Digest 10.01.2020: Precious Metals Scam | R, D AGs Weigh In on Pipelines | $60 Million Surgical Mesh Settlement


AG Coalitions Tackle PPP, Price Gouging Concerns

  • Eighteen Democratic AGs, led by Illinois AG Kwame Raoul, sent a comment letter to the Small Business Administration (“SBA”) opposing the SBA’s proposed rule governing the appeals process for Paycheck Protection Program (“PPP”) loans, which would impact all SBA decisions regarding PPP loans, including borrowers’ eligibility and a loan’s amount, acceptable usage, and forgiveness.
  • The letter argues that the proposed rule is confusing, detrimental to borrowers’ rights, violates due process, and does not comply with the Administrative Procedure Act, and urges the SBA to use independent and neutral decision-makers in the appeals process and to provide borrowers an opportunity to respond to SBA’s determinations, among other things.
  • AG Raoul also filed an amicus brief on behalf of a bipartisan group of 30 AGs in the U.S. Court of Appeals for the Sixth Circuit in Online Merchants Guild v. Cameron, No. 20-5723, in support of Kentucky AG Daniel Cameron’s position on states’ authority to enforce price gouging regulations during emergencies such as the COVID-19 pandemic.
  • The brief urges the court to overturn the District Court’s preliminary injunction preventing Kentucky from enforcing its price gouging regulations against retailers selling products on online marketplaces, arguing that price gouging laws help lower-income consumers gain access to scarce and essential goods, that these laws fall under states’ consumer protection responsibilities, and that state price gouging laws do not violate the Dormant Commerce Clause because they do not directly regulate the price of goods in out-of-state sales.

 Consumer Protection

“Operation Corrupt Collector”: A Nationwide Crackdown on Phantom and Abusive Debt Collection

  • The Federal Trade Commission (“FTC”) has undertaken a nationwide initiative titled “Operation Corrupt Collector” to crack down on phantom debt collectors and abusive debt collection practices, targeting debt collectors who employ such illegal practices as collecting on debt not owed, using threatening or deceptive robocalls, and falsely threatening consumers with improper legal action.
  • To date, Operation Corrupt Collector includes more than 50 enforcement actions by the FTC, the Consumer Financial Protection Bureau, 16 AGs, and other federal law enforcement agencies.
  • The initiative also includes consumer education and an online dashboard for reports received from consumers of collection attempts on debts not owed and other abusive collection practices.

Law Firm Sued over Alleged Kickbacks from Pharmacy

  • Massachusetts AG Maura Healey sued law firm Keches Law Group, P.C. (“Keches”) over allegations that it accepted illegal kickbacks from a pharmacy in violation of the Massachusetts Consumer Protection Act.
  • The complaint alleges that Keches accepted over $90,000 in kickbacks—in the form of referral compensation and lavish events—from Injured Workers Pharmacy in exchange for referring at least 800 clients to it, without disclosing its financial interest in the referrals or obtaining clients’ informed consent.
  • The complaint seeks declaratory and injunctive relief, civil penalties, restitution, and attorneys’ fees and costs.
  • Counsel for Keches provided a statement denying awareness of any problems with the pharmacy or with Keches’ clients who used the pharmacy’s services or that it knew that the pharmacy’s prescribing practices were allegedly faulty, and further denying that its arrangement with the pharmacy ran afoul of conflict of interest rules.

Financial Industry

Precious Metals Traders Allegedly Conned Consumers by Selling Bullions at Wildly Inflated Prices

  • The Commodity Futures Trading Commission (“CFTC”) and 30 state securities regulators jointly sued precious metals companies TMTE, Inc., d/b/a, Chase Metals, LLC, Chase Metals, Inc., Barrick Capital, Inc., and related individuals (collectively, “”) over allegations that they defrauded consumers by convincing them to use their retirement savings to buy precious metals through fraudulent marketing practices in violation of the federal Commodities Exchange Act and CFTC regulations, and state consumer protection and commodities trading laws.
  • The U.S. District Court for the Northern District of Texas entered a temporary restraining order freezing’s assets, appointing a receiver to take control of, and permitting the CFTC and state regulators to inspect all relevant records.
  • The complaint alleges that sold precious metal bullions at prices that were 100% to 300% above market price by falsely claiming that the bullions were rare and much more valuable than their base melt price, and misrepresented precious metals as a safe and conservative investment virtually guaranteed not to lose its value, among other things.
  • The complaint seeks declaratory and injunctive relief, disgorgement, restitution, civil penalties, the appointment of a permanent receiver, and attorneys’ costs and fees.


Democratic and Republican AG Groups Weigh In on Pipeline Cases

  • A group of 17 Democratic AGs, led by Massachusetts AG Maura Healey and joined by the Territory of Guam and Harris County, Texas filed an amicus brief in the U.S. Court of Appeals for the District of Columbia Circuit in Standing Rock Sioux Tribe v. U.S. Army Corps of Engineers, Nos. 20-5197 & 20-5201, urging the court to affirm the District Court’s ruling in favor of the plaintiff Native American tribes. The lower court held that the defendant U.S. Army Corps of Engineers (“Corps”) failed to fully assess the environmental impact of a potential oil spill in construction of the Dakota Access Pipeline, in violation of the National Environmental Policy Act.
  • A group of 17 Republican AGs, led by Texas AG Ken Paxton and West Virginia AG Patrick Morrisey, filed an amicus brief in the U.S. Court of Appeals for the Ninth Circuit in Northern Plains Resource Council v. U.S. Army Corps of Engineers, No. 20-35412, urges the court to overturn the District Court’s order enjoining the Corps from authorizing any new oil and gas pipeline projects nationwide. The AGs argue that the lower court erred in transforming a challenge to a single project—the Keystone XL pipeline—into an overly broad injunction with serious consequences for the amici States and the nation’s economy.

Health Care

$60 Million Multistate Settlement over Allegations of Misleading Marketing Practices for Surgical Mesh

  • A group of 49 AGs reached a settlement with medical device company C.R. Bard, Inc. and its parent company Becton, Dickinson & Co. (collectively, “Bard”) to resolve allegations that Bard used misleading marketing practices to promote and sell its now discontinued transvaginal surgical mesh products in violation of state consumer protection laws.
  • The AGs alleged, among other things, that Bard knowingly misled healthcare providers and consumers by misrepresenting the risks and benefits of using its transvaginal surgical mesh products and by failing to disclose the potential for permanent, debilitating complications associated with their use.
  • Under the terms of the proposed stipulated judgment, Bard will pay $60 million to the states and must, for all of its urogynecological mesh products, provide understandable descriptions of complications in any marketing materials, disclose sponsorship in clinical studies, and require consultants to agree to disclose Bard’s sponsorship in any public presentation or publication, among other things.