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 35 state attorneys general, joined by the District of Columbia, Guam and the Northern Mariana Islands, sent Congress a letter urging it to allow attorneys general to enforce state and federal consumer protections for airline travelers. The state attorneys general make this request after receiving thousands of complaints from passengers claiming airlines have failed in their service responsibilities. Federal law places responsibility for addressing violations of airlines consumer protection with the U.S. Department of Transportation and state attorneys general have limited authority to hold airline companies accountable. The letter urges Congress to pass legislation that would repeal the federal bar on state attorneys general from enforcing the same state and federal consumer protection laws that apply to other industries.
  • A bipartisan coalition of 51 state attorneys general sent a letter to the Federal Communications Commission urging it to require telephone providers that route calls across the United States telephone network to implement more rigorous measures to prevent illegal and fraudulent robocalls. According to the coalition, illegal robocalls cost consumers, law enforcement and the telecommunications industry approximately $13.5 billion every year. The letter expresses support for the FCC’s proposal to extend the implementation of STIR/SHAKEN, a caller ID authentication technology that helps prevent spoofed calls, to all “intermediate” phone providers in the United States. Further, the letter urges the FCC to require providers to adopt additional measure to cut down on illegal and fraudulent robocalls.
  • A coalition of 24 state attorneys general, led by Montana Attorney General Knudsen and Tennessee Attorney General Skrmetti, sent a letter to the Chief Executive Officers of three major credit card companies, American Express, Mastercard and Visa, alerting each that the recent creation of a Merchant Category Code for the processing of firearm purchases is potentially a violation of consumer protection and antitrust laws. The letter stated the monitoring and tracking of firearms purchases will create a “list of gun buyers,” which will generate risk that consumers’ information will be obtained and misused by those opposing Second Amendment rights. The letter asserts that the new Merchant Category Code is the result of transnational collusion between large corporations leveraging their market power to further desired social outcomes.

California

  • California Attorney General Bonta and California Assemblymember Brian Maienschein introduced legislation establishing various new protections for car buyers in Assembly Bill 2311. On September 14, California Governor Newsom signed Assembly Bill 2311. The bill addresses the sale and administration of guaranteed asset protection (GAP) insurance, an add-on product often sold by car dealers along with auto loans that allegedly offers little to no value to consumers. The bill will require creditors to automatically refund the unearned portion of a GAP waiver if a consumer pays off or otherwise terminates their auto loan early.
  • California Attorney General Bonta, alongside five district attorneys, announced an $8 million settlement with Safeway resolving allegations that the company violated state environmental laws while operating underground storage tank systems at 71 gas stations across California. An investigation into Safeway’s gas stations found a recurring failure to install, implement and operate various spill prevention and safety measures since at least March 2015. Safeway allegedly violated state laws regulating the operation of underground storage tanks and the handling of hazardous waste. The settlement includes injunctive requirements to improve operational safety and compliance with state laws to avoid potential contamination to soil and groundwater.

Connecticut

  • Connecticut Attorney General Tong and Connecticut Department of Consumer Protection Commissioner Seagull announced an investigation into unfair and deceptive sales practices of Solar Wolf Energy, Inc., an Auburn, Massachusetts-based solar company, over failure to complete promised residential work. Solar Wolf in violation of the Connecticut Home Improvement Act and Connecticut Unfair Trade Practices Act allegedly charged high-priced deposits and failed to complete the contracted work, and failed to return those deposits to consumers for incomplete work. Solar Wolf failed to respond to an investigative demand, which led to a Superior Court order blocking Solar Wolf from selling, advertising, offering, or marketing goods or services in Connecticut until permission form the court is obtained.

Massachusetts

  • Massachusetts Attorney General Healey filed a lawsuit against a Haverhill, Massachusetts car dealership, Jaffarian’s Service Inc., d/b/a Jaffarian Volvo Toyota, for engaging in unfair, deceptive and discriminatory pricing practices against Black and Hispanic customers by illegally charging them hundreds of dollars more for “add-on” products when purchasing a car, such as paint protection, GAP insurance and remote starters. The complaint alleges the dealership gave staff full discretion to markup the prices of add-on products, and the sales history of Jaffarian suggest that Black and Hispanic customers were charged more on average. The alleged discriminatory sales practices resulted in more than $170,000 in improper profits for the car dealership in a two-year period.
  • Massachusetts Attorney General Healy announced a $12 million settlement with a national debt collection company and its subsidiaries for allegedly engaging in unfair and deceptive debt buying and collection in violation of state laws and the Attorney General’s Debt Collection Regulations. The assurance of discontinuance alleges that Encore Capital Group, Inc. and its three subsidiaries were collecting debts without sufficient proof that the debts were valid and accurate, using misleading collection tactics to obtain payments from consumers, harassing consumers and attempting to collect debts that were beyond the statute of limitations, among other allegations. The $12 million settlement includes $4.5 million in restitution to consumers and Encore Capital Group will cease collection on over 4,200 debts, totaling approximately $7.5 million.

Ohio

  • Ohio Attorney General Yost filed a lawsuit against Thrifty Propane, a Medina, Ohio propane supplier, for failing to deliver its products, not refunding consumers’ money and violating two prior consent judgments. Thrifty Propane was the subject of more than one hundred consumer complaints to the Attorney General’s office in 2022 alone. The lawsuit cites six violations of the Consumer Sales Practice Act for various deceptive business practices and seeks $25,000 for each violation as well as reimbursement to the damaged consumers.

Pennsylvania

  • Pennsylvania Attorney General Shapiro obtained a court order for more than $1.7 million in restitution against Omega Vehicle Services, LLC d/b/a Delta Auto Protect for violating consumer protection laws. Delta Auto Protect contracted with consumers nationwide for coverage of any necessary repairs, but when consumers attempted to obtain reimbursement for repairs, Delta Auto Protect would deny the claims and fail to honor their contracts. The court order prevents Delta Auto from operating in Pennsylvania or selling these types of contracts to Pennsylvanian customers, as well as provides for more than $2.5 million in restitution for customers, business restitution and civil penalties for each violation of consumer protection laws.

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 18 state attorneys general sent a comment letter to the Federal Trade Commission asking it to adopt and bolster guidance on automobile sales. Specifically, the coalition is both applauding the FTC’s proposed updates to the Motor Vehicle Dealers Trade Regulation Rule which relate to dealerships’ automobile sales, financing, and leasing, as well as offering suggestions to strengthen the rule, such as by requiring written price disclosures and record retention.

  • A bipartisan coalition of state attorneys general provided comments to the U.S. Department of Education in support of its proposed improvements to the 90/10 Rule, which bars for-profit schools from receiving over 90% of their revenue from federal student aid. Considered improvements to the rule include the elimination of financial incentives for schools to target military members. The coalition is also asking the Department to create stronger regulations to prohibit for-profit schools from improperly attaining nonprofit status.

Arkansas

  • Arkansas Attorney General Rutledge announced a lawsuit against the owner of Tyler Pools & Construction for violating the Arkansas Deceptive Trade Practices Act by failing to complete pool construction projects for which consumers paid over $148,000 and by making false statements about having proper licensing. The lawsuit also alleges that the owner of the company was not registered to conduct business with the Arkansas Secretary of State.

California

  • California Attorney General Bonta and Orange County District Attorney Spitzer announced that they have filed misdemeanor charges against Amplify Energy, Beta Operating Company, and San Pedro Bay Pipeline for an oil spill that occurred off the coast of Huntington Beach in October 2021. The announcement also states that as part of a plea agreement the companies will plead no contest to the charges, pay $4.9 million in fines and penalties, and be placed on a 12-month probation. Separately, they will pay a $7.1 million federal fine and reimburse federal agencies for spill-related expenses.

  • California Attorney General Bonta issued a consumer alert about price gouging after a state of emergency was declared in several counties due to wildfires. Specifically, the alert reminds Californians that price gouging is illegal during a state of emergency and encourages consumers to report any instances of price gouging.

