Each week, Crowell & Moring’s State Attorneys General team highlights significant actions that State AGs have taken. See our State Attorneys General page for more insights. Here are last week’s updates.

Multistate

• A multistate coalition of 25 attorneys general filed a brief asking the 5^th Circuit Court of Appeals to uphold a lower court ruling that the Corporate Transparency Act (CTA) is unconstitutional.  The brief alleges that the CTA not only burdens small businesses, but also violates the authority of states to regulate corporate formation. The filing was co-led by South Carolina, West Virginia, and Kansas, but the brief has been joined by Alabama, Arkansas, Florida, Georgia, Idaho, Indiana, Iowa, Kentucky, Louisiana, Mississippi, Missouri, Montana, Nebraska, North Dakota, Ohio, Oklahoma, South Dakota, Tennessee, Texas, Utah, Virginia, and Wyoming.

California

• Attorney General Rob Bonta secured a $625,000 settlement from Realpage, Inc. and property developer and manager, Holland, for violating the COVID-19 Tenant Relief Act. The two companies violated the Tenant Relief Act’s prohibitions on using COVID-19 rental debt as a negative assessment factor in rental decisions. In addition to paying the settlement, both companies must also comply with a variety of injunctive terms requiring compliance with California law and imposing additional reporting requirements to the Office of the Attorney General.

• Attorney General Bonta released guidance for businesses to comply with a new law banning flavored tobacco. The guidance clarifies the scope of the law and its enforcement mechanisms allowing the state to seek civil penalties against sellers and to seize unapproved products not appearing on the Unflavored List.

Illinois

• Attorney General Kwame Raoul issued a consumer alert to residents considering GLP-1 drugs for weight loss. The alert warns that many med spas, wellness centers, online retailers and social media sellers are advertising brand name medications, but often they are actually selling off-brand compounded drugs. These compounded drugs are not reviewed for safety and could pose serious health risks to consumers.

• Attorney General Raoul announced a $3.5 million settlement with Palmco Power IL, resolving allegations that the company used deceptive tactics to convince customers to switch from their default public utility. The company, operating as Indra Energy, allegedly made false claims to trick consumers into paying higher rates and even enrolled consumers without their permission. The settlement includes injunctive relief prohibiting Indra Energy from using deceptive practices.

• Attorney General Raoul announced a proposed $20 million settlement with Leader Automotive Group and its parent company, AutoCanada. The lawsuit alleges that Leader and AutoCanada defrauded consumers by lying about pricing, add-on products, and certification fees.

Massachusetts

• Attorney General Andrea Joy Campbell announced a $2 million settlement with SaVida Health, P.C., resolving allegations that the physician group submitted false claims to state health agencies. SaVida must also pay for and implement a three-year independent compliance monitoring program.

Michigan

• Attorney General Dana Nessel re-issued a consumer alert on drop-shipping. The alert warns consumers to do careful research before making purchases online—while drop-shipping is not illegal, many drop-shipping schemes entail higher risks of fraud.

• Attorney General Nessel re-issued a consumer alert on gift card scams. Gift card scams are a common form of fraud in which a victim is convinced to purchase a gift card for someone posing as a government agency, company, or friend or family member. Once the gift card number and PIN are given to the scammer, funds are generally not recoverable.

• Attorney General Nessel re-issued a consumer alert on holiday payment apps and scams. The alert warns consumers to exercise caution before sharing personal information and to treat P2P payment platforms like cash.

•  Attorney General Nessel announced a settlement with Keeler Brass Company, which requires the company to investigate and address possible PFAS and TCE contamination at four of their former locations.

New York

• Attorney General Letitia James announced a $4.4 million settlement with Card Compliant LLC. The settlement resolves allegations that Card Compliant violated the New York False Claims Act by helping retailer H&M keep millions of dollars in unused gift card funds, and that the company provided false statements to the New York Comptroller’s office regarding the unused funds.

• Attorney General James secured a $500,000 settlement from Noblr, an auto insurance company, for a data breach involving the personal information of more than 80,000 New Yorkers. An attack on Noblr’s auto-quoting tool exposed the personal data before Noblr detected the vulnerability because Noblr was not monitoring its site traffic in real time. As part of the settlement, Noblr must improve its data security and maintain better systems for detecting suspicious activity.

Oregon

• Attorney General Ellen Rosenblum issued guidance on AI for Oregon businesses. The guidance explains how existing consumer protection, data privacy, and anti-discrimination laws apply to AI models. While focused on the risks of AI technology, the guidance also expresses the potential benefits of AI to Oregon’s economy.

Pennsylvania

• Pennsylvania Attorney General Michelle Henry announced charges against nine individuals related to Broad Street Family Pharmacy who are alleged to have conspired to defraud Medicaid and Medicare. The family-owned pharmacy business is accused of pretending to fill expensive prescriptions and convincing consumers to sell back prescriptions to the pharmacy, all as part of a larger scheme to steal funds from federal benefits programs.

Washington

• Washington Attorney General Bob Ferguson announced that Metropolitan Commercial Bank will pay $10 million to Washington state. The payment is part of an initiative to recover unemployment funds that were misappropriated during the COVID pandemic from banks and fintech companies across the U.S. The initiative has already collected more than $52 million.