Lawsuits & Settlements

LOS ANGELES – Attorney General Kamala D. Harris today announced that her office has obtained a $1.1 billion judgment against defunct Corinthian Colleges, Inc. (CCI) for their predatory and unlawful practices. While CCI filed for bankruptcy in May 2015, this judgment can help secure further relief for struggling students.

Former Corinthian Students should visit the Attorney General’s Interactive Tool for tailored information to help them locate needed resources and relief.

In October 2013, Attorney General Kamala D. Harris led the charge against CCI and its subsidiaries that operate Everest, Heald, and Wyotech colleges, filing suit seeking to put an end to abusive practices that left tens of thousands of students under a mountain of debt and useless degrees. CCI filed for bankruptcy in May 2015. Today, the Court granted a default judgment against CCI.  In the judgment, the Court ordered restitution on behalf of students in the amount of $820,000,000 and civil penalties totaling $350,025,000, for a total of $1,170,025,000 in monetary relief. 

“For years, Corinthian profited off the backs of poor people – now they have to pay. This judgment sends a clear message: there is a cost to this kind of predatory conduct,” said Attorney General Harris. “My office will continue to do everything in our power to help these vulnerable students obtain all available relief, as they work to achieve their academic and professional goals.”

Attorney General Harris’ original complaint alleged that CCI intentionally targeted low-income, vulnerable Californians through deceptive and false advertisements and aggressive marketing campaigns that misrepresented job placement rates and school programs. CCI deployed these advertisements through persistent internet, telemarketing and television ad campaigns. The complaint further alleged that Corinthian executives knowingly misrepresented job placement rates to investors and accrediting agencies, which harmed students, investors and taxpayers. The Attorney General filed many of these documents in Court before entry of the Court’s judgment, and they are now publicly available.

In the Final Judgment, the Court found, among other things, that:

• From at least 2009 until the closure of its schools, many of CCI’s representations and advertisements related to job placement were untrue and/or misleading.   In numerous cases, the placement rate data in CCI’s files show that the actual placement rate is lower than the advertised rate.  The placement rates that CCI published were systematically false, misleading, erroneous and/or failed to comply with applicable state and federal regulations and/or accreditor standards.  In addition, many of these published placement rates could not be substantiated using CCI’s own internal placement data and files. 
• CCI did not offer ultrasound technician programs, x-ray technician programs, radiology technician programs, or dialysis technician programs in California.  Despite this fact, from at least 2010 until the filing of this action, CCI ran millions of ads stating that they did offer those programs.  CCI executives knew that these false ads misled students.
• CCI unlawfully used the official seals of the United States Department of the Army, the United States Department of the Navy, the United States Department of the Air Force, the United States Marine Corps, and the United States Coast Guard.
• CCI’s enrollment agreements contained unlawful clauses.
• CCI engaged in unlawful debt collection.
• CCI failed to discloses its role in the Genesis Private Student Loan Program.
• CCI misrepresented the transferability of credits.
• CCI misrepresented its financial stability to students.

In April 2015, Attorney General Harris and eight other state Attorneys General sent a letter to the U.S. Department of Education urging immediate debt relief for the students who attended Heald College and other CCI campuses.  In May 2015, Attorney General Harris sent a letter to U.S. Department of Education Secretary Arne Duncan, asking the Department to exercise its authority under closed school discharge regulations to provide aid to students affected by Corinthian’s predatory practices.  In June 2015, after calls from Attorney General Harris for substantive relief for students suffering from crippling debt, the U.S. Department of Education announced expanded debt relief options for Corinthian students, which resulted in many more students being eligible for relief.  

Attorney General Harris remains committed to protecting vulnerable students, most recently through the Department of Education’s negotiated rulemaking sessions on borrower defense, where Attorney General Harris called for revisions to proposed borrower defense regulations to ensure meaningful debt relief for students misled by predatory for-profit colleges. 

A copy of the judgment is attached to the electronic version of this release at: https://oag.ca.gov/news 

Agreement to provide certain California borrowers with loan modifications; foreclosed HSBC loans may be eligible for payments for past abuse 

SAN FRANCISCO – Today Attorney General Kamala D. Harris announced that California will join the U.S. Department of Justice, Department of Housing and Urban Development, and 48 other states in entering into a consent judgment with mortgage lender and servicer HSBC over its faulty mortgage servicing practices. This ruling will address mortgage origination, servicing, and foreclosure abuses perpetuated by HSBC.

