Breaking News

Despite COVID-19, the State AG Report Stays on the Beat

• In these unprecedented times, the Cozen O’Connor State AG Group is committed to continuing to bring you important AG news stories and keeping you informed on current AG concerns, including new and ongoing efforts to combat consumer fraud and abuse.
• To supplement our regular coverage we have created an additional news category, “COVID-19,” to allow you to quickly focus in on coronavirus-related stories.  We welcome your feedback regarding stories or topics of particular interest. Please send your comments to us at: theagreportblog@cozen.com.
• Also, be aware that a number of AG associations have announced meeting cancellations and postponements.  Please check StateAGReport.com for up-to-date information on cancellations and rescheduling.

COVID-19

New York Temporarily Suspends State Debt Collection in Response to COVID-19 Pandemic

• In response to the COVID-19 pandemic, New York AG Letitia James announced that the state is suspending collection of medical and student debt owed to the state and referred to the AG’s office for collection. The accrual of interest and the collection of fees on these debts will also be automatically suspended.
• According to the AG’s office, the announced policy will halt debt collection for a 30-day period starting on March 17, 2020, and ending on April 16, 2020. The suspension may be extended should future circumstances warrant it.

Arkansas Attorney General Sends Letters to Online Platforms About Price Gouging

• Arkansas AG Leslie Rutledge sent letters to online commerce platforms Amazon.com, Inc. (“Amazon”), eBay, Inc., and Walmart, Inc. notifying them that Arkansas’s anti-price-gouging law automatically went into effect on March 11, 2020, after Governor Asa Hutchinson’s declaration of a state of emergency relating to the COVID-19 pandemic.
• The letters to Amazon, eBay, and Walmart, praise the companies for their proactive response in preventing price gouging and encourage the companies to take further action to stop bad actors from artificially raising prices on basic needs products during the public health crisis.
• According to the letters, the Arkansas anti-price-gouging law prohibits any person or business during an emergency from charging more than 10% above the pre-emergency price of goods and services.  Violators could be subject to injunctive relief, restitution, attorneys’ fees and costs, civil penalties, and criminal sanctions.

Antitrust

T-Mobile/Sprint Merger Clears Another Hurdle with California Settlement

• California AG Xavier Becerra reached a settlement with T-Mobile US, Inc. to resolve California’s challenge to T-Mobile’s merger with Sprint Corporation (collectively “T-Mobile”).
• Under the terms of the settlement agreement, T-Mobile is required, among other things, to make low-cost plans available to California consumers for 5 years, offer 100 GB no-cost broadband internet and free Wi-Fi mobile hotspot devices to low-income consumers, offer substantially similar employment to all T-Mobile and Sprint retail employees in good standing, take steps to increase the diversity of its workforce, and reimburse California and other states up to $15 million for the costs associated with the states’ challenge of the merger.
• As previously reported, other states, including Texas and Mississippi, recently reached similar settlements with T-Mobile.

Consumer Protection

When The Ambulance Chases You…Massachusetts Attorney General Settles Allegations of Illegal Debt Collection by Ambulance Company

• Massachusetts AG Maura Healey reached a settlement with ambulance company Trinity EMS Inc. and its debt collection firm, Stevens Business Services, Inc. (collectively “Trinity”) to resolve allegations of aggressive and misleading collection actions in violation of Massachusetts’s Consumer Protection Law and the AG’s Debt Collection Regulations.
• The AG’s office alleged that Trinity’s lawyer illegally threatened consumers with arrest and imprisonment for failing to pay their ambulance bills. The AG’s office further alleged that the threatened consumers were primarily low income, dealing with significant medical issues, and spoke English as a second language.
• Under the terms of the Assurance of Discontinuance, Trinity is enjoined from threatening arrest or imprisonment to collect its debts and is required to cancel $1.6 million in debt, pay $50,000 to the AG’s office to be used for restitution, and help repair the credit of all consumers sued by Trinity’s attorney, among other things.

Financial Industry

Democratic AGs to SEC: Don’t Expand the Definition of “Accredited Investor”

• Eleven Democratic AGs, led by California AG Xavier Becerra, filed a comment letter objecting to the Securities and Exchange Commission’s (“SEC”) proposed rule that would expand the SEC’s definition of “accredited investors.”
• The SEC’s proposed rule seeks to add additional categories of individuals and institutions that would qualify as “accredited investors,” including individuals with certain licenses and certifications, certain limited liability companies, and registered investment advisor firms.
• In their letter, the AGs argue that the SEC’s proposed rule would make it more likely that an individual unwittingly would lose their savings in private offerings to which securities laws do not apply. The AGs also urge the SEC to inflation-adjust “accredited investor” thresholds, gather data and study the outcomes of private security offerings before expanding the definition of “accredited investors,” and reject any proposals to consider individuals eligible to be “accredited investors” because they are advised by broker-dealers or investment advisors.

Labor & Employment

Democratic AGs Urge the FTC to Fight Unreasonable Non-Compete Provisions

• In response to a Federal Trade Commission (“FTC”) public workshop on non-compete provisions, 19 Democratic AGs, led by District of Columbia AG Karl Racine, sent a letter urging the FTC to implement federal rules to restrict the use of non-compete provisions in employment contracts.
• In their letter, the AGs encouraged the FTC to increase enforcement actions against unreasonable non-compete provisions and promulgate new rules limiting the use of non-compete provisions in employment agreements for low-wage workers. The AGs argued that non-compete provisions harm workers’ ability to find higher-paying jobs and also harm and the ability of businesses to compete by reducing the availability of the workers they need.
• As previously reported, similar coalitions of AGs have submitted comments urging the FTC to regulate the use of non-compete provisions in July and November

State v. Federal

Democratic AGs Urge HUD to Keep Rule Designed to Promote Fair Housing

• Twenty-two Democratic AGs, led by California AG Xavier Becerra and New York AG Letitia James, filed a comment letter opposing the U.S. Department of Housing and Urban Development’s (“HUD”) proposed rule rolling back the Affirmatively Furthering Fair Housing (“AFFH”) Rule promulgated in 2015.
• In their letter, the AGs argue, among other things that the proposed amendments to the rule would remove HUD’s oversight over desegregation and integration in housing by eliminating the requirement that jurisdiction justify their funding requests with data or research to show how funding will be used to promote desegregated and integrated communities. The AGs also argue that the proposed amendment would violate the Administrative Procedure Act because it is contrary to the Fair Housing Act.
• A coalition of 18 AGs had previously opposed an Advanced Notice of Proposed Rulemaking regarding revisions to the AFFH in 2018.