Risk and compliance teams are familiar with potential enforcement from federal regulators. But action from state attorneys general (acting alone or in coalition) can take the unsuspecting business completely by surprise. And in recent years, those actions have grown more frequent, and the penalties more severe.
State attorneys general (state AGs) have broad authority to influence a company’s operations as they operate under an undefined statutory mandate to stop “unfair or deceptive practices.” In recent years, state AGs have utilized the breadth of this authority to address perceived consumer harms on the national level against a variety of industries—many of which were focused on federal regulation, but unconcerned about regulators at the state level. Now, companies in highly regulated industries with frequent or high-impact consumer interactions must evaluate the role that state AGs play and their potential business impact.
Predicting areas of enforcement ripe for state AGs remains difficult because each of the 56 state and territory attorneys general has different policy priorities. Companies should be wary, as handling even a single AG investigation is costly and requires substantial time, energy and legal resources. Multistate investigations only make matters more complex and…
