Each week, Crowell & Moring’s State Attorneys General team highlights significant actions that State AGs have taken. Here are this week’s updates.
- Montana Attorney General Knudsen is leading a coalition of 17 Republican attorneys general that filed an amicus brief in a challenge to a Hawaii law prohibiting the carry or possession of firearms in designated “sensitive” places. Wolford v. Lopez is pending before the Ninth Circuit, where the coalition urges the Court to affirm a District Court decision that blocked Hawaii from enforcing much of the ban.
- Iowa Attorney General Bird joined 22 other Republican attorneys general in an amicus brief supporting a mother suing a California school district for allowing her child to socially transition according to the child’s gender identity. The mother and the attorneys general are asking the Ninth Circuit to reverse a District Court decision which approved of the school district’s action as compliant with California law.
- Utah Attorney General Reyes announced a decision agreeing with an amicus brief that he and nine other Republican attorneys general filed in Wawa v. Frank. The Third Circuit held that the attorneys’ fees awarded were too great a proportion of the overall settlement resolving claims arising from a nationwide data breach. On remand, the District Court must consider “whether ‘the funds made available to class members rather than the amount actually claimed during the claims process’ is the best measure of reasonableness; and whether the fee award is reasonable in light of any side agreements between class counsel and Wawa.”
- California Attorney General Bonta joined a coalition of 18 attorneys general in submitting a comment letter to U.S. Treasury Secretary Janet Yellen expressing strong support for the Internal Revenue Service’s (IRS) Direct File pilot program. The pilot program will allow eligible taxpayers to file their 2023 federal taxes directly with the IRS for free.
- Alabama Attorney General Marshall sent a letter to local leaders statewide addressing the millions of dollars local jurisdictions will receive from opioid settlements for the specific purpose of abating the opioid crisis. The letter emphasizes the importance of implementing long-term strategies to address the crisis, as well as reinforcing the settlement terms. Any funds spent on non-approved purposes could cost the State future payments from the opioid defendants and delay efforts to combat the opioid crisis.
- Attorney General Weiser announced that his office reached a settlement with Omni Hotels that will end the chain’s practice of advertising room prices lower than the total cost including all required fees. The agreement comes after an investigation which found that the company was not being transparent with customers about the total nightly price of their rooms.
- Attorney General Weiser announced a settlement with consumer lender MoneyLion after an investigation found the company collected illegal membership fees from Colorado consumers tied to loans. MoneyLion provided low-APR loans for consumers who paid monthly membership fees. MoneyLion told consumers the memberships could be canceled at any time, but prohibited cancellation once they took out loans. The settlement includes $271,000 in restitution.
District of Columbia
- Attorney General Schwalb announced a settlement with Potomac Electric Power Company (PEPCO) that requires PEPCO to pay $57 million towards cleanup of the Anacostia River and in penalties for polluting the river. This pollution disproportionately impacted lower-income Black residents, and the settlement “represents a major step toward addressing pollution that has resulted in multi-generational health impacts, particularly in communities of color.”
- Attorney General Moody announced that the state’s Military and Veterans Assistance Program (MVAP) had recovered nearly $3.5 million for military members, veterans, and families victimized by scams and deceptive business practices since 2019. AG Moody’s office detailed several major scams they disrupted and provided contact information to report scams targeting service members or veterans.
- Secretary of State Morales and Securities Commissioner Castetter announced a settlement with precious metals dealer Safeguard Metals, LLC and Jeffrey Ikahn in a federal lawsuit alleging that Safeguard and Ikahn engaged in a nationwide $68 million fraudulent scheme that targeted the elderly. The scam involved price manipulation of precious metals in order to take advantage of inexperienced investors.
- Attorney General Rokita announced the recall of numerous candies and other products intended for children. The Consumer Product Safety Commission identified 12 candy or toy products as unsafe, and urged consumers to stop using the recalled products and pursue resolution from the manufacturer.
- Attorney General Nessel issued a public service announcement that members of Generation Z – those born between the late 1990s and early 2010s – are three times more likely to be victims of online scams. Those under 20 lost an estimated $8.2 million in 2017 and $210 million in 2022, a more than two-thousand percent increase, per the FBI’s Internet Crime Reports.
