Lawsuits & Settlements

SAN FRANCISCO – Attorney General Kamala D. Harris and Alameda County District Attorney Nancy E. O’Malley today announced a settlement with AT&T to resolve allegations that hundreds of AT&T’s California facilities unlawfully disposed of hazardous waste and material over a nine-year period. As part of the settlement, AT&T will pay $23.8 million. In addition, AT&T will spend an estimated $28 million over the next five years to implement the enhanced environmental compliance measures required by the settlement.  The settlement and proposed judgment, filed in Alameda County Superior Court, requires approval from the court before becoming final.

“This settlement holds AT&T accountable for unlawfully dumping electronic waste,” Attorney General Harris said.  “The illegal disposal of hazardous waste can lead to serious environmental and health risks for California communities. AT&T will be required to implement strict compliance measures at its facilities that set an example for other companies to safeguard our communities against hazardous waste.” 

This is the first enforcement action in California against a telecommunications company for its management of electronic waste. 

“Today’s settlement marks a great victory for 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. “Whether a small local business or a huge international company, my Office will pursue all necessary legal action against entities that pollute our environment.  This legal action should put others on notice that local and state agencies will continue to work together to investigate and prosecute violations against our environment.”

The civil enforcement action and proposed settlement against AT&T were filed today in Alameda County by Attorney General Harris and the District Attorney O’Malley, and is the product of a robust investigation by the two offices together with the Department of Toxic Substances Control.  The enforcement action claims that more than 235 AT&T warehouse and dispatch facilities throughout the state unlawfully handled and disposed of various hazardous wastes and materials over a nine-year period. Those hazardous wastes and materials primarily consisted of electronic equipment, batteries, aerosol cans, as well as certain gels, liquids and other items used by AT&T service technicians in delivering telephone, Internet and video services to residential and business customers in California.

In 2011, inspectors from the Alameda County District Attorney’s Office Environmental Protection Division and investigators from the California Department of Toxic Substances Control conducted a series of waste inspections of dumpsters belonging to AT&T warehouse and dispatch facilities. The inspections revealed that AT&T was routinely and systematically sending hazardous wastes to local landfills that were not permitted to receive those wastes.

Upon notice of the investigation, AT&T immediately agreed to cooperate and promptly implemented measures to halt the removal of regular trash until it could be inspected to remove any potentially hazardous wastes before they reached municipal landfills.   AT&T also has voluntarily dedicated additional resources toward environmental compliance and improving its hazardous and universal waste management compliance programs.  In addition to the $23.8 million settlement payment, AT&T expects to incur another $28 million over the next five years to implement enhanced environmental compliance measures required by the settlement.  For example, AT&T has implemented multiple layers of protection against electronic waste getting into its regular trash, including contractor inspections of “staging bins” before their contents are deposited in dumpsters, hundreds of unannounced dumpster inspections annually, and three independent audits over five years.

There are 13 AT&T facilities in Alameda County and all 13 facilities were found to be unlawfully disposing hazardous waste.

If approved by the court, under the final judgment, AT&T must pay $18.8 million in civil penalties and costs. An additional $3 million will fund supplemental environmental projects furthering consumer protection and environmental enforcement in California, and AT&T will pay a minimum of $2 million to enhance its environmental compliance. The telecom provider will be bound under the terms of a permanent injunction prohibiting similar future violations of law.

LOS ANGELES – Attorney General Kamala D. Harris today announced a $28.4 million settlement with Aaron’s, Inc., the second largest rent-to-own business in the nation, to resolve allegations that the company violated California consumer protection and privacy laws.

“Aaron’s concealed its illegal privacy and business practices from customers in a deceptive attempt to avoid California’s robust consumer protection laws and increase its profits,” Attorney General Harris said. “This settlement provides millions of dollars in restitution to consumers and requires Aaron’s to make significant changes to its business practices.”

The settlement requires Aaron’s to refund $25 million to California customers who signed lease agreements between April 1, 2010 and March 31, 2014 and to pay $3.4 million in civil penalties and fees.

Approximately 100,000 California customers will be eligible for restitution.

The complaint alleges that Aaron’s violated California’s Karnette Rental-Purchase Act, which is the strongest rent-to-own law in the country, by charging improper late fees, overcharging customers who paid off contracts early, and omitting important contract disclosures.

