Each week, Crowell & Moring’s State Attorneys General team highlights significant actions that State AGs have taken. Here are this week’s updates.
- A coalition of 18 state attorneys general sent a comment letter to the Federal Trade Commission asking it to adopt and bolster guidance on automobile sales. Specifically, the coalition is both applauding the FTC’s proposed updates to the Motor Vehicle Dealers Trade Regulation Rule which relate to dealerships’ automobile sales, financing, and leasing, as well as offering suggestions to strengthen the rule, such as by requiring written price disclosures and record retention.
- A bipartisan coalition of state attorneys general provided comments to the U.S. Department of Education in support of its proposed improvements to the 90/10 Rule, which bars for-profit schools from receiving over 90% of their revenue from federal student aid. Considered improvements to the rule include the elimination of financial incentives for schools to target military members. The coalition is also asking the Department to create stronger regulations to prohibit for-profit schools from improperly attaining nonprofit status.
- Arkansas Attorney General Rutledge announced a lawsuit against the owner of Tyler Pools & Construction for violating the Arkansas Deceptive Trade Practices Act by failing to complete pool construction projects for which consumers paid over $148,000 and by making false statements about having proper licensing. The lawsuit also alleges that the owner of the company was not registered to conduct business with the Arkansas Secretary of State.
- California Attorney General Bonta and Orange County District Attorney Spitzer announced that they have filed misdemeanor charges against Amplify Energy, Beta Operating Company, and San Pedro Bay Pipeline for an oil spill that occurred off the coast of Huntington Beach in October 2021. The announcement also states that as part of a plea agreement the companies will plead no contest to the charges, pay $4.9 million in fines and penalties, and be placed on a 12-month probation. Separately, they will pay a $7.1 million federal fine and reimburse federal agencies for spill-related expenses.
- California Attorney General Bonta issued a consumer alert about price gouging after a state of emergency was declared in several counties due to wildfires. Specifically, the alert reminds Californians that price gouging is illegal during a state of emergency and encourages consumers to report any instances of price gouging.
- Indiana Attorney General Rokita announced an agreement with PERA LLC, requiring it to cease solicitations to Indiana public employees. The agreement resolves a lawsuit that accused the company of sending over 70,000 deceptive email solicitations to state public employees, giving the impression that they came from the Indiana Public Retirement System (INPRS) or an approved INPRS provider. The agreement includes a $7,500 penalty with an additional suspended $92,500 penalty and requires the company to refrain from soliciting, selling or coordinating communications to public employees on behalf of, or in connection with, third-party financial representatives in Indiana for seven years.
- Maryland Attorney General Frosh and Maryland Department of the Environment Secretary Tablada announced a settlement with poultry processing facility Valley Proteins, resolving a lawsuit alleging that the company discharged pollutants into a state river for over a year. Among other things, the settlement includes a $540,000 civil penalty and requires the company to conduct relevant investigations into and correct its violations.
- Michigan Attorney General Nessel filed a bypass application to the Michigan Supreme Court asking it to reconsider past decisions that limited enforcement of the Michigan Consumer Protection Act against unfair drug prices. Specifically, two of the Supreme Court’s previous decisions have interpreted an exemption in the Act whenever the general transaction at issue is authorized by law (meaning when it is done by a generally regulated industry). Attorney General Nessel argues that this interpretation allows a loophole for misconduct.
- New York Attorney General James announced a $50 million agreement with Grand River Enterprises Six Nations, Ltd. and its wholesaler, Native Wholesale Supply Company, Inc., resolving allegations that the companies violated state and federal law by shipping, selling, and distributing cigarettes in New York without paying state excise taxes. In addition to the monetary provision, the agreement permanently prohibits the companies from selling unstamped cigarettes in the state.
- New York Attorney General James announced a second agreement with Albany Med Health System, resolving allegations that the company included an unlawful provision in employment contracts with nurses hired from abroad that required them to repay thousands of dollars if they resigned or were fired within their first three years of employment. This agreement follows a 2021 agreement over the same illegal repayment provision.
- Pennsylvania Attorney General Shapiro announced that his office entered into a settlement agreement with online ticket seller RYADD, Inc., resolving allegations that the company violated Pennsylvania’s consumer protection laws by changing its refund policy to mandatory store credit without notice at the beginning of the pandemic when many events were cancelled. The settlement requires the company to fully refund any tickets purchased before September 8, 2022 for a cancelled show to consumers in Pennsylvania, as well as to modify its checkout process and online disclosures so that consumers immediately know their final purchase price.