Staying Atop State AG Action Means Engaging Early, Studying Risk

A new Trump administration, supported by a Republican Senate and House majority, will likely usher in significant legal and policy changes. State attorneys general, known for their broad litigation powers and prominent public profiles, will play a critical role in this evolving regulatory environment over the next year and beyond.

As a new political era dawns, businesses must be forward-thinking about what such changes mean for national regulatory policy and the potential for AGs to influence that policy. Businesses can better position themselves by monitoring AG actions, setting up regular risk assessments, engaging with AGs early, and collaborating with industry peers.

AGs have pooled their considerable resources into multistate investigations and lawsuits involving dozens or even all states. These efforts have grown and targeted a broader number of industries, creating a de facto parallel regulatory body that weighs in on a wide range of issues, including consumer protection, antitrust matters, and data privacy.

Partisan AG alliances have pursued multistate actions with a political valence, challenging or supporting federal agency rulemaking and executive actions. During the Obama administration, Republican AGs filed multistate lawsuits challenging the Affordable Care Act and Clean Power Plan. During the first Trump administration, Democratic AGs challenged his travel ban and filed lawsuits defending existing environmental regulations, such as national fuel efficiency standards.

When one party controls both Congress and the White House, state AGs in the opposing party view themselves as a last line of defense. AGs in the same party may collaborate with like-minded members of Congress during investigations and give their input on federal policy.

Of the 10 newly elected AGs, eight come from reliably Republican or Democrat strongholds. Pennsylvania AG Dave Sunday and North Carolina AG Jeff Jackson, however, come from swing states, so it will be interesting to watch if they buck their party on any critical issues.

Past as Prologue

State AG actions have a tangible effect on federal policy and deeply influence the regulatory environment. AG activity in labor and employment, for example, directly impacts businesses across every sector.

In 2023, a group of 18 Democratic AGs supported a federal ban on workplace non-competes, which was finalized earlier this year. Businesses have felt the effect of this AG-driven rulemaking in the form of compliance costs and the need to reassess employment practices.

AGs have been active in the energy sector, again with direct consequences for businesses. Fourteen Democratic AGs successfully sued Trump’s EPA in 2017 to prevent further delays in publishing methane gas emissions standards.

The resulting uncertainty and increased compliance costs from these actions have caused some businesses to accelerate toward clean energy practices to avoid potential penalties.

Corporate policies like diversity, equity, and inclusion, and environmental, social, and governance, also have received partisan AG attention. Republican AGs have warned they would sue corporations with allegedly discriminatory DEI practices and questioned whether ESG practices provide the best returns for investors.

At the same time, Democratic AGs have defended these practices, arguing that ESG factors are legitimate considerations for risk management. Businesses have been forced to balance their commitments to DEI and ESG against the potential legal and political risks and scrutinize these policies as a result.

In 2025, Republican AGs can be expected to support federal deregulatory efforts while continuing to oppose DEI and ESG initiatives. Meanwhile, Democratic AGs will likely aggressively challenge regulatory rollbacks and proactive lawmaking, viewing themselves as a last check on federal government.

Taking Action

As this landscape evolves, here’s how businesses can best position themselves.

Establish dedicated monitoring systems. Companies must keep an eye on the actions of AGs and develop strategies to navigate potential legal challenges and policy changes. Dedicated monitoring systems, such as processes that track multistate and emerging trends, can help businesses stay ahead of the curve of AG enforcement.

Conduct regular assessments and strengthen compliance programs. Regular risk assessments that evaluate company policies in areas like ESG, DEI, and data privacy considering AG priorities can help identify potential vulnerabilities and areas for improvement to avoid negative consequences. Compliance programs should be strengthened, including ensuring thorough documentation of compliance efforts to demonstrate the business’s good faith in the event of an inquiry.

Engage proactively with AGs. Begin building relationships with AG offices well before issues arise. Introduce your company and business model, and demonstrate commitment to compliance and consumer protection. Engaging in early discussions with AGs—including those just elected in North Carolina, Pennsylvania, Oregon, Utah, Washington, and West Virginia—will help you understand their priorities and convey your willingness to be a partner, setting a foundation for a positive relationship.

Collaborate with industry peers. Joining industry associations allows businesses to share information and develop coordinated responses to AG inquiries and policy shifts. Engage with industry groups or coalitions that interact with AGs on common issues and consider joint advocacy on issues important to the industry. This collective approach amplifies your voice, shares best practices, and presents unified industry positions on regulatory matters.

By understanding the evolving dynamics of AGs and taking the steps above, particularly strategically engaging with their offices, businesses can better navigate the uncertain regulatory landscape and avoid significant reputational, financial, and competitive harms.

This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or its owners.

Author Information

Ketan Bhirud is partner at Cozen O’Connor and former deputy general counsel of the Department of Homeland Security.

Christopher Allen is a member in Cozen O’Connor’s state AG group and guides clients through complex state attorney general investigations and litigation.

Grace Garver is an associate at Cozen O’Connor, advising, representing, and defending clients in a wide range of industries.

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