Regulatory Oversight Newsletter - March 2023
Authors:
Ashley L. Taylor, Jr.
Clay Friedman
Bryan Haynes
Stephen Piepgrass
Agustin Rodriguez
Avi Schick
Ryan Strasser
John West
Amy Williams
Michael Yaghi
Hilary Cairnie
Joshua Davey
Molly DiRago
Ketan Bhirud
Chris Carlson
Abby Hylton
Natalia Jacobo
Namrata Kang
Robyn Lin
Sadia Mirza
Susan Nikdel
Nick Ramos
John Sample
Christina Sava
Whitney Shephard
Trey Smith
Abbey Thornhill
Daniel Waltz
Stephanie Kozol, Senior Government Relations Manager – State Attorneys General
REGULATORY OVERSIGHT PODCAST
2022 Significant Developments in the Tobacco Industry and What to Expect in 2023 (Part One)
By Stephen Piepgrass, Bryan Haynes, Agustin Rodriguez, and Nick Ramos
In this first of a two-part series focused on significant regulatory developments in the tobacco industry, Stephen Piepgrass is joined by colleagues Bryan Haynes, Agustin Rodriguez and Nick Ramos to review what happened over the past year, and offer thoughts on what to expect in the months ahead.
2022 Significant Developments in the Tobacco Industry and What to Expect in 2023 (Part Two)
By Stephen Piepgrass, Bryan Haynes, Agustin Rodriguez, and Nick Ramos
In this second of a two-part series, Stephen Piepgrass continues his discussion with colleagues Bryan Haynes, Agustin Rodriguez and Nick Ramos about significant developments in the tobacco industry during the past year, and their predictions on what to expect in the months ahead.
REGULATORY OVERSIGHT BLOG
Make sure to visit Troutman Pepper's Regulatory Oversight blog to receive the most up-to-date information on regulatory actions and subscribe to our mailing list to receive a monthly digest.
Regulatory Oversight will provide in-depth analysis into regulatory actions by various state and federal authorities, including state attorneys general and other state administrative agencies, the Consumer Financial Protection Bureau (CFPB) and the Federal Trade Commission (FTC). Contributors to the blog will include attorneys with multiple specialties, including regulatory enforcement, litigation, and compliance.
FEDERAL ENFORCEMENT UPDATES
New DOD Rule Limits PPE From China and Other Foreign Nations
By Hilary Cairnie, Michael Yaghi, and Natalia Jacobo
On January 30, the U.S. Department of Defense (DOD) issued an interim procurement rule, prohibiting the procurement of personal protective equipment (PPE) from four "non-allied" countries: China, North Korea, Russia, and Iran.
New DOD Contracting Process Aims to Attract Innovative Startups
By Hilary Cairnie, Michael Yaghi, and Daniel Waltz
The Department of Defense (DOD) wants to make it easier for companies with innovative solutions, such as startups, to bid on and receive federal government contracts. As such, DOD recently proposed a Defense Federal Acquisition Regulations (DFARS) amendment to implement provisions of the 2022 and 2023 National Defense Authorization Acts, which provide DOD with the authority to acquire "innovative commercial products and commercial services" under general solicitations using a new, more streamlined competitive selection process called a "commercial solution opening" (CSO). The amendment will add a new subpart to DFARs Part 212 at 212.7X. DOD expects the proposed process to reduce transaction costs for both private and public sectors, which it hopes will encourage smaller companies with innovative ideas and proven solutions to take part in the federal government contracting marketplace.
REGULATING DIGITAL ASSETS
Regulating Digital Assets: Will Congress Finally Enact a Comprehensive Regulatory Framework in 2023?
By Stephen Piepgrass and Trey Smith
The promise of digital assets is to decentralize finance. Yet in 2022, investors in decentralized technologies lost billions of dollars as the global market cap of all cryptocurrencies fell by 64.1% to $829 billion.
CANNABIS UPDATES
Virginia General Assembly Passes Bill to Regulate Delta-8 THC
By Agustin Rodriguez, Abby Hylton, and Christina Sava
The Virginia General Assembly recently passed — in both chambers — a bill to regulate delta-8 THC products in the commonwealth. The bill now awaits the governor's signature. Governor Youngkin and the Republican-controlled House of Delegates have prioritized the control of these novel hemp-derived products over legislation to legalize the retail sale of adult-use marijuana, which will no longer begin in 2024.
Connecticut AG Sues Retailers for Illegal Delta-8 THC Product Sales
By Troutman Pepper State Attorneys General Team, Agustin Rodriguez, and Christina Sava
On February 9, Attorney General William Tong sued five Connecticut retailers for violating the state's Unfair Trade Practices Act (UTPA) by selling allegedly illegal delta-8 tetrahydrocannabinol (THC) products, many of which mimicked snack foods and candies popular among youth.
AG UPDATES
Attorneys and Law Firm Plead No Contest in Michigan Collections Fraud Case
By Troutman Pepper State Attorneys General Team
On March 7, Fishman Group PC President Marc Fishman pled no contest on behalf of the firm to stealing client assets by filing false proofs of service in collections cases. Previously, Michigan Attorney General Dana Nessel charged the Michigan collections law firm and its attorneys with one count of maintaining a criminal enterprise. Per the court order, the Fishman Group must pay nearly $150,000 in full restitution to all improperly garnished debtors.
