Episode Transcript
Speaker 0 00:00:00 Yep.
Speaker 1 00:00:05 Good morning everyone. This is Vin DCI from Affiliated Monitors, and we have a very interesting, uh, podcast and conversation today, um, regarding Consumer Protection Divisions at AGS offices. Um, and some of the issues that come up there, um, with us today, um, are two special guests, uh, Chris Allen and Megan Stoppel from CoSN O'Connor. Uh, Chris has a national practice with a particular focus in the areas of consumer protection, antitrust data privacy, and the False Claims Act. Um, he also does work outside of the ags office, uh, practice at CoSN, um, where he represents, uh, consumer products, manufacturers and distributors, um, and, uh, a wide range of investigations. Um, Megan, uh, Stapel, um, is also part of Kohn's State ags practice. Um, she has a, a, a background both in private practice now with cn, but also a deep, uh, background inexperience at two consumer protection offices.
Speaker 1 00:01:18 Um, she was, um, recently with the Nebraska Attorney General's office at, as the Chief of the Consumer Protection Division. Um, in that role, she was responsible for investigation and enforcement of state and federal laws related to deceptive and unfair trade practices, data privacy and security, antitrust, nonprofits, uh, and many others, um, and, um, and now at ko. And she is part of their, uh, state ags office. Um, also with us this morning is my colleague and friend Jesse Kaplan. Uh, Jesse, um, two has a deep, uh, background in state government. Um, he serves currently as the managing director of Affiliated Monitors Corporate Oversight, um, where he monitors conditions imposed by organizational clients, by government agencies. But prior to that, he has experience, um, about 20 years in government, uh, working with, uh, most recently before he joined, affiliated, uh, as general counsel for the Massachusetts Executive Office of Health and Human Services. Um, and he also served for a period of time, um, as the head of the Eternal General's Office of Massachusetts Consumer Protection and Antitrust Division. Um, so it's a great group that we have with us. And, um, I thought we would start by turning this over to Megan to talk a little bit about consumer protection divisions, what they do, what tools they have for enforce enforcement, and those kind of things. So let me turn it over to Megan.
Speaker 0 00:02:54 Thank you, Ben. And, and thank you for having us on this podcast, Chris, and are delighted to, to join you today and talk about, um, not just state ags, but our state ag practice. And, um, I, I actually, uh, met Jesse and, and Uve earlier this year and Raleigh, and it's always such a thrill for me to find former ags and folks who've practiced in the ag world, on the government side, and, and found really creative and rewarding ways to stay connected to this community. Cause as you mentioned, I, uh, have spent a good part of my career in this world. And, um, it's, it's such a rewarding way to, to practice law and, and there's so many great people doing this work. But, uh, to dive right in, I think then, and get to your question about, you know, consumer protection divisions more generally and, and what they do.
Speaker 0 00:03:45 And, and thank you for that kind introduction, uh, from a a 10,000 foot perspective, most consumer protection divisions. And, and I think we have to caveat all of these comments today with, um, you know, uh, a quick, not every state is the same, and they're all set up a little bit differently, but most of those divisions are gonna be tasked with interpreting and enforcing their respective state UDAP laws. And, and UDAP laws are just a shorthand way for us to refer to state unfair and deceptive, um, accent practice laws. Those are those consumer protection statutes that prohibit deceptive trade practices, unfair trade practices. And, and to accomplish that, many of those state ag offices and their consumer divisions have assumed over time a handful of sort of other ancillary obligations, right? They might mediate complaints that they get from their constituents against businesses. They might do outreach to consumers to educate those, uh, folks about their rights, about scams and frauds that are happening in their community.
