Image by Gerd Altmann from Pixabay

By Martin Milita

Previously we identified monitorships as a common judicial, regulatory, and conflict resolution tool.  In most instances, a Monitor is installed by agreement between a company or other public or private entity (referred to in these articles as the Host Organization) and a state or federal government department or agency (The Government).

When a sexual abuse scandal rocked Penn State, when Apple was found to have engaged in anticompetitive behavior, and when servicers like Bank of America improperly foreclosed upon thousands of homeowners, each tainted organization entered into a “Modern-Day Monitorship” agreement. (“Agreement” means an agreement between the Host Organization and the Government in which the Host Organization agrees to utilize the services of a Monitor and which establishes the scope of the monitorship.).” Contemporary monitorships are utilized in an array of contexts to assist in widely varying re¬ mediation efforts certainly on the Federal level but also among the states.

State attorneys general are unique constitutional officers in the American legal and political landscape. With broad powers to launch investigations and bring actions on behalf of states or consumers, state attorneys general can have a profound impact on corporations, foundations, individuals and investors. Moreover, most attorneys general are popularly elected, with direct electoral accountability for their actions, unlike nonelected federal prosecutors or regulators. Yet, despite their use in high profile and serious matters of organizational wrongdoing, monitorships on the state level are not an outgrowth of careful study and deliberate planning. Instead, state government monitor Agreements have too often been employed in an ad-hoc and reactionary manner, which has resulted in repeated instances of controversy and calls for reform. Underlying these calls for reform has been an implicit assumption that broad-based rules can effectively regulate all monitorships.

Accordingly highly regulated entities need to engage the following practical steps at a minimum:

  • Regularly interact with attorneys general, chief deputies and attorney general offices across the country
  • Keep abreast of enforcement trends – most notably including areas and industries where multi-state investigations are likely to proliferate
  • Engage with attorneys general on legislative promulgation, state statutes, regulations, policies and enforcement trends
  • Stay advised on regional, national and international enforcement trends
  • Understand the process for preventing an investigation launched by a single attorney general from developing into a multi-state investigation
  • Understand the terms of Monitors Agreements and model those that have been successful.

State attorneys general have a crucial part of the regulatory and enforcement landscape across the country.   With resolution of investigations and lawsuits against targeted businesses and industries costing billions in fines and other penalties entities of all kinds would be wise to consult their public policy

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