Digest 4.19.2018 The State AG Report Weekly Update

2018 AG Elections

Republican Gentner Drummond Announces Bid for Oklahoma Attorney General

  • Republican Gentner Drummond has declared his candidacy for Oklahoma AG in 2018.
  • Drummond, a Tulsa attorney in private practice, is a U.S. Air Force veteran who served as a combat pilot in Operation Desert Storm.
  • Drummond joins fellow Republican Angela Bonilla in challenging incumbent AG Mike Hunter for the party’s nomination. The primary will be held June 26.
  • As no Democrat announced a candidacy before the filing deadline, the winner of the primary will run unopposed in the November general election.

Democrat Dana Nessel Secures Party Endorsement for Michigan Attorney General

  • Democrat Dana Nessel has won the Michigan Democratic Party (“MDP”) endorsement for Attorney General.
  • As recently reported, the MDP held its 2018 State Endorsement Convention on April 15. Candidates who emerged with the endorsement will be officially nominated at the Nominating Convention in August, but are the effective party nominee in the interim.
  • To learn more about the Michigan AG race and the other 30 AG races in 2018, please visit Cozen O’Connor’s State AG Election Tracker.

Consumer Protection

Massachusetts Attorney General Settles with Lender Over Financing for Allegedly Misleading Educational Products

  • Massachusetts AG Maura Healey reached a settlement with Florida-based credit union We Florida Financial (“We Florida”) to resolve allegations related to loans provided to students of for-profit education company The College Network, Inc. to finance purchases for allegedly overpriced and defective study materials.
  • According to the AG’s office, We Florida allegedly coordinated with The College Network—which became insolvent and was dissolved in 2017—to provide financing for purchases of online study materials geared towards passing equivalency exams and earning college credit that were allegedly sold through false and misleading representations of the products’ quality to consumers.
  • According to the AG’s office, the terms of the settlement require We Florida to forgive $748,000 in consumer loans made in connection to purchases from The College Network, pay $150,000 to the Commonwealth of Massachusetts to provide additional refunds to certain borrowers, and seek to remove negative loan information from affected borrowers’ credit reports.

Data Privacy

Arizona Enacts New Data Breach Notification Law

  • Legislation supported by Arizona AG Mark Brnovich updating and strengthening Arizona’s data breach consumer protection statute has been passed by the state legislature and signed into law by Governor Doug Ducey.
  • The new law expands the types of “personal information” protected; requires notification of data breaches within 45 days of discovery to affected consumers and, if a breach affects more than 1,000 consumers, to the AG and consumer protection agencies; and increases civil penalties for knowing or willful violations of the law, among other things.
  • The law will go into effect in July 2018.

West Virginia Attorney General Sues Credit Reporting Agency Over Data Breach

  • West Virginia AG Patrick Morrisey filed a lawsuit against credit reporting agency Equifax alleging that it violated state consumer protection and data privacy laws by failing to secure consumer information.
  • According to the AG’s office, Equifax allegedly exposed over 730,000 West Virginia residents to risk of identity theft, tax return scams, and financial fraud by ignoring warnings to secure its system, failing to safeguard consumer information, and stalling public notification of a data breach.
  • According to the AG’s announcement, the complaint seeks $150,000 for each security breach and $5,000 for each violation of the state consumer protection laws, as well as attorneys’ fees and costs.
  • As previously reported, nearly 40 AGs are investigating the Equifax data breach, and Massachusetts AG Healey also has filed a similar suit.


New York Attorney General Settles with Energy Service Company Over Allegedly Deceptive Sales Practices

  • New York AG Eric Schneiderman announced a settlement with Liberty Power Holdings, LLC (“Liberty”)—an energy service company that purchases energy on the open market to sell to consumers—over allegations that Liberty used deceptive sales practices to lure consumers into paying higher prices for energy in violation of state consumer protection, door-to-door sales, and telemarketing laws.
  • According to the AG’s office, Liberty failed to effectively supervise sales contractors and subcontractors who made false promises of savings, misrepresented themselves as affiliated with consumers’ current utility providers, obtained consent from unauthorized individuals on enrollment contracts, and violated the Do Not Call Registry, among other things.
  • According to the AG’s office, the settlement requires Liberty to pay $550,000 for consumer refunds and take specific measures to prevent future deceptive practices by sales representatives.


Federal Appeals Court Strikes Down Maryland Drug Price-Gouging Law

  • The U.S. Court of Appeals for the Fourth Circuit struck down a 2017 Maryland law that would have allowed the AG to sue generic drug makers for sharp price increases, permitted fines of up to $10,000 per violation, and given the AG authority to require a pharmaceutical manufacturer or distributor to produce records justifying price increases.
  • The Court’s opinion in Association for Accessible Medicines v. Frosh, No. 17-2166, 2018 WL 1770978 (4th Cir. Apr. 13, 2018), held that the statute violated the Commerce Clause by “directly regulat[ing] the price of transactions that occur outside Maryland.”
  • Maryland AG Brian Frosh released a statement regarding the Court’s decision, stating that his office “remain[s] committed to pursuing efforts to eliminate price gouging and to safeguarding Marylanders’ access to prescription drugs.”

State AGs in the News

Montana Attorney General Diagnosed with Colon Cancer

  • Montana AG Tim Fox reportedly has been diagnosed with colon cancer and is undergoing treatment.
  • AG Fox, 60, is recovering from a partial colon removal surgery completed in late March, and plans to begin chemotherapy next month.
  • AG Fox reportedly stated that with these treatments and early detection, he has a very high likelihood of recovery, and he is using his story to encourage family members and co-workers to undergo recommended cancer screenings.

State v. Federal

11 Attorneys General Pen Letter to U.S. Department of Labor Opposing Labor Law Waiver Program

  • 11 Democratic AGs, led by New York AG Schneiderman, sent a letter to U.S. Labor Secretary Alexander Acosta opposing the U.S. Department of Labor’s Payroll Audit Independent Determination (“PAID”) Program, implemented by the agency in early March.
  • The PAID Program allows employers who self-report overtime and minimum wage violations under the federal Fair Labor Standards Act (“FLSA”) and pay back wages owed to avoid prosecution or penalties for those violations.
  • According to the letter, the PAID Program disadvantages workers by encouraging employers to require employees to waive important state law protections and forego recourse otherwise available such as liquidated damages, penalties, and interest on overdue wages otherwise available for wage violations, among other things.