Meghan Stoppel:

Welcome to the second season of State AG Pulse. In this season, we will be releasing a new podcast episode every two weeks. In addition to providing a deep dive into those headlines that showcase the enormous power and broad authority of state attorneys general, we’ll be talking with new AGs about their transition into office and their priorities. Like last season, we’ll leverage our decades of experience to provide our listeners with insight and perspective to help business leaders better understand and successfully work with state AGs. Listen for new voices as co-chairs Bernie Nash and Lori Kalani share the host mic with other members of Cozen O’Connor’s State AG Group. So now let’s jump right in to this week’s episode.

Jerry Kilgore:

I’m Jerry Kilgore and I’m a member here of the State Attorneys General Group and joining me today is also Meghan Stoppel, who’s a member of our state Attorney General Group, also a former Consumer Protection Chief out of two states. So we’re excited that she’s with us today and we’re going to talk about a lot of issues today. I want to remind everyone that the last podcast from the State Attorney General Group here at Cozen O’Connor was with Illinois Attorney General Raoul and I encourage you to go back and listen to that. It was a great podcast and it shed some light on what’s going on in Illinois and around the nation.

We are so fortunate today to highlight one of the stars of our Cozen Public Strategies group, Katie Schwab, who’s a managing director of the New York office. She works in the city, but she spends a lot of time in Albany as you can guess, working on legislative issues. It’s exciting to have Katie on to talk about this intersection of public policy and law and how her team works and what she sees the attorney general doing there in the state of New York. ‘Cause as Meghan and I know, and we’ve seen quite a bit around the country, as New York and California push legislation, it sort of comes to the rest of us maybe that year or in years to come.

Katie not only brings a lot of experience in lobbying, she has a lot of experience in government there in New York, having worked for the mayor’s office, having worked for county executive office there. But most importantly to me, she’s a graduate of the University of Virginia Law School. So we are excited to have you with us, Katie.

Katie Schwab:

Thank you so much, Jerry. I’m really delighted to be here. It’s a pleasure and happy to share a little bit about what’s happening here in New York. And I think that what we experience in New York is reflected in our public strategies practices across the country. We’re particularly strong in the large progressive cities. We have a practice here in New York. We have a practice in Philadelphia, in Chicago, in Richmond. What we’re seeing, what happens in these big states with large urban populations is that there are themes and trends that begin. And the various political players: between the governor, the legislature, and the attorney general, it’s just an incredibly dynamic and fluid environment and it’s fascinating to watch how these various players kind of act with each other and against each other, and then to contrast that with what’s happening in different states around the country. It’s never a dull moment here.

Jerry Kilgore:

I’m sure. And one of the reasons we had Meghan join us today is Meghan has sort of watched a lot of the consumer protection issues move through legislative bodies, but one in particular she has watched: it’s a privacy issue and what we saw in California and Colorado and Virginia; and we’re wondering what’s happening in New York. So Meghan, why don’t you talk about some of your privacy background and we’ll find out if anything’s going to happen in New York this session.

Meghan Stoppel (4:02):

Yeah, no thanks Jerry and Katie, thank you so much for joining us today. This is, I think, going to be a fascinating discussion. As Jerry alluded to, I have almost eight years in the Kansas Attorney General’s office doing consumer protection work and privacy work. I then spent almost four years in the Nebraska AG’s office as their consumer protection chief, also doing some privacy work, but antitrust work as well. And during both of those stints there in the Midwest in a couple of different AGs’ offices working for three different AGs, I had the opportunity to see legislation be shepherded through both of those legislative bodies, either because it was policy that someone else in the state was pushing, a state legislature was pushing, or because it was a public policy matter that was important to the AG’s office at the time. So it was a bill that we wrote and we were trying to get through the legislature during a particular year. And I’ve sort of seen it from both ends. I’m sure Katie, you have as well, and Jerry, I know you have probably as AG, but both in your time in office and now outside of the AG office. But yeah, I think it’ll be really interesting, Katie, to get your perspective on what the odds are of privacy legislation going anywhere in New York given General James’ political capital there in the state. And I’m excited to hear what you’re hearing on the ground in terms of pushback on that legislation.

Jerry Kilgore (5:27)

Let’s dive into that, Katie, what’s going to happen? Is the attorney general playing an active role in the state legislative policy and does privacy rank as one of her priorities?

