Digest 6.7.2018 The State AG Report Weekly Update

Cozen in the News

Cozen O’Connor’s State Attorneys General Practice Analyzes Impact of Supreme Court’s Recent Decision to Strike Down the Professional and Amateur Sports Protection Act

  • State Attorneys General Practice Member Bryan Mosca and Law Clerk Mark Quist have analyzed the impact for the sports betting, gaming, and other industries of the U.S. Supreme Court’s May 14 decision striking down the federal Professional and Amateur Sports Protection Act (“PASPA”).
  • Prior to the Supreme Court’s decision in Murphy v. National Collegiate Athletic Association, 584 U.S. ___ (2018), PASPA prohibited most states from authorizing state-sanctioned sports betting.
  • The analysis, published in the New Jersey Law Journal, discusses the likely post-PASPA legislative, regulatory, and business landscape, including identifying states that are likely to begin authorizing sports betting, legislative, and regulatory hurdles that businesses may face in seeking to enter the sports betting industry, and the potential legal implications of the Supreme Court’s decision for other emerging state and federal disputes.

2018 AG Elections

California, Iowa, and New Mexico Primaries Confirm Nominations of 2018 Major Party Candidates as Alabama Republicans Set Runoff Election to Determine Their 2018 Attorney General Candidate

  • Alabama, California, Iowa, and New Mexico held primary elections on June 5, 2018 and will hold general elections on November 6, 2018.
  • In Alabama, Republican incumbent AG Steve Marshall, who was appointed in 2017 by Governor Robert Bentley following former AG Luther Strange’s appointment to the U.S. Senate, will face former AG Troy King in a runoff Republican primary on July 17 following a closely-contested four-candidate primary that failed to yield a winner. The winner of the Republican runoff will face the winner of the Democratic primary, Joseph Siegelman, a Birmingham attorney and son of former Alabama Governor Don Siegelman, in the general election.
  • In California, Democratic incumbent AG Xavier Becerra, who was appointed in 2016 by Governor Jerry Brown following former AG Kamala Harris’s election to the U.S. Senate, and Republican Steven Bailey, a former California Superior Court Judge, were the top two vote getters in California’s nonpartisan primary election. AG Becerra and Judge Bailey will face off in the general election.
  • In Iowa, nine-term incumbent Democratic AG Tom Miller ran unopposed in his party’s primary nomination and will run unopposed in the general election.
  • In New Mexico, incumbent Democratic AG Hector Balderas and Republican Michael Hendricks, an Albuquerque immigration attorney, secured their respective parties’ nominations unopposed and will face off in the general election.

Democratic Candidates Enter Minnesota’s 2018 Attorney General Race as Current Minnesota AG Withdraws Bid for Reelection and Announces 2018 Gubernatorial Campaign

  • Minnesota AG Lori Swanson, a Democrat and three-term incumbent who previously announced her intention to run for reelection in 2018, withdrew from the state AG race the day before the candidate filing deadline and entered the state’s open gubernatorial race.
  • Shortly after AG Swanson’s withdrawal, the Democratic-Farmer-Labor Party, Minnesota’s Democratic Party affiliate, confirmed its endorsement of progressive activist Matt Pelikan.
  • Pelikan will face off against four other Democrats in seeking his party’s nomination: U.S. Representative Keith Ellison, Deputy Chair of the Democratic National Committee; Tom Foley, a former Ramsey County Attorney; state Representative Debra Hilstrom, a prosecutor; and former state Commerce Commissioner Mike Rothman.
  • Former AG Mike Hatch, AG Swanson’s immediate predecessor, also filed to enter the AG race following AG Swanson’s withdrawal, but withdrew his candidacy the next day citing his approval of newly-announced Democratic candidates Foley, Hilstrom, and Rothman.
  • Former state Representative Doug Wardlow, a Republican, secured his party’s endorsement on June 3, 2018, and will face off against former state Senator Bob Lessard for the Republican nomination for AG.

