Lawsuits & Settlements

OAKLAND — California Attorney General Rob Bonta today announced a settlement with the University of Phoenix, and its parent company Apollo Education Group, Inc (Apollo), resolving an investigation into the University of Phoenix’s use of aggressive and unlawful military student recruitment tactics from 2012 through 2015. These recruitment tactics violated California’s Unfair Competition Law (UCL) and False Advertising Law (FAL). Under the settlement, the University of Phoenix must pay $4.5 million in penalties and other monetary relief and comply with strong injunctive terms.

“The University of Phoenix used deceptive and unlawful tactics to convince service members to use their hard-earned education benefits at its own institution, in place of any number of less expensive, high-quality schools, including California’s public colleges and universities. Part of the settlement today will be distributed to military relief organizations that provide interest-free emergency loans, financial counseling, and other critical services and supports to military members and their families,” said Attorney General Bonta. “Today’s settlement sends a strong message that schools who use predatory practices to recruit servicemembers and veterans will be held to account. California takes consumer protection seriously; we will vigorously protect those who have sacrificed so much to protect us.”

Over the past decade, for-profit schools have drawn scrutiny for using abusive tactics to recruit servicemembers and veterans. Their interest in this student population was, in part, an unintended consequence of certain provisions in the Higher Education Act of 1965, which required schools to receive at least 10% of their revenue from sources other than federal student aid. Because service-related education benefits, including Department of Defense tuition assistance and Post-9/11 GI Bill funds, counted toward the 10% revenue requirement, military students were highly sought after by for-profit institutions. For each servicemember or veteran a for-profit school enrolled, it could enroll up to nine more students whose tuition would be paid with federal student aid. In 2021, Congress and the Biden administration amended the Higher Education Act to close the “90/10” loophole.

In a complaint filed with the proposed stipulated judgment, Attorney General Bonta alleges that the University of Phoenix violated California consumer protection laws as well as directives issued by the Department of Defense to reign in aggressive and deceptive recruiting of servicemembers. Among other things, these directives require schools to obtain the permission of specified military officers before accessing a military installation, and limit how and where schools can market their programs to servicemembers. To increase their access to military bases and prospective students, University of Phoenix representatives routinely sidestepped these requirements. In addition, the complaint further alleges that University of Phoenix representatives lied in order to get access to career fairs — intended to help veterans and departing servicemembers find employment — for the purpose of soliciting prospective students, that they engaged in improper solicitation at “yellow ribbon” events designed to provide critical post-deployment resources and support to returning military personnel and their families, and that the University of Phoenix unlawfully displayed official military seals on specially made “challenge coins” that it used to promote its programs within the military community. 

In addition to paying $4.5 million in penalties and other monetary relief, including funds that will support the work of the military service relief organizations — the Navy-Marine Corps Relief Society, Army Emergency Relief, the Air Force Aid Society, and Coast Guard Mutual Assistance — to support the military community, Apollo and the University of Phoenix must comply with strong injunctive terms that aim to substantially address and curb its improper military-recruitment tactics.

Under the injunctive terms, the University of Phoenix is prohibited from:

• Violating the UCL or FAL in any entry upon or activities at military installations, or in the solicitation of service members, veterans, or their family members.
• Soliciting on-base, at career and hiring fairs, at Yellow Ribbon or other pre- or post-deployment events, at Morale, Welfare, and Recreation (MWR) events, and during on-base educational office hours.
• Attending mandatory events for service members, including training sessions and orientations.
• Attending career and hiring fairs, unless the University of Phoenix representative attending such events has duties primarily relating to the hiring of employees and is attending solely for the purpose of hiring employees.
• Unauthorized base access and the unauthorized use of military credentials to access bases.
• Unauthorized use of military seals. 

Attorney General Bonta is committed to protecting California students and military personnel.

In February, Attorney General Bonta and Senator Caroline Menjivar (D-San Fernando Valley) introduced SB 1124, essential legislation seeking to protect veterans from unaccredited claims representatives. California veterans who need assistance with filing an initial claim for benefits can receive assistance at no charge from their county veteran service office or from another U.S. Department of Veterans Affairs (VA) accredited representative. 

Also in February, Attorney General Bonta celebrated the decision by the California Court of Appeal affirming a lower court’s decision which found in the state’s favor in its lawsuit against Ashford University, an online, for-profit college, and its parent company Zovio, Inc. for violating California’s unfair competition and false advertising laws by giving students, including military veterans, false or misleading information about career outcomes, cost and financial aid, pace of degree programs, and transfer credits, in order to persuade them to enroll at Ashford. 

In September 2023, Attorney General Bonta announced the sentencing of Don Azul for defrauding the relatives of veterans as part of a fraudulent veterans educational benefits scheme. In August 2023, Attorney General Bonta joined a bipartisan collation of 44 attorneys general in a letter to Congress expressing his support for federal legislation to protect veterans from financial exploitation. In September 2022, SB 1311, a bill Attorney General Bonta sponsored to protect the rights of California service members and veterans, was signed into law. 

A copy of the complaint and stipulated judgment, which remains subject to court approval, can be found here and here.

