The State AG Report - Volume 7, Issue 21 | May 2021

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Frontier Sued over Allegations that Its DSL Service Is Slower than Advertised

  • The Federal Trade Commission (“FTC”), and a bipartisan group of five state AGs and two California district attorneys, sued Internet service provider Frontier Communications Corporation (“Frontier”) over allegations that it charged consumers for higher-speed Internet service than it actually provided in violation of the FTC Act and state consumer protection laws.
  • The complaint alleges that Frontier advertised and sold different plans of Digital Subscriber Line (“DSL”) Internet service, tiered on the basis of download speed, but in reality, Frontier did not provide many consumers with the speeds they purchased, and continued to provide slower service despite thousands of consumer complaints.
  • The complaint seeks injunctive relief, as well as restitution, disgorgement, and civil money penalties available under each state’s laws, among other things.

 

New Democratic Candidate Joins the Race for Arkansas Attorney General’s Open Seat

  • Little Rock private-practice attorney Jesse Gibson announced his candidacy for the 2022 Democratic nomination for the Arkansas AG’s office.
  • As previously reported, Jason Davis, another Arkansas attorney in private practice, is also seeking the Democratic nomination for Arkansas AG. On the Republican side, Lieutenant Governor Tim Griffinis competing against Arkansas Fair Housing Commission Director Leon Jones for the nomination. Current two-term Republican AG Leslie Rutledge is term-limited from running again, and has entered the race for governor.
  • To “meet” the state AGs across the nation and read more AG election news and insights, visit The State AG Report

 

Allegedly Lax Sanitary Practices Land Dental Clinics in $2.7 Million False Claims Settlement

  • New York AG Letitia James and the federal Department of Justice acting on behalf of the Department of Health and Human Services reached a settlement agreement with Upper Allegheny Health System (“UAHS”), the operator of several dental clinics, to resolve allegations that it billed Medicaid for services it did not perform in violation of the federal and New York False Claims Acts.
  • According to the AG’s office, UAHS allegedly failed to sterilize dental handpieces between patients but nonetheless billed Medicaid for the sterilization services.
  • Under the terms of the settlement agreement, UAHS will pay $2.7 million to the United States, New York, and Pennsylvania, of which $2.4 million will be used to resolve the claims of New York’s Medicaid program.

 

Democratic AGs Seek Strict Environmental Review of Proposed Petrochemical Plant

  • The Democratic AGs of New York, Connecticut, District of Columbia, Massachusetts, and New Jersey submitted a comment letter to the U.S. Army Corps of Engineers (“Corps”) for its reevaluation of the Clean Water Act Section 404 and Rivers and Harbors Act Section 10 Permit it issued to Formosa Plastics Corporation (“Formosa”) for its proposed petrochemical complex in St. James Parish, Louisiana.
  • The letter praises the Corps’ decision to suspend Formosa’s permit for reevaluation, noting that the AGs’ states will likely experience severe environmental impacts from the proposed complex that is projected to emit 13.6 million metric tons of greenhouse gases and 800 tons of toxic air pollution each year.
  • The letter further asks the Corps to more broadly reevaluate the impact of Formosa’s proposed complex on environmental justice and climate change, as well as its effects on wetlands, waterways, and migratory birds, among other things.

 

FTC Aims to Block Consolidation in the Cement Industry

  • The Federal Trade Commission (“FTC”) filed an administrative complaint and authorized a suit in federal court to block the acquisition of cement producer Keystone Cement Company (“Keystone”) by rival cement producer Lehigh Cement Company LLC (“Lehigh”) over allegations that the deal would harm regional competition in cement, a key ingredient for concrete production, in violation of the FTC Act and the Clayton Act.
  • The complaint alleges that the proposed acquisition would harm competition in the market for gray portland cement in eastern Pennsylvania and western New Jersey because it would reduce the number of competitors from four to three, resulting in the post-acquisition company controlling more than 50% of cement sales, and also that the acquisition would increase the likelihood of anticompetitive coordination in the regional market. The complaint further alleges that Keystone and Lehigh are close competitors who engaged in price wars that lowered cement prices for their customers, but that the combined company would be in a position to raise prices or reduce output and quality.
  • The complaint’s notice of contemplated relief, in the event that the acquisition is consummated, includes divestiture or reconstitution of assets in a manner that restores two or more independent businesses in the relevant market, among other things.

 

California Attorney General Weighs In on Coverage for Mental Health

  • California AG Rob Bonta filed an amicus brief in the U.S. Court of Appeals for the Ninth Circuit in support of plaintiffs-appellees in Wit v. United Behavioral Health (“UBH”), where the district court found that plaintiffs-appellees were improperly denied coverage for mental health and substance use disorder treatment by mental health administrator UBH.
  • The district court found that UBH breached its fiduciary duty to plaintiffs when it denied coverage for medically necessary treatment on the basis of clinical guidelines that fell short of the standard of care, and that UBH relied on clinical criteria that were narrower than the generally accepted standards of care in order to cut costs. The court issued a remedies order requiring UBH to use clinical criteria that adhere to generally accepted standards of care in its coverage decisions, and UBH appealed the order.
  • The amicus brief argues that the district court’s remedial order ensures that Californians are able to access medically appropriate and necessary mental health care and that reversing the order would likely harm California because it spends public resources on individuals with private insurance when they are denied medically necessary care by their insurer, among other things.

 

Oklahoma Attorney General Resigns

  • Oklahoma AG Mike Hunter announced his resignation, issuing a statement praising the employees of the AG’s office and stating that he is resigning because certain personal matters threaten to overshadow the vital work of the AG’s office.
  • Hunter was appointed to the AG’s office in 2017 by former Governor Mary Fallin to fill the unexpired term of Scott Pruitt, and then was elected to a full term in 2018.
  • Hunter’s resignation becomes effective as of June 1, 2021.

 

Supreme Court Sides with Energy Companies on Technical Grounds in Climate Liability Case

  • The U.S. Supreme Court issued a 7-1 opinion in BP PLC v. Mayor and City Council of Baltimore, Case No. 19-1189, ruling that the Fourth Circuit erred in failing to consider all jurisdictional arguments from defendants BP and other energy companies when determining whether the case was rightly remanded from federal court back to state court.
  • The underlying case was originally brought by the City of Baltimore in Maryland state court under the tort theory of public nuisance with the aim of forcing fossil-fuel companies to pay for the local impacts of climate change. It was removed by the defendant energy companies to federal court, which then remanded the case back to state court. On appeal of the remand, the Fourth Circuit only considered one of the purported eight grounds for removal.
  • The Supreme Court declined, however, to hold that all climate liability cases should automatically be heard in federal court, as defendants had argued. The Court may rule on this issue if it takes up a pending petition filed by energy companies in Chevron vs. City of Oakland, where petitioners ask the Court to provide clarity on the issue of state versus federal jurisdiction in climate liability cases.
  • While not dispositive on the merits, the decision marks a milestone in clarifying the proper forum—federal or state courts—that should hear cases brought by governments that are increasingly asserting claims again private defendants traditionally brought by State AGs, such as those involving climate change, opioids, and data breaches.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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