business using fake reviews, and tried to conceal their connection with a failed home warranty company. The lawsuit seeks injunctive relief, restitution, and civil penalties.
- Vermont Attorney General Donovan announced a settlement with auto dealer Poulin Auto Sales, Inc. for consumer protection violations such as a deceptive direct mail advertisement. The settlement requires the company to change its business practices, pay $15,000 in restitution, and pay a $5,000 civil penalty.
- Massachusetts Attorney General Healey announced that three C-Mart grocery stores and their owners were cited for almost $1 million in restitution and penalties for wage theft and other employment law violations, such as overtime and earned sick leave violations, against more than 150 employees.
- Additional attorneys general, such as Virginia Attorney General Herring and Kentucky Attorney General Cameron, have announced that their states’ price gouging laws are in effect following the Colonial Pipeline cyber-attack.
Thursday, May 14, 2021:
- Nebraska Attorney General Peterson announced that his office settled a lawsuit with the owner of Kathy Wiley, LLC for false claims submitted to Nebraska Medicaid and its managed care contractors for mental health services. Nebraska alleged that the owner failed to maintain sufficient documentation to demonstrate services were actually provided.
- Illinois Attorney General Raoul announced that his office entered into a consent order with tax preparer Su Familia Income Tax for charging illegal fees for tax preparation services. The settlement includes injunctive relief and requires the company to pay over $100,000 in restitution to Illinois consumers.
- On May 13, 2021, the Comprehensive Debt Collection Improvement Act, H.R. 2547, passed the House and has moved to the Senate. If it is enacted, the legislation would expand protections for borrowers, such as by limiting electronic methods of contact, and override a Supreme Court decision which limited liability for law firms working on nonjudicial foreclosures.
- New York Attorney General James issued a consumer alert about gasoline price gouging after the Colonial Pipeline cyber-attack. Attorney General James stated, “To be clear, the price gouging of fuel in New York state will not be tolerated for a moment. If our office sees profiteers take advantage of consumers by boosting prices to excess levels, we will not hesitate to take legal action.”
Friday, May 15, 2021:
- Virginia Attorney General Herring issued a press release stating that his Consumer Protection Section has recovered over $403 million from consumer protection violators since 2014. The press release also states that the Consumer Protection Section was reorganized and enhanced to be more aggressive in 2016 and that the most complaints received in 2020 were related to automotive sales; followed by credit, loans, and debt collection and internet sales and service.
- Kansas Attorney General Schmidt announced that health club company Genesis Health Clubs Management, Inc. agreed to a settlement requiring it to pay $15,000 in fees and civil penalties for violating the No-Call Act with unsolicited telemarketing calls. The settlement also includes injunctive relief.
- Texas Attorney General Paxton has sued the Biden administration for allegedly unlawfully removing Texas’ 1115 Medicaid waiver extension. The lawsuit seeks the reinstatement of the extension and argues that its removal was a breach of contract and government overreach.
- Washington Attorney General Ferguson announced that his office filed a lawsuit against Landmark Technology A for its alleged patent troll conduct that Attorney General Ferguson is arguing violated the Patent Troll Protection Act and has been harming small businesses. This lawsuit is the first time Washington has enforced its patent troll law. North Carolina Attorney General Stein also filed an amicus brief in Middle District of North Carolina case Napco, Inc. v. Landmark Technology A, LLC to defend a 2014 North Carolina law against patent trolls, arguing that patent trolls stifle innovation by forcing companies to spend money to combat bad-faith patent claims.
- Illinois Attorney General Raoul announced a settlement with roofing company Star Roofing and Siding Inc., resolving allegations that the company illegally withheld overtime pay from its employees, some of whom regularly worked more than 60 hours a week. The settlement includes injunctive relief, such as requiring the company to maintain GPS records for its vehicles, and a $101,000 payment.
- California Attorney General Bonta announced the arraignment of the owners, operators, and certified public accountant of three California restaurants for alleged sales tax evasion and labor law violations. The 65 counts include filing a false tax return with intent to evade tax payments, failure to pay unemployment insurance and training tax, failure to pay income tax, failure to pay disability insurance, and grand theft of labor.