June 12, 2017

June 12, 2017

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Advocacy and Legislation Update: State Attorneys General December 19 Update

On December 15, twenty state attorneys general filed suit against “a group of generic-drug companies,” alleging that the companies “collud[ed] to fix prices on an antibiotic and a diabetes medication,” according to a Wall Street Journal article. The suit is led by Connecticut AG George Jepsen. According to a news release from the Connecticut AG, the states have “uncovered evidence of a well-coordinated and long-running conspiracy to fix prices and allocate markets” for the antibiotic doxycycline hyclate delayed release and the diabetes medication glyburide. The states allege that the “anticompetitive conduct – including efforts to fix and maintain prices, allocate markets and otherwise thwart competition – caused significant, harmful and continuing effects in the country’s healthcare system,” per the Connecticut AG’s news release. The states are asking the court for “substantial financial relief, to address violations of law and restore competition,” and for injunctive relief to bar the companies “from engaging in illegal, anticompetitive behavior,” according to the Connecticut AG’s news release.

The Federal Trade Commission and AGs from thirteen states and the District of Columbia have announced a $17.5 million settlement with ruby Corp., which owns the dating AshleyMadison.com, relating principally to findings that the operators of the website maintained “lax data security practices” and “made several misrepresentations” to consumers regarding the website’s data security, according to a Press Release by New York AG Eric Schneiderman. The findings were the result of an investigation into a “July 2015 hack of the website that resulted in the online publication of user information for millions of AshleyMadison.com members, including photographs, usernames, email addresses, communications, and other profile information.” The alleged “lax data security practices” included failure to “utilize multi-factor authentication to secure remote access” or to “formally and adequately train company staff and management,” according to the Press Release. The alleged “misrepresentations” included that the website held a “‘Trusted Security Award,’ which appears to have been fabricated,” and representations that the website was a “100% Discreet Service” and “100% Secure,” per the Press Release. AG Schneiderman also noted that “Ashley Madison . . . created fake female profiles . . . that they used to entice male users . . . to purchase credits to communicate with other members.” In addition to monetary penalties, ruby Corp. agreed as part of the settlement to “cease engaging in certain deceptive practices, to not create fake profiles, and to implement a stronger data security program.”

New Mexico AG Hector Balderas has filed a lawsuit alleging a “massive real estate contract scheme” involving “potentially hundreds of victims and properties” in New Mexico, according to a Press Release. The lawsuit alleges that the defendant and his associates “perpetrated fraud and would prey on Spanish-speaking and Hispanic communities in central New Mexico[,] taking anywhere from $1,000 to $46,000 from victims with the empty promise of owning a home. Many times the victims would find themselves in substandard homes that they would have to make repairs on themselves just to lose all their money without [] getting the title to the home,” according to the Press Release. The lawsuit in part seeks “restitution for potentially hundreds of victims in New Mexico, fines, [and] injunctive relief” against the defendant. The Press Release also contained a Consumer Alert regarding real estate contracts issued by AG Balderas. In a statement, AG Balderas explained that the New Mexico AG’s office “has received an increasing number of complaints related to their use for the purchase of a home.” The Consumer Alert advised consumers to “carefully study the terms being offered in the contract” in part because real estate contracts have “different risks than conventional mortgages, which means that some unscrupulous sellers can take advantage of buyers.”

Advocacy

In a December 14 article in the New York Times titled, “To Combat Trump, Democrats Ready a G.O.P. Tactic: Lawsuits,” the article’s author Vivian Yee discusses that “some of the country’s more liberal state attorneys general have vowed to use their power to check and balance Mr. Trump’s Washington.” In particular, if the Trump administration “withdraws from environmental, antitrust or financial regulations, the attorneys general say they will plug regulatory holes that may gape wide open,” and that if President-Elect Trump’s policies “veer toward the unconstitutional, several of the 10 current and incoming Democratic attorneys general interviewed recently said they would apply a remedy favored by Mr. Trump himself: a lawsuit,” according to the article. The article notes that New York AG Eric Schneiderman is “already investigating Donald J. Trump over possible violations of New York State law at his charity foundation,” while Massachusetts AG Maura Healey “has a new fund-raising pitch: ‘I won’t hesitate to take Donald Trump to court if he carries out his unconstitutional campaign promises.’” For Democratic AGs going forward, “[t]he strategy could be as simple as mirroring the blueprint laid out by their Republican colleagues, who made something of a legal specialty of tormenting President Obama. Conservative attorneys general in states including Texas, Virginia and Florida have sued the Obama administration dozens of times,” according to the article.

© Copyright 2017 Squire Patton Boggs (US) LLP

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Clark Kent Ervin government investigations partner Squire Patton Boggs law firm attorney
Partner

Clark K. Ervin is a member of the Litigation Practice, helping clients under investigation, or facing the prospect of investigation, by federal Offices of Inspector General, to craft, coordinate and implement strategic defenses. An integral member of the firm’s Defense Policy Practice, as well as its International Policy Practice, Clark also provides invaluable counsel to clients on issues of national security and foreign policy.

Having served as Inspector General of three federal agencies during the administration of President George W. Bush,...

202-457-5234
Clark Kent Ervin government investigations partner Squire Patton Boggs law firm attorney
Partner

Clark K. Ervin is a member of the Litigation Practice, helping clients under investigation, or facing the prospect of investigation, by federal Offices of Inspector General, to craft, coordinate and implement strategic defenses. An integral member of the firm’s Defense Policy Practice, as well as its International Policy Practice, Clark also provides invaluable counsel to clients on issues of national security and foreign policy.

Having served as Inspector General of three federal agencies during the administration of President George W. Bush, Clark brings extensive experience and notable expertise to the firm’s Government Investigations specialty practice. From 2003-2004, he served as the very first Inspector General of the Department of Homeland Security (DHS), and from 2001-2002,  as the Inspector General of the Department of State and, simultaneously, the Broadcasting Board of Governors (BBG), the global media arm of the US government.

202-457-5234