April.29.2022
1. State Attorney General Primary Runoffs Will Begin in May
The office of Attorney General is on the ballot in 31 states in 2022, making it a very active year politically. The Orrick State Attorney General Team has published an election preview with information about the incumbents and candidates in each state. One of the most notable elections is in Texas where Lands Commissioner George P. Bush faces incumbent Attorney General Ken Paxton in a primary runoff election on May 24. Idaho Attorney General Lawrence Wasden is facing a May 17th primary challenge by former Republican U.S. Representative Raul Labrador.
The Orrick State AG Team will provide timely updates throughout the election season.
2. State AGs Submit Letter to GoFundMe Expressing Concern Over Terms of Service
A bipartisan group of 25 state Attorneys General recently sent a letter to the online fundraising company, GoFundMe, seeking information pertaining to its terms of service.
The state AGs expressed concern over GoFundMe’s current terms of service which provide that the company may suspend or remove a user’s account, freeze a donation, or stop payment to a fundraiser for “any activity that GoFundMe may deem, in its sole discretion, to be unacceptable.”
According to the Attorneys General, if the company is “making opaque and unilateral decisions about which fundraisers are legitimate and which fundraisers to re-route donations to irrespective of initial donor choice, GoFundMe has likely crossed the line from fundraising platform to fundraiser itself.” The letter lists numerous questions for the company to answer regarding how it determines whether to block, freeze, or redirect refund donations.
3. New York Attorney General Sues MoneyGram for Alleged Consumer Protection Violations
New York Attorney General Letitia James sued MoneyGram, a money transfer provider, for allegedly violating consumer protection statutes. According to the complaint, MoneyGram failed to deliver funds to recipients in a timely manner or refund consumers when transfers were delayed. Specifically, the complaint alleges that MoneyGram did not accurately notify consumers when their transfers would be available to recipients abroad and failed to implement policies that protected consumers, thus leaving consumers unaware about their money transfers when something went wrong.
The complaint alleges MoneyGram violated the federal Consumer Financial Law (12 U.S.C. § 5536), Electronic Fund Transfer Act (15 U.S.C. § 1693), and Remittance Rule (12 C.F.R. §§ 1005.31(b) and (f). In addition to seeking an injunction enjoining MoneyGram from committing future violations, the complaint seeks refunds to consumers, restitution, as well as damages.
4. State Attorneys General Urge Banks to End Overdraft Fees
Democratic Attorneys General from 18 states sent a letter to a few large banks urging them to “follow the lead” of their peers that have announced they are ending overdraft fees for consumers. According to the letter, “consumers of color are disproportionately affected by [overdraft] fees, which frequently result in account closure and leave many affected consumers entirely unbanked.”
The letter further notes that the federal Consumer Financial Protection Bureau is launching an initiative to “reduce exploitative ‘junk fees’ and save billions for households.” The letter concludes by calling on the bank to “consider the enormous societal costs of overdraft, overdraft protection and similar fees, and to commit immediately to the elimination of such practices on the same timetable” as other firms.
5. State AGs Ask CFPB to Prohibit Mortgage Servicers from Charging Consumer Convenience Fees
Twenty-two Democratic Attorneys General submitted a letter to the federal Consumer Financial Protection Bureau urging it to prohibit mortgage servicers from charging convenience fees. The letter states that convenience fees are based on the use of a certain type of payment method, such as making a payment over the telephone, through a website, or through a third-party service.
The AGs specifically request the CFPB to “consider prohibiting mortgage servicers from imposing convenience fees on consumers,” or, alternatively, prohibiting “services from charging convenience fees that exceed the actual cost of processing the consumers’ payment and require servicers to fully document the costs supporting the imposition of these fees.”
They further ask the CFPB to “investigate fees in other captive markets where consumers do not have the ability to take their business elsewhere to avoid the fees, or where fees imposed on consumers are hidden profit centers for companies without an ability by consumers to adequately avoid such fees.”
6. Attorneys General from Virginia and Washington, D.C. Launch Investigations into Actions Taken by Washington Commanders’ Owners
Virginia Attorney General Jason Miyares has initiated an investigation into the owners of the Washington Commanders for alleged financial improprieties, while Washington, D.C. Attorney General Karl Racine is investigating the team’s owners for alleged sexual harassment and workplace misconduct.
The investigations were initiated after the House of Representatives Oversight and Reform Committee sent a letter to the Federal Trade Commission providing information alleging that the team “may have intentionally withheld millions of dollars in refundable deposits owed to fans, and concealed revenues that were owed to the [National Football League] as part of the League’s revenue-sharing agreement.”
The new information regarding the alleged financial improprieties came to light after the Oversight and Reform Committee began investigating the owners for alleged workplace violations.
7. Louisiana Attorney General Jeff Landry Sues UnitedHealth for Alleged Consumer Protection Violations Regarding Prescription Drug Pricing
Louisiana Attorney General Jeff Landry filed a complaint against OptumRX (“Optum”), a pharmacy benefit management organization, or “PBM,” for alleged violations of the Louisiana Unfair Trade Practices Act (LUTPA) and the Louisiana Medical Assistance Programs Integrity Law (LMAPIL), as well as for breach of contract and unjust enrichment. Optum is also owned by the health insurer, United Healthcare of Louisiana.
The complaint alleges the two companies “exploit[] the secrecy that surrounds the real prices paid for prescription drugs through the supply chain, as well as the complex system of rebates, reimbursements, and other payments” which caused the Louisiana Medicaid Program to “needlessly pay billions of dollars more per year for prescription drug benefits than they otherwise would.”
The complaint further alleges that UnitedHealthcare “gets to count overpayments it makes to its wholly owned PBM subsidiary as an ‘expense’ to help” the company “satisfy its statutorily required medical loss ratio.” According to the complaint, the more these expenses are “inflated, and the less transparent the billing is to Louisiana Medicaid, the greater the illicit profits for Optum and United.”
The complaint seeks injunctive relief, along with restitution to the State of Louisiana, expenses, attorney’s fees, actual damages, and a civil fine of three times the State’s actual damages resulting from the alleged violations.
8. New York Attorney General Begins Price Gouging Rulemaking
New York Attorney General Letitia James announced earlier this spring that her office has initiated a rulemaking to enforce provisions of the state’s price gouging statute. This in-depth article discusses the proposed price gouging rulemaking and the specific questions posed by the Attorney General for public comments.