The National Association of Attorneys General recently came under scrutiny for its funding sources. Outside of membership dues paid by state attorneys general, the organization also receives funds from litigation settlements, calling into question the nonprofit status of the organization given that they seem to be operating more like a plaintiff’s law firm.
The American Tort Reform Association has now released a report highlighting these connections and calling for more transparency from the organization. Historically, NAAG played an influential role in managing multistate investigations and lawsuits. But over time, NAAG’s focus has shifted from promoting efficiency and coordination to instead promoting entrepreneurial litigation targeting industries of all sorts.
Over the past few decades, NAAG has played a significant role in some of the most prominent mass tort lawsuits. Its targets have included tobacco manufacturers, and most recently, opioid manufacturers and distributors. NAAG fully participates in settlements reached in these multistate lawsuits, just as individual states and their for-profit, contingency-fee counsel do. This places what once was an independent association in a situation in which it now appears to have profit as an overriding motive when it helps to initiate and settle litigation, just as the trial bar does.
Given that the most recent target of NAAG’s litigation machine has been opioid manufacturers and distributors, it’s important to note that the bad actors must be held accountable for their role in the opioid crisis. But this begs the question: Are these attorneys general targeting the wrong people and companies to benefit the trial bar and their own coffers? 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.
It’s not just one party, either — opioid lawsuits are being pursued by NAAG members of all political stripes, such as Washington state’s Democratic Attorney General Bob Ferguson and by Republican Attorneys General Ashley Moody in Florida and Patrick Morrisey in West Virginia. It’s worth noting that Moody holds a leadership role within NAAG. This calls into question the states’ motives for pursuing litigation rather than addressing the real problem — the illicit drug crisis at our nation’s border that’s fueling the opioid epidemic and ravaging their respective states.
Further, both Morrisey and Ferguson opted out of settlements reached between virtually all states and the manufacturers in order to go to trial. This raises the question of whether the trial bar and outside counsel utilized by these attorneys general could be influencing these decisions. After all, personal injury lawyers regularly attend NAAG meetings and participate in educating and training attorneys general on best litigation practices. This has created an apparent codependent relationship between the trial bar and these elected officials. These training sessions illustrate just how influential NAAG is as attorneys general make determinations on whether to pursue litigation against industries in their respective states.
Outside groups seeking influence by embedding and paying the salaries of activist lawyers in the offices of state attorneys general and other government offices is nothing new, but this practice is another issue that should be more thoroughly scrutinized. For instance, Michael Bloomberg’s nonprofit organization received attention in 2020 for its role in embedding attorneys on the staffs in attorney general offices for the specific purpose of bringing environmental and climate change lawsuits, a practice that continues today.
Now, NAAG is moving in the same direction as it promotes coordinated mass tort litigation. NAAG members participate in working groups that focus on potential multistate lawsuits. Their activities include information-sharing agreements between state attorney general offices as well as monthly phone calls to discuss investigations. NAAG then offers “lead” states the opportunity to recruit other states to join specific litigation. Finally, NAAG provides grants to states to help litigation get off the ground. That way, attorneys general don’t have to use appropriated funds, which make them accountable to their respective legislatures.
Outside influence, whether it is from NAAG or other activist organizations, creates a concerning lack of accountability and transparency in state attorney general offices. This troubling trend should be of concern to not only businesses and industries that could find themselves a target of such litigation but all who care about good governance and transparency.
Sherman “Tiger” Joyce is president of the American Tort Reform Association.
