Each week, Crowell & Moring’s State Attorneys General team highlights significant actions that State AGs have taken. Here are this week’s updates.
- The National Association of Attorneys General, the nonpartisan national organization for attorneys general, elected three-term Oregon Attorney General Ellen F. Rosenblum as president of the association during its annual meeting. NAAG serves as a community for attorneys general to work collaboratively to address issues. Attorney General Rosenblum stated “I am honored to lead this organization in the year ahead, to continue to find and build on common ground, especially at a time of such divisiveness in our national body politic.” Attorney General Rosenblum announced her Presidential Initiative titled “America’s Youth: AGs looking out for the Next Generation.”
- A bipartisan multistate coalition of seven attorneys general, led by Ohio Attorney General Yost, filed a federal antitrust lawsuit challenging the National Collegiate Athletic Association’s transfer eligibility rule as an illegal restraint on college athletes’ ability to market their labor and control their education. The transfer eligibility rule requires college athletes who transfer among Division I schools to wait one year before competing in sports, unless the NCAA waives the rule for the particular athlete. The multistate lawsuit was filed in the U.S. District Court for the Northern District of West Virginia and seeks a temporary restraining order and preliminary injunction against the NCAA.
- A coalition of twenty attorneys general submitted letters to the federal Office of the Comptroller of the Currency and the Consumer Financial Protection Bureau urging both regulators to hold national banks accountable to investigations conducted by state attorneys general regarding violations of state law. The letter states that the Dodd-Frank Act codified that national banks are subject to state consumer protections law as state attorneys general are the primary enforcers of state consumer protection laws regarding lending and debt collection.
- A coalition of 18 state attorneys general from Minnesota, Arizona, California, Colorado, Connecticut, D.C., Delaware, Illinois, Maine, Maryland, Massachusetts, New Jersey, New York, Oregon, Pennsylvania, Vermont, Washington, and Wisconsin, sent a letter to Congress in support of fund managers’ use of Environmental, Social, and Governance factors. The letter explains that ESG factors can help inform fund managers’ risk-return analyses by providing insight into a company’s ability to adapt to climate change, respond to societal trends, and maintain regulatory compliance, among other things. Additionally, the attorneys general point out the significant body of evidence that shows consideration of ESG factors may lead to reduced risks and greater returns for investors. The coalition urges Congress to not prohibit fund managers from integrating ESG factors into their investment decisions to maximize returns and minimize risks.
- A bipartisan coalition of 33 state attorneys general filed an amicus brief to the U.S. Supreme Court defending states’ rights to enforce state consumer financial protection laws against state and national banks. In the brief filed in Cantero v. Bank of America, the coalition urges the Supreme Court to overturn a Second Circuit Court of Appeals decision holding that the National Bank Act preempts a New York state law that requires mortgage lenders to pay a 2% minimum interest rate on funds held in mortgage escrow accounts. At least 13 other states have similar laws in place to protect consumers.
- Arkansas Attorney General Griffin filed a lawsuit against Coast to Coast, Inc. for violating Arkansas’ deceptive trade practices act. Across five years, consumers have filed over 60 complaints against Coast to Coast for failing to complete delivery of its prefabricated metal buildings and structures. Consumers pay in advance and Coast to Coast allegedly misses delivery deadlines and/or ceases communications with consumers. The lawsuit seeks civil penalties totaling over $500,000.
- California Attorney General Bonta and California State Controller Cohen announced a settlement with ClubCorp Holdings Inc., a Texas-based company that is the owner-operator of more than 200 private golf and country clubs nationwide. Attorney General Bonta’s complaint was initially filed in 2019 and alleged that ClubCorp failed to repay more than $43 million in membership deposits owed to more than 30,000 California members. Separately, the State Controller’s Office sued ClubCorp in 2019. The announced settlement resolves both lawsuits and will require the company to repay consumers their full deposits with 10% per year interest and pay the State Controller and Attorney General’s Office $31.25 million in civil penalties.
- California Attorney General Bonta announced the filing of a lawsuit against MV Realty, a Florida based real estate company, for allegedly engaging in predatory schemes targeting vulnerable homeowners. According to the complaint MV Realty locked homeowners into 40-year exclusive listing agreements and placed illegal liens on nearly 1,500 California homeowners in violation of California’s real estate laws and do-not-call laws as well as the federal Truth in Lending Act. MV Realty filed for bankruptcy on September 22, 2023. The California Department of Justice will also file motions as necessary to protect its interests in that bankruptcy action.
