DROPLETS

On September 30, 2026, Governor Newsom signed AB 1776, the COMPETE Act, adding Business and Professions Code §§ 16730-16732 and, for the first time, extending California's Cartwright Act to single-firm monopolization and monopsony; it takes effect January 1, 2027. The enacted text is much narrower than the California Law Revision Commission's proposal: no private right of action, no Unfair Competition Law predicate, federal precedent is merely "at most instructive," and the Cipro analytical framework plus the "superior product, business acumen, or historic accident" defense now appear in the statute itself. Enforcement is limited to the Attorney General and district attorneys, who may seek civil penalties of up to $1 million per violation and mandatory injunctions.

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On October 7, 2026, the U.S. Court of Appeals for the Federal Circuit formally dismissed the government's appeal in Alta Wind I Owner Lessor C v. United States, ending a multi-year dispute over the valuation of renewable energy tax credits. As reported by McDermott Will & Emery, the outcome removes the appellate overhang that has shadowed how transferred credits are priced, and the firm's alert frames implications for credit valuations and for how the IRS may approach examinations of those transactions.

The significance is twofold. First, the dismissal leaves the valuation methodology the government challenged in place, which should reduce the discount some developers and offtakers apply when pricing transferred credits, and removes an argument that could have reweighted prices in pending transactions. Second, IRS scrutiny of credit transfer structures is not over: a failed appeal is not agency acquiescence, and examination positions taken during the appeal — including any transfer-pricing or basis documentation theories — remain live.

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On Oct. 14, 2026, the U.S. District Court for the District of Maryland denied preliminary relief to five associations challenging Executive Order 14398, "Addressing DEI Discrimination by Federal Contractors," and declined to temporarily enjoin the Federal Acquisition Regulation Council's implementing memorandum (National Ass'n of Diversity Officers in Higher Education v. Trump, No. 26-cv-1532 (D. Md.)). The court read "disparate treatment" as unlawful intentional discrimination, so the clause reaches conduct already barred by federal antidiscrimination law, and rejected vagueness challenges to the clause's tie to contract performance: the EO applies only to work performed under the contract containing the clause. The court also suggested contractors may still challenge enforcement targeting protected speech or conduct outside a covered contract's scope. Because this is a preliminary ruling, the case is unresolved and the EO and implementing memo remain in force. Sophisticated counsel will care because the construction narrows what the clause can be enforced against, while underlying

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The SEC has issued an order and request for comment (Release No. 34-106402) creating a time-limited, five-year framework under which tokenized national market system stocks may trade in the secondary market through permissioned automated market makers and liquidity pools. Because essentially every stock listed on the NYSE or Nasdaq is an NMS stock, the order is potentially applicable to the equity of most major U.S. public companies, extending the framework well beyond crypto-native issuers. For corporate counsel, the open questions are practical: which tokens and venues qualify, what disclosure, recordkeeping, and settlement arrangements are required, and how the regime interacts with existing shareholder agreements, transfer restrictions, and securities-lending or collateral workflows. The release is open to comment, so eligibility criteria, conditions, and the final shape of the exemption may still change, and the source here is a single firm's client alert rather than the order text. Counsel advising on tokenization, digital-asset custody, or market access should review the under

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Baker Botts reports that on September 29, 2026 the U.S. Court of Appeals for the Third Circuit issued a decision in Thomson Reuters v. ROSS that it characterizes as apparently the first federal appellate decision addressing whether training an AI system on copyrighted material qualifies as fair use; the firm's headline takeaway is that the court recognized a licensing market for AI training data.

For counsel advising AI developers, data licensors, publishers, and law-firm content owners, the significance is that a federal appellate court has treated AI training data as a legally cognizable licensing market rather than treating the use as categorically exempt — which can influence negotiation posture, licensing program design, and the shape of copyright claims and defenses in pending disputes. The published summary, however, does not set out the panel, the full reasoning, or which fair-use factors carried the outcome, and the firm itself hedges that this is the first such appellate decision. Watch for further coverage of the opinion, petitions for rehearing or certiorari, and paralle

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The Office of the Comptroller of the Currency promulgated a final regulation implementing GENIUS Act requirements for permitted payment stablecoin issuers and foreign payment stablecoin issuers within the OCC's jurisdiction. The rule also covers certain custody activities by OCC-supervised entities and revises capital adequacy standards, prompt corrective action regulations, assessment of fees, and OCC rules of practice and procedure. The same daily update flags two cross-border supervisory items: an SEC memorandum of understanding with France's Autorite des Marches Financiers to facilitate consultation and information-sharing on SEC-regulated investment advisers and investment companies and AMF-supervised investment service providers, and the SEC-FSA Autumn Financial Regulatory Dialogue held in Tokyo on October 19. NCUA separately announced a 13th round of deregulation proposals covering nonconforming investment special reserves, conversion to a state-chartered credit union, and member notification of administrative changes.

