The year 2024 remained a busy one for state attorneys general (State AGs) and 2025 promises to be even busier. To assist in-house counsel, compliance professionals, and defense lawyers navigate the 2025 State AG enforcement landscape, we tapped members of Morrison Foerster’s State + Local Government Enforcement team from across the firm’s practice and industry groups for a preview of what to expect from State AGs in 2025.
Stay tuned for a series of podcasts where our team will do a deep dive into each of the topic areas that we expect to receive increased State AG focus in 2025.
General Predictions on State AG Enforcement – Carrie H. Cohen
While the structures and powers of State AGs vary by state, what is true across the board is 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. In almost every area, State AGs will continue to pursue wide-reaching and broad investigations. For many of the Democratic AGs, this focus may include areas where there are perceived gaps in or relaxation of federal regulation. For many of the Republican AGs, this focus may include priority areas of the new administration. But, importantly, there will continue to be many investigations where the State AGs work together through multi-state initiatives to address areas of shared priority. Unfortunately, the complicated risks presented by needing to navigate different enforcement priorities by State AGs who employ different laws and have varying investigative and enforcement authorities are predicted to only increase in the coming year.
Consumer Protection – Christine Y. Wong
Given the broad impact that emerging and evolving technologies have on consumers, we anticipate that State AGs will continue to use their consumer protection statutes to focus on the technology sector. To start, we expect that State AGs will continue to target social media platforms, particularly related to children’s online safety and privacy. Concurrent with the collective effort by 42 attorneys general to ask Congress for surgeon general warnings to be placed on social media platforms because of their perceived impact on youth mental health, State AGs have sued social media platforms pursuant to state unfair and deceptive practice laws, as well as new laws targeting use of social media by youth. These legislative and litigation efforts will continue, along with State AGs’ significant interest in new technologies, such as AI. States, including California and Massachusetts, already have issued advisory guidance on the development of artificial intelligence (AI) technology. Other state attorneys general have sought to apply traditional deceptive practice claims to AI technology, including, as an example, the Texas AG’s settlement with Pieces Technology related to deceptive claims about the accuracy of its healthcare AI products. We anticipate that State AGs will focus on allegations, particularly by consumers, of misrepresentations by companies about the power and efficacy of their AI tools. Given the evolving nature of the technology, State AGs will likewise continue to be engaged in state legislative and policy development in this area. Lastly, we anticipate that State AGs, as a reflection of bipartisan concerns about China, will continue to seek to enforce consumer protection laws against Chinese technology companies, particularly those operating social media or using AI. The Arkansas AG, for example, has sued Temu, calling it a “data-theft business,” alleging that it “is functionally malware and spyware” and “raises significant security risks.” While the State AGs will continue to broaden the scope and use of their consumer fraud statutes as applied to social media and AI, they also will continue to be active in all aspects of consumer product safety, including filling any gaps, real or perceived, that may result from decreased federal regulation.
Environmental – William Tarantino
With the incoming administration promising to pull back or reverse many of the Biden administration’s climate and energy policies, State AGs are expected to fill the perceived void created by inaction at the federal agency levels. While the more active State AGs in the larger states, namely, New York and California have made broad pledges to “resist” efforts to roll back certain environmental and climate policies, increased State AG enforcement action across the country and on both sides of the political aisle is expected for 2025. While State AGs have been active in bringing actions against the fossil fuel industry for wildfires, erosion, and other claimed effects of a warming planet for some time, enforcement and nuisance-type claims are expected to increase against different climate and sustainability targets, such as aviation, Big Agriculture, and plastic producers. For states that have enacted climate disclosure rules, State AGs will likely increase their enforcement and legislative activity, especially as the U.S. Securities and Exchange Commission (SEC) Climate Disclosure rules are expected to be revised, if not withdrawn, given ongoing litigation and uncertainty under a new administration. Similarly, the current administration’s focus on certain persistent fluorinated chemicals, known as PFAS, will likely be pulled back and replaced by patchwork state-level regulatory and enforcement actions. With the new administration guaranteeing fast environmental approvals for big projects, state environmental enforcers and regulators will be laser-focused on any federal “fast tracked” environmental approvals within their borders. And finally, with anti-ESG sentiment on the rise, and against the backdrop of an administration that has railed against various aspects of ESG, we expect certain State AGs to increase scrutiny of investments, universities, and other entities that seek to prioritize sustainability principles or climate-conscious investment practices.