“California homeowners worked hard and played by the rules to stay in their homes during the housing crisis, but for too many, their struggle and sacrifice was met by abusive mortgage servicing practices,” said Attorney General Harris. “This settlement holds HSBC accountable for its abusive practices that manipulated people fighting to stay in their homes. I encourage eligible borrowers who receive a claim form and feel they were a victim of HSBC’s practices to file a claim immediately.”      

Under the terms of the agreement, HSBC will pay $100 million in cash, of which $59.3 million will be used to distribute payments to borrowers whose homes were foreclosed upon between 2008 and 2013, and $40.5 million will be paid to the federal government. The agreement also requires HSBC to provide $370 million in other consumer relief, such as loan modifications, principal reductions, and loan refinancing.

Based on foreclosure numbers, it is estimated that California borrowers are eligible for about 10% of the $59.3 million fund for payments to foreclosed borrowers.

This agreement is very similar to the National Mortgage Settlement of 2012, in which Attorney General Harris secured a historic $20 billion for California homeowners affected by the mortgage crisis. In 2014, Attorney General Harris announced several multimillion dollar settlements regarding mortgage fraud crime, including a national settlement with SunTrust Mortgage that provided $40 million in payments and $500 million in consumer relief nationwide; a national settlement with Bank of America in which California recovered $300 million in damages and $500 million in consumer relief credits; and a national settlement with Citigroup in which California recovered $102.7 million in damages and $90 million in consumer relief. 

Additional information concerning today’s announcement is listed below.

Loan Modifications

The HSBC agreement requires the company to provide certain California borrowers with loan modifications or other relief. The modifications, which HSBC chooses through an extensive list of options, include principal reductions and refinancing for underwater mortgages. HSBC decides how many loans and which loans to modify, but must meet certain minimum targets. Because HSBC receives only partial settlement credit for many types of loan modifications, the settlement will provide relief to borrowers that will exceed the overall minimum amount.

Payments to Borrowers

Approximately 7,526 eligible California borrowers whose loans were serviced by HSBC and who lost their home to foreclosure from January 1, 2008 through December 31, 2012 and encountered servicing abuse will be eligible for a payment from the national $59.3 million fund for payments to borrowers. The borrower payment amount will depend on how many borrowers file claims. 

Eligible borrowers will be contacted about how to qualify for payments.

Mortgage Servicing Standards

The settlement requires HSBC to substantially change how it services mortgage loans, handles foreclosures, and ensures the accuracy of information provided in federal bankruptcy court.

The terms will prevent past foreclosure abuses, such as robo-signing, improper documentation, and lost paperwork. 

The settlement’s consumer protections and standards include:

• Making foreclosure a last resort by first requiring HSBC to evaluate homeowners for other loss mitigation options;
• Restricting foreclosure while the homeowner is being considered for a loan modification;
• Procedures and timelines for reviewing loan modification applications;
• Giving homeowners the right to appeal denials; and

Requiring a single point of contact for borrowers seeking information about their loans and maintaining adequate staff to handle calls.

Independent Monitor

The National Mortgage Settlement’s independent monitor, Joseph A. Smith Jr., will oversee HSBC agreement compliance for one year. Smith served as the North Carolina Commissioner of Banks from 2002 until 2012, and is also the former Chairman of the Conference of State Banks Supervisors (CSBS). Smith will oversee implementation of the servicing standards required by the agreement and issue public reports that identify whether HSBC complied or fell short of the standards imposed by the settlement. If HSBC is alleged to have violated terms of the agreement, the states and federal agencies can seek relief through the court.

Additional Terms

The agreement resolves potential violations of civil law based on HSBC’s deficient mortgage loan origination and servicing activities. The agreement does not prevent state or federal authorities from pursuing criminal enforcement actions related to this or other conduct by HSBC, or from punishing wrongful securitization conduct that is the focus of the Residential Mortgage-Backed Securities Working Group. Additionally, the agreement does not prevent any action by individual borrowers who wish to bring their own lawsuits.

The agreement will be filed as a consent judgment in the U.S. District Court for the District of Columbia. 