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The EEOC sent to OIRA on October 16, 2026 a final rule (RIN 3046-AB43) withdrawing the interpretive portions of its Uniform Guidelines on Employee Selection Procedures, 29 C.F.R. Part 1607 — the federal roadmap for showing a selection procedure with adverse impact is job-related and consistent with business necessity. The text is not yet public; the EEOC's agenda projects final action in November 2026 and an effective date in January 2027, and current obligations remain until Federal Register publication. Title VII still supplies disparate impact liability, so rescission removes the guidance, not the legal standard. A separate proposal (RIN 3046-AB45) would rescind UGESP recordkeeping and validation documentation; the EEOC's general retention rule survives, and pending EEO-1 rescission would leave state and local collection duties as the main remaining mandate for applicant demographic data. Counsel should inventory which validation studies, vendor bias audits and four-fifths analyses rest on UGESP concepts, and consider directing adverse impact analyses to preserve privilege. Watch

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On October 12, 2026, the California Office of Administrative Law approved the California Air Resources Board's Initial Regulation implementing SB 253, the statute that codifies California's climate-related financial risk disclosure and corporate greenhouse gas reporting program. This is the operative rule rather than a proposal, so the scoping, thresholds, phasing and recordkeeping terms set out in the approved regulation now anchor compliance planning for entities doing business in California.

Why sophisticated counsel and clients care: the regime reaches companies with California operations irrespective of place of incorporation, and the approved text will shape data collection, internal controls, assurance readiness and the treatment of climate risk in disclosure documents, financing covenants and transaction diligence. Federal and multi-state climate disclosure initiatives remain in flux, so counsel should not assume this state rule is the last word or that it displaces other reporting obligations.

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What happened: According to a Sheppard Mullin legal alert (published October 21, 2026), the US Supreme Court on February 20, 2026 held that the International Emergency Economic Powers Act does not authorize the President to impose tariffs, invalidating the IEEPA tariff program. The alert further reports that the replacement tariffs enacted after the decision have now expired, so the measures that took their place are no longer in force either.

Why counsel should care: IEEPA was the executive branch's principal vehicle for imposing duties, and companies in retail, consumer goods, industrials, autos, and energy have priced, contracted, and filed protests around a tariff regime that no longer has a legal basis. With the IEEPA tariffs invalidated and the replacement measures lapsed, the duty landscape for importers is unsettled: which statutory authorities, if any, now support duties; whether liquidation and protest deadlines keep running; whether entries should be modified or drawback pursued; and how contracts referencing tariff costs are affected.

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California's Office of Health Care Affordability has issued final regulations implementing Assembly Bill 1415, extending and clarifying the state's health care transaction notice regime. According to Wilson Sonsini Goodrich & Rosati's summary, the package adds guidance on how notice requirements apply to private equity, venture capital and management services organization transactions — categories often missed by parties treating a deal as ordinary corporate M&A rather than a change in control of a health care entity.

Why sophisticated counsel should care: the regime operates alongside federal Hart-Scott-Rodino analysis and other state review statutes, carrying filing obligations and potential cost or timing consequences for signed-but-unclosed deals. Final regulations are the point at which diligence checklists, engagement letters and closing conditions can be updated with confidence rather than inference. Operative dates and transition provisions should be confirmed against the rulemaking text, which this single-source summary does not reproduce.

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On 12 October 2026 the EU added a record 826 entities and 743 individuals to its Russia asset-freeze list, all linked to Russia's military-industrial complex, plus further designations the source describes only in part (an additional 77 listings, with the excerpt truncated). In parallel, the UK targeted Russia-linked oil, crypto and supply networks.

