State Attorneys General (AGs) are anticipated to significantly increase their enforcement activities throughout 2025, following a busy 2024. Insights from Morrison Foerster’s State + Local Government Enforcement team outline expectations surrounding various focus areas spanning consumer protection, environmental issues, securities fraud, antitrust actions, and cybersecurity.
The enforcement landscape under State AGs is characterised by a confluence of both bipartisan collaboration and divergent priorities stemming from varying state regulations. Carrie H. Cohen from Morrison Foerster predicts that, "State AGs have learned how to use their jurisdiction and state laws to address an extremely wide range of conduct, across industries and practice areas." This evolution has led to increased complexity in navigating differing legislative agendas. Democratic AGs might concentrate efforts on perceived gaps in federal oversight, whereas Republican AGs might focus on the priorities associated with the new administration.
A significant area of emphasis will likely be consumer protection, led by Christine Y. Wong's insights. She notes that AGs are increasingly targeting technology sector firms, especially social media platforms concerning issues of children’s online safety and privacy. Recent actions saw 42 attorneys general requesting Congress impose warnings on social media to address concerns over youth mental health. Parallelly, individual AGs have pursued litigation under deceptive practices laws, with a specific spotlight on artificial intelligence (AI). The Texas AG’s settlement with Pieces Technology, regarding claims about the accuracy of healthcare AI products, illustrates this trend. Wong emphasises that misrepresentations made by companies around their AI tools will attract scrutiny, especially as states continue to consider new legislation on the technology.
On the environmental front, William Tarantino highlights the expected expansion of AG activities as the incoming administration likely rolls back certain policies established during the Biden era. As states such as New York and California set the tone with initiatives resisting federal rollbacks, Tarantino foresees a significant uptick in enforcement actions against fossil fuel companies, climate and sustainability initiatives, and sectors such as agriculture and plastics.
In the securities realm, Edward Imperatore details the sustained focus by State AGs on protecting the investing public, particularly vulnerable populations and those involved with digital assets. The New York State Office of the Attorney General is noted as a leader in this field, having tackled cases involving asset-backed securities and cryptocurrency violations. As several states initiate "AI sweeps" targeting fraudulent investment schemes linked to AI, the need for robust investor protection measures is acute.
Antitrust enforcement remains an important focus, with Megan Gerking asserting that state's involvement in significant merger investigations will continue. Recent high-profile cases, such as those involving Jet Blue and Kroger, exemplify state AGs’ commitment to scrutinising potential anti-competitive practices. Some blue states, having proven their independence, may lead their own actions to address perceived deficiencies in federal enforcement.
Cybersecurity and privacy will also remain critical as Linda K. Clark notes a shift towards expanding state laws in the absence of federal regulations. This includes establishing more robust requirements focused on security and privacy, particularly in relation to AI applications.
Lastly, the enforcement of state False Claims Acts, as discussed by Adam L. Braverman, is poised for ongoing scrutiny, particularly in healthcare fraud claims. With states regularly collaborating with the federal government, including notable recoveries in healthcare fraud cases, 2025 is expected to bring continued cross-agency efforts in combatting fraud.
As the evolving landscape demands more intricate navigation through diverse regulations and enforcement approaches, businesses are advised to stay informed about these trends and anticipate the implications of increased scrutiny from State AGs across various sectors in the coming year.
Source: Noah Wire Services