Breaking News

Alaska’s Governor Appoints New Attorney General

• Alaska Governor Bill Walker appointed Jahna Lindemuth to serve as Attorney General, effective early August. Lindemuth will replace AG Craig Richards, who resigned as Attorney General on Friday, June 24, reportedly to focus on his family.
• Prior to her appointment, Lindemuth was a partner at Dorsey & Whitney LLP, and has been with the firm’s Trial Group since 1999. Earlier this year, Lindemuth was considered by Governor Walker to fill a vacancy in the state Supreme Court. Deputy Attorney General Jim Cantor will lead Alaska’s Department of Law until Lindemuth’s appointment is effective.

Kansas Attorney General to Be NAAG President in 2017-2018

• The National Association of Attorneys General (“NAAG”) chose Kansas AG Derek Schmidt as its new President-Elect at the annual Summer Meeting, which took place June 21-23 in Burlington, Vermont. AG Schmidt will serve as President of NAAG for the 2017-2018 term.
• Additionally, Connecticut AG George Jepsen began his 2016-2017 term as NAAG President at the Summer Meeting.
• NAAG elects its officers yearly, typically rotating through NAAG’s four regions (East, Midwest, South, and West).

2016 Elections

Utah Attorney General to Face Democrat and Third-Party Candidates in Utah General Election

• Utah held its primary elections on Tuesday, June 28. The major party candidates nominated were incumbent Republican AG Sean Reyes and Democrat Jon Harper, an attorney and former law professor. Both candidates received their respective party’s nomination without opposition.
• In addition, two third-party candidates also will stand in the general election. Attorney Michael Isbell (American Independent Party) and attorney W. Andrew McCullough (Utah Libertarian Party) also received their respective party’s nomination without opposition.
• The next AG primaries will be Missouri and Washington on August 2. To find additional updates about State AG Elections, please click here.

Antitrust

Former Alaska Attorney General Circulates Consent Decree Over Oil Company’s Alleged Antitrust Violations

• Now-former Alaska AG Craig Richards reached an agreement, subject to the Superior Court of Alaska’s approval, with Tesoro Alaska Company LLC (“Tesoro”) to resolve allegations that the company’s agreement to purchase certain fuel storage assets from Flint Hills Resources, LLC (“FHR”) violated state antitrust laws.
• According to the AG’s office, Tesoro reached an agreement with FHR last year to purchase most of FHR’s fuel storage assets, including FHR’s storage facility at the Port of Anchorage, allegedly limiting the ability of its competitors to import fuel through the Port of Anchorage and impairing conditions in markets for some fuel products, including gasoline.
• Under the terms of the consent decree, Tesoro agreed, among other things, to sell one of its fuel storage facilities at the Port of Anchorage to a qualified buyer.

Consumer Financial Protection Bureau

CFPB and DOJ Settle with Bank for Alleged Discriminatory Mortgage Lending Practices

• The Consumer Financial Protection Bureau (“CFPB”) and the U.S. Department of Justice (“DOJ”) reached a joint settlement with BancorpSouth, a subsidiary of financial holding company BancorpSouth, Inc., for allegedly violating the Equal Credit Opportunity Act (“ECOA”) and the Fair Housing Act (“FHA”), which prohibit financial institutions from discriminating on the basis of race, color, or national origin in their mortgage lending practices.
• According to the complaint, BancorpSouth allegedly “redlined” – a term for designating areas as particularly risky for lending because of their ethnic or social make-up – predominantly minority neighborhoods by engaging in allegedly discriminatory loan denial policies for residential mortgages to minority borrowers, as well as by charging minority borrowers with higher rates for loans than their white counterparts.
• Under the terms of the proposed consent order, BancorpSouth must pay $3 million in civil penalties, $4 million to a loan subsidy program offered to applicants in predominantly minority neighborhoods, and $2.8 million to consumers harmed by the discrimination, as well as spend $100,000 per year for advertising and outreach in minority neighborhoods.