Democrat Sean Maloney Announces Bid for New York Attorney General

  • U.S. Representative Sean Maloney, a Democrat, has announced his candidacy for New York AG in 2018.
  • Representative Maloney is in his third term in Congress. Prior to serving in Congress, he worked as an adviser to former New York Governors Eliot Spitzer and David Paterson and in the New York office of an international law firm.
  • Representative Maloney joins fellow Democrats Leecia Eve, Letitia James, and Zephyr Teachout in running for New York AG. Manny Alicandro, Thomas Humbach, and Keith Wofford are vying for the Republican nomination.
  • As previously reported, AG Barbara Underwood, a Democrat, does not intend to run in the open AG election. AG Underwood was appointed in May to serve out the remainder of former AG Eric Schneiderman’s term following his resisgnation amid allegations of abuse.

South Dakota Attorney General Loses Republican Gubernatorial Primary

  • South Dakota AG Marty Jackley lost his bid to become the Republican nominee for governor in a contested primary won by former Congresswoman Kristi Noem, who declined to seek reelection to a fourth term in the U.S. House of Representatives in 2016 in order to launch her 2018 South Dakota gubernatorial campaign.
  • As previously reported, AG Jackley is term-limited and will leave an open seat in the state’s 2018 AG race.
  • Two Democrats, Tatewin Means and Randy Seiler, and three Republicans, John Fitzgerald, Jason Ravnsborg, and Lance Russell, are vying for their parties’ nominations to replace AG Jackley.

Consumer Financial Protection Bureau

Coalition of 14 Democratic Attorneys General Pens Letter Urging Consumer Financial Protection Bureau to Retain Public Database of Consumer Complaints

  • A coalition of 14 Democratic AGs and the Executive Director of Hawaii’s Office of Consumer Protection, led by New York AG Underwood, wrote a letter to the Consumer Financial Protection Bureau (“CFPB”) in response to the agency’s March 2018 Request for Information (“RFI”) seeking comments and information to assist it in assessing potential changes to the CFPB’s practice of publishing consumer complaint information in its Consumer Complaint Database (“Complaint Database”).
  • In the RFI, the CFPB solicits comments, specific suggestions, and best practices related to its complaint reporting and publication practices. The RFI follows recent comments made by CFPB Acting Director Mick Mulvaney suggesting that the CFPB may consider terminating public access to the Complaint Database.
  • In their letter, the AGs urge the CFPB to retain the Complaint Database as a crucial state law enforcement tool, a means of enabling responsible companies to understand their customers and respond to consumer complaints, and a public resource for consumers seeking to make informed decisions.

Consumer Protection

Kansas Attorney General Reaches Settlement with Vehicle Warranty Provider Over Allegedly Illegal Telemarketing Practices

  • Kansas AG Derek Schmidt has reached a settlement with vehicle warranty provider National Auto Protection Corp. (“National Auto”) to resolve allegations that it violated the Kansas Consumer Protection Act and the Kansas No-Call Act by allegedly making unsolicited phone calls to Kansas residents on the Federal Trade Commission’s national Do Not Call Registry (“Do Not Call Registry”).
  • According to the AG’s office, National Auto employees or contractors allegedly made unsolicited phone calls to Kansas consumers on the Do Not Call Registry.
  • Under the terms of the consent judgment, National Auto is permanently enjoined from making unsolicited phone calls to consumers on the Do Not Call Registry, will comply with the Kansas Consumer Protection Act, and will pay $10,000 in investigative fees and penalties to the AG’s office.