LOS ANGELES – California Attorney General Rob Bonta and California Secretary of State Shirley N. Weber, Ph.D. today filed a lawsuit against the city of Huntington Beach challenging its voter identification (voter ID) law, Measure A, which amended the city’s charter to purportedly allow the city to impose voter ID requirements at the polls for all municipal elections starting in 2026. In the lawsuit, Attorney General Bonta and Secretary of State Weber allege that this voter ID law unlawfully conflicts with and is preempted by state law.

“The right to freely cast your vote is the foundation of our democracy and Huntington Beach’s voter ID policy flies in the face of this principle,” said Attorney General Rob Bonta. “State election law already contains robust voter ID requirements with strong protections to prevent voter fraud, while ensuring that every eligible voter can cast their ballot without hardship. Imposing unnecessary obstacles to voter participation disproportionately burdens low-income voters, voters of color, young or elderly voters, and people with disabilities. We’re asking the court to block Huntington Beach’s unlawful step toward suppressing or disenfranchising voters. The California Department of Justice stands ready to defend the voting rights that make our democracy strong.”

"This voter ID measure conflicts with state law," said California Secretary of State Shirley Weber, Ph.D. "Not only is it a solution in search of a problem, laws like these are harmful to California voters, especially low-income, the elderly, people of color, those with disabilities, and young voters.”

Today’s lawsuit comes after Huntington Beach advanced the voter ID law despite a warning from the Attorney General and Secretary of State that the measure violates state election law. On September 28, 2023, Attorney General Bonta and Secretary of State Weber sent a letter urging the city to drop the proposal and expressing grave concerns that it would only serve to suppress voter participation without providing any discernible local benefit. The city nevertheless placed the proposal on the ballot, and it passed on March 5, 2024. The Orange County Registrar of Voters certified the election results on March 22, 2024. 

In the lawsuit, the Attorney General and Secretary of State allege that Measure A is preempted by state law and invalid. Under the California Constitution, charter cities have the right to govern “municipal affairs,” but local law cannot conflict with state law governing a “statewide concern.” Both the integrity of California’s elections and the protection of the constitutional right to vote are matters of statewide concern.

The lawsuit further argues that California already maintains a uniform and robust legal scheme for safeguarding the integrity of the electoral process and protecting the rights of eligible voters. Under state law, people registering to vote must provide identifying information under penalty of perjury. Voter identity is established before registered voters get to the polls; at the polls, registered voters are only required to provide their name and address – no further identification is required. While a person’s eligibility to vote can be challenged, a challenge can only be brought by certain election workers and only on narrow, well-supported grounds. These requirements are uniform statewide, reducing potential voter confusion. 

Unlawfully departing from this legal framework, Huntington Beach’s voter ID law purportedly allows the city to require additional identification from voters before they can exercise their right to vote. By authorizing this requirement, Huntington Beach’s voter ID law conflicts with state law and threatens to unlawfully disenfranchise voters at the polls.

A copy of the complaint is available here.

OAKLAND — California Attorney General Rob Bonta today announced that the California Department of Justice (DOJ) has ended monitoring of the Stockton Unified School District (District) and its Department of Public Safety (Department), concluding the five-year term of the stipulated judgment that addressed system-wide violations of the civil and constitutional rights of Black and Latino students and students with disabilities. The District has also committed to implementing a plan to further reduce disproportionalities in law enforcement referrals through school year 2026-2027, which will institutionalize the revised policies and practices and continue the progress made under the judgment.

“Over the past five years, the California Department of Justice and the Stockton Unified School District worked together to successfully implement the corrective actions set out in the stipulated judgment to protect the rights of students in schools,” said Attorney General Rob Bonta. “Today we can celebrate that the agreement has helped the District take important steps to address concerns regarding interactions between police officers and students and to promote an equitable and positive learning environment. My office is committed to ensuring that the District’s plan to reduce disproportionalities is fully implemented and all students have an equal opportunity to achieve their fullest potential in schools.”

“This achievement is a testament to the hard work and dedication of our educators, staff, students, and Department of Public Safety, said Dr. Michelle Rodriguez, Superintendent of Stockton Unified School District. “We reaffirm our commitment to continue the important changes and policies and remain steadfast in our mission to improve services and support for all students, ensuring that each child has the opportunity to succeed academically, socially, and emotionally. We will continue to collaborate with stakeholders, implement evidence-based practices, and prioritize equity in everything we do.”

“The Department is proud of the work that was completed surrounding the DOJ Agreement which has not only made us a better Department but has placed us at the forefront of progressive policing,” said Chief Mayra Franco. “We will continue with our commitment to the work that has been completed and ensure that we provide our staff and students with a safe learning environment ensuring fair and equal justice.”  

“The consent decree was phase one. Now we must build on this momentum to cement the progress that has been made, and fix policies and practices that continue to hurt SUSD students and families,” said Jasmine Dellafosse, Director of Organizing and Community Engagement at End Poverty in CA. “The District should take the last few years as a lesson that accountability and transparency are non-negotiable when it come to our students’ well-being.”

“The Stockton Unified School District was placed under a consent decree because its school police were out of control, arresting and traumatizing kids for acting like kids. Students of color, especially Black students, and students with disabilities were hurt the most,” said Linnea Nelson, Senior Staff Attorney at the ACLU of Northern California. “Even though the consent decree is over, those disparities still exist, and we will continue to monitor the District's progress to prevent resurgent discrimination.”

