United States: State AGs In The News - July 23rd, 2015


AT&T Inches Closer to Approval for DirecTV Acquisition

  • The U.S. Department of Justice (DOJ) stated that it will not challenge AT&T's proposed acquisition of DirecTV, and the Federal Communication Commission (FCC) has indicated, subject to specific conditions, that it is likely to approve the deal that would join the country's largest satellite television provider with the second-largest wireless communication company.
  • FCC Chairman Wheeler has issued a proposed order, currently awaiting approval from the other commissioners, in which he outlined the conditions upon which he would approve the merger.
  • The order would require that AT&T increase investment in high-speed fiber connections, avoid policies that favor affiliated video services and content, and submit all completed interconnection agreements and network performance reports to the FCC. The chairman also proposed the appointment of an independent officer to help ensure compliance with the proposed conditions.

Oklahoma Gives AG Enhanced Powers Over Professional Boards

  • Oklahoma Governor Mary Fallin issued an executive order providing the State AG's office with the power to oversee state regulatory boards. The boards, many of which regulate professional standards and licensing, are now required to submit "all proposed licensure or prohibition actions" to the AG for legal review.
  • Earlier this month, AG Scott Pruitt wrote a letter to the governor, warning that many Oklahoma professional boards and commissions were at risk of antitrust liability in light of the recent decision in North Carolina State Board of Dental Examiners v F.T.C. decided earlier this year. In that case, the Supreme Court held that a state licensing board consisting of active participants in the regulated occupation cannot maintain immunity from antitrust liability if it is not actively supervised by the state.
  • AG Pruitt noted in his letter that many of Oklahoma's professional boards are at risk of antitrust liability, as they are comprised of members from the profession they regulate, yet do not have sufficient state oversight. Although the AG had previously provided legal advice to various state boards, the governor's executive order gives him the power to remove those board members who do not follow the AG's directives.

Another Senator Seeks Antitrust Investigation Into Airlines

  • This week U.S. Senator, Charles Schumer called for greater federal scrutiny into the airlines' sales practices, urging the DOJ and Department of Transportation to investigate whether certain airlines are violating antitrust laws by "freezing out" third-party travel websites. Senator Schumer's request comes on the heels of Senator Richard Blumenthal's letter to the DOJ alleging potential collusion among major air carriers.
  • According to Senator Schumer, a growing number of airlines are withholding information from third-party websites, such as TripAdvisor, Expedia, and Orbitz, or charging extra fees for tickets purchased through them. Senator Schumer argues that these changes in policy deny consumers the opportunity to compare different flights and airlines side by side, resulting in reduced competition and higher prices.
  • Airlines for America, an industry group, responded in favor of the airlines, pointing out that "[a]irlines like any other company that sells consumer goods, should be able to sell their products where they believe they are best suited for their customers."


New York AG Puts Greater Focus on Charity

  • New York AG Eric Schneiderman filed a lawsuit to close the National Children's Leukemia Foundation (NCLF) and to hold its founder Zvi Shor accountable for failing to conduct most of the programs advertised on its website, for failing to provide more than a tiny fraction of the money raised toward the charitable causes the donors intended to support, and for ignoring state filing obligations.
  • The NCLF had indicated that it used donations to create a bone marrow registry, an umbilical cord blood banking program, and its own cancer research center. It also told its donors that it had filed a patent application for a new lifesaving treatment for leukemia.
  • The lawsuit alleges that during a five-year period, NCLF raised $9.7 million; $8.9 million of which was raised by professional fundraisers hired by NCLF, who in turn were paid approximately $7.5 million. The AG also alleges that the organization spent less than one percent of the money raised on direct cash assistance to leukemia patients and transferred another five percent to a shell organization in Israel run by Shor's sister, allegedly for research purposes.

Consumer Financial Protection Bureau

CFPB Adds $70 Million in Penalties Onto $700 Million Restitution for Alleged Deceptive Credit Add-ons

  • The Consumer Financial Protection Bureau (CFPB) announced that it had reached an agreement with Citibank, N.A., Department Stores National Bank, and Citicorp Credit Services, Inc., (together "Citi") to resolve allegations that Citi violated the Consumer Financial Protection Act and the Telemarketing Sales Rule through aggressive marketing, billing, and collection practices associated with credit card add-on products and services.
  • The CFPB alleged that Citi engaged in myriad unfair or deceptive practices associated with its credit card accounts, including the following claims:

    • Deceptive marketing, where Citi misrepresented or failed to inform consumers about the true cost of the services offered, and also misrepresented the benefits and scope of the add-on products and services.
    • Unfair billing practices, where Citi either charged consumers for debt protection and credit monitoring services they did not receive, or charged consumers without express authorization.
    • Deceptive collection practices, where Citi misled consumers to believe that additional, optional, fees were unavoidable processing fees.
  • The consent order requires Citi to provide $700 million in relief to approximately 8.8 million customer accounts. Citi must also pay $35 million to the CFPB, and a separate $35 million to the Comptroller of the Currency as civil penalties.
  • The consent order also requires Citi to cease billing for credit monitoring products that do not provide the claimed benefits and precludes Citi from marketing or selling credit card add-on products and services by telephone or at point-of-sale without prior approval of its compliance plan by the CFPB. In addition, for a period of five years, Citi must keep detailed records on every enrollment in consumer credit add-on products and services.