For more information on how to file a claim against a business/company, visit: https://oag.ca.gov/contact/consumer-complaint-against-business-or-company

LOS ANGELES – Attorney General Kamala D. Harris today announced that she has lodged a lawsuit against Southern California Gas Company for violations of California law in connection with a massive methane leak from its Aliso Canyon natural gas storage facility.  In addition to filing suit in her independent capacity as Attorney General, Harris’s lawsuit also includes her client, the California Air Resources Board. The natural gas leak has caused a public health and statewide environmental emergency, which has sickened residents of Porter Ranch and compelled them to relocate.   

The lawsuit alleges that Southern California Gas Company violated state health and safety laws by failing to promptly control the release of the natural gas and report the leak to authorities. In addition, the lawsuit cites the environmental threat the uncontrolled release of more than 80,000 metric tons of methane into the atmosphere poses to California’s efforts to reduce greenhouse gas (“GHG”) emissions and mitigate the pace and effects of climate change.   

“The impact of this unprecedented gas leak is devastating to families in our state, our environment, and our efforts to combat global warming. Southern California Gas Company must be held accountable,” said Attorney General Harris. “This gas leak has caused significant damage to the Porter Ranch community as well as our statewide efforts to reduce greenhouse gas emissions and slow the impacts of climate change. My office will continue to lead this cross-jurisdictional enforcement action to ensure justice and relief for Californians and our environment.” 

Specifically, the lawsuit alleges claims of public nuisance under California Civil Code section 3479 and violations of California’s Unfair Competition Law (Bus. & Prof. Code, § 17200, et seq.), joining the City and County of Los Angeles’ pending claims. Attorney General Harris’s lawsuit also alleges violations of Health and Safety Code sections 41700 (discharge of air contaminants) and 25510 (hazardous materials release reporting); and Government Code section 12607 (impairment of the State’s natural resources). 

The Attorney General seeks relief in the form of injunction, civil penalties, and restitution.

The leak, which was discovered on October 23, 2015, has yet to be abated.  The primary component of the leak is methane, which is the second largest component of GHG emissions in California behind carbon dioxide.  As of January 8, 2016 – eleven weeks after the leak was discovered – it was estimated that cumulative methane emissions amount to more than two million metric tons of carbon dioxide equivalent (approximately two percent of estimated statewide GHG emissions over the same period), and this cumulative total will grow as the leak continues.  

"Attorney General Harris' action today is a significant step in the ongoing effort to hold Southern California Gas accountable, end this public health emergency and assure it never happens again," said Los Angeles City Attorney Mike Feuer, who filed suit against Southern California Gas Company on December 7. 

"This action recognizes the impacts of this ongoing leak on our climate and ensures there’s accountability,” said California Air Resources Board Chair Mary D. Nichols.

Given the critical nature and magnitude of the release, its negative impact on California’s statewide GHG emissions reduction efforts, and the Attorney General’s broad authority to remedy the harms at issue, the Attorney General’s participation in the enforcement action is necessary to ensure that the interests of the people of the State of California are fully represented.

The Attorney General and the California Air Resources Board are in an ideal position to ensure that effective GHG emission mitigation is achieved.  Additionally, the Office of the Attorney General is uniquely situated to coordinate multiple agency claims and represent the interests of those agencies, conserving state resources.  The Attorney General is already serving a crucial coordinating role, facilitating the exchange of information among the numerous state, federal, and local agencies with jurisdiction over the gas leak.

The Attorney General’s filing complements ongoing actions of the numerous government agencies that are coordinating efforts related to the gas leak.  In addition to the Air Resources Board, these agencies include the California Energy Commission, the California Public Utilities Commission, the Department of Fish and Wildlife, the Division of Oil, Gas and Geothermal Resources, the Governor’s Office of Emergency Services, the Los Angeles Regional Water Quality Control Board, the Office of Environmental Health Hazard Assessment and the South Coast Air Quality Management District. Also included are the U.S. Environmental Protection Agency, Region 9 and Los Angeles County.

LOS ANGELES – Today, Attorney General Kamala D. Harris, in conjunction with eleven California District Attorneys and the nonprofit Center for Environmental Health, announced a landmark settlement with food industry giant Mondelēz International, Inc., formerly Kraft Foods, for selling ginger snap cookies containing lead in excess of California limits without the warning required by California’s Proposition 65.  A consent judgment was filed Thursday in Orange County Superior Court and is awaiting approval by a judge. 

“The levels of lead found in Nabisco’s Ginger Snap cookies posed a serious public health threat, potentially impacting the brain development of our children,” said Attorney General Harris.  “Parents need accurate information to make educated food choices for their children.  My office will continue to enforce Proposition 65 to guarantee that all Californians are fully informed when hazardous substances and chemicals can be found in consumer products.”

