The State AG Report Weekly Update August 29, 2019

2019 AG Elections

Lynn Fitch Secures Republican Nomination for Mississippi Attorney General in Runoff Election

  • Mississippi held a runoff election for the Republican AG primary race on August 27, 2019.
  • State Treasurer Lynn Fitch won the nomination by defeating Andy Taggart, the former Executive Director of the Mississippi Republican Party.
  • Fitch will face Democratic nominee Jennifer Riley Collins in the general election.
  • As previously reported, Fitch and Taggart were the top two vote-getters in the Republican primary, which proceeded to a runoff election when neither candidate received a majority of the vote required to secure the nomination.

Consumer Protection

51 Attorneys General Submit Comments to FCC Supporting Proposed Enhanced Caller ID Rules, Partner with 12 Telecommunications Companies to Issue Anti-Robocall Principles

  • 51 AGs, led by North Carolina AG Josh Stein, New Hampshire AG Gordon MacDonald, and Indiana AG Curtis Hill, partnered with 12 telecommunications companies who agreed to adopt eight principles to address illegal robocalls.
  • Pursuant to the Anti-Robocall Principles, the signatory companies will: (1) offer free call blocking and labeling, (2) implement technology to authenticate calls, (3) analyze and monitor network traffic, (4) investigate suspicious calls and calling patterns, (5) confirm the identity of commercial customers, (6) require traceback cooperation in contracts, (7) cooperate with law enforcement in traceback investigations, and (8) communicate with state AGs.
  • The same 51 AGs also submitted reply comments to the Federal Communications Commission (“FCC”) urging the FCC to require voice service providers to implement a caller ID authentication framework if they fail to implement the framework voluntarily by the end of 2019 and to provide free, default call-blocking programs to customers.
  • As previously reported, a bipartisan coalition of 42 AGs submitted comments to the FCC in May 2019 urging it to adopt a proposed rule that would expand the scope of its Truth in Caller ID Act rules, and a bipartisan coalition of 34 AGs submitted comments to the FCC in October 2018 urging it to adopt rules that would expand telephone service providers’ ability to block certain types of illegal robocalls.

New York Attorney General Settles with Retail Chains Over Alleged Sale of Expired Products and Violation of Bottle Deposit Law

  • New York AG Letitia James reached settlements with retail chains Dollar General, Dollar Tree, and Dollar Tree’s subsidiary Family Dollar, over allegations that the stores sold expired products in violation of state law regulating sale of over-the-counter drugs and that Dollar Tree and Family Dollar violated the New York bottle deposit law.
  • According to the AG’s office, the retail chains allegedly sold over-the-counter drugs beyond the expiration date marked on the product’s label, Dollar General allegedly branded and sold certain obsolete motor oils without disclosing the product’s unsuitability for modern engines, and certain Dollar Tree and Family Dollar stores would not accept deposit bottles for return or required proof of purchase for return in violation of the state bottle deposit law, among other things.
  • According to the AG’s office, under the terms of the settlements, the retail chains must reform their business practices related to stocking over-the-counter drugs, Dollar General must pay $1.1 million in restitution, damages, penalties, and costs, and Dollar Tree and Family Dollar must comply with the bottle deposit law and pay $100,000 in penalties and costs, among other things.

New York Passes Law Extending Statute of Limitations for Anti-Fraud and Consumer Protection Laws

  • New York has enacted a law, proposed as a program bill by the office of New York AG Letitia James, that will add a codified statute of limitations to the Martin Act—New York’s sweeping securities fraud law—and the state consumer protection law.
  • The bill, A.8318/S.6536, institutes a six year statute of limitations. This change follows a 2018 decision from the New York Court of Appeals that interpreted the law to have a three-year statute of limitations.

