States Could Resist 'Unusual' DOJ Preemption Attempts, Says ANA Panel
CHICAGO -- It’s unusual for DOJ to be weighing state preemption in a public inquiry, said a former DOJ official on a panel about the second Trump administration during the Association of National Advertisers (ANA) ad law conference Monday. A former lead counsel in North Carolina’s attorney general's office suggested such an effort is unlikely to succeed, even as Democratic states seek to fill a regulatory void opened by the current federal government.
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DOJ and the National Economic Council asked in August for help identifying state laws “that significantly and adversely affect the national economy or interstate economic activity.” In comments received in September, some industry members asked DOJ to scrutinize the Maryland Online Data Privacy Act (MODPA) and other privacy measures (see 2509220061). While businesses and others have long called for Congress to pass a consumer privacy law, a national statute has been elusive. In the meantime, 20 states have enacted comprehensive privacy laws.
Asked if DOJ could try to weaken state enforcement, WilmerHale’s Brian Boynton, who led the U.S. DOJ’s civil division from 2021-2025 during the Biden administration, said it’s “unusual … for DOJ to be doing a rulemaking that purports to preempt state law. That doesn’t happen very often. So, if nothing else, it will be unique.”
“States’ consumer protection authority is really deeply rooted,” said Swain Wood, also of WilmerHale, and who, from 2017-2023, was general counsel to then-AG Josh Stein (D) of North Carolina. “If there was an aggressive federal effort to somehow challenge states’ ability to enforce their consumer protection statutes … it might have some success around the edges,” but it’s “hard to imagine the federal government really deeply invading states’ prerogatives on that, especially with this Supreme Court.”
WilmerHale’s Frank Gorman, a veteran of the FTC for nearly three decades, noted “unprecedented structural changes” at the federal level, including an FTC that no longer refers to itself as independent and effectively shuttering the Consumer Financial Protection Bureau.
Boynton added that independent agencies could soon be a thing of the past, since U.S. Supreme Court watchers expect a reversal of Humphrey’s Executor v. U.S. Also, the lawyer noted that DOJ has deprioritized consumer protection, with the Civil Division failing to specifically list it among its top issues in a June memo.
However, with the weakening of federal agencies comes the strengthening of state enforcers, said Wood. Unlike independent agencies, “states have enormous constitutional stature,” he said. And so “what these dynamics over the last few months have led into is a recognition by state attorneys general that they have really broad authority to step into a lot of areas that for the last 75 years or so have been regulated by the federal government.”
And although there are more Republican than Democratic AGs in the states and the District of Columbia, the 28-23 partisan balance doesn’t matter because, unlike in Congress, the majority can’t do anything collectively or stop any single member from acting, said Wood. Privacy and data security have remained bipartisan issues for state AGs, he noted.
Wood also mentioned a trend of AG offices hiring outside counsel for cases. Texas did so during a recent investigation that led to a $1.375 billion settlement with Google (see 2510310005). The trend is worth watching because it could signal a shift of state AGs seeking monetary penalties rather than just getting an injunction, Wood added.
“I expect [the trend] to grow until there’s … pushback,” Wood said. After states’ settlement with Big Tobacco in the '90s, about half the states enacted limits on fees outside counsel could receive in such cases, but it hasn’t “really dampened” hiring outside counsel. “Because if you're talking about a billion dollar settlement … even 15% of that is a lot of money.”