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

Monday, April 5, 2021:

CFPB

  • The Consumer Financial Protection Bureau (“CFPB”) proposed a series of rule changes to help prevent avoidable foreclosures as the emergency protections expire. The rule changes would, for example, provide a pre-foreclosure review period to give borrowers additional time; allow servicers to offer loan modification options to those with COVID-19-related hardships based on an incomplete application; and modify the required servicer communications.

 Environment

  • Massachusetts Attorney General Healey announced that her office entered into an agreement with Shea Concrete Products, Inc., settling allegations that it violated the Clean Water Act by illegally discharging industrial stormwater into wetlands without a permit. Under the agreement, the company must pay $57,500, with the majority going towards water quality improvement projects.

 Financial Misconduct

  • New York Attorney General James announced an agreement with air inflation services provider Service Station Vending Equipment, Inc. and its owner, resolving claims that they failed to pay sales tax on air inflation services and engaged in fraudulent tax avoidance by paying employees off the books and underreporting sales. The settlement includes a payment of $4.25 million in damages and penalties.

Financial Services

  • Rhode Island Attorney General Neronha announced that he issued guidance reminding debt collectors, financial institutions, and creditors that stimulus payments from the American Rescue Plan Act are exempt from seizure or garnishment, and that the Attorney General’s Office is prepared to protect consumers from unlawful collection practices.
  • On April 5, 2021, Washington, District of Columbia Attorney General Racine filed a complaint against financial technology lending platform Opportunity Financial for allegedly illegally providing predatory high-interest loans, such as loans with up to 198% interest rates. Additionally, it allegedly misleadingly made the loans seem more affordable than payday loans and as an opportunity to build credit history. The lawsuit seeks injunctive relief as well as civil penalties, restitution, and fees and costs.

Labor

  • Massachusetts Attorney General Healey announced that Global FF&E and its owner pleaded guilty to failing to pay employer contributions to the Massachusetts unemployment insurance fund. The plea will include five years of probation and 200 hours of community service for the owner as well as a payment of $180,000 in restitution.

Tuesday, April 6, 2021:

 CFPB

  • The Consumer Financial Protection Bureau (“CFPB”) issued a consent order against debt collector Yorba Capital Management and its former owner for allegedly violating the Consumer Financial Protection Act of 2010 and for Yorba’s violation of the Fair Debt Collection Practices Act by harassing consumers and falsely threatening them with legal action. The consent order bars Yorba and its former owner from the debt collection business as well as orders restitution and penalties. In connection with the consent order, Acting Director Uejio stated, “Debt collectors often run afoul of consumer law when they coerce consumers to pay them by exaggerating the consequences of not paying. Today’s action is a reminder that debt collectors must stick to the truth when communicating with consumers.”

 COVID-19

  • Kentucky Attorney General Cameron and Tennessee Attorney General Slatery III filed a lawsuit against the Biden Administration seeking to stop it from enforcing a mandate in the American Rescue Plan Act that prohibits states from lowering taxes for four years as a condition of receiving the COVID-19 aid.

Financial Services

  • Pennsylvania Attorney General Shapiro announced that his office entered into an agreement with debt buyer Elevation Capital Partners, LLC. The agreement will result in the cancellation of about $2.6 million in private student loans held by students who attended schools operated by Education Corporation of America. It also provides for refunds of loan payments to Elevation Capital Partners. Additionally, Elevation Capital Partners is permanently barred from engaging in any collection efforts related to the students’ accounts and is prohibited from selling or transferring the accounts.

Healthcare

  • Connecticut Attorney General Tong and Acting U.S. Attorney for the District of Connecticut Leonard Boyle announced a civil settlement agreement with healthcare organization Today’s Youth LLC and its owners. The agreement requires the company and its owners to pay $273,000 to resolve allegations that they caused overpayments by the Connecticut Medicaid Program for behavioral health services. The company allegedly submitted claims to Medicaid for behavioral health services that were performed by unlicensed providers.

Labor

  • Washington Attorney General Ferguson announced a lawsuit against janitorial services company National Maintenance Contractors for allegedly taking advantage of immigrants with limited English proficiency with its franchise agreements. According to the press release, while the individuals were promised business ownership, they often were left paying excessive fees and earning less than minimum wage. Among other things, the lawsuit seeks injunctive relief, restitution, and civil penalties.

Wednesday, April 7, 2021:

CFPB

  • The Consumer Financial Protection Bureau (“CFPB”) issued a Notice of Proposed Rulemaking that would extend the effective date of two recent debt collection rules by 60 days to give parties more time to comply during the pandemic. The rules, which are focused on communications and disclosures related to debt collection, are scheduled to take effect on November 30, 2021, but the CFPB would extend them to January 29, 2022.

Consumer Protection

  • Oregon Attorney General Rosenblum announced settlements with four car dealerships who allegedly sent misleading mailers and scratch-off tickets to consumers, making them think they won a prize when they actually had not. The dealerships must pay $148,517 in restitution and $493,774 in costs and penalties, suspended in part if they fully comply with the settlements. The investigation also revealed the dealerships committed other violations, such as selling vehicles above the advertised price and failing to provide the guaranteed minimum trade-in value that dealerships advertised as part of the promotion.
  • Iowa Attorney General Miller announced that Compliance Processing Group, LLC has agreed to refund money to Iowa truck drivers who paid it $149 to submit biennial reports to the Federal Motor Carrier Safety Administration that they are able to file for free. The company allegedly sent the drivers past-due notices about the reports that deceptively implied they were sent by a government agency and that failure to respond could result in civil penalties. The settlement also includes injunctive relief.

Financial Services

  • On April 7, 2021, U.S. District Judge Kevin McNulty of the District of New Jersey allowed a putative class action lawsuit to continue against collection agency Advanced Call Center Technologies LLC for allegedly violating the Fair Debt Collection Practices Act by sending collection letters that did not clearly identify the creditor. However, District Judge McNulty dismissed the claim that the collection agency failed to clearly state the amount of the debt due by including both a total account balance and an amount due now, reasoning that credit card owners are used to seeing such representations.

Law Enforcement

  • New York Attorney General James and Illinois Attorney General Raoul led a coalition of 10 attorneys general asking the U.S. Senate to pass H.R. 1280, the George Floyd Justice in Policing Act of 2021. The bill would reform law enforcement agencies across the United States as well as provide attorneys general with clear statutory power to investigate unconstitutional policing and to acquire data about the use of excessive force.

Thursday, April 8, 2021:

Civil Rights

  • Wisconsin Attorney General Kaul announced proposed legislation which would provide the Wisconsin Attorney General with the ability to investigate and bring civil causes of action when civil rights violations have occurred. Under the law, the Wisconsin Attorney General would be able to bring a civil action when there is reasonable cause to believe that either an individual has engaged in a pattern of conduct that violates a state or federal constitutional right or a legal right, or that a person has been denied one of these rights “and that denial raises an issue of general public importance.”

Environment

  • Kansas Attorney General Schmidt and Nebraska Attorney General Peterson sent a letter to U.S. Interior Secretary Deb Haaland seeking an assurance that President Biden’s directive that plans to have at least 30% of the U.S.’s land and water in conservation by 2030 is being construed to protect private property rights and to maintain local and state authority over conservation efforts.

Federal Matters

  • Florida Attorney General Moody sued the Biden administration and the U.S. Centers for Disease Control and Prevention (“CDC”) over the U.S. shutdown of the cruise industry, arguing that the CDC does not have the authority to issue the lockdown and that its actions are arbitrary and capricious, violating the Administrative Procedure Act.

Financial Services

  • Virginia Attorney General Herring announced that an amendment to his bill protecting the initial round of stimulus payments from debt collection activity will ensure that the entirety of the most recent stimulus payments are also protected from garnishment by creditors and debt collectors.