E-Cigarettes

North Carolina Attorney General Sues Eight E-Cigarette Companies Over Allegedly Advertising to Minors and Misrepresenting Product Risks

  • North Carolina AG Josh Stein filed lawsuits against e-cigarette companies Eonsmoke LLC, Juice Man LLC, The Electronic Tobacconist LLC, Tinted Brew Liquid Co., LLC, VapeCo Distribution LLC, Beard Vape Co., Direct eLiquid LLC, and Electric Lotus LLC over allegations they marketed and sold e-cigarette products designed to appeal to youth in violation of the state Unfair or Deceptive Trade Practices Act.
  • According to the complaints, the companies allegedly aggressively targeted minors through marketing and product design—particularly with flavors like cotton candy, unicorn, and gummy bear—and did not require age verification for sales.
  • The complaints seek permanent injunctions against the companies from selling e-cigarette products in the state, civil penalties, disgorgement, and costs and fees, among other things.
  • As previously reported, AG Stein filed a lawsuit against e-cigarette manufacturer JUUL Labs, Inc. over similar allegations in May 2019.

Gaming/Gambling

New Jersey Attorney General Settles with Online Fantasy Sports Website Operator Over Allegedly Operating Without a Permit Under New Law

  • New Jersey AG Gurbir Grewal reached a settlement with SportsHub Games Network, Inc. (“SportsHub”) over allegations that it operated an online fantasy sports site without a permit in violation of the state Fantasy Sports Act (“FSA”) and failed to clearly disclose data privacy practices in violation of the state Consumer Fraud Act.
  • According to the AG’s office, SportsHub allegedly operated sites including “Fanball,” “CDM Sports,” “National Fantasy Football Championships,” “Whatif Sports,” and “Leaguesafe” in the state without obtaining the required permit from the Division of Consumer Affairs, and failed to clearly and conspicuously disclose its personal data collection and sharing policies with consumers, among other things.
  • According to the AG’s office, under the terms of the settlement, SportsHub will pay $30,000 in civil penalties and revise its business practices to comply with consumer protection laws.
  • According to the AG’s office, this is the first enforcement action taken under the FSA, which was enacted in August 2017.

Labor & Employment

Washington Attorney General Settles Lawsuit Against Franchisor Over “No-Poach” Provisions

  • Washington AG Bob Ferguson reached a settlement with restaurant franchisor Jersey Mike’s Franchise Systems, Inc. and several affiliated entities (collectively, “Jersey Mike’s”) over their alleged use of “no-poach” provisions—franchise agreement terms that prevent franchisees within the same chain from hiring away each other’s employees—in violation of the antitrust provisions of the state’s Consumer Protection Act (“CPA”).
  • According to the AG’s complaint, Jersey Mike’s allegedly previously agreed to remove no-poach provisions from its standard franchise agreements and not to include such provisions in future franchise agreements, but refused to remove no-poach clauses from existing franchise agreements nationwide, creating a risk that Jersey Mike’s may continue to enforce these provisions.
  • Under the terms of the Assurance of Discontinuance, Jersey Mike’s will cease enforcing or including no-poach provisions in its agreements and will pay $150,000 to the state, among other things.
  • As previously reported, AG Ferguson filed this lawsuit against Jersey Mike’s in October 2018. AG Ferguson has also reached settlements and agreements with a number of other franchisors over the last two years regarding the use of no-poach provisions.

Pharmaceuticals

 Oklahoma Attorney General Obtains Favorable Judgment in Opioid Trial

  • Oklahoma AG Mike Hunter obtained a favorable judgment against opioid manufacturer Johnson & Johnson and its subsidiaries (collectively, “J&J”) over allegations that J&J created a public nuisance by contributing to the ongoing opioid epidemic in Oklahoma.
  • According to the complaint, J&J allegedly used deceptive promotional campaigns to convince healthcare providers to prescribe opioids and minimized the risks and overstated the benefits of long-term use of prescription opioids to treat chronic pain, thereby causing injury to and endangering the health and safety of state residents, among other things.
  • Under the terms of the judgment, which came following a seven-week civil trial, J&J must pay $572 million to abate the ongoing opioid epidemic in the state.
  • As previously reported, AG Hunter reached settlements with other pharmaceutical manufacturer defendants in the same lawsuit in May 2019 and March 2019.
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