Cannabis/Marijuana

South Dakota Attorney General Issues Clarifying Statement on Legality of Industrial Hemp and Cannabidiol Oil

  • South Dakota AG Jason Ravnsborg issued a clarifying statement regarding the legality of industrial hemp and cannabidiol (“CBD”) oils after Congress passed the December 2018 Farm Bill legalizing CBD derived from industrial hemp with a tetrahydrocannabinol (“THC”) concentration of not more than .3%.
  • AG Ravnsborg concluded that, under state law, industrial hemp and all forms of CBD oil are illegal, with the exception of the prescription drug Epidiolex.
  • As previously reported, Alabama AG Steve Marshall issued a Public Notice concluding that possession, use, sale, and distribution of CBD derived from marijuana or hemp with under a .3% THC concentration is legal, in accordance with the federal standard, but CBD products above a .3% THC concentration remain illegal under state law.

Consumer Financial Protection Bureau

CFPB and FTC Release Annual Report on Administration of Fair Debt Collection Practices Act

  • The Consumer Financial Protection Bureau (“CFPB”) and the Federal Trade Commission (“FTC”) released their annual report to Congress on administration of the Fair Debt Collection Practices Act (“FDCPA”), providing an overview of the agencies’ law enforcement, education and public outreach, and policymaking efforts.
  • According to the report, the largest category of consumer complaints received by the CFPB related to debt collectors’ attempts to collect debt not owed, via written notifications, threatened or actual legal or negative actions, false statements or representations, and threats to contact third-parties or improperly share information. The report further indicated that the CFPB is planning to issue a Notice of Proposed Rulemaking addressing issues such as debt collection communication practices and consumer disclosures.
  • The report indicated that the FTC brought or resolved seven debt collection cases against 52 defendants arising from alleged FDCPA violations in 2018, including four actions involving “phantom debt collection”—attempts to collect on debts that do not exist or are not owed.
  • As previously reported, the CFPB’s October 2018 “Complaint Snapshot: 50 State Report,” which provided an overview of trends in consumer complaints about financial products and services, also reported that consumers filed the most complaints about attempts to collect debt not owed.

Consumer Protection

Florida Attorney General Sues Online High School Operator Over Allegedly Deceptive Advertising and Failing to Provide Instruction for Students

  • Florida AG Ashley Moody filed a lawsuit against online high school operator Ellenwood Academy, LLC and an affiliated individual (collectively, “Ellenwood Academy”) to resolve allegations that it deceptively marketed high school programs and failed to provide instruction for students in violation of the state’s Deceptive and Unfair Trade Practices Act.
  • According to the complaint, Ellenwood Academy allegedly advertised that its high school diplomas were accredited by the state Department of Education (“DOE”) when, in reality, it was not accredited by the DOE, causing its diplomas to be invalid for purposes of obtaining enrollment in higher education institutions or employment, among other things.
  • The complaint seeks injunctive relief, restitution, disgorgement, civil penalties, and attorney’s fees and costs, among other things.

Massachusetts Attorney General Settles with Genetic Testing Facility Over Alleged Medicaid Fraud

  • Massachusetts AG Maura Healey reached a settlement with genetic testing facility The Center for Human Genetics, Inc. (“CHG”) over allegations that its billing practices violated state Medicaid regulations.
  • According to the AG’s office, CHG allegedly submitted incorrect billing codes for genetic tests, which caused it to improperly bill MassHealth—the state’s Medicaid system—for reimbursement claims and delayed the results of certain genetic tests to patients while it billed MassHealth for additional claims.
  • According to the AG’s office, under the terms of the settlement agreement, CHG must pay $500,000 to MassHealth and comply with all relevant state and federal laws and regulations.

