DROPLETS

The European Commission has adopted its final guidelines on the application of Article 102 TFEU to exclusionary abuses, replacing the 2009 enforcement priorities guidance effective October 10, 2026. These principles are binding on the Commission and are intended to provide greater legal certainty for dominant undertakings.

The new framework moves away from a uniform effects-based analysis and introduces a 'sliding scale' that organizes conduct into categories, each with its own presumptions and burden of proof. For example, exclusive dealing is now presumed to distort competition once established, shifting the burden to the company to rebut the presumption. Other practices like predatory pricing, margin squeeze, tying, and conditional rebates are given detailed, distinct analytical frameworks. The guidelines also clarify the role of the 'as-efficient competitor' test, acknowledging its importance while also outlining circumstances where it can be dispensed with, particularly where entrenched dominance makes the emergence of such a rival impossible.

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The U.S. Department of Health and Human Services (HHS) has significantly expanded the enforcement power of the Centers for Medicare & Medicaid Services (CMS). First, CMS deferred over $1 billion in federal Medicaid payments—$867.5 million to California and $199 million to Minnesota—pending a review of high-risk claims. While these funds can be released upon sufficient documentation, the move signals a more aggressive posture on program integrity.

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A US district court granted the Federal Trade Commission's request for a permanent injunction to block German multinational Henkel’s proposed $725 million acquisition of Liquid Nails. The court sided with the FTC's view that combining Henkel's Loctite brand with its main competitor would eliminate head-to-head competition, leading to higher prices and reduced innovation for construction adhesives.

This victory is significant because the FTC is framing it as a successful application of its "new approach to seeking permanent injunctions to block anticompetitive mergers without the need to continue cases in administrative proceedings." This signals a more aggressive litigation posture aimed at resolving merger challenges directly and finally in federal court, circumventing the agency's traditionally lengthy and resource-intensive internal administrative trial process. The outcome may embolden the Commission to pursue this streamlined path in future challenges.

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On August 18, 2026, the U.S. Court of Appeals for the D.C. Circuit upheld the Environmental Protection Agency’s 2024 rule designating perfluorooctanoic acid (PFOA) and perfluorooctane sulfonic acid (PFOS) as “hazardous substances” under CERCLA. A panel of Circuit Judges rejected industry arguments that the EPA misinterpreted its statutory authority, violated the Administrative Procedure Act’s notice requirements, and acted arbitrarily and capriciously.

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The Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC) have issued a joint final rule that formally defines an “unsafe or unsound practice” for supervised institutions. This is the first time the term has been formally defined, narrowing the basis for enforcement actions to practices that are contrary to prudent standards and are likely to cause material harm to an institution's financial condition or the Deposit Insurance Fund.

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In a question of first impression for any federal appellate court, the Seventh Circuit held in Motorola Solutions v. Hytera Communications that the Defend Trade Secrets Act (DTSA) applies to conduct occurring outside the United States. The Supreme Court denied certiorari, making this the leading authority on the issue.

The ruling significantly expands potential liability in cross-border trade secret disputes. A plaintiff can now potentially recover damages based on a defendant's worldwide sales, not just those made in the US. The court held that the DTSA’s extraterritorial reach is triggered so long as at least one "act in furtherance of the offense" was committed in the US. The court interpreted this domestic-act requirement broadly, finding that Hytera’s advertising and promotion of products incorporating the misappropriated trade secrets at US trade shows was sufficient. District courts have already begun applying this reasoning.

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The EU’s Cyber Resilience Act (CRA) now requires manufacturers of products with digital elements (PDEs) to provide an "early warning" to regulators within 24 hours of becoming aware of an actively exploited vulnerability or a severe security incident. This is followed by a fuller notification within 72 hours. The rules apply to a wide range of hardware, software, and firmware products made available on the EU market, regardless of the manufacturer's location.

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The U.S. Treasury has released proposed regulations implementing major international tax reforms, fundamentally altering how U.S. shareholders account for income from Controlled Foreign Corporations (CFCs). The new rules abandon the 'last day of the year' ownership test for Subpart F and Net CFC Tested Income inclusions, a long-standing feature of the tax code that allowed for significant tax planning through mid-year stock transfers. In its place, the regulations establish a period-based ownership model requiring daily proration to determine a shareholder's income share. The framework also mandates tax-year closings when a company's CFC status changes and expands reporting on Form 5471.

