United States: State AG Updates: August 24-September 6, 2023

Each week, Crowell & Moring's State Attorneys General team highlights significant actions that State AGs have taken. Here are this week's updates.

Multistate

• A coalition of 10 state attorneys general, led by New York Attorney General Letitia James, submitted an amicus brief to the U.S. Court of Appeals for the Fifth Circuit in the case of Texas v. U.S. Environmental Protection Agency (EPA) supporting the EPA's decision disapproving Texas, Mississippi, and Louisiana's ("the States") state implementation plans (SIPs). EPA disapproved these SIPs for failing to satisfy the Clean Air Act's Good Neighbor Provision, which requires upwind States' SIPs to prohibit emissions that will contribute significantly to downwind states' nonattainment of or inability to maintain the federal ozone standards. The coalition's amicus brief counters the States' position by arguing that the Clean Air Act's cooperative federalism framework relies on the EPA's substantive role to protect downwind states from upwind pollution and the EPA properly used updated modeling to confirm disapproval of the SIPs.

• A coalition of 16 state attorneys general, led by Montana Attorney General Austin Knudsen, sent a letter to SEC Chair Gary Gensler urging the SEC to require any foreign-owned company to certify via a truly independent process that is compliant with Section 307 of the Tariff Act of 1930, which prohibits the import of any product manufactured wholly or in part by forced labor as a condition of being listed on a U.S. based securities exchange. The coalition sent the letter in response to "fast fashion" retailer SHEIN's potential Initial Public Offering. According to the letter, "government, watchdog, and media reports" allege that SHEIN's success is "made possible by forced labor, human rights violations, stealing other designers' work and the peddling of clothing made with potentially hazardous materials."

• A coalition of 33 attorneys general called on the U.S. Food and Drug Administration and its Center for Tobacco Products to do more to protect kids from e-cigarettes. The attorneys general recommend that the FDA prohibit all non-tobacco flavors in e-cigarettes, enact evidence-based limits on nicotine in e-cigarettes, restrict marketing that attracts youth, and close the "disposable loophole."

• A coalition of 54 attorneys general sent a letter to congressional leaders raising concerns about the many ways that AI technology can be misused to exploit children, particularly by creating child sex abuse material.

Arkansas

• Arkansas Attorney General Tim Griffin announced that his office won judgments in a Florida-based robocall scheme.

California

• California Attorney General Rob Bonta issued a statement supporting the U.S. Court of Appeals for the 7th Circuit's decision in Delandes v. McDonald's, holding that a lower court prematurely ruled against former McDonald's workers who are seeking to hold accountable the fast-food corporation for using "no-poach" agreements. In November 2022, Twenty states, including California, filed an amicus brief in support of the workers in this case. In California, employers, including employers who operate out of state but employ California residents, are generally prohibited from enforcing no-poach or non-compete agreements.

• Attorney General Bonta publicized a settlement with The Money Source, Inc., resolving allegations the company failed to properly process, and timely grant, mortgage deferment requests made by California military reservists called to active duty. As part of the settlement, The Money Source, Inc. will pay $58,000 in penalties, fully reimburse the affected reservists, and be subject to injunctive terms.

Florida

• U.S. District Judge Jose E. Martinez denied Voice over Internet Protocol provider, Smartbiz Telecom LLC's, motion to dismiss a lawsuit brought by Florida Attorney General Ashley Moody's office (OAG). The Court held that the OAG isn't preempted by the Federal Communications Commission and can enforce the Telephone Consumer Protection Act. According to the complaint, Smartbiz allegedly allowed spoofed first responder calls over its networks, despite being notified over 200 times of fraudulent calls it has transmitted. The judge also found that the OAG sufficiently alleged violations and has standing to pursue the lawsuit.

Georgia

• Georgia Attorney General Chris Carr warned Georgia residents to be on the lookout for possible price gouging and storm-related scams in the wake of Hurricane Idalia.

Indiana

• Indiana Attorney General Todd Rokita alerted consumers of recalled items, including digital video baby monitors that posed a fire risk.

• Attorney General Rokita filed a lawsuit against MV Realty in an effort to stop the company from negotiating contracts that violate Indiana law. The company is based out of Florida, but it operates in Indiana and several other states.

Maryland

• Maryland Attorney General Anthony G. Brown announced that his Consumer Protection Division reached a settlement with 786 Property Management, Inc. t/a Real Property Management Capital and its owner, Suleman Hooda. Allegedly charging illegal fees, failing to properly maintain and return security deposits, and acting as an unlicensed debt collector, the company and its owner signed an Assurance of Discontinuance agreeing to stop the practices and to pay restitution and a penalty.

Nevada

• Nevada Attorney General Aaron D. Ford publicized that he and his Bureau of Consumer Protection have spoken to Tesla representatives about a data security breach in May that compromised the personal information of current and former Tesla employees. According to Tesla, 7,409 current or former employees in Nevada were notified about the incident.

New Jersey

• New Jersey's Office of the Attorney General urged parents to take preventative measures to protect their children's sensitive personal information from being stolen or fraudulently used, and reminded residents to steer clear of illegal sites when betting on professional and college football or engaging in fantasy sports activities related to those sports.

South Dakota

• South Dakota Attorney General Marty Jackley announced that the public can now receive Consumer Alerts via email from the Attorney General's Consumer Protection Division.

Virginia

• Virginia Attorney General Jason Miyares announced an enforcement action against Blackstone Tobacco & Vape, Inc. (Blackstone Tobacco), a Virginia-based store, for allegedly violating the Virginia Consumer Protection Act. The attorney general alleges that the store sold illegal products containing tetrahydrocannabinol (THC) without child-resistant packaging or labeling and sold THC edibles to an underage consumer. According to the settlement, defendants are required to pay $12,500 in monetary relief.