Colorado AG Green Lights Consumer-Business Dispute Resolution Program
By Troutman Pepper State Attorneys General Team
On March 7, Colorado Attorney General Phil Weiser announced a permanent Department of Law Consumer Mediation Program after a yearlong successful pilot program. Considering the department's high number of complaints — nearly 18,000 national complaints in 2022 — the new program will enable the department to oversee informal negotiations to help resolve more consumer-business disputes, thereby increasing customer satisfaction.
Illinois AG Proves It's Risky Business to Defy an Investigative Subpoena
By Troutman Pepper State Attorneys General Team
On March 1, Illinois Attorney General Kwame Raoul filed suit against Energy Acquisitions Group LLC (EAG), seeking compliance with a Special Assistant Attorneys General's (SPAAG) investigative subpoena concerning deceptive business practices of the alternative retail energy supplier industry (ARES). AG Raoul strives to bar EAG from conducting business in the state of Illinois — at the very least until EAG complies with the subpoena.
Texas AG Takes Next Step to Stop New DOL ESG Investing Rule
By Troutman Pepper State Attorneys General Team
On February 22, Texas Attorney General Ken Paxton (R) moved for a preliminary injunction as a next step after previously filing a multistate lawsuit against the Biden administration to stop a new Department of Labor (DOL) rule that allegedly prioritizes environmental, social, and governance (ESG) investing over traditional financial investment principles.
California Legislative Bills Target Artificial Intelligence
By Troutman Pepper State Attorneys General Team
On February 6 and January 30 respectively, Senator Bill Dodd (D) introduced Senate Bill 313 (SB 313), and Assemblymember Rebecca Baur-Kahan (D) initiated Assembly Bill 331 (AB 331) on artificial intelligence (AI).
Casino Operator's Challenge to Washington's Tribal Sports Gaming Fails
By Troutman Pepper State Attorneys General Team
The U.S. District Court of Washington decided all bets are off for Maverick Gaming LLC regarding its challenge to tribal casinos. Last week, Judge David Estudillo dismissed Maverick's suit, which challenged a state law permitting sports betting at tribal casinos and subsequent amendments to Washington's tribal compacts effectuating the new bill's provisions. As grounds for dismissal, the court cited Maverick's failure to join Shoalwater Tribe — a necessary party — to the lawsuit.
North Carolina AG Settles With Joint Active Systems
By Troutman Pepper State Attorneys General Team
On February 1, North Carolina Attorney General Josh Stein announced that his Medicaid Investigations Division reached a $500,000 settlement with Joint Active Systems, Inc. (JAS). The AG's Medicaid Investigations Division "investigates and prosecutes health care providers that defraud the Medicaid program, patient abuse of Medicaid recipients … and misappropriation of any patients' private funds in nursing homes receiving Medicaid funds."
Attorneys General Enforce Lemon Laws and Penalize Puppy Mills
By Agustin Rodriguez, Chris Carlson, and Namrata Kang
This article was originally published in Bloomberg Law. Reproduced with permission. Published February 2023. Copyright © 2023 The Bureau of National Affairs, Inc.
The American Veterinary Medical Association estimates that over 65% of US households own a pet. Puppies are a particularly popular choice. But sometimes, after a puppy comes home to its new family, it might appear lethargic or in pain, and stumble when walking.
AG Bonta Issues New Investigative Sweep of Mobile Application Companies
By Troutman Pepper State Attorneys General Team, Joshua Davey, Molly DiRago, Robyn Lin, and John Sample
On January 27, California Attorney General Rob Bonta announced an "investigative sweep" of businesses with mobile applications for allegedly failing to comply with the California Consumer Privacy Act (CCPA). This ongoing sweep targets popular mobile applications in the retail, travel, and food service industries that fail to offer a mechanism for consumers to opt out of data sales or that fail to process consumer opt-out requests, including requests submitted via an authorized agent like Permission Slip.
Petroleum Storage Company Settles 2020 Environmental Explosion Claims
By Troutman Pepper State Attorneys General Team
Texas Attorney General Ken Paxton and Magellan Terminals Holdings LP settled Texas Clean Air Act violations claims, resulting from an alleged explosion and fire at the company's Corpus Christi bulk petroleum facility. Magellan agreed to pay Texas $588,000 in civil penalties and $12,000 in attorney's fees as part of the settlement.
New York AG Scrutinizes Madison Square Garden Facial Recognition Technology Banning Attorneys
By Troutman Pepper State Attorneys General Team
In January 2023, New York Attorney General Letitia James sent a letter to Madison Square Garden Entertainment Corporation (MSG), seeking information about its use of facial recognitional technology to prohibit ticketholders from entering its venues, such as Madison Square Garden and Radio City Music Hall. New York's biometric identifier law requires companies using facial recognition technology to disclose the use to consumers. Madison Square Garden started using this technology in 2018 to identify security threats — a practice under prior scrutiny.
Our Cannabis Practice provides advice on issues related to applicable federal and state law. Marijuana remains an illegal controlled substance under federal law.