Consumer Protection

SAN FRANCISCO – California Attorney General Edmund G. Brown Jr. today announced that ConocoPhillips has agreed to an “unprecedented global warming reduction plan” to off-set greenhouse gases caused by the expansion of its Northern California oil refinery.

Brown said that the oil company has agreed to offset greenhouse gas emission increases until the carbon-cutting regulations of AB 32 take effect in 2012.

“This agreement is a groundbreaking step in California’s battle to combat global warming and gives the state an early edge in meeting the greenhouse gas reduction goals of AB 32,” Brown told a news conference with ConocoPhillips at the Attorney General’s Office in San Francisco.

ConocoPhillips has proposed an oil refinery expansion at its Rodeo facility in Contra Costa County, including a hydrogen plant to make cleaner-burning gasoline and diesel fuels from the heavy portion of crude oil. Brown appealed to the Contra Costa County Board of Supervisors, challenging the environmental documentation for the project and the failure to mitigate the increased greenhouse gas emissions resulting from the operation of the hydrogen plant.

The Attorney General said he would now withdraw the state’s appeal based on the significant greenhouse gas emission offsets agreed to by ConocoPhillips.

Brown added, “Under this unprecedented global warming reduction plan, ConocoPhillips becomes the first oil company in America to off-set greenhouse gas emissions from a refinery expansion project. This is a breakthrough.”

The hydrogen project will initially emit approximately 500,000 metric tons of CO2 per year. ConocoPhillips will take the following actions as part of its efforts to offset these emissions:

• Auditing all its California refineries and identifying all greenhouse gas emission sources and reduction opportunities.

• Conducting an energy efficiency audit at Rodeo to identify feasible energy efficiency measures.

• Funding a $7 million offset program that the Bay Area Air Quality Management District will use to support offset projects in the Bay Area.

• Funding $2.8 million for reforestation efforts in California, with an estimated sequestration of 1.5 million metric tons of greenhouse gases over the life of the reforestation projects.

• Funding $200,000 for restoration of the San Pablo wetlands.

• Surrendering the operating permit for the calciner at the Santa Maria facility, which ConocoPhillips estimates emitted 70,000 metric tons of greenhouse gases annually.

• If ConocoPhillips reduces its greenhouse gas emissions at the Rodeo facility, it will get credit towards its contribution to the Bay Area Air Quality Management District offset fund.

ConocoPhillips also agrees to offset any CO2 emissions in excess of 500,000 metric tons per year from the hydrogen unit if it increases its use of hydrogen. The company may apply to receive offsets credits for reductions achieved through the projects and activities funded through this agreement, under AB 32, or any equivalent state or federal law or regulation.

In 2005, ConocoPhillips proposed a project, known as the Clean Fuels Expansion Project, designed to make cleaner-burning gasoline and diesel fuels from the heavy gas oil already produced at the refinery. The expansion included a hydrogen plant to produce steam and electricity for these refinery processes. ConocoPhillips estimated that the project would increase the supply of cleaner burning fuels by approximately one million gallons per day in California.

Under the California Environmental Quality Act (CEQA), Contra Costa County prepared an Environmental Impact Report on the project and accepted public comments. After the concluding that the report adequately addressed greenhouse gas emissions and climate change, the County Planning Commission certified the report. Attorney General Brown appealed to the Contra Costa County Board of Supervisors in May 2007 on grounds that the impact report did not adequately address the greenhouse gas emissions and the associated climate change impacts of the project.

Scientists throughout the world overwhelming agree that global warming is real, is here now, and will get worse. At current emissions levels, temperatures in California will increase by 4 to 10 degrees during this century. In 2006 Governor Arnold Schwarzenegger signed AB 32, landmark global warming legislation that commits the state to reduce greenhouse gas emissions to 1990 levels by 2020—a 25% reduction. But AB 32 regulations do not take effect until 2012 and there are no current limits on greenhouse gas emissions.