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The US Securities and Exchange Commission proposed "Regulation Crypto Assets" on August 18, 2026, a new framework intended to create tailored securities offering pathways for crypto assets. The proposal applies to "covered investment contracts," where the contract is the security, not necessarily the underlying crypto asset itself; tokenized securities are excluded. For sophisticated counsel and clients, this is the first bespoke SEC registration exemption regime for digital assets, offering potential clarity after years of applying legacy securities laws by analogy. The proposal could significantly alter capital-raising strategies for crypto and fintech projects. The framework includes a $5 million "startup exemption" with limited disclosure and a two-tiered "fundraising exemption" modeled on Regulation A for offerings up to $75 million, with corresponding ongoing reporting obligations. It also introduces a safe harbor to determine when an investment contract has ceased to exist. Market participants should monitor the proposal's progress toward a final rule and consider submitting c

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The US Commodity Futures Trading Commission (CFTC) has issued a notice of proposed rulemaking to establish a new exemption from registration for commodity pool operators (CPOs). The relief would apply to investment advisers registered with the SEC who operate certain commodity pools offered to sophisticated investors, known as qualified eligible persons (QEPs).

Sophisticated counsel care because the proposal, which would create a new CFTC Rule 4.13(a)(4), offers a more durable and predictable alternative to the existing de minimis exemption, as it is not conditioned on the amount of the pool's commodity interest trading. The rule would largely codify widely used no-action relief issued by CFTC staff in late 2025 and early 2026, but with key differences. The proposal alters the definition of eligible investors, modifies Form PF filing requirements, and would generally reinstate a requirement for CPOs to offer redemptions when converting a registered pool to exempt status. The proposed rule would also expand related relief for commodity trading advisors (CTAs). Comments on the proposa

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Investors are increasingly using complex, multi-level joint venture (JV) and platform structures to deploy capital across jurisdictions and asset classes. A key driver of this complexity is the rise of separately managed accounts (SMAs) investing alongside traditional fund vehicles, creating parallel structures that access a single underlying asset pool. This trend, particularly prevalent in infrastructure M&A, requires careful upfront planning to mitigate significant regulatory, tax, and governance risks.

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The U.S. Environmental Protection Agency granted 18 full and 11 partial exemptions for small refineries from their 2025 obligations under the Renewable Fuel Standard, waiving compliance for what the source indicates is 1.76 billion Renewable Identification Numbers (RINs). This total far exceeds the agency's prior estimate of 990 million RINs.

In a significant policy shift, the EPA announced it will initiate a new rulemaking to reallocate 100% of the actual exempted 2025 volumes to non-exempt obligated parties for the 2026 and 2027 compliance years. This reverses a previous rule that reallocated only a portion of the estimated shortfall. The change increases the number of RINs that larger refineries and fuel importers must acquire and retire, heightening compliance costs. The potential retroactive application to the 2026 compliance year is expected to face strong industry opposition.

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Providers and deployers of AI systems must understand that compliance with the EU's Artificial Intelligence Act is inseparable from the General Data Protection Regulation (GDPR). The AI Act was drafted to complement, not supplant, existing data protection law, expressly deferring to the GDPR in cases of conflict and incorporating its core concepts. Key terms such as 'personal data,' 'profiling,' and 'biometric data' are defined by reference to the GDPR.

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A U.S. district court in Massachusetts has granted a nationwide preliminary injunction preventing a Department of Homeland Security (DHS) final rule from taking effect. The rule, which was scheduled for implementation on September 15, 2026, would have eliminated the flexible 'duration of status' framework for F-1 students, J-1 exchange visitors, and I-visa foreign media representatives. Instead, it would have imposed fixed admission periods, requiring formal applications for extensions of stay.

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The U.S. Treasury and IRS have issued proposed regulations that would create a formal information reporting regime for Qualified Opportunity Funds (QOFs). The rules would transform the program from a largely self-policed incentive to an enforced compliance system with significant penalties for failures.

Key provisions would convert IRS Form 8996 into a mandatory, standalone annual information return, introduce daily penalties of $500 or more for reporting failures, and require Qualified Opportunity Zone Businesses (QOZBs) to furnish compliance data to their QOF investors. The proposal also establishes an exclusive procedure for a QOF to voluntarily decertify, a step that would trigger an immediate taxable gain inclusion for all its investors and permanently foreclose the program's 10-year gain-elimination benefit.

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Plaintiffs' firms are increasingly using artificial intelligence to generate mass tort claims at scale, creating a tech-driven pipeline that goes far beyond traditional advertising. This ecosystem, often backed by litigation funders, uses algorithmic ad targeting to find potential claimants, AI-powered chatbots for initial intake, and automated software to screen cases before human review.

For corporate defendants and their counsel, this shift accelerates the volume-based litigation model that pressures aggregate settlements. However, it also creates a new, potentially discoverable evidentiary record, including chatbot transcripts and ad-targeting parameters, which can be crucial for challenging a claimant's account of exposure or timing. The plaintiffs' bar's adoption of these tools also creates novel risks for the firms themselves, exemplified by a putative class action alleging a mass tort firm used AI-generated voice calls in violation of the TCPA. Defense counsel should now incorporate discovery requests targeting these AI systems and monitor emerging consumer-protection cases

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The European Union is introducing a phased program of changes to its equal pay laws, which will create mandatory new reporting obligations for larger employers. Companies with more than 250 staff will be required to report on pay gaps based on employee ethnicity and disability. This development is significant not only for its impact on HR and compliance departments but also for the data-handling challenges it presents. To comply, organizations must collect, hold, and process large volumes of highly sensitive personal data, creating substantial new risks and obligations under data privacy laws such as the GDPR. Legal counsel for affected companies should be proactive in ensuring a valid legal basis for processing this data and implementing robust security measures. The changes come as the UK is reportedly considering its own pay transparency reforms, making this a key area for multinationals to monitor.

Colombia has enacted a significant legal reform that restores the jurisdiction of arbitral tribunals over disputes involving state contracts, a right that had previously been curtailed. The change is a critical development for international companies operating in the country, as arbitration is often preferred over litigation in local courts for its perceived neutrality and specialized procedures. For sophisticated counsel and their clients, this restoration provides greater certainty and a more reliable enforcement mechanism, potentially increasing Colombia's attractiveness for foreign investment in public projects and other government-related business.

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The SEC has proposed rescinding Rule 206(4)-5, its "pay-to-play" rule for investment advisers, which currently imposes a two-year timeout on providing compensated advisory services to a government entity after a covered employee makes a political contribution. The proposed change would replace the prescriptive, strict-liability regime with a principles-based approach, relying on the Investment Advisers Act's general antifraud provisions and an adviser's fiduciary duty to prevent quid pro quo corruption.

Sophisticated counsel care because the current rule's strict application has created significant compliance burdens, hiring obstacles, and business disruptions, sometimes triggered by inadvertent or small-dollar contributions. While a principles-based standard offers more flexibility, it also requires advisers to design, implement, and defend bespoke compliance policies to manage these risks. The SEC noted that other pay-to-play rules for broker-dealers and municipal advisers would remain in effect.

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Delaware has amended its Personal Data Privacy Act, introducing significant new obligations for businesses. The amendments, effective January 1, 2027, create a consumer right to opt out of automated decision-making that produces legal or similarly significant effects, a category covering financial services, housing, insurance, employment, and healthcare. This change reflects a growing regulatory focus on the use of AI and profiling.

Counsel should advise clients that the law’s scope has been substantially broadened. The applicability threshold has been lowered from 35,000 to just 10,000 consumers, and exemptions for financial institutions and employee data have been narrowed. The definition of sensitive data is also expanded to include immigration status, nonbinary or transgender status, and neural data, with new consent and notice requirements for its sale. Businesses that acquire personal data from other controllers are now also subject to the law, regardless of consumer count. Companies previously outside the law's reach must now re-evaluate their obligations and prepare for comp

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The Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC) have adopted a joint final rule, effective November 2, 2026, creating a regulatory definition of an "unsafe or unsound practice." The Federal Reserve did not join the rulemaking. The new two-part test requires conduct to be contrary to generally accepted standards of prudent operation and to have caused, or be likely to cause, material financial harm to the institution or a material risk to the Deposit Insurance Fund.

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A federal court upheld Oregon’s extended producer responsibility (EPR) law for consumer packaging, dismissing the lawsuit in NAW v. Feldon that challenged its validity. This decision marks a significant milestone for US environmental regulation, as Oregon is one of several states that have recently enacted sweeping laws requiring producers of packaged goods to finance and manage the collection and recycling of their materials. Such EPR schemes are designed to shift the financial burden of waste management from municipalities to the private sector and encourage more sustainable packaging design.

