The State AG Report Weekly Update October 22, 2015

Consumer Protection

16 Attorneys General Urge CMS to Prohibit Binding Arbitration Clauses in Long-Term Care Facility Contracts

  • 16 AGs, led by Maryland AG Brian Frosh, submitted a comment letter to the Centers for Medicare and Medicaid Services (“CMS”) to express their opposition to pre-dispute arbitration clauses in long-term care facility contracts in response to the agencies request for feedback on the issue.
  • In the letter, the AGs urge CMS to prohibit pre-dispute arbitration clauses in long-term facility contracts because such agreements are often procedurally unfair, give consumers little bargaining power when disputes occur, and provide less accountability from the industry.
  • In support of their opposition to the arbitration clauses, the AGs point to a recent announcement by the Consumer Financial Protection Bureau that it will consider a possible rulemaking to ban such clauses in certain financial products.

Iowa Attorney General Settles with Financial Aid Resource Company for Alleged Deceptive Practices

  • Iowa AG Tom Miller reached a settlement with Global Financial Support, Inc., d/b/a Student Financial Resource Center (“SFRC”), and its owner, for sending allegedly misleading solicitations to Iowa residents in violation of Iowa’s Consumer Fraud Act.
  • According to the AG’s office, the company allegedly sent Iowa students mailings that, among other things, directed them to submit a form by a June “filing deadline” in order to apply for financial aid and charged a $65 “processing fee,” which was the sales price of an informational packet made up of allegedly generic and public information about grants and scholarships.
  • Under the terms of the Assurance of Discontinuance, SFRC and its owner will cease marketing to Iowa residents, pay refunds to those who request them, and pay the state $25,000.

Missouri Attorney General Sues Company for Third-Party No-Call Law Violations

  • Missouri AG Chris Koster filed a complaint against Charter Communications Inc. for allegedly violating state no-call and telemarketing laws, as well as the federal Telemarketing Sales Rule and Telephone Consumer Protection Act.
  • According to the complaint, the company allegedly engaged third-party telemarketers who made calls to consumers on state and/or federal do-not call lists to sell cable, telephone, and internet services and allegedly continued to make calls, sometimes several times a day, after consumers asked the company to stop.
  • The complaint seeks penalties and to stop the company from engaging in the allegedly unlawful activity.

Texas Attorney General Settles with Solar Firm for Alleged “Made In USA” Mislabeling

  • Texas AG Ken Paxton reached a settlement agreement with a now-bankrupt solar panel manufacturer, 1SolTech, Inc., to resolve allegations that the company misrepresented and mislabeled its solar panels in violation of the Texas Deceptive Trade Practices Act.
  • According to the complaint, filed by the AG’s office in September 2013, 1SolTech allegedly mislabeled some of its solar panels as “Made in the USA” when they were actually imported from China and misrepresented that the product met U.S. certification and testing standards.
  • Under the terms of the settlement, subject to court approval, 1SolTech has agreed to pay $5 million in civil penalties and $2.8 million in restitution to customers, subject to the company’s bankruptcy proceedings.


New York Attorney General and U.S. DOL Settle with Restaurant Owners for Alleged Wage and Hour Violations

  • New York AG Eric Schneiderman and the U.S. Department of Labor (“DOL”) reached settlements with three current Papa John’s International, Inc. franchisees and one former franchisee, who together owned nine restaurants, for alleged violations of state and federal wage and hour laws.
  • According to the AG’s office, the franchisees allegedly failed to pay minimum wage and overtime to employees, provide adequate uniforms, and pay uniform laundry allowances.
  • Under the settlements, the franchisees must collectively pay $469,355 in back wages and liquidated damages, institute complaint procedures, and submit quarterly compliance reports for three years.

State v. Federal

California Attorney General Sends Letter to Congress Opposing Immigration Legislation

  • California AG Kamala Harris sent a letter to United States Senators opposing the Stop Sanctuary Policies and Protect Americans Act, legislation proposed by Senator David Vitter (R- Louisiana), which would block some federal funds to cities that do not cooperate with federal immigration authorities.
  • In the letter, AG Harris expresses concerns that the legislation would potentially withhold federal funding from California law enforcement agencies who comply with the state Transparency and Responsibility Using State Tool Act (TRUST Act). Under the TRUST Act, California law enforcement agencies must analyze public safety risks before devoting local resources to detain an undocumented immigrant on behalf of the federal government.