Each week, Crowell & Moring’s State Attorneys General team highlights significant actions that State AGs have taken. Here are this week’s updates.
- 41 attorneys general filed multistate lawsuits against social media company Meta. The lawsuits, in both federal and state courts, allege that the company knowingly designed and deployed harmful features on Instagram and other social media platforms that purposefully addict children and teens while assuring the public that features were safe and suitable for young users. The complaint alleges that the company has violated state consumer protection laws and the federal Children’s Online Privacy Protection Act (COPPA) and seeks injunctive and monetary relief. The multistate coalition is also investigating TikTok based on a similar set of concerns.
- Attorneys General Wilson of South Carolina and Nessel of Michigan announced, in partnership with the Commodity Futures Trading Commission (CFTC) and 29 other state regulators, a settlement with precious metals dealer Safeguard Metals, LLC and Jeffrey Ikahn to resolve a federal lawsuit alleging a $68 million fraudulent scheme targeting the elderly. Per the Consent Order, between October 2017 and July 2021, Safeguard and Ikahn deceived customers into purchasing precious metals through false and misleading statements.
- Attorney General Henry of Pennsylvania is leading a coalition of 13 attorneys general in supporting a federal rule proposal that would mandate railroads make available, in electronic form, information regarding hazardous material loads to emergency responders. The federal rule proposal follows a train derailment in February in East Palestine, Ohio, in close proximity to the Pennsylvania border.
- A coalition of 18 attorneys general is supporting the District of Columbia’s efforts to restrict the capacity of firearms magazines within the district. The coalition filed an amicus brief in the U.S. Court of Appeals for the District of Columbia Circuit arguing that the law prohibiting possession and sale of large-capacity magazines comports with the Second Amendment of the U.S. Constitution.
- A coalition of 19 attorneys general submitted an amicus brief in support of a Maryland board of education policy that permits schools to incorporate LGBTQ+ inclusive books into language arts curricula. The Montgomery Board of Education (MCBE) in Maryland is currently facing a challenge that the policy violates free exercise of religion.
- A coalition of 11 attorneys general is urging the U.S. Department of the Treasury and the Internal Revenue Service (IRS) to adopt enforcement that would protect workers’ rights to prevailing wages on renewable energy and green economy projects where employers claim expanded tax credits. The coalition is formed following a comment letter submitted by several states calling for equitable and efficient implementation of the Inflation Reduction Act in December 2022.
- Attorney General Bonta announced results of an investigation into anti-bias training for pregnancy care providers finding that women of color, particularly black women, die of pregnancy-related complications at much higher rates than white women in California. The investigation was initiated to determine compliance with a 2019 law, the California Dignity in Pregnancy and Childbirth Act (SB 464), which requires health facilities to train prenatal care providers in recognizing and overcoming implicit bias.
- Attorney General Bonta issued a statement on the first day of trial in the federal lawsuit challenging JetBlue Airways’ proposed $3.8 billion acquisition of Spirit Airlines. The statement alleged that the proposed merger is a “bad deal” for consumers that would force higher fares and fewer options and raises consolidation of the airline industry as a serious concern.
- Attorney General Bonta announced the unsealing of an indictment and arraignment of Jeffrey H. Tamkin on 110 felony charges and three special allegations for allegedly operating a securities fraud scheme in Los Angeles. The fraud allegedly resulted in a loss of approximately $8 million from multiple victims, many of whom were elderly, between 2010 and 2020. A grand jury in Los Angeles County indicted Tamkin on counts of securities fraud, grand theft, elder theft, money laundering, a fraudulent securities scheme, and aggravated white-collar enhancement.
- Attorney General Nessel filed a lawsuit in the 9th Circuit Court in Kalamazoo County to dissolve American Air Mavericks and seek injunctive relief against American Air Mavericks and agent Roman Choumeliski over alleged fraud committed in the legal establishment of the business and repeated and willful unlawful business practices. The lawsuit alleges that the business used a three-day rental property address when filing LLC formation paperwork with the Michigan Department of Licensing and Regulatory Affairs which constitutes a violation of the Limited Liability Act. The lawsuit also alleges illegal business practices and violations of the Michigan Consumer Protection Act (MCPA) in deceptively representing their geographic origin, making false or misleading statements concerning price reductions, and employing gross discrepancies between oral representations and written agreements covering transactions or failing to provide promised services. The Department seeks civil fines of $75,000 for costs associated with the investigation and litigation of the offenses.