In addition, the complaint alleges that Aaron’s violated California state privacy laws by permitting its franchised stores to install spyware on laptop computers rented to its customers. A feature in the spyware program called ‘Detective Mode’, which was installed without consumers’ consent or knowledge, allowed the Aaron’s franchisees to remotely monitor keystrokes, capture screenshots, track the physical location of consumers and even activate the rented computer’s webcam. The installation of this software without customer consent violated California law.

Aaron’s, which is headquartered in Atlanta, GA, rents household merchandise, including furniture, appliances and electronics for a monthly or semi-monthly fee. The company operates approximately 75 stores across California (http://www.aarons.com/storelocator.aspx).

According to a Federal Trade Commission report on the rent-to-own industry, nearly all rent-to-own customers have a household income below $50,000 and the vast majority have attained a high school education or less.

Customers who are eligible for restitution will receive notice at their last known mailing address. Customers who believe they are eligible for restitution can also proactively submit a claim by visiting www.rent-to-own-settlement.com or calling 877-449-8548.

It is expected that restitution notices and payments will be mailed in early 2015 and individual restitution payments will vary based on each consumer’s contract.

As part of a stipulated judgment filed this week in Los Angeles County Superior Court, Aaron’s has agreed to full compliance with the Karnette Act in all respects and is prohibited from using or installing spyware on rented computers.

The Los Angeles County Department of Consumer Affairs provided assistance with the investigation.

Tips for consumers regarding rent-to-own businesses:

• Know your rights. Under California law, you have many important protections if you enter into a rent-to-own agreement.  For example, you may be entitled to a reduction in the amount of your lease payment if you suffer a hardship like losing your job. For more information: http://www.dca.ca.gov/publications/legal_guides/s-10.shtml.

• Read your contract carefully before signing. Make sure you understand your obligations under the agreement, including the length of time specified in the contract, and not just the cost of your monthly lease payment.

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, along with the Attorneys General of the other 49 States and the District of Columbia, the Federal Trade Commission, and the Federal Communications Commission, today announced a settlement with AT&T Mobility LLC to resolve allegations that AT&T Mobility placed charges for third-party services on consumers’ mobile telephone bills that had not been authorized by the consumer, a practice known as “mobile cramming.” The settlement covers “mobile cramming” charges made from January 1, 2009 through the date the FTC federal court order is entered. 

Under the settlement, AT&T will pay $927,536 to California. In addition, AT&T Mobility is required to provide $80 million in funds to be used to pay refunds to consumers who were victims of cramming.  The fund will be administered by the Federal Trade Commission. 

"Consumers deserve transparency in their billing and a clear description of the services being provided," Attorney General Harris said. "This settlement holds AT&T accountable for its misleading practices and refunds consumers for unfair billing."

Beginning today and continuing until May 1, 2015, consumers can submit claims under the AT&T Mobility cramming refund program by visiting www.ftc.gov/att. On the website, consumers can find information about how to obtain a refund.   If consumers are unsure about whether they are eligible for a refund or to request previous billing records, they can visit the claims website or contact the Claims Administrator at 1-877-819-9692 for more information.

Consumers who have been “crammed” often complain about charges, typically $9.99 per month, for “premium” text message subscription services (also known as “PSMS” subscriptions) such as horoscopes, trivia, and sports scores, that the consumers have never heard of or requested.  The Attorneys General and federal regulators allege that cramming occurred when AT&T Mobility placed charges on consumers’ mobile telephone bills for these services without the consumer’s knowledge or consent. A sample bill attached to the release demonstrates where a consumer can find cramming charges.

AT&T Mobility is the first mobile telephone provider to enter into a national settlement to resolve allegations regarding cramming; AT&T Mobility was among the four major mobile carriers—in addition to Verizon, Sprint and T-Mobile—that announced it would cease billing their customers for commercial PSMS charges last fall.

