Congressional and Agency Debates
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Delaware Supreme Court Erects a “Formidable Obstacle” to Proving Counterparty Aiding and Abetting Liability in Merger Transactions08.07/Alert
On June 17, 2025, the Delaware Supreme Court reversed a nearly $200 million judgment against TC Energy (formerly TransCanada), which had been found liable for allegedly aiding and abetting fiduciary breaches by the former CEO and CFO of Columbia Pipeline Group, Inc. (Columbia) during merger negotiations. The Court’s decision affords significant protections against claims that buyers aided and abetted fiduciary breaches by those on the seller side by requiring that plaintiffs show the buyer’s actual knowledge of both the underlying seller-side breach and the wrongfulness of the buyer’s conduct.
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Legal and Tax Considerations in Home Service Business Roll-Ups: A Primer for Buyers and Sellers08.07/Alert
M&A activity in the home services sector—HVAC, plumbing, electrical, pest control, landscaping and other skilled trades—has surged in recent years. Private equity (PE) firms and fundless sponsors are pursuing roll-up strategies to consolidate fragmented markets, realize economies of scale and build regional or national platforms.
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OSHA Proposes Removing Application of General Duty Clause to Inherently Risky Professional Activities08.01/Alert
On July 1, 2025, OSHA proposed a rule titled, “Occupational Safety and Health Standards; Interpretation of the General Duty Clause: Limitation for Inherently Risky Professional Activities.” The proposed rule is intended “to exclude from enforcement known hazards that are inherent and inseparable from the core nature of a professional activity or performance.”
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Streamline, Simplify, Deregulate: The FCC Adopts “Direct Final Rule” Approach to Expedite Rule Deletions07.31/Alert
Earlier this year, Federal Communications Commission (FCC) Chairman Brendan Carr initiated a sweeping initiative to review “every rule, regulation, or guidance document” that could be eliminated “for the purposes of alleviating unnecessary regulatory burdens.” At its July Open Meeting, the Commission voted 2-1 to adopt a Direct Final Rule framework to enable it to act expeditiously in the In re: Delete, Delete, Delete proceeding to repeal certain legacy regulations that have become “outdated, obsolete, unlawful, anticompetitive, or otherwise no longer in the public interest.” The principal feature of the Direct Final Rule approach is to permit the elimination of rules without the notice and comment procedures typically required under the Administrative Procedure Act (APA). The FCC’s lone Democrat, Commissioner Anna Gomez, dissented, expressing concern that the Direct Final Rule process circumvents essential transparency and due process safeguards, sidestepping a mechanism for public involvement.
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New International Court of Justice Advisory Opinion Raises Global Liability Stakes Around GHG Emissions and Climate Change amid U.S. Federal Regulatory Retreat07.31/Alert
On July 23, 2025, the International Court of Justice (ICJ) issued a unanimous Advisory Opinion asserting the scope of states’ obligations under international law concerning the protection of the climate system. The Advisory Opinion is a long-awaited response to the U.N. General Assembly’s March 2023 request that ICJ advise regarding the obligations of U.N. member states to protect the climate and environment from anthropogenic emissions of greenhouse gases for present and future generations and the legal consequences to member states whose acts or omissions have caused harm. Proceedings leading up to the Advisory Opinion garnered the highest level of participation in the history of the ICJ and its predecessor organization—with hearing statements by 96 different national governments and 11 international organizations.
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DORA Now Fully in Effect: Financial Entities and Their Service Providers Reach Critical Milestone07.28/Alert
Since the EU Digital Operational Resilience Act (DORA) Regulation (EU) 2022/2554 came into effect on January 17, 2025, EU financial entities and providers of information and communications (ICT) services (ICT Providers) have shifted from compliance planning to active implementation of both internal and external measures in line with the new requirements introduced by DORA—by remediating contracts for ICT services, completing the financial entities’ registers of information detailing the contractual arrangements between the financial entity and its ICT Providers. However, the subcontracting requirements under DORA were significantly delayed, but the Commission Delegated Regulation (EU) 2025/532 supplementing Regulation (EU) 2022/2554 of the European Parliament and of the Council with regard to regulatory technical standards specifying the elements that a financial entity has to determine and assess when subcontracting ICT services supporting critical or important functions (Subcontracting RTS) have now been published and entered into force on July 22, 2025.
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Navigating New Waters: Getting Ahead of Extended Producer Responsibility Laws07.28/Alert
Companies across the United States are working diligently to understand their obligations and comply with packaging-related Extended Producer Responsibility (EPR) laws recently enacted by several states, including California (SB54), Colorado (HB22-1355), Maine (LD1541), Maryland (SB901), Minnesota (HF3911), Oregon (SB582B) and Washington (SB 5284). Other states, including Connecticut (HB06225), Hawaii (HB750), Illinois (HB4064), Massachusetts (H.833), New Jersey (SB426), New York (S1460), Rhode Island (S0939) and Tennessee (SB573) have recently proposed EPR bills, though some have been vetoed.
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From Paychecks to Perks: Navigating New OBBBA Rules on Compensation07.24/Alert
The One Big Beautiful Bill Act (OBBBA), enacted on July 4, 2025, may have made headlines for its political theatre, but included in the OBBBA are changes that will significantly reshape the compensation and employee benefits landscape. While many of these changes only become effective in 2026, proactive employers should begin planning now to address these changes, communicating these changes to employees and modifying plan documents and pay practices to accommodate these changes. Failure to adequately address these changes could lead to missed tax savings for employers and hamper employers’ efforts to recruit and retain key talent.
