The State AG Report Weekly Update August 13, 2015

Breaking News

NAAG Forms New Committee Focused on Agriculture

  • South Dakota AG Marty Jackley, President of the National Association of Attorneys General (NAAG), announced the formation of a new NAAG committee to address legal challenges facing farmers, ranchers, and the agriculture industry.
  • The NAAG Agriculture Committee will be co-chaired by Arkansas AG Leslie Rutledge (R) and Iowa AG Tom Miller (D).  Committee membership also includes the AGs of Colorado, Hawaii, Indiana, Kansas, Wisconsin, and Vermont.

Consumer Protection

Florida Attorney General Sues Debt Management Company for Allegedly Misleading Consumers About Offered Services

  • Florida AG Pam Bondi filed a lawsuit against Financial Help Services, Inc., Nation Wide Consumer Debt Relief, Inc., and their owner over allegations that the companies violated Florida’s Deceptive and Unfair Trade Practices Act by falsely promising to help consumers lower their debt and improve poor credit.
  • According to the complaint, among other things, the companies allegedly accepted payments from consumers, failed to timely pay creditors or pay them at all, and did not provide promised financial counseling services.
  • The complaint seeks restitution and to prohibit the companies from operating debt management and credit counseling services in Florida.

New Hampshire Attorney General Settles with Tax Preparation Company for Alleged State Consumer Protection Law Violations

  • New Hampshire AG Joseph Foster entered into an Assurance of Discontinuance with HRB Tax Group, Inc., d/b/a H&R Block, to resolve allegations the company violated state consumer protection laws by erroneously charging consumers for certain tax form preparations.
  • According to the AG’s office, the company allegedly charged consumers for the preparation of a New Hampshire business and profits tax return when no such return was necessary.
  • Under the terms of the Assurance, H&R Block will refund $33,587.30, with interest, to harmed consumers, and pay the costs of the investigation plus $5,000 to the state, in lieu of a civil penalty. The company also agreed to develop and implement better protocols and quality control systems to prevent erroneous charges, like those alleged, in the future.

New York Attorney General Cracks Down on Online Retail Sales of Toy Guns that Allegedly Violate State Law

  • New York AG Eric Schneiderman reached settlements with five major online retailers and sent 67 cease and desist letters to their third-party sellers over allegations they violated state laws by selling life-like imitation guns to state consumers.
  • According to the AG’s investigation, over 6,000 life-like toy guns were allegedly sold to consumers in New York in a three-year period, most through online sales, in violation of state and city laws which prohibit the sale of imitation weapons.
  • The settlements require Amazon.com, Kmart, Sears, Walmart and California-based ACTA to pay over $300,000 in penalties to the state and to abide by the stricter New York City standard that requires toy guns to be entirely brightly colored (as opposed to the state standard that requires only markings along the sides and the tip of the barrel).

 Employment

Attorneys General Oppose New Legal Standard for Joint-Employer Status in Letter to NLRB

  • Six AGs, led by Wisconsin AG Brad Schimel and Michigan AG Bill Schuette, sent a letter to the National Labor Relations Board (“NLRB”) urging the NLRB not to overturn the existing standard that determines joint-employer status under federal labor and employment law.
  • In the letter, the AGs argue that the change to a standard that has been in place for more than 30 years would significantly disrupt many successful business models, including contractor/subcontractor and franchisor/franchisee relationships, by creating a vague and unworkable test to establish joint-employer liability.
  • The NLRB and courts use the joint-employer test to determine whether a company without a direct contractual relationship with a particular employee is still considered to be a joint-employer with the employee’s contractual employer.  The current test, which requires the company to share direct and immediate control over the terms and conditions of employment with the contractual employer, is to be the subject of a forthcoming interpretation by the NLRB’s general counsel that potentially could expand the scope of liability.

