2014 Election

Connecticut Election Results

  • Incumbent AG George Jepsen (D) and Kie Westby (R) received their respective parties’ nomination after both ran unopposed in the primary. They will face Stephen Fournier (Green Party) in the general election.

Minnesota Election Results

  • Incumbent AG Lori Swanson (D), who ran unopposed in the Democratic primary, will face Scott Newman (R), Andy Dawkins (Green Party), Brandon Borgos (Independence Party), Mary O’Connor (Libertarian Party), and Dan Vacek (Independent) in November’s general election. Newman defeated Sharon Anderson in the Republican primary by a margin of 63% to 37%.

Wisconsin Election Results

  • In an open seat primary in Wisconsin, Susan Happ defeated Jon Richards and Ismael Ozanne for the Democratic nomination by a margin of 52% to 33% and 15%. Happ will face Brad Schimel, who ran unopposed in the Republican primary, and Thomas Nelson, Sr. (Libertarian) in November’s general election. Incumbent AG J.B. Van Hollen (R) chose not to run for reelection.

Consumer Financial Protection Bureau

Consumer Financial Protection Bureau Begins Accepting Virtual Currencies Complaints

  • The Consumer Financial Protection Bureau (CFPB) simultaneously issued a consumer advisory and announced that it will begin accepting complaints related to virtual currencies, such as Bitcoin, which are alternatives to current payment systems.
  • According to CFPB Director Richard Cordray, the virtual currency market is like the “Wild West.” The CFPB stated that virtual currency exchange rates are volatile, have unclear costs, are subject to risk from serious data security threats, and may not offer refunds for lost or stolen funds.
  • The CFPB also warns consumers that neither the Federal Deposit Insurance Corporation nor the National Credit Union Share Insurance Fund, which insure losses in the event a covered entity fails, extends coverage to virtual currency accounts.

Consumer Protection

Twenty-Nine Attorneys General Submit Comments to FDA Urging Regulation of E-Cigarettes

  • The AGs from IllinoisIndianaMassachusetts, and New York, joined by 25 other AG signatories, submitted comments to the Food and Drug Administration (FDA) in support of an FDA proposed rule and urging it to take additional steps in the regulation of e-cigarettes. The AGs particularly emphasized the importance of adding regulatory protections for young people.
  • The FDA’s proposed rule would deem e-cigarettes tobacco products and bring those products within the FDA’s jurisdiction under the Food, Drug, and Cosmetic Act, as amended by the Family Smoking Prevention and Tobacco Control Act.
  • Among other things, the AGs urged the FDA to prohibit flavors, other than tobacco and menthol; apply the same advertising and marketing restrictions already in place for cigarettes to e-cigarettes; and strengthen health warnings.

Vermont Attorney General Seeks to Dismiss Lawsuit Filed in Opposition to State Genetically Engineered Food Labeling Law

  • In Vermont federal district court, Vermont AG William Sorrell filed a motion to dismiss a lawsuit brought by food manufacturer trade associations. The lawsuit seeks to invalidate state Act 120, which requires the labeling and disclosure of foods produced with genetic engineering.
  • The motion argues that the act’s essential requirements are appropriate under the First Amendment and serve legitimate state interests, that the statute is not impermissibly vague, that the act does not violate the Commerce Clause because there is not a significant burden on interstate commerce, and that the act is not expressly or impliedly preempted because it is a valid exercise of the state’s regulatory power.
  • The motion also argues that several plaintiffs lack standing to bring the lawsuit and that the state governor and health and finance commissioners are not proper defendants because they are not responsible for enforcing the act.

New York Attorney General Enters Into Agreement With Retailer Regarding Allegations of Racial Discrimination of Customers

  • After an investigation, New York AG Eric Schneiderman entered into an agreement with Barneys New York to resolve allegations that it racially discriminated against minority customers.
  • The AG found that Barneys lacked comprehensive written policies regarding racial profiling and objective race-neutral criteria for investigating possible shoplifting or credit card fraud.
  • Pursuant to the agreement, Barneys will pay $525,000 in costs, fees, and penalties; retain an antiprofiling consultant; establish new recordkeeping requirements; limit access to closed-circuit televisions; adopt new loss-prevention and antiprofiling policies; develop new employee training; and investigate all customer complaints of profiling.

Vermont Attorney General Settles “Cramming” Allegations

  • Vermont AG William Sorrell settled “cramming” allegations with Enhanced Services Billing, Inc., for $200,000. “Cramming” is the practice of adding unauthorized charges to telephone bills.
  • According to the complaint, which the AG filed in May, Enhanced Services violated state law by facilitating cramming by Localbizusa, a web services seller, and failing to alert customers of the charges. Localbizusa allegedly signed businesses up for web services without consent, used deceptive telemarketing, and failed to provide required disclosures.
  • Enhanced Services will pay $75,000 in refunds to affected businesses and $125,000 to the state.

Virginia Attorney General Enters Into Agreement With Uber and Lyft Ridesharing Services

  • Virginia AG Mark Herring and Governor Terry McAuliffe announced agreements with ridesharing services Uber Technologies, Inc. and Lyft that will allow operation of these services in the state.
  • The agreements are the result of discussions with the companies following cease and desist letters sent by the Virginia Department of Motor Vehicles in June. According to the AG, the goals of the agreements are ensuring passenger safety, compliance with state law, appropriate insurance coverage, transparency of operations, and fairness among transportation providers.
  • Uber thanked the AG and Governor for “putting consumers first and embracing innovation, choice and opportunity.” Lyft stated that the agreement allows it “to continue providing safe rides and economic opportunity to Virginians as we work with state leaders to secure a permanent future for ridesharing.”

