Emily Myers, NAAG Antitrust and Powers and Duties Chief Counsel
Several interesting decisions were issued by federal and state courts last year regarding the authority of attorney general offices. They address a variety of issues including the extent of the subpoena power under a state’s consumer protection laws, the validity of an attorney general opinion, how cases should be styled, when an attorney general can intervene in an action, and other issues that interpret state law concerning the duties and responsibilities of the office.
Two decisions were issued in Arizona in the last six months. One involved the authority of the attorney general in regard to the representation of the Arizona Game and Fish Department. The plaintiffs filed suit against the department to escape penalties imposed against them for the taking of big game. When the attorney general filed a motion to dismiss, the plaintiffs alleged that only the Maricopa County attorney could represent the department. The trial court agreed and disqualified the attorney general.
Arizona statutes provide that”[E]ach county attorney shall prosecute and defend on behalf of the state, in all courts of the county, all actions, criminal or civil, arising under this title in which the state, [state game and fish] commission member, or [state game and fish] department employee is a party thereof.” A.R.S. § 17-103. However, A.R.S. § 41-192 authorizes the attorney general to “[b]e the legal advisor of the departments of this state and render such legal services as the departments require.” The attorney general argued that this statute impliedly repeals the authorization of the county attorneys. In Harris v. Brain, the appellate court found that, even if there were no implied repeal of section 17-103, that statute does not limit or prohibit the attorney general from representing the department under the attorney general’s general statutory authority. The court held, “[T]he attorney general’s decision to undertake the representation (with full consent of the Department) is entitled to deference.” 1
The other Arizona case involved the authority of the attorney general to investigate fair housing complaints under state law and recover attorneys’ fees against a municipal corporation. The City of Tempe sought a preliminary injunction and a declaratory judgment that the attorney general could not investigate a fair housing complaint made against a municipal corporation.
At the trial level, the court held that the attorney general did not abuse his discretion or act arbitrarily and capriciously by declining to dismiss the complaint, without an investigation, against Tempe under the Arizona Fair Housing Act. The trial court also found that the attorney general is mandated to conduct an investigation, and “Tempe thwarted the investigation,” such that it could not “now complain that the [AAG] abused his discretion by not dismissing the complaint when the investigation [was] not complete.” The trial court dismissed Tempe’s complaint and awarded the state $108,090 in attorneys’ fees. Tempe appealed.
The appellate court upheld the trial court’s ruling, holding:
Based upon this statutory and regulatory framework, the [attorney general] was within its discretion to continue the investigation beyond receipt of the documents provided by Tempe. It is the [attorney general’s] duty to investigate all complaints, and that duty cannot be circumvented by a respondent who simply denies the claim and unilaterally declares it resolved on the basis of the limited information the respondent chooses to provide. Tempe has shown no arbitrary or capricious action by the attorney general.
It also upheld the award of attorneys’ fees despite Tempe’s argument that its complaint was not a lawsuit within the meaning of the relevant statute. The appellate court disagreed, stating: “It is clear the filing of Tempe’s complaint seeking declaratory and special action relief in the superior court initiated an adversary proceeding, or lawsuit, against the attorney general” and, therefore, the attorney general, as the prevailing party, was entitled to fees.2
In Mississippi, a federal court addressed the extent of the attorney general’s investigative authority under the state’s Consumer Protection Act. The Mississippi Attorney General’s Office launched an investigation against Google for not removing from its website obnoxious, tasteless, and criminal content posted by third parties. As part of that investigation, the office issued a 79-page subpoena to Google. In response, Google brought an action in federal court, alleging that the subpoena coupled with public statements by the attorney general regarding an intention to bring legal action against Google, violated Google’s rightunder the Communications Decency Act, the First, Fourth, and Fourteenth Amendments, and other federal statutes. Google sought an injunction to ban the attorney general from enforcing the subpoena as well as instituting any civil or criminal proceedings addressing Google’s making third-party content accessible to Internet users.
