Crowell attorneys attended the National Association of Attorneys General (NAAG) Spring Symposium in Chicago, Illinois on April 24-26. As usual, the conference included multiple receptions and other networking events allowing the Crowell attorneys in attendance to engage with multiple attorneys general and a host of their respective staff members.  The team attended a session titled Antitrust 101: Everything you need to know about antitrust laws in the 21st century. Attorney General Letitia James moderated a dynamic Q&A with Professor Stephen Calkins Professor of Law and Director of Graduate Studies at Wayne State University Law School. Below please find some key takeaways:

  • The session began with Professor Calkins providing a high-level overview of the federal antitrust statutes, Section 1 and 2 of the Sherman Act and Section 7 of the Clayton Act. He also explained the seminal cases interpreting these main provisions. Professor Calkins described some of the more complex legal concepts that exist within federal antitrust laws, e.g., the difficulty of determining and proving whether an agreement exists under a Section 1 claim, and the crucial role that market definition plays in Section 2 and Section 7 cases.
  • Professor Calkins did not limit his presentation to federal antitrust issues, he also highlighted the active role state attorneys general (State AGs) are playing in this field. Unsurprisingly, State AGs in California, Minnesota, New York, and Washington are some of the offices bringing the highest number of antitrust cases. The professor highlighted by name the firms that are well-equipped to defend corporations facing antitrust law suits from state enforcers, including Crowell & Moring.
  • Antitrust law is making a very tangible difference in many American’s day-to-day lives. Whether it’s a realtor’s 6% commission split; college athletes’ power over their name, image, and likeness; credit card interchange fees; elite colleges’ financial aid changes, iOS Apple Store practices; or non-competes, the breadth and impact of antitrust cases cannot be overlooked. Importantly, he noted that many of these cases were brought by plaintiffs’ attorneys or State AGs.
  • During the question and answer portion of the session, New York Attorney General Letitia James asked the professor for his impressions on certain antitrust issues related to both federal and state governments. He noted the following:

    • The sheer number of antitrust cases has increased at the federal level (the United States Department of Justice and the Federal Trade Commission) and the state level.

    • Federal agencies stand to gain from the invaluable local experience that State AGs provide through additional resources and a better understanding of local consumers’ and markets. Not only this, but there are often potential antitrust violations that a federal agency may never hear about because the impact is more localized.

    • When determining whether an antitrust violation occurred, there are a few questions to consider: how is the quality of the service or product being affected, is innovation being stifled or nurtured, and how are prices being affected?

    • When considering whether to block or allow mergers, federal agencies don’t have the ability to predict the future and whether one of the parties will go out of business. Although agencies do the best they can, positive results are never guaranteed.  

    • State AGs often face an uphill battle when the company in question has already settled with the federal government on similar issues.

    • Transformative technology, such as generative artificial intelligence, has the power to significantly affect competition. The RealPage lawsuit is a good example of how outsourcing pricing decisions to a centralized entity has the potential to affect competition. 

Crowell attorneys attended the Democratic Attorneys General Association (DAGA) Policy Conference in Seattle, Washington on February 14 & 15. As usual, the conference included multiple receptions and other networking events allowing the four Crowell attorneys in attendance to engage with multiple attorneys general and a host of their respective staff members. The Seattle policy conference included a session titled Safeguarding Vulnerable Populations in a Digital Age.  Attorney General Brian Schwalb, District of Columbia, moderated the panel of three speakers: Attorney General Ellen Rosenblum, Oregon; Jacqueline Beauchere, Global Head of Platform Safety, SNAP; and Dr. Katie Davis, Associate Professor and Director of the Digital Youth Lab at the University of Washington.  Below please find some key takeaways:

  • Oregon Attorney General Ellen Rosenblum began her term as President of the National Association of Attorneys General (NAAG) in January 2024. Each year the NAAG president identifies a Presidential Initiative and General Rosenblum has selected America’s Youth: AGs Looking out for the Next Generation.  One focus of the America’s Youth initiative will be technology and technological effects on children’s lives.
  • Attorneys general are considering a variety of technology-related concerns affecting young people including sexploitation of minors and mental health concerns, such as depression and anxiety.
  • Attorneys general offices have authority to enforce the Children’s Online Privacy Protection Rule (COPPA). Many attorneys general engaged with the FTC’s most recent request for public comment on proposed revisions to COPPA and submitted comments in early 2024 based on their experiences and findings related to COPPA enforcement. A key concern for attorneys general is COPPA’s age restriction, in that COPPA does not apply to children over the age of thirteen.
  • Beyond COPPA, each state has unfair or deceptive acts or practices statutes (UDAP), which may also be utilized to pursue enforcement against companies using deceptive business practices in digital forms. The attorneys general specifically called out enforcement opportunities against social media companies. 
  • Some states have additional laws to address businesses’ technological practices. For example, Oregon has Oregon Student Information Protection Act to address educational technology that collects student information and limits student data collection to education purposes (as opposed to the sale of data for advertising purposes).
  • Social media industry panelist, Jacqueline Beauchere, asserted that companies are unable to control all outcomes for children and thus parent involvement is key. Some social media platforms offer parental controls, special security features, and other involvement options, such as Snapchat’s ‘family center.’ But, these security features are not consistent across platforms and the social media industry regularly experiences market entrants who employ varying levels of safeguards and security policies. 
  • Attorneys general indicated a desire to partner with willing technological companies, similar to partnerships between technological companies and social science researchers. For example, Meta partnered with Center for Open Science to provide anonymous data to researchers. The panel also discussed that the United Kingdom has compelled companies to produce data, in some instances, for investigations and social science research. 
  • The social media business model utilizes advertising data that is fueled by engagement, with minimal concern for user well-being. Therefore, a key concern for attorneys general is to craft injunctive remedies that limit potentially addictive or biased algorithms and lack of safeguards. The panelists discussed formulating models designed to encourage well-being and simple mutual connection. 
  • Attorneys general also want social media platforms to have ‘opt-in’ policies for minors as opposed to ‘opt-out’ policies, which they believe will create an additional safeguard. A key piece of security information is who children are connecting with through social media applications, as connections with unknown or anonymous individuals on social media applications is a primary risk factor for young people. Social media companies are criticized for a focus on features and metrics that are designed to create peer competition, which the critics believe can only lead to negative stigma and poor mental health outcomes for children who use the platforms. 
  • Children are not the only population vulnerable to deceptive technological businesses.  Attorneys general also are focused on scams facilitated through social media companies that are designed to deceive elderly and vulnerable citizens. 

