Tierney Blog


Uber Multistate Settlement Demonstrates the Power of State Data Breach Laws

On September 26, 2018, the attorneys general of all 50 states and the District of Columbia announced an agreement to settle allegations that Uber had exposed the data of 57 million users, and then paid hackers to cover up the breach rather than reporting it to proper authorities. Additional details on the breach can be found in the press releases issued by California, New York, or Massachusetts, each of which reportedly helped lead the settlement. Reporting from Bloomberg, which originally broke the story on the breach in November of 2017, can be found here.

As other commentators have recognized, the multistate settlement shows that the proliferation of state data breach laws has given attorneys general the power to come down hard on bad actors. The settlement included a penalty of $148 million, which has been described as the largest penalty ever imposed by state authorities for a data breach. The settlement also required Uber to take measures to prevent future data breaches and reform its corporate culture. It includes requirements that Uber report to states any data security incidents quarterly, develop a data security program with an executive officer, and set up a hotline for reporting misconduct.

Bipartisan State Efforts to Control Prescription Drug Costs

At the top of the agenda for the 800 state health policymakers who crowded into this year's annual conference of the National Academy for State Health Policy were bipartisan state efforts to control the costs of prescription drugs.  24 states have passed legislation designed to hold back price increases and almost all of them have been challenged by drug companies in lawsuits that will be defended by state attorneys general.

This is an issue that is only going to loom larger for all attorneys general, their legislatures, and their administrative agencies in the months ahead.

Twenty-One AGs Urge Education Secretary to Reconsider Rollback of Student Loan Reforms

In a letter sent last week, 21 state attorneys general and the Office of Consumer Protection of Hawaii urged Secretary of Education Betsy DeVos to immediately reconsider “the Department of Education’s revocation of critical student loan service reforms.” The policy and guidance memoranda withdrawn by the Department addressed industry-wide procedures by student loan servicing companies that were the subject of investigations and enforcement actions by the Illinois and Washington State Attorneys General, among others.

The April 24 letter highlights some of the industry practices that contributed to more than a quarter of borrowers being delinquent or in default on a student loan, according to a report by the Consumer Financial Protection Bureau (CFPB):

In its 2015 report, the CFPB identified troubling student loan servicer practices – including paperwork processing errors and failure to provide accurate information – that discourage the use of income-driven repayment plans. By reforming service incentives and strengthening consumer protections, the rescinded guidance sought to eliminate the loan servicing failures that keep borrowers from entering affordable repayment plans.
— April 24 Letter from 21 State Attorneys General to Department of Education

According to Forbes, 44 million borrowers owe approximately $1.3 trillion in student loans, making it the second-largest type of consumer debt behind mortgages.

NY Attorney General Fights Fraud Against Servicemembers

Deanna Nelson is the Assistant Attorney General in charge (AAGIC) of a two-person regional office in Watertown, N.Y. The office is located close to the 10th Mountain (Light Infantry) Division at Fort Drum. In addition to her numerous duties as the AAGIC of the Watertown office -  representing state agencies, overseeing charitable organizations, affirmative litigation and other matters - Deanna has taken it upon herself to fight for young military personnel who are away from home for the first time and all too often fall victim to a bewildering array of sophisticated, private equity funded consumer scams. This fight has led to several nationally recognized settlements on behalf of servicemembers and their families. 

The effort to protect military personnel from consumer frauds continues. On March 22, AG Schneiderman, joined by members of the NY AG Consumer Protection Division, announced yet another settlement in what is obviously a nationwide scam. Freedom Stores Inc., a chain of electronics and furniture stores catering to military personnel, agreed to settle claims for illegal debt collection practices against servicemembers in New York. In 2014, the Consumer Financial Protection Bureau, along with North Carolina and Virginia, reached a settlement with Freedom Stores for the same abusive practices.

The fact is that protecting our dedicated servicemembers requires a large-scale, coordinated effort between federal and state law enforcement officials. Let's hope that the CFPB can continue to work with AG's all over the country to protect our military personnel from consumer fraud.

Ky. AG Fosters Stratgeic Partnerships to Fight Consumer Scams

Kentucky Attorney General Andy Beshear is wisely partnering not just with the AARP, but also with local and county governments, various faith based groups and over 100 non-profit and retail organizations as he issues consumer warnings on a wide variety of scams. This is exactly how it should be done.

The State Center Consumer Protection Report (Oct. - Nov. 2016 Edition)

We are pleased to announce the inaugural issue of The State Center Consumer Protection Report. Published by the The Center for State Enforcement of Antitrust and Consumer Protection Laws (“State Center”) in partnership with StateAG.org, the Consumer Protection Report is a monthly compilation of  press releases on local and national consumer protection enforcement efforts, including investigations, lawsuits, consumer alerts and advocacy initiatives by state attorneys general.

