2020 AG Elections

A Primer on 2020 State Attorneys General Elections

• Jerry Kilgore, a Member of Cozen O’Connor’s State Attorneys General Practice and former Virginia AG and Secretary of Public Safety, penned an alert analyzing state AG races across the country.
• In the alert, General Kilgore highlights the issues at play in each of the 10 AG races this year and previews the AG races to watch in Indiana, Montana, Pennsylvania, North Carolina, and West Virginia.

 Antitrust

11 Republican Attorneys General, DOJ Sue Google over Allegations of Anticompetitive and Exclusionary Practices

• Eleven Republican AGs and the U.S. Department of Justice (“DOJ”) sued Google LLC over allegations that it used anticompetitive and exclusionary practices to maintain a monopoly in the search and search advertising markets in violation of the Sherman Act.
• The complaint alleges, among other things, that the almost 90 percent of all search queries in the U.S. that Google accounts for, in part is a result of its entering into multiple exclusionary agreements to make Google the default general search engine on billions of computers and mobile devices worldwide, and entered into tying arrangements to preinstall its app in prime locations on mobile devices and make the app undeletable. The complaint further alleges that these tactics harmed competition for advertisers and consumers by creating a monopoly and by reducing the ability of innovative new companies to offer an alternative to Google that would spur competition and better search services.
• The complaint seeks declaratory and injunctive relief, including structural relief to cure anticompetitive harm, and attorneys’ fees and costs.

 False Claims

Massachusetts and Indiana AGs Sue Opioid-Treatment Centers for Alleged Medicaid Fraud

• Massachusetts AG Maura Healey, Indiana AG Curtis Hill, and the U.S. DOJ sued national addiction treatment center chain CleanSlate Centers, Inc. and related companies and a related individual (collectively “CleanSlate”) over allegations that CleanSlate improperly billed the state’s Medicaid program for millions of dollars in unnecessary urine drug tests and used its own laboratory for performing the tests in violation of the Massachusetts False Claims Act and state and federal laws against self-referral.
• The complaint, which arose from a whistleblower case, alleges that CleanSlate, which operated office-based opioid-addiction programs, required its patients to submit a variety of urine drug tests, some of which were duplicative or not medically necessary, and that CleanSlate required its clinicians to send tests to its own laboratory. In addition, the complaint alleges that clinicians illegally backdated prescriptions.
• The complaint seeks treble damages, civil penalties, and attorneys’ fees and costs.

 Financial Industry

Ocwen Settles Allegations that Its Systems Led to Borrower Account Errors

• Florida AG Ashley Moody reached a settlement with mortgage servicer Ocwen Financial Corporation and related companies (collectively “Ocwen”) to resolve allegations that the company mismanaged its recordkeeping relating to borrowers’ accounts in violation of the Florida Deceptive and Unfair Trade Practices Act, and the federal Real Estate Settlement Procedures Act and its implementing regulation, Regulation X.
• The complaint alleged that Ocwen’s recordkeeping was deficient and resulted in significant errors, including illegal foreclosures, mishandled loan modifications, misapplied mortgage payments, missed insurance payments on borrowers’ behalf, overcharging borrowers’ accounts for default fees, and not handling borrowers’ complaints appropriately. The complaint further alleged that Ocwen willfully disregarded the advice of regulators and third-party auditing firms and did not update its technology to address these deficiencies.
• Under the terms of the proposed consent judgment, among other things, Ocwen will pay $5.16 million to the state, including $2.15 million to be used for consumer relief, $2 million in civil penalties—of which $1 million will be suspended upon Ocwan’s compliance with the requirements of the consent judgment—and $2 million in attorneys’ fees. Ocwen will also automatically apply late fee waivers to eligible accounts at the cost of approximately $5.5 million and contact eligible borrowers with an offer of a loan modification program, which is likely to cost an additional $1 million. In addition, Ocwen will institute an enhanced process for the review and resolution of borrower complaints.
• As previously reported, Ocwen reached a settlement with Massachusetts AG Maura Healey in 2019 to resolve allegations that it overcharged consumers in violation of state laws regulating mortgage servicing.

New Jersey Attorney General Takes Aim at Major Student Loan Servicer

• New Jersey AG Gurbir Grewal sued student loan servicer Navient Corporation and related companies and individuals (collectively “Navient”) over allegations of unconscionable practices and deceptive conduct in servicing federal and private student loans in violation of the New Jersey Consumer Fraud Act.
• The complaint alleges that Navient, formerly known as Sallie Mae, Inc., used a variety of deceptive and misleading tactics, including failing to inform borrowers experiencing financial hardship about available loan-forgiveness programs or assist them in choosing the most appropriate repayment option, failing to inform borrowers in income-driven repayment plans of upcoming deadlines to recertify their eligibility for the program, and misleading borrowers about the amount by which their loans were delinquent.
• The complaint seeks declaratory and injunctive relief, restitution, disgorgement, civil penalties, and attorneys’ fees and costs.

 Labor & Employment

Massachusetts Enforces Wage & Hour Laws in Multiple Industries

• Massachusetts AG Maura Healey issued citations against construction companies Machados Construction Services LLC, Real Construction Inc., and WF North Lion Inc., and related individuals, over allegations that they failed to pay the prevailing wage on a public construction project, paying only $15 to $20 per hour instead of the state-mandated prevailing wage rate of $68.72 per hour. The citations total nearly $637,000 in restitution for workers and penalties.
• AG Healey also reached a settlement with temporary employment agency Premier Employee Solutions LLC (“Premier”) over allegations that Premier failed to pay wages in a timely manner, keep proper records, provide temporary employees with required written notices in violation of the Temporary Worker Right to Know Law, and comply with the Earned Sick Time law. Under the terms of the settlement, Premier will pay over $221,000 in restitution and penalties.
• In addition, AG Healey issued multiple citations to asbestos abatement company Fiber Control Inc. and related individuals (collectively “Fiber Control”) over allegations that Fiber Control intentionally failed to pay the prevailing wage and overtime pay, failed to maintain an earned sick time policy, and made repeated payroll records violations, including submitting certified payroll records stating employees on public projects were paid the full prevailing wage, when in fact they were not. The citations, some of which go back to 2018, total over $564,000 in restitution and penalties. In addition, because Fiber Control ignored the citations, it is debarred from working on public works projects for the time period of one year.

 Pharmaceuticals

Bipartisan Group of Attorneys General Object to Pharmaceutical Pay-for-Delay Arrangements

• A bipartisan group of 20 AGs, led by Washington AG Bob Ferguson, filed an amicus brief in the U.S. Court of Appeals for the Seventh Circuit in UFCW Local 1500 Welfare Fund v. AbbVie, Inc., arguing that the district court erred in finding that AbbVie’s allegedly anticompetitive agreements with generic competitors (“pay-for-delay agreements”) regarding its drug Humira were permissible under the U.S. Supreme Court’s decision in FTC v. Actavis.
• The brief argues, among other things, that the district court misapplied the Actavis decision, in which the U.S. Supreme Court held that the Federal Trade Commission could challenge pay-for-delay agreements under federal antitrust law, by erroneously holding that AbbVie’s agreements were automatically immune from antitrust scrutiny while Abbvie’s Humira patents have not yet expired, and noted that multiple circuit court decisions have rejected this position since Actavis.
• The brief also argues that upholding the district court’s decision would embolden pharmaceutical companies to engage in anticompetitive conduct and that AbbVie’s pay-for-delay agreements allegedly stopped the introduction of generic versions of Humira into the U.S. market.