The State AG Report Weekly Update December 31, 2015

Breaking News

National Association of Attorneys General Forms Charities Committee

  • South Dakota AG Marty Jackley, president of the National Association of Attorneys General (“NAAG”), announced the formation of the NAAG Charities Committee for the purpose of protecting citizens and businesses from scams and thefts associated with charitable giving.
  • Connecticut AG George Jepsen and Nebraska AG Doug Peterson will serve as committee Co-Chairs, with other committee members including Northern Mariana Islands AG Edward Manibusan, Utah AG Sean Reyes, Kansas AG Derek Schmidt, and Vermont AG Bill Sorrell.


Connecticut Attorney General, Federal Government Resolve Alleged Antitrust Concerns in Proposed Acquisition Settlement with Movie Theaters

  • Connecticut AG George Jepsen and the U.S. Department of Justice (“DOJ”) approved $172 million proposed acquisition of SMH Theatres, Inc. (“Starplex Cinemas”) by AMC Entertainment Holdings, Inc. (“AMC”), with conditions to resolve competition concerns.
  • According to the complaint, filed in conjunction with the proposed settlement, the acquisition of Starplex Cinema’s theaters by AMC would have resulted in a substantial decrease of competition in two localities within Connecticut and New Jersey.
  • Under the proposed settlement, a theater in two markets must be divested to an approved buyer before AMC can proceed with the acquisition.


New York Attorney General Settles with Charity for Fundraising Misconduct

  • New York AG Eric Schneiderman reached a settlement with the National Children’s Leukemia Foundation (“NCLF”) and its officers for admitted fundraising misconduct, resolving a lawsuit filed by the AG against the NCLF.
  • According to the AG’s office, the defendants admitted to misrepresenting the medical services they provided to sick and terminally ill leukemia patients and spent 85 percent of the $9.7 million in donations it received on fundraising costs.
  • Under the terms of the settlement, the NCLF will permanently close, the defendants will not solicit funds on behalf of any charity, and the AG will recover $380,000, most of which will be distributed to charities assisting children with leukemia.

Consumer Protection

Attorneys General Urge FCC to Preserve Safeguards of Text Messaging from Spam

  • A bipartisan coalition of 19 AGs, led by Idaho AG Lawrence Wasden, submitted a comment letter to the Federal Communications Commission (“FCC”) requesting that the FCC maintain safeguards that protect text messaging from spam and phishing messages.
  • The letter was sent in response to the FCC’s request for comment on a petition for declaratory ruling asking the agency to determine whether messaging services are governed by Title II of the Communications Act.
  • In the comment letter, the AGs urge the FCC to ensure that any decision regarding how text messages are governed under the Communications Act does not affect the ability of wireless carriers to filter out unwanted spam in text messaging, which the AGs claim has prevented text messaging from being “excessively polluted by spam communications.”

False Claims Act

Forty-seven States and the Federal Government Settle with Pharmaceutical Company for Alleged False Claims Act Violations

  • 47 states, led by New York AG Eric Schneiderman, and the federal government, reached an agreement in principle with generic pharmaceutical manufacturer Vintage Pharmaceuticals, LLC, d/b/a Qualitest Pharmaceuticals, Inc., its parent company Endo International PLC, and seven of their corporate subsidiaries or affiliates (collectively, “Qualitest”) for alleged False Claims Act violations.
  • According to the New York AG’s office, Qualitest allegedly labeled and marketed some multivitamins as containing the American Dental Association’s daily-recommended amount of fluoride, although the tablets on average contained less than half the recommended amount, allegedly causing health care providers to submit false reimbursement claims to state and federal health care plans.
  • Under the terms of the settlement in principle, Qualitest will pay $39 million to the states and the federal government.

Intellectual Property

California Attorney General Settles with International Company for Alleged Unfair Advantage Gained from Use of Pirated Software

  • California AG Kamala Harris reached a settlement with international apparel manufacturing company Pratibha Syntex, Ltd., for allegedly using pirated software in violation of California’s unfair competition laws.
  • According to the complaint, Pratibha Syntex allegedly failed to pay licensing fees for various software products that it used in its business operations, which in turn, allegedly gave the company a significant competitive advantage in the manufacturing and sales of apparel.
  • Under the terms of the settlement, Pratibha Syntex will pay $100,000 in restitution, is prevented from using unlicensed software in the future, and is required to uncover and resolve any further software licensing violations within 45 days.


Kentucky Attorney General Reaches Settlements with Two Pharmaceutical Companies for Alleged Drug Misrepresentations

  • Kentucky AG Jack Conway reached separate settlements with Purdue Pharma and affiliated companies (“Purdue”), and Janssen Pharmaceuticals, Inc. (“Janssen”) and its parent company Johnson & Johnson, Inc., for alleged misrepresentation of the drugs OxyContin and Risperdal.
  • According to the AG’s office, Purdue allegedly misrepresented and concealed the highly addictive nature of OxyContin to physicians and allegedly encouraged the drug’s overprescription as a pain reliever. Janssen and Johnson & Johnson, according to the AG, allegedly failed to disclose the known side effects of Risperdal, and marketed the drug for treating dementia in non-schizophrenic elderly patients, a use not approved of by the Food and Drug Administration.
  • According to the terms of the settlements, in addition to corrective actions, Purdue must pay $24 million to the state, and Janssen and Johnson & Johnson must collectively pay $15.5 million to the state.