Indiana

  • Indiana Attorney General Rokita announced an agreement with PERA LLC, requiring it to cease solicitations to Indiana public employees. The agreement resolves a lawsuit that accused the company of sending over 70,000 deceptive email solicitations to state public employees, giving the impression that they came from the Indiana Public Retirement System (INPRS) or an approved INPRS provider. The agreement includes a $7,500 penalty with an additional suspended $92,500 penalty and requires the company to refrain from soliciting, selling or coordinating communications to public employees on behalf of, or in connection with, third-party financial representatives in Indiana for seven years.

Maryland

  • Maryland Attorney General Frosh and Maryland Department of the Environment Secretary Tablada announced a settlement with poultry processing facility Valley Proteins, resolving a lawsuit alleging that the company discharged pollutants into a state river for over a year. Among other things, the settlement includes a $540,000 civil penalty and requires the company to conduct relevant investigations into and correct its violations.

Michigan

  • Michigan Attorney General Nessel filed a bypass application to the Michigan Supreme Court asking it to reconsider past decisions that limited enforcement of the Michigan Consumer Protection Act against unfair drug prices. Specifically, two of the Supreme Court’s previous decisions have interpreted an exemption in the Act whenever the general transaction at issue is authorized by law (meaning when it is done by a generally regulated industry). Attorney General Nessel argues that this interpretation allows a loophole for misconduct.

New York

  • New York Attorney General James announced a $50 million agreement with Grand River Enterprises Six Nations, Ltd. and its wholesaler, Native Wholesale Supply Company, Inc., resolving allegations that the companies violated state and federal law by shipping, selling, and distributing cigarettes in New York without paying state excise taxes. In addition to the monetary provision, the agreement permanently prohibits the companies from selling unstamped cigarettes in the state.

  • New York Attorney General James announced a second agreement with Albany Med Health System, resolving allegations that the company included an unlawful provision in employment contracts with nurses hired from abroad that required them to repay thousands of dollars if they resigned or were fired within their first three years of employment. This agreement follows a 2021 agreement over the same illegal repayment provision.

Pennsylvania

  • Pennsylvania Attorney General Shapiro announced that his office entered into a settlement agreement with online ticket seller RYADD, Inc., resolving allegations that the company violated Pennsylvania’s consumer protection laws by changing its refund policy to mandatory store credit without notice at the beginning of the pandemic when many events were cancelled. The settlement requires the company to fully refund any tickets purchased before September 8, 2022 for a cancelled show to consumers in Pennsylvania, as well as to modify its checkout process and online disclosures so that consumers immediately know their final purchase price.

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 38 attorneys general asked Congress to pass legislation that would allow attorneys general to enforce state and federal consumer protections for airline travelers. This request came after thousands of complaints from outraged passengers, claiming airlines have failed in their service responsibilities, causing significant frustrations and unnecessary challenges.

  • A coalition of 34 states and JUUL Labs reached a $438.5 million settlement, resolving a two-year bipartisan investigation into the e-cigarette manufacturer’s marketing and sales practices. In addition to the financial terms, the settlement would force JUUL to comply with a series of strict injunctive terms severely limiting their marketing and sales practices.

Arizona

  • Arizona Attorney General Mark Brnovich announced that the Consumer Information and Complaints unit recovered a record $5.4 million for Arizonans who filed complaints with the Attorney General’s Office over the past fiscal year. The top three complaints over the past year involved car sales, robocalls, and real estate. 

California

  • Assembly member Bauer-Kahan’s bill AB 1242, sponsored by California Attorney General Rob Bonta, has passed the California State Legislature and is now on the Governor’s desk. The bill includes new language to forge a legal path to protect reproductive digital information handled by companies headquartered in California. The bill would also prevent arrest or turnover of information in an investigation related to any abortion already legal in California.

  • Attorney General Bonta issued a consumer alert following the Governor’s declaration of a state of emergency as extreme heat strains the grid with increased energy demand. In the alert, Attorney General Bonta reminded all Californians that price gouging during a state of emergency is illegal under Penal Code Section 396 and encouraged Californians to be proactive about protecting themselves and their health during the heat wave.

Connecticut

  • Connecticut Attorney General William Tong today announced a settlement with Frontier Communications worth over $60 million to dramatically expand access to high-speed internet for Frontier customers in economically distressed communities, end a hidden monthly $6.99 internet surcharge, and force significant improvements in Frontier’s marketing and customer service. The settlement resolves a joint investigation by the Office of the Attorney General and Department of Consumer Protection into whether Frontier deceived or misled consumers in the marketing and sales of internet services.

Georgia

  • Georgia Attorney General Chris Carr and Insurance Commissioner John King warned consumers whose homes were damaged by the recent flooding in northwest Georgia to be on the lookout for home repair fraud and price gouging.

Indiana

  • Indiana Attorney General Todd Rokita issued an advisory opinion affirming that Indiana law requires Indiana Public Retirement System investments to be based solely on the financial interests of Hoosier public employees and retirees. 

    Attorney General Rokita announced a $15 million settlement with Frontier Communications that will ensure that Hoosiers receive the services for which they have paid. The settlement especially benefits residents living in rural communities.

Kansas

  • Kansas Attorney General Derek Schmidt released a consumer alert about utility scams persisting through the end of summer. Utility companies across the state have reported an increase in customer calls alerting them of imposters, who are out in force. Scammers call residents threatening to shut off water or utility services within days or mere hours, unless the citizen pays the caller.

  • The Kansas Attorney General’s Office announced that it will provide Kansans with consumer protection and public safety information at the Kansas State Fair, which opens Friday.

Maine

  • The Maine Office of the Attorney General successfully defended the LD 946, which restricts the usage of customer data by internet service providers (“ISPs”). Last week, the nation’s largest telecommunication providers dropped a federal lawsuit challenging a Maine law limiting ISPs’ ability to use, disclose, or sell their customers’ personal information. The ISPs filed suit in February of 2020 in response to the passage of LD 946, and the suit was dismissed on September 2, 2022.

Massachusetts

  • Massachusetts Attorney General Maura Healey congratulated Jeffrey Shapiro on his appointment as the next Inspector General. Shapiro is an attorney who has been serving as the Commonwealth’s First Deputy Comptroller and previously worked for the Middlesex County District Attorney and the Office of the Attorney General.

Michigan

  • Michigan Attorney General Dana Nessel filed a bypass application to the Michigan Supreme Court asking it to take up her challenge of past decisions by the Court that have limited enforcement of the Michigan Consumer Protection Act for the past two decades. Earlier this year, Attorney General Nessel launched an investigation into Eli Lilly related to its insulin pricing practices. 

Pennsylvania

  • Pennsylvania Attorney General Josh Shapiro publicized that a Delaware County caregiver pleaded guilty to stealing the personal identifying information of several intellectually disabled people in his care to fraudulently apply for and receive thousands of dollars in Pandemic Unemployment Assistance funding.

Washington

  • Washington Attorney General Bob Ferguson has selected Assistant Attorney General Morgan Damerow as the Attorney General’s Office Open Government Ombuds.

  • Attorney General Ferguson announced that a King County Superior Court judge ruled that Facebook parent company Meta repeatedly violated Washington’s campaign finance transparency law. The judge also denied Meta’s attempt to gut Washington’s campaign transparency law.

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 18 state attorneys general filed a motion to intervene in support of the National Highway Traffic Safety Administration (NHTSA) in Natural Resources Defense Council, et al., v. National Highway Traffic Safety Administration, et al., pending in the U.S. Court of Appeals for the District of Columbia. The action, brought by several states and a non-profit environmental advocacy group, challenges stricter fuel economy standards (adopted by NHTSA in May 2022) for model year 2024-2026 vehicles. The motion seeks to support the NHTSA in defending these more stringent standards.