Under the settlement, Mondelēz will agree to strict product sourcing and testing protocols that limit lead in its Nabisco Ginger Snap cookies to no more than 30 parts per billion per serving and will pay approximately $750,000 in civil penalties, costs and attorneys’ fees.  Additionally, the company will hire a food quality auditor to train personnel, will fund ongoing independent auditing of its products to monitor for lead, and will monitor supply chains to ensure raw materials are within acceptable limits. 

Lead is a neurotoxin that primarily affects the central nervous system, putting children with developing brains at a greater risk of suffering from the neurotoxic effects of lead.  While no safe lead exposure threshold has been identified, California’s Proposition 65 requires a warning to consumers if they are exposed to 0.5 micrograms of lead per serving per day. The FDA recommends that children do not ingest candies that contain more than 100 parts per billion of lead.

The Attorney General’s office and District Attorneys began their investigation of Nabisco Ginger Snaps in 2013, after a Center for Environmental Health investigation into these and other cookies containing ginger.  Testing revealed that a serving of Nabisco brand Ginger Snaps contained lead levels up to 9 times the level that requires a warning under Proposition 65.  Mondelēz was not providing any Proposition 65 warnings to its customers.

The ginger snap cookies have since been reformulated.  Lead sources in the cookies were linked to ginger and molasses.  Experts have linked high lead levels in molasses to soil in which sugar is grown, and also to the manufacturing process.  Sources of lead in powdered ginger have also been linked to contaminated soil in which ginger is grown, and to the brining process in which it is dried.

Mondelēz is the world’s largest manufacturer of processed snack foods. Mondelēz brands include Nabisco, Oreo, Cadbury and Trident.  Nabisco brand ginger snap cookies were the subject of the lawsuit.

Proposition 65, "The Safe Drinking Water and Toxic Enforcement Act of 1986,” is California’s landmark law which serves to protect public health and the environment by requiring businesses to provide warnings if they expose individuals to any listed carcinogens or reproductive toxins.  At least once a year, the state must update a list of chemicals known to cause cancer or birth defects or other reproductive harm. This list includes approximately 800 chemicals.  Proposition 65 mandates that businesses notify Californians about significant amounts of chemicals in the products they purchase, in their homes or workplaces, or that are released into the environment.  It also prohibits California businesses from knowingly discharging significant amounts of listed chemicals into sources of drinking water. 

This settlement is part of a series of cases that Attorney General Harris and her predecessors have successfully prosecuted under Proposition 65, in order to remove lead from a wide variety of consumer products, including Mexican candy and soda, artificial turf, jewelry, and vitamins and nutritional supplements.

The eleven District Attorney’s Offices in the action are part of the California Food, Drug and Medical Device Task Force, which prosecutes multi-jurisdictional actions involving product safety and labeling of food, drug and medical devices in California.  Consumer-protection prosecutors from Orange, Santa Clara, Santa Cruz, Alameda, Sonoma, Napa, Shasta, Solano, Marin and Monterey Counties participate in the task force.

In early 2015, Attorney General Kamala D. Harris announced the formation of the Bureau of Children’s Justice (BCJ) at the California Department of Justice.  BCJ’s mission is to protect the rights of children and focus the attention and resources of law enforcement and policymakers on the importance of safeguarding the rights of every child so that they can meet their full potential.  Staffed with civil rights and criminal prosecutors, and working across all sectors of the Department of Justice, including Legislative Affairs, Native American Affairs, the Division of Law Enforcement and other sections, BCJ focuses its enforcement and policy reform efforts on several key areas, including discrimination and inequities in education; systemic reform of foster care, adoption, and juvenile justice systems; and consumer protection relating to services and products for children or families with children.

India-Based Company to Pay $100,000 Over Unfair Business Practices, Use of Pirated Software, in First Legally Enforceable Judgment by a State Against a Foreign Company

LOS ANGELES - Attorney General Kamala D. Harris today announced a settlement resolving allegations that Pratibha Syntex Ltd., a company based in India, gained an unfair competitive advantage over American-based companies by using pirated software in the production of clothing imported and sold in California. The case marks the first time a state has secured a legally enforceable judgment against an international company for these types of violations. 

The settlement, which was filed in Los Angeles Superior Court and has been approved by a judge, requires Pratibha Syntex to pay $100,000 in restitution within 30 days.