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Judge Starr’s Ruling in Metals.com Case Raises Jurisdictional Questions About CFTC Authority07.24/Alert
In CFTC v. TMTE Inc. (Metals.com), Judge Brantley Starr of the U.S. District Court for the Northern District of Texas issued an opinion that casts doubt on whether the Commodity Futures Trading Commission (CFTC) can assert antifraud jurisdiction over transactions involving gold and silver bullion under the Commodity Exchange Act (CEA). While the case involves alleged misconduct in the sale of precious metals to retirees, the court’s reasoning—if adopted more broadly—could implicate the scope of the CEA with respect to other non-agricultural products, including digital assets, interest rates, foreign exchange, energy products and energy attributes.
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CFTC Permits Listing of Perpetual Futures on BTC and ETH: A Regulatory Milestone for U.S. Crypto Derivatives07.22/Alert
Perpetual futures contracts—or “perps”—are a form of derivative that, unlike traditional futures, do not have an expiration date. They have become the dominant form of crypto derivatives trading globally, but until now, have largely been unavailable on regulated U.S. exchanges. On April 21, 2025, the Commodity Futures Trading Commission (CFTC) issued a 30-day Request for Comment (RFC) seeking public input on the risks and characteristics of perpetual derivatives. The comment period closed on May 23, 2025. While the RFC generated a broad range of industry and academic responses, the CFTC has not yet issued any new rulemaking, interpretive guidance or staff advisory in response.
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New UK Corporate Offense of “Failure to Prevent Fraud” Under Economic Crime and Corporate Transparency Act 2023: What Companies Need to Be Ready07.21/Alert
The long-awaited new corporate offense of Failure to Prevent Fraud (FTPF) under the UK’s Economic Crime and Corporate Transparency Act 2023 (ECCTA) will come into force on September 1, 2025. The ECCTA was born out of lobbying efforts by the UK white collar community for over a decade to improve corporate accountability. The ECCTA extended corporate criminal liability for economic crimes so as to hold corporations liable where an offense is committed by a senior manager of the corporation. Previously, the law required that an offense was committed by the “directing mind and will” of a corporation.
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McGowan v. Comm’r Provides Cautionary Tale of Too Good to Be True Insurance Tax Scheme07.21/Alert
“Even if we could turn back, we’d probably never end up where we started.” Dr. Peter E. McGowan, a Toledo dentist, would surely like to turn back and reconsider the day in 2010 that he lunched at a Toledo-area country club with an insurance agent, his health insurance advisor, an accountant and two attorneys. The lunch launched the dentist into an alternative universe not dissimilar to the surreal landscape in which Aomame, the main character of 1Q84 (the popular Haruki Murakami novel), found herself after she descended an emergency staircase from an elevated highway. And while Aomame ultimately scaled the same stairway to find her way back, McGowan and his C corporation dental practice were left in a fractured reality, incurring collective taxes and penalties totaling over 89% of the income that he sought to shelter. Although the numbers involved in McGowan’s odyssey were relatively modest, the case provides a cautionary tale for those who might otherwise go down the rabbit hole.
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New Bill Seeks to Provide Uniform Gaming Regulation Under IGRA for Two Texas Tribes07.17/Alert
A new piece of federal legislation has been introduced to address a decades-old inconsistency in federal law relating to Tribal gaming regulations for two Tribes located in Texas. In 1987, Congress enacted the Ysleta del Sur Pueblo and Alabama-Coushatta Indian Tribes of Texas Restoration Act (Restoration Act), which restored the trust relationship between the two Tribes and the U.S. government, while reserving for the State of Texas the right to prohibit certain kinds of gaming activities within the Tribes’ reservations. A year later, Congress enacted the Indian Gaming Regulatory Act (IGRA), which expressly authorized Tribal gaming on Indian lands as a matter of federal law and allowed a limited role for states by requiring Tribal-state gaming compacts for certain gaming activities.
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Texas Cyber Command: New Authority for Statewide Cybersecurity Coordination07.17/Alert
On June 2, 2025, Texas Governor Greg Abbott signed House Bill 150 into law, establishing the Texas Cyber Command, a component institution of the University of Texas System focused on strengthening cybersecurity across Texas government. Rather than adding a new regulator, the law establishes a centralized authority to coordinate cyber operations, threat response and readiness across public-sector entities.
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Congress Passes GENIUS Act: Landmark Framework for Payment Stablecoins Will Reshape U.S. Digital Asset Regulation07.17/Alert
In a landmark development for the digital asset industry, on July 17, 2025, the U.S. House of Representatives passed the Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act), following prior Senate approval in June. As we described in our prior client alert, the GENIUS Act creates the first unified U.S. legal framework for payment stablecoins. Once signed by President Trump and fully implemented by regulators, it will provide long-awaited clarity for the market and significantly reshape the regulatory landscape for payment stablecoins in the United States.
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Plasticizer PIP (3:1) Ban Is Still a Year Away, but Affected Companies Should Act Today07.16/Alert
As a plasticizer and flame retardant popularly used in numerous products, such as hydraulic fluids, lubricating oils, paints, industrial coatings, synthetic rubber and PVC, some companies may not even be aware that their products contain phenol, isopropylated phosphate (3:1) (PIP (3:1)). Pursuant to the Environmental Protection Agency (EPA)’s 40 C.F.R. § 751, promulgated as part of a final rule published in October 2024, articles containing PIP (3:1) will no longer be permitted in interstate commerce beginning October 31, 2026. Although that date is 15 months away, companies who use PIP (3:1) in their articles or manufacturing, or treat their articles with plasticizers, should be aware of this impending deadline and begin phasing out PIP (3:1) in both their finished products and supply chain.