Consumer Protection

43 Attorneys General Settle with Car Manufacturer Over Alleged Violations of Consumer Protection Laws

• At least 43 Attorneys General reached a settlement with Volkswagen AG, Volkswagen Group of America, Inc., Audi AG, Audi AG of America, LLC, Porsche AG, and Porsche Cars of North America, Inc. (collectively the “VW Group”) over allegations that the VW Group violated state consumer protection laws by allegedly using software that manipulated data produced during emissions standards testing.
• According to the AGs, the VW Group allegedly sold certain diesel vehicles equipped with “defeat device” software intended to circumvent applicable emissions standards for certain air pollutants, actively concealed the existence of the defeat device from regulators and the public, and misrepresented their vehicles as environmentally-friendly and compliant with federal and state emissions standards.
• Under the multistate settlement, the VW Group agreed to pay approximately $583 million in total to the AGs and an additional $20 million to the National Association of Attorneys General for use by AGs for consumer protection oversight, training and enforcement, and for the reimbursement of costs and expenses. States not currently part of the settlement have 30 days to join the settlement.
• In two related settlements, one with the Federal Trade Commission and another with California, the U.S. Department of Justice and the U.S. Environmental Protection Agency, the VW Group agreed to offer consumers a buyback and lease termination for certain vehicles sold or leased in the U.S., and will spend up to approximately $10 billion to compensate consumers under the program. In addition, under that settlement the VW Group has agreed to pay $2.7 billion into an environmental remediation fund and to invest $2 billion in initiatives to promote the use of zero emissions vehicles in the U.S.

Arizona Attorney General Settles with Former Phoenix Clothing Retailer

• Arizona AG Mark Brnovich reached a settlement with former Phoenix clothing retailer LD & Co., f/k/a Lawless Denim & Co. (“Lawless Denim”), over allegations that the company and its owner, James Roman Acevedo, violated the Arizona Consumer Fraud Act.
• According to the AG’s office, Lawless Denim allegedly failed to deliver on orders of custom-made jeans after receiving payment for the orders, misrepresented when ordered merchandise would be available, and promised refunds that it failed to pay.
• Under the terms of the consent judgment, Lawless Denim must, among other things, provide up to $20,000 in refunds to customers who failed to receive their orders. If Acevedo fails to make timely restitution payments, Lawless Denim will also be subjected to $250,000 in civil penalties.

Employment

New York Attorney General Settles with Jimmy John’s Over Non-Compete Agreement

• New York AG Eric Schneiderman reached a settlement with Jimmy John’s Enterprises, LLC and Jimmy John’s Franchise, LLC (collectively “Jimmy John’s”) to resolve allegations that the company distributed unlawful sample non-compete agreements to franchisees for use with restaurant workers and delivery drivers.
• According to the AG’s office, the non-compete agreements, utilized by some Jimmy John’s franchises, prohibited employees from holding any position with a company that earns more than ten percent of its revenue from selling deli sandwiches. Under New York law, non-compete agreements are only permitted in very limited circumstances, such as to protect trade secrets or in relation to employees with uniquely special skills.
• Under the terms of the settlement, Jimmy John’s must end its use of the non-compete agreements and notify all franchisees that the non-compete agreements signed by employees are void.
• Illinois AG Lisa Madigan also recently sued Jimmy John’s over its alleged distribution of a non-compete agreement.

Pharmaceuticals

West Virginia Attorney General Settles with Five Drug Wholesalers Over Alleged Failure to Detect Influx of Suspicious Drug Orders for Painkillers

• West Virginia AG Patrick Morrisey, along with the West Virginia Departments of Health and Human Resources and Military Affairs and Public Safety, settled with five prescription drug wholesalers, including Anda, Inc., The Harvard Drug Group, LLC, Associated Pharmacies, Inc., KeySource Medical, Inc., and Quest Pharmaceuticals, Inc., over allegations that the companies failed to detect, report, and stop an influx of suspicious drug orders for painkillers.
• According to the original lawsuit filed by former AG Darrell McGraw in 2012, the pharmaceutical companies allegedly failed to implement anti-diversion controls by not creating monitoring programs to end illegal drug sales despite the companies’ alleged awareness of the likely illegitimate use for the prescription painkillers, which allowed drug abuse to spread throughout the state.
• The individual settlements require payments of $1,865,250 from Anda, $1 million from The Harvard Drug Group, $850,000 from Associated Pharmacies, $250,000 from KeySource Medical, and $250,000 from Quest Pharmaceuticals. The settlements also increase the responsibility of the wholesalers to alert the West Virginia State Police and the AG’s office of suspicious drug sales.