Why counsel care: designations are not declaratory. Asset freezes and criminal exposure for dealing with listed persons flow directly into counterparty and beneficial-owner screening for banks, traders, shippers, exchanges and law firms themselves. Oil and crypto chains are most exposed: opaque ownership, layering and mixer-based settlement make it hard to show a counterparty is unlisted, and a sectoral measure can strand cargo mid-transit.

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On September 8, 2026, eleven European countries — Denmark, Finland, France, Iceland, Ireland, Norway, Poland, Portugal, Spain, Sweden and the United Kingdom — together with Canada issued a joint statement confirming their intention to restrict trade with Israeli settlements. The source, a Morgan Lewis client alert, does not identify the specific legal instruments, product codes or timelines, so implementation will likely run through each jurisdiction's own export-control, sanctions or customs regimes rather than a single supranational rule.

The practical significance for major-firm clients is screening and contracting rather than headline policy. Importers, distributors and manufacturers with settlement exposure will need to trace origin, re-map supplier onboarding and payments, and assess whether supply agreements contain change-of-law, sanctions or force majeure clauses that domestic measures could trigger. Multinationals also face inconsistent-obligation risk where a home jurisdiction declines to follow, creating divergent compliance standards across one supply chain.

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On September 30, the U.S. District Court for the Northern District of California approved a settlement resolving a Clayton Act Section 7 challenge brought by a coalition of 12 states against Paramount Skydance's $110 billion acquisition of Warner Bros. Discovery; the merger closed on October 6. The states had filed State of California v. Paramount Skydance Corp. on July 13 seeking to permanently block the transaction. The available reporting does not describe the settlement's substantive terms, which in comparable state AG remedies typically involve conduct obligations, divestitures, or monitoring, so counsel should pull the filed stipulation, any injunctive terms, and any DOJ or FTC comments before advising clients.

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On 15 October 2026 the Court of Justice of the European Union decided C-203/25 (Neo Group), a reference concerning the EU Parent-Subsidiary Directive's zero-rate dividend withholding tax exemption, holding that the circumstances in which anti-abuse rules may apply to that exemption are broader than previously understood. In practical terms, the judgment signals that a treaty-based zero rate is not a safe harbour: features of a holding arrangement that make it artificial, or the absence of a genuine business purpose, can be scrutinised before the exemption is granted, with the referring national court applying its domestic anti-abuse standard. The only source here is a law-firm alert summarising the decision, so the precise scope of the reasoning, the anti-abuse criterion endorsed and the fiscal conditions at issue should be confirmed against the judgment and any Advocate General opinion before reliance. Why sophisticated counsel should care: structured holding companies, treasury centres and IP-owning groups route dividends through intermediate jurisdictions because the exemption's p

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The FTC announced on October 2, 2026 that it has agreed to settle its price discrimination case against Southern Glazer's Wine and Spirits, LLC, described as the first Robinson-Patman Act enforcement action since the statute was amended in 1990 and effectively the first in a generation, marking a revival of a provision most practitioners have treated as dormant. The case concerns discriminatory pricing terms offered to competing wholesale customers; the available source material does not set out the complaint's allegations in detail, the settlement's injunctive terms, or any monetary relief, so the scope of the FTC's theory should be read from the agency's announcement and the administrative order itself. The development matters well beyond wine and spirits: RPA liability turns on the structure of discrimination between similarly situated customers, and the FTC's framing of customer tiers, volume discounts, rebates and promotional allowances will shape how suppliers document pricing decisions. The order and complaint are the next documents to review, since a first-of-its-kind complai

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On September 30, 2026, the FCC voted 3-0 to adopt Report and Order 26-67, which substantially revises the rules governing how consumers revoke consent to autodialed and prerecorded voice calls and text messages. The provision highlighted in the source allows a business that captures consent through a designated opt-out mechanism to have that mechanism operate as the exclusive means by which a consumer withdraws consent, narrowing the set of revocation theories a plaintiff can plead. Counsel should care because defective consent is the standard predicate for TCPA and analogous state mini-TCPA exposure, and shifting the burden of proving revocation can affect the merits of putative class-wide disputes, class certification strategy, and settlement valuation. Businesses should audit consent capture and opt-out language against the Order before it takes effect, route revocation requests received outside the designated channel into a captured record rather than disregarding them, and re-test prior express written consent and do-not-call documentation. Watch for Federal Register publication

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