Orrick State Attorneys General Newsletter – December 2021

December.17.2021

  1. Texas Attorney General Files Third Amendment in Antitrust Lawsuit Against Google (Texas)
  2. Attorney General Hector Balderas Announces Landmark Settlements with Google over Children’s Online Privacy (New Mexico)
  3. Attorney General Bonta Announces Nationwide Investigation into Instagram’s Impact on Young People (California)
  4. Attorney General Karl Racine Adds Mark Zuckerberg to Washington, D.C.’s Lawsuit against Meta (Washington D.C.) (Washington D.C.)
  5. Attorney General Brnovich Reaches $14.5 Million Settlement with JUUL (Arizona)
  6. Attorney General Josh Stein Announces Lawsuit and Statewide Investigation on E-Cigarettes (North Carolina)
  7. Massachusetts Attorney General Healey Secures Nearly $51 Million from National E-cigarette Retailer and Owners for Marketing and Selling Vaping Products to Young People (Massachusetts)
  8. Attorney General Moody and FTC Recover $1.8 Million for Consumers in Florida and Nationwide Harmed by Robocall Scam (Florida)
  9. AG Frosh Sues Monsanto for Long-Lasting Harm from PCBs on Maryland’s Natural Resources (Maryland)
  10. Attorney General James Secures $40 Million From Vyera Pharmaceuticals, Bans Corporate Executive from Pharmaceutical Industry for Seven Years (New York)
  11. Healey’s Big Hire (Massachusetts)
  12. New York Attorney General James Drops Her Campaign for Governor (New York)
  13. Attorney General Shapiro’s Action Requires Marriott to Disclose ‘Resort Fees’ (Pennsylvania)
  14. Amazon Will Pay $2.5M over Illegal Sales of Regulated Pesticides (Washington)

1. Texas Attorney General Files Third Amendment in Antitrust Lawsuit Against Google (Texas) 

In December 2020, Texas led 17 states in an antitrust suit against Google, which argues that the company abused its monopoly power in online advertising. According to the lawsuit, Google “controls publishers on one side, advertisers on the other, and the [advertising market] exchange in the middle.” Google charges 19 to 22 percent on every advertising transaction.

Ken Paxton announced that he has amended the complaint against Google by including substantial additional evidence that allegedly underscores Google’s monopoly power.

2. Attorney General Hector Balderas Announces Landmark Settlements with Google over Children’s Online Privacy (New Mexico) 

Attorney General Hector Balderas has resolved two federal court cases against Google LLC, which alleged that the company violated the federal Children’s Online Privacy Protection Act and state consumer protection laws. Google has agreed to monitor its Google Play Store to “polic[e] app developers that mislabel their child-directed apps in an effort to make more money from targeted advertising and user profiling.” Google will also ensure “age screening measures” to prevent the apps from “collect[ing] information from children under the age of 13, and increasing parents’ visibility into what information apps are collecting from their children.”

Specifically for New Mexico, the settlement requires Google to create and fund the Google New Mexico Kids Initiative, which promotes education, privacy, and safety across the state. New Mexico schools will also get early access to Google’s Workspace for Education products.

3. Attorney General Bonta Announces Nationwide Investigation into Instagram’s Impact on Young People (California) 

California Attorney General Rob Bonta, along with the attorneys general from Florida, Kentucky, Nebraska, New Jersey, Tennessee and Vermont, is co-leading an investigation into Meta – the parent company of Facebook and Instagram – to understand the impact Instagram has on young people. Other states have joined the investigation, including Texas, New York, Massachusetts, Illinois, Pennsylvania, Connecticut, Virginia, North Carolina, Oregon, Colorado, Wisconsin, Michigan, and Missouri. The bipartisan nationwide coalition will investigate Meta “for providing and promoting its social media platform – Instagram – to children and young adults despite [allegedly] knowing that such use is associated with physical and mental health harms.”

The investigation followed reports from leaked documents that Meta’s internal research demonstrated the negative impact Instagram had on young people, especially young women. Attorney General Bonta announced the nationwide coalition will target “the techniques utilized by Meta to increase the frequency and duration of engagement by young users” and how that use harms them.

4. Attorney General Karl Racine Adds Mark Zuckerberg to Washington, D.C.’s Lawsuit against Meta (Washington D.C.) 

In 2018, Attorney General Racine sued Facebook (now Meta) for deceiving customers about the steps it took to protect their private data. After more than two years of reviewing documents and conducting depositions, Racine believed there was enough evidence to show that “Mark Zuckerberg knowingly and actively participated in . . . misrepresentations to users, the public, and government officials about how secure the data on Facebook was.” Racine hopes that the lawsuit will “send[] a strong message that corporate leaders, including CEOs, will be held accountable.”

5. Attorney General Brnovich Reaches $14.5 Million Settlement with JUUL (Arizona) 

In January 2020, Attorney General Mark Brnovich sued e-cigarette and vaping product manufacturer JUUL. The lawsuit alleged that JUUL marketed highly addictive nicotine products, targeting young people in ways that misled the youth about vaping risks. 

On November 23, 2021, Attorney General Brnovich announced a settlement with JUUL by which the company would pay $14.5 million to the state, as well as committing to a number of “company-wide changes to its business practices,” including, among others: (1) no marketing that appeals to or targets those under 21; (2) no marketing near schools; (3) no publishing advertising material on any social media or paying any social media influencer to promote JUUL; (4) no use of persons under 30 in advertisements; and (5) only selling JUUL behind store check-out counters or in a secured display case.

