Appellate, Constitutional &
Governmental Litigation Alert
September 21, 2010
Authors:
John P. Krill, Jr.
john.krill@klgates.com
+1.717.231.4505
Anthony Richard Holtzman
anthony.holtzman@klgates.com
+1.717.231.4570
K&L Gates includes lawyers practicing out
of 36 offices located in North America,
Europe, Asia and the Middle East, and
represents numerous GLOBAL 500,
FORTUNE 100, and FTSE 100
corporations, in addition to growth and
middle market companies, entrepreneurs,
capital market participants and public
sector entities. For more information,
visit www.klgates.com.
Congress Loves State Attorneys General as
Enforcers of Federal Law.
But is the Romance Doomed?
Congress seems to have developed a crush on the attorneys general of the fifty states.
In two of the biggest initiatives enacted to date during the Obama Administration,
Congress authorized state attorneys general to sue to enforce important federal
regulatory laws. An unanswered question is whether Congress has the power to
issue federal badges to these state law enforcers.
The new “Dodd-Frank Wall Street Reform and Consumer Protection Act,” Pub. L.
No. 111-203 (July 21, 2010), authorizes state attorneys general to bring suits in state
or federal court to enforce certain consumer financial protection provisions of Title X
of the act and the regulations that will be issued under it. The attorneys general may
seek damages, restitution, disgorgement, civil penalties and the costs of litigation,
among other legal remedies.
Similarly, 2009’s “American Recovery and Reinvestment Act,” Pub. L. No. 111-5
(Feb. 17, 2009), also known as the Stimulus Act, authorizes any state attorney
general to sue on behalf of citizens, or as parens patriae of the state, over violations
of federal health-care privacy laws. The attorneys general may obtain damages,
attorneys fees and costs.
Giving state attorneys general a role in federal regulation is not a new development
since the Obama Administration arrived. For example, President George W. Bush
signed 2008’s “Consumer Product Safety Improvement Act,” Pub. L. No. 110-314
(Aug. 14, 2008), which allows state attorneys general to sue to enforce certain rules
and orders of the Consumer Product Safety Commission. It even authorizes suit by
any state AG who merely thinks a “substantial product hazard” exists. Id. at §
218(b)(2)(C). A still earlier example is the 1976 amendment to the Clayton Act that
provided that “[a]ny attorney general of a State may bring a civil action in the name
of such State, as parens patriae on behalf of natural persons residing in such State”
to secure treble money damages for violations of the antitrust laws. 15 U.S.C. §
15c(a)(1).
Can Congress turn state officials into federal enforcers? A state attorney general is a
creature of state law. The state has a right to define the powers and duties of the
offices it creates. Because state legislatures appropriate funds for the operations of
their attorneys general, they also have the right to set priorities for them. An attorney
general could easily spend all his time looking for and prosecuting Dodd-Frank
cases. But if a state legislature wants its attorney general to focus on fighting violent
crime, and nothing else, by what authority does Congress beg to differ?
Appellate, Constitutional & Governmental Litigation Alert
The parens patriae provisions in these statutes raise
another question. Not all attorneys general have the
common-law powers covered by the rubric of parens
patriae. See, e.g., Texas vs. Ysleta del sur Pueblo,
79 F.Supp.2d 708, 713 (W.D. Tex. 1999). If state
law withholds such authority from a state officer,
how can it be conferred by Congress?
We know that Congress cannot compel state and
local executive officials to take part in implementing
a federal regulatory scheme. In Printz v. United
States, 521 U.S. 898 (1997) (the Brady Gun Law
case), the Supreme Court held that Congress could
not mandate that local law-enforcement officials
conduct background checks on gun purchasers. The
Supreme Court, though, has not decided whether
principles of federalism prevent Congress from
unilaterally giving discretion to state and local
executive officers, so that those who choose to do so
can act as federal enforcers. However, at least one
federal district court thinks that Congress cannot
unilaterally expand their job descriptions beyond
what is established by state law: “Although the
[Texas] AG attempts to characterize [a federal
statute] as providing him with authority to sue, such
a reading would in effect transform Congress into
the Texas legislature.” Ysleta del sur Pueblo, 79
F.Supp.2d at 713.
It may be that Congress can extend its hand to the
states, seeking their cooperation in enforcing federal
law, but then it is up to each state to decide whether
to take the offered handshake, choosing whether to
authorize its officials to expend effort on federal law
enforcement. The courts would then have to
examine state law to determine whether it authorizes
state officials to enforce a given federal law. See,
e.g., Pennsylvania v. Mid-Atlantic Toyota
Distributors, Inc., 704 F.2d 125, 129 (4th Cir. 1983)
(“[W]e hold that each of these state attorneys
general derives power from his respective state law
framework to prosecute this federal right of
action.”). The cases suggest that, if a state has
authorized its AG to enforce federal law, a matching
congressional authorization will be effective. See id.
at 129-30.
But, even if states authorize their attorneys general
to enforce federal law, there is another constitutional
question. The executive power of the United States
government is vested by Article II of the
Constitution in the President. Dodd-Frank and the
Stimulus Act, like their precursors, give discretion
to enforce federal law to officials who are not
appointed by the President, not under his direction,
not removable by him and in no way accountable to
him. The chief executive is denied the ability to set
priorities and to exercise sound judgment, or any
judgment, in the fundamentally executive function
of suing to enforce the law. The United States
Department of Justice is the means for the President
to exercise these executive functions. Although
Congress often authorizes the United States to
intervene in suits filed by non-federal actors, the
decision to sue or not to sue is usually the most
important one made by the Executive Branch.
When a state attorney general can initiate federal
enforcement actions, a decision by Justice to decline
a prosecution can essentially be overruled by a state
official.
According to the Supreme Court, “the power of the
President would be subject to reduction, if Congress
could act as effectively without the President as
with him, by simply requiring state officers to
execute its laws.” Printz, 521 U.S. at 923. This
principle recently came to the fore in Free
Enterprise Fund v. Public Company Accounting
Oversight Board, 130 S. Ct. 3138 (2010), where the
Supreme Court invalidated a provision of federal
law that insulated certain appointed federal officials
from being held accountable by the President. State
attorneys general are not even part of the federal
Executive Branch.
The question of the President’s authority under
Article II is not limited to the purported
empowerment of state attorneys general. It is
inherent in qui tam suits under the False Claims
Act, see 31 U.S.C. §§ 3729-3733, where private
parties seek to recover damages on behalf of the
government. See Riley v. St. Luke’s Episcopal
Hosp., 252 F.3d 749 (5th Cir. 2001). It is also
implicit in many cases where “citizen suits” are
authorized by federal law. See, e.g., Friends of the
Earth, Inc. v. Laidlaw Envtl. Services (TOC), Inc.,
528 U.S. 167, 209 (2000) (Scalia, J., dissenting)
(“[T]he [Clean Water] Act does not provide a
mechanism for individual relief in any traditional
sense, but turns over to private citizens the function
of enforcing the law. A Clean Water Act plaintiff
September 21, 2010
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Appellate, Constitutional & Governmental Litigation Alert
pursuing civil penalties acts as a self-appointed
mini-EPA.”).
These constitutional issues lead to questions of
public policy. Congress may feel that the federal
executive branch is too slow, too cautious or too
subject to countervailing influences to be trusted
with sole enforcement authority. Yet deputizing
non-federal officials as enforcers not only bypasses
the President and perhaps state legislatures, but may
also result in the outsourcing of justice. Fee-shifting
provisions are not uncommon in federal statutes,
encouraging private lawyers to take cases involving
public issues. Moreover, state attorneys general
sometimes enter into contingent-fee contracts for
legal services with private lawyers, who then sue in
the attorneys general’s names. This is already a
questionable practice, even for enforcement of state
laws, to the extent it puts plaintiff lawyers in the
driver’s seat in making public policy decisions
about law enforcement. When executive-branch
powers are placed in private hands, considerations
of justice and fairness in public matters can be
subordinated to the profit motive of the private bar.
The congressional empowerment of state attorneys
general raises constitutional and public policy issues
that we expect will be explored, as Congress with
increasing frequency offers them important new
functions.
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September 21, 2010
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