The State AG Report Weekly Update May 25, 2017

2018 Election Update

Michael Dougherty Announces Bid for Colorado Attorney General

  • Michael Dougherty formally announced his candidacy to become Colorado AG. Dougherty is the third Democrat to formally enter the 2018 Colorado AG race, following Phil Weiser and Rep. Joe Salazar. They are seeking to challenge Republican AG Cynthia Coffman, who is expected to run for re-election.
  • Dougherty is currently Deputy Prosecutor for Jefferson and Giplin counties, having previously worked under former Colorado AG John Suthers, where he led the criminal justice division.

Ryan Torrens Announces Bid for Florida Attorney General

  • According to reports, Ryan Torrens has formally registered his candidacy to become Florida AG. Torrens is the first Democrat to formally enter the 2018 Florida AG race and is seeking an open seat currently held by Republican AG Pam Bondi, who is term-limited.
  • Torrens is currently an owner of and partner at a law firm focusing on foreclosure defense and consumer protection litigation.

Consumer Protection

New York Attorney General Reaches Settlement with Non-Profit Over Race-Based Housing Discrimination

  • New York AG Eric Schneiderman reached a settlement with non-profit membership organization German American Settlement League (“GASL”) over allegations that it discriminated against non-white and non-German individuals, in violation of federal, state, and local laws.
  • According to the AG’s office, GASL allegedly excluded non-white, non-German individuals from membership in its organization and from home ownership in its residential community by implementing bylaws that explicitly only permitted individuals with German heritage to become members and own homes, in addition to unreasonably restricting advertising for homes that were up for sale in the community.
  • Under the terms of the agreement, GASL must cease discriminating against individuals on the basis of race or national origin, fully comply with federal, state, and local fair housing and not-for-profit corporation laws, and periodically report to the AG’s office to demonstrate compliance, among other things.

Data Privacy

Illinois Attorney General Leads Multistate Settlement with National Retail Chain Over Nationwide Data Breach

  • Illinois AG Lisa Madigan led a coalition of 48 AGs in reaching a settlement with national retail chain Target Corporation (“Target”) over allegations that the nationwide data breach experienced by the company in 2013 was the result of insufficient data systems safeguards in violation of state consumer protection laws.
  • According to AG Madigan, in 2013, cyber attackers allegedly exploited vulnerabilities in Target’s gateway server and stole credentials from a third-party HVAC vendor, allowing the cyber attackers to access Target’s customer service database and other customer data, including full names, telephone numbers, email addresses, mailing addresses, and payment card information.
  • Under the terms of the settlement, Target must adhere to a series of new industry standards to protect consumer information, such as developing a comprehensive security program, hiring a third-party to conduct a security assessment, maintaining encryption policies, segmenting cardholder data, and controlling access to its network, as well as pay $18.5 million to the states participating in the settlement.

New York Attorney General Settles with Technology Company Over Insecure Bluetooth Technology

  • New York AG Eric Schneiderman reached a settlement with technology company Safetech Products LLC and its owner (“collectively “Safetech”) to resolve allegations that the company allegedly failed to properly secure passwords and other security information for its Bluetooth-enabled doors and padlocks, in violation of state laws.
  • According the AG’s office, Safetech’s locks allegedly transmitted unencrypted passwords to users’ smartphones, potentially allowing others to intercept the passwords and open the locks, and relied on weak default passwords that could easily be compromised.
  • Under the terms of the settlement, Safetech must, among other things, encrypt passwords for its locks and other Bluetooth-enabled devices, require users to establish unique passwords when initially enabling the locks, and implement a comprehensive written security program that is reasonably designed to address security risks and protect the privacy, security, and confidentiality of security information.

State AGs in the News

NAAG Pens Letter to U.S. Senate Finance Committee in Support of Returning Prescription Drug Settlement Money to States

  • The National Association of Attorneys General (“NAAG”) sent a letter signed by a bi-partisan group of 51 AGs to U.S. Senate Finance Committee Chairman Orrin Hatch and Ranking Member Ron Wyden, urging them to introduce legislation that would permit the federal government to return Medicare Part D prescription drug settlement funds to states.
  • In the letter, the AGs noted that while states and the federal government fund the Medicare Part D prescription drug benefit for individuals with coverage under both Medicare and Medicaid, the federal government has not shared with states the recoveries it obtained through pharmaceutical fraud settlements for Part D drugs, and urged Congress to enact federal legislation to address the issue.

State v. Federal

New York and California Attorneys General Lead Coalition Seeking to Preserve ACA Subsidies

  • California AG Xavier Becerra and New York AG Schneiderman led a coalition of 16 Democratic AGs and New York Governor Andrew Cuomo to file a motion to intervene in a lawsuit filed by the Republican majority in the U.S. House of Representatives to block the funding of Affordable Care Act (“ACA”) subsidies.
  • During the last months of the Obama Administration, the U.S. District Court ruled in favor of the House Republicans and agreed they had standing to bring the lawsuit, a decision which was appealed by the Obama Administration. Following the election of Donald Trump, the House Republicans requested that the ruling be held in suspension while the Trump Administration considered next steps.
  • In the motion to intervene, the AGs argued that that blocking the ACA subsidies, which are used to reduce co-payments, deductibles, and other out-of-pocket costs for low-income individuals, could result in direct financial loss to their states, as well as cause consumer harm, increase the number of uninsured individuals, and produce unstable insurance markets.

Colorado and Massachusetts Attorneys General Lead Bi-Partisan Coalition to Oppose Elimination of Funding for Legal Services

  • Colorado AG Cynthia Coffman and Massachusetts AG Maura Healey led a bipartisan group of 32 AGs who sent letters to Congressional Appropriations Committees’ leadership to oppose the Trump Administration’s proposal to eliminate federal funding for the Legal Services Corporation (“LSC”), which provides legal services for rural and low-income Americans.
  • In the letters sent to the U.S. Senate and the U.S. House of Representatives Appropriations Committees, the AGs wrote that for over 40 years LSC has provided access to legal services for the most vulnerable members of society, and of the importance of the federal government, in light of state budgetary constraints, to maintain its tradition of providing legal services to those who might not otherwise be able to afford an attorney.
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