Each week, Crowell & Moring’s State Attorneys General team highlights significant actions that State AGs have taken. Here are this week’s updates.
- Utah Attorney General Reyes and Oregon Attorney General Rosenblum announced a settlement with nursing, therapy, senior and assisted living provider Avalon Healthcare Management after a 2019 data breach involving the company’s email system. The settlement includes a $200,000 payment and requires Avalon to improve its data and information security systems.
- Arizona Attorney General Brnovich filed a lawsuit against natural thyroid prescription drug manufacturer RLC Labs, alleging that the company made false or misleading statements about its products. Specifically, the lawsuit alleges that the company falsely advertised the potency of two of its products, continued to make false or misleading statements after a recall, and failed to honor its promise of refunds. The lawsuit seeks injunctive relief and consumer restitution.
- Colorado Attorney General Weiser announced the creation of a statewide taskforce to combat organized retail theft. The press release also states that a new state law went into effect on January 1, 2023, requiring companies that operate online marketplaces to help with certain measures to prevent the sale of stolen goods. Among other things, these companies must identify online sellers, verify sellers’ information, make certain seller disclosures to consumers, and provide an easy reporting mechanism for suspicious activity.
District of Columbia
- The Washington, D.C. Attorney General’s Office announced that Brian Schwalb was sworn in on January 2, 2023 as the District’s Attorney General. Attorney General Schwalb previously served as a private practice trial lawyer and in the Tax Division of the U.S. Department of Justice. Among other things, Schwalb stated that as Attorney General he is committed to ensuring resources and opportunities are shared equitably, protecting and strengthening democratic rights, and maintaining accountability.
- Michigan Attorney General Nessel announced that the Michigan Public Service Commission denied DTE Electric Company’s request to implement a $12.6 million prepay program and rescind customer billing protections. The denial comes after the Attorney General’s Office intervened against the proposal.
- New Jersey Attorney General Platkin announced a $27.375 million settlement with Yellowstone Capital LLC, its parent company Fundry LLC, and six associated companies, resolving allegations that they harmed small businesses with their merchant cash advance business, which was actually a predatory lending practice. The total settlement amount includes loan forgiveness, restitution, civil penalties, attorneys’ fees, and costs.
- Ohio Attorney General Yost announced eight lawsuits filed at the end of 2022 against businesses engaging in allegedly misleading and unlawful practices. Many of the lawsuits accuse companies, such as appliance-supply companies, a caterer, a furniture store, and landscaping/repair companies, of failing to complete work after accepting payments and/or failing to provide refunds. The lawsuits generally seek costs, consumer reimbursement, civil penalties, and injunctive relief.
- Vermont Attorney General Young announced that her office filed a lawsuit against hearing aid company Nano Hearing Aids for allegedly misleading consumers about its products’ quality and effectiveness. For example, the lawsuit alleges that the company falsely represented that its products were FDA-approved and made in the USA and promoted a deceptive online hearing test. The lawsuit seeks disgorgement, consumer refunds, and penalties.
- Washington Attorney General Ferguson announced proposed legislation, the Robocall Scam Protection Act, which would hold telecommunications providers liable for allowing illegal robocalls. Specifically, the law would make it a violation of the state Consumer Protection Act to knowingly facilitate illegal robocalls (for voice service providers), robocall an individual on the Do Not Call Registry, or deliberately falsify one’s caller ID display. The bill also provides for both a private right of action and civil penalties.
- Washington Attorney General Ferguson filed a lawsuit against plastic surgery provider Allure Esthetic and its owner for allegedly falsely inflating its online ratings on platforms including Yelp and Google. The company allegedly required employees to post fake positive reviews and pressured patients to remove negative ones. The lawsuit also alleges that the company edited “before and after” photos and applied for and kept rebates on patients’ behalf without consent. The lawsuit seeks injunctive relief, penalties, and restitution.