The State AG Report Weekly Update April 27, 2017

by Cozen O'Connor

Breaking News

Cozen O’Connor’s State AG Practice Co-Chair Lori Kalani Interviews Massachusetts Attorney General

  • Cozen O’Connor’s State Attorneys General Practice Co-Chair Lori Kalani recently interviewed Massachusetts AG Maura Healey.
  • The interview focused on AG Healey’s career path to her current position as the AG of Massachusetts, her history of tackling controversial and challenging topics, and the role state AGs have in serving as a check on the Trump Administration.
  • A full transcript of the interview, which was featured in the publication Corporate Counsel, is available here.

Consumer Financial Protection Bureau

CFPB and Florida Attorney General Take Action Against Mortgage Loan Servicer Over Alleged Misconduct 

  • Florida AG Pam Bondi and the Consumer Financial Protection Bureau (“CFPB”) filed separate complaints against mortgage loan servicer Ocwen Financial Corporation and its subsidiaries (collectively “Ocwen”) over allegedly violating the Consumer Finance Protection Act, the Fair Debt Collection Practice Act, the Real Estate Settlement Procedures Act, and other federal and state laws.
  • According to the Florida AG and CFPB complaints, Ocwen allegedly serviced loans using a records system that contained errors, foreclosed on homeowners based on these errors, enrolled and charged borrowers for add-on products without their consent, failed to adequately investigate and respond to consumer complaints, and failed to provide complete and accurate loan information to new mortgage servicers, among other things.
  • AG Bondi’s suit seeks financial and other relief for harmed borrowers and an order barring Ocwen from servicing loans that violate federal or state laws. The CFPB lawsuit seeks to permanently enjoin Ocwen from committing future violations of mortgage servicing laws, provide relief to affected consumers, impose civil penalties, and pay attorneys’ fees.

CFPB Takes Action Against Auto Lender For Allegedly Violating Consent Order

  • The CFPB issued a consent order against auto lender Security National Automotive Acceptance Company (“SNAAC”) for allegedly violating a 2015 CFPB consent order, which required the company to pay $2.28 million in consumer redress and a $1 million civil penalty for allegedly engaging in illegal debt collection practices.
  • According to the 2017 consent order, SNAAC allegedly violated the 2015 consent order by failing to provide consumers more than $1 million in refunds and credits and failing to submit a redress plan required by the 2015 consent order.
  • Under the terms of the 2017 consent order, SNAAC must comply with the 2015 consent order and pay $795,000 in redress to affected consumers, $75,000 to cover the CFPB’s cost of distributing these payments, and $1.25 million to the CFPB Civil Penalty Fund.

Consumer Protection

New York Attorney General Settles with 104 Auto Dealerships Over Alleged Recall Disclosure Violations

  • New York AG Eric Schneiderman reached a settlement with 104 auto dealerships across the state for allegedly selling vehicles to consumers without disclosing that the vehicles were under recall for unaddressed safety concerns in violation of federal law.
  • According to the AG’s office, the auto dealers allegedly failed to provide consumers with advance notice of existing and unrepaired safety recalls, such as unintended acceleration, airbag problems, and other vehicle issues.
  • Under the terms of the settlement, the auto dealers must alert consumers that their vehicles may be subject to a recall, disclose recall information on advertisements, provide prospective purchasers with a copy of recall status reports, inform consumers how to check the recall status of a vehicle, and pay a fine of $1,000, among other things.

Pennsylvania Attorney General Settles with Athletic Shirt Manufacturer Over Allegedly Misleading Business Practices

  • Pennsylvania AG Josh Shapiro reached a settlement with athletic shirt manufacturer Radiate Athletics and its founder (collectively “Radiate”) over allegations that Radiate violated the state’s Unfair Trade Practices and Consumer Protection Law after it failed to deliver apparel to consumers.
  • According to the AG’s office, Radiate allegedly raised more than $579,000 using the crowdfunding site Kickstarter based on the promise to create athletic shirts that changed color in response to body heat, but allegedly failed to deliver the shirts or delivered defective shirts to consumers.
  • Under the terms of the settlement, Radiate is required to deliver shirts to the consumers who paid but did not receive them, pay $2,400 in restitution to consumers who received defective shirts, and pay $10,000 in civil penalties to the state, among other things.

 Medicaid Fraud

California Attorney General, DOJ, and Whistleblowers Settle with Pharmacy Chain Over Alleged False Billing Practices

  • California AG Xavier Becerra’s Bureau of Medicaid Fraud and Elder Abuse, the Department of Justice, and two whistleblowers reached a settlement with pharmacy chain Walgreens over allegations that it allegedly knowingly submitted claims for reimbursement of certain prescription drugs under California’s Medicaid program, Medi-Cal, that were not properly supported by diagnosis and documentation requirements in violation of the federal False Claims Act and state law.
  • According to the AG’s office, Walgreens allegedly billed Medi-Cal for prescriptions based on claims it had complied with diagnosis-related requirements for the dispensing of prescription drugs, and in some instances, dispensed drugs for non-approved diagnoses. The allegations stem from two qui tam, or whistleblower, suits alleging violations of the False Claims Act.
  • Under the terms of the settlement, Walgreens must pay $9.8 million to settle the allegations, with $2.3 million going to the whistleblowers who filed the qui tam lawsuits.

State v. Federal

Massachusetts and Illinois Attorneys General Lead Coalition Regarding Student Loan Protection Rollback

  • Massachusetts AG Maura Healey and Illinois AG Lisa Madigan were joined by 19 AGs and the Executive Director of the Office of Consumer Protection of Hawaii in sending a letter to U.S. Secretary of Education Betsy DeVos in opposition to the Department of Education’s decision to rollback student loan borrower protections.
  • In the letter, the AGs and the Executive Director raise concerns over the recent rollback of Obama Administration guidance, which they argue provided assistance to borrowers in obtaining accurate information about their loans and repayment options, ensured consistency of services provided, increased servicer accountability, and enhanced transparency.
  • In their letter, the AGs and the Executive Director write that the rollback of the Obama Administration guidance could leave student loan borrowers vulnerable to the poor practices and abuse that the guidance was intended to prevent.

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.

© Cozen O'Connor | Attorney Advertising

Written by:

Cozen O'Connor

Cozen O'Connor on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.