The State AG Report Weekly Update January 12, 2017


West Virginia Attorney General Files Antitrust Lawsuit Against Asphalt and Paving Companies

  • West Virginia AG Patrick Morrisey and the West Virginia Department of Transportation filed a lawsuit against 11 asphalt and paving companies for allegedly violating the state’s Antitrust Act.
  • According to AG Morrisey, the businesses allegedly hindered competition by driving out competitors and increasing asphalt prices through acquisitions and non-compete agreements.
  • The lawsuit seeks maximum fines and a judgment for three times the state’s damages, among other things.

Consumer Financial Protection Bureau

Four Attorneys General File Memo to Support Modified Settlement Terms of CFPB Enforcement Action

  • Four AGs filed a memorandum for a motion to intervene in a settlement between the Consumer Financial Protection Bureau (“CFPB”) and Sprint Corporation in the U.S. District Court for the Southern District of New York.
  • In the memorandum, the AGs assert that without changes to the June 2015 final judgment, approximately $14 million of the money set aside for consumer refunds would be deposited to the U.S. Treasury as disgorgement, rather than for consumer protection purposes as set out by the stipulated judgment. The AGs state that neither the CFPB nor Sprint object to the changes.
  • As we previously reported, the settlement between Sprint and the CFPB followed an AG, CFPB, and Federal Communications Commission (“FCC”) lawsuit against Sprint for allegedly adding unauthorized charges to consumers’ phone bills – a practice commonly known as “cramming.”

CFPB Issues Order Against Law Firms for Alleged Misrepresentations of Attorney Involvement in Debt Collection

  • The CFPB issued an order against medical debt collection law firms Works and Lentz, Inc., Works and Lentz of Tulsa, Inc., and their president (collectively “Works and Lentz”) for allegedly violating the Fair Debt Collection Practices Act and the Fair Credit Reporting Act by sending collection letters with misrepresentations.
  • According to the CFPB, Works and Lentz allegedly sent collection letters claiming to have been sent from an attorney when, in fact, no attorney had reviewed the accounts; called consumers implying a lawyer was involved in the collection; fabricated notarization of affidavits in collection lawsuits; and provided inaccurate credit reporting information.
  • Under the terms of the CFPB’s consent order, Works and Lentz must pay $577,135 in restitution to consumers and a civil penalty of $78,800, among other things.

Consumer Protection

District of Columbia Attorney General Settles with Lender for Alleged Predatory Lending

  • District of Columbia AG Karl Racine reached a settlement with CashCall, Inc., its subsidiary WS Funding, LLC, and its owner (collectively “CashCall”) for allegedly violating the District’s Consumer Protection Procedures Act and Debt Collection Law by charging consumers exorbitant interest rates.
  • According to AG Racine, CashCall allegedly made, serviced, and collected on high-cost loans with interest rates exceeding the maximum amount allowed by law and also failed to obtain a Money Lender’s License.
  • Under the terms of the consent order, CashCall must return approximately $1.86 million to District consumers, forgive remaining debts on existing loans, and among other things, pay $100,000 in penalties and costs. This settlement is the latest in a string of actions taken against CashCall by other AGs over allegations that the company violated state lending laws.

Ohio Attorney General Sues Telemarketing Groups for Allegedly Misleading Consumers

  • Ohio AG Mike DeWine filed a lawsuit against Buckeye Impact Group LLC and Premier Design Group LLC for allegedly violating Ohio’s Consumer Sales Practices Act and state and federal telemarketing laws by misleading consumers and failing to provide them with promised services.
  • According to AG DeWine, Buckeye Impact Group and Premier Design Group offered personalized websites and marketing products allowing consumers to work from home while generating between $1,000 and $1,500 as an Amazon affiliate. However, upon receiving payment from consumers, the company sold websites with difficult-to-locate addresses that provided none of the promised returns to consumers. The companies also allegedly solicited consumers on the National Do Not Call Registry.
  • The lawsuit seeks a permanent injunction and reimbursement for consumers affected by the companies’ misrepresentations.


24 Attorneys General Pen Letter Supporting Nomination of Oklahoma Attorney General for EPA Administrator

  • 24 AGs sent a letter to U.S. Senators John Barrasso and Tom Carper, Chairman and Ranking Member, respectively, of the U. S. Senate Committee on Environment and Public Works expressing their “unqualified support” for President-elect Trump’s nomination of Oklahoma AG Scott Pruitt as Administrator of the U.S. Environmental Protection Agency (“EPA”) and urging the U.S. Senate to confirm his nomination.
  • According to the letter, AG Pruitt is “committed to clean air and clean water, and to faithfully executing the environmental laws written by Congress.” AG Pruitt’s confirmation hearing before the Committee is currently scheduled for January 18, 2017 at 10 AM.
  • As we previously reported, AG Pruitt was selected to serve as EPA Administrator by President-elect Trump in December 2016.


West Virginia Attorney General Sues Pharmacy for Alleged Failure to Detect Suspicious Prescriptions

  • West Virginia AG Patrick Morrisey filed a lawsuit against Crab Orchard Pharmacy, Inc. for allegedly engaging in unfair methods of competition by failing to detect and report an influx of suspicious drug prescriptions in violation of the state’s consumer protection laws.
  • According to AG Morrisey, Crab Orchard Pharmacy allegedly filled 4.6 million doses of opioids within seven years without implementing anti-diversion controls, such as monitoring programs, that would end illegal drug sales despite the company’s alleged awareness of the problem.
  • The lawsuit seeks an injunction, civil penalties, and punitive damages, among other things. As we previously reported, AG Morrisey has reached similar settlements with prescription drug wholesalers and pharmacies in the past year.

State AGs in the News

Four Former California Attorneys General and 38 Members of Congress Pen Letters Urging Confirmation of California Representative

  • Four former California AGs, including John Van De Kamp, Dan Lungren, William Lockyer, and U.S. Senator Kamala Harris, and 38 members of Congress submitted letters in support of U.S. Congressman Xavier Becerra’s nomination to be California’s next AG.
  • The AGs’ letters to the California State Assembly support the confirmation of Congressman Becerra as AG. Former AG John Van de Kamp described Becerra as “hardworking, principled, thoughtful, a man of real civility who has the potential of getting the office behind him, and in so doing, serving very effectively at a time when California needs a strong and effective Attorney General.”
  • As we previously reported, Kathleen “Kate” Kenealy is currently serving as California’s Acting Attorney General until the state legislature confirms Congressman Becerra to the state’s AG position.