United States: State AGs In The News - June 26th, 2014

Last Updated: July 7 2014
Article by Bernard Nash and JB Kelly

2014 Election

Colorado Primary Election Results

  • Don Quick (D) and Cynthia Coffman (R) received their respective party's nomination after both ran unopposed in the primary. Incumbent AG John Suthers (R) is term limited.

Maryland Primary Election Results

  • Brian Frosh defeated Jon Cardin and Aisha Braveboy for the Democratic nomination by a margin of 49.68 percent to 30.28 percent and 20.04 percent, respectively. Frosh will face Jeffrey Pritzker (R) in November's general election.

Oklahoma Primary Election Results

  • Incumbent AG Scott Pruitt (R) received his party's nomination after running unopposed. AG Pruitt is currently running unopposed for November's general election.

Utah Primary Election Results

  • Incumbent AG Sean Reyes (R) and Charles Stormont (D) received their respective party's nomination after both ran unopposed in the primary.

District of Columbia Court of Appeals Denies Rehearing of Attorney General Election Decision and Council Passes Legislation to Schedule the Election

  • The DC Court of Appeals denied a motion to recall its mandate that an election for the AG position must be held in 2014 or as soon as practically possible thereafter and denied a petition for rehearing.
  • The order mentions that Chief Judge Washington and Associate Judges Blackburne-Rigsby and Thompson would have voted to grant the petition for rehearing en banc, but that was not sufficient to support a grant to rehear.
  • On the same day, the DC Council passed budget legislation that included language that would schedule the first AG election for a November 4 special election, along with the general election for mayor, some council members, and other offices.
  • According to a news report, current AG Irvin Nathan has previously questioned the legality of a one-stage special election like the one just scheduled by the DC Council. AG Nathan believes that without party primaries the AG could not be elected on a partisan basis, which he thinks is a requirement of the DC Charter. The case is currently on remand to the DC Superior Court.

We will continue to provide updates on AG-related elections. For breaking news, please follow us on Twitter @StateAGMonitor.

Antitrust

Utah Attorney General Investigating Agreement Between Newspapers

  • Utah AG Sean Reyes announced his investigation of a joint operating agreement between the Salt Lake Tribune and the Deseret News for any potential antitrust violations.
  • The U.S. Department of Justice (DOJ) is also investigating the agreement. "We are not trying to duplicate or interfere with the DOJ investigation as it pertains to any area where they have statutory jurisdiction. But, there may be areas of concern outside of or concurrent with that scope, and we have an obligation to look at them more closely," stated AG Reyes.
  • A representative of the AG's office stated that the fact of an investigation is not evidence of wrongdoing.

Climate Change

U.S. Supreme Court Rules on Greenhouse Gas Rules

  • The U.S. Supreme Court, in Utility Air Regulatory Group v. Environmental Protection Agency (EPA), affirmed in part and reversed in part a lower court judgment in an opinion holding that the EPA could impose controls on greenhouse gases while warning it not to exceed statutory authority given by Congress.
  • Several states, including Texas and Wyoming, had challenged the EPA's plan for implementing greenhouse gas regulations through permitting processes in the DC Circuit. The DC Circuit had dismissed some of the petitions for lack of jurisdiction and denied the remainder. In addition, Kansas AG Derek Schmidt had led a group of six states in supporting the challenge led by Texas, and New York AG Eric Schneiderman had led a group of 15 states and New York City in supporting the EPA.
  • Texas AG Greg Abbott and AG Schmidt applauded the decision as a victory. "The bottom line is that the EPA cannot rewrite federal statutes to pursue a regulatory agenda that is beyond its statutory authority," stated Schmidt. However, AG Schneiderman also applauded the decision and the EPA claimed the decision as a "resounding win," stating that, "the minor points of disagreement in the ruling will not undermine our ability to protect the environment."

Alabama Attorney General Testifies Against Proposed Power Plant Rules at Climate Change Hearing

  • Alabama AG Luther Strange testified at a hearing on climate change of the U.S. Senate Subcommittee on Clean Air and Nuclear Safety, opposing the EPA's proposed rule to cut carbon emissions for existing power plants.
  • AG Strange argued that the proposed rules are misguided and that they usurp regulatory authorities more properly delegated to states.
  • "The defense of this proposal will be that the States have 'flexibility,' but providing the States with a narrow range of costly policy choices, which most of the States did not choose for themselves, does not provide any actual flexibility and still produces the same outcome—higher electricity prices and decreased generation," AG Strange testified.
  • A video transcript of the hearing is available. We recently blogged about AGs' responses to these proposed rules, including West Virginia AG Patrick Morrisey's letter to the EPA regarding them.