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Department of Energy Seeks Input for the 2026 Energy Critical Materials Assessment07.11/Alert
On June 25, 2025, the Department of Energy’s (DOE) Office of Energy Efficiency and Renewable Energy released a Request for Information (RFI) to gather input for the 2026 Energy Critical Materials Assessment (CMA). The assessment will consider materials used in a broad range of technologies, including energy production, transmission and storage, as well as end-use applications in vehicles, buildings, industry, transportation and computing—such as semiconductors and electronics. Comments are due on July 25, 2025.
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Executive Orders Aim to Boost Drones, eVTOLs, Counter-UAS and Supersonic Flight07.10/Alert
On June 6, the White House issued three executive orders (EOs) directing the Federal Aviation Administration (FAA) to take action to expand commercial drone (UAS) operations and strengthen counter-drone capabilities. The EOs also direct the FAA to establish an electric-vertical-takeoff-and-landing (eVTOL) integration pilot program focused on advanced air mobility, cargo transport and medical response, and to lift an over 50-year ban on civil supersonic flight over land.
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Circuit Split No More: U.S. Supreme Court Upholds FCC Universal Service Fund Authority07.08/Alert
Schools, hospitals and libraries in poor and rural areas and millions of low-income American consumers can breathe a sigh of relief: they will continue to receive uninterrupted service subsidies through the Federal Communications Commission’s (FCC) Universal Service Fund (USF or Fund). On June 27, 2025, the U.S. Supreme Court issued a significant decision in FCC v. Consumers’ Research affirming the constitutionality of Congress’s delegation of authority to the FCC to administer the USF, thereby upholding the funding mechanism used to deliver subsidized phone, broadband and telecommunications service to millions of American consumers and community institutions. By a 6-3 vote, the Court reversed a ruling by the Fifth Circuit Court of Appeals that held both Congress’s delegation of USF authority to the FCC and the FCC’s subsequent delegation of its authority to a private administrator violated the Constitution (read our article on the Fifth Circuit’s July 2024 decision here). The decision also resolved a split in the circuit courts, as the Sixth and Eleventh Circuit Courts of Appeal had decided in favor of the FCC in similar proceedings.
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California Enacts Landmark CEQA Reforms to Accelerate Housing and Infrastructure Development07.07/Alert
On June 30, 2025, California Governor Gavin Newsom signed two major bills—Assembly Bill 130 (AB 130) and Senate Bill 131 (SB 131)—into law, enacting sweeping reforms to the California Environmental Quality Act (CEQA). Passed as part of the state budget package, these bills aim to reduce regulatory barriers and litigation risks for new infill housing and other community-oriented infrastructure projects. Together, AB 130 and SB 131 represent “the most significant reforms to CEQA ever considered by the Legislature,” according to State Sen. Scott Wiener.
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Congress Sends Big, Beautiful Bill for President’s Signature: Status of Clean Energy Tax Credits07.03/Alert
On July 3, 2025, Congress approved passage of the Big, Beautiful Bill (the “Bill” or “BBB”), with a number of provisions that will significantly impact the future of the renewable energy tax credits enacted by the Inflation Reduction Act of 2022 (IRA). President Trump is expected to sign the BBB into law tomorrow, July 4, 2025. A prior client alert discussed the differences between the Senate Finance Committee (SFC) version of the Bill initially released on June 16, 2025, and the version approved by the House of Representatives on May 22, 2025. A later client alert highlighted several changes in the version of the Bill that was advanced to the full Senate. In the discussion below, we provide some observations as to latest developments from the negotiation process for the BBB.
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The GENIUS Act: A New Federal Framework for Stablecoin Issuers07.02/Alert
On June 18, 2025, the U.S. Senate passed the Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act). This passage followed a successful cloture vote earlier in May. The bill obtained significant support, with 68 senators voting in favor. The bill will now move to the U.S. House of Representatives, where it is expected to pass due to its bipartisan support.
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Floating Charges Under English Law and Their U.S. Counterparts: A Comparative Insight for Cross-Border Lenders07.02/Alert
Creditors under English law can take many forms of security, including fixed charges, mortgages and assignments. One of the more unique features of English security is the floating charge. The English legal system distinguishes between fixed and floating charges, meaning they have different legal characteristics, control thresholds and consequences in insolvency. Floating charges do not have a direct equivalent in many other jurisdictions, including the United States.
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VietJet v FW Aviation: Latest Developments06.30/Alert
On 24 June 2025, the Court of Appeal dismissed in full the appeal brought by VietJet Aviation Joint Stock Company (“VietJet”) against FW Aviation (Holdings) 1 Limited (“FWA”) in relation to an ongoing aircraft leasing dispute, upholding the judgments made by the High Court in July and October 2024.
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Bipartisan Passage of House Bill 40 Clarifies Texas Business Court’s Jurisdiction06.30/Alert
On June 2, 2025, the Texas Senate passed House Bill 40 (HB 40), a bill that proposes significant changes to the state’s newly established Business Court. The bill expands the types of cases that the Business Court may hear, requires the Texas Supreme Court to adopt rules governing jurisdictional determinations and introduces key administrative reforms.
