To: Reading Group 

From: Jim Tierney 

Date: January 11, 2024 

Re: What really happened to AG 

Just before getting on a plane last December, I received an email from a dear friend who teaches at that other law school in New Haven.  The email read (in part) “I have a line in a paper where I talk about the AG multistate, and I’d love to say who started it/how it came into existence…so I’m going to the source…”

So being a good pal and sitting on the plane I snapped off this response for her.  I could back it all up of this with traditional lawyer like evidence but with no internet I made it pretty freewheeling!

I am sharing it with you, my Reading Group, because this informal account can fill some gaps for you without forcing you into a series of law review articles that are wrong as often as they are right.  I’m also pretty much leaving out the endless challenges by AGs to anything a President not of their party wants to do and sticking to antitrust, environment and consumer protection.

December 16, 2023

The beginnings of Multistate?   Well, here we go…

It really isn’t complicated, but the truth of the matter escapes traditional law school pedagogy because it really isn’t written down anywhere.  So let me to give you some background that is the result of decades of experience, a still sharp memory, and much thought.  Quote it or not.  I hope this is what you need.

Resources – 1970’s and 1980s.

AG jurisdiction dramatically expanded in the late 1970s and early 80’s.  Congress helped with the Hart-Scott-Rodino Act (HSR) that allowed states to go to federal court on antitrust – singly or in groups.  SCOTUS came up with some great decisions supporting the independence of AG’s to make antitrust decisions that were not in harmony with the FTC and the USDOJ and multistate was born.

But Congress also did something else.   It streamed federal money through the Safe Streets Act - an initiative of then President Jimmy Carter - directly to AG offices.  Repeat, not to the states generally – where Governors got the money – but to AG offices specifically for consumer and antitrust work.  The offices quickly hired and set up Public Protection Divisions capable of moving quickly without going through any other state or federal agency.   

At the same time, Congress also streamed money to states for environmental purposes direct to state agencies so that states could comply with new federal laws and regulations required by evolving  federal law.   (Clean Air, Clean Water, Endangered Species, etc. ). 

Because AGs are the counsel to state environmental agencies this federal money was channeled from the state environmental agencies into the AG office budgets who then set up environmental divisions.  These lawyers assisted their client agencies draft and enforce required State Implementation Plans (SIP) that had to meet the minimum federal requirement although states were allowed to set standards higher than the EPA if they chose to do so and many did.   When in 1981 the Reagan Administration’s EPA rolled back the Carter Administration’s federal regs, most states maintained standards higher than the EPA Administrator Anne Gorsuch’s decisions.   There were lawsuits challenging independent state action, but again, the courts and the public were supportive and many of them were done through a multistate process.

The first state AG multistate efforts were therefore federally funded.  In January 1981, OMB Director David Stockman – a very smart guy who alone in DC seemed to understand the power all this gave to AGs to challenge the Reagan Administration - desperately tried to impound this money.  In other words, he attempted to recall the money that had been appropriated to the states.

In my first days in office in 1981 we sued.  Tierney v. Stockman.  We won.  He lost.  Multistate AG actions were now seriously underway.

Jurisdiction

State legislatures were supportive of AG multistate initiatives.  Being pro consumer was then popular and bipartisan with local Chambers of Commerce were supportive who wanted AG’s to get rid of the bottom feeders in their local business community.  When the federal money dried up, legislatures made up the difference.  Legislatures also supported state environmental initiatives, so the support was real and bipartisan.

Focusing on consumer and antitrust, every state legislature passed state laws giving AGs essentially unreviewable authority to unilaterally launch investigations (CID), litigate, collect fines and assess treble damages.  It also authorized private action consumer protection cases. (More below on this.)

All of it was to be presumed to be done in single state cases.  USDOJ and the FTC were supposed to do the interstate cases, but states were never specifically preempted.   When the Reagan Administration attempted to preempt curtail state action the AG’s were pushed back and responded collectively in court winning almost every time. All these cases were fully bipartisan.

Remember, the consumer laws are a state law and AG’s could go to state court – talk about forum shopping! – and generate legal fees back to the state coffers and treble damages for consumers.   Most of the state cases remained single state until technology and economic nationalization made them multistate.  But the multistate consumer litigation was and still made up of a collection of state court matters and not federal cases.  The antitrust litigation was both but is still mostly federal.