The settlement also requires AT&T Mobility to stay out of the commercial PSMS business—the platform to which law enforcement agencies attribute the lion’s share of the mobile cramming problem to date.  Additional terms require AT&T Mobility to take a number of steps designed to ensure that it only bills consumers for third-party charges that have been authorized, regardless of the platform in the future, including the following:

• AT&T Mobility must obtain consumers’ express consent before billing consumers for third-party charges, and must ensure that consumers are only charged for services if the consumer has been informed of all material terms and conditions of their payment;
• AT&T Mobility must provide a full refund or credit to consumers who are billed for unauthorized third-party charges at any time after this settlement;
• AT&T Mobility must inform its customers when the consumers sign up for services that their mobile phone can be used to pay for third-party charges, and must inform consumers of how those third-party charges can be blocked if the consumer doesn’t want to use their phone as a payment method for third-party products; and
• AT&T Mobility must present third-party charges in a dedicated section of consumers’ mobile phone bills, must clearly distinguish them from AT&T Mobility’s charges, and must include in that same section information about the consumers’ ability to block third-party charges.

AT&T Mobility also agreed to pay $20 million to the Attorneys General overall, and $5 million to the Federal Communications Commission.  

San Francisco – Attorney General Kamala D. Harris, along with the U.S. Department of Justice and state partners, today announced a settlement with Bank of America to resolve federal and state civil claims related to Bank of America’s conduct in the packaging, securitization, marketing, sale, and issuance of residential mortgage-backed securities prior to January 1, 2009.

Nationally, the settlement totals $16.65 billion including cash and credit for consumer relief. California will recover $300 million in damages, which will reimburse the state’s pension funds, CalPERS and CalSTRS, for losses on investments in mortgage-backed securities of Bank of America and its affiliates. California is also guaranteed at least $500 million in consumer relief credits.

“Bank of America profited by misleading investors about the risky nature of the mortgage-backed securities it sold,” Attorney General Harris said. “This settlement makes our pension funds whole for the financial losses caused by these misrepresentations and brings help to hard-pressed homeowners and communities in California.”

Nationwide, the bank will pay a total of $9.65 billion in cash, and provide $7 billion in consumer relief credits.  The consumer relief includes loan forgiveness to lessen the burden on underwater homeowners and distressed borrowers, help to affected communities through donation of properties, financing of affordable rental housing, and support for housing counseling and legal aid.  The consumer relief to California includes at least $380 million of credit in first lien principal forgiveness.

As part of the settlement, Bank of America acknowledged it made serious misrepresentations to investors about the mortgage loans it securitized in residential mortgage-backed securities. The settlement does not absolve Bank of America or its employees from facing any possible criminal charges.

An investigation conducted by Attorney General Harris showed that the offering documents for the securities failed to accurately disclose the true characteristics of many of the underlying mortgages, and that due diligence to weed out poor quality loans had not been adequately performed.

The settlement with Bank of America arises from the investigation into mortgage-backed securities by Attorney General Harris’ Mortgage Fraud Strike Force, which was formed in May 2011 to comprehensively investigate misconduct in the mortgage industry. The Attorney General's additional efforts to investigate the mortgage crisis include securing an estimated $20 billion for California in the National Mortgage Settlement and sponsoring the California Homeowner Bill of Rights, a package of laws instituting permanent mortgage-related reforms.

In July 2014, Attorney General Harris announced a settlement with Citigroup Inc. of nearly $200 million over its misrepresentations in residential mortgage-backed securities sold to CalPERS and CalSTRS. In November of last year, a settlement with J.P. Morgan Chase & Co. recovered  $300 million for CalPERS and CalSTRS.

Bank of America customers can call 877.488.7814 for more information.

For more information on the U.S. DOJ settlement visit: http://www.justice.gov/

SAN FRANCISCO -- Attorney General Kamala D. Harris will convene state and federal officials from the U.S., Mexico and El Salvador for a multinational summit focused on the use of technology to fight transnational organized crime. The summit, held in association with the annual meeting of the U.S. Conference of Western Attorneys General (CWAG), will focus on human trafficking, intellectual property violations and money laundering. 

“Transnational criminal organizations are increasingly using sophisticated networks and technology to commit crimes against the people of California, the United States, and globally,” Attorney General Harris said. “This summit will build on the partnership we forged in Mexico City this March to combat the increased use of social media in human trafficking and disrupt money laundering schemes in the U.S.-Mexico border region. I want to thank my colleagues and international partners for joining me to address this serious issue.”

Attendees at the summit, the 2014 CWAG Alliance Partnership Binational State Attorney General Exchange, include U.S. state attorneys general, U.S. federal officials, Mexico Attorney General Jesús Murillo Karam, El Salvador Attorney General Luis Martinez, and Mexico state attorneys general. 

