United States: State AGs In The News - July 9th, 2015


State AGs and FTC Approve Dollar Store Merger, Subject to Divestitures

  • Dollar Tree, Inc., and Family Dollar Stores, Inc., have reached an agreement with federal regulators and seventeen State AGs, allowing the discount retail chains to move forward with the $9.2 billion merger proposed last summer.
  • The AGs and the Federal Trade Commission (FTC) separately challenged the merger as anticompetitive in local markets, asserting that the relevant geographic market was as narrow as half a mile in some cases, but included both discount general merchandise retail stores and discounted general merchandise in retail stores (thus including larger retailers).
  • The AGs' consent order adopts the actions required by the FTC order, including Dollar Tree's sale of more than 330 stores nationwide to Sycamore Partners, a private equity firm, within 150 days after consummating the merger. The AGs' order also requires notification with respect to certain transactions or store closures for five years and requires the merging entities to pay $865,181 in attorneys' fees to the AGs.

DOJ Investigation Into Alleged Airline Coordination Triggers Class Actions

  • The Department of Justice (DOJ) has opened an investigation into whether American Airlines Group Inc., Southwest Airlines Co., United Continental Holdings, Inc., and Delta Airlines, Inc.—together more than 80 percent of the domestic market—violated U.S. antitrust laws by coordinating to limit both the number of seats available for purchase, and the number of flights and routes offered. The DOJ allegedly is asking the airlines for, among other things, documents that reference the "need for, or the desirability of, capacity reductions or growth limitations by the company or any other airline."
  • Senator Richard Blumenthal, previously the AG for Connecticut, urged the DOJ to investigate what he called "anticompetitive, anti-consumer conduct and misuse of market power in the airline industry." Senator Blumenthal—referencing a 2013 complaint by the DOJ and a group of State AGs to block the merger between American and U.S. Airways—indicated that the airlines appeared to be using certain terminology ("capacity discipline") in public statements, and otherwise coordinating a strategy to limit expansion. The airlines and some industry analysts do not necessarily agree, with some pointing to seating capacity growth of five percent in 2014.
  • There is a growing queue of follow-on consumer class action lawsuits, based in large part on the claims from the investigation. These classes have the potential to be quite broad: in one complaint filed in Illinois, the plaintiffs are seeking class status for "all consumers who flew domestically from October 1, 2012 to present," and alleging that the airlines, "in tandem, raised fares, imposed new and higher fees on travelers and reduced their capacity and service." The case is Bidgoli v. American Airlines Group Inc., 15-cv-5903, (N.D. Ill). In total, there are at least 15 class actions that have been filed against the airlines, making a future Multidistrict Litigation likely.

Consumer Financial Protection Bureau

CFPB and 47 States Settle With Chase for $216 Million, Mandate Reforms to Debt Collection Practices

  • The Consumer Financial Protection Bureau (CFPB) and AGs from 47 states reached an agreement to resolve claims that Chase Bank USA N.A. and Chase Bankcard Services Inc. (together, "Chase") violated the Consumer Financial Protection Act (CFPA) by engaging in unlawful debt collection and sale practices.
  • The CFPB and the AGs alleged that Chase violated Section 1036 of the CFPA for unfair, deceptive, or abusive acts or practices by:
    • Submitting consumers to collections for accounts that were not theirs, in amounts that were incorrect or uncollectable;
    • Making inaccurate credit reporting and entering unlawful judgments that may affect consumers' ability to obtain credit, employment, and housing;
    • Filing lawsuits and obtaining judgments against consumers using false and deceptive affidavits and other documents that were prepared without following required procedures ("robo-signing"); and
    • Selling accounts to debt buyers that were already settled, discharged in bankruptcy, not owed by the consumer, or incorrect in some other fashion, with knowledge that debt buyers would file collection lawsuits based on the invalid information.
  • The consent order requires Chase to pay consumer redress of not less than $50 million, a civil penalty of $30 million to the CFPB, a separate $30 million civil penalty to the Office of the Comptroller of the Currency, and $106 million in payments to the states. It also requires Chase, within 60 days of the effective date, to withdraw, dismiss, or terminate all pre-judgment collections litigation, and all post-judgment enforcement actions pending at any time.
  • In addition, as a result of this joint action, Chase must reform its debt collection and sale practices, including the creation of safeguards to ensure that debt information is accurate, that consumers receive notice and information on the new debt holder when their debt is sold to a third party, and that debt buyers are restricted from reselling Chase's consumer debts to other purchasers.

