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

Monday, August 9, 2021

Consumer Fraud Act

  • New Jersey Acting Attorney General Bruck announced that the Supreme Court of New Jersey issued an order requiring firearms manufacturer Smith & Wesson, Corp. to comply with an October 2020 investigative subpoena as part of an investigation into purported Consumer Fraud Act violations related to the advertising of firearms to consumers in New Jersey.

Federal Communications Commission

  • A bipartisan coalition of 51 attorneys general, co-led by Arkansas Attorney General Rutledge, North Carolina Attorney General Stein, and Pennsylvania Attorney General Shapiro, sent a letter to the Federal Communications Commission (“FCC”) urging the FCC to accelerate the deadline for smaller telephone companies to implement STIR/SHAKEN caller ID technology under the TRACED Act. Currently, smaller telephone companies have until June 2023 to implement this technology, while larger companies were required to put it in place by June 2021. The attorneys general are asking for the smaller company deadline to be moved to June 30, 2022.

Tuesday, August 10, 2021

Deceptive Claims

  • Florida Attorney General Moody announced a lawsuit against Wellness Program Services, LLC, which does business as Trusii, for alleged false claims that its drinking water systems may help against conditions, such as cancer, diabetes, and depression, as well as for allegedly using deceptive offers of a case study compensation system to help with payments. The lawsuit also includes allegations of other deceptive advertising about the concentration of hydrogen water content in the machines and violations of the warranty and refund policies. The lawsuit seeks restitution, civil penalties, a permanent injunction, and fees and costs.

Wednesday, August 11, 2021

Elder Abuse and Fraud / Door-to-Door Sales

  • Florida Attorney General Moody announced a consent judgment against home-health service provider Senior America Home Care, Inc. for soliciting senior citizens through door-to-door sales for services that it failed to deliver. The judgment includes a $2.5 million restitution payment, $1.9 million of which is suspended for inability to pay, and permanently bars the defendants from in-home sales and ownership of home-health businesses.

Labor and Employment

  • A coalition of 17 attorneys general is asking the U.S. Senate to pass the Protecting the Right to Organize Act of 2021 (“PRO Act”), which offers protections for workers attempting to organize by modernizing and strengthening the National Labor Relations Act. Among other things, the PRO Act would allow the National Labor Relations Board to fine companies that retaliate against organizing employees and would lower the standard for independent contractors to demonstrate that they are employees.
  • Vermont Attorney General Donovan announced that Vermont’s Employee Misclassification Task Force will hold two public hearings about employee misclassification on August 26 and 27, 2021. Potential recommendations the task force is considering include legislative changes related to joint enforcement, a private right of action related to employee misclassification, and a private attorneys general act related to employee misclassification.

Medicaid Fraud

  • Connecticut Attorney General Tong announced a $350,000 settlement with Cornell Scott Hill Health Corporation, resolving allegations that it overbilled the Connecticut Medicaid program for dental services. Specifically, the health center allegedly required patients to receive dental cleanings and exams on separate days, resulting in a double Medicaid payment. The settlement also includes a requirement that the center allow patients to schedule dental cleanings and exams for the same visit.

Predatory Practices

  • Maryland Attorney General Frosh announced that the Circuit Court for Allegany County affirmed his office’s final order against Cash-N-Go, Inc. and its executive and related businesses for making predatory and unlicensed consumer loans at excessive interest rates. The final order includes a $2.2 million restitution payment and a $1,200,750 penalty.

Thursday, August 12, 2021

Fair Debt Collection Practices Act

  • Georgia Attorney General Carr announced a $19.8 million settlement with debt collector Turtle Creek Assets, Ltd. and its owner, resolving allegations that the company violated the federal Fair Debt Collection Practices Act and the Georgia Fair Business Practices Act. According to the lawsuit, the business threatened consumers with arrest or imprisonment if they did not pay debts, failed to provide written notices within five days of the initial communication, and failed to disclose that its employees were debt collectors. The settlement requires the company to cease collections on all Georgia consumer accounts, comply with injunctive provisions, and pay $41,500 in penalties and fees.
  • Massachusetts Attorney General Healey announced a $1.6 million settlement with online loan servicer Avant over allegations that the company engaged in abusive debt collection practices against consumers by failing to provide proper debt validation notices and making unlawful and high-volume debt collection calls. In addition to the payment, the settlement includes injunctive relief requiring the company to comply with debt collection laws and regulations.

Financial Misconduct – Illegal Bookmaking

  • California Attorney General Bonta announced a settlement with Lucky Lady Card Room, resolving 2016 allegations of illegal bookmaking operations. The settlement revokes the owner’s gambling license and requires payments of $125,000 in penalties and $50,000 for investigative costs.

Labor and Employment

  • California Attorney General Bonta filed an amicus brief in San Diego County Lodging Association v. San Diego, seeking to justify San Diego’s “right to return” ordinance, which requires certain employers to give workers who were laid off due to COVID-19 the first chance to get re-hired for re-opened positions.

Friday, August 13, 2021

Fraud Schemes

  • New York Attorney General James issued a warning about a common text and email scam in which scam artists pretend to be an employee’s boss and ask for gift cards for a supposed work emergency.

Labor and Employment

  • New Jersey Acting Attorney General Bruck announced that private transportation company Academy Lines LLC must pay a former bus driver $40,000 and arrange anti-discrimination employee training in response to allegations that the company wrongly fired the former employee for taking intermittent leave to care for his seriously ill family member.

Medicaid Fraud

  • Connecticut Attorney General Tong announced a $678,901 state and federal settlement with vision care service provider A. Vision and an optician, resolving allegations that the company overbilled the Connecticut Medicaid program for vision care and eyeglasses. Specifically, the company allegedly billed for “miscellaneous” services and items that were not medically necessary and did not bill for these items at their acquisition cost, as well as billed for extra pairs of children’s eyeglasses. The agreement also includes injunctive relief, such as a mandatory training program and audits.

Price Gouging

  • Virginia Attorney General Herring announced a lawsuit against Tahir and Sons LLC d/b/a Interstate Fuel LLC for allegedly violating Virginia’s price gouging law by charging unconscionable prices for gasoline after the state of emergency in response to the Colonial Pipeline shutdown. The lawsuit, which requests injunctive relief and restitution, among other remedies, alleges that the business increased its prices by as much as 33.4% above its pre-emergency prices and that the price increases were not attributable to additional costs.
  • Florida Attorney General Moody announced that Florida’s price gouging law and hotline have been activated in many counties in preparation for Tropical Depression Fred. According to the press release, “During a storm-related declared state of emergency, state law prohibits excessive increases in the price of essential commodities, such as food, water, hotel rooms, ice, gasoline, lumber and equipment, needed as a direct result of the event.”