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

Multistate

  • A bipartisan coalition of 21 state attorneys general sent a letter urging congressional leaders to take action on hemp products that became legal through the 2018 Farm Bill. The letter encourages federal lawmakers to amend the definition of hemp and to clarify that states can take their own measures to regulate the plant and its derivative products.
  • A multistate coalition of 16 state attorneys general filed an antitrust lawsuit against Apple Inc. in the U.S. District Court for the District of New Jersey, alleging that Apple is monopolizing the market for smartphones, stifling innovation and development of apps and related technology in violation of Section 2 of the Sherman Act as well as New Jersey and Wisconsin’s Antitrust Acts.

California

  • California Attorney General Rob Bonta publicized a settlement with Mariner Health Care, Inc., the operator of 19 skilled nursing facilities in California, resolving allegations that Mariner  jeopardized residents’ health and well-being, and misled prospective residents and their families about the quality of its facilities in violation of federal and state laws and regulations applicable to skilled nursing facilitates. The settlement, linked to the Bankruptcy Reorganization Plan of two Mariner entities in Chapter 11, will provide injunctive relief for a minimum of five years, require monitoring by an independent monitor for a minimum of three years, payment of $2.25 million in costs, and imposes civil penalties of $15.5 million dollars for any future violations of the injunction or law.

Connecticut

  • Connecticut Attorney General William Tong announced that Florida-based ghost gun dealer Steel Fox Firearms will dissolve its business operations as part of a settlement with the State, resolving allegations that its sale of illegal, untraceable ghost gun parts in Connecticut violated the Connecticut Unfair Trade Practices Act and General Statutes § 42-110a, et seq., and particularly General Statutes § 42-110b. Connecticut banned the sale and receipt of ghost gun components in 2019. According to the Office of the Attorney General, Steel Fox was well aware of the law, and shipped illegal gun parts to Connecticut anyway.

Massachusetts

  • The Massachusetts Attorney General’s Office filed a motion for preliminary injunction against Champion Funding, Inc., Champion Funding LLC, Judgment Acquisitions Unlimited, Inc., Andrew Metcalf, d/b/a Judgment Acquisitions Unlimited, Inc., and Andrew Metcalf, individually, to halt harmful debt collection practices. According to the complaint, the defendants violated various state laws regulating trade including, G.L. c. 93A, Sec.2(a); G.L. c. 93, Sec. 24A; and G.L. c. 93, Sec. 49. The AG’s office intends to immediately stop the defendants from engaging in aggressive and potentially unlawful debt collection tactics, such as seizing consumers’ cars unlawfully, and to ensure compliance with debt collection laws.

Missouri

  • Missouri Attorney General Andrew Bailey announced that his office filed suit in Boone County against Anthony Walters for allegedly defrauding a consumer in connection with his business Anthony Walters Carpentry, LLC when he failed to provide promised home renovation services. According to the complaint, Anthony Walters Carpentry violated the Missouri Merchandising Practices Act, § 407.010, et seq. AG Bailey’s office is pursuing full restitution for the consumer who suffered losses, seeking injunctive relief to prevent future instances of consumer fraud, and asking for civil penalties against Anthony Walters. These include financial penalties for violating consumer protection laws.

Oregon

  • Oregon Attorney General Ellen Rosenblum publicized the award of $9.4 million in civil damages in her office’s lawsuit against Talmage LLC and its founder, Edward Shugrue III. The two-year civil investigation filed in Multnomah County Circuit Court which resulted in finding that Talmage engaged in misconduct against the Oregon Public Employees Retirement Fund in violation of the Oregon Antitrust Laws.

Utah

  • After a lawsuit brought by the Federal Trade Commission and the Utah Attorney General’s Office against Response Marketing Group, LLC in November 2019, over $10 million in refunds will be issued to consumers who allegedly paid for a deceptive real estate investment training scheme that falsely promised significant profits through “flipping” houses in violation of federal and state consumer fraud statutes and telemarketing statutes.  

Washington

  • The Washington’s Attorney General’s Office won a trial against debt collection agency Optimum Outcomes. Optimum is the last remaining defendant in Attorney General Ferguson’s charity care lawsuit against Providence Health & Services. King County Superior Court Judge Sean O’Donnell ruled that Optimum violated the state Consumer Protection Act by violating the medical debt collection rights of Washington patients more than 82,000 times. Judge O’Donnell ordered Optimum to pay $10 per violation for a total civil penalty of $827,290, which will be paid into the State’s general fund.

District of Columbia

  • Washington, D.C. Attorney General Brian Schwalb provided testimony in a public hearing in support of B25-0609, the Protecting Affordable Loans Amendment Act of 2023 (PALs Act). General Schwalb explained that this Act is necessary to stop predatory lenders who charge high-interest rates, way above the District’s approved limit of 24%. These lenders use loopholes through partnerships with banks in states who do not have these limits, a tactic called “rent-a-bank” schemes. General Schwalb shared that his office had been successful in fighting these schemes, but the PALs Act would make it easier to protect consumers.