“The requisite collaboration that took place with community members and the Stockton Unified School District was an admirable beginning,” said Pastor Trena Turner, Victory In Praise Church. “Continued efforts of transparency and inclusion that outlasts the monitoring period, will be of paramount importance to further strengthen the district and ultimately improve the lived experience of our students.”

In 2019, a DOJ investigation concluded that the District’s policies and practices with respect to law enforcement referrals discriminated against Black and Latino students and students with disabilities. The investigation also found unconstitutional search and seizure practices. DOJ and the District entered into a stipulated judgment that required significant reforms and a five-year monitoring period. As part of the stipulated judgment, which concluded on February 19, 2024, the District: 

• Established clear policies and procedures limiting when school administrators refer students to law enforcement.
• Created a formal diversion program in lieu of citations and arrests to address minor school-based offenses.
• Revised policies and procedures relating to treatment of students with disabilities in order to prevent discrimination, including the hiring of a trained Disability Coordinator.
• Created clear processes for school site administrators to refer students with mental health needs to support services rather than a referral to law enforcement.
• Instituted mandatory annual training of all officers and staff regarding civil and constitutional rights, disability and special education laws, and elimination of bias.
• Reformed use of force policies, procedures, and practices, including implementing a comprehensive review process.
• Updated search and seizure policies.
• Used data to track and analyze all arrests and referrals to law enforcement from schools; and
• Established the Community Advisory Group, which collaborated with the District to provide input and review updated policies.

Overall, the judgment led to markedly improved outcomes for students. Total arrests of students dropped significantly; in school year 2018-2019, there were 155 arrests, compared to nine arrests during school year 2022-2023. Calls for service to the Department decreased by 54% and unwarranted calls for service decreased by 52%. Under the disproportionality plan, the Community Advisory Group and Transformative Justice subcommittee, consisting of community organizations and other stakeholders, will continue to meet regularly to improve and reduce disparities in law enforcement referrals and receive and analyze disaggregated and anonymized District data on use of force, law enforcement contacts, citations, arrests, and calls for assistance.  

A copy of the stipulated judgment is available here. A copy of the complaint is available here.

LOS ANGELES — California Attorney General Rob Bonta today, alongside the U.S. Department of Justice (U.S. DOJ), and a bipartisan coalition of 16 states attorneys general, filed a lawsuit challenging Apple’s anticompetitive behavior related to iPhone smartphones. The lawsuit alleges Apple deliberately made it more difficult for third-party apps and products to operate with the iPhone, resulting in higher prices for consumers and harm to competition in the smartphone industry. Apple’s conduct has stifled innovation, limited consumer choice, and made switching to other smartphones — especially high-end performance smartphones — unnecessarily difficult and expensive for consumers.

“Apple’s anticompetitive conduct intentionally leaves consumers bearing the cost of sky-high smartphone prices at a time when smartphones are now essential to so much of our day-to-day lives. California’s economy thrives on entrepreneurship, serving as a driving force behind its innovation and growth. Consumers, innovation, and the competitive process — not Apple alone — should decide what options consumers should have,” said Attorney General Bonta. “In insulating itself from competition, Apple has caused harm to consumers and the market. This is illegal. I am proud to partner with the U.S. Department of Justice to send a clear message: We are committed to protecting consumers, holding industry accountable, and ensuring a fair and competitive market where the next generation of innovation can thrive.”

The lawsuit alleges Apple violated Section 2 of the Sherman Antitrust Act, which prohibits monopolization and attempted monopolization. Monopolization occurs when a single firm maintains a monopoly unlawfully, by using its control of the market to exclude rivals and harm competition. The complaint filed today alleges that Apple protects its monopoly by delaying, degrading, or outright blocking technologies that would bring competition by decreasing barriers to switching to another smartphone. 

Specifically, Apple:

• Degrades and undermines cross-platform messaging apps and rival smartphones, including introducing deliberate incompatibilities to prevent Android users from seamlessly sending messages to iPhone users.

• Makes it difficult for U.S. app developers to list “Super Apps”, which have a broad array of functions and make it easier for consumers to switch from one phone manufacturer to another 

• Blocks cloud gaming services on iPhones by historically refusing to list cloud gaming apps on the Apple App Store. Cloud gaming allows consumers to stream and play video games seamlessly across different devices independent of phone hardware.  

• Limits basic functionality when consumers try to use third party cross-platform smart watches with iPhones.

• Restricts digital wallet competitors by allowing only Apple Wallet access to the iPhone’s “tap-to-pay” functionality.

Apple suppresses or delays apps, innovations, and technologies that would reduce switching costs or simply allow users to discover, purchase, and use their own accessories, apps and content without having to rely on Apple. As a result, Apple faces less competition from rival smartphones and less competitive pressure from innovative, cross-platform technologies not because Apple makes its own products better but because it makes other products worse. With less competition, Apple extracts extraordinary profits and constrains innovation to serve its interests. This leaves all smartphone users worse off, with fewer choices, higher prices and fees, lower quality apps, and accessories, and less technological progress from Apple and others.

In filing the lawsuit, Attorney General Bonta joins the U.S. Department of Justice and the attorneys general of Arizona, Connecticut, Maine, Michigan, Minnesota, New Hampshire, New Jersey, New York, North Dakota, Oklahoma, Oregon, Tennessee, Vermont, Wisconsin, and the District of Columbia.

