Each week, Crowell & Moring’s State Attorneys General team highlights significant actions that State AGs have taken. See our State Attorneys General page for more insights. Here are last week’s updates.
Multistate
- A bipartisan coalition of thirty state attorneys general announced a settlement with the owner of Cameo, Baron App Inc., for failing to properly disclose that videos commissioned through its Business Cameo service, in which celebrities promoted products were in fact paid endorsements. The settlement follows an investigation revealing that Cameo’s failures to disclose violated the Federal Trade Commission (FTC) Endorsement Guides and various state consumer protection laws. Under the settlement agreement, Cameo must pay $100,000 in penalties and implement programs to help ensure that all paid advertisements are properly labeled.
- A multistate, bipartisan coalition of state attorneys general announced an $86 million settlement in principle with Indivior (formerly known as Reckitt Benckiser), the manufacturer of buprenorphine-based products. Those products are used to treat opioid use disorder but may exacerbate opioid addictions when abused and cause further harm. The states alleged that Indivior targeted sales to dangerous prescribers, such as doctors running “pill-mills” and failed to monitor suspicious orders. The settlement will provide funds to the participating states over five years and the funds are meant to be used for opioid addiction treatment, recovery, and prevention programs. This settlement follows on other recent multistate settlements with Indivior related to its promotion its buprenorphine-based product Suboxone.
North Dakota
- Attorney General Wrigley issued a cease and desist order to Smokes4Less, its owner Mohammed Wazwaz, and manager Taha Almuhisen. The order alleges violations of the North Dakota Food, Drug & Cosmetics Act, the Uniform Controlled Substances Act, consumer fraud laws, and the Hemp Law. During an undercover operation, authorities discovered that employees of “Smokes4Less” sold products containing marijuana, THC, and substituted tryptamines (comparable to psilocybin mushrooms), all of which are Schedule I hallucinogenic controlled substances. Additionally, investigation revealed that the product labels provided no disclosure of the illegal substances; in some cases, the labels falsely represented that the product was free of controlled substances.
Pennsylvania
- Attorney General Henry announced a lawsuit against Brothers All Around Service, LLC and its owner, John McDonald, alleging that the home improvement company used illegal contracts and failed to complete jobs or provide refunds. The lawsuit, brought under § 201-1 of the Pennsylvania Consumer Protection Law, alleges that the company demanded large, upfront sums for jobs that were not completed and the company did not issue refunds or answer phone calls when consumers complained. The lawsuit seeks full restitution for harmed consumers as well as civil penalties of as much as three thousand dollars for each violation of the law.
- Attorney General Henry reached a settlement with Walk’s Service Center Inc., and its owner, Bradley Karch, over the State College-based company’s private ticketing practices. In 2020, the Office of Attorney General sued Walk’s for allegedly engaging in deceptive and unfair business practices by issuing private parking “tickets” in State College that look similar to government parking tickets in violation of § 201-1 of the Pennsylvania Consumer Protection Law. Pennsylvania consumers were allegedly required to pay the tickets under the false threat of prosecution and/or the unlawful retention of their vehicle.
Washington D.C.
- Attorney General Schwalb announced a settlement with Power Design, a major construction firm, for $3.75 million including restitution to construction workers and penalties and fees to the District. The settlement resolves a lawsuit filed against Power Design, general contractor John Moriarty & Associates of Virginia, and multiple labor brokers for misclassifying hundreds of construction workers as independent contractors rather than employees under D.C. Code § 32-1331.01. The payment terms include “worker share,” “penalty share,” and “attorneys’ fees share” payments of $1.74 million, $1.12 million, and $880,000 respectively. The settlement agreement also includes injunctive terms under which defendants will be required to overhaul their payroll and contracting practices to prevent future worker misclassification.