The State AG Report

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

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Digest 8.30.2018 The State AG Report Weekly Update

2018 AG Elections

Arizona and Florida Hold Primary Elections

Oklahoma Incumbent Attorney General Wins Republican Primary Runoff Election

  • Oklahoma held a runoff election for the Republican AG primary race on August 28, 2018.
  • Incumbent AG Mike Hunter won the nomination by defeating Gentner Drummond by just 269 votes, out of the 296,439 votes cast, according to uncertified election results with all precincts reporting. Drummond does not plan to request a recount, and conceded the race.
  • AG Hunter will face Democratic nominee Mark Myles in the general election.
  • As previously reported, AG Hunter and Drummond were the top two vote-getters in the Republican primary, which proceeded to a runoff election when neither candidate received a majority (50%) of the vote required to secure the nomination.

Michigan Republican and Democratic Parties Nominate Attorney General Candidates

  • The Michigan Republican and Democratic parties held nominating conventions on August 25th and 26th, respectively. In Michigan, candidates for statewide offices other than the Governor are selected by convention rather than a primary election.
  • The Republican delegates nominated state House Speaker Tom Leonard for AG, while the Democratic delegates nominated private attorney and former prosecutor Dana Nessel.
  • Independent candidate for Michigan AG Chris Graveline, a former federal prosecutor, may also appear on the ballot in the general election, after a federal judge ordered that his qualifying petition for the AG candidacy be considered in time to qualify for November’s ballot despite his inability to gather 30,000 signatures.
  • As previously reported, current Michigan AG Bill Schuette secured the Republican nomination for Governor and will face Democratic candidate state Senator Gretchen Whitmer in the general election on November 6, 2018.

Bureau of Consumer Financial Protection

Head of BCFP Office for Students and Young Consumers Steps Down

  • Seth Frotman, Assistant Director and Student Loan Ombudsman at the Bureau of Consumer Financial Protection (“BCFP”) Office for Students and Young Consumers, has reportedly stepped down from his post as Student Loan Ombudsman.
  • Frotman’s resignation letter to BCFP Acting Director Mick Mulvaney expressed disagreement with BCFP actions that allegedly rolled back protections for student borrowers.
  • The Student Loan Ombudsman position, which Mr. Frotman held for the past three years, was created in 2010 to address consumer protection issues in the student loan industry.

Consumer Protection

Washington Attorney General Reaches Settlement with Eight Fast Food Franchisors Over “No Poach” Provisions in Franchise Agreements

  • Washington AG Bob Ferguson announced settlements with Applebee’s Restaurants LLC (“Applebee’s”), Cajun Operating Company (“Church’s Chicken”), Five Guys Franchisor, LLC (“Five Guys”), IHOP Franchisor LLC (“IHOP”), Jamba Juice Company (“Jamba Juice”), Little Caesar Enterprises, Inc. (“Little Caesars”), Panera, LLC (“Panera”), and Sonic Franchising LLC (“Sonic”) (collectively, “franchisors”) to resolve the AG’s investigation into whether the franchisors’ alleged use of “no-poach” provisions in franchise agreements constituted an unlawful restraint of trade in violation of the state’s Consumer Protection Act.
  • Under the terms of the assurances of discontinuance reached with Applebee’s, Church’s Chicken, Five Guys, IHOP, Jamba Juice, Little Caesars, Panera, and Sonic, each of the franchisors agreed to cease enforcing no-poach provisions currently in franchise agreements, to remove such provisions from current and future franchise agreements, and to notify all franchisees and owners of the prohibition.
  • As previously reported, AG Ferguson reached similar settlements with seven other fast food franchisors in July 2018, following the actions of 11 AGs in issuing letters to a number of national fast food franchisors inquiring about the alleged use of “no-poach” provisions in franchise agreements.

Environment

District of Columbia Attorney General Sues Auto Group Over Alleged Environmental Contamination

  • District of Columbia AG Karl Racine filed a lawsuit against the auto repair and sales businesses 2201 Channing Street, LLC and its owner Andrew Schaeffer, Right Hour Auto Sales, Inc., Wave Rides Company, and Capitol Hill Auto Repair, Inc. (collectively, the “auto group”) alleging the auto group improperly stored and disposed of hazardous waste in violation of the District’s Water Pollution Control Act and Hazardous Waste Management Act.
  • According to the complaint, the auto group allegedly discharged used oil into public spaces leading to the water system, improperly stored used oil, failed to prevent or respond to oil spills, and neglected to make court-ordered payments for prior environmental violations, in violation of the local environmental laws.
  • The complaint seeks to enjoin the auto group from further business operations until compliance with the environmental laws is demonstrated, impose penalties of up to $50,000 for each individual discharge of used oil since 2017 and up to $25,000 for each day during which hazardous waste was improperly stored since 2017, and require payment of the outstanding fines for prior violations.
  • According to the AG’s office, the lawsuit is the first environmental enforcement action the AG’s office has brought against local businesses under its authority to independently enforce environmental regulations.

12 Democratic Attorneys General Oppose Proposed Rule Rolling Back Requirements for Facilities Using or Storing Toxic Chemicals

  • A coalition of 12 Democratic AGs, led by New York AG Barbara Underwood, submitted comments to the U.S. Environmental Protection Agency (“EPA”) opposing a proposed rule that would rescind portions of amendments made in 2017 to the EPA’s Risk Management Program (“RMP”) regulations.
  • According to the AGs’ comments, the proposed rule allegedly would undo safeguards against explosions, fires, poisonous gas releases, and other accidents at facilities storing or using toxic chemicals, in turn reducing community safety and endangering facility employees and first responders.
  • The EPA previously sought to delay the implementation of the RMP amendments for 20 months, but a lawsuit by 11 AGs challenging the delay resulted in the U.S. Court of Appeals for the District of Columbia Circuit striking down the delay as arbitrary and capricious and a violation of the federal Clean Air Act.

State v. Federal

Attorneys General Urge Congress to Pass Legislation Closing Federal Loophole for Fentanyl Analogues

  • A bipartisan coalition of 52 state and territory AGs sent a letter to U.S. House of Representatives leaders urging them to pass the Stopping Overdoses of Fentanyl Analogues (SOFA) Act, H.R.4922/S.1553 as part of the ongoing state and federal efforts to combat the nationwide opioid epidemic.
  • Fentanyl is a synthetic opioid already regulated as a controlled substance, but its analogues—narcotics similar to fentanyl but with slightly different compositions—have not been similarly regulated.
  • According to the letter, the SOFA Act would allow the U.S. Drug Enforcement Administration to proactively list all newly modified fentanyl analogues on controlled substance schedules, thereby making fentanyl analogues illegal as soon as they are manufactured.