Katie Schwab:

I don’t believe at this moment she’s identified that as a big priority. It was a big priority in the state legislature last year, and we came very close to having a bill that was very aggressive and to be honest, not very popular last year with the business community. It was intended, I think, to be groundbreaking, more extreme perhaps than any bill in the country. It was sponsored by Senator Thomas, and despite multiple, multiple meetings with stakeholders from across the business sectors, the senator was somewhat determined to move the bill without a lot of amendment. It was stalled in the assembly and didn’t move forward. We understand that he’ll be bringing it forward again. I think what we see in New York is often, and I think this is true in a few states, that there’s a desire to be groundbreaking, a desire to be an outlier in the country, to be a leader, so to speak, for better or worse depending on your position, I guess, on the issue. And so that poses a real challenge when you have major national or international companies doing business and have to cope with implementing diverse regulations across different jurisdictions, especially something as fluid as, obviously, the internet. So we are waiting to see what’s going to happen right now. Our legislative session has just begun and the focus really is on the budget. The legislature for the most part is taking a position, the leaders in the legislature are saying, “We don’t want to do a lot of policy in the budget. We’d prefer just to focus on the budget issues. That’s enough to keep us busy for now until the April budget deadline. And then we’ll come back and deal with these legislative issues after the recess, after budget adoption.” That’s when I expect we’ll really come down to the really hard battles on those kinds of topics.

Jerry Kilgore:

Well, now that Attorney General James has sort of gotten settled in office and moving past the election, what do you see as her priorities going forward?

Katie Schwab:

Obviously she’s certainly gotten a lot of media attention for her issues with former President Trump. That’s been something that’s garnered a lot of publicity and is certainly a popular issue to take on here in New York. We have a statute here in New York, it’s called the Martin Act. It’s actually a 1921 statute. It gives the attorney general a tremendous amount of power to investigate securities fraud, very broadly defined, not a lot of guardrails in terms of legal process. Over the years it’s been used for a wide array of financial transaction investigations. It’s where that idea of the Sheriff Of Wall Street comes in. Various attorneys general have used this to investigate Wall Street and financial services firms. It also was the instigation of a very, very widespread investigation into ExxonMobil. Schneiderman, a former AG, used this to launch an investigation claiming that ExxonMobil knew much more about the harmful effects of climate change and greenhouse gas emissions caused by the oil and gas industry. After, I think, 4 million documents were produced and extensive, extensive legal expenses were incurred by both sides, that case really went nowhere. But the statute remains an incredibly powerful tool. Tish James has used that as well for a variety of investigations.

She also is really taking the lead, I think, on reproductive rights. She, throughout her career, has been a very stalwart supporter of women’s rights, of LGBTQ rights. You may recall that she was the person who issued the report really outlining the allegations against Andrew Cuomo which led to his resignation due to the sexual harassment claims that were made against him. This is all completely on brand for Tish James. She’s always been a staunch defender of women’s rights. So these are the kinds of issues she’s primarily in the press for. She also, though, in her office has continued to be just the law enforcement person. She let Barbara Underwood continue her role as the chief law enforcement officer in the office. So the professional work of the Attorney General’s office has continued.

Jerry Kilgore

So Meghan, you’re probably aware of New York throwing around the Martin Act quite a bit in some of your prior life, but also representing clients here too.

Meghan Stoppel:

Yeah, no, I mean, I love the comment that Katie made, as an outside observer, about the breadth of that authority. I often hear very similar comments about the breadth and sometimes the ambiguity of state consumer protection laws just generally. I mean even states that don’t have a Martin Act or an equivalent of a Martin Act, they have these very broad consumer protection statutes that prohibit generally deceptive trade practices or something that’s called an “unfair trade practice”. And we often get that question from clients, “Well, what is an unfair trade practice?” And we’re trying to counsel them on those questions. Yeah, certainly. And sometimes that informs, Jerry, how an AG moves on a particular policy matter because they may be getting feedback from the business community about ambiguity around a certain topic or a certain industry, and they may say, “Look, your consumer protection statute hasn’t created the sort of guardrails or clarity that we would like it to. We’re hearing noise from another colleague in another state, another AG, or we’re seeing enforcement actions in this space coming out of either a federal agency or another AG’s office. And we’re really concerned about that because we don’t have clarity on what the rules of the road are, so to speak”. So I actually had that experience in the AGs’ world where stakeholders would come to us and say, “We want more clarity,” and then they would actually approach our offices and try to move legislation for that very reason.

But Katie, I’m curious, do you see… What’s the dynamic in New York? Do you see businesses approaching the New York AG’s office looking for partnership on particular issues because they think that having General James’ name attached to that issue increases their odds of getting a bill through the State House? Or does Tish James take a more hands off approach and does she wait for the folks in the State House to do what they’re going to do?

