DROPLETS

The FCC is scheduled to vote October 29, 2026 on a draft Report and Order and Further Notice of Proposed Rulemaking in the Evolving Risks proceeding (IB Docket No. 23-119), circulated October 8 and expressly subject to change. If adopted, the rules would take effect 60 days after Federal Register publication, though the amendments to sections 63.18, 63.19, 63.21 and 63.24 and the one-time collection would await OMB Paperwork Reduction Act clearance.

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The DLA Piper alert analyses a Court of Justice judgment in Case C-70/25, Tukowiecka, arising from a consumer who was phished after listing goods for sale on an online marketplace. The reference concerns the timing of a payment service provider's duty to return funds after an unauthorised payment transaction, and touches two recurring lines: whether a consumer may bear the loss where a payment was induced by deception rather than a technically defective transaction, and whether short refund deadlines sit comfortably with the Union payment services framework and the staged refund obligations for unauthorised instant payments.

Why it matters: the outcome sets the outer limit on how long a bank or other provider can sit on a consumer's money after a scam, which feeds directly into retail banking liability allocation, marketplace and platform payment arrangements, and fraud reimbursement practice.

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On October 21, 2026, the US Department of the Treasury and the Internal Revenue Service published a Notice of Withdrawal that partially withdraws the proposed regulations issued under Internal Revenue Code section 355, the statutory provision governing tax-free spin-offs. The withdrawn items include the proposed "device prohibition," under which the government had sought to deny tax-free treatment to a spin-off whose distribution or corporate purpose was viewed as lacking sufficient corporate business purpose, together with at least one further item the summary description of the notice does not specify.

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On October 29, 2026, the FCC is scheduled to vote on a draft Report and Order and Further Notice of Proposed Rulemaking (FCC-CIRC 2610-05, circulated October 8) rewriting international Section 214 authorization rules. The draft would cut the ownership disclosure threshold in application and transfer filings from 10% to 5% of equity and voting interests, with indirect equity attributed pass-through but voting interests computed under separate rules, and would exempt interests held through a US public company absent its actual knowledge. It would also require all existing authorization holders to file one-time 5% ownership and control information, with noncompliance risking forfeiture and revocation, plus 30-day notice of material changes. The Further Notice proposes presumptive disqualification, rebuttable only by clear and convincing evidence, for applicants owned by or directed by a foreign adversary, including Covered List entities and applicants with foreign adversary financing or leadership links.

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On October 22, 2026, the DOJ Civil Division and HHS announced a six-month Healthcare False Claims Act Self-Disclosure Pilot Program, which the announcing firm (Ropes & Gray) describes as offering favorable terms. The available report is an excerpt, so the operative details are not confirmed here: the scope of qualifying self-disclosures, the treatment of potential liability, and any relator-claim or damages consequences are not set out in the material reviewed and should be verified against the published program materials before any entity relies on them.

Why sophisticated counsel should care: FCA exposure is existential for providers, and a treble-damages-plus-penalty theory per false claim can outweigh a payer's entire margin for the affected claim year. A time-boxed disclosure window converts a discretionary reporting decision into a calendared one, and the sequencing of internal investigation, disclosure and corrective action relative to an existing government inquiry is often outcome-determinative.

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Treasury issued a proposed rule on October 22 implementing section 1001 of the 21st Century ROAD to Housing Act, which bars large institutional investors from acquiring single-family homes. The rule reportedly applies to entities that exercise investment control over 350 or more single-family homes, addressing the non-professional purchaser exemption that has allowed bulk buyers to operate at scale. For clients, the threshold is structural rather than incidental: a sponsor whose portfolio crosses it could face divestiture obligations or restructured acquisition vehicles, making holding-company design, aggregation rules and portfolio-level diligence live workstreams. Single-family rental operators, residential investment funds, homebuilders and the lenders financing them should read the full text for the definitions of investment control, any exemptions and phase-in mechanics before modeling deal pipelines. The proposal is not final, so obligations remain prospective. The next development to watch is the comment docket and any final rule; the source alert does not describe the comment

