Regulatory Playbook

Trending Issues

The Dunes Sagebrush Lizard Saga Continues: FWS Lists the Species as Endangered, Draws Congressional Response
07.25.2024

On May 20, 2024, the U.S. Fish and Wildlife Service (Service) published a significant final rule listing the dunes sagebrush lizard (DSL) as endangered under the Endangered Species Act (ESA). 89 Fed. Reg. 43,748. This small lizard is at the center of a debate pitting species conservation against the oil and gas development in the Permian Basin, a region that currently produces about 2.5 million barrels of oil per day. The listing goes into effect on June 20, 2024, and is codified in 50 C.F.R. § 17. However, the Service has not included a designation of a critical habitat and has one year to do so.

Recent Ruling Addresses Applicability of Alternative A and Cape Town Convention in U.S. Bankruptcy Cases
07.24.2024

Although several non-U.S. airlines have filed for chapter 11 in the United States in recent years, no U.S. bankruptcy court has issued a written opinion analyzing the applicability of Alternative A (set forth in Article XI of the Aircraft Protocol to the Cape Town Convention) in a chapter 11 case. In a recent ruling, Judge Michael E. Wiles of the U.S. Bankruptcy Court for the Southern District of New York addressed Alternative A’s applicability in SAS A.B.’s chapter 11 case after an aircraft lessor relied on Alternative A to assert an administrative expense claim (rather than a general unsecured claim) for (i) the full rent specified in the underlying aircraft leases and (ii) amounts due because the debtors did not comply with the return conditions or maintenance obligations specified in the leases. See In re SAS AB, No. 22-10925, 2024 WL 3506430, (Bankr. S.D.N.Y. July 22, 2024).

The End of the Chevron Doctrine and the Reassertion of Judicial Primacy in Reviewing Federal Regulatory Actions
07.24.2024

In 1984, the U.S. Supreme Court (SCOTUS) decided Chevron USA, Inc. v. National Resource Defense Council. See 467 U.S. 839 (1984). The unanimous decision, written by Justice Stephens, reversed then-D.C. Circuit Judge Ruth Bader Ginsburg’s ruling that set aside EPA’s Clean Air Act “bubble policy,” which was intended to provide regulatory relief from certain EPA permitting requirements.

The EU’s AI Act: A Review of the World’s First Comprehensive Law on Artificial Intelligence and What This Means for EU and Non-EU Companies
07.19.2024

Regulation (EU) 2024/1689 (the AI Act) introduces a risk-based framework for regulating AI systems based on how those systems are used, along with a separate framework for regulating general-purpose AI models. Different obligations apply to various actors in the AI supply chain, including providers developing AI systems or GPAI models in the EU, deployers using AI systems in the EU, importers and distributors supplying AI systems into the EU, and product manufacturers incorporating AI systems into regulated products sold into the EU. The AI Act also applies to providers and deployers whose AI systems or their outputs are made available in the EU, regardless of their location, emphasizing its broad territorial scope and the need for global companies to align with its requirements.

U.S. Supreme Court Ruling Gives Insurers with Financial Responsibility “Party in Interest” Standing in Chapter 11 Cases Filed by Insured Entities
07.19.2024

On June 6, 2024, in Truck Insurance Exchange v. Kaiser Gypsum Company, Inc., the U.S. Supreme Court ruled unanimously that an insurer with financial responsibility for claims asserted in a bankruptcy has standing under the U.S. Bankruptcy Code to object to plan confirmation. The Supreme Court reversed a decision by the Fourth Circuit Court of Appeals denying an insurer standing based on the “insurance neutrality” doctrine but did not adopt the insurer’s position that the underlying insurance contract’s “duty to cooperate” triggered the insurer’s right to be heard in connection with the chapter 11 proceeding. Justice Sotomayor delivered the Supreme Court’s unanimous decision. Justice Alito did not take part in the decision.

Purdue Pharma and the Future of Nonconsensual Third-Party Releases in Chapter 15 Cases
07.19.2024

On July 27, 2024, the U.S. Supreme Court issued a long-awaited ruling regarding the validity of nonconsensual third-party releases in the chapter 11 plan of pharmaceutical company Purdue Pharma. In Harrington v. Purdue Pharma L.P., the Supreme Court held that absent consent from the affected claimants, the bankruptcy court lacked the power to approve a plan provision releasing Purdue’s founders, the Sackler family, from liabilities arising from Purdue’s sale of opioids. In reaching that result, the Supreme Court concluded that nonconsensual third-party releases fall outside the scope of section 1123(b) of the Bankruptcy Code, which limits the types of provisions a bankruptcy plan may include. It also reasoned that nonconsensual third-party releases contravene section 1141(d), which provides “a discharge” from liability only to “a debtor.”

