State Attorneys General

Analysis and observations from former state attorneys general along with former deputy attorneys general, assistant attorneys general and chiefs of staff from some of the most active offices in the nation and top notch litigators experienced in defending lawsuits brought by state attorneys general.

State Attorneys General and Unfair or Deceptive Acts or Practices (UDAP): What to expect in the wake of COVID-19

Posted on June 17, 2020 By Thurbert Baker, Bill McCollum, Daniel C. Gibb, Samuel Olens and Jeff Modisett
Categories: State Attorneys General

Almost every state has its own deceptive and unfair trade practices law (UDAP), enforced by that state’s attorney general (AG). No fraud need be involved. The enforcement is civil, not criminal, but the statutory civil fines can be steep. The Federal Trade Commission (FTC) has ceded much of the enforcement to the states. In the wake of COVD-19, in addition to price-gouging, there will likely be many new enforcement actions against corporations who are alleged to have participated in unfair, deceptive or misleading acts that draw the attention of AGs.

In some instances, these enforcement actions will involve multistate investigations in which sizeable numbers of attorneys general join together to investigate and possibly litigate. Some examples of areas that may face scrutiny include the following:

Health Care: Off-Label Drug Use

Off-label prescriptions, or the use of pharmaceutical drugs for an unapproved indication or in an unapproved dosage, dosage form or age group, is generally legal and frequently used by healthcare providers.

While in general there is nothing illegal in the off-label use of prescription drugs by doctors, marketing of pharmaceuticals or use of a drug for purposes outside of regulatory approvals is prohibited in most cases, and pharmaceutical companies have frequently been the subject of state AG investigations for doing so. As the race to find treatments for COVID-19 continues to accelerate, it is likely that representatives of some pharmaceutical companies will face scrutiny for promoting off-label use with hospitals and doctors.

Hotels and Leisure

Norwegian Cruise Lines is already being investigated under UDAP based on alleged communications from company employees to customers who prepaid for cruises, to the effect that the Norwegian Cruise Line ships had been sanitized, and so there was nothing to fear from COVID-19 in taking the planned cruise. The company allegedly had ample notice that its “sanitation” was insufficient to prevent the spread of the virus.

Advertising

Companies that host advertisements designed to sell products on their internet sites and take a fractional share of the sales revenue or profits garnered from the ads can be held responsible for misleading statements in the ads or misleading information about the charges to customers. This is true even in instances in which the seller/advertiser is located overseas and out of reach of a US enforcement action. Increased online sales suggest that these kinds of investigations are likely to increase. For example, with a huge surplus of used cars now on the market for the foreseeable future, AG investigations of false, misleading or deceptive advertising in online advertisements for used cars likely will increase, as well as investigations of misleading auto financing proposals – areas of traditional active UDAP enforcement.

Dentons’ State Attorney General practice is a full-service, nationwide practice to advise and assist clients when dealing with state AGs and their staff. If you have questions or an interest in more information on any of the items above and would like to discuss, please contact State AG practice co-chairs Thurbert Baker and Bill McCollum.

Related Information

Please also view Dentons’ recently published alert: “U.S. Food and Drug Administration, Federal Trade Commission Step-Up Enforcement of Product Misbranding and Efficacy Claims Related to COVID-19” for more insight on FDA and FTC actions related to COVID-19.

State AGs Tackle COVID-19 Related Issues: Some Companies Likely to Face Investigation

Posted on April 3, 2020 By Thurbert Baker, Bill McCollum and Daniel C. Gibb
Categories: State Attorneys General

With the escalation of the COVID-19 pandemic and the steps taken by the federal and state governments to stem its community spread, state attorneys general (AGs) are confronting new issues that have emerged as a result of the public health emergency.

Deceptive Advertising: AGs are using state Unfair and Deceptive Acts and Practices (UDAP) statutes to investigate advertising by companies, or hosted on company websites, that may be false, deceptive or misleading to consumers about products (i.e. masks, hand sanitizer, etc.), treatments or risks associated with COVID-19. One AG recently filed a lawsuit against a televangelist for misrepresenting a product sold through his show as a cure for the novel coronavirus. Another opened an investigation of allegations a cruise line instructed staff to use scripts which may have misled customers as to COVID-19 risks. Investigations may be confined to a single state AG office or they could become part of a much wider multi-state AG investigation.