Today’s agreement with ConocoPhillips comes on the heels of a landmark agreement with San Bernardino County to reduce greenhouse gas emissions at the county level. These actions join a growing movement at the local level to combat climate change. As of June 2007, over 540 mayors from 50 states have signed the U.S. Mayors Climate Protection Agreement, a pledge to reduce global warming pollution in cities 7% below 1990 levels by the year 2012.

In California, the League of California Cities and the California State Association of Counties have partnered with the Institute for Local Government to launch a California Climate Action Network. The network proposes a variety of actions—from conserving energy to using lower carbon fuels—that can be taken by local jurisdictions to cut greenhouse gas emissions. For more information visit: http://www.ca-ilg.org/climatechange/

The attorney general’s global warming agreement with ConocoPhillips is attached.

DISTRICT OF COLUMBIA – California Attorney General Edmund G. Brown Jr. today filed a report questioning the effectiveness of the Microsoft consent decree. Brown joined Connecticut, Iowa, Kansas, Minnesota, Massachusetts and the District of Columbia in filing the Report on Remedial Effectiveness concerning the Microsoft Final Judgment.

Attorney General Brown said: “The decree has not lived up to its goal of increasing market competition.”

The report contains descriptions of the Final Judgment’s lack of effectiveness; it does not contain recommendations on how to improve the Judgment. The California Group will be prepared to discuss at the next Joint Status Conference on September 11, 2007, what, if any, changes the Court might consider in this case.

The report is attached.

LOS ANGELES—California Attorney General Edmund G. Brown Jr. today asked consumers to inspect certain car tires manufactured from 2002 to 2006 for possible dangerous damage. The tires were made by Hangzhou Zhongce Rubber Co. Ltd. in China and distributed in the United States under the names: Westlake, Compass, YKS, Vesta, Goodride, Milestone, and Telluride.

In June, tire distributor Foreign Tire Sales, Inc. (FTS) filed a report with the National Highway Traffic Safety Administration (NHTSA) stating that certain tires may not meet minimum specifications and may be unsafe. 450,000 of these tires were imported into the United States and sold by many hundreds of tire dealers, including many dealers in California. As many as 270,000 of these tires may have insufficient or missing “gum strips,” an important part of a tire related to the prevention of thread separation.

“As a measure of good caution, consumers should check their car tires for signs of thread separation or possible damage and standby for a recall in the future,” Attorney General Brown said.

If an inspection indicates that your tire may be unsafe, please contact Attorney General Brown's Public Inquiry Unit at http://ag.ca.gov/contact/complaint_form.php?cmplt=CL . Although at this time, NHTSA has not called for a recall of any of these tires, an official recall of at least some of these tires may occur as early as this month.

Because of the seriousness of tire separation, Attorney General Brown is urging consumers who to have the tires with the following sizes to have them checked by their tire dealer:

LT225/75R-16 CR 861
LT235/75R-15 CR861 CR857
LT235/85-16 CR 860 CR861 CF857
LT245/75R-16 CR860 CR861 CR857
LT265/75R-16 CR860 CR861 CR857
LT310X10.5-15 CR861 CR857

The DOT number, brand name, size, and model are found on the tire sidewall. Affected tires also will contain a tire size starting with 'LT,' as well as a DOT number that starts with '7D' and ends in either '02,' '03,' '04,' or '05.' Further information can be obtained from FTS's web site at www.foreigntire.com.

In the interest of public safety, the Attorney General is asking tire dealers not to charge for such an inspection, but since no recall notice has yet been implemented, dealers are not required to inspect the tires without charge. Consumers should not drive their vehicles for long distances on hot roads until they are checked and it is recommended not to overload vehicles.

Consumers who have accidents as a result of one of these tires, should contact the Attorney General's Public Inquiry Unit and file a report with the NHTSA by calling the Vehicle Safety Hotline Toll-Free: 1-888-327-4236 TTY: 1-800-424-9153.

As part of general tire safety, consumers should review the following tips:

* At least once a month and before every long trip, inspect tires for patterns of uneven wear that could damage tires. Check tire inflation pressure in accordance with manufacturer recommendations.

