United States: State AGs In The News 12 Dec 2013

Virginia Attorney General Race: Court Announces Rules for December 16 Recount

• The three-judge panel overseeing the Virginia Attorney General race vote recount has issued an order outlining the rules that will govern the recount. State Senator Mark Herring defeated fellow State Senator Mark Obenshain by 165 votes out of 2.2 million cast in the closest statewide election in Virginia's history.
• The order allows attorneys for Herring and Obenshain to gain considerable access to election materials and defines the role of partisan recount observers.
• An attorney for Obenshain has raised the possibility of invoking a state law to contest the election in Virginia's General Assembly if he loses the recount.

CONSUMER FINANCIAL PROTECTION BUREAU

CFPB Announces Rulemaking Agenda for 2014

• The Consumer Financial Protection Bureau has announced its fall 2013 rulemaking agenda demonstrating a continued focus on implementing the Dodd-Frank Act and looking to the major markets for consumer financial products and services in addition to consumer mortgages.
• The CFPB will be looking at mortgage issues particularly in rural or underserved areas, changes to the Home Mortgage Disclosure Act, and rules on prepaid card products.
• The CFPB is also assessing the need for more regulation related to debt collection, payday loans and deposit advance products, and bank overdraft programs.

CONSUMER PROTECTION

Ohio Attorney General Investigates Men's Clothing Store

• Ohio AG Mike DeWine subpoenaed Jos. A. Bank Clothiers Inc. to investigate the company's advertising and marketing practices.
• Jos. A. Bank has faced two lawsuits in the past year related to its "buy one get one free" promotions that are based on the purchase of an item at regular price.
• The lawsuits allege that the term "regular price" is deceptive because most purchases are made with some sale or discount.
• Florida AG Pam Bondi subpoenaed Jos. A. Bank in 2012, but has since recommended that the case be closed.

Colorado Attorney General Sues Allegedly Fraudulent Debt Collection Companies

• Colorado AG John Suthers filed a civil lawsuit against United Credit Recovery, GTF Services, and Standley & Associates for allegedly using fraudulent bank documents and engaging in deceptive trade practices.
• United Credit Recovery's principal and director, Leonard Potillo, who was also sued, allegedly purchased consumer debt from banks and then used account information provided by the banks to create hundreds of fake affidavits purporting to describe and to verify debt owed by consumers.
• United Credit Recovery also allegedly sold accounts to other agencies, such as GTF Services, who used those accounts to file more than 300 debt collection lawsuits through its law firm Standley & Associates.
• Colorado's complaint asks the courts for civil penalties, actual damages, and restitution for all injured consumers, and costs, expenses, and attorneys' fees.

Arkansas Attorney General Sues Children of Veterans Foundation Charity

• Arkansas AG Dustin McDaniel filed a consumer protection suit against Arizona-based Children of Veterans Foundation for allegedly diverting clothing items to a for-profit company, Give Back to Freedom LLC, operated by one of the foundation's directors.
• "Our veterans put their lives on the line for our country and our freedom, and it is appalling to think that someone would exploit their service for personal gain," McDaniel said. "Not only that, but this company's actions harm legitimate charities that actually need and would put to good use the donations that consumers may provide."
• The lawsuit asks the court to enter an order requiring defendants to cease the illegal practice and pay restitution to consumers, in addition to penalties.

FOR-PROFIT COLLEGES

Colorado Attorney General Settles with For-Profit University

• Colorado AG John Suthers has filed a civil lawsuit and stipulated consent judgment against Argosy University and parent company Education Management Corporation for allegedly deceiving, misleading, and financially injuring students seeking doctorate of education in counseling psychology degrees.
• The AG's office alleges that its investigation into student complaints dating back to 2007 has "revealed a pattern of Argosy recklessly launching doctoral degree programs without substantiating or supporting that they led to the advertised outcomes."
• Argosy allegedly led students to believe that they were seeking accreditation by the American Psychological Association (APA) and that upon graduation they would be eligible for Colorado license. Both were allegedly not the case.
• As part of the consent judgment, Argosy University agreed to pay $3.3 million.

INSURANCE

Student Insurer Settles Alleged Loss Ratio Violations

• New York AG Eric Schneiderman announced a settlement with Markel Insurance Company for allegedly overcharging on 22,000 college student health plans by failing to meet minimum loss ratio requirements, and for creating bonus incentives for brokers to keep the loss ratios below the legal minimum.
• A loss ratio is the ratio of the amount paid out in claims under a plan compared to the premium charged under that plan, and requires health insurance plans to pay at least 65 cents on medical care for every dollar of premium.
• The terms of the settlement include more than $2.75 million in refunds to colleges and students and a penalty of $990,000. Markel no longer offers student health, accident, or sports accident insurance plans in the state.

PHARMACEUTICALS

Attorneys General Concerned Over FDA Approval of Narcotic Zohydro

• The AGs of 29 states have sent a letter to the commissioner of the U.S. Food and Drug Administration asking for a reconsideration of their recent decision to approve the high-dose narcotic painkiller Zohydro ER. Zohydro ER is the first hydrocodone-only opioid narcotic, reportedly many times more potent than traditional hydrocodone products.
• An FDA advisory panel had voted, 11 to 2, against approval of the drug because it is not made in a formulation designed to deter abuse.
• The AGs' letter asks that if the FDA will not reconsider the approval, then it should set a rigorous timeline for the drug's reformulation to require abuse-deterrent properties.

STATES v. FEDERAL GOVERNMENT

West Virginia Attorney General Files U.S. Supreme Court Amicus on Firearm Sales

• West Virginia AG Patrick Morrisey and 26 Attorneys General have filed an amicus curiae brief in the U.S. Supreme Court asking the Court to protect their citizens' freedom to legally transfer firearms between individuals. Abramski v. United States, No. 12-1493.
• Abramski, a former Roanoke, Virginia police officer purchased a gun using a law enforcement discount and then sold it to a Pennsylvania relative. For this, Abramski was prosecuted by federal authorities for alleged false statements on the gun purchase form, and was subsequently convicted.
• The case centers on whether the intent to resell a firearm purchased from a federally licensed firearm dealer is material to the lawfulness of the sale. The U.S. Court of Appeals for the Fourth Circuit upheld Abramski's conviction, reasoning that such "straw purchases" are illegal under federal law.

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