Outreach to the Lending Industry: AGs are beginning to advocate for financial relief for their consumers who are unable to pay bills due to the COVID-19 crisis. The Arizona Attorney General recently sent letters to more than 1,000 financial institutions that do business in his state, urging them to halt foreclosures, evictions, and repossessions for at least 90 days for customers who can demonstrate economic hardship due to this unforeseen crisis. The Colorado AG recently urged student loan servicers, creditors, and debt collectors to refrain from mandatory debt collection efforts from those who are unable to pay because of their financial circumstances. The AG indicated that his office would explore relevant legal avenues to protect borrowers going forward.

Price Gouging: AGs across the country have stepped up public awareness campaigns and civil enforcement efforts to crack down on reported instances of price gouging by unscrupulous sellers of items that consumers and health care workers need to protect themselves from the spread of COVID-19. Many AGs have established special hotlines to receive complaints of suspected price gouging and the AGs are issuing cease and desist letters to those sellers suspected of taking advantage of the public health crisis.

The Dentons State Attorney General practice is a full-service, nationwide practice to advise and assist clients when dealing with state AGs and their staff. The practice features bipartisan leadership from four former state AGs along with former deputy AGs, assistant AGs, chiefs of staff from some of the most active offices in the nation and top notch litigators experienced in defending lawsuits brought by state AGs. Receipt of an AG letter of inquiry or civil investigative demand (a subpoena AGs may issue without going to court) does not mean a lawsuit is coming, but it does mean an investigation has been opened and should not be taken lightly. If you receive an AG inquiry or investigative demand, or think the nature of your business might make it at risk of AG scrutiny, or have an interest in more information on any of the COVID-19 matters above and would like to discuss with the Dentons State AG team, contact Bill McCollum, Thurbert Baker or Dan Gibb.

Ohio Attorney General petitions for writ of mandamus to stop opioid trials

Posted on October 8, 2019 By Bill McCollum, Thurbert Baker, Samuel Olens and Daniel C. Gibb
Categories: State Attorneys General

The US District Court for the Northern District of Ohio is the home of a multidistrict litigation (MDL) aggregating more than 2,000 lawsuits from across the country in which state political subdivision plaintiffs have sued manufacturers, distributors and others they claim responsible for the nation’s opioid epidemic. The court has scheduled a consolidated seven-week bellwether trial for two of those subdivisions (Ohio’s Cuyahoga and Summit Counties) seeking $8 billion, to begin on October 21, 2019. On August 30, 2019, in the US Court of Appeals for the Sixth Circuit, the Attorney General of Ohio filed a petition for writ of mandamus on behalf of the State of Ohio. The petition states that if the consolidated trial proceeds on the theories pleaded in the complaints, it will include claims that belong to the State of Ohio and presents the following question:

Should a writ of mandamus issue to stop or delay the trial in order to protect Ohio’s sovereign right to litigate on behalf of its citizens as parens patriae?

In 2017, the Ohio Attorney General brought a civil action in a state court against several opioid manufacturers. In the petition the Ohio AG asserts that (i) the writ of mandamus is necessary to preclude a US district court from trying non-justiciable claims in a trial which, if unchecked, would cripple the federal dual sovereignty structure of the US; and (ii) only a state AG has parens patriae standing to prosecute claims vindicating generalized harm to a state’s inhabitants and that political subdivisions do not have parens patriae standing. The petition argues that the trial would fragment the State’s claims, pose a high risk of inconsistent verdicts, result in duplicative or overlapping damages and misallocate funds in the state. The AG further asserts that the counties advance claims that belong to the State in an effort to commandeer moneys that rightfully should be distributed across the state by Ohio.

Thirteen other states and the District of Columbia filed an amicus brief in support of the petition. At this writing, no hearing on the petition has been scheduled.

Newly elected state AGs outline enforcement priorities

Posted on January 25, 2019 By Daniel C. Gibb, Bill McCollum and Thurbert Baker
Categories: Dentons 50, State Attorneys General, Colorado, Georgia, Hawai`i

Eighteen new state attorneys general will take office in 2019. There will be new AGs in Alaska, Colorado, Connecticut, Delaware, Florida, Hawai`i, Illinois, Maine, Michigan, Minnesota, Missouri, Nevada, New York, Ohio, Rhode Island, South Dakota, Wisconsin and Wyoming. Politically speaking, the impact of the 2018 midterm elections on the AG landscape was decidedly mixed, with Democrats flipping four AG seats previously held by Republicans, and the GOP maintaining their strongholds in Florida and Ohio. Overall, the midterms shifted the balance of state AG seats nationwide to a Democratic majority. Democrats now occupy 27 AG seats (including in Washington, DC) and Republicans, 24.

