Digest 2.21.2019 The State AG Report Weekly Update

2019 AG Elections

Democrat Jennifer Riley-Collins Announces Intention to Run for Mississippi AG

  • Jennifer Riley-Collins, a Democrat, announced her intention to run for Mississippi AG in 2019.
  • Riley-Collins, a U.S. Army veteran, is the Executive Director of the American Civil Liberties Union of Mississippi and the Vice President of Advocacy for the Sargent Shriver National Center on Poverty Law.
  • Riley-Collins is the first candidate to announce her intention to seek the Democratic nomination for AG in 2019.
  • As previously reported, state Treasurer Lynn Fitch and state Representative Mark Baker have already declared their intention to seek the Republican nomination for AG in 2019.

Consumer Protection

Arizona Attorney General Settles with Website Design Company for Allegedly Misleading Consumers

  • Arizona AG Mark Brnovich reached a settlement with website design company Alternative Online Design LLC and certain company officers (collectively, “AOD”) to resolve allegations that they made misleading statements to consumers in violation of the state’s Consumer Fraud Act and Telephone Solicitations Act.
  • According to the AG’s office, AOD allegedly misrepresented that consumers who purchased its work from home opportunities and advertising services could make thousands of dollars each month in commissions through the websites when, in fact, the AG’s office allegedly could not identify any consumers who earned enough through one of its websites to recoup the purchase price of AOD’s services.
  • According to the consent decree, AOD will pay $410,000 in penalties to the AG’s office and $205,000 in restitution to consumers, potentially may pay up to $60,000 in additional restitution awards, and is enjoined for 20 years from operating or conducting similar sales activities in the state.

Health Care

California Attorney General Urges Insurance Providers to Improve Access to Opioid Abuse Treatment

  • California AG Xavier Becerra sent a letter to health insurance executives urging them to improve access to medication-assisted treatment (“MAT”) for individuals with opioid abuse disorder.
  • In the letter, AG Becerra contends that MAT—one form of treatment for substance abuse disorder—has greatly improved health outcomes for individuals with opioid abuse disorder and that private health insurance requirements for prior authorization are “burdensome” and prevent more people from accessing this treatment option.
  • AG Becerra requests that health insurance executives remove prior authorization requirements for MAT and, if they already have, to notify his office that they have done so.

Texas Attorney General Settles with Document Management Systems Company Over Alleged Medicaid Fraud

  • Texas AG Ken Paxton reached a settlement with Xerox Corporation and several of its former subsidiaries (collectively, “Xerox”) to resolve allegations that it improperly processed orthodontic service requests in violation of the state’s Medicaid Fraud Prevention Act.
  • According to the settlement agreement, Xerox, which had contracted with Texas to provide administrative and claims processing services to the state healthcare agency, allegedly failed to implement an adequate prior authorization process to determine the medical necessity of orthodontic services, allegedly causing overpayments to Medicaid for unnecessary or unqualified orthodontic services, among other things.
  • Under the terms of the settlement agreement, Xerox must pay over $212 million in reimbursements to the state and nearly $24 million in fees and costs.

Labor & Employment

Washington Attorney General Reaches Agreements with Seven Franchisors to Eliminate “No-Poach” Provisions in Franchise Contracts

  • Washington AG Bob Ferguson reached agreements with franchisors Einstein Bros. Bagels, Express Services, Inc. d/b/a Express Employment Professionals, FASTSIGNS International, Inc., L&L Franchise Inc., The Maids International, Inc., Westside Pizza International, Inc., and Zeek’s Restaurants, Inc. to eliminate “no-poach” provisions in their franchise contracts.
  • According to the AG’s office, the franchisors utilized provisions in their contracts with franchise owners that prohibited employees from moving among stores within the same corporate chain.
  • According to the AG’s office, each of the franchisors signed a legally binding commitment to cease enforcing the no-poach provisions currently in their franchise contracts and to remove such provisions from current and future franchise contracts.
  • As previously reported, AG Ferguson reached similar agreements with franchisors in November 2018, filed a lawsuit against a fast food franchisor in October 2018 over its alleged use of no-poach provisions, and reached settlements with fast food franchisors in July 2018August 2018, and September 2018  to resolve investigations regarding their uses of no-poach provisions.


California Attorney General Announces Bill Prohibiting Agreements Between Drug Companies That Allegedly Inflate Drug Prices

  • California AG Xavier Becerra announced the introduction of a bill that would prohibit certain agreements between pharmaceutical companies that allegedly block generic competitors from providing lower-cost pharmaceuticals and leave consumers paying much higher prices for their prescriptions.
  • The bill, AB 824, would prohibit reverse-payment agreements (a/k/a “pay-for-delay” agreements), in which a pharmaceutical brand company agrees to settle its patent infringement claim against a competing generic pharmaceutical company in exchange for the delay of research, marketing, or sale of a competing version of a drug.
  • The bill had its first reading and is pending referral to an Assembly committee.

State v. Federal

16 Democratic Attorneys General Sue Trump Administration Over Declaration of National Emergency

  • 16 Democratic AGs, led by California AG Xavier Becerra, filed a lawsuit against President Trump, the U.S. Department of Defense, the U.S. Department of Treasury, the U.S. Department of the Interior, and the U.S. Department of Homeland Security alleging that the President’s declaration of a national emergency to divert federal funds toward construction of a wall along the U.S.-Mexico border violates the constitutional separation of powers, the U.S. Constitution’s appropriations clause, the National Environmental Policy Act (“NEPA”), and the Administrative Procedures Act (“APA”).
  • According to the complaint, the declaration is allegedly unsupported because there is no evidence that there is an immigration enforcement crisis or invasion at the southern border or that a border wall will decrease crime rates or drug smuggling, and the statutory criteria for diverting funding toward construction of a border wall are not met.
  • The complaint seeks a judicial declaration that diverting federal funds toward construction of a border wall is unconstitutional, and permanent injunctions against diverting federal funding or constructing a border wall without Congressional appropriation.