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Senate Votes to Advance the Big, Beautiful Bill – Latest on Renewable Energy Tax Credits06.30/Alert
On June 28, 2025, the Senate voted 51-49 to advance its version of the Big, Beautiful Bill (the “Bill” or “BBB”). As relates to renewable energy tax credits enacted by the Inflation Reduction Act of 2022 (IRA), the Senate’s version of the Bill differs in some significant respects from the version released by the Senate Finance Committee (SFC) on June 16, 2025, as summarized below. Our prior client alert discusses the differences in impact on renewable energy tax credits between the SFC version of the Bill and the version approved by the House of Representatives on May 22, 2025.
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SCOTUS Affirms Rules for Challenging Nuclear Regulatory Commission Licenses06.26/Alert
In Nuclear Regulatory Commission v. Texas, a 6-3 decision authored by Justice Brett Kavanaugh, the U.S. Supreme Court ruled in favor of Interim Storage Partners, LLC (ISP) and the Nuclear Regulatory Commission (NRC). The case concerned the NRC’s issuance of a license to ISP to build and operate a private away-from-reactor spent nuclear fuel storage facility in West Texas, an action the Fifth Circuit had invalidated as beyond the agency’s statutory authority.
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Status Update: Renewable Energy Tax Credits Under the Big Beautiful Bill06.23/Alert
With the Senate Finance Committee (SFC) releasing the text of its version of the Big Beautiful Bill (the “Bill” or “BBB”) on June 16, 2025, we provide a comparison of the competing proposals from the House and the SFC. In short, the House version of the BBB featured three principal changes to the renewable energy tax credit provisions enacted under the Inflation Reduction Act of 2022 (IRA): (i) accelerated expiration dates and phase-outs, (ii) repeal of cash transfer elections and (iii) imposition of limitations for associations with FEOCs. The SFC version of the BBB, in turn, (i) eases some of the expiration dates and phase-outs, (ii) allows cash transfer elections to continue for the remaining periods of tax credit availability and (iii) provides important guidance on the restrictions relating to FEOCs.
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U.S. Department of Labor Withdraws 2022 Crypto Guidance—What It Means for 401(k) Plan Fiduciaries06.12/Alert
On May 28, 2025, the U.S. Department of Labor Employee Benefits Security Administration (DOL) issued Compliance Assistance Release No. 2025-01 (the 2025 Release), officially rescinding its 2022 Compliance Assistance Release No. 2022-01 (the 2022 Release), which advised fiduciaries of 401(k) plans to “exercise extreme care” before including cryptocurrencies in the menu of investment alternatives available to participants under 401(k) plans and signaled an intent by the DOL to investigate plans that did so. The rescission represents a meaningful policy shift, effectively returning the DOL to a neutral posture—neither endorsing nor discouraging crypto—more aligned with the deregulatory stance of the Trump administration and consistent with broader trends across federal agencies aimed at encouraging responsible digital asset innovation.
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Texas Signals Its Commitment to Leading America’s Nuclear Energy Future Through Industry-Friendly Legislation06.11/Alert
Texas emerged from its 89th legislative session with a sweeping set of laws aimed at cementing the state’s leadership in advanced nuclear energy. Through the passage of HB 14, SB 1535 and SB 1061, lawmakers demonstrated a commitment to developing a robust nuclear ecosystem backed by regulatory reform, significant public investment and a forward-looking workforce strategy. This legislative package signals not only Texas’s confidence in nuclear power as a cornerstone of its future energy mix, but also its intent to create a nationally competitive environment for innovation and growth in the nuclear sector.
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Water, Reused: Texas Reshapes Liability and Regulatory Rules on Produced Water, Leaves Ownership Questions Unanswered06.09/Alert
The Texas Legislature passed a series of bills aimed at modernizing the legal and regulatory landscape for the handling and reuse of produced water—a byproduct of oil and gas operations. These developments address permitting, liability and inspection processes, with a focus on clarifying the respective roles and responsibilities among operators and regulators. The following update outlines key enacted and pending measures that are expected to influence compliance obligations, operational planning and strategic decisions related to produced water management across the state. Further, by promoting reuse, the legislation also supports efforts to ease pressure on Texas’s strained water supply, particularly in drought-prone and energy-intensive regions. However, legislation that would have clarified ownership of brine minerals failed to advance, leaving unresolved questions over who owns both brine minerals and produced water—an issue with growing importance as interest increases in extracting critical minerals like lithium from these resources.
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Texas SB6 Establishes New Transmission Fees and Interconnection Standards for Large Load Customers and Co-Located Loads06.09/Alert
On June 1, 2025, Texas Senate Bill 6 (SB 6), passed both chambers of the Legislature with bipartisan support and was sent to Governor Abbott for signature. Absent a veto by Gov. Abbott, the bill will become effective on September 1, 2025. SB 6 introduces significant changes to how large electricity users interact with the Electric Reliability Council of Texas (ERCOT) grid and marks a notable shift in regulatory policy to address concerns over grid reliability and cost allocations.
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SCOTUS Holds Intent to Cause Economic Harm Is Not Required for Wire Fraud, Expanding Liability06.04/Alert
On May 22, 2025, the U.S. Supreme Court decided Kousisis et al. v. United States, settling a Circuit split as to whether a federal fraud conviction can stand even if the defendant did not intend to cause the victim economic loss. In a decision written by Justice Amy Coney Barrett, with Justices Gorsuch, Thomas and Sotomayor authoring separate concurrences, the Court held it can.
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SCOTUS Limits Scope of NEPA Reviews, Reinstates Approval of Uinta Basin Railway06.02/Alert
In a highly anticipated decision for project developers and permitting agencies, the U.S. Supreme Court reversed the D.C. Circuit’s 2023 decision that had invalidated federal approval of the Uinta Basin Railway. In Seven County Infrastructure Coalition v. Eagle County, No. 23-975, ___ U.S. ___ (May 29, 2025), the Supreme Court clarified the limits of the National Environmental Policy Act (NEPA), reaffirming its procedural role and reenforcing the deference owed to agency judgments regarding the scope of environmental reviews.