Companies should be aware that the newly elected AGs are expected to be as aggressive, or more so, than their predecessors. In Connecticut, for example, AG William Tong is succeeding AG George Jepsen, who led some of the largest bipartisan multistate investigations, including into opioid manufacturing and distribution, alleged price fixing in the generic drug market, and data privacy issues. Tong has signaled his intention to continue with these efforts, recently declaring: “I’ve always been activist in the legislature and I’m going to be activist as an attorney general because that’s what you need right now.”[

Other new AGs have started identifying their enforcement priorities. Some newly elected Democratic AGs have announced plans to investigate President Trump’s various business organizations. Others are targeting the administration’s policies. Illinois AG Kwame Raoul is challenging a recent ruling by a federal judge in Texas striking down the Affordable Care Act[, while Nevada AG Aaron Ford has indicated that he will reverse the course set by his predecessor, Republican Adam Laxalt, a staunch opponent of the ACA.

In Colorado, AG Phil Weiser, a Democrat, has outlined his intention to join a lawsuit against opioid manufacturers for allegedly misleading users as to the drugs’ addictive qualities, defend against federal overreach Colorado’s right to decide how it legislates and manages marijuana use, and protect consumers against financial scams. Minnesota AG Keith Ellison, a former Democratic congressman from the state’s 5^th District, has pledged to address drug-pricing issues and allegations of anti-competitive activity in the nation’s agricultural sector. “We want to stand with Minnesotans against the big entities in this world as you are trying to make a go in this economy,” he recently told his constituents. “The middle class, I believe, is hanging on barely, and I think the attorney general ought to stand up against the fraudsters, against the monopolies, against these folks who would make your life so much more difficult to afford.”

New elected Republican AGs, for their part, are expected to continue their party’s stalwart defense of the Trump administration through the filing of amicus briefs in high-profile lawsuits challenging his executive orders and final agency actions. But they will also ramp up state enforcement actions in certain areas. For example, Ohio Republican AG Ted Yost is expected to continue his scrutiny of pharmacy benefit managers (PBMs), an industry that he focused on during his time as Ohio State Auditor.

State attorneys general will continue to combine their resources in an ever-growing number of multistate and multi-defendant investigations and civil and criminal enforcement actions, raising the stakes for both individual companies and entire industries. In addition to the issues the AGs campaigned on in the midterm elections, there’s no telling what new issues they will involve themselves in, given the unpredictability of the Trump administration. More relevant to assessing and addressing a business’s regulatory risks is understanding the scope of a particular AG’s authority, its level of activity and the political dynamics framing its choices.

Wisconsin drug take back initiative nets 63,000 pounds of unused meds

Posted on June 4, 2018 By James Richardson
Categories: Dentons 50, State Attorneys General

The following comes by way of Dentons50 partner firm Capitol Consultants.

Attorney General Brad Schimel announced Wisconsin had become the national leader in drug take backs, netting some 63,541 lbs. of unused medications as a result of its Drug Take Back events on Saturday, April 28, 2018, at nearly 390 permanent drug collection receptacles located throughout the state.

Schimel also announced Wisconsin’s Sexual Assault Kit Initiative (WiSAKI), a statewide effort to address the decades-long accumulation of previously un-submitted sexual assault kits (SAKs) that were in the possession of local law enforcement agencies and hospitals, has completed inventorying all of these kits, collected those designated for testing, and submitted them to contracted laboratories for testing. Testing will be complete by the end of 2018.

CT AG leads states in support of feds’ CFPB

Posted on January 25, 2017 By James Richardson
Categories: Dentons 50, State Attorneys General

The following policy dive is courtesy of Dentons50 partner Jim O’Brien

Connecticut Attorney General George Jepsen this week marshaled a group of 16 other attorneys general in support of the Consumer Financial Protection Bureau (CFPB), filing a motion to intervene in a federal appeals case considering the agency’s constitutionality.

The case–PHH Corporation, et al. v. Consumer Financial Protection Bureau–is currently before the United States Court of Appeals for the District of Columbia Circuit. In an October 2016 ruling, a divided court found the structure of the CFPB unconstitutional. The CFPB filed a petition for rehearing of the decision, and that petition is currently pending before the court. To this point, the Obama administration had vigorously defended the CFPB in the appeal.