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The Department of Homeland Security has published an exclusion and removal order, signed by Secretary Markwayne Mullin under the Federal Acquisition Supply Chain Security Act of 2018, directing federal agencies to bar DeepSeek and its affiliates from civilian systems. The reported scope is unusually broad: the order is described as reaching third-party products built with DeepSeek's technology, not merely DeepSeek's own applications, which would capture vendors that have integrated DeepSeek models into software supplied to or used by federal agencies. Sophisticated counsel should read this as a supply-chain-security action with private-sector spillover, potentially touching product roadmaps, model-selection decisions, contractual representations about compliance with federal information-security restrictions, and diligence in government-facing transactions. Two thresholds matter for clients: how far "third-party products built with its technology" extends, and whether non-federal customers and counterparties follow the federal posture. Available reporting is truncated on operative de

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DOJ announced on October 13, 2026 that CVS Pharmacy Inc. and related corporate entities entered two settlement agreements resolving allegations that, from October 17, 2013 through December 2, 2025, CVS filled prescriptions unlawful under the Controlled Substances Act and submitted false claims to federal healthcare programs. The reported payment is $315 million, and the two agreements reportedly impose compliance obligations beyond the money itself. The source does not set out the allocation of the figure among False Claims Act, Controlled Substances Act and related penalties, or whether the resolution includes a deferred prosecution agreement or a corporate integrity agreement, so those structural details should be treated as unconfirmed until the agreements themselves are public. Three follow-ons matter for clients: the operational requirements the settlement places on pharmacy dispensing and prescriber verification; downstream exposure for health systems, prescribers and PBMs that supplied volume or data; and the interaction between federal relief and the separate multistate opioi

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Mayer Brown's legal update sets out deal-structuring considerations for "agentic managed services" — outsourcing arrangements in which a provider deploys AI agents to perform ongoing business and technology functions, with provider personnel monitoring, supporting and managing those agents, and the provider remaining accountable for delivery. Three elements define the structure: the service is defined around the outsourced function rather than around the agents; performance commitments measure the combined AI-and-human service; and charges reflect the cost and value of the agentic delivery model rather than legacy headcount or time-and-materials pricing. For major-firm clients this is a usable template for the next wave of enterprise outsourcing and technology-services mandates as vendors move agent pilots into accountable, production-scale delivery. Counsel should test liability and indemnity allocation for agent-generated outputs, ownership of agent-created work and training data, transition and exit rights if human-staffing assumptions change, and how service levels, audit rights

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Hogan Lovells reports that the UK Supreme Court handed down its decision on 21 October 2026 in Scottish Power (SPCL) Limited v HMRC [2026] UKSC 35, a corporation tax appeal against HMRC. The firm's note says the judgment makes a sustained effort to reconcile more than 100 years of caselaw on statutory continuity — how earlier capital tax provisions interact with later replacements — which matters for historic assessments and for taxpayers holding legacy capital allowance and depreciation positions.

The significance for major-firm clients is two-fold. First, the outcome potentially determines the treatment of old capital allowance and depreciation positions across a wide population of corporate taxpayers and their advisers. Second, because the reasoning is described as resolving an arc of case law running back into the early twentieth century, it may shape how HMRC argues continuity of statutory provisions in other disputes, and how taxpayers resist.

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Faegre Drinker's analysis dissects the EU's new Product Liability Directive (PLD), which updates the Union's 1985 product liability framework and requires each member state to transpose it into national legislation. Because PLD-style regimes operate on strict-liability principles, the practical consequence is that the substance of claims, the allocation of proof and the value of damages all change, not merely the labels used.

The alert's centre of gravity is the PLD's codification of novel categories of recoverable damages. The source's own framing is that the directive adds novel heads of loss; the specific reported categories include medical costs, loss of enjoyment, and losses tied to destroyed or corrupted data. That expansion is directly relevant to clients selling software, connected devices and AI-enabled products, where the boundary of "product" and the traditional repair-or-replacement measure of loss have long been contested. The PLD also introduces disclosure duties and rebuttable presumptions of defect and causation, which typically shift timing and cost earlier in dispu

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FDA has issued final guidance titled "Regulatory Considerations for Prescription Drug Use-Related Software," finalizing the September 2023 draft and setting out how the agency intends to apply its statutory authorities to software that supports prescription drug use.