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President Trump’s Nuclear Executive Orders: What Clients Should Know05.23/Alert
Today, President Trump signed four new Executive Orders (the “Orders”)—Ordering the Reform of the Nuclear Regulatory Commission, Reforming Nuclear Reactor Testing at the Department of Energy, Reinvigorating the Nuclear Industrial Base, and an order focused on Nuclear Energy for National Security—with a goal to quadruple U.S. nuclear power capacity by 2040. The overall goal of the Orders is to “expedite and promote to the fullest possible extent the production and operation of nuclear energy,”, which matches previous statements by Secretary of Energy Chris Wright that “America must lead the commercialization of affordable and abundant nuclear energy.”
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The Proposed “Big Beautiful Bill” May Disrupt Sports Team Investment Strategy05.23/Alert
The recently proposed “Big, Beautiful Bill” (BBB), currently under preliminary markup in the Senate Finance Committee, includes a suite of tax provisions aimed at deficit reduction, corporate reform and base-broadening. Of particular relevance to the sports investment community is a targeted revision to Internal Revenue Code (IRC) Section 197, which governs the amortization of intangible assets. The bill, as drafted, would restrict the 15-year amortization treatment for “specified sports franchise intangibles”—an essential feature underpinning the economics of sports team acquisitions. Investors, private equity sponsors and multi-asset portfolio managers engaged in sports M&A should take immediate note.
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New DOJ Initiative Expands FCA Use to Enforce Civil Rights Compliance and Target DEI Initiatives05.21/Alert
In a memorandum issued by Deputy Attorney General Todd Blanche on May 19, 2025, the U.S. Department of Justice (DOJ) announced the creation of the Civil Rights Fraud Initiative, a new enforcement effort that uses the federal False Claims Act (FCA) to pursue investigations and prosecutions of recipients of federal funding—including institutions of higher education, research centers and federal contractors—who allegedly falsely certify their compliance with federal civil rights laws. The FCA is known as the government’s “primary weapon against fraud, waste, and abuse,” because FCA violations can yield treble damages plus five-figure penalties for each false claim.
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DOJ Announces Shift in Approach to Prosecuting Corporate Crime05.16/Alert
On May 12, 2025, the Criminal Division of the U.S. Department of Justice issued a Memorandum outlining its new approach to white-collar criminal enforcement under the second Trump administration. Observing that “overbroad and unchecked corporate and white-collar enforcement burdens U.S. business and harms U.S. interests,” the Memorandum represents a notable shift in the Department’s tone.
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EDGAR Next Implements Significant System Updates05.15/Alert
Background On September 27, 2024, the Securities and Exchange Commission (SEC) adopted changes to the SEC’s Electronic Data Gathering, Analysis and Retrieval (EDGAR) system intended to modernize the EDGAR system by improving security measures, enhancing filers’ ability to manage their EDGAR accounts and more (collectively referred to as EDGAR Next). The new rules and form amendments became effective March 24, 2025, and will:
• update the EDGAR Filer Manual.
• amend Regulation S-T Rules 10 and 11, and Form ID; and -
847 Awaiting Takeoff: DCSA Issues Guidance on Expanded Scope of FOCI Assessments05.13/Alert
Section 847 of the National Defense Authorization Act for FY 2020 directs the Department of Defense (DoD) to move forward with proposing a new Defense Federal Acquisition Regulation Supplement (DFARS) rule that would expand the scope of companies subject to its foreign ownership, control, and influence (FOCI) evaluations. The anticipated DFARS rule would require bidders and subcontractors participating in DoD contracts valued at over $5 million, subject to certain exceptions, to disclose FOCI details during the bid or proposal stage and update those details when changes to their ownership structure that implicate FOCI concerns occur. Per guidance issued by the Defense Counterintelligence and Security Agency (DCSA), the rule is expected to be published within the next 12 to 18 months.
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Navigating Recent Government Contract Terminations—Key Considerations and Best Practices05.09/Alert
Contracting Officer’s Discretion and Legal Boundaries
The federal government possesses broad authority to terminate contracts for the government’s convenience under Federal Acquisition Regulation (FAR) 52.249-2. This rule, however, does not excuse bad faith or animus-driven terminations. It also does not mean that any government official can terminate a contract or a series of contracts for reasons of efficiency. The Court of Claims in Torncello v. United States, 681 F.2d 756 (Ct. Cl. 1982), emphasized that terminations must not be executed in bad faith or to secure a better deal elsewhere. Similarly, in Krygoski Construction Co. v. United States, 94 F.3d 1537 (Fed. Cir. 1996), the Federal Circuit held that terminations motivated by bad faith or abuse of discretion constitute a breach of contract. Of course, it is important to note that the discretion to terminate under FAR 52.249-2 belongs to the Contracting Officer and not the government more broadly. -
Global Capability Centers in 2025: Key Legal and Strategic Considerations05.07/Alert
Global Capability Centers (GCCs) have become strategic hubs for multinational corporations, financial institutions and other organizations because they can provide centralized control over high-value technology and back-office functions.