Labor

  • Pennsylvania Attorney General Shapiro announced that contractor Glenn O. Hawbaker, Inc. of State College has been charged with four counts of theft for violations of the federal Davis-Bacon Act and the Pennsylvania Prevailing Wage Act for allegedly stealing employees’ retirement, health, and welfare money. According to the press release, this case is the largest criminal prevailing wage case on the record.
  • A coalition of 22 attorneys general filed a brief in Fifth Circuit case U.S. Department of Labor v. Data Marketing Partnership asking the Fifth Circuit to protect states’ power to regulate fraud and abuse in the insurance industry. The coalition is supporting the Department of Labor’s determination that a process through which users obtain health insurance in exchange for sharing data over the internet did not qualify as an “employee benefit plan” under the Employee Retirement Income Security Act of 1974 (“ERISA”).
  • A coalition of 14 attorneys general led by South Carolina Attorney General Wilson sent a letter to the U.S. Senate in opposition to the “Protecting the Right to Organize Act of 2021,” or “PRO Act” bill, which they are arguing would effectively require workers to join unions in violation of state Right-to-Work laws.

 Friday, April 9, 2021:

 Healthcare

  • New Jersey Attorney General Grewal announced new rule proposals geared towards establishing permanent standards for those who practice telemedicine. The rule proposals apply to those licensed by the State Board of Dentistry, the New Jersey State Board of Respiratory Care, the Alcohol and Drug Counselor Committee, and the Occupational Therapy Advisory Council. They were published on March 15, 2021, and will remain in effect after the end of the public health emergency.

Financial Services

  • Pennsylvania Attorney General Shapiro announced that his office reached agreements with the former CEO of Think Finance and debt collector National Credit Adjusters (“NCA”), ending an alleged $133 million payday lending scheme. The settlements include injunctive relief, such as requiring NCA to cancel all of the balances on the Think Finance debts owed, as well as monetary relief including a $3 million payment by the Think Finance CEO.

Labor

  • New Jersey Attorney General Grewal announced a settlement with order-fulfillment company Bergen Logistics for allegedly discriminating against a pregnant employee by refusing to grant her accommodations and requiring her to take unpaid family leave after she filed a complaint. Under the settlement, the company must pay $25,000 to the employee and implement policy reforms

 

 

 

 

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

Monday, March 29, 2021:

 CFPB

  • Consumer Financial Protection Bureau Acting Director Uejio and Federal Trade Commission Acting Chairwoman Slaughter issued a joint statement about their agencies’ work to help stop illegal evictions during the pandemic, after the Centers for Disease Control and Prevention extended the federal eviction moratorium for three additional months. The statement provides, “Staff at both agencies will be monitoring and investigating eviction practices, particularly by major multistate landlords, eviction management services, and private equity firms, to ensure that they are complying with the law. Evicting tenants in violation of the CDC, state, or local moratoria, or evicting or threatening to evict them without apprising them of their legal rights under such moratoria, may violate prohibitions against deceptive and unfair practices, including under the Fair Debt Collection Practices Act and the Federal Trade Commission Act.”
  • Along with four other federal financial regulatory agencies, the Consumer Financial Protection Bureau (“CFPB”) announced that it is seeking information from the public on financial institutions’ use of artificial intelligence in their operations. According to the press release, the CFPB is hoping to better understand the use of artificial intelligence and its associated risk management, challenges, and governance.

COVID-19

  • Missouri Attorney General Schmitt filed a lawsuit against the United States Department of the Treasury and Secretary Yellen over the broad interpretation of a provision in the American Rescue Plan Act that would allegedly compel states to choose between accepting COVID-19 relief funding or exercising sovereignty over state tax policy. The lawsuit asks the Missouri federal court to either ensure a narrow interpretation is applied or declare that the broad interpretation is unconstitutional.

 Energy

  • New Mexico Attorney General Balderas announced a lawsuit against the United States Nuclear Regulatory Commission (“NRC”) seeking to stop the NRC from indefinitely storing high level radioactive waste in New Mexico. The complaint argues that the NRC is going beyond the scope of its authority and that the storage facility will, among other things, harm water resources and agricultural interests in New Mexico.

Housing

  • Maryland Attorney General Frosh announced a settlement with Home Free Lead Inspections, LLC and two of its inspectors, resolving allegations that they failed to properly perform lead-based paint inspections, issued certificates for properties that were not thoroughly inspected, failed to provide pre-inspection notice, and failed to submit timely inspection certificates. Home Free and its inspectors have agreed to a $495,000 judgment.

Tuesday, March 30, 2021:

 Consumer Protection

  • New York Attorney General James announced an agreement with Life Alert Emergency Response, Inc., which resolves an investigation into the company’s failure to include mandatory cancellation provisions in personal emergency response service contracts. The agreement allows over 5,500 consumers to cancel their contracts and requires Life Alert to provide refunds to those who previously tried to exercise cancellation rights.

False Claims

  • North Carolina Attorney General Stein announced the sentencing of the sole officer of Skeen Services, Inc. for submitting false claims to Medicaid in 2013 and 2014. The claims falsely represented that almost 200 individuals received behavioral health services that they did not in fact receive. The officer was sentenced to 37 months in federal prison and ordered to pay $213,927.55 in restitution.

Financial Misconduct

  • On March 30, 2021, U.S. District Judge Alison J. Nathan of the Southern District of New York entered a penalty of over $53 million against Hutton Ventures LLC, which was accused of executing a student debt relief scam and violating the New York usury cap, for failing to respond to the New York Attorney General’s lawsuit against it. The order made the full amount of the penalty due immediately and also included injunctive relief.

Labor

  • A 12-state coalition of attorneys general has moved to intervene in a lawsuit brought by attorneys general who are challenging a U.S. Department of Labor rule which clarifies the scope and application of religious exemptions as they apply to federal contractors. The 12-state coalition is seeking to defend the rule as protective of religious freedom.

State AG Office News

  • New York Attorney General James issued a statement about New York’s passage of marijuana legalization. The statement provides, “The legalization of marijuana is a racial and criminal justice imperative, and today’s vote is a critical step towards a fairer and more just system. For too long, people of color have been disproportionately impacted by an outdated and shortsighted marijuana prohibition, and it’s past time we right this wrong. We must also engineer an economy that will provide a much-needed boost to communities devastated by the war on drugs and COVID-19, and I am hopeful this will help to achieve that for New Yorkers.”

Wednesday, March 31, 2021:

 CFPB

  • The Consumer Financial Protection Bureau (“CFPB”) announced that it is rescinding seven 2020 policy statements, effective April 1, 2021, that gave temporary flexibilities to financial institutions in consumer financial markets such as credit reporting, credit cards and prepaid cards, and mortgages. The press release states that the CFPB wishes to convey that it intends to exercise its full authority under the Dodd-Frank Act. In connection with the rescissions, Acting Director Uejio stated, “Providing regulatory flexibility to companies should not come at the expense of consumers. Because many financial institutions have developed more robust remote capabilities and demonstrated improved operations, it is no longer prudent to maintain these flexibilities. The CFPB’s first priority, today and always, is protecting consumers from harm.”
  • The Consumer Financial Protection Bureau (“CFPB”) announced that the 2020 Home Mortgage Disclosure Act Modified Loan Application Register data was published on the Federal Financial Institutions Examination Council’s HMDA Platform. According to the press release, this data can help identify discriminatory lending patterns and disparities in lending outcomes. It can also help determine if financial institutions are serving communities’ housing needs, and can help drive public-sector and private investment.

Education

  • A coalition of  23 attorneys general sent a letter to U.S. Secretary of Education Dr. Miguel Cardona asking him to create  reforms to protect student loan borrowers and ease the student loan repayment process. Some of the suggested reforms include continuing to suspend student loan payments and waive interest, continuing to suspend involuntary collections activities, and shielding borrowers from for-profit programs that do not prepare students for careers.

Elder fraud and abuse

  • Washington Attorney General Ferguson announced that a King County Superior Court judge ruled that CLA Estate Services, Inc. and CLA USA, Inc. must pay over $6.1 million plus 12% annual interest to senior citizens in Washington for misleading them about estate planning as well as engaging in other deceptive activity. They must also pay $6.5 million in civil penalties and over $1.8 million in attorneys’ fees and costs. The $14.5 million ruling, which also includes injunctive relief, “represents the highest ever trial award in a Washington state consumer protection case brought by the Attorney General’s Office.”
  • Arkansas Attorney General Rutledge announced the introduction of the SAFER AR Act: Safeguarding Against Financial Exploitation of Retirees for Arkansans, which will strengthen the protection of senior citizens from predatory practices. The bill requires Adult Protective Services to refer cases of suspected exploitation, including financial exploitation, to the Attorney General’s Office within 48 hours.

