United States: The State AG Report Weekly Update August 1, 2019

Last Updated: August 5 2019
Article by Lori Kalani and Bernard Nash

ANTITRUST

California Attorney General Announces Settlement with Pharmaceutical Company Over Allegedly Anticompetitive Patent Settlement

  • California AG Xavier Becerra reached a settlement with pharmaceutical company Teva Pharmaceutical Industries Ltd. and its wholly-owned subsidiaries (collectively, "Teva") over allegations that its agreements with other pharmaceutical companies violated state antitrust and consumer protection laws and the federal Sherman Act and Clayton Act.
  • According to the settlement, Teva allegedly entered into "pay-for-delay" agreements—in which a brand company pays a generic company to keep a competing drug off the market—with other pharmaceutical companies, thereby impeding consumer access to lower-priced generic alternatives to Teva's branded drug Provigil.
  • Under the terms of the settlement, Teva must pay $69 million, including over $25 million to create a consumer compensation fund, and is enjoined from entering into pay-for-delay agreements for ten years.
  • As previously reported, Teva settled with the Federal Trade Commission ("FTC") over similar allegations in February 2019. The funds to resolve the settlement with AG Becerra may be paid from the fund created by the FTC settlement.

CHARITIES

California Attorney General Sues Nonprofit for Allegedly Misleading Donors

  • California AG Xavier Becerra filed a lawsuit against nonprofit Move America Forward, an affiliated LLC, and individuals (collectively, "Move America Forward") over allegations that it misled donors about its affiliations, charitable outreach, and political donations in violation of state fiduciary, charity, and consumer protection laws and Internal Revenue Service rules.
  • According to the complaint, Move America Forward fundraised for care packages for U.S. troops and other military support yet failed to disclose use of charitable donations to support a political action committee and political campaigns, and engaged in self-dealing transactions by using nonprofit funds to pay for-profit entities controlled by the same individuals for services, among other things.
  • The complaint seeks restitution, civil penalties, costs and fees, and injunctive relief.

CONSUMER PROTECTION

New York Attorney General, CFPB Settle with Debt Collectors Over Alleged Debt Inflation and Unlawful Collection Tactics

  • New York AG Letitia James and the Consumer Financial Protection Bureau ("CFPB") settled with debt collection companies Northern Resolution Group, LLC, Enhanced Acquisitions, LLC, Delray Capital, LLC, and their owners over allegations that the companies engaged in unlawful debt collection tactics in violation of state fraud and consumer protection laws, and the federal Dodd-Frank Wall Street Reform and Consumer Financial Protection Act of 2010 and Fair Debt Collection Practices Act.
  • According to AG James and the CFPB, the debt collectors allegedly routinely inflated consumer debts by $200 or more, falsely threatened debtors with arrest for check fraud and prosecution, used call spoofing to imitate government or judicial offices, and used automated telephone dialers to send threatening messages in bulk, among other things.
  • Under the terms of the stipulated final judgments and orders, Northern Resolution Group, Enhanced Acquisitions, and their owner must pay $40 million in restitution and $10 million in civil penalties to both New York and the CFPB. Delray Capital and its owner must pay $4 million in restitution and $1 million in civil penalties to both New York and the CFPB, which is suspended upon payment of $10,000 in restitution and $1 in civil penalties.

DATA PRIVACY & SECURITY

3 Attorneys General to Investigate Financial Institution Over Data Breach

  • Connecticut AG William Tong, Illinois AG Kwame Raoul, and New York AG Letitia James have announced investigations of Capital One Financial Corporation ("Capital One") over the reported data breach of consumer information.
  • According to Capital One, an individual gained unauthorized access to certain personal and transaction information for approximately 100 million people in the U.S. who had applied for credit card products or were Capital One credit card customers.
  • As previously reported, New York recently enacted an overhaul of the state's data security laws—the Stop Hacks and Improve Electronic Data Security ("SHIELD") Act—which expands the triggers for data breach notifications and requires certain companies to implement appropriate data security safeguards, among other things.

LABOR & EMPLOYMENT

Massachusetts Attorney General Settles with Temporary Employment Agency Over Alleged Wage and Hour Violations

  • Massachusetts AG Maura Healey reached a settlement with temporary employment agency The Credence Group Corporation and its president (collectively, "Credence") over alleged violations of state wage and hour laws.
  • According to the AG's office, Credence allegedly failed to allow employees to use earned sick leave, pay wages on time, and furnish acceptable paystubs, and misclassified employees as independent contractors resulting in routine underpayments, among other things.
  • According to the AG's office, under the terms of the settlement, Credence will pay $106,435 in restitution and penalties and has come into compliance with the wage and hour laws.

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