Quick Guide: State AGs and Feds: The Dynamics of Influence and Collaboration

 “Global peace” may be elusive, but there are times when companies under investigation may gain a strategic advantage by proposing that states and feds work together.  In this podcast episode, Cozen O’Connor State AG Group partners Chris Allen, Maria Colsey Heard and Siran Faulders discuss the impact of collaboration between state and federal agencies with respect to regulation, enforcement, rulemaking and interpretation of statutes, and lift the veil on when collaboration makes sense and why.

Chris introduces himself and his partners, Siran Faulders and Maria Colsey Heard.

(1:55) Siran describes her background in the VA AG’s office and Maria talks about the history and growth of the Cozen O’Connor State AG practice.

(3:52) Chris sets the table by laying out why state AGs matter, sources of AGs’ authority and the reality that they are highly influential on their federal counterparts when it comes to regulations, enforcement, rulemaking, interpretation, and general oversight of business conduct.

(6:17) Siran talks about some of the areas that are most ripe for cooperative efforts between state and federal agencies, including debt collection, protection of vulnerable populations, healthcare and data privacy.

(9:17) Maria weighs in on the importance of state/federal collaboration for fighting bad actors not just nationally but also globally. She mentions the 2021 AMG Capital decision preventing the FTC from seeking equitable monetary relief, thus providing a further incentive for them to work with state AGs, in addition to the fact that state AGs can bring local, direct face-to-face interaction with consumers to bear.

(13:18) Siran adds that many AG offices have expanded and hired investigators to conduct undercover investigations.

(14:31) Chris points out that as elected officials, state AGs have an even greater need to be reactive to consumer concerns, and have tools not available to federal agencies for achieving desired outcomes.

(16:29) The group explores how collaboration actually takes place, and situations in which it may be strategically advantageous for businesses to foster federal/state collaboration.

(20:54) When that collaboration doesn’t happen, Siran describes how most-favored nation clauses may be requested in multistate negotiations to ensure that all regulators obtain relief at the level of the “most-favored” party.

(22:15) Maria illustrates the extent and nature of bipartisan coordination using several examples, including that of rental listing platform Roomster, where the FTC joined both Democratic and Republican AGs to stop the company from duping consumers with fake reviews.

(25:30) Siran backs up Maria’s consumer protection examples by describing the coordination in the antitrust arena between the U.S. Department of Justice, Democratic and Republican AGs in reviewing the merger of JetBlue with Spirit Airlines.

(28:37) Chris warns businesses against assuming that pro-business Republican AGs will be less inclined to investigate consumer harm than Democrats, or that a state that switches from blue to red will abandon investigations it has already begun. Cooperation and investigations will continue because the career movement of individuals working in state and federal agencies builds deep relationships, as well as a desire to follow through on cooperative efforts.

(31:04) Maria draws back the curtain on how collaboration between states and, for example, the FDA, with its deep well of subject matter expertise but generally viewed as a regulator rather than an enforcement agency, can strengthen the penalty hammer.

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