United States: State AGs In The News - August 21st, 2014

Last Updated: September 1 2014
Article by Bernard Nash

Antitrust

Ohio Attorney General Investigates Businesses for Potential Price Gouging Following a City Tap Water Ban

  • In response to consumer complaints, Ohio AG Mike DeWine is investigating businesses for any possible bottled water price gouging during the city of Toledo's water ban. The city of Toledo banned the use of tap water for drinking and food preparation after allegedly finding toxins in its water supply.
  • As part of his investigation, AG DeWine has sent letters to 58 businesses seeking information about the price of bottled water before, during, and after the water ban.
  • While the state does not have a statute that defines price gouging, the state Consumer Sales Practices Act prohibits unfair, deceptive, or unconscionable sales practices. According to the AG, under that law, a practice could be considered unconscionable if the supplier knew at the time of the transaction that the price was substantially higher than the price at which similar goods or services could be readily obtained. In addition, it could be considered unfair or deceptive to dramatically increase the price of in stock products in response to current events.

Charities

Massachusetts Attorney General Sues and Obtains Restraining Order Against Charity

  • Massachusetts AG Martha Coakley has filed a lawsuit and obtained a temporary restraining order against the Focus on Veterans, Inc. charity, alleging that the charity violated state charitable solicitation laws by soliciting funds without a required certificate and used deceptive practices.
  • The charity allegedly failed to submit annual financial filings, which are required to obtain a valid certificate from the AG that enables the charity to solicit charitable funds in the state. The charity also allegedly misled potential donors by falsely representing that it would use donations to assist veterans in the state.
  • The temporary restraining order bars the charity from soliciting in the state. The complaint requests further injunctive relief, declaratory relief, and disgorgement.

Contingency Fee Counsel

Massachusetts Attorney General Resolves Allegations of Inappropriate Contingency Fee Agreement With Lobbying Firm

  • Massachusetts AG Martha Coakley entered into a joint disposition agreement with lobbying firm the Brennan Group, Inc. to resolve allegations that the Brennan Group profited from an illegal contingency fee agreement.
  • According to the AG, lobbying firms are prohibited from entering into contingency fee agreements with clients. The Brennan Group allegedly entered into a payment contract with the Franciscan Hospital for Children that required the Brennan Group to lobby the legislature on the hospital's behalf in exchange for payment based on a two-tiered fixed percentage structure determined by the amount of money the hospital received following the lobbying.
  • Under the joint disposition agreement, the Brennan Group will return $100,000 to the hospital.

Consumer Financial Protection Bureau

Consumer Financial Protection Bureau Settles Servicemember Consumer Protection Allegations With Retail Store

  • The Consumer Financial Protection Bureau (CFPB) settled with retail chain USA Discounters, Ltd. to resolve allegations that it engaged in deceptive marketing, misled servicemembers, and failed to provide services for which it was paid.
  • USA Discounters, which sells home goods, often has retail stores located near military bases. It allegedly charged a $5 fee for representative services to assist servicemembers with their rights under the Servicemembers Civil Relief Act (SCRA), which provides certain legal protections to active duty servicemembers, including protections from debt collection lawsuits. The CFPB alleged that these services were unnecessary or sometimes never performed.
  • The consent order requires the company to pay a $50,000 penalty, not engage in any unfair or deceptive practices, not charge for SCRA services, and provide restitution to affected servicemembers.

Consumer Protection

Maryland and New York Attorneys General Enter Into Agreements With Ask.com

  • Maryland AG Douglas Gansler and New York AG Eric Schneiderman entered into separate, but similar, agreements with Ask.com, an operating company of IAC/InterActiveCorp., to protect users of the newly acquired Ask.fm.
  • Ask.fm is an online social networking website that allows users to post anonymous questions to other users. The agreements are meant to diminish cyberbullying and harassment of Ask.fm users.
  • Pursuant to the agreements, Ask.fm will enhance its safety policies and procedures, which will include creating a safety center resource, hiring a trust and safety officer, and establishing a board to oversee safety issues. Ask.fm will also, among other things, review user complaints within 24 hours and delete accounts of certain alleged repeat violators.

New York Attorney General Settles Illegal Payday Loan Collection Allegations

  • New York AG Eric Schneiderman settled with Forster & Garbus, one of the state's largest debt collection firms, to resolve allegations that it violated state law by collecting on "payday" loans. Payday loans are short-term loans with high interest rates and are illegal in New York because they exceed the maximum allowed interest rate of 16 percent.
  • Forster allegedly unknowingly collected on payday loans placed with it by another company. After being notified by the AG's office, Forster stopped collecting on the loans. The AG stated that lack of knowledge that a loan is a payday loan is not an acceptable excuse for violations of state predatory lending laws.
  • Pursuant to the settlement, Forster must pay $10,000 in costs and penalties. In addition, Forster may not file a consumer credit action against a state resident without obtaining a copy of the loan document and determining that the loan is not a payday loan. Forster must also obtain a copy of the loan document if it receives a consumer complaint regarding an existing settlement or judgment, then vacate any judgments and pay restitution if Forster determines that the loan at issue is a payday loan.
  • The settlement is part of ongoing payday loan enforcement efforts by the AG.