Attorney General Bonta is committed to enforcing anticompetitive laws to ensure fair prices, innovation, and consumer choice.

In February 2024, Attorney General Bonta, the Federal Trade Commission, and a bipartisan coalition of states, announced filing a lawsuit that challenges the proposed merger of Kroger and Albertsons; this merger presents a significant risk of reduced competition and higher food prices nationwide. In December 2023, Attorney General Bonta announced a $700 million multistate settlement with Google resolving allegations that the company violated state and federal laws by monopolizing the Android smartphone application market. In November 2023, Attorney General Bonta and three other attorneys general announced joining U.S. DOJ’s lawsuit against Agri Stats, Inc., a company that organizes and manages anticompetitive information exchanges for meat processors and facilitated the unlawful increase of chicken, pork, and turkey prices across the U.S.

A copy of the complaint is available here.

OAKLAND – In recognition of National Consumer Protection Week, California Attorney General Rob Bonta today highlighted ongoing efforts to protect California consumers and urged Californians to report misconduct or violations of state consumer protection laws to the California Department of Justice (DOJ) at oag.ca.gov/report. Complaints submitted by the public provide DOJ with important information about potential misconduct to help determine whether to investigate a business or individual.

“In California, we have strong consumer protection laws and a tremendous team working around the clock to protect Californians online, in their financial lives, in their efforts to find and keep housing and education, and across the marketplace. And we need your help,” said Attorney General Bonta. “This National Consumer Protection week I urge Californians to stand up with me and know their rights as consumers, and to let us know if they see misconduct in the market. Whether protecting data privacy, tenant protections, or stopping egregious bank fees, as the People’s Attorney, I am committed to enforcing consumer protections in the state of California and speaking out for consumer protections nationwide.”

STANDING UP FOR CONSUMER FINANCIAL PROTECTION:

In February, Attorney General Bonta issued letters to banks and credit unions not subject to the Consumer Financial Protection Bureau’s supervision warning that overdraft and returned deposited item fees may violate California’s Unfair Competition Law (UCL) and the federal Consumer Financial Protection Act (CFPA). Some financial institutions charge up to $36 or more for each overdraft. California consumers paid an estimated $200 million in overdraft fees in 2022, with the financial burden disproportionately falling on low-income consumers and consumers of color.

In December 2023, Attorney General Bonta joined a bipartisan multistate coalition of attorneys general in submitting an amicus brief to the U.S. Supreme Court defending states’ rights to enforce state consumer financial protection in Cantero v. Bank of America.

In May 2023, Attorney General Bonta, and a coalition of 24 attorneys general, filed an amicus brief in the U.S. Supreme Court supporting the Consumer Financial Protection Bureau’s (CFPB) contention that the agency’s funding structure is constitutional and arguing that the court should not invalidate the CFPB’s past and ongoing regulatory and enforcement actions. Those regulatory and enforcement actions cover all aspects of consumer financial markets; if allowed to stand, the Fifth Circuit’s decision threatens to upend over a decade of enforcement and regulatory work by the CFPB and would be detrimental to consumers across the country.

HIGHER EDUCATION: 

There is a $1.7 trillion student loan debt crisis in the United States. DOJ is committed to supporting the efforts of the U.S. Department of Education to ease the burden of federal student loans and is committed to protecting California student loan borrowers and those seeking higher education from predatory colleges and lending.  

In February, Attorney General Bonta celebrated the decision by the California Court of Appeal affirming a lower court’s decision which found in the state’s favor in its lawsuit against Ashford University, an online, for-profit college, for violating California’s unfair competition and false advertising laws. In 2017, DOJ filed a lawsuit alleging that Ashford University and Zovio provided false and misleading information to students about career outcomes, cost and financial aid, pace of degree programs, and transfer credits, in order to persuade them to enroll to persuade them to enroll in the school and then used illegal debt collection practices when students struggled to pay their bills. As part of the decision, the court ordered Ashford University and Zovio to pay more than $21 million in penalties.

If you believe you have been the victim of a predatory loan, deceived by a for-profit college, or otherwise taken advantage of, you can file a complaint at oag.ca.gov/report. 

HOUSING: 

California is facing a housing shortage and affordability crisis of epic proportions. Almost 17 million Californians – 44% of all state residents – live in homes that are rented and over half of California renter households are housing cost-burdened, placing them at increased risk of housing instability and homelessness. Co-authored by Attorney General Bonta during his time as a state assemblymember, the Tenant Protection Act (TPA) limits rent increases and prohibits landlords from evicting tenants without just cause.

In February, Attorney General Bonta announced a settlement with two separate Bakersfield landlords and their property management company, Clemmer & Company, for multiple violations of the TPA and, in the case of the management company and one landlord, for violation of the Fair Employment and Housing Act.

Also in February, Attorney General Bonta issued five housing consumer alerts advising California tenants of their rights and protections under state law, and alerting property managers and landlords of their obligations to tenants. One of the alerts, a Know Your Rights alert that notifies tenants of the TPA’s statewide rent increase cap, is available in 24 languages. The remaining four consumer alerts are available in English, Spanish, Chinese (Simplified), Korean, Tagalog, and Vietnamese. All of the alerts are available here, near the bottom of the page.

In January, Attorney General Bonta announced a settlement with Invitation Homes to resolve allegations that the company violated the TPA and California’s price-gouging law by unlawfully increasing rents on approximately 1,900 households.

In June 2023, Attorney General Bonta announced a settlement against Green Valley Corporation, a San Jose-based housing developer and property manager to resolve allegations that the company violated the TPA by issuing unlawful rent increases to nearly 20 of its employee tenants and serving unlawful eviction notices to six of those employee tenants.

In addition to statewide protections, some cities and counties have additional rental protections, including stricter limits on rent increases than the TPA and additional just cause requirements. Californians should check what protections are in place where they live. For more information and resources, visit the Resources for Tenants tab here.

PROTECTING CHILDREN ONLINE:  

In January, Attorney General Bonta, Assemblymember Buffy Wicks, and Senator Nancy Skinner introduced the California Children’s Data Privacy Act (AB 1949 (Wicks)), and the Protecting Our Kids from Social Media Addiction Act (SB 976 (Skinner)), landmark legislation seeking to protect youth online. These two bills would, respectively, limit the harms associated with social media addiction and provide more robust protections for kids’ data privacy.

In October 2023, Attorney General Bonta co-led a bipartisan coalition of 33 attorneys general in filing a federal lawsuit against Meta Platforms, Inc. and affiliates (Meta), alleging that Meta designed and deployed harmful features that addict children and teens to their mental and physical detriment. Unredacted documents from this lawsuit demonstrate Meta is aware and purposefully utilizing algorithmic content delivery to target and addict children to social media — actions that they know is causing harm. 

DATA PRIVACY:

The California Consumer Privacy Act (CCPA) provides consumers with groundbreaking rights over their personal information, including:

• Right to Know – Consumers may request that a business tell them what specific personal information they have collected, shared, or sold about them, and why it was collected, shared, or sold.
• Right to Delete — Consumers may request that a business delete personal information that the business collected from the consumer, subject to some exceptions.
• Right to Opt-Out — If a business sells their personal information, consumers may request that it stop doing so.
• Rights for Minors — A business cannot sell the personal information of minors under the age of 16 without their permission and, for children under 13, without parental consent.
• Right to Non-Discrimination — A business may not discriminate against consumers who exercise their rights under the CCPA.

Earlier this year, as part of ongoing efforts to enforce the CCPA, Attorney General Bonta announced an investigative sweep, and sent letters to businesses with popular streaming apps and devices, alleging that they fail to comply with the CCPA. The sweep focused on the compliance of streaming services with CCPA’s opt-out requirements for businesses that sell or share consumer personal information, including those that do not offer an easy mechanism for consumers who want to stop the sale of their data.  

In February Attorney General Bonta announced a settlement with DoorDash, resolving allegations that the company violated the CCPA and the California Online Privacy Protection Act (CalOPPA) by selling its California customers’ personal information without providing notice or an opportunity to opt out of that sale.

For more information about the CCPA, visit oag.ca.gov/ccpa. To report a violation of the CCPA to the Attorney General, submit a complaint at oag.ca.gov/report.

TELEMARKETING:

Telephone scams, like robocalls and robotexts, can result in people losing millions through phishing texts, imposter scams, and links containing ransomware. In 2023 alone, consumers reported losing more than $10 billion to fraud, this marks a 14% increase over reported losses in 2022. 

In February, Attorney General Bonta joined a coalition of 51 bipartisan attorneys general in issuing a warning letter to Life Corporation, a company that allegedly sent New Hampshire residents scam election robocalls during the New Hampshire primary election. The calls allegedly used artificial intelligence to impersonate the president and discourage voters from participating in the primary. 

In January, Attorney General Bonta joined a coalition of 26 attorneys general in filing a comment letter responding to the Federal Communications Commission’s (FCC) notice of inquiry related to the potential impact of emerging artificial intelligence (AI) technology on efforts to protect consumers from illegal robocalls or robotexts. 

For more tips and information on consumer protection, please visit https://oag.ca.gov/consumers.

OAKLAND — California Attorney General Rob Bonta today announced a settlement with two separate local Bakersfield landlords and their property management company, Clemmer & Company, for multiple violations of the Tenant Protection Act (TPA) and for violation of the Fair Employment and Housing Act. Co-authored by Attorney General Bonta during his time as a state assemblymember, the TPA was signed into law by Governor Gavin Newsom in 2019. It created significant new protections for most tenants, including limiting rent increases and prohibiting landlords from evicting tenants without just cause. As part of the settlement, the owners and property manager will collectively pay restitution and penalties totaling $213,000 and must comply with strong injunctive terms. 

“When it comes to protecting tenants and ensuring that all Californians have a place to call home, the California Department of Justice is all in. Today's settlement sends a strong message: The Tenant Protection Act is the law—and it must be followed by everyone, everywhere in California,” said Attorney General Bonta. “If you are interested in getting into the renting business, as a landlord or property manager, you are responsible for knowing and abiding by state and local laws and regulations. Property management companies are responsible for complying with the TPA and related laws, even when acting on the requests of landlords. California law also protects renters from discrimination based on their source of income, such as if they use a Section 8 Housing Choice Voucher. Keeping people housed is a top priority for my office and I am committed to enforcing violations of people’s rights to housing. Full stop.”