Massachusetts Attorney General Settles With Real Estate Company Over Alleged Racial and Income-Based Discrimination

  • Massachusetts AG Maura Healey reached a settlement with real estate company Metropolitan Properties of America, Inc. and its subsidiary (collectively, “MPA”) to resolve allegations that it employed discriminatory leasing policies and practices in violation of state fair housing, civil rights, and consumer protection laws, and a 2015 assurance of discontinuance with the AG’s office.
  • According to the AG’s office, MPA allegedly discriminated against prospective tenants based on their race and qualification for public assistance vouchers in an effort to limit rentals to minority and low-income people at one of its apartment complexes by treating them with hostility and disrespect, providing them with false and misleading information about the availability and pricing of apartments, and subjecting them to burdensome leasing procedures—such as requesting proof of employment, passports, visas, and social security cards—based on MPA’s perception of their national origin.
  • According to the AG’s office, MPA must pay $600,000, of which $100,000 will be suspended for three years pending compliance with the agreement, update its fair housing and leasing policies, and train its employees to comply with the updated policies and fair housing laws.

New Jersey Attorney General Sues Online Gun Retailer Over Allegedly Misrepresenting Legality of “Ghost Guns”

  • New Jersey AG Gurbir Grewal filed a lawsuit against online gun retailer James Tromblee, Jr. d/b/a U.S. Patriot Armory and fictitious individuals and corporations involved in the alleged conduct (collectively, “U.S. Patriot Armory”) over allegations that it misrepresented the legality of the guns offered for sale in violation of the state Consumer Fraud Act, regulations regarding hazardous products and advertising, and a 2018 cease and desist letter from the AG’s office.
  • According to the complaint, U.S. Patriot Armory allegedly advertised and sold unregistered and unserialized “ghost guns”—partially assembled guns that are sold with the parts needed to create a fully-operational gun—to residents in the state, where ghost guns are illegal to manufacture, purchase, or possess, and misrepresented that ghost guns are legal in the state.
  • The complaint seeks declaratory and injunctive relief, orders requiring U.S. Patriot Armory to block the shipping of ghost guns or ghost gun parts to the state and include a statement on its website that ghost guns are illegal in the state, disgorgement, civil penalties, and costs and attorney’s fees, among other things.

Data Privacy & Security

District of Columbia Attorney General Introduces New Data Breach Law

  • District of Columbia AG Karl Racine announced the introduction of legislation that would modernize the District’s data breach law and strengthen protections for consumers’ personal information.
  • The Security Breach Protection Amendment Act of 2019 (“Act”), B23-0215, would expand the definition of “personal information” to include passport numbers, taxpayer and military identification numbers, health and genetic information, biometric data, and health insurance information; require companies that suffer data breaches to notify the AG’s office; require companies that own or handle personal information and third party service providers to whom personal information is disclosed to implement and maintain security safeguards; require security precautions be taken when companies destroy records of personal information; require companies that expose social security or taxpayer identification numbers to offer two years of free identity theft protection to affected consumers; and make a violation of the Act a violation of the District’s Consumer Protection Procedures Act.
  • The bill is currently pending in the Committee of the Whole.

Environment

11 Democratic Attorneys General File Amicus Brief Urging the Ninth Circuit to Reverse the Dismissal of Lawsuits Against Oil and Gas Companies Over Impacts of Climate Change

  • 11 Democratic AGs, led by California AG Xavier Becerra, filed an amicus brief in the U.S. Court of Appeals for the Ninth Circuit in the matter of City of Oakland and City and County of San Francisco v. BP, et al., Nos. 3:17-cv-06011-WHA, 3:17-cv-06012-WHA, in support of the plaintiff-appellants, urging the Circuit Court to reverse the U.S. District Court for the Northern District of California’s decision not to remand the cases to state court or, in the alternative, to reverse the District Court’s dismissal of the cases.
  • According to the amici states’ brief, the cases should not have been removed to federal court because climate change is not a uniquely federal interest because the cities and county also have an interest in the alleged responsibility of the group of energy and manufacturing companies for the impacts of climate change, and the District Court applied an improperly narrow interpretation of personal jurisdiction in dismissing the cases, among other things.
  • As previously reported, a coalition of 15 Republican AGs filed an amicus brief in the District Court in April 2018 in support of defendants’ Motion to Dismiss.