Consumer Protection

FTC Continues to Work With Florida AG to Address Deceptive Practices

  • The Federal Trade Commission (FTC) and Florida AG Pam Bondi filed a joint lawsuit against E.M. Systems & Services, LLC, and a network of related companies operating under fictitious names (together, "Defendants"), for allegedly running a fraudulent and deceptive credit card payment reduction scam.
  • The complaint alleges that Defendants called consumers, identifying themselves as "card services," or "card member services," or by one of the Defendants' businesses and claimed to have a business relationship with the consumer's lender. Defendants offered debt relief through interest rate reductions, but after securing an upfront fee ranging from $500 to $1500, failed to fulfill their claims.
  • AG Bondi and the FTC secured a preliminary injunction and asset freeze, and are seeking a permanent injunction and restitution for consumers. In addition, as this action is the second joint federal-state action in as many weeks in Florida, it serves as a reminder of the increasingly collaborative efforts of federal and state enforcement for consumer protection.

FTC Notches More Settlements Against Payday Lenders

  • The Federal Trade Commission (FTC) settled claims against Frampton Rowland III and Timothy Coppinger, and the network of companies they owned or controlled (together, "Defendants"), alleging violations of the FTC Act, the Truth in Lending Act, and the Electronic Fund Transfer Act.
  • According to the complaint, Defendants operated a series of payday lending operations, through which they would purchase sensitive consumer financial information from lead generators, and then make unauthorized loans, followed by unauthorized withdrawals of "finance charges" from consumers' bank accounts every two weeks. If consumers contested that the loan was not authorized, Defendants would produce false or misleading documentation; if consumers closed their bank account, Defendants would sell the "loans" to debt buyers who then harassed consumers for payment.
  • The consent orders require that Defendants pay approximately $44 million ($32.1 from Coppinger defendants and $22.9 from Rowland defendants) as equitable money relief, although the orders are suspended upon Defendants' permanent transfer of bank account assets to a court-appointed Receiver. The Orders also extinguish any related consumer debt obligations, and enjoin Defendants from reporting borrowers to credit reporting bureaus.

Data Privacy

Forty-seven States Ask Congress to Preserve State Authority in Data Security and Privacy

  • Forty-seven State AGs, coordinated under the auspices of the National Association of Attorneys General (NAAG), urged Congress to preserve state authority to enforce state laws that address data security and data breach notification.
  • In a letter addressed to Congressional leadership, the AGs ask Congress not to preempt state law on data security and privacy through passage of federal legislation. The AGs argue that states are quicker to adopt legislation, more willing to try innovative approaches to addressing evolving threats, and better able to respond to identity theft and consumer fraud as it affects their constituents. Some AGs also wrote separate letters on the issue to their individual state senators.
  • The AGs indicate that many state laws provide greater protection to residents than would the current federal bill under consideration. According to some estimates, as many as 38 states would have reduced protections under the federal bill. The AGs also highlight the significant role they play in enforcing data privacy, including a growing number of states where a data-breached company must report to and coordinate with the AG. Moreover, for companies that do business in multiple states, the current structure creates an incentive to comply with the strictest requirements. Most parties involved in the debate recognize the benefit of a uniform national standard, but as the AGs indicate, the best approach might be one where a federal law created a minimum standard with joint state/federal enforcement, and states remained empowered to create greater protections.

False Claims Act

DOJ Settles With Company Claiming Benefits for "Disadvantaged" Owners

  • The U.S. Department of Justice (DOJ) reached an agreement with LB&B Associates Inc. and its principals resolving allegations that the government support services company violated the False Claims Act in order to obtain set aside contracts through a government program designed to support small, disadvantaged businesses.
  • The 8(a) Program, offered by the U.S. Small Business Administration (SBA) provides preferential procurement options for companies that are primarily owned and controlled by a person that is "socially and economically disadvantaged." The government claimed that in seeking certification under the 8(a) Program, LB&B falsely represented that Lily Brandon—who satisfied the 8(a) requirements—controlled the operations of LB&B, when in fact she did not.
  • The settlement, which requires LB&B to pay the government $7.8 million, arises out of the government's intervention in a lawsuit filed by former employees of LB&B. Under the whistleblower provision of the False Claims Act, the former employees will receive $1.5 million of the settlement.

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.