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The US International Trade Commission (ITC) has opened a public comment period to guide the revival of its reporting duties under Section 338 of the Tariff Act of 1930. This follows the executive branch's recent and novel use of Section 338 to impose tariffs and import exclusions on Canadian products, alleging discriminatory trade practices against US alcoholic beverages, dairy, and motor vehicles. The statute empowers the president to retaliate against countries that burden US commerce.

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The UK's Department for Business, Innovation, Science and Trade has published a consultation paper proposing a fundamental overhaul of the nation's corporate reporting framework. The proposals aim to simplify reporting under the Companies Act 2006, focusing the annual report on financially material, decision-useful information for investors and creditors.

Key changes under consideration include replacing the current regime for distributable profits with a simpler solvency-based test for dividends, consolidating company-size thresholds, and removing the annual advisory shareholder vote on directors' remuneration reports for quoted companies. The government also proposes paring back prescriptive narrative reporting, including removing the requirement for a Section 172(1) statement and other specific disclosures on environmental and social matters unless they are financially material. The reforms seek to reduce burdens, particularly for private and smaller companies, and update shareholder communications for the digital age. The consultation period is open until November 30, 2026, and

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The EU’s General Court has upheld the European Commission’s prohibition of Booking Holdings’ acquisition of flight OTA Etraveli. This landmark judgment is the first time an EU court has fully endorsed a "reverse leveraging" or "entrenchment" theory of harm, signaling a significant development for merger control involving dominant digital platforms. The court affirmed the block despite finding the transaction would increase Booking's dominant hotel OTA market share by only "a few tenths of a per cent" and acknowledging material errors in the Commission's quantitative analysis. Sophisticated counsel should note the court's reliance on qualitative factors, such as the deal giving Booking control over a key customer-acquisition channel and making its ecosystem "stickier," thereby consolidating its dominance and making the market harder for rivals to contest. Dominant platforms must now carefully scrutinize any acquisition, regardless of size, for its potential to entrench a core market position. An appeal to the Court of Justice on points of law is possible.

On August 31, 2026, the US District Court for the Northern District of New York invalidated the state's Climate Change Superfund Act, a 'polluter pays' law that sought to create a US$75 billion cost-recovery program. The Act would have imposed liability on certain fossil fuel producers for climate adaptation projects based on their worldwide greenhouse gas emissions between 2000 and 2024. The court granted summary judgment for a coalition of states and industry groups, finding the state law was preempted by the federal Clean Air Act. Citing the Second Circuit's decision in City of New York v. Chevron, the court found no material distinction between the Act's statutory scheme and preempted tort claims. The ruling also found the Act’s reliance on extraterritorial emissions raised significant foreign policy concerns, providing an independent basis for invalidation. This decision offers a detailed roadmap for future preemption challenges to similar state-level climate liability laws and will be a focal point in litigation nationwide as New York is expected to appeal.

The US Commodity Futures Trading Commission (CFTC) has issued a Notice of Proposed Rulemaking to reinstate and amend registration exemptions for Commodity Pool Operators (CPOs) and Commodity Trading Advisors (CTAs). The proposal would create a new exemption for SEC-registered investment advisers (RIAs) operating commodity pools for sophisticated investors, largely codifying and superseding recent no-action relief but with material differences regarding investor eligibility, reporting triggers, and redemption rights. The new rules would also restore a corresponding exemption for CTAs advising these pools and separately increase the capital threshold for the "small pool" exemption from $400,000 to $800,000 to account for inflation.

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In a significant development for employers, the U.S. Court of Appeals for the Fifth Circuit has vacated an Occupational Safety and Health Administration (OSHA) rule that required the recording of work-related mental illnesses. The July 2026 decision in Exxon Mobil Corp. v. Occupational Safety and Health Review Commission concluded that the agency exceeded its statutory authority under the OSH Act.

Applying the Supreme Court's recent Loper Bright framework, which directs courts to determine the "best reading" of a statute rather than defer to a "plausible" agency interpretation, the court found the Act's reference to "illnesses" did not extend to mental conditions. This reasoning creates a potential new avenue to challenge other OSHA regulations. Specifically, the analysis suggests OSHA's rule requiring immediate reporting of fatalities and serious injuries may be vulnerable because the OSH Act's text only authorizes "periodic reports." While the incident-reporting rule remains enforceable today, employers facing citations may now have a credible, though untested, argument that t

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In a significant shift for the U.S. mortgage market, Fannie Mae and Freddie Mac now permit all approved lenders to use VantageScore 4.0 for single-family loan originations. The move, directed by the Federal Housing Finance Agency (FHFA), elevates the alternative credit score model from a limited pilot to full-scale deployment, and the Government-Sponsored Enterprises (GSEs) have updated their automated underwriting systems accordingly. Counsel for mortgage lenders should take note, as this change introduces new operational flexibility and complexity. While lenders may now choose between VantageScore 4.0 and Classic FICO for most loans, they must use the same model for all borrowers on a single mortgage and must continue using Classic FICO for manually underwritten loans. The development could expand the pool of eligible borrowers but requires careful implementation to align with updated loan-level price adjustments. Lenders should watch for forthcoming updates to the GSEs' selling guides and any future announcements regarding the still-ineligible FICO Score 10T.

The rapid expansion of power-hungry AI data centers is creating significant new litigation risks for developers, financiers, and utilities. A new analysis warns that the trillions of dollars being invested in data centers could be jeopardized by delays or unexpected costs in securing the massive amounts of electricity required for their operation. Because a large data center cannot simply plug into the existing grid, projects often depend on substantial and time-consuming upgrades to transmission lines, substations, and generation capacity.

This creates a high-stakes contracting challenge: who bears the financial risk if the power is not available on schedule, if infrastructure costs soar, or if regulatory frameworks change mid-project? The U.S. Federal Energy Regulatory Commission (FERC) is already scrutinizing how grid upgrade costs are allocated for these large new loads, adding to the uncertainty.

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The U.S. Treasury and IRS have issued Notice 2026-53, providing the 2026 emissions rate table for the Section 45Z clean fuel production tax credit. The Department of Energy also released an updated 45Z-CF GREET model incorporating the new guidance and recent legislative changes. Sophisticated counsel and their clients in the energy and agricultural sectors care because a fuel's emissions rate directly determines the value of the tax credit, impacting project finance and profitability. This guidance is particularly favorable for producers using animal manure or food scraps as feedstock, as it establishes distinct emissions rates and allows for farm-specific calculations. It also benefits ethanol producers using certain regenerative agricultural practices. Key changes include the formal exclusion of indirect land use change (ILUC) emissions and the addition of several new pathways for renewable natural gas. Fuel producers should now evaluate the updated model and substantiation rules to maximize their credits for fuels produced in 2025 and beyond.

The California Privacy Protection Agency’s (CPPA) Enforcement Division has expanded its focus from data brokers who fail to register to those who file inaccurate information. In a September 3 enforcement advisory, the agency warned that under the Delete Act, each incorrect disclosure in a data broker's annual registration triggers a $200 fine for every day the error remains uncorrected. The advisory emphasizes that the law does not distinguish between intentional misrepresentation and unintentional mistakes, putting the onus entirely on the filer to ensure accuracy. The CPPA noted it has already brought multiple enforcement actions over such reporting errors.

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The UK government has accelerated the timetable for new consumer subscription contract rules under the Digital Markets, Competition and Consumers Act 2024 (DMCCA), with an effective date now set for January 2027. The regime targets 'subscription traps' by imposing stricter transparency and cancellation obligations on businesses serving UK consumers, regardless of where the business is based. Key requirements include providing prescribed information upfront, sending renewal reminders, and offering a new 14-day cooling-off period after a free trial converts to a paid subscription or when a contract renews for 12 months or more. The rules also mandate a straightforward online cancellation process. The Competition and Markets Authority (CMA) will enforce the regime and can impose fines of up to 10% of a company's global annual turnover for non-compliance. Affected businesses should begin auditing their consumer journeys, disclosure language, and cancellation workflows to prepare for the changes, and watch for forthcoming implementation guidance from the CMA.