Speaker 0 00:04:45 And then, and then they're, what they're trying to do generally is just raise the profile of the office, um, inform constituents that the office exists, that they take complaints. And the reason for that is so consumers know to report to them potential cases or violations of the law, uh, to the ag is appropriate. Um, but it is important, I think, to keep in mind here, that these divisions and, and ag offices more generally have a variety of resources at their disposal, right? To identify potential enforcement actions and, and targets of those actions, right? That does include consumer complaints, but that also includes, you know, just run of the mill things like media reports, stuff they see on the news, and also information that they get from other regulatory agencies, right? The Federal Trade Commission, the Consumer Financial Protection Bureau, maybe, maybe even U S D oj or, or local law enforcement in their, in their state. So hopefully that answers your question, um, Ben, and it is a nice high level overview. And Chris, feel free to weigh in, um, if, if you have anything you wanna add there?
Speaker 2 00:05:51 No, I think Megan, you, uh, you addressed it very well, and I'll, I'll start also first by thanking you again, Ben, uh, and Jesse, for having us on here. You know, I've, I've met your team, I've known you for, for several years now. Uh, you have a, a great team with a great reputation, and it was really nice to reconnect with you and, uh, Raleigh, and we appreciate that leading to this podcast. So thanks for having us on. Um, I, I think, you know, in, in addition to what, Megan, to expand just a little bit on what Megan talked about, um, the unfair deceptive acts and practices or UDAP laws that these ags offices enforce are, are very, very broad. They prohibit, generally speaking, uh, deceptive, uh, misrepresent false statements to consumers, but they also generally prohibit unfairness. And so what this provides, ags and consumer protection divisions are, are at the tip of the sphere of this, are really broad, diverse, flexible tools for protecting consumers in their states.
Speaker 2 00:07:01 And so, a lot of people may hear unfair deceptive practices and think of, Oh, it's, it's a company, you know, defrauding somebody saying, We'll, fix your roof, charging you $4,000, and then never showing up. And that happens. But, um, what ags have been able to do is take these laws and really apply them across a broad panoply of consumer behavior, uh, I'm sorry, business behavior, commercial behavior that impacts consumers. And so I think a really cool example of this is data privacy. You know, AGS were the very first, uh, enforcers in the United States to develop data privacy as a consumer, right? And the way they did that was not through any kind of special statute, but by enforcing their own UDAP laws, uh, and saying, you know, if you say you're safeguarding a customer's information and you're not actually doing that, that's a false statement.
Speaker 2 00:07:56 And it allows the, it allowed the ags to become the defacto national regulators in that area. And it's also that same flexibility's provided them the ability to be leaders in a lot of other areas. Uh, healthcare, finance, uh, the, the, um, uh, what do you call just the <laugh>, the gig industry. All of these are areas where ags have been able to use these broad power, uh, to uphold the interest of their citizens, but take action, uh, to defend the public interest across a really wide area that touches on basically every business that's out there.
Speaker 0 00:08:32 Yeah. And I'll, and I'll sort of pile onto that, Chris, and, and maybe it's, it's helpful at this point to talk about the differences and how, how the states approach those industries from an enforcement perspective and how sometimes they work together, right? To set those standards using their, their UDAP statutes, right? From an enforcement perspective, you know, sometimes we'll see, see a state conducting and resolving a state specific investigation, right? A matter that's, um, specific and unique to their state, either because the business is located there, or they've received a number of complaints unique to their constituents. But more and more we are seeing states act in highly coordinated fashion, right? And the epitome of that coordination is what we refer to in our practice and, and what sometimes the press will refer to in events. I know what you refer to as the multi-state, right?
Speaker 0 00:09:26 Were a number of offices joined together to, to conduct that investigation and then take some sort of enforcement action in response to their findings. Uh, those investigations, those multi-state can vary in size. Sometimes you're talking about 10 to 12 states led only by a handful of states. Other times you're talking about 40, 45, even 50 states in the multi-state with an executive committee, a leadership committee consisting of, you know, upwards of 10 states. And, you know, I think it depends on the, the subject matter that you're talking about, right? As Chris alluded to, um, data privacy is, um, is certainly a hot topic these days, and we're seeing more and more states, um, step up and play an active role in that space, particularly, um, and, and, you know, sometimes the same states over and over again in a leadership capacity in, in the data privacy realm. Um, but, but I do think it's important to keep in mind that the states can coordinate when they want to, to sort of set that national standard, because those UDAP laws have so many sort of hallmarks. They are similar enough across the board that they can act in that coordinated fashion to set sort of a, a defacto national floor.