In 2013, Attorney General Harris sued Pratibha Syntex on the basis that it did not pay licensing fees for software it relied on for its business, including products manufactured by Adobe, Microsoft, and others, giving the company a significant cost advantage in the low-margin business of apparel manufacturing, shipment and sales.

“Pratibha Syntex engaged in illegal business practices that placed California garment companies at a disadvantage, while hurting American software companies’ ability to develop new and innovative products, ” Attorney General Harris said. “Businesses around the globe should be on notice that the state of California will hold them accountable for stealing intellectual property to unfairly undercut their competition.”

Other terms of the landmark settlement prohibit Pratibha Syntex from using unlicensed software or reproducing any part of a copyrighted software program without the permission of the legitimate copyright holder, and further require the company to perform four complete audits of the software on their computers and fix any violations within 45 days.  In addition, Pratibha Syntex must draft an information technology policy statement regarding the use of licensed software and distribute this policy to all employees.

The complaint alleges that Pratibha Syntex obtained an unfair advantage because they were able to redirect money saved by using pirated software to hire employees and invest in research and development efforts.  The use of pirated software not only provides companies with an unfair business advantage, but also deters American software companies, particularly those developing software used in the garment industry, from investing in new technology and products.

“Our software is a key differentiator in the business operations of the fashion industry. Companies using software without paying for it should not be rewarded with lower costs, especially when this comes at the expense of hardworking American companies,” said Shahin Kohan, president of AIMS360, which designs and develops powerful and state-of-the-art software solutions for apparel manufacturers, wholesalers, and importers. “This landmark settlement will allow us to continue innovating and help our customers grow their businesses and create new jobs.”

California’s apparel industry, which is largely based in Los Angeles County, employed nearly 100,000 people in 2012-2013.  A 2011 study by the Orange County Business Council found that California had lost nearly 400,000 manufacturing and technology jobs over the past decade to countries where piracy rates are as high as 80 percent. This activity resulted in a loss of $1.6 billion in economic activity and $700 million in tax revenue for California.

Copies of the complaint and stipulated judgment are attached to the online version of this release at www.oag.ca.gov/news.

SAN FRANCISCO - Attorney General Kamala D. Harris and Alameda County District Attorney Nancy E. O’Malley today announced a settlement with Comcast Cable Communications LLC (“Comcast”) to resolve allegations that Comcast both unlawfully disposed of hazardous waste and discarded records without first omitting or redacting private customer information. As part of the settlement, Comcast will pay a total of $25.95 million. 

“Comcast’s careless and unlawful hazardous waste disposal practices jeopardized the health and environmental well-being of California communities and exposed their customers to the threat of identity theft,” said Attorney General Harris. “This agreement holds Comcast accountable for breaking the law and puts strict measures in place to prevent them from putting Californians and our environment at risk in the future.”

“Today’s settlement represents a victory in California’s ongoing efforts to ensure that hazardous waste is disposed of in a safe, legal and environmentally sustainable manner,” states Alameda County DA Nancy E. O’Malley. “Not only will my office pursue all necessary legal action against entities that pollute our environment, but we will also use all legal means to ensure California’s consumers’ private information is protected.  My office will continue to work together with state and local agencies to investigate and prosecute violations against our environment.”

The civil enforcement action and proposed settlement against Comcast were filed today in Alameda County Superior Court by Attorney General Harris and District Attorney O’Malley. The settlement requires court approval before it becomes final.

Today’s announcement stems from a robust investigation by the offices of Attorney General Harris and District Attorney O’Malley, assisted by the Department of Toxic Substances Control and the California Highway Patrol. According to the investigation, since 2005, Comcast warehouse and dispatch facilities and customer service centers throughout the state unlawfully handled and disposed of various hazardous waste products, routinely and systematically sending these materials to local landfills that were not permitted to receive these items. The majority of the hazardous waste was electronic equipment such as remote controls, splitters, routers, modems, amplifiers, and power adapters. The investigation also uncovered that Comcast discarded documents containing sensitive customer information, including names, addresses and phone numbers, into the trash without shredding them or making them unreadable, potentially exposing the information to identity thieves.

If approved by the court, under the final judgment, Comcast must pay $19.85 million in civil penalties and costs. An additional $3 million will fund projects furthering environmental and consumer protection and enforcement in California. Comcast will also be providing CalRecycle with $2.25 million in airtime over a four-year period and $150,000 to develop and produce public service announcements that educate the public on the proper handling and disposal of hazardous waste they might generate, including electronics. Finally, Comcast will spend a minimum of $700,000 to enhance its environmental compliance and will be prohibited from violating these laws in the future, under the terms of a permanent injunction.