The practical significance is clarity on regulatory pathway. Software functions that merely help a patient take a drug as directed — reminders, adherence prompts, dose logging — are generally not devices and fall outside FDA premarket requirements. Functions that recommend dosing, or that drive dosing decisions, typically cross into device jurisdiction and may require clearance or approval, potentially as a combination product. The guidance also bears on labeling and marketing claims, shaping promotion review, enforcement exposure, and product liability risk.

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On Oct. 21 the OCC published a 721-page final rule (RIN 1557-AF41) implementing the GENIUS Act for permitted payment stablecoin issuers and foreign payment stablecoin issuers within its jurisdiction, and for certain custody activities of OCC-supervised entities. It takes effect Jan. 18, 2027; BSA/AML and OFAC requirements are deferred to a separate Treasury-coordinated rulemaking. The final rule departs from its proposal: the rebuttable presumption that related-third-party arrangements are prohibited yield payments is eliminated, leaving the statutory yield ban as a fact-specific inquiry; three permitted PPSI activities are added (holding nonpayment stablecoins as principal to pay fees, establishing reserve-asset trusts, managing FX risk, subject to conditions); reserve diversification shifts to a principles-based approach with stress-testing and buffer requirements; no minimum insured-deposit amount is required of custodians; and PPSIs must notify the OCC within 24 hours if redemptions exceed 10% of a brand's outstanding issuance value, with discretion to extend redemption timelines

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On September 15, 2026, the New York City Commission on Human Rights adopted final amended rules implementing the Fair Chance Act (Local Law 4 of 2021); they take effect October 30, 2026. Employers must now give candidates and current employees at least five business days to respond to a criminal-history inquiry before revoking a conditional offer or taking adverse action, up from three, and must hold the position open meanwhile. The process now expressly covers current employees whose pending cases or convictions arise during employment, and requires the Fair Chance Employment Notice, the written inquiry, and a written Fair Chance Employment Analysis.

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OCC has finalized its stablecoin framework under the GENIUS Act, according to a Jones Day alert dated 26 October 2026. The source material available for this briefing is limited to the alert's headline, so the rule's specific provisions — the boundary between permitted payment stablecoins and other categories, issuer eligibility, reserve, disclosure, capital and liquidity treatment, custody and anti-money-laundering expectations, and the treatment of issuer applications — are not confirmed here and should be read directly from the adopting text.

What is confirmed is that the prudential regulator for national banks and federal savings institutions has moved from proposal to final rule on stablecoin issuance and related activity. That is the point in the statutory sequence at which bank and fintech clients can map product roadmaps, chartering and partner arrangements onto a settled federal framework rather than an interim one, and at which counsel can begin scoping supervision, compliance and disclosure obligations.

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On October 22, 2026, the U.S. Department of the Treasury issued a Notice of Proposed Rulemaking to implement the Comprehensive Outbound Investment National Security Act (COINS Act), enacted in December 2025. The NPRM is framed as broadening the outbound investment regime, and the Ropes & Gray alert is presented as "OISP 2.0," signalling a second phase of the outbound investment security program.

Why sophisticated counsel should care: outbound investment screening has become a standing national-security gate for transactions involving U.S. nexus technology and capital, and an NPRM is the point at which clients can still shape the operative text through comment. The scope of covered transactions, covered technology and sectors, and any exemptions or reporting mechanics in the proposed text will determine whether a transaction is reportable, permitted, or prohibited — and therefore whether deal timetables, diligence protocols, and covenant packages need revision. Because the source summary does not set out the proposal's substantive detail, its precise reach and any changes from the en

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Arnold & Porter reports that the U.S. Treasury Department and China's Ministry of Commerce have each proposed new steps intended to address U.S.-China competition in biotechnology. Taken together, the proposals could prohibit or restrict a broad range of transactions and collaborations between U.S. and Chinese entities, even as many licensing arrangements would continue to proceed.

Why sophisticated counsel should care: this is a dual-track national security and economic policy intervention sitting directly on top of deal pipelines. Life sciences clients with Chinese counterparties — in licensing, joint development, equity investment, supply or distribution arrangements — face a moving target, and counterparties, diligence postures and deal-structure choices can shift quickly before any measure is final. Because both governments are acting at once, structuring around a single regime will not suffice, and licensing carve-outs make the equity/commercial boundary in any agreement newly consequential.

