Multistate Actions

The bipartisan opioids executive committee of 12 attorneys general announced $6.6 billion in agreements in principle with opioid makers Allergan and Teva. Teva purchased Allergan’s opioid products and generic portfolio in 2016. The attorneys general stated that both settlements remain contingent on resolution of key issues involving settlement structure and changes in business practices. Under the proposed agreements, Teva would provide up to $4.25 billion to participating states and local governments and Allergan would provide up to $2.37 billion. Teva will also provide up to $1.2 billion in generic naloxone over a 10-year period or $240 million of cash in lieu of product, at each state’s election. Naloxone is used to counteract overdoses.

Led by New York Attorney General Letitia James, a bipartisan coalition of 18 states and the Federal Trade Commission (FTC) recovered $34.2 million for thousands of U.S. servicemembers allegedly defrauded by Harris Jewelry (Harris). The company allegedly used deceptive marketing tactics to lure active-duty servicemembers into their financing program, falsely claiming that investing in this program would improve servicemembers’ credit scores. Instead, servicemembers were allegedly tricked into obtaining high-interest loans on overpriced, poor-quality jewelry that saddled them with thousands of dollars of debt and worsened their credit. Under the settlement, Harris must stop collecting millions of dollars of debt, dissolve all its businesses, and refund tens of thousands of servicemembers for warranties they were allegedly tricked into purchasing. The agreement also requires Harris Jewelry to pay $1 million to the states.

Led by Arizona Attorney General Mark Brnovich, 20 attorneys general urged the U.S. Supreme Court to review a cy pres only settlement in the Google street car class action litigation. In an amicus brief, the attorneys general contend the $8.5 million settlement was not “fair, reasonable, and adequate” as required by Federal Rule of Civil Procedure 23(e). The settlement approved by the lower court and Ninth Circuit allocated $3.75 million to attorneys’ fees and the remainder, for the benefit of the class, to non-profit organizations, including 2 advocacy organizations and 4 universities.

Led by Arizona Attorney General Mark Brnovich, 12 attorneys general filed suit in the Fifth Circuit Court of Appeals against the United States Department of Energy (DOE) in order to vacate DOE’s 2022 rulemaking called “Energy Conservation Program: Product Classes for Residential Dishwashers, Residential Clothes Washers, and Consumer Clothes Dryers.” The challenged rule rolls back regulations from 2020 that created a new class for washing machines with shorter wash times and dishwashers with cycle times of 60 minutes or less. The states’ brief alleges the 2022 rule is arbitrary and capricious, fails to adequately explain the change in policy, doesn’t sufficiently consider reliance interests, and does not supply enough rationale for the DOE’s refusal to create specific standards for performance classes.

Led by California Attorney General Rob Bonta, 10 attorneys general wrote Congressional leaders calling for federal privacy protections that maintain strong state oversight. The letter calls on Congress to create a baseline of consumer privacy laws that do not preempt states’ ability to respond with legislation to address changing technology and data protection practices.

Delaware Attorney General Kathy Jennings, Acting New Jersey Attorney General Matthew J. Platkin, and Pennsylvania Attorney General Josh Shapiro, working with the U.S. Department of Justice and Consumer Financial Protection Bureau, obtained a $20 million settlement with a former top mortgage lender over allegations of redlining in the greater Philadelphia region. The settlement with Trident Mortgage Company requires the company to provide individual subsidies of up to $10,000 in support of new mortgages for owner-occupied homes in majority-minority neighborhoods to qualified applicants. Trident ceased operations in December 2020.

Led by Acting New Jersey Attorney General Matthew J. Platkin and Pennsylvania Attorney General Josh Shapiro, a bipartisan group of 7 attorneys general secured $8 million as a result of a multistate action following a Wawa data breach. The announcement comes after an investigation into a December 2019 data breach in which hackers gained access to the company’s computer network and deployed malware on point-of-sale terminals, potentially compromising up to 34 million payment cards. In addition to the $8 million payment to the states, Wawa has agreed to strengthen its information security program and safeguard the personal information of consumers.

