United States: State AGs In The News 17 Apr 2014

Hot News

Delaware Attorney General Declines 2014 Reelection, Will Seek Governorship in 2016

  • Delaware AG Joseph "Beau" Biden III announced today that he will not seek reelection in 2014, and instead will stand for Governor in 2016.
  • According to a statement on AG Biden's website, he "concluded that it is not right to ask for your support in 2014, knowing that my focus would be divided between doing my job as Attorney General while at the same time running as a candidate for Governor."
  • AG Biden has been Delaware AG since 2007. He is also a JAG officer in the Delaware Army National Guard and served a tour in Iraq from 2008–2009. He is the son of Vice President Joe Biden.
  • No Republican candidate has yet declared a challenge to AG Biden, so the AG race is wide open as of this writing. The filing period closes July 8.

Antitrust

Court Denies Apple's Motion to Dismiss State AGs' Antitrust Claims

  • A court in the Southern District of New York recently denied Apple, Inc.'s, motion to dismiss antitrust damages claims by the AGs of 33 states and territories. The AGs allege that the company conspired with publishers to fix prices for e-books. In 2013, the court ruled against Apple in the liability phase of the case and ordered further proceedings on damages.
  • Apple's recent motion to dismiss asserted that the states lacked standing to recover monetary damages since they sued in their parens patriae capacity. In the alternative, the company argued that the states should be required to seek class certification. The court rejected both arguments.
  • The offices of Texas AG Greg Abbott and Connecticut AG George Jepsen are leading the states' efforts in the case. The trial is set for July 14 on the states' damages claims.

Consumer Financial Protection Bureau

CFPB Orders Bank of America to Pay $727 Million in Consumer Relief and a $20 Million Penalty

  • The Consumer Financial Protection Bureau ordered Bank of America, N.A. and FIA Card Services, N.A. (Bank of America) to pay an estimated $727 million to customers allegedly harmed by Bank of America's credit card add-on products and to pay a $20 million civil penalty for violations of the Consumer Financial Protection Act.
  • Bank of America allegedly used deceptive marketing practices, including telemarketing scripts containing misstatements, to sell credit protection add-ons meant to cancel a portion of the consumer's credit card debt in the event he or she experienced certain hardships, such as involuntary employment. The allegedly deceptive marketing practices, estimated to have affected 1.4 million consumers, included misleading consumers about the cost of coverage, the enrollment process, and the benefits of credit protection products.
  • In addition, Bank of America allegedly illegally charged approximately 1.9 million consumers for identity protection add-on monitoring services that were not received by the consumer because Bank of America allegedly had not obtained the necessary authorization to perform the monitoring.
  • The consent order prohibits Bank of America from engaging in illegal practices and requires it to end allegedly unfair billing practices, repay affected customers, and pay the civil penalty.

Consumer Protection

Attorneys General Launch No-Call Law Enforcement Summit

  • Representatives from more than 20 AG offices participated in the first-ever national No-Call Law Enforcement Summit launched by Indiana AG Greg Zoeller and Missouri AG Chris Koster.
  • The goal of the summit was to help state and federal agencies identify best practices on how to stop unwanted calls and prosecute violators. "As is true in many states, the largest category of consumer complaints filed in Missouri each year involves violations of state No Call and telemarketing laws," said AG Koster.
  • In addition to the representatives from the attorneys general offices, the summit included participants from the Federal Trade Commission, the Federal Communications Commission, and the U.S. Department of Justice.

Massachusetts Attorney General Announces Settlement over Alleged Advertising Violations

  • Massachusetts AG Martha Coakley announced that her office has settled claims against two companies related to alleged deceptive marketing of home water filtration systems. The AG's suit against Basement Technologies, Inc., and McMahon Plumbing & Heating LLC alleged that the companies violated consumer protection laws by suggesting in their advertising that the water supplied to consumers was not safe to drink.
  • Under the settlement, the companies agreed not to misrepresent the safety of water supplied by any Massachusetts public water system. The settlement also requires the companies to comply with the Commonwealth's requirements for reporting water test results to possible purchasers of filtration systems. Basement Technologies will pay $20,000 in costs and penalties, and McMahon Plumbing & Heating will pay an additional amount.
  • AG Coakley said in a statement that the AG's office "allege[d] this advertising misled residents about the quality of their drinking water that our environmental and public health agencies in the Commonwealth work so hard to protect" and that "[o]ur office is pleased that these settlements will ensure that these companies follow our consumer laws and stop their deceptive sales tactics."

Data Privacy

Kentucky Legislature Passes Data Breach Notification Law

  • Kentucky has passed a data breach notification law requiring companies to notify consumers when a data breach reveals personally identifiable information. "Personally identifiable information" is defined as a first name or initial and last name along with a Social Security number, driver's license number, or account number and access information. Governor Steve Beshear signed the bill into law on April 10.
  • Among other provisions, Kentucky's law requires holders of personally identifiable information to disclose specified security breaches to Kentucky residents whose unencrypted personally identifiable information was acquired or "reasonably believed to have been[] acquired" without authorization.

Environment

Illinois Attorney General Announces Agreed Order on Environmental Investigation

  • Illinois AG Lisa Madigan announced that Wood River Pipe Lines, LLC, and Buckeye Partners, LP, have agreed to provide reports to the AG and the Illinois Environmental Protection Agency (EPA) about cleanup efforts at the site of an oil spill in Kankakee County and to take other steps.
  • The Illinois EPA referred an enforcement action related to the March 14 spill to the AG's office. AG Madigan's office filed suit against the companies, alleging violations of the Illinois Environmental Protection Act and Illinois Pollution Control Board rules.
  • According to the AG, the agreed order requires the companies to provide reports on cleanup work, to propose steps for monitoring and remediating potential contamination, and to test for potential contamination of local well water and the Kankakee River.

Wyoming Attorney General Seeks Dismissal of Montana Water Rights Suit

  • The state of Wyoming, represented by the office of AG Peter Michael, sought to dismiss Montana's claims alleging that Wyoming violated a water-rights agreement by taking too much water from Yellowstone River tributaries. 
  • In its post-trial brief, Wyoming argued that the amount of water in dispute was minimal and that any water shortages in Montana resulted from that state's own practices and not from a violation of the states' water compacts by Wyoming. The brief also addresses how groundwater affected by coal-based methane production should be treated under the states' agreements.
  • The dispute is presently before a special master appointed by the Supreme Court to hear evidence and issue a recommendation to the Court. According to news reports, a post-trial hearing is scheduled in the matter for May 1.

Intellectual Property

Vermont Attorney General Testifies Before Congress about "Patent Troll" Demand Letters

  • Vermont AG Bill Sorrell testified at the request of Congressman Peter Welch before a subcommittee of the U.S. House of Representatives Committee on Energy and Commerce to encourage Congress to address unfair and deceptive patent demand letters.
  • The hearing was convened to examine ways to prevent abusive patent demand letters while preserving the right of businesses to use demand letters legitimately to negotiate licenses to their inventions.
  • According to AG Sorrell, "patent trolls" often target small businesses and non-profits and send them demand letters for the use of off-the-shelf technology being used for its intended purpose. The letters often lack explanation and may include inaccurate or misleading assertions intended to pressure recipients to purchase a license in a short timeframe—creating a difficult and confusing analysis for that business.
  • Our blog post discusses recent developments in AG Sorrell's suit alleging that an entity sent patent demand letters purportedly in bad faith.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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