Each week, Crowell & Moring’s State Attorneys General team highlights significant actions that State AGs have taken. Here are this week’s updates.
- The New York Attorney General Letitia James and a coalition of five attorneys general reached a $6.5 million settlement with Morgan Stanley Smith Barney LLC for compromising millions of customers personal information. Morgan Stanley engaged an inexperienced moving company to decommission hard drives and servers holding sensitive customer data. Insufficient monitoring led to the sale of equipment, some still containing private information, at auction. The issue came to light only when a buyer found the data and notified the company. Because of Morgan Stanley’s failure to properly monitor the moving company, computers were not adequately decommissioned and unencrypted data was not erased from certain computer devices that contained sensitive customer information.
- Arizona Attorney General Kris Mayes filed a lawsuit against several pharmacy benefit managers and pharmaceutical manufacturers for scheming to artificially inflate the price of insulin and other diabetes drugs in violation of the Arizona Consumer Fraud Act.
- Attorney General Rob Bonta and the Federal Trade Commission filed an antitrust lawsuit in the United States District Court for the Northern District of California, challenging John Muir Health’s acquisition of San Ramon Regional Medical Center from Tenet Healthcare Corporation, claiming the acquisition is inherently anticompetitive and illegal under the Clayton Act. The lawsuit argues that the proposed acquisition threatens to eliminate substantial competition and increases consolidation in a highly concentrated market, which will lead to an increase in prices for patients, employers, and insurers. The lawsuit aims to prevent John Muir from becoming the sole owner of San Ramon Regional Medical Center.
- Attorney General Rob Bonta and the FTC announced a $700,000 settlement with CRI Genetics, a California company offering DNA testing and ancestry services. The settlement resolves allegations that CRI offered false and misleading consumer reviews and testimonials, misled consumers about the superiority of its genetic testing services and engaged in deceptive billing practice. The settlement also bars the founder of CRI from engaging in future deceptive practices.
District of Columbia
- Attorney General Brian L. Schwalb announced that the Office of the Attorney General resolved three investigations into employers who violated the District’s ban on non-compete agreements. Healthcare Staffing, Inc., a staffing firm, and SPiN DC, LLC, a ping pong social club, will pay collectively more than $150,000 to workers and the District as part of the settlement. The staffing firm, social club, and Hissho International, LLC, a food service company, will be required to change their policies to ensure compliance with the law.
- Massachusetts Attorney General Andrea Campbell publicized a settlement, through an assurance of discontinuance, with Rent-A-Center, which resolves allegations that the company engaged in a pattern of unfair and deceptive business practices against consumers in violation of state consumer protection laws. Rent-A-Center will pay $8.75 million in civil penalties to the Commonwealth, and make significant changes to its business practices to comply with state consumer protection laws, including fair debt collection and repossession practices.
- New Hampshire Attorney General John M. Formella reported that the Belknap County Grand Jury returned three indictments charging Gerard Michael Healey with three class A felony counts of Theft. The indictments stem from an investigation which previously led to Healey being charged with 19 misdemeanor counts alleging he collected customer deposits in violation of New Hampshire’s Consumer Protection Act. In total, Healey is accused of stealing approximately $209,000.
- New Jersey Attorney General Matthew J. Platkin and the Division of Consumer Affairs announced that Dollar General Corp., a national discount retail chain with 186 stores in New Jersey, has agreed to pay $1.2 million to resolve allegations by the Division’s Office of Weights and Measures (OWM) that the chain repeatedly engaged in pricing violations at several retail stores across the state. The settlement, which includes a $1.18 million civil penalty, is the largest ever obtained by OWM.
- The Pennsylvania Attorney General Michelle Henry announced a lawsuit against Real McKoy Auto Sales, LLC, a Delaware based used vehicle dealer, and its owner, Ervin McKoy, for undisclosed issues with vehicles sold “as-is,” and failure to give buyers title documentation. The lawsuit asserts that Real McKoy engaged in unfair and deceptive acts and practices in violation of the Consumer Protection Law. Specifically, consumers alleged that used vehicles they purchased broke down or were deemed unsafe to drive days after they were purchased from Real McKoy.
- Aramingo Pharmacy, through its owner, Ahmed Bachir, pleaded guilty to Medicaid fraud after an investigation uncovered hundreds of thousands of dollars in fraudulent claims to health insurance providers, including Medicaid. Bachir will be required to pay $573,992 in restitution to the health insurance providers and $300,866 to the Commonwealth’s Bureau of Program Integrity, for a total restitution payment of $874,858.
- Utah Attorney General Sean Reyes and the Utah Department of Commerce’s Division of Consumer Protection filed a lawsuit against Eli Lily, Novo Nordisk, and Sanofi, insulin manufacturers, and CVS Caremark, Express Scripts, and OptumRx, pharmacy benefits managers, for their involvement in an insulin pricing scheme. The lawsuit alleges that the manufacturers and PBMs worked together to inflate the reported price of diabetes medication. PBMs would raise prices during the pharmaceutical pricing chain, while manufacturers raised the price of diabetes medication only to refund a portion back to PBMs through rebates, discounts, credits, and administration fees.
- Washington Attorney General Bob Ferguson publicized that his office will partner with tribes across the State to research, identify and create an inventory of cold cases involving missing and murdered Indigenous people that date back more than 40 years. The federal Emmett Till Cold Case Investigations and Prosecution Program supports state, local and tribal law enforcement efforts to investigate and prosecute cold cases from before 1980 that involve racially motivated crimes or civil rights violations.