Orrick State Attorney General’s Bulletin – May 2021 | Orrick, Herrington and Sutcliffe LLP
Washington State Enacts Law to Increase Sanctions Under the Consumer Protection Act
The Washington State Legislature enacted legislation increasing civil penalties under the national consumer protection law. By dramatically increasing civil penalties, the new law gives the attorney general much more leverage to enforce Washington’s consumer protection law.
Under this status, it is illegal for a business to employ “unfair competitive methods and unfair and deceptive acts or practices in the conduct of trade or commerce”. Washington’s Consumer Protection Act also contains penalties for violations of state antitrust law and the prohibition on restricting trade. Consumers or the Washington Attorney General can sue violations of the law.
Adopted on April 19, Senate Bill 5025 significantly increases the existing penalties:
- For consumer protection violations from $ 2,000 per violation to $ 7,500 per violation.
- From $ 25,000 to $ 125,000 for violating an injunction issued under the Consumer Protection Act.
- For violations of antitrust laws and trade restriction by anyone from $ 100,000 to $ 180,000.
- For violations of antitrust laws and trade restriction by any company from $ 500,000 to $ 900,000.
Finally, the new law provides for an increased penalty of up to $ 5,000 for “unlawful acts or practices that target or affect specific individuals or communities based on demographics”, including age, race, gender, sexual orientation, disability, religion or veteran status.
California Attorney General Rob Bonta Confirmed By California Legislature To Replace Former GA Xavier Becerra
Former California congressman Rob Bonta was confirmed by the California legislature on April 26 after being appointed by Gov. Gavin Newsom to replace former attorney general Xavier Becerra. Mr Becerra was appointed health and social services secretary to President Joe Biden and was confirmed in March.
One of the first steps General Bonta took as attorney general was to expand the Environmental Justice Office to include more lawyers in order to “fight environmental injustices throughout the state of California “and” give voice to frontline communities that are too often underfunded and overburdened. ” The Bureau is responsible for:
- Ensure compliance with the California Environmental Quality Act and land use planning laws;
- Penalization and prevention of illegal discharges into the air and water of facilities in communities… disproportionately burdened by pollution;
- Eliminate or reduce exposure to lead and other toxins in the environment and consumer products;
- Sanitation of contaminated drinking water; and
- Challenge federal government actions that repeal or reduce public health and environmental protection measures.
General Bonta is the state’s first Philippine US attorney general. He is re-elected in 2022 and already faces two opponents: former U.S. Deputy Attorney Nathan Hochman and Sacramento County District Attorney Anne Marie Schubert.
Facebook calls for State AGs’ antitrust complaint to be dismissed
On December 11, 2020, New York led a broad coalition of states in filing a lawsuit against Facebook alleging antitrust violations under Section 7 of the Clayton Act and Section 2 of the Sherman Act. Facebook recently filed a dismissal request, arguing:
- States do not have the capacity to bring the case;
- Claims based on Facebook acquisitions are prohibited by the doctrine of cowardice or unfair delay;
- The States do not make a Section 7 claim because the States only allege that Instagram and WhatsApp were potential competitors and only speculated that these potential rivals could have provided benefits to competition and to consumers. ; and,
- The state’s Sherman Act claim fails because states do not claim that Facebook has monopoly power or have not alleged exclusionary behavior.
According to the company’s dismissal petition, “the complaint filed by state attorneys general does not and cannot assert that their citizens paid higher prices, that production was reduced, or that any objective measure of quality has declined as a result of Facebook’s disputed actions. The motion to reject further states that state AGs “are basing their legal action on public order concerns.[…]which do not fall under competition law ”.
The case is pending in the United States District Court for the District of Columbia.
Indiana Attorney General Rokita Announces Big Tech Investigation into Content Censorship
Newly-elected Indiana Attorney General Todd Rokita announced that his office has opened an investigation into several large tech companies – Amazon, Apple, Facebook, Google and Twitter – into allegations the companies could harm consumers of Indiana by restricting access to certain business content. platforms. According to General Rokita Press release, his office is investigating whether companies have potentially harmed consumers “through abusive, deceptive and / or unfair business practices.”
Nebraska AG Doug Peterson Reaches Deal With Company Over Misleading, False Claims Regarding COVID-19 Antibody Testing
Attorney General Doug Peterson announced that he had struck a deal with two Nebraska companies for violating the Nebraska Consumer Protection Act and the Uniform Deceptive Trade Practices Act for making false statements in COVID-19-related advertisements. The company will pay $ 25,000 for the regulation.
Nebraska complaint alleges the companies failed to inform consumers that antibody tests were not intended to diagnose or rule out active infection with the COVID-19 virus. Instead, the tests look for certain antibodies in the blood, which, if present, can indicate that the individual has already been infected with the COVID-19 virus.
Coalition of State AGs files legal action challenging President Biden’s executive order requiring agencies to factor the “social cost” of greenhouse gases into regulatory actions
On April 22, 2021, the attorney general of Louisiana and nine other states filed a lawsuit in U.S. District Court for the Western District of Louisiana challenging Section 5 of the Executive Decree 13990 signed by President Joe Biden on the first day of his term. Among other features, section 5 of Decree 13990 establishes an “Inter-agency working group on the social cost of greenhouse gases” whose mission is to “publish a provisional social cost” of carbon, the social cost of carbon dioxide. nitrogen and the social cost of methane. According to the decree, these are estimates of “monetized damage associated with progressive increases in basic greenhouse emissions”. The decree further directs all federal agencies in decision-making, including regulation, to take into account the social costs of greenhouse gas emissions.
The lawsuit alleges that Executive Order 13990 violates the Administrative Procedure Act (APA) (5 USC § 706). According to the state AG’s complaint, the social costs of the decree’s greenhouse gas emissions are substantive rules and therefore must go through the APA’s notice and comment procedures to allow the public to provide written comments. The complaint alleges that by failing to follow the notice and comment procedures, the decree violates the APA. Further, the complaint alleges that the social costs of greenhouse gas emissions are arbitrary and capricious. Finally, the complaint alleges that the decree is illegal because no federal law allows the social costs of greenhouse gas emission values to take into account the global effects. Instead, the complaint alleges that the authority exists only for national effects.
The states joining Louisiana for the trial are Alabama, Florida, Georgia, Kentucky, Mississippi, South Dakota, Texas, West Virginia, and Wyoming.
State GAs Send Letter Urging Congress to Disapprove “Real Lender” Rule Under Congressional Review Act
On April 21, 2021, the District of Columbia Attorneys General sent a letter to Congress by urging it to repeal the “real lender” rule adopted by the Trump administration.
Under the Trump administration, the Office of the Comptroller of the Currency issued the “True Lender Rule” which sought to clarify the legal framework for bank lending partnerships involving loans issued by a national bank or federal savings association in as part of a banking partnership program. Specifically, the true lender rule was intended to provide a clear rule on when the bank or the third party would be considered the lender in the transaction.
State MAs say in their letter to Congress that the real lender rule “would sanction high-cost loan programs designed to evade state usury laws.” According to state AGs, states have started imposing usury interest rate caps on “high-cost low-value loans in an attempt to protect their consumers from predatory financial products.” The state AGs allege that the real lender rule would be “exploited” by lenders “seeking to circumvent these state interest ceilings and invite … predatory consumer lending partnerships between banks and lightly regulated non-depository lenders. “
Under the Congressional Review Act (5 USC §§ 801-808), Congress can overrule business rules issued by federal agencies within a certain period of time.
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.