In today’s motion to intervene in the litigation, the attorneys general argue that they have a vital interest in defending an independent and effective CFPB. They have used their authority to bring civil actions in coordination with the CFPB to protect consumers against unfair, deceptive and abusive financial practices. They argue that the court’s ruling, if permitted to stand, would undermine the power of state attorneys general to effectively protect consumers against abuse in the consumer finance industry, and significantly lessen the ability of the CFPB to withstand political pressure and act effectively and independently of the President.

Trump names picks for AG, CIA, National Security Advisor

Posted on November 18, 2016 By James Richardson
Categories: Dentons 50, State Attorneys General

President-elect Donald Trump tapped a trio of loyalists for senior roles Friday, offering an early blueprint of the incoming Republican administration’s policy priorities.

In a statement to the press, the president-elect said today he had named Jeff Sessions, the U.S. senator from Alabama who previously served as the state’s attorney general, as U.S. Attorney General and offered the role of director of the Central Intelligence Agency to Kansas Republican Congressman Mike Pompeo. Both nominations require confirmation by the U.S. Senate.

Separately, Trump named retired Lt. General Michael Flynn to serve as National Security Advisory, which does not require Senate consent.

The nominations mark the first public sign of progress for Mr. Trump’s transition, which had been plagued in recent days amid staff upheaval, removing New Jersey Governor Christ Christie and several of his top lieutenants from leadership positions.

Both Flynn and Sessions were early, vocal supporters of Mr. Trump’s campaign for president, often offering guidance throughout the long slog to the White House.

North Carolina barreling into recounts

Posted on November 9, 2016 By James Richardson
Categories: Dentons 50, State Attorneys General, Elections

The following election speed read comes by way of Dentons 50 partner Lisa D. Martin.

North Carolina found itself bracing for possibly three distinct vote recounts as the sun rose Wednesday across the election-weary state.

In the race for the governor’s mansion, Democrat Roy Cooper leads incumbent Pat McCrory by 5,001 votes or 0.11% in the most recent count, falling within the legal margin for a recount.

Other Council of State races that could result in a recount include the attorney general's contest in which Democrat Josh Stein leads Republican Buck Newton by 20,793 votes or .46% and the state auditor's race in which incumbent Democrat Beth Wood leads Republican challenger Chuck Stuber by 3,101 votes or .06%.

The how-to of North Carolina's recount law: A losing candidate may request a recount in Statewide races if their losing margin is within .5% or 10,000 votes (whichever is less) after the final vote is certified in the canvas. Canvas in North Carolina will occur on November 18th. Candidates have until noon on the following second business day — which is November 22nd — to request a recount.

From DC to Denver

Posted on April 6, 2016 By Amy Stephens
Categories: Dentons 50, State Attorneys General

In addition to providing updates on policy, lobbying and regulatory issues in Colorado’s legislative and executive branches, Dentons’ Colorado Government Affairs team looks at political and policy developments in Washington, DC, that are pertinent to the state. Below we discuss the difficulties that California Senator Dianne Feinstein has faced mustering support on the Hill for her water policy bill, sweeping legislation that addresses recycling, storage, desalination and grants. On the home front, we look at the Colorado legislature’s difficulty crafting budgets 25 years after the state’s voters approved TABOR, arguably the most restrictive tax and spending limitation in the country.

News and legislative highlights this week

Federal news

Feinstein grappling with difficulty of water legislation

In an attempt to maximize water supply for the drought-plagued Western states, Senator Dianne Feinstein (D-CA) introduced a sweeping water policy bill that addresses recycling, storage, desalination and grants. But Feinstein admitted to the Sacramento Bee reported that she’s been having a tough time achieving buy-in from her Senate colleagues for the $1.3 billion initiative. In fact, the effort has been more challenging than her repeated attempts to renew the Federal Assault Weapons Ban that expired in 2004. The water bill, she told the publication’s editorial board, has already undergone 26 drafts, with 43 amendments in the last version alone.

Colorado news

Colorado legislature is budget, budget, budget, this week

The Colorado legislature debates the state budget this week and next with this year’s budget starting in the House. The $27 billion dollar budget, crafted by the Joint Budget Committee, is always a shell game of balance with the committee eliminating $59 million in taxpayer refunds under TABOR.