Speaker 2 00:10:40 Yeah. And, and to follow up on that, Megan, also, you, what you've seen also develop with this dynamic of multi-state is that you do have individual state offices that have, uh, developed either a reputation or a role as leaders in specific areas. So in data privacy, for example, you often will see states like Connecticut, Maryland, Illinois, uh, taking a leading role in coordinating their, um, uh, other states as well as bringing their own actions in those fields. Uh, you have a lot of ag offices that have developed specialized divisions. This tends to be more the case in bigger offices. Um, but for example, you'll have, uh, states like New York and Illinois where the ags office has specialized healthcare divisions. Um, you'll have states like Pennsylvania and, and California and Massachusetts that have divisions that focus on, uh, financial protection, so debt services, credit, uh, things like that.
Speaker 2 00:11:43 And then you have states that really just, I would say, tend to take a natural leading role in multi-state. They serve in the executive committee, which tends to be, you know, a collection of, uh, anywhere from five to, uh, even a dozen states, um, that act as the core negotiating and leading group, uh, for, uh, up to 50 states, like Megan said, in these multi states. And you see sometimes big states like Florida and Texas take a leading role, but you'll also see, uh, smaller states like Connecticut have a large voice. And, uh, you know, I'd be remiss if I didn't mention that Nebraska, despite not having a whole lot of people there, uh, is a real leader in this area too. I think in no small part, thanks to, uh, my former anniversary and current colleague Megan's role there. Um, thank
Speaker 0 00:12:34 You Chris. Appreciate the that out there. And no, and I think, um, you know, your comment there, Chris, actually is, is probably a, a nice segue, um, towards mentioning the fact that, you know, in a smaller office, right, you might have divisions that are filling multiple roles, right? So like when I was in Nebraska, our consumer division, we had multiple silos within that division that performed different sort of enforcement tasks, right? Antitrust responsibility was within that division, uh, nonprofit, uh, regulation enforcement was within that division, but we also had traditional enforcement authority. Um, but there are other offices that, that don't have that sort of, um, um, umbrella authority within their consumer division, or they're somehow more, more siloed, right? They may have a separate antitrust division, a separate privacy division or privacy unit, Uh, but even in the smaller states, I think you do see some traditional siloing, right?
Speaker 0 00:13:35 Most offices have a civil division, most offices have a criminal division, most offices have a Medicaid or healthcare fraud division. Um, but I think for, for this audience, it's probably really important to keep in mind that just because there appears to be sort of functional segregation within an office, whether that office is large or small, it, it would be a mistake, I think, to assume that the ags office is unaware of how one division's work might impact another division, right? Chris, And I know from our experience, and Ben, I know, you know, from your experience, and, and Jesse knows this as well, from his time, probably in an ag office, ags were many, many hats every day, right? Um, sometimes they're, they're the attorney that's, um, defending the state. Sometimes they're the attorney that's actually prosecuting the case on behalf of the state. And in my experience, ags are often quite aware, sometimes painfully aware, right?
Speaker 0 00:14:30 Of the impact that taking a position in one, one matter is gonna, how that's gonna impact the work they're doing in another area. And, and there is a tension there sometimes. And, and oftentimes executive leadership is, is trying to resolve that tension or manage that tension. Um, and so, you know, I I, I think sometimes our responsibility, ize responsibility in dealing with our clients is helping our clients understand that. Um, but you know, I, I do think most ags understand that is their obligation to break down those silos as much as possible. And, um, obviously that's easier to do in a small office. But it's interesting, we're actually seeing the federal agencies, right, like the FTCs start to speak publicly about their efforts to do more of the same, right? To break down those walls between their consumer protection efforts and their antitrust enforcement. Uh, which I think just goes to show sometimes how state agents can be a real leader in these areas, right? Um,
Speaker 1 00:15:29 Sure. Let, let, let's, let's cover to Jesse. Jess, any comments on what we've heard so far, um, before we turned it back to Megan and Chris about an ag practice in a law
Speaker 3 00:15:39 Firm? Yeah, and, you know, following up on, on what Megan and Chris, uh, particularly what Megan, uh, was last talking about, about the, the different hats that the state ag uh, wears. You know, before I joined the Massachusetts Attorney General's office, I worked for the Department of Justice in Washington in the antitrust division. And when we were investigating whether it was a merger or conduct, we were focused on one thing and one thing only. What were the competitive impact implications, effects of that transaction? It was only really after I joined the state Attorney General's office that I really appreciated the different areas of responsibility that a state AG has, uh, and, uh, the different areas of oversight. And I'll just give an example, and then I'd love to hear how you know, Megan, uh, you and Chris and your practice, how you, how you do, uh, counsel your clients in, in this respect.