- Attorney General Nessel filed an Assurance of Voluntary Compliance and Discontinuance in the 6th Circuit Court in Oakland County resolving an investigation into alleged price gouging during a severe ice storm in February 2023 by the Hilton Garden Inn in Novi. The assurance resolves the investigation and potential litigation of alleged violations of the Michigan Consumer Protection Act (MCPA). The Hilton Garden Inn was the subject of an investigation following consumer complaints. As a result of the assurance, the Department of the Attorney General and all consumers who paid excessive rates will receive refunds.
- Attorney General Nessel issued a formal opinion concluding that contractual assessments imposed by local governments under the Property Assessed Clean Energy (PACE) Act are considered special assessments by the local government and treated in a similar manner as real estate taxes as property.
- Attorney General Matthew J. Platkin announced that the Division of Civil Rights (DCR) has entered into a Consent Order and Decree resolving a complaint alleging that Mercer County Community College discriminated against an employee who contracted COVID-19 by firing the employee rather than extending medical leave or allowing remote work. Under the consent order, the college will be required to rehire the complainant and pay $50,000 as compensation for lost wages and benefits and damages for pain and suffering. The consent order also requires the College to ensure that its policies and practices comply with the New Jersey Law Against Discrimination (LAD).
- Attorney General James announced an agreement to end anti-worker practices by First American Financial Corporation. An investigation discovered that First American and its competitors entered into illegal no-poach agreements where they would not solicit each other’s employees. As a result of the agreement, First American will terminate any existing agreements, pay $4.5 million to the state, and cooperate with ongoing investigations.
- Attorney General James announced the results of an investigation into Dr. Mark Mohrmann and his practice, Highline Orthopedics, that found that the doctor and his wife worked to suppress negative reviews and inflate positive reviews on numerous websites. As a result of an agreement, Dr. Mohrmann and his wife are required to take down all false positive reviews and must pay $100,000 in penalties.
- Attorney General James filed a lawsuit against Gemini Trust Company LLC, Genesis Global Capital, Digital Currency Group, Michael Moro, Barry E. Silbert, and a pair of other Genesis entities. The lawsuit argues that the firms lied to customers about the investment program, “Gemini Earn,” which caused at least 232,000 individuals to suffer losses in excess of $1 billion.
- Attorney General Yost filed a lawsuit in Franklin County Common Pleas Court alleging that Chris Rivera, owner of Orlando-based Myriad Capital Management, collected debt from Ohio consumers using multiple business names resembling law firms in an effort to convince consumers that lawsuits would be filed if they did not pay the debts. The lawsuit alleges that these actions were violative of Consumer Sales Practices under the Consumer Sales Protection Act and seeks to recover consumer damages, civil penalties of $25,000, and a permanent injunction.
- Attorney General Drummond announced that an Oklahoma contractor, Benjamin Moore, who did business as Moore Construction, was charged with nine counts of felony embezzlement and a pattern of criminal offenses following an investigation revealing that he had allegedly taken nearly $85,000 from nine customers for construction projects that were never completed.
- Attorney General Miyares released an advisory opinion on property tax assessment of real property that was operated in whole or in part as an affordable rental property. The opinion addresses whether assessors comply with state law by reviewing only the property’s income and expenses statement and assessments of affordable housing property generally.
- Attorney General Miyares announced an investigation into AJP Educational Foundation, Inc., also known as American Muslims for Palestine, for potential violations of Virginia’s charitable solicitation laws. The investigation seeks to uncover whether the organization was soliciting contributions without having first registered with the Commissioner of the Virginia Department of Agriculture and Consumer Services and whether the organization was using funds raised for impermissible purposes under state law including benefitting or providing support to terrorist organizations.
- Attorney General Ferguson announced that he won a court order to shut down websites and suspend internet domains of two businesses and their owner that had sent hundreds of thousands of deceptive texts and emails targeting Washington businesses and nonprofits. The large-scale text and email scheme had cost Washington businesses at least $228,000 and directed businesses to websites where they were charged $200 to file annual reports with the Secretary of State. The websites did not disclose that businesses can file required reports for $60. Other solicitations demanded between $150 and $175 to file annual meeting minutes although Washington does not require such a filing.
- Attorney General Morrisey sent a letter to the NCAA urging officials to reverse their decision and grant RaeQuan Battle a transfer waiver so that he may play basketball for West Virginia University. The letter stated that the NCAA’s choice to arbitrarily limit student choice through transfer guidelines raises significant antitrust concerns.
- Attorney General Kaul announced a $150,000 settlement with ChemDesign Products, Inc. resolving a civil environmental enforcement action alleging violations of the company’s air pollution control permit at the toll chemical manufacturing facility in Marinette, Wisconsin. The complaint alleged six violations of the facility’s permit relating to emissions of hazardous and volatile chemicals.