An investigation by California Department of Justice (DOJ) found that the two individual landlords, each of whom own over a hundred units, and property manager Clemmer & Company unlawfully issued eviction notices in violation of the TPA. One landlord issued over 40 eviction notices on the basis that the landlord intended to substantially remodel the units, but the remodeling work performed did not meet the standards required under the TPA to justify eviction. The other landlord issued at least two eviction notices targeting tenants with Section 8 Housing Choice Vouchers on the same basis but performed no remodeling work. These two eviction notices violated the TPA and constituted unlawful discrimination against Section 8 Housing Choice Voucher recipients. The property manager facilitated many of these unlawful evictions. Separately, the second landlord also unlawfully increased rent for dozens of tenants, including by issuing multiple rent increases within a single year that combined to exceed the TPA’s 12-month rent cap, and failed to return security deposits within 21 days of move-out and to provide documentation of deductions as required under California’s security-deposit law.

The settlement terms include payments totaling $213,000, consisting of $93,000 in civil penalties and $120,000 in restitution to be paid to approximately 85 current and former tenants. This restitution will help affected families recover financially from rent hikes or displacement. The settlement also imposes strong injunctive terms, including the following:

• Reset rental rates for current tenants who paid unlawful rent.
• Comply with Senate Bill 567, which takes effect April 1 and strengthens the TPA’s eviction protections. Among other things, eviction notices based on substantial remodels must include a description of the work to be completed, copies of required permits, the date the owner expects to complete the work, and notification that if the substantial remodel is not commenced or completed, the tenant must be offered the opportunity to re-rent the unit at the same rent and lease terms as when the tenant left.
• Provide annual reports to California DOJ with copies of all of substantial remodel eviction notices, with other required documentation varying by defendant. 
• Clemmer & Company will provide annual trainings to all employees about landlord-tenant and fair housing laws 

Today’s settlement represents California DOJ’s third enforcement settlement under the TPA. To date, the TPA has been enforced against a large housing developer and property manager, a large landlord with statewide rental operations, and now, smaller, local landlords and a property management company.

In January, Attorney General Bonta announced a settlement with Invitation Homes to resolve allegations that the company violated the TPA and California’s price-gouging law by unlawfully increasing rents on approximately 1,900 homes. In June 2023, Attorney General Bonta announced a settlement against Green Valley Corporation, a San Jose-based housing developer and property manager to resolve allegations that the company violated the TPA by issuing unlawful rent increases to nearly 20 of its employee tenants and serving unlawful eviction notices to six of those employee tenants. Earlier this month, Attorney General Bonta issued five housing consumer alerts advising California tenants of their rights and protections under state law, and alerting property managers and landlords of their obligations to tenants. The Know Your Rights alert is available in 24 languages. The remaining four consumer alerts are available in English, Spanish, Chinese (Simplified), Korean, Tagalog, and Vietnamese. All of the alerts are available here.

 A copy of the complaints and proposed judgments for all three parties are available here: 1a, 1b, 2a, 2b, 3a, 3b. 

LOS ANGELES — California Attorney General Rob Bonta, the Federal Trade Commission (FTC), and a bipartisan coalition of states, today announced the filing of a lawsuit that challenges the proposed merger of Kroger and Albertsons. Kroger and Albertsons are the two largest national supermarket chains in the country and this merger presents a significant risk of reduced competition and higher food prices nationwide. In California specifically, Kroger’s $24.6 billion purchase of Albertsons is expected to further consolidate the highly concentrated retail grocery market in Southern California, leading consumers to face fewer choices and higher prices. The merger is also expected to reduce the ability of unions to negotiate working conditions at these stores, impacting thousands of employees in California.

“This megamerger is bad for workers, for agricultural producers, and for California communities. In some markets in Southern California, Kroger-Albertsons is expected to be the only one-stop grocery option. Today, we are going to bat for a more just and competitive economy, one where companies need to compete for labor and where prices and service matter,” said Attorney General Bonta. “This merger will leave Californians with limited choices over where to shop – and for workers in this industry, where to work. As many families continue to feel the burden of inflation, fighting corporate consolidation that threatens to increase prices and reduce service is more important than ever.”

The lawsuit seeks to block the proposed Albertsons-Kroger merger, alleging it is in violation of the federal Clayton Act, which prohibits the acquisition of assets where the effect of such acquisitions may substantially lessen competition or create a monopoly. Businesses facing less competition have the ability to charge higher prices without providing improvements to the quality of goods. Anticompetitive supermarket mergers can impose other harms, including a reduction in labor market competition which may lower wages or slow wage growth, worsen benefits or working conditions, or result in other degradations of workplace quality.

In October 2022, Attorney General Bonta and five other state attorneys general sent a letter to Albertsons and Kroger demanding that Albertsons delay a $4 billion payout to stockholders until state attorneys general and the FTC complete their review of its proposed merger with Kroger, to ensure that the proposed action would not result in higher prices for consumers, suppressed wages for workers, or other anticompetitive effects. In November 2022, Attorney General Bonta, along with the attorneys general of the District of Columbia and Illinois, asked the D.C. District Court to temporarily block Albertsons' planned $4 billion payment amid concerns that the payment would dramatically hamper Albertsons' ability to compete. Also in November 2022, Attorney General Bonta, along with the attorneys general of the District of Columbia and Illinois, filed a motion for a preliminary injunction to block Albertsons' planned $4 billion payment of a "special dividend" to shareholders. 

