The State AG Report – Volume 7, Issue 30 | July 2021

Cozen O'Connor

Cozen O'Connor

FTC Issues New Policy Statement Advancing the Goal of Open Repair Markets

  • The Federal Trade Commission (“FTC”) unanimously voted in favor of a policy statement aimed to boost enforcement against manufacturer practices designed to prevent purchasers from repairing their own products in violation of antitrust laws, the FTC Act, or the Magnuson-Moss Warranty Act, which prohibits, among other things, tying a consumer’s product warranty to the use of a specific service provider or product, unless the FTC issues a waiver.
  • A recent FTC report to Congress about repair restrictions found that manufacturers use a variety of methods to make it more difficult for consumers to fix or maintain their products, including limiting the availability of parts and tools or using adhesives to make parts more difficult to replace, resulting in increased costs to consumers, barriers for independent repair shops, and unnecessary environmental waste.
  • Under its new policy, the FTC will devote more enforcement resources to combat repair restrictions, prioritize investigations into unlawful repair restriction practices, and explore new rulemaking. In addition, the FTC will collaborate with state law enforcement agencies and policymakers to advance the goal of open repair markets.

New Attorney General for Oklahoma

  • Governor Kevin Stitt appointed John O’Connor, an attorney in private practice, as Oklahoma AG to serve out the current term, which ends on January 9, 2023. As previously reported, former Oklahoma AG Mike Hunter resigned, stating that certain personal matters threatened to overshadow the work of the AG’s office.
  • AG O’Connor announced his intention to run for a full term in the 2022 election.
  • To “meet” the state AGs across the nation and read more AG election news and insights, visit The State AG Report.

Republican Candidate Announces Run for Maryland Attorney General

  • Former prosecutor Jim Shalleck, who is currently an attorney in private practice, is seeking the Republican nomination for Maryland AG in the 2022 election.
  • Incumbent two-term Democratic AG Brian Frosh has not yet announced whether he will seek reelection.
  • To “meet” the state AGs across the nation and read more AG election news and insights, visit The State AG Report.

Kansas Attorney General Intervenes in Investigation of Storm-Related Natural Gas Price Spike

  • The Kansas Corporation Commission (“KCC”) allowed Kansas AG Derek Schmidt to intervene on behalf of Kansas consumers in KCC’s investigation of Black Hills Energy, Kansas Gas Service Company, and Atmos Energy Corporation over the unusual spike in natural gas prices during February 2021 winter storms, which prompted Kansas Governor Laura Kelly to issue a State of Disaster Emergency. Black Hills Energy, Kansas Gas Service, and Atmos Energy are seeking KCC’s approval to recover costs from their customers for the higher-priced natural gas purchased during the winter emergency. According to the AG’s office, it intervened in the proceedings to ensure the interests of consumers, taxpayers, and ratepayers are fully represented.
  • According to the AG’s Petition to Intervene, the AG’s office is separately investigating whether the price spikes at issue in the KCC investigation violated the Kansas Consumer Protection Act or the Kansas False Claims Act.
  • The AG’s office will be allowed to question witnesses, file testimony, and have access to all documents submitted in the KCC proceedings.

FTC Reinstates Prior Approval Requirement for Companies With Previous Antitrust Violations

  • The Federal Trade Commission (“FTC”), in a 3-2 vote, rescinded a 1995 policy statement that had hindered the FTC’s ability to address anticompetitive mergers and acquisitions. Before the 1995 policy statement, the FTC’s long-standing practice required all companies that had been found by the FTC to violate antitrust laws in a previous merger to obtain prior approval from the FTC for any future transaction involving the same product and geographic market for which a violation had been alleged.
  • The 1995 Policy Statement on Prior Approval and Prior Notice Provisions required companies that had been found by the FTC to violate antitrust laws in a previous merger to provide prior notice and seek prior approval only where there was a credible risk of an unlawful merger, regardless of market conditions or a company’s prior activity. According to the FTC, this resulted in companies repeatedly proposing the same or similar deals in the same market, despite earlier FTC determinations that such deals were problematic.
  • The policy reversal is intended to conserve FTC resources by allowing it to block some anticompetitive deals without having to initiate new investigations and lawsuits.

Nonprofit Landlord Accused of Keeping Rental Properties in Egregious Disrepair

  • Indiana AG Todd Rokita sued rental property owner Fox Lake AHF, Inc. (“Fox Lake”), a nonprofit, and its rental management company, Aloft Mgt, LLC (“Aloft”), over allegations that they allowed two large apartment complexes with thousands of residents to fall into disrepair in violation of Indiana’s Deceptive Consumer Sales Act and Nonprofit Corporations Act. In addition, by serving as a management company for Fox Lake, Aloft allegedly engaged in the unlicensed practice of real estate in violation of Indiana’s Home Loan Practices Act.
  • The complaint alleges that Fox Lake and Aloft received over 600 violation notices from the county public health department for failing to maintain basic habitability standards in the apartments they managed, including failing to provide heat, hot water, and air conditioning as well as fix water damage, mold, and broken windows. The complaint further alleges that residents are at risk of a water shutoff because Fox Lake is delinquent on a $1 million utility bill. In addition, the complaint alleges that Fox Lake misapplied or wasted nonprofit corporate assets and that it failed to fulfill its stated charitable mission of providing low-income housing.
  • The complaint seeks injunctive relief, restitution, civil penalties, and attorneys’ costs, among other things. The complaint also seeks to appoint a receiver over Fox Lake.

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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