Financial Misconduct

  • On March 29, 2021, U.S. District Judge Hannah Lauck of the Eastern District of Virginia affirmed a class action settlement for $50 million against entities involved in predatory tribal loan schemes that went against the Racketeer Influenced and Corrupt Organizations Act. The order also included cancelling about $383 million in outstanding debt from lending institutions Plain Green, Great Plains, and MobiLoans.

Labor

  • Washington Attorney General Ferguson announced that air cargo handler Matheson Flight Extenders must pay $168,500 for illegally discriminating against pregnant and disabled employees, as well as end its discriminatory practices. An Attorney General investigation uncovered that the company refused to accommodate disabilities if they occurred outside of work.

State AG Office News

  • Virginia Attorney General Herring applauded the passage of the Virginia Voting Rights Act, which increases voter protections in the state and empowers the attorney general to enforce these protections.

Thursday, April 1, 2021:

 CFPB

  • The Consumer Financial Protection Bureau (“CFPB”) warned mortgage servicers to take all steps necessary to prevent avoidable foreclosures in fall 2021, as homeowners in forbearance will need help from servicers after the emergency mortgage protections expire. According to the press release, “The CFPB will closely monitor how servicers engage with borrowers, respond to borrower requests, and process applications for loss mitigation. The CFPB will consider a servicer’s overall effectiveness in helping consumers when using its discretion to address compliance issues that arise.”

Education

  • A bipartisan coalition of 25 attorneys general submitted an application to the U.S. Department of Education to cancel federal student loan debt for those students defrauded by ITT Technical Institute between 2007 and 2010. The cancellation would include money students already paid towards the loans.

Financial Services

  • New York Attorney General James announced that New York has suspended, for the 13th time, the collection of student and medical debt owed to the state that has been referred to the Office of the Attorney General for collection. The suspension, which has limited exceptions, will remain in effect until April 30, 2021.

Labor

  • Illinois Attorney General Raoul announced settlements with a temporary staffing agency and three companies that use temporary staffing labor, resolving allegations that they segregated workplaces and discriminated against workers based on their sex in hiring decisions. The settlement agreements include injunctive relief as well as a total of $280,000 in civil penalties.

 Price gouging

  • New York Attorney General James announced an agreement with Hillandale Farms Corporation which resolves a 2020 lawsuit over the price gouging of eggs. Under the agreement, Hillandale will refrain from charging excessive prices for eggs as well as donate 1.2 million eggs to homeless shelters, food pantries, and soup kitchens in New York.

 Friday, April 2, 2021:

 CFPB

  • On April 2, 2021, U.S. District Judge Kenneth Marra of the Southern District of Florida denied the Consumer Financial Protection Bureau’s (“CFPB”) motion to dismiss claims in its lawsuit against Ocwen Financial Corp. after a summary judgment decision limited the claims in the case. The CFPB had hoped to appeal the summary judgment order, but the judge reasoned that Rule 41 does not allow a plaintiff only to dismiss particular claims, and the CFPB must instead refile its complaint.

 Elder fraud and abuse

  • Minnesota Attorney General Ellison announced that his office entered an assurance of discontinuance with assisted-living facility Continental Gardens Senior Living, LLC, resolving allegations that the facility advertised wellness visits that it did not provide. The agreement includes injunctive relief as well as $10,000 in settlement funds.

Energy

  • A coalition of attorneys general filed an amicus brief in U.S. Supreme Court case HollyFrontier Cheyenne Refining, LLC v. Renewable Fuels Association, supporting a challenge to the Environmental Protection Agency’s award of small-refinery exemptions to the Renewable Fuel Standard and arguing that the language allowing for the exemptions should be interpreted narrowly.

Environment

  • The California Department of Justice filed comments with the U.S. Army Corps of Engineers about Sunset Exploration’s proposal to drill for natural gas in the Suisun Marsh. The comments ask the Army Corps to consider the potential environmental impacts to nearby environmental justice communities and to endangered and threatened species in the wetland as well as the increased greenhouse gas emissions from the project.

Financial Services

  • On April 1, 2021, the Fifth Circuit affirmed the dismissal of a $2.5 million jury award in favor of debt collectors CBE Group Inc. and RGS Financial Inc. after a federal judge found that they did not provide enough evidence of material misrepresentation in favor of their claims of fraud and fraud by nondisclosure against credit repair companies Lexington Law Firm and Progrexion Inc. The debt collectors had argued that the credit repair companies perpetrated a fraud when they failed to disclose they were sending letters to the debt collectors in their clients’ names.

 

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

March 22, 2021

COVID-19 

  • Minnesota Attorney General Ellison announced that the Minnesota House passed HF844, which makes price gouging illegal during emergencies and gives the Attorney General’s Office enforcement authority. The state Senate has not yet voted on companion bill SF965. The new law forbids all parties in the chain of distribution from selling essential consumer goods and services for unconscionably excessive prices during a state of emergency and 30 days after it ends. Minnesota currently has an executive order forbidding price gouging during the COVID-19 pandemic, but the new law will remain in place for future declarations of emergency.

 Healthcare

  • Massachusetts Attorney General Healey announced that her office reached a $1.25 million settlement with home health care company Lifod Home Health Care LLC and its owner to resolve allegations that they falsely billed the Massachusetts Medicaid Program for services that a physician did not properly authorize.

March 23, 2021

 Healthcare

  • North Carolina Attorney General Stein announced that he will not oppose the combination of Atrium Health and Wake Forest Baptist Health. According to the press release, Attorney General Stein stated, “I will not take action against this deal at this time. My office conducted a thorough review into the potential antitrust and charitable corporation law implications. We did not find reasons to intervene, but my office will continue to monitor how this transaction affects competition in the North Carolina market.”

Law Enforcement

  • Arizona Attorney General Brnovich announced the enactment of new state legislation, HB2116, which allows victims of human trafficking to take civil action against their perpetrators in Arizona court. Previously, only criminal action was available in the state. Among other things, the new law provides that criminal acquittal is not a defense to liability and subjects corporations, partnerships, and associations to liability.

 Price Gouging

  • U.S. District Judge Denise Cote of the Southern District of New York declined to grant a temporary restraining order against New York City’s enforcement against price gouging. The court’s denial order does not include any reasoning, instead stating that the reasons are on the record from a March 23, 2021 conference.

 March 24, 2021

Consumer Financial Protection Bureau 

  • The Consumer Financial Protection Bureau (“CFPB”) provided the Consumer Response Annual Report for 2020 to Congress, which reflects an almost 54% increase in consumer complaints in 2020 from those received in 2019. The press release states that credit and consumer reporting complaints accounted for over 58% of complaints received, “followed by debt collection (15%), credit card (7%), checking or savings (6%), and mortgage complaints (5%).”

 Federal Matters

  • A coalition of 13 attorneys general filed a lawsuit against the Biden administration for its moratorium on future oil and gas leasing and drilling permits on federal land. The coalition is arguing that the moratorium violates the Administrative Procedure Act and will negatively impact several industries.

 Financial Services

  • New York Attorney General James issued guidance to banks, creditors, and debt collectors, clarifying that stimulus payments are exempt from garnishment under state and federal consumer protection law. In connection with the guidance, Attorney General James stated, “This official guidance makes clear that banks and debt collectors cannot freeze or seize stimulus funds that are intended for New Yorkers, especially those most in need during this time. My office remains committed to protecting New Yorkers’ rights, and ensuring that any institution that violates this guidance will be held accountable to the fullest extent of the law.”
  • A three-judge Third Circuit panel reversed a New Jersey federal court decision denying debt resolution firm National Legal Center’s motion to compel arbitration against a proposed class action lawsuit claiming that it engaged in illegal debt adjustment and similar activities. The panel based its reversal on an arbitration provision in the parties’ legal services agreement from 2013, which it found valid and applicable.

Healthcare

  • New York Attorney General James applauded the state Legislature’s repeal of a nursing home immunity provision from the 2020 state budget.

State AG News

  • California Governor Newsom nominated Rob Bonta, a state assemblyman who is known for advocating for criminal justice reform, as California’s next attorney general. If Bonta is confirmed, he will be the state’s first Filipino attorney general and will hold the position until 2022 when he will need to run for election.

