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Terminix agrees to pay $60 million for overcharging customers in Alabama

The company systematically overcharged customers and failed in many cases to honor its service contracts, the AG’s office said.

Micah Danney

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Terminix logo

Pest control company Terminix International reached a $60 million settlement with the state over illegal business practices that targeted Alabama customers, Attorney General Steve Marshall’s office announced Nov. 5.

The company systematically overcharged customers and failed in many cases to honor its service contracts, often resulting in termite damage to homes and businesses, Marshall said.

A portion of the settlement will be used to establish a statewide fund for people who suffered damage because of Terminix’s actions.

Mobile County District Attorney Ashley Rich received the first public complaints about the company. Rich contacted Marshall’s office, which investigated and found that Terminix was engaged in a pattern of charging customers annual premiums for termite protection treatments that were applied inadequately. Customers did not receive “competent and thorough” annual termite inspections as guaranteed by their contracts, and were paying extra fees for pesticide that had already been applied and for which they had already paid, Marshall said.

When customers suffered damage from termite infestations, the company passed on the costs to other customers, sometimes charging annual renewal rates as high as 1,000 percent more than what they had been.

Terminix did this to try and force customers to cancel their lifetime protection contracts or accept new contracts that offered less benefits than the lifetime plans, according to the attorney general.

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The company’s actions violated several provisions of the Alabama Deceptive Trade Practices Act. Marshall’s office confronted the company with its evidence of illegal acts.

Terminix agreed to a settlement with the following terms:

  • $25 million for the Alabama Consumer Relief Fund for the payment of refunds to consumers who were overcharged by Terminix, and for consumers who were forced to pay other termite control companies money for services they should have received from Terminix. Per the terms of the agreement and pending court approval, the claims process will be set up in the coming months and the attorney general will announce how consumer claims are to be made.
  • $10 million to re-treat over 12,000 customer homes in Mobile, Baldwin and Monroe counties, whether or not those homes suffered termite damage due to Terminix’s failure.
  • Refunds to consumers of any unconscionable price increase paid in termite protection premiums in 2019 and 2020.
  • $650 to any Alabama consumer who left Terminix and hired another company to provide termite protection, or pay the difference in the former customer’s new termite protection costs and their previous plan.
  • New, competent and complete inspections of homes in the areas affected by Formosan termites to ensure no termite infestation problems still exist, and Terminix must repair all termite damage claims in the affected areas.
  • $20 million to the attorney general’s office to settle the state’s claims against Terminix and to be reinvested in statewide consumer protection efforts.
  • $4 million to the Alabama Department of Agriculture and Industries.
  • $1 million charitable contribution to the Auburn University Department of Entomology.

Terminix also agreed to adopt a reasonable and affordable price increase schedule for its annual premiums. Customers who lost their lifetime contracts can have them reinstated at the reasonable price levels they were paying in 2018, Marshall said.

He thanked Rich for acting in the interest of Alabama consumers. Rich said in a statement that she was pleased Marshall acted on her concerns.

“Unfair business practices like those that have been committed by Terminix cannot be tolerated in our community and our state, and it takes an attorney general with many resources to be able to handle litigation of this magnitude,” Rich said.

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Marshall thanked Assistant Attorney General Olivia Martin and Assistant Attorney General Dan W. Taliaferro for their efforts, as well as his office’s Consumer Interest Division, which conducted the investigation with the Alabama Department of Agriculture and Industries.

Micah Danney is a reporter at the Alabama Political Reporter. You can email him at [email protected] or reach him via Twitter.

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Crime

Suspected drug traffickers jailed in St. Clair County

Matt Mullinax, Christopher Baird, Sean Michael Brantley and Nathan Parke Bateman were all arrested following a lengthy undercover investigation.

Brandon Moseley

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(STOCK PHOTO)

Four individuals were arrested Tuesday on allegations that they were involved in a methamphetamine trafficking ring in St. Clair County.

Matt Mullinax, Christopher Baird, Sean Michael Brantley and Nathan Parke Bateman were all arrested following a lengthy undercover investigation. All four are being held in the Ashville Courthouse without bond.