Landslide Election Victory for UK Labour Party Marks Seismic Shift in UK’s Political Terrain
07.15.2024

Following 14 years of Conservative Party rule in the UK, Sir Keir Starmer’s Labour Party has formed His Majesty’s Government with a widely anticipated and substantial election victory at the ballot box on July 4, 2024, marking a seismic shift in the UK’s political terrain. There is now much speculation as to those areas on which Sir Keir Starmer will look to focus, and the earliest concrete signal we will see on his priorities will be the King's Speech, scheduled for the morning of July 17, 2024, which will set out the government's legislative agenda for the coming parliament.

U.S. Treasury Department Issues Proposed Rulemaking for Forthcoming Outbound Investment Program
07.15.2024

On June 21, 2024, the U.S. Department of Treasury issued a Notice of Proposed Rulemaking (NPRM) setting forth proposed regulations that would implement regulatory framework to review and prohibit certain investments in “countries of concern,” namely the People’s Republic of China (PRC), Hong Kong and Macau. This follows the Advanced Notice of Proposed Rulemaking (ANPRM) that was released in August 2023. The NPRM issued on June 21 builds on comments received in response to the ANPRM and seeks to clarify the scope and direction of outbound investment restrictions. Comments will be accepted on the NPRM until August 4, 2024.

Biden Signs ADVANCE Act into Law
07.11.2024

On July 9, 2024, President Biden signed into law the Accelerating Deployment of Versatile, Advanced Nuclear for Clean Energy Act (ADVANCE Act)—a historic nuclear energy package, and the latest of many positive developments in the nuclear energy policy and regulation space.

Legal Riffs: Music Industry Alleges AI Is Out of Tune
07.10.2024

In late June, Universal Music Group (UMG) Records, Sony Music Entertainment, and other major record labels filed two complaints against two generative artificial intelligence (“gen AI”) music startups, Suno, Inc. (Suno) and Uncharted Labs, Inc. (Udio). The concurrently filed complaints allege that the gen AI technology produced by Suno directly infringes on copyrights owned by these record labels. The complaints allege that the AI models used by Suno and Udio were trained on copyrighted records and, when prompted, produced music that closely resembles the copyrighted materials. These complaints follow a series of lawsuits filed against numerous gen AI platforms which raise legal and policy questions about the use of copyrighted creative works to train AI systems on digital platforms, and, most notably, whether such use of protected works constitutes fair use or copyright infringement.

U.S. District Court Enjoins Enforcement of Key Portions of DOL’s Davis-Bacon Act Rule
07.02.2024

On June 24, 2024, the U.S. District Court for the Northern District of Texas granted a nationwide preliminary injunction enjoining DOL from implementing and enforcing specific portions of section 5.2 and section 5.5(e) of its final rule entitled “Updating the Davis-Bacon and Related Acts Regulations.” DOL’s final rule was published August 23, 2023, and became effective on October 23, 2023. The Court found DOL engaged in “egregious violations” of Article II, section 3 of the U.S. Constitution, because DOL “usurped Congress’ law-making power and attempted to make substantive amendments to the DBA.”

Federal Appeals Court Holds That Nonprofit Foundation’s Race-Based Grant Giving Contest Likely Violates Federal Law
07.02.2024

On June 3, 2024, the U.S. Court of Appeals for the Eleventh Circuit issued a decision in American Alliance for Equal Rights vs. Fearless Fund Management, LLC, that has potentially far-reaching implications for nonprofit initiatives to direct grants to underserved minority populations. The Court of Appeals reversed a district court’s denial of a preliminary injunction and held that the Fearless Foundation (“Fearless”), the nonprofit foundation of an Atlanta-based venture capital firm, Fearless Fund Management LLC, should be enjoined from issuing grants reserved for small businesses owned by Black women. The court found that Fearless’s grant contest was “substantially likely” to violate the federal prohibition against race discrimination in making and enforcement of contracts, under 42 U.S.C. § 1981 (“Section 1981”). The Eleventh Circuit also found that the American Alliance for Equal Rights (AAER), a membership organization, had standing to bring suit based on anonymous declarations of its members who alleged that they had been harmed by being excluded from eligibility for the grant contest.

