United States: State AGs In The News - September 11th, 2014

Last Updated: September 19 2014
Article by Bernard Nash and Lori E. Kalani

Hot News

A Tale of Two "Patent Troll" Cases: Contrasting Recent Developments in the Vermont and Nebraska AGs' Litigations

  • We have been following Vermont AG Bill Sorrell's groundbreaking consumer protection lawsuit against alleged patent troll MPHJ since it was filed in 2013. At the same time, we have been noting the progress of the reverse-image federal case in which MPHJ and another alleged patent troll, Activision TV, Inc., have sought to enjoin Nebraska AG Jon Bruning from bringing his own enforcement action similar to Vermont's.
  • The fortunes of these two AG cases diverged further recently. To read about developments in these cases, please see our posted update.

Chief Deputy Attorneys General Provide Valuable Perspectives at 2014 SCG Legal Annual Meeting

  • This week Dickstein Shapiro partner JB Kelly moderated a panel at the 2014 Annual Meeting of the State Capital Group (SCG Legal), a global network of over 145 preeminent independent law firms, of which Dickstein Shapiro is a member firm.
  • The panel, "Cooperation & Collaboration Among State Attorneys General: A Perspective from Chief Deputy Attorneys General," offered a behind-the-scenes look at the anatomy of an AG's office and insight on the collaboration that often occurs between offices regarding investigations and enforcement actions.  For more information, please see our summary of this event.

2014 Election

Delaware Primary Election Results

  • Lieutenant Governor Matt Denn (D) and Ted Kittila (R) received their respective parties' nominations for AG after both ran unopposed in the primary. Incumbent AG Beau Biden (D) chose not to run for reelection to focus on the 2016 race for governor.

Massachusetts Primary Election Results

  • Maura Healey defeated Warren Tolman in the Democratic primary by a margin of 62% to 38%. In November's general election, Healey will face John Miller, who ran unopposed in the Republican primary.

New York Primary Election Results

  • Incumbent AG Eric Schneiderman (D) and John Cahill (R) received their respective parties' nominations after both ran unopposed in the primary.

Rhode Island Primary Election Results

  • Incumbent AG Peter Kilmartin (D) and Dawson Hodgson (R) received their respective parties' nominations after both ran unopposed in the primary.

Antitrust

Coalition of 13 Attorneys General File Amicus Brief in Antitrust Case

  • A coalition of 13 AGs, led by New York AG Eric Schneiderman, filed an amicus brief in the U.S. Court of Appeals for the Eleventh Circuit requesting that the court affirm a ruling by the Federal Trade Commission that a pipe fitting company violated antitrust laws. The AGs assert that such a ruling is necessary to maintain rules that prevent market dominant companies from improperly excluding rivals.
  • The AGs caution that the petitioner's amici urge the court to impose a new and unduly restrictive standard on government enforcers to meet their prima facie burden of showing harm to competition. The restrictive standard would require direct evidence that an exclusionary practice actually affected prices or quantities, or proof that a competitor would actually have gained a much larger share of the market absent the monopolist's exclusivity agreements.
  • The AGs argue in their brief that the government is not required to provide direct evidence of actual harm to competition caused by the exclusive dealing and that it is enough for an antitrust enforcer to raise a reasonable inference of competitive harm by proving that a monopolist's exclusive dealing substantially foreclosed its rivals from the market.

Massachusetts Attorney General to Renegotiate With Partners HealthCare Regarding Planned Acquisition of Two Hospitals

  • Massachusetts AG Martha Coakley will renegotiate agreements with Partners HealthCare regarding its acquisition of two hospitals after the state health policy commission, which was reviewing the deals, stated that the transactions could raise costs and potentially stifle competition.
  • According to a spokesperson for the AG, the AG's office "specifically retained the ability to reengage with Partners."
  • The agreements will require approval from a state superior court. A hearing is scheduled for September 29.

Climate Change

New York Attorney General Issues Extreme Rainfall Report

  • New York AG Eric Schneiderman issued a report detailing the increased frequency and intensity of extreme rainfall events in the state, a recommended response, and the measures his office has taken in this area.
  • According to the report, there has been a dramatic increase in the frequency and intensity of extreme rainstorms in the state. The AG acknowledges that no individual storm can be tied to climate change, but states that extreme rainfall trends are consistent with scientists' predictions of weather patterns attributable to climate change.
  • The report outlines the efforts the AG's office has taken in recent years relating to clean air, water, and climate change issues. In addition, the report recommends reducing emissions of greenhouse gases, increasing community resiliency by considering extreme rainfall and climate change trends in construction projects and building codes, and expanding the state's involvement in national and international antipollution efforts.