An update to Colorado's artificial intelligence law clarifies the compliance burden for employers using AI-driven hiring tools. The statute now appears to foreclose a common but risky compliance theory: that having a human in the loop to review AI-generated outputs—such as resume screens or candidate rankings—is sufficient to take the process outside the scope of the law. This development is significant for the many corporate clients that have turned to AI to manage high volumes of job applications and now face heightened regulatory risk. Counsel should advise employers operating in Colorado to re-evaluate their HR technology stack and internal workflows to ensure they comply with the state's updated requirements, which may demand deeper audits for bias and other risks than previously assumed. Other states may follow Colorado's lead, making this a key development to watch in the evolving landscape of AI and employment regulation.

The U.S. Government Accountability Office (GAO) has recommended Congress reassess the oversight of financial disclosures for publicly traded banks that operate without a holding company. A new GAO report found a regulatory gap where 11 such banks, including two with over $80 billion in assets, are not subject to the SEC’s qualitative disclosure review process. Instead, their filings are reviewed by banking regulators like the FDIC, Fed, and OCC, which the GAO found apply a less stringent standard.

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In its first significant interpretation of recent amendments to Section 144 of the Delaware General Corporation Law, the Delaware Court of Chancery held that statutory safe harbors for conflicted transactions can be defeated by a grossly negligent process. In 'Dodiya v. Franklin', the court found it was reasonably conceivable that a board acted with gross negligence when it restored a conflicted CEO’s access to sale-process information after he had leaked confidential data to the buyer. This "reckless indifference" neutralized the protection of the disinterested-director-approval safe harbor. The court also invalidated the stockholder-vote safe harbor because the proxy was materially misleading. Corporate counsel should recognize that this ruling elevates process over technical compliance; a board's procedural integrity is critical to securing the protection of the business judgment rule. Although an exculpation clause shielded the disinterested directors from personal monetary liability for the alleged breach of the duty of care, the transaction itself now faces review under the mor

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Following the Supreme Court's 2023 decision in Sackett v. EPA, the Environmental Protection Agency and the US Army Corps of Engineers have released a supplemental proposal to significantly narrow the definition of 'waters of the United States' (WOTUS) under the Clean Water Act. The proposal seeks to codify the Court's new, more restrictive jurisdictional test by defining what constitutes a 'relatively permanent' body of water and when a wetland has a 'continuous surface connection' to a covered water. This change is critical for clients in industries like real estate development, energy, and infrastructure, as the proposed definitions—which focus on perennial, or near-daily, surface water—would drastically reduce the number of wetlands subject to federal jurisdiction and permitting. The agencies acknowledge that a majority of currently jurisdictional wetlands might not meet this new standard. Counsel should advise clients with current or planned projects to assess their permitting strategies in light of this potential shift from federal to state-level regulation. The public comment p

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The rapid expansion of artificial intelligence and the data centers that support it is creating an unprecedented demand for electricity, straining a US power grid and regulatory system built for a different era. For major-firm clients in the technology, energy, and investment sectors, this mismatch creates significant business and legal risks. Developers and utilities are now confronting enormous new loads, highly compressed project timelines, and constrained transmission systems. Navigating the evolving rules from the Federal Energy Regulatory Commission (FERC) and state bodies—governing who can connect to the grid, where power is sourced, and even who can sell it—is becoming a critical hurdle. The friction between massive demand and an outdated infrastructure framework can delay or even scuttle major projects. Counsel should closely monitor changes in FERC policy and divergent state-level regulatory approaches, as these will heavily influence the viability and location of future AI-driven investments and the strategies for powering them.

The SEC staff has made permanent its "hands-off" policy of no longer reviewing the substantive merits of a public company's decision to exclude a shareholder proposal under Rule 14a-8. This change, implemented for the 2026 proxy season, removes the agency as an informal arbiter, a role that historically lent legitimacy to company exclusions and discouraged litigation. Now, companies face a new landscape where excluding a proposal carries a greater risk of a court challenge. The first proxy season under the new policy saw six lawsuits filed over roughly 170 exclusions. Sophisticated counsel must advise clients to re-evaluate their proxy-season strategy. The decision to exclude now involves a more complex calculus, weighing the heightened risk of litigation, the possibility of proponents using advance notice bylaws to circumvent Rule 14a-8, and potential reputational damage or investor pushback against directors. While direct investor backlash was limited in 2026, providing a clear, well-supported rationale for any exclusion is more critical than ever as companies prepare for the 2027

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The California legislature has passed and sent to Governor Gavin Newsom numerous employment bills creating new compliance duties and litigation risks. Several bills target artificial intelligence in the workplace, including the "No Robo Bosses Act," which would require a human to independently corroborate any AI-based termination decision. Another would amend the Cal/WARN Act to require specific notice for mass layoffs caused by AI. Other measures would prohibit employers from using AI to collect neural data or recognize employees' emotional states and would bar surveillance in private areas like bathrooms.

