The State AG Report

Editor-in-Chief: Christopher Allen
Contributing Editors: Grace Garver, Hannah Land, Keturah Taylor, Emily Yu

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Election News

Election News

The State AG Report Weekly Update June 16, 2016

2016 Elections

Indiana Republicans Nominate County Prosecutor for Attorney General

  • Elkhart County Prosecutor Curtis Hill Jr. was nominated Saturday, June 12 at the Indiana Republican convention as the Republican nominee for Attorney General. Hill defeated former Attorney General Steve Carter, State Senator Randy Head, and Assistant Attorney General Abby Kuzma, after three rounds of balloting.
  • Indiana selects the Republican and Democratic candidates for Attorney General during their respective state conventions. The Democrats will select their nominee on June 18. The only publicly announced Democratic nominee is retired Lake County Circuit Court Judge Lorenzo Arredondo.

North Dakota Attorney General Defeated in Republican Primary Election for Governor

  • North Dakota held their primary elections for Governor on Tuesday, June 14, 2016. In the Republican primary, entrepreneur Doug Burgum defeated incumbent Republican AG Wayne Stenehjem and businessman Paul Sorum by a margin of 59.46% to 38.61% and 1.89%, respectively.
  • AG Stenehjem will be up for re-election as AG in 2018.

Consumer Protection

Florida Attorney General and the FTC Sue Alleged Illegal Debt Relief Operation

  • Florida AG Pam Bondi and the Federal Trade Commission (“FTC”) filed a complaint and obtained a temporary restraining order (“TRO”) against a Central Florida-based operation, collectively known as Life Management Services of Orange County, LLC, and its officers, for alleged violations of state and federal laws restricting unfair and deceptive practices and telemarketing.
  • According to the joint complaint, since at least 2013, the debt relief operation allegedly engaged in a telemarketing scheme that offered “phony debt relief services” that charged unlawful up-front fees, among other things, and also misrepresented the operation’s affiliations with financial institutions and the results it could obtain for consumers.
  • AG Bondi and the FTC filed a complaint against a credit card interest relief company, formerly known as Payless Solutions, and its officers for similar violations in July 2015.

New York Attorney General Alleges Internet Provider Advertised Internet Speeds Violated Consumer Protection Laws

  • New York AG Eric Schneiderman sent a letter to Charter Communications, Inc., which recently acquired Time Warner Cable, Inc., urging the company to “work with” the AG’s office to resolve concerns over claims regarding Time Warner Cable’s Internet service reliability, performance, and speed.
  • According to the recent letter, Time Warner Cable allegedly failed to provide reliable and fast Internet it purported to promise in advertisements, which stated its Internet was “blazing fast” and “super-reliable.” AG Schneiderman’s allegations are based, in part, on the use of an open-source tool that customers of major broadband providers can use to test the Internet speeds they are experiencing.
  • In October 2015, AG Schneiderman sent a letter to Time Warner Cable, Inc., Verizon Communications Inc, and Cablevision Systems Corp seeking information on whether their advertisements regarding Internet speeds violate state consumer protection laws.

 

Employment

Illinois Attorney General Sues Sandwich Restaurant Chain Over Non-Compete Clause

  • Illinois AG Lisa Madigan filed a lawsuit against Jimmy John’s Enterprises, LLC and Jimmy John’s Franchise, LLC (collectively “Jimmy John’s”) alleging its non-compete clauses in employment contracts violated the Illinois State Consumer Fraud and Deceptive Business Practices Act.
  • According to the complaint, Jimmy John’s allegedly imposed an undue hardship on current and former employees where it required employees, including those who are tasked with making and delivering sandwiches, to sign non-competition agreements that restrict them from holding any position with a company that earns more than ten percent of its revenue from selling deli sandwiches.
  • AG Madigan seeks, among other things, a penalty of $50,000 per violation of the Consumer Fraud and Deceptive Practices Act, restitution for harmed employees, and to void the non-competition agreements.

Environment

California Attorney General, State Agency Settle with Shipping Company Over Alleged Transport of Hazardous Wastes

  • California AG Kamala Harris and the California Department of Toxic Substances Control (“DTSC”) reached a settlement with FedEx Group Package System, Inc. (“FedEx Ground”) for alleged violations of state hazardous waste management laws.
  • According to DTSC, FedEx Ground allegedly failed to properly manage broken or leaking packages that contained hazardous materials and unlawfully transported hazardous waste packages to FedEx Ground facilities in California not authorized to accept or store hazardous waste, among other things.
  • The settlement follows a $1.75 million settlement between California District Attorneys and FedEx to partially resolve allegations that the company stored and transported packages of products found to be damaged or leaking in August 2015. Under the terms of the consent judgment, FedEx Ground must comply with the state’s hazardous waste management laws and must pay $3.4 million in penalties.

False Claims Act

Attorneys General and Feds Settle with Pharmaceutical Companies for Alleged Off-Label Drug Promotion

  • 4 AGs, the National Association of Medicaid Fraud Control Units, the U.S. Department of Justice, and other federal authorities reached a settlement with Genentech, Inc. and OSI Pharmaceuticals, LLC for allegedly violating state and federal False Claims Acts.
  • According to Massachusetts AG Maura Healey, the pharmaceutical companies allegedly promoted the prescription drug Tarceva, an oncology drug that treats certain advanced-stage cancers, to a subset of patients for whom the drug was not approved for treatment by the U.S. Food and Drug Administration because they lack a particular genetic mutation necessary for the drug to be effective.
  • Under the terms of the settlement, Genentech, Inc. and OSI Pharmaceuticals, LLC will pay $67 million to the United States and the states involved.

Unclaimed Property

21 Attorneys General File Suit Against the State of Delaware Over Unclaimed Property

  • 21 AGs, led by Arkansas AG Leslie Rutledge and Texas AG Ken Paxton, filed a lawsuit in the U.S. Supreme Court alleging that the state of Delaware has wrongfully collected at least $162 million in unclaimed and abandoned checks sold by MoneyGram Payment Systems, Inc. (“MoneyGram”) in violation of the Disposition of Abandoned Money Orders and Traveler’s Checks Act (“Federal Disposition Act”), which requires sums payable on unclaimed and abandoned checks to be remitted to the states where they were purchased.
  • According to the complaint, rather than transferring uncashed MoneyGram checks to the state in which the money order or check was purchased, MoneyGram turned the checks over to Delaware, as required under Delaware law, where MoneyGram is incorporated.
  • The complaint asks the Supreme Court to declare that the plaintiff states, and not Delaware, are entitled to the MoneyGram checks and to order Delaware to render the appropriate repayment to the plaintiff states.