Individual Attorney General Actions

Connecticut Attorney General William Tong announced a $1.8 million settlement with Eversource over unfair and deceptive natural gas marketing allegations. Eversource allegedly mailed consumers notices and left door hangers falsely stating that natural gas service would not be available for several years after scheduled road paving occurred. The company was previously fined $1.8 million by the Connecticut Public Utilities Regulatory Authority.

Florida Attorney General Ashley Moody secured the commitment of more than $1 million in consumer relief for victims of an allegedly predatory HVAC company. Bruno LLC, operating as Bruno Total Home Performance and Bruno Air Conditioning, allegedly upsold unnecessary HVAC systems and set up financing agreements with terms and liens on homes that consumers did not understand. In addition to financial relief in the form of cash, lien releases, and agreeing not to seek money allegedly owed by consumers, the defendants are banned from conducting HVAC business in Florida. Attorney General Moody also announced the arrest of a man for allegedly operating a tech support scam and stealing thousands of dollars from seniors. Maninder Singh Bawa allegedly targeted victims by sending pop-up computer notifications claiming the victims’ devices were locked and then provided a number to call to have the devices unlocked. Over the phone, Bawa allegedly tricked each victim into sending thousands of dollars in fees as payment for unlocking the devices.

Guam Attorney General Leevin Camacho is seeking a temporary restraining order to halt Pacific Tiny Homes from selling container homes without a business license and without a written contract. The complaint also alleges the company failed to complete the homes in a reasonable timeframe.

Kansas Attorney General Derek Schmidt obtained a $500,000 settlement from Evergy Kansas Central Inc. in connection with home warranty marketing. Evergy Kansas Central, a subsidiary of the state’s largest electric utility, in affiliation with HomeServe USA, sponsored and approved electrical home warranties that allegedly failed to provide a material benefit to consumers and made material misrepresentations.

Kentucky Attorney General Daniel Cameron has launched the “Be a Fraud Fighter” campaign. The initiative increases awareness of common scams and encourages Kentuckians to report scams early so the attorney general’s office can, when possible, reduce financial losses for consumers. Funded by the U.S. Department of Justice’s Coronavirus Emergency Supplemental Funding grant, the campaign consists of public awareness messages on radio, digital, and social media platforms. The messages warn of common scams, share tips to avoid them, and encourage Kentuckians to report scams to the attorney general’s office by visiting ag.ky.gov/scams.

Maryland Attorney General Brian Frosh announced the guilty plea by a Monrovian national charged with defrauding romantic partners. Joseph Carlini pleaded guilty to theft and violation of a securities order in three cases involving his former romantic partners. Carlini was sentenced to 38 years in prison with all but 10 years suspended, followed by five years of supervised probation upon release. Carlini was also ordered to pay restitution in the amount of $191,300.

New Hampshire Attorney General John M. Formella filed a civil lawsuit against several retail pharmacy chains following an investigation into the alleged overdistribution and dispensing of prescription opioids. The following pharmacies and chains are named in the suit: CVS Health Corporation, CVS Indiana L.L.C., CVS Pharmacy, Inc., NeighborCare of New Hampshire, LLC, Rite Aid Corporation, Rite Aid Hdqtrs. Corp., Rite Aid of Maryland, Inc., d/b/a Rite Aid Mid-Atlantic Customer Support Center, Inc., Maxi Drug North, Inc., Walgreens Boots Alliance, Inc., and Walgreen Co.

Acting New Jersey Attorney General Matthew J. Platkin and the New Jersey Department of Banking and Insurance obtained a $1.9 million judgment against a sham mortgage debt adjustment service company and individual owners who allegedly defrauded financially struggling homeowners through the sale of services that provided no meaningful debt relief. The court’s judgment shuts the company down, imposes $1.88 million in penalties, awards restitution, appoints a receiver, and discharges nearly $100,00 in surety bonds to the state.

