State Attorneys General Continue to Flex Muscles During COVID-19 Pandemic

Over the past few weeks, the Orrick State Attorney General Practice Group has highlighted the numerous ways in which state Attorneys General are enforcing state laws in response to the COVID-19 pandemic. With some states starting to reopen, state AGs will also help shape and enforce the executive orders issued by the governors.

Below are areas in which state AGs are playing an active role in enforcing state laws during the COVID-19 pandemic.

Consumer Protection

• Price Gouging and Personal Protection Equipment: As discussed in a previous article, state AGs have actively investigated consumer protection complaints largely centered around price gouging and unfair and deceptive practices. State AGs have remained active in this area, especially regarding personal protection equipment, including N95 facemasks. Several state AGs issued a letter to 3M urging the company to increase efforts aimed at preventing price gouging of their products. Consumer protection issues will likely persist as the pandemic continues.
• Covid-19 Travel Related Refunds: Connecticut Attorney General William Tong has received numerous complaints from constituents regarding travel related cancellations. Attorney General Tong has secured refunds from hotels, airlines, and performances in cases where consumers either received vouchers or were unable to navigate the refund process. Attorney General Tong’s office has also issued guidance posted on his website.
• False Marketing of Covid-19 Tests: Colorado Attorney General Phil Weiser sent cease and desist letters to companies that marketed COVID-19 tests not yet approved by the Food and Drug Administration. According to Attorney General Weiser, “it is a violation of the Colorado Consumer Protection Act to falsely claim [the] tests are FDA approved or to withhold details about the known limitations of the tests.”

Privacy

• Prior to the pandemic, Zoom was a relatively unknown telecommunications company. Now the online platform has become ubiquitous for both professional and personal teleconference meetings and communication while the country sheltered in place. At the height of the pandemic numerous complaints began to surface of hackers accessing and disrupting Zoom meetings, sometimes with violent or pornographic content. This prompted New York Attorney General Letitia James to launch an investigation into the company’s privacy policies. Attorney General James recently issued a letter agreement regarding Zoom’s privacy and data security practices, along with its acceptable use policy. According to Attorney General James’ letter, “Zoom has cooperated with the NYAG” and “allowed a large number of New York residents and school children to use its service for free.” Therefore, in “recognition of the fact that Zoom [] acted quickly to address the issues identified” and has “worked cooperatively with” the Attorney General’s office, her office accepted a letter agreement containing steps the company must take in lieu of a lawsuit, including:
   
  
  • Implementing a comprehensive information security program designed to protect the security and confidentiality of personal information Zoom collects or receives;
  • Employing reasonable encryption and security protocols;
  • Offering educational materials about privacy controls for consumers, students, and universities and other institutions; and
  • Implementing audits and testing.

Landlord/Eviction Protections

• Most governors who issued stay-at-home executive orders for their states also issued orders suspending evictions during the pandemic. A few Attorneys General have either sent warning letters to landlords threatening to evict tenants or have filed lawsuits for failing to abide by the executive orders.
• Recently, New York Attorney General Letitia James issued a memo providing direction for law enforcement on unlawful evictions during the pandemic.
• Massachusetts Attorney General Maura Healey has also issued an advisory to “alert tenants and landlords about their rights and obligations under the emergency eviction moratorium” during the COVID-19 pandemic.

Sign-On Letters to Congress and Federal Agencies: Some AGs continue to weigh in on areas covered by federal law. For instance, state AGs express their legal and policy positions through “sign-on” letters. These letters are often started by one or a small group of state AGs, and then circulated to the other AGs. Below are sign on letters that have been sent by state AGs:

• Letter to Congress Supporting COVID-19 Pandemic Liability Protections: Led by Georgia Attorney General Chris Carr, and joined by 21 Republican state AGs, the letter urges Congress to enact liability protections for businesses related to COVID-19 litigation. The letter states that the pandemic is “likely to create a surge in civil litigation targeting well-intentioned businesses for taking pandemic mitigation measures.”
• Letter to Housing and Urban Development and Federal Housing Finance Agency Regarding Borrowers During Covid-19: Thirty-six state AGs (along with Washington, D.C. and Puerto Rico) sent a letter to HUD Secretary Dr. Ben Carson and FHFA Director Mark Calabria urging them to take a number of steps to revise the current forbearance programs to protect homeowners during the pandemic. The letter includes the following requested actions:
   
  
  • Revise the agencies’ forbearance programs so that the forborne payments are placed at the end of the loan’s term.
  • Expand the eligibility for loss mitigation programs for borrowers emerging from forbearance plans related to COVID-19.
  • Clarify that the moratorium on foreclosures and evictions applies to all aspects of the foreclosure or eviction process.
• Letter Urging Congress to Strengthen Paycheck Protection Program: Led by Massachusetts Attorney General Maura Healey, and joined by 24 Democratic AGs, the letter highlights the AGs’ “concerns about the implementation of the Paycheck Protection Plan” (PPP) authorized by the Coronavirus Air, Relief, and Economic Security Act (CARES Act). While noting some of the PPP’s achievements, the letter highlights numerous “shortcomings” and provides recommendations to fix those problems, including:
   
  
  • Require the Small Business Administration to prohibit applications from publicly traded companies with access to alternative funding sources.
  • Amend the PPP rules to prohibit lenders from “favoring” certain applicants over others. The letter further states that the lenders should be “directed to process loans for every small business that meets the program requirements, not just certain types of preferred pre-existing customers.”
  • Suggest Congress allocate a portion of future PPP funding “exclusively for minority-owned small businesses.”
  • Require SBA provide better communication with small businesses and “provide more direct information to small businesses during the application process.”
  • Ensure the PPP provides more “flexibility” for the “variety of circumstances small businesses find themselves in” during the pandemic.
  • The letter further calls for more transparency, better technical support, and lender guidance.
• Letter Asking U.S. DOJ to Investigate Meat Packing Companies for Antitrust Violations
   
  
  • In a bipartisan, the state AGs petition the U.S. Department of Justice to investigate potential market concentration and anticompetitive practices by the meat packers in the cattle industry. According to the letter, antitrust concerns about the cattle market are not novel. However, the letter notes that during the current pandemic the “concentrated market structure of the beef industry” is more “susceptible to market manipulation.”

Criminal Investigations – Nursing Home Neglect During COVID-19

While most state AG actions involve civil investigations or enforcement actions, some state AGs also have jurisdiction to investigate and file criminal enforcement actions. Pennsylvania Attorney General Josh Shapiro recently announced his office has opened criminal investigations into several Pennsylvania nursing homes.

COVID-19 and the Environment

Massachusetts Attorney General Maura Healey issued a report titled, “COVID-19’s Unequal Effects in Massachusetts.” The report discusses the “environmental factors that compound the COVID-19 pandemic’s disparate impact on communities of color in Massachusetts” and provides a number of steps to “address the longstanding impact of environmental injustice.”

Conclusion

These are just a few of the recent actions being taken by state AGs involving the COVID-19 pandemic. Attorneys General are increasingly active as they look for ways to enforce laws or regulations related to the pandemic. Businesses need to carefully think through any potential violations and consider drafting and implementing compliance protocols to ensure that they are in compliance with state and federal laws.