United States: State AGs And Consumer Protection: What We Learned From . . . Nebraska

Our State AG webinar series continues, this time with Nebraska Attorney General Mike Hilgers and Consumer Protection Division Chief Phil Carlson, a position previously held by our own Abby Stempson. During our webinar, the Nebraska AG's Office highlighted its consumer protection work during a time of transition and general consumer protection topics. In case you missed it, here is a recording of the webinar. We recap what we learned below.

Office in Transition

The Nebraska Attorney General is an elected position. The last election was held in November 2022, thus AG Hilgers has been serving in this role for a little over six months and provided some of his thoughts on transitioning to that office.

When AG Hilgers took office, his perspective was not to come in and do things differently with entirely different people. Instead, he met with each member of the team and ensured that his team understood his core principles. But not only was AG Hilgers building relationships internally, he also believed in building relationships externally. For example, AG Hilgers highlighted that one task of a new AG is developing good communications with federal agencies in order to facilitate collaboration. AG Hilgers said he approaches the job fairly and thoughtfully, while intentionally making a few tweaks here and there to fulfill the vision he has for the office.

Consumer Protection Priorities

Though the Nebraska AG office is smaller compared to other states, AG Hilgers emphasized that the AG's office "punches well above its weight if you look at just headcount." Along those lines, Mr. Carlson noted that the Consumer Protection Division employs a smaller number of attorneys and staff yet houses a number of responsibilities in Nebraska, including antitrust enforcement, charities enforcement, and Nebraska's Tobacco Unit. The Division learns about issues through multiple channels, such as communicating with other AGs, or through the news and radio. AG Hilgers highlighted that as the only state with a unicameral legislature, consumers tend to know their state legislator well and will often go to their state legislator for consumer complaints first. The AG's office is aware of this, and will work with the state legislature to learn about the different problems facing consumers. However, before getting involved, AG Hilgers emphasized that the Office will consider whether they can play a constructive role in resolving an issue, rather than just trying to grab a headline. The overarching goal, according to AG Hilgers, is to do the most amount of good for Nebraskans with the resources available to the Office.

Mr. Carlson noted that the Consumer Protection Division includes a Consumer Affairs Response Team (CART) that takes complaints and handles dispute resolution. If a business receives a letter from CART, Mr. Carlson said they should not ignore it but rather contact the office to try to reach a voluntary resolution. When determining appropriate resolution, the Division will take the business's cooperation into account. They recommend that businesses be proactive and thoughtful, because if there is an issue, the Office is likely going to find it. The Office seeks good, working relationships with companies and is not in the business of simply being punitive to be punitive. AG Hilgers noted that the Office is proportional in its exercise of punitive powers, noting "if it's a five-yard penalty, then you need to call a five-yard penalty and not throw someone out of the game."

The Consumer Protection Division addresses local problems, but AG Hilgers discussed that Nebraska also tackles national problems where they can add impact as a leader, like in the tech space. Every state has a limit on their resources, so the Office will often work with other states to combine resources and more powerfully address the issues. The Office also works with federal agencies such as the FBI and DEA.

Nebraska Consumer Protection Laws

Nebraska has two main consumer protection laws: the Consumer Protection Act ("CPA") and the Uniform Deceptive Trade Practices Act ("UDTPA"). Both acts provide for civil enforcement and UDTPA provides for criminal enforcement – a first time violation can result in a class 2 misdemeanor and a violation of a consent order or a voluntary agreement can result in a class 4 felony. The acts have enumerated provisions unique to Nebraska, such as a provision against the mislabeling of honey, but the AG can also address issues such as price-gouging and auto-renewal issues under its general unfair acts statutes where they lack a specific law. Nebraska has a data breach notification law but does not have its own data privacy law. However, the Office can use its UDTPA and CPA authority to address privacy issues such as those found in the recent Google multistate.

Additionally, under both UDTPA and the CPA, Nebraska can use its pre-suit investigative/CID authority to request documents, take statements, and send out interrogatories. Businesses have 20 days to object to these inquiries. The responses businesses share are generally confidential, but can be shared with other law enforcement agencies. The language around Nebraska's statute of limitations is vague and depends on the action, but generally is 4 years. Depending on the statute violated, a business may also be able to enter into an agreement of voluntary compliance (AVC) or an assurance of discontinuance (AOD). The civil penalty authority is $2,000 per violation and another $2,000 for a violation of an AVC or a consent order. However, the Office may forego monetary penalties if they can reach an agreement containing strong restitution provisions or injunctive relief.

So again from Nebraska, we have heard commonalities that competing resources and AG priorities may drive multistate enforcement, and states continue to use their broader UDAP statutes where they lack more specific authority in specific areas.

Goodbye Phil!

Since our webinar, Phil Carlson announced that he is leaving the Nebraska AG's office. Nebraskans have certainly benefitted from his consumer protection work, but so have consumers nationwide from his multistate leadership. We all thank him for his service!