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A published California Court of Appeal decision in McInerney v. Regents of the University of California gives employers meaningful relief under the California Fair Chance Act (CFCA). The court held the CFCA does not permit a court or jury to "second-guess" an employer's individualized assessment of an applicant's conviction history, rejecting the argument advanced by the California Civil Rights Department that the assessment's outcome must satisfy the statute's "direct and adverse relationship" standard. The panel also held the CFCA sets no seven-year limit on considering convictions, while noting that relying on older convictions in a Title VII or FEHA disparate-impact claim can create a rebuttable presumption that they are not job-related and consistent with business necessity. Critically, a plaintiff seeking damages for technical procedural violations, such as deficient notice, must prove actual harm — that the employer would have hired the applicant but for the deficiency. The court contrasted the CFCA with New York's ban-the-box law and California's ICRAA, which allow fixed stat

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What happened: On October 21, 2026, the Office of the Comptroller of the Currency issued a final rule implementing the GENIUS Act for permitted and foreign payment stablecoin issuers under its jurisdiction, and for related custody activities of OCC-supervised entities. The reporting comes from Orrick, Herrington & Sutcliffe's client alert.

Why sophisticated counsel and clients care: the GENIUS Act created a federal regime for payment stablecoins, and the OCC rule is the first rulemaking to translate the statute into binding requirements for issuers the OCC supervises — including entities seeking to serve the US market from abroad. Because the rule reaches both issuance and custody by OCC-supervised institutions, its scope is likely to touch banks, trust companies, and fintech partners that hold or service stablecoin reserves or customer balances. It also draws the perimeter between federal supervision and state regimes for issuers falling outside OCC jurisdiction, the point on which many market participants have been waiting for the first concrete line.

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Mayer Brown reports that California has become the first US state to legislate limits on the use of artificial intelligence by arbitrators and counsel. Because the material available for this briefing is limited to the firm's publication title and date, the statute's specific provisions, effective date and enforcement mechanism are not established here, and the "first" characterization is the firm's.

For major-firm clients and counsel, a state-law constraint on AI use in arbitration is a cross-practice compliance event rather than a single matter: arbitration clauses and protocols, arbitrator onboarding and disclosure statements, and any firm policy on generative-AI research or drafting all sit within potential reach. Counsel appearing before California arbitrators would need to know what is prohibited, what must be disclosed, and whether breach carries fee-shifting or disciplinary consequences, particularly if California is a venue with material caseload.

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In an en banc decision, the U.S. Court of Appeals for the Eleventh Circuit overruled Bolton v. Inland Fresh Seafood Corp. of America, Inc., a roughly four-decade-old precedent requiring ERISA plaintiffs to exhaust administrative remedies before pursuing statutory claims in court. According to the firm's summary, the court held that mandatory administrative exhaustion is no longer required for statutory ERISA claims.

The development matters because exhaustion has long functioned as a threshold defense in ERISA litigation, and courts have repeatedly dismissed or stayed claims on that basis. Removing the requirement strips employers and plan administrators of one of their most dependable early-stage dismissal tools, while shortening the path for plaintiffs to file claims, potentially before claim determinations are issued.

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President Trump issued Executive Order 14436 on October 16, 2026, titled "Implementing the Lindsey O. Graham Sanctioning Russia and Iran Act of 2026." Per the reporting available, the order is the operative instrument that activates the statute's sanctions architecture and simultaneously waives certain tariff measures.

For sanctions, export-control, and trade counsel, the statute was the headline; the implementing order is where the detail lands. Designations, sectoral and secondary restrictions, and any carve-outs determine what screening, diligence, contracting language (sanctions clauses, cargo routing, payment rails), and classification decisions now turn on the E.O.'s annexes rather than the statute's summary. Sophisticated clients also face an unusual pairing: sanctions exposure and tariff exposure are moving in opposite directions for the same counterparties, so one counterparty may carry both an embargo risk and a tariff-relief opportunity.

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