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Executive Order on Accreditation and Injunctions of Dear Colleague Letter Impact DEI in Higher Education05.07/Alert
On April 23, 2025, President Trump issued Executive Order 14279 (EO) directing the Secretary of Education (the “Secretary”) to “hold accountable” higher education accreditors that “engage in unlawful discrimination in accreditation-related activity under the guise of ‘diversity, equity, and inclusion’ initiatives.” Accreditation is a process where an independent accrediting agency evaluates a school or program to ensure it meets certain educational standards. The EO asserts that “accreditors have remained improperly focused on compelling adoption of discriminatory ideology, rather than on student outcomes” and sets out criteria for the Secretary to potentially remove recognition from accrediting bodies.
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The Ironic Impact of FinCEN’s New CTA Regulations on New York’s LLC Transparency Act05.05/Alert
The NYS LLC Transparency Act (the “New York Act”) became law in January 2024 and takes effect on January 1, 2026. When in effect, it would require limited liability companies formed or qualified to do business in New York to report their beneficial ownership to a database to be created and administered by the New York Secretary of State.
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Comparing Developments in U.S. and EU Strategies to Combat Forced Labor05.01/Alert
In recent years, a multinational focus on preventing forced labor within supply chains has shaped due diligence requirements for companies worldwide. Recent changes to global policies and potential shifts in enforcement appetite are set to reshape these requirements once again.
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DOJ Releases Its Data Security Program Compliance Guide04.23/Alert
On January 8, 2025, the U.S. Department of Justice (DOJ) issued its final rule (28 C.F.R. Part 202) implementing former President Biden’s Executive Order 14117 (Order), “Preventing Access to Americans’ Bulk Sensitive Personal Data and United States Government-Related Data by Countries of Concern.” The Order and final rule create the Data Security Program (DSP), which provides for restrictions or prohibitions on access to U.S. government-related data and Americans’ bulk sensitive data by specified countries of concern or covered persons. The regulations largely took effect on April 8, 2025, but additional affirmative compliance requirements for U.S. persons will take effect on October 6, 2025.
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CTA Deadline Approaching for Foreign Reporting Companies04.18/Alert
The Corporate Transparency Act (CTA) was adopted by Congress in January 2021 and became effective on January 1, 2024. Under the CTA and the initial regulations implementing it, “reporting companies” (corporations, LLCs, limited partnerships, some trusts, and certain other entities formed or first registered (i.e., qualified) to do business in the United States, its states or territories) were required to file information as to their “beneficial owners” in a non-public database managed by the Financial Crimes Enforcement Network (FinCEN), part of the U.S. Department of the Treasury. Reporting companies created or (if foreign) first registered in or after 2024 were required to file starting January 1, 2024. Reporting companies created or (if foreign) first registered prior to January 1, 2024, were initially required to file starting January 1, 2025. The CTA and regulations exempt numerous entities from being reporting companies subject to the strictures of the CTA.
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California SB 813 Proposes Landmark Safe Harbor for AI Development Through Certification04.17/Alert
California Senate Bill 813, authored by Senator Jerry McNerney, a former four-term member of the U.S. House of Representatives and author of the federal “AI in Government Act,” proposes the establishment of Multistakeholder Regulatory Organizations (MROs)—private entities which would be designated by the California Attorney General to certify the safety and compliance of AI models and applications. These certifications would serve not only as new governance benchmarks but also provide developers with a powerful affirmative defense against civil liability in certain legal claims.
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The EU’s Cyber Resilience Act: New Cybersecurity Requirements for Connected Products and Software04.15/Alert
The EU has adopted Regulation (EU) 2024/2847 (Cyber Resilience Act or CRA), which introduces new cybersecurity requirements for connected products, software and their remote data processing solutions. The CRA entered into force on December 10, 2024, and its main obligations will apply from December 11, 2027. From this date, “products with digital elements” (including hardware, software and supporting services) that do not comply with the CRA’s requirements cannot be sold in the EU.
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Supreme Court Issues New RICO Decision04.14/Alert
On April 2, 2025, the Supreme Court issued a decision in Medical Marijuana, Inc. v. Horn, resolving a circuit split as to whether a plaintiff may recover damages under RICO for business or property harm that derives from a personal injury.
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Share Transfer Tripwire: Some Hidden Risks in Deed of Adherence Clauses04.11/Alert
Certain provisions commonly found in joint venture and shareholder documentation for early-stage and investment companies are so ubiquitous that they are often accepted without negotiation or full consideration of their wider implications. One such clause, frequently included in the articles of association of English early-stage companies, provides that if a person wishes to transfer shares to a party not already bound by the existing shareholders’ agreement (SHA), then the transferor must ensure that the transferee executes a deed of adherence agreeing to be bound by the SHA (Deed of Adherence) as a condition of the transfer.
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U.S. Department of Justice Curtails “Regulation by Prosecution” in Digital Asset Enforcement04.10/Alert
What the New Policy Says
On April 7, 2025, Deputy Attorney General Todd Blanche issued a Memorandum titled, “Ending Regulation by Prosecution,” which outlines changes to the approach of the U.S. Department of Justice (DOJ) to digital assets and criminal enforcement. The stated goal of the Memorandum, which implements Executive Order 14178 (Strengthening American Leadership in Digital Financial Technology), is to effectuate President Trump’s directive that DOJ “end the regulatory weaponization against digital assets.” -
Lashify v ITC: The Federal Circuit Redefines the Domestic Industry Requirement04.08/Alert
Complainant Lashify, Inc. appealed an adverse decision by the U.S. International Trade Commission (Commission) which found that Lashify failed to satisfy the economic prong of the domestic industry requirement with respect to three asserted patents. In the underlying investigation, the presiding Administrative Law Judge “excluded expenses relating to sales, marketing, warehousing, quality control, and distribution.” Lashify, Inc. v. Int'l Trade Comm'n, 130 F.4th 948, 955 (Fed. Cir. 2025). On review, the Commission majority agreed, reasoning that it “‘is well settled that sales and marketing activities alone cannot satisfy the domestic industry requirement’” and that “expenses relating to warehousing, quality control, and distribution … are akin to those incurred by mere importers.”