Finding that there was federal question jurisdiction, the court then turned to a discussion of whether
Younger abstention should apply. In Younger v. Harris, the Supreme Court held that federal courts must abstain from exercising jurisdiction over an action brought by an indicted state criminal defendant seeking to enjoin the pending state criminal case against him. With respect to civil actions, the doctrine only applies, for purposes of this case, to certain “civil enforcement proceedings.” The issuance of a subpoena does not amount to a civil action or criminal action, but is rather an investigative tool, so abstention was not appropriate. The court also noted that Younger abstention does not apply when a state court proceeding was brought in bad faith or for the purpose of harassing the federal plaintiff. The court concluded that the attorney general’s public statements stating his intent to take legal action against Google and his issuance of a 79-page subpoena after Google declined to fulfill certain requests showed evidence of bad faith.
Turning to the standard of review for the issuance of a preliminary injunction, the court found that Google is likely to prevail on the merits of its claim under the Communications Decency Act, the First and Fourth Amendment, and its claim of preemption under the Federal Copyright Act, the Digital Millennium Copyright Act, and the federal Food, Drug, and Cosmetic Act. It also found that there was a substantial threat of irreparable harm should the injunction not be issued and that the issuance of the preliminary injunction would not “significantly thwart” the attorney general’s ability to investigate and enforce violations of Mississippi’s consumer protection laws. The court, therefore, granted Google’s motion for the issuance of a preliminary injunction.3
A Missouri court addressed the question as to whether the attorney general may avoid a subpoena in an employment case.The plaintiff in this case was fired from his job as an investigator at the Missouri Attorney General’s Office. He sued the office, alleging age and disability discrimination and sought to depose the attorney general. Instead, the deputy chief of staff appeared and was deposed; he testified that the attorney general had no direct involvement in or firsthand knowledge of the plaintiff’s termination. At trial, the plaintiff again subpoenaed the attorney general; at the request of the attorney general’s office, the court quashed that subpoena. Before the trial began, the plaintiff asked the court to require the attorney general to testify, noting that, under Missouri statutes, the attorney general may appoint and fix the compensation of investigators like the plaintiff, who serve at the pleasure of the attorney general. The plaintiff argued that the attorney general had illegally delegated this authority and that he should be required to explain that delegation. The court declined to issue the subpoena, and the attorney general’s office prevailed on all claims. The plaintiff appealed.
On appeal, the plaintiff argued that 1) he had a right to call any witness to meet the issues raised in the pleadings, 2) the subpoena was not unreasonable or oppressive, and 3) the trial court precluded him from presenting evidence necessary to prove the issues he raised. The attorney general’s office answered that the plaintiff did not have a compelling need for the attorney general’s testimony and had suffered no prejudice from the court’s decision. The appeals court cited past decisions involving discovery from “top-level” employees which limited pre-trial discovery because of the unnecessary annoyance, burden, and expense “where persons lower in the organization may have the same or better information.” The court held that the attorney general’s office had shown good cause for quashing the trial subpoena because the attorney general was not involved in the employment decisions regarding the plaintiff and did not have information about plaintiff’s claims. Therefore, requiring the attorney general to testify at trial “would substantially impede his ability to perform his duties as Attorney General for the State of Missouri.” Finally, the attorney general’s testimony about his delegation of hiring and firing authority could not have helped the plaintiff prevail on his discrimination claims.4
In a second Missouri case, the court answered the question regarding the right of the attorney general’s office to intervene in a case regarding removal from the sex offender registry. A registrant on the Missouri sex offender registry petitioned the court for removal from the registry, providing copies of the petition to the local prosecutor. The state statute does not require that notice be sent to the attorney general. The court held a hearing, at which the local prosecutor appeared but did not offer any argument in opposition to the petition. The court granted the petition. The attorney general received a copy of the court’s order two months later. The attorney general filed a motion to intervene as a matter of right on behalf of itself and the Missouri State Highway Patrol, seeking to set aside the order. The court denied the attorney general’s motion to intervene, and the appellate court affirmed that denial. The attorney general then appealed to the Missouri Supreme Court.
The attorney general argued that the court erred in overruling his motion to intervene because, pursuant to Rule 52.12(a), the office has the unconditional statutory right to intervene when a statute confers such a right, citing Mo. Rev. Stat. § 27.060 as conveying that right. The statute provides:
The attorney general shall institute, in the name and on the behalf of the state, all civil suits and other proceedings at law or in equity requisite or necessary to protect the rights and interests of the state, and enforce any and all rights, interests or claims against any and all persons, firms or corporations in whatever court or jurisdiction such action may be necessary; and he may also appear and interplead, answer or defend, in any proceeding or tribunal in which the state’s interests are involved.
The defendant first argued that the attorney general’s intervention was not timely. The court disagreed, holding that section 27.060 expressly states the attorney general may appear in “any proceeding or tribunal,” and that there is no restriction on the time in which the attorney general may appear and defend in an action where the state’s interest is involved. The court next held that the attorney general has an unconditional right to intervene in this matter. The court noted that the Missouri attorney general has both statutory and common law powers, and, while his common law powers are not limitless, they can only be restricted by a statute enacted specifically for the purpose of limiting that power. In this case, “[t]he plain language of this statute only limits the attorney general’s power to appear, defend, and interplead so long as the state’s interests are involved. The state has an interest in a circuit court’s judgment ordering the removal of a sex offender’s name from Missouri’s sex offender registry.” Finally, the court addressed the defendant’s argument that the state was already represented in the case by the local prosecutor. The court held that the plain language of the statute does not extinguish the attorney general’s right to appear in a proceeding in which the state is represented by a local prosecutor. It stated that, if the legislature had wished to impose that limit, it would have done so.5
In a third case from Missouri, the issue confronting the court was whether a Civil Investigative Demand (CID) under the state consumer protection statute could be served in light of the Electronics Consumer Privacy Act (ECPA), 18U.S.C. §2701 et seq. The Missouri attorney general served a CID on Charter Communications, Inc., in connection with an investigation of possible violations of Missouri’s consumer protection laws by one of Charter’s customers. The CID sought basic subscriber information and “non-content” information within the meaning of the ECPA. Under the terms of the act, that type of information is subject to production pursuant, to among other things, an “administrative subpoena authorized by a Federal or State statute.” The trial court determined that the CID was not authorized by the ECPA and was, therefore, not enforceable. The attorney general appealed.
The court of appeals described the ECPA, noting that, in this civil case, the only way the attorney general could obtain basic subscriber information under the ECPA was through “an administrative subpoena authorized by a Federal or State statute.” Missouri’s CID authority was patterned on the provisions of the federal Antitrust Civil Process Act. The court examined decisions interpreting that act and noted that courts have analyzed CIDs as administrative subpoenas because the attorney general, although not an administrative agency, is performing an administrative function in enforcing the Missouri consumer protection laws. Turning to the argument that the CID violates Article I, Sec. 15 of the Missouri Constitution (equivalent to the Fourth Amendment of the U.S. Constitution), the court held that the issuance of CIDs would constitute a search of Charter’s records, but that the search was reasonable for four reasons: 1) The Missouri statute authorizing CIDs allows pre-compliance judicial review; 2) the CID complied with the authorizing statute; 3) the CID sought information relevant to the administrative inquiry and 4) the CID was not too indefinite or too broad. The court thus ordered Charter to comply with the subpoena.6
In another case regarding the subpoena authority of an attorney general’s office, a New York court addressed whether a subpoena could be issued to third parties in a charities investigation. The New York Attorney General’s Office investigated the Friends of the Fighting 69th, Inc. (Friends), a New York non-profit corporation that purported to support the Manhattan-based New York Army National Guard 69th Infantry Regiment. After the non-profit failed to file required forms with the Internal Revenue Service and after the attorney general received several complaints about mishandling of contributions, the office issued a subpoena to a former director of the organization who was no longer involved with the charity. The former director failed to appear for his scheduled investigatory examination, and the attorney general’s office filed suit to compel his appearance. The defendant argued that, because he was no longer involved with the charity, he did not fall within any of the categories of persons or entities who are subject to the control of the attorney general.
The court granted the motion to compel the former director’s testimony. The court stated that, under the New York Non-Profit Corporation Law, “the Attorney General is responsible for the supervision of not-for-profit corporations, which is in addition to his common law parens patriae authority to protect the public interest in charitable property.” According to the court, the attorney general has broad investigatory powers in connection with this authority:
The attorney general, his or her assistants, deputies or other such officers as may be designated by him or her, are empowered to subpoena any trustee, agent, fiduciary, beneficiary, institution, association or corporation or other witness [emphasis in original],
In light of these broad powers, the court granted the attorney general’s petition to compel the former director’s appearance.7
The question in an Ohio case was whether collection efforts on behalf of a state agency must be brought in the name of the attorney general or in the name of the agency represented by the attorney general. The Ohio Department of Health (ODH) enforces the state’s Smoke-Free Act, which prohibits smoking in public places and places of employment. If an establishment is a repeat offender under the Act, ODH must issue a written proposed finding of violation and a proposed civil fine. Although the defendant in this case did not contest the fine or appeal its imposition, neither did it make payment. After 45 days, as permitted by the law, ODH referred the matter to the attorney general to begin the collection process, which was brought in the name of ODH. The defendant then sued, challenging the action on the grounds, among other things, that only the attorney general could obtain an order from the court to collect unpaid fines and that ODH was authorized only to enforce equitable remedies.
The court overruled a prior decision in which it had held that the attorney general must bring a suit in his own name, rather than that of the agency, to collect overdue fines. The court analyzed the relevant statute, which provided, “if the amount is not paid within forty-five days after payment is due, the officer, employee, or agent shall certify the amount due to the attorney general.” The defendant argued that this language required the transfer of the debt to the attorney general, but the court held that the statute merely makes the office of attorney general (OAG) the attorney for ODH and, therefore, tasked with making efforts to collect the amount due. “The statute does not specify in whose name suit must be brought and, therefore, does not prohibit the OAG from captioning the case in ODH’s name.” In this case, “the OAG as counsel for ODH may file a collection action naming ODH as plaintiff.”8
An interesting case arose out of an Oklahoma attorney general’s opinion regarding the use of a sales tax by a county board. The voters of Canadian County, Okla., through a referendum, approved a third of a cent sales tax “to be used for financing, construction and equipping of a juvenile delinquents detention facility and juvenile justice facilities in Canadian County, including design, construction, expenses, operations, equipment and furnishings.” Since the tax has been in effect, the revenue has been used for juvenile facilities and a variety of juvenile programs and services in Canadian County. After questions were raised about the use of the tax revenue for programs and services, rather than just for the juvenile justice facilities, the attorney general issued an opinion that the referendum did not authorize use of the tax for the funding of programs, salaries, and expenses related to operation of the juvenile bureau or even certain aspects of the physical facilities. In view of the opinion, the Board of County Commissioners stopped using the revenue for that purpose. Some citizens of the county challenged the Board’s actions and sought a declaratory judgment seeking to find the opinion invalid and not a legal basis for the Board to cease using proceeds from the tax to fund the ongoing juvenile programs and services. The trial court issued a temporary restraining order and the Board appealed.
The Oklahoma Supreme Court noted that Oklahoma statutes authorize a county to impose a sales tax through a referendum procedure. The statute states, “The county shall identify the purpose of the sales tax when it is presented to the voters.” The court found that the citizens’ injury was a direct result of the attorney general’s opinion. “An Opinion of the Attorney General is binding on those officials affected by it,” but the attorney general’s opinion is not binding on a court. In this case, the court examined the resolution approved by the voters, including the language stating that the measure was an emergency one “by reason of said County being without adequate funds with which to furnish required public services.” The court also cited an earlier attorney general opinion for the proposition that “a reasonable measure of flexibility is allowed in a statement describing how tax proceeds will be spent, as long as the general purpose of the proposition is approved by the voters.” In light of this prior opinion and the testimony of local public officials as to the intentions of the drafters of the referendum, the court held that the citizens were entitled to a temporary restraining order, thus freeing the Board to continue funding the programs out of the tax revenues. 9
A final decision, out of Texas, addressed the question of whether an assistant attorney general (AAG) was protected under the state’s Whistleblower Act. A Texas AAG alleged that two senior attorneys in her section sought to coerce her to commit perjury regarding her interactions with a judge. She refused. The attorney general’s policy requires an employee to report a potential criminal violation to his or her division chief, who must then refer it to the OAG’s Office of Special Investigations for further action. Under that policy, employees may not launch their own investigation or, absent exigent circumstances, refer a criminal violation to outside law enforcement and may be disciplined for not following the policy. The AAG reported the matter to her division chief, was assured that there would be an investigation, and was told not to discuss the matter. She alleged that she was eventually fired in retaliation for her report.
The state’s Whistleblower Act creates an exception to the state’s sovereign immunity and allows suit by “a public employee who in good faith reports a violation of law by the employing governmental entity or another public employee to an appropriate law enforcement authority.” Tex. Gov’t Code § 554.002(a). An appropriate law enforcement authority is defined as one that the employee “in good faith” believes can regulate under or enforce the law alleged to be violated or investigate or prosecute a violation of criminal law. The trial court found that the AAG could invoke the Whistleblower Act, and the court of appeals affirmed. The attorney general appealed.
The Texas Supreme Court, citing earlier cases, overruled the lower courts.
An authority’s power to discipline its own or investigate internally does not support a good-faith belief that it is an appropriate law-enforcement authority. . . . Instead, the authority must have outward-looking powers. “[I]t must have authority to enforce, investigate, or prosecute violations of law against third parties outside of the entity itself, or it must have authority to promulgate regulations governing the conduct of such third parties.”
In addition, a policy requiring reports to supervisors within the agency is not sufficient for a good-faith belief that the employer is an appropriate law enforcement authority. According to the court, “Although such a policy permits employees to reasonably believe reports will be sent to an appropriate law-enforcement authority, it provides no reason to believe the reported-to supervisors are appropriate authorities.”
The court held that the AAG’s report to her division chief did not fit the criteria for protection under the Whistleblower Act. She had no reason to believe that her division chief would be able to investigate the report as a crime, nor did the division chief have the authority to “regulate under or enforce the law alleged to be violated.” The AAG argued that this interpretation gave employees in the attorney general’s office no safe way to report criminal violations because, under the policy, they would risk discipline for contacting a law-enforcement authority. The court found that the Whistleblower Act would protect an employee in those circumstances and that the OAG policy cannot do what the act prohibits by disciplining an employee in those circumstances.
The AAG also argued that the OAG handles some criminal law matters and, thus, is an appropriate law-enforcement authority. The court disagreed, stating, “The authority of some OAG divisions to investigate or prosecute crime does not transform the entire OAG into an appropriate law-enforcement authority. . . . An entire agency does not become an appropriate law-enforcement authority merely because some divisions have such power.” The AAG’s report did not meet the requirements of the Whistleblower Act, and the state was therefore immune from suit.10
1 2015 Ariz. App. Unpub. LEXIS 964 (Ariz. Ct. App. July 30, 2015).
2 City of Tempe v. State of Arizona,351 P.3d 367 (Ariz. Ct. App. June 4, 2015).
3 Google, Inc. v. Hood, 94 F. Supp. 3d 584 (S.D. Miss. 2015)
4 Wilkins v. Offices of the Missouri Attorney General,464 S.W.3d 271 (Mo. Ct. App. 2015).
5 Dunivan v. Missouri,466 S.W.3d 514 (Mo. 2015).
6 Missouri v. Charter Communications, Inc, 461 S.W.3d 851 (Mo. Ct. App. 2015).
7 In the Matter of Eric T. Schneiderman, 2015 N.Y. Misc. LEXIS 1732, 2015 NY Slip Op 30851(U) (N.Y. Sup. Ct. May 18, 2015).
8 State of Ohio Department of Health v. Mayfly Tavern, 35 N.E.3d 588 (Ohio Ct. App. 2015).
9 Edwards v. Board of County Commissioners, 2015 OK 58 (Okla. 2015).
10 Office of the Attorney General v. Weatherspoon, 472 S.W.3d 280 (Tex. 2015).