Multistate Actions
Led by Minnesota Attorney General Keith Ellison, a bipartisan coalition of 35 attorneys general filed an amicus brief in the U.S. Tenth Circuit Court of Appeals supporting Oklahoma’s laws that regulate pharmacy benefit managers (PBMs). Oklahoma’s laws are being challenged, on ERISA preemption grounds, in the latest lawsuit filed by the PBM industry’s national lobbying association, Pharmaceutical Care Management Association. A bipartisan coalition of 46 attorneys general previously filed an amicus brief supporting Arkansas laws in the U.S. Supreme Court in PMCA v. Rutledge, and in the Eighth Circuit in PCMA v. Wehbi, supporting North Dakota laws. The brief argues that PBMs have imposed self-serving protections that reduce competition and limit prescription medication access, and that states have the right to regulate these and other abusive practices.
Led by Missouri Attorney General Eric Schmitt, 19 Attorneys General announced they are investigating six major American banks asking for documents relating to the companies’ involvement with the Net-Zero Banking Alliance (NZBA). The banks receiving civil investigative demands include Bank of America, Citigroup, Goldman Sachs, JP Morgan Chase, Morgan Stanley, and Wells Fargo. NZBA-member banks must set emissions reduction targets in their lending and investment portfolios to reach net zero by 2050. The attorneys general are concerned that the banks’ use of NZBA criteria in lending and other decisions will negatively impact American businesses engaged in fossil fuel-related activities.
Individual Attorney General Actions
Arizona Attorney General Mark Brnovich announced an $85 million settlement with Google LLC, resolving claims it deceptively obtaining users’ location data. The settlement directs the bulk of the money to the Arizona general fund. Additionally, $5 million is specifically directed for attorney general education programs. In its lawsuit, Arizona alleged that Google tracked users’ location data even when the company was told to stop. When users turned off their Location History in settings, Google allegedly continued to surreptitiously collect users’ location through other settings such as Web & App Activity and the company used that information to sell ads. Attorney General Brnovich also obtained a consent judgment against the founder and former president of opioid manufacturer Insys Therapeutics, Inc., Dr. John Kapoor, regarding a scheme in which the opioid manufacturer paid physicians lucrative “speaker fees” in exchange for writing prescriptions for the fentanyl drug, Subsys. The consent judgment with Kapoor requires the payment of up to $2 million to the state and precludes Kapoor from engaging in the sale or advertisement of prescription drugs or medical devices in Arizona. In 2020, a federal court sentenced Dr. Kapoor to more than five years in prison, and he has paid tens of millions of dollars in restitution.
California Attorney General Rob Bonta and the Federal Trade Commission announced a joint action against home improvement financing provider Ygrene Energy Fund Inc. The company allegedly deceived consumers about the potential financial impact of its financing to pay for solar panels or updated insulation and unfairly recorded liens on consumers’ homes without their consent. A proposed court order would require Ygrene to dedicate $3 million to provide relief to consumers and meaningfully oversee the contractors who have served as its salesforce.
Colorado Attorney General Phil Weiser announced the publication of proposed Colorado Privacy Act rules. The Notice of Proposed Rulemaking identifies several topics on which comments are sought including consumers’ personal data rights, universal opt-out mechanisms, the duties of entities using consumers’ data, loyalty programs, and consent. The proposed rules will be subject to a public hearing on February 1, 2023, and written comments may be submitted through the date of the hearing.
Indiana Attorney General Todd Rokita settled with an Evansville company accused serving as a gateway for illegal telemarketing. Startel, Inc. and its owners agreed to cease serving as a voice service provider or providing Voice over Internet Protocol services.
Minnesota Attorney General Keith Ellison announced a settlement with a California student-loan debt-relief company that allegedly collected illegal fees from customers and misrepresented its services to consumers. The settlement requires Total Rain, Inc., doing business as Student Aid Group, to cease operating in Minnesota and provide more than $15,000 in full refunds to its Minnesota consumers. Minnesota alleged the company falsely promised consumers student-loan forgiveness, when only the federal government can forgive federal student loans. The company, in fact, merely enrolled consumers in federal repayment programs in which consumers can enroll themselves for free and charged both initial and monthly fees for doing so.
Missouri Attorney General Eric Schmitt filed suit against a residential solar energy company, Power Home Solar, LLC, for misrepresentations and failing to properly install or repair its systems. The lawsuit against Power Home Solar, which re-branded earlier this year to “Pink Energy,” accuses the company of knowingly using defective components that both prevent its system from functioning properly and are at risk of catching fire while installed on consumers’ homes. In addition to failure to repair, Power Home is also accused of making false representations about the amount of energy its systems would generate, even if they were installed correctly.
Montana Attorney General Austin Knudsen announced restitution checks totaling $96,258 will be sent to persons deceived by an alleged tech support scheme. The money was relinquished by a Butte man who allegedly served as a money mule for scammers in India. Richard Kenison allegedly received at least 658 checks from victims totaling over $2 million and allegedly wired most of the money through his company Tag Marketing, LLC to foreign scammers and kept a small share for himself.
