Not Just Fun and Games: Angry Birds Allegedly Violates Children’s Privacy

• New Mexico AG Hector Balderas sued mobile game developer Rovio Entertainment Corporation (“Rovio”) over allegations that it collects personal information from children in violation of the federal Children’s Online Privacy Protection Act and the New Mexico Unfair Practices Act.
• The complaint alleges that Rovio, the developer of the popular “Angry Birds” games, which it allegedly deliberately markets to young children through movies and products targeted at that demographic, knowingly collects personal information from children under the age of 13 without obtaining the legally required prior parental consent for collecting such information. According to the complaint, Rovio allegedly shares the personal information with third-party marketing companies that use the information to sell targeted advertising to children.
• The complaint seeks injunctive relief, restitution, disgorgement, punitive damages, civil penalties, and attorneys’ fees and costs, among other things.

Consumers Worse Off After Enrolling in Debt Settlement Program

• Massachusetts AG Maura Healey reached a settlement with debt settlement company DMB Financial, LLC and its chief operating officer (collectively “DMB”) to resolve allegations that DMB used deceptive and unfair practices to enroll customers in its debt settlement programs.
• The amended complaint alleged that, among other things, DMB overcharged consumers through inflated and premature fees, failed to disclose possible harms that consumers may experience after enrollment in its programs, including potential suits by creditors, and damaged credit because DMB directed enrolled consumers to stop paying their debts and communicating with creditors. DMB also allegedly knowingly enrolled consumers who could not benefit from its programs and advertised that consumers would emerge from its programs debt-free, even though many consumers were not able to do so.
• Under the terms of the consent judgment, DMB agreed to pay $1 million to the Commonwealth, to be used in part for restitution. In addition, DMB agreed to implement significant changes to its business and advertising practices, including no longer requesting and accepting inflated and premature fees and no longer making deceptive and unsubstantiated claims about its ability to settle debts, among other things. DMB also agreed to submit annual reports about its compliance with the terms of the consent judgment to the AG’s office for a period of five years.

Energy Company Releases Customers from Astronomical Energy Bills Related to Historic Texas Winter Storm

• Texas AG Ken Paxton reached a settlement with bankrupt energy company Griddy Energy, LLC and its parent company (collectively “Griddy”) to resolve allegations stemming from spiking energy prices that Griddy passed on to its consumers during the February 2021 winter storm in Texas, including allegations of false, misleading, and deceptive advertising in violation of the Texas Deceptive Trade Practices Act.
• As previously reported, the AG’s complaint alleged that Griddy promised consumers cheaper, wholesale prices that would consistently be less than the prices charged by traditional energy companies, but in reality, in the aftermath of the storm that caused extensive power outages in the state, many Griddy customers’ bank accounts were auto-debited for hundreds of dollars per day, resulting in overdrawn accounts, overdraft fees, and an inability to pay other bills.
• Under the terms of the settlement agreement, along with Griddy’s Chapter 11 bankruptcy plan of liquidation, Griddy agreed to release former customers from their outstanding energy-bill balances unless they elect to opt out of the release, while former customers may pursue claims in bankruptcy court to recover any amounts they already paid for electricity consumed during the storm. Griddy is also permanently enjoined from making false or misleading statements in its retail electricity advertising.

$575 Million California Healthcare Antitrust Settlement Approved by Judge

• California AG Rob Bonta and healthcare system Sutter Health (“Sutter”) gained the final approval of a California state judge for their settlement agreement, which resolves allegations that Sutter employed anticompetitive practices in violation of California’s Cartwright Act.
• The complaint alleged, among other things, that Sutter, which is the largest hospital system in Northern California, intentionally concentrated power in the healthcare market and used its power to force vendors to enter into anticompetitive and unduly restrictive healthcare provider agreements that ultimately raised prices for consumers.
• Under the terms of the final approval order and judgment, which concurrently resolve allegations brought by the United Food and Commercial Workers and Employers Benefit Trust, class action plaintiffs, and the AG’s office, Sutter will pay $575 million in compensation and litigations costs, including approximately $164 million for attorneys’ fees and $21 million for attorneys’ costs. In addition, Sutter agreed to increase transparency about pricing, quality, and costs of its services, stop anticompetitive contracting practices and bundling of services and products, and cooperate with a court-approved compliance monitor who will ensure compliance with the terms of the settlement for a period of at least ten years, among other things.

Psychotherapy Services Provider Nabbed for False Claims Submitted to Medicaid and Medicare

• Georgia AG Chris Carr and the U.S. Department of Justice reached a settlement with psychotherapy services provider Carenow Services, LLC and its chief operating officer (collectively “Carenow”) to resolve allegations that Carenow improperly billed Medicaid and Medicare for psychotherapy services in violation of the federal False Claims Act and the Georgia Taxpayer Protection False Claims Act.
• The case, which arose out of a whistleblower complaint, involved allegations that Carenow fraudulently billed Medicaid and Medicare for medically unnecessary and improperly documented psychotherapy services at nursing homes and skilled nursing facilities. In addition, services that were medically necessary were upcoded and billed at higher reimbursement rate codes than was appropriate for the service provided.
• According to the U.S. Attorney’s office, under the terms of the settlement, Carenow will pay $2 million, a portion of which will be paid to the whistleblower. The terms of the settlement reflect the credit that Carenow received for immediately cooperating with the government in its investigation and for promptly taking steps to remediate its wrongful conduct.