Upon notice of the investigation, Comcast agreed to cooperate and, at the request of the Attorney General and the Alameda County DA, took interim steps to improve its hazardous and universal waste management compliance programs. As part of the settlement, Comcast has committed to fund multiple measures over the next five years to enhance its environmental compliance. Comcast will also be required to hire an independent auditor to conduct three audits of its environmental and customer privacy compliance over the next five years. There are ten Comcast facilities in Alameda County and all ten facilities are subject to the terms of the settlement.

Last year, Attorney General Harris and District Attorney O’Malley reached a $23.8 million settlement with AT&T over similar hazardous waste disposal violations.

Copies of the civil enforcement action and proposed settlement are attached to the online version of this release at oag.ca.gov/news.

LOS ANGELES - Attorney General Kamala D. Harris, along with two local District Attorneys, today filed civil lawsuits against two car donation charities for violating state law by misrepresenting their charitable programs and improperly profiting from ostensibly charitable activities.

In partnership with the Los Angeles County District Attorney’s Office, Attorney General Harris filed suit against People’s Choice Charities; and in partnership with the Ventura County District Attorney’s Office, the Attorney General filed suit against Cars 4 Causes. 

Car donation organizations are 501(c)(3) tax-exempt organizations that solicit car donations (often through extensive advertising), sell the vehicles, deduct all their costs, and then use what is left to fund a charitable program, which they choose or allow the donor to choose.  

“These charities exploited the goodwill of generous donors by misrepresenting their charitable programs, misappropriating donations and accruing excessive administrative costs,” said Attorney General Kamala D. Harris. “These lawsuits hold People’s Choice Charities and Cars 4 Causes accountable for breaking the law and give California consumers greater confidence that their donations go toward the intended charitable cause.”

Los Angeles-based People’s Choice Charities (PCC) claimed that 100% of the net proceeds from the sale of donated cars would go to the donors’ chosen charities. As the lawsuit filed today alleges, 97% of the donations were spent on administrative costs, such as towing and car repairs, and advertising.  PCC claimed that towing was free and that PCC employs experienced staff to repair and sell the cars at minimal cost.  In reality, PCC charges the charities for towing expenses and has no repair staff; instead they pay outside vendors hundreds of thousands of dollars to do this work.  After PCC deducts its numerous and undisclosed expenses, only a tiny fraction of the vehicle’s sale price is forwarded to the donor’s chosen nonprofit.

According to audits conducted by the Attorney General’s office, from 2007 to 2012, PCC reported that it had donated over $700,000 to other nonprofits, while actually only donating $174,000. To increase their inventory, PCC also developed a “cash back” program whereby vehicle donors could receive money in return for their “donation,” effectively transforming a charitable organization into an unlicensed used car dealership in violation of state law.

Ventura-based Cars 4 Causes claimed it “worked smarter” to “get the most money for charity.”  In reality, as the lawsuit filed today alleges, C4C used 87% of its donations to pay for items such as advertising and administrative costs, including staff salaries, while only 13% was directed to actual charities. From 2009-2014, C4C reported that $15.9 million was donated to charity.  In reality, C4C only gave $5.4 million to charity—and many of the charities designated by donors received nothing at all.  During this time, C4C denied many requests from individuals in need seeking a car, including single mothers, college students, and seniors, all while paying thousands towards staff salaries and millions to advertisers.

C4C took money from the very charities it promised donors that it would support.  According to C4C’s own accountings, it misappropriated about $2 million from thousands of charities, including over $600,000 that should have been given to charities serving the sick and providing medical research, $250,000 to children’s and education charities, $100,000 to veterans’ organizations, $230,000 to religious organizations, and $200,000 to charities serving the poor, among others. 

In order to ensure that charitable donations are spent as intended, Attorney General Harris urges donors to donate directly to the organization they want to benefit.  If a car donation organization is used, call the beneficiary organization you designated to confirm that they received your donation.  If they did not, call the car donation organization and demand that they forward your donation.

