State Attorney General Insider -- The New Cadwalader Edition
September 17, 2019 | Issue No. 1
Partner | State Attorneys General

I am proud to continue producing quarterly issues of State Attorney General Insider now that I am at Cadwalader.

Many of you have been receiving the Insider these past few years while I was at Buckley, where I spent four wonderful years. I have recently moved to a more expansive platform available to clients at Cadwalader, the United States' oldest law firm, now in its 227th year. At Cadwalader, I can combine my 22 years of government experience with the substantive and legal talent at a top-tier law firm.

In this edition of Insider, we focus on a particularly active time for state Attorneys General and update you on the activities of the National Association of Attorneys General (NAAG), the Conference of Western Attorneys General (CWAG), and the Alliance of Attorneys General, as well as the Democratic Attorneys General Association (DAGA) and the Republican Attorneys General (RAGA) conferences.

In the months to come, we hope to expand Insider and add webinars and other features. We also hope to continue to be as interactive as possible with our readership and will seek out your feedback as we make this revamped quarterly newsletter a valuable addition to your review of state Attorneys General activity.

Cadwalader’s State Attorneys General practice, led by former Maryland Attorney General and NAAG President Doug Gansler, represents clients in financial services, FinTech, healthcare, hospitality, energy, cannabis, insurance, solar, pharmaceutical, tech start-ups, automobile finance, and many other consumer-centric companies in addressing matters with state Attorneys General, as well as other state regulators.

Cadwalader partner Doug Gansler, head of the firm’s State Attorneys General practice, examines “the real shift” in the approach of today’s state attorneys general, many of whom are taking a more proactive and aggressive approach than ever before. Gansler looks at state AGs’ focus on privacy issues, pharmaceutical companies and, especially, financial institutions’ presence on the internet – an area he calls the “Wild West,” with internet lending, internet payment and internet banking.

 

Cadwalader lawyers were featured in a number of press reports related to state AG topics.

Parallel Google Probes Highlight Cracks Between Enforcers
Law360 (9/12/19)
Doug Gansler and Joel Mitnick comment on the expanding role of state AGs in pursuing large corporate antitrust and privacy probes, and how they’re diverging from the approach of federal regulators in some high-profile instances.    

State probes into Big Tech are a ‘backstop’ in case the feds back down, say antitrust experts
CNBC (9/9/2019)
Doug Gansler and Joel Mitnick share their respective views in this article about the interplay of state AGs and the U.S. government in the growing investigations of big technology business practices.  

Investigating Big Tech
CNN (9/9/2019)
Doug Gansler comments on the developing antitrust probes into big technology companies.

"The Most Valuable U.S. Tech Company Escapes Scrutiny From Regulators"
Cheddar (9/9/2019)
Joel Mitnick discusses key elements of the growing antitrust scrutiny on big tech and provides some insights on previous investigations over the years.

Google emerges as target of a new state attorneys general antitrust probe
The Washington Post (9/4/2019)
Doug Gansler comments on the potential for a bipartisan multi-state probe to influence subsequent action from the federal government.  

AGs, Carriers' Cooperation Won't Stem Robocall Litigation
Law360 (8/26/19)
Doug Gansler comments on a new information-sharing partnership between major phone carriers and attorneys general across the country expected to expedite the tracking and prosecution of robocall scammers and the networks that enable them.

Cadwalader Partner Douglas Gansler on the Growing Power of State Attorneys General
Corporate Crime Reporter (8/15/19)
Doug Gansler discusses how the power of the state Attorneys General has grown significantly in recent years.

Texas Blurs Partisan Divide In Sprint/T-Mobile Challenge
Law360 (8/2/19)
Doug Gansler and Joel Mitnick break down the implications of Texas Attorney General Ken Paxton joining the previously all-Democrat coalition of state Attorneys General challenging the Sprint/T-Mobile merger. 

Sprint, T-Mobile Approval Tees Up Rare Antitrust Courtroom Duel
Bloomberg Law (8/1/19)
Joel Mitnick comments on the parallel enforcement lawsuits in different federal courts related to the Sprint/T-Mobile merger.

States’ Lawsuit Muddles T-Mobile and Sprint Deal Plans
The Wall Street Journal (7/30/19)
Joel Mitnick comments on the legal hurdles facing the Sprint, T-Mobile merger.

3 Issues That Will Control The Coming Sprint/T-Mobile Battle
Law360 (7/29/19)
Joel Mitnick comments on the T-Mobile/Sprint $56 billion merger and its coming clash with more than a dozen Democratic state Attorneys General.

Buckley Partner Heads to Cadwalader to Launch State AG Practice
The American Lawyer (6/7/19)
As some government enforcement has shifted to the states, Doug Gansler said he expects that many of Cadwalader's existing clients will benefit from the new practice.

Partner | State Attorneys General

Here are a few of the major cases of interest within the state Attorneys General community that are receiving significant press coverage .  