New York Attorney General Letitia James recovered more than $122,000 for more than 690 consumers who paid for, but did not receive, expedited COVID-19 test results. Clear 19 Rapid Testing LLC refunded hundreds of consumers who received their results more than two hours after the promised 24-hour timeframe. The company also amended their advertising to accurately describe turnaround times.

Ohio Attorney General Dave Yost filed a sweeping robocall enforcement action naming 22 defendants, seeking to halt a massive scheme allegedly responsible for bombarding U.S. consumers with billions of illegal calls, many of them centered on allegedly fraudulent car warranties. In a separate development, the Federal Communications Commission (FCC) issued cease and desist letters to some of the same targets in the Ohio case. The Ohio complaint names 22 defendants led by Roy Cox Jr., Aaron Michael Jones, and Stacey Yim, all of California. Cox and Jones have previously been sued by the Federal Trade Commission for similar robocall practices.

Rhode Island Attorney General Peter F. Neronha filed lawsuits against five landlords alleging noncompliance with state lead poisoning prevention laws. All of the lawsuits involve properties where allegedly significant lead hazards were found and a child was determined to have lead poisoning. As alleged in the complaints, landlords Kathleen Decosta, Francisco Pires, Fatima C. Araujo, Hoa Thi Trinh, and Dionicia Gonzalez, have – to date – failed to remediate lead violations identified by the Rhode Island Department of Health, even though children who resided at the properties were lead poisoned. Neronha is seeking a court order to halt further harmful conduct, remediate lead hazards, provide adequate alternative housing during remediation, appoint a receiver if the defendants are unwilling to correct the lead violations, and impose civil penalties of $5,000 per day the conduct continues.

Washington Attorney General Bob Ferguson announced a settlement with Alpha Omicron Pi, a national sorority, requiring the refund or waiver of housing fees it charged dozens of University of Washington students during the COVID-19 pandemic. The fees were charged even though COVID-19 prevented the students from accessing sorority housing — a violation of the governor’s emergency eviction moratorium.

Wisconsin Attorney General Josh Kaul and the Wisconsin Department of Agriculture, Trade and Consumer Protection settled with Frontier Communications to address concerns with the company’s advertising of internet access speeds and landline telephone service. Under the agreement, Frontier has committed $15 million to improve its infrastructure in Wisconsin over the next four years, is required to improve disclosures regarding internet speed, and will pay the state $90,000. In addition, customers who did not receive the advertised speed, may opt out of service.

Charities

Minnesota Attorney General Keith Ellison negotiated an extension to a regulatory agreement with all nonprofit hospitals in Minnesota to protect patients from unfair and abusive billing and collection practices. Under the agreement, hospitals must abide by their obligations as charitable organizations to meet certain standards of conduct imposed by their charitable missions. The agreement requires hospitals to develop policies for assessing patients’ ability to pay, and to provide free healthcare, known as “charity care,” to qualifying patients. The agreement covers all 128 nonprofit hospitals in Minnesota — and for the first time, covers one of Minnesota’s two for-profit hospital systems, PrairieCare.

Veteran and Servicemember News

Attorneys general around the country recognized national military consumer protection month and issued warnings about scams targeting the military and veteran communities. The attorneys general also reminded servicemembers and the business community of special protections servicemembers have under state and federal laws. Among those issuing releases were California Attorney General Rob Bonta, Georgia Attorney General Chris Carr, Florida Attorney General Ashley Moody, and Kansas Attorney General Derek Schmidt.

The CFPB and Department of Justice cautioned auto finance companies about protections for servicemembers and military families under the Servicemembers Civil Relief Act (SCRA). The letter is designed to ensure that auto finance companies are aware of key provisions within the SCRA, addressing wrongful vehicle repossessions, failing to terminate vehicle leases without penalty, and violating auto loan interest rate limits.

Other articles in this edition include:

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