Digest 05.07.2020: Price Gouging Lawsuits | Antitrust Settlement in Cancer Care Market | Alleged Misuse of Tax Credits by Nonprofit


Attorneys General Address Pandemic-Related Price Gouging

  • District of Columbia AG Karl Racine sued convenience store Helen Mart, LLC for allegedly selling bleach at a 200% markup, compared to prices charged by other retailers, in violation of the District’s Natural Disaster Consumer Protection Act. The complaint seeks injunctive relief, civil penalties, and attorneys’ costs and fees.
  • North Carolina AG Josh Stein obtained a temporary restraining order against towing company A1 Towing Solutions, Inc. and its owner (collectively, “A1 Towing”) for allegedly booting or towing trucks delivering essential goods and forcing drivers to pay exorbitant fees for their release, among other predatory actions, in violation of North Carolina’s price gouging statute, Unfair or Deceptive Trade Practices Act, and Debt Collection Act. The complaint against A1 Towing also seeks permanent injunctive relief, restitution, disgorgement, rescission, civil penalties, and attorneys’ costs.

Attorneys General Take Action to Protect Seniors in Wake of COVID-19

  • A bipartisan group of 27 AGs, led by New York AG Letitia James, sent a letter to U.S. Department Housing and Urban Development (“HUD”) Secretary Ben Carson advocating for protections for senior citizens against COVID-19-related foreclosures of HUD-insured reverse mortgages. In the letter, the AGs praise the steps HUD has already taken to limit reverse mortgage foreclosures and ask HUD to educate consumers about available relief, grant servicers flexibility to seek relief from local taxing authorities, and prepare to extend relief beyond 12 months, among other things.
  • Sixteen Democratic AGs, led by New York AG James, sent a letter to Centers for Medicare & Medicaid Services Administrator Seema Verma urging her to promulgate rules requiring nursing homes to notify the Centers for Disease Control, nursing home residents, and their representatives of COVID-19 cases in the facility. The AGs argue that the rules are necessary to fully implement the Administrator’s guidance on reporting, which she issued in an April 2020 memorandum.
  • New Jersey AG Gurbir Grewal is reportedly investigating the operations of long-term care facilities across the state both before and in response to the COVID-19 pandemic. AG Grewal’s office has also established an online portal where constituents can report nursing home misconduct.
  • Investigators from Ohio AG Dave Yost’s Medicaid Fraud Control Unit reportedly searched nursing home Bickford Senior Living (“Bickford”) with the assistance of law enforcement in response to a complaint against Bickford sent to the AG’s office and the state Department of Health. The complaint reportedly alleged that sick patients were not tested for COVID-19 and were not separated from healthy residents, and that staff did not have proper personal protective equipment.


Where’s the Beef? Bipartisan Coalition of Attorneys General Asks U.S. Department of Justice to Investigate Antitrust Concerns Relating to Meatpackers

  • A bipartisan group of 11 AGs, led by North Dakota AG Wayne Stenehjem, Colorado AG Philip Weiser, Missouri AG Eric Schmitt, and Montana AG Tim Fox, sent a letter to U.S. Attorney General William Barr requesting an investigation into the market conditions and potential anticompetitive practices in the meatpacking industry.
  • The letter notes that antitrust concerns are a long-standing issue in the industry, predating the COVID-19 pandemic, and that currently only four companies account for 80% of the nationwide market.
  • The letter argues that the DOJ is best placed to conduct this investigation because this is a nationwide issue and urges AG Barr to consider regulatory strategies that would promote competition even if a DOJ investigation does not find that enforcement action is warranted.

Oncology Practice on the Hook for $120 Million Over Alleged Anticompetitive Conduct

  • Florida AG Ashley Moody reached a settlement with Florida Cancer Specialists & Research Institute, LLC (“FCS”) to resolve allegations that it entered into illegal agreements with competitors to carve out monopolistic geographic and product markets in violation of the Florida Antitrust Act and the Florida Deceptive and Unfair Trade Practices Act.
  • According to the complaint, FCS, which operates approximately 100 facilities in the state, allegedly attempted to coordinate with its competitors to exclusively allocate certain treatments to FCS while other treatments would be exclusively allocated to a competitor of FCS within specific geographic areas.
  • Under the terms of the consent decree, FCS is enjoined from anticompetitive conduct and will cooperate in the AG’s continuing investigation into the provision of oncology services in the state, promulgate antitrust policies and procedures, and pay $20 million to the AG’s office, among other things. Concurrently, FCS entered into a deferred prosecution agreement with the DOJ, pursuant to which it will pay a $100 million criminal penalty to resolve DOJ’s parallel federal criminal antitrust investigation.


Nonprofit Pays Millions for Allegedly Submitting Inflated New Market Tax Credit Applications

  • Oregon AG Ellen Rosenblum reached a settlement with nonprofit Ecotrust and its for-profit affiliate Ecotrust Forest Management, Inc. (collectively, “Ecotrust”) to resolve allegations that Ecotrust submitted false applications to gain New Market Tax Credit (“NMTC”) financing for its development projects in violation of the Oregon False Claims Act.
  • According to the AG’s office, Ecotrust allegedly inflated projected expenditures on two development projects for which it was applying for NMTC financing, causing the state to be overcharged by approximately $1.85 million in tax credits, and used the tax credits to purchase property and enrich investors instead of the intended purpose of providing job opportunities in economically disadvantaged areas of the state.
  • According to the AG’s office, under the terms of the settlement, Ecotrust will pay $4.4 million to the state.