Katie Schwab:

My observation is that she is a little more deferential perhaps to the legislature than maybe in some other states. In preparing for our conversation today, I did a little reading on some of the activities in the other states, and it does seem to me that it may be some of the other AGs are taking a more proactive stance, especially on issues like consumer protections or on worker rights, depending on which state they’re from. It seems that some of them may be a little bit more proactively engaged on trying to shift the legislature.

We also have a very large and very proactive legislature here in New York. So they’re constantly throwing out a lot of new bills, holding hearings, promoting new concepts and ideas. In New York City, we have term limits and there’s quite a lot of interplay between our legislators and the state legislators. So there’s just a lot of churn and a lot of new things happening. My impression is that Tish hasn’t been quite so active in that process. Once the laws are in place, she’s certainly there to enforce them, to opine on them. If there’s a coalition of attorneys general around the country, she’ll weigh in if it’s something that the New York state voters and legislators have identified as important, but I haven’t seen her really weighing in at the legislative level.

Jerry Kilgore:

What about the legislative process? In some states, like in Virginia, and I know Tennessee, other states, the attorney general is asked to weigh in on legalities, on constitutionality of legislation, as it’s going through the process. Does that happen in New York, or do you have staff counsel that does all that?

Katie Schwab:

I believe we rely on staff counsel a little more often or else it goes to court.

Meghan Stoppel:

And that was certainly the opposite of my experience. And obviously Jerry, as you know, I came out of smaller offices, right? So I think this is really indicative of probably one of the important differences between smaller offices, AG offices, and some of the larger offices in the more populous states. I think you do get more reliance from the smaller legislatures on the AG’s office to provide that counsel. So you see the intersection earlier in this process between the AGs office and the policy makers. They’re asked to come to the table very early on in the process to… I mean, in some cases it was to almost provide course correction for the policy makers or the trade associations or whoever it was that was actually drafting language. Whereas what it sounds like Katie’s describing in New York is the AG’s taking a more hands off approach, letting the policymakers do what they’re going to do, and then when it comes to her office, once it’s been enacted, doing what we need her to do.

Jerry Kilgore:

What other issues are you going to see when the legislature starts considering policy? I mean, we talked about privacy and that may or may not come back this year, but are there going to be other huge issues that the legislature may consider this year?

Katie Schwab:

Some of our largest issues are related to the state’s very aggressive climate change goals. So we’ve set some very impactful objectives for meeting greenhouse gas emission reductions and clean energy standards. So that’s certainly going to be a major policy goal. How that gets implemented will be incredibly controversial this year. There are of course, dozens and dozens of boilerplate issues that will come through about licensing, about COVID recovery, about just the business climate in general.

We have an interesting dynamic now with super majorities of Democrats in both houses of the legislature. However, those Democrats are a pretty diverse bunch, so they certainly don’t agree on everything. The governor is a relatively moderate Democrat. The leadership of the Senate is probably more progressive, I’d say, than the leadership of the Assembly. And so trying to thread the needle on some really important policy decisions is going to be tricky this year. Data privacy is one thing. Financial services regulations is another. There’s a housing objective in the state. The governor set a goal of creating 800,000 units of housing. And housing is such a broad topic. It covers everything from construction and development to the afore-mentioned climate objectives, to affordability standards, to tax policy, to fair housing concerns. It’s just an incredibly broad array of issues and bringing everyone into one tent and getting any kind of consensus on that, to meet what is incredibly important for the state’s future is really, I think, going to take up the lion share of the legislature’s time in the spring.

Jerry Kilgore :

So on the climate change issue, Meghan, I want you to weigh in here about what you’re seeing going on around the nation. ‘Cause what we’re seeing around the nation is sort of this red state, blue state divide on ESG issues and climate change issues. So Meghan, if you want to talk about that, then I want to go back to Katie for her to talk about how New York might enforce or implement ESG standards.

Meghan Stoppel:

Yeah, absolutely Jerry. It definitely is breaking down along partisan divides, especially in the ESG investing space and some of the challenges to the SEC rulemaking that we’re seeing right now. I think we’re seeing the Republican AGs being very aggressive and saying, “We don’t have clarity on the metrics here, or this is an inappropriate application of previously well-established fiduciary duties, what we thought were well-defined fiduciary duties.” This is a bridge too far, I think, for some of the AGs.