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New York has enacted a law creating a statewide right for current and former employees to access, review, and challenge their personnel records. The law, effective November 8, 2026, imposes significant new compliance burdens on public and private employers. Key requirements include providing copies of personnel files within five business days of a written request, notifying employees within 10 days whenever negative information that could affect their employment status is added to their file, and allowing employees to submit a written statement disputing information if an agreement to amend it is not reached. The law also includes a three-year post-termination retention requirement and anti-retaliation provisions. While Governor Kathy Hochul signed the bill, she also secured an agreement for a legislative amendment to clarify ambiguities in the next session, including the precise scope of a 'personnel record'. Despite the planned revisions, employers must prepare to comply with the current version of the law's fast-approaching effective date while monitoring for further legislative d

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A panel of experts reports that general counsel compensation is rising significantly, with a marked shift in focus toward equity and new responsibilities like AI governance. According to data from Equilar presented at a recent event, median total pay for GCs at the 500 largest U.S. public companies increased by 23% over five years, reaching $3.7 million in 2025. The data also indicated that women GCs now earn more than men on a median basis, and Bay Area companies lead in compensation growth.

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The US Court of Appeals for the Eleventh Circuit has reversed a district court's dismissal of a qui tam action, holding that the False Claims Act's (FCA) provisions allowing private whistleblowers, or relators, to sue on behalf of the government do not violate the Appointments Clause of the US Constitution.

The ruling preserves the primary mechanism for FCA enforcement for now in the Eleventh Circuit, aligning it with other circuits that have rejected this specific constitutional attack. However, the decision was narrow, focusing only on whether relators are "officers of the United States." A successful constitutional challenge to the FCA's qui tam framework, which several Supreme Court justices have signaled interest in, would fundamentally alter the government enforcement and white-collar defense landscape for clients in sectors like healthcare and government contracting.

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An analysis by Venable LLP explores a potential new market in the music industry centered on AI-powered 'fan co-creation.' This model would allow fans to legally use an artist’s voice, likeness, and catalog to generate new derivative works within a licensed, controlled environment. Such a framework reframes AI from a threat of replacement to a tool for deeper, monetizable fan engagement.

For artists, labels, and AI developers, this emerging area presents both novel revenue streams and substantial legal risks. Key challenges include preventing unauthorized voice cloning, managing brand reputation, and avoiding market substitution for official releases. Sophisticated counsel must navigate the complex interplay between copyright law and rights of publicity (often termed VINL: voice, image, name, and likeness) to structure protective and commercially viable agreements.

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The New York Attorney General has finalized regulations for the Stop Addictive Feeds Exploitation (SAFE) for Kids Act, starting the clock for compliance ahead of a January 25, 2027, effective date. The law targets "addictive online platforms," defined by user engagement with algorithmically curated feeds, that meet certain size thresholds, such as having at least five million monthly active users.

Covered platforms will be prohibited from providing these "addictive feeds" to minors without verifiable parental consent or after verifying the user is an adult. The new rules mandate specific, "technically workable" methods for age verification, which must be certified by an approved third party. If a government ID check is offered, at least one alternative method must also be available. The rules also detail processes for obtaining parental consent and impose data minimization and security obligations on any information collected for these purposes.

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The California Supreme Court has established a higher standard of judicial review for eminent domain actions against privately owned utilities. In Town of Apple Valley v. Apple Valley Ranchos Water, the court held that when a public agency seeks to condemn a private utility, trial courts must independently weigh the evidence to determine if the taking is justified. This ruling sets aside the deferential ‘gross abuse of discretion’ standard that had favored public agencies. The decision materially strengthens the position of private utility owners—including electric, gas, and water companies—by allowing them to more effectively challenge the substantive necessity of a proposed condemnation. Public entities must now prepare a more robust factual record to support their acquisition efforts, as their resolutions of necessity are now subject to a more searching de novo review on the merits at trial. The court distinguished this substantive challenge from a procedural challenge to the resolution's validity, which remains subject to the more deferential standard. The case was remanded for

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The US Federal Trade Commission is reportedly operating with only two commissioners, creating the potential for 1-1 deadlocks on any action requiring a vote. This partisan gridlock is expected to stall the agency's most ambitious agenda items, including the initiation of new competition rulemakings and the filing of contested enforcement actions or lawsuits that lack bipartisan support.