March 25, 2021

 Consumer Protection

  • Acting Federal Trade Commission (“FTC”) Chairwoman Slaughter announced a new rulemaking group within the FTC’s Office of the General Counsel. According to the press release, the creation of the new group will allow the FTC to strengthen its existing rules and generate new rulemakings that prohibit unfair and deceptive practices and unfair methods of competition.
  • Minnesota Attorney General Ellison announced a lawsuit against PNW C2C Marketing, LLC and its owner for violating state charitable solicitation and consumer protection laws. The company allegedly misrepresented that it was a nonprofit organization soliciting donations for care packages to be sent to servicemembers overseas, and then its owner instead used the donations for personal gain.
  • A coalition of 16 consumer advocate groups sent a letter to the Consumer Financial Protection Bureau (“CFPB”) arguing that an April 2020 relief measure that allows credit reporting agencies and similar companies to extend 30-day dispute investigation deadlines is no longer necessary and has potentially resulted in increased consumer complaints.

 COVID-19

  • Nebraska Attorney General Peterson announced that his office reached a settlement with Pivot Concierge Health, LLC and Banyan Medical Systems, LLC to resolve claims that they violated the Nebraska Consumer Protection Act and the Uniform Deceptive Trade Practices Act through their advertising of COVID-19 antibody tests. The companies allegedly failed to provide necessary disclosures to consumers and made deceptive and misleading statements about the ability of the antibody tests to identify a current or prior COVID-19 infection. The settlement includes injunctive relief and a $25,000 payment.

Federal Matters

  • West Virginia Attorney General Morrisey sent a letter to U.S. Securities and Exchange Commission (“SEC”) Acting Chairwoman Allison Lee arguing that an SEC disclosure initiative that would compel companies to make policy statements unrelated to their financial performance, such as statements about environmental and social matters, could violate the First Amendment.

Financial Misconduct

  • The California Department of Justice announced a settlement with Artichoke Joe’s Casino, including a $5.3 million penalty, for allegedly misleading gambling regulators and violating the Bank Secrecy Act by failing to accurately and timely report a Financial Crimes Enforcement Network investigation. The settlement represents the largest agreed-upon penalty in the history of the state’s gambling regulation.

 March 26, 2021

Consumer Financial Protection Bureau 

  • U.S. District Judge Maryellen Noreika of the District of Delaware dismissed a Consumer Financial Protection Bureau (“CFPB”) lawsuit over student loan trusts’ collections practices, agreeing with an argument that the CFPB did not have the authority to bring the action when its structure was unconstitutional. The CFPB must amend its complaint by April 26, 2021.

 Consumer Protection

  • Massachusetts Attorney General Healey announced that her office filed a lawsuit against driving school North Andover Auto School, LLC and its owner. The school allegedly closed after the arrest of its owner and failed to provide refunds to over 1,500 students. The lawsuit is seeking over $1 million in restitution.

Federal Matters

  • During a panel for the American Bar Association’s spring antitrust meeting, Federal Trade Commission (“FTC”) acting Chairwoman Slaughter stated that there are other avenues the FTC may pursue if the Supreme Court takes away its ability to seek restitution. First, the FTC may ask Congress to intervene to address a “misunderstanding.” Second, the FTC may allege rule violations that extend beyond the FTC Act or bring more cases through the administrative law process rather than in court.

Financial Misconduct

  • New Jersey Attorney General Grewal announced that the Bureau of Securities within the Division of Consumer Affairs reached a settlement with broker-dealer firm FCG Advisors, LLC to resolve an investigation related to financial misconduct by a former agent of the firm, whom the firm allegedly failed to properly supervise. The settlement includes a $250,000 payment, which encompasses both a civil penalty and restitution.
  • New York Attorney General James announced that two auto repair shops, Broadway Towing, Inc. and Broadway Auto & Towing, Inc., and their owner pleaded guilty to criminal tax fraud for underreporting over $8 million in taxable sales over a 10-year period. The guilty pleas include a payment of over $900,000 in penalties, restitution, and interest.

Financial Services

  • A proposed class brought a lawsuit against debt collector Monarch Recovery Management Inc. in New Jersey federal court, alleging that the business violated the Fair Debt Collection Practices Act when it sent collection letters saying consumers could verbally dispute debts, even though the communications must be in writing for the debt to be verified.

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

March 15, 2021

Elder Fraud and Abuse 

  • California Attorney General Becerra announced a lawsuit against Brookdale Senior Living, Inc., the largest senior living operator in the U.S., for allegedly giving false information to the Centers for Medicare & Medicaid that they use to award “star ratings” to nursing facilities, fraudulently increasing its rating. The lawsuit also alleges that Brookdale ignored laws that protect patients’ safety when they are discharged from a nursing facility by failing to properly prepare patients for transfer or discharge.

Privacy

  • California Attorney General Becerra announced that the Office of Administrative Law approved additional regulations under the California Consumer Privacy Act that increase protections for those seeking to control the sale of their personal information. The new regulations ban “dark patterns” that may obscure or delay the process of opting out of the sale of personal information, such as confusing language or unnecessary steps. They also give businesses an optional blue Privacy Options icon.

Workers/Labor

  • New Jersey Attorney General Grewal announced that the payroll manager for construction company UniMak, LLC was charged with demanding cash kickbacks from workers and failing to pay them for many hours of work. The manager entered a non-prosecution agreement under which it is required to pay $1 million to employees who did not receive earned wages.

March 16, 2021

Consumer Financial Protection Bureau

  • The Consumer Financial Protection Bureau (“CFPB”) sued student loan debt relief company Student Loan Pro and its owner and manager for allegedly charging over $3.5 million in illegal upfront fees, violating the Telemarketing Sales Rule. The lawsuit seeks injunctive relief, consumer redress, disgorgement, and monetary penalties.

Education

  • Minnesota Attorney General Ellison announced a tentative agreement with Minnesota School of Business and Globe University, their owners, and the U.S. Department of Education that should provide almost 100% financial relief to former students who were defrauded by the schools between 2009 and 2015. The agreement includes forgiveness of $23.1 million in outstanding federal student loan debt and $15.6 million in annual compensation for those who were issued illegal loans at predatory interest rates or fraudulently enrolled in the “criminal justice” program that advertised careers as police or probation officers but actually provided no value towards those careers.
  • Illinois Attorney General Raoul led a coalition of 17 attorneys general in sending a letter to Congress asking it to pass the Keeping All Students Safe Act, which forbids any school receiving federal funding from placing children in seclusion or using dangerous restraints.

Energy

  • Texas Attorney General Paxton announced that under a bankruptcy plan, Griddy Energy will offer releases to about 24,000 former customers who owed $29.1 million for unpaid electric bills. Attorney General Paxton’s office previously sued the company for debiting large amounts from customer accounts after the February 2021 winter storm.
  • New York Attorney General James led a coalition of 12 attorneys general and the City of New York in filing a Second Circuit petition for review, supporting the repeal of two Trump administration rules that undermine energy conservation standards for residential gas furnaces and commercial gas water heaters by delaying updated energy efficiency standards and “grandfathering” inefficient designs and technologies.

Federal Trade Commission

  • A multistate working group of attorneys general, chaired by the California, Pennsylvania, and Wisconsin attorneys general, will report findings about the effects of pharmaceutical mergers to the Federal Trade Commission (“FTC”) as part of the FTC’s “Reimagining Pharmaceuticals Initiative,” whose goal is to update the U.S. and international approach to these mergers.

March 17, 2021

Environment

  • California Attorney General Becerra filed motions to intervene in lawsuits challenging San Diego County’s certification of Environmental Impact Reports for the Otay Ranch. Attorney General Becerra is arguing that the reports do not sufficiently analyze the impact of increased wildfire risk from the projects.

Federal Matters

  • A coalition of 21 attorneys general is petitioning the Southern District of Texas to invalidate President Biden’s executive order canceling the Keystone XL pipeline project. The coalition is arguing that the president may not overturn permits granted by Congress, which has the power to regulate interstate and foreign commerce.
  • A coalition of 21 attorneys general sent a letter to the S. Department of the Treasury, asking it to uphold states’ rights to cut taxes against the Biden administration’s American Rescue Plan Act, which prohibits states from using COVID-19 relief funds to offset reductions in net tax revenues.

