United States: State AGs In The News - February 12th, 2015

Last Updated: February 18 2015
Article by Bernard Nash and Lori E. Kalani

Antitrust

Louisiana Attorney General Sues Drug Maker for Allegedly Delaying Generics

  • Louisiana AG Buddy Caldwell filed a lawsuit alleging that GlaxoSmithKline LLC (GSK) violated the Louisiana Monopolies Act and Unfair Trade Practices Act by preventing or delaying Federal Drug Administration (FDA) approval of generic versions of Flonase (fluticasone propionate) to keep them from entering the market.
  • The complaint is based on a novel theory of liability, alleging that GSK used a "brand maturation" scheme, described as a combination of the following four actions: influencing the FDA bioequivalence guidance process; filing "baseless" citizen petitions with the FDA; drafting a new set of procedures and acceptance criteria in order to set standards for quality, purity, strength and consistency; and supplementing its original New Drug Application in an attempt to delay the FDA from approving applications from generic producers.
  • The case was originally filed in state court, but has been noticed for removal to the Middle District of Louisiana. In its Notice of Removal, GSK asserts that its actions were done in compliance with standard FDA procedures. The AG is seeking restitution for "unlawfully inflated prices" paid by the state and treble damages.

Consumer Financial Protection Bureau

CFPB Secures $2 Million in Civil Penalties From Nonbank Mortgage Lender

  • The Consumer Financial Protection Bureau (CFPB) reached an agreement with New Day Financial, LLC, to resolve claims that the non-bank lender engaged in deceptive advertising in violation of the Dodd-Frank Act and paid illegal kickbacks in violation of the Real Estate Settlement Procedures Act.
  • New Day's primary business was to originate refinance mortgage loans guaranteed by the Veterans Benefits Administration. The CFPB alleged that New Day agreed to pay "lead generation" fees to a veterans' organization and a broker that facilitated the arrangement, in addition to a monthly licensing fee to the broker. In exchange, the veterans' organization named New Day its exclusive lender and referred veterans to New Day. New Day also allegedly advertised its exclusive endorsement to the members of the veteran's organization without disclosing the financial relationship between them.
  • In accordance with the consent order, without admitting any of the allegations, New Day will implement a compliance plan to ensure its marketing of mortgage products complies with the law and must pay $2 million to the CFPB's Civil Penalty Fund.

Consumer Protection

Stealth Solar's Alleged Violations Detected by Arizona Attorney General

  • Arizona AG Mark Brnovich settled with Stealth Solar, LLC, and its owners, resolving a lawsuit alleging that Stealth's sales force violated the Arizona Consumer Fraud Act by making false and deceptive statements to consumers in order to sell photovoltaic electricity generation (PV) systems.
  • The consent judgment outlines a series of allegedly false or deceptive statements made by Stealth, including claims that utility bills will increase 10 to 12 percent per year without a PV system, or that 70 percent of the costs of a PV system are covered by government incentives.
  • Pursuant to the terms of the consent judgment, Stealth is enjoined from making unsubstantiated claims and will pay $72,000 in restitution to consumers, as well as additional restitution based on consumer complaints received by the AG until July 1, 2015.

West Virginia Cracks Down on Pool Company Allegedly Violating Mortgage Laws

  • West Virginia AG Patrick Morrisey settled with Blue World Pools, Inc., regarding allegations that the company violated the West Virginia Consumer Credit and Protection Act in connection with the sale and financing of swimming pools in West Virginia.
  • AG Morrisey alleged that Blue World used deceptive sales practices to secure finance agreements by filing a deed of trust against the consumer's property in which it was named as trustee, a practice the AG alleged was tantamount to making mortgage loans without a license. In addition, Blue World allegedly failed to make necessary financial disclosures and, in some cases, charged annual percentage rates that exceeded limits allowed in the state.
  • Blue World did not admit to the allegations, but agreed to resolve the AG's claims through an assurance of discontinuance, in which it agreed to pay $1 million to the state with $500,000 designated for consumer restitution. Blue World also agreed to cancel almost $650,000 in consumer debt, and to request that credit reporting agencies delete any adverse information it may have reported.

