The Washington State Legislature enacted legislation increasing civil penalties under the state’s consumer protection law. By substantially raising civil penalties, the new law provides the Attorney General significantly more leverage in enforcing Washington’s consumer protection statute.
Under that statute, it is deemed unlawful for a business to employ “unfair methods of competition and unfair and deceptive acts or practices in the conduct of trade or commerce.” The Washington consumer protection act also contains penalties for violating the state’s antitrust law and prohibition on restraint of trade. Consumers or the Washington Attorney General may bring actions to enforce against violations of the act.
Enacted on April 19, Senate Bill 5025 greatly increases existing penalties:
Lastly, the new law includes an enhanced penalty of up to $5,000 for “unlawful acts or practices that target or impact specific individuals or communities based on demographics,” including age, race, sex, sexual orientation, disability, religion, or veteran status.
Former California Assemblyman Rob Bonta was confirmed by the California Legislature on April 26 after being nominated by Gov. Gavin Newsom to replace former Attorney General Xavier Becerra. Mr. Becerra was nominated to be President Joe Biden’s Secretary for Health and Human Services and was confirmed in March.
One of General Bonta’s first moves as attorney general was to expand the Bureau of Environmental Justice to include more attorneys in order to “fight environmental injustices throughout the state of California” and give “voice to frontline communities who are all too-often under-resourced and overburdened.” The Bureau is charged with:
General Bonta is the state’s first Filipino American Attorney General. He is up for reelection in 2022 and already faces two opponents: former assistant U.S. attorney Nathan Hochman and Sacramento County District Attorney Anne Marie Schubert.
On December 11, 2020, New York led a broad coalition of states in filing a complaint against Facebook alleging antitrust violations under Section 7 of the Clayton Act and Section 2 of the Sherman Act. Facebook recently filed a motion dismiss, arguing:
According to the company’s motion to dismiss, the “complaint filed by the State Attorneys General does not and cannot assert their citizens paid higher prices, that output was reduced, or that any objective measure of quality declined as a result of Facebook’s challenged actions.” The motion to dismiss further states the State AGs “ground their lawsuit in public policy concerns … that are not competition-law concerns.”
The case is pending in the United States District Court for the District of Columbia.
Recently elected Indiana Attorney General Todd Rokita announced his office has opened an investigation into several Big Tech companies—Amazon, a leading tech company (U.S.), Facebook, Google, and Twitter—over allegations of the companies potentially harming Indiana consumers by limiting access to certain content on the companies’ platforms. According to General Rokita’s press release, his office is investigating whether the companies have potentially harmed consumers “through business practices that are abusive, deceptive and/or unfair.”
Attorney General Doug Peterson announced he has reached a settlement with two Nebraska companies for violating the Nebraska Consumer Protection Act and the Uniform Deceptive Trade Practices Act for making false statements in advertisements related to COVID-19. The company will pay $25,000 under the settlement.
The Nebraska complaint alleges the companies failed to inform consumers that antibody tests were not meant to diagnose or exclude active infection of the COVID-19 virus. Instead, the tests look for certain antibodies in the blood, which, if present, may indicate the individual previously was infected with the COVID-19 virus.
On April 22, 2021, the Louisiana Attorney General and nine other states filed a lawsuit in the U.S. District Court for the Western District of Louisiana challenging Section 5 of the Executive Order 13990 signed by President Joe Biden on his first day in office. Among other features, Section 5 of Executive Order 13990 establishes an “Interagency Working Group on the Social Cost of Greenhouse Gases” whose mission is to “publish an interim” social cost of carbon, social cost of nitrous oxide, and social cost of methane. According to the executive order, these are estimates of “monetized damages associated with incremental increases in greenhouse base emissions.” The executive order further directs all federal agencies in decision making, including rulemaking, to consider the social costs of greenhouse gas emissions.
The lawsuit alleges Executive Order 13990 violates the Administrative Procedure Act (APA) (5 U.S.C. § 706). According to the state AGs’ complaint, the executive order’s social costs of greenhouse gas emissions are substantive rules and thus must go through the APA’s notice and comment procedures to allow the public the opportunity to provide written comments. The complaint alleges that by failing to follow the notice and comment procedures, the executive order violates the APA. Additionally, the complaint alleges the social costs for greenhouse gas emissions are arbitrary and capricious. Finally, the complaint alleges the executive order is unlawful because no federal law authorizes that social costs of greenhouse gas emission values consider global effects. Instead, the complaint alleges authority only exists for domestic effects.
States joining Louisiana on the lawsuit are Alabama, Florida, Georgia, Kentucky, Mississippi, South Dakota, Texas, West Virginia, and Wyoming.
On April 21, 2021 state attorneys general from the District of Columbia sent a letter to Congress urging it to repeal the “True Lender” rule adopted by Trump administration.
During the Trump administration, the Office of the Comptroller of the Currency issued the “true lender rule” which sought to clarify the legal framework around bank lending partnerships involving loans originated by a national bank or federal savings association under a bank partner program. Specifically, the true lender rule sought to provide a clear rule on when the bank or the third party would be considered the lender in the transaction.
The state AGs argue in their letter to Congress that the true lender rule would “sanction high-cost lending schemes devised to evade state usury laws.” According to the state AGs, states have begun to pass usury interest-rate caps on “high-cost small-dollar loans in an effort to protect their consumers from predatory financial products.” The state AGs allege the true lender rule would be “exploited” by lenders “seeking to circumvent these state interest-caps and invite…predatory consumer-lending partnerships between banks and lightly regulated non-depository lenders.”
Under the Congressional Review Act (5 U.S.C. §§ 801-808), Congress may rescind administrative rules issued by federal agencies within a certain timeframe.
The letter was authored by Illinois Attorney General Kwame Raoul, and joined by Colorado, Connecticut, District of Columbia, Hawaii, Iowa, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nebraska, Nevada, New Jersey, New York, North Carolina, Oregon, Pennsylvania, Rhode Island, South Dakota, Vermont, Virginia, and Wisconsin.