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

Multistate

  • A coalition of 41 attorneys general called on Meta Platforms, Inc. to address the risk of scammers taking over user accounts on Facebook and Instagram. The letter sent by the attorneys general outlined a series of steps that Meta could take to increase efforts in mitigating account takeovers.
  • A coalition of nine attorneys general and the Federal Trade Commission filed suit against the Cancer Recovery Foundation International, Inc. (CRFI), also known as the Women’s Cancer Fund, and its founder and president, Gregory Anderson for allegedly knowing that funds raised for cancer patients were not actually helping women with cancer or their families. Instead, the funds were used to pay professional fundraisers and Anderson’s salary. A civil investigation revealed that CRFI allegedly directed significantly less funds to cancer patients and their families than actually donated. Between 2017 and 2022, approximately $18.25 million was donated to the charity and only $194,809 went to women with cancer. 
  • A coalition of 16 attorneys general demanded answers from Wells Fargo concerning the company’s debanking policies. Wells Fargo announced that the company will close the accounts of organizations or individuals it views as a risk. The attorneys general indicated that the company’s debanking policies carry out the Biden administrations agenda on gun control and environmental policy. The attorneys general believe that these debanking policies discriminate against certain businesses and consumers.

Arizona

  • Attorney General Mayes filed a lawsuit against Oh La La by Posh, LLC, a quinceañera dress store, and its owner, Renne Cuellar. The lawsuit alleges that Oh La La and Cuellar participated in deceptive and unfair practices in violation of the Arizona Consumer Fraud Act by accepting deposits for orders totaling thousands of dollars before closing the store and failing to give customers the order or a refund.             

Connecticut

  • Attorney General Tong called on the Public Utilities Regulatory Authority to reject Connecticut Water Company’s (CT Water) application to raise water utility rates from 1.5 cents per gallon to 1.8 cents. This would be about a $21.8 million rate increase. The Attorney General indicated that water utility rates should be no higher than necessary and identified areas of accounting, revenue, and expenses where shareholders could cover the cost instead of ratepayers.

Michigan

  • Attorney General Nessel secured a consent judgment to resolve a lawsuit against Rockford business owner David Foster, Choice Tree Service, LLC, and Storm Support Emergency Tree Removal, LLC for illegal business practices including charging excessive prices and intentionally misleading customers about their rights, agreements they were signing, and liabilities outside of insurance coverage. Pursuant to the settlement, Foster and the two LLCs will pay $13,500 to the Department for its enforcement efforts, a portion of which will be distributed among three consumers who assisted in the suit.

Minnesota

  • Attorney General Ellison announced a lawsuit against four solar-lending companies for violating state laws prohibiting deceptive trade practices, deceptive lending, and illegally high rates of interest. The lawsuit claims that GoodLeap, Sunlight Financial, Solar Mosaic, and Dividend Solar Finance deceived consumers to take out loans according to the companies’ false promise of low interest and collected approximately $35 million in hidden fees.

Missouri

  • Attorney General Bailey filed charges against David V. Lott for defrauding investors through his business, Missouri Holding Group, Inc. Lott allegedly falsely promised high investment yields with quick return. Instead he used client funds for his other business ventures and personal expenses causing victims to lose $1,120,000.

New Jersey

  • Attorney General Platkin announced that an Essex County vascular surgeon, Marc Watson, agreed to permanently cease to engage in clinical practice of medicine and surgery in the state to resolve allegations of indiscriminately prescribing high volumes of controlled dangerous substances (CDS) to patients with addictions. Watson allegedly engaged in gross negligence and professional misconduct by prescribing high volumes of controlled dangerous substances (CDS), such as benzodiazepines, stimulants, and narcotics, without sufficient medical justification. Additionally, Watson conducted inadequate physical examinations, maintained insufficient record-keeping, and failed to properly monitor patients.

New York

  • Attorney General James announced Shake a Paw, a pet store, will pay an estimate of $300,000 to about 190 customers for illegally and knowingly selling sick puppies. Shake a Paw misled customers by advertising about selling the “healthiest” and “best of the best puppies” from the “most trusted breeders.” In fact, Shake a Paw kept dogs in inhumane conditions and sold sick puppies which caused customers to spend thousands of dollars on medical bills after the puppies fell sick.

Pennsylvania

  • Attorney General Henry resolved pending litigation against Great Conventions LLC, and its owner, Christopher Wertz, with the defendants agreeing to pay $20,000 in restitution to be distributed to individuals who purchased tickets to Great Philadelphia ComicCon in March 2021 and filed a complaint with the attorney general’s office. Attorney General Henry alleged that Great Conventions violated the Unfair Trade Practices Act and Massachusetts’ Consumer Protection Act by failing to reschedule the event or refund consumers.
  • Attorney General Henry reached a settlement with Vantage Travel Services, Inc. that permanently prevents bars the company from engaging in tour operations in the state. Vantage and its owner, Henry Lewis, allegedly engaged in unfair and deceptive business practices by promising risk-free traveling services to consumers who never received their trip or a refund. The settlement resolves only the pending litigation against Vantage, not Lewis. 

What You Need to Know

Key takeaway #1: To reduce risk of litigation and regulatory exposure, companies should review, verify, and substantiate any green claims, especially claims regarding generalized corporate environmental stewardship and net zero commitments.

Last week, New York Attorney General Letitia James filed a lawsuit against JBS USA Food Company and JBS USA Food Company Holdings (JBS USA), which together make up the American subsidiary of the world’s largest beef product producer, JBS S.A. The suit alleges that JBS USA engaged in “greenwashing,” misleading consumers about its environmental impact goals. The suit is one amongst many state attorney general lawsuits related to greenwashing or ESG claims, which have spanned across the aisle and been initiated by both Democratic and Republican attorneys general.

JBS USA claimed it would achieve “net zero” greenhouse gas emissions by 2040, despite alleged contrary documentation related to expansion efforts. JBS USA has made several public statements about its commitment to achieving net zero operations, including a full-page advertisement in the New York Times that highlighted the net zero claim in 2021. And, in September 2023, JBS USA’s CEO announced that the company “pledged to be net zero in 2040” at a New York City Climate Week event. As of March 2024, the company’s website maintains this claim on its home page. Although statements on the company’s website or features in newspapers are more immediately discernable as advertisements, public statements by a corporate official are also considered advertisements that require substantiation.

JBS USA has made several other specific claims about the sustainability of its business operations that Attorney General James alleges are greenwashing, including:

  • “Agriculture can be part of the climate solution. Bacon, chicken wings, and steak with net zero emissions. It’s possible.”
  • “We will cut our own emissions by 30% in 2030 and eliminate Amazon deforestation from our supply chain within five years.”
  • “JBS will achieve net zero greenhouse gas emissions, reducing its direct and indirect emissions and offsetting all residual emissions.”

