That question matters because more people are using tools like ChatGPT, Perplexity, Gemini and Copilot to research companies, professionals, industries and service providers. They’re looking for recommendations, researching potential advisors, identifying experts to follow and gathering information before making hiring decisions. When AI answers those questions, it has to pull information from somewhere, and much of that information comes from publicly available sources.

LinkedIn is particularly important because it contains a significant amount of professional information in one place. Profiles provide career history, experience, credentials and areas of focus. Content provides context. Recommendations, comments and engagement help round out the picture. Taken together, all of that information helps people understand who someone is professionally and what they may be known for.

Why LinkedIn Matters More Than Ever

For years, I’ve encouraged lawyers, consultants, executives, recruiters and other professionals to invest in LinkedIn because it helps people understand who they are, what they do and why they should pay attention. I’ve seen firsthand how a strong LinkedIn presence can lead to new business opportunities, speaking engagements, media inquiries, recruiting conversations, referrals and valuable professional relationships.

What’s changed is how people gather information. Historically, someone might have searched Google, visited a website, looked at a biography and reviewed a few search results before reaching out. Today, many people are starting their research with AI tools. They’re asking questions and receiving summarized answers. They’re looking for experts, service providers and sources of information without necessarily clicking through multiple websites.

That shift has important implications for professionals. When AI platforms evaluate information, they’re looking for evidence that helps them understand who someone is, what experience they have and what topics they’re associated with. LinkedIn happens to be one of the places where professionals regularly publish information about their work, share their perspectives and participate in conversations related to their industries.

The result is that LinkedIn is no longer just helping people find you. It is increasingly helping people and technology understand you.

How Content Helps People and AI Understand Your Expertise

Many professionals spend a lot of time updating their LinkedIn profile and very little time thinking about their content. A profile is important. It provides context about your background, your experience and your current role. But a profile only tells part of the story.

Content helps people understand how you think. I’ve seen professionals spend weeks refining their profile and almost no time creating content. The profile helps people find you. The content often helps people remember you.

Content comes up in almost every client conversation I have because it’s one of the clearest ways to demonstrate experience and credibility. Many professionals tell me they don’t know what to post or worry they don’t have anything original to say. What I often tell them is that some of the strongest content comes from the questions they’re already answering every day.

• What are clients asking?
• What challenges keep coming up?
• What trends are you seeing?
• What mistakes are people making?
• What lessons have you learned through experience?

Those topics are often much more valuable than trying to come up with something clever or groundbreaking.

When a lawyer regularly writes about developments affecting clients in a particular industry, people begin to associate that lawyer with those issues. When a consultant shares observations about leadership, personal branding or business development, people gain a better understanding of their perspective. When executives write about building teams, managing growth or navigating challenges, they help others understand how they approach decision-making.

Over time, those posts, articles and comments create a collection of information that helps people understand what you know and what topics are closely connected to your experience.

Why Content Matters for AI Visibility

One pattern I see repeatedly on LinkedIn is professionals talking about too many unrelated topics. One week they’re posting about leadership. The next week it’s hiring. Then productivity. Then company culture. Then something completely disconnected from the work they actually do.

Any individual post may be useful, but taken together they can make it harder for people to understand what that person is known for professionally.

When someone lands on your profile, reads your content or comes across your name in a conversation, there should be a clear connection between your experience and the topics you discuss most often.

For example, if you’re an employment lawyer, people should expect to see commentary about workplace issues, employment law developments, management challenges and topics affecting employers. If you’re a recruiter, your content might focus on hiring trends, career development, compensation and talent strategy. If you’re a consultant, your content should reflect the issues your clients hire you to solve.

I’ve found that professionals often worry too much about repeating themselves. In reality, most people aren’t seeing every piece of content you publish. They’re seeing occasional posts over time and gradually forming an impression of who you are, what you know and where your experience lies.

Some of the most recognizable professionals on LinkedIn return to the same subjects again and again from different angles. They answer different questions. They share new examples. They comment on industry developments. They offer lessons learned from their work.

A few months later, someone is looking for a lawyer, consultant, recruiter, coach or advisor and a particular name comes to mind. That usually isn’t an accident. It’s often the result of consistently contributing to conversations related to the work you do and the expertise you want to be known for.

What to Review on LinkedIn to Improve Your AI Visibility

1. Review your LinkedIn headline: Many professionals still use headlines that only include their title and employer. While that’s accurate, it doesn’t tell people much about the work they actually do.

Think about the questions people ask when they’re looking for someone with your background. What industries do you serve? What problems do you help solve? What topics are central to your work? Your headline should help answer those questions quickly.

A strong headline gives people context. It helps them understand your expertise before they’ve read another word of your profile and creates stronger connections between your name and the work you’d like to be known for.

2. Revisit your About section: Your About section is one of the most underutilized areas of LinkedIn. Too often it reads like a formal biography filled with credentials, job titles and accomplishments. Those details matter, but people are also trying to understand who you help, what experience you bring and why your perspective is worth paying attention to.

Pay particular attention to the opening few lines because that’s what people see before clicking “see more.” If those opening lines don’t clearly communicate who you are and what you do, many people won’t continue reading. The strongest About sections feel approachable, informative and specific. They help people quickly understand what makes you different and why they should connect with you.

3. Create more original content: One of the easiest ways to strengthen your visibility is to create more content based on your own experience. That doesn’t mean every post has to be groundbreaking. Some of the most effective content comes from answering common client questions, sharing lessons learned, discussing trends you’re seeing or explaining developments in your industry. People can find information almost anywhere. What they can’t find anywhere else is your perspective. That’s often what separates content people remember from content they scroll past.

Don’t overlook LinkedIn newsletters and articles. They provide a strong opportunity to showcase your expertise in greater depth while creating content that remains discoverable over time. As more people use search engines and AI tools to research professionals and topics, these longer-form pieces can play an important role in strengthening your visibility and credibility.

4. Focus on a few core topics: When I review LinkedIn profiles and content, one of the first things I look for is focus.

Can someone quickly understand what this person is known for professionally? Can they identify the topics this person talks about most often? Is there a clear connection between those topics and the work they actually do?

The professionals who are easiest to remember on LinkedIn usually spend time talking about the same subjects from different angles. They answer questions, share observations, comment on industry developments and talk about lessons they’ve learned through their work. Over time, people begin to connect those individuals with certain topics because they’ve seen them contribute to those conversations regularly.

I think many professionals worry too much about repeating themselves. Most people aren’t seeing every piece of content you publish. They’re seeing occasional posts over time and gradually forming an impression of who you are, what you know and the work you do.

As you’re thinking about your content, ask yourself a few questions. If someone asked ChatGPT who they should follow in your industry, would you show up? If they asked for experts on the topics you work on every day, would your name come up? If they asked about your company, would the answer accurately reflect what your organization actually does?

More people are using AI tools to research professionals, companies and industries. The more content you create around the work you do, the more information people have available when they’re trying to understand your experience, your perspective and the topics you’re most closely associated with.

5. Audit your AI footprint: More people are using AI platforms to research professionals, companies and industries. Before reaching out to a lawyer, consultant, recruiter, advisor or service provider, they’re often gathering information through tools like ChatGPT, Perplexity, Gemini and Copilot. That’s why it’s important to understand what those platforms are saying about you.

Ask questions about yourself, your company and the topics you’d like to be known for professionally. Are you showing up at all? Are the descriptions accurate? Do the topics you’re known for match the work you’re actually doing? Who else appears alongside you?

The answers can tell you a lot about your current online presence. In some cases, the information is incomplete. In others, it may reflect work you did years ago rather than the work you’re doing today.

If the results don’t accurately reflect your experience or the work you want to be known for, that’s useful information. It may mean there isn’t enough content available about the work you’re doing today. It may mean you’re talking about too many different things. It may mean your profile, content and online presence aren’t telling a consistent story.

One of the reasons I encourage professionals to create content on LinkedIn is because every article, post and comment adds to the information available about them online. Over time, that content helps people better understand what you know, the work you do and the topics people know you for. As more people use AI tools to research professionals and businesses, that information may play a growing role in how you’re discovered online.

6. Don’t Overlook Your LinkedIn Company Page: Many organizations spend significant time building the profiles of their leaders and subject matter experts but pay very little attention to their LinkedIn Company Page. That’s a missed opportunity.

When AI tools gather information about a company, they’re looking for publicly available sources that explain what the organization does, who it serves and what it’s known for. Your LinkedIn Company Page helps provide that context. The company description, industry focus, services, content and employee activity all contribute to the information available about your business online.

As more people use AI tools to research companies and service providers, a strong Company Page can help reinforce your expertise and make it easier for people to understand your organization, your capabilities and the work you do.

7. Pay Attention to Your Recommendations: Recommendations are one of LinkedIn’s most overlooked features. Most professionals spend time updating their profile and creating content but rarely think about the recommendations they’ve received from clients, colleagues, managers and business partners.

What’s interesting about recommendations is that they provide something your profile and content can’t: other people describing your experience, expertise and impact in their own words.

As AI tools gather information from publicly available sources, recommendations add another layer of context about who you are professionally. They often contain details about the work you’ve done, the problems you’ve solved and the qualities people associate with you. In many cases, they reinforce the same themes that appear throughout your profile and content.

If your recommendations are outdated or don’t reflect the work you’re doing today, consider reaching out to clients, colleagues or business partners for updated recommendations that better reflect your current experience and expertise.

The more consistent the story across your profile, content, recommendations and Company Page, the easier it becomes for people and AI platforms to understand who you are, what you do and what you’re known for.

AI and LinkedIn Checklist

• Review your LinkedIn headline and make sure it clearly reflects the work you do and the topics you’d like to be known for.
• Update your About section so it accurately reflects your current experience, expertise and audience.
• Create more original content based on your observations, experience and the questions people ask you most often.
• Focus on a handful of topics that align with your work rather than posting about unrelated subjects.
• Publish LinkedIn articles and newsletters to create more long-form content connected to your name and expertise.
• Review your LinkedIn Company Page and make sure it accurately describes your organization, services and areas of expertise.
• Request updated recommendations that reflect the work you’re doing today.
• Search for yourself, your company and your areas of expertise on ChatGPT, Perplexity, Gemini and Copilot.
• Compare what AI says about you with how you’d like to be known professionally.
• Continue creating content that helps people understand what you know, the work you do and the topics you discuss most often.

Key Takeaways

• More people are using AI tools to research professionals before deciding who to hire, follow, interview or refer.
• LinkedIn plays a growing role in how professionals are discovered and understood online. A profile explains your background.
• Content helps people understand your expertise. Focused, consistent content makes it easier for people to connect your name with the work you do.
• Your own ideas, observations and experiences are often your most valuable content.
• Search for yourself on AI platforms periodically and pay attention to what information is showing up, what’s missing and how you’re being described.

AI hasn’t changed the fundamentals. People still hire professionals they trust. They still look for experience, credibility and good judgment before making decisions. What has changed is how they gather information.

That’s why I believe LinkedIn deserves more attention than ever. Every article, post and comment contributes to the information available about you online. Over time, that content helps people understand what you know, the work you do and the subjects you spend your time talking about.

More people are turning to AI tools to research professionals, companies and industries before making decisions. The people who are creating content, sharing insights and participating in conversations today are helping shape the information others will find tomorrow.

For more on AI, check out these articles:

How to Quickly Improve Your AI Search Results and Enhance Your Visibility
Seven Ways to Improve Your AI Search Results
Why LinkedIn Is Becoming Increasingly Important for AI Search Visibility
What AI Knows About You and Why It Matters More Than Ever
The AI Prompt I Use When I Need Better LinkedIn Content Ideas

Stay in Touch! Connect with me on LinkedIn,  Threads, YouTube, Instagram, sign up for my email list and follow my blog. Obtain a copy of my LinkedIn Secrets guide. Sign up for my personal branding summer school course.

The changes affect a number of areas of the arbitral process, with a focus on efficiency, transparency, and adapting to new technologies.

The ICC published several useful resources alongside the 2026 Rules, including a comparison of the 2026 and 2021 rules and an explanation of what the ICC views as the most significant changes.

Click here to read the full GT Alert.

Under the procurement at issue, the Navy sought a contractor to provide services to manage, operate, and maintain the Navy’s emergency ship salvage material system and to support its oil and hazardous substance spill response program worldwide.  The case arrived at GAO with considerable history: in an earlier protest, GAO had sustained Owl’s challenge because the Navy failed to evaluate professional employee compensation as required by FAR 52.222-46, which had been incorporated in the original RFP.   After a second award selecting the other offeror, PCCI, and a second round of corrective action, the Navy took a different approach.

Rather than complete a fresh evaluation of professional compensation, the Navy instead amended the solicitation to remove FAR 52.222-46 from the RFP because the agency had concluded that the contract lacked “a meaningful amount of professional employees.”  In connection with this amendment, the Navy advised that offerors would only be permitted to revise their cost/price proposals.  After an unsuccessful agency-level protest, Owl challenged the Navy’s removal of FAR 52.222-46 and its limitation of proposal amendments in a pre-award protest at GAO.  Owl was unsuccessful on the first challenge, but successful on the second.  GAO denied Owl’s challenge to the removal of FAR 52.222-46, deferring to the Navy’s judgment that 15 professional employees out of the 249-person workforce (about 6%) did not constitute “meaningful numbers” in the context of the contract.  

However, GAO sustained Owl’s challenge to the limitation on proposal revisions.  The Navy argued that the removal of FAR 52.222-46 was immaterial to offerors’ technical proposals, as the considerations envisioned by that FAR provision directly impacted cost/price proposals – not offerors’ technical approaches.  GAO was not persuaded. Examining the RFP’s requirements, GAO found that offerors’ technical proposals were required to address managing key and non-key personnel attrition, the approach to retaining senior engineering staff and recruiting less experienced workers, and more broadly the offeror’s approach to recruiting, retention, training, and ensuring availability of quality personnel.  These areas were inextricably connected to the professional compensation criteria under FAR 52.222-46.

The removal of the FAR provision eliminated the need for offerors to focus specifically on the levels of proposed professional compensation, thereby opening up additional options for an offeror to propose a technical approach that the firm believed would make its proposal more competitive. Owl reinforced this point with a declaration identifying specific technical revisions the firm would consider making if permitted to revise its technical proposal in light of the amendment. Moreover, the RFP required that offerors’ technical proposals be consistent with their cost/price proposals — further demonstrating the interconnection between the two volumes.  GAO accordingly sustained the protest on the ground that the Navy’s restriction on proposal revisions was unreasonable.  In sustaining the protest, GAO recommended that the Navy request final proposal revisions without the restriction limiting revisions to the cost/price volume. The Owl International decision offers important practical guidance for government contractors navigating mid-procurement amendments.  When an agency amends a solicitation but limits offerors’ ability to revise their proposals, offerors should carefully analyze whether those restrictions prevent them from fully responding to the amendment’s impact on the competition.  If so, offerors should seriously consider filing a pre-award protest – and should act quickly, as pre-award protests must be filed before the closing date for receipt of proposals.  GAO will scrutinize whether a limitation on revisions is truly consistent with the full scope of the amendment’s effect on the procurement. For contractors facing similar restrictions, the decision underscores the value of building a concrete, record-based case: the more specifically a contractor can demonstrate how an amendment affects its technical approach, the stronger its position at GAO.

Background

The solicitation at issue stated that phase I proposals were due by December 9, 2024, and phase II proposals were due by April 10, 2025. The challenged concern, UNCOMN, submitted its phase I and phase II proposals with pricing by the December 9, 2024 phase I deadline. In a size protest to the area office, the appellant alleged that April 10, 2025 (the phase II deadline) was the operative date for determining size, and UNCOMN was large as of January 1, 2025 (per SAM.gov data). According to the appellant, that later date controlled because the proposal could still be amended and would not be evaluated until that date.

