The State AG Report Weekly Update November 7, 2019

Cozen in The News

Cozen O’Connor’s State Attorneys General Practice Co-Chairs Quoted in Article on Resources Spent on Big Tech Antitrust Probes by State Attorneys General

  • Bernie Nash and Lori Kalani, Co-Chairs of Cozen O’Connor’s State Attorneys General Practice, are quoted in a Bloomberg Law article discussing the strain that antitrust probes of Alphabet, Inc.’s Google and Facebook, Inc. may place on the budgets of State AGs already handling resource-intensive investigations and suits relating to opioids and drug-price fixing.
  • Nash weighed in on the flexibility that states have with respect to the use of their resources and said “[o]bviously, no AG’s resources are limitless, but an AG’s office can shift their own internal priorities to re-direct resources.” Kalani discussed the advantages that multistate litigation offers, stating that it allows dozens of Attorneys General to “leverage resources, expenses, and time by splitting up the work” while offering companies a chance to reach finality through a settlement with all 50 states.

2019 AG Elections

Two open seat AG elections in Kentucky and Mississippi were decided on November 5, 2019.   Republicans picked up both seats. Once the incoming AGs take office, the AG political map will be comprised of 26 Republicans and 25 Democrats. In addition, two incumbent AGs sought higher office, with one claiming victory in a still-contested election. For more AG election news, insights, and polls, visit Cozen’s State AG Election Tracker.

Attorney General Races

  • Daniel Cameron (R) won the Kentucky AG open seat race over former AG Greg Stumbo (D) by a margin of 57.8% to 42.2% with 100% of precincts reporting.
  • State Treasurer Lynn Finch (R) won the Mississippi AG open seat race over Jennifer Riley Collins (D) by a margin of 58.1% to 41.9% with 100% of precincts reporting.

Gubernatorial Races

  • Kentucky AG Andy Beshear (D) appears to have won the governor’s race over incumbent Governor Matt Bevin (R) and John Hicks (L) by a margin of 49.2% to 48.8% to 2% with 100% of precincts reporting. Governor Bevin has not conceded and has requested recanvassing.
  • Mississippi Lt. Governor Tate Reeves (R) won the governor’s race over AG Jim Hood (D) and other third-party candidates by a margin of 52.2% to 46.6% to 1.3% with 100% of precincts reporting.

Consumer Protection

Missouri Attorney General Sues Telemarketer for Allegedly Calling No-Call List Registrants

  • Missouri AG Eric Schmitt filed suit against a telemarketing company Allied Health Supply LLC and its president (collectively “Allied”) for allegedly calling Missouri residents who were on the state’s No-Call list in violation of Missouri’s No-Call Law.
  • According to the AG’s office, Allied allegedly placed over 400,000 calls to Missouri residents on the No-Call list, including 90 calls to one number over a 14-day period in order to sell orthopedic braces for pain relief, and misleadingly implied that Allied was affiliated with Medicare and the equipment was a new Medicare benefit.
  • According to the AG’s office, the complaint seeks injunctive relief, damages, and attorneys’ fees and costs.

FTC Sues Multi-Level Marketer for Allegedly Operating as an Illegal Pyramid Scheme and Falsely Marketing Supplements

  • The Federal Trade Commission (“FTC”) filed suit against supplement and skincare multi-level marketing company Neora, LLC and its CEO (collectively, “Neora”) and related companies Signum Biosciences, Inc. and Signum Nutralogix (collectively, “Signum”) alleging that Neora violated the FTC Act by operating as an illegal pyramid scheme and all parties violated the same law by falsely marketing brain health supplements.
  • According to the complaint, Neora allegedly primarily paid its distributors for recruiting new distributors rather than for selling its products, misrepresented the income that distributors were likely to achieve, and marketed the Signum-supplied supplement Neurium EHT with unsubstantiated health claims.
  • The complaint seeks injunctive relief, rescission or reformation of contracts, restitution, refunds, and disgorgement, among other things, from Neora.
  • The FTC already has reached a settlement with Signum under which it is barred from making baseless claims about Neurium EHT or other supplements.

Health Care

Massachusetts Attorney General Settles Allegations of Improper Billing by Adult Day Health Company

  • Massachusetts AG Maura Healey reached a settlement with adult day health company Quality Life Adult Day Services (“Quality”) to resolve allegations that it improperly billed Massachusetts’s Medicaid Program (“MassHealth”) for full-day services for members who did not attend the facility for the entire day.
  • According to the AG’s office, Quality allegedly billed MassHealth using full-day billing codes instead of hourly billing codes, as it was required to do for members that attended its facility for less than six hours a day.
  • According to the AG’s office, Quality will pay $274,809 to MassHealth and will implement a multi-year compliance program that will require annual training for its employees, auditing, monitoring, and reporting to the AG’s office.

Pharmaceuticals

Virginia Attorney General Sues Teva Over Allegedly Illegal Marketing of Prescription Opioids

  • Virginia AG Mark Herring filed suit against Teva Pharmaceuticals USA, Inc. and its subsidiary Cephalon, Inc. (collectively, “Teva”) for allegedly illegally marketing its prescription opioid products in violation of the Virginia Consumer Protection Act.
  • According to the complaint, Teva allegedly engaged in decades-long marketing efforts to deceive patients and healthcare providers about the risks associated with its rapid acting fentanyl drugs Actiq and Fentora, and allegedly misrepresented clinical trial data to overstate the benefits of the drugs while downplaying their dangers.
  • The complaint seeks injunctive relief, restitution, civil penalties, costs, expenses, attorneys’ fees, and any further relief the court deems equitable and proper.

State vs. Federal

Sixteen Attorneys General Petition for Review of the Department of Energy’s Rollback of Energy Efficiency Standards for Lightbulbs

  • 16 AGs and the City of New York, led by California AG Xavier Becerra and New York AG Letitia James, petitioned the U.S. Court of Appeals for the Second Circuit for a review of a Department of Energy final rule rolling back the efficiency standards for certain lightbulbs, arguing that the rollback would unlawfully delay the adoption of energy efficiency goals.
  • The petition asks the court to review the final rule, titled “Energy Conservation Program: Definition for General Service Lamps,” which the AGs argue affect approximately 3 billion – or nearly half – of all light fixtures and lamps in the U.S., and that, among other things, the efficiency standards are critically important for energy savings for consumers and for reducing greenhouse gas emissions and pollution.
  • The same coalition of AGs had previously submitted comments opposing the rollback.
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