Attorney General Harris has made it a priority to focus on enforcement of charitable misconduct.  For example, in May of 2015, the California Attorney General jointly filed with state law enforcement partners in every other state in the nation, the District of Columbia, and the Federal Trade Commission, a federal lawsuit against four cancer charities Cancer Fund of America, Children’s Cancer Fund of America, Cancer Support Services and The Breast Cancer Society and their operators, who allegedly scammed more than $187 million from consumers throughout the country.  In the eight-count complaint, the FTC and all the plaintiff states charged the defendants with misrepresenting that contributions would be used for charitable purposes, misrepresenting specific program benefits, misrepresenting revenue and program expenses related to international Gift in Kind, and misrepresenting that the primary focus of their reported programs was to provide direct assistance to individuals in the United States. 

The Attorney General's office today released a report summarizing the results of solicitation campaigns conducted in 2014 by commercial fundraisers in California.  The report is prepared from information contained in the annual financial disclosure reports filed by commercial fundraisers for 2014 and includes statistics for donations of both cash and used personal property (such as clothing and vehicles) for the benefit of charity.  The report shows that thrift stores and car donations provided significantly less donations to charities than other solicitation campaigns.   View the report here: https://oag.ca.gov/sites/all/files/agweb/pdfs/charities/publications/2014cfr/cfr2014.pdf?

Consumers can file a complaint with the Department of Justice by using the following form: http://oag.ca.gov/contact/consumer-complaint-against-business-or-company.

Copies of the complaint are attached to the online version of this release at http://oag.ca.gov/news.

LOS ANGELES - Attorney General Kamala D. Harris today released the following statement after the California Department of Justice joined 17 states, the District of Columbia, and several major cities to intervene in lawsuits filed in opposition to President Obama’s Clean Power Plan and New Source Standards.  The Clean Power Plan and New Source Standards, issued pursuant to the Clean Air Act, are the first-ever national standards that address greenhouse gas emissions from power plants.  

“President Obama’s plan to limit harmful emissions from power plants is necessary to preserve our natural resources and protect public health,” said Attorney General Harris.  “I will vigorously defend these rules on behalf of future generations of Californians.”

The Clean Power Plan requires existing fossil-fueled power plants, the largest single source of greenhouse gas emissions in the nation, to cut their emissions starting in 2022 and will reduce emissions from the power sector to thirty-two percent below 2005 levels by 2030.  The New Source Standards, which take immediate effect, limit emissions from new, modified and reconstructed power plants.

“In the face of overwhelming scientific evidence, reckless politicians and polluters want to gut the president’s clean air plans,” said Governor Edmund G. Brown, Jr. “Today, California and its partners stand together in fighting these pernicious and dangerous lawsuits.”

The finalization of the Clean Power Plan and New Source Standards marks the culmination of a decade-long effort by states and cities to require mandatory cuts in the emissions of climate change pollution from fossil fuel burning power plants under the Clean Air Act.  The rule for existing plants is expected to eliminate as much climate change pollution as is emitted by more than 160 million cars a year – or 70% of the nation’s passenger cars.

Since the Environmental Protection Agency (EPA) published the final versions of the rules on October 23, 2015,  lawsuits to challenge the rules have been filed by West Virginia, North Dakota coal industry associations, and others.  California is joining with 17 other states and the cities of New York, Philadelphia, Chicago, Boulder, and Broward County (FL) to intervene on the side of  EPA to defend the Clean Power Plan.  In addition, California is joining with 15 other states and two major cities to intervene in and defend EPA in cases challenging the New Source Standards.  

Attorney General Harris has aggressively fought to protect AB 32, California’s Global Warming Solutions Act of 2006, and is currently defending challenges to California’s Cap-and-Trade auctions and its precedent-setting Low Carbon Fuels Standard.  In 2014 and earlier this year, when West Virginia and coal producers filed legal challenges during the proposal stage of EPA’s rulemaking, Attorney General Harris and a coalition of states intervened to defend EPA.  The D.C. Circuit dismissed all those challenges as premature.

A copy of the motion to intervene is attached to the online version of this news release at oag.ca.gov/news.

LOS ANGELES - Attorney General Kamala D. Harris today announced a stipulated judgment resolving allegations that JPMorgan Chase (Chase) committed credit card debt-collection abuses against tens of thousands of Californians. The settlement specifically addresses debt collection wrongdoing that includes collecting incorrect amounts, selling bad credit card debt, and running a debt collection mill that involved illegally “robo-signing” thousands of court documents and improperly obtaining default judgments against military servicemembers.