In June 2023, JBS USA received a warning from BBB National Programs’ National Advertising Review Board (NARB), the appellate advertising body related to the National Advertising Division (NAD). Both the NAD and NARB function as the advertising industry’s self-regulatory bodies. The NARB agreed with a prior NAD decision, determining that JBS USA’s evidence did not support its net zero claims and recommended that JBS USA stop making these claims.

New York Attorney General James is seeking injunctive relief that would require JBS USA to cease its “Net Zero by 2040” advertising and submit to a third-party compliance audit, as well as disgorgement and civil penalties of at least $5,000 per violation (the number of violations must be determined at trial).

New York Attorney General James asserts that JBS USA misled consumers with these net zero claims as a means to remain competitive within the food industry, and that in fact, JBS USA had not calculated the company’s total greenhouse gas emissions, and thus had no way to assess whether it could successfully reduce its emissions to net zero by 2040. The lawsuit alleges that JBS USA “could not feasibly meet its pledge because there are no proven agricultural practices to reduce its greenhouse gas emissions to net zero at the JBS Group’s current scale, and offsetting those emissions would be a costly undertaking of an unprecedented degree.”

Accelerating public enforcement of greenwashing through suits based on state unfair trade practices statutes should caution companies to verify and substantiate the claims they wish to make about their environmental impacts before incorporating them in advertising. Not only should companies ensure that all green claims are substantiated, but overstated, generalized, broad, or vague environmental benefit claims should be avoided entirely. And, companies should avoid omitting pertinent information related to any environmental claims. But, customers appreciate and reward commitments to environmental stewardship and sustainability, so companies with proper substantiation should continue to make – and tout – these commitments.

The New York Attorney General’s action adds to a growing list of greenwashing enforcement efforts arising across international jurisdictions. These actions reflect broadening efforts by regulators to combat deceptive advertising practices by private businesses attempting to capitalize on consumers’ environmental interests. American adults say they are willing to pay more for sustainable products, and recent studies have shown that people are willing to change their habits to switch to more environmentally friendly products.

Regulatory enforcement related to greenwashing claims will remain a top enforcement priority throughout 2024. Although the various attorneys general may have different approaches or underlying goals, the state enforcers will continue to scrutinize corporate green claims, especially those claims that are traditionally viewed as more difficult to substantiate such as net zero claims. Beyond the state attorneys general, the Federal Trade Commission is working to finalize its proposed updates to the Guides for the Use of Environmental Marketing Claims in 2023 (the Green Guides). The updated Green Guides should provide companies with further examples and advice related to green marketing, but will also provide enforcers with additional tools for suits against greenwashing.

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

Multistate

  • A coalition of 19 state attorneys general filed an amicus brief in support of Connecticut’s restrictions on large-capacity magazines and assault weapons in National Association for Gun Rights v. Lamont. The case is pending before the Second Circuit Court of Appeals.
  • A coalition of 27 state attorneys general sent a letter to Meta demanding that Instagram stop monetizing child exploitation content. The letter criticizes the platform for permitting parent-managed minor accounts to profit by providing “pin-up style photos of children” to adult subscribers, and for promoting subscriptions to these child-modeling accounts.
  • A coalition of 16 state attorneys general sent a letter to BlackRock fund directors to express concern over potential conflicts of interest and the company’s Environmental, Social, and Governance (ESG) investments. The letter requested answers to a series of questions in the wake of BlackRock’s recent announcement that it would substantially scale back involvement in Climate Action 100+.

Arizona

  • Arizona Attorney General Mayes announced a lawsuit against RealPage, Inc. and nine major residential apartment landlords operating in Arizona for conspiring to illegally raise rents for hundreds of thousands of Arizona renters in the Phoenix and Tucson metro areas. The complaint alleges that, in the last two years, residential rents in Phoenix and Tucson have risen by at least 30% in large part because of this conspiracy that stifled fair competition and essentially established a rental monopoly in the state’s two largest metro areas.

California

  • California Attorney General Bonta announced a settlement with two separate local Bakersfield landlords and their property management company, Clemmer & Company, for multiple violations of the Tenant Protection Act (TPA) and for violation of the Fair Employment and Housing Act. The owners and property manager will collectively pay restitution and penalties totaling $213,000 and must comply with strong injunctive terms. 

Connecticut

  • Attorney General Tong announced the State has secured a $5 million prejudgment remedy against Stone Academy, a defunct for-profit nursing school. Attorney General Tong sued Stone Academy, Paier College of Art, and their owner Joseph Bierbaum last year following the abrupt closure of the school, alleging numerous violations of the Connecticut Unfair Trade Practices Act. 

Michigan

  • Michigan Attorney General Nessel announced a lawsuit against Deborah Brenner, the owner and operator of an unpermitted Allegan County concentrated animal feeding operation (CAFO), J&D Brenner Farms. The suit alleges unlawful, injurious wastewater discharges in violation of the Natural Resources and Environmental Protection Act (NREPA). This litigation follows years of enforcement efforts dating back to 2016 that have not resulted in meaningful reductions in the ongoing watershed pollution by J&D Brenner Farms.
  • Michigan Attorney General Nessel announced that the Michigan Public Service Commission issued a final order in Consumers Energy Company’s most recent rate case, approving an electric rate that is less than half of what the company requested. Attorney General Nessel had intervened in the case on behalf of consumers, arguing the requested increase was too great.

Minnesota

  • Minnesota Attorney General Ellison announced he has reached a five-year oversight agreement with Wisconsin-based Aspirus Health and St. Luke’s Hospital of Duluth, requiring Aspirus to provide to the Attorney General annual reports on the commitments the systems have made in their merger. These reports will help the Attorney General’s Office determine whether the transaction continues to be compliant with charities and antitrust laws and in the public interest.