  • A bi-partisan coalition of 21 state attorneys general, submitted a letter commending the Department of Education’s proposed improvements to the 90/10 Rule, which prohibits for-profit schools from receiving more than 90 percent of their revenue from federal student aid. The letter also calls on the Department to adopt stronger regulations to protect borrowers from problems that can arise from improper conversions by for-profit schools to nonprofit status.  

California

  • California Attorney General Rob Bonta announced a settlement with Sephora, Inc., the health and beauty retailer, resolving allegations that the company violated the California Consumer Privacy Act. According to the complaint, Sephora allegedly failed to do the following: (1) disclose to consumers that it was selling their personal information; (2) process user requests to opt out of sale via user-enabled global privacy controls in violation of the CCPA; and (3) to cure these violations within the 30-day period currently allowed by the CCPA. As part of the settlement, Sephora must pay $1.2 million in penalties and comply with important injunctive terms that require the retailer to come into compliance with the CCPA’s requirements.

Connecticut

  • Connecticut Attorney General William Tong announced a settlement with Master Spray Foam Insulation Inc., and its owner and president, Luciano Teixeira, resolving allegations that defendants failed to do the following: (1) pay proper overtime rates to 30 employees; (2) keep true and accurate payroll records; and (3) furnish a suitable paystub from the period of Jan. 1, 2019 to Nov. 1, 2021. Pursuant to the settlement, defendants have agreed to pay the affected employees the wages they are owed for underpaid overtime and for failing to provide earned sick time pay to their employees. The business has updated its payroll practices to come into compliance with state laws.

Illinois

  • Illinois Attorney General Kwame Raoul convened a meeting with representatives of law enforcement agencies and the retail industry to discuss collaborations to strengthen investigations and prosecutions of individuals and enterprises involved in organized retail crime.

  • Illinois Attorney General Kwame Raoul announced a lawsuit against Monsanto Company [BK3] [PT4] and its affiliates, Solutia Inc. and Pharmacia LLC, for allegedly causing negative environmental and human health effects because of the production of polychlorinated biphenyls, known as PCBs. Attorney General Raoul alleges that the companies purposely deceived the public and regulators on the dangers those chemicals posed. The suit seeks monetary relief, including restitution and civil penalties, as well as injunctive relief.

Minnesota

  • Minnesota Attorney General Keith Ellison announced a settlement that shutdown Welch Charities, a Minnesota nonprofit, and has permanently banned its president, Arturo Eguia, from operating a charity, having access to charitable assets, or soliciting charitable contributions in the state after allegedly mismanaging tens of thousands of dollars in charitable assets. According to the settlement, the charity’s board of directors never met, discussed, vetoed, or kept minutes on any operational decisions, which allowed Eguia to run the organization without any supervision. Eguia is also subject to a penalty of $50,000 if he violates the terms of his settlement.

New Jersey

  • Acting New Jersey Attorney General Matthew J. Platkin and Commissioner of Environmental Protection, Shawn M. LaTourette, announced seven new environmental enforcement lawsuits across the state. Six of the lawsuits center on a broad array of chemical pollutants that have allegedly tainted separate, unrelated sites in cities considered overburdened under New Jersey’s Environmental Justice Law because they have significant low-income, minority, and/or limited English proficiency populations. The seventh lawsuit centers on a farm and processing operation that employs migrant workers but has allegedly not complied with the Department’s orders to stop using four substandard, unsafe drinking water wells on the property and is also alleged to be using two unpermitted septic systems. The complaints seek a variety of remedies, including clean-up of the tainted properties, payment of civil penalties to the State, compliance with administrative orders previously issued by the Department, and reimbursement to the State for the cost of site investigation, remediation, monitoring and other related work.

  • Acting New Jersey Attorney General Matthew J. Platkin and the Division on Civil Rights issued 30 Notices of Violation to housing providers in the state for allegedly violating New Jersey’s Fair Chance in Housing Act by asking unlawful questions or including unlawful statements of eligibility or housing policy related to a person’s criminal records. The notices inform the housing providers that the State believes their actions are in violation of the law, and that they face civil penalties of up to $1,000 for a first offense, up to $5,000 for a second offense, and up to $10,000 for any subsequent offense.

  • Acting New Jersey Attorney General Matthew J. Platkin announced that the Division of Alcoholic Beverage Control issued a special ruling that allows third-party delivery services like DoorDash, Instacart, and Amazon Flex to deliver alcoholic beverages—including cocktails “to go”—from restaurants, bars, and liquor stores to customers’ doorsteps.

New York

  • New York Attorney General Letitia James and Governor Kathy Hochul announced a settlement with James R. Lee and his companies, Lee Oil Company, Inc., Whitesville Producing Corporation, Whitesville Production Corp., Allegro Oil & Gas Inc., and Allegro Investments Corporation a number of his companies. The settlement resolves allegations that the defendants violated the state’s oil and gas well regulations and endangered communities in Steuben and Cattaraugus counties by not properly plugging wells they operated, which posed a significant danger to drinking water supplies and of releasing methane in the areas surrounding the wells. The court ruled that defendants failed to: (1) submit over 10 years of required annual reports; (2) file required DEC Organizational Reports for the well operators; and (3) provide adequate financial security intended to ensure the wells’ plugging. Defendants face a $2 million judgment.

Pennsylvania

  • Pennsylvania Attorney General Shapiro announced that his office filed a lawsuit against Progressive Leasing, a rent-to-own company, for violating the State’s Rental Purchase Agreement Act by failing to clearly and conspicuously disclose certain terms and conditions of the rent-to-own transaction on a hang tag that is physically attached to the product. According to the complaint, an investigation revealed widespread non-compliance with the Act’s disclosure requirements by Progressive Leasing and its merchant partners. This is the second lawsuit the Attorney General has filed to enforce the Act.
  • Pennsylvania Attorney General Shapiro announced that his office has filed a lawsuit against used car dealerships, A Impuls Auto Inc. and Great Auto Deals Inc., and its owners and operators for allegedly violating Pennsylvania consumer protection laws. According to the complaint, the owners and operators sold cars to consumers that were not fit to be on the road, intentionally misled consumers about the safety and status of the vehicles, operated an unlicensed dealership, and made unauthorized sales. The lawsuit seeks a permanent ban against the owners and operators from doing business in the state as well as civil penalties and restitution.

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 42 state attorneys general obtained a victory in an ongoing lawsuit against Indivior Inc., a suboxone manufacturer, alleging the company conspired to maintain monopoly profits. Judge Goldberg in the Eastern District of Pennsylvania denied Indivior’s motions for summary judgment, holding that the plaintiff states’ lawsuit may proceed. The case alleges Indivior unlawfully engaged in a scheme to block generic competitors, forcing consumers to pay artificially high prices during a time when the manufacturing companies received more than $3 billion in profits.
  • A coalition of 43 state attorneys general sent a comment letter to the FTC seeking increased obligations on telemarketers by requiring them to keep additional records about their activities, which will allow law enforcement to hold them accountable. The letter proposes changes to the Telemarketing Sales Rule of 1995 including requirements for telemarketers to maintain certain records such as prerecorded messages, telemarketing campaigns and consumer relationships, among others.
  • A coalition of state attorneys general, led by Missouri Attorney General Schmitt, announced an investigation into ESG investing ratings company Morning Star, Inc. and its subsidiary Sustainalytics for alleged consumer fraud and unfair trade practices, which is the first investigation of this kind. In late July, Missouri sent civil investigative demands to Morningstar and Sustainalytics, containing 43 interrogatories for documents relating to an alleged “anti-Israel bias” in ESG ratings.
  • A coalition of 15 state attorneys general, led by Michigan Attorney General Nessel and Illinois Attorney General Raoul, filed an amicus brief in support of the respondents in National Pork Producers Council et al. v. Karen Ross. The brief argues the Supreme Court should protect the ability of states to regulate industries within their borders and states “petitioners’ expansive view of the dormant Commerce Clause would distort the States’ traditional regulatory role and undermine their sovereign authority to regulate matters of importance within their borders.”