It’s really interesting from my perspective as a former consumer protection staffer and consumer chief, because we are seeing some of the state AGs, on the Republican side at least, take very, what I would say, liberal interpretations of their consumer protection statutes in this space, and then trying to apply them in very aggressive ways to make an argument here that, whether it’s an entity like the SEC, the Securities and Exchange Commission, or some of these investment advisory firms, have gone too far. And it really harkens back to my point a minute ago about how broad these statutes are. It really doesn’t matter what your political persuasion is, what the cause is, anyone at any point in time can find a way to shoehorn their argument into these statutes and make them fit what it is that they want them to say. It’s one of the reasons why from, I think oftentimes our clients’ perspective, they can be so terrifying – because you just never know, whether it’s a Democrat or Republican AG, how they’re going to try to use these statutes against you. Because you’ve got Democrats on the other side of this ESG issue, as you know Jerry, saying, “Wait a minute, wait a minute. That’s not what those consumer protection statutes were designed to do. That’s not what they’re for. You can’t use it that way. You don’t have a legal leg to stand on.”

So I think time will just tell, right. I mean, not to get into the weeds, but some of the sort of legal challenges are more procedural in nature.

Katie, I’m interested what are you hearing? Are you hearing anything from the AG’s office or their representatives on this issue up in New York? Because one of the messages we keep hearing, I think, on the ground is: the metrics aren’t well-defined; we don’t have consensus on what the metrics need to be here. But I’m curious what the scuttlebutt is in New York on that issue?

Katie Schwab:

The loudest voices on these issues are coming actually from the downstate progressives here. It’s really our City Comptroller, Brad Lander, who’s really attempted to leverage his power with the city pension funds to really push some very aggressive standards there, even more so than the state controller. Tish James has always been an ally of Brad Lander. They sort of came up in Brooklyn politics together. She hasn’t really weighed in a lot on that, to date, that I’m aware of, but it’s an issue that’s brewing a bit. Again, it’s one of those issues that’s challenging for businesses that do business across the country, right? Because what’s acceptable ESG in one jurisdiction is completely unacceptable in another. And so it’s something that we’re struggling with.

Jerry Kilgore:

I do believe your comptroller has been very aggressive on this issue.

Katie Schwab:

Extremely aggressive, yes, extremely aggressive.

Jerry Kilgore:

And it’s the comptroller saying that to do business in New York, which is a huge place to do business with the state, that you must have ESG standards in place?

Katie Schwab:

Yeah. He’s really doing a lot of analysis on what businesses are doing to green their own operations, control their own investments, where they’re putting their money. It’s pretty controversial here, and as I said, problematic for, for example, national banks that work across the country where people have different values about what’s appropriate and what’s not.

Jerry Kilgore:

Yeah, that’s exactly where Meghan was going with some of the red states Their legislature and their attorney general are weighing in to say, “If you have these standards, you can’t do business with the state.” So it’s putting companies in the middle of all this.

Meghan Stoppel:

Yeah, we heard some AGs, even some of the newest AGs, so General Kobach out of Kansas. In December he had just been sworn into office 30 days… Well, he hadn’t actually been sworn in. He had been elected, and he was publicly saying in December [that] pushing this type of legislation in his state was going to be a priority for his office. To just give the audience a sense of how important to some of these AGs this issue is, you hear them coming out publicly articulating this as a priority, post-election but pre-inauguration. It’s really fascinating, I think, because it’s an issue that, I don’t know, two, three years ago, I don’t think was on anybody’s radar at the AG level. So it really is fascinating.

I’m curious Jerry, what’s happening in Virginia on this issue? I mean, is it…

Jerry Kilgore:

Well, because we sort of have split government here, none of the legislation passed that would prohibit it, but the governor has a lot of authority to direct the types of investments and things of this nature. So we’re not as progressive as New York on the issue, nor are we as conservative as other red states on the issue. We’re sort of right in the middle, like a purple state.

Katie Schwab:

It is interesting though, how the attorneys general seem to have become just as divided as any other branch of government. I don’t know that that was always the case, as the chief law enforcement officer, that the kind of partisan nature of their work was quite as strong or pronounced as it seems to be now.

Jerry Kilgore:

Well, as I said at the beginning, they’ve taken this intersection of law and public policy now to a really extreme end where they… most attorneys general now have a legislative package that they push with the legislature and they try to change laws to increase their authority and their ability to prosecute.

Meghan Stoppel:

We can do a whole podcast alone on functionally how AGs’ offices, internally from the smallest offices to the largest offices, how do they monitor legislative developments? What’s being debated on the floor, what’s being written and proposed and enacted? Because I do think it varies from one office to another. I think some of the smaller to mid-size offices are a little less sophisticated. I mean, it’s probably a little bit of divide and conquer. Certain sections of the office are monitoring certain issues and certain bills because it relates to their subject matter expertise. I think in some of the larger offices, you’ve got those legislative liaisons that Jerry was referring to that are responsible for those legislative packages, monitoring the entire landscape and then deciding what information gets funneled out to the rest of the office for comment and review.

(25:39) But one of the things that we didn’t mention about this ESG issue that I think is really fascinating, and I think also speaks to just how the AGs have consolidated their authority in the last decade or decade and a half, is how they’ve taken the ESG issue and used their voice on that issue to try and impact what’s happening at the federal level. There used to be only a handful of issues where you’d see the AGs turning around and whether it was on a bipartisan front or in a partisan manner, weighing in with their federal counterparts, their federal consumer protection agencies, or even Congress, and commenting on proposed policy, proposed federal legislation, proposed rule makings. And it used to be on primarily consumer protection issues, the bread and butter issues like robocalls or maybe privacy. And we are seeing that now almost weekly.

There’s some issue that the AGs are getting together and either suing the federal government over, they’re submitting comments to a federal agency about or challenging the rulemaking on… they’re doing it right now with the SEC on the ESG issue. But I’m just curious, Katie, for your perspective on, do you see that intersection with your practice on the ground there in New York? How does the ability of the AG to turn to the federal government and share her voice with the federal government, does that impact the way that you do your work on the ground in New York, or does it not? I’m just curious.

Katie Schwab:

I can think of a couple of issues where Tish James’s voice has been important here in the city particularly. And I think the issue of gun control is certainly one, where New York’s longstanding gun control law in the city was struck down and it’s been appealed, and she’s been a really vocal proponent of finding a way to have reasonable gun control law in this extremely dense, compact city. And so that’s an area where her voice was brought in, where her legal expertise was important and where I think the city really relied on her.

And then again, reproductive rights, another area where the litigation arm of the Attorney General’s Office has been particularly important. So on those big constitutional, high profile issues where there have certainly been efforts to, in this particular jurisdiction, enhance the ability to have regulations in those areas, that’s an area where the attorney general has been very, very important.

Jerry Kilgore:

So talk to us, Katie, about just your day-to-day practice and what CPS does for our listeners out here. I think they would be interested to know, because most of the companies we represent have this 50 state presence.

Katie Schwab:

Oh, thanks for the opportunity. We and all of our colleagues in our various jurisdictions, we represent an array of clients who have interests that intersect with government, local government, or state government. They may be seeking procurement opportunities. They may be concerned about legislation. They may be interested in doing construction, building a building, needing discretionary approvals. They may be a nonprofit organization seeking funding for a capital project or for program. Any number of issues would bring you into contact with the Byzantine world of local government. And that’s where we are sort of your sherpa. We’re able to offer expertise and strategic advice on how to advance your objectives in an efficient and smart way, coming into contact with elected officials, coming into contact with the sort of permanent bureaucracy and finding a way to make sure that you can accomplish what you need to accomplish quickly and efficiently and with the most amount of success that we can possibly do. It’s been a pleasure working here. We have a really interesting team, folks who’ve worked in and around government for their entire careers, which may be five to 10 years, it may be 30 to 40 years; and lots of expertise and ability to navigate for different objectives. So It’s a pleasure to work with the clients that we have. They’re a wide array, it’s national and international companies, small nonprofits, major cultural institutions, all different kinds of organizations that we represent.

Jerry Kilgore:

You’ve been one of the leaders in Cozen Public Strategies from the beginning. So we so appreciate the opportunity to have you on the podcast to talk about this intersection of public policy and law. And it’s been just a fantastic conversation with you.

And Meghan, I really appreciate you participating and bringing your expertise on consumer protection and this broad array of consumer protection law and the Martin Act that the attorneys general are out here enforcing almost each and every day. So thanks to both of you. I know in March, we’re excited that we’ll be hosting on this podcast, the new attorney general of Nebraska, which is one of Meghan’s former states as well. And General Hilgers will be on to talk with us about how his transition has been going and what he’s seen going on in Nebraska. So thanks to everyone for listening to this podcast, and we look forward to the next podcast with General Hilgers.

Meghan Stoppel:

You have been listening to State AG Pulse, brought to you by Cozen O’Connor’s State AG Group. Research for this podcast was provided by our associates, Ryan Bottegal, Hannah Cornett, Keturah Taylor and Emily Yu, as well as our policy analyst, Elizabeth Hill Hodish. If you enjoyed this week’s episode, please leave us a five star rating and review. This will help our visibility and will allow other listeners to learn about the podcast. And of course, please tune in again in two weeks for our next episode.