New York

  • New York Attorney General James announced a lawsuit against JBS USA Food Company and JBS USA Food Company Holdings (JBS USA) for misleading the public about its environmental impact. JBS USA has claimed that it will achieve net zero greenhouse gas emissions by 2040, despite documented plans to increase production, and therefore increase its carbon footprint. JBS USA is the American subsidiary of the world’s largest producer of beef products.
  • New York Attorney General James announced a settlement for more than $650,000 with debt collection law firm, Tromberg, Morris, & Poulin, LLC (TMP), and its subsidiary, Stephen Einstein & Associates, P.C. (SEA). TMP and SEA regularly sued tenants on behalf of landlords in New York City Civil Court on issues that were already resolved in Housing Court. TMP also illegally continued to pursue consumers for debts that were already paid or partially paid, sometimes garnishing wages for judgments that were completed. TMP must pay $595,600 in restitution to more than 4,000 affected New Yorkers, plus $60,000 in penalties, and must stop its frivolous and predatory behavior.
  • New York Attorney General James announced a lawsuit against a major operation of over 30 companies and individuals for exploiting small businesses through fraudulent loans at inflated interest rates disguised as merchant cash advances. The suit names companies and individuals who negotiated and serviced the illegal loans. The state seeks at least $1.4 billion in interest and fraudulent fees collected from small businesses, and a court order for the companies to stop their illegal activities.

North Carolina

  • North Carolina Attorney General Stein announced a lawsuit against Canary General Contracting and Design for deceiving Charlotte homeowners and an investigation into real estate software company RealPage over concerns about anticompetitive conduct to raise the cost of rental housing. Attorney General Stein’s investigation is looking into whether RealPage uses non-public and sensitive competitive data as part of its modeling in violation of antitrust law.

Ohio

  • Ohio Attorney General Yost announced a lawsuit against a used-car dealership and its owner for alleged violations of state consumer protection laws, including failure to deliver vehicle titles to dozens of customers. Defendants are accused of violating Ohio’s Consumer Sales Practices Act and Certificate of Motor Vehicle Title Act.
  • Ohio Attorney General Yost announced six consumer-protection lawsuits against contractor businesses accused of violating the Ohio Consumer Sales Practices Act by deceiving Ohioans who wanted to make home improvements. The state seeks reimbursement to consumers, civil penalties, and court costs. The state also requests that all defendants be prohibited from engaging in any consumer transactions in Ohio until their judgments are paid.

Washington

  • Washington Attorney General Ferguson announced that the Legislature had approved his proposal to form an Artificial Intelligence Task Force in the Attorney General’s Office. The task force will convene technology experts, industry representatives, labor organizations, civil liberty groups and other stakeholders to discuss AI benefits and risks and make recommendations to the Legislature.
  • Washington Attorney General Ferguson announced the passage of House Bill 2072, increasing the maximum civil penalty for price-fixing, collusion, and other antitrust violations to three times the unlawful gains or loss avoided. Attorney General Ferguson had requested the bill while litigating an ongoing lawsuit targeting an alleged price-fixing conspiracy in the broiler chicken industry.

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

Multistate

  • The National Association of Attorneys General, a bipartisan coalition of 39 state attorneys general, sent a letter to Congressional leaders urging the U.S. Senate and House of Representatives to take decisive action to reform the way Pharmacy Benefit Mangers (PBMs) conduct businesses and bring more “transparency” to their work. The coalition highlighted three bills introduced to address potential abuses in the PBM industry: the DRUG Act (S1542/HR6283), Protecting Patients Against PBM Abuses Act (HR2880), and the Lower Costs, More Transparency Act (HR5378).
  • The Federal Trade Commission and nine state attorneys general filed a lawsuit to prevent The Kroger Company (Kroger) from acquiring Albertsons Companies, Inc. Washington, D.C. Attorney General Schwalb noted that eliminating Albertsons as a competitor would reduce the shopping choices for District residents. Arizona Attorney General Mayes emphasized how the merger would affect rural and urban communities alike.
  • Eighteen attorneys general wrote an amicus brief urging the Colorado Supreme Court to affirm a lower court’s ruling that a Colorado baker violated the state’s antidiscrimination law when he refused to bake a cake for a transgender customer. In Scardina v. Masterpiece Cakeshop, the Colorado Court of Appeals affirmed the lower court’s decision that Masterpiece Cakeshop’s refusal to bake a cake for plaintiff, after learning it was to celebrate her transition, violated Colorado’s public accommodations laws. Colorado’s Supreme Court agreed to hear the case in October 2023.

New York

  • Attorney General James wrote to the U.S. Food and Drug Administration urging that they take action to address the potential dangers of asthma and allergy drug montekulast, also known by the brand name Singulair. Multiple studies on Singulair, which has been on the market for 25 years, has shown a correlation between its use and the development of neuropsychiatric disorders.
  • Attorney General James filed a lawsuit against JBS USA Food Company and JBS USA Food Company Holdings (JBS USA) for misleading the public about its environmental impact. JBS USA claimed it will achieve net zero greenhouse gas emissions by 2040. However, it has documented plans to increase production and, therefore, increase its carbon footprint. The lawsuit accuses JBS USA of greenwashing, exploiting consumer trust, and endangering the planet by making false sustainability claims. AG James seeks to halt these deceptive practices, demand financial penalties, and ensure truthful advertising.

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

Multistate

  • A coalition of 20 attorneys general called on the U.S. Food and Drug Administration (FDA) to take action to protect babies and young children nationwide from lead and toxic metals in baby food. The coalition urges the FDA to issue specific guidance to the baby food industry that would require testing of all finished food products for toxic materials based on recent findings of lead poisoning in recalled cinnamon applesauce pouches sold in stores throughout the country.
  • A coalition of 39 attorneys general urged Congress to pass legislation that will hold Pharmacy Benefit Managers accountable for unfair and deceptive practices that drive up the cost of prescription drugs. Specifically, the letter argues for the increased regulation of certain business practices to ensure greater transparency and accountability while also keeping drug prices reasonable.
  • A coalition of 19 State Attorneys General, led by Pennsylvania Attorney General Michelle Henry, submitted a comment letter in support of the Federal Trade Commission’s proposed Rule on Unfair or Deceptive Fees (also known as “junk fees”). In the letter, the Attorneys General highlight their enforcement efforts to protect consumers from unfair or deceptive fee practices.