6. Attorney General Josh Stein Announces Lawsuit and Statewide Investigation on E-Cigarettes (North Carolina) 

Attorney General Josh Stein of North Carolina has announced a lawsuit against JUUL founders James Monsees and Adam Bowen. Stein also announced a statewide investigation into Puff Bar and other e-cigarette manufacturers, distributors, and retailers.

7. Massachusetts Attorney General Healey Secures Nearly $51 Million from National E-cigarette Retailer and Owners for Marketing and Selling Vaping Products to Young People (Massachusetts) 

Massachusetts Attorney General Maura Healey announced a $51 million settlement with Eonsmoke, which was an e-cigarette retailer until it ceased all operations and dissolved in 2020. The complaint filed by Healey against Eonsmoke in May 2019 alleged that the company used social media to target young people and that it did not verify online consumers’ ages between 2015 and 2018. The settlement also prevents Eonsmoke or its owners from selling, distributing, marketing, or advertising any tobacco product to consumers in Massachusetts moving forward.

8. Attorney General Moody and FTC Recover $1.8 Million for Consumers in Florida and Nationwide Harmed by Robocall Scam (Florida) 

Consumers nationwide should receive their share of a $1.8 million refund that Florida’s Attorney General Ashley Moody and the FTC achieved after shutting down Lifewatch, Inc., which (according to the investigation) pumped out more than one billion unsolicited robocalls pitching various products and services, including fraudulent medical alert systems. The company targeted seniors.

9. AG Frosh Sues Monsanto for Long-Lasting Harm from PCBs on Maryland’s Natural Resources (Maryland) 

Maryland’s Attorney General Brian Frosh sued Monsanto for harms that its polychlorinated biphenyls (PCBs) have continued to cause to Maryland’s land, waters, fish, and wildlife despite the federal government banning production of those chemicals in 1979.

Frosh alleges that Monsanto knew as early as 1937 that PCBs had “systemic toxic effects in humans and animals” and that they “are highly durable and do not naturally break down.” Monsanto was the only company to manufacture PCBs for widespread commercial use between 1935 and 1977.

10. Attorney General James Secures $40 Million From Vyera Pharmaceuticals, Bans Corporate Executive from Pharmaceutical Industry for Seven Years (New York) 

A recent federal district court decision in New York has affirmed that state attorneys general can seek disgorgement nationally from antitrust defendants, see FTC et al. v. Vyera Pharmaceuticals, No. 20cv00706 (S.D.N.Y. Sept. 24, 2021), even though the Supreme Court had limited the FTC’s capacity to do so, see AMG Capital Management v. FTC, 141 S. Ct. 1341 (2021).  That has given state attorneys general some leverage to push antitrust cases nationwide.

Led by New York Attorney General Letitia James and the FTC, a number of states, including California, Illinois, Virginia, North Carolina, Ohio, and Pennsylvania, announced a settlement against Vyera Pharmaceuticals and its parent company Phoenixus for their role in driving up the price of Daraprim, one of the few effective drugs used to treat toxoplasmosis. Martin Shkreli – infamous as “Pharma Bro” – and former CEO Kevin Mulleady raised the per-tablet price of Daraprim from $17.50 to $750 while simultaneously using a series of production and distribution agreements to “prevent entry of low-cost generic alternatives” into the market.

The settlement requires the companies to pay the states $40 million – which represents the profits from the drug – and bans Mulleady from working in the industry for 7 years, subject to a few exceptions. Shrkeli’s trial began on December 14, 2021.

11. Healey’s Big Hire (Massachusetts) 

Governor Charlie Baker recently announced that he would not run for reelection in 2022, despite being a popular two-term Republican governor of the Bay State. Attorney General Maua Healey has long been seen as Democrats’ strongest candidate for 2022 but she has not formally announced her candidacy. Nonetheless, Healey took a big step towards the run, hiring veteran Democratic strategist Mindy Myers to consult.

Myers had previously managed Senator Elizabeth Warren’s successful 2012 Senate campaign and then served as Warren’s chief of staff. As reported by Politico, Myers has also had several other high profile Democratic jobs. 

12. New York Attorney General James Drops Her Campaign for Governor (New York) 

Unlike her Massachusetts counterpart Maura Healey – who seems poised to run for governor – New York Attorney General Letitia James has unexpectedly suspended her campaign for New York governor only one month after launching. She instead will run for reelection.

James supported her decision by pointing to the “number of important investigations and cases . . . underway” and she “intend[s] to finish the job.” The announcement further complicates a competitive race as James now faces challenger Dan Goldman – former assistant U.S. Attorney for S.D.N.Y. and lead counsel for Democrats in President Trump’s first impeachment.

13. Attorney General Shapiro’s Action Requires Marriott to Disclose ‘Resort Fees’ (Pennsylvania) 

Attorney General Josh Shapiro pushed Marriot to agree to changing how it publishes its rates across the country. According to Shapiro, Marriot misled travelers by publishing rates without “resort fees” that only became apparent at checkout. The industry practice is known as “drip pricing,” where hotels gradually disclose fees to consumers at various steps along the booking process. Marriot has now committed to transparently publishing its rates.

14. Amazon Will Pay $2.5M over Illegal Sales of Regulated Pesticides (Washington) 

Washington’s Attorney General Bob Ferguson entered a consent decree with Amazon, requiring that the company stop selling regulated pesticides on its platform without a license and without properly informing consumers about the differences between such pesticides and standard home and garden products. Amazon can sell the products in the future if it obtains a license.

Amazon must pay $2.5 million and enact certain corporate reforms to prevent similar unlicensed sales in the future.