The State AG Report Weekly Update June 22, 2017

Charities

New York Attorney General Reaches Settlement with Breast Cancer Charity over Fraud Allegations

  • New York AG Eric Schneiderman reached a settlement with the Breast Cancer Survivors Foundation, Inc. (“BCSF”) and its president (collectively “BCSF”) to resolve allegations that BCSF failed to use proceeds for a charitable purpose in violation of the state’s Executive Law
  • According to the AG’s office, BCSF allegedly diverted almost all proceeds it received from donations collected for a charitable purpose to the organization’s professional fundraiser and his companies and associates.
  • Under the terms of the settlement, BCSF agreed to pay $350,000 to be distributed to legitimate breast cancer foundations, cancel its registration as a charity in New York and any other state, and bar its president from any future involvement in charities, among other things.

Consumer Protection

New York Attorney General Files Lawsuit Against Paving Company for Allegedly Running Deceptive Paving Scheme

  • New York AG Schneiderman filed a lawsuit against paving company Tri-State Paving and its principals (collectively “Tri-State”) for allegedly violating state home improvement contractor laws in its provision of paving services.
  • According to the AG’s office, Tri-State allegedly deceived consumers by offering to pave driveways at a low price or without a price estimate, without signed contracts for work over $500, as required by state law, and subsequently demanded higher payments for work that was not agreed upon and often of poor quality.
  • The lawsuit seeks a permanent injunction against Tri-State prohibiting it from operating as a contractor, restitution for affected homeowners, and penalties and costs to the state.

Pennsylvania Attorney General Reaches Settlements with Home Improvement Contractors For Allegedly Failing to Register with the State

  • Pennsylvania AG Josh Shapiro reached settlements with 31 home improvement contractors who allegedly failed to register their businesses with the state, as required by the state’s Home Improvement Consumer Protection Act.
  • According to the AG’s office, the contractors allegedly operated in the state without registering their businesses, as required for contractors who earn more than $5,000 a year.
  • Under the terms of the settlements, the contractors were fined a minimum of $500 each.

Data Privacy

New York Attorney General Reaches Settlement with Healthcare Services Company for Allegedly Delayed Notice of Data Breach

  • New York AG Schneiderman reached a settlement with healthcare service company CoPilot Provider Support Services, Inc. (“CoPilot”) for allegedly violating state laws by waiting a year to notify its patients of a data breach.
  • According to the AG’s office, CoPilot allegedly experienced a data breach allowing a cyber attacker to download patients’ records, including name, gender, date of birth, address, phone number, insurance information, and—in some instances—social security numbers, but failed to notify affected consumers as soon as possible, as required by law.
  • Under the terms of the agreement, CoPilot must comply with the state’s consumer protection and data security laws, update relevant policies and procedures to ensure compliance, create a legal compliance program with appropriate personnel training, require all officers and managers to review the AG’s agreement, and pay $130,000 in penalties.

Pharmaceuticals

AGs Launch Multistate Investigation of Manufacturers Marketing and Selling Opioids

  • A bipartisan coalition of 30 AGs is investigating opioid manufacturers for allegedly engaging in unlawful marketing and sales practices related to opioids; according to reports, the coalition is being by led by the AGs from the District of Columbia, Florida, Maryland, MassachusettsPennsylvania, Tennessee, and Texas.
  • The coalition of AGs plan to use investigative tools, including subpoenas for documents and testimony, to determine an appropriate course of action. The AGs have not yet named the manufacturers under investigation.
  • As previously reported, Ohio AG Mike DeWine recently filed a lawsuit against five opioid companies for allegedly misrepresenting the risks and benefits of opioids.

Missouri Attorney General Files Lawsuit Against Opioid Manufacturers

  • Missouri AG Josh Hawley filed a lawsuit against prescription opioid companies Purdue Pharma, Endo Health Solutions, and Janssen Pharmaceuticals for allegedly violating state consumer protection laws by misrepresenting the risks and benefits of opioids.
  • According to the AG’s office, the opioid companies allegedly engaged in a deceptive multi-year campaign that misrepresented the addictive risks of opioids, which exacerbated the opioid crisis in the state.
  • The lawsuit seeks restitution, injunctive relief, disgorgement, civil penalties, punitive damages, costs, and further relief as the court deems appropriate.

State v. Federal

35 AGs Urge FCC to Reject Broadband Industry’s Petition to Block State and Local Regulation Authority

  • A bipartisan coalition of 35 AGs, led by Texas AG Ken Paxton and New York AG Schneiderman, filed comments with the U.S. Federal Communications Commission (“FCC”) in opposition to a petition filed by NCTA – The Internet & Television Association and USTelecom (collectively the “broadband industry”), which asked the FCC to provide a declaratory ruling that state and local entities do not have the authority to regulate advertising about broadband Internet speeds.
  • In their comments, the AGs argue that the broadband industry’s recommendations to effectively restructure the broadband regulatory system would upend the existing concurrent state-federal regulatory framework and leave the FCC with the sole authority to regulate all advertising regarding broadband performance.

9 Democratic AGs Seek to Intervene to Preserve Student Loan Protections in U.S. Department of Education Lawsuit

  • 9 Democratic AGs, led by Massachusetts AG Maura Healey, filed a motion for leave to intervene in California Association of Private Postsecondary Schools (CAPPS) v. Betsy DeVos, a lawsuit which challenges U.S. Department of Education regulations that protect federal student loan borrowers known as the “Borrower Defense Regulations.”
  • According to the AGs, the Borrower Defense Regulations provide critical protections to federal student loan borrowers against misconduct by postsecondary institutions, including for-profit colleges, by, among other things, allowing borrowers to obtain loan forgiveness upon a successful AG enforcement action against a school. The AGs argue that they have a specific interest in the regulations and seek to prevent them from being dismantled.
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