In filing today's lawsuit, Attorney General Bonta joins the FTC, and the attorneys general of Arizona, Illinois, Maryland, Nevada, New Mexico, Oregon, Wyoming, and the District of Columbia. 

A copy of the complaint is available here.

OAKLAND — California Attorney General Rob Bonta today announced a settlement with DoorDash, resolving allegations that the company violated the California Consumer Privacy Act (CCPA) and the California Online Privacy Protection Act (CalOPPA). The investigation by the California Department of Justice found that DoorDash sold its California customers’ personal information without providing notice or an opportunity to opt out of that sale in violation of both the CCPA and CalOPPA. The sale occurred in connection with DoorDash’s participation in a marketing cooperative, where businesses contribute the personal information of their customers in exchange for the opportunity to advertise their products to each other’s customers. 

“DoorDash’s participation in a marketing cooperative is a sale under the CCPA and violates its customers’ rights under our landmark state privacy law. As my office has stressed time and time again, businesses must disclose when they are selling personal information and offer Californians a way to opt out of that sale,” said Attorney General Bonta. “I hope today’s settlement serves as a wakeup call to businesses: The CCPA has been in effect for over four years now, and businesses must comply with this important privacy law. Violations cannot be cured, and my office will hold businesses accountable if they sell data without protecting consumers’ rights.”

DoorDash is a San Francisco-based company that operates a website and mobile app through which consumers may order food delivery. In order to reach new customers, DoorDash participated in marketing cooperatives and disclosed consumer personal information as part of its membership in the cooperatives. In January 2020, the first month that the CCPA was in effect, DoorDash traded personal information – including names, addresses, and transaction histories – of California consumers to a marketing cooperative in a single transfer so that it could market its services to the customers of the other participating businesses. The other businesses participating in the cooperative also gained the opportunity to market to DoorDash customers. 

Today’s enforcement action alleges that this was a sale of personal information under the CCPA, that DoorDash violated the CCPA’s requirements for businesses that sell personal data, and that it failed to cure these violations. The complaint also alleges that DoorDash violated CalOPPA by failing to state in its posted privacy policy that it disclosed personally identifiable information, like a consumer’s home address, to the marketing cooperatives. Marketing cooperatives enable businesses to trade personal information, which can lead to the widespread dissemination of private consumer data, including to data brokers and other companies that are not members of the marketing cooperative.

As part of the settlement, DoorDash will pay a $375,000 civil penalty and comply with strong injunctive terms. Specifically, DoorDash must:

•  Comply with CCPA and CalOPPA, including requirements that apply to businesses that sell personal information.

•  Review contracts with marketing and analytics vendors and use of technology to evaluate if it is selling or sharing consumer personal information.

•  Provide annual reports to the Attorney General that monitors any potential sale or sharing of consumer personal information.

Today’s settlement with DoorDash marks Attorney General Bonta’s second CCPA enforcement settlement. This enforcement action underscores that sharing of customers’ personal information with a marketing cooperative is a sale within the meaning of the CCPA and that businesses can be exposed to liability under multiple California privacy laws for the same conduct. 

As part of ongoing efforts to enforce the CCPA, Attorney General Bonta last month announced an investigative sweep, and sent letters to businesses with popular streaming apps and devices alleging that they fail to comply with the CCPA. The sweep focused on the compliance of streaming services with CCPA’s opt-out requirements for businesses that sell or share consumer personal information, including those that do not offer an easy mechanism for consumers who want to stop the sale of their data. Attorney General Bonta has previously conducted investigative sweeps related to employee information and children’s privacy. In August 2022, the Attorney General announced a settlement with Sephora resolving allegations that it failed to disclose to consumers that it was selling their personal information and failed to process opt-out requests via user-enabled global privacy controls in violation of the CCPA. 

For more information about the CCPA, visit www.oag.ca.gov/ccpa. To report a violation of the CCPA to the Attorney General, consumers can submit a complaint online at www.oag.ca.gov/report.

A copy of the complaint and proposed stipulated judgment, which details the aforementioned settlement terms and remains subject to court approval, can be found here and here.

OAKLAND – California Attorney General Rob Bonta today filed a lawsuit in the Superior Court of California, Los Angeles County, against Care Specialist HCS Inc., formerly doing business as TLC Home Care Services, and its prior operators, accusing the company and its operators of misclassifying in-home care workers as independent contractors instead of employees in direct violation of California’s labor laws and Unfair Competition Law. The lawsuit alleges that since at least 2016, the defendants’ misclassification of hundreds of workers resulted in extensive wage theft and caused workers to be denied basic workplace protections such as a minimum wage, overtime pay, meal breaks and rest periods, paid sick leave, and workers’ compensation benefits, among other benefits. The lawsuit also alleges the company misrepresented workers’ employment status to its clients, falsely telling clients that it treated its care workers as employees when it did not. The complaint further alleges that the company included non-compete clauses in its client contracts, which are void in California.

“Misclassifying workers is illegal and harms both employees and the state,” said Attorney General Bonta. “In-home care workers provide essential services to our most vulnerable populations, and they deserve to be treated fairly under the law. My office will continue to fight against worker misclassification and protect the rights of all Californians.”

