SEATTLE — In a dozen years as state attorney general, Bob Ferguson has vastly expanded the size and reach of the office, establishing himself as one of the country’s most aggressive filers of consumer protection and antitrust actions.
His office has racked up more than 800 lawsuit wins and $2.8 billion in recoveries from corporations alleged to have wronged Washington residents. That includes settlements from drug companies accused of fueling the opioid epidemic, hospitals that charged illegal fees and food companies that fixed prices.
Ferguson has boasted of that record while running for governor, while his Republican opponent, former U.S. Rep. Dave Reichert, has criticized the lawsuit spree as heavy handed.
Of the money brought in by the attorney general’s lawsuits, nearly $260 million has gone to restitution for victims. An additional $537 million has been directed to debt cancellation and other consumer relief. More than $1.5 billion has gone back to the state and to tribal and local governments.
Meanwhile, a sizable slice — about $328 million — has been rolled back into the Attorney General’s Office for Ferguson to control.
That has created a loop of growth, allowing Ferguson to more than quadruple the number of attorneys in his consumer and antitrust divisions, while also creating new units taking on civil rights and environmental cases. The budget surge also helped pay for 99 lawsuits filed by his office against the presidential administration of Donald Trump.
As he campaigns for governor, Ferguson, a Democrat who was elected attorney general in 2012, points to the way he’s led his office as a sign of how he’d manage the broader state government.
He has boasted of transforming the Attorney General’s Office from “a sleepy law firm in Olympia” into “one of the strongest forces for economic and social justice” in Washington, and a national force for “progressive change.”
In two recent debates, Reichert criticized Ferguson’s office growth, attacking him for bringing on hundreds of new lawyers who he contended play “gotcha” with businesses.
“Nobody wants to do business in Washington state when they’re afraid of getting sued and run out of business,” Reichert said at a Spokane debate last month. “We gotta stop suing our businesses.”
Reichert also hit Ferguson for prioritizing hiring of hundreds of lawyers while police departments around the state have struggled to fill their ranks — an issue Ferguson has only lately cited as a problem he’d try to fix as governor.
Ferguson defended his work, pointing to a newspaper editorial that said he’d run his office “like a business” in growing it with settlement proceeds instead of asking the Legislature for more tax dollars. “We’re actually a revenue generator for the state of Washington,” he said at the Spokane debate.
While Ferguson can point to a solid winning record at the courthouse, his barrage of consumer protection lawsuits occasionally generated missteps and controversies.
His yearslong pursuit of a case against bargain retailer Value Village backfired, leading a judge last year to order the state to pay the company millions in legal fees, saying “the state’s conduct in this matter raises concerns about government overreach.”
Ferguson has also faced questions in his high-profile effort to stop the $25 billion merger between Kroger and Albertsons.
There is also a critique, offered by political opponents, that Ferguson’s expansion sets up a potentially perverse incentive.
“His people have to go out and find recoveries to make,” said Rob McKenna, a Republican and former state attorney general who now represents businesses at the Orrick law firm. “Some of them are righteous, no doubt. But when it appears they are trolling for cases, it makes the office look more like a plaintiff’s firm than an AG’s office.”
In an interview last week, Ferguson rejected any suggestion of overreach, saying his win-loss record speaks for itself.
“I mean, honestly, just give me a break,” he said. “A thousand cases, we lost two.”
A national trend
Ferguson isn’t the first state attorney general to build a reputation as a crusader against corporate wrongdoing.
That trend, some experts said, started decades ago, particularly after the $206 billion national tobacco settlement in 1998, spearheaded by then-Washington Attorney General Christine Gregoire.
Although much of the tobacco settlement money went to private-sector firms representing states, many state attorneys general saw the financial logic of expanding their internal operations, said Doug Gansler, a former attorney general of Maryland who now advises companies being sued by states.
The view was, ” ‘If we just hire more lawyers and pay them government lawyer salaries … we don’t have to pay private law firms millions of dollars,’ ” said Gansler. “So some of the offices started to get beefed up at that time.”
Using powerful consumer-protection laws, many states now routinely bring “what are essentially quasi-class actions” on behalf of state citizens, said Paul Nolette, a Marquette University associate professor and expert in the changing operations of state attorneys general. In recent years, “the amount of settlement money coming in has really exploded,” he added.
Turning point
Ferguson seized on the opportunity to build a more robust consumer protection unit soon after taking office.
At the time, the consumer protection division had just 10 attorneys. Ferguson, a former litigator with the Seattle law firm Preston Gates & Ellis (now K&L Gates) knew that wasn’t enough to take on large corporations with battalions of high-paid lawyers.
The office receives thousands of consumer complaints a year but at the time “utterly lacked the resources to … take any entity to trial,” Ferguson said in a recent interview. The office had taken just one consumer-protection case to trial in the previous 17 years.
The turning point came after Ferguson joined other states and the federal government in a 2013 lawsuit against a credit-rating agency over deceptive marketing, which eventually led to a $21.5 million recovery for Washington. That included $500,000 for the state’s legal costs. Ferguson saw he could build a larger consumer protection operation, “paid for,” as he put it in a 2017 interview, “by bad actors who don’t play by the rules.”
Since 2013, the number of attorneys working on consumer protection and other civil law enforcement cases has increased from fewer than 20 to around 120, substantially outpacing the office’s growth overall. The antitrust division alone has 15 attorneys, behind only California and New York, the office said.
That additional staffing has allowed Ferguson’s office to take on more complicated cases and pursue them further, which experts say has contributed to his office’s ability to win settlements.
“When I get a subpoena from the Washington AG, I view it differently [because] they’re not afraid to take a case to the mat,” said Chris Carlson, a former assistant attorney general for West Virginia who advises companies in cases brought by state attorneys general.
All told, the office has racked up 822 consumer protection wins, mainly through settlements, ranging from cases involving unlawful debt collections and evictions to telemarketing scams and hidden ticketing fees. Among the more notable, a $9.1 million civil fine against Comcast for deceptive practices and settlements with Burger King and other national chains that ended hiring bans called no-poach agreements not only in Washington but nationally.
Today, Ferguson’s office touts not only the success of its larger civil law enforcement operation — between 2013 and 2023, annual recoveries grew sevenfold, to $560 million — but also the fact that the growth was done with almost no taxpayer dollars.
Although state funds still cover the bulk of the office’s budget, for activities such as criminal casework and defending and advising state government, the expanded civil law enforcement has been funded almost entirely by winning cases.
Ferguson also emphasizes his hands-on approach when it comes to the burgeoning consumer lawsuits. “We don’t file a case unless I approve it,” he said.
A popular strategy
Ferguson’s self-funded expansion has proved popular in many quarters.
Although recoveries legally belong to the state treasury and could conceivably be directed by the Legislature to other purposes, state lawmakers have been content to allow Ferguson to plow much of the cash back into his own office.
“Their argument, which has been pretty persuasive, is that they have taken on these issues to protect Washington consumers … and that we ought to think of that essentially as a revolving fund,” said state Sen. Jamie Pedersen, D-Seattle, also an attorney. “Success breeds success, so that has fallen on pretty sympathetic ears in the Legislature.”
The constant stream of news releases and conferences about lawsuits and settlements also has brought plenty of media attention for Ferguson. That helped position him as the presumed Democratic front-runner for governor long before he filed to run.
Ferguson’s Jan. 15 suit to block the merger between Kroger, which owns QFC and Fred Meyer, and Albertsons, which owns Safeway and Haggen, won praise from many across Washington, which has a disproportionately large number of stores that would be affected by the deal. Ferguson’s suit is supported by many grocery workers, whose union, United Food and Commercial Workers, is a reliable Democratic Party ally.
“For him to make a lawsuit against Kroger, that’s a big move, super big,” said James Reed, a QFC cashier from Bellevue who watched Ferguson speak at a September union rally outside the King County Courthouse, where the Kroger trial was underway. “Standing up for us little people, you know. That’s his job, and I admire that.”
The Kroger merger case illustrates Ferguson’s attention-grabbing approach.
Ferguson could have joined the Federal Trade Commission — as eight other states and Washington, D.C., did — in its own widely anticipated federal suit against the merger, eventually filed Feb. 26.
Instead, Ferguson went alone, and first, filing his case and holding a news conference Jan. 15 — MLK Day — a federal holiday, when the courts weren’t officially open.
Asked about the timing, Ferguson said many factors go into when a case is filed, “so there’s nothing, from my standpoint, especially unusual about that,” adding that, “We file cases when they’re ready.” Colorado also filed its own suit.
“Expansive, highly intrusive”
The expanded consumer-protection enforcement by Ferguson and some other state attorneys general have in some ways benefitted consumers, who typically cannot afford to pursue legal action against big corporations.
It’s also filled gaps left by federal regulators, who typically focus on national cases, and mounting restrictions courts have placed on private consumer legal actions, experts say.
The more aggressive posture hasn’t been without missteps and controversy, however. It highlights potential risks of expanding such a powerful arm of state government.
The broad consumer-protection authority of the Attorney General’s Office allows it to conduct probes largely out of the public view. The office can issue civil investigative demands — basically subpoenas — calling for businesses to fork over troves of internal emails and financial records.
Last year, for example, the Second Amendment Foundation, a national nonprofit gun rights group based in Bellevue, sued Ferguson, objecting to what it called “an expansive, highly intrusive” probe into its affairs that had been going on since 2021.
“We had enough of his harassment,” said Alan Gottlieb, the founder of the foundation, in an interview. He asserted the investigation was “politically motivated” due to the group’s opposition to gun restrictions, including measures like an assault weapon ban championed personally by Ferguson.
Gottlieb says his group was never told what it might have done wrong but was served with numerous civil investigative demands and ultimately turned over some 50,000 pages of records. The probe, he added, has cost the foundation hundreds of thousands of dollars in legal and accounting fees.
A federal judge disagreed that the foundation’s rights had been violated by Ferguson’s investigation, dismissing the lawsuit in January. The foundation has appealed the ruling.
While declining to comment directly on its investigation, a spokesperson for Ferguson’s office pointed to court filings and media reports about Gottlieb profiting substantially from Second Amendment Foundation dealings. The Wall Street Journal reported last year that Gottlieb, his family and related entities had received at least $22 million between 2010 and 2021, and it quoted an expert saying the unusual transactions appeared worthy of scrutiny.
So far, the Attorney General’s Office has filed no formal lawsuit against the gun rights group.
Ferguson rejects any suggestion that politics determine the targets of his consumer investigations. His office noted in an email that the office has “regularly brought cases against Democratic candidates and Democratic party organizations.” These include cases for campaign finance law violations by former Democratic House Speaker Frank Chopp and the King County Democratic Central Committee.
“Concerns about overreach”
Ferguson’s office points to his record in civil law enforcement cases since 2013 — 822 wins and two losses — as evidence it brings good cases.
Those two losses, however, highlight risks of Ferguson’s aggressive approach.
The first came after Ferguson sued to stop Albertsons from paying a $4 billion dividend to shareholders in advance of its proposed merger with Kroger, arguing the payment would leave Albertsons too financially weak to compete.
In December 2022, a King County Superior Court declined to block the payment, and the state Supreme Court declined to hear an appeal.
Ferguson’s subsequent move to block the entire merger, now being heard in King County Superior Court, also faces uncertain prospects.
If the state loses, Washington could be required to pay the opposing side’s hefty legal costs, on top of the $6 million the Attorney General’s Office is authorized to spend for outside counsel in the case.
Given that the FTC, with its much larger resources, was already bringing a similar case, “people will question whether that [was] a good use of AG resources,” said John Kirkwood, an antitrust expert and former FTC official who teaches law at Seattle University. “One lawsuit would have been enough.”
Ferguson’s second loss, the Savers Value Village case, was more high-profile. In that case, the state not only had to pay the Bellevue-based thrift retailer nearly $4.3 million in legal fees but was also called out by the court for some of its conduct.
The Attorney General’s Office had started investigating Value Village in 2014, alleging it was deceiving customers into thinking it was a nonprofit or charitable organization.
After the company declined to pay millions to settle the probe, Ferguson sued. The company prevailed with a unanimous decision by the state Supreme Court on grounds that its marketing was protected speech under the First Amendment.
In an Aug. 9, 2023, order awarding legal costs to Value Village, King County Superior Court Judge David Whedbee wrote: “State’s conduct during this case contributed to increased fees and costs.”
Whedbee noted that during the three-year investigation preceding the lawsuit, Ferguson’s office refused to meet with Value Village’s attorneys or disclose the specific practices it wanted changed, according to court filings.
During the litigation, Ferguson’s office “continued to send out news releases that claimed Value Village was deceiving its customers,” Whedbee noted. At one point, Ferguson himself posted X that “Value Village can’t hide behind the 1st Amendment to deceive customers.”
Although Whedbee did “not find any serious abuse of governmental power” in the case, he wrote “the State’s conduct in this matter raises concerns about government overreach.”
In the recent interview, Ferguson downplayed the Value Village loss.
“We disagree with the judge,” he said. “I’m sorry — talk to any litigator who’s brought [nearly] a thousand cases and asked them if they’ve ever had a judge say something they didn’t like about bringing a case.”
More to do
Although Ferguson points to his work as attorney general as an indicator of how he might govern, he acknowledges the two offices are so different that a comparison isn’t easy.
Ferguson said his record shows he’s been a problem solver who’d focus on core functions of government that aren’t serving the public well enough. He repeatedly cites the state ferry system as an example.
While Ferguson emphasizes his own “frugal” nature when asked about how he’d manage state spending as governor, his record as attorney general shows an appetite for bigger government.
Ferguson said he hopes his successor will continue to expand the Attorney General’s Office, given the large number of consumer complaints it continues to receive every year.
“As much as we have grown,” Ferguson said, “we could double all those operations and they’d all still be busy.”
