NAAG Endorses Edith’s Bill
Throughout the country, attorneys general are fighting senior fraud and abuse. In 2019, several state attorneys general partnered with the U.S. Department of Justice and other federal partners to conduct the largest-ever nationwide elder fraud sweep against perpetrators who had repeatedly targeted seniors, resulting in losses of over $750 million.
Attorneys General Urge Congress to Adopt Key Changes to the Victims of Crime Act (VOCA)
As state Attorneys General, we are often the administrators of grant funding, through our state compensation programs or otherwise, financed directly from the Fund. In order to ensure the predictability and sustainability of these critical funds, change must be enacted to support our states’ ability to effectively serve victims and survivors of crime for years to come.
NAAG Endorses Stopping Overdoses of Fentanyl Analogues (SOFA) Act
States and localities are on the front line of this crisis and are a large part of winning the battle from both a law enforcement and public health perspective.
State of Wisconsin et al. v. Indivior, No. 16-5073 (E.D. Pa. Sept. 22,2016)
Plaintiff states alleged that the makers of Suboxone, a drug used to treat opioid addiction, engaged in a scheme to block generic competitors and raise prices. Specifically, they are conspiring to wtich Suboxone from a tablet version to a flim in order to prevent or delay generic entry. The states allege that the manufacturers engaged in “product hopping” in which a company makes slight changes to its product to extend patent protections and prvent generic alternatives. The complaint was filed under seal.
New York et al. v. Cephalon, No. 2:16-cv-04234 (E.D. Pa. Aug. 4, 2016)
In May 2015, the FTC settled a “pay-for-delay” suit against Cephalon for injunctive relief and $1.2 billion, which was paid into an escrow account. The FTC settlement allowed for those escrow funds to be distributed for settlement of certain related cases and government investigations. In August 2016, forty-eight states filed suit in the Eastern District of Pennsylvania against Cephalon alleging anticompetitive conduct by Cephalon to protect the profits it earned from having a patent-protected monopoly on the sale of its landmark drug, Provigil. According to the complaint, Cephalon’s conduct delayed generic versions of Provigil from entering the market for several years. The complaint alleged that as patent and regulatory barriers that prevented generic competition to Provigil neared expiration, Cephalon intentionally defrauded the Patent and Trademark Office to secure an additional patent, which a court subsequently deemed invalid and unenforceable. Before it was declared invalid, Cephalon was able to use the patent to delay generic competition for nearly six additional years by filing patent infringement lawsuits. Cephalon settled those lawsuits by paying competitors to delay sale of their generic versions of Provigil until at least April 2012. Consumers, states, and others paid millions more for Provigil than they would have had generic versions of the drug launched by early 2006, as expected. A settlement was filed with the complaint, which includes $35 million for distribution to consumers who bought Provigil.
In re Societe Generale S.A., Agreement
Plaintiff states entered into settlement agreement with Societe Generale for fraudulent and anticompetitive conduct in municipal bond derivative transactions with state and local government entities and nonprofits across the country. Societe Generale agreed to pay $26,750,000 as part of a coordinated 22-state and private class settlement. Pursuant to the settlement, this money will mostly be applied to restitution for municipalities, counties, government agencies, school districts and nonprofits that the states allege were harmed when they entered into municipal derivatives contracts with Societe Generale. In 2008, plaintiff states, in parallel with the U.S. Department of Justice and federal regulatory agencies, began their investigation of the municipal bond derivatives market. In these markets, tax exempt entities such as municipalities, school districts, and nonprofit organizations issue municipal bonds and reinvest the proceeds until the funds are needed or enter into contracts to hedge interest rate risk. These investigations revealed anticompetitive and fraudulent conduct involving individuals at a number of large financial institutions, including Societe Generale, and certain brokers with whom they had worked. Certain Societe Generale employees and their counterparts at other institutions rigged bids, submitted noncompetitive courtesy bids and fraudulent certificates of arms-length bidding to government agencies. The misconduct led local and state governments, as well as nonprofits, to enter into municipal derivatives contracts on less advantageous terms than they would have otherwise. Societe Generale agreed to pay $25.1 million into a settlement fund to provide restitution for injured parties and $1.4 million to the attorneys general as an additional payment. Societe Generale also agreed not to submit non-competitive bids or refrain from bidding on, or coordinate the preparation of bids for municipal derivatives and to cooperate with ongoing investigations.
In re Natixis Funding Corp., Agreement, Feb. 18, 2016)
Plaintiff states entered into settlement agreement with Natixis Funding Corp. for fraudulent and anticompetitive conduct in municipal bond derivative transactions with state and local government entities and nonprofits across the country. Natixis will pay $29,950,000 as part of a coordinated 22-state and private class settlement. The funds will mostly be applied to restitution for municipalities, counties, government agencies, school districts and nonprofits that the states allege were harmed when they entered into municipal derivatives contracts with Natixis. In 2008, the plaintiff states, in parallel with the U.S. Department of Justice and federal regulatory agencies, began their investigation of the municipal bond derivatives market. In these markets, tax exempt entities such as municipalities, school districts, and nonprofit organizations issue municipal bonds and reinvest the proceeds until the funds are needed or enter into contracts to hedge interest rate risk. These investigations revealed anticompetitive and fraudulent conduct involving individuals at a number of large financial institutions, including Natixis, and certain brokers with whom they had worked. Certain Natixis employees and their counterparts at other institutions rigged bids, submitted noncompetitive courtesy bids and fraudulent certificates of arms-length bidding to government agencies. The misconduct led local and state governments, as well as nonprofits, to enter into municipal derivatives contracts on less advantageous terms than they would have otherwise. Natixis agreed to pay $23.4 million into a settlement fund and $1.5 million to the attorneys general as an additional payment. Natixis also agreed not to submit non-competitive bids or refrain from bidding on, or coordinate the preparation of bids for municipal derivatives and to cooperate with ongoing investigations.
US, Illinois, Iowa and Missouri v. Tyson Foods, No. 1:14-cv-01474, D.D.C. Aug. 27, 2014)
USDOJ and three states challenged the acquisition of Hilshire by Tyson. According to the complaint, Tyson and Hillshire compete against each other and against others to
procure sows from farmers in the United States. Tyson’s proposed acquisition of Hillshire would eliminate head-to head
competition between the companies and create a firm that would account for over a
third of all sows purchased from farmers in the United States. the merging parties agreed to divest all the assets of Heinold Hog Markets, including 8 buying stations, to a purchaser approved by USDOJ, after consultation with the states.
Florida et al. v. Service Corporation International, No. A13CV1082LY (W.D. Texas Jan. 2, 2014)
SCI, the nation’s largest funeral home chain, sought to acquire Stewart Enterprises, another large funeral home chain. Seven states and the FTC entered into consent agreements with SCI specifying which funeral homes would be divested in 59 separate markets. In a separate consent agreement, SCI agreed to provide the state plaintiffs with the same notices, requirements for approval and compliance review as to divestitures and future acquisitions included in the FTC’s consent decree and to pay the state’s costs and attorneys’ fees..
Texas et al. v. Penguin Group et al., No. 1:12-cv-03394-DLC (S.D.N.Y, Apr. 30, 2012)
TTexas and Connecticut led 33 state group that filed complaint charging three of the nation’s largest book publishers and Apple Inc. with colluding to fix the sales prices of electronic books. The States undertook a two-year investigation into allegations that the defendants conspired to raise e-book prices. Retailers had long sold e-books through a traditional wholesale distribution model, under which retailers, not publishers, set e-book sales prices. The states alleged that Penguin, Simon & Schuster and Macmillan conspired with other publishers and Apple to artificially raise prices by imposing a distribution model in which the publishers set the prices for bestsellers at $12.99 and $14.99. When Apple prepared to enter the e-book market, the publishers and Apple agreed to adopt an agency distribution model as a mechanism to allow them to fix prices. To enforce their price-fixing scheme, the publishers and Apple relied on contract terms that forced all e-book outlets to sell their products at the same price. Because the publishers agreed to use the same prices, retail price competition was eliminated. According to the States’ enforcement action, the coordinated agreement to fix prices resulted in e-book customers paying more than $100 million in overcharges. The States’ antitrust action seeks injunctive relief, damages for customers who paid artificially inflated prices for e-books and civil penalties. Case was filed in W.D. Tex., transferred to S.D.N.Y. as consolidated case. The States reached settlements with the five publishers, which granted E-book outlets greater freedom to reduce the prices of their E-book titles. Consumers nationwide received a total of $164 million in compensation. After entering into settlement agreement with all the Defendant publishers, DOJ and the states had a nearly 3 week trial against Apple in June 2013, during which numerous witnesses took the stand. On July 10, 2013, a decision was handed down in favor of the U.S. Department of Justice and the states against Apple. Trial of the damages phase is pending. United States et al. v. Apple, Inc., 12-CV-2826 (S.D.N.Y.).