Consumer Financial Protection Bureau

CFPB Orders Title Company to Pay Penalty for Alleged Kickbacks

  • The Consumer Financial Protection Bureau (CFPB) ordered Stonebridge Title Services Inc. to pay a $30,000 penalty for allegedly paying kickbacks for referrals.
  • Stonebridge allegedly paid commissions to independent salespeople who referred title insurance business to the company in violation of the Real Estate Settlement Procedures Act, which prohibits payment of unearned fees in residential real estate transactions.
  • The act permits payment of a commission to an employee, but Stonebridge allegedly paid commissions to independent contractors, whom the CFPB deemed not to be employees.
  • According to the consent order, in addition to paying the penalty, Stonebridge shall not accept or pay any illegal fees or kickbacks.

Consumer Protection

West Virginia Attorney General Settles With Debt Settlement Company

  • West Virginia AG Patrick Morrisey settled with Legal Helpers Debt Resolution LLC to resolve allegations that it misrepresented debt relief services in violation of state consumer protection laws.
  • AG Morrisey alleged in a lawsuit against the company that it instructed consumers to stop paying creditors and to deposit the payments that would have otherwise been made to creditors into new dedicated accounts with third-party vendors. The AG also alleged that Legal Helpers and its vendors paid themselves from these accounts, but that Legal Helpers did not properly disclose that it would not provide debt relief services until all fees had been paid.
  • Pursuant to the settlement, Legal Helpers will pay the state $135,000, with $50,000 of that amount to be paid to consumers as restitution. The company will also not engage in any future debt negotiation or modification services in the state.

Data Privacy

Florida Governor Signs Information Protection Act

  • Florida Governor Rick Scott signed the Florida Information Protection Act of 2014, which Florida AG Pam Bondi supported. The act provides new protections for personal information and expedites notice of data breaches.
  • For more information on the act, visit our recent blog post on its passage.

Environment

Missouri Attorney General Sues Tyson Foods for Alleged Contamination of State Waters

  • Missouri AG Chris Koster filed a lawsuit against Tyson Foods alleging that it contaminated state waters by unlawfully dumping untreated industrial wastewater.
  • AG Koster alleges that Tyson Foods discharged wastewater containing acidic animal feed supplement into a city sewer system, which caused the biological wastewater treatment system to fail and release contaminated water and ammonia into state waters.
  • The lawsuit alleges violations of state hazardous waste laws. The AG seeks penalties, compensation for any damage, and reimbursement of costs.

Pennsylvania Attorney General and Governor Sue Oil Companies for Alleged Environmental Damage and Misuse of State Fund

  • Pennsylvania AG Kathleen Kane and Governor Tom Corbett's general counsel filed two separate lawsuits against oil companies for alleged environmental damage and misuse of a state indemnification fund.
  • The first lawsuit seeks to recover money the state allegedly paid to clean up methyl tertiary butyl ether (MTBE) groundwater pollution, monetary damages for loss of groundwater use, injunctive relief, and fines and penalties relating to alleged unfair and deceptive trade practices and marketing of MTBE.
  • The second lawsuit seeks disgorgement of money allegedly disbursed to the defendants from the state Underground Storage Tank Indemnification Fund to clean up gasoline spills. The defendants allegedly collected for the same corrective action costs from both the fund and their insurance policies, in violation of state law.
  • Other states are suing or have sued oil companies for alleged MTBE groundwater pollution. We recently blogged about Vermont's lawsuit.

Missouri Attorney General Enters Into Amended Agreement With Landfill Owner

  • Missouri AG Chris Koster announced an amended agreement with Republic Services, Inc., owner of the Bridgeton Landfill, to put in place additional measures to control odors and an underground fire at the landfill and prevent the migration of the fire to a nearby landfill containing radioactive material.
  • As we previously blogged, AG Koster sued Republic in 2013 alleging violations of several state environmental protection laws. The parties entered into an agreed order of preliminary injunction that year to establish obligations related to the landfill, including monitoring and response. The lawsuit is expected to go to trial in 2015 to determine whether Republic is subject to civil penalties and damages.
  • The amended order requires increased carbon monoxide testing, a new odor control plan, and increased frequency of landfill gas collection and testing. The order also increases the expense cap from $900,000 to $1.49 million for reimbursements to the state for costs associated with monitoring and oversight of the landfill.