State Center/StateAG.org's Consumer Protection Initiative carries on the efforts of the National State Attorneys General Program at Columbia Law School by publishing this Report and making all current and previous editions available on The State Center website. The website also features a searchable database, allowing visitors to conduct key-word and drop-down menu searches of all editions of the Consumer Protection Report.

Connecticut AG Leads on Pharmaceutical Price-Fixing Case

Led by Connecticut Attorney General George Jepsen and his staff, 20 attorneys general sued some of the largest generic drug companies for price fixing. These AG's have uncovered what appears to be egregious wrongdoing that falls on to the bottom line of almost every American family. This case is proof positive that state attorneys general - operating on a bi partisan basis - are essential to defending all of us in the marketplace.

  • See, Pharma in their sights: Attorneys general get real on alleged price-fixing, Pittsburgh Post-Gazette (Dec. 18, 2016).

Mn. AG Lori Swanson's Victory Over For-Profit Globe University Receives Support from U.S. Department of Education

Globe University, a for-profit college, successfully sued by Minnesota Attorney General Lori Swanson has been ordered to stop enrolling students by the U.S. Dept. of Education. This comes in the aftermath of September's devastating 130-page ruling from the Judge who presided over the lengthy trial. While the school will not close immediately, the facts clearly show the violations that have so negatively impacted Globe's students.

See: Globe, Minnesota School of Business ordered to stop enrolling students

Resources on Payday Lending

Attorneys General and consumer advocates have long believed that payday lending exploits low income citizens while the industry alleges that payday loans fill a vital credit need for those with no savings. This post by the Journalist Report at the Kennedy School both summarizes the CFPB's payday initiative as well as providing links to recent research.

See: Journalist's Resource, Do payday loans exploit poor people? Research review

NY AG Gives Extensive Remarks on Efforts to Use 1st Amendment to Block Fraud Investigations

The NY AG recently gave a thoughtful presentation before the Big Law Business Summit on why the First Amendment never has protected fraud, and that lawyers should oppose the "very dangerous legal trend of ... First Amendment opportunists" who are attempting to use the First Amendment to block government investigations of potentially illegal behavior.

NY AG and its Time Warner Investigation

It is no surprise to any NYC resident that Time Warner's claim of "blazing fast" internet service is, well, not exactly true.  In an investigation of Time Warner led by Columbia Professor and long time friend of the Columbia AG Program Tim Wu, it appears that Time Warner and Charter had best make some improvements, or this case matter just might expand into a multistate review.  And speaking of Tim, you just have to see his experience explaining net neutrality on a roller coaster with Stephen Colbert.

Md. AG Sues Finance Companies on Structured Settlements


Calling it "exploitation in its worst form," the Md AG has sued Access Funding for its marketing of their purchasing lead paint settlements from low income families and then selling the downstream revenue stream.  The AG is seeking to return $17 million to over 70 Maryland consumers and is receiving editorial support.  The case is the result of a seven-month investigation.  A spokesperson for the National Association of Settlement Purchasers called Maryland an "isolated place" and that the Maryland facts were unique.  My guess is that other attorneys general will be carefully monitoring the practices of this growing industry.

AG's Fight Notorio Fraud

An increasing number of attorneys general are gearing up to fight "notario fraud," a long-standing practice whereby scam artists illegally market themselves as being able to assist families with immigration issues. Attorneys general offices are being assisted in that effort by the Federal Trade Commission and the Diverse Communities Initiative at Columbia Law School as they focus their efforts on vulnerable diverse communities.

 

NY AG Sues Health Insurer over Coverage

The NY AG has sued a health insurer for denying coverage to insured who have Hepititus C.  His office then settled with seven other insurers on the same issue. The insurers say thatcoverage only kicks in when symptoms become advanced, but the AG (and private suits) say that that thisrestriction does not appear in the text of the coverage documents.  I want to make two points.  The first is that the tension between insurers and insured remains high, and the second is that in some states the AG is able to play a role either in litigation or in how that AG "represents" its client, the Department of Insurance all of whom have created complex regulations designed to keep these questions out of the courts.  For those who follow the world of attorneys general, this is one to watch.

FTC Partners with State AG Offices

Although much is written about State v. Federal government acrimony, the day-to-day world of governing is often markedby repeated success.  Today the Federal Trade Commission gave its fourth "Partner Award" to the NY AG Buffalo Regional Office in their joint efforts to crack down on illegal debt collection practices.  Previously, the FTC had given "Partner Awards" to the AG Offices of Colorado and Florida.

 

Minnesota AG Trial Against For Profit School Begins

Attorneys general have been investigating, suing and settling with for-profit schools for the last several years. Working with a plethora of federal agencies, the AG's have reached a number of sweeping settlements that have brought some relief to students whom the AG's and federal agenices asserted had been the victims of fraud. Until now, none of those investigations had actually gone to trial which is what makes Minnesota AG Lori Swanson's case against Globe University so interesting. This bench trial is expected to last four weeks.