New Mexico Attorney General Hector Balderas announced a partnership with San Diego-based Identity Theft Resource Center® (ITRC), to support victims of identity crime by integrating ITRC’s live-chat function into the attorney general’s website. ITRC is funded in part by U.S. Department of Justice Office of Victims of Crimes grants.
New York Attorney General Letitia James secured $1.9 million from e-commerce retailer, Zoetop Business Company, Ltd. (Zoetop), related to a 2018 data breach. The attorney general alleged that Zoetop, which was the subject of a cyberattack that obtained credit card numbers and other personal information of tens of millions of consumers worldwide, failed to properly secure consumers data or respond following the breach. The company, which operates popular e-commerce brands SHEIN and ROMWE, also allegedly misled consumers about the scope of the breach according to the settlement. Attorney General James also announced a settlement an ambulance company regarding balance billing. Mobile Life Support Services, Inc. allegedly illegally billed patients for the difference between what their insurance plans paid and what the company charged in a practice known as “balance billing.” Under the settlement, Mobile Life will pay full restitution plus interest to affected patients, request closure of all relevant accounts with debt collectors, update its billing practices, and pay a $100,000 penalty.
North Carolina Attorney General Josh Stein obtained $23 million in financial relief from a debt collection company, who used deceptive tactics, including allegedly sending simulated court notices threatening criminal action. The consent judgment against Gordon Scott Engle and his companies Turtle Creek Assets Ltd. , Turtle Creek Rentals LLC, and Royal Park Holdings Inc., will result in $22,934,075.17 in consumer debt forgiveness for more than 20,000 people and full refunds of $223,018.98 to more than 650 people.
Ohio Attorney General Dave Yost sued a pole barn and garage builder and its owner accused of accepting more than $174,000 in payments from consumers but failing to complete the work. The lawsuit against Clear View Construction, LLC and Ryan C. Needels, details complaints of shoddy workmanship by Clear View and seeks restitution, declaratory and injunctive relief, and penalties.
Pennsylvania Attorney General Josh Shapiro obtained $1.5 million for customers of the defunct auto title loan business, CashPoint. The settlement will require Kevin Williams and Mark Williams, owners of Dominion Management of Delaware, which operated as CashPoint, to refund more than $1.5 million in interest charges to consumers. These refunds are in addition to the $3.2 million in debt cancellation victims already received as a result of an October 2021 court order.
Texas Attorney General Ken Paxton sued Google, alleging that the tech giant has unlawfully captured and used the biometric data of Texas consumers without properly obtaining their informed consent. The lawsuit alleges that Google has collected millions of biometric identifiers, including voiceprints and records of face geometry, from Texans through its products and services like Google Photos, Google Assistant, and Nest Hub Max in violation of the state’s Capture or Use of Biometric Identifier Act.
Vermont Attorney General Susanne R. Young settled with a staffing agency that employed a temporary caregiver at multiple Vermont long-term care facilities despite knowing that the caregiver had financially exploited at least two older Vermonters. The settlement requires the staffing agency—Staffing Solutions of Vermont, LLC—to pay a penalty, overhaul its employee hiring and termination practices, and be subject to ongoing state oversight. In response to this case, the Attorney General’s Office and the Department of Disabilities, Aging and Independent Living jointly issued required employment screening protocols governing the hiring and termination of Vermont long-term care facility staff to ensure the safety of long-term care recipients.
Washington Attorney General Bob Ferguson announced a $10.5 million settlement with Tyson Foods, resolving the Attorney General’s lawsuit over price-fixing on chicken products. The announcement is the third and largest resolution in Ferguson’s lawsuit against 19 broiler chicken producers. The claims against the remaining 16 companies continue. Washington asserts Tyson Foods and 18 other chicken producers drove up the price of chicken since at least 2008, causing consumers to overpay by millions of dollars. As part of the settlement order, Tyson Foods will cooperate with the Attorney General’s Office to produce information and documentation relevant to the case against the other co-conspirators and conduct internal training and certify that it has corporate policies that ensure the company follows state and federal antitrust laws.
West Virginia Attorney General Patrick Morrisey filed a lawsuit against a disc jockey/wedding planner for allegedly failing to provide advertised services to numerous clients. According to the complaint, Helen Marie Nichole Smith also allegedly failed to register her business with the West Virginia Division of Tax or with the West Virginia Secretary of State’s Office. The complaint also states that Smith had previously pleaded guilty to a felony involving the conduct and admitted the allegations of the indictment. The attorney general’s case seeks restitution for consumers who were not covered by the criminal restitution order.
Other articles in this edition include:
- Consumer Chief of the Month
- Common-Interest Doctrine and Attorney-Client Privilege for Public Attorneys Confirmed by Minnesota Supreme Court in Energy Policy Advocates v. Ellison
- Attorney General Consumer Protection News: October 2022