Digest 09.26.2019 The State AG Report Weekly Update


Bipartisan Coalition of 21 Attorneys General Pen Letter to Congress in Support of Cannabis Banking Bill

  • A bipartisan coalition of 21 AGs, led by District of Columbia AG Karl Racine, sent a letter to congressional leaders in support of the Strengthening the Tenth Amendment Through Entrusting States (“STATES”) Act, S.B. 1028/H.R. 2093, or similar legislation, to allow cannabis-related businesses access to the banking system.
  • According to the letter, current federal law prohibits financial institutions from providing financial services to cannabis-related businesses, forcing such companies to operate on a cash-only basis, which poses a serious threat to public safety and infringes on states’ rights, among other things.


California Attorney General Obtains Orders Against Charities to Cease and Desist Allegedly Deceptive Solicitations

  • California AG Xavier Becerra obtained administrative orders against charities Catholic Medical Mission Board, Inc., Food for the Poor, Inc., and MAP International over allegedly deceptive solicitation tactics in violation of state charities laws.
  • According to the AG’s office, the charities allegedly implied that up to 99 percent of cash donations went to charitable purposes but in actuality used up to 40 percent of such donations for administrative and fundraising costs, and it also inflated revenue by valuing gift-in-kind drug donations at U.S. market prices rather than prices in the destination market.
  • According to the AG’s office, an administrative law judge ordered the charities to cease and desist using such statements when soliciting donations and ordered payment of penalties totaling nearly $1.5 million.

Consumer Financial Protection Bureau

28 Attorneys General Submit Comment Regarding CFPB Proposed Debt Collection Practices Rule

  • 28 AGs, led by California AG Xavier Becerra, submitted a comment to the Consumer Financial Protection Bureau (“CFPB”) in response to the CFPB’s proposed rule regarding debt collection practices (“Debt Collection Practices Rule”).
  • In the comment, the AGs argue that the rule does not meet the CFPB’s statutory mandate under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 to protect consumers from abusive, deceptive, and unfair debt collection practices where it, among other things, does not address debt-collection abuses by first-party creditors and does not restrict the number of electronic communications that a debt collector may send.
  • The AGs urge the CFPB to revise the Debt Collection Practices Rule to implement more “meaningful” protections.

Consumer Protection

California Attorney General Settles with Nutrition Company Over Alleged Failure to Warn of Harmful Ingredients

  • California AG Xavier Becerra reached a settlement with nutrition company Grass Advantage, LLC d/b/a Amazing Grass, over allegations that it sold and distributed products without required warnings for products containing excessive levels of chemicals known to cause reproductive harm or cancer in violation of the state’s Proposition 65 law, Unfair Competition Law, and False Advertising Law.
  • According to the complaint, Amazing Grass allegedly sold thirteen nutritional supplement products containing levels of lead or cadmium above the legal threshold and failed to warn consumers of the presence of these ingredients and their potential to cause serious health effects.
  • Under the terms of the consent judgment, Amazing Grass must reduce the lead levels in its products, retain a food quality auditor, provide warnings for any products above the legal threshold, and pay $213,167 in penalties, among other things.

New York Attorney General Issues Cease and Desist Letters to “Ghost Gun” Sellers and Manufacturers

  • New York AG Letitia James issued cease and desist letters to 16 sellers of “ghost guns”—partially assembled guns that are sold with the parts needed to create a fully-operational firearm—in violation of the state assault weapon ban and consumer protection laws.
  • According to the letters, the sellers offered unfinished assault weapon components that required simple milling to manufacture an unregistered and unserialized assault weapon—which is illegal in New York—and failed to warn consumers that using these products as advertised could result in imprisonment and/or fines.
  • The letters order the sellers to cease and desist sale and advertisement of ghost guns in the states within 5 days of receipt, and preserve relevant records and data, among other things.
  • As previously reported, New Jersey AG Gurbir Grewal sued an online ghost gun retailer over similar allegations in March 2019.

FTC Settles with Organic Retailer Over Allegedly Deceptive Advertising

  • The Federal Trade Commission (“FTC”) reached a settlement with Truly Organic Inc. and its founder (collectively, “Truly Organic”) over allegations that it deceptively marketed products as organic and vegan in violation of the FTC Act.
  • According to the complaint, Truly Organic allegedly marketed bath, beauty, and other products as organic that were neither 100% organic nor certified as organic by the U.S. Department of Agriculture (“USDA”), and advertised products as vegan that contained non-vegan ingredients through its own website and social media accounts and through third-party websites, among other things.
  • Under the terms of the stipulated order, Truly Organic is enjoined from making false, unsubstantiated, or misleading claims and must pay a judgment of over $1.7 million, among other things.

Labor & Employment

 Washington Attorney General Reaches Agreements with Ten More Franchisors to Eliminate “No-Poach” Provisions

  • Washington AG Bob Ferguson reached agreements with franchisors Abbey Carpet Co., Inc., Gosh Enterprises, Inc., Floors to Go, LLC, G & S Frugals, Inc., Gold’s Gym Franchising LLC, KF Tea Franchising LLC, Mattress Depot USA, Inc., Mrs. Fields Franchising, LLC, Tan Republic Franchise Company LLC, and TCBY Systems, LLC to eliminate “no-poach” provisions in their franchise contracts.
  • According to the AG’s office, the franchisors incorporated provisions in their contracts with franchise owners that prohibited employees from moving among stores within the same corporate chain.
  • Each of the franchisors signed an assurance of discontinuance requiring that they cease enforcing the no-poach provisions currently in their franchise contracts and remove such provisions from current and future franchise contracts.
  • As previously reported, AG Ferguson has reached settlements and agreements with a large number of other franchisors in various industries over the last two years regarding the use of no-poach provisions.