Consumer Protection

FTC Seeks Enforcement Against Alleged Repeat Offender

  • The Federal Trade Commission (FTC) filed an enforcement action under seal in federal court against Lifelock, Inc., alleging that the company violated the terms of its 2010 settlement with the FTC and 35 State AGs.
  • The 2010 settlement required Lifelock and its principals, among other things, to stop making any further deceptive claims, including falsely advertising that it protected consumer data with the same high-level safeguards as financial institutions; and to establish a comprehensive information security program to protect the sensitive personal data, including credit card, social security, and bank account numbers it collects from its users. The FTC now alleges that Lifelock has failed to satisfy either.
  • The FTC is asking the court to order LifeLock to provide full redress to all consumers affected by the company's ongoing violations.

Forty-Five AGs Call for Call-Blocking

  • Indiana AG Greg Zoeller led a group of 45 AGs asking telecom service providers to offer technology to their consumers that would allow customers to request automatic call-blocking of robo-calls and other mass call efforts.
  • The AGs' letter, which was sent through the collaborative forum of the National Association of Attorneys General, is addressed to the CEOs of five major telecom service providers. It highlights recent events, including AGs efforts in requesting the Federal Communications Commission (FCC) to provide clarification, and the FCC's guidance that expressly permits telecom companies to offer their customers the ability to block robo- and autodialed calls, as well as other unwanted spam calls and texts.
  • Previously, representatives of the telecom industry had testified in front of a Senate sub-committee that "legal barriers prevent carriers from implementing advanced call-blocking technology to reduce the number of unwanted telemarketing calls."

Data Privacy

Seventh Circuit Clarifies "Impending Certainty" Defense for Data-Breached Companies

  • The Seventh Circuit has ruled that victims of the 2013 Neiman Marcus data breach adequately alleged standing to sue the retailer, even if they have not yet suffered any fraudulent charges, identity theft, or other damages from the information taken by hackers.
  • The Seventh Circuit decision reversed the trial court (N.D. Ill.), which had ruled that the plaintiff's theory of damages, based on the risk of future harm, was too remote to grant Article III standing. The trial court dismissed the lawsuit based in large part on a 2013 Supreme Court decision, Clapper v Amnesty International, which held that plaintiffs must show that a future injury is "certainly impending" in order to bring claims.
  • The Seventh Circuit distinguished the Clapper holding significantly in the context of a consumer data breach, and indicated that a plaintiff can demonstrate standing, even if there is only a "substantial risk" of future harm, and the plaintiff is compelled to "reasonably incur costs to mitigate or avoid that harm."
  • The court also weakened one other potential challenge to consumers claiming standing in data breach lawsuits: it indicated that even though other major retailers suffered similar breaches that may have exposed plaintiff's private information, for pleading causation, the plaintiffs' injuries were still "fairly traceable" to Neiman based on the retailer's "admissions and actions" following the breach.

Facebook Loses Appeal, Lacks Standing to Challenge Search Warrants on Behalf of Users

  • A New York state appeals court upheld the trial court's determination that Facebook, Inc. lacked standing to challenge, on behalf of its users, the state prosecutor's search warrants demanding access to user account information.
  • The warrants were issued in support of the state's investigation into disability fraud, and sought information on 381 Facebook users alleged to have led active lives despite collecting state disability payments. Facebook argued that the warrants were overly broad as they requested information regarding users' ages, religions, cities of birth, educational affiliations, family members, partners, friends, favorite music, political "liked" things, photographs, private chats, and messages. Although the court ruled against Facebook on standing, it indicated that it was troubled by the scope of the warrants.
  • Facebook also argued that because it was required to participate in the search and provide the information stored on its servers to the state, the warrants were the legal equivalent of a civil subpoena, which an Internet service provider can challenge under the U.S. Stored Communications Act. The five judge panel, however, ruled that a social media company has "no constitutional or statutory right to challenge an allegedly defective warrant before it is executed." The court indicated that under state and federal law, only defendants could challenge search warrants, and only after they have been executed in a pre-trail hearing.

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
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 you may opt out by clicking here

    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.

    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.

    By clicking Register you state you have read and agree to our Terms and Conditions