Each week, Crowell & Moring’s State Attorneys General team highlights significant actions that State AG’s have taken. Here are this week’s updates.
March 15, 2021
Elder Fraud and Abuse
- California Attorney General Becerra announced a lawsuit against Brookdale Senior Living, Inc., the largest senior living operator in the U.S., for allegedly giving false information to the Centers for Medicare & Medicaid that they use to award “star ratings” to nursing facilities, fraudulently increasing its rating. The lawsuit also alleges that Brookdale ignored laws that protect patients’ safety when they are discharged from a nursing facility by failing to properly prepare patients for transfer or discharge.
- California Attorney General Becerra announced that the Office of Administrative Law approved additional regulations under the California Consumer Privacy Act that increase protections for those seeking to control the sale of their personal information. The new regulations ban “dark patterns” that may obscure or delay the process of opting out of the sale of personal information, such as confusing language or unnecessary steps. They also give businesses an optional blue Privacy Options icon.
- New Jersey Attorney General Grewal announced that the payroll manager for construction company UniMak, LLC was charged with demanding cash kickbacks from workers and failing to pay them for many hours of work. The manager entered a non-prosecution agreement under which it is required to pay $1 million to employees who did not receive earned wages.
March 16, 2021
Consumer Financial Protection Bureau
- The Consumer Financial Protection Bureau (“CFPB”) sued student loan debt relief company Student Loan Pro and its owner and manager for allegedly charging over $3.5 million in illegal upfront fees, violating the Telemarketing Sales Rule. The lawsuit seeks injunctive relief, consumer redress, disgorgement, and monetary penalties.
- Minnesota Attorney General Ellison announced a tentative agreement with Minnesota School of Business and Globe University, their owners, and the U.S. Department of Education that should provide almost 100% financial relief to former students who were defrauded by the schools between 2009 and 2015. The agreement includes forgiveness of $23.1 million in outstanding federal student loan debt and $15.6 million in annual compensation for those who were issued illegal loans at predatory interest rates or fraudulently enrolled in the “criminal justice” program that advertised careers as police or probation officers but actually provided no value towards those careers.
- Illinois Attorney General Raoul led a coalition of 17 attorneys general in sending a letter to Congress asking it to pass the Keeping All Students Safe Act, which forbids any school receiving federal funding from placing children in seclusion or using dangerous restraints.
- Texas Attorney General Paxton announced that under a bankruptcy plan, Griddy Energy will offer releases to about 24,000 former customers who owed $29.1 million for unpaid electric bills. Attorney General Paxton’s office previously sued the company for debiting large amounts from customer accounts after the February 2021 winter storm.
- New York Attorney General James led a coalition of 12 attorneys general and the City of New York in filing a Second Circuit petition for review, supporting the repeal of two Trump administration rules that undermine energy conservation standards for residential gas furnaces and commercial gas water heaters by delaying updated energy efficiency standards and “grandfathering” inefficient designs and technologies.
Federal Trade Commission
- A multistate working group of attorneys general, chaired by the California, Pennsylvania, and Wisconsin attorneys general, will report findings about the effects of pharmaceutical mergers to the Federal Trade Commission (“FTC”) as part of the FTC’s “Reimagining Pharmaceuticals Initiative,” whose goal is to update the U.S. and international approach to these mergers.
March 17, 2021
- California Attorney General Becerra filed motions to intervene in lawsuits challenging San Diego County’s certification of Environmental Impact Reports for the Otay Ranch. Attorney General Becerra is arguing that the reports do not sufficiently analyze the impact of increased wildfire risk from the projects.
- A coalition of 21 attorneys general is petitioning the Southern District of Texas to invalidate President Biden’s executive order canceling the Keystone XL pipeline project. The coalition is arguing that the president may not overturn permits granted by Congress, which has the power to regulate interstate and foreign commerce.
- A coalition of 21 attorneys general sent a letter to the S. Department of the Treasury, asking it to uphold states’ rights to cut taxes against the Biden administration’s American Rescue Plan Act, which prohibits states from using COVID-19 relief funds to offset reductions in net tax revenues.
March 18, 2021
- New Jersey Attorney General Grewal announced a settlement with ghost gun company U.S. Patriot Armory, which his office previously sued over its advertising and marketing of ghost guns to New Jersey residents. Under the consent judgment, the company has, among other things, agreed to stop advertising and selling these guns to New Jersey consumers and to pay $70,000.
- California Attorney General Becerra announced that the U.S. Department of Education will cancel student loan debt for about 72,000 student borrowers who were defrauded by predatory for-profit colleges such as Corinthian Colleges and ITT Technical Institute.
- Illinois Attorney General Raoul announced that his Know Before You Owe legislation was passed by the Illinois House of Representatives’ Higher Education Committee. The legislation, which is also pending in the Illinois Senate as Senate Bill 2291, is meant to ensure student loan borrowers have information about their eligibility for federal aid before they select more expensive private loans.
- The Senate confirmed California Attorney General Becerra as the U.S. Secretary of Health, making him the first Latino secretary of the U.S. Department of Health and Human Services. He has stepped down as Attorney General, naming Matthew Rodriquez as Acting Attorney General until the California Legislature confirms Governor Newsom’s nominee.
- Texas Attorney General Paxton filed a lawsuit against Everyoung Hospitality LLC, d/b/a La Quinta San Antonio Brook City Base, accusing the business of price gouging during the February 2021 winter storm by charging excessive prices for rooms, up to almost three times its typical rates.
March 19, 2021
- Massachusetts Attorney General Healey announced that real estate company ASAA, LLC and its manager entered a consent judgment with her office. Under the consent judgment, the defendants agreed to pay up to $55,000 to settle claims that they knowingly failed to report the release of hazardous materials and oil at a property they re-developed and that they neglected to help protect public health and safety in violation of Massachusetts law.
- Under a multistate agreement with New York, Massachusetts, and New Jersey, V.J. Associates Inc. and its affiliates must pay $1,875,000 for falsely inflating bills for its services on public-works projects in the three states. The company overbilled for hours that its employees spent on administrative tasks unrelated to the public-works projects, for hours worked on unrelated, fixed-fee projects, and for hours that were unnecessary and excessive.