* Do not overload your vehicle. Excess weight can place extra stress on your tires. Check your tire placard or vehicle owner's manual for the maximum amount of weight your vehicle can safely carry.

* Develop safe driving habits. Observe speed limits and avoid fast stops, starts, and turns. Avoid contact with potholes, object, and curbs when driving or parking your vehicle.

* Keep your vehicle properly maintained. Rotate tires regularly, get wheels balanced, and get a front-end alignment as necessary.

* Use the proper tires for your vehicle. Check the vehicle manufacturer's recommendations before replacing a tire with a different size and/or construction.

* Be aware of how the outside temperature affects your tires. Hot weather can be especially hard on tires, causing them to expand. As the outside temperature drops 10 degrees, tire pressure drops about one or two pounds per square inch.

* Have any tire problems checked out by professionals. If you find that one of your tires is losing pressure, take it to a tire expert for a complete internal inspection.

* Be careful of buying used tires. It is possible that some used tire dealers may try to capitalize on this situation by re-selling tires subject to this inquiry that have been replaced and are supposed to be destroyed. Though unethical and hazardous, it has happened before. Check used tire numbers, and do not buy any that are specified in this inquiry.

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SACRAMENTO - California Attorney General Edmund G. Brown Jr. today began mailing restitution claim forms to approximately 78,000 customers who were 'targets of improper sales practice' after joining a national $325 million lawsuit settlement with Ameriquest. The settlement provides $51 million for eligible California customers of Ameriquest Mortgage Company, Town and County Credit Corporation, and AMC Mortgage Services, Inc., formerly known as Bedford Home Loans.

The settlement resolves allegations that Ameriquest and its affiliates failed to adequately disclose home loan terms, failed to disclose whether loans carried fixed or adjustable rates, refinanced borrowers into inappropriate loans, inflated the appraisals used to qualify borrowers for loans, and charged excessive loan origination fees and prepayment penalties. The company engaged in these unlawful mortgage lending practices from 1999 through 2005.

"Hard-working families trying to buy a home wound up as targets of improper sales practice,' said Attorney General Brown. 'This settlement provides homebuyers with at least some of the restitution they deserve.'

Other parties in the $325 million settlement include the California Department of Corporations, Alameda, Los Angeles, Merced, Monterey, San Francisco, and San Mateo County District Attorneys, Attorneys General and banking and finance regulators from the District of Columbia and every state (except Virginia where Ameriquest did not conduct business).

The forms mailed today indicate the minimum payment that customers can expect to receive. The average restitution payment is $812.15 but the amount could be larger depending upon how many customers choose to participate in the settlement. Consumers who want the restitution payment should mail completed and signed forms to the settlement administrator by September 10, 2007.

Consumers who accept the restitution payment will relinquish their right to file lawsuits against Ameriquest unless their home goes into foreclosure. If a consumer's home goes into foreclosure, the consumer may still file a lawsuit against Ameriquest even if the restitution payment was accepted.

Consumers are encouraged to consult a private attorney or legal services attorney before deciding whether to participate in the settlement. A 'Frequently Asked Questions' pamphlet was mailed with the claim forms to provide additional information about the restitution process for eligible consumers. Consumers can also obtain detailed information about the settlement by contacting the Ameriquest Settlement Administrator at: or by calling 1-800-420-5875 (1-866-494-8274 for deaf or hard of hearing consumers).

The state's complaint against Ameriquest is attached. The court's judgment is attached. A copy of the information letter and 'Frequently Asked Questions' mailed today is also attached.

SACRAMENTO – California Attorney General Edmund G. Brown Jr. today announced a $3 million settlement with America Online (AOL), one of the nation’s largest Internet service providers. The prelitigation settlement, entered into by California, the District of Columbia and 47 other states, resolves complaints that AOL failed to disclose terms and conditions of paid service and made it extremely difficult for consumers to cancel their AOL pay services. Under today’s agreement AOL will make a number of improvements including: easier cancellation procedures, improved billing disclosures and commitment to refunding unauthorized charges.