Arkansas

  • Arkansas Attorney General Rutledge filed a lawsuit against Big Country Chateau, a multifamily housing complex serving low-income consumers in Little Rock, for violations of the Arkansas Deceptive Trade Practices Act. The housing complex allegedly pocketed resident utility payments instead of paying the utility companies. The housing complex failed to pay hundreds of thousands of dollars to utility companies.

California

  • California Attorney General Bonta, in partnership with the U.S. Department of Justice, announced three settlements totaling $70.7 million against healthcare providers for violations of the False Claims Act. The settlements resolved allegations against Southern California County Organized Health System Gold Coast Health Plan, Dignity Health, Clinicas del Camino Real, Inc. and Ventura County Medical Center for submitting false claims in an organized scheme to wrongfully retain federal funds intended for Medicaid Audit Expansion under the Affordable Care Act.

Iowa

  • Iowa Attorney General Miller announced that three out-of-state companies agreed to permanently cease mail solicitations to purchase agricultural land in Iowa. The companies, CRT Acres, Land Acquisitions and Westward Land Holdings, allegedly violated the Consumer Fraud Act due to unfair conduct addressed in the assurance of voluntary compliance. The solicitations included a “Purchase Agreement” offering to purchase property at a small fraction of its fair market value.

Maryland

  • Maryland Attorney General Frosh announced a Final Order against various entities associated with Marcia Bailey and Arthur Wittenberg for violating the Consumer Protection Act when collecting hundreds of thousands of dollars from consumers to help them consolidate and pay off outstanding consumer debt, but never provided the promised services. The Final Order issues a permanent injunction prohibiting the two individuals and associated entities from further harming consumers, as well as an order requiring them to pay over $2 million in penalties.

Massachusetts

  • Massachusetts Attorney General Healey announced a national mortgage servicer, Fay Servicing, LLC, will provide $3.2 million in relief to Massachusetts homeowners to settle allegations that it engaged in unfair and deceptive conduct through its mortgage servicing, debt collection and foreclosure practices. The assurance of discontinuance alleged that Fay Servicing failed to take required steps to help homeowners avoid foreclosure, harassed consumers with excessive debt collection calls, failed to inform borrowers of their right to request verification of the amount of debt and unfairly charged foreclosure-related fees before obtaining authority to foreclose. These practices were in violation of the Massachusetts Act Preventing Unlawful and Unnecessary Foreclosures, known as “35B.”

New Jersey

  • New Jersey Attorney General Platkin announced that the New Jersey Bureau of Securities issued a civil Summary Penalty and Cease and Desist Order against Fida Frank Rahman d/b/a Clueless8 Trading and FAS Holdings, LLC for the offer and sale of $130,000 of unregistered securities and misuse of investors’ funds. Rahman made false statements and material omissions to investors, and used their money to finance his personal expenses. As a result of the violations, Rahman was assessed civil monetary penalties in the amount of $450,000.

Utah

  • Utah Attorney General Reyes announced a multistate lawsuit against Mariner Finance for violation of consumer protection laws that allegedly deceived consumers out of millions of dollars. The suit alleges Mariner Finance charged consumers for hidden add-on products that consumers did not agree to buy. Due to the hidden add-on products, Mariner added hundreds to thousands of dollars to the total amount consumers owed, totaling hundreds of millions of dollars nationwide. The lawsuit seeks full restitution for all borrowers, repayment of unlawfully gained profits and civil penalties.

Virginia

  • Attorney General Miyares announced a settlement with JumpStart U2, Vasilios Education Center Inc., and Carl S. Vaughan for violating the Virginia Consumer Protection Act and the Virginia Residential Landlord and Tenant Act. The lawsuit alleged that the entities falsely advertised programs offered to low-income tenant consumers. The settlement requires the entities to pay $10,000 in restitution to consumers who entered subleases during the relevant period.

Washington

  • Washington Attorney General Ferguson filed a lawsuit against Ostrom Mushroom Farms for discriminating against U.S. residents and women, and retaliating against workers. The lawsuit asserts that Ostrom discriminated against its workers on the basis of gender, citizenship and immigration status in violation of the Washington Law Against Discrimination. From January 2021 to May 2022, the company fired over 140 of its U.S.-based mushroom pickers, most of whom were women. The company replaced these workers with temporary, foreign agricultural workers, most of whom were men. In addition, the company allegedly punished women disproportionately and retaliated against them.
  • Washington Attorney General Ferguson filed a motion to intervene and oppose an expansion to the Gas Transmission Northwest pipeline. The motion asserts the company’s requested expansion would hurt Washingtonians and increase greenhouse gases that the state is working to reduce. The company asked FERC to allow it to expand its capacity for methane gas running through the pipeline that crosses the Pacific Northwest.

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 state attorneys general reached a $450 million nationwide settlement in principle with opioid maker Endo International plc and its leaders. The settlement resolves allegations that the company increased opioid sales by using deceptive marketing that minimized the risk of addiction and exaggerated benefits. In addition to the payment the settlement would ban promotion of Endo’s opioids and require it to reveal documents related to its role in the opioid crisis to be published in an online archive.
  • A multistate coalition of state attorneys general announced a lawsuit against lending company Mariner Finance, which is being accused of violating the federal Consumer Financial Protection Act by hiding add-on products that consumers did not agree to purchase or even know about when consumers entered agreements to borrow money and repay it over time. The lawsuit seeks restitution, disgorgement, civil penalties, rescission or reformation of contracts and loan agreements, and injunctive relief.
  • A coalition of 19 state attorneys general issued a comment letter in support of an effort by the Federal Reserve Board of Governors, Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency that would revise and strengthen Community Reinvestment Act regulations, which are intended to prevent racially discriminatory activity in housing and to encourage banks to meet all communities’ credit needs. The comment letter asks the agencies to go further by implementing reforms that would combat racial and economic disparities that have been worsened by COVID-19.
  • Several state attorneys general, including Minnesota Attorney General Ellison, Iowa Attorney General Miller, and Illinois Attorney General Raoul applauded the U.S. Department of Education’s decision to discharge all remaining federal student loans for students who attended ITT Technical Institute. Across the country, 208,000 borrowers will receive $3.9 billion in loan discharges, covering all remaining federal student loans for attending the school from January 1, 2005 through its September 2016 closure.
  • A multistate coalition of state attorneys general filed a comment letter in support of the U.S. Department of Education’s efforts to increase access to critical student loan discharge programs including the Public Service Loan Forgiveness and Temporary Expanded Public Service Loan Forgiveness programs and advocating for additional revisions to protect borrowers and taxpayers. Some additional revisions the coalition is seeking include clarification of the mandatory nature of borrower relief and relevant timelines for those who attended a school that closed before they could finish their degree and clarification that borrowers may rely on judgments obtained by state attorneys general as the basis for borrower defense claims.
  • A coalition of 20 state attorneys general filed an amicus brief in support of the U.S. Bureau of Alcohol, Tobacco, Firearms, and Explosives’ (“ATF”) opposition to a motion for a preliminary injunction in Morehouse Enterprises, LLC v. ATF, which seeks to block an ATF rule that would help law enforcement protect communities from guns that lack a serial number. The brief argues that the rule is permitted by the Gun Control Act and complements state laws to regulate partially completed receivers and weapon parts kits.
  • A coalition of 12 state attorneys general issued a comment letter to the U.S. Environmental Protection Agency, speaking against its proposed rule to modify water quality certification requirements under the Clean Water Act. The proposed rule would rescind many changes to the Act from 2020 and add increased steps to approval for projects such as energy pipelines. The coalition is arguing that the rule would create confusion and lead to abuse.
  • A coalition of state attorneys general sent a comment letter to the Securities and Exchange Commission urging it to finalize rules that would require investment companies as well as advisors to disclose information about how they use environmental, social, and governance criteria in products that have been labeled as “ESG.” The coalition believes this disclosure would increase transparency and accountability in this sector.
  • A coalition of 20 state attorneys general sent a comment letter to the U.S. Environmental Protection Agency opposing its adoption of National Ambient Air Quality Standards (“NAAQS”) for greenhouse gases under the Clean Air Act. The coalition is arguing that the adoption of NAAQS would disregard the consequences for the US economy and its industrial capacity and goes against the regulatory framework set by Congress.
  • A coalition of state attorneys general sent a comment letter in support of the U.S. Postal Service’s notice of intent to create a Supplemental Environmental Impact Statement (“EIS”) and its commitment to purchasing more electric vehicles. This notice comes after a lawsuit alleging that the Postal Service relied on a flawed environmental analysis to justify purchasing up to 90% gas powered automobiles in violation of the National Environmental Policy Act. The letter also asks the Postal Service to expand the Supplemental EIS to address the purchase of gas-powered automobiles and to halt any activity related to their purchase until the review is completed.

