DROPLETS

On September 30, 2026, California Governor Gavin Newsom signed Assembly Bill 1776, the COMPETE Act, significantly expanding the Cartwright Act. California now operates one of the broadest antitrust statutes in the country, and the change reaches far beyond in-state counsel: it affects the conduct, litigation posture, and settlement calculus of any company with sales, employees, or operations in California.

Why counsel should care now: expanded state liability interacts with the federal antitrust framework and overlapping private-enforcement regimes, and a stricter state standard can change how defense costs, injunctions, and class exposure are priced in disputes touching the state. For major-firm clients, the question is whether existing pricing, contracting, or distribution practices now carry added state-law risk, and whether pending matters should be reassessed.

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On 29 September 2026 the Trump Administration issued two executive orders. The first directs executive departments and agencies, to the maximum extent permitted by law, to substitute "Super Intelligence" (SI) for "artificial intelligence" (AI) in official correspondence, websites, reports and policy documents, reasoning that frontier systems have outrun the original terminology. Existing regulations, contracts and grants need not be revised, and "SI" currently covers the same technologies as the statutory AI definition at 15 U.S.C. § 9401(3) — but the Assistant to the President for Science and Technology must propose legislative language on an SI definition within 60 days, including whether it modifies or supersedes that definition.

The second order establishes America.gov, a conversational federal services portal administered by GSA with OMB and the National Design Studio, integrating Login.gov and covering public-facing services with more than 100,000 annual users. OMB may add or remove covered services by memorandum, and an implementation memorandum is due within 90 days.

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The Third Circuit has affirmed the February 2025 summary judgment opinion in Thomson Reuters v. Ross, adopting parts of Judge Bibas's analysis while rejecting others. Because ROSS's tool was a legal search engine returning judicial opinion passages rather than a generative model, the panel expressly distinguished LLM training and dismissed the DOJ's competition concerns raised in the OpenAI copyright litigation. That narrow framing, however, masks reasoning that travels: the court treated competitive overlap with the copyrighted work as evidence of minimal transformation, and it converted the factual backdrop of intermediate-copying cases into a rule that copying must be necessary rather than merely easy, holding that ROSS could not claim headnotes to reach unprotected information because vendor drafting was the simpler path.

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Two SEC staff offices — the Office of the Chief Accountant and the Division of Investment Management — have jointly issued a statement on fair value measurement and disclosure considerations for private credit. The message to sponsors, advisers, valuation agents, auditors and fund boards is that a rapid build-out of privately placed loans, direct lending and related exposure has outpaced the consistency of pricing and disclosure practices supporting reported net asset value.

Why sophisticated counsel should care: private credit is now a core allocation for insurance, pension, sovereign wealth and hedge fund clients, and much of that paper sits on registered fund balance sheets. Risk is migrating from portfolio holdings to the valuation and disclosure apparatus around them. A staff statement changes no legal obligation, but it signals where examiners and enforcement attention is heading, and is a natural reference point in diligence on valuation policy, pricing sources, Level 3 governance, and board oversight.

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Two developments point in the same direction for employer-side labor counsel. First, the General Counsel's September 11, 2026 brief in Atlassian Corp. (16-CA-324971) asks the Board to abandon the 2023 Stericycle presumption — that a rule with a reasonable tendency to chill Section 7 activity is presumptively unlawful unless the employer proves a legitimate interest and no narrower alternative — and to substitute a two-step test: whether an "objectively reasonable employee," reading the rule in context, would see possible interference, followed by genuine balancing of the employer's legitimate business justifications against the degree of interference. Applied to the four rules litigated in Atlassian, the GC would uphold civility, anti-insult, and stakeholder-communication rules, and invalidate only the confidentiality rule to the extent it captured nonpublic compensation information.

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Senate committee leaders from both parties introduced the Bipartisan American Affordability and Jobs Act of 2026 on 30 September 2026, releasing legislative text that combines reforms to the National Environmental Policy Act and the Clean Water Act alongside other permitting provisions. The early, jointly-sponsored introduction matters because permitting timelines and environmental review are recurring gating items for data centers, transmission and generation buildout, water infrastructure, and industrial and manufacturing siting.

For major-firm clients, the key question is not the bill number but which review pathways, page limits, categorical exclusions, jurisdictional triggers, and judicial-review provisions survive negotiation. Drafts of this kind typically change several times before any floor vote, and House counterparts may substitute or dilute the Senate text. Counsel should therefore treat the release as a starting marker for scenario planning rather than settled law, and should stress-test project schedules against alternative review regimes that could still apply.

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On September 30, 2026, California Governor Gavin Newsom signed Senate Bill 690, the culmination of a multi-year effort to curb abusive CIPA litigation. The measure ends the private right of action under the California Invasion of Privacy Act's pen register and trap-and-trace provision — the statute California plaintiffs' bars have used to build wiretap-based class actions, often with per-transmission statutory damages and discovery-expanding allegations.

