Each week, Crowell & Moring’s State Attorneys General team highlights significant actions that State AGs have taken. Here are this week’s updates.
- Several state attorneys general announced an over $45 million settlement with digital-asset financial services companies Nexo Inc. and Nexo Capital Inc., resolving allegations that they offered and sold unregistered securities.
- A multistate coalition of 25 state attorneys general filed a lawsuit over a U.S. Department of Labor rule that would permit 401(k) managers to direct client money to Environmental Social Governance investments. The coalition is arguing that the rule goes against the laws in the Employee Retirement Income Security Act of 1974 and would harm many individuals’ retirement accounts.
- A bipartisan coalition of state attorneys general sent a letter to the Biden Administration asking it to respond to several Governors’ requests that the U.S. Environmental Protection Agency issue regulations allowing the sale of E15 ethanol gasoline year-round under the Clean Air Act. The coalition maintains that E15 is cleaner and more cost-effective than E10, which has fewer restrictions.
- In light of Data Privacy Day, California Attorney General Bonta announced an investigative sweep involving sending letters to companies using mobile apps that do not comply with the California Consumer Privacy Act. The sweep focuses on apps in the retail, food, and travel industries that do not comply with opt-out requests or don’t offer mechanisms for those who want the sale of their data to stop. It also focuses on businesses that do not process consumer requests from an authorized agent such as through the app Permission Slip.
- Following winter storms, California Attorney General Bonta warned consumers to be wary of unlicensed contractors selling their services. The press release reminds consumers that price gouging during a state of emergency is illegal.
- Idaho Attorney General Labrador announced changes to the Idaho Consumer Protection Act related to the automatic renewal of subscriptions that became effective on January 1. The new law, known as “Click to Cancel,” requires businesses selling subscription products and services to provide a way for subscribers to cancel for free online or by the same method they used to subscribe. For subscriptions that have an original term of a year or longer, the business must send reminders 30-60 days before the renewal deadline, and include information about how to cancel.
- Kansas Attorney General Kobach announced that he plans to sue the Biden Administration unless the U.S. Fish and Wildlife Service withdraws its rule listing the lesser prairie chicken as a threatened species. The press release notes concern about the effect of the rule on Kansas ranchers, oil producers, and wind farms, and the belief that the rule is illegal.
- Massachusetts Attorney General Campbell announced her support for several pieces of legislation in the 2023-2024 session. Among other things, these bills provide for additional tools for the Attorney General to protect nursing home residents from abuse and neglect, enhance consumer protection laws related to the purchase of used or leased automobiles, and electric rate-payer protections.
- Massachusetts Attorney General Campbell announced that baked goods wholesale company Dutch Maid Bakery, Inc. and Dutch Maid Bakery Massachusetts Business Trust, two executives, and associated staffing agency Hub Personnel Services, Inc. and its executives were issued a series of citations for wage and hour violations. The citations total over $440,000 in restitution and penalties for conduct such as failing to pay minimum wage and overtime wages, failing to keep and produce accurate payroll records, and failing to provide written notice of earned sick leave time.
- Massachusetts Attorney General Campbell announced that her office reached a $350,000 settlement with Hometown Auto Framingham, Inc., resolving allegations that the company used unfair, deceptive, and discriminatory pricing of “add-on” products that it sold to Black and Hispanic consumers. In addition to the monetary provision, the settlement requires the company to provide staff training on implicit bias, requires disclosure of and improved oversight of “add-on” product pricing, and additional compliance monitoring requirements.
- New York Attorney General James sent a letter to Madison Square Garden Entertainment Corporation seeking information about its use of facial recognition technology to prohibit some ticketholders from entering related venues. This reportedly included denying entry to lawyers affiliated with adverse litigation against the company. The letter notes a concern that denying entry to these individuals could violate human rights laws; and it questions whether the facial recognition software is reliable and includes safeguards to avoid bias and discrimination.
- North Dakota Attorney General Wrigley announced that he filed a proposed Consent Judgment seeking approval of a settlement with photography business Glasser Images, its owner, and a former employee. The settlement, which centers around the business’s failure to provide services after receiving advance payments, includes Glasser’s admission that it engaged in consumer fraud, restitution over $800,000, and a $30,000 civil penalty. It also bans the defendants from owning or operating a photography business in the state for at least 15 years.