Securities Fraud – Edward Imperatore
State AGs are expected to continue robust securities enforcement across industries to protect the investing public, particularly the elderly and vulnerable and investors in digital assets. The New York State Office of the Attorney General (NYAG), drawing from its sweeping statutory authority to investigate and bring both civil and criminal securities enforcement actions, remains a leader in securities enforcement. Recently, the NYAG has brought sophisticated investor-protection actions in a wide array of industries, including actions for alleged misrepresentations in the sale of asset-backed securities and alleged fraud in the offering of real estate securities. State AGs have also focused on aggressive enforcement efforts involving digital assets and financial technologies. State AGs in New York, California, and Maryland have charged cryptocurrency issuers and exchanges for violating state securities laws. In addition, several state AGs, including in California, have engaged in “AI sweeps” to target fraudulent investment schemes purportedly generated by, or tied to, AI. We expect this enforcement focus on digital technologies will continue. Finally, State AG securities enforcement actions increasingly result from tips, investor complaints, and referrals from other agencies. For example, State AGs are receiving significant referrals from the SEC and the Financial Industry Regulatory Authority (FINRA), signaling coordination between federal and state securities enforcement.
Antitrust – Megan Gerking
State AGs have played an increasingly active role in antitrust enforcement in recent years, both alongside and apart from their federal counterparts. This year will likely see both continuity and change and we expect states to continue to be active participants in major merger and conduct investigations and litigation, but the precise mixture of issues and industries may change alongside their relationship to the new administration.
Cybersecurity/Privacy – Linda K. Clark
With the continued lack of a federal omnibus privacy law in the U.S., states will look to expand the scope of their laws by focusing on security-by-design and privacy-by-design requirements, broadening the kind of data their laws cover (i.e., to include neural data and issues related to AI and deep fakes), and by giving themselves additional enforcement powers. We will expect privacy laws to fall along ideological lines; for example, some states will introduce additional protections for data regarding gender identity, sexual orientation, and reproductive healthcare.
State False Claims Act – Adam L. Braverman
Most states have adopted their own version of a False Claims Act (FCA) statute to investigate allegations of fraud on the government and State AGs have used those statutes often in conjunction with their consumer fraud protection statutes as well as working with DOJ to target certain industries, such as healthcare. For instance, since 2000, the Texas AG has used that state’s Medicaid Fraud Prevention Act—an FCA-style Act—to recover approximately $2.5 billion for Texas taxpayers. In 2024, the New York AG, working with the United States Attorney’s Office for the Eastern District of New York, secured a $17 million settlement from healthcare agencies for alleged healthcare fraud under the New York FCA and the federal FCA. The California AG similarly secured a $7.7 million settlement for alleged conduct by with U.S. Healthworks for keeping millions of dollars in the form of patient balances due to overpayment as a result of insurance payments. And the Florida AG recovered nearly a $600,000 settlement in an action with the Minnesota AG and the federal government against a chronic disease healthcare provider for alleged violations of the federal FCA and Minnesota’s and Florida’s respective FCAs. In yet another multistate action, the Florida AG working with the North Carolina and Virginia AGs as well as the federal government, secured a $500,000 settlement from healthcare companies alleged to have submitted false or fraudulent claims for laboratory testing to Medicaid and Medicare in violation of the federal FCA and the states’ respective FCAs. In 2025, we expect State AGs to continue to work closely with each other and the federal government to investigate and resolve claims of alleged healthcare fraud under FCA and other statutes. One area in particular that may see increased activity is the use of these statutes to investigate third-party investors, such as private equity and venture capital firms, that invest in healthcare companies. DOJ increasingly has been using the federal FCA as a tool to investigate such firms and we expect State AGs to follow suit.