Digest 3.22.2018 The State AG Report Weekly Update

2018 AG Elections

Democrat Kwame Raoul and Republican Erika Harold Win Illinois AG Primary Races

  • Democratic State Senator Kwame Raoul defeated seven opponents, including former Illinois Governor Pat Quinn, to win the Democratic nomination for AG.
  • Republican attorney Erika Harold defeated opponent Gary Grasso to win the Republican nomination for AG.
  • The general election is on November 6, 2018. Incumbent AG Lisa Madigan did not seek a fifth term.
  • For up-to-date information on the Illinois AG election, as well as the additional 30 AG elections in 2018, and to receive AG primary and general election night updates via text message and/or email, please visit

Consumer Protection

Arizona Attorney General Settles with Flooring Company Over Allegedly Illegal Telemarketing

  • Arizona AG Mark Brnovich reached a settlement with flooring company Adobe Carpet Cleaning, LLC (“ACC”) over alleged violations of telemarketing regulations.
  • According to AG Brnovich, ACC allegedly contacted consumers registered on the Federal Trade Commission’s “Do Not Call” Registry to sell carpet, upholstery, and tile cleaning services throughout the state.
  • Under the terms of the settlement, ACC will pay $1 million in civil penalties and is banned from making telemarketing calls for six years.

New York Attorney General Reaches Settlement with Online Lingerie Retailer Over Allegedly Deceptive Marketing

  • New York AG Eric Schneiderman settled with AdoreMe Inc., an online lingerie retailer offering memberships providing discounts in exchange for monthly purchases, over allegedly deceptive marketing practices in violation of state consumer protection laws.
  • According to the AG’s office, AdoreMe allegedly failed to adequately disclose the terms and conditions of its monthly fee-based membership program, improperly retained store credits owed to consumers after membership cancellation, and did not adequately respond to consumer requests for membership cancellation, among other things.
  • Under the terms of the settlement, AdoreMe will pay $300,000 in penalties, fees, and costs, and up to $63,000 in restitution to consumers.
  • The Federal Trade Commission reached a separate settlement with AdoreMe over similar allegations, requiring AdoreMe to pay over $1.3 million in restitution to consumers, among other things.

Data Privacy

South Dakota Enacts Data Breach Notification Law

  • Data breach notification legislation introduced by South Dakota AG Marty Jackley has been passed by the state legislature and signed into law by Governor Dennis Daugaard.
  • Under the new law, failure to inform South Dakota residents affected by a data breach or failure to inform the AG of a data breach affecting more than 250 South Dakota residents is a deceptive act under South Dakota consumer protection laws.
  • South Dakota is the 49th state to enact a data breach notification law; the only remaining state without such a law is Alabama.


Alabama Attorney General Settles with Pipeline Company Over Alleged Gasoline Spillage

  • Alabama AG Steve Marshall and the Alabama Department of Environmental Management settled with Colonial Pipeline Company (“Colonial”) over environmental damage allegedly caused by ruptures in Colonial’s gasoline pipelines.
  • According to the AG’s office, a series of incidents in 2016 allegedly led to a combined 11,800 barrels of gasoline spilling from Colonial pipelines, causing damage to land and water resources, including the Cahaba River Wildlife Management Area.
  • Under the terms of the settlement, Colonial will pay $3.3 million to the state, including $1.3 million in civil penalties, $1.8 million in projects to benefit the State of Alabama, and $200,000 in restitution to the Alabama Department of Conservation and Natural Resources for damage to the Cahaba River wildlife area, and will complete the cleanup of gasoline released into the soil and waters of the state.

Financial Industry

New York Attorney General Announces Settlement with Bank Over Sales of Mortgage Securities

  • New York AG Schneiderman reached a settlement with Swiss global financial services company UBS AG over alleged deceptive practices and misrepresentations in the issuance, marketing, and sale of residential mortgage-backed securities (“RMBS”) to investors.
  • According to the AG’s office, between 2005 and 2007, UBS AG allegedly knowingly sold investors RMBS backed by mortgage loans that did not comply with underwriting guidelines, causing loan pools backed by these securitizations to suffer significant losses and other harmful effects, which contributed to the crash in home values during the financial crisis.
  • Under the terms of the settlement, UBS AG will pay $230 million: $41 million to the State of New York and $189 million in relief for homeowners and communities.
  • As previously reported, AG Schneiderman has settled with RBS Financial Services, Inc., Goldman Sachs, and Morgan Stanley, among other financial services companies, over similar allegations of improper RMBS practices leading up to the housing crash.