In December 2025, the SBA Area Office dismissed the protest as nonspecific under 13 C.F.R. § 121.1007, finding that the protest focused on UNCOMN’s alleged attempt to “exploit” the rules rather than showing that UNCOMN was not small on the pertinent date for size determination. Appellant then appealed to OHA.

OHA Decision

OHA denied the appeal and affirmed the Area Office’s ruling, explaining that 13 C.F.R. § 121.404(a) is clear: size is determined as of the date the concern submits its initial offer or response which includes price. Thus, OHA rejected the argument that the relevant date should be April 10, 2025 because that was when pricing would be final and considered by the agency. OHA also found that the appellant did not show that UNCOMN was large as of December 9, 2024, the date it submitted its priced offer. Instead, the January 1, 2025 SAM data supported that UNCOMN became large after it had already submitted its initial offer including price. Further, OHA stated that none of the 13 C.F.R. § 121.404(a) exceptions affecting the date of size determination applied.

Because UNCOMN’s size had to be assessed as of December 9, 2024, and not April 10, 2025, OHA found no basis to overturn the Area Office’s ruling.

Key Takeaway

For contractors competing for small business set-aside work, OHA’s decision in DecisionPoint highlights the importance of proposal submission timing. Even if a company subsequently grows to be other than small, allegations of unfairness or “exploitation of the regulations,” standing alone, will not succeed in challenging a size certification associated with early submission of the initial proposal with pricing. Rather, the key question will be whether the company was other than small on the date pricing data was submitted.

Courts maintain an inherent power to correct miscarriages of justice in certain circumstances. In deciding whether to apply this power, courts consider factors such as “the clarity of the error, its gravity, its character…, the impact of the error on the defendant, the impact of correcting the error on the government, and the extent to which the defendant acquiesced in the result.” Courts have applied their inherent power to strike down wrongful convictions. They used to apply this power somewhat broadly to forgive untimely actual innocence habeas petitions before Congress largely limited this power by enacting the one-year Antiterrorism and Effective Death Penalty Act (“AEDPA”) statute of limitations. This AEDPA statute of limitation had been an issue for Terrance Lewis, also known as “Stink,” when I started working on his case for the Undisclosed podcast. Lewis was seventeen years old when he and two other men were convicted of the 1996 murder of Hulon Howard in his home in Philadelphia. At a federal habeas hearing, an eyewitness testified that Lewis was not one of the three men she saw enter and leave Howard’s home shortly before and after the shooting, and one of Lewis’s alleged accomplices testified that Lewis was not involved in the crime. In 2010, Magistrate Carol Sandra Moore Wells found that Lewis was actually innocent but that his habeas petition was untimely and thus procedurally barred under the AEDPA.

While I worked on Lewis’s case, he had a pending resentencing hearing under Miller v. Alabama as a juvenile lifer and had filed a successor habeas petition as well as a petition with the Philadelphia CIU. When reviewing the police file in Lewis’s case for the podcast, we found previously undisclosed notes from a police interview with the State’s key eyewitness in which she stated that the perpetrator she knew as “Stink” had the last name Muhammad. This new information might have allowed Lewis’s successor habeas petition to proceed or alternatively might have led to relief from the CIU.

But the State ordered that Lewis had to abandon his habeas claim to get his juvenile resentencing hearing scheduled, and the CIU had not completed its review of the case by the date of that hearing. As Lewis entered the courtroom on May 21, 2019, he fully expected that he would simply be resentenced. Instead, Common Pleas Judge Barbara McDermott began inquiring into the evidence of Lewis’s innocence. Even though the case was only before her for resentencing, Judge McDermott exercised the inherent power of the court to declare Lewis innocent and set him free.

There are other aspects to the inherent power of the court. In Dietz v. Bouldin, 579 U.S. 401 (2016), the Supreme Court held “that district courts have the inherent authority to manage their dockets and courtrooms with a view toward the efficient and expedient resolution of cases.”

Now, in United States v. Dangleben, 2026 WL 1530107 (3rd Cir. 2026), the Third Circuit used this power to issue a major opinion of first impression. In Dangleben, “Richardson Dangleben, Jr. was charged in Virgin Islands Superior Court for first-degree murder and for using a firearm in the commission of a crime of violence.” After some pre-trial back-and-forth, “the District Court ordered the Government to “file any notice pursuant to 18 U.S.C. § 3593(a) no later than January 12, 2024.” 18 U.S.C. § 3593(a) is the statutory section covering the “Special hearing to determine whether a sentence of death is justified.”

Thereafter, “[o]n February 7, 2024, the Government filed a notice with the District Court that the United States “will not seek the death penalty for Richardson Dangleben, Jr.” But then, “[a] little more than a year after it had represented to the Court that it would not seek the death penalty, on February 12, 2025, the Government moved to stay proceedings for 120 days ‘to review [its] no-seek decision in this capital-eligible case.'” After some more back and forth, on May 21, 2025, “the Government filed a notice to seek the death penalty.” The district court then granted Dangleben’s motion to strike the State’s motion to see the death penalty, ruling, inter alia, that “the Government’s seek notice violated the Court-ordered deadline.”

On appeal, the government claimed that the district court “violated § 3593(a) because the statute requires only that a death notice be filed ‘a reasonable time before the trial.'”

The Third Circuit disagreed, ruling as follows:

Mindful of the black-letter law just noted, we first consider whether § 3593(a) precludes or otherwise displaces a district court’s inherent power to set a deadline by which the Government must notice if it will seek the death penalty. It does not. Recall that § 3593(a) directs the Government to file a seek notice “a reasonable time before the trial.” What constitutes a “reasonable time” will vary from case to case and is committed to the sound discretion of the trial judge. So we hold that § 3593(a) does not displace a district court’s inherent power to manage its cases to ensure a just and fair resolution. In fact, the requirement that the Government file a seek notice within “a reasonable time” will sometimes require the district court to police that line….

Setting a seek deadline is sensible for at least three reasons. First, it allows the court to manage the case fairly and efficiently from start to finish. Second, it helps counsel litigate the case effectively. Third, it ensures that defendants’ rights are protected….

Apart from those considerations, consider the practical effect of the Government’s position. If the Government had carte blanche to revoke its no-seek decisions, defense counsel would have to make decisions about staffing, discovery, and trial strategy as if the case would have a guilt and a penalty phase even after the Government affirmed that it was not seeking the death penalty. The waste of time and expense in those circumstances is obvious.

On June 2, 2026, the Federal Trade Commission (FTC) required nonprofit health system Ascension Health Alliance to divest several ambulatory surgery centers (ASCs) as a condition of closing its proposed $3.9 billion acquisition of AmSurg LLC. The order reflects the FTC’s continued focus on competition in local outpatient markets.

Ascension, one of the nation’s largest nonprofit health systems, sought to acquire AmSurg, a major ASC operator with more than 250 facilities across 34 states. The transaction also underscores the healthcare industry’s continued shift toward outpatient care.

Why the FTC Intervened

According to the FTC, the transaction would likely lessen competition for certain outpatient surgical services in several metropolitan areas. In those markets, Ascension and AmSurg allegedly compete directly in ASCs offering gastroenterology, ophthalmology, and orthopedic procedures.

The FTC alleged that reduced competition in these local markets could lead to higher prices, lower quality, and less innovation. The proposed order requires seven divestitures and includes transition, monitoring, and advance-notice provisions that could affect future deal planning.

Why It Matters

Ascension/AmSurg shows the FTC’s growing focus on outpatient care. Although hospital mergers have long drawn antitrust scrutiny, regulators are increasingly examining ASCs, physician practice acquisitions, and other transactions that shape care delivery outside the hospital setting.

The case is also a reminder that healthcare antitrust analysis remains local. Even when parties operate nationally, the FTC focuses on competition in particular service lines and geographic markets, making targeted divestitures and other tailored remedies a recurring feature of healthcare merger review.

Nonprofit Status Is Not a Shield

One notable feature of the case is that Ascension is a nonprofit. But nonprofit status does not insulate a transaction from antitrust review.

Although Section 5 of the FTC Act applies to corporations organized for profit, the scope of the nonprofit exemption has long been debated and applied functionally rather than formally.

The FTC and courts generally ask whether an organization is genuinely operated for charitable purposes or instead functions more like a commercial enterprise. Tax-exempt status may be relevant, but it is not dispositive.

In any event, nonprofit organizations remain subject to other federal antitrust laws, including the Clayton Act and Sherman Act, and healthcare transactions involving nonprofit systems remain fully subject to merger review.

A Familiar Enforcement Theme

The Ascension matter fits within a longstanding pattern of the FTC’s antitrust enforcement involving nonprofit healthcare systems. For decades, the FTC has challenged or closely scrutinized nonprofit hospital and health system transactions where it concluded a deal could lessen competition in local markets.

Examples include Evanston Northwestern/Highland Park, ProMedica/St. Luke’s, and Penn State Hershey/PinnacleHealth. Nonprofit healthcare mergers have long been subject to federal antitrust scrutiny, and nonprofit status has not prevented FTC enforcement where it identifies competitive concerns.

Key Takeaways

The FTC’s action matters beyond Ascension. Most importantly, it reinforces that nonprofit transactions can face the same antitrust scrutiny as for-profit deals when they raise competitive concerns. Nonprofits considering mergers, acquisitions, affiliations, or joint ventures should assess market concentration, service-line overlap, and local competitive dynamics early.

The case also underscores the risk for nonprofits operating in commercial markets. Hospitals and other tax-exempt organizations that compete with for-profit firms should not assume that nonprofit status will limit regulatory scrutiny, particularly where the transaction affects local outpatient markets.

Finally, nonprofit organizations should be prepared for remedies that can materially reshape transactions, including divestitures, extended review periods, and continuing oversight. For boards and executives, antitrust risk should be treated as an ongoing governance issue, not just a transactional hurdle. Akerman can assist nonprofit organizations in addressing these governance issues, as well as helping them evaluate antitrust risk when considering transactions of this nature.

Microchipping Employees Is Prohibited (HB 2303)

Effective June 11, 2026

Effective June 11, employers may not require or even request that employees have a microchip implanted under their skin. The only exception covers medical devices connected to an existing health condition, and only where the device transmits information strictly necessary for treating or preventing that condition.

Washington joins 14 other states (Alabama, Arkansas, California, Indiana, Missouri, Mississippi, Montana, Nevada, New Hampshire, North Dakota, Oklahoma, Utah, and Wisconsin) in enacting similar laws.  So why was this necessary? Were employers in these states really requiring their employees to implant a company-sponsored microchip? Not quite. While a handful of companies have implemented microchipping in their business in some fashion, these laws are largely preventive measures, designed to prohibit such practices before the technology becomes more widespread.

Practical Takeaway for Employers: This law is unlikely to affect most employers, but if your organization has explored or piloted any implantable tracking technology, discontinue those programs immediately and review any related policies.

Wage Violations Just Got Significantly More Expensive (HB 2479)

Effective June 11, 2026

Washington has substantially expanded the enforcement authority of the Department of Labor and Industries (DOLI) with respect to wage violations. Key changes include:

• The $20,000 penalty cap is eliminated. Willful wage violations can now be penalized up to the full amount of unpaid wages, plus interest, with no ceiling.

• A penalty matrix is coming. DOLI will develop a formula weighing factors such as the number of affected employees, severity of the violation, business size, compliance history, and whether the employer acted in good faith. Repeat violations will result in higher penalties.

• A $1,500 minimum penalty per employee applies to all willful violations, regardless of the dollar amount of wages at issue.

• DOLI can now investigate proactively. The agency is no longer limited to responding to complaints. If DOLI has reason to believe a violation has occurred or is about to occur, it may open an investigation on its own and consolidate cases involving similar issues across employees.

• Penalties will increase automatically beginning in 2030 and every three years thereafter, adjusted for inflation.

• A limited waiver option exists for employers who are not repeat offenders, have not settled more than one wage complaint in the past 12 months (or three in the past 24 months), and pay all wages and interest owed within 10 business days of receiving a DOLI notice.

Practical Takeaway for Employers: Review your wage and hour practices now, particularly around overtime, meal and rest breaks, and final pay obligations. Given that DOLI can now investigate proactively and without a complaint, internal audits are a necessity. If you identify a potential violation, addressing it promptly and in good faith will impact any penalties assessed.

Washington Creates a Backstop for Private Sector Labor Disputes (HB 2471)

Effective June 11, 2026

The Public Employment Relations Commission (PERC), which has historically handled public sector labor matters, is now authorized to step in on private sector labor disputes under certain conditions. Specifically, PERC’s authority is triggered if the NLRB loses jurisdiction, declines to act, or if federal law ceases to preempt state regulation of private sector labor relations. When triggered, PERC would handle bargaining unit determinations, union certifications, unfair labor practice adjudications, and arbitration.

This law comes with a significant caveat. California and New York enacted similar legislation last year, and the NLRB has sued both states. A federal district court has already issued a preliminary injunction blocking California’s version while that litigation continues. Whether Washington’s law will ever take effect in a meaningful way may depend on how those cases are resolved.

Practical Takeaway for Employers: No immediate action is required, but employers with unionized or organizing workforces should monitor the California and New York litigation closely. If federal labor enforcement continues to contract, this law could become highly relevant quickly.

Noncompete Agreements Are Now Void (HB 1155)

Effective June 30, 2026

Noncompete agreements are no longer enforceable in Washington as of June 30. It does not matter when they were signed. Employers have until October 1, 2027 to notify any current or former employees or contractors who signed a noncompete agreement that is still active. The notice simply needs to inform the current or former employees that the restriction no longer applies.

Two things worth noting: confidentiality agreements are not affected by this law, and non-solicitation agreements are still permitted. Non-solicitation provisions must be limited to 18 months following the end of employment and can only cover workers who had a direct relationship with the relevant customer or employee.

The penalties for noncompliance are significant. Employers face actual damages or a $5,000 statutory penalty per violation, whichever is greater, plus attorneys’ fees. The state attorney general is also authorized to bring claims on behalf of employees.

Practical Takeaway for Employers: Audit your noncompete agreements now. Identify anyone whose agreement is still within its effective period, prepare compliant written notices, and work with counsel to revise your onboarding templates and employment contracts before June 30.

The lawyers at MHS are able to assist with any policy review or modification in light of these new laws.

Part of guideline development is assessing the available evidence. Even when we’re sure evidence is lacking, we still want to assess things carefully to makes sure there’s not more evidence than we thought, to critically assess what little data may be present and to highlight knowledge gaps.

We recently published a systematic review on antimicrobials for dentistry in dogs and cats. Specifically, we wanted to address a series of questions about use of antimicrobials for routine dental procedures, looking at both peri-procedural (giving antibiotics shortly before the procedure and up to 24 hours after) and post-procedural (given >24h after) antibiotic administration.

Unsurprisingly, we found that data were really limited. However, that’s important itself.  It’s a gap that needs to be filled.

We also found that studies rarely looked at (or were well designed to look at) key outcomes. We care about clinical outcomes...disease.

For dental procedures, we settled on sepsis, infective endocarditis, local tissue infection and adverse events as the critical outcomes.

We also (with some debate) included bacteremia (bacteria in the bloodstream). That’s not a clinical outcome. It’s a state that may or may not be associated with disease. You’re bacteremic regularly and never have any consequences from it. However, bacteremia can progress to infection in rare circumstances. We wouldn’t normally use a non-clinical outcome like that, especially one that is as common as bacteremia. However, most of the comparative study in dogs and cats has focused on bacteremia, not clinical outcomes. So we included it, recognizing the limitations.

