United States: State AGs In The News - February 19th, 2016

Last Updated: February 26 2016
Article by Aaron R. Lancaster and Erik Lowe


West Virginia Senate Looks to Shield Hospital Merger From FTC Review

  • A West Virginia Senate committee has approved a bill that would address a disagreement between West Virginia AG Patrick Morrisey and the Federal Trade Commission (FTC) over whether a pending merger between two West Virginia hospitals would reduce competition. The bill, Senate Bill 597, is currently on its second reading in front of the entire Senate.
  • AG Morrisey cleared the merger last July, subject to conditions on rate setting, employee agreements, and exclusivity. The FTC, however,  challenged the merger in November and is awaiting an administrative hearing scheduled for April. Among other things, AG Morrisey and the FTC differ on how to define the market, with the FTC focusing on a three county geographic area, and the AG indicating that more than 60 percent of the patients for the two hospitals come from outside the three counties analyzed.
  • If enacted, the Bill would shield certain actions of hospitals and health care providers operating under the jurisdiction of the state health care agency from scrutiny under federal antitrust laws. Specifically, the Bill would allow the state health care agency to issue a Certificate of Need, permitting mergers of hospitals located within 25 highway miles of each other even if the FTC has determined that the merger would result in reduced competition.
  • A 2013 Supreme Court case is informative on the issue. In FTC v. Phoebe Putney Health System, Inc., a pair of merging Georgia hospitals argued that the state action immunity doctrine prevented the FTC from oversight in local healthcare markets. In that case, the Court ruled that the Georgia law "ha[d] not clearly articulated and affirmatively expressed a policy to allow hospital authorities to make acquisitions that substantially lessen competition." Thus, the merger was not insulated from FTC review.

Consumer Protection

New York AG Goes After Bad Reviews

  • New York AG Eric Schneiderman announced the settlement of four separate investigations into unrelated companies for allegedly posting, or encouraging the posting of, deceptive online reviews and endorsements in violation of N.Y. General Business Law §§ 349 and 350.
  • The facts underlying the investigations exhibited the many nuanced ways through which deceptive conduct can occur in this area:
    • Machinima, Inc., a video game social network, allegedly paid expert gamers on behalf of a third party to post videos in which they endorse a new gaming system and several new games. The AG argued that this endorsement method gave the appearance that the opinions were independent and unpaid.
    • Premier Retail Group, Inc., allegedly solicited online reviews from the public via Craigslist by offering free samples, free vouchers and other compensation in exchange for positive reviews. Premier did not require that the reviewer visit a Premier location or disclose that they were compensated.
    • ESIOHInternet Marketing allegedly paid individuals to post positive reviews on Google Places and Yelp in support of its small business clients. The AG indicated that ESIOH even offered advice to reviewers to avoid having their review tagged as suspicious by website filters.
  • In addition to modest monetary penalties, ranging from $50,000 to $20,000, the settlements order the companies to cease their involvement in activity that incents the creation of deceptive reviews, as well as to require that endorsers and reviewers prominently disclose any material financial connection with the company being reviewed.

FCC Fines Companies for Cramming and Slamming Spanish-Speaking Consumers

  • The Federal Communications Commission (FCC) announced that it will seek a penalty of $29.6 million from OneLink Communications Inc., and related telephone service resellers, alleging that the group placed unauthorized charges on consumer accounts ("cramming"), or switched consumers to higher-priced service providers without their consent ("slamming").
  • Notably, the FCC alleged that OneLink contacted consumers under the pretext of a (nonexistent) package waiting for them at their local U.S. Post Office. OneLink would ask the consumers to repeat a confirmation number or otherwise confirm that they would accept delivery of the package. When the consumers responded "yes," OneLink would allegedly record the consumers' response, and use it (inappropriately) to satisfy third-party verification requirements to authorize additional charges or a change in long-distance carrier.
  • OneLink continues to dispute the FCC's allegations, calling the whole process "fundamentally flawed and politically motivated."  OneLink has indicated it will "vigorously defend against the baseless claims, misrepresented factual circumstances and trumped-up fines."

Financial Industry

Money Transferor to Send Payment to State AGs

  • Texas AG Ken Paxton, and AGs from 48 states and the District of Columbia have settled their investigation into MoneyGram Payment Systems, Inc., for the money transfer service's role in connection to various online and telephone scams resulting in fraudulently-induced transfers of money.
  • The multistate investigation did not allege that MoneyGram actively participated in the scams, but rather that it failed to detect recurring scams, or to provide reasonable protections for consumers who were being actively deceived by third parties while at the same time generating revenue through fees based on the number and amounts of transfers made. For its part, MoneyGram did not admit that it violated any law.
  • In the Assurance of Voluntary Compliance, MoneyGram agreed to pay $13 million to the states for consumer redress and for investigative and legal costs. MoneyGram also agreed to implement a number of anti-fraud measures, including:
    • adopting a risk-based approach to verify the identities of senders and receivers;
    • enhancing consumer education efforts, including a conspicuous warning that identifies common fraud schemes directed at consumers;
    • requiring anti-fraud training for all transfer agents;
    • encouraging data sharing between MoneyGram and other money transfer companies regarding fraudulently-induced transfer activity; and
    • maintaining an internal list of individuals who have been previously involved with alleged fraudulently-induced transfer schemes.


Software Maker Runs Into FCPA Issues With Chinese Subs

  • The Securities and Exchange Commission (SEC) accepted an offer of settlement to resolve allegations that PTC Inc., violated the Foreign Corrupt Practices Act (FCPA) through improper payments made to induce business between the Chinese government and the Massachusetts-based software maker.
  • The SEC's allegations are connected to separate investigations into PTC's Shanghai and Hong Kong based subsidiaries, both of which admitted to using third-party agents to provide $1.5 million in gifts, nonbusiness related travel, and entertainment to officials at Chinese state-owned entities when the officials came to visit PTC's U.S. headquarters. The Chinese subs had indicated in their books that these were "commission payments" or "sub-contracting fees." The subsidiaries entered into non-prosecution agreements with the Department of Justice (DOJ).
  • Although PTC did not provide the payments directly, the SEC determined that, among other things, PTC failed to implement and maintain an adequate internal accounting control and recordkeeping compliance program required by Section 13(b)(2) of the Exchange Act.
  • The order requires PTC to pay $13.6 million in disgorgement and interest, while also acknowledging $14.5 million that PTC will pay to the DOJ under the non-prosecution agreements. The order also indicates that the SEC considered in a positive light, PTC's voluntary self-disclosure and subsequent remedial efforts, including the implementation of an enhanced compliance program and the termination of responsible employees and business partners.

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
Related Video
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.


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.