United States: State AGs In The News - 1 May 2014

Last Updated: May 8 2014
Article by Bernard Nash and JB Kelly

Hot News

U.S. Supreme Court Upholds Michigan Constitutional Amendment Banning Use of Affirmative Action in Admissions

  • The U.S. Supreme Court ruled, in a 6-2 decision in the case of Schuette v. Coalition to Defend Affirmative Action, that the Michigan constitutional amendment banning the use of racial preferences in school admission decisions did not violate the U.S. Constitution. Justices Roberts, Breyer, and Scalia joined by Thomas filed concurring opinions. Justice Ginsburg joined Justice Sotomayor in dissent. Justice Kagan took no part in consideration or decision of the case.
  • The petitioner, Michigan AG Bill Schuette, praised the Court's decision that Michigan voters did not violate the Equal Protection Clause when they required equal treatment in university admissions. Arizona AG Tom Horne, who filed an amicus brief in support of Michigan joined by the AGs of Alabama, Georgia, Oklahoma, and West Virginia, also praised the decision.
  • The decision reversed a judgment of the U.S. Court of Appeals for the Sixth Circuit. The Supreme Court stated, "This case is not about how the debate about racial preferences should be resolved. It is about who may resolve it. There is no authority in the Constitution of the United States or in this Court's precedents for the Judiciary to set aside Michigan laws that commit this policy determination to the voters."
  • We had listed this as a case to watch in an October 2013 blog post. We also posted a summary of oral arguments and a copy of the transcript.

U.S. Supreme Court Reinstates EPA's Cross-State Air Pollution Rule

  • In a 6-2 decision in the case of U.S Environmental Protection Agency (EPA) v. EME Homer City Generation, the U.S. Supreme Court reversed the D.C. Circuit and reinstated the EPA's Cross-State Air Pollution Rule. The rule delineates the scope of the Clean Air Act's Good Neighbor Provision by limiting the emission of pollutants in upwind states that significantly contribute to keeping downwind states from meeting federal air quality standards. Justice Thomas joined Justice Scalia in dissent. Justice Alito took no part in consideration or decision of the case.
  • The Court held that the Clean Air Act does not command that states be given a second opportunity to file a plan after the EPA has quantified the state's interstate pollution obligations and that the EPA's "cost-effective allocation of emission reductions among upwind States is a permissible, workable, and equitable interpretation of the Good Neighbor Provision."
  • A coalition of 10 AG's and five cities, led by New York AG Eric Schneiderman, filed briefs with the Court in support of the EPA's rule. Nine other AGs filed an amicus opposing the EPA's rule. We also listed this as a case to watch in the October 2013 blog post.


Second Circuit Grants Apple Administrative Stay of Class Notification and Agrees to Hear Apple's Request for Stay of Damages Trial in Attorneys General Antitrust Case

  • The U.S. Court of Appeals for the Second Circuit granted Apple Inc.'s emergency motion seeking an administrative stay of the class notification, scheduled to commence on April 28, while the court determines the request for a stay pending appeal. In its decision, the court also referred to a 3-judge panel Apple's request for stays pending appeal of class notification and the damages trial scheduled to commence in July.
  • In this case, multiple 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.
  • The U.S. District Court for the Southern District of New York denied Apple's motion for stay pending appeal and its request for an administrative stay two days before the Second Circuit issued its order. The Southern District's decision followed its denial of Apple's motion to dismiss that we recently posted on the blog.


Massachusetts Attorney General Sues Former President and CEO of Non-Profit School

  • Massachusetts AG Martha Coakley sued Dr. Robert Gee, the former president and chief executive officer of the non-profit National Graduate School for Quality Management, Inc., for allegedly breaching his fiduciary duty of loyalty by collecting an excessive compensation and other benefits from the school without the school board of directors' knowledge or consent.
  • Dr. Gee allegedly collected excessive compensation through compensation agreements that the school board did not approve and gained other benefits without the board's knowledge, including a vacation property, a private residence, and several personal luxury vehicles.
  • The complaint seeks declaratory relief, disgorgement of funds obtained, restitution to the school, and an order that Dr. Gee not be allowed to serve again as a fiduciary for any state public charity. The AG also entered into an agreement with the school and the school board that requires the board to be reconstituted and approved by the AG's office and that the board provide regular reporting to the AG's office. Pursuant to the agreement, if the terms of the agreement are not met, the board will dissolve the school.