Energy

New Jersey Attorney General Settles with Third-Party Energy Supplier for Alleged Deceptive Marketing and Sales

  • New Jersey Acting AG John Hoffman, the New Jersey Board of Public Utilities (BPU), and the New Jersey Division of Consumer Affairs reached a settlement with Keil & Sons, Inc., d/b/a Systrum Energy (“Systrum”), a third-party energy supplier, for allegedly violating state consumer protection laws by promising consumers low rates and monthly savings on energy bills when the company actually charged rates far above those consumers would have paid through their previous energy suppliers.
  • As part of the settlement, the supplier will pay $554,698.06, including over $436,000 in restitution and $50,000 in penalties.  This is the second settlement AG Hoffman has reached with a third-party energy supplier over allegations of deceptive advertising and sales.
  • AGs in New York and Connecticut have also taken action in recent months over similar allegations that third-party energy suppliers, operating in their respective states, misled consumers about rates and savings.

Pharmaceuticals

Oregon Attorney General Settles with Pharmaceutical Company for Off-Label Marketing

  • Oregon AG Ellen Rosenblum reached a settlement with Insys Therapeutics Inc. to resolve allegations that an opioid drug manufactured by the company and approved by the Food and Drug Administration to treat cancer pain was improperly marketed in violation of state law.
  • According to the AG’s office, the opioid drug was allegedly marketed for off-label uses such as neck and back pain, and the company allegedly provided improper financial incentives to doctors to increase use of the drug, used aggressive promotion tactics, and promoted the drug for the treatment of mild pain.
  • Under the Assurance of Voluntary Compliance, the company will pay $1.1 million, $533,000 to the state of Oregon and $567,000 to a non-profit or governmental organization to help prevent opioid abuse and misuse in the state.

 State v. Federal

16 Attorneys General Urge EPA to Delay Implementation of Federal Rule to Limit Power Plant Emissions

  • 16 AGs, led by West Virginia AG Patrick Morrisey, filed an application to delay the implementation of the U.S. Environmental Protection Agency’s (“EPA”) new rule under the Clean Air Act limiting carbon dioxide emissions from new and existing fossil fuel-fired power plants.
  • In the application, the AGs argue that the courts are likely to conclude that the EPA rule is unlawful, and therefore states and their citizens should not have to “expend enormous public resources” and endure higher energy bills until judicial review is complete.
  • Last week, ten Democratic Attorneys General and the Corporation Counsel of the City of New York sent a letter to EPA in support of the rule.

17 States Challenge the EPA’s Rejection of State Plans for the Management of Power Plant Emissions

  • 16 Attorneys General and the North Carolina Department of Environment and Natural Resources, led by Florida AG Pam Bondi, filed a petition for review in the United States Court of Appeals for the District of Columbia asking the court to review the EPA’s final rule requiring 35 states to revise their State Implementation Plans governing carbon emissions for certain power plants.
  • According to the states, the Clean Air Act provides the EPA with the power to designate air pollutants and set national air quality standards but reserves authority in the states to determine how to achieve those standards.
  • The states argue, in part, that the EPA has overstepped its authority under the Clean Air Act by invalidating the individual air quality protection plans put in place by certain states.

13 States Seek Preliminary Injunction to Stop Implementation of the EPA’s “Waters of the United States” Rule

  • 13 states, led by North Dakota AG Wayne Stenehjem, have filed a request for a preliminary injunction to delay implementation of a new EPA rule that clarifies federal jurisdiction under the Clean Water Act, while the rule is pending legal challenge.
  • This request comes after 31 states sent a letter to the EPA and the Army Corp of Engineers on July 28 requesting to extend the effective date of the EPA rule to allow for judicial review, which they have not yet received a response.
  • As we previously reported, a majority of states have now filed lawsuits against the EPA challenging the “waters of the United States” rule, which they argue places a large amount of intrastate waters under the supervision of the federal government and, inter alia, violates states’ sovereignty rights and exceeds the federal government’s authority.
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