- Attorney General Nessel celebrated reforms that eliminated certain immunities from product liability claims asserted against pharmaceutical companies. She anticipates that these changes will allow her office to more straightforwardly address the conduct of certain companies in the context of the opioid epidemic and price gouging for insulin, and to recover of taxpayer dollars paid out from the Medicaid program due to fraud.
- Attorney General Nessel filed suit to dissolve two business entities in response to their purported practice of ‘cloning’ legitimate businesses and procuring organizational licenses by fraud. As described in the lawsuit: “Cloning involves a fraudster creating a new legal entity with a name that is the same as, or very similar to, an existing company name. Depending on the nature of the scam, the fraudster might also use address, telephone number, or other information belonging to the legitimate business that has been cloned.”
- Attorney General Ellison announced a settlement with Network 46, a student loan debt relief company that illegally collected fees from customers and misrepresented its services. The settlement requires Network 46 to cease operating in Minnesota and provide full refunds to its Minnesota consumers. As a result of the Attorney General’s investigation, Network 46 has ceased operating nationwide.
- Attorney General Platkin and the Division of Consumer Affairs announced that a now-defunct New Jersey cosmetology school and its related entities have agreed to pay nearly $640,000 – a majority of which will be used for consumer restitution – to resolve the State’s lawsuit alleging they defrauded students and engaged in substandard business practices that financially harmed students. Among other failures, the school did not provide students with Board-mandated books and supplies that were included in the cost of tuition.
- Attorney General James secured $450,000 in penalties from US Radiology Specialists, Inc. (US Radiology) for failing to protect its patients’ personal and health care data. Their investigation found that US Radiology did not prioritize upgrading its hardware, which left its network exposed to a known vulnerability, leading to a ransomware attack that affected more than 92,000 New Yorkers.
- Attorney General Stein announced a price gouging ban in effect throughout western North Carolina in response to ongoing wildfires. The attorney general expressed readiness to enforce the ban, recounting 11 lawsuits brought against 27 defendants under North Carolina’s price gouging statute which resulted in 14 judgments or settlements totaling $1,080,000 against 25 defendants, including a $274,000 settlement that was the largest price gouging settlement in the department’s history.
- Attorney General Yost announced a settlement with the organizer of a Kickstarter campaign who collected $31,753 from 101 supporters but didn’t deliver the goods he promised in return for pledges or turn over donations to the charities identified in the campaign. The defendant agreed to pay restitution and civil penalties, and not to conduct any charitable sales promotions or act as a commercial co-venturer for at least five years, after which he must meet certain conditions to regain these privileges.
- Attorney General Yost announced a suit against a roofing contractor accused of pocketing nearly $45,000 in payments from consumers for whom it did not finish (or in some cases, start) the agreed-upon projects. The complaint alleges that the defendant sold roofing services and new roofs to consumers, accepted deposits from those customers or their insurance companies, then failed to deliver the promised work. The suit further asserts that he didn’t issue refunds, as required by Ohio law, or provide his clients with the legally mandated notice of consumers’ right to cancel their contracts.
- Attorney General Henry announced a settlement with Omni Hotels Management Corporation (Omni) regarding the company’s disclosure of “resort fees” and “drip pricing” — practices that leave consumers with surprisingly larger bills at checkout. Under the settlement, Omni agreed to immediately disclose all fees attached to a stay so consumers can budget responsibly and have the ability to compare prices. The Attorney General has been engaged in broader efforts to hold hoteliers accountable for hidden fees and “drip pricing” — fees added on as consumers progress through the booking process.
- Attorney General Miyares announced that the state of emergency declared in response to wildfires in the western part of the state triggered anti-price gouging laws. He explained that the basic test for determining if a price is unconscionable is whether the post-disaster price grossly exceeds the price charged for the same or similar goods or services during the ten days immediately prior to the disaster.
- Attorney General Miyares sent a letter to the FDA asking for increased regulation of illegal e-cigarettes and vaporizers. The letter notes that while steps have been taken to restrict youth access to these products, there is no centralized enforcement mechanism or license to hold shops accountable.
- Attorney General Kaul announced new legislation to ensure that people convicted of violent offenses related to domestic violence are unable to legally purchase or possess firearms in Wisconsin. The bill reorganizes two statutes—the crime of disorderly conduct and the definition of domestic abuse—so that individuals convicted of disorderly conduct as a result of domestic violence are prohibited from possessing a firearm.