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

Multistate

  • Connecticut Attorney General Tong will host the Eastern Region Meeting of the National Association of Attorneys General from August 1-3, in Uncasville, Connecticut. The Eastern Region Meeting will showcase two substantive areas: gaming and antitrust. Topics will include challenges to competition because of the use and developments of artificial intelligence, effects of non-compete clauses on labor markets, and partnerships between attorneys general and federal antitrust enforcers, with Jonathan Kanter, the Assistant Attorney General of the Antitrust Division, at the U.S. Department of Justice, as the keynote speaker.
  • A coalition of 24 state attorneys general submitted a letter supporting stronger protections for patients’ reproductive health information regarding the Biden Administration’s consideration of amendments to the Health Insurance Portability and Accountability Act (HIPPA) Privacy Rule, the federal law that governs the disclosure of protected health information (PHI). If implemented, the amendments would make it illegal to share a patient’s PHI if the PHI is being sought for certain criminal, civil, and administrative investigations and/or proceedings against a patient in connection with a legal abortion or other reproductive care. The letter to the administration welcomed the federal government’s proposed HIPAA amendments to the Privacy Rule and argued the provisions were essential steps to creating a unified privacy landscape.
  • A coalition of 6 state attorneys general and the Federal Trade Commission challenged the $28 billion acquisition of Horizon Therapeutics by Amgen, one of the world’s largest biopharmaceutical drug companies. The coalition alleges that the proposed acquisition raises significant anticompetitive concerns, and seeks an order to prevent the finalization of the acquisition because Amgen’s proposal violates the Clayton Act. The coalition also argues that should the acquisition be allowed to proceed, the newly-consolidated company would be too powerful in the autoimmune disease medications market, specifically with regards to access over Tepezza and Krystexxa. The coalition further alleges that Amgen has a history of leveraging existing market power and bundling its drugs to exclude competitors.
  • A coalition of 26 state attorneys general announced their support of the Federal Trade Commission’s proposed amendments to its Negative Option Rule in a comment letter filed on June 26 in response to an FTC notice of proposed rulemaking. The coalition argues that the proposed amendments would offer additional protections to consumers by offering more accessible cancellation choices and requiring recurring reminders of expected charges.
  • A coalition of 19 attorneys general and various cities have filed comments in support of the U.S. Environmental Protection Agency’s proposal to update and strengthen the 2012 Mercury and Air Toxics Standards (MATS). Specifically, the proposed MATS update will limit coal and oil-fired power plant emissions of toxic air pollutants, such as mercury and other toxic metals.
  • A coalition of 20 state attorneys general submitted comments opposing the Environmental Protection Agency’s proposed regulation regarding Ethylene Oxide (EtO) and related emissions standards promulgated under the Clean Air Act (CAA) and the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA). According to the coalition, EtO is used to sterilize roughly 20 billion medical devices annually, and there are no sterilization substitutes for many devices. The coalition also argues that regulating EtO use and emissions could severely affect the medical device supply chain and the provision of healthcare throughout the United States.
  • A coalition of 21 Attorneys General submitted a letter to the U.S. Department of Education applauding its proposed Gainful Employment Rule. To avoid institutional abuse, the comment letter urges the DOE to both expand and clarify its proposed requirements regarding institutional compliance with state consumer-protection laws and limit any relaxation of standards within the Gainful Employment Rule, such as the decreased earnings threshold it is proposing for programs serving students in economically disadvantaged locales. Originally issued in 2012, the Gainful Employment Rule aims to protect students by, among other things, establishing expectations that graduates of for-profit colleges and of career-training programs at nonprofit colleges earn enough money to meaningfully pay back their federal student loans.

California

  • California Attorney General Bonta announced the State Assembly Judiciary Committee’s vote to approve Senate Bill 680, which would hold large social media companies accountable for causing specified harms to child users on their platforms. The bill would prohibit large social media companies from knowingly or negligently using a design, algorithm, or feature that the company knew, or by which the exercise of reasonable care should have known, causes child users to experience addiction to the social media platform, develop an eating disorder, or inflict harm on themselves or others. Social media companies could also be held liable for sending child users information regarding how to obtain firearms or controlled substances, or how to die by suicide, if the child acts on that information.
  • California Attorney General Bonta, in partnership with the U.S. Department of Justice announced a $68 million settlement with four healthcare providers, resolving allegations that CHC, Cottage, Sansum and CenCal Health submitted or caused the submission of fraudulent claims to Medi-Cal in violation of the state and federal False Claims Act. The submissions were allegedly part of an organized scheme to wrongfully retain federal funds meant for Medi-Cal’s Adult Expansion under the Affordable Care Act by, in part, submitting or causing to submit medical expenses that were not allowed under the program. The bulk of the settlement will be returned to the federal government. California will receive approximately 10% of the settlement amount.

