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
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