The summit follows a U.S. delegation visit led by Attorney General Harris to Mexico City in March to strengthened relationships between government officials in both countries and enhanced efforts to combat transnational crime. During the visit, the bipartisan delegation met with Mexico Attorney General Murillo Karam to discuss shared priorities in the fight against transnational crime.

The delegation, which included the state attorneys general from Colorado, Florida, Nevada, and New Mexico, also with Mexican state attorneys general from Sonora, Baja California, Chihuahua, Campeche, Distrito Federal, Zacatecas and Jalisco. The delegation also signed a letter of intent with the National Banking and Securities Commission of Mexico to establish a binational working group on money laundering enforcement. (https://oag.ca.gov/news/press-releases/attorney-general-kamala-d-harris-us-state-attorneys-general-sign-anti-money)

Prior to leading the delegation, Attorney General Harris issued the first comprehensive report in California analyzing the current state of transnational criminal organizations highlighting the increasing use of technology to facilitate criminal activity, recruitment, intimidation and harassment. The report called for increased international partnerships to leverage technology against transnational crime. (https://oag.ca.gov/news/press-releases/attorney-general-kamala-d-harris-issues-comprehensive-report-transnational)

WHEN: Sunday, July 20, 2014 

WHERE: CWAG annual meeting - Park City, Utah 

WHO:

Mexico Attorney General Jesus Murillo Karam 

El Salvador Attorney General Luis Martinez

U.S. State Attorneys General from Colorado, Florida, Idaho, Nebraska, New Mexico, Nevada, Oregon, South Dakota, Utah, Vermont, and Washington.

Mexican State Attorneys General from Aguascalientes, Baja California, Baja California Sir, Coahuila, Colima, Mexico, Guanajuato, Jalisco, Michoacan, Morelos, Nayarit, Oazaca, San Luis Potosi, Sinaloa, Sonora, Tamaulipas, Veracruz and Zacatecas.

NOTE: Media interested in covering the summit should contact Nick Pacilio at 415-703-5837.

LOS ANGELES – Attorney General Kamala D. Harris, along with the U.S. Department of Justice and state partners, today announced a settlement with Citigroup Inc. to resolve federal and state civil claims related to Citigroup’s conduct in the packaging, securitization, marketing, sale, and issuance of residential mortgage-backed securities prior to January 1, 2009.

Nationally, the settlement totals $7 billion. California will recover $102,700,000 in damages, which will reimburse the state’s pension funds, CalPERS and CalSTRS, for losses on investments in mortgage-backed securities of Citigroup and its affiliates. California is also guaranteed at least $90 million in consumer relief.

“Citigroup misled consumers and profited by providing California’s pension funds with incomplete information about mortgage investments,” Attorney General Harris said. “This settlement holds Citi accountable and compensates the state’s pension funds that protect the retirement savings of hardworking Californians.”

As part of the settlement, Citigroup acknowledged it made serious misrepresentations to the public, including investors, about the mortgage loans it securitized in residential mortgage-backed securities. The resolution also requires Citigroup to provide relief to underwater homeowners, distressed borrowers, and affected communities through a variety of means including financing affordable rental housing developments for low-income families in high-cost areas. The settlement does not absolve Citigroup or its employees from facing any possible criminal charges.

An investigation conducted by Attorney General Harris showed that offering documents for the securities failed to accurately disclose the true characteristics of many of the underlying mortgages, and that due diligence to weed out poor quality loans had not been adequately performed.

As part of the settlement, Citigroup will provide $2.5 billion in relief to aid consumers across the country, including Californians, in the form of principal forgiveness, loan modifications, donations to housing and legal assistance nonprofits and efforts to reduce blight. $4.5 billion will be paid to settle federal and state civil claims.

The settlement related to California’s pension funds arises from the investigation into mortgage-backed securities by Attorney General Harris's Mortgage Fraud Strike Force, which was formed in May 2011 to comprehensively investigate misconduct in the mortgage industry. The Attorney General's additional efforts to investigate the mortgage crisis include securing an estimated $20 billion for California in the National Mortgage Settlement and sponsoring the California Homeowner Bill of Rights, a package of laws instituting permanent mortgage-related reforms.

In November of last year, Attorney General Harris announced a $300 million settlement with J.P. Morgan Chase & Co. over its misrepresentations in residential mortgage-backed securities sold to CalPERS and CalSTRS.

