Web seminar focuses on dealing with AGs' growing power

By John O'Brien | Mar 31, 2009



WASHINGTON (Legal Newsline) - A pair of former deputy attorneys general discussed the changing roles and powers of state attorneys general in a Washington Legal Foundation Web seminar Friday.

Ashley Taylor and William Hurd of Troutman Sanders also talked about legislation pending in Congress that could strengthen the ability of a state attorney general to pursue a consumer protection suit. The two men formerly worked in the Virginia Attorney General's Office.

Taylor said in the past decade or two the role of the attorney general has shifted to consumer protection.

"While many could have anticipated the attorneys general would tap into some of the tools at their disposal, I don't think anyone could have anticipated that in 10-20 years the job description would have been rewritten entirely," Taylor said.

"This is important because the job now attracts a different personality sort. State attorneys general are equal politicians and lawyers."

And those politicians/lawyers are coordinating with each other, Taylor said. Multi-state investigations are increasing while attorneys general take the lead in antitrust, Medicaid fraud and other consumer protection issues, he said.

He gave seven tips for dealing with a lawsuit brought by an attorney general. He devotes his practice to representing companies in such situations. Those tips were:

-Craft a legal strategy that is legally sound and takes the current political landscape into account;

-Understand the company's position in the marketplace;

-Expect the state attorney general to communicate with his peers around the country;

-Expect the staffers of those attorneys general to communicate with each other;

-Expect, anticipate and prepare for multi-state coordination;

-Don't expect the problem to simply go away; and

-Do not assume the worst.

"Don't assume it's a foregone conclusion that a suit will be filed or regulatory enforcement action will be taken," Taylor said.

Hurd said dealing with a state attorney general is a lot different than a federal agency.

"When the state attorney general comes calling, he is very often not nearly as far down the road to making a decision or the eventual outcome of his actions than a federal agency is," Hurd said. "There is more room to talk, more room to influence action in dealing with a state attorney general than perhaps with federal agencies."

Hurd also listed five features of some state attorneys' general investigations that he feels are some troublesome. A novel application of a broad state statute, the imposition of a state statute on a national market or business, a multi-state enforcement, the hiring of contingent fee counsel and the delegation of federal enforcement power to state attorneys general all raise Constitutional issues, he said.

Hurd also said the recent U.S. Supreme Court ruling in Wyeth v. Levine, which kept a state law tort claim from being preempted by federal law (in this case, the Food and Drug Administration approving a prescription drug's warning label) could also give attorneys general more power.

As would five pieces of legislation, Taylor added. Most notable is one that would give state attorneys general the power to file suit against national banks. It is being pushed by Rep. Barney Frank (D-Mass.).

Fifty state attorneys general recently asked President Barack Obama for that authority.

"You would never have thought that 20 years ago there would be serious consideration about allowing 50 state attorneys general to, perhaps, regulate national banks based on 50 state perspectives," Taylor said.

"Whether it's right or wrong, that's really not the question. It's just a reality that a company needs to deal with."

From Legal Newsline: Reach John O'Brien by e-mail at john@legalnewsline.com.

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