March 18, 2021

Consumer Protection

  • New Jersey Attorney General Grewal announced a settlement with ghost gun company U.S. Patriot Armory, which his office previously sued over its advertising and marketing of ghost guns to New Jersey residents. Under the consent judgment, the company has, among other things, agreed to stop advertising and selling these guns to New Jersey consumers and to pay $70,000.

Education

  • California Attorney General Becerra announced that the U.S. Department of Education will cancel student loan debt for about 72,000 student borrowers who were defrauded by predatory for-profit colleges such as Corinthian Colleges and ITT Technical Institute.
  • Illinois Attorney General Raoul announced that his Know Before You Owe legislation was passed by the Illinois House of Representatives’ Higher Education Committee. The legislation, which is also pending in the Illinois Senate as Senate Bill 2291, is meant to ensure student loan borrowers have information about their eligibility for federal aid before they select more expensive private loans.

Federal Matters

  • The Senate confirmed California Attorney General Becerra as the U.S. Secretary of Health, making him the first Latino secretary of the U.S. Department of Health and Human Services. He has stepped down as Attorney General, naming Matthew Rodriquez as Acting Attorney General until the California Legislature confirms Governor Newsom’s nominee.

Price Gouging

  • Texas Attorney General Paxton filed a lawsuit against Everyoung Hospitality LLC, d/b/a La Quinta San Antonio Brook City Base, accusing the business of price gouging during the February 2021 winter storm by charging excessive prices for rooms, up to almost three times its typical rates.

March 19, 2021

Consumer Protection

  • Massachusetts Attorney General Healey announced that real estate company ASAA, LLC and its manager entered a consent judgment with her office. Under the consent judgment, the defendants agreed to pay up to $55,000 to settle claims that they knowingly failed to report the release of hazardous materials and oil at a property they re-developed and that they neglected to help protect public health and safety in violation of Massachusetts law.

Price Gouging

  • Under a multistate agreement with New York, Massachusetts, and New Jersey, V.J. Associates Inc. and its affiliates must pay $1,875,000 for falsely inflating bills for its services on public-works projects in the three states. The company overbilled for hours that its employees spent on administrative tasks unrelated to the public-works projects, for hours worked on unrelated, fixed-fee projects, and for hours that were unnecessary and excessive.

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

Monday, March 8, 2021

 Consumer Protection

  • Washington Attorney General Ferguson announced that after a lawsuit, ticketing company Brown Paper Tickets must pay about $9 million to consumers who purchased tickets to events that were cancelled as well as organizers of past events the company failed to pay. The company must also pay the Attorney General’s Office $70,000 in attorneys’ fees and costs.
  • Colorado Attorney General Weiser announced a settlement with travel company Voyageurs International which will provide almost $800,000 in refunds for fees withheld from those who purchased cancelled high school trips to Europe.

 COVID-19

  • Minnesota Attorney General Ellison announced that his office settled a lawsuit against Plainview Wellness Center for allegedly violating Governor Walz’s Executive Order by remaining open when it was ordered to close. The settlement includes injunctive relief and requires the gym to pay a $5,000 fine.

 Energy

  • Pennsylvania Attorney General Shapiro announced a settlement with Chesapeake Energy, which provides for future improved payment of royalties for those landowners with Chesapeake leases; improved protections for landowners through appointment of an Ombudsman, Attorney General inspection rights, and annual reporting; and $5.3 million in restitution. The settlement comes after a lawsuit accused Chesapeake of engaging in unfair and deceptive business practices in obtaining natural gas leases and by improperly paying royalties to landowners.

False Claims

  • Washington D.C. Attorney General Racine announced a lawsuit against home health care provider Vizion One for allegedly defrauding the D.C. Medicaid program of over $3 million when it submitted false claims for at-home care that was not necessary, authenticated, or provided.

Federal Matters

  • A coalition of 12 attorneys general led by Missouri Attorney General Schmitt filed a lawsuit against President Biden’s administration, challenging his Executive Order 13990. The coalition is arguing that President Biden did not have the authority to issue binding numbers for greenhouse gas social costs to be used in federal regulations, and that these regulations could greatly impact the economy.

Tuesday, March 9, 2021

 Consumer Protection

  • California Attorney General Becerra announced a $10.5 million partial settlement against retail chain Curacao, resolving allegations that it deceived and profited unlawfully from consumers with its financing contracts. The settlement includes $10 million in debt relief for those who were harmed, additional debt forgiveness for customers who are still paying for small claims judgments, and $500,000 in civil penalties. It also includes injunctive terms such as requiring the company to sell goods as they are advertised, to disclose all material terms in contracts, and to cease debt collection activities against those against whom default judgments were entered in illegal small claims actions.

Energy

  • Colorado Attorney General Weiser sent a letter to the Federal Energy Regulatory Commission asking it to examine whether recent spikes in natural gas prices were the result of market manipulation or fraud, as well as expressing concern about reports that an investment bank benefitted from the price increase.

Wednesday, March 10, 2021

 Civil Rights

  • New York Attorney General James’ Hate Crimes and Bias Prevention Unit filed a lawsuit against former owner of ice cream shop Bumpy’s Polar Freeze, seeking to hold the former owner responsible for allegedly making false, race-based police reports against those protesting discriminatory hiring practices. The lawsuit also charges the former owner with intending to choose victims based on race and violating their right to peacefully protest.

Consumer Protection

  • Arizona Attorney General Brnovich announced that his office obtained a $100,000 consent judgment against two pest-control companies after consumers accused the companies of failing to give them their full termite warranties and instead charging a $125 fee for inspections.

Financial Services

  • In an oral argument held on March 10, 2021 at the Eleventh Circuit, debt collector Preferred Collections and Management Inc. asked the panel to uphold a lower court’s dismissal of a lawsuit claiming it violated the Fair Debt Collection Practices Act by sending debtor information to a third party mailing house to create a demand letter because it was not a “communication made in connection with collection of a debt.”

Price Gouging

  • Florida Attorney General Moody announced that her COVID-19 price gouging hotline has hit the one year period since its activation. The press release also states that in the past year, Attorney General Moody’s office has obtained over $2.5 million in recoveries from COVID-19-related scams, deactivated 290 posts offering goods for excessive prices, received over 14,700 consumer contacts, and made over 11,400 merchant contacts about price gouging and other scams.
  • Michigan Attorney General Nessel announced that she filed a notice of intervention in Consumers Energy Co.’s request to increase its electric rates, months after it received approval for a $90.2 million rate increase. In connection with the intervention, Attorney General Nessel stated, “Throughout the COVID-19 pandemic, my office took price-gouging very seriously to protect residents from being taken advantage of, and we will maintain that effort now to protect ratepayers as well. Families should not have to choose between paying exorbitant utility bills or paying for their rent, medicine, food, clothing and for other essential things. My office will intervene in this rate case and scrutinize this request to determine whether the proposed benefits truly justify the costs to Michigan consumers.”

Privacy

  • Democratic Representative Suzan DelBene has re-introduced a bill that would create a national standard for digital privacy rights, pre-empting state laws like Virginia’s and California’s. If it is enacted into law, the bill would exempt small businesses from regular audits and focuses on the most essential privacy concerns.

Thursday, March 11, 2021

 Consumer Financial Protection Bureau

  • The Consumer Financial Protection Bureau (“CFPB”) announced that it is rescinding its January 2020 policy statement about prohibiting abusive acts or practices, which stated that the CFPB would decline to seek monetary penalties and disgorgement for certain acts and practices. The CFPB is now saying this policy was contrary to its goal of protecting consumers, and it will exercise its full authority under the Dodd-Frank Act, though it will continue to consider discretionary factors such as good faith and company size.

Consumer Protection

  • Washington Attorney General Ferguson announced that TV and internet provider Wave must pay $900,000 to over 23,000 customers who ordered its services online. The company allegedly failed to adequately disclose taxes and fees on bills and did not sufficiently disclose fees in some of its advertising.

False Claims

  • Tennessee Attorney General Slatery announced a lawsuit against Care Services Management, Marquis Mobile Dental Services LLC, and their owners for violating the Tennessee Medicaid False Claims Act. The lawsuit alleges that the defendants knowingly caused false claims to be submitted under the state’s Medicaid program, focusing on those receiving Medicaid assistance for their long-term care who could deduct healthcare expenses like dental care from payments. The defendants also allegedly operated an illegal kickback scheme.

