Each week, Crowell & Moring’s State Attorneys General team highlights significant actions that State AGs have taken. Here are this week’s updates.
- A multistate coalition of attorneys general announced a settlement with CarMax Auto Superstores, Inc. requiring the company to disclose open unrepaired recalls related to the safety of used automobiles before consumers purchase them and to then receive consumers’ signatures before presenting additional sales paperwork. CarMax will use the National Highway Traffic and Safety Administration’s vehicle identification number tool to provide this information. The settlement also includes payment of $1 million in penalties.
- A multistate coalition of attorneys general filed an amicus brief at the United States Supreme Court in Gonzalez v. Google, asking the Court to interpret Section 230 of the federal Communications Decency Act narrowly to make sure that technology companies are accountable to state consumer protection laws for conduct that harms consumers.
- A multistate coalition of 18 attorneys general is seeking clarification from FedEx about its new policies to track firearm sales and potentially to create a database of gun purchasers in the US. The coalition is concerned about the creation of a gun registry in violation of federal law. Specifically, the coalition is seeking clarification about the background of the new policy and a copy of FedEx’s new firearms shipping agreement.
- A multistate coalition of 12 attorneys general, the California Air Resources Board, and the Ramsey County, Minnesota Attorney’s Office filed comments asking the Department of the Treasury and the Internal Revenue Service to implement the Inflation Reduction Act efficiently, equitably, and effectively to reduce greenhouse gas emissions, help states move to a clean energy economy, and create well-paying green jobs.
- The California, District of Columbia, and Illinois attorneys general filed a motion for a preliminary injunction to block Albertsons’ planned $4 billion “special dividend” payment to shareholders while review of Albertsons’ and Kroger’s proposed merger is ongoing. The motion follows a lawsuit filed earlier in November and reflects concern that the special dividend would reduce Albertsons’ ability to compete, resulting in higher prices and a decrease in services for consumers.
- Arkansas Attorney General Rutledge announced a settlement with the owners of Country Medical Services of Arkansas, Inc. for failing to protect sensitive patient information after a subsidiary hospital closed eight years ago, violating the Patient Information Protection Act and the Arkansas Deceptive Trade Practices Act. The settlement includes a suspended $730,000 civil penalty, requires the owners to repay over $40,000 to consumers, provides for lawful document destruction, and prevents the company from owning or operating a business in the state.
- Colorado Attorney General Weiser announced that three individuals who owned former business Microforce have pleaded guilty to criminal charges for deceptively advertising and selling a deodorizer that they knew could not kill COVID-19 and prevent the recontamination of surfaces during the pandemic. The company had received an advisory letter from the U.S. Environmental Protection Agency putting it on notice that the product was only authorized for deodorizing and not disinfecting and yet continued to make the false claims.
District of Columbia
- District of Columbia Attorney General Racine filed a lawsuit against online orthodontics company SmileDirectClub for allegedly requiring consumers who were dissatisfied or harmed to sign nondisclosure agreements to receive refunds, thus stopping these consumers from reporting their problems to government regulators and law enforcement and suppressing negative reviews. The lawsuit seeks injunctive relief, restitution, civil penalties, fees, and costs.
- District of Columbia Attorney General Racine announced a lawsuit against Pro Football Inc., owner of the Washington Commanders, for allegedly scheming to cheat ticket holders out of season ticket deposits and using the money for its own aims. The lawsuit seeks financial penalties and a court order forcing the Commanders to cease these practices and pay D.C. ticket holders restitution.
- Florida Attorney General Moody filed a lawsuit against VoIP service provider Smartbiz Telecom, LLC, seeking to stop the foreign-based robocalls the company was routing into the United States. The lawsuit seeks injunctive relief, restitution, and civil penalties.
- Kansas Attorney General Schmidt filed a lawsuit against leading national insulin manufacturers and pharmacy benefit managers. The lawsuit alleges that the manufacturers violated the Kansas Consumer Protection Act by operating an insulin pricing scheme causing consumers to pay excessive costs for insulin.
- Massachusetts Attorney General Healey announced a lawsuit against limited liability company Bedrock Group LLC and its owners for failing to return $3.4 million to the state for N95 face masks that were not delivered during the pandemic and instead using the monies to pay for personal expenses. The lawsuit seeks to recover the full amount the State paid to Bedrock, treble damages, civil penalties, and attorney’s fees.
- New Jersey Attorney General Platkin announced that the NJ Bureau of Securities secured a cease and desist order against online entity Buy Cannabis Stocks Investments Inc. a/k/a BCSI Inc., stopping it from offering unregistered securities in the form of investment packages related to marijuana and associated products, which violates state securities laws.
- New Mexico Attorney General Balderas announced that his office resolved the opioid litigation against Kroger Co., resulting in a $58.5 million settlement.
- New York Attorney General James announced an agreement with Marks Homecare Agency Inc. and Martin Ganz, requiring them to stop entering into anti-competitive no-poach agreements in the future. A previous investigation found that Ganz entered into an illegal agreement on behalf of the Company with a competing home care company to not take each other’s patients. Marks Homecare Agency Inc. and Martin Ganz will pay $550,000 in penalties.
- Washington Attorney General Ferguson released his seventh annual data breach report, revealing that data breaches are still at record-breaking severity. The report also includes proposed reforms to protect consumers’ data privacy, particularly sensitive reproductive health care data, such as passing legislation to protect health data, requiring additional transparency from data brokers and data collectors, expanding language access to data breach notifications, and passing legislation requiring companies to recognize and honor “global opt-out” preference signals.