Each week, Crowell & Moring’s State Attorneys General team highlights significant actions that State AGs have taken. Here are this week’s updates.
- A multistate coalition of state attorneys general announced a lawsuit against lending company Mariner Finance, which is being accused of violating the federal Consumer Financial Protection Act by hiding add-on products that consumers did not agree to purchase or even know about when consumers entered agreements to borrow money and repay it over time. The lawsuit seeks restitution, disgorgement, civil penalties, rescission or reformation of contracts and loan agreements, and injunctive relief.
- A coalition of 19 state attorneys general issued a comment letter in support of an effort by the Federal Reserve Board of Governors, Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency that would revise and strengthen Community Reinvestment Act regulations, which are intended to prevent racially discriminatory activity in housing and to encourage banks to meet all communities’ credit needs. The comment letter asks the agencies to go further by implementing reforms that would combat racial and economic disparities that have been worsened by COVID-19.
- Several state attorneys general, including Minnesota Attorney General Ellison, Iowa Attorney General Miller, and Illinois Attorney General Raoul applauded the U.S. Department of Education’s decision to discharge all remaining federal student loans for students who attended ITT Technical Institute. Across the country, 208,000 borrowers will receive $3.9 billion in loan discharges, covering all remaining federal student loans for attending the school from January 1, 2005 through its September 2016 closure.
- A multistate coalition of state attorneys general filed a comment letter in support of the U.S. Department of Education’s efforts to increase access to critical student loan discharge programs including the Public Service Loan Forgiveness and Temporary Expanded Public Service Loan Forgiveness programs and advocating for additional revisions to protect borrowers and taxpayers. Some additional revisions the coalition is seeking include clarification of the mandatory nature of borrower relief and relevant timelines for those who attended a school that closed before they could finish their degree and clarification that borrowers may rely on judgments obtained by state attorneys general as the basis for borrower defense claims.
- A coalition of 20 state attorneys general filed an amicus brief in support of the U.S. Bureau of Alcohol, Tobacco, Firearms, and Explosives’ (“ATF”) opposition to a motion for a preliminary injunction in Morehouse Enterprises, LLC v. ATF, which seeks to block an ATF rule that would help law enforcement protect communities from guns that lack a serial number. The brief argues that the rule is permitted by the Gun Control Act and complements state laws to regulate partially completed receivers and weapon parts kits.
- A coalition of 12 state attorneys general issued a comment letter to the U.S. Environmental Protection Agency, speaking against its proposed rule to modify water quality certification requirements under the Clean Water Act. The proposed rule would rescind many changes to the Act from 2020 and add increased steps to approval for projects such as energy pipelines. The coalition is arguing that the rule would create confusion and lead to abuse.
- A coalition of state attorneys general sent a comment letter to the Securities and Exchange Commission urging it to finalize rules that would require investment companies as well as advisors to disclose information about how they use environmental, social, and governance criteria in products that have been labeled as “ESG.” The coalition believes this disclosure would increase transparency and accountability in this sector.
- A coalition of 20 state attorneys general sent a comment letter to the U.S. Environmental Protection Agency opposing its adoption of National Ambient Air Quality Standards (“NAAQS”) for greenhouse gases under the Clean Air Act. The coalition is arguing that the adoption of NAAQS would disregard the consequences for the US economy and its industrial capacity and goes against the regulatory framework set by Congress.
- A coalition of state attorneys general sent a comment letter in support of the U.S. Postal Service’s notice of intent to create a Supplemental Environmental Impact Statement (“EIS”) and its commitment to purchasing more electric vehicles. This notice comes after a lawsuit alleging that the Postal Service relied on a flawed environmental analysis to justify purchasing up to 90% gas powered automobiles in violation of the National Environmental Policy Act. The letter also asks the Postal Service to expand the Supplemental EIS to address the purchase of gas-powered automobiles and to halt any activity related to their purchase until the review is completed.
