The State AG Report

Editors Lori Kalani and Jerry W. Kilgore

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The State AG Report Weekly Update March 9, 2017

Breaking News

New Hampshire Attorney General Resigns

  • New Hampshire AG Joseph Foster will resign effective March 31 after serving nearly four years as AG. His resignation coincides with the final day of his four-year term.
  • AG Foster was appointed by former Democratic Governor Maggie Hassan in 2013. It has been expected that Hassan’s successor, Republican Chris Sununu, will appoint a Republican AG at the end of AG Foster’s term.
  • According to reports, Governor Sununu is expected to name his replacement shortly.

Consumer Protection

New York Attorney General Seeks Criminal Charges Against Tech Firm and Former CEO for Allegedly Scamming Investors

  • New York AG Eric Schneiderman filed criminal charges against technology firm Freevi Crop., d/b/a Sungame Corp, and its former Chief Executive Officer Neil Chandran (collectively “Sungame”) over an alleged scheme to accrue hundreds of thousands of dollars from investors under false pretenses, constituting grand larceny, forgery, and securities fraud in violation of state law.
  • According to the AG’s office, Sungame’s alleged scheme promised investors that after buying the company’s 3D tablets at $1,000 per unit, the investor would regain the full price of the tablet in the form of a rebate, would receive “education grants” worth 50% of the investment price, and would be entitled to either keep the tablet or receive the profit through a buyback promotion.
  • The AG’s office alleges that investment capital and profits were never returned and instead used to inflate publicly-reported corporate earnings, fund additional tablet manufacturing, and pay personal and corporate liabilities, among other things.

New York Attorney General Settles with Online Retailers for Alleged Violations of Imitation Weapon Laws

  • New York AG Eric Schneiderman reached settlement agreements with seven online retailers over allegations they violated state laws by selling life-like imitation guns to state consumers.
  • According to the AG’s office, these retailers allegedly sold over 2,000 life-like toy guns to consumers in New York through a retail marketplace platform for third-party sellers in violation of state and city laws that prohibit the sale of imitation weapons.
  • The settlements require the retailers to pay over $44,000 in penalties to the state and to abide by the 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).
  • This settlement is the latest in a series of actions by the AG’s office against online retailers, beginning last year, over the sale of imitation guns.

Ohio Attorney General Reaches Settlement with Local Organization For Alleged Improper Charitable Programs

  • Ohio AG Mike DeWine reached a settlement with Teens With Dreams, an organization that collected money through door-to-door solicitations, and its founder (collectively “Teens with Dreams”) regarding allegations that it violated state charitable giving laws by improperly soliciting donations.
  • According to the AG’s office, Teens with Dreams allegedly recruited 11 to 16 year old children to go door to door asking for donations and disbursed a portion of these donations to its founder and the children, but did so without proper record keeping or 501(c)(3) non-profit status with the Internal Revenue Service.
  • Under the terms of the settlement, Teens With Dreams will be dissolved and its founder is permanently barred from reestablishing an Ohio nonprofit organization.

Employment

Illinois Attorney General Warns National Job Search Companies About Potential Age Discrimination Practices

  • Illinois AG Lisa Madigan issued letters to six national job search companies—Beyond.com, CareerBuilder, Indeed Inc., Ladders Inc., Monster Worldwide Inc., and Vault—requesting additional information about the companies’ practices and warning that their online job applications may violate federal and state laws that prohibit age discrimination
  • According to the AG’s office, the companies’ online applications may discriminate against these job seekers because they use drop-down menus that prevent people of certain age groups from submitting accurate dates of previous experience and education, which prevent older users from accurately completing resume and profile information.

Environment

Texas Attorney General Leads Coalition Against Obama Administration-Era EPA Requests for Oil and Gas Information

  • 17 AGs and 2 governors, led by Texas AG Ken Paxton, sent a letter to the U.S. Environmental Protection Agency (“EPA”) calling for the reevaluation of federal regulatory actions initiated by the Obama Administration.
  • In their letter, the AGs and Governors request that EPA Administrator Scott Pruitt reconsider the role the federal government plays in enforcing the Clean Air and Clean Water Acts and respect the “clear terms of cooperative federal-state enactments.”
  • This follows a similar letter, signed by 9 AGs and 2 governors and also led by AG Paxton, calling for the immediate suspension and withdrawal of the EPA’s Information Collection Request for Existing Oil and Gas Facilities.

State AGs in the News

Alabama Attorney General Appoints New Chief Deputy Attorney General

  • Alabama AG Steve Marshall named Clay Crenshaw as Chief Deputy AG.
  • Prior to being appointed Chief Deputy AG, Crenshaw served as Assistant Attorney General, where he led the Appeals Division overseeing death penalty and criminal appeals. Before working in the Alabama AG’s office, Crenshaw served as an Assistant AG with the Alabama Department of Finance, an Assistant AG in the Capital Litigation Division, Division Chief of the Capital Litigation Division, and Chief of the Appeals Division.
  • As previously reported, AG Marshall was appointed by Governor Bentley to replace departing AG Luther Strange following his appointment to the U.S. Senate.

Federal Court Dismisses Civil Securities Case Against Texas Attorney General

  • The U.S. District Court for the Eastern District of Texas dismissed with prejudice a civil case brought against Texas AG Ken Paxton by the U.S. Securities and Exchange Commission (“SEC”) alleging that AG Paxton assisted in defrauding investors of a friend’s technology start-up by failing to disclose that he received payments from the company while soliciting investors.
  • As previously reported, the court tentatively dismissed the case last year, allowing the SEC to amend their charges with additional facts against AG Paxton to show that AG Paxton was legally required to disclose that he received money from the company to recruit additional investors.
  • The dismissal of the SEC lawsuit does not directly impact AG Paxton’s pending state criminal trials, which are scheduled to begin in May.

State v. Federal

15 Attorneys General Pen Letter to House Chairman to Withdraw Subpoenas Regarding Investigations of ExxonMobil

  • 15 AGs, led by Maryland AG Brian Frosh, sent a letter to the U.S. House Committee on Science, Space and Technology Chairman, Lamar Smith, urging for the withdrawal of the Chairman’s subpoenas sent to Massachusetts AG Maura Healey and New York AG Eric Schneiderman regarding their ongoing investigations of ExxonMobil Corporation (“Exxon”).
  • In their letter, the AGs voiced their concerns regarding subpoenas sent to AG Healey and Schneiderman, originally issued on July 13, 2016 and then reissued on February 16, 2017 that requested all materials accrued by the AGs during the course of their Exxon investigations into allegedly false statements Exxon made to consumers and investors about product impact on the environment and associated business risks.