Price Gouging

  • Virginia Attorney General Herring announced that his office reached a settlement with Rio Medical Supplies, resolving allegations that it charged unconscionable prices on hand sanitizer. The complaint alleged that the business charged $59.99 per 1,000-ml bottle of hand sanitizer, which represented a 20% increase from the pre-emergency pricing. The settlement includes injunctive relief, $2,500 in civil penalties and attorneys’ fees, and $1,646.40 in disgorgement. The press release also states that since the beginning of the pandemic, the Virginia Attorney General’s Office received over 500 complaints alleging price gouging and sent over 150 investigative letters to businesses.

Privacy

  • A coalition of 41 attorneys general announced a multistate settlement with Retrieval-Masters Creditors Bureau, d/b/a American Medical Collection Agency (“AMCA”) for a data security breach that occurred in 2019, which compromised 7 million consumers’ personal information and potentially endangered 21 million consumers’ information. The settlement requires AMCA to put data security practices in place and includes a $21 million payment, suspended due to AMCA’s financial condition.

Friday, March 12, 2021

COVID-19

  • Pennsylvania Attorney General Shapiro issued a press release about his protection of Pennsylvanians during the pandemic. Among other things, the press release states that to date, the Attorney General’s Office received over 6,000 price-gouging tips, sent 522 cease-and-desist letters, and filed 31 price-gouging actions.

Energy

  • A multistate coalition of attorneys general submitted recommendations to the Department of Energy (“DOE”) asking it to comply with statutory deadlines to review and update energy efficiency regulations, as well as to rescind or revise prior actions which undermined the energy efficiency program.

Federal Matters

  • The Federal Trade Commission (“FTC”) and Department of Justice (“DOJ”) clarified that the temporary suspension of granting early termination of merger review does not apply in at least two circumstances, each occurring after the agency has issued a Request for Additional Information. In the first scenario, the FTC or DOJ may determine that the transaction is unlikely to substantially reduce competition, and in the second, the parties may negotiate a Consent Agreement.

Healthcare

  • Washington Attorney General Ferguson, the Swinomish Indian Tribal Community, and the Washington Health Care Authority filed a petition in the U.S. Court of Appeals for the Ninth Circuit and sent a letter to the acting secretary of the U.S. Department of Health & Human Services, seeking to overturn a decision made by the Trump administration denying Medicaid funding for Dental Health Aide Therapists in Washington tribal communities.

 Price Gouging

  • Michigan Attorney General Nessel issued a reminder to propane customers to report any price gouging after the state’s announcement of the MI Propane Plan, which focuses on ensuring that Michiganders’ energy needs are met and that they are protected from price gouging. The announcement also asks the legislature to re-introduce and reconsider legislation that would strengthen Michigan’s price gouging law by enhancing investigative tools, adding criminal penalties, and expanding the law against business-to-business transactions.

 

On January 7, 2021, Deputy Attorney General Jane Young (Nonpartisan) began serving as acting New Hampshire Attorney General after Governor Chris Sununu (R) nominated former Attorney General Gordon MacDonald (R) to the state Supreme Court. MacDonald delegated his duties to Young for the period of the nomination process, pursuant to a New Hampshire statute that authorizes the deputy attorney general to act as attorney general under limited circumstances. In addition to being a longtime member of the New Hampshire attorney general’s office, Young also spent more than a decade investigating criminal cases as a member of the Hillsborough County attorney’s office.

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

Monday, March 1, 2021:

Immigration

  • Illinois Attorney General Raoul joined District of Columbia Attorney General Racine in leading a coalition of 20 attorneys general in urging the U.S. Department of Homeland Security and U.S. Citizenship and Immigration Services (USCIS) to withdraw the decision to terminate the Haitian Family Reunification Parole Program and the Filipino World War II Veteran Parole Program.

Federal Matters

  • Michigan Attorney General Nessel joined a coalition of attorneys general in sending a letter to Congressional leadership urging support for H.R. 1/S. 1, the For the People Act of 2021. The bill is an omnibus package of democracy reforms designed to expand access to the ballot, protect elections from foreign interference, force disclosure of dark money in federal elections, and raise ethical standards for federal officials. Joining Nessel are the attorneys general of Colorado, Connecticut, Delaware, the District of Columbia, Illinois, Iowa, Maine, Maryland, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon, Pennsylvania, Rhode Island, Vermont, Virginia, and Washington.

Financial Services | Consumer Financial Protection Bureau

  • New York Attorney General James urged investors “extreme caution when investing in virtual currencies” and added, “we’re sending a clear message to the entire industry that you either play by the rules or we will shut you down.” The alert to industry members serves as a reminder to brokers, dealers, salespersons, and investment advisors that the State of New York will not tolerate unregistered cryptocurrency operations. They could potentially face “both civil and criminal liability.”

Healthcare

  • Massachusetts Attorney General Healey’s Office filed a lawsuit against an orthodontist for fraudulently submitting millions of dollars in false claims to the state’s Medicaid program, MassHealth, including by keeping children in braces for longer than medically necessary and deceptively billing for mouth guards. The AG’s Office alleges that this conduct violates the state False Claims Act and the state Medicaid False Claims Act; constitutes a breach of contract by the two companies; and resulted in the unjust enrichment of the defendants. The lawsuit seeks treble damages and civil penalties. The complaint can be found here.

State AG Office News

  • Former South Dakota Attorney General Jackley announced that he will seek the 2022 Republican nomination for the position held by incumbent Jason Ravnsborg, who is facing impeachment and calls to resign after he killed a man with his car.
  • In recognition of National Consumer Protection Week, a number of Attorneys General announced their office’s list of Top 10 consumer complaints for 2020. Top spots were held by (1) COVID-19 related scams, (2) robocalls, and (3) internet-related issues. Here are the lists for Illinois, Michigan, and New York.

Tuesday, March 2, 2021

Immigration

  • Virginia Attorney General Herring has joined 21 attorneys general in filing an amicus brief with the U.S. Supreme Court in support of the right of foreign nationals living in the United States under a Temporary Protected Status designation to become permanent residents when they meet statutory requirements.

Financial Services | Consumer Financial Protection Bureau

  • New York Attorney General James announced$500,000 settlement with Champion, the reverse mortgage servicing division of Nationstar Mortgage LLC, over allegations that Champion failed to provide homeowners with the clear, accurate information they needed to help protect their homes. As part of the agreement, Champion is required to pay $500,000 to the Attorney General’s Equitable Reverse Mortgage Assistance (ERMA) program, a $3 million pilot program launched in 2020 using settlement funds obtained by the Office of the Attorney General (OAG). The ERMA program will help customers, specifically senior citizens, from Champion and other reverse mortgage servicers in New York avoid default and foreclosure due to missed property payment, and the additional $500,000 in ERMA funds will be earmarked to assist Champion customers.

Law Enforcement

  • Washington state senators passed, by an overwhelmingly bipartisan 46-2 vote, a bill Attorney General Ferguson requested to create. The bill includes a database of police use-of-force incidents so the public, policymakers, researchers and law enforcement can access the data. Currently in Washington state, there is no central repository for use-of-force data. The bill requires agencies to collect and report key data regarding the incident, including the demographic characteristics of the officers and the members of the public. A centralized, online and publicly accessible database will assist law enforcement, academics and policymakers.

Privacy/Data Security

  • Virginia is poised to become the second state in the nation to pass a broad consumer privacy bill. Virginia’s Consumer Data Protection Act has passed through the General Assembly and the governor is expected to sign it any day. The law’s chief innovation is requiring consent before companies collect some limited types of sensitive information. Like laws in California, it also includes some individual rights to access and delete information, and it gives people the right to opt out of some types of data sales and targeted ads. There are some concerns that the law will be passed too quickly, leaving a slew of exceptions that make it unclear whether many big-name companies were purposely exempted.

Wednesday, March 3, 2021

Consumer Protection

  • Virginia Attorney General Herring announced that he has secured debt relief and restitution for 700 Virginia student loan borrowers through a settlement with Equitable Acceptance Corporation. Under the terms of the agreement, Equitable is required to cancel over $50,000 in debt and provide $40,000 in restitution for nearly 700 Virginians. The settlement resolves allegations that Equitable violated the Virginia Consumer Protection Act by making loans with illegal interest rates that were used by Virginians to purchase fake student debt relief services from companies that partnered with Equitable.

