Election News

The State AG Report Weekly Update September 28, 2017

AG Elections

Democrat Peter Neronha Declares Candidacy for Rhode Island Attorney General

  • Democrat Peter Neronha formally announced his bid to become Rhode Island AG in 2018. Neronha served as U.S. Attorney for the District of Rhode Island from 2010 until 2017 and was an Assistant U.S. Attorney from 2001 until 2010.
  • Neronha is the first candidate—Republican or Democrat—to join the open AG race.
  • Democratic incumbent AG Peter Kilmartin, who is serving his second term, is term-limited and unable to run for a third term.

Republican Lance Russell Announces Bid for South Dakota Attorney General

  • Republican state Senator Lance Russell formally declared his candidacy to become South Dakota AG in 2018. Russell currently serves as state Senator and previously served as a state Representative and as the Fall River and Shannon County State Attorney.
  • Russell joins three Republicans—Lawrence County State Attorney John Fitzgerald, South Dakota Deputy AG Charlie McGuigan, and Union County Deputy State Attorney Jason Ravnsborg—in vying for the Republican nomination.
  • Republican incumbent AG Marty Jackley, who is term-limited in 2018, is currently running for the Republican nomination to become Governor of South Dakota.

Consumer Financial Protection Bureau

CFPB Finalizes Rule Revising Mortgage Lender Data Collection Compliance Obligations

  • The Consumer Financial Protection Bureau (“CFPB”) finalized a rule amending Regulation B of the Equal Credit Opportunity Act (“ECOA”), a federal civil rights law that prohibits discrimination in the marketplace, to provide “flexibility and clarity” regarding the responsibility of creditors to collect of information about the ethnicity, race, and sex of mortgage loan applicants seeking certain types of mortgage loans.
  • The final rule allows creditors to satisfy the race and ethnicity information requirements under Regulations B by permitting loan applicants to self-identify using the disaggregated race and ethnicity categories already required by the Home Mortgage Disclosure Act (“HMDA”), and it also phases out outdated model forms and adopts the updated forms required under HMDA for lenders to use in the collection of such data.

Consumer Protection

California Attorney General Settles with Sports Drink Company Over Allegedly Misleading Statements About Water

  • California AG Xavier Becerra reached a settlement with sports drink company Gatorade, Inc. (“Gatorade”) for allegedly violating state consumer protection laws when it made misleading statements about consuming water in a mobile phone “advergame,” a videogame designed to advertise a product.
  • According to the complaint, Gatorade allegedly negatively portrayed water as hindering athletic performance by slowing down the advergame avatar when it touched water, while positively portraying Gatorade as enhancing performance by increasing the avatar’s speed when it touched Gatorade.
  • Under the terms of the settlement, Gatorade is permanently enjoined from making similarly misleading advertisements and must pay $180,000 for the AG’s investigation costs and $120,000 for funding of grants to promote child nutrition and consumption of water.

Michigan Attorney General Files Class Action Lawsuit Against Fitness Gym Chain Over “Free” Memberships

  • Michigan AG Bill Schuette filed a class action lawsuit against fitness gym chain Family Fitness, Inc. and Apex Management SGR, LLC (collectively “Family Fitness”) for allegedly violating the state’s Consumer Protection Act.
  • According to the complaint, Family Fitness allegedly told consumers that participated in a drawing that they had won free gym memberships, but allegedly did not disclose that the free memberships included monthly costs and required a certain number of visits during the free trial to cancel membership, and also coerced customers with membership debts into new membership agreements in order to alleviate debt collections, among other things.
  • The lawsuit seeks, among other things, a permanent injunction prohibiting Family Fitness from engaging in further unlawful conduct, restitution and damages for consumers, and attorneys’ fees.

Health Care

Washington Attorney General Files Lawsuit Against Hospital for Allegedly Withholding Charity Care

  • Washington AG Bob Ferguson filed a lawsuit against Capital Medical Center for allegedly violating the state’s Consumer Protection Act and Charity Care Act by pressuring low-income patients to pay for treatment upfront without properly screening patients for charity care eligibility or providing notice of charity care availability.
  • According to the complaint, Capital Medical Center allegedly limited charity care to patients with urgent medical needs rather than all low-income patients, coerced payment from low-income outpatients by refusing to schedule appointments, called patients in advance of appointments to determine how they planned to pay for out-of-pocket costs, trained staff to “not offer financial assistance” or charity care, and employed aggressive collection tactics.
  • The lawsuit seeks a permanent injunction enjoining Capital Medical Center from engaging in further violations of the Consumer Protection Act and Charity Care Act, civil penalties of $2,000 per violation, restitution to affected consumers, and attorneys’ fees.