Acting New Jersey Attorney General Settles With "As Seen on TV" Company

  • After an investigation, acting New Jersey AG John Hoffman and the state Division of Consumer Affairs filed a complaint against Telebrands Corp., which is known for its "As Seen on TV" products, alleging that it violated the state Consumer Fraud Act and the terms of a 2001 consent judgment. The 2001 consent judgment resolved prior litigation with the state and required compliance with the state Consumer Fraud Act.
  • Telebrands allegedly committed several violations of state law, including using aggressive sales techniques to "upsell" products, failing to allow customers to opt out of ordering processes, shipping and billing for products not ordered by consumers, using misleading advertisements, making false promises and misrepresentations, and omitting material facts.
  • The lawsuit seeks restitution for affected consumers, civil penalties, costs, and fees. The state is seeking enhanced penalties of up to $20,000 per violation, instead of the standard $10,000 per violation allowed under the state Consumer Fraud Act, because of the alleged violation of the 2001 consent judgment.

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

  • Following an investigation, New York AG Eric Schneiderman entered into an agreement with Macy's Retail Holdings, Inc. to resolve allegations that it racially profiled and falsely detained minority customers.
  • The AG found that Macy's allegedly used heightened surveillance for and wrongfully detained minority customers and denied interpreter services to customers with limited English proficiency. Macy's operated under a consent decree from 2005 to 2008 to resolve allegations that it had violated antidiscrimination laws.
  • Under the agreement, Macy's will pay $650,000 in costs, fees, and penalties; designate an independent antidiscrimination expert; hire a security monitor; post a customer bill of rights; establish new recordkeeping requirements; adopt new antiprofiling policies; train employees; and investigate any customer complaints.
  • We recently blogged about a similar settlement reached by the AG with Barneys New York.

Florida Attorney General Sends Letter to FDA Regarding Regulation of Tobacco Products

  • Florida AG Pam Bondi sent a letter to the Food and Drug Administration (FDA) regarding its proposed rule that will further regulate certain tobacco products, including e-cigarettes and cigars, and extend certain regulations that are already in place for cigarettes to these products.
  • AG Bondi supports regulation of e-cigarettes, including regulation of these products for youth, but stated in her letter that the FDA needed to "more narrowly tailor these overbroad regulations." Specifically, AG Bondi expressed concern for a small Florida cigar company, J.C. Newman Cigar, stating that it was unique in the industry and "should not be regulated in the same manner as the nation's largest cigarette companies."
  • We recently blogged about a separate letter submitted by 29 AGs in support of the proposed rule and additional regulation of e-cigarettes, which emphasized the importance of regulatory protections for youth.

Employment

New York Attorney General and Taxi and Limousine Commission Settle With Medallion Leasing Agent for Over $1.6 Million

  • New York AG Eric Scheiderman and the state Taxi and Limousine Commission (Commission) settled with Yellow Cab SLS Jet Management Corp, a taxi medallion leasing agent, to resolve allegations that it violated the Commission's rules governing "lease cap rules."
  • Most taxi drivers in New York City lease the medallions required to operate their taxis from owners and leasing agents. The Commission has lease cap rules to protect drivers and limit fees drivers may be charged for leasing medallions to ensure a baseline level of take-home earnings for drivers.
  • SLS Jet allegedly caused drivers to incur or charged late fees in violation of the Commission's lease cap rules.
  • Under the agreements with the AG and the Commission, SLS Jet will pay almost $1.39 million in restitution, $125,000 in penalties, $125,000 to the commission, and $25,000 to monitor compliance. It will also ensure future compliance by training employees, posting notice of the lease cap rules, appointing a compliance officer, reporting quarterly to the AG's office, and notifying the Commission of any new fees.

Environment

Vermont Attorney General Settles Alleged Hazardous Waste Violations

  • Vermont AG William Sorrell has settled with Sisters and Brothers Investment Group, LLP to resolve allegations that it violated state Hazardous Waste Management Rules relating to the release of waste oil.
  • Pursuant to the court approved consent order, the company admitted liability for 11 violations of the state rules, including failing to make a hazardous waste determination, using improper hazardous waste containers, and failing to notify the state Agency of Natural Resources of the release.
  • Under the agreement, the company will pay $70,000 in civil penalties.

