The State AG Report Weekly Update September 6, 2018

2018 AG Elections

Massachusetts Democratic and Republican Parties Hold Primary Elections

  • Massachusetts held statewide primary elections on September 4, 2018.
  • Incumbent AG Maura Healey, who was first elected in 2014, won the Democratic primary unopposed, while Republican Jay McMahon, a Cape Cod attorney in private practice, defeated Dan Shores in the Republican primary.
  • AG Healey and McMahon will face off in the general election on November 6, 2018.

Antitrust

Washington Attorney General Reaches Settlement with Electronics Manufacturer Over Price-Fixing Conspiracy Allegations

  • Washington AG Bob Ferguson reached a settlement with electronics manufacturer Samsung SDI Co., Ltd. and several related entities (collectively, “Samsung”) to resolve allegations that they conspired with other electronics manufacturers to fix prices on certain electronic components in violation of state consumer protection and antitrust laws.
  • According to the 2012 complaint, from 1995 to 2007, Samsung and other manufacturers of cathode ray tubes (“CRTs”)—key components of numerous consumer electronics—allegedly exchanged competitively sensitive information regarding CRTs, regularly met to fix CRT prices, and manipulated the supply of CRTs, allegedly causing consumers to pay inflated prices for common CRT products including televisions and computer monitors.
  • Under the terms of the settlement and consent decree, Samsung will pay $29 million in restitution, past and future investigative and enforcement costs, and attorney’s fees.
  • As previously reported, other alleged co-conspirators have reached similar settlements with the AG’s office arising from the same alleged conspiracy.

Bureau of Consumer Financial Protection

Coalition of 14 Democratic Attorneys General Sends Letter to BCFP Acting Director Over Enforcement of Federal Credit Discrimination Law

  • A coalition of 14 Democratic AGs, led by North Carolina AG Josh Stein, sent a letter to the Bureau of Consumer Financial Protection’s (“BCFP”) Acting Director Mick Mulvaney expressing concern over his recent public statements regarding reexamining BCFP’s authority to enforce alleged “disparate impact” violations of the Equal Credit Opportunity Act (“ECOA”), a law that prohibits consumer lenders from discriminating against credit applicants on the basis of race, religion, sex, or membership in other recognized protected classes.
  • The AGs’ letter argues that disparate impact liability—a theory of discrimination under which apparently neutral practices are alleged to have a discriminatory effect—is critical to the enforcement of ECOA and that abandoning enforcement of disparate impact claims would conflict with federal judicial and administrative precedent and the BCFP’s mandate to ensure nondiscriminatory access to credit.
  • The AGs request that the BCFP reaffirm its commitment to enforcing disparate impact claims under ECOA and warn that the AGs may step into the BCFP’s enforcement role if the Bureau ceases to enforce such claims.

Consumer Protection

Arkansas Attorney General Files Suit Against Home Security Company Over Alleged Consumer Protection Violations

  • Arkansas AG Leslie Rutledge sued home security company Alert America LLC (“Alert America”) over allegations it violated the Arkansas Deceptive Trade Practices Act by charging consumers for services it failed to provide.
  • The AG’s office alleges that Alert America sold third-party alarm-monitoring services to state residents pursuant to prepaid service contracts, only to close its business and cease operating without refunding customers or remitting customer payments back to third-party alarm service providers for prepaid services Alert America allegedly failed to provide.
  • According to the AG’s announcement, the complaint seeks civil penalties, restitution on behalf of affected consumers, attorneys’ fees, costs, and injunctive relief.

Florida Attorney General Files Suit Against Auto Rental Company Over Allegedly Misleading Rental Customers Regarding Optional Products and Related Charges

  • Florida AG Pam Bondi sued auto rental company Dollar Thrifty Automotive Group, Inc. (“Dollar Thrifty”) over allegations it violated the Florida Deceptive and Unfair Trade Practices Act by allegedly misleading rental customers regarding its optional toll road payment product and by mislabeling related charges on customers’ bills.
  • According to the complaint, Dollar Thrifty allegedly marketed its PlatePass product—which offers customers the option of paying a daily flat rate for all cashless tolls incurred during a rental period—by misleading customers regarding the prevalence of cashless toll roads, the ability to access certain roads without purchasing PlatePass, and the likely cost of tolls that would be incurred without using PlatePass. The complaint further alleges that customers who drove through cashless tolls without PlatePass were charged administrative fees that were allegedly excessive and poorly disclosed and that Dollar Thrifty inaccurately suggested that such charges were for government-imposed fines, tickets, or penalties.
  • The complaint seeks restitution on behalf of affected consumers and injunctive relief to prohibit further alleged violations, as well as attorney’s fees and costs.

Florida Attorney General Files Suit Against Debt Relief Company Over Allegedly Deceptive Marketing of Mortgage and Foreclosure Relief Services

  • Florida AG Pam Bondi sued debt relief company American Investigative Services LLC and its owner and manager (collectively, “AIS”) over allegations they violated the Florida Deceptive and Unfair Trade Practices Act by allegedly misleading consumers into purchasing mortgage and foreclosure relief services that AIS then failed to provide.
  • According to the complaint, AIS allegedly mailed marketing solicitations to consumers claiming that it could detect legal deficiencies in the consumers’ mortgage documents and help consumers secure unencumbered title to their homes. The complaint further alleges that when consumers seeking mortgage and foreclosure relief contacted AIS, AIS illegally solicited upfront payments, misrepresented the likelihood of successful outcomes, failed to provide the goods or services for which consumers paid, failed to make numerous mandatory disclosures, and failed to properly respond to requests for refunds.
  • The complaint seeks restitution on behalf of affected consumers, civil penalties, attorney’s fees, and permanent injunctive relief.

Pharmaceuticals

Vermont Attorney General Files Suit Against Opioid Manufacturers Over Alleged Misrepresentation of Prescription Opioid Risks

  • Vermont AG T.J. Donovan sued opioid manufacturers Purdue Pharma L.P., Purdue Pharma Inc., and Purdue Frederick Company (collectively, “Purdue Pharma”) for allegedly violating the Vermont Consumer Protection Act and state public nuisance law through their marketing and promotion of opioids products.
  • According to the complaint, Purdue Pharma allegedly misrepresented the risks of prescribing opioids to treat chronic pain, overstated the effectiveness of abuse-deterrent formulations for opioid products and screening tools for preventing addiction, and disseminated research intended to encourage physicians to ignore possible risks associated with long-term opioid use, among other things. The complaint also alleges that Purdue Pharma has deceptively marketed its opioid products in violation of a 2007 consent decree reached with the federal government, Vermont, and other states, under which Purdue Pharma allegedly agreed to discontinue allegedly deceptive marketing practices and to offer balanced information regarding the risks and benefit of opioid products.
  • The complaint seeks injunctive relief, disgorgement of funds obtained in connection with alleged violations of law, civil penalties, payment for costs of abatement, and investigative and litigation costs, among other things.
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