Consumer Financial Protection Bureau

CFPB Issues Bulletin Informing Credit Issuers of Risks of Promoting Low or No Interest Offers Without Proper Disclosures

  • The Consumer Financial Protection Bureau (CFPB) issued a bulletin to warn credit issuers that low or no interest offers without proper disclosures may violate Regulation Z, which requires disclosure of certain information, or the Dodd-Frank Act, which prohibits certain deceptive or abusive acts or practices.
  • Many credit cards offer interest-free grace periods for new purchases if the purchaser pays the total statement balance by the statement due date. According to the bulletin, offering promotional low or no annual percentage rates (APRs) on certain transactions, such as balance transfers, over a defined period of time, without disclosing that purchasers may lose grace periods on new purchases may violate Regulation Z and/or the Dodd-Frank Act.
  • To avoid violations, the CFPB recommends that all solicitations, applications, account materials, and convenience checks comply with Regulation Z and that all marketing materials clearly, prominently, and accurately describe the costs, conditions, and limitations of the offer and the effect of promotional APRs on grace periods.

Consumer Protection

NAAG Sends Letter to FCC Requesting Formal Opinion on Use of Call-Blocking Technology

  • The National Association of Attorneys General (NAAG) sent a letter, signed by 39 AGs, to the Federal Communications Commission (FCC) formally requesting an opinion regarding telephone carriers' legal ability to implement call-blocking technology.
  • According to the letter, state law enforcement officials are making efforts to identify and prosecute those that engage in illegal telemarketing, but that call-blocking technology, such as NoMoRobo, Call Control, and Telemarketing Guard, present a major advancement towards a solution. According to the AGs, phone carriers are not currently using this technology because they believe that federal law prevents them from doing so on their customers' behalf.
  • The letter specifically requests a formal opinion on these issues, including the FCC's position on whether carriers can legally block certain types of incoming calls; what legal prohibitions, if any, prevent carriers from implementing call-blocking technology; and whether an affirmative customer opt-in to use of such technology is required.

Michigan Attorney General Acknowledges Role on Executive Committee Investigating General Motors

  • Michigan AG Bill Schuette acknowledged that he is among a group of AGs that serve on an executive committee overseeing the investigation of General Motors Co.'s (GM) recall and safety procedures following its recall of vehicles with allegedly faulty ignition switches.
  • We previously blogged about a multistate investigation confirmed by Florida AG Pam Bondi. According to a news report, in July GM stated that 45 states, the U.S. Attorney's Office, the Federal Bureau of Investigation, a federal grand jury, and the U.S. Securities and Exchange Commission were investigating its conduct.
  • AG Schuette noted that consumer protection was a fundamental concern to him in this investigation. He also stated that the coordinated federal and state investigation would be "exhaustive and fair" and would require a "give and take between and among the states and the federal government."

Data Privacy

Attorneys General Issue Warnings and Recommendations to Consumers Following Alleged Home Depot Data Breach

  • According to a news report, South Dakota AG Marty Jackley has confirmed that he and other AGs have formed a working group to directly coordinate with Home Depot to address an alleged data breach of customer information. A spokesperson for Connecticut AG George Jepsen stated that California, Connecticut, and Illinois would lead a multistate effort, in which New York and Iowa would also participate.
  • AG Jackley stated that authorities are investigating the alleged breach and that the full scope is still being determined, but that it is possible that as early as this past spring unauthorized individuals may have accessed Home Depot customer data. The affected data may include customer names and credit and debit card numbers, expiration dates, and security codes. It is unclear at this point whether the alleged breach affected point-of-sale retail customers, in-store customers, online shoppers, or some combination of those customers.
  • In addition, multiple AGs have posted information and consumer recommendations on their websites related to the alleged breach. Specifically, AG Jackley recommends that Home Depot customers monitor their accounts for unauthorized charges and report any such charges immediately. AG Jackley also recommends that all consumers, regardless of whether they think they have been affected by this alleged breach, proactively monitor their credit reports.

Attorneys General Issue Warnings and Recommendations to Patients Following Alleged Health System Data Breach

  • Several AGs, including Illinois AG Lisa Madigan, have posted alerts and consumer recommendations for an alleged data breach of Community Health Systems' patient information.
  • Community Health Systems announced that it believes that it experienced data breaches in April and June 2014, during which unauthorized individuals may have gained access to nonmedical patient information, including names, addresses, birthdates, telephone and social security numbers, and employer names. The company recently sent letters to potentially affected individuals.