For sophisticated counsel and clients, this development introduces significant strategic uncertainty. While routine agency operations and investigations led by staff can continue, final commission-level decisions on major mergers or new policy directions may be indefinitely delayed. The deadlock effectively curtails the agency's ability to pursue novel or aggressive antitrust theories that tend to divide commissioners along party lines. The key development to watch is the White House nomination and Senate confirmation of a third commissioner, which is the only path to restoring a functioning voting majority at the agency.

In 'Ding v. Structure Therapeutics,' the U.S. Court of Appeals for the Ninth Circuit held that the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act (EFAA) allows a plaintiff to withdraw from arbitration and proceed in court upon discovering a basis for a sexual harassment claim, even if other claims have already been arbitrated for some time. The court found the EFAA election right is not waived by starting arbitration on other claims if the plaintiff was unaware of the harassment claim's basis.

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In a statement prompted by an abandoned Ohio hospital merger, Federal Trade Commission Chairman Andrew Ferguson provided the most granular guidance to date on the agency's evaluation of the 'failing firm' defense. The chairman’s statement emphasizes the critical importance of a target company conducting a robust and comprehensive 'shop process' before agreeing to be acquired by a direct competitor. For sophisticated counsel and clients, this guidance clarifies the high bar for successfully asserting that a financially distressed company had no other viable options. Failure to conduct and document an adequate search for alternative buyers could unwind a deal, force a costly mid-review sale process, or lead to a full-blown antitrust challenge, jeopardizing deal certainty. The chairman detailed five factors the FTC will now scrutinize: the breadth of buyer solicitation, the time allowed for evaluation, equal access to diligence materials, the seller's good-faith engagement, and appropriate consideration of offers with fewer competitive concerns. Parties contemplating a transaction that

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The European Securities and Markets Authority (ESMA) has finalized guidelines detailing when a supplement to a base prospectus introduces a "new type of security" under the EU Prospectus Regulation. Rejecting a more flexible principles-based approach from its 2025 consultation, the regulator adopted a prescriptive "annex-based" test. The new rule prevents issuers from using supplements to add functionality that would trigger disclosure requirements under specific new annexes—such as those for asset-backed securities, new underlying assets, or certain sustainability-linked bonds—if not contemplated in the original base prospectus. This shift significantly curtails the ability to adapt securities programs on the fly and forces issuers to anticipate a wider range of potential features at the outset. Corporate and financial counsel must review and update their program documentation to build in greater upfront optionality for products, underlyings, and ESG features, as relying on supplements for such changes is no longer a viable strategy. The guidelines take effect two months after their

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The U.S. Court of Appeals for the Eleventh Circuit has reversed a district court ruling that found the False Claims Act's (FCA) qui tam provisions unconstitutional. In United States ex rel. Zafirov v. Florida Medical Associates, LLC, the panel rejected a defense argument that the FCA violates the Appointments Clause by allowing private whistleblowers, or relators, to litigate on behalf of the government without being appointed as federal officers. This decision is significant for any company that does business with the federal government, particularly in the healthcare and defense sectors, as it reaffirms the viability of the primary enforcement mechanism for the government's main anti-fraud law within the circuit. The ruling addresses a constitutional question being litigated in other circuits, creating the potential for a split that could attract Supreme Court review. Counsel for businesses facing FCA exposure should track the progress of similar challenges nationwide and consider the implications of this evolving defense strategy in their litigation planning.

A decade after its passage, the Defend Trade Secrets Act (DTSA) has made federal court the primary forum for trade secret disputes but has not produced the single national standard Congress intended. Case filings have surged by over 30% since the law's first full year, but state law remains influential and key circuit splits have emerged.

Counsel must now navigate conflicting precedent on crucial issues. Courts are divided on how specifically a trade secret must be identified at the pleading stage, creating disparate standards for surviving a motion to dismiss. A second split involves damages, with the Second and Fifth Circuits disagreeing on whether a defendant’s "avoided costs" constitute recoverable unjust enrichment absent proof of the plaintiff's own quantifiable loss. The Supreme Court has denied certiorari on the issue.

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