United States: State AGs In The News - December 4th, 2014

Last Updated: December 15 2014
Article by Bernard Nash and Milton A. Marquis

HOT NEWS

States Bring Lawsuit Challenging White House Immigration Order

  • Led by Texas, 14 State AGs and three governors have filed a lawsuit in federal court in the Southern District of Texas, alleging that President Obama's 2014 Executive Order granting relief from deportation to approximately 4.4 million undocumented immigrants violates the U.S. Constitution's Take Care Clause (Art. II, Sec 3 Cl. 5) and the U.S. Administrative Procedures Act, Sections 553 and 706.
  • The lawsuit names as defendants the United States of America plus officials in the U.S. Department of Homeland Security, including Customs and Border Protection, Immigration and Customs Enforcement, and Citizenship and Immigration Services.
  • The case is Texas v United States 1:14-cv-00254 (S.D. Tex. Dec. 3, 2014). We will follow this lawsuit as it unfolds in future editions of State AGs in the News.

Consumer Financial Protection Bureau

Sixteen Attorneys General Urge the CFPB to Regulate Pre-Dispute Arbitration Clauses

  • Delaware AG Beau Biden, along with Massachusetts AG Martha Coakley and Kentucky AG Jack Conway, led a group of AGs urging the Consumer Financial Protection Bureau (CFPB) to exercise its statutory authority to regulate the use of mandatory pre-dispute arbitration clauses in connection with contracts for financial services.
  • In their letter to CFPB Director Richard Cordray, the AGs argued that the inclusion of mandatory arbitration clauses in consumer contracts for financial services is counter to the public interest because consumers rarely understand the ramifications and lack the bargaining power to negotiate. The AGs also stated that arbitration can be procedurally unfair to consumers because arbitrators are likely to be biased in favor of the financial services company, as they will be the "repeat players" in arbitration.
  • Before the CFPB can create regulations in this area, the Dodd-Frank Act requires it to conduct a study and issue a report to Congress. The CFPB initiated this process with a public inquiry in April 2012 and published its preliminary results in December 2013.

Consumer Protection

Maryland Attorney General Settles Claims With Verizon

  • Maryland AG Douglas Gansler announced a settlement with Verizon Communications Inc. to resolve allegations that it misrepresented the actual costs of its television, internet, and phone services to consumers through promotional activities.
  • Under the terms of the settlement, Verizon will pay restitution to current and former customers who were charged termination or equipment fees that were not adequately disclosed. In addition to the estimated $1.375 million restitution, Verizon will pay a civil penalty of $250,000 and $75,000 for costs.
  • Verizon also agreed to change its advertising practices and will provide written disclosures of the terms of customers' orders and broader cancellation rights if the first bills do not accurately reflect those orders.

Arizona Attorney General Sues General Motors for $3 Billion

  • Arizona AG Tom Horne filed a lawsuit in Maricopa County Superior Court against General Motors LLC (GM), alleging that it violated the Arizona Consumer Fraud Act by selling automobiles that it knew were unsafe. The complaint asks for injunctive relief, along with disgorgement, civil penalties up to $10,000 for each violation, attorneys' fees, and investigation costs.
  • The lawsuit alleges that GM promoted its vehicles as "safe, reliable and high quality" while deliberately concealing defects to ignition, airbags, seatbelts, brakes, and electronic stability control systems. It also alleges that GM failed to timely recall certain models, even though such defects had become apparent. Finally, the lawsuit seeks to address losses in the resale value of certain models based on their record for defects. Although the lawsuit seeks only to account for GM's conduct post-2009 bankruptcy, many of the defects occurred in models produced by GM pre-bankruptcy.
  • GM responded in a statement, saying the lawsuit "misrepresents the facts, the performance of our vehicles and our work to ensure the safety of our customers."
  • A group of 47 State AGs is also investigating GM's recalls and safety procedures, but have not yet filed lawsuits.

Illinois and Ohio Attorneys General Pair With the FTC to Enjoin Credit Monitor

  • Illinois AG Lisa Madigan and Ohio AG Mike DeWine, together with the Federal Trade Commission (FTC), settled claims against defendants One Technologies, LP; One Technologies Management, LLC; and One Technologies Capital, LLP, for selling online credit monitoring services to consumers allegedly in violation of the Restore Online Shoppers Confidence Act (ROSCA), Section 5(a) of the FTC Act, the Ohio Consumer Sales Practices Act, and the Illinois Consumer Fraud Act.
  • The complaint alleged that defendants deceptively marketed their credit monitoring services by offering consumers "free" access to their credit scores without adequately disclosing that such access automatically enrolled them in defendants' credit monitoring program for which they were charged a monthly fee of $29.95. The complaint also claimed that consumers were not adequately informed how to cancel the service, and often had to request cancellation numerous times.
  • The consent order requires defendants to pay $22 million in compensation to the FTC and State AGs, and to cease making misrepresentations, express or implied, as to the price of goods and services. It also requires defendants to provide reports on their compliance with the terms of the order and to maintain records related to any goods or services sold with a negative option feature for 10 years.