California

  • California Attorney General Bonta announced a decision from the U.S. District Court for the District of Montana overturning the U.S. Department of the Interior’s (“DOI”) decision to restart the federal coal program based on what Attorney General Bonta argued was a flawed environmental review. Now, DOI will be required to complete a new environmental review under the National Environmental Policy Act, and until then the moratorium on coal leasing will be reinstated.

District of Columbia

  • Washington, D.C. Attorney General Racine announced that his office won a $4 million judgment against ghost gun manufacturer and distributor Polymer80, which was accused of making false and misleading statements about its products’ legality in the District of Columbia. The judgment also includes a permanent ban from selling untraceable and un-serialized firearms to District residents and requires the company to inform consumers that its products are illegal in the District.  

Georgia

  • Georgia Attorney General Carr announced a settlement with psychotherapy service provider Atlanta Behavioral Medicine, Inc., requiring it to pay $650,000. The settlement resolves allegations that the provider billed Georgia Medicaid illegally for services that were never provided when it coded medication management sessions as therapy sessions.

Illinois

  • Illinois Attorney General Raoul announced a lawsuit against The Kroger Co. and SSI Services LLC related to the alleged improper handling and removal of chipped floor tiles that contained asbestos from a grocery store in Taylorville. The lawsuit alleges that the defendants did not remove tiles and an adhesive called mastic before doing work that would dislodge or break up the materials, that they failed to ensure all materials containing asbestos stayed wet until contained or treated in preparation for disposal, and that they failed to properly dispose of all waste material that contained asbestos.

Kansas

  • Kansas Attorney General Schmidt announced that an individual and his corporate entities Parcells Forensic Pathology Group LLC, ParCo-Parcells and Company, LLC, and National Autopsy and Tissue Recovery Services, Inc. received a court order to pay $254,762.98 in restitution, as well as $400,000 in penalties for violating the Kansas Consumer Protection Act and Kansas False Claims Act. The charges stem from illegal autopsy services the individual and entities were providing. Additionally, the individual and entities were permanently banned from offering similar services in Kansas.

Minnesota

  • Minnesota Attorney General Ellison announced that he filed a lawsuit against MN Crete Pools, LLC and its owner, alleging that they engaged in fraudulent and deceptive practices related to in-ground pool construction and equipment that was not delivered. The lawsuit seeks restitution, injunctive relief, civil penalties, and costs and fees.
  • Minnesota Attorney General Ellison announced that at a hearing where his office argued in favor of reduced natural gas rates, the Public Utilities Commission voted to save customers of CenterPoint Energy, Xcel Energy, Minnesota Energy Resources Corporation, and Great Plains Natural Gas Company $58.6 million in natural gas costs.

Missouri

  • Missouri Attorney General Schmitt announced that a federal court entered a final judgment mandating the divestiture of certain grain elevators along the Mississippi River before a large asset acquisition could take place between major agriculture corporations Zen-Noh Grain Corporation and Bunge North America, Inc. The divestiture will allow farmers to receive a fair price for their crops.

New Jersey

  • New Jersey Acting Attorney General Platkin and Commissioner of Environmental Protection LaTourette announced that ExxonMobil must pay the state $9.5 million to resolve a 2019 lawsuit related to the damaging of natural resources from dumping activity. The Consent Judgment does not address any unpaid past cleanup and removal costs associated with the site at issue.

New York

  • New York Attorney General James announced a settlement with robocalling platform Message Communications, Inc., related to its involvement in an illegal robocall scheme intended to prevent Black New Yorkers from voting by mail in the 2020 election. The settlement includes a $50,000 restitution payment and requires the company to send out a voter protection robocall, as well as to refrain from knowingly transmitting voter intimidation robocalls and to screen customers and calls.
  • New York Attorney General James announced a lawsuit against the owners and operators of automobile salvage yard LSM Auto Parts & Recycling for releasing dangerous chemicals and oil into the environment and ignoring cleanup regulations. The lawsuit seeks financial penalties, as well as a workplan for investigating and resolving contamination.

Pennsylvania

  • Consumer Protection Pennsylvania Attorney General Shapiro announced that his office filed a lawsuit against playground equipment suppliers Huntsman Farms LLC and Willowdale Creative Group LLC and an executive. The lawsuit alleges that the companies and executive sold equipment and products through website huntsmanfarms.com but did not deliver the advertised products or give refunds. It seeks a permanent ban against the company and executive from doing business in Pennsylvania, as well as civil penalties and restitution.

West Virginia

  • West Virginia Attorney General Morrisey announced a settlement with Rite Aid  that includes monetary relief of up to $30 million to resolve a lawsuit alleging that Rite Aid did not maintain effective controls against diversion and contributed to the oversupply of opioids in West Virginia.

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

Multistate Coalitions

  • A coalition of 9 attorneys general urged the Environmental Protections Agency (EPA) and EPA Administrator, Michael Regan, to consider establishing National Ambient Air Quality Standards (NAAQS)  for greenhouse gasses to address the climate crisis. The letter follows in the wake of the recent U.S. Supreme Court decision (West Virginia v. EPA), which limits the EPA’s ability to reduce greenhouse gas emissions from existing power plants. If the EPA were to adopt NAAQS for greenhouse gases, all 50 states would be required to develop a comprehensive climate action plan specifically designed for their state.
  • A coalition of 18 attorneys general announced a lawsuit against the Biden administration over proposed rules that would allegedly violate the Second Amendment. The complaint against the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), the Department of Justice, and the Acting Director of ATF alleges that the ATF’s rulemaking takes steps toward the illegal creation of a national firearms registry. It would require firearms retailers to keep all sales records beyond their current 20-year retention requirement and eventually turn them over to the ATF instead of destroying them, which the attorneys general argues will threaten the privacy of gun owners. 
  • A coalition of 8 attorneys general, led by Texas Attorney General Ken Paxton, issued a multistate letter opposing the executive actions President Biden announced in July at Brayton Point Power Station in Somerset, Massachusetts. The letters encourage President Biden to stop increasing inflation by implementing “expensive and unfunded measures to address his so-called ‘climate emergency.’” The letter calls out President Biden’s plan to spend $2.3 billion on the Building Resilient Infrastructure and Communities program, stating that it would be “irresponsible” at a time of historically high inflation.
  • A coalition of 20 attorneys general announced the filing of an amicus brief urging the U.S. Supreme Court to reject a request to overturn more than four decades of precedent allowing higher education institutions to consider race or ethnicity as part of holistic admissions processes. The brief, filed in the cases Students For Fair Admissions, Inc. v. President & Fellows of Harvard College and Students For Fair Admissions, Inc v. University of North Carolina, urges the court to reaffirm its prior rulings that found a holistic race-conscious admissions policy is constitutional and helps promote the educational benefits of diversity.
  • A coalition of 50 attorneys general announced a new Anti-Robocall Litigation Task Force that will investigate scammers operating outside of the United States. 
  • A coalition of 20 attorneys general issued a letter urging the Biden Administration to extend and expand temporary changes to the Public Service Loan Forgiveness (PSLF) Program to provide borrowers with more opportunities to get closer to loan forgiveness faster. More specifically, the coalition seeks to combat the pervasive misconduct of federal loan servicers, including forbearance steering, servicing errors, and failures to advise. The coalition believes that the Limited PSLF Waiver should automatically count all forbearance periods toward loan forgiveness. The letter goes on to request that the waiver should be made available to all federal loan borrowers, including all Parent PLUS borrowers and to those joint consolidation borrowers who are presently locked out of PSLF. Lastly, the coalition proposes harmonizing the recently announced Income-Driven Repayment and PSLF Account Adjustment programs to avoid borrower and servicer confusion, including by aligning deadlines and certain other terms.