Coalition of Eight Attorneys General and the California Air Resources Board Files Suit Against Environmental Protection Agency Over Enforcement of Landfill Regulations

  • A coalition of eight attorneys general and the California Air Resources Board, led by California AG Becerra, filed suit against the federal Environmental Protection Agency (“EPA”) over allegations that it has violated the Clean Air Act by declining to implement and enforce a landfill emissions regulation, the 2016 Emission Guidelines and Compliance Times for Municipal Solid Waste Landfills (“Emission Guidelines”).
  • According to the complaint, the Emission Guidelines, which are intended to regulate the emissions of various organic compounds and pollutants by requiring certain landfill owners and operators to monitor emissions levels and install control systems once relevant emissions exceed a certain threshold, began to take effect in October 2016, but the EPA has allegedly failed to enforce them, declined to respond to state-issued implementation plans, and declined to promulgate a federal implementation plan for non-responding states.
  • The complaint seeks a judicial declaration that the EPA’s failure or refusal to enforce the Emission Guidelines violates the Clean Air Act and requests mandatory injunctive relief, costs, expenses, and attorneys’ fees.

False Claims

North Carolina Attorney General Reaches Settlements with Home Care Provider and Dental Practice Over Allegedly Improper Medicaid Billing Practices

  • North Carolina AG Josh Stein reached a settlement with home care provider Atlanticare Home Care Agency and its owner (collectively, “Atlanticare”) and a second settlement with dental practice Brooke Stiles, D.D.S. (“Stiles”) to resolve allegations that they allegedly defrauded the state’s Medicaid program.
  • According to the AG’s office, Atlanticare allegedly allowed services to be performed by unqualified home care aides and produced false paperwork in response to requests for verification, and Stiles allegedly billed for services that were not medically necessary, lacked supporting documentation, or were performed in violation of Medicaid policy.
  • According to the AG’s announcements, Atlanticare and Stiles will return $325,000 and $100,000, respectively, to the state’s Medicaid program.

Texas Attorney General Reaches Settlements with Rehabilitation Therapy Providers Ending Litigation Over Alleged Conspiracy to Fraudulently Bill Medicaid

  • Texas AG Ken Paxton reached settlements with ten defendant rehabilitation therapy providers, Abraham Armani, Shahriar Raoufpour, Progressive Pediatric Therapy LLC (collectively “Armani”), DSM Healthcare Ventures and David Scott Mitchell (collectively “DSM”), Advanced Neurological Services, LLC, Advanced Neurological Services of Dallas, LLC, Cynthia L. Kidd, Joanie C. Powell (collectively “ANS”), and Grzegorz R. Matusiak (“Matusiak”) (collectively, the “defendants”), to resolve allegations that they violated the Texas Medicaid Fraud Prevention Act by allegedly conspiring to avoid repaying millions of dollars in overpayments for services provided to state Medicaid patients.
  • According to the AG’s office, the defendants allegedly misrepresented their relevant experience and job duties to justify excessive rates of Medicaid compensation, submitted false information in provider enrollment applications, made misrepresentations and false statements to justify the misclassification of numerous expenses, or otherwise took actions designed to obtain unauthorized Medicaid payments or benefits.
  • According to the settlements with Armani, DSM, ANS, and Matusiak, Armani, Mitchell, and Raoufpour are permanently banned from providing services to state Medicaid patients, Kidd and Powell are prohibited from owning, managing, or controlling entities that provide services to state Medicaid patients, and the defendants will pay a combined $15.2 million to the state.


Utah Attorney General Files Lawsuit Against Opioid Manufacturer Over Alleged Misrepresentation of Prescription Opioid Risks

  • Utah AG Sean Reyes filed a lawsuit against opioid manufacturer Purdue Pharma L.P., Purdue Pharma Inc., and The Purdue Frederick Company (collectively, “Purdue Pharma”) for allegedly violating Utah’s Consumer Sales Practices Act and committing common law torts through allegedly deceptive marketing practices intended to promote prescription opioids.
  • According to the complaint, Purdue Pharma allegedly misrepresented the risks of prescribing opioids to treat chronic pain, disseminated research and promulgated treatment guidelines intended to overstate the benefits and to downplay the risks of prescribing opioids, and made other misleading statements that minimized and obscured the magnitude of the risks associated with prescription opioids.
  • The complaint seeks a declaratory judgment, injunctive relief, abatement, compensatory and punitive damages, civil penalties, restitution, and disgorgement, as well as attorneys’ fees, court costs, and investigative costs.