Purdue Pharma Reaches Deal With Cities, 23 States Over Opioid Crisis

Purdue Pharma LP has reportedly reached tentative agreements with 23 states and three U.S. territories on a multibillion-dollar deal that will enable the drugmaker to resolve much of the opioid litigation it faces through a planned bankruptcy, according to The Wall Street Journal and other news sources. Purdue, the maker of OxyContin, is owned by the Sackler family. The settlement is reportedly valued at between $10 billion and $12 billion, but some states opposing the deal have raised reservations about its value. A number of states oppose the deal, led by New York and including California, Connecticut, Maine, Massachusetts and New Hampshire, according to press reports.  

Attorneys General File Brief Supporting California’s Ban on Large-Capacity Magazines

District of Columbia Attorney General Karl A. Racine led a coalition of 18 state Attorneys General to preserve California’s ban on large-capacity magazines that hold more than 10 rounds of ammunition. A group of gun owners and a California arm of the National Rifle Association filed a lawsuit opposing the ban. In April 2019, a U.S. District Court declared the law unconstitutional. On July 22, attorneys general filed a friend-of-the-court brief in the United States Court of Appeals for the Ninth Circuit, and argued that the Second Amendment authorizes the states to address gun violence in this manner in furtherance of protecting public safety. 

Texas Attorney General Ken Paxton Announces the Largest Data Breach Settlement with Equifax

On July 22, Texas Attorney General Ken Paxton led a coalition of 50 attorneys general to reach a $600 million data breach settlement with Equifax, one of the nation’s three major credit reporting agencies. The settlement is the largest data breach settlement in history and requires Equifax to implement and maintain a rigorous and comprehensive data security program.  In September 2017, Equifax revealed electronic files had been breached, resulting in the information of 147 million people being unlawfully accessed. The agreement also requires Equifax to pay between $300 million and $425 million into a consumer restitution settlement fund, $175 million to the 50 attorneys general and $10.9 million in penalties, fees and costs to Texas.

Coalition Led by Attorney General Kwame Raoul Reaches Settlement with LexisNexis

On July 2, Illinois Attorney General Kwame Raoul announced that Illinois, along with four other states, and the city of Baltimore reached a $5.8 million settlement with LexisNexis Risk Solutions Inc. (“LexisNexis”). Along with AG Raoul, attorneys general of Massachusetts, New Jersey, New York and Tennessee carried out  an investigation that uncovered that LexisNexis wrongfully withheld fees from Illinois law enforcement agencies when reselling the agencies automobile crash reports. Contractually, LexisNexis was required to compensate the agencies on each report sold. However, the investigation discovered that LexisNexis paid the agencies for only the first time it sold a report.

Here's an update on upcoming state AG races in Kentucky, Louisiana and Mississippi.

The states of Kentucky and Mississippi will elect a new Attorney General on November 5. Kentucky's election will feature Daniel Cameron (R) and Greg Stumbo (D). In Mississippi, the candidates are Jennifer Collins (D) and Lynn Fitch (R). 

In Louisiana, the incumbent, Jeff Landry (R), will face off against Ike Jackson (D) on November 16.

In May, NAAG held its Southern Region meeting focused on recent trends for state Attorneys General in the cybersecurity and privacy space. Arkansas Attorney General Leslie Rutledge hosted the meeting which kicked off with Tennessee Attorney General Herbert H. Slatery III moderating a panel on the increased use and collection of consumer data and resulting privacy and security issues. Of note, as privacy and security concerns clash, going forward we will see the enhanced use of encryption.

In outlining vulnerabilities exploitable by hackers, a panel discussed how data breaches of companies with poor security systems could lead not only to threats to consumer privacy but also significant liability for the company. Alabama Attorney General Steve Marshall moderated the panel exploring the panoply of corporate responses to cyber threats and data privacy and ways to reduce that exposure.

Former Arkansas Attorney General Dustin McDaniel led a panel discussing the cybersecurity challenges that state and local governments themselves face. Notably, studies show that state governments often lack the expertise to remedy weaknesses in their data protection systems. 

Texas Attorney General Ken Paxton moderated a panel on the states’ enhanced role in protecting medical privacy. In the past, much of the focus has been on the exploitation of personal financial information (PII), yet compromised personalized consumer health information (PHI) can be extremely dangerous or even fatal. Panelists discussed the role of state Attorneys General in investigating health care providers that violate the Health Insurance Portability and Accountability Act of 1996 (HIPAA).

The conference closed with remarks by United States Attorney J. Cody Hiland on federal responses to a cyberattack.

Over 20 Democratic Attorneys General attended DAGA’s 2019 summer policy conference in Denver, Colorado. DAGA members celebrated their success in securing a Democratic majority of state AG seats in the 2018 elections. In the 2018 elections, four states – Wisconsin, Nevada, Colorado, and Minnesota – switched from Republican to Democratic leadership. Consistent with Democratic Attorneys General increasing challenges to the federal government, DAGA members heard from leaders on social policy issues from the National Immigration Law Center, Legal Aid Society of New York, and Open Society regarding the protection of vulnerable communities. 

