State AGs Call on National Org to Return Funds to States

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The National Association of Attorneys General sits on $280M in assets

In a recent letter, a group of 12 state attorneys general called on the National Association of Attorneys General (NAAG) to return funds the group is retaining back to member states

“ATRA agrees that NAAG should immediately distribute the monies collected from state-led lawsuits back to each state’s general treasuries,” American Tort Reform Association President Tiger Joyce said. “This action would help ensure that they are operating in the interest of the broader public, not as a means to foster additional lawsuits for a select group of personal injury lawyers.”

The letter states, “While NAAG should continue to maintain a reasonable operating budget to meet its mission, we do not understand how that mission requires that NAAG retain over $280 million in assets and the associated income from those assets. As NAAG’s former executive director has acknowledged, this money belongs to the States. For these reasons, we write to ask NAAG to commit to discussions regarding mechanisms for returning these assets to the States.”

“A good starting point would be distributing the monies sitting at NAAG that have been collected from state-led lawsuits back to each state’s general treasuries and not to the state’s office of the attorney general,” Joyce said.

NAAG is not equipped to determine how the money should be used for any potential abatement. Distributing the money back to the states will ensure that it is used for its intended purpose: to compensate victims and cover damages caused by the original lawsuits. Perhaps most importantly, distributing the money back to the states will help relieve the state attorney general of monetary responsibilities intended for the other branches of state government.  

By changing distribution to a pro-rata basis, NAAG can ensure that the money is used appropriately and that no state attorney general is inversely affected by receiving significant funds.

“Frankly, if AGs are going to take the money to grease the litigation machine, they should save their outrage and stop pretending to work in the public’s interest,” Joyce said.

Moving forward, NAAG should not receive the funds at all. Any future settlements should go directly to a respective state’s treasury, with the state then being responsible for promised repayments.

“There’s a reason monetary responsibility rests with the people’s elected representatives and not with state agencies,” Joyce said. “For the sake of accountability and transparency, NAAG cannot send checks going forward.”

Lastly, NAAG needs to provide more transparency regarding its educational programs to state attorneys general and ensure that any bias in programming has counter-messaging.

“If your programming is just plaintiff attorneys coming in and instructing members to pursue mass-tort cases, it’s not hard to guess what will happen,” Joyce said. “The people’s chosen litigator cannot have their office fall victim to messaging bias.”

ATRA published a report earlier this year outlining these issues in detail and recently published an op-ed highlighting NAAG’s litigation funding. The Wall Street Journal has also brought attention to NAAG’s financial activities.

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