- California Attorney General Bonta announced a decision from the U.S. District Court for the District of Montana overturning the U.S. Department of the Interior’s (“DOI”) decision to restart the federal coal program based on what Attorney General Bonta argued was a flawed environmental review. Now, DOI will be required to complete a new environmental review under the National Environmental Policy Act, and until then the moratorium on coal leasing will be reinstated.
District of Columbia
- Washington, D.C. Attorney General Racine announced that his office won a $4 million judgment against ghost gun manufacturer and distributor Polymer80, which was accused of making false and misleading statements about its products’ legality in the District of Columbia. The judgment also includes a permanent ban from selling untraceable and un-serialized firearms to District residents and requires the company to inform consumers that its products are illegal in the District.
- Georgia Attorney General Carr announced a settlement with psychotherapy service provider Atlanta Behavioral Medicine, Inc., requiring it to pay $650,000. The settlement resolves allegations that the provider billed Georgia Medicaid illegally for services that were never provided when it coded medication management sessions as therapy sessions.
- Kansas Attorney General Schmidt announced that an individual and his corporate entities Parcells Forensic Pathology Group LLC, ParCo-Parcells and Company, LLC, and National Autopsy and Tissue Recovery Services, Inc. received a court order to pay $254,762.98 in restitution, as well as $400,000 in penalties for violating the Kansas Consumer Protection Act and Kansas False Claims Act. The charges stem from illegal autopsy services the individual and entities were providing. Additionally, the individual and entities were permanently banned from offering similar services in Kansas.
- Minnesota Attorney General Ellison announced that he filed a lawsuit against MN Crete Pools, LLC and its owner, alleging that they engaged in fraudulent and deceptive practices related to in-ground pool construction and equipment that was not delivered. The lawsuit seeks restitution, injunctive relief, civil penalties, and costs and fees.
- Minnesota Attorney General Ellison announced that at a hearing where his office argued in favor of reduced natural gas rates, the Public Utilities Commission voted to save customers of CenterPoint Energy, Xcel Energy, Minnesota Energy Resources Corporation, and Great Plains Natural Gas Company $58.6 million in natural gas costs.
- Missouri Attorney General Schmitt announced that a federal court entered a final judgment mandating the divestiture of certain grain elevators along the Mississippi River before a large asset acquisition could take place between major agriculture corporations Zen-Noh Grain Corporation and Bunge North America, Inc. The divestiture will allow farmers to receive a fair price for their crops.
- New Jersey Acting Attorney General Platkin and Commissioner of Environmental Protection LaTourette announced that ExxonMobil must pay the state $9.5 million to resolve a 2019 lawsuit related to the damaging of natural resources from dumping activity. The Consent Judgment does not address any unpaid past cleanup and removal costs associated with the site at issue.
- New York Attorney General James announced a settlement with robocalling platform Message Communications, Inc., related to its involvement in an illegal robocall scheme intended to prevent Black New Yorkers from voting by mail in the 2020 election. The settlement includes a $50,000 restitution payment and requires the company to send out a voter protection robocall, as well as to refrain from knowingly transmitting voter intimidation robocalls and to screen customers and calls.
- New York Attorney General James announced a lawsuit against the owners and operators of automobile salvage yard LSM Auto Parts & Recycling for releasing dangerous chemicals and oil into the environment and ignoring cleanup regulations. The lawsuit seeks financial penalties, as well as a workplan for investigating and resolving contamination.
- Consumer Protection Pennsylvania Attorney General Shapiro announced that his office filed a lawsuit against playground equipment suppliers Huntsman Farms LLC and Willowdale Creative Group LLC and an executive. The lawsuit alleges that the companies and executive sold equipment and products through website huntsmanfarms.com but did not deliver the advertised products or give refunds. It seeks a permanent ban against the company and executive from doing business in Pennsylvania, as well as civil penalties and restitution.
- West Virginia Attorney General Morrisey announced a settlement with Rite Aid that includes monetary relief of up to $30 million to resolve a lawsuit alleging that Rite Aid did not maintain effective controls against diversion and contributed to the oversupply of opioids in West Virginia.