The reported significance is a narrowing of one of the highest-volume state privacy claim categories for consumer-facing businesses, including platforms, app operators, retailers and financial institutions with California users. Defense-side counsel should expect dismissals and class action challenges citing the new law, while plaintiffs' firms will test its retroactivity and its treatment of conduct predating September 30, 2026. Corporate counsel should reassess exposure reserves for pending and threatened CIPA wiretap matters and calibrate future monitoring and consent practices.

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On September 30, 2026, California Governor Gavin Newsom signed AB 1776, the Competition and Opportunity in Markets for a Prosperous, Equitable and Transparent Economy Act, the latest amendment to the state's antitrust statute. According to Wilson Sonsini's summary, the law extends California's competition law to reach single-firm conduct — categories historically governed almost exclusively by federal antitrust law under the monopoly-maintenance framework, which requires proving that market power was acquired or maintained through exclusionary conduct.

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At its September 30, 2026 open meeting, the SEC voted to advance three proposed rulemakings under Chairman Atkins' "responsible retailization" initiative, framed as broadening individual investor access to private markets. Only one source is in this cluster, and the available text does not identify the specific proposals, their proposed eligibility standards, or any comment deadlines, so the substance of the package is not verifiable from the excerpt. Read the adopted releases and proposing releases for the full text of each item.

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The Supreme Court's June 2026 decision in Trump v. Slaughter upheld the removal of two Democratic commissioners, confirming presidential power to remove FTC leadership at will. A third Republican commissioner resigned in November 2025, and nominee David MacNeil remained unconfirmed as of September 2026, leaving Chair Andrew Ferguson and Commissioner Mark Meador as the agency's only sitting members.

In July 2026 they split 1-1 on IonQ's acquisition of quantum chip fabricator SkyWater. Ferguson backed a staff-negotiated consent order with behavioral remedies citing US leadership in fault-tolerant quantum computing; Meador called the risk too "narrow, too short-lived, and too speculative" and pointed to 2023 Merger Guidelines market shares. With a tie and no appetite to sue, the deal closed unconditionally — a template for future tied votes.

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What happened: the SEC has proposed amendments designed to expand retail investor access to private-market strategies through registered funds. The proposal addresses two levers: permitting performance fees for funds organized under the Investment Company Act rather than limiting them to incentive-based fee structures, and easing operational constraints that currently govern interval funds, which invest a stated share of assets in illiquid holdings. The single source in the cluster is a law-firm client alert analyzing the proposal; the comment record and any final rule text are not reflected in the available material.

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On September 17, 2026, the Securities and Exchange Commission announced a five-year "Innovation Exemption" intended to facilitate trading of tokenized versions of stocks listed on major U.S. stock exchanges and markets, according to a Perkins Coie client alert. The excerpt available here does not set out the exemption's operative terms — eligible token structures, permitted intermediaries, custody and settlement arrangements, or disclosure and listing conditions — so its actual scope should be read from the SEC's own materials before being relied on.

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Per a single Latham & Watkins alert (JD Supra, October 1, 2026; the excerpt is truncated, so provision-level detail is unverified), California Governor Gavin Newsom signed Assembly Bill 1776 — the COMPETE Act — on September 30, 2026. The statute reportedly materially expands the state's principal antitrust statute, the Cartwright Act, and its monopoly-enforcement reach, with an effective date of January 1, 2027.

For major-firm clients, the significance is that a state already central to nationwide merger review now appears to have a broader in-state toolkit for challenging single-firm conduct, potentially raising parallel exposure alongside federal antitrust claims and letting plaintiffs reframe monopolization theories around California market structure. Practical attention should shift to California-facing distribution, platform, and network-effect businesses, and to counsel weighing how state theories interact with Hart-Scott-Rodino timing and the federal monopoly elements.

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On September 29, 2026, the President met at the White House with executives from several leading AI developers, and the parties announced a voluntary framework — the "White House Accord on Super Intelligence" — centered on commitments regarding independent AI audits.

Why sophisticated counsel should care: a voluntary federal instrument aimed at frontier-model developers is a signal, not a rule, but commitments of this kind can migrate into hard requirements. Audit language of this sort tends to resurface in procurement clauses, in state AI statutes and their implementation paths, and in enterprise customer diligence, where a counterparty's willingness to submit to third-party model evaluation becomes a contract term. For major-firm clients on both sides of the transaction — labs raising capital, deployers, and vendors — the operative questions are who signed, what "independent audit" is defined to mean (evaluation methodology, access to weights and training data, disclosure of findings), whether findings are public, and what consequences attach to a missed commitment. None of that d

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On September 18, 2026, the Department of Justice announced two revisions to the Justice Manual that, per a law-firm alert, materially affect False Claims Act (FCA) enforcement and defense strategy: one addressing sub-regulatory guidance and the other addressing qui tam dismissals. The excerpt available here does not reproduce the text of the revisions, so the specific new standards, thresholds or procedural rules they impose cannot be characterized from this source alone.