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U.S. Department of Energy Reopens Funding Initiative for Gen III+ Small Modular Reactors with Key Modifications Reflecting Trump Administration Priorities04.07/Alert
On March 24, 2025, the U.S. Department of Energy (DOE) reopened its funding initiative for Generation III+ Small Modular Reactors (Gen III+ SMRs) with modifications aligned with the Trump administration’s policy priorities and energy policy objectives. The modified funding initiative focuses on regulatory streamlining, deregulation and the acceleration of energy infrastructure, while deprioritizing community-based initiatives. As part of this shift, DOE has removed requirements related to community engagement and workforce equity and clarified that award selection will be based solely on technical merit.
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Trump Launches $1 Billion Plus Investment Fast Track with New Executive Order04.04/Alert
Against the backdrop of rising global competition and ongoing industrial policy debates, on March 31, 2025, President Trump signed Executive Order (EO) 14255, “Establishing the United States Investment Accelerator,” aimed at encouraging large-scale domestic and foreign investment.
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EPA Announces Sweeping Deregulatory Agenda: The Complete Set of EPA’s 31 Actions and Affected Environmental Regulations04.03/Alert
In what it called “the greatest and most consequential day of deregulation in U.S. history,” the Environmental Protection Agency (EPA) announced its most expansive deregulatory initiative to date on March 12, 2025. Through a series of press releases and a public address by Administrator Lee Zeldin, the agency outlined 31 planned actions aimed at rescinding, revising or reconsidering existing environmental rules and policies. Each of the press releases, as well as the underlying regulations at issue, are linked below.
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SEC Ends Its Climate-Related Disclosure Requirements04.01/Alert
On March 6, 2024, the Securities and Exchange Commission (SEC) adopted final rules imposing new climate-related disclosure requirements on domestic and foreign registrants with respect to their annual reports and registration statements (Rules). Compliance was set to begin as early as the annual reports for December 31, 2025, for calendar-year-end issuers classified as large-accelerated filers.
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New Federal Anti-Hazing Requirements for College Campuses03.19/Alert
Collection of Data Regarding “Hazing Incidents”: January 1, 2025
The federal “Stop Campus Hazing Act” (the Act) amends a subsection of the Clery Act by expanding the annual security report (ASR) reporting requirements and requiring covered colleges and universities to include statistics of “hazing incidents” which occurred within the school’s Clery geography and were reported to campus securities or local police agencies. -
Forthcoming Enterprise-Wide and Egregious Violations from California’s Division of Occupational Safety and Health03.17/Alert
On March 25, 2025, the California Department of Industrial Relations will hold an advisory committee meeting to solicit input on proposed amendments to Division of Occupational Safety and Health (Cal/OSHA) regulations regarding so-called “enterprise-wide” and “egregious” violations.
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Anti-DEI Executive Orders Are Enforceable, for Now, After Fourth Circuit Lifts Preliminary Injunction03.17/Alert
On March 14, 2025, the U.S. Court of Appeals for the Fourth Circuit granted the Government’s motion for a temporary stay of a district court’s nationwide preliminary injunction against two Executive Orders that target diversity, equity, and inclusion (DEI) initiatives (the Anti-DEI EOs). The stay, in the case NADOHE v. Trump, was granted pending resolution of the Government’s appeal of the preliminary injunction. The order states that the court will set an expedited briefing schedule for that appeal.
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U.S. Bankruptcy Court Confirms Nonconsensual Third-Party Releases May Be Recognized Under Chapter 15 of the Bankruptcy Code03.14/Alert
On June 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 (i.e., holders of more than $40 trillion in mass tort claims), the Bankruptcy Court lacked the power to approve a plan provision releasing Purdue’s founders, the Sackler family, from such alleged liabilities. 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.”
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U.S. Bankruptcy Court Agrees to Enforce English Three-Step, with Third-Party Releases, Used by Mexican Auto Financer03.10/Alert
On February 24, 2025, U.S. Bankruptcy Judge Michael E. Wiles granted “recognition” of an English insolvency proceeding and enforced an order approving an English scheme of arrangement for a new shell entity created in England by its Mexican parent solely to effectuate an English restructuring that provides consensual and non-consensual third-party releases of the Mexican parent company, even though the new entity had little connection with England. In re Mega NewCo Limited, No. 24-12031 (MEW), 2025 WL 601463 (Bankr. S.D.N.Y. Feb. 24, 2025) (“in light of the support of all of the affected parties and their overwhelming consent to the English Scheme Proceeding and the approval of the Scheme of Arrangement, and the other factors that I have cited, I see no cause in this particular case to look past the form of the transactions or to pursue theoretical issues that no affected party wishes to pursue”).
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Council on Environmental Quality Rescinds NEPA Regulations03.07/Alert
As was widely anticipated, the Council on Environmental Quality (CEQ) recently rescinded its National Environmental Policy Act (NEPA) implementing regulations, eliminating the uniform framework that has governed NEPA compliance for decades. CEQ’s Interim Final Rule, published on February 25, 2025, removes 40 C.F.R. Parts 1500–1508 from the Code of Federal Regulations, dismantling longstanding procedural requirements for federal environmental reviews.
