The $26 billion national opioid agreement was confirmed by the nation’s three major pharmaceutical distributors – Cardinal, McKesson, and AmerisourceBergen – and Johnson & Johnson. Fifty-two states and territories have signed onto the agreement. Following successful state sign-on and subdivision sign-on periods, the defendants have committed to the deal and will start releasing funds to a national administrator on April 2, 2022. Money will start flowing to state and local governments in the second quarter of 2022. The historic agreement marks the culmination of three years of negotiations to resolve more than 4,000 claims of state and local governments across the country. It is the second largest multistate agreement in U.S. history, only exceeded by the Tobacco Master Settlement Agreement.
Led by Florida Attorney General Ashley Moody, Iowa Attorney General Tom Miller, Mississippi Attorney General Lynn Fitch, Pennsylvania Attorney General Josh Shapiro, and Tennessee Attorney General Herbert H. Slatery III, 49 attorneys general urged the Federal Trade Commission (FTC) to adopt a national rule to target impersonation scams. The letter to FTC Chair Lina Khan, in response to the FTC’s Advance Notice of Proposed Rulemaking and Request for Public Comment, stated that a national rule addressing the multitude of impostor scams plaguing consumers “would assist attorneys general and their partners in reducing consumer harm, maximizing consumer benefits, and holding bad actors to account.”
Individual Attorney General Actions
Alaska Attorney General Treg Taylor charged a business with unlawfully labeling products imported from the Philippines as being made in Alaska. The complaint alleges that B. Merry Studio, Inc. ships raw materials, such as antlers and bone, to the Philippines for manufacturing into knives, carvings, ornaments, and other products. Finished and nearly finished products are shipped back to the company with “Made in the Philippines” stickers affixed to them, which the company allegedly removed and replaced with labels reading “B. Merry, Alaskan Made.” The complaint alleges various other misrepresentations and seeks civil penalties and an injunction.
Arkansas Attorney General Leslie Rutledge obtained relief for consumers allegedly defrauded by a gunsmith who failed to complete repairs for customers, after receiving pre-payments. Jayson Cotter, doing business as Grade Firearms, was found by the court to have harmed 12 Arkansas consumers and ordered to pay $28,884 in restitution to consumers and $150,000 in civil penalties. Attorney General Rutledge also sued a residential swimming pool contractor for failing to complete and provide promised services. The complaint alleges Dewayne Boswell, Austin Logan, and Ultimate Builders, LLC advertised and accepted money from 17 Arkansans to install in-ground swimming pools, which they failed to complete, costing homeowners $415,200.
California Attorney General Rob Bonta announced a settlement with Perrigo Company and two of its subsidiaries to lower lead levels in its baby formula. The settlement sets maximum lead levels of 5-7 parts per billion for most of the products, levels much lower than applicable federal guidance requires.
Colorado Attorney General Phil Weiser announced that a Colorado mask company will offer refunds to Coloradans who supported its crowdfunding campaigns to develop a product that would eliminate 99% of pathogens to protect customers during the COVID-19 pandemic. The company, Measure, Inc., initially offered a 100% satisfaction guarantee but failed to honor its satisfaction guarantee when customers later requested refunds. The settlement requires the company to pay the state $100,000 and notify Colorado backers regarding their eligibility to claim a refund.
District of Columbia Attorney General Karl Racine announced that Elevate Credit, Inc. (Elevate), an online lender, will pay at least $3.3 million to refund over 2,500 District consumers who were allegedly misleadingly marketed high-cost loans and lines of credit. Elevate will waive over $300,000 in interest owed by those consumers, and pay $450,000 to the district. Elevate will also be required to stop charging rates above the district’s legal cap of 24% and to cease deceptive and misleading business practices. Attorney General Racine also filed two separate lawsuits against allegedly neglectful landlords to protect district residents from displacement and remedy hazardous housing conditions. One lawsuit alleges that a complex’s owners have actively neglected the property in an effort to force residents out of their homes to make way for redevelopment. The other suit alleges that the owners and managers of another apartment building have allowed conditions to deteriorate dramatically and discriminate against physically disabled tenants. In both cases, Racine is seeking court orders to ensure building owners make necessary repairs, restitution for harmed tenants, and penalties for violating district law.
Florida Attorney General Ashley Moody released a new resource to help Floridians avoid “crypto scams.” Scams at a Glance: Cryptocurrency Scams includes information about cryptocurrencies and the volatile crypto market. The brochure also contains tips for avoiding general scams related to cryptocurrency trading.
Georgia Attorney General Chris Carr settled with Rent-A-Center, resolving allegations that the company engaged in deceptive sales and marketing tactics and violated the Fair Debt Collection Practices Act. The company agreed to pay $145,590 in civil penalties, and to bring its advertising, sales, and marketing practices into full compliance with the Georgia Fair Business Practices Act and the Georgia Lease-purchase Agreement Act.
Idaho Attorney General Lawrence Wasden announced a judgment against Eli B. Karabell, a purported political consultant from Missouri, who sent a $480 million invoice to an Idaho state senator and then turned the matter over to collection when the allegedly fraudulent invoice was not paid. The invoice was for services that Karabell never provided and were never requested. The judgment awarded the Office of Attorney General $10,780 in civil penalties and attorney’s fees and permanently prohibits Karabell from doing business in Idaho.
Indiana Attorney General Todd Rokita has opened an investigation concerning a hack of donor information from the GiveSendGo website which later became publicly available as a result of the hack. Donors contributed funds to support the “Freedom Convoy” protest in Canada. A Canadian hacker claimed responsibility for the incident and allegedly revealed the information to harass donors.
Iowa Attorney General Tom Miller reached a settlement with a Florida operation that sent allegedly deceptive mailers that appeared to be from government agencies in an attempt to sell unnecessary documents. Centurion Filing Services and owner Dean Marshlack agreed to provide $78,900 in refunds to more than 1,200 Iowa business owners and charity operators.
Massachusetts Attorney General Maura Healey obtained a $5.56 million settlement from subprime auto lender Santander. The settlement resolves allegations that Santander Consumer USA failed to provide consumers legally required post-repossession information about the calculated loan deficiency. The settlement also includes debt relief and credit repair for eligible borrowers.
Michigan Attorney General Dana Nessel filed an action against a Michigan man accused of promoting the sale of blank COVID vaccination cards under a fake Facebook account. In a court filing, the attorney general’s office asked the court to find that defendant Christopher Holland violated the Michigan Consumer Protection Act and enjoin him from selling goods under false pretenses. The action also seeks attorney’s fees and investigative and other costs.
Minnesota Attorney General Keith Ellison filed suit against HavenBrook Homes, one of the largest landlords in Minnesota, for failing to repair rental homes and other legal violations. The lawsuit accuses HavenBrook of systematically misrepresenting its property-repair practices and keeping its properties uninhabitable for tenants, in violation of Minnesota’s consumer protection laws and landlord-tenant law. The suit also accuses the landlord of violating Minnesota law and rules about dangerous lead-paint removal, and for illegally telling tenants they must leave their homes during the COVID-19 pandemic, in violation of an executive order limiting tenancy terminations during the pandemic.
New York Attorney General Letitia James obtained refunds for 450 New Yorkers who were wrongfully charged COVID-19 vaccine administration fees by two pharmacies. The pharmacies allegedly improperly charged consumers a $25 fee early in 2021 although the vaccines were required to be provided to consumers at no charge. In accordance with the agreements, the pharmacies have reimbursed all improperly charged vaccine recipients.
More than 300 people joined an online educational forum presented by Ohio Attorney General Dave Yost’s Elder Abuse Commission aimed at helping older Ohioans avoid financial exploitation, an all-too-common form of elder abuse. The Feb. 23 forum – titled “Responding to Financial Exploitation, Scams and Fraud in Facility Settings” – was part of the commission’s annual “Protecting Older Ohioans” series, presented in partnership with the Ohio Association of Senior Centers, Ohio Association of Area Agencies on Aging, and Ohio Department of Aging.
Pennsylvania Attorney General Josh Shapiro took action against two Pennsylvania auto dealerships for allegedly violating consumer protection laws. Cars R Us Erie and its principal owner Ryan Lariccia allegedly sold 173 cars without a licensed salesperson on staff and misled consumers when it misrepresented extended service contracts to be warranties. An Assurance of Voluntary Compliance requiring payment of $1,000 in civil penalties plus costs resolved that case. Martino Motors and Donald J Martino, Jr. allegedly violated a prior settlement and continued to sell vehicles that are not “roadworthy.” The legal action seeks to permanently ban Mr. Martino and Martino Motors from selling motor vehicles in Pennsylvania, and seeks restitution, civil penalties, cost, and other equitable relief from them.
Texas Attorney General Ken Paxton announced an opioid settlement of $225 million with Teva Pharmaceutical Industries. As part of the settlement, Teva will also provide $75 million worth of the medication Narcan, the lifesaving intervention for opioid overdoses. Attorney General Paxton also announced a lawsuit against Meta (formerly known as Facebook) for capturing and using the biometric data of millions of Texans without properly obtaining their informed consent to do so, in alleged violation of the 2009 Texas Capture or Use of Biometric Identifier Act and the Texas Deceptive Trade Practices Act.
Attorney General Bob Ferguson sued five hospitals and nine health care facilities for allegedly violating Washington’s charity care law that ensures that eligible low-income Washingtonians do not pay out-of-pocket hospital costs. The suit also alleges the defendants aggressively collected money from charity care eligible low-income Washingtonians. Attorney General Ferguson also obtained a stipulated preliminary injunction blocking a COVID testing company from operating in Washington. Washington sued Illinois-based Center for COVID Control alleging the company provided invalid, false, and delayed COVID-19 test results, or sometimes provided no results at all. Under the order, the company agreed to cease operating in Washington.
Other Items of Interest
The No Surprises Billing Act’s implementing regulations were struck down by a federal court in Texas which held that the arbitration framework set up by the U.S. Department of Health and Human Services was contrary to statutory requirements that the arbitrator to consider multiple factors to resolve payment disputes. The court also held that the regulations were promulgated in violation of the Administrative Procedures Act’s notice and comment requirements. The case was filed by the Texas Medical Association and is one of several suits filed by medical service providers seeking to block the regulations implementing the act. The case is Texas Medical Association vs. U.S. Department of Health & Human Services, et al., 6:21-cv-00425-JDK.
Arkansas Attorney General Leslie Rutledge, Ohio Attorney General Dave Yost, and Texas Attorney General Ken Paxton each separately announced investigations into GoFundMe, related to the funding platform’s announcement that it was removing the fundraiser for Freedom Convoy 2022 from the platform and refunding donors or directing the funds to other charities. Following the initial announcement, GoFundMe stated that it would refund all donors rather than attempt to redirect the funds.
Other articles in this edition include: