Bernie Nash:

State attorneys general, once little known officials, have emerged as legal and political juggernauts across the country. They make headlines every single day and they continue to grow in power and influence. As their states’ chief legal officers, AGs wield broad authority to investigate virtually any business practice across every single industry. Every company, including yours, that hires employees, makes or markets a product or service, interfaces with consumers or contracts with the government, may be and likely will be subject to scrutiny by an AG. If your company fits into one of those categories, and everyone does, this podcast is definitely for you.

Lori Kalani:

Welcome to State AG Pulse, presented by Cozen O’Connor’s State AG Group and proudly hosted by Bernie Nash.

Bernie Nash:

That’s me

Lori Kalani:

And Lori Kalani, and that’s me. State AG Pulse is a limited series podcast that will leverage our decades of experience to help business leaders navigate the upcoming 2022 state AG elections and understand and manage the related opportunities and risks. So now let’s jump right into this week’s episode. Welcome back to the State AG Podcast. I’m here with Bernie Nash and Meghan Stoppel from Cozen O’Connor, one of our law partners. For those of you that joined us last week, we featured our inaugural podcast with Karen White, from the Attorney General Alliance. I thought it was a great conversation, Bernie, thank you.

Bernie Nash:

Always, Lori, always.

Lori Kalani:

We ran down my typical AGs 101 for our listeners to make sure everybody understands the important roles of AGs. We ran down the open seats coming up this year and talked about why money matters in AG races. And today we’re going to have a great conversation with Meghan. So welcome, Meghan.

Meghan Stoppel:

Thank you, Lori. Nice to be here. Thank you, Bernie.

Lori Kalani:

We’re thrilled to have you. This week. We’re going to focus on Nebraska with you, Meghan, because you were the former head of consumer protection in Nebraska, under Doug Peterson. And I would be remiss if I didn’t mention you also worked in the Kansas AG’s office several years ago. So you certainly have an insider’s point of view and Nebraska’s an open seat. General Peterson has announced that he will not run for a third term. So maybe we should start with talking about who the candidates are and where we think that’s going. And then we can get into some of the things I know Bernie wants to talk about, which are, what makes this such an important race? So with that, Bernie, do you want to give a little background on Mike Hilgers, who I think is really the front runner and probably the next Nebraska attorney general, but I’ll let you talk a little bit about Mike.

Bernie Nash:

Yeah, there are three candidates running in the primary. And needless to say, the winner of the Republican primary will be the next attorney general of the great state of Nebraska. But the three candidates are Mike Hilgers, Jennifer Hicks, and Larry Bollinger. Mike is the current Speaker of the House. He’s a very accomplished attorney. He clerked for Judge Edith Brown Clement in the Fifth Circuit, a very accomplished jurist. He went to the University of Chicago law school where he was one of the editors of the Law Review and he created a very innovative and interesting law firm in Nebraska, but it’s really a national law firm. He has raised about $400,000 for this race in one of the largest states of the country, Nebraska. His opponents are Jennifer Hicks, who’s been a stay-at-home mom and homeschooled her kids for the last 18 years.

She was an adjudicator for the Social Security Administration. She has not filed a report, so it’s unknown, or at least to me, it’s unknown how much money she has raised. I rather think it’s in the few thousands, if anything at all. And then we have a Legalize Marijuana Now candidate, Larry Bollinger, a retired Air Force veteran and author. He has not filed the report either. So I will go out on a big, big limb, which hopefully Meghan will not saw off, at least not on this episode, and say that Speaker of the House, Mike Hilgers will be the next attorney general of the great state of Nebraska. But now that I got that off my chest, which I like to do, Meghan, tell us a little bit about the significance of this race, any political significance from this race, any business significance for this race? Tell us about what people might expect from the results of this race.

Meghan Stoppel:

Yeah. Thank you, Bernie. And I’m not going to saw that limb off as you put it. And I think your prediction is 100% spot on. Mike Hilgers is near certainly going to be the next attorney general for the state of Nebraska. He actually was a candidate in the 2014 race that led to General Peterson taking office in 2015. The political party in Nebraska isn’t going to be changing. Nebraska is a prototypical red Republican state as you could probably hear and take away from listening to your rundown of the candidate list. There is no Democratic candidate even on the ticket to date, and I would not expect that to change. So in essence, that primary between Mike Hilgers and Jennifer Hicks is going to determine who the next AG is going to be. And so I think from a political perspective there’s probably not as much significance to this particular race other than the fact that Mike is going to bring into office a significant background and familiarity, not only from his practice of law, but also his familiarity with the legislative process. It does make a difference. It does make a difference when you have an AG who understands that process, who has those connections in the state house, and oftentimes comes with somewhat of an agenda in terms of what they want to accomplish while they’re in office. I think actually this race in Nebraska may have more of an impact potentially from the business perspective. Neither of the candidates on the Republican side have articulated consumer protection or antitrust necessarily as a priority during their campaign. So far that certainly could change post-primary. But I think it does mean that there is some degree of uncertainty still within the state about how this election is going to affect the way businesses, both in Nebraska and outside of Nebraska, are viewed and treated by the attorney general’s office.

Doug Peterson has been a real leader on the national stage, both when it consumer protection, but also antitrust. And I think a lot of people are sitting back and wondering, is Nebraska going to fade into the background when General Peterson steps down? I think that’s an open question right now. We just don’t know what Mike Hilgers might do.

Lori Kalani:

Yeah, those are all great points, Meghan. And I would say that it’s hard to drop off cases is my impression. And so sometimes offices take different approaches and I know that General Peterson has endorsed the Speaker for AG and said, he’s got the right personality and the right skills for the job. I just wonder whether or not he’ll be able to perhaps not be as active as his predecessor was, but also maintain Nebraska’s position on the Executive Committee or in leadership roles on some of these cases. And to your point about the office being very active with respect to antitrust, it’s interesting because the companies that they’ve really focused on certainly are not Nebraska companies. That’s just one point I wanted to make on who the targets have been. There are some large companies in Nebraska, but certainly none of them have been targeted by this AG administration.

Meghan Stoppel:

Absolutely. And I think one of the things we also have to keep in mind in the context of this conversation about how a change in administration might impact Nebraska’s leadership role here is, Nebraska’s one of many states, right, oftentimes on these executive committees or within these leadership ranks. And so I would not expect a change in administration to have a profound effect on any of these cases necessarily, even if Nebraska would step down or step aside from one of those leadership roles. But we also have to keep in mind, right, that it is oftentimes the staff that is providing the support for these cases, right, that are driving these cases forward on a day to day basis.

And a lot of this may depend on to what extent someone like Mike Hilgers opts to retain some of those staff members. Whether it’s the assistant attorney and his general, whether it’s Doug Peterson’s current consumer protection chief who succeeded me in that chair when I left to actually come join Cozen O’Connor. And so if he does opt to retain some of that institutional knowledge within the office, I think you’ll see less change within how Nebraska’s leadership role is perceived both amongst other AG offices, but within the business community, right, you’ll see less of a sea change there.

Bernie Nash:

I think Doug Peterson played a very unique role in the bipartisan multi-state tech investigations. He has a lot of credibility with his peers. He really made it bipartisan, and he brought a lot of antitrust knowhow to the development of the theories and to create the cohesiveness, which is necessary to sustain a multi-year investigation/litigation as is now ongoing. I think there will be a loss upon his passing. Now Nebraska may well maintain a leadership role and continue as you said, because of the staff, but it’ll take some time for General Hilgers to get known by his colleagues, to get respected by his colleagues and to pick up the mantle of the Republican leadership of this bipartisan multi-state.

Meghan Stoppel:

I 100% agree, Bernie, and you have to give General Peterson the personal credit, I think for that. There’s often times a distinction between whether it’s the front office or the actual AG or the staff driving certain activity within an office. And sometimes it’s very obvious where that momentum is coming from. General Peterson was always very clear that bipartisanship was of a high priority for him. And hearing both sides of an issue was also a high priority for him. And I think that is the open question I think that you’re referring to in part Bernie is whether or not his successor is going to put such a high value on bipartisanship. Because I think from having spent many years working with General Peterson, it was very clear to me that he saw bipartisanship as a way to not only maintain credibility in the AG’s office, but to grow credibility within the AG community. And I think that’s just an open question as to whether Mike Hilgers will come in with that same perspective or not. I think he will. I think he will come in with an open mind.

Lori Kalani:

Yeah. I anticipate there’ll be a lot of effort by other AGs across the country who have worked on these cases together to really bring the new AG into the fold and not lose that bipartisanship because Nebraska really has been a leading Republican state. So I think it’s likely that it will be a combination of probably look, Jon Bruning, the former AG before Doug Peterson is still very active in the AG community. So I anticipate that Hilgers will get an earful from former Attorney General Bruning and he’s obviously talking to General Peterson. So I think that things will move forward as they have been to some extent. But I do think it’ll be an opportunity for companies who are the target of some of these investigations to take the opportunity to try to persuade or advocate for the positions that they think are right.

Bernie Nash:

Yeah. There’s no question about that. Mike Hilgers is very, very bright. I referenced his credentials and his clerkship. You don’t become Speaker of the House if you don’t know how to get along with people and influence people. Hilgers is, I think, eight years or so in the legislature. And I’ve met with him, I think at least twice so far. And he definitely wants to reach out. And he had different perspectives from different people. Meghan, to change the topic for a moment, General Peterson’s predecessors each serve for 12 years, and there’s no term limits as far as I know in Nebraska, certainly not after eight years. So why is General Peterson looking to change his career?

Meghan Stoppel:

That’s a great question, Bernie and you’re correct; there are no term limits for the attorney general in Nebraska. If General Peterson had wanted to run for a third term, he certainly would have been well positioned to do so. I do, I think it’s a big mystery even to some of General Peterson’s closest acquaintances and his colleagues right, as to why he’s not running for a third term and why he’s choosing to step down at this moment. He is being pretty tight-lipped about his plans. There’s speculation swirling that he may step in as the next Executive Director of the National Association of Attorneys General or NAAG as we refer to it. They have an Executive Director that is planning to step down later this year. But right now, no announcements have been made by either General Peterson or NAAG.  If General Peterson doesn’t step into a leadership role at NAAG I think it is very likely that he returns to private practice. Just in passing, I can tell you that from my three and a half years working with him in Nebraska and alongside of him, he is a litigator at heart. He would tell stories to his staff about when he was in private practice litigating cases before he became attorney general and it was very clear to me that he wanted to remain plugged into the litigation that was happening within the attorney general’s office. As a consumer protection chief, that was quite helpful for me to know that I was reporting to an attorney general that not only cared about what I was doing, but understood what I was doing and more importantly, what we were trying to do in some cases. If I needed to go to him about a particular matter or an issue that we were having, more often than not he was right on top of that case, or within a matter of minutes I could very quickly get him up to speed on the case that I was talking about, where we were at procedurally. And that was a luxury that we had in a relatively small office. I think it is one of the things that most people don’t appreciate or understand about why General Peterson is really a driving force in some of these antitrust cases. And that is that he sees the litigation potential in these case. He would actually, quite frankly, like to see these cases litigated. He sees the potential in these cases to make case law and the need to clarify the law and he enjoys litigation. And so if I had to speculate, Bernie, you know if the NAAG opportunity doesn’t come to pass or if he chooses to do something else, I think there’s a really good likelihood that he’s going to turn back to private practice. But he does have strong feelings about bipartisanship and NAAG may be an opportunity that’s difficult for him to pass up. But I would not be surprised if he goes back into a role where he has the opportunity to really get his hands on some cases and do litigation because he is a fantastic attorney. And while he certainly could ride off into the sunset and enjoy some well-deserved time with his grandkids, I don’t think that’s what we’re going to see him doing.

Bernie Nash:

Yeah. I think you’re spot on. Unlike his predecessors, some people have litigation in their blood and others have politics in their blood. And I do think that we’re not going see your former boss, Doug Peterson, run for office again.

Lori Kalani:

I do want to say something that Doug Peterson has told me, and I think it’s worth sharing for our listeners. He said that when he came into office, he was very skeptical about meeting with companies and that he just wasn’t sure how he felt about it. And frankly, was just very skeptical. And he said that over time, he came to appreciate and really rely on the information that companies give to him and talk with him about in the role as AG, because I think that is very important, whether it’s something that can help an AG with their priorities in their own legislature, or whether it’s helping them make the decision about the discretion they have with respect to various companies or industries.

And Meghan, you could probably speak to this better than I could, but I think offices have limited resources and there’s probably a whole host of companies or industries or issues to pursue as an AG, but sometimes having the conversations with various businesses and companies and GCs and lawyers is helpful, I think to sort out priorities or frankly understand an issue better that an AG might end up pursuing.

Meghan Stoppel:

One of the things that I just observed anecdotally working for General Peterson is that the integrity of that office is incredibly important to him. And it’s one of the reasons why maintaining that credibility just from the outsider’s perspective is so important to him. That’s probably one of the reasons why initially there may have been some skepticism on his part about taking those meetings, right, about the optics of what that does to the integrity of the office from the public’s perspective.

And I think once you get into that role, especially once you’re into the bowels of the organization and you realize you are faced with limited resources, you’re having to make some really tough decisions about what you’re going to do on a day in and day out basis, I think what you realize both as a consumer chief and as a member of the front office, or as an attorney general, is that having those meetings is a really efficient way to gather information and make those sometimes very gut wrenching decisions about what you’re going to investigate, what you’re not going to investigate, whether or not you’re going to put your policy bona fides behind a particular issue that session or not.

We could probably do an entire podcast on the Nebraska Unicameral and how the AG’s office interacts with the legislative body there in Nebraska. But they do have a reputation for being very discriminate and what issues they bring to the Unicameral every year, because there’s this recognition that when the attorney general throws their weight behind a particular issue or a bill, that means something. In a state as small as Nebraska, it really means something. And so there’s a lot of influence there to be capitalized on. And I think General Peterson especially realized that, but folks like his Chief of Staff especially understood that. So one of the things that’ll be interesting to watch as General Hilgers probably takes office next year and works through his first session with the Unicameral is whether or not that changes, right? Do we see a flood of bills being pushed by the office or not? I think that’s an open question as well.

Lori Kalani:

Yeah. And I just wanted to add something about meeting with companies and industry representatives. It’s funny because when I started doing this work many years ago, as many people know, including Bernie and you, Meghan, I was inhouse for a company. And I just said to myself, “We have consumers in every single state. And the only narrative that AGs are hearing is likely coming from consumers who are unhappy with our product. And when you have a large scale company with hundreds of thousands of consumers in a particular state, there’s always bound to be some complaint or some issue that comes up.” And sometimes it’s justified and sometimes there are some errors, but I think that many years ago, it was newer to offices to have Lori Kalani knocking on their door and saying, “Hi, I’m here from XYZ company. And I want to come in and talk to you about our business practices.”

I wouldn’t say there were skepticism necessarily, but I think it was less typical. And I had many offices say to me, and at the time I went to all 50 and I said, “I have to be the one to tell you about my client and their business practices. So you hear it from us.” And I remember dozens of them said, “Wow, no companies ever come here to talk to me. You’re the first person who’s come to Lincoln or Helena, Montana.” And I certainly racked up the miles and it took me a year and a half to get to all the offices, but it was extremely effective, I think, to start to have those dialogues.

And I think today as companies grow and many of them are virtual to some extent, there’s not a headquarters necessarily, a brick-and-mortar where people come, it’s even more important to have those conversations. I think that after the election, especially with all of the new AGs, there’s eight or nine open seats, and then there’s a couple of elections where the AG could change. I think you’re going to see a lot more of these types of meetings and briefings happening in the new year, in 2023.

Bernie Nash:

There’s no question, Lori, that personal contact alters opinions and is critical for our clients. And we give our clients this advice and invariably, they take it to meet AGs, to define yourself, to explain what your business practices and policies are, why you’re doing certain things, because otherwise, you’ll be defined by someone else. It doesn’t mean that everything you do meets with approval of the AG, but if they understand the why, it’s easier to work out a resolution and it’s easier not to be demagogued in the media.

Meghan Stoppel:

It is a very, very effective strategy for deescalating a matter for helping the attorneys general understand what it is that your organization does, and quite frankly, for finding resolution. Because so much of what sometimes the attorneys on the other side in the AG’s office are doing is based in quite frankly, misunderstanding. And it’s not because they’re not smart people, it’s because they’re working with incomplete information. And that’s understandable, right? They do not work for our clients. They don’t understand what’s going on within our clients’ organizations on a day-to-day basis. And it’s incumbent upon us now to help them understand what is going on and to fill in those gaps for them. And sometimes when we do that, we’re not only doing a service for our clients, but we’re doing a service for the attorneys general and their constituents as well.

Lori Kalani:

Yeah. I agree with that and making them more efficient. Right? And so the old adage that, “Why would I talk to an AG? I don’t want to be in their target.” We always chuckle and say, “You’re a national company selling to hundreds of thousands of consumers or providing your service. You’re already essentially in the target. You can only improve your chances of a good outcome by making yourself present.” So I completely agree with that. And once a week tell clients that.

Bernie Nash:

Well, Meghan, I think this was terrific. We are thrilled that you are now our partner and you are with us instead of a formidable opponent on the other side, and your insights as a former chief and as a former consumer prosecutor are very insightful, very helpful. And I’m confident that our audience appreciates you being with us.

Meghan Stoppel:

Thank you for having me, Bernie. And thank you, Lori. It’s been a pleasure being here and yeah, I hope you found this informative.

Lori Kalani:

Absolutely. And enjoy always talking to you. And next week, we’re going to talk with our law partner, Paul Connell, who is the former chief deputy from Wisconsin. And we’re going to talk about the state of Arkansas. Because although he lives in Wisconsin and works out of our Chicago and Minnesota offices, Paul is our in-house expert on Arkansas. Believe it or not. So please join us next week for the podcast. We look forward to letting you know everything we know and have a good week.

Lori Kalani:

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, Gianna Puccinelli and Keturah Taylor, as well as our policy analyst, Elisabeth Hill Hodish. If you enjoyed this week’s episode, please leave us a five star rating and review. That will help our visibility and will allow other listeners to learn about the podcast. And of course, please tune in again next week.