Gaming/Gambling

Bipartisan Coalition of 25 Attorneys General Pen Letter to U.S. Attorney General Regarding Opinion that Wire Act’s Prohibitions Apply to Online Non-Sports Gambling

  • A bipartisan coalition of 25 AGs, led by West Virginia AG Patrick Morrisey, sent a letter to the U.S. Department of Justice (“DOJ”) expressing concern over the DOJ’s January 2019 opinion, which concluded that the Wire Act’s prohibitions apply to online non-sports gambling (“Opinion”).
  • In the letter, the AGs warn that the DOJ’s interpretation of the Wire Act as expressed in the Opinion encroaches on state sovereignty, contradicts conclusions by the majority of states that multi-state lottery games are consistent with federal law, and contradicts the DOJ’s prior interpretation.
  • The letter requests a meeting with the U.S. Attorney General and that the DOJ extend the window for compliance from April 15, 2019 until at least August 13, 2019.
  • As previously reported, the New Jersey and Pennsylvania AGs sent a letter to the DOJ in February 2019 opposing the Opinion.

Pharmaceuticals

Oklahoma Attorney General Settles with Opioid Manufacturer for Allegedly Misrepresenting Risks of Prescription Opioids

  • Oklahoma AG Mike Hunter reached a settlement with opioid manufacturers Purdue Pharma L.P., Purdue Pharma, Inc., and The Purdue Frederick Company (collectively “Purdue Pharma”) to resolve allegations that they engaged in deceptive marketing and misrepresented the risks of prescription opioid use in violation of the state’s Medicaid False Claims Act, Medicaid Program Integrity Act, Consumer Protection Act, and the common law.
  • According to the complaint, Purdue Pharma allegedly used deceptive promotional campaigns to convince healthcare providers to prescribe opioids and minimized the risks and overstated the benefits of long-term use of prescription opioids to treat chronic pain, thereby causing submission of false or fraudulent claims for payment or approval from Medicaid.
  • According to the AG’s office, under the terms of the settlement agreement, Purdue Pharma will pay nearly $200 million to establish an endowment at Oklahoma State University’s Center for Health Sciences Center for Wellness and Recovery, $12.5 million in abatement costs to the state’s cities and counties, and $60 million for attorney’s fees and costs, and cease promoting opioids in the state, including ceasing to employ or contract with sales representatives to promote prescription opioids to health care providers in the state.

West Virginia Attorney General Settles with Pharmaceutical Companies Over Allegedly Deceptive Marketing of Prescription Blood Thinner

  • West Virginia AG Patrick Morrisey reached a settlement with pharmaceutical companies Bristol-Myers Squibb Company (“BMS”) and Sanofi-Aventis U.S. LLC, Sanofi US Services Inc., and Sanofi-Synthelabo, Inc. (collectively, “Sanofi”) to resolve allegations that they deceived consumers about the effectiveness of prescription anti-clotting medication Plavix in violation of the state’s Consumer Credit Protection Act, Public Employees Insurance Act, Insurance Fraud Act, and the common law.
  • According to the complaint, BMS and Sanofi allegedly marketed Plavix as being a superior drug to aspirin for certain indicated usages despite knowing that Plavix did not have superior efficacy, misrepresented Plavix’s efficacy for certain patients leading healthcare providers to prescribe higher doses of Plavix than medically necessary, and caused the state to overpay for prescriptions by charging one hundred times more for Plavix than aspirin, among other things.
  • Under the terms of the settlement agreement, BMS and Sanofi will each pay $1.6 million to the state, for a total settlement payment of $3.2 million.

State AGs in the News

Missouri Attorney General Creates Sunshine Law Open Records Portal

  • Missouri AG Eric Schmitt announced the creation of an online portal that tracks open records requests and related complaints received by the AG’s office.
  • The portal provides data visualizations relating to the state’s Sunshine Law—which authorizes public disclosure of governmental meetings, records, votes, actions, and deliberations—including completed disclosure requests received by the AG’s office dating back to January 2015, and closed Sunshine Law complaints handled by the AG’s office since January 2018.