Attorneys General Testify in House Hearing on Big Tech and Competition

  • On March 18, 2021, Colorado AG Phil Weiser and Nebraska AG Doug Peterson testified before the Subcommittee on Antitrust, Commercial, and Administrative Law of the House’s Committee on the Judiciary in a hearing titled “Reviving Competition, Part 3: Strengthening the Laws to Address Monopoly Power.” The Subcommittee’s focus in this series of hearings is the economic power of Big Tech corporations, including social media companies.
  • The first hearing of the Subcommittee’s series of hearings on reviving competition was focused on proposals addressing Big Tech’s gatekeeper powers and lowering barriers to entry, while the second hearing was focused on maintaining a diverse and free press.

Consumer Protection

Assisted Living Facilities Sued over Allegations of Unlawful Patient Discharge Practices, Misleading Information

  • California AG Xavier Becerra sued assisted living facilities operator Brookdale Senior Living, Inc. (“Brookdale”) over allegations that it failed to properly notify its patients and their families of transfers and discharges, and that it provided false information to manipulate its ratings by the Centers for Medicare & Medicaid (“CMS”) in violation of California’s Unfair Competition Law and False Advertising Law.
  • The complaint alleges that Brookdale endangered the health of its patients by not providing the legally required 30-day notice to patients, their families, and the California Long Term Care Ombudsman prior to transfers or discharges of patients from skilled nursing facilities. In addition, Brookdale allegedly did not properly prepare patients for their transfer or discharge. The complaint also alleges that Brookdale over-represented the number of its nursing staff hours to CMS in order to obtain a higher star rating on CMS’s website for consumers.
  • The complaint seeks injunctive relief, restitution, and civil penalties.

Data Privacy & Security

Debt Collector Reaches Settlement Over Data Breach Exposing Personal Information of Up to 21 Million Consumers

  • A bipartisan group of 41 AGs, led by Connecticut AG William Tong, Indiana AG Todd Rokita, New York AG Letitia James, and Texas AG Ken Paxton, reached a settlement with debt collection agency Retrieval-Masters Creditors Bureau d/b/a American Medical Collection Agency (“AMCA”) over allegations that it failed to protect the personal information of millions of consumers in a 2019 data breach in violation of the states’ respective consumer protection laws.
  • According to the New York AG’s office, an unauthorized user accessed AMCA’s internal systems from August 2018 to March 2019, and AMCA failed to detect the intrusion despite warnings from third parties that processed its payments. The hacker accessed the data of up to 21 million consumers and collected a variety of personal information, including Social Security numbers, payment card information, and medical tests and diagnostic codes. AMCA also filed for bankruptcy in June 2019, which was dismissed in December 2020.
  • Under the terms of the settlement, AMCA agreed to implement and maintain an information security program with detailed requirements, including creating an incident response plan, and hiring a third-party assessor to evaluate its information security, among other things. AMCA may also be liable for up to a $21 million total payment to the states, but the payment is suspended so long as AMCA does not violate the settlement’s injunctive terms.

Additional CCPA-Related Regulations Strengthen Consumers’ Ability to Control the Sale of Their Personal Information

  • California AG Xavier Becerra announced new regulations, effective immediately, pursuant to the California Consumer Privacy Act (“CCPA”) that provide consumers additional tools for protecting their data privacy.
  • Among other things, the newly-approved regulations prohibit companies from delaying or obscuring the process for opting out of the sale of personal information by using confusing language, such as double-negatives, or unnecessary steps, such as forcing users to click through multiple screens, in order to opt-out.
  • The new regulations also provide a standardized opt-out icon that businesses may use to communicate the privacy choices available to consumers. This icon may be used in addition to posting the legally required notice about consumers’ right to opt-out, but it does not replace the need for posting the notice.

Health Care

Virginia Secures Nearly $40 Million in Settlement with Defunct Tobacco Company

  • Virginia AG Mark Herring reached a settlement with defunct tobacco company S&M Brands Inc., a tobacco manufacturer that did not sign the 1998 Tobacco Master Settlement Agreement, to end S&M Brands’ responsibility under Virginia’s Non-Participating Manufacturers (“NPM”) statutes to establish and fund a Qualified Escrow Fund account controlled by the Commonwealth.
  • According to the AG’s office, S&M Brands, like all other NPMs, are required to make regular deposits, calculated on the basis of their sales, into Qualified Escrow Fund accounts that can be used to satisfy judgments against the NPM. Unless the NPM assigns its funds to the Commonwealth earlier, the funds left in the escrow accounts were set to be returned to the NPM 25 years after the fund was established. S&M Brands agreed to assign the rights to certain funds to the Commonwealth before the 25 years expired in return for the right to retain a portion of the escrow account funds.
  • Under the terms of the settlement, S&M Brands agreed to pay over $39 million to the Commonwealth and the money will be deposited into the Virginia Health Care Fund.

State v. Federal

Ohio Attorney General Dave Yost Files Lawsuit Challenging American Rescue Plan Tax Provision

  • Ohio AG Dave Yost filed a motion for preliminary injunction challenging as unconstitutional a provision of the $1.9 trillion American Rescue Plan that purportedly prevents states and local governments from using COVID-19 relief funds to offset tax cuts.
  • In its motion, the AG’s office alleges the tax provision exceeds Congress’s Spending Power and, if enforced, would cause irreparable harm to Ohio by forcing it to choose between maintaining its sovereign tax power or accepting the $5.5 billion in funding to help Ohio recover from its $1.1 billion revenue loss caused by the pandemic.
  • The AG filed its motion one day after a group of 21 Republican AGs, led by Arizona AG Mark Brnovich, Georgia AG Chris Carr, and West Virginia AG Patrick Morrisey, sent a letter to Treasury Secretary Janet Yellen requesting clarification of whether the tax provision would be narrowly interpreted to prohibit states from expressly using the funds to provide direct tax cuts or whether it would be broadly interpreted to apply to tax relief of any kind, even if it is independent and unrelated to the COVID-19 relief funds. Like the AG’s motion, the letter argues that the broader interpretation would unconstitutionally intrude upon state sovereignty.