A $25 billion settlement with the five major mortgage servicers. An $80 million judgment against businesses selling acai berry products. These actions have one thing in common: They resulted from joint action by state attorneys general (AGs) against the companies involved.

With Dodd-Frank delegating to AGs the power to enforce certain federal consumer protection laws and the AGs entering into memorandums of understanding with the Consumer Financial Protection Bureau for joint action, there is now a distinct flow of enforcement power into the AGs’ offices. This increase in enforcement power comes at the same time that the state AGs across the country have increased their scrutiny in companies’ operations in their states. AGs are seeking multi-million dollar settlements in multi-state actions, and many company executives may wonder whether their company is next.

The ability of the AGs to force settlements highlights the power of collective action by the AGs to attack conduct of which they disapprove. Industries currently under review for other collective actions by AGs include efforts against companies in the food and beverage, pharmaceutical, healthcare, energy, transportation and telemarketing sectors, among many others.

But AGs can also be allies. The AGs understand the importance of business to their states and the jobs they provide. Educating the AGs about the impact of public policy can lead to helpful collective AG action. AGs can comment on proposed regulation to make the regulations less harmful to their states and citizens. Just this past June, 40 state and territorial AGs sent comments to the Federal Trade Commission about the placement of unauthorized third-party charges on mobile phone bills, seeking greater protections against the practice. They can bring lawsuits or file amicus briefs in important cases that could have far reaching effects. The recent challenge to the Affordable Care Act highlights both of these actions: one group of AGs filed the lawsuit, while another group filed amicus briefs in support of the federal government.

Further, AGs can reach out to various officials, both state and federal, to suggest actions that will benefit their residents and businesses. AGs often send joint letters to Congress regarding pending legislation both in support or opposition. For instance, 35 state and territorial AGs sent a letter to Congress this year encouraging Congress to act on immigration reform. AGs also send letters to executive branch officials to help to inform the public policy they are creating, with the aim to improve it. In other words, it is important to engage AGs both to help prevent harmful and to encourage positive involvement on important issues.

Developing a Strategy

An engagement strategy should have four main goals:

  1. Develop relationships with the state attorneys general and their staff.
  2. Educate the state attorneys general and their staff about client products and services.
  3. Identify potential problems and develop solutions.
  4. Lay the groundwork for engagement on important issues when they arise.

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