The Other Corporate Restraints

Donald Trump thinks that young girls should get by with fewer dolls, but there is apparently no limit to the number of regulatory gifts he is offering Corporate America. Long-standing rules are being brushed aside, while laws such as the Foreign Corrupt Practices Act are not being enforced. Entire agencies such as the Consumer Financial Protection Bureau have been put in limbo. Investigations launched by the Biden Administration are being abandoned. Trump even pardoned a cryptocurrency company and its founders fined for anti-money-laundering deficiencies.

Big Business is not, however, escaping all oversight. That’s because there are two areas beyond Trump’s control that are still acting as checks on corporate abuses: state government regulation and private litigation.

The U.S. Justice Department may be focusing more on legitimizing Trump’s acceptance of a $400 million airplane from Qatar, but state prosecutors continue to go after misconduct in the business world. This is true even in red states. The Texas Attorney General’s office recently announced that it is collecting more than $1 billion from Google to settle allegations that the company unlawfully amassed private data on users regarding geolocation, incognito searches, and biometrics.

Hawaii’s AG negotiated a $700 million settlement with Bristol-Myers Squibb and Sanofi, resolving long-running litigation over the safety and efficacy of the blood thinner Plavix.

New Jersey’s AG and its Department of Environmental Protection announced a settlement of up to $450 million with 3M to resolve litigation over the company’s role in contamination of drinking water supplies with toxic PFAS substances, also known as forever chemicals.

Meanwhile in the courts, drug distributors McKesson, Cardinal Health, and Cencora (formerly AmerisourceBergen) together agreed to pay $300 million to a group of employee benefit plans to settle class action litigation alleging they contributed to the opioid epidemic in their marketing of the dangerous drugs.

A state jury in Louisiana recently determined that oil giant Chevron should pay $745 million in damages for harm caused to the coastline over many years of drilling activity. In the latest of a series of antitrust settlements in the meat industry, Tyson Foods and two other companies agreed to pay $64 million to settle allegations they conspired to fix prices on pork products provided to food service providers.

Defying the Trump Administration’s campaign to prohibit any efforts to address systemic racism and sexism, private anti-discrimination lawsuits move forward. Google just agreed to pay $50 million to settle allegations that it paid thousands of black workers less than their white counterparts and limited their opportunities for advancement.

A federal judge in California just granted preliminary approval to a class action settlement in which Walt Disney Company agreed to pay $43 million to resolve allegations that the compensation given to women in middle management was substantially lower than what was received by men in substantially similar jobs.

These are but a few of the steady stream of cases being brought by AGs and class action lawyers. It is far from desirable for the federal government to retreat from its primary role in business oversight. But until that policy shift can be reversed, the states and the courts are making sure that corporate misconduct does not go unchallenged.

This piece was originally published in the Dirt Diggers Digest newsletter.