Treasury and IRS Issue Proposed Regulations Regarding the Clean Energy Production and Clean Electricity Investment Credits Under Sections 45Y and 48E of the IRC
06.27.2024

On June 3, 2024, the U.S. Department of Treasury (Treasury) and the Internal Revenue Service (IRS) published proposed regulations (Proposed Regulations) in the Federal Register [REG-119283-23] which provide initial guidance on the Clean Electricity Production Credit (CEPC) under section 45Y of the Internal Revenue Code (IRC) and the Clean Electricity Investment Credit (CEIC) under section 48E of the IRC (collectively, the Clean Electricity Tax Credits). The CEPC and CEIC were added to the IRC by the Inflation Reduction Act of 2022 (IRA) and apply to qualified facilities and energy property placed in service after December 31, 2024.

Having Property in the United States: A Prerequisite to Chapter 15 Relief?
06.25.2024

Chapter 15 of the Bankruptcy Code codifies the United Nations Commission On International Trade Law (UNCITRAL) Model Law on Cross-Border Insolvency, which was designed to facilitate cross-border cooperation and coordination between courts dealing with parallel proceedings. A chapter 15 case is an ancillary case filed in the United States to serve as a companion to a foreign insolvency proceeding and is initiated by requesting a U.S. bankruptcy court to recognize that foreign proceeding.

Maine Modifies Its Sweeping PFAS Law
06.21.2024

On April 16, 2024, Maine enacted amendments revising the state perfluoroalkyl and polyfluoroalkyl substances (PFAS) law. This law generally prohibits the sale of products containing intentionally added PFAS and includes notification requirements for products with intentionally added PFAS that would continue to be sold. The recent amendments modified the effective dates of certain sales bans, revised the reporting requirements for PFAS product manufacturers, delayed the general ban on the sale of PFAS products from 2030 to 2032, and listed the categories of products exempt from the PFAS ban entirely. While this law remains one of the strictest PFAS laws nationally, the new amendments ease some of the burdens on manufacturers presented in the original bill.

Is the “Revered Tradition of Amateurism” Over for College Sports?
06.18.2024

In 1984, Supreme Court Justice John Paul Stevens wrote that “[t]he [National Collegiate Athletic Association (NCAA)] plays a critical role in the maintenance of a revered tradition of amateurism in college sports.” To uphold this “revered tradition,” the NCAA needed “ample latitude” to set and enforce its rules without outside interference. For the next three-and-a-half decades, this principle could be relied upon by the NCAA in defense of its rulemaking authority and in response to pressure to rescind compensation restrictions on student-athletes.

In a Landmark Decision, Federal Circuit Expands Protest Jurisdiction at COFC
06.17.2024

On June 7, 2024, the U.S. Court of Appeals for the Federal Circuit issued its decision in Percipient.ai v. United States. The case was closely watched by the government contracting community because the Federal Circuit’s decision was poised to have significant impact on the bid protest jurisdiction of the U.S. Court of Federal Claims (COFC).

SBA Takes Final Step Towards Eliminating SDVOSB Self-Certification
06.12.2024

On June 6, 2024, Small Business Administration (SBA) issued a direct final rule affecting Service-Disabled Veteran-Owned Small Business (SDVOSB) credit. Under this new rule, agencies and prime contractors will not be able to receive credit towards their socio-economic contracting goals and subcontracting plan goals for SDVOSBs that are not certified by SBA’s Veteran Small Business Certification (VetCert) program. The rule includes a grace period. Self-certified SDVOSBs will continue to generate such credit until SBA acts on their application for VetCert certification, so long as they submit their VetCert application by December 22, 2024.

Summer Is Here, and So Is Cal/OSHA’s Indoor Heat Illness Standard (Almost)
06.12.2024

With summer in full swing, California employers should prepare to comply with the California Occupational Safety and Health Administration’s (Cal/OSHA) new indoor heat illness standard.

AI’s Power Play: Congress Calls for Smart Energy Solutions to Fuel AI Growth
06.10.2024

As artificial intelligence (AI) technologies continue to evolve and expand, their energy demands are growing significantly. This increase in energy consumption, driven by the proliferation of data centers and AI applications, presents both opportunities and challenges that intersect with national security interests.

Standing Down: Constitutional Standing Not Required for 337 Investigations
06.07.2024

On May 15, 2024, the U.S. International Trade Commission (Commission) issued the public version of its opinion in the Active Matrix Organic Light-Emitting Diode Display Panels and Modules for Mobile Devices, and Components Thereof investigation (Display Panels), in which it found that constitutional standing is not required to file an intellectual property-based section 337 complaint with the Commission. The Commission does, however, for jurisdictional purposes, require for patent cases that at least one complainant be the owner or exclusive licensee. The term “owner or exclusive licensee” has been interpreted to be the same as a “patentee” under 35 U.S.C. § 281, indicating that the Article III statutory standing requirement is similar to the Commission’s jurisdictional requirement for patent cases. This decision, together with a recent precedential Federal Circuit opinion related to the domestic industry requirement, further clarifies what a prospective complainant does—and does not—have to demonstrate in order to successfully institute and maintain a section 337 investigation.