The systematic review highlighted the commonness of bacteremia associated with dental procedures. The figure below shows that meta-analysis. The proportion column is the prevalence of bacteremia, and the pooled prevalence across studies was 47%.  

These studies didn’t report clinical consequences of that, but when you consider how many dogs/cats get dental procedures, the really high bacteremia rates and the really low apparent incidence of dogs/cats getting sick after dentals, you can see how bacteremia is not a good proxy for clinical disease.

To investigate this further, one of our questions was whether dental-associated bacteremia is associated with sepsis, endocarditis or other infectious consequences. Only two studies looked at this. Both were small (total of 22 dogs with bacteremia and 11 without) and no infectious diseases were noted. The data were so limited we couldn’t evaluate them further or draw any conclusions.

We then asked “In dogs and cats undergoing dental procedures, does peri-­ procedural administration of antimicrobials reduce the incidence of endocarditis, sepsis, bacteraemia or other infectious complications?”

No studies looked at clinical outcomes.

Two looked at bacteremia. They were small and meta-analysis didn’t suggest a beneficial effect. Certainty of evidence was really low based on a variety of factors.

That doesn’t mean we can say antibiotics don’t work. It means we have nothing suggesting they do. If we look at human dentistry where there is stronger data, antibiotics are not indicated apart from some high risk patients. So, our lack of identified effect has to be tempered by realizing data are weak, but there’s nothing suggesting antibiotics are needed for typical veterinary dental procedures and patients.

If there’s no evidence that peri-procedural antibiotics are useful, there’s even less reason to think that antibiotics given after the procedure are useful. However, that’s commonly done in veterinary and human dentistry. We looked at that, aiming to address the question “In dogs and cats undergoing dental procedures, does post-­ procedural administration of antimicrobials reduce the incidence of endocarditis, sepsis, bacteraemia or other infectious complications?” There were no data for this. If we look at data from humans and human guidelines, routine post-procedural use is not typically recommended or useful.

Did this effort actually tell us anything?

Yes and no.

I think we ended up with the conclusions we were expecting....bacteremia common, there’s no evidence antibiotics are useful, data are really limited.

However, this study still provided important information to show that we have no supporting evidence for routine antibiotics. When we have an intervention that has potential harms (e.g. cost, adverse events like diarrhea, antibiotic resistance concerns, administration challenges, pain from administering a pill to an animal with a sore mouth), the default is not to use it unless we have compelling data or plausible reason to think that the benefits outweigh the harms. For the typical veterinary dental procedure, we don’t have that.

Framed as a structured debate around the motion “Dispute Boards Are Unfit for Mega Projects,” the session brought together experienced stakeholders from across the project lifecycle to test the limits of dispute boards in today’s most complex infrastructure environments. Our session leader and moderator, Paul Taggart, a long-time construction executive and experienced neutral, had conceived the idea for the session. My fellow debater on the antagonist side, arguing that the standard DB process is not the best fit for purpose on Mega Projects, was Marianne Ramey, an experienced and highly-respected expert on delay and disruption. The protagonist side was ably represented by two highly-experienced and respected DB practioners, Simon Longley and Graham Easton. It was truly an honor (and a pleasure) to serve on such a distinguished panel. In general, the debate touched on all of the points set out below:

The Unique Challenge of Mega Projects

Mega projects—generally defined as those exceeding USD 1 billion—present a set of characteristics that distinguish them from conventional construction projects. These include:

• Multiple interdependent contracts and interfaces
• Significant political, economic, and environmental exposure
• High public visibility and stakeholder scrutiny
• Complex and often imbalanced risk allocation structures

These factors create conditions in which disputes are more likely, more complex, and higher in value. They also introduce risks that originate outside the project’s contractual framework, including governance failures and external political pressures.

The Intended Role of Dispute Boards

Dispute boards were designed to address project disputes through real-time, embedded engagement. When implemented effectively, they provide:

• Early identification and resolution of issues
• Ongoing project oversight, including site visits and regular meetings
• Neutral, expert determination of disputes
• Rapid decisions intended to maintain project momentum

Modern practice emphasizes that dispute boards serve primarily as dispute avoidance mechanisms, with much of their work focused on informal guidance rather than formal rulings.

Evidence shared during the session indicated that projects with actively engaged boards can, in some instances, proceed with few or no formal disputes, underscoring the preventative value of early and consistent involvement.

Structural Challenges at Mega Project Scale

Despite their benefits, the session highlighted several recurring challenges that raise questions about the scalability of dispute boards.

Governance vs. Contractual Resolution

Dispute boards operate at the contractual level, while many of the root causes of mega project underperformance arise at the governance level—including unrealistic assumptions, weak oversight, and fragmented accountability.

Timing and Entrenchment

By the time disputes reach formal consideration, critical project decisions are often already entrenched. This limits the ability of dispute boards to meaningfully influence underlying project outcomes.

Procedural Formalization

Large, high-value disputes tend to drive DB processes toward increased formality, including:

• Greater involvement of legal counsel and technical experts
• Expanded evidentiary submissions
• Hearing formats resembling arbitration

This evolution can erode the efficiency and speed that distinguish dispute boards from traditional dispute resolution processes.

Limits of Informality

The informal nature of dispute boards—often a key advantage—can also present risks in complex disputes, including:

• Perceived inconsistencies in decision-making
• Concerns regarding procedural rigor
• Increased likelihood of challenges and escalation to arbitration or litigation

These pressures can undermine confidence in the process, particularly where the stakes are exceptionally high.

Why Dispute Boards Still Matter

Notwithstanding these challenges, the Rome discussion reinforced that dispute boards remain a critical component of effective dispute management when properly deployed.

Their effectiveness is strongest where:

• Boards are appointed early, ideally at project inception
• Parties actively engage in ongoing, informal dialogue
• Dispute avoidance is prioritized over formal adjudication
• Boards are integrated into the broader project governance framework

Importantly, many criticisms of dispute boards reflect an outdated view of their role as purely reactive adjudicators. In practice, modern DBs are increasingly proactive, embedded participants in project delivery.

The Mega Project Paradox

A notable theme emerging from the debate is the possibility that dispute boards may, in some cases, manage symptoms rather than resolve underlying causes.

By resolving disputes sufficiently to allow projects to continue, dispute boards may inadvertently enable projects with deeper governance or structural issues to persist longer than they otherwise would.

While not universally accepted, this perspective highlights an important limitation: dispute boards cannot substitute for sound project design, governance, and decision-making.

What Should Project Stakeholders Do Now?

The discussion in Rome makes clear that the relevant question is no longer whether to use dispute boards—but how to deploy them effectively on mega projects.

Stakeholders should consider the following:

• Start with governance, not dispute resolution. Establish clear decision-making authority, accountability structures, and risk ownership before implementing dispute mechanisms.
• Appoint dispute boards early—and use them proactively. Early engagement allows boards to identify and address issues before they escalate into formal disputes.
• Design dispute board procedures for scale. Mega projects may require hybrid approaches that preserve flexibility while incorporating appropriate procedural safeguards.
• Align risk allocation with project realities. Overly aggressive or imbalanced risk transfer increases the likelihood of disputes that no mechanism can efficiently resolve.
• Plan for escalation. Recognize that some disputes will move beyond the board process and ensure that escalation pathways are clear, efficient, and enforceable.

Conclusion

The Rome session underscored that dispute boards remain a valuable tool in the delivery of complex infrastructure projects. However, their effectiveness on mega projects depends less on their presence and more on how they are integrated within the broader project ecosystem. The parties should discuss the possibility of new and innovative DB structured such as the possible use of one DB member solely as a mediator.

For project owners, contractors, and counsel, the implication is clear: dispute boards should be deployed as part of a comprehensive strategy that prioritizes governance, realistic planning, and collaborative project execution.

When aligned with these fundamentals, dispute boards can play a meaningful role in navigating the complexity and risk inherent in today’s largest and most challenging projects.

The brief responds to six questions posed by the en banc court and advances a straightforward proposition: under DIDMCA, a state may opt out of Section 521 federal interest-rate and exportation authority only with respect to loans made by state banks located in the opt-out state. Colorado therefore may regulate loans made by Colorado-chartered banks, but it may not apply its interest-rate restrictions to loans made by state-chartered banks located in other states.

Plaintiffs Frame the Case as One About Competitive Equality

The plaintiffs begin by emphasizing DIDMCA’s core purpose. Congress enacted Section 521 of DIDMCA to place FDIC-insured state-chartered banks on equal competitive footing with national banks. Prior to DIDMCA, national banks enjoyed the right under Section 85 of the National Bank Act to charge either their home state interest rates or 1% above the Federal Reserve discount rate, whichever was higher. Section 521 of DIDMCA extended comparable authority to state-chartered banks.  

According to the plaintiffs, Colorado’s interpretation would effectively eliminate that parity. National banks would remain free to lend to Colorado borrowers at rates authorized by their home states, while out-of-state state-chartered banks would be subject to Colorado’s usury restrictions. The plaintiffs argue that Congress enacted DIDMCA specifically to avoid such disparate treatment.

“Loans Made” Does Not Mean “Loans Executed”

One of the principal issues before the en banc court concerns the meaning of the phrase “loans made in such State” in Section 525, DIDMCA’s opt-out provision.

The plaintiffs argue that the panel majority incorrectly transformed the phrase “loans made” into “loans executed.” According to the brief, Congress never used the term “executed” in Section 525, unlike a different banking statute amending the National Housing Act enacted by the same Congress three months earlier that allowed a state to override preemption with respect to a mortgage loan “made or executed” in that state. Plaintiffs argue that “Congress’s decision not to use the word ‘executed’ in Section 525 shows that the majority erred by reading that word into the statute.”

Instead, the plaintiffs contend that a loan is made where the bank performs the key lending activities that create the loan relationship, culminating in the disbursement of funds. In their view, the majority improperly shifted the analysis from the lender’s actions to the location of either party to the transaction.

The plaintiffs maintain that Section 525 focuses on the bank that makes the loan, not on where the borrower resides.  The District Court reasoned that only lenders (in this case, the bank) make loans.  Borrowers do not make loans.  Borrowers only obtain or receive loans.  That was the principle basis upon which the District Court enjoined the Colorado Attorney General from enforcing the Colorado opt-out statute. This injunction remains in effect today.

Section 521 and Section 525 Must Be Read Together

The plaintiffs also argue that the panel majority improperly interpreted Sections 521 and 525 as though they operate independently.

Section 521 authorizes a state-chartered bank to charge interest at the rate permitted by the state where the bank is located. Section 525 permits a state to opt out of that regime with respect to “loans made in such State.”

According to the plaintiffs, the two provisions should be interpreted consistently. If Section 521 focuses on the location of the bank, then Section 525’s reference to “loans made in such State” likewise should be understood as referring to loans made by banks located in that state.

The plaintiffs argue that the majority’s interpretation creates an unwarranted disconnect between the two provisions and effectively rewrites the statute.

Legislative History Supports a Lender-Focused Reading

The plaintiffs devote substantial attention to DIDMCA’s legislative history.

They contend that Congress used similar “loans made” language in a series of federal interest-rate preemption statutes enacted during the 1970s and early 1980s. In each instance, Congress focused on the location of the lender rather than the location of the borrower.

According to the plaintiffs, none of these statutes was designed to allow one state to dictate the interest rates that state banks chartered in other states could charge. Rather, Congress sought to address competitive disparities among financial institutions while preserving a uniform framework for interstate lending.

The plaintiffs therefore argue that Colorado’s interpretation is inconsistent with the broader statutory framework from which DIDMCA emerged.

Regulatory Guidance Supports the District Court’s Interpretation

The brief also relies heavily on decades of federal regulatory guidance.

According to the plaintiffs, both the FDIC and the OCC have long treated the location of a bank’s loan-making functions as the determining factor in identifying where a loan is made. The relevant inquiry focuses on where the bank performs key non-ministerial lending activities, such as approving credit, communicating lending decisions, and disbursing funds.

The plaintiffs contend that this longstanding regulatory approach confirms that the borrower’s location is not determinative and that the district court correctly relied on that body of guidance when issuing the preliminary injunction.

Notably, these arguments now align with the positions recently advanced by both the FDIC and the OCC in their own amicus briefs supporting the plaintiffs.

The Statute Is Not Ambiguous

The plaintiffs also reject the notion that Section 525 is ambiguous.

They argue that the text, statutory context, purpose, legislative history, and regulatory interpretations all point to a single conclusion: “loans made in such State” refers to loans made by banks located in the opt-out state.

Because the plaintiffs view the statute as unambiguous, they contend there is no basis for adopting Colorado’s broader interpretation.

No Presumption Against Preemption Applies

Finally, the plaintiffs challenge the panel majority’s reliance on a presumption against preemption.

The brief emphasizes that Section 521 of DIDMCA contains an express preemption provision. When Congress expressly preempts state law, courts do not apply a presumption against preemption or require a heightened clear-statement rule.

The plaintiffs therefore argue that the majority erred by resolving perceived ambiguity in favor of state regulation rather than applying the statute’s express language.

Plaintiffs’ Strong Amicus Support in Tenth Circuit

The plaintiff trade associations received substantial support from a broad and diverse group of amici on June 4, 2026. The amicus filings underscore the far-reaching implications of the case for the banking system, federal banking regulation, interstate lending, and consumer access to credit.

The following amici filed briefs in support of the plaintiffs:

1. The Federal Deposit Insurance Corporation (FDIC);
2. The Office of the Comptroller of the Currency (OCC);
3. The American Bankers Association, Consumer Bankers Association, Bank Policy Institute, America’s Credit Unions, and fifty state bankers associations;
4. Twenty-one state Attorneys General;
5. Professors Todd Zywicki and Thomas Miller, Jr. and Center for Individual Freedom; and
6. The United States Chamber of Commerce.

The breadth of this support is noteworthy. The amici include the two federal banking agencies charged with administering and enforcing the federal banking laws at issue, a coalition representing virtually every segment of the banking industry, more than twenty state chief legal officers, leading academic experts on consumer finance and banking law, and the nation’s largest business organization.

Collectively, the amicus briefs argue that Colorado’s interpretation of Section 521 of DIDMCA conflicts with the statute’s text, history, and purpose; threatens the uniform operation of federal banking law; creates significant uncertainty for interstate lending markets; and would adversely affect the availability and cost of credit for consumers and small businesses.

Links to the amicus briefs supporting plaintiffs:

1. FDIC
2. OCC
3. ABA/CBA/BPI/State Bankers Associations/America’s Credit Unions
4. Twenty-One State Attorneys General
5. Professors Todd Zywicki, Thomas Miller, Jr . and the Center for Individual Freedom
6. U.S. Chamber of Commerce

Next Steps

On June 4, 2026, the State of Colorado requested an extension of time to file its opposition brief from June 29 until July 8.  The Plaintiffs’ reply brief will be due to be filed 14 days after the State of Colorado files its opposition brief.  Oral argument has been scheduled for August 18, 2026.

When Del Rio received the written consulting agreement to sign, instead of 4.5 years and $18,000,000, the terms were for just 2.5 years and $10,000,000. Del Rio claims he was told NCLH could not present the longer and more lucrative consulting agreement to its shareholders because of recent shareholder votes disapproving increases in executive compensation. The lawsuit alleges that the directors believed that they were at risk of being voted out if they informed their shareholders that they offered Del Rio, who was already the highest paid cruise executive in the history of the cruise industry, a 4.5 year consulting contract and $18,000,000.  

Del Rio further claims he was told if he signed the shorter agreement, NCLH would honor the additional two-year verbal promise by amending the written agreement before it ended.

After 2025, Del Rio was not paid for the additional two years he expected. It does not appear that Del Rio provided any consulting services to NCLH after he retired.

Causes of Action Alleged in the Lawsuit

Del Rios’ lawsuit alleges fours legal theories: (1) Fraud, (2) Promissory Estoppel, (3) Negligent Misrepresentation, and (4) Civil Conspiracy. You can read the lawsuit here.

The “Say-on-Pay” SEC Rules That Sparked the Secrecy

The scrutiny which Del Rio’s lawsuit claims the board was trying to avoid stems from federal financial regulations. Under the Dodd-Frank Wall Street Reform and Consumer Protection Act, public companies must hold a non-binding shareholder vote on executive compensation at least once every three years—a practice known as “Say-on-Pay.”

The Alleged Secret, Verbal Promise

In 2021 and 2022, NCLH shareholders overwhelmingly voted against NCLH’s executive pay packages. Investors and proxy advisory firms were understandably furious that Del Rio received a massive payment of $36,400,000 in 2020 while Norwegian cruise ships were completely grounded by the pandemic, the company was hemorrhaging billions, and thousands of NCL employees were furloughed.

Exorbitant Pay Notwithstanding Corporate Losses and Thousands of Employees Terminated

We reported on these self-inflicted difficulties at the time in a series of articles:

• Nepotism and Employee Firings Plague Norwegian Cruise Line Holdings: Stock Awards During a Deadly Pandemic?

• NCL’s CEO Frank Del Rio Rakes in $36,400,000 in 2020 While Crew Members Struggle, and

• Shareholders to CEO Del Rio: Thumbs Down to $36,400,000 Compensation.

Del Rio’s lawsuit alleges that because the board members were facing massive public embarrassment and reputational damage over these “say-on-pay” votes, they could not risk disclosing another massive, guaranteed $18 million retirement payout, especially to the highest paid cruise executive. To keep investors happy while still pushing Del Rio to retire early, the board allegedly chose to split the true amount—putting $10 million on the public books and leaving $8 million as a secret verbal promise.

In order to succeed with his lawsuit, Del Rio will have to convince a jury that he and the four directors who he is suing, were part of a scheme not to reveal that they agreed to pay him $18,000,000 over a four and one-half year period and that Del Rio was tricked by the directors’ lies. This stretches credulity and defies reason. Del Rio is an experienced, savvy businessman and by far the highest paid cruise executive in the history of the world. Including his compensation in 2015 of nearly $31,000,000, he had earnings of over $175,000,000, including $22,590,000 in 2018, $17,808,000 in 2019, $36,400,000 in 2020, $22,600,000 in 2021, and $21,200,000 in 2022. Del Rio would have to prove that he reasonably relied on the lies told by the four directors that they would pay him for several additional years for services (that he never provided) when the actual written terms of the agreement which he signed say the payments would end years earlier.

The “False Proxy” Allegation:

In the lawsuit, Del Rio contends that NCLH filed a mandatory proxy statement with the Securities and Exchange Commission (SEC) telling shareholders he was being paid as a “valuable resource” for things like industry lobbying and shipbuilding. Del Rio argues that because the company never actually sought his advice once he retired, the directors effectively provided shareholders with an SEC proxy that was “false, deceptive, and misleading”—a direct violation of federal securities disclosure laws

Probable Defenses to the Lawsuit: Parole Evidence, In Pari Delicto, and Unclean Hands:

Parole Evidence:

But first, Del Rio will have to survive a motion to dismiss which will be filed by his former employer and the former directors. They will undoubtedly argue that the “parole evidence rule” prohibits the trier of fact from considering oral testimony outside the four corners of the agreement. Although Del Rio has alleged fraud and civil conspiracy, which are exceptions to the parole evidence rule, the judge will be presented with the argument that Del Rio is a highly experienced corporate leader flanked by high-priced legal counsel. Florida courts routinely rule that if a party signs a contract that clearly and explicitly contradicts a prior oral promise (i.e., signing an agreement for $10 million instead of $18 million), the party has a legal duty to reasonably rely on the oral representations and reasonably inquire. A sophisticated executive cannot blindly claim he “trusted a lie” when the paperwork explicitly states otherwise; doing so is considered an unreasonable or bad-faith blindness to reality.

In Pari Delicto:

NCLH can raise the equitable defense of in pari delicto (“in equal fault”). The premise of this defense is that a court will not grant relief to a plaintiff who basis his claim on his own participation in an improper, deceptive and possibly criminal scheme. NCLH can argue that if the board was lying to shareholders, Del Rio willingly agreed to go along with the deception by signing a public contract he knew was incomplete. Because he allegedly participated in a bad-faith plan to mislead investors, he cannot now ask a court of equity to enforce the “secret” part of that wrongful scheme.

Unclean Hands:

Because Del Rio is seeking damages arising from an alleged civil conspiracy, NCLH can invoke the “unclean hands” doctrine. This equitable defense bars relief to a plaintiff who has acted unethically or in bad faith. NCLH will argue that Del Rio is acting with unclean hands by attempting to enforce an unwritten corporate payout that he admits was intentionally concealed from the company’s shareholders.

Frank Del Rio’s SEC Liability Exposure:

Ironically, by filing this lawsuit to claim his unpaid $8 million, Del Rio may have inadvertently exposed himself to SEC scrutiny and liability.

• The Integration & Certification Trap: As the sitting President and CEO when these early retirement and initial consulting terms were negotiated in late 2022, Del Rio was legally responsible for the accuracy of corporate disclosures.
• Co-Conspirator or Participant Scrutiny: Del Rio’s complaint admits that he knew the written contract was altered to 2.5 years and $10 million specifically so the company could hide the true $18 million footprint from shareholders. In the eyes of federal regulators, agreeing to sign a truncated public contract while relying on a secret “under-the-table” oral agreement can be interpreted as participating in or facilitating a scheme to mislead investors.
• Clawback Risks: If the SEC determines that NCLH’s executive compensation disclosures were fraudulent during his final months, it could trigger clawback mechanisms on the massive executive payouts Del Rio received during his tenure.

Why Isn’t the SEC investigating Del Rio?

Because Del Rio’s lawsuit documents a coordinated effort to keep an executive payout off the books to manipulate shareholder votes, the SEC has full authority to open an independent investigation. If they do, the directors may face potential liability for constructing a false narrative, but Del Rio faces equal if not greater liability for knowingly signing off on a public disclosure that did not reflect the true scope of his financial arrangement.

Conclusion

Del Rio’s latest money-grab is best understood considering that he is by far the highest paid CEO of a cruise company in the history of the cruise industry after collecting over $175,000.000 from January 1, 2015 to June 30, 2023. Del Rio is perhaps best known for the exorbitant income he received in 2020 of $36, 380,000 (closely followed by the $31,000,000 he collected in 2015). In 2020, NCLH lost $4 billion and employee salaries of crew members and shoreside employees were cut by 20% as the cruise company struggled to handle COVID-19-related shutdowns. Not surprisingly, with Del Rio at the helm, NCLH had one of the highest CEO-median crew member ratio typically of over 1,000 to 1.

During Del Rios’ tenure as CEO from January 1, 2015 to June 30, 2023, NCLH’s stock dropped 58.71% from $45.60 when he started to $18.83 when he retired.

However the case goes, at the end of the day, the $8,000,000 “underpayment” Del Rio is claiming is less than 5% of his total income as the CEO from 2015 to June 30, 2023. Is it really worth the risk of a SEC investigation by coming up with a legal theory that he secretly agreed to additional compensation and conspired with the directors to kept the shareholders in the dark in the hopes of collecting another $8,000,000?

We will be following this freak show of a lawsuit closely over the next several months.

Have a comment or question? Please leave one below or join the discussion on our Facebook page.

Image credit: CNBC (screen grab) via Shareholders to CEO Del Rio: Thumbs Down to $36,400,000 Compensation

AI is starved for authority, whether it be in regard to an LLM or a legal research platform or an AI powered legal tech solution. AI is only going to be as good as the data it is trained on. Just look at all the hallucinations lawyers receive from AI running on less than authoritative data.

For the last fifteen plus years most publishing lawyers and law firms have chased SEO, rankings and analytics.

That’s changing, with authority being sought over search rankings. One way to achieve authority being a library.

Rafael Ball, Director of the ETH Library in Zurich, writes that “today the library is indispensable as a bridge builder” in scholarly communication. He further writes that now more than ever the library serves as a “neutral authority.”

A library does not make a lawyer the authority, nor does it endorse what a lawyer publishes.

What it does do is verify authorship, preserve the work, organize it, make it discoverable, maintain it as part of the scholarly record, and provide a stable framework for citation.

In a world where AI is hungry for authoritative sources, those things matter.

Who would have thought three or four years ago that a library could play such a role in helping lawyers build authority? A lot has changed in a few years.

As AI changes how legal information is discovered, researched, and relied upon, being included in a trusted legal library may prove more valuable than a high search ranking ever was.

not addressing AI directly, writes “Today the library is indispensable as a bridge builder for the further development of scholarly communication in innovative formats and for the support of specific technologies and formats of scholarly communication.”

Ball further writes that now more than ever a library is a neutral authority

A library, in essence, performs the below for any published work or publisher:

• Verifies authorship,
• Preserves the work,
• Organizes it,
• Makes it discoverable,
• Maintains it as part of the scholarly record,
• And provides a stable citation framework.  

Who knew three or four years ago that law libraries would carry this wait for lawyers looking to build a name. But a late has changed in a few years.

The CFPB has now issued guidance on the consideration of immigration status in connection with the Regulation Z ability to repay requirements for credit cards and mortgage loans. Unfortunately, the guidance falls short of providing guideposts and will likely prove to be more problematic than helpful.

Regulation Z credit card provisions include the requirement that a “card issuer must not open a credit card account for a consumer under an open-end (not home-secured) consumer credit plan, or increase any credit limit applicable to such account, unless the card issuer considers the consumer’s ability to make the required minimum periodic payments under the terms of the account based on the consumer’s income or assets and the consumer’s current obligations.” Similarly, Regulation Z residential mortgage loan provisions include the general requirement that a “creditor shall not make a loan that is a covered transaction unless the creditor makes a reasonable and good faith determination at or before consummation that the consumer will have a reasonable ability to repay the loan according to its terms.” One element of the determination required for credit cards and mortgages is that the creditor must consider the consumer’s current or reasonably expected income or assets. The qualified mortgage provisions of the ability to repay requirements also require that a creditor consider the consumer’s current or reasonably expected income or assets.

The guidance notes the credit card and general residential mortgage ability to repay and income consideration requirements, as well as the Regulation B authority for creditors to consider an applicant’s immigration status. The CFPB then advises that it is issuing the “guidance to remind creditors that, when determining repayment ability, creditors relying on an individual’s income derived from U.S.-based employment are permitted—and may, under certain facts and circumstances, be obligated—to consider information that bears on the consumer’s underlying and continuing ability to earn income—when residency in the United States is a necessary component of such employment. Where a change ‘cannot be reasonably anticipated’ from the application and relevant records, the change need not be considered.” The CFPB then states that the “obligation arises if documentation in the consumer’s application or other records indicates that the consumer’s repayment ability will change on account of their immigration status.”

The guidance moves on to address situations in which an applicant is not lawfully within the United States:

“[A] creditor’s awareness of a consumer’s immigration status may implicate a creditor’s reasonable expectations about whether a consumer’s income from U.S.-based employment will remain available for repayment. For example, a creditor may regard a credit applicant who is neither lawfully present nor permitted to work in the United States as being subject to removal, in light of the Administration’s stated policy of removing any person unlawfully present in the United States. Indications that an individual may not be lawfully present, and therefore may be at risk of removal, may come from various sources, including direct inquiry or the consumer’s reliance on atypical identification methods, such as an Individual Taxpayer Identification Number (ITIN), typically issued to taxpayers to individuals who lack proof of legal residency.

To the extent a creditor’s information regarding the borrower’s immigration status indicates that the borrower may be an unlawfully present individual and removed from the United States, there is a danger that removal would render any such borrower unable to earn income derived from employment that requires physical presence in the United States. Accordingly, considering whether information regarding an applicant’s immigration status indicates a reasonably expected change in future income is a matter of sound compliance practice. The Bureau expects compliance with the law and failure to account for such a reasonably expected change in income may not comply with a creditor’s obligation to reasonably assess a borrower’s ability to repay the loan or line of credit sought.” (Footnote omitted.)

Unfortunately, the guidance then punts on providing specific guideposts for lenders:

“Of course, there are a wide variety of lawful immigration statuses in the United States. Assessing how each status might bear on a lender’s reasonable expectation that a consumer has the ability to repay an obligation with U.S.-based employment income is varied, and it cannot be assumed that consumers with different lawful statuses have identical abilities to repay. Accordingly, the Bureau cannot, and does not, provide a comprehensive analysis of variations in immigration status and the consequent reasonable expectations as to a consumer’s ability to repay a loan through expected income from U.S.-based employment. Rather, the Bureau reminds creditors when future changes in borrower income must be considered under Regulation Z. Regulation Z enables lenders to make these judgments by affirming their ability to lawfully consider the consumer’s immigration status, lawful presence, authorization to work, and other factors that may indicate risk of removal insofar as it bears on their current or reasonably expected income from U.S.-based employment.” (Footnote omitted.)

When the CFPB withdrew 67 guidance documents in May 2025, it stated that “it is the Bureau’s current policy to avoid issuing guidance except where necessary and where compliance burdens would be reduced rather than increased.” The immigration status guidance represents a departure from this policy. The guidance warns creditors of the risk of not complying with ability to repay requirements by not considering immigration status, particularly the status of an applicant not lawfully within the country, but fails to provide detail on situations in which a creditor would need to decline an application because of immigration status. The guidance, thus, increases the compliance burden of creditors. In particular, it appears that creditors may need to become experts in immigration law or engage counsel with such expertise.

The agencies took this action to complement their earlier actions to end the use of reputational risk in supervision.

“As the agencies have previously noted, reputation risk can be misused by supervisors as a basis to encourage or pressure a bank to restrict individuals’ and legal businesses’ access to financial services due to their constitutionally protected political or religious beliefs, speech, or conduct or lawful business activities,” the agencies said, in a joint statement. “These updates help ensure supervisory decisions are based on material financial risks, as well as increase clarity and facilitate greater precision in supervisory decision making. The updates to interagency documents are limited to removing references to reputation risk.”

The agencies said they continue to review their supervisory materials and may update additional documents as appropriate.

In response to President Trump’s August 7 Executive Order, “Guaranteeing Fair Banking for All Americans,” the FDIC and the OCC have approved the joint publication of a Notice of Proposed Rulemaking that would codify the removal of reputational risk from their supervisory programs. The NCUA has taken a similar action, and the Federal Reserve Board announced the elimination of reputational risk as a component of examination programs in its supervision of banks.

Yotta, a fintech company that offered savings products with prize-linked incentives for consumers to open accounts with them, moved consumers’ accounts from FDIC insured Evolve Bank & Trust to Synapse Brokerage LLC (Synapse Brokerage), a subsidiary of Synapse Financial Technologies (Synapse). Six months after receiving the Yotta accounts, Synapse filed for Chapter 11 bankruptcy in April 2024, leaving thousands of California consumers unable to access funds. In August 2025, the Consumer Financial Protection Bureau (CFPB) filed a complaint against Synapse and, in its September 2025 stipulated final order, established a Civil Penalty Fund for consumer redress.

In its consent order, the DFPI alleges that Yotta misled consumers by representing accounts as “FDIC insured” and marketing that consumers’ money “is always 100% safe and secure,” even after transferring funds to a brokerage structure that did not provide such protection.

“Yotta blatantly deceived thousands of California customers regarding the risk to their accounts,” DFPI Commissioner KC Mohseni said in the department’s press release. “It enticed customers to use its financial products and services under false pretenses, ultimately resulting in millions of dollars in lost funds. California will not tolerate these kinds of fraudulent practices and will hold those who flout our laws accountable.”

Consent Order

Under the DFPI’s consent order, Yotta must:

• Pay a $1 million civil penalty over 24 months. Failure to make the agreed-upon payments would result in the DPFI imposing the full penalty amount of $48 million on Yotta.
• Cease deceptive representations, including claims that cash deposits are protected “against all risks.”
• Provide notice to affected California customers with positive balances in their Yotta accounts as of May 17, 2024, with information about their accounts and how to obtain relief from the CFPB’s $46 million Civil Penalty Fund for consumers harmed by the Synapse bankruptcy.
• Designate a consumer contact for at least 120 days to address inquiries.

Takeaways

The Yotta consent order underscores growing regulatory focus on fintech-bank partnerships, “banking-as-a-service” (BaaS) models, and false representations about deposit insurance coverage, particularly where funds move through intermediaries. Additionally, California Gov. Gavin Newsom’s recent appointment of Rohit Chopra, former director of the CFPB, may position California to lead state regulatory enforcement efforts, with the goal of “modernizing California’s consumer protection framework amid growing threats from weakened federal enforcement.”

Fintech companies should consider verifying that their marketing representations are substantiated by reliable facts, especially as to deposit insurance coverage to consumers. Fintech companies and partner banks should also consider implementing controls around partner risk, such as due diligence and escalation processes, and mapping the full custody chain of customer funds to identify points where insurance coverage may not apply.

The NEP marks a significant shift in the agency’s enforcement priorities from those identified in the SEP.  Most notably, the NEP prioritizes intentional discrimination, identifies certain diversity, equity, and inclusion (“DEI”)-related practices as potential sources of unlawful race or sex discrimination, limits the agency’s use of disparate-impact theories (consistent with Executive Order 14281 (“Restoring Equality of Opportunity and Meritocracy”), which directed federal agencies to eliminate the use of disparate impact liability theories in investigations “to the maximum degree possible,”), and identifies recent Supreme Court precedent—including Ames v. Ohio Department of Youth Services, Muldrow v. City of St. Louis, Students for Fair Admissions, United Steelworkers v. Weber, Johnson v. Santa Clara County Transportation Agency, Groff v. DeJoy, and Bostock v. Clayton County—as a focus for future enforcement and litigation. By contrast, the SEP had broadly prioritized eliminating recruitment and hiring barriers, protecting vulnerable and underserved workers (such as immigrant and migrant workers, workers with mental-health-related disabilities, and LGBTQI+ individuals, among others), advancing equal pay, and responding to discrimination, bias, or hate arising from local, national, or global events.

Consistent with the EEOC’s previously issued “technical assistance” documents titled “What You Should Know About DEI-Related Discrimination at Work” and “What To Do If You Experience Discrimination Related to DEI at Work” (previously discussed here), the NEP identifies certain policies, programs, or practices “labeled or framed as ‘diversity, equity, and inclusion’” as potential sources of intentional discrimination.  These include:

• Race- or sex-based quotas, including practices labeled as “aspirational goals” that function as proxies for quotas or encourage race- or sex-based decision-making in interviewing, hiring, staffing a particular project/client teams, layoffs, promotions, or other employment actions;
• Limiting access to training, internships, fellowships, mentorship, sponsorship, apprenticeship programs, employer-sponsored groups or events, bonuses, fringe benefits, perks, or other terms and conditions of employment based on race or sex;
• Diverse slate policies, diverse hiring panel policies, diversity statements, or candidate evaluation rubrics that consider protected characteristics;
• Sharing employee race or sex data with managers or other non-HR personnel; and
• Compensation or bonuses tied to demographic goals or other diversity goals.

The NEP also identifies as enforcement priorities:

• Job advertisements that exclude, discourage, or encourage applicants based on protected characteristics (including race, sex, and national origin);
• Staffing or fellowship programs that exclude individuals from employment because of protected characteristics; and
• Religious accommodation, religious liberty, and constitutional and statutory limitations on liability for religious organizations and religious employers.

In light of these announced EEOC enforcement priorities, employers should ensure they are continuing best practices to mitigate risk and ensure compliance. If you have questions about programs and practices that may be implicated by the EEOC’s new technical assistance, please contact members of Covington’s employment practice group.

This week’s blog entry is a bit different than our usual one, where I deconstruct a case and offer thoughts/takeaways, as it doesn’t pertain to a case at all. The saying goes the law abhors a vacuum. That is exactly what we have after the internal memorandum from HUD saying that emotional support animals in housing are no longer a thing. So, I thought it would make some sense if I could try to fill that vacuum with some ideas for how a landlord might proceed going forward in the absence of rulemaking. As usual, the blog entry is divided into categories, and they are: the Illinois Assistance Animal Integrity Act approach; what the DOJ approach might look like; what the EEOC approach might look like; and thoughts/takeaways. Of course, the reader is free to read any or all of the categories.

I

The Illinois Assistance Animal Integrity Act Approach

As of January 1, 2020, Illinois has had on its books the Assistance Animal Integrity Act, which we discussed here. That law in many ways codified HUD guidances that existed at the time on service animals and emotional support animals. It is possible that other states have enacted similar laws, though I haven’t looked into it as of yet. With regards to an approach for dealing with ESAs/SAs, an approach based upon the Illinois Assistance Animal Integrity Act might look like the following.

1. The Illinois law applies to emotional support animal or a service animal qualifying as a reasonable accommodation under the FHA for the Illinois Human Rights Act. The issue here is that it is really debatable as to whether an ESA qualifies under the FHA. Certainly HUD no longer believes so. The very first case I found dealing with an ESA in housing was a Southern District of Ohio case, Overlook Mutual Holdings, Inc. v. Spencer, decided July 16, 2009, here, holding that ESAs were allowed in the housing if they were necessary for the person to enjoy the housing. However, that decision relied heavily on the HUD regulation for public housing, which is quite a bit different than the HUD regulation for private housing. Other cases allowing ESAs in housing either relied on Overlook or followed the HUD guidances. I would need to do further research to find out how the Illinois Human Rights Act deals with emotional support animals, if it deals with that issue at all.
2. A housing provider may require a person to produce reliable documentation of the disability and the disability related need for the animal only if the disability or disability related need is not readily apparent or known to the housing provider.
3. Housing providers may ask a person to make the request on a standardized form, but cannot deny the request if the person did not use the form to submit documentation that otherwise meets requirements of the Illinois Assistance Animal Integrity Act.
4. If a housing provider receives a request for more than one assistance animal, it may request documentation establishing the disability related need for each animal unless the need for the animal is apparent.
5. Any documentation that a person has a disability requiring the use of an assistance animal as a reasonable accommodation in housing must be: 1) in writing; 2) be made by a person with whom the person requesting the accommodation has a therapeutic relationship; and 3) describe the individual’s disability related need for the assistance animal.
6. The request can be denied if any of the following exists: 1) an undue financial and administrative burden; 2) a fundamental alteration to the nature of the operations of the housing provider; 3) after conducting an individualized assessment, reliable objective evidence exists that the assistance animal either: A) poses a direct threat to the health or safety of others that cannot be reduced or eliminated by another reasonable accommodation; B) causes substantial physical damage to the property of others that cannot be reduced or eliminated by another reasonable accommodation; or C) has engaged in a pattern of uncontrolled behavior that if the handler has not taken effective action to correct.
7. If the initial documentation provided by the person requesting accommodations does not satisfy ¶ 5 above, the housing provider may require additional supporting documentation. Also, if the initial documentation is not sufficient to show the existence of the therapeutic relationship, the housing provider may request additional information describing the professional relationship between the person and the individual with the disability.
8. A housing provider cannot deny an assistance animal solely due to the disability related needs of another resident. Instead, it has to attempt to balance the disability related needs of all residents.
9. The housing provider cannot require documentation of a specific diagnosis regarding the disability or disability related need.

II

What The DOJ Approach Might Look like

The internal memorandum talks about how future rulemaking will “harmonize,” with the DOJ approach to service animals. What that means is anybody’s guess. I thought I would take a shot at it. As I read it, there are two options. First, the DOJ approach. Second, adopting the EEOC approach to reasonable accommodations (EEOC has no regulation dealing with animals in the workplace).

Here is what the DOJ approach might look like where the tenant requests the accommodation of an emotional support animal or a service animal:

1. Where the tenant requests the accommodation of an emotional support animal, one approach might be to say automatically no to that request because HUD (consistent, in my opinion, with a reading of the law after the pulling of the guidances and Loper Bright), has said that ESAs are no longer a thing in housing. However, that approach is risky because case law exists saying that the FHA requires an interactive process.
2. If it is not readily apparent that the animal is a service animal, go ahead and make the two inquiries permitted by the DOJ final implementing regulations. Those inquiries are: 1) is the animal required because of a disability; 2) what work or task has the animal been trained to perform. The work or task must relate to a disability. Narrowly focused follow-up questions pertaining to the two inquiries are permitted if the information is not sufficient. You can’t make these two inquiries if it is readily apparent what the animal does for the person with a disability.

III

What the EEOC Approach Might Look like

Adopting the Title I approach to reasonable accommodations in general can be justified because the FHA has a necessity requirement. So, the approach might look like the following:

1. Where the connection between the service animal and the person with a disability is not obvious, you can seek narrowly focused documentation to establish that connection. Fishing expeditions you want to stay away from. Documentation you might seek includes but is not limited to: 1) establishing the bona fides of the healthcare provider supporting the recommendation; 2) establishing the relationship between the provider making the recommendation and the tenant; and 3) you might also consider the provisions of the Illinois Assistance Animal Integrity Act, above, for other documentation you might request regardless of whether you are in Illinois.
2. Keep in mind, it may be very difficult in some states to get a letter supporting a request for a service animal. See this blog entry.
3. The landlord is not entitled to know the disability itself but rather that it disability exists and how the animal helps the person deal with that disability(s).
4. Helpful to define service animal the same way as in the DOJ final Title II and Title III regulations.
5. Unreasonable delay in granting an accommodation is actionable. See this blog entry.

IV

Thoughts/Takeaways

1. I am not a big fan of guidances in general. Most of the time, I believe lawyers use guidances as a crutch. However, here we have a complete vacuum. Hopefully, this blog entry gives some ideas on how that vacuum might be solved until we have some rule-making.
2. This vacuum may go on for quite a while as rulemaking can take quite a bit of time. Also, this administration has only two more years left on it, and who knows what the next administration might look like.
3. I have absolutely no idea what “harmonizing with DOJ final regulations on service animals,” actually means. It would seem to me that the DOJ approach doesn’t really work for housing due to the nature of housing. Also, in the FHA world we are talking about whether it is necessary to enjoy the benefits of housing. So, it seems more likely that any rulemaking will resemble the EEOC general approach to reasonable accommodations.
4. One thing we do know is that in housing service animals can be more than a dog. Such a read is consistent with the HUD final regulation on service animals, which lists a guide dog as but one example of what a service animal can be.
5. The vacuum is real. Landlords are going to want to get with their legal counsel to discuss the various options and what might be the risks of going one way or the other. They also want to discuss just how aggressive their client should be when it comes to seeking out the information to decide whether the animal is necessary for the person with a disability to enjoy their housing. Of course, the more aggressive a housing provider is, the more likely a person with a disability is to push back, assuming they either have the economic resources to do so or can find an attorney to take on their case irrespective of those resources.
6. Don’t forget about state law. State law (such as Illinois), in the area may be few but they can be highly relevant as discussed above.
7. It does seem to be an incredibly risky proposition for a couple of reasons to reflectively deny a request for an emotional support animal in housing even though that may no longer be a thing. First, you still have case law out there, even though I think it can be distinguished in light of recent developments, saying an emotional support animal is permitted under the FHA if it can be shown to be necessary for enjoying the housing. Second, case law does exist saying the FHA requires an interactive process.
8. If the animal is acting as a service animal (trained to engage in recognition and response related to the person’s disability regardless of whether it is a dog or not), that person with the disability will have a much higher chance of getting that request approved than if it is an emotional support animal.
9. It is a very fine line between emotional support animal and a psychiatric service animal. Expect a huge explosion of psychiatric service animal claims.
10. For how might emotional support animal advocates these developments, an excellent piece was put out by the Disability Rights Education and Defense fund, here, and that certainly bears reading.

What Is Changing

The Electronic Wills Act allows a will to be signed digitally, rather than on paper, and permits the testator, witnesses, and notary public to participate remotely through a digital platform.[2] Key features include:

• Remote witnessing. At least two witnesses located anywhere in the United States may observe and sign the will electronically without being in the same room (or even the same state) as the testator.[3]
• Electronic signatures. The testator (or a person signing on the testator’s behalf in the testator’s physical presence) may sign by adopting or affixing an electronic symbol or process.
• Mandatory court filing. An electronic will must be filed with the New York State Unified Court System within thirty days of execution; if it is not timely filed, the will is invalid.
• Self-proving option. As with traditional paper wills, an electronic will may be made self-proving (which can reduce the need to locate witnesses during probate) through testator acknowledgment and witness affidavits in the physical or electronic presence of a notary public.

Why a “Wait and See” Posture Is Appropriate

Although the Electronic Wills Act is intended to make the execution of wills more accessible, a number of open questions remain. Various bar association committees and other professional organizations have raised concerns, including, but not limited to, identity verification, the precise triggering of the thirty-day filing deadline, and how courts will handle allegations of incapacity, due execution, fraud and/or undue influence in an electronic environment.[4] Because Electronic Wills Act is new and untested, electronic wills initially executed and probated may face closer judicial scrutiny, and ambiguities within the law are likely to be resolved through court decisions over time. Importantly, the law also does not address the electronic execution of other estate planning documents, including trusts, powers of attorney, and advance directives for health care.

For most clients, a traditionally executed paper will is expected to remain the more prudent approach in the early years after the law takes effect.

Looking Ahead

We are monitoring developments as the December 2027 effective date approaches and will provide updated guidance as chapter amendments, filing procedures, and best practices take shape. In the meantime, there is no need to revisit existing estate plans solely because of this legislation. We are happy to discuss whether the new law may be relevant to your planning in due course.

[1] See NY State Assembly Bill 2025-A7856A and NY State Senate Bill 2025-S7416A.

[2] See EPTL § 3-6.2(d).

[3] See EPTL § 3-6.6.

[4] See Report on the Proposed Electronic Wills Act in NY | New York City Bar Association.

RESOURCES

• New York Authorizes Electronic Wills: A Wait-and-See Approach
• Probate Litigation Alert: Can a Cell Phone Video Serve as a Valid Will?
• Estate Planning for College-Aged Children
• Ep. 54 – Probate Disputes: Discussing Capacity, Influence, and Fraud with Mike Kenny
• Five Reasons Why You Should Do Your Estate Plan
• 10 Reasons to Update Your Estate Plan

Since Chambers first established these nationwide consumer finance rankings, our Consumer Financial Services Group has been ranked in each category every year. No other law firm in the country has achieved this distinction.

What Chambers Says About Our Group

Chambers described the Group as follows:

“Ballard Spahr LLP is an esteemed group noted for its work with banks and non-banks on the full spread of consumer finance regulatory matters, including credit card, mortgage and auto finance issues. Harbors expertise pertaining to FinTech areas such as telemarketing, e-commerce and prepaid cards. Provides robust representation in CFPB enforcement actions, arbitrations and litigation. Capable of supporting clients at both state and federal regulatory levels.”

What Our Clients Say About Our Group

Chambers also reported the following comments from our clients:

“Ballard handled complex business and legal issues very well.”

“They have talented partners all over the country.”

“They assess the risks and relative costs of litigation well, as well as potential resolutions and exit strategies.”

“They have done a great job of getting into the weeds of our business practices and giving us actionable advice to mitigate risk.”

“The team is capable of handling matters with massive potential liability and getting outstanding results for their clients.”

Lawyers Ranked by Chambers USA in 2026

The following six lawyers in our Consumer Financial Services Group were individually ranked this year (listed alphabetically):

Richard J. Andreano, Jr., Practice Group Leader of the Mortgage Banking Group

• Financial Services Regulation: Consumer Finance – Compliance (Nationwide)
• Financial Services Regulation: Consumer Finance – Enforcement & Investigations (Nationwide)

Thomas Burke

• Financial Services Regulation: Consumer Finance – Litigation (Nationwide)

John L. Culhane, Jr.

• Financial Services Regulation: Consumer Finance – Compliance (Nationwide)
• Financial Services Regulation: Consumer Finance – Enforcement & Investigations (Nationwide)
• Banking & Finance: Mainly Regulatory (Pennsylvania)

Alan S. Kaplinsky, Founder and former Practice Group Leader of the Consumer Financial Services Group and host of the Group’s weekly podcast, Consumer Finance Monitor

• Financial Services Regulation: Consumer Finance – Compliance (Nationwide)
• Financial Services Regulation: Consumer Finance – Enforcement & Investigations (Nationwide)
• Banking & Finance: Mainly Regulatory (Pennsylvania)

Daniel JT McKenna, Co-Practice Group Leader of the Consumer Financial Services Group

• Financial Services Regulation: Consumer Finance – Litigation (Nationwide)

John D. Socknat, Co-Practice Group Leader of the Consumer Financial Services Group

• Financial Services Regulation: Consumer Finance – Compliance (Nationwide)

We are extremely proud of the work our lawyers do on behalf of clients across the consumer financial services industry. We are also deeply grateful to our clients for placing their trust in us to help them develop innovative products and services, defend them in private litigation and government enforcement matters, and navigate the increasingly complex landscape of federal and state consumer financial services laws and regulations.

Nathan Harvey was a legal assistant attending law school when attorney Britt Wiseman arranged for Harvey to serve as the administrator of an estate. Shortly after opening a bank account for the estate, Harvey immediately began stealing from it. Wiseman later discovered the theft and reported Harvey’s actions to disciplinary authorities.

Writing for the Supreme Court majority, Chief Justice Sharon L. Kennedy stated that Harvey’s case is a first for Ohio, “and a disturbing case of first impression it is: a law student who put into action a theft scheme to misappropriate client funds for two years and eight months and did not get caught until” after he was certified as a legal intern and admitted to practice law.

Administrator Steals From Estate Account
Wiseman said he hired Harvey as an investigator after knowing him for about 12 years. Harvey was a deputy sheriff from 2005 to 2015, then worked as an auxiliary deputy in the office’s training program. For 10 years before joining Wiseman, Harvey also worked as an instructor at the Buckeye Hills Career Center, a joint vocational school serving Gallia, Jackson, and Vinton counties. He began studying law at Syracuse University College of Law in 2019.

In March 2020, Jason Sheppard Jr. died, and Sheppard’s neighbor was his emergency guardian. The neighbor asked Wiseman to handle Sheppard’s estate.

Harvey signed a fiduciary acceptance document, committing to keeping all estate funds in a separate account and obtaining court approval before making any personal purchases or attorney fee payments. The estate received probate court approval in July 2020, with Harvey acting as the estate administrator and Wiseman as the estate attorney.

Harvey opened a checking account for the Sheppard estate in August 2020 and began depositing funds. Five days after depositing $230,022 into the estate account, Harvey immediately began stealing by using the estate funds to auto pay his personal utility bills.

As part of the process to become an attorney, Harvey completed a National Conference of Bar Examiners application, which asked questions about whether he breached any fiduciary obligations or violated workplace conduct rules. He did not disclose that he stole from the estate.

Theft From Account Escalates
In March 2021 he began writing checks from the estate account to himself. In the memo fields, he wrote “atty fee,” “executor fee,” or “fiduciary fee,” but none of the fees were earned for work on the estate nor approved by the probate court.

While serving as a legal assistant at the Wiseman firm, Harvey registered with the Supreme Court to work as a legal intern for Wiseman. Registration requires an intern to be bound by the same rules governing the professional conduct of Ohio attorneys. Shortly after being approved as an intern, he responded to another questionnaire as part of the process to take the bar exam. The form asked if he breached a fiduciary obligation or violated a workplace conduct rule in the past five years. He answered “No.”

Harvey continued writing checks to himself after graduating from law school and passing the bar in July 2022. In April 2023, he accepted a job as an assistant prosecutor for the city of Delaware. In preparation for Harvey’s departure, Wiseman reviewed the Sheppard estate and emailed Harvey about the 2023 checks. Wiseman wrote that he assumed the checks “were made in error,” and told Harvey the funds had to be returned immediately.

Wiseman fired him that day. The next day, Wiseman could not locate the file for the Sheppard estate and discovered that Harvey had removed the file from the law office and put it in the garage of his home.

When confronted by Wiseman, Harvey admitted to taking the file and stealing from the estate. Wiseman reported Harvey to the Office of Disciplinary Counsel.

A criminal investigation revealed that Harvey had written 32 checks totaling $203,260 from the estate and made 53 autopayments for utilities, leading to more than $225,000 missing from the account.

After conferring with the disciplinary counsel, Harvey gave Wiseman a check for $203,260. The money came from Harvey’s father. He told investigators he assumed the $203,620 covered both the checks and the utility payments. An insurance policy reimbursed the estate for $22,570 for the amount stolen to pay Harvey’s utilities.

Attorney Points to Marriage, Depression as Cause for Theft
Harvey was sentenced to community control in September 2024, and the Court imposed an interim felony suspension. The Court issued an order instructing him on the duties he must undertake as a suspended lawyer, but he did not comply. The Court found him in contempt in December 2024, and he remained in contempt until his disbarment today.

He told the disciplinary hearing panel that his marriage was “rough” and that he feared that asking his wife to spend less money would lead to a breakup. The couple divorced in January 2024. He also told the panel he was diagnosed with major depressive disorder and PTSD. He said the depression started early in life and the PTSD was triggered by several experiences as a deputy.

The disciplinary counsel and Harvey stipulated, and the board agreed, that he violated five rules, including committing an illegal act that reflects on his honesty and trustworthiness and engaging in conduct involving dishonesty, fraud, deceit, or misrepresentation.

Harvey committed 85 individual acts of theft between the utility withdrawals and the checks and received a lenient sentence for a third-degree felony conviction, the opinion stated. When asked about the reason for stealing the money, Harvey attributed it to his marriage and did not prove any link between a mental disorder and his criminal behavior.

In addition to disbarring Harvey, the Court ordered him to pay the costs of the disciplinary proceedings.

2025-0207. Disciplinary Counsel v. Harvey, Slip Opinion No. 2026-Ohio-2047.

For more information see Dan Trevas “Court Disbars Attorney Who Stole $225,000 From Client’s Estate” Court News Ohio, June 4, 2026.

This morning the U.S. Supreme Court without comment denied the City of Marathon, Florida’s cert petition, which asked the Court to review an en banc opinion of the Florida District Court of Appeals which held that the City’s downzoning of Shands Key (above) effected a Lucas taking as a deprivation of economically beneficial uses, notwithstanding that the property might (at least theoretically) be sold to a third party who could “donate” the land to the city in return for some very watered-down transferable development rights on the buyer’s other property.

The Florida Supreme Court declined discretionary review, after which the City filed its cert petition with the U.S. Supreme Court, with this Question Presented:

Whether a taking has occurred under the categorical rule announced by this Court in Lucas v. South Carolina Coastal Council, 505 U.S. 1003 (1992), even though the regulated property retains significant market value for both its transferable development rights and recreational uses.

Cert denied doesn’t mean the Supreme Court is necessarily endorsing the lower court opinion, of course. But it does mean that the City’s path to overturn that opinion is terminated, and the next step is for the case to return to the Monroe County trial court for a determination of the just compensation owed for the regulatory taking. Stay tuned for more on that.

Petition for a Writ of Certiorari, City of Marathon v. Shands, No. 25-___ (U.S. May 1, 2026)

Induced Infringement: A Brief Primer

Understanding what induced infringement is (as opposed to direct infringement) is important to understanding the case.

A party directly infringes a patent by practicing the patented invention — “whoever without authority makes, uses, offers to sell, or sells any patented invention, within the United States or imports into the United States any patented invention during the term of the patent therefor, infringes the patent.” 35 U.S.C. § 271(a). Section 271(b) extends patent liability one step further:

“Whoever actively induces infringement of a patent shall be liable as an infringer[,]” specifically designed to catch defendants who don’t directly infringe themselves but who encourage, instruct, or facilitate direct infringement by others.

What does inducing infringement look like?

• A software vendor whose documentation walks users through steps that, taken together, practice all the steps of a patented process.

• A widget manufacturer who advertises a product’s features by specifically highlighting the functionality covered by a competitor’s patent.

In these situations, the defendant isn’t the one doing the (direct) infringing — a third party (the customer, the user, some downstream actor) is — but it is the defendant who is inducing the ultimate act of infringement.

Induced infringement has a specific intent requirement. The Supreme Court made clear in Global-Tech Appliances, Inc. v. SEB S.A. (2011) that inducement requires not just knowledge of the patent but also the defendant’s knowledge that it was encouraging infringement — i.e., that it had the specific intent to cause infringing acts. (To be clear, the “specific” intent requirement may also be met by showing “willful blindness” — roof that the defendant subjectively believed there was a high probability that the patent existed and that their acts constituted infringement or that the defendant took deliberate actions to avoid learning of the patent’s existence.”)

The question the Court answered in Hikma v. Amarin is what an inducement plaintiff must actually allege to get its inducement claim past a motion to dismiss.

The Case That Raised the Question

While this decision isn’t limited to the inducement of pharmaceutical-related patents, some understanding of the facts of the case are helpful even if your primary interest is outside the pharmaceutical space.

Amarin markets Vascepa®, a medication with two FDA-approved uses. The first, approved in 2012, was treating severe hypertriglyceridemia — dangerously high blood triglyceride levels. Amarin originally patented this use of its medication, but Hikma had these patents invalidated in separate litigation. The second use, approved later (but prior to the Hikma invalidation of the original Vascepa patents), was for reducing the risk of heart attack and stroke in patients with elevated cardiovascular risk, a use covered by a later set of Amarin patents (the ones at issue in the litigation), and that use generated billions of dollars in annual sales of Vascepa for Amarin.

When Hikma sought FDA approval to sell a generic version of Vascepa, it used a mechanism permitted under the Hatch-Waxman Act: It carved the patented cardiovascular indication out of its proposed label, seeking approval only for the older, now-unpatented use of treating severe hypertriglyceridemia. This is called a “skinny label.” The logic is that a manufacturer selling a generic product only for a non-patented purpose shouldn’t be liable for a patent covering a different purpose or method of use.

Hikma’s skinny label was legally compliant. But Amarin sued anyway, arguing that Hikma’s marketing and communications — outside the label itself — amounted to inducing infringement of its cardiovascular method-of-use patents. Hikma’s conduct that was the subject of the inducement complaint (and undisputed)  fell into three categories: (1) Hikma’s label, while not naming the cardiovascular indication, included clinical data from studies involving cardiovascular patients and noted cardiovascular risk factors, which Amarin argued would signal physicians that the drug could be used for cardiovascular purposes; (2) Hikma’s press releases and website describing its product as a “generic version” of Vascepa, a brand whose dominant use was the patented cardiovascular indication; and (3) Hikma cited Vascepa’s total sales figures, including sales driven by the patented cardiovascular use.

The District of Delaware dismissed the complaint for failure to state an induced infringement claim. The Federal Circuit reversed the dismissal, finding it “at least plausible that a physician could read” the totality of Hikma’s statements “as an instruction or encouragement to infringe.”

What the Supreme Court Held

The Supreme Court reversed the Federal Circuit and remanded the case.

Writing for the Court, Justice Ketanji Brown Jackson applied the pleading standard from Bell Atlantic Corp. v. Twombly (2007) and Ashcroft v. Iqbal (2009) and drew a sharp distinction at the core of § 271(b): The question is not whether a plaintiff can construct a reading of the defendant’s statements under which they might be understood by the direct infringer as instructions to infringe. The question is whether the complaint plausibly alleges that the defendant actively encouraged the infringing use — that it affirmatively promoted conduct it knew to be infringing.

In finding error by the Federal Circuit, the Court framed “the central question” as “whether Amarin plausibly alleged that Hikma actively encouraged infringing uses, not merely whether doctors could plausibly read the alleged statements as instructions to infringe.” Amarin argued “that it need not do more than allege . . . a plausible chain of events through which statements made by [Hikma] could lead a healthcare provider . . . to prescribe or dispense Hikma’s drug to reduce a patient’s cardiovascular risk” — an infringing use. The Court acknowledged that this argument “reflects the recent approach of the Federal Circuit, which has increasingly trained its focus on whether the relevant statements could be read by medical providers as instructions to infringe.” However, in the strongest of terms, the Court rejected this reasoning: “We reject that trend today, and hereby emphasize that the key question is whether a defendant actively encouraged infringement through its statements, not merely how others may understand those statements.”

This is a meaningful distinction. The Federal Circuit’s “trend” towards a totality-of-conduct approach had allowed courts to aggregate ambiguous statements, industry context, and downstream market behavior to construct a cumulative picture of inducement. The Supreme Court has now rejected that framework as fundamentally inconsistent with the specific intent required by § 271(b). Because of this decision, it is now seemingly very clear that passive awareness that one’s product may or even will be used in an infringing manner — even widespread, predictable infringing use — is not enough. Instead, what is required is affirmative, active encouragement of the infringing act itself.

The Court’s Broader Framework for § 271(b)

Because the Court chose to ground its analysis in § 271(b) rather than in the Hatch-Waxman Act’s specific provisions, the opinion amounts to a statement about induced infringement law generally. Several aspects of the analysis are significant for all induced infringement cases, not just pharmaceutical ones.

Pleading specificity matters. The Court held that a complaint alleging induced infringement must identify specific conduct by the defendant that affirmatively encourages the infringing use — not merely conduct that is consistent with encouraging infringement among a set of plausible explanations. This raises the bar at the motion-to-dismiss stage meaningfully above where the Federal Circuit would have allowed the allegations of the complaint to succeed.

Context cannot substitute for affirmative content. Amarin had argued that Hikma’s statements, read against the backdrop of Vascepa’s market (dominated by the patented cardiovascular use), were effectively communications about the patented indication even if they didn’t say so explicitly. The Court rejected this argument. The relevant question is what the defendant said and did, not how an industry-sophisticated observer might decode it given surrounding market conditions. Allowing ambient context to supply the missing element of active encouragement would, the Court warned, make induced infringement liability unpredictable and overbroad. However, it bears noting that the Court also rejected Hikma’s argument that active inducement must be “express” — “[a] defendant can achieve active inducement through implicit encouragement … [.] But implicit or explicit, the necessary inducement must be ‘clear’ to the relevant audience and ‘affirmative.’” Statements that have an “obvious alternative explanation” — such as compliance with the law or with standard industry practice — may not rise to the level of active inducement.

The Bottom Line

The Court’s holding in Hikma v. Amarin — that a complaint must plausibly allege affirmative, active encouragement of infringing use, not merely conduct from which encouragement could be inferred in context — at minimum raises the pleading bar for induced infringement cases across the entire patent system. While the case happened to arise from a pharmaceutical dispute over a skinny label, the Court’s analysis is not about pharmaceuticals or FDA labels or the Hatch-Waxman Act. It is about what it means to induce patent infringement, and the answer it gives — you must affirmatively promote the infringing act, not merely sell a product knowing others may infringe with it — is further clarification of the boundaries of indirect infringement claims in IP cases consistent with  the Court’s recent decisions clarifying the boundaries of contributory copyright infringement, discussed here and here.

Hikma Pharmaceuticals USA Inc., et al. v. Amarin Pharma, Inc., et al., No. 24-889. Decided June 4. Opinion by Justice Ketanji Brown Jackson for a unanimous Court.

This post is for informational purposes only and does not constitute legal advice.

Continue reading the full GT Alert.

A Quick Trip Down Memory Lane

You may be asking why this is important. To understand how we got here, we need to take a brief doctrinal road trip. Congress enacted the Motor Carrier Safety Act of 1984 to promote safe operation of commercial vehicles and empowered the Secretary of Transportation to prescribe safety regulations and preempt conflicting state laws. For years, the FMCSA declined to preempt California’s MRB rules, reasoning in 2008 that they were laws of “general applicability” — not regulations “on commercial motor vehicle safety.”

Then, in 2018, the agency changed course and determined that California’s MRB rules were regulations on commercial motor vehicle safety, and preempted them for property-carrying commercial motor vehicle drivers. Three years later, the Ninth Circuit upheld that determination in International Brotherhood of Teamsters, Local 2785 v. Federal Motor Carrier Safety Administration (“IBT”), applying  the “Chevron deference” standard —  a reference to Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., the now-defunct doctrine requiring courts to defer to reasonable agency interpretations of ambiguous statutes —  to conclude the agency’s interpretation was permissible.  

Just three years after IBT, in 2024 the Supreme Court famously overruled Chevron in Loper Bright Enterprises v. Raimondo, holding that courts must exercise independent judgment on questions of statutory meaning rather than deferring to agency readings. So without Chevron, where did the administrative interpretation stand? As the Ninth Circuit confirmed, Chevron is not the only driving force.

What the Court Held

The 2026 opinion, authored by Judge Holly Thomas, is remarkably straightforward. The State raised three arguments, and the court dispatched each one with ease.

• First, California argued that its MRB rules were beyond the FMCSA’s preemption authority because they are laws of general applicability. But the court held this was precluded by IBT, which remains binding authority post-Loper Bright.
• Second, California contended that the FMCSA couldn’t preempt break rules for passenger-carrying drivers because the agency hadn’t promulgated its own mid-shift break requirement for those drivers. The court disagreed: the federal hours-of-service regulations still “dictate how long a driver may remain on duty before a mandatory off-duty period,” sharing the same fatigue-management purpose as California’s rules.
• Third, California challenged the FMCSA’s burden-on-commerce finding as arbitrary and capricious. The court found the record adequately supported the agency’s conclusion that MRB compliance imposed “significant operational burden[s]” and that the “patchwork of requirements” for state break rules across 20-plus states burdened interstate operators.

The Petition was denied. Full stop. But what about Chevron, the doctrinal scaffolding that supported IBT in 2021? The Ninth Circuit did not even cite to Chevron or Loper Bright. Instead, the court reviewed the FMCSA’s determination under the Administrative Procedure Act’s arbitrary-and-capricious standard, which is “highly deferential, presuming the agency action to be valid and affirming the agency action if a reasonable basis exists for its decision.” In other words, the Court did not need Chevron to drive the point home, which is the nail in the coffin for the Chevron deference.

What This Means for Employers

The practical upshot is clear: California’s MRB rules are preempted for drivers of passenger-carrying commercial motor vehicles subject to federal HOS regulations. Many bus companies, charter operators, and other passenger carriers operating in California may be able to rely on the federal framework without navigating California’s more stringent requirements. Before making any changes, of course, employers should consult with experienced counsel to ensure their practices are fully compliant.

Drive safely, everyone!

Continue reading the full GT Alert.

Congressional Pressure: The Comer Investigation

On May 22, 2026, the House Committee on Oversight and Government Reform Chairman James Comer opened an investigation into how users of prediction market platforms potentially use nonpublic information to engage in insider trading.

The Committee requested documents and information from the platforms to better understand how they implement identity verification for domestic and international account holders, enforce geographic restrictions, and detect anomalous trading activity to prevent insider trading across their global platforms.

The Committee’s letters to prediction markets requesting granular disclosures about know-your-customer (KYC) protocols, geo-fencing enforcement, and algorithmic detection capabilities have put every prediction market operator on notice: the era of hands-off oversight is over.

The investigation was not launched in a vacuum. According to a recent New York Times investigation cited in the Committee’s letter, more than 80 Polymarket users placed suspiciously timed bets, including wagers made hours before undisclosed U.S. and Israeli military operations against Iran, raising concerns that users were misusing nonpublic information.

In addition, recent high-profile cases have increased the scrutiny on the use of nonpublic information by users in prediction markets. Gannon Ken Van Dyke, a U.S. Army soldier, was charged for an alleged scheme in which he used sensitive classified information to make wagers on Polymarket related to United States Military action in Venezuela. He allegedly bet approximately $33,034 across 13 trades while in possession of classified nonpublic information about Operation Absolute Resolve, ultimately profiting approximately $409,881. Following his successful trading, Van Dyke allegedly attempted to conceal his identity by sending proceeds to a foreign cryptocurrency vault and asking Polymarket to delete his account under a false pretext.

In another recent case, Michele Spagnuolo, a Google engineer, was charged for allegedly breaking insider trading laws because of several bets he placed through Polymarket. Spagnuolo allegedly used information he had early access to through his work at Google to make bets that saw him accumulate $1.2 million in winnings. According to the government’s allegations, the FBI linked his multiple pseudonymous accounts by tracing one he had opened using an Italian identification card.

The CFTC’s AI Surveillance Toolkit

The CFTC’s enforcement posture has shifted markedly under Chairman Michael Selig. While the agency is increasing staff, it also announced that it will use automated tools that analyze trading patterns and flag potential manipulation. The agency’s arsenal includes proprietary systems and third-party blockchain tracing tools like Chainalysis for digital asset platforms, and market abuse detection software including Nasdaq Smarts for centralized markets.

The scope of this surveillance is deliberately broad. Investigations are not limited to federally regulated exchanges, and the CFTC is surveilling the markets on a global basis. The jurisdictional reach of that effort is similarly expansive: where the CFTC cannot bring a case directly, it refers matters to foreign regulators. Offshore platforms should not assume that U.S. enforcement is a remote concern.

Platform Self-Policing

Prominent prediction markets have recently announced efforts to catch wrongdoing on their platforms. Kalshi recently announced that it has suspended and penalized customers flagged for insider trading. Prediction markets are increasingly deploying AI and third-party analytics tools to flag suspicious activity.

Implications for Market Participants

For prediction market operators, the Comer investigation and CFTC surveillance expansion translate directly into heightened compliance obligations. Platforms should expect pressure to demonstrate robust KYC and anti-money-laundering (AML) frameworks, enforce geographic restrictions with verifiable rigor, and maintain audit-ready records of anomalous trading detection. Offshore structuring will not provide cover: the CFTC has confirmed it is surveilling markets globally, and its coordination with foreign regulators means that an operator’s jurisdictional footprint matters far less than the nationality or location of its users.

For users and traders, the deterrent signal from recent enforcement is direct and intentional. Blockchain’s inherent traceability combined with on-chain attribution tools means that pseudonymous trading affords far less protection than users may assume.

Practical Takeaways

• Prediction market operators may wish to consider reassessing their KYC/AML programs against the categories requested by the Comer letters: identity verification, geographic restrictions, and anomalous trading detection.
• Futures Commission Merchants also may want to reassess their KYC/AML programs as well as supervision of account protocols.
• Crypto and fintech firms that handle event-driven contracts or operate platforms that offer participants access to material nonpublic information may want to evaluate whether current compliance frameworks adequately address commodity law obligations.
• Corporate employers may benefit from revisiting insider trading and acceptable use policies to address prediction markets explicitly.
• Market participants operating in or adjacent to prediction markets may wish to consider retaining counsel proactively. Legislative action on prediction market regulation remains a live possibility.

Written with the assistance of C.J. Pfanstiel and Andrew Nordberg, summer associates in Husch Blackwell’s Kansas City office.

Yotta, a fintech company that offered savings products with prize-linked incentives for consumers to open accounts with them, moved consumers’ accounts from FDIC insured Evolve Bank & Trust to Synapse Brokerage LLC (Synapse Brokerage), a subsidiary of Synapse Financial Technologies (Synapse). Six months after receiving the Yotta accounts, Synapse filed for Chapter 11 bankruptcy in April 2024, leaving thousands of California consumers unable to access funds. In August 2025, the Consumer Financial Protection Bureau (CFPB) filed a complaint against Synapse and, in its September 2025 stipulated final order, established a Civil Penalty Fund for consumer redress.

In its consent order, the DFPI alleges that Yotta misled consumers by representing accounts as “FDIC insured” and marketing that consumers’ money “is always 100% safe and secure,” even after transferring funds to a brokerage structure that did not provide such protection.

“Yotta blatantly deceived thousands of California customers regarding the risk to their accounts,” DFPI Commissioner KC Mohseni said in the department’s press release. “It enticed customers to use its financial products and services under false pretenses, ultimately resulting in millions of dollars in lost funds. California will not tolerate these kinds of fraudulent practices and will hold those who flout our laws accountable.”

Consent Order

Under the DFPI’s consent order, Yotta must:

• Pay a $1 million civil penalty over 24 months. Failure to make the agreed-upon payments would result in the DPFI imposing the full penalty amount of $48 million on Yotta.
• Cease deceptive representations, including claims that cash deposits are protected “against all risks.”
• Provide notice to affected California customers with positive balances in their Yotta accounts as of May 17, 2024, with information about their accounts and how to obtain relief from the CFPB’s $46 million Civil Penalty Fund for consumers harmed by the Synapse bankruptcy.
• Designate a consumer contact for at least 120 days to address inquiries.

Takeaways

The Yotta consent order underscores growing regulatory focus on fintech-bank partnerships, “banking-as-a-service” (BaaS) models, and false representations about deposit insurance coverage, particularly where funds move through intermediaries. Additionally, California Gov. Gavin Newsom’s recent appointment of Rohit Chopra, former director of the CFPB, may position California to lead state regulatory enforcement efforts, with the goal of “modernizing California’s consumer protection framework amid growing threats from weakened federal enforcement.”

Fintech companies should consider verifying that their marketing representations are substantiated by reliable facts, especially as to deposit insurance coverage to consumers. Fintech companies and partner banks should also consider implementing controls around partner risk, such as due diligence and escalation processes, and mapping the full custody chain of customer funds to identify points where insurance coverage may not apply.

D&O Diary readers are likely familiar with the following pattern involving short seller reports: the short seller publishes attention-grabbing revelations about the operations or financial results of a listed company; the company’s shares decline; and a plaintiffs’ securities class action law firm files a securities class action lawsuit, often based solely on the accusations in the short seller’s report.  However, in a lawsuit filed on May 1, 2026, in the Southern District of Florida, Starfighters Space, Inc. (Starfighters) and related entities flipped the script. Starfighters complaint against purported short sellers alleges a coordinated “short-and-distort” campaign involving the publication of a purported research report and its amplification across social media platforms (Starfighters Lawsuit).  

While the Starfighters Lawsuit is framed in terms of defamation, securities fraud, and market manipulation, the case could raise broader issues relevant to D&O risk analysis for companies considering a similar approach. The below discusses the complaint’s allegations in more detail, as well as whether using litigation as a defensive tool against short sellers may, in and of itself, create D&O exposure.

The Starfighters Lawsuit

According to the Starfighters Lawsuit, unidentified defendants orchestrated a deliberate market manipulation scheme designed to profit from a decline in the company’s stock price.  The complaint alleges the defendants took short positions in the company’s stock and then published a report under the pseudonym “Umibōzu Research” containing what the plaintiffs contend were materially false and misleading statements about the company’s business, leadership, and financial condition. The report was disseminated through a dedicated website and further amplified through posts on X, with the alleged goal of inducing investor panic and driving down the company’s share price. The complaint notes that the report itself disclosed a short position, and that the timing and promotion of the content were designed to maximize market impact.  

The alleged impact on Starfighters was immediate and significant. The complaint asserts that the company’s stock price declined by more than 20% in the days following the report’s publication, coinciding with increased short interest and covering activity. The plaintiffs contend that the report included numerous false and defamatory statements concerning corporate governance, operational capabilities, affiliate relationships, and management qualifications.

Starfighters asserts a wide range of claims, including libel, violations of the federal securities laws (including Rule 10b-5 and Regulation M), deceptive trade practices, tortious interference, and civil conspiracy. The complaint also seeks injunctive relief aimed at halting further dissemination of the allegedly false statements and compelling their removal.

Discussion

One of the most notable aspects of this case is the company’s decision to pursue affirmative litigation against anonymous actors. Traditionally, companies targeted by short seller reports have relied on public statements, investor communications, and, in some cases, regulatory engagement to respond.

However, affirmative litigation may present certain advantages. By filing a lawsuit, a company may be able to use discovery tools to identify otherwise anonymous defendants, uncover trading activity, and potentially establish the existence of coordinated conduct. The act of filing suit may also serve as a signal to the market that the company disputes the allegations and is willing to defend its reputation aggressively.

At the same time, companies pursuing affirmative litigation should be mindful of the potential for what is often referred to as the “Streisand Effect,” that is, efforts to suppress, challenge, or discredit a statement can inadvertently amplify attention to it. By filing suit and publicly contesting a short seller’s allegations, a company may draw additional media, investor, and analyst focus to the underlying claims, including audiences that otherwise might not have taken notice. In this way, litigation itself can contribute to the broader dissemination and persistence of the allegations in the public domain, potentially intensifying market reaction and increasing the likelihood of follow-on scrutiny or claims.

An immediate concern for D&O underwriters arising from situations like this is the potential for follow-on securities class action litigation. Highlighting a stock price decline, combined with public allegations of misconduct, may create the type of fact pattern attracts the unwanted attention of plaintiffs’ securities lawyers.

Even where a company vigorously disputes the allegations, the existence of a detailed report and a measurable stock price impact may be sufficient to trigger claims that investors were misled or that material risks were not adequately disclosed. Moreover, the company’s own responses, whether in litigation filings or public disclosures, may be scrutinized for consistency and completeness. Statements made in an effort to rebut allegations could later be recharacterized as misleading if subsequent developments suggest that the issues were more complex than initially presented.

In addition to potential securities claims, an affirmative complaint against short sellers might also give rise to shareholder derivative litigation. Plaintiffs in derivative suits could allege that the company’s board failed to exercise adequate oversight over key areas, including disclosure practices, relationships with advisors or affiliates, and responses to known risks.

Allegations relating to corporate governance, affiliate relationships, and operational practices, could form the basis of derivative claims. And, by engaging directly with these allegations in a public forum the company potentially could elevate them into matters of record, potentially providing a roadmap for future claims. Even if such claims ultimately lack merit, the allegations may lead to D&O expense exposure and potential reputational harm.

Another important consideration is the challenge of managing disclosures in the face of short seller allegations. Companies must strike a careful balance between defending themselves and avoiding statements that could later be challenged. When a company responds to allegations by making definitive statements about its operations, financial condition, or governance practices, those statements may themselves become subject to investor scrutiny.

If later information reveals that some of the company’s claims about the short seller were supported by facts, shareholders may contend that the company’s earlier statements were misleading.

It is important to note that a company’s affirmative claims are unlikely to be covered under traditional D&O policies, which generally respond to claims against insured persons rather than claims initiated by the company. However, the same underlying circumstances may give rise to covered claims, including securities class actions, derivative suits, and regulatory investigations.

In addition, from a D&O coverage perspective, timing of notice to insurers becomes critical. The publication of a short report and a resulting stock price decline may constitute circumstances that should be reported under applicable policies, even before any formal claim is filed. Failure to provide timely notice could complicate coverage for subsequent claims.

As short seller activity increasingly intersects with social media and anonymous publication platforms, companies could face new forms of reputational and financial pressure. Affirmative litigation may offer a means of responding to these challenges, but it is not without its own risks. By bringing disputes into the courtroom, companies may invite additional scrutiny, create opportunities for follow-on litigation, and complicate their D&O exposure.

Seyfarth Synopsis: In a critical development, the EEOC has officially replaced its Strategic Enforcement Plan (SEP) for Fiscal Years 2024–2028 with a new National Enforcement Plan (NEP) for Fiscal Years 2025–2029, signed by Chair Andrea R. Lucas on June 4, 2026.  The transition represents a fundamental shift of the agency’s enforcement philosophy, priority structure, and relationship to the Trump administration. Here is our detailed breakdown of what changed, what survived, what was scrapped, and importantly, what employers need to know and consider now.

I. The Big Picture: A Philosophical Overhaul

The EEOC’s Strategic Enforcement Plan has, for years, served as the agency’s compass.  Commission resources, administrative investigations, and EEOC lawsuits were all measured against the SEP.  The SEP was rooted in a social justice framework, and committed the agency to supporting “lawful and appropriate diversity, equity, inclusion, and accessibility (DEIA) practices.”

The NEP — supported by EEOC Chair Andrea Lucas and fellow Republican Commissioner Brittany Panuccio[1] — adopts a starkly different posture. It opens by “reaffirm[ing] that [the EEOC] is an executive branch agency” and declares that “the Commission will use its discretion in its deployment of its enforcement authority to advance the Administration’s policy objectives and comply with relevant Executive Orders.”  In place of the racial and economic justice framing, the NEP has a clear law-enforcement-first orientation, with explicit alignment to White House policy directives, including Executive Order 14281, Restoring Equality of Opportunity and Meritocracy.

What this means for employers: While the SEP positioned the EEOC as an independent civil rights champion, the NEP positions it as an executive branch law enforcement agency taking its marching orders from the Administration.

II. Structural Changes: Washington Takes the Wheel and Ends Local EEOC Enforcement Priorities

Under the SEP, the agency operated through a combination of national priorities and District Complement Plans — locally tailored enforcement strategies that allowed individual District offices to identify region-specific vulnerable populations and enforcement targets, while still adapting the agency’s SEP.

The NEP abruptly withdrew all District Complement Plans and other local enforcement plans or priorities.  In their place, the NEP emphasizes that the EEOC must “function as a national law enforcement agency,” with the Chair directing “collaboration, coordination, and communication” across all offices.  The NEP contemplates nationwide staffing deployments, including reassigning matters across Districts and deploying headquarters personnel to field operations depending on the nature of a particular matter.

What this means for employers: Multi-state employers should expect more uniform enforcement. The patchwork of District-level priorities that sometimes allowed employers to predict regional enforcement trends is gone. The agency now plans to operate from a single national playbook. This will likely take time, but we expect to observe increased consistency in the coming months.

III. Disparate Impact: A Doctrinal Sea Change

One of the NEP’s most consequential provisions is its outright abandonment of disparate impact theory. The now-defunct SEP (and years of prior enforcement announcements) specifically incorporated the disparate impact framework to pursue facially neutral policies with unequal outcomes.  Indeed, the SEP priorities around barriers in recruitment and hiring, AI in decision-making, and background checks all implicated disparate impact analysis.

Through the NEP, the Commission states that “allegations of intentional discrimination (disparate treatment) by an employer inherently are more egregious forms of discrimination than unintentional disparities between groups of employees which arise from an employer’s neutral policies or practices (disparate impact).”

Citing Executive Order 14281, the NEP commits the EEOC to:

• Prioritize disparate treatment theories of liability;
• Eliminate the use of disparate impact liability theories in investigations “to the maximum degree possible”; and
• Not commence, develop, or continue to pursue litigation advancing disparate impact claims.

What this means for employers: Disparate impact remains a valid statutory theory codified in the Civil Rights Act of 1991, as the NEP itself acknowledges. But the EEOC will no longer be the vehicle through which these claims are advanced at the federal level. Private plaintiffs, state attorneys general, and state civil rights agencies remain free to pursue disparate impact theories, and employers should be on the lookout for such claims.

IV. DEI Squarely in the Crosshairs

The NEP’s specificity on DEI deserves special mention. The EEOC has identified the following practices as potential enforcement targets:

• Race- or sex-based quotas, including “aspirational goals” that function as proxies for quotas or that incentivize race- and sex-based decision-making in hiring, staffing, layoffs, and promotions;
• Diverse slate policies and diverse hiring panel policies;
• Diversity statements required of candidates;
• Sharing employee race or sex data with managers, the public, or non-HR personnel;
• Rubrics or evaluation methods that consider protected characteristics;
• Executive compensation or bonuses tied to demographic goals or diversity metrics; and
• Limiting access to training, internships, fellowships, mentorship, sponsorship, apprenticeships, employer-sponsored groups or events, bonuses, or other terms and conditions of employment on the basis of protected characteristics.

What this means for employers: This is the most detailed roadmap the EEOC has published for DEI-related enforcement. The specificity strongly suggests the agency already has enforcement targets in mind.  In fact, the NEP specifically references DEI programs and practices “often adopted by large corporations, prominent universities, and other elite institutions.”

V. Substantive Changes: A Priority-by-Priority Comparison

Below, we walk through each of the NEP’s six subject-matter priorities and compare them against the SEP’s framework.

Priority 1: Repeated, Overt, and Intentional Discrimination

The first NEP priority is cases involving repeated or overt discrimination or intentional discrimination.  The EEOC provides numerous examples of this, including:

• Job advertisements excluding or encouraging certain individuals to apply, including targeting applicants based on race (including encouraging “diverse candidates” to apply) or national origin (including encouraging “guest worker visa holders” or “PERM applicants” to apply, and practices or preferences for guest worker visa holders or PERM applicants[2]), or other practices or policies labeled or framed as diversity, equity, and inclusion (including quotas or aspirational goals, limiting access to any term, condition, or privilege of employment based on protected characteristic, or otherwise using race and sex in any decision, including diverse slate policies, diverse hiring panel policies, and any other candidate evaluation practices and compensation practices tied to a protected characteristic or diversity goals);
• Staffing agencies that exclude individuals from employment based on protected characteristics;
• Mass denials of accommodations; and
• Systematic harassment.

Of note, while systemic harassment appears alongside other examples of overt discrimination in the NEP, its prominence is dramatically reduced as compared with the previous SEP.  The now-scrapped SEP devoted an entire standalone priority to systemic harassment, backed by detailed statistical data showing over 34% of charges between FY 2018–2022 included a harassment allegation.  By contrast, the NEP’s only direct mention of systemic discrimination is a single line item in an enumerated list.

Key takeaway: The SEP’s hiring-barrier priority was largely aimed at systemic practices that disproportionately screened out minorities and women. The NEP has flipped this lens: its hiring-related enforcement is focused on protecting American workers from being disadvantaged in favor of visa holders. Chair Lucas has designated “Protecting American workers from anti-American national origin discrimination” as one of four Chair Priorities discussed below.

Priority 2: Legal Doctrine, Recent Supreme Court Precedent, and Statutory Interpretation

The second priority emphasizes cases with the potential to promote the development of law interpreting the anti-discrimination statutes the EEOC enforces.  The NEP highlights in particular “the application or scope of recent Supreme Court precedent or presenting unresolved issues of statutory interpretation,” highlighting some specific cases. These include Title VII claims under Ames v. Ohio Department of Youth Services (holding the same standard applies when majority group members allege discrimination); Muldrow v. St. Louis (holding that “some harm” is enough to show an applicant or employee suffered an adverse action); Students for Fair Admissions (holding that protected characteristics cannot be a consideration in admission decisions, which some argue extends to employment decisions as well); Groff v. DeJoy (holding that employers are obligated to provide reasonable accommodations for sincerely held religious beliefs of employees); and Bostock v. Clayton County (holding that discrimination based on sexual orientation can be sex discrimination, but here extending the holding to single-sex intimate spaces, employers’ and employees’ right to express the binary nature of sex, and employees’ rights to religious accommodations). Also described are the scope of liability under the Pregnant Workers Fairness Act; and cases where there is a federal circuit split on an NEP priority or in which the agency is seeking Supreme Court resolution.

Key takeaway: The SEP’s “emerging issues” priority was forward-looking, oriented toward expanding protections for new categories of workers and new forms of discrimination. The NEP’s emerging-issues equivalent is backward-looking in a sense and is focused on limiting the scope of recent legal developments (like Bostock) and on targeting what it views as overreach by prior EEOC leadership.

Priority 3: Vulnerable Workers

The third priority is a focus on vulnerable workers, “including teenage workers, persons with limited literacy or education, individuals employed in low wage jobs, survivors of sexual assault, and workers with developmental or intellectual disabilities.”

Key takeaway: The NEP’s vulnerable worker category is dramatically narrower than the SEP’s version. Several populations that the SEP previously singled out for “focused attention” no longer make the cut, including LGBTQI+ individuals, immigrants, people with arrest records, and older workers. Employers who relied on the SEP’s expansive vulnerable-worker framework to anticipate enforcement activity should consider recalibration.

Priority 4: The Commission’s Enforcement Process

The fourth priority is a focus on cases “involving the integrity or effectiveness of the Commission’s enforcement process, including cases involving: claims of retaliation; cases where a respondent’s “defense is rooted in a challenge to a Commission policy documents;” cases “protecting Commission access to information,” such as subpoena enforcement actions (which we have already seen increase this year); cases involving breaches of Conciliation Agreements or Consent Decrees; and cases involving violations of recordkeeping and reporting requirements.

Key takeaway: This priority reflects the Commission’s view of itself as a law enforcement agency, and apparent desire to maintain the integrity of the investigative and enforcement process.  Employers should continue to be on the lookout for retaliation claims, which we have already seen increase in popularity over the last several fiscal years. We also expect the EEOC will be paying particular attention to compliance with the terms of settlements with the government; something that in the past was often an afterthought.

Priority 5: Amicus Briefs in Cases Involving Religious Discrimination

Interestingly, this priority specifically applies to cases where the EEOC may serve as an amicus.  The EEOC will look at “matters involving religious organizations and religious employers” where it can “clarify the constitutional and statutory limitations regarding liability under the statutes it enforces.”

Key takeaway: This priority relates to other priorities involving claims of religious discrimination and accommodations for sincerely held religious beliefs of employees, and the Chair’s Priority, discussed below, regarding protecting workers’ religious liberty rights.

Priority 6: “Evenhanded Enforcement”

This priority says that the EEOC “should ensure evenhanded enforcement of the civil rights laws enforced by the agency, mindful that as public servants, EEOC staff are working on behalf of all American workers protected by these laws.”

Key takeaway:  This — alongside the NEP’s citation to Ames v. Ohio Department of Youth Services (which addressed majority-group standing under Title VII) — signals that the EEOC does not view enforcement limited to historically disadvantaged groups, and that the agency will be more willing to bring cases where the charging party is in a majority group (i.e., white employees, men, US-born workers).  Indeed, as detailed elsewhere in the NEP, the EEOC is expected to prioritize claims by majority-group workers and claims related to DEI practices.

VI. What Else is Missing from the NEP?

Notably absent from the NEP is a priority related to access to justice.  The SEP’s access-to-justice priority was a major driver of EEOC challenges to broad arbitration agreements and restrictive settlement terms. Its absence from the NEP could signal a meaningful de-escalation on these fronts.

After years of being an EEOC focus, equal pay has not survived as a named enforcement priority. While the EEOC retains jurisdiction over equal pay claims, the absence of this priority from the NEP likely means fewer proactive systemic investigations in this area.

Under the SEP, AI and machine learning in hiring were top enforcement concerns, but they are not identified as a standalone priority in the NEP, nor is AI even mentioned in the NEP.

VII. The Four “Chair Priorities”

The NEP introduces a new mechanism: “Chair Priorities,” designated by Chair Lucas and subject to change at the Chair’s discretion. The initial four are:

1. Remedying DEI-related race and sex discrimination;
2. Protecting American workers from anti-American national origin discrimination;
3. Defending women’s rights to single-sex spaces at work and workers’ rights to express the binary nature of sex; and
4. Protecting workers’ religious liberty rights.

The SEP had no comparable mechanism for individual-Commissioner-designated priorities. Under the SEP, priorities were set by Commission vote and required a majority to modify.  The Chair Priority mechanism appears to give the Chair a more agile tool for directing enforcement focus without a full Commission vote, and subject to change at any time for any reason.

VIII. What Employers Should Consider Now

Based on our analysis of both documents, here are the critical action items:

1. Revisit DEI. The NEP provides a specific enforcement roadmap. If your organization uses diverse slates, demographic-linked compensation, mandatory diversity statements, race- or sex-conscious evaluation rubrics, or restricts access to programs based on protected characteristics, these are squarely in the agency’s sights.  There is significant disagreement on what is lawful in this space, but being aware of this as an enforcement target is an important consideration.

2. Revisit Religious Accommodation Processes. The NEP and Chair Priorities elevate religious liberty to a top enforcement concern, specifically invoking Groff v. DeJoy. Employers should review their processes in this area to ensure compliance with Title VII.

3. Review Guest Worker and Visa-Related Hiring Practices. The NEP’s focus on “anti-American national origin discrimination” and preferencing of visa holders is new territory for the EEOC.  Employers should pay attention to job postings, staffing contracts, and hiring workflows in light of this EEOC focus.

4. Prepare for Centralized, Coordinated Enforcement. The elimination of District Complement Plans and the creation of a national deployment model means enforcement actions may be more strategic and better-resourced.  Employers should not assume that a District office’s historical enforcement posture will predict its future activity.

5. Monitor Executive Orders. The EEOC has now been clear that it is taking its enforcement cues from the Administration.  Tracking Executive Orders is now, functionally, an EEOC compliance exercise.

6. Don’t Neglect the Priorities That Survived. Protections for vulnerable workers (particularly teenage workers, low-wage workers, and workers with developmental disabilities) remain in the NEP.  The EEOC will continue to process the hundreds of thousands of charges it receives annually across all bases. The NEP shifts priorities but it does not eliminate the agency’s statutory obligations.

Implications for Employers

The transition from the SEP to the NEP is a wholesale reorientation of the government’s primary workplace anti-discrimination enforcement agency. The SEP’s six broad priorities — built around systemic barriers, vulnerable communities, emerging social issues, and access to justice — have been replaced by a leaner, more politically charged set of priorities centered on DEI enforcement, religious liberty, the binary nature of sex, and the protection of American workers over visa holders. Employers should pay close attention to the new priorities we have described above, and batten down the hatches for what could be swift enforcement of these areas.

We will continue to monitor implementation and will update this space as enforcement actions and litigation emerge under the new framework.

[1] Democratic commissioner Kalpana Kotagal voted against the NEP.

[2] In practice, this translates to charges brought by US-born workers involving claims of national origin discrimination where a charging party challenges hiring practices based on a preference for foreign workers or PERM recruitment practices or policies.