False Claims Act
New York AG Takes Up Whistleblower’s Allegation that All May Not Be Picture-Perfect with B&H Foto & Electronics
- New York AG Letitia James sued photo and video equipment retailer B&H Foto & Electronics Corp. (“B&H”) for allegedly knowingly failing to pay sales taxes in violation of New York’s Tax Law, False Claims Act, and Executive Law.
- The complaint alleges that, for 13 years, B&H deliberately avoided paying sales taxes on tens of millions of dollars of point-of-sale discounts, known as “instant rebates,” for which B&H received reimbursements from manufacturers. The investigation leading to the complaint arose from a sealed whistleblower qui tam lawsuit.
- The complaint seeks treble damages, penalties and interest, as well as injunctive and declaratory relief, and attorneys’ fees and costs.
How to Stop Kids from Vaping? California and New York Sue E-Cigarette Manufacturer for Allegedly Enticing Minors Through Deceptive Advertising
- California AG Xavier Becerra and New York AG Letitia James each sued e-cigarette maker JUUL Labs Inc. (“JUUL”) for allegedly deceptive marketing practices targeting minors. The California complaint alleges that JUUL’s actions violated the Stop Tobacco Access to Kids Enforcement Act, among other things, while the New York complaint alleges that JUUL’s actions violated New York’s General Business Law and Executive Law and constitute a common law public nuisance.
- The California complaint alleges that, among other things, JUUL’s advertising targeted minors, and that JUUL failed to warn about its products’ chemical exposure and health risks, failed to verify consumers’ age, and violated the privacy rights of minors by keeping personal email addresses of individuals who failed the age verification on JUUL’s website. The New York complaint similarly alleges that JUUL’s advertising targeted minors and that JULL failed to warn consumers about the health risks associated with its products.
- Both suits seek monetary damages, restitution, penalties, costs, and injunctive relief. The New York suit also seeks disgorgement of profits.
Who’s Getting the Tips? D.C. Attorney General Alleges Food Delivery Service Kept Tips to Help Its Bottom Line
- District of Columbia AG Karl Racine sued food delivery service DoorDash, Inc. (“DoorDash”) for allegedly keeping tips instead of passing them to their workers in violation of the District’s Consumer Protection Procedures Act.
- The complaint alleges that DoorDash encouraged consumers to add tips to their payments for food delivery and that consumers reasonably believed that these tips would be passed to workers. Instead, tips were used to offset workers’ wages, thereby reducing DoorDash’s labor costs.
- The suit seeks monetary damages and civil penalties, disgorgement of profits, attorney’s fees and costs, and injunctive relief.
Massachusetts Attorney General to Used Car Dealerships: Play Fair or It’ll Cost You
- Massachusetts AG Maura Healy has reached a settlement with a used car dealership AutoMax Inc., as well as associated companies and their owner (collectively “AutoMax”), resolving allegations that it misrepresented important information about the used cars it sold and the add-on service contracts it promoted, in violation of the Massachusetts Consumer Protection Act.
- According to the complaint, AutoMax allegedly engaged in multiple deceptive acts, including failing to provide mandatory disclosures about cars that were previously used for lease, rental, or taxicab services, misrepresenting cars manufactured for the Canadian market as being covered by a manufacturer’s warranty, selling invalid add-on service contracts, and falsifying down payments on financing applications, among other things.
- According to the AG’s office, under the consent judgment, AutoMax agreed to injunctive terms, including complying with prior use disclosure regulations, disclosing foreign origins of cars, and ensuring the accuracy of consumer loan applications. In addition, AutoMax will pay $750,000 in restitution to affected consumers and a $175,000 suspended penalty for any violation of the settlement’s injunctive terms within three years.
2020 AG Elections
New Leadership Team at the Republican Attorneys General Association
- The Republican Attorneys General Association (“RAGA”) announced the election of the leadership team for its Executive Committee for 2020, which will be led by Chairman Louisiana AG Jeff Landry and Vice-Chairman Georgia AG Chris Carr.
- The Executive Committee’s new leadership team will focus on RAGA’s efforts in the ten states that will hold AG races in 2020, in an attempt to expand the Republican majority of state AGs.
- AG Landry is taking the Chairman role from Texas AG Ken Paxton, who led RAGA in 2019.
Consumer Financial Protection Bureau
CFPB Clarifies the Screening and Training Requirements for Mortgage Loan Originators
- The Consumer Financial Protection Bureau (“CFPB”) issued an interpretive rule clarifying the screening and training requirements for financial institutions employing loan originators with temporary authority under the Economic Growth, Regulatory Relief, and Consumer Protection Act.
- The rule, which comes into effect on November 24, 2019, affects loan originators who are allowed to work as loan originators for a limited time in a particular state while that state reviews their applications for a loan originator license.
- Even though all licensed loan originators must satisfy certain screening and training requirements under the Secure and Fair Enforcement for Mortgage Licensing Act of 2008, the new rule clarifies that employers are not responsible for such screening and training because the licensing state will perform those functions as part of its review of the individual’s application for the loan originator license.