Each week, Crowell & Moring’s State Attorneys General team highlights significant actions that State AGs have taken. Here are this week’s updates.

Tuesday, June 1, 2021:

Consumer Protection

• Arizona Attorney General Brnovich announced that refund checks are being sent to consumers following a $1.75 million settlement his office reached with Landmark Home Warranty in March 2021. The settlement stemmed from consumer complaints alleging that the company failed to deliver on its promises of expedited air conditioning services.

Healthcare

• Rhode Island Attorney General Neronha announced that his office has granted conditional approval of a change in ownership of hospitals Roger Williams Medical Center and Our Lady of Fatima Hospital, but the approval imposes strict conditions to ensure the hospitals continue to operate for the next five years. The conditions include, among other things, upfront financial commitments on the part of Prospect Medical Holdings’ anticipated new majority holders.

Labor

• Illinois Attorney General Raoul announced that a Cook County Circuit Court judge declined to dismiss his office’s lawsuit against staffing agencies Elite Staffing, Inc., Metro Staff, Inc., and Midway Staffing, Inc., and their client Colony, Inc., alleging that the staffing agencies formed an illegal agreement to fix wages and to refuse to solicit or hire employees of the others. The lawsuit also alleges that Colony helped facilitate the illegal conduct. The Circuit Court found that though the Illinois Antitrust Act protects legal labor union activities from antitrust liability, it does not provide a broad immunization for illegal conduct. The lawsuit seeks civil penalties, damages, and injunctive relief.

Wednesday, June 2, 2021:

Healthcare

• North Carolina Attorney General Stein expressed concern over the recent increase in hospital consolidations. In his press release, Attorney General Stein states that consolidations are not always preferable and encourages hospital directors to be sure that consolidation is in patients’ and communities’ best interest before it is pursued. He also warns hospital system administrators that failing to provide transparent pricing is against the law.
• Connecticut Attorney General Tong announced the enactment of a new law which prohibits limited service pregnancy centers from using false, misleading, or deceptive language about the services they provide, or from offering services that they do not intend to provide. Under the new law, this type of false and misleading advertising is subject to enforcement action by the Attorney General’s Office.

Environment

• Florida Attorney General Moody announced that she has joined a coalition of 22 states in an amended complaint in the Southern District of Texas seeking to block President Biden’s cancellation of the Keystone XL Pipeline.
• California Attorney General Bonta testified before the U.S. Environmental Protection Agency on California’s proposed restoration of its waiver under the Clean Air Act for its greenhouse gas and zero emission vehicle program. The waiver was withdrawn by the Trump administration, and Attorney General Bonta is asking for it to be reinstated.

Thursday, June 3, 2021:

Charities/Nonprofits

• Washington D.C. Attorney General Racine announced a lawsuit against nonprofit entities Delta Phi Epsilon, Inc. and Delta Phi Epsilon Foundation and their officer and director for allegedly disregarding governing requirements and diverting nonprofit funds for the director’s personal benefit, failing to meet the entities’ nonprofit purposes. The lawsuit seeks injunctive relief and governance reform including removing the director.
• Ohio Attorney General Yost announced a settlement with the operators of charity Dogs 4 Warriors, resolving allegations of the abuse of funds and deceptive fundraising activity. Under the settlement, the charity’s operators must pay $50,000 in damages and penalties, as well as permanently shut down the charity and remove its online presence.
• Minnesota Attorney General Ellison filed a lawsuit against the operator of a Philando Castile charity, alleging that the operator did not properly spend all of the money raised in Castile’s name, with about $120,000 unaccounted for. The complaint charges the operator with four counts, including “(1) breach of charitable trust, (2) deceptive solicitation of charitable contributions, (3) failure to keep proper records as a soliciting charity, and (4) failure to register with the Attorney General’s office as a soliciting charity.” It seeks restitution, among other relief.

Consumer Protection

• New York Attorney General James announced the conviction of gas station Verrazano Enterprises, Inc. for grand larceny, based on the theft of more than $244,000 in sales tax from the sale of motor fuel. As part of their pleas, the gas station and its owner have paid over $189,000 in restitution as well as executed a confession of judgment for the whole amount stolen from the state.
• Florida Attorney General Moody issued a consumer alert warning consumers about phantom debt collection schemes and how to avoid them.

Energy

• Michigan Attorney General Nessel announced that after her intervention, the acquisition by Axium UP Holding of the Upper Peninsula Power Company has resulted in additional consumer benefits, such as revenue credits, shareholder forgiveness, and a moratorium on base rate increases until 2023.

Healthcare

• Massachusetts Attorney General Healey announced a $300,000 settlement with personal injury law firm Keches Law Group, P.C. for allegedly operating a kickback scheme with a pharmacy to whom it referred injured clients.
• Arizona Attorney General Brnovich applauded a Ninth Circuit ruling reversing a Wesson Oil class action settlement over a 100% natural claim where the majority of the recovery went to attorneys instead of consumers and where attorneys general and the Ninth Circuit believed the injunctive relief portion was weak.

Friday, June 4, 2021:

Civil Rights

• Connecticut Attorney General Tong applauded the state Senate’s passage of legislation strengthening the Attorney General’s ability to enforce state civil rights laws, including enforcing against state hate crimes laws, by formalizing the Attorney General’s ability to investigate and bring civil rights lawsuits.

Covid-19

• Colorado Attorney General Weiser announced that after an agreement with his office, travel company EF Educational Tours will soon notify consumers of refund options for trips that were canceled because of the pandemic, which will include a full refund, a voucher, or rescheduling the trip through September 2023.

Environment

• Kentucky Attorney General Cameron filed an amicus brief in U.S. Supreme Court case West Virginia v. Environmental Protection Agency, asking it to review a D.C. Circuit ruling allowing the Environmental Protection Agency to make strict carbon emission standards, which could result in the closure of coal-fired power plants.

Healthcare

• Missouri Attorney General Schmitt announced that four individuals are barred from participating in government healthcare services after Medicaid fraud prosecutions and convictions. All four providers pled guilty to healthcare fraud involving false records.
• California Attorney General Bonta announced his conditional approval of Prime Healthcare Foundation, Inc.’s sale of Glendora Oaks Behavioral Health Hospital to CHLB, LLC for about $24.25 million. Attorney General Bonta found that the sale with conditions, such as the requirement that CHLB continue to operate the hospital and maintain existing services for ten years, will be an improvement, as CHLB is more experienced in the management of acute psychiatric hospitals.