In what is traditionally the major event of the year for the state Attorneys General community, CWAG met in Santa Barbara for its annual summer meeting where once again attendance neared one thousand people. On the agenda was online sports betting, cryptocurrency, cannabis regulation, opioids, tax implications of multistate settlements, e-commerce, and water issues. Off the agenda, discussions and meetings revolved around a multistate involving the hospitality industry and the reactions of the state Attorneys General to the Sprint/T-Mobile merger, national efforts to resolve the opioid lawsuits, and the proliferation of e-cigarettes. Being in California, FinTech and social media companies had an increased presence.

South Carolina Attorney General Alan Wilson moderated a panel on the ramifications of DOJ’s recent opinion on the application of the Wire Act of 1961 on the gaming industry. The panel examined the potentially harmful impact DOJ’s opinion may have on state-operated lotteries, online gambling, intrastate gambling, and brick-and-mortar casinos.

CWAG also held several panels related to trends in the cannabis industry, as well as the booming CBD and hemp industries.  District of Columbia Attorney General Karl Racine moderated a panel examining the Canadian and U.S. regulatory response to the marijuana industry. Oregon Attorney General Ellen Rosenblum led a panel that took a deeper dive into cannabis research, the regulatory landscape and the increase in drivers driving while on drugs.

One of the best-attended panels was the General Counsel Roundtable, featuring Pfizer General Counsel Doug Lankler, Home Depot General Counsel Teresa Wynn Roseborough, and JP Morgan Chase General Counsel for Consumer Lending Stephen Simcock.  Deputy General Counsel for the Recording Industry Association of America Vicky Sheckler discussed the challenges the music industry faces in protecting its copyrighted works from online infringement. 

Illinois Attorney General Kwame Raoul moderated a panel that attempted to grapple with the difficult hurdles regulators face in cryptocurrency and blockchain technology.   

Idaho Attorney General Lawrence Wasden moderated a panel that attempted to tackle the tricky issue of ensuring access to credit to middle class and disadvantaged populations. While demand for access to credit grows and the internet provides portals to that credit, state regulators often still rely on antiquated laws that seemingly hamstring disruptive companies around issues of interest rates and credit history.

Other panels at the conference included discussions on opioid intelligence and solutions, mental health issues, hate crimes, artificial intelligence, FinTech innovation and regulation, and data security and privacy.

West Virginia Attorney General Patrick Morrisey hosted the RAGA Summer National Meeting, which included speeches by West Virginia Governor Jim Justice and former White House Press Secretary Sarah Huckabee Sanders. Republicans, who currently hold 24 seats, showcased their candidates for the 2019 election where they hope to regain the majority by picking up the two contested seats this year, in Mississippi and Kentucky. Current Democratic Attorneys General Jim Hood and Andy Beshear have relinquished their seats to run for governor of those states.

The hallway discussions focused on the perceived irony of Democratic Attorneys General now prosecuting cases against Silicon Valley technology companies as well as the opioid litigation being brought by Oklahoma Attorney General Mike Hunter.

On September 4-6, the Democratic state Attorneys General convened in Manchester, Vermont, hosted by the affable Vermont Attorney General T.J. Donovan. While the panel topics included "Ending the Sexual Assault Kit Backlog," hosted by North Carolina Attorney General Josh Stein, and "State Approaches to Healthcare," hosted by Oregon Attorney General Ellen Rosenblum, most of the buzz focused on the impending multistate antitrust investigation of Big Tech, including Facebook, Apple, Google and Amazon. Of interest, much of the dialogue in the hallways and outdoor decks raised the very profound concerns of why Democrats are now taking on Silicon Valley. In addition, much of the pushback addressed the very flimsy legal theories of state Attorneys General seemingly attacking privacy concerns through state antitrust statutes. Finally, the issue that has dominated the state Attorney General sphere for the past few years – opioid litigation – emerged again following the extraordinarily surprising verdict against Johnson & Johnson in a bench trial in Oklahoma based on a novel public nuisance theory. While the verdict emboldens the Democratic state Attorneys General, caution was voiced by many since the state Attorneys General are bringing their claims under state consumer protection and unfair and deceptive practices acts.

RAGA 20th Anniversary Celebration
September 24
Washington, D.C.

NAAG Consumer Protection Conference
November 5-7
Omaha, NE

RAGA Fall Conference
November 17-18
Scottsdale, AZ

DAGA Fall Conference
November 20-22
New Orleans, LA

NAAG Capital Forum
December 9-11
Washington, D.C.

Key Contacts

Douglas Gansler
Partner
T. +1 202 862 2300
douglas.gansler@cwt.com

 

Ellen Holloman
Partner
T. +1 212 504 6200
ellen.holloman@cwt.com

Jodi L. Avergun
Partner
T. +1 202 862 2456
jodi.avergun@cwt.com

 

Joel Mitnick
Partner
T. +1 212 504 6555
jodi.avergun@cwt.com

Jason M. Halper
Partner
T. +1 212 504 6300
jason.halper@cwt.com

 

 

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