Multistate Actions

Led by Arizona Attorney General Mark Brnovich, Colorado Attorney General Phil Weiser, Connecticut Attorney General William Tong, and Iowa Attorney General Tom Miller, a bipartisan group of 34 attorneys general urged the U.S. Department of Transportation (USDOT) to improve consumer protection rules for airline passengers. The letter calls on USDOT to strengthen protections for airline consumers and provide meaningful relief when flights are unexpectedly canceled or significantly delayed.

Led by Tennessee Attorney General Jonathan Skrmetti, a bipartisan coalition of 26 attorneys general filed an amicus brief in the U.S. Supreme Court arguing that Google is not immune from liability under Section 230 of the federal Communications Decency Act. The brief urges the Court to interpret Section 230 narrowly to ensure technology companies remain accountable to state consumer protection laws. The brief filed in Google LLC v. Gonzalez maintains that Section 230 should not apply when a platform through its algorithms makes targeted recommendations of information provided by another information content provider.

Minnesota Attorney General Keith Ellison and North Carolina Attorney General Josh Stein with the Consumer Financial Protection Bureau (CFPB) and the Los Angeles City Attorney’s Office announced that more than 87,000 consumers nationwide who were harmed by a student loan debt-relief company will receive $95 million in restitution. The governments alleged that Consumer Advocacy Center Inc., d/b/a Premier Student Loan Center and related companies violated state and federal law by committing deceptive acts and practices related to Premier’s student-loan debt-relief services. The funds will be paid from the CFPB’s civil penalty restitution fund.

Led by Arkansas Attorney General Leslie Rutledge, North Carolina Attorney General Josh Stein, and Pennsylvania Attorney General Josh Shapiro, a bipartisan coalition of 51 attorneys general submitted comments supporting the Federal Communications Commission’s (FCC) proposal to help reduce illegal robotexts. The comments support requiring mobile wireless providers to block texts from invalid, unassigned, or unused numbers, and from numbers on a “Do Not Originate” list.

Led by Illinois Attorney General Kwame Raoul, a bipartisan group of 36 attorneys general announced a multistate settlement with CarMax Superstores Inc. (CarMax) over the disclosure of safety recalls. The settlement requires CarMax to disclose to consumers unrepaired recalls related to the safety of its used vehicles before vehicles are purchased and pay participating states a total of $1 million.

Oregon Attorney General Ellen Rosenblum and Utah Attorney General Sean Reyes announced a data breach enforcement case settlement with Avalon Healthcare Management (Avalon). The $200,000 settlement involved a 2019 data breach arising from a phishing scam directed to an employee that allowed the scammer to access the personal information and protected health information of 14,500 Avalon employees and patients. Each state will receive $100,000.

Individual Attorney General Actions

Alaska Attorney General Treg Taylor filed a lawsuit against Simple Save Protection LLC, a Missouri company that markets vehicle service contracts. The lawsuit alleges that the defendants sent deceptive mailers to Alaskans that were designed to make the recipients believe that they were being contacted by their vehicle’s manufacturer or dealer and that their warranty was set to expire.

Arizona Attorney General Mark Brnovich sued RLC Labs, an Arizona-based manufacturer of natural thyroid prescription drug tablets, for making false or misleading statements about its products. The complaint alleges that RLC Labs made false advertisements about the potency of two natural thyroid drugs: Nature-Throid and WP Thyroid. Although RLC Labs recalled the drugs and offered refunds, the lawsuit alleges that RLC Labs continued to make false or misleading statements.

Arkansas Attorney General Leslie Rutledge settled with the owners of a hospital for failing to protect sensitive patient information after the hospital closed. The consent judgment with Country Medical Services of Arkansas, Inc. provides for the lawful destruction of the records and a civil penalty of $770,000 that will be suspended if the terms of the judgment are followed.

Colorado Attorney General Phil Weiser secured $200,000 in refunds for Colorado customers wronged by Americor and Credit9’s financial practices. Americor, a California-based debt management company, through a related company, Credit9, allegedly unlawfully loaned money to consumers for whom it provided debt management services, contrary to Colorado law.

District of Columbia Attorney General Karl Racine sued SmileDirectClub, an online orthodontics company, for requiring harmed and dissatisfied consumers to sign nondisclosure agreements (NDAs) to receive promised refunds. The complaint also alleges that SmileDirectClub used NDAs so that customers who suffered painful and sometimes permanent injuries caused by the company’s products could not file complaints with government regulators or law enforcement if they wanted to receive refunds. Attorney General Racine also announced a new lawsuit against Amazon.com, Inc. and Amazon Logistics, Inc. (Amazon) for allegedly stealing tips from delivery drivers.  According to the complaint, Amazon caused consumers to think they were increasing drivers’ compensation when Amazon was actually diverting tips to reduce its own labor costs and increase profits. Amazon later reimbursed the Amazon Flex drivers as part of a settlement with the Federal Trade Commission, however, the complaint seeks civil penalties for violations of District of Columbia consumer protection law.

Florida Attorney General Ashley Moody sued Smartbiz Telecom, LLC (Smartbiz) for allegedly routing millions of foreign-based robocalls into the United States. The complaint alleges that Smartbiz, a Miami-based Voice over Internet Protocol telephone service, received multiple warnings that it was transmitting obviously fraudulent robocall traffic, but, nevertheless, continued to carry illegal robocalls. Records produced by the Industry Traceback Group, a neutral consortium appointed by the Federal Communications Commission, allegedly indicate that Smartbiz is one of the most prolific transmitters of illegal robocalls in the country.

