F.R. Duplantier reporting Behind The Headlines
Week of:
November 26, 2000
State Attorneys Generals Are NAAGS

F.R. Duplantier

by: F.R. Duplantier

Is this the strategy of a law enforcement officer or a shakedown artist? "Target a prominent industry with deep pockets. Make sure it's not politically popular. Then reap the financial and political benefits."

The National Association of Attorneys General (NAAG) is "a quasi-government 'cartel' of state attorneys," charges Ronald Nehring of Americans for Tax Reform. "Many have political agendas and aspirations for higher office," he notes. "They have found that it is to their advantage to work together to target American companies for lawsuits and extract enormous settlements."

In a recent issue of Organization Trends, a monthly publication of the Capital Research Center, Nehring reports that "NAAG activities dovetail with the suits of trial lawyers and demonstrations of social activists. They are central to a national effort to regulate American businesses not through legislation but through massive litigation," he remarks. "Faced with a Republican Congress less inclined to support more government regulation of the economy, NAAG's members, led by Mississippi Attorney General Mike Moore, have learned the game of 'regulation through litigation.' Their campaign against the tobacco companies taught them lessons that they can use against other industries."

Nehring worries that "NAAG's legislation through litigation set a terrible precedent and distorted the traditional emphasis of tort law. The states' suits," he emphasizes, "were originally filed to 'recoup' losses states incurred by providing health care to victims of tobacco-related illnesses. But in order to arrive at the settlement, the attorneys general twisted the legal process in ways that pose serious dangers for all consumers."

Noting the more than $10 billion "paid to contingency-fee lawyers hired by NAAG members," Nehring charges that the "legislation through litigation" strategy of the state attorneys general is an underhanded but effective campaign fundraising technique. The attorneys general "turn a portion of their government work over to private law firms, which collect huge contingency fees, part of which is then fed back to the attorneys general as campaign contributions," he explains. "The attorneys general benefit politically from the system they created, while consumers pay higher prices for goods they buy. The system feeds its own expansion."

Nehring reports that "many attorneys general deliberately seek out glitzy cases which can raise their voter profiles. A prime example," he says, "is state lawsuits against Microsoft for anti-competitive practices." Nehring warns that "a major victory for NAAG members against Microsoft could open the floodgates for their tort lawyer allies. They are already filing other class action lawsuits that cite the rulings handed down thus far in the government's case against Microsoft. As with tobacco," he notes, "if such civil cases against Microsoft are successful, contingency fee attorneys stand to make millions."

Nehring affirms that state attorneys general "do have valuable insight to contribute to lawmakers on the methods of law enforcement. But," he emphasizes, "decisions on state regulation of business are reserved to the legislative branch. Ordinary Americans will pay dearly for the regulation by litigation that NAAG promotes," he predicts. "Consumers will pay higher prices for cigarettes, software, health care, and other products as the cost of NAAG-inspired corporate shakedowns is passed along."

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