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State AG Updates: June 30-July 6, 2022

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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

  • 23 states and the U.S. Department of Justice announced a settlement with SavaSeniorCare LLC, a company that owns and operates skilled nursing facilities in several states, resolving allegations that it billed Medicaid for medically unnecessary rehabilitation therapy services and offered substandard nursing services. Sava will pay the states and the federal government at least $11.2 million.
  • A coalition of state attorneys general, led by Texas Attorney General Ken Paxton, filed a petition for review challenging the National Highways Traffic Safety Administration’s (NHTSA) corporate average fuel economy standards (CAFE) for certain cars and light trucks. According to the petition, the regulation seeks to impose substantial increases, in the number of electric vehicles on roads nationwide, with ramifications that will be felt throughout the automobile industry. The petition argues that the NHTSA violated the express statutory prohibition on its mandating electric vehicles in setting the CAFE standards. It also argues that the rule implicates state sovereignty interests.

California

  • The office of California Attorney General Rob Bonta announced that AB 1887 prohibits a state agency, department, board, or commission from requiring any state employees, officers, or members to travel to a state that supports or finances discrimination against lesbian, gay, bisexual, and transgender people. Gov. Code, § 11139.8, subd. (a)(5). The law also requires the Attorney General to develop, maintain, and post on his website a current list of states that are subject to the travel ban, which can be found here.

Colorado

  • Attorney General Phil Weiser announced that the state will recover $5 million from a multistate settlement with Mallinckrodt, a company which sells and markets pharmaceutical products throughout the nation. The settlement resolved allegations that the company knowingly underpaid Medicaid rebates due for its drug H.P. Acthar Gel, a gel that is used for the treatment of chronic inflammation and autoimmune conditions. Of the total amount that Colorado recovered, $2.9 million will be returned to the Colorado Department of Health Care Policy and Financing. The additional dollars will be returned to the federal government, which also helps fund Medicaid in the states.
  • Attorney General Phil Weiser submitted a group borrower defense application to the U.S. Department of Education to cancel the federal student loan debt of more than 10,000 students who attended schools operated by the Center for Excellence in Higher Education from 2006 through its abrupt closure in 2021. According to the application, (1) the school overstated employment placement rates; (2) the potential to earn a higher income or better job after attending a CEHE school; (3) and the affordability and benefits of obtaining a private educational loan through CEHE.

Florida

  • Attorney General Ashley Moody announced a consent final judgment with Louis Bruno and his business Bruno, LLC, known as Bruno Total Home Performance and Bruno Air Conditioning, resolving allegations that the defendants used aggressive and deceptive sales practices that resulted in significant financial harm to Florida consumers, including a large number of senior citizens. According to the complaint,  the allegedly deceptive practices involve (1) upselling unnecessary HVAC systems and (2) setting up financing agreements with terms and liens on homes that consumers did not understand. If entered by the court, the order will enjoin the defendants from a number of activities, including conducting HVAC business in the state. In addition, the defendants will be required to pay more than $1 million in monetary relief.
  • Attorney General Ashley Moody announced the filing of a joint complaint with the Federal Trade Commission against C Lee Enterprises, LLC, doing business as Grant Bae and its owner for allegedly violating the FTC Act, the COVID-19 Consumer Protection Act, and the Florida Deceptive and Unfair Trade Practices Act by targeting minority-owned small businesses with claims that customers could access millions of dollars in grant funding after paying for the defendants’ services. According to the complaint, defendants engaged in a number of deceptive actions including, (1) falsely promising significant returns; (2) misleading customers about grant status; (3) deceiving customers about access to grants; (4) lying about prior success; and (5) failing to provide promised refunds.

Illinois

  • Attorney General Kwame Raoul issued a statement on the mass shooting that took place at the Independence Day parade in Highland Park, Illinois. Attorney General Raoul highlighted the devastating nature of the mass shooting and reaffirmed his commitment to “working with law enforcement partners to prevent the mass tragedies” and continuing to “collaborate with federal law enforcement, such as the U.S. Secret Service National Threat Assessment Center to ensure that community and faith leaders have access to training that can help prevent these horrific mass casualty events.”

Iowa

  • The office of Attorney General Tom Miller released a reminder stating that Iowa’s first elder abuse criminal law went into effect on July 1st. Senate File 522 defines elder abuse as “the abuse, emotional abuse, neglect, isolation, or sexual exploitation of an older individual” — a person 60 years or older — and establishes penalties ranging from a serious misdemeanor to a Class B felony, depending on the circumstances and resulting injuries of the abuse.  

Massachusetts

  • Attorney General Maura Healey announced a consent judgment with Utility Expense Reduction, LLC (UER), a retail electricity supplier, resolving allegations that the company violated the Massachusetts False Claims Act when it knowingly avoided its obligation to make required payments under the state’s renewable and clean energy programs. In addition, UER’s conduct allegedly violated the Consumer Protection Act and several environmental statutes, including the Renewable Energy Portfolio Standard, the Alternative Renewable Energy Portfolio Standard and the Clean Air Act. Under the terms of the agreement, UER has paid over $1.65 million, including restitution and penalties, and will not operate in Massachusetts for five years.
  • Attorney General Maura Healey announced a settlement with NH Title Group, Inc. f/k/a Massachusetts Title Loan, Inc. and Capital Title Loan, a motor vehicle title lender, resolving allegations that it charged Massachusetts borrowers usurious interest rates for small dollar automobile title loans and engaged in unlawful debt collection and automobile repossession practices. Under the terms of the settlement, NH Title Group, Inc. will pay $500,000 in restitution and penalties and has forgiven over $400,000 in outstanding loan balances and post-repossession deficiency obligations.

Michigan

  • Attorney General Dana Nessel announced an Assurance of Voluntary Compliance with a number of operators of hotel operators and tourism ground around Mackinaw City resolving allegations that consumers booked hotel rooms that, while advertised as available and the reservations ultimately confirmed, were closed without notice to the consumer. In these instances, customers’ attempts to secure refunds were often unsuccessful. The settlement provides consumers with injunctive relief and defendants are responsible for about $65,000 in monetary relief. 

Pennsylvania

  • Attorney General Josh Shapiro announced a settlement with PalmCo Energy PA, LLC and PalmCo Power PA, LLC (which do business under the name Indra Energy in Pennsylvania), retail energy suppliers, resolving allegations of illegal telemarketing practices. According to the settlement, Indra Energy, through its vendors, violated telemarketing laws by: (1) repeatedly calling numbers registered on the Do-Not-Call list; (2) delivering pre-recorded messages to numbers on the Do-Not-Call list; (3) failing to obtain an “express request” from consumers on the Do-Not-Call list prior to calling them; (4) using misleading offers regarding energy savings and rebates; and (5) engaging in deceptive practices in connection with requests to be contacted for purposes of telemarketing solicitations. Under the terms of the settlement, Indra Energy must pay $185,900, which includes payments of $100 to each of the 9 consumers who filed a telemarketing complaint against Indra Energy. The company is also prohibited from making unwanted telemarketing calls

New Jersey

  • Acting Attorney General Matthew J. Platkin announced that the U.S. Department of Education’s decision to discharge all remaining federal student loan obligations for students who were defrauded by Corinthian Colleges will allow 4,660 New Jersey borrowers who attended the schools to receive a total of $48.8 million in full student loan cancellations. Nationwide, the federal government’s action means that approximately 560,000 borrowers will receive $5.8 billion in full loan discharges.

New York

  • Attorney General Letitia James announced a settlement with Wegmans, the grocery store chain, resolving allegations that a data breach exposed more than 830,000 consumers’ personal information. According to the settlement, Wegmans maintained the personal information in misconfigured cloud storage platforms that were vulnerable to cyber-attacks. Pursuant to the settlement, Wegmans will be required to pay $400,000 in penalties and adopt new measures to protect consumers’ personal information in the future.
  • Attorney General Letitia James filed a lawsuit against 10 gun distributors for selling tens of thousands of illegal, unfinished frames and receivers to New Yorkers that were then converted into unserialized, untraceable handguns and assault-style weapons, known as ghost guns. The complaint alleges violations of a number of laws, including the state’s licensing laws. In addition, Attorney General James is invoking a newly enacted Public Nuisance statute to hold the gun distributors responsible.
  • Attorney General Letitia James sent a letter to Google calling on the company to correct search results that direct individuals seeking abortions to dangerous or misleading anti-abortion clinics in the state. According to the letter, Google fails to distinguish between facilities that offer abortion services and those that do not, which could lead individuals seeking abortions to visit crisis pregnancy centers (CPCs) for care. Google is allegedly aware of these issues and has previously promised to address them. For instance, in 2018, Google agreed to investigate reports of CPCs included in abortion searches on Google Maps. In 2019, the company stated that human analysts were working on deciphering which facilities offer abortion and those that work to interfere with a pregnant persons’ decision.

Vermont

  • Attorney General Susanne Young and the U.S. Equal Employment Opportunity Commission announced the approval of a settlement with a McDonald’s franchisee, resolving allegations that defendants failed to protect workers from being sexually harassed. The settlement requires Coughlin, Inc., a McDonald’s restaurant franchisee, to pay $1.6 million in damages and state penalties and to substantially reform its business practices under a five-year consent decree.

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