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In this episode of our Public Policy & Regulation Group's "Conversations with State Attorneys General" podcast series, attorney Stephen Cobb chats with Joe Sciarrotta, the Civil Litigation Division Chief for the Arizona attorney general's office. Mr. Sciarrotta kicks off the conversation by sharing details about what led him to a career in the Arizona AG’s office, including his public service role in the Arizona governor’s office. He also discusses the role of state attorneys general from a regulatory, litigation and policy perspective, indicating how the power AGs yield has grown significantly in recent years. The conversation continues with a discussion on how the private sector can interact and find synergies with state AG offices, specifically with regard to consumer protection and antitrust matters. Mr. Sciarrotta wraps up the episode with a message to Arizona consumers and anyone who chooses to do business in the state.

Podcast Transcript

Stephen Cobb: Welcome to another edition of Holland & Knight's Eyes on Washington podcast, State Attorneys General Edition. My name is Stephen Cobb. I'm a former deputy attorney general of the Commonwealth of Virginia and partner at Holland & Knight and co-chair of the firm's state attorneys general practice. With me today is Joe Sciarrota from the Arizona Attorney General's Office. Joe is affectionally referred to as the Don Rickles of the state AG community. And besides being a fantastic lawyer and leader in his office, he's also, as the nickname might suggest, of such good humor. Joe, welcome to the podcast.

Joe Sciarrotta: Stephen, thank you so much. Now the pressure's on, I gotta add some jokes.

Career Path to the Arizona AG Office

Stephen Cobb: All the time, or you can just make fun of me in true Rickles fashion, of which I'm sure our dozens of listeners would find incredibly entertaining. Joe, one of the things I like to do, particularly when we have senior staffers on, is to talk a little bit about the path that brought you to the office. You know, it's a little different when we're talking with AGs as elected officials. You know, the zig zags of their political career are often a little bit well known to our listeners and the practitioners in this space. But I always like senior staffers such as yourself, to talk about how your career took you to the AG's office.

Joe Sciarrotta: Sure, happy to. Let me just start. It's allergy season here in Arizona, so if my voice sounds a little off, that's why. But, so my path started out of law school, I started with the oldest law firm in Arizona, Fennemore Craig, now known as Fennemore, and practiced in a variety of different civil litigation areas for about seven years. And then I went in-house counsel with several Fortune 500 companies, so I learned a great perspective there, managed in one company $1,000,000,000 litigation docket in 36 states, and Puerto Rico that included securities, tax cases, antitrust and the variety of that. And then I was vice president for litigation at Meritage Homes and worked with the former Arizona attorney general who we had hired as outside counsel, his name was Grant Woods - and may he rest in peace, he passed away last year and he was a good friend of mine. And we hit it off, not only from a policy perspective, litigation perspective, but he also was of of good humor and liked to tell jokes. And so we bonded. And that was the year that President Obama was elected. Our then Governor Napolitano went up to become homeland secretary. And we don't have a lieutenant governor in the state, so the secretary of state ascended to office and so the party switched. And I had always been interested, I was a poli sci major in undergrad. I've always loved politics, policy. And he asked, 'Would you have an interest in going into the public sector and being in public service?' And I said, absolutely. I've always been interested in that, you know I've had a great private sector career, but if the opportunity were right. I would. And so, you know, he introduced me to the administration and got hired on as the general counsel for the Arizona Department of Administration, which really was like an in-house counsel position. It involved torts, facilities, benefits, a variety of things, and also included administrative law. And I got to chair the Regulatory Review Council, which reviews all, almost all of the regulations that are put forth in the state of Arizona. And about a year into that job, I was approached and I never thought I wanted that job, didn't ask for that job, but I was approached and as an Italian, it was an offer I couldn't refuse. I was asked to become general counsel to Governor Jan Brewer. And so it was an honor of my lifetime to represent her for three and a half years as her general counsel. And a lot was going on then, and we did a lot of important transformational legislation. I took a case to the United States Supreme Court with the great litigator Paul Clement back in the day. And then from that, I became a superior court judge, after leaving that position. They put me on the family court, and it wasn't a good fit, Don Rickles didn't do well in a robe, let's just say that. So after that, I was approached to join the General Brnovich's administration, he and I got to know each other and became friends when he was director of gaming under Governor Jan Brewer. And I worked with him quite a bit and he said, we'd love to have you as part of the administration. So I joined in 2016, co-led our state government division, which provides representation to almost all the state agencies, which was a role I was well-suited for coming from the Governor's counsel position. And then after General Brnovich was reelected in 2018, he wanted to kind of do a reconfiguration of the administration, and he asked me to take on duties in the civil litigation division. And so I've been that division chief for the Civil Litigation Division since 2019 and oversee civil rights, consumer protection, bankruptcy collection enforcement, tobacco enforcement, as well as our community outreach program, which goes around the state, educating constituents about all the incredible programs we do here at the Attorney General's office. And then I have the honor and the fortune of representing the attorney general at national meetings, whether it be the Attorney General Alliance or NAAG, the National Association of Attorneys General.

Stephen Cobb: One of these days I will have to do a complete podcast just on Governor's counsel and their interaction with AG offices because it's incredibly unique, and I think the role of Governor's counsel varies so widely from state to state that folks would be well-served to hear the varying roles that they play.

Joe Sciarrotta: Well, on that point, some people asked me, you know, what's the difference between the attorney general's office and the governor's office? And it's a funny anecdote. Somebody said, well, an attorney general's office, you can make an appointment for the attorney general. You can get in there pretty quick. You can walk in, pound the table and say, you know, Mr. or Mrs. Attorney General, I don't like the way you're running the office. And the person in the governor's office says, well, it's just the same. You know, it may take a little longer, but you can make an appointment. You can come in, get an appointment with the governor, walk in pound the desk of the governor, and say, Mr. or Mrs. Governor, I don't like the way the attorney general is running their office.

Role of State AGs at the National and Local Level

Stephen Cobb: So true. So true. Let's get into the role of state AGs. One of the ways that I've set up many of these podcasts before is talking about the growing role of state AGs in the last 20 years. I believe the number is $168 billion. That's billion with a B, that's been brought in through litigation, settlements, fines, which is just a Herculean number, and shows the incredibly wide and expanding nature of the role that state attorneys general play in our overall regulatory scheme. And that's just on multi states. That's not even a factor as to what they're doing solely within the borders of their own state. And I think there is an argument to be made that state attorneys general have a greater regulatory role, and I'm going to use that broadly. I don't necessarily just mean litigating or fines, but in setting a regulatory agenda as a policymaker as well, more so than their federal counterparts a FEC, FTC, CFPD. And there's many reasons for that. One is the broad nature of their powers. Another is the flexibility in those offices. Something can go from an idea in the morning to a press conference in the afternoon to policy or litigation the following day, which is just a speed other regulatory bodies don't necessarily have. So with that as kind of the table setter, so to speak, can you tell our listeners a little bit about specifically, I want to focus on consumer protection as that's one of the areas in your bailiwick right now. But, let's start off with what's going on in Arizona, and then I want to talk a little bit about what's happening nationally and trends that you're seeing both within the confines of the state and across the country.

Joe Sciarrotta: Right. Well, you're exactly right. The attorney general space kind of was under the radar and was hidden for the longest period of time. Everybody looked to the governor's office and through policy that way, through the regulatory agencies passing bills, signing bills in the legislature. But really the growth and the realization of the amazing power, but the amazing good that attorney general's can do nationwide started with the National Tobacco Settlement all those years ago, an incredible bipartisan, multi-state effort that took on tobacco for their misleading advertising and in particular, their advertising to youth, and that multistate that Arizona settlements over $100 million a year still to the state, and that goes on in perpetuity. General Brnovich has been the co-chair of the tobacco committee for NAAG for three years, and I've worked with him in that role. I worked on this issue when I was in the governor's office. And so with that, people realized that, you know, the attorney generals have broad power, vast power, consumers side, the criminal side, representing state agencies. And that voice has come forth. And I think what we've seen due to the increase in the administrative state on a national level, where a lot of our legislation, if you will, is done in that regard. AG space has been both when there's a Republican president, a Democrat president filing lawsuits in that regard. And now we've seen the real growth of solicitor generals within the attorney general's office, and a push back on the federal government. And like I said, it goes both ways on the political spectrum, but that's the natural, healthy check and balance that our founders envisioned when they created this federal system in the 10th Amendment. And we've seen, unfortunately, because I think the legislative branch, the executive branch at a national level, they're not getting things done. So it gets pushed to the administrative state, which ultimately gets pushed to court. And now we see attorney generals front and center on those issues. And in the wake of the tobacco settlement, attorneys general realize that they are the people's lawyer, as we say here, General Brnovich, often says, you know, we're not State Farm, we're the state of Arizona and we can give a real voice and make a real difference in the consumer protection arena. And I'm very proud since I took over the Civil Litigation Division, we had a great track record before that, but we took it to another level and we're on track now for $1.5 billion in total recoveries under General Brnovich's leadership. And we're now over $300 million in restitution. Money back in the pockets of Arizona consumers. And that makes a real difference, a palpable difference. And I'm proud to be a part of that.

It goes both ways on the political spectrum, but that's the natural, healthy check and balance that our founders envisioned when they created this federal system in the 10th Amendment. And we've seen, unfortunately, because I think the legislative branch, the executive branch at a national level, they're not getting things done. So it gets pushed to the administrative state, which ultimately gets pushed to court. And now we see attorney generals front and center on those issues.

Pertinent Trends in the State AG Space

Stephen Cobb: That's fantastic. So tell me a little bit. You know, you said $1.5 billion in Arizona. Without calling out companies by name, can you talk a little bit about either, are there trends in industry or behavior that has been more prevalent than others? Or really kind of what trends are you seeing in the industry right now?

Joe Sciarrotta: Well, I mean, the biggest trend and it's front and center, and I think it's going to be front and center for a period of time, unfortunately, but it was the opioids litigation. Again, another impressive bipartisan, multi-state effort. We brought resolution to that recently with the distributors and the manufacturer. So that's going to be another $100 million plus settlement coming in to Arizona and billions nationwide. Another bipartisan issue is always autos, whether it's the financing or promises made in that regard. Another big area that attorney generals are keen on now is social media platforms and big tech and those type of things, especially there where there's a youth component. Everybody can rally around that, and that's been refreshing to see. It's amazing the attorney general space as partisan as our country is this day, it's still a bipartisan arena and people can come together in common fashion and goodwill to get things done. And that's why it's always a joy to go to these these national meetings and see that not only camaraderie, but the the bipartisan focus. And when attorney generals work together, this is a space where we get things done. And so the other area, I'd say, are, you know, health and medicines. Big generic drug, multi-state litigation that's been going on for years. Those are always things that are trending and at the forefront on a national level.

Finding Synergies Between the Private Sector and State AG Offices

Stephen Cobb: So when we talk about all of those areas that you mentioned, you mention pharmaceuticals and automobiles and tech and several others. Describe for me, if you will, how companies in your mind should or shouldn't engage with state AG offices. Let me set the table for you a little bit better. I found both when I was in the AG's office, and after I left, that working with and AG's office can be a bit of a black box for folks who don't do so regularly. There's not rules of civil procedure for an AG's office. Both individuals and companies alike are caught off guard by the breadth of power that AGs have, be that a civil investigative demand or causes of action. Right. Unique to state AGs. You know, for instance, the nuisance causes that state AGs can bring and how that's been interpreted so broadly, particularly in the environmental arena. So both when I was in office and since I have left, I think that the dialogue is an incredibly important tool and it's an education on both sides because consumer protection offices tend to be, and I believe rightly so, sensitive to complaints that they're getting in from consumers or headlines that they're reading. And sometimes there is a fact from fiction as to what is actually going on in the industry, vis-a-vis where the complaints are. And so there is an information delta that sometimes can be bridged through proactive communication. So kind of now with that as the base, what do you see as kind of helpful synergies between the private sector and that mission of the AG's office across industry based in those kind of areas that you mentioned, like consumer protection, and antitrust?

Joe Sciarrotta: Well, I think the key for industry is to get educated and involved in the attorney general space early and before there's an issue. And I think that's in part by having good representation and then going to these meetings on a national level. The programing is excellent, it tells you what's front and center. You've got great access to the attorney generals and their staff and you get to know people before there's an issue. If you're trying to do that, reach out after there's an issue, after there's a problem, obviously, it's a different dynamic. There's a different trust perspective. So the key is: know the space, know your attorney general where you're doing business, know their office before there's an issue. And then when there is, I think, transparency, candor, not hiding the ball. If you have those relationships built up to say, can we address this with candor to try and get ahead of it before that explodes. And I think the key is, and oftentimes I think companies make the mistake, they want to have litigation counsel, be their lobbying or representation counsel or their settlement counsel. And I think that is problematic. You've got to look at it from. You may have to litigate and eventually that'll get to a settlement. But I think companies are best suited to kind of separate those two issues out because sometimes the litigating entity doesn't have the brand picture in place. And if it's a scorched earth type of mentality to the litigation, it could hamper those ultimate negotiations. So I've seen recently where companies that has gone forward, separate that out and try and deal with that on a separate track, and it's been very successful on that.

I think the key for industry is to get educated and involved in the attorney general space early and before there's an issue.

Bottom line, though, is early on, if you're starting to see inquiries from an attorney general's office, whether it's their front line, you know, consumer information type unit, that's not necessarily attorneys or if you're starting to see inquiries from an office, it kind of goes back to medicine, a good bedside manner goes a long way. Get out there, address it up front, figure out what the issue is. Don't don't stick your head in the sand. And if there's a problem, own it, fix it and that'll go a long way, and probably save you hundreds of thousands of dollars in legal fees at the end of the day. Just understand that there's the problem and you got to fix it. When I see that that breeds goodwill, I know that that's a good actor. And from my perspective, I came from the private sector, I came from corporate America, I mean, they're not inherently evil, they're people, too and if you show that goodwill upfront along the way, that can make a big difference in the handling of the case, the trust factor, and try and get to a reasonable resolution. And the other thing that's important is you got to know the space. You got to have people like you who know the different offices around the country, because if there's an issue, try and take it to an office that you think will be reasonable. You know, we're very we're fair, but we're tough here. And I'll work with any company that wants to come forward. But, you know, if push comes to shove, we'll take cases to trial and we will get the right result at the end of the day. But if you want to be reasonable, if you want to have a conversation to try and get to that finish line early, we're willing to do that. Others, they want a pound of flesh just for the purpose of that. And I don't think that's the role of the regulator either. We've got to enforce the law to protect the consumer, but we have to also realize the companies are constituents, too.

Bottom line, though, is early on, if you're starting to see inquiries from an attorney general's office, whether it's their front line, you know, consumer information type unit, that's not necessarily attorneys or if you're starting to see inquiries from an office, it kind of goes back to medicine, a good bedside manner goes a long way. Get out there, address it up front, figure out what the issue is. Don't don't stick your head in the sand.

Predictions for State AG Priorities Moving Forward

Stephen Cobb: And it's interesting, you know, you've hit a lot of themes that some of the other offices have really hit on, I think I'm going to paraphrase. But General Donovan in Vermont had said, listen, you know, we can litigate, but that could take five years and I'm looking to find solutions now. And you know, why put off for five years that which, you know, effective communication and candor can get to the forefront. But I always found that to be vitally important. So we've talked about some of the past trends going on in both Arizona and nationally. We've talked about how to deal and communicate effectively with AG offices. Now, I want you to look into your crystal ball and tell me what the next year is going to hold amongst the state AGs.

Joe Sciarrotta: Well, I think from a global perspective, not just a consumer protection perspective, I think we're going to continue to see a lot of federal litigation against the administration from Republican states just because there's a Democrat president now. But Congress is not getting a lot of stuff done still, and a lot of stuff's happening through the administrative state. So you're going to see a lot of litigation in that regard, whether it's rulemaking, immigration, those type of things. I think that will still be in the forefront.

Stephen Cobb: What subject matters outside of immigration do you see as kind of having those federalism friction?

Joe Sciarrotta: I think there's some environmental themes. There could be, even in the consumer protection area, we have to make sure that entities like the CFPB and FTC, you know, stay within their lane. And if they've got authority to do rulemaking, it's got to be precise and direct. It can't be some type of vague theory and then they can go off and do that. I think the vaccine mandate litigation was key on that, especially when we saw that through the holding Supreme Court related to OSHA. And then it's compared to those in the healthcare arena and the juxtaposition of those decisions and to see how some of the justices came out on both sides, depending on the specificity of the statute and the empowerment of those administrative agencies, I think you're going to also see there's been an increase over the years in states on their own, working together as multi states, but also in partnership on a bipartisan level in antitrust, because at its base, antitrust is a form of consumer protection, frankly, some of the oldest form of consumer protection in our country. And that is kind of seen a resurgence. And as there's consolidation and whatnot in some of our marketplace, we're going to keep a mindful eye on that as well. And states, it's just not the merger side of things as well. That's what this generic drug litigation is all about. Is there coordination to keep prices high? And especially in the area of medications which are so important to people. So I think that's a trend that will continue that we'll see in the future.

Stephen Cobb: Let me dig in there a little bit more on antitrust in particular. So what sort of anti-competitive behaviors are AGs saying that is causing the most concern? I mean, is it anti-competitive behavior? Is it unfair coordination? Are we worried about, as you said, mergers of monopolies? Break those down for me a little bit more as to where the concern lies.

Joe Sciarrotta: Well, I mean, right now there are three massive generic drug cases that have been pending for a while or continuing the pending, and that is about alleged coordination and illegal allocation of the market to inflate the prices, and that's the allegation. Can we get there at the end of the day? I mean, that's why we're litigating. So that is always a concern. What we're seeing now where in some areas, especially tech and the like, the bigger companies are buying up the smaller companies and they have control of the marketplace in some areas. Is that enough? You know, it always comes down to, as, you know, what is the marketplace? And that's the key. You got to define that first as a threshold level and then get to the other parts of the analysis on the merger side. But mergers and growth is okay, but when you do it stifling out the competitors and doing it in a way that improperly allocates the market, that's where, AGs again, on a bipartisan level, will have to inquire.

Focus on Antitrust

Stephen Cobb: You mentioned some of those federalism frictions with the administration, particularly potentially with some of the Republican AGs. Do you think antitrust is one of those areas where there might be times for working collaboratively with the administration on those antitrust issues?

Joe Sciarrotta: Absolutely. I mean, our office joined an antitrust action brought by the Biden Administration against American Airlines and JetBlue in the eastern corridor. We've worked with them on a variety of issues in the big tech space. And I think there is there is an avenue there. There certainly is a dialogue. And I think that's one space where thankfully, you know, it's not overly politicized from a partisan perspective. You know, people put on their consumer protection hat there and kind of have that vision. And obviously, politics is politics. We all have our perspective and whatnot. But there has been dialogue and cooperation there between the states and the federal government. And that's good. That's okay. And that's the way it should be. It should be a collaborative effort. Unfortunately, sometimes it's not. And that's where we have to draw the line.

There has been dialogue and cooperation there between the states and the federal government. And that's good. That's okay. That's the way it should be. It should be a collaborative effort.

Wolverines vs. Buckeyes

Stephen Cobb: Joe, you've been incredibly generous with your time. I want to ask you one question that has absolutely nothing to do with state AGs, which is that, you know, I know and I can see that you are a proud Michigan alumnus. I see your Michigan emblem there in the back. I love the friendly ribbing amongst the state AGs, particularly Dana Nessel, the University of Michigan fan, General Ford, an Ohio State fan. I'm guessing General Yost has jumped into the fray here. Do you have any bold predictions for Wolverines Buckeyes this coming fall? Michigan finally got in the win column for the first time in a while last fall. Is this something they're going to be able to repeat?

Joe Sciarrotta: Well, I grew up a Buckeye, I'm born and raised in Ohio. And then I went to Michigan undergrad and now I bleed maize and blue. So it was a long drought. It was a painful drought. The glory years were there when I was there in the in the early 1990s. Harbaugh, he's done well. He's had his struggles. But I think we've got a good foundation there. We've lost some key people on defense. So those are going to be some big holes to fill. But I'm hopeful. But all I know is in the past year, we're 1-0 and that's all that counts.

A Message to Arizona Consumers

Stephen Cobb: There you go. Joe, before we close it out, is there anything, initiatives in Arizona work that the AG's office is doing that you'd like to highlight?

Joe Sciarrotta: You know, we've done great so many great things on the consumer front. And we just encourage folks, if you're an Arizona consumer or come to Arizona to vacation or do business and you think you've been defrauded, please file a complaint with our office and we'll look into it. I have to say, last year alone, our CIC, our initial unit, handled 15,000 consumer complaints, over 45,000 calls, 22,000 emails. And that initial front line unit themselves, they're not lawyers, they're just facilitating between companies and consumers. They themselves brought in and returned $5 million to consumers in Arizona. So we have a real impressive unit here, from those that interface directly with the public all the way up to our investigators and our lawyers. And a small matter could lead to a bigger trend. So we just encourage people to file, we'll look into it and if there's an issue, we'll certainly move forward on that to correct the wrong if we can.

Stephen Cobb: Joe, thanks so much for your time. That's great information. This has been another installment of Holland & Knight's Eyes on Washington Podcast, State Attorneys General Edition. My name is Stephen Cobb and this has been with Joe Sciarrotta from the Arizona attorney general's office. Joe, thanks again. And we look forward to having everyone back for the next podcast. Thanks so much.