New York Attorney General Settles with Fundraiser Already Subject to Lifetime Fundraising Ban

  • New York AG Eric Schneiderman settled allegations of violations of a prior agreement with Mark Gelvan, owner of Raising Money, Inc., for $50,000. Gelvan was previously banned for life from fundraising in New York pursuant to a settlement agreement arising out of AG allegations that Gelvan made fraudulent claims to potential contributors regarding how he would use donations.
  • Gelvan allegedly solicited charitable donations in violation of the prior agreement by acting as a broker for another fundraiser, who in return agreed to give Gelvan a portion of the charitable donations.
  • Under the settlement, Gelvan must pay $50,000, which includes disgorgement of allegedly ill-gotten gains and a penalty. He also remains banned from conducting or receiving any benefits from the solicitation of charitable donations in the state.

Massachusetts Attorney General Sues Veterans Charity for Allegedly Deceptive Fundraising

  • Massachusetts AG Martha Coakley sued Veterans Community Foundation, Inc., its chief executive officer, and two branch managers (Veterans Community Foundation), alleging that they illegally solicited charitable donations and used deceptive fundraising techniques in violation of state charitable solicitation laws.
  • Veterans Community Foundation allegedly solicited donations in storefronts without a valid certificate of solicitation from the AG's office and allegedly used unfair and deceptive charitable solicitation practices during these fundraising campaigns.
  • The court issued a temporary restraining order preventing Veterans Community Foundation from any fundraising activities until it obtains a valid certificate. In addition to the temporary restraining order, the complaint requests a preliminary injunction barring Veterans Community Foundation from deceptive fundraising and ordering them to account for all money raised since 2012.

Consumer Protection

Florida Attorney General Confirms Multi-State Investigation Into Auto Manufacture Recall

  • Florida AG Pam Bondi's office confirmed that it is a part of a multi-state group that is forming to investigate complaints related to General Motors Co.'s recent recall of vehicles with faulty ignition switches.
  • In a quarterly financial report filed with the Securities and Exchange Commission, General Motors disclosed an investigation by a state attorney general and other government entities, stating: "We are also the subject of various inquiries, investigations, subpoenas, and requests for information from the U.S. Attorney's Office for the Southern District of New York, Congress, NHTSA, the SEC, and a state attorney general in connection with our recent recalls. We are investigating these matters internally and believe we are cooperating fully with all requests, notwithstanding NHTSA's recent fines for failure to respond. Such investigations could in the future result in the imposition of damages, fines, or civil and criminal penalties."

Vermont Attorney General Announces Illegal Lending Initiative

  • Vermont AG Bill Sorrell announced a sweeping effort to address illegal and predatory online lending, including actions against lenders under the state's consumer protection act.
  • Vermont has predatory internet lending legislation enacted in 2012 that makes lenders who fail to comply with lending requirements and those who process their electronic loan payments directly liable under the state's consumer protection act. The law also imposes direct liability on any person or business that knowingly and substantially assists illegal lenders.
  • "Online lenders are taking advantage of thousands of low and moderate income Vermonters. They offer illegal short-term, very high-interest loans via the internet. These predatory loans are designed to entrap consumers in long-term debt," stated AG Sorrell.
  • According to a report issued by AG Sorrell, his office has settled with three lenders and a payment processor for approximately $1 million in potential refunds and loan forgiveness for consumers and $90,000 in payments to the state.

Data Privacy

Florida Attorney General Supports Passage of Florida Information Protection Act

  • Florida AG Pam Bondi supported the passage of the Florida Information Protection Act of 2014, sponsored by State Senator John Thrasher, which provides new protections for personal information and expedites notice of data breaches.
  • The state senate unanimously passed Senate Bill 1524. It repeals previous legislation governing the breach of confidential personal information.
  • The new law requires covered entities to take reasonable measures to protect, secure, and dispose of electronic data containing personal information. It also requires covered entities to provide notice within 30 days of a breach or a reasonable determination that a breach occurred to consumers and to the AG's office if the breach affects more than 500 individuals. Entities must also provide notice to credit reporting agencies if they must notify more than 1,000 individuals of the breach. The law allows a 15-day extension for a good cause delay provided in writing within 30 days. Third-party agents of covered entities who maintain systems containing personal information must provide notice to the covered entity within 10 days.
  • The legislation also provides that: the AG must provide an annual report to the state legislature regarding any breaches reported by a government entity; the law does not allow private causes of action; and violations of the act shall be treated as an unfair or deceptive trade practice.