Indiana Attorney General Todd Rokita announced two separate lawsuits against TikTok — both related to allegedly false claims made by the company about its video-sharing app of the same name. The first lawsuit alleges that TikTok has lured children onto the platform through a variety of misleading representations indicating that the app contains only “infrequent/mild” sexual content, profanity, or drug references — when in reality the app is rife with extreme examples of such material. The second lawsuit asserts that TikTok has highly sensitive personal information about Indiana consumers and has made deceptive representations that the information is protected from the Chinese government and Communist Party. The state is seeking emergency injunctive relief and civil penalties against the company.

Iowa Attorney General Tom Miller announced that Fort Dodge-based cosmetology school La/James International College will forgive an additional $461,771 in debts for approximately 116 students. The settlement resolves allegations that the school was in violation of a July 2016 consent judgment, specifically, provisions that require the college to not make false, deceptive, or misleading statements in connection with the recruitment of students or concerning financial aid.

Maryland Attorney General Brian E. Frosh announced an appellate court affirmed a trial court’s $3 million order against pay day lender Cash-N-Go. The final order requires Cash-N-Go, Inc., Brent M. Jackson, and related businesses owned and operated by Jackson to pay over $2.2 million in restitution to Maryland consumers and a $1,200,750 penalty to the State of Maryland. In its decision, the Maryland Court of Special Appeals held that the restitution awarded to consumers was appropriate when a lender makes a loan without the required license or charges a usurious interest rate.

Massachusetts Attorney General Maura Healey sued a Florida company for allegedly scamming struggling residents into mortgaging their homes in exchange for small cash payments. The complaint against MV of Massachusetts, LLC, a/k/a MV Realty, which presents itself as a real estate brokerage, alleges the company aggressively marketed a deceptive small dollar loan product to hundreds of financially struggling homeowners who received payments in exchange for a 40-year exclusive right for MV Realty to act as the listing brokerage when the homeowner decides to sell and other allegedly unlawful terms.

New Hampshire Attorney General John M. Formella entered into a $1.25 million settlement agreement with a Kia dealership resolving allegations of falsifying customer loan applications to qualify customers for loans they could not afford. DMO Auto Acquisitions, LLC (“DMO”) dba Dan O’Brien Kia, also agreed to pay consumer restitution, and hire an independent compliance monitor.

New Jersey Attorney General Matthew J. Platkin announced settlements with six different car dealerships totaling more than $260,000 to resolve allegations of consumer protection violations. The dealerships’ alleged violations include failing to list prior accidents, damage, and repairs made to vehicles; failing to honor the advertised price of a used car; charging excessive vehicle preparation fees that were not itemized or properly disclosed to the consumer; failing to provide a written warranty; failing to disclose the full sale price of a motor vehicle; and deceptive advertising.

New Mexico Attorney General Hector Balderas announced that his office has resolved opioid litigation against grocery and retail pharmacy giant Kroger Co. in a deal that will deliver nearly $60 million to the state and to local communities to fund opioid abatement efforts within the next 90 days. Kroger was one of three pharmacy defendants that went to trial against the state in September of this year. The agreement also envisions “injunctive terms that match but do not exceed the injunctive terms imposed in any executed global settlement.” A global settlement has not been announced.

New York Attorney General Letitia James entered into a $1.5 million settlement with energy service company, Major Energy, resolving claims that it deceived and misled thousands of consumers across the state. The $1.5 million will be paid in restitution to eligible customers. Energy service companies are not utilities but are regulated in New York and offer consumers electricity or natural gas to be delivered by regulated utility distribution companies. The settlement recited findings that Major Energy engaged in deceptive advertising, door-to-door and telemarketing sales, which were neither admitted nor denied by Major Energy.

North Dakota Attorney General Drew Wrigley obtained a judgment against a home improvement contractor, George Lavave, for failing to perform contracted jobs and for obtaining a contractor’s license by making false or misleading statements on his application. The judgment requires payment of $35,631 to impacted consumers, $2,000 in civil penalties, and $1,554 in attorney’s fees and costs. It also bans Lafave from contracting in North Dakota for at least five years, and until all amounts due in the judgment have been paid in full.

Pennsylvania Attorney General Josh Shapiro announced criminal charges against 30 individuals and 21 businesses for “title washing” and for re-titling stolen vehicles in three Pennsylvania counties. The alleged fraud was designed to bypass stict requirements for titles for reconstructed vehicles in states such as New Jersey and New York and make those vehicles look legitimate for resale or export. The participants allegedly obtained totaled vehicles, then falsified inspection information  and submitted fraudulent title applications to authorities and removed the Vehicle Identification Numbers (VINs) attached to each vehicle to bypass police detection of stolen vehicles.

Washington Attorney General Bob Ferguson filed a federal lawsuit against a plastic surgery provider for falsely and illegally inflating its ratings on online rating platforms. According to the complaint, Allure Esthetic, a major plastic surgery provider in Seattle, and its owner, Dr. Javad Sajan, allegedly intimidated patients into removing negative reviews, and ordered its employees to post fake positive reviews. The defendants allegedly violated the federal Consumer Review Fairness Act and Health Insurance Portability and Accountability Act, as well as state consumer protection laws.

Wisconsin Attorney General Josh Kaul settled with a direct mail marketer of extended vehicle warranty products. The consent judgment with Missouri-based US Automotive Protection Services, LLC (USAPS) resolves the state’s claims USAPS used various deceptive solicitations including leading consumers to believe USAPS was the provider of their existing vehicle warranty or that their existing warranty coverage was about to expire. The settlement requires payment of up to $200,000 and reimbursement of costs and attorney’s fees.

Other articles in this edition include:

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