The State AG Report Weekly Update November 15, 2018

Breaking News

Missouri Governor Announces Appointment of State Treasurer Eric Schmitt as Attorney General

  • Missouri State Treasurer Eric Schmitt, a Republican, has been appointed to serve as AG by Governor Mike Parson. He will be sworn in as AG in January 2019.
  • As previously reported, former AG Josh Hawley was elected to the U.S. Senate earlier this month.
  • Once sworn in, Schmitt will serve the remainder of AG Hawley’s term, which expires in January 2020.

Consumer Protection

Massachusetts Attorney General Reaches Settlement with Cable Provider Over Allegedly Deceptive Advertising

  • Massachusetts AG Maura Healey reached a settlement with cable provider Comcast Corporation (“Comcast”) to resolve allegations that the company used deceptive advertisements to promote long-term cable contracts in violation of state consumer protection laws.
  • According to the AG’s office, Comcast allegedly failed to adequately disclose the monthly price, fees, and terms of its long-term cable contracts, including terms allowing Comcast to increase the price of certain monthly fees during the duration of the contracts, and required consumers to pay early termination fees when such contracts were cancelled.
  • According to the AG’s office, under the terms of the assurance of discontinuance, Comcast will forgive all outstanding unpaid early termination and late fees; pay $700,000 in refunds to consumers; disclose additional fees in advertisements; and train sales representatives to disclose actual costs to consumers before they enter long-term contracts.

Data Privacy

FTC Submits Comment to National Telecommunications and Information Administration Advocating for FTC’s Role as Primary Enforcer of Consumer Data Privacy Laws

  • The Federal Trade Commission (“FTC”) submitted a comment to the U.S. Department of Commerce’s National Telecommunications and Information Administration (“NTIA”) regarding NTIA’s Request for Comment on Developing the Administration’s Approach to Consumer Privacy.
  • In the comment, FTC staff argue that the FTC should continue to be the primary enforcer of laws related to information flows in markets because of the FTC’s depth of experience in enforcing consumer protection laws through balancing the competing interests of business needs, consumer expectations, legal obligations, and potential privacy harms.
  • FTC staff also called for federal legislation clarifying the FTC’s authority and rules relating to data security and breach notification and stated their support for federal privacy legislation.

Environment

Illinois Attorney General Files Lawsuit Against Construction Companies Over Alleged Water Pollution

  • Illinois AG Lisa Madigan filed a lawsuit against construction companies Case Foundation Company, Clark Construction Group LLC, Riverside Investment and Development Company, and 110 North Wacker Titleholder LLC (collectively, “construction companies”) for allegedly discharging contaminated water in violation of state environmental laws.
  • According to the AG’s office, the construction companies allegedly pumped more than 6,000 gallons of contaminated groundwater containing slurry and sediment from a construction site into the Chicago River.
  • According to the AG’s office, the lawsuit seeks injunctive relief and civil penalties.

False Claims Act

New York Attorney General Reaches Settlement with Offshore Art Purchaser Over Allegedly Failing to Pay Millions in Sales and Use Taxes on Art Purchases

  • New York AG Barbara Underwood reached a settlement with offshore art purchaser Porsal Equities Ltd. (“Porsal Equities”) to resolve allegations that it failed to pay sales and use tax on art purchased in violation of the New York False Claims Act and state fraud laws.
  • According to the AG’s office, Porsal Equities allegedly certified it was exempt from paying sales tax on the basis that it purchased artwork for resale when the artwork was purchased for personal use and failed to pay use tax on artwork purchased outside the state and shipped into the state for display.
  • According to the AG’s office, under the terms of the settlement, Porsal Equities will pay $10.75 million in taxes, penalties, and damages agreed not to claim the resale exemption on purchases of artwork and other goods for personal use, and will report and file use tax returns for any artwork used in the state for which sales tax was not otherwise charged.

Pharmaceuticals

New Jersey Attorney General Files Lawsuit Against Opioid Manufacturer for Allegedly Deceptive Marketing and Misrepresenting Risks of Prescription Opioids

  • New Jersey AG Gurbir Grewal filed a lawsuit against opioid manufacturer Janssen Pharmaceuticals, Inc. (“Janssen”) for allegedly deceiving consumers about the risks of abuse of its prescription opioid products in violation of the state’s Consumer Fraud Act, False Claims Act, and public nuisance common law.
  • According to the complaint, Janssen allegedly marketed its opioid products to doctors and the elderly by deceptively overstating benefits of use and understating risks of addiction of its products, leading doctors to overprescribe its opioid products and causing false or fraudulent claims to be submitted to the state’s employee health plans, Medicaid, and Workers’ Compensation programs.
  • The complaint seeks injunctive relief, disgorgement, civil penalties, damages, attorneys’ fees and costs, and nuisance abatement costs, among other things.

State AGs in the News

Texas Attorney General Is New Chairman of Republican Attorneys General Association

  • Texas AG Ken Paxton and Indiana AG Curtis Hill have been elected to serve as Chairman and Vice-Chairman, respectively, of the Republican Attorneys General Association (“RAGA”).
  • As previously reported, AG Paxton has served as the Vice-Chairman of RAGA since November 2017, and succeeds Arkansas AG Leslie Rutledge, who just completed her term as Chairman.
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