The State AG Report Weekly Update December 17, 2015

Consumer Protection

Maryland Attorney General Intervenes in Structured Settlement Transfer Cases

  • Maryland AG Brian Frosh filed motions to intervene in a number of cases to prevent allegedly unregistered out-of-state companies from purchasing structured settlements.
  • These actions by AG Frosh are part of a broader investigation launched by the Office into the practices of companies who purchase structured settlements from potentially impaired and injured individuals, based on the Office’s concerns these entities are potentially violating state laws by targeting vulnerable individuals who give up settlement payments for cash payouts that are a fraction of the settlement’s real value.

New York Attorney General Settles with Thirty Online Retailers for Alleged Violations of Imitation Weapon Laws

  • New York AG Eric Schneiderman reached settlement agreements with thirty online retailers over allegations they violated state laws by selling life-like imitation guns to state consumers.
  • According to the AG’s office, over 5,000 life-like toy guys were allegedly sold to consumers in New York by these retailers through a retail marketplace platform for third-party sellers operated by in violation of state and city laws that prohibit the sale of imitation weapons.
  • The settlements, which are the result of a larger investigation by the AG into online retail sales of toy guns, require the retailers to pay over $309,000 in penalties to the state and to abide by the New York City standard that requires toy guns to be entirely brightly colored (as opposed to the state standard that requires only markings along the sides and the tip of the barrel).

Vermont Attorney General Settles with Motor Vehicle Advertiser for Alleged Deceptive Practices

  • Vermont AG William Sorrell reached a settlement with Aspen Marketing Services, LLC (“Aspen”) for alleged violations of the state’s deceptive trade practices laws.
  • According to the AG’s office, Aspen allegedly sent over 81,000 letters on behalf of five GM vehicle dealers, misrepresenting that the letters’ recipients were specially selected to participate in an exclusive vehicle buyback program, when in fact the program was not exclusive, as the mailing list was compiled from lists of Vermont motor vehicle customers purchased by Aspen, and the names of actual or prospective customers provided by the dealers.
  • Under the terms of the settlement, Aspen must pay a $109,000 penalty, cease producing these marketing materials, and not produce similar pieces in the future.


Pennsylvania Attorney General Sues Energy Company for Alleged Deceptive Practices Regarding Fracking Leases

  • Pennsylvania AG Kathleen Kane filed a lawsuit against Chesapeake Energy Corp. and its affiliates (“Chesapeake”) for alleged violations of the state’s Unfair Trade Practices and Consumer Protection Law.
  • According to the AG’s office, Chesapeake allegedly promised landowners specific royalties in exchange for the gas company securing fracking leases, but actually paid lower royalty amounts to the lessors, including retroactively deducting post-production expenses paid to affiliated companies from royalty checks.
  • The complaint seeks restitution for at least 4,000 landowners and civil penalties.


California Attorney General Settles with Cable Company for Alleged Hazardous Waste Law Violations

  • California AG Kamala Harris and the Alameda County District Attorney reached a settlement with Comcast Cable Communications LLC (“Comcast”) over the company’s alleged improper disposal and handling of hazardous waste in violation of the state’s hazardous waste control law.
  • According to the complaint and the AG’s office, Comcast is alleged to have “routinely and systematically” sent hazardous waste materials to local landfills not permitted to accept such materials, transported hazardous waste without proper licensing, and failed to properly label, contain, or manage hazardous waste at its facilities.
  • Under the agreement, the company will pay $25.95 million, including $17.85 million in civil penalties.
  • The settlement also resolved allegations that Comcast disposed of customer records that contained personal information without making the personal information unreadable, in violation of state law.

False Claims Act

New Jersey Acting Attorney General Settles with Laboratory for Alleged False Claims Act Violations

  • New Jersey Acting AG John Hoffman reached a settlement with Accutest Laboratories, a/k/a Accutest Corporation, (“Accutest”) for alleged violations of state regulations governing laboratory certification and federal and state False Claims Acts.
  • According to the AG’s office, Accutest sought payment from customers, including the State and its agencies, for environmental tests that allegedly failed to fully comply with the company’s prescribed methods and procedures, and the U.S. Environmental Protection Agency’s requirements for the extraction and testing of certain compounds. Accutest also allegedly performed analyses beyond the scope of their laboratory certification.
  • Under the terms of the settlement, Accutest must pay $2 million in penalties and notify all New Jersey clients who received the data at issue.  The case originally began as a federal qui tam lawsuit filed in April 2013 by a former Accutest employee.

States v. Federal Government

22 Bipartisan Attorneys General File Joint Amicus Brief in United States Supreme Court to Challenge Runoff Regulations

  • Twenty-two bipartisan AGs, led by Kansas AG Derek Schmidt, filed an amicus curiae brief with the U.S. Supreme Court in support of the certiorari petition in American Farm Bureau Federation, et al., v. United States Environmental Protection Agency, et al., challenging the Environmental Protection Agency’s (“EPA”) authority under the Clean Waters Act to determine how states regulate sediment runoff in the Chesapeake Bay watershed.
  • According to the AGs, lower courts erred in deferring to the EPA’s interpretation of the words “total maximum daily load”, in which the agency has determined it has the authority to both establish runoff limits and manage the ways in which states implement these limits, as the AGs argue that the agency only has authority to establish the aforementioned limits.


West Virginia Attorney General Settles with Internet Provider for Allegedly Slow Internet Speeds

  • West Virginia AG Patrick Morrisey reached a settlement with Frontier West Virginia Inc. and Citizens Telecommunications Company of West Virginia, d/b/a Frontier Communications of West Virginia, (collectively “Frontier”) for alleged violations of the state’s Consumer Credit and Protection Act.
  • According to the AG’s office, Frontier allegedly sold high-speed Internet service, which the company defined as speeds up to 6 megabits per second (“Mbps”), but many customers only experienced speeds of 1.5 Mbps or lower.
  • Under the terms of the settlement, Frontier will pay $500,000 to the state’s Consumer Protection Fund, will lower current service rates for affected consumers, and will invest $1.5 million in capital expenditures to both increase Internet speeds across the state and provide access to high-speed service in areas without it.