Employment

Massachusetts and New Hampshire Attorneys General Send Letter to Retail Chain Regarding Laws Governing Worker Terminations

  • Massachusetts AG Martha Coakley and New Hampshire AG Joseph Foster sent a letter to Market Basket to remind it of state laws governing employee terminations. AG Coakley also established a hotline for Market Basket employees to use to file complaints.
  • Market Basket allegedly terminated several employees, which resulted in a number of calls to the AGs’ offices regarding workers’ rights.
  • The letter reminds the retailer that the states’ laws require an employer to pay an employee all wages upon termination. Wages include any bonuses; earned sick, holiday, or vacation pay; any benefit plan contributions due; and any earned commission. The letter also reminds the retailer that any violations of these laws may result in civil or criminal penalties or a civil lawsuit.

Environment

Fifteen Attorneys General Send Letter to EPA Objecting to Rule Potentially Impacting Clean Water Act Exemption

  • Nebraska AG Jon Bruning, joined by Iowa AG Tom Miller and 13 other state AGs, sent a letter to the Environmental Protection Agency (EPA) to object to its rule, which would allegedly narrow the Clean Water Act exemption for “normal farming activities.”
  • The Clean Water Act provides an exemption for normal farming activities from permitting requirements for discharge of dredged or fill material. The AGs argue that normal farming activities is broadly defined and includes upland soil and water conservation practices, but that the EPA rule would arbitrarily narrow the scope and impermissibly eliminate the exemption for many of these activities.
  • The AGs also argue that the rule is unlawful because it was not issued in compliance with the notice and comment procedure required by the Administrative Procedure Act.

Kansas Attorney General Petitions DC Circuit to Block an EPA Settlement Agreement Regarding Implementation of Carbon Emissions Regulations

  • Kansas AG Derek Schmidt petitioned a federal appeals court to block a final settlement agreement between the EPA, 11 states, and private environmental organizations. The terms of that agreement allow the EPA to proceed with regulating carbon dioxide emissions from existing coal-fired power plants under the Clean Air Act.
  • In support of his argument, AG Schmidt states that the U.S. Supreme Court has held that the EPA lacks authority to regulate existing power plants under the Clean Air Act and that doing so will impose substantial new costs on existing power plants that will be passed on to consumers. He also states that the agreement represents a “sue and settle” arrangement that allows special interests and federal regulators to improperly exclude consumers and citizens from the process.
  • We recently blogged about a petition submitted by 12 other AGs in this case that seeks review of the agreement and asserts that the agreement was unlawful as to coal-fired power plants because those plants are already regulated under the Clean Air Act and cannot be subject to double regulation.

Texas Attorney General Opposes Proposed EPA Rule Regarding Navigable Waters

  • Texas AG Greg Abbott sent a letter to the EPA urging it to withdraw proposed rulemaking for navigable waters under the Clean Water Act. AG Abbott claims that the proposed rule exceeds the EPA’s authority to regulate navigable waters and will convey to the federal government a potentially boundless amount of jurisdiction over water and land.
  • In support of his argument, AG Abbott stated that the proposed rule is contrary to Congress’s objective in passing the Clean Water Act, is inconsistent with U.S. Supreme Court precedent, lacks cooperative federalism, is without scientific or economic justification, and would erode private property rights.

Medicaid Fraud

Texas Attorney General Settles Medicaid Fraud Allegations for $19.5 Million

  • Following an investigation, Texas AG Greg Abbott settled with Taro Pharmaceuticals USA, Inc., for $19.5 million to resolve allegations that it fraudulently reported inflated drug prices to the Medicaid program, causing the program to reimburse pharmacies more than it should have for certain products.
  • According to the AG, when manufacturers report inflated market prices for products to the Medicaid program, the program may reimburse the pharmacies at the inflated rate. Taro allegedly used the difference between actual market rate and the inflated rate to induce pharmacies to purchase its products.
  • Because the state and federal governments jointly fund Medicaid, a portion of the settlement will be paid to the federal government.

Mortgages/Foreclosures

Connecticut and Florida Attorneys General Sue Mortgage Rescue Relief Service Provider

  • Connecticut AG George Jepson and Florida AG Pam Bondi sued and obtained a temporary restraining order against Berger Law Group, Resolution Law Group, and related entities and individuals alleging that they engaged in deceptive practices and illegally collected upfront fees from distressed homeowners.
  • The temporary restraining order freezes assets and prohibits the defendants from collecting any fees or making any misrepresentations. The complaint alleges collection of advance fees, misrepresentations, and failure to make certain disclosures in violation of Regulation O; violations of the state deceptive and unfair trade practices act; and civil theft.
  • The AGs seek permanent injunctive relief; consumer relief, including rescission and reformation of contracts, refunds, restitution, and disgorgement; civil penalties; and costs.

Pharmaceuticals

Forty-Two Attorneys General Settle for $35 Million to Resolve Allegations of Deceptive Marketing Practices

  • Forty-two AGs settled with Pfizer to resolve claims that its subsidiary, Wyeth Pharmaceuticals Inc., engaged in improper marketing of the drug Rapamune prior to Wyeth’s acquisition by Pfizer. The settlement requires Pfizer to pay $35 million to the states.
  • Rapamune is an immunosuppressive drug approved by the FDA for use after kidney transplants. Wyeth allegedly improperly promoted Rapamune for unapproved uses, including for use after liver, heart, and lung transplants.