Attorney general's deputies ask to tap consumer settlement fund to defend billions in federal funding

James Grayson, chief deputy at the New Mexico Department of Justice, told the committee that a recent U.S. Supreme Court ruling narrowed the availability of nationwide injunctions and has increased the workload and stakes of multistate litigation defending federal funding to the state. "New Mexico is now a party in more than 30 cases that have been filed against the federal government since the beginning of the year," Grayson said, framing the request as protection of federal revenues that support state programs.

Adolfo Mendez, chief special counsel, described an impact litigation team of nine attorneys and asked the Legislature to permit accessing up to 21% of the consumer settlement fund (the agency estimated about $11.8 million) to fund personnel and litigation costs so the office can sustain multi-year litigation without increasing the general fund contribution.

Committee members raised questions about sustainability, personnel compensation and how the money would be allocated; Vice Chair Munoz and others said they wanted a full breakdown showing how the requested fund access would be spent, how long it would sustain staffing, and how the office would avoid creating wage inflation across state agencies.

DOJ officials said the request aimed to reinvest recovered consumer dollars back into work that protects New Mexicans and preserves federal funding flows to the state. They noted the work extends beyond impact litigation to consumer protection, civil and criminal matters and solicitor general appeals work that can affect statewide revenues.

The committee asked for additional detail on the proposed personnel budget and long-term sustainment plan before deciding whether to authorize the requested fund access.