Historically, AOL’s primary service has been dial-up Internet access, typically offered through a free trial offer that requires consumers to cancel their accounts to avoid a monthly membership fee. AOL announced in August 2006, that it would begin limiting its role as an Internet access provider and start allowing customers to convert to free e-mail accounts.

California Attorney General Edmund G. Brown Jr. said: “Today’s agreement will minimize the potential for consumer confusion during the transition to free e-mail accounts.”

Prior to this settlement, AOL only allowed customers to cancel their service by fax, mail or telephone. The majority of consumers called AOL directly and wound up speaking with service representatives who earned rewards, in some cases up to $3000 per month, for persuading customers not to terminate service. Consumers complained that this practice of trying to “save” customers made cancellation extremely difficult if not impossible.

Today’s settlement puts strict limitations on the practice of “saving” customers and requires recording and verification of these telephone calls. In addition, consumers are now able to easily cancel service online at: http://cancel.aol.com.

Today’s settlement also requires AOL to change confusing billing practices. AOL will clearly disclose how terminated accounts are reactivated and the customer must now resubmit any payment information before AOL can reactivate a paid service. The company will also clearly disclose the exact charge that will be placed directly on a customer’s monthly telephone bill. AOL will also revise its practice of allowing consumers to create “spin off” accounts, which are additional paid accounts for AOL service that stem from one original membership. Under the settlement, these accounts can now only be created over the telephone and customer service agents must completely disclose the exact additional cost of creating a “spin off” account.

The agreement also requires AOL to give refunds to consumers who complained of unauthorized charges for AOL service. If a consumer can show AOL billing after a cancellation attempt, AOL will refund those charges. The company will continue cooperating with the state to resolve outstanding complaints and continue refunding consumers for unauthorized charges.

The California Attorney General's Office was on the executive committee that led the negotiated agreement. Other participants in today’s settlement include: Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Louisiana, Maine, Maryland, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Washington, West Virginia Wisconsin, and Wyoming, the Commonwealths of Kentucky, Massachusetts, Pennsylvania and Virginia, and the District of Columbia.

Under the settlement, AOL must provide a proper mailing address, fax number, and e-mail address where consumer complaints may be forwarded. Consumers who believe they have been charged by AOL for unauthorized service may contact the Attorney General’s Public Inquiry Unit to make a complaint. Complaints may be made in writing to: Public Inquiry Unit, Attorney General's Office, Attn: P.O. Box 944255, Sacramento, CA 94244-2550, or by using the online consumer complaint form: http://ag.ca.gov/contact/complaint_form.php?cmplt=CL

The settlement agreement is attached.

WASHINGTON D.C. – California Attorney General Edmund G. Brown Jr. announced today that Microsoft has agreed to make significant changes in the design of its desktop search feature in the Windows Vista operating system. Details of Microsoft’s agreement were outlined in a joint status report that was filed today in federal district court regarding the company’s compliance with a 2002 antitrust Final Judgment.

California Attorney General Edmund G. Brown Jr. said: “This agreement—while not perfect—is a positive step towards greater competition in the software industry. It will enhance the ability of consumers to select the desktop search tool of their choice.”

The California Attorney General’s Office became concerned with allegations that Microsoft was in violation of the Final Judgment after Google presented a complaint about the desktop search function in Vista, referred to as “Instant Search” in Microsoft’s promotional materials. Google argued that desktop search in Windows Vista is a “Microsoft Middleware Product” (MMP) and is therefore subject to the Final Judgment. The state contended that Vista’s desktop search feature is functionality that did not exist in prior Windows operating systems and is therefore covered under the Final Judgment.

Under the proposed solution, Microsoft will provide users and Original Equipment Manufacturers, such as HP or Dell, with greater flexibility to choose and access competing desktop search products. Microsoft has promised to deliver the required changes in a beta Service Pack 1 of Windows Vista, which Microsoft currently anticipates will be available by the end of the year.

