Digest 1.18.2018 The State AG Report Weekly Update

AG Elections

Democrat LaKresha Roberts Declares Candidacy for Delaware AG

  • Democrat LaKresha Roberts, former Chief Deputy AG in the Delaware AG’s office, announced her bid for Delaware AG in 2018.
  • Roberts recently stepped down from her position as Chief Deputy AG to prepare for her campaign. Prior to serving as Chief Deputy AG, Roberts was the Director of the Delaware Department of Justice’s Family Division and previously served as a Deputy AG.
  • Roberts joins fellow Democrats Kathy Jennings and Tim Mullaney Sr. in seeking her party’s nomination for AG. Thomas Neuberger is the sole Republican to announce his candidacy.
  • As previously reported, incumbent AG Matt Denn, a Democrat, has announced that he will not seek re-election to a second term.

Democrat Sean Shaw Declares Candidacy for Florida AG

  • Democrat Sean Shaw, state Representative for Florida’s 61st District, announced his bid for Florida AG in 2018.
  • Shaw was first elected in 2016 to the state House of Representatives and previously served as Florida’s Insurance Consumer Advocate.
  • Shaw joins fellow Democrat Ryan Torrens in seeking his party’s nomination for AG. Jay Fant, Ashley Moody, Ross Spano, and Frank White have announced their candidacy for the Republican nomination.
  • Incumbent Pam Bondi is term-limited and cannot seek reelection.

Gurbir Grewal Confirmed as New Jersey AG

  • On January 16, Democrat Gurbir Grewal was unanimously confirmed by the New Jersey state Senate (29-0) as AG after being named by Governor Phil Murphy, a Democrat.
  • As previously reported, AG Grewal most recently served as Bergen County prosecutor, a position he held since 2013. He had been the County’s acting prosecutor since 2010. Prior to serving as Bergen County’s top law enforcement official, he was chief of the Economic Crimes Unit at the U.S. Attorney’s Office for the District of New Jersey.

False Claims Act

California AG Reaches Settlement with Energy Company to Resolve Natural Gas Pricing Whistleblower Allegations

  • California AG Xavier Becerra announced a settlement with BP Energy Company and its affiliate entities (“BP”) to resolve whistleblower allegations that they intentionally overcharged the state for natural gas in violation of the California False Claims Act.
  • According to AG Becerra’s announcement, California had alleged that BP knowingly quoted and charged prices for natural gas to the state’s Department of General Services at levels exceeding contractual caps and concealed its overpricing through false and misleading information.
  • Under the terms of the settlement agreement, BP will pay a combined $102 million to the state and to the whistleblower.

Consumer Protection

Outgoing New Jersey AG Reaches Settlement with Auto Parts Chain to Resolve Merchandise Pricing Allegations

  • Outgoing New Jersey AG Christopher Porrino announced a settlement prior to leaving office with auto parts chain Manny, Moe & Jack of Delaware, Inc. (d/b/a “Pep Boys”) to resolve allegations that the company violated the New Jersey Consumer Fraud Act, the New Jersey Weights and Measures Act, and New Jersey’s Regulations Governing Automotive Repairs by overcharging consumers for auto parts and related services.
  • According to former AG Porrino, Pep Boys allegedly sold consumer products at prices in excess of displayed prices, performed unnecessary vehicle repairs, and overcharged for vehicle repairs, among other statutory violations.
  • Under the terms of the consent judgment, Pep Boys will pay $80,000 to the state, including $60,000 in civil penalties, approximately $2,500 in consumer restitution, and approximately $17,500 in attorney’s fees and investigative costs.

State AGs in the News

19 AGs Urge Congress to Enact Safe Harbor Rule Allowing Banks to Serve the Cannabis Industry Without Federal Civil or Criminal Penalties

  • A bipartisan group of AGs, representing 18 States and the District of Columbia, sent a letter urging Congressional leaders to enact legislation intended to integrate the cannabis industry into the banking system in jurisdictions that have legalized medicinal and recreational cannabis use.
  • According to the AGs, many financial institutions are reluctant to provide services to state-licensed cannabis businesses due to the risk of criminal and civil liability under current federal law, including the Controlled Substance Act and federal banking laws. The AGs assert that this threat of federal enforcement compels many cannabis businesses to operate on a cash basis, which impacts businesses’ operations, tax compliance, and safety and also hinders law enforcement and regulatory oversight.
  • The letter requests that Congress implement laws such as the proposed SAFE Banking Act (S. 1152 and H.R. 2215), which would provide a safe harbor for banks that serve businesses in states that have legalized marijuana, claiming that such legislation will bring billions of dollars of additional transactions into the banking sector, simplify cannabis-related regulatory compliance and law enforcement monitoring, and increase tax revenue from the legalized cannabis industry.

19 AGs and State Agencies Urge FERC to Investigate Utility Rates Following Reduction of the Federal Corporate Tax Rate

  • A bipartisan group of 12 AGs and 7 state agencies and consumer advocates sent a letter to the Federal Energy Regulatory Commission (“FERC”) urging it to investigate the impact of recent federal tax legislation on public utilities and utility customers’ rates.
  • According to the letter, without action by FERC to adjust customers’ utility rates, the federal corporate tax rate reductions are likely to generate an inappropriate “windfall” benefitting federally-regulated utility companies.
  • The AGs, state agencies, and consumer advocates request that FERC investigate current utility rates and amounts being held in reserve by utilities for future tax liabilities and adjust the formulae on which rates are based to account for the federal corporate tax rate reduction.

State v. Federal

22 AGs File Suit Against FCC Over Net Neutrality

  • 22 AGs, led by New York AG Eric Schneiderman, filed a petition in the U.S. Court of Appeals for the D.C. Circuit against the Federal Communications Commission (“FCC”), seeking judicial review of the FCC’s recent order that repealed the agency’s 2015 net neutrality rule (“Order”)—a rule intended to prevent internet service providers from imposing content-based restrictions or pricing on internet traffic—on the grounds that the Order was arbitrary, capricious, an abuse of discretion, and otherwise violates federal law.
  • According to the AGs, the FCC rollback of net neutrality threatens consumers and businesses who rely on free and open internet access and allows internet service providers to selectively block or slow access to internet content and charge consumers more to access certain sites.
  • The AGs’ petition requests the D.C. Circuit grant a declaratory ruling holding that the Order is unlawful, vacate the Order, and enjoin enforcement of the Order.