The St. Clair County Sheriff’s Office Narcotics Division, St. Clair County District Attorney’s Office, along with the FBI, FBI Safe Streets Task Force, Pell City Police Department, Oxford Police Department, Cherokee County Sheriff’s Office and the Alabama Department of Corrections K9 Unit conducted an extensive undercover investigation that has resulted in the arrest of these individuals for their alleged involved in a methamphetamine trafficking criminal enterprise.

Matt Mullinax is a 37-year-old white male from Pell City. Mullinax has been charged with three counts of trafficking methamphetamine, three counts of unlawful Distribution of a controlled substance, one counts of unlawful possession of marijuana in the second degree and one count of unlawful possession of drug paraphernalia.

Christopher Baird is a 35-year-old white male from Pell City. Baird has been charged with two counts of trafficking methamphetamine, and one count of unlawful possession of a controlled substance.

Sean Michael Brantley is a 40-year-old white male from Lincoln. Brantley has been charged with two counts of trafficking methamphetamine, and one count of unlawful possession of a controlled substance.

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Nathan Parke Bateman is a 37-year-old male of other race. Bateman has been charged with two counts of trafficking methamphetamine.

The four individuals have been charged with crimes. At this point these are allegations. Baird, Brantley, Mullinax and Brantley, like all accused, will have an opportunity to mount a vigorous defense before a jury of their peers.

According to the Center for Disease Control and Prevention, in 2018, 67,367 drug overdose deaths occurred in the United States. The age-adjusted rate of overdose deaths decreased by 4.6 percent from 2017 (21.7 per 100,000) to 2018 (20.7 per 100,000).

Methamphetamines and other psychostimulants were responsible for 12,678 drug overdose deaths in 2018.

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According to the website drugabuse.gov, Methamphetamine is a powerful, highly addictive stimulant that affects the central nervous system. Methamphetamine is commonly also known as meth, blue, ice and crystal, among many other terms.

It takes the form of a white, odorless, bitter-tasting crystalline powder that easily dissolves in water or alcohol.

In addition to being highly addictive, long term use of methamphetamine can lead to symptoms that can include significant anxiety, confusion, insomnia, mood disturbances and violent behavior. Users also may display a number of psychotic features, including paranoia, visual and auditory hallucinations, and delusions (for example, the sensation of insects creeping under the skin).

Psychotic symptoms can sometimes last for months or years after a person has quit using methamphetamine, and stress has been shown to precipitate spontaneous recurrence of methamphetamine psychosis in people who use methamphetamine and have previously experienced psychosis.

These and other problems reflect significant changes in the brain caused by misuse of methamphetamine. Neuroimaging studies have demonstrated alterations in the activity of the dopamine system that are associated with reduced motor speed and impaired verbal learning.

Studies in chronic methamphetamine users have also revealed severe structural and functional changes in areas of the brain associated with emotion and memory, which may account for many of the emotional and cognitive problems observed in these individuals.

Methamphetamine use also leads to severe weight loss and dental problems. Methamphetamine use by pregnant women has been shown to cause cognitive and behavioral issues in their children that are long-lasting.

Billy J. Murray is the sheriff of St. Clair County.

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Crime

Governor appoints State Sen. Cam Ward as Bureau of Pardons and Paroles director

Ward is to replace current director Charlie Graddick, who announced on Nov. 2 that he planned to resign on Nov. 30.

Eddie Burkhalter

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State Sen. Cam Ward (VIA GOVERNOR'S OFFICE)

Gov. Kay Ivey announced Tuesday her appointment of State Sen. Cam Ward, R-Alabaster, to serve as director of the Alabama Bureau of Pardons and Paroles. 

Ward is to replace current director Charlie Graddick, who announced on Nov. 2 that he planned to resign on Nov. 30. Ward’s appointment is set to begin Dec. 7. 

Ward serves as the chairman of the Senate Judiciary Committee and has been central in the state Legislature’s criminal justice and prison reform work for many years.