Multistate Settlements

  • Three attorneys general, led by Pennsylvania Attorney General Josh Shapiro, along with the Consumer Financial Protection Bureau, and the U.S. Department of Justice announced a settlement with Trident Mortgage Company, resolving allegations that the company did not pursue mortgage business in Majority-Minority Census Tracts equally to the way it did in majority White census tracts in violation of federal and state laws. The settlement requires Trident to place $18.4 million in a fund to provide individual subsidies of up to $10,000 per qualified applicant in support of home purchase, refinance, and home improvement loans for owner-occupied homes in majority-minority neighborhoods.
  • Twelve attorneys general announced a settlement with Abbvie, which acquired Allergan in 2020, resolving allegations that the former opioid maker deceptively marketed opioids by downplaying the risk of addiction, overstating their benefits, and encouraging doctors to treat patients showing signs of addiction by prescribing them more opioids; and failing to maintain effective controls to prevent diversion of opioids. The settlement requires former opioid maker Allergan to pay up to $2.37 billion to participating states and local governments. 
  • Eleven attorneys general announced a settlement in principle with opioid manufacturer Teva. The States alleged that Teva (1) promoted and sold potent, rapid-onset fentanyl products for use by non-cancer patients; (2) deceptively marketed opioids by downplaying the risk of addiction and overstated their benefits, including encouraging the myth that signs of addiction are actually “pseudo addiction” treated by prescribing more opioids; and (3) failed to comply with “suspicious” order monitoring requirements along with its distributor. The agreement would provide up to $4.25 billion to participating state and local governments to address the opioid crisis. 
  • Four attorneys general and New York City announced a settlement with the United States Postal Service, resolving a lawsuit alleging that the Postal Service transported cigarettes in violation of the Prevent All Cigarette Trafficking Act. The Postal Service has agreed to implement comprehensive reforms.

Arkansas

  • Arkansas Attorney General Leslie Rutledge announced a lawsuit against Dodge Off Road, and its owner Daniel Danny Gaston, for allegedly violating the Arkansas Deceptive Trade Practices Act (ADTPA) when the company accepted thousands of dollars from consumers to order aftermarket automotive parts yet never provided the parts, the installation, or a refund to the customer. Attorney General Rutledge is seeking restitution for the consumers affected by the violations, including civil penalties up to $10,000 for each violation of the ADTPA.

California

  • California Attorney General Bonta announced a settlement with Rent-A-Center, one of the nation’s largest rent-to-own companies, resolving allegations that the company violated state consumer protections laws relating to unlawful leasing practices and deceptive marketing. According to the complaint,  Rent-A Center overcharged consumers by inflating the cash price in its Preferred Lease contract by 15% over the true retail price and also misleading consumers about the most fundamental aspects of the Preferred Lease product, such as the right to return merchandise at any time with no penalty. Rent-A-Center must pay $13.5 million in restitution, $2 million in civil penalties, and injunctive relief.

Iowa

  • Iowa Attorney General Tom Miller announced the filing of a motion in connection with a 1998 Master Settlement Agreement, which required tobacco manufacturers to pay billions to participating states in exchange for states agreeing not to sue for health-related damages to citizens. The motion alleges that the companies have withheld a portion of their annual payments to Iowa in bad faith and “through a scheme of false claims and feigned ignorance.” 

Kentucky

  • Kentucky Attorney General Daniel Cameron activated the price gouging hotline and online reporting portal in response to severe flooding in the Eastern region of the Commonwealth. Suspected price gouging can be reported to the Attorney General’s Office by phone or online.

Massachusetts

  • Massachusetts Attorney General Maura Healey announced that the CEO and President, David G. Pietro, of DGP-Miles Insurance Agency pleaded guilty in connection with an embezzlement scheme that allegedly left client companies uninsured. The state alleged that Pietro, a licensed insurance producer and broker, collected insurance premiums from commercial clients, but repeatedly failed to remit those premium payments to his clients’ insurance carriers. Instead, Pietro allegedly used the money for his own business and personal expenses. Following the guilty pleas, the Court sentenced Pietro to two years of probation, ordered him to perform 100 hours of community service, and ordered him to pay restitution to the victims in an amount to be determined. The Court also ordered DGP to surrender its business entity insurance license, effectively barring the company from continuing to operate as an insurance agency or producer.

Michigan

  • Michigan Attorney General Dana Nessel announced that her office is launching a new complaint system to help protect vulnerable adults. The complaint system is accessed directly through the Department’s Health Care Fraud Division’s website and it allows nursing facility administrators to report suspicious activity to the Department.

Minnesota

  • Minnesota Attorney General Keith Ellison announced a settlement with an ADT authorized distributor, Safe Haven Security Services, resolving allegations that the company engaged in deception and misrepresentation. The investigation commenced when a whistleblower reported that the Safe Haven training manual instructed salespeople to: (1) introduce themselves as being “from ADT;” (2) falsely tell consumers that the salespeople did not work on commission; and (3) deceptively imply that a realtor or another trusted person at the consumer’s recent real estate closing should have told the homeowner that the salesperson would be coming to their home. The settlement requires Safe Haven to pay $125,000 to the State of Minnesota general fund.

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 50 attorneys general formed the Anti-Robocall Litigation Task Force, which will investigate scammers operating outside of the United States. With the goal of cutting down illegal robocalls, the task force has already issued 20 investigative demands to 20 gateway providers and other entities that are allegedly responsible for a majority of foreign robocall traffic.
  • A coalition of 39 attorneys general sent a letter to the Federal Trade Commission, urging the agency to repeal telemarketing exemptions and add measures to protect consumers from scams and unwanted calls. The letter asks for a requirement that negative option sellers and telemarketers provide cancelation options and keep records of consumer consent for “negative option offers.”
  • A coalition of 17 attorneys general called on the Federal Trade Commission to strengthen and update its guidance on digital advertising disclosures. In particular, it recommends improvements to address the emergence of deceptive design tactics known as “dark patterns” in the online and digital marketplace.
  • A coalition of 43 attorneys general urged the Federal Trade Commission to increase obligations on telemarketers by requiring them to keep additional records about their activities so that law enforcement can hold them accountable if they fail to comply with the law.
  • A coalition of 10 state attorneys general submitted a comment in support of the USDA’s proposed rule, Transparency in Poultry Grower Contracting and Tournaments, to increase transparency and reduce the information imbalance between farmers and processors in the poultry industry, which would make it easier for small poultry farmers to compete for fair pricing terms from large poultry processors.  

Arizona

  • Arizona Attorney General Mark Brnovich announced that his office has obtained a consent judgment against the Center for COVID Control, LLC, its owner Aleya Siyaj, and her husband Akbar Syed. The defendants advertised that consumers would receive RT-PCR test results within 48 hours and rapid antigen test results within 15 minutes. However, many Arizona consumers did not receive results within this timeframe, while some never received results and others received inconclusive results.

District of Columbia

  • D.C. Attorney General Karl Racine publicized that he joined AARP D.C. State Director Louis Davis, Jr. and more than a hundred D.C. residents for a conversation about combatting the exploitation of older District residents, and how to support them as they face financial abuse and scams. AG Racine also noted some of the office’s initiatives and programs dedicated to protecting D.C. Elders and Vulnerable Adults.