For more information on the U.S. DOJ settlement visit: http://www.justice.gov/

SAN FRANCISCO – Attorney General Kamala D. Harris took steps to file additional charges against Corinthian Colleges, Inc. (CCI) alleging that the company is currently violating California false advertising and unfair competition laws and is requesting that a court immediately force CCI to tell prospective students the truth about the company’s dire financial situation and its agreement with the federal government to sell or close all of its schools.

“It is unacceptable yet not surprising that Corinthian Colleges continues to illegally target vulnerable Californians—including low income individuals, single mothers and veterans returning from combat—by lying about its dire finances and failing to tell prospective students that the schools to which they apply will all be sold or closed,” Attorney General Harris said. “My office is seeking expedited action to force Corinthian Colleges to put the interests of its students above its rapidly shrinking profits.”

Attorney General Harris filed a motion Wednesday asking San Francisco Superior Court for permission to move on an expedited basis to file a supplemental complaint enhancing the original complaint Harris filed against CCI in October 2013, which accused the company of false and predatory advertising, intentional misrepresentations to students, securities fraud, and unlawful use of military seals in advertisements. Wednesday’s motion also indicates Attorney General Harris’ intention to subsequently move for a temporary restraining order and/or preliminary injunction against CCI to force the company to immediately cease its misleading advertisements and inform prospective students about its dire finances.

In a filing with the U.S. Securities and Exchange Commission on June 19th, CCI informed investors of its serious financial troubles and plans to close or sell its campuses. This week, CCI signed an agreement with the U.S. Department of Education wherein CCI agreed to close or sell its campuses to third-parties in the near future.

Despite these recent events, according to the proposed supplemental complaint, CCI has failed to inform prospective students about its dire financial condition or its plan to close or sell its schools and is, in fact, actively soliciting prospective students and enrolling new students without disclosing its current financial condition or the future of its schools.

According to the filing, CCI websites and advertisements currently contain misleading statements including:

• “since we've been around for over 150 years, you can count on us to be here when you need it most.”
• “Heald is also a stable and permanent fixture in education communities”
• “at Heald, we're committed to providing career services assistance to our graduates, for life.”

Attorney General Harris’ original complaint alleges 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 alleges that Corinthian executives knowingly misrepresented job placement rates to investors and accrediting agencies, which harmed students, investors and taxpayers.

According to Harris’ original complaint, CCI’s predatory marketing efforts specifically target vulnerable, low-income job seekers and single parents who have annual incomes near the federal poverty line. In internal company documents obtained by the Department of Justice, CCI describes its target demographic as “isolated,” “impatient,” individuals with “low self-esteem,” who have “few people in their lives who care about them” and who are “stuck” and “unable to see and plan well for future.”

According to the complaint, CCI advertised job placement rates as high as 100% for specific programs when, in some cases, there is no evidence that a single student obtained a job during the specified time frame. The complaint further alleges that CCI runs millions of online and mobile ads offering ultrasound, x-ray, radiology, and dialysis technician programs at their California campuses—when, in fact, CCI does not offer those programs. CCI’s call center agents are disciplined if they tell callers that CCI does not offer these programs. Additionally, according to the complaint, CCI includes official Army, Navy, Air Force, Marine Corps, and Coast Guard seals in mailings and on web sites without authorization and in violation of California law.

The complaint alleges that CCI committed securities fraud by reporting a nationwide job placement rate of 68.1% in presentations to investors, when senior executives knew this percentage was false. The complaint describes internal audits emailed to CCI executives that show job placement data error rates between 53% and 70%. The complaint references an email from a CCI executive which explains that in 2011, two Everest College campuses (Hayward and San Francisco) paid a temporary employment agency “to place students to meet the accreditation deadline and minimum placement %.” The complaint also states that CCI double-counted job placements and failed to maintain required records of reported job placements.

According to a recent CCI securities filing, the average tuition for a CCI associate’s degree is $40,000 and the average tuition for an online CCI associate’s degree is $34,000.  The average tuition for CCI’s non-degree healthcare programs is $17,000.

CCI is based in Santa Ana and currently operates 24 Everest, Heald and WyoTech campuses in California, 111 total campuses in North America and three online programs. Out of the 72,000 students who attend CCI colleges, approximately one-third are in California.

Federal funds account for almost all of CCI’s annual revenue.