Massachusetts Attorney General Settles with Pharmacy Chain Over Allegedly Overcharging for Prescription Medications

  • Massachusetts AG Maura Healey reached a settlement with Walgreens Boots Alliance, Inc. (“Walgreens”) for allegedly overcharging for prescription medications in violation of state consumer protection laws.
  • According to the AG’s office, from 2008 to 2017, Walgreens allegedly overcharged state employees for certain prescription medications that are supposed to be covered by the state workers’ compensation insurance system.
  • Under the terms of the settlement, Walgreens will pay $5.5 million to the State of Massachusetts, implement procedures to prevent future overcharges, and submit future sales to state audit.

State AGs in the News

Russell Suzuki Appointed Hawaii Attorney General

  • Acting Hawaii AG Russell Suzuki has been appointed to serve as AG by Governor David Ige. The appointment is subject to confirmation by the state Senate.
  • Prior to serving as acting AG, Suzuki served in various positions within the Hawaii Department of Attorney General over the last 36 years, including as First Deputy AG under three AGs.
  • As previously reported, former AG Doug Chin resigned in February 2018 to serve as Lieutenant Governor after that position became vacant.  Former AG Chin is continuing his previously reported campaign to represent Hawaii’s 1st congressional district in the U.S. House of Representatives.

State v. Federal

20 Republican Attorneys General Settle with Federal Agencies to Revise Federal Endangered Species Rules

  • A coalition of 20 Republican AGs, led by Alabama AG Marshall and Arkansas AG Leslie Rutledge, settled a lawsuit against the National Marine Fisheries Service, the U.S. Fish and Wildlife Service, the Secretary of Commerce, and the Secretary of the Interior (collectively, “Services”), challenging federal “critical habitat” regulations.
  • According to the AGs’ complaint, the Services promulgated Final Rules under the Endangered Species Act (“ESA”) in 2016 that allegedly violate the ESA and the Administrative Procedure Act by granting the Services overly broad power to designate state lands as “critical habitats” for endangered or threatened species.
  • The AGs voluntarily dismissed their complaint after the Services agreed to submit revised rules for public review within 60 days.

Bipartisan Coalition of 30 Attorneys General Pens Letter to Congressional Leaders Opposing Legislation Blocking States from Regulating Student Loan Industry

  • A bipartisan coalition of 30 state AGs, led by New York AG Schneiderman, sent a letter to U.S. House of Representatives leadership opposing provisions of the proposed Promoting Real Opportunity, Success, and Prosperity through Education Reform (“PROSPER”) Act, H.R. 4508, which would preempt state laws regulating student loan originators, servicers, or debt collectors.
  • According to the letter, the PROSPER Act would prohibit states from overseeing, licensing, or otherwise enforcing state laws against companies that originate, service, or collect on student loans, which the AGs contend interferes with states’ consumer protection authority and inappropriately leaves the U.S. Department of Education as the sole enforcer of consumer protection laws involving such companies.
  • The PROSPER Act was voted out of committee in December 2017 and is awaiting consideration by the House of Representatives.

Bipartisan Coalition of 32 Attorneys General Pens Letter to Congressional Leaders Opposing Legislation Preempting State Data Breach and Security Laws

  • A bipartisan coalition of 32 state AGs, led by Illinois AG Lisa Madigan, sent a letter to U.S. House of Representatives leadership opposing the proposed Data Acquisition and Technology Accountability and Security Act, which would implement nationwide data security and data breach notification standards and federal enforcement mechanisms.
  • According to the letter, the AGs contend the legislation would “totally preempt” all state data breach and data security laws, including laws that require notice to consumers and AGs following a data breach, and would alter current federal requirements to provide less transparency and protection for consumers.
  • The legislation is currently pending before the Financial Institutions and Consumer Credit Subcommittee of the House Committee on Financial Services.