Florida

  • Florida Attorney General Ashley Moody, as part of the Summer Scam Series, highlighted seven common summer schemes: vacation rental scams, free wi-fi scams, front-desk and fake-menu scams, online “summer deals” scams, storm-preparation scams, low-cost moving scams, and summer-employment scams.

Georgia

  • Georgia Attorney General Chris Carr announced that Borin Khoun has pleaded guilty to multiple counts of Theft by Taking relating to his involvement in cyber fraud scams targeting older adults. Attorney General Carr recognizes this plea as the direct result of public reporting tips and the efforts of the Cyber Fraud Task Force.

Indiana

  • Indiana Attorney General Todd Rokita finalized a $2 million settlement with ImmediaDent of Indiana P.C., a chain of dental clinics that closed in March of 2020. The entirety of the settlement will be paid in refunds to more than 22,000 Hoosiers who, according to the state’s allegations, paid for treatments they never received.

Maryland

  • Maryland Attorney General Brian E. Frosh publicized that his Consumer Protection Division has reached a settlement with online puppy retailer Maryland Puppies Online, LLC and the company’s owners, Sara and Nathan Bazler, after previously alleging that they continued to sell puppies after the No More Puppy Mills Act banned such sales in January 2020. The settlement provides restitution to Maryland consumers, imposes civil penalties, and bans the company from selling dogs in Maryland.

Ohio

  • Ohio Attorney General Dave Yost sued the owners of a garage door company alleging that they accepted nearly $182,000 in down payments from consumers but provided no doors or other service. The lawsuit, filed recently in Cuyahoga County Common Pleas Court, contends that Matthew Petroff, Joshua Robertson and Thomas DiNardi, as operators of CLE Door Co., violated both the Ohio Consumer Sales Practices Act and Ohio Home Solicitation Sales Act.

Pennsylvania

  • Alongside United States Attorney Cindy K. Chung, Pennsylvania Attorney General Josh Shapiro announced that five individuals and two for-profit skilled nursing facilities in Southwestern Pennsylvania have been indicted by a federal grand jury in Pittsburgh on charges of conspiracy to defraud the United States and related health care fraud charges

Tennessee

  • Tennessee Attorney General Herbert H. Slatery III filed a lawsuit against Walgreens in Knox County Circuit Court for violations of the Tennessee Consumer Protection Act and Tennessee’s public nuisance statute, and for creating a common law public nuisance through its unlawful sale and distribution of opioids. The complaint alleges that Walgreens, which has one of the largest market shares in Tennessee, had unique and superior knowledge of the volume of opioids flowing through its stores because of its dual role in the marketplace.

Vermont

  • The Vermont Attorney General’s Office announced a settlement with heating woodchip supplier Limlaw Pulpwood Inc. and its related businesses for violating the Vermont Consumer Protection Act by falsifying the weight of its woodchip loads. The settlement requires Limlaw to reform its business practices, pay a penalty of $100,000 to the State of Vermont, and provide $1,000 restitution credits to approximately 30 Vermont consumers.

Washington

  • Washington Attorney General Bob Ferguson announced a court order that will require Chuck’s Towing, a Clark County towing company, to pay three service members for illegally selling their cars at auction and implement specific policies. This case is part of Attorney General Ferguson’s Military & Veterans Initiative, through which he is working to reform Washington’s towing industry to ensure that tow companies comply with legal protections for active duty military.
  • Attorney General Ferguson also publicized that he expanded his lawsuit against 14 Providence-affiliated hospitals, including five Swedish hospitals, by adding two collection agencies that worked for the hospitals. The Attorney General’s underlying lawsuit stems from Providence’s charity care and collections practices impacting tens of thousands of patients and hundreds of millions of dollars in medical debt.

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 18 attorneys general, led by New York Attorney General James and the Federal Trade Commission, announced a settlement recovering $34.2 million for more than 46,000 servicemembers and veterans who were defrauded by Harris Jewelry. The company used predatory lending contracts and deceptive marketing tactics against active-duty servicemembers, falsely claiming that participating in the company’s financing program would improve servicemembers’ credit scores. Further, Harris Jewelry allegedly misrepresented the terms of purchase protection plans, failed to provide written disclosures and authorization requirements, and significantly overpriced poor quality jewelry. Harris Jewelry is required to provide refunds, stop collecting debt, and correct bad credit scores.
  • A coalition of 7 attorneys general, led by Acting New Jersey Attorney General Platkin, announced a settlement with Wawa Inc. recovering $8 million. The settlement resolves an investigation by these states into a data breach that compromised approximately 34 million payment cards used by consumers for Wawa products. The breach occurred between April 18, 2019 and December 12, 2019 and affected stores in Pennsylvania, Florida, Delaware, Maryland, Virginia, and the District of Columbia. This is the third largest attorneys general credit card breach settlement (behind breaches at Target and Home Depot).

California

  • California Attorney General Bonta issued an alert reminding Californians that price gouging during a state of emergency is illegal under Penal Code Section 396. This alert follows California Governor Newsom’s declaration of a state of emergency for Mariposa County due to the Oak Fire, which has destroyed homes, threatened infrastructure, and forced the evacuation of thousands of residents.

Colorado

  • Colorado Attorney General Weiser announced a settlement requiring Savory Spice Shop to pay $30,000 for failure to safeguard payment card information of almost 14,000 Coloradan customers. Savory Spice Shop was the victim of a data breach at an unknown time between April 2018 and September 2020 that allowed the attacker to skim payment card information. Upon discovering the data breach, Savory Spice Shop failed to notify customers impacted by the breach for nine months and failed to implement recommended security measure to stop future breaches.

Connecticut

  • Connecticut Attorney General Tong announced Jaguar Land Rover of North America will pay $26,500 for the company’s failure to comply with Connecticut’s Automobile Warranty statute, commonly called the Lemon Law. The statue provides owners of defective vehicles under 2 years old or with fewer than 24,000 miles by providing a low-cost arbitration process to resolve disputes. This is the first lawsuit filed under the 2021 amended Lemon Law, which allows the Department of Consumer Protection to levy a fine of up to $1,000 per day against a manufacturer that fails to comply with an arbitrator’s decision.  

 Illinois

  • Illinois Attorney General Raoul announced the release of informational guides and reporting templates that provide instructions to private education lenders to help them comply with the annual reporting requirements of the Know Before You Owe Private Education Loan Act. The Act, signed into law on August 26, 2021, provides potential student loan borrowers with information about federal financial assistance eligibility and requires lenders who issue private student loans to report information about their lending activity annually to the Attorney General’s office. The reporting deadline for lenders is November 1, 2022.

Kansas

  • Kansas Attorney General Schmidt announced Evergy Kansas Central, a subsidiary of the state’s largest electric utility, agreed to a consent judgment to pay $500,000 to the State of Kansas for alleged violations of the Kansas Consumer Protection Act. The consent judgment is related to interior and exterior electrical home warranties offered via the affiliated HomeServe USA from September 2014 through December 2019. The attorney general investigated electrical home warranties that failed to provide a material benefit to consumers and made material misrepresentations.

Massachusetts

  • Massachusetts Attorney General Healey announced a settlement requiring TradeSource, a Rhode Island-based job placement service company, to pay $230,000 in penalties for failure to implement proper security programs necessary to protect personal information following a data breach impacting more than 3,000 Massachusetts residents. The Attorney General alleged that TradeSource violated Massachusetts data privacy laws by failing to have a written information security program prior to the data breach. The company must comply with the Massachusetts data privacy law moving forward.

