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The U.S. Senate just passed a bill that gives state attorneys general explicit powers to enforce and interpret federal law.

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New Bill Would Encourage Mini-Spitzers

The U.S. Senate just passed a bill that gives state attorneys general explicit powers to enforce and interpret federal law.

Eliot Spitzer resigned Monday as New York’s governor due to a scandal involving a prostitution ring. But this is far from his most serious offense. Regardless of what happens in this case, Spitzer has long acted as of he were above the law — or rather as if he were the law.

During his tenure as New York Attorney General, Spitzer stretched state law to make national policy, tried his targets in the media with improper leaks, and used the machinery of his office to go after his political enemies.

And one of the worst of his legacies is inspiring scores of mini-Spitzers among state attorneys general. From tobacco to guns to global warming, a wave of state AGs are twisting their states’ laws to go after media-anointed villains in the trendy national cause of the day. As my CEI colleague Hans Bader writes, many state AGs are guilty of “meddling in the affairs of other states, … encouragement of judicial activism and frivolous lawsuits, favoritism towards campaign contributors, [and] ethical breaches.”

In fact, in his list last year of  “The Nation’s Top Ten Worst State Attorneys General,” Bader actually ranked two AGs as worse than Spitzer under these criteria. (To see who they are and the rest of the list, go here.)

To top it off, the U.S. Senate has just passed a bill that would greatly bolster the power of state attorneys general by deputizing them to regulate on behalf of the federal government. Prompted by concerns about safety of toys imported from China, the ostensible purpose of the bill is to toughen the Consumer Product Safety Commission, the federal agency created in 1972 to oversee the safety of toys and other products.

But to accomplish this purpose, the CPSC Reform Act of 2008 (S. 2663), sponsored by Sen. Mark Pryor, launches a strange new experiment that turns federalism on its head. It gives state attorneys general explicit powers to enforce and interpret federal law!

Section 26A of the act gives the AGs massive new powers to bring suit in federal court “whenever the attorney general of a State has reason to believe that the interests of the residents of that State have been, or are being, threatened or adversely affected by a violation of any consumer product safety rule, regulation, standard, certification or labeling requirement, or order prescribed under this Act or any other Act enforced by the Commission.”

Note what this bill is not. It does not devolve regulatory power from the federal government to the states. Whether the feds or the states and/or the private sector should regulate toy safety is a legitimate subject of debate among proponents of limited government. (As is the existence of the 35-year-old federal safety agency, which has been found by one study to have no beneficial impact on product safety. Some of the CPSC’s mandates, such as those for childproof caps on medicine, have had counterproductive effects and actually increased injuries and fatalities. Dangerous medicines may have been made more accessible to kids, because grandparents simply left the caps off, rather than struggling with them every time they took their pills.)

But Pryor’s “reform” act does not limit the federal government’s power at all nor give any more jurisdiction to state legislatures. It simply extends the federal government’s scope and adds on state AGs as adjuncts to federal regulatory power. They would, in effect, become the federal government’s super-regulators. As Pryor himself puts it, these provisions allow state AGs to “act as real cops on the beat, looking out for consumers and restoring confidence in the marketplace by enforcing the provisions of the entire Consumer Product Safety Act.”

Yet, given the history of Spitzer and other AGs, it’s questionable how often these new federal “cops” would act in the best interests of the residents of their state. With the slightest pretense of a safety risk, they would have license to go after products and companies they deem politically incorrect. They could, for instance, go after toy guns and other war toys that have long been crusaded against as being too militaristic. They could also conceivably use these new powers to implement a type of backdoor Kyoto treaty by going after products they claim contribute to global warming.

There could also be more parochial reasons for the products they would go after. Some cases could be pursued with the intent of emptying a company’s “deep pockets” into state revenue coffers. As Andrew Grossman points out in a study for the Heritage Foundation, “companies are likely to seek settlements with state attorneys general, including payments to the state and other concessions, in order to avoid the risk and uncertainty of litigation.”

There’s also the matter of the state AGs’ friends in the trial bar. Spitzer was noted for subpoenaing a mountain of documents that provided grist for lawsuits once the state was through with them. Although the Senate bill limits the trial lawyers’ access to documents in state AG actions, state AGs could still smooth the way for private lawsuits by bringing a government action. As Grossman puts it: “Violations of CPSC regulations and standards are considered per se violations of tort law in suits by individuals who have been harmed by faulty products. State lawsuits that establish a violation, then, even if it is a very minor one that the CPSC, acting on its own, would not have addressed, give trial lawyers the opportunity to bring follow-on tort lawsuits in which they need not prove the presence of a product defect.”

Right now, Pryor’s bill is awaiting conference with a more moderate House bill that doesn’t give state AGs nearly as much power. The Bush administration has expressed concerns about the Senate bill, but has not issued a veto threat. It would be tragically ironic if after one of the most powerful former AGs was brought down by an alleged prostitution ring, the federal government were to enact a state AG extortion ring.

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Written By

Mr. Berlau is director of the Center for Investors and Entrepreneurs at the Competitive Enterprise Institute. He is the author of "Eco-Freaks" and blogs at OpenMarket.org. E-mail him at jberlau@cei.org.

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