SAN FRANCISCO – Attorney General Kamala D. Harris today announced a $550 million joint state-federal settlement with mortgage lender and servicer SunTrust Mortgage Inc. to address mortgage origination, servicing, and foreclosure abuses.

The three-year settlement provides direct payments to California borrowers for past foreclosure abuses, loan modifications and other relief for borrowers in need of assistance, and tough new mortgage servicing standards, and grants oversight authority to an independent monitor.

“We are recovering from the foreclosure crisis in California, but for too many families the legacy created by this crisis has been an enduring struggle to stay in their homes,” Attorney General Harris said.  “This settlement will help California’s homeowners with Sun Trust mortgages get loan modifications and work to regain their financial footing.”

The settlement includes California and 48 other states, the District of Columbia, the U.S. Department of Justice (DOJ), the U.S. Department of Housing and Urban Development (HUD), and the Consumer Financial Protection Bureau (CFPB).

Today’s agreement requires SunTrust to provide all borrowers nationwide with $500 million worth of loan modifications and other relief. SunTrust may fulfill its obligations in many ways, including principal reductions and refinancing for underwater mortgages. Because SunTrust 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.

More information about the loan modification process will be released at a later date, though current borrowers with loans serviced by SunTrust can contact the company directly with questions at 1-800-634-7928.

Approximately 4,733 Eligible California borrowers whose loans were serviced by SunTrust and who lost their home to foreclosure from January 1, 2008 through December 31, 2013 and encountered servicing abuse will be eligible for a payment from the national $40 million fund for payments to borrowers. The borrower payment amount will depend on how many borrowers file claims.

Eligible borrowers will be contacted by the settlement administrator about how to qualify for payments.

The settlement requires SunTrust 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 creates dozens of new consumer protections and standards, including:

• Making foreclosure a last resort by first requiring SunTrust to evaluate homeowners for other loss mitigation options;
• Restricting foreclosure while the homeowner is being considered for a loan modification;
• New procedures and timelines for reviewing loan modification applications;
• Giving homeowners the right to appeal denials;
• Requiring a single point of contact for borrowers seeking information about their loans and maintaining adequate staff to handle calls.

The agreement resolves potential violations of civil law based on SunTrust’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 SunTrust, 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.

SunTrust, headquartered in Richmond, Virginia, is a wholly-owned subsidiary of SunTrust Banks Inc., a bank and financial services company headquartered in Atlanta, Georgia.

The agreement’s mortgage servicing terms largely mirrors the 2012 National Mortgage Settlement (NMS) reached in February 2012 between the federal government, 49 state attorneys general, including California, and the five largest national mortgage servicers. That agreement has provided consumers in California with over $20 billion in relief, created tough new servicing standards, and implemented independent oversight.

Following the settlement, Attorney General Harris sponsored the California Homeowner Bill of Rights, a landmark package of legislation that restricts dual-track foreclosures, guarantees struggling homeowners a reliable point of contact at their lender and imposes civil penalties on fraudulently signed mortgage documents. In addition, homeowners may require loan servicers to document their right to foreclose. This legislation was signed by Governor Brown in July 2012 and took effect on January 1, 2013.

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SAN FRANCISCO – Attorney General Kamala D. Harris today announced a $105 million multistate settlement with GlaxoSmithKline, LLC (GSK) to resolve allegations that the company unlawfully promoted its asthma drug, Advair, and antidepressant drugs, Paxil and Wellbutrin. California’s portion of the settlement is the largest of any state, at $7,087,897.

For the first time in a settlement with a large pharmaceutical manufacturer, GSK is prohibited from providing incentive payments to its salespeople, which serve to encourage off-label promotion of drugs, and from using paid doctors to promote its products.

“Patient care is undermined when pharmaceutical companies promote uses for drugs that have not been approved by the FDA or pay medical professionals to promote certain drugs,” Attorney General Harris said. “This settlement requires GSK to pay a significant penalty and imposes strong new rules designed to prevent future misrepresentations of GSK products.”

