Multistate Actions
A bipartisan coalition of nine states joined the U.S. Department of Justice in filing an antitrust action against Google alleging monopolization of ad tech markets. The lawsuit alleges Google leverages control over the technologies through which web display ads are bought and sold, driving out competition and receiving profits that far exceed what could be sustained in a competitive market and also disproportionately hurting advertisers, small businesses, website creators, and consumers. The coalition seeks to block Google’s allegedly anticompetitive practices, unwind anticompetitive acquisitions, and impose a remedy that prevents harm to competition in the future.
Led by New York Attorney General Letitia James, a multistate coalition obtained up to $24 million from cryptocurrency companies Nexo Inc. and Nexo Capital Inc. (Nexo) for allegedly engaging in the unregistered offer and sale of securities and commodities and for lying to investors about their registration status. The U.S. Securities and Exchange Commission also announced a parallel settlement in which Nexo agreed to pay an additional $22.5 million and cease the offer and sale of variable-rate Earn Interest Product (EIP) accounts in the United States. In addition, the settlement requires Nexo to notify all its U.S. investors to withdraw their assets from the platform. New York will receive more than $1.9 million from Nexo as part of today’s agreement.
Individual Attorney General Actions
California Attorney General Rob Bonta announced a lawsuit against the nation’s largest insulin makers and pharmacy benefit managers (PBMs) for allegedly driving up the cost of insulin through business practices that violate California’s Unfair Competition Law. The complaint alleges manufacturers Eli Lilly, Novo Nordisk, and Sanofi, who produce over 90% of the global insulin supply and pharmacy benefit managers CVS Caremark, Express Scripts, and OptumRx, who are responsible for roughly 80% of prescription claims managed, have leveraged their market power to overcharge patients.
Colorado Attorney General Phil Weiser secured $4 million in refunds for Colorado borrowers who were entitled to refunds of guaranteed auto protection (GAP) fees from Bellco and Canvas credit unions. An investigation revealed that Bellco and Canvas allegedly failed to refund unearned GAP fees owed to consumers. The settlements with Bellco and Canvas are the latest actions in Weiser’s on ongoing initiative related to GAP.
Georgia Attorney General Chris Carr announced that Elite Integrated Medical, LLC and its owner Justin Paulk, will pay $287,631 in restitution to resolve claims they marketed unproven regenerative products and therapies not covered by Medicare or health insurance and targeted older or at-risk adults. The consent judgment also permanently prohibits Elite from selling or advertising stem cell therapy products or services.
Maine Attorney General Aaron Frey announced a $125,000 settlement with a company that threatened customers who left negative reviews. Liberty Bell Moving and Storage Inc. and its owner, Kevin Finkenaur, agreed to the settlment which resolved allegations the company violated the federal Consumer Review Fairness Act and the Maine Unfair Trade Practices Act.
Maryland Attorney General Anthony G. Brown announced a settlement with Charm City Puppies, Inc. and its owner, Wayne Cossentino (Charm City Puppies) regarding alleged violations of Maryland’s “No More Puppy Mills Act” which bans retail pet stores from selling puppies. Charm City Puppies and its owner agreed to refund payments made by Maryland consumers who purchased dogs with certain conditions since January 1, 2020, or pay for treatment and pay a civil penalty of at least $75,000.
The Massachusetts Attorney General’s Office announced a $3.5 million settlement with Aspen Dental Management, Inc. (Aspen Dental) resolving claims that the dental chain cheated thousands of Massachusetts consumers through a series of bait-and-switch advertising campaigns and violated a 2014 settlement addressing similar conduct. The consent judgment requires Aspen Dental to pay $3.5 million and injunctive relief related to the advertisement of certain claims.
Missouri Attorney General Andrew Bailey obtained an $800,000 settlement with timeshare exit sellers Vacation Consulting Services, LLC; VCS Communications, LLC; The Transfer Group, LLC; Real Travel, LLC; and their owner Brian Scroggs for allegedly failing to let consumers out of their timeshare agreements. Under the consent judgment, $700,000 will be paid for consumer restitution, $50,000 for civil penalties, and $50,000 to fund future investigations and litigation. Scroggs and the other defendants are also permanently enjoined from marketing or selling third party timeshare exit services in Missouri.
New Jersey Attorney General Matthew J. Platkin reached a $27.375 million settlement with Yellowstone Capital LLC, and related entities over unlawful lending, servicing, and collection allegations. The defendants allegedly targeted small businesses with unlawful practices through their merchant cash advance business. As part of the settlement, all New Jersey business customers will have their outstanding balances forgiven, worth an estimated $21.75 million. The remaining $5.625 million will be paid to the state for restitution, civil penalties, attorneys’ fees, and costs.
New York Attorney General Letitia James and the Consumer Financial Protection Bureau (CFPB) sued Credit Acceptance Corporation (CAC), one of the nation’s largest subprime auto lenders, for allegedly deceiving thousands of low-income New Yorkers into high-interest car loans. The lawsuit alleges that CAC pushed unaffordable loans onto tens of thousands of low-income consumers throughout the state without considering their ability to repay their loans in full. Attorney General James also announced the recovery of more than $422,000 for hundreds of tenants whose security deposits were allegedly illegally withheld by Fairfield Properties (Fairfield). The state found that Fairfield illegally withheld full or partial security deposits without providing tenants with a written itemized list of deductions, inspected apartments without the tenant present, and did not allow tenants to make repairs before vacating their apartment to avoid penalties.
North Dakota Attorney General Drew Wrigley obtained a proposed consent judgment with a photography company, its owner, and former employee. The defendants admitted to soliciting advance payments for wedding photography or videography and then failing to provide the services due to financial problems that were not properly disclosed to consumers. The State of ND vs. Glasser Images LLC bans Glasser Images and the individual defendants from owning or operating a photography business in North Dakota for at least fifteen years and payment of $807,188 in restitution and a $30,000 civil penalty. The owner and employee, each of whom filed bankruptcy, agreed that the restitution and civil penalty would not be dischargeable in their respective bankruptcies.
Ohio Attorney General Dave Yost sued six individuals and six companies that allegedly relied on illegal robocalls to identify sales leads so they could then pitch purported car warranties to Ohio residents. The complaint alleges that Delaware-based Pelican Investment Holdings was paying for leads to initiate outbound prerecorded calls to consumers to market and sell “vehicle service contracts.” The prerecorded messages allegedly misrepresented the essence of the call, failed to properly identify the calling party, and falsely claimed that the call was about extending the consumer’s auto warranty and was affiliated with the auto manufacturer.
Oregon Attorney General Ellen Rosenblum sued one of the largest towing operations in Oregon for allegedly illegally towing vehicles from parking facilities without signed authorization from the owner of the parking facility. The lawsuit against Retriever Towing alleges the company violated an Oregon law that prohibits towing vehicles from parking facilities unless the towing company received signed authorization to tow the specific vehicle from the owner of the parking facility or the owner’s agent. The law also prohibits towing cars for relatively minor parking violations unless the property owner or its agent was willing to authorize the tow.
Vermont Attorney General Susanne Young filed a lawsuit against Nano Hearing Aids for allegedly misleading consumers about the effectiveness and quality of its products. The lawsuit alleges that Nano made misleading statements on its website and in advertisements implying its products are FDA-approved, and falsely representing its products as American-made. The suit also alleges that Nano put consumers’ health at risk by promoting a deceptive online “hearing test” that leads consumers to believe their test results are reviewed by hearing experts, when they are not, and invariably recommends the purchase of Nano’s most expensive product regardless of the results.
Other articles in this edition include:
