Lawsuits & Settlements

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

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

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

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

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

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

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

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

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

The settlement agreement is attached.

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

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

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

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

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

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

WASHINGTON – Charging the Bush Administration is “acting in collusion with the auto and oil industries,” California Attorney General Jerry Brown said California is preparing to sue the federal government if it blocks the state’s efforts to reduce greenhouse gas-causing emissions from motor vehicles.

Addressing a U. S. Environmental Protection Agency (EPA) hearing, Brown said federal law allows California to set vehicle emission standards tougher than federal regulations, and then allows other states to adopt the California standard.

“The California legislature passed a greenhouse law in 2002 requiring automakers to reduce vehicle global warming emissions 30 percent by 2016,” Brown explained. “There is no doubt that automobile manufacturers can meet that goal, and since the federal government does not want to seek such a reduction California intends to move forward.”

Brown said that 11 other states -- Connecticut, Maine, Maryland, Massachusetts, New Jersey, New York, Oregon, Pennsylvania, Rhode Island, Vermont and Washington -- have now adopted the California standard.

“Together we represent one-third of the population of the United States, and the people of our 12 states want to act now to combat global warming. We are not willing to wait while President Bush offers only rhetoric, excuses and delays. Suing the federal government is not our first choice, but we will have no choice if our legitimate efforts to protect our planet are blocked because of partisan political games in Washington.”

Brown pointed out that the states’ battle against global warming is a bi-partisan effort.

“Gov. Schwarzenegger supports our plans to sue EPA if we are not allowed to implement the California law. Protecting our planet is not a partisan issue, and the states now want to do what we can in the absence of federal action, and the EPA has no right to deny us the ability to move forward.”

Brown said the proposed California standards are the most comprehensive effort to combat global warming in U.S. history.

The California attorney general was also scheduled to testify Tuesday following his EPA testimony before the Senate Committee on Environment and Public Works.

Brown said California filed its request for an EPA waiver, which in the past has always been routinely granted, in December 2005. Under the Clean Air Act, California can adopt stricter standards by requesting a waiver from EPA and such requests have been approved more than 50 times in the past. Approval of California’s waiver means the other states would get approval automatically.

Congress passed the Clean Air Act in 1963 and subsequent amendments in 1967, 1970 and 1977 expressly allowed California to impose stricter environmental regulations in recognition of the state’s “compelling and extraordinary conditions,” including topography, climate, high number and concentration of vehicles and its pioneering role in vehicle emissions regulation. Brown said Congress intended the state to continue its pioneering efforts at adopting stricter motor vehicle emissions standards, far more advanced than the federal rules.

“Our waiver request has been pending for a year and a half, which is an unreasonable delay,” Brown said. “Our patience is wearing thin. We watch the President and his EPA acting in collusion with the auto and oil industries, while we want to take reasonable, constructive steps to reduce greenhouse gas emissions. We are now preparing to sue unless we receive our waiver within a short time.”

See the attached three documents for additional background.

SAN FRANCISCO -- (May 14, 2007) California Attorney General Edmund G. Brown Jr. today criticized the Bush administration for illegally adopting “dangerously misguided” gas mileage rules.

Brown, in a lawsuit backed by 11 states and several environmental organizations, said the National Highway Traffic Safety Administration’s new mileage standards violate federal law by ignoring both the environment and our country’s growing dependence on foreign oil.

“After years of neglect, it is unconscionable to increase vehicle mileage standards by only one mile per gallon,” Brown said outside the San Francisco-based 9th U.S. Circuit Court of Appeals, where the case was argued Monday. “We are asking the court to reject this dangerously misguided policy that exacerbates global warming and enriches foreign sponsors of terrorism.”

Despite the Energy Policy and Conservation Act, adopted four decades ago in response to the Arab oil crisis, the Bush administration last year ordered a paltry mileage increase, from 22.2 miles per gallon to 23.5 by 2010. The National Environmental Policy Act and other regulations also require the Bush administration, when formulating new mileage standards, to consider the effects of the vehicles’ greenhouse gas emissions on global warming, which the Bush administration failed to do, Brown said.

Instead, the Bush administration adopted a standard oblivious to how manmade pollution is harming the environment and changing the climate. Bush’s policy continues to feed the coffers of foreign oil-producing governments, many of them sponsors of terrorism, while the price of gas is reaching historic highs. Had the administration followed federal environmental and conservation regulations, the government would have demanded greater fuel efficiency, Brown said.

A decision by the three-judge appeals court panel is expected anytime.

Suing along with Brown are Connecticut, Maine, Massachusetts, Minnesota, New Jersey, New Mexico, New York, Oregon, Rhode Island, Vermont, New York, the District of Columbia, New York City, the Center for Biological Diversity, Natural Resources Defense Council, Environmental Defense and the Sierra Club.

While Bush ignores global warming, the U.S. Supreme Court has not.