The Complaint and Stipulated Judgment, submitted today to the San Diego County Superior Court, alleges that GSK violated state consumer protection laws by misrepresenting the uses and qualities of certain drugs. Specifically, GSK shall not:

• Make, or cause to be made, any written or oral claim that is false, misleading, or deceptive about any GSK product;
• Make promotional claims, not approved or permitted by the FDA that a GSK product is better, more effective, safer, or has less serious side effects or contraindications than has been demonstrated by substantial evidence or substantial clinical experience;
• Present favorable information or conclusions from a study that is inadequate in design, scope, or conduct to furnish significant support for such information or conclusions, when presenting information about a clinical study regarding GSK products in any promotional materials;
• Provide samples of GSK products to those health care professionals who are not expected to prescribe the sampled GSK products for an approved use, but who would be expected to prescribe the sampled product for an off-label use; or
• Disseminate information describing any off-label use of a GSK product, unless such information and materials are consistent with applicable FDA regulations and FDA Guidances for Industry. 

The Stipulated Judgment also requires GSK to continue its Patient First Program at least through March 2019.  The Patient First Program reduces financial incentives for sales representatives to engage in deceptive marketing. In addition, the Judgment requires scientifically trained personnel to be ultimately responsible for developing and approving responses to health care provider questions and for these responses to be unbiased and non-promotional.

Forty-three additional states and the District of Columbia participating in the settlement include: Alabama, Arkansas, Colorado, Connecticut, Delaware, the District of Columbia, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Montana, Nebraska, Nevada, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, Wisconsin, and Wyoming.

Copies of the documents filed with the court are attached to the electronic version of this release at: http://oag.ca.gov/news

SAN FRANCISCO -- Attorney General Kamala D. Harris today announced a nearly $4 million settlement with eBay over allegations the company violated state anticompetitive laws by making a “no-poach” agreement with Intuit between 2006 and 2009.

“California’s technology sector is at its best when competition and creativity are allowed to thrive,” Attorney General Harris said. “No-poach agreements unfairly punish talented workers and stunt our state’s economic growth. This settlement compensates employees, demands improved future hiring practices, and refunds the state for economic harm.”

In November 2012, Attorney General Harris filed suit against eBay and named Intuit as a co-conspirator, alleging that from 2006 to 2009 senior executives at both companies entered into a “no-poach” agreement restricting each company’s ability to recruit employees from the other company; in addition eBay agreed not to hire Intuit employees. As a result, employees of both companies were prevented from securing potentially better-paying positions and both companies lost the ability to hire qualified employees.

Attorney General Harris' complaint alleged that the agreement violated California’s Unfair Competition Law, the federal Sherman Anti-Trust Act and the state Cartwright Act.

Today’s settlement, filed in United States District Court for the Northern District of California in San Jose, includes restitution payments and civil penalties totaling $3.75 million and commitments from eBay regarding the company’s future hiring practices.

eBay will pay $3.5 million into a settlement fund, which will include a $300,000 to the state for the harm the anticompetitive conduct caused to the state’s economy, which is the first time a state antitrust settlement has explicitly recovered additional funds for general harm to the economy. 

A portion of the settlement fund will be used to pay restitution to individuals employed in California by eBay or Intuit since 2005. Restitution payments will be made to three distinct pools of current and former employees. The first pool of approximately forty individuals who were employed by Intuit and considered for but not offered a position at eBay, will receive between $5,000 and $10,000 each. The second pool of approximately 950 individuals who were employed by Intuit and applied for but were not offered a position at eBay, will receive between $1,000 and $1,500 each. The third pool includes current and former employees who fall within the terms of the settlement but are not included in the first or second pool. While these individuals did not apply for jobs at the other company, they may have been indirectly affected by the anticompetitive conduct and will receive a maximum payment of $150.

In addition, eBay will pay $250,000 in civil penalties.

eBay has also agreed to not participate in a similar “no-poach” agreement in the future and for the next five years, the company must provide the California Attorney General’s office with an annual report describing any violation or potential violation of this settlement.

eBay must also provide annual information for the next five years about the meaning and requirements of this settlement to officers, directors, human resources managers and senior managers who supervise employee recruiting, solicitation, or hiring efforts.

Within ninety days following the court’s preliminary approval of the settlement, current and former employees who are potential members of the three pools will receive an email and a letter providing information on how to submit a claim for restitution.

In July of 2013, Attorney General Harris reached a settlement with Intuit over its alleged conduct.
The U.S. Department of Justice today also reached a settlement with eBay over these allegations.

A copy of documents related to this settlement can be found attached to the electronic version of this release at: oag.ca.gov/news.