Since the start of President Trump's second administration, some State Attorneys General (AGs) have actively responded to executive orders and policy directives, including by initiating legal challenges in federal courts. Now State AGs may take on yet another role: filling the gap in federal enforcement of the Foreign Corrupt Practices Act (FCPA).
As we previously discussed in detail here, on February 10, 2025, President Trump issued an executive order (EO) directing Attorney General Pam Bondi to pause the Justice Department's enforcement of the FCPA, a federal statute that prohibits bribing foreign officials to obtain or retain business. 15 U.S.C. § 78dd-1, et seq. Since then, the Justice Department has publicly dismissed a high-profile FCPA prosecution of two executives and has directed FCPA prosecutors to pursue other priorities.
In response, on April 2, 2025, California AG Rob Bonta issued a legal advisory stating that, notwithstanding President Trump's pause on FCPA enforcement, FCPA violations remain actionable under California's Unfair Competition Law (UCL). AG Bonta thus signaled to businesses: don't let up on anti-corruption compliance efforts. Other state AGs, such as those in Massachusetts and New York, have similar state statutes at their disposal that could allow them to initiate anti-corruption enforcement. With these state laws providing a private right of action, private plaintiffs and even regulators in other countries may drive enforcement. While practical challenges and resource constraints may pose some limitations on these efforts, an effective compliance program remains the best defense against corruption risk.
State Unfair Competition Laws
California's UCL, enacted to preserve fair business competition and protect consumers, broadly prohibits unlawful, unfair, and fraudulent business acts and practices. BUS. & PROF. CODE, § 17200 et seq. As noted in AG Bonta's legal advisory, California courts recognize that violations of federal laws, including the FCPA, may thus be independently actionable as unfair business practices under the UCL. See Korea Supply Co. v. Lockheed Martin Corp., 29 Cal.4th 1134, 1144 (2003). The Supreme Court of California in Korea Supply Co. accepted that the UCL claim may be predicated on an FCPA violation, where the plaintiff there alleged that the defendant competing bidder prevailed in its bid by offering bribes and sexual favors to contracting officials in Korea. See id. at 1143-44, n.5.
With AG Bonta opening the door for state AG enforcement, other
AG offices looking for novel or aggressive enforcement theories may
follow California's lead. Companies whose business implicates
contact with foreign officials should therefore be wary of possible
new regulators in this space.
For example, Massachusetts and New York may represent the next most
likely candidates to entertain such an approach, as both
states' AG offices aggressively pursue similarly broad unfair
competition laws, and both states—like California—are
home to many global companies with international touchpoints.
The Massachusetts Consumer Protection Act empowers the AG to initiate enforcement action against persons who engage in "unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce." MASS. GEN. LAWS ch. 93A, §§ 2(a), 5. Generally, violations of other federal or state statutes do not give rise to per se liability under a Chapter 93A claim—plaintiffs must prove that the conduct leading to the violation is both (1) unfair or deceptive and (2) occurs in trade or commerce, based on the circumstances of the particular case. See Klairmont v. Gainsboro Rest., Inc., 987 N.E.2d 1247, 1252 (2013). However, violations of a limited number of statutes automatically give rise to liability under Chapter 93A if explicitly stated in the statute, such as the Federal Trade Commission Act (FTCA). See ch. 93A, § 2(b) ("[T]he courts will be guided by the interpretations given by the Federal Trade Commission and the Federal Courts to section 5(a)(1) of the Federal Trade Commission Act (15 U.S.C. 45(a)(1))[.]"; see also McDermott v. Marcus, Errico, Emmer & Brooks, 775 F.3d 109, 122 (1st Cir. 2014) (discussing that the FTCA gave rise to per se liability under Chapter 93A).
Unlike the FTCA, the FCPA is not explicitly referenced in Chapter 93A, and Massachusetts courts have not so far incorporated the FCPA into Chapter 93A so as to give rise to per se liability. However, AG Andrea Campbell may pursue an expansive view of Chapter 93A, arguing that the conduct that constitutes a FCPA violation—paying or promising something of value to a foreign official to secure an improper business advantage—also constitutes unfair and deceptive conduct arising in trade or commerce, thus satisfying elements of a Chapter 93A claim.
New York's consumer protection statute similarly prohibits deceptive acts or practices in the conduct of any business, trade, or commerce in the furnishing of any service in the state. N.Y. GEN. BUS. LAW § 349(a). Like Massachusetts' Chapter 93A, New York's Section 349(a) was modeled after FTCA, such that it may be subject to similarly expansive arguments that the conduct representing an FCPA violation also constitutes deceptive acts or practices under Section 349(a). See Bildstein v. MasterCard Int'l Inc., 329 F. Supp. 2d 410, 414 (S.D.N.Y. 2004).
Practical Limits: Jurisdictional Reach
While these state unfair competition laws apply broadly to a wide range of conduct, they are jurisdictionally limited. In California, UCL claims must involve either injury to California plaintiffs or injury resulting from in-state conduct. See Norwest Mortg., Inc. v. Superior Ct., 72 Cal.App.4th 214, 222 (1999). Similarly, both Massachusetts and New York require that the unfair and deceptive conduct occur primarily in the state in which the action is brought. See Resolute Mgmt Inc. v. Transatlantic Reinsurance Co., 29 N.E.3d 197, 201-02 (2015); Goshen v. Mut. Life Ins. Co. of N.Y., 774 N.E.2d 1190, 1195 (2002). Because the FCPA involves improper dealings with foreign officials, this jurisdictional requirement may limit potential state enforcement actions. However, the extensive business activities in these states with foreign entities and officials may give rise to improper conduct with sufficient ties to the state. (See our review of 2024 FCPA activity for discussion of the wide range of activities generating FCPA liability.)
Practical Expansions: Private Right of Action
Unlike the FCPA, some state unfair competition statutes provide for a private right of action, which may be another source of enforcement apart from State AG-led efforts. Both Massachusetts and New York allow private plaintiffs, including both individuals and businesses, to bring claims and, if successful, be awarded treble damages and attorneys fees. See MASS. GEN. LAWS ch. 93A, §§ 9, 11; N.Y. GEN. BUS. LAW § 349(h) (treble damages capped at $1,000). While limited to injunctive relief, California also allows private plaintiffs to bring suit under the UCL. BUS. & PROF. CODE, § 17200 et seq.
At their core, these statutes serve to protect consumers and competing businesses from unfair and deceptive acts. Where State AGs may be resource-constrained and face competing priorities, whistleblowers and business competitors may be most willing to pursue untested and expansive theories, particularly if treble damages and attorneys fees are also on the table.
Key Takeaways
As we've previously advised in response to the President's and DOJ's recent FCPA pronouncements, the FCPA continues to remain an enforceable law on the books. But where there is a temporary gap in FCPA enforcement on the federal side, other regulators (and private plaintiffs) may step in. As predicted, we have already seen certain foreign regulators raise their hands. AG Bonta's legal alert signaled that State AGs may also seek to fill the gap through enforcement of state unfair competition statutes. Moreover, with these state laws providing a private right of action not afforded under the FCPA, private plaintiffs may pursue similar claims. Companies should be mindful of potential exposure to State AG investigations and private lawsuits under these state statutes and continue maintaining internal compliance programs to review risks relating to corruption and deceptive business practices.
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