For-Profit Colleges

Florida Attorney General Settles Allegations of Misleading Marketing With For-Profit College

  • After an investigation, Florida AG Pam Bondi settled allegations of misleading marketing with Kaplan Higher Education, Kaplan Higher Education Campuses, and Kaplan University (collectively, Kaplan).
  • During the investigation, Kaplan provided more than $6 million of waived tuition and fees to students.
  • Pursuant to the assurance of voluntary compliance, Kaplan must disclose true and accurate information regarding various aspects of its programs, including accreditation, program costs, financial aid, and employment services. Kaplan will also provide staff training, offer retraining to eligible students, continue its scholarship program for returning students, establish an expedited arbitration process, provide quarterly reports to the AG, and pay attorney fees and costs.

Medicaid Fraud

Maryland Attorney General and the Federal Government Settle With Nursing Home Operator

  • Maryland AG Douglas Gansler and the U.S. Department of Health and Human Services settled with Foundation Health Services, Inc., its affiliated nursing facilities, and its president (collectively, Foundation Health) to resolve allegations that it submitted false claims for payment to Medicaid and Medicare for materially substandard skilled nursing facility services.
  • Among the reasons that Foundation Health's skilled nursing facility services were claimed to be substandard are that it allegedly failed to follow appropriate protocols, employ a sufficient number and skill-level of nursing staff, and provide a habitable living environment, all of which allegedly resulted in patient injuries including falls, fractures, and infections.
  • Pursuant to the settlement, Foundation Health will pay $750,000, with $173,000 of that amount to be paid to the state. It will also enter into a corporate integrity agreement that requires an independent monitor to oversee the quality of care provided over the next five years.

State AGs in the News

U.S. Supreme Court Rules on First Amendment and Qualified Immunity Issues

  • The U.S. Supreme Court, in a unanimous opinion in Lane v. Franks, ruled that the sworn testimony of a former public employee, who was allegedly fired for testifying in a public corruption trial, is entitled to First Amendment protection and that the supervisor who fired that employee is entitled to qualified immunity.
  • Alabama AG Luther Strange argued for the first time in front of the Court in this case. Consistent with AG Strange's arguments, the Court ruled that the employee's sworn testimony outside of the scope of his ordinary job duties is entitled to First Amendment protection under the U.S. Constitution and that the supervisor is entitled to qualified immunity for the claims against him in his individual capacity.
  • "The Court's decision properly recognizes that a public employee has the right to testify in a public corruption case but that the supervisor who fired this particular employee should not be personally liable for damages," stated AG Strange.

Florida Attorney General Issues Opinion Regarding Application of the Public Records Law to Government Contractors

  • In response to a request from State Senator Wilton Simpson and in anticipation of amendatory legislation, Florida AG Pam Bondi issued a formal opinion that the state Public Records Law does not automatically apply to private contractors providing services to a public agency.
  • According to the opinion, to be subject to the Public Records Law, a contractor must both contract with a public agency and act on behalf of the public agency in providing those services. AG Bondi interprets "acting on behalf of the public agency" as requiring the contractor to take the place of or stand in the shoes of the public agency. To determine whether a contractor is doing this, one must look at the nature and scope of the services provided by the contractor.

Utilities

Pennsylvania Attorney General Sues Five Electric Generation Suppliers

  • Pennsylvania AG Kathleen Kane filed joint complaints against five electric generation suppliers before the state Public Utility Commission (PUC). The five companies are Energy Services Providers Inc. d/b/a Pennsylvania Gas & Electric, IDT Energy Inc., Respond Power LLC, Hiko Energy LLC, and Blue Pilot Energy LLC.
  • In response to consumer complaints, the AG alleged that the companies promised competitive rates if the consumer switched suppliers, but that the prices charged by the companies were not reflective of the cost to serve residential electricity needs. The AG also alleges that the companies switched suppliers without consumer consent and provided consumers with contracts that did not comply with state law. The AG alleges violations of the PUC's orders and regulations, the Public Utility Code, the Consumer Protection Law, and the Telemarketer Registration Act.
  • The AG seeks to suspend or revoke the companies' licenses, impose civil penalties, and provide restitution to consumers.

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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