Multistate Actions

Led by California Attorney General Rob Bonta, Illinois Attorney General Kwame Raoul, Massachusetts Attorney General Maura Healey, and Pennsylvania Attorney General Josh Shapiro, a bipartisan coalition of 39 attorneys general obtained a $1.85 billion settlement with student loan servicer Navient. Under the settlement, Navient will make a total of $95 million in restitution payments of about $260 each to approximately 350,000 harmed consumers nationwide and will cancel nearly $1.7 billion in subprime private student loans owed by nearly 66,000 borrowers nationwide. Navient will also pay $142.5 million to the attorneys general. More information is available at www.NavientAGSettlement.com.

A bipartisan coalition composed of District of Columbia Attorney General Karl Racine, Indiana Attorney General Todd Rokita, Texas Attorney General Ken Paxton, and Washington Attorney General Bob Ferguson sued Google regarding its location tracking practices. The attorneys general each alleged Google used deceptive practices including “dark patterns” to obtain access to consumers’ data location and make it nearly impossible to stop their location from being tracked.

Led by Arkansas Attorney General Leslie Rutledge, North Carolina Attorney General Josh Stein, and Pennsylvania Attorney General Josh Shapiro, a bipartisan coalition of 51 attorneys general urged the Federal Communications Commission (FCC) to stop international scam calls. In their letter, The attorneys general are asking the FCC to require gateway providers to take additional measures to block robocalls and require that foreign telephone companies they partner with ensure calls are made from legitimate numbers.

Led by Connecticut Attorney General William Tong and Ohio Attorney General Dave Yost, a bipartisan coalition of 43 attorneys general urged the U.S. Food and Drug Administration (FDA) to preserve state regulation of over-the-counter hearing aids. In a comment letter submitted in response to an FDA proposal to permit over-the-counter sales, the attorneys general urged clarification of the proposal to avoid unintended consequences including potential preemption of state consumer protection laws.

Minnesota Attorney General Keith Ellison and Washington Attorney General Bob Ferguson each filed a lawsuit against two Illinois-based COVID-19 testing companies — Center for COVID Control, LLC and Doctors Clinical Laboratory, Inc.— that either failed to deliver test results, delivered them far later than advertised, or delivered results that were falsified or inaccurate. The Washington action also named as defendants the alleged owners of the Center for Covid and Control, Akbar Syed and his wife Aleya Siyaj.

A bipartisan coalition of 48 attorneys general along with the U.S. Solicitor General filed an appellate brief continuing the fight to end Facebook’s alleged monopoly. The brief was filed in the U.S. Court of Appeals for the D.C. Circuit. The coalition argues that the district court was wrong to dismiss their case as time-barred and made additional legal and factual errors.

The attorneys general from the five U.S. territories called on Philips Respironics to ensure that their consumers are included in the recent voluntary recall of CPAP and BiPAP respirator products. Recent plans developed by the company, with oversight from the Food and Drug Administration, to replace defective devices included all 50 states, Puerto Rico, and the District of Columbia, but left out American Samoa, Guam, the Northern Mariana Islands, and the Virgin Islands.

Individual Attorney General Actions

Attorneys general across the country continued to advise consumers to beware of phony COVID test scams (California, Florida, Illinois, Maryland, Michigan, New Mexico) and warned testing companies not to misrepresent turnaround times for test results (New York, Colorado) amid increasing cases due to the Omicron variant.

Arkansas Attorney General Leslie Rutledge obtained a judgment against an Arkansas gunsmith for failing to complete repairs. Jayson Cotter, conducting business under the name Investment Grade Firearms, was found to have defrauded 12 Arkansas consumers who paid for repairs that Cotter failed to complete and to whom Cotter failed to return the weapons or refund payments.  The court ordered payment of $28,884 in restitution and $150,000 in civil penalties.

California Attorney General Rob Bonta sued two alleged sham health care sharing ministry companies and their founding family members. Sharity Ministries, Inc. (formerly called Trinity Healthshare, Inc.), a nonprofit corporation that purported to be a health care sharing ministry and Aliera, a for-profit corporation, created, operated, and sold unauthorized health plans and insurance through Sharity/Trinity, collecting hundreds of millions of dollars in monthly premiums from thousands of Californians and others throughout the country. However, rather than paying its members’ healthcare costs, the company allegedly declined claims and retained nearly 84% of its members’ contributions – leaving many crushed by the burden of impossible medical debt.

Colorado Attorney General Phil Weiser urged major online real estate marketplace companies to address the risk of illegal price gouging of rental properties on their platforms in the wake of the Marshall fire that destroyed hundreds of homes in Boulder County. In letters sent to AirBnB, Zillow, Vrbo, and REColorado, the attorney general expresses concern over reports that some landlords excessively raised their prices after so many Coloradans were displaced from their homes after the fire.

Florida Attorney General Ashley Moody announced a $65 million settlement with Endo Health Solutions, Inc., for allegedly deceptively marketing opioid medications by downplaying the associated risk of addiction. Endo also allegedly failed to monitor or report and negligently shipped suspicious orders of opioid medications helping fuel the national opioids crisis. Funds from the settlement will be used to provide resources for mitigation efforts.

Maryland Attorney General Brian E. Frosh announced a settlement with California-based LeaseLock, Inc., resolving allegations that its deposit waiver products violated the Maryland Security Deposit Law. LeaseLock offered, through landlords, a program through which tenants would make monthly payments to their landlords instead of paying security deposits and lacked statutory protections requiring refunds less lawful deductions. The settlement requires LeaseLock to return to consumers the monthly payments landlords collected from Maryland tenants, unless at the conclusion of their tenancies any claims were made with LeaseLock for unpaid rent or damages to the rental premises in excess of ordinary wear and tear.

Massachusetts Attorney General Maura Healey resolved a lawsuit alleging a “lease-to-own” scam that lured low-income Massachusetts consumers into real estate agreements for distressed homes they couldn’t afford. The consent judgment requires payment of $60,000 and prohibits the companies from future operations in Massachusetts. Defendants AngleFund, Inc. and DTH-REO, Inc. allegedly purchased multiple distressed, previously foreclosed properties, and leased them to vulnerable consumers under “lease-to-own” or “contract for deed” arrangements. Consumers were given the option to purchase the property outright later but had little chance of being able to afford ownership of the homes, most of which had sanitary code violations and some of which had been condemned.

Michigan Attorney General Dana Nessel launched an investigation into Eli Lilly (Lilly) and its insulin pricing practices. Nessel also signaled that the state will seek reconsideration of two rulings from the Michigan Supreme Court (MSC) which Lilly is likely to invoke to block the investigation. Those cases, from 1999 and 2007, interpret a statutory exemption in the Michigan’s Consumer Protection Act as applying whenever the general transaction is specifically authorized by law, regardless of whether the specific misconduct alleged is prohibited. A brief filed last year asking MSC to reconsider the cases is available online. The MSC declined to revisit the issue at that time.

New York Attorney General Letitia James announced a $600,000 agreement with vision insurance company EyeMed Vision Care LLC that resolves a 2020 data breach that compromised the personal information of approximately 2.1 million consumers nationwide. The breach occurred when attackers gained access to an EyeMed email account with customers’ Social Security numbers and medical information. The state found that the company had failed to use multi-factor authentication and other standard cybersecurity practices.

North Carolina Attorney General Josh Stein announced three price gouging case settlements. Florida-based Canary Tree Service and water damage repair company Secure Restoration, settled charges related to activity following Hurricane Florence in 2018, while Jack’s In and Out Food Mart settled allegations related to gasoline prices charged following the Colonial Pipeline shutdown last year.

North Carolina Attorney General Josh Stein sued “gateway” telephone service provider Articul8 and its owner for facilitating illegal and fraudulent telemarketing calls and robocalls that targeted millions of people in the U.S and allegedly violated the Telemarketing Sales Rule. Stein’s complaint alleges that the company’s call traffic shows patterns of spoofed and unlawful robocalls perpetrating a variety of scams despite warnings about the calls it was accepting and routing into the U.S.

Washington Attorney General Bob Ferguson announced an agreement with Amazon to resolve the state’s price-fixing investigation. Under a consent decree, Amazon must stop the “Sold by Amazon” program nationwide and pay $2.25 million to the Attorney General’s Office. The “Sold by Amazon” program allowed the online retailer to agree on price with third-party sellers, rather than compete with them. Amazon offered the “Sold by Amazon” program from 2018 through 2020.

Other Items of Interest

Charities

Acting New Jersey Attorney General Andrew J. Bruck announced a lawsuit against a charitable organization, the National Police Relief Association, and several of its board members for allegedly misusing more than $200,000 in charitable donations that were raised primarily to benefit law enforcement officers and their families, and in particular families of officers killed or injured in the line of duty. Instead, the organization made direct payments to the board members and financed their personal expenses, including restaurant outings and vacations to Walt Disney World.

Other articles in this edition include:

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