Florida AG v. OpenAI: Cannon Sends First State AG Sovereign AI Suit Back to State Court

Florida AG v. OpenAI: Cannon Sends First State AG Sovereign AI Suit Back to State Court

The forum battle in State of Florida v. OpenAI and Sam Altman is over — and Florida won. On September 8, 2026, U.S. District Judge Aileen M. Cannon granted the Florida Attorney General's motion to remand, sending the case back to the 10th Judicial Circuit in Highlands County and closing the federal case. Cannon denied Florida's request for attorney fees, writing that although "application of Supreme Court and Eleventh Circuit law to this case yields a clear answer," OpenAI's removal position "cannot be said to obviously exceed the parameters of good faith argumentation."

OpenAI had removed the case on the theory that Florida's FDUTPA count — premised on alleged COPPA violations in collecting data from children under 13 — raised a federal question. Cannon rejected both removal pathways:

• Grable substantial-federal-question test fails: even assuming COPPA was necessarily raised, the question is "heavily fact-bound" — a "context-intensive inquiry" into ChatGPT's operation and effects on minors — not the "pure question of law" Grable requires. She added that even "identical claims against Anthropic, Google, Meta, or Microsoft" would involve different platforms and facts, so the case wouldn't control future litigation.
• No complete preemption: "Just because state attorneys general may enforce COPPA in federal court does not mean they may not enforce their states' consumer protection statutes — even if premised on federal regulations — in state court."

The policy concern Cannon flagged cuts in plaintiffs' favor across the industry: allowing removal whenever a state consumer-protection suit references a federal statute "could 'herald a potentially enormous shift of traditionally state cases into federal courts.'"

What it means for enterprise risk teams: The first state sovereign enforcement suit against an AI developer now proceeds in state court — before a county jury in Highlands County, not a federal judge. The underlying claims remain the aggressive ones Florida filed June 1: four FDUTPA counts, negligence, gross negligence, strict liability, failure to warn, fraudulent misrepresentation, and public nuisance over ChatGPT's alleged deceptive safety representations, exposure of minors to harmful interactions, and dangerous advice on self-harm, drugs and violence. The remand ruling also signals that other state AGs suing AI companies can keep their cases in state court by pleading federal standards (COPPA, COPPA-style rules, Section 5 of the FTC Act analogues) as evidence of unfairness rather than as standalone federal claims. Venue, and with it jury pool and discovery posture, is now a front-line compliance consideration for consumer-facing AI products.¹

This resolves the pending watch on the first major procedural ruling in the case; future rulings will come from the Florida state courts.