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Second Circuit Affirms Priority Payment of Broker Fees Included in Aircraft Leases Utilizing the “Billing-Date Approach” Under Bankruptcy Code § 365(d)(5)02.26/Alert
Airlines will always need access to new aircraft to expand and replace their fleets. When an airline utilizes an intermediary, such as a broker, it must pay a commission to lease or purchase aircraft. Depending on the number of aircraft obtained, commissions may be very expensive, necessitating payments over time. But what happens if the airline files for bankruptcy before paying out the commissions? If not properly structured to be included as part of the lease payments, the broker may be left with an unsecured claim which may be paid with pennies on the dollar. However, if the fees are included as part of the rent under the lease, they may qualify as priority claims, until the lease is rejected.
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Challenging Trump 2.0 En Masse Contract Terminations02.24/Alert
In recent weeks, the second Trump administration has begun en masse terminations of federal contracts for the government’s convenience-as-a-budget-cutting tactic. Contractors with the U.S. Agency for International Development have been most affected by this tactic, where the vast majority of the agency’s contracts have been terminated.
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Reshaped Priorities: Navigating Changes to FCPA and FARA Enforcement02.13/Alert
On February 10, 2025, President Donald Trump signed an Executive Order directing the Department of Justice (DOJ) to pause enforcement of the U.S. Foreign Corrupt Practices Act (FCPA), citing concerns over the competitive disadvantage that it imposes on U.S. businesses. Just days earlier, Attorney General Pam Bondi issued a memorandum signaling a narrowing of DOJ enforcement priorities with respect to the FCPA and Foreign Agents Registration Act (FARA). This alert provides an overview of the current state of FCPA and FARA enforcement, discussing the compliance implications of new DOJ policy for companies engaged in cross-border trade.
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California Governor Releases 2025 Budget Proposal to Move Banks and Financial Corporations to Single-Sales-Factor Apportionment02.13/Alert
On January 10, 2025, California Governor Gavin Newsom released his January Budget Proposal for the 2025 – 2026 fiscal year. Notably, Governor Newsom’s budget would increase tax revenue by requiring banks and financial corporations to move from an equally weighted three-factor formula, comprising property, payroll and sales factors, to a single-sales-factor formula for purposes of apportioning income to the state. Agricultural and extractive businesses would continue to use the three-factor formula. The proposed change would take effect immediately, beginning with tax year 2025. A copy of the trailer bill is available here.
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EPA Finalizes New Rule to Reduce and Reclaim Hydrofluorocarbons02.11/Alert
Prior to the Biden administration leaving office, EPA finalized another rule in its continued push to phase down the use of hydrofluorocarbons (HFCs) by issuing a final rule on October 11, 2024, to establish the HFC Emissions Reduction and Reclamation (ER&R) program. EPA’s new rule, discussed in more detail below, will significantly impact industries that rely heavily on commercial-scale refrigeration systems. Further, companies with facilities that rely on older systems may require more frequent equipment repair or replacement to comply with the rule.
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IRS Proposes New Rules to Implement the Expanded $1 Million Limit on Deductible Pay for Publicly Held Corporations01.31/Alert
Background
Section 162(m) of the Internal Revenue Code of 1986, as amended (Section 162(m)), disallows deduction by any publicly held corporation for applicable employee remuneration that is otherwise deductible with respect to any covered employee to the extent that such remuneration for the taxable year exceeds $1 million. The $1 million cap is not indexed for inflation and the limit applies to all publicly held corporations regardless of the corporation’s status as an “emerging growth company” or “smaller reporting company” for purposes of Securities and Exchange Commission (SEC) executive compensation disclosure rules. -
IRS Eases Form 1095-C Burden for Employers01.31/Alert
On December 23, 2024, President Biden signed into law the Paperwork Burden Reduction Act and the Employer Reporting Improvement Act, which together reduce the burden on employers to meet certain requirements under the Affordable Care Act (ACA). These laws specifically impact employers that are required to furnish IRS Forms 1095-B or 1095-C (collectively, “Forms 1095”) to their employees.
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White House Introduces Cyber Trust Mark Program01.29/Alert
Cybersecurity Trust Mark Program: Building Consumer Confidence in Internet of Things (IoT) Security
On January 7, 2025, the White House announced the finalization of its voluntary cybersecurity labeling program for wireless interconnected smart products administered by the Federal Communications Commission (FCC). The White House announcement comes after an 18-month public notice and comment period. The Cyber Trust Mark program seeks to provide consumers with a simple label to assess whether their Internet of Things (IoT) wireless connected devices in their home are cybersecure. -
FHWA Rescinds Longstanding Buy America Waiver for Manufactured Products01.28/Alert
On January 13, 2025, the U.S. Federal Highway Administration (FHWA) issued a final rule terminating a long-standing exception to “Buy America” domestic content requirements for manufactured products used in agency-funded projects.
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New ASTM Standard Aims to Facilitate Assessing Climate Risk and Resilience Considerations01.28/Alert
Owners, lenders and investors in real property have long relied on ASTM E 1527-21, a product of ASTM International, in connection with Phase I Environmental Site Assessments. This product is used to establish that “all appropriate inquiries,” as defined at 42 CFR § 9601(35)(B) and 40 CFR § 312.20(a), have been met in connection with a property. As a matter of law, the performance of an ASTM-compliant Phase I ESA enables prospective purchasers and lessees to satisfy one of the criteria for statutory protections against liability for pre-existing environmental conditions under the Comprehensive Environmental Response, Compensation, and Liability Act. It also constitutes an indicia that appropriate environmental due diligence has been performed regarding the property.