The attorney general announced the agreement in conjunction with Microsoft, the United States Department of Justice and Plaintiffs in the New York Group (including New York, Ohio, Illinois, Kentucky, Louisiana, Maryland, Michigan, North Carolina, and Wisconsin) and the California Group (including California, Connecticut, Florida, Iowa, Kansas, Massachusetts, Minnesota, Utah, and the District of Columbia). The changes resolve complaints lodged against Microsoft under the California Group’s Final Judgment from November 2002.

The agreement is reflected in the attached joint status report, filed today in the federal district court in Washington D.C. The Final Judgment is also attached. The Judge is Colleen Kollar-Kotelly.

The KFC Corp. agreed Tuesday to comply with a 1986 voter-approved initiative requiring companies that expose consumers to harmful substances provide a 'clear and reasonable warning.'

The company agreed to warn California customers that its fried or baked potatoes contain acrylamide, a chemical known to cause cancer. Acrylamide, a byproduct created by the reaction of chemicals in food and high heat, is found in French fries and potato chips at high levels. For example, a serving of fries or potato chips has approximately 82 times more acrylamide than is allowed in drinking water under U.S. EPA standards.

Proposition 65, the initiative demanding the exposure warnings, was approved by 63 percent of California voters.

The KFC Corp., in settling a lawsuit with California Attorney General Edmund G. Brown Jr., agreed to supply consumers with acrylamide warnings to comport with Proposition 65, the Safe Drinking Water and Toxic Enforcement Act. The company, without admitting wrongdoing, also agreed to pay $208,000 in civil penalties and $133,000 to fund Proposition 65 enforcement actions.

A hearing before Los Angeles County Superior Court Judge Wendell Mortimer Jr. is scheduled May 29, when the California Department of Justice and the KFC Corp. will request the court's approval.

The settlement was the first as part of an ongoing Proposition 65 enforcement action against major food and beverage producers. They include: Frito-Lay Inc., Pepsico Inc., H.J. Heinz Co., Kettle Foods Inc., Procter & Gamble Distributing Co., Procter & Gamble Manufacturing Co., Wendy's International Inc., McDonald's Corp., and Burger King Corp.

The settlement agreement is attached.

(OAKLAND) – Attorney General Jerry Brown today announced an $8 million, 30-state settlement with Bayer Corporation that will resolve an enforcement action initiated because of Bayer’s failure to adequately disclose safety risks associated with the use of Baycol, a drug used to lower cholesterol that was pulled from the market in August 2001.

“This settlement is important because it establishes an obligation on pharmaceutical companies to inform the public and physicians about the tests they conduct on products,” Attorney General Brown said. “Posting both the positive and negative results from studies, will allow medical professionals to make better and safer prescribing decisions for their patients.”

The judgment, filed today in San Diego Superior Court, requires Bayer to publicly register most of its clinical studies and post the results at the end of each study. It also requires future marketing, sale, and promotion of its pharmaceutical and biological products to comply will all legal requirements, and prohibits Bayer from making false or misleading claims relating to any of these products sold in the United States.

In May 1998, Bayer introduced Baycol, a statin cholesterol-lowering drug, into the United States market. All statins carry a known risk of myopathy (a weakening of the muscles) and rhabdomyolysis (a more serious muscular disease). Bayer learned the risk of Baycol was significantly higher than other statins, especially at higher doses and when combined with genfibrozil (another cholesterol-lowering drug), through post-marketing surveillance of its product. In August 2001 Bayer voluntarily withdrew Baycol from the market.

The Attorneys General allege while Bayer informed the U.S. Food and Drug Administration about these adverse effects, they failed to adequately warn prescribing doctors and consumers about the risks. In entering the settlement, Bayer denies any wrongdoing.

In addition to California, the Attorneys General of the following states joined the settlement: Arizona, Arkansas, Connecticut, Delaware, Florida, Idaho, Illinois, Iowa, Kansas, Kentucky, Maine, Maryland, Massachusetts, Michigan, Mississippi, Montana, Nevada, North Carolina, Ohio, Oregon, Pennsylvania, South Carolina, South Dakota, Tennessee, Texas, Vermont, Virginia, Washington and Wisconsin.