State Attorneys General, CFPB, & FTC

On January 29, a California state court approved a $2.25 million settlement to be paid by Walgreen Co., commonly known to consumers nationwide as the drug store chain Walgreens. The settlement stems from a consumer protection lawsuit by the district attorneys of four California counties (Santa Clara, Contra Costa, San Mateo, and Santa Cruz) in and around the San Francisco Bay area relating to selling expired over-the-counter drugs, baby food, and infant formula and charging consumers more than the lowest posted or advertised price for items.

The settlement concludes a months-long investigation by state regulatory agencies and county district attorneys’ offices into Walgreens, which operates more than 600 stores in California. The state will receive the entirety of the penalty paid by Walgreens, due to the difficulty in determining which or how many customers were affected. In addition to the financial penalty, a court order requires Walgreens employees “to make quarterly patrols to remove expired items and to post ‘clear and conspicuous’ signs asking consumers to inspect expiration dates.”

The California probe is another recent example of the foray of state attorneys general and local district attorneys into the consumer protection space. Companies should be mindful that despite the lessened reach of the Consumer Financial Protection Bureau and federal regulators over the past year, state enforcement—in California, at least, extending down to local district attorneys—has increased and will likely continue to do so.