Federal Matters

  • Twenty Republican state attorneys general signed a letter denouncing the House Democrats’ controversial election reform bill as unconstitutional for a slew of reasons just hours before the measure was expected to be voted on. The letter — led by Indiana Attorney General Todd Rokita — tore into H.R. 1, the “For the People Act,” a massive election reform bill and a leading priority for House Democrats this Congress.

Healthcare

  • North Carolina Attorney General Stein announced that Lakeisha Shameika Jones pleaded guilty to fraud by a medical assistance provider and obtaining property by false pretenses. Jones was sentenced to eight to 19 months in prison and suspended for 36 months of supervised probation by Judge William Bland in Wayne County Superior Court. According to AG Stein, “[t]his individual defrauded the Medicaid program and wasted taxpayer money,” said Attorney General Josh Stein. “My office will hold accountable businesses and people that break the law and commit fraud.” From July 28, 2018 to October 26, 2018, Jones submitted false time sheets to her employer, Xeon Home Health Care Services, indicating that she had provided medical services to a Medicaid recipient in Wayne County, when in fact she had not.

Thursday, March 4, 2021

Federal Trade Commission

  • Georgia Attorney General Carr, along with the Federal Trade Commission and 46 agencies from 38 states and the District of Columbia, has stopped a massive telefunding operation that bombarded 67 million consumers with 1.3 billion deceptive charitable fundraising calls (mostly illegal robocalls) claiming to support veterans, children and firefighters. The defendants collected more than $110 million using their deceptive solicitations. Associated Community Services and a number of related defendants have agreed to settle charges by the FTC and state agencies that they duped Americans into donating to charities that failed to provide the services they promised. The complaint names ACS and its sister companies Central Processing Services and Community Services Appeal; their owners, Dick Cole, Bill Burland, Barbara Cole, and Amy Burland; and ACS senior managers Nikole Gilstorf, Tony Lia, John Lucidi, and Scot Stepek. In addition, the complaint names two fundraising companies allegedly operated by Gilstorf and Lia as spin-offs of ACS, Directele, and The Dale Corporation. Defendants will be required to cease operations and pay monetary judgements.

Financial Services | Consumer Financial Protection Bureau

  • Virginia Attorney General Herring announced that he has reached a settlement with Allied Title Lending, LLC d/b/a Allied Cash Advance (Allied), an open-end credit plan lender, concerning violations of Virginia’s consumer finance statutes. In addition to providing for a permanent injunction preventing Allied from further violations of Virginia’s consumer finance statutes, the settlement requires the company to pay $850,000 that the Commonwealth can use to provide restitution to customers who opened accounts with Allied during the period from September 28, 2013 through July 23, 2017, and to pay the Commonwealth $150,000 for reimbursement of its attorneys’ fees and settlement administration costs. The settlement resolves allegations that Allied violated Virginia’s consumer finance statutes, including laws applicable to open-end credit lenders, by: (1) charging a $100 origination fee during the statutorily mandated finance charge-free grace period on all loans; and (2) engaging in a pattern of repeat transactions and “rollover” loans with thousands of consumers who were required to close accounts that they paid down to a $0 balance, but permitted to open new accounts on which new fees were charged, on a monthly basis.

Law Enforcement

  • Together with law enforcement agencies and the Colorado Department of Labor and Employment (CDLE), Colorado Attorney General Weiser announced the creation of the Colorado Unemployment Fraud Task Force. The joint task force will investigate and prosecute those who have committed identity theft, and used that information to commit fraud against the state of Colorado and the unemployment insurance system.

Friday, March 5, 2021

Consumer Protection

  • Washington D.C. Attorney General Racine released a 2020 “Consumer Complaint Report,” which highlighted that the Attorney General’s Office received 50% more consumer complaints than in 2019. The issues most complained of were billing and refund problems, and price gouging accounted for 8% of the complaints, though complaints decreased after the Attorney General’s Office initiated enforcement actions.
  • Indiana Attorney General Rokita announced agreements with six motorcycle dealerships which allegedly charged excessive document preparation fees over two years. Under the agreements, the dealerships must pay $174,000 in restitution.

 Federal Trade Commission

  • The Federal Trade Commission, along with attorneys general from 38 states and the District of Columbia, halted Associated Community Services’ (“ACS”) and related defendants’ telemarketing operation, which used fraudulent and deceptive solicitations to collect over $110 million from 1.3 billion calls. The settlement includes both suspended monetary relief and injunctive relief.

 Financial Services | Consumer Financial Protection Bureau

  • Washington Attorney General Ferguson announced that a King County Superior Court judge ruled that student loan servicer Navient violated the Washington Consumer Protection Act through its conduct related to student loans. According to the press release, “This is the first time a judge has ruled that Navient broke a consumer protection law in a student loan servicing lawsuit filed by a state’s Attorney General or federal consumer protection agency.” A full trial is scheduled for April of 2022.
  • New York Attorney General James announced that her office reached an agreement with KeyBank to help low- to moderate-income New Yorkers buy homes. The agreement resolves Attorney General James’ investigation into KeyBank’s alleged deceptive advertising of its “KeyBank Plus” program. The bank has agreed to pay $5 million to the State of New York Mortgage Agency for down payment assistance as well as to lend $145 million to low- to moderate-income homebuyers over the next five years.
  • The Consumer Financial Protection Bureau (“CFPB”) filed a petition in Minnesota district court to enforce a Civil Investigative Demand against Educational Credit Management Corporation (“ECMC”). The CFPB is alleging that ECMC withheld at least 70 emails that may show it delayed loan rehabilitations in order to maximize collections costs.
  • U.S. District Judge Kenneth Marra for the Southern District of Florida ruled that a large part of the Consumer Financial Protection Bureau’s (“CFPB”) mortgage servicing misconduct lawsuit against Ocwen Financial Group is precluded by a settlement Ocwen previously reached with the CFPB and state regulators. Judge Marra granted partial summary judgment to Ocwen on nine of the 10 counts in the lawsuit.

Workers/Labor

  • New Jersey Attorney General Grewal announced that the Division on Civil Rights proposed amendments to the New Jersey Family Leave Act, which, among other things, expand protections for family leave related to the pandemic and broaden the definitions of “family leave,” “family member,” “parent,” “child,” and “covered employer.”

On March 8, 2021, Clay Friedman was quoted in an Automotive News article titled, “White House could shake up auto finance.” The article discusses the anticipated regulations and enforcement within the auto industry under the Biden administration. Regarding the concerns of auto dealers, Friedman noted that enforcement will focus on areas such as automotive financing, anticipating that “Truth in Lending is going to be vehicle No. 1.” He advised auto dealerships to consider their compliance training, stating the importance of being able to demonstrate and document that proper procedures are being followed.

The article link is available here, for Automotive News subscribers. For similar articles, follow reporter Audrey LaForest on Twitter.

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

Monday, Feb. 22, 2021

Financial Services | Consumer Financial Protection Bureau

  • In an example of states working with the Consumer Financial Protection Bureau (“CFPB”), the CFPB and the Massachusetts, New York, and Virginia attorneys general filed a lawsuit against Libre by Nexus and its parent company Nexus Services in the U.S. District Court for the Western District of Virginia. The lawsuit alleges that the company offered to pay immigration bonds to secure the release of immigrants held in federal detention centers, while it concealed the cost and true nature of the services. Among other things, the company allegedly misrepresented that it was associated with federal agencies and actors, threatened clients who failed to pay fees, and forced clients to wear GPS trackers.

 Energy

  • Arizona Attorney General Brnovich announced an agreement with Arizona Public Service Company, which will provide $24 million for consumers who were not on the company’s most economical electric utility service rate plan.
  • Missouri Attorney General Schmitt announced a default judgment against timeshare-relief services company Martin Management Group LLC and its owner for allegedly failing to provide timeshare relief services and failing to provide refunds. The judgment includes injunctive relief and a payment of $222,768.90 to the state.