Data Privacy

Attorneys General Take Action in Health Insurer's Data Breach

  • Massachusetts AG Maura Healey formally announced that her office is investigating the data breach at Anthem, Inc., through which hackers were able to gain access to information pertaining to Anthem's current and former customers and employees, including names, birthdates, social security numbers, addresses, email addresses, and employment and salary information.
  • In addition, at least ten other AGs sent a letter demanding that Anthem provide better information as to who might be affected and to reimburse consumers who suffer losses during the delay between the breach and the notification and provision of credit monitoring.
  • Anthem has created a website to provide information and guidance on this issue, on which it indicates that it will contact affected consumers directly. In addition, Anthem has posted answers to frequently asked questions and will be offering credit monitoring services for affected consumers.

Illinois Attorney General Asks Congress for Strong Data Breach Law, but Not Preemption

  • Illinois AG Lisa Madigan testified before a U.S. Senate subcommittee, urging Congress to enact a strong federal law to address data protection, but to do so without preempting state efforts. AG Madigan stated, "A weak national law that restricts what most state laws have long provided will not meet Americans' increasing and rightful expectation that they be informed when their information has been stolen."
  • As we have previously reported, data security has become a vibrant issue in state legislatures, and State AGs have been very active in investigating data breaches and pushing for stronger state laws.

False Claims Act

Attorneys General Look to Strengthen State False Claims Acts

  • Maryland AG Brian Frosh urged the Maryland General Assembly to adopt a broader version of the state's False Claims Act, calling it his "top priority for the 2015 legislative session." Currently, the Maryland law only applies to Medicaid and health-related fraud.
  • Under the bill submitted to the Senate and House of Delegates, which would apply to both state and local government, individuals would be able to report fraud committed by state contractors to the AG or local State's Attorney, who would review and pursue those claims with the most merit. If a case is successful, the state may receive triple damages, while the whistleblower would collect a reward and also receive protection against on-the-job retaliation.
  • Other AGs are also pushing for more potent legislation to address false claims. In addition, states that enact federally compliant laws are able to keep a larger percentage of the money recovered from national lawsuits and settlements based in part on the federal False Claims Act.

Iowa Settles With Home Medicaid Services Provider

  • Iowa AG Tom Miller, together with the U.S. Department of Justice (DOJ), settled with ResCare Iowa, Inc., resolving claims that, from 2009 to 2014, the medical services provider violated the False Claims Act by submitting false home healthcare billings to Medicare and Medicaid programs.
  • AG Miller and the DOJ accused ResCare of failing to provide proper documentation demonstrating that an independent physician performed a face-to-face assessment of each patient and that the physician certified that home care was medically necessary.
  • ResCare agreed to pay $5.63 million to resolve both state and federal claims, with $2.32 million going to Iowa.

Marijuana

Attorney General Counsels Council That It Lacks Authorization to Enact Marijuana Law

  • The District of Columbia Council canceled a hearing to debate Bill 21-23, the "Marijuana Legalization and Regulation Act of 2015" (Bill) after being advised by District AG Karl Racine that to do so would be unlawful.
  • In a letter to various Council members, AG Racine advised that the Federal Appropriations Act for 2015 expressly prohibited the D.C. government from using 2015 funds to "enact any law, rule, or regulation to legalize or otherwise reduce penalties" for the use of marijuana for recreational purposes. AG Racine iterated this would apply to even a preliminary hearing, and thus Council members and District employees could be liable under the Anti-Deficiency Act, which prohibits the expenditure of funds that have not been appropriated. Among other things, AG Racine also highlighted that the Bill in current form goes beyond simply decriminalizing small amounts of marijuana, and thus expands the measure approved by voters in last year's Ballot Initiative 71.

States v. Federal Government

Oklahoma Attorney General Voices Concerns to Congress Over EPA Rule, Threatens Legal Battle

  • Oklahoma AG Scott Pruitt testified at a Senate-House committee hearing, and continued to voice objections shared by other AGs to a proposed rule that would expand Environmental Protection Agency (EPA) jurisdiction under the U.S. Clean Water Act.
  • The EPA's proposed rule seeks to broaden and clarify the definition of water that falls under the regulatory powers of the EPA to include seasonal and rain-dependent streams, as well as wetlands that are close to rivers.
  • The AGs arguing against the rule highlighted the potential to disrupt small businesses ranging from farmers to home builders by requiring them to obtain EPA approval for any action that might affect surface water. However, other AGs and federal lawmakers indicated that the AGs' concerns were not supported by the text and purpose of the rule. The EPA plans to make the rule final this spring, but according to EPA head Gina McCarthy, the final wording of the rule will "provide more clarity on the basis of the comments that we received."

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
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
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). 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 & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd 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 or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Emails

From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

*** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.