Speaker 3 00:16:36 So, so for instance, the state ags office, if a large hospital system, for instance, we start investigating them because of either an antitrust issue, uh, or maybe a consumer protection issue, uh, we couldn't just focus on, or the office couldn't just focus on what were the competitive implications, uh, because, for instance, if they were a very large not-for-profit, the state ags office also has oversight over them as a char public charity, and needs to make sure that the charitable assets are, are, you know, not being wasted. Uh, the ags office also has concern over the labor and employment practices. And if they're a very large employer, you know, what the AGS office does in connection with investigation could have an impact on the employees without organization. Uh, the ags office also needs to take into consideration whether the Medicaid, the state Medicaid population of that state are good, can continue to be serviced by that, uh, healthcare system. Uh, and so there's all these different parts. Sometimes they, the answers are consistent, sometimes they're not. And I'm interested, Megan, I'll, I'll turn to you, Megan. You know, how, you know, do you, it sounds like you do agree with that, but how do you counsel your clients or help your clients navigate those different interests that the ags office may have?
Speaker 0 00:18:05 Great question, Jesse. And I think, um, probably the easiest or or best scenario for our client is where we can explain to the client that those potentially conflicting interests that the AG has, or the tension that might exist within an ag office, like the one you just we're referring to there with respect to, you know, antitrust and, and workers, right? And, and labor and employment considerations, how sometimes that tension can be used to the client's advantage, right? And, and I referred to executive leadership earlier because I, I, that's an important point. Oftentimes, it's, it's the middle management within the office, or the folks in the front office and, and the leadership ranks that are aware of that tension. The staff, the attorneys that are in the, the trenches, right? Doing the day to day work, are not always aware of that tension, and we wouldn't necessarily expect them to be, right.
Speaker 0 00:18:58 They don't have visibility into what those other divisions are doing and what they're sort of, uh, prerogatives are, right? And so sometimes what we'll be able to tell our clients is, we, we need to go, you know, not necessarily above the staff attorney we're working with, but I think we need to bring into this conversation someone who has visibility into these other areas of the office so that we can have a broader based conversation with the ags office about those potentially conflicting interests and how we ensure that, that we're not creating unintended consequences, not just for the client here, but for the state. And, and you know, that that's a delicate conversation to have with the state ags office, and I think it's one of the reasons why you've seen the growth and, and state ag practices, quite frankly, because you need a practitioner who's, who knows how to navigate that conversation, and again, make it very clear to that staff, attorney or attorneys you're working with in the trenches, that this is not about going above your head, right? This is about expanding the audience, right? And making sure you have all of the right viewpoints and perspectives at the table for the conversation. Chris, feel free to weigh in and add your perspective. Um, but, but that's the best scenario for our client when we can use that tension to our advantage.
Speaker 2 00:20:17 Yeah, totally. I, Jesse, I don't, I didn't mean to interrupt you there.
Speaker 3 00:20:22 No, no, I know, but I have a question for you too that I think kind of follows up on, on what Megan had to say, and that is, so, you know, the expansion of state ags their practices, particularly in consumer protection. Uh, now, you know, kind of, uh, in parallel with that, KO O'Connor has started your state ag practice, and I'd love to hear from you, because I think you were there at the beginning or close to the beginning, you know, what prompted, uh, your firm and you to start that state ag practice and a little bit of what you do in that state ag practice.