California

  • Attorney General Bonta announced a $5 million settlement with Quest Diagnostics for illegal disposal of hazardous waste, medical waste, and protected patient information at its facilities. The payment includes penalties, costs, and supplemental environmental projects. The settlement, which was reached following a state-wide audit and over 30 inspections of the company’s disposal procedures, also requires that Quest Diagnostics make significant changes to its operations and practices in its California facilities.
  • Attorney General Bonta announced a decision by the California Court of Appeals affirming a lower court’s decision that found in the state’s favor in its lawsuit against Ashford University, an online, for-profit college, and its parent company Zovio, Inc. (formerly Bridgepoint Education). The decision upheld a judgment against the university for violating California’s unfair competition and false advertising laws by giving students false or misleading information about career outcomes, cost and financial aid, pace of degree programs, and transfer credits. The university must pay more than $21 million in civil penalties.
  • Attorney General Bonta filed an amicus brief in Capito v. San Jose Healthcare System, LP, a case alleging unfair and deceptive emergency room billing practices and surprise fees charged to patients. The case alleges that the hospital violated the Unfair Competition Law (UCL) and Consumers Legal Remedies Act (CLRA) with the practice of adding an evaluation and management services fee to bills without disclosing the amount of the fee or when it would be charged.
  • Attorney General Bonta announced the introduction of a bill that would ensure the implementation of a flavored tobacco ban, which aims to combat the illegal sale and targeting of flavored tobacco products to youth. The bill includes new enforcement efforts from the Attorney General’s office and the establishment of a list of products that are allowed to be sold in California.

Colorado

  • Attorney General Weiser announced a settlement with Prosper Marketplace, Inc., a lending company, which extends a 2019 agreement to maintain Prosper’s loan lending at or below Colorado’s rate caps in compliance with House Bill 23-1229. The state’s 2019 investigation of Prosper alleges that it partnered with WebBank and made to loans to Coloradans at rates that exceeded state law.  Prosper will pay penalties totaling $10,000 to the Colorado Department of Law, which will use the funds for restitution, consumer or creditor education, consumer credit or consumer protection enforcement, and other efforts to advance the public welfare.
  • Attorney General Weiser filed a lawsuit to block a proposed merger between supermarket chains Kroger and Albertsons. According to the complaint, the merger would eliminate head-to-head competition between Kroger and Albertsons and consolidate an already heavily concentrated market, which the AG’s office argues would negatively affect Colorado shoppers, workers, and suppliers. The lawsuit also challenges an alleged “no-poach” agreement between the two companies during a 2022 strike. The lawsuit seeks monetary and injunctive relief, including civil penalties of $1,000,000 from both Kroger and Albertsons. The AG’s office also seeks to permanently block the merger and prohibit the defendants from entering any agreements to not hire each other’s employees or not to solicit each other’s customers.

Kentucky

  • Attorney General Coleman wrote to President Biden urging the administration to abandon its proposed pause on liquified natural gas exports, arguing that such a move would encourage overseas adversaries such as Russia, Iran, and China and undercut American energy independence.

Minnesota

  • Attorney General Ellison announced a settlement with solar garden operators FastSun Solar, LLC, Cypress Creek Renewables, LLC, Generate Capital, Inc., and Global Atlantic Financial Group Limited, following an investigation that revealed customers had been charged unreasonable early-termination fees. The settlement requires the operators to pay $85,000 in restitution.

New York

  • Attorney General James announced that the Trump Organization.  following an investigation that revealed customers had been charged unreasonable early-termination fees, was ordered to pay $465 million in damages for engaging in financial fraud and illegal conduct to inflate the company’s net worth.
  • Attorney General James, in partnership with the New York State Education Department  Commissioner Betty A. Rosa, announced a settlement with College Board, resolving allegations that the company collected students’ personal information when they took standardized tests such as PSAT, SAT, and AP exams. The investigation also revealed that in 2019, College Board also improperly licensed students’ information to colleges, scholarship programs and other customers, for more than 237,000 students in the state. According to the settlement, College Board must pay $750,000 in civil penalties, disgorgement, and costs to the state. College Board is prohibited from using the New York student data it collects or receives from any contracts with a New York educational agency for any marketing or commercial purposes.

Ohio

  • Attorney General Yost announced a settlement with Family Dollar following an investigation into price discrepancies, namely that the retailer was displaying lower prices on store shelves than were charged at registers. As part of the settlement, Family Dollar acknowledged violations of the Ohio Consumer Protection Sales Act, agreed to pay $1 million in civil penalties, and, pledged to implement changes to ensure accurate pricing by hiring adequate staff.

Utah

  • Attorney General Reyes issued a press release regarding his efforts to address robocalls, now that the FCC has outlawed AI-generated voice calls.

Vermont

  • Attorney General Clark announced that the U.S. District Court in Burlington granted the Attorney General’s motion to remand the State’s consumer protection case against Exxon and other fossil fuel producers regarding alleged misrepresentations and greenwashing related to fossil fuel products to state court.

