The State AG Report

Editors Lori Kalani and Jerry W. Kilgore

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Election News

Election News

The State AG Report Weekly Update August 24, 2017

AG Elections

Republican Whitney Westerfield Announces Bid for Kentucky Attorney General

Consumer Protection

Georgia Attorney General Files Lawsuit Against Motor Vehicle Retailer to Resolve Allegations of Misleading Marketing

  • Georgia AG Chris Carr filed a lawsuit against motor vehicle retailer the Momentum Group, Inc. d/b/a Gwinnett Mitsubishi and Gwinnett Suzuki (collectively “Gwinnett”) for allegedly violating the state’s Fair Business Practices Act by engaging in deceptive advertising and sales practices.
  • According to the complaint, Gwinnett allegedly misrepresented to consumers that it would transfer vehicle titles in consumers’ names, failed to pay off liens on consumers’ trade-in vehicles, sold vehicles without required emissions certificates, and ignored consumers’ attempts to resolve disputes.
  • The lawsuit seeks restitution for affected consumers, civil penalties up to $5,000 per violation, court costs, attorneys’ fees, and a permanent injunction restraining Gwinnett from future violations.

Minnesota Attorney General Files Lawsuit Against Pension Advance Company Over Allegations of Excessive Interest Fees

  • Minnesota AG Lori Swanson filed a lawsuit against pension advance companies Future Income Payments, LLC of Delaware and Future Income Payments, LLC of Nevada (collectively “FIP”) for allegedly violating state lending laws by offering loans to seniors and veterans at illegal interest rates and without proper licenses.
  • According to the complaint, FIP allegedly convinced veterans and seniors to sign over portions of their monthly pensions and benefits at excessive interest rates in exchange for immediate advance cash payments. FIP also allegedly failed to obtain required lending licenses and sought to evade state licensing requirements by falsely characterizing the pension advances as “purchase agreements” instead of loans.
  • The lawsuit seeks to declare loans issued by FIP to Minnesota residents as void, grant monetary relief to injured consumers, award civil penalties, pay for court costs and attorneys’ fees, and enjoin FIP from further violations of state lending laws.

New York Attorney General Reaches Settlement with Mall Operator Relating to Lease Radius Restrictions

  • New York AG Eric Schneiderman reached a settlement with mall operator Simon Property Group (“Simon”) to resolve allegations that Simon’s imposition of a radius restriction in its leases was likely to maintain and enhance its monopoly power and unreasonably restrain competition in the market in violation of state and federal antitrust law.
  • According to the settlement, Simon allegedly required business leases to have a radius provision that prevented its tenants from adding new locations within a 60-mile radius of its Woodbury Common outlet mall.
  • Under the terms of the settlement, Simon will, among other things, remove the radius restriction provisions from its leases, refrain from penalizing or otherwise retaliating against retailers opening another store in the relevant area, and make a $945,000 payment to the state.

Employment

17 AGs File Amicus Brief in the U.S. Supreme Court Opposing Employers’ Use of Arbitration Agreements as Condition of Employment

  • 17 Democratic AGs, led by Maryland AG Brian Frosh, filed an amicus brief in the U.S. Supreme Court asking the court to hold that arbitration agreements that bar individual employees from pursuing work-related claims on a collective or class basis constitute an unfair labor practice under the National Labor Relations Act (“NLRA”).
  • The coalition of AGs requested that the Court decide against the legality of arbitration clauses in three consolidated cases—Epic Systems Corp. v. Lewis, NLRB v. Murphy Oil USA, and Ernst & Young v. Morris—lawsuits that question whether an employer’s use of mandatory arbitration agreements as a condition of employment infringes on its employees’ “fundamental right” to engage in “concerted activities for mutual aid or protection” under the NLRA.

For-Profit Colleges

13 AGs, CFPB Enter Multistate Settlement with Financial Firm Over Alleged Predatory Student Lending Scheme

  • 13 AGs and the Consumer Financial Protection Bureau (“CFPB”) entered into a multistate settlement with financial firm Aequitas Capital (“Aequitas”) resolving allegations that Aequitas engaged in predatory lending in violation of the Dodd-Frank Wall Street Reform and Consumer Protection Act.
  • According to the AG’s office, Aequitas allegedly enabled the now-defunct Corinthian Colleges (“Corinthian”) to make high-cost private loans to students in an effort to create the appearance that Corinthian was receiving sufficient outside revenue to comply with federal student aid regulations.
  • Under the terms of the multistate settlement, Aequitas must forgive student loans in connection with certain closed schools, forgive student loans in default (with regard to specific default time periods), and reduce all other loans by more than half, with the settlement costing Aequitas approximately $192 million. The CFPB announced $183.3 million in relief for 41,000 borrowers, including $2.1 million for Oregon residents according to AG Rosenblum.

Pharmaceuticals

Illinois Attorney General Reaches Settlement with Pharmaceutical Manufacturer Over Allegedly Deceptive Marketing and Sale of Opioids

  • Illinois AG Lisa Madigan reached a settlement with pharmaceutical company Insys Therapeutics Inc. (“Insys”) for allegedly violating the state’s Consumer Fraud Act, Illinois and federal Food, Drug, and Cosmetic Acts, and the federal Anti-Kickback Statute by marketing its opioid products for unapproved uses.
  • According to the AG’s office, Insys allegedly employed deceptive advertising in promoting cancer pain treatment drug Subsys to non-cancer patients and by targeting doctors who already prescribed high quantities of opioids. Insys also allegedly rewarded doctors for prescribing Subsys for off-label uses, such as neck and back pain.
  • Under the terms of the settlement, Insys will pay the state $4.45 million and, among other things, create an Opioid Abuse Detection Program, restrict the sale of Subsys to doctors who mainly treat cancer patients, and prohibit sales representatives from discussing specific patients with prescribers.

State AGs in the News

Utah Attorney General Becomes CWAG Alliance Partnership Chair

  • The Conference on Western Attorneys General (“CWAG”) named Utah AG Sean Reyes as the new Chair of the CWAG Alliance Partnership, an organization that promotes CWAG’s international efforts and facilitates collaboration between delegations of AGs and their counterparts in foreign countries.
  • AG Reyes will serve as Alliance Partnership chair from 2017 to 2018 alongside his two co-chairs, District of Columbia AG Karl Racine and Idaho AG Lawrence Wasden.