The Reagan Administration made all sorts of dumb mistakes when dealing with the states making it easy for the AGs to prevail.  With federal errors – then as now almost no one in the federal government or academia understands what it is that states do - and a supportive SCOTUS with consumers having their back, the AGs almost never lost.  Rather than defend in state courts corporate defendants figured out they should settle with relatively unsophisticated AGs and there was peace and justice and bipartisan love in the land.

The environmental cases ran parallel to consumer and antitrust. Indeed, state legislatures gave their AGs environmental authority independent of their agency to speed things along.  At the time it was popular to clean up toxic dumps and drink clean water. There were many Love Canals.  Ah, those halcyon days….

Most of the environmental multistate were challenges to Reagan EPA decisions and states began to lose – my office faced a DC panel with both Judges Scalia and Bork – but Bush ’41 was less combative, and a modicum of cooperation emerged.  

Most of the environmental cases were licensing and single state, but when when boundaries were crossed AAG’s cooperated. (I chaired the NAAG Environmental Committee.  It has long since been abolished along with the NAAG Civil Rights Committee.)  As Sen Patrick Moynihan (D-NY) said, brilliantly quoting me without attribution from my Congressional Testimony, “what goes up must come down,” and that simple logic seemed to prevail.

Economy and Technology

Then the world changed.  As our economy became driven by technology and fully integrated, violations were national in nature and AG offices were able to use technology to chase the bad guys over state lines.

Technology - In the early 1980s my staff would drive to Boston and meet with other AAG’s from New England and New York.  They would sit around and literally write – longhand – briefs that would be typed by the secretarial staff of the Ma AG.  They would then sit and collectively edit, develop strategies, and soon negotiate settlements together.

By 1990, FAX machines were appeared, and then they did it that way.  Email and website arrived five years later and, well, you get that picture!  It became very easy for AGs to operate over state lines.

Economic integration - In the early 1980’s, I sued what we laughingly called a huge “chain” of Maine drugstores for a consumer pricing violation.  There were 16 stores.  It was locally owned.  We won.

By 2000, Maine drug stores were now Wal Green and CVS and their practices were the same as every other Wal Green and CVS in the country.  

Chasing just the drug store in your state no longer made sense, and technology allowed AAG’s to discover the same violation everywhere. More and more cases were inherently multistate.  

Tobacco

Then the tobacco cases came along and we settled them all in 1995-1996.  This memo is already too long but let me just say those cases took seven years of my life – four fighting the tobacco industry and three fighting the greedy plaintiff lawyers the AG’s had hired.  Details upon request.  These cases alerted the plaintiff bar to some serious profit-making opportunities.  Details also upon request.

SCOTUS

Then SCOTUS – without realizing the impact their decisions would have on AG’s – messed up everything.

First, it abolished all campaign financing laws making dark money possible and essentially forcing the creation of the Republican AG Association (First Chair?  The Hon. Bill Pryor of Alabama) and later the Democrat AG Association.  RAGA and DAGA raise a great deal of money and are now obviously now bigger and stronger and less transparent than ever.

Second, SCOTUS virtually abolished consumer class action lawsuits by elevating consumer arbitration clauses.  AG offices still had their UDAP authority so this forced matters that had been the subject of private suits into AG offices where AGs could deputize plaintiff counsel on a contingent basis. 

And with no campaign limits the AG found an increased love for dark money and trial lawyers.  Put this together – technology, economic integrations, no campaign finance laws, a dysfunctional Congress – and every AG from any state became a national player.

Of course, everyone in the AG world knows this to be true – it isn’t a secret! -  and we now have a hybrid system that defies uniform characterization.  The public protection divisions of some AG offices have shrunk and others have grown far larger and more sophisticated. Depending on the issue they can still often need the resources of the trial lawyers.  Plaintiff lawyer retention is a totally nonpartisan effort – GOP AGs are increasingly utilizing plaintiff firms on national cases -   and they often result in large cash settlements making AG offices revenue generators for state government.  And in many states public protection staffs are funded by these settlements, an innovation championed by then Texas SG Ted Cruz.  Again, details available upon request.

And of course, this means every law firm now has an “AG practice” consisting of a gaggle of former AGs and former specialized AAG’s who lobby their former colleagues.

Everyone is an expert.

Everyone makes money. 

And I get sick.