Beyond the Beltway: State AGs Could Chart Bold Enforcement Course

As the US undergoes a significant shift in federal leadership, state attorneys general offices are poised to play an increasingly pivotal role in shaping public policy and corporate compliance landscapes. Many observers anticipate that while AG offices will remain highly active, their focus and approach may undergo substantial changes in 2025. 

Husch Blackwell attorneys share their predictions about state AG policy and enforcement in 2025.

Matthew P. Diehr: Antitrust regulation & enforcement

Antitrust regulation and enforcement received a lot of attention from the Biden Administration. I am going to be most interested to see if the Trump Administration represents the sea change in antitrust policy that many foresee and how its policies will influence state AG efforts.

Focusing solely on merger review (my colleague Abe Souza will address additional antitrust concerns below), the past four years saw state AG offices collaborating with federal agencies and each other on investigations and litigation, generally taking on a more active and expanding role in vetting corporate transactions. 

This approach led to high-profile lawsuits attempting to block mergers, including, of course, the Kroger-Albertsons tie-up, where eight states plus the District of Columbia joined an FTC lawsuit, in addition to separate lawsuits filed by the AGs of Colorado and Washington. The deal was later called off by Albertsons, who then sued Kroger, highlighting the transactional risks of the government’s heightened antitrust vigilance.

Many Democratic state AG offices are openly signaling that they intend to fill the anticipated void in scrutiny of corporate merger transactions by a more permissive Trump Administration. 

Rebecca Furdek: The end of Chevron deference

I’m closely following the way last year’s Loper Bright decision filters down to state AG offices, particularly in their expected challenges to Trump Administrative agency actions. In Loper Bright, the U.S. Supreme Court overruled the Chevron doctrine, which for nearly 40 years required federal courts to defer to reasonable administrative agency interpretations of ambiguous statutes. 

Specifically, the court ruled that Chevron deference is incompatible with the Administrative Procedure Act (APA), which mandates that courts reviewing agency actions “decide all relevant questions of law.” Post-Loper Bright, courts should exercise their independent judgment in resolving statutory ambiguities, rather than reflexively granting deference to agency interpretations when a statute is ambiguous.

Loper Bright was praised by many as a means for courts to provide a “check” on federal administrative agencies interpreting statutes through rulemaking. Indeed, after the case was decided, many Republicans saw an immediate opportunity to challenge Biden Administrative agency regulations. As control of the federal government has been seized by Republicans, it is likely that we will see Loper Bright “weaponized” from the opposite end of the political spectrum, including in state AG actions.

Several state AGs have said as much since the November 2024 election, particularly regarding potential Trump Administration actions focused on ESG and DEI. A recent Bloomberg Law article highlighted how several Democratic state AGs view Loper Bright as a tool to advance a broader policy agenda, much as Republicans did last year while contending with the Biden Administration.

In their prior analysis of Loper Bright, my colleagues reminded us all that it isn’t just pro-agency interpretations that are subject to this new heightened judicial scrutiny, but “business-friendly agency rules and decisions will also now receive the same neutral adjudication on questions of law,” something Democratic state AGs now recognize as a new opportunity. Loper Bright has massively changed the risk and compliance landscape; issues that may have been more or less settled under a Chevron standard may be very much in play under Loper Bright. Some of this exposure to risk will now be revealed by State AG enforcement priorities in 2025 and beyond.

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Julia Banegas: State AG coalition-building

It is well-attested that the 1997 master settlement agreement with the tobacco industry served as catalyst for the type of multistate litigation led by state AGs that have become commonplace. The increase of these lawsuits — both against the federal government and against private businesses — has held steady across administrations, regardless of party, and I expect the same will be true for the second Trump Administration. 

The piece of this that I am following closely is whether this next era of state AG litigation follows the predictable red-blue political map or whether new and different coalitions emerge in response to specific issues or concerns.

To be sure, a lot of the prospective state AG activity will track partisan political concerns, but there are a few issues that have the potential to create broader coalitions that cross party lines. There is a subset of issues in the areas of public health and safety, cybersecurity, consumer finance and technology with wide appeal. We saw something of this in the recent litigation concerning the opioid public health crisis.

We will continue to see coalition-style litigation in which resource-sharing and coordination increases the efficiency of state AG offices. Simply put, AG offices are more apt to get involved in lawsuits or take up causes with broad political appeal, even if the issue does not rate among the office’s highest priorities.

Business leaders should continue to consider their own particular litigation and enforcement risk profile, because it might not necessarily align with a party platform or support or directly contradict what comes out of the Congress and Trump Administration. 

Each state AG office is different, operating under its own set of priorities and subject to unique political influences. For businesses that have multistate operations, it is worthwhile to keep the pulse of state AG offices across the entire footprint of the company and to develop a sophisticated understanding of how each office approaches enforcement in those areas that are important to the company.

Abraham J. Souza: Anticompetitive conduct

Like several members of our team, I am following closely how antitrust policy shapes up under a second Trump Administration. My colleague Matt Diehr has adeptly covered the merger angle above, and we will be watching to see how the FTC, DOJ and state AG offices approach market conduct in the coming weeks and months. 

Complementary to antitrust merger enforcement activity, the Biden Administration was very active in policing a variety of areas under the antitrust flag over the past several years, including price-fixing, market allocation, monopoly behavior and unfair competition. If state AGs — particularly in states led by Democrats — perceive a lack of vigilance from the incoming administration on these market conduct issues, I can see the likelihood of an increase in state AG activity on this front.

Specifically, it is likely in this instance that state AGs would ramp up regulation, investigations, enforcement actions and even potentially criminal charges to curb perceived anticompetitive conduct, including “no-poach” and noncompete agreements, wage fixing, monopolization and other exclusionary conduct. 

In January, the New Jersey and New York AGs announced settlements concerning the use of “no-poach” agreements, which restrict workers’ rights to move from one job to another. Similarly, the senior assistant attorney general for antitrust in California has promised a more significant role from states in antitrust enforcement, noting that states are not beholden to federal priorities and that they “go where they want to — they beat their own drum.” California has not pursued criminal antitrust charges in decades, but it has hinted that it may do so under Trump 2.0, raising the once-unlikely possibility of other states resurrecting their long-dormant criminal antitrust enforcement regimes.

Another area to watch is noncompete agreements. State AGs may pursue noncompete agreements perceived to violate state law, even if the newly constituted FTC rescinds its own controversial noncompete-ban rule, which has already been put on hold. By way of example, the DC attorney general has announced settlements resolving investigations into employers suspected of violating DC’s ban on noncompete agreements.

Even in Republican-controlled states, antitrust enforcement may continue to expand and evolve, particularly in areas that intersect Republican policy priorities, such as curbing “Big Tech.” For example, Republican AGs signed on to DOJ’s 2020 lawsuit alleging that Google had unlawfully maintained a monopoly in online search.

There is a lot to watch for in the area of antitrust and market conduct, and so much of the substance of federal regulation and enforcement is still to be determined. But regardless of what comes out of the Trump Administration, it is clear that state AGs will not be idly sitting by and waiting for Washington.