Amicus Brief Filed in U.S. Supreme Court by 21 Attorneys General Supporting Review of California Fuel Standards

  • Twenty-one AGs filed an amicus brief in the U.S. Supreme Court in the case of Rocky Mountain Farmers Union v. Corey asking the Court to review whether California's low carbon fuel standard is unconstitutional because it allegedly discriminates against interstate and foreign commerce and regulates aspects of fuel production occurring wholly beyond the borders of California.
  • The U.S. Court of Appeals for the Ninth Circuit reversed a lower court decision in September 2013 that had held that the low carbon fuel standards program was constitutional.
  • The AGs argue that the standards unfairly restrict interstate commerce by effectively prohibiting the use of ethanol and crude oil produced outside of California by assigning these fuels higher carbon intensities.


Illinois Attorney General Announces Court Order Requiring Cleanup of Soybean Oil Spill

  • Illinois AG Lisa Madigan announced an interim court order that requires BN National Trail Biodiesel, LLC to cleanup waterways allegedly polluted by a soybean oil spill at the company's facility.
  • The order requires the company to implement new operating procedures, install equipment designed to prevent overflows of contaminating substances, apply to the state environmental protection agency for required permits, and remediate the affected waterways by July 31.
  • A status hearing is set for August 12 regarding the interim order.

Financial Industry

New York Attorney General Settles Claims for $7.5 Million Related to Bank's Acquisition

  • New York AG Eric T. Schneiderman announced that his office has settled claims against Bank of America Corporation's former chief financial officer Joe L. Price related to the bank's 2009 acquisition of Merrill Lynch.
  • The AG's suit was filed under the state's Martin Act and a section of the state's executive law alleging that the defendants failed to disclose certain Merrill Lynch losses to shareholders and engaged in other activities related to the merger.
  • Under the settlement, Price will pay $7.5 million and is prohibited from serving as an officer or director of a public company for 18 months.
  • AG Schneiderman also recently settled claims against Bank of America and Bank of America's former chief executive officer Kenneth D. Lewis for $25 million.

State AGs in the News

New York Attorney General Defends Subpoenas Issued to Hosts of Online Lodging Service

  • During oral arguments in the Albany County Supreme Court, New York AG Eric Schneiderman's office defended subpoenas issued last fall to over 15,000 hosts renting space in New York city through Airbnb, an online lodging service.
  • AG Schneiderman issued the subpoenas as part of an investigation into possible non-payment of New York City hotel occupancy and state and city sales taxes and alleged violations of the state Illegal Hotel Law, which generally prohibits apartments from being rented in New York City for less than 30 days without the permanent occupant present.
  • Airbnb argues that there is no factual basis for the subpoenas and that they are overbroad and burdensome. Airbnb also expressed concern for the privacy of guests whose confidential information may be revealed during the investigation of Airbnb hosts.
  • The AG's office responded that it had sufficient evidence to support the subpoenas, including analysis of data from Airbnb's website, which revealed that nearly two-thirds of the listings were for less than 30 days and for the entire apartment. According to the AG's office, this data meant that the permanent occupant would not be present during the rental as required by the state law.
  • Acting Supreme Court Justice Gerald Connolly, the judge presiding over the case, concluded the hearing without a ruling.

States v. Federal Government

Washington Attorney General and Governor Trigger Dispute Resolution With Federal Government Related to Radioactive and Chemical Waste Site

  • Washington AG Bob Ferguson and Washington Governor Jay Inslee sent a letter to the U.S. Department of Justice triggering dispute resolution pursuant to a clause in a 2010 consent decree ("Consent Decree") governing the cleanup of a radioactive and chemical hazardous waste site in Hanford, Washington.
  • The Hanford site produced plutonium as part of the Manhattan Project during World War II. Both Washington state and the U.S. Department of Energy (DOE) had made proposals to amend the Consent Decree and later rejected each other's proposal. AG Ferguson claimed that the DOE's proposal lacked specificity, accountability, and enforceability and that the proposal did not go far enough. The DOE argued that the state's proposal did "not adequately account for the realities of technical issue resolution, project management imperatives, and fiscal constraints, and that it exceeds the scope of the Consent Decree."
  • The dispute resolution process is a 40-day process of good faith negotiation. If the state and federal government cannot reach an agreement during this process, then the state may ask a federal court to issue an order directing the DOE to implement the state's plan.

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.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions