Each week, Crowell & Moring’s State Attorneys General team highlights significant actions that State AGs have taken. Here are this week’s updates.
- The state attorneys general comprising the Anti-Robocall Multistate Litigation Task Force announced their first legal action by filing a lawsuit in the U.S. District Court in Arizona against VoIP Avid Telcom along with its owner and vice president, alleging that they violated the Telephone Consumer Protection Act and the Telemarketing Sales Rule. Specifically, the lawsuit accuses the defendants of providing customized robocalling services and sending or routing robocalls across the U.S.
- Several attorneys general issued statements applauding the U.S. District Court for the District of Massachusetts’ decision to block American Airlines and JetBlue from implementing their joint venture, the Northeast Alliance. The U.S. Department of Justice and a bipartisan coalition of states had previously filed a lawsuit against the airlines alleging that the joint venture violates the Sherman Act.
- A multistate coalition of attorneys general sent a letter to Secretary of Energy Jennifer Granholm, opposing the Biden Administration’s proposed standards that would regulate the types of refrigerators, freezers, and refrigerator-freezers Americans can use or buy. The coalition contends that the proposed standards for these appliances are a violation of the principles of federalism.
District of Columbia
- Washington, D.C. Attorney General Schwalb announced a settlement with Easy Healthcare Corporation, requiring the company to make significant changes to its ovulation tracking app “Premom” to make sure users’ sensitive data does not get shared with third parties without notice or consent. The settlement also includes a $33,333 civil penalty.
- Illinois Attorney General Raoul announced that the Illinois Senate passed his Firearm Industry Responsibility Act, which would amend the Consumer Fraud and Deceptive Business Practices Act to clarify that firearm industry businesses are subject to civil liability if they engage in illegal business and marketing practices. The bill will now go to the governor for approval.
- Illinois Attorney General Raoul announced that the Illinois General Assembly passed his legislation that would increase state-level oversight of health care mergers and acquisitions that include large provider organizations and health care facilities. The bill will now go to the governor for approval.
- Illinois Attorney General Raoul announced that he filed a consent decree resolving an investigation into warehousing and distribution companies Global Trade Hub Inc. and Eve Group Series LLC for allegedly misclassifying workers and failing to properly pay overtime wages. The agreement includes a $142,200 civil penalty and injunctive relief.
- Minnesota Attorney General Ellison announced that the state legislature passed legislation codifying two of his task force recommendations for lowering pharmaceutical drug prices. Specifically, the newly passed legislation both prohibits drug manufacturers from imposing excessive price increases on generics sold in the state and establishes a Board that investigates cost increases, publishes reports on pricing trends, and establishes upper payment limits on the amount paid to purchase prescription drugs when appropriate.
- Minnesota Attorney General Ellison announced a settlement with the last of 10 defendants sued last year for the sale of deceptive solar-panel systems. The settlements have secured over $310,000 in restitution and resulted in Avolta Power, Inc., four related companies, and their managers being banned from additional sales in the state.
- New York Attorney General James announced a $4.3 million settlement with cryptocurrency company Coin Cafe for allegedly defrauding investors, specifically by charging unfair and undisclosed fees to use its wallet storage, which it marketed as “free” on its website. The settlement includes both refunds and fee limits, such as a limit to the amount of fees charged for Coin Café’s wallet service per month to ensure that all fees are adequately disclosed to investors.
- New York Attorney General James announced the recovery of $100,000 from wholesale grocer and drug distributor Quality King Distributors, Inc. for price gouging Lysol products during the pandemic. The agreement resolves a lawsuit filed earlier against the company.
- New York Attorney General James announced the recovery of $550,000 from medical management company Professional Business Systems, Inc. (d/b/a Practicefirst Medical Management Solutions and PBS Medcode Corp.) for failing to protect consumers’ personal information, including their health records, resulting in a cyberattack. In addition to the civil penalty, the company must adopt protective measures.
- North Carolina Attorney General Stein announced his support for the Unfair Real Estate Agreements Act. The proposed legislation, which follows Attorney General Stein’s lawsuit against MV Realty in March, would protect consumers from predatory, long-term real estate agreements.
- Pennsylvania Attorney General Henry announced a settlement with title loan company Auto Equity Loans of DE, LLC, resolving allegations that it levied unlawful interest rates, sometimes over 200% in annual interest. The settlement includes $705,000 in restitution, over $1 million in debt cancellation, and injunctive relief.
- Pennsylvania Attorney General Henry announced a settlement with Fluent, LLC and its subsidiaries, resolving allegations related to their role in millions of unwanted telemarketing calls. Specifically, the lawsuit alleged that the defendants made promotional offers to consumers without disclosing that by providing their personal information they consented to receive telemarketing calls from hundreds of sellers. The settlement includes a $250,000 civil penalty and injunctive relief.
- Utah Attorney General Reyes, along with the Federal Trade Commission announced the largest consumer settlement in state history against Response Marketing Group, LLC and its principals, resolving allegations that they used false promises to sell real estate investment training programs. The lawsuit includes a $15 million payment to consumer and bans the defendants from selling money-making opportunities. Failure to make these payments will result in an additional $15 million in civil penalties payable to the Utah DCP.
- Washington Attorney General Ferguson announced a court order against Ostrom Mushroom Farm, requiring it to pay $3.4 million to resolve a lawsuit alleging that it engaged in discrimination by firing its mostly female and Washington-based employees and replacing them with male foreign guest workers hired through the H-2A Temporary Agricultural Program, which is a violation of state law. Ostrom sold the facility while the lawsuit was pending, but the court order requires the new owner, Windmill Farms, to engage in a series of protective measures such as not misrepresenting the terms and conditions of employment.
- Washington Attorney General Ferguson announced a consent decree against Google, requiring the company to pay a $39.9 million civil penalty and implement court-ordered reforms to be more transparent about its location tracking settings. The lawsuit alleged that Google had misled consumers about their level of control over their location sharing abilities.