Digest 12.14.2017 The State AG Report Weekly Update

AG Elections

Republican Todd Atwater Announces Bid for South Carolina Attorney General

  • Republican state Representative Todd Atwater has declared his candidacy for South Carolina AG in 2018.
  • Atwater was first elected to the South Carolina House of Representatives in 2010 and currently serves on its Labor, Commerce and Industry Committee and Rules Committee. He earned his law degree from University of South Carolina Law School.
  • Atwater will face incumbent AG Alan Wilson in the Republican primary for South Carolina AG. Currently, no Democrat candidate has filed to run.

Consumer Financial Protection Bureau

18 Attorneys General File Amicus Brief Challenging Trump Administration’s Appointment of CPFB Acting Director

  • 18 Democratic AGs filed an amicus brief in U.S. District Court for the District of Columbia supporting CFPB Deputy Director Leandra English’s motion for a preliminary injunction to challenge the Trump Administration’s appointment of Mick Mulvaney, the Office of Management and Budget Director, as the Acting Director of the Consumer Financial Protection Bureau (“CFPB”), after former Director Richard Cordray resigned last month.
  • In the brief, the AGs argue that President Trump did not have authority to appoint Mulvaney as Acting Director and, therefore, Deputy Director Leandra English should assume the role because the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”), which created the CFPB, specifies that the CFPB Deputy Director becomes Acting Director if the Director resigns.
  • A U.S. District Court judge denied English’s temporary restraining order to prevent Mulvaney from remaining Acting Director, while a hearing date for oral arguments is set for December 22, 2017.

Former CFPB Director Richard Cordray Announces Campaign for Governor of Ohio

  • Richard Cordray, former CFPB Director and former Ohio AG, declared his candidacy for Governor of Ohio in 2018.
  • Cordray, a Democrat, served as the first Director of the CFPB after being appointed by President Barack Obama in 2012, and, as previously reported, resigned last month. Cordray was elected as Ohio AG in 2008 but lost his reelection bid to current Ohio AG Mike DeWine in 2010.
  • Cordray joins a crowded Democratic field, which includes Ohio Supreme Court Justice Bill O’Neill, former state Representative Connie Pillich, state Senator Joe Schiavoni, former U.S. Representative Betty Sutton, and Mayor of Dayton Nan Whaley.
  • AG Mike DeWine previously announced his candidacy for the Republican nomination for Governor of the state. The field of Republican candidates also includes U.S. Representative Jim Renacci and Lieutenant Governor Mary Taylor.

Consumer Protection

New York Attorney General Files Lawsuit Against Music Promotion Company Over Alleged Music Festival Scam

  • New York AG Eric Schneiderman filed a lawsuit against music promotion company Buffalove Music Festival, LLC and its owner (collectively “Buffalove”) for allegedly violating state consumer protection laws when it failed to refund ticket costs to consumers after cancelling a planned music festival.
  • According to the AG’s office, Buffalove allegedly accepted $14,000 in ticket fees for the festival, including $13,000 from third-party ticket vendor Ticketfly, but cancelled the festival and did not issue refunds within 90 days to Ticketfly or consumers who purchased tickets directly through Buffalove.
  • The lawsuit seeks to require that Buffalove disclose all persons who made direct payments to Buffalove for festival tickets, refund those payments, and prohibit Buffalove from engaging in any business in the state until it pays full restitution, penalties, and costs.


15 Attorneys General Sue EPA for Allegedly Failing to Meet Clean Air Act Deadline

  • A coalition of 15 Democratic AGs, led by New York AG Schneiderman, filed a lawsuit against the Environmental Protection Agency (“EPA”) for allegedly failing to meet the Clean Air Act’s statutory deadline for designating areas of the country impacted by unhealthy levels of ground-level ozone or smog.
  • As previously reported, the AGs sent the EPA a Notice of Intent to Sue for failing to meet the Clean Air Act’s statutory deadline in October 2017, which fulfilled the Clean Air Act’s requirement that parties provide a 60-day notice prior to filing a lawsuit. According to the AGs, the EPA’s failure to designate areas of the country with suboptimal ambient air quality standards by the October 1, 2017 statutory deadline violates a key agency obligation under the Clean Air Act designed to protect the public’s health.
  • The AGs’ lawsuit seeks to declare the EPA in violation of the Clean Air Act, require the EPA to promptly perform the mandatory ozone designations, and award the states the costs of litigation and attorneys’ fees.

Health Care

16 Democratic Attorneys General File Comments Opposing HHS’s Removal of ACA Employer Contraception Coverage Requirement

  • 16 Democratic AGs, led by New York AG Schneiderman, filed comments with the U.S. Department of Health and Human Services (“HHS”) opposing an interim final rule which broadens the types of entities that can claim a religious exemption from the Affordable Care Act’s (“ACA”) requirement that employer-sponsored health plans cover contraceptive services for their employees.
  • Under the ACA, private health insurers are required to provide coverage for FDA-approved methods of birth control, without patient cost-sharing. Under the interim final rule, HHS broadened the types of groups that can claim a religious exemption to the contraceptive coverage requirement to include nonprofit and for-profit organizations and higher educational institutions that provide health coverage for their students. Previously, the religious exemption only applied to religious non-profit organizations and closely-held for-profit companies.
  • In the comments, the AGs argue that the interim final rule violates the Establishment Clause by allowing employers to use their own religious beliefs to discriminate against employees; the Equal Protection Clause by specifically targeting and harming women; and the Administrative Procedure Act by pushing through these new rules without proper factual and legal basis. Further, the AGs argue the interim final rule would force states to incur additional financial burden.
  • As previously reported, 18 Democratic AGs sent a letter to HHS Acting Secretary Don Wright, U.S. Department of Labor Secretary Alexander Acosta, and U.S. Department of Treasury Secretary Steven Mnuchin expressing similar opposition.

Medicaid Fraud

Massachusetts Attorney General Settles with Home Health Agency Over Alleged Medicaid Fraud

  • Massachusetts AG Maura Healey reached a settlement with home health service provider Centrus Premier Home Care Inc. d/b/a Maxim Healthcare Services, Inc. (“Maxim”) over allegations that it violated state regulations for Medicaid reimbursement.
  • According to the AG’s office, Maxim allegedly submitted and received payment for nearly 95,000 claims for services that were not covered under regulations for the state’s Medicaid program, MassHealth. The AG’s office alleges that in many circumstances, Maxim improperly billed MassHealth for nursing or skilled therapy services that were not necessary and, therefore, not covered by MassHealth.
  • Under the terms of the settlement, Maxim agrees to comply with MassHealth regulation conditions, provide annual written certification of compliance to the AG’s office, provide training to employees involved in billing, and pay $14 million to MassHealth.

State AGs in the News

New Jersey Governor-elect Will Nominate Democrat Gurbir Grewal as Attorney General

  • New Jersey Governor-elect Phil Murphy, a Democrat, named Gurbir Grewal as his choice for AG. Governor-elect Murphy was elected in November to succeed term-limited Republican Governor Chris Christie.
  • Grewel currently serves as Bergen County prosecutor, a position he has held since being nominated by Governor Christie in 2013. He had been the county’s acting prosecutor since 2010. Prior to serving as Bergen County’s top law enforcement official, Grewel was Chief of the Economic Crimes Unit at the U.S. Attorney’s Office for the District of New Jersey.
  • Upon taking office on January 16, 2018, Governor-elect Murphy’s AG nomination will be sent to the state Senate for approval.