A Nonprofit That Acts Like a Plaintiffs’ Firm
The National Association of Attorneys General (NAAG) was founded in 1907 as a nominally independent association as a way for state AGs to coordinate shared antitrust cases.[1] Historically, the Association has played an influential role in managing multistate investigations and lawsuits. Over time, however, NAAG’s focus has shifted from promoting efficiency and coordination to instead promoting entrepreneurial litigation targeting a variety of industries – similar to the mission of the mass torts plaintiffs’ bar.
NAAG has had a significant role in some of the most prominent mass tort litigation over the past few decades. Its targets have included manufacturers of tobacco, and most recently, opioids. The Association fully participates in settlements reached in multistate lawsuits, just as individual states and their for-profit, contingency-fee counsel participate. Interestingly, this places what once was an independent association in a situation in which it now has profit as a main motive to help initiate and settle litigation, just as the trial bar does.
For example, in March 2021, NAAG received $15 million as part of McKinsey’s $600 million settlement for the company’s role in marketing opioid prescriptions.[2] NAAG also received $103 million that grew to $140 million from the landmark Tobacco Master Settlement Agreement.[3]
NAAG essentially acts as a self-sustaining litigation machine, mainly funded by two revenue sources: yearly dues from state attorneys general of approximately $70,000 per state, per year[4]; and carveouts from multistate litigation settlements.
NAAG’s programs, operated through these funds, seem to be tailored specifically to promote litigation against business – attorneys in state AGs’ offices are trained under NAAG programming to bring more cases against other industries.[5] These training sessions are designed to help AGs be more effective in litigation. NAAG’s targeted training and support of state AGs offices is similar to that of other activist groups looking to influence and promote litigation in AG offices. For example, the Bloomberg-funded State Energy & Environmental Impact Center at New York University School of Law is designed to further litigation by placing lawyers funded by the Center in the offices of friendly attorneys general across the country, empowering them to bring climate change litigation. However, outside influence, whether it be from NAAG or other activist organizations, creates a concerning lack of accountability and transparency in state attorneys’ general offices.
To promote coordinated mass tort litigation, NAAG members also participate in working groups that focus on potential multi-state lawsuits. Their activities include information sharing agreements between state AG offices as well as monthly phone calls to discuss ongoing investigation. NAAG then offers lead states the opportunity to recruit other states to join specific litigation.
Additionally, plaintiffs’ lawyers often hold training sessions at NAAG conferences in which they discuss best practices for pursuing mass torts. It is an excellent business development opportunity for these plaintiffs’ lawyers because many of them will later look to be hired on a contingency-fee basis once the AGs initiate lawsuits.
In the early stages of litigation, NAAG provides grants to the states to help litigation get off the ground. Currently, NAAG has more than $200 million in assets. States receive grants to fund research and other expenses needed to determine participation in a multistate lawsuit. Any state seeking NAAG funding must submit a detailed memo outlining their legal strategy, expenses, and predicted results. States are required to repay the grant if there is a settlement regardless of whether the settlement terms stipulate reimbursement to NAAG.[6]
Utilizing this sort of funding source for litigation allows AGs to avoid using state-appropriated funds – or having to go to the legislature for more funds. This funding side-step weakens potential checks and balances a legislature may want to exercise in these situations.
NAAG continues to find new targets, from the tobacco litigation of the 1990s to the opioid lawsuits of today. While the opioid lawsuits begin to wind down, NAAG is now forming working groups on climate change and environmental issues like PFAS, eyeing a new generation of potential mass tort lawsuits.[7] Given the new NAAG focus on mass tort profit motive, it’s only a matter of time until they move into new areas of focus.
The following report provides additional information about the innerworkings of NAAG along with supporting background and research.
[1] Rachel M. Cohen, “The Hour Of The Attorneys General,” The American Prospect, Spring 2017.
[2] O.H. Skinner, “Payouts To Victims, Not Special-Interest Groups,” Washington Times, 3/3/21; https://www.washingtontimes.com/news/2021/mar/2/payouts-victims-not-special-interest-groups/.
[3] Daniel Fisher, “The House Tobacco Built,” Forbes, 8/14/08.
[4] Sean Ross, “Alabama Becomes First State To Leave National Association Of Attorneys General — ‘Going Further And Further Left’,” Yellowhammer News, 4/26/21.
[5] “Events & Training,” National Association Of Attorneys General, Accessed 1/27/22.
[6] “Janssen Settlement Agreement,” Office Of The Texas Comptroller, 7/21/21.
[7] “Clean Energy Issues Are On The Docket For State Attorneys General,” New York University, 10/3/19.
Pennsylvania lawmakers introduced liability reform bills to tackle lawsuit abuse. Proposed changes aim to enhance job creation and economic stability by limiting excessive litigation costs.
It’s time to pull back the curtain on third-party litigation financing and restore balance to our courts.
Lawsuit Abuse Awareness Week prompts reflection on Arizona’s civil justice system, highlighting excessive tort costs harming small businesses, job loss, and economic growth.
This week is aimed at educating both the public and our government leaders about how excessive litigation drains resources from businesses, stifles innovation, and ultimately hurts consumers and job creation.
By fostering understanding and promoting smart reforms, we can help create a more balanced civil justice system that serves all citizens.
The Pelican State deserves a judicial system that stands firmly on principles — not one swayed by the most recent political winds.
