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Each week, Crowell & Moring’s State Attorneys General
team highlights significant actions that State AGs have taken. Here
are this week’s updates.
Multistate
- A coalition of 22 state Attorneys General, led by Iowa Attorney
General Bird,
sent a letter to International Shareholder
Services (ISS) and Glass Lewis, two major
Wall Street advising companies, urging them to “follow the law
and quit recommending woke investment strategies that jeopardize
millions of Americans’ retirement security.” The letter
criticizes the two companies’ position that banks should
not have to disclose their reasoning when they close a bank
account.
- A coalition of 26 state Attorneys General
submitted a comment letter to the Bureau of Alcohol, Tobacco,
and Firearms opposing a recently-proposed rule which would make any
individual who sells a firearm ‘predominantly for profit’
liable to civil, administrative, or even criminal penalties unless
the seller acquires a federal license.
The letter expresses concern that the rule sweeps too broadly,
capturing as many firearms transfers, sales, and purchases as
possible.
- A coalition of 19 state attorneys general led by Montana
Attorney General Knudsen
sent a comment letter opposing the Biden administration’s
“Business Diversity Principles” proposal. The attorneys
general
object to the proposed measures to increase diversity, equity,
inclusion, and accessibility because they “advocate for
explicitly race-based employment quotas and decision
making.”
- A coalition of 19 state Attorneys General, led by New Jersey
Attorney General Platkin
announced their support for a proposed federal rule that would
expand SEC supervisory authority over certain nonbank companies
that offer digital consumer payment and wallet services, such as
Venmo, CashApp,
Paypal, and Zelle. The rule would
subject these companies to the same regulatory oversight as banks,
credit unions, and other traditional financial institutions.
Arizona
- Arizona Attorney General Mayes
announced a settlement for more than $13 million with
Cox Communications. The settlement resolves an
investigation and lawsuit alleging the telecommunications company
failed to adequately disclose additional fees to customers.
California
- California Attorney General Bonta
announced a settlement with Invitation Homes
to resolve allegations that the company violated the California
Tenant Protection Act (TPA) and California’s price-gouging law
by unlawfully increasing rents on approximately 1,900 homes. As
part of the settlement, Invitation Homes will pay $2.04 million in
civil penalties and is required to take specific actions to ensure
compliance with California law.
Colorado
- Colorado Attorney General Weiser
announced a settlementwith Colorado property management company
Four Star Realty, in light of numerous instancesof
the company illegally charging tenants for routine repairs and
other services. Four Star agreed to pay the state just under $1
million, nearly all of which will be earmarked for consumer
restitution.
Connecticut
- Connecticut Attorney General Tong
announced a joint enforcement action against auto dealer
Manchester City Nissan, along with its owner and
several employees, for systematically deceiving customers about the
price of certified used cars, add-ons, and government fees. The
complaint alleges that the dealership regularly charged junk fees
for certification, add-on products, and government charges without
consumers’ consent.
- Connecticut Attorney General Tong
issued a cease and desist letter to
HighBazaar, warning organizers that the unlicensed
cannabis market appears to violate multiple state statutes. To
date, theOffice of the Attorney Generalhas three pending
enforcement actions, and has secured judgments against four
additionalConnecticutretailers for alleged violations of the
Connecticut Unfair Trade Practices Act over the sale of illegal
delta-8 THC.
- Connecticut Attorney General Tong
filed seven new enforcement actions against wholesalers and
retailers engaging in the distribution and sale of potent, illicit
cannabis products in Connecticut. The actions allege that the
products have not been subject to Connecticut’s testing
standards, do not contain appropriate warnings, and in some cases
are sold in misleading packaging designed to appeal to
children.
Florida
- Florida Attorney General Moody
announced the activation of the state price gouging hotline due
to a state of emergency declaration for severe weather.
Florida’s price gouging law only applies to items and services
essential to getting ready for, or recovering from, a storm within
the areas of a declared state of emergency.
Michigan
- Michigan Attorney General Nessel
announced a lawsuit against Michigan’s Choice Tree
Service, Storm Support Emergency Tree
Removal, and business owner David Foster, alleging illegal
business practices. The Department of the Attorney General
presented evidence that Foster’s businesses were confusing and
misleading consumers about their legal rights.
Minnesota
- Minnesota Attorney General Ellison
announced a lawsuit against a group of dairy farms and their
owners seeking at least $3 million in damages for wage theft. The
suit alleges that the farms deducted hours from workers’
paychecks, failed to pay wages at the beginning and end of
workers’ employment, and unlawfully deducted rent to pay for
substandard onsite housing.
- Minnesota Attorney General Ellison
announced that the U.S. Supreme Court had remanded the
state’s lawsuit against major actors in the fossil-fuel
industry, allowing the case to proceed in state court. The suit
alleges that the companies deceived and defrauded Minnesotans about
the climate change-related danger associated with their
products.
New York
- New York Attorney General James
announced an agreement with Hudson Valley-area health care
provider Refuah Health Center, Inc to invest $1.2
million to strengthen its cybersecurity and pay $450,000 in
penalties and costs. The Office of the Attorney General found that
Refuah failed to maintain appropriate controls to protect and limit
access to sensitive data.
North Carolina
- North Carolina Attorney General Stein
announced that the state’s price gouging law is in effect
after Governor Roy Cooper declared a statewide state of emergency
due to severe weather. Since 2018, Attorney General Stein has
brought 12 lawsuits against 29 defendants under North
Carolina’s price gouging statute and obtained 14 judgments or
settlements totaling $1,080,000 against 25 defendants.
Oklahoma
- Oklahoma Attorney General Drummond
announced that he is exploring legal action against insulin
manufacturers and pharmacy benefit managers for wrongful conduct
that resulted in artificially increased prices for insulin.
Drummond has issued a Request for Proposal for outside counsel to
investigate conduct and potentially pursue litigation.
Pennsylvania
- Pennsylvania Attorney General Henry
announced an agreement with Pittsburgh Career
Institute that relieves dozens of students of $218,000 in
debt balances that were outstanding when the school closed in
November 2023. This is the latest in a series of actions through
which the Pennsylvania Office of the Attorney General has obtained
more than $205 million in private and federal student loan debt
cancellation.
Utah
- Utah Attorney General Reyes
announced the Utah Consumer Privacy Act (UCPA), effective
December 31, 2023. The UCPA requires businesses to protect personal
data and provide consumers with information about how to exercise
their rights.
Washington
- Washington Attorney General Ferguson
announced a $460,000 settlement with House of Raeford
Farms to resolve claims of price-fixing. The lawsuit
alleges that House of Raeford Farms engaged in a widespread illegal
conspiracy with 18 other chicken producers to inflate and
manipulate prices, rig contract bids, illegally exchange
information, and coordinate industry supply reductions to maximize
profits.
- Washington Attorney General Ferguson
proposed legislation to increase the maximum penalty for
antitrust violations like price-fixing and collusion. The
legislation increases the maximum penalty for price-fixing, illegal
collusion, and other antitrust violations to three times the
illegal gains or loss avoided.
- Washington Attorney General Ferguson
announced a lawsuit against Labor Law Poster
Service and its owners, alleging over 300,000 violations
of the Washington Consumer Protection Act through the sending of
deceptive solicitations giving the false impression that they are
mandatory bills from a government agency.
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