Speaker 2 00:20:58 Well, thank you. I, I wish I could claim that I was there at the beginning, or that I was as entrepreneurial or innovator or insightful to found this practice. But that really goes to, uh, our two co-chairs, um, who Megan and I work with at Co O'Connor, Bernie Nash and Lori Kalani were really the visionaries behind this. Um, Bernie was, uh, earlier in his career, uh, council, uh, on the, on, uh, Capitol Hill, uh, and instrumental to the passage of the Heart Scott Rodino Act, which, uh, you know, revitalized and, and transformed antitrust law in the us. And one of the things that it did was it gave a significant parallel rule to state attorneys general. And so as he was doing that, he made a lot of contacts and gained a lot of expertise in this area. And after Bernie left the Senate, uh, this would've been in the eighties, um, he founded his own law firm and found himself, uh, drawn by those connections back into this world, and had the insight and the wisdom to recognize that because of what we've talked about, the broad power that ags have, um, as well as one thing we haven't really talked about is the discretion.
Speaker 2 00:22:13 Um, you know, a state AG is one person, and many of them, most of them are elected. Uh, few are appointed, but still, it's one person sitting at the top of, uh, an office with this very broad power. It's not an FTC of five people, it's not a DOJ with all of its massive layers of bureaucracy all the way up to the White House. Uh, it's one individual that can really make a big difference depending on who, what they decide to focus on. And so, Bernie, uh, founded a practice that came to focus exclusively on understanding state ags, understanding the differences and nuances of them, uh, and learning how to, uh, build the kind of trust and develop the kind of practices and methodologies that help us, uh, to serve our clients with state ags, uh, and take an approach that's very different than civil litigation or, or litigating against u s usj.
Speaker 2 00:23:09 And then after Bernie had been in his practice for a while, uh, he was joined by Lori Kalani, who was former in-house council at Dish Network, uh, where, uh, once they became the target of a consumer protection, uh, some consumer protection concerns, she developed a plan to go around and meet all 50 ags. And, and she did that. It took her about two years. Um, but she realized, again, this is a very unique niche area of law that's built on trust. It's built on understanding. And so, uh, as ags influence has grown, which it has over several years, um, you know, our practice has grown also. So as ags have realized that through these multi-state that Megan talked about, um, through their flexibility through these broad powers, they can act as regulators on a national scale. We also, as a firm, have, uh, scaled up and we now count 16 attorneys, uh, including five that are former, uh, members of ag offices.
Speaker 2 00:24:12 We have a former Virginia Attorney General, a former deputy from Wisconsin, uh, a former, um, uh, ags from, uh, Virginia and Massachusetts. Uh, and then of course we have Megan, who is the former, uh, consumer chief in Nebraska. And what that's allowed us to do is really bring to the table the full services that you need to deal with in ags office. That is knowing the ag is the front office and staff having a reputation of trust. I think that's paramount. And really understanding the nuances and the special concerns, uh, that go beyond really just the, the facts of the specific case and go to what you, Jesse and Megan were talking about, um, in an ag office has different, the, the, the concerns are overlapping. There is an idea, there is a philosophy that tends to be in an office, and understanding where an AG is trying to do, not just legally, but also politically and policy wise, uh, is critically important to being able to manage these issues.
Speaker 2 00:25:14 And so, you know, we provide those services for our clients across all 50 states, both in individual state cases brought by ags, as well as these multi-state. Our practice transcends, uh, subject matter, which is something that's kind of fun for me. You know, I, I joke that I, I, one of the guys I was a summer associate with became an insurance lawyer and had the same litigation for eight straight years. Uh, I would've jumped off a bridge at that point, whereas in this job, I get to do consumer protection. I also get to do antitrust data privacy. I've dabbled in securities and environmental cases. I've done a lot of false claims work at the state level. And, uh, and that's just touching on other things that AGS can get into, like you mentioned, Jesse, employment, labor, uh, charities. But we really do it all. We help our clients, uh, when respond to Ag Investigations, We help them negotiate resolutions.