- Florida Attorney General Moody filed a lawsuit against Pro Pool Builders, LLC for misleading Florida consumers. Pro Pool Builders promised to complete pool construction within 90 days from the issuance of a permit, but in an investigation the Office of the Attorney General’s Consumer Protection Division uncovered that Pro Pool Builders failed to complete, or even start, many consumers’ pools despite receipt of payment. Pro Pool Builders abruptly shut down and stopped responding to consumers in early 2022. The lawsuit seeks to enjoin Pro Pool Builders and seeks civil penalties.
- Kansas Attorney General Kris Kobach announced the refiling of a lawsuit against Macquarie Energy alleging that the company manipulated natural gas prices during Winter Storm Uri in February 2021. According to the complaint, Macquarie, the nation’s second-largest gas marketer, manipulated natural gas prices by overpaying for natural gas from the state’s largest supplier. Macquarie then allegedly passed the inflated costs on to Kansas consumers. The AG’s complaint alleges that Macquarie overcharged Kansans $50 million.
- Michigan Attorney General Nessel joined Governor Whitmer for the signing of the Drug Immunity repeal, SB 410, eliminating provisions in the Michigan Product Liability Act that shielded pharmaceutical companies from lawsuits brought by consumers. The Michigan Product Liability Act made Michigan the only state in the nation that protected drug manufacturers and sellers from liability stemming from the safety and efficacy of their products when passed in 1995.
- Minnesota Attorney General Ellison announced a settlement with Academic Financial Advisors LLC, d/b/a Alumni Support Center, a California student loan debt relief company that deceptively and illegally collected fees from customers while misrepresenting services offered to those customers. The settlement requires Alumni Support Center to cease operations in Minnesota and provide a full refund to Minnesotan consumers. Alumni Support Center is 1 of 52 student debt relief companies being investigated for suspected violations of consumer protection laws by Attorney General Ellison.
- Missouri Attorney General Bailey announced an investigation into Media Matters for America for alleged fraudulent solicitation of donations from Missourians. Attorney General Bailey sent a letter to Media Matters for America, serving as a formal hold notice under federal and Missouri law citing potentially unlawful business practices. Attorney General Bailey’s lawsuit follows a federal lawsuit alleging that Media Matters for America deceptively manipulated the algorithm on X (formerly known as Twitter) and relatedly solicited charitable donations. Attorney General Bailey’s letter made various record requests to allow the investigation to proceed.
- North Carolina Attorney General Josh Stein filed a lawsuit against A1 Towing Solutions, Inc. and its owner for allegedly racially targeting consumers and illegally booting and towing their vehicles. The lawsuit alleges that A1 improperly and predatorily booted vehicles and sought exorbitant fees for the release of booted vehicles. These allegations will be added to Attorney General Stein’s ongoing lawsuit alleging A1 violated NC’s price gouging laws during the Covid-19 pandemic.
- Pennsylvania Attorney General Henry filed a lawsuit against Split Rock Investments, LLC and SCH USA, LLC, both d/b/a Bel Air Owner’s Circle (“Bel Air”), for deceptive business practices and misrepresentations related to its resort property. The lawsuit alleges that Bel Air downgraded accommodations while representing the changes were upgrades and charged excessive fees, including maintenance fees, usage fees, and an international tax. The lawsuit seeks an injunction, restitution, and civil penalties.
- Tennessee Attorney General Jonathan Skrmetti announced the filing the first-ever consumer protection lawsuit against BlackRock Inc. alleging that the company made false or misleading representations to current and potential Tennessee consumers about the extent to which Environmental, Social, and Governance considerations affect BlackRock’s investment strategies. More specifically, the OAG’s office alleges that BlackRock has made inconsistent statements about its investment strategies, for instance asserting that the company focuses exclusively on return on investments while also asserting that the company gives special consideration to environmental factors.
- Washington Attorney General Ferguson announced that the Washington Office of the Attorney General will issue over four hundred thousand checks to Washington households resulting from the successful antitrust lawsuits against corporate chicken and tuna producers that engaged in alleged price fixing. The Office of the Attorney General will send approximately $40.6 million in financial restitution to consumers. Attorney General Ferguson recovered $35.5 million from a resolution with 15 of 19 broiler chicken producers in a 2021 price fixing lawsuit and $5.1 million from a resolution with four major tuna companies in a 2020 price fixing lawsuit.