Digest 04.23.2020: AG Sues China over COVID-19 | Layoffs in AG’s Office | FTC Settles with Rent-to-Own Payment Plan Co

Cozen in the News

Cozen O’Connor’s State Attorneys General Practice Member/Former Virginia AG Discusses State Cannabis Compliance Programs

  • Cozen O’Connor Member and former Virginia AG Jerry Kilgore participated in the opening panel for the Attorney General Alliance’s (“AGA”) Cannabis Law and Policy Virtual Summit earlier this week.
  • Kilgore discussed his experience in representing cannabis companies and the various types of compliance programs states employ today, in both recreational and medical cannabis states.
  • Kilgore stressed the need for balance in states’ compliance programs, stating “the states use compliance programs to promote consumer protection” and further noting “these compliance programs become cost leaders for companies in areas of labeling, testing, security and staffing.”

Demand for Information-Sharing Platforms Has Soared, Raising Privacy Concerns With Regulators [Alert]

  • Cozen O’Connor State AG Group Co-Chair Lori Kalani and partner Ann-Marie Luciano published an Alert setting out privacy best practices for information-sharing platform providers, in light of the exponential growth in demand for their services as an alternative to in-person meetings during the COVID-19 pandemic.
  • The Alert outlines some of the security challenges and vulnerabilities confronted by Zoom Video Communications, as it scaled up in the early weeks of the pandemic to respond to a massive spike in demand.
  • Based on reactions to date from AG offices and the Federal Trade Commission (“FTC”), the authors recommend a number of steps information-sharing platform providers can take to reduce the chances of an investigation by an AG office or the FTC.


Missouri Attorney General Fires Legal Shot at Chinese Government over COVID-19

  • Missouri AG Eric Schmitt sued the People’s Republic of China and related entities and individuals (collectively “China”) for allegedly engaging in a campaign of deceit and misinformation regarding the original COVID-19 outbreak and thereby incurring liability under theories of creating a public nuisance, engaging in abnormally dangerous activities, and breach of its duties of care.
  • The complaint alleges that China is responsible for the death and illness of COVID-19 victims and for the economic losses suffered due to the pandemic because China purportedly suppressed information, falsely denied that the Coronavirus could be transmitted person-to-person, and arrested whistleblowers, among other things.
  • The complaint seeks injunctive relief, direct, consequential and punitive damages, civil penalties, and attorneys’ costs.

Attorneys General Ask 3M to Take Additional Steps in Effort to Supply Health Care Workers with PPE

  • A group of 20 Democratic AGs, led by Virginia AG Mark Herring, sent a letter to 3M urging it to increase its efforts to combat price gouging on N95 masks and to increase the availability of the masks to health care providers.
  • The letter praises 3M’s efforts to increase mask production and the assistance it has provided to law enforcement in identifying price gougers.
  • The letter urges 3M to take further steps, including publishing policies that prohibit its distributors from price gouging, creating a database of 3M’s N95 masks for the use of government agencies and health care providers, and making the process of allocating N95 masks more transparent.

Attorney General Office Not Immune to COVID-19-Related Layoffs

  • Local news report that Michigan AG Dana Nessel’s office announced the temporary layoff of 100 staffers, who account for approximately 25% of the office’s workforce due to a reduction in work brought on by the COVID-19 pandemic.
  • According to reports, the AG’s office by written statement explained that “[w]hile certain areas of the department’s legal work have dramatically increased as a result of this emergency, other areas have slowed.”

2020 AG Elections

A New Candidate Joins the Race for Indiana Republican AG Nomination

  • Nate Harter, the Decatur County Prosecuting Attorney, announced his bid for the Republican nomination for Indiana AG, seeking to unseat incumbent Republican AG Curtis Hill, who is seeking reelection.
  • Harter was endorsed by former Republican candidate for AG Adam Krupp, who has dropped out of the race.
  • As previously reported, private-practice attorney John Westercamp is also running for the Republican nomination in Indiana.

Consumer Protection

Ignoring Customer Complaints Could Be Costly: FTC Settles with Rent-to-Own Payment Plan Company

  • The Federal Trade Commission (“FTC”) reached a settlement with rent-to-own payment plan company Prog Leasing, LLC (d/b/a Progressive Leasing) to resolve allegations that Progressive Leasing misled consumers about the true price of their purchases through the company’s plans, which it marketed in thousands of retail stores, in violation of the FTC Act.
  • The FTC’s complaint alleged that Progressive Leasing had been inundated by tens of thousands of consumer complaints making it aware that consumers were confused by their payment terms, including being charged interest despite being told that their plans would incur no interest and paying approximately twice the sticker price in many cases.
  • Under the terms of the proposed stipulated order, Progressive Leasing will pay $175 million to the FTC for disbursement of refunds to affected consumers. Progressive will also be enjoined from misrepresenting the cost and terms of its plans, and will be required to clearly disclose the total cost to own a product purchased through a plan and to get express, informed consent before charging a consumer for a sale.