District of Columbia

  • District of Columbia Attorney General Schwalb announced that SmileDirectClub, an online orthodontics company, will be required to release more than 17,000 consumers across the United States from onerous provisions in its nondisclosure agreements and change its refund policy for US consumers as part of a settlement resolving a consumer protection lawsuit brought by OAG for the District of Columbia. In 2022, OAG sued SmileDirectClub for unfair and deceptive practices, alleging that the company unlawfully used NDAs to silence consumers, manipulate online reviews, and hide information about the safety and effectiveness of its products from the public and regulators. As part of the settlement, SmileDirectClub must notify consumers who previously signed NDAs that the NDAs are void, and it must stop requiring consumers to sign agreements that prevent the sharing of information before it will issue refunds.

Florida

  • Florida Attorney General Moody charged over twenty individuals in a criminal Racketeer Influenced and Corrupt Organizations Act case involving fraudulent Vehicle Identification Numbers on high-end vehicles. Florida Department of Law Enforcement agents led the investigation known as Operation Gone in 60 Days and will prosecute the case. The involved individuals were allegedly selling stolen vehicles with fraudulent VINs, illegally sourced license plates, and dummy insurance policies.

Illinois

  • Illinois Attorney General Raoul announced a $2.35 million multistate settlement with AdoreMe, Inc., an online lingerie retailer. The settlement resolves claims that the company deceptively marketed its VIP Membership Program to consumers and made it difficult for consumers to cancel memberships. After enrolling in the VIP Membership Program and incurring monthly membership charges, customers could only avoid an automatic charge if they made a purchase before the sixth day of the month or logged into their AdoreMe accounts to decline the charge. Beyond the automatic nature of the monthly charges, the settlement alleges that AdoreMe failed to properly disclose the terms of the program to consumers or make clear that the discounted prices were time limited. AdoreMe has agreed to make changes to its business practices.

Oregon

  • Oregon Attorney General Rosenblum announced that the Oregon legislature passed Senate Bill 619, the Oregon Consumer Privacy Act. The bill passed the Oregon House unanimously and passed the Senate with a vote of 23-2, suggesting broad bipartisan support for enhanced privacy protections. The bill was developed over the past four years by the Attorney General’s Consumer Privacy Task Force. The Oregon Consumer Privacy Act affirmatively provides Oregonians with a number of important rights over their personal information and imposes specific obligations on business. The consumer rights include: Right to Know; Right to Correction; Right to Deletion; Right to Opt Out; Right to Data Portability; Sensitive Data Protections; Special Protections for Youth.

Pennsylvania

  • Pennsylvania Attorney General Henry filed a lawsuit against a Pittsburgh-area landscaping company that failed to fulfill its contracts with consumers. The lawsuit alleges Garden Art of Pittsburgh, LLC and its CEO, Arthur Ford, Jr., violated Pennsylvania’s Unfair Practices and Consumer Protection Law by abandoning projects after retaining thousands of dollars in consumer deposits and utilizing non-compliant contracts. The lawsuit seeks injunctive relief barring Ford and Garden Art from contracting or performing home-improvement work in Pennsylvania and consumer restitution, civil penalties, and costs. Ford was also charged criminally in Allegheny County.

Rhode Island

  • Rhode Island Attorney General Neronha filed a lawsuit against Smart Green Solar, LLC and its CEO Jasjit Gotra for violating Rhode Island’s Deceptive Trade Practice Act. The lawsuit alleged Smart Green engaged in a pattern of unfair and deceptive trade practices targeting Rhode Island consumers of residential solar panels. Smart Green went door-to-door making unsolicited sales pitches for residential solar panel systems and allegedly misled consumers with false statements and did not provide contracts to customers. The court order seeks to require Smart Green to stop misleading customers, provide paper contracts immediately, and pay restitution to injured customers.

West Virginia

  • West Virginia Attorney General Morrisey filed suit against a gravestone/memorial seller for allegedly taking money from consumers and not delivering the products the consumers paid to receive. Naylor Monument Sales and Naylor Monument Company, LLC, along with owner Glenn A. Naylor II, sells gravestones, headstones, and other monuments and were charged with violating the state’s Consumer Credit and Protection Act. The lawsuit seeks to enjoin the Defendants from engaging in unfair or deceptive acts or practices in connection with the sale of memorials and monuments are related activities. The companies allegedly took customer’s payments, but did not deliver or failed to install cemetery monuments, and repeatedly dodged calls from customers seeking answers.