New Jersey

  • New Jersey Acting Attorney General Platkin issued cease and desist warning letters to a combination of service, retail and restaurant operators in New Jersey alerting merchants of their duty to disclose surcharges for using credit, debit or pre-paid cards. The Attorney General’s Office received multiple complaints in recent months prompting investigation and eventually the issuance of 14 warning letters. The New Jersey Consumer Fraud Act does not prohibit card surcharges, but does require an establishment to conspicuously display a notice about the surcharge near the point of sale.
  • New Jersey Acting Attorney General Platkin announced a $1.9 million judgment against a New Jersey family that defrauded financially struggling homeowners through the sale of sham mortgage adjustment services, providing no meaningful debt relief to homeowners. The Vanderpoel family used various corporate entities including Financial Services For America, Financial Processing Services, LLC, Tri-State Financial Relief, LLC, and Mortgage Help and Loan Audits of America, LLC. The summary judgment order permanently shuts down the sham companies and permanently bars the family from performing any services involving loan modification, debt adjustment, and mortgage compliance in New Jersey.
  • New Jersey Acting Attorney General Platkin announced that the New Jersey Board of Pharmacy has temporarily suspended the license and shut down the pharmacy, AllCare Pharmacy, which was operated by Christina Bekhit, a Hudson county pharmacist arrested on charges of selling falsified Covid-19 vaccination cards and fraudulent reporting to the state-managed vaccination registry. Bekhit faces multiple criminal charges.
  • New Jersey Acting Attorney General Platkin announced the creation of the Statewide Affirmative Firearms Enforcement (SAFE) Office. The SAFE Office is the first of its kind in the nation and has a mandate to bring civil enforcement actions against firearm companies for violations of the law that harm the health and safety of New Jersey residents. New Jersey recently enacted firearms public nuisance legislation (P.L.2022, c.56), signed by New Jersey Governor Murphy on July 5, 2022, which authorizes the Attorney General to bring lawsuits against gun industry members that knowingly or recklessly contribute to a public nuisance in New Jersey through unlawful or unreasonable conduct, or that fail to maintain reasonable controls, relating to their sale, manufacturing, distribution, importing, or marketing of gun-related products.

 New York

  • New York Attorney General James announced an agreement that AmTrust Title Insurance Company and First Nationwide Title Agency (collectively “Amtrust”) will terminate any existing no-poach agreements with their competitors, pay the state $1.25 million, and cooperate with the Attorney General’s ongoing investigation of the industry. The Attorney General’s investigation concluded that AmTrust entered into no-poach agreements with other title insurance companies to stifle competition for employees. 

Pennsylvania

  • Pennsylvania Attorney General Shapiro announced legal actions against two used car companies, Carspot and JK Motor Cars, for violating state consumer protection laws. An investigation against Carspot, opened in August of 2020, found that Carspot had engaged in a pattern of deceptive and unfair business practices, following a previously filed Agreement of Voluntary Compliance against the company in 2016. The office of the Attorney General just filed suit against JK Motor Cars for similar deceptive and unfair business practices. Both businesses misrepresented the existence and coverage of warranties sold with cars.

West Virginia

  • West Virginia Attorney General Morrisey filed suit against an unlicensed Raleigh county plumbing contractor, Jerry Smales, for defrauding consumers of approximately $6,000 without completing the agreed upon plumbing projects. The lawsuit seek restitution for the consumers and to block Smales from further future contracting work in West Virginia.

Washington

  • Washington Attorney General Ferguson highlighted a recent independent economic study titled “The Effect of No-poaching Restrictions on Worker Earnings in Franchised Industries” conducted by four economists. The study evaluated the impact of Attorney General Ferguson’s No-Poach Initiative and concluded that it directly increased wages for low-income franchise workers nationwide. Attorney General Ferguson’s No-Poach Initiative was a two-year project that ended the use of illegal no-poach clauses in franchise agreements at all chains that operate in Washington, a total of 237 companies.

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 24 state attorneys general filed a supplemental letter concerning a U.S. Securities and Exchange Commission initiative that requires companies to make disclosures related to climate change and greenhouse gas emissions. The coalition contends that the West Virginia v. Environmental Protection Agency Supreme Court decision confirms that only Congress has the ability to decide such issues.
  • A multistate coalition of attorneys general submitted a comment letter supporting the U.S. Environmental Protection Agency’s (EPA) proposed regulations to ban the use of and protect consumers from exposure to asbestos. The proposed regulations would prohibit the manufacture, processing, import, distribution or use of chrysotile asbestos in certain products. The coalition supports this and urges the EPA to go further by banning other forms of the substance and avoiding promoting the substitution of PFAS for asbestos.
  • A coalition of 12 state attorneys general filed a brief in the United States Court of Appeals for the Fifth Circuit, asking the court to strike down the U.S. Department of Energy’s 2022 Regulation entitled “Energy Conservation Program: Product Classes for Residential Dishwashers, Residential Clothes Washers, and Consumer Clothes Dryers.” The Regulation replaced a 2020 rule that governed newer washing machines and dishwashers with shorter wash times, which the coalition maintains was more appropriate.
  • A coalition of 10 state attorneys general urged Congress to respect states’ roles in enforcing and providing for consumer privacy laws while advancing federal legislation related to privacy protections. Specifically, the coalition is seeking to enact laws that do not preempt state legislation that addresses changing technology.

Connecticut

  • Connecticut Attorney General Tong announced a $1.8 million settlement with Eversource, resolving allegations that the company engaged in false and deceptive high-pressure tactics to enlist consumers to convert to natural gas. The allegations centered around a notice Eversource circulated, which stated that consumers would no longer be able to convert to natural gas during a paving moratorium. These notices were sent to towns where no such moratoria exists.

District of Columbia

  • Washington D.C. Attorney General Racine filed a lawsuit against janitorial companies Jan-Pro Franchising International and Jan-Pro of Washington, D.C. for allegedly operating a franchising scheme that misclassified janitorial employees as independent contractors. Attorney General Racine is alleging that this conduct resulted in the employees being illegally denied wages and paid sick leave. The lawsuit seeks damages, injunctive relief, and statutory penalties.

Illinois

  • Illinois Attorney General Raoul announced an interim consent order with Sugar Camp Energy LLC over its alleged release of PFAS “forever chemicals” in firefighting foams from a coal mine in Southern Illinois. The order requires Sugar Camp Energy to test its facility’s ponds for PFAS and install new treatment systems to remove PFAS from wastewater. It also restricts the transfer or discharge of water from ponds that are contaminated with PFAS.

Massachusetts

  • Massachusetts Attorney General Healey announced that diagnostic laboratory company BioReference Health, LLC and its corporate parent OPKO Health, Inc. will pay $10 million to Massachusetts and Connecticut, as well as the federal government to resolve a whistleblower’s allegations of self-referrals and the filing of false claims that were submitted to Medicare, MassHealth and Connecticut Medicaid.

Michigan

  • Michigan Attorney General Nessel announced that she is relaunching a power outage feedback form, which consumers can use to provide feedback to the Department of the Attorney General after a power outage. AG Nessel will use the information gathered from the feedback forms to advocate Michigan residents before the Michigan Public Service Commission, stating “Summertime in Michigan should not correlate with expected and prolonged outages. Residents deserve reliable service and speedy restoration when outages occur.”

New York

  • New York Attorney General James announced a $500,000 settlement with Manhattan bar Sweet and Vicious and its owner after an investigation found that it maintained a hostile and discriminatory workplace. The agreement also requires that the business revise their anti-discrimination and harassment training materials and to display and distribute notices about anti-discrimination and harassment rights and responsibilities.
  • New York Attorney General James filed a motion for a preliminary injunction against six gun distributors who were selling and bringing parts of illegal ghost guns into New York. Attorney General James is seeking a court order that requires the businesses to stop supplying unfinished frames or receivers to any entity or individual with a New York address.

Washington

  • Washington Attorney General Ferguson announced that under a consent decree, staffing company Tradesmen International LLC must pay $287,100 in restitution and end its existing non-compete agreements that restrict employee job mobility. The company must also notify employees who began working there after January 1, 2020, when the non-compete ban went into effect, that the agreements are no longer enforceable, as well as to notify those who are still subject to these agreements.

West Virginia

  • West Virginia Attorney General Morrisey issued an alert warning against price gouging after reports of major flooding in southern areas of the state. The state’s price gouging law went into effect after a state of emergency was declared in McDowell County.