Employment

Federal Appellate Court Rules in Favor of Indiana Attorney General in Case Challenging State Right to Work Law

  • Indiana AG Greg Zoeller announced a victory in an appeal to the U.S. Court of Appeals for the Seventh Circuit challenging the state's right to work law, which prohibits the charging of union dues to nonmembers as a condition of employment. In its opinion, the Seventh Circuit affirmed the federal district court and held that the state law, which AG Zoeller was defending, is not preempted by federal law and does not violate the U.S. Constitution.
  • "Now that the federal courts have concluded the statute the people's elected representatives in the Legislature passed does not violate federal law, we will argue that the statute also complies with the Indiana Constitution and ought to be upheld," stated AG Zoeller.
  • Two days after the Seventh Circuit's decision, in a separate legal challenge to the law by the same plaintiffs, the Indiana Supreme Court heard oral arguments. During the arguments, the AG's office argued in defense of the law. "The State contends that the elected legislators were within their authority to craft a policy prohibiting involuntary union dues and that this statute does not violate the Indiana Constitution," stated the AG.

Environment

Twelve Attorneys General File Motion to Expedite Briefing in Lawsuit Against EPA

  • Twelve AGs, led by West Virginia AG Patrick Morrisey, filed a motion to expedite briefing in a lawsuit that they filed against the U.S. Environmental Protection Agency (EPA). The lawsuit challenges a prior settlement agreement in which the EPA committed to proposing and finalizing a rule that will require states to regulate the emissions of certain power plants under the Clean Air Act.
  • The motion requests that the court merge dispositive motion and merits briefing, and schedule oral argument as soon as practicable upon the completion of briefing. The AGs assert that a consolidated briefing schedule will reduce the irreparable harm to the states and the public that will occur if they have to wait for a decision following a nonexpedited briefing schedule, which the AGs claim could take more than a year.
  • "The regulations EPA seeks to impose on the States are illegal and need to be dismissed as quickly as possible," states AG Morrisey. "In order to comply with the levels of emissions reduction required by the EPA, States will have to completely re-evaluate and possibly restructure their energy sector, implement new ways to reduce consumer demand for energy and overhaul how utilities are regulated. This is a considerable undertaking for States, and should not be done until a court can determine whether the regulations are even legal."

Health Care

Illinois Attorney General Proposes Legislation to Allow Use of Video and Audio Monitoring in Rooms of Nursing Home Residents

  • Illinois AG Lisa Madigan proposed legislation that will allow residents of nursing homes and rehabilitation facilities and their families to purchase and install video or audio monitoring devices in the residents' rooms.
  • According to the AG, this proposal is part of an ongoing initiative to increase protections for nursing home residents and comes in response to recent complaints from residents and their families regarding the residents' care and security.
  • The proposed legislation would, among other things, require resident and roommate consent; prohibit facility retaliation for use of the devices; provide for recordings to be admissible into evidence in administrative, civil, and criminal proceedings; and provide for misdemeanor and felony penalties.

Pharmaceuticals

U.S. Attorney General Announces New Regulation Regarding Collection of Unused Prescription Drugs

  • U.S. AG Eric Holder announced a new Drug Enforcement Administration regulation that will allow pharmacies, hospitals, clinics, and other authorized collectors to serve as authorized drop-off sites for unused prescription drugs. The regulation also will allow long-term care facilities to collect unused prescription drugs from residents and prescription drug users to mail unused medications to authorized collectors.
  • The regulation stems from the Secure and Responsible Drug Disposal Act, signed by President Obama in 2010, and builds on a national program that allows disposal at police stations and other secure areas.
  • State AGs also have focused on prescription drug abuse problems. For example, see our recent blog post about the National Association of Attorneys General Summer Meeting in Mackinac Island, Michigan, where AGs continued their discussions of prescription drug abuse and possible tools to combat the problem, including prescription drug monitoring programs and public education campaigns.

States v. Federal Government

Washington Attorney General and Governor Refuse to Extend Dispute Resolution Process With Federal Government Relating to Cleanup of Hazardous Waste Site

  • Washington AG Bob Ferguson and Washington Governor Jay Inslee announced that they would not extend the dispute resolution process with the U.S. Department of Energy (DOE) regarding the cleanup of a radioactive and chemical hazardous waste site in Hanford, Washington.
  • As we previously blogged, the state had triggered a 40-day dispute resolution process after the state and the DOE were unable to agree on proposed amendments to a consent decree that governs the cleanup. Since that process began, the deadline for the conclusion of the process has been extended twice. According to the AG, the parties met several times during that period, but did not reach an agreement.
  • The state has 30 days from the expiration of the deadline to file a motion in federal district court asking the court to issue an order directing the DOE to implement the state's plan. In the meantime, the parties will continue to try to reach an agreement.

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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