Speaker 2 00:26:08 Uh, we do litigate. So we have been a defense council to, uh, entities, uh, companies, businesses that have been sued by ags. Uh, we help them with policy and working with ags to develop, uh, areas of shared interest and find joint projects. Um, but really, you know, what we, what we specialize in, I think, and, and where, uh, again, you all come in and your reputation is, uh, I think in many cases, you know, companies want to resolve issues with ags or avoid issues altogether. They want to demonstrate that they are good actors, that they, they have strong compliance programs. And that's where people like, uh, affiliated monitors can really come in and help because, uh, you can provide a voice, uh, a, uh, verification that the company really is taking those matters seriously. And I don't wanna get ahead of ourselves there, but I do think it's worth calling that out, that, um, you know, we try to find creative solutions to these kind of problems. And there are a lot of, uh, tools we have at our disposal, because ags have a lot of flexibility at theirs.
Speaker 1 00:27:12 And, and, and when, as you say that, Chris, um, you know, one of the things that attracted all of us on this call together is this conversation that we were having about alternative kinds of sanctions, right? And not just the fine or putting a company outta business or what have you. Right? And one of those considerations, um, that we bring to the table, as you noted, is independent monitoring. And I'm interested in getting your and Megan's comments on that kind of thinking, uh, and whether or not it would be attractive or is attractive to ags office consumer protections division as an alternative, and, and, you know, have at it because I, we we're very interested in hearing your thoughts.
Speaker 0 00:27:57 Yeah, I can, I can lead off on that then. And thank you for the question. Um, certainly monitoring was something I was familiar with, you know, both as a line attorney who started in consumer protection, um, sort of right out of law school, and then eventually as a consumer chief, saw that theme in a number of settlements, typically multi-state settlements. Uh, you know, I, I think it's important for this audience to understand that, um, monitoring is something that state ags are gonna be probably more open to considering when you're talking about, you know, highly regulated parties, you know, complex injunctive terms, right? And, and oftentimes you see those two hallmarks and, and multistate, not always, and I'm, I'm sure Ben and Jesse, you could talk about cases that you've settled with individual states where monitoring was appropriate. And I'd be interested in, in hearing your perspective on that.
Speaker 0 00:28:49 But in my experience, I saw monitoring in multi-state cases, But it, but to take a step back for a minute, I mean, I, I think it's important to understand that, you know, ag investigations and that conversation with the ag is, is just a different animal. And, um, the, the way you speak to an ag needs to be handled differently than the way that you might speak with, uh, or have a conversation with a private litigant or a, a private party. And, and probably even differently than the way that you're gonna talk to a federal agency like DOJ is, as Chris mentioned, and there is that room for creativity. And, and I do think the, one of the reasons for that is not just sort of the statutory ability to be flexible, right? There's nothing in most of these UDub laws that dictates the outcome be a certain way.
Speaker 0 00:29:37 Um, but that creativity flows from the relationship that exists between the parties oftentimes, right? When you see trust and when the, the state ags and the lawyers at the table for the state Ag Trust, the, the representative who's sitting there speaking on behalf of the client and believe they can have open and candid conversation about solutions, about what their concerns are, I think that's a, a scenario where you're gonna be, um, you're, the conversation's gonna lead more naturally to, uh, options like monitoring, right? And so I think that's important to keep in mind as well, right? You don't wanna throw out an option like monitoring in a very contentious negotiation because I, I just think it's gonna be a more difficult lift for, um, for defense counsel. But I, I, I do think, um, in some cases, monitoring is a great tool and can be especially effective, you know, in consumer protection matters.