Health Care

Indiana Attorney General Announces Partial Victory in Lawsuit Regarding Affordable Care Act

  • Indiana AG Greg Zoeller announced a partial victory in the lawsuit that he and 39 school corporations brought against the U.S. Internal Revenue Service (IRS), the U.S. Department of Health and Human Services, and the U.S. Department of the Treasury, alleging that the IRS overstepped its authority by requiring financial penalties for employers in states that did not create health insurance exchanges under the Affordable Care Act (ACA). In ruling on a motion to dismiss, the U.S. District Court for the Southern District of Indiana ruled that that the main parts of the lawsuit can continue.
  • The court held that the plaintiffs could proceed with the allegations that the IRS violated the Administrative Procedures Act. A similar argument was recently successful in a separate legal challenge to the ACA in Halbig v. Burwell.
  • According to the AG, the state does not plan to seek an interlocutory appeal. Oral arguments on summary judgment are scheduled for October 9.

Intellectual Property

Vermont Attorney General Wins Another Victory in Alleged "Patent Troll" Lawsuit

  • Vermont AG William Sorrell announced another victory in his landmark lawsuit against MPHJ Technology Investments, LLC. The U.S. Court of Appeals for the Federal Circuit dismissed MPHJ's appeal of the federal district court's ruling to send the case back to state court for resolution.
  • As we previously blogged, AG Sorrell filed the case in state court in May 2013 alleging that MPHJ's practice of sending patent demand letters, purportedly in bad faith, to individuals, businesses, and nonprofits violated Vermont consumer protection law. MPHJ removed the case to federal court arguing that it involved issues of patent law implicating a federal question, as well as asserting that diversity existed between the state and MPHJ. The federal district court rejected those arguments and ordered the case back to Vermont state court. MPHJ appealed the district court's decision.
  • "We're pleased the Federal Circuit has rejected MPHJ's appeal. Now we can turn in earnest to litigate the case in state court—where it began and where it rightfully should be," stated the AG.

Marijuana

Arkansas Attorney General Certifies Proposed Medical Marijuana Ballot Item for 2016

  • Arkansas AG Dustin McDaniel certified the ballot title and popular name of a proposed ballot item for the 2016 ballot that would legalize the use of marijuana for medical purposes. Arkansans for Compassionate Care is sponsoring the proposed item. It was unable to obtain the required signatures before the deadline for this year's general election ballot. A similar proposal on the 2012 ballot was defeated.
  • According to a news report, the AG stated that the proposal meets state requirements that will allow the sponsor to begin gathering signatures, but the AG warned that the "complexity and far-reaching effects of the proposal" could make it susceptible to challenges.
  • The AG also recently certified another proposal for a constitutional amendment that would make marijuana legal without restricting it to medical use. According to another news report, a lawyer in the state is anticipating a third marijuana ballot proposal for 2016 that would legalize medical marijuana. The proposal would be similar to the Arkansans for Compassionate Care proposal, but would not include provisions allowing home growth or lower-cost options for low income individuals.

Medicaid Fraud

New York Attorney General Settles Allegation of Medicaid Fraud With Adult Day Health Care Program for $6.5 Million

  • Following an investigation, New York AG Eric Schneiderman settled for $6.5 million with Northern Manor Multicare Center, Inc. to resolve allegations that its health care facility, Northern Manor Adult Day Health Care Program (Northern Manor ADHCP), did not provide services as represented in its claims for payment to Medicaid. The AG also announced the arrest of four employees of Northern Manor ADHCP.
  • Northern Manor ADHCP allegedly hired unqualified individuals and admitted more registrants than the state certified it to admit.
  • Northern Manor Multicare Center agreed to pay $6.5 million and close Northern Manor ADHCP. The employees were charged with grand larceny for causing Medicaid payments based on false claims, falsifying business records, and unauthorized practice of a profession.

Mortgages/Foreclosures

CFPB Settles With Mortgage Provider for Over $19.3 Million

  • The CFPB settled with Amerisave Mortgage Corporation, its affiliate Novo Appraisal Management Company, and the companies' owner to resolve allegations of engaging in deceptive practices.
  • Amerisave allegedly advertised misleading interest rates, charged improper upfront fees, failed to honor advertised rates, and illegally overcharged for affiliated services offered by Novo.
  • Pursuant to the consent order, Amerisave and Novo will refund customers $14.8 million and Amerisave will pay a $4.5 million penalty. The agreement also prohibits Amerisave from advertising any unavailable mortgage rates or charging any illegal fees. In addition, the owner will pay a $1.5 million penalty.

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.

Authors
 
In association with
Related Topics
 
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
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
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
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.

Disclaimer

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.

General

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