The case was brought to the attention of the Attorney General’s office by the Pilipino Workers Center in Los Angeles. The agency, Care Specialist HSC Inc., which formerly did business as TLC Home Care Services, has been operating in California since at least 2016 and has employed hundreds of care workers during this time, many of whom are Filipino immigrants. Despite clear labor laws requiring that these workers be classified as employees, and the company’s own representations to its clients that it did so, the company has misclassified care workers for years, and has continued to do so even after being acquired by new owners in September 2022. This misclassification has not only harmed workers, but also has resulted in significant financial implications for the state, leading to the loss of considerable tax revenue. The lawsuit against Care Specialist HSC Inc. seeks injunctive relief, restitution, and penalties.

Attorney General Bonta is committed to defending workers’ rights, workplace safety, and California’s fair and competitive labor market. Through the Attorney General’s office, including the Worker Rights and Fair Labor Section, Attorney General Bonta enforces California’s laws to protect the welfare of California workers and legitimate businesses operating in the state. In December 2022, Attorney General Bonta joined 17 attorneys general in pushing for stronger federal protections against worker misclassification. In April 2023, Attorney General Bonta co-led a multistate coalition in submitting comments supporting the Federal Trade Commission’s proposed rule to eliminate non-compete clauses in employment contracts in most circumstances. Non-compete clauses are void under California law, and in March 2022, Attorney General Bonta issued an alert reminding employers and workers that non-compete agreements are not enforceable in California. Attorney General Bonta officially supports AB 1076, which would further protect employee rights by prohibiting non-compete agreements in an employee’s contract, and including a requirement for employers to notify their employees about the existence of these provisions.

Californians who believe they are victims of Care Specialist HCS Inc.’s or TLC Home Care Services’ misconduct should file a complaint with the California Attorney General’s Office at www.oag.ca.gov/report. Victims may also send a letter to: California Department of Justice, Public Inquiry Unit, P.O. Box 944255, Sacramento, CA 94244-2550. 

SAN DIEGO -- Attorney General Kamala D. Harris, along with the attorneys general of 49 other states and the District of Columbia, today announced a $95.9 million settlement with USA Discounters over allegations that the company used deceptive marketing and unlawful debt collection practices targeting military servicemembers.  Under the settlement, Attorney General Harris secured nearly $7 million in restitution for over 4,100 Californians who were harmed by the company’s fraudulent actions.

USA Discounters, which also did business as USA Living and Fletcher’s Jewelers, operated retail stores near military installations, including near Navy and Marine Corps installations in the San Diego Area.  It sold consumer products, including furniture, appliances, televisions, computers, smartphones, and jewelry, primarily on credit and specifically targeted members of the military and veterans. The company marketed itself as a discount retailer but actually sold its merchandise at a substantial mark-up, including additional fees that effectively concealed exorbitantly high interest rates for financed purchases. 

“Our military servicemembers give their all to protect our country and our interests around the world, and yet USA Discounters gave its all to fleece them with deceptive marketing and unlawful debt collection practices,” said Attorney General Harris.  “This agreement holds USA Discounters accountable for its illegal conduct and compensates servicemembers and veterans for the harm it caused.”

USA Discounters advertised that military, veterans and government employees would never be denied credit for goods purchased from the retailer and then used abusive tactics to collect on debts owed, such as persistently contacting servicemembers’ chains-of-command and using the military allotment system to guarantee payment. The company’s abusive actions threatened the military careers and security clearances of its victims.

In addition to its deceptive marketing, USA Discounters also failed to provide terms and disclosures in its financing agreements, as required under the law, and misled consumers about the costs of financing.  USA Discounters also charged added fees to its customers who were on active duty and required them to sign contracts that included unfavorable terms not included in contracts signed by other customers, in violation of California’s Military and Veterans Code, which prohibits discrimination against military members in the terms and conditions of credit. For contracts entered into outside of California, USA Discounters filed default debt collection actions against servicemembers in Virginia state courts, regardless of the state where the contract was entered into or the servicemember’s location, which meant servicemembers were often unable to defend themselves in court. 

USA Discounters closed its stores in the summer of 2015 before declaring bankruptcy. Under the terms of this settlement, the company agreed to write off accounts, remove negative information from credit reports, and provide other consumer relief. The settlement also includes provisions for injunctive relief and civil penalties. 

The Attorney General’s Office received critical assistance in its investigation from the Navy and Marine Corps legal assistance offices at Navy Base San Diego, the Marine Corps Recruit Depot, and Camp Pendleton, and from the Navy’s Fleet and Family Support Center. 

Attorney General Harris has defended the rights of servicemembers, filed actions against companies who prey on members of the military, and issued multiple consumer alerts to warn servicemembers against scams and fraud.  In August 2016, Attorney General Harris reached a $252,000 settlement with two privatized military housing contractors, Lincoln Military Property Management LP and San Diego Family Housing LLC and their eviction law firm, Kimball, Tirey & St. John LLP, over the companies’ unlawful evictions of 18 military servicemembers and their families in San Diego and Orange County.  In addition, Attorney General Harris previously took action against JP Morgan Chase for violating the Servicemembers Civil Relief Act in obtaining default judgments against servicemembers on credit card debt.

The Attorney General also obtained a $1.1 billion judgment against Corinthian Colleges, which illegally used the official seals of the military services in advertisements to entice servicemembers and veterans to enroll in its programs.