Speaker 0 00:30:38 Maybe another matters like, you know, healthcare fraud or antitrust for a couple different reasons, right? I mean, it gives the client a resource to ensure that they're complying with whatever those settlement terms are, but it's also gonna give the AEG comfort that the client has the tools, right? Or the assistance to do what they're being asked to do under that settlement. And, you know, the ag and the client may not initially appreciate the need for monitoring at the outset of that negotiation, or even the outset of an investigation. And that, again, is where folks like Chris and I come in, right? And, and bring that creative lawyering to the table. And this is where experienced Ag Council can be really helpful, um, because we can point to those, you know, precedential matters where monitoring was used and, and the effectiveness of it. Um, but Chris, I'd, I'd be really interested in hearing your perspective, cuz I know you've dealt with clients who've agreed to monitors, and I, and I, I would love to hear your perspective, and I think it'd be helpful for this audience to hear sort of logistically, how did that conversation come about and how'd you get that matter across the finish line?
Speaker 0 00:31:42 Was there resistance? And how'd you overcome that?
Speaker 2 00:31:45 Yeah, I, I think that it, it comes about, again, the whole idea is being creative. It's about, um, finding ways to get around Impass without running the court or without, um, going to the front offices saying you're stuck because like you said earlier, Megan, that's a very valuable thing to do. And that's, that's something that we excel at given the relationships we built. Um, but you wanna make sure that you really are exhausting all of the possibilities that are out there. And so when monitoring can be very useful, I think is, um, again, when you have a complex settlement, uh, where you're dealing with several different concerns from the ags office, and you really want to demonstrate a client's commitment to, uh, coming into compliance, if that's in question or remaining in compliance, if you're agreeing to certain obligations. And some of these consent orders or ABCs can be many, many, many pages and, and, and dozens if not hundreds of clauses long.
Speaker 2 00:32:48 And so what struck me, and, uh, the reason I think we're all here is, is knowing what then, and just you do, knowing what affiliated monitors do does, um, in being that kind of vouch safe in, in helping companies understand their compliance obligations, but also, uh, being able to tell ags, uh, and consumer protection staff as you go through this monitoring period, Hey, these guys really are in compliance. You don't just have to take their word for it. And I think that's a really powerful thing. It provides assurances to the ags office that your client is taking this seriously, and that they really do intend to live up to their obligations. Uh, and that, I think that's good for the ags office too. They don't have to, uh, use their resources, their scarce resources, policing your compliance, Um, they can rely on a third party. And, and that, that's, it kind of brings me to, uh, a question I had, which, uh, I've gotten to know you guys and then Jesse, as we've been preparing for this. But, you know, how did you get into this and, and what, what are the stories from that third party? What is your perspective, uh, in terms of when you're brought into, uh, you know, these kind of situations where you apply on one side and a regulator on the other, and you are serving as an independent monitor?
Speaker 1 00:34:11 So I will start that, and then I'm gonna turn it over to Jesse. But, um, affiliated Monitors has been around since about 2004. Uh, and it started because of an idea that I had, uh, when I was working as a defense attorney in your shoes. Um, and I thought a creative solution, um, to a difficult problem would be an independent monitor to serve almost like a civil probation officer, um, to make sure, as you described, Chris, that the, that the individual or company was doing the right thing with oversight, sort of validating what they were doing. Um, and so we've been doing it for a long time and we're doing more and more work with ags offices, um, in the consumer protection, um, area and in antitrust, but we do a lot of different work, um, providing those kinds of independent monitoring services. But I, I, I think Jesse can provide even a more valuable perspective because he's done it from all sides, right? He's done it from the defense side, he's done it from the ag side and the government side, but also as a monitor. So, Jess, let me turn it over to you to give some perspectives, um, on monitoring as we get ready to wrap up.
Speaker 3 00:35:15 Yeah. And, and thank you. And I'll try to be brief. And so, you know, I joined affiliate monitors about four years ago, and the reason I joined, uh, is because I really do believe in, uh, the work that we do and, you know, in the value of independent, uh, monitoring. I, you know, I, my experience and I've litigated on both sides, litigation is not always, are often not a very good way to resolve things, right? <laugh>. Uh, and so, uh, so what, you know, and what companies really want, and I, and I know this is what you counsel here, companies I'm pretty sure is, uh, is that we wanna have a resolution where the company remains in business, is able to remain competitive with the others in that industry, uh, but also gets the matter, uh, behind them and allows the Attorney General's office to then, uh, reassign resources to look at something else or someone else, okay?