 Environment

  • Washington Attorney General Ferguson announced that mold-remediation company PurEnvironment pleaded guilty to environmental crimes charges for alleged false claims that its products could provide 90 plus days of protection from COVID-19. The company has been sentenced to a year of probation, required to comply with federal and state regulations, and ordered to pay a $15,000 fine.

Healthcare

New Jersey Attorney General Grewal announced a $1.6 million default judgment against a former owner of Advanta Medicaid LLC in a lawsuit alleging that the company accepted thousands of dollars from consumers after promising to help them establish Medicaid eligibility, and then failed to provide these services. The defendant is also permanently barred from advertising or selling Medicaid-related goods or services and from owning or managing any business in the state.

 Housing

  • Washington D.C. Attorney General Racine announced two actions to prevent discrimination against D.C. residents east of the Anacostia River. Attorney General Racine’s office filed a lawsuit against moving company Lend A Box for rejecting online reservations from residents in Wards 7 and 8 and announced a settlement with home improvement company Design Builders for refusing to provide services to those east of the Anacostia River. The two actions include civil penalties and injunctive relief.

Tuesday, February 23, 2021

 Consumer Protection

  • The New Hampshire Attorney General’s Office announced that the Merrimack County Superior Court granted final judgment against Worldwide Push Foundation, Inc. for violating the New Hampshire Consumer Protection Act and charitable trust laws after it advertised a charitable event without obtaining necessary permits and licenses, and then postponed the event without providing refunds. The judgment includes injunctive relief and requires the company to provide refunds.
  • New York Attorney General James announced an agreement with the operator of virtual currency trading platform Bitfinex and another platform Tether which requires them to end trading activity involving New Yorkers. The companies allegedly made false statements about the “tether” stablecoin’s backing and the movement of money between the companies to cover up losses. Under the agreement, the companies must also submit reports to the Office of the Attorney General, submit to regular reporting, and pay $18.5 million in penalties.
  • California Attorney General Becerra announced that the U.S. District Court for the Eastern District of California denied internet service providers’ motion for a preliminary injunction, allowing Senate Bill 822, California’s net neutrality law, to be enforced while the litigation takes place.
  • Colorado Attorney General Weiser led 30 attorneys general in sending a comment letter to the Federal Communications Commission (“FCC”) urging it to fund internet-enabled devices and internet connectivity for K-12 students who are learning online because of the pandemic through the E-Rate program.

Elder Fraud & Abuse

  • Florida Attorney General Moody announced state legislation that would strengthen protection of elderly Florida residents. SB 1344 and HB 1041 would, among other things, expand the jurisdiction of the attorney general’s office to include crimes against elderly persons and disabled adults, provide additional methods of proving abuse and exploitation of an elderly person or disabled adult, allow law enforcement authority to intervene prior to physical harm or financial loss, expand who may file an injunction, and extend injunctions for up to 45 days.

 Financial Services | Consumer Financial Protection Bureau

  • The Consumer Financial Protection Bureau (“CFPB”) announced that it will propose a rule to delay the General Qualified Mortgage (“QM”) Final Rule’s current mandatory compliance date of July 1, 2021. According to the announcement, “An extension of the compliance deadline would allow lenders more time in which they could make QM loans based on a debt-to-income ratio or whether the loans are eligible for sale to Fannie Mae or Freddie Mac, and not just a pricing cut off.” The CFPB also announced that it is considering revisiting the Seasoned QM Final Rule with a rulemaking.

 Price Fixing

  • Washington Attorney General Ferguson announced a judgment against tuna manufacturer StarKist for a price-fixing scheme from November 2011 to December 2013 that artificially inflated the price of canned tuna. The Attorney General’s Office is arguing that the conduct took place over a longer period of time and hopes to prove this at trial, and is seeking monetary and injunctive relief.

Transportation

  • Washington Attorney General Ferguson announced that the Ninth Circuit overruled a Federal Railroad Administration rule which would have allowed railroads to operate trains with only one crewmember aboard, allowing a Washington law to take effect that requires most trains traveling through Washington to have at least two crewmembers on the train.

Wednesday, February 24, 2021:

Consumer Protection

  • A coalition of 21 attorneys general sent a letter to Congress in support of H.R. 1/S. 1, the For the People Act of 2021.  The Act’s goals are increasing voting access, such as by establishing automatic voter registration, protecting elections from undue influence, and disallowing federal officials from personally profiting from their offices.
  • Washington Attorney General Ferguson filed a lawsuit against Google for allegedly illegally failing to keep records of information about state political ads it sold and for failing to provide this information when requested.

Healthcare

  • California Attorney General Becerra announced a $10 million settlement against Johnson & Johnson subsidiary Medical Device Business Services, Inc. and a $1.5 million settlement against private equity firm The Gores Group. The settlement resolves allegations that the companies used improper marketing tactics to advertise Therakos prescription medical device systems and that they submitted false claims to state Medicaid programs.
  • West Virginia Attorney General Morrisey announced a settlement of over $300,000 with Grant Memorial Hospital, which was accused of improperly billing Medicaid for services that a physician did not have the credentials to provide from 2014 to 2016.
  • Massachusetts Attorney General Healey announced that her office reached a settlement with dental office Amity Dental Center and a dentist for allegedly refusing to accept MassHealth members who were seeking dental services. Under the settlement, the dentist and office have agreed to pay $7,500, complete 35 hours of community service of free dental services, distribute 250 dental hygiene kits, and provide free dental education to local schools.

Workers/Labor

  • Rhode Island Attorney General Neronha announced that he would testify in the Rhode Island Senate Labor Committee in support of SB195, a bill which would increase penalties in Rhode Island for wage theft and the misclassification of employees as independent contractors. According to the press release, “[t]he bill would increase existing penalties to up to three years in prison and a fine of up to $10,000 for the first offense of misclassification or wage theft of $1,500-$5,000, or up to five years in prison and a fine of three times the wage amount or $20,000 (whichever is greater) for subsequent offenses of misclassification or wage theft in excess of $5,000.”

Thursday, February 25, 2021

Federal Matters

  • New York Attorney General James led a coalition of 21 attorneys general in an amicus brief supporting the petitioner in U.S. Supreme Court case Grewal v. Defense Distributed. The coalition is seeking to protect states’ attempts to stop Defense Distributed from publishing instructions for building 3D-printed firearms. The coalition is also arguing in support of states’ abilities to send cease and desist letters out of state and that the Fifth Circuit did not account for state sovereignty and federalism issues when it found that Texas courts could have personal jurisdiction over New Jersey.

Healthcare

  • New Jersey Attorney General Grewal announced that the Division of Consumer Affairs (“DCA”) is encouraging mental health professionals to provide free services to those in need. Under a new DCA Administrative Order, mental health professionals may partially satisfy continuing education requirements by providing free services to uninsured, low income individuals or frontline healthcare workers, as well as by volunteering with organizations that provide mental health services to those in need.

Financial Services | Consumer Financial Protection Bureau

  • California Attorney General Becerra announced a lawsuit against live chat membership service AwesomeCalls, Inc. and AwesomeCallsTrading, Inc. for selling stock market investment advice without a license since 2014. The lawsuit seeks both monetary and injunctive relief.

State AG Office News

  • News reports have stated that under pending legislation in New Jersey, state and county prosecutors, including the attorney general, could be barred from holding elected office for three years after the end of their term.

Friday, February 26, 2021

Consumer Protection

  • New York Attorney General Letitia James today announced that the state will halt, for the 12thtime, the collection of medical and student debt owed to the state of New York that has been specifically referred to the Office of the Attorney General (OAG) for collection — with limited exceptions — through March 31, 2021. The order will take effect today, March 1, and goes through Wednesday, March 31, 2021. Additionally, the OAG will accept applications for suspension of all other types of debt owed to the state of New York and referred to the OAG for collection.

Energy

  • Texas Attorney General Ken Paxton filed a lawsuit against Griddy Energy and Griddy Holdings for “false, misleading, and deceptive advertising and marketing practices” after the company sent sky-high electricity billsto customers during February’s devastating winter storm.

Federal Matters

  • Michigan Attorney General Dana Nessel has joined a coalition of attorneys general from around the nation in fighting a lawsuit that seeks to stop states from enforcing their laws against a company disseminating dangerous 3D-printed gun files on the internet. A copy of the brief can be found here.