Why it matters: the FCA remains one of the most consequential federal exposure channels for healthcare providers, pharma and device manufacturers, government contractors, and financial-services firms handling federal funds. Changes to how DOJ treats agency sub-regulatory materials, and to the department's handling of relator dismissal requests, bear directly on the strength and litigation posture of FCA claims — and on the settlement leverage of both claimants and respondents. Reported by a single firm alert so far, which suggests early-stage diffusion.

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California has enacted SB 1000, which according to the reported summary substantially rewrites the state's recently operative AI transparency regime for identifying and verifying AI-generated content. The change lands only weeks after the California AI Transparency Act (CATA), enacted in 2024 via SB 942, took effect — a compressed sequence in which the state's disclosure, provenance and labeling obligations have been adjusted before regulators and industry have settled.

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According to Vinson & Elkins, the Bipartisan American Affordability and Jobs Act of 2026, introduced September 30, 2026 by a bipartisan group of senators, is a sweeping federal permit reform package. It would add hard agency deadlines (seven days after an environmental assessment, 45 days after a final EIS, and 90- or 120-day clocks for participating and non-participating agencies), exempt many in-right-of-way interstate gas pipeline and electric transmission activities from NEPA and NHPA review, and narrow Clean Water Act Section 401 certification to direct discharges, with nine-month state deadlines for FERC pipelines and certain lines. It also sets a 150-day statute of limitations for environmental suits, funnels most NEPA, ESA and NHPA claims to the courts of appeals, and makes remand without vacatur the default remedy. Notably for developers, the bill would bar adverse post-permit actions against fully permitted non-federal projects and create government-paid remedies, including 25-50 percent of project costs to date, if the government loses such a suit. Energy clients should ca

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On September 30, 2026, the Securities and Exchange Commission issued two rule proposals and five notices framed as "responsible retailization" — a set of measures intended to widen individual investors' access to private markets. The package would, among other things, create additional routes to accredited investor status, and pair those eligibility changes with potential reforms to how registered funds may offer exposure to private assets.

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On September 17, 2026, the Washington Supreme Court issued a split decision in Climate Solutions v. State of Washington striking down Initiative 2066, a 2024 voter-approved measure designed to preserve the use of natural gas in Washington. The available reporting does not set out the full reasoning, the precise statutory basis, or the scope of any remedy, so the holding's contours should be confirmed against the slip opinion before it is relied on.

Why sophisticated counsel should care: an initiative enacted by direct popular vote — a mechanism Washington uses unusually often — has now been invalidated by the state's highest court. Whatever the doctrinal route, the decision will be read widely by utilities, municipal governments and clean-energy developers as a data point on how far Washington will allow statewide limits to constrain or displace local climate, building-electrification and gas-consumption policy. It also lands in a period of active state-level preemption litigation, where comparable initiatives are being contested elsewhere.

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California Governor Gavin Newsom has signed SB 947, reported as the "No Robo Bosses Act," amending the Labor Code to regulate employer use of automated decision systems (ADS): computational processes drawn from machine learning, statistical modeling, data analytics or AI that output scores, classifications or recommendations affecting individuals. Spam filters, firewalls, antivirus tools, calculators and databases are excluded, but vendor screening and analytics tools feeding performance management or exit decisions are likely in scope.

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On September 1, 2026, the Securities and Exchange Commission proposed a comprehensive overhaul of the regulatory framework for registered transfer agents, according to a Wilmer Cutler Pickering Hale and Dorr client alert published on JD Supra. The single source in this cluster describes the proposal and flags implications for onchain recordkeeping; the release as reported does not set out the rule text, the comment deadline, or which specific registration, books-and-records, or settlement provisions would change, so those details should be confirmed against the Federal Register notice and the SEC's own releases before any client reliance.

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On September 29, 2026, a New York Supreme Court judge issued an order cancelling all of New York City’s approximately 17,000 previously mailed notices concerning the pied-à-terre tax, which had informed property owners of their subjection to the levy. The decision addresses the procedural posture of the mailing campaign, not the underlying statute, and the city's implementation steps remain uncertain.

Why sophisticated counsel should care: the tax falls on residential units in multifamily buildings whose primary residence is an apartment of less than 1,000 square feet. Unit owners, including institutional landlords, sponsors, cooperatives and condominium boards, have been modelling pass-through costs, capital expenditure decisions and rent structures against the levy. Tens of thousands of affected units make this a cross-client issue for real estate and tax practices, and an unclear outcome invites contested assessments, refund claims and potentially significant litigation.

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On September 30, 2026, a federal district court in California enjoined USCIS, Customs and Border Protection and the State Department from enforcing or implementing any policy tied to the $100,000 H-1B payment created by Presidential Proclamation 10973 and extended through September 2027 by Proclamation 11069, until the agencies satisfy Administrative Procedure Act rulemaking obligations. The order issued in Global Nurse Force v. Trump, a coalition challenge brought by employers, unions, schools, healthcare providers and religious organizations.

The ruling is the second district-court setback for the fee: a separate Massachusetts decision already enjoined it and is under appeal in the First Circuit. For employers, the practical effect is that no $100,000 payment is presently required for H-1B petitions, including cases needing consular processing or port-of-entry admission. The source notes USCIS has signalled it intends to collect the payment if the injunction is later lifted, so budget and fee-reimbursement modelling may need revisiting.

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On September 28, 2026, the Treasury Department and the IRS issued Notice 2026-62 and Rev. Rul. 2026-20, focusing on a set of investment fund tax strategies that have grown quickly in recent years. According to the Venable summary, the revenue ruling reaches transactions immediately rather than applying only prospectively, a point that matters for clients already holding positions entered into under the older treatment.

Why sophisticated counsel cares: a revenue rule that lands with immediate effect can narrow or eliminate a position that funds, family offices, and institutional LPs treated as settled, and it may cut across structures rather than address a single transaction type. Advisers should expect questions about effective-date mechanics, grandfathering, and any administrative or legislative relief, none of which is confirmed in the available reporting.

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On September 30, 2026, Governor Gavin Newsom signed Assembly Bill 1776, the COMPETE Act, which California practitioners describe as extending the Cartwright Act to reach single-firm conduct. The significance is not cosmetic. California is the most active state venue for antitrust enforcement and private suits, and the attorney general has repeatedly used it to press theories federal law — notably Sherman Act Section 2 — has not embraced or has narrowed. A statutory route to liability for unilateral conduct would let plaintiffs and the AG proceed without proving a relevant market, monopoly power, or exclusionary agreements, lowering the burden in a state where such suits are already frequent.

Exposure is direct and derivative. Companies already defending California claims face an additional or alternative cause of action, and out-of-state companies face new venue risk in a plaintiff-friendly forum. Conduct lawful federally can still draw scrutiny under a broader state standard, complicating national and global settlement strategy.

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On September 23, 2026, the U.S. Court of Appeals for the Ninth Circuit decided Codoni v. Port of Seattle, No. 25-2830, and Alaska Airlines prevailed on federal preemption. The case addresses how far Section 233 of the Clean Air Act — the federal regime governing emissions from aircraft and airport ground operations at "major" airports — displaces state and local regulation. The available source does not set out the panel's reasoning or precise disposition, so the boundaries of the holding should be confirmed against the opinion.

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California Governor Gavin Newsom has signed Senate Bill 690, eliminating the private right of action for claims arising under California Penal Code Section 638.51, the state wiretap provision barring installation and use of "pen registers" and "trap and trace" devices without prior judicial approval. The change converts what had been a private-enforcement hook, and a recurring source of putative class actions, into a matter left to government enforcement, according to the reporting.

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On October 1, 2026, Assistant Attorney General Colin McDonald issued Directive 26-12, titled "Corporate Enforcement in the Fight Against Fraud," for the Department of Justice's National Fraud Enforcement Division. Reporting comes from a single law-firm alert, and the specific provisions of the memorandum — its charging, declination, cooperation, or resolution criteria — are not set out in the available material; the directive text should be read in full before any conclusions are drawn about its content or practical effect.

Even with details unconfirmed, a division-wide enforcement directive from the National Fraud Enforcement Division touches the calculus for every major-firm corporate client: how internal investigations are scoped, what preservation and cooperation posture is expected, and when resolution is realistically available. A stated corporate-enforcement framework also typically signals a shift in the division's internal triage and charging decisions, which can matter for parallel regulatory and private exposure.

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California has enacted SB 690, amending the California Invasion of Privacy Act (Cal. Penal Code § 638.51) to remove the private right of action for the law's "pen register" and "trap and trace device" provisions where the alleged violation arises from conduct on an internet website, online application, or mobile application; only the California Attorney General may bring civil-remedy actions in that category. The statute takes effect January 1, 2027 and, per the source, applies to claims in actions commenced during the two years before that operative date.

Why it matters: CIPA's $5,000-per-violation or triple-actual-damages remedy has driven a volume of class-action and prelitigation demands against companies deploying cookies, pixels, session-replay tools, and analytics tags — technology the statute's 1967-era language never contemplated. Sophisticated counsel should read SB 690 as a targeted channel provision, not a safe harbour.

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