2022 AG Elections

County District Attorney Launches Bid for Wisconsin Attorney General

• Fond du Lac County DA Eric Toney announced his candidacy for the Republican nomination in the 2022 race for the Wisconsin AG’s office, currently held by Democratic AG Josh Kaul.
• Toney was first elected to the Fond du Lac County DA’s office in 2012 and is now serving in his third term.
• For more AG election news, insights, and polls visit Cozen O’Connor’s State AG Election Tracker.

Antitrust

FTC Requires Divestiture in $1.7 Billion Wine and Spirits Merger

• The Federal Trade Commission (“FTC”) approved a final order requiring wine and spirits maker E. &. J. Gallo Winery (“Gallo”) to divest certain assets and remove certain other assets from its proposed asset purchase agreement with Constellation Brands, Inc. to resolve allegations that the agreement would harm competition for certain types of wines and spirits in violation of the FTC Act and the Clayton Act.
• The FTC’s complaint alleged that, because the two companies are the largest suppliers of low-priced sparkling wines, brandy, port, and sherry, as well as of grape-based high color concentrates, their proposed transaction would substantially lessen competition nationwide by eliminating head-to-head competition in these product categories.
• Under the terms of the final order, Gallo will divest its low-priced port and sherry brands to Precept Brands LLC and Constellation Brands will divest its low-priced brandy brand to Sazerac Company, Inc. and its concentrates business to Vie-Del Company. In addition, Constellation Brands will retain its sparkling wine brands and take all actions necessary to maintain their viability and competitiveness for four years. The final order also appoints a monitor to observe and report to the FTC on the companies’ compliance with the order.

Consumer Protection

Janitorial Service Company Accused of Duping Immigrants into Unconscionable Franchise Agreements

• Washington AG Bob Ferguson sued janitorial services company National Maintenance Contractors , LLC and related entities (collectively “NMC”) over allegations that it used deceptive and misleading tactics to market its franchises in violation of Washington’s Consumer Protection Act, and Franchise Investment Protection Act.
• The complaint alleges, among other things, that NMC marketed its franchises to immigrants with limited English proficiency, locking them into contracts that often paid less than minimum wage, had excessive franchising fees, and made unrealistic work demands. In addition, the complaint alleges that NMC misrepresented the amount of control over work and hours that franchisees would have, punished franchisees who declined work projects for any reason, and did not provide contracted-for services like billing and collections.
• The complaint seeks declaratory and injunctive relief, restitution, civil money penalties, and attorneys’ fees and costs.

COVID-19

Attorneys General Take Aim at Fake COVID-19 Vaccination Cards

• The National Association of Attorneys General (“NAAG”) sent a letter signed by a bipartisan group of 45 AGs to Twitter, Inc., eBay, Inc., and Shopify urging them to prevent the use of their platforms for selling fake COVID-19 vaccination cards.
• According to the letter, blank or fraudulently completed vaccine cards bearing the Centers for Disease Control and Prevention logo are being marketed and sold through Twitter, eBay, and Shopify. The letter argues that these cards present a health threat and that their marketing and sale are a violation of many states’ consumer protection laws.
• The letter urges the companies to monitor and take down advertising and links to fake card sellers and to preserve records that would aid in identifying the marketers and sellers of fake cards. The letter seeks a swift response from the companies explaining how they will comply with the AGs’ request.

Financial Industry

Online Lender Accused of Offering Loans with Interest Rate of 198%

• District of Columbia AG Karl Racine sued online lender Opportunity Financial, LLC (“OppFi”) over allegations that it used misleading and deceptive marketing to promote its predatory loans to consumers in violation of the District’s Consumer Protection Procedures Act.
• The complaint alleges, among other things, that OppFi skirted state and local usury laws by partnering with a state-chartered bank in Utah to offer loans that OppFi controlled, with interest rates exceeding the District’s cap of 24% and with some loans carrying a 198% interest rate. In addition, the complaint alleges that OppFi did not disclose all material information about its loans’ costs and risks, and misleadingly marketed the loans as an opportunity to refinance existing loans for better terms.
• The complaint seeks injunctive and declaratory relief, restitution, civil penalties, and attorneys’ fees.

For-Profit Colleges

Full Student Loan Relief Sought for ITT Students Allegedly Misled About Their Earning Potential

• A bipartisan group of 24 AGs, led by Colorado AG Phil Weiser and Oregon AG Ellen Rosenblum, filed a borrower defense application with the U.S. Department of Education to request full student loan relief, including the discharge and refund of loans, for student borrowers who enrolled in ITT Technical Institute (“ITT”).
• The application alleges that ITT misled prospective students and enticed them into enrolling in its programs by showing them a chart purporting to show the value of its education in terms of projected annual salary, which significantly inflated graduates’ projected income and misrepresented the financial gains that students could expect from an ITT program.
• The application argues that ITT’s conduct violated state consumer protection laws and that, therefore, student borrowers are eligible for borrower defense. The application further argues that it is appropriate to grant relief to all eligible borrowers as a group without requiring individual applications from each borrower because the states already identified the cohort of borrowers to whom ITT made consequential misrepresentations.