On April 2, the Supreme Court demanded the U.S. Environmental Protection Agency to consider adopting regulations to combat climate change. In that case, the high court wrote “the harms associated with climate change are serious and well recognized.” The Supreme Court noted environmental changes “have already inflicted significant harms” from retreating glaciers, to early spring snow melts to an “accelerated rate of rise of sea levels during the 20th century relative to the past few thousand years.”

Last week, Achim Steiner, executive director of the United Nations Environment Programme, said “Climate change will touch every corner and every community on this planet.” He said “It is now up to governments” to address the issue before it’s too late.

Brown agrees: “Why does President Bush want to keep us addicted to oil, foreign oil?”

The case is California v. National Highway Traffic Safety Administration, 06-72317.

Court records in the case are attached to this release.

A shuttered San Diego vocational school was sued Monday for allegedly bilking students out of millions of dollars in tuition for computer classes that were not delivered, according to a joint lawsuit by California Attorney General Edmund G. Brown Jr. and San Diego District Attorney Bonnie M. Dumanis.

“Students are saddled with enough debt going to school, and it’s outrageous that they paid for classes that were never taught,” Brown said.
“The school’s owners failed to give refunds and misled students, causing hundreds of complaints to come in to our consumer protection unit,” Dumanis said. “Thanks to the efforts by the attorney general and our office, these students will get their money back.”

The suit, which seeks millions of dollars in fines and restitution, accuses the owners and operators of MicroSkills of charging students about $25,000 in tuition and of closing the San Diego campus without refunding students. The suit accuses the owners and operators of soliciting students to enroll even as the school was going to close October 20. “Defendants continued to sign up new students and receive payments from students for such training during the time defendants intended to close their school,” said the lawsuit, filed in San Diego County Superior Court.

As many as 350 students were affected, and the suit alleges the company falsely promised refunds would be provided for any classes not provided.

“I was trying to better myself and instead this turned out to be a big downfall and now I’m in debt,” said 28-year-old student Kevin Schatte. The Spring Valley resident lost more than $21,000 in tuition.

California law requires when a private for-profit vocational school closes it must refund, within 30 days of closing, tuition for all classes that were not provided. MicroSkills and its owners failed to provide either partial or full restitution.
The lawsuit seeks a permanent injunction, restitution of tuition to as many as 350 former MicroSkills’ students of approximately $2.5 million, and civil penalties of at least $2 million.

The suit targets Firouz Memarzadeh and Farah Memarzadeh, husband and wife of La Jolla, the Memarzadeh Family Trust and others.

The school's address is 7340 Miramar Road #207, San Diego, California. The complaint is attached.

Attorney General Edmund G. Brown Jr. sued the Tulare County Board of Supervisors on Thursday to overturn the board's approval of two mega-dairies housing more than 12,000 cattle near Allensworth State Park, a nationally registered historic site honoring a pioneering black settlement founded by a former slave.

The California Department of Justice lawsuit alleges the Tulare County Board of Supervisors on March 20 violated the California Environmental Quality Act when it approved the cow pens located about a mile away from the historic site. The suit says the dairy will produce 20 tons of manure and other contaminants each day.

"Allensworth State Park will be compromised by the odors, flies and air and water pollution generated by these large dairies in such close proximity,' the Tulare County Superior Court lawsuit said. 'By bringing a large industrial dairy operation into the immediate surroundings of the park, the dairy project threatens the park's historic integrity and its function to convey a historically accurate picture of the way of life of the Allensworth pioneers.'

The park preserves a town founded by Allen Allensworth, which was an agricultural haven for former slaves and sharecroppers in the Central Valley of California. Allensworth, a slave born in 1842, served in the U.S. military during the Civil War and was the first African American to receive the rank of Lieutenant-Colonel.

The lawsuit claims the Tulare County Board of Supervisors violated California environmental regulations for, among other things, approving the project 'without meaningfully evaluating and identifying the impact on the unique historical resources and setting of Allensworth State Park.'

The suit also alleges that the Tulare County Board of Supervisors did not adequately address the project's environmental impacts on the adjacent Pixley National Wildlife Refuge and the Allensworth Ecological Reserve.

A copy of the lawsuit is attached.

(SAN FRANCISCO) Six of the nation's largest auotmakers have tried to dismiss California's lawsuit against them on technical grounds but in a brief filed today by Attorney General Edmund G. Brown Jr. the State of California affirms it's commitment to hold automakers accountable. Brown also requested a personal meeting with each of the automakers to discuss ways to fight global warming without conflict.

In September 2006, the Attorney Generals Office filed suit in San Francisco federal court against leading U.S. and Japanese auto manufacturers for creating vehicles whose emissions are the largest single source of greenhouse gasses in California. The manufacturers automobiles have contributed to an international global warming threat that has damaged Californias resources, jeopardized environmental health and cost millions of dollars to address current and future negative effects.

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

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

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

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

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

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