Florida Also Joins With FTC to Enjoin Computer Services Companies

  • Florida AG Pam Bondi and the FTC filed complaints against multiple companies to prevent them from inducing consumers to purchase unnecessary computer repair services in violation of Section 5 of the FTC Act, the Telemarketing Sales Rule, and the Florida Deceptive and Unfair Trade Practices Act.
  • The lawsuits allege that Inbound Call Experts, LLC; Vast Tech Support, LLC; and a host of related companies provide "free" diagnostic computer scans, offered through deceptive online advertisements and telemarketing efforts. The companies, whose diagnostic scans falsely detect viruses and malware, proceed to sell unnecessary repairs to fix the nonexistent problems. As a whole, defendants have allegedly collected over $120 million in revenues from these practices.
  • On November 12, 2014, U.S. District Court Judge Kenneth Marra, for the Southern District of Florida, entered temporary restraining orders against the defendants, freezing related assets and placing business operations under a court-appointed receiver.

Vermont Settles Claims Against Discount Club

  • Vermont AG William Sorrell settled claims against Stonebridge Benefit Services, Inc., and J.C. Penney Corporation, Inc., in connection with the sale of discount membership programs to consumers allegedly in violation of Vermont's 2012 Discount Membership Program Act (DMPA).
  • The DMPA prohibits selling memberships to discount clubs unless the consumer provides complete credit card information at the time of purchase. It also requires sellers to periodically remind consumers that they are being charged and precludes clubs from charging members for more than 18 consecutive months without completing the initial sign-up process again.
  • AG Sorrell alleged that J.C. Penney provided Stonebridge with customer credit card information and Stonebridge used this information to sign up and bill consumers for discount club memberships.
  • Pursuant to the Assurance of Discontinuance, Stonebridge will send refund checks totaling $227,651 to all consumers who were billed unlawfully after May 2012, and is required to make refunds to any consumers who were billed prior to May 2012 and submit a complaint. Stonebridge will also pay $175,000 to the state and agreed to strictly comply with Vermont law. In addition, J.C. Penney is enjoined from providing credit card information to Stonebridge.

Thirty-Eight Attorneys General Request Update to FTC Telemarketing Rule

  • Through a letter from the National Association of Attorneys General, a group of 38 State AGs recommended that the Federal Trade Commission (FTC) update its Telemarketing Sales Rule to reflect the realities of the current marketplace, and to better protect consumers from telemarketing fraud and abuse.
  • The AGs note in their letter that there has been a marked increase in the number of consumer fraud claims originating from telemarketing activities in recent years and ask the FTC to amend the Telemarketing Sales Rule to prohibit the use of pre-acquired account information to better address the use of negative option sales techniques in telemarketing, and to require telemarketers to create and maintain call records.

Data Privacy

Massachusetts Enters Consent Judgment With Hospital Over Data Breach

  • Massachusetts AG Martha Coakley entered into a Consent Judgment with Beth Israel Deaconess Medical Center, Inc. over allegations that the hospital failed to safeguard personal data and protected health information of 3,990 patients and employees.
  • The information was compromised by the theft of an unencrypted personal computer from a physician's office. Although the hospital had a policy in place that required all computers containing personal health information to be secured and encrypted, AG Coakley alleged that it was poorly enforced and that the hospital waited too long to notify affected persons.
  • The hospital agreed to pay $70,000 in civil penalties, $15,000 in costs and attorneys' fees, and $15,000 for future educational programs concerning the protection of personal and protected health information. The hospital also agreed to audit overall security measures and to better secure, encrypt, and track laptops containing personal and protected health information.

Environment

California Reaches Settlement With AT&T Over Electronic Waste

  • California AG Kamala Harris settled claims that Pacific Bell Telephone Company d/b/a AT&T California, AT&T Corp., and AT&T Services, Inc., (collectively AT&T) allegedly failed to prevent electronic equipment, batteries, aerosol cans, and certain gels and liquids from being sent to landfills as regular trash. The consent judgment requires AT&T to pay the state a total of $23.8 million and to implement enhanced environmental compliance measures including the use of "staging bins" prior to placing waste in dumpsters, as well as hundreds of unscheduled annual inspections.
  • In response to the settlement, AT&T issued the following statement: "We take environmental stewardship seriously, and we've cooperated closely with the state and Alameda County to resolve this issue in a way that is in the best interests of the environment, our customers and all Californians. The settlement recognizes the company for taking prompt action, dedicating significant additional resources toward environmental compliance, and improving our hazardous and universal waste management compliance programs."

States v. Federal Government

Supreme Court Grants Cert to Review States' Objections to EPA Mercury Rule

  • The U.S. Supreme Court granted certiorari to Michigan AG Bill Schuette and 22 other states requesting review of the D.C. Circuit's decision to uphold the Environmental Protection Agency's (EPA) Mercury and Air Toxics Standards (MATS) Rule.
  • The AGs asserted in the Michigan petition that the use of the term "appropriate" in Section 112 of the Clean Air Act required the EPA to consider potential compliance costs when it made a decision to promulgate the MATS Rule—or any rule to regulate hazardous air pollutants from electricity utilities. In its brief in opposition, the EPA argued that it had reasonably construed the Clean Air Act as only requiring the consideration of compliance costs when establishing the appropriate level of regulation, not for the determination of whether to regulate power plants' mercury emissions.
  • The Supreme Court consolidated Michigan's appeal with two other appeals involving the MATS Rule. If affirmed, the MATS Rule will go into effect in 2015 and coal-fired power plants will be required to cut mercury emissions by more than 90% over four years.

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
Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
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