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

Multistate

  • A multistate coalition of 13 attorneys general sent a letter to Department of Treasury Secretary Yellen opposing the allegedly unconstitutional actions of the Department of Treasury to initiate a Direct File program for U.S. taxpayers and demanding President Biden’s administration to stop attempts to provide the Internal Revenue Service (IRS) authority not granted by Congress. The letter opposes the IRS’s Direct File pilot program because the agency lacks authority to create such a program and alleges that the program will have negative consequences for low income filers and small businesses. Congress commissioned a study to investigate the feasibility of a direct file program, but the coalition of attorneys general found the study to be flawed.
  • A bipartisan multistate coalition of all states, territories, and districts, led by Colorado Attorney General Weiser, announced a national settlement with global marketing and public relations firm Publicis Health for $350 million for its role in the opioid epidemic. Publicis Health was a marketing firm for Purdue Pharma for more than a decade and assisted with targeted advertising to healthcare professionals including advertising of opioids. Publicis Health created advertising materials for Purdue Pharma to use with healthcare professionals that allegedly influenced those professionals to increasingly prescribe opioids. As part of the multistate resolution, Publicis Health recognized the harm it caused, will disclose thousands of internal documents on a public website, and will no longer conduct any marketing for opioid-related products.
  • Tennessee Attorney General Skrmetti and Virginia Attorney General Miyares filed a lawsuit against the National Collegiate Athletic Association (NCAA) for federal antitrust violations based on anticompetitive restrictions and practices. The lawsuit alleges the NCAA employs anticompetitive restrictions on current and future student-athletes’ ability to benefit from or meaningfully negotiate their name, image, and likeness (NIL) during the recruiting and enrollment process, which would allegedly violate the Sherman Act. The lawsuit highlights the Supreme Court’s ruling that the NCAA violated antitrust laws by imposing unreasonable restraints on the compensation of student-athletes and alleges the NCAA has now adopted a vague series of guidelines limiting student-athletes’ ability to receive fair compensation.
  • A multistate coalition of 22 attorneys general sent a letter to President Biden and the secretary of the U.S. Department of Energy to end the administration’s pause on exports of liquefied natural gas. On January 26, 2024, President Biden announced a pause on new approvals of liquefied natural gas exports. The coalition characterizes the Biden Administration as attacking the U.S.’s energy industry and highlighted that the U.S. is a world leader in natural gas production, which supports more than four million jobs.
  • A bipartisan multistate coalition of 51 attorneys general issued a warning letter regarding illegal election-based robocalls using artificial intelligence after New Hampshire Attorney General Formella announced that the Attorney General’s Election Law Unit identified the source of January 21, 2024 robocalls received by many New Hampshire residents, which appeared to have an AI-generated voice of President Biden encouraging New Hampshire residents to not vote on January 23, 2024. The source of the robocalls was Texas-based Life Corporation and Walter Monk. The Anti-Robocall Multistate Litigation Task Force, a bipartisan task force, and the Federal Communications Commission Enforcement Bureau assisted with the investigation.
  • Multiple states’ Offices of Attorney General released alerts or notices regarding identity theft awareness in the first week of February for Identity Theft Awareness Week. For example, Michigan Attorney General Nessel highlighted a recent study by U.S. News and World Report that noted nearly three-fourths of respondents had experienced at least one case of identity theft. The notices provided consumers with recommendations to stay aware of identity theft attempts.

California

  • California Attorney General Bonta filed a lawsuit against Southern California-based construction subcontractor West Coast Drywall & Company, Inc., d/b/a West Coast Drywall & Paint, for alleged ongoing wage and hour violations. The lawsuit alleges that the company’s piece-rate compensation system failed to pay employees wages owed, overtime wages, provide accurate wage statements, reimburse work-related purchases, or provided required breaks. West Coast Drywall & Paint advertises as Southern California’s largest drywall and painting subcontractor.  
  • California Attorney General Bonta announced conditional approval of the sale of Twilight Haven to Bayshire Central Valley, LLC. In June 2023, Twilight Haven filed for bankruptcy after closing its skilled nursing facility, which caused a disruption of services and dislocation of residents. The sale will allow the skilled nursing facility to reopen and provide healthcare services. Under California law, any transaction involving the sale or transfer of control of a health facility owned by a nonprofit must receive Attorney General approval.
  • California Attorney General Bonta issued a consumer alert following California Governor Newsom’s declaration of a state of emergency for several counties in Southern California due to a series of winter storms with damaging winds and heavy snowfall. Attorney General Bonta reminded Californians that price gouging during a state of emergency is illegal under Penal Code Section 396.

Indiana

  • Indiana Attorney General Rokita’s Homeowner Protection Team announced a settlement with Willow Brook Gardens Apartments, Wellington Apartments, and Briergate Apartments in Indianapolis based on alleged poor treatment of tenants. The apartment building owners agreed to a payment of $70,000 in rent credits to current tenants, a payment of $20,000 in additional restitution for other complainants, the dismissal and expungement of over 150 prior eviction proceedings, and a two-year compliance monitoring period. Further litigation is pending against additional apartment defendants.

Michigan

  • Michigan Attorney General Nessel announced that the Michigan Supreme Court ordered oral arguments be scheduled in Attorney General Nessel’s appeal of an order preventing the Michigan Office of the Attorney General from investigation of Eli Lilly’s insulin pricing practices. Two prior decisions by the Michigan Supreme Court, Smith v. Globe Life Ins. Co. and Liss v. Lewiston-Richards, Inc., were used by Eli Lilly to assert that the Michigan Consumer Protection Act is inapplicable to the sale of insulin. The Michigan Supreme Court agreed to hear arguments for reversing the prior decisions, which Attorney General Nessel asserts are not supported by a plain reading of Michigan’s Consumer Protection Act. The decisions preclude state investigation of suspected illegal business practices when the target business sells products or services authorized for sale by a law administered by a state or federal agency, irrespective of the underlying allegations of the business practices. This broad interpretation has been used as a shield by corporations from Michigan state scrutiny.

Minnesota

  • Minnesota Attorney General Ellison released a report detailing the effects of social media, artificial intelligence, and other emerging technologies on young people commissioned by the Minnesota Legislature in 2023. Beyond evaluating the impact of technology companies, the report provides multiple recommendations for policymakers to create safer and healthier online environments for young people and discusses consumer protection laws, proposed and enacted, from other jurisdictions.

North Carolina

  • North Carolina Attorney General Stein announced a settlement with First National Bank of Pennsylvania based on allegations that the bank engaged in racially discriminatory redlining when providing home mortgage loans in the Charlotte and Winston-Salem areas. This settlement was agreed upon in coordination with the U.S. Department of Justice’s Civil Rights Division and the U.S. Attorney’s Office for the Middle District of North Carolina. First National Bank entered North Carolina in 2017 and operates 31 bank branches in North Carolina. First National Bank allegedly avoided providing mortgage loans in areas that had majority Black and/or Hispanic residents. Per the settlement, First National Bank will create a $11.75 million loan subsidy fund to increase credit for home mortgage loans for communities of color in North Carolina.

