The State AG Report Weekly Update December 3, 2015

Breaking News

Former Kentucky Chief Deputy Attorney General Joins Cozen O’Connor’s State Attorneys General Practice

  • Sean Riley has joined Cozen O’Connor’s nationally recognized State Attorneys General Practice and will assist in the groups work representing clients with AG issues in all 50 states.  Since 2009, Riley has worked for the Kentucky Attorney General, most recently as chief deputy attorney general. In 2010, he served as finance director for the Conway for Senate campaign.
  • Prior to joining the Office of the Attorney General, he worked in the Government Investigations and White Collar Crime practice of Nixon Peabody.
  • A graduate of Columbia Law School, Riley has been honored as one of the Best LGBT Attorneys under 40 by the National LGBT Bar Association and as one of Louisville Business First’s 40 Under Forty.

Republican Jeff Landry is Elected Louisiana Attorney General

  • Louisiana held its run-off election for Attorney General on Saturday, November 21, after no candidate received more than 50 percent of the vote in the general election held on October 24. Incumbent Republican Attorney General Buddy Caldwell was defeated by challenger Republican Jeff Landry by a margin of 44 percent to 56 percent. Jeff Landry will be the next Attorney General of Louisiana.
  • Visit our Guide to State Attorneys General to see up-to-date information on attorneys general in all 50 states, the District of Columbia, Commonwealth, and Territories of the United States.


California Attorney General Seeks to Shut Down Car Donation Charities for Alleged Misrepresentations

  • California AG Kamala Harris, along with two local District Attorneys, filed lawsuits against People’s Choice Charities (“PCC”) and Cars 4 Causes (“C4C”), and its officers, for allegedly violating state law by misrepresenting their charitable programs.
  • According to the AG’s office, among other things, PCC and C4C allegedly claimed that all or a significant portion of net proceeds from donations went toward charities when only 3 percent and 13 percent, respectively, were directed to actual charities, and the vast majority of the remaining proceeds were used to cover administrative fees and allegedly excessive compensation.
  • The lawsuits seek civil penalties and to shut down the organizations.

Texas Attorney General Reaches Settlement with Veterans Charity for Alleged Deception Regarding Donation Recipients

  • Texas AG Ken Paxton reached a settlement with Veterans Support Organization (“VSO”) and its officers for alleged violations of the Texas Deceptive Trade Practices –Consumer Protection Act and state charities laws.
  • According to the AG’s office, among other things, VSO allegedly solicited over $2.5 million in donations from Texans and stated these donations would be used to assist local veterans, but diverted over 70 percent of the donations to Florida and Rhode Island.
  • Under the terms of the settlement, VSO and its owners must cease operations in Texas and dissolve the organization; are permanently banned from owning, operating, and managing charities in the state; must pay $275,000 to local veterans in need; and will be subject to $250,000 in civil fines if they violate the terms of the settlement.

Consumer Protection

Massachusetts Attorney General Announces Initiative to Address Unlawful Practices by Student Loan “Debt Relief” Companies

  • Massachusetts AG Maura Healey has launched a Student Loan Assistance Unit within her office to assist troubled borrowers and announced that her office is “cracking down” on alleged unlawful practices by student loan “debt relief” companies.
  • The new unit will assist borrowers by reviewing their student loan and payment status, helping them get out of default or delinquency, assisting with applications for federal income-based repayment plans, and advocating for complete discharges of the loans where appropriate.
  • AG Healey also separately reached settlements with two companies, IrvineWebWorks, Inc. d/b/a Student Loan Processing.US (“SLP”) and Interactiv Education, LLC, d/b/a Direct Student Aid (“DSA”) for allegedly charging illegal upfront fees, aggressive marketing practices, and misleading borrowers about their ability to arrange lower monthly payments for their loans. Under the terms of the settlements, SLP and DSA must pay $56,000 and $40,000, respectively, in restitution and are prohibited from operating or advertising in the Commonwealth.

West Virginia Attorney General Sues Pharmacies for Alleged Unlawful Scheme to Obtain Customers

  • West Virginia AG Patrick Morrisey filed lawsuits against David Pharmacy LLC and Rock City Pharmacy LLC for alleged violations of the West Virginia Consumer Credit and Protection Act.
  • According to the complaints, David Pharmacy and Rock City Pharmacy allegedly used forms, surveys, and online questionnaires to obtain personal data from multiple patients and then used that information to transfer prescriptions to the pharmacies without the patients’ knowledge or consent.
  • The lawsuits seek to stop the companies from conducting business in the state or collecting payments from state residents, and also seek to impose civil penalties.

False Claims Act

Fifty Attorneys General and Federal Government Reach Settlements Resolving Alleged False Claims Act Violations Against Healthcare Company

  • AGs in forty-nine states and the District of Columbia, and the Department of Justice, reached settlements with Millennium Health, LLC, f/k/a Millennium Laboratories, Inc. to resolve alleged violations of state and federal False Claims Acts (“FCA”), and the federal Anti-Kickback Statute.
  • According to the settlements, Millennium Health allegedly encouraged medically unnecessary urine drug and genetic testing, provided free urine drug test cups to providers in exchange for returning those samples for testing to Millennium, and billed federal health care programs for these tests.
  • Under the terms of the settlements, Millennium Health must pay $256 million and enter into a corporate integrity agreement with the U.S. Department of Health and Human Services-Office of Inspector General.

States v. Federal Government

Nine Republican Attorneys General File Joint Amicus Brief in United States Supreme Court to Challenge the Affordable Care Act

  • Nine Republican AGs, led by Texas AG Ken Paxton, filed an amicus curie brief with the U.S. Supreme Court in support of the certiorari petition in Matt Sissel v. Department of Health and Human Services, challenging that the Affordable Care Act’s (“ACA”) enactment violated the Origination Clause of the U.S. Constitution, which requires all revenue raising bills to originate in the U.S. House of Representatives.
  • According to the AGs, where the ACA can “only exist as a tax statute,” the appeals court erred in finding the ACA to not be a revenue raising bill and in doing so “effectively nullifies” the Origination Clause.