Army Seeks Micro-Reactor Nuclear Power Plants to Reduce Reliance on Off-Site Electricity Providers
06.06.2024

The Defense Innovation Unit (DIU) has released a solicitation for Solution Briefs addressing the U.S. Army’s need for a full lifecycle prototype micro-reactor nuclear power plant(s). The solicitation contemplates that the chosen contractor will construct and retain ownership of the reactor, which must be licensed by the Nuclear Regulatory Commission (NRC). The micro-reactor will preferably supply between 3MW and 10MW of electrical power and must be in operation by the end of 2030.

After Long Drought, COFC Sustains a Corrective Action Protest
06.06.2024

On May 16, 2024, COFC issued its opinion in Kearney & Company, P.C. v. United States, Nos. 24-162 and 24-201, holding that the corrective action taken by the National Geo-Spatial Intelligence Agency after a post-award protest at GAO was arbitrary and capricious. In the protest, Kearney & Company, P.C. challenged the corrective action taken by the agency on the Audit Remediation and Sustainment Operations task order procurement under the General Service Administration (GSA) Federal Supply Schedule (FSS) multiple-award contract. The initial award to Kearney was terminated by the agency after a GAO protest. Before issuing a decision, GAO held an unrecorded outcome prediction conference where the GAO attorney stated that it would likely sustain one of the protest grounds—that Kearney’s quoted GSA FSS labor category did not match one of the key labor categories required by the solicitation.

Supreme Court Unanimously Rules Federal Arbitration Act Requires Federal Courts to Issue a Stay, Where Requested, When Lawsuits Involve an Arbitrable Dispute
06.05.2024

In Smith v. Spizzirri, 601 U.S. ____, 2024 WL 2193872 (May 16, 2024), a unanimous Supreme Court clarified the obligation of federal District Courts to stay cases pending the outcome of an arbitration where the court holds that the issues are arbitrable and a party requests a stay. The Supreme Court addressed the question of whether the Federal Arbitration Act (FAA), which provides procedures for the enforcement of arbitration agreements in federal court, permits a District Court to dismiss a case instead of issuing a stay after the court decides that the dispute is subject to an arbitration agreement and a party requests a stay pending arbitration. The Supreme Court unanimously decided that it does not.

California’s Ban on Drip Pricing Begins July 1, 2024
05.28.2024

Last October, California Gov. Gavin Newsom signed SB 478 into law. Effective July 1, 2024, the bill expands California’s already far-reaching consumer protection statute—the Consumer Legal Remedies Act (California Civil Code § 1750 et seq.) (CLRA)—to ban “drip pricing,” or “advertising a price that is less than the actual price that a consumer will have to pay for a good or service.” The term “drip pricing” refers to the practice of including additional undisclosed fees to a final bill, whereas the term “junk fees” refers to surcharges in a final bill that are unexpected or frivolous.

USTR Calls for Stakeholder Comments Following the Report on the Four-Year Review of the Section 301 Tariffs
05.24.2024

On May 14, 2024, the U.S. Trade Representative (USTR) published the Four-Year Review of Actions Taken in the Section 301 Investigation (“Report”), which addresses the four-year review of China-related tariffs under Section 301 of the Trade Act of 1974, as amended (“Trade Act”) (19 U.S.C. 2411). Our previous alert on this report is available here.

Implications of the U.S. DOJ’s Proposed Rescheduling of Marijuana
05.22.2024

Marijuana has long been classified as a Schedule I substance. Schedule I is reserved for substances that have no known medical use and have a high likelihood of abuse. A shift to Schedule III—which is reserved for substances with an accepted medical use and a moderate to low potential for physical and psychological dependence—would provide tax benefits for the industry and better opportunities to research marijuana’s medical benefits.

Treasury Department and IRS Issue Final Regulations on the Electric Vehicle Credits Under Section 30D of the Internal Revenue Code
05.21.2024

As modified by the Inflation Reduction Act of 2022, section 30D of the Internal Revenue Code of 1986, as amended (Code), provides for a tax credit of up to $7,500 for a new clean vehicle if certain requirements are met. The modified tax credit is divided between $3,750 in respect of battery components, and an additional $3,750 in respect of critical minerals. Eligibility for each part of the tax credit depends on the ability to satisfy domestic source requirements that have been met with some controversy due to difficulties in implementation and monitoring over time.