Each week, Crowell & Moring’s State Attorneys General team highlights significant actions that State AGs have taken. Here are this week’s updates.
- A multistate coalition of 22 state attorneys general, led by Tennessee Attorney General Skrmetti, sent a warning letter to the Net Zero Financial Service Providers Alliance (NZFSPA) stating their coordinated commitments may violate state and federal antitrust and consumer protection laws. The NZFSPA is a collection of financial service firms that have pledged to “accelerate the transition towards global net zero greenhouse gas emissions.” The letter warns NZFSPA members that collusion to limit consumer choice or manipulate market outcomes, especially among direct competitors, may be violative of state antitrust and consumer protection laws. The letter suggests NZFSPA members are necessarily acting to artificially restrict supply, restrain trade, inhibit innovation, suppress output, and harm consumers. The letter seeks additional information from NZFSPA.
- A multistate coalition of 18 state attorneys general filed an amicus brief in support of the State of Montana’s law banning the app TikTok. The brief praised Montana’s action to protect its citizens’ privacy from TikTok’s relationship with China and the Chinese Communist Party and its citizens’ wellbeing from the physical and mental health detriments associated with use of the app.
- A multistate coalition of 19 state attorneys general, led by California Attorney General Bonta, submitted a comment letter to the United States Department of Justice and Federal Trade Commission regarding the agencies’ proposed revisions to the Merger Guidelines. The Merger Guidelines serve as guidance for state enforcers considering mergers and acquisitions. The comment letter commends the agencies for seeking to strengthen the Merger Guidelines and ultimately federal and state merger enforcement.
- California Attorney General Bonta announced a lawsuit against Exxon Mobil, Shell, Chevron, ConocoPhillips, and the American Petroleum Institute for allegedly engaging in a ‘decades-long campaign of deception’ and statewide climate change-related harms. The Complaint asserts that the companies have known since at least the 1960s that burning fossil fuels would warm the planet and affect the climate but denied climate change in public remarks and marketing. The six causes of actions asserted in the Complaint are 1) public nuisance, 2) damage to natural resources, 3) false advertising, 4) misleading environmental marketing, 5) unlawful, unfair, and fraudulent business practices, and 6) products liability. The lawsuit seeks civil penalties and nuisance abatement via the creation of a fund to finance climate mitigation and adaptation efforts, as well as injunctive relief to prevent further misleading advertisings about fossil fuels.
- Indiana Attorney General Rokita announced a lawsuit against IU Health and IU Healthcare Associates for failure to properly report, review, and enforce HIPAA violations. IU Health has had numerous instances where it failed to implement or enforce privacy policies or sanctions against physicians, including instances that had to be reviewed by the Indiana Medical Licensing Board. The lawsuit consists of seven counts and specifically includes violations of Indiana’s Deceptive Consumers Sales Act based on the ongoing HIPPA and privacy violations.
- Iowa Attorney General Bird announced a lawsuit against Biologics Health, LLC, Summit Partners Group, LLC, Rylee Meek, and Scott Thomas for allegedly engaging in fraudulent door-to-door stem cell therapy treatments. The lawsuit addresses the defendants’ false advertisements and misleading claims regarding the effectiveness of their stem cell therapy services. The lawsuit alleges over 250 Iowans were sold fraudulent stem cell therapies, totaling over $1 million dollars. The lawsuit alleges violations of the Iowa Consumer Fraud Act and seeks restitution, civil penalties, and a permanent injunction.
- New Hampshire Attorney General Formella announced a court order granting a preliminary injunction against Cory Spencer, the former lead contractor for PHX Remodeling and currently d/b/a “NHcustommade4u.” The preliminary injunction temporarily enjoins Spencer from owning or operating any construction business and collecting any consumer prepayment or deposit while conducting trade or commerce within New Hampshire. The preliminary injunction remains in effect while the case is ongoing. The complaint against Spencer alleges 13 violations of New Hampshire’s Consumer Protection Act, mostly regarding instances where Spencer did not complete contracted work and provided no refund to consumers. The lawsuit seeks restitution and $130,000 in civil penalties.
- New York Attorney General James announced a lawsuit against Vantage Travel Services, Inc. and its owner, Henry R. Lewis, for failing to refund consumers after their tours were cancelled. Vantage is a Massachusetts-based travel company that offers cruises for locations worldwide. The lawsuit alleges deceptive business practices based on the company’s failure to honor its refund policy and for mischaracterizing trip cancellations as postponements. Vantage allegedly owes thousands of dollars to more than 100 New Yorkers. The lawsuit seeks full restitution, disgorgement, and civil penalties.
- Ohio Attorney General Yost announced a lawsuit against Ohio Mega Group, a used car dealership, and its owner, Dominic Wiley, for allegedly rolling back odometers and selling salvaged vehicles without proper notice to customers. This is the fourth used car dealership that Attorney General Yost has sued under similar allegations of odometer tampering this year. The lawsuit seeks restitution, civil penalties, and an injunction.
- Ohio Attorney General Yost announced that three former executives of the Columbus Zoo and Aquarium were indicted for their roles in a scheme to defraud the zoo of almost $2.3 million dollars. Former Chief Executive Officer Tom Stalf and former Marketing Director Pete Fingerhut are accused of operating a criminal enterprise to steal money from the zoo and colluding to conceal their theft. Further, former Chief Financial Officer Greg Bell is also accused of involvement within the enterprise. The three former executives collectively are charged with more than 100 felony counts.
- Pennsylvania Attorney General Henry announced a lawsuit against Joseph F. John and Joseph F. John II for alleged illegal treatment of tenants or consumers with ‘rent to own’ agreements at more than fifty homes across two counties. The lawsuit alleges the homes are in disrepair with issues such as missing pipes, missing appliances, leaking roofs, damaged windows, insect infestations, malfunctioning plumbing, among other issues. Further, the landlords allegedly charged unlawful late fees and interest rates. The Office of the Attorney General is seeking restitution for the tenants, as well as civil penalties and a permanent injunction.
- Pennsylvania Attorney General Henry announced a settlement with landlord, Legacy Realty & Property Management, LLC, which allegedly charged college student tenants unlawful administrative fees attached to security deposits. The Office of the Attorney General filed a lawsuit against Legacy on July 8, 2019 for violations of the Landlord Tenant Act and Unfair Trade Practices and Consumer Protection Law. Under the settlement, Legacy agreed to close its business and pay $17,500 in restitution to consumers.
- Tennessee Attorney General Skrmetti filed a motion to compel TikTok to comply with a prior court order requiring it to produce relevant evidence in response to Tennessee’s investigation of TikTok’s possible violation of Tennessee’s consumer protection laws. This action is part of a larger nationwide, bipartisan investigation into whether TikTok engaged in deceptive, unfair, and unconscionable conduct that harmed the mental health of TikTok users, particularly children and teens. TikTok allegedly failed to comply with the Agreed Order by not providing a knowledgeable witness who could testify about the events leading up to TikToks’s destruction of evidence. The original motion was supported by 47 state attorneys general.