Vermont

  • Vermont Attorney General Clark filed a lawsuit against Codling Brothers Logging and owners, David, Joe, and Paul Codling, for violations of the Vermont Consumer Protection Act. Codling Brothers Logging allegedly engaged in unfair and deceptive business practices with five Vermont landowners by making misleading statements about their services and subsequently taking more logs than agreed and failing to fairly compensate landowners.

Washington

  • Washington Attorney General Ferguson announced a settlement with Providence, one of the largest health care systems, which requires Providence to forgive more than $137 million in medical debt and to refund more than $20 million to patients for overages. Washington state law requires hospitals to provide medical financial assistance, known as charity care, to Washingtonians based on their income level to both insured and uninsured patients. Attorney General Ferguson filed an enforcement action against Providence for deceptive practices with patients regarding medical billing and failure to provide adequate notice of charity care and financial assistance options. The enforcement action alleged that between 2018 and 2023 Providence regularly disregarded its charity care legal obligations under state law.
  • Washington Attorney General Ferguson announced a settlement with Federal Way Discount Guns and its owner, Mohammed Baghai, which requires payment of $3 million for violating Washington’s prohibition on selling high-capacity magazines of over ten rounds of ammunition. A Judge in King County Superior Court ruled that Federal Way Discount Guns violated Washington’s Consumer Protection Act in April 2023 by selling high-capacity magazines. Attorney General Ferguson’s investigation found that Federal Way Discount Guns sold over 3,625 high capacity magazines between July 1, 2022 (the date the law went into effect) and when the complaint was filed half a year later. The settlement resolves the remainder of the case.

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

Multistate

  • A multistate coalition of 26 attorneys general sent a strongly-worded letter to the Federal Communications Commission, asking it to restrict the use of artificial intelligence by telemarketers. Specifically, the coalition seeks to ensure that telemarketers who use AI to produce a human voice to make phone calls must follow the Telephone Consumer Protection Act’s requirements for artificial voices, which includes obtaining prior express written consent.
  • A multistate coalition of 22 attorneys general filed an amicus brief in Texas v. Biden, which defends President Biden’s Executive Order No. 14026, that increases federal contractors’ minimum wage to $15/hour and provides for additional annual increases. The coalition asserts that minimum wage increases provide essential benefits and protect the public welfare.
  • A multistate coalition of 21 attorneys general submitted a comment letter to the White House, asking the Biden administration to implement proposed health regulations that would prohibit the sale of flavored cigars and menthol cigarettes. The coalition argues that these additional measures are vital to public health.

California

  • California’s Attorney General Bonta, Senator Skinner, and Assembly member Wicks introduced two pieces of legislation, the Protecting Youth from Social Media Addiction Act (SB 976) and the California Children’s Data Privacy Act (AB 1949), which seek to protect youth online by limiting social media addiction and protecting data privacy. Specifically, SB 976 allows parents to choose whether users under 18 would receive an algorithmic feed or a chronological one and give parents the option to block social media access and notifications at night and during the school day. AB 1949 extends the California Consumer Privacy Act to protect the data of those under the age of 18.
  • California Attorney General Bonta launched an investigation into whether streaming apps and devices comply with the California Consumer Privacy Act’s opt-out requirements for businesses selling or sharing consumers’ personal information. As part of the investigation, Attorney General Bonta has sent letters to streaming businesses alleging noncompliance with the Act.
  • California Attorney General Bonta filed felony charges against Lamb Fuels, Inc., its owner, and two employees for unlawful treatment and transportation of hazardous waste throughout the state from 2012 to 2021. The waste was allegedly picked up at scrapyards and delivered to gas stations.

District of Columbia

  • Washington, D.C. Attorney General Schwalb announced a settlement with Clean Team Janitorial Service, Inc., resolving allegations of underpaying workers from 2020 to 2023. The settlement agreement requires the company to pay $220,561 in unpaid wages and damages to 33 workers, pay $40,000 in civil penalties, and agree to compliance monitoring for two years.

Michigan

  • Michigan Attorney General Nessel filed a class action lawsuit against AF LLC, operating as ACF Wholesale, and its owner, alleging illegal business practices including statutory conversion, after many consumers complained that the business took orders and payment but never delivered the furniture involved. The complaint seeks monetary damages, fines, costs and fees, and permanent injunctive relief.

New Hampshire

  • New Hampshire Attorney General Formella announced the indictment of Hammond Grinding and Recycling Inc. alleging that it failed to report to the state that it exceeded its permit capacity for construction and demolition debris and falsified facility reports.  

New York

  • New York Attorney General James announced that the New York State Digital Fair Repair Act recently became effective, which requires manufacturers doing business in the state to make certain parts, tools, and documents used for the repair of digital electronics widely available. The law applies, with some exclusions, to any product over $10 that uses digital electronics for functioning.
  • New York Attorney General James announced a lawsuit against Citibank, N.A., alleging that the bank did not employ robust enough online security to prevent fraud, is misleading consumers about recovery rights, and unlawfully denies fraud victims reimbursement. The lawsuit seeks injunctive relief, restitution, penalties, and disgorgement.

Pennsylvania

  • Pennsylvania Attorney General Henry announced a settlement with attorney Erik M. Helbing, his law firm Helbing Law, LLC, and Consumer Law Relief, LLC, resolving allegations that they engaged in misleading advertising and failed to provide debt settlement services, in many cases transferring accounts to non-attorney call center representatives. The settlement includes $25,000 in restitution and $10,000 in civil penalties, and follows the issuance of at least $50,000 in consumer refunds.

Rhode Island

  • Rhode Island Attorney General Neronha announced a lawsuit against car dealership King Philip Motors and its managers, alleging deceptive sales and advertising practices such as advertising and selling unsafe vehicles that had not undergone safety inspections and failing to make necessary repairs. The lawsuit seeks injunctive relief and civil penalties.