Speaker 3 00:36:14 And, and, uh, offering independent monitoring as a solution, whether it comes from the, from council for the company or from the government, can really check those boxes, uh, and get you there. And, uh, you know, I'm just gonna give a real quick example. And this actually didn't happen to deal with, uh, a state Attorney General's office, but, uh, a case involving the, uh, company in the FCC on a consumer protection matter that we monitored, uh, and talking about creative lawyering. And that is, in this case, the f the FCC brought, uh, an action against this company for consumer protection violations. And the FCC was convinced this company could not operate lawfully. And they went in and got an part day TRO that basically shut the company down. Well, the company in their outside council were convinced that they could operate lawfully, and they went to the judge and offered a solution, Judge, allow us to continue to operate under certain conditions, and we will engage in independent third party monitor to monitor that we are complying with those conditions and report to you judge on a regular basis.
Speaker 3 00:37:24 And the judge said, Okay. So during the pendency of litigation was somewhat unusual. Uh, there was a monitor, uh, overseeing that the company was actually engaging in the conditions that they had agreed to. And in a period of about nine months, we had, we submitted probably, uh, close to half a dozen reports. And, uh, and the, the co the company and the FTC actually ended up settling the matter. Uh, the fcc, the FTC was apparently convinced that the company now could operate lawfully, and in fact, by suddenly manner, they didn't even require continuing monitoring. So that was an example where, uh, you know, the company and their council were able to actually get this resolved in a situation that looked hopeless, uh, at the outset.
Speaker 1 00:38:17 Uh, so as we wrap up, um, any final thoughts, Megan and or Chris?
Speaker 0 00:38:26 Chris, you wanna take that first? <laugh>?
Speaker 2 00:38:29 Yeah, no, I, I just, I, I, I gotta applaud you, um, Jesse, that that is exactly kind of outcome you wanna see. Uh, and it's the kind of outcome that we try to achieve also, you know, for our clients. Um, you want, I think you, you said it very well, you want certainty. Uh, you want to be able to continue working, and you don't want the burden placed on you to be larger than the burden on the rest of industry. Um, what I think is really interesting is, is a lot of times what an ag is trying to accomplish when they enter into a settlement with a particular company is also to kind of set a marker for what that industry should be expecting. Um, and so what the, a big piece of this are those conduct provisions and the company's compliance with that. And, uh, if an ags office can be, uh, assured that a company can continue operating under these conditions, and somebody like a monitor can play an important role in ensuring that that happens, that allows them to go to the rest of the industry and said, You know what?
Speaker 2 00:39:33 I think consumers are best served when, uh, a company is abiding by these kinds of obligations and building their compliance around these obligations. And X Corporation is doing that. Uh, we think you should too. And that really allows ags to use their investigative power to achieve, uh, the kind of politic the policy goals, um, and the political goals that I think are very, very important to them. And so, you know, Megan said earlier is something that I think I, it is worth emphasizing, you know, and, and please don't take this the wrong way, guys. Monitors are not a silver bullet. Nothing is a silver bullet here, but it's very important to think outside the box. It's very important to approach problems with flexibility and creativity. And something like the services that y'all at affiliated Monitors provide just gives you another tool. It gives you another option that may help you get around that mfs that may help you get to Yes. And that, I, I just think that's one of the hallmarks of our particular practice area is dealing with extremely complex, um, politically and policy sensitive areas where we're all, we really are all trying to get to. Yes.
Speaker 0 00:40:48 Couldn't have said it better. Chris, thank you. Thank you, Ben and Jessie, uh, for the opportunity to, to join you today. This, this has been a pleasure and, um, you know, hopefully we can do this again so times or, uh, or as we're we'll cross soon, hopefully on, on a particular matter. So thank you.
Speaker 1 00:41:08 Thanks everyone for listening, Chris and, um, Megan, thank you very much, uh, from Jesse and I and affiliated monitors, uh, that'll end this particular podcast. Thank you.