As part of the settlement, Chase will pay $50 million in restitution to consumers nationwide, including an estimated $10 million to California consumers, and significant restitution to servicemembers in California, some of whom were on active duty when Chase obtained illegal default judgments against them.  Chase will also pay $50 million in penalties and other payments to California, through the Office of the Attorney General.  The judgment includes injunctive terms that fundamentally change Chase’s credit card debt-collection practices to prevent similar misconduct in the future.

“Abusive and illegal debt collection practices will not be tolerated in California,” Attorney General Harris said.  “This settlement provides real relief to tens of thousands of Californians, including servicemembers, and prevents JPMorgan Chase from continuing  these deceptive and illegal debt collection practices.”

Between 2009 and 2013, Chase filed more than 125,000 credit card collection lawsuits against California consumers relying on illegally robo-signed sworn documents and provided an additional 30,000 robo-signed sworn statements in support of lawsuits filed against California consumers by third-party debt-collectors.  Chase also made systematic calculation errors regarding the amounts owed, and sold “zombie debts” to third-party debt-collectors that included accounts that were inaccurate, settled, discharged in bankruptcy, not owed, or otherwise not collectable.

The Attorney General’s investigation and litigation further revealed that Chase sent letters to consumers that contained illegal threats and were signed by attorneys who did not review the accuracy of the information, determine if litigation was appropriate, or intend to follow through on some of the threats made, in violation of California’s Rosenthal Fair Debt Collection Practices Act.  Chase also filed false declarations regarding military service and improperly obtained default judgments against servicemembers on active duty, in violation of the Servicemembers Civil Relief Act and the California Military and Veterans Code.

The judgment requires Chase to document and confirm debts before filing credit card collections lawsuits or selling credit card debts to debt-collectors.  Chase is barred from robo-signing court and other documents, and also must prohibit debt buyers from reselling the credit card debts owed to Chase.  Chase is also barred from selling certain debts, and is required to permanently stop all attempts to collect, enforce in court, or sell more than 528,000 consumer accounts valued at hundreds of millions of dollars. 

This stipulated judgment resolves litigation filed by the Attorney General against Chase on May 9, 2013.  Chase separately agreed to pay additional penalties and other payments to the Office of the Comptroller of the Currency, the Consumer Financial Protection Bureau and other states in related actions.

Copies of the complaint and stipulated judgment are attached to the online version of this release at www.oag.ca.gov/news.

LOS ANGELES - Attorney General Kamala D. Harris today announced a settlement with Houzz Inc., an online platform for home remodeling and design, to resolve allegations that the company violated California privacy laws by recording incoming and outgoing telephone calls without notifying all parties on the call that they were being recorded.

From March 2013 to September 2013, Houzz’s Irvine office secretly recorded calls that were intended for training and quality-assurance purposes.  Although most of the secretly recorded calls were with home improvement and remodeling professionals, Houzz also recorded customer calls and employees’ personal calls.  Houzz did not notify all parties or obtain consent, in violation of state laws against wiretapping and eavesdropping.  The proposed settlement, filed in Santa Clara Superior Court today, resolves Attorney General Harris’s allegations.

“Houzz violated the trust of its professionals, customers, and employees by recording calls without permission,” said Attorney General Harris.  “This settlement holds Houzz accountable for violating state privacy laws and ensures that the company will stop recording calls without permission.”

After being notified by the California Attorney General’s Office in September 2013, Houzz stopped recording calls and voluntarily cooperated with the investigation. 

The settlement, which is in the form of a stipulated judgment, will require Houzz to appoint an individual to serve in a Chief Privacy Officer capacity who will oversee Houzz’s compliance with privacy laws and shall report any significant concerns to the Chief Executive Officer and/or other senior executives. This is a significant step that is aligned with Attorney General Harris’ ongoing efforts to preserve California businesses’ ability to innovate while ensuring that consumers’ right to privacy is protected.

Under the settlement, Houzz must also conduct a privacy risk assessment addressing its efforts to comply with applicable privacy laws governing its U.S. operations. The privacy risk assessment will evaluate issues that are implicated by Houzz’s business processes, use of technology, and processes related to any business partners with whom Houzz shares personal information, as well as Houzz’s efforts to mitigate or avoid any adverse effects on individuals in the United States. 

Houzz is also required to secure the recordings and destroy them and pay $175,000.

Copies of the complaint and stipulated judgment are attached to the online version of this release at www.oag.ca.gov.