“Cam Ward has spent his career as an attorney and public servant dedicated to Alabama’s criminal justice system,” Ivey said in a statement. “As he transitions to director of Pardons and Paroles, I’m confident that his background and experience will position him to closely follow the letter of the law while providing individuals every opportunity possible to rebuild their lives post incarceration.”

Ward is in his third term in the Alabama Senate and was first elected to the Statehouse in 2002. Ward began his career in state government when he was appointed deputy attorney general by former Attorney General Bill Pryor.

“I’m honored that Governor Ivey had the confidence to appoint me to this position,” Ward said in a statement. “I have committed my career in the Senate to improving our criminal justice system in Alabama, and I look forward to working with Governor Ivey going forward in this effort.”

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Graddick’s tenure as director of the state agency has been controversial, and his departure comes as the state’s prison system continues to face serious overcrowding and understaffing problems, both of which have drawn the focus of a lengthy U.S. Department of Justice investigation into prison violence and excessive use-of-force incidents. 

Graddick, a former circuit judge, state attorney general and architect of Alabama’s Habitual Offender Act, was appointed to the post in July 2019. He’s described the state’s inmates in op-eds and in interviews as too dangerous to be paroled.

After Graddick’s appointment as director, personnel shakeups at the bureau resulted in reductions in the number of incarcerated people given parole hearings, according to several people with knowledge of the matter who discussed their concerns with APR over the last few months. The number of people receiving paroles dramatically declined as a result.

Graddick also oversaw the bureau at a time when the bureau’s messaging to the public dramatically shifted, and began focusing on violent crimes, using the words “violence” and “violent” repeatedly in social media posts and press releases, prompting concern from criminal justice reform advocates that the bureau was attempting to sway public opinion against incarcerated people and their release on parole.

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Carla Crowder, executive director of the  Alabama Appleseed Center for Law and Justice in Montgomery, applauded Ivey’s selection.

“I’m encouraged by this appointment. Ward gets it. He’s not afraid to call out bad laws and crusade for smarter, better criminal justice policy,” Crowder said in a message to APR. “It will be refreshing to have a leader at parole who’s not stuck in the failed policies of the past but instead has earned a reputation for bold, innovative reform.”

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Crime

Report: Black men in Alabama prisons three times more likely to die by homicide

Incarcerated Black people in the state are being murdered at just more than three times the rate of white people.

Eddie Burkhalter

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(STOCK PHOTO)

A report this week by the Alabama Appleseed Center for Law and Justice in Montgomery found that incarcerated Black people in the state are being murdered at just more than three times the rate of white people.

Between 2014 and 2020, the Montgomery-based nonprofit found that 37 of the 48 men killed by homicide in Alabama prisons were black. Appleseed documented 89 preventable deaths from homicide, suicide or drug overdose during that time.

“So when we talk about preventable violence, when we talk about, unconstitutional conditions in our prisons. It’s hurting black Alabamians at much higher rates than anybody else,” said Carla Crowder, Appleseed’s executive director, speaking to APR on Thursday. “If we’re gonna be serious about racial justice, racial disparities in the criminal legal system, in the state, we have to look beyond police brutality.”

Crowder said police brutality is a serious issue but the injustices after incarceration are “two sides of the same coin.” The report notes a 2019 report by the U.S. Department of Justice that details widespread problems of violence and sexual abuse, corruption and drug use in Alabama’s prisons for men.

The DOJ report notes that ADOC “has violated and is continuing to violate the Eighth Amendment rights of prisoners housed in men’s prisons by failing to protect them from prisoner-on-prisoner violence, prisoner-on-prisoner sexual abuse, and by failing to provide safe conditions…”

“One year after the 2019 Department of Justice report detailed the need for immediate action to prevent more deaths, nothing has changed,” the Appleseed report reads. “In fact, 2020 is on pace to be one of the most deadly years on record in Alabama prisons, with deaths by homicide between January and July at 10 compared to seven for the same time period in 2019.”

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The Appleseed report also notes that homicides are likely higher than ADOC’s count. The DOJ report states that ADOC mischaracterized at least three deaths that had all the signs of homicide. “These unreported homicides provide reasonable cause to believe that ADOC’s homicide rate is higher than what ADOC has publicly reported,” the DOJ report reads.

Gov. Kay Ivey and Alabama Department of Corrections Commissioner Jeff Dunn are moving forward with plans to lease three new mega prisons from private companies, once built, and have said the new prisons will help solve the high levels of violence in state prisons, arguing existing facilities are outdated and not designed to keep inmates and staff safe, as are modern prisons.

Crowder said over the years ADOC has made many promises aimed at curbing the violence but hasn’t delivered on those promises.

“There’s been a number of steps that ADOC promised to take,” Crowder said. “We’re going to hire more officers, we’re gonna pay them more. We’re going to do these massive shakedowns in prisons and we’re gonna get all the weapons.”

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Court records show that ADOC is well behind court-ordered correctional officer hiring targets, and while ADOC does conduct random prison raids to collect weapons and contraband, such illicit contraband often finds its way back into prisons in short order.

“These have all been empty promises. Nothing has changed, and to think that new buildings are somehow going to fix decades of corruption and dysfunction,” Crowder said. “The buildings aren’t killing anybody.”

“We cannot continue down the path of building new prisons and expect them to somehow not be filled with the same systemic violence and racial disparities we have seen over the past five years in Alabama prisons,” said Hannah Krawczyk, an Auburn University Public Administration student and Appleseed intern who conducted research for the report, in a statement. “The cycle of human rights violations and violence that are inflicted on incarcerated individuals in this state cannot continue. As my generation learns about this crisis, we are determined to fight for change and end Alabama’s historic disregard for Black lives in the justice system.”

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Illinois man sentenced on drug trafficking charges

Ortega was found guilty of operating a drug trafficking ring that stretched all the way from Mexico to Alabama.

Brandon Moseley

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(STOCK PHOTO)

United States Attorney Prim F. Escalona and Drug Enforcement Administration Special Agent in Charge Brad L. Byerley on Monday announced that Nolberto Ortega, from Chicago, Illinois, was sentenced to 390 months in prison on Oct. 28 for distribution of heroin, cocaine, methamphetamine and fentanyl.

U.S. District Judge Liles C. Burke imposed the sentence. Ortega, age 54, has been found guilty of operating a drug trafficking ring that stretched all the way from Mexico to Alabama.

In August 2019, a federal grand jury charged Ortega in a multi-count indictment with leading a drug trafficking organization that transported heroin, cocaine, methamphetamine and fentanyl from Mexico to Talladega, Alabama.

The charges stemmed from an investigation led by the Drug Enforcement Administration and the Talladega County Drug Task Force in early 2019.

Law enforcement officers arrested Ortega in California after a drug shipment was seized in Talladega.

“This dealer went to extreme lengths to profit from this deadly poison with no regard to the devastation and destruction he left behind,” said Escalona. “The lengthy sentence sends the message that drug trafficking in our communities will not be tolerated and will be severely punished. The citizens of the Northern District of Alabama have one less drug dealer to worry about for years to come.”

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“We will continue to attack the scourge of illegal and dangerous drug distribution in Alabama and beyond,” Byerley said. “The lengthy sentencing of this individual should be taken as a message to those who want to sell drugs. We are going to catch you and put you in prison for a long time if you distribute this poison in our communities.”

The DEA investigated the case along with the Talladega County Drug Task Force. Assistant U.S. Attorneys Blake Milner and Austin Shutt prosecuted the case.

The Trump Administration has worked to increase security along the nation’s southern border with Mexico.

“America’s porous southern border causes the deaths of 30,000+ Americans every single year (from illegal alien homicides and overdoses on poisonous drugs shipped across our porous southern border),” said Congressman Mo Brooks, R-Alabama.

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According to the Center for Disease Control and Prevention, in 2018, 67,367 drug overdose deaths occurred in the United States. The age-adjusted rate of overdose deaths decreased by 4.6 percent from 2017 (21.7 per 100,000) to 2018 (20.7 per 100,000). Opioids were involved in 46,802 overdose deaths in 2018 (69.5% of all drug overdose deaths).

Ortega will serve his sentence in the federal prison system.

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