United States: State AGs In The News - June 18th, 2015

AG Insights

Doing Business in California? The AG Wants You to Know Your Supply Chain

  • In a recent blog post, Dickstein Shapiro Counsel Doreen Manchester and Aaron Lancaster provide background on the California Transparency in Supply Chains Act.

Consumer Protection

New Jersey AG Settles Lawsuit Against Purveyor of "Home Warranties"

  • New Jersey Acting Attorney General John Hoffman settled the lawsuit against CHW Group, Inc., d/b/a Choice Home Warranty alleging that CHW violated the New Jersey Consumer Fraud Act and advertising regulations by selling residential service contracts misrepresented to be home warranties.
  • The Complaint alleged that CHW induced consumers to buy limited coverage service contracts by claiming they provided comprehensive coverage for various home systems and appliances, when in fact they only provided limited coverage in the form of buyout payments instead of providing repair or replacement. In addition, the AG claims that CHW made it arduous to the point of impossibility for consumers to realize the benefits of the contracts they received. For example, CHW allegedly denied claims when consumers could not demonstrate that they had performed regular maintenance on the covered items.
  • Under the terms of the Consent Judgment, CHW will pay approximately $780,000, inclusive of consumer restitution. CHW is also required to revise its business practices and retain a compliance monitor for at least one year. In addition, former CHW principals Victor Mandalawi, Victor Hakim, and David Seruya are required to execute Confessions of Judgment, a procedure that allows the AG to seek payment from them in the event CHW fails to make the settlement payment.

New York AG Reaches Settlement With Auto Dealers Allegedly "Jamming" Consumers With After-Sale Service Fees

  • New York Attorney General Eric Schneiderman reached an agreement with three jointly-owned auto dealerships doing business under the names Paragon Honda, Paragon Acura, and White Plains Honda (together, "Paragon") to resolve allegations that the dealerships used deceptive and high pressure sales tactics to add hidden costs and fees for non-negotiated services to the purchase or lease price of autos.
  • The AG's investigation of Paragon alleged that it used fraudulent and deceptive methods to "jam" credit repair and identity theft prevention contracts from third party Credit Forget, Inc., (CFI) into auto sales and leases—either by failing to disclose or hiding additional charges in the sales documents, or by misrepresenting that the services would not cost the consumer additional money. It also alleged that Paragon violated the law that prohibits charging upfront fees for credit repair services.
  • The settlement agreement requires Paragon to pay $6 million for consumer restitution and to provide each affected customer with a $500 "settlement card" that can be applied toward the purchase or lease of any new or used vehicle, or toward certain services or accessories. The agreement also prohibits Paragon from marketing or selling credit repair and identity theft services in connection with the sale or lease of a vehicle.
  • The AG reached a separate settlement with CFI and its principals, requiring CFI to instruct all relevant dealerships to stop selling CFI's services, and to remove all related promotional materials. It also enjoins CFI and its principals from engaging in the "credit services business" in violation of the law, and requires CFI to dissolve.
  • This investigation was part of a larger initiative to stop auto dealerships from "jamming" consumers with fees for additional after-sale services. In addition to this action against Paragon, AG Schneiderman settled with a separate dealership under investigation, and served notice of his intent to sue 11 additional dealerships.

State AGs Push for Stronger Regulation of E-Cigarettes

  • Maine Attorney General Janet Mills and Indiana Attorney General Greg Zoeller, sitting as chair and vice-chair of the NAAG Tobacco Committee, are calling on the Food and Drug Administration (FDA) to act on a 2014 proposal to add e-cigarettes to the Tobacco Control Act, and thus enable the FDA to regulate e-cigarettes in a manner similar to other tobacco products.
  • In the letter to the Director of the FDA Center for Tobacco Products, the AGs specifically request that the FDA subject e-cigarettes to the same advertising and marketing restrictions as traditional cigarettes, include e-cigarettes in the ban on "characterizing flavors," mandate stronger health warnings that indicate that nicotine from e-cigarettes is harmful and addictive, and require face-to-face sales of tobacco products to prevent Internet sales to minors.
  • Meanwhile, State AGs continue to press state legislatures for stronger protections regarding e-cigarettes. For example, the Rhode Island Senate passed AG Peter Kilmartin's legislation that would require child resistant packaging and would prohibit use of e-cigarettes on school property; Montana enacted AG Tim Fox's law to prevent sales to minors; and Massachusetts is considering AG Maura Healey's proposed regulations to limit sales and marketing to minors.


California Labor Commissioner Rules that Uber Drivers are Employees, Not Independent Contractors

  • The California Labor Commission recently ruled that Barbara Berwick, a driver who performed services through Uber Technologies, Inc., should be considered an employee, not an independent contractor.
  • The Commission indicated that in California, where the services provided are of a personal nature, there is a presumption in favor of employment and the party seeking to avoid liability has the burden to demonstrate that the retained worker is an independent contractor. The Commission focused on the amount of control Uber retains over the provision of services on its platform and found that Berwick was properly classified as an employee. The Commission awarded Berwick $4,152 as reimbursable expenses associated with the driving services she provided, including wages for miles driven on behalf of Uber in between passengers and toll charges.
  • Uber has appealed the Commissioner's ruling in California Superior Court in San Francisco. Uber issued a statement that the ruling "is non-binding and applies to a single driver." The Case is Uber Technologies Inc. v. Berwick, No. 15-546378.

False Claims Act

DOJ Settles With Skilled Nursing Facility for Alleged Violations of the Anti-Kickback Statute

  • The U.S. Department of Justice (DOJ) reached a settlement with Hebrew Homes Health Network Inc. resolving allegations that the Florida-based skilled nursing center violated the U.S. False Claims Act by paying doctors to refer Medicare patients to its nursing center.
  • The U.S. alleged that from 2006 to 2013, Hebrew Homes, under the direction of former president William Zubkoff, hired physicians as "medical directors," pursuant to detailed contracts that paid each several thousand dollars monthly. In reality, the government argued, those were "ghost positions" and the physicians were not hired to perform their contracted duties, but rather to refer patients to the Hebrew Homes facilities.
  • The investigation was initiated based on allegations made in a lawsuit filed by Stephen Beaujon, a former CFO of Hebrew Homes, under whistleblower provisions of the False Claims Act. It was conducted by the U.S. Department of Health and Human Services' Office of Inspector General (HHS-OIG) working together with the Federal Bureau of Investigation's Miami Field Office. Beaujon will receive $4.25 million as his share of the settlement.
  • Hebrew Homes agreed to pay $17 million to resolve the case—the largest FCA settlement involving a skilled nursing service provider. As part of the settlement, Mr. Zubkoff agreed to resign as Hebrew Homes' Executive Director and will no longer be an employee of the company. Hebrew Homes entered into a five-year corporate integrity agreement with HHS-OIG, and agreed to change its policies on the use of medical directors.

States v. Federal Government

Court Sets Hearing for States to Argue Against Federal Fracking Regulations

  • The U.S. District Court for the District of Wyoming will hear oral arguments on June 23 from three states seeking a preliminary injunction to prevent the Bureau of Land Management (BLM) from putting its new Hydraulic Fracturing Rule into effect on June 24, 2015.
  • The Rule would apply to fracking activities on all public land and land belonging to American Indian tribes. According to the BLM, the Rule seeks to mitigate risks to groundwater, air, and wildlife, and protect public health by updating requirements for well-bore integrity and wastewater storage and disposal, and by requiring disclosure to the BLM of the chemicals and fluids used in the fracturing operation.
  • Colorado, North Dakota, and Wyoming are seeking the injunction as part of a claim they filed in April contesting the BLM's authority to impose regulations on hydraulic fracturing under federal law. The states argue that the Hydraulic Fracturing Rule exceeds the BLM's statutory jurisdiction, conflicts with the Safe Drinking Water Act, and interferes with state hydraulic fracturing regulations.

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.

In association with
Up-coming Events Search
Font Size:
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
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
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.


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.


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.


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.


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.


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.


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 .


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.