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State AG Updates: January 5-18, 2023

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Each week, Crowell & Moring’s State Attorneys General team highlights significant actions that State AGs have taken. Here are this week’s updates.

Multistate

  • A coalition of 21 state attorneys general submitted a letter challenging the ESG practices of two proxy advisory companies, International Shareholder Services, Inc. (ISS) and Glass, Lewis & Co.  The attorneys general are challenging how ESG considerations affect ISS and Glass Lewis’s proxy voting recommendations that conflict with the financial interests of their clients.
  • A coalition of 18 state attorneys general filed an amicus brief in support of New York’s defense against a legal challenge to its firearm-related public nuisance statute in the U.S. Court of Appeals for the Second Circuit. The New York statute, restores the right of victims to hold the firearm industry responsible for its misconduct. In the amicus brief, the coalition argues that New York’s statute is in line with individual states’ longstanding authority to advance laws and policies that protect consumers from harms committed by manufacturers and sellers. 
  • A coalition of 14 state attorneys general filed an amicus brief supporting the U.S. Chamber of Commerce’s motion for summary judgment in a case against the Consumer Financial Protection Bureau. The case critiques the CFPB’s update to the “examination manual” that allegedly incorporated overly broad and unreasonable new anti-discrimination laws going beyond the statutory authority established in the Dodd-Frank Act.
  • South Dakota Attorney General Jackley was elected to a one-year term as chairman of the National Attorney General Alliance. The term began on Monday, January 9, 2023. The AGA mission is to create educational opportunities for its 48-member Attorney General offices and to collaborate on complex issues in law and public policy.

California

  • California Attorney General Bonta secured a preliminary injunction against nineteen nursing facilities operated under Mariner Health for violating federal and state laws and regulations over a five-year period. Attorney General Bonta alleged that Mariner Health violated California’s Unfair Competition Law and False Advertising Law by understaffing its facilities and subjecting its patients to negligent care while inflating their nursing facilities advertised ratings to the Center for Medicare and Medicaid Services. The injunction allows for oversight of five facilities to ensure compliance with staffing laws and oversight of all nineteen facilities to ensure compliance with discharge regulations.
  • California Attorney General Bonta issued a consumer alert following California Governor Newsom’s declaration of a state of emergency amidst the ongoing winter storms causing heaving rain and flooding. Attorney General Bonta reminds business owners that price gouging during a state of emergency is illegal under California Penal Code Section 396.

Colorado

  • Colorado Attorney General Weiser announced a refund to approximately 40 Coloradans after Flatirons, a medical billing company, allegedly sent deceptive billing notices that stated it was “not a bill” but expected consumers to pay. According to the settlement, Flatirons agreed to pay $12,933.89 in restitution.
  • Colorado Attorney General Weiser secured a $4 million settlement for Coloradan borrowers who are entitled to refunds of GAP fees from two credit unions, Bellco and Canvas. GAP, or guaranteed automobile protection, is often sold to car buyers who finance their purchase. An investigation by the Consumer Protection Section of the Colorado Department of Law revealed that Bellco and Canvas historically were not refunding unearned GAP fees owed to consumers. Bellco and Canvas additionally agreed to refund unearned portions of GAP fees in a timely manner moving forward.

District of Columbia

  • D.C. Attorney General Schwalb announced a settlement with Azure Health Services, LLC, which operated assisted-living facilities, resolving allegations that the company failed to pay frontline healthcare workers wages they earned during the COVID-19 pandemic. As part of the settlement, Azure will pay a total of $1,510,000.

Missouri

  • Missouri Attorney General Bailey announced a consent judgment against Vacation Consulting Services, LLC; VCS Communications, LLC; The Transfer Group, LLC; Real Travel, LLC; and their owner Brian Scroggs for allegedly failing to allow consumers to exit their timeshare agreements. Defendants agreed to settle the case for $800,000. This figure includes $700,000 in restitution for consumers, $50,000 in civil penalties, and $50,000 to the Missouri Practices Revolving Fund, which will help pay for the state to pursue other future actions on behalf of defrauded consumers.

Maine

  • Maine Attorney General Frey announced that the United States Supreme Court declined to review a challenge to Maine’s first-in-the-nation consumer protection law requiring cable companies to prorate customers’ final month of service. The law was originally set to go into effect in September of 2020, but was stalled when Spectrum filed suit in federal court arguing it was preempted by federal law. By declining to hear Spectrum’s petition, the Supreme Court has allowed the First Circuit’s ruling in favor of Maine and the legality of the law to stand.

Massachusetts

  • Massachusetts Attorney General Campbell announced a $3.5 million settlement with Aspen Dental Management, Inc. resolving claims that the company cheated Massachusetts consumers through bait-and-switch advertising campaigns. The consent judgment settles a lawsuit filed by prior Massachusetts Attorney General Healey in 2021, which alleged that Aspen Dental violated state consumer protection laws. The suit also alleged that Aspen Dental engaged in numerous deceptive advertising and marketing practices, such as charging for items marketed as “free” and incorrectly stating all insurances were accepted.

New Jersey

  • New Jersey Attorney General Platkin announced that the State has reached a settlement with Beacon Metals, a scrap metal company. The settlement resolves allegations that the company shortchanged consumers by using an inaccurate scale that provided short weight readings. The company has agreed to pay $128,838, the majority of the settlement going towards civil penalties.

New York

  • New York Attorney General James and the CFPB filed a lawsuit against Credit Acceptance Corporation, a large, subprime auto lender, for deceiving low-income New Yorkers into high-interest car loans. An Office of the Attorney General investigation found that CAC’s lending practices were deceptive and predatory. The lawsuit alleges that CAC pushed unaffordable loans onto thousands of low-income consumers.
  • New York Attorney General James announced an agreement with Bell Pet Company, LLC, d/b/a The Pet Zone, for misleading consumers about the health of the pets sold to New Yorkers. The agreement requires Bell Pet to pay a civil penalty and create a restitution fund of up to $200,000 to reimburse eligible consumers for medical costs. Bell Pet allegedly misled customers about the health of the pets that were purchased by providing incomplete medical records. 

Ohio

  • Ohio Attorney General Yost filed a lawsuit against six individuals and six companies that relied on illegal robocalls to identify sales leads for car warranties. The complaint alleges that the companies paid for leads to initiate outbound prerecorded calls to consumers to market and sell vehicle service contracts. Additionally, the calls failed to identify the caller and falsely claimed the call was regarding the consumers’ manufacturer-affiliated auto warranty.

Washington

  • Washington Attorney General Ferguson announced that a King County judge granted the Office’s motion for a preliminary injunction against Federal Way Discount Guns for selling unlawful high-capacity magazines. Attorney General Ferguson filed a lawsuit in December against Federal Way Discount Guns for illegally selling high-capacity magazines despite the ban on such products. The defendants face a maximum penalty of $7,500 for every time the store offered a high-capacity magazine for sale, and $7,500 for every time it illegally sold a high-capacity magazine.
  • Washington Attorney General Ferguson announced he will partner with Sen. Mark Mullet, and Rep. Gerry Pollet, to propose a bill in the next legislative session exempting Washington newspapers and eligible online news outlets from the state business and occupation tax. Newspapers currently pay a reduced business and occupation tax, but that preferential tax rate expiries in July of 2024.
  • Washington Attorney General Ferguson partnered with state legislators to propose legislation to create a Cold Case Investigations Unit within the Attorney General’s Office that will focus on solving cases of missing and murdered Indigenous women and people. The Missing and Murdered Indigenous Women and People Task Force has 23 members and started meeting in December 2021, the Task Force recommending the creation of the Cold Case Investigations Unit in August of 2022.

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