Digest 2.15.2018 The State AG Report Weekly Update

Cozen in the News

Cozen O’Connor State Attorneys General Practice Co-Chairs Discuss Importance of 2018 Primary Races

  • Bernie Nash and Lori Kalani, Co-Chairs of Cozen O’Connor’s State Attorneys General Practice, discussed with the National Law Journal the array of hotly contested 2018 AG primaries and the potential impact of this year’s AG election cycle on corporate America in areas such as health care, consumer protection, and cybersecurity.
  • Nash and Kalani also highlight the launching of their practice’s State Attorney General Election Tracker, a unique tool to assist clients and practitioners with tracking current and future AG elections.
  • To read the full National Law Journal article, click here.

AG Elections

Democrat Joseph Siegelman Declares Candidacy for Alabama Attorney General

Democrat Charles Bailey Announces Candidacy for Georgia Attorney General

  • Democrat Charles Bailey, a former Senior Assistant District Attorney in the Fulton County District Attorney’s Office, declared his candidacy for Georgia AG in 2018.
  • Bailey recently stepped down from his position as Senior Assistant District Attorney in order to prepare for his campaign. Prior to serving in the Fulton County District Attorney’s Office, Bailey worked in private practice and on Democratic congressional and gubernatorial campaigns in the State of Georgia.
  • Bailey is the only Democrat to announce his candidacy in the 2018 Georgia AG race. Republican incumbent AG Chris Carr is the lone Republican candidate to have announced his candidacy.

Consumer Protection

Bipartisan Coalition of 16 Attorneys General File Amicus Brief Asking Court to Set Limits on Cy Pres Provisions in Class Action Settlements

  • A bipartisan coalition of 16 AGs led by Arizona AG Mark Brnovich filed an amicus brief in the Supreme Court of the United States in the matter of Frank v. Gaos, No- 17-691, asking the Court to grant certiorari and to resolve a growing circuit split regarding the proper use in class action settlements of cy pres provisions—settlement provisions that provide for the distribution of some or all settlement funds to similarly-situated entities such as charities, universities, and think tanks rather than directly to class members.
  • According to the brief, the increasing prevalence of cy pres settlement provisions and their inconsistent treatment by federal courts undermines AGs’ efforts to protect consumers from class action settlement abuse, and cy pres-only settlements—those which do not distribute any funds to class members—pose serious public policy concerns.
  • The AGs urge the Supreme Court to provide guidance regarding the permissible use of cy pres-only settlement provisions and the factors that federal courts should consider when deciding whether to approve such settlements.


Ohio Attorney General Files Lawsuit Against Chemical Company Over Chemical Pollution Allegations

  • Ohio AG Mike DeWine filed a lawsuit against chemical companies E.I. du Pont de Nemours and Co. and The Chemours Company (collectively, “DuPont”) for allegedly contaminating the air, water, and land surrounding an Ohio chemical plant with perfluorooctanoic acid (“PFOA”)—a toxic substance that had been used to make Teflon products—in violation of Ohio environmental laws.
  • According to the complaint, DuPont allegedly discharged PFOAs, which are associated with various potential health risks, from a facility along the Ohio River over the course of several decades and continued discharging the substance into the environment despite allegedly understanding many of the risks it posed.
  • The lawsuit seeks compensatory and punitive damages, restitution, the present and future costs associated with abating the PFOA contamination, declaratory relief, and attorney’s fees.

False Claims Act

Massachusetts Attorney General Reaches Settlement with Mental Health Center to Resolve False Billing Allegations

  • Massachusetts AG Maura Healey announced a settlement with South Bay Mental Health Center, Inc. (“SBMHC”) to resolve whistleblower allegations that it falsely billed the state’s Medicaid Program, MassHealth, for mental health care services in a manner that violated the Massachusetts False Claims Act and MassHealth regulations.
  • As previously reported, the AG’s office alleges that SBMHC and its co-defendants employed unlicensed, unqualified, and unsupervised staff and fraudulently billed the state for the mental health services provided by these staff members.
  • According to the AG’s announcement, SBMHC has agreed to pay a combined $4 million to MassHealth and to the whistleblower, to implement an internal compliance program, and to engage an outside auditor to conduct a yearly audit that will be reported to the AG.
  • Litigation remains ongoing against SBMHC’s co-defendants.

Financial Industry

Virginia Attorney General Reaches Settlement with Internet Lender to Resolve Licensing and Consumer Protection Allegations

  • Virginia AG Mark Herring reached a settlement with internet lender MoneyLion of Virginia LLC, an affiliate of MoneyLion, Inc. (collectively, “MoneyLion”), for allegedly failing to secure necessary licensure from Virginia’s Bureau of Financial Institutions and for committing unfair and deceptive practices in violation of the Virginia Consumer Protection Act.
  • The AG’s office alleges that MoneyLion falsely represented its authority to offer “closed-end” installment loans to consumers over the internet and charged illegal interest rates and check-processing fees.
  • According to the AG’s office, MoneyLion has agreed to refund over $350,000 in excessive interest payments to approximately 1,200 consumers, forego collection of over $2.3 million in illegal interest charges, and pay the AG’s office $30,000 in civil penalties, fees